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TABLE OF CONTENTS

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~June 26, ~~2002~~2003

Commission file number: 333-87930

Regal Cinemas Corporation
(Exact name of Registrant as Specified in its Charter)

Delaware		02-0624987
Delaware (State or Other Jurisdiction of Incorporation or Organization)		02-0624987 (Internal Revenue Service Employer Identification Number)
(State or Other Jurisdiction of Incorporation or Organization)		(Internal Revenue Service Employer Identification Number)
7132 Regal Lane Knoxville, Tennessee (Address of Principal Executive Offices)		37918 (Zip code)

Registrant's Telephone Number, Including Area Code: 865/922-1123

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 and Exchange Act of 1934 during ~~the~~ the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: Yes ý ~~/x/~~ No / /o

~~Common~~ Indicate ~~Stock—7,500,000~~by ~~shares~~check ~~outstanding~~mark atwhether ~~November~~the registrant is an accelerated filer (as defined in Rule 8,12b-2 ~~2002~~of the Exchange Act): Yes o No ý

Common Stock—7,500,000 shares outstanding at August 11, 2003

TABLE OF CONTENTS

			Page No.
PART I—FINANCIAL INFORMATION
PART I—FINANCIAL INFORMATION			3
Item 1.		FINANCIAL STATEMENTS
	Item 1. FINANCIAL STATEMENTS		3
		UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
		UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS	3
		UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	4
		UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	5
		NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
		NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	6
Item 2.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		19
Item 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		34
Item 4.		CONTROLS AND PROCEDURES
	Item 4. CONTROLS AND PROCEDURES		34
PART II—OTHER INFORMATION
PART II—OTHER INFORMATION			35
Item 6.		EXHIBITS AND REPORTS ON FORM 8-K
	Item 6. EXHIBITS AND REPORTS ON FORM 8-K		35
SIGNATURES
SIGNATURES			36
CERTIFICATIONS
CERTIFICATIONS			37

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

~~Regal~~ REGAL ~~Cinemas~~CINEMAS ~~Corporation Unaudited~~CORPORATION UNAUDITED ~~Condensed~~CONDENSED ~~Consolidated~~CONSOLIDATED ~~Balance~~BALANCE ~~Sheets~~ SHEETS (In millions, except share data)

			Reorganized Company as of September 26, 2002			Predecessor Company as of December 27, 2001
			June 26, 2003			December 26, 2002 (Note 3)
ASSETS
Current assets:
	Cash and equivalents		$	~~112~~138.32		$	~~237~~178.7
	Restricted cash			226.37			—22.5
	Trade and other receivables			117.64			627.21
	Inventories			46.21			35.30
	Prepaid and other current assets			2134.96			1322.71
	Assets held for sale			8.7.9			59.3
	Deferred tax asset			111.06			—8.1
		Total current assets		~~172~~222.05			~~266~~272.28
Property and equipment:
	Land			~~104~~115.79			80115.61
	Buildings and leasehold improvements			~~961~~1,157.56			1,~~014~~025.38
	Equipment			~~429~~608.5			~~427~~497.18
	Construction in progress			312.2			13.89
		Total property and equipment		1,~~498~~894.92			1,~~523~~642.86
	Accumulated depreciation and amortization			(73190.5	)		(~~297~~127.37	)
		Total property and equipment, net		1,~~425~~703.47			1,~~226~~514.59
Goodwill and other intangible assets				~~102~~117.15			~~336~~115.25
Other assets				42.8			41.5
Deferred tax asset				86.2			57.2
		Total assets	$	1,742.3		$	1,870.4
Other assets				77.3			46.4
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
		Total assets	$	2,207.2		$	2,006.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current maturities of long-term debt		$	19.2		$	2.2
	Current maturities of long-term obligations		$	30.5		$	16.5
	Accounts payable			80151.24			40115.28
	Accrued expenses			~~103~~173.19			4294.60
	Current portion of deferred tax liability			0.6			—
	Bankruptcy related liabilities and claims			4.0			23.6
	Bankruptcy related liabilities and claims			33.3			—
		Total current liabilities		359.8			249.9
	Liabilities subject to compromise			—			183.9
Long-term debt, less current maturities				852.4			558.0
		Total current liabilities		236.4			268.9
Capital leases, less current maturities				22.7			1.4
Long-term debt, less current maturities				560.9			3.2
Lease financing arrangements				95.0			96.0
Capital leases, less current maturities				1.5			1.5
Other liabilities				50.7			44.0
Lease financing arrangements				96.5			97.8
		Total liabilities		1,380.6			949.3
Deferred tax liability				56.7			—
Shareholder's equity:
Other liabilities				37.4			23.6
	Preferred stock, $.001 par value; 5,000,000 shares authorized; none issued and outstanding at June 26, 2003 and December 26, 2002			—			—
Liabilities subject to compromise				—			1,899.3
	Common stock, $.001 par value; 25,000,000 shares authorized; 7,500,000 issued and outstanding at June 26, 2003 and December 26, 2002			—			—
		Total liabilities		989.4			2,294.3
	Additional paid-in capital			651.7			959.5
Shareholders' equity (deficit):
	Retained earnings			174.9			98.0
	Preferred stock, $.001 par value; 5,000,000 shares authorized; none issued and outstanding			—			—
		Total shareholder's equity		826.6			1,057.5
	Common stock; $.001 par value; 25,000,000 shares authorized; 7,500,000 issued and outstanding at September 26, 2002			—			196.5
		Total liabilities and shareholder's equity	$	2,207.2		$	2,006.8
	Additional paid-in capital			698.7			—
	Loans to shareholders			—			(3.1	)
	Retained earnings (deficit)			54.2			(617.3	)
		Total shareholders' equity (deficit)		752.9			(423.9	)
		Total liabilities and shareholders' equity (deficit)	$	1,742.3		$	1,870.4

See accompanying notes to unaudited condensed consolidated financial statements.

REGAL CINEMAS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions)

			Reorganized Company Thirteen weeks ended June 26, 2003			Reorganized Company Thirteen weeks ended June 27, 2002 (Note 3)			Reorganized Company Twenty-six weeks ended June 26, 2003			Reorganized Company Twenty-two weeks ended June 27, 2002 (Note 3)			Predecessor Company Four weeks ended January 24, 2002
Revenues:
	Admissions		$	377.7		$	342.2		$	685.2		$	540.8		$	75.1
	Concessions			147.2			142.8			263.7			221.9			29.5
	Other operating revenues			35.0			20.0			62.8			28.7			3.7

		Total revenue		559.9			505.0			1,011.7			791.4			108.3
Operating expenses:
	Film rental and advertising costs			215.1			194.4			374.0			294.9			38.1
	Cost of concessions			20.4			20.6			36.8			32.2			4.3
	Rent expense			50.4			43.4			93.5			69.9			10.6
	Other operating expenses			135.1			112.4			254.4			186.6			24.0
	General and administrative expenses			14.9			16.6			28.3			26.1			2.6
	Merger and restructuring expenses and amortization of deferred stock compensation			1.3			3.7			2.6			10.3			—
	Depreciation and amortization			34.9			30.2			66.3			49.2			6.4
	Loss (gain) on disposal and impairment of operating assets			0.6			(0.1	)		(0.8	)		(0.6	)		0.6

		Total operating expenses		472.7			421.2			855.1			668.6			86.6

Operating income				87.2			83.8			156.6			122.8			21.7
Other income (expense):
Interest expense				(15.6	)		(15.2	)		(29.8	)		(24.9	)		(8.5	)
Interest and other income				0.3			0.2			0.8			0.3			—
Gain (loss) on extinguishment of debt				—			(1.3	)		—			(0.2	)		661.9

Income before reorganization items and income taxes				71.9			67.5			127.6			98.0			675.1
Reorganization items				—			—			—			—			(254.3	)

Income before income taxes				71.9			67.5			127.6			98.0			420.8
Provision for income taxes				28.9			28.5			50.7			40.1			—

Net income			$	43.0		$	39.0		$	76.9		$	57.9		$	420.8

See accompanying notes to unaudited condensed consolidated financial statements

3 REGAL CINEMAS CORPORATION UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions)

Regal Cinemas Corporation Unaudited Condensed Consolidated Statements of Operations (In millions)

				Reorganized Company Twenty-six weeks ended June 26, 2003			Reorganized Company Twenty-two weeks ended June 27, 2002 (Note 3)			Predecessor Company Four weeks ended January 24, 2002
Cash flows from operating activities:
Net income				$	76.9		$	57.9		$	420.8
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			66.3			49.2			6.4
		Provision for deferred income taxes			0.5			32.5			—
		Amortization of deferred stock compensation			1.3			0.3			—
		Cancellation of shareholder loans			—			—			3.1
		Loss (gain) on disposal and impairment of operating assets			(0.8	)		(0.6	)		0.6
		Loss (gain) on extinguishment of debt			—			0.3			(661.9	)
		Reorganization items			—			—			254.3
	Changes in operating assets and liabilities:
		Accounts receivable			0.6			(5.4	)		2.6
		Inventories			(0.5	)		(0.3	)		—
		Prepaid expenses and other assets			(38.6	)		(7.4	)		(1.8	)
		Accounts payable			26.0			13.7			7.1
		Accrued expenses and other liabilities			76.0			13.4			(81.0	)

			Net cash provided by (used in) operating activities		207.7			153.6			(49.8	)
Cash flows from investing activities:
	Capital expenditures				(61.4	)		(25.6	)		(2.0	)
	Cash used to acquire Hoyts, net of cash acquired				(187.7	)		—
	Cash used to acquire UATG				(311.4	)		—
	Proceeds from sale of fixed assets				8.8			1.8			—
	Decrease in restricted cash and other				24.9			14.1			0.4

			Net cash used in investing activities		(526.8	)		(9.7	)		(1.6	)
Cash flows from financing activities:
	Proceeds from senior credit facility				315.0			—			270.0
	Payments on new senior subordinated notes							(3.4	)
	Proceeds from new senior subordinated notes				—			155.3			200.0
	Payment of debt financing costs				(4.3	)		(6.2	)		(15.9	)
	Cash of subsidiaries at contribution date				—			45.5			—
	Excess purchase price retained by parent				—			(34.5	)		—
	Cash used to redeem Edwards preferred stock				—			(75.3	)		—
	Cash used to redeem Edwards senior subordinated notes				—			(11.3	)		—
	Cash used to payoff Edwards term loan				—			(180.0	)		—
	Payment of bankruptcy claims and liabilities				(20.8	)		(72.0	)		—
	Payments on long-term obligations				(11.3	)		—			—
	Payment of old senior credit facility				—			—			(274.5	)
	Payment of old senior subordinated notes				—			—			(160.0	)
	Payment of old equipment financing				—			—			(17.7	)
	Other debt and capital lease activity				—			(0.9	)		(0.2	)

			Net cash (used in) provided by financing activities		278.6			(182.8	)		1.7
Cash used in reorganization					—			—			(21.3	)
	Net increase (decrease) in cash equivalents				(40.5	)		(38.9	)		(71.0	)
	Cash and cash equivalents, beginning of period				178.7			166.7			237.7

			Cash and cash equivalents, end of period	$	138.2		$	127.8		$	166.7

SUPPLEMENTAL NON-CASH FINANCING ACTIVITIES:
	Exchange of RCI senior term debt for common stock			$	—		$	—		$	725.4
	Exchange of minorities shares in Regal Cinemas for Regal Entertainment Group			$	—		$	44.1		$	—
	Parent's basis in Edwards acquired by Regal Cinemas, Inc.			$	—		$	84.2		$	—

			Reorganized Company						Predecessor Company
			Quarter ended September 26, 2002			Thirty-five weeks ended September 26, 2002			Four weeks ended January 24, 2002			Quarter ended September 27, 2001			Three Quarters ended September 27, 2001
Revenues:
	Admissions		$	284.1		$	763.0		$	75.1		$	209.2		$	609.2
	Concessions			116.1			312.8			29.5			85.2			243.9
	Other operating revenues			14.7			37.3			3.7			11.6			32.3
		Total operating revenues		414.9			1,113.1			108.3			306.0			885.4
Operating expenses:
	Film rental and advertising costs			152.9			414.7			38.1			111.9			323.4
	Cost of concessions			16.4			44.8			4.3			12.4			35.8
	Other theatre operating expenses			138.6			360.2			34.6			109.6			342.0
	General and administrative expenses			11.6			34.0			2.6			8.9			24.4
	Merger and restructuring expenses			1.7			10.4			—			3.5			11.4
	Depreciation and amortization			28.0			71.9			6.4			22.3			69.0
	Theatre closing costs and loss (gain) on disposal of operating assets			0.2			(0.4	)		0.1			2.5			31.9
	Loss on impairment of assets			—			—			0.5			13.0			65.3
		Total operating expenses		349.4			935.6			86.6			284.1			903.2
Operating income (loss)				65.5			177.5			21.7			21.9			(17.8	)
Other income (expense):
Interest expense				(15.3	)		(40.3	)		(8.5	)		(47.1	)		(146.8	)
Interest income				0.2			0.5			—			1.4			4.1
Income (loss) before reorganization items, income taxes, and extraordinary item				50.4			137.7			13.2			(23.8	)		(160.5	)
Reorganization items				—			—			(254.3	)		—			—
Income (loss) before income taxes and extraordinary item				50.4			137.7			(241.1	)		(23.8	)		(160.5	)
Provision for income taxes				(19.3	)		(55.1	)		—			—			—
Income (loss) before extraordinary item				31.1			82.6			(241.1	)		(23.8	)		(160.5	)
Extraordinary item:
	Gain (loss) on extinguishment of debt			0.1			(0.2	)		661.9			(2.7	)		12.3
Net income (loss)			$	31.2		$	82.4		$	420.8		$	(26.5	)	$	(148.2	)

See accompanying notes to unaudited condensed consolidated financial statements.

~~See~~ ~~accompanying~~ ~~notes~~ REGAL toCINEMAS ~~unaudited~~CORPORATION NOTES ~~condensed~~TO ~~consolidated~~UNAUDITED ~~financial~~CONDENSED ~~statements~~CONSOLIDATED FINANCIAL STATEMENTS

Regal Cinemas Corporation Unaudited Condensed Consolidated Statements of Cash Flows (In millions)

				Reorganized Company			Predecessor Company
				Thirty-five weeks ended September 26, 2002			Four weeks ended January 24, 2002			Three Quarters ended September 27, 2001
Cash Flows from operating activities:
Net income (loss)				$	82.4		$	420.8		$	(148.2	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
	Depreciation and amortization				71.9			6.4			69.0
	Provision for deferred income taxes				22.8			—			—
	Amortization of deferred stock compensation				0.7			—			—
	Writeoff of shareholder loans				—			3.1			—
	Loss on impairment of assets				—			0.5			65.3
	(Gain) Loss on disposal of operating assets				(0.4	)		—			18.7
	Theater closing costs				—			—			13.2
	Extraordinary (gain) loss on extinguishment of debt				0.2			(661.9	)		(14.2	)
	Reorganization items				—			254.3			—
	Changes in operating assets and liabilities:
		Accounts receivable			1.0			2.6			(6.4	)
		Inventories			0.2			—			2.4
		Prepaids and other assets			(6.3	)		(1.8	)		(7.3	)
		Accounts payable			11.1			7.1			(29.3	)
		Accrued expenses and other liabilities			20.7			(80.9	)		93.2
			Net cash provided by (used in) operating activities		204.3			(49.8	)		56.4
Cash flows from investing activities:
	Capital expenditures				(26.7	)		(2.0	)		(23.7	)
	Proceeds from sale of fixed assets				5.1			—			5.1
	Decrease in restricted cash and other				6.5			0.4			2.7
			Net cash used in investing activities		(15.1	)		(1.6	)		(15.9	)
Cash flows from financing activities:
	Proceeds from new senior credit facility				—			270.0			—
	Payments on new senior credit facility				(45.0	)		—			—
	Proceeds from new senior subordinated notes				155.3			200.0			—
	Payment of debt financing costs				(9.5	)		(15.9	)		—
	Cash of Edwards at contribution date				44.9			—			—
	Excess purchase price retained by parent				(34.5	)		—			—
	Cash used to redeem Edwards preferred stock				(75.3	)		—			—
	Cash used to redeem Edwards senior subordinated notes				(11.3	)		—			—
	Cash used to payoff Edwards term loan				(180.0	)		—			—
	Payment of bankruptcy claims and liabilities				(86.8	)		—			—
	Payment of old senior credit facility				—			(274.5	)		—
	Payment of old senior subordinated notes				—			(160.0	)		—
	Payment of old equipment financing				—			(17.7	)		—
	Other debt and capital lease activity				(1.4	)		(0.2	)		(3.3	)
			Net cash provided by (used in) financing activities		(243.6	)		1.7			(3.3	)
	Cash used in reorganization				—			(21.3	)		—
			Net increase (decrease) in cash equivalents		(54.4	)		(71.0	)		37.2
	Cash and cash equivalents, beginning of period				166.7			237.7			118.8
			Cash and cash equivalents, end of period	$	112.3		$	166.7		$	156.0
SUPPLEMENTAL CASH FLOW INFORMATION:
	Cash paid (refunds received) for income taxes, net			$	4.2		$	—		$	(0.2	)
	Cash paid for interest				28.2			203.0			25.6
SUPPLEMENTAL NON-CASH FINANCING ACTIVITIES:
	Exchange of Regal Cinemas, Inc. senior term debt for common stock			$	—		$	725.4		$	—
	Capitalization of lease financing arrangements				—			—			7.1
	Exchange of minorities shares in Regal Cinemas for Regal Entertainment Group				44.1			—			—
	Parent's basis in Edwards acquired by Regal Cinemas, Inc.				84.2			—			—

See accompanying notes to unaudited condensed consolidated financial statements

REGAL CINEMAS CORPORATION NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 26, 2002

1. THE COMPANY AND BASIS OF PRESENTATION

Regal Cinemas Corporation and its wholly owned subsidiaries (collectively, the "Company" or "Regal Cinemas"), including Regal Cinemas, Inc. ~~and its subsidiaries~~ ("RCI") and its subsidiaries, which ~~includes~~include Edwards Theatres, Inc. ~~and its subsidiaries~~ ("Edwards"), ~~operate~~Regal ~~multi-screen~~CineMedia ~~motion~~Corporation ~~picture~~("RCM"), ~~theatres~~Hoyts ~~principally~~Cinemas ~~throughout~~Corporation ~~the~~("Hoyts") ~~eastern~~ and ~~northwestern~~ United ~~States.~~Artists AsTheatre ~~described~~Group ~~in Note 3—~~("~~Acquisition of Edwards Theatres, Inc.,~~UATG"), ~~RCI~~operate multi-screen ~~acquired~~motion ~~all~~picture oftheatres throughout the ~~outstanding~~United ~~capital~~States. ~~stock~~As of ~~Edwards from a subsidiary of its parent corporation, Regal Entertainment Group, on April~~June 1726, ~~2002. Unless otherwise noted~~2003, the "Company" oroperated ~~"Regal Cinemas" refers to Regal Cinemas Corporation and its subsidiaries on a consolidated basis~~5,101 ~~which~~screens ~~includes~~in ~~RCI~~430 ~~and~~theatres ~~Edwards as of January 24, 2002, the deemed date at which The Anschutz Corporation and its subsidiaries ("Anschutz") initially held common control~~ in ~~both~~37 ~~RCI and Edwards~~states. The Company formally operates on a 52 -week fiscal year with each quarter generally consisting of 13 weeks, unless otherwise noted. The Company's fiscal year ends on the first Thursday after December 25, which in certain years results in a 53 -week fiscal year.

On October 11, 2001, RCI and its subsidiaries at that time filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Middle District of Tennessee (the "Bankruptcy Court") under case numbers 301-11305 through 301-11320 (the "Chapter 11 Case") seeking court supervision of RCI's restructuring efforts. Pursuant to the plan of reorganization (the "Plan"), holders of its then existing senior credit facilities agreed to exchange approximately $725 million of their pre-petition claims for 100% of RCI's newly-issued common stock. Other principal terms of the Plan included:

•: cash payment in full of principal and accrued and unpaid interest under RCI's then existing senior credit facility for certain holders;
•: cash payment in full of all other secured claims, relating primarily to RCI's equipment financing facility;
•: satisfaction and retirement of RCI's outstanding subordinated debt by a cash payment equal to approximately 20% of the claims amount; and
•: distributions to the holders of general unsecured claims of 100% of such holder's allowed claim.

On December 7, 2001, the Bankruptcy Court confirmed the Plan and as a result, RCI commenced appropriate actions to consummate the Plan and emerged from bankruptcy on January 29, 2002 with The Anschutz Corporation and its subsidiaries ("Anschutz") acquiring a controlling equity interest. Also on January 29, 2002, RCI became a wholly owned subsidiary of Regal Cinemas when Anschutz and the other shareholders of RCI exchanged their common stock of RCI for 7,500,000 shares of Regal Cinemas.

Regal Cinemas ~~Corporation~~ was formed for the primary purpose of becoming a borrower under the senior credit facilities and the issuer of the $200 million of 93/8% ~~senior~~ senior subordinated notes due 2012 issued upon RCI's emergence from bankruptcy. Approximately $1.8 billion of RCI's long-term debt plus approximately $196 million of accrued ~~and~~ and unpaid interest was discharged under the terms of the Plan in exchange for total payments of approximately $575.3 million. Such liabilities were classified as a component of "liabilities subject to compromise" on the accompanying December 27, 2001 Predecessor Company (as defined below) historical debtors-in-possession balance sheet. The Company funded these payments through (i) cash on hand of RCI, (ii) a term loan ($270 million) borrowed under new senior credit facilities, and (iii) the issuance of $200 million of new 93/8% senior subordinated notes due 2012.

6 As described in Note 3—"Acquisitions," RCI acquired all of the outstanding capital stock of Edwards, RCM, Hoyts and UATG from a subsidiary of its parent corporation, Regal Entertainment Group ("REG"), during 2002 and 2003. Unless otherwise noted, the "Company" or "Regal Cinemas" refers to Regal Cinemas Corporation and its subsidiaries on a consolidated basis, which includes RCI, Edwards and the assets of UATG as of January 24, 2002 and RCM as of February 21, 2002, the deemed dates at which Anschutz initially held common control in RCI, Edwards, RCM and the assets of UATG, and includes Hoyts as of March 28, 2003, the date at which REG initially held common control in both RCI and Hoyts.

The financial statements of the Company after RCI's emergence from bankruptcy reflect the predecessor cost basis of Anschutz and the reorganization value attributable to the common stock owned by the other RCI stockholders. The Company's 2002 financial statements include information reflecting the four week period ended January 24, 2002 (pre-reorganization) and the ~~quarter and thirty~~twenty-~~five~~two week period ended ~~September~~June 2627, 2002 (post-reorganization), which includes the results of operations of Edwards and the assets of UATG from January 24, 2002 ~~(see~~ ~~Note 3—"Acquisition~~and of ~~Edwards~~RCM ~~Theatres,~~from February ~~Inc~~21, 2002.~~").~~ As a result, the Company's post-reorganization financial statements have not been prepared on a consistent basis with the pre-reorganization financial statements and are not comparable in all respects to the financial statements prior to the reorganization. For financial reporting purposes, the inception date of the Reorganized Company (as defined below) is deemed to have occurred on January 24, 2002. As such, operating results and financial position for periods subsequent to January 24, 2002 are herein referred to as the "Reorganized Company" and for all periods ending on or prior to January 24, 2002 as the "Predecessor Company"." ~~See~~In connection with the acquisition of Hoyts and ~~Note 4—"Reorganization"~~UATG, the accompanying financial statements presented herein reflect the results of operations of Hoyts for aall ~~summary~~periods subsequent to the acquisition date of March 28, 2003 and the ~~Company's~~results ~~reorganization~~of operations ~~adjustments~~of the assets of UATG from January 24, 2002, the deemed date at which Anschutz initially held common control in both RCI and the assets of UATG.

