Question-and-Answer Session
Operator
Thank you. (Operator instructions) Our first question comes from the line of Eric Palm, Baird. You may proceed.
Eric Palm – Baird
Hi guys. How are you doing?
Greg Marcus
Fine, thank you.
Eric Palm – Baird
I have a couple of questions for you. You obviously have capacity to take advantage of others distressed, either on their hotel or theatre side. What is your appetite to utilize your balance sheet for distressed acquisition opportunities on either side of the business?
Doug Neis
Well, Eric, it is a tough call. We are watching it very carefully. I think let me break it into two parts. On the theatre site, you are not seeing a lot of distress. I mean the only distress you will see on the theatres side I think will be potentially from financial sponsors that may have some economic problems. But the properties themselves are operating fairly robustly right now. The hotel side as you are well aware is a different story and we continue to evaluate these opportunities regularly. We are monitoring the market, we have maintained a balance sheet just for this, for these kinds of opportunities. Our history shows that we do take advantage of these going all the way back to the acquisition of (inaudible) which was essentially a purchase out of bankruptcy. So we will utilize our balance sheet, but as usual be conservative in our approach and cognizant of the times so that we don't want to cause ourselves any problems in these great times of uncertainty.
Eric Palm – Baird
If that is not too much distress on the theatre site, does that mean there is not a lot of pricing change on a per screen basis from last year or the year before?
Doug Neis
I don't think there is – really the only transaction in the last couple of years have been ours. There really been many theatre transactions to even benchmark it with.
Eric Palm – Baird
Because obviously that contrasts with the hotel side where there has obviously has been a lot of contraction in pricing?
Doug Neis
I think look at the multiple of the theatre stocks, you'll see some contraction in the theatre stock and those multiples across the board in almost every industry.
Eric Palm – Baird
Okay. What sort of steps are you taking at your hotels to rein in cost? I mean are you closing floors, are you cutting staffing, what sort of steps are you taking?
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