CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 13 AND 39 WEEKS ENDED SEPTEMBER ~~29, 2016~~28, 2017

Accounting Policies - Refer to the Company’s audited consolidated financial statements (including footnotes) for the ~~transition period~~fiscal year ended December ~~31, 2015,~~29, 2016, contained in the Company’s ~~Transition~~Annual Report on Form 10-K, for such year, for a description of the Company’s accounting policies.

Basis of Presentation - The unaudited consolidated financial statements for the 13 and 39 weeks ended September ~~29, 2016~~28, 2017 and September ~~24, 2015~~29, 2016 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at September ~~29, 2016,~~28, 2017, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s ~~Transition~~Annual Report on Form 10-K for the ~~transition period~~year ended December ~~31, 2015.~~29, 2016.

Restricted Cash – Restricted cash consists of bank accounts related to capital expenditure reserve funds, sinking funds, operating reserves and replacement reserves and may include amounts held by a qualified intermediary agent to be used for tax-deferred, like-kind exchange transactions. At September 28, 2017, approximately $3,057,000 of net sales proceeds were held with a qualified intermediary. Restricted cash is not considered cash and cash equivalents for purposes of the statement of cash flows.

Depreciation and Amortization - Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $12,946,000 and $37,368,000 for the 13 and 39 weeks ended September 28, 2017, respectively, and $10,537,000 and $31,214,000 for the 13 and 39 weeks ended September 29, 2016, ~~respectively, and $10,353,000 and $29,955,000 for the 13 and 39 weeks ended September 24, 2015,~~ respectively.

~~Long-Lived Assets -~~ The Company periodically considers whether indicators of impairment of long-lived assets held for use are present. If such indicators are present, the Company determines whether the sum of the estimated undiscounted future cash flows attributable to such assets is less than their carrying amounts. The Company recognizes any impairment losses based on the excess of the carrying amount of the assets over their fair value. For the purposes of determining fair value, defined as the amount at which an asset or group of assets could be bought or sold in a current transaction between willing parties, the Company utilizes currently available market valuations of similar assets in its respective industries, often expressed as a given multiple of operating cash flow. The Company evaluated the ongoing value of its property and equipment and other long-lived assets as of September 29, 2016 and December 31, 2015 and determined that there was no impact on the Company’s results of operations. During the 39 weeks ended September 24, 2015, the Company determined that indicators of impairment were evident at a specific hotel location and that the sum of the estimated undiscounted future cash flows attributable to this asset was less than its carrying amount. As such, the Company evaluated the ongoing value of this asset and determined that the fair value, measured using Level 3 pricing inputs (estimated cash flows including estimated sales proceeds), was less than its carrying value and recorded a $2,600,000 impairment loss. Additionally, during the 39 weeks ended September 24, 2015, there was an impairment triggering event related to several assets at closed theatres. The Company determined that the fair value of these theatres, measured using Level 3 pricing inputs (estimated sales proceeds based on comparable sales), was less than their carrying values, and recorded pre-tax impairment losses of $319,000 during the 39 weeks ended September 24, 2015.

Accumulated Other Comprehensive Loss – Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets consists of the following, all presented net of tax:

Swap
Agreements

Available
for Sale
Investments

Pension
Obligation
Accumulated
Other
Comprehensive
Loss
(in thousands)
Balance at December 31, 2015 $ 9 $ (11 ) $ (5,219 ) $ (5,221 )
Amortization of the net actuarial loss and prior service credit - - 163 163
Other comprehensive loss before reclassifications (143 ) - - (143 )
Amounts reclassified from accumulated other comprehensive loss ⁽¹⁾ 134 - - 134
Net other comprehensive income (loss) (9 ) - 163 154
Balance at September 29, 2016 $ - $ (11 ) $ (5,056 ) $ (5,067 )

	Available for Sale Investments			Pension Obligation			Accumulated Other Comprehensive Loss

	(in thousands)
Balance at December 29, 2016	$	3		$	(5,069	)	$	(5,066	)
Change in unrealized gain on available for sale investments		(14	)		-			(14	)
Amortization of the net actuarial loss and prior service credit		-			161			161
Net other comprehensive income (loss)		(14	)		161			147
Balance at September 28, 2017	$	(11	)	$	(4,908	)	$	(4,919	)

Swap
Agreements

Available
for Sale
Investments

Pension
Obligation
Accumulated
Other
Comprehensive
Loss
(in thousands)
Balance at December 25, 2014 $ 116 $ (11 ) $ (4,580 ) $ (4,475 )
Amortization of the net actuarial loss and prior service credit - - 199 199
Other comprehensive loss before reclassifications (282 ) - (902 ) (1,184 )
Amounts reclassified from accumulated other comprehensive loss ⁽¹⁾ 87 - - 87
Net other comprehensive loss (195 ) - (703 ) (898 )
Balance at September 24, 2015 $ (79 ) $ (11 ) $ (5,283 ) $ (5,373 )

	Swap Agreements			Available for Sale Investments			Pension Obligation			Accumulated Other Comprehensive Loss

	(in thousands)
Balance at December 31, 2015	$	9		$	(11	)	$	(5,219	)	$	(5,221	)
Amortization of the net actuarial loss and prior service credit		-			-			163			163
Other comprehensive loss before reclassifications		(143	)		-			-			(143	)
Amounts reclassified from accumulated other comprehensive loss⁽¹⁾		134			-			-			134
Net other comprehensive income (loss)		(9	)		-			163			154
Balance at September 29, 2016	$	-		$	(11	)	$	(5,056	)	$	(5,067	)

⁽¹⁾ Amounts are included in interest expense in the consolidated statements of earnings.

Earnings Per Share - Net earnings per share (EPS) of Common Stock and Class B Common Stock ~~is computed using the two class method. Basic net earnings per share~~ is computed by dividing net earnings by the weighted-average number of common shares outstanding. Diluted net earnings per share is computed by dividing net earnings by the weighted-average number of common shares outstanding, adjusted for the effect of dilutive stock options using the treasury method. Convertible Class B Common Stock is reflected on an if-converted basis. The computation of the diluted net earnings per share of Common Stock assumes the conversion of Class B Common Stock, while the diluted net earnings per share of Class B Common Stock does not assume the conversion of those shares.

Holders of Common Stock are entitled to cash dividends per share equal to 110% of all dividends declared and paid on each share of Class B Common Stock. As such, the undistributed earnings for each period are allocated based on the proportionate share of entitled cash dividends. The computation of diluted net earnings per share of Common Stock assumes the conversion of Class B Common Stock and, as such, the undistributed earnings are equal to net earnings for that computation.

The following table illustrates the computation of Common Stock and Class B Common Stock basic and diluted net earnings per share for net earnings and provides a reconciliation of the number of weighted-average basic and diluted shares outstanding:

13 Weeks
Ended
September 29,
2016 13 Weeks
Ended
September 24,
2015 39 Weeks
Ended
September 29,
2016 39 Weeks
Ended
September 24,
2015
(in thousands, except per share data)
Numerator:
Net earnings attributable to
The Marcus Corporation $ 14,372 $ 10,871 $ 29,160 $ 23,125
Denominator:
Denominator for basic EPS 27,574 27,588 27,522 27,523
Effect of dilutive employee stock options 427 310 343 318
Denominator for diluted EPS 28,001 27,898 27,865 27,841
Net earnings per share - basic:
Common Stock $ 0.54 $ 0.41 $ 1.09 $ 0.87
Class B Common Stock $ 0.49 $ 0.37 $ 0.99 $ 0.78
Net earnings per share - diluted:
Common Stock $ 0.51 $ 0.39 $ 1.05 $ 0.83
Class B Common Stock $ 0.48 $ 0.37 $ 0.98 $ 0.78

	13 Weeks Ended September 28, 2017		13 Weeks Ended September 29, 2016		39 Weeks Ended September 28, 2017		39 Weeks Ended September 29, 2016

	(in thousands, except per share data)
Numerator:
Net earnings attributable to The Marcus Corporation	$	10,978	$	14,372	$	30,555	$	29,160
Denominator:
Denominator for basic EPS		27,825		27,574		27,773		27,522
Effect of dilutive employee stock options		525		427		637		343
Denominator for diluted EPS		28,350		28,001		28,410		27,865
Net earnings per share - basic:
Common Stock	$	0.41	$	0.54	$	1.14	$	1.09
Class B Common Stock	$	0.36	$	0.49	$	1.02	$	0.99
Net earnings per share - diluted:
Common Stock	$	0.39	$	0.51	$	1.08	$	1.05
Class B Common Stock	$	0.37	$	0.48	$	1.01	$	0.98

Equity– Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interests for the 39 weeks ended September ~~29, 2016~~28, 2017 and September ~~24, 2015~~29, 2016 was as follows:

	Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests			Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests
	(in thousands)
Balance at December 31, 2015	$	363,352		$	2,346
							(in thousands)
Balance at December 29, 2016							$	390,112		$	1,535
Net earnings attributable to The Marcus Corporation		29,160			–			30,555			–
Net loss attributable to noncontrolling interests		–			(282	)		–			(495	)
Distributions to noncontrolling interests		–			(448	)
Cash dividends		(9,016	)		–			(10,122	)		–
Exercise of stock options		3,553			–			2,083			–
Savings and profit sharing contribution								1,024			–
Treasury stock transactions, except for stock options		(5,148	)		–			(463	)		–
Share-based compensation		1,358			–			1,867			–
Other		39			–
Other comprehensive income, net of tax		154			–			147			–
Balance at September 29, 2016	$	383,452		$	1,616
Balance at September 28, 2017							$	415,203		$	1,040

Total
Shareholders’
Equity
Attributable to
The Marcus
Corporation

Noncontrolling
Interests

(in thousands)
Balance at December 25, 2014 $ 340,170 $ 2,727
Net earnings attributable to The Marcus Corporation 23,125 –
Net loss attributable to noncontrolling interests – (453 )
Distributions to noncontrolling interests – (505 )
Cash dividends (8,152 ) –
Exercise of stock options 2,158 –
Treasury stock transactions, except for stock options 17 –
Share-based compensation 1,171 –
Other 196 –
Other comprehensive loss, net of tax (898 ) –
Balance at September 24, 2015 $ 357,787 $ 1,769

	Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests

	(in thousands)
Balance at December 31, 2015	$	363,352		$	2,346
Net earnings attributable to The Marcus Corporation		29,160			–
Net loss attributable to noncontrolling interests		–			(282	)
Distributions to noncontrolling interests		–			(448	)
Cash dividends		(9,016	)		–
Exercise of stock options		3,553			–
Savings and profit sharing contribution		905			–
Treasury stock transactions, except for stock options		(6,053	)		–
Share-based compensation		1,358			–
Other		39			–
Other comprehensive income, net of tax		154			–
Balance at September 29, 2016	$	383,452		$	1,616

Fair Value Measurements - Certain financial assets and liabilities are recorded at fair value in the consolidated financial statements. Some are measured on a recurring basis while others are measured on a non-recurring basis. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. A fair value measurement assumes that a transaction to sell an asset or transfer a liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.

The Company’s assets and liabilities measured at fair value are classified in one of the following categories:

Level 1 - Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At September 28, 2017 and December 29, 2016, ~~and December 31, 2015,~~respectively, the Company’s $70,000 and $93,000 of available for sale securities were valued using Level 1 pricing inputs and were included in other current assets. ~~As of~~At September 28, 2017 and December 29, 2016, respectively, the Company’s ~~$1,659,000~~$3,859,000 and $1,927,000 of trading securities were valued using Level 1 pricing inputs and were included in other current assets.

Level 2 - Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At September 28, 2017 and December 29, 2016, ~~and December 31, 2015,~~ respectively, the ~~$88,000 liability (included in deferred compensation~~$28,000 and ~~other) and the $16,000~~$6,000 asset ~~(included in other long-term assets)~~ related to the Company’s interest rate swap contract was valued using Level 2 pricing inputs.

Level 3 - Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At September ~~29, 2016~~28, 2017 and December ~~31, 2015,~~29, 2016, none of the Company’s fair value measurements were valued using Level 3 pricing inputs.

Defined Benefit Plan – The components of the net periodic pension cost of the Company’s unfunded nonqualified, defined-benefit plan are as follows:

									13 Weeks Ended September 28, 2017		13 Weeks Ended September 29, 2016		39 Weeks Ended September 28, 2017		39 Weeks Ended September 29, 2016
	13 Weeks Ended September 29, 2016		13 Weeks Ended September 24, 2015		39 Weeks Ended September 29, 2016		39 Weeks Ended September 24, 2015
	(in thousands)								(in thousands)
Service cost	$	216	$	197	$	648	$	553	$	192	$	216	$	574	$	648
Interest cost		351		328		1,055		955		339		351		1,017		1,055
Net amortization of prior service cost and actuarial loss		91		90		273		256		89		91		267		273
Net periodic pension cost	$	658	$	615	$	1,976	$	1,764	$	620	$	658	$	1,858	$	1,976

New Accounting Pronouncements - In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09,Revenue ~~From~~from Contracts ~~With~~with Customers, ~~which~~a comprehensive new revenue recognition model that requires ~~an entity~~a company to recognize ~~the amount of~~ revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which itthe company expects to be entitled in exchange for ~~the transfer of promised~~those goods or ~~services~~services. In August 2015, the FASB issued ASU No. 2015-14,Revenue from Contracts with Customers: Deferral of Effective Date (ASU 2015-14), to ~~customers. The guidance will replace most existing~~defer the effective date of the new revenue recognition ~~guidance in Generally Accepted Accounting Principles when it becomes effective.~~standard by one year. The new standard is effective for the Company in fiscal 2018. The ~~standard permits the use of~~guidance may be adopted using either ~~the~~a full retrospective or ~~cumulative effect transition method.~~modified retrospective approach. The Company has selected the modified retrospective method for adoption of ASU No. 2014-09 and its related ASU amendments. Under this method, the Company will recognize the cumulative effect of the changes in retained earnings at the date of adoption, but will not ~~yet selected~~restate prior periods.

The Company has performed a ~~transition method~~review of the requirements of the new revenue standard and related ASUs and is ~~evaluating~~monitoring the ~~effect~~activity of the FASB as it relates to specific interpretive guidance. The Company is reviewing customer contracts and is in the process of applying the five-step model of the new revenue standard to each of its key identified revenue streams and is comparing the results to its current accounting practices. The Company believes that the ~~guidance~~adoption of the new standard will primarily impact its accounting for its loyalty programs, gift cards and customer incentives. The Company’s preliminary assessment is that the adoption of the new standard will have an immaterial impact on the Company’s overall operating results. The Company continues to assess all potential impacts of adopting this new revenue standard on its consolidated financial statements and related disclosures.

~~In November 2015, the FASB issued ASU No. 2015-17,~~ ~~Balance Sheet Classification of Deferred Taxes~~, which simplifies the presentation of deferred income taxes by requiring that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The new standard is effective for the Company beginning in fiscal 2017 and may be applied either prospectively or retrospectively. The Company has not yet selected a transition method and is evaluating the effect that the guidance will have on its consolidated financial statements and related disclosures.

