Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days.

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (Check One).

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

COMMON STOCK OUTSTANDING ATNOVEMBER 32, ~~2017~~2018 – ~~19,242,578~~19,986,597

CLASS B COMMON STOCK OUTSTANDING ATNOVEMBER 32, ~~2017 –8,596,301~~2018 – 8,346,417

(in thousands, except share and per share data)	September 28, 2017		December 29, 2016		September 27, 2018		December 28, 2017

ASSETS
Current assets:
Cash and cash equivalents	$	6,566	$	3,239	$	7,346	$	16,248
Restricted cash		7,904		5,466		5,283		4,499
Accounts and notes receivable, net of reserves of $170 and $204, respectively		24,269		14,761
Accounts and notes receivable, net of reserves of $232 and $161, respectively						26,006		27,230
Refundable income taxes		10,358		1,672		3,531		15,335
Other current assets		13,361		11,005		15,202		13,409
Total current assets		62,458		36,143		57,368		76,721

Property and equipment:
Land and improvements		138,464		134,306		149,172		146,887
Buildings and improvements		735,979		699,828		768,384		759,166
Leasehold improvements		86,811		80,522		98,665		93,451
Furniture, fixtures and equipment		339,984		312,334		362,853		351,879
Construction in progress		28,402		19,698		9,224		5,269
Total property and equipment		1,329,640		1,246,688		1,388,298		1,356,652
Less accumulated depreciation and amortization		491,446		457,490		541,161		496,588
Net property and equipment		838,194		789,198		847,137		860,064

Other assets:
Investments in joint ventures		4,951		6,096		4,751		4,239
Goodwill		43,527		43,735		43,388		43,492
Other		34,730		36,094		34,042		33,281
Total other assets		83,208		85,925		82,181		81,012

TOTAL ASSETS	$	983,860	$	911,266	$	986,686	$	1,017,797

(in thousands, except share and per share data)	September 28, 2017			December 29, 2016			September 27, 2018			December 28, 2017

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	40,149		$	31,206		$	23,108		$	51,541
Taxes other than income taxes		17,547			17,261			17,675			19,638
Accrued compensation		15,971			17,007			16,732			15,627
Other accrued liabilities		39,485			46,561			46,269			53,291
Current portion of capital lease obligations		6,951			6,598			7,120			7,570
Current maturities of long-term debt		11,923			12,040			10,077			12,016
Total current liabilities		132,026			130,673			120,981			159,683

Capital lease obligations		20,881			26,106			22,989			28,282

Long-term debt		317,797			271,343			262,149			289,813

Deferred income taxes		50,657			46,433			38,374			38,233

Deferred compensation and other		46,256			45,064			59,157			56,662

Equity:
Shareholders’ equity attributable to The Marcus Corporation
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued		─			─			─			─
Common Stock, $1 par; authorized 50,000,000 shares; issued 22,593,212 shares at September 28, 2017 and 22,489,976 shares at December 29, 2016		22,593			22,490
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 8,596,301 shares at September 28, 2017 and 8,699,540 shares at December 29, 2016		8,596			8,700
Common Stock, $1 par; authorized 50,000,000 shares; issued 22,841,846 shares at September 27, 2018 and 22,655,517 shares at December 28, 2017								22,842			22,656
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 8,347,667 shares at September 27, 2018 and 8,533,996 shares at December 28, 2017								8,348			8,534
Capital in excess of par		60,908			58,584			63,138			61,452
Retained earnings		371,653			351,220			433,022			403,206
Accumulated other comprehensive loss		(4,919	)		(5,066	)		(6,749	)		(7,425	)
		458,831			435,928			520,601			488,423
Less cost of Common Stock in treasury (3,353,845 shares at September 28, 2017 and 3,517,951 shares at December 29, 2016)		(43,628	)		(45,816	)
Less cost of Common Stock in treasury (2,861,396 shares at September 27, 2018 and 3,335,745 shares at December 28, 2017)								(37,670	)		(43,399	)
Total shareholders' equity attributable to The Marcus Corporation		415,203			390,112			482,931			445,024
Noncontrolling interest		1,040			1,535			105			100
Total equity		416,243			391,647			483,036			445,124

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	983,860		$	911,266		$	986,686		$	1,017,797

													September 27, 2018						September 28, 2017
(in thousands, except per share data)	September 28, 2017						September 29, 2016						13 Weeks			39 Weeks			13 Weeks			39 Weeks
	13 Weeks			39 Weeks			13 Weeks			39 Weeks
Revenues:
Theatre admissions	$	50,246		$	166,222		$	46,859		$	137,783		$	52,422		$	185,035		$	50,246		$	166,222
Rooms		32,785			82,844			32,609			81,984			34,467			84,256			32,785			82,844
Theatre concessions		33,290			109,365			30,260			88,644			35,476			123,687			33,290			109,365
Food and beverage		18,670			52,487			17,991			50,784			19,333			53,972			18,670			52,487
Other revenues		18,827			53,629			16,976			45,922			19,813			59,362			18,827			53,629
														161,511			506,312			153,818			464,547
Cost reimbursements														9,088			25,776			8,557			23,424
Total revenues		153,818			464,547			144,695			405,117			170,599			532,088			162,375			487,971

Costs and expenses:
Theatre operations		44,403			145,844			39,579			118,048			48,644			164,452			44,403			145,844
Rooms		10,658			30,117			10,608			30,409			10,958			31,026			10,658			30,117
Theatre concessions		9,567			30,666			8,611			24,440			10,168			35,105			9,567			30,666
Food and beverage		15,125			44,093			14,498			41,797			14,966			43,930			15,125			44,093
Advertising and marketing		6,296			17,880			5,540			16,033			6,178			17,317			6,296			17,880
Administrative		16,876			51,654			15,702			45,638			16,813			52,653			16,448			50,370
Depreciation and amortization		12,993			37,544			10,474			31,025			14,569			42,899			12,993			37,544
Rent		3,113			9,718			2,051			6,277			2,815			8,351			3,113			9,718
Property taxes		5,052			14,575			4,168			12,306			5,018			15,011			5,052			14,575
Other operating expenses		8,300			24,255			8,781			24,854			8,969			27,032			8,300			24,255
Reimbursed costs														9,088			25,776			8,557			23,424
Total costs and expenses		132,383			406,346			120,012			350,827			148,186			463,552			140,512			428,486

Operating income		21,435			58,201			24,683			54,290			22,413			68,536			21,863			59,485

Other income (expense):
Investment income		119			229			8			25			442			433			119			229
Interest expense		(3,367	)		(9,454	)		(2,127	)		(6,993	)		(3,180	)		(10,000	)		(3,367	)		(9,454	)
Gain (loss) on disposition of property, equipment and other assets		(449	)		(420	)		239			(478	)
Other expense														(497	)		(1,489	)		(428	)		(1,284	)
Loss on disposition of property, equipment and other assets														(359	)		(767	)		(449	)		(420	)
Equity earnings (losses) from unconsolidated joint ventures, net		(12	)		75			161			270			30			282			(12	)		75
		(3,709	)		(9,570	)		(1,719	)		(7,176	)		(3,564	)		(11,541	)		(4,137	)		(10,854	)

Earnings before income taxes		17,726			48,631			22,964			47,114			18,849			56,995			17,726			48,631
Income taxes		6,908			18,571			8,712			18,236			2,626			12,254			6,908			18,571
Net earnings		10,818			30,060			14,252			28,878			16,223			44,741			10,818			30,060
Net loss attributable to noncontrolling interests		(160	)		(495	)		(120	)		(282	)
Net earnings (loss) attributable to noncontrolling interests														(8	)		70			(160	)		(495	)
Net earnings attributable to The Marcus Corporation	$	10,978		$	30,555		$	14,372		$	29,160		$	16,231		$	44,671		$	10,978		$	30,555

Net earnings per share – basic:
Common Stock	$	0.41		$	1.14		$	0.54		$	1.09		$	0.60		$	1.65		$	0.41		$	1.14
Class B Common Stock	$	0.36		$	1.02		$	0.49		$	0.99		$	0.52		$	1.47		$	0.36		$	1.02

Net earnings per share – diluted:
Common Stock	$	0.39		$	1.08		$	0.51		$	1.05		$	0.56		$	1.56		$	0.39		$	1.08
Class B Common Stock	$	0.37		$	1.01		$	0.48		$	0.98		$	0.51		$	1.44		$	0.37		$	1.01

Dividends per share:
Common Stock	$	0.125		$	0.375		$	0.113		$	0.338		$	0.150		$	0.450		$	0.125		$	0.375
Class B Common Stock	$	0.114		$	0.341		$	0.102		$	0.307		$	0.136		$	0.409		$	0.114		$	0.341

													September 27, 2018					September 28, 2017
(in thousands)	September 28, 2017						September 29, 2016						13 Weeks			39 Weeks		13 Weeks			39 Weeks
	13 Weeks			39 Weeks			13 Weeks			39 Weeks

Net earnings	$	10,818		$	30,060		$	14,252		$	28,878		$	16,223		$	44,741	$	10,818		$	30,060

Other comprehensive income (loss), net of tax:
Change in unrealized gain on available for sale investments, net of tax benefit of $0, $9, $0 and $0, respectively		-			(14	)		-			-
Amortization of the net actuarial loss and prior service credit related to the pension, net of tax effect of $35, $106, $110 and $110, respectively		54			161			163			163
Fair market value adjustment of interest rate swap, net of tax benefit of $0, $0, $0 and $95, respectively		-			-			-			(143	)
Reclassification adjustment on interest rate swap included in interest expense, net of tax effect of $0, $0, $0 and $25, respectively		-			-			-			38
Reclassification adjustment related to interest rate swap de-designation, net of tax effect of $0, $0, $0 and $63, respectively		-			-			-			96

Change in unrealized gain on available for sale investments, net of tax benefit of $0, $0, $0 and $9, respectively														-			-		-			(14	)

Amortization of the net actuarial loss and prior service credit related to the pension, net of tax effect of $42, $125, $35 and $106, respectively														113			340		54			161

Fair market value adjustment of interest rate swap, net of tax effect of $70, $70, $0 and $0, respectively														192			191		-			-

Reclassification adjustment on interest rate swap included in interest expense, net of tax effect of $17, $49, $0 and $0, respectively														46			134		-			-

Other comprehensive income		54			147			163			154			351			665		54			147

Comprehensive income		10,872			30,207			14,415			29,032			16,574			45,406		10,872			30,207

Comprehensive loss attributable to noncontrolling interests		(160	)		(495	)		(120	)		(282	)
Comprehensive income (loss) attributable to noncontrolling interests														(8	)		70		(160	)		(495	)

Comprehensive income attributable to The Marcus Corporation	$	11,032		$	30,702		$	14,535		$	29,314		$	16,582		$	45,336	$	11,032		$	30,702

	39 Weeks Ended						39 Weeks Ended
(in thousands)	September 28, 2017			September 29, 2016
(in thousands)							September 27, 2018			September 28, 2017

OPERATING ACTIVITIES:
Net earnings	$	30,060		$	28,878		$	44,741		$	30,060
Adjustments to reconcile net earnings to net cash provided by operating activities:
Earnings on investments in joint ventures		(75	)		(270	)		(282	)		(75	)
Distributions from joint ventures		351			414			65			351
Loss on disposition of property, equipment and other assets		420			478			767			420
Amortization of favorable lease right		250			250			250			250
Depreciation and amortization		37,544			31,025			42,899			37,544
Amortization of debt issuance costs		209			226			216			209
Shared-based compensation		1,867			1,358			1,950			1,867
Deferred income taxes		4,231			6,461			1			4,231
Deferred compensation and other		1,682			526			2,949			1,682
Contribution of the Company’s stock to savings and profit-sharing plan		1,024			905			1,130			1,024
Changes in operating assets and liabilities:
Accounts and notes receivable		(7,896	)		(2,090	)		1,224			(7,896	)
Other current assets		(2,220	)		(1,041	)		(1,793	)		(2,220	)
Accounts payable		1			(6,592	)		(18,620	)		1
Income taxes		(8,686	)		(7,329	)		12,749			(8,686	)
Taxes other than income taxes		286			(2,682	)		(1,963	)		286
Accrued compensation		(1,036	)		3,147			1,105			(1,036	)
Other accrued liabilities		(7,076	)		(8,823	)		(10,318	)		(7,076	)
Total adjustments		20,876			15,963			32,329			20,876
Net cash provided by operating activities		50,936			44,841			77,070			50,936

INVESTING ACTIVITIES:
Capital expenditures		(87,265	)		(58,084	)		(45,144	)		(87,265	)
Proceeds from disposals of property, equipment and other assets		4,558			594			86			4,558
Decrease (increase) in restricted cash		(2,438	)		12,479
Decrease in other assets		584			3,686
Sale of interest in joint venture		—			1,000
Decrease (increase) in other assets								(743	)		584
Contribution in joint venture								(295	)		—
Net cash used in investing activities		(84,561	)		(40,325	)		(46,096	)		(82,123	)

FINANCING ACTIVITIES:
Debt transactions:
Proceeds from borrowings on revolving credit facilities		254,000			250,188			159,000			254,000
Repayment of borrowings on revolving credit facilities		(236,500	)		(191,188	)		(177,000	)		(236,500	)
Proceeds from borrowings on long-term debt		65,000			—			—			65,000
Principal payments on long-term debt		(35,894	)		(51,863	)		(11,711	)		(35,894	)
Debt issuance costs		(370	)		(491	)		—			(370	)
Repayments of capital lease obligations		(782	)		—			(1,375	)		(782	)
Equity transactions:
Treasury stock transactions, except for stock options		(463	)		(6,053	)		(2,566	)		(463	)
Exercise of stock options		2,083			3,553			6,902			2,083
Dividends paid		(10,122	)		(9,016	)		(12,277	)		(10,122	)
Distributions to noncontrolling interest		—			(448	)		(65	)		—
Net cash provided by (used in) financing activities		36,952			(5,318	)		(39,092	)		36,952

Net increase (decrease) in cash and cash equivalents		3,327			(802	)
Cash and cash equivalents at beginning of period		3,239			6,672
Cash and cash equivalents at end of period	$	6,566		$	5,870
Net increase (decrease) in cash, cash equivalents and restricted cash								(8,118	)		5,765
Cash, cash equivalents and restricted cash at beginning of period								20,747			8,705
Cash, cash equivalents and restricted cash at end of period							$	12,629		$	14,470

Supplemental Information:
Interest paid, net of amounts capitalized	$	9,354		$	6,772		$	10,321		$	9,354
Income taxes paid		23,025			19,107
Income taxes paid (refunded)								(448	)		23,025
Change in accounts payable for additions to property and equipment		8,942			(1,930	)		(9,813	)		8,942

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

Basis of Presentation -– The unaudited consolidated financial statements for the 13 and 39 weeks ended September ~~28, 2017~~27, 2018 and September ~~29, 2016~~28, 2017 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at September ~~28, 2017,~~27, 2018, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December ~~29, 2016.~~28, 2017.

