Strategic Plans Theatre acquisitions Signature cocktail and dining concepts In addition, we offer a $6 “Young-at-Heart” program for seniors on Friday afternoons that was also introduced to our Movie Tavern locations during our fiscal 2019 first quarter. 2019. 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, factors over which we have no control. admission revenues. website or app. MidAmerica winner. The Grand Skirvin Hilton . The Lincoln Marriott Cornhusker Hotel USA Today 10 Best Readers’ Choice Awards. rooftop pool. We ceased management of this hotel effective February 28, 2022. second consecutive year. We manage the The hotel currently holds the TripAdvisor® Travelers’ Choice distinction and is ranked the #1 hotel in Omaha by both TripAdvisor® and a top finalist for Best of Omaha. Marriott International recognized this property as Hotel of the Year, Classic Premium for the 2019 year. In rooms to accommodate many types of events. the Grand Geneva Resort & Spa branded as the Holiday Inn Club Vacations at Lake Geneva Resort. The development includes 68 two-room timeshare units (136 rooms) and a timeshare sales center. transforms communities. 2022. As of the end of fiscal before December 31, 2022. inability to continue to negotiate favorable terms with our landlords in respect of those properties we lease; entertainment. A obtain such films. comparable lodging facilities may adversely affect our financial results. In each of our businesses we experience intense competition from national, regional and local chain and franchise operations, some of which have substantially greater financial and marketing resources than we have. Most of our facilities are located in close proximity to other facilities which compete directly with ours. The motion picture exhibition industry is fragmented and highly competitive with no significant barriers to entry. Theatres operated by national and regional circuits and by small independent exhibitors compete with our theatres, particularly with respect to film licensing, attracting patrons and developing new theatre sites. Moviegoers are generally not brand conscious and performance of our strategic initiatives and acquisitions. growth objectives. our growth objectives. manage risk. the unavailability of the product for a period of time. substantial government regulation, which could entail significant cost. stock price. Our owned, leased and managed properties are summarized, as of December In August 2018, Mr. Neis was promoted to Executive Vice President, Chief Financial Officer and Treasurer. In October 2021, concurrently with the appointment of Chad Paris as Corporate Controller and Treasurer, Mr. Neis assumed the role of Executive Vice President and Chief Financial Officer. Mr. Neis will retire from our company effective May 15, 2022 and Mr. Paris will become Chief Financial Officer and Treasurer effective the same date. The new composite peer group index is comprised of the Dow Jones U.S. Hotels Index (weighted 35%) and a theatre index that we selected that includes Cinemark Holdings, Inc. (weighted 65%). We believe that the revised composite peer group index represents an improved group of companies for making head-to-head performance comparisons in a competitive operating environment, and removes certain volatile trading dynamics unique to AMC Entertainment Holdings, Inc. that we believe are not reflective of other peers in our industries. 30, 2021 (b)Market Information Operating Results Financial Position Results of Operations . 2020. Fiscal last eight-plus years. These investments have included: Our PLF screens generally have higher per-screen revenues and draw customers from a larger geographic region compared to our standard screens, and we charge a premium price to our guests for this experience. Change TP v. PY 2020 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 Hotels and Resorts 2020 The following table sets forth certain operating statistics, including our average occupancy percentage (number of occupied rooms as a percentage of available rooms), our average daily room rate Saint Kate): properties across the country. Theatres section above. Our hotels and resorts division our 86-year history, and, despite the COVID-19 pandemic, our financial position remains strong. As of December 30, 2021, we had a cash balance of approximately $17.7 million, $221.4 million of availability under our $225.0 million revolving credit facility, and our debt-to-capitalization ratio (including short-term borrowings) was 0.37. With our strong liquidity position, combined with the expected receipt of additional state grants, income tax refunds and proceeds from the sale of surplus real estate (discussed above), we believe we are positioned to meet our obligations as they come due and continue to sustain our operations for one year from the date of this report, as well as our longer-term capital requirements for periods beyond one year from the date of this report, even if our properties continue to generate reduced revenues during these periods. We will continue to work to preserve cash and maintain strong liquidity to endure the impacts of the global pandemic, even if it continues for a prolonged period of time. Agreement is suspended (the “specified period”); and (B) in respect of term loans, the specified margin is 2.75% for LIBOR borrowings and 1.75% for ABR borrowings, in each case, at all times. our 4.02% Senior Notes due August 14, 2025 (the “4.02% Notes”) in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). We used the net proceeds from the issuance and sale of the 4.02% Notes to reduce existing borrowings under our revolving credit facility and for general corporate purposes. On December 21, 2016, we entered into a Note Purchase Agreement (the The 2020 during fiscal 2021. 2020. Net cash used in financing activities during fiscal 2021 totaled $47.2 million, compared to net cash provided by financing activities during fiscal 2020. deem appropriate. Future Uses of Cash accompanying interest rate. approximately $0.2 million taking our outstanding swap agreement into consideration. materially impact our fiscal 2022 earnings. On an on-going basis, we evaluate our estimates associated with critical accounting policies. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The information required by this item is set forth in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Quantitative and Qualitative Disclosures About Market Risk” above. 3, 2022 (LOSS) (LOSS) Retained Wisconsin. Nebraska. the entities. Use of Estimates - The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Company's captive insurance entity that are designated to pay expenses related specifically to the captive. 4 and Note 7. Accounts Acquisition - was required. Substantially all of the Company’s goodwill relates to the theatre reporting unit. Contracts with Customers Income Taxes - The Company recognizes deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Deferred tax assets represent items to be used as a tax deduction or credit in the future tax returns for which the Company has already properly recorded the tax benefit in the income statement. The Company regularly assesses the probability that the deferred tax asset balance will be recovered against future taxable income, taking into account such factors as earnings history, carryback and carryforward periods, and tax strategies. When the indications are that recovery is not probable, a valuation allowance is established against the deferred tax asset, increasing income tax expense in the year that conclusion is made. 1. Description of Business and Summary of Significant Accounting Policies (continued) Accumulated Other Comprehensive Loss – Accumulated other comprehensive loss presented in the accompanying consolidated balance sheets consists of the following, all presented net of tax: 1. Description of Business and Summary of Significant Accounting Policies (continued) balance sheet on January 1, 2021 as follows: when a replacement rate is chosen. the Company’s right to invoice as the amount invoiced corresponds directly to the value transferred to the customer. Other revenues also include family entertainment center revenues and revenues from Hotels/Resorts outlets such as spa, ski, golf and parking, each of which are recognized at the time of sale. In a discount rate (17%). Short-Term Borrowings 2020 until the last day of the first fiscal quarter ending after the Collateral Release Date (as defined in the Note Amendments), the Company is required to pay a fee to each Note holder equal to 0.975% of the aggregate principal amount of Notes held by such holder and is payable quarterly (0.24375% of the aggregate principal amount of the Notes per quarter). Scheduled annual principal payments on long-term debt, net of amortization of debt issuance costs, for the years subsequent to December 30, 2021, are as follows: 2019: A summary of the Company’s stock option activity and related information follows: Retirement savings plan expense was $1,696, $1,718 and $2,311 for fiscal 2021, fiscal 2020 and fiscal 2019, respectively. per share data) The status of the Company’s unfunded nonqualified, defined-benefit and account-based retirement plan based on the respective December December 28, 2017 was as follows: be realized. per share data) Net income taxes refunded in fiscal 2021 and fiscal 2020 included $7,800 and $31,500, respectively, related to net operating loss carrybacks to prior years, as allowed under the provisions of the CARES Act. 31 Weeks Ended December 28, 2017 December 29, 2016 30, 2021. 2019: Based on their evaluations, as of the end of the period covered by this Annual Report on Form 10-K, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) 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 furnish under the Exchange Act is accumulated and communicated to our management and recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms. 1,629,000 1,152,000 *This exhibit is a management contract or compensatory plan, contract or arrangement in which a director or named executive officer of the Company participated.Page (2)(4) the effects of adverse economic conditions in our markets, particularly with respectincluding but not limited to, those caused by the COVID-19 pandemic; (5) the effects of adverse economic conditions, including but not limited to, those caused by the COVID-19 pandemic, on our hotelsability to obtain financing on reasonable and resorts division; (3)acceptable terms, if at all; (6) the effects on our occupancy and room rates ofcaused by the COVID-19 pandemic and the effects on our occupancy and room rates caused by the relative industry supply of available rooms at comparable lodging facilities in our markets; (4)(7) the effects of competitive conditions in our markets; (5)(8) our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; (6)(9) 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)business; (10) the effects of changes in the availability of and cost of labor and other supplies essential to the operation of our business; (11) the effects of weather conditions, particularly during the winter in the Midwest and in our other markets; (8)(12) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; (9)(13) 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;theatres or epidemics (such as the COVID-19 pandemic); and (10)(14) a disruption in our business and reputational and economic risks associated with civil securities claims brought by shareholders. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, including developments related to the COVID-19 pandemic, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. Our forward-looking statements are based upon our assumptions, which are based upon currently available information, including assumptions about our ability to manage difficulties associated with or related to the COVID-19 pandemic; the assumption that our theatre closures, hotel closures and restaurant closures are not expected to be permanent or to re-occur; the continued availability of our workforce; and the temporary and long-term effects of the COVID-19 pandemic on our business. 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-K and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.Item 1.Business.28, 2017,30, 2021, our theatre operations included 6985 movie theatres with 8951,064 screens throughout Wisconsin,17 states (Wisconsin, Illinois, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Arkansas, Colorado, Georgia, Kentucky, Louisiana, New York, Pennsylvania, Texas and Ohio, including two movie theatres with 11 screens in Wisconsin and Nebraska owned by third parties and managed by us.Virginia). We also operate a family entertainment center,Funset Boulevard,, that is adjacent to one of our theatres in Appleton, Wisconsin, and own theRonnie’s Plaza retail outlet in St. Louis, Missouri, an 84,000 square foot retail center featuring 21 shops and other businesses to which we lease retail space.Wisconsin. As of the date of this Annual Report, we are the 4th largest theatre circuit in the United States.28, 2017,30, 2021, our hotels and resorts operations included eight wholly-owned or majority-owned and operated hotels and resorts in Wisconsin, Illinois, Nebraska and Oklahoma. We also managed 1011 hotels, resorts and other properties for third parties in Wisconsin, California, Minnesota, Nevada, North CarolinaNebraska, Illinois, Iowa, Pennsylvania and Texas. As of December 28, 2017,30, 2021, we owned or managed approximately 4,8415,400 hotel and resort rooms.and for our Transition Period ended December 31, 2015, please see our Consolidated Financial Statementsconsolidated financial statements and the accompanying Note 1214 in Part II below.2Fiscal YearIn October 2015, we elected to change our fiscal year from the last Thursday in May to the last Thursday in December. As a result, on March 15, 2016, we filed a Transition Report on Form 10-K for the transition period beginning on May 29, 2015 and ended December 31, 2015, which we refer to in this Annual Report as the “Transition Period.” We refer in this Annual Report to the period beginning on December 30, 2016 and ended December 28, 2017 as “fiscal 2017.” We refer in this Annual Report to the period beginning on January 1, 2016 and ended December 29, 2016 as “fiscal 2016.” We refer in this Annual Report to the period beginning on May 30, 2014 and ended on May 28, 2015 as “fiscal 2015,” and the period beginning on May 31, 2013 and ended on May 29, 2014 as “fiscal 2014.” In this Annual Report, we compare (1) audited financial results for fiscal 2017 and fiscal 2016; (2) financial results for fiscal 2016, which are audited, with the financial results for the 53-week period ended December 31, 2015, which are unaudited; (3) financial results for the Transition Period, which are audited, with financial results for the 30-week period ended December 25, 2014, which are unaudited; and (4) as applicable, audited financial results for fiscal 2015 and fiscal 2014.2017,2021, we owned or operated 6985 movie theatre locations with a total of 8951,064 screens in Wisconsin, Illinois, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Arkansas, Colorado, Georgia, Kentucky, Louisiana, New York, Pennsylvania, Texas and Ohio.Virginia. We averaged 13.012.5 screens per location at the end of fiscal 2017,2021, compared to 13.012.3 screens per location at the end of fiscal 2016, 12.6 screens per location at the end of the Transition Period,2020 and 12.412.2 screens per location at the end of fiscal 2015. Included in the fiscal 2017, fiscal 2016, Transition Period and fiscal 2015 totals are two theatres with 11 screens that we manage for other owners.2019. Our 6785 company-owned facilities include 4750 megaplex theatres (12 or more screens), representing approximately 80%70% of our total screens, 1934 multiplex theatres (two to 11 screens) and one single-screen theatre. At the end of fiscal 2017, we operated 866 first-run screens, 11 of which we operated under management contracts, and 29 budget-oriented screens.over $275approximately $379 million, excluding acquisitions, to further enhance the movie-going experience and amenities in new and existing theatres over the last four and one-half calendar years, with more investments planned for fiscal 2018.eight-plus years. These investments include:Late in our fiscal 2015 fourth quarter, we opened a theatre in Sun Prairie, Wisconsin, the Marcus Palace Cinema. Replacing an existing nearby theatre in Madison, Wisconsin, this new 12-screen theatre has exceeded our expectations, and we opened two additional screens at this location during the fourth quarter of fiscal 2016. In April 2017,October 2019, we opened our new 10-screen Southbridge Crossing Cinemaeight-screen Movie Tavern® by Marcus theatre in Shakopee, Minnesota. This state-of-the-art theatre includes DreamLoungerSM recliner seating in every auditorium, twoUltraScreen DLX® auditoriums, aZaffiro’s®Express and aTake FiveSMLounge. On June 30, 2017, we opened our first stand-alone all in-theatre dining location, branded BistroPlexSM, in Greendale,Brookfield, Wisconsin. This new theatre featuresbecame the first Movie Tavern by Marcus in Wisconsin. It includes eight in-theatre dining auditoriums, each with laser projection and comfortable DreamLounger recliners, including twoSuperScreen DLX® auditoriums, plusSM recliner seating, a separate full-serviceTake Five Lounge. We have announced plans to further expand this concept, including bar and food and drink center, and a new location in Brookfield, Wisconsin. Construction is expecteddelivery-to-seat service model that also allows guests to begin on this new location in 2018. In addition, we are looking fororder food and beverage via our mobile phone application or in-theatre kiosk. We will consider additional sites for potential new theatre locations in both new and existing markets. 3We believeIn addition to building new theatres, acquisitions of existing theatres or theatre circuits ishas also been a viable growth strategy for us. In April 2016, we purchased a closed 16-screen 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 added DreamLounger recliner seating to all auditoriums, added oneUltraScreen DLX auditorium and twoSuperScreen DLX auditoriums, as well as aTake Five Lounge andReel Sizzle® outlet. In December 2016,On February 1, 2019, we acquired the assets of Wehrenberg Theatres® (which we refer to as Wehrenberg or Marcus Wehrenberg)Movie Tavern®, a family-ownedNew Orleans-based industry leading circuit known for its in-theatre dining concept featuring chef-driven menus, premium quality food and operated theatredrink and luxury seating. Now branded Movie Tavern by Marcus, the acquired circuit based in St. Louis, Missouri with 197consisted of 208 screens at 1422 locations in Missouri, Iowa, Illinoisnine states – Arkansas, Colorado, Georgia, Kentucky, Louisiana, New York, Pennsylvania, Texas and Minnesota. ThisVirginia. The purchase price consisted of $30 million in cash, subject to certain adjustments, and 2,450,000 shares of our common stock, for a total purchase price of approximately $139.3 million, based upon our closing share price on January 31, 2019. The acquisition of the Movie Tavern circuit increased our total number of screens by 29%an additional 23%.approximatelyan estimated 800 smaller operators, making it very difficult to predict when acquisition opportunities may arise. We have engaged third-party assistance to actively help us seek additional acquisitions in the future. We do not believe that we are geographically constrained, and we believe that we may be able to add value to certain theatres through our various proprietary amenities and operating expertise.significantly increased attendance at each of our applicable theatres, outperforming nearby competitive theatres as well asand growing the overall market attendance in most cases. In addition toInitially, 12 of the two new22 acquired Movie Tavern theatres described above, wehad recliner seating. We added DreamLounger recliner seats to 15 morefour additional existing Movie Tavern theatres during fiscal 2017 (including six2019, as well as one Marcus Wehrenberg theatres).® theatre and one newly built Movie Tavern theatre. We completed the addition of DreamLounger recliner seats at two additional Movie Tavern locations during fiscal 2020 and added DreamLounger recliner seats to one Marcus Wehrenberg theatre in fiscal 2021. As a result, as of December 28, 2017,30, 2021, we offered all DreamLounger recliner seating in 3966 theatres, representing approximately 61%78% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres).theatres. Including our premium, large format (PLF) auditoriums with recliner seating, as of December 28, 2017,30, 2021, we offered our DreamLounger recliner seating in approximately 65%81% of our company-owned, first-run screens, (including the Marcus Wehrenberg screens), a percentage we believe to be the highest among the largest theatre chains in the nation. Currently, seven Marcus Wehrenberg theatres offer recliner seating in all of its auditoriums. We are currently completing the addition of DreamLounger recliner seats to three more theatres (including two Marcus Wehrenberg theatres)evaluating opportunities to add our DreamLounger premium seating to five to seven additional theatres during the second half of fiscal 2018, including two Marcus Wehrenberg theatres. As a result, by the end of fiscal 2018, our percentage of total company-owned, first-run screens with DreamLounger recliner seating may be more than 75%.Ultra andSuperScreen DLX® (DreamLounger eXperience) conversions.conversions. We introduced one of the first PLF presentations to the industry when we rolled out our proprietaryUltraScreen®Screen® concept in 1999. During fiscal 2014, weover 20 years ago. We later introduced ourUltraScreen DLX concept by combining our premium, large-format presentation with DreamLounger recliner seating and Dolby®Dolby® Atmos™ immersive sound to elevate the movie-going experience for our guests. During fiscal 2017,2019, we opened twoone newUltraScreen DLX auditoriums at our newan existing Marcus Wehrenberg theatre in Minnesotaand converted one existing screen into an UltraScreen DLX auditorium at a Movie Tavern by Marcus theatre. During fiscal 2019, we also converted 28 existing screens at 15 Movie Tavern by Marcus theatres and two newexisting screens at one Marcus Wehrenberg theatre to SuperScreen DLX auditoriumsand opened one new SuperScreen DLX auditorium at our new BistroPlex theatre in Wisconsin, completed conversion ofa newly built Movie Tavern by Marcus theatre. During fiscal 2020, we converted two traditionalUltraScreensexisting screens at two Movie Tavern by Marcus theatres and one existing Wehrenberg-branded PLF screen at one Marcus Wehrenberg theatre toUltra SuperScreen DLX auditoriums at existing theatres in Wisconsin and Missouri, and converted 16 additional screens toSuperScreen DLX auditoriums at ten existing theatres in six states (including 11 Marcus Wehrenberg screens). Severalauditoriums. Most of our new PLF screens in fiscal 2017 includednow include the added feature of heated DreamLounger recliner seats. As of December 28, 2017,30, 2021, we had 2831 UltraScreen DLX auditoriums, one traditionalUltraScreen auditorium, and 4385 SuperScreen DLX auditoriums (a slightly smaller screen than anUltraScreen but with the same DreamLounger seating and Dolby Atmos sound) and three IMAX® PLF screens at 66 of our theatre locations. ThreeAs of the acquired Marcus Wehrenberg theatres feature IMAX® PLF screens. We currently offerDecember 30, 2021, we offered at least one PLF screen in approximately 69%78% of our first-run, company-owned theatres (including the Marcus Wehrenberg theatres) – once again a percentage we believe to be the highest percentage among the largest theatre chains in the nation. Our PLF screens generally have higher per-screen revenues and draw customers from a larger geographic region compared to our standard screens, and we charge a premium price to our guests for this experience. We are currently evaluatingcontinue to evaluate opportunities to convert two additional existing screens at two existing theatres toUltra SuperScreen DLX andSuperScreen DLX auditoriums during fiscal 2018, in addition to two newUltraScreen DLX auditoriums planned for a third existing theatre.4iTake Five Lounge andTake Five Express– these full-service bars offer an inviting atmosphere and a chef-inspired dining menu, along with a complete selection of cocktails, locally-brewed beers and wines. We opened five newTake Five Lounge outlets in fiscal 2017, including two outlets opened at new theatres described above. In addition, two Marcus Wehrenberg theatres offer a lounge concept, one of which was converted to aTake Five Lounge during fiscal 2017. As of December 28, 2017, we offered bars at 26 theatres, representing approximately 41% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres). We are currently evaluating opportunities to add bar service to additional theatres during fiscal 2018.iZaffiro’s Express – these outlets offer lobby dining that includes appetizers, sandwiches, salads, desserts and our signatureZaffiro’sTHINCREDIBLE® handmade thin-crust pizza. In select locations without aTake Five Lounge outlet, we offer beer and wine at theZaffiro’s Express outlet. We opened four newZaffiro’s Express outlets during fiscal 2017, increasing our number of theatres with this concept to 26 as of December 28, 2017, representing approximately 41% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres). We also operate threeZaffiro’s Pizzeria and Bar full-service restaurants. We are currently evaluating opportunities to add two additionalZaffiro’s Express outlets during fiscal 2018.iReel Sizzle– our newest Americana fare like burgers and chicken sandwiches prepared on a griddle behind the counter, along with chicken tenders, crinkle cut fries, ice cream and signature shakes. As of December 28, 2017, we operated sevenReel Sizzle outlets, including two that we opened during fiscal 2017, and we are evaluating additional opportunities to addReel Sizzle outlets to existing theatres in the future.iWe also operate oneHollywood Café at an existing theatre and four of the Marcus Wehrenberg theatres offer in-lobby dining concepts, operating under names such asFred’s Drive-InorFive Star. Including these additional concepts, as of December 28, 2017, we offered one or more in-lobby dining concepts in 36 theatres, representing approximately 56% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres).iBig Screen Bistro – this concept offers full-service, in-theatre dining with a complete menu of drinks and chef-prepared salads, sandwiches, entrées and desserts. Including two Marcus Wehrenberg theatres that had proprietary in-theatre dining concepts converted toBig Screen Bistro concepts during fiscal 2017, one Marcus Wehrenberg theatre offering in-theatre dining under the nameFive Star and the eight-screen new BistroPlex theatre described above, we currently offer in-theatre dining at ten theatres in 37 total auditoriums (including one theatre and five screens managed for another owner), representing approximately 14% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres). We will continue to evaluate additional opportunities to expand our in-theatre dining concepts in the future.5We rolled out a “$5 Tuesday” promotion at every theatre in our circuit in mid-November 2013. Coupled withthat includes a free 44-ozcomplimentary-size popcorn for everyone for the first five months of the program (subsequently offered only to our loyalty program members) and an aggressive marketing campaign, our goal was to increase overall attendance by reaching mid-week value customers who may have reduced their movie-going frequency or stopped going to the movies because of price.members. We have seen our Tuesday attendance increase dramatically since the introduction of the $5 Tuesday promotion. We believe this promotion has createdincreased movie-going frequency and reached a customer who may have stopped going to the movies because of price, creating another “weekend” day for us without adversely impacting the movie-going habits of our regular weekend customers. The newly-acquired Wehrenberg theatres previously offered a discounted price on Tuesday nights, but we immediatelyWe introduced our $5 Tuesday promotion with the free popcorn for loyalty members at our Marcus Wehrenberg theatres immediately upon acquiringacquisition in December 2016 and did the theatres and havesame thing in February 2019 with our newly acquired Movie Tavern theatres. We experienced an increase in Tuesday performance at thesethe Marcus Wehrenberg theatres asand have seen a result.similar response from customers at our Movie Tavern theatres. We also offer a “$6 Student Thursday” promotion at 36all of our locations that has been well received by that particular customer segment.launched a new,offer what we believe to be a best-in-class customer loyalty program called Magical Movie RewardsSM on March 30, 2014. Designed to enhance the movie-going experience for our customers, the response to this program has exceeded our expectations.. We currently have approximately 2.64.4 million members enrolled in the program. Approximately 45%41% of all box office transactions and 40% of total transactions in our theatres during fiscal 20172021 were completed by registered members of the loyalty program. The program allows members to earn points for each dollar spent and access special offers available only to members. The rewards are redeemable at the box office, concession stand or at the many Marcus Theatres® food and beverage venues. In addition, we have partnered with Movio, a global leader in data analysis for the cinema industry, to allow more targeted communication with our loyalty members. The software provides us with insight into customer preferences, attendance habits and general demographics, which we believe will help us deliver customized communication to our members. In turn, members of this program can enjoy and plan for a more personalized movie-going experience. The program also gives us the ability to cost effectively promote non-traditional programming and special events, particularly during non-peak time periods. We believe that this will result in increased movie-going frequency, more frequent visits to the concession stand, increased loyalty to Marcus Theatres and ultimately, improved operating results. The acquired WehrenbergMovie Tavern theatres offereddid not offer a loyalty program to their customers that had approximately 200,000 members.customers. We converted these members tointroduced our Magical Movie Rewards program to these theatres during the second quarter of fiscal 2017.and added the Magical Movie Rewards loyalty program to our downloadable Marcus Theatres mobile application.application, and our marcustheatres.com website. We added food and beverage ordering capabilities to our mobile application, including our recently opened Movie Tavern location in Brookfield, Wisconsin, in fiscal 2019 and expanded this feature to all of our theatres in fiscal 2020. We have redesigned ourmarcustheatres.comwebsite and continued to install additional theatre-level technology, such as new ticketing kiosks, and digital menu boards and concession advertising monitors. Each of these enhancements is designed to improve customer interactions, both at the theatre and through mobile platforms and other electronic devices. first-run screens) has provided us with additional opportunities to obtain non-motion picture programming from other new and existing content providers, including live and pre-recorded performances of the Metropolitan Opera, as well as sports, music and other events, at many of our locations. We offer weekday and weekend alternate programming at many of our theatres across our circuit. TheThis special programming includes classic movies, live performances, comedy shows and children’s performances. We believe this type of programming is more impactful when presented on the big screen and provides an opportunity to continue to expand our audience base beyond traditional moviegoers.6Consistent with prior periods in which blockbustersBlockbusters have historically accounted for a significant portion of our total box office receipts,admission revenues – in the years before the COVID-19 pandemic, our top 15 performing films accounted for 41%48% of our fiscal 2017 box office receipts, compared to 43%2019 total admission revenues and 42% of our fiscal 2018 total admission revenues. With fewer films released during fiscal 2016. The following five fiscal 20172021 due to the pandemic, our top 15 films accounted for nearly 20%55% of our fiscal 2021 total box office and produced the greatest box office receipts for our circuit:Star Wars: The Last Jedi,Beauty and the Beast,Guardians of the Galaxy Vol. 2,It andWonder Woman.first-run screens. Computerized box offices permit all of our movie theatres to sell tickets in advance.advance and all of our theatres offer reserved seating. Our theatres are accessible to persons with disabilities and provide wireless headphones for hearing-impaired moviegoers. Other amenities at certain theatres include touch-screen, computerized, self-service ticket kiosks, which simplify advance ticket purchases. We have an agreement to allow moviegoers to buy tickets on Fandango, the largest online ticket-seller. We have enhancedticket-seller, or directly through our web site and our mobile ticketing capabilities and added the Magical Movie Rewards loyalty program to our downloadable Marcus Theatres mobile application. company-owned theatre locations. Under the terms of the agreement, Cinedigm’s subsidiary purchased the digital projection systems and licensed them to us under a long-term arrangement. The costs to deploy this new technology are being covered primarily through the payment of virtual print fees from studios to our selected implementation company, Cinedigm. Our goals from digital cinema included delivering an improved film presentation to our guests, increasing scheduling flexibility, providing a platform for additional 3D presentations as needed, as well as maximizing the opportunities for alternate programming that may be available with this technology. As of December 28, 2017,30, 2021, we had the ability to offer digital 3D presentations in 259,353, or approximately 31%34%, of our first-run screens, including the vast majority of ourUltraScreens. We have the ability to increase the number of digital 3D capable screens we offer to our guests in the future as needed, based on the number of digital 3D films anticipated to be released during future periods and our customers’ response to these 3D releases.provider, Screenvision)providers, Screenvision and National CineMedia). We also obtain ancillary revenues from corporate and group meeting sales, sponsorships, internet surcharge fees and alternate auditorium uses. We continue to pursue additional strategies to increase our ancillary revenue sources.7In connection with the Wehrenberg acquisition, we also acquired theRonnie’s Plaza retail outlet in St. Louis, Missouri, an 84,000 square foot retail center featuring 21 shops and other businesses to which we lease retail space.Pfister®Pfister® Hotelfacilities. The Pfister’s banquet and meeting rooms accommodate up to 3,000 people, and the hotel features two large ballrooms,facilities, including one of the largest ballrooms in the Milwaukee metropolitan area, with banquet seating for 900 people. A portion of The Pfister’s first-floor space is leased for retail use.area. In fiscal 2018, we will be celebrating The Pfister’s 125th anniversary. In February 2018,2021, The Pfister Hotel earned its 42nd45th consecutive AAA Four Diamond Award from the American Automobile Association, which represents every year the award has been in existence. In October 2017,Also in 2021, The Pfister was recognized for the third year in a row as a top hotel in the Midwest inCondé Nast Traveler’s Readers’ Choice Awards. The Pfister Hotel was also named amongrecognized as the top five Best Hotels in Wisconsinnumber one downtown Milwaukee hotel byU.S. News & World Report for 2017. In August 2017, TripAdvisor awarded in 2021. The Pfister currently holds the TripAdvisor® 2017 Certificate of Excellence. The PfisterTripAdvisor® Travelers’ Choice distinction and is a member of Preferred Hotels and Resorts, an organization of independent luxury hotels and resorts, and Historic Hotels of America. The Pfister has a signature restaurant named theMason Street Grill, as well as a state-of-the-art WELL Spa® + Salon. In May 2013, we completed a renovation of the 23rd floor of this historic hotel that included an exclusivePfister VIP Club Lounge and a high-tech executive boardroom. In May 2014, we completed a renovation of the 176-room modern tower of The Pfister. As part of the renovation, we introduced two new club floors with added personalized conveniences and services that include access to the newPfister VIP Club Lounge.Several aspects of Hilton’s franchise program have benefited this hotel, including Hilton’s international centralized reservation and marketing system, advertising cooperatives and frequent stay programs. The hotel has two cocktail lounges, three restaurants (including our first Miller Time® Pub & Grill), and an 870-car parking ramp. Directly connected to the Wisconsin Center convention facility by skywalk, the hotel offers more than 30,000 square feet of meeting and event spaces with state-of-the-art technologies. In February 2018,2020, the Hilton Milwaukee City Center earned its seventh consecutive AAA Four Diamond Award fromwas recognized by Meetings Today as the American Automobile Association. In August 2017, TripAdvisor awarded Hilton Milwaukee City Center the TripAdvisor® 2017 CertificateBest of Excellence. In May 2013, we renovated and introduced our firstMiller Time® Pub & Grill restaurant at this hotel.at Monona Terraceat Monona Terrace in Madison, Wisconsin. The Hilton Madison which also benefits from the aspects of Hilton’s franchise program noted above,Monona Terrace is connected by a climate-controlled skywalk to the Platinum LEEDS and GBAC certified Monona Terrace Community and Convention Center offering over 250,000 square feet of meeting space. The hotel has foursix meeting rooms totaling 2,4006,000 square feet, an indoor swimming pool and a fitness center, a loungecenter. Audrey Kitchen + Bar offers all day dining and a restaurant. In August 2017, TripAdvisor awardedthe lobby bar also offers food service daily. The Hilton Madison at Monona Terrace was awarded the TripAdvisor® 2017 CertificateTripAdvisor® Travelers’ Choice distinction in 2021. A major renovation of Excellence. In 2018, this hotel is scheduled to undergo a complete renovation,was completed in 2019, including common areas and guestrooms.8Geneva®Geneva® Resort & Spafull-facility destination resort is located on 1,300 acres and includes 355356 guest rooms, 29 studio, one, two and three bedroom villas, the exclusive Geneva Club Lounge, over 60,000 square feet of banquet, meeting and exhibit space, overincluding 13,000 square feet of ballroom space, three specialty restaurants, two cocktail lounges, two championship golf courses, a ski hill, indoor and outdoor tennis courts, three swimming pools, a spastate-of-the-art WELL Spa + Salon and fitness complex, horse stables and an on-site airport. In February 2018, the2021, Grand Geneva Resort & Spa earned its 20th24th consecutive AAA Four Diamond Award from the American Automobile Association. In October 2017, the Grand Geneva Resort & SpaThe resort was also recognized as aone of the top resortresorts in the Midwest inCondé Nast Traveler’s Readers’ Choice Awards. Geneva Grand ResortAwards, named as one of Travel & Spa was alsoLeisure’s World’s Best in the Midwest and named among the top two Best HotelsResorts in Wisconsin byU.S. News & World Reportfor 2017. In August 2017, TripAdvisor awarded The resort currently holds the Grand Geneva Resort & SpaTripAdvisor® Travelers’ Choice distinction and was named to the TripAdvisor® 2017 CertificateTripAdvisor® Award of Excellence. In May 2013, we opened an exclusiveGeneva Club Lounge as an added amenity for our guests. We opened 29 new all-season villas at the Grand Geneva Resort & Spa in May 2017.InterContinental MilwaukeeWe own and operate the InterContinental Milwaukee in Milwaukee, Wisconsin. Excellence Hall of Fame.InterContinental Milwaukee has 220 rooms, 12,000 square feet of flexible banquet and meeting space, on-site parking, a fitness center, a restaurant and a lounge and is located in the heart of Milwaukee’s theatre and financial district. In January 2018, we announced plans to convert the InterContinental Milwaukee into an independent arts hotel by mid-2019. benefits from the aspects of Hilton’s franchise program noted above and has a restaurant, lounge, fitness center, indoor swimming pool, business center and approximately 18,500 square feet of meeting space. In February 2018,2021, The Skirvin Hilton earned its 11th14th consecutive AAA Four Diamond Award from the American Automobile Association. In October 2017, The Skirvin HiltonAssociation, was recognized as a top hotel in the Midwest inCondé Nast Traveler’s Readers’ Choice Awards. In fiscal 2016 and fiscal 2017, The Skirvin Hilton earned recognition as thenamed Best Hotel in Oklahoma City byU.S. News & World Report. In August 2017, readers of The Oklahoman, Best Historic Hotel in the 200-400 rooms category by Historic Hotels of America, and named among the 2021 Top 20 Hotels in the Midwest by the Condé Nast Traveler’s Readers’ Choice Awards. The hotel currently holds the TripAdvisor awarded The Skirvin Hilton the TripAdvisor® 2017 Certificate of Excellence. In January 2017, The Skirvin Hilton was rated #1 of all full-service Hilton Hotels for delivery of brand promise. In September 2016, we completed a $4.3 million renovation project at The Skirvin Hilton hotel, which included renovations of all guestrooms and public spaces.® Travelers’ Choice distinction. Our equity interest in this hotel wasis 60% as of December 28, 2017.Formerly operated as a Four Points by Sheraton, during fiscal 2015, we initiated a major renovation and conversion of this hotel, officially opening it as what was then the fourth AC Hotel by Marriott branded property in the U.S. in June 2015. Located in the heart of Chicago’s Magnificent Mile district for shopping, dining and entertainment, district, the AC Hotel by Marriott lifestyle brand targets the millennial traveler searching for a design-led hotel in a vibrant location with high-quality service. The AC Hotel Chicago Downtown features urban, simplistic and clean designs with European aesthetics and elegance, the latest technology and communal function spaces. Amenities include the AC Lounge, a bar area with cocktails, craft beers, wine and tapas, and the AC Kitchen, serving a European-inspired breakfast menu, and the AC Library, a collaborative space with communal tables and self-service business center located just off the main lobby.menu. The AC Hotel Chicago Downtown also features an indoor swimming pool, fitness room, 3,000 square feet of meeting space and an on-site parking facility. In August 2017, TripAdvisor awarded the AC HotelOur SafeHouse® Chicago Downtown the TripAdvisor® 2017 Certificate of Excellence. Our newSafeHouse® Chicago(temporarily closed) is in space leased fromconnected to this hotel and the hotel has additional space leased and available to be leased to area restaurants.9During the majority of 2017, we were a 73% majority owner of a joint venture inIn October 2017, we purchased the noncontrolling interest in this joint venture and as a result, we are now the sole owner of this hotel. The Lincoln Marriott Cornhusker Hotel is a 300-room, full-service297 room, full service hotel with 45,600 square feet of meeting space. Thespace and a Miller Time Pub & Grill. We also own the Cornhusker Office Plaza, which is a seven-storyseven story building with a total of 85,592 square feet of net leasable office space. The office building isspace connected to the hotel by a three-storythree story atrium that is used for local events and exhibits. In September 2014, we completed a major renovationThe hotel was named #18 of the Top 20 Hotels in which we renovated the entire hotel, includingMidwest by Condé Nast Traveler’s Readers’ Choice Awards in 2021.lobby, all guestheart of Milwaukee’s theatre and entertainment district, Saint Kate– The Arts Hotel features 219 art-inspired guestrooms, 13,000 square feet of flexible meeting space, 11 event rooms and meeting space.three restaurants, as well as two bars and lounge areas. The hotel also includes a theatre with programming that features lectures, classes and musical, dance and theatrical performances, a world-class gallery space, and other event spaces that host rotating exhibitions, screenings, workshops and more. In 2021, Saint Kate – The Arts Hotel earned the AAA Four Diamond Award from the American Automobile Association. Also in 2021 Saint Kate – The Arts Hotel was recognized for the second year in a row as a part of this renovation, we opened our secondMiller Time Pub & Grill.top hotel in the Midwest in Condé Nast Traveler’s Readers’ Choice Awards. In November 2014, we were awarded the Business Leadership Award2019, Saint Kate – The Arts Hotel was named Top 10 Best New Hotels by The Downtown Lincoln Association, as part of its annual Impact Awards program for recent investment commitments to the city of Lincoln, Nebraska. In August 2017, TripAdvisor awarded The Lincoln Marriott Cornhusker Hotel the TripAdvisor® 2017 Certificate of Excellence.Crowne Plaza-Northstar HotelHyatt Regency Schaumburg in Minneapolis, Minnesota.Schaumburg, Illinois, which was renovated in 2019. Hyatt Regency Schaumburg is conveniently located approximately 15 miles from Chicago O’Hare International Airport and 30 miles from downtown Chicago and is near some of Chicagoland’s most popular attractions and energetic business hubs. The Crowne Plaza-Northstar HotelHyatt Regency Schaumburg was named among the 2021 Top 20 Hotels in the Midwest by the Condé Nast Traveler’s Readers’ Choice Awards. This 468-room hotel has more than 30,000 square feet of indoor and outdoor meeting and event space and versatile venues such as a 3,100 square foot terrace. The hotel and its event venues feature the latest audiovisual and state-of-the-art technology, innovative on-site catering and complimentary parking for guests.MinneapolisEl Paso. Our 200 well-appointed rooms are in the heart of the museum district and has 222 guest rooms, 12 meeting rooms, 10,000steps from the convention center. The hotel features a newly renovated rooftop pool terrace along with 8,500 square feet of meeting space,space. We ceased management of this hotel effective February 28, 2022.Skygarden for group events,terrace, stylish décor and a restaurant, a cocktail lounge and an exercise facility.has 255features 257 recently renovated guest rooms and suites, over 23,000 square feet of meeting and event space - including 12 suites, meeting spacea 130-seat theater, newly renovated ballroom, and an outdoor event venue ideal for up to 600, including an amphitheater and ballroom,weddings, a well-equipped fitness center, an outdoor swimming pool with two hot tubs, and lighted tennis courts.a successful on-site restaurant, The Front Yard. The mission-style hotel is located on seven acres near Universal Studios. In August 2017, TripAdvisor awardedStudios Hollywood and serves as a preferred hotel for the theme park. The Garland has held the TripAdvisor® 2017 Certificate of Excellence.TripAdvisor® Travelers’ Choice Award for seven consecutive years. In October 2017,2021, The Garland was recognized as a top hotel in Los Angeles in the Condé Nast Traveler’s Readers’ Choice Awards.We also provide hospitality management services, including check-in, housekeeping and maintenance,Awards for the seventh year in a vacation ownership development adjacent torow as well as a Top 10 Hotel in Greater Los Angeles as ranked by the Grand Geneva Resort & Spa owned by Orange Lake Resort & Country Club of Orlando, Florida. The development includes 68 two-room timeshare units (136 rooms) and a timeshare sales center.We manage2020 Hilton Garden Inn Houston NW/Chateau in Houston, Texas. The Hilton Garden Inn Houston NW/Chateau has 171 guest rooms, a ballroom, a restaurant, a fitness center, a convenience mart and a swimming pool. The hotel is a part of Chateau Court, a 13-acre, European-style mixed-use development that also includes retail space and an office village. In August 2017, TripAdvisor awarded Hilton Garden Inn Houston NW/Chateau the TripAdvisor® 2017 Certificate of Excellence.This “business class”The hotel offers 257 rooms, 9,200 square feet of meeting space, an indoor swimming pool a club level,and a fitness center,center. With a business centerfull renovation completed in 2018, this hotel has a contemporary feel and 9,217 square feet of meeting space. We completedhas been a $2 million renovation ofservice leader within the Hilton Minneapolis/Bloomingtonindustry with recent awards including AAA Best Housekeeping 2021 and TripAdvisor Travelers’ Choice in April 2016. The renovation included renovations of the lobby area and entrance, food and beverage outlets, meeting spaces and the HHonors Executive Lounge. In August 2017, TripAdvisor awarded Hilton Minneapolis/Bloomington the TripAdvisor® 2017 Certificate of Excellence.10 Heidel House Resort & Spa in Green Lake, Wisconsin. The resort features 190 full-service rooms and is located on 20 wooded acres on the shore of Green Lake, near Ripon, Wisconsin. The resort has an award-winning spa, three restaurants, two lounges, an ice cream parlor, a 380-guest ballroom, an outdoor space for weddings, indoor and outdoor pools, a beach, a boat rental area, hiking and biking trails, as well as a yacht available for daily excursions.Wisconsin Meetings magazine voted Heidel House Resort & Spa among the Best Wisconsin Conference Centers for 2017.Spas of Americaranked Evensong Spa one of the Top 100 Spas of 2017.In 2015, we became a 10% minority investor and manager of the new Omaha Marriott Downtown at The Capitol District hotel, which opened in August 2017.hotel. The 333-room, 12-story full service hotel serves as an anchor for the Capitol District, an upscale urban destination dining and entertainment community in downtown Omaha.Omaha, Nebraska. The development also includes 218 luxury residential apartments, office space, a parking garage and retail space for restaurants, shops and entertainment. It also features a plaza for events and concerts.September 2017,2021, The Omaha Marriott Downtown was awarded the prestigious Omaha Metropolitan Area Tourism Award for “Best Hotel” by Visit Omaha, as well as The Reader’s Choice for “Best Hotel.”Sheraton Chapel Hillnewly transitioned Hyatt Regency Coralville Hotel & Conference Center in Chapel Hill, North Carolina.Coralville, Iowa. The Sheraton Chapel Hill Hotel286-room hotel is the anchor for the thriving Iowa River Landing District, which is home to many local shops, restaurants and upscale residential condos as well as the Xtream Arena and Green State Fieldhouse. Iowa River Landing is located just a few miles from University of Iowa and brings in the Triangle region of North Carolina and features 168 guestrooms and suites, 16,000activity for college athletics, as well as events. The hotel’s conference center includes approximately 58,000 square feet of flexibleevent space including two ballrooms, two outdoor terraces, an exhibit hall, and breakout meeting space, an on-site restaurant, fitness center, seasonal outdoor pool and sun deck and local shuttle service.January 2018,December 2021, we assumed management of the newly-opened Murieta Inn248-room Kimpton Hotel Monaco Pittsburgh. This hotel is our first full-service hotel in Pennsylvania and Spathe first Kimpton in Rancho Murieta, California. Found within the development containing the renowned Murieta Equestrian Center, the largest equestrian facility in California, the 83-room hotel features The Gate, a one-of-a-kind restaurantHotel and bar that offers fresh, seasonal menus using ingredients from the hotel’s five-acre farm and state-of-the-art greenhouse. In addition to a remarkable “farm-to-fork” experience, guests can also enjoy wine from the burgeoning foothills’ wine country.Resorts Division’s portfolio. The hotel has an inviting resort-style pool and lavish hot tub adjacent to a private one-acre park overlooking the Cosumnes River. Guests can also relax at The Cupola, a luxury salon and day spa that will open in April 2018. The Murieta Inn and Spa also offers up to 15,000includes approximately 11,300 square feet of indoor and outdoor meeting and event space, with advanced technologies such as Fiber Speed WiFi and Staycast capabilitiesThe Commoner full-service restaurant and a dedicated coordinator assignedseasonal rooftop beer garden. We own a 10% minority equity interest in this hotel.every event. the Timber Ridge Lodge & Waterpark, an indoor/outdoor water parkwaterpark and condominium hotel complex in Lake Geneva, Wisconsin. The Timber Ridge Lodge & Waterpark is a 225-unit condominium hotel on the same campus as the Grand Geneva Resort & Spa. The Timber Ridge Lodge & Waterpark has meeting rooms totaling 3,6403,500 square feet, a general store, a restaurant-cafe,restaurant, a snack bar and lounge, a state-of-the-art fitness center and an entertainment arcade. In August 2017, TripAdvisor awarded the Timber Ridge Lodge the TripAdvisor® 2017 Certificate of Excellence.non-smokingnon-on-site restaurant, lounge, spa/salonindoor-outdoor heated pool and 14,897 square feet of meeting space, including 6,336 square feet of outdoor space. In August 2017,The hotel currently holds the TripAdvisor awarded the Platinum Hotel & Spa the TripAdvisor® 2017 Certificate of Excellence.