10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 27, 2015

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-12604

THE MARCUS CORPORATION

(Exact name of registrant as specified in its charter)

Wisconsin	39-1139844
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
100 East Wisconsin Avenue, Suite 1900 Milwaukee, Wisconsin	53202-4125
(Address of principal executive offices)	(Zip Code)
Registrant’s telephone number, including area code:  (414) 905-1000

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

Yes x No ¨

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

Yes x No ¨

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

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

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

Yes ¨ No x

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

COMMON STOCK OUTSTANDING AT SEPTEMBER 30, 2015 – 18,900,813

CLASS B COMMON STOCK OUTSTANDING AT SEPTEMBER 30, 2015 – 8,710,972

THE MARCUS CORPORATION

INDEX

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements:
	Consolidated Balance Sheets (August 27, 2015 and May 28, 2015)	3
	Consolidated Statements of Earnings (13 weeks ended August 27, 2015 and August 28, 2014)	5
	Consolidated Statements of Comprehensive Income (13 weeks ended August 27, 2015 and August 28, 2014)	6
	Consolidated Statements of Cash Flows (13 weeks ended August 27, 2015 and August 28, 2014)	7
	Condensed Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II – OTHER INFORMATION
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 4.	Mine Safety Disclosures	25
Item 6.	Exhibits	26
	Signatures	S-1

2

PART I - FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

THE MARCUS CORPORATION

Consolidated Balance Sheets

(in thousands, except share and per share data)	August 27, 2015		May 28, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	5,721	$	6,723
Restricted cash		9,014		8,760
Accounts and notes receivable, net of reserves of $245 and $245, respectively		19,829		16,339
Refundable income taxes		─		4,022
Deferred income taxes		3,093		2,997
Assets held for sale		17,395		–
Other current assets		6,670		6,732
Total current assets		61,722		45,573
Property and equipment:
Land and improvements		99,882		98,980
Buildings and improvements		609,828		633,946
Leasehold improvements		78,275		78,624
Furniture, fixtures and equipment		281,112		279,383
Construction in progress		4,140		8,392
Total property and equipment		1,073,237		1,099,325
Less accumulated depreciation and amortization		415,898		419,208
Net property and equipment		657,339		680,117
Other assets:
Investments in joint ventures		7,225		5,643
Goodwill		44,266		43,720
Other		34,422		33,989
Total other assets		85,913		83,352
TOTAL ASSETS	$	804,974	$	809,042

See accompanying condensed notes to consolidated financial statements.

3

THE MARCUS CORPORATION

Consolidated Balance Sheets

(in thousands, except share and per share data)	August 27, 2015			May 28, 2015
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	24,472		$	36,776
Income taxes		4,474			─
Taxes other than income taxes		14,537			15,099
Accrued compensation		9,919			15,354
Other accrued liabilities		32,880			35,220
Current portion of capital lease obligation		5,081			5,053
Current maturities of long-term debt		18,093			17,742
Total current liabilities		109,456			125,244
Capital lease obligation		17,044			18,317
Long-term debt		229,303			229,669
Deferred income taxes		48,155			47,502
Deferred compensation and other		42,839			42,075
Equity:
Shareholders’ equity attributable to The Marcus Corporation
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued		─			─
Common Stock, $1 par; authorized 50,000,000 shares; issued 22,478,541 shares at August 27, 2015 and May 28, 2015		22,479			22,479
Class B Common Stock, $1 par; authorized 33,000,000 shares; issued and outstanding 8,710,972 shares at August 27, 2015 and May 28, 2015		8,711			8,711
Capital in excess of par		55,907			55,539
Retained earnings		319,777			307,939
Accumulated other comprehensive loss		(5,349	)		(5,312	)
		401,525			389,356
Less cost of Common Stock in treasury (3,587,324 shares at August 27, 2015 and 3,636,098 shares at May 28, 2015)		(45,227	)		(45,577	)
Total shareholders' equity attributable to The Marcus Corporation		356,298			343,779
Noncontrolling interest		1,879			2,456
Total equity		358,177			346,235
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	804,974		$	809,042

See accompanying condensed notes to consolidated financial statements.

4

THE MARCUS CORPORATION

Consolidated Statements of Earnings

(in thousands, except per share data)	13 Weeks Ended
	August 27, 2015			August 28, 2014
Revenues:
Theatre admissions	$	48,222		$	41,345
Rooms		34,186			34,681
Theatre concessions		31,780			24,922
Food and beverage		18,809			16,155
Other revenues		16,193			14,666
Total revenues		149,190			131,769
Costs and expenses:
Theatre operations		41,679			34,863
Rooms		11,187			11,402
Theatre concessions		9,038			6,721
Food and beverage		14,762			12,063
Advertising and marketing		6,489			7,388
Administrative		14,566			12,392
Depreciation and amortization		10,426			9,078
Rent		2,193			2,154
Property taxes		3,821			3,906
Other operating expenses		9,173			9,113
Total costs and expenses		123,334			109,080
Operating income		25,856			22,689
Other income (expense):
Investment income		5			25
Interest expense		(2,401	)		(2,404	)
Gain (loss) on disposition of property, equipment and other assets		195			(6	)
Equity losses from unconsolidated joint ventures, net		(19	)		(41	)
		(2,220	)		(2,426	)
Earnings before income taxes		23,636			20,263
Income taxes		9,183			7,987
Net earnings		14,453			12,276
Net loss attributable to noncontrolling interests		(198	)		(156	)
Net earnings attributable to The Marcus Corporation	$	14,651		$	12,432
Net earnings per share – basic:
Common Stock	$	0.55		$	0.47
Class B Common Stock	$	0.50		$	0.43
Net earnings per share – diluted:
Common Stock	$	0.53		$	0.45
Class B Common Stock	$	0.49		$	0.42
Dividends per share:
Common Stock	$	0.105		$	0.095
Class B Common Stock	$	0.095		$	0.086

See accompanying condensed notes to consolidated financial statements.

5

THE MARCUS CORPORATION

Consolidated Statements of Comprehensive Income

(in thousands)	13 Weeks Ended
	August 27, 2015			August 28, 2014
Net earnings	$	14,453		$	12,276
Other comprehensive income (loss), net of tax:
Fair market value adjustment of interest rate swap, net of tax (benefit) effect of $(45) and $25, respectively		(66	)		40
Reclassification adjustment on interest rate swap included in interest expense, net of tax effect of $20 and $20, respectively		29			29
Other comprehensive income (loss)		(37	)		69
Comprehensive income		14,416			12,345
Comprehensive loss attributable to noncontrolling interests		(198	)		(156	)
Comprehensive income attributable to The Marcus Corporation	$	14,614		$	12,501

See accompanying condensed notes to consolidated financial statements.

6

THE MARCUS CORPORATION

Consolidated Statements of Cash Flows

	13 Weeks Ended
(in thousands)	August 27, 2015			August 28, 2014
OPERATING ACTIVITIES:
Net earnings	$	14,453		$	12,276
Adjustments to reconcile net earnings to net cash provided by operating activities:
Losses on investments in joint ventures		19			41
Distribution from joint venture		─			30
Loss (gain) on disposition of property, equipment and other assets		(195	)		6
Amortization of favorable lease right		83			83
Depreciation and amortization		10,426			9,078
Stock compensation expense		364			319
Deferred income taxes		617			90
Deferred compensation and other		965			709
Changes in operating assets and liabilities:
Accounts and notes receivable		(3,490	)		(2,748	)
Other current assets		44			(392	)
Accounts payable		(5,583	)		(3,317	)
Income taxes		8,540			7,219
Taxes other than income taxes		(562	)		163
Accrued compensation		(5,898	)		(4,728	)
Other accrued liabilities		(2,340	)		(2,224	)
Total adjustments		2,990			4,329
Net cash provided by operating activities		17,443			16,605
INVESTING ACTIVITIES:
Capital expenditures		(14,654	)		(13,074	)
Proceeds from disposals of property, equipment and other assets		1,183			25
Increase in restricted cash		(254	)		(776	)
Increase in other assets		(223	)		(459	)
Capital contribution in joint venture		─			(338	)
Purchase of interest in joint venture		(1,600	)		─
Net cash used in investing activities		(15,548	)		(14,622	)
FINANCING ACTIVITIES:
Debt transactions:
Proceeds from borrowings on revolving credit facility		69,500			32,500
Repayment of borrowings on revolving credit facility		(68,000	)		(32,500	)
Principal payments on debt		(1,515	)		(1,112	)
Equity transactions:
Treasury stock transactions, except for stock options		45			25
Exercise of stock options		266			1,003
Dividends paid		(2,814	)		(2,525	)
Distributions to noncontrolling interest		(379	)		(719	)
Net cash used in financing activities		(2,897	)		(3,328	)
Net decrease in cash and cash equivalents		(1,002	)		(1,345	)
Cash and cash equivalents at beginning of period		6,723			6,780
Cash and cash equivalents at end of period	$	5,721		$	5,435
Supplemental Information:
Interest paid, net of amounts capitalized	$	2,126		$	2,012
Income taxes paid, net		26			576
Change in accounts payable for additions to property and equipment		(6,721	)		(4,578	)

See accompanying condensed notes to consolidated financial statements.

7

THE MARCUS CORPORATION

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE 13 WEEKS ENDED AUGUST 27, 2015

1. General

Accounting Policies – Refer to the Company’s audited consolidated financial statements (including footnotes) for the fiscal year ended May 28, 2015, contained in the Company’s Annual Report on Form 10-K for such year, for a description of the Company’s accounting policies.

Basis of Presentation – The unaudited consolidated financial statements for the 13 weeks ended August 27, 2015 and August 28, 2014 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at August 27, 2015, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended May 28, 2015.

Depreciation and Amortization – Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $10,328,000 and $8,960,000 for the 13 weeks ended August 27, 2015 and August 28, 2014, respectively.

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

	Swap Agreements			Available for Sale Investments			Pension Obligation			Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 28, 2015	$	(17	)	$	(11	)	$	(5,284	)	$	(5,312	)
Other comprehensive loss before reclassifications		(66	)		-			-			(66	)
Amounts reclassified from accumulated other comprehensive loss (1)		29			-			-			29
Net other comprehensive loss		(37	)		-			-			(37	)
Balance at August 27, 2015	$	(54	)	$	(11	)	$	(5,284	)	$	(5,349	)

8

	Swap Agreements		Available for Sale Investments			Pension Obligation			Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 29, 2014	$	34	$	(11	)	$	(4,581	)	$	(4,558	)
Other comprehensive income before reclassifications		40		-			-			40
Amounts reclassified from accumulated other comprehensive loss (1)		29		-			-			29
Net other comprehensive income		69		-			-			69
Balance at August 28, 2014	$	103	$	(11	)	$	(4,581	)	$	(4,489	)

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

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

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

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

9

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands, except per share data)
Numerator:
Net earnings attributable to The Marcus Corporation	$	14,651	$	12,432
Denominator:
Denominator for basic EPS		27,573		27,347
Effect of dilutive employee stock options		309		266
Denominator for diluted EPS		27,882		27,613
Net earnings per share – basic:
Common Stock	$	0.55	$	0.47
Class B Common Stock	$	0.50	$	0.43
Net earnings per share – diluted:
Common Stock	$	0.53	$	0.45
Class B Common Stock	$	0.49	$	0.42

Equity – Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interests for the 13 weeks ended August 27, 2015 and August 28, 2014 was as follows:

	Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests
	(in thousands)
Balance at May 28, 2015	$	343,779		$	2,456
Net earnings attributable to The Marcus Corporation		14,651			–
Net loss attributable to noncontrolling interests		–			(198	)
Distributions to noncontrolling interests		–			(379	)
Cash dividends		(2,814	)		–
Exercise of stock options		266			–
Treasury stock transactions, except for stock options		45			–
Share-based compensation		364			–
Other		44			–
Other comprehensive loss, net of tax		(37	)		–
Balance at August 27, 2015	$	356,298		$	1,879

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	Total Shareholders’ Equity Attributable to The Marcus Corporation			Noncontrolling Interests
	(in thousands)
Balance at May 29, 2014	$	326,211		$	3,768
Net earnings attributable to The Marcus Corporation		12,432			–
Net loss attributable to noncontrolling interests		–			(156	)
Distributions to noncontrolling interests		–			(719	)
Cash dividends		(2,525	)		–
Exercise of stock options		1,003			–
Treasury stock transactions, except for stock options		25			–
Share-based compensation		319			–
Other		32			–
Other comprehensive income, net of tax		69			–
Balance at August 28, 2014	$	337,566		$	2,893

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

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

Level 1 – Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At August 27, 2015 and May 28, 2015, the Company’s $70,000 of available for sale securities were valued using Level 1 pricing inputs and were included in other current assets.