~~Restricted Cash~~Immaterial Restatement of Prior Year Financial Statements – ~~Restricted cash consists~~Beginning in the fiscal 2018 first quarter, the Company began appropriately presenting cost reimbursements and reimbursed costs on a gross basis and presented two new line items in the consolidated statements of ~~bank accounts~~earnings. These cost reimbursements and reimbursed costs were previously reported on a net basis. Reimbursed costs primarily consist of payroll and related ~~to capital expenditure reserve funds, sinking funds, operating reserves and replacement reserves~~expenses at managed properties where the Company is the employer and may include ~~amounts held by a qualified intermediary agent~~certain operational and administrative costs as provided for in the Company's contracts with owners. These costs are reimbursed back to ~~be used~~the Company. As these costs have no added markup, the revenue and related expense have no impact on operating income or net earnings. Cost reimbursements and reimbursed costs, which totaled $8,557,000 and $23,424,000 for ~~tax-deferred, like-kind exchange transactions. At~~the 13 and 39 weeks ended September 28, 2017, ~~approximately $3,057,000~~respectively, have been separately presented in the prior year statement of ~~net sales proceeds were held with~~earnings to correct the prior year presentation. The Company believes this correction is immaterial to the consolidated financial statements.

Accounting Policies – Refer to the Company’s audited consolidated financial statements (including footnotes) for the fiscal year ended December 28, 2017, contained in the Company’s Annual Report on Form 10-K for such year, for a ~~qualified intermediary. Restricted cash is not considered cash and cash equivalents for purposes~~description of the ~~statement~~Company’s accounting policies.

During the 39 weeks ended September 27, 2018, there were no significant changes made to the Company’s significant accounting policies other than the changes attributable to the adoption of ~~cash flows.~~the Financial Accounting Standards Board Accounting Standards Update No. 2014-09,Revenue from Contracts with Customers, which was adopted on December 29, 2017. These revenue recognition policy updates are applied prospectively in the Company’s financial statements from December 29, 2017 forward. Reported financial information for the historical comparable period was not revised and continues to be reported under the accounting standards in effect during the historical periods.

Depreciation and Amortization -– Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $14,556,000 and $43,037,000 for the 13 and 39 weeks ended September 27, 2018, respectively, and $12,946,000 and $37,368,000 for the 13 and 39 weeks ended September 28, 2017, ~~respectively, and $10,537,000 and $31,214,000 for the 13 and 39 weeks ended September 29, 2016,~~ respectively.

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

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

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

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

	13 Weeks Ended September 28, 2017		13 Weeks Ended September 29, 2016		39 Weeks Ended September 28, 2017		39 Weeks Ended September 29, 2016
									13 Weeks Ended September 27, 2018		13 Weeks Ended September 28, 2017		39 Weeks Ended September 27, 2018		39 Weeks Ended September 28, 2017
	(in thousands, except per share data)								(in thousands, except per share data)
Numerator:
Net earnings attributable to The Marcus Corporation	$	10,978	$	14,372	$	30,555	$	29,160
Net earnings attributable to
The Marcus Corporation									$	16,231	$	10,978	$	44,671	$	30,555
Denominator:
Denominator for basic EPS		27,825		27,574		27,773		27,522		28,180		27,825		28,028		27,773
Effect of dilutive employee stock options		525		427		637		343		638		525		606		637
Denominator for diluted EPS		28,350		28,001		28,410		27,865		28,818		28,350		28,634		28,410
Net earnings per share - basic:
Common Stock	$	0.41	$	0.54	$	1.14	$	1.09	$	0.60	$	0.41	$	1.65	$	1.14
Class B Common Stock	$	0.36	$	0.49	$	1.02	$	0.99	$	0.52	$	0.36	$	1.47	$	1.02
Net earnings per share - diluted:
Common Stock	$	0.39	$	0.51	$	1.08	$	1.05	$	0.56	$	0.39	$	1.56	$	1.08
Class B Common Stock	$	0.37	$	0.48	$	1.01	$	0.98	$	0.51	$	0.37	$	1.44	$	1.01

Equity– Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interests for the 39 weeks ended September ~~28, 2017~~27, 2018 and September ~~29, 2016~~28, 2017 was as follows:

	Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests			Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests
							(in thousands)
	(in thousands)
Balance at December 29, 2016	$	390,112		$	1,535
Balance at December 28, 2017							$	445,024		$	100
Net earnings attributable to The Marcus Corporation		30,555			–			44,671			–
Net loss attributable to noncontrolling interests		–			(495	)
Net earnings attributable to noncontrolling interests								–			70
Distributions to noncontrolling interests								–			(65	)
Cash dividends		(10,122	)		–			(12,277	)		–
Exercise of stock options		2,083			–			6,902			–
Savings and profit sharing contribution		1,024			–			1,130			–
Treasury stock transactions, except for stock options		(463	)		–			(2,566	)		–
Share-based compensation		1,867			–			1,950			–
Cumulative effect of adopting ASU No. 2014-09, net of tax								(2,568	)		–
Other comprehensive income, net of tax		147			–			665			–
Balance at September 28, 2017	$	415,203		$	1,040
Balance at September 27, 2018							$	482,931		$	105

	Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests			Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests
							*(in thousands)*
	(in thousands)
Balance at December 31, 2015	$	363,352		$	2,346
Balance at December 29, 2016							$	390,112		$	1,535
Net earnings attributable to The Marcus Corporation		29,160			–			30,555			–
Net loss attributable to noncontrolling interests		–			(282	)		–			(495	)
Distributions to noncontrolling interests		–			(448	)
Cash dividends		(9,016	)		–			(10,122	)		–
Exercise of stock options		3,553			–			2,083			–
Savings and profit sharing contribution		905			–			1,024			–
Treasury stock transactions, except for stock options		(6,053	)		–			(463	)		–
Share-based compensation		1,358			–			1,867			–
Other		39			–
Other comprehensive income, net of tax		154			–			147			–
Balance at September 29, 2016	$	383,452		$	1,616
Balance at September 28, 2017							$	415,203		$	1,040

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

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

Level 1 -– Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At September ~~28, 2017~~27, 2018 and December ~~29, 2016,~~28, 2017, respectively, the Company’s ~~$70,000~~$5,762,000 and ~~$93,000~~$4,053,000 of ~~available for sale securities were valued using Level 1 pricing inputs~~debt and ~~were included in other current assets. At September 28, 2017 and December 29, 2016, respectively, the Company’s $3,859,000 and $1,927,000 of trading~~equity securities were valued using Level 1 pricing inputs and were included in other current assets.

Level 2 -– Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At September 27, 2018 and December 28, 2017, ~~and December 29, 2016,~~ respectively, the ~~$28,000~~$444,000 and ~~$6,000~~$13,000 asset related to the Company’s interest rate swap ~~contract~~contracts was valued using Level 2 pricing inputs.

Level 3 -– Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At September ~~28, 2017~~27, 2018 and December ~~29, 2016,~~28, 2017, none of the Company’s fair value measurements were valued using Level 3 pricing inputs.

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

	13 Weeks Ended September 28, 2017		13 Weeks Ended September 29, 2016		39 Weeks Ended September 28, 2017		39 Weeks Ended September 29, 2016
									13 Weeks Ended September 27, 2018		13 Weeks Ended September 28, 2017		39 Weeks Ended September 27, 2018		39 Weeks Ended September 28, 2017
	(in thousands)								(in thousands)
Service cost	$	192	$	216	$	574	$	648	$	231	$	192	$	694	$	574
Interest cost		339		351		1,017		1,055		341		339		1,023		1,017
Net amortization of prior service cost and actuarial loss		89		91		267		273		156		89		466		267
Net periodic pension cost	$	620	$	658	$	1,858	$	1,976	$	728	$	620	$	2,183	$	1,858

Service cost is included in Administrative expense while all other components are recorded within Other expense outside of operating income in the consolidated statements of earnings.

New Accounting Pronouncements - In ~~May 2014,~~February 2016, 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 issued ASU No. 2015-14,~~Revenue from Contracts with Customers: Deferral of Effective Date~~ (ASU 2015-14), to defer the effective date of the new revenue recognition standard by one year. The new standard is effective for the Company 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. 2014-09 and its related ASU amendments. Under this method, the Company will recognize the cumulative effect of the changes in retained earnings at the date of adoption, but will not restate prior periods.

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

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

~~In February 2016, the FASB issued ASU~~ No. 2016-02,Leases (Topic 842), intended to improve financial reporting related to leasing transactions. ASU No. 2016-02 requires a lessee to recognize ~~on the balance sheet assets~~a right-of-use asset and ~~liabilities~~a lease liability for ~~rights and obligations created by leased assets~~most operating leases 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~~In July 2018, the FASB also issued ASU No. 2018-11,Leases (Topic 842): Targeted Improvements, which amends ASU No. 2016-02 and ~~quantitative requirements, providing additional information about~~allows entities the ~~amounts recorded~~option to initially apply Topic 842 at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the ~~financial statements.~~period of adoption. The Company plans to adopt the new accounting standard ~~is effective for the Company~~ in fiscal 2019 ~~and early application is permitted. The Company is evaluating~~using the ~~effect that~~optional transition method to apply the new guidance ~~will have on its consolidated financial statements and related disclosures.~~as of the first day of fiscal 2019 rather than as of the earliest period presented.

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~~conjunction with the objective of reducing the existing diversity in practice. The new standard is effective for the Company beginning in fiscal 2018, with early adoption permitted. The standard must be applied using a retrospective transition method for each period presented. The Company does not believe the adoption of the new standard, companies are able to elect several practical expedients to aid in the transition to Topic 842. The following three practical expedients must all be elected together, and the Company intends to elect these practical expedients upon adoption:

The Company continues to finalize its inventory of leases, assess the additional practical expedients and analyze financial reporting implications. Upon adoption, the most significant impact of the amendments in ASU No. 2016-02 will be the recognition of the new right-of-use assets and lease liabilities for assets currently subject to operating leases. The Company believes that the adoption of ASU No. 2016-02 will have a material impact on its consolidated balance sheet, but the adoption is not expected to have a material effect on its consolidated ~~financial statements.~~

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

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

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

In February ~~2017,~~2018, the FASB issued ASU No. 2018-02,Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments in ASU No. 2018-02 allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendments in ASU No. 2018-02 also require certain disclosures about stranded tax effects. The new standard is effective for fiscal years beginning after December 15, 2018, and early adoption in any period is permitted. The Company plans to adopt the new accounting standard in fiscal 2019 and has determined that the adoption of ASU No. 2018-02 will not have a material effect on its consolidated financial statements.

On December 29, 2017, the Company adopted and applied to all contracts 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. The Company elected the modified retrospective method for the adoption of ASU No. 2014-09 and its related ASU amendments. Under this method, the Company recognized the cumulative effect of the changes in retained earnings at the date of adoption, but did not restate the 13 or 39 weeks ended September 28, 2017, which continues to be reported under the accounting standards in effect for that time period.

The Company performed a review of the requirements of ASU No. 2014-09 and related ASUs in preparation for adoption of the new standard. The Company 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 majority of the Company’s revenues continue to be recognized in a manner consistent with historical practice. See Note 2 for further discussion.

On December 29, 2017, the Company adopted ASU No. 2016-01,Recognition and Measurement of Financial Assets and Financial Liabilities, which primarily affects the accounting for equity investments, financial liabilities under fair value option, and the presentation and disclosure requirements of financial instruments. Upon adoption, the Company made an immaterial cumulative effect adjustment to reclassify the unrealized loss of an equity investment previously classified as available for sale from accumulated other comprehensive loss to opening retained earnings. All future changes in fair value for this equity security will be recognized through net earnings. In addition, the Company holds two investments that were previously accounted for under the cost method of accounting, which under ASU No. 2016-01 were deemed to not have readily determinable fair values and thus were not impacted by the adoption of ASU No. 2016-01. The adoption of this standard did not have a material impact on such investments or the Company's consolidated financial statements.

On December 29, 2017, the Company adopted 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 standard must be applied using a retrospective transition method for each period presented. The adoption of the new standard did not have an effect on the Company’s consolidated financial statements.

On December 29, 2017, the Company adopted 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 are 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. ASU No. 2016-18 was applied on a retrospective basis and prior periods were adjusted to conform to the current period’s presentation. Upon adoption, the Company recorded a $2,438,000 decrease in net cash used in investing activities for the 39 weeks ended September 28, 2017 related to reclassifying the changes in its restricted cash balance from investing activities to cash and cash equivalent balances within the consolidated statement of cash flows.

On December 29, 2017, the Company adopted 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 adoption of the new standard did not have an effect on the Company’s consolidated financial statements.

On December 29, 2017, the Company adopted ASU No. 2017-05,“Other Income –- Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic ~~610-20:~~610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial ~~Assets.”~~Assets. ASU No. 2017-05 clarifies the scope and accounting of a financial asset that meets the definition of an “in-substance nonfinancial asset” and defines the term “in-substance nonfinancial asset.” It also covers the transfer of nonfinancial assets to another entity in exchange for a non-controlling ownership interest in that entity. The ~~new guidance is effective for interim and annual periods beginning after December 15, 2017. The Company does not believe that the~~ adoption of the new standard ~~will~~did not have ~~a material~~an effect on ~~its~~the Company’s consolidated financial statements.

On December 29, 2017, the ~~FASB issued~~Company adopted ASU No. 2017-07,Compensation –- Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Benefit ~~Cost.~~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~~ASU No. 2017-07 was applied on a retrospective basis and the prior period was adjusted to conform to the current period’s presentation. During the 13 and 39 weeks ended September 28, 2017, expense of $428,000 and $1,284,000, respectively, was reclassified from operating income to other expense outside of operating income in the consolidated statement of earnings.

On December 29, 2017, the Company ~~in fiscal 2018 and it is currently assessing the impact this standard will have on its consolidated financial statements and related disclosures.~~

~~In May 2017, the FASB issued~~adopted 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 in fiscal 2018 and must be applied prospectively to an award modified on or after the~~The adoption ~~date. Early adoption is permitted. The Company does not believe~~of the new standard ~~will~~did not have ~~a material~~an effect on ~~its~~the Company’s consolidated financial statements.

2.On December 29, 2017, the Company early adopted 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. The adoption of the new standard did not have an effect on the Company’s consolidated financial statements.

Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance of obligations by transferring the promised services to the customer. A service is transferred to a customer when, or as, the customer obtains control of 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 Company’s progress in satisfying the performance obligation in a manner that depicts the transfer of the services to the 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 those services.

The disaggregation of revenues by business segment for the 13 and 39 weeks ended September 27, 2018 is as follows (in thousands):

The Company recognizes revenue from its rooms as earned on the close of business each day. Revenue from theatre admissions, theatre 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. 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. The adoption of ASU No. 2014-09 did not have an effect on how revenue is recognized for these arrangements.

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. The management fees include variable consideration that is recognized based on 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 addition, other revenues include pre-show advertising income in the Company’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. The adoption of ASU No. 2014-09 did not have an effect on how revenue is recognized for these arrangements.

