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

RESULTS OF OPERATIONS

General

We report our consolidated and individual segment results of operations on a 52-or-53-week fiscal year ending on the last Thursday in May. Fiscal 2009 is a 52-week year, as was fiscal 2008. We divide our fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. Our primary operations are reported in the following two business segments: movie theatres and hotels and resorts.

The following table sets forth revenues, operating income, other income (expense), net earnings and earnings per common share for the comparable third quarter and first three quarters of fiscal 2009 and 2008 (in millions, except for per share and variance percentage data):

                                           Third Quarter                                   First Three Quarters
                                                          Variance                                             Variance
                            F2009        F2008         Amt.        Pct.        F2009         F2008         Amt.         Pct.
Revenues                    $ 91.0       $ 86.0       $  5.0        5.8 %     $ 299.3       $ 281.6       $  17.7         6.3 %
Operating income               6.2          6.3         (0.1 )     -1.3 %        38.5          38.4           0.1         0.1 %
Other income (expense)        (3.5 )       (3.3 )       (0.2 )     -5.0 %       (13.8 )       (10.8 )        (3.0 )     -28.3 %
Net earnings                $  1.7       $  1.8       $ (0.1 )     -6.8 %     $  15.0       $  16.5       $  (1.5 )      -8.9 %
Net earnings per common
share - diluted:            $ 0.06       $ 0.06       $    -          - %     $  0.50       $  0.54       $ (0.04 )      -7.4 %

Revenues increased in our theatre division during the third quarter and first three quarters of fiscal 2009 compared to the same periods last year, offsetting decreases in revenues from our hotels and resorts division. Our total operating income (earnings before other income/expense and income taxes) decreased slightly during the third quarter but increased slightly through the first three quarters of fiscal 2009 compared to the same periods last year, with significantly improved operating results from our theatre division offset by reduced operating results from our hotels and resorts division. The theatre division operating results during both periods in fiscal 2009 were favorably impacted by new screens acquired during the fourth quarter of fiscal 2008 and an overall stronger slate of film product. Our hotels and resorts division reported decreased fiscal 2009 third quarter and first three quarters revenues and operating income compared to the same periods last year due primarily to the impact of reduced occupancy rates resulting from reduced business and consumer spending on travel and leisure due to the current economic environment. Fiscal 2009 third quarter net earnings and net earnings per share were essentially even with last year, but significant unusual investment losses and losses on property, equipment and other assets during our previously reported fiscal 2009 second quarter (described below) resulted in an overall decrease in our fiscal 2009 first three quarters net earnings compared to the same period last year.

We recognized investment income (losses) of approximately $195,000 and $(1.5) million during the third quarter and first three quarters of fiscal 2009, respectively, compared to $276,000 and $982,000 of investment income during the same periods last year. The slight decline in investment income during our fiscal 2009 third quarter compared to the same period last year was the result of reduced interest rates on short-term investments and reduced interest income from our declining balance of timeshare notes receivable. The significant year-to-date decrease in investment income during fiscal 2009 was primarily the result of two unusual investment losses reported during our second quarter. Last quarter, we recognized a $1.4 million pre-tax investment loss on securities held whose decline in fair value we deemed to be other than temporary. Prior to the fiscal 2009 second quarter, losses on these "available for sale" investments had previously been included in "other comprehensive loss" in shareholders' equity. In addition, we reported an $800,000 pre-tax investment loss during our fiscal 2009 second quarter related to a former Baymont Inns & Suites joint venture that currently owns real estate that has declined in value because of current commercial real estate market conditions. We have a very limited amount of these types of investments and our exposure to additional losses related to securities and joint ventures is not significant. During the fourth quarter of fiscal 2009, our investment income will likely remain slightly lower than last year's comparative quarter.

Our interest expense totaled $3.5 million and $10.9 million for the third quarter and first three quarters of fiscal 2009, respectively, compared to $3.6 million and $11.5 million during the same periods last year. The decrease in interest expense during our fiscal 2009 periods was the result of a lower average interest rate, as our total borrowings in fiscal 2009 were actually slightly higher than last year. We currently do not expect our fiscal 2009 fourth quarter interest expense to vary significantly compared to the same period last year.

We reported gains (losses) on disposition of property, equipment and other assets of $100,000 and $(1.1) million during the fiscal 2009 third quarter and first three quarters, respectively, compared to gains of $155,000 and $48,000 during the same periods last year. During our previously reported fiscal 2009 second quarter, we incurred a loss of approximately $1.1 million related to an adjustment of prior pro-rated gains recorded on the sale of condominium units at our Platinum Hotel & Spa in Las Vegas, Nevada. With approximately 94% of the units sold, prior gains were recorded on a "percentage of completion" method based upon estimated total proceeds once all 255 units were sold. As a result of the current economic environment and its impact on Las Vegas real estate values, last quarter we lowered our estimated total proceeds which we expect to receive when the remaining 16 units are sold. Our pro-rated gain on sale of the previous units was reduced accordingly. We did not recognize any other significant gains or losses on the disposition of property, equipment and other assets during the third quarters and first three quarters of fiscal 2009 or 2008. The timing of periodic sales of our property and equipment may vary from quarter to quarter, resulting in variations in our reported gains or losses on disposition of property and equipment.

