MARCUS CORP Management’s discussion and analysis of financial condition and results of operations. (Form 10-K)

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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 December. 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 two business segments:
theatres, and hotels and resorts.

Fiscal 2019 was a 52-week year, beginning on December 28, 2018 and ending on
December 26, 2019. Fiscal 2020 was a 53-week year, beginning on December 27,
2019 and ending on December 31, 2020. Fiscal 2021 was a 52-week year, beginning
on January 1, 2021 and ending on December 30, 2021.

Fiscal 2020 and fiscal 2021 results by quarter were significantly impacted by
the COVID-19 pandemic, which began late in our fiscal 2020 first quarter and
impacted our results for the remainder of fiscal 2020 and throughout fiscal
2021. Under normal conditions, our first fiscal quarter typically produces the
weakest operating results in our hotels and resorts division due primarily to
the effects of reduced travel during the winter months. The quality of film
product in any given quarter typically impacts the operating results in our
theatre division. Our second and third fiscal quarters generally produce our
strongest operating results because these periods coincide with the typical
summer seasonality of the movie theatre industry and the summer strength of the
lodging business. Due to the fact that the week between Christmas and New Year's
Eve is historically one of the strongest weeks of the year for our theatre
division, the specific timing of the last Thursday in December impacts the
results of our fiscal first and fourth quarters in that division, particularly
when we have a 53-week year.

This Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") generally discusses fiscal 2021 and fiscal 2020 items and
year-to-year comparisons between fiscal 2021 and fiscal 2020. Discussions of
fiscal 2019 items and year-to-year comparisons between fiscal 2020 and fiscal
2019 that are not included in this MD&A can be found in "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in Part II, Item
7 of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2020. Within this MD&A amounts for totals, subtotals, and variances
may not recalculate exactly within tables due to rounding as they are calculated
using the unrounded numbers.

Impact of the COVID-19 pandemic

The COVID-19 pandemic has had an unprecedented impact on the world and both of
our business segments. The situation continues to be volatile and the social and
economic effects are widespread. As an operator of movie theatres, hotels and
resorts, restaurants and bars, each of which consists of spaces where customers
and guests gather in close proximity, our businesses are significantly impacted
by protective actions that federal, state and local governments have taken to
control the spread of the pandemic, and our customers' reactions or responses to
such actions. These actions have included, among other things, declaring
national and state emergencies, encouraging social distancing, restricting
freedom of movement and congregation, mandating non-essential business closures,
issuing curfews, limiting business capacity, mandating mask-wearing and/or proof
of vaccination, and issuing shelter-in-place, quarantine and stay-at-home
orders.

We began fiscal 2021 with approximately 52% of our theatres open. As state and
local governments eased restrictions in several of our markets and movie studios
released several new films, we gradually reopened theatres during the first half
of fiscal 2021. We ended fiscal 2021 with all of our theatres open (excluding
three theatres which were permanently closed during fiscal 2021). The majority
of our reopened theatres operated with reduced operating days (Fridays,
Saturdays, Sundays and Tuesdays) and reduced operating hours during the fiscal
2021 first quarter. By the end of May 2021, we had returned the vast majority of
our theatres to normal operating days (seven days per week) and operating hours.
During fiscal 2021, all of our reopened theatres operated at significantly
reduced attendance levels compared to prior pre-COVID-19 pandemic years due to
customer concerns related to the COVID-19 pandemic and a reduction in the number
of new films released. While still below pre-COVID-19 levels, attendance has
gradually improved beginning in June 2021 as the number of vaccinated
individuals increased, more films were released, and customer willingness to
return to movie theatres increased.

We started fiscal 2021 with all eight company-owned hotels and all but one of our managed hotels open. The majority of our restaurants and bars at our hotels and resorts were open in fiscal year 2021, operating under applicable terms

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national and local restrictions and guidelines and, in some cases, reduced hours of operation. The majority of our hotels and restaurants are generating reduced revenue compared to years prior to the COVID-19 pandemic, although hotel occupancy increased throughout fiscal 2021. We reopened one of our two SafeHouse® restaurants and bars in June 2021.

Maintaining and protecting a strong balance sheet has always been a core
philosophy of The Marcus Corporation during our 86-year history, and, despite
the COVID-19 pandemic, our financial position remains strong. As of December 30,
2021, we had a cash balance of $17.7 million, $221.4 million of availability
under our $225.0 million revolving credit facility, and our
debt-to-capitalization ratio (including short-term borrowings) was 0.37. With
our strong liquidity position, combined with the expected receipt of additional
state grants, income tax refunds and proceeds from the sale of surplus real
estate (discussed below), we believe we are positioned to meet our obligations
as they come due and continue to sustain our operations throughout fiscal 2022
and beyond, even if our properties continue to generate reduced revenues during
these periods. We will continue to work to preserve cash and maintain strong
liquidity to endure the impacts of the global pandemic, even if it continues for
a prolonged period of time.

Early in the third quarter of fiscal 2021, in conjunction with an amendment to
our revolving credit agreement (described in detail in the Liquidity section
below), we paid down a portion of our term loan facility using borrowings from
our revolving credit facility, reducing the balance of our short-term borrowings
from approximately $83.5 million to $50.0 million. In conjunction with the
amendment, we extended the maturity date of the term loan facility to September
22, 2022.

Early in our first quarter of fiscal 2021, we received the remaining $5.9
million of requested tax refunds from our fiscal 2019 tax return. During the
first quarter of fiscal 2021, we filed income tax refund claims of $24.2 million
related to our fiscal 2020 tax return, with the primary benefit derived from net
operating loss carrybacks to prior years. We received approximately $1.8 million
of this refund in July 2021. Due to significant delays in processing refunds by
the Internal Revenue Service, the remaining $22.3 million refund, plus interest,
was not received until February 2022. We also generated additional income tax
loss carryforwards during fiscal 2021 that will benefit future years.

During the fourth quarter of fiscal 2020 and continuing into fiscal 2021, a
number of states elected to provide grants to certain businesses most impacted
by the COVID-19 pandemic, utilizing funds received by the applicable state under
provisions of the Coronavirus Aid, Relief, and Economic Security Act of 2020
(the "CARES Act") or subsequent federal relief programs. We received $4.9
million of these prior year grants in January 2021. We were awarded and received
an additional $1.3 million in theatre grants during the first quarter of fiscal
2021 and an additional $1.9 million in hotel grants during the third quarter of
fiscal 2021. We were also awarded an additional $4.5 million in theatre grants
during the fourth quarter of fiscal 2021, the majority of which was not received
until January 2022. All of these grants further contributed to our current
strong liquidity position.

We also continue to pursue sales of surplus real estate and other non-core real
estate to further enhance our liquidity. During the first quarter of fiscal
2021, we sold an equity interest in a joint venture, generating net proceeds of
approximately $4.2 million. During the third quarter of fiscal 2021, we sold
several land parcels, generating additional net proceeds of approximately $4.8
million. During the fourth quarter of fiscal 2021, we sold a retail center in
St. Louis, Missouri and a former budget theatre, generating additional net
proceeds of approximately $12.6 million. As of December 30, 2021, we had letters
of intent or contracts to sell several pieces of real estate with a total
carrying value of $4.9 million. We believe we may receive total sales proceeds
from real estate sales during the next 12 months totaling approximately $10 -
$20 million, depending upon demand for the real estate in question.

We remain optimistic that the theatre industry is in the process of rebounding
and will continue to benefit from pent-up social demand now that a greater
percentage of the population is vaccinated, the majority of state and local
restrictions have been lifted, and people seek togetherness with a return to
normalcy. We believe the approval of vaccines for children ages 5-11 has
contributed to parents feeling more comfortable to visit a movie theatre, which
should bolster the market for films aimed at children and families, a genre in
which we have historically performed very well. We were very encouraged by the
performance of multiple films released during the second half of fiscal 2021.
Following up on the success of Shang-Chi and the Legend of the Ten Rings, which
was released exclusively in theatres, Disney announced that all of its remaining
films for 2021 would receive an exclusive theatrical window. Sony's Spider-Man:
No Way Home, which was released in mid-December, became the best performing film
since the onset of the pandemic and has generated the 3rd highest U.S. admission
revenues of all time. Total theatre division revenues, expressed as a percentage
of fiscal 2019 revenues, increased every quarter of fiscal 2021, increasing from
20% in the first quarter to 32% in the second quarter, 59% in the third quarter
and 82% in the fourth quarter.
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We still expect a return to "normalcy" to span multiple months driven by a
continued increase in vaccinations and a gradual ramp-up of consumer comfort
with public gatherings. The increase of first the Delta variant and subsequently
the Omicron variant of the disease has resulted in changing government guidance
on indoor activities in some communities, which impacted consumer comfort early
in fiscal 2022. With the number of COVID-19 cases now beginning to decline,
industry customer surveys indicate that consumer comfort is once again
increasing. As described further below in the Theatres section, a significant
number of films originally scheduled to be released during fiscal 2020 and 2021
were delayed until fiscal 2022, further increasing the quality and quantity of
films that we expect to be available during future time periods.

As we expected, the primary customer for hotels during fiscal 2021 continued to
come from the "drive-to leisure" market. Demand from this customer segment has
exceeded our expectations. Most organizations implemented travel bans at the
onset of the pandemic, only allowing essential travel. It is likely that
business travel will continue to be limited in the near term, although we are
beginning to experience some increases in travel from this customer segment.
Total hotel division revenues, expressed as a percentage of fiscal 2019
revenues, have also increased throughout fiscal 2021, including an increase from
51% in the first quarter to 57% in second quarter, 88% in the third quarter and
82% in the fourth quarter, with the largest improvement in the third quarter
coinciding with busy summer leisure travel and several demand-generating events
in certain key markets. As of the date of this report, our group room revenue
bookings for fiscal 2022 - commonly referred to in the hotels and resorts
industry as "group pace" - is running behind where we would typically be at this
same time in prior years (pre-pandemic), but group pace has improved from
earlier in the fiscal year and we have experienced increased booking activity in
recent months for fiscal 2022 and beyond. Banquet and catering revenue pace for
fiscal 2022 is also running behind where we would typically be at this same time
in prior pre-pandemic years. Increased wedding bookings have contributed to
banquet and catering revenue in fiscal 2021. The future economic environment
will also have a significant impact on the pace of our return to "normal" hotel
operations.

Both of our operating divisions are experiencing challenges related to a labor
shortage that has arisen as the country emerges from the pandemic. Difficulties
in hiring new associates after significantly reducing staffing during the height
of the COVID-19 pandemic has impacted our ability to service our increasing
customer counts in both theatres and hotels and may also increase labor costs in
future periods.

We cannot assure that the impact of the COVID-19 pandemic will cease to have a
material adverse effect on both our theatre and hotels and resorts businesses,
results of operations, cash flows, financial condition, access to credit markets
and ability to service our existing and future indebtedness.

Current packages

Due to the impact of the COVID-19 pandemic, our aggregate cash capital
expenditures, acquisitions and purchases of interests in, and contributions to,
joint ventures were $19.5 million during fiscal 2021, compared to $21.4 million
during fiscal 2020 and $94.2 million during fiscal 2019 (including approximately
$30 million in cash consideration paid in conjunction with the Movie Tavern
acquisition described below). Although we anticipate that we will continue to
carefully monitor our capital expenditures during fiscal 2022, we currently
estimate that cash capital expenditures will increase during fiscal 2022 to the
$35 - $45 million range. We will, however, continue to monitor our operating
results and economic and industry conditions so that we may adjust our plans
accordingly.

Our current strategic plans include the following goals and strategies:

Theaters

•Maximize and leverage our current assets in a post-pandemic world. We have
invested approximately $379 million to further enhance the movie-going
experience and amenities in new and existing theatres over the last eight-plus
years. These investments have included:

•DreamLoungerSM recliner seating additions. As of December 30, 2021, we offered
all DreamLounger recliner seating in 66 theatres, representing approximately 78%
of our theatres. Including our premium, large format (PLF) auditoriums with
recliner seating, as of December 30, 2021, we offered our
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The DreamLounger Recliner occupies approximately 81% of our screens, a percentage we believe to be the highest among the nation’s largest theater chains.

•UltraScreen DLX® and SuperScreen DLX® (DreamLounger eXperience) conversions. As
of December 30, 2021, we had a total of 120 premium large format ("PLF") screens
at 66 of our theatre locations (31 UltraScreen DLX auditoriums, one traditional
UltraScreen auditorium, 85 SuperScreen DLX auditoriums - a slightly smaller
screen than an UltraScreen but with the same DreamLounger seating and Dolby
Atmos sound - and three IMAX® PLF screens). As of December 30, 2021, we offered
at least one PLF screen in approximately 78% of our theatres - once again a
percentage we believe to be the highest percentage among the largest theatre
chains in the nation. Our PLF screens generally have higher per-screen revenues
and draw customers from a larger geographic region compared to our standard
screens, and we charge a premium price to our guests for this experience.

•Signature cocktail and dining concepts. We have continued to further enhance
our food and beverage offerings within our existing theatres. We believe our
50-plus years of food and beverage experience in the hotel and restaurant
businesses provides us with a unique advantage and expertise that we can
leverage to further grow revenues in our theatres. As of December 30, 2021, we
offered bars/full liquor service under the concepts Take FiveSM Lounge, Take
Five Express and The Tavern at 49 theatres, representing approximately 58% of
our theatres. As of December 30, 2021, we also offered one or more in-lobby
dining concepts, including the pizza concept Zaffiro's® Express and hamburger
and other Americana fare concept Reel Sizzle®, in 39 theatres, representing
approximately 60% of our theatres (excluding our in-theatre dining theatres). In
select locations without a Take Five Lounge outlet, we offer beer and wine at
the Zaffiro's Express outlet. We also operate three Zaffiro's® Pizzeria and Bar
full-service restaurants.

•In-theatre dining concepts. As of December 30, 2021, we offered in-theatre
dining with a complete menu of drinks and chef-prepared salads, sandwiches,
entrées and desserts at 29 theatres and a total of 229 auditoriums, operating
under the names Big Screen BistroSM, Big Screen Bistro ExpressSM, BistroPlexSM
and Movie Tavern by Marcus, representing approximately 34% of our theatres.

In fiscal 2022 and beyond, we plan to implement a number of strategies to maximize and further leverage our existing assets in a post-pandemic world. These strategies should include:

•Opportunistically expanding the number of our PLF formats described above to
meet consumer demand. Our guests have shown a strong preference for viewing
blockbuster films on the largest screen available. Our goal is to have multiple
PLF auditoriums in as many theatres as physically and financially viable in
order to provide PLF formats to our guests for more than one blockbuster film at
a time.