The Company has prepared the unaudited condensed consolidated balance sheet as of ~~December~~June 2726, ~~2001~~2003 ~~has~~and ~~been~~the ~~presented~~unaudited incondensed ~~conformity~~consolidated statements of operations and cash flows in accordance with accounting principles generally accepted in the ~~AICPA's~~United ~~Statement~~States of ~~Position~~America ~~90-7,~~for ~~"Financial~~interim ~~Reporting~~financial Byinformation ~~Entities In~~and ~~Reorganization~~the ~~Under~~rules and regulations of the ~~Bankruptcy~~Securities ~~Code"~~and ~~("SOP~~Exchange ~~90-7")~~Commission. Accordingly, ~~which~~certain ~~requires~~information aand ~~segregation~~footnote ofdisclosures ~~liabilities~~typically ~~subject~~included toin ~~compromise~~an byaudited ~~the~~annual ~~Bankruptcy~~report ~~Court~~have asbeen ofcondensed ~~the~~or ~~bankruptcy~~omitted ~~filing~~for ~~date~~this ~~and identification~~quarterly report. In the opinion of management, all adjustments ~~transactions~~(which ~~and~~include ~~events~~only ~~that~~normal ~~are~~recurring ~~directly~~adjustments) ~~associated~~necessary ~~with~~to present fairly in all material respects the ~~reorganization~~financial position, results of ~~RCI.~~operations ~~Accordingly,~~and ~~the~~cash ~~accompanying~~flows ~~consolidated~~for ~~balance~~all ~~sheet~~periods presented ashave ofbeen made. The December 2726, ~~2001~~2002 ~~does not~~information ~~reflect~~is derived from the ~~effects~~audited ofconsolidated ~~the~~financial ~~reorganization~~statements ofincluded ~~RCI~~in ~~through~~Regal ~~the~~Cinemas' ~~Chapter~~Annual 11Report ~~Case~~on Form 10-K filed on March 26, 2003 with the Securities and ~~represents~~Exchange ~~RCI~~Commission (File No. 333-87930) for the Company's fiscal year ended December 26, 2002. Users should read the unaudited condensed consolidated financial ~~position~~statements ~~and~~included ~~capital~~herein ~~structure~~in ~~existing~~conjunction ~~before~~with the ~~effective~~consolidated ~~date~~financial ofstatements and notes thereto included in the ~~Plan.~~Company's ~~Accordingly,~~audited consolidated financial statements. ~~for~~The ~~2001~~results ~~presented~~of ~~herein~~operations ~~should~~for bethe ~~read~~thirteen ~~with~~weeks ~~the~~and ~~understanding~~twenty-six ~~that~~weeks ~~the~~ended ~~reorganization~~June 26, ~~significantly~~2003 ~~altered~~are ~~the~~not ~~historical~~necessarily ~~capital~~indicative ~~structure~~of ~~reflected~~the operating inresults ~~the~~that ~~accompanying~~may ~~balance~~be ~~sheet~~achieved asfor ofthe ~~December 27,~~full ~~2001~~2003 fiscal year.

~~The~~Net ~~Company,~~income ~~without audit, has prepared the condensed consolidated balance sheet as of September 26, 2002, the condensed consolidated statements of operations for the quarter~~ and ~~thirty-five~~ ~~weeks~~total ~~ended~~comprehensive ~~September 26,~~income ~~2002,~~are the ~~four~~same ~~weeks ended January 24, 2002 and the quarter and three quarters ended September 27, 2001 and the condensed consolidated statements of cash flows~~ for the thirty-five weeks ended September 26, 2002, the four weeks ended January 24, 2002 and the three quarters ended September 27, 2001 in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and footnote disclosures typically included in an audited annual report have been condensed or omitted for this quarterly report. In the opinion of management, all ~~adjustments (which include only normal recurring adjustments) necessary to present fairly in all material respects the financial position, results of operations and cash flows for all~~ periods presented ~~have been made~~. The December 27, 2001 information is derived from the audited December 27, 2001 consolidated financial statements of RCI included in Regal Cinemas' Registration Statement on Form S-4, as amended (File No. 333-87930), filed with the Securities and Exchange Commission on July 9, 2002. Users should read the unaudited condensed consolidated financial statements included herein in conjunction with the consolidated financial statements and notes thereto included in RCI's audited financial statements. The results of operations for the quarter ended September 26, 2002 are not necessarily indicative of the operating results for the full year.

~~Net~~Certain ~~income~~reclassifications ~~and~~have ~~comprehensive~~been ~~income~~made ~~are~~to the ~~same~~2002 ~~for~~financial ~~all~~statements ~~periods~~to ~~presented~~conform to the 2003 presentation.

Certain reclassifications have been made to the 2001 financial statements to conform to the 2002 presentation.

2. FORMATION OF REGAL ENTERTAINMENT GROUP

Exchange Transaction

OnThe ~~March 8,~~Company ~~2002,~~became ~~the~~a ~~holders~~wholly ofowned ~~100%~~subsidiary of ~~the~~REG ~~capital~~on ~~stock~~April 12, of2002 ~~Regal~~in ~~Cinemas~~conjunction ~~entered~~with ~~into~~ an ~~agreement to~~ exchange ~~their~~transaction ~~stock~~in ~~for~~which ~~shares~~REG, ofthrough ~~stock~~its inwholly ~~Regal~~owned subsidiary Regal Entertainment ~~Group~~Holdings, Inc. ("~~REG~~REH")., ~~REG~~also isacquired ~~an entity controlled by Anschutz~~Edwards, ~~which~~United ~~was~~Artists ~~the~~Theatre ~~controlling~~Company ~~stockholder~~(including ofits ~~Regal~~subsidiary ~~Cinemas~~United ~~prior~~Artists toTheatre ~~the~~Circuit, Inc. ~~exchange~~("UATC")) ~~transaction~~and RCM. REG ~~also~~is ~~agreed~~controlled toby ~~exchange~~Anschutz, ~~its~~which ~~stock for~~controlled ~~stock~~each ~~representing approximately 90%~~ of ~~the~~us, ~~common~~Edwards, ~~stock of~~ United Artists Theatre Company ~~("United~~and ~~Artists")~~RCM ~~and~~prior ~~100%~~to REG's acquisition of ~~Edwards~~us and ~~Regal~~them ~~CineMedia~~in ~~Corporation~~the ~~("Regal~~exchange ~~CineMedia")~~transaction. Following the exchange transaction, ~~each~~RCI ofacquired ~~which were~~Edwards, ~~also~~RCM, ~~commonly~~Hoyts ~~controlled~~and byUATG ~~Anschutz~~from ~~prior~~REH toin ~~the~~a ~~exchange~~series ~~transaction~~of transactions discussed in Note 3—"Acquisitions" below.

~~On April 12,~~ ~~2002,~~Initial ~~through~~Public aOffering ~~series~~ of ~~transactions,~~ REG issued (1) 70,538,017 shares of Class B common stock to Anschutz in exchange for its controlling equity interests in Regal Cinemas, United Artists, Edwards and Regal CineMedia, (2) 14,052,320 shares of Class B common stock to OCM Principal Opportunities Fund II, L.P. and its subsidiaries ("Oaktree's Principal Activities Group") in exchange for its contribution of capital stock of Regal Cinemas and Edwards, and (3) 27,493,575 shares of Class A common stock to the other stockholders of Regal Cinemas, United Artists, Edwards and Regal CineMedia party to an exchange agreement in exchange for their capital stock of Regal Cinemas, United Artists, Edwards and Regal CineMedia.

~~Upon the~~In ~~closing of the exchange transaction~~May 2002, ~~the~~REG ~~holders~~issued of18.0 million ~~outstanding~~shares ~~options~~ of ~~United~~its ~~Artists and Regal Cinemas received replacement options to purchase 8,832,147 shares of~~ Class A common stock ~~at prices ranging from $4.44 to $12.87 per share. REG also granted to holders of United Artists warrants~~ in ~~exchange~~an ~~for~~initial ~~their~~public ~~contribution~~offering toat ~~REG~~a ofprice ~~outstanding warrants to purchase 3,750,000 shares~~ of ~~United~~$19.00 ~~Artists'~~per ~~common stock~~share, receiving ~~warrants~~aggregate tonet ~~purchase~~offering 3proceeds,~~928,185~~ ~~shares~~net of ~~Class B~~underwriting ~~common~~discounts, ~~stock~~commissions ~~at $8.88 per share~~ and ~~warrants~~other tooffering ~~purchase 296~~expenses,~~129~~ ~~shares~~ of ~~Class A~~ ~~common stock at~~ $314.8 million.88 ~~per share.~~

~~Following the exchange transaction, Anschutz transferred beneficial ownership of 1,455,183 shares of Class B common stock to Oaktree's Principal Activities Group~~3. In addition, Anschutz acquired an additional 697,620 shares of Class B common stock in May 2002. As a result, Anschutz owns approximately 81.8% of REG's outstanding Class B common stock, representing as of September 26, 2002 approximately 77.6% of the combined voting power of REG's outstanding common stock and, therefore, has the ability to direct the election of members of REG's board of directors and to determine the outcome of other matters submitted to the vote of REG's stockholders. Because Anschutz controls REG, the Company's parent and sole stockholder, Anschutz, has the ability to control the Company. ACQUISITIONS

~~Initial~~ ~~Public~~Acquisition ~~Offering~~ of ~~Regal~~United ~~Entertainment~~Artists Theatre Group

InOn ~~May~~June ~~2002~~6, ~~REG~~2003, ~~issued~~RCI 18acquired all of the outstanding capital stock of UATG from REH for an estimated cash purchase price of approximately $311.04 million. ~~shares~~The assets of ~~its~~UATG ~~Class A~~consist ~~common~~of ~~stock~~438 screens in an46 ~~initial~~leased ~~public~~theatres, ~~offering~~certain fee properties and certain other assets under construction. The ~~initial~~formation ~~public~~and ~~offering~~capitalization of UATG was effected through a ~~Registration~~series ~~Statement~~of ontransactions ~~Form S-1~~among ~~(File~~REH, NoUATG, UATC and United Artists Properties I Corp. ~~333-84096~~ ("Prop I"). ~~that~~The ~~was~~assets ~~declared~~used ~~effective~~to bycapitalize ~~the~~UATG ~~Securities~~were ~~and~~deemed ~~Exchange~~to ~~Commission~~be onunder ~~May 8~~the control of Anschutz, ~~2002. All~~through ~~18.0 million~~Anschutz's ~~shares~~ownership ~~were~~of ~~sold~~United atArtists anTheatre ~~initial~~Company ~~public~~(the ~~offering~~parent ~~price~~ of ~~$19.00~~UATC ~~per~~and ~~share~~Prop I), ~~for~~from anMarch 2, ~~aggregate~~2001, ~~offering~~the ~~price~~date ofthat these companies emerged from bankruptcy. The Company entered into an additional $~~342~~315.0 million, ~~through~~term aloan ~~syndicate~~under ofthe ~~underwriters~~amended ~~managed~~and ~~by Credit~~restated ~~Suisse~~Regal ~~First~~Cinemas ~~Boston~~senior ~~Corporation,~~credit ~~Lehman~~facility ~~Brothers Inc.,~~to ~~Bear,~~fund ~~Stearns &~~the Copurchase price of UATG. See Note ~~Inc.~~4—"Long-Term Obligations" for further description of the amended and ~~Salomon~~restated ~~Smith~~Regal ~~Barney Inc~~Cinemas senior credit facility.

Following the acquisition, UATG became a wholly owned subsidiary of RCI and became a guarantor under the amended and restated Regal Cinemas senior credit facility and the Regal Cinemas 93/8% senior subordinated notes. As a result of RCI being under common control with UATG, the transaction was accounted for as a contribution of UATG to RCI by REH, at REG's historical cost basis of the assets of UATG, in a manner similar to a pooling of interests. Accordingly, the accompanying financial statements presented herein reflect the results of operations of the assets of UATG from January 24, 2002, the deemed date at which Anschutz initially held common control in both RCI and the assets of UATG.

The purchase price for the leased theatres was based on a valuation of the operations of the leased theatres on an ongoing basis and the purchase price for the owned theatre properties was based on the appraised value for such properties. The amounts recorded based on the acquisition of UATG by the Company were current assets ($7.8 million), property and equipment ($120.0 million), deferred tax assets ($77.3 million), goodwill ($56. ~~ACQUISITION~~3 million), OFother ~~EDWARDS~~assets ~~THEATRES~~($1.6 million), ~~INC~~current liabilities ($6. 8 million), other liabilities ($3.6 million) and excess purchase price recorded in additional paid-in capital ($58.8 million).

On ~~April 17,~~Acquisition ~~2002, RCI acquired all~~ of ~~the~~Hoyts ~~outstanding~~Cinemas capital stock of Edwards from Regal Entertainment Holdings, Inc. ("REH"), a wholly owned subsidiary of REG, for an aggregate purchase price of approximately $272.5 million, of which $238.0 million was contributed to Edwards. Following the acquisition, Edwards became a wholly owned subsidiary of RCI. As a result of RCI being under common control with Edwards, the transaction was accounted for as a contribution of Edwards to RCI by REH, at REG's historical cost basis of Edwards, in a manner similar to a pooling of interests. Accordingly, the unaudited condensed consolidated statements of operations for the quarter and thirty-five weeks ended September 26, 2002 presented herein, reflect the results of operations of Edwards from January 24, 2002, the deemed date at which Anschutz initially held common control in both RCI and Edwards. Corporation

~~In connection~~On ~~with the acquisition of Edwards, Regal Cinemas issued $150~~March million principal amount of 93/8% senior subordinated notes due 2012 under the indenture pursuant to which Regal Cinemas sold $200 million principal amount of 93/8% senior subordinated notes due 2012 in January 2002. The proceeds of the notes issued on April 1728, ~~2002~~2003, ~~together with cash on hand at~~ RCI ~~and~~acquired ~~Edwards,~~all ~~were~~of ~~used by Regal Cinemas, Inc. to acquire Edwards from REH. REH used~~ the ~~proceeds~~outstanding ~~from~~capital ~~its~~stock ~~sale~~ of ~~Edwards~~Hoyts tofrom ~~RCI~~REG ~~to repay~~for ~~approximately~~a ~~$180.7 million~~purchase ofprice ~~senior bank debt, including accrued interest~~ of ~~Edwards, to redeem~~ approximately $12213.01 million. ~~of Edwards Subordinated Notes (as defined below),~~The ~~including~~purchase ~~accrued~~price ~~interest,~~included ~~primarily~~cash ~~held~~of ~~by Anschutz and Oaktree's Principal Activities Group, and to redeem~~ approximately $75188.31 million ~~of redeemable preferred stock of Edwards held by Anschutz, Oaktree's Principal Activities Group, Ms. Carole Ann Ruoff~~ and ~~Ms. Joan~~the ~~Edwards~~assumption ~~Randolph, both former stockholders~~ of ~~Edwards,~~certain ~~and~~capital ~~from~~lease ~~Edwards Affiliated Holdings, LLC, a company controlled by Mr. W. James Edwards, another former stockholder of Edwards. The difference between the carrying amount~~ and ~~redemption~~other ~~price~~obligations ofwith ~~the~~an ~~redeemable~~aggregate ~~preferred~~fair ~~stock~~value of approximately $2825.20 million ~~was recorded as a charge to equity~~. InHoyts ~~addition,~~is ~~the~~comprised ~~Company~~of ~~recorded~~a antotal ~~extraordinary loss~~ of ~~approximately~~50 ~~$1.3 million,~~theatres ~~net~~and of534 ~~related~~screens ~~tax,~~located asin a10 ~~result~~states ofin the ~~early redemption~~Northeastern ofUnited ~~the Edwards Subordinated Notes~~States.

4 Following the acquisition, Hoyts became a wholly owned subsidiary of RCI and became a guarantor under the amended and restated Regal Cinemas senior credit facility and the Regal Cinemas 93/8% senior subordinated notes. ~~REORGANIZATION~~ As a result of RCI being under common control with Hoyts, the transaction was accounted for as a contribution of Hoyts to RCI by REG, at REG's historical cost basis of Hoyts, in a manner similar to a pooling of interests. Accordingly, the unaudited condensed consolidated statements of operations for the thirteen weeks and twenty-six weeks ended June 26, 2003 presented herein reflect the results of operations of Hoyts from March 28, 2003.

InThe following ~~connection~~is ~~with~~a ~~the~~preliminary ~~emergence~~summary ~~from~~of ~~bankruptcy~~the ~~and~~allocation ~~acquisition~~ of ~~a controlling equity interest by Anschutz,~~ the ~~Company~~purchase ~~made~~price ~~certain adjustments in accordance with SOP 90-7~~ to ~~reflect~~the ~~RCI's~~estimated ~~emergence~~fair ~~from~~values ~~bankruptcy~~of ~~and simultaneously allocated Anschutz's predecessor cost basis to~~ the ~~Company's remaining~~ assets acquired and liabilities. ~~The~~assumed ~~most significant~~at ~~of these adjustments related to~~ the ~~discharge~~date of ~~certain~~acquisition (in millions): ~~RCI~~current ~~debt~~assets ~~obligations~~($1.1 million), ~~and~~buildings, ~~certain~~leasehold ~~other~~improvements ~~liabilities~~and ~~subject~~equipment ~~to compromise~~($200.2 million), ~~the issuance~~goodwill of($0.9 million), ~~RCI's~~deferred ~~new~~income ~~senior~~tax ~~credit facilities and senior subordinated notes~~asset ($33.0 million), ~~and~~other ~~basis adjustments to certain~~ assets ~~and~~($0.2 million), current liabilities ~~to reflect the combined historical cost basis of Anschutz~~($22.0 million), ~~Such adjustments~~and ~~will~~other ~~have~~liabilities ~~a significant effect on the Company's future statements of operations~~($0.3 million).

9 Acquisition of Regal CineMedia Corporation

~~The~~On November 28, 2002, RCI acquired all of the outstanding capital stock of RCM from REH for a purchase price of approximately $4.2 million. ~~effects~~Following the acquisition, RCM became a majority-owned subsidiary of RCI and became a guarantor under the ~~reorganization~~amended and ~~purchase~~restated ~~accounting~~Regal ~~adjustments~~Cinemas onsenior credit facility and the ~~Company~~Regal Cinemas 93/8% senior subordinated notes. As a result of RCI being under common control with RCM, the transaction was accounted for as a contribution of RCM to RCI by REH, at REG's ~~balance~~historical cost ~~sheet~~basis asof RCM, in a manner similar to a pooling of ~~January 24~~interests. Accordingly, the accompanying financial statements presented herein reflect the results of operations of RCM from February 21, 2002, ~~are~~the asdeemed ~~follows~~date (at which Anschutz initially held common control in ~~millions):~~both RCI and RCM.

			Predecessor Company January 24, 2002			Discharge of Debt(a)			Purchase Accounting and Reorganization Adjustments(b)			Reorganized Company January 24, 2002
ASSETS
Current assets:
	Cash and equivalents		$	286.7		$	(120.0	)	$	—		$	166.7
	Accounts receivable			1.3			—			—			1.3
	Construction receivables			1.8			—			—			1.8
	Inventories			3.3			—			—			3.3
	Prepaid and other current assets			16.0			—			(0.4	)		15.6
	Assets held for sale			5.9			—			(0.6	)		5.3
		Total current assets		315.0			(120.0	)		(1.0	)		194.0
Property and equipment:
	Land			80.4			—			6.5			86.9
	Buildings and leasehold improvements			1,014.1			—			(249.3	)		764.8
	Equipment			427.1			—			(102.8	)		324.3
	Construction in progress			3.5			—			—			3.5
		Total property and equipment		1,525.1			—			(345.6	)		1,179.5
	Accumulated depreciation and amortization			(303.5	)		—			303.5			—
	Total property and equipment, net			1,221.6			—			(42.1	)		1,179.5
Goodwill				336.2			—			(335.2	)		1.0
Other assets				41.0			(12.8	)		—			28.2
		Total assets	$	1,913.8		$	(132.8	)	$	(378.3	)	$	1,402.7
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
	Current maturities of long-term debt			2.2			13.5			—			15.7
	Accounts payable			47.3			—			—			47.3
	Accrued expenses			72.1			(2.9	)		(0.1	)		69.1
	Deferred income tax liability			—			0.6			—			0.6
	Total current liabilities			121.6			11.2			(0.1	)		132.7
	Long-term debt, less current maturities			3.2			456.5			—			459.7
	Capital leases, less current maturities			1.5			—			—			1.5
	Lease financing arrangements			97.7			—			—			97.7
	Other liabilities			23.9			(1.9	)		(21.7	)		0.3
	Deferred income tax liability			—			33.7			—			33.7
	Liabilities subject to compromise			2,094.3			(2,019.7	)		—			74.6
	Total liabilities			2,342.2			(1,520.2	)		(21.8	)		800.2
Shareholders' equity (deficit):
	Common stock			196.5			725.4			(921.9	)		—
	Additional paid-in capital			—			—			602.5			602.5
	Retained deficit			(624.9	)		661.9			(37.1	)		—
	Total shareholders' equity (deficit)			(428.4	)		1,387.4			(356.5	)		602.5
		Total liabilities and shareholders' equity (deficit)	$	1,913.8		$	(132.8	)	$	(378.3	)	$	1,402.7

Acquisition of Edwards Theatres, Inc.

10 On April 17, 2002, RCI acquired all of the outstanding capital stock of Edwards from REH for an aggregate purchase price of approximately $272.5 million, of which $238.0 million was contributed to Edwards. Following the acquisition, Edwards became a wholly owned subsidiary of RCI. As a result of RCI being under common control with Edwards, the transaction was accounted for as a contribution of Edwards to RCI by REH, at REG's historical cost basis of Edwards, in a manner similar to a pooling of interests. Accordingly, the accompanying financial statements presented herein reflect the results of operations of Edwards from January 24, 2002, the deemed date at which Anschutz initially held common control in both RCI and Edwards.

5 In connection with the acquisition of Edwards, Regal Cinemas issued $150 million principal amount of 93/8% senior subordinated notes due 2012 under the indenture pursuant to which Regal Cinemas sold $200 million principal amount of 93/8% senior subordinated notes due 2012 in January 2002. ~~LONG-TERM~~ ~~OBLIGATIONS~~ The proceeds of the notes issued on April 17, 2002, together with cash on hand at RCI and Edwards, were used by RCI to acquire Edwards from REH. REH used the proceeds from its sale of Edwards to RCI to repay approximately $180.7 million of senior bank debt, including accrued interest of Edwards, to redeem approximately $12.0 million of Edwards Subordinated Notes (as defined below in Note 7), including accrued interest, primarily held by Anschutz and OCM Principal Opportunities Fund II, L.P. ("Oaktree's Principal Activities Group"), and to redeem approximately $75.3 million of redeemable preferred stock.

AsThe amounts arecorded ~~result~~based ~~of RCI's plan of reorganization becoming effective~~ on ~~January 29,~~the ~~2002,~~acquisition ~~substantially all~~ of ~~the~~Edwards ~~debt existing prior to that date was replaced~~ by the Company's ~~new~~were ~~senior~~current ~~credit~~assets ~~facilities~~($80.4 million), property and ~~senior~~equipment ~~subordinated~~($293.0 million), ~~notes~~other assets ($61.7 million), ~~Long-term~~debt obligations ~~at September~~($190.3 26million), ~~2002~~other ~~and~~liabilities ~~December~~($113.5 ~~27,~~million) ~~2001,~~and ~~consist~~redeemable ofpreferred ~~the~~stock ~~following~~ (~~in millions~~$47.1 million):.