Level 2 – Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At August 27, 2015 and May 28, 2015, respectively, the $90,000 and $28,000 liability related to the Company’s interest rate swap contract was valued using Level 2 pricing inputs.

Level 3 – Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At August 27, 2015, none of the Company’s fair value measurements were valued using Level 3 pricing inputs. At May 28, 2015, $7,737,000 related to impaired assets was valued using Level 3 pricing inputs.

11

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

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands)
Service cost	$	197	$	175
Interest cost		328		311
Net amortization of prior service cost and actuarial loss		90		81
Net periodic pension cost	$	615	$	567

New Accounting Pronouncements – In April 2015, Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30), which requires an entity to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset, and requires the amortization of the costs be reported as interest expense. The new standard is effective for the Company in fiscal 2017 and the Company does not expect the adoption of this statement to have an impact on its overall financial position.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles when it becomes effective. The new standard is effective for the Company in fiscal 2018 and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is evaluating the effect that the guidance will have on its consolidated financial statements and related disclosures.

2. Derivatives and Hedging Activities

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

12

The Company entered into an interest rate swap agreement on February 28, 2013 covering $25,000,000 of floating rate debt, which expires January 22, 2018, and requires the Company to pay interest at a defined rate of 0.96% while receiving interest at a defined variable rate of one-month LIBOR (0.25% at August 27, 2015). The Company recognizes derivatives as either assets or liabilities on the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through earnings. The Company’s interest rate swap agreement is considered effective and qualifies as a cash flow hedge. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As of August 27, 2015, the interest rate swap was considered effective. The notional amount of the swap is $25,000,000 and the fair value of the swap was a liability of $90,000 and $28,000 as of August 27, 2015 and May 28, 2015, respectively, and is included in deferred compensation and other in the consolidated balance sheets. The Company does not expect the interest rate swap to have any material effect on earnings within the next 12 months.

3. Capital Lease Obligation

During fiscal 2012, the Company entered into a master licensing agreement with CDF2 Holdings, LLC, a subsidiary of Cinedigm Digital Cinema Corp (CDF2), whereby CDF2 purchased on the Company’s behalf, and then deployed and licensed back to the Company, digital cinema projection systems (the “systems”) for use by the Company in its theatres. As of August 27, 2015, 642 of the Company’s screens were utilizing the systems under a 10-year master licensing agreement with CDF2. Included in furniture, fixtures and equipment is $45,510,000 related to the digital systems as of August 27, 2015 and May 28, 2015, which is being amortized over the remaining estimated useful life of the assets. Accumulated amortization of the digital systems was $19,980,000 and $18,435,000 as of August 27, 2015 and May 28, 2015, respectively.

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

The Company’s capital lease obligation is being reduced as VPF’s are paid by the film distributors to CDF2. The Company has recorded the reduction of the obligation associated with the payment of VPF’s as a reduction of the interest related to the obligation and the amortization incurred related to the systems, as the payments represent a specific reimbursement of the cost of the systems by the studios. Based on the Company’s expected minimum number of eligible movies to be booked, the Company expects the obligation to be reduced by at least $5,081,000 within the next 12 months. This reduction will be recognized as an offset to amortization and is expected to offset the majority of the amortization of the systems.

13

4. Income Taxes

The Company’s effective income tax rate, adjusted for losses from noncontrolling interests, for the 13 weeks ended August 27, 2015 and August 28, 2014 was 38.6% and 39.1%, respectively. The Company does not include the income tax expense or benefit related to the net earnings or loss attributable to noncontrolling interests in its income tax expense as the entities are considered pass-through entities and, as such, the income tax expense or benefit is attributable to its owners.

5. Business Segment Information

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

Following is a summary of business segment information for the 13 weeks ended August 27, 2015 and August 28, 2014 (in thousands):

13 Weeks Ended August 27, 2015	Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	83,324	$	65,741	$	125		$	149,190
Operating income (loss)		18,060		11,512		(3,716	)		25,856
Depreciation and amortization		5,686		4,600		140			10,426

13 Weeks Ended August 28, 2014	Theatres		Hotels/ Resorts		Corporate Items			Total
Revenues	$	69,387	$	62,247	$	135		$	131,769
Operating income (loss)		14,854		11,004		(3,169	)		22,689
Depreciation and amortization		4,730		4,247		101			9,078

14

THE MARCUS CORPORATION

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

Special Note Regarding Forward-Looking Statements

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

RESULTS OF OPERATIONS

General

We report our consolidated and individual segment results of operations on a 52- or 53-week fiscal year ending on the last Thursday in May. Fiscal 2016 is a 52-week year, as was fiscal 2015. We divide our fiscal year into three 13-week quarters and a final quarter consisting of 13 or 14 weeks. Our primary operations are reported in the following two business segments: movie theatres and hotels and resorts.

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

	First Quarter
							Variance
	F2016			F2015			Amt.		Pct.
Revenues	$	149.2		$	131.8		$	17.4		13.2	%
Operating income		25.9			22.7			3.2		14.0	%
Other income (expense)		(2.2	)		(2.4	)		0.2		8.5	%
Net loss attributable to noncontrolling interests		0.2			0.2			–		–	%
Net earnings attributable to The Marcus Corp.		14.7			12.4			2.3		17.8	%
Net earnings per common share - diluted	$	0.53		$	0.45		$	0.08		17.8	%

Revenues increased during the first quarter of fiscal 2016 to a record level for the period due to increased revenues from both our theatre and our hotels and resorts divisions. Operating income (earnings before other income/expense and income taxes) and net earnings attributable to The Marcus Corporation increased during the first quarter of fiscal 2016 compared to the same period last year due to record operating results from both divisions. Operating results from our theatre division were favorably impacted by a stronger slate of movies during the fiscal 2016 first quarter compared to the same period last year, increased attendance resulting from positive customer response to our recent investments and pricing strategies, and increased concession revenues compared to the same period last year. Operating results from our hotels and resorts division were favorably impacted by strong cost controls and a higher average daily room rate during the fiscal 2016 first quarter compared to the same period last year.

We did not have any significant variations in investment income, interest expense or net equity losses from unconsolidated joint ventures during the first quarter of fiscal 2016 compared to the same period last year. We had a small $195,000 gain on the disposition of property, equipment and other assets during the first quarter of fiscal 2016 related to the sale of a former theatre. Changes in our borrowing levels due to variations in our operating results, capital expenditures, share repurchases and asset sale proceeds, among other items, may impact our actual reported interest expense in future periods. The timing of periodic sales of our property and equipment varies from quarter to quarter, resulting in variations in our reported gains or losses on disposition of property and equipment.

We reported income tax expense for the first quarter of fiscal 2016 of $9.2 million, an increase of $1.2 million, or 15.0%, compared to income tax expense of $8.0 million for the same period of fiscal 2015. Our fiscal 2016 first quarter effective income tax rate, after adjusting for a loss from noncontrolling interests that is not tax-effected because the entities involved are tax pass-through entities, was 38.5%, compared to our fiscal 2015 first quarter effective income tax rate of 39.1%. We currently anticipate that our effective income tax rate for the remaining quarters of fiscal 2016 will remain close to our historical 39-40% average, excluding any changes in our liability for unrecognized tax benefits or potential changes in federal and state income tax rates. Our actual fiscal 2016 effective income tax rate may be different from our estimated quarterly rates depending upon actual facts and circumstances.

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The operating results of two majority-owned hotels, The Skirvin Hilton and The Cornhusker, A Marriott Hotel, are included in the hotels and resorts division revenue and operating income, and the after-tax net earnings or loss attributable to noncontrolling interests is deducted from or added to net earnings on the consolidated statements of earnings. We reported a net loss attributable to noncontrolling interests of $198,000 during the first quarter of fiscal 2016 compared to a loss of $156,000 during the first quarter of fiscal 2015.

Theatres

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

	First Quarter
							Variance
	F2016			F2015			Amt.		Pct.
Revenues	$	83.3		$	69.4		$	13.9		20.1	%
Operating income		18.1			14.9			3.2		21.6	%
Operating margin (% of revenues)		21.7	%		21.4	%

Consistent with the seasonal nature of the motion picture exhibition industry, the first quarter is typically the strongest period of our fiscal year for our theatre division due to the traditionally strong summer movie season. Our theatre division revenues and operating income increased during the first quarter of fiscal 2016 to a record level for such period due primarily to an increase in attendance compared to the same period in fiscal 2015, resulting in increased box office receipts. The fiscal 2016 first quarter also benefitted from a significant increase in our total concession revenues compared to the same period in fiscal 2015. Despite higher film costs during the period, our theatre division operating margin also increased during the first quarter of fiscal 2016 compared to the same period last year.

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

	First Quarter
					Variance
	F2016		F2015		Amt.		Pct.
Box office receipts	$	48.2	$	41.3	$	6.9		16.6	%
Concession revenues		31.8		24.9		6.9		27.5	%
Other revenues		3.3		3.2		0.1		6.5	%
Total revenues	$	83.3	$	69.4	$	13.9		20.1	%

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The increase in our box office receipts for the first quarter of fiscal 2016 compared to the same period last year was due primarily to an increase in theatre attendance. According to data received from Rentrak (a national box office reporting service for the theatre industry) and compiled by us to evaluate our fiscal 2016 first quarter results, United States box office receipts increased 10.1% during our fiscal 2016 first quarter, indicating that our box office receipts in the first quarter of fiscal 2016 outperformed the industry by 6.5 percentage points (the seventh consecutive quarter in which we have outperformed the industry average). We believe we significantly outperformed the industry average during our fiscal 2016 first quarter due to the recent investments we have made in new features and amenities in select theatres and our implementation of innovative operating and marketing strategies, including our $5 Tuesday promotion and our customer loyalty program. Nearly 60% of our company-owned, first-run theatres outperformed the industry average during our fiscal 2016 first quarter.

Our average ticket price increased 3.5% during the first quarter of fiscal 2016 compared to the same period last year. The increase was partially attributable to modest price increases we implemented in mid-October 2014, particularly at our DreamLounger^SM recliner seating locations. In addition, the fact that we have increased our number of premium large format (PLF) screens, with a corresponding price premium, also contributed to our increased average ticket price during the first quarter of fiscal 2016. The percentage of our total box office receipts attributable to 3D presentations also increased during the first quarter of fiscal 2016 compared to the same period last year due primarily to a higher than average 3D performance from our top summer film, Jurassic World, contributing to our higher average ticket price. The increase in average ticket price contributed approximately $1.6 million, or 23%, of the increase in our box office receipts during the first quarter of fiscal 2016 compared to the same period last year.

Our concession revenues increased during the first quarter of fiscal 2016 compared to the same period last year due in part to increased attendance at comparable theatres. In addition, our average concession revenues per person increased by 13.1% during our first quarter of fiscal 2016 compared to the same period last year. The increase in our average concession revenues per person contributed approximately $3.1 million, or approximately 45%, of the increase in our concession revenues during the first quarter of fiscal 2016 compared to the same period last year.

A change in concession product mix, including increased sales of non-traditional food and beverage items from our increased number of Take Five Lounge^SM and Zaffiro’s® Express outlets, as well as select concession price increases introduced in mid-October 2014, were the primary reasons for our increased average concession sales per person during the first quarter of fiscal 2016 compared to the same period last year. In addition, the fact that two of our top three films during the first quarter of fiscal 2016 were animated family movies (Inside Out and Minions), compared to a film slate during the first quarter of fiscal 2015 that was lacking in strong family-oriented movies, also likely contributed to a larger increase in concession sales per person during the first quarter of fiscal 2016. These types of films typically result in stronger concession sales compared to more adult-oriented films. Other revenues increased slightly during the first quarter of fiscal 2016 period compared to the first quarter of fiscal 2015, due primarily to an increase in internet surcharge ticketing fees.

Comparable theatre attendance increased 12.8% during the first quarter of fiscal 2016 compared to the same period last year due primarily to a stronger film slate compared to the same period last year. We also believe a combination of several additional factors contributed to this significant increase in attendance and our above-described industry outperformance. In addition to the $5 Tuesday promotion that continued to perform better than the prior year, our fiscal 2016 first quarter attendance was favorably impacted by increased attendance at 13 theatres that have added our spacious new DreamLounger electric all-recliner seating during the past two years. We also believe that we are beginning to recognize the benefits of our customer loyalty program, introduced in March 2014 and which now has over 1.25 million members.