•Expanding and evolving our food and beverage operations described above. We
will continue to test new concepts and enhance our existing concepts in order to
provide further options to our guests and increase our average concession/food
and beverage revenues per person. Strategies may also include expanded sports
programming and other entertainment options in our signature bars.

•Evolving and reenergizing what we believe to be our best-in-class customer
loyalty program called Magical Movie RewardsSM ("MMR"). We currently have
approximately 4.4 million members enrolled in the program. Approximately 41% of
all box office transactions and 40% of total transactions in our theatres during
fiscal 2021 were completed by registered members of the loyalty program. We
believe that this program contributes to increased movie-going frequency, more
frequent visits to the concession stand, increased loyalty to Marcus Theatres
and, ultimately, improved operating results.

•Modernizing pricing strategies based upon consumer demand. We currently offer a
number of very successful pricing promotions, including "$5 Tuesday," "$6
Student Thursday" and a $6 "Young-at-Heart" program for seniors on Friday
afternoons. We believe these promotions have increased movie going frequency and
reached a customer who may have stopped going to the movies because of price,
without adversely impacting the movie-going habits of our regular weekend
customers. During fiscal 2021, we introduced Marcus Private Cinema ("MPC"), a
program that allows guests the opportunity to purchase an entire auditorium for
up to 20 of his or her friends and family for a fixed charge. Conversely, we
charge a higher ticket price for PLF screens and have recently tested higher
pricing on Friday and
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Saturday nights at select locations. We plan to continue testing and implementing additional pricing strategies based on consumer demand.

•Expanding the use of technology in all facets of our business. We have recently
enhanced our mobile ticketing capabilities, our downloadable Marcus Theatres
mobile application and our marcustheatres.com website. We added food and
beverage ordering capabilities to our mobile application at select theatres in
fiscal 2019 and expanded this feature to all of our theatres in fiscal 2020. We
have continued to install additional theatre-level technology, such as new
ticketing kiosks, digital menu boards and concession advertising monitors. Each
of these enhancements is designed to improve customer interactions, both at the
theatre and through mobile platforms and other electronic devices. We also
believe that maximizing the use of these technology enhancements will reduce the
impact of labor shortages that we and others are currently facing.

•Exploring new lobby monetization initiatives. Lobby innovations may include,
but not be limited to, unique experiential displays, video and redemption games
and other interactive options for our guests.

•Executing multiple strategies designed to further increase revenues and improve
the profitability of our existing theatres. These strategies include various
cost control efforts, as well as plans to expand ancillary theatre revenues,
such as pre-show advertising, lobby advertising, post transaction click-through
advertising, additional corporate and group sales, sponsorships and special film
series.

•Continually assess the financial viability of our existing assets. In fiscal 2021, we made the decision not to reopen three theaters that had previously closed due to the COVID-19 pandemic, consisting of a former budget theater and two Movie Tavern cinemas whose leases expired in the following year.

•Regularly upgrading and remodeling our theatres to keep them fresh. To maintain
our existing theatres and accomplish the strategies noted above and below, we
currently anticipate that our fiscal 2022 capital expenditures in this division
will total approximately $15 - $20 million.

•Re-invent and modernize the out-of-home entertainment experience. Our goal
continues to be to introduce and create entertainment destinations that further
define and enhance the customer value proposition for movie-going and the
overall out-of-home entertainment experience. Strategies to achieve this goal
are expected to include:

•Testing and subsequently launching a subscription program that would encourage
more frequent movie-going, particularly for non-blockbuster films. In January
2022, we introduced two such programs, branded MovieFlexSM and MovieFlexSM+, in
three separate markets as part of our initial test of this strategy.

•Testing and subsequently implementing additional entertainment options within
theatre auditoriums. Examples of initiatives may include sports bars for viewing
live sports (possibly with online gambling where available), sports gaming, and
interactive auditoriums. In March 2022, we expect to introduce a sports viewing
auditorium in one of our theatres as part of our initial test of this strategy.

•Further socializing the overall experience for our guests. This strategy will
include targeting future movie-goers with relevant and desired experiences
through new and creative marketing approaches, including the use of technology
to tailor communications to individual guest preferences. For example, we have
partnered with Movio, a global leader in data analysis for the cinema industry,
to allow more targeted communication with our loyalty members. The software
provides us with insight into customer preferences, attendance habits and
general demographics, which we believe will help us deliver customized
communication to our members. In turn, members of this program can enjoy and
plan for a more personalized movie-going experience.

• Explore new viewing experiences for our guests. For example, we currently offer a 4DX auditorium in one of our cinemas. 4DX delivers an immersive multi-sensory cinematic experience, including

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synchronized motion seats and environmental effects such as water, wind, fog,
scent and more, to enhance the action on screen. We will consider additional
experiential offerings in the future.

•Exploring new content sources and deliveries to supplement existing mainstream
movie content. The addition of digital technology throughout our circuit (we
offer digital cinema projection on 100% of our screens) has provided us with
additional opportunities to obtain non-motion picture programming from other new
and existing content providers, including live and pre-recorded performances of
the Metropolitan Opera, as well as sports, music and other events, at many of
our locations. We offer weekday and weekend alternate programming at many of our
theatres across our circuit. The special programming includes classic movies,
faith-based content, live performances, comedy shows and children's
performances. We believe this type of programming is more impactful when
presented on the big screen and provides an opportunity to continue to expand
our audience base beyond traditional moviegoers. Our MMR program also gives us
the ability to cost effectively promote non-traditional programming and special
events, particularly during non-peak time periods.

•Strategic growth. Our long-term growth plans in our theater division may include evaluating opportunities for new theaters and screens. Growth opportunities we may explore in the future include:

•New builds. In October 2019, we opened our new eight-screen Movie Tavern® by
Marcus theatre in Brookfield, Wisconsin. This new theatre became the first Movie
Tavern by Marcus in Wisconsin. It includes eight auditoriums, each with laser
projection and comfortable DreamLounger recliner seating, a full-service bar and
food and drink center, and a new delivery-to-seat service model that also allows
guests to order food and beverage via our mobile phone application or in-theatre
kiosk. We will consider additional sites for potential new theatre locations in
both new and existing markets in the future.

•Management contracts and/or taking over existing theatre leases. The COVID-19
pandemic has been challenging for all theatre operators. In some cases, existing
theatres have been returned to landlords. We will consider either managing
theatres for existing owners/landlords or entering into new, financially viable
lease arrangements if such opportunities arise.

•Acquisitions. Acquisitions of existing theatres or theatre circuits has also
been a viable growth strategy for us. On February 1, 2019, we acquired the
assets of Movie Tavern®, a New Orleans-based industry leading circuit known for
its in-theatre dining concept featuring chef-driven menus, premium quality food
and drink and luxury seating. The acquired circuit consisted of 208 screens at
22 locations in nine states. The purchase price consisted primarily of shares of
our common stock. The acquisition of the Movie Tavern circuit increased our
total number of screens by an additional 23%.

Now branded Movie Tavern by Marcus, we subsequently introduced new amenities to
select Movie Tavern theatres, including our proprietary PLF screens and
DreamLounger recliner seating, signature programming, such as $5 movies on
Tuesdays with a free complimentary-size popcorn for loyalty members, and proven
marketing, loyalty and pricing programs that will continue to benefit Movie
Tavern guests in the future.

As noted above, the COVID-19 pandemic has been challenging for all theatre
operators. A number of theatre operators have filed for bankruptcy relief and
many others are facing difficult financial circumstances. Although we will
prioritize our own finances, we will continue to consider potential acquisitions
in the future. The movie theatre industry is very fragmented, with approximately
50% of United States screens owned by the three largest theatre circuits and the
other 50% owned by an estimated 800 smaller operators, making it very difficult
to predict when acquisition opportunities may arise. We do not believe that we
are geographically constrained, and we believe that we may be able to add value
to certain theatres through our various proprietary amenities and operating
expertise.

Hotels and resorts

•Operational excellence and financial discipline. We have always been, and will
continue to be, focused on improving the quality of the guest experience, our
portfolio of assets, and our associate working environment, with a long-term
view of financial success and profitability. During fiscal 2022 and beyond, we
expect to execute
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on a number of strategies to maximize and further leverage our existing assets in a post-pandemic world. These strategies should include:

•Multiple strategies that are intended to further grow the division's revenues
and profits. Our focus will shift from rebuilding in fiscal 2021 to accelerating
excellence in fiscal 2022, with guest experience at the forefront. Strategies
will include leveraging our food and beverage expertise to further distinguish
us from our competition. In addition to rebuilding our banquet and catering
business as group demand improves, we will leverage hotel food and beverage
concepts developed by our Marcus Restaurant Group, featuring premier brands such
as Mason Street Grill, ChopHouse®, Miller Time® Pub & Grill and SafeHouse
restaurants.

•Sales, marketing and revenue management strategies designed to further increase
our profitability. The priority will be to further accelerate the pace of the
recovery from the COVID-19 pandemic, focusing on leveraging strong leisure
demand, driving average daily rate, rebuilding group demand and growing
ancillary revenues.

• Human resources and technology strategies designed to achieve operational excellence and improve the work environment for associates, while adapting to a changing labor market. We will continue to focus on developing our customer service delivery and technology enhancements to improve customer interactions through mobile platforms and other customer touch points.

•A continued focus on financial discipline as we continue to recover from the pandemic without sacrificing our commitment to operational excellence.

•Portfolio Management. We have invested approx. $152 million to further improve our portfolio of hotels and resorts over the past 8 years. These investments have included:

•Hotel renovations. We regularly renovate and update our hotels and resorts. For
example, we made additional reinvestments in the Hilton Madison Monona Terrace
in fiscal 2019. Early in fiscal 2021, we renovated the lobby and initiated
select guest room improvements at the Grand Geneva Resort & Spa.

•Hotel branding changes. We closed the InterContinental Milwaukee in early
January 2019 and undertook a substantial renovation project that converted this
hotel into the unbranded experiential arts hotel, the Saint Kate. The newly
renovated hotel reopened during June 2019.

Our future plans for our hotels and resorts division also include continued
reinvestment in our existing properties to maintain and enhance their value. We
anticipate additional reinvestments during fiscal 2022 and fiscal 2023 at the
Grand Geneva Resort & Spa and The Pfister Hotel. To maintain our existing hotels
and resorts, we currently anticipate that our fiscal 2022 capital expenditures
in this division will total approximately $20 - $25 million.

We have been very opportunistic in our past hotel investments as we have, on
many occasions, acquired assets at favorable terms and then improved the
properties and operations to create value. Unlike our theatre assets where the
majority of our return on investment comes from the annual cash flow generated
by operations, a portion of the return on our hotel investments is derived from
effective portfolio management, which includes determining the proper branding
strategy for a given asset, the proper level of investment and upgrades and
identifying an effective divestiture strategy for the asset when appropriate. As
a result, we may periodically explore opportunities to monetize all or a portion
of one or more owned hotels.

We will consider many factors as we actively review opportunities to execute
this strategy, including income tax considerations, the ability to retain
management, pricing and individual market considerations. We evaluate strategies
for our hotels on an asset-by-asset basis. We have not set a specific goal for
the number of hotels that may be considered for this strategy, nor have we set a
specific timetable. It is possible that we may sell a particular hotel or hotels
during fiscal 2022 or beyond if we determine that such action is in the best
interest of our shareholders.

•Strategic growth. The COVID-19 pandemic has been challenging for most hotel
operators and many are facing difficult financial circumstances. As a result,
transactional activity in the hotel industry has been extremely limited during
the last two years. Although we will prioritize our own finances, our hotels and
resorts division expects to
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continue to seek opportunities to invest in new hotels and increase the number of rooms under management in the future. Growth opportunities we may explore in the future include:

•Seeking opportunities where we may act as an investment fund sponsor or joint
venture partner in acquiring additional hotel properties. We continue to believe
that opportunities to acquire high-quality hotels at reasonable valuations will
be present in the future for well-capitalized companies, and we believe that
there are partners available to work with us when the appropriate hotel assets
are identified. Advantages of this growth strategy include the ability to
accelerate our growth through smaller investments in an increased number of
properties, while earning management fees and potentially receiving a promoted
interest in the hotel investments.

In December 2021, we announced the formation of a joint venture with funds
managed by Searchlight Capital Partners ("Searchlight"), a leading global
private investment firm, to co-invest in lifestyle hotels, resorts and
high-quality full-service properties. Through this joint venture, we acquired
the Kimpton Hotel Monaco Pittsburgh, which we will manage, on December 16, 2021.
We hope to acquire additional hotels using this strategy in fiscal 2022 and
beyond.

•Pursuing additional management contracts for other owners, some of which may
include small equity investments similar to the investments we have made in the
past with strategic equity partners. Although total revenues from an individual
hotel management contract are significantly less than from an owned hotel, the
operating margins are generally significantly higher due to the fact that all
direct costs of operating the property are typically borne by the owner of the
property. Management contracts provide us with an opportunity to increase our
total number of managed rooms without a significant investment, thereby
increasing our returns on equity. In April 2019, we assumed management of the
468-room Hyatt Regency Schaumburg hotel in Schaumburg, Illinois. In August 2021,
we assumed management of the Coralville Hotel & Conference Center in Coralville,
Iowa. Owned by the City of Coralville, this 286-room hotel was recently
rebranded under the Hyatt Regency brand as Hyatt Regency Coralville Hotel &
Conference Center. The property will undergo a phased renovation focusing on the
restaurant and all hotel guest rooms. Conversely, we will occasionally lose
management contracts due to various circumstances.

Business

•We periodically review opportunities to make investments in long-term growth
opportunities that may not be entirely related to our two primary businesses
(but typically have some connection to entertainment, food and beverage,
hospitality, real estate, etc.). Although we will prioritize our own finances,
we expect to continue to review such opportunities in the future.

•In addition to operational and growth strategies in our operating divisions, we
will continue to seek additional opportunities to enhance shareholder value,
including strategies related to our dividend policy and share repurchases. We
increased our regular quarterly common stock cash dividend rate by 6.7% during
the first quarter of fiscal 2019 and 6.3% during the first quarter of fiscal
2020, prior to temporarily suspending dividend payments in response to the
COVID-19 pandemic. In prior years, we have periodically paid special dividends
and repurchased shares of our common stock under our existing Board of Directors
stock repurchase authorizations. The Credit Agreement currently allows us, if we
believe it is in the best interest of our shareholders, to once again return
capital to shareholders through dividends or share repurchases beginning in the
first quarter of fiscal 2022, up to a maximum of $1.55 million per quarter
(approximately $0.05/share/quarter if a dividend). Our Board of Directors
elected to not declare a dividend during the first quarter of fiscal 2022, but
will continue to evaluate this option for future quarters. The current
restriction on dividends and share repurchases will remain in place until the
first quarter of fiscal 2023 or until the Term Loan A is repaid and we have
returned to our financial covenants in place prior to the restriction (whichever
comes first).