Cost reimbursements primarily consist of payroll and related expenses at managed properties where the Company is the employer and may include certain operational and administrative costs as provided for in the Company’s contracts with owners. These costs are reimbursed back to the Company. As these costs have no added markup, the revenue and related expense have no impact on operating income or net earnings. The adoption of ASU No. 2014-09 did not have an effect on how revenue is recognized for these arrangements.

The timing of the Company’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 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.

Revenues do not include sales tax as the Company considers itself a pass-through conduit for collecting and remitting sales tax.

Due to adoption of ASU No. 2014-09, on the first day of fiscal 2018, the Company recorded a one-time cumulative effect adjustment to the balance sheet as follows:

The one-time cumulative effect adjustment to the balance sheet is due to a change in accounting for the Company’s loyalty programs. The Company offers a customer loyalty program to its theatre customers called Magical Movie Rewards. The program allows members to earn points for each dollar spent and access special offers available only to members. The rewards are redeemable at any Marcus Theatre box office, concession stand or food and beverage venue. The Company also offers a customer loyalty program to its Hotels and Resorts customers which allows members to earn points for each dollar spent in its restaurants. The rewards are redeemable at any of the Company’s hotel outlets including spas, restaurants, and golf. Under ASU No. 2014-09, the portion of Theatre admission revenues, Theatre concession revenues and Food and beverage revenues attributable to loyalty points earned by customers are deferred as a reduction of these revenues until related 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 change had the effect of 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.

In accordance with ASU No. 2014-09, the Company has concluded 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, recognizes ticket fee revenue based on a gross transaction price. As such, internet ticket fee revenue is deferred and recognized when the related film exhibition takes place on a gross transaction price basis. Through December 28, 2017, the Company recorded internet ticket fee revenues net of third-party commission or service fees. The change had the effect of increasing other revenues and other operating expense but had no impact on net earnings or cash flows from operations.

The adoption of ASU No. 2014-09 had the following effect on our consolidated statement of earnings for the 13 and 39 weeks ended September 27, 2018 (in thousands):

The adoption of ASU No. 2014-09 had the following effect on our consolidated balance sheet as of September 27, 2018 (in thousands):

The Company had deferred revenue from contracts with customers of $28,643,000 and $36,007,000 as of September 27, 2018 and December 29, 2017, respectively, which includes the one-time cumulative effect adjustment to the balance sheet on the first day of fiscal 2018. The Company had no contract assets as of September 27, 2018 and December 28, 2017. During the 13 and 39 weeks ended September 27, 2018, respectively, the Company recognized revenue of $1,699,000 and $16,688,000 that was included in deferred revenues as of December 29, 2017. The decrease in deferred revenue from December 29, 2017 to September 27, 2018 was due to theatre gift card redemptions and advanced movie ticket redemptions during the 39 weeks ended September 27, 2018, offset by an increase in advanced sales/deposits for group events in the hotels and resorts division.

A significant majority of the Company’s revenue is recorded in less than one year from the original contract. As of September 27, 2018, the amount of transaction price allocated to the remaining performance obligations under the Company’s advanced tickets sales was $4,396,000 and is reflected in the Company’s consolidated balance sheet as part of deferred revenues, which is included in other accrued liabilities. The Company recognizes revenue as the tickets are redeemed, which is expected to occur within the next 1.3 years. As of September 27, 2018, the amount of transaction price allocated to the remaining performance obligations under the Hotels and Resorts loyalty program was $192,000, of which, $73,000 is reflected in the Company’s consolidated balance sheet in deferred compensation and other. The Company recognizes revenue upon reward redemption, which is expected to occur within the next two years.

As part of the Company’s adoption of ASU No. 2014-09, the Company elected to use the following practical expedients: (i) not to adjust the promised amount of consideration for the effects of a significant financing component when the Company expects, at contract inception, that the period between the Company's transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less; (ii) not to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer; (iii) to expense costs as incurred for costs to obtain contracts when the amortization period would have been one year or less, which mainly includes internal sales and development compensation; (iv) not to disclose remaining performance obligations when the remaining performance obligations have original expected durations of one year or less; and (v) not to disclose remaining performance obligations when variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a service that forms a single performance obligation (which exists in the Company’s management fee contracts and its pre-show advertising contracts).

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

Also during the 39 weeks ended September 28, 2017, a note that matured in January 2017 with a balance of $24,226,000 was repaid and replaced with borrowings on the Company’s revolving credit facility and a new $15,000,000 mortgage note bearing interest at LIBOR plus 2.75%, ~~effectively 4.0% at September 28, 2017,~~ requiring monthly principal and interest payments and maturing in fiscal 2020. The mortgage note is secured by the related land, building and equipment.

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

The Company entered into antwo interest rate swap ~~agreement~~agreements on ~~February 28, 2013~~March 1, 2018 covering ~~$25,000,000~~$50,000,000 of floating rate ~~debt, which~~debt. The first agreement has a notional amount of $25,000,000, expires ~~January 22, 2018,~~March 1, 2021, and requires the Company to pay interest at a defined rate of ~~0.96%~~2.559% while receiving interest at a defined variable rate of one-month LIBOR ~~(1.25%~~(2.125% at September ~~28, 2017)~~27, 2018). The second agreement has a notional amount of $25,000,000, expires March 1, 2023, and requires the ~~swap is $25,000,000.~~Company to pay interest at a defined rate of 2.687% while receiving interest at a defined variable rate of one-month LIBOR (2.125% at September 27, 2018). The Company recognizes derivatives as either assets or liabilities on the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through earnings. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive ~~loss~~income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. The Company’s interest rate swap agreements are considered effective and qualify as cash flow hedges. The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. As of September 27, 2018, the interest rate swaps were considered highly effective. The fair value of the interest rate swaps on September 27, 2018 was an asset of $444,000 and was included in other long term assets in the consolidated balance sheet. The Company does not expect the interest rate swaps to have a material effect on earnings within the next 12 months.

The Company had an interest rate swap that expired in January 2018. The swap agreement covered $25,000,000 of floating rate debt that required the Company to pay interest at a defined fixed rate of 0.96% while receiving interest at a defined variable rate of one-month LIBOR. The Company’s interest rate swap agreement was considered effective and qualified as a cash flow hedge from inception through June 16, 2016, at which time the derivative was undesignated and the balance in accumulated other comprehensive loss ~~of $159,000 ($96,000 net of tax)~~ was reclassified into interest expense. As of June 16, 2016, the swap was considered ineffective for accounting ~~purposes.~~purposes and the change in fair value was recorded as an increase or decrease in interest expense. As such, the ~~$22,000 increase~~$13,000 decrease in ~~the~~ fair value of the swap for the 39 weeks ended September ~~28, 2017~~27, 2018 was recorded ~~as a reduction~~ to interest expense. ~~The Company does not expect the interest rate swap to have a material effect on earnings within the next four months, at which time the agreement will expire.~~

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 purchased on the Company’s behalf, and then deployed and licensed back to the Company, digital cinema projection systems (the “systems”) for use by the Company in its theatres. As of September ~~28, 2017,~~27, 2018, 642 of the Company’s screens were utilizing the systems under a 10-year master licensing agreement with CDF2. Included in furniture, fixtures and equipment is $45,510,000 related to the digital systems as of September ~~28, 2017~~27, 2018 and December ~~29, 2016,~~28, 2017, which is being amortized over the remaining estimated useful life of the assets. Accumulated amortization of the digital systems was ~~$32,926,000~~$39,103,000 and ~~$28,294,000~~$34,471,000 as of September 27, 2018 and December 28, 2017, ~~and December 29, 2016,~~ respectively.

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

The Company’s capital lease obligation is being reduced as VPF’s are paid by the film distributors to CDF2. The Company has recorded the reduction of the obligation associated with the payment of VPF’s as a reduction of the interest related to the obligation and the amortization incurred related to the systems, as the payments represent a specific reimbursement of the cost of the systems by the studios. Based on the Company’s expected minimum number of eligible movies to be booked, the Company expects the obligation to be reduced by at least ~~$5,822,000~~$5,140,000 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 theatres acquired in December 2016, the~~

The Company ~~became~~is the obligor of several movie theatre and equipment leases with unaffiliated third parties that qualify for capital lease accounting. Included in buildings and improvements as of September 27, 2018 and December 28, 2017 ~~and December 29, 2016~~ is ~~a preliminary value of $15,799,000~~$25,648,000 related to these leases, with accumulated amortization of ~~$1,253,000~~$3,701,000 and $2,300,000 as of September 27, 2018 and December 28, ~~2017.~~2017, respectively. Included in furniture, fixtures and equipment as of September 27, 2018 and December 28, 2017 ~~and December 29, 2016~~ is ~~a preliminary value of~~ $1,712,000 related to these leases, with accumulated amortization of ~~$194,000~~$438,000 and $255,000 as of September 27, 2018 and December 28, ~~2017.~~2017, respectively. The assets are being amortized over the shorter of the estimated useful lives or the remaining lease terms. The Company paid ~~$874,000~~$808,000 and $2,424,000, respectively, in lease payments on these capital leases during the 13 and 39 weeks ended September 27, 2018, and $874,000 and $2,424,000, respectively, during 13 and 39 weeks ended September 28, ~~2017, respectively.~~2017.

The Company’s effective income tax rate, adjusted for ~~losses~~earnings (losses) from noncontrolling interests, for the 13 and 39 weeks ended September ~~28, 2017~~27, 2018 was 13.9% and 21.5%, respectively, and was 38.6% and 37.8%~~, respectively, and was 37.7% and 38.5%~~ for the 13 and 39 weeks ended September ~~29, 2016,~~28, 2017, respectively. The decrease in the Company’s effective income tax rate was primarily the result of the reduction in the federal tax rate from 35% to 21% resulting from the December 22, 2017 signing of the Tax Cuts and Jobs Act of 2017. Additionally, during the 39 weeks ended September 27, 2018, the Company recorded income tax benefits related to excess tax benefits on share-based compensation as well as for reductions in deferred tax liabilities related to tax accounting method changes the Company made subsequent to the Tax Cut and Jobs Act of 2017. The Company does not include the income tax expense or benefit related to the net earnings or loss attributable to noncontrolling interest in its income tax expense as the entities are considered pass-through entities and, as such, the income tax expense or benefit is attributable to its owners.

4.During the fiscal year ended December 28, 2017, the Company 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 and disclosed in the period when any such adjustments have been determined within the one-year measurement period. During the 39 weeks ended September 27, 2018, the Company did not make any adjustment to the estimates recorded in fiscal 2017.

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

Following is a summary of business segment information for the 13 and 39 weeks ended September ~~28, 2017~~27, 2018 and September ~~29, 2016~~28, 2017 (in thousands):

13 Weeks Ended September 29, 2016	Theatres		Hotels/ Resorts		Corporate Items			Total
13 Weeks Ended September 27, 2018										Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues(1)	$	81,921	$	62,613	$	161		$	144,695	$	95,009	$	75,492	$	98		$	170,599
Operating income (loss)		18,095		10,614		(4,026	)		24,683		14,457		12,024		(4,068	)		22,413
Depreciation and amortization		6,228		4,158		88			10,474		9,867		4,616		86			14,569

On ~~October 20, 2017,~~November 1, 2018, the Company ~~sold~~entered into an asset purchase agreement with VSS-Southern Theatres LLC (Movie Tavern) pursuant to which the Company will acquire substantially all of the assets and assume certain limited liabilities of its ~~11% minority interest~~Movie Tavern branded movie theatre business (the “Movie Tavern Business”). The Movie Tavern Business consists of 22 dine-in theatres located in Texas, Pennsylvania, Georgia, Louisiana, New York, Colorado, Arkansas, Kentucky and Virginia.

The ~~Westin® Atlanta Perimeter North~~purchase price for the Movie Tavern Business consists of $30,000,000 in ~~Atlanta, Georgia~~cash, subject to certain adjustments, and ~~recorded a preliminary pre-tax gain~~2,450,000 shares of ~~approximately $4,906,000 during~~ the Company’s Common Stock. The assets purchased will consist primarily of leasehold improvements, furniture, fixtures and equipment and certain intangible assets. The transaction is expected to close in the first fiscal ~~2017 fourth quarter.~~quarter of 2019, subject to certain customary closing conditions and approvals, including, among others, early termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Act.

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

Certain matters discussed in this Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this Form 10-Q are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of ~~1995.~~1995, including the expectation that the acquisition of the Movie Tavern Business will be accretive to earnings, earnings per share and cash flows in the first 12 months following the closing of the transaction. These forward-looking statements may generally be identified as such because the context of such statements include words such as we “believe,” “anticipate,” “expect” or words of similar import. Similarly, statements that describe our future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties which may cause results to differ materially from those expected, including, but not limited to, the following: (1) the availability, in terms of both quantity and audience appeal, of motion pictures for our theatre division, as well as other industry dynamics such as the maintenance of a suitable window between the date such motion pictures are released in theatres and the date they are released to other distribution channels; (2) the effects of adverse economic conditions in our markets, particularly with respect to our hotels and resorts division; (3) the effects on our occupancy and room rates of the relative industry supply of available rooms at comparable lodging facilities in our markets; (4) the effects of competitive conditions in our markets; (5) our ability to achieve expected benefits and performance from our strategic initiatives and acquisitions; (6) the effects of increasing depreciation expenses, reduced operating profits during major property renovations, impairment losses, and preopening and start-up costs due to the capital intensive nature of our businesses; (7) the effects of weather conditions, particularly during the winter in the Midwest and in our other markets; (8) our ability to identify properties to acquire, develop and/or manage and the continuing availability of funds for such development; ~~and~~ (9) the adverse impact on business and consumer spending on travel, leisure and entertainment resulting from terrorist attacks in the United States or other incidents of violence in public venues such as hotels and movie ~~theatres.~~theatres; (10) a disruption in our business and reputational and economic risks associated with civil securities claims brought by shareholders; and (11) our ability to timely and successfully integrate the Movie Tavern Business into our own circuit. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this Form 10-Q and we undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

We report our consolidated and individual segment results of operations on a 52- or 53-week fiscal year ending on the last Thursday in December. Fiscal ~~2017~~2018 is a 52-week year beginning on December ~~30, 2016~~29, 2017 and ending on December ~~28, 2017.~~27, 2018. Fiscal ~~2016~~2017 was a 52-week year beginning ~~on January 1,~~December 30, 2016 and ended on December ~~29, 2016.~~28, 2017.

We divide our fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. The third quarter of fiscal 2018 consisted of the 13-week period beginning on June 29, 2018 and ended on September 27, 2018. The third quarter of fiscal 2017 consisted of the 13-week period beginning on June 30, 2017 and ended on September 28, 2017. The ~~third quarter~~first three quarters of fiscal ~~2016~~2018 consisted of the ~~13-week~~39-week period beginning on ~~July 1, 2016~~December 29, 2017 and ended on September ~~29, 2016.~~27, 2018. The first three quarters of fiscal 2017 consisted of the 39-week period beginning on December 30, 2016 and ended on September 28, 2017. ~~The first three quarters of fiscal 2016 consisted of the 39-week period beginning on January 1, 2016 and ended on September 29, 2016.~~ Our primary operations are reported in the following two business segments: movie theatres and hotels and resorts.