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For the first quarter of fiscal 2016, the majority of our increase in box office receipts occurred during June and July, as comparisons to the prior year film product were more challenging in August. Our highest grossing films during the fiscal 2016 first quarter included Jurassic World, Inside Out, Minions, Ant-Man and Mission Impossible – Rogue Nation. The film slate during the first quarter of fiscal 2016 was particularly weighted towards strong blockbuster movies, as evidenced by the fact that our top five films during our fiscal 2016 first quarter accounted for 50% of our total box office results compared to 36% for the top five films during the first quarter of last year, both expressed as a percentage of the total box office receipts for the period. This increase in summer blockbuster films had the effect of increasing 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.

September is typically the slowest month of the year for our theatre division, but film product for the second quarter of fiscal 2016 has, through the date of this report, produced box office results higher than the same period last year. Top performing films during this period have included Maze Runner: The Scorch Trials, Everest, Hotel Transylvania 2 and The Martian. Other films scheduled to be released this fall and during the upcoming Thanksgiving holiday period that may generate substantial box office interest include Pan, Bridge of Spies, The Peanuts Movie, the next James Bond film, Spectre, and The Hunger Games: Mockingjay – Part 2. The highest grossing films released during the second quarter last year included The Hunger Games: Mockingjay - Part 1, Gone Girl, Big Hero 6, The Maze Runner and Interstellar. Revenues for the theatre business and the motion picture industry in general are heavily dependent on the general audience appeal of available films, together with studio marketing, advertising and support campaigns and the maintenance of the current “windows” between the date a film is released in theatres and the date a motion picture is released to other channels, including video on-demand and DVD. These are factors over which we have no control.

We ended the first quarter of fiscal 2016 and fiscal 2015 with a total of 674 company-owned screens in 53 theatres and 11 managed screens in two theatres. We closed one six-screen budget-oriented theatre early in our fiscal 2016 second quarter. We opened one new Take Five Lounge outlet and two Zaffiro’s Express lobby dining outlets during the first quarter of fiscal 2016, bringing our total number of each concept to 14 and 16, respectively. We also began construction on an additional Take Five Lounge and two additional Zaffiro’s Express outlets at existing theatres. We have also commenced construction on the conversion of another theatre to DreamLounger recliner seating, as well as the construction of two new UltraScreen DLX® auditoriums to be added to an existing theatre. All of these new amenities are expected to open in November or December 2015. We anticipate beginning construction on additional DreamLounger conversions and SuperScreen DLX^SM conversions in the near future.

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Hotels and Resorts

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

	First Quarter
							Variance
	F2016			F2015			Amt.		Pct.
Revenues	$	65.7		$	62.2		$	3.5		5.6	%
Operating income		11.5			11.0			0.5		4.6	%
Operating margin (% of revenues)		17.5	%		17.7	%

Our first quarter is historically the strongest quarter of our fiscal year for our hotels and resorts division due to increased travel during the summer months at our predominantly Midwestern properties. Division revenues and operating income increased to record levels during our fiscal 2016 first quarter due to strong cost controls, and increased food and beverage revenues and average daily room rate compared to the same period last year. Our fiscal 2016 first quarter operating results were negatively impacted by approximately $300,000 of preopening and initial startup costs related to the June grand opening of our newly-renovated and rebranded AC Hotel Chicago Downtown.

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

	First Quarter(1)
							Variance
	F2016			F2015			Amt.			Pct.
Occupancy percentage		82.5	%		86.0	%		(3.5	)pts		-4.1	%
ADR	$	159.15		$	154.25		$	4.90			3.2	%
RevPAR	$	131.26		$	132.69		$	(1.43	)		-1.1	%

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

RevPAR increased at three of our nine company-owned properties during the first quarter of fiscal 2016 compared to the same period last year. According to data received from Smith Travel Research and compiled by us in order to evaluate our fiscal 2016 first quarter results, comparable “upper upscale” hotels throughout the United States experienced an increase in RevPAR of 2.7% during our fiscal 2016 first quarter compared to our fiscal 2015 first quarter, greater than the decrease of 1.1% we experienced.

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We believe our RevPAR decreases during the first quarter of fiscal 2016 compared to the same period last year were primarily the result of reduced occupancy from our group business customer segment, in addition to increases in room supply in certain of our markets. We believe the reduced group occupancy, primarily at two of our more group-oriented hotels, does not reflect a larger trend, but rather was related to difficult comparisons to the prior year during June and July at those particular properties. We base that conclusion on the fact that our overall business improved significantly later in the summer and the same two hotels most impacted by reduced group occupancy during the first quarter of fiscal 2016 also had the largest increase in group room revenue bookings for future periods – something commonly referred to in the hotels and resorts industry as “group pace.”

An increase in our ADR partially offset our occupancy percentage declines during the first quarter of fiscal 2016 compared to the same period last year. We have previously stated that we believe one of the best ways to increase our operating margins in future periods is to increase our ADR, and we are actively pursuing that strategy, even at the expense of reduced occupancy percentages in some cases. We anticipate that our rebranded AC Hotel Chicago Downtown will be an example of this strategy in future periods, as we have seen a significant increase in ADR at that property since the new brand was introduced. Our increase in overall ADR for our company-owned hotels would have been even greater if not for the fact that two hotels with reduced group business were more aggressive with lower ADR during the first quarter of fiscal 2016 to make up for lost occupancy from group business. Our other seven company-owned and operated hotels all reported increased ADR during the fiscal 2016 first quarter compared to the same period last year.

We believe our fiscal 2016 first quarter operating income increased compared to the same period last year despite a small decline in room revenues due to three primary factors. As described above, properly-managed increases in ADR, even with a decrease in occupancy percentage, may result in better profitability. In addition, during the first quarter of fiscal 2016, we made a decision at our largest property, the Grand Geneva Resort & Spa, to focus on growing total hotel revenues through bookings that generate a higher ancillary spend, meaning that we sacrificed some room revenue dollars to achieve higher total spend throughout the resort. This particular strategy contributed to our increase in food and beverage revenues during the first quarter of fiscal 2016 compared to the same period last year. Finally, we believe strong cost controls at our hotels also contributed to our increased operating income during the first quarter of fiscal 2016 compared to the same period last year.

We currently expect to report RevPAR increases that generally track the overall industry trends in the remaining quarters of our fiscal 2016. We are encouraged by the fact that our group booking pace for fiscal 2016 is running ahead of fiscal 2015 as of the date of this report. The new AC Hotel Chicago Downtown, while still ramping up, has shown good progress in booking activity through the date of this report and will begin to have significantly easier comparisons during the second half of our fiscal year, coinciding with last year’s renovation period for that hotel. Whether the current positive trends in the hotel industry as a whole continue depends in large part on the economic environment in which we operate, as hotel revenues have historically tracked very closely with traditional macroeconomic statistics such as the Gross Domestic Product. We also continue to monitor hotel supply in our markets, as increased supply without a corresponding increase in demand may have a negative impact on our results.

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During the first quarter of fiscal 2016, we purchased the SafeHouse® in Milwaukee, Wisconsin, adding another restaurant to our portfolio. In addition to adding the existing spy-themed Milwaukee restaurant to our operating results (contributing to our increased fiscal 2016 first quarter food and beverage revenues), we will explore opportunities to expand this concept in the future.

Late in our fiscal 2016 first quarter, we announced an agreement to sell the Hotel Phillips in Kansas City, Missouri. The Hotel Phillips has historically been the smallest of our company-owned hotels, both in revenues and operating income. We believe the sale, which is scheduled to close in mid-October, is consistent with our strategy to continually evaluate each of our owned hotels to ensure we are maximizing shareholder value. We will continue to explore opportunities to monetize other existing owned hotels in the future. We will consider many factors as we actively review opportunities to execute this strategy, including income tax considerations, the ability to retain management, pricing and individual market considerations.

We have a number of additional potential growth opportunities that we are currently evaluating. The timing and nature of the opportunities may vary and include pure management contracts, management contracts with equity and joint venture investments.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our movie theatre and hotels and resorts businesses each generate significant and consistent daily amounts of cash, subject to previously-noted seasonality, because each segment’s revenue is derived predominantly from consumer cash purchases. We believe that these relatively consistent and predictable cash sources, as well as the availability of approximately $125 million of unused credit lines as of the end of our fiscal 2016 first quarter, will be adequate to support the ongoing operational liquidity needs of our businesses during the remainder of fiscal 2016.

Financial Condition

Net cash provided by operating activities increased by $800,000 to $17.4 million during the first quarter of fiscal 2016, compared to net cash provided by operating activities of $16.6 million during the first quarter of the prior year. The increase was due primarily to increased net earnings partially offset by the unfavorable timing in the payment of accounts payable and accrued compensation.

Net cash used in investing activities during the fiscal 2016 first quarter totaled $15.5 million, compared to $14.6 million during the fiscal 2015 first quarter. The increase in net cash used in investing activities was the result of increased capital expenditures compared to the first quarter of fiscal 2015 and a purchase of an interest in a joint venture (related to the new Capital District Marriott Hotel currently under development in Omaha, Nebraska), partially offset by increased proceeds from the disposals of property, equipment and other assets (related to the sale of a former theatre) compared to the first quarter of fiscal 2015. Total cash capital expenditures (including normal continuing capital maintenance and renovation projects) totaled $14.7 million during the first quarter of fiscal 2016 compared to $13.1 million during the first quarter of the prior year. Approximately $2.5 million of our capital expenditures during the first quarter of fiscal 2016 were related to the development of a new theatre that opened at the end of fiscal 2015. Other than in connection with our purchase of the SafeHouse during the first quarter of fiscal 2016, we did not incur any acquisition-related capital expenditures during the first quarter of fiscal 2016 or fiscal 2015.

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Fiscal 2016 first quarter cash capital expenditures included approximately $9.0 million incurred in our theatre division, including costs associated with the completion of several previously-described fiscal 2015 projects (our new Sun Prairie, Wisconsin theatre, DreamLounger recliner seating additions and new Take Five Lounge and Zaffiro’s Express outlets). We also incurred capital expenditures in our hotel division during the first quarter of fiscal 2016 of approximately $5.7 million, including costs associated with the completion of the renovation of the AC Hotel Chicago Downtown in Chicago, Illinois and our acquisition of the SafeHouse. Fiscal 2015 first quarter capital expenditures included approximately $7.7 million incurred in our theatre division, including costs associated with the completion of several fiscal 2014 projects (DreamLounger recliner seating additions and new Take Five Lounge and Zaffiro’s Express outlets). We also incurred capital expenditures in our hotel division during the first quarter of fiscal 2015 of approximately $5.0 million, including costs associated with the completion of the fiscal 2014 renovation of the tower guest rooms of the Pfister Hotel in Milwaukee, Wisconsin and completion of the renovation of The Cornhusker, A Marriott Hotel, in Lincoln, Nebraska.

Net cash used in financing activities during the first quarter of fiscal 2016 totaled $2.9 million compared to $3.3 million during the first quarter of fiscal 2015. We used excess cash during both periods to reduce our borrowings under our revolving credit facility. As short-term borrowings became due, we replaced them as necessary with new short-term borrowings. As a result, we added $69.5 million of new short-term borrowings and we made $68.0 million of repayments on short-term borrowings during our fiscal 2016 first quarter (net increase in borrowings on our credit facility of $1.5 million) compared to $32.5 million of new short-term borrowings and $32.5 million of repayments on short-term borrowings made during our fiscal 2015 first quarter (net change in borrowings on our credit facility of zero), accounting for the majority of the decrease in net cash used in financing activities during the current-year quarter compared to the prior year quarter. Principal payments on long-term debt were $1.5 million during the first quarter of fiscal 2016 compared to payments of $1.1 million during the same period of fiscal 2015. Our debt-to-capitalization ratio was 0.41 at August 27, 2015 and 0.42 at our fiscal 2015 year-end.

We did not repurchase any shares of our common stock in the open market during the first quarter of fiscal 2016 or fiscal 2015. As of August 27, 2015, approximately 3.2 million shares remained available for repurchase under prior Board of Directors repurchase authorizations. We expect that we will execute any future repurchases on the open market or in privately-negotiated transactions, depending upon a number of factors, including prevailing market conditions.

Dividend payments during the first quarter of fiscal 2016 totaled $2.8 million compared to dividend payments of $2.5 million during the first quarter of fiscal 2015. The increase in dividend payments was the result of a 10.5% increase in our regular quarterly dividend payment initiated during the fourth quarter of fiscal 2015. During the first quarter of fiscal 2016, we made distributions to noncontrolling interests of $379,000, compared to distributions of $719,000 during the first quarter of fiscal 2015.