•We will also continue to evaluate opportunities to sell real estate when
appropriate, allowing us to benefit from the underlying value of our real estate
assets. When possible, we will attempt to avail ourselves of the provisions of
Internal Revenue Code §1031 related to tax-deferred like-kind exchange
transactions. We are actively marketing a significant number of pieces of
surplus real estate and other non-core real estate. During the fourth quarter of
fiscal 2020, we sold two land parcels and a former budget theatre, generating
total proceeds of approximately $3.0 million. During fiscal 2021, we sold an
equity interest in a joint venture, several land parcels, another former
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budget theatre and an operating retail center, generating total proceeds of
$22.1 million. As of December 30, 2021, we had letters of intent or contracts to
sell several pieces of real estate with a carrying value of $4.9 million and we
believe we may receive total sales proceeds from real estate sales during the
next year totaling approximately $10 - $20 million, depending upon demand for
the real estate in question.

The actual number, mix and timing of our potential future new facilities and
expansions and/or divestitures will depend, in large part, on industry, economic
and COVID-19 pandemic conditions, our financial performance and available
capital, the competitive environment, evolving customer needs and trends, and
the availability of attractive acquisition and investment opportunities. It is
likely that our growth goals and strategies will continue to evolve and change
in response to these and other factors, and there can be no assurance that we
will achieve our current goals. Each of our goals and strategies are subject to
the various risk factors discussed above in this Annual Report on Form 10-K.

Operating results

Consolidated financial comparisons

The following table sets forth revenues, operating income (loss), other income
(expense), net earnings (loss) and net earnings (loss) per diluted common share
for the past three fiscal years (in millions, except for per share and
percentage change data) :

                                                                              F21 v. F20                                                F20 v. F19
                                  F2021             F2020              Amt.                Pct.              F2019              Amt.                Pct.
Revenues                        $ 458.2          $  237.7          $    220.6                92.8  %       $ 820.9          $  (583.2)                (71.0) %
Operating income (loss)           (41.5)           (178.4)              137.0                76.8  %          68.2             (246.6)               (361.7) %
Other income (expense), net       (17.5)            (17.4)               (0.2)               (1.1) %         (13.8)              (3.6)                (26.3) %
Net earnings attributable to
noncontrolling interests              -                 -                   -                   -  %           0.1               (0.1)               (123.5) %
Net earnings (loss)
attributable to The Marcus
Corporation                     $ (43.3)         $ (124.8)         $     81.6                65.3  %       $  42.1          $  (167.0)               (396.4) %
Net earnings (loss) per common
share - diluted                 $ (1.42)         $  (4.13)         $     2.71                65.6  %       $  1.35          $   (5.48)               (405.9) %

Fiscal 2021 vs. Fiscal 2020

Revenues, operating loss, net loss attributable to The Marcus Corporation and
net loss per diluted common share improved significantly during fiscal 2021
compared to fiscal 2020. Increased revenues from both our theatre division and
hotels and resorts division contributed to the improvement during fiscal 2021
compared to fiscal 2020, during which the majority of our theatres and hotels
were closed for large portions of the second and third quarters due to the
impact of the COVID-19 pandemic. Our theatres and hotels were operating fairly
normally during the first two and one-half months of fiscal 2020 until the onset
of the pandemic in mid-March. Both of our operating divisions were impacted by
nonrecurring items during fiscal 2021 and fiscal 2020 that are described in
detail below. Net loss attributable to The Marcus Corporation during fiscal 2021
was negatively impacted by increased interest expense compared to fiscal 2020,
partially offset by increased gains on disposition of property, equipment and
other assets. Net loss attributable to The Marcus Corporation and net loss per
diluted common share during fiscal 2020 were favorably impacted by a favorable
income tax benefit described below.

Our operating loss during fiscal 2021 was favorably impacted by state government
grants and federal tax credits of approximately $10.7 million, or approximately
$0.25 per diluted common share. Our operating loss during fiscal 2021 was
negatively impacted by impairment charges of approximately $5.8 million, or
approximately $0.14 per diluted common share, primarily related to two operating
theatres, three permanently closed theatres and surplus real estate that we
intend to sell. Our operating performance during fiscal 2020 was negatively
impacted by nonrecurring expenses totaling approximately $11.5 million, or
approximately $0.27 per diluted common share, including payments to and on
behalf of laid off employees. Nonrecurring expenses during fiscal 2020 also
included extensive cleaning costs, supply purchases and employee training, among
other items, related to the reopening of selected theatre and hotel properties
and implementing new operating protocols. In addition, impairment charges
related to intangible assets and several theatre locations negatively impacted
our fiscal 2020 operating loss by approximately $24.7 million, or approximately
$0.59 per diluted
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common share. Conversely, our operating performance during fiscal 2020 was
favorably impacted by nonrecurring state governmental grants totaling
approximately $7.0 million, or approximately $0.17 per diluted common share, and
net insurance proceeds of approximately $1.8 million, or approximately $0.04 per
diluted common share, related to COVID-19 pandemic related insurance claims. Our
additional 53rd week of operations contributed approximately $5.1 million in
revenues and did not have a material impact on our operating loss or net loss
during fiscal 2020.

Operating losses from our corporate items, which include amounts not allocable
to the business segments, increased during fiscal 2021 compared to fiscal 2020
due primarily to increased non-cash long-term incentive compensation expenses
and the fact that we reduced the salaries and bonus accruals of executives and
corporate staff and suspended board cash compensation during fiscal 2020 to
preserve liquidity at the onset of the pandemic. Operating losses from our
corporate items were also favorably impacted during fiscal 2020 by the net
insurance proceeds of $1.8 million described above.

We recognized investment income of $0.6 million during fiscal 2021 compared to
investment income of $0.6 million during fiscal 2020. Investment income includes
interest earned on cash and cash equivalents, as well as increases/decreases in
the value of marketable securities and increases in the cash surrender value of
a life insurance policy. Investment income during fiscal 2022 may vary compared
to fiscal 2021, primarily dependent upon changes in the value of marketable
securities.

Interest expense totaled $18.7 million during fiscal 2021, an increase of $2.4
million, or 14.9%, compared to interest expense of $16.3 million during fiscal
2020. The increase in interest expense during fiscal 2021 was due in part to
increased borrowings and an increase in our average interest rate, as discussed
in the Liquidity section of this MD&A below. Interest expense during fiscal 2021
included approximately $2.2 million in noncash amortization of debt issuance
costs. During fiscal 2022, we estimate that noncash amortization of debt
issuance costs will be approximately $1.6 million, excluding the impact of any
new debt issuance costs. We currently expect our total interest expense to
decrease during fiscal 2022 due to decreased borrowings. Changes in our
borrowing levels due to variations in our operating results, capital
expenditures, acquisition opportunities (or the lack thereof) and asset sale
proceeds, among other items, may impact, either favorably or unfavorably, our
actual reported interest expense in future periods, as may changes in short-term
interest rates.

We incurred other expense of $2.5 million during fiscal 2021, an increase of
approximately $1.5 million, or 154.6%, compared to other expense of $1.0 million
during fiscal 2020. Other expense consists primarily of the non-service cost
components of our periodic pension costs. During fiscal 2020, other expense was
partially offset by other income of approximately $1.4 million related to the
receipt of Movie Tavern acquisition escrow funds returned to us in conjunction
with a negotiated early release of remaining escrow funds to the seller. Based
upon information from an actuarial report for our pension plans, we expect other
expense to be approximately $2.4 million during fiscal 2022.

We reported net gains on disposition of property, equipment and other assets of
approximately $3.2 million and $0.9 million, respectively, during fiscal 2021
and fiscal 2020. The net gains on disposition of property, equipment and other
assets during fiscal 2021 included the sale of surplus land, the sale of an
equity investment in a joint venture, the sale of a former budget movie theatre
and the sale of a retail center, partially offset by losses on items disposed of
during the year by both divisions. The net gains on disposition of property,
equipment and other assets during fiscal 2020 were due primarily to the sale of
two surplus land parcels and one theatre, partially offset by losses on items
disposed of during the year by both divisions. The timing of our periodic sales
and disposals of property, equipment and other assets results in variations each
year in the gains or losses that we report on dispositions of property,
equipment and other assets. We anticipate the potential for additional
disposition gains or losses from periodic sales of property, equipment and other
assets, during fiscal 2022 and beyond, as discussed in more detail in the
"Current Plans" section of this MD&A.

We reported equity losses from an unconsolidated joint venture of approximately
$0.1 million and $1.5 million, respectively, during fiscal 2021 and fiscal 2020.
The equity loss during fiscal 2021 consisted of our pro-rata share of losses
from the Kimpton Hotel Monaco Pittsburgh in Pittsburgh, Pennsylvania, acquired
in mid-December 2021 and in which we have a 10% minority ownership interest. We
will report our proportionate share of any earnings or losses of this hotel as
equity earnings or losses from unconsolidated joint ventures during fiscal 2022.
The equity loss during fiscal 2020 consisted of our pro-rata share of losses
from the Omaha Marriott Downtown at The Capitol District hotel in Omaha,
Nebraska (the "Omaha Marriott") - a hotel we manage and in which we had a 10%
minority ownership interest. The loss during fiscal 2020 included losses from
the hotel and an other-than-temporary impairment loss of approximately $0.8
million in which we determined that the fair value of our equity method
investment in the hotel joint venture was less than its carrying value. The
Omaha Marriott has performed well historically from an operational perspective,
but was experiencing overall losses due to depreciation and interest expense,
further exasperated by the COVID-19 pandemic.
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At the beginning of the 2021 financial year, following a recapitalization of the hotel, we sold our interest in this property. We continue to manage the hotel.

The operating results of one majority-owned hotel, The Skirvin Hilton, are
included in the hotels and resorts division revenue and operating income (loss)
during fiscal 2021 and fiscal 2020, and the after-tax net earnings or loss
attributable to noncontrolling interests is deducted from or added to net
earnings (loss) on the consolidated statements of earnings (loss). As a result
of the noncontrolling interest balance reaching zero during the second quarter
of fiscal 2020, we do not expect to report additional net losses attributable to
noncontrolling interests in future periods until the hotel returns to
profitability.

We reported income tax benefits during fiscal 2021 and fiscal 2020 of $15.7
million and $70.9 million, respectively. The larger income tax benefit during
fiscal 2020 was primarily the result of the significant losses before income
taxes incurred as a result of the closing of the majority of our properties in
March 2020 and the subsequent reduction in our operating performance due to the
COVID-19 pandemic. Our fiscal 2020 income tax benefit was also favorably
impacted by an adjustment of approximately $20.1 million, or approximately $0.65
per share, resulting from several accounting method changes, the March 27, 2020
signing of the CARES Act and a provision of a COVID Relief stimulus bill passed
in December 2020 that allowed us to deduct $10.1 million of qualified expenses
paid for by Paycheck Protection Program (PPP) loans. One of the provisions of
the CARES Act allowed our 2020 taxable losses to be carried back to prior fiscal
years during which the federal income tax rate was 35% compared to the current
statutory federal income tax rate of 21%. Our fiscal 2020 effective income tax
rate, after adjusting for earnings (losses) from noncontrolling interests that
are not tax-effected because the entity involved is a tax pass-through entity,
was 36.2% and benefitted from the adjustments described above. Excluding these
favorable adjustments to income tax benefit, our effective income tax rate
during fiscal 2020 was 26.0%. Our fiscal 2021 effective income tax rate was
26.6%. We currently anticipate that our fiscal 2022 effective income tax rate
may be in the 24-26% range, excluding any potential further changes in federal
or state income tax rates or other one-time tax benefits.

Weighted-average diluted shares outstanding were 31.4 million during fiscal 2021
and 31.0 million during fiscal 2020. All per share data in this MD&A is
presented on a fully diluted basis, however, for periods when we report a net
loss, common stock equivalents are excluded from the computation of diluted loss
per share as their inclusion would have an anti-dilutive effect. In future
periods, weighted-average diluted shares will include shares from the conversion
of convertible notes to the extent conversion is dilutive in such periods.

Theaters

Our oldest and historically most profitable division is our theatre division.
The theatre division contributed 59.2% of our consolidated revenues and 127.0%
of our consolidated operating loss, excluding corporate items, during fiscal
2021, compared to 55.8% and 73.5%, respectively, during fiscal 2020 and 67.9%
and 88.4%, respectively, during fiscal 2019. As of December 30, 2021, the
theatre division operated motion picture theatres in Wisconsin, Illinois, Iowa,
Minnesota, Missouri, Nebraska, North Dakota, Ohio, Arkansas, Colorado, Georgia,
Kentucky, Louisiana, New York, Pennsylvania, Texas and Virginia, a family
entertainment center in Wisconsin. The following tables set forth revenues,
operating income (loss), operating margin, screens and theatre locations for the
last three fiscal years:

                                                                                 F21 v. F20                                                F20 v. F19
                                    F2021             F2020              Amt.                 Pct.              F2019              Amt.                Pct.

                                                                                 (in millions, except percentages)
Revenues                          $ 271.2          $  132.6          $    138.6                104.5  %       $ 557.1          $  (424.5)                (76.2) %
Operating income (loss)           $ (27.6)         $ (121.4)         $     93.9                 77.3  %       $  76.9          $  (198.3)               (257.9) %
Operating margin                    (10.2) %          (91.6) %                                                   13.8  %



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Number of screens and locations at period-end (1)(2)         F2021       F2020       F2019
Theatre screens                                                1,064       1,097       1,106
Theatre locations                                                 85          89          91
Average screens per location                                    12.5        12.3        12.2


(1)Includes 6 screens at a location managed for another owner at the end of fiscal 2020 and fiscal 2019.

(2)Includes 22 budget screens at two locations at the end of fiscal 2020 and 29
budget screens at three locations at the end of fiscal 2019. Compared to
first-run theatres, budget theatres generally have lower box office revenues and
associated film costs, but higher concession sales as a percentage of box office
revenues.

The following table provides a more detailed breakdown of the theater division’s revenue components for the last three fiscal years:

                                                       F21 v. F20                                F20 v. F19
                        F2021        F2020          Amt.          Pct.         F2019         Amt.          Pct.