® Travelers’ Choice distinction. We own 16 previously unsold condominium units at the Platinum Hotel & Spa.During fiscal 2017, we ceased management ofSheraton Madison Hotel in Madison, Wisconsin and sold our 15% minority equity interest in the property. During fiscal 2017, we also ceased management of The Westin® Atlanta Perimeter North in Atlanta, Georgia and sold our 11% minority interest in that property.11During fiscal 2016, we ceased management of The Hotel Zamora and Castile Restaurant in St. Pete Beach, Florida and sold all but 0.49% of our 10% minority ownership interest in the property. We have agreed to sell the remaining interest during the next several years.In June 2015, we purchased theadding another restaurant to our portfolio. Theafter purchasing it in 2015. SafeHouse is an iconic, spy-themed restaurant and bar that has operated in Milwaukee for 50over 55 years. We completed a significant renovation of theSafeHouse in 2016. We opened a newSafeHouse location in Chicago, Illinois in March 2017 and also opened theEscapeHouse Chicago, a complimentary business capitalizing on the popularity of cooperative team escape games.In December 2016, we announced that our completed a $2.3 million expansion. WHLS provides commercial laundry services for our hotel and resort properties in Wisconsin and for other unaffiliated hotels in the Midwest. WHLS currently processes over 10processed nearly 16 million pounds of linen each year andprior to the expansion is expected to enable WHLS to double its current capacity within the next five years.COVID-19 pandemic. WHLS has been a leader in commercial laundry services for the hospitality industry in the Midwest for over 20 years.In October 2015, we completed the sale of the Hotel Phillips, a 217-room historic, landmark hotel in Kansas City, Missouri, which we had previously successfully owned and operated for 14 years.In 2017, TripAdvisor® awarded ten of ourits Certificatewithin our hotel portfolio that have earned distinctions such as the TripAdvisor® Travelers’ Choice and the Wine Spectator Award of Excellence. These included: the Blu Bar & Lounge, Café at the Pfister, Geneva ChopHouse®, Kil@wat, Mason Street Grill, Miller Time Pub & Grill Lincoln, Milwaukee ChopHouse®, Ristoranté Brissago, Bloomington ChopHouse®, SafeHouse Milwaukee and SAVOR bar & kitchen.2017,2019, we were awardedone of ten nationwide recipients of the Service Excellence Award by Governor Scott Walker at the Wisconsin Governor’s Conference on Tourism, which took place March 12-14, 2017 in Milwaukee, Wisconsin. The Service Excellence Award honors a Wisconsin business that has achieved significant success and growth by providing exceptional service to its customers and a strong, charitable involvement in its community. Marcus Hotels & Resorts received the award for its ongoing commitment to supporting Wisconsin charities and tourism-driven amenities. Last year, associates of The Marcus Corporation and Marcus Hotels & Resorts volunteered more than 28,000 hours in their local communities.We have taken our highly-regarded web development team and created a new business unit to be managed by the hotels and resorts division called Graydient Creative. Graydient leverages our expertise in digital marketing, creating a new profit centerAmericans for the division by seeking new external customers. Services provided by Graydient include, but are not limited to, website designArts’ Arts and development, brandingBusiness Partnership Award, which recognizes businesses for their exceptional involvement with the arts that enriches the workplace, enhances education and print design, and social media management.alsofacealso faced increased competition during the pandemic from a number of other movie exhibition delivery systems, such as streaming services, premium video-on-demand (PVOD), digital downloads, video-on-demand, pay-per-view television, DVDs and network and syndicated television. We also face competition from other forms of entertainment competing for the public’s leisure time and disposable income.12SeasonalityDue to our change to a December fiscal year end, we expect our quarterly results to be more consistent between quarters than they were inpast andimpact of the COVID-19 pandemic, our results for the last two years under the new calendar have met those expectations. Our first fiscal quarter will likely producetypically produces the weakest operating results in our hotels and resorts division due primarily to the effects of reduced travel during the winter months. We expect ourOur second and third fiscal quarters to often produce our strongest operating results because these periods coincide with the typicalwe expect that the specific timing of the last Thursday in December will havehas an impact on the results of our fiscal first and fourth quarters in that division, particularly when we have a 53-week year.Employees28, 2017,30, 2021, we had approximately 7,8007,500 employees, approximately 59%61% of whom were employed on a variable or part-time basis. A number of our (1) hotel employees at the Crowne Plaza Northstar in Minneapolis, Minnesota are covered by a collective bargaining agreement that expires on April 30, 2019; (2) operating engineersassociates at The Pfister Hotel and the Hilton Milwaukee City Center are covered by collective bargaining agreements that expired on February 14, 2022 and February 29, 2022 which are currently being negotiated, and collective bargaining agreements that expire on April 30, 2020May 31, 2022 and December 31, 2019, respectively; (3) hotel employees at the Hilton Milwaukee City Center and The Pfister Hotel are covered by a collective bargaining agreement that expires on February 14, 2019; and (4) painters in the Hilton Milwaukee City Center and The Pfister Hotel are covered by a collective bargaining agreement that expires on May 31, 2018.2017,2021, approximately 7%9% of our employees were covered by a collective bargaining agreement,agreements, of which approximately 1%98% were covered by an agreement that will expire within one year.13Item 1A.Risk Factors.Bothavailability of films in the Quantityshort- or long-term, including as a result of (i) major film distributors releasing scheduled films on alternative channels or (ii) disruptions of film production;Audience Appealhealth concerns or (ii) a change in consumer behavior in favor of Motion Pictures May Adversely Affect alternative forms of entertainment;Financial Results.Financial Results Mayfinancial results may be Adversely Impactedadversely impacted by Unique Factors Affectingunique factors affecting the Theatre Exhibition Industry, Suchtheatre exhibition industry, such as the Shrinking Video Release Window,shrinking video release window, the Increasing Piracyincreasing piracy of Feature Filmsfeature films and the Increasing Useincreasing use of Alternative Film Distribution Channelsalternative film distribution channels and Other Competing Formsother competing forms of Entertainment.(VOD)(“VOD”) and DVD, has decreased from approximately six months to less than four months. Many currentapproximately 45 days and in some more limited instances, films are nowhave been immediately released to ancillary markets within 75-90 days, andsuch alternative channels without any theatrical release. In the past, more than one studio has been discussingdiscussed their interest in creating a new, shorter premium VOD window. We(“PVOD”) window and in one case, an agreement was reached between a studio and several large exhibitors, including ourselves, that includes a 17-day PVOD window for certain films and a 31-day PVOD window for certain more successful films. In addition, during 2021 some studios released films theatrically and on their proprietary streaming services on the same day and date. Although other studios have not taken this approach and several have reaffirmed their commitment to an exclusive theatrical distribution window for 2022 film releases, we can provide no assurance that these release windows, which are determined by the film studios and are subject to negotiation and acceptance by exhibitors, will not shrink further, which could have an adverse impact on our movie theatre business and results of operations.downloading utilizingstreaming services. The number of streaming services has been increasing and, in some cases, streaming services are producing theatrical-quality original content that is bypassing the internet.theatrical release window entirely. Periodically, internet ticketing intermediaries introduce services and products with the stated intention of increasing movie-going frequency. The actual impact these services and products may have on our relationship with the customer and our results of operations is unknown at this time. We also compete with other forms of entertainment competing for our patrons’ leisure time and disposable income such as concerts, amusement parks, sporting events, home entertainment systems, video games and portable entertainment devices such as MP3 players,including tablet computers and smart phones. An increase in popularity of these alternative film distribution channels and competing forms of entertainment may have an adverse effect on our movie theatre business and results of operations.14Deteriorationdeterioration in Relationshipsrelationships with Film Distributors Could Adversely Affect Our Abilityfilm distributors could adversely affect our ability to Obtain Commercially Successful Filmsobtain commercially successful films or Increase Our Costsincrease our costs to Obtain Such Films.Relative Industry Supplyrelative industry supply of Available Roomsavailable rooms at Comparable Lodging Facilities May Adversely Affect Our Financial Results.Adverse Economic Conditions in Our Markets May Adversely Affect Our Financial Results.Downturns or adverse economic conditions affecting the United States economy generally, and particularly downturns or adverse economic conditions in the Midwest and in our other markets, adversely affect our results of operations, particularly with respect to our hotels and resorts division. Poor economic conditions can significantly adversely affect the business and group travel customers, which are the largest customer segments for our hotels and resorts division. Specific economic conditions that may directly impact travel, including financial instability of air carriers and increases in gas and other fuel prices, may adversely affect our results of operations. Additionally, although our theatre business has historically performed well during economic downturns as consumers seek less expensive forms of out-of-home entertainment, a significant reduction in consumer confidence or disposable income in general may temporarily affect the demand for motion pictures or severely impact the motion picture production industry, which, in turn, may adversely affect our results of operations.If the Amount of Sales Made Through Third-Party Internet Travel Intermediaries Increases Significantly, Consumer Loyalty to Our Hotels Could Decrease and Our Revenues Could Fall.We expect to derive mostfrom traditional channels of distribution. However, consumers now use internet travel intermediaries regularly. Some of these intermediaries are attempting to increase the importance of pricesegments and general indicators of quality (such as “four-star downtown hotel”) at the expense of brand/hotel identification. These agencies hope that consumers will eventually develop brand loyalties to their reservation system rather than to our hotels. If the amount of sales made through internet travel intermediaries increases significantly and consumers develop stronger loyalties to these intermediaries rather than to our hotels, we mayproperties experience an adverse effect on our hotels and resorts business and results of operations.15Each of Our Business Segments and Properties Experience Ongoing Intense Competition.usuallyoften choose a theatre based on its location, its selection of films and its amenities. With respect to our hotels and resorts division, our ability to remain competitive and to attract and retain business and leisure travelers depends on our success in distinguishing the quality, value and efficiency of our lodging products and services from those offered by others. If we are unable to compete successfully in either of our divisions, this could adversely affect our results of operations.May Not Achieverely on a limited number of suppliers for certain products, supplies and services. Shortages, delays, or interruptions in the Expected Benefitsavailability of food and Performancebeverage items and other supplies to our theatres and restaurants may be caused by adverse weather conditions; natural disasters; governmental regulation; recalls; commodity availability; seasonality; public health crises or pandemics; labor issues or other operational disruptions; the inability of our suppliers to manage adverse business conditions, obtain credit or remain solvent; or other conditions beyond our control. Such shortages, delays or interruptions could adversely affect the availability, quality, and cost of the items we buy and the operations of our business. Supply chain risk could increase our costs and limit the availability of products that are critical to our operations.InitiativesRisksAcquisitions.into.into, including our acquisition of the Movie Tavern business. Although we have a history of successfully integrating acquisitions into our existing theatre and hotels and resorts businesses, any acquisition may involve operating risks, such as (1) the difficulty of assimilating and integrating the acquired operations and personnel into our current business; (2) the potential disruption of our ongoing business; (3) the diversion of management’s attention and other resources; (4) the possible inability of management to maintain uniform standards, controls, policies and procedures; (5) the risks of entering markets in which we have little or no expertise; (6) the potential impairment of relationships with employees; (7) the possibility that any liabilities we may incur or assume may prove to be more burdensome than anticipated; and (8) the possibility the acquired property or properties do not perform as expected.Businesses are Heavily Capital Intensiveability to identify suitable properties to acquire, develop and Preopening and Start-Up Costs, Increasing Depreciation Expenses and Impairment Charges May Adversely Affect Our Financial Results.Bothmanage will directly impact our movie theatre and hotels and resorts businesses are heavily capital intensive. Purchasing properties and buildings, constructing buildings, renovating and remodeling buildings and investing in joint venture projects all require substantial upfront cash investments before these properties, facilities and joint ventures can generate sufficient revenuesability to pay for the upfront costs and positively contribute to our profitability. In addition, many growth opportunities, particularly for our hotels and resorts division, require lengthy development periods during which significant capital is committed and preopening costs and early start-up losses are incurred. We expense these preopening and start-up costs currently. As a result, our results of operations may be adversely affected by our significant levels of capital investments. Additionally, to the extent we capitalize our capital expenditures, our depreciation expenses may increase, thereby adversely affecting our results of operations.We periodically consider whether indicators of impairment of long-lived assets held for use are present. Demographic changes, economic conditions and competitive pressures may cause someachieve certain of our properties to become unprofitable. Deterioration in the performance of our properties could require us to recognize impairment losses, thereby adversely affecting our results of operations.Our Ability to Identify Suitable Properties to Acquire, Develop and Manage Will Directly Impact Our Ability to Achieve Certain of Our Growth Objectives.16Abilityability to Identify Suitable Joint Venture Partnersidentify suitable joint venture partners or Raise Equity Fundsraise investment funds to Acquire, Developacquire, develop and Manage Hotelsmanage hotels and Resorts Will Directly Impact Our Abilityresorts will directly impact our ability to Achieve Certainachieve certain of Our Growth Objectives.equityinvestments funds to acquire, develop and manage hotels and resorts. Failure to successfully identify suitable joint venture partners or raise equity for an investment fund will substantially limit our ability to achieve these important growth objectives.Adverse Economic Conditions, Including Disruptions in the Financial Markets, May Adversely Affect Our Ability to Obtain Financing on Reasonable and Acceptable Terms, if at All, and Impact Our Ability to Achieve Certain of Our Growth Objectives.We expect that we will require additional financing over time, the amount of which will depend upon a number of factors, including the number of theatres and hotels and resorts we acquire and/develop, the amount of capital required to refurbish and improve existing properties, the amount of existing indebtedness that requires repayment in a given year and the cash flow generated by our businesses. Downturns or adverse economic conditions affecting the United States economy generally, and the United States stock and credit markets specifically, may adversely impactjoint ventures decreases our ability to obtain additional short-term and long-term financing on reasonable terms or at all, which would negatively impact our liquidity and financial condition. As a result, a prolonged downturn in the stock or credit markets would also limit our ability to achieve our growth objectives.Investing Through Partnerships or Joint Ventures Decreases Our Ability to Manage Risk.Our Properties are Subject to Relating to ActsGod, Terrorist Activityfood products and War and Any Such Event May Adversely Affect Our Financial Results.Acts of God, natural disasters, war (including the potential for war), terrorist activity (including threats of terrorist activity), incidents of violence in public venues such as hotels and movie theatres, epidemics (such as SARs, bird flu and swine flu), travel-related accidents, as well as political unrest and other forms of civil strife and geopolitical uncertainty mayassociated costs could adversely affect our reputation and financial condition.lodging and movie exhibition industries and our resultsconsumption of operations. Terrorism or other similar incidents may significantly impact business and leisure travel or consumer choices regarding out-of-home entertainment options and consequently demand for hotel rooms or movie theatre attendance may suffer. In addition, inadequate preparedness, contingency planning, insurance coverage or recovery capability in relation to a major incident or crisis may prevent operational continuity and consequently impact the reputation of our businesses. 17Failure to Protect Our Information Systems and Other Confidential Information Against Cyber Attacks or Other Information Security Breaches Could Have a Material Adverse Effect on Our Business.Information security risks have generally increased in recent years becauseany of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber attacks. A failurefood products we sell in our theatres or breach of our information systemshotels causes illness or other confidential information as a result of cyber attacksinjury. We are also subject to recalls by product manufacturers or other information security breachesif food products become contaminated. Recalls could disrupt our business, result in losses due to the disclosure or misusecost of confidential or proprietary information, damage our reputation, expose usthe recall, the destruction of the product and lost sales due to litigation, increase our costs or cause losses. As cyber and other threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures or to investigate and remediate any information security vulnerabilities.Subjectsubject to Substantial Government Regulation, Which Could Entail Significant Cost.or ADA.(the “ADA”). Compliance with the ADA requires that public accommodations "reasonably accommodate"“reasonably accommodate” individuals with disabilities and that new construction or alterations made to "commercial facilities"“commercial facilities” conform to accessibility guidelines unless "structurally impracticable"“structurally impracticable” for new construction or technically infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines or an award of damages to private litigants or additional capital expenditures to remedy such noncompliance. Changes in existing laws or implementation of new laws, regulations and practices could also have a significant impact on our business. For example, a significant portion of our staff level employees are part timepart-time workers who are paid at or near the applicable minimum wage in the relevant jurisdiction. Increases in the minimum wage and implementation of reforms requiring the provision of additional benefits would increase our labor costs.Businessfuture effective tax rate could be affected by changes in the mix of earnings in jurisdictions with differing tax rates, changes in the valuation of deferred tax assets and Operations Couldliabilities, or changes in tax laws or their interpretation. In addition, the tax authorities may not agree with the determinations we have made and such disagreements could result in lengthy legal disputes and, ultimately, in the payment of additional amounts for tax, interest and penalties. If our effective tax rate were to increase, or if the ultimate determination of our taxes owed in the U.S. or any of our jurisdictions is for an amount in excess of amounts previously accrued, our operating results, cash flows and financial condition could be Negatively Affectedadversely affected.We Become Subjectwe become subject to Any Securities Litigationany securities litigation or Shareholder Activism, Which Could Cause Usshareholder activism, which could cause us to Incur Significant Expense, Hinder Executionincur significant expense, hinder execution of Investment Strategyour business strategy and Impactimpact our Stock Price.Adverse Weather Conditions, Particularly DuringWinterrisk factors described in this report, and other factors beyond our control, such as fluctuations in the Midwestvaluation of companies perceived by investors to be comparable to us and research analyst coverage about our business.Our Other Markets, May Adversely Affect Our Financial Results.Poor weather conditions adversely affectthe market price of their stock have been subject to securities class action litigation. We may become the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business. See “Risks related to our business and leisure travel plans,industry—Our business and operations could be negatively affected if we become subject to any securities litigation or shareholder activism, which directly impactscould cause us to incur significant expense, hinder execution of business strategy and impact our hotelsstock price.”resorts division. In addition, theatre attendancebylaws and of Wisconsin law could prevent a takeover that shareholders consider favorable and could also reduce the market price of our stock.given dayfailure to protect our information systems and other confidential information against cyber attacks or other information security breaches or any failure or interruption to the availability of our information systems could have a material adverse effect on our business.negatively impacted byrequired to expend additional resources toweather conditions. In particular, adverse weather during peak movie-going weekends or holiday periods may negatively affecteffect on our brands, reputation, business, financial condition and results of operations. Adverse winter weather conditions may also increase our snow removaloperations, as well as subject us to significant fines, litigation, losses, third-party damages and other maintenance costs in both of our divisions.18Our Results May be Seasonal, Resulting in Unpredictable and Varied Quarterly Results.Due to our change to a December fiscal year-end, we expect our quarterly results to be more consistent between quarters than they were in the past and our results for the last two years under the new calendar have met those expectations. Our first fiscal quarter will likely produce the weakest operating results in our hotels and resorts division due primarily to the effects of reduced travel during the winter months. We expect our second and third fiscal quarters to often produce our strongest operating results because these periods coincide with the typical summer seasonality of the movie theatre industry and the summer strength of the lodging business. Due to the fact that the week between Christmas and New Year’s Eve is historically one of the strongest weeks of the year for our theatre division, we expect that the specific timing of the last Thursday in December will have an impact on the results of our fiscal first and fourth quarters in that division, particularly when we have a 53-week year.Item 1B.Unresolved Staff Comments.Item 2.Properties.28, 2017,30, 2021, The Pfister Hotel, the Hilton Milwaukee City Center, the Hilton Madison at Monona Terrace, the Grand Geneva Resort & Spa, the InterContinental Milwaukee,Saint Kate – The Arts Hotel, The Lincoln Marriott Cornhusker Hotel, The Skirvin Hilton (majority ownership), and the majority of our theatres. We lease the remainder of our facilities. As of December 28, 2017,30, 2021, we also managed one hotel for a joint venture in which we have a minority interest and nine10 hotels, resorts and other properties and two theatres that are owned by a third parties.party. Additionally, we own properties acquired for the future constructionsurplus land and operation of new facilities.several former operating properties. All of our properties are suitably maintained and adequately utilized to cover the respective business segment served.1928, 2017,30, 2021, in the following table:Business Segment Total
Number of
Facilities in
Operation Owned(1) Leased
from
Unrelated
Parties(2) Managed
for
Related
Parties Managed
for
Unrelated
Parties(2) Theatres: Movie Theatres 69 52 15 0 2 Family Entertainment Center 1 1 0 0 0 Other Properties(3) 1 1 0 0 0 Hotels and Resorts: Hotels 15 6 1 1 7 Resorts 2 1 0 0 1 Other Properties(4) 3 0 2 0 1 Total 91 61 18 1 11 (1)Six of the movie theatres are on land leased from unrelated parties. One of the hotels is owned by a joint venture in which we are the principal equity partner (60% as of December 28, 2017).(2)The 15 theatres leased from unrelated parties have a total of 183 screens, and the two theatres managed for unrelated parties have a total of 11 screens. OneUltraScreen adjacent to an owned theatre is leased from an unrelated party.(3)Includes an 84,000 square foot retail center managed by our theatre division.(4)Includes a vacation ownership development adjacent to the Grand Geneva Resort & Spa owned by Orange Lake Resort & Country Club of Orlando, Florida for which we provide hospitality management services and twoSafeHouse restaurants located in Milwaukee, Wisconsin and Chicago, Illinois, both of which we lease from an unrelated party and which are managed by our hotels and resorts division.Business Segment Total
Number of
Facilities in
OperationManaged
for
Related
PartiesManaged
for
Unrelated
PartiesTheatres: Movie Theatres 85 48 37 — — Family Entertainment Center 1 1 — — — Hotels and Resorts: Hotels 17 6 1 1 9 Resorts 1 1 — — — 3 — 2 — 1 Total 107 56 40 1 10 20182022 (assuming we exercise all of our renewal and extension options).Item 3.Legal Proceedings.Item 4.Mine Safety Disclosures.20 OF THE COMPANYNamePositionAgeName Position Age Stephen H. Marcus Chairman of the Board 8286 Gregory S. Marcus President and Chief Executive Officer 5357 Thomas F. Kissinger Senior Executive Vice President, General Counsel and Secretary 5761 Douglas A. Neis Executive Vice President and Chief Financial Officer and Treasurer5963 Rolando B. Rodriguez Executive Vice President of The Marcus Corporation and Chairman, President and Chief Executive Officer of Marcus Theatres Corporation 5862 5660 years.21Item 5.Market for the Company’s Common Equity, Related Shareholder Matters and Issuer Repurchases of Equity Securities. and the Transition Period in our cumulative total shareholder return (stock price appreciation on a dividend reinvested basis) of our Common Shares to the cumulative total return of: (1) a composite peer group index selected by us that we have used historically (the “old” composite peer group index), (2) the composite peer group index selected by us that we intend to use going forward (the “new” composite peer group index) and (2)(3) companies included in the Russell 2000 Index. The old composite peer group index is comprised of the Dow Jones U.S. Hotels Index (weighted 40%35%) and a theatre index that we selected that includes RegalAMC Entertainment GroupHoldings, Inc. and Cinemark Holdings, Inc. (weighted 60%65%).theeach composite peer group index are weighted to approximate the relative annual revenue contributions of each of our business segments to our total annual revenues over the past several fiscal years. The shareholder returns of the companies included in the Dow Jones U.S. Hotels Index and the theatre index that we selected are weighted based on each company’s relative market capitalization as of the beginning of the presented periods.22May 31, 2012December 29, 2016 to December 28, 2017
Source: Zacks Investment Research, Inc. 5/31/12 5/30/13 5/29/14 5/28/15 12/31/15 12/29/16 12/28/17 The Marcus Corporation $ 100.00 $ 112.75 $ 144.76 $ 172.76 $ 168.58 $ 286.06 $ 250.96 Composite Peer Group Index(1) 100.00 133.92 156.39 195.28 167.29 202.85 249.55 Russell 2000 Index 100.00 132.44 153.84 171.31 156.66 190.89 219.77 
12/29/16 12/28/17 12/27/18 12/26/19 12/31/20 12/30/21 The Marcus Corporation $ 100.00 $ 87.73 $ 126.40 $ 108.96 $ 45.34 $ 60.37 Russell 2000 Index 100.00 115.13 100.24 128.12 152.94 175.87 100.00 114.28 111.19 128.47 86.11 92.52 100.00 101.02 95.51 105.38 68.10 178.48 40.0%35% for the Dow Jones U.S. Hotels Index and 60.0%65% for the Company-selected Theatre Index.23 During each quarter of fiscal 2017, we paid a dividend of $0.1250 per share on our Common Stock and $0.1136 per share on our Class B Common Stock. During each quarter of fiscal 2016, we paid a dividend of $0.1125 per share on our Common Stock and $0.10227 per share on our Class B Common Stock.The following table lists the high and low sale prices of our Common Stock for the periods indicated (NYSE trading information only).Fiscal 2017 1st
Quarter 2nd
Quarter 3rd
Quarter 4th
Quarter High $ 32.60 $ 34.90 $ 31.25 $ 29.55 Low $ 29.15 $ 30.16 $ 23.85 $ 26.10 Fiscal 2016 1st
Quarter 2nd
Quarter 3rd
Quarter 4th
Quarter High $ 19.65 $ 21.36 $ 25.30 $ 32.15 Low $ 17.44 $ 18.20 $ 20.79 $ 24.65 February 28, 2018,March 1, 2022, there were 1,2591,115 shareholders of record of our Common Stock and 4236 shareholders of record of our Class B Common Stock.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) September 29 – October 26 – – – 2,869,422 October 27 – November 30 – – – 2,869,422 December 1 – December 28 – – – 2,869,422 Total – – – 2,869,422 (1)ThroughPeriod Total Number of
Shares
PurchasedAverage Price
Paid per ShareOctober 1 – November 4 — $ — — 2,657,340 November 5 – December 28, 2017, our Board of Directors had authorized the repurchase of up to 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 2— — — 2,657,340 December 28, 2017, we had repurchased approximately 8.8 million 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.3 – December 31— — — 2,657,340 Total — $ — — 2,657,340 24Item 6.Selected Financial Data.Five-Year Financial Summary F2017(3) F2016 31 Weeks
Ended
December 31,
2015 F2015 F2014 F2013
(in thousands) Revenues $ 622,714 543,864 324,267 488,067 447,939 412,836 Net earnings attributable to The Marcus Corporation $ 64,996 37,902 23,565 23,995 25,001 17,506 Common Stock Data(1) Net earnings per common share $ 2.29 1.36 .84 .87 .92 .63 Cash dividends per common share $ .50 .45 .21 .39 .35 1.34 Weighted-average shares outstanding
(in thousands) 28,403 27,957 27,917 27,687 27,150 27,865 Book value per share $ 15.98 14.10 13.13 12.48 11.95 11.33
(in thousands) Total assets(2) $ 1,017,797 911,266 804,701 805,472 765,001 742,978 Long-term debt(2) $ 289,813 271,343 207,376 229,096 232,691 230,739 Shareholders’ equity attributable to The Marcus Corporation $ 445,024 390,112 363,352 343,779 326,211 306,702 Capital expenditures and acquisitions $ 114,804 147,372 44,452 74,988 56,673 23,491 Financial Ratios Current ratio(2) .48 .28 .35 .34 .33 .36 Debt/capitalization ratio(2) .40 .42 .38 .42 .42 .44 Return on average shareholders’ equity 15.6 % 10.1 % 6.7 % 7.2 % 7.9 % 5.4 % (1)All per share and shares outstanding data is on a diluted basis. Earnings per share data is calculated on our Common Stock using the two class method.(2)In 2016, total assets, long-term debt, current ratio and debt/capitalization ratio were adjusted on a retrospective basis for the adoption of Accounting Standards Update (“ASU”) No. 2015-17,Balance Sheet Classification of Deferred Taxes, and ASU No. 2015-03,Simplifying the Presentation of Debt Issuance Costs. Accordingly, current deferred tax assets were reclassified to noncurrent assets and liabilities, and certain debt issuance costs previously included with long-term assets were reclassified as a reduction in long-term debt.(3)Fiscal 2017 net earnings includes a one-time reduction in deferred income taxes of $21,240, or $0.75 per diluted common share, related to the Tax Cuts and Jobs Acts of 2017.25Item 7.Results of Operations. As a result of the change in our fiscal year end described below, we nowIn October 2015, we changed our fiscalend from the last Thursday in May to the last Thursday in December. The change resulted inbeginning on December 28, 2018 and ending on December 26, 2019. Fiscal 2020 was a 31-week transition period from May 29, 2015 to53-week year, beginning on December 27, 2019 and ending on December 31, 2015 (Transition Period), consisting of two 13-week periods and a final five-week period. We refer in this Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) to the 13-week periods ended August 27, 2015 and November 26, 2015 as the first and second quarters of the Transition Period, respectively, and the five-week period ended December 31, 2015 as the last five weeks of the Transition Period. We compare our results for these periods to the comparable periods of fiscal 2015 – the unaudited 30-week period from May 30, 2014 to December 25, 2014, consisting of two 13-week periods and a final four-week period. We refer in this MD&A to the 13-week periods ended August 28, 2014 and November 27, 2014 as the first and second quarters of fiscal 2015, respectively.20162021 was a 52-week year, beginning on January 1, 2016 and ended on December 29, 2016. In this MD&A, we compare financial results from fiscal 2016 to the comparable period from the prior year that we refer to as “fiscal 2015C.” Fiscal 2015C consists of the unaudited 53-week period beginning December 26, 2014 and ended December 31, 2015. Fiscal 2015 and fiscal 2014 were 52-week years ending on the last Thursday in May. Fiscal 2017 was a 52-week year, beginning on December 30, 20162021 and ending on December 28, 2017. 30, 2021.2018 will be a 52-week year,2020 and fiscal 2021 results by quarter were significantly impacted by the COVID-19 pandemic, which began on December 29, 2017 and will end on December 27, 2018.Prior to the changelate in our fiscal year end,2020 first quarter and impacted our results for the remainder of fiscal 2020 and throughout fiscal 2021. Under normal conditions, our first fiscal quarter had produced the strongest operating results because this period coincided with the typical summer seasonality of the movie theatre industry and the summer strength of the lodging business. Our third fiscal quarter had historically produced the weakest operating results in our hotels and resorts division primarily due to the effects of reduced travel during the winter months. Our third fiscal quarter for our theatre division had historically been our second strongest quarter, but was heavily dependent upon the quantity and quality of films released during the Thanksgiving through Christmas holiday period.Due to our change to a December fiscal year end, we expect our quarterly results to be more consistent between quarters than they were in the past and our results for the last two years under the new calendar have met those expectations. Our first fiscal quarter will likely producetypically produces the weakest operating results in our hotels and resorts division due primarily to the effects of reduced travel during the winter months. We expectThe quality of film product in any given quarter typically impacts the operating results in our theatre division. Our second and third fiscal quarters to oftengenerally produce our strongest operating results because these periods coincide with the typical summer seasonality of the movie theatre industry and the summer strength of the lodging business. Due to the fact that the week between Christmas and New Year’s Eve is historically one of the strongest weeks of the year for our theatre division, we expect that the specific timing of the last Thursday in December will have an impact onimpacts the results of our fiscal first and fourth quarters in that division, particularly when we have a 53-week year.ConsolidatedComparisonsThe following tables set forth revenues, operating income, other income (expense), net earningsCondition and net earnings per common shareResults of Operations (“MD&A”) generally discusses fiscal 2021 and fiscal 2020 items and year-to-year comparisons between fiscal 2021 and fiscal 2020. Discussions of fiscal 2019 items and year-to-year comparisons between fiscal 2020 and fiscal 2019 that are not included in this MD&A can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal 2017, fiscal 2016, the unaudited prior year comparable 53-week period ended December 31, 2015 (F2015C), the Transition Period (TP), the unaudited prior year comparable 30-week period ended December 25, 2014 (PY), fiscal 20152020. Within this MD&A amounts for totals, subtotals, and fiscal 2014 (in millions, except for per share and percentage change data):26 Change F17 v. F16 Change F16 v. F15C F2017 F2016 Amt. Pct. F2015C Amt. Pct. Revenues $ 622.7 $ 543.9 $ 78.8 14.5 % $ 531.7 $ 12.2 2.3 % Operating income 75.6 70.0 5.6 8.1 % 61.0 9.0 14.6 % Other income (expense) (7.5 ) (9.4 ) 1.9 20.5 % (11.2 ) 1.8 16.0 % Net loss attributable to noncontrolling interests (0.5 ) (0.4 ) (0.1 ) -40.8 % (0.4 ) - - % Net earnings attributable to The Marcus Corporation $ 65.0 $ 37.9 $ 27.1 71.5 % $ 30.8 $ 7.1 23.1 % Net earnings per common share - diluted $ 2.29 $ 1.36 $ 0.93 68.4 % $ 1.10 $ 0.26 23.6 % Change TP v. PY TP PY Amt. Pct. Revenues $ 324.3 $ 280.6 $ 43.7 15.5 % Operating income 44.7 34.3 10.1 30.3 % Other income (expense) (6.4 ) (6.5 ) 0.1 1.6 % Net loss attributable to noncontrolling interests (0.1 ) (0.1 ) - - % Net earnings attributable to The Marcus Corporation $ 23.6 $ 16.8 $ 6.8 40.4 % Net earnings per common share - diluted $ 0.84 $ 0.61 $ 0.23 37.7 % Change F15 v. F14 F2015 F2014 Amt. Pct. Revenues $ 488.1 $ 447.9 $ 40.2 9.0 % Operating income 50.6 48.9 1.7 3.6 % Other income (expense) (11.3 ) (11.2 ) (0.1 ) -1.4 % Net loss attributable to noncontrolling interests (0.4 ) (4.1 ) 3.7 91.4 % Net earnings attributable to The Marcus Corporation $ 24.0 $ 25.0 $ (1.0 ) -4.0 % Net earnings per common share - diluted $ 0.87 $ 0.92 $ (0.05 ) -5.4 % Fiscal 2017 versus Fiscal 2016Our revenues increased during fiscal 2017 compared to fiscal 2016variances may not recalculate exactly within tables due to increased revenues fromrounding as they are calculated using the unrounded numbers.theatre divisionbusiness segments. The situation continues to be volatile and the social and economic effects are widespread. As an operator of movie theatres, hotels and resorts, division. Our operating income (earnings beforerestaurants and bars, each of which consists of spaces where customers and guests gather in close proximity, our businesses are significantly impacted by protective actions that federal, state and local governments have taken to control the spread of the pandemic, and our customers’ reactions or responses to such actions. These actions have included, among other income/expensethings, declaring national and income taxes) increasedstate emergencies, encouraging social distancing, restricting freedom of movement and congregation, mandating non-essential business closures, issuing curfews, limiting business capacity, mandating mask-wearing and/or proof of vaccination, and issuing shelter-in-place, quarantine and stay-at-home orders.20172021). The majority of our reopened theatres operated with reduced operating days (Fridays, Saturdays, Sundays and Tuesdays) and reduced operating hours during the fiscal 2021 first quarter. By the end of May 2021, we had returned the vast majority of our theatres to normal operating days (seven days per week) and operating hours. During fiscal 2021, all of our reopened theatres operated at significantly reduced attendance levels compared to fiscal 2016prior pre-COVID-19 pandemic years due to customer concerns related to the COVID-19 pandemic and a reduction in the number of new films released. While still below pre-COVID-19 levels, attendance has gradually improved operating results frombeginning in June 2021 as the number of vaccinated individuals increased, more films were released, and customer willingness to return to movie theatres increased.theatre division, partially offset by a decreasecompany-owned hotels and all but one of our managed hotels open. The majority of our restaurants and bars in operating income from our hotels and resorts division. Net earnings for fiscal 2017 increased compared to fiscal 2016 due to the increase in operating income, an increased gain on disposition of property, equipment and other assets and a decrease in income tax expense, partially offset by an increase in interest expense.New theatres favorably impacted revenues and operating income from our theatre divisionwere open during fiscal 2017 compared to fiscal 2016. In mid-October 2016, we opened a newly renovated theatre2021, operating under applicableCountry 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 consistingsome cases, reduced operating hours. The majority 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, we opened our first stand-alone all in-theatre dining location, branded BistroPlexSM and located in Greendale, Wisconsin.27Operating 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, partially offset by a stronger slate of movies during the fiscal 2017 first and fourth quarters compared to the first and fourth quarters of fiscal 2016. Increased attendance resulting from positive customer response to our recent investments and pricing strategies and increased concession sales per person due to our expanded food and beverage offerings partially offset the negative impact of the weaker slate of movies during fiscal 2017 and contributed to our improved operating results during fiscal 2017 compared to fiscal 2016. Increased preopening expenses related to new theatres during the fiscal 2017 periods negatively impacted comparisons to the fiscal 2016 periods, as did the fact that our fiscal 2016 operating results included a significant one-time incentive payment from our pre-show advertising provider. Conversely, fiscal 2016 operating income was negatively impacted by one-time transaction costs related to the Wehrenberg acquisition.Revenues from our hotels and resorts division were favorably impactedrestaurants are generating reduced revenues as compared to prior pre-COVID-19 pandemic years, although hotel occupancy increased throughout the fiscal 2021 year. We reopened one of our two 2017 by2022 and beyond, even if our newSafeHouse® restaurant and bar that we opened on March 1, 2017 in downtown Chicago, Illinois adjacentproperties continue to our AC Chicago Downtown Hotel. Increased roomgenerate reduced revenues during fiscal 2017, duethese periods. We will continue to work to preserve cash and maintain strong liquidity to endure the impacts of the global pandemic, even if it continues for a prolonged period of time.part to new villas that we opened during the secondthird quarter of fiscal 2017 at2021, in conjunction with an amendment to our revolving credit agreement (described in detail in the Grand Geneva Resort & Spa, and increased revenue per available room for comparable hotels during fiscal 2017 compared to fiscal 2016, also contributed to the increased total revenues during fiscal 2017. Operating incomeLiquidity section below), we paid down a portion of our term loan facility using borrowings from our hotels and resorts division was unfavorably impacted by preopening expenses and start-up operating lossesrevolving credit facility, reducing the balance of our short-term borrowings from our newSafeHouse restaurant and bar during fiscal 2017, as well as a small decreaseapproximately $83.5 million to $50.0 million. In conjunction with the amendment, we extended the maturity date of the term loan facility to September 22, 2022.management company profits.Operating losses from our corporate items, which include amounts not allocable to the business segments, increased during fiscal 2017 compared to fiscal 2016 primarily due in part to one-time costs associated with the retirement of two directors from our board of directors during the secondfirst quarter of fiscal 20172021, we received the remaining $5.9 million of requested tax refunds from our fiscal 2019 tax return. During the first quarter of fiscal 2021, we filed income tax refund claims of $24.2 million related to our fiscal 2020 tax return, with the primary benefit derived from net operating loss carrybacks to prior years. We received approximately $1.8 million of this refund in July 2021. Due to significant delays in processing refunds by the Internal Revenue Service, the remaining $22.3 million refund, plus interest, was not received until February 2022. We also generated additional income tax loss carryforwards during fiscal 2021 that will benefit future years.deathCOVID-19 pandemic, utilizing funds received by the applicable state under provisions of a directorthe Coronavirus Aid, Relief, and Economic Security Act of 2020 (the “CARES Act”) or subsequent federal relief programs. We received $4.9 million of these prior year grants in January 2021. We were awarded and received an additional $1.3 million in theatre grants during the first quarter of fiscal 2021 and an additional $1.9 million in hotel grants during the third quarter of fiscal 2017. Increased long-term incentive compensation expenses resulting from our improved financial performance and stock performance2021. We were also awarded an additional $4.5 million in theatre grants during the past several years alsofourth quarter of fiscal 2021, the majority of which was not received until January 2022. All of these grants further contributed to increased operating losses from our corporate items during fiscal 2017, as did an increase in our contribution to our charitable foundation during fiscal 2017.We recognized investment income of $588,000 during fiscal 2017 compared to investment income of $298,000 during fiscal 2016. Investment income includes interest earned on cash and cash equivalents, as well as increases in the value of marketable securities and the cash surrender value of a life insurance policy. We currently do not expect investment income during fiscal 2018 to vary significantly compared to fiscal 2017.Interest expense totaled $12.1 million during fiscal 2017, an increase of $2.9 million, or 31.9%, compared to interest expense of $9.2 million during fiscal 2016. The increase in interest expense during fiscal 2017 was due primarily to payments we made on the approximately $24.5 million of capital lease obligations we assumed in the Wehrenberg acquisition. current strong liquidity position.experienced an increase in our total borrowings under long-term debt agreements during fiscal 2017 comparedcontinue to fiscal 2016, further contributing to our increased interest expense during fiscal 2017, partially offset by a lower average interest rate during fiscal 2017, as we had a greater percentagepursue sales of lower-cost variable rate debt in our debt portfolio during fiscal 2017 compared to fiscal 2016.Based upon an expected decrease in our capital expenditures during fiscal 2018 (assuming no presently unidentified acquisitions), our total borrowings may decrease in fiscal 2018, favorably impacting interest expense in future periods. Conversely, anticipated increases in our short-term interest rates may negatively impact interest expense in fiscal 2018. 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, either favorably or unfavorably, our actual reported interest expense in future periods, as may changes in short-term interest rates.28We reported a net gain on disposition of property, equipmentsurplus real estate and other assets of $4.0 million during fiscal 2017, comparednon-core real estate to net losses on disposition of property, equipment and other assets of $844,000 during fiscal 2016. The net gain during fiscal 2017 included a $4.9 million gain on the sale offurther enhance our 11% minority interest in The Westin® Atlanta Perimeter North in October 2017, a $600,000 gain from the sale of our interest in Movietickets.com (which was purchased by a competing ticketing service, Fandango), as well as additional gains from the sale of two theatres (one that had previously closed and one that had been operating prior to its sale) and our sale of our 15% minority interest in the Sheraton Madison Hotel. Our net gain in fiscal 2017 was partially offset by losses from our disposal of old theatre seats and other items in conjunction with our significant number of theatre renovations during the fiscal 2017, as well as our write off of disposed equipment at one of our hotels duringliquidity. During the first quarter of fiscal 2017. The majority2021, we sold an equity interest in a joint venture, generating net proceeds of approximately $4.2 million. During the losses during fiscal 2016 were related to old theatre seats and other items disposed of in conjunction with our significant number of theatre renovations during the year, partially offset by a gain on the sale of an unused parcel of land during fiscal 2016. The timing of our periodic sales and disposals of property, equipment and other assets results in variations each year in the gains or losses that we report on dispositions of property, equipment and other assets. We anticipate the potential for additional disposition losses resulting from theatre renovations, as well as disposition gains or losses from periodic sales of property, equipment and other assets, during fiscal 2018 and beyond. As discussed in more detail in the “Current Plans” section of this MD&A, we may report gains in future years from the potential sale of existing hotel assets.We reported net equity earnings from unconsolidated joint ventures of $46,000 and $301,000, respectively, during fiscal 2017 and fiscal 2016. Net earnings during the reported periods included our pro-rata share from four hotel joint ventures in which we had minority ownership interests during portionsthird quarter of fiscal 2017 and 2016. During fiscal 2017,2021, we ceased managementsold several land parcels, generating additional net proceeds of the Sheraton Madison Hotel in Madison, Wisconsin and The Westin Atlanta Perimeter North and sold our respective 15% and 11% minority ownership interests in these properties. During fiscal 2016, we ceased management of The Hotel Zamora and Castile Restaurant in St. Pete Beach, Florida and sold virtually all of our 10% minority ownership interest in the property. We have agreed to sell our remaining 0.49% interest during the next several years. Conversely, the new Omaha Marriott Downtown at The Capitol District hotel in Omaha, Nebraska opened in August 2017 – a hotel we manage and in which we have a 10% minority ownership interest. We currently do not expect significant variations in net equity gains or losses from unconsolidated joint ventures during fiscal 2018 compared to fiscal 2017, unless we significantly increase the number of joint ventures in which we participate during fiscal 2018.We include the operating results of two majority-owned hotels, The Skirvin Hilton and The Lincoln Marriott Cornhusker Hotel, in the hotels and resorts division revenue and operating income, and we add or deduct the after-tax net earnings or loss attributable to noncontrolling interests to or from net earnings on the consolidated statement of earnings. We reported net losses attributable to noncontrolling interests of $511,000 and $363,000, respectively, during fiscal 2017 and fiscal 2016.approximately $4.8 million. During the fourth quarter of fiscal 2017,2021, we purchasedsold a retail center in St. Louis, Missouri and a former budget theatre, generating additional net proceeds of approximately $12.6 million. As of December 30, 2021, we had letters of intent or contracts to sell several pieces of real estate with a total carrying value of $4.9 million. We believe we may receive total sales proceeds from real estate sales during the noncontrolling interestnext 12 months totaling approximately $10 - $20 million, depending upon demand for the real estate in question.Lincoln Marriott Cornhusker Hotel from our former partner for $410,000.We reported income tax expenseincrease of first the Delta variant and subsequently the Omicron variant of the disease has resulted in changing government guidance on indoor activities in some communities, which impacted consumer comfort early in fiscal 2022. With the number of COVID-19 cases now beginning to decline, industry customer surveys indicate that consumer comfort is once again increasing.20172020 and 2021 were delayed until fiscal 2022, further increasing the quality and quantity of $3.6 million, a decrease of approximately $19.4 million, or 84.2%, comparedfilms that we expect to income tax expense of $23.0 millionbe available during future time periods.2016. Our fiscal 2017 income tax expense was favorably impacted by2021 continued to come from the reversal“drive-to leisure” market. Demand from this customer segment has exceeded our expectations. Most organizations implemented travel bans at the onset of deferred income taxes of $21.2 million duethe pandemic, only allowing essential travel. It is likely that business travel will continue to the reductionbe limited in the federal tax ratenear term, although we are beginning to experience some increases in travel from 35%this customer segment. Total hotel division revenues, expressed as a percentage of fiscal 2019 revenues, have also increased throughout fiscal 2021, including an increase from 51% in the first quarter to 21% resulting from57% in second quarter, 88% in the December 22, 2017 signingthird quarter and 82% in the fourth quarter, with the largest improvement in the third quarter coinciding with busy summer leisure travel and several demand-generating events in certain key markets. As of the Tax Cuts and Jobs Actdate of 2017. We estimate that this one-time adjustmentreport, our group room revenue bookings for fiscal 2022 - commonly referred to deferred taxes favorably impacted our net earnings per share during fiscal 2017 by approximately $0.75 per share. Excluding the one-time favorable adjustment to income tax expense, our 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 36.2% during fiscal 2017 and 37.8% during fiscal 2016. As a result of the changes in the tax law, we currently anticipate that our fiscal 2018 effective income tax rate will decrease to approximately 25-27%, excluding any potential further changes in federal or state income tax rates.29Weighted-average shares outstanding were 28.4 million during fiscal 2017 and 28.0 million during fiscal 2016. All per share data in this MD&A is presented on a fully diluted basis.Fiscal 2016 versus Fiscal 2015COur revenues increased during fiscal 2016 compared to fiscal 2015C due to increased revenues from our theatre division, partially offset by a decrease in revenues from our hotels and resorts divisionindustry as “group pace” - is running behind where we would typically be at this same time in prior years (pre-pandemic), but group pace has improved from earlier in the fiscal year and the fact that fiscal 2015C benefitted from an extra week of operations. Our operating income (earnings before other income/expense and income taxes) and net earningswe have experienced increased booking activity in recent months for fiscal 2016 increased compared2022 and beyond. Banquet and catering revenue pace for fiscal 2022 is also running behind where we would typically be at this same time in prior pre-pandemic years. Increased wedding bookings have contributed to banquet and catering revenue in fiscal 2015C due2021. The future economic environment will also have a significant impact on the pace of our return to improved“normal” hotel operations.resultsdivisions are experiencing challenges related to a labor shortage that has arisen as the country emerges from the pandemic. Difficulties in hiring new associates after significantly reducing staffing during the height of the COVID-19 pandemic has impacted our ability to service our increasing customer counts in both theatres and hotels and may also increase labor costs in future periods.divisions, despitebusinesses, results of operations, cash flows, financial condition, access to credit markets and ability to service our existing and future indebtedness. favorable impact of the additional week of operations on fiscal 2015C operating results.Operating results fromCOVID-19 pandemic, our theatre division during fiscal 2016 were favorably impacted by a slightly stronger film slate during fiscal 2016, increased attendance and average ticket price resulting from continued positive customer responses to our recent investments in theatre amenities and pricing strategies, increased concession revenues, and increased pre-show advertising income compared to fiscal 2015C, partially offset by the fact that fiscal 2015C included an additional week of operations. In mid-December 2016, our theatre division acquired Wehrenberg Theatres, a Midwestern theatre circuit consisting of 14 theatres with 197 screens, plus an 84,000 square foot retail center. Our theatre division revenues benefitted from two weeks of operation of these screens, but the benefit to our fiscal 2016 operating income was offset by one-time transaction costs related to this acquisition.Operating results from our hotels and resorts division during fiscal 2016 were favorably impacted by several factors, including strong cost controls and increased revenue per available room for comparable hotels during fiscal 2016 compared to fiscal 2015C. In addition, operating income for our hotels and resorts division during fiscal 2016 compared to fiscal 2015C was favorably impacted by the fact that operating income during fiscal 2015C included a $2.6 million impairment charge related to one specific hotel. Conversely, operating results from our hotels and resorts division during fiscal 2016 compared to fiscal 2015C were unfavorably impacted by the fact that fiscal 2015C results included an additional week of operations and included results from the Hotel Phillips, which we sold in October 2015. Operating results from our hotels and resorts division during fiscal 2016 were also negatively impacted by reduced food and beverage revenues compared to fiscal 2015C, due in part to the fact that fiscal 2016 ended on December 29 and did not include New Year’s Eve, historically a very strong food and beverage day for our properties.Operating losses from our corporate items, which include amounts not allocable to the business segments, increased during fiscal 2016 compared to fiscal 2015C primarily due to the fact that the prior year period