We reported net equity losses from unconsolidated joint ventures of $324,000 and $423,000 during the third quarter and first three quarters of fiscal 2009, respectively, compared to losses of $184,000 and $322,000 during the same periods of fiscal 2008. Net losses during both years included our share of results from our one remaining operating Baymont 50% joint venture and two hotel joint ventures in which we have a 15% ownership interest. The slightly increased net losses were due to the challenging current environment for hotel operations and, as a result, we expect net equity losses from unconsolidated joint ventures to likely continue to increase slightly during the fourth quarter of fiscal 2009 compared to the same period last year.

We reported income tax expense for the third quarter and first three quarters of fiscal 2009 of $1.0 million and $9.6 million, respectively, compared to $1.2 million and $11.2 million during the same periods of fiscal 2008. Our fiscal 2009 third quarter and first three quarters effective income tax rates were 38.3% and 39.1%, respectively, compared to our fiscal 2008 third quarter and first three quarters effective rate of 39.2% and 40.4%. The decrease in our year-to-date effective tax rate was primarily due to a decrease in our liability for unrecognized tax benefits as a result of a lapse of the applicable statute of limitations during the fiscal 2009 first quarter. Our actual fiscal 2009 effective income tax rate may be different from our estimated quarterly rates depending upon actual facts and circumstances.

Theatres

The following table sets forth revenues, operating income and operating margin
for our theatre division for the third quarter and first three quarters of
fiscal 2009 and 2008 (in millions, except for variance percentage and operating
margin):

                                   Third Quarter                        First Three Quarters
                                                Variance                                  Variance
                        F2009      F2008       Amt.    Pct.      F2009       F2008       Amt.    Pct.
     Revenues           $ 57.9     $ 46.1     $ 11.8   25.5 %   $ 166.5     $ 137.3     $ 29.2   21.3 %
     Operating income     12.7        8.9        3.8   43.4 %      35.4        28.5        6.9   24.2 %
     Operating margin     21.9 %     19.2 %                        21.3 %      20.8 %
     (% of revenues)

Consistent with the seasonal nature of the motion picture exhibition industry, our fiscal third quarter is typically one of the strongest periods for our theatre division due to the traditionally strong holiday season. Our theatre division recognized increased operating results for our fiscal 2009 third quarter and first three quarters compared to last year's same periods, primarily due to the incremental results from the seven theatres comprised of 83 screens in Omaha and Lincoln, Nebraska acquired from Douglas Theatre Company ("Douglas") and related parties during our fiscal 2008 fourth quarter and a strong slate of films during the fiscal 2009 third quarter. Our operating margin increased during both the third quarter and first three quarters of fiscal 2009 due primarily to the impact of increased revenues at our comparable theatres.

The following table breaks down the components of revenues for the theatre division for the third quarter and first three quarters of fiscal 2009 and 2008 (in millions, except for variance percentage):

                                     Third Quarter                     First Three Quarters
                                                Variance                               Variance
                           F2009    F2008     Amt.      Pct.      F2009     F2008     Amt.    Pct.
     Box office receipts   $ 37.6   $ 29.4   $  8.2     27.7 %   $ 106.4   $  87.4   $ 19.0   21.8 %
     Concession revenues     18.3     14.4      3.9     26.6 %      52.6      42.9      9.7   22.5 %
     Other revenues           2.0      2.3     (0.3 )   -9.4 %       7.5       7.0      0.5    7.1 %

     Total revenues        $ 57.9   $ 46.1   $ 11.8     25.5 %   $ 166.5   $ 137.3   $ 29.2   21.3 %

The increase in our box office receipts and concession revenues for the third quarter and first three quarters of fiscal 2009 compared to the same periods last year was primarily due to the impact of the Douglas theatres acquired during our fiscal 2008 fourth quarter and strong third quarter film product. Excluding the Douglas theatres, fiscal 2009 third quarter box office receipts and concession revenues increased 10.1% and 8.0%, respectively, compared to the same quarter last year. For the first three quarters of fiscal 2009, excluding the Douglas theatres, box office receipts increased 4.7% and concession revenues increased 4.3% compared to the first three quarters of fiscal 2008. A 4.7% and 4.6% increase in our average ticket price for these comparable theatres during the fiscal 2009 third quarter and first three quarters, respectively, compared to the same periods last year, contributed to our increased overall box office receipts. The increases in our average ticket price were attributable primarily to selected price increases and premium pricing for our digital 3D and UltraScreen® attractions. Our average concession revenues per person for the fiscal 2009 third quarter and first three quarters increased 2.7% and 4.1%, respectively, compared to the same periods last year, due primarily to selected price increases and an increase in the variety of food and beverage items offered at select theatres. The slightly lower increase in average concession revenues per person during our fiscal 2009 third quarter compared to our year-to-date trend was due to the fact that the top performing films during the quarter were more adult-orientated and these types of films typically do not produce as much concession revenue per person compared to films that appeal to younger audiences. Other revenues decreased slightly during our fiscal 2009 third quarter but remain higher than last year-to-date due in part to increases in pre-show and lobby advertising income and film booking fees.