                                                   (in millions, except percentages)

Entrance recipes $130.7 $64.8 $65.9 101.7%

  $ 284.1      $  (219.3)      (77.2) %
Concession revenues     118.7         56.7            62.0       109.2  %      231.2         (174.5)      (75.5) %
Other revenues           21.8         10.8            11.0       102.1  %       40.8          (30.1)      (73.6) %
                        271.2        132.3           138.9       105.0  %      556.2         (423.9)      (76.2) %
Cost reimbursements       0.1          0.3            (0.2)      (72.8) %        0.9           (0.6)      (63.1) %
Total revenues        $ 271.2      $ 132.6      $    138.6       104.5  %    $ 557.1      $  (424.5)      (76.2) %


As described above in the "Current Plans" section of this MD&A, on February 1,
2019, we acquired the assets of Movie Tavern. As a result, fiscal 2019 revenues
included 11 months of operations from these theatres.

Fiscal 2021 vs. Fiscal 2020

Our theatre division revenues increased and operating loss decreased
significantly during fiscal 2021 compared to fiscal 2020 due in large part to
the fact that we temporary closed all of our theatres on March 17, 2020 in
response to the COVID-19 pandemic. Increased revenues during the fiscal 2021
fourth quarter compared to the prior year also contributed to our improved
theatre division operating performance during fiscal 2021 compared to fiscal
2020. Despite the favorable comparisons to fiscal 2020, all of our theatres
continued to operate with significantly reduced attendance during fiscal 2021
compared to pre-pandemic levels.

Our theatres were operating fairly normally during the first two and one-half
months of fiscal 2020 until the onset of the pandemic in mid-March. Other than
six theatres that were reopened during the last week of the fiscal 2020 second
quarter, all of our theatres were closed during all of the second quarter and
the majority of the third quarter of fiscal 2020. During the five-plus months
that most of our theatres were closed, the only additional revenues we reported
were the result of five parking lot cinemas opened during the second quarter,
curbside sales of popcorn, pizza and other food items and restaurant takeout
sales from our three Zaffiro's restaurants and bars. Over the seven-day period
between August 21 and August 28, 2020, we reopened a majority of our theatres in
conjunction with the release of several new films, resulting in a total of 72
reopened theatres, representing 80% of our company-owned theatres. In October
2020, we temporarily closed several theatres due to changes in the release
schedule for new films, reducing our percentage of theatres open to
approximately 66%. In November and December 2020, new state and local
restrictions in several of our markets required us to temporarily reclose
several theatres, further negatively impacting our fiscal 2020 results. Even
when open, all of our reopened theatres were operating at significantly reduced
attendance levels in fiscal 2020, further negatively impacting our fiscal 2020
operating loss.

We began the first quarter of fiscal 2021 with approximately 52% of our theatres
open. As state and local restrictions were eased in several of our markets and
several new films were released by movie studios, we gradually reopened
theatres, ending the fiscal 2021 first quarter with approximately 74% of our
theatres open, ending the fiscal 2021 second quarter with approximately 95% of
our theatres open and ending the fiscal 2021 third and fourth quarters with all
of
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our current theatres open. The majority of our reopened theatres operated with
reduced operating days (Fridays, Saturdays, Sundays and Tuesdays) and reduced
operating hours during the fiscal 2021 first quarter. By the end of May 2021, we
had returned the vast majority of our theatres to normal operating days (seven
days per week) and operating hours.

Our operating loss during fiscal 2021 was negatively impacted by impairment
charges of approximately $5.8 million primarily related to surplus real estate
that we intend to sell. Conversely, nonrecurring state government grants from
five states and federal tax credits totaling approximately $7.2 million for
COVID-19 relief favorably impacted our theatre division operating loss during
fiscal 2021.

Our theatre division operating loss during the five-plus months our theatres
were closed during fiscal 2020 primarily reflected costs that remained after we
temporarily closed all of our theatres and laid off the vast majority of our
hourly theatre staff, as well as a portion of our corporate staff. These costs
included a certain number of salaried theatre management staff as well as the
remaining corporate staff, all of whom were subject to a reduction in pay.
Additional ongoing costs included utilities and repairs and maintenance (both at
reduced levels), rent, property taxes and depreciation. During the last month of
our fiscal 2020 third quarter, we brought back an appropriate level of theatre
and corporate staff to meet anticipated reduced levels of initial new film
supply and customer demand in our recently reopened theatres. Our theatre
division operating results during fiscal 2020 were negatively impacted by
nonrecurring expenses totaling approximately $5.8 million related to expenses
incurred (primarily payroll continuation payments to employees temporarily laid
off) due to the closing of all of our movie theatres during the first quarter
and subsequent costs incurred for cleaning, supply purchases and employee
training, among other items, related to the reopening of our theatre properties
and implementing new operating protocols. Impairment charges reported during
fiscal 2020 related to intangible assets and several theatre locations also
negatively impacted our theatre division fiscal 2020 operating loss by
approximately $24.7 million. Conversely, our operating loss during fiscal 2020
was favorably impacted by approximately $5.8 million of state government grants
awarded from seven states for COVID-19 relief. The additional week of operations
favorably impacted our theatre division revenues during fiscal 2020 by
approximately $2.6 million and did not have a material impact on our operating
loss.

Although rent continued to be expensed monthly, discussions with our landlords
resulted in deferral, or in a limited number of situations, abatements, of the
majority of our rent payments during our fiscal 2020 second quarter. While the
results of negotiations varied by theatre, the most common result of these
discussions was a deferral of rent payments for April, May and June, with
repayment generally occurring in subsequent periods, most often beginning in
calendar 2021.

In order to evaluate our fiscal 2021 theatre operating results, we believe it is
also beneficial to compare our revenues to pre-pandemic levels. The following
table compares the components of revenues for the theatre division for fiscal
2021 to fiscal 2019:

                                                                           F21 v. F19
                                       F2021             F2019         Amt.          Pct.

                                              (in millions, except percentages)
           Admission revenues    $    130.7            $ 284.1      $  (153.4)      (54.0) %
           Concession revenues        118.7              231.2         (112.6)      (48.7) %
           Other revenues              21.8               40.8          (19.1)      (46.7) %
                                      271.2              556.2         (285.0)      (51.2) %
           Cost reimbursements          0.1                0.9           (0.8)      (90.0) %
           Total revenues        $    271.2            $ 557.1      $  (285.8)      (51.3) %



In order to better understand the current pace of the theatre industry recovery
and our ability to outperform the industry, the following table compares the
percentage change in our fiscal 2021 admissions revenues to the corresponding
percentage change in the United States box office revenues (as compiled by us
from data received from Comscore, a national box office reporting service for
the theatre industry) during each quarter of fiscal 2021 compared to the same
quarter during fiscal 2019:
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                                                                                        F21 v. F19
                                         1st Qtr. (1)               2nd Qtr.               3rd Qtr.               4th Qtr.                Total
Pct. change in Marcus admission
revenues                                         -81.9  %               -70.0  %               -45.2  %               -21.4  %               -54.0  %
Pct. change in U.S. box office
revenues                                         -89.7  %               -73.9  %               -52.8  %               -23.5  %               -59.6  %
Marcus performance vs. U.S.                      +7.8 pts               +3.9 pts               +7.6 pts               +2.1 pts               +5.6 

points

(1)Excludes Movie Tavern theatres, which were only acquired February 1, 2019.

According to the data received from Comscore, our theatres outperformed the
industry during fiscal 2021 compared to fiscal 2019 by 5.6 percentage points.
Based upon this metric, we believe we have been one of the top performing
theatre circuits during fiscal 2021 of the top 10 circuits in the U.S.
Additional data received and compiled by us from Comscore indicates our
admission revenues during fiscal 2021 represented approximately 3.5% of the
total admission revenues in the U.S. during the period (commonly referred to as
market share in our industry). This represents a notable increase over our
reported market share of approximately 3.2% during the comparable fiscal 2019
period, prior to the pandemic. Closed theatres in other markets in the U.S.
partially contributed to our outperformance, particularly during the first
quarter of fiscal 2021. We also believe our overall outperformance of the
industry has been attributable to the investments we have made in new features
and amenities in our theatres and our implementation of innovative operating,
pricing and marketing strategies that increased attendance relative to our
peers, particularly at our recently acquired Movie Tavern locations. Our goal is
to continue our past pattern of outperforming the industry, but with the
majority of our renovations now completed, our ability to do so in any given
quarter will likely be partially dependent upon film mix, weather and the
competitive landscape in our markets.

Sales attributable to our Marcus Private Cinema ("MPC") program have exceeded
expectations, partially offsetting reduced traditional attendance and
contributing to our industry outperformance, particularly during the first
quarter of fiscal 2021 when more governmental restrictions were in place and the
vaccine rollout was in its early stages. Under this program, a guest may
purchase an entire auditorium for up to 20 of his or her friends and family for
a fixed charge, ranging from $99 to $275 (depending upon the film and number of
weeks it has been in theatres). At its peak during the majority of the weeks
during our fiscal 2021 first quarter, we averaged over 1,500 MPC events per
week, accounting for approximately 21% of our admission revenues during those
weeks.

Total theatre attendance increased 81.5% during fiscal 2021 compared to fiscal
2020, when our theatres were closed for major portions of the year and the
number of new films released was greatly reduced, resulting in increases in both
admission revenues and concession revenues. Conversely, a decrease in the number
of new films, the lack of awareness of theatres being open (due in part to
limited new film advertising), ongoing state and local capacity restrictions and
customer concerns regarding visiting indoor businesses, all negatively impacted
attendance during fiscal 2021 as compared to fiscal 2019. As described above,
attendance from MPC events (estimated to average 13 guests per event) partially
offset the reduction in traditional movie going attendance, particularly during
the fiscal 2021 first quarter.

Our highest grossing films during fiscal 2021 included Spider-Man: No Way Home,
Black Widow, Venom: Let There Be Carnage, Shang-Chi and the Legend of the Ten
Rings, and F9 The Fast Saga. One of these five films (Black Widow) was released
"day-and-date" on streaming services. We believe such "day-and-date" releases
negatively impact theatrical revenues, particularly in week two and beyond of a
films' release. We also believe "day-and-date" releases increase piracy, further
impacting potential revenues. Due to the impact of three particularly strong
blockbusters (generally defined as films grossing more than $100 million
nationally) released during fiscal 2019 (Avengers: Endgame, Lion King, Frozen
2), compared with only one extremely strong blockbuster released during fiscal
2021 (Spider-Man: No Way Home) the film slate during fiscal 2021 was generally
weighted less towards our top movies compared to fiscal 2019. A decreased
reliance on just a few blockbuster films during a given quarter often has the
effect of slightly reducing our film rental costs during the period, as
generally the better a particular film performs, the greater the film rental
cost tends to be as a percentage of box office receipts. As a result of a more
balanced film slate and the fact that films released during fiscal 2021
generally did not perform at pre-pandemic admission revenue levels, our overall
film rental cost decreased during fiscal 2021 compared to more recent prior
years.

The quantity of wide-release films shown in our theatres and number of
wide-release films provided by the six major studios increased significantly
during fiscal 2021 compared to fiscal 2020, but remained below pre-pandemic
levels. A film is generally considered "wide release" if it is shown on over 600
screens nationally, and these films generally have the greatest impact on box
office receipts. We played 79 wide-release films at our theatres during fiscal
2021 compared to 48 wide-release films during fiscal 2020. Prior to the
pandemic, we played 117 wide-release films at our theatres during fiscal 2019.
In total, we played 318 films and 200 alternate content attractions at our
theatres during fiscal 2021 compared to 134 films and 207 alternate content
attractions during fiscal 2020. Prior to the pandemic, we played a total of 285
films
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and 190 alternate content attractions at our theatres during fiscal 2019. Based
upon projected film and alternate content availability, we currently estimate
that we may once again show an increased number of films and alternate content
events on our screens during fiscal 2022 compared to fiscal 2021, but we expect
the number of wide-release films shown during fiscal 2022 to remain below
pre-pandemic levels.

Our average ticket price increased 11.1% during fiscal 2021 compared to fiscal
2020 and increased by 10.7% compared to fiscal 2019. A larger proportion of
admission revenues from our proprietary premium large format screens (with a
higher ticket price) and the increase in MPC events contributed to the increase
in our average ticket price during fiscal 2021, as did modest price increases
implemented during the year, partially offset by the fact that we continued to
offer older "library" film product for only $5.00 per ticket during portions of
the first half of fiscal 2021 when there was limited availability of new films.
During the fiscal 2020 third and fourth quarters, we charged our normal pricing
for new film releases and charged only $5.00 for older "library" film product,
which negatively impacted our average ticket price. We currently expect our
average ticket price to increase during fiscal 2022, but film mix and the impact
of pricing strategies discussed in the "Current Plans" section above will likely
impact our final result.

Our average concession revenues per person increased by 15.6% during fiscal 2021
compared to fiscal 2020 and increased by 23.4% compared to fiscal 2019. As
customers have returned to "normal" activities such as going to the movie
theatre, they have demonstrated a propensity to spend at a higher rate than
before the pandemic closures. In addition, a portion of the increase in our
average concession revenues per person during fiscal 2021 may be attributed to
shorter lines at our concession stand due to reduced attendance (during periods
of high attendance, some customers do not purchase concessions because the line
is too long). We also believe that an increased percentage of customers buying
their concessions in advance using our website, kiosk or our mobile app likely
contributed to higher average concession revenues per person, as our experience
has shown that customers are more likely to purchase more items when they order
and pay electronically. We expect to continue to report increased average
concession revenues per person in future periods, but whether our customers will
continue to spend at these current significantly higher levels in future periods
is currently unknown.

Other revenues, which include management fees, pre-show advertising income,
family entertainment center revenues, surcharge revenues, mobile app revenues,
rental income and gift card breakage income, increased by $11.0 million during
fiscal 2021 compared to fiscal 2020, but decreased by $19.1 million compared to
fiscal 2019. The fluctuations in other revenue were primarily due to the impact
of changes in attendance on internet surcharge ticketing fees and preshow
advertising income. We currently expect other revenues (particularly pre-show
advertising and surcharge revenues), to increase in fiscal 2022 if attendance
increases as we anticipate, partially offset by a decrease in rental income due
to the sale of a retail center in Missouri during the fourth quarter of fiscal
2021.