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We previously indicated that we expected our full-year fiscal 2016 capital expenditures, including potential purchases of interests in joint ventures (but excluding any significant unidentified acquisitions), to be in the $70-$90 million range. We are still finalizing the scope and timing of the various projects requested by our two divisions, but at this time, we are not adjusting this estimate. Some of these projects may carry over to the next fiscal year, and if that occurs, it would be more likely that we would incur capital expenditures in the current year at the lower end of that range. The actual timing and extent of the implementation of all of our current expansion plans will depend in large part on industry and general economic conditions, our financial performance and available capital, the competitive environment, evolving customer needs and trends and the availability of attractive opportunities. It is likely that our plans will continue to evolve and change in response to these and other factors.

Item 3.               Quantitative and Qualitative Disclosures About Market Risk

We have not experienced any material changes in our market risk exposures since May 28, 2015.

Item 4.               Controls and Procedures

a. Evaluation of disclosure controls and procedures

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

b. Changes in internal control over financial reporting

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

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PART II – OTHER INFORMATION

Item 1A.            Risk Factors

Risk factors relating to us are contained in Item 1A of our Annual Report on Form 10-K for the fiscal year ended May 28, 2015. No material change to such risk factors has occurred during the 13 weeks ended August 27, 2015.

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

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

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)		Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (1)
May 29 – June 25		–		–		–		3,235,816
June 26 – July 30		–		–		–		3,235,816
July 31 – August 27		–		–		–		3,235,816
Total		–		–		–		3,235,816

(1) Through August 27, 2015, our Board of Directors had authorized the repurchase of up to approximately 11.7 million shares of our outstanding Common Stock. Under these authorizations, we may repurchase shares of our Common Stock from time to time in the open market, pursuant to privately negotiated transactions or otherwise. As of August 27, 2015, we had repurchased approximately 8.5 million shares of our Common Stock under these authorizations. The repurchased shares are held in our treasury pending potential future issuance in connection with employee benefit, option or stock ownership plans or other general corporate purposes. These authorizations do not have an expiration date.

Item 4.               Mine Safety Disclosures

Not applicable.

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Item 6.               Exhibits

10.1	The Marcus Corporation Deferred Compensation Plan, as amended and restated.
31.1	Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Written Statement of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. §1350.
101	The following materials from The Marcus Corporation’s Quarterly Report on Form 10-Q for the quarter ended August 27, 2015 are filed herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Earnings, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Cash Flows, and (v) the Condensed Notes to Consolidated Financial Statements.

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SIGNATURES

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

	THE MARCUS CORPORATION
DATE:  October 6, 2015	By:	/s/ Gregory S. Marcus
		Gregory S. Marcus President and Chief Executive Officer
DATE:  October 6, 2015	By:	/s/ Douglas A. Neis
		Douglas A. Neis Chief Financial Officer and Treasurer

S-1

EX-10.1

Exhibit 10.1

the marcus corporation
deferred compensation plan

(As Amended and Restated Effective January 1, 2009)

TABLE OF CONTENTS

	Page
ARTICLE I. DEFINITIONS	1
Section 1.01. Definitions	1
ARTICLE II. PARTICIPATION	3
Section 2.01. Participation	3
Section 2.02. Termination of Participation	4
Section 2.03. Deferred Compensation Election Forms	4
Section 2.04. Cancellation of Deferral Elections	6
Section 2.05. Limits on Deferred Compensation	6
ARTICLE III. DEFERRED COMPENSATION ACCOUNTS	7
Section 3.01. Deferred Compensation Account	7
Section 3.02. Earnings on Accounts	7
Section 3.03. Periodic Statements of Account	7
Section 3.04. Participant’s Rights Unsecured	7
Section 3.05. Unfunded Plan	7
Section 3.06. Effect of Change of Control or Potential Change of Control	7
ARTICLE IV. DISTRIBUTIONS	8
Section 4.01. Distributions	8
Section 4.02. Forms of Payment.	8
Section 4.03. Distribution in Event of Unforeseeable Emergency	8
ARTICLE V. ADMINISTRATION AND OTHER PROVISIONS	9
Section 5.01. Administration of the Plan	9
Section 5.02. Amendment and Termination; Acceleration of Distributions	9
Section 5.03. Claims Procedure.	10
Section 5.04. Expenses	11
Section 5.05. Right to Employment	11
Section 5.06. Effect on Other Plans	11
Section 5.07. Severability	11
Section 5.08. Binding Upon Successors	11
Section 5.09. Tax Withholding	12
Section 5.10. Governing Law	12

i 

THE MARCUS CORPORATION
DEFERRED COMPENSATION PLAN

THE MARCUS CORPORATION, a Wisconsin corporation, together with its Affiliates (collectively referred to herein as the “Company”) established this Deferred Compensation Plan (the “Plan”), effective January 1, 1990, for the purpose of assisting Participants in providing additional financial security for themselves and their dependents.

ARTICLE I. DEFINITIONS

Section 1.01. Definitions. The following terms have the following meanings unless the context clearly indicates otherwise:

(a)          “Account” or “Deferred Compensation Account” means the bookkeeping entry established on the records of The Marcus Corporation and/or pursuant to the Trust Agreement to reflect the amount owed to a Participant or Beneficiary under the Plan. The Administrator shall maintain a separate Account for each year’s deferrals, as adjusted for earnings thereon and distributions therefrom. For purposes of Code Section 409A, each Account shall be treated as a right to a separate payment.

(b)          “Administrator” means The Marcus Corporation Deferred Compensation Plan Administration Committee as appointed by the Board of Directors.

(c)          “Affiliate” means each entity that is required to be included in the controlled group of corporations with The Marcus Corporation within the meaning of Code Section 414(b), or that is under common control with The Marcus Corporation within the meaning of Code Section 414(c); provided that for purposes of determining if a Participant has incurred a Separation from Service, the phrase “at least 50 percent” shall be used in place of the phrase “at least 80 percent” each place it appears therein or in the regulations thereunder.

(d)          “Beneficiary” means the person or entity designated by the Participant to be the beneficiary of the Deferred Compensation Accounts of the Participant under the Plan. If a valid designation of Beneficiary is not in effect at the time of the death of a Participant, or if the Beneficiary does not survive the Participant, the estate of the Participant is deemed to be the sole Beneficiary of such Accounts. If a Participant dies before receiving full distribution of each of his or her Accounts, any remaining distributions shall be made to the Beneficiary. If a Beneficiary dies after a Participant while entitled to receive distributions from the Plan, any remaining payments shall be paid to the estate of the Beneficiary. Beneficiary designations shall be in writing, filed with the Administrator, and in such form as the Administrator may prescribe for this purpose.

(e)          “Board of Directors” means the Board of Directors of The Marcus Corporation.

(f)          “Change of Control” has the meaning ascribed under Code Section 409A.

(g)          “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(h)          “Compensation” means the Participant’s gross base salary, annual bonus and commission, in each case that is payable in cash, for the relevant period. Commission will be treated as earned in the calendar year in which the customer remits the payment to the Company. In no event shall quarterly, special or any other types of bonuses be considered Compensation hereunder.

(i)          “Deferred Compensation Election Form” or “Election Form” means the written election of a Participant to defer a portion of his or her Compensation for a calendar year (or portion thereof, if applicable) pursuant to the provisions of the Plan. An Election Form shall specify the calendar year in which payment shall commence, or that payment should commence in the Participant’s anticipated year of retirement or the immediately following year. The Election Form shall also specify whether payment is to be made in a single lump sum amount or in periodic annual payments over not more than ten (10) years.

(j)          “Disability” (or “Disabled”) means the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months.

(k)          “Eligible Associate” means an associate of The Marcus Corporation, or of such Affiliate as is specified by the Administrator as a participating employer in the Plan, who:

(i) As of October of a given year, has projected Compensation that is equal to or greater than the amount described in Code Section 414(q)(1)(B)(i), as adjusted (a “regular entrant”); or

(ii) Did not, as of October of a given year, meet the requirements of clause (i), but who, as of the end of such year, had Compensation for such year that is equal to or greater than the amount described in Code Section 414(q)(1)(B)(i), as adjusted (a “late entrant”).

Prior to March 1, 2000, an Eligible Associate also was required to have reached age twenty-one (21) and have completed one (1) Year of Service before being eligible to participate.

(l)          “Participant” means an Eligible Associate who has executed a Deferred Compensation Election Form. After an Eligible Associate has become eligible to become a Participant, the associate will remain eligible to participate, subject to governmental regulations, without regard to increases in the compensation level described in Code Section 414(q)(1)(B) or reductions in individual Compensation.

(m)          “Separation from Service” means a Participant’s termination of employment from the Company and its Affiliates within the meaning of Code Section 409A, or if the Participant continues to provide services to the Company and its Affiliates in a capacity other than an employee after his or her termination, such later date as is considered a separation from service within the meaning of Code Section 409A. Specifically, a Participant will be presumed to have incurred a Separation from Service when the level of bona fide services performed by the Participant for the Company and its Affiliates permanently decreases to a level equal to twenty percent (20%) or less of the average level of services performed by the Participant for the Company or its Affiliates during the immediately preceding thirty-six (36) month period (or such lesser period of actual service). Notwithstanding the foregoing, a Participant will not be considered to have terminated employment if the Participant is absent from active employment due to military leave, sick leave or other bona fide leave of absence if the period of such leave does not exceed the greater of (i) six (6) months, or if the leave of absence is due to the Participant’s Disability, then the leave period may be extended for up to a total of twenty-nine (29) months; or (ii) the period during which the Participant’s right to reemployment by the Company or an Affiliate is provided either by statute or by contract.

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(n)          “Trust Agreement” means the Marcus Executive Benefit Trust Agreement entered into by the Company and the Trustee designated in such Agreement to implement and carry out the provisions of the Plan. The Trust Agreement is incorporated herein by this reference.

(o)          “Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from any of the following, as determined by the Administrator based on all of the relevant facts and circumstances:

(i) an illness or accident of the Participant, his or her spouse or dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B) thereof);

(ii) a loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance); or

(iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.

(p)          A “Year of Service” is employment by the Company for twelve (12) consecutive months without an intervening unpaid leave of absence or other separation from employment.

ARTICLE II. PARTICIPATION

Section 2.01. Participation.

(a) Initial Year of Participation

(i) Regular Entrants. An Eligible Associate who is designated as a “regular entrant” may elect to participate as of the first day of the calendar year following the year in which he or she has first been designated as a regular entrant by filing a Deferred Compensation Election Form no later than November 30 of the prior year.

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(ii) Late Entrants. An Eligible Associate who is designated as a “late entrant” may elect to commence participation in the Plan effective February 1 of the year immediately following the year in which he or she has first been designated as a late entrant by filing a Deferred Compensation Election Form no later than January 31 of the year following such designation.

(b)          Subsequent Years of Participation. After the initial eligibility period described above, persons who remain eligible to participate may elect to participate as of the first day of a calendar year by filing a Deferred Compensation Election Form no later than November 30 of the prior year.

Section 2.02. Termination of Participation. A Participant has no further right to defer Compensation under the Plan upon a Separation from Service (provided that any Compensation paid after such Separation from Service occurs shall be deferred according to the Participant’s election then in effect) or upon receipt of written notice of revocation by the Administrator (based on government regulations) of an associate’s status as an Eligible Associate. Such revocations are effective only upon the January 1 following the date that the associate is provided such written notice. If a Participant Separates from Service and subsequently returns to service with the Company or an Affiliate, he shall be treated as a new associate for all Plan purposes; provided that if he returns to service within the same calendar year, his or her Deferred Compensation Election Form in effect for such year shall automatically be reinstated.

Section 2.03. Deferred Compensation Election Forms.

(a)          An Eligible Associate shall commence participation by executing a Deferred Compensation Election Form that shall be effective:

(i) For all Participants other than late entrants, as of the first payroll period beginning on or after the first day of the calendar year following the calendar year in which the Election Form is completed and placed on file with the Administrator; and

(ii) For Participants who are late entrants, as of the first payroll period beginning on or after their initial participation date of February 1. A Participant who is a late entrant shall not be eligible to defer Compensation payable under an annual bonus award that is in effect during the first year of participation.

An election for a calendar year (or the remainder thereof for a late entrant) shall apply to base salary payable for the last pay period ending on or before the last day of such calendar year, even if payment is made in the following year. However, with regard to the last payroll period of a calendar year that ends after December 31, the base salary payable for such payroll period shall be deemed compensation in the year paid. For example, base salary payable for the payroll period beginning December 29, 2008 and ending January 2, 2009, shall be considered base salary payable for 2009 (even though some of such base salary was earned in 2008) and thus shall be subject to the deferral election in effect for 2009.

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(b)          The Administrator shall determine the form of the Deferred Compensation Election Form from time to time. Upon the last day on which a Deferred Compensation Election Form can be timely filed, the election shall be irrevocable and a Participant shall be bound by all the terms and conditions of the Plan and such Election Form.