In January 2016, the FASB issued ASU No. 2016-01,Recognition and Measurement of Financial Assets and Financial Liabilities, which primarily affects the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements of financial instruments. The new standard is effective for the Company in fiscal 2018, with early adoption permitted for certain provisions of the statement. Entities must apply the standard, with certain exceptions, using a cumulative-effect adjustment to beginning retained earnings as of the beginning of the fiscal year of adoption. The Company ~~is currently assessing the impact~~does not believe the adoption of the new standard will have a material effect on its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02,Leases (Topic 842), intended to improve financial reporting related to leasing transactions. ASU No. 2016-02 requires a lessee to recognize on the balance sheet assets and liabilities for rights and obligations created by leased assets with lease terms of more than 12 months. The new guidance will also require disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from the leases. These disclosures include qualitative and quantitative requirements, providing additional information about the amounts recorded in the financial statements. The new standard is effective for the Company in fiscal 2019 and early application is permitted. The Company is evaluating the effect that the guidance will have on its consolidated financial statements and related disclosures.

In August 2016, the FASB issued ASU No. 2016-15,Statement of Cash Flows (Topic 230) – Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The new standard is effective for the Company beginning in fiscal 2018, with early adoption permitted. The standard must be applied using a retrospective transition method for each period presented. The Company does not believe the adoption of the new standard will have a material effect on its consolidated financial statements.

In November 2016, the FASB issued ASU No. 2016-18,Statement of Cash Flows (Topic 230) – Restricted Cash.ASU No. 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As such, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning of period and ending of period total amount shown on the statement of cash flows. The new standard is effective for the Company in fiscal 2018 and must be applied on a retrospective basis. Early adoption is permitted including adoption in an interim period. The Company reported a $2,438,000 investing cash outflow and a $12,479,000 investing cash inflow, respectively, related to a change in restricted cash for the 39 weeks ended September 28, 2017 and September 29, 2016. Subsequent to the adoption of ASU No. 2016-18, the change in restricted cash would be excluded from the change in cash flows from investing activities and included in change in total cash, restricted cash and cash equivalents as reported in the statement of cash flows.

In January 2017, the FASB issued ASU No. 2017-01,Business Combinations (Topic 805) – Clarifying the Definition of a Business, which clarifies the definition of a business with the objective of adding guidance and providing a more robust framework to assist reporting organizations with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new standard is effective for the Company in fiscal 2018 and must be applied prospectively, with early adoption permitted. The Company does not believe the adoption of the new standard will have a material effect on its consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04,Intangibles-Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment, which eliminates Step 2 of the goodwill impairment test that had required a hypothetical purchase price allocation. Rather, entities should apply the same impairment assessment to all reporting units and recognize an impairment loss for the amount by which a reporting unit’s carrying amount exceeds its fair value, without exceeding the total amount of goodwill allocated to that reporting unit. Entities will continue to have the option to perform a qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. ASU No. 2017-04 is effective for the Company in fiscal 2020 and must be applied prospectively, with early adoption permitted. The Company does not believe the new standard will have a material effect on its consolidated financial statements.

In February 2017, the FASB issued ASU No. 2017-05,“Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” ASU No. 2017-05 clarifies the scope and accounting of a financial asset that meets the definition of an “in-substance nonfinancial asset” and defines the term “in-substance nonfinancial asset.” It also covers the transfer of nonfinancial assets to another entity in exchange for a non-controlling ownership interest in that entity. The new guidance is effective for interim and annual periods beginning after December 15, 2017. The Company does not believe that the ~~guidance~~adoption of the new standard will have a material effect on its consolidated financial statements.

In March 2017, the FASB issued ASU No. 2017-07,Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Benefit Cost.The ASU requires the service cost component of net periodic benefit cost to be presented in the same income statement line item as other employee compensation costs arising from services rendered during the period. Other components of the net periodic benefit cost are to be presented separately, in an appropriately titled line item outside of any subtotal of operating income or disclosed in the footnotes. The standard also limits the amount eligible for capitalization to the service cost component. The standard is effective for the Company in fiscal 2018 and it is currently assessing the impact this standard will have on its consolidated financial statements and related disclosures.

~~The Company elected to early adopt~~In May 2017, the FASB issued ASU No. ~~2016-09,~~2017-09,Compensation ~~– Sock~~- Stock Compensation (Topic 718): ~~Improvements to Employee Share-Based Payment~~Scope of Modification Accounting, ~~during~~to provide clarity and reduce both the ~~13 weeks ended September 29, 2016,~~diversity in practice and cost and complexity when applying the guidance in Topic 718,Compensation - Stock Compensation. The amendments in this update provide guidance about which ~~required reflection~~changes to the terms or conditions of ~~any adjustments as of January 1, 2016. The primary impact of~~a share-based payment award require an entity to apply modification accounting. ASU No. 2017-09 is effective for the Company in fiscal 2018 and must be applied prospectively to an award modified on or after the adoption ~~was~~date. Early adoption is permitted. The Company does not believe the recognition of excess tax benefits as a reduction to the provision for income taxes for all periods reported in fiscal 2016. Additional amendments to ASU No. 2016-09 which related to income taxes and minimum statutory withholding tax requirements, had no impact to retained earnings, where the cumulative effect of these changes are required to be recorded. Additionally, the Company also elected to continue estimating forfeitures when determining the amount of compensation costs to be recognized each period. The presentation requirements for cash flows related to excess tax benefits were applied on a prospective basis, and therefore prior years have not been restated. The presentation requirement for cash flows related to employee taxes paid for withheld shares had no impact to any of the periods presented in the consolidated statements of cash flows. The adoption of ASU No. 2016-09 did notnew standard will have a material effect on ~~the Company’s~~its consolidated financial ~~statements or related disclosures.~~

~~On January 1, 2016, the Company adopted ASU No. 2015-03,~~ ~~Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30)~~, which requires an entity to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset, and requires the amortization of the costs be reported as interest expense. The new guidance was applied on a retrospective basis to all prior periods. Accordingly, $404,000 of debt issuance costs, previously included within other long-term assets, have been reclassified as a reduction of long-term debt on the December 31, 2015 consolidated balance sheet, and $110,000 and $329,000, respectively, of amortization of debt issuance costs, previously included in depreciation and amortization expense, have been reclassified to interest expense in the consolidated statements of earnings for the 13 and 39 weeks ended September 24, 2015.

~~On January 1, 2016, the Company adopted ASU No. 2015-02,~~ ~~Consolidation (Topic 810): Amendments to the Consolidation Analysis~~, which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. ASU No. 2015-02 clarifies how to determine whether equity holders as a group have power to direct the activities that most significantly affect the legal entity’s economic performance and could affect whether it is a variable interest entity (VIE). Two of the Company’s consolidated entities are considered VIEs. The Company is the primary beneficiary of the VIEs and the Company’s interest is considered a majority voting interest. As such, the adoption of the new standard did not have a material effect on the Company’s consolidated financial statements or related disclosures.statements.

2. Long-Term Debt and Capital Lease Obligations

~~On June 16, 2016,~~Long-Term Debt -During the 39 weeks ended September 28, 2017, the Company issued $50,000,000 of unsecured senior notes privately placed with three institutional lenders. The notes bear interest at 4.32% per annum and mature in fiscal 2027. The Company used the net proceeds of the sale of the notes to repay outstanding indebtedness and for general corporate purposes.

Also during the 39 weeks ended September 28, 2017, a note that matured in January 2017 with a balance of $24,226,000 was repaid and replaced ~~its existing credit agreement, consisting of a $37,188,000 term loan and a $175,000,000~~with borrowings on the Company’s revolving credit facility ~~with~~and a new ~~five-year $225,000,000 credit agreement that expires on June 16, 2021. There were borrowings of $89,000,000 outstanding on the new revolving credit facility~~$15,000,000 mortgage note bearing interest at LIBOR plus ~~a margin which adjusts based on the Company’s borrowing levels,~~2.75%, effectively ~~1.64%,~~4.0% at September ~~29, 2016.~~28, 2017, requiring monthly principal and interest payments and maturing in fiscal 2020. The ~~revolving credit facility requires an annual facility fee of 0.15% to 0.25% of~~mortgage note is secured by the ~~total commitment, depending on the Company’s consolidated debt to total capitalization ratio, as defined in the credit agreement.~~

~~The Company’s loan agreements include, among other covenants, maintenance of certain financial ratios, including a debt-to-capitalization ratio~~related land, building and ~~a fixed charge coverage ratio. The Company is in compliance with all financial debt covenants at September 29, 2016.~~equipment.

The Company utilizes derivatives principally to manage market risks and reduce its exposure resulting from fluctuations in interest rates. The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions.

The Company entered into an interest rate swap agreement on February 28, 2013 covering $25,000,000 of floating rate debt, which expires January 22, 2018, and requires the Company to pay interest at a defined rate of 0.96% while receiving interest at a defined variable rate of one-month LIBOR ~~(0.56%~~(1.25% at September ~~29, 2016)~~28, 2017). The notional amount of the swap is $25,000,000. The Company recognizes derivatives as either assets or liabilities on the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through earnings. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The Company’s interest rate swap agreement was considered effective and qualified as a cash flow hedge from inception through June 16, 2016, at which time the derivative was undesignated and the balance in accumulated other comprehensive loss of $159,000 ($96,000 net of tax) was reclassified into interest expense. As of June 16, 2016, the swap was considered ineffective for accounting ~~purposes and~~purposes. As such, the ~~change~~$22,000 increase in the fair value of the swap ~~of $88,000 and $71,000 during~~for the ~~13 and~~ 39 weeks ended September ~~29, 2016, respectively,~~28, 2017 was recorded as a reduction to interest expense. The Company does not expect the interest rate swap to have a material effect on earnings within the next ~~12 months.~~four months, at which time the agreement will expire.

3. Capital Lease ~~Obligation~~

Obligations - During fiscal 2012, the Company entered into a master licensing agreement with CDF2 Holdings, LLC, a subsidiary of Cinedigm Digital Cinema Corp (CDF2), whereby CDF2 purchased on the Company’s behalf, and then deployed and licensed back to the Company, digital cinema projection systems (the “systems”) for use by the Company in its theatres. As of September ~~29, 2016,~~28, 2017, 642 of the Company’s screens were utilizing the systems under a 10-year master licensing agreement with CDF2. Included in furniture, fixtures and equipment is $45,510,000 related to the digital systems as of September ~~29, 2016~~28, 2017 and December ~~31, 2015,~~29, 2016, which is being amortized over the remaining estimated useful life of the assets. Accumulated amortization of the digital systems was ~~$26,750,000~~$32,926,000 and ~~$22,118,000~~$28,294,000 as of September 28, 2017 and December 29, 2016, ~~and December 31, 2015,~~ respectively.

Under the terms of the master licensing agreement, the Company made an initial one-time payment to CDF2. The Company expects that the balance of CDF2’s costs to deploy the systems will be covered primarily through the payment of virtual print fees (VPF’s) from film distributors to CDF2 each time a digital movie is booked on one of the systems deployed on a Company screen. The Company agreed to make an average number of bookings of eligible digital movies on each screen on which a licensed system has been deployed to provide for a minimum level of VPF’s paid by distributors (standard booking commitment) to CDF2. To the extent the VPF’s paid by distributors are less than the standard booking commitment, the Company must make a shortfall payment to CDF2. Based upon the Company’s historical booking patterns, the Company does not expect to make any shortfall payments during the life of the agreement. Accounting Standards Codification No. 840,Leases, requires that the Company consider the entire amount of the standard booking commitment minimum lease payments for purposes of determining the capital lease obligation. The maximum amount per year that the Company could be required to pay is approximately $6,163,000 until the obligation is fully satisfied.

The Company’s capital lease obligation is being reduced as VPF’s are paid by the film distributors to CDF2. The Company has recorded the reduction of the obligation associated with the payment of VPF’s as a reduction of the interest related to the obligation and the amortization incurred related to the systems, as the payments represent a specific reimbursement of the cost of the systems by the studios. Based on the Company’s expected minimum number of eligible movies to be booked, the Company expects the obligation to be reduced by at least ~~$5,452,000~~$5,822,000 within the next 12 months. This reduction will be recognized as an offset to amortization and is expected to offset the majority of the amortization of the systems.

4.In conjunction with theatres acquired in December 2016, the Company became the obligor of several movie theatre and equipment leases with unaffiliated third parties that qualify for capital lease accounting. Included in buildings and improvements as of September 28, 2017 and December 29, 2016 is a preliminary value of $15,799,000 related to these leases, with accumulated amortization of $1,253,000 as of September 28, 2017. Included in furniture, fixtures and equipment as of September 28, 2017 and December 29, 2016 is a preliminary value of $1,712,000 related to these leases, with accumulated amortization of $194,000 as of September 28, 2017. The assets are being amortized over the remaining lease terms. The Company paid $874,000 and $2,424,000 in lease payments on these capital leases during the 13 and 39 weeks ended September 28, 2017, respectively.

3. Income Taxes

The Company’s effective income tax rate, adjusted for losses from noncontrolling interests, for the 13 and 39 weeks ended September ~~29, 2016~~28, 2017 was ~~37.7%~~38.6% and ~~38.5%~~37.8%, respectively, and was 37.7% and 38.5% for the 13 and 39 weeks ended September ~~24, 2015.~~29, 2016, respectively. The Company does not include the income tax expense or benefit related to the net earnings or loss attributable to noncontrolling interest in its income tax expense as the entities are considered pass-through entities and, as such, the income tax expense or benefit is attributable to its owners.

~~5. Related Party Transaction~~

During the 13 weeks ended September 29, 2016, the Company received $4,093,000 from certain Marcus family trusts, representing the reimbursement of premiums paid on split dollar life insurance policies pursuant to existing agreements with the trusts. The remaining $10,131,000 of premiums paid under a separate split dollar life insurance policy pursuant to an agreement with a family trust is included in other (long-term) assets of September 29, 2016.

6.4. Business Segment Information

The Company’s primary operations are reported in the following business segments: Theatres and Hotels/Resorts. Corporate items include amounts not allocable to the business segments. Corporate revenues consist principally of rent and the corporate operating loss includes general corporate expenses. Corporate information technology costs and accounting shared services costs are allocated to the business segments based upon several factors, including actual usage and segment revenues.