The film product release schedule for fiscal 2022, which had been changing in
response to reduced near-term customer demand and changing state and local
restrictions in various key markets in the U.S. and the world as a result of the
ongoing COVID-19 pandemic, has solidified in recent months. With strong
performances from several recent films, film studios have shown an increased
willingness to begin releasing many of the new films that had previously been
delayed. Several films that have contributed to our early fiscal 2022 first
quarter results include Spider-Man: No Way Home, Sing 2, American Underdog,
Scream, Jackass Forever, Death on the Nile, and Uncharted. Although it is
possible that more schedule changes may occur, new films scheduled to be
released during the remainder of fiscal 2022 that have potential to perform very
well include The Batman, Morbius, Sonic the Hedgehog 2, Ambulance, Fantastic
Beasts: The Secrets of Dumbledore, Doctor Strange in the Multiverse of Madness,
Downton Abbey: A New Era, DC Super Pets, Top Gun: Maverick, Jurassic World:
Dominion, Lightyear, Minions: The Rise of Gru, Thor: Love and Thunder, Bullet
Train, Where the Crawdads Sing, Black Adam, Puss In Boots: The Last Wish,
Spider-Man: Across the Spider-Verse, Halloween Ends, The Flash, Black Panther:
Wakanda Forever, Creed III, Avatar 2, Aquaman 2 and Mario. We believe that with
a greater percentage of the population now vaccinated, and assuming that
concerns over the Delta, Omicron or any new variants of COVID-19 do not result
in significant new restrictions, demand for out-of-home entertainment will
continue to increase during fiscal 2022. The early list of films scheduled to be
released during fiscal 2023 also appears quite strong.

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
appropriate "windows" between the date a film is released in theatres and the
date a motion picture is released to other channels, including premium
video-on-demand ("PVOD"), video on-demand ("VOD"), streaming services and DVD.
These are factors over which we have no control (see additional detail in the
"Impact of COVID-19 Pandemic" section above). We currently believe that
"day-and-date" film release experiments such as those tested by Warner Brothers
and Disney during 2021 will not become the norm as the pandemic fully subsides.
Warner Brothers has already indicated that it intends to return to an exclusive
45-day theatrical window with a significant number of its films during fiscal
2022. After
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the success of the exclusive theatrical release of Shang-Chi and the Legend of
the Ten Rings, Disney announced that the remainder of its fiscal 2021 films
would receive an exclusive theatrical window as well. Disney announced in early
2022 that they will retain flexibility for future film distribution,
particularly for family films, which have been impacted more significantly by
the pandemic.

Early in our fiscal 2021 third quarter, we ceased providing management services
to a 6-screen managed theatre. Early in our fiscal 2021 fourth quarter, we made
the decision to not reopen three remaining closed theatres, consisting of one
former budget-oriented theatre and two Movie Tavern theatres with leases that
will expire within the next year. One former budget-oriented theatre was
converted to first-run during fiscal 2021 and as a result, we no longer operate
any budget-oriented theatres. One of the Marcus Wehrenberg theatres that we
reopened in May 2021 completed a renovation during fiscal 2021 that added
DreamLounger recliner seating, as well as Reel Sizzle® and Take FiveSM Lounge
outlets, to the theatre.

Hotels and Resorts

The hotels and resorts division contributed 40.7% of our consolidated revenues
during fiscal 2021, compared to 44.0% and 32.1%, respectively, during fiscal
2020 and fiscal 2019. The hotels and resorts division contributed 26.5% and
11.6%, respectively, of consolidated operating income (loss), excluding
corporate items, during fiscal 2020 and fiscal 2019. During fiscal 2021 the
hotels and resorts division contributed operating income compared with a
consolidated operating loss, excluding corporate items. As of December 30, 2021,
the hotels and resorts division owned and operated three full-service hotels in
downtown Milwaukee, Wisconsin, a full-service destination resort in Lake Geneva,
Wisconsin and full-service hotels in Madison, Wisconsin, Chicago, Illinois,
Lincoln, Nebraska and Oklahoma City, Oklahoma (we have a majority-ownership
position in the Oklahoma City, Oklahoma hotel). In addition, the hotels and
resorts division managed 11 hotels, resorts and other properties for other
owners. Included in the 11 managed properties is one hotel owned by a joint
venture in which we have a minority interest and two condominium hotels in which
we own some or all of the public space. The following tables set forth revenues,
operating income (loss), operating margin and rooms data for the hotels and
resorts division for the past three fiscal years:

                                                                               F21 v. F20                                                 F20 v. F19
                                   F2021            F2020              Amt.                 Pct.               F2019              Amt.                 Pct.

                                                                                (in millions, except percentages)
Revenues                         $ 186.6          $ 104.6          $     82.0                  78.4  %       $ 263.4          $  (158.7)                 (60.3) %
Operating income (loss)          $   5.9          $ (43.9)         $     49.8                 113.4  %       $  10.1          $   (53.9)                (536.7) %
Operating margin                     3.1  %         (41.9) %                                                     3.8  %


Available rooms at period-end                      F2021       F2020       F2019
Company-owned                                        2,628       2,628       2,627
Management contracts with joint ventures               248         333      

333

Management contracts with condominium hotels           480         480      

480

Management contracts with other owners               2,088       1,691       1,945
Total available rooms                                5,444       5,132       5,385


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The following table provides a more detailed breakdown of the revenue components of the hotels and resorts division for the past three fiscal years:

                                                            F21 v. F20                                F20 v. F19
                             F2021        F2020          Amt.          Pct.         F2019         Amt.          Pct.

                                                        (in millions, except percentages)
Room revenues              $  77.7      $  35.4      $     42.3       119.4  %    $ 105.9      $   (70.5)      (66.6) %
Food/beverage revenues        47.1         24.8            22.3        89.7  %       74.7          (49.8)      (66.8) %
Other revenues                43.2         27.6            15.7        56.9  %       46.5          (19.0)      (40.8) %
                             168.0         87.8            80.2        91.4  %      227.1         (139.3)      (61.4) %
Cost reimbursements           18.7         16.9             1.8        10.7  %       36.3          (19.4)      (53.5) %
Total revenues             $ 186.6      $ 104.6      $     82.0        78.4  %    $ 263.4      $  (158.7)      (60.3) %

Fiscal 2021 vs. Fiscal 2020

Our hotels and resorts division returned to profitability during fiscal 2021,
reporting operating income compared to a significant operating loss during
fiscal 2020, due to significantly increased revenues during fiscal 2021. All of
our company-owned hotels and resorts contributed to the improved operating
results during fiscal 2021. Our fiscal 2021 operating income also benefited from
a state government grant and federal tax credits totaling approximately $3.4
million.

Division revenues and operating loss during fiscal 2020 were significantly
impacted by the COVID-19 pandemic. Room revenues and food and beverage revenues
began decreasing due to COVID-19 pandemic related cancellations in March 2020,
even before we temporarily closed all of our hotels in late March/early April.
In addition, our restaurants and bars were required to close during the last 10
days of the fiscal 2020 first quarter due to the COVID-19 pandemic. We
subsequently reopened four of our company-owned hotels late in our fiscal 2020
second quarter (The Pfister Hotel, the Grand Geneva Resort & Spa, The Skirvin
Hilton and the Hilton Madison Monona Terrace), three company-owned hotels during
our fiscal 2020 third quarter (the Hilton Milwaukee City Center, The Lincoln
Marriott Cornhusker Hotel and the AC Hotel Chicago Downtown) and our remaining
company-owned hotel in our fiscal 2020 fourth quarter (Saint Kate - The Arts
Hotel). Once reopened, all of our company-owned hotels operated with
significantly reduced occupancies compared to prior years due to the impact of
the COVID-19 pandemic. The majority of our restaurants and bars in our hotels
subsequently reopened in conjunction with the hotel reopenings beginning in June
2020.

In addition to the impact of significantly reduced revenues, our hotel division
operating loss during fiscal 2020 was negatively impacted by nonrecurring
expenses totaling approximately $5.7 million related to costs associated with
initially closing our hotels (primarily payments to and on behalf of laid off
employees) and extensive cleaning costs, supply purchases and employee training,
among other items, related to the reopening of selected hotel properties and
implementing new operating protocols. Conversely, our operating loss during
fiscal 2020 was favorably impacted by approximately $1.2 million of state
government grants awarded from two states for COVID-19 relief. The additional
week of operations in fiscal 2020 favorably impacted our hotels and resorts
division revenues by approximately $2.5 million and did not have a material
impact on our operating loss.

Other revenues during fiscal 2021 and fiscal 2020 included ski, spa and golf
revenues at our Grand Geneva Resort & Spa, management fees, laundry revenues,
parking revenues and rental revenues. Other revenues increased during fiscal
2021 compared to fiscal 2020 due to increased occupancies at our hotels and
resorts. Cost reimbursements increased during fiscal 2021 compared to fiscal
2020 due to the fact that managed hotels were temporarily closed for portions of
fiscal 2020 and had reduced revenues upon reopening.
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As a result of the significantly reduced revenues during fiscal 2020, we believe
it is also beneficial to compare our revenues to pre-pandemic levels. The
following table compares the components of revenues for the hotels and resorts
division for fiscal 2021 to fiscal 2019:
                                                                    F21 v. F19
                                 F2021            F2019          Amt.          Pct.

                                        (in millions, except percentages)
Room revenues              $     77.7           $ 105.9      $    (28.2)      (26.6) %
Food/beverage revenues           47.1              74.7           (27.6)      (36.9) %
Other revenues                   43.2              46.5            (3.3)       (7.1) %
                                168.0             227.1           (59.1)      (26.0) %
Cost reimbursements              18.7              36.3           (17.6)      (48.5) %
Total revenues             $    186.6           $ 263.4      $    (76.7)      (29.1) %



A decline in transient and group business contributed significantly to our
reduced revenues during fiscal 2021 compared fiscal 2019. A decrease in group
business subsequently led to a corresponding decrease in banquet and catering
revenues, negatively impacting our reported fiscal 2021 food and beverage
revenues compared to fiscal 2019. Other revenues decreased during fiscal 2021
compared to fiscal 2019, but the decrease was less than the decrease in room
revenues and food and beverage revenues during fiscal 2021 compared to fiscal
2019, primarily due to increased revenues from one of our condominium hotels and
increased ski and golf revenues at the Grand Geneva Resort & Spa, partially
offset by decreased management fees. Cost reimbursements decreased during fiscal
2021 compared to fiscal 2019 due to reduced revenues and reduced operating costs
at our managed hotels.

The following table shows certain operating statistics, including our average occupancy percentage (number of occupied rooms as a percentage of available rooms), our average daily rate (“ADR”) and our total revenue per available room (“RevPAR”) ). , for company-owned properties:

                                                                   F21 v. F20
Operating Statistics(1)          F2021          F2020           Amt.           Pct.
Occupancy percentage              48.1  %        36.9  %       11.3   pts     30.5  %
ADR                           $ 163.64       $ 136.76       $ 26.88           19.7  %
RevPAR                        $  78.78       $  50.44       $ 28.34           56.2  %


(1)These operating statistics represent averages of our comparable eight
distinct company-owned hotels and resorts, branded and unbranded, in different
geographic markets with a wide range of individual hotel performance. The
statistics are not necessarily representative of any particular hotel or resort.
The statistics only include the periods the hotels were open during fiscal 2020.

RevPAR increased at all eight of our company-owned properties during fiscal 2021
compared to fiscal 2020. The "drive-to leisure" travel customer provided the
most demand during fiscal 2021, with weekend business quite strong at the
majority of our properties. During fiscal 2021, our non-group business
represented approximately 67% of our total rooms revenue, compared to
approximately 56% during fiscal 2019 prior to the pandemic - an indication that
group business continues to lag. Non-group retail pricing was very strong in the
majority of our markets, with large demand drivers during our fiscal 2021 third
quarter in our Milwaukee market (Milwaukee Bucks playoffs, major league
baseball, Summerfest and the Ryder Cup) and significant leisure demand at Grand
Geneva contributing to increased occupancy percentages and ADR.
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As a result of the significantly reduced revenues during 2020, we believe it is
also beneficial to compare our operating statistics to pre-pandemic levels. The
following table sets forth certain operating statistics for fiscal 2021 and
fiscal 2019, including our average occupancy percentage, our ADR, and our
RevPAR, for company-owned properties:

                                                                    F21 v. F19
Operating Statistics(1)          F2021          F2019            Amt.           Pct.
Occupancy percentage              49.6  %        73.6  %       (24.0)  pts     (32.6) %
ADR                           $ 160.38       $ 154.42       $   5.96             3.9  %
RevPAR                        $  79.51       $ 113.65       $ (34.14)          (30.0) %


(1)These operating statistics represent averages of our comparable seven
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.
The statistics exclude the Saint Kate, as this hotel was closed for the majority
of the first half of fiscal 2019.

According to data received from Smith Travel Research and compiled by us in
order to analyze our fiscal 2021 results, comparable "upper upscale" hotels
throughout the United States experienced a decrease in RevPAR of 39.6% during
fiscal 2021 compared to fiscal 2019. Data received from Smith Travel Research
for our various "competitive sets" - hotels identified in our specific markets
that we deem to be competitors to our hotels - indicates that these hotels
experienced a decrease in RevPAR of 36.9% during fiscal 2021 compared to fiscal
2019. Thus, we believe we outperformed the industry and our competitive sets
during fiscal 2021 by approximately 9.6 and 6.9 percentage points, respectively.
Higher class segments of the hotel industry, such as luxury and upper upscale,
continue to experience lower occupancies compared to lower class hotel segments
such as economy and midscale.

In order to better understand the current pace of the hotel industry recovery,
the following table sets forth the change in our average occupancy percentage,
ADR and RevPAR for each quarterly period of fiscal 2021 compared to the same
quarters during fiscal 2019 (excluding the Saint Kate):

                                                 F21 v. F19
                          1st Qtr.        2nd Qtr.        3rd Qtr.        4th Qtr.
Occupancy percentage      (35.8) pts      (26.9) pts      (17.1) pts      (16.5) pts
ADR                           1.9  %        (11.8) %         10.3  %          5.5  %
RevPAR                      (54.5) %        (42.2) %        (12.4) %        (19.7) %


As noted above, the "drive-to leisure" travel customer provided the most demand
during fiscal 2021. Leisure travel historically peaks in our fiscal third
quarter and decreases during our fiscal first and fourth quarters as students go
back to school and we experience colder weather in our predominantly Midwestern
hotels. Transient business and group business travel subsequent to the onset of
the COVID-19 pandemic has remained significantly below fiscal 2019 levels. Our
company-owned hotels, and in particular our largest hotels, have historically
derived a significant portion of their revenues from group business, and as a
result, we are more susceptible to variations in RevPAR from quarter to quarter
depending upon the strength of the group business market during that particular
quarter. Group business also tends to have an impact on our food and beverage
revenues because groups are more likely to use our banquet and catering services
during their stay. As indicated by the increase in ADR during fiscal 2021
compared to fiscal 2019, non-group retail pricing held relatively strong, with
most of any periodic decreases in ADR due to a reduction in market pricing
resulting from the lack of transient business and group business travel midweek.