During the first quarter of fiscal 2018, we adopted Accounting Standards Update (ASU) No. 2014-09,Revenue from Contracts with Customers(ASU No. 2014-09), 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. We selected the modified retrospective method for adoption of ASU No. 2014-09 and its related ASU amendments. Under this method, we recognized the cumulative effect of the changes in retained earnings at the date of adoption and did not restate prior periods.

The adoption of the new standard primarily impacted our accounting for our loyalty programs and internet ticket fee revenue. Adopting this new standard during the first quarter of fiscal 2018 has had the following impact on our financial statements:

We recorded a one-time cumulative effect reduction to retained earnings, net of income taxes, of approximately $2.6 million during fiscal 2018 related to the adoption of ASU No. 2014-09.

In addition, we adopted ASU No. 2017-07,Compensation—Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Benefit Cost, during the first quarter of fiscal 2018. The ASU requires the service cost component of net periodic benefit costs 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 now presented separately in other expense outside of operating income and our prior year results have been restated to conform to the new presentation. As a result of the adoption of ASU No. 2017-07, $497,000 and $1,489,000, respectively, of other expenses were excluded from operating income during the third quarter and first three quarters of fiscal 2018 and $428,000 and $1,284,000, respectively, of other expenses were excluded from operating income during the third quarter and first three quarters of fiscal 2017.

Finally, beginning in the fiscal 2018 first quarter, we began appropriately presenting cost reimbursements and reimbursed costs on a gross basis and presented two new line items to the consolidated statements of earnings. These cost reimbursements and reimbursed costs were previously reported on a net basis. Reimbursed costs primarily consist of payroll and related expenses at managed properties where we are the employer and may include certain operational and administrative costs as provided for in our contracts with owners. As these costs have no added markup, the revenue and related expense have no impact on operating income or net earnings. The vast majority of our cost reimbursements relate to our hotels and resorts division due to the larger number of management contracts in that division. Our prior year results were restated to conform to the new presentation. Cost reimbursements and reimbursed costs totaled $9.1 million for the third quarter of fiscal 2018 and $8.6 million for the third quarter of fiscal 2017. Cost reimbursements and reimbursed costs totaled $25.8 million for the first three quarters of fiscal 2018 and $23.4 million for the first three quarters of fiscal 2017. We believe this correction is immaterial to the consolidated financial statements.

The following table sets forth revenues, operating income, other income (expense), net earnings and net earnings per common share for the third quarter and first three quarters of fiscal ~~2017~~2018 and fiscal ~~2016~~2017 (in millions, except for per share and variance percentage data):

	Third Quarter												First Three Quarters												Third Quarter											First Three Quarters
							Variance												Variance												Variance											Variance
	F2017			F2016			Amt.			Pct.			F2017			F2016			Amt.			Pct.			F2018			F2017			Amt.		Pct.			F2018			F2017			Amt.			Pct.
Revenues	$	153.8		$	144.7		$	9.1			6.3	%	$	464.5		$	405.1		$	59.4			14.7	%	$	170.6		$	162.4		$	8.2		5.1	%	$	532.1		$	488.0		$	44.1			9.0	%
Operating income		21.4			24.7			(3.3	)		-13.2	%		58.2			54.3			3.9			7.2	%		22.4			21.9			0.5		2.5	%		68.5			59.5			9.0			15.2	%
Other income (expense)		(3.7	)		(1.7	)		(2.0	)		-115.8	%		(9.6	)		(7.2	)		(2.4	)		-33.4	%		(3.6	)		(4.1	)		0.5		13.9	%		(11.5	)		(10.9	)		(0.6	)		-6.3	%
Net loss attributable to noncontrolling interests		(0.2	)		(0.1	)		(0.1	)		-33.3	%		(0.5	)		(0.3	)		(0.2	)		-75.5	%
Net earnings (loss) attributable to noncontrolling interests																										-			(0.2	)		0.2		95.0	%		0.1			(0.5	)		0.6			114.1	%
Net earnings attributable to The Marcus Corp.	$	11.0		$	14.4		$	(3.4	)		-23.6	%	$	30.6		$	29.2		$	1.4			4.8	%	$	16.2		$	11.0		$	5.2		47.9	%	$	44.7		$	30.6		$	14.1			46.2	%

Net earnings per common share – diluted:	$	0.39		$	0.51		$	(0.12	)		-23.5	%	$	1.08		$	1.05		$	0.03			2.9	%	$	0.56		$	0.39		$	0.17		43.6	%	$	1.56		$	1.08		$	0.48			44.4	%

Revenues increased during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016~~2017 due to increased revenues from both our theatre division and our hotels and resorts division. Operating income (earnings before other income/expense and income taxes) and net earnings attributable to The Marcus Corporation ~~decreased~~increased during the third quarter of fiscal ~~2017~~2018 compared to the third quarter of fiscal ~~2016~~2017 due to ~~decreased~~improved operating ~~income~~results from ~~both~~ our ~~theatre and~~ hotels and resorts ~~divisions.~~division. Operating income and net earnings attributable to The Marcus Corporation increased during the first three quarters of fiscal ~~2017~~2018 compared to the first three quarters of fiscal ~~2016~~2017 due to ~~record~~improved operating results from both our theatre division ~~partially offset by a decrease in operating income from~~and our hotels and resorts division.

~~New theatres favorably impacted revenues and operating income from our theatre division~~ Net earnings attributable to The Marcus Corporation also increased during the ~~third quarter and first three quarters of~~ fiscal ~~2017~~2018 periods compared to the third quarter and first three quarters of fiscal 2016. In mid-October 2016, we opened a newly renovated theatre in Country Club Hills, Illinois. In mid-December 2016, our theatre division acquired Wehrenberg Theatres® (which we refer to as Wehrenberg or Marcus Wehrenberg), a Midwestern theatre circuit consisting of 14 theatres with 197 screens, plus an 84,000 square foot retail center. In April 2017, we opened a new theatre in Shakopee, Minnesota. On June 30, 2017, the first day of our fiscal 2017 ~~third quarter, we opened our first stand-alone all in-theatre dining location, branded~~~~BistroPlex~~^SM ~~and located in Greendale, Wisconsin.~~periods due to a lower effective income tax rate.

Operating results from our theatre division were unfavorably impacted by ~~a weaker slate of movies~~higher film costs and several one-time costs during the ~~fiscal 2017 second and~~ third ~~quarters compared to the second and third quarters~~quarter of fiscal ~~2016, but~~2018. Operating results from our theatre division were favorably impacted by increased attendance from a stronger slate of movies during the first three quarters of fiscal ~~2017 first quarter~~2018 compared to the first ~~quarter~~three quarters of fiscal ~~2016. Increased attendance resulting from positive customer response to~~2017, as well as an increase in our ~~recent investments and pricing strategies~~average ticket price 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 the third quarter of fiscal 2017~~offerings. Two new theatres also favorably impacted revenues and ~~contributed to~~operating income from our ~~improved operating results~~theatre division during the first three quarters of fiscal ~~2017~~2018 compared to the ~~same periods in~~first three quarters of fiscal ~~2016. Increased preopening expenses related to new theatres during the fiscal 2017 periods negatively impacted comparisons to the fiscal 2016 periods.~~2017.

Revenues from our hotels and resorts division were favorably impacted by increased room revenues, food and beverage revenues and other revenues, including management fees, during the first three quarters of fiscal 2018 compared to the first three quarters of fiscal 2017. Comparisons of our operating income during the third quarter and first three quarters of fiscal 2018 to our operating income during the third quarter and first three quarters of fiscal 2017 ~~by revenues~~ from our ~~new~~hotels and resorts division were favorably impacted by the increased revenues, strong cost controls and the fact that our fiscal 2017 results included preopening expenses and start-up operating losses from ourSafeHouse® restaurant and bar that we opened ~~on March 1, 2017~~ in downtown Chicago, Illinois, adjacent to our AC Chicago Downtown Hotel. Increased room revenues during the fiscal 2017 periods, due in part to new villas that we opened during the second quarter of fiscal 2017 at the Grand Geneva Resort & Spa, also contributed to the increased total revenues during the fiscal 2017 periods, partially offset by slightly reduced food and beverage revenues for comparable hotels during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016. Operating results from our hotels and resorts division were unfavorably impacted by preopening expenses and start-up operating losses from our new~~SafeHouse~~ ~~restaurant and bar during the fiscal 2017 periods.~~Hotel, on March 1, 2017.

Operating losses from our corporate items, which include amounts not allocable to the business segments, ~~were unchanged~~increased during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter ~~of fiscal 2016. Operating losses from our corporate items increased during the~~and first three quarters of fiscal 2017 ~~compared to the first three quarters of fiscal 2016~~ due in part to ~~one-time costs associated with the retirement of two directors from our board of directors during the second quarter of fiscal 2017~~increased legal expense and ~~the death of a director during the third quarter of fiscal 2017.~~increased pension and 401(k) expenses. Increased long-term incentive compensation expenses resulting from our improved financial performance and stock performance during the past several years also contributed to increased operating losses from our corporate items during the third quarter and first three quarters of fiscal ~~2017.~~2018, as did an increase in our accrual for contributions to our charitable foundation during the fiscal 2018 periods.

We did not have any significant variations in investment income or net equity earnings ~~(losses)~~(loss) from unconsolidated joint ventures during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016.~~2017. We recognized ~~a loss~~losses on disposition of property, equipment and other assets during the third quarter and first three quarters of ~~$449,000~~fiscal 2018 of $359,000 and ~~$420,000,~~$767,000, respectively, due primarily to losses related to old theatre seats and other items disposed of in conjunction with theatre renovations during the period. We recognized losses on disposition of property, equipment and other assets during the third quarter and first three quarters of fiscal 2017 of $449,000 and $420,000, respectively, due primarily to ~~our disposal of~~losses related to old theatre seats and other items disposed of in conjunction with ~~our significant number of~~ theatre renovations during the periods, as well as ~~our~~a write off of disposed equipment at one of our hotels during the first quarter of fiscal 2017, partially offset by our sale of two theatres (one that had previously closed and one that had been operating prior to the sale) and our sale of the minority equity interest we held in a hotel. We recognized a small gain of $239,000 on disposition of property, equipment and other assets during the third quarter of fiscal 2016 related primarily to our sale of an unused piece of land. We recognized2017. These losses ~~on disposition of property, equipment and other assets~~ during the first three quarters of fiscal ~~2016 totaling $478,000 primarily due~~2017 were partially offset by several gains related to the sale of two theatres and the sale of our ~~disposal of old theatre seats and other items~~equity interest in ~~conjunction with prior theatre renovations.~~a hotel during fiscal 2017. The timing of periodic sales and disposals of our property and equipment ~~may vary~~varies from quarter to quarter, resulting in variations in our reported gains or losses on disposition of property and equipment.

Our interest expense totaled $3.2 million for the third quarter of fiscal 2018 compared to $3.4 million for the third quarter of fiscal 2017, ~~compared to $2.1 million for the third quarter of fiscal 2016, an increase~~a decrease of approximately ~~$1.3 million,~~$200,000, or ~~58.3%~~5.6%. Our interest expense totaled $10.0 million for the first three quarters of fiscal 2018 compared to $9.5 million for the first three quarters of fiscal 2017, ~~compared to $7.0 million for the first three quarters of fiscal 2016,~~ an increase of approximately ~~$2.5 million,~~$500,000, or ~~35.2%~~5.8%. The decrease in interest expense during the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017 is due to lower borrowing levels during the fiscal 2018 period, partially offset by a higher average interest rate. The increase in interest expense during the first three quarters of fiscal ~~2017 periods was due primarily~~2018 compared to ~~payments we made on~~ the approximately $17.5 million of capital lease obligations we assumed in the Wehrenberg acquisition. We also experienced an increase in our total borrowings under long-term debt agreements during the third quarter and first three quarters of fiscal 2017 ~~compared~~was due primarily to ~~the comparable periods of fiscal 2016, further contributing to our increased interest expense during the fiscal 2017 periods, partially offset by~~ a ~~lower~~higher average interest rate during fiscal ~~2017,~~2018, as ~~we had~~ a ~~greater percentage~~result of ~~lower-cost~~increases in short-term interest rates on our variable rate ~~debt~~debt. In addition, on March 1, 2018, we entered into two interest rate swap agreements, effectively converting $50.0 million in ~~our debt portfolio during the fiscal 2017 periods compared~~variable rate borrowings to ~~the fiscal 2016 periods.~~a fixed rate. Changes in our borrowing levels due to variations in our operating results, capital expenditures, share repurchases and asset sale proceeds, among other items, may impact our actual reported interest expense in future periods, as would further increases in short-term interest rates and changes in the mix between fixed rate debt and variable rate debt in our debt portfolio.

We reported income tax expense for the third quarter and first three quarters of fiscal ~~2017~~2018 of $2.6 million and $12.3 million, respectively, compared to $6.9 million and $18.6 ~~million, respectively, compared to $8.7 million and $18.2~~ million, respectively, during the third quarter and first three quarters of fiscal ~~2016.~~2017. The ~~increase~~decrease in income tax expense ~~for~~during the first three quarters of fiscal ~~2017~~2018 compared to the first three quarters of fiscal ~~2016~~2017, despite an increase in earnings before income taxes, was the result of ~~increased earnings, partially offset by~~ the ~~fact that our~~reduction in the federal tax rate from 35% to 21% resulting from the December 22, 2017 signing of the Tax Cuts and Jobs Act of 2017. Our fiscal ~~2017~~2018 first three quarters effective income tax rate, after adjusting for ~~losses~~earnings from noncontrolling interests that are not tax-effected because the entities involved are tax pass-through entities, was ~~37.8%~~21.5%, compared to our fiscal ~~2016~~2017 first three quarters effective income tax rate of ~~38.5%~~37.8%. Our fiscal 2018 income tax expense was also favorably impacted during the fiscal 2018 third quarter by income tax benefits related to excess tax benefits on share-based compensation as well as for reductions in deferred tax liabilities related to tax accounting method changes we made subsequent to the Tax Cut and Jobs Act of 2017. As of the date of this report, we anticipate that our effective income tax rate for the ~~remaining~~final quarter of fiscal ~~2017~~2018 will ~~remain close~~likely return to our ~~historical 38%-40% average,~~expected 25-26% range, excluding any changes in our liability for unrecognized tax benefits, or potential further changes in federal and state income tax ~~rates.~~rates or other one-time tax benefits. Our actual fiscal ~~2017~~2018 effective income tax rate may be different from our estimated quarterly rates depending upon actual facts and circumstances.