was favorably impacted by the reimbursement of approximately $1.4 million of costs previously expensed related to a mixed-use retail development known as The Corners of Brookfield. Increased compensation expenses related to our improved operating results during fiscal 2016 compared to fiscal 2015C also contributed to increased operating losses from our corporate items in fiscal 2016, partially offset by the fact that fiscal 2015C corporate operating losses included one-time costs associated with the fiscal year-end change and costs related to the additional week of operations.As described above, our additional week of operations during fiscal 2015C benefitted both of our operating divisions, negatively impacting comparisons of fiscal 2016 operating results to fiscal 2015C operating results. We estimate that the additional week beginning December 26, 2014 and ended January 1, 2015 contributed approximately $14.3 million in revenues and $4.8 million in operating income to fiscal 2015C. After interest expense and income taxes, we estimate that the extra week of operations contributed approximately $2.8 million to our fiscal 2015C net earnings, or $0.10 per diluted common share.30We recognized investment income of $298,000 during fiscal 2016 compared to investment income of $209,000 during fiscal 2015C.Our interest expense totaled $9.2 million during fiscal 2016, a decrease of over $800,000, or 8.6%, compared to interest expense of $10.0 million during fiscal 2015C. The decrease in interest expense during fiscal 2016 was due primarily to a lower average interest rate, as certain principal payments we made on our fixed rate senior notes during fiscal 2016 were funded by borrowings on our revolving credit facility, which has a lower associated interest rate. A small decrease in our total borrowings during the majority of fiscal 2016 compared to fiscal 2015C also contributed to the decrease in interest expense during fiscal 2016.We reported net losses on disposition of property, equipment and other assets of $844,000 during fiscal 2016, compared to approximately $1.2 million during fiscal 2015C. The majority of the losses during both periods were related to old theatre seats and other items disposed of in conjunction with our significant number of theatre renovations during the periods, partially offset by a gain on the sale of an unused parcel of land during fiscal 2016 and a small gain related to the sale of a former theatre during fiscal 2015C.We reported net equity earnings from unconsolidated joint ventures of $301,000 during fiscal 2016 compared to net equity losses from unconsolidated joint ventures of $160,000 during fiscal 2015C. Net earnings/losses during the reported periods included our pro-rata share from two hotel joint ventures in which we had 15% and 11% ownership interests, respectively, as of December 29, 2016. During fiscal 2016, we ceased management of The Hotel Zamora and Castile Restaurant in St. Pete Beach, Florida and sold virtually all of our 10% minority ownership interest in the property. We have agreed to sell our remaining 0.49% interest during the next several years. This ownership interest and transaction did not significantly impact our financial results during the reported periods.We include the operating results of two majority-owned hotels, The Skirvin Hilton and The Lincoln Marriott Cornhusker Hotel, in the hotels and resorts division revenue and operating income, and we add or deduct the after-tax net earnings or loss attributable to noncontrolling interests to or from net earnings on the consolidated statement of earnings. We reported net losses attributable to noncontrolling interests of $363,000 and $393,000, respectively, during fiscal 2016 and fiscal 2015C.We reported income tax expense during fiscal 2016 of $23.0 million, an increase of approximately $3.6 million, or 18.4%, compared to income tax expense of $19.4 million during fiscal 2015C. Our 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 37.8% during fiscal 2016 and 38.7% during fiscal 2015C.Weighted-average shares outstanding were 28.0 million during fiscal 2016 and 27.9 million during fiscal 2015C.Transition Period versus Prior Year Comparable PeriodOur revenues, operating income and net earnings for the 31-week Transition Period increased compared to the prior year comparable 30-week period (which we refer to as the prior year comparable period) due to improved operating results from both our theatre and hotels and resorts divisions, as well as the favorable impact of the additional week of operations. Operating results from our theatre division during the Transition Period were favorably impacted by increased attendance due primarily to a stronger film slate during the Transition Period and continued positive customer responses to our recent investments and pricing strategies, as well as increased concession revenues compared to the prior year comparable period. Operating results from our hotels and resorts division during the Transition Period were favorably impacted by several factors, including a higher average daily room rate, strong cost controls and reduced depreciation expense. Operating results from our corporate items, which include amounts not allocable to the business segments, were negatively impacted by one-time costs associated with the fiscal year-end change, costs related to the additional week of operations and increased compensation expenses related to our improved operating results during the Transition Period compared to the prior year comparable period.31Our additional 31st week of operations, beginning December 25, 2015 and ended on December 31, 2015, benefitted both of our operating divisions and contributed approximately $17.4 million in revenues and $6.2 million in operating income to our Transition Period. After interest expense and income taxes, we estimate that the extra week of operations contributed approximately $3.6 million to our Transition Period net earnings, or $0.13 per diluted common share.We did not have any significant variations in investment income or interest expense during the Transition Period compared to the prior year comparable period. We reported net equity losses from unconsolidated joint ventures of $36,000 during the Transition Period compared to net equity losses from unconsolidated joint ventures of $63,000 during the prior year comparable period. Net losses during the reported periods included our pro-rata share from three hotel joint ventures in which we had 15%, 11% and 10% ownership interests, respectively, as of December 31, 2015.In October 2015, we sold the Hotel Phillips for a total purchase price of $13.5 million. Proceeds from the sale were approximately $13.1 million, net of transaction costs. Pursuant to the sale agreement, we also retained our rights to receive payments under a tax incremental financing (TIF) arrangement with the City of Kansas City, Missouri, which is recorded as a receivable at its estimated net realizable value on the consolidated balance sheet. The result of the transaction was a loss on sale of approximately $70,000.We reported net losses on disposition of property, equipment and other assets of $490,000 during the Transition Period, compared to net losses on disposition of property, equipment and other assets of $719,000 during the prior year comparable period. In addition to the loss on the Hotel Phillips sale during the Transition Period, the majority of the remaining losses during both periods were related to old theatre seats and other items disposed of in conjunction with our significant number of theatre renovations during the periods, partially offset during the Transition Period by a small gain related to the sale of a former theatre.We include the operating results of two majority-owned hotels, The Skirvin Hilton and The Lincoln Marriott Cornhusker Hotel, in the hotels and resorts division revenue and operating income, and we add or deduct the after-tax net earnings or loss attributable to noncontrolling interests to or from net earnings on the consolidated statement of earnings. We reported net losses attributable to noncontrolling interests of $122,000 and $82,000, respectively, during the Transition Period and prior year comparable period.We reported income tax expense for the Transition Period of $14.8 million, an increase of approximately $3.8 million, or 33.9%, compared to income tax expense of $11.0 million for the prior year comparable period. Our 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 38.6% during the Transition Period and 39.7% during the prior year comparable period.Weighted-average shares outstanding were 27.9 million during the Transition Period and 27.6 million during the prior year comparable period.Fiscal 2015 versus Fiscal 2014We reported increased revenues during fiscal 2015 due to increased revenues from both our theatre and hotels and resorts divisions. Operating income for fiscal 2015 increased compared to the prior year due to record operating results from our theatre division, partially offset by decreased operating income from our hotels and resorts division. Comparisons of our net earnings attributable to The Marcus Corporation during fiscal 2015 to net earnings attributable to The Marcus Corporation during fiscal 2014 were unfavorably impacted by an impairment charge during fiscal 2015 and a significant loss attributable to noncontrolling interests during fiscal 2014.32Operating results from our theatre division during fiscal 2015 were favorably impacted by increased attendance, due primarily to positive customer responses to our recent investments, and our marketing and pricing strategies, partially offset by approximately $300,000 of non-cash impairment charges. Operating income from our hotels and resorts division during fiscal 2015 was negatively impacted by several factors, including increased depreciation expense, reduced results from our Chicago hotel as a result of the conversion of the hotel into a new brand and a $2.6 million non-cash impairment charge. We estimate that total impairment charges from both divisions negatively impacted our net earnings per share during fiscal 2015 by approximately $0.06 per share.Fiscal 2015 operating losses from our corporate items, which include amounts not allocable to the business segments, decreased compared to the prior year due to the reversal of approximately $1.4 million of costs previously expensed related to a previously-described mixed-use retail development known as The Corners of Brookfield (partially situated on the site of a former Marcus theatre location). In February 2015, we entered into a joint venture agreement with IM Properties and Bradford Real Estate, two retail development and investment experts, to serve as the new project management team leading The Corners to completion. IM Properties and Bradford serve as managing members of the new joint venture, and we remain a 10% partner in the joint venture. Under this agreement, we contributed our land to the joint venture early in our fiscal 2015 fourth quarter and, in conjunction with the commencement of construction as defined in the agreement, we were reimbursed for the majority of our previously incurred predevelopment costs during the first quarter of the Transition Period. The joint venture agreement provides a put/call option for our interest to be sold to the managing members for an agreed-upon amount one year after the project is open and has reached a specified percentage of space leased.In addition to changes in operating income, our reported results for fiscal 2015 compared to the prior year were also impacted by changes to other non-operating income and expense items. Net earnings attributable to The Marcus Corporation during fiscal 2015 were unfavorably impacted by a decrease in investment income and an increase in losses on disposition of property, equipment and other assets, partially offset by a decrease in interest expense and reduced equity losses from joint ventures during fiscal 2015 compared to the prior year.We recognized investment income of $252,000 during fiscal 2015 compared to investment income of approximately $630,000 during the prior year. The decrease in investment income during fiscal 2015 compared to the prior year was due to the payoff of a note in our hotels and resorts division.Our interest expense totaled $9.9 million during fiscal 2015, a decrease of approximately $700,000, or 5.9%, compared to interest expense of $10.6 million during fiscal 2014. The decrease in interest expense during fiscal 2015 was due entirely to a lower average interest rate, as we had slightly higher total borrowings during fiscal 2015 compared to fiscal 2014. Our average interest rate was lower during fiscal 2015 due primarily to our decision to pay off an approximately $21 million fixed rate mortgage related to one of our hotels at the end of May 2014 using borrowings from our revolving credit facility.We reported net losses on disposition of property, equipment and other assets of approximately $1.5 million during fiscal 2015, compared to net losses on disposition of property, equipment and other assets of $993,000 during fiscal 2014. The majority of the losses during fiscal 2015 were related to old theatre seats and other items disposed of in conjunction with our significant number of theatre renovations during the year. Fiscal 2015 net losses also included losses related to the disposal of items in conjunction with the major renovation of our Chicago hotel. Approximately $750,000 of the loss during fiscal 2014 was related to the sale of our 15% joint venture ownership interest in the Westin Columbus hotel in Columbus, Ohio to our majority partner in that venture.We reported net equity losses from unconsolidated joint ventures of $186,000 during fiscal 2015 compared to net equity losses from unconsolidated joint ventures of $250,000 during the prior year. Losses during fiscal 2015 and 2014 included our pro-rata share from two hotel joint ventures in which we had 15% and 11% ownership interests, respectively, as well as a hotel joint venture that we entered into during fiscal 2015 in which we had a 10% ownership interest.33Net earnings attributable to The Marcus Corporation during fiscal 2014 benefitted from an allocation of a loss attributable to noncontrolling interests of $4.1 million related primarily to a legal settlement with our partners in The Skirvin Hilton hotel. The settlement resulted in a reallocation between partners of a prior year’s reported income from the extinguishment of debt at The Skirvin Hilton. We estimate that the loss attributable to noncontrolling interests related directly to this legal settlement during fiscal 2014 was approximately $3.6 million before income taxes and favorably impacted our net earnings attributable to The Marcus Corporation after income taxes by approximately $0.08 per share.We reported income tax expense for fiscal 2015 of $15.7 million, a decrease of approximately $1.1 million, or 6.7%, compared to fiscal 2014 income tax expense of $16.8 million. Our effective income tax rate, after adjusting for earnings and losses from noncontrolling interests that are not tax-effected because the entities involved are tax pass-through entities, was 39.5% during fiscal 2015 and 40.2% during fiscal 2014.Weighted-average shares outstanding were 27.7 million during fiscal 2015 and 27.2 million during fiscal 2014.Current PlansOur aggregate cash capital expenditures, acquisitions and purchases of interests in, and contributions to, joint ventures were approximately: (i) $115$19.5 million during fiscal 20172021, compared to $147$21.4 million during fiscal 20162020 and $86$94.2 million during fiscal 2015C; (ii) $462019 (including approximately $30 million duringin cash consideration paid in conjunction with the Transition Period comparedMovie Tavern acquisition described below). Although we anticipate that we will continue to approximately $35 million during the prior year comparable 30-week period; and (iii) $77 millioncarefully monitor our capital expenditures during fiscal 2015 compared to $58 million2022, we currently estimate that cash capital expenditures will increase during fiscal 2014. We currently anticipate that our fiscal 2018 capital expenditures may be in2022 to the $65-$80$35 - $45 million range, excluding any presently unidentified acquisitions that may arise during the year.range. We will, however, continue to monitor our operating results and economic and industry conditions so that we may adjust our plans accordingly.TheatresiOur current plans for growth in our theatre division include several opportunities for new theatres and screens. Late in our fiscal 2015 fourth quarter, we opened a theatre in Sun Prairie, Wisconsin, the Marcus Palace Cinema. Replacing an existing nearby theatre in Madison, Wisconsin, this new 12-screen theatre has exceeded our expectations, and we opened two additional screens at this location during the fourth quarter of fiscal 2016. In April 2017, we opened our new 10-screen Southbridge Crossing Cinema in Shakopee, Minnesota. This state-of-the-art theatre includes DreamLoungerSM recliner seating in all auditoriums, twoUltraScreen DLX® auditoriums, as well as aTake FiveSMLounge andZaffiro’s®Express outlet. On June 30, 2017, we opened our first stand-alone all in-theatre dining location, branded BistroPlexSM 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. In addition, we are looking for additional sites for potential new theatre locations in both new and existing markets.34iIn addition to building new theatres, we believe acquisitions of existing theatres or theatre circuits is also a viable growth strategy for us. In April 2016, we purchased a closed 16-screen 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 added DreamLounger recliner seating to all auditoriums, added oneUltraScreen DLX auditorium and twoSuperScreen DLX auditoriums, as well as aTake Five Lounge andReel Sizzle® outlet.In December 2016, we acquired theof Wehrenberg,in a family-owned and operated theatre circuit based in St. Louis, Missouri with 197 screens at 14 locations in Missouri, Iowa, Illinois and Minnesota. This acquisition increased our total number of screens by 29%post-pandemic world. The movie theatre industry is very fragmented, with approximately 50% of United States screens owned by the three largest theatre circuits and the other 50% owned by approximately 800 smaller operators, making it very difficult to predict when acquisition opportunities may arise. We have engaged third-party assistanceinvested approximately $379 million to actively help us seek additional acquisitionsfurther enhance the movie-going experience and amenities in new and existing theatres over the future. We do not believe that we are geographically constrained, and we believe that we may be able to add value to certain theatres through our various proprietary amenities and operating expertise.iWe have invested over $275 million to further enhance the movie-going experience and amenities in new and existing theatres over the last four and one-half calendar years, with more investments planned for fiscal 2018. These investments include:additions. These luxurious, state-of-the-art recliners allow guests to go from upright to a full-recline position in seconds. These seat changes require full auditorium remodels to accommodate the necessary 84 inches of legroom, resulting in the loss of approximately 50% of the existing traditional seats in an average auditorium. To date, the addition of DreamLoungers has increased attendance at each of our applicable theatres, outperforming nearby competitive theatres as well as growing the overall market attendance in most cases. In addition to the two new theatres described above, we added DreamLounger recliner seats to 15 more theatres during fiscal 2017 (including six Marcus Wehrenberg theatres).seating additions. As a result, as of December 28, 2017,30, 2021, we offered all DreamLounger recliner seating in 3966 theatres, representing approximately 61%78% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres).theatres. Including our premium, large format (PLF) auditoriums with recliner seating, as of December 28, 2017,30, 2021, we offered our65%81% of our company-owned, first-run screens, (including the Marcus Wehrenberg screens), a percentage we believe to be the highest among the largest theatre chains in the nation. Currently, seven Marcus Wehrenberg theatres offer recliner seating in all of its auditoriums.We are currently completing the addition of Dream lounger recliner seats to three more theatres (including two Marcus Wehrenberg theatres) and evaluating opportunities to add our DreamLounger premium seating to five to seven additional theatres during the second half of fiscal 2018, including two Marcus Wehrenberg theatres. As a result, by the end of fiscal 2018, our percentage of total company-owned, first-run screens with DreamLounger recliner seating may be more than 75%. (DreamLounger®(DreamLounger eXperience) conversions. We introduced one of the first PLF presentations to the industry when we rolled out our proprietaryUltraScreen® concept in 1999. During fiscal 2014, we introduced ourUltraScreen DLX concept by combining our premium, large-format presentation with DreamLounger recliner seating and Dolby® Atmos™ immersive sound to elevate the movie-going experience for our guests. During fiscal 2017, we opened two newUltraScreen DLX auditoriums at our new theatre in Minnesota and two newSuperScreen DLX auditoriums at our new BistroPlex theatre in Wisconsin, completed conversion of two traditionalUltraScreens and one existing Wehrenberg-branded PLF screen toUltraScreen DLX auditoriums at existing theatres in Wisconsin and Missouri, and converted 16 additional screens toSuperScreen DLX auditoriums at ten existing theatres in six states (including 11 Marcus Wehrenberg screens). Several of our new PLF screens in fiscal 2017 included the added feature of heated DreamLounger recliner seats.conversions. As of December 28, 2017,30, 2021, we had 28a total of 120 premium large format (“PLF”) screens at 66 of our theatre locations (31 UltraScreen DLX auditoriums, one traditionalUltraScreen auditorium, 4385 SuperScreen DLX auditoriums (a- a slightly smaller screen than anUltraScreen but with the same DreamLounger seating and Dolby Atmos sound) at our theatre locations. Threesound - and three IMAX® PLF screens). As of the acquired Marcus Wehrenberg theatres feature IMAX® PLF screens. We currently offerDecember 30, 2021, we offered at least one PLF screen in approximately 69%78% of our first-run, company-owned theatres (including the Marcus Wehrenberg theatres) – once again a percentage we believe to be the highest percentage among the largest theatre chains in the nation.35 We are currently evaluating opportunities to convert two additional screens at two existing theatres toUltraScreen DLX andSuperScreen DLX auditoriums during fiscal 2018, in addition to two newUltraScreen DLX auditoriums planned for a third existing theatre.concepts.concepts. We have continued to further enhance our food and beverage offerings within our existing theatres. We believe our 50-plus years of food and beverage experience in the hotel and restaurant businesses provides us with a unique advantage and expertise that we can leverage to further grow revenues in our theatres. As of December 30, 2021, we offered bars/full liquor service under the concepts Take FiveSM Lounge, Take Five Express andThe Tavern at 49 theatres, representing approximately 58% of our theatres. As of December 30, 2021, we also offered one or more in-lobby dining concepts, including the pizza concept Zaffiro’s® Express and hamburger and other Americana fare concept Reel Sizzle®, in 39 theatres, representing approximately 60% of our theatres (excluding our in-theatre dining theatres). In select locations without a Take Five Lounge outlet, we offer beer and wine at the Zaffiro’s Express outlet. We also operate three Zaffiro’s®Pizzeria and Bar full-service restaurants.include:·Take Five Lounge andTake Five Express – these full-service bars offer an inviting atmosphere and a chef-inspired dining menu, along with a complete selection of cocktails, locally-brewed beers and wines. We opened five newTake Five Lounge outlets in fiscal 2017, including two outlets opened at new theatres described above. In addition, two Marcus Wehrenberg theatres offer a lounge concept, one of which was converted to aTake Five Lounge during fiscal 2017. As of December 28, 2017, we offered bars at 26 theatres, representing approximately 41% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres). We are currently evaluating opportunities to add bar service to additional theatres during fiscal 2018.·Zaffiro’s Express – these outlets offer lobby dining that includes appetizers, sandwiches, salads, desserts and our signatureZaffiro’s THINCREDIBLE® handmade thin-crust pizza. In select locations without aTake Five Lounge outlet, we offer beer and wine at theZaffiro’s Express outlet. We opened four newZaffiro’s Express outlets during fiscal 2017, increasing our number of theatres with this concept to 26 as of December 28, 2017, representing approximately 41% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres). We also operate threeZaffiro’s Pizzeriaand Bar full-service restaurants. We are currently evaluating opportunities to add two additionalZaffiro’s Express outlets during fiscal 2018.·Reel Sizzle – our newest signature dining concept serves menu items inspired by classic Hollywood and the iconic diners of the 1950s. We offer Americana fare like burgers and chicken sandwiches prepared on a griddle behind the counter, along with chicken tenders, crinkle cut fries, ice cream and signature shakes. As of December 28, 2017, we operated sevenReel Sizzle outlets, including two that we opened during fiscal 2017, and we are evaluating additional opportunities to addReel Sizzle outlets to existing theatres in the future.·We also operate oneHollywood Café at an existing theatre and four of the Marcus Wehrenberg theatres offer in-lobby dining concepts, operating under names such asFred’s Drive-In orFive Star. Including these additional concepts, as of December 28, 2017, we offered one or more in-lobby dining concepts in 36 theatres, representing approximately 56% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres).·Big Screen Bistro – this concept offers full-service, in-theatre dining with a complete menu of drinks and chef-prepared salads, sandwiches, entrées and desserts. Including two Marcus Wehrenberg theatres that had proprietary in-theatre dining concepts converted toBig Screen Bistro concepts during fiscal 2017, one Marcus Wehrenberg theatre offering in-theatre dining under the nameFive Star and the eight-screen new BistroPlex theatre described above, we currently offer in-theatre dining at ten theatres in 37 total auditoriums (including one theatre and five screens managed for another owner), representing approximately 14% of our company-owned, first-run theatres (including the Marcus Wehrenberg theatres). We will continue to evaluate additional opportunities to expand our in-theatre dining concepts in the future.36iWith each of these strategies, our goal continues to be to introduce and create entertainment destinations that further define and enhance the customer value proposition for movie-going. We also will continue to maintain and enhance the value of our existing theatre assets by regularly upgrading and remodeling our theatres in order to keep them fresh. In order to accomplish the strategies noted above, we currently anticipate that our fiscal 2018 capital expenditures in this division may total approximately $50-$60 million, excluding any additional acquisitions.iIn addition to the growth strategies described above, our theatre division continues to focus on multiple strategies designed to further increase revenues and improve the profitability of our existing theatres. These strategies include various cost control efforts, as well as plans to expand ancillary theatre revenues, such as pre-show advertising, lobby advertising, additional corporate and group sales, sponsorships and alternate auditorium uses.iWe also have several customer-focused strategies designed to elevate our consumer knowledge, expectation and connection, and provide us with a competitive advantage and the ability to deliver improved financial performance. These strategies include the following:Marketing initiativesrolled out a “$5 Tuesday” promotion at every theatrecurrently have approximately 4.4 million members enrolled in the program. Approximately 41% of all box office transactions and 40% of total transactions in our circuit in mid-November 2013. Coupled with a free 44-oz popcorn for everyone for the first five monthstheatres during fiscal 2021 were completed by registered members of the loyalty program. We believe that this program (subsequently offered onlycontributes to ourincreased movie-going frequency, more frequent visits to the concession stand, increased loyalty to Marcus Theatres and, ultimately, improved operating results.members)for seniors on Friday afternoons. We believe these promotions have increased movie going frequency and an aggressive marketing campaign, our goal was to increase overall attendance by reaching mid-week value customersreached a customer who may have reduced their movie-going frequency or stopped going to the movies because of price. We have seen our Tuesday attendance increase dramatically since the introduction of the $5 Tuesday promotion. We believe this promotion has created another “weekend” day for us,price, without adversely impacting the movie-going habits of our regular weekend customers. The newly-acquired WehrenbergDuring fiscal 2021, we introduced Marcus Private Cinema (“MPC”), a program that allows guests the opportunity to purchase an entire auditorium for up to 20 of his or her friends and family for a fixed charge. Conversely, we charge a higher ticket price for PLF screens and have recently tested higher pricing on Friday andoffered a discounted price on Tuesday nights, but we immediately introducedclosed due to the COVID-19 pandemic, consisting of one former budget-oriented theatre and two Movie Tavern theatres with leases that were expiring within the next year.$5 Tuesday promotion with the free popcorn for loyalty members upon acquiring thetheatres to keep them fresh. To maintain our existing theatres and have experienced an increaseaccomplish the strategies noted above and below, we currently anticipate that our fiscal 2022 capital expenditures in Tuesday performance at thesethis division will total approximately $15 - $20 million.a result. We also offer a “$6 Student Thursday” promotion at 36 locations that has been well received by that particular customer segment.Loyalty program. We launched a new, what we believe to be best-in-class, customer loyalty program called Magical Movie Rewards on March 30, 2014. Designed to enhancepart of our initial test of this strategy.movie-goingoverall experience for our customers,guests. This strategy will include targeting future movie-goers with relevant and desired experiences through new and creative marketing approaches, including the responseuse of technology to this program has exceeded our expectations. We currently have approximately 2.6 million members enrolled in the program. Approximately 45% of all transactions in our theatres during fiscal 2017 were completed by registered members of the loyalty program. The program allows memberstailor communications to earn points for each dollar spent and access special offers available only to members. The rewards are redeemable at the box office, concession stand or at the many Marcus Theatres food and beverage venues. In addition,individual guest preferences. For example, we have partnered with Movio, a global leader in data analysis for the cinema industry, to allow more targeted communication with our loyalty members. The software provides us with insight into customer preferences, attendance habits and general demographics, which we believe will help us deliver customized communication to our members. In turn, members of this program can enjoy and plan for a more personalized movie-going experience.this will result in increased movie-going frequency, more frequent visitswe are geographically constrained, and we believe that we may be able to the concession stand, increased loyaltyadd value to Marcus Theatrescertain theatres through our various proprietary amenities and ultimately, improved operating results. The acquired Wehrenberg theatres offered a loyalty program to their customers that had approximately 200,000 members. We converted these members to our Magical Movie Rewards program during fiscal 2017.37Technology enhancementsenhancedalways been, and will continue to be, focused on improving the quality of the guest experience, our mobile ticketing capabilitiesportfolio of assets, and addedour associate working environment, with a long-term view of financial success and profitability. During fiscal 2022 and beyond, we expect to executeMagical Movie Rewards loyalty programdivision’s revenues and profits. Our focus will shift from rebuilding in fiscal 2021 to accelerating excellence in fiscal 2022, with guest experience at the forefront. Strategies will include leveraging our downloadablefood and beverage expertise to further distinguish us from our competition. In addition to rebuilding our banquet and catering business as group demand improves, we will leverage hotel food and beverage concepts developed by our Marcus Theatres mobile application. We have redesigned ourmarcustheatres.com website and continued to install additional theatre-level technology,Restaurant Group, featuring premier brands such as new ticketing kiosksMason Street Grill, ChopHouse®, Miller Time®Pub & Grill and SafeHouse restaurants.digital menu boardsrevenue management strategies designed to further increase our profitability. The priority will be to further accelerate the pace of the recovery from the COVID-19 pandemic, focusing on leveraging strong leisure demand, driving average daily rate, rebuilding group demand and concession advertising monitors. Each of thesegrowing ancillary revenues. is designed to improve customer interactions both at the theatre and through mobile platforms and other electronic devices.iThe addition of digital technology throughout our circuit (we offer digital cinema projection on 100% of our first-run screens) has provided us with additional opportunities to obtain non-motion picture programming from other new and existing content providers, including live and pre-recorded performances of the Metropolitan Opera, as well as sports, music and other events, at many of our locations. We offer weekday alternate programming at many of our theatres across our circuit. The special programming includes classic movies, live performances, comedy shows and children’s performances. We believe this type of programming is more impactful when presented on the big screen and provides an opportunity to continue to expand our audience base beyond traditional moviegoers.iIn addition, digital 3D presentation of films continued to positively contribute to our box office receipts during the periods presented in this Annual Report on Form 10-K. As of December 28, 2017, we had the ability to offer digital 3D presentations in 259, or approximately 31%, of our first-run screens, including the vast majority of ourUltraScreens. We have the ability to increase the number of digital 3D capable screens we offer to our guests in the future as needed, based on the number of digital 3D films anticipated to be released during future periods and our customers’ response to these 3D releases.Hotelscustomer touch points.ResortsiOur hotels and resorts division is actively seeking opportunities to increase the number of rooms under management. The goal of our hotel investment business, MCS Capital, under the direction of a well-respected industry veteran with extensive hotel acquisition and development experience, is to seek opportunities where we may act as an investment fund sponsor, joint venture partner or sole investor in acquiring additional hotel properties. We continue to believe that opportunities to acquire high-quality hotels at reasonable valuations will be present in the future for well-capitalized companies, and we believe that there are partners available to work with us when the appropriate hotel assets are identified. We have a number of potential growth opportunities that we are evaluating.iWe also continue to pursue additional management contracts for other owners, some of which may include small equity investments similar to the investments we have made in the past with strategic equity partners. Although total revenues from an individual hotel management contract are significantly less than from an owned hotel, the operating margins are generally significantly higher due to the fact that all direct costs of operating the property are typically borne by the owner of the property. Management contracts provide us with an opportunity to increase our total number of managed rooms without a significant investment, thereby increasing our returns on equity. During fiscal 2016, we expanded our hotel development team with the addition of a senior executive experienced in business development, marketing, feasibility and valuation. During the Transition Period, we became a minority investor and manager of the new Omaha Marriott Downtown at The Capitol District hotel in Omaha, Nebraska – the hotel opened in August 2017. In September 2017, we assumed management of the Sheraton Chapel Hill Hotel in Chapel Hill, North Carolina. In January 2018, we assumed management of the newly-opened Murieta Inn and Spa in Rancho Murieta, California.38iUnlike our theatre assets, where the majority of our return on investment comes from the annual cash flow generated by operations, a portion of the return on our hotel investments is derived from effective portfolio management, which includes determining the proper branding strategy for a given asset along with the proper level of investment and upgrades, as well as identifying an effective divestiture strategy for the asset when appropriate. During fiscal 2015, we converted our company-owned Four Points by Sheraton Chicago Downtown/Magnificent Mile property into one of the first AC Hotels by Marriott in the United States. In January 2018, we announced plans to convert one of our owned hotels, the InterContinental Milwaukee, into an independent arts hotel by mid-2019. Conversely, 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 of approximately $300,000. 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 of approximately $4.9 million.iWe have been very opportunistic in our past hotel investments as we have, on many occasions, acquired assets at favorable terms and then improved the properties and operations to create value. We also will continue to periodically explore opportunities to monetize one or more owned hotels. 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. We evaluate strategies for our hotels on an asset-by-asset basis. We have not set a specific goal for the number of hotels that may be considered for this strategy, nor have we set a specific timetable. It is very possible that we may sell a particular hotel or hotels during fiscal 2018 or beyond if we determine that such action is in the best interest of our shareholders. In October 2015, we sold the Hotel Phillips in Kansas City, Missouri for $13.1 million of net proceeds. The Hotel Phillips was the smallest of our company-owned hotels, both in revenues and operating income.iOur fiscal 2018 plans for our hotels and resorts division also include continued reinvestment in our existing properties to maintain and enhance their value. During fiscal 2016, we made additional reinvestments in The Skirvin Hilton hotel, and we expanded our centralized laundry facility in order to increase our capacity to serve non-company owned businesses. During fiscal 2017, we added 29 spacious, all-season villas to the Grand Geneva Resort & Spa in Lake Geneva, Wisconsin. This multi-million dollar investment was designed to enhance the resort experience for travelers who want expanded, upscale accommodations and increased our total combined units at this top Midwest destination property to more than 600 (including the Timber Ridge Lodge). During fiscal 2018, we plan to make additional reinvestments in the Hilton Madison at Monona Terrace. Including possible growth opportunities currently being evaluated, we believe our total fiscal 2018 hotels and resorts capital expenditures may total approximately $15 $20 million, excluding any additional presently unidentified acquisitions.iIn addition to the growth strategies described above, our hotels and resorts division continues to focus on several strategies that are intended to further grow the division’s revenues and profits. These include leveraging our food and beverage expertise for growth opportunities and growing our catering and events revenues. Early in the Transition Period, we purchased theSafeHouse in Milwaukee, Wisconsin, adding another restaurant brand to our portfolio. TheSafeHouse is an iconic, spy-themed restaurant and bar that has operated in Milwaukee for nearly 50 years. During fiscal 2016, we completed a significant renovation of the MilwaukeeSafeHouse and began construction on a newSafeHouse restaurant and bar in downtown Chicago, Illinois, adjacent to our AC Chicago Downtown Hotel. The new location opened on March 1, 2017. We also opened a complimentary business capitalizing on the popularity of team escape games, theEscapeHouse Chicago, in November 2016, next door to the newSafeHouse. Our current focus is on ensuring the success of our newSafeHouse, but we anticipate exploring additional opportunities to expand this concept in the future.39iWe have also invested in sales, revenue management and internet marketing strategies in an effort to further increase our profitability, as well as human resource and cost improvement strategies designed to achieve operational excellence and improved operating margins. We are focused on developing our customer service delivery and technology enhancements to improve customer interactions through mobile platforms and other customer touch points.iWe have taken our highly regarded web development team and created a new business unit to be managed by the hotels and resorts division called Graydient Creative. Graydient leverages our expertise in digital marketing, creating a new profit center for the division by seeking new external customers. Services provided by Graydient include, but are not limited to, website design and development, branding and print design, and social media management.iWe periodically review opportunities to make investments in long-term growth opportunities that may not be entirely related to our two primary businesses. During the Transition Period, we purchased a riverfront parcel of land in downtown Milwaukee with significant development potential. The land purchase was part of an Internal Revenue Code §1031 tax-deferred like-kind exchange in conjunction with our sale of the Hotel Phillips. Various plans for a mixed-use development that are under consideration for this parcel include a movie theatre, office space and retail. In addition, during fiscal 2016, the city of Milwaukee requested proposals for a parcel of land across the street from our Hilton Milwaukee City Center hotel. We responded to that request with a proposed plan for a mixed-use project that would expand the number of rooms operated by the Hilton, add a residential component and provide a transit center for a city-proposed streetcar extension. This was a preliminary proposal and an expansion of the city’s convention center would be a prerequisite for any action on this proposal, if our proposal were to be selected by the city. Both of the above-described projects have many open issues that would have to be resolved before we would move forward and we would consider bringing on a partner or partners on these projects if they were to proceed. We do not expect any substantial capital expenditures to be incurred on our part for these projects during fiscal 2018.iIn addition to operational and growth strategies in our operating divisions, we continue to seek additional opportunities to enhance shareholder value, including strategies related to our dividend policy, share repurchases and asset divestitures. We increased our regular quarterly common stock cash dividend by 10.5% during the fourth quarter of fiscal 2015, another 7.1% during the first quarter of fiscal 2016, 11.1% during the first quarter of fiscal 2017 and 20.0% during the first quarter of fiscal 2018. We also have repurchased approximately 3.9 million shares of our common stock during the last six-plus fiscal years under our existing Board of Directors stock repurchase authorizations. We will also continue to evaluate opportunities to sell real estate when appropriate, allowing us to benefit from the underlying value of our real estate assets. When possible, we will attempt to avail ourselves of the provisions of Internal Revenue Code §1031 related to tax-deferred like-kind exchange transactions. In addition to the sale of a former theatre parcel in Madison, Wisconsin and/or selected hotels in our portfolio, we plan to evaluate opportunities to sell additional out-parcels at several owned theatre developments, as well as other non-operating and/or non-performing real estate in our portfolio.economicCOVID-19 pandemic conditions, our financial performance and available capital, the competitive environment, evolving customer needs and trends, and the availability of attractive acquisition and investment opportunities. It is likely that our growth goals and strategies will continue to evolve and change in response to these and other factors, and there can be no assurance that we will achieve our current goals. Each of our goals and strategies are subject to the various risk factors discussed above in this Annual Report on Form 10-K.40TheatresF21 v. F20 F20 v. F19 F2021 F2020 Amt. Pct. F2019 Amt. Pct. Revenues $ 458.2 $ 237.7 $ 220.6 92.8 % $ 820.9 $ (583.2) (71.0) % Operating income (loss) (41.5) (178.4) 137.0 76.8 % 68.2 (246.6) (361.7) % Other income (expense), net (17.5) (17.4) (0.2) (1.1) % (13.8) (3.6) (26.3) % Net earnings attributable to noncontrolling interests — — — — % 0.1 (0.1) (123.5) % Net earnings (loss) attributable to The Marcus Corporation $ (43.3) $ (124.8) $ 81.6 65.3 % $ 42.1 $ (167.0) (396.4) % Net earnings (loss) per common share - diluted $ (1.42) $ (4.13) $ 2.71 65.6 % $ 1.35 $ (5.48) (405.9) % contributed: (i) 64.4%contributed 59.2% of our consolidated revenues and 86.3%127.0% of our consolidated operating income,loss, excluding corporate items, during fiscal 2017,2021, compared to 60.3%55.8% and 83.1%73.5%, respectively, during fiscal 20162020 and 57.7%67.9% and 82.8%88.4%, respectively, during fiscal 2015C; (ii) 56.4% and 68.2%, respectively, during2019. As of December 30, 2021, the Transition Period, compared to 51.8% and 65.3%, respectively, during the prior year comparable period; and (iii) 55.2% and 83.8%, respectively, during fiscal 2015, compared to 54.3% and 74.3%, respectively, during fiscal 2014. The theatre division operatesoperated motion picture theatres in Wisconsin, Illinois, Iowa, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Arkansas, Colorado, Georgia, Kentucky, Louisiana, New York, Pennsylvania, Texas and Ohio,Virginia, a family entertainment center in Wisconsin and a retail center in Missouri.Wisconsin. The following tables set forth revenues, operating income (loss), operating margin, screens and theatre locations for fiscal 2017, fiscal 2016, the unaudited prior year comparable 53-week period ended December 31, 2015 (F2015C), the Transition Period (TP), the unaudited prior year comparable 30-week period ended December 25, 2014 (PY), and the prior twolast three fiscal years: Change F17 v. F16 Change F16 v. F15C F2017 F2016 Amt. Pct. F2015C Amt. Pct. (in millions, except percentages) Revenues $ 401.3 $ 328.2 $ 73.1 22.3 % $ 306.7 $ 21.5 7.0 % Operating income $ 80.3 $ 71.8 $ 8.5 11.9 % $ 62.9 $ 8.9 14.1 % Operating margin 20.0 % 21.9 % 20.5 % Change TP v. PY TP PY Amt. Pct. (in millions, except percentages) Revenues $ 182.8 $ 145.3 $ 37.5 25.8 % Operating income $ 37.2 $ 27.7 $ 9.5 34.1 % Operating margin 20.3 % 19.1 % Change F15 v. F14 F2015 F2014 Amt. Pct. (in millions, except percentages) Revenues $ 269.2 $ 243.2 $ 26.0 10.7 % Operating income $ 53.5 $ 46.5 $ 7.0 15.1 % Operating margin 19.9 % 19.1 % Number of screens and locations at period-end(1)(2) F2017 F2016 TP F2015 F2014 Theatre screens 895 885 668 681 685 Theatre locations 69 68 53 55 55 Average screens per location 13.0 13.0 12.6 12.4 12.5 (1)Includes 11 screens at two locations managed for other owners in all five periods.(2)Includes 29 budget screens at three locations at the end of fiscal 2017, 25 budget screens at three locations at the end of fiscal 2016, 15 budget screens at two locations at the end of the Transition Period and 28 budget screens at four locations in the two prior years. Compared to first-run theatres, budget theatres generally have lower box office revenues and associated film costs, but higher concession sales as a percentage of box office revenues.41F21 v. F20 F20 v. F19 F2021 F2020 Amt. Pct. F2019 Amt. Pct. (in millions, except percentages) Revenues $ 271.2 $ 132.6 $ 138.6 104.5 % $ 557.1 $ (424.5) (76.2) % Operating income (loss) $ (27.6) $ (121.4) $ 93.9 77.3 % $ 76.9 $ (198.3) (257.9) % Operating margin (10.2) % (91.6) % 13.8 % F2021 F2020 F2019 Theatre screens 1,064 1,097 1,106 Theatre locations 85 89 91 Average screens per location 12.5 12.3 12.2 tables providetable provides a further breakdown of the components of revenues for the theatre division for fiscal 2017, fiscal 2016, the unaudited prior year comparable 53-week period ended December 31, 2015 (F2015C), the Transition Period (TP), the unaudited comparable prior year 30-week period ended December 25, 2014 (PY) and the prior twolast three fiscal years: Change F17 v. F16 Change F16 v. F15C F2017 F2016 Amt. Pct. F2015C Amt. Pct. (in millions, except percentages) Box office revenues $ 227.1 $ 186.8 $ 40.3 21.6 % $ 176.3 $ 10.5 6.0 % Concession revenues 149.0 121.0 28.0 23.2 % 115.1 5.9 5.1 % Other revenues 25.2 20.4 4.8 23.5 % 15.3 5.1 33.3 % Total revenues $ 401.3 $ 328.2 $ 73.1 22.3 % $ 306.7 $ 21.5 7.0 % TP PY Amt. Pct. (in millions, except percentages) Box office revenues $ 104.6 $ 85.6 $ 19.0 22.2 % Concession revenues 69.2 52.9 16.3 30.9 % Other revenues 9.0 6.8 2.2 31.5 % Total revenues $ 182.8 $ 145.3 $ 37.5 25.8 % Change F15 v. F14 F2015 F2014 Amt. Pct. (in millions, except percentages) Box office revenues $ 157.3 $ 146.0 $ 11.3 7.7 % Concession revenues 98.7 84.1 14.6 17.5 % Other revenues 13.2 13.1 0.1 0.7 % Total revenues $ 269.2 $ 243.2 $ 26.0 10.7 % F21 v. F20 F20 v. F19 F2021 F2020 Amt. Pct. F2019 Amt. Pct. (in millions, except percentages) Admission revenues $ 130.7 $ 64.8 $ 65.9 101.7 % $ 284.1 $ (219.3) (77.2) % Concession revenues 118.7 56.7 62.0 109.2 % 231.2 (174.5) (75.5) % Other revenues 21.8 10.8 11.0 102.1 % 40.8 (30.1) (73.6) % 271.2 132.3 138.9 105.0 % 556.2 (423.9) (76.2) % Cost reimbursements 0.1 0.3 (0.2) (72.8) % 0.9 (0.6) (63.1) % Total revenues $ 271.2 $ 132.6 $ 138.6 104.5 % $ 557.1 $ (424.5) (76.2) % 20172021 versus Fiscal 2016fiscal 2017 revenues increased by 22.3%and operating loss decreased significantly during fiscal 2021 compared to fiscal 20162020 due in large part to the Marcus Wehrenberg theatresfact that we acquiredtemporary closed all of our theatres on March 17, 2020 in response to the COVID-19 pandemic. Increased revenues during the fiscal 2021 fourth quarter of fiscal 2016 and new theatres we opened during fiscal 2016 and 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 fiscal 2017 compared to fiscal 2016. Excluding the Marcus Wehrenberg theatres and three theatres that we opened during fiscal 2016 and fiscal 2017, comparable theatre division revenues decreased by 0.8% during fiscal 2017 compared to the prior year.On December 16, 2016,year also contributed to our improved theatre division operating performance during fiscal 2021 compared to fiscal 2020. Despite the favorable comparisons to fiscal 2020, all of our theatres continued to operate with significantly reduced attendance during fiscal 2021 compared to pre-pandemic levels.acquired 14 owned and/or leased moviereported were the result of five parking lot cinemas opened during the second quarter, curbside sales of popcorn, pizza and other food items and restaurant takeout sales from our three Zaffiro’s restaurants and bars. Over the seven-day period between August 21 and August 28, 2020, we reopened a majority of our theatres in Missouri, Iowa, Illinoisconjunction with the release of several new films, resulting in a total of 72 reopened theatres, representing 80% of our company-owned theatres. In October 2020, we temporarily closed several theatres due to changes in the release schedule for new films, reducing our percentage of theatres open to approximately 66%. In November and Minnesota, alongDecember 2020, new state and local restrictions in several of our markets required us to temporarily reclose several theatres, further negatively impacting our fiscal 2020 results. Even when open, all of our reopened theatres were operating at significantly reduced attendance levels in fiscal 2020, further negatively impacting our fiscal 2020 operating loss.Ronnie’s Plaza, an 84,000 square foot retail center approximately 52% of our theatres open. As state and local restrictions were eased in St. Louis, Missouri, from Wehrenbergseveral of our markets and its affiliated entities for a purchase priceseveral new films were released by movie studios, we gradually reopened theatres, ending the fiscal 2021 first quarter with approximately 74% of our theatres open, ending the fiscal 2021 second quarter with approximately 95% of our theatres open and ending the fiscal 2021 third and fourth quarters with all of$65$5.8 million plus normal closing adjustments and less a negative net working capital balanceprimarily related to surplus real estate that we assumed inintend to sell. Conversely, nonrecurring state government grants from five states and federal tax credits totaling approximately $7.2 million for COVID-19 relief favorably impacted our theatre division operating loss during fiscal 2021.transaction. We fundedfive-plus months our theatres were closed during fiscal 2020 primarily reflected costs that remained after we temporarily closed all of our theatres and laid off the transaction using available borrowings undervast majority of our existing credit facility. In conjunction with this transaction, we acquired the underlying real estate for sixhourly theatre staff, as well as a portion of theour corporate staff. These costs included a certain number of salaried theatre locationsmanagement staff as well as the retail center.remaining corporate staff, all of whom were subject to a reduction in pay. Additional ongoing costs included utilities and repairs and maintenance (both at reduced levels), rent, property taxes and depreciation. During the last month of our fiscal 2020 third quarter, we brought back an appropriate level of theatre and corporate staff to meet anticipated reduced levels of initial new film supply and customer demand in our recently reopened theatres. Our theatre division operating results during fiscal 2020 were negatively impacted by nonrecurring expenses totaling approximately $5.8 million related to expenses incurred (primarily payroll continuation payments to employees temporarily laid off) due to the closing of all of our movie theatres during the first quarter and subsequent costs incurred for cleaning, supply purchases and employee training, among other items, related to the reopening of our theatre properties and implementing new operating protocols. Impairment charges reported during fiscal 2020 related to intangible assets and several theatre locations also negatively impacted our theatre division fiscal 2020 operating loss by approximately $24.7 million. Conversely, our operating loss during fiscal 2020 was favorably impacted by approximately $5.8 million of state government grants awarded from seven states for COVID-19 relief. The remaining leased locations include several leases that have been classified as capital leases. Nineadditional week of the 14 acquired Wehrenberg theatres operate in the greater St. Louis area. The Marcus Wehrenberg theatres contributed approximately $5.1 million and $(450,000), respectively, tooperations favorably impacted our theatre division revenues and operating income for the two weeks that we owned them during fiscal 2016. The2020 by approximately $2.6 million and did not have a material impact on our operating loss fromloss.acquired theatres is due to approximately $2.0 million in one-time acquisition-related expenses.42Totalmajority of our rent payments during our fiscal 2020 second quarter. While the results of negotiations varied by theatre, attendance increased 19.1% and total box office receipts increased 21.6% during fiscal 2017 compared to fiscal 2016. Excluding the Marcus Wehrenberg theatres, three theatres that we opened during fiscal 2016 and fiscal 2017, and two theatres that are no longer comparable to last year because their pricing policies were significantly changed as amost common result of new theatresthese discussions was a deferral of rent payments for April, May and June, with repayment generally occurring in subsequent periods, most often beginning in calendar 2021.opened nearby, fiscal 2017 attendance and box office receipts atbelieve it is also beneficial to compare our comparable theatres decreased approximately 3.1% and 1.0%, respectively, comparedrevenues to the prior year.pre-pandemic levels. The following table indicates our percentage change in comparablecompares the components of revenues for the theatre attendance during eachdivision for fiscal 2021 to fiscal 2019:F21 v. F19 F2021 F2019 Amt. Pct. (in millions, except percentages) Admission revenues $ 130.7 $ 284.1 $ (153.4) (54.0) % Concession revenues 118.7 231.2 (112.6) (48.7) % Other revenues 21.8 40.8 (19.1) (46.7) % 271.2 556.2 (285.0) (51.2) % Cost reimbursements 0.1 0.9 (0.8) (90.0) % Total revenues $ 271.2 $ 557.1 $ (285.8) (51.3) % interim periods of fiscal 2017 comparedtheatre industry recovery and our ability to outperform the same periods during fiscal 2016. In addition,industry, the following table compares the percentage change in our fiscal 2017 box office2021 admissions revenues (compared to the prior year) to the corresponding percentage change in the United States box office receipts (excluding new builds for the top ten theatre circuits) during the same periodsrevenues (as compiled by us from data received from Rentrak,Comscore, a national box office reporting service for the theatre industry): Change F17 v. F16 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total Pct. change in Marcus theatre attendance +8.6 % -3.6 % -17.4 % +0.8 % -3.1 % Pct. change in Marcus box office revenues +9.1 % -4.1 % -15.6 % +6.9 % -1.0 % Pct. change in U.S. box office revenues +7.0 % -4.8 % -13.4 % +1.7 % -2.6 % Marcus outperformance v. U.S. +2.1 pts +0.7 pts -2.2 pts +5.2 pts +1.6 pts We during each quarter of fiscal 2021 compared to the same quarter during fiscal 2019:F21 v. F19 Total Pct. change in Marcus admission revenues -81.9 % -70.0 % -45.2 % -21.4 % -54.0 % Pct. change in U.S. box office revenues -89.7 % -73.9 % -52.8 % -23.5 % -59.6 % Marcus performance vs. U.S. +7.8 pts +3.9 pts +7.6 pts +2.1 pts +5.6 pts 20172021 compared to fiscal 2019 by 1.65.6 percentage points, andpoints. Based upon this metric, we believe we have outperformed the industry during 14been one of the last 16 quarters. We believetop performing theatre circuits during fiscal 2021 of the top 10 circuits in the U.S. Additional data received and compiled by us from Comscore indicates our underperformanceadmission revenues during fiscal 2021 represented approximately 3.5% of the total admission revenues in the U.S. during the thirdperiod (commonly referred to as market share in our industry). This represents a notable increase over our reported market share of approximately 3.2% during the comparable fiscal 2019 period, prior to the pandemic. Closed theatres in other markets in the U.S. partially contributed to our outperformance, particularly during the first quarter of fiscal 2017 was an anomaly, as evidenced by the fact that we outperformed the industry by over five percentage points during the fourth quarter of fiscal 2017.2021. We also believe our continued overall outperformance of the industry ishas been attributable to the investments we have made in new features and amenities in selectour theatres and our implementation of innovative operating, pricing and marketing strategies that have increased attendance includingrelative to our $5 Tuesday promotion andpeers, particularly at our customer loyalty program (allrecently acquired Movie Tavern locations. Our goal is to continue our past pattern of which are described in the “Current Plans” section of this MD&A).Theatre attendance and corresponding box office revenues vary significantly from quarter to quarter due to a variety of factors. As evidenced by the change in United States box office revenues, our fiscal 2017 first and fourth quarter box office revenues and attendance were impacted by a stronger slate of movies compared to the same quarters during fiscal 2016. Conversely, our fiscal 2017 second and third quarter box office revenues and attendance were impacted by a weaker slate of movies compared to the same quarters during fiscal 2016.The third quarter was a very difficult period foroutperforming the industry, but with ten straight weeksthe majority of decreasedour renovations now completed, our ability to do so in any given quarter will likely be partially dependent upon film mix, weather and the competitive landscape in our markets. box office receipts in July and August, before ending with three strong weeks in September. 