Looking to future periods, overall occupancy in the U.S. has slowly increased
since the initial onset of the COVID-19 pandemic in March 2020, reaching its
highest level since the start of the pandemic during our fiscal 2021 third
quarter. In the near term, we expect most demand will continue to come from the
drive-to leisure segment. Leisure travel in our markets has a seasonal component
to it, peaking in the summer months and slowing down as children return to
school and the weather turns colder. Most organizations implemented travel bans
at the onset of the pandemic and have generally only allowed essential travel,
which will likely limit business travel in the near term, although we are
beginning to experience some increases in travel from this customer segment.
There also are indications that many of these travel bans are beginning to be
lifted gradually. Our company-owned hotels have experienced a material decrease
in group bookings compared to pre-pandemic periods. As of the date of this
report in early fiscal 2022, our group room revenue bookings for fiscal 2022 -
commonly referred to in the hotels and resorts industry as "group pace" - is
running ahead of where we were at the same time in early fiscal 2021, but behind
where we would typically be at this same time of the year pre-pandemic.
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We are encouraged by the fact that we continue to experience increased booking
activity for fiscal 2022 and beyond. Banquet and catering revenue pace for
fiscal 2022 is also running behind where we would typically be at this same time
of the year pre-pandemic. Increased wedding bookings have contributed to banquet
and catering revenue in fiscal 2021.

During early fiscal 2022, the Omicron variant has resulted in additional short
term delays in the recovery of business travel. We have experienced some group
cancellations during the first quarter of fiscal 2022, which have generally
resulted in the shifting of events and re-bookings to later in the year. As
COVID-19 case levels have begun to decline, we have experienced improving
booking activity once again, indicating consumer comfort may be increasing.

Forecasting what future RevPAR growth or decline will be during the next 18 to
24 months is very difficult at this time. The non-group booking window remains
very short, with most bookings occurring within three days of arrival, making
even short-term forecasts of future RevPAR growth very difficult. Hotel revenues
have historically tracked very closely with traditional macroeconomic statistics
such as the Gross Domestic Product, so we will be monitoring the economic
environment very closely. After past shocks to the system, such as the terrorist
attacks on September 11, 2001 and the 2008 financial crisis, hotel demand took
longer to recover than other components of the economy. Conversely, we now
anticipate that hotel supply growth will be limited for the foreseeable future,
which can be beneficial for our existing hotels. Most industry experts believe
the pace of recovery will be steady over the next couple of years. We are
encouraged by the demand from drive-to leisure customers during fiscal 2021,
which exceeded our expectations. We will continue to focus on reaching the
drive-to leisure market through aggressive campaigns promoting creative packages
for our guests. Overall, we generally expect our revenue trends to track or
exceed the overall industry trends for our segment of the industry, particularly
in our respective markets.

During the third quarter of fiscal 2021, we assumed management of the Coralville
Hotel & Conference Center in Coralville, Iowa. Owned by the City of Coralville,
this 286-room hotel was recently rebranded under the Hyatt Regency brand as
Hyatt Regency Coralville Hotel & Conference Center. The property will undergo a
phased renovation focusing on the restaurant and all hotel guest rooms. Late in
the fourth quarter of fiscal 2021, we assumed management and acquired a minority
interest in the Kimpton Hotel Monaco Pittsburgh, a 248-room hotel situated in
the center of downtown Pittsburgh, Pennsylvania. Conversely, we ceased
management of the Crowne Plaza-Northstar Hotel in Minneapolis, Minnesota during
our fiscal 2021 fourth quarter. We also ceased management of The DoubleTree by
Hilton El Paso Downtown and the Courtyard by Marriott El Paso
Downtown/Convention Center effective February 28, 2022. As of the date of this
filing, our current portfolio of hotels and resorts includes 17 owned and
managed properties across the country.

As discussed in the "Current Plans" section of this MD&A, although we will
prioritize our own finances, we will consider a number of potential growth
opportunities that may impact fiscal 2022 and future period operating results.
In addition, if we were to sell one or more hotels during fiscal 2022, our
fiscal 2022 operating results could be significantly impacted. The extent of any
such impact will likely depend upon the timing and nature of the growth
opportunity (pure management contract, management contract with equity, joint
venture investment, or other opportunity) or divestiture (management retained,
equity interest retained, etc.).

Adjusted EBITDA

Adjusted EBITDA is a measure used by management and our board of directors to
assess our financial performance and enterprise value. We believe that Adjusted
EBITDA is a useful supplemental measure for us and investors, as it eliminates
certain expenses that are not indicative of our core operating performance and
facilitates a comparison of our core operating performance on a consistent basis
from period to period. We also use Adjusted EBITDA as a basis to determine
certain annual cash bonuses and long-term incentive awards, to supplement GAAP
measures of performance to evaluate the effectiveness of our business
strategies, to make budgeting decisions, and to compare our performance against
that of other peer companies using similar measures. Adjusted EBITDA is also
used by analysts, investors and other interested parties as a performance
measure to evaluate industry competitors.

Adjusted EBITDA is a non-GAAP measure of our financial performance and should
not be considered as an alternative to net earnings (loss) as a measure of
financial performance, or any other performance measure derived in accordance
with GAAP. Additionally, Adjusted EBITDA is not intended to be a measure of
liquidity or free cash flow for management's discretionary use. Adjusted EBITDA
has its limitations as an analytical tool, and you should not consider it in
isolation or as a substitute for analysis of our results as reported under GAAP.

We define Adjusted EBITDA as net income (loss) attributable to The Marcus Company before investment income or loss, interest expense, other expenses, gain or loss on disposal of property, plant and equipment and other assets, equity

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earnings or losses from unconsolidated joint ventures, net earnings or losses
attributable to noncontrolling interests, income taxes and depreciation and
amortization, adjusted to eliminate the impact of certain items that we do not
consider indicative of our core operating performance. These further adjustments
are itemized below. You are encouraged to evaluate these adjustments and the
reasons we consider them appropriate for supplemental analysis. In evaluating
Adjusted EBITDA, you should be aware that in the future we will incur expenses
that are the same as or similar to some of the items eliminated in the
adjustments made to determine Adjusted EBITDA, such as acquisition expenses,
preopening expenses, accelerated depreciation, impairment charges and other
adjustments. Our presentation of Adjusted EBITDA should not be construed to
imply that our future results will be unaffected by any such adjustments.
Definitions and calculations of Adjusted EBITDA differ among companies in our
industries, and therefore Adjusted EBITDA disclosed by us may not be comparable
to the measures disclosed by other companies.

The following table presents our reconciliation of Adjusted EBITDA (in millions):

                                                           F2021              F2020              F2019
Net earnings (loss) attributable to The Marcus
Corporation                                             $   (43.3)         $  (124.8)         $    42.0
Add (deduct):
 Investment income                                           (0.6)              (0.6)              (1.4)
 Interest expense                                            18.7               16.3               11.8
 Other expense (income)                                       2.5                1.0                1.9

Loss (gain) on disposal of property, plant and equipment and other assets

                                                 (3.2)              (0.9)               1.1

Loss on equity of unconsolidated joint ventures, net 0.1

      1.5                0.3
 Net loss attributable to noncontrolling interests              -                  -                0.1
 Income tax expense (benefit)                               (15.7)             (70.9)              12.3
 Depreciation and amortization                               72.1               75.1               72.3
 Share-based compensation expenses (1)                        9.3                4.4                3.5
 Acquisition and preopening expenses (2)(3)                     -                  -                9.3
 Property closure/reopening expenses (4)(5)                     -               11.5                  -
 Impairment charges (6)                                       5.8               24.7                1.9
 Government grants and federal tax credits (7)              (10.7)              (7.0)                 -
 Insurance proceeds (8)                                         -               (1.8)                 -
Total Adjusted EBITDA                                   $    35.1          $   (71.6)         $   155.2

The following tables present our reconciliation of Adjusted EBITDA by reportable operating segment (in millions):

                                                             F2021                                                                       F2020
                                                 Hotels &                                                                    Hotels &
                               Theatres           Resorts           Corp. Items           Total           Theatres           Resorts            Corp. Items            Total

Operating profit (loss) $(27.6) $5.9 $(19.8) $(41.5) $(121.4) $(43.9) $(13.1) $(178.4)
Amortization and depreciation 51.7

              20.2                   0.3             72.1              53.5               21.1                   0.5              75.1
Share-based compensation (1)       2.3               1.7                   5.3              9.3               1.1                0.7                   2.6               4.4
Property closure/reopening
expenses (4) (5)                     -                 -                     -                -               5.8                5.7                     -              11.5
Impairment charges (6)             5.8                 -                     -              5.8              24.7                  -                     -              24.7
Government grants and federal
tax credits (7)                   (7.2)             (3.4)                 (0.1)           (10.7)             (5.8)              (1.2)                    -              (7.0)
Insurance proceeds (8)               -                 -                     -                -                 -                  -                  (1.8)             (1.8)
Adjusted EBITDA               $   24.9          $   24.4          $      (14.3)         $  35.1          $  (42.2)         $   (17.6)         $      (11.8)         $  (71.6)


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                                                                                                      F2019
                                                                                          Hotels &
                                                                        Theatres           Resorts           Corp. Items           Total
Operating income (loss)                                                $   76.9          $   10.1          $      (18.8)         $  68.2
Depreciation and amortization                                              51.2              20.4                   0.6             72.3
Share-based compensation (1)                                                   0.9               0.6                   2.1              3.5
Acquisition/preopening expenses (2)(3)                                         2.5               6.8                   0.0              9.3
Impairment charges (6)                                                         1.9               0.0                   0.0              1.9
Adjusted EBITDA                                                        $  133.3          $   37.9          $      (16.0)         $ 155.2

(1) Non-cash charge related to stock-based compensation programs.

(2) Acquisition and pre-opening costs related to the Movie Tavern
acquisition.

(3) Pre-opening costs and initial start-up losses related to the conversion of the InterContinental Milwaukee at Sainte Kate® – The Hotel des Arts.

(4)Reflects nonrecurring costs related to the required closure of all of our
movie theatres due to the COVID-19 pandemic, plus subsequent nonrecurring costs
related to reopening theatres.

(5)Reflects nonrecurring costs related to the closure of our hotels and resorts
due to reduced occupancy as a result of the COVID-19 pandemic, plus subsequent
nonrecurring costs related to reopening hotels.

(6)Non-cash impairment charges related to two operating theatres, three
permanently closed theatres and surplus theatre real estate for the fiscal 2021
periods and intangible assets (trade name) and several theatre locations for the
fiscal 2020 and fiscal 2019 periods.

(7) Reflects one-time government grants and federal tax credits provided to our theaters and hotels for COVID-19 pandemic relief.

(8)Reflects non-recurring net insurance proceeds received for insurance claims related to COVID-19.

The following table sets forth Adjusted EBITDA by reportable operating segment
for the last three fiscal years (in millions, except for variance percentage):

                                                      F21 v. F20                                F20 v. F19
                      F2021        F2020          Amt.           Pct.         F2019         Amt.           Pct.

                                                   (in millions, except percentages)
Theatres             $ 24.9      $ (42.2)     $     67.1       (159.1) %    $ 133.3      $  (175.5)      (131.6) %
Hotels and resorts     24.4        (17.6)           42.0       (239.0) %       37.9          (55.5)      (146.3) %
Corporate items       (14.3)       (11.8)           (2.4)        20.5  %      (16.0)           4.2        (26.3) %

Adjusted EBITDA $35.1 $(71.6) 106.7 (149.0)% $155.2 (226.7) (146.1)%


Our theatre division returned to positive Adjusted EBITDA during fiscal 2021 due
to increased attendance, increased revenues per person, and strong cost
controls, as described in the Theatres section above. Our hotels and resorts
division returned to positive Adjusted EBITDA during fiscal 2021 due to improved
occupancy percentages and ADR, and strong cost controls, as described in the
Hotels and Resorts section above. As a result, we were pleased to report
positive consolidated Adjusted EBITDA during fiscal 2021 as we continue to
recover from the pandemic.


Cash and capital resources

Liquidity

Our movie theatre and hotels and resorts businesses, when open and operating
normally, 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. Under normal circumstances,
we believe that these relatively consistent and predictable cash sources, as
well as the availability of unused credit lines, would be adequate to support
the ongoing operational liquidity needs of our businesses. A detailed
description of our liquidity as of December 30, 2021 is described in detail
above in the "Impact of the COVID-19 Pandemic" section of this MD&A.
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Maintaining and protecting a strong balance sheet has always been a core value
of The Marcus Corporation during our 86-year history, and, despite the COVID-19
pandemic, our financial position remains strong. As of December 30, 2021, we had
a cash balance of approximately $17.7 million, $221.4 million of availability
under our $225.0 million revolving credit facility, and our
debt-to-capitalization ratio (including short-term borrowings) was 0.37. With
our strong liquidity position, combined with the expected receipt of additional
state grants, income tax refunds and proceeds from the sale of surplus real
estate (discussed above), we believe we are positioned to meet our obligations
as they come due and continue to sustain our operations for one year from the
date of this report, as well as our longer-term capital requirements for periods
beyond one year from the date of this report, even if our properties continue to
generate reduced revenues during these periods. We will continue to work to
preserve cash and maintain strong liquidity to endure the impacts of the global
pandemic, even if it continues for a prolonged period of time.

credit agreement

On January 9, 2020, we entered into a Credit Agreement with several banks,
including JPMorgan Chase Bank, N.A., as Administrative Agent, and U.S. Bank
National Association, as Syndication Agent. On April 29, 2020, we entered into
the First Amendment, on September 15, 2020 we entered into the Second Amendment,
and on July 13, 2021, we entered into the Third Amendment (the Credit Agreement,
as amended by the First Amendment, the Second Amendment and the Third Amendment,
hereinafter referred to as the "Credit Agreement").

The Credit Agreement provides for a revolving credit facility that matures on
January 9, 2025 with an initial maximum aggregate amount of availability of $225
million. We may request an increase in the aggregate amount of availability
under the Credit Agreement by an aggregate amount of up to $125 million by
increasing the revolving credit facility or adding one or more tranches of term
loans. Our ability to increase availability under the Credit Agreement is
subject to certain conditions, including, among other things, the absence of any
default or event of default or material adverse effect under the Credit
Agreement. In conjunction with the First Amendment, we also added an initial
$90.8 million term loan facility that was scheduled to mature on September 22,
2021. In conjunction with the Third Amendment entered into early in our fiscal
2021 third quarter, the term loan facility was reduced to $50.0 million and the
maturity date was extended to September 22, 2022.