		Reorganized Company September 26, 2002			Predecessor Company December 27, 2001
Regal Cinemas Senior Credit Facility		$	225.0		$	—
Regal Cinemas 93/8% Senior Subordinated Notes			350.0			—
91/2% Senior subordinated notes due June 1, 2008			—			600.0
87/8% Senior subordinated debentures due December 15, 2010			—			200.0
Term Loans			—			505.0
Revolving credit facility			—			495.0
Equipment financing note payable, payable in varying quarterly installments through April 1, 2005			—			17.7
Capital lease obligations, 7.9%, maturing in 2009			1.5			1.6
Lease financing arrangements, 11.5%, maturing in various installments through 2021			98.3			99.4
Other			3.3			3.8
			678.1			1,922.5
Less current maturities			(19.2	)		(2.2	)
Less amounts subject to compromise			—			(1,817.8	)
	Total long-term obligations	$	658.9		$	102.5

4. LONG-TERM OBLIGATIONS

Regal Cinemas Senior Credit Facility—Regal Cinemas entered into an amended and restated senior credit agreement with several financial institutions including Lehman Brothers, Inc., Credit Suisse First Boston Corporation, General Electric Capital Corporation and Lehman Commercial Paper, Inc., on August 12, 2002, amending its existing senior credit agreement to increase the amount available for borrowing under the senior secured revolving credit facility from $100 million to $145 million and to decrease the amount of the senior secured Long-term ~~loan~~obligations from $270 million to $225 million. Under the amended and restated senior credit agreement, the lenders advanced Regal Cinemas $225.0 million through a senior secured term loan, which was used, together with cash on hand at ~~Regal Cinemas,~~June ~~Inc.~~26, to2003 ~~repay in full its existing $270.0 million term loan. The amended~~ and restated senior credit agreement also made available, subject to the satisfaction of conditions customary for extensions of credit of this type, an additional $145.0 million through a senior secured revolving credit facility. The $225.0 million term loan will amortize at a rate of 5% per annum until December 3126, ~~2006, with the remaining 75% due in four installments ending on December 31, 2007. The senior secured revolving credit facility became available on August 12,~~ 2002 ~~and~~consist ~~will be available until January 29, 2007. Regal Cinemas also maintains a letter~~ of ~~credit for $15.0 million related to its general unsecured claims as of September 26, 2002, which reduces~~ the ~~availability~~ ~~under~~following ~~its senior secured revolving credit facility to $130~~(in ~~million.~~millions): ~~As of September 26, 2002, there were no amounts outstanding on the senior secured revolving credit facility.~~

Borrowings under the term facility bear interest, at Regal Cinemas' option, at either the base rate or Eurodollar rate plus, in each case, an applicable margin, subject to adjustment based upon the consolidated total leverage ratio of Regal Cinemas. The base rate is a fluctuating interest rate equal to the higher of (a) the British Banking Association's prime rate or (b) the Federal Funds Effective Rate

		June 26, 2003			December 26, 2002
Regal Cinemas Senior Credit Facility		$	525.9		$	219.4
Regal Cinemas 9³/8% Senior Subordinated Notes			350.0			350.0
Lease financing arrangements, 11.5%, maturing in various installments through 2021			97.0			97.8
Capital lease obligations			23.6			1.5
Other			4.1			3.2

Total long-term obligations			1,000.6			671.9
Less current maturities			(30.5	)		(16.5	)

	Total long-term obligations, net	$	970.1		$	655.4

11 Amended and Restated Regal Cinemas Senior Credit Facility—In connection with the acquisition of UATG described more fully in Note 3—"Acquisitions," Regal Cinemas entered into an additional term loan facility ("Term Loan D") under the amended and restated Regal Cinemas senior credit facility (a copy of which is incorporated by reference as exhibit 4.2 hereto) for approximately $315.0 million. The Term Loan D facility amortizes at a rate of 5% per annum for the first five years of the loan, with the remainder of 75% of principal (plus accrued interest) due in June 2009. At June 26, 2003, the borrowings outstanding under the Term Loan D facility bore interest at approximately 3.8125%. The Term Loan D facility is guaranteed by Regal Cinemas and substantially all of its direct and indirect subsidiaries, as set forth in the amended and restated credit agreement. The Term Loan D facility carries identical covenants to those of the Regal Cinemas senior credit facility that was amended and restated. See Note 6 to the consolidated financial statements included in Item 8 of our 2002 Annual Report on Form 10-K for further description of the covenants and other terms of the amended and restated Regal Cinemas senior credit facility which is incorporated herein by reference.

As ~~plus~~of 0June 26, 2003, Regal Cinemas had $145 million committed under its undrawn senior revolving credit facility.5% Regal Cinemas also maintains letters of credit of $30 million (of which approximately $16.8 million Atwas ~~September~~outstanding as of June 26, ~~2002~~2003), ~~interest~~which onreduces the ~~senior~~availability ~~secured~~under ~~credit~~its ~~facility~~senior ~~was~~revolving ~~approximately~~credit 4facility.~~6%.~~

~~Regal Cinemas~~Other ~~may~~Long-Term ~~prepay~~Obligations—All ~~borrowings under the amended and restated senior credit facility in whole or in part, in minimum amounts and subject to~~ other ~~conditions~~significant ~~set~~long-term ~~forth~~obligations ~~in the amended~~not ~~and~~explicitly ~~restated~~discussed ~~senior~~herein ~~credit~~are ~~agreement.~~described ~~Regal~~in ~~Cinemas~~Note 6 ~~is required~~ to ~~make mandatory prepayments to~~ the ~~lenders~~consolidated ~~from~~financial ~~the~~statements ~~net~~included ~~cash proceeds from asset sales and new debt issuances,~~ in ~~particular circumstances~~Item 8 ~~specified~~of inour ~~the~~2002 ~~amended~~Annual ~~and~~Report ~~restated~~on ~~senior credit agreement~~Form 10-K.

~~Regal Cinemas'~~Guarantors ~~obligations are secured by, among other things, the capital stock~~ of ~~most~~Regal ofCinemas' ~~its~~Senior ~~subsidiaries,~~Subordinated ~~mortgages on most of its properties and a security interest in substantially all of its assets.~~ Notes

~~The amended~~Regal Cinemas' senior subordinated notes are jointly and ~~restated~~severally, ~~senior~~fully ~~credit~~and ~~agreement~~unconditionally ~~includes~~guaranteed ~~various~~by ~~financial~~most ~~covenants~~of ~~such~~Regal asCinemas' ~~certain~~existing ~~leverage~~wholly owned subsidiaries and ~~coverage~~are ~~ratios.~~unsecured, ~~The~~ranking behind Regal Cinemas' obligations under its amended and restated senior credit ~~agreement~~facility ~~also contains~~and ~~customary~~any ~~covenants,~~future ~~including~~senior ~~limitations~~indebtedness. onEach ~~Regal~~subsidiary guarantor of Regal Cinemas' ~~ability~~senior tosubordinated ~~incur~~notes ~~debt,~~is ~~and~~exempt ~~events~~from ofreporting ~~default,~~under ~~including~~the aSecurities ~~change~~Exchange Act of ~~control~~1934 pursuant to Rule 12h-5 under the Exchange Act, as ~~defined~~Regal inCinemas has no independent assets or operations, the ~~amended~~guarantees ~~and~~of ~~restated~~Regal ~~senior~~Cinemas' ~~credit agreement.~~subsidiary ~~The~~guarantors ~~amended~~are full and ~~restated~~unconditional ~~senior~~and ~~credit~~joint ~~agreement~~and ~~also~~several, ~~limits~~and any subsidiaries of Regal Cinemas' ~~ability~~other tothan ~~pay~~the subsidiary ~~dividends~~guarantors are, toindividually ~~make~~and ~~advances~~in ~~and~~the ~~otherwise~~aggregate, minor. There are no significant restrictions on Regal Cinemas' ability or any subsidiary guarantor to ~~engage~~obtain infunds ~~intercompany~~from ~~transactions~~its subsidiaries.

~~Regal Cinemas Senior Subordinated Notes—On January 29, 2002, Regal Cinemas issued $200~~5.~~0 million~~ ~~aggregate principal~~INCOME amount of 93/8% senior subordinated notes due 2012. Interest on the notes is payable semi-annually on February 1 and August 1 of each year, and the notes mature on February 1, 2012. The notes are jointly and severally, fully and unconditionally guaranteed by most of Regal Cinemas' existing wholly owned subsidiaries and are unsecured, ranking behind Regal Cinemas' obligations under its senior credit facility and any future senior indebtedness. TAXES

~~Regal Cinemas~~The ~~has~~provision ~~the~~for ~~option~~income totaxes ~~redeem~~of ~~the notes, in whole or in part, at any time on or after February~~$28.9 1,million ~~2007~~and ~~at redemption prices declining from 104~~$28.~~688% of their principal amount on February~~5 1,million ~~2007~~for tothe ~~100%~~thirteen ofweeks ~~their~~ended ~~principal amount on or after February~~June 126, ~~2010,~~2003 ~~plus~~and ~~accrued interest. At any time on or prior to February~~June 126, ~~2005,~~2002 ~~Regal Cinemas may~~reflect ~~also~~effective ~~redeem~~tax uprates ~~to 35%~~ of ~~the~~approximately ~~aggregate~~40.2% ~~principal~~and ~~amount~~42.2%, ofrespectively. ~~the~~The ~~notes~~provision atfor aincome ~~redemption~~taxes ~~price~~ of ~~109~~$50.~~375%~~7 million ofand ~~their~~$40.1 million ~~principal~~for ~~amount,~~the ~~plus~~twenty ~~accrued~~six ~~interest,~~weeks ~~within~~ended 90June ~~days~~26, ~~of an underwritten public~~2003 ~~offering~~and ofthe ~~common~~twenty-two ~~stock~~weeks ofended ~~Regal~~June 27, ~~Cinemas~~2002 orreflect ofeffective atax ~~future~~rates ~~underwritten public offering~~ of ~~Regal~~approximately ~~Cinemas'~~39.7% ~~common~~and ~~stock~~40.9%, ~~the~~respectively. ~~proceeds~~No ofbenefit ~~which~~for ~~are~~income ~~used~~taxes aswas arecorded ~~contribution~~for to the ~~equity~~four ~~of Regal Cinemas.~~weeks ~~Upon~~ended ~~a change of control~~January 24, as2002 ~~defined~~because in the ~~indenture~~Company ~~pursuant~~recorded toan ~~which~~offsetting ~~the~~valuation ~~notes~~allowance ~~were~~against ~~issued,~~the ~~Regal~~resulting ~~Cinemas~~deferred istax ~~required~~asset, toas ~~offer~~it towas ~~purchase~~more ~~the~~likely ~~notes~~than atnot athat ~~purchase~~such ~~price~~deferred ~~equal~~tax ~~to 101% of their~~assets ~~principal~~would ~~amount,~~not ~~plus~~be ~~accrued interest~~realized. ~~In addition~~Accordingly, the ~~indenture~~effective ~~limits~~tax ~~Regal~~rate ~~Cinemas'~~for ~~and~~the ~~its~~four ~~subsidiaries'~~weeks ~~ability~~ended toJanuary 24, ~~among~~2002 ~~other~~was ~~things, incur additional indebtedness and pay dividends on or repurchase capital stock~~0%.

AsFor federal income tax purposes, the Company has carryover tax basis in certain assets acquired in the Hoyts acquisition described in Note 3~~—"Acquisition~~. ofSuch ~~Edwards~~acquired ~~Theatres,~~entities ~~Inc.,"~~had onnet operating ~~April 17,~~loss ~~2002,~~carryforwards ~~Regal~~totaling ~~Cinemas~~approximately ~~sold~~ $~~150~~155.4 million ~~principal~~as ~~amount~~of the date of ~~93/8%~~ ~~senior~~acquisition. ~~subordinated~~Pursuant ~~notes~~to ~~due~~certain ~~2012~~IRS limitations, ~~which~~the ~~were~~Company's ~~issued~~allowable ~~under~~annual ~~the~~deduction ~~indenture~~with ~~pursuant~~respect to the ~~which~~Hoyts' ~~Regal~~net ~~Cinemas~~operating ~~sold~~loss ~~the~~carryforwards is limited to approximately $~~200~~8.6 million. ~~principal~~During the quarter ended June 26, 2003, the Company recorded deferred tax assets in the amount of ~~93/8%~~ ~~senior~~approximately ~~subordinated~~$33.0 million, ~~notes~~net ~~due~~of ~~2012~~a invaluation ~~January~~allowance of approximately $14.7 ~~2002~~million, in connection with the Hoyts acquisition.

In ~~May 2002,~~assessing ~~Regal~~the ~~Cinemas~~valuation ~~filed~~of adeferred ~~registration~~tax ~~statement~~assets, ~~under~~management ~~the~~considers ~~Securities~~whether ~~Act~~it ofis ~~1933~~more ~~pursuant~~likely tothan anot ~~registration~~that ~~rights~~some ~~agreement~~portion ~~entered~~or ~~into~~all inof ~~connection with~~ the ~~93/8%~~ ~~senior~~deferred ~~subordinated~~tax ~~notes~~assets ~~offerings.~~will ~~Under~~not ~~the~~be ~~registration~~realized. ~~rights~~The ultimate ~~agreement,~~realization ~~the~~of ~~Company~~deferred ~~was~~tax ~~required~~assets tois ~~register~~dependent ~~for~~upon ~~exchange under~~ the ~~Securities~~generation ~~Act~~ of ~~1933~~future ~~identical 93/8%~~taxable ~~senior~~income ~~subordinated~~during ~~notes due 2012 to replace~~ the ~~outstanding~~periods ~~93/8%~~in ~~senior~~which ~~subordinated~~these ~~notes~~temporary ~~due~~differences ~~2012,~~become ~~which~~deductible. ~~were~~The ~~issued~~Company inhas recorded ~~January~~a ~~and~~valuation ~~April 2002~~allowance ~~without registration~~against ~~under~~deferred ~~the~~tax ~~Securities~~assets ~~Act~~ of ~~1933~~approximately ~~pursuant~~$19.8 million toand ~~exemptions~~$5.1 million ~~from~~at ~~registration~~June 26, ~~available~~2003 ~~thereunder.~~and ~~The~~December 26, ~~Securities~~2002, ~~and~~respectively, ~~Exchange~~as management ~~Commission~~believes ~~declared~~it ~~the~~more ~~registration~~likely ~~statement~~than ~~relating~~not ~~to the~~ ~~exchange~~that ~~offer~~such ~~effective~~deferred ontax ~~July 10,~~asset ~~2002,~~amounts ~~and~~would ~~the~~not ~~exchange~~be ofrealized ~~the~~in ~~registered~~future ~~93/8%~~tax ~~senior~~periods. ~~subordinated~~The ~~notes~~valuation ~~due~~allowance ~~2012~~at ~~for~~June 26, ~~the~~2003 ~~unregistered~~and ~~93/8%~~December 26, ~~senior~~2002 relates to pre-acquisition ~~subordinated~~deferred ~~notes~~tax ~~due~~assets ~~2012~~of ~~was~~Edwards ~~consummated~~and onHoyts. ~~August 14~~Accordingly, ~~2002.~~future ~~Regal~~reductions ~~Cinemas~~in ~~did~~the ~~not~~valuation ~~receive~~allowance ~~any~~will ~~proceeds~~reduce ~~from~~goodwill ~~the~~related ~~exchange~~to ~~offer~~such ~~transaction~~acquisitions.

126. CAPITAL STOCK AND STOCK-BASED COMPENSATION

~~Each~~ ~~subsidiary~~Capital guarantor of Regal Cinemas' senior subordinated notes is exempt from reporting under the Securities Exchange Act of 1934 pursuant to Rule 12h-5 under the Exchange Act, as Regal Cinemas has no independent assets or operations, the guarantees of Regal Cinemas' subsidiary guarantors are full and unconditional and joint and several, and any subsidiaries of Regal Cinemas other than the subsidiary guarantors are, individually and in the aggregate, minor. There are no significant restrictions on Regal Cinemas' ability or any subsidiary guarantor to obtain funds from its subsidiaries. Stock

~~Lease~~As ~~Financing Arrangements—These obligations primarily represent capitalized lease obligations resulting primarily from the requirements~~ of ~~Emerging Issues Task Force (EITF) Issue No.~~June ~~97-10~~26, ~~The~~2003, ~~Effect~~the ofCompany's ~~Lessee~~authorized ~~Involvement~~capital instock ~~Asset~~consisted ~~Construction,~~of: ~~released in fiscal 1998.~~

•: 25,000,000 shares of common stock, par value $0.001 per share; and
•: 5,000,000 shares of preferred stock, par value $0.001 per share.

~~Interest~~Of the ~~Rate~~authorized ~~Swaps—In~~shares ~~September 1998,~~of ~~RCI~~common ~~entered~~stock, ~~into~~7,500,000 ~~interest~~shares ~~rate~~were ~~swap~~issued ~~agreements~~and ~~for~~outstanding ~~five-year~~as ~~terms to~~of ~~hedge~~June 26, a2003, ~~portion~~all of ~~its~~which ~~senior~~are ~~credit~~held ~~facilities~~by ~~variable interest rate risk~~REH. InOf ~~September 2000, RCI monetized~~ the ~~value~~authorized shares of ~~these~~the ~~agreements for approximately $8.6 million. Prior to~~preferred ~~its~~stock, ~~emergence~~no ~~from~~shares ~~bankruptcy,~~are ~~RCI~~issued ~~had~~and ~~deferred~~outstanding ~~the~~as ~~gain~~of ~~realized~~June 26, ~~from~~2003. ~~the~~The ~~sale~~Company ~~and~~may ~~was~~issue ~~amortizing~~ the ~~gain~~preferred asshares afrom ~~credit~~time to ~~interest~~time ~~expense~~in ~~over~~such ~~the~~series ~~remaining~~having ~~original~~such ~~term~~designated ofpreferences ~~these~~and ~~swaps (through~~rights, ~~September 2003).~~qualifications ~~Upon~~and ~~emergence~~limitations ~~from~~as ~~bankruptcy,~~ the ~~related~~Board ~~unamortized deferred gain~~ of ~~$3.9 million~~Directors ~~was~~may ~~eliminated~~determine.

~~Liabilities~~ ~~Subject to Compromise—See Note 6—"Bankruptcy Related Claims" for bankruptcy~~Stock-~~related~~based ~~adjustments to amounts reported as "liabilities subject to compromise" at December 27, 2001.~~ Compensation

6 In connection with the July 1, 2003 REG extraordinary cash dividend described more fully in Note 10, and pursuant to the antidilution adjustment terms of the REG 2002 Stock Incentive Plan (which includes certain employees of Regal Cinemas), the exercise price and the number of shares held under option by the Company's option holders were adjusted to restore their economic position to that existing immediately before the extraordinary dividend and the number of options reserved for issuance under the plan were adjusted. ~~BANKRUPTCY~~There ~~RELATED~~were ~~CLAIMS~~ no accounting consequences for changes made to reduce the exercise prices and increase the number of underlying shares as a result of the extraordinary cash dividend as the (1) the aggregate intrinsic value of the awards immediately after the dividend transaction was not greater than the aggregate intrinsic value of the awards immediately before the dividend transaction and (2) the ratio of the exercise price per share to the market value per share was not reduced.

~~The~~In December 2002, ~~filing~~the ofFinancial ~~the~~Accounting ~~Chapter~~Standards 11Board ~~Case~~("FASB") byissued ~~RCI~~Statement ~~automatically~~of ~~stayed~~Financial ~~actions~~Accounting byStandards ~~creditors~~("SFAS") No. 148, "Accounting for Stock-Based Compensation—Transition and ~~other~~Disclosure." ~~parties~~SFAS ofNo.148 ~~interest~~amends SFAS No. 123, "Accounting for Stock-Based Compensation," to ~~recover~~provide ~~any~~alternative ~~claim~~methods ~~that~~of ~~arose~~transition ~~prior~~for a voluntary change to SFAS No. 123's fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No.123 and ~~commencement~~Accounting Principles Board ("APB") Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the ~~cases.~~effects Inof ~~accordance~~an entity's accounting policy with ~~SOP~~respect 90to stock-7based employee compensation on reported net income and earnings per share in annual and interim financial statements. Under SFAS No. 123, entities are permitted to recognize as expense the ~~following~~fair ~~table~~value ~~sets~~of ~~forth~~all stock-based awards on the ~~liabilities~~date of grant over the ~~Company~~vesting ~~subject~~period and alternatively allows entities to ~~compromise~~continue asto apply the provisions of ~~December~~APB Opinion No. 2725, ~~2001~~"Accounting (for Stock Issued to Employees" and related interpretations, and provide pro forma net income or loss and earnings or loss per share disclosures as if the fair-value-based method defined in ~~millions):~~SFAS No. 123 had been applied.

Debt:
	Senior subordinated notes and debentures		$	800.0
	Senior credit facilities			1,000.0
	Equipment financing note			17.7
	Other			0.1
				1,817.8
Other:
	Trade accounts payable and other			32.4
	Reserve for lease termination and related costs			37.1
	Accrued interest			195.9
		Total liabilities subject to compromise		2,083.2
	Amounts to be settled using current assets			(183.9	)
		Balance subject to compromise	$	1,899.3

On January 29, 2002, the Company issued stock options to certain employees of Regal Cinemas. Subsequently, REG established the 2002 Stock Incentive Plan which provides for the granting of incentive stock options and non-qualified stock options to principally officers and employees of REG and its subsidiaries. The Company has elected to continue accounting for its stock option plan using the intrinsic value method in accordance with the provisions of APB Opinion No. 25 which requires compensation costs to be recognized for the excess of the fair value of options on the date of grant over the option exercise price. Had the fair value of options granted under these plans been recognized in accordance with SFAS No. 123 as compensation expense on a straight-line basis over the vesting period of the grants, the Company's net income would have been recorded in the amounts indicated below (in millions):

RCI emerged from bankruptcy on January 29, 2002 in accordance with the Plan that was confirmed by the Bankruptcy Court on December 7, 2001. Approximately $1.817 billion of long-term debt plus $195.9 million of accrued and unpaid interest was discharged under the terms of the Plan in exchange for total payments of approximately $575.3 million. Regal Cinemas funded these payments through (i) cash on hand, (ii) a term loan ($270 million) borrowed under new senior credit facilities, and (iii) the issuance of new senior subordinated notes ($200 million). See Note 5—"Long-Term Obligations" for further description of these debt facilities. The discharge of such obligations subject to

	Thirteen weeks ended June 26, 2003 (Reorganized Company)			Thirteen weeks ended June 27, 2002 (Reorganized Company)			Twenty-six weeks ended June 26, 2003 (Reorganized Company)			Twenty-two weeks ended June 27, 2002 (Reorganized Company)			Four weeks ended January 24, 2002 (Predecessor Company)
Net income, as reported:	$	43.0		$	39.0		$	76.9		$	57.9		$	420.8
Less: additional stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(0.4	)		(0.6	)		(0.8	)		(0.9	)		(0.1	)

Pro forma net income	$	42.6		$	38.4		$	76.1		$	57.0		$	420.7

137. CONTINGENCIES

~~compromise~~ ~~for~~Bankruptcy ~~less than their recorded amounts resulted in an extraordinary gain of $661.9 million for the four week period ended January 24, 2002.~~ Claims

As discussed in Note 1 above, RCI emerged from bankruptcy on January 29, 2002. On August 23, 2000, Edwards and its subsidiaries at that time also filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Central District of California (the "California Bankruptcy Court"). On May 24, 2001, Edwards filed a plan of reorganization and related disclosure statement, as subsequently amended on July 23, 2001 (the "Edwards Plan"). On September 24, 2001, the California Bankruptcy Court confirmed the Edwards Plan. On September 29, 2001, all conditions required for the effectiveness of the Edwards Plan were met, and the Edwards Plan became effective. Pursuant to the Edwards Plan, Anschutz and Oaktree's Principal Activities Group agreed to exchange approximately $14.6 million of their pre-petition secured claims and cash of $41.4 million for $56.0 million in Edwards' Series A preferred stock and 51% of Edwards' newly-issued common stock and $10.0 million of senior secured debt for $10.0 million of senior unsecured subordinated notes (the "Edwards Subordinated Notes").

The Edwards Plan also provided that Edwards' senior secured lenders receive a pay-down of $9.5 million of principal and all pre-petition and post-petition accrued and unpaid interest at the applicable non-default rate. In connection with the Edwards Plan, the Edwards Subordinated Notes were issued and the existing secured lenders established a $180.0 million restructured term loan. General unsecured creditors were entitled to receive, at their option, either a cash distribution equal to 90% of the holder's allowed claim or an unsecured seven year note equal to 100% of the allowed claim. The seven year notes provide for semi-annual interest payments, in arrears, beginning on the six-month anniversary of the effective date at a rate of 9% per annum, compounded annually. The notes also require semi-annual principal reduction payments beginning on the six-month anniversary of the Edwards effective date (September 29, 2001).

RCI and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At ~~September~~June 26, ~~2002~~2003, approximately $334.30 million of remaining claims related to RCI's and Edwards' bankruptcy proceedings are recorded in the Company's June 26, 2003 unaudited condensed consolidated balance sheet as "Bankruptcy ~~Claims and~~Related Liabilities" and Claims." In the opinion of management, based on its examination of these matters, its experience to date and discussions with legal counsel, the outcome of these legal matters, after taking into consideration the amounts already accrued, is not expected to have a material effect on the Company's ~~financial~~liquidity ~~position,~~or results of operations. orTo the extent the RCI claims are allowed by the Bankruptcy Court, they will be funded with cash ~~flows~~on hand, cash flow from operations or borrowings under Regal Cinemas' revolving credit facility. ~~The~~To ~~timing~~the ofextent the ~~payment~~Edwards claims are allowed by the California Bankruptcy Court, they will be funded from restricted cash that has been set aside, cash on hand, cash from operations and, if the allowed claims exceed $55 million, from contributions by Anschutz and Oaktree's Principal Activities Group. The timing of these claims will depend upon the resolution of these claims.