Total theatre attendance increased 22.9% and 17.2%, respectively, during the third quarter and first three quarters of fiscal 2009 compared to the same periods last year. Excluding the Douglas theatres, theatre attendance increased 5.2% during the third quarter and 0.2% for the first three quarters of fiscal 2009 compared to last year's same periods. Movie theatres have historically performed well during difficult economic conditions, as evidenced by the fact that national theatre attendance increased during five of the last seven recessions. An unusually large quantity of good performing films compared to the prior year, particularly during January and February, contributed to our theatre division's strong performance during the fiscal 2009 third quarter. The three highest grossing films during last year's same quarter (National Treasure: Book of Secrets, Alvin and the Chipmunks, I am Legend) all contributed greater revenues to our theatre division than the top film this quarter, but this year we had 12 films contribute at least $1 million of box office receipts during the fiscal 2009 third quarter compared to only six such films during the same quarter last year. Our highest grossing films during the fiscal 2009 third quarter included Marley and Me, Gran Torino, Paul Blart: Mall Cop, Four Christmases and Bedtime Stories. In addition, critically-acclaimed films such as The Curious Case of Benjamin Button and Slumdog Millionaire, had longer-than-average runs (weeks shown in our theatres) and contributed to this quarter's success.

We completed the acquisition of the seven Douglas theatres on April 3, 2008. Accordingly, after April 3, 2009, all quarterly and year-to-date financial results compared will reflect a more comparable number of screens.

Our fiscal 2009 fourth quarter appears to also have a solid line-up of films. The traditionally stronger Easter holiday week is three weeks later than last year, so Hollywood has adjusted its film release schedule to reflect this circumstance, delaying the release of several films that will likely appeal to a younger audience. To date, several new films have performed quite well, including Watchmen, Monsters vs. Aliens (which was released in both 2D and 3D), and Fast & Furious 4. Films scheduled to be released during the remainder of our fiscal 2009 fourth quarter that are also expected to generate significant box office interest include The Hannah Montana Movie, X-Men Origins: Wolverine, Star Trek, Angels and Demons, Terminator Salvation and Night at the Museum: Battle of the Smithsonian. The extended outlook for film product looks promising as well, with summer pictures such as Pixar's latest film Up (3D), Land of the Lost, Transformers 2: Revenge of the Fallen, Ice Age: Dawn of the Dinosaurs (3D), Public Enemies and Harry Potter and the Half-Blood Prince all scheduled for release prior to the date for release of our fiscal 2009 fourth quarter and year-end results. Revenues for the theatre business and the motion picture industry in general are heavily dependent on the general audience appeal of available films, together with studio marketing, advertising and support campaigns and the maintenance of the current "windows" between the date a film is released in theatres and the date a motion picture is released to other channels, including video on-demand and DVD. These are factors over which we have no control.

During the third quarter and first three quarters of fiscal 2009, we continued to execute on several previously described strategies. Our 14 digital 3D screens, installed during our fiscal 2009 first quarter, benefitted during the third quarter from the latest 3D releases, My Bloody Valentine 3D and Coraline, both of which performed well. As a result of the strong performance of these 3D films and due to the fact that more than a dozen 3D films are currently scheduled for release during both calendar 2009 and 2010, we recently made an additional commitment to this technology by installing another 13 digital 3D systems in our theatres prior to the recent release of Monsters vs. Aliens. We now have digital 3D capability in over 50% of our first-run theatres and over 90% of the communities we serve are now within 30 minutes of a Marcus digital 3D installation. A broader roll-out of digital cinema in our theatres, originally thought likely to begin in calendar 2009, remains tied to the ability of third-party implementers to obtain the necessary financing, which may be difficult in the current credit markets.

We also continue to expand our food and beverage offerings in our theatres. Our theatre in Oakdale, Minnesota benefitted during our fiscal 2009 third quarter by the late second quarter opening of a new food court concept named the "Hollywood Café," serving items such as pizza, ice cream, coffee and hamburgers. We also are nearing completion of a major renovation of our theatre in Mequon, Wisconsin that will feature an expanded concession area serving many of these same food and beverage items, a full-service Zaffiro's pizza restaurant and a cocktail lounge. Our Mequon theatre renovation also includes our circuit's 13th UltraScreen, as well as remodeled auditoriums that will provide a certain amount of reserved seating capability.