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. Conversely, a stronger slate of moviesoutperformance, particularly during the first quarter of fiscal 2017, including2021 when more governmental restrictions were in place and the second best performingvaccine rollout was in its early stages. Under this program, a guest may purchase an entire auditorium for up to 20 of his or her friends and family for a fixed charge, ranging from $99 to $275 (depending upon the film and number of weeks it has been in theatres). At its peak during the majority of the weeks during our fiscal 2021 first quarter, we averaged over 1,500 MPC events per week, accounting for approximately 21% of our admission revenues during those weeks.Beauty and the Beastnumber of new films released was greatly reduced, resulting in increases in both admission revenues and concession revenues. Conversely, a decrease in the number of new films, the lack of awareness of theatres being open (due in part to limited new film advertising), ongoing state and local capacity restrictions and customer concerns regarding visiting indoor businesses, all negatively impacted attendance during fiscal 2021 as compared to fiscal 2019. As described above, attendance from MPC events (estimated to average 13 guests per event) partially offset the reduction in traditional movie going attendance, particularly during the fiscal 2021 first quarter.2017, including2021.top performingU.S. and the world as a result of the ongoing COVID-19 pandemic, has solidified in recent months. With strong performances from several recent films, film studios have shown an increased willingness to begin releasing many of the new films that had previously been delayed. Several films that have contributed to our early fiscal 2022 first quarter results include Spider-Man: No Way Home, Sing 2, American Underdog, Scream, Jackass Forever, Death on the Nile, and Uncharted. Although it is possible that more schedule changes may occur, new films scheduled to be released during the remainder of fiscal 2017,Star Wars:2022 that have potential to perform very well include The Batman, Morbius, Sonic the Hedgehog 2, Ambulance, Fantastic Beasts: The Secrets of Dumbledore, Doctor Strange in the Multiverse of Madness, Downton Abbey: A New Era, DC Super Pets, Top Gun: Maverick, Jurassic World: Dominion, Lightyear, Minions: The Rise of Gru, Thor: Love and Thunder, Bullet Train, Where the Crawdads Sing, Black Adam, Puss In Boots: The Last JediWish, contributed toSpider-Man: Across the improvement in attendanceSpider-Verse, Halloween Ends, The Flash, Black Panther: Wakanda Forever, Creed III, Avatar 2, Aquaman 2 and box office performance during those periods compared to the same periodsMario. We believe that with a greater percentage of the prior year.43a reasonably lengthy “window”appropriate “windows” between the date a film is released in theatres and the date a filmmotion picture is released to other channels, including premium video-on-demand (“PVOD”), video on-demand (VOD)(“VOD”), streaming services and DVD. These are factors over which we have no control. The national DVDcontrol (see additional detail in the “Impact of COVID-19 Pandemic” section above). We currently believe that “day-and-date” film release window decreasedexperiments such as those tested by Warner Brothers and Disney during calendar 2017 to 104 days compared to2021 will not become the approximately 110-130 days that had been in place fornorm as the previous ten or more calendar years. Many current films are now released to ancillary markets within 75-90 days, and more than one studiopandemic fully subsides. Warner Brothers has been discussing their interest in creating a new, shorter premium VOD window. We have expressed our concerns to the studios regarding the impact that a shortened DVD or VOD release window may have on future box office receipts. We have alsoalready indicated that we would seek adjustments in it intends to return to an exclusive 45-day theatrical window with a significant number of its films during fiscal 2022. Aftercurrent financial arrangements we have with film studios insuccess of the eventexclusive theatrical release of Shang-Chi and the Legend of the Ten Rings, Disney announced that the remainder of its fiscal 2021 films would receive an exclusive theatrical window as well. Disney announced in early 2022 that they will retain flexibility for future film studios implement shorter release windows.We believedistribution, particularly for family films, which have been impacted more significantly by the pandemic.most significant factor contributingnext year. One former budget-oriented theatre was converted to variations in theatre attendancefirst-run during fiscal 2017,2021 and as in other periods, was the quantity and qualitya result, we no longer operate any budget-oriented theatres. One of films released during the respective periods compared to the films released during the same periods of the prior year. Blockbusters (generally defined as films grossing more than $100 million nationally) accounted for a slightly decreased percentage of our total box office revenues during fiscal 2017, with our top 15 performing films accounting for 41% of our fiscal 2017 box office revenues compared to 43% during fiscal 2016. The following five top performing fiscal 2017 films accounted for nearly 20% of the total box office revenues for our circuit:Star Wars: The Last Jedi,Beauty and the Beast,Guardians of the Galaxy Vol. 2,It andWonder Woman.The quantity of wide-release films shown in our theatres and number of wide-release films provided by the seven major studios decreased during fiscal 2017 compared to fiscal 2016. A film is generally considered “wide release” if it is shown on over 600 screens nationally, and these films generally have the greatest impact on box office receipts. We played 124 wide-release films (including 34 digital 3D films) at our theatres during fiscal 2017 compared to 133 wide-release films (including 33 digital 3D films) during fiscal 2016. In total, we played 264 films and 170 alternate content attractions at our theatres during fiscal 2017 compared to 253 films and 144 alternate content attractions during fiscal 2016. Based upon projected film and alternate content availability, we currently estimate that we may show an increased number of films and alternate content events on our screens during fiscal 2018 compared to fiscal 2017. There are currently approximately 24 digital 3D films scheduled to be released by the film industry during our fiscal 2018, although we anticipate that additional 3D films may be announced at a later date.Excluding the Marcus Wehrenberg theatres our average ticket price increased 2.6%that we reopened in May 2021 completed a renovation during fiscal 2017 compared to fiscal 2016. The increase in our average ticket price contributed approximately $3.9 million to our comparable theatres box office receipts during fiscal 2017 compared to fiscal 2016, partially offsetting the impact of reduced attendance at comparable theatres during fiscal 2017. The increase was partially attributable to modest price increases we implemented in November 2016 and October 2017. In addition, the fact2021 that we have increased our number of premium large format (PLF) screens, with a corresponding price premium, also contributed to our increased average ticket price during fiscal 2017. We also believe that a change in film product mix had a favorable impact on our average ticket price during fiscal 2017, as two of our top three films during fiscal 2016 were animated family movies (resulting in a higher percentage of lower-priced children’s tickets sold, compared to more adult-oriented and R-rated films that typically result in a higher average ticket price), compared to no animated family films among the top five films during fiscal 2017 and a particularly strong performance ofStar Wars: The Last Jedi in our PLF auditoriums. Conversely, the percentage of our total box office receipts attributable to 3D presentations during fiscal 2017 decreased compared to the percentage of our total box office receipts attributable to 3D presentations during fiscal 2016, meaning that 3D films had an unfavorable impact on our change in average ticket price during fiscal 2017 (a lower percentage of 3D films may result in a lower average ticket price due to the premium price associated with 3D). We currently expect our average ticket price to increase during fiscal 2018, driven in part by our increased number of PLF screens that generate premium pricing, a modest price increase we introduced in October 2017 and the fact that we have been introducing modest increases in pricing to selected Marcus Wehrenberg theatres after we introduce ouradded DreamLounger recliner seating, to those theatres.44Our average concession sales per person at comparable theatres (excluding the Marcus Wehrenberg theatres) increased 5.1% during fiscal 2017 compared to fiscal 2016. Pricing, concession/food and beverage product mix and film product mix are the three primary factors that impact our concession sales per person. A change in concession product mix, including increased sales of higher priced non-traditional food and beverage items from our increasing number ofTake Five Lounges,Zaffiro’s Express andReel Sizzle outlets, as well as modest selected price increases we introduced in November 2016October 2017, were the primary reasons for our increased average concession sales per person during fiscal 2017. We currently expect to report increases in our average concession sales per person during fiscal 2018 compared to fiscal 2017 due to our increased number of non-traditional food and beverageTake FiveSM Lounge outlets, and the modest price increases introduced in October 2017, although as noted above, several factors may impact our actual results in this key metric. Excluding the impact of the Wehrenberg theatres and new screens added during fiscal 2017, the increase in average concession sales per person contributed approximately $4.6 million to our comparable theatres concession revenues during fiscal 2017 compared to fiscal 2016, offsetting the impact of reduced attendance at comparable theatres during fiscal 2017.Our theatre division operating income increased during fiscal 2017 compared to fiscal 2016 due primarily to operating income from the acquired Marcus Wehrenberg theatres. Decreased attendance at comparable theatres described above and preopening expenses of approximately $800,000 related to the opening of two new theatres negatively impacted our operating income during fiscal 2017. Our theatre division revenues and operating income during fiscal 2017 were also negatively impacted by the fact that we had anywhere from 14 to 40 screens out of service from March through mid-November during fiscal 2017 due to renovations underway at multiple theatres. In addition, comparisons to operating income during fiscal 2016 were negatively impacted by the fact that our fiscal 2016 operating results included a significant one-time incentive payment from our pre-show advertising provider. Conversely, fiscal 2016 operating income was negatively impacted by one-time transaction costs related to the Wehrenberg acquisition.Operating margin for our theatre division decreased to 20.0% for fiscal 2017, compared to 21.9% for fiscal 2016. The aforementioned preopening expenses, in conjunction with the weaker film slate during fiscal 2017 and higher fixed costs, such as depreciation and amortization, rent and property taxes, due in part to the Wehrenberg acquisition, negatively impacted our theatre division operating margins during fiscal 2017 compared to fiscal 2016. Decreased attendance generally negatively impacts our operating margin, particularly because the decreased attendance has the effect of decreasing our high-margin concession revenues and because fixed expenses become a higher percentage of revenues. In addition, if a greater portion of our concession revenues is the result of the sale of non-traditional food and beverage items that typically have a higher product cost compared to traditional concession items, operating margins may be negatively impacted to a small extent. Excluding preopening expenses from the two new theatres added in fiscal 2017 and the one-time incentive payment and transaction costs in fiscal 2016, our theatre division operating margin during fiscal 2017 was 20.2% compared to 21.5% during fiscal 2016. Film costs did not materially impact our operating margin during fiscal 2017 as compared to fiscal 2016.Other revenues, which include management fees, pre-show advertising income, family entertainment center revenues, surcharge revenues, rental income and gift card breakage income, may also impact operating margin. Other revenues increased by $4.8 million during fiscal 2017 compared to fiscal 2016. Excluding $5.2 million of other income related to the Marcus Wehrenberg theatres, including preshow advertising income, internet surcharge ticketing fees and rental income from the retail center described above, the remaining decrease in other revenues of approximately $400,000, or 2.0%, during fiscal 2017 was attributable to comparable theatres and was due entirely to the fact that during fiscal 2016, we received a significant one-time $3.3 million incentive payment from our current advertising provider, Screenvision. Despite that significant one-time benefit in fiscal 2016, our other income from comparable theatres nearly equaled last year’s total primarily due to an increase in preshow advertising income, internet surcharge ticketing fees and breakage on presold discounted tickets.We did not add any new screens to existing theatres during fiscal 2017. We opened two newUltraScreen DLX auditoriums at an existing theatre in Minnesota in February 2016 and two new screens at an existing theatre in Wisconsin in November 2016. As noted above, we also opened a new 16-screen theatre in Illinois in October 2016, a 10-screen theatre in Minnesota in April 2017 and an eight-screen theatre in Wisconsin in June 2017. We closed and sold one eight-screen budget-oriented theatre during the 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. We did not close any theatres during fiscal 2016.45Box office revenues at comparable theatres during the first quarter of fiscal 2018 through the date of this report have increased compared to the prior year comparable period due primarily to a stronger February film slate that included the blockbuster filmBlack Panther. In addition, strong performances from fiscal 2017 holdover films such asStar Wars; The Last Jedi,Jumanji: Welcome to the Jungle andThe Greatest Showman, as well as new films such asFifty Shades Freed,Peter Rabbit, andA Wrinkle in Time have contributed positively to our early fiscal 2018 results. Comparisons for the remainder of the quarter are expected to be difficult due to the strong performance ofBeauty and the Beastin mid-March last year. The expected film slate for the remainder of fiscal 2018 includes films from well-known series such asAvengers: Infinity War,Solo: A Star Wars Story,Deadpool 2,The Incredibles 2,Jurassic World: Fallen Kingdom,Ant Man and the Wasp,Hotel Transylvania 3,Mamma Mia! Here We Go Again,Mission: Impossible – Fallout,Mulan,Fantastic Beasts: The Crimes of Grindelwald,Aquaman andMary Poppins Returns. Generally, an increase in the quantity of films released, particularly from the seven major studios, increases the potential for more blockbusters in any given year, as does an increase in the quantity of films from established film series such as those listed above.Fiscal 2016 versus Fiscal 2015COur theatre division fiscal 2016 revenues and operating income increased by 7.0% and 14.1%, respectively, compared to fiscal 2015C due primarily to an increase in total theatre attendance at comparable theatres, an increase in our average ticket price, our continued expansion of non-traditional food and beverage items in our theatres, and an increase in pre-show advertising income, partially offset by the fact that fiscal 2015C included an additional week of operations. The additional week of operations, which included the week between Christmas and New Year’s Day in 2014 (historically, one of the busiest weeks of the year), contributed approximately $10.7 million and $4.2 million, respectively, to our theatre division revenues and operating income during fiscal 2015C. Excluding the additional week from our fiscal 2015C results, we estimate that our fiscal 2016 theatre division revenues and operating income would have increased by 10.9% and 22.2%, respectively, compared to a comparable 52-week year (including the acquired Wehrenberg theatres). Excluding the acquired Wehrenberg theatres during fiscal 2016 and the additional week of operations during fiscal 2015C, fiscal 2016 theatre division revenues increased 9.1% and operating income increased 22.9% compared to the prior year comparable theatres during a comparable 52-week year.On December 16, 2016, we acquired 14 owned and/or leased movie theatres in Missouri, Iowa, Illinois and Minnesota, along withRonnie’s Plaza, an 84,000 square foot retail center in St. Louis, Missouri, from Wehrenberg and its affiliated entities for a purchase price of approximately $65 million, plus normal closing adjustments and less a negative net working capital balance that we assumed in the transaction. We funded the transaction using available borrowings under our existing credit facility. In conjunction with this transaction, we acquired the underlying real estate for six of the theatre locations as well as the retail center. The remaining leased locations include several leases that have been classified as capital leases. Nine of the 14 acquired Wehrenberg theatres operate in the greater St. Louis area. The Wehrenberg theatres contributed approximately $5.1 million and $(450,000), respectively, to our theatre division revenues and operating income for the two weeks that we owned them during fiscal 2016. The operating loss from the acquired theatres is due to approximately $2.0 million in one-time acquisition related expenses.Total theatre attendance increased 1.9% during fiscal 2016 compared to fiscal 2015C. Excluding the recently acquired Wehrenberg theatres during fiscal 2016 and the additional week of operations during fiscal 2015C, fiscal 2016 attendance at our comparable theatres increased approximately 4.3% compared to the prior year. The following table indicates our percentage change in comparable theatre attendance during each of the interim periods of fiscal 2016 compared to the same periods during fiscal 2015C. In addition, the table compares the percentage change in our fiscal 2016 box office revenues (compared to the periods in fiscal 2015C that most closely align to this fiscal year on the calendar) to the corresponding percentage change in the United States box office receipts during the same periods (as compiled by us from data received from Rentrak, a national box office reporting service for the theatre industry). For attendance comparison purposes, percentage change data noted for the fourth quarter and total columns exclude the recently acquired Wehrenberg theatres during fiscal 2016 and the additional week of operations during fiscal 2015C. For comparisons to the national box office, we compared each quarter’s Marcus box office revenues (excluding the acquired theatres) to the weeks in fiscal 2015C that most closely align to this fiscal year on the calendar, including 13 weeks during the fourth quarter and 52 weeks for the total, in order to compare the same number of weeks:46 Change F16 v. F15C 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total Pct. change in Marcus theatre attendance +2.3% -6.9 % +14.7% +1.0% +4.3% Pct. change in Marcus box office revenues +19.1% -5.9 % +25.2% +3.2% +8.2% Pct. change in U.S. box office revenues +13.3% -10.4 % +14.7% -5.8 % +1.8% Marcus outperformance v. U.S. +5.8 pts +4.5 pts +10.5 pts +9.0 pts +6.4 pts We outperformed the industry during fiscal 2016 by over six percentage points. We believe our continued outperformance of the industry 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 that have increased attendance, including our $5 Tuesday promotion and our customer loyalty program (all of which are described in the “Current Plans” section of this MD&A).Theatre attendance and corresponding box office revenues vary significantly from quarter to quarter due to a variety of factors. As evidenced by the change in United States box office revenues, our fiscal 2016 first and third quarter box office revenues and attendance were impacted by a stronger slate of movies compared to the same quarters during fiscal 2015C. Conversely, our fiscal 2016 second and fourth quarter box office revenues and attendance were impacted by a weaker slate of movies compared to the same quarters during fiscal 2015C. Comparisons to the second quarter of fiscal 2015C were negatively impacted by the fact that Easter (a historically strong period for movies) was in March during fiscal 2016 and in April during fiscal 2015C. In addition, fiscal 2015C second quarter results were favorably impacted by one of the highest grossing domestic films of all time –Jurassic World. Comparisons to the fourth quarter of fiscal 2015C were negatively impacted by the fact that the prior year fourth quarter included the highest grossing domestic film of all time,Star Wars: The Force Awakens, although the strong performance ofRogue One: A Star Wars Story during the fourth quarter of fiscal 2016 lessened the impact of that difficult comparison.Conversely, a stronger slate of movies during the first quarter of fiscal 2016, including the surprise hitDeadpool and the strong holdover fromStar Wars: The Force Awakens, and during the third quarter of fiscal 2016, including strong animated filmsFinding Dory andThe Secret Life of Pets, contributed to the significant improvement in attendance and box office performance during those periods compared to the same periods of the prior year. We also believe a combination of several additional factors contributed to our increases in attendance and our above-described industry outperformance. In addition to the $5 Tuesday promotion that continued to perform better than the prior year comparable period, our fiscal 2016 attendance was favorably impacted by increased attendance at our theatres that have added our spacious new DreamLounger recliner seating during the past two and one-half years. We also continue to recognize the benefits of our previously-described customer loyalty program.We believe that the most significant factor contributing to variations in theatre attendance during fiscal 2016, as in other periods, was the quantity and quality of films released during the respective periods compared to the films released during the same periods of the prior year. Blockbusters accounted for a slightly decreased percentage of our total box office revenues during fiscal 2016, with our top 15 performing films accounting for 43% of our fiscal 2016 box office revenues compared to 44% during fiscal 2015C. The following five top performing fiscal 2016 films accounted for nearly 20% of the total box office revenues for our circuit:Rogue One: A Star Wars Story,Finding Dory,The Secret Life of Pets,Deadpool andCaptain America: Civil War. The top two films on this list,Rogue One: A Star Wars Story andFinding Dory, are currently the #7 and #8 highest grossing domestic films of all time. The fact that the top two performing films during fiscal 2015C,Star Wars: The Force Awakens andJurassic World, are currently the #1 and #4 highest grossing domestic films of all time, is an indication that the overall film slate during fiscal 2016 was less dependent upon one or two films.47The quantity of wide-release films shown in our theatres and number of wide-release films provided by the seven major studios increased during fiscal 2016 compared to fiscal 2015C. We played 133 wide-release films (including 33 digital 3D films) at our theatres during fiscal 2016 compared to 113 wide-release films (including 26 digital 3D films) during fiscal 2015C. In total, we played 253 films and 144 alternate content attractions at our theatres during fiscal 2016 compared to 227 films and 107 alternate content attractions during the prior year comparable period.During fiscal 2016, our average ticket price increased 3.9% compared to fiscal 2015C. Excluding the impact of the Wehrenberg theatres and new screens added during fiscal 2016, the increase in average ticket price contributed all of the increase in our box office receipts for comparable theatres during fiscal 2016 compared to fiscal 2015C (including the additional week of operations during fiscal 2015C). The increase was partially attributable to modest price increases we implemented in January and November 2016. In addition, the fact that we have increased our number of premium large format (PLF) screens, with a corresponding price premium, also contributed to our increased average ticket price during fiscal 2016. Conversely, we believe that a change in film product mix had a negative impact on our average ticket price during fiscal 2016, as two of our top three films during fiscal 2016 were animated family movies (resulting in a higher percentage of lower-priced children’s tickets sold, compared to more adult-oriented and R-rated films that typically result in a higher average ticket price), compared to no animated family films among the top four films during fiscal 2015C. The percentage of our total box office receipts attributable to 3D presentations during fiscal 2016 was similar to the percentage of our total box office receipts attributable to 3D presentations during fiscal 2015C, meaning that we don’t believe that 3D films had an impact on our change in average ticket price during fiscal 2016 (a higher percentage of 3D films can result in a higher average ticket price due to the premium price associated with 3D).Our average concession sales per person at comparable theatres (excluding the Wehrenberg theatres) increased 3.2% during fiscal 2016 compared to fiscal 2015C. Pricing, concession/food and beverage product mix and film product mix are the three primary factors that impact our concession sales per person. A change in concession product mix, including increased sales of higher priced non-traditional food and beverage items from our increasing number ofTake Five Lounges,Zaffiro’s Express andReel Sizzle outlets, as well as modest selected price increases we introduced in November 2016, were the primary reasons for our increased average concession sales per person during fiscal 2016. Conversely, although animated family films generally have a favorable impact on traditional concession sales, as these types of films typically result in stronger traditional concession sales compared to more adult-oriented films, we believe that the above described change in film product mix during fiscal 2016 slowed the growth of our overall average concession sales per person, as animated and family-oriented films tend not to contribute to sales of non-traditional food and beverage items as much as adult-oriented films. Excluding the impact of the Wehrenberg theatres and new screens added during fiscal 2016, the increase in average concession sales per person contributed all of the increase in our concession revenues for comparable theatres during fiscal 2016 compared to fiscal 2015C (including the additional week of operations during fiscal 2015C).48Operating margin for our theatre division increased to 21.9% for fiscal 2016, compared to 20.5% for fiscal 2015C. Excluding the additional week of operations, our fiscal 2015C theatre division operating margin was actually an even lower 19.8%. Our theatre division had an active cost savings initiative (CSI) in place that achieved cost savings in excess of $2 million during fiscal 2016, favorably impacting our fiscal 2016 operating margin. Increased attendance also generally favorably impacts our operating margin, particularly because the increased attendance has the effect of increasing our high-margin concession revenues and because fixed expenses become a lower percentage of revenues. The fact that the percentage of our box office revenues attributable to our highest grossing films did not change significantly during fiscal 2016 compared to fiscal 2015C contributed to relatively unchanged film costs during fiscal 2016. Higher grossing blockbuster films have historically had a higher film cost as a percentage of box office revenues than lower grossing films and, therefore, our operating margin often is negatively impacted when we have a greater number of higher grossing films. Conversely, if a greater portion of our concession revenues is the result of the sale of non-traditional food and beverage items that typically have a higher product cost compared to traditional concession items, operating margins may be negatively impacted to a small extent. Any such impact during fiscal 2016 was offset by the impact of our higher attendance.Other revenues, which include management fees, pre-show advertising income, family entertainment center revenues, surcharge revenues and gift card breakage income, may also impact operating margin. During fiscal 2016, other revenues increased significantly compared to fiscal 2015C due to an increase in internet surcharge ticketing revenues (primarily as a result of increased advanced ticket sales) and increased pre-show advertising income. Our agreement with our current advertising provider, Screenvision, included a provision for a one-time incentive payment if a defined cumulative attendance milestone was reached within a defined time period. We reached this milestone during our fiscal 2016 fourth quarter. As a result, our operating results during the fourth quarter of fiscal 2016 were favorably impacted by a significant one-time $3.3 million payment.We opened two newUltraScreen DLX auditoriums at an existing theatre in Minnesota in February 2016 and two new screens at an existing theatre in Wisconsin in November 2016. As noted above, we also opened a new 16-screen theatre in Illinois in October 2016. We did not close any theatres during fiscal 2016, but we did close two budget-oriented theatres with 13 screens during fiscal 2015C.Transition Period versus Prior Year Comparable PeriodOur theatre division Transition Period revenues, operating income and operating margin increased compared to the prior year comparable 30-week period due primarily to an increase in total theatre attendance at comparable theatres, an increase in our average ticket price, our continued expansion of non-traditional food and beverage items in our theatres, and the additional week of operations included in our Transition Period results compared to the prior year comparable period. The additional week of operations, which included the week between Christmas and New Year’s Eve (historically, one of the busiest weeks of the year), contributed approximately $14.4 million and $5.7 million, respectively, to our theatre division revenues and operating income during the Transition Period compared to the prior year comparable period.Total theatre attendance at comparable theatres increased 18.2% during the Transition Period, including the additional week of operations, and 9.0%, excluding the additional week, compared to the prior year comparable period. The following table indicates our percentage change in comparable theatre attendance during each of the interim periods of the Transition Period compared to the same periods during the prior year. In addition, the table compares the percentage change in our Transition Period box office revenues (compared to the prior year comparable period) to the corresponding percentage change in the United States box office receipts during the same periods (as compiled by us from data received from Rentrak, a national box office reporting service for the theatre industry). For attendance comparison purposes, percentage change data noted for the last five weeks and total columns exclude the additional week of operations. For comparisons to the national box office, we added the 31st week of fiscal 2015 to our prior year comparable 30-week period box office revenues in order to compare the same number of weeks:49Change TP v. PY1st Qtr.2nd Qtr.5 WeeksTotalPct. change in Marcus theatre attendance+12.8%-3.6%+31.3%+9.0%Pct. change in Marcus box office revenues+16.6%-3.2%+37.9%+13.7%Pct. change in U.S. box office revenues+10.1%-2.6%+34.5%+10.0% Marcus outperformance v. U.S.+6.5 pts-0.6 pts+3.4 pts+3.7 ptsWe outperformed the industry during the Transition Period by nearly four percentage points. We believe our performance during the second quarter of the Transition Period was negatively impacted by a significant number of screens out of service for upgrades during the period. Despite the screens out of service, we would have outperformed the industry during the second quarter of the Transition Period if not for a difficult comparison for one particular week during the period. We believe that comparisons to that particular week in October were negatively impacted by the fact that there was not a Green Bay Packers game during that weekend in the prior year comparable period. In our largest revenue-generating state, Wisconsin, the timing of Packers football games can make a difference in weekly year-over-year comparisons. We believe this outperformance of others in the industry 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 that have increased attendance, including our $5 Tuesday promotion and our new customer loyalty program (all of which are described in the “Current Plans” section of this MD&A).Theatre attendance and corresponding box office revenues vary significantly from quarter to quarter due to a variety of factors. As evidenced by the change in United States box office revenues, our Transition Period second quarter box office revenues and attendance were impacted by a weaker slate of movies compared to the prior year comparable period. We also believe a combination of several additional factors contributed to this decrease in attendance during the second quarter of the Transition Period. To position our theatre circuit to maximize the benefits of the release ofStar Wars: The Force Awakens in December 2015, we had an unprecedented number of screens out of service as we continued to make major upgrades to selected theatres. A total of 17 of our largest auditoriums were out of service for varying portions of the second quarter of the Transition Period as we increased the number ofUltraScreen DLX andSuperScreen DLX premium large format screens in our circuit. In addition, another 15 screens were out of service at selected theatres for varying portions of the second quarter of the Transition Period as we added our spacious DreamLounger electric all-recliner seating to additional theatres.Conversely, a stronger slate of summer movies during the first quarter, and the record performance ofStar Wars: The Force Awakens during the last five weeks of the Transition Period contributed to the significant improvement in attendance and box office performance during those periods compared to the same periods of the prior year. We also believe a combination of several additional factors contributed to this significant increase in attendance and our above-described industry outperformance. In addition to the $5 Tuesday promotion that continued to perform better than the prior year comparable period, our Transition Period attendance was favorably impacted by increased attendance at 14 theatres that have added our spacious new DreamLounger electric all-recliner seating during the past two and one-half years. We also believe that we were beginning to recognize the benefits of our previously-described customer loyalty program.We believe that the most significant factor contributing to variations in theatre attendance during the Transition Period, as in other periods, was the quantity and quality of films released during the respective periods compared to the films released during the same periods of the prior year. Blockbusters accounted for an increased percentage of our total box office revenues during the Transition Period, with our top 15 performing films accounting for 58% of our Transition Period box office revenues compared to 50% during the comparable period of fiscal 2015. The following five top performing Transition Period films accounted for over 35% of the total box office revenues for our circuit:Star Wars: The Force Awakens,Jurassic World,Inside Out,Minions andThe Hunger Games: Mockingjay – Part 2. The top two films on this list,Star Wars andJurassic World, are currently the #1 and #4 highest grossing domestic films of all time.50The quantity of wide-release films shown in our theatres and number of wide-release films provided by the seven major studios did not change significantly during the Transition Period compared to the prior year comparable period. We played 70 wide-release films (including 17 digital 3D films) at our theatres during the Transition Period compared to 72 wide-release films (including 17 digital 3D films) during the prior year comparable period. In total, we played 145 films and 75 alternate content attractions at our theatres during the Transition Period compared to 143 films and 47 alternate content attractions during the prior year comparable period.During the Transition Period, our average ticket price increased 3.5% compared to the prior year comparable period. The increase in average ticket price contributed approximately $2.9 million, or 27%, of the increase in our box office receipts during the Transition Period compared to the prior year comparable period, excluding the impact of the additional week of operations. The increase was partially attributable to modest price increases we implemented in mid-October 2014, particularly at our DreamLounger recliner seating locations. In addition, the fact that we have increased our number of premium large format (PLF) screens, with a corresponding price premium, also contributed to our increased average ticket price. The percentage of our total box office receipts attributable to 3D presentations also increased during the Transition Period compared to the prior year comparable period due primarily to a higher than average 3D performance from our top two films,Star Wars: The Force Awakens andJurassic World, contributing to our higher average ticket price. The combination of the increase in our PLF screens and the impact of 3D pricing forStar Wars contributed to an increase in our average ticket price of 6.5% during the last five weeks of the Transition Period. Conversely, we believe that a change in film product mix had a slight negative impact on our average ticket price during the Transition Period, as two of our top four films for the Transition Period were animated family movies (resulting in a higher percentage of lower-priced kids tickets sold, compared to more adult-oriented and R-rated films that typically result in a higher average ticket price).Our average concession sales per person increased 10.7% during the Transition Period compared to the prior year comparable period. Pricing, concession/food and beverage product mix and film product mix are the three primary factors that impact our concession sales per person. Selected price increases introduced in mid-October 2014 and a change in concession product mix, including increased sales of higher priced non-traditional food and beverage items from our increasing number ofTake Five Lounges,Zaffiro’s Express andReel Sizzle outlets andBig Screen Bistros, were the primary reasons for our increased average concession sales per person during the Transition Period. In addition, the fact that two of our top four films during the first quarter of the Transition Period were animated family movies (Inside Out andMinions), compared to a film slate during the first quarter of the comparable prior year period that was lacking in strong family-oriented movies, also likely contributed to a larger (13.1%) increase in concession sales per person during the first quarter of the Transition Period. These types of films typically result in stronger concession sales compared to more adult-oriented films. The increase in average concession sales per person contributed approximately $6.1 million, or approximately 56%, of the increase in our concession revenues for comparable theatres during the Transition Period compared to the prior year comparable period, excluding the impact of the additional week of operations.51Our theatre division’s operating margin increased to 20.3% during the Transition Period, compared to 19.1% for the prior year comparable period. Excluding the additional week of operations, our Transition Period theatre division operating margin actually decreased slightly to 18.7%. Increased attendance generally favorably impacts our operating margin, particularly because the increased attendance has the effect of increasing our high-margin concession revenues and because fixed expenses become a lower percentage of revenues. Conversely, the fact that a higher percentage of our box office revenues were attributable to our highest grossing films contributed to higher film costs during the Transition Period, resulting in the decreased operating margin for the Transition Period after the additional week is excluded. Higher grossing blockbuster films historically have a higher film cost as a percentage of box office revenues than lower grossing films and, therefore, our operating margin often is negatively impacted when we have a greater number of higher grossing films. In addition, if a greater portion of our concession revenues is the result of the sale of non-traditional food and beverage items that typically have a higher product cost compared to traditional concession items, operating margins may be negatively impacted to a small extent. Any such impact during the Transition Period was offset by the impact of our higher attendance. Other revenues, which include management fees, pre-show advertising income, family entertainment center revenues, surcharge revenues and gift card breakage income, also can impact operating margin. During the Transition Period, other revenues increased significantly compared to the prior year comparable period due to increased advertising income and significantly increased surcharge revenues (primarily as a result of advanced ticket sales forStar Wars: The Force Awakens).As noted above, we opened our newest theatre, the 12-screen Marcus Palace Cinema, on April 30, 2015. At the same time, we closed a nearby 16-screen theatre, resulting in a net decrease of four screens. The new theatre is significantly outperforming the theatre it replaced, even with fewer screens, so we did not adjust any of our comparative numbers referenced earlier for the fact that we have fewer screens. We closed one six-screen budget-oriented theatre early in the second quarter of the Transition Period, and we closed one seven-screen budget-oriented theatre in early December 2015.Fiscal 2015 versus Fiscal 2014Our theatre division fiscal 2015 revenues and operating income increased compared to the prior year due primarily to an increase in total theatre attendance at comparable theatres and our continued expansion of non-traditional food and beverage items in our theatres, partially offset by a decrease in our average ticket price. Despite the fact that our operating income and operating margin for fiscal 2015 were negatively impacted by $319,000 in impairment charges related to several closed theatres and approximately $950,000 of one-time preopening expenses related to the opening of new theatres and amenities, our fiscal 2015 revenues and operating income were records for this division. Our operating income and operating margin for fiscal 2014 were negatively impacted by approximately $475,000 of additional snow removal costs and $475,000 of additional heating costs, both as a result of unusually harsh winter weather that year.Total theatre attendance increased 12.1% during fiscal 2015 compared to the prior year. The following table indicates our percentage change in comparable theatre attendance during each of the four quarters of fiscal 2015 compared to the same quarters during the prior year. In addition, the table compares the percentage change in our fiscal 2015 quarterly box office revenues (compared to the prior year) to the corresponding percentage change in the United States box office receipts during the same periods (as compiled by us from data received from Rentrak, a national box office reporting service for the theatre industry): Change F15 v. F14 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Total Pct. change in Marcus theatre attendance +9.9 % +25.6 % +7.5 % +9.8 % +12.1 % Pct. change in Marcus box office revenues -1.8 % +17.2 % +8.3 % +10.7 % +7.7 % Pct. change in U.S. box office revenues -12.7 % +0.4 % +0.5 % +1.1 % -3.7 % Marcus outperformance v. U.S. +10.9 pts +16.8 pts +7.8 pts +9.6 pts +11.4 pts We outperformed the industry during fiscal 2015 by more than 11 percentage points. Over three-fourths of our company-owned, first-run theatres outperformed the industry average during fiscal 2015. We believe this performance 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 that have increased attendance, including our $5 Tuesday promotion and our new customer loyalty program (all of which are described in the “Current Plans” section of this MD&A).52Theatre attendance and corresponding box office revenues vary significantly from quarter to quarter due to a variety of factors. We rolled out our $5 Tuesday promotion to our entire circuit in mid-November 2013, so attendance comparisons to the prior year during our first and second quarters of fiscal 2015 significantly benefited from this program. Conversely, as evidenced by the change in United States box office revenues, our fiscal 2015 first quarter box office and attendance were impacted by a weaker slate of summer movies compared to the prior year. Moreover, with the United States box office declining 3.7% during our fiscal 2015, we believe we can conclude that the overall film slate during fiscal 2015 was weaker than fiscal 2014. The fact that we reported record revenues and operating income during fiscal 2015 in the face of this weaker film slate further accentuates the success of our previously described strategies.We believe that the most significant factor contributing to variations in theatre attendance during fiscal 2015, as in other years, was the quantity and quality of films released during the respective quarters compared to the films released during the same quarters of the prior year. Blockbusters accounted for a slightly decreased percentage of our total box office revenues during fiscal 2015, with our top 15 performing films accounting for 38% of our fiscal 2015 box office revenues compared to 39% during fiscal 2014. We believe one of the reasons why blockbusters accounted for a slightly lower percentage of our total box office is because our $5 Tuesday program has increased movie-going frequency among our customers, which we believe benefited the next tier of films after the blockbusters. The following five top performing fiscal 2015 films accounted for over 18% of the total box office revenues for our circuit:American Sniper,Avengers: Age of Ultron,The Hunger Games: Mockingjay – Part 1,Furious 7 andGuardians of the Galaxy.The quantity of wide-release films shown in our theatres and number of wide-release films provided by the seven major studios decreased during fiscal 2015. We played 113 wide-release films (including 25 digital 3D films) at our theatres during fiscal 2015 compared to 124 wide-release films (including 37 digital 3D films) during fiscal 2014. In total, we played 225 films and 80 alternate content attractions at our theatres during fiscal 2015 compared to 176 films and 51 alternate content attractions during fiscal 2014.During fiscal 2015, our average ticket price decreased 3.9% compared to the prior year, attributable primarily to the introduction of our $5 Tuesday pricing promotion for all movies implemented during the second half of fiscal 2014. We do not believe that changes in film product mix had a significant impact on our average ticket price during fiscal 2014. In mid-October 2014, we introduced our first selected admission price increases to our theatres since April 2013, which favorably impacted our average ticket price during the third and fourth quarters of fiscal 2015. Our price increases were generally modest, as we continue to be sensitive to the favorable price-value proposition we have established, although we did increase some prices at our DreamLounger recliner seating locations by approximately $0.50-$0.75 per ticket during fiscal 2015. As a result, and after the $5 Tuesday promotion had been in place for a full year, our average ticket price increased 0.7% and 0.9% during the third and fourth quarters of fiscal 2015, respectively, compared to the third and fourth quarters of fiscal 2014. It should be noted that our Tuesday attendance continued to increase in our second year of the program, which likely has had the effect of reducing our average ticket price increases.Our average concession sales per person increased 4.9% during fiscal 2015 compared to the prior year. Pricing, concession/food and beverage product mix and film product mix are the three primary factors that impact our concession sales per person. Selected price increases introduced in mid-October 2014 and a change in concession product mix, including increased sales of higher priced non-traditional food and beverage items from our increasing number ofTake Five Lounges,Zaffiro’s Express outlets andBig Screen Bistros, were the primary reasons for our increased average concession sales per person during fiscal 2015, partially offset by the impact of the $5 Tuesday free popcorn promotion described in the “Current Plans” section of this MD&A during the first two quarters of the year. After the $5 Tuesday promotion had been in place for a full year, our average concession sales per person increased 11.2% and 9.3% during the third and fourth quarters of fiscal 2015, respectively, compared to the third and fourth quarters of fiscal 2014. The fact that none of our top five films during fiscal 2015 were animated family movies, compared to three of our top five films during fiscal 2014 (Frozen,Despicable Me 2 andThe Lego® Movie), likely contributed to a smaller increase in concession sales per person during fiscal 2015, as these types of films typically result in stronger concession sales compared to more adult-oriented films. The increase in average concession sales per person contributed approximately $4.6 million, or approximately 31%, of the increase in our concession revenues for comparable theatres during fiscal 2015 compared to the prior year.53Our theatre division’s operating margin increased to 19.9% during fiscal 2015, compared to 19.1% for fiscal 2014. Increased attendance generally favorably impacts our operating margin, particularly because the increased attendance has the effect of increasing our high-margin concession revenues and because fixed expenses become a lower percentage of revenues. Other revenues, which include management fees, pre-show advertising income, family entertainment center revenues and gift card breakage income, also can impact operating margin, although during fiscal 2015, other revenues were essentially even compared to the prior year. The fact that the percentage of our box office revenues attributable to our highest grossing films was relatively stable compared to the prior year meant that film costs during fiscal 2015 were also relatively stable as a percentage of box office revenues compared to the prior year, resulting in no impact on our fiscal 2015 margins compared to the prior year. Higher grossing blockbuster films historically have a higher film cost as a percentage of box office