7. ~~INCOME TAXES~~Other

~~Income~~RCI ~~taxes~~and Edwards are ~~accounted~~defendants ~~for~~in ~~under~~a ~~the~~number ~~asset~~of ~~and~~claims ~~liability~~arising ~~method.~~from ~~Deferred~~their ~~tax~~decision ~~assets~~to ~~and~~file ~~liabilities~~voluntary ~~are~~petitions ~~recognized~~ for ~~the~~bankruptcy ~~future~~relief ~~tax~~and ~~consequences~~to close theatre locations ~~attributable~~or to ~~differences~~cease ~~between~~construction ~~the~~of ~~financial~~theatres ~~statement~~on ~~carrying~~sites ~~amounts~~for ofwhich ~~existing~~such ~~assets~~entities ~~and~~had ~~liabilities~~contractual ~~and~~obligations ~~their~~to ~~respective~~lease ~~tax~~such ~~bases~~property. The Company and ~~operating~~its ~~loss~~subsidiaries ~~and~~are ~~tax~~also ~~credit~~presently ~~carryforwards.~~involved ~~Deferred~~in various legal ~~tax~~proceedings ~~assets~~arising ~~and~~in ~~liabilities~~the ~~are~~ordinary ~~measured~~course ~~using~~of ~~enacted~~its ~~tax~~business ~~rates~~operations, ~~expected~~including topersonal ~~apply~~injury toclaims, ~~taxable~~employment ~~income~~and incontractual ~~the~~matters ~~years~~and inother ~~which~~disputes. ~~those~~The ~~temporary~~Company ~~differences~~believes ~~are~~it ~~expected~~has toadequately provided befor ~~recovered~~the orsettlement ~~settled~~of such matters. ~~The effect~~Management onbelieves ~~deferred~~any ~~tax~~additional ~~assets~~liability ~~and~~with ~~liabilities~~respect ofto athe ~~change~~above inproceedings ~~tax~~will ~~rates~~not isbe ~~recognized~~material in ~~income~~the inaggregate to the ~~period~~Company's ~~that~~consolidated financial ~~includes~~position, ~~the~~results ~~enactment~~of ~~date~~operations or cash flows.

No benefit for income taxes was recorded for the quarter or nine months ended September 27, 2001 because the Company recorded an offsetting valuation allowance against the resulting deferred tax asset, as it was more likely than not that such deferred tax assets would not be realized8. ~~Accordingly,~~RELATED ~~the~~PARTY ~~effective tax rate for 2001 is 0%. The provision for income taxes of $19.3 million and $55.1 million~~ TRANSACTIONS

for the quarter and thirty five weeks ended September 26, 2002 reflect effective tax rates of approximately 38.3% and 40.0%, respectively.

8. CONTINGENCIES

RCI and Edwards are defendants in a number of claims arising from their decision to file voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code and to close theatre locations or to cease construction of theatres on sites for which such entities had contractual obligations to lease such property. The Company is also presently involved in various legal proceedings arising in the ordinary course of its business operations, including personal injury claims, employment matters and other contractual disputes. The Company believes it has adequately provided for the settlement of such matters. Management believes any additional liability with respect to the above proceedings will not be material in the aggregate to the Company's consolidated financial position, results of operations or cash flows.

9. RELATED PARTY TRANSACTIONS

Edwards Bankruptcy Claims

Under the Edwards Plan, Anschutz and Oaktree's Principal Activities Group have agreed to contribute to Edwards $0.90 for each $1.00 of allowed general unsecured claims in excess of $55.0 million, up to $13.5 million. For each $900 contributed, Anschutz and Oaktree's Principal Activities Group will receive $1,044, up to a maximum of $15,663,333, from Ms. Ruoff, Ms. Randolph and Edwards Affiliated Holdings, LLC, all former stockholders of Edwards. REG will also acquire up to 331,451 shares of its Class A common stock from Edwards Affiliated Holdings, LLC, based on the dollar amount contributed by Anschutz and Oaktree's Principal Activities Group. Anschutz and Oaktree's Principal Activities Group will, in turn, receive the same number of shares from REG, and will also receive from Ms. Ruoff and Ms. Randolph an aggregate of up to $7,384,469 in cash, in each instance based on the amount contributed and allocated between Anschutz and Oaktree's Principal Activities Group in relation to their respective contributions.

In addition, Anschutz and Oaktree's Principal Activities Group will contribute to Edwards $0.90 for each $1.00 of allowed general unsecured claims in excess of $70.0 million. In exchange for these contributions, REG will acquire up to 1,383,461 shares of its Class A common stock from Edwards Affiliated Holdings, LLC based on the amount contributed by Anschutz and Oaktree's Principal Activities Group. Anschutz and Oaktree's Principal Activities Group will, in turn, receive the same number of shares from REG, and will also receive from Ms. Ruoff and Ms. Randolph up to an aggregate of $5,935,531 in cash, in each instance based on the amount contributed and allocated between Anschutz and Oaktree's Principal Activities Group in relation to their respective contributions.

Redemption of Edwards' Series A Preferred Stock and Series B Preferred Stock

InOn ~~connection~~April 17, ~~with~~2002, ~~the~~REG ~~formation~~used a portion of ~~REG,~~the ~~Edwards~~proceeds ~~issued~~from ~~135,000~~REH's ~~shares~~sale of ~~its~~Edwards ~~Class A~~to ~~common~~RCI ~~stock~~ to ~~the~~cause ~~holders~~Edwards ofto ~~Edwards'~~redeem its Series A ~~preferred~~and Series B preferred stock. Anschutz received $47.8 million and ~~115,000~~Oaktree's ~~shares~~Principal Activities Group received $11.9 million in the redemption of ~~its~~Edwards' ~~Class~~Series BA ~~common~~preferred stock toheld ~~the~~by them. The holders of the Edwards' Series B preferred stock inreceived ~~consideration~~an ~~for~~aggregate of $15.7 million in the ~~elimination~~redemption of ~~voting~~the ~~rights~~Edwards onSeries B ~~such~~ preferred stock held by them.

On April 17, 2002, REG used a portion of the proceeds from REH's sale of Edwards to Regal Cinemas, Inc. to cause Edwards to redeem its Series A and Series B preferred stock. Anschutz received $47.8 million and Oaktree's Principal Activities Group received $11.9 million in the redemption of Edwards' Series A preferred stock held by them. Edwards Affiliated Holdings, LLC, Ms. Ruoff and

Ms. Randolph received an aggregate of $15.7 million in the redemption of the Edwards' Series B preferred stock held by them.

Payment of Edwards' Subordinated Notes

On April 17, 2002, REG used a portion of the proceeds from REH's sale of Edwards to ~~Regal~~RCI ~~Cinemas, Inc.~~ to cause Edwards to redeem from Anschutz ~~approximately~~ ~~$9.6 million~~ and from Oaktree's Principal Activities Group approximately $9.6 million and $2.4 million, respectively, owed on the Edwards Subordinated Notes issued by Edwards to Anschutz and Oaktree's ~~Principal~~ Principal Activities Group.

Guaranties of Certain Edwards' Lease Obligations

On March 8, 2002, Anschutz entered into a Guaranty for the benefit of Starwood Wasserman Fresno LLC pursuant to which Anschutz unconditionally and irrevocably agreed to guaranty the full and timely payment and performance of all of the duties, obligations and covenants of Edwards under Edwards' December 27, 1999 lease with Starwood Wasserman Fresno LLC. The lease relates to property located in Fresno, California on which Edwards operates a theatre. Pursuant to the Guaranty, if Edwards defaults under the lease, whether by failing to pay rent when due, failing to use the premises as a motion picture theatre facility, failing to maintain the premises or otherwise, Starwood Wasserman Fresno LLC may proceed immediately against Anschutz or Edwards, or both, or may enforce against Anschutz or Edwards, or both, any rights it has under the lease or pursuant to applicable laws. Anschutz and REG intend to have the Guaranty terminated and replaced by a new guaranty from REG, substantially in the form of the Guaranty, for the benefit of Starwood Wasserman Fresno LLC.

On March 8, 2002, Anschutz entered into a Guaranty for the benefit of Starwood Wasserman Ontario LLC pursuant to which Anschutz unconditionally and irrevocably agreed to guaranty the full and timely payment and performance of all of the duties, obligations and covenants of Edwards under Edwards' July 16, 1999 lease with Starwood Wasserman Ontario LLC. The lease relates to property located in Ontario, California on which Edwards operates a theatre. Pursuant to the Guaranty, if Edwards defaults under the lease, whether by failing to pay rent when due, failing to use the premises as a motion picture theatre facility, failing to maintain the premises or otherwise, Starwood Wasserman Ontario LLC may proceed immediately against Anschutz or Edwards, or both, or may enforce against Anschutz or Edwards, or both, any rights it has under the lease or pursuant to applicable laws. Anschutz and REG intend to have the Guaranty terminated and replaced by a new guaranty from REG, substantially in the form of the Guaranty, for the benefit of Starwood Wasserman Ontario LLC.

Bridge Facility

During December 2001, RCI entered into a bridge facility with Anschutz and an affiliate of Oaktree's Principal Activities Group. Under the terms of the bridge facility, RCI paid commitment fees during January 2002 of $1.6 million to Anschutz and $400,000 to an affiliate of Oaktree's Principal Activities Group during January 2002, which in the aggregate was 1% of the total amount of available commitments under the bridge facility. This bridge facility was not drawn and terminated upon RCI's emergence from bankruptcy.

Management Agreements

ARCI ~~management~~manages ~~agreement~~the ~~will~~theatre beoperations ~~effected~~of ~~between~~UATC ~~Regal~~and ~~Cinemas~~its ~~and~~subsidiaries ~~United~~pursuant ~~Artists~~to ~~under~~the ~~which~~terms ~~Regal~~of ~~Cinemas~~a ~~will~~management ~~manage~~agreement. During the ~~day~~thirteen toweeks ~~day~~and twenty-six ~~aspects~~weeks ended June 26, 2003, RCI recorded management fee revenues of ~~United~~approximately ~~Artists' theatre~~$3.2 million ~~operations~~and $6.4 million ~~Such~~related ~~agreement~~to isthis ~~expected~~arrangement. toSuch befees ~~finalized~~have been byrecorded in the ~~end~~accompanying unaudited condensed consolidated statements of ~~fiscal~~operations ~~2002~~for the thirteen weeks and ~~will~~twenty-six beweeks ~~recorded~~ended inJune 26, ~~the~~2003 ~~Company's~~as a component of "Other Operating Revenues."

financial statements upon effectiveness of the agreement. Had this agreement been in effect during the quarter ended September 26, 2002, Regal Cinemas would have recorded management fee revenues of approximately $4.5 million.

Other Transactions

During the ~~three~~thirteen ~~quarters~~weeks ended ~~September~~June 26, ~~2002~~2003, asRCM ~~members~~incurred ofapproximately ~~the~~$509,000 ~~class~~ of ~~holders~~expenses ofpayable ~~RCI's~~to ~~former~~certain ~~senior~~Anschutz ~~credit~~affiliates ~~facilities,~~for ~~Anschutz,~~reimbursement ~~Oaktree's~~of ~~Principal~~travel ~~Activities Group~~ and ~~Greenwich~~marketing ~~Street Capital Partners ("GSCP"), received $33.6 million, $5.6 million~~ and ~~$6.0 million,~~communication ~~respectively, in respect of accrued but unpaid interest~~expenses. ~~As members of the class of holders of RCI's subordinated debt~~Additionally, ~~Anschutz~~RCM ~~received~~has ~~cash~~recorded ~~payments~~revenue of ~~approximately~~ $~~129.5 million~~260,000 ~~Oaktree's~~from ~~Principal~~certain ~~Activities~~affiliates ~~Group received cash payments~~ of ~~approximately~~Anschutz ~~$29.7 million~~ and GSCP received cash payments of approximately $5.5 million in satisfaction of these claims, which payments equaled approximately 20% of the principal amount of subordinated debt held by them. Anschutz received cash payments of approximately $3.2 million, Oaktree's Principal Activities Group ~~received~~related ~~cash~~to ~~payments of~~marketing ~~approximately $800,000 from REG~~ and ~~GSCP~~business ~~received~~meeting ~~cash~~services ~~payments~~provided ~~from~~by ~~RCI~~RCM ofto ~~approximately~~these ~~$50,000 in respect of certain expenses incurred in connection with RCI's restructuring~~affiliates. ~~In addition, REG paid GSCP $1.0 million for restructuring services.~~

109. RECENT ACCOUNTING PRONOUNCEMENTS

InEffective ~~June~~December ~~2001~~27, 2002, the ~~Financial~~Company ~~Accounting~~adopted ~~Standards Board ("FASB") issued Statement of Financial Accounting Standards ("~~SFAS") No. ~~141~~143, "~~Business Combinations,"~~Accounting ~~and~~for ~~SFAS~~Asset ~~No. 142,~~Retirement ~~"Goodwill and Other Intangible Assets~~Obligations." SFAS No. ~~141~~143 ~~supersedes Accounting Principles Board Opinion No. 16 (APB 16), "Business Combinations," and~~establishes ~~primarily addresses the~~ accounting standards for ~~the~~recognition ~~cost~~and measurement of ~~an acquired business (i.e.,~~ the ~~purchase~~fair ~~price~~value ~~allocation),~~of ~~including~~obligations ~~any~~associated ~~subsequent~~with ~~adjustment to its cost. SFAS No. 142 primarily addresses~~ the ~~accounting~~retirement ~~for~~of ~~goodwill and intangible asset subsequent to their acquisition (i.e., the post~~long-~~acquisition~~lived ~~accounting)~~assets ~~and~~when ~~supersedes~~there ~~APB~~is ~~17,~~a ~~"Intangible~~legal ~~Assets."~~obligation ~~The~~to ~~most~~incur ~~significant~~such ~~changes~~costs. ~~made~~Under by SFAS No. ~~141~~143, ~~involve~~ the ~~requirement~~costs ~~to use the purchase method~~ of ~~accounting~~retiring ~~for~~an ~~all~~asset ~~business~~will ~~combinations,~~be ~~thereby~~recorded ~~eliminating~~as ~~use~~a ofliability ~~the pooling-of-interests~~when ~~method along with~~ the ~~establishment~~retirement ofobligation ~~new~~arises ~~criteria~~and ~~for~~will ~~determining~~be ~~whether~~amortized weto ~~should~~expense ~~recognize~~over ~~intangible~~the ~~assets~~life ~~acquired~~of inthe ~~a business combination separately from goodwill~~asset. ~~SFAS No. 141 is effective for all business combinations initiated after June 30, 2001.~~ The adoption of SFAS No. ~~141~~143 did not have a material impact on the Company's financial position or results of ~~operation~~operations.

~~Under~~In ~~SFAS No.~~April ~~142~~2002, wethe ~~will~~FASB noissued ~~longer~~SFAS ~~amortize goodwill~~No. 145, ~~reorganizational~~"Rescission ~~value in excess~~ of ~~amounts~~FASB ~~allocated~~Statements ~~to identifiable assets or indefinite lived intangible assets~~No. 4, 44 and ~~will~~ ~~test for impairment at least annually at the reporting unit level. Additionally~~64, ~~the~~Amendment ~~amortization period~~ of ~~intangible~~FASB ~~assets~~Statement ~~with finite lives is no longer limited to 40 years~~No. 13, ~~Other long-lived assets will continue to be amortized over their useful lives~~ and ~~reviewed~~Technical ~~for impairment in accordance with~~ Corrections." SFAS No. ~~121,~~145 ~~"Accounting for the Impairment of Long-Lived Assets to be Disposed Of~~updates," clarifies and ~~SFAS~~simplifies ~~No. 144,~~existing ~~"Accounting~~accounting ~~for~~pronouncements including the ~~Impairment~~rescission ~~or Disposal~~ of ~~Long-Lived~~Statement ~~Assets~~4," ~~issued~~which inrequired ~~August 2001.~~all ~~SFAS No. 142~~gains isand ~~effective~~losses ~~for~~from ~~fiscal~~extinguishments ~~years~~of ~~beginning~~debt ~~after~~to ~~December 15,~~be aggregated ~~2001 for all goodwill~~ and ~~other intangible assets~~, ~~including~~if ~~excess reorganization value~~material, ~~recognized~~classified inas an ~~entity's statement~~extraordinary ~~of financial position at that date~~item, ~~regardless~~net of ~~when~~related ~~those~~income ~~assets~~tax ~~were initially recognized~~effect. As ~~required~~a ~~by SFAS No. 142~~result, the ~~standard~~criteria ~~has~~in ~~not~~APB ~~been~~Opinion ~~retroactively~~No. 30 ~~applied~~will tonow ~~the results~~be ~~for~~used ~~the period prior~~ to ~~adoption.~~classify ~~Amortization~~those ~~relating~~gains ~~to goodwill was $2.6 million~~ and $7 losses.~~8 million~~ ~~for~~As ~~the~~a ~~quarter~~result ~~and~~of ~~three~~the ~~quarters ended September 27, 2001. The~~ Company's ~~goodwill~~adoption ~~transitional impairment test indicates that the fair value~~ of ~~its~~SFAS ~~reporting~~No. 145 ~~units~~on ~~exceed~~December 27, 2002, the ~~goodwill~~extraordinary ~~carrying~~gain ~~value~~from ~~and~~debt ~~therefore,~~extinguishment atduring ~~this~~fiscal ~~time,~~2002 ~~goodwill~~has isbeen ~~not~~reclassified ~~deemed~~ to beearnings ~~impaired.~~from ~~The~~continuing ~~Company will conduct its annual valuation in the fourth quarter of 2002~~operations.

17 Effective December 27, 2002, the Company adopted SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 addresses significant issues relating to the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities, and nullifies the guidance in Emerging Issues Task Force ("EITF") Issue No. 94-3 (EITF 94-3), "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring.)" Retroactive application of SFAS No. 146 is prohibited and, accordingly, liabilities recognized prior to the initial application of SFAS No. 146 will continue to be accounted for in accordance with EITF 94-3 or other applicable preexisting guidance.

In ~~June~~November ~~2001~~2002, the FASB issued ~~SFAS~~Interpretation No. ~~143~~45, "Guarantor's Accounting and Disclosure Requirements for ~~Asset~~Guarantees, ~~Retirement~~Including ~~Obligations~~Indirect Guarantees of Indebtedness of Others." ~~SFAS~~ This ~~No. 143~~interpretation ~~establishes~~will ~~accounting~~significantly ~~standards~~change ~~for~~current ~~recognition~~practice in the accounting for, and ~~measurement~~ disclosure of, guarantees. Guarantees meeting the characteristics described in the interpretation are required to be initially recorded at fair value, ofwhich ~~obligations~~is ~~associated~~different ~~with~~from ~~the~~general ~~retirement~~current practice of ~~long-lived~~recognition ~~assets~~of a liability only when ~~there~~loss is aprobable ~~legal~~and ~~obligation~~reasonably toestimable, ~~incur~~as ~~such~~prescribed ~~costs.~~in ~~Under~~ SFAS No. ~~143~~5, ~~the~~"Accounting ~~costs of~~for ~~retiring~~Contingencies." anThe ~~asset~~interpretation ~~will~~also berequires ~~recorded~~a asguarantor ato ~~liability~~make ~~when~~significant ~~the~~new ~~retirement~~disclosures ~~obligation~~for ~~arises~~virtually ~~and~~all ~~will~~guarantees beeven ~~amortized~~if tothe ~~expense~~likelihood ~~over~~of the ~~life~~guarantor's having ofto make payments under the ~~asset.~~guarantee ~~SFAS~~is Noremote. ~~143~~ isThe disclosure requirements in this interpretation were effective for ~~fiscal years~~financial ~~beginning~~statements ~~after~~of ~~June~~interim or annual periods ending after December 15, 2002. The ~~Company~~initial isrecognition ~~evaluating~~and ~~the~~initial ~~impact~~measurement ofprovisions ~~the adoption~~ of this ~~standard~~interpretation ~~and~~are ~~have~~applicable ~~not~~on ~~yet~~a ~~determined~~prospective ~~the~~basis ~~effect~~to guarantees issued or modified after December 31, 2002, irrespective of the guarantor's fiscal year-end. The adoption of this interpretation did not have a material impact on ~~its~~the Company's financial position ~~and~~or results of operations.

In ~~August~~January ~~2001~~2003, the FASB issued ~~SFAS~~Interpretation No. ~~144~~46, "~~Accounting~~Consolidation ~~for the Impairment or Disposal~~ of ~~Long-Lived~~Variable ~~Assets,"~~Interest ~~which~~Entities—an ~~provides~~Interpretation ~~clarifications~~ of ~~certain implementation~~ARB ~~issues with SFAS~~ No. ~~121~~51." ~~along~~This interpretation ~~with~~addresses ~~additional~~consolidation ~~guidance~~by onbusiness ~~the~~enterprises ~~accounting~~of ~~for~~entities ~~the~~in ~~impairment~~which orequity ~~disposal~~investors ofdo ~~long-lived~~not ~~assets.~~have ~~SFAS~~the ~~No. 144~~characteristics ~~supersedes~~of ~~SFAS No. 121~~a ~~and~~controlling ~~applies~~financial tointerest ~~all~~or ~~long-lived~~do ~~assets~~not ~~(including~~have ~~discontinued~~sufficient equity ~~operations)~~at ~~and~~risk ~~consequently~~for ~~amends APB 30, "Reporting~~ the ~~Effects~~entity ofto ~~Disposal~~finance ofits aactivities ~~Segment~~without ofadditional asubordinated ~~Business."~~financial ~~SFAS No. 144~~support ~~develops~~from ~~one~~other ~~accounting model (based on the model in SFAS No~~parties. ~~121)~~ ~~for~~Variable ~~long-lived~~interest ~~assets~~entities ~~that~~ are required to be ~~disposed~~consolidated of by ~~sale,~~their primary asbeneficiaries ~~well~~if asthey ~~addresses~~do ~~the~~not ~~principal implementation~~effectively ~~issues.~~disperse ~~SFAS~~risks ~~No. 144~~among ~~requires~~parties ~~that~~involved. ~~entities~~The ~~measure~~primary ~~long-lived~~beneficiary ~~assets~~of ~~that~~a ~~are~~variable tointerest beentity ~~disposed~~is ofthe byparty ~~sale~~that atabsorbs ~~the~~a ~~lower~~majority of ~~book~~the ~~value~~entity's expected losses or ~~fair~~receives ~~value~~a ~~less~~majority ~~cost~~of toits ~~sell. That~~expected ~~requirement~~residual ~~eliminates~~returns. ~~APB~~The ~~30's~~consolidation ~~requirement~~requirements ~~that~~of ~~discontinued~~this ~~operations~~interpretation beapply ~~measured~~immediately atto ~~net~~variable ~~realizable~~interest ~~value~~entities orcreated ~~that~~after January 31, ~~entities~~2003 ~~include~~and ~~under~~apply ~~"discontinued~~to ~~operations"~~existing entities in the ~~financial~~first ~~statements amounts~~fiscal ~~for~~year ~~operating~~or ~~losses~~interim ~~that~~period ~~have~~beginning ~~not~~after ~~yet occurred. Additionally~~June 15, ~~SFAS No~~2003. ~~144~~ ~~expands~~Certain ~~the~~new ~~scope~~disclosure ofrequirements ~~discontinued~~apply ~~operations~~ to ~~include~~ all ~~components~~financial statements ofissued anafter ~~entity~~January 31, ~~with~~2003. ~~operations~~The ~~that (1) the~~adoption ~~entity~~of ~~can~~this ~~distinguish~~interpretation ~~from~~did ~~the~~not ~~rest~~have ofa ~~the~~material ~~entity~~impact ~~and~~on ~~(2)~~ the ~~entity~~Company's ~~will~~financial ~~eliminate~~position ~~from~~or ~~the~~results ~~ongoing operations~~ of ~~the entity in a disposal transaction~~operations.