Following is a summary of business segment information for the 13 and 39 weeks ended September ~~29, 2016~~28, 2017 and September ~~24, 2015~~29, 2016 (in thousands):

13 Weeks Ended September 29, 2016	Theatres		Hotels/ Resorts		Corporate Items			Total
13 Weeks Ended September 28, 2017										Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	81,921	$	62,613	$	161		$	144,695	$	89,773	$	63,895	$	150		$	153,818
Operating income (loss)		18,095		10,614		(4,026	)		24,683		15,830		9,622		(4,017	)		21,435
Depreciation and amortization		6,228		4,158		88			10,474		8,399		4,512		82			12,993

13 Weeks Ended September 24, 2015	Theatres		Hotels/ Resorts		Corporate Items			Total
13 Weeks Ended September 29, 2016										Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	68,919	$	64,839	$	136		$	133,894	$	81,921	$	62,613	$	161		$	144,695
Operating income (loss)		12,309		11,266		(3,764	)		19,811		18,095		10,614		(4,026	)		24,683
Depreciation and amortization		5,696		4,554		92			10,342		6,228		4,158		88			10,474

39 Weeks Ended September 29, 2016	Theatres		Hotels/ Resorts		Corporate Items			Total
39 Weeks Ended September 28, 2017										Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	238,837	$	165,880	$	400		$	405,117	$	294,977	$	169,138	$	432		$	464,547
Operating income (loss)		51,530		15,073		(12,313	)		54,290		58,481		12,693		(12,973	)		58,201
Depreciation and amortization		18,175		12,582		268			31,025		24,000		13,270		274			37,544

39 Weeks Ended September 24, 2015	Theatres		Hotels/ Resorts		Corporate Items			Total
39 Weeks Ended September 29, 2016										Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	221,358	$	168,606	$	415		$	390,379	$	238,837	$	165,880	$	400		$	405,117
Operating income (loss)		44,835		10,150		(9,939	)		45,046		51,530		15,073		(12,313	)		54,290
Depreciation and amortization		16,272		13,386		273			29,931		18,175		12,582		268			31,025

5. Subsequent Event – On October 20, 2017, the Company sold its 11% minority interest in The Westin® Atlanta Perimeter North in Atlanta, Georgia and recorded a preliminary pre-tax gain of approximately $4,906,000 during the fiscal 2017 fourth quarter.

THE MARCUS CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

Certain matters discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Form 10-Q are “forward-looking~~statements~~” statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements may generally be identified as such because the context of such statements include words such as we “believe,” “anticipate,” “expect” or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause results to differ materially from those expected, including, but not limited to, the following: (1) the availability, in terms of both quantity and audience appeal, of motion pictures for our theatre division, as well as other industry dynamics such as the maintenance of a suitable window between the date such motion pictures are released in theatres and the date they are released to other distribution channels; (2) the effects of adverse economic conditions in our markets, particularly with respect to our hotels and resorts division; (3) the effects on our occupancy and room rates of the relative industry supply of available rooms at comparable lodging facilities in our markets; (4) the effects of competitive conditions in our markets; (5) our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; (6) the effects of increasing depreciation expenses, reduced operating profits during major property renovations, impairment losses, and preopening and start-up costs due to the capital intensive nature of our businesses; (7) the effects of ~~adverse~~ weather conditions, particularly during the winter in the Midwest and in our other markets; (8) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; and (9) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States or other incidents of violence in public venues such as hotels and movie theatres. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this Form 10-Q and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

RESULTS OF OPERATIONS

General

~~As a result of a recent change in our fiscal year, we now~~We report our consolidated and individual segment results of operations on a 52- or 53-week fiscal year ending on the last Thursday in December. Fiscal 2017 is a 52-week year beginning on December 30, 2016 isand ending on December 28, 2017. Fiscal 2016 was a 52-week year beginning on January 1, 2016 and ~~ending~~ended on December 29, 2016. In this Form 10-Q and during the remainder of fiscal 2016, we will compare financial results to comparable periods from a prior year that we refer to as “fiscal 2015C.” Fiscal 2015C consists of the 53-week period beginning December 26, 2014 and ended on December 31, 2015.

We divide our fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. The third quarter of fiscal ~~2016 consisted of the 13-week period beginning July 1, 2016 and ended on September 29, 2016. The third quarter of fiscal 2015C~~2017 consisted of the 13-week period beginning on June ~~26, 2015~~30, 2017 and ended on September ~~24, 2015.~~28, 2017. The ~~first three quarters~~third quarter of fiscal 2016 consisted of the ~~39-week~~13-week period beginning ~~January~~on July 1, 2016 and ended on September 29, 2016. The first three quarters of fiscal ~~2015C~~2017 consisted of the 39-week period beginning on December ~~26, 2014~~30, 2016 and ended on September ~~24, 2015.~~28, 2017. The ~~fourth quarter~~first three quarters of fiscal 2016 ~~will consist of the 13-week period beginning September 30, 2016 and ending on December 29, 2016. The fourth quarter of fiscal 2015C benefited from an additional week of operations and~~ consisted of the ~~14-week~~39-week period beginning on ~~September 25, 2015~~January 1, 2016 and ended on ~~December 31, 2015.~~September 29, 2016. Our primary operations are reported in the following two business segments: movie theatres and hotels and resorts.

The following table sets forth revenues, operating income, other income (expense), net earnings and net earnings per common share for the third quarter and first three quarters of fiscal ~~2016~~2017 and fiscal ~~2015C~~2016 (in millions, except for per share and variance percentage data):

	Third Quarter											First Three Quarters											Third Quarter												First Three Quarters
							Variance											Variance											Variance												Variance
	F2016			F2015C			Amt.		Pct.			F2016			F2015C			Amt.		Pct.			F2017			F2016			Amt.			Pct.			F2017			F2016			Amt.			Pct.
Revenues	$	144.7		$	133.9		$	10.8		8.1	%	$	405.1		$	390.4		$	14.7		3.8	%	$	153.8		$	144.7		$	9.1			6.3	%	$	464.5		$	405.1		$	59.4			14.7	%
Operating income		24.7			19.8			4.9		24.6	%		54.3			45.0			9.3		20.5	%		21.4			24.7			(3.3	)		-13.2	%		58.2			54.3			3.9			7.2	%
Other income (expense)		(1.7	)		(2.3	)		0.6		25.3	%		(7.2	)		(7.9	)		0.7		8.8	%		(3.7	)		(1.7	)		(2.0	)		-115.8	%		(9.6	)		(7.2	)		(2.4	)		-33.4	%
Net loss attributable to noncontrolling interests		(0.1	)		(0.1	)		-		-			(0.3	)		(0.5	)		0.2		37.7	%		(0.2	)		(0.1	)		(0.1	)		-33.3	%		(0.5	)		(0.3	)		(0.2	)		-75.5	%
Net earnings attributable to The Marcus Corp.	$	14.4		$	10.9		$	3.5		32.2	%	$	29.2		$	23.1		$	6.1		26.1	%	$	11.0		$	14.4		$	(3.4	)		-23.6	%	$	30.6		$	29.2		$	1.4			4.8	%
Net earnings per common share – diluted:	$	0.51		$	0.39		$	0.12		30.8	%	$	1.05		$	0.83		$	0.22		26.5	%	$	0.39		$	0.51		$	(0.12	)		-23.5	%	$	1.08		$	1.05		$	0.03			2.9	%

Revenues increased during the third quarter and first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C~~2016 due to increased revenues from both our theatre division ~~partially offset by a slight decrease in revenues from our~~and hotels and resorts division. Operating income (earnings before other income/expense and income taxes) and net earnings attributable to The Marcus Corporation ~~increased~~decreased during the third quarter of fiscal ~~2016~~2017 compared to the third quarter of fiscal ~~2015C~~2016 due to ~~improved operating results from our theatre division, partially offset by a slight decrease in~~decreased operating income from both our theatre and hotels and resorts ~~division.~~divisions. Operating income and net earnings attributable to The Marcus Corporation increased during the first three quarters of fiscal ~~2016~~2017 compared to the first three quarters of fiscal ~~2015C~~2016 due to ~~improved~~record operating results from ~~both~~ our theatre ~~and~~division, partially offset by a decrease in operating income from our hotels and resorts ~~divisions.~~division.

~~Operating results~~

New theatres favorably impacted revenues and operating income from our theatre division during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016. In mid-October 2016, we opened a newly renovated theatre in Country Club Hills, Illinois. In mid-December 2016, our theatre division acquired Wehrenberg Theatres® (which we refer to as Wehrenberg or Marcus Wehrenberg), a Midwestern theatre circuit consisting of 14 theatres with 197 screens, plus an 84,000 square foot retail center. In April 2017, we opened a new theatre in Shakopee, Minnesota. On June 30, 2017, the first day of our fiscal 2017 third quarter, we opened our first stand-alone all in-theatre dining location, brandedBistroPlex^SM and located in Greendale, Wisconsin.

Operating results from our theatre division were unfavorably impacted by a weaker slate of movies during the fiscal 2017 second and third quarters compared to the second and third quarters of fiscal 2016, but were favorably impacted by a stronger slate of movies ~~increased~~during the fiscal 2017 first quarter compared to the first quarter of fiscal 2016. Increased attendance ~~and average ticket price~~ resulting from positive customer response to our recent investments and pricing strategies and increased concession ~~revenues~~sales per person due to our expanded food and beverage offerings partially offset the negative impact of the weaker slate of movies during the third quarter of fiscal 2017 and contributed to our improved operating results during the first three quarters of fiscal 2017 compared to the same periods in fiscal 2016. Increased preopening expenses related to new theatres during the fiscal 2017 periods negatively impacted comparisons to the fiscal 2016 periods.

Revenues from our hotels and resorts division were favorably impacted during the third quarter and first three quarters of fiscal 2017 by revenues from our newSafeHouse® restaurant and bar that we opened on March 1, 2017 in downtown Chicago, Illinois adjacent to our AC Chicago Downtown Hotel. Increased room revenues during the fiscal 2017 periods, due in part to new villas that we opened during the second quarter of fiscal 2017 at the Grand Geneva Resort & Spa, also contributed to the increased total revenues during the fiscal 2017 periods, partially offset by slightly reduced food and beverage revenues for comparable hotels during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2015C. Comparisons of operating results from our hotels and resorts division during the third quarter and first three quarters of fiscal 2016 to the third quarter and first three quarters of fiscal 2015C were unfavorably impacted by the fact that last year’s results included a hotel that has since been sold.2016. Operating results from our hotels and resorts division were unfavorably impacted by preopening expenses and start-up operating losses from our newSafeHouse restaurant and bar during the ~~third quarter of~~ fiscal 2016 were also negatively impacted by reduced food and beverage revenues compared to the third quarter of fiscal 2015C, partially offset by increased revenue per available room for comparable hotels. Operating results from our hotels and resorts division during the first three quarters of fiscal 2016 were favorably impacted by strong cost controls and increased revenue per available room for comparable hotels during the first three quarters of fiscal 2016 compared to the first three quarters of fiscal 2015C. Comparisons to operating income for our hotels and resorts division during the first three quarters of fiscal 2016 were also favorably impacted by the fact that operating income during the first three quarters of fiscal 2015C included a $2.6 million impairment charge related to one specific hotel.2017 periods.

Operating losses from our corporate items, which include amounts not allocable to the business segments, ~~increased~~were unchanged during the third quarter ~~and first three quarters~~ of fiscal ~~2016~~2017 compared to the third quarter ~~and first three quarters~~ of fiscal ~~2015C due in part to increased incentive compensation expense as a result of our strong operating performance during the fiscal 2016 periods.~~2016. Operating losses from our corporate items ~~also~~ increased during the first three quarters of fiscal ~~2016~~2017 compared to the first three quarters of fiscal ~~2015C primarily~~2016 due in part to one-time costs associated with the ~~fact that~~retirement of two directors from our board of directors during the ~~prior year period was favorably impacted by~~second quarter of fiscal 2017 and the ~~reimbursement~~death of ~~approximately $1.4 million~~a director during the third quarter of ~~costs previously expensed related~~fiscal 2017. Increased long-term incentive compensation expenses resulting from our improved financial performance and stock performance during the past several years also contributed to ~~a mixed-use retail development known as The Corners~~increased operating losses from our corporate items during the first three quarters of ~~Brookfield.~~fiscal 2017.

We did not have any significant variations in investment income or ~~gains/losses~~net equity earnings (losses) from unconsolidated joint ventures during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016. We recognized a loss on disposition of property, equipment and other assets of $449,000 and $420,000, respectively, during the third quarter and first three quarters of fiscal 2017 due primarily to our disposal of old theatre seats and other items in conjunction with our significant number of theatre renovations during the periods, as well as our write off of disposed equipment at one of our hotels during the first quarter of fiscal 2017, partially offset by our sale of two theatres (one that had previously closed and one that had been operating prior to the sale) and our sale of the minority equity interest we held in a hotel. We recognized a small gain of $239,000 on disposition of property, equipment and other assets during the third quarter of fiscal 2016 related primarily to our sale of an unused piece of land. We recognized losses on disposition of property, equipment and other assets during the first three quarters of fiscal 2016 ~~compared~~totaling $478,000 primarily due to ~~the third quarter~~our disposal of old theatre seats and ~~first three quarters of fiscal 2015C.~~other items in conjunction with prior theatre renovations. The timing of periodic sales and disposals of our property and equipment ~~including the disposal of old theatre seats and other items in conjunction with our theatre renovations,~~ may vary from quarter to quarter, resulting in variations in our reported gains or losses on disposition of property and equipment.

Our interest expense totaled $3.4 million for the third quarter of fiscal 2017 compared to $2.1 million ~~and~~for the third quarter of fiscal 2016, an increase of approximately $1.3 million, or 58.3%. Our interest expense totaled $9.5 million for the first three quarters of fiscal 2017 compared to $7.0 million for the first three quarters of fiscal 2016, an increase of approximately $2.5 million, or 35.2%. The increase in interest expense during the fiscal 2017 periods was due primarily to payments we made on the approximately $17.5 million of capital lease obligations we assumed in the Wehrenberg acquisition. We also experienced an increase in our total borrowings under long-term debt agreements during the third quarter and first three quarters of fiscal ~~2016, respectively,~~2017 compared to ~~$2.5 million and $7.4 million, respectively, for~~ the ~~third quarter and first three quarters~~comparable periods of fiscal ~~2015C, a decrease of approximately $400,000 during each respective period. The decrease in~~2016, further contributing to our increased interest expense during the fiscal ~~2016~~2017 periods, ~~was due primarily to~~partially offset by a lower average interest rate during fiscal 2017, as ~~certain principal payments~~ we ~~made on our fixed~~had a greater percentage of lower-cost variable rate ~~senior notes during the second quarter of fiscal 2016 were funded by borrowings on our revolving credit facility, which has a lower associated interest rate. A small decrease~~debt in our ~~total borrowings~~debt portfolio during the fiscal ~~2016~~2017 periods compared to ~~the comparable fiscal 2015C periods also contributed to the decrease in interest expense during~~ the fiscal 2016 periods. Changes in our borrowing levels due to variations in our operating results, capital expenditures, share repurchases and asset sale proceeds, among other items, may impact our actual reported interest expense in future periods, as would changes in the mix between ~~long-term~~ fixed rate debt and ~~short-term~~ variable rate debt in our debt portfolio.