revenues than lower grossing films and, therefore, our operating margin often is negatively impacted when we have a greater number of higher grossing films. In addition, if a greater portion of our concession revenues is the result of the sale of non-traditional food and beverage items that typically have a higher product cost compared to traditional concession items, operating margins may be negatively impacted to a small extent. Any such impact during fiscal 2015 was offset by the impact of our higher attendance.As noted above, we opened our newest theatre, the 12-screen Marcus Palace Cinema, on April 30, 2015. At the same time, we closed a nearby 16-screen theatre, resulting in a net decrease of four screens. The new theatre is significantly outperforming the theatre it replaced, even with less screens, so we did not adjust any of our comparative numbers referenced earlier for the fact that we have fewer screens.contributed: (i) 35.5%contributed 40.7% of our consolidated revenues during fiscal 2021, compared to 44.0% and 13.7%32.1%, respectively, during fiscal 2020 and fiscal 2019. The hotels and resorts division contributed 26.5% and 11.6%, respectively, of our consolidated operating income (loss), excluding corporate items, during fiscal 2017,2020 and fiscal 2019. During fiscal 2021 the hotels and resorts division contributed operating income compared to 39.6% and 16.9%, respectively, during fiscal 2016 and 42.2% and 17.2%, respectively, during fiscal 2015C; (ii) 43.5% and 31.8%, respectively, during the Transition Period, compared to 48.1% and 34.7%, respectively, during the prior year comparable period; and (iii) 44.7% and 16.2%, respectively, during fiscal 2015, compared to 45.6% and 25.7%, respectively, during fiscal 2014.with a consolidated operating loss, excluding corporate items. As of December 28, 2017,30, 2021, the hotels and resorts division owned and operated three full-service hotels in downtown Milwaukee, Wisconsin, a full-facilityfull-service destination resort in Lake Geneva, Wisconsin and full-service hotels in Madison, Wisconsin, Chicago, Illinois, Lincoln, Nebraska and Oklahoma City, Oklahoma (we have a majority-ownership position in the Oklahoma City, Oklahoma hotel). In addition, the hotels and resorts division managed 1011 hotels, resorts and other properties for other owners. Included in the 1011 managed properties is one hotel owned by a joint venture in which we have a minority interest and two condominium hotels in which we own some or all of the public space. The following tables set forth revenues, operating income (loss), operating margin and rooms data for the hotels and resorts division for fiscal 2017, fiscal 2016, the unaudited prior year comparable 53-week period ended December 31, 2015 (F2015C), the Transition Period (TP), the unaudited prior year comparable 30-week period ended December 25, 2014 (PY), and the prior twopast three fiscal years:54F21 v. F20 F20 v. F19 F2021 F2020 Amt. Pct. F2019 Amt. Pct. (in millions, except percentages) Revenues $ 186.6 $ 104.6 $ 82.0 78.4 % $ 263.4 $ (158.7) (60.3) % Operating income (loss) $ 5.9 $ (43.9) $ 49.8 113.4 % $ 10.1 $ (53.9) (536.7) % Operating margin 3.1 % (41.9) % 3.8 % Change F17 v. F16 Change F16 v. F15C F2017 F2016 Amt. Pct. F2015C Amt. Pct. (in millions, except percentages) Revenues $ 220.9 $ 215.2 $ 5.7 2.6 % $ 224.5 $ (9.3 ) -4.1 % Operating income $ 12.7 $ 14.6 $ (1.9 ) -12.7 % $ 13.0 $ 1.6 12.0 % Operating margin 5.8 % 6.8 % 5.8 % Change TP v. PY TP PY Amt. Pct. (in millions, except percentages) Revenues $ 141.1 $ 135.0 $ 6.1 4.5 % Operating income $ 17.3 $ 14.7 $ 2.6 17.7 % Operating margin 12.3 % 10.9 % Change F15 v. F14 F2015 F2014 Amt. Pct. (in millions, except percentages) Revenues $ 218.3 $ 204.1 $ 14.2 7.0 % Operating income $ 10.3 $ 16.1 $ (5.8 ) -35.8 % Operating margin 4.7 % 7.9 % Available rooms at period-end F2017 F2016 TP F2015 F2014 Company-owned 2,629 2,600 2,600 2,817 2,817 Management contracts with joint ventures 333 611 683 683 611 Management contracts with condominium hotels 480 480 480 480 480 Management contracts with other owners 1,399 1,231 1,231 1,231 1,231 Total available rooms 4,841 4,922 4,994 5,211 5,139 Available rooms at period-end F2021 F2020 F2019 Company-owned 2,628 2,628 2,627 Management contracts with joint ventures 248 333 333 Management contracts with condominium hotels 480 480 480 Management contracts with other owners 2,088 1,691 1,945 Total available rooms 5,444 5,132 5,385 F21 v. F20 F20 v. F19 F2021 F2020 Amt. Pct. F2019 Amt. Pct. (in millions, except percentages) Room revenues $ 77.7 $ 35.4 $ 42.3 119.4 % $ 105.9 $ (70.5) (66.6) % Food/beverage revenues 47.1 24.8 22.3 89.7 % 74.7 (49.8) (66.8) % Other revenues 43.2 27.6 15.7 56.9 % 46.5 (19.0) (40.8) % 168.0 87.8 80.2 91.4 % 227.1 (139.3) (61.4) % Cost reimbursements 18.7 16.9 1.8 10.7 % 36.3 (19.4) (53.5) % Total revenues $ 186.6 $ 104.6 $ 82.0 78.4 % $ 263.4 $ (158.7) (60.3) % 20172021 versus Fiscal 2016revenues increased 2.6%returned to profitability during fiscal 20172021, reporting operating income compared to a significant operating loss during fiscal 20162020, due primarily to significantly increased revenues during fiscal 2021. All of our company-owned hotels and resorts contributed to the improved operating results during fiscal 2021. Our fiscal 2021 operating income also benefited from a state government grant and federal tax credits totaling approximately $3.4 million.newSafeHouse restauranthotels and barresorts division revenues by approximately $2.5 million and did not have a material impact on our operating loss.F21 v. F19 F2021 F2019 Amt. Pct. (in millions, except percentages) Room revenues $ 77.7 $ 105.9 $ (28.2) (26.6) % Food/beverage revenues 47.1 74.7 (27.6) (36.9) % Other revenues 43.2 46.5 (3.3) (7.1) % 168.0 227.1 (59.1) (26.0) % Cost reimbursements 18.7 36.3 (17.6) (48.5) % Total revenues $ 186.6 $ 263.4 $ (76.7) (29.1) % Chicago, Illinois that we opened on March 1, 2017,transient and group business contributed significantly to our reduced revenues during fiscal 2021 compared fiscal 2019. A decrease in group business subsequently led to a corresponding decrease in banquet and catering revenues, negatively impacting our reported fiscal 2021 food and beverage revenues compared to fiscal 2019. Other revenues decreased during fiscal 2021 compared to fiscal 2019, but the decrease was less than the decrease in room revenues and food and beverage revenues during fiscal 2021 compared to fiscal 2019, primarily due to increased roomrevenues from one of our condominium hotels and increased ski and golf revenues at the Grand Geneva Resort & Spa, due to our addition of 29 new all-season villas in May 2017, increased room revenues at our other existing company-owned hotels, and increased other revenues from ourEscapeHouse Chicago and in-house web design and laundry businesses, partially offset by a small decrease indecreased management fee revenues. Excluding theSafeHouse Chicago,EscapeHouse Chicago and management company revenues from both years, our comparable hotels and resorts revenues increased 1.6%fees. Cost reimbursements decreased during fiscal 20172021 compared to fiscal 2016.Hotels2019 due to reduced revenues and resorts divisionreduced operating income and operating margin decreased by 12.7% and one percentage point (from 6.8% to 5.8%), respectively, during fiscal 2017 compared to fiscal 2016 due entirely to preopening expenses and startup operating losses related to the newSafeHouse Chicago and a reduction in profits fromcosts at our management business (due in part to a small one-time favorable adjustment during the prior year). Excluding these two items, operating income for our hotels and resorts division during fiscal 2017 actually exceeded operating income during fiscal 2016 by approximately $200,000, or 1.7%. Excluding these same items, our operating margin during both fiscal 2017 and fiscal 2016 was 5.3%. A small increase in revenue per available room for comparable hotels during fiscal 2017 contributed to the improved operating results for comparablemanaged hotels.55or ADR,(“ADR”), and our total revenue per available room (“RevPAR”), for company-owned properties:F21 v. F20 F2021 F2020 Amt. Pct. Occupancy percentage 48.1 % 36.9 % 11.3 pts 30.5 % ADR $ 163.64 $ 136.76 $ 26.88 19.7 % RevPAR $ 78.78 $ 50.44 $ 28.34 56.2 % Change F17 v. F16 Operating Statistics(1) F2017 F2016 Amt. Pct. Occupancy percentage 74.4 % 73.9 % 0.5 pts 0.7 % ADR $ 148.07 $ 147.67 $ 0.40 0.3 % RevPAR $ 110.17 $ 109.16 $ 1.01 0.9 % (1)F21 v. F19 F2021 F2019 Amt. Pct. Occupancy percentage 49.6 % 73.6 % (24.0) pts (32.6) % ADR $ 160.38 $ 154.42 $ 5.96 3.9 % RevPAR $ 79.51 $ 113.65 $ (34.14) (30.0) % of our comparable eight distinct 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 four of our eight comparable seven distinct company-owned properties duringhotels 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. The statistics exclude the Saint Kate, as this hotel was closed for the majority of the first half of fiscal 2017 compared to fiscal 2016. 2019.20172021 results, comparable “upper upscale” hotels throughout the United States experienced an increasea decrease in RevPAR of 0.6%39.6% during fiscal 2017.2021 compared to fiscal 2019. 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 a decrease in RevPAR of 3.0%36.9% during fiscal 2017. We2021 compared to fiscal 2019. Thus, we believe we outperformed the industry and our RevPAR increasescompetitive sets during fiscal 2017 exceeded the United States results2021 by 0.3approximately 9.6 and 6.9 percentage points, and competitive set results by 3.9 percentage points partially due to our success replacing somerespectively. Higher class segments of the decline in group business with an increase in non-group business. Thehotel industry, such as luxury and upper upscale, continue to experience lower occupancies compared to lower class hotel segments such as economy and midscale.20172021 compared to the same quarters during fiscal 2016. For comparison purposes, all statistics exclude2019 (excluding the Hotel Phillips: Change F17 v. F16 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Occupancy percentage 3.1 pts -2.0 pts -0.1 pts 0.9 pts ADR -0.3 % 1.1 % -0.4 % 1.4 % RevPAR 4.4 % -1.5 % -0.4 % 2.7 % F21 v. F19 Occupancy percentage (35.8) pts (26.9) pts (17.1) pts (16.5) pts ADR 1.9 % (11.8) % 10.3 % 5.5 % RevPAR (54.5) % (42.2) % (12.4) % (19.7) % indicatednoted above, the “drive-to leisure” travel customer provided the most demand during fiscal 2021. Leisure travel historically peaks in the table above, our RevPAR performance was much strongerfiscal third quarter and decreases during theour fiscal first and fourth quarters of fiscal 2017 comparedas students go back to school and we experience colder weather in our predominantly Midwestern hotels. Transient business and group business travel subsequent to the second and third quartersonset of the COVID-19 pandemic has remained significantly below fiscal 2017, driven primarily by variations in group business during each quarter.2019 levels. Our company-owned hotels, and in particular our largest hotels, derivehave historically derived a significant portion of their revenues from group business, and as a result, we are more susceptible to variations in RevPAR from quarter to quarter depending upon the strength of the group business market during that particular quarter. Group business also tends to have an impact on our food and beverage revenues as well, sincebecause groups are more likely to use our banquet and catering services during their stay. As indicated by the increase in ADR during fiscal 2021 compared to fiscal 2019, non-group retail pricing held relatively strong, with most of any periodic decreases in ADR due to a reduction in market pricing resulting from the lack of transient business and group business travel midweek.quarterly results above, reduced groupU.S. has slowly increased since the initial onset of the COVID-19 pandemic in March 2020, reaching its highest level since the start of the pandemic during our fiscal 2021 third quarter. In the near term, we expect most demand will continue to come from the drive-to leisure segment. Leisure travel in our markets has a seasonal component to it, peaking in the summer months and slowing down as children return to school and the weather turns colder. Most organizations implemented travel bans at the onset of the pandemic and have generally only allowed essential travel, which will likely limit business negatively impacted severaltravel in the near term, although we are beginning to experience some increases in travel from this customer segment. There also are indications that many of ourthese travel bans are beginning to be lifted gradually. Our company-owned hotels during the second and third quarters of fiscal 2017 and increased group business favorably impacted several of our hotels during the first and fourth quarters of fiscal 2017 compared to the same periods in fiscal 2016. A particular challenge during the fiscal 2017 third quarter washave experienced a material decrease in group sales productivity in which an unusually high number of groups contributed less actual rooms sold than were originally booked. We believe the reduced group occupancy during the second and third quarters of fiscal 2017 does not necessarily reflect a larger trend, but rather was relatedbookings compared to difficult comparisons to the prior year during several months at those particular properties. We base that conclusion in part on the fact that, aspre-pandemic periods. As of the date of this report in early fiscal 2022, our group room revenue bookings for future periods in fiscal 2018 – something2022 - commonly referred to in the hotels and resorts industry as “group pace” – are- is running ahead of our group room revenue bookingswhere we were at the same time in early fiscal 2021, but behind where we would typically be at this same time of the year pre-pandemic.future periods as of March 14, 2017.fiscal 2022 and beyond. Banquet and catering revenue pace for fiscal 20182022 is also currently ahead ofrunning behind where we were last yearwould typically be at this same time.56Our overall ADR increasetime of the year pre-pandemic. Increased wedding bookings have contributed to banquet and catering revenue in fiscal 2017 was partially2021.resultOmicron variant has resulted in additional short term delays in the recovery of our addition of 29 new all-season villas at the Grand Geneva Resort & Spa. These villas are generally higher-priced than other rooms at the Grand Geneva Resort & Spa. Conversely, due to the challenges inbusiness travel. We have experienced some group productivitycancellations during the fiscal 2017 third quarter, we elected to accept a lower ADR in some situations to obtain additional non-group business. In addition, during our fiscal 2017 first quarter our focus was on increasing occupancy, often atof fiscal 2022, which have generally resulted in the expenseshifting of ADR (it is generally more difficultevents and re-bookings to increase ADR during our slower winter season, as overall occupancy is at its lowest).later in the year. As a result, only three of our eight comparable company-owned properties reported increased ADR during fiscal 2017 comparedCOVID-19 case levels have begun to fiscal 2016.Group business also has an impact on our ADR. Typically, whendecline, we have substantial blocksexperienced improving booking activity once again, indicating consumer comfort may be increasing.rooms committed to group business, we are able to raise rates with non-group business. Conversely, leisure customers tend to bearrival, making even short-term forecasts of future RevPAR growth very loyal to online travel agencies, which is one of the reasons why we continue to experience some rate pressure. While we have been selective in choosing the online portals to which we grant access to our inventory, such portals are part of the booking landscape today, and our goal is to use them in the most efficient way possible.Many published reports by those who closely follow the hotel industry suggest that the United States lodging industry will continue to achieve slow but steady growth in RevPAR in calendar 2018. There also appears to be some recent improvement in sentiment regarding the possible positive impact that recent regulatory and tax reforms may have on our business customers, which may result in increased business travel in the future. Whether the relatively positive trends in the lodging industry over the last several years will continue depends in large part on the economic environment, as hoteldifficult. Hotel revenues have historically tracked very closely with traditional macroeconomic statistics such as the Gross Domestic Product.Product, so we will be monitoring the economic environment very closely. After past shocks to the system, such as the terrorist attacks on September 11, 2001 and the 2008 financial crisis, hotel demand took longer to recover than other components of the economy. Conversely, we now anticipate that hotel supply growth will be limited for the foreseeable future, which can be beneficial for our existing hotels. Most industry experts believe the pace of recovery will be steady over the next couple of years. We alsoare encouraged by the demand from drive-to leisure customers during fiscal 2021, which exceeded our expectations. We will continue to monitor hotel supply infocus on reaching the drive-to leisure market through aggressive campaigns promoting creative packages for our markets, as increased supply without a corresponding increase in demand may have a negative impact on our results.Weguests. Overall, we generally expect our favorable revenue trends to continue in future periods and to track or exceed the overall industry trends for our segment of the industry, particularly in our respective markets. As noted above,are encouraged by the fact that our group booking pace as of the date of this report is ahead of our group booking pace as of March 14, 2017. TheSafeHouse Chicago has now completed its first year of operation and we expect to report continued improvement in that restaurant’s operating results during fiscal 2018. We also expect to see continued benefit in future periods from the new villas at the Grand Geneva Resort & Spa. Conversely, several of our markets, including Oklahoma City, Oklahoma, Chicago, Illinois and Milwaukee, Wisconsin, have experienced an increase in room supply that may be an impediment to any substantial increases in ADR in the near term. We believe that our hotels are less impacted by additional room supply than other hotels in the markets in which we compete, particularly in the Milwaukee market, due in large part to recent renovations that we have made to our hotels. The timing and possible disruption of business from our planned renovations at the InterContinental Milwaukee hotel and the Hilton Madison at Monona Terrace (as discussed in the “Current Plans” section of this MD&A) may also have a slight negative impact on the results of those two hotels during fiscal 2018.As we continue to increase our visibility as a national hotel management company, we believe that one of our major strengths is the established infrastructure we bring to hotel owners and developers. This includes our highly-regarded web development team that has produced nationally recognized websites, mobile apps and social media campaigns. Late in our fiscal 2016 first quarter, we established a new business unit named Graydient Creative that focuses on extending this experience to other companies in the hospitality, retail, theatre and entertainment industries and we expect to see continued growth in this business during fiscal 2018. In addition, during our fiscal 2016 fourth quarter, we expanded the capacity of our wholly-owned laundry facility, Wisconsin Hospitality Linen Service (WHLS), to increase our ability to provide laundry services to a growing number of hotels and other hospitality businesses seeking to out-source these services and we expect to continue to grow that business as well. We include the results of Graydient Creative and WHLS in our reported results for our hotels and resorts division.57During fiscal 2017, we ceasedassumed management of the Sheraton MadisonCoralville Hotel & Conference Center in Madison, WisconsinCoralville, Iowa. Owned by the City of Coralville, this 286-room hotel was recently rebranded under the Hyatt Regency brand as Hyatt Regency Coralville Hotel & Conference Center. The property will undergo a phased renovation focusing on the restaurant and sold our 15% minority ownership interest in the property for a gain of approximately $300,000. Earlyall hotel guest rooms. Late in the fourth quarter of fiscal 2017,2021, we assumed management and acquired a minority interest in the Kimpton Hotel Monaco Pittsburgh, a 248-room hotel situated in the center of downtown Pittsburgh, Pennsylvania. Conversely, we ceased management of the Crowne Plaza-Northstar Hotel in Minneapolis, Minnesota during our fiscal 2021 fourth quarter. We also ceased management of The Westin® Atlanta Perimeter North in Atlanta, Georgia and sold our 11% minority interest in the property for a substantial gain of approximately $4.9 million. Conversely, during fiscal 2017, we began managing the new Omaha MarriottDoubleTree by Hilton El Paso Downtown at The Capitol District hotel in Omaha, Nebraska and the Sheraton Chapel Hill Hotel in Chapel Hill, North Carolina. In January 2018, we assumed managementCourtyard by Marriott El Paso Downtown/Convention Center effective February 28, 2022. As of the newly-opened Murieta Inndate of this filing, our current portfolio of hotels and Spa in Rancho Murieta, California. As a result, absent significant additional additions or subtractions from ourresorts includes 17 owned and managed hotel portfolio (which we have none presently), we do not expect these changes to our outside management fees to have a significant impact on our fiscal 2018 financial results.are consideringwill prioritize our own finances, we will consider a number of potential growth opportunities that may impact fiscal 20182022 and future period operating results. IfIn addition, if we were to sell one or more hotels during fiscal 2018,2022, our fiscal 20182022 operating results could be significantly impacted. The extent of any such impact will likely depend upon the timing and nature of the growth opportunity (pure management contract, management contract with equity, joint venture investment, or other opportunity) or divestiture (management retained, equity interest retained, etc.).October 2017, Joe Khairallah submitted his resignationevaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses that are the same as division Presidentor similar to some of the items eliminated in the adjustments made to determine Adjusted EBITDA, such as acquisition expenses, preopening expenses, accelerated depreciation, impairment charges and Chief Operating Officerother adjustments. Our presentation of Marcus HotelsAdjusted EBITDA should not be construed to imply that our future results will be unaffected by any such adjustments. Definitions and Resortscalculations of Adjusted EBITDA differ among companies in our industries, and therefore Adjusted EBITDA disclosed by us may not be comparable to pursue global opportunities. We are gratefulthe measures disclosed by other companies.F2021 F2020 F2019 Net earnings (loss) attributable to The Marcus Corporation $ (43.3) $ (124.8) $ 42.0 Add (deduct): Investment income (0.6) (0.6) (1.4) Interest expense 18.7 16.3 11.8 Other expense (income) 2.5 1.0 1.9 Loss (gain) on disposition of property, equipment and other assets (3.2) (0.9) 1.1 Equity losses from unconsolidated joint ventures, net 0.1 1.5 0.3 Net loss attributable to noncontrolling interests — — 0.1 Income tax expense (benefit) (15.7) (70.9) 12.3 Depreciation and amortization 72.1 75.1 72.3 9.3 4.4 3.5 — — 9.3 — 11.5 — 5.8 24.7 1.9 (10.7) (7.0) — — (1.8) — Total Adjusted EBITDA $ 35.1 $ (71.6) $ 155.2 F2021 F2020 Theatres Hotels & Resorts Corp. Items Total Theatres Hotels & Resorts Corp. Items Total Operating income (loss) $ (27.6) $ 5.9 $ (19.8) $ (41.5) $ (121.4) $ (43.9) $ (13.1) $ (178.4) Depreciation and amortization 51.7 20.2 0.3 72.1 53.5 21.1 0.5 75.1 2.3 1.7 5.3 9.3 1.1 0.7 2.6 4.4 — — — — 5.8 5.7 — 11.5 5.8 — — 5.8 24.7 — — 24.7 (7.2) (3.4) (0.1) (10.7) (5.8) (1.2) — (7.0) — — — — — — (1.8) (1.8) Adjusted EBITDA $ 24.9 $ 24.4 $ (14.3) $ 35.1 $ (42.2) $ (17.6) $ (11.8) $ (71.6) F2019 Theatres Hotels & Resorts Corp. Items Total Operating income (loss) $ 76.9 $ 10.1 $ (18.8) $ 68.2 Depreciation and amortization 51.2 20.4 0.6 72.3 0.9 0.6 2.1 3.5 2.5 6.8 0.0 9.3 1.9 0.0 0.0 1.9 Adjusted EBITDA $ 133.3 $ 37.9 $ (16.0) $ 155.2 his contributionsthe fiscal 2021 periods and intangible assets (trade name) and several theatre locations for the fiscal 2020 and fiscal 2019 periods.companytheatres and hotels for COVID-19 pandemic relief.F21 v. F20 F20 v. F19 F2021 F2020 Amt. Pct. F2019 Amt. Pct. (in millions, except percentages) Theatres $ 24.9 $ (42.2) $ 67.1 (159.1) % $ 133.3 $ (175.5) (131.6) % Hotels and resorts 24.4 (17.6) 42.0 (239.0) % 37.9 (55.5) (146.3) % Corporate items (14.3) (11.8) (2.4) 20.5 % (16.0) 4.2 (26.3) % Adjusted EBITDA $ 35.1 $ (71.6) 106.7 (149.0) % $ 155.2 (226.7) (146.1) % past four years. Greg Marcus, our President and Chief Executive Officer, has assumed operational oversight of this division as we evaluate our future leadership needs, supported by a strong and experienced senior leadership team.Fiscal 2016 versus Fiscal 2015Crevenues decreased 4.1%returned to positive Adjusted EBITDA during fiscal 2016 compared to fiscal 2015C2021 due to the negative impact on total revenues resulting from our sale of the Hotel Phillips in October 2015, the fact that fiscal 2015C included an additional week of operationsimproved occupancy percentages and decreased foodADR, and beverage revenues at our remaining company-owned hotels, partially offset by increased room revenues at our remaining eight company-owned hotels. The additional week of operations contributed approximately $3.4 million to our hotels and resorts division revenues during fiscal 2015C. The fact that fiscal 2016 ended on December 29 and did not include New Year’s Eve, which is historically a strong holiday for many of our hotels, while fiscal 2015C included two New Year’s Eves in its 53-week year, contributed to the decline in food and beverage revenues during fiscal 2016. Conversely, our acquisition of theSafeHouse restaurant in June 2015 favorably impacted hotels and resorts division food and beverage revenues during fiscal 2016 as compared to fiscal 2015C. Excluding theSafeHouse from both years and the Hotel Phillips and additional week of operations from fiscal 2015C, our comparable hotels and resorts revenues increased 0.4% during fiscal 2016 compared to fiscal 2015C.Hotels and resorts division operating income and operating margin increased by 12.0% and one percentage point (from 5.8% to 6.8%), respectively, during fiscal 2016 compared to fiscal 2015C due primarily to strong cost controls, increased revenue per available room for comparable hotels during fiscal 2016, the fact that fiscal 2015C included a $2.6 million impairment charge related to one specific hotel and 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. Conversely, comparisons of fiscal 2016 operating income and operating margin from our hotels and resorts division to fiscal 2015C operating income and operating margin were unfavorably impacted by decreased food and beverage revenues at our remaining company-owned hotels, the fact that fiscal 2015C included an additional week of operations, and the negative impact on total operating income resulting from our sale of the Hotel Phillips in October 2015, along with subsequent legal expenses in fiscal 2016 related to a dispute with the city of Kansas City regarding our right to receive future tax incremental funding proceeds generated by that hotel. The additional week of operations contributed approximately $500,000 to our hotels and resorts division operating income during fiscal 2015C. Excluding theSafeHouse and Hotel Phillips from both years, as well as the additional week of operations and the aforementioned impairment charge from fiscal 2015C, our comparable hotels and resorts division operating income increased 7.1% during fiscal 2016 compared to fiscal 2015C. Excluding these same items, our operating margin during fiscal 2016 was 7.4% compared to an operating margin of 6.9% during fiscal 2015C. Our strong cost controls during fiscal 2016 are evidenced by the fact that approximately 131% of our revenue increase during fiscal 2016 compared to fiscal 2015C flowed through to our operating income during fiscal 2016 (after adjusting for the items noted above), compared to a 50% flow through that we typically target.58The following table sets forth certain operating statistics, including our average occupancy percentage, our ADR, and our RevPAR, for company-owned properties: Change F16 v. F15C Operating Statistics(1) F2016 F2015C Amt. Pct. Occupancy percentage 73.9 % 73.1 % 0.8 pts 1.1 % ADR $ 147.67 $ 144.93 $ 2.74 1.9 % RevPAR $ 109.16 $ 105.93 $ 3.23 3.0 % (1)These operating statistics represent averages of our comparable eight distinct 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 seven of our eight comparable company-owned properties during fiscal 2016 compared to fiscal 2015C. According to data received from Smith Travel Research and compiled by us in order to analyze our fiscal 2016 results, comparable “upper upscale” hotels throughout the United States experienced an increase in RevPAR of 2.0% during fiscal 2016. 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 in RevPAR of 1.5% during fiscal 2016. We believe our RevPAR increases during fiscal 2016 exceeded the United States results and competitive set results partially due to our continued emphasis on increasing our ADR, as described below, partially offset by room supply growth in certain of our markets and a difficult economic environment in Oklahoma City, Oklahoma, as a result of reduced oil prices. The following table sets forth the change in our average occupancy percentage, ADR and RevPAR for each quarterly period of fiscal 2016 compared to fiscal 2015C. For comparison purposes, all statistics exclude the Hotel Phillips: Change F16 v. F15C 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Occupancy percentage 2.2 pts 1.8 pts - -1.1 pts ADR 1.0 % 4.4 % 2.6 % -1.2 % RevPAR 4.4 % 6.9 % 2.7 % -2.6 % As indicated in the table above, our RevPAR performance was much stronger during the first half of fiscal 2016 compared to the second half of fiscal 2016, driven primarily by increased groupHotels and transient business during the first two quarters of the year. Unfortunately, reduced group business negatively impacted several of our hotels during the third and fourth quarters of fiscal 2016 and resulted in a corresponding reduction in food and beverage revenues during the second half of fiscal 2016 compared to the second half of fiscal 2015C. We believe the second half of fiscal 2016 may have been impacted by uncertainty regarding the presidential election and concerns about the economic environment. We also believe the reduced group occupancy during the second half of fiscal 2016 was related to difficult comparisons to the prior year during several months at those particular properties.59Our overall ADR increase in fiscal 2016 was the direct result of a strategy at several hotels to emphasize rate, occasionally at the expense of occupancy. The additional group business at several of our hotels during the first half of fiscal 2016 allowed us to increase rates for the remaining available rooms and reduce the number of rooms occupied at discounted rates.Resorts section above. As a result, six of our eight comparable company-owned properties reported increased ADRwe were pleased to report positive consolidated Adjusted EBITDA during fiscal 2016 compared to fiscal 2015C. Our overall ADR increases during fiscal 2016 were impacted, however, by reduced group business during the third and fourth quarters of fiscal 2016 compared to the third and fourth quarters of fiscal 2015C, resulting in only four of our eight company-owned properties reporting increased ADR during the second half of fiscal 2016,2021 as we increased the number of rooms occupied at discounted rates during that period.We completed a renovation of The Skirvin Hilton hotel in Oklahoma City, Oklahoma, which included all 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 completed its second year of operation and achieved increased operating performance during fiscal 2016 compared to fiscal 2015C.As we continue to increase our visibility as a national hotel management company, we believe that one of our major strengths is the established infrastructure we bring to hotel owners and developers. This includes our highly-awarded web development team that has produced nationally recognized websites, mobile apps and social media campaigns. Late in our fiscal 2016 first quarter, we established a new business unit named Graydient Creative that focuses on extending this experience to other companies in the hospitality, retail, theatre and entertainment industries. In addition, during our fiscal 2016 fourth quarter, we expanded the capacity of our wholly-owned laundry facility, Wisconsin Hospitality Linen Service (WHLS), to increase our ability to provide laundry services to a growing number of hotels and other hospitality businesses seeking to out-source these services. We include the results of Graydient Creative and WHLS in our reported results for our hotels and resorts division.In June 2015, we purchased theSafeHouse in Milwaukee, Wisconsin, adding another restaurant to our portfolio. The addition of this spy-themed Milwaukee restaurant to our operating results contributed to our increased food and beverage revenues during fiscal 2016 compared to fiscal 2015C, partially offset by the fact that the restaurant was closed for a portion of the fiscal 2016 first quarter for a renovation. During the fourth quarter of fiscal 2016, we began construction on a newSafeHouse location in Chicago, Illinois and opened theEscapeHouse Chicago, a complimentary business capitalizing on the popularity of team escape games.During fiscal 2016, we ceased management of The Hotel Zamora and Castile Restaurant in St. Pete Beach, Florida and sold all but 0.49% of our 10% minority ownership interest in the property. We have agreed to sell the remaining interest during the next several years. These events did not significantly impact our financial results during fiscal 2016.Transition Period versus Prior Year Comparable PeriodOur hotels and resorts division revenues, operating income and operating margin increased during the Transition Period compared to the prior year comparable 30-week period due primarily to an increase in food and beverage revenues, an increase in our average daily rate, strong cost controls and the additional week of operations included in our Transition Period results compared to the prior year comparable period. The additional week of operations contributed approximately $3.0 million and $700,000, respectively, to our hotels and resorts division revenues and operating income during the Transition Period compared to the prior year comparable period. Conversely, hotels and resorts division revenues and operating income during the Transition Period were negatively impacted by the sale of the Hotel Phillips in October 2015.The following table sets forth certain operating statistics, including our average occupancy percentage, our ADR, and our RevPAR, for company-owned properties. For comparison purposes, all statistics for the Transition Period exclude the additional week of operations:60 Change TP v. PY Operating Statistics(1) TP PY Amt. Pct. Occupancy percentage 77.3 % 78.2 % -0.9 pts -1.2 % ADR $ 153.54 $ 150.00 $ 3.54 2.4 % RevPAR $ 118.70 $ 117.35 $ 1.35 1.2 % (1)These operating statistics represent averages of our comparable eight distinct 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 six of our eight comparable company-owned properties during the Transition Period compared to the prior year comparable period. According to data received from Smith Travel Research and compiled by us in order to analyze our Transition Period results, comparable “upper upscale” hotels throughout the United States experienced an increase in RevPAR of 3.6% during the Transition Period. 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 in RevPAR of 3.1% during the Transition Period. We believe our RevPAR increases during the Transition Period do not match the United States results and competitive set results because of room supply growth in certain of our markets, the fact that our properties are predominately in Midwestern markets that have not experienced the greater ADR increases prevalent in larger cities in other areas of the country, and particularly difficult comparisons during the first quarter of our Transition Period. The following table sets forth the change in our average occupancy percentage, ADR and RevPAR for each interim period of the Transition Period. For comparison purposes, all statistics exclude the Hotel Phillips and the additional week of operations: Change TP v. PY 1st Qtr. 2nd Qtr. 5 Weeks Occupancy percentage -3.3 pts -0.8 pts 0.9 pts ADR 2.9 % 3.4 % 0.7 % RevPAR -1.0 % 2.4 % 2.4 % We believe our RevPAR increase during the Transition Period compared to the prior year comparable period was negatively impacted by reduced occupancy from our group business customer segment in the first quarter of the Transition Period. We believe the reduced group occupancy, primarily at two of our more group-oriented hotels, was related to difficult comparisons to the prior year during the months of June and July at those particular properties. We base that conclusion on the fact that our overall business improved significantly later in the summer and into the remaining months of the Transition Period.An increase in our ADR offset our occupancy percentage declines during the Transition Period compared to the comparable prior year period. We believe one of the best ways to increase our operating margins is to increase our ADR, and we continued to actively pursue that strategy during the Transition Period, even at the expense of reduced occupancy percentages in some cases. Our rebranded AC Hotel Chicago Downtown is an example of this strategy, as we continued to see significant increases in ADR at that property during the Transition Period. In addition, during the Transition Period, we made a decision at our largest revenue property, the Grand Geneva Resort & Spa, to focus on growing total hotel revenues through bookings that generate a higher ancillary spend, meaning that we sacrificed some room revenue dollars to achieve higher total spend throughout the resort. This particular strategy contributed to our increase in food and beverage revenues during the Transition Period compared to the prior year comparable period. Five of our eight comparable company-owned and operated hotels reported increased ADR during the Transition Period compared to the prior year comparable period.61The lodging industry continued to generally perform at a steady pace during the Transition Period. With the exception of group business during the first two months of the Transition Period described above, all major segments of our customer base – leisure travel, non-group business travel and group – remained relatively strong. As noted previously, leisure customers tend to be very loyal to online travel agencies, which is one of the reasons why we continued to experience some rate pressure.During the first quarter of the Transition Period, we purchased theSafeHouse in Milwaukee, Wisconsin, adding another restaurant to our portfolio. The addition of this spy-themed Milwaukee restaurant to our operating results contributed to our increased food and beverage revenues during the Transition Period.Fiscal 2015 versus Fiscal 2014Our hotels and resorts division revenues increased during fiscal 2015 compared to the prior year due primarily to higher occupancy rates at our comparable hotels and an increase in food and beverage revenues during fiscal 2015 compared to the prior year. Conversely, hotels and resorts division operating income during fiscal 2015 was negatively impacted by increased depreciation and a $2.6 million impairment charge related to one specific hotel. In addition, the removal of our former Four Points by Sheraton brand at our downtown Chicago hotel and commencement of a major renovation to convert this hotel into one of the first AC Hotels by Marriott in the United States resulted in disruption in room reservations and rooms out of service during the last three quarters of fiscal 2015, contributing to our overall reduced operating income during fiscal 2015.The following table sets forth certain operating statistics, including our average occupancy percentage, our ADR, and our RevPAR, for company-owned properties: Change F15 v. F14 Operating Statistics(1) F2015 F2014 Amt. Pct. Occupancy percentage 74.8 % 72.1 % 2.7 pts 3.7 % ADR $ 140.47 $ 139.72 $ 0.75 0.5 % RevPAR $ 105.10 $ 100.81 $ 4.29 4.3 % (1)These operating statistics represent averages of our comparable nine distinct 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 seven of our nine comparable company-owned properties during fiscal 2015 compared to the prior year. Excluding our Chicago hotel, which experienced significant disruption during its major renovation, RevPAR increased 5.9% during fiscal 2015 compared to the prior year. According to data received from Smith Travel Research and compiled by us in order to analyze our fiscal year results, comparable “upper upscale” hotels throughout the United States experienced an increase in RevPAR of 6.9% during our fiscal 2015. We believe our RevPAR increases during fiscal 2015 do not match the United States results because our properties are predominately in Midwestern markets that have not experienced the higher ADR increases more prevalent in larger cities in other areas of the country, such as New York and San Francisco. In fact, 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 in RevPAR of 5.3% during our fiscal 2015. Based upon that data, and excluding our Chicago hotel, our hotels collectively outperformed their respective markets during fiscal 2015. Room demand continued to be strong overall, but inconsistent demandrecover from the group business segment and the onset of construction at our Chicago hotel during the second quarter of fiscal 2015 contributed to variations in our results by quarter, as evidenced by the table below:62 Change F15 v. F14 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Occupancy percentage 3.7 pts 3.6 pts 1.4 pts 1.9 pts ADR 1.9 % -0.5 % -0.6 % 1.8 % RevPAR 6.5 % 4.3 % 1.8 % 3.3 % The lodging industry continued to recover at a steady pace during our fiscal 2015. Our overall occupancy rates again showed improvement during fiscal 2015 compared to the prior year and, in fact, continued to be at record levels for this division, significantly higher than they were prior to the recession-driven downturn in the hotel industry. However, one of the biggest challenges facing our hotels and resorts division, and the industry as a whole, has been the overall decline in ADR compared to pre-recession levels, particularly in our geographic markets. Our ADR during fiscal 2015 was still approximately 2.4% below pre-recession fiscal 2008 levels. We believe our ADR decreases during the second and third quarters of fiscal 2015 and relatively small overall increase in ADR during fiscal 2015 resulted from several factors, including the removal of our brand at our Chicago hotel for the last two quarters of the year, a conscious decision to spur demand at several of our winter-weather affected properties by lowering ADR during our third quarter, and the impact of increased supply in our Milwaukee, Wisconsin and Oklahoma City, Oklahoma markets.Leisure travel remained strong during fiscal 2015, although leisure customers tend to be very loyal to online travel agencies, which is one of the reasons why we continued to experience rate pressure. Non-group business travel was also strong during fiscal 2015. Group business continued to be the customer segment experiencing the slowest recovery during fiscal 2015. However, strong group business during the first quarter of fiscal 2015 contributed to our 8%-9% increases in ADR at selected hotels compared to the prior-year first quarter.The above-described change in our RevPAR mix had the effect of limiting our ability to rapidly increase our operating margins during the ongoing United States economic recovery. Operating costs traditionally increase as occupancy increases, which usually negatively impacts our operating margins until we begin to also achieve significant improvements in our ADR.divisionsbusinesses, when open and operating normally, each generate significant and relatively consistent daily amounts of cash, subject to previously-noted seasonality, described above, because each segment’s revenue is derived predominantly from consumer cash purchases. WeUnder normal circumstances, we believe that these relatively consistent and predictable cash sources, as well as the availability of $91 million of unused credit lines, at the end of fiscal 2017, arewould be adequate to support the ongoing operational liquidity needs of our businessesbusinesses. A detailed description of our liquidity as of December 30, 2021 is described in detail above in the “Impact of the COVID-19 Pandemic” section of this MD&A.fiscal 2018.June 16, 2016,January 9, 2020, we entered into a five-year, $225 million credit agreement among us andCredit Agreement with several banks, including JPMorgan Chase Bank, N.A., as Administrative Agent, and U.S. Bank National Association, as Syndication AgentAgent. On April 29, 2020, we entered into the First Amendment, on September 15, 2020 we entered into the Second Amendment, and on July 13, 2021, we entered into the Third Amendment (the Credit Agreement, as amended by the First Amendment, the Second Amendment and the Third Amendment, hereinafter referred to as the “Credit Agreement”).June 16, 2021January 9, 2025 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 December 28, 2017) and outstanding letters of credit ($3.7 million as of December 28, 2017). We may request toan increase in the aggregate amount of the revolving credit facility and/or term loan commitmentsavailability under the Credit Agreement including by the addition of one or more tranches of term loans, by an aggregate amount of up to $75$125 million by increasing the revolving credit facility or adding one or more tranches of term loans. Our ability to increase availability under the Credit Agreement is subject to certain conditions, which include,including, among other things, the absence of any default or event of default or material adverse effect under the Credit Agreement.63UnderBorrowings under the Credit Agreement we have agreedgenerally bear interest at a variable rate equal to: (i) LIBOR, subject to a 1% floor, plus a specified margin based upon our consolidated debt to capitalization ratio as of the most recent determination date; or (ii) the base rate (which is the highest of (a) the prime rate, (b) the greater of the federal funds rate and the overnight bank funding rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR), subject to a 1% floor, plus a specified margin based upon our consolidated debt to capitalization ratio as of the most recent determination date. In addition, the Credit Agreement generally requires us to pay a facility fee payable quarterly, equal to 0.15%0.125% to 0.25% of the total revolving commitment, depending on our consolidated debt to total capitalization ratio, as defined in the Credit Agreement. Borrowings underHowever, pursuant to the First Amendment and the Second Amendment: (A) in respect of revolving loans, (1) we are charged a facility fee equal to 0.40% of the total revolving credit facility bear interest, payable no less frequently than quarterly, at a rate equal to (a) LIBOR plus acommitment and (2) the specified margin between 0.85%is 2.35% for LIBOR borrowings and 1.375% (based on our consolidated debt to total capitalization ratio)1.35% for ABR borrowings, which facility fee rate and specified margins will remain in effect until the end of the first fiscal quarter ending after the end of any period in which any portion of the term loan facility remains outstanding or (b) an alternate base rate (which is the greatesttesting 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) specifiedany financial covenant in the Credit Agreement.The Marcus Corporationus and certain of our subsidiaries. Among other requirements, the Credit Agreement (a) 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), (b) limits our permissible consolidated debt to total capitalization ratio to a maximum of 0.55 to 1.0, and(c) requires us to maintain a minimumconsolidated fixed charge coverage ratio (consolidated adjusted cash flow to consolidated interest and rental expense) of at least 3.0 to 1.0 as of the end of the fiscal quarter ending March 30, 2023 and each fiscal quarter thereafter, (d) restricts our ability and certain of our subsidiaries’ ability to incur additional indebtedness, pay dividends and other distributions (the restriction on dividends and other distributions does not apply to subsidiaries), and make voluntary prepayments on or defeasance of our 4.02% Senior Notes due August 2025, 4.32% Senior Notes due February 2027, the notes or certain other convertible securities, (e) requires our consolidated EBITDA not to be less than or equal to (i) $10 million as of December 30, 2021 for the two consecutive fiscal quarters then ending, (ii) $25 million as of March 31, 2022 for the three consecutive fiscal quarters then ending, (iii) $50 million as of June 30, 2022 for the four consecutive fiscal quarters then ending, (iv) $65 million as of September 29, 2022 for the four consecutive fiscal quarters then ending, or (v) $70 million as of December 29, 2022 for the four consecutive fiscal quarters then ending, (f) requires our consolidated liquidity not to be less than or equal to (i) $100 million as of September 30, 2021,Agreement.AsAgreement).December 28, 2017, we were in compliance with the financial covenants set forth in the Credit Agreement. Asdefault. If an event of December 28, 2017, our consolidated debt to total capitalization ratio was 0.41 and our fixed charge coverage ratio was 5.9. We expect to be able to meet the financial covenants contained indefault under the Credit Agreement duringoccurs and is continuing, then, among other things, the remainderlenders may declare any outstanding obligations under the Credit Agreement to be immediately due and payable and exercise rights and remedies against the pledged collateral.fiscal 2018.“Note Purchase“4.32% Senior Notes Agreement”) with the several purchasers party to the Note Purchase4.32% Senior Notes Agreement, pursuant to which we issued and sold $50 million in aggregate principal amount of our 4.32% Senior Notes due February 22, 2027 (the “4.32% Notes” and the 4.02% Notes, are together referred to hereafter as the “Notes”) in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The sale and purchase of the Notes occurred on February 22, 2017.Act. We used the net proceeds of the sale of the 4.32% Notes to repay outstanding indebtedness and for general corporate purposes.twenty-second14th day of February and August in each year and at maturity, commencingmaturity. Interest on the 4.32% Notes is payable semi-annually in arrears on the 22nd day of February and August in each year and at maturity. Beginning on August 22, 2017.14, 2021 and on the 14th day of August each year thereafter to and including August 14, 2024, we will be required to prepay $10 million of the principal amount of the 4.02% Notes. Additionally, we may make optional prepayments at any time upon prior notice of all or part of the Notes, subject to the payment of a make-whole amount (as defined in the Amended Senior Notes Agreements, as applicable). Furthermore, until the last day of the first fiscal quarter ending after the Collateral Release Date (as defined in the Amended Senior Notes Agreements, as applicable), we are required to pay a fee to each Note holder in an amount equal to 0.975% of the aggregate principal amount of Notes held by such holder. Such fee is payable quarterly (0.24375% of the aggregate principal amount of the Notes per quarter). The entire outstanding principal balance of the 4.32% Notes will be due and payable on FebruaryNote Purchase Agreement containsentire unpaid principal balance of the 4.02% Notes will be due and payable on August 14, 2025. The Notes rank pari passu in right of payment with all of our other senior unsecured debt.The Marcus Corporationus and certain of our subsidiaries. Among other requirements, the Note Purchase Agreement limitsAmended Senior Notes Agreements (a) limit the amount of priority debt (as defined in the Note Purchase Agreement) for which weheld by us or by our restricted subsidiaries are obligated to 20% of our consolidated total capitalization, (as defined in the Note Purchase Agreement), limits(b) limit our permissible consolidated debt (as defined in the Note Purchase Agreement) to 65% of our consolidated total capitalization, (as defined in the Note Purchase Agreement) and requires(c) require us to maintain a minimumconsolidated fixed charge coverage ratio of at least 2.5 to 1.0 as of the end of the fiscal quarter ending March 30, 2023 and each fiscal quarter thereafter, (d) require our consolidated operating cash flow (as defined inEBITDA not to be less than or equal to (i) $10 million as of December 30, 2021 for the Note Purchase Agreement) to fixed charges (as defined intwo consecutive fiscal quarters then ending, (ii) $25 million as of March 31, 2022 for the Note Purchase Agreement)three consecutive fiscal quarters then ending, (iii) $50 million as of June 30, 2022 for each period ofthe four consecutive fiscal quarters (determinedthen ending, (iv) $65 million as of September 29, 2022 for the four consecutive fiscal quarters then ending, or (v) $70 million as of December 29, 2022 for the four consecutive fiscal quarters then ending, (e) require our consolidated liquidity not to be less than or equal to (i) $100 million as of September 30, 2021, (ii) $100 million as of December 30, 2021, (iii) $100 million as of March 31, 2022, (iv) $100 million as of June 30, 2022, or (v) $50 million as of the last dayend of any fiscal quarter thereafter until and including the fiscal quarter ending December 29, 2022; however, each such required minimum amount of consolidated liquidity would be reduced to $50 million for each such testing date if the initial term loans under the Credit Agreement are paid in full as of such date, and (f) prohibit us and certain of our subsidiaries from incurring or making capital expenditures, in the aggregate for us and such subsidiaries, (i) during fiscal quarter)2021 in excess of 2.50the sum of $40.0 million plus certain adjustments, or (ii) during our 2022 fiscal year in excess of $50 million plus certain adjustments.1.00.Ascertain exceptions, security interests and liens in and on (a) substantially all of December 28, 2017,their respective personal property assets and (b) certain of their respective real property assets, in each case, to secure the ratio of: (a) consolidated debtNotes and related obligations; and (ii) certain subsidiaries of ours have guaranteed our obligations under the Amended Senior Notes Agreements and the Notes. The foregoing security interests, liens and guaranties will remain in effect until the Collateral Release Date.inbelow). We used the Note Purchase Agreement)remainder of the net proceeds from the offering to consolidated total capitalization (as defined in the Note Purchase Agreement) was 0.41; and (b) consolidated operating cash flow (as defined in the Note Purchase Agreement) to fixed charges (as defined in the Note Purchase Agreement) was 6.0. We expect to be able to meet the financial covenants contained in the Note Purchase Agreement during fiscal 2018.The majority of our other long-term debt consists of senior notes and mortgages with annual maturities of $12.0 million and $10.0 million in fiscal 2018 and 2019, respectively. A $24.2 million mortgage due in 2017 was replaced with a new $15.0 million mortgage andrepay borrowings under our revolving credit facility and for general corporate purposes. TheJanuary 2017. A $16.1 million mortgageright of payment to any of our indebtedness that is expressly subordinated in right of payment to the Convertible Notes; (ii) equal in right of payment to any of our unsecured indebtedness that is not so subordinated; (iii) effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and (iv) structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries.in 2017 was extended in December 2017. The senior notes impose various financial covenants applicable to The Marcus Corporationand payable and sets forth certain types of bankruptcy or insolvency events of default involving our company and certain of our subsidiaries. Assubsidiaries after which the Convertible Notes become automatically due and payable.December 28, 2017,the holders as the last reported sale price of the Common Stock was greater than or equal to 130% of the applicable conversion price for at least 20 trading days during the last 30 consecutive trading days ending on the last trading day of the preceding fiscal quarter. We have the ability to settle the conversion in Common Stock.wereentered into privately negotiated Capped Call Transactions (the “Capped Call Transactions”) with certain of the Initial Purchasers and/or their respective affiliates and/or other financial institutions (the “Capped Call Counterparties”). The Capped Call Transactions are expected generally to reduce potential dilution of our common stock upon any conversion of the Convertible Notes and/or offset any cash payments we are required to make in excess of the principal amount of such converted Convertible Notes, as the case may be, in the event that the market price per share or our common stock, as measured under the terms of the Capped Call Transactions, is greater than the strike price of the Capped Call Transactions, which initially corresponds to the conversion price of the Convertible Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes. If, however, the market price per share of our common stock, as measured under the terms of the Capped Call Transactions, exceeds the cap price of the Capped Call Transactions, there would nevertheless be dilution to the extent that such market price exceeds the cap price ofallour debt covenants could be impacted if we are unable to return to closer-to-normal operations as currently expected, which could be impacted by matters that are not entirely in our control, such as the continuation of protective actions that federal, state and local governments have taken, the impact of any new variants of COVID-19 on customer behavior and the timing of new movie releases (as described in the Impact of the financialCOVID-19 Pandemic section of this MD&A). Future compliance with our debt covenants imposed bycould also be impacted if the senior notes,speed of recovery of our theatres and hotels and resorts businesses is slower than currently expected. For example, our current expectations are that our theatre division will continue to improve during fiscal 2022 (but still report results below comparable periods in fiscal 2019), before beginning to progressively return to closer-to-normal performance as we enter fiscal 2023. Our current expectations for our hotels and resorts division are that we will continue to show improvement in each succeeding quarter compared to the prior year, but continue to underperform compared to pre-COVID-19 pandemic years. We do not expect to be ablereturn to meet the financial covenants imposed by the senior notespre-COVID-19 occupancy levels during fiscal 2018.6420172021 versus Fiscal 2016$109.0$46.3 million during fiscal 20172021, compared to $82.7net cash used in operating activities of $68.6 million during fiscal 2016,2020, an increase of $26.3 million, or 31.9%.