~~The~~In ~~Company~~November of ~~adopted~~2002, ~~SFAS~~the EITF reached a consensus on Issue No. ~~144~~02-16, "Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" ("EITF 02-16"). EITF 02-16 addresses the accounting for cash consideration given to a reseller of a vendor's products from a vendor. EITF 02-16 indicates that cash consideration received by a customer from a vendor is presumed to be a reduction in the ~~first~~price ~~quarter~~of the vendor's products or services and should, therefore, be characterized as a reduction of cost ~~2002~~of sales when recognized in the customer's income statement. The ~~adoption~~EITF indicated that such presumption is overcome when the consideration is either (a) a reimbursement of ~~SFAS~~costs Noincurred by the customer to sell the vendor's products, in which case the cash consideration should be characterized as a reduction of that cost when recognized in the customer's income statement, or (b) a payment for assets or services delivered to the vendor, in which case the cash consideration should be characterized as revenue when recognized in the customer's income statement. The EITF also reached a consensus that a rebate or refund of a specified amount of cash consideration that is payable only if the customer completes a specified cumulative level of purchases or remains a customer for a specified time period should be recognized as a reduction of the cost of sales based on a systematic and rational allocation of the cash consideration offered to each of the underlying transactions that results in progress by the customer toward earning the rebate or refund, provided the amounts are reasonably estimable. On December ~~144~~27, 2002, the Company adopted EITF 02-16, effective with arrangements entered into or after November 21, 2002. Such adoption did not have a material impact on the Company's financial position ~~and~~or results of of operations.

In ~~April~~May ~~2002~~2003, the FASB issued SFAS No. ~~145~~150, "~~Recession~~Accounting for Certain Financial Instruments with Characteristics of ~~FASB~~both ~~Statements~~Liabilities Noand Equity. 4," 44This ~~and~~Statement ~~64,~~establishes standards ~~Amendment~~for ofhow ~~FASB~~an ~~Statement~~issuer ~~No. 13,~~classifies and ~~Technical~~measures ~~Corrections~~certain financial instruments with characteristics of both liabilities and equity." SFAS No. ~~145~~150 ~~updates,~~requires ~~clarifies~~certain ~~and~~financial ~~simplifies~~instruments ~~existing~~that embody ~~accounting~~obligations ~~pronouncements~~of ~~including~~ the ~~rescission~~issuer and have characteristics of ~~Statement~~both 4,liabilities ~~which~~and ~~required~~equity ~~all~~to ~~gains~~be ~~and~~classified ~~losses~~as ~~from~~liabilities. ~~extinguishments~~Many of ~~debt~~these toinstruments bepreviously were classified as equity or temporary ~~aggregated~~equity and, ifas ~~material~~such, ~~classified~~SFAS asNo. 150 anrepresents ~~extraordinary~~a ~~item,~~significant ~~net~~change ofin ~~related~~practice ~~income~~in ~~tax~~the ~~effect.~~accounting Asfor a ~~result,~~number ~~the~~of ~~criteria~~mandatorily redeemable equity instruments and certain equity derivatives that frequently are used in ~~APB~~connection ~~Opinion~~with share repurchase programs. SFAS No. 30150 ~~will~~is ~~now~~effective befor ~~used~~all tofinancial ~~classify~~instruments ~~those~~created ~~gains~~or modified after May 31, 2003, and to other instruments ~~losses.~~at ~~The~~the ~~provisions~~beginning of ~~SFAS~~the ~~No.~~first interim period beginning after June ~~145~~15, ~~related~~2003. toThe Company does not expect the ~~rescission~~adoption of ~~Statement~~SFAS 4No. 150 iswill ~~effective~~have ~~for~~a ~~fiscal~~material ~~years~~impact ~~beginning~~on ~~after~~our ~~May 15~~financial position, ~~2002~~cash flows or results of operations.

~~In June 2002, the FASB issued SFAS No~~10. ~~146,~~ ~~"Accounting~~SUBSEQUENT for Costs Associated with Exit or Disposal Activities." SFAS No. 146 addresses significant issues relating to the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities, and nullifies the guidance in Emerging Issues Task Force (EITF) Issue No. 94-3 (EITF 94-3), "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring.)" The provisions of SFAS No. 146 are effective for exit or disposal activities initiated after December 31, 2002. Retroactive application of SFAS No. 146 is prohibited and, accordingly, liabilities recognized prior to the initial application of SFAS No. 146 should continue to be accounted for in accordance with EITF 94-3 or other applicable preexisting guidance. EVENTS

In On July ~~2001~~1, ~~the~~2003, ~~American~~REG ~~Institute~~paid an extraordinary cash dividend of ~~Certified~~$5.05 ~~Public~~per ~~Accountants~~share ~~issued~~of ~~Emerging~~REG ~~Issues~~Class A ~~Task~~and ~~Force~~Class B ~~Topic~~common ~~No.~~stock to stockholders of record on June ~~D-98~~20, 2003. In connection with the extraordinary cash dividend, and pursuant to the antidilution adjustment terms of the REG 2002 Stock Incentive Plan (which ~~requires~~includes ~~that~~certain ~~equity~~employees ~~securities~~of ~~with~~Regal ~~redemption~~Cinemas), ~~features~~the exercise price and the number of shares subject to option held by the Company's option holders were adjusted to restore their economic position to that ~~are~~existing ~~not~~immediately ~~solely~~before the ~~within~~extraordinary dividend and the ~~control~~number of ~~the~~options ~~issuer~~reserved befor ~~classified~~issuance ~~outside~~under ~~permanent~~the ~~equity~~plan were adjusted. ~~This~~There ~~guidance~~were ~~was~~no ~~effective~~accounting consequences for changes ~~our~~made ~~fourth~~to ~~quarter~~reduce ofthe ~~2001~~exercise prices and isincrease tothe benumber ~~applied retroactively.~~of ~~The~~underlying ~~adoption~~shares as a result of ~~this~~the ~~guidance~~extraordinary ~~did~~cash dividend as the (1) the aggregate intrinsic value of the awards immediately after the dividend transaction was not ~~have~~greater athan ~~material~~the ~~impact~~aggregate onintrinsic ~~our~~value ~~financial~~of ~~position~~the orawards ~~results~~immediately before the dividend transaction and (2) the ratio of ~~operations~~the exercise price per share to the market value per share was not reduced.

Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

~~The~~Some ~~following discussion and analysis~~ of the ~~financial~~information ~~condition and results of operations should be read~~ in ~~conjunction~~this ~~with~~Quarterly ~~Regal~~Report ~~Cinemas'~~on ~~consolidated financial statements and notes thereto included elsewhere in this~~ Form 10-Q. ~~Except~~includes ~~with respect to the~~ "~~Combined~~forward-looking ~~Company~~statements" ~~(as~~within ~~defined~~the ~~below~~meaning ~~under "Results~~ of ~~Operations")~~Section 27A ~~results~~ of ~~operations presentation for~~ the ~~three~~Securities ~~quarters~~Act ~~ended~~of ~~September 26~~1933, ~~2002~~as amended, ~~for~~and ~~all periods reported prior to or on January~~Section ~~24,~~21E ~~2002, this discussion relates to the operations~~ of ~~RCI and its subsidiaries prior to RCI's emergence from bankruptcy and~~ the ~~acquisition~~Securities byExchange ~~Anschutz~~Act of ~~its~~1934, ~~controlling~~as ~~equity interest in RCI~~amended. ~~Except~~All ~~with~~statements ~~respect~~other tothan ~~the~~statements ~~"Combined Company" results~~ of ~~operations presentation~~historical ~~for~~facts ~~the~~included ~~three~~in ~~quarters ended September~~this Form 2610-Q, ~~2002~~including, ~~for~~without ~~all periods reported after January 24~~limitation, ~~2002,~~certain ~~this~~statements ~~discussion~~under ~~relates~~"Management's toDiscussion ~~the~~and ~~operations~~Analysis of ~~Regal~~Financial ~~Cinemas~~Condition and ~~its subsidiaries,~~Results ~~including~~of ~~RCI~~Operations", ~~after~~may ~~the~~constitute forward-looking ~~deemed~~statements. ~~date~~In ~~that~~some ~~RCI~~cases ~~emerged~~you ~~from~~can ~~bankruptcy~~identify ~~and~~these ~~Anschutz~~"forward-looking ~~acquired~~statements" ~~its~~by ~~controlling~~words ~~equity~~like ~~interest~~"may," in"will," ~~RCI and Edwards. With respect to the~~ "~~Combined~~should," ~~Company~~" ~~results~~expects," ~~of operations presentation for the three quarters ended September 26~~"plans," ~~2002~~"anticipates," ~~the operating results of RCI for the four weeks ended January 24~~"believes," ~~2002 have been combined with the~~"estimates," ~~operating~~"predicts," ~~results~~"potential" ofor ~~Regal~~"continue" ~~Cinemas,~~or ~~which includes~~ the ~~operating~~negative ~~results~~ of ~~RCI~~those words and ~~Edwards~~other ~~for~~comparable ~~the~~words. ~~thirty~~These forward-~~five~~looking ~~week~~statements ~~period~~involve ~~ended~~risks ~~September 26,~~and ~~2002~~uncertainties. ~~While~~Our ~~the~~ actual ~~date~~results ~~that~~could ~~RCI~~differ ~~emerged~~materially from ~~bankruptcy~~those ~~and~~indicated ~~Anschutz~~in ~~acquired~~these ~~its~~statements. ~~controlling~~The ~~equity~~following ~~interest~~discussion inand ~~RCI~~analysis ~~was~~should ~~January 29,~~be ~~2002,~~read ~~for~~in ~~financial~~conjunction ~~reporting~~with ~~purposes~~ the ~~date~~unaudited iscondensed ~~deemed~~consolidated tofinancial bestatements ~~January 24,~~and ~~2002.~~notes ~~Regal~~thereto ~~Cinemas~~included ~~Corporation was organized primarily to acquire and hold the shares of common stock of Regal Cinemas, Inc~~herein.

The information in this Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this Form 10-Q, including, without limitation, certain statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" may constitute forward-looking statements. These forward-looking statements involve risks and uncertainties and our actual results could differ materially from those indicated in these statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct.

Critical Accounting Policies

Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet as well as the reported amounts of revenues and expenses during the reporting period. We routinely make estimates and judgments about the carrying value of our assets and liabilities that are not readily apparent from other sources. Such estimates and judgments are evaluated and modified as necessary on an ongoing basis. We believe that the following significant accounting policies may involve a higher degree of judgment and complexity:

necessary, the assets' useful lives are revised and the impact on depreciation and amortization is recognized on a prospective basis. Actual values could differ materially from these estimates.

Overview

We are a leading domestic motion picture exhibitor and operate the largest theatre circuit in the United States, based on the number of screens operated. We ~~were~~ ~~formed~~conduct ~~in 1989 by Michael Campbell, who has served as~~ our ~~Chief~~operations ~~Executive~~primarily ~~Officer~~through ~~since inception. From the acquisition of~~ our ~~first~~subsidiaries: ~~theatre~~RCI; inEdwards; ~~1990,~~RCM; weHoyts ~~have consistently grown revenues by the development, acquisition~~ and ~~successful operation of theatre assets~~UATG.

~~Reorganization~~ We acquired RCI on January 29, 2002, the date it emerged from bankruptcy, by exchanging 7,500,000 shares of our common stock for all of the outstanding shares of common stock of RCI. We were formed for the primary purpose of providing financing to RCI upon RCI's emergence from bankruptcy through borrowings under senior credit facilities and by issuing $200 million of senior subordinated notes.

~~Over~~We became ~~the~~a ~~past~~wholly ~~several~~owned ~~years,~~subsidiary ~~film~~of ~~exhibition~~REG ~~companies~~on April 12, ~~including~~2002 ~~us,~~in ~~embarked~~conjunction onwith ~~aggressive~~an ~~programs~~exchange oftransaction ~~rapidly~~in ~~building state-of-the-art~~which ~~theatre~~REG, ~~complexes~~through inits anwholly ~~effort~~owned tosubsidiary ~~increase~~REH, ~~overall~~also ~~industry~~acquired Edwards ~~attendance~~and RCM. ~~These~~REG ~~aggressive~~is ~~new~~controlled ~~building~~by ~~strategies~~Anschutz, ~~generated~~which ~~significant~~controlled ~~competition, resulted~~each inof aus, ~~sharp~~Edwards ~~increase~~and inRCM ~~the~~prior ~~number~~to REG's acquisition of ~~screens~~us ~~operating~~ and ~~rendered~~them ~~many~~in ~~theatres~~the ~~obsolete~~exchange ~~more~~transaction. ~~rapidly~~Following ~~than~~the ~~anticipated.~~exchange ~~The~~transaction, ~~addition~~RCI ofacquired ~~new~~Edwards, ~~theatres~~RCM, Hoyts and ~~screens,~~UATG ~~together~~from ~~with~~REH ~~the~~or ~~fact~~REG ~~that many~~in a series of ~~the~~transactions ~~obsolete~~discussed ~~theatres~~in ~~were~~Note 3—"Acquisitions" ~~leased~~to ~~under~~the ~~long-term~~accompanying ~~commitments~~financial ~~and~~statements. ~~could~~Unless ~~not~~otherwise benoted, ~~closed~~the ~~quickly,~~"Company" ~~produced~~or an"Regal ~~oversupply~~Cinemas" ofrefers ~~screens~~to ~~throughout~~Regal ~~the~~Cinemas ~~exhibition~~Corporation ~~industry~~and atits subsidiaries on a ~~rate~~consolidated ~~much~~basis, ~~quicker~~which ~~than~~includes ~~the~~RCI, ~~industry~~Edwards ~~could effectively~~and ~~handle.~~the ~~The~~assets ~~industry~~of ~~overcapacity~~UATG ~~coupled~~as ~~with~~of ~~declining~~January 24, ~~national~~2002 ~~box~~and ~~office~~RCM ~~attendance~~as ~~severely~~of ~~impacted~~February 21, 2002, the ~~operating~~deemed ~~results~~dates ofat ~~many~~which ~~film~~Anschutz ~~exhibitors~~initially ~~during~~held ~~2000.~~common control Asin aRCI, ~~result~~Edwards, ~~many~~RCM ~~film exhibitors~~and ~~began~~the toassets ~~report~~of ~~severe~~UATG, ~~liquidity~~and ~~concerns,~~includes ~~defaults~~Hoyts ~~under~~as ~~credit~~of ~~facilities~~March 28, ~~renegotiations~~2003, ofthe ~~financial~~date ~~covenants~~at ~~and~~which ~~bankruptcy~~REG ~~filings~~initially held common control in both RCI and Hoyts.

The ~~industry~~Company ~~dynamics~~generates ~~severely~~revenues ~~affected~~primarily ~~RCI~~from admissions and ~~its~~concession ~~results~~sales. ofAdditional ~~operations~~revenues ~~deteriorated~~are ~~during~~generated ~~2000.~~by ~~From~~on-screen ~~1998~~and toin-lobby ~~2000~~advertisements, ~~RCI~~the rental ~~invested~~of ~~over~~theatres ~~$870 million~~for inbusiness ~~capital~~meetings ~~expenditures~~and ~~for~~ other events by RCM and electronic video games located adjacent to the ~~construction~~lobbies of ~~new~~certain ~~movie~~of ~~theatres~~the ~~financed~~Company's ~~primarily~~theatres ~~through~~and ~~additional~~vendor ~~debt~~marketing programs. AsFilm rental acosts ~~result,~~depend ~~RCI~~on ~~had~~the ~~approximately~~popularity ~~$2.0 billion~~of ina ~~principal~~film ~~amount~~and ofthe ~~debt~~length atof ~~December 28,~~time ~~2000.~~since ~~RCI generated~~the ~~EBITDA~~film's ofrelease ~~$181.0 million,~~and ~~which~~generally ~~resulted~~decline inas a ~~ratio~~percentage of ~~total~~admission ~~debt~~revenues tothe ~~EBITDA~~longer ofa ~~11:1~~film is in exhibition. AsBecause the aCompany ~~result~~purchases ofcertain ~~this~~concession ~~leverage~~items, such as fountain drinks and popcorn, in ~~the~~bulk ~~fourth~~and ~~quarter~~not ofpre-packaged ~~2000~~for individual servings, ~~RCI~~the ~~defaulted~~Company ~~under~~is ~~certain~~able ~~financial~~to improve its margins by ~~covenants~~negotiating ~~contained~~volume indiscounts. ~~RCI's~~Other ~~previous~~operating ~~senior~~expenses ~~credit~~consist ~~facilities~~primarily ~~and~~of ~~equipment~~theatre ~~financing~~labor ~~facility~~and occupancy costs.

~~As a~~Critical ~~result~~Accounting of the default under RCI's former senior credit facilities, RCI was prohibited from making interest payments on its 91/2% senior subordinated notes due 2008 (the "Former Regal Notes") and 87/8% senior subordinated notes due 2010 (the "Former Regal Debentures") due on December 1, 2000 and December 15, 2000, respectively. As a result of the interest payment defaults, RCI defaulted under the indentures related to those notes. In May 2001, the holders of RCI's debt under its former senior credit facilities and these former notes accelerated the maturity of all of the outstanding indebtedness under their respective agreements. Policies

~~Following these~~Our ~~events,~~significant onaccounting ~~September~~policies are described in Note 6,2 ~~2001~~to the consolidated financial statements included in Item 8 of our 2002 Annual Report on Form 10-K. Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, ~~RCI~~which ~~began~~require ~~soliciting~~management ~~consents~~to ~~from~~make estimates and assumptions that affect the ~~holders~~reported amounts of the ~~Former~~assets ~~Regal~~and ~~Notes~~liabilities and ~~Former~~disclosures ~~Regal~~of ~~Debentures~~contingent assets and ~~RCI's~~liabilities ~~general~~as ~~unsecured creditors~~of ~~for~~the date of the ~~approval~~balance sheet as well as the reported amounts of revenues and expenses during the ~~Plan,~~reporting ~~which~~period. ~~was~~We routinely make estimates and judgments about the ~~product~~carrying value of ~~negotiations~~our ~~RCI~~assets and ~~its~~liabilities ~~equity~~that ~~investors~~are ~~who~~not readily apparent from other sources. The Company evaluates and modifies on an ongoing basis such estimates and assumptions which include, atbut ~~that~~are ~~time~~not limited to, ~~held~~those arelated ~~significant~~to ~~portion~~film ofcosts, ~~RCI's~~property ~~senior~~and ~~debt~~equipment, goodwill, income taxes and ~~senior~~reorganization ~~subordinated notes~~and purchase accounting. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The ~~Plan~~results ~~received~~of these estimates may form the ~~consent~~basis of the ~~requisite~~carrying ~~number~~value of ~~creditors~~certain inassets ~~October 2001~~and liabilities. ~~Subsequently~~Actual results, ~~the~~under ~~Plan~~conditions ~~was~~and ~~submitted~~circumstances todifferent ~~the~~from ~~Bankruptcy~~those ~~Court~~assumed, onmay ~~October 11~~differ from estimates. The impact and any associated risks related to estimates, ~~2001~~assumptions, and accounting policies are discussed within Management's Discussion and Analysis of Financial Condition and Results of ~~confirmed~~Operations, as ~~amended~~well as in the Notes to the Unaudited Condensed Consolidated Financial Statements, onif ~~December 7~~applicable, ~~2001~~where such estimates, assumptions, and accounting policies affect the Company's reported and expected results.

20 The Company believes the following accounting policies are critical to its business operations and the understanding of its results of operations and affect the more significant judgments and estimates used in the preparation of its consolidated financial statements:

•

The Company estimates its film cost expense and related film cost payable based on management's best estimate of the ultimate settlement of the film costs with the distributors. Film costs and the related film costs payable are adjusted to the final film settlement in the period that the Company settles with the distributors. Actual film costs and film costs payable could differ materially from those estimates.

•

We depreciate and amortize the components of our property and equipment on a straight-line basis over the estimated useful lives of the assets. The estimates of the assets' useful lives require our judgment and our knowledge of the assets being depreciated and amortized. When necessary, the assets' useful lives are revised and the impact on depreciation and amortization is recognized on a prospective basis. Actual economic lives may differ materially from these estimates. In addition, the Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. When the future undiscounted cash flows of the operations to which the assets relate do not exceed the carrying value of the asset, such assets are written down to fair value.

•

The Company adopted SFAS 142, "Goodwill and Other Intangible Assets" in 2002. SFAS 142 specifies that goodwill and indefinite-lived intangible assets will no longer be amortized but instead will be subject to an annual impairment test. Based on an impairment test conducted during the fourth quarter of 2002, the Company was not required to record a charge for goodwill impairment. The Company will perform a fourth quarter goodwill impairment test on an annual basis. In assessing the recoverability of the goodwill, the Company must make various assumptions regarding estimated future cash flows and other factors in determining the fair values of the respective assets. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for these assets in future periods.

•

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the

financial ~~declared~~statement ~~effective~~carrying onamounts ~~January 29,~~of ~~2002~~existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. ~~Certain~~In ~~holders~~addition, ofincome ~~pre-petition~~tax ~~claims~~rules inand ~~respect~~regulations are ofsubject ~~their~~to ~~senior~~interpretation ~~debt~~and ofrequire ~~approximately~~judgment ~~$725~~by the Company and may be challenged by the taxing authorities.0 Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the ~~million~~years ~~exchanged~~in which those ~~pre-petition~~ ~~claims~~temporary ~~for~~differences ~~100%~~are ofexpected ~~RCI's~~to ~~newly-issued~~be ~~common~~recovered ~~stock~~or settled. AsThe aeffect ~~result~~on deferred tax assets and liabilities of ~~this~~a ~~exchange,~~change ~~Anschutz~~in ~~and~~tax ~~Oaktree's~~rates ~~Principal~~is recognized ~~Activities~~in ~~Group,~~income in the ~~holders~~period ofthat includes the ~~largest pre-petition~~enactment ~~claims,~~date. ~~and~~The ~~their~~Company ~~affiliates~~records ~~acquired~~a ~~approximately~~valuation ~~75%~~allowance ofif ~~RCI's~~it ~~common~~is ~~stock~~deemed more likely than not that its deferred income tax assets will not be realized. The Company reassesses the need for such allowance on ~~January 29~~an ongoing basis. Should the Company ultimately realize certain tax assets with a valuation allowance that relate to pre-acquisition periods, ~~2002~~goodwill would be reduced.

•

We applied the principles of purchase and reorganization accounting when recording the acquisitions of controlling equity interests by Anschutz and the exchange of stock for minority interests and the emergence from bankruptcy of the theatre companies and the subsequent acquisition of Hoyts. These accounting principles require that we estimate the fair value of the individual assets and liabilities, including estimates of bankruptcy-related claims. The estimation of the fair value of the assets and liabilities involves a number of judgments and estimates that could differ materially from the actual amounts.

RCI emerged from bankruptcy on January 29, 2002 in accordance with the Plan that was confirmed by the Bankruptcy Court on December 7, 2001. On January 29, 2002, RCI also became our wholly owned subsidiary. The transaction was accomplished by the issuance of 7,500,000 shares of our common stock in exchange for 100% of the outstanding common stock of RCI. We were formed for the primary purpose of providing financing to RCI through borrowings under senior credit facilities and becoming the issuer of $200 million of senior subordinated notes upon RCI's emergence from bankruptcy.

On April 12, 2002, the holders of 100% of our common stock exchanged their stock for shares of stock in REG. REG is an entity formed and controlled by Anschutz, who remains our controlling stockholder indirectly through its controlling interest in REG. Also on April 12, 2002, REG exchanged its stock for stock in two other theatre companies also commonly owned and controlled by Anschutz.

As described in Note 3—"Acquisition of Edwards Theatres, Inc.," RCI acquired all of the outstanding capital stock of Edwards on April 17, 2002. Unless otherwise noted, the "Company" or "Regal Cinemas" refers to Regal Cinemas Corporation and its subsidiaries on a consolidated basis, which includes RCI and Edwards as of January 24, 2002.

Basis of Reporting

Admissions and Concessions Revenues

We generate revenues primarily from admissions receipts and concession sales.

Other Operating Revenues

We generate other operating revenues by offering on-screen advertising and other marketing revenues from certain of our vendor programs and in-theatre advertising. To a lesser extent, we generate other operating revenues from arcades located adjacent to the lobbies of certain of our theatres and other ancillary revenue programs.

Direct Theatre Costs

Our direct theatre costs consist of film rental and advertising costs, costs of concessions and theatre operating expenses. Film rental costs are related to the popularity of a film and are based on admission revenues. Advertising costs consist of the cost of promoting our theatres and the films we exhibit, and concession costs consist of the cost procuring the concessions we sell. Because certain concession items, such as fountain drinks and popcorn, are purchased in bulk and not pre-packaged for individual servings, we are able to negotiate volume discounts. Theatre operating expenses consist primarily of theatre labor and rent and occupancy costs.