Net equity earnings (losses) from unconsolidated joint ventures totaled $161,000 and $270,000 for the third quarter and first three quarters of fiscal 2016, respectively, compared to $2,000 and $(121,000), respectively, during the third quarter and first three quarters of fiscal 2015C. Improved operating results from our two hotel joint ventures during the fiscal 2016 periods contributed to the increases in net equity earnings from unconsolidated joint ventures.

We reported income tax expense for the third quarter and first three quarters of fiscal ~~2016~~2017 of $6.9 million and $18.6 million, respectively, compared to $8.7 million and $18.2 ~~million, respectively, compared to $6.8 million and $14.5~~ million, respectively, during the third quarter and first three quarters of fiscal ~~2015C.~~2016. The increase in income tax expense for the first three quarters of fiscal 2017 compared to the first three quarters of fiscal 2016 was the result of increased earnings, ~~during~~partially offset by the fact that our fiscal ~~2016 periods. Our~~2017 first three quarters effective income tax rate, after adjusting for losses from noncontrolling interests that are not tax-effected because the entities involved are tax pass-through entities, was ~~38.5% during the~~37.8%, compared to our fiscal 2016 first three quarters effective income tax rate of ~~both fiscal 2016 and fiscal 2015C.~~38.5%. As of the date of this report, we anticipate that our effective income tax rate for the remaining quarter of fiscal ~~2016~~2017 will remain close to our historical ~~38-40%~~38%-40% average, excluding any changes in our liability for unrecognized tax benefits or potential changes in federal and state income tax rates. Our actual fiscal ~~2016~~2017 effective income tax rate may be different from our estimated quarterly rates depending upon actual facts and circumstances.

The operating results of two ~~majority-owned~~ hotels of which we are the majority owner, The Skirvin Hilton and The Lincoln Marriott Cornhusker Hotel, are included in the hotels and resorts division revenue and operating income, and the after-tax net earnings or loss attributable to noncontrolling interests in these hotels is deducted from or added to net earnings on the consolidated statements of earnings. We reported net losses attributable to noncontrolling interests of ~~$120,000~~$495,000 and $282,000, respectively, during the ~~third quarter and~~ first three quarters of fiscal ~~2016, respectively, compared to net losses of $159,000~~2017 and ~~$453,000, respectively, during~~ the ~~third quarter and~~ first three quarters of fiscal ~~2015C.~~2016.

Theatres

The following table sets forth revenues, operating income and operating margin for our theatre division for the third quarter and first three quarters of fiscal ~~2016~~2017 and fiscal ~~2015C~~2016 (in millions, except for variance percentage and operating margin):

	Third Quarter											First Three Quarters											Third Quarter												First Three Quarters
							Variance											Variance											Variance												Variance
	F2016			F2015C			Amt.		Pct.			F2016			F2015C			Amt.		Pct.			F2017			F2016			Amt.			Pct.			F2017			F2016			Amt.		Pct.
Revenues	$	81.9		$	68.9		$	13.0		18.9	%	$	238.8		$	221.4		$	17.4		7.9	%	$	89.8		$	81.9		$	7.9			9.6	%	$	295.0		$	238.8		$	56.2		23.5	%
Operating income		18.1			12.3			5.8		47.0	%		51.5			44.8			6.7		14.9	%		15.8			18.1			(2.3	)		-12.5	%		58.5			51.5			7.0		13.5	%
Operating margin (% of revenues)		22.1	%		17.9	%							21.6	%		20.3	%							17.6	%		22.1	%								19.8	%		21.6	%

Our theatre division revenues ~~operating income and operating margin~~ increased during the third quarter and first three quarters of fiscal ~~2016 due primarily to increases in our attendance, average ticket price and average concession revenues per person~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C,~~2016 due to new theatres that we opened or acquired during the fourth quarter of fiscal 2016 and first three quarters of fiscal 2017, as well as an increase in our average ticket price and average concession revenues per person at comparable theatres, resulting in increased box office receipts and concession revenues. Decreased attendance at comparable theatres due to a weaker film slate negatively impacted theatre division revenues and operating income during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016.

Our theatre division operating income increased during the first three quarters of fiscal 2017 compared to the first three quarters of fiscal 2016 due primarily to operating income from the acquired Wehrenberg theatres. Preopening expenses of approximately $800,000 related to the opening of two new theatres negatively impacted our operating income during the first three quarters of fiscal 2017. Our theatre division revenues and operating income during the third quarter of fiscal 2017 were also ~~has an active cost savings initiative (CSI)~~negatively impacted by the fact that we had up to 15% of our Marcus Wehrenberg screens out of service during long portions of the fiscal 2017 period due to renovations underway at multiple theatres.

The aforementioned preopening expenses, in ~~place pursuant~~conjunction with the weaker film slate during the second and third quarters of fiscal 2017 and higher fixed costs, such as depreciation and amortization, rent and property taxes, due in part to ~~which~~ the ~~division has targeted cost savings in excess of $2 million during fiscal 2016. Significant progress towards achievement of this CSI target, which includes improvements in~~Wehrenberg acquisition, negatively impacted our theatre ~~labor efficiencies, as well as various other operational and administrative cost items, further improved our already strong~~division operating margins during the third quarter and first three quarters of fiscal ~~2016 periods. We expect~~2017 compared to ~~meet our CSI targeted costs savings during~~the third quarter and first three quarters of fiscal 2016. Excluding total preopening expenses, our theatre division operating margin during the first three quarters of fiscal 2017 was 20.2%. Increased other revenues and slightly lower film costs favorably impacted our operating margin during the fiscal 2017 periods, but not enough to offset the impact of decreased attendance during these periods.

The following table provides a further breakdown of the components of revenues for the theatre division for the third quarter and first three quarters of fiscal ~~2016~~2017 and fiscal ~~2015C~~2016 (in millions, except for variance percentage):

Third Quarter First Three Quarters
Variance Variance
F2016 F2015C Amt. Pct. F2016 F2015C Amt. Pct.
Box office receipts $ 46.9 $ 39.1 $ 7.8 19.8 % $ 137.8 $ 127.5 $ 10.3 8.1 %
Concession revenues 30.3 26.0 4.3 16.3 % 88.6 82.7 5.9 7.2 %
Other revenues 4.7 3.8 0.9 27.5 % 12.4 11.2 1.2 11.1 %
Total revenues $ 81.9 $ 68.9 $ 13.0 18.9 % $ 238.8 $ 221.4 $ 17.4 7.9 %

Third Quarter First Three Quarters
Variance Variance
F2017 F2016 Amt.   Pct. F2017 F2016 Amt. Pct.
Box office receipts $ 50.3 $ 46.9 $ 3.4 7.2 % $ 166.2 $ 137.8 $ 28.4 20.6 %
Concession revenues 33.3 30.3 3.0 10.0 % 109.4 88.6 20.8 23.4 %
Other revenues 6.2 4.7 1.5 29.9 % 19.4 12.4 7.0 56.2 %
Total revenues $ 89.8 $ 81.9 $ 7.9 9.6 % $ 295.0 $ 238.8 $ 56.2 23.5 %
The majority of the increase in our box office receipts and concession revenues for the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016 was due to the impact of the 14 theatres that we acquired from Wehrenberg, the theatre that we opened in Country Club Hills, Illinois during our fiscal 2016 fourth quarter, the theatre that we opened in Shakopee, Minnesota during our fiscal 2017 second quarter and theBistroPlex theatre we opened in Greendale, Wisconsin on the first day of our fiscal 2017 third quarter. Excluding these new theatres, as well as two theatres that are no longer comparable to last year because their pricing policies were significantly changed as a result of the new theatres we opened nearby, box office receipts decreased 15.6% and concession revenues decreased 13.1% for comparable theatres during the third quarter of fiscal 2017 compared to the third quarter of fiscal 2016 and decreased 3.6% and 0.3%, respectively, during the first three quarters of fiscal 2017 compared to the first three quarters of fiscal 2016.

According to data received from Rentrak (a national box office reporting service for the theatre industry) and compiled by us to evaluate our fiscal ~~2016~~2017 third quarter and first three quarters results, United States box office receipts ~~increased 9.3%~~(excluding new builds for the top ten theatre circuits) decreased 13.4% and ~~1.9%~~4.0%, respectively, during our fiscal ~~2016~~2017 third quarter and first three quarters, ~~when compared to the same weeks included in our fiscal 2015C,~~ indicating that our box office receipts inat comparable theatres underperformed the industry during the third quarter by 2.2 percentage points and outperformed the industry during the first three quarters of fiscal 2017 by 0.4 percentage points. We believe we underperformed the industry during the third quarter of fiscal 2017 due primarily to several unfavorable factors in July 2017 compared to July 2016, including film mix, the fact that we had a number of our comparable screens out of service during the fiscal 2017 period due to renovations underway at multiple theatres, and slightly unfavorable weather comparisons to last year.
July box office revenues represented approximately 50% of our third quarter total box office revenues, so that month has a disproportionate impact on our overall third quarter results. We believe our underperformance during July was an anomaly, as evidenced by the fact that we outperformed the industry by ~~10.5 and 6.2~~over nine percentage points ~~respectively. If we compare our fiscal 2016~~in September 2017. Despite the unusual circumstances during the third quarter ~~box office receipts to the weeks in~~of fiscal 2015C that more closely align to this fiscal year on the calendar (the 13 weeks beginning July 3, 2015 and ended on October 1, 2015), our box office receipts increased 25.2% over the prior year compared to 14.7% for United States box office receipts, a favorable difference of 10.5 percentage points. If2017, we compare our fiscal 2016 first three quarters box office receipts to the weeks in fiscal 2015C that more closely align to this fiscal year on the calendar (the 39 weeks beginning January 2, 2015 and ended on October 1, 2015), our box office receipts increased 11.5% over the prior year compared to 4.6% for United States box office receipts, a favorable difference of 6.9 percentage points.
We have ~~now~~still outperformed the industry ~~average~~ during 11thirteen of the last ~~12 quarters that we have reported (including during the five-week final period of our transition period ended December 31, 2015).~~fifteen quarters. We believe our ~~continued~~consistent outperformance ~~compared~~ to the industry ~~average~~ is attributable to the investments we have made in new features and amenities in select theatres and our implementation of innovative operating and marketing strategies, including our $5 Tuesday promotion and our customer loyalty program.

23
~~Our~~
Excluding the Marcus Wehrenberg theatres, our average ticket price increased ~~4.2%~~3.1% and ~~4.6%~~1.2%, respectively, during the third quarter and first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C.~~2016. The ~~increase was partially attributable to~~fact that we implemented modest price increases ~~we implemented~~ in ~~January 2016. In addition, the fact that we~~November 2016 and have increased our number of premium large format (PLF) screens, along with a corresponding price premium, ~~also~~ contributed to the increase in our ~~increased~~average ticket price during the fiscal 2017 periods. We also believe that a change in film product mix had a positive impact on our average ticket price during the third quarter ~~and first three quarters~~ of fiscal ~~2016.~~ 2017. Our top film during the third quarter of fiscal 2017 was the R-rated filmIt (resulting in a higher percentage of higher-priced adult tickets sold), compared to our top film during the third quarter of fiscal 2016, which was the PG-rated family movieThe Secret Life of Pets (resulting in a higher percentage of lower-priced children’s tickets sold). Conversely, the percentage of our total box office receipts attributable to 3D presentations also increased slightly during the first three quarters of fiscal 2016 compared to the first three quarters of fiscal 2015C, due primarily to a small increase in the quantity and quality of 3D films released in fiscal 2016 to date, contributing to our higher average ticket price. Conversely, we believe that a change in film product mix had a negative impact on our average ticket price during the first three quarters of fiscal 2016, as two of our top three films for the first three quarters were animated or family-oriented movies (resulting in a higher percentage of lower-priced children’s tickets sold, compared to more adult-oriented and PG-13 and R-rated films that typically result in a higher average ticket price), compared to no films in that genre among our top three films during the first three quarters of fiscal 2015C. The increase in average ticket price contributed approximately $1.7 million and $5.5 million, respectively, to box office receiptsdecreased significantly during the third quarter and first three quarters of fiscal ~~2016, accounting for approximately 22% and 53%, respectively, of the increase in our box office receipts during the third quarter and first three quarters of fiscal 2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C.~~2016 due primarily to a reduced number of 3D films and weaker 3D performances from our top fiscal 2017 films, contributing to a lesser increase in our average ticket price during the fiscal 2017 periods than we might otherwise expect. We implemented modest price increases in October 2017 that we expect to favorably impact our average ticket price in future periods.

Our concession revenues ~~increased~~at comparable theatres decreased during the third quarter and first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C~~2016 due to ~~increased~~decreased attendance ~~at comparable theatres~~during the fiscal 2017 periods, partially offset by an increase of 6.7% and ~~an increase~~4.3%, respectively, in our average concession revenues per person. Our average concession revenues per person increased 1.4% and 3.8%, respectively, during the third quarter and first three quarters of fiscal 2016 compared to the third quarter and first three quarters of fiscal 2015C. The increase in our average concession revenues per person contributed approximately ~~$400,000~~$1.6 million and ~~$3.0~~$3.6 million, respectively, to our comparable theatre concession revenues during the third quarter and first three quarters of fiscal ~~2016, accounting for approximately 9% and 51%, respectively, of the increase in our concession revenues during the third quarter and first three quarters of fiscal 2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C.~~2016.

A change in concession product mix, including increased sales of non-traditional food and beverage items from our increased number ofTake Five Lounge^SM ~~Lounge~~,Zaffiro’s® Express andReel Sizzle® outlets, ~~was~~as well as modest selected price increases that we introduced in November 2016, were the primary ~~reason~~reasons for our increased average concession sales per person during the fiscal 2017 periods. We implemented modest price increases in October 2017 that are expected to favorably impact our average concession revenues per person in future periods, as will the anticipated opening of additional non-traditional food and beverage outlets in future periods.
Other revenues increased by $1.5 million and $7.0 million, respectively, during the third quarter and first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C. Conversely, we believe that~~2016. Approximately $1.4 million and $3.9 million, respectively, of this increase related to the ~~previously~~Marcus Wehrenberg theatres, including preshow advertising income, internet surcharge ticketing fees and rental income from the retail center described ~~change~~above. The remaining increases in ~~film product mix~~other revenues during the first three quarters of fiscal ~~2016 slowed the growth of our average concession sales per person, as animated~~2017 was attributable to comparable theatres and ~~family-oriented films tend not to contribute to sales of non-traditional food and beverage items as much as adult-oriented films.~~

~~Other revenues increased during the third quarter and first three quarters of fiscal 2016 compared to the third quarter and first three quarters of fiscal 2015C,~~was due primarily to an increase in preshow advertising income, internet surcharge ticketing fees and an increase in pre-show advertising income. Our agreement with our current advertising provider, Screenvision, includes a provision for a one-time incentive payment if a defined cumulative attendance milestone is reached within a defined time period. Based upon our attendance projections as of the date of this report, we expect to reach this attendance milestone and receive this one-time payment during our fiscal 2016 fourth quarter. In such case, our operating results for the fourth quarter of fiscal 2016 would be positively impacted by this approximately $3.3 million one-time payment.breakage on presold discounted tickets.