$114.8 million. The increase in net cash provided by operating activities in fiscal 2021 was due primarily to increaseda reduced net earnings and depreciation and amortizationloss and the favorable timing in the collection of government grant receivables, receipt of refundable income taxes and payment of accounts payable, taxes other than incomeaccrued compensation and other accrued liabilities, partially offset by a reduction in deferred taxes, the unfavorable timing in the collection of accounts and notes receivable and in the payment of income taxes and accrued compensation.2017 totaled $100.22020 of $12.1 million, compared to $128.6 million during fiscal 2016, a decreasean increase of $28.4 million, or 22.0%.$23.0 million. The decreaseincrease in net cash used inprovided by investing activities was primarily the result of the purchase of the Wehrenberg theatres during fiscal 2016, partially offset by increaseda decrease in capital expenditures, during fiscal 2017 compared to fiscal 2016. Increasedthe receipt of $22.1 million in proceeds from the disposals of property, equipment and other assets and the sale of interests in joint ventures during fiscal 2017 were offset by a significantly smaller decrease in restricted cash during fiscal 2017 compared to 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, where we planned to subsequently purchase other real estate to defer the related tax gain on the sale of the hotel. During 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, which resulted in a significant reduction of restricted cash. Proceeds from disposals of property, equipment and other assets ofduring fiscal 2021 (compared to $4.5 million of similar proceeds in fiscal 2020), and salethe receipt of interests$11.4 million in joint venturesconjunction with collection of $6.7a split dollar life insurance policy receivable, partially offset by the fact we received $5.2 million during fiscal 2017 includedin proceeds from the sale of two hotel joint ventures, two former theatres, two parcels of excess land at theatre locationstrading securities during fiscal 2020 and our interest in Movietickets.com. We also sold a partial interest in acontributed $2.4 million to the Kimpton Hotel Monaco Pittsburgh joint venture in fiscal 2021. We did not incur any acquisition-related capital expenditures during fiscal 2016 (the Hotel Zamora, St. Pete Beach, Florida), which reduced our net cash used in investing activities during2021 or fiscal 2016.$114.8$17.1 million during fiscal 20172021 compared to $83.6$21.4 million during fiscal 2016, an increase2020, a decrease of $31.2$4.3 million, or 37.3%20.0%. We incurred capital expenditures of $23.8approximately $1.8 million and $27.9 million, respectively, during fiscal 2017 and fiscal 20162020 related to real estate purchases and development costs of threea proposed new theatre, but we subsequently abandoned plans to build this theatre. We did not incur any capital expenditures related to developing new theatres one of which opened during the fourth quarter ofin fiscal 2016 and two of which opened during fiscal 2017. We2021, nor did notwe did incur any capital expenditures related to developing new hotels during either period. We incurred approximately $93.7$10.3 million and $68.8of capital expenditures in our theatre division during fiscal 2021, including costs associated with the renovation of a theatre. We incurred approximately $15.8 million respectively, of capital expenditures during fiscal 2017 and fiscal 20162020 in our theatre division, including the aforementioned costs associated with constructing new theatres, as well as costs associated with the addition of four new screens, DreamLounger recliner seating ourand a SuperScreen DLX® auditorium at an existing Movie Tavern theatre and the addition of DreamLounger recliner seating to another existing Movie Tavern theatre. Also during fiscal 2020, we began a project to,Zaffiro’s Express andReel Sizzle food and beverage concepts, andUltraScreen DLX andSuperScreen DLX premium large format screens at selected theatres, each as described outlets, to an existing Marcus Wehrenberg theatre (this project was completed in the “Current Plans” section of this MD&A.fiscal 2021). We incurred approximately $20.6$6.8 million of capital expenditures in our hotels and resorts division during fiscal 2017,2021, including costs associated with the development of our newSafeHouse Chicago location, our development of new villasrelated to a lobby renovation at the Grand Geneva Resort & Spa described above and various maintenance capital projects at our owned hotels and resorts. During fiscal 2016, weGeneva. We also incurred approximately $14.7 million of capital expenditures in our hotels and resorts division including costs associated with the renovationduring fiscal 2020 of The Skirvin Hilton andSafeHouse Milwaukee, expansionapproximately $4.7 million, consisting primarily of WHLS and development of our newSafeHouse Chicago, as well as other maintenance capital projects at our company-owned hotels and resorts. As described above, we incurred acquisition-related capital expenditures in our theatre division of $63.8 million during fiscal 2016 (purchase price of $65.0 million, net of a negative working capital balance that we assumed in the transaction). We did not incur any acquisition-related capital expenditures in our theatre division during fiscal 2017. Our current estimated fiscal 20182022 cash capital expenditures, which we anticipate may be in the $65-$80$35 - $45 million range, are described in greater detail in the “Current Plans” section of this MD&A.652017 totaled $4.2 million compared to $42.5 million during2020 of $69.1 million. During fiscal 2016. The decrease in net cash provided by financing activities related primarily to a decrease in2021, we increased our net borrowings on our credit facility during fiscal 2017 compared to fiscal 2016, partially offset by a net increase in our long-term debt during fiscal 2017 compared to a net decrease in long-term debt during fiscal 2016.We received proceeds from the issuance of long-term debt totaling $65.0 million during fiscal 2017, including the proceeds from our issuance of the Notes. 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 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 $36.3 million during fiscal 2017 (including the mortgage note repayment described above) comparedas needed to payments of $52.3 million during fiscal 2016. Fiscal 2016 repayments includedfund our repayment of a $37.2 million term loan from our prior credit agreement.Wecash needs and used excess cash during fiscal 2017 and fiscal 2016 to reduce our borrowings under our revolving credit facility. As short-term revolving credit facility borrowings became due, we replaced them as necessary with new short-term borrowings. In conjunction with the execution of our Credit Agreement in June 2016, we also paid all outstanding borrowings under our prior revolving credit facility borrowings. As a result, we added $178.5 million of new short-term revolving credit facility borrowings, and replaced them withwe made $178.5 million of repayments on short-term revolving credit facility borrowings during fiscal 2021. Net cash provided by operating and investing activities during fiscal 2021 was used to repay $40.3 million of short-term borrowings, including the early repayment of a portion of our term loan facility, as described above. We did not issue any new long-term debt during fiscal 2021.new revolving credit facility.facility (after taking into consideration outstanding letters of credit that reduce revolver availability). We also incurred $90.8 million of new short-term borrowings early in our fiscal 2020 second quarter and issued $100.05 million in convertible notes in our fiscal 2020 third quarter, the majority of which was used to repay existing borrowings under our revolving credit facility to fund the Wehrenberg acquisitionfacility. Net cash provided by financing activities during fiscal 2016 prior to the issuance2020 was reduced by $16.9 million of the senior notes described above during fiscal 2017.capped call transactions. As a result, we added $322.0$221.5 million of new short-term revolving credit facility borrowings, and we made $332.0$302.5 million of repayments on short-term revolving credit facility borrowings during fiscal 20172020 (net decrease in borrowings on our credit facility of $10.0$81.0 million) compared to $346.2.new short-term borrowings and $236.2 million of repayments on short-term borrowings madea life insurance policy during fiscal 2016 (net increase2021. We received Payroll Protection Program (“PPP”) loan proceeds during the second quarter of fiscal 2020, the majority of which were used for qualifying expenses during such quarter that we believed would result in net borrowings onforgiveness of the loan under provisions of the CARES Act. During the third quarter of fiscal 2021, we received notification that qualifying expenses for all of our credit facilityPPP loans were forgiven. The portion of $110.0 million), accountingthe PPP loan proceeds that were not used for the decrease inqualifying expenses totaling approximately $3.4 million contributed to net cash provided by financing activities during fiscal 2017.(excluding(including short-term borrowings but excluding our capitalfinance and operating lease obligations) was 0.400.37 at December 28, 201730, 2021, compared to 0.420.37 at December 29, 2016.31, 2020. A change in the accounting for our convertible senior notes (described in Note 1 of the notes to our consolidated financial statements included in this annual report on Form 10-K) contributed to the increase in our debt-to-capitalization ratio. Based upon our current expectations for our fiscal 20182022 operating results and capital expenditures, we anticipate that our total long-term debt and debt-to-capitalization ratio at the end of ourmay modestly decrease during fiscal 2018 may decrease slightly from that as of December 28, 2017.2022. Our actual total long-term debt and debt-to-capitalization ratio at the end of fiscal 20182022 are dependent upon, among other things, our actual operating results, capital expenditures, potential acquisitions, asset sales proceeds and potential equity transactions during the year.We repurchased approximately 29,000for approximately $850,000 in conjunction with the exercise of stock options during fiscal 2017. We repurchased approximately 334,000 shares of our common stock for approximately $6.4 million in conjunction with the exercise of stock options and the purchase of shares in the open market during fiscal 2016.market. As of December 28, 2017,30, 2021, approximately 2.92.7 million shares of our common stock remained available for repurchase under prior Board of Directors repurchase authorizations. 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, depending upon a number of factors, including prevailing market conditions.paid regular quarterly dividends totaling $13.5 million and $12.0 million, respectively,did not make any dividend payments during fiscal 20172021. We made one quarterly dividend payment totaling $5.1 million during fiscal 2020 before suspending dividends. Our Credit Agreement, as recently amended, required us to temporarily suspend our quarterly dividend payments and prohibited us from repurchasing shares of our common stock in2016. During2021. The Credit Agreement also limits the total amount of quarterly dividend payments or share repurchases during the four subsequent quarters beginning with the first quarter of fiscal 2017,2022 to no more than $1.55 million per quarter, unless we increased our regular quarterly common stock cash dividend by 11.1%have paid off the Term Loan A and returned to $0.125 per common share. Duringcompliance with prior financial covenants under the first quarter of fiscal 2018, we increased our regular quarterly common stock cash dividend by an additional 20.0% to $0.15 per common share. During fiscal 2017 and fiscal 2016, we made distributions to noncontrolling interests of $20,000 and $448,000, respectively.66Fiscal 2016 versus Fiscal 2015CNet cash provided by operating activities totaled $82.7 million during fiscal 2016 compared to $89.5 million during fiscal 2015C, a decrease of $6.8 million, or 7.6%. The decrease in net cash provided by operating activities was due primarily to unfavorable timing of the payment of income taxes, taxes other than income taxes and other accrued liabilities and collection of other current assets, partially offset by increased net earnings and the favorable timing of the collection of accounts and notes receivable and payment of accrued compensation.Net cash used in investing activities during fiscal 2016 totaled $128.6 million compared to $79.8 million during fiscal 2015C, an increase of $48.8 million, or 61.0%. The increase in net cash used in investing activities was primarily the result of the purchase of Wehrenberg during fiscal 2016. Reduced proceeds from the disposals of property, equipment and other assets during fiscal 2016 were offset by a decrease in restricted cash during fiscal 2016 compared to fiscal 2015C. 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, where we planned to subsequently purchase other real estate to defer the related tax gain on the sale of the hotel. During 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, which resulted in a reduction of restricted cash. We also sold a partial interest in a joint venture during fiscal 2016 (the Hotel Zamora, St. Pete Beach, Florida), reducing our net cash used in investing activities during fiscal 2016.Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled $83.6 million during fiscal 2016 compared to $84.6 million during fiscal 2015C, a decrease of $1.0 million, or 1.1%. We incurred capital expenditures of $27.9 million during fiscal 2016 related to real estate purchases and development costs of three new theatres, one of which opened during the fourth quarter of fiscal 2016 and two of which are currently under construction. Approximately $14.6 million of our capital expenditures during fiscal 2015C were related to the development of a new theatre that opened in May 2015. We did not incur any capital expenditures related to developing new hotels during either period. We incurred approximately $68.8 million and $57.3 million, respectively, of capital expenditures during fiscal 2016 and fiscal 2015C in our theatre division, including the aforementioned costs associated with constructing new theatres, as well as costs associated with the addition of DreamLounger recliner seating, ourTake Five Lounge,Zaffiro’s Express,Reel Sizzle andBig Screen Bistro food and beverage concepts, andUltraScreen DLX andSuperScreen DLX premium large format screens at selected theatres, each as described in the “Current Plans” section of this MD&A. We incurred approximately $14.7 million of capital expenditures in our hotels and resorts division during fiscal 2016, including costs associated with the renovation of The Skirvin Hilton andSafeHouse Milwaukee, expansion of WHLS and development of our newSafeHouse Chicago, as well as other maintenance capital projects at our company-owned hotels and resorts. During fiscal 2015C, we incurred approximately $26.9 million of capital expenditures in our hotels and resorts division, including costs associated with the completion of the conversion of our Chicago hotel into an AC Hotel by Marriott, the commencement of our renovation of The Skirvin Hilton, and our acquisition of theSafeHouse Milwaukee, as well as other maintenance capital projects at our company-owned hotels and resorts. As described above, we incurred acquisition-related capital expenditures in our theatre division of $63.8 million during fiscal 2016 (purchase price of $65.0 million, net of a negative working capital balance that we assumed in the transaction). We did not incur any acquisition-related capital expenditures in our theatre division during fiscal 2015C.Net cash provided by financing activities during fiscal 2016 totaled $42.5 million compared to net cash used in financing activities of $21.6 million during fiscal 2015C. The increase in net cash provided by financing activities related primarily to an increase in our net borrowings on our credit facility during fiscal 2016 compared to fiscal 2015C, partially offset by an increase in principal payments on long-term debt, share repurchases and dividends paid during fiscal 2016 compared to fiscal 2015C.67We used excess cash during fiscal 2016 and fiscal 2015C 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. In conjunction with the execution of our new Credit Agreement in June 2016,(specifically, the consolidated fixed charge coverage ratio), at which point we also paid all outstanding borrowings under our old revolving credit facility and replaced them with borrowings under our new revolving credit facility. We also used borrowings under our revolving credit facilityhave the ability to fund the Wehrenberg acquisition. As a result, we added $346.2 million of new short-term borrowings and we made $236.2 million of repayments on short-term borrowings during fiscal 2016 (net increase in borrowings on our credit facility of $110.0 million) compared to $198.0 million of new short-term borrowings and $202.0 million of repayments on short-term borrowings made during fiscal 2015C (net decrease in net borrowings on our credit facility of $4.0 million), accounting for the majority of the increase in net cash provided by financing activities during fiscal 2016. We made $52.3 million of principaldeclare quarterly dividend payments on long-term debt during fiscal 2016, including our repayment of a $37.2 million term loan from our prior credit agreement, compared to principal payments of $8.1 million during fiscal 2015C.Our debt-to-capitalization ratio (excluding our capital lease obligations) was 0.42 at December 29, 2016 compared to 0.38 at the end of fiscal 2015C.We repurchased approximately 334,000 shares of our common stock for approximately $6.4 million in conjunction with the exercise of stock options and the purchase of shares in the open market during fiscal 2016. We repurchased approximately 55,000 shares of our common stock for approximately $1.1 million in conjunction with the exercise of stock options during fiscal 2015C.We paid regular quarterly dividends totaling $12.0 million and $11.0 million, respectively, during fiscal 2016 and fiscal 2015C. During the first quarter of fiscal 2016, we increased our regular quarterly common stock cash dividend by 7.1% to $0.1125 per common share. During fiscal 2016 and fiscal 2015C, we made distributions to noncontrolling interests of $448,000 and $505,000, respectively.Transition Period versus Prior Year Comparable PeriodNet cash provided by operating activities totaled $66.8 million during the Transition Period compared to $55.0 million during the prior year comparable 30-week period, an increase of $11.8 million, and/or 21.4%. The increase in net cash provided by operating activities was due primarily to increased net earnings, increased depreciation and amortization, and the favorable timing of the collection of accounts and notes receivable and payment of income taxes and other accrued liabilities, partially offset by a decrease in deferred income taxes and deferred compensation and other, and the unfavorable timing of the payment of accounts payable and accrued compensation.Net cash used in investing activities during the Transition Period totaled $40.8 million compared to $36.0 million during the prior year comparable period, an increase of $4.8 million, or 13.6%. The increase in net cash used in investing activities was primarily the result of an increase in capital expenditures, partially offset by an increase in proceeds from disposals of property, equipment and other assets, net of proceeds held by an intermediary during the Transition Period. Proceeds from the disposal of property, equipment and other assets of $14.0 million during the Transition Period related primarily to the sale of the Hotel Phillips and a former theatre location. A portion of the proceeds from the sale of the Hotel Phillips were held by an intermediary in conjunction with an expected Internal Revenue Code §1031 tax-deferred like-kind exchange transaction during fiscal 2016. We also purchased an interest in a joint venture during the Transition Period (the Omaha Marriott Downtown at The Capitol District hotel, Omaha, Nebraska) and during the prior year comparable period (the Hotel Zamora, St. Pete Beach, Florida) that contributed to our net cash used in investing activities during both periods.68Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled $44.5 million during the Transition Period compared to $33.9 million during the prior year comparable period, an increase of $10.6 million, or 31.3%. We incurred capital expenditures of $3.2 million and $4.1 million, respectively, related to the development of a new theatre during the Transition Period and prior year comparable period. We did not incur any capital expenditures related to developing new hotels during either period. We incurred approximately $28.0 million and $21.0 million, respectively, of capital expenditures during the Transition Period and prior year comparable period in our theatre division, including the aforementioned costs associated with constructing a new theatre in Sun Prairie, Wisconsin, as well as costs associated with the addition of DreamLounger recliner seating, ourTake Five Lounge,Zaffiro’s Express andBig Screen Bistro food and beverage concepts, andUltraScreen DLX,SuperScreen DLX andUltraScreen premium large format screens at selected theatres, each as described in the “Current Plans” section of this MD&A. We incurred approximately $13.4 million of capital expenditures in our hotels and resorts division during the Transition Period, including costs associated with the completion of the conversion of our Chicago hotel into an AC Hotel by Marriott and our acquisition of theSafeHouse, as well as other maintenance capital projects at our company-owned hotels and resorts. During the prior year comparable period, we incurred approximately $11.8 million of capital expenditures in our hotels and resorts division, including costs associated with the completion of the fiscal 2014 renovation of the tower guest rooms of The Pfister Hotel in Milwaukee, Wisconsin, completion of the renovation of The Lincoln Marriott Cornhusker Hotel in Lincoln, Nebraska, and the commencement of the conversion of our Chicago hotel into an AC Hotel by Marriott, as well as other maintenance capital projects at our company-owned hotels and resorts. We did not incur any acquisition-related capital expenditures in our theatre division during the Transition Period or the prior year comparable period.Net cash used in financing activities during the Transition Period totaled $26.0 million compared to $7.1 million during the prior year comparable period, an increase of $18.9 million. The increase in net cash used in financing activities related primarily to a decrease in our net borrowings on our credit facility during the Transition Period compared to the prior year comparable period and a slight increase in dividends paid.We used excess cash during the Transition Period and prior year comparable period 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 $108.5 million of new short-term borrowings and we made $126.5 million of repayments on short-term borrowings during the Transition Period (net decrease in borrowings on our credit facility of $18.0 million) compared to $80.0 million of new short-term borrowings and $80.0 million of repayments on short-term borrowings made during the prior year comparable period (no change in net borrowings on our credit facility), accounting for the majority of the increase in net cash used in financing activities during the Transition Period. Principal payments on long-term debt were $3.3 million during the Transition Period compared to payments of $2.4 million during the prior year comparable period.Our debt-to-capitalization ratio (excluding our capital lease obligation related to digital cinema projection systems) was 0.38 at December 31, 2015 compared to 0.42 at the end of fiscal 2015.We repurchased approximately 3,700 and 3,000repurchase shares of our common stock in conjunction with the exercise of stock options during the Transition Period and prior year comparable period, respectively.We paid regular quarterly dividends totaling $5.6 million and $5.1 million, respectively, during the Transition Period and prior year comparable period. We increased our regular quarterly common stock cash dividend by 10.5% during the fourth quarter of fiscal 2015 to $0.105 per common share. During the Transition Period and prior year comparable period, we made distributions to noncontrolling interests of $505,000 and $959,000, respectively.Fiscal 2015 versus Fiscal 2014Net cash provided by operating activities totaled $80.5 million during fiscal 2015 compared to $66.4 million during fiscal 2014, an increase of $14.1 million, or 21.1%. The increase in net cash provided by operating activities was due primarily to increased net earnings, increased depreciation and amortization, deferred income taxes and deferred compensation and other, and the favorable timing of the payment of accounts payable and income taxes, partially offset by unfavorable timing of the payment of other accrued liabilities and the collection of accounts and notes receivable.69Net cash used in investing activities during fiscal 2015 totaled $78.2 million compared to $57.7 million during fiscal 2014, an increase of $20.5 million, or 35.5%. The increase in net cash used in investing activities was primarily the result of an increase in capital expenditures, partially offset by a decrease in proceeds from disposals of property, equipment and other assets and a decrease in other assets. We also purchased an interest in a joint venture (the Hotel Zamora) during fiscal 2015 that contributed to our increased net cash used in investing activities during fiscal 2015. Proceeds from the disposal of property, equipment and other assets of $1.9 million during fiscal 2014 related primarily to the sale of two theatre outlots and the sale of our interest in a hotel joint venture.Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled $75.0 million during fiscal 2015 compared to $56.7 million during fiscal 2014, an increase of $18.3 million, or 32.3%. We incurred capital expenditures of $15.5 million and $3.2 million, respectively, related to the development of a new theatre during fiscal 2015 and fiscal 2014. We did not incur any capital expenditures related to developing new hotels during fiscal 2015 or fiscal 2014. We incurred approximately $49.8 million and $38.0 million, respectively, of capital expenditures during fiscal 2015 and fiscal 2014 in our theatre division, including the aforementioned costs associated with constructing a new theatre in Sun Prairie, Wisconsin, as well as costs associated with the addition of DreamLounger recliner seating, ourTake Five Lounge,Zaffiro’s Express andBig Screen Bistro food and beverage concepts, andUltraScreen DLX,SuperScreen DLX andUltraScreen premium large format screens at selected theatres, each as described in the “Current Plans” section of this MD&A. We incurred approximately $23.6 million of capital expenditures in our hotels and resorts division during fiscal 2015, including costs related to the conversion of our Chicago hotel into an AC Hotel by Marriott and costs related to completing renovations at The Pfister Hotel and The Lincoln Marriott Cornhusker Hotel. During fiscal 2014, we incurred approximately $18.5 million of capital expenditures in our hotels and resorts division, including costs associated with renovations at The Lincoln Marriott Cornhusker Hotel and The Pfister Hotel, as well as other maintenance capital projects at our company-owned hotels and resorts. We did not incur any acquisition-related capital expenditures in our theatre division or hotels and resorts division during fiscal 2015 or fiscal 2014.Net cash used in financing activities in fiscal 2015 totaled $2.3 million compared to $12.1 million during fiscal 2014, a decrease of $9.8 million, or 80.7%. The decrease in net cash used in financing activities related to an increase in our net debt proceeds during fiscal 2015 compared to the prior year, a decrease in share repurchases and a decrease in distributions to noncontrolling interests, partially offset by a decrease in the exercise of stock options and an increase in dividends paid.We used excess cash during fiscal 2015 and fiscal 2014 to reduce our borrowings under our revolving credit agreement. As short-term borrowings became due, we replaced them as necessary with new short-term borrowings. We used the proceeds of our issuance and sale of senior notes during fiscal 2014 to pay off borrowings under our revolving credit agreement. In addition, we paid off an existing mortgage on our Chicago hotel at the end of fiscal 2014 with borrowings under our credit agreement. As a result, we added $162.5 million of new short-term borrowings and we made $148.5 million of repayments on short-term borrowings during fiscal 2015 (a net increase in borrowings on our credit facility of $14.0 million) compared to $92.5 million of new short-term borrowings and $115.5 million of repayments on short-term borrowings during fiscal 2014 (a net decrease in borrowings on our credit facility of $23.0 million). We had no proceeds from the issuance of long-term debt in fiscal 2015 compared to proceeds of $52.7 million during fiscal 2014, including the sale and issuance of senior notes. Principal payments on long-term debt, which included the payment of current maturities of senior notes and mortgages, were $7.2 million during fiscal 2015 compared to $31.9 million during fiscal 2014. We also incurred $316,000 in debt issuance costs during fiscal 2014.70Our debt-to-capitalization ratio (excluding our capital lease obligation related to digital cinema projection systems) was 0.42 at May 28, 2015, the same as the prior fiscal year-end.During fiscal 2015, we repurchased 55,000 shares of our common stock for approximately $1.1 million in conjunction with the exercise of stock options. During fiscal 2014, we repurchased 314,000 shares of our common stock for approximately $4.2 million in conjunction with the exercise of stock options and the purchase of shares in the open market. We reduced the numbers of shares repurchased during fiscal 2015 due to increases in the price of our common stock.We paid regular quarterly dividends totaling $10.4 million and $9.2 million, respectively, during fiscal 2015 and fiscal 2014. We increased our regular quarterly common stock cash dividend by 10.5% during the fourth quarter of fiscal 2015 to $0.105 per common share. During fiscal 2015 and fiscal 2014,market as we made distributions to noncontrolling interests of $959,000 and $2.1 million, respectively.Off-Balance Sheet Arrangements28, 201730, 2021 (in thousands): Payments Due by Period Total Less Than
1 Year 1-3 Years 4-5 Years After
5 Years Long-term debt $ 301,829 $ 12,016 $ 34,384 $ 151,977 $ 103,452 Interest on fixed-rate long term debt(1) 43,548 6,739 11,647 9,819 15,343 Pension obligations 37,639 1,347 2,933 2,973 30,386 Operating lease obligations 121,080 11,426 20,015 17,798 71,841 Capital lease obligations 34,657 3,127 6,155 5,500 19,875 Construction commitments 2,505 2,505 - - - Total contractual obligations $ 541,258 $ 37,160 $ 75,134 $ 188,067 $ 240,897 (1)Payments Due by Period Total Less Than
1 Year1-3 Years 4-5 Years After
5 YearsLong-term debt $ 215,144 $ 10,967 $ 22,118 $ 124,346 $ 57,713 41,368 10,710 18,254 10,095 2,309 Pension obligations 46,827 1,697 3,734 4,561 36,835 Operating lease obligations 310,190 26,803 52,152 50,711 180,524 Finance lease obligations 23,794 3,404 6,218 5,714 8,458 Short-term borrowings 47,346 47,346 — — — Construction commitments 11,776 11,776 — — — Total contractual obligations $ 696,445 $ 112,703 $ 102,476 $ 195,427 $ 285,839 related to the amount of variable-rate debt and the accompanying interest rate.As of December 28, 2017, we had an additional capital lease obligation of $9.6 million related to digital cinema equipment. The maximumthe amount we could be required to pay under this obligation is approximately $6.2 million per year untilof variable-rate debt and the obligation is fully satisfied. We believe the possibility of making any payments on this obligation is remote. Additional detail describing this obligation is included in Note 6 to our consolidated financial statements.67 to our consolidated financial statements.28, 2017,30, 2021, we had no additional material purchase obligations other than those created in the ordinary course of business related to property and equipment, which generally have terms of less than 90 days. We had long-term obligations related to our employee benefit plans, which are discussed in detail in Note 810 to our consolidated financial statements. We have not included uncertain tax obligations in the table of contractual obligations set forth above due to uncertainty as to the timing of any potential payments.28, 2017, we had approximately three years remaining on our office lease, which reflected the amendment and extension of the term of the lease that we entered into on June 1, 2012.As of December 28, 2017,30, 2021, we had no debt or lease guarantee obligations.7128, 2017 was $144.930, 2021 (including short-term borrowings) totaled $47.5 million ($47.3 million net of debt issuance costs), carried an average interest rate of 2.8%3.75% and represented 47.9%17.8% of our total debt portfolio. After adjusting for an outstanding swap agreement described below, variable interest rate debt outstanding as of December 28, 2017 was $119.930, 2021 (including short term borrowing) totaled $22.5 million, carried an average interest rate of 2.9%3.75% and represented 39.6%8.4% of our total debt portfolio. Our earnings aremay be affected by changes in short-term interest rates as a result of our borrowings under our revolving credit facility. Our Credit Agreement currently provides for28, 2017, a30, 2021, LIBOR would need to increase by approximately 90 basis points before our annual interest expense would be impacted. If that were to happen, an additional 100 basis point increase in market interest rates above the LIBOR floor would increase our annual interest expense by $1.4 million.$157.6$219.0 million million as of December 28, 2017,30, 2021, carried an average interest rate of 4.6%4.93% and represented 52.1%82.2% of our total debt portfolio. After adjusting for an outstanding swap agreement described below, fixed interest rate debt totaled $182.6$244.0 million as of December 28, 2017,30, 2021, carried an average interest rate of 4.3%4.98% and represented 60.4%91.6% of our total debt portfolio. Fixed interest rate debt included the following: senior notes bearing interest semiannually at fixed rates ranging from 4.02% to 6.55%4.32% (plus a specified period fee of 0.975% described above), maturing in fiscal 20182022 through 2027; andconvertible senior notes bearing interest of 5.0%, maturing in fiscal 2025, fixed rate mortgages and other debt instruments bearing interest from 3.00% to 5.75%, maturing in fiscal 2025 and 2042.2042, and PPP loans bearing interest at 1.0%, maturing in fiscal 2025. The fair value of our fixed interest rate debt is subject to interest rate risk. Generally, the fair market value of our fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise. As of December 28, 2017,30, 2021, the fair value of our $129.1$90.0 million of senior notes was approximately $125.2$91.2 million. As of December 30, 2021, the fair value of our $100.1 million of convertible senior notes was approximately $184.3 million. Based upon the respective rate and prepayment provisions of our remaining fixed interest rate mortgage and unsecured term note at December 28, 2017,30, 2021, the carrying amounts of such debt approximated fair value as of such date.28, 201730, 2021 matures as follows (in thousands): F2018 F2019 F2020 F2021 F2022 Thereafter Total Variable interest rate $ 164 $ 174 $ 14,521 $ 130,000 $ - $ - $ 144,859 Fixed interest rate 11,996 9,922 9,965 11,015 11,065 103,615 157,578 Debt issuance costs (144 ) (141 ) (57 ) (52 ) (51 ) (163 ) (608 ) Total debt $ 12,016 $ 9,955 $ 24,429 $ 140,963 $ 11,014 $ 103,452 $ 301,829 F2022 F2023 F2024 F2025 F2026 Thereafter Total Variable interest rate $ 47,499 $ — $ — $ — $ — $ — $ 47,499 Fixed interest rate 11,977 12,038 12,099 124,847 297 57,716 218,974 Debt issuance costs (1,162) (1,010) (1,009) (759) (40) (3) (3,983) Total debt $ 58,314 $ 11,028 $ 11,090 $ 124,088 $ 257 $ 57,713 $ 262,490 We had one outstanding interest rate swap agreement at December 28, 2017 covering $25.0 million, expiring on January 22, 2018. Under this swap agreement, we pay a defined fixed rate while receiving a defined variable rate based on LIBOR, effectively converting $25.0 million of our borrowing under our Credit Agreement to a fixed rate. The swap agreement did not materially impact our fiscal 2017 earnings and we do not expect it to have any material impact on our fiscal earnings.Subsequent to December 28, 2017, we entered into two interest rate swap agreements covering $50.0 million of floating rate debt which will require us to pay interest at a defined fixed rate while receiving interest at a defined variable rate of one-month LIBOR. The first swap hashad a notional amount of $25.0 million, expiresexpired on March 1, 2021 and hashad a fixed rate of 2.559%. The second swap has a notional amount of $25.0 million, expires on March 1, 2023 and has a fixed rate of 2.687%. We anticipate that theThe interest ratesrate swaps will beare considered effective for accounting purposes and will qualify as cash flow hedges. WeThese swap agreements did not materially impact our fiscal 2021 earnings and we do not expect the remaining interest rate swapsswap to have a material effect on earnings within the next 12 months.States (GAAP).States. The preparation of our financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.72· assets, including fixed assets, goodwill and investments in joint ventures, for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. In assessing the recoverability of these assets, including property and equipment, operating lease right-of-use assets and our trade name intangible asset, for impairment at least annually, or whenever events or changes in circumstances indicate that the carrying amount of any such asset may not be recoverable. Such review is primarily done at the individual theatre or hotel property level, which represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other asset groups. We use judgment to determine whether indicators of impairment exist. The determination of the occurrence of a triggering event is based upon our knowledge of the theatre and hospitality industries, historical experience such as recent operating results, location of the property, market conditions, recent events or transactions, and property-specific information available at the time of the assessment. When a triggering event occurs, judgment is also required in determining the assumptions and estimates to use within the recoverability analysis and when calculating the fair value of the asset if it is determined that the long-lived asset is not recoverable. In performing these analyses, we must make assumptions regarding the estimated future cash flows and other factors that a market participant would make to determine the fair value of the respective assets. The estimate of cash flows is based upon, among other things, certain assumptions about expected future operating performance and anticipated sales prices. Our estimates of undiscounted cash flows are sensitive to assumed revenue growth rates and may differ from actual cash flows due to factors such as economic conditions, the continuing impact of the COVID-19 pandemic, changes to our business model or changes in our operating performance and anticipated sales prices. For long-lived assets other than goodwill, if the sum of the undiscounted estimated cash flows (excluding interest) is less than the current carrying value, we then prepare a fair value analysis of the asset. If the carrying value of the asset exceeds the fair value of the asset, we recognize an impairment loss, measured as the amount by which the carrying value exceeds the fair value of the asset. During fiscal 2015, we recorded a before-tax impairment charge of $2.9 million related to a hotel and several former theatre locations. This same impairment charge also impacted fiscal 2015C results.·Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level. When reviewing goodwill for impairment, we consider the amount of excess fair value over the carrying value of the reporting unit, the period of time since the last quantitative test, and other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, we assess numerous factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. Examples of qualitative factors that we assess include our share price, our financial performance, market and competitive factors in our industry, and other events specific to the reporting unit. If we conclude that it is more likely than not that the fair value of our reporting unit is less than its carrying value, we perform a two-step quantitative test by comparing the carrying value of the reporting unit to the estimated fair value. Primarily all of our goodwill relates to our theatre segment. The fair value of our theatre reporting unit exceeded our carrying value for fiscal 2017, fiscal 2016, the Transition Period and fiscal 2015 by a substantial amount.·Depreciation expense is based on the estimated useful life of our assets. The life of the assets is based on a number of assumptions, including cost and timing of capital expenditures to maintain and refurbish the asset, as well as specific market and economic conditions. While management believes its estimates are reasonable, a change in the estimated lives could affect depreciation expense and net income or the gain or loss on the sale of any of the assets.Accounting ChangesIn May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09,Revenue from Contracts with Customers, a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the company expectscarrying value exceeds the fair value of the asset. During fiscal 2021, we recorded before-tax impairment charges totaling $5.8 million related to two operating theatres, three permanently closed theatres and surplus real estate that we intend to sell. During fiscal 2020, we recorded before-tax impairment charges totaling $24.7 million related to our trade name intangible asset and multiple theatre locations. During fiscal 2019, we recorded a before-tax impairment charge of $1.9 million related to a specific theatre location.entitled in exchangeat an operating segment level. When reviewing goodwill for those goods or services. In August 2015,impairment, we consider the FASB issued ASU No. 2015-14,Revenue from Contracts with Customers: Deferralamount of Effective Date, to deferexcess fair value over the effective datecarrying value of the new revenue recognition standardreporting unit, the period of time since the last quantitative test, and other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, we assess numerous factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying value. Examples of qualitative factors that we assess include our share price, our financial performance, market and competitive factors in our industry, and other events specific to the reporting unit. If we conclude that it is more likely than not that the fair value of our reporting unit is less than its carrying value, we perform a quantitative test by one year. The new standard is effective for us in fiscal 2018. The guidance may be adopted using either a full retrospective or modified retrospective approach. We have selectedcomparing the modified retrospective method for adoption of ASU No. 2014-09 and its related ASU amendments. Under this method, we will recognize the cumulative effectcarrying value of the changes in retained earnings atreporting unit to the dateestimated fair value. Primarily all of adoption, but will not restate prior periods.We haveour goodwill relates to our theatre segment.reviewquantitative analysis. In order to determine fair value, we used assumptions based on information available to us as of March 26, 2020, including both market data and forecasted cash flows. We then used this information to determine fair value and determined that the fair value of our theatre reporting unit exceeded our carrying value by approximately 20% and deemed that no impairment was indicated as of March 26, 2020. Due to the ongoing impact of the requirementsCOVID-19 pandemic, the continued temporary closing of ASU 2014-09several of our theatre locations, and its related ASUs.a reduction in our share price, we also determined that a triggering event occurred during the quarter ended September 24, 2020. As a result, we performed a quantitative analysis as of that date as well as of December 31, 2020. In preparation for adoptionorder to determine fair value, we used assumptions based on information available to us as of September 24, 2020 and December 31, 2020, including both market data and forecasted cash flows. We thennew standard, we have reviewed our key revenue streamsassets is based on a number of assumptions, including cost and related customer contractstiming of capital expenditures to maintain and have appliedrefurbish the five-step modelasset, as well as specific market and economic conditions. While management believes its estimates are reasonable, a change in the estimated lives could affect depreciation expense and net earnings or the gain or loss on the sale of any of the standard to these revenue streams and compared the results to our current accounting practices. We believeassets.the adoption of the new standard will primarily impact our accounting for our loyalty programs and ticketing surcharge revenue. While we do not believe the adoption of ASU 2014-09 willmay have a material impact on our resultsconsolidated financial position. Assets acquired and liabilities assumed in acquisitions are recorded at fair value as of operationsthe acquisition date. We use judgment to allocate the purchase price of the businesses acquired to the identifiable tangible and intangible assets acquired and liabilities assumed. In some cases, we may use an independent valuation firm to assist with our valuation, and our assumptions and estimates are based upon comparable market data and information obtained from our management and the management of the acquired businesses using acceptable valuation techniques. Generally, tangible assets acquired include property and equipment, finance lease right-of-use assets and operating lease right-of-use assets. Intangible assets acquired may include tradename intangibles, non-compete agreements or cash flows,goodwill in a business combination. While we do expectuse our best estimates and assumptions to accurately value assets acquired and liabilities assumed at the new guidanceacquisition date, our estimates are inherently uncertain and subject to impact our classificationrefinement. As a result, during the measurement period, which may be up to one year following the acquisition date, we record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. During fiscal 2019, we acquired the assets of revenue and related expenses. We currently expect the following impacts:·In accordance with the new guidance, the portion of Theatre admission revenues, Theatre concession revenues and Food and beverage revenues attributable to loyalty points earned by customers will be deferred as a reduction of these revenues until reward redemption. Through December 28, 2017, we recorded the estimated incremental cost of redeeming loyalty points at the time they were earned in Advertising and marketing expense. We believe adoption of the standard will result in an immaterial reduction of Theatre admission revenues and a corresponding immaterial increase in Theatre concession revenues with an offsetting increase in other long-term liabilities based upon historical customer reward redemption patterns.·We currently record internet ticket fee revenues net of third-party commission or service fees. In accordance with ASU 2014-09, we believe that we are the principal (as opposed to agent) in the arrangement with third-party internet ticketing companies in regards to sale of internet tickets to customers, and therefore, expect to recognize ticket fee revenue based on a gross transaction price. This change will have the effect of increasing other revenues and other operating expense but will have no impact on net earnings or cash flows from operations.73We expect to recordMovie Tavern for a one-time cumulative effect reduction to retained earningstotal purchase price of approximately $3,500,000 during$139.3 million.first quarter of fiscal 2018 relatedAccounting for Incomes Taxes. The amendments in ASU No. 2019-12 are designed to simplify the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify generally accepted accounting principles for other areas of Topic 740 by clarifying and amending existing guidance. The adoption of ASU 2014-09.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 us in fiscal 2019 and early application is permitted. We are evaluating the effect that the guidance will have on our 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 us beginning in fiscal 2018. The standard must be applied using a retrospective transition method for each period presented. We do not believe the new standard willdid not have a material effect on our consolidated financial statements or related disclosures.In November 2016, the FASB issuedstatements.2016-18,Statement of Cash Flows (Topic 230)2020-06, Debt - Restricted CashDebt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity's Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. ASU No. 2016-18 requires that2020-06 is designed to simplify the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. The amendments remove the separation models in ASC 470-20 for certain contracts. As a statement of cash flows explainresult, embedded conversion features are not presented separately in equity, rather, 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 standardcontract is effective for us in fiscal 2018 and must be applied on a retrospective basis. We reported a $967,000 and $12,553,000 investing cash inflow related to a change in restricted cash for the periods ended December 28, 2017 and December 29, 2016, respectively. 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 the 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)a single liability measured at its amortized cost.is effective for us in fiscal 2018 and must be applied prospectively.effect during the historical periods. We will evaluaterecorded a one-time cumulative effect adjustment to the effectbalance sheet on January 1, 2021 as follows:Balance at December 31, 2020 Cumulative adjustment Balance at
January 1, 2021(in thousands) Long-term debt $ 193,036 $ 21,393 $ 214,429 Deferred income taxes 33,429 (5,584) 27,845 Capital in excess of par 153,529 (16,511) 137,018 Retained earnings 331,897 702 332,599 new standard will have onnotes to our consolidated financial statements prospectively as transactions occur.In January 2017, the FASB issued ASU No. 2017-04,Intangibles – Goodwillincluded in Part II, Item 8 of this annual report on Form 10-K.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 us in fiscal 2020 and must be applied prospectively. We do not believe the new standard will have a material effect on our consolidated financial statements.74In 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. We do not believe that the adoption of the new standard will have a material effect on our 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 us in fiscal 2018. We recorded expenses of $1,712,000 and $1,519,000 in operating income for the periods ended December 28, 2017 and December 29, 2016, respectively, that will be excluded from operating income upon the adoption of ASU No. 2017-07.In May 2017, the FASB issued ASU No. 2017-09,Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce both the 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 changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. ASU No. 2017-09 is effective for us in fiscal 2018 and must be applied prospectively to an award modified on or after the adoption date. We do not believe the new standard will have a material effect on our consolidated financial statements.In August 2017, the FASB issued ASU No. 2017-12,Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification 815,Derivatives and Hedging (Topic 815). ASU No. 2017-12 is designed to improve the transparency and understandability of information about an entity’s risk management activities and to reduce the complexity of and simplifying the application of hedge accounting. ASU No 2017-12 is effective for us in fiscal 2019 and early adoption is permitted. We do not believe the new standard will have a material effect on our consolidated financial statements.75Item 7A.Quantitative and Qualitative Disclosures About Market Risk.Item 8.Financial Statements and Supplementary Data.28, 2017.30, 2021. The Company’s auditors, Deloitte & Touche LLP, have issued an attestation report on our internal control over financial reporting. That attestation report is set forth in this Item 8.Gregory S. Marcus Douglas A. Neis President and Chief Executive Officer Douglas A. Neis