Results of Operations

RCI emerged from bankruptcy effective January 29, 2002, the date upon which Anschutz acquired its controlling equity interest in RCI. The financial statements after emergence reflect the predecessor cost basis of Anschutz and the reorganization value attributable to the common stock owned by the other shareholders of RCI. On April 17, 2002, RCI acquired all of the outstanding capital stock of Edwards. Upon becoming a subsidiary of RCI, Edwards' results of operations were consolidated with Regal Cinemas' as of January 24, 2002, the deemed date upon which Anschutz first held common control in both RCI and Edwards.

~~The~~On ~~Company's 2002 statements of operations include information reflecting the four week period ended January~~November 2428, 2002, ~~(Predecessor~~RCI ~~Company)~~acquired ~~and~~all of the ~~quarter~~outstanding ~~and thirty-five~~capital ~~week~~stock ~~period~~of ~~ended~~RCM. ~~September 26,~~Upon ~~2002~~becoming ~~(Reorganized~~a ~~Company).~~subsidiary Asof ~~a result~~RCI, ~~the Company~~RCM's ~~post-reorganization~~results ~~statements~~ of operations ~~have~~were ~~not~~consolidated ~~been prepared on a consistent basis~~ with ~~the pre-reorganization financial statements and are not comparable in all respects to the financial statements prior to the reorganization and RCI~~Regal Cinemas's ~~acquisition~~as of ~~Edwards.~~ ~~For financial reporting purposes, the inception date of the Reorganized Company is deemed to be January~~February 2421, 2002~~. As such~~, ~~operating~~the ~~results~~deemed ~~and~~date ~~financial~~upon ~~position~~which ~~for~~Anschutz ~~periods subsequent~~first toheld ~~January 24,~~common ~~2002~~control ~~are~~in ~~herein~~both ~~referred~~RCI ~~to as the "Reorganized Company"~~ and ~~for all periods ending on or prior to January 24, 2002 as the "Predecessor Company"~~RCM.

InThe ~~order~~Company's to2002 ~~provide~~statements aof ~~meaningful~~operations ~~basis~~include ofinformation ~~comparing~~reflecting the ~~three~~four ~~quarter~~week ~~periods~~period ended ~~September~~January 2624, 2002 ~~and~~(Predecessor ~~September 27,~~Company) ~~2001~~and ~~for purposes of~~ the ~~following~~twenty-two ~~tables~~week period ~~and~~ended ~~discussion~~June 27, ~~the~~2002 ~~operating results of the~~ (Reorganized Company). ~~for~~As ~~the~~a ~~thirty-five weeks ended September 26~~result, ~~2002,~~the ~~which~~Company's ~~includes~~post-reorganization ~~the~~statements ~~results~~ of operations ofhave ~~Edwards~~not ~~for~~been ~~the~~prepared ~~period from~~on ~~January 24,~~a ~~2002~~consistent tobasis ~~September 26, 2002, have been combined~~ with the pre-reorganization ~~operating~~financial ~~results~~statements ofand ~~the~~are ~~Predecessor~~not ~~Company~~comparable ~~for~~in ~~the~~all ~~four~~respects ~~weeks~~to ~~ended~~the ~~January 24,~~financial ~~2002~~statements ~~(collectively~~prior ~~referred~~ to asthe ~~"Combined~~reorganization ~~Company")~~ and ~~are~~RCI's ~~compared~~acquisition toof ~~the~~Edwards. ~~three~~For ~~quarters~~financial ~~ended~~reporting ~~September 27~~purposes, ~~2001. Depreciation, amortization and certain other line items included in~~ the ~~operating~~inception ~~results~~date of the ~~Combined~~Reorganized Company ~~are~~is ~~not~~deemed ~~comparable~~to ~~between~~be ~~periods as the four weeks ended~~ January 24, 2002. ~~and~~As ~~the~~such, ~~quarter~~operating results and ~~three~~financial ~~quarters~~position ~~ended~~for ~~September~~periods subsequent to January 2724, ~~2001~~2002 ofare ~~the~~herein ~~Predecessor~~referred ~~Company~~to doas ~~not include~~ the ~~effects~~"Reorganized ofCompany" ~~fresh-start~~ and ~~purchase~~for ~~accounting adjustments.~~all ~~The combining of reorganized and predecessor~~ periods isending ~~not~~on inor ~~accordance~~prior ~~with~~to ~~accounting~~January 24, ~~principles~~2002 ~~generally~~as ~~accepted in~~ the ~~United~~"Predecessor ~~States of America~~Company."

22 On March 28, 2003, RCI acquired all of the outstanding capital stock of Hoyts. Upon becoming a subsidiary of RCI, Hoyts' results of operations were consolidated with Regal Cinemas' as of March 28, 2003, the deemed date upon which REG first held common control in both RCI and Hoyts.

On June 6, 2003, RCI acquired all of the outstanding capital stock of UATG. Upon becoming a subsidiary of RCI, UATG's results of operations were consolidated with Regal Cinemas' as of January 24, 2002, the deemed date upon which Anschutz first held common control in both RCI and the assets of UATG.

In order to provide a meaningful basis of comparing the twenty-six weeks ended June 26, 2003 and June 27, 2002 for purposes of the following tables and discussion, the operating results of the Reorganized Company for the twenty-two weeks June 27, 2002, which includes the results of operations of Edwards and UATG for the period from January 24, 2002 to June 27, 2002 and RCM for the period from February 21, 2002 to June 27, 2002, have been combined with the operating results of the Predecessor Company for the four weeks ended January 24, 2002 (collectively, the "Combined Company") and are compared to the twenty-six weeks ended June 26, 2003. Depreciation, amortization and certain other line items included in the operating results of the Combined Company are not comparable between periods as the four weeks ended January 24, 2002 of the Predecessor Company do not include the effects of fresh-start and purchase accounting adjustments. The combining of reorganized and predecessor periods is not in accordance with accounting principles generally accepted in the United States of America.

The following table sets forth for the fiscal periods indicated the percentage of total revenues represented by certain items reflected in Regal Cinemas' consolidated statements of operations:

				Regal Cinemas Corporation		Combined Company		Regal Cinemas, Inc.
				Reorganized Company Thirteen Weeks Ended June 26, 2003		Reorganized Company Thirteen Weeks Ended June 27, 2002		Reorganized Company Twenty-six Weeks Ended June 26, 2003		Combined Company Twenty-six Weeks Ended June 27, 2002
				Quarter Ended September 26, 2002		Three Quarters Ended September 26, 2002		Quarter Ended September 27, 2001		Three Quarters Ended September 27, 2001
Revenues:
	Admissions			6867.5	%	6867.68	%	6867.47	%	68.85	%
	Concessions			2826.03		28.03		2726.81		27.59
	Other operating revenues			36.52		3.49		36.82		3.76
		Total operating revenues		100.0		100.0		100.0		100.0
		Total revenues		100.0		100.0		100.0		100.0
Direct theatre costs:
Operating expenses:
	Film rental and advertising costs			3638.84		3738.15		3637.60		3637.50
	Cost of concessions			43.06		4.01		43.16		4.01
	Other theatre operating expenses			33.4		32.3		35.8		38.6
	Rent expense			9.0		8.6		9.2		8.9
	General and administrative			2.8		3.0		2.9		2.8
	Other operating expenses			24.1		22.3		25.2		23.4
		Sub-Total		77.0		76.4		79.4		81.9
	General and administrative			2.7		3.3		2.8		3.2
Merger and restructuring expenses				0.4		0.8		1.1		1.3
	Merger and restructuring expenses and amortization of deferred stock compensation			0.3		0.7		0.2		1.1
~~Depreciation and amortization~~	Depreciation and amortization			6.82		6.40		76.36		76.82
Theatre closing costs and (gain) loss on disposal of operating assets				—		—		0.8		3.6
	Loss (gain) on disposal and impairment of operating assets			0.1		(0.1	)	(0.1	)	—
Loss on impairment of assets				—		0.1		4.2		7.4
		Total operating expenses		84.4	%	83.4	%	84.5	%	83.9	%
		Total operating expenses		84.2	%	83.7	%	92.8	%	(102.0	)%
			Operating income	15.6	%	16.6	%	15.5	%	16.1	%
			Operating income (loss)	15.8	%	16.3	%	7.2	%	(2.0	)%

~~Quarters~~Results ~~and~~of ~~Three~~Operations ~~Quarters~~for ~~Ended~~the ~~September~~thirteen weeks ended June 26, ~~2002~~2003 and ~~September~~June 27, ~~2001~~2002

The following table summarizes certain revenues and revenue-related data for the thirteen weeks ended June 26, 2003 ("Q2 2003 period"), the thirteen weeks ended June 27, 2002 ("Q2 2002 period"), the twenty-six weeks ended June 27, 2003 ("Fiscal 2003 period") and the twenty-six weeks ended June 27, 2002 ("Fiscal 2002 period") (in millions, except average prices):

Total Revenues

The following table summarizes certain revenues and revenue-related data for the quarter ended September 26, 2002 ("Q3 2002 period"), the three quarters ended September 26, 2002 ("Fiscal 2002 period"), the quarter ended September 27, 2001 ("Q3 2001 period") and the three quarters ended September 27, 2001 ("Fiscal 2001 period") (in millions, except average prices):

		Reorganized Company Q2 2003 period		Reorganized Company Q2 2002 period		Reorganized Company Fiscal 2003 period		Combined Company Fiscal 2002 period
Admissions		$	377.7	$	342.2		685.2	$	615.9
Concessions			147.2		142.8		263.7		251.4
Other operating revenues			35.0		20.0		62.8		32.4

	Total revenues	$	559.9	$	505.0	$	1,011.7	$	899.7
Attendance			58.9		57.3		108.5		104.1
Average ticket price		$	6.41	$	5.97	$	6.32	$	5.92
Average concession per patron		$	2.50	$	2.49	$	2.43	$	2.41

		Regal Cinemas Corporation		Combined Company		Regal Cinemas, Inc.
		Quarter Ended September 26, 2002		Three Quarters Ended September 26, 2002		Quarter Ended September 27, 2001		Three Quarters Ended September 27, 2001
Admissions		$	284.1	$	838.1	$	209.2	$	609.2
Concessions			116.1		342.3		85.2		243.9
Other operating revenues			14.7		41.0		11.6		32.3
	Total operating revenues	$	414.9	$	1,221.4	$	306.0	$	885.4
Attendance			47.6		141.8		36.9		108.9
Average ticket price			5.97		5.91		5.67		5.59
Average concession per patron			2.44		2.41		2.31		2.24

Admissions

Total admissions revenues increased $7435.95 million, or 3510.84%, to $~~284~~377.17 million for the Q3Q2 ~~2002~~2003 period, from $~~209~~342.2 million for the Q3Q2 ~~2001~~2002 period. The increase in admissions revenues in the Q3Q2 ~~2002~~2003 period compared to Q3Q2 ~~2001~~2002 period was primarily attributable to a 57.34% increase in ticket prices coupled with a 292.08% increase in attendance,. ofThe ~~which~~increase ~~27.3%~~in isattendance ~~related~~during the Q2 2003 period was principally due to the inclusion of ~~Edwards~~Hoyts ~~for~~from March 28, 2003, partially offset by a general decline in Q2 2003 industry box office results and the Q3closure of 120 underperforming screens since the end of the Q2 2002 period.

Total admissions revenues increased $~~228~~69.93 million, or 3711.63%, to $~~838~~685.12 million for the Fiscal ~~2002~~2003 period, from $~~609~~615.29 million for the Fiscal ~~2001~~2002 period. The increase in admissions revenues in the Fiscal ~~2002~~2003 period compared to the Fiscal ~~2001~~2002 period was primarily attributable to a 56.78% increase in ticket prices ~~coupled~~and ~~with~~ a 304.2% increase in attendance, of which ~~25.1%~~is principally ~~relates~~related to the inclusion of ~~Edwards~~Hoyts from ~~January~~March 2428, 2003 and a full twenty-six weeks of operations of Edwards during the Fiscal 2003 period. The net increase in the Company's Fiscal 2003 attendance was partially offset by a decline in industry box office results and the closure of 120 underperforming screens since the end of the Q2 2002 period.

Concessions

Total concessions revenues increased $304.94 million, or ~~36.~~3.1%, to $~~116~~147.12 million for the Q3Q2 ~~2002~~2003 period, from $85142.28 million for the Q3Q2 ~~2001~~2002 period. The increase in concessions revenues in the Q3Q2 ~~2002~~2003 period compared to the Q3Q2 ~~2001~~2002 period was due to a 50.64% increase in average concessions per patron, ~~coupled~~and ~~with a 29~~2.08% increase in attendance. ~~The~~as ~~increase~~a result inof ~~attendance~~the isinclusion ~~primarily~~of Hoyts from March 28, 2003, offset by a ~~result~~general ofdecline in industry box office results for the ~~inclusion~~Q2 of2003 period and the ~~results~~closure of ~~Edwards~~120 ~~for~~underperforming screens since the end Q3of the Q2 2002 period.

Total concessions revenues increased $9812.43 million, or 404.39%, to $~~342~~263.37 million for the Fiscal ~~2002~~2003 period, from $~~243~~251.94 million for the Fiscal ~~2001~~2002 period. The increase in concessions revenues in the Fiscal ~~2002~~2003 period compared to the Fiscal ~~2001~~2002 period was due to a 70.68% increase in average concessions per patron, ~~coupled~~and ~~with~~ a 304.2% increase in attendance, which is primarily ~~principally~~attributable ~~related to~~ the inclusion of Edwards for a full twenty-six weeks in 2003 and Hoyts from ~~January~~March 2428, ~~2002. Additionally~~2003, ~~the~~partially ~~mix~~offset ofby ~~film~~a ~~product~~general ~~during~~decline in industry box office results for the Fiscal ~~2002~~2003 period ~~consisted~~and ofthe aclosure ~~higher percentage~~ of ~~family films,~~120 ~~which~~underperforming ~~typically~~screens ~~generate~~since ~~higher~~the ~~concession~~end ~~sales~~of ~~per~~the ~~patron~~Q2 2002 period.

Other Operating Revenues

Total other operating revenues increased $315.10 million, or 2675.70%, to $1435.70 million for the Q3Q2 ~~2002~~2003 period, from $1120.60 million for the Q3Q2 ~~2001~~2002 period. Total other operating revenues increased $830.74 million, or 2693.98%, to $4162.08 million for the Fiscal ~~2002~~2003 period, from $32.34 million for the Fiscal ~~2001~~2002 period. Included in other operating revenues are on-screen advertising revenues, meetings and events and other marketing revenues from certain of the Company's vendor marketing programs. The increase in other operating revenues was primarily attributable to the inclusion of ~~Edwards~~Hoyts from March 28, 2003, increases in advertising revenues generated by Regal CineMedia and to a lesser extent, increases in the Company's revenues from vendor marketing programs during the Q3Q2 ~~2002~~2003 and Fiscal ~~2002~~2003 periods.

24Operating Expenses

~~Direct~~ The ~~Theatre~~following ~~Costs~~ table summarizes certain theatre operating expenses for the Q2 2003, Fiscal 2003, Q2 2002 and Fiscal 2002 periods (dollars in millions):

The following table summarizes direct theatre costs for the Q3 2002, Fiscal 2002, Q3 2001 and Fiscal 2001 periods (dollars in millions):

	Reorganized Company Q2 2003 period		Reorganized Company Q2 2002 period		Reorganized Company Fiscal 2003 period		Combined Company Fiscal 2002 period
	$	% of Revenues	$	% of Revenues	$	% of Revenues	$	% of Revenues
Film rental and advertising costs(1)	215.1	56.9	194.4	56.8	374.0	54.6	333.0	54.1
Cost of concessions(2)	20.4	13.9	20.6	14.4	36.8	14.0	36.5	14.5
Rent expense(3)	50.4	9.0	43.4	8.6	93.5	9.2	80.5	8.9
Other operating expenses(3)	135.1	24.1	112.4	22.3	254.4	25.2	210.6	23.4
General and administrative expenses(3)	14.9	2.7	16.6	3.3	28.3	2.8	28.7	3.2

(1): Percentage of revenues calculated as a percentage of admissions revenues.
(2): Percentage of revenues calculated as a percentage of concessions revenues.
(3): Percentage of revenues calculated as a percentage of total revenues.

		Regal Cinemas Corporation		Combined Company		Regal Cinemas Inc.
		Quarter Ended September 26, 2002		Three Quarters Ended September 26, 2002		Quarter Ended September 27, 2001		Three Quarters Ended September 27, 2001
		$	% of Revenues	$	% of Revenues	$	% of Revenues	$	% of Revenues
Film rental and advertising costs(1)		152.9	53.8	452.8	54.0	111.9	53.5	323.4	53.1
Cost of concessions(2)		16.4	14.1	49.1	14.3	12.4	14.6	35.8	14.7
Other theatre operating expenses(3)		138.6	33.4	394.8	32.3	109.6	35.8	342.0	38.6
	Total direct theatre costs(3)	307.9	74.2	896.7	73.4	233.9	76.4	701.2	79.2

Film Rental and Advertising Costs

Film rental and advertising costs increased $4120.07 million, or 3610.6%, to $~~152~~215.91 million in the Q3Q2 ~~2002~~2003 period, from $~~111~~194.94 million in the Q3Q2 ~~2001~~2002 period. Film rental and advertising costs as a percentage of admissions revenues ~~increased~~remained toconsistent 53at 56.9% and 56.8% induring the Q3Q2 ~~2002~~2003 ~~period~~and asQ2 ~~compared~~2002 toperiods, 53respectively.5% ~~in the Q3 2001 period.~~ Film rental and ~~advertising~~ advertising costs increased $~~129~~41.40 million, or 4012.03%, to $~~452~~374.80 million in the Fiscal ~~2002~~2003 period, from $~~323~~333.40 million in the Fiscal ~~2001~~2002 period. Film rental and advertising costs as a percentage of admissions revenues increased slightly to 54.06% in the Fiscal ~~2002~~2003 period as compared to 5354.1% in the Fiscal ~~2001~~2002 period. The increase in film rental and advertising costs ~~in the Q3 2002 and~~during ~~Fiscal 2002 periods from~~ the Q3Q2 ~~2002~~2003 and Fiscal ~~2001~~2003 periods was primarily attributable to the inclusion of Edwards infor ~~2002~~a ~~coupled~~full ~~with~~twenty-six ~~higher~~weeks ~~box~~in ~~office~~the ~~revenues,~~Fiscal ~~which~~2003 ~~translated~~period ~~into~~and ~~higher~~Hoyts ~~film rental~~from ~~costs~~March 28, 2003.

Cost of Concessions

Cost of concessions ~~increased~~decreased $4.0.2 million, or 321.30%, to $1620.4 million in the Q3Q2 ~~2002~~2003 period, from $1220.46 million in the Q3Q2 ~~2001~~2002 period. Cost of concessions as a percentage of concessions revenues decreased to 1413.19% in the Q3Q2 ~~2002~~2003 period as compared to 14.64% in the Q3Q2 ~~2001~~2002 period. Cost of concessions increased $130.3 million, or 37 0.28%, to $4936.18 million in the Fiscal ~~2002~~2003 period, from $3536.85 million in the Fiscal ~~2001~~2002 period. Cost of concessions as a percentage of concessions revenues decreased to 14.30% in the Fiscal 2003 ~~2002~~ period as compared to 14.75% in the Fiscal ~~2001~~2002 period. The decrease in the cost of concessions in Q3Q2 ~~2002~~2003 and Fiscal ~~2002~~2003 periods as a percentage of concessions revenues is primarily ~~attributable~~ attributable to the realization of operating efficiencies realized through the 2002 integration of Regal Cinemas and Edwards and ~~Regal~~to ~~Cinemas~~a inlesser extent, the ~~Fiscal~~second ~~2002~~quarter ~~period~~2003 integration of Hoyts.

~~Other~~Rent ~~Theatre Operating Expenses~~Expense

~~Other~~Rent ~~theatre~~expense ~~operating expenses~~ increased $297.0 million, or 2616.51%, to $~~138~~50.64 million in the Q3Q2 ~~2002~~2003 period, from $~~109~~43.64 million in the ~~Q3 2001~~Q2 2002 period. ~~Other~~Rent ~~theatre operating expenses~~ expense as a percentage of total revenues ~~decreased~~was to9.0% 33and 8.46% infor the Q3Q2 ~~2002~~2003 ~~period~~and asQ2 ~~compared~~2002 toperiods, 35respectively.8% inRent ~~the~~expense ~~Q3 2001 period. Other theatre operating expenses~~ increased $5213.80 million, or 1516.41%, to $~~394~~93.85 million in the Fiscal ~~2002~~ 2003 period, from $~~342~~80.05 million in the Fiscal ~~2001~~2002 period. ~~Other~~Rent ~~theatre~~expense ~~operating expenses~~ as a percentage of total revenues ~~decreased~~was to9.2% 32and 8.39% infor the Fiscal ~~2002~~2003 ~~period~~and as2002 ~~compared~~periods, ~~to 38~~respectively.6% ~~in the Fiscal 2001 period.~~ The ~~decrease~~increase in ~~other~~rent expense ~~theatre operating expenses as a percentage of total revenues~~ in the ~~Q3 2002~~Q2 2003 and Fiscal ~~2002~~2003 periods was primarily attributable to ~~declines in rent and occupancy costs associated with~~ the ~~closure~~inclusion of ~~certain~~Hoyts ~~under-performing~~from ~~theatres~~March 28, in2003, ~~2001~~ coupled with ~~operating efficiencies~~marginal ~~realized~~increases ~~through the integration of Edwards and Regal Cinemas~~ in ~~the~~rent ~~Fiscal~~at ~~2002~~expanded ~~period~~locations.

Other Operating Expenses

Other operating expenses increased $22.7 million, or 20.2%, to $135.1 million in the Q2 2003 period, from $112.4 million in the Q2 2002 period. Other operating expenses as a percentage of total revenues increased to 24.1% in the Q2 2003 period as compared to 22.3% in the Q2 2002 period. Other operating expenses increased $43.8 million, or 20.8%, to $254.4 million in the Fiscal 2003 period, from $210.6 million in the Fiscal 2002 period. Other operating expenses as a percentage of total revenues rose to 25.2% in the Fiscal 2003 period as compared to 23.4% in the Fiscal 2002 period. The increase in total other operating expenses and as a percentage of total revenues in the Q2 2003 and Fiscal 2003 periods was primarily attributable to incremental costs associated with the inclusion of Hoyts from March 28, 2003 and a full twenty-six weeks of Edwards and Regal CineMedia for the Fiscal 2003 period coupled with incremental expenses associated with Regal CineMedia, which began substantive operations in the second quarter of 2002. Such increases are partially offset by operating efficiencies realized through the 2002 integration of Regal Cinemas and Edwards and the 2003 integration of Hoyts.

General and Administrative Expenses

General and administrative expenses ~~increased~~decreased $21.7 million or 3010.32% to $1114.69 million during the Q3Q2 ~~2002~~2003 period, from $816.96 million in the Q3Q2 ~~2001~~2002 period. As a percentage of total revenues, general and administrative expenses were approximately 2.87% and 23.93% in the Q3Q2 ~~2002~~2003 and Q3Q2 ~~2001~~2002 periods, respectively. ~~The~~General ~~increase~~and administrative expenses decreased $0.4 million or 1.4% to $28.3 million during the Q3Fiscal ~~2002~~ 2003 period, from $28.7 million in ~~general~~the Fiscal 2002 period. As a percentage of total revenues, general and administrative ~~expense~~expenses ~~was~~were ~~primarily~~approximately ~~attributable~~2.8% toand ~~higher~~3.2% ~~staffing~~in ~~levels~~the ~~maintained~~Fiscal ~~during~~2003 ~~the~~and Q3Fiscal 2002 ~~period~~periods, respectively. The decrease in general and ~~other~~administrative ~~costs~~expenses ~~associated~~during ~~with~~the Q2 2003 and Fiscal 2003 periods was primarily attributable to operating efficiencies realized through the 2002 integration of Regal Cinemas and Edwards and to a lesser extent, the second quarter 2003 integration of Hoyts.

General and administrative expenses increased $12.2 million or 50.0% to $36.6 million during the Fiscal 2002 period, from $24.4 million in the Fiscal 2001 period. As a percentage of total revenues, general and administrative expenses were approximately 3.0% and 2.8% in the Fiscal 2002 and Fiscal 2001 periods, respectively. The increase during the Fiscal 2002 period in general and administrative expense was primarily attributable to higher staffing levels maintained during the Fiscal 2002 period and other costs associated with the integration of Regal Cinemas and Edwards.