The operating results of ~~two hotels of which we are the majority owner,~~one majority-owned hotel, The Skirvin Hilton, ~~and The Lincoln Marriott Cornhusker Hotel,~~ are included in the hotels and resorts division revenue and operating income during the fiscal 2018 and fiscal 2017 periods, and the after-tax net earnings or loss attributable to noncontrolling interests ~~in these hotels~~ is deducted from or added to net earnings on the consolidated statements of earnings. The operating results of The Lincoln Marriott Cornhusker Hotel were also included in the hotels and resorts division revenue and operating income during the fiscal 2018 and fiscal 2017 periods, but because this hotel was not wholly-owned during the third quarter and first three quarters of fiscal 2017, the after-tax net earnings or loss attributable to noncontrolling interests for this property was deducted from or added to net earnings on the consolidated statements of earnings during the fiscal 2017 periods. During the fourth quarter of fiscal 2017, we purchased the noncontrolling interest of The Lincoln Marriott Cornhusker Hotel from its former minority owner. We reported net ~~losses~~earnings attributable to noncontrolling interests of ~~$495,000 and $282,000, respectively,~~$70,000 during the first three quarters of fiscal ~~2017 and~~2018 compared to a net loss of $495,000 during the first three quarters of fiscal ~~2016.~~2017.

The following table sets forth revenues, operating income and operating margin for our theatre division for the third quarter and first three quarters of fiscal ~~2017~~2018 and fiscal ~~2016~~2017 (in millions, except for variance percentage and operating margin):

	Third Quarter												First Three Quarters											Third Quarter												First Three Quarters
							Variance												Variance											Variance												Variance
	F2017			F2016			Amt.			Pct.			F2017			F2016			Amt.		Pct.			F2018			F2017			Amt.			Pct.			F2018			F2017			Amt.		Pct.
Revenues	$	89.8		$	81.9		$	7.9			9.6	%	$	295.0		$	238.8		$	56.2		23.5	%	$	95.0		$	90.3		$	4.7			5.2	%	$	333.4		$	296.6		$	36.8		12.4	%
Operating income		15.8			18.1			(2.3	)		-12.5	%		58.5			51.5			7.0		13.5	%		14.5			15.9			(1.4	)		-8.9	%		66.3			58.6			7.7		13.2	%
Operating margin (% of revenues)		17.6	%		22.1	%								19.8	%		21.6	%							15.2	%		17.6	%								19.9	%		19.7	%

Our theatre division revenues increased during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016~~2017 due primarily to increased attendance at comparable theatres due to a stronger film slate, new theatres that we opened ~~or acquired~~ during ~~the fourth quarter of fiscal 2016 and first three quarters of~~ fiscal 2017, ~~as well as~~and an increase in our average ticket price and average concession revenues per person, ~~at comparable theatres,~~ resulting in increased ~~box office receipts~~admission revenues and concession revenues. ~~Decreased attendance at comparable~~In addition, our adoption of the new revenue recognition accounting standard and our change in the presentation of cost reimbursements for managed theatres ~~due to a weaker film slate negatively impacted~~(described above) resulted in an increase in theatre division revenues of $500,000 and ~~operating income~~$2.5 million, respectively, during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the restated third quarter and first three quarters of fiscal ~~2016.~~2017.

Our theatre division operating income and operating margin decreased during the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017 due primarily to increased depreciation, higher film costs and several one-time costs. Depreciation costs have increased due to our significant recent investments in many of our theatres. Film costs increased during the fiscal 2018 third quarter primarily due to an unfavorable mix of films compared to the prior year. The top films of the fiscal 2018 third quarter film slate were summer blockbuster films and film costs, expressed as a percentage of admission revenues, are generally greater for blockbuster films. Our top film during the third quarter of fiscal 2017 was a less expensive September film. In addition, comparisons to last year were negatively impacted by the fact that our fiscal 2017 third quarter film cost benefitted from a one-time adjustment for prior periods related to an arrangement with a particular studio.

Our theatre division operating income and operating margin increased during the first three quarters of fiscal ~~2017~~2018 compared to the first three quarters of fiscal ~~2016~~2017 due primarily to the increased revenues described above, partially offset by higher film costs and depreciation costs. The increase in theatre division revenues related to our adoption of the new revenue recognition standard described above and our change in the presentation of cost reimbursements for managed theatres, both without a related material change in operating income, ~~from~~negatively impacted our operating margin during the ~~acquired Wehrenberg theatres.~~fiscal 2018 periods compared to the fiscal 2017 periods. Preopening expenses of approximately $800,000 related to the opening of two new theatres negatively impacted our operating income ~~during the first three quarters of fiscal 2017. Our theatre division revenues~~ and operating income during the third quarter of fiscal 2017 were also negatively impacted by the fact that we had up to 15% of our Marcus Wehrenberg screens out of service during long portions of the fiscal 2017 period due to renovations underway at multiple theatres.

The aforementioned preopening expenses, in conjunction with the weaker film slate during the second and third quarters of fiscal 2017 and higher fixed costs, such as depreciation and amortization, rent and property taxes, due in part to the Wehrenberg acquisition, negatively impacted our theatre division operating margins during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016. Excluding total preopening expenses, our theatre division operating margin during the first three quarters of fiscal 2017 was 20.2%. Increased other revenues and slightly lower film costs favorably impacted our operating margin during the fiscal 2017 periods, but not enough to offset the impact of decreased attendance during these periods.2017.

The following table provides a further breakdown of the components of revenues for the theatre division for the third quarter and first three quarters of fiscal ~~2017~~2018 and fiscal ~~2016~~2017 (in millions, except for variance percentage):

	Third Quarter									First Three Quarters									Third Quarter										First Three Quarters
					Variance									Variance									Variance										Variance
	F2017		F2016		Amt.		Pct.			F2017		F2016		Amt.		Pct.			F2018		F2017		Amt.			Pct.			F2018		F2017		Amt.			Pct.
Box office receipts	$	50.3	$	46.9	$	3.4		7.2	%	$	166.2	$	137.8	$	28.4		20.6	%
Admission revenues																			$	52.4	$	50.2	$	2.2			4.3	%	$	185.0	$	166.2	$	18.8			11.3	%
Concession revenues		33.3		30.3		3.0		10.0	%		109.4		88.6		20.8		23.4	%		35.5		33.3		2.2			6.6	%		123.7		109.4		14.3			13.1	%
Other revenues		6.2		4.7		1.5		29.9	%		19.4		12.4		7.0		56.2	%		6.9		6.3		0.6			10.5	%		23.6		19.3		4.3			21.7	%
																				94.8		89.8		5.0			5.6	%		332.3		294.9		37.4			12.7	%
Cost reimbursements																				0.2		0.5		(0.3	)		-56.4	%		1.1		1.7		(0.6	)		-34.7	%
Total revenues	$	89.8	$	81.9	$	7.9		9.6	%	$	295.0	$	238.8	$	56.2		23.5	%	$	95.0	$	90.3	$	4.7			5.2	%	$	333.4	$	296.6	$	36.8			12.4	%

~~The majority of the increase~~We opened new theatres in April 2017 and June 2017 that favorably impacted our ~~box office receipts~~admission revenues and concession revenues ~~for~~during the ~~third quarter and~~ first three quarters of fiscal ~~2017~~2018 compared to the ~~third quarter and~~ first three quarters of fiscal 2016 was due to the impact of the 14 theatres that we acquired from Wehrenberg, the theatre that we opened in Country Club Hills, Illinois during our fiscal 2016 fourth quarter, the theatre that we opened in Shakopee, Minnesota during our fiscal 2017 second quarter and the~~BistroPlex~~ ~~theatre we opened in Greendale, Wisconsin on the first day of our fiscal 2017 third quarter.~~2017. Excluding these two new theatres as(as well as two nearby theatres that are no longer comparable to last year because their pricing policies were significantly ~~changed as a result of the new theatres we opened nearby, box office receipts decreased 15.6%~~changed), admission revenues and concession revenues ~~decreased 13.1%~~ for comparable theatres ~~during the third quarter of fiscal 2017 compared to the third quarter of fiscal 2016~~increased 10.4% and ~~decreased 3.6% and 0.3%~~11.5%, respectively, during the first three quarters of fiscal ~~2017~~2018 compared to the first three quarters of fiscal ~~2016.~~2017.

Conversely, the change in how we recognize revenue related to our Magical Movie Rewards customer loyalty program as a result of our adoption of the new revenue recognition accounting standard (discussed above) resulted in a decrease in admission revenues of approximately $600,000 and $2.0 million, respectively, and an increase in concession revenues of approximately $500,000 and $1.5 million, respectively, during the third quarter and first three quarters of fiscal 2018. Excluding the impact of these changes in revenue recognition from the fiscal 2018 periods, admission revenues increased 5.5% and 12.5%, respectively, and concession revenues increased 5.1% and 11.8%, respectively, during the third quarter and first three quarters of fiscal 2018 compared to the third quarter and first three quarters of fiscal 2017.

According to data received from Rentrak (a national box office reporting service for the theatre industry) and compiled by us to evaluate our fiscal ~~2017~~2018 third quarter and first three ~~quarters~~quarter results, United States box office receipts ~~(excluding~~(including new ~~builds for the top ten theatre circuits) decreased 13.4% and 4.0%, respectively,~~theatres) increased 6.9% during our fiscal ~~2017~~2018 third quarter and increased 10.0% during our fiscal 2018 first three quarters, indicating that our ~~box office receipts at comparable theatres underperformed the industry~~admission revenues during the third quarter of fiscal 2018 underperformed the industry by ~~2.2~~1.4 percentage points and ~~outperformed the industry~~our admission revenues during the first three quarters of fiscal ~~2017~~2018 outperformed the industry by ~~0.4~~2.5 percentage ~~points.~~points, both after adjusting for the above described impact of the change in accounting for revenues related to our loyalty program. Even though we slightly underperformed the industry during the most recent quarter, we have still outperformed the industry average during 16 of the last 19 quarters. We believe ~~we underperformed~~our underperformance of the industry average during the third quarter of fiscal ~~2017 due primarily~~2018 can be attributed to ~~several~~an unfavorable ~~factors in July 2017 compared to July 2016, including~~ film mix and the ~~fact that we had a number~~impact of major league baseball in several of our ~~comparable screens out of service during the fiscal 2017 period due to renovations underway at multiple theatres, and slightly unfavorable weather comparisons to last year.~~

~~July box office revenues represented approximately 50%~~key markets, as further discussed below. The performance of our third quarter total box office revenues, so that month has a disproportionate impact on our overall third quarter results. We believe our underperformance during July was an anomaly, as evidenced by the fact thatMarcus Wehrenberg theatres, which we ~~outperformed the industry by over nine percentage points~~acquired in ~~September 2017. Despite the unusual circumstances~~December 2016, many of which have subsequently undergone significant renovations, continued to be particularly strong during the third quarter and first three quarters of fiscal ~~2017, we have still outperformed~~2018 compared to the prior year, contributing to our year-to-date outperformance of the industry during thirteen of the last fifteen quarters. We believe our consistent outperformance to 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, including our $5 Tuesday promotion and our customer loyalty program.average.

~~Excluding the Marcus Wehrenberg theatres, our~~Our average ticket price increased ~~3.1%~~1.3% and ~~1.2%~~4.6%, respectively, during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016.~~2017. The increases were partially attributable to modest price increases we implemented in October 2017. In addition, the fact that we ~~implemented modest price increases in November 2016 and~~ have increased our number of premium large format (PLF) screens, along with a corresponding price premium, also contributed to ~~the increase in~~ our increased average ticket price during the fiscal ~~2017~~2018 periods. ~~We also~~Conversely, we believe that a change in film product mix had ~~a positive~~an unfavorable impact on our average ticket price during the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017. Our top film during the third quarter of fiscal 2018 was the PG-rated family movieIncredibles 2 (resulting in a higher percentage of lower-priced children’s tickets sold), compared to our top film during the third quarter of fiscal 2017, which was the R-rated filmIt (resulting in a higher percentage of higher-priced adult tickets sold). The increase in average ticket price contributed approximately $650,000, or 30%, ~~compared~~ to our ~~top film~~comparable theatre admission revenues during the third quarter of fiscal ~~2016, which was~~2018 compared to the ~~PG-rated family movie~~third quarter of fiscal 2017. The ~~Secret Life~~increase in average ticket price contributed approximately $7.6 million, or 44%, to our comparable theatre admission revenues during the first three quarters of ~~Pets~~ ~~(resulting in a higher percentage~~fiscal 2018 compared to the first three quarters of ~~lower-priced children’s tickets sold). Conversely, the percentage of our total box office receipts attributable to 3D presentations decreased significantly~~fiscal 2017.

Our concession revenues increased during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016~~2017 due ~~primarily~~ to ~~a reduced number~~the addition of ~~3D films and weaker 3D performances from our top fiscal 2017 films, contributing to a lesser~~new theatres, an increase in attendance at comparable theatres, an increase in our average ticket price during the fiscal 2017 periods than we might otherwise expect. We implemented modest price increases in October 2017 that we expect to favorably impact our average ticket price in future periods.

~~Our~~ concession revenues ~~at comparable theatres decreased~~per person and the above-described increase related to the change in accounting for loyalty program revenues. Our average concession revenues per person increased by 3.5% and 6.3%, respectively, during ~~the~~our third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016 due to decreased attendance during the fiscal 2017 periods, partially offset by an increase of 6.7% and 4.3%, respectively, in our average concession revenues per person.~~2017. The increase in our average concession revenues per person contributed approximately ~~$1.6~~$1.2 million, ~~and $3.6 million, respectively,~~or 53%, to our comparable theatre concession revenues during the third quarter ~~and~~of fiscal 2018 compared to the third quarter of fiscal 2017. The increase in our average concession revenues per person contributed approximately $6.0 million, or 48%, to our comparable theatre concession revenues during the first three quarters of fiscal ~~2017~~2018 compared to the ~~third quarter and~~ first three quarters of fiscal ~~2016.~~2017.

A change in concession product mix, including increased sales of non-traditional food and beverage items from our increased number ofTake Five Lounge^SM,Zaffiro’s® Express ~~and~~,Reel Sizzle® and in-theatre dining outlets, as well as modest selected price increases ~~that~~ we introduced in ~~November 2016,~~October 2017, were the primary reasons for our increased average concession sales per person during the fiscal ~~2017~~2018 periods. ~~We implemented modest price increases~~Conversely, we believe that the above described change in ~~October 2017 that are expected to favorably impact~~film product mix during the third quarter of fiscal 2018 likely reduced the growth of our overall average concession ~~revenues~~sales per person ~~in future periods,~~during the fiscal 2018 third quarter, as ~~will~~family-oriented films such as the ~~anticipated opening~~top film during the third quarter of ~~additional~~fiscal 2018 described above tend not to contribute to sales of non-traditional food and beverage ~~outlets in future periods.~~items as much as adult-oriented films.