~~Comparable~~Total theatre attendance increased ~~14.7%~~4.6% and ~~3.0%~~19.7%, respectively, during the third quarter and first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C,~~2016. Excluding the Marcus Wehrenberg theatres, the new Country Club Hills, Illinois theatre, the new Shakopee, Minnesota theatre, the newBistroPlex and two legacy theatres that are no longer comparable to last year because their pricing policies were significantly changed as a result of the new theatres opened nearby, comparable theatre attendance decreased 17.4% and 4.4%, respectively, during the third quarter and first three quarters of fiscal 2017 compared to the fiscal 2016 periods, due primarily to a ~~stronger~~weaker film slate in the current year periods.
24
We believe ~~that~~ a combination of several ~~other~~additional factors ~~also~~ contributed to ~~this increase in attendance and~~ our above-described outperformance of the industry ~~outperformance.~~during the first three quarters of fiscal 2017. In addition to the $5 Tuesday promotion that continued to perform well, we believe our fiscal ~~2016 third quarter and~~2017 first three quarters attendance was favorably impacted by increased attendance at theatres that have added our spacious new DreamLounger^SM electric all-recliner seating, our proprietaryUltraScreen DLX® andSuperScreen DLX^SM PLF screens and our unique food and beverage outlets described above. We also believe that we ~~benefitted from~~are recognizing the benefits of our customer loyalty program, which now has ~~over 1.6~~approximately 2.4 million members.

~~Box office receipts increased during 10 of the 13 weeks of the~~The third quarter of fiscal ~~2016,~~2017 started very poorly, with ~~the greatest increase~~ten straight weeks of decreased attendance and box office receipts in ~~attendance occurring during~~ July and August, before ending with three strong weeks in September. We were encouraged by the ~~first half of August. Although attendance did increase~~fact that our highest grossing film during the quarter was released during September, ~~2016 compared to September 2015,~~which has historically ~~the second half of August and the month of September have comprised~~been one of the weakest periods for movie-going, as students return to school and the quality of films released tends to weaken. However, that fact also highlights the overall weaker quality of the films released during the preceding two months. We also believe that the particular mix of films during July 2017 was not as favorable to our Midwestern circuit as compared to the films released during July 2016. The top film during July 2016 wasThe Secret Life of Pets and this family-oriented film performed particularly well in our theatres compared to the rest of the nation, contributing to our comparative underperformance to the industry in July 2017 versus July 2016. In addition, historically in our Midwestern markets, rain on the ~~Olympics likely had some negative~~weekends or very warm weather often has a favorable impact on ~~movie-going during~~theatre attendance. During July 2017, weekend weather in the ~~third quarter of fiscal~~markets in which we operate was, on average, not quite as warm as July 2016, nor did it have as ~~television viewing tends~~many weekend days with rain as it did last year. Our past experience has been that people in the Midwest tend to ~~increase during~~enjoy outdoor activities when it’s dry on the ~~two weeks of events. For the first three quarters of fiscal 2016, the increase in attendance occurred despite the fact that the first three quarters of fiscal 2015C included the week between Christmas~~weekend and ~~New Year’s Eve, traditionally one of the busiest weeks of the year.~~not overly hot.

Our highest grossing films during the third quarter of fiscal ~~2016~~2017 included~~The Secret Life of Pets~~It,~~Suicide Squad~~Spider-Man: Homecoming,~~Finding Dory~~Despicable Me 3, ~~Jason Bourne~~Dunkirk and~~Star Trek Beyond~~War for the Planet of the Apes. The film slate during the third ~~quarters~~quarter of fiscal ~~2016 and fiscal 2015C were~~2017 was weighted ~~equally~~more towards strong blockbuster movies, as evidenced by the fact that our top five films during our fiscal ~~2016 and fiscal 2015C~~2017 third ~~quarters each~~quarter accounted for ~~42%~~48% of our total box office results compared to 42% for the top five films during the third quarter of fiscal 2016, both expressed as a percentage of our total box office receipts for the period. We believe this increase in blockbuster films was more an indication of the lesser quality of the other films during the quarter than the quality of the top five films. Our film rental costs ~~expressed as a percentage of our total box office receipts for the applicable period,~~ decreased ~~slightly~~ during the third quarter of fiscal ~~2016~~2017 compared to the third quarter of fiscal ~~2015C and were unchanged during~~2016, as generally the ~~first three quarters~~worse a particular film performs, the lesser the film rental cost tends to be as a percentage of ~~fiscal 2016 compared to the first three quarters of fiscal 2015C.~~box office receipts.

25
Film product for the fourth quarter of fiscal ~~2016~~2017 has, through the date of this report, produced box office results ~~slightly higher~~greater than the same period of fiscal ~~2015C,~~2016, and we believe we have ~~continued~~returned to ~~outperform~~outperforming the industry during this period.Top performing films during this period have included~~The Girl on the Train~~It,~~The Accountant~~Blade Runner 2049,~~Madea Halloween~~Happy Death Day,~~Inferno~~,~~Doctor Strange~~Thor: Ragnarok and~~Trolls~~A Bad Moms Christmas. ~~Films~~Film product scheduled to be released during the traditionally busy ~~Thanksgiving to Christmas~~November and December time period ~~include~~appears quite promising, including films such asMurder on the ~~Harry Potter prequel~~~~Fantastic Beasts and Where to Find Them~~~~, Disney’s next animated film~~~~Moana~~Orient Express,~~Collateral Beauty~~Daddy’s Home 2,~~La La Land~~~~, the highly anticipated~~~~Rogue One: A Star Wars Story~~Justice League,~~Sing~~Coco,~~Passengers~~ ~~and~~~~Assassin’s Creed~~~~. We believe comparisons to films released during the fourth quarter of fiscal 2015C (which included the highest grossing film of all time –~~Star Wars: The ~~Force Awakens~~Last Jedi~~) may be challenging, but we are hopeful that this year’s film product will perform well.~~
In addition, comparisons to our fiscal 2015C fourth quarter will be negatively impacted by the fact that we had a 53rd week of operations during fiscal 2015C. Comparing the weeks included during the fourth quarter of fiscal 2016,Pitch Perfect 3 andJumanji: Welcome to the weeks included during the fourth quarter of fiscal 2015C, the additional week of operations during fiscal 2015C consisted of five days at the end of September 2015 and the last two days of December 2015, including New Year’s Eve. Historically, September is not a particularly strong month at the box office, but the last two days in December fall among one of the busiest movie-going weeks of the year – the week between Christmas and New Year’s Day.Jungle. Revenues for the theatre business and the motion picture industry in general are heavily dependent on the general audience appeal of available films, together with studio marketing, advertising and support campaigns and the maintenance of the current “windows” between the date a film is released in theatres and the date a motion picture is released to other channels, including video on-demand and DVD. These are factors over which we have no control.

We ended the first three quarters of fiscal ~~2016~~2017 with a total of ~~659~~884 company-owned screens in 5167 theatres and 11 managed screens in two theatres, compared to ~~664~~659 company-owned screens in 5251 theatres and 11 managed screens in two theatres at the end of the first three quarters of fiscal ~~2015C. We closed one six-screen budget-oriented theatre~~2016. In addition to the previously described new theatres opened and acquired during ~~the third quarter of fiscal 2015C and one seven-screen budget-oriented theatre during the fourth quarter of fiscal 2015C. We also~~2016, in April 2017, we opened ~~two~~our new~~Ultra~~Screen DLX auditoriums at an existing theatre in Minnesota in February 2016. We converted five more theatres to all-DreamLounger recliner seating during March and April 2016 and converted two additional theatres in October 2016, increasing our percentage of auditoriums with recliner seating to 48% - a percentage we believe to be the highest among the top chains in the United States. We opened one new~~Zaffiro’s Express~~ ~~and two new~~~~Reel Sizzle~~ ~~lobby dining outlets during the second quarter of fiscal 2016, two new~~~~Zaffiro’s Express~~ ~~and one~~~~Take Five Lounge~~ ~~outlets during the third quarter of fiscal 2016, and we expect to open three new~~ ~~Zaffiro’s Express~~ ~~and two new~~~~Reel Sizzle~~ ~~outlets during the fourth quarter of fiscal 2016 (including the Country Club Hills Cinema described below). We also completed conversion of one~~~~Ultra~~~~Screen to an~~~~Ultra~~~~Screen DLX during October 2016 and are in the process of converting three additional screens to~~~~Super~~~~Screen DLX auditoriums at two existing theatres. Two new screens are currently under construction at our Marcus Palace~~ 10-screen Southbridge Crossing Cinema in ~~Sun Prairie, Wisconsin, and we expect the screens to open in late November 2016.~~

~~In April 2016, we purchased a closed 16-screen~~Shakopee, Minnesota. This state-of-the-art theatre in Country Club Hills, Illinois, which is now our sixth theatre in the greater Chicago area, building on our strong presence in the Chicago southern suburbs. The purchase was part of an Internal Revenue Code §1031 like-kind exchange in which the tax gain from our October 2015 sale of the real estate related to the Hotel Phillips was deferred by reinvesting the applicable proceeds in replacement real estate within a prescribed time period. We opened the newly renovated theatre early in the fourth quarter of fiscal 2016. The renovation addedincludes DreamLounger recliner seating toin all auditoriums, ~~added one~~twoUltra~~Screen DLX auditorium and two~~~~Super~~Screen DLX auditoriums, as well as aTake Five Lounge and~~Reel Sizzle~~Zaffiro’s Express outlet. ~~We have also commenced construction~~On June 30, 2017, the first day of ~~a new 10-screen theatre in Shakopee, Minnesota and~~our fiscal 2017 third quarter, we opened our first stand-alone all in-theatre dining location, ~~which will be an eight-screen theatre~~brandedBistroPlex and located in Greendale, Wisconsin. This new theatre features eight in-theatre dining auditoriums with DreamLounger recliners, including twoSuperScreen DLX auditoriums, plus a separate full-serviceTake Five Lounge. We have announced plans to further expand this concept, including a new location in Brookfield, Wisconsin. Construction is expected to begin on this new location in 2018.
During the first three quarters of fiscal 2017, we completed the addition of DreamLounger recliner seating at nine more existing theatres, including two theatres (one of which was a Marcus Wehrenberg theatre) completed late in our fiscal 2017 third quarter, increasing our industry-leading percentage of first-run auditoriums with recliner seating to 66% for legacy Marcus theatres and 56% when including the theatres we acquired in the Wehrenberg acquisition. In late October 2017, we completed the addition of DreamLounger recliner seating to four more existing theatres (including three Marcus Wehrenberg theatres) and we are currently in the process of converting two additional Marcus Wehrenberg theatres to all-DreamLounger recliner seating, with expected completion late in the fourth quarter of fiscal 2017 or early in the first quarter of fiscal 2018.
We opened one newZaffiro’s Expressoutlet during the third quarter of fiscal 2017 and expect to open two newZaffiro’s Expressoutlets, three newTake Five Lounge outlets and twoReel Sizzle outlets during the fourth quarter of fiscal 2017. We also ~~will consider~~converted one existing traditionalUltraScreen to anUltraScreen DLX auditorium and three existing screens toSuperScreen DLX auditoriums during the third quarter of fiscal 2017 and converted one additional ~~acquisitions~~existing traditionalUltraScreen to anUltraScreen DLX auditorium and two existing screens toSuperScreen DLX auditoriums early in the fourth quarter of fiscal 2017. We expect to convert one existing ~~theatres or~~Wehrenberg-branded PLF screen to anUltraScreen DLX and up to six additional existing screens toSuperScreen DLX auditoriums during the fourth quarter of fiscal 2017. We closed and sold one eight-screen budget-oriented theatre ~~circuits when~~during the ~~right opportunities arise.~~fiscal 2017 second quarter. On the first day of our fiscal 2017 third quarter, we converted an existing 12-screen first-run theatre to a budget-oriented theatre.
26

Hotels and Resorts

The following table sets forth revenues, operating income and operating margin for our hotels and resorts division for the third quarter and first three quarters of fiscal ~~2016~~2017 and fiscal ~~2015C~~2016 (in millions, except for variance percentage and operating margin):

Third Quarter First Three Quarters Third Quarter First Three Quarters
Variance Variance Variance Variance
F2016 F2015C Amt. Pct. F2016 F2015C Amt. Pct. F2017 F2016 Amt. Pct. F2017 F2016 Amt. Pct.
Revenues $ 62.6 $ 64.8 $ (2.2 ) -3.4 % $ 165.9 $ 168.6 $ (2.7 ) -1.6 % $ 63.9 $ 62.6 $ 1.3 2.0 % $ 169.1 $ 165.9 $ 3.2 2.0 %
Operating income 10.6 11.3 (0.7 ) -5.8 % 15.1 10.2 4.9 48.5 % 9.6 10.6 (1.0 ) -9.3 % 12.7 15.1 (2.4 ) -15.8 %
Operating margin (% of revenues) 17.0 % 17.4 % 9.1 % 6.0 % 15.1 % 17.0 % 7.5 % 9.1 %

Hotels and resorts division revenues ~~decreased 3.4% and 1.6%~~increased 2.0% during the third quarter of fiscal 2017 compared to the third quarter of fiscal 2016 due primarily to increased food and beverage revenues from our newSafeHouse restaurant and bar in Chicago, Illinois that we opened on March 1, 2017, and a small increase in room revenues at our existing company-owned hotels due to our addition of 29 new all-season villas at the Grand Geneva Resort & Spa in May 2017. Hotels and resorts division revenues increased 2.0% during the first three quarters of fiscal 2017 compared to the first three quarters of fiscal 2016 ~~respectively, compared to the third quarter and first three quarters of fiscal 2015C~~ due to ~~decreased~~increased food and beverage revenues from theSafeHouse Chicago, increased room revenues at our existing company-owned hotels and ~~the negative impact on total~~increased other revenues ~~resulting~~ from our ~~sale of the Hotel Phillips in October 2015,~~EscapeHouse Chicago and our in-house web design and laundry businesses, partially offset by ~~increased room revenues at our remaining eight company-owned hotels. The fact that the first three quarters of fiscal 2015C included New Year’s Eve, which is historically~~ a strong holiday for many of our hotels, particularly for our food and beverage outlets, and a lack of snow during the first quarter of fiscal 2016 which negatively impacted our ski operations at our Grand Geneva Resort & Spa, contributed to our reduced total revenues during the first three quarters of fiscal 2016. Conversely, our acquisition of the~~SafeHouse®~~ ~~restaurant~~small decrease in ~~June 2015 favorably impacted hotels and resorts division food and beverage revenues during the first three quarters of fiscal 2016 as compared to the same period in fiscal 2015C. Excluding the~~~~SafeHouse~~and Hotel Phillips from both years, our comparable hotels and resorts revenues increased 0.3% and 2.1%, respectively, during the third quarter and first three quarters of fiscal 2016 compared to the third quarter and first three quarters of fiscal 2015C.management fee revenues.