(c)          The Deferred Compensation Election Form may permit a Participant to file separate elections with respect to any or all of (i) gross base salary, (ii) annual bonus, or (iii) commissions. A Deferred Compensation Election Form may permit a Participant to have deferred amounts contributed to the Company’s 401(k) plan pursuant to such rules as the Administrator may prescribe.

(d)          The Deferred Compensation Election Form shall include a distribution date and form of payment election, indicating the calendar year in which payment is to commence or, in the case of a lump sum payment, be made, and the form of payment that is to be used.

(e)          A Participant may select a later distribution date for the Participant’s Account and/or select a different form of payment for such Account, within the general limitations of the Plan. Any such change of distribution date or change of form of payment is subject to the following requirements:

(i) such change must be made in writing, using the Administrator’s form for this purpose;

(ii) such change will not take effect until twelve (12) months after the date on which the change is made;

(iii) the first payment from the Account with respect to which such change of Distribution Date or Form of Payment must be deferred for at least five (5) years after the date such payment would otherwise have been paid but for such change; and

(iv) such change of Distribution Date or Form of Payment must be made more than twelve (12) months prior to the date of the first scheduled payment from the Account.

Such election shall become irrevocable on the date immediately prior to twelve (12) months prior to the date of the first previously scheduled payment.

(f)          The Administrator may limit the availability and frequency of change elections under paragraph (e), above, in accordance with rules announced in advance and generally applied to all Participants.

(g)          During 2007, pursuant to transition guidance issued under Code Section 409A, Participants were provided an opportunity to change the time and form of payment of their Accounts without regard to the requirements of paragraph (e), but otherwise within the general limitations of the Plan. The last Election Form on file as of December 31, 2007, shall be irrevocable, except as provided in paragraph (e).

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During 2008, pursuant to transition guidance issued under Code Section 409A, (i) Participants whose annual bonus is based on a calendar year performance cycle shall be permitted to file a Deferred Compensation Election Form with respect to the annual bonus earned for calendar year 2008 and paid no later than March 15, 2009, and (ii) Participants whose annual bonus is based on the Company’s fiscal year shall be permitted to file a Deferred Compensation Election Form with respect to the annual bonus earned for fiscal year 2009 and paid no later than August 15, 2009.

Section 2.04. Cancellation of Deferral Elections. A Participant’s deferral election is irrevocable with respect to the calendar year (or remainder of the calendar year for a late entrant) to which it relates except in the following circumstances:

(a)          If a Participant receives a distribution due to an Unforeseeable Emergency and requests cancellation of his or her deferral election, or if the Administrator determines that such deferral election must be cancelled in order for the Participant to receive a distribution due to an Unforeseeable Emergency under this Plan, then the Participant’s deferral election shall be cancelled.

(b)          If required for the Participant to receive a hardship distribution under a 401(k) plan sponsored by the Company, the Participant’s deferral election shall be cancelled.

(c)          A Participant’s deferral election may be cancelled at the Participant’s request during periods in which the Participant is considered Disabled.

(d)          A Participant’s deferral election with respect to an annual bonus that is earned based on the Company’s fiscal year shall be cancelled to the extent such bonus does not meet the requirements for “performance-based compensation” within the meaning of Code Section 409A.

A Participant whose deferral election is cancelled pursuant to this Section 2.04 may make a new deferral election in accordance with Section 2.01(b) with respect to future compensation, unless otherwise prohibited by the Administrator.

Section 2.05. Limits on Deferred Compensation.

(a)          The aggregate deferral percentage with respect to Compensation may be any full percentage up to one hundred percent (100%); provided that a Participant who is a late entrant may not, in his or her initial year of participation, defer any annual bonus earned with respect to such year.

(b)          The minimum scheduled period of deferral, other than for expected retirement, shall end no earlier than on the first day of the second calendar year following the year in which Compensation is deferred.

(c)          The Administrator may, from time to time, in its sole discretion, prospectively (effective only on a January 1) adjust the minimum and maximum deferrals and the minimum deferral periods permitted hereunder.

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(d)          A new Deferred Compensation Election Form is required to be filed by a Participant for each calendar year for which Compensation is to be deferred. Deferral elections in effect for a calendar year are not revocable by the Participant during such year, except as provided in Section 2.04.

ARTICLE III. DEFERRED COMPENSATION ACCOUNTS

Section 3.01. Deferred Compensation Account. The Company shall establish one or more Deferred Compensation Accounts on its books for each Participant, as necessary, and shall credit to each such Account any amounts deferred to such Account by the Participant under the Plan. Such credits for deferred Compensation are to be made at such times as the deferred Compensation, but for the Participant’s deferral election, would otherwise have been paid to the Participant.

Section 3.02. Earnings on Accounts. Accounts shall be credited as of the last day of each calendar year quarter with simple interest from the date of deposit at the reference rate selected by the Administrator and declared by Chase Bank N.A. (or any successor bank that acts as the Company’s primary bank) on the first day of the calendar year quarter. Quarterly adjustments in the reference rate at the beginning of each calendar year quarter will apply to all monies in an Account.

Section 3.03. Periodic Statements of Account. The Administrator shall provide to each Participant, not less frequently than annually, a statement with respect to each of his or her Accounts in such form as the Administrator determines to be appropriate, setting forth credited amounts added during the reporting period, amounts distributed from such Account to the Participant since the last report, the current balance to the credit of such Participant in such Account, and other appropriate information.

Section 3.04. Participant’s Rights Unsecured. The right of the Participant or his or her Beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participant nor any Beneficiary shall have any rights in or against any amount credited to his or her Account or any other specific assets of the Company. The right of a Participant or Beneficiary to the payment of benefits under this Plan shall not be assigned, transferred, pledged or encumbered.

Section 3.05. Unfunded Plan. This Plan is unfunded and is maintained by the Company primarily for the purpose of providing deferred compensation for a select group of management and highly compensated associates. Nothing contained in this Plan and no action taken pursuant to its terms shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant or Beneficiary, or any other person.

Section 3.06. Effect of Change of Control or Potential Change of Control. Notwithstanding the preceding sections of this Article III, upon the occurrence of a change of control or potential change of control, as described in Article III of the Trust Agreement, or at such other time as determined by the Board of Directors pursuant to the Trust Agreement, payments due to be made under the Plan may be paid out of assets transferred by the Company to the trust fund maintained pursuant to the terms and conditions of the Trust Agreement.

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ARTICLE IV. DISTRIBUTIONS

Section 4.01. Distributions. All distributions hereunder shall be made promptly by the Company as they become due under the terms of the Plan except to the extent such distributions are made by the Trustee. Any payment of amounts due Participants or Beneficiaries under the Plan which are made by the Trustee shall be deemed to be payment by the Company for all Plan purposes.

Section 4.02. Forms of Payment.

(a)          Lump Sum Payment Method. An optional form of distribution of an Account to a Participant is payment in a single lump sum amount paid in January of the calendar year designated for payment by the Participant in his or her Election Form. A Participant may, however, elect in writing in advance with the Administrator, a payment date or dates (but not more than two dates) occurring later in the same calendar year provided such election does not violate Code Section 409A.

(b)          Installment Payment Method. An optional form of distribution of an Account to a Participant is the installment method of payment. Annual installments over not more than ten (10) years may be elected. If the installment method of payment is elected, the periodic payments will include earnings adjustments to any remaining balance during the payout period. Annual amounts to be distributed under the installment method are determined at the beginning of the year in which payments are to be made by multiplying the amount in the Participant’s Account as of the immediately preceding December 31 by a fraction in which the numerator is one (1) and the denominator is the number of annual payments remaining to be paid (e.g., for 10 installments, 1/10, 1/9, 1/8, etc.). The first installment payment shall be paid no later than thirty (30) days after the beginning of the calendar year designated for payment by the Participant in his or her Election Form. Remaining installment payments will be paid in January of each subsequent year. If the balance of a Participant’s Account is ten thousand dollars ($10,000) or less on any payment date, the Company shall make a lump sum distribution to the Participant of the full remaining Account balance.

(c)          Death Benefits. Notwithstanding any time and form of distribution election made by a Participant, in the event of the Participant’s death, the balance of the Participant’s Account shall be paid to the Participant’s Beneficiary in a single lump sum within ninety (90) days following the date of the Participant’s death.

Section 4.03. Distribution in Event of Unforeseeable Emergency. If a Participant provides information to the Administrator which is sufficient, as determined solely and conclusively by the Administrator, to establish that an Unforeseeable Emergency significantly affecting the personal or family affairs of the Participant has occurred, and has created the need for additional current income, the Administrator may elect, in the sole discretion of the Administrator, to authorize an immediate lump sum payment to such Participant from the Participant’s Deferred Compensation Account, in an amount reasonably necessary to satisfy the emergency need (taking tax consequences into account) after taking into account any additional compensation that is available if the Participant’s deferrals into this Plan cease pursuant to Section 2.04. Notwithstanding the foregoing, no distribution shall be made to the extent the Administrator determines that the emergency need is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets (but only to the extent such liquidation would not cause a severe financial hardship), or by cessation of deferrals under the Plan. Distributions in event of Unforeseeable Emergency shall be made first from Accounts with the earliest scheduled payment date.

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ARTICLE V. ADMINISTRATION AND OTHER PROVISIONS

Section 5.01. Administration of the Plan. The Administrator shall administer and interpret the Plan, and supervise preparation of Deferred Compensation Election Forms and Beneficiary designation forms, and any amendments thereto. Interpretation of the Plan shall be within the sole discretion of the Administrator and shall be final and binding upon each Participant and Beneficiary. This Plan shall be construed and interpreted in a manner that will cause any payment hereunder that is considered deferred compensation and that is not exempt from Code Section 409A to meet the requirements thereof such that no additional tax will be due under Code Section 409A on such payment. The Administrator may adopt and modify rules and regulations relating to the Plan as it deems necessary or advisable for the administration of the Plan. If a member of the Administrator shall also be a Participant or Beneficiary, such person shall not participate in any determinations affecting such person’s participation in the Plan.

Section 5.02. Amendment and Termination; Acceleration of Distributions

(a)          Amendment. The Administrator may amend the Plan without the consent of the Participants or Beneficiaries, provided, however, that no amendment may reduce any Account balance accrued on behalf of a Participant based on deferrals already made, or divest any Participant of rights to which he would have been entitled if the Plan had been terminated immediately prior to the effective date of such amendment.

(b)          Termination. The Administrator may terminate the Plan without the consent of Participants or Beneficiaries, provided, however, that the termination may not reduce any Account balance accrued on behalf of a Participant based on deferrals already made. Upon termination of the Plan, any deferral elections then in effect shall be cancelled if permitted by Code Section 409A and no future deferral elections shall be permitted. The Administrator may provide that, notwithstanding any distribution elections then in effect, all Accounts will be paid out in connection with the termination of the Plan in the following circumstances:

(i) The irrevocable termination occurs within thirty (30) days prior to or twelve (12) months following a Change of Control, and all other arrangements required to be aggregated with this Plan under Code Section 409A following the Change of Control are likewise terminated and liquidated with respect to each Participant that experienced the Change of Control event. In such event, the balance of each Participant’s Account, including those Participants already in pay status, shall be paid in a lump sum as soon as practicable (but not more than twelve (12) months) following the date of such Plan termination.

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(ii) The termination occurs within twelve (12) months of a corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. §503(b)(1)(A). In such event, the balance of each Participant’s Account, including those Participants already in pay status, shall be paid in a lump sum in the later of: (A) the calendar year in which the Plan termination occurs, or (B) the first calendar year in which payment is administratively practicable.

(iii) The termination of the Plan is irrevocable and does not occur proximate to a downturn in the financial health of the Company. In such event, the balance of all Accounts will be distributed to all Participants or Beneficiaries, as applicable, in a single sum payment at least 12 but not more than 24, months after the date of termination. This provision shall not be effective unless all other plans required to be aggregated with this Plan under Code Section 409A are also terminated and liquidated. Notwithstanding the foregoing, any payment that would otherwise be paid during the 12-month period beginning on the Plan termination date pursuant to the terms of the Plan shall be paid in accordance with such terms. In addition, the Company shall be prohibited from adopting a similar arrangement within 3 years following the date of the Plan’s termination.

Section 5.03. Claims Procedure.

(a)          Initial Claim. If a Participant or Beneficiary (the “claimant”) believes that he is entitled to a distribution from the Plan that was not provided, the claimant or his or her legal representative shall file a written claim for such benefit with the Administrator no later than 90 days following the date the distribution should have been made. The Administrator shall review the claim within 60 days following the date of receipt of the claim. If the claimant’s claim is denied in whole or part, the Administrator shall provide written notice to the claimant of such denial. The written notice shall include: the specific reason(s) for the denial; reference to specific Plan provisions upon which the denial is based; a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and a description of the Plan’s review procedures (as set forth in subsection (b)) and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse determination upon review.