Executive Vice President and Chief Financial Officer and Treasurer76"Company"“Company”) as of December 28, 201730, 2021 and December 29, 2016 and31, 2020, the related consolidated statements of earnings (loss), comprehensive income (loss), shareholders' equity and cash flows, for each of the twothree years in the period ended December 28, 2017, the 31 week period ended December 31, 2015 and for the year ended May 28, 2015,30, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 201730, 2021 and December 29, 2016,31, 2020, and the results of its operations and its cash flows for each of the twothree years in the period ended December 28, 2017, the 31 week period ended December 31, 2015 and for the year ended May 28, 2015,30, 2021, in conformity with accounting principles generally accepted in the United States of America.28, 2017,30, 2021, based on the criteria established inInternal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 13, 2018,3, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.13, 201877"Company"“Company”) as of December 28, 2017,30, 2021, based on criteria established inInternal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 28, 2017,30, 2021, based on the criteria established inInternal Control — Integrated Framework (2013) issued by COSO.28, 201730, 2021, of the Company and our report dated March 13, 2018,3, 2022 expressed an unqualified opinion on those financial statements.Company'sCompany’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’sManagement's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.13, 201878 December 28, 2017 December 29, 2016 Assets Current assets: Cash and cash equivalents(Note 1) $ 16,248 $ 3,239 Restricted cash(Note 1) 4,499 5,466 Accounts and notes receivable, net of reserves(Note 5) 27,230 14,761 Refundable income taxes 15,335 1,672 Other current assets(Note 1) 13,409 11,005 Total current assets 76,721 36,143 Property and equipment,net(Note 5) 860,064 789,198 Other assets: Investments in joint ventures(Note 11) 4,239 6,096 Goodwill(Note 1) 43,492 43,735 Other(Note 5) 33,281 36,094 Total other assets 81,012 85,925 Total assets $ 1,017,797 $ 911,266 Liabilities and shareholders’ equity Current liabilities: Accounts payable $ 51,541 $ 31,206 Taxes other than income taxes 19,638 17,261 Accrued compensation 15,627 17,007 Other accrued liabilities (Note 1) 53,291 46,561 Current portion of capital lease obligations (Note 6) 7,570 6,598 Current maturities of long-term debt (Note 6) 12,016 12,040 Total current liabilities 159,683 130,673 CAPITAL LEASE OBLIGATIONS(Note 6) 28,282 26,106 Long-term debt(Note 6) 289,813 271,343 Deferred income taxes(Note 9) 38,233 46,433 Deferred compensation and other(Note 8) 56,662 45,064 commitments AND license rights(Note 10) equity(Note 7): Shareholders’ equity attributable to The Marcus Corporation
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued – – Common Stock: Common Stock, $1 par; authorized 50,000,000 shares; issued 22,655,517 shares at December 28, 2017 and 22,489,976 shares at December 29, 2016 22,656 22,490 Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 8,533,996 at December 28, 2017 and 8,699,540 shares at December 29, 2016 8,534 8,700 Capital in excess of par 61,452 58,584 Retained earnings 403,206 351,220 Accumulated other comprehensive loss (7,425 ) (5,066 ) 488,423 435,928 Less cost of Common Stock in treasury (3,335,745 shares at December 28, 2017, and 3,517,951 shares at December 29, 2016) (43,399 ) (45,816 ) Total shareholders’ equity attributable to The Marcus Corporation 445,024 390,112 Noncontrolling interests 100 1,535 Total equity 445,124 391,647 Total liabilities and shareholders’ equity $ 1,017,797 $ 911,266
See accompanying notes.December 30, 2021 December 31, 2020 ASSETS CURRENT ASSETS: $ 17,658 $ 6,745 6,396 7,343 28,902 6,359 4,335 4,913 Refundable income taxes 22,435 27,934 4,856 4,117 15,364 10,406 Total current assets 99,946 67,817 771,192 848,328 217,072 229,660 OTHER ASSETS: 2,335 2,084 75,095 75,188 10,032 — 12,689 31,101 Total other assets 100,151 108,373 Total assets $ 1,188,361 $ 1,254,178 LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 35,781 $ 13,158 Taxes other than income taxes 19,566 18,308 Accrued compensation 20,474 7,633 59,678 58,154 47,346 87,194 2,561 2,783 16,795 19,614 10,967 10,548 Total current liabilities 213,168 217,392 17,192 19,744 216,064 230,550 204,177 193,036 26,183 33,429 57,963 61,304 0 0 Shareholders’ equity attributable to The Marcus Corporation Preferred Stock, $1 par; authorized 1,000,000 shares; none issued — — Common Stock: 24,345 23,264 7,130 7,926 Capital in excess of par 145,656 153,529 Retained earnings 289,306 331,897 Accumulated other comprehensive loss (11,444) (14,933) 454,993 501,683 Less cost of Common Stock in treasury (48,111 shares at December 30, 2021 and 124,758 shares at December 31, 2020) (1,379) (2,960) Total shareholders’ equity attributable to The Marcus Corporation 453,614 498,723 Noncontrolling interests — — Total equity 453,614 498,723 Total liabilities and shareholders’ equity $ 1,188,361 $ 1,254,178 79 Year Ended 31 Weeks
Ended Year Ended December 28, December 29, December 31, May 28, 2017 2016 2015 2015 Revenues: Theatre admissions $ 227,091 $ 186,768 $ 104,606 $ 157,254 Rooms 106,876 105,167 70,093 109,660 Theatre concessions 148,989 120,975 69,206 98,746 Food and beverage 70,627 67,551 44,590 67,174 Other revenues 69,131 63,403 35,772 55,233 Total revenues 622,714 543,864 324,267 488,067 Costs and expenses: Theatre operations 197,270 160,729 91,747 134,946 Rooms 40,286 40,213 24,933 42,579 Theatre concessions 43,634 32,407 19,958 27,032 Food and beverage 59,375 55,526 34,656 55,215 Advertising and marketing 23,960 21,582 14,842 25,265 Administrative 68,666 63,620 36,392 53,247 Depreciation and amortization 51,719 41,832 23,815 38,361 Rent(Note 10) 11,869 8,384 5,040 8,591 Property taxes 18,815 16,257 8,630 15,001 Other operating expenses 31,525 33,360 19,582 34,268 Impairment charge(Note 2) – – – 2,919 Total costs and expenses 547,119 473,910 279,595 437,424 OPERATING INCOME 75,595 69,954 44,672 50,643 OTHER INCOME (EXPENSE): Investment income 588 298 15 252 Interest expense (12,100 ) (9,176 ) (5,933 ) (9,926 ) Gain (loss) on disposition of property, equipment and other assets 3,981 (844 ) (490 ) (1,463 ) Equity earnings (losses) from unconsolidated joint ventures, net(Note 11) 46 301 (36 ) (186 ) (7,485 ) (9,421 ) (6,444 ) (11,323 ) Earnings before income taxes 68,110 60,533 38,228 39,320 Income taxes(Note 9) 3,625 22,994 14,785 15,678 NET EARNINGS 64,485 37,539 23,443 23,642 NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (511 ) (363 ) (122 ) (353 ) NET EARNINGS ATTRIBUTABLE TO THE MARCUS CORPORATION $ 64,996 $ 37,902 $ 23,565 $ 23,995 net earnings per share – BASIC: Common Stock $ 2.42 $ 1.41 $ 0.88 $ 0.90 Class B Common Stock 2.17 1.28 0.80 0.82 net earnings per share – DILUTED: Common Stock $ 2.29 $ 1.36 $ 0.84 $ 0.87 Class B Common Stock 2.13 1.27 0.79 0.81 Year Ended December 30,
2021December 31,
2020December 26,
2019REVENUES: Theatre admissions $ 130,740 $ 64,825 $ 284,141 Rooms 77,650 35,386 105,857 Theatre concessions 118,666 56,711 231,237 Food and beverage 47,086 24,822 74,665 Other revenues 65,331 38,742 87,805 439,473 220,486 783,705 Cost reimbursements 18,771 17,202 37,158 Total revenues 458,244 237,688 820,863 COSTS AND EXPENSES: Theatre operations 140,821 92,232 267,741 Rooms 30,394 21,243 40,381 Theatre concessions 47,681 29,747 85,289 Food and beverage 36,833 26,124 60,812 Advertising and marketing 16,069 11,074 24,583 Administrative 63,350 51,046 73,522 Depreciation and amortization 72,127 75,052 72,277 25,594 26,866 26,099 Property taxes 18,473 23,560 21,871 23,817 17,288 41,065 5,766 24,676 1,874 Reimbursed costs 18,771 17,202 37,158 Total costs and expenses 499,696 416,110 752,672 OPERATING INCOME (LOSS) (41,452) (178,422) 68,191 OTHER INCOME (EXPENSE): Investment income 599 564 1,379 Interest expense (18,702) (16,275) (11,791) Other income (expense), net (2,510) (986) (1,921) Gain (loss) on disposition of property, equipment and other assets 3,163 856 (1,149) (92) (1,539) (274) (17,542) (17,380) (13,756) EARNINGS (LOSS) BEFORE INCOME TAXES (58,994) (195,802) 54,435 (15,701) (70,936) 12,320 NET EARNINGS (LOSS) (43,293) (124,866) 42,115 NET EARNINGS (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS — (23) 98 NET EARNINGS (LOSS) ATTRIBUTABLE TO THE MARCUS CORPORATION $ (43,293) $ (124,843) $ 42,017 NET EARNINGS (LOSS) PER SHARE – BASIC: Common Stock $ (1.42) $ (4.13) $ 1.44 Class B Common Stock (1.25) (3.74) 1.25 NET EARNINGS (LOSS) PER SHARE – DILUTED: Common Stock $ (1.42) $ (4.13) $ 1.35 Class B Common Stock (1.25) (3.74) 1.24 80 Year Ended 31 Weeks Ended Year Ended December 28, December 29, December 31, May 28, 2017 2016 2015 2015 NET EARNINGS $ 64,485 $ 37,539 $ 23,443 $ 23,642 OTHER COMPREHENSIVE INCOME (LOSS): Change in unrealized gain on available for sale investments, net of tax effect (benefit) of $(9), $9, $0 and $0, respectively (14 ) 14 – – Pension loss arising during period, net of tax benefit of $1,685, $40, $42 and $570, respectively (2,559 ) (42 ) (62 ) (902 ) Amortization of the net actuarial loss and prior service credit related to the pension, net of tax effect of $142, $55, $84 and $127, respectively 214 58 127 199 Pension curtailment gain, net of tax effect of $0, $127, $0 and $0 – 134 – – Fair market value adjustment of interest rate swap, net of tax benefit of $0, $95, $25 and $110, respectively(Note 6) – (143 ) (39 ) (169 ) Reclassification adjustment on interest rate swap included in interest expense, net of tax effect of $0, $25, $43 and $77, respectively(Note 6) – 38 65 118 Reclassification adjustment related to interest rate swap de-designation, net of tax effect of $0, $63, $0 and $0 – 96 – – Other comprehensive income (loss) (2,359 ) 155 91 (754 ) COMPREHENSIVE INCOME 62,126 37,694 23,534 22,888 COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (511 ) (363 ) (122 ) (353 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO THE MARCUS CORPORATION $ 62,637 $ 38,057 $ 23,656 $ 23,241 Year Ended December 30,
2021December 31,
2020December 26,
2019NET EARNINGS (LOSS) $ (43,293) $ (124,866) $ 42,115 OTHER COMPREHENSIVE INCOME (LOSS): 1,943 (2,813) (5,484) 969 732 327 25 (949) (853) 552 745 120 Other comprehensive income (loss) 3,489 (2,285) (5,890) COMPREHENSIVE INCOME (LOSS) (39,804) (127,151) 36,225 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS — (23) 98 COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO THE MARCUS CORPORATION $ (39,804) $ (127,128) $ 36,127 81 Common
Stock Class B
Common
Stock Capital
in Excess
of Par
Earnings Accumulated
Other
Comprehensive
Income (Loss) Treasury
Stock Shareholders’
Equity
Attributable
to The
Marcus
Corporation Non-
controlling
Interests Total
Equity BALANCES AT MAY 29, 2014 $ 22,458 $ 8,732 $ 53,844 $ 294,334 $ (4,558 ) $ (48,599 ) $ 326,211 $ 3,768 $ 329,979 Cash dividends: $.35 per share Class B Common Stock – – – (3,092 ) – – (3,092 ) – (3,092 ) $.39 per share Common Stock – – – (7,298 ) – – (7,298 ) – (7,298 ) Exercise of stock options – – (66 ) – – 3,030 2,964 – 2,964 Purchase of treasury stock – – – – – (1,092 ) (1,092 ) – (1,092 ) Savings and profit-sharing contribution – – 320 – – 568 888 – 888 Reissuance of treasury stock – – 91 – – 227 318 – 318 Issuance of non-vested stock – – (289 ) – – 289 – – – Share-based compensation – – 1,499 – – – 1,499 – 1,499 Other – – 140 – – – 140 – 140 Conversions of Class B Common Stock 21 (21 ) – – – – – – – Distributions to noncontrolling interest – – – – – – – (959 ) (959 ) Comprehensive income (loss) – – – 23,995 (754 ) – 23,241 (353 ) 22,888 BALANCES AT MAY 28, 2015 22,479 8,711 55,539 307,939 (5,312 ) (45,577 ) 343,779 2,456 346,235 Cash dividends: $.19 per share Class B Common Stock – – – (1,663 ) – – (1,663 ) – (1,663 ) $.21 per share Common Stock – – – (3,969 ) – – (3,969 ) – (3,969 ) Exercise of stock options – – (2 ) – – 862 860 – 860 Purchase of treasury stock – – – – – (75 ) (75 ) – (75 ) Reissuance of treasury stock – – 99 – – 152 251 – 251 Issuance of non-vested stock – – (192 ) – – 192 – – – Share-based compensation – – 975 – – – 975 – 975 Other – – 55 (517 ) – – (462 ) 517 55 Distributions to noncontrolling interest – – – – – – – (505 ) (505 ) Comprehensive income (loss) – – – 23,565 91 – 23,656 (122 ) 23,534 BALANCES AT DECEMBER 31, 2015 22,479 8,711 56,474 325,355 (5,221 ) (44,446 ) 363,352 2,346 365,698 Cash dividends: $.41 per share Class B Common Stock – – – (3,560 ) – – (3,560 ) – (3,560 ) $.45 per share Common Stock – – – (8,477 ) – – (8,477 ) – (8,477 ) Exercise of stock options – – 116 – – 3,870 3,986 – 3,986 Purchase of treasury stock – – – – – (6,389 ) (6,389 ) – (6,389 ) Savings and profit-sharing contribution – – 304 – – 601 905 – 905 Reissuance of treasury stock – – 120 – – 180 300 – 300 Issuance of non-vested stock – – (368 ) – – 368 – – – Share-based compensation – – 1,899 – – – 1,899 – 1,899 Other – – 39 – – – 39 – 39 Conversions of Class B Common Stock 11 (11 ) – – – – – – – Distributions to noncontrolling interest – – – – – – – (448 ) (448 ) Comprehensive income (loss) – – – 37,902 155 – 38,057 (363 ) 37,694 BALANCES AT DECEMBER 29, 2016 22,490 8,700 58,584 351,220 (5,066 ) (45,816 ) 390,112 1,535 391,647 Cash dividends: $.45 per share Class B Common Stock – – – (3,929 ) – – (3,929 ) – (3,929 ) $.50 per share Common Stock – – – (9,575 ) – – (9,575 ) – (9,575 ) Exercise of stock options – – 105 – – 2,166 2,271 – 2,271 Purchase of treasury stock – – – – – (850 ) (850 ) – (850 ) Savings and profit-sharing contribution – – 600 – – 424 1,024 – 1,024 Reissuance of treasury stock – – 253 – – 176 429 – 429 Issuance of non-vested stock – – (501 ) – – 501 – – – Share-based compensation – – 2,411 – – – 2,411 – 2,411 Purchase of noncontrolling interest – – – 494 – – 494 (904 ) (410 ) Conversions of Class B Common Stock 166 (166 ) – – – – – – – Distributions to noncontrolling interest – – – – – – – (20 ) (20 ) Comprehensive income (loss) – – – 64,996 (2,359 ) – 62,637 (511 ) 62,126 BALANCES AT DECEMBER 28, 2017 $ 22,656 $ 8,534 $ 61,452 $ 403,206 $ (7,425 ) $ (43,399 ) $ 445,024 $ 100 $ 445,124 Common
StockClass B
Common
StockCapital
in Excess
of ParRetained
EarningsAccumulated
Other
Comprehensive
Income (Loss)Treasury
StockShareholders'
Equity
Attributable to The Marcus
CorporationNon-Controlling
InterestsTotal
EquityBALANCES AT DECEMBER 27, 2018 $ 22,843 $ 8,347 $ 63,830 $ 439,178 $ (6,758) $ (37,431) $ 490,009 $ 110 $ 490,119 Cash dividends: $.58 per share Class B Common Stock — — — (4,648) �� — (4,648) — (4,648) $.64 per share Common Stock — — — (14,663) — — (14,663) — (14,663) Exercise of stock options — — (205) — — 1,725 1,520 — 1,520 Purchase of treasury stock — — — — — (1,119) (1,119) — (1,119) Savings and profit-sharing contribution — — 810 — — 371 1,181 — 1,181 Reissuance of treasury stock — — 267 — — 150 417 — 417 Issuance of non-vested stock — — (527) — — 527 — — — Share-based compensation — — 3,523 — — — 3,523 — 3,523 Reissuance of treasury stock - acquisition — — 77,960 — — 31,237 109,197 — 109,197 Other — — (109) — — — (109) — (109) Conversions of Class B Common Stock 411 (411) — — — — — — — Distributions to noncontrolling interest — — — — — — — (185) (185) Comprehensive income (loss) — — — 42,017 (5,890) — 36,127 98 36,225 BALANCES AT DECEMBER 26, 2019 23,254 7,936 145,549 461,884 (12,648) (4,540) 621,435 23 621,458 Cash dividends: $.15 per share Class B Common Stock — — — (1,224) — — (1,224) — (1,224) $.17 per share Common Stock — — — (3,921) — — (3,921) — (3,921) Exercise of stock options — — (67) — — 446 379 — 379 Purchase of treasury stock — — — — — (696) (696) — (696) Savings and profit-sharing contribution — — 299 — — 1,016 1,315 — 1,315 Reissuance of treasury stock — — (21) — — 183 162 — 162 Issuance of non-vested stock — — (631) — — 631 — — — Share-based compensation — — 4,385 — — — 4,385 — 4,385 Equity component of issuance of convertible notes, net of tax and issuance costs — — 16,511 — — — 16,511 — 16,511 Capped call transactions, net of tax — — (12,495) — — — (12,495) — (12,495) Other — — (1) 1 — — — — — Conversions of Class B Common Stock 10 (10) — — — — — — — Comprehensive loss — — — (124,843) (2,285) — (127,128) (23) (127,151) BALANCES AT DECEMBER 31, 2020 23,264 7,926 153,529 331,897 (14,933) (2,960) 498,723 — 498,723 — — (16,511) 702 — — (15,809) — (15,809) Exercise of stock options — — (749) — — 2,279 1,530 — 1,530 Purchase of treasury stock — — — — — (1,391) (1,391) — (1,391) Savings and profit-sharing contribution 43 — 968 — — — 1,011 — 1,011 Reissuance of treasury stock — — 6 — — 32 38 — 38 Issuance of non-vested stock 242 — (903) — — 661 — — — Share-based compensation — — 9,316 — — — 9,316 — 9,316 Conversions of Class B Common Stock 796 (796) — — — — — — — Comprehensive income (loss) — — — (43,293) 3,489 — (39,804) — (39,804) BALANCES AT DECEMBER 30, 2021 $ 24,345 $ 7,130 $ 145,656 $ 289,306 $ (11,444) $ (1,379) $ 453,614 $ — $ 453,614 82 Year Ended 31 Weeks Ended Year Ended December 28, December 29, December 31, May 28, 2017 2016 2015 2015 Operating activities Net earnings $ 64,485 $ 37,539 $ 23,443 $ 23,642 Adjustments to reconcile net earnings to net cash provided by operating activities: Losses (earnings) on investments in joint ventures (46 ) (301 ) 36 186 Distributions from joint ventures 377 560 152 166 Loss (gain) on disposition of property, equipment and other assets (3,981 ) 844 490 1,463 Impairment charge – – – 2,919 Amortization of favorable lease right 334 334 194 334 Depreciation and amortization 51,719 41,832 23,815 38,361 Amortization of debt issuance costs 308 303 258 449 Share-based compensation 2,411 1,899 975 1,499 Deferred income taxes (6,438 ) 3,022 (1,079 ) 5,614 Deferred compensation and other 911 577 1,564 3,531 Contribution of the Company’s stock to savings and profit-sharing plan 1,024 905 – 888 Changes in operating assets and liabilities: Accounts and notes receivable (8,852 ) (1,486 ) 2,967 (5,627 ) Other current assets (2,268 ) (2,465 ) (388 ) (845 ) Accounts payable 15,015 (1,978 ) (665 ) 2,355 Income taxes (13,663 ) (5,124 ) 7,567 (925 ) Taxes other than income taxes 2,377 (373 ) 2,550 766 Accrued compensation (1,380 ) 4,738 (3,085 ) 2,440 Other accrued liabilities 6,703 1,829 8,016 3,236 Total adjustments 44,551 45,116 43,367 56,810 Net cash provided by operating activities 109,036 82,655 66,810 80,452 Investing activities Capital expenditures (114,804 ) (83,606 ) (44,452 ) (74,988 ) Purchase of theatres, net of cash acquired and working capital assumed – (63,766 ) – – Proceeds from disposals of property, equipment and other assets 4,524 1,560 13,977 226 Decrease (increase) in restricted cash 967 12,553 (9,259 ) (728 ) Decrease (increase) in other assets 911 3,572 495 (786 ) Capital contribution in joint venture (111 ) – – (399 ) Purchase of interest in joint venture – – (1,600 ) (1,500 ) Contribution received from local government 1,545 – – – Proceeds from sale of interests in joint ventures 6,729 1,100 – – Net cash used in investing activities (100,239 ) (128,587 ) (40,839 ) (78,175 ) Financing activities Debt transactions: Proceeds from borrowings on revolving credit facility 322,000 346,188 108,500 162,500 Repayment of borrowings on revolving credit facility (332,000 ) (236,188 ) (126,500 ) (148,500 ) Proceeds from issuance of long-term debt 65,000 – – – Principal payments on long-term debt (36,300 ) (52,335 ) (3,339 ) (7,176 ) Principal payments on capital lease obligations (1,986 ) – – – Debt issuance costs (418 ) (578 ) – – Equity transactions: Treasury stock transactions, except for stock options (421 ) (6,089 ) 594 (773 ) Exercise of stock options 2,271 3,986 860 2,964 Dividends paid (13,504 ) (12,037 ) (5,632 ) (10,390 ) Distributions to noncontrolling interest (20 ) (448 ) (505 ) (959 ) Purchase of noncontrolling interest (410 ) – – – Net cash provided by (used in) financing activities 4,212 42,499 (26,022 ) (2,334 ) Net increase (decrease) in cash and cash equivalents 13,009 (3,433 ) (51 ) (57 ) Cash and cash equivalents at beginning of year 3,239 6,672 6,723 6,780 Cash and cash equivalents at end of year $ 16,248 $ 3,239 $ 6,672 $ 6,723 Supplemental Information: Change in accounts payable for additions to property and equipment $ 5,320 $ 3,417 $ (7,370 ) $ 3,467 Capital leases acquired 6,173 17,511 – – Capital lease extensions 3,675 – – – Non-cash contribution in joint venture - – 400 – Year Ended December 30,
2021December 31,
2020December 26,
2019OPERATING ACTIVITIES Net earnings (loss) $ (43,293) $ (124,866) $ 42,115 Adjustments to reconcile net earnings (loss) to net cash provided by (used in) operating activities: Losses on investments in joint ventures 92 1,539 274 Distributions from joint ventures — — 200 Loss (gain) on disposition of property, equipment and other assets (3,163) (856) 1,149 Impairment charges 5,766 24,676 1,874 Depreciation and amortization 72,127 75,052 72,277 Amortization of debt issuance costs and debt discount 2,198 2,235 285 Share-based compensation 9,316 4,385 3,523 Deferred income taxes (15,843) (38,836) 9,111 Other long-term obligations 1,689 2,969 1,011 Contribution of the Company’s stock to savings and profit-sharing plan 1,011 1,315 1,181 Changes in operating assets and liabilities: Accounts receivable (22,055) 23,106 (3,781) Government grants receivable 578 (4,913) — Other assets (2,255) 3,476 1,102 Operating leases (5,325) 9,185 (3,355) Accounts payable 21,501 (32,131) 9,733 Income taxes 8,508 1,467 67 Taxes other than income taxes 1,258 (2,305) 1,664 Accrued compensation 12,841 (10,422) 508 Other accrued liabilities 1,300 (3,630) 2,541 Total adjustments 89,544 56,312 99,364 Net cash provided by (used in) operating activities 46,251 (68,554) 141,479 INVESTING ACTIVITIES Capital expenditures (17,082) (21,363) (64,086) Acquisition of theatres, net of cash acquired and working capital assumed — — (30,081) Proceeds from disposals of property, equipment and other assets 22,145 4,485 22 Capital contribution in joint venture (2,427) (28) — Proceeds from sale of trading securities 377 5,184 — Purchase of trading securities (3,080) (801) — Life insurance premium reimbursement 11,411 — — Other investing activities (461) 450 199 Net cash provided by (used in) investing activities 10,883 (12,073) (93,946) FINANCING ACTIVITIES Debt transactions: Proceeds from borrowings on revolving credit facility 178,500 221,500 335,000 Repayment of borrowings on revolving credit facility (178,500) (302,500) (333,000) Proceeds from short-term borrowings — 90,800 — Repayment on short-term borrowings (40,346) (2,955) — Proceeds from convertible senior notes — 100,050 — Principal payments on long-term debt (10,717) (9,447) (24,620) Proceeds received from PPP loans expected to be repaid — 3,424 — Proceeds received from borrowing on insurance policy 6,700 — — Principal payments on finance lease obligations (2,774) (2,007) (2,544) Debt issuance costs (208) (7,560) — Equity transactions: Treasury stock transactions, except for stock options (417) (534) (702) Exercise of stock options 594 379 1,520 Capped call transactions — (16,908) — Dividends paid — (5,145) (19,311) Distributions to noncontrolling interest — — (185) Net cash provided by (used in) financing activities (47,168) 69,097 (43,842) Net increase (decrease) in cash, cash equivalents and restricted cash 9,966 (11,530) 3,691 Cash, cash equivalents and restricted cash at beginning of year 14,088 25,618 21,927 Cash, cash equivalents and restricted cash at end of year $ 24,054 $ 14,088 $ 25,618 Supplemental Information: Change in accounts payable for additions to property and equipment $ 1,122 $ (4,081) $ 2,185 83two2 business segments:Ohio,Virginia and a family entertainment center in Wisconsin and a retail center in Missouri.North Carolina.subsidiaries, including a 50% owned joint venture entity in which the Company has a controlling financial interest.subsidiaries. The Company has ownership interests greater than 50% in one joint venture that is considered a Variable Interest Entity (VIE) that is also included in the accounts of the Company. The Company is the primary beneficiary of the VIE and the Company’s interest is considered a majority voting interest. The equity interest of outside owners in consolidated entities is recorded as noncontrolling interests in the consolidated balance sheets, and their share of earnings is recorded as net earnings (losses) attributable to noncontrolling interests in the consolidated statements of earnings (loss) in accordance with the partnership agreements. In fiscal 2017, the Company purchased the noncontrolling interest of a joint venture from its former partner.affiliatesequity investments without readily determinable fair values, which are 50% or less owned byrepresents investments in entities where the Company which it does not exercise significanthave the ability to significantly influence or have a controlling financial interest that it accounts for using the cost methodoperations of accounting.Fiscal Years - In October 2015, the Company’s Board of Directors approved a change in the Company’s fiscal year-end from the last Thursday in May to the last Thursday in December. The Company reports on a 52/53-week year. In this Annual Report on Form 10-K, (1) references to fiscal 2017 refer to the 52-week year ended December 28, 2017, (2) references to fiscal 2016 refer to the 52-week year ended December 29, 2016, (3) references to the Transition Period refer to the 31 week transition period from May 29, 2015 to December 31, 2015, and (4) references to fiscal 2015 refer to the 52-week year ended May 28, 2015. Fiscal 2018 will be a 52-week year ending on December 27, 2018.84THE MARCUS CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Description of Business and Summary of Significant Accounting Policies (continued)is not considered cash and cash equivalents for purposes ofalso includes funds held within the statement of cash flows.28, 201730, 2021 and December 29, 2016,31, 2020, respectively, the Company’s $70,000$4,617 and $93,000$1,415 of available for saledebt and equity securities were valued using Level 1 pricing inputs and were included in other long-term assets. At December 28, 2017 and December 29, 2016, respectively, the Company’s $3,983,000 and $1,927,000 ofclassified as trading securities were valued using Level 1 pricing inputs and were included in other current assets.28, 201730, 2021 and December 29, 2016,31, 2020, respectively, the $13,000$689 and $6,000 asset$1,470 liability related to the Company’s interest rate hedge contract was valued using Level 2 pricing inputs.28, 201730, 2021 and December 29, 2016,31, 2020, none of the Company’s recorded assets or liabilities that are measured on a recurring basis at fair market value were valued using Level 3 pricing inputs, other than thoseinputs. Assets and liabilities that are measured on a non-recurring basis are discussed in Note 3.notes receivable and accounts payable) approximates fair value. The fair value of the Company’s $129,143,000$90,000 of senior notes, valued using Level 2 pricing inputs, is approximately $125,188,000$91,212 at December 28, 2017,30, 2021, determined based upon discounted cash flows using current market interest rates for financial instruments with a similar average remaining life. The fair value of the Company's $100,050 of convertible senior notes, valued using Level 2 pricing inputs, is approximately $184,342 at December 30, 2021, determined based on market rates and the closing trading price of the convertible senior notes as of December 30, 2021 (see Note 7 for further discussion on the Company’s senior notes and convertible senior notes). The carrying amounts of the Company’s remaining long-term debt approximate their fair values, determined using current rates for similar instruments, or Level 2 pricing inputs.85THE MARCUS CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Description of Business and Summary of Significant Accounting Policies (continued)and Notes Receivable - The Company evaluates the collectibility of its accounts and notes receivable based on a number of factors. For larger accounts, an allowance for doubtful accounts is recorded based on the applicable parties’ ability and likelihood to pay based on management’s review of the facts. For all other accounts, the Company recognizes an allowance based on length of time the receivable is past due based on historical experience and industry practice. – - Inventories, consisting of food and beverage and concession items, are stated at the lower of cost or market. Cost has been determined using the first-in, first-out method. Inventories of $4,062,000$4,913 and $4,437,000$3,434 as of December 28, 201730, 2021 and December 29, 2016,31, 2020, respectively, were included in other current assets.statesrecords property and equipment at cost. Major renewals and improvements are capitalized, while maintenance and repairs that do not improve or extend the lives of the respective assets are expensed currently. Included in property and equipment are assets related to capitalfinance leases. These assets are depreciated over the shorter of the estimated useful lives or related lease terms.YearsYears Land improvements 10 - 20 Buildings and improvements 12 - 39 Leasehold improvements 3 - 40 Furniture, fixtures and equipment 32 - 20Finance lease right-of-use assets 4 - 15 $51,542,000, $42,085,000, $23,893,000$72,044, $75,067 and $38,368,000$72,244 for fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, respectively.TheIf the long-lived assets are not recoverable, the Company recognizes any impairment losses based on the excess of the carrying amount of the assets over their fair value. For the purpose 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,During fiscal 2021 and fiscal 2020, the Company utilizes currently available market valuationsdetermined that indicators of similar assets in its respective industries, often expressed as a given multiple of operating cash flow. Theimpairment were present. As such, the Company evaluated the ongoing value of its property and equipment and other long-livedthe value of its operating lease right-of-use assets during fiscal 2017, fiscal 2016, the Transition Period and fiscal 2015 and determined that there was no impact on the Company’s results of operations, other than therecorded impairment charges as discussed in Note 2.86THE MARCUS CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Description of Business and Summary of Significant Accounting Policies (continued)the due diligence and legal fees, are expensed as incurred. The excess of the acquisition cost over the fair value of the identifiable net assets is reported as goodwill.TheBeginning in fiscal 2021, the Company performsperformed its annual impairment test on the first day of the fiscal fourth quarter. In prior years, the Company performed its annual impairment test on the last day of itsthe fiscal year. Consistent with the fiscal year change, the annual impairment testing has been changed to the last day of its new fiscal year-end. The Company believes performing the test at the endbeginning of the fourth fiscal yearquarter is preferable as it better aligns with the Company’s forecasting and budgeting process. The change in the annual impairment test is predicated on qualitative factors which are developed and finalized near fiscal year-end.date does not represent a material change to the Company’s method of applying an accounting principle. Goodwill is tested for impairment at a reporting unit level, determined to be at an operating segment level. When reviewing goodwill for impairment, the Company considers the amount of excess fair value over the carrying value of the reporting unit, the period of time since its last quantitative test, and other factors to determine whether or not to first perform a qualitative test. When performing a qualitative test, the Company assesses numerous factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying value. Examples of qualitative factors that the Company assesses include its share price, its financial performance, market and competitive factors in its industry, and other events specific to the reporting unit. If the Company concludes that it is more likely than not that the fair value of its reporting unit is less than itsit carrying value, the Company performs a two-step quantitative impairment test by comparing the carrying value of the reporting unit to the estimated fair value. Noidentifiedindicated as of October 1, 2021.28, 2017 or December 29, 2016.31, 2020. Inhas never recorded athen used this information to determine fair value. During the first, third and fourth quarters of fiscal 2020, the Company determined that the fair value of its goodwill was greater than its carrying value and no impairment loss. December 28,
2017 December 29,
2016 December 31,
2015 May 28,
2015 (in thousands) Balance at beginning of period $ 43,735 $ 44,220 $ 43,720 $ 43,858 Acquisition – – 581 – Sale (105 ) – – – Other – (347 ) – – Deferred tax adjustment (138 ) (138 ) (81 ) (138 ) Balance at end of period $ 43,492 $ 43,735 $ 44,220 $ 43,720 December 30,
2021December 31,
2020December 26,
2019Balance at beginning of period $ 75,188 $ 75,282 $ 43,170 Acquisition — — 32,205 Sale — — — Deferred tax adjustment (93) (94) (93) Balance at end of period $ 75,095 $ 75,188 $ 75,282 $400,000, $277,000, $32,000$23, $48 and $194,000$53 was capitalized in fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, respectively.–-The Company records debt issuance costs on short-term borrowings and long-term debt as a direct deduction from the related debt liability. Debt issuance costs related to the Company’s revolving credit facility are included in other long-term assets. Debt issuance costs are deferred and amortized over the term of the related debt agreements. Amortization of debt issuance costs and amortization of debt discount totaled $308,000, $303,000, $258,000$2,198, $2,235 and $449,000$285 for fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, respectively, and were included in interest expense on the consolidated statements of earnings.87THE MARCUS CORPORATIONNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. DescriptionLeases - The Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2016-02, Leases, (Accounting Standards Codification (ASC) 842), on the first day of Businessfiscal 2019. See Note 8 for further discussion.Summary of Significant Accounting Policies (continued)Investments - Tradingequity securities. These securities are stated at fair value based on listed market prices, where available, with the change in fair value recorded as investment income or loss. Available for sale securities are stated at fair value, with unrealized gains and losses reported as a componentloss within the consolidated statements of shareholders’ equity.earnings (loss). The cost of securities sold is based upon the specific identification method. Realized gains and losses and declines in value judged to be other-than-temporary are included in investment income. The Company evaluates securities for other-than-temporary impairment on a periodic basis and principally considers the type of security, the severity of the decline in fair value, and the duration of the decline in fair value in determining whether a security’s decline in fair value is other-than-temporary. The Company had no investment losses from available for sale securities during fiscal 2017, fiscal 2016, the Transition Period or fiscal 2015.its rooms as earned on the close of business each day. Revenues from theatre admissions, concessions and food and beverage sales are recognized at the time of sale. Revenues from advanced ticket and gift card sales are recorded as deferred revenue and are recognized when tickets or gift cards are redeemed. The Company had deferred revenue of $32,711,000 and $28,485,000, which is included in other accrued liabilities, as of December 28, 2017 and December 29, 2016, respectively. Gift card breakage income is recognized based upon historical redemption patterns and represents the balance of gift cards for which the Company believes the likelihood of redemption by the customer is remote. Gift card breakage income is recorded in other revenues in the consolidated statements of earnings.Other revenues include management fees for theatres and hotels under management agreements. The management fees are recognized as earned based on the terms of the agreements and include both base fees and incentive fees. Revenues do not include sales tax as the Company considers itself a pass-through conduit for collecting and remitting sales tax.88The Marcus CorporationNotes to Consolidated Financial Statements1. Description of Business and Summary of Significant Accounting Policies (continued)management'smanagement’s evaluation of the facts, circumstances and information available at the reporting dates. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, the Company records the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit is recognized in the financial statements. See Note 911 - Income Taxes.treasuryif-converted method. Convertible Class B Common Stock isand convertible debt instruments are reflected on an if-converted basis.basis when dilutive to Common Stock. The computation of the diluted net earnings (loss) per share of Common Stock assumes the conversion of Class B Common Stock in periods that have net earnings since it would be dilutive to Common Stock earnings per share, while the diluted net earnings (loss) per share of Class B Common Stock does not assume the conversion of those shares.the Class B Common Stock. As such, the undistributed earnings (losses) for each yearperiod are allocated based on the proportionate share of entitled cash dividends. The computationof Common Stock assumes the conversion of Class B Common Stock and, as such, the undistributed earnings are equal to net earnings for that computation.89The Marcus CorporationNotes to Consolidated Financial Statements Year Ended 31 Weeks
Ended Year Ended December 28,
2017 December 29,
2016 December 31,
2015 May 28,
2015 (in thousands, except per share data) Numerator: Net earnings attributable to The Marcus Corporation $ 64,996 $ 37,902 $ 23,565 $ 23,995 Denominator: Denominator for basic EPS 27,789 27,551 27,609 27,421 Effect of dilutive employee stock options 614 406 308 266 Denominator for diluted EPS 28,403 27,957 27,917 27,687 Net earnings per share – Basic: Common Stock $ 2.42 $ 1.41 $ 0.88 $ 0.90 Class B Common Stock $ 2.17 $ 1.28 $ 0.80 $ 0.82 Net earnings per share- Diluted: Common Stock $ 2.29 $ 1.36 $ 0.84 $ 0.87 Class B Common Stock $ 2.13 $ 1.27 $ 0.79 $ 0.81 OptionsYear Ended December 30,
2021December 31,
2020December 26,
2019Numerator: Net earnings (loss) attributable to The Marcus Corporation $ (43,293) $ (124,843) $ 42,017 Denominator: Denominator for basic EPS 31,360 31,042 30,656 Effect of dilutive employee stock options — — 496 Denominator for diluted EPS 31,360 31,042 31,152 Net earnings (loss) per share – Basic: Common Stock $ (1.42) $ (4.13) $ 1.44 Class B Common Stock $ (1.25) $ (3.74) $ 1.25 Net earnings (loss) per share- Diluted: Common Stock $ (1.42) $ (4.13) $ 1.35 Class B Common Stock $ (1.25) $ (3.74) $ 1.24 250,0001,999,000 shares, 14,000 shares, 456,0001,706,000 shares and 434,000324,000 shares of common stock at prices ranging from $31.20$18.68 to $31.55, $23.37$41.90, $16.32 to $31.55, $19.74$41.90 and $38.51 to $23.37 and $18.34 to $23.37$41.90 per share were outstanding at December 28, 2017, December 29, 2016,30, 2021, December 31, 20152020 and May 28, 2015,December 26, 2019, respectively, but were not included in the computation of diluted EPS because the options’ exercise price was greater than the average market price of the common shares, and therefore, the effect would be antidilutive.90The Marcus CorporationNotes to Consolidated Financial Statements1. Description of Business and Summary of Significant Accounting Policies (continued) December 28, 2017 December 29, 2016 (in thousands) Unrealized gain (loss) on available for sale investments $ (11 ) $ 3 Net unrecognized actuarial loss for pension obligation (7,414 ) (5,069 ) $ (7,425 ) $ (5,066 ) Concentration of Risk -As of December 28, 2017, 7% of the Company’s employees were covered by a collective bargaining agreement, of which 1% are covered by an agreement that will expire in one year. As of December 29, 2016, 7% of the Company’s employees were covered by a collective bargaining agreement, of which 2% were covered by an agreement that expired within in one year.December 30, 2021 December 31, 2020 Unrecognized loss on interest rate swap agreements $ (509) (1,086) Net unrecognized actuarial loss for pension obligation (10,935) (13,847) $ (11,444) $ (14,933) In May 2014, On January 1, 2021, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09,Revenue from Contracts with Customers, a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issuedCompany adopted ASU No. 2015-14,Revenue from Contracts with Customers: Deferral of Effective Date, to defer2019-12, Income Taxes (Topic 740): Simplifying the effective date of the new revenue recognition standard by one year.Accounting for Incomes Taxes. The new standard is effective for the Companyamendments in fiscal 2018. The guidance may be adopted using either a full retrospective or modified retrospective approach. The Company has selected the modified retrospective method for adoption of ASU No. 2014-092019-12 are designed to simplify the accounting for incomes taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and its related ASU amendments. Under this method, the Company will recognize the cumulative effectsimplify generally accepted accounting principles for other areas of the changes in retained earnings at the date of adoption, but will not restate prior periods.The Company has performed a review of the requirements of ASU 2014-09Topic 740 by clarifying and its related ASUs. In preparation foramending existing guidance. The adoption of the new standard the Company has reviewed its key revenue streams and related customer contracts and has applied the five-step model of the standard to these revenue streams and compared the results to its current accounting practices. The Company believes that the adoption of the new standard will primarily impact its accounting for its loyalty programs and internet ticket fee revenue. While the Company doesdid not believe the adoption of ASU 2014-09 will have a material impact to its resultseffect on the Company’s consolidated financial statements.related expenses for certain items. We currently expect the following impacts:·In accordance with the new guidance, the portion of Theatre admission revenues, Theatre concession revenues and Food and beverage revenues attributable to loyalty points earned by customers will be deferred as a reduction of these revenues until reward redemption. Through December 28, 2017, the Company recorded the estimated incremental cost of redeeming loyalty points at the time they were earned in Advertising and marketing expense. The Company believes adoption of the standard will result in an immaterial reduction of Theatre admission revenues and a corresponding immaterial increase in Theatre concession revenues with an offsetting increase in other long-term liabilities based upon historical customer reward redemption patterns.·The Company currently records internet ticket fee revenues net of third-party commission or service fees. In accordance with ASU 2014-09, the Company believes that it is the principal (as opposed to agent) in the arrangement with third-party internet ticketing companies in regards to sale of internet tickets to customers, and therefore, expects to recognize ticket fee revenue based on a gross transaction price. This change will have the effect of increasing other revenues and other operating expense but will have no impact on net earnings or cash flows from operations.91The Marcus CorporationNotes to Consolidated Financial Statementsexpects to recordadopted ASU No. 2020-06 using a modified retrospective method of transition. As such, the Company recorded a one-time cumulative effect reductionadjustment to retained earnings of approximately $3,500,000the balance sheet and the reported financial information for the historical comparable periods will not be revised and will continue to be reported under the accounting standard in effect during the first quarter of fiscal 2018 relatedhistorical periods. The Company recorded a one-time cumulative effect adjustment to the adoption of ASU 2014-09.Balance at December 31, 2020 Cumulative adjustment Balance at
January 1, 2021Long-term debt $ 193,036 $ 21,393 $ 214,429 Deferred income taxes 33,429 (5,584) 27,845 Capital in excess of par 153,529 (16,511) 137,018 Retained earnings 331,897 702 332,599 February 2016,March 2020, the FASB issued ASU No. 2016-02,Leases2020-04, Reference Rate Reform (Topic 842), intended848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this update provide optional expedients and exceptions for applying generally accepted accounting principles to improve financial reporting relatedcontracts, hedging relationships and other transactions that reference London Interbank Offered Rate (LIBOR) or another reference rate expected to leasing transactions.be discontinued because of reference rate reform. 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 standard2020-14 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,Statementas 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. The standard must be applied using a retrospective transition method for each period presented. The Company does not believe the new standard will have a material effect on its consolidated financial statements or related disclosures.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. The Company reported a $967,000 and $12,553,000 investing cash inflow related to a change in restricted cash for the periods endedMarch 12, 2020 through December 28, 2017 and December 29, 2016, respectively. 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 the 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.31, 2022. The Company will evaluate the effect the new standard will have on its consolidated financial statements prospectively as transactions occur.January 2017,November 2021, the FASB issued ASU No. 2017-04,Intangibles – Goodwill and Other2021-10, Government Assistance (Topic 350) – Simplifying832): Disclosures by Business Entities about Government Assistance. The amendments in this update provide increased transparency of government assistance including the Test for Goodwill Impairment, which eliminates Step 2requirement of certain disclosures in a company’s notes to the goodwill impairment test that had requiredconsolidated financial statements about transactions with 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.government. ASU No. 2017-042021-10 is effective for the Company in fiscal 2020 and must2022 with early adoption permitted. The standard can be applied prospectively.either prospectively to all transactions within the scope of Topic 832 that are reflected in the financial statements as of the adoption date and all new transactions entered into after the date of adoption, or retrospectively. The Company does not believeis evaluating the neweffect that the standard will have a material effect on its related disclosures.92The Marcus CorporationNotesConsolidated Financial Statements1. Descriptionthe customer. A service is transferred to a customer when, or as, the customer obtains control of Business and Summary of Significant Accounting Policies (continued)In February 2017,that service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring the FASB issued ASU No. 2017-05,Other Income – Gains and Losses fromCompany’s progress in satisfying 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 ofperformance obligation in a financial assetmanner that meets the definition of an “in-substance nonfinancial asset” and defines the term “in-substance nonfinancial asset.” It also coversdepicts the transfer of nonfinancial assetsthe services to another entitythe customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised service. The amount of revenue recognized reflects the consideration entitled to in exchange for a non-controlling ownership interestthose services.Fiscal 2021 Reportable Segment Theatres Hotels/Resorts Corporate Total Theatre admissions $ 130,740 $ — $ — $ 130,740 Rooms — 77,650 — 77,650 Theatre concessions 118,666 — — 118,666 Food and beverage — 47,086 — 47,086 21,754 43,219 358 65,331 Cost reimbursements 88 18,683 — 18,771 Total revenues $ 271,248 $ 186,638 $ 358 $ 458,244 Fiscal 2020 Reportable Segment Theatres Hotels/Resorts Corporate Total Theatre admissions $ 64,825 $ — $ — $ 64,825 Rooms — 35,386 — 35,386 Theatre concessions 56,711 — — 56,711 Food and beverage — 24,822 — 24,822 10,764 27,552 426 38,742 Cost reimbursements 324 16,878 — 17,202 Total revenues $ 132,624 $ 104,638 $ 426 $ 237,688 Fiscal 2019 Reportable Segment Theatres Hotels/Resorts Corporate Total Theatre admissions $ 284,141 $ — $ — $ 284,141 Rooms — 105,857 — 105,857 Theatre concessions 231,237 — — 231,237 Food and beverage — 74,665 — 74,665 40,825 46,547 433 87,805 Cost reimbursements 877 36,281 — 37,158 Total revenues $ 557,080 $ 263,350 $ 433 $ 820,863 entity. The new guidance is effective for interimnot considered contract revenue from contracts with customers under ASC 606.annual periods beginning after December 15, 2017. per share data)does not believe thatrecognizes revenue from its rooms as earned on the adoptionclose of business each day. Revenue from theatre admissions, theatre concessions and food and beverage sales are recognized at the time of sale.new standard will have a material effectagreements. The management fees include variable consideration that is recognized based on its consolidated financial statements.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 presentedaddition, other revenues include pre-show advertising income in the sameCompany’s theatres. Pre-show advertising revenue includes variable consideration, primarily based on attendance levels, that is allocated to distinct time periods that make up the overall performance obligation.statement line item as other employee compensation costs arising from services rendered during the period. Other components(loss) or net earnings (loss).net periodic benefit cost areCompany’s revenue recognition may differ from the timing of payment by customers. However, the Company typically receives payment within a very short period of time of when the revenue is recognized. The Company records a receivable when revenue is recognized prior to be presented separately,payment and it has an unconditional right to payment. Alternatively, when payment precedes the provision for the related services, deferred revenue is recorded until the performance obligation is satisfied.an appropriately titled line item outsidedeferred revenues as of any subtotalDecember 31, 2020. During fiscal 2020, the Company recognized revenue of operating income or disclosed$13,579 that was included in deferred revenues as of December 26, 2019. The majority of the Company’s deferred revenue relates to non-redeemed gift cards, advanced ticket sales and the Company’s loyalty program.footnotes.Company’s consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. The standard also limitsCompany recognizes revenue as the tickets are redeemed, which is expected to occur within the next two years.eligible for capitalizationof transaction price allocated to the service cost component. The standardremaining performance obligations related to the amount of Hotels and Resorts non-redeemed gift cards was $3,774 and is effective forreflected in the CompanyCompany’s consolidated balance sheet as part of deferred revenues, which is included in fiscal 2018.other accrued liabilities. The Company recorded expensesrecognizes revenue as the gift cards are redeemed, which is expected to occur within the next two years.$1,712,000the Company’s revenue is recognized in less than one year from the original contract.$1,519,000 in operating income for the periods ended December 28, 2017 and December 29, 2016, respectively, that will be excluded from operating income upon the adoption of ASU No. 2017-07.In May 2017, the FASB issued ASU No. 2017-09,Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, to provide clarity and reduce both the 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 changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. ASU No. 2017-09 is effective for the Company inper share data)2018 and must be applied prospectively to an award modified on or after the adoption date. The Company does not believe the new standard will have a material effect on its consolidated financial statements.In August 2017, the FASB issued ASU No. 2017-12,Targeted Improvements to Accounting for Hedging Activities, which amends the hedge accounting recognition and presentation requirements in Accounting Standards Codification 815,Derivatives and Hedging (Topic 815). ASU No. 2017-12 is designed to improve the transparency and understandability of information about an entity’s risk management activities and to reduce the complexity of and simplifying the application of hedge accounting. ASU No 2017-12 is effective for the Company in fiscal 2019 and early adoption is permitted. The company does not believe the new standard will have a material effect on its consolidated financial statements.2. Impairment ChargeIn fiscal 2015,2021, the Company determined that indicators of impairment were evidentpresent at a specific hotel location and thatcertain theatre asset groups. For certain of the theatre asset groups evaluated for impairment, the sum of the estimated undiscounted future cash flows attributable to this assetcertain theatre assets was less than itstheir carrying amount. As such, theamounts. The Company evaluated the ongoingfair value of this assetthese assets, consisting primarily of land, building, leasehold improvements, furniture, fixtures and equipment, and operating lease right-of-use assets less lease obligations, and determined that the fair value, measured using Level 3 pricing inputs (estimated(using estimated discounted cash flows over the life of the primary assets, including estimated sale proceeds), was less than itstheir carrying value and recorded a $2,600,000 impairment loss.losses of $5,766, reducing certain property and equipment and certain operating lease right-of-use assets. The remaining net book value of all impaired assets was $11,689 as of December 30, 2021, excluding any applicable remaining lease obligations.also determined during fiscal 2015 that indicators of impairment were evident at fourall asset groups. For certain theatre locationsasset groups evaluated for impairment, the sum of the estimated undiscounted future cash flows attributable to these assets was less than their carrying amounts. The Company evaluated the fair value of these assets, consisting primarily of land, building, leasehold improvements, furniture, fixtures and equipment, and operating lease right-of-use assets less lease obligations, and determined that the fair value, measured using Level 3 pricing inputs (using estimated discounted cash flows over the life of the primary assets, including estimated sale proceeds) was less than their carrying value and recorded a $22,076 impairment loss, reducing certain property and equipment and certain operating lease right-of-use assets. The remaining net book value of all impaired assets was $33,313 as of December 31, 2020, excluding any applicable remaining lease obligations.closed or expectedLevel 3 pricing inputs, including future revenues attributable to close in the future. Thetrade name, a royalty rate (1.0% as of December 31, 2020) and a discount rate (17.0% as of December 31, 2020). During fiscal 2020, the Company determined that the fair value of these assets, measured using Level 3 pricing inputs (estimated sales proceeds based on comparable sales),the asset was less than theirthe carrying valuesvalue and recorded a $319,000 pre-tax$2,600 impairment loss. The fair value of the impaired assetstrade name intangible asset was $7,737,000$6,900 as of May 28, 2015.93The Marcus CorporationNotes to Consolidated Financial Statements3.December 16, 2016,February 1, 2019, the Company acquired 14 owned and/or leased movie22 dine-in theatres along withRonnie’s Plaza, an 84,000 square foot retail center 208 screens located in St. Louis, Missouri,nine Southern and Eastern states from WehrenbergVSS-Southern Theatres (“Wehrenberg”)LLC (Movie Tavern) for a total cash purchase price of $65,000,000, plus normal closing$139,310, consisting of $30,000 in cash, subject to certain adjustments, and less2,450,000 shares of the company’s Common Stock with a negative net working capital balance that was assumed invalue of $109,197, based on the transaction.Company’s closing share price as of January 31, 2019. The acquisition was treated as a purchase in accordance with ASC No. 805,Business Combinations, which requires allocation of the purchase price to the estimated fair values of assets and liabilities acquired in the transaction. The Company obtained assistance from a third party valuation specialist in order to assist in the determination of fair value. The Company provided assumptions to the third party valuation firm based on information available to it at the acquisition date, including both quantitative and qualitative information about the specified assets or liabilities. The Company primarily utilized the third party to accumulate comparative data from multiple sources and assemble a report that summarized the information obtained. The Company then used the information to determine fair value. The third party valuation firm was supervised by Company personnel who are knowledgeable about valuations and fair values. The Company finalized the fair values for both tangible and intangible assets and the liabilities during the fourth quarter of fiscal 2017. 2019. December 29, 2016 Changes December 28, 2017 Other current assets $ 1,408 $ - $ 1,408 Property and equipment(1) 80,205 11,433 91,638 Other (long-term assets)(2) 2,468 (946 ) 1,522 Accounts payable (1,031 ) - (1,031 ) Taxes other than income taxes (331 ) - (331 ) Other accrued liabilities (1,442 ) 245 (1,197 ) Capital lease obligations (17,511 ) (7,003 ) (24,514 ) Deferred income taxes - 71 71 Deferred compensation and other(3) - (3,800 ) (3,800 ) Total $ 63,766 $ - $ 63,776 (1)Amounts recorded for propertyOther current assets $ 4,855 include land, building, leasehold improvements and equipment, including capital(1)95,021 Operating lease right-of-use assets 160,567 Deferred tax asset 753 9,710 32,205 Taxes other than income taxes (206) Other accrued liabilities (3,322) Operating lease obligations (160,273) Total $ 139,310 (2)Amounts recorded for intangible assets include the value of in-place leases and favorable lease rights related toRonnie’s Plaza(3)Amounts recorded in deferred compensation and other include unfavorable lease obligationsmeasurement of tangible and intangible assets and liabilitiesmeasurements were primarily based on significant inputs that are not observable in the market and thus represent Level 3 measurements within the fair value measurement hierarchy. Level 3values werevalue was determined usingthrough a varietydiscounted cash flow model and the significant assumptions include a 14% discount rate.information, includingthe trade name intangible asset, the Company used an income approach, specifically the relief from royalty method. The significant assumptions used include the estimated future cash flowsannual revenue, the royalty rate (1%), and market comparables.$5,111,000 and $(450,000)$125,839 to revenue and operating income, respectively, in fiscal 2016, including2019. Excluding the impact of acquisition costs.costs, the acquired theatres did not have a material impact on the Company’s fiscal 2019 net earnings. Acquisition costs related to professional fees incurred as a result of the WehrenbergMovie Tavern acquisition were approximately $1,283 and $1,507 during fiscal 20162019 and fiscalapproximately $2,037,000expensed as incurred and were included in administrative expensesexpense in the consolidated statementstatements of earnings.WehrenbergMovie Tavern acquisition occurred at the beginning of fiscal 2016,2018, unaudited pro forma revenues for the Company during fiscal 2016 would have been $607,934,000.2018 were $845,662. The WehrenbergMovie Tavern theatres would not have had a material impact on the Company’s fiscal 20162018 net earnings.94The Marcus CorporationNotes to Consolidated Financial Statements4. Asset SalesOn October 16, 2015, the Company sold the Hotel Phillips for a total purchase price of approximately $13,500,000. Net proceeds to the Company from the sale were approximately $13,100,000, net of transaction costs. The assets sold consisted primarily of land, building, equipment and other assets. Pursuant to the sale agreement, the Company also retained its rights to receive payments under a tax incremental financing (TIF) arrangement with the city of Kansas City, Missouri, which is recorded as a receivable at its estimated net realizable value on the consolidated balance sheet. The result of the transaction was a loss on sale of approximately $70,000. Hotel Phillips Unaudited pro forma revenues for the Transition Period andCompany during fiscal 2015 were $3,925,000 and $9,736,000, respectively. Hotel Phillips operating income for2019 would have been $832,349. The additional five weeks of Movie Tavern theatres operations would not have had a material impact on the Transition Period andCompany’s fiscal 2015 was $291,000 and $739,000, respectively.On October 20, 2017, the Company sold its 11% minority interest in The Westin® Atlanta Perimeter North in Atlanta, Georgia, and recorded a gain of $4,875,000 during the fiscal 2017 fourth quarter, which is included in Gain (loss) on disposition of property, equipment and other assets in the consolidated statement of2019 net earnings.5. December 28, 2017 December 29, 2016 (in thousands) Trade receivables, net of allowances of $161 and $204, respectively $ 11,247 $ 6,349 Other receivables 15,983 8,412 $ 27,230 $ 14,761 December 30, 2021 December 31, 2020 Trade receivables, net of allowances of $1,001 and $1,284, respectively $ 8,981 $ 405 Other receivables 19,921 5,954 $ 28,902 $ 6,359 December 28, 2017 December 29, 2016 (in thousands) Land and improvements $ 146,887 $ 134,306 Buildings and improvements 759,166 699,828 Leasehold improvements 93,451 80,522 Furniture, fixtures and equipment 351,879 312,334 Construction in progress 5,269 19,698 1,356,652 1,246,688 Less accumulated depreciation and amortization 496,588 457,490 $ 860,064 $ 789,198 December 30, 2021 December 31, 2020 Land and improvements $ 129,642 $ 145,671 Buildings and improvements 756,974 759,421 Leasehold improvements 166,060 163,879 Furniture, fixtures and equipment 375,650 374,253 Finance lease right-of-use assets 75,124 75,322 Construction in progress 6,000 3,360 1,509,450 1,521,906 Less accumulated depreciation and amortization 738,258 673,578 $ 771,192 $ 848,328 December 28, 2017 December 29, 2016 (in thousands) Favorable lease right $ 9,152 $ 9,486 Intangible assets 1,040 2,468 Split dollar life insurance policies 10,771 10,131 Other assets 12,318 14,009 $ 33,281 $ 36,094 The Company’s $13,353,000 favorable lease rightDecember 30, 2021 December 31, 2020 Split dollar life insurance policies $ — $ 11,411 Intangible assets 6,987 7,297 Other assets 5,702 12,393 $ 12,689 $ 31,101 being amortized over the expected term of the underlying lease of 40 years and is expected to result in amortization of $334,000 in each of the five succeeding fiscal years. Accumulated amortization of this favorable lease right was $4,201,000 and $3,867,000a trade name valued at $6,900 as of December 28, 201730, 2021 and December 29, 2016, respectively.95The Marcus CorporationNotes to Consolidated Financial Statements5. Additional Balance Sheet Information (continued)The intangible assets include the valuefavorable lease rights related toRonnie’s Plaza, which are being amortized over the terms of the leases ranging from one to 15 years as of December 28, 2017.6.per share data)Capital Lease Obligations December 28, 2017 December 29, 2016 (in thousands, except payment data) Mortgage notes $ 40,543 $ 50,399 Senior notes 129,143 90,286 Unsecured term note due February 2025, with monthly principal