Hotels and resorts division operating income decreased by ~~5.8%~~9.3% during the third quarter of fiscal ~~2016~~2017 compared to the third quarter of fiscal ~~2015C~~2016 due primarily to ~~decreased food and beverage revenues~~the impact of a small decrease in revenue per available room (RevPAR) at our existing company-owned hotels and ~~the negative impact on total~~start-up operating ~~income resulting from~~losses at our ~~sale of the Hotel Phillips in October 2015.~~newSafeHouse Chicago. Hotels and resorts division operating income ~~increased~~decreased by ~~48.5%~~15.8% during the first three quarters of fiscal ~~2016~~2017 compared to the first three quarters of fiscal ~~2015C~~2016 due ~~primarily~~entirely to ~~strong cost controls~~preopening expenses and ~~increased revenue per available room at~~startup operating losses related to the newSafeHouse Chicago and a reduction in profits from our ~~company-owned hotels.~~ management business, due in part to a small one-time favorable adjustment during the prior year period. Excluding these two items, operating income for our hotels and resorts division during the first three quarters of fiscal 2017 was essentially equal to operating income during the first three quarters of fiscal 2016.
Our operating margin during the third quarter and first three quarters of fiscal ~~2016~~2017 was ~~17.0%~~15.1% and ~~9.1%~~7.5%, respectively, compared to an operating ~~margins~~margin of ~~17.4%~~17.0% and ~~6.0%~~9.1%, respectively, during the third quarter and first three quarters of fiscal 2015C. Comparisons to our fiscal 2015C first three quarters results benefited from the fact that, during the majority of the first half of fiscal 2015C, our AC Hotel Chicago Downtown was undergoing a major renovation and was operating without a brand. In addition, hotels and resorts division operating income during the fiscal 2015C periods was negatively impacted by a $2.6 million impairment charge related to one specific hotel.2016. Excluding theSafeHouse Chicago and ~~Hotel Phillips~~management business profits from both years, ~~as well as the aforementioned impairment charge during fiscal 2015C,~~ our comparable hotels and resorts division operating income decreased ~~1.9%~~5.5% and ~~increased 28.7%~~0.8%, respectively, during the third quarter and first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C.~~2016. Excluding these same items, our operating margin during the third quarter and first three quarters of fiscal ~~2016~~2017 was ~~17.4%~~14.7% and ~~9.6%~~7.4%, respectively, compared to an operating ~~margins~~margin of ~~17.8%~~15.6% and 7.6%, respectively, during the third quarter and first three quarters of fiscal ~~2015C.~~2016.
27

The following table sets forth certain operating statistics for the third quarter and first three quarters of fiscal ~~2016~~2017 and fiscal ~~2015C,~~2016, including our average occupancy percentage (number of occupied rooms as a percentage of available rooms), our average daily room rate, or ADR, and our total revenue per available room, or RevPAR, for company-owned properties:

Third Quarter⁽¹⁾ First Three Quarters⁽¹⁾ Third Quarter⁽¹⁾ First Three Quarters⁽¹⁾
Variance Variance Variance Variance
F2016 F2015C Amt. Pct. F2016 F2015C Amt. Pct. F2017 F2016 Amt. Pct. F2017 F2016 Amt. Pct.
Occupancy pct. 82.1 % 82.1 %           - pts        - % 75.8 % 74.4 %      1.4 pts 1.9 % 82.0 % 82.1 % -0.1 pts -0.1 % 76.2 % 75.8 %       0.4 pts 0.5 %
ADR $ 165.05 $ 160.79 $ 4.26 2.6 % $ 149.80 $ 145.84 $ 3.96 2.7 % $ 164.47 $ 165.05 $ (0.58 ) -0.4 % $ 149.75 $ 149.80 $ (0.05 )       - %
RevPAR $ 135.45 $ 131.92 $ 3.53 2.7 % $ 113.53 $ 108.55 $ 4.98 4.6 % $ 134.85 $ 135.45 $ (0.60 ) -0.4 % $ 114.05 $ 113.53 $ 0.52 0.5 %

(1) These operating statistics represent averages of our eight distinct comparable company-owned hotels and resorts, branded and unbranded, in different geographic markets with a wide range of individual hotel performance. The statistics are not necessarily representative of any particular hotel or resort.

RevPAR increased at ~~five~~three of our eight company-owned properties during the third quarter ~~of fiscal 2016~~ and ~~six of our eight company-owned properties during the~~ first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C.~~2016. According to data received from Smith Travel Research and compiled by us in order to evaluate our results for the third quarter and first three quarters of fiscal ~~2016,~~2017, comparable “upper upscale” hotels throughout the United States experienced ~~an increase~~a decrease in RevPAR of ~~2.3% and 2.4%, respectively,~~0.4% during our fiscal ~~2016~~2017 third quarter and an increase of 1.0% during our fiscal 2017 first three quarters compared to our fiscal ~~2015C third quarter and~~2016 first three quarters. ~~In comparison, data~~Data received from Smith Travel Research for our various “competitive sets” – hotels identified in our specific markets that we deem to be competitors to our hotels – indicates that these hotels experienced ~~an increase~~a decrease in RevPAR of ~~1.7%~~4.8% and ~~2.5%~~4.2%, respectively, during our fiscal 2017 third quarter and first three quarters compared to our fiscal 2016 third quarter and first three quarters.

We believe our RevPAR ~~increases~~decrease during the third quarter of fiscal 2017 was due in large part to reduced group business compared to the third quarter of fiscal 2016. A particular challenge during the fiscal 2017 third quarter was a decrease in group sales productivity in which an unusually high number of groups contributed less actual rooms sold than were originally booked. The reduction in group business during the fiscal 2017 periods also resulted in small decreases in our food and ~~outperformance of~~beverage revenues at comparable hotels compared the ~~industry~~same periods in fiscal 2016. As noted above, despite these challenges in group business, our change in RevPAR outperformed our competitive sets during both the third quarter and first three quarters of fiscal ~~2016 compared to~~2017 by 4.4 and 4.7 percentage points, respectively, as we had success replacing some of the ~~third quarter and first three quarters of fiscal 2015C were primarily the result of our continued emphasis on increasing our ADR, as described below. Reduced~~decline in group business negatively impacted several of our hotels during the third quarter of fiscal 2016 and resulted in a corresponding reduction in food and beverage revenues during the third quarter of fiscal 2016 compared to the third quarter of fiscal 2015C. Conversely, additional group and transient business during the first three quarters of fiscal 2016 contributed to our improved results for the first three quarters of fiscal 2016 compared to the first three quarters of fiscal 2015C, as evidenced by ourwith an increase in ~~occupancy percentage. Our company-owned hotels also experienced an increase in~~non-group business.
Looking to future periods, as of the date of this report, we are encouraged by the fact that our group room revenue bookings for ~~future periods during~~ the ~~third quarter of~~remaining period in fiscal ~~2016 compared to advanced group bookings during the third quarter of~~2017 and for fiscal ~~2015C –~~2018 - something commonly referred to in the hotels and resorts industry as “group ~~pace.”~~pace” - is running ahead of our group room revenue bookings for future periods last year at this time. Banquet and catering revenue pace for the remainder of fiscal 2017 has also increased compared to last year at this time.
28

Our ADR ~~increases in the current year periods were the direct result of a strategy at several hotels to emphasize rate, occasionally at the expense of occupancy. However, reduced group business~~decreased during the third quarter of fiscal ~~2016~~2017 compared to the third quarter of fiscal ~~2015C resulted~~2016, despite our addition in ~~only four~~May 2017 of 29 new all-season villas at the Grand Geneva Resort & Spa. These new higher-priced units contributed to an increase in our ~~eight company-owned hotels reporting increased~~ ADR at that property. Due to the challenges in group productivity during the fiscal ~~2016~~2017 third quarter, as we ~~increased the number of rooms occupied at discounted rates. Conversely, the~~elected to accept a lower ADR in some situations to obtain additional group business at several of our hotels during the first three quarters of fiscal 2016 allowed us to increase rates for the remaining available rooms and reduce the number of rooms occupied at discounted rates. As a result, six of our eight company-owned and operated hotels reported increasednon-group business. Our very small decrease in ADR during the first three quarters of fiscal ~~2016~~2017 compared to the first three quarters of fiscal ~~2015C.~~
~~We completed a renovation~~2016 was due in part to the fact that, during our fiscal 2017 first quarter, our focus was on increasing occupancy, often at the expense of ~~The Skirvin Hilton hotel in Oklahoma City, Oklahoma, which included all~~ADR (it is generally more difficult to increase ADR during our slower winter season, as overall occupancy is at its lowest). Three of the guest rooms and key public spaces, during the third quarter of fiscal 2016. Operating results at this hotel were negatively impacted by the disruption during the renovation. The AC Hotel Chicago Downtown is now in its second year of operation and achievedour eight company-owned hotels reported increased ~~operating performance~~ADR during the third quarter and first three quarters of fiscal ~~2016~~2017 compared to the third quarter and first three quarters of fiscal ~~2015C.~~ 2016.
We ~~recently began construction~~continue to expect to report changes in RevPAR that generally track or exceed the overall industry and local market trends in future periods. As we noted in prior reports, the pace of the lodging industry’s growth slowed during the second half of fiscal 2016. Group business remains one of the most important segments for several of our hotels and also has an impact on ~~a project~~our ADR. Typically, when we have substantial blocks of rooms committed to group business, we are able to raise rates with non-group business. Many reports published by those who closely follow the hotel industry suggest that the United States lodging industry will ~~add 29 spacious, all-season villas~~continue to achieve slightly slower but steady growth in RevPAR during the ~~Grand Geneva Resort & Spa in Lake Geneva, Wisconsin. This multi-million dollar investment is designed to enhance the resort experience for travelers who want expanded, upscale accommodations~~remainder of calendar 2017 and ~~will increase our total combined units at this top Midwest destination property to more than 600 (including the Timber Ridge Lodge) when the Villas open in mid-2017.~~

into calendar 2018. Whether the current ~~relatively positive~~ trends in the hotel industry as a whole continue depends in large part on the economic environment in which we operate, as hotel revenues have historically tracked very closely with traditional macroeconomic statistics such as the Gross Domestic Product. We also continue to monitor hotel supply in our markets, as increased supply without a corresponding increase in demand may have a negative impact on our results.

~~Comparisons~~We believe that our hotels and resorts division operating results will continue to benefit in future periods from the new villas at the Grand Geneva Resort & Spa. In addition, the Omaha Marriott Downtown at The Capitol District in Omaha, Nebraska, a new hotel that we manage and in which we hold a minority interest, opened on August 8, 2017, and initial guest response to this hotel has been favorable. In addition, in September 2017, we assumed management of the Sheraton Chapel Hill Hotel in Chapel Hill, North Carolina, which will favorably impact our revenues derived from management fees. Conversely, it is possible that our newSafeHouse Chicago restaurant may continue to have some negative impact on our hotels and resorts division operating results during the next two quarters as that new property continues to increase patronage and ramp up operating efficiencies.
Early in the second quarter of fiscal 2017, we ceased management of the Sheraton Madison Hotel in Madison, Wisconsin and sold our 15% minority ownership interest in the property for a small gain. We do not expect this transaction to significantly impact our fiscal ~~2015C~~2017 operating results. Early in the fourth quarter of fiscal 2017, we ceased management of The Westin® Atlanta Perimeter North in Atlanta, Georgia and sold our 11% minority interest in the property for a substantial gain. Although the loss of management fees from this hotel will ~~be negatively impacted~~have a slight negative impact on future operating results, we expect the gain from this transaction to positively impact pre-tax earnings by ~~the fact that we had a 53rd week of operations during fiscal 2015C. Comparing the weeks included~~over $4.5 million during the fourth quarter of fiscal 2016 to the weeks included during the fourth quarter of fiscal 2015C, the additional week of operations during fiscal 2015C consisted of five days at the end of September 2015 and the last two days of December 2015, including New Year’s Eve. Historically, September is a strong month for our hotels and resorts division and New Year’s Eve is a particularly strong day, especially for our food and beverage revenues.2017.
29

We ~~also expect to~~ continue to explore opportunities to monetize other selected existing ~~company-owned hotels.~~owned hotels in the future. We will consider many factors as we actively review opportunities to execute this strategy, including income tax considerations, the ability to retain management, pricing and individual market considerations. ~~Conversely,~~Our execution of this strategy is also dependent upon a favorable hotel transactional market, over which we have limited control. In addition, we have a number of ~~additional~~ potential growth opportunities that we are currently evaluating. The timing and nature of the opportunities may vary and include pure management contracts, management contracts with equity, and joint venture investments. ~~Both~~
In October 2017, Joe Khairallah submitted his resignation as division President and Chief Operating Officer of ~~these strategies may take time~~Marcus Hotels and Resorts to ~~execute~~pursue global opportunities. We are grateful for his contributions to our company during the past four years. Greg Marcus will assume operational oversight of this division as we evaluate our future leadership needs, supported by a strong and ~~are generally dependent upon a favorable hotel transactional market, over which we have no control.~~experienced senior leadership team.
LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our movie theatre and hotels and resorts ~~divisions~~businesses each generate significant and consistent daily amounts of cash, subject to previously-noted seasonality, because each segment’s revenue is derived predominantly from consumer cash purchases. We believe that these relatively consistent and predictable cash sources, as well as the availability of approximately ~~$136~~$64 million of unused credit lines as of the end of our fiscal ~~2016~~2017 third quarter, will be adequate to support the ongoing operational liquidity needs of our businesses during the ~~next 12 months.~~
On June 16, 2016, we replaced our then existing credit agreement, consisting of a $37 million term loan and a $175 million revolving credit facility, by entering into a new five-year, $225 million credit agreement among us and several banks, including JPMorgan Chase Bank, N.A., as Administrative Agent, and U.S. Bank National Association, as Syndication Agent (the “Credit Agreement”). The Credit Agreement provides for a revolving credit facility that matures on June 16, 2021 with an initial maximum aggregate amount of availability of $225 million. Availability under the revolving credit facility is reduced by outstanding commercial paper borrowings (none as of September 29, 2016) and outstanding letters of credit ($3.4 million as of September 29, 2016). We may request to increase the aggregate amount of the revolving credit facility and/or term loan commitments under the Credit Agreement, including by the addition of one or more tranches of term loans, by an aggregate amount of up to $75 million, subject to certain conditions, which include, among other things, the absence of any default or event of default under the Credit Agreement.