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(b)          Request for Appeal. The claimant has the right to appeal the Administrator’s decision by filing a written appeal to the Administrator within 60 days after the claimant’s receipt of the decision or deemed denial; provided that to avoid penalties under Code Section 409A, the claimant’s appeal must be filed no later than 180 days after the latest date the payment that is in dispute should have been paid. The claimant will have the opportunity, upon request and free of charge, to have reasonable access to and copies of all documents, records and other information relevant to the claimant’s appeal. The claimant may submit with the appeal written comments, documents, records and other information relating to his or her appeal. The Administrator will review all comments, documents, records and other information submitted by the claimant relating to the claim, regardless of whether such information was submitted or considered in the initial claim determination. The Administrator shall make a determination on the appeal within 60 days after receiving the claimant’s written appeal; provided that the Administrator may determine that an additional 60-day extension is necessary due to circumstances beyond the Administrator’s control, in which event the Administrator shall notify the claimant prior to the end of the initial period that an extension is needed, the reason therefor and the date by which the Administrator expects to render a decision. If the claimant’s appeal is denied in whole or part, the Administrator shall provide written notice to the claimant of such denial. The written notice shall include: the specific reason(s) for the denial; reference to specific Plan provisions upon which the denial is based; a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, and other information relevant to the claimant’s claim; and a statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA. If the claimant does not receive a written decision within the time period(s) described above, the appeal shall be deemed denied on the last day of such period(s).

(c)          ERISA Fiduciary. For purposes of ERISA, the Administrator shall be considered the named fiduciary and the plan administrator for the Plan.

Section 5.04. Expenses. Costs of administration of the Plan will be paid by the Company.

Section 5.05. Right to Employment. Participation in this Plan, or any modifications thereof, or the payments of any benefits hereunder, shall not be construed as giving to any person any right to be retained in the service of the Company or any Affiliate, limiting in any way the right of the Company or any Affiliate to terminate such person’s employment at any time, evidencing any agreement or any understanding that the Company or any Affiliate will employ such person in any particular position or any particular rate of compensation or guaranteeing such person any right to receive any other form or amount of remuneration from the Company or any Affiliate.

Section 5.06. Effect on Other Plans. Compensation credited to a Deferred Compensation Account hereunder shall not be considered to be “compensation” for the purpose of computing benefits under any qualified retirement plan which may be maintained by the Company, but shall be considered compensation for welfare benefit plans maintained by the Company.

Section 5.07. Severability. If any of the provisions of the Plan shall be held to be invalid, or shall be determined to be inconsistent with the purpose of the Plan, the remainder of the Plan shall not be affected thereby.

Section 5.08. Binding Upon Successors. This Plan shall be binding upon and inure to the benefit of The Marcus Corporation, its successors and assigns, and the Participants and their heirs, executors, administrators, and legal representatives.

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Section 5.09. Tax Withholding. The Company shall have the right to deduct from any deferral made to the Plan, or any payment made hereunder, or from any other amount due a Participant, the amount of cash sufficient to satisfy the Company’s or Affiliate’s foreign, federal, state or local income tax withholding obligations with respect to such deferral (or vesting thereof) or payment. In addition, if prior to the date of distribution of any amount hereunder, the Federal Insurance Contributions Act (FICA) tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2), where applicable, becomes due, the Participant’s Deferred Compensation Account balance may be reduced by the amount needed to pay the Participant’s portion of such tax, plus an amount equal to the withholding taxes due under federal, state or local law resulting from the payment of such FICA tax, and an additional amount to pay the additional income tax at source on wages attributable to the pyramiding of the Code Section 3401 wages and taxes, but no greater than the aggregate of the FICA tax amount and the income tax withholding related to such FICA tax amount.

Section 5.10. Governing Law. This Plan shall be construed in accordance with and governed by the law of the State of Wisconsin, without regard to conflict of law principles thereof, to the extent not preempted by federal law.

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EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934

I, Gregory S. Marcus, certify that:

1.             I have reviewed this Quarterly Report on Form 10-Q of The Marcus Corporation;

2.             Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.             Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.             The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)             Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)             Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)             Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)             Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.             The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)             All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)             Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: October 6, 2015

By:	/s/ Gregory S. Marcus
	Gregory S. Marcus
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act and Rule 13a-14(a)
or 15d-14(a) under the Securities Exchange Act of 1934

I, Douglas A. Neis, certify that:

1.              I have reviewed this Quarterly Report on Form 10-Q of The Marcus Corporation;

2.              Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.              Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.              The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)              Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)              Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)              Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)              Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5.              The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)              All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)              Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

DATE: October 6, 2015

By:	/s/ Douglas A. Neis
	Douglas A. Neis
	Chief Financial Officer and Treasurer

EX-32

Exhibit 32

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

Solely for the purposes of complying with 18 U.S.C. §1350, we, the undersigned Chief Executive Officer and Chief Financial Officer of The Marcus Corporation (the “Company”), hereby certify, based on our knowledge, that the accompanying Quarterly Report on Form 10-Q of the Company (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Gregory S. Marcus

Gregory S. Marcus

President and Chief Executive Officer

/s/ Douglas A. Neis

Douglas A. Neis

Chief Financial Officer and Treasurer

Date:  October 6, 2015

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Derivatives and Hedging Activities

3 Months Ended

Aug. 27, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Acivities

2. Derivatives and Hedging Activities

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

The Company entered into an interest rate swap agreement on February 28, 2013 covering $25,000,000 of floating rate debt, which expires January 22, 2018, and requires the Company to pay interest at a defined rate of 0.96% while receiving interest at a defined variable rate of one-month LIBOR (0.25% at August 27, 2015). The Company recognizes derivatives as either assets or liabilities on the consolidated balance sheets at fair value. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. Derivatives that do not qualify for hedge accounting must be adjusted to fair value through earnings. The Company’s interest rate swap agreement is considered effective and qualifies as a cash flow hedge. For derivatives that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As of August 27, 2015, the interest rate swap was considered effective. The notional amount of the swap is $25,000,000 and the fair value of the swap was a liability of $90,000 and $28,000 as of August 27, 2015 and May 28, 2015, respectively, and is included in deferred compensation and other in the consolidated balance sheets. The Company does not expect the interest rate swap to have any material effect on earnings within the next 12 months.

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General

3 Months Ended

Aug. 27, 2015

General [Abstract]

General

1. General

Accounting Policies – Refer to the Company’s audited consolidated financial statements (including footnotes) for the fiscal year ended May 28, 2015, contained in the Company’s Annual Report on Form 10-K for such year, for a description of the Company’s accounting policies.

Basis of Presentation – The unaudited consolidated financial statements for the 13 weeks ended August 27, 2015 and August 28, 2014 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at August 27, 2015, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended May 28, 2015.

Depreciation and Amortization – Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $10,328,000 and $8,960,000 for the 13 weeks ended August 27, 2015 and August 28, 2014, respectively.

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

	Swap Agreements		Available for Sale Investments		Pension Obligation		Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 28, 2015	$	(17)	$	(11)	$	(5,284)	$	(5,312)
Other comprehensive loss before reclassifications		(66)		-		-		(66)
Amounts reclassified from accumulated other comprehensive loss (1)		29		-		-		29
Net other comprehensive loss		(37)		-		-		(37)
Balance at August 27, 2015	$	(54)	$	(11)	$	(5,284)	$	(5,349)

	Swap Agreements		Available for Sale Investments		Pension Obligation		Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 29, 2014	$	34	$	(11)	$	(4,581)	$	(4,558)
Other comprehensive income before reclassifications		40		-		-		40
Amounts reclassified from accumulated other comprehensive loss (1)		29		-		-		29
Net other comprehensive income		69		-		-		69
Balance at August 28, 2014	$	103	$	(11)	$	(4,581)	$	(4,489)

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

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

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

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

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands, except per share data)
Numerator:
Net earnings attributable to The Marcus Corporation	$	14,651	$	12,432
Denominator:
Denominator for basic EPS		27,573		27,347
Effect of dilutive employee stock options		309		266
Denominator for diluted EPS		27,882		27,613
Net earnings per share – basic:
Common Stock	$	0.55	$	0.47
Class B Common Stock	$	0.50	$	0.43
Net earnings per share – diluted:
Common Stock	$	0.53	$	0.45
Class B Common Stock	$	0.49	$	0.42

Equity – Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interests for the 13 weeks ended August 27, 2015 and August 28, 2014 was as follows:

	Total Shareholders’ Equity Attributable to The Marcus Corporation		Noncontrolling Interests
	(in thousands)
Balance at May 28, 2015	$	343,779	$	2,456
Net earnings attributable to The Marcus Corporation		14,651		–
Net loss attributable to noncontrolling interests		–		(198)
Distributions to noncontrolling interests		–		(379)
Cash dividends		(2,814)		–
Exercise of stock options		266		–
Treasury stock transactions, except for stock options		45		–
Share-based compensation		364		–
Other		44		–
Other comprehensive loss, net of tax		(37)		–
Balance at August 27, 2015	$	356,298	$	1,879

	Total Shareholders’ Equity Attributable to The Marcus Corporation		Noncontrolling Interests
	(in thousands)
Balance at May 29, 2014	$	326,211	$	3,768
Net earnings attributable to The Marcus Corporation		12,432		–
Net loss attributable to noncontrolling interests		–		(156)
Distributions to noncontrolling interests		–		(719)
Cash dividends		(2,525)		–
Exercise of stock options		1,003		–
Treasury stock transactions, except for stock options		25		–
Share-based compensation		319		–
Other		32		–
Other comprehensive income, net of tax		69		–
Balance at August 28, 2014	$	337,566	$	2,893

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

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

Level 1 – Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At August 27, 2015 and May 28, 2015, the Company’s $70,000 of available for sale securities were valued using Level 1 pricing inputs and were included in other current assets.

Level 2 – Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At August 27, 2015 and May 28, 2015, respectively, the $90,000 and $28,000 liability related to the Company’s interest rate swap contract was valued using Level 2 pricing inputs.

Level 3 – Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At August 27, 2015, none of the Company’s fair value measurements were valued using Level 3 pricing inputs. At May 28, 2015, $7,737,000 related to impaired assets was valued using Level 3 pricing inputs.

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

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands)
Service cost	$	197	$	175
Interest cost		328		311
Net amortization of prior service cost and actuarial loss		90		81
Net periodic pension cost	$	615	$	567

New Accounting Pronouncements – In April 2015, Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30), which requires an entity to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset, and requires the amortization of the costs be reported as interest expense. The new standard is effective for the Company in fiscal 2017 and the Company does not expect the adoption of this statement to have an impact on its overall financial position.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles when it becomes effective. The new standard is effective for the Company in fiscal 2018 and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is evaluating the effect that the guidance will have on its consolidated financial statements and related disclosures.