Depreciation and Amortization

Depreciation and amortization increased $54.7 million, or 2515.6%, to $2834.09 million in the Q3Q2 ~~2002~~2003 period, from $2230.32 million in the Q3Q2 ~~2001~~2002 period. Depreciation and amortization increased $910.37 million, or 1319.52%, to $7866.3 million in the Fiscal ~~2002~~2003 period, from $6955.06 million in the Fiscal ~~2001~~2002 period. The increase in depreciation and amortization during the Q3Q2 ~~2002~~2003 and Fiscal ~~2002~~2003 periods ~~in depreciation and amortization~~ is primarily due to the inclusion of ~~Edwards,~~Hoyts ~~offset~~from byMarch 28, ~~the~~2003 ~~closure~~and ofa ~~certain~~full ~~under~~twenty-~~performing~~six ~~theatres~~weeks ~~and write down~~ of ~~property~~ Edwards and Regal ~~equipment~~CineMedia ~~associated~~for ~~with~~Fiscal ~~Regal Cinemas' reorganization~~2003, ~~and~~offset by the ~~adoption~~closure of ~~SFAS~~120 ~~No. 142,~~under-performing ~~"Goodwill~~screens ~~and~~since ~~Other~~the ~~Intangible~~end ~~Assets,"~~of ~~which resulted in~~ the ~~Company~~Q2 no2002 ~~longer amortizing certain identifiable intangible assets~~period.

26Operating Income

Operating ~~Income~~income ~~(Loss)~~ totaled approximately $87.2 million for the Q2 2003 period. The reported operating income for the Q2 2003 period represents an increase of $3.4 million from operating income of $83.8 million in the Q2 2002 period. Operating income totaled approximately $156.6 million for the Fiscal 2003 period, which represents an increase of $12.1 million from $144.5 in the Fiscal 2002 period. The increase in operating income during the Q2 2003 and Fiscal 2003 periods is primarily attributable to the growth in total revenues related to the inclusion of Hoyts from March 28, 2003 coupled with the realized benefits of the 2002 integration of Edwards into Regal Cinemas and to a lesser extent, the 2003 integration of Hoyts.

Operating income totaled approximately $65.5 million for the Q3 2002 period. The reported operating income for the Q3 2002 period represents an increase of $43.6 million from operating income of $21.9 million in the Q3 2001 period. The increase in operating income is primarily attributable to the growth in total revenues coupled with the realized benefits of the integration of Edwards into Regal Cinemas in addition to the line items discussed in previous sections.

Operating income totaled approximately $199.2 million for the Fiscal 2002 period. The reported operating income for the Fiscal 2002 period represents an increase of $217.0 million from the $17.8 million operating loss in the Q3 2001 period. The increase in operating income reflects the impact of our restructuring efforts. The Fiscal 2001 period included charges for theatre closing costs and loss on disposal of operating assets of $31.9 million and loss on impairment of assets of $65.3 million. Such reported line items were significantly less in the Fiscal 2002 period as a result of our restructuring efforts. In addition, an increase in total revenue coupled with the realized benefits of the integration of Edwards into Regal Cinemas contributed to the increase in operating income.

Interest Expense

Interest expense ~~decreased~~increased $310.84 million, or 672.56%, to $15.36 million in the Q3Q2 ~~2002~~2003 period, from $4715.12 million in the Q3Q2 ~~2001~~2002 period. The ~~Interest~~increase is interest expense in the Q2 2003 is due to higher average outstanding borrowings on the amended and restated Regal Cinemas senior credit facility during the Q2 2003 period. Interest expense decreased $983.06 million, or 6610.8%, to $4829.8 million in the Fiscal ~~2002~~2003 period, from $~~146~~33.84 million in the Fiscal ~~2001~~2002 period. The decrease in interest expense in the ~~Q3 2002 and~~ Fiscal ~~2002~~2003 period ~~periods~~ is due to RCI's debt restructuring associated with its Chapter 11 bankruptcy filing, coupled with lower weighted average ~~outstanding~~ interest rates on ~~our~~its new outstanding debt. RCI emerged from bankruptcy on January 29, 2002.

Income Taxes

The provision for income taxes of $28.9 million and $28.5 million for the Q2 2003 and Q2 2002 periods reflect effective tax rates of approximately 40.2% and 42.2%, respectively. The provision for income taxes of $50.7 million and $40.1 million for the Fiscal 2003 period and the twenty-two weeks ended June 27, 2002 reflect effective tax rates of approximately 39.7% and 40.9%, respectively. No benefit for income taxes was recorded infor the Q3four ~~2001~~weeks ~~and~~ended ~~Fiscal~~January 24, ~~2001~~2002 ~~periods~~ because the Company recorded an offsetting valuation ~~allowances~~allowance against the resulting deferred tax ~~assets~~asset, as it was more likely than not that such deferred tax assets would not be realized. Accordingly, the effective tax rate for ~~the Q3 2001 and Fiscal 2001 periods was 0%. The~~ ~~provision for income taxes of $19.3 million for~~ the Q3four ~~2002 period and $55.1 million for the thirty-five~~ weeks ended ~~September~~January 2624, 2002 ~~reflect~~is ~~effective tax rates of approximately 38.3% and 40.~~0%~~, respectively~~.

Net Income ~~(Loss)~~

Net income totaled $3143.20 million for the Q3Q2 ~~2002~~2003 period. The reported net income for the Q3Q2 ~~2002~~2003 period represents an increase of $574.70 million from ~~the~~net income of $2639.50 million ~~net loss~~ in the Q3Q2 ~~2001~~2002 period. Net income totaled $~~503~~76.29 million for the Fiscal ~~2002~~2003 period, which represents ana ~~increase~~decrease of $~~651~~401.48 million from ~~the~~net income of $~~148~~478.~~2 million~~7 ~~net loss~~ in the Fiscal ~~2001~~2002 period. The Fiscal 2002 period ~~includes~~included a $661.9 million ~~extraordinary~~ gain on extinguishment of debt related to the RCI restructuring.

Changes in Cash Flows

Cash flows generated from operating activities were approximately $207.7 million for the Fiscal 2003 period compared to approximately $103.8 million for the Fiscal 2002 period. The increase was attributable to a full twenty-six weeks of operations of Edwards and Regal CineMedia in 2003 and the results of Hoyts from March 28, 2003 coupled with certain increases in non cash items and working capital items. Cash flows used in investing activities increased by $515.5 million during the Fiscal 2003 period and is primarily attributable to the Q2 2003 purchase of Hoyts and UATG and increased capital expenditures as a result of a full twenty-six weeks of operations for Edwards during 2003 and Hoyts from March 28, 2003. Cash flows provided by financing activities were approximately $278.6 million for the Fiscal 2003 period compared to cash flows used in financing activities of approximately $181.1 million for the Fiscal 2002 period. The increase in cash flows provided by financing activities was primarily attributable to additional borrowings under the amended and restated Regal Cinemas senior credit facility related to the purchase of UATG during the second quarter of 2003.

Liquidity and Capital Resources

~~Our~~The ~~revenues~~Company ~~are~~conducts ~~generally~~its ~~collected~~operations inthrough ~~cash~~its ~~through~~subsidiaries: ~~admissions~~RCI, ~~and~~Edwards, ~~concessions~~RCM, ~~revenues~~Hoyts and UATG. ~~Our~~The ~~operating~~Company ~~expenses~~expects ~~are~~its ~~primarily~~primary ~~related~~uses of cash to ~~film~~be ~~and~~for ~~advertising~~operating ~~costs,~~expenses ~~rent~~ and ~~occupancy,~~general ~~and~~corporate ~~payroll.~~purposes ~~Film~~related ~~costs~~to ~~are~~corporate ~~ordinarily~~operations. ~~paid~~The toCompany's ~~distributors~~principal ~~within~~sources ~~30 days~~of ~~following~~liquidity ~~receipt~~are offrom ~~admissions~~its ~~revenues,~~operating ~~and~~subsidiaries. In the ~~cost~~Company's ofoperating ~~our~~subsidiaries, principal ~~concessions~~uses ~~are~~of ~~generally paid~~cash towill ~~vendors~~be ~~approximately~~for ~~30 days~~operating ~~from~~expenses, ~~purchase.~~capital ~~Because~~expenditures, ~~our~~and ~~revenues~~debt ~~are~~service. ~~primarily~~The ~~cash~~principal ~~transactions~~sources ~~from~~of ~~admissions~~liquidity ~~and~~for ~~concessions,~~the ~~but~~ Company's ~~our~~subsidiaries ~~current~~are ~~liabilities~~cash ~~generally~~generated ~~include~~from ~~items that~~their ~~will~~operations, ~~become~~cash ~~due~~on ~~within~~hand ~~twelve~~and ~~months,~~the atrevolving ~~any~~credit ~~given~~facilities ~~time,~~provided ~~our~~for ~~balance~~under ~~sheet~~the isamended ~~likely~~and torestated ~~reflect~~Regal aCinemas ~~working~~senior ~~capital~~credit ~~deficit~~facility.

27 The Company's revenues are generally collected in cash through admissions and concessions revenues. The Company's operating expenses are primarily related to film and advertising costs, rent and occupancy, and payroll. Film costs are ordinarily paid to distributors within 30 days following receipt of admissions revenues and the cost of the Company's concessions are generally paid to vendors approximately 30 days from purchase. The Company's current liabilities generally include items that will become due within twelve months and, as a result, at any given time, the Company's balance sheet is likely to reflect a working capital deficit.

WeThe ~~primarily~~Company ~~lease~~funds ~~our~~the ~~theatres~~cost ~~pursuant~~of toits ~~long-term~~operating ~~non-cancelable~~subsidiaries' ~~operating~~capital ~~leases~~expenditures through internally generated cash flow, cash on hand and financing activities. AsThe Company's capital requirements have historically arisen principally in connection with acquisitions of ~~September 26~~theatres, ~~2002~~new theatre openings, adding new screens to existing theatres, upgrading the Company's ~~estimated~~theatre ~~contractual~~facilities and ~~cash~~replacing equipment. The Company intends to continue to grow its theatre circuit through selective expansion and acquisition opportunities. The Company currently expects capital expenditures for ~~obligations~~theatre ~~over~~development, replacement, expansion, upgrading, and maintenance to be in the ~~next~~range ~~several~~of ~~years~~$75 million ~~are~~to as$85 million ~~follows~~in (2003. In addition to capital expenditures associated with its theatre operations, the Company expects to incur capital expenditures of approximately $50 million in ~~millions):~~connection with RCM during 2003. The Company anticipates a significant portion of the RCM capital expenditures to be made in connection with the development and deployment of its digital content network to provide advertising and promotional services and to distribute various forms of digital programming. For the Fiscal 2003 period, the Company invested an aggregate of approximately $61.4 million in capital expenditures.

	Payments Due by Period
	Total		Current		2-3 Years		4-5 Years		After 5 Years
Contractual Cash Obligations
Long-term debt	$	575.0	$	16.8	$	22.5	$	22.5	$	513.2
Capital lease obligations		1.5		—		0.1		0.1		1.3
Lease financing arrangements		98.3		1.8		3.9		5.5		87.1
General unsecured creditors		33.3		33.3		—		—		—
Other long-term obligations		3.3		0.5		1.1		1.2		0.5
Operating leases		1,813.3		110.7		224.2		223.2		1,255.2
	$	2,524.7	$	163.1	$	251.8	$	252.5	$	1,857.3

On March 28, 2003, RCI acquired all of the outstanding capital stock of Hoyts from REG for a purchase price of approximately $213.1 million, subject to certain post-closing adjustments. The purchase price includes cash of approximately $188.1 million, and the assumption of certain capital lease and other obligations with a fair value of approximately $25.0 million. Hoyts is comprised of a total of 50 theatres and 534 screens located in 10 states in the Northeastern United States. The Company substantially completed the integration of Hoyts during the second quarter of fiscal 2003.

~~The~~On ~~following~~June 6, ~~table~~2003, ~~summarizes~~RCI ~~our~~acquired ~~potential~~all ~~commitments~~of ~~based~~the onoutstanding ~~arrangements~~capital stock of UATG from REH, consisting of 438 screens in ~~place~~46 asleased theatres, certain fee properties and certain other assets under construction, for an estimated cash purchase price of ~~September~~approximately $311.4 ~~26,~~million. ~~2002~~The ~~(in~~Company ~~millions):~~entered into an additional $315.0 million term loan under the amended and restated Regal Cinemas senior credit facility to fund the purchase price. See Note 4—"Long-Term Obligations" for further description of the amended and restated Regal Cinemas senior credit facility.

	Total Amounts Committed		Current	2-3 Years	4-5 Years	After 5 Years
Other Commercial Commitments
Lines of credit	$	145.0	—	—	—	$	145.0
Total commercial commitments	$	145.0	—	—	—	$	145.0

As of June 26, 2003, Regal Cinemas had $145 million committed under its undrawn senior revolving credit facility, $525.9 million outstanding under its senior secured term loans and $350 million principal amount of 9³/8% senior subordinated notes due 2012. Regal Cinemas also maintains letters of credit of $30 million as of June 26, 2003, which reduces the availability under its senior revolving credit facility.

We ~~fund~~ The ~~the~~Company ~~cost~~primarily ofleases ~~our~~its ~~capital~~theatres ~~expenditures~~pursuant ~~through~~to ~~internally~~long-term ~~generated~~non-cancelable ~~cash~~operating ~~flow, cash on hand and financing activities~~leases. ~~Our~~As ~~capital requirements have historically arisen principally in connection with acquisitions~~ of ~~theatres~~June 26, ~~new theatre openings~~2003, ~~adding~~the ~~new~~Company's ~~screens~~estimated tocontractual cash ~~existing~~obligations ~~theatres~~ and ~~upgrading~~commercial ~~our~~commitments ~~theatre~~over ~~facilities. During~~ the ~~Fiscal~~next ~~2002~~several ~~and~~years ~~Fiscal~~are ~~2001~~as ~~periods,~~follows ~~we invested $28.7~~(in ~~million~~millions): ~~and $23.7 million, respectively, in capital expenditures.~~

We intend to continue to grow our theatre circuit through selective expansion and acquisition opportunities. We anticipate that capital expenditures related to our theatre circuit will be approximately $45 million in 2002. Approximately $35.0 million represents maintenance capital expenditures as we plan to open one new theatre in 2002. The Company currently expects capital expenditures for theatre development, expansion, upgrading and maintenance in 2003 to be between approximately $50 million and $60 million.

			Payments Due by Period
			Total		Current		2–3 Years		4–5 Years		After 5 Years
Contractual Cash Obligations
	Long-term debt		$	875.9	$	27.0	$	54.0	$	208.6	$	586.3
	Lease financing arrangements			97.0		2.0		5.1		6.8		83.1
	Bankruptcy claims and liabilities			4.0		4.0		—		—		—
	Capital leases			23.6		0.9		1.8		3.3		17.6
	Other long term obligations			4.1		0.6		1.5		0.5		1.5
	Operating leases			2,979.5		195.3		379.3		374.0		2,030.9

		Total contractual cash obligations	$	3,984.1	$	229.8	$	441.7	$	593.2	$	2,719.4

Cash flows generated from operating activities were approximately $154.5 million for the Fiscal 2002 period compared to approximately $56.4 million for the Fiscal 2001 period. The increase was attributable to increases in net income and certain non-cash items and changes in working capital items.

		Amount of Commitment Expiration per Period
		Total Amounts Committed		Current	2–3 Years	4–5 Years	After 5 Years
Other Commercial Commitments
	Total commercial commitments(1)	$	145.0	—	—	—	$	145.0

(1): As of June 26, 2003, Regal Cinemas had $145 million committed under its undrawn senior revolving credit facility. Regal Cinemas also maintain letters of credit of $30 million (of which approximately $16.8 million was outstanding as of June 26, 2003) which reduces the availability under its senior revolving credit facility.

~~We believe~~The Company believes that the amount of cash and cash equivalents on hand, cash flow expected from operations, and availability under ~~our~~its revolving credit facilities will be adequate for usthe Company to execute ~~our~~ its business strategy and meet ~~our~~ anticipated requirements for lease obligations, capital expenditures, working capital and debt service for at least 12 months.

Financing Arrangements

The following is a description of material indebtedness of the Company:

Regal Cinemas Senior Credit Facility

Regal Cinemas entered into an amended and restated senior credit agreement with several financial institutions including Lehman Brothers, Inc., Credit Suisse First Boston Corporation, General Electric Capital Corporation and Lehman Commercial Paper, Inc., on August 12, 2002, amending its existing senior credit agreement to increase the amount available for borrowing under the senior secured revolving credit facility from $100 million to $145 million and to decrease the amount of the senior secured term loan from $270 million to $225 million. Under the amended and restated senior credit agreement, the lenders advanced Regal Cinemas $225.0 million through a senior secured term loan, which was used, together with cash on hand at Regal Cinemas, Inc., to repay in full its existing $270.0 million term loan. The amended and restated senior credit agreement also made available, subject to the satisfaction of conditions customary for extensions of credit of this type, an additional $145.0 million through a senior secured revolving credit facility. The $225.0 million term loan will amortize at a rate of 5% per annum until December 31, 2006, with the remaining 75% due in four installments ending on December 31, 2007. The senior secured revolving credit facility became available on August 12, 2002 and will be available until January 29, 2007. Regal Cinemas also maintains a letter of credit for $15.0 million related to its general unsecured claims as of September 26, 2002, which reduces the availability under its senior secured revolving credit facility to $130 million. As of September 26, 2002, there were no amounts outstanding on the senior secured revolving credit facility.

Regal Cinemas may prepay borrowings under the amended and restated senior credit agreement in whole or in part, in minimum amounts and subject to other conditions set forth in the amended and restated senior credit agreement. Regal Cinemas is required to make mandatory prepayments to the lenders from:

The mandatory prepayment of the obligations under the amended and restated senior credit agreement is subject to specified exceptions. The lenders under the term loan facility may elect to decline any mandatory prepayment.

Regal Cinemas' obligations are secured by, among other things, the capital stock of most of its subsidiaries, mortgages on most of its properties and a security interest in substantially all of its assets.

The amended and restated senior credit agreement includes several financial covenants. Regal Cinemas cannot permit, at the end of each applicable fiscal quarter:

The amended and restated senior credit agreement also contains customary covenants, including limitations on Regal Cinemas' ability to incur debt, and events of default, including a change of control, as defined in the amended and restated senior credit agreement. The amended and restated senior credit agreement also limits Regal Cinemas' ability to pay dividends, to make advances to the Company or its other subsidiaries and otherwise to engage in intercompany transactions. These limitations will restrict its ability to fund operations outside of Regal Cinemas with funds generated at Regal Cinemas.

Regal Cinemas Senior Subordinated Notes

On January 29, 2002, Regal Cinemas issued $200.0 million aggregate principal amount of 93/8% senior subordinated notes due 2012. Subsequently, on April 17, 2002, Regal Cinemas issued an additional $150.0 million aggregate principal amount of 93/8% senior subordinated notes due 2012 with identical terms. The January notes were initially purchased by Credit Suisse First Boston Corporation and Lehman Brothers Inc., and the April notes were initially purchased by Credit Suisse First Boston Corporation. In each instance, the notes were resold to various qualified institutional buyers and non-U.S. persons pursuant to Rule 144A and Rule 903 or Rule 904, respectively, under the Securities Act of 1933. Interest on the notes is payable semi-annually on February 1 and August 1 of each year, and the notes mature on February 1, 2012. The notes are guaranteed by all of Regal Cinemas' existing wholly owned subsidiaries, and, under the circumstances specified in the indenture, future subsidiaries will also be required to guarantee the notes. The notes are unsecured and rank behind Regal Cinemas' obligations under its senior credit facility and any future senior indebtedness.

Regal Cinemas has the option to redeem the notes, in whole or in part, at any time on or after February 1, 2007 at redemption prices declining from 104.688% of their principal amount on February 1, 2007 to 100% of their principal amount on or after February 1, 2010, plus accrued interest. At any time on or prior to February 1, 2005, Regal Cinemas may also redeem up to 35% of the aggregate principal amount of the notes at a redemption price of 109.375% of their principal amount, plus accrued interest, within 90 days of an underwritten public offering of common stock of Regal Cinemas or of a future underwritten public offering of the Company's common stock, the proceeds of which are used as a contribution to the equity of Regal Cinemas. Upon a change of control, as defined in the indenture pursuant to which the notes were issued, Regal Cinemas is required to offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued interest. In addition, the indenture limits Regal Cinemas' and its subsidiaries' ability to, among other things, incur additional indebtedness and pay dividends on or repurchase capital stock.

In May 2002, Regal Cinemas filed a registration statement under the Securities Act of 1933 pursuant to a registration rights agreement entered into in connection with the 93/8% senior subordinated notes offerings. Under the registration rights agreement, the Company was required to

register for exchange under the Securities Act of 1933 identical 93/8% senior subordinated notes due 2012 to replace the outstanding 93/8% senior subordinated notes due 2012, which were issued in January and April 2002 without registration under the Securities Act of 1933 pursuant to exemptions from registration available thereunder. The Securities and Exchange Commission declared the registration statement relating to the exchange offer effective on July 10, 2002, and the exchange of the registered 93/8% senior subordinated notes due 2012 for the unregistered 93/8% senior subordinated notes due 2012 was consummated on August 14, 2002. Regal Cinemas did not receive any proceeds from the exchange offer transaction.

RCI Leveraged Sale and Leaseback

During 2000, RCI entered into a sale and leaseback transaction with an unaffiliated third party, involving 15 of its owned theatres. Under the terms of this transaction, RCI sold the land and related improvements of the theatres for $45.2 million and leased them back for an initial lease term of 20 years, with an option to extend it for up to 20 additional years. Regal Cinemas accounts for these leases as operating leases.

Regal Cinemas Lease Financing Arrangements

For some of the Company's new theatre sites built in fiscal years 1999, 2000 and 2001, the Company was considered the owner (for accounting purposes) of the theatre during the construction period. In accordance with Emerging Issues Task Force No. 97-10, the Company was required to record the balance sheet obligations when the construction of the theatre was completed resulting in payments being recorded as interest expense and principal reduction rather than rent expense. These leases typically run for a period of 20 years.

Edwards Leveraged Sale and Leaseback

During 2000, Edwards entered into two sale leaseback transactions whereby Edwards sold two of its properties and leased them back from an unaffiliated third party. As part of these transactions, an additional location was sold with a portion of the building being leased back for corporate use. The related leases are being accounted for as operating leases.

During 1999, Edwards entered into four sale and leaseback transactions whereby Edwards sold four theatres and leased them back from an unaffiliated third party. The related leases are being accounted for as operating leases.

Bankruptcy Claims

RCI and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At ~~September~~June 26, ~~2002~~2003, ~~the~~Regal ~~Company~~Cinemas had accrued approximately $334.30 million for the estimated costs to resolve such bankruptcy claims. In the opinion of management, based on its examination of these matters, its ~~experience~~ experience to date and discussions with legal counsel, the outcome of these legal matters, after taking into consideration the amounts already accrued, is not expected to have a material effect on the Company's liquidity or results of operations. To the extent ~~the~~these ~~RCI~~ claims are allowed ~~by the bankruptcy court~~, they will be funded with cash on hand, cash flow from operations or borrowings under Regal Cinemas' revolving credit facility. ToIn ~~the~~addition ~~extent~~to ~~the~~these ~~Edwards~~sources ~~claims~~of ~~are~~funding, ~~allowed~~with byrespect ~~the~~to ~~bankruptcy~~allowed ~~court~~Edwards claims, they ~~will~~may also be funded from restricted cash that has been set aside, ~~cash on hand, cash from operations~~ and, if the allowed ~~claims~~ Edwards claims exceed $55 million, from contributions by Anschutz and Oaktree's Principal Activities Group. The timing of payment on these claims will depend upon the resolution of these claims. See also Note 7—"Contingencies" to the accompanying unaudited condensed consolidated financial statements.