Other revenues increased by ~~$1.5 million~~approximately $600,000 and ~~$7.0~~$4.3 million, respectively, during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016. Approximately $1.4~~2017. All of the increase during the third quarter of fiscal 2018 and approximately $3.5 million ~~and $3.9 million, respectively,~~ of ~~this~~the increase 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 increases in other revenues during the first three quarters of fiscal ~~2017 was attributable~~2018 related to ~~comparable theatres and was due primarily to an increase~~the change in ~~preshow advertising income,~~how we now report internet surcharge ticketing fees. Prior to the new revenue recognition standard, we recorded these fees net of third-party commission or service fees. Under the new guidance that we adopted in the first quarter of fiscal 2018 (discussed above), we are recognizing ticket fee revenues based on a gross transaction price. This change had the effect of increasing other revenues and ~~breakage~~increasing other operating expense, but had no impact on ~~presold discounted tickets.~~operating income or net earnings. The remaining increase in other revenues is attributable primarily to increased preshow advertising income.

Total theatre attendance increased ~~4.6%~~3.0% and ~~19.7%~~6.4%, respectively, during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016.~~2017. Excluding the ~~Marcus Wehrenberg~~new theatres ~~the new Country Club Hills, Illinois theatre, the new Shakopee, Minnesota theatre, the new~~~~BistroPlex~~and, correspondingly, two ~~legacy~~ theatres that are no longer comparable to last year because their pricing policies were significantly changed as a result of the new theatres we opened nearby, comparable theatre attendance ~~decreased 17.4% and 4.4%, respectively,~~increased 5.9% during the ~~third quarter and~~first three quarters of fiscal 2018 compared to the first three quarters of fiscal 2017, ~~compared to the fiscal 2016 periods,~~ due ~~primarily~~ to a ~~weaker~~stronger film slate in the ~~current year~~fiscal 2018 periods.

We believe a combination of several additional factors ~~contributed~~continue to contribute to our overall increase in attendance and our above-described industry outperformance ~~of the industry~~ during the first three quarters of fiscal ~~2017.~~2018. In addition to the $5 Tuesday promotion that continued to perform well, we believe our fiscal ~~2017~~2018 third quarter and first three quarters attendance was favorably impacted by increased attendance at theatres that have added our spacious new DreamLounger^SMSM electric all-recliner seating, our proprietaryUltraScreen DLX® andSuperScreen DLX^SMSM PLF screens and our unique food and beverage outlets described ~~above.~~above, particularly at our Marcus Wehrenberg theatres. We also believe that we ~~are recognizing~~continue to recognize the benefits of our customer loyalty program, introduced in March 2014 and which now has ~~approximately 2.4~~nearly three million members.

~~The~~Attendance and admission revenues increased during eight of the 13 weeks of the third quarter of fiscal 2018 compared to the comparable weeks during the third quarter of fiscal 2017, ~~started very poorly,~~ with ~~ten straight weeks~~the majority of ~~decreased attendance and box office receipts~~the increases occurring in July and August, ~~before ending with three strong weeks in September. We were encouraged~~led by the ~~fact~~strong carryover of two films that ~~our highest grossing film~~opened during the fiscal 2018 second quarter, ~~was released~~Incredibles 2 andJurassic World: Fallen Kingdom, and stronger films in August compared to a relatively weak film slate during August 2017. Conversely, last year’s top film,It, opened in September, which has historically been one of the weakest periods for movie-going, as students return to school and the quality of films released tends to weaken. However, that fact also highlights the overall weaker quality of the films released during the preceding two months.creating a very challenging comparison in September 2018. We also believe that the ~~particular~~film mix during the third quarter of ~~films during July 2017 was not as favorable to our Midwestern circuit as~~fiscal 2018 compared to the third quarter of fiscal 2017 may have had a negative impact on our comparative performance versus the overall industry numbers, particularly during August and September. One of the top films ~~released~~ during ~~July 2016. The top film during July 2016 was~~those two months,~~The Secret Life of Pets~~Crazy Rich Asians, performed extremely well on the east and ~~this family-oriented film performed particularly well~~west coasts, but generally underperformed in our ~~theatres~~Midwestern markets. We also believe that the fact that the major league baseball teams in three of our key markets, Milwaukee, Chicago and St. Louis, were competing for the playoffs during the final month of their season, September 2018, had a negative impact on our attendance compared to the ~~rest of the nation, contributing to our comparative underperformance to the~~ industry ~~in July 2017 versus July 2016. In addition, historically in our Midwestern markets, rain on the weekends or very warm weather often has~~as a favorable impact on theatre attendance. During July 2017, weekend weather in the markets in which we operate was, on average, not quite as warm as July 2016, nor did it have as many weekend days with rain as it did last year. Our past experience has been that people in the Midwest tend to enjoy outdoor activities when it’s dry on the weekend and not overly hot.whole.

Our highest grossing films during the fiscal 2018 third quarter ~~of fiscal 2017 included~~wereItIncredibles 2,~~Spider-Man: Homecoming~~Jurassic World: Fallen Kingdom,~~Despicable Me 3~~Ant-Man and the Wasp,~~Dunkirk~~Mission: Impossible – Fallout and~~War for the Planet of the Apes~~Hotel Transylvania 3: Summer Vacation. The film slate during the third quarter of fiscal ~~2017~~2018 was weighted ~~more~~slightly less towards strong blockbuster movies, as evidenced by the fact that our top five films during our fiscal ~~2017~~2018 third quarter accounted for ~~48%~~37% of our total ~~box office results~~admission revenues, compared to ~~42%~~48% for the top five films during the third quarter of fiscal ~~2016,~~2017, both expressed as a percentage of ~~our~~the total ~~box office receipts~~admission revenues for the period. ~~We believe~~Under normal circumstances, this ~~increase in~~reduced reliance on blockbuster ~~films was more an indication of the lesser quality of the other~~ films during the ~~quarter than~~fiscal 2018 period should have had the ~~quality~~effect of ~~the top five films. Our~~reducing our film rental costs ~~decreased~~during the period, but as noted above, this was not the case during the third quarter of fiscal ~~2017~~2018 due to the unusual change in the film product mix compared to the ~~third quarter of fiscal 2016, as generally the worse a particular film performs, the lesser the film rental cost tends to be as a percentage of box office receipts.~~prior year.

Film product for the fourth quarter of fiscal ~~2017~~2018 has, through the date of this report, produced ~~box office results~~admission revenues greater than the same period of fiscal ~~2016, and we believe we have returned to outperforming the industry during this period.~~2017. Top performing films during this period have included films such asItVenom,~~Blade Runner 2049~~A Star is Born,~~Happy Death Day~~Halloween,~~Thor: Ragnarok~~ and~~A Bad Moms Christmas~~Bohemian Rhapsody. ~~Film product~~Other films scheduled to be released during the traditionally busy November and December time period ~~appears quite promising, including films such as~~that may generate substantial box office interest include~~Murder on the Orient Express~~Dr. Suess’ The Grinch,~~Daddy’s Home 2~~Fantastic Beasts: The Crimes of Grindelwald,~~Justice League~~Ralph Breaks the Internet: Wreck-It,~~Coco~~Creed II,Mary Poppins Returns,Bumblebee,Aquaman andHolmes and Watson. Comparisons to last year’s December film slate may be challenging due to the strong performance of the filmsStar Wars: The Last Jedi,~~Pitch Perfect 3~~andJumanji: Welcome to the Jungle.during December 2017. We also have seen some negative impact on October 2018 attendance in our Milwaukee market due to the impact of playoff baseball. Revenues for the theatre business and the motion picture industry in general are heavily dependent on the general audience appeal of available films, together with studio marketing, advertising and support campaigns and the maintenance of the current “windows” between the date a film is released in theatres and the date a ~~motion picture~~film is released to other channels, including video on-demand and DVD. These are factors over which we have no control.

We ended the first three quarters of fiscal ~~2017~~2018 with a total of 884 company-owned screens in 67 theatres and 116 managed screens in ~~two theatres,~~one theatre, compared to ~~659~~884 company-owned screens in 5167 theatres and 11 managed screens in two theatres at the end of the first three quarters of fiscal ~~2016. In addition to the previously described~~2017. We opened a new ~~theatres opened and acquired during 2016,~~10-screen theatre in Shakopee, Minnesota in April 2017 ~~we opened our~~and a new ~~10-screen Southbridge Crossing Cinema in Shakopee, Minnesota. This state-of-the-art theatre includes DreamLounger recliner seating in all auditoriums, two~~~~Ultra~~~~Screen DLX auditoriums, as well as a~~~~Take Five Lounge~~ ~~and~~~~Zaffiro’s Express~~ ~~outlet. On June 30, 2017, the first day of our fiscal 2017 third quarter, we opened our first stand-alone~~eight-screen all in-theatre dining ~~location,~~theatre, brandedBistroPlex ~~and located~~^SM, in Greendale, ~~Wisconsin. This new~~Wisconsin in late June 2017. We ceased managing one five-screen theatre ~~features eight in-theatre dining auditoriums with DreamLounger recliners, including two~~~~Super~~~~Screen DLX auditoriums, plus a separate full-service~~~~Take Five Lounge~~~~. We have announced plans to further expand this concept, including a new location in Brookfield, Wisconsin. Construction is expected to begin on this new location in 2018.~~

~~During~~during the first three quarters of fiscal 2017, we completed the addition of DreamLounger recliner seating at nine more existing theatres, including two theatres (one of which was a Marcus Wehrenberg theatre) completed late in our fiscal 2017 third quarter, increasing our industry-leading percentage of first-run auditoriums with recliner seating to 66% for legacy Marcus theatres and 56% when including the theatres we acquired in the Wehrenberg acquisition. In late October 2017, we completed the addition of DreamLounger recliner seating to four more existing theatres (including three Marcus Wehrenberg theatres) and we are currently in the process of converting two additional Marcus Wehrenberg theatres to all-DreamLounger recliner seating, with expected completion late in the fourthsecond quarter of fiscal ~~2017 or early in the first quarter of fiscal 2018.~~

~~We opened one new~~~~Zaffiro’s Express~~~~outlet during the third quarter of fiscal 2017~~2018 and ~~expect to open two new~~~~Zaffiro’s Express~~~~outlets, three new~~~~Take Five Lounge~~ ~~outlets and two~~~~Reel Sizzle~~ ~~outlets during the fourth quarter of fiscal 2017. We also converted one existing traditional~~~~Ultra~~~~Screen to an~~~~Ultra~~~~Screen DLX auditorium and three existing screens to~~~~Super~~~~Screen DLX auditoriums during the third quarter of fiscal 2017 and converted one additional existing traditional~~~~Ultra~~~~Screen to an~~~~Ultra~~~~Screen DLX auditorium and two existing screens to~~~~Super~~~~Screen DLX auditoriums early in the fourth quarter of fiscal 2017. We expect to convert one existing Wehrenberg-branded PLF screen to an~~~~Ultra~~~~Screen DLX and up to six additional existing screens to~~~~Super~~~~Screen DLX auditoriums during the fourth quarter of fiscal 2017. We~~we closed and sold one eight-screen budget-oriented theatre during the second quarter of 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.~~2017.

We converted one Marcus Wehrenberg theatre to all-DreamLounger recliner seating during the first quarter of fiscal 2018, four more theatres, including one Marcus Wehrenberg theatre, to all-DreamLounger recliner seating during the second quarter of fiscal 2018, and one theatre to all-DreamLounger recliner seating during the third quarter of fiscal 2018. We are currently in the process of converting one more theatre to all-DreamLounger recliner seating, with completion expected during the fourth quarter of fiscal 2018. We opened two newZaffiro’s Express outlets and one newTake Five Lounge outlet during the second quarter of fiscal 2018. We also converted five existing screens toUltraScreen andSuperScreen DLX auditoriums during the second quarter of fiscal 2018 and one existing screen to aSuperScreen DLX auditorium during the third quarter of fiscal 2018. We have also begun construction on our secondBistroPlex to be located in Brookfield, Wisconsin.

On November 1, 2018, we entered into an Asset Purchase Agreement (the “Purchase Agreement”) with VSS-Southern Theatres LLC, Movie Tavern, Inc., Movie Tavern Theatres, LLC and TGS Beverage Company, LLC (collectively, “Sellers”) pursuant to which we will acquire substantially all of the assets and assume certain limited liabilities of Sellers’ Movie Tavern branded movie theatre business (the “Movie Tavern Business”). The Movie Tavern Business consists of 22 dine-in theatres located in Texas, Pennsylvania, Georgia, Louisiana, New York, Colorado, Arkansas, Kentucky and Virginia.

The purchase price for the Movie Tavern Business consists of $30 million in cash, subject to certain adjustments, and 2,450,000 shares of our common stock. We will finance the cash portion of the purchase price from existing sources of cash. The transaction is expected to close in the first quarter of fiscal 2019. Completion of the transaction is subject to certain customary closing conditions and approvals, including, among others, early termination or expiration of the applicable waiting period under the Hart-Scott-Rodino Act. We anticipate that the acquired Movie Tavern Business will be accretive to earnings, earnings per share and cash flow in the first 12 months following the closing of the transaction.

There are representations and warranties contained in the Purchase Agreement which were made by the parties to each other as of specific dates. The assertions embodied in these representations and warranties were made solely for purposes of the Purchase Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating its terms. Moreover, certain representations and warranties may not be accurate or complete as of any specified date because they are subject to a contractual standard of materiality that is different from certain standards generally applicable to shareholders or were used for the purpose of allocating risk between the parties rather than establishing matters as facts. Based upon the foregoing reasons, investors should not rely on the representations and warranties as statements of factual information.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement, which is filed as Exhibit 2.1 to this Quarterly Report on Form 10-Q and is incorporated herein by reference.

The following table sets forth revenues, operating income and operating margin for our hotels and resorts division for the third quarter and first three quarters of fiscal ~~2017~~2018 and fiscal ~~2016~~2017 (in millions, except for variance percentage and operating margin):

	Third Quarter												First Three Quarters												Third Quarter											First Three Quarters
							Variance												Variance												Variance											Variance
	F2017			F2016			Amt.			Pct.			F2017			F2016			Amt.			Pct.			F2018			F2017			Amt.		Pct.			F2018			F2017			Amt.		Pct.
Revenues	$	63.9		$	62.6		$	1.3			2.0	%	$	169.1		$	165.9		$	3.2			2.0	%	$	75.5		$	71.9		$	3.6		4.9	%	$	198.4		$	190.9		$	7.5		3.9	%
Operating income		9.6			10.6			(1.0	)		-9.3	%		12.7			15.1			(2.4	)		-15.8	%		12.0			9.7			2.3		24.5	%		15.7			12.8			2.9		22.9	%
Operating margin (% of revenues)		15.1	%		17.0	%								7.5	%		9.1	%								15.9	%		13.4	%							7.9	%		6.7	%

~~Hotels~~The following table provides a further breakdown of the components of revenues for the hotels and resorts division for the third quarter and first three quarters of fiscal 2018 and fiscal 2017 (in millions, except for variance percentage):

Division revenues increased ~~2.0%~~ during the third quarter and first three quarters of fiscal ~~2017~~2018 compared to the third quarter and first three quarters of fiscal ~~2016~~2017 due to increased room revenues, food and beverage revenues, other revenues and increased cost reimbursements from our managed hotels. Room revenues increased due primarily to increased ~~food~~group business during the fiscal 2018 periods compared to the fiscal 2017 periods. Food and beverage revenues ~~from~~increased during the first three quarters of fiscal 2018 primarily due to our ~~new~~SafeHouse restaurant and bar in Chicago, Illinois, ~~that we~~which opened on March 1, ~~2017, and a small increase in room~~2017. Other revenues ~~at our existing company-owned hotels~~increased during the fiscal 2018 periods due to ~~our addition~~increased management fees and rental income. Cost reimbursements, described above, also increased during the third quarter and first three quarters of ~~29 new all-season villas at~~fiscal 2018 compared to the ~~Grand Geneva Resort & Spa in May 2017. Hotels~~third quarter and ~~resorts division revenues increased 2.0% during the~~ first three quarters of fiscal 2017 ~~compared~~due to an increase in the number of management contracts in this division.