Borrowings under the Credit Agreement generally bear interest at a variable rate
equal to: (i) LIBOR, subject to a 1% floor, plus a specified margin based upon
our consolidated debt to capitalization ratio as of the most recent
determination date; or (ii) the base rate (which is the highest of (a) the prime
rate, (b) the greater of the federal funds rate and the overnight bank funding
rate plus 0.50% or (c) the sum of 1% plus one-month LIBOR), subject to a 1%
floor, plus a specified margin based upon our consolidated debt to
capitalization ratio as of the most recent determination date. In addition, the
Credit Agreement generally requires us to pay a facility fee equal to 0.125% to
0.25% of the total revolving commitment, depending on our consolidated debt to
capitalization ratio, as defined in the Credit Agreement. However, pursuant to
the First Amendment and the Second Amendment: (A) in respect of revolving loans,
(1) we are charged a facility fee equal to 0.40% of the total revolving credit
facility commitment and (2) the specified margin is 2.35% for LIBOR borrowings
and 1.35% for ABR borrowings, which facility fee rate and specified margins will
remain in effect until the end of the first fiscal quarter ending after the end
of any period in which any portion of the term loan facility remains outstanding
or the testing of any financial covenant in the Credit Agreement is suspended
(the "specified period"); and (B) in respect of term loans, the specified margin
is 2.75% for LIBOR borrowings and 1.75% for ABR borrowings, in each case, at all
times.

The Credit Agreement contains various restrictions and covenants applicable to
us and certain of our subsidiaries. Among other requirements, the Credit
Agreement (a) limits the amount of priority debt (as defined in the Credit
Agreement) held by our restricted subsidiaries to no more than 20% of our
consolidated total capitalization (as defined in the Credit Agreement), (b)
limits our permissible consolidated debt to capitalization ratio to a maximum of
0.55 to 1.0, (c) requires us to maintain a consolidated fixed charge coverage
ratio of at least 3.0 to 1.0 as of the end of the fiscal quarter ending March
30, 2023 and each fiscal quarter thereafter, (d) restricts our ability and
certain of our subsidiaries' ability to incur additional indebtedness, pay
dividends and other distributions (the restriction on dividends and other
distributions does not apply to subsidiaries), and make voluntary prepayments on
or defeasance of our 4.02% Senior Notes due August 2025, 4.32% Senior Notes due
February 2027, the notes or certain other convertible securities, (e) requires
our consolidated EBITDA not to be less than or equal to (i) $10 million as of
December 30, 2021 for the two consecutive fiscal quarters then ending, (ii) $25
million as of March 31, 2022 for the three consecutive fiscal quarters then
ending, (iii) $50 million as of June 30, 2022 for the four consecutive fiscal
quarters then ending, (iv) $65 million as of September 29, 2022 for the four
consecutive fiscal quarters then ending, or (v) $70 million as of December 29,
2022 for the four consecutive fiscal quarters then ending, (f) requires our
consolidated liquidity not to be less than or equal to (i) $100 million as of
September 30, 2021,
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(ii) $100 million as of December 30, 2021, (iii) $100 million as of March 31,
2022, (iv) $100 million as of June 30, 2022, or (v) $50 million as of the end of
any fiscal quarter thereafter until and including the fiscal quarter ending
December 29, 2022; however, each such required minimum amount of consolidated
liquidity would be reduced to $50 million for each such testing date if the
initial term loans are paid in full as of such date, and (g) prohibits us and
certain of our subsidiaries from incurring or making capital expenditures, in
the aggregate for us and such subsidiaries, (i) during fiscal 2021 in excess of
the sum of $40.0 million plus certain adjustments, or (ii) during our 2022
fiscal year in excess of $50 million plus certain adjustments.

Pursuant to the Credit Agreement, we are required to apply net cash proceeds
received from certain events, including certain asset dispositions, casualty
losses, condemnations, equity issuances, capital contributions, and the
incurrence of certain debt, to prepay outstanding term loans, with the exception
that we are allowed to sell certain surplus real estate up to $29 million
without prepaying the outstanding term loans. In addition, if, at any time
during the specified period, we and certain of our subsidiaries' aggregate
unrestricted cash on hand exceeds $75 million, the Credit Agreement requires us
to prepay revolving loans under the Credit Agreement by the amount of such
excess, without a corresponding reduction in the revolving commitments under the
Credit Agreement.

In connection with the Credit Agreement: (i) we and certain of our subsidiaries
have pledged, subject to certain exceptions, security interests and liens in and
on (a) substantially all of their respective personal property assets and (b)
certain of their respective real property assets, in each case, to secure the
Credit Agreement and related obligations; and (ii) certain of our subsidiaries
have guaranteed our obligations under the Credit Agreement. The foregoing
security interests, liens and guaranties will remain in effect until the
Collateral Release Date (as defined in the Credit Agreement).

The Credit Agreement contains customary events of default. If an event of
default under the Credit Agreement occurs and is continuing, then, among other
things, the lenders may declare any outstanding obligations under the Credit
Agreement to be immediately due and payable and exercise rights and remedies
against the pledged collateral.

4.02% Senior Bonds and 4.32% Senior Bonds

On June 27, 2013, we entered into a Note Purchase Agreement (the "4.02% Senior
Notes Agreement") with the several purchasers party to the 4.02% Senior Notes
Agreement, pursuant to which we issued and sold $50 million in aggregate
principal amount of our 4.02% Senior Notes due August 14, 2025 (the "4.02%
Notes") in a private placement exempt from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"). We used the net
proceeds from the issuance and sale of the 4.02% Notes to reduce existing
borrowings under our revolving credit facility and for general corporate
purposes. On December 21, 2016, we entered into a Note Purchase Agreement (the
"4.32% Senior Notes Agreement") with the several purchasers party to the 4.32%
Senior Notes Agreement, pursuant to which we issued and sold $50 million in
aggregate principal amount of our 4.32% Senior Notes due February 22, 2027 (the
"4.32% Notes" and the 4.02% Notes, are together referred to hereafter as the
"Notes") in a private placement exempt from the registration requirements of the
Securities Act. We used the net proceeds of the sale of the 4.32% Notes to repay
outstanding indebtedness and for general corporate purposes.

On July 13, 2021 we entered into an amendment to the 4.02% Senior Notes
Agreement (the "4.02% Fourth Amendment"). The 4.02% Senior Notes Agreement, as
previously amended and as amended by the 4.02% Fourth Amendment, is hereafter
referred to as the "Amended 4.02% Senior Notes Agreement." On July 13, 2021 we
entered into an amendment to the 4.32% Senior Notes Agreement (the "4.32% Fourth
Amendment"). The 4.32% Senior Notes Agreement, as previously amended and as
amended by the 4.32% Fourth Amendment, is hereafter referred to as the "Amended
4.32% Senior Notes Agreement". The Amended 4.02% Senior Notes Agreement and the
Amended 4.32% Senior Notes Agreement are together referred to hereafter as the
"Amended Senior Notes Agreements."

Interest on the 4.02% Notes is payable semi-annually in arrears on the 14th day
of February and August in each year and at maturity. Interest on the 4.32% Notes
is payable semi-annually in arrears on the 22nd day of February and August in
each year and at maturity. Beginning on August 14, 2021 and on the 14th day of
August each year thereafter to and including August 14, 2024, we will be
required to prepay $10 million of the principal amount of the 4.02% Notes.
Additionally, we may make optional prepayments at any time upon prior notice of
all or part of the Notes, subject to the payment of a make-whole amount (as
defined in the Amended Senior Notes Agreements, as applicable). Furthermore,
until the last day of the first fiscal quarter ending after the Collateral
Release Date (as defined in the Amended Senior Notes Agreements, as applicable),
we are required to pay a fee to each Note holder in an amount equal to 0.975% of
the aggregate principal amount of Notes held by such holder. Such fee is payable
quarterly (0.24375% of the aggregate principal amount of the Notes per quarter).
The entire outstanding principal balance of the 4.32% Notes will be due and
payable on February
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22, 2027. The entire unpaid principal balance of the 4.02% Notes will be due and
payable on August 14, 2025. The Notes rank pari passu in right of payment with
all of our other senior unsecured debt.

The Amended Senior Notes Agreements contain various restrictions and covenants
applicable to us and certain of our subsidiaries. Among other requirements, the
Amended Senior Notes Agreements (a) limit the amount of priority debt held by us
or by our restricted subsidiaries to 20% of our consolidated total
capitalization, (b) limit our permissible consolidated debt to 65% of our
consolidated total capitalization, (c) require us to maintain a consolidated
fixed charge coverage ratio of at least 2.5 to 1.0 as of the end of the fiscal
quarter ending March 30, 2023 and each fiscal quarter thereafter, (d) require
our consolidated EBITDA not to be less than or equal to (i) $10 million as of
December 30, 2021 for the two consecutive fiscal quarters then ending, (ii) $25
million as of March 31, 2022 for the three consecutive fiscal quarters then
ending, (iii) $50 million as of June 30, 2022 for the four consecutive fiscal
quarters then ending, (iv) $65 million as of September 29, 2022 for the four
consecutive fiscal quarters then ending, or (v) $70 million as of December 29,
2022 for the four consecutive fiscal quarters then ending, (e) require our
consolidated liquidity not to be less than or equal to (i) $100 million as of
September 30, 2021, (ii) $100 million as of December 30, 2021, (iii) $100
million as of March 31, 2022, (iv) $100 million as of June 30, 2022, or (v) $50
million as of the end of any fiscal quarter thereafter until and including the
fiscal quarter ending December 29, 2022; however, each such required minimum
amount of consolidated liquidity would be reduced to $50 million for each such
testing date if the initial term loans under the Credit Agreement are paid in
full as of such date, and (f) prohibit us and certain of our subsidiaries from
incurring or making capital expenditures, in the aggregate for us and such
subsidiaries, (i) during fiscal 2021 in excess of the sum of $40.0 million plus
certain adjustments, or (ii) during our 2022 fiscal year in excess of $50
million plus certain adjustments.

In connection with the Amended Senior Notes Agreements: (i) we and certain of
our subsidiaries have pledged, subject to certain exceptions, security interests
and liens in and on (a) substantially all of their respective personal property
assets and (b) certain of their respective real property assets, in each case,
to secure the Notes and related obligations; and (ii) certain subsidiaries of
ours have guaranteed our obligations under the Amended Senior Notes Agreements
and the Notes. The foregoing security interests, liens and guaranties will
remain in effect until the Collateral Release Date.

The Amended Senior Notes Agreements also contain customary events of default. If
an event of default under the Amended Senior Notes Agreements occurs and is
continuing, then, among other things, the purchasers may declare any outstanding
obligations under the Amended Senior Notes Agreements and the Notes to be
immediately due and payable and the Note holders may exercise their rights and
remedies against the pledged collateral.

Convertible Notes

On September 17, 2020, we entered into a purchase agreement (the "Purchase
Agreement") with J.P. Morgan Securities LLC, as representative of the several
initial purchasers (the "Initial Purchasers"), to issue and sell $100.05 million
aggregate principal amount of our 5.00% Convertible Senior Notes due 2025 (the
"Convertible Notes") of which an aggregate principal amount of $13.05 million of
Notes was issued pursuant to the exercise by the Initial Purchasers of their
option to purchase additional Convertible Notes. We offered and sold the
Convertible Notes to the Initial Purchasers in reliance on the exemption from
registration provided by Section 4(a) (2) of the Securities Act, and for resale
by the Initial Purchasers to persons reasonably believed to be qualified
institutional buyers pursuant to the exemption from registration provided by
Rule 144A under the Securities Act. We relied on these exemptions from
registration based in part on representations made by the Initial Purchasers in
the Purchase Agreement. The shares of the Company's common stock, par value
$1.00 per share (the "Common Stock"), issuable upon conversion of the
Convertible Notes, if any, have not been registered under the Securities Act and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. To the extent that any
shares of the Common Stock are issued upon conversion of the Convertible Notes,
they will be issued in transactions anticipated to be exempt from registration
under the Securities Act by virtue of Section 3(a)(9) thereof because no
commission or other remuneration is expected to be paid in connection with
conversion of the Convertible Notes and any resulting issuance of shares of the
Common Stock. The Purchase Agreement includes customary representations,
warranties and covenants by us and customary closing conditions. Under the terms
of the Purchase Agreement, we agreed to indemnify the Initial Purchasers against
certain liabilities.

The Convertible Notes were issued pursuant to an indenture (the "Indenture"),
dated September 22, 2020, between our company and U.S. Bank National
Association, as trustee. The net proceeds from the sale of the Convertible Notes
were approximately $78.6 million (after deducting the Initial Purchasers' fees
and our estimated fees and expenses related to the offering and the cost of the
capped call transactions). We used approximately $16.9 million of net proceeds
from the offering to pay the cost of the Capped Call Transactions (as defined
below). We used the remainder of the net proceeds from the offering to repay
borrowings under our revolving credit facility and for general corporate
purposes. The
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Convertible Notes are senior unsecured obligations and rank (i) senior in right
of payment to any of our indebtedness that is expressly subordinated in right of
payment to the Convertible Notes; (ii) equal in right of payment to any of our
unsecured indebtedness that is not so subordinated; (iii) effectively junior in
right of payment to any of our secured indebtedness to the extent of the value
of the assets securing such indebtedness; and (iv) structurally junior to all
indebtedness and other liabilities (including trade payables) of our
subsidiaries.

The Convertible Notes bear interest from September 22, 2020 at a rate of 5.00%
per year. Interest will be payable semiannually in arrears on March 15 and
September 15 of each year, beginning on March 15, 2021. The Convertible Notes
may bear additional interest under specified circumstances relating to our
failure to comply with our reporting obligations under the Indenture or if the
Convertible Notes are not freely tradable as required by the Indenture. The
Convertible Notes will mature on September 15, 2025, unless earlier repurchased
or converted. Prior to March 15, 2025, the Convertible Notes will be convertible
at the option of the holders only under the following circumstances: (i) during
any fiscal quarter commencing after the fiscal quarter ending on December 31,
2020 (and only during such fiscal quarter), if the last reported sale price of
the Common Stock for at least 20 trading days (whether or not consecutive)
during a period of 30 consecutive trading days ending on, and including, the
last trading day of the immediately preceding fiscal quarter is greater than or
equal to 130% of the conversion price on each applicable trading day; (ii)
during the five business day period immediately after any five consecutive
trading day period, or the measurement period, in which the trading price per
$1,000 principal amount of the Convertible Notes for each trading day of the
measurement period was less than 98% of the product of the last reported sale
price of the Common Stock and the conversion rate on each such trading day; or
(iii) upon the occurrence of specified corporate events. On or after March 15,
2025, the Convertible Notes will be convertible at the option of the holders at
any time until the close of business on the second scheduled trading day
immediately preceding the maturity date.