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Consolidated Balance Sheets - USD ($) $ in Thousands	Aug. 27, 2015	May. 28, 2015
Current assets:
Cash and cash equivalents	$ 5,721	$ 6,723
Restricted cash	9,014	8,760
Accounts and notes receivable, net of reserves of $245 and $245, respectively	19,829	16,339
Refundable income taxes	0	4,022
Deferred income taxes	3,093	2,997
Assets held for sale	17,395	0
Other current assets	6,670	6,732
Total current assets	61,722	45,573
Property and equipment:
Land and improvements	99,882	98,980
Buildings and improvements	609,828	633,946
Leasehold improvements	78,275	78,624
Furniture, fixtures and equipment	281,112	279,383
Construction in progress	4,140	8,392
Total property and equipment	1,073,237	1,099,325
Less accumulated depreciation and amortization	415,898	419,208
Net property and equipment	657,339	680,117
Other assets:
Investments in joint ventures	7,225	5,643
Goodwill	44,266	43,720
Other	34,422	33,989
Total other assets	85,913	83,352
TOTAL ASSETS	804,974	809,042
Current liabilities:
Accounts payable	24,472	36,776
Income taxes	4,474	0
Taxes other than income taxes	14,537	15,099
Accrued compensation	9,919	15,354
Other accrued liabilities	32,880	35,220
Current portion of capital lease obligation	5,081	5,053
Current maturities of long-term debt	18,093	17,742
Total current liabilities	109,456	125,244
Capital lease obligation	17,044	18,317
Long-term debt	229,303	229,669
Deferred income taxes	48,155	47,502
Deferred compensation and other	42,839	42,075
Equity:
Preferred Stock, $1 par; authorized 1,000,000 shares; none issued	0	0
Capital in excess of par	55,907	55,539
Retained earnings	319,777	307,939
Accumulated other comprehensive loss	(5,349)	(5,312)
Stockholders' Equity before Treasury Stock	401,525	389,356
Less cost of Common Stock in treasury (3,587,324 shares at August 27, 2015 and 3,636,098 shares at May 28, 2015)	(45,227)	(45,577)
Total shareholders' equity attributable to The Marcus Corporation	356,298	343,779
Noncontrolling interest	1,879	2,456
Total equity	358,177	346,235
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	804,974	809,042
Common Stock [Member]
Equity:
Common Stock	22,479	22,479
Class B Common Stock [Member]
Equity:
Common Stock	$ 8,711	$ 8,711

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
Other Comprehensive Amortization Of Loss Derivatives Qualifying As Hedges Tax	$ (45)	$ 25
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI on Derivatives, Tax	$ 20	$ 20

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Capital Lease Obligation (Details Textual)	3 Months Ended
	Aug. 27, 2015 USD ($)	May. 28, 2015 USD ($)
Property, Plant and Equipment [Line Items]
Capital Leased Assets, Number of Units	642
Term Of Licensing Agreement	10 years
Commitment Minimum Lease Payments	$ 6,163,000
Payments Obligation Reduced Amount	$ 5,081,000
Expect Period Of Payments Obligation	12 months
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Capital Leases, Balance Sheet, Assets by Major Class, Net	$ 45,510,000	$ 45,510,000
Digital Systems [Member]
Property, Plant and Equipment [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization	$ 19,980,000	$ 18,435,000

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Business Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
Segment Reporting Information [Line Items]
Revenues	$ 149,190	$ 131,769
Operating income (loss)	25,856	22,689
Depreciation and amortization	10,426	9,078
Theatres [Member]
Segment Reporting Information [Line Items]
Revenues	83,324	69,387
Operating income (loss)	18,060	14,854
Depreciation and amortization	5,686	4,730
Hotels/Resorts [Member]
Segment Reporting Information [Line Items]
Revenues	65,741	62,247
Operating income (loss)	11,512	11,004
Depreciation and amortization	4,600	4,247
Corporate Items [Member]
Segment Reporting Information [Line Items]
Revenues	125	135
Operating income (loss)	(3,716)	(3,169)
Depreciation and amortization	$ 140	$ 101

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
OPERATING ACTIVITIES:
Net earnings	$ 14,453	$ 12,276
Adjustments to reconcile net earnings to net cash provided by operating activities:
Losses on investments in joint ventures	19	41
Distribution from joint venture	0	30
Loss (gain) on disposition of property, equipment and other assets	(195)	6
Amortization of favorable lease right	83	83
Depreciation and amortization	10,426	9,078
Stock compensation expense	364	319
Deferred income taxes	617	90
Deferred compensation and other	965	709
Changes in operating assets and liabilities:
Accounts and notes receivable	(3,490)	(2,748)
Other current assets	44	(392)
Accounts payable	(5,583)	(3,317)
Income taxes	8,540	7,219
Taxes other than income taxes	(562)	163
Accrued compensation	(5,898)	(4,728)
Other accrued liabilities	(2,340)	(2,224)
Total adjustments	2,990	4,329
Net cash provided by operating activities	17,443	16,605
INVESTING ACTIVITIES:
Capital expenditures	(14,654)	(13,074)
Proceeds from disposals of property, equipment and other assets	1,183	25
Increase in restricted cash	(254)	(776)
Increase in other assets	(223)	(459)
Capital contribution in joint venture	0	(338)
Purchase of interest in joint venture	(1,600)	0
Net cash used in investing activities	(15,548)	(14,622)
FINANCING ACTIVITIES:
Proceeds from borrowings on revolving credit facility	69,500	32,500
Repayment of borrowings on revolving credit facility	(68,000)	(32,500)
Principal payments on debt	(1,515)	(1,112)
Equity transactions:
Treasury stock transactions, except for stock options	45	25
Exercise of stock options	266	1,003
Dividends paid	(2,814)	(2,525)
Distributions to noncontrolling interest	(379)	(719)
Net cash used in financing activities	(2,897)	(3,328)
Net decrease in cash and cash equivalents	(1,002)	(1,345)
Cash and cash equivalents at beginning of period	6,723	6,780
Cash and cash equivalents at end of period	5,721	5,435
Supplemental Information:
Interest paid, net of amounts capitalized	2,126	2,012
Income taxes paid, net	26	576
Change in accounts payable for additions to property and equipment	$ (6,721)	$ (4,578)

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Consolidated Balance Sheets (Parenthetical) - USD ($)	Aug. 27, 2015	May. 28, 2015
Accounts and notes receivable, reserves	$ 245	$ 245
Preferred Stock, par (in dollars per share)	$ 1	$ 1
Preferred Stock, authorized	1,000,000	1,000,000
Preferred Stock, issued	0	0
Cost of Common Stock in treasury, shares	3,587,324	3,636,098
Common Stock [Member]
Common Stock, par (in dollars per share)	$ 1	$ 1
Common Stock, authorized	50,000,000	50,000,000
Common Stock, issued	22,478,541	22,478,541
Class B Common Stock [Member]
Common Stock, par (in dollars per share)	$ 1	$ 1
Common Stock, authorized	33,000,000	33,000,000
Common Stock, issued	8,710,972	8,710,972
Common Stock, outstanding	8,710,972	8,710,972

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General (Details 1) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
Numerator:
Net earnings attributable to The Marcus Corporation	$ 14,651	$ 12,432
Denominator:
Denominator for basic EPS	27,573	27,347
Effect of dilutive employee stock options	309	266
Denominator for diluted EPS	27,882	27,613
Common Stock [Member]
Net earnings per share - basic:
Common Stock	$ 0.55	$ 0.47
Net earnings per share - diluted:
Common Stock	0.53	0.45
Class B Common Stock [Member]
Net earnings per share - basic:
Common Stock	0.5	0.43
Net earnings per share - diluted:
Common Stock	$ 0.49	$ 0.42

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Document And Entity Information - shares	3 Months Ended
	Aug. 27, 2015	Sep. 30, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Aug. 27, 2015
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1
Entity Registrant Name	MARCUS CORP
Entity Central Index Key	0000062234
Current Fiscal Year End Date	--05-28
Entity Filer Category	Accelerated Filer
Trading Symbol	MCS
Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		18,900,813
Class B Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		8,710,972

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General (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
Total Shareholders' Equity Attributable to The Marcus Corporation
Beginning Balance	$ 343,779	$ 326,211
Net earnings attributable to The Marcus Corporation	14,651	12,432
Cash dividends	(2,814)	(2,525)
Exercise of stock options	266	1,003
Treasury stock transactions, except for stock options	45	25
Share-based compensation	364	319
Other	44	32
Other comprehensive income (loss), net of tax	(37)	69
Ending Balance	356,298	337,566
Noncontrolling Interests
Beginning Balance	2,456	3,768
Net loss attributable to noncontrolling interests	(198)	(156)
Distributions to noncontrolling interests	(379)	(719)
Ending Balance	$ 1,879	$ 2,893

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Consolidated Statements of Earnings - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
Revenues:
Theatre admissions	$ 48,222	$ 41,345
Rooms	34,186	34,681
Theatre concessions	31,780	24,922
Food and beverage	18,809	16,155
Other revenues	16,193	14,666
Total revenues	149,190	131,769
Costs and expenses:
Theatre operations	41,679	34,863
Rooms	11,187	11,402
Theatre concessions	9,038	6,721
Food and beverage	14,762	12,063
Advertising and marketing	6,489	7,388
Administrative	14,566	12,392
Depreciation and amortization	10,426	9,078
Rent	2,193	2,154
Property taxes	3,821	3,906
Other operating expenses	9,173	9,113
Total costs and expenses	123,334	109,080
Operating income	25,856	22,689
Other income (expense):
Investment income	5	25
Interest expense	(2,401)	(2,404)
Gain (loss) on disposition of property, equipment and other assets	195	(6)
Equity losses from unconsolidated joint ventures, net	(19)	(41)
Nonoperating Income (Expense), Total	(2,220)	(2,426)
Earnings before income taxes	23,636	20,263
Income taxes	9,183	7,987
Net earnings	14,453	12,276
Net loss attributable to noncontrolling interests	(198)	(156)
Net earnings attributable to The Marcus Corporation	$ 14,651	$ 12,432
Common Stock [Member]
Net earnings per share - basic:
Common Stock	$ 0.55	$ 0.47
Net earnings per share - diluted:
Common Stock	0.53	0.45
Dividends per share:
Common Stock	0.105	0.095
Common Class B [Member]
Net earnings per share - basic:
Common Stock	0.5	0.43
Net earnings per share - diluted:
Common Stock	0.49	0.42
Dividends per share:
Common Stock	$ 0.095	$ 0.086

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Business Segment Information

3 Months Ended

Aug. 27, 2015

Business Segment Information [Abstract]

Business Segment Information

5. Business Segment Information

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

Following is a summary of business segment information for the 13 weeks ended August 27, 2015 and August 28, 2014 (in thousands):

13 Weeks Ended August 27, 2015	Theatres		Hotels/ Resorts		Corporate Items		Total
Revenues	$	83,324	$	65,741	$	125	$	149,190
Operating income (loss)		18,060		11,512		(3,716)		25,856
Depreciation and amortization		5,686		4,600		140		10,426

13 Weeks Ended August 28, 2014	Theatres		Hotels/ Resorts		Corporate Items		Total
Revenues	$	69,387	$	62,247	$	135	$	131,769
Operating income (loss)		14,854		11,004		(3,169)		22,689
Depreciation and amortization		4,730		4,247		101		9,078

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Income Taxes

3 Months Ended

Aug. 27, 2015

Income Taxes [Abstract]

Income Taxes

4. Income Taxes

The Company’s effective income tax rate, adjusted for losses from noncontrolling interests, for the 13 weeks ended August 27, 2015 and August 28, 2014 was 38.6% and 39.1%, respectively. The Company does not include the income tax expense or benefit related to the net earnings or loss attributable to noncontrolling interests in its income tax expense as the entities are considered pass-through entities and, as such, the income tax expense or benefit is attributable to its owners

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Income Taxes (Details Textual)	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
Effective Income Tax Rate	38.60%	39.10%

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General (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014
Service cost	$ 197	$ 175
Interest cost	328	311
Net amortization of prior service cost and actuarial loss	90	81
Net periodic pension cost	$ 615	$ 567

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Business Segment Information (Tables)

3 Months Ended

Aug. 27, 2015

Business Segment Information [Abstract]

Schedule of Segment Reporting Information, by Segment

Following is a summary of business segment information for the 13 weeks ended August 27, 2015 and August 28, 2014 (in thousands):

13 Weeks Ended August 27, 2015	Theatres		Hotels/ Resorts		Corporate Items		Total
Revenues	$	83,324	$	65,741	$	125	$	149,190
Operating income (loss)		18,060		11,512		(3,716)		25,856
Depreciation and amortization		5,686		4,600		140		10,426

13 Weeks Ended August 28, 2014	Theatres		Hotels/ Resorts		Corporate Items		Total
Revenues	$	69,387	$	62,247	$	135	$	131,769
Operating income (loss)		14,854		11,004		(3,169)		22,689
Depreciation and amortization		4,730		4,247		101		9,078

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General (Policies)

3 Months Ended

Aug. 27, 2015

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation – The unaudited consolidated financial statements for the 13 weeks ended August 27, 2015 and August 28, 2014 have been prepared by the Company. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the unaudited interim financial information at August 27, 2015, and for all periods presented, have been made. The results of operations during the interim periods are not necessarily indicative of the results of operations for the entire year or other interim periods. However, the unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended May 28, 2015.

Depreciation and Amortization

Depreciation and Amortization – Depreciation and amortization of property and equipment are provided using the straight-line method over the shorter of the estimated useful lives of the assets or any related lease terms. Depreciation expense totaled $10,328,000 and $8,960,000 for the 13 weeks ended August 27, 2015 and August 28, 2014, respectively.