Our hotels and resorts division operating income and operating margin increased during the third quarter and first three quarters of fiscal ~~2016 due to increased food and beverage revenues from the~~~~SafeHouse~~ Chicago, increased room revenues at our existing company-owned hotels and increased other revenues from our EscapeHouse Chicago and our in-house web design and laundry businesses, partially offset by a small decrease in management fee revenues.

~~Hotels and resorts division operating income decreased by 9.3% during the third quarter of fiscal 2017~~2018 compared to the third quarter ~~of fiscal 2016 due primarily to the impact of a small decrease in revenue per available room (RevPAR) at our existing company-owned hotels~~ and ~~start-up operating losses at our new~~~~SafeHouse~~ ~~Chicago. Hotels and resorts division operating income decreased by 15.8% during the~~ first three quarters of fiscal 2017 ~~compared~~due in part to increased management fees, improved performance at several owned hotels and overall strong cost control management. In addition, comparisons to the ~~first three quarters of~~ fiscal ~~2016 due entirely to~~2017 periods were also favorably impacted by the fact that the prior year results included preopening expenses and startup operating losses related to the newSafeHouse Chicago and a reduction in profits from our management business, due in part to a small one-time favorable adjustment during the prior year period. Excluding these two items, operating income for our hotels and resorts division during the first three quarters of fiscal 2017 was essentially equal to operating income during the first three quarters of fiscal 2016.Chicago.

Our operating margin during the third quarter and first three quarters of fiscal 2017 was 15.1% and 7.5%, respectively, compared to an operating margin of 17.0% and 9.1%, respectively, during the third quarter and first three quarters of fiscal 2016. Excluding the~~SafeHouse~~ Chicago and management business profits from both years, our comparable hotels and resorts division operating income decreased 5.5% and 0.8%, respectively, during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016. Excluding these same items, our operating margin during the third quarter and first three quarters of fiscal 2017 was 14.7% and 7.4%, respectively, compared to an operating margin of 15.6% and 7.6%, respectively, during the third quarter and first three quarters of fiscal 2016.

The following table sets forth certain operating statistics for the third quarter and first three quarters of fiscal ~~2017~~2018 and fiscal ~~2016,~~2017, including our average occupancy percentage (number of occupied rooms as a percentage of available rooms), our average daily room rate, or ADR, and our total revenue per available room, or RevPAR, for company-owned properties:

	Third Quarter⁽¹⁾												First Three Quarters⁽¹⁾												Third Quarter⁽¹⁾											First Three Quarters⁽¹⁾
							Variance												Variance												Variance											Variance
	F2017			F2016			Amt.			Pct.			F2017			F2016			Amt.			Pct.			F2018			F2017			Amt.			Pct.		F2018			F2017			Amt.			Pct.
Occupancy pct.		82.0	%		82.1	%		-0.1	pts		-0.1	%		76.2	%		75.8	%		0.4	pts		0.5	%		84.1	%		82.0	%		2.1	pts		2.6%		76.2	%		76.2	%		-	pts		-	%
ADR	$	164.47		$	165.05		$	(0.58	)		-0.4	%	$	149.75		$	149.80		$	(0.05	)		-	%	$	168.58		$	164.47		$	4.11			2.5%	$	151.62		$	149.75		$	1.87			1.2	%
RevPAR	$	134.85		$	135.45		$	(0.60	)		-0.4	%	$	114.05		$	113.53		$	0.52			0.5	%	$	141.81		$	134.85		$	6.96			5.2%	$	115.48		$	114.05		$	1.43			1.3	%

RevPAR increased at ~~three~~all eight of our company-owned properties during the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017 and four of our eight company-owned properties during the ~~third quarter and~~ first three quarters of fiscal ~~2017~~2018 compared to the ~~third quarter and~~ first three quarters of fiscal ~~2016.~~2017. According to data received from Smith Travel Research and compiled by us in order to evaluate our ~~results for the~~fiscal 2018 third quarter and first three quarters ~~of fiscal 2017,~~results, comparable “upper upscale” hotels throughout the United States experienced ~~a decrease~~an increase in RevPAR of ~~0.4%~~2.1% during both our ~~fiscal 2017~~ third quarter and ~~an increase of 1.0% during our fiscal 2017~~ first three quarters of fiscal 2018 compared to ~~our fiscal 2016 first three quarters.~~the same periods last year. 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~~an increase in RevPAR of ~~4.8%~~6.5% and ~~4.2%~~2.5%, respectively, during our ~~fiscal 2017 third quarter and first three quarters compared to our fiscal 2016 third quarter and first three quarters.~~

We believe our RevPAR decrease during the third quarter of fiscal 2017 was due in large part to reduced group business compared to the third quarter of fiscal 2016. A particular challenge during the fiscal 2017 third quarter was a decrease in group sales productivity in which an unusually high number of groups contributed less actual rooms sold than were originally booked. The reduction in group business during the fiscal 2017 periods also resulted in small decreases in our food and beverage revenues at comparable hotels compared the same periods in fiscal 2016. As noted above, despite these challenges in group business, our change in RevPAR outperformed our competitive sets during both the third quarter and first three quarters of fiscal 2018 compared to the fiscal 2017 ~~by 4.4~~comparable periods.

We believe our increased occupancy percentage and ~~4.7 percentage points, respectively, as we~~ADR during the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017, along with the resulting RevPAR outperformance versus the industry, was due primarily to increased group business. We also believe the same baseball dynamic that negatively impacted our theatre business may have resulted in increased revenues for our Milwaukee hotels. We believe our slight RevPAR underperformance of our competitive sets during the third quarter of fiscal 2018 compared to the third quarter of fiscal 2017 was likely due to the fact that several hotels in our competitive sets had ~~success replacing some~~favorable comparisons to the prior year due to renovations and other unusual circumstances. Seven of our eight company-owned hotels reported increased ADR during the ~~decline in group business with an increase in non-group business.~~fiscal 2018 third quarter compared to the third quarter of fiscal 2017 and five of our eight company-owned hotels reported increased ADR during the first three quarters of fiscal 2018 compared to the first three quarters of fiscal 2017.

Looking to future periods, as of the date of this report, ~~we are encouraged by the fact that~~ our group room revenue bookings for the remaining period in fiscal ~~2017 and for fiscal~~ 2018 - ~~something~~ commonly referred to in the hotels and resorts industry as “group pace” - is running slightly ahead of our group room revenue bookings for ~~future periods~~the remaining period of fiscal 2017 last year at this time. ~~Banquet and catering revenue~~In addition, our group pace for ~~the remainder~~fiscal 2019 is also running ahead of ~~fiscal 2017 has also increased compared to~~where we were last year at this ~~time.~~

~~Our ADR decreased during the third quarter~~time for fiscal 2018. The impact of ~~fiscal 2017 compared to the third quarter of fiscal 2016, despite~~playoff baseball in Milwaukee also benefitted our addition in May 2017 of 29 new all-season villas at the Grand Geneva Resort & Spa. These new higher-priced units contributed to an increase in our ADR at that property. Due to the challenges in group productivity during the fiscal 2017 third quarter, we elected to accept a lower ADR in some situations to obtain additional non-group business. Our very small decrease in ADR during the first three quarters of fiscal 2017 compared to the first three quarters of fiscal 2016 was due in part to the fact that, during our fiscal 2017 first quarter, our focus was on increasing occupancy, often at the expense of ADR (it is generally more difficult to increase ADR during our slower winter season, as overall occupancy is at its lowest). Three of our eight company-owned hotels reported increased ADR during the third quarter and first three quarters of fiscal 2017 compared to the third quarter and first three quarters of fiscal 2016.October 2018 hotel results.

We generally expect our modestly favorable revenue trends to continue ~~to expect to report changes~~ in ~~RevPAR that generally~~future periods and to track or exceed the overall industry ~~and local market~~ trends, particularly in ~~future periods. As we noted in prior~~our respective markets. Many published reports the pace of the lodging industry’s growth slowed during the second half of fiscal 2016. Group business remains one of the most important segments for several of our hotels and also has an impact on our ADR. Typically, when we have substantial blocks of rooms committed to group business, we are able to raise rates with non-group business. Many reports published by those who closely follow the hotel industry, including Smith Travel Research, continue to suggest that the United States lodging industry will continue to achieve ~~slightly slower~~slow but steady growth in RevPAR during the ~~remainder~~remaining period of ~~calendar 2017~~2018 and ~~into calendar 2018.~~throughout 2019. There also appears to be some improvement in sentiment regarding the positive impact that recent regulatory and tax reforms are having on our business customers, which may be contributing to our improved group pace and we hope will result in increased business travel in the future. Whether the ~~current~~relatively positive trends in the ~~hotel~~lodging industry ~~as a whole~~over the last several years will continue depends in large part on the economic environment, ~~in which we operate,~~ as hotel revenues have historically tracked very closely with traditional macroeconomic statistics such as the Gross Domestic Product. We also continue to monitor hotel supply in our markets, as increased supply without a corresponding increase in demand may have a negative impact on our results.

~~We believe that our hotels and resorts division operating results will continue to benefit in future periods from the new villas at the Grand Geneva Resort & Spa.~~ In addition to the fact that we began managing the new Omaha Marriott Downtown at The Capitol District hotel in Omaha, Nebraska ~~a new hotel that we manage~~ and ~~in which we hold a minority interest, opened on August 8, 2017, and initial guest response to this hotel has been favorable. In addition, in September 2017, we assumed management of~~ the Sheraton Chapel Hill Hotel in Chapel Hill, North Carolina ~~which will favorably impact our revenues derived from management fees. Conversely, it is possible that our new~~~~SafeHouse~~ ~~Chicago restaurant may continue to have some negative impact on~~during the second half of fiscal 2017, our hotels and resorts division operating results ~~during~~are beginning to show the ~~next two quarters as~~benefits and should benefit in future periods from three new management contracts that we have recently obtained. In January 2018, we commenced management of the newly-opened Murieta Inn and Spa in Rancho Murieta, California. In April 2018, we commenced management of the DoubleTree by Hilton Hotel El Paso Downtown in El Paso, Texas. In August 2018, we commenced management of the newly opened Courtyard by Marriott El Paso Downtown/Convention Center. These new ~~property continues~~management contracts have increased our portfolio to ~~increase patronage~~21 owned and ~~ramp up operating efficiencies.~~managed properties across the country.

~~Early in the second quarter of~~Conversely, during fiscal 2017, we ceased management of the Sheraton Madison Hotel in Madison, Wisconsin and sold our 15% minority ownership interest in the property for a small gain. We do not expect this transaction to significantly impact our fiscal 2017 operating results. Early in the fourth quarter of fiscal 2017, we ceased management of The ~~Westin®~~Westin Atlanta Perimeter North in Atlanta, Georgia ~~and sold our 11% minority interest in~~due to the ~~property for a substantial gain. Although the~~sale of these properties. The loss of these management ~~fees~~contracts has partially offset the benefits of the new management contracts described above. The timing and possible disruption of business from ~~this~~our planned renovations at the InterContinental Milwaukee hotel ~~will~~and the Hilton Madison at Monona Terrace may also have a slight negative impact on ~~future~~our operating results ~~we expect the gain from this transaction to positively impact pre-tax earnings by over $4.5 million~~of those two hotels during the ~~fourth quarter~~remainder of fiscal ~~2017.~~2018 and first half of fiscal 2019.

We continue to explore opportunities to monetize ~~other~~ selected existing owned hotels in the future. We will consider many factors as we actively review opportunities to execute this strategy, including income tax considerations, the ability to retain management, pricing and individual market considerations. ~~Our execution~~Execution of this strategy is also dependent upon a favorable hotel transactional ~~market, over which we have limited control.~~market. In addition, we ~~have a number of~~continue to explore potential growth ~~opportunities that we are currently evaluating.~~opportunities. The timing and nature of the opportunities may vary and include pure management contracts, management contracts with equity, and joint venture investments.

In October 2017, Joe Khairallah submitted his resignation as division President and Chief Operating Officer of Marcus Hotels and Resorts to pursue global opportunities. We are grateful for his contributions to our company during the past four years. Greg Marcus will assume operational oversight of this division as we evaluate our future leadership needs, supported by a strong and experienced senior leadership team.

Our movie theatre and hotels and resorts businesses each generate significant and consistent daily amounts of cash, subject to previously-noted seasonality, because each segment’s revenue is derived predominantly from consumer cash purchases. We believe that these relatively consistent and predictable cash sources, as well as the availability of approximately ~~$64~~$108 million of unused credit lines as of the end of our fiscal ~~2017~~2018 third quarter, will be adequate to support the ongoing operational liquidity needs of our businesses during the remainder of fiscal ~~2017.~~2018.

Net cash provided by operating activities totaled ~~$50.9~~$77.1 million during the first three quarters of fiscal ~~2017,~~2018, compared to ~~$44.8~~$50.9 million during the first three quarters of the fiscal ~~2016.~~2017. The $26.2 million increase ~~of $6.1 million~~ in ~~net~~ cash provided by operating activities was due primarily to increased net earnings and depreciation and amortization, ~~and~~as well as the favorable ~~timing in the payment of accounts payable and taxes other than income, partially offset by the change in deferred taxes and the unfavorable~~ timing in the collection of accounts and notes receivable and payment of income taxes, partially offset by the unfavorable timing in the payment of accounts payable and other accrued ~~compensation~~liabilities during the first three quarters of fiscal 2018 compared to the first three quarters of fiscal 2017.