Under the Credit Agreement, we have agreed to pay a facility fee, payable quarterly, equal to 0.15% to 0.25% of the total commitment, depending on our consolidated debt to total capitalization ratio, as defined in the Credit Agreement. Borrowings under the revolving credit facility bear interest, payable no less frequently than quarterly, at a rate equal to (a) LIBOR plus a specified margin between 0.85% and 1.375% (based on our consolidated debt to total capitalization ratio) or (b) an alternate base rate (which is the greatest of (i) the Administrative Agent’s prime rate, (ii) the federal funds rate plus 0.50% or (iii) the sum of 1% plus one-month LIBOR) plus a margin (based upon our consolidated debt to capitalization ratio) specified in the Credit Agreement.
The Credit Agreement contains various restrictions and covenants applicable to The Marcus Corporation and certain of our subsidiaries. Among other requirements, the Credit Agreement limits the amount of priority debt (as defined in the Credit Agreement) held by our restricted subsidiaries to no more than 20% of our consolidated total capitalization (as defined in the Credit Agreement), limits our permissible consolidated debt to total capitalization ratio to a maximum of 0.55 to 1.0 and requires us to maintain a minimum fixed charge coverage ratio (consolidated adjusted cash flow to consolidated interest and rental expense) of 3.0 to 1.0, as defined in the Credit Agreement.
As of September 29, 2016, we were in compliance with the financial covenants set forth in the Credit Agreement. As of September 29, 2016, our consolidated debt to total capitalization ratio was 0.35 and our fixed charge coverage ratio was 7.4. We expect to be able to meet the financial covenants contained in the Credit Agreement during the remainder of fiscal ~~2016.~~2017.

Financial Condition

Net cash provided by operating activities totaled ~~$44.8~~$50.9 million during the first three quarters of fiscal ~~2016,~~2017, compared to ~~$41.2~~$44.8 million during the first three quarters of the fiscal ~~2015C.~~2016. The increase of ~~$3.6~~$6.1 million in net cash provided by operating activities was due primarily to increased net earnings and depreciation and amortization and the favorable timing in the payment of accounts payable and taxes other than income, partially offset by the change in deferred taxes and the unfavorable timing in the collection of accounts and notes receivable and ~~payment of accounts payable and accrued compensation, partially offset by the unfavorable timing~~ in the payment of ~~income taxes and other~~ accrued ~~liabilities~~compensation during the first three quarters of fiscal ~~2016.~~2017.

Net cash used in investing activities during the first three quarters of fiscal ~~2016~~2017 totaled ~~$40.3~~$84.6 million, compared to ~~$58.4~~$40.3 million during the first three quarters of fiscal ~~2015C. The largest~~2016. A significant contributor to the ~~decrease~~increase in net cash used in investing activities was a $12.5 million decrease in restricted cash during the first three quarters of fiscal 2016. When we sold the Hotel Phillips in October 2015, the majority of the cash proceeds were held by an intermediary in conjunction with an anticipated Internal Revenue Code §1031 like-kind exchange whereby we planned to subsequently purchase other real estate in order to defer the related tax gain on ~~the~~ sale of the hotel. During the first three quarters of fiscal 2016, we successfully reinvested the proceeds in additional real estate within the prescribed time period and we received the cash held by the intermediary, thereby reducing restricted cash.

30
The ~~decrease~~increase in net cash used in investing activities was also the result of ~~a small decrease~~an increase in capital expenditures, ~~as well as our sale~~partially offset by an increase in net proceeds from disposals of ~~an interest in a joint venture (related to the Hotel Zamora located in St. Pete Beach, Florida) during the first three quarters of fiscal 2016~~property, equipment and ~~the purchase of an interest in a joint venture during the first three quarters of fiscal 2015C.~~other assets. Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled $87.3 million during the first three quarters of fiscal 2017 compared to $58.1 million during the first three quarters of fiscal ~~2016 compared to $59.1~~2016. Approximately $23.5 million ~~during the first three quarters of fiscal 2015C. Approximately~~and $17.1 million, respectively, of our capital expenditures during the first three quarters of fiscal 2017 and fiscal 2016 were related to real estate purchases and new theatre development costs for three new theatres, one of which opened during the fourth quarter of fiscal 2016 and two of which are currently under construction. Approximately $14.4 million of our capital expenditures during the first three quarters of fiscal 2015C were related to the development of a new theatre that opened in May 2015.described above. We did not incur any ~~significant~~ acquisition-related capital expenditures during the first three quarters of fiscal ~~2016~~2017 or the first three quarters of fiscal ~~2015C.~~2016.

~~Cash~~Fiscal 2017 first three quarters cash capital expenditures included approximately $69.5 million incurred in our theatre division, including the new theatre development costs described above and costs associated with our addition of DreamLounger recliner seating,UltraScreen DLX andSuperScreen DLX auditorium conversions and newZaffiro’s Express,Take Five Lounge andReel Sizzle outlets to existing theatres. We also incurred capital expenditures in our hotels and resorts division during the first three quarters of fiscal 2017 of approximately $17.5 million, including costs associated with the development of our newSafeHouse Chicago location, our development of new villas at the Grand Geneva Resort & Spa described above and various maintenance capital projects at our owned hotels and resorts. Fiscal 2016 first three quarters cash capital expenditures included approximately $49.5 million ~~of capital expenditures~~ incurred inby our theatre division, including costs associated with ~~several previously-described projects (including~~our addition of DreamLounger recliner seating, ~~additions,~~ newUltraScreen DLX andSuperScreen DLX auditoriums and newZaffiro’s Express,Take Five Lounge andReel Sizzle ~~outlets),~~outlets to existing theatres, as well as new theatre costs noted above. We also incurred capital expenditures in our hotels and resorts division during the first three quarters of fiscal 2016 of approximately $8.4 million, including costs associated with the renovation of theSafeHouse Milwaukee and ~~The~~ Skirvin Hilton. Cash capital expenditures during the first three quarters of fiscal 2015C included approximately $40.3 million of capital expenditures that we incurred in our theatre division, including costs associated with a new theatre in Sun Prairie, Wisconsin and various DreamLounger recliner seating additions, as well as new premium large format screens and~~Take Five Lounge~~ ~~and~~~~Zaffiro’s Express~~ outlets. We also incurred capital expenditures in our hotels and resorts division during the first three quarters of fiscal 2015C of approximately $18.3 million, including costs associated with the renovation of the AC Hotel Chicago Downtown and our purchase of the~~SafeHouse~~.

Net ~~cash used in financing activities during the first three quarters of fiscal 2016 totaled $5.3 million, compared to net~~ cash provided by financing activities during the first three quarters of fiscal ~~2015C~~2017 totaled $37.0 million compared to net cash used in financing activities of ~~$3.3 million.~~$5.3 million during the first three quarters of fiscal 2016. We used excess cash during both periods to reduce our borrowings under our revolving credit facility. As short-term borrowings became due, we replaced them as necessary with new short-term borrowings. As a result, we added $254.0 million of new short-term borrowings and we made $236.5 million of repayments on short-term borrowings during the first three quarters of fiscal 2017 (net increase in borrowings on our credit facility of $17.5 million). In conjunction with the execution of ~~our~~a new ~~Credit Agreement~~credit agreement in June 2016, we also paid all outstanding borrowings under our old revolving credit facility and replaced them with borrowings under our new revolving credit ~~facility.~~facility during the first three quarters of fiscal 2016. As a result, we added $250.2 million of new short-term borrowings and we made $191.2 million of repayments on short-term borrowings during the first three quarters of fiscal 2016 (net increase in borrowings on our credit ~~facilities~~facility of $59.0 million) ~~compared to $167.0~~.
31
We received proceeds from the issuance of long-term debt totaling $65.0 million ~~of new short-term borrowings and $150.0 million of repayments on short-term borrowings made~~ during the first three quarters of fiscal ~~2015C (net increase in borrowings on~~2017, including the proceeds from our ~~credit facilities~~issuance of ~~$17.0 million). We made $51.9~~$50 million of ~~principal payments on long-term debt~~senior notes in February 2017. In addition, we repaid a mortgage note that matured in January 2017 with a balance of $24.2 million as of December 29, 2016 during the first three quarters of fiscal 2017 and replaced it with borrowings under our revolving credit facility and the issuance of a $15.0 million mortgage note bearing interest at LIBOR plus 2.75%, requiring monthly principal and interest payments and maturing in fiscal 2020. We made principal payments on long-term debt totaling $35.9 million during the first three quarters of fiscal 2017 (including the mortgage note repayment described above) compared to payments of $51.9 million during the first three quarters of fiscal 2016. Fiscal 2016 ~~including~~repayments included our repayment of a $37.2 million term loan from our prior credit ~~agreement, compared to principal payments~~agreement. Our debt-to-capitalization ratio (excluding our capital lease obligations) was 0.44 at September 28, 2017 and 0.42 at December 29, 2016.
We repurchased approximately 29,000 shares of ~~$6.3 million~~our common stock for approximately $850,000 in conjunction with the exercise of stock options during the first three quarters of fiscal ~~2015C. Our debt-to-capitalization ratio was 0.38 at September 29, 2016 and December 31, 2015.~~

~~We repurchased approximately~~2017, compared to 331,000 shares ~~of our common stock~~repurchased for approximately $6.3 million in the open market or in conjunction with the exercise of stock options during the first three quarters of fiscal ~~2016, compared to 52,000 shares repurchased for approximately $1.0 million in conjunction with the exercise of stock options during the first three quarters of fiscal 2015C.~~2016. As of September ~~29, 2016,~~28, 2017, approximately 2.9 million shares remained available for repurchase under prior Board of Directors repurchase authorizations. We expect that we will execute any future repurchases on the open market or in privately-negotiated transactions, depending upon a number of factors, including prevailing market conditions.

~~Dividend~~We made dividend payments during the first three quarters of fiscal ~~2016 totaled $9.0~~2017 totaling $10.1 million compared to dividend payments of ~~$8.2~~$9.0 million during the first three quarters of fiscal ~~2015C.~~2016. The increase in dividend payments was the result of ~~a 10.5% increase in our regular quarterly dividend payment initiated during May 2015 and~~ an ~~additional 7.1%~~11.1% increase in our regular quarterly dividend payment initiated in March ~~2016.~~2017. During the first three quarters of fiscal 2016, we made distributions to noncontrolling interests of $448,000, compared to ~~$505,000~~none during the first three quarters of fiscal ~~2015C.~~2017.

We believe our total capital expenditures for fiscal ~~2016 may~~2017 will approximate ~~$75-80~~$105-$115 million, barring our pursuance of any growth opportunities that could arise in the remaining months and depending upon the timing of our payments on several of the various projects incurred by our two divisions. Some of ~~the~~our payments on projects undertaken during fiscal ~~2016~~2017 may carry over to fiscal ~~2017.~~2018. The actual timing and extent of the implementation of all of our current expansion plans will depend in large part on industry and general economic conditions, our financial performance and available capital, the competitive environment, evolving customer needs and trends, and the availability of attractive opportunities. ~~We expect~~It is likely that our plans will continue to evolve and change in response to these and other factors.

32
Item 3. Quantitative and Qualitative Disclosures About Market Risk

We have not experienced any material changes in our market risk exposures since December ~~31, 2015.~~29, 2016.

Item 4. Controls and Procedures

a.            ~~Evaluation of disclosure controls and procedures~~
a. Evaluation of disclosure controls and procedures

Based on their evaluations and the evaluation of management, as of the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934 (the “Exchange Act”)) are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

b.           ~~Changes in internal control over financial reporting~~
b. Changes in internal control over financial reporting

There were no significant changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15 of the Exchange Act that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION
~~Item 1A.     Risk Factors~~
Item 1A. Risk Factors

Risk factors relating to us are contained in Item 1A of our ~~Transition~~Annual Report on Form 10-K for the fiscal ~~period~~year ended December ~~31, 2015.~~29, 2016. No material change to such risk factors has occurred during the 39 weeks ended September ~~29, 2016.~~28, 2017.
33
~~Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds~~
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table sets forth information with respect to purchases made by us or on our behalf of our Common Stock during the periods indicated. All of these repurchases were made in conjunction with the exercise of stock options and/or the purchase of shares in the open market and pursuant to the publicly announced repurchase authorization described below.

Period

Total Number of
Shares
Purchased

Average Price
Paid per Share
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Programs (1)
Maximum
Number of
Shares that May
Yet be Purchased
Under the Plans
or Programs (1)

July 1 – July 28 15,466 $ 21.95 15,466 2,925,925
July 29 – August 25 984 22.55 984 2,924,941
August 26 – September 29 23,954 24.84 23,954 2,900,987
Total 40,404 $ 23.68 40,404 2,900,987
Period Total Number of
Shares
Purchased Average Price
Paid per Share Total Number of
Shares
Purchased as
Part of Publicly
Announced
Programs (1) Maximum
Number of
Shares that May
Yet be Purchased
Under the Plans
or Programs (1)
June 30 – July 27 1,532 $ 29.55 1,532 2,888,094
July 28 – August 31 — — — 2,888,094
September 1 – September 28 18,672 27.64 18,672 2,869,422
Total 20,204 $ 27.78 20,204 2,869,422

(1) Through September ~~29, 2016,~~28, 2017, our Board of Directors had authorized the repurchase of up to approximately 11.7 million shares of our outstanding Common Stock. Under these authorizations, we may repurchase shares of our Common Stock from time to time in the open market, pursuant to privately negotiated transactions or otherwise. As of September ~~29, 2016,~~28, 2017, we had repurchased approximately 8.8million shares of our Common Stock under these authorizations. The repurchased shares are held in our treasury pending potential future issuance in connection with employee benefit, option or stock ownership plans or other general corporate purposes. These authorizations do not have an expiration date.
~~Item 4.        Mine Safety Disclosures~~
Item 4. ~~Not applicable.~~Mine Safety Disclosures
Not applicable.

34
~~Item 6.        Exhibits~~
Item 6. Exhibits

31.1 Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32 Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350.

101 The following materials from The Marcus Corporation’s Quarterly Report on Form 10-Q for the quarter ended September ~~29, 2016~~28, 2017 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) the Condensed Notes to Consolidated Financial Statements.