Accumulated Other Comprehensive Loss

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

	Swap Agreements		Available for Sale Investments		Pension Obligation		Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 28, 2015	$	(17)	$	(11)	$	(5,284)	$	(5,312)
Other comprehensive loss before reclassifications		(66)		-		-		(66)
Amounts reclassified from accumulated other comprehensive loss (1)		29		-		-		29
Net other comprehensive loss		(37)		-		-		(37)
Balance at August 27, 2015	$	(54)	$	(11)	$	(5,284)	$	(5,349)

	Swap Agreements		Available for Sale Investments		Pension Obligation		Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 29, 2014	$	34	$	(11)	$	(4,581)	$	(4,558)
Other comprehensive income before reclassifications		40		-		-		40
Amounts reclassified from accumulated other comprehensive loss (1)		29		-		-		29
Net other comprehensive income		69		-		-		69
Balance at August 28, 2014	$	103	$	(11)	$	(4,581)	$	(4,489)

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

Earnings Per Share

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

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

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

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands, except per share data)
Numerator:
Net earnings attributable to The Marcus Corporation	$	14,651	$	12,432
Denominator:
Denominator for basic EPS		27,573		27,347
Effect of dilutive employee stock options		309		266
Denominator for diluted EPS		27,882		27,613
Net earnings per share – basic:
Common Stock	$	0.55	$	0.47
Class B Common Stock	$	0.50	$	0.43
Net earnings per share – diluted:
Common Stock	$	0.53	$	0.45
Class B Common Stock	$	0.49	$	0.42

Equity

Equity – Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interests for the 13 weeks ended August 27, 2015 and August 28, 2014 was as follows:

	Total Shareholders’ Equity Attributable to The Marcus Corporation		Noncontrolling Interests
	(in thousands)
Balance at May 28, 2015	$	343,779	$	2,456
Net earnings attributable to The Marcus Corporation		14,651		–
Net loss attributable to noncontrolling interests		–		(198)
Distributions to noncontrolling interests		–		(379)
Cash dividends		(2,814)		–
Exercise of stock options		266		–
Treasury stock transactions, except for stock options		45		–
Share-based compensation		364		–
Other		44		–
Other comprehensive loss, net of tax		(37)		–
Balance at August 27, 2015	$	356,298	$	1,879

	Total Shareholders’ Equity Attributable to The Marcus Corporation		Noncontrolling Interests
	(in thousands)
Balance at May 29, 2014	$	326,211	$	3,768
Net earnings attributable to The Marcus Corporation		12,432		–
Net loss attributable to noncontrolling interests		–		(156)
Distributions to noncontrolling interests		–		(719)
Cash dividends		(2,525)		–
Exercise of stock options		1,003		–
Treasury stock transactions, except for stock options		25		–
Share-based compensation		319		–
Other		32		–
Other comprehensive income, net of tax		69		–
Balance at August 28, 2014	$	337,566	$	2,893

Fair Value Measurements

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

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

Level 1 – Assets or liabilities for which fair value is based on quoted prices in active markets for identical instruments as of the reporting date. At August 27, 2015 and May 28, 2015, the Company’s $70,000 of available for sale securities were valued using Level 1 pricing inputs and were included in other current assets.

Level 2 – Assets or liabilities for which fair value is based on pricing inputs that were either directly or indirectly observable as of the reporting date. At August 27, 2015 and May 28, 2015, respectively, the $90,000 and $28,000 liability related to the Company’s interest rate swap contract was valued using Level 2 pricing inputs.

Level 3 – Assets or liabilities for which fair value is based on valuation models with significant unobservable pricing inputs and which result in the use of management estimates. At August 27, 2015, none of the Company’s fair value measurements were valued using Level 3 pricing inputs. At May 28, 2015, $7,737,000 related to impaired assets was valued using Level 3 pricing inputs.

Defined Benefit Plan

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

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands)
Service cost	$	197	$	175
Interest cost		328		311
Net amortization of prior service cost and actuarial loss		90		81
Net periodic pension cost	$	615	$	567

New Accounting Pronouncement

New Accounting Pronouncements – In April 2015, Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (Subtopic 835-30), which requires an entity to present debt issuance costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset, and requires the amortization of the costs be reported as interest expense. The new standard is effective for the Company in fiscal 2017 and the Company does not expect the adoption of this statement to have an impact on its overall financial position.

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The guidance will replace most existing revenue recognition guidance in Generally Accepted Accounting Principles when it becomes effective. The new standard is effective for the Company in fiscal 2018 and early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company has not yet selected a transition method and is evaluating the effect that the guidance will have on its consolidated financial statements and related disclosures.

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General (Tables)

3 Months Ended

Aug. 27, 2015

General [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

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

	Swap Agreements		Available for Sale Investments		Pension Obligation		Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 28, 2015	$	(17)	$	(11)	$	(5,284)	$	(5,312)
Other comprehensive loss before reclassifications		(66)		-		-		(66)
Amounts reclassified from accumulated other comprehensive loss (1)		29		-		-		29
Net other comprehensive loss		(37)		-		-		(37)
Balance at August 27, 2015	$	(54)	$	(11)	$	(5,284)	$	(5,349)

	Swap Agreements		Available for Sale Investments		Pension Obligation		Accumulated Other Comprehensive Loss
	(in thousands)
Balance at May 29, 2014	$	34	$	(11)	$	(4,581)	$	(4,558)
Other comprehensive income before reclassifications		40		-		-		40
Amounts reclassified from accumulated other comprehensive loss (1)		29		-		-		29
Net other comprehensive income		69		-		-		69
Balance at August 28, 2014	$	103	$	(11)	$	(4,581)	$	(4,489)

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

Schedule of Earnings Per Share, Basic and Diluted

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

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands, except per share data)
Numerator:
Net earnings attributable to The Marcus Corporation	$	14,651	$	12,432
Denominator:
Denominator for basic EPS		27,573		27,347
Effect of dilutive employee stock options		309		266
Denominator for diluted EPS		27,882		27,613
Net earnings per share – basic:
Common Stock	$	0.55	$	0.47
Class B Common Stock	$	0.50	$	0.43
Net earnings per share – diluted:
Common Stock	$	0.53	$	0.45
Class B Common Stock	$	0.49	$	0.42

Components of Shareholders' Equity Activity Attributable to The Marcus Corporation and Noncontrolling Interests

Activity impacting total shareholders’ equity attributable to The Marcus Corporation and noncontrolling interests for the 13 weeks ended August 27, 2015 and August 28, 2014 was as follows:

	Total Shareholders’ Equity Attributable to The Marcus Corporation		Noncontrolling Interests
	(in thousands)
Balance at May 28, 2015	$	343,779	$	2,456
Net earnings attributable to The Marcus Corporation		14,651		–
Net loss attributable to noncontrolling interests		–		(198)
Distributions to noncontrolling interests		–		(379)
Cash dividends		(2,814)		–
Exercise of stock options		266		–
Treasury stock transactions, except for stock options		45		–
Share-based compensation		364		–
Other		44		–
Other comprehensive loss, net of tax		(37)		–
Balance at August 27, 2015	$	356,298	$	1,879

	Total Shareholders’ Equity Attributable to The Marcus Corporation		Noncontrolling Interests
	(in thousands)
Balance at May 29, 2014	$	326,211	$	3,768
Net earnings attributable to The Marcus Corporation		12,432		–
Net loss attributable to noncontrolling interests		–		(156)
Distributions to noncontrolling interests		–		(719)
Cash dividends		(2,525)		–
Exercise of stock options		1,003		–
Treasury stock transactions, except for stock options		25		–
Share-based compensation		319		–
Other		32		–
Other comprehensive income, net of tax		69		–
Balance at August 28, 2014	$	337,566	$	2,893

Schedule of Net Benefit Costs

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

	13 Weeks Ended August 27, 2015		13 Weeks Ended August 28, 2014
	(in thousands)
Service cost	$	197	$	175
Interest cost		328		311
Net amortization of prior service cost and actuarial loss		90		81
Net periodic pension cost	$	615	$	567

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General (Details) - USD ($) $ in Thousands		3 Months Ended
		Aug. 27, 2015	Aug. 28, 2014
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]
Beginning Balance, Swap Agreements		$ (17)	$ 34
Other comprehensive income (loss) before reclassifications, Swap Agreements		(66)	40
Amounts reclassified from accumulated other comprehensive loss, Swap Agreements	[1]	29	29
Net other comprehensive income (loss), Swap Agreements		(37)	69
Ending Balance, Swap Agreements		(54)	103
Beginning Balance, Available for Sale Investments		(11)	(11)
Other comprehensive income (loss) before reclassifications, Available for Sale Investments		0	0
Amounts reclassified from accumulated other comprehensive loss, Available for Sale Investments	[1]	0	0
Net other comprehensive income (loss), Available for Sale Investments		0	0
Ending Balance, Available for Sale Investments		(11)	(11)
Beginning Balance, Pension Obligation		(5,284)	(4,581)
Other comprehensive income (loss) before reclassifications, Pension Obligation		0	0
Amounts reclassified from accumulated other comprehensive loss, Pension Obligation	[1]	0	0
Net other comprehensive income (loss), Pension Obligation		0	0
Ending Balance, Pension Obligation		(5,284)	(4,581)
Beginning Balance, Accumulated Other Comprehensive Loss		(5,312)	(4,558)
Other comprehensive income (loss) before reclassifications, Accumulated Other Comprehensive Loss		(66)	40
Amounts reclassified from accumulated other comprehensive loss, Accumulated Other Comprehensive Loss	[1]	29	29
Net other comprehensive income (loss), Accumulated Other Comprehensive Loss		(37)	69
Ending Balance, Accumulated Other Comprehensive Loss		$ (5,349)	$ (4,489)

[1] Amounts are included in interest expense in the consolidated statements of earnings.

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Derivatives and Hedging Activities (Details Textual) - USD ($)	3 Months Ended
	Aug. 27, 2015	May. 28, 2015	Feb. 28, 2013
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Notional Amount	$ 25,000,000
Description Of Derivative Variable Rate Basis	one-month LIBOR
Fair Value, Inputs, Level 2 [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Interest Rate Fair Value Hedge Liability at Fair Value	$ 90,000	$ 28,000
Interest Rate Swap [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Derivative, Amount of Hedged Item			$ 25,000,000
Derivative, Fixed Interest Rate			0.96%
Derivative, Variable Interest Rate	0.25%

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands		3 Months Ended
		Aug. 27, 2015	Aug. 28, 2014
Net earnings		$ 14,453	$ 12,276
Other comprehensive income (loss), net of tax:
Fair market value adjustment of interest rate swap, net of tax (benefit) effect of $(45) and $25, respectively		(66)	40
Reclassification adjustment on interest rate swap included in interest expense, net of tax effect of $20 and $20, respectively	[1]	29	29
Other comprehensive income (loss)		(37)	69
Comprehensive income		14,416	12,345
Comprehensive loss attributable to noncontrolling interests		(198)	(156)
Comprehensive income attributable to The Marcus Corporation		$ 14,614	$ 12,501

[1] Amounts are included in interest expense in the consolidated statements of earnings.

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Capital Lease Obligation

3 Months Ended

Aug. 27, 2015

Capital Lease Obligation [Abstract]

Capital Lease Obligation

3. Capital Lease Obligation

During fiscal 2012, the Company entered into a master licensing agreement with CDF2 Holdings, LLC, a subsidiary of Cinedigm Digital Cinema Corp (CDF2), whereby CDF2 purchased on the Company’s behalf, and then deployed and licensed back to the Company, digital cinema projection systems (the “systems”) for use by the Company in its theatres. As of August 27, 2015, 642 of the Company’s screens were utilizing the systems under a 10-year master licensing agreement with CDF2. Included in furniture, fixtures and equipment is $45,510,000 related to the digital systems as of August 27, 2015 and May 28, 2015, which is being amortized over the remaining estimated useful life of the assets. Accumulated amortization of the digital systems was $19,980,000 and $18,435,000 as of August 27, 2015 and May 28, 2015, respectively.

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

The Company’s capital lease obligation is being reduced as VPF’s are paid by the film distributors to CDF2. The Company has recorded the reduction of the obligation associated with the payment of VPF’s as a reduction of the interest related to the obligation and the amortization incurred related to the systems, as the payments represent a specific reimbursement of the cost of the systems by the studios. Based on the Company’s expected minimum number of eligible movies to be booked, the Company expects the obligation to be reduced by at least $5,081,000 within the next 12 months. This reduction will be recognized as an offset to amortization and is expected to offset the majority of the amortization of the systems.

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General (Details Textual) - USD ($)	3 Months Ended
	Aug. 27, 2015	Aug. 28, 2014	May. 28, 2015
General [Line Items]
Depreciation	$ 10,328,000	$ 8,960,000
Percentage Of Cash Dividends	110.00%
Fair Value, Inputs, Level 1 [Member]
General [Line Items]
Available-for-sale Securities, Fair Value Disclosure	$ 70,000		$ 70,000
Fair Value, Inputs, Level 2 [Member]
General [Line Items]
Interest Rate Fair Value Hedge Liability at Fair Value	$ 90,000		28,000
Fair Value, Inputs, Level 3 [Member]
General [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value, Beginning Balance			$ 7,737,000