We ended the first three quarters of fiscal 2009 with a total of 669 company-owned screens in 54 theatres and 6 managed screens in one theatre compared to 589 company-owned screens in 48 theatres and 6 managed screens in one theatre at the end of the same period last year. We closed one theatre with four screens in Madison, Wisconsin during our fiscal 2009 third quarter. We hope to open the aforementioned UltraScreen addition at our Mequon, Wisconsin theatre in May 2009, but our total screen count at that location will not change, as we are eliminating one existing screen in order to create room for the previously described pizza restaurant.

Hotels and Resorts

The following table sets forth revenues, operating income (loss) and operating
margin for our hotels and resorts division for the third quarter and first three
quarters of fiscal 2009 and 2008 (in millions, except for variance percentage
and operating margin):



                                        Third Quarter                             First Three Quarters
                                                      Variance                                      Variance
                           F2009      F2008       Amt.       Pct.        F2009       F2008       Amt.       Pct.
Revenues                  $  32.8     $ 39.6     $ (6.8 )     -17.0 %   $ 131.9     $ 143.3     $ (11.4 )    -7.9 %
Operating income (loss)      (3.8 )     (0.3 )     (3.5 )   -1004.3 %      10.8        16.7        (5.9 )   -35.5 %
Operating margin            -11.7 %     -0.9 %                              8.2 %      11.7 %
  (% of revenues)

Our fiscal third quarter is typically the weakest period for our hotels and resorts division due to the traditionally reduced level of travel at our predominantly Midwestern portfolio of owned properties. Division revenues and operating income decreased during our fiscal 2009 third quarter and first three quarters compared to the prior year same periods. The current recessionary environment has negatively impacted all customer segments - group business, corporate transient and leisure. Food and beverage revenues at our hotels have declined at a slightly higher pace than room revenues as customers also have reduced the amount they spend during their stay. Comparisons to last year's revenues and operating income were negatively impacted by the fact that during last year's third quarter, we received a $900,000 development fee related to a hotel project for another owner to whom we provided assistance.

The following table sets forth certain operating statistics for the third quarter and first three quarters of fiscal 2009 and 2008, 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)
                                                          Variance                                                    Variance
                      F2009          F2008          Amt.             Pct.         F2009          F2008          Amt.             Pct.
Occupancy pct.           47.7 %         54.0 %        (6.3 ) pts     -11.7 %         63.9 %         68.1 %        (4.2 ) pts     -6.2 %
ADR                  $ 124.65       $ 127.25       $ (2.60 )          -2.0 %     $ 148.49       $ 148.21       $  0.28            0.2 %
RevPAR               $  59.47       $  68.72       $ (9.25 )         -13.5 %     $  94.89       $ 100.88       $ (5.99 )         -5.9 %

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

RevPAR decreased at seven of our eight company-owned properties during the third quarter of fiscal 2009 compared to the same period last year. Year-to-date, only two of our company-owned properties recognized increased RevPAR compared to the first three quarters of fiscal 2008, although three additional hotels have had year-to-date RevPAR declines of less than 2%. In general, properties with a greater reliance on group business have seen the largest declines year-to-date. According to information available to us from Smith Travel Research, our RevPAR declines during our fiscal 2009 third quarter and first three quarters have not been quite as great as those reported nationally for the upper upscale segment of the industry in which the majority of our properties operate.

Hotel and resort division operating income and operating margins declined during the third quarter and first three quarters of fiscal 2009 compared to the same periods last year due to the aforementioned reduced revenues. Improved operating results from our newest hotel in Oklahoma City and a favorable comparison to last year at our Chicago Four Points hotel due to a real estate tax adjustment during the fiscal 2008 second quarter have only partially offset the significant declines in operating income at our hotels most impacted by the economic downturn. We have implemented numerous strategies to reduce costs during this difficult period in the hotel industry. Excluding the previously mentioned non-comparable development fee reported in last year's third quarter, our cost containment measures resulted in less than 40% of our overall third quarter revenue decline flowing through to our operating income - a flow-through percentage that generally compares favorably with others in our industry.

The current near-term outlook for the future performance of this division continues to be very uncertain, as we continue to face significant economic headwinds. As we have noted previously, hotel revenues have historically tracked very closely with traditional macroeconomic statistics such as the Gross Domestic Product (GDP), and the current outlook for calendar 2009 does not look encouraging. The industry in general has also faced unusual difficulties produced by the pressure of government officials speaking out against conferences and incentive trips that help to drive lodging industry revenues and provide a multitude of jobs in the sector.

. . .