34
35


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

THE MARCUS CORPORATION

DATE:  November ~~8, 2016~~7, 2017 By:   ~~/s/~~/s/ Gregory S. Marcus
Gregory S. Marcus
President and Chief Executive Officer

DATE:  November ~~8, 2016~~7, 2017 By:   ~~/s/~~/s/ Douglas A. Neis
Douglas A. Neis
Chief Financial Officer and Treasurer

~~S-1~~
S-1

Wisconsin		39-1139844
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

100 East Wisconsin Avenue, Suite 1900 Milwaukee, Wisconsin		53202-4125
(Address of principal executive offices)		(Zip Code)

~~Registrant’s telephone number, including area code:~~ ~~(414) 905-1000~~

Large accelerated filer ¨		Accelerated filer x
Non-accelerated filer ¨
(Do not check if a smaller reporting company)		Smaller reporting company ¨
		Emerging growth company ¨

(in thousands, except share and per share data)	September 29, 2016		December 31, 2015

ASSETS
Current assets:
Cash and cash equivalents	$	5,870	$	6,672
Restricted cash		5,540		18,019
Accounts and notes receivable, net of reserves of $188 and $259, respectively		15,456		13,366
Refundable income taxes		3,878		─
Deferred income taxes		2,508		2,807
Other current assets		8,082		7,041
Total current assets		41,334		47,905

Property and equipment:
Land and improvements		111,674		104,379
Buildings and improvements		640,343		618,004
Leasehold improvements		78,812		78,855
Furniture, fixtures and equipment		294,477		285,578
Construction in progress		20,849		10,363
Total property and equipment		1,146,155		1,097,179
Less accumulated depreciation and amortization		454,466		426,477
Net property and equipment		691,689		670,702

Other assets:
Investments in joint ventures		6,311		7,455
Goodwill		43,769		44,220
Other		33,615		37,226
Total other assets		83,695		88,901

TOTAL ASSETS	$	816,718	$	807,508

(in thousands, except share and per share data)	September 29, 2016			December 31, 2015

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	20,215		$	28,737
Income taxes		─			3,490
Taxes other than income taxes		14,621			17,303
Accrued compensation		15,416			12,269
Other accrued liabilities		34,528			43,231
Current portion of capital lease obligation		5,452			5,181
Current maturities of long-term debt		36,314			18,292
Total current liabilities		126,546			128,503

Capital lease obligation		11,103			15,192

Long-term debt		196,587			207,376

Deferred income taxes		52,373			46,212

Deferred compensation and other		45,041			44,527

Equity:
Shareholders’ equity attributable to The Marcus Corporation
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued		─			─
Common Stock, $1 par; authorized 50,000,000 shares; issued 22,489,973 shares at September 29, 2016 and 22,478,541 shares at December 31, 2015		22,490			22,479
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 8,699,540 shares at September 29, 2016 and 8,710,972 shares at December 31, 2015		8,700			8,711
Capital in excess of par		58,101			56,474
Retained earnings		345,499			325,355
Accumulated other comprehensive loss		(5,067	)		(5,221	)
		429,723			407,798
Less cost of Common Stock in treasury (3,563,246 shares at September 29, 2016 and 3,525,657 shares at December 31, 2015)		(46,271	)		(44,446	)
Total shareholders' equity attributable to The Marcus Corporation		383,452			363,352
Noncontrolling interest		1,616			2,346
Total equity		385,068			365,698

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	816,718		$	807,508

(in thousands, except share and per share data)	September 28, 2017		December 29, 2016

ASSETS
Current assets:
Cash and cash equivalents	$	6,566	$	3,239
Restricted cash		7,904		5,466
Accounts and notes receivable, net of reserves of $170 and $204, respectively		24,269		14,761
Refundable income taxes		10,358		1,672
Other current assets		13,361		11,005
Total current assets		62,458		36,143

Property and equipment:
Land and improvements		138,464		134,306
Buildings and improvements		735,979		699,828
Leasehold improvements		86,811		80,522
Furniture, fixtures and equipment		339,984		312,334
Construction in progress		28,402		19,698
Total property and equipment		1,329,640		1,246,688
Less accumulated depreciation and amortization		491,446		457,490
Net property and equipment		838,194		789,198

Other assets:
Investments in joint ventures		4,951		6,096
Goodwill		43,527		43,735
Other		34,730		36,094
Total other assets		83,208		85,925

TOTAL ASSETS	$	983,860	$	911,266

THE MARCUS CORPORATION
(Exact name of registrant as specified in its charter)

		Page

PART I – FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:

	Consolidated Balance Sheets (September ~~29, 2016~~28, 2017 and December ~~31, 2015)~~29, 2016)	3

	Consolidated Statements of Earnings (13 and 39 weeks ended September ~~29, 2016~~28, 2017 and September ~~24, 2015)~~29, 2016)	5

	Consolidated Statements of Comprehensive Income (13 and 39 weeks ended September ~~29, 2016~~28, 2017 and September ~~24, 2015)~~29, 2016)	6

	Consolidated Statements of Cash Flows (39 weeks ended September ~~29, 2016~~28, 2017 and September ~~24, 2015)~~29, 2016)	7

	Condensed Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3233

Item 4.	Controls and Procedures	3233

PART II – OTHER INFORMATION

Item 1A.	Risk Factors	33

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3334

Item 4.	Mine Safety Disclosures	3334

Item 6.	Exhibits	3435

	Signatures	S-1

(in thousands, except per share data)	September 29, 2016						September 24, 2015
	13 Weeks			39 Weeks			13 Weeks			39 Weeks
Revenues:
Theatre admissions	$	46,859		$	137,783		$	39,125		$	127,515
Rooms		32,609			81,984			33,641			83,775
Theatre concessions		30,260			88,644			26,027			82,674
Food and beverage		17,991			50,784			18,679			51,347
Other revenues		16,976			45,922			16,422			45,068
Total revenues		144,695			405,117			133,894			390,379

Costs and expenses:
Theatre operations		39,579			118,048			35,169			111,097
Rooms		10,608			30,409			11,155			32,064
Theatre concessions		8,611			24,440			7,700			23,052
Food and beverage		14,498			41,797			14,612			42,447
Advertising and marketing		5,540			16,033			6,152			17,310
Administrative		15,702			45,638			14,011			42,824
Depreciation and amortization		10,474			31,025			10,342			29,931
Rent		2,051			6,277			2,209			6,517
Property taxes		4,168			12,306			3,885			11,365
Other operating expenses		8,781			24,854			8,848			25,807
Impairment charge		-			-			-			2,919
Total costs and expenses		120,012			350,827			114,083			345,333

Operating income		24,683			54,290			19,811			45,046

Other income (expense):
Investment income		8			25			10			205
Interest expense		(2,127	)		(6,993	)		(2,496	)		(7,390	)
Gain (loss) on disposition of property, equipment and other assets		239			(478	)		183			(564	)
Equity earnings (losses) from unconsolidated joint ventures, net		161			270			2			(121	)
		(1,719	)		(7,176	)		(2,301	)		(7,870	)

Earnings before income taxes		22,964			47,114			17,510			37,176
Income taxes		8,712			18,236			6,798			14,504
Net earnings		14,252			28,878			10,712			22,672
Net loss attributable to noncontrolling interests		(120	)		(282	)		(159	)		(453	)
Net earnings attributable to The Marcus Corporation	$	14,372		$	29,160		$	10,871		$	23,125

Net earnings per share – basic:
Common Stock	$	0.54		$	1.09		$	0.41		$	0.87
Class B Common Stock	$	0.49		$	0.99		$	0.37		$	0.78

Net earnings per share – diluted:
Common Stock	$	0.51		$	1.05		$	0.39		$	0.83
Class B Common Stock	$	0.48		$	0.98		$	0.37		$	0.78

Dividends per share:
Common Stock	$	0.113		$	0.338		$	0.105		$	0.305
Class B Common Stock	$	0.102		$	0.307		$	0.095		$	0.277

(in thousands, except per share data)	September 28, 2017						September 29, 2016
	13 Weeks			39 Weeks			13 Weeks			39 Weeks
Revenues:
Theatre admissions	$	50,246		$	166,222		$	46,859		$	137,783
Rooms		32,785			82,844			32,609			81,984
Theatre concessions		33,290			109,365			30,260			88,644
Food and beverage		18,670			52,487			17,991			50,784
Other revenues		18,827			53,629			16,976			45,922
Total revenues		153,818			464,547			144,695			405,117

Costs and expenses:
Theatre operations		44,403			145,844			39,579			118,048
Rooms		10,658			30,117			10,608			30,409
Theatre concessions		9,567			30,666			8,611			24,440
Food and beverage		15,125			44,093			14,498			41,797
Advertising and marketing		6,296			17,880			5,540			16,033
Administrative		16,876			51,654			15,702			45,638
Depreciation and amortization		12,993			37,544			10,474			31,025
Rent		3,113			9,718			2,051			6,277
Property taxes		5,052			14,575			4,168			12,306
Other operating expenses		8,300			24,255			8,781			24,854
Total costs and expenses		132,383			406,346			120,012			350,827

Operating income		21,435			58,201			24,683			54,290

Other income (expense):
Investment income		119			229			8			25
Interest expense		(3,367	)		(9,454	)		(2,127	)		(6,993	)
Gain (loss) on disposition of property, equipment and other assets		(449	)		(420	)		239			(478	)
Equity earnings (losses) from unconsolidated joint ventures, net		(12	)		75			161			270
		(3,709	)		(9,570	)		(1,719	)		(7,176	)

Earnings before income taxes		17,726			48,631			22,964			47,114
Income taxes		6,908			18,571			8,712			18,236
Net earnings		10,818			30,060			14,252			28,878
Net loss attributable to noncontrolling interests		(160	)		(495	)		(120	)		(282	)
Net earnings attributable to The Marcus Corporation	$	10,978		$	30,555		$	14,372		$	29,160

Net earnings per share – basic:
Common Stock	$	0.41		$	1.14		$	0.54		$	1.09
Class B Common Stock	$	0.36		$	1.02		$	0.49		$	0.99

Net earnings per share – diluted:
Common Stock	$	0.39		$	1.08		$	0.51		$	1.05
Class B Common Stock	$	0.37		$	1.01		$	0.48		$	0.98

Dividends per share:
Common Stock	$	0.125		$	0.375		$	0.113		$	0.338
Class B Common Stock	$	0.114		$	0.341		$	0.102		$	0.307

	39 Weeks Ended						39 Weeks Ended
(in thousands)	September 29, 2016			September 24, 2015			September 28, 2017			September 29, 2016

OPERATING ACTIVITIES:
Net earnings	$	28,878		$	22,672		$	30,060		$	28,878
Adjustments to reconcile net earnings to net cash provided by operating activities:
Losses (earnings) on investments in joint ventures		(270	)		121
Earnings on investments in joint ventures								(75	)		(270	)
Distributions from joint ventures		414			93			351			414
Loss on disposition of property, equipment and other assets		478			564			420			478
Impairment charge		─			2,919
Amortization of favorable lease right		250			250			250			250
Depreciation and amortization		31,025			29,931			37,544			31,025
Amortization of debt issuance fees		226			329
Stock compensation expense		1,358			1,171
Amortization of debt issuance costs								209			226
Shared-based compensation								1,867			1,358
Deferred income taxes		6,461			5,527			4,231			6,461
Deferred compensation and other		526			613			1,682			526
Contribution of the Company’s stock to savings and profit-sharing plan		905			888			1,024			905
Changes in operating assets and liabilities:
Accounts and notes receivable		(2,090	)		(8,354	)		(7,896	)		(2,090	)
Other current assets		(1,041	)		(714	)		(2,220	)		(1,041	)
Accounts payable		(6,592	)		(9,994	)		1			(6,592	)
Income taxes		(7,329	)		3,004			(8,686	)		(7,329	)
Taxes other than income taxes		(2,682	)		(2,101	)		286			(2,682	)
Accrued compensation		3,147			(1,756	)		(1,036	)		3,147
Other accrued liabilities		(8,823	)		(3,997	)		(7,076	)		(8,823	)
Total adjustments		15,963			18,494			20,876			15,963
Net cash provided by operating activities		44,841			41,166			50,936			44,841

INVESTING ACTIVITIES:
Capital expenditures		(58,084	)		(59,076	)		(87,265	)		(58,084	)
Proceeds from disposals of property, equipment and other assets		594			1,293			4,558			594
Decrease in restricted cash		12,479			143
Decrease (increase) in restricted cash								(2,438	)		12,479
Decrease in other assets		3,686			846			584			3,686
Purchase of interest in joint venture		─			(1,600	)
Sale of interest in joint venture		1,000			─			—			1,000
Net cash used in investing activities		(40,325	)		(58,394	)		(84,561	)		(40,325	)

FINANCING ACTIVITIES:
Debt transactions:
Proceeds from borrowings on revolving credit facilities		250,188			167,000			254,000			250,188
Repayment of borrowings on revolving credit facilities		(191,188	)		(150,000	)		(236,500	)		(191,188	)
Principal payments on debt		(51,863	)		(6,323	)
Debt issuance fees		(491	)		─
Proceeds from borrowings on long-term debt								65,000			—
Principal payments on long-term debt								(35,894	)		(51,863	)
Debt issuance costs								(370	)		(491	)
Repayments of capital lease obligations								(782	)		—
Equity transactions:
Treasury stock transactions, except for stock options		(6,053	)		(871	)		(463	)		(6,053	)
Exercise of stock options		3,553			2,158			2,083			3,553
Dividends paid		(9,016	)		(8,152	)		(10,122	)		(9,016	)
Distributions to noncontrolling interest		(448	)		(505	)		—			(448	)
Net cash provided by (used in) financing activities		(5,318	)		3,307			36,952			(5,318	)

Net decrease in cash and cash equivalents		(802	)		(13,921	)
Net increase (decrease) in cash and cash equivalents								3,327			(802	)
Cash and cash equivalents at beginning of period		6,672			18,684			3,239			6,672
Cash and cash equivalents at end of period	$	5,870		$	4,763		$	6,566		$	5,870

Supplemental Information:
Interest paid, net of amounts capitalized	$	6,772		$	6,698		$	9,354		$	6,772
Income taxes paid		19,107			12,846			23,025			19,107
Change in accounts payable for additions to property and equipment		(1,930	)		(494	)		8,942			(1,930	)

	Third Quarter⁽¹⁾											First Three Quarters⁽¹⁾											Third Quarter⁽¹⁾												First Three Quarters⁽¹⁾
							Variance											Variance											Variance												Variance
	F2016			F2015C			Amt.		Pct.			F2016			F2015C			Amt.		Pct.			F2017			F2016			Amt.			Pct.			F2017			F2016			Amt.			Pct.
Occupancy pct.		82.1	%		82.1	%		- pts		-	%		75.8	%		74.4	%		1.4 pts		1.9	%		82.0	%		82.1	%		-0.1	pts		-0.1	%		76.2	%		75.8	%		0.4	pts		0.5	%
ADR	$	165.05		$	160.79		$	4.26		2.6	%	$	149.80		$	145.84		$	3.96		2.7	%	$	164.47		$	165.05		$	(0.58	)		-0.4	%	$	149.75		$	149.80		$	(0.05	)		-	%
RevPAR	$	135.45		$	131.92		$	3.53		2.7	%	$	113.53		$	108.55		$	4.98		4.6	%	$	134.85		$	135.45		$	(0.60	)		-0.4	%	$	114.05		$	113.53		$	0.52			0.5	%

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (1)
July 1 – July 28		15,466	$	21.95		15,466		2,925,925
July 29 – August 25		984		22.55		984		2,924,941
August 26 – September 29		23,954		24.84		23,954		2,900,987
Total		40,404	$	23.68		40,404		2,900,987

31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350.

101	The following materials from The Marcus Corporation’s Quarterly Report on Form 10-Q for the quarter ended September ~~29, 2016~~28, 2017 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) the Condensed Notes to Consolidated Financial Statements.

DATE: November ~~8, 2016~~7, 2017	By:	~~/s/~~/s/ Gregory S. Marcus
		Gregory S. Marcus
		President and Chief Executive Officer

DATE: November ~~8, 2016~~7, 2017	By:	~~/s/~~/s/ Douglas A. Neis
		Douglas A. Neis
		Chief Financial Officer and Treasurer