Net cash used in investing activities during the first three quarters of fiscal ~~2017~~2018 totaled ~~$84.6~~$46.1 million, compared to ~~$40.3~~$82.1 million during the first three quarters of fiscal ~~2016. A significant contributor to the increase~~2017. The decrease in net cash used in investing activities was ~~a $12.5 million decrease in restricted cash~~primarily the result of decreased capital expenditures during the first three quarters of fiscal 2016. When we sold the Hotel Phillips in October 2015, the majority of the cash proceeds were held by an intermediary in conjunction with an anticipated Internal Revenue Code §1031 like-kind exchange whereby we planned2018 compared to ~~subsequently purchase other real estate in order to defer the related tax gain on sale of the hotel. During~~ the first three quarters of fiscal ~~2016, we successfully reinvested the proceeds in additional real estate within the prescribed time period and we received the cash held by the intermediary, thereby reducing restricted cash.~~

The increase in net cash used in investing activities was also the result of an increase in capital expenditures, partially offset by an increase in net proceeds from disposals of property, equipment and other assets.2017. Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled $45.1 million during the first three quarters of fiscal 2018 compared to $87.3 million during the first three quarters of fiscal ~~2017 compared to $58.1 million during the first three quarters of fiscal 2016.~~2017. Approximately $23.5 million ~~and $17.1 million, respectively,~~ of our capital expenditures during the first three quarters of fiscal 2017 ~~and fiscal 2016~~ were related to ~~real estate purchases and~~the development of the previously-described new ~~theatre development costs described above.~~theatres, accounting for over one-half of the decrease in capital expenditures during the fiscal 2018 period. We did not incur any acquisition-related capital expenditures during the first three quarters of fiscal ~~2017~~2018 or the first three quarters of fiscal ~~2016.~~2017.

Fiscal 2018 first three quarters cash capital expenditures included approximately $37.0 million incurred in our theatre division, including costs associated with the addition of DreamLounger recliner seating, newUltraScreen andSuperScreen DLX auditoriums and newZaffiro’s Express andTake Five Lounge outlets to existing theatres. We also incurred capital expenditures in our hotels and resorts division during the first three quarters of fiscal 2018 of approximately $8.1 million, consisting primarily of normal maintenance capital projects. Fiscal 2017 first three quarters cash capital expenditures included approximately $69.5 million incurred in our theatre division, including ~~the~~previously-described new theatre development costs ~~described above~~ and costs associated with ~~our~~the addition of DreamLounger recliner seating,~~Ultra~~~~Screen DLX and~~SuperScreen DLX auditorium conversions and newZaffiro’s Express,~~Take Five Lounge~~ andReel Sizzle outlets to existing theatres. We also incurred capital expenditures in our hotels and resorts division during the first three quarters of fiscal 2017 of approximately $17.5 million, including costs associated with the development of our newSafeHouse Chicago location ~~our~~and the development of new villas at the Grand Geneva Resort & Spa described above and various maintenance capital projects at our owned hotels and resorts. Fiscal 2016 first three quarters cash capital expenditures included approximately $49.5 million incurred by our theatre division, including costs associated with our addition of DreamLounger recliner seating, new~~UltraScreen DLX and~~~~Super~~~~Screen DLX auditoriums and new~~~~Zaffiro’s Express~~,~~Take Five Lounge~~ ~~and~~~~Reel Sizzle~~ outlets to existing theatres, as well as new theatre costs noted above. We also incurred capital expenditures in our hotels and resorts division during the first three quarters of fiscal 2016 of approximately $8.4 million, including costs associated with the renovation of the~~SafeHouse~~ ~~Milwaukee and Skirvin Hilton.~~Spa.

Net cash ~~provided by~~used in financing activities during the first three quarters of fiscal ~~2017~~2018 totaled ~~$37.0~~$39.1 million compared to net cash ~~used in~~provided by financing activities of ~~$5.3~~$37.0 million during the first three quarters of fiscal ~~2016.~~2017. We used excess cash during both periods to reduce our borrowings under our revolving credit facility. As short-term borrowings became due, we replaced them as necessary with new short-term borrowings. As a result, we added ~~$254.0~~$159.0 million of new short-term borrowings and we made $177.0 million of repayments on short-term borrowings during the first three quarters of fiscal 2018 (net decrease in borrowings on our credit facility of $18.0 million) compared to $254.0 million of new short-term borrowings and $236.5 million of repayments on short-term borrowings made during the first three quarters of fiscal 2017 (net increase in borrowings on our credit facility of $17.5 million). ~~In conjunction with the execution of a~~

We did not issue any new ~~credit agreement in June 2016, we also paid all outstanding borrowings under our old revolving credit facility and replaced them with borrowings under our new revolving credit facility~~long-term debt during the first three quarters of fiscal 2016. As a result, we added $250.2 million of new short-term borrowings and we made $191.2 million of repayments on short-term borrowings during the first three quarters of fiscal 2016 (net increase in borrowings on our credit facility of $59.0 million).

~~We received~~2018. Conversely, proceeds from the issuance of long-term debt ~~totaling~~totaled $65.0 million during the first three quarters of fiscal 2017 ~~including~~and included the ~~proceeds from our~~ issuance of $50 million of senior ~~notes in February 2017.~~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 the first three quarters of fiscal 2017 and replaced it with borrowings under our revolving credit facility and the issuance of a $15.0 million mortgage note bearing interest at LIBOR plus 2.75%, requiring monthly principal and interest payments and maturing in fiscal 2020. ~~We made principal~~Principal payments on long-term debt ~~totaling~~were $11.7 million during the first three quarters of fiscal 2018 compared to $35.9 million during the first three quarters of fiscal 2017 (including the mortgage note repayment described above) ~~compared to payments of $51.9 million during the first three quarters of fiscal 2016. Fiscal 2016 repayments included our repayment of a $37.2 million term loan from our prior credit agreement.~~. Our debt-to-capitalization ratio (excluding our capital lease obligations) was ~~0.44~~0.36 at September ~~28, 2017 and 0.42~~27, 2018, compared to 0.40 at December ~~29, 2016.~~28, 2017.

We repurchased approximately ~~29,000~~83,000 shares of our common stock for approximately $2.9 million in conjunction with the exercise of stock options during the first three quarters of fiscal 2018, compared to 29,000 shares repurchased for approximately $850,000 in conjunction with the exercise of stock options during the first three quarters of fiscal ~~2017, compared to 331,000 shares repurchased for approximately $6.3 million in the open market or in conjunction with the exercise of stock options during the first three quarters of fiscal 2016.~~2017. As of September ~~28, 2017,~~27, 2018, approximately ~~2.9~~2.8 million shares remained available for repurchase under prior Board of Directors repurchase authorizations. We expect that we will execute any future repurchases on the open market or in privately-negotiated transactions, depending upon a number of factors, including prevailing market conditions.

~~We made dividend~~Dividend payments during the first three quarters of fiscal ~~2017 totaling $10.1~~2018 totaled $12.3 million compared to dividend payments of ~~$9.0~~$10.1 million during the first three quarters of fiscal ~~2016.~~2017. The increase in dividend payments was the result of ~~an 11.1%~~a 20.0% increase in our regular quarterly dividend payment initiated in March ~~2017. During the first three quarters of fiscal 2016, we made distributions to noncontrolling interests of $448,000, compared to none during the first three quarters of fiscal 2017.~~2018.

We believe our total capital expenditures for fiscal ~~2017~~2018 will approximate ~~$105-~~$55-$~~115~~65 million, barring our pursuance of any growth opportunities that could arise in the remaining months and depending upon the timing of our payments on several of the various projects incurred by our two divisions. Some of ~~our~~the payments on projects undertaken during fiscal ~~2017~~2018 may carry over to fiscal ~~2018.~~2019. The actual timing and extent of the implementation of all of our current expansion plans will depend in large part on industry and general economic conditions, our financial performance and available capital, the competitive environment, evolving customer needs and trends, and the availability of attractive opportunities. It is likely that our plans will continue to evolve and change in response to these and other factors.

We have not experienced any material changes in our market risk exposures since December ~~29, 2016.~~28, 2017.

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

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

Risk factors relating to us are contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December ~~29, 2016.~~28, 2017. No material change to such risk factors has occurred during the 39 weeks ended September ~~28, 2017.~~27, 2018.

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

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


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

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

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

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

		Page

PART I – FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:

	Consolidated Balance Sheets ~~(September 28, 2017~~ (September 27, 2018 and December ~~29, 2016)~~28, 2017)	3

	Consolidated Statements of Earnings ~~(13~~ (13 and 39 weeks ended September ~~28, 2017~~27, 2018 and September ~~29, 2016)~~28, 2017)	5

	Consolidated Statements of Comprehensive Income ~~(13~~ (13 and 39 weeks ended September ~~28, 2017~~27, 2018 and September ~~29, 2016)~~28, 2017)	6

	Consolidated Statements of Cash Flows ~~(39~~ (39 weeks ended September ~~28, 2017~~27, 2018 and September ~~29, 2016)~~28, 2017)	7

	Condensed Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1824

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3339

Item 4.	Controls and Procedures	3339

PART II – OTHER INFORMATION

Item 1A.	Risk Factors	3339

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3440

Item 4.	Mine Safety Disclosures	3440

Item 6.	Exhibits	3541

	Signatures	S-1

	As Reported		ASU No. 2014-09 Impact			Adjusted⁽¹⁾
Refundable income taxes	$	3,531	$	945		$	2,586
Total current assets		57,368		945			56,423
Total assets		986,686		945			985,741
Other accrued liabilities		46,269		3,639			42,630
Total current liabilities		120,981		3,639			117,342
Deferred compensation and other		59,157		99			59,058
Retained Earnings		433,022		(2,793	)		435,815
Shareholders’ equity attributable to The Marcus Corporation		482,931		(2,793	)		485,724
Total equity		483,036		(2,793	)		485,829
Total liabilities and shareholders’ equity		986,686		945			985,741

Period	Total Number of Shares Purchased			Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (1)
June 30 – July 27		1,532	$		29.55		1,532		2,888,094
July 28 – August 31		—			—		—		2,888,094
September 1 – September 28		18,672			27.64		18,672		2,869,422
Total		20,204	$		27.78		20,204		2,869,422

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

	Available for Sale Investments			Pension Obligation			Accumulated Other Comprehensive Loss

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

	Interest Rate Swaps			Available for Sale Investments			Pension Obligation			Accumulated Other Comprehensive Loss
	(in thousands)
Balance at December 28, 2017	$	–		$	(11	)	$	(7,414	)	$	(7,425	)
Amount reclassified to retained earnings on December 29, 2017 in connection with the adoption of ASU No. 2016-01		–			11			–			11
Balance at December 29, 2017		–			–			(7,414	)		(7,414	)
Amortization of the net actuarial loss and prior service credit		–			–			340			340
Other comprehensive income before reclassifications		191			–			–			191
Amounts reclassified from accumulated other comprehensive loss		134	⁽¹⁾		–			–			134
Other comprehensive income		325			–			340			665
Balance at September 27, 2018	$	325		$	–		$	(7,074	)	$	(6,749	)

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

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

	13 Weeks Ended September 27, 2018
	Reportable Segment
	Theatres		Hotels/ Resorts		Corporate		Total
Theatre admissions	$	52,422	$	–	$	–	$	52,422
Rooms		–		34,467		–		34,467
Theatre concessions		35,476		–		–		35,476
Food and beverage		–		19,333		–		19,333
Other revenues⁽¹⁾		6,893		12,822		98		19,813
Cost reimbursements		218		8,870		–		9,088
Total revenues	$	95,009	$	75,492	$	98	$	170,599

	39 Weeks Ended September 27, 2018
	Reportable Segment
	Theatres		Hotels/ Resorts		Corporate		Total
Theatre admissions	$	185,035	$	–	$	–	$	185,035
Rooms		–		84,256		–		84,256
Theatre concessions		123,687		–		–		123,687
Food and beverage		–		53,972		–		53,972
Other revenues⁽¹⁾		23,591		35,453		318		59,362
Cost reimbursements		1,084		24,692		–		25,776
Total revenues	$	333,397	$	198,373	$	318	$	532,088

	Balance at December 28, 2017		Cumulative Adjustment			Balance at December 29, 2017
	*(in thousands)*
Refundable income taxes	$	15,335	$	945		$	16,280
Other accrued liabilities		53,291		3,296			56,587
Deferred compensation and other		56,662		217			56,879
Retained earnings		403,206		(2,568	)		400,638

	For the 13 Weeks Ended September 27, 2018							For the 39 Weeks Ended September 27, 2018
	As Reported		ASU No. 2014-09 Impact			Adjusted⁽¹⁾		As Reported		ASU No. 2014-09 Impact			Adjusted⁽¹⁾
Revenues:
Theatre admissions	$	52,422	$	(605	)	$	53,027	$	185,035	$	(1,961	)	$	186,996
Theatre concessions		35,476		503			34,973		123,687		1,467			122,220
Food and beverage		19,333		3			19,330		53,972		23			53,949
Other revenues		19,813		904			18,909		59,362		3,609			55,753
Total revenues		170,599		805			169,794		532,088		3,138			528,950

Costs and expenses:
Theatre operations		48,644		165			48,479		164,452		479			163,973
Theatre concessions		10,168		159			10,009		35,105		469			34,636
Advertising and marketing		6,178		(496	)		6,674		17,317		(1,549	)		18,866
Other operating expenses		8,969		910			8,059		27,032		3,514			23,518
Total costs and expenses		148,186		738			147,448		463,552		2,913			460,639

Operating income		22,413		67			22,346		68,536		225			68,311
Income taxes		2,626		9			2,617		12,254		48			12,206
Net earnings attributable to The Marcus Corporation		16,231		58			16,173		44,671		177			44,494

13 Weeks Ended September 28, 2017	Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	89,773	$	63,895	$	150		$	153,818
Operating income (loss)		15,830		9,622		(4,017	)		21,435
Depreciation and amortization		8,399		4,512		82			12,993

39 Weeks Ended September 28, 2017	Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	294,977	$	169,138	$	432		$	464,547
Operating income (loss)		58,481		12,693		(12,973	)		58,201
Depreciation and amortization		24,000		13,270		274			37,544

39 Weeks Ended September 29, 2016	Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	238,837	$	165,880	$	400		$	405,117
Operating income (loss)		51,530		15,073		(12,313	)		54,290
Depreciation and amortization		18,175		12,582		268			31,025

39 Weeks Ended September 27, 2018	Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues⁽¹⁾	$	333,397	$	198,373	$	318		$	532,088
Operating income (loss)		66,317		15,737		(13,518	)		68,536
Depreciation and amortization		28,751		13,890		258			42,899

2.1	Asset Purchase Agreement, dated as of November 1, 2018, by and among MMT Texnv, LLC, MMT Lapagava, LLC, The Marcus Corporation, Movie Tavern, Inc., Movie Tavern Theaters, LLC, TGS Beverage Company, LLC, and VSS-Southern Theatres LLC. [Schedules and exhibits have been omitted and The Marcus Corporation agrees to furnish supplementally to the Securities and Exchange Commission a Copy of any omitted schedules and exhibits upon request.

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

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

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

101	The following materials from The Marcus Corporation’s Quarterly Report on Form 10-Q for the quarter ended September ~~28, 2017~~27, 2018 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) the Condensed Notes to Consolidated Financial Statements.

DATE: November ~~7, 2017~~6, 2018	By:	/s/ Gregory S. Marcus
		Gregory S. Marcus
		President and Chief Executive Officer

DATE: November ~~7, 2017~~6, 2018	By:	/s/ Douglas A. Neis
		Douglas A. Neis
		Executive Vice President, Chief Financial
		Officer and Treasurer