Upon conversion, the Convertible Notes may be settled, at our election, in cash,
shares of Common Stock or a combination thereof. The initial conversion rate is
90.8038 shares of Common Stock per $1,000 principal amount of the Convertible
Notes (equivalent to an initial conversion price of approximately $11.01 per
share of Common Stock), representing an initial conversion premium of
approximately 22.5% to the $8.99 last reported sale price of the Common Stock on
The New York Stock Exchange on September 17, 2020. If we undergo certain
fundamental changes, holders of Convertible Notes may require us to repurchase
for cash all or part of their Convertible Notes for a purchase price equal to
100% of the principal amount of the Convertible Notes to be repurchased, plus
accrued and unpaid interest to, but excluding, the fundamental change repurchase
date. In addition, if a make-whole fundamental change occurs prior to the
maturity date, we will, under certain circumstances, increase the conversion
rate for holders who convert Convertible Notes in connection with such
make-whole fundamental change. We may not redeem the Convertible Notes before
maturity and no "sinking fund" is provided for the Convertible Notes. The
Indenture includes covenants customary for securities similar to the Convertible
Notes, sets forth certain events of default after which the Convertible Notes
may be declared immediately due and payable and sets forth certain types of
bankruptcy or insolvency events of default involving our company and certain of
our subsidiaries after which the Convertible Notes become automatically due and
payable.

During our fiscal 2021 second, third and fourth quarters, and our fiscal 2022
first quarter, the Convertible Notes were (are) eligible for conversion at the
option of the holders as the last reported sale price of the Common Stock was
greater than or equal to 130% of the applicable conversion price for at least 20
trading days during the last 30 consecutive trading days ending on the last
trading day of the preceding fiscal quarter. We have the ability to settle the
conversion in Common Stock.

Capped call transactions

In connection with the pricing of the Convertible Notes on September 17, 2020,
and in connection with the exercise by the Initial Purchasers of their option to
purchase additional Convertible Notes on September 18, 2020, we entered into
privately negotiated Capped Call Transactions (the "Capped Call Transactions")
with certain of the Initial Purchasers and/or their respective affiliates and/or
other financial institutions (the "Capped Call Counterparties"). The Capped Call
Transactions are expected generally to reduce potential dilution of our common
stock upon any conversion of the Convertible Notes and/or offset any cash
payments we are required to make in excess of the principal amount of such
converted Convertible Notes, as the case may be, in the event that the market
price per share or our common stock, as measured under the terms of the Capped
Call Transactions, is greater than the strike price of the Capped Call
Transactions, which initially corresponds to the conversion price of the
Convertible Notes and is subject to anti-dilution adjustments substantially
similar to those applicable to the conversion rate of the Convertible Notes. If,
however, the market price per share of our common stock, as measured under the
terms of the Capped Call Transactions, exceeds the cap price of the Capped Call
Transactions, there would nevertheless be dilution to the extent that such
market price exceeds the cap price of
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the Capped Call Transactions. The cap price of the Capped Call Transactions will
initially be $17.98 per share (in no event shall the cap price be less than the
strike price of $11.0128), which represents a premium of 100% over the last
reported sale price of the Common Stock of $8.99 per share on The New York Stock
Exchange on September 17, 2020, and is subject to certain adjustments under the
terms of the Capped Call Transactions. The Capped Call Transactions are separate
transactions entered into by us with the Capped Call Counterparties, are not
part of the terms of the Convertible Notes and will not change the rights of
holders of the Convertible Notes under the Convertible Notes and the Indenture.

Summary

Our long-term debt has scheduled annual principal payments, net of amortization
of debt issuance costs, of $11.0 million and $11.0 million in fiscal 2022 and
fiscal 2023, respectively. We believe that the actions we have taken over the
past two years will allow us to have sufficient liquidity to meet our
obligations as they come due and to comply with our debt covenants for at least
12 months from the issuance date of the consolidated financial statements.
However, future compliance with our debt covenants could be impacted if we are
unable to return to closer-to-normal operations as currently expected, which
could be impacted by matters that are not entirely in our control, such as the
continuation of protective actions that federal, state and local governments
have taken, the impact of any new variants of COVID-19 on customer behavior and
the timing of new movie releases (as described in the Impact of the COVID-19
Pandemic section of this MD&A). Future compliance with our debt covenants could
also be impacted if the speed of recovery of our theatres and hotels and resorts
businesses is slower than currently expected. For example, our current
expectations are that our theatre division will continue to improve during
fiscal 2022 (but still report results below comparable periods in fiscal 2019),
before beginning to progressively return to closer-to-normal performance as we
enter fiscal 2023. Our current expectations for our hotels and resorts division
are that we will continue to show improvement in each succeeding quarter
compared to the prior year, but continue to underperform compared to
pre-COVID-19 pandemic years. We do not expect to return to pre-COVID-19
occupancy levels during fiscal 2022 due to an expected lag in business and group
travel. It is possible that the impact of COVID-19 may be greater than currently
expected across one or both of our divisions such that we may be unable to
comply with our debt covenants in future periods. In such an event, we would
either seek covenant waivers or attempt to amend our covenants, though there is
no certainty that we would be successful in such efforts.

Financial condition

Fiscal 2021 vs. Fiscal 2020

Net cash provided by operating activities totaled $46.3 million during fiscal
2021, compared to net cash used in operating activities of $68.6 million during
fiscal 2020, an increase of $114.8 million. The increase in net cash provided by
operating activities in fiscal 2021 was due primarily to a reduced net loss and
the favorable timing in the collection of government grant receivables, receipt
of refundable income taxes and payment of accounts payable, accrued compensation
and other accrued liabilities, partially offset by the unfavorable timing in the
collection of accounts receivable during fiscal 2021.

Net cash provided by investing activities during fiscal 2021 totaled $10.9
million, compared to net cash used in investing activities during fiscal 2020 of
$12.1 million, an increase of $23.0 million. The increase in net cash provided
by investing activities was primarily the result of a decrease in capital
expenditures, the receipt of $22.1 million in proceeds from disposals of
property, equipment and other assets during fiscal 2021 (compared to $4.5
million of similar proceeds in fiscal 2020), and the receipt of $11.4 million in
conjunction with collection of a split dollar life insurance policy receivable,
partially offset by the fact we received $5.2 million in proceeds from the sale
of trading securities during fiscal 2020 and contributed $2.4 million to the
Kimpton Hotel Monaco Pittsburgh joint venture in fiscal 2021. We did not incur
any acquisition-related capital expenditures during fiscal 2021 or fiscal 2020.

Total cash capital expenditures (including normal continuing capital maintenance
and renovation projects) totaled $17.1 million during fiscal 2021 compared to
$21.4 million during fiscal 2020, a decrease of $4.3 million, or 20.0%. We
incurred capital expenditures of approximately $1.8 million during fiscal 2020
related to development costs of a proposed new theatre, but we subsequently
abandoned plans to build this theatre. We did not incur any capital expenditures
related to developing new theatres in fiscal 2021, nor did we did incur any
capital expenditures related to developing new hotels during either period. We
incurred approximately $10.3 million of capital expenditures in our theatre
division during fiscal 2021, including costs associated with the renovation of a
theatre. We incurred approximately $15.8 million of capital expenditures during
fiscal 2020 in our theatre division, including costs associated with the
addition of four new screens, DreamLounger recliner seating and a SuperScreen
DLX® auditorium at an existing Movie Tavern theatre and the addition of
DreamLounger recliner seating to another existing Movie Tavern theatre. Also
during fiscal 2020, we began a project to
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add DreamLounger recliner seating, as well as Reel Sizzle and Take Five Lounge
outlets, to an existing Marcus Wehrenberg theatre (this project was completed in
fiscal 2021). We incurred approximately $6.8 million of capital expenditures in
our hotels and resorts division during fiscal 2021, including costs related to a
lobby renovation at the Grand Geneva. We also incurred capital expenditures in
our hotels and resorts division during fiscal 2020 of approximately $4.7
million, consisting primarily of maintenance capital projects at our
company-owned hotels and resorts. Our current estimated fiscal 2022 cash capital
expenditures, which we anticipate may be in the $35 - $45 million range, are
described in greater detail in the "Current Plans" section of this MD&A.

Net cash used in financing activities during fiscal 2021 totaled $47.2 million,
compared to net cash provided by financing activities during fiscal 2020 of
$69.1 million. During fiscal 2021, we increased our borrowings under our
revolving credit facility as needed to fund our cash needs and used excess cash
to reduce our borrowings under our revolving credit facility. As short-term
revolving credit facility borrowings became due, we replaced them as necessary
with new short-term revolving credit facility borrowings. As a result, we added
$178.5 million of new short-term revolving credit facility borrowings, and we
made $178.5 million of repayments on short-term revolving credit facility
borrowings during fiscal 2021. Net cash provided by operating and investing
activities during fiscal 2021 was used to repay $40.3 million of short-term
borrowings, including the early repayment of a portion of our term loan
facility, as described above. We did not issue any new long-term debt during
fiscal 2021.

During the first quarter of fiscal 2020, at the onset of the pandemic, we drew
down on the full amount available under our revolving credit facility (after
taking into consideration outstanding letters of credit that reduce revolver
availability). We also incurred $90.8 million of new short-term borrowings early
in our fiscal 2020 second quarter and issued $100.05 million in convertible
notes in our fiscal 2020 third quarter, the majority of which was used to repay
existing borrowings under our revolving credit facility. Net cash provided by
financing activities during fiscal 2020 was reduced by $16.9 million of capped
call transactions. As a result, we added $221.5 million of new short-term
revolving credit facility borrowings, and we made $302.5 million of repayments
on short-term revolving credit facility borrowings during fiscal 2020 (net
decrease in borrowings on our credit facility of $81.0 million).

We received $6.7 million in proceeds from borrowings against the cash surrender
value of a life insurance policy during fiscal 2021. We received Payroll
Protection Program ("PPP") loan proceeds during the second quarter of fiscal
2020, the majority of which were used for qualifying expenses during such
quarter that we believed would result in forgiveness of the loan under
provisions of the CARES Act. During the third quarter of fiscal 2021, we
received notification that qualifying expenses for all of our PPP loans were
forgiven. The portion of the PPP loan proceeds that were not used for qualifying
expenses totaling approximately $3.4 million contributed to net cash provided by
financing activities during fiscal 2020.

Principal payments on long-term debt were approximately $10.7 million during
fiscal 2021, including a $10.0 million installment payment on senior notes,
compared to payments of $9.4 million during fiscal 2020, which included a $9.0
million final payment on senior notes that matured in April 2020. We incurred
$0.2 million and $7.6 million in debt issuance costs during fiscal 2021 and
fiscal 2020, respectively.

Our debt-to-capitalization ratio (including short-term borrowings but excluding
our finance and operating lease obligations) was 0.37 at December 30, 2021,
compared to 0.37 at December 31, 2020. A change in the accounting for our
convertible senior notes (described in Note 1 of the notes to our consolidated
financial statements included in this annual report on Form 10-K) contributed to
the increase in our debt-to-capitalization ratio. Based upon our current
expectations for our fiscal 2022 operating results and capital expenditures, we
anticipate that our total long-term debt and debt-to-capitalization ratio may
modestly decrease during fiscal 2022. Our actual total long-term debt and
debt-to-capitalization ratio at the end of fiscal 2022 are dependent upon, among
other things, our actual operating results, capital expenditures, asset sales
proceeds and potential equity transactions during the year.

During fiscal 2021 and fiscal 2020 we did not repurchase any shares of our
common stock in the open market. As of December 30, 2021, approximately 2.7
million shares of our common stock remained available for repurchase under prior
Board of Directors repurchase authorizations. Under these authorizations, we may
repurchase shares of our common stock from time to time in the open market,
pursuant to privately-negotiated transactions or otherwise, depending upon a
number of factors, including prevailing market conditions.

We did not make any dividend payments during fiscal 2021. We made one quarterly
dividend payment totaling $5.1 million during fiscal 2020 before suspending
dividends. Our Credit Agreement, as recently amended, required us to temporarily
suspend our quarterly dividend payments and prohibited us from repurchasing
shares of our common stock in
                                       52

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Contents

the open market through the end of fiscal 2021. The Credit Agreement also limits
the total amount of quarterly dividend payments or share repurchases during the
four subsequent quarters beginning with the first quarter of fiscal 2022 to no
more than $1.55 million per quarter, unless we have paid off the Term Loan A and
returned to compliance with prior financial covenants under the Credit Agreement
(specifically, the consolidated fixed charge coverage ratio), at which point we
have the ability to declare quarterly dividend payments and/or repurchase shares
of our common stock in the open market as we deem appropriate.

Contractual obligations, business commitments and future uses of cash

The following schedule details our contractual obligations at December 30, 2021
(in thousands):

                                                                  Payments Due by Period
                                                     Less Than                                                  After
                                    Total              1 Year           1-3 Years          4-5 Years           5 Years
Long-term debt                   $ 215,144          $  10,967          $  22,118          $ 124,346          $  57,713
Interest on fixed-rate long term
debt(1)                             41,368             10,710             18,254             10,095              2,309
Pension obligations                 46,827              1,697              3,734              4,561             36,835
Operating lease obligations        310,190             26,803             52,152             50,711            180,524
Finance lease obligations           23,794              3,404              6,218              5,714              8,458
Short-term borrowings               47,346             47,346                  -                  -                  -
Construction commitments            11,776             11,776                  -                  -                  -
Total contractual obligations    $ 696,445          $ 112,703          $ 102,476          $ 195,427          $ 285,839


________________
(1)Interest on variable-rate debt obligations is excluded due to significant
variations that may occur in each year related to the amount of variable-rate
debt and the accompanying interest rate.

Additional details describing our long-term debt are included in Note 7 to our consolidated financial statements.

As of December 30, 2021, we had no additional material purchase obligations
other than those created in the ordinary course of business related to property
and equipment, which generally have terms of less than 90 days. We had long-term
obligations related to our employee benefit plans, which are discussed in detail
in Note 10 to our consolidated financial statements. We have not included
uncertain tax obligations in the table of contractual obligations set forth
above due to uncertainty as to the timing of any potential payments.

From December 30, 2021we had no debt guarantee or financial lease obligations.

In connection with the mortgage loan obtained by the Kimpton Hotel Monaco
Pittsburgh ("Monaco") joint venture, we provided an environmental indemnity and
a "bad boy" guaranty that provides that the lender can recover losses from us
for certain bad acts of the Monaco joint venture, such as but not limited to
fraud, intentional misrepresentation, voluntary incurrence of prohibited debt,
prohibited transfers of the collateral, and voluntary bankruptcy of the Monaco
joint venture. Under the terms of the Monaco joint venture operating agreement,
Searchlight has agreed to fully indemnify us under the "bad boy" guarantees for
any losses other than those attributable to our own bad acts and has agreed to
indemnify us to its proportionate liability under the environmental liability.
Additional detail describing the Monaco joint venture is included in Note 13 to
our consolidated financial statements.

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