and interest payments of $39,110, bearing interest at 5.75% 2,751 3,053 Revolving credit agreement 130,000 140,000 Debt issuance costs (608 ) (355 ) 301,829 283,383 Less current maturities, net of issuance costs 12,016 12,040 $ 289,813 $ 271,343 December 30, 2021 December 31, 2020 Mortgage notes $ 24,388 $ 24,482 Senior notes 90,000 100,000 Unsecured term note due February 2025, with monthly principal and interest payments of $39, bearing interest at 5.75% 1,356 1,735 Convertible senior notes 100,050 100,050 Payroll Protection Program loans 3,181 3,424 Revolving credit agreement — — Debt issuance costs (3,831) (3,684) Total debt, net of debt issuance costs 215,144 226,007 Less current maturities, net of issuance costs 10,967 10,548 Less debt discount — 22,423 Long-term debt 204,177 193,036 Short-term borrowings 47,346 87,194 Total debt and short-term borrowings, net of issuance costs $ 262,490 $ 313,201 bothbear fixed rate and adjustable, bear interest from 3.00% to 5.03%, have a weighted-average rate of 4.22%4.27% at December 28, 201730, 2021 and 4.70% at December 29, 2016,31, 2020, and mature in fiscal years 20202025 through 2043. The mortgage notes are secured by the related land, buildings and equipment.$129,143,000Credit Agreement provides for a revolving credit facility that matures on January 9, 2025 with an initial maximum aggregate amount of availability of $225,000. At December 30, 2021, there were no borrowings outstanding on the revolving credit facility, which when borrowed, bear interest at LIBOR plus a margin, effectively 3.35% at December 30, 2021. Availability under the $225,000 revolving credit facility was $221,449 as of December 30, 2021 after taking into consideration outstanding letters of credit that reduce revolver availability.20182025 through 2027, require annual principal payments in varying installments and bear interest payable semi-annually at fixed rates ranging from 4.02% to 6.55%4.32%, with a weighted-average fixed rate of 4.70%4.19% at December 28, 201730, 2021 and 5.10%4.17% at December 31, 2020.2016.issue commercial paper through an agreement with a bank, upsettle the conversion in Company stock. As such, the Convertible Notes will continue to a maximumbe classified as long-term. Future convertibility and resulting balance sheet classification of $35,000,000. The agreement requiresthis liability will be monitored at each quarterly reporting date and will be analyzed dependent upon market prices of the Company’s Common Stock during the prescribed measurement period. No Convertible Notes have been converted to date and the Company does not expect any to maintain unused bank linesbe converted within the next 12 months.credit at least equalthe Convertible Notes on September 17, 2020, and in connection with the exercise by the Initial Purchasers of their option to purchase additional Convertible Notes on September 18, 2020, the Company entered into privately negotiated Capped Call Transactions (the “Capped Call Transactions”) with certain of the Initial Purchasers and/or their respective affiliates and/or other financial institutions (the “Capped Call Counterparties”). The Capped Call Transactions are expected generally to reduce potential dilution of the Company’s common stock upon any conversion of the Convertible Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of outstanding commercial paper. Theresuch converted Convertible Notes, as the case may be, in the event that the market price per share of the Company’s common stock, as measured under the terms of the Capped Call Transactions, is greater than the strike price of the Capped Call Transactions, which initially corresponds to the conversion price of the Convertible Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the Convertible Notes. If, however, the market price per share of the Company’s common stock, as measured under the terms of the Capped Call Transactions,no borrowings on commercial paperused to cover eligible employee payroll costs which offset the payroll costs of employees rehired due to the CARES Act. The remaining approximately $918 of expenditures paid were used to offset rent expense, utility costs and mortgage interest expense. The portion of the PPP loan proceeds used for qualified expenses were forgiven under the terms of the CARES Act program during fiscal 2021 and the Company reduced its cumulative subsidiary loan balances by this amount. The remaining loan balances that have not been used for qualified expenses and are expected to be repaid total $3,181 as of December 28, 2017 or December 29, 2016.At December 28, 2017, the Company had a revolving credit facility totaling $225,000,00030, 2021, of which $941 is included in place under an existing credit agreement that maturescurrent maturities of long-term debt, and $2,240 is included in June 2021. There were borrowings of $130,000,000 outstandinglong-term debt on the revolving credit facility at December 28, 2017, bearing interest at LIBOR plus a margin which adjusts based on the Company’s borrowing levels, effectively 2.67% at December 28, 2017 and 1.83% at December 29, 2016. The revolving credit facility requires an annual facility fee of 0.20% on the total commitment. Availability under the line at December 28, 2017 totaled $91,000,000.96The Marcus CorporationNotes to Consolidated Financial Statements6. Long-Term Debt and Capital Lease Obligations (continued)The Company’s loan agreements include, among other covenants, maintenance of certain financial ratios, including a debt-to-capitalization ratio and a fixed charge coverage ratio. The Company is in compliance with all financial debt covenants at December 28, 2017.28, 2017, are:Fiscal Year (in thousands) 2018 $ 12,016 2019 9,955 2020 24,429 2021 140,963 2022 11,014 Thereafter 103,452 $ 301,829 Fiscal Year 2022 $ 10,967 2023 11,028 2024 11,090 2025 124,088 2026 258 Thereafter 57,713 $ 215,144 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 20152019 totaled $11,453,000, $9,105,000, $5,220,000$14,119, $10,885 and $9,353,000,$10,281, respectively.an2 interest rate swap agreementagreements on February 28, 2013March 1, 2018 covering $25,000,000$50,000 of floating rate debt, whichdebt. The first agreement had a notional amount of $25,000, expired March 1, 2021, and required the Company to pay interest at a defined rate of 2.559% while receiving interest at a defined variable rate of one-month LIBOR. The second agreement has a notional amount of $25,000, expires January 22, 2018,March 1, 2023, and requires the Company to pay interest at a defined rate of 0.96%2.687% while receiving interest at a defined variable rate of one-month LIBOR (1.56%(0.125% at December 28, 2017)30, 2021). The notional amountCompanylossincome (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 wasagreements are considered effective and qualifiedqualify as a cash flow hedges. The Company assesses, both at the inception of each hedge from inception through June 16, 2016, at which timeand on an on-going basis, whether the derivative was undesignated andderivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the balance in accumulated other comprehensive loss of $159,000 ($96,000 net of tax) was reclassified into interest expense.hedged items. As of June 16, 2016,December 30, 2021, the remaining interest rate swap was considered ineffective for accounting purposes. As such, the $7,000 increase in thehighly effective. The fair value of the interest rate swap during fiscal 2017on December 30, 2021 was recorded as a reduction toliability of $689 which is included in other long-term obligations in the consolidated balance sheet. The fair value of the interest expense.rate swaps on December 31, 2020, was a liability of $1,470, of which $100 was included in other accrued liabilities and $1,370 was included in other long-term obligations in the consolidated balance sheet. The Company does not expect the interest rate swap to have a material effect on earnings within the next fiscal12 months.asto 45 years, some of which include options to extend and/or terminate the agreement expires January 2018.Subsequentlease. The exercise of lease renewal options is done at the Company’s sole discretion. When deemed reasonably certain of exercise, the renewal options are included in the determination of the lease term and related right-of-use asset and lease liability. The depreciable life of the asset is limited to December 28, 2017,the expected term. The Company’s lease agreements do not contain any residual value guarantees or any restrictions or covenants.entered into two interestuses the implicit rate swap agreements covering $50,000,000in the lease in determining the present value of floatinglease payments. When the lease does not provide an implicit rate, debt which will require the company to pay interestCompany uses its incremental borrowing rate based on the information available at a definedthe lease commencement date, including the fixed rate while receiving interest atthe Company could borrow for a defined variable rate of one-month LIBOR. The first swap hassimilar amount, over a notional amount of $25,000,000, expires on March 1, 2021 and has a fixed rate of 2.559%. The second swap has a notional amount of $25,000,000, expires on March 1, 2023 and has a fixed rate of 2.687%.similar lease term with similar collateral. The Company anticipatesrecognizes right-of-use assets for all assets subject to operating leases in an amount equal to the operating lease liabilities, adjusted for the balances of long-term prepaid rent, favorable lease intangible assets, deferred lease expense, unfavorable lease liabilities and deferred lease incentive liabilities. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term.the interest rates swaps will be considered effective for accounting purposes and will qualify as cash flow hedges. The Company doesdo not expect the interestdepend on an index or rate, swaps to have a material effect on earnings within the next 12 months.97The Marcus CorporationNotes to Consolidated Financial Statements6. Long-Term Debt and Capital Lease Obligations (continued)Capital Lease 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 purchasedincluding those that depend on the Company’s behalf, and then deployed and licensed back to the Company, digital cinema projection systems (the “systems”) forperformance or use by the Company in its theatres. As of December 28, 2017, 642 of the Company’s screens were utilizingunderlying asset, are also expensed as incurred. Lease expense for operating lease payments is recognized on a straight-line basis over the systems under a 10-year master licensing agreement with CDF2. Included lease term.furniture, fixturesthousands, except share and equipment is $45,510,000per share data)Lease Cost Classification Fiscal 2021 Fiscal 2020 Finance lease costs: Amortization of finance lease assets Depreciation and amortization $ 2,732 $ 2,851 Interest on lease liabilities Interest expense 951 1,048 $ 3,683 $ 3,899 Operating lease costs: Operating lease costs Rent expense $ 25,489 $ 25,821 Variable lease cost Rent expense (30) 724 Short-term lease cost Rent expense 135 321 $ 25,594 $ 26,866 the digital systemsleases is as follows:Other Information Fiscal 2021 Fisal 2020 Cash paid for amounts included in the measurement of lease liabilities: Financing cash flows from finance leases $ 2,774 $ 2,007 Operating cash flows from finance leases 951 1,048 Operating cash flows from operating leases 31,136 17,685 Right of use assets obtained in exchange for new lease obligations: Finance lease liabilities — 1,417 Operating lease liabilities, including from acquisitions 2,663 10,957 December 30, 2021 December 31, 2020 Finance leases: Property and equipment – gross $ 75,124 $ 75,322 Accumulated depreciation and amortization (58,197) (55,547) Property and equipment - net $ 16,927 $ 19,775 Lease Term and Discount Rate December 30, 2021 December 31, 2020 Weighted-average remaining lease terms: Finance leases 8 years 9 years Operating leases 13 years 15 years Weighted-average discount rates: Finance leases 4.58% 4.62% Operating leases 4.48% 4.53% 28, 201730, 2021 are as follows:Fiscal Year Operating Leases Finance Leases 2022 $ 26,803 $ 3,404 2023 26,684 3,162 2024 25,468 3,056 2025 25,532 2,897 2026 25,179 2,817 Thereafter 180,524 8,458 Total lease payments 310,190 23,794 Less: amount representing interest (77,331) (4,041) Total lease liabilities $ 232,859 $ 19,753 December 29, 2016, which is being amortized overhad temporarily closed all of its company-owned hotels by April 8, 2020. At that time, the remaining estimated useful lifeCompany began actively working with landlords to discuss changes to the timing of lease payments and contract terms of leases due to the pandemic. The lease terms were negotiated on a lease-by-lease basis with individual landlords. In conjunction with these lease discussions, the Company obtained lease concessions for the majority of its leases. Substantially all of the assets. Accumulated amortizationlease concessions were for the deferral of lease payments into future periods. This resulted in the total payments required by the modified contract being substantially the same as or less than the total payments required by the original contract. The Company has made the policy election to account for these lease concessions as if they were made under the enforceable rights included in the original agreement and are thus outside of the digital systems was $34,471,000modification framework. The Company has elected to account for these concessions as if no changes to the lease contract were made and $28,294,000has continued to recognize rent expense during the deferral period. Deferred rent payments of approximately $2,727 for the Company’s operating leases have been included in the total operating lease obligations as of December 28, 2017 and December 29, 2016, respectively.Under the terms30, 2021, 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 (VPFs) from film distributors to CDF2 each time a digital moviewhich approximately $788 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 VPFs paid by distributors (standard booking commitment) to CDF2. To the extent the VPFs 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 minimumincluded in long-term operating 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 VPFs are paid by the film distributors to CDF2. The Company has recorded the reduction of the obligation associated with the payment of VPFs 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 $5,657,000 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.In conjunction with the Wehrenberg theatre acquisition (see Note 3), 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 is $25,648,000 and $15,799,000 as of December 28, 2017 and December 29, 2016, respectively, related to these leases with accumulated amortization of $2,300,000 as of December 28, 2017. Included in furniture, fixtures and equipment is $1,712,000 as of December 28, 2017 and December 29, 2016 related to these leases with accumulated amortization of $255,000 as of December 28, 2017. The assets are being amortized over the shorter of the estimated useful lives or the remaining lease terms.98The Marcus CorporationNotes to Consolidated Financial Statements6. Long-Term Debt and Capital Lease Obligations (continued)Aggregate minimum future lease payments under these capital leases, assuming the exercise of certain lease options, are as follows as of December 28, 2017:Fiscal Year Future
Minimum Lease
Payments Less Interest Principal (in thousands) 2018 $ 3,127 $ 1,214 $ 1,913 2019 3,125 1,118 2,007 2020 3,030 1,019 2,011 2021 2,731 930 1,801 2022 2,769 842 1,927 Thereafter 19,875 3,331 16,544 $ 34,657 $ 8,454 $ 26,203 7.Stock-BasedShare-Based Compensationten10 votes per share while holders of Common Stock are entitled to one1 vote per share on any matters brought before the shareholders of the Company. Liquidation rights are the same for both classes of stock.28, 2017,30, 2021, the Company’s Board of Directors has approved the repurchase of up to 11,687,500 shares of Common Stock to be held in treasury. The Company intends to reissue these shares upon the exercise of stock options and for savings and profit-sharing plan contributions. The Company purchased 28,898, 333,827, 3,669repurchased 61,654, 37,567 and 54,74230,139 shares pursuant to these authorizations during fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, respectively. At December 28, 2017,30, 2021, there were 2,869,4222,657,340 shares available for repurchase under these authorizations.28, 2017,30, 2021, there were 440,967421,870 shares available under this authorization.4,937,5007,437,500 shares of Common Stock under various equity incentive plans. OptionsStock options granted under the plans to employees generally become exercisable either 40% after two years, 60% after three years, 80% after four years and 100% after five years of the date of grant, or 50% after two years, 75% after three years and 100% after four years of the date of grant, depending on the date of grant. The options generally expire ten years from the date of grant as long as the optionee is still employed with the Company.99The Marcus CorporationNotes to Consolidated Financial Statements7.Stock-BasedShare-Based Compensation (continued)aremay be issued from previously acquired treasury shares. At December 28, 2017,30, 2021, there were 1,151,5891,851,090 shares available for grants of additional stock options, non-vested stock and other types of equity awards under the current plan.Stock-based2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015: Year Ended
December 28, 2017 Year Ended
December 29, 2016 31 Weeks Ended
December 31, 2015 Year Ended
May 28, 2015 Risk-free interest rate 2.08 – 2.20% 1.07 – 1.64% 1.30 – 2.13% 1.31 – 2.32% Dividend yield 2.10% 2.29% 2.26% 2.5% Volatility 34 – 43% 29 – 48% 36 – 48% 37 – 49% Expected life 7 – 8 years 4 – 9 years 4 – 9 years 4 – 9 years Year Ended Risk-free interest rate 0.97 – 1.26% 0.40 – 1.26% 2.50 – 2.60% Dividend yield 1.50 – 1.50% 1.70 – 1.90% 1.70% Volatility 28 - 53% 27 – 41% 27 – 32% Expected life 6 – 8 years 6 – 8 years 6 – 8 years stock-basedshare-based compensation expense was $2,411,000, $1,899,000, $975,000$9,316, $4,385 and $1,499,000$3,523 in fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, respectively. The recognized tax benefit on stock-basedshare-based compensation was $1,227,000, $840,000, $418,000$1,997, $771 and $689,000$1,127 in fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, respectively.100The Marcus CorporationNotes to Consolidated Financial Statements7. Shareholders’ Equity and Stock-Based Compensation (continued) December 28, 2017 December 29, 2016 December 31, 2015 May 28, 2015 Weighted- Weighted- Weighted- Weighted Average Average Average Average Exercise Exercise Exercise Exercise Options Price Options Price Options Price Options Price (options in thousands) Outstanding at beginning of period 1,563 $ 15.94 1,707 $ 15.71 1,526 $ 14.75 1,566 $ 14.06 Granted 273 31.08 185 19.45 284 20.22 276 18.35 Exercised (133 ) 17.04 (245 ) 16.23 (68 ) 12.69 (215 ) 13.81 Forfeited (74 ) 22.37 (84 ) 18.21 (35 ) 16.25 (101 ) 15.87 Outstanding at end of period 1,629 18.08 1,563 15.94 1,707 15.71 1,526 14.75 Exercisable at end of period 988 $ 14.69 904 $ 14.28 961 $ 14.57 840 $ 14.90 Weighted-average fair value of
options granted during the period $10.54 $5.94 $6.57 $5.98 Year Ended December 30, 2021 December 31, 2020 December 26, 2019 Options Weighted-
Average
Exercise
PriceOptions Weighted-
Average
Exercise
PriceOptions Weighted-
Average
Exercise
PriceOutstanding at beginning of period 2,234 $ 24.87 1,641 $ 25.46 1,450 $ 21.25 Granted 531 21.74 728 23.47 329 41.67 Exercised (134) 11.42 (31) 12.21 (97) 15.60 Forfeited (98) 26.60 (104) 28.06 (41) 30.58 Outstanding at end of period 2,533 24.84 2,234 24.87 1,641 25.46 Exercisable at end of period 1,119 $ 24.76 1,001 $ 20.38 802 $ 18.22 Weighted-average fair value of options granted during the period $ 9.47 $ 5.96 $ 11.79 28, 2017,30, 2021 ranged from $10.00$12.71 to $31.55.$41.90. The weighted-average remaining contractual life of those options is 5.66.6 years. The weighted-average remaining contractual life of options4.04.4 years. There were 1,577,0002,486,000 options outstanding, vested and expected to vest as of December 28, 201730, 2021, with a weighted-average exercise price of $17.84$24.87 and an intrinsic value of $15,656,000.$1,965. Additional information as of December 30, 2021 related to these options outstanding segregated by exercise price range is as follows: Exercise Price Range $10.00 to
$13.12 $13.13 to
$18.34 $18.35 to
$31.55 (options in thousands) Options outstanding 526 454 649 Weighted-average exercise price of options outstanding $ 12.13 $ 16.24 $ 24.19 Weighted-average remaining contractual life of options outstanding 4.2 3.5 8.3 Options exercisable 489 371 128 Weighted-average exercise price of options exercisable $ 12.06 $ 15.79 $ 21.49 Exercise Price Range Options outstanding 827 765 941 Weighted-average exercise price of options outstanding $ 16.18 $ 23.66 $ 33.42 Weighted-average remaining contractual life of options outstanding 4.5 8 7.2 Options exercisable 580 205 334 Weighted-average exercise price of options exercisable $ 17.55 $ 26.96 $ 35.89 28, 201730, 2021 was $15,854,000$1,996 and the intrinsic value of options exercisable at December 28, 201730, 2021 was $12,410,000.$756. The intrinsic value of options exercised was $1,770,000, $1,676,000, $485,000$1,164, $0 and $1,181,000$2,135 during fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, respectively. As of December 28, 2017,30, 2021, total remaining unearned compensation cost related to stock options was $3,861,000,$6,336, which will be amortized to expense over the remaining weighted-average life of 3.42.6 years.101The Marcus CorporationNotes to Consolidated Financial Statements7. Shareholders’ Equity and Stock-Based Compensation (continued) December 28, 2017 December 29, 2016 December 31, 2015 May 28, 2015 Weighted- Weighted- Weighted- Weighted Average Average Average Average Fair Fair Fair Fair Shares Value Shares Value Shares Value Shares Value (options in thousands) Outstanding at beginning of period 143 $ 19.30 134 $ 16.54 114 $ 15.39 98 $ 13.61 Granted 37 29.12 36 24.54 34 19.24 30 19.38 Vested (36 ) 18.78 (25 ) 12.13 (14 ) 12.55 (14 ) 11.72 Forfeited (7 ) 22.86 (2 ) 18.72 – – – – Outstanding at end of period 137 21.94 143 19.30 134 16.54 114 15.39 Year Ended December 30, 2021 December 31, 2020 December 26, 2019 Shares Weighted-
Average
Fair
ValueShares Weighted-
Average
Fair
ValueShares Weighted-
Average
Fair
ValueOutstanding at beginning of period 147 $ 31.02 174 $ 29.16 158 $ 18.98 Granted 251 19.63 42 31.43 39 38.24 Vested (32) 30.69 (69) 26.56 (23) 18.60 Forfeited (9) 19.77 — — — — Outstanding at end of period 357 $ 23.32 147 $ 31.02 174 $ 29.16 28, 2017,30, 2021, total remaining unearned compensation related to non-vested stock was $2,004,000,$3,022, which will be amortized over the weighted-average remaining service period of 3.7 years.8.2.0 yearsPrior to fiscal 2017, the plan provided for a contribution of a minimum of 1% of defined compensation for all plan participants and matching of 25% of employee contributions up to 6% of defined compensation. In addition, the Company made additional discretionary contributions. During fiscal 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015,2019, the 1% andfirst 2% of the discretionary contributions werematching contribution was made with the Company’s common stock. During fiscal 2016, the plan was amended with an effective datethe account-based supplemental plan. The curtailment resulted in a pre-tax gain of $251,000 during fiscal 2016. Pensionthousands, except share and profit-sharing expense for all plans was $4,415,000, $3,960,000, $2,362,000 and $3,581,000 for fiscal 2017, fiscal 2016, the Transition Period and fiscal 2015, respectively.102The Marcus CorporationNotes to Consolidated Financial Statements8. Employee Benefit Plans (continued)28, 201730, 2021 and December 29, 201631, 2020 measurement dates is as follows: December 28,
2017 December 29,
2016 (in thousands) Change in benefit obligation: Benefit obligation at beginning of period $ 32,523 $ 31,671 Service cost 765 865 Interest cost 1,356 1,406 Actuarial loss 4,244 82 Curtailment - (261 ) Benefits paid (1,249 ) (1,240 ) Benefit obligation at end of year $ 37,639 $ 32,523 Amounts recognized in the statement of financial position consist of: Current accrued benefit liability (included in Other accrued liabilities) $ (1,347 ) $ (1,252 ) Noncurrent accrued benefit liability (included in Deferred compensation and other) (36,292 ) (31,271 ) Total $ (37,639 ) $ (32,523 ) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ 12,874 $ 9,049 Prior service credit (579 ) (642 ) Total $ 12,295 $ 8,407 Year Ended 31 Weeks
Ended Year Ended December 29,
2016 December 31,
2015 May 28,
2015 (in thousands) Net periodic pension cost: Service cost $ 765 $ 865 $ 459 $ 697 Interest cost 1,356 1,406 765 1,243 Net amortization of prior service cost and actuarial loss 356 364 211 326 Curtailment gain - (251 ) – – $ 2,477 $ 2,384 $ 1,435 $ 2,266 103December 30,
2021December 31,
2020Change in benefit obligation: Benefit obligation at beginning of period $ 48,604 $ 43,824 Service cost 1,122 1,095 Interest cost 1,201 1,371 Actuarial (gain) loss (2,630) 3,806 Benefits paid (1,470) (1,492) Benefit obligation at end of year $ 46,827 $ 48,604 Amounts recognized in the statement of financial position consist of: Current accrued benefit liability (included in Other accrued liabilities) $ (1,674) $ (1,401) Noncurrent accrued benefit liability (included in Other long-term obligations) (45,153) (47,203) Total $ (46,827) $ (48,604) Amounts recognized in accumulated other comprehensive loss consist of: Net actuarial loss $ 15,120 $ 19,125 Prior service credit (323) (387) Total $ 14,797 $ 18,738 Year Ended December 30, 2021 December 31, 2020 December 26, 2019 Net periodic pension cost: Service cost $ 1,122 $ 1,095 $ 833 Interest cost 1,201 1,371 1,485 Net amortization of prior service cost and actuarial loss 1,311 990 436 $ 3,634 $ 3,456 $ 2,754 Marcus CorporationNotes to Consolidated Financial Statements8. Employee Benefit Plans (continued)The $7,414,000$10,935 loss, net of tax, included in accumulated other comprehensive loss at December 28, 2017,30, 2021, consists of the $7,763,000$11,174 net actuarial loss, net of tax, and the $349,000$239 unrecognized prior service credit, net of tax, which have not yet been recognized in the net periodic benefit cost. The $5,069,000$13,847 loss, net of tax, included in accumulated other comprehensive loss at December 29, 2016,31, 2020, consists of the $5,457,000$14,133 net actuarial loss, net of tax, and the $388,000$286 unrecognized prior service credit, net of tax, which have not yet been recognized in the net periodic benefit cost.$31,769,000$42,853 and $28,151,000$43,548 as of December 28, 201730, 2021 and December 29, 2016,31, 2020, respectively.during fiscal 2017 consisted of the current year net actuarial loss of $4,244,000, the amortization of the net actuarial loss of $420,000, and the amortization of the prior service credit of $64,000. The pre-tax change in the benefit obligation recognized in other comprehensive loss during fiscal 2016 consisted of the net actuarial loss of $82,000, the amortization of the net actuarial loss of $442,000, the amortization of the prior service credit of $329,000 and the recognition of the plan change credit of $261,000. The estimated amount that will be amortized from accumulated other comprehensive loss into net periodic benefit cost in fiscal 2018 is $620,000, of which $684,000 relates to the actuarial loss and $64,000 relates to the prior service credit.Year Ended December 30, 2021 December 31, 2020 (in thousands) Net actuarial (gain) loss $ (2,630) 3,806 Amortization of the net actuarial loss (1,375) (1,055) Amortization of the prior year service credit 64 64 Total $ (3,941) 2,815 December 28, 2017 December 29, 2016 Discount rate 3.60 % 4.15 % Rate of compensation increase 4.00 % 4.00 % December 30, 2021 December 31, 2020 Discount rate 2.85% 2.45% Rate of compensation increase 4.00% 4.00% Year Ended 31 Weeks
Ended December 28,
2017 December 29,
2016 December 31,
2015 Year Ended
May 28, 2015 Discount rate 4.15 % 4.40 % 4.20 % 4.30 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 4.00 % December 30, 2021 December 31, 2020 December 26, 2019 Discount rate 2.45% 3.10% 4.15% Rate of compensation increase 4.00% 4.00% 4.00% 28, 2017, are:Fiscal Year (in thousands) 2018 $ 1,347 2019 1,480 2020 1,453 2021 1,476 2022 1,497 Years 2023 – 2027 11,045 104Fiscal Year 2022 $ 1,697 2023 1,759 2024 1,975 2025 2,204 2026 2,357 Years 2026 – 2030 15,043 The Marcus CorporationNotes to Consolidated Financial Statements9. December 28, 2017 December 29, 2016 (in thousands) Accrued employee benefits $ 13,736 $ 17,682 Depreciation and amortization (55,466 ) (67,897 ) Other 3,497 3,782 Net deferred tax liability $ (38,233 ) $ (46,433 ) December 30, 2021 December 31, 2020 Deferred tax assets Accrued employee benefits $ 17,669 $ 16,685 Operating lease liabilities 59,622 64,055 Gift card liabilities 7,318 5,098 Net operating loss, disallowed interest & tax credit carryforwards 24,166 21,525 Other 6,876 876 Total 115,651 108,239 Less valuation allowance (2,415) — Deferred tax assets 113,236 108,239 Deferred tax liabilities Depreciation and amortization (73,898) (82,964) Operating lease assets (55,489) (58,704) Deferred tax liabilities (129,387) (141,668) Net deferred tax liability $ (16,151) $ (33,429) Amounts recognized in the consolidated balance sheets consist of: Deferred income taxes - other assets $ 10,032 $ — Deferred income taxes - liabilities (26,183) (33,429) Net amount recognized $ (16,151) $ (33,429) decrease inCompany has a federal net operating loss carryforward of $26,003 and federal tax credit carryforwards of $3,463 as of December 30, 2021. The Company has state net operating loss carryforwards of $237,019 as of December 30, 2021 which may be used over various periods ranging from 1 to 20 years. In fiscal 2021, the Company’sCompany established a valuation allowance of $2,415 for a portion of its state net deferred tax liability is dueoperating loss carryforwards that are not more likely than not to a $21,240,000 reduction in its net deferred tax liability resulting from the reduction in the corporate tax rate enacted in December 2017 under the Tax Cuts and Jobs Act of 2017. Excluding this favorable impact, the Company’s net deferred tax liability would have increased by $13,040,000. Year Ended 31 Weeks Ended Year Ended December 28,
2017 December 29,
2016 December 31,
2015 May 28,
2015 (in thousands) Current: Federal $ 8,707 $ 15,434 $ 12,688 $ 8,065 State 1,558 4,667 3,240 2,120 Deferred: Federal (7,155 ) 3,402 (829 ) 4,328 State 515 (509 ) (314 ) 1,165 $ 3,625 $ 22,994 $ 14,785 $ 15,678 Included Year Ended December 30, 2021 December 31, 2020 December 26, 2019 Current: Federal $ 13 $ (32,626) $ 1,187 State 129 526 2,041 Deferred: Federal (12,629) (24,751) 9,228 State (3,214) (14,085) (136) $ (15,701) $ (70,936) $ 12,320 the deferred federal income tax amount is a $21,240,000 tax benefit related to the Tax Cutthousands, except share and Jobs Act of 2017.2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015 was 5.3%, 37.8%, 38.6% and 39.5%,2019, respectively. The Company's effective income tax rate during fiscal 2020 benefitted from several accounting method changes and the March 27, 2020 signing of the CARES Act, one of the provisions of which allows the Company's 2019 and 2020 taxable losses to be carried back to prior fiscal years during which the federal income tax rate was 35.0%, compared to the current statutory federal income tax rate of 21.0%. During fiscal 2020, the Company recorded a $21,240,000current tax benefitbenefits of $11,976 and deferred tax benefits of $8,095 related to the reduction of its net deferredCARES Act and tax liability resulting fromaccounting changes. Excluding these favorable impacts, the reduction in the corporate tax rate enacted in December 2017 under the Tax Cuts and Jobs Act of 2017. Excluding this favorable impact, the Company'scompany’s effective income tax rate for fiscal 20172020 was 36.2%26.0%. The Company has not included the income tax expense or benefit related to the net earnings or loss attributable to noncontrolling interestinterests in its income tax expense as the entities areentity is considered a pass-through entitiesentity and, as such, the income tax expense or benefit is attributable to its owners.105December 30, 2021 December 31, 2020 December 26, 2019 Statutory federal tax rate 21.0 % 21.0 % 21.0 % Tax benefit from CARES Act and accounting method changes — 10.3 — State income taxes, net of federal income tax benefit 6.7 5.0 5.5 Tax credits, net of federal income tax benefit 1.6 0.2 (2.7) Valuation allowance (4.1) — — Other 1.4 (0.3) (1.1) 26.6 % 36.2 % 22.7 % The Marcus CorporationNotes to Consolidated Financial Statements9. Income Taxes (continued) Year Ended 31 Weeks
Ended Year Ended December 28,
2017 December 29,
2016 December 31,
2015 May 28,
2015 Statutory federal tax rate 35.0 % 35.0 % 35.0 % 35.0 % Tax benefit from Tax Cuts and Jobs Act of 2017 (30.9 %) – – – State income taxes, net of federal income tax benefit 4.8 4.8 5.1 5.3 Tax credits, net of federal income tax benefit (0.8 ) (0.9 ) (1.0 ) (1.1 ) Other (2.8 ) (1.1 ) (0.5 ) 0.3 5.3 % 37.8 % 38.6 % 39.5 % 2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015 totaled $23,691,000, $25,017,000, $8,270,0002019 were $(8,316), $(33,275) and $10,918,000,$3,062, respectively.was able to make a reasonable estimate of the impact of the Tax Cuts and Jobs Act of 2017, including the reduction in the corporate tax rate and the provisions related to executive compensation and 100% bonus depreciation on qualifying property. However, given the Act's broad and complex changes, further clarification, interpretation and regulatory guidance could affect the assumptions the Company used in making its reasonable estimate. Following the guidance of the U.S. Securities and Exchange Commission's Staff Accounting Bulletin No. 118, any adjustments to the Company’s estimate will be reported as a component of income tax expense in 2018 and disclosed in the period when any such adjustments have been determined within the one-year measurement period.A reconciliation of the beginning and ending gross amounts of unrecognized tax benefit are as follows: Year Ended 31 Weeks
Ended Year Ended December 28,
2017 December 29,
2016 December 31,
2015 May 28,
2015 (in thousands) Balance at beginning of year $ 414 $ 414 $ 431 $ 102 Increases due to: Tax positions taken in prior years - - - 543 Tax positions taken in current year - - - - Decreases due to: Tax positions taken in prior years - - - - Settlements with taxing authorities - - (17 ) (214 ) Lapse of applicable statute of limitations (312 ) - - - Balance at end of year $ 102 $ 414 $ 414 $ 431 The Company’s totalhad no unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate were $67,000 as of December 28, 2017, December 29, 2016,30, 2021, December 31, 20152020 and May 28, 2015. At December 28, 2017, the26, 2019. The Company had no accrued interest of $54,000 and no accrued penalties, compared to accrued interest of $130,000 and no accruedor penalties at December 29, 2016.30, 2021 or December 31, 2020. The Company classifies interest and penalties relating to income taxes as income tax expense. For the year ended December 28, 2017, $50,00030, 2021, $60 of interest and no accrued penalties wereincome was recognized in the consolidated statement of earnings (loss), compared to $153,000$296 of interest and no accrued penaltiesincome for the year ended December 29, 2016, $108,00031, 2020 and $1 of interest and no accrued penalties for the Transition Period and $89,000 of interest and no accrued penaltiesincome for the year ended May 28, 2015.106The Marcus CorporationNotes to Consolidated Financial Statements9. Income Taxes (continued)The Company’s income tax return forIn the Transition Period is currently under examination by the Internal Revenue Service. During fiscal 2015,fourth quarter of 2021, the Company settled, with no significant change, an examination by the Internal Revenue Service of its fiscal 2019 and 2020 income tax return forreturns. The examination included the previous five fiscal 2012. The Company's federal income tax returns are no longer subjectyears, to examination priorthe extent that net operating losses were carried back to those fiscal 2015.years under the CARES Act. With certain exceptions, the Company's state income tax returns are no longer subject to examination prior to fiscal 2014.2017. At this time, the Company does not expect the results from any income tax audit or appeal to have a significant impact on the Company's financial statements.The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months.10.Lease The Company leases real estate under various noncancellable operating leases with an initial term greater than one year that contain multiple renewal options, exercisable at the Company’s option. The Company recognizes rent expense on a straight-line basis over the expected lease term, including cancelable option periods where failure to exercise such options would result in an economic penalty. Percentage rentals are based on the revenues at the specific rented property. Rental payments on capital leases are not recorded in rent expense but are recorded as a reduction of the capital lease obligation and interest expense (see Note 6). Rent expense charged to operations under operating leases was as follows: Year Ended Year Ended December 31,
2015 May 28,
2015 (in thousands) Fixed minimum rentals $ 12,027 $ 7,707 $ 4,693 $ 8,064 Amortization of favorable lease right 334 334 194 334 Percentage rentals 708 343 153 193 Amortization of unfavorable leases (1,200 ) – – – 11,869 $ 8,384 $ 5,040 $ 8,591 Aggregate minimum rental commitments under long-term operating leases, assuming the exercise of certain lease options, are as follows at December 28, 2017:Fiscal Year (in thousands) 2018 $ 11,426 2019 10,659 2020 9,356 2021 8,782 2022 9,016 Thereafter 71,841 $ 121,080 Commitments -$2,505,000$11,776 at December 28, 2017.- The– As of December 30, 2021, the Company hashad license rights to operate three hotels using the Hilton trademark, one hotel using the InterContinental trademark and two hotels using the Marriott trademark. Under the terms of the licenses, the Company is obligated to pay fees based on defined gross sales.107The Marcus CorporationNotes to Consolidated Financial Statements11.28, 201730, 2021 and December 29, 2016,31, 2020, the Company held investments with aggregate carrying values of $4,239,000$2,335 and $6,096,000, respectively, in several$2,084, respectively. Investments at December 30, 2021 included two joint ventures accounted for under the equity method. Investments at December 31, 2020 included one of which isjoint venture accounted for under the equity method and two investments without readily determinable fair values in which the Company surrendered or sold its ownership interest during fiscal 2021.which are accountedMonaco with a non-recourse mortgage loan. In connection with this mortgage loan, the Company provided an environmental indemnity and a “bad boy” guaranty that provides that the lender can recover losses from the Company for certain bad acts of the Monaco joint venture, such as but not limited to fraud, intentional misrepresentation, voluntary incurrence of prohibited debt, prohibited transfers of the collateral, and voluntary bankruptcy of the Monaco joint venture. Under the terms of the Monaco joint venture operating agreement, Searchlight has fully indemnified the Company under the cost method.12.“bad boy” guarantees for any losses other than those attributable to the Company’s own bad acts and has indemnified the Company to its proportionate liability under the environmental liability.2017,2021, fiscal 2016, the Transition Period2020 and fiscal 2015: Theatres Hotels/
Resorts Corporate
Items Total (in thousands) Fiscal 2017 Revenues $ 401,291 $ 220,866 $ 557 $ 622,714 Operating income (loss) 80,319 12,748 (17,472 ) 75,595 Depreciation and amortization 33,448 17,912 359 51,719 Assets 637,723 313,942 66,132 1,017,797 Capital expenditures and acquisitions 93,676 20,604 524 114,804 Fiscal 2016 Revenues $ 328,165 $ 215,171 $ 528 $ 543,864 Operating income (loss) 71,754 14,604 (16,404 ) 69,954 Depreciation and amortization 24,570 16,895 367 41,832 Assets 561,755 311,738 37,773 911,266 Capital expenditures and acquisitions 132,509 14,650 213 147,372 31 Weeks Ended December 31, 2015 Revenues $ 182,845 $ 141,088 $ 334 $ 324,267 Operating income (loss) 37,162 17,331 (9,821 ) 44,672 Depreciation and amortization 13,215 10,387 213 23,815 Assets 435,862 328,455 40,384 804,701 Capital expenditures and acquisitions 27,984 16,428 40 44,452 Fiscal 2015 Revenues $ 269,155 $ 218,332 $ 580 $ 488,067 Operating income (loss) 53,467 10,331 (13,155 ) 50,643 Depreciation and amortization 20,141 17,930 290 38,361 Assets 424,740 334,211 46,521 805,472 Capital expenditures and acquisitions 49,789 23,610 1,589 74,988 Theatres Hotels/
ResortsCorporate
ItemsTotal Fiscal 2021 Revenues $ 271,248 $ 186,638 $ 358 $ 458,244 Operating loss (27,559) 5,865 (19,758) (41,452) Depreciation and amortization 51,654 20,192 281 72,127 Assets 820,547 305,928 61,886 1,188,361 Capital expenditures and acquisitions 10,299 6,783 — 17,082 Fiscal 2020 Revenues $ 132,624 $ 104,638 $ 426 $ 237,688 Operating income (loss) (121,429) (43,885) (13,108) (178,422) Depreciation and amortization 53,460 21,096 496 75,052 Assets 871,655 309,320 73,203 1,254,178 Capital expenditures and acquisitions 15,828 4,669 866 21,363 Fiscal 2019 Revenues $ 557,080 $ 263,350 $ 433 $ 820,863 Operating income (loss) 76,903 10,050 (18,762) 68,191 Depreciation and amortization 51,202 20,430 645 72,277 Assets 953,299 337,206 68,681 1,359,186 Capital expenditures and acquisitions 61,604 31,783 780 94,167 notes receivable and land held for development.108The Marcus CorporationNotes to ConsolidatedStatements13. Unaudited Quarterly Financial Information(in thousands, except per share data) 13 Weeks Ended Fiscal 2017 March 30,
2017 June 29,
2017 September 28,
2017 December 28,
2017(1) Revenues $ 157,954 $ 152,775 $ 153,818 $ 158,167 Operating income 18,025 18,741 21,435 17,394 Net earnings attributable to The Marcus Corporation 9,453 10,124 10,978 34,441 Net earnings per common share – diluted $ 0.33 $ 0.36 $ 0.39 $ 1.21 13 Weeks Ended Fiscal 2016 March 31,
2016 June 30,
2016 September 29,
2016 December 29,
2016 Revenues $ 125,444 $ 134,978 $ 144,695 $ 138,747 Operating income 11,346 18,261 24,683 15,664 Net earnings attributable to The Marcus Corporation 5,452 9,336 14,372 8,742 Net earnings per common share – diluted $ 0.20 $ 0.34 $ 0.51 $ 0.31 13 Weeks Ended 5 Weeks Ended 31 Weeks Ended
December 31, 2015 August 27,
2015 November 26,
2015 December 31,
2015 Revenues $ 149,190 $ 115,676 $ 59,401 Operating income 25,966 10,664 8,042 Net earnings attributable to The Marcus Corporation 14,651 4,945 3,969 Net earnings per common share – diluted $ 0.53 $ 0.18 $ 0.14 (1)The Company recorded a one-time income tax adjustment of $21,240 during the fourth quarter of fiscal 2017 related to the future lower federal tax rate resulting from the December 2017 signing of the Tax Cuts and Jobs Act of 2017.109The Marcus CorporationNotes to Consolidated Financial Statements14. Unaudited Transition Period Comparative Balances(in thousands, except per share data)In October 2015, the Company’s BoardDirectors approved a change in the Company’s fiscal year-end from the last Thursday in May to the last Thursday in December. The Company reports on a 52/53 week year. The required 31-week transition period of May 29, 2015 to December 31, 2015 is included in these financial statements. In order to provide comparative results for the year ended December 29, 2016, the unaudited consolidated statement of earnings for the 53-week year ended December 31, 2015 is presented below. In order to provide comparative results for the 31-week transition period ended December 31, 2015, the unaudited consolidated statement of earnings for the 30-week period of May 30, 2014 to December 25, 2014 is also presented. (unaudited)
53 Weeks Ended (unaudited)
30 Weeks Ended December 31, December 25, 2015 2014 Revenues: Theatre admissions $ 176,251 $ 85,608 Rooms 109,857 69,897 Theatre concessions 115,081 52,872 Food and beverage 71,028 41,456 Other revenues 59,477 30,807 Total revenues 531,694 280,640 Costs and expenses: Theatre operations 153,612 73,081 Rooms 42,408 25,104 Theatre concessions 32,279 14,711 Food and beverage 57,769 32,425 Advertising and marketing 23,929 16,178 Administrative 60,610 29,029 Depreciation and amortization 40,032 22,145 Rent 8,622 5,009 Property taxes 14,876 8,756 Other operating expenses 33,615 19,911 Impairment charge 2,919 - Total costs and expenses 470,671 246,349 OPERATING INCOME 61,023 34,291 OTHER INCOME (EXPENSE): Investment income 209 58 Interest expense (10,035 ) (5,824 ) Loss on disposition of property, equipment and other assets (1,233 ) (719 ) Equity losses from unconsolidated joint ventures, net (160 ) (63 ) (11,219 ) (6,548 ) Earnings before income taxes 49,804 27,743 INCOME TAXES 19,415 11,043 NET EARNINGS 30,389 16,700 NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS (393 ) (82 ) NET EARNINGS ATTRIBUTABLE TO THE MARCUS CORPORATION $ 30,782 $ 16,782 net earnings per share - BASIC: Common Stock $ 1.15 $ 0.63 Class B Common Stock 1.04 0.57 net earnings per share - DILUTED: Common Stock $ 1.10 $ 0.61 Class B Common Stock 1.03 0.57 110Item 9.Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.None.Item 9A.Controls and Procedures.(a)Evaluation of disclosure controls and procedures.(b)Management’s report on internal control over financial reporting.(c)Attestation Report of Independent Registered Public Accounting Firm.(d)Changes in internal control over financial reporting.20172021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.Item 10.Directors, Executive Officers and Corporate Governance.Directors,”Directors” and “Board of Directors and Corporate Governance” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the definitive Proxy Statement for our 20182022 Annual Meeting of Shareholders scheduled to be held on May 8, 201810, 2022 (our “Proxy Statement”). Information regarding our executive officers may be found in Part I of this Form 10-K under the caption “Executive Officers of the Company.” Except as otherwise specifically incorporated by reference, our Proxy Statement is not deemed to be filed as part of this Form 10-K.Item 11.Executive Compensation.111Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters.Number of securities to be
issued upon the exercise
of outstanding options,
warrants and rights Weighted-average
exercise price of
outstanding options,
warrants and rights Number of securities remaining available
for future issuance under current equity
compensation plan (excluding
securities reflected in the first column)$18.08 Number of securities to be
issued upon the exercise
of outstanding options,
warrants and rightsWeighted-average
exercise price of
outstanding options,
warrants and rightsNumber of securities remaining available
for future issuance under current equity
compensation plan (excluding
securities reflected in the first column)2,533,000 $24.84 1,851,090 Item 13.Certain Relationships and Related Transactions, and Director Independence.Item 14.Principal Accounting Fees and Services.Item 15.Exhibits and Financial Statement Schedules.(a)(1)Financial Statements.information required byfollowing consolidated financial statements of The Marcus Corporation and the Report of Independent Registered Public Accounting Firm thereon, are filed as part of this item is set forth in “Item 8 –report: and Supplementary Data” above.(a)(2)Financial Statement Schedules.(a)(3)Exhibits.11210.2* 10.3* 10.4* 10.5 10.6* 10.7* 11310.18*10.16*10.19*10.17*10.20*10.18*11410.21*10.19* 14.110.20*10.21* 10.22* 10.23 10.24 10.25 10.25 14.1 21 232223 31.1 31.2 32 99 Proxy Statement for the 20182022 Annual Meeting of Shareholders. (The Proxy Statement for the 20182022 Annual Meeting of Shareholders will be filed with the Securities and Exchange Commission under Regulation 14A within 120 days after the end of our fiscal year.)101 The following materials from The Marcus Corporation’s Annual Report on Form 10-K for the fiscal year ended December 28, 201730, 2021 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) Notes to Consolidated Financial Statements.104 Cover Page Interactive Data File. (Formatted as Inline XBRL and contained in Exhibit 101). 115THE MARCUS CORPORATIONTHE MARCUS CORPORATION Date: March 13, 20183, 2022By: /s/ Gregory S. Marcus Gregory S. Marcus, President and Chief Executive Officer By:By: /s/ Gregory S. Marcus By: By:/s/ Diane Marcus Gershowitz Gregory S. Marcus, President and Chief Executive Officer (Principal Executive Officer) and Director Diane Marcus Gershowitz, Director Executive Officer (Principal ExecutiveOfficer) and DirectorBy: By:/s/ Douglas A. Neis By: By:/s/ Timothy E. Hoeksema Douglas A. Neis, Executive Vice President and Chief Financial Officer (Principal Financial Officer and Accounting Officer) Timothy E. Hoeksema, Director By: Officer and Treasurer (PrincipalFinancial Officer and AccountingOfficer)By:/s/ Stephen H. Marcus By: By:/s/ Allan H. Selig Stephen H. Marcus, Chairman and Director Allan H. Selig, Director By: /s/ Philip L. Milstein By: By:/s/ Brian J. Stark Philip L. Milstein, Director Brian J. Stark, Director By: /s/ Bruce J. Olson By: By:/s/ David M. Baum Bruce J. Olson, Director David M. Baum, Director By: /s/ Katherine M. Gehl Katherine M. Gehl, Director S-1