Recent Accounting Pronouncements

InEffective ~~June~~December ~~2001~~27, 2002, the ~~Financial~~Company ~~Accounting~~adopted ~~Standards Board ("FASB") issued Statement of Financial Accounting Standards ("~~SFAS") No. ~~141~~143, "~~Business Combinations,"~~Accounting ~~and~~for ~~SFAS~~Asset ~~No. 142,~~Retirement ~~"Goodwill and Other Intangible Assets~~Obligations." SFAS No. ~~141~~143 ~~supersedes~~establishes accounting ~~Accounting~~standards ~~Principles~~for ~~Board~~recognition ~~Opinion~~and ~~No. 16~~measurement ~~(APB~~of ~~16),~~the ~~"Business~~fair ~~Combinations,"~~value ~~and primarily~~of ~~addresses~~obligations ~~the~~associated ~~accounting~~with ~~for~~ the ~~cost~~retirement of anlong-lived ~~acquired~~assets ~~business~~when ~~(i.e.,~~there ~~the~~is ~~purchase~~a ~~price~~legal ~~allocation),~~obligation ~~including any subsequent adjustment~~ to ~~its~~incur ~~cost~~such costs. Under SFAS No. ~~142~~143, ~~primarily addresses~~ the ~~accounting~~costs ~~for~~of ~~goodwill~~retiring ~~and~~an ~~intangible~~ asset ~~subsequent~~will tobe ~~their~~recorded ~~acquisition~~as ~~(i.e.,~~a ~~the~~liability ~~post-acquisition~~when ~~accounting)~~the ~~and~~retirement ~~supersedes~~obligation ~~APB~~arises ~~17,~~and ~~"Intangible~~will ~~Assets."~~be ~~The~~amortized ~~most significant changes made by SFAS No. 141 involve the requirement~~ to ~~use~~expense ~~the~~over ~~purchase method of accounting for all business combinations, thereby eliminating use of~~ the ~~pooling-of-interests~~ ~~method~~ ~~along~~life ~~with the establishment~~ of ~~new criteria for determining whether~~ the ~~Company should recognize intangible assets acquired in a business combination separately from goodwill~~asset. ~~SFAS No. 141 is effective for all business combinations initiated after June 30, 2001.~~ The adoption of SFAS No. ~~141~~143 did not have a material impact on the Company's financial position or results of operations.

~~Under~~In ~~SFAS No.~~April ~~142~~2002, the ~~Company~~FASB ~~can~~issued noSFAS ~~longer amortize goodwill~~No. 145, ~~reorganizational~~"Rescission ~~value in excess~~ of ~~amounts~~FASB ~~allocated~~Statements ~~to identifiable assets or indefinite lived intangible assets~~No. 4, 44 and ~~will test for impairment at least annually at the reporting unit level. Additionally~~64, ~~the~~Amendment ~~amortization period~~ of ~~intangible~~FASB ~~assets~~Statement ~~with finite lives is no longer limited to 40 years. Other long-lived assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS~~ No. ~~121~~13, ~~"Accounting~~and ~~for~~Technical ~~the Impairment of Long-Lived Assets to be Disposed Of,~~Corrections." ~~and~~ SFAS No. ~~144,~~145 ~~"Accounting for the Impairment or Disposal of Long-Lived Assets~~updates," ~~issued~~clarifies inand ~~August 2001. SFAS~~simplifies ~~No. 142~~existing isaccounting ~~effective~~pronouncements ~~for~~including ~~fiscal~~the ~~years~~rescission ~~beginning~~of ~~after~~Statement ~~December 15~~4, ~~2001~~which ~~for~~required all ~~goodwill~~gains and ~~other~~losses ~~intangible~~from ~~assets,~~extinguishments ~~including~~of ~~excess~~debt ~~reorganization~~to ~~value, recognized in an~~be ~~entity's~~aggregated ~~statement~~and, ofif ~~financial~~material, ~~position~~classified atas ~~that~~an ~~date~~extraordinary item, ~~regardless~~net of ~~when~~related ~~those~~income ~~assets~~tax ~~were initially recognized~~effect. As ~~required~~a ~~by SFAS No. 142~~result, the ~~standard~~criteria ~~has~~in ~~not~~APB ~~been~~Opinion ~~retroactively~~No. 30 ~~applied~~will ~~to the~~now ~~results~~be ~~for~~used ~~the period prior~~ to ~~adoption.~~classify ~~Amortization~~those ~~relating~~gains ~~to goodwill was $2.6 million~~ and $7 losses.~~8 million~~ ~~for~~As ~~the~~a ~~quarter~~result ~~and~~of ~~three~~the ~~quarters ended September 27, 2001. The~~ Company's ~~goodwill~~adoption ~~transitional impairment test indicates that the fair value~~ of ~~its~~SFAS ~~reporting~~No. 145 ~~units~~on ~~exceed~~December 27, 2002, the ~~goodwill~~extraordinary ~~carrying~~gain ~~value~~from ~~and~~debt ~~therefore,~~extinguishment atduring ~~this~~fiscal ~~time,~~2002 ~~goodwill~~has isbeen ~~not~~reclassified ~~deemed~~ to beearnings ~~impaired.~~from ~~The~~continuing ~~Company will conduct its annual valuation in the fourth quarter of 2002~~operations.

InEffective ~~June~~December ~~2001~~27, 2002, the ~~FASB~~Company ~~issued~~adopted SFAS No. ~~143~~146, "Accounting for ~~Asset~~Costs ~~Retirement~~Associated ~~Obligations~~with Exit or Disposal Activities." SFAS No. ~~143~~146 ~~establishes~~addresses ~~accounting~~significant issues ~~standards~~relating ~~for~~to ~~recognition~~the ~~and~~recognition, measurement, ofand ~~the~~reporting ~~fair value~~ of ~~obligations~~costs associated with ~~the~~exit ~~retirement~~and ofdisposal ~~long-lived~~activities, ~~assets~~including ~~when~~restructuring ~~there~~activities, isand anullifies ~~legal~~the ~~obligation~~guidance toin ~~incur~~EITF ~~such~~Issue ~~costs. Under SFAS~~ No. ~~143,~~94-3 ~~the costs~~(EITF of94-3), ~~retiring~~"Liability anRecognition ~~asset~~for ~~will~~Certain beEmployee ~~recorded~~Termination asBenefits aand ~~liability~~Other ~~when~~Costs ~~the~~to ~~retirement~~Exit ~~obligation~~an ~~arises~~Activity ~~and~~(including ~~will~~Certain beCosts ~~amortized~~Incurred toin ~~expense~~a ~~over~~Restructuring.)" ~~the~~Retroactive ~~life~~ application of ~~the asset.~~ SFAS No. ~~143~~146 is ~~effective~~prohibited ~~for~~and, ~~fiscal years beginning after June 15~~accordingly, ~~2002.~~liabilities ~~The~~recognized ~~Company~~prior isto ~~evaluating~~ the ~~impact~~initial ofapplication ~~the adoption~~ of ~~this~~SFAS ~~standard~~No. 146 ~~and~~will ~~has~~continue ~~not~~to ~~yet~~be ~~determined~~accounted ~~the~~for ~~effect~~in ofaccordance ~~adoption~~with onEITF 94-3 ~~its~~or ~~financial~~other ~~position~~applicable ~~and results~~preexisting ~~of operations~~guidance.

In ~~August~~November ~~2001~~2002, the FASB issued ~~SFAS~~Interpretation No. ~~144~~45, "Guarantor's Accounting ~~for~~and ~~the~~Disclosure ~~Impairment~~Requirements orfor ~~Disposal of Long-Lived Assets~~Guarantees," ~~which~~Including ~~provides~~Indirect ~~clarifications~~Guarantees of ~~certain~~Indebtedness ~~implementation~~of ~~issues~~Others." ~~with~~This ~~SFAS~~interpretation ~~No. 121~~will ~~along~~significantly ~~with~~change ~~additional~~current ~~guidance~~practice onin the accounting for, ~~the~~and ~~impairment~~disclosure ~~or disposal~~ of, ~~long-lived assets~~guarantees. ~~SFAS~~Guarantees ~~No. 144~~meeting ~~supersedes~~the ~~SFAS No. 121~~characteristics ~~and~~described ~~applies~~in tothe ~~all~~interpretation are ~~long-lived~~required ~~assets~~to ~~(including~~be ~~discontinued~~initially ~~operations)~~recorded ~~and~~at ~~consequently~~fair ~~amends~~value, ~~APB~~which ~~30,~~is ~~"Reporting~~different ~~the~~from ~~Effects~~general ofcurrent ~~Disposal~~practice of arecognition ~~Segment~~ of a ~~Business."~~liability ~~SFAS No. 144~~only ~~develops~~when ~~one~~loss ~~accounting~~is ~~model~~probable ~~(based~~and onreasonably ~~the~~estimable, ~~model~~as prescribed in SFAS No. ~~121)~~5, "Accounting for ~~long-lived~~Contingencies." ~~assets~~The ~~that~~interpretation ~~are~~also requires a guarantor to bemake ~~disposed~~significant ofnew bydisclosures ~~sale,~~for asvirtually ~~well~~all asguarantees ~~addresses~~even if the ~~principal~~likelihood of the ~~implementation~~guarantor's ~~issues.~~having ~~SFAS~~to ~~No. 144~~make ~~requires~~payments ~~that~~under ~~entities~~the ~~measure~~guarantee ~~long-lived~~is ~~assets~~remote. ~~that~~The ~~are~~disclosure torequirements bein ~~disposed~~this ofinterpretation bywere ~~sale~~effective atfor ~~the~~financial ~~lower~~statements of ~~book~~interim ~~value~~ or ~~fair~~annual ~~value~~periods ~~less~~ending ~~cost~~after December 15, ~~to sell~~2002. ~~That~~ ~~requirement~~The ~~eliminates~~initial ~~APB~~recognition ~~30's~~and ~~requirement~~initial ~~that~~measurement ~~discontinued~~provisions ~~operations~~of bethis ~~measured~~interpretation atare ~~net~~applicable ~~realizable~~on ~~value~~a orprospective ~~that~~basis ~~entities~~to ~~include~~guarantees ~~under~~issued ~~"discontinued~~or ~~operations"~~modified inafter December 31, 2002, irrespective of the ~~financial~~guarantor's ~~statements amounts~~fiscal ~~for~~year-end. ~~operating~~The ~~losses~~adoption ~~that~~of ~~have~~this interpretation did not have a material impact on the Company's financial position or results of operations.

32 In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities—an Interpretation of ARB No. 51." This interpretation addresses consolidation by business enterprises of entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Variable interest entities are required to be consolidated by their primary beneficiaries if they do not effectively disperse risks among parties involved. The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity's expected losses or receives a majority of its expected residual returns. The consolidation requirements of this interpretation apply immediately to variable interest entities created after January 31, 2003 and apply to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain new disclosure requirements apply to all financial statements issued after January 31, 2003. The adoption of this interpretation did not have a material impact on the Company's financial position or results of operations.

In ~~yet~~November of ~~occurred. Additionally~~2002, ~~SFAS~~the EITF reached a consensus on Issue No. ~~144~~02-16, ~~expands~~"Accounting by a Customer (Including a Reseller) for Certain Consideration Received from a Vendor" ("EITF 02-16"). EITF 02-16 addresses the ~~scope~~accounting for cash consideration given to a reseller of ~~discontinued~~a ~~operations~~vendor's products from a vendor. EITF 02-16 indicates that cash consideration received by a customer from a vendor is presumed to ~~include~~be ~~all~~a ~~components~~reduction in the price of anthe ~~entity~~vendor's ~~with~~products ~~operations~~or services and should, therefore, be characterized as a reduction of cost of sales when recognized in the customer's income statement. The EITF indicated that such presumption is overcome when the consideration is either (1a) a reimbursement of costs incurred by the ~~entity~~customer ~~can~~to ~~distinguish~~sell ~~from~~the vendor's products, in which case the ~~rest~~ cash consideration should be characterized as a reduction of that cost when recognized in the ~~entity~~customer's ~~and~~income statement, or (2b) a payment for assets or services delivered to the ~~entity~~vendor, ~~will~~in ~~eliminate~~which ~~from~~case the ~~ongoing~~cash ~~operations~~consideration should be characterized as revenue when recognized in the customer's income statement. The EITF also reached a consensus that a rebate or refund of a specified amount of cash consideration that is payable only if the ~~entity~~customer completes a specified cumulative level of purchases or remains a customer for a specified time period should be recognized as a reduction of the cost of sales based on a systematic and rational allocation of the cash consideration offered to each of the underlying transactions that results in progress by the customer toward earning the rebate or refund, provided the amounts are reasonably estimable. On December 27, 2002, the Company adopted EITF 02-16, effective with arrangements entered into or after November 21, 2002. Such adoption did not have a ~~disposal~~material ~~transaction~~impact on the Company's financial position or results of operations.

~~The~~In ~~Company~~May 2003, ~~adopted~~the FASB issued SFAS No. ~~144~~150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity to be classified as liabilities. Many of these instruments previously were classified as equity or temporary equity and as such, SFAS No. 150 represents a significant change in practice in the ~~first~~accounting ~~quarter~~for a number of ~~2002~~mandatorily redeemable equity instruments and certain equity derivatives that frequently are used in connection with share repurchase programs. SFAS No. 150 is effective for all financial instruments created or modified after May 31, 2003, and to other instruments at the beginning of the first interim period beginning after June 15, 2003. The Company does not expect the adoption of SFAS No. ~~144~~150 ~~did~~will ~~not~~ have a material impact on ~~the~~our ~~Company's~~ financial position, ~~and~~cash flows or results of operations.

In April 2002, the FASB issued SFAS No. 145, "Recession of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 updates, clarifies and simplifies existing accounting pronouncements including the rescission of Statement 4, which required all gains and losses from extinguishments of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in APB Opinion No. 30 will now be used to classify those gains and losses. The provisions of SFAS No. 145 related to the rescission of Statement 4 is effective for fiscal years beginning after May 15, 2002.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs Associated with Exit or Disposal Activities." SFAS No. 146 addresses significant issues relating to the recognition, measurement, and reporting of costs associated with exit and disposal activities, including restructuring activities, and nullifies the guidance in Emerging Issues Task Force (EITF) Issue No. 94-3 (EITF 94-3), "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring.)" The provisions of SFAS No. 146 are effective for exit or disposal activities initiated after December 31, 2002. Retroactive application of SFAS No. 146 is prohibited and, accordingly, liabilities recognized prior to the initial application of SFAS No. 146 should continue to be accounted for in accordance with EITF 94-3 or other applicable preexisting guidance.

In July 2001, the American Institute of Certified Public Accountants issued Emerging Issues Task Force Topic No. D-98, which requires that equity securities, with redemption features that are not solely within the control of the issuer, be classified outside permanent equity. This guidance was effective for the Company's fourth quarter of 2001 and is to be applied retroactively. The adoption of this guidance did not have a material impact on the Company's financial position or results of operations.

Seasonality

The Company's revenues are usually seasonal, coinciding with the timing of releases of motion pictures by the major distributors. Generally, studios release the most marketable motion pictures during the summer and the holiday seasons. The unexpected emergence of a "hit" film during other periods can alter the traditional pattern. The timing of movie releases can have a significant effect on the Company's results of operations, and the results of one quarter are not necessarily indicative of the results for the next or any other quarter. The seasonality of motion picture exhibition, however, has become less pronounced in recent years as studios have begun to release major motion pictures somewhat more evenly throughout the year.

Inflation

The Company does not believe that inflation has had a material impact on its financial position or results of operations.

Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's market risk is confined to interest rate exposure of its debt obligations that bear interest based on floating rates. The Company's amended and restated senior credit facilities provide for variable rate interest that could be adversely affected by an increase in interest rates. As of ~~September~~June 26, ~~2002~~2003, the Company had term borrowings of $525.9 million under its amended and restated senior credit facilities. Borrowings under these facilities will bear interest, at the Company's option, at either a base rate (which will be the higher of the prime rate of British Banking Association's or the federal funds rate plus 0.5%) or the Eurodollar rate plus, in each case, an applicable margin. The applicable margin can range from 1.50% to 3.25% for the revolving credit facility and 1.50% to 2.75% for the term loan facilities. At June 26, 2003, the borrowings outstanding under the Company's term credit facilities bore interest ranging from approximately 3.8125% to 4.0625%. A one-half percent rise in the interest rate on the Company's variable rate indebtedness held at June 26, 2003, would have increased reported interest expense by approximately $657,400 for the quarter ended June 26, 2003.

Company had term borrowings of $225.0 million under its senior credit facilities. Borrowings under these facilities bore interest, at the Company's option, at either a base rate (which will be the higher of prime rate of Bankers Trust Company or federal funds rate plus 0.5%) or the Eurodollar Rate plus, in each case, an applicable margin. The applicable margin can range from 1.50% to 3.25% for the revolving credit facility and 1.50% to 2.75% for the term loan facility. At September 26, 2002, the borrowings outstanding under the Company's term credit facilities bore interest at approximately 4.6% per year. A one-half percent rise in the interest rate on the Company's variable rate indebtedness held at September 26, 2002, would have increased reported interest expense by approximately $281,000 for the quarter ended September 26, 2002 and approximately $750,000 for the three quarters ended September 26, 2002.

Item 4.
CONTROLS AND PROCEDURES

~~Within~~We ~~the~~maintain ~~90 days~~disclosure ~~prior~~controls and procedures that are designed to ~~the~~ensure ~~date~~that ofinformation ~~this~~required ~~report,~~to webe ~~carried~~disclosed ~~out~~by anus ~~evaluation,~~in ~~under~~the reports that we file or submit to the ~~supervision~~Securities and ~~with~~Exchange ~~the~~Commission ~~participation~~under ofthe ~~our~~Securities ~~management, including~~Exchange ~~our~~Act ~~Chief~~of ~~Executive~~1934, ~~Officer~~as ~~and~~amended, ~~Chief~~is ~~Financial~~recorded, ~~Officer~~processed, ofsummarized ~~the~~and ~~effectiveness~~reported ofwithin the ~~design~~time ~~and~~periods ~~operation~~specified ofby the ~~Company~~Commission's rules ~~disclosure~~and ~~controls~~forms, and ~~procedures~~that ~~pursuant~~information tois ~~Exchange~~accumulated ~~Act Rule 13a-14.~~and ~~Based~~communicated ~~upon~~to ~~that~~our ~~evaluation~~management, including our ~~Chief~~principal ~~Executive~~executive ~~Officer~~ and ~~Chief~~principal ~~Financial~~financial ~~Officer~~officers ~~concluded~~(whom ~~that~~we ~~the~~refer ~~Company's~~to ~~disclosure~~in ~~controls~~this ~~and~~periodic ~~procedures~~report ~~are~~as our ~~effective~~Certifying ~~in timely~~Officers), ~~alerting~~as ~~them~~appropriate to ~~material~~allow ~~information~~timely ~~required~~decisions toregarding berequired ~~included~~disclosure. inOur ~~the~~management ~~Company's~~evaluated, ~~periodic~~with ~~Securities~~the ~~and~~participation ~~Exchange~~of ~~Commission~~our ~~filings~~Certifying ~~relating~~Officers, to the ~~Company~~effectiveness ~~(including~~of ~~its consolidated~~our ~~subsidiaries).~~disclosure ~~There~~controls ~~were~~and noprocedures ~~significant~~as ~~changes~~of inJune 26, ~~the~~2003, ~~Company's~~pursuant ~~internal~~to ~~controls~~Rule 13a-15(b) under orthe inExchange ~~other~~Act. ~~factors~~Based upon that ~~could~~evaluation, ~~significantly~~our ~~affect~~Certifying ~~these~~Officers concluded ~~internal~~that, ~~controls~~as ~~subsequent~~of toJune 26, ~~the~~2003, ~~date~~our ofdisclosure ~~our~~controls ~~most recent~~and ~~evaluation~~procedures were effective.

34 There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 6.
EXHIBITS AND REPORTS ON FORM 8-K

Exhibit Number		Exhibit Description
10.1		Amended and Restated Credit Agreement, dated as of August 12, 2002, among Regal Cinemas Corporation, as Brorrower, Regal Cinemas, Inc., as Borrower, the several lenders from time to time parties thereto, Lehman Brothers Inc. and Credit Suisse First Boston, as Joint Advisors, Joint Lead Arrangers and Joint Book Managers, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent and Lehman Commercial Paper Inc., as Administrative Agent (filed as Exhibit 10.1 to Regal Cinemas Corporation's Form 10-Q for the fiscal quarter ended June 27, 2002 (Commission File No. 333-87930) and incorporated herein by reference)

(a) Exhibits:

On August 26, 2002, the Company filed a current report on Form 8-K under "Item 9. Regulation FD Disclosure."

Exhibit No.		Exhibit Description
3.1		Amended and Restated Bylaws of Regal Cinemas
4.1		First Amendment to Amended and Restated Credit Agreement, dated as of May 21, 2003, among Regal Cinemas, RCI, the Lenders party thereto, and Lehman Commercial Paper Inc., as administrative agent for the Lenders (incorporated by reference to exhibit 4.1 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended June 26, 2003)
4.2		Second Amended and Restated Credit Agreement, dated as of June 6, 2003, among Regal Cinemas, RCI, the several banks and other financial institutions or entities from time to time parties thereto, Lehman Brothers Inc. and Credit Suisse First Boston, as joint advisors, joint lead arrangers and joint book managers of the Revolving Credit Facility and the Tranche C Term Loan Facility, Credit Suisse First Boston, as sole advisor, sole lead arranger and sole book manager of the Tranche D Term Loan Facility, Credit Suisse First Boston, as syndication agent, General Electric Capital Corporation, as documentation agent, and Lehman Commercial Paper Inc., as administrative agent (incorporated by reference to exhibit 4.2 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended June 26, 2003)
4.3		Fourth Supplemental Indenture, dated as of March 27, 2003, among Regal Cinemas, Interstate Theatres Corporation, Frederick Plaza Cinema, Inc. and U.S. Bank National Association (incorporated by reference to exhibit 4.1 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended March 27, 2003)
4.4		Fifth Supplemental Indenture, dated as of June 6, 2003, among CineMedia Software, Inc., a Delaware corporation, UATG, Regal Cinemas and U.S. Bank National Association, as trustee under the Indenture referred to therein (incorporated by reference to exhibit 4.3 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended June 26, 2003)
4.5		Form of Regal Cinemas 9³/8% Senior Subordinated Notes due 2012 (incorporated by reference to Exhibit A to exhibit 4.6 to REG's registration statement on Form S-1 (Commission File No. 333-84096) filed March 11, 2002)
10.1		Stock Purchase Agreement, dated as of June 6, 2003, between REH and RCI
10.2		Stock Purchase Agreement, dated as of March 27, 2003, between REG and RCI
31.1		Rule 13a-14(a) Certification of Chief Executive Officer of Regal Cinemas
31.2		Rule 13a-14(a) Certification of Chief Financial Officer of Regal Cinemas

35(b) Current Reports on Form 8-K filed during our second fiscal quarter of 2003:

•: Current Report on Form 8-K furnished under Items 7 (Financial Statements and Exhibits) and 9 (Regulation FD Disclosure) on May 27, 2003

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.

	REGAL CINEMAS CORPORATION
Date: November 12, 2002	By:		/s/ MICHAEL L. CAMPBELL Michael L. Campbell Chief Executive Officer
Date: August 11, 2003	By:	/s/ MICHAEL L. CAMPBELL Michael L. Campbell Chief Executive Officer
Date: November 12, 2002	By:		/s/ AMY E. MILES Amy E. Miles Executive Vice President and Chief Financial Officer
Date: August 11, 2003	By:	/s/ AMY E. MILES Amy E. Miles Executive Vice President and Chief Financial Officer (Principal Financial Officer)

36 REGAL CINEMAS CORPORATION Exhibit Index

CERTIFICATIONS

Exhibit No.		Exhibit Description
3.1		Amended and Restated Bylaws of Regal Cinemas
4.1		First Amendment to Amended and Restated Credit Agreement, dated as of May 21, 2003, among Regal Cinemas, RCI, the Lenders party thereto, and Lehman Commercial Paper Inc., as administrative agent for the Lenders (incorporated by reference to exhibit 4.1 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended June 26, 2003)
4.2		Second Amended and Restated Credit Agreement, dated as of June 6, 2003, among Regal Cinemas, RCI, the several banks and other financial institutions or entities from time to time parties thereto, Lehman Brothers Inc. and Credit Suisse First Boston, as joint advisors, joint lead arrangers and joint book managers of the Revolving Credit Facility and the Tranche C Term Loan Facility, Credit Suisse First Boston, as sole advisor, sole lead arranger and sole book manager of the Tranche D Term Loan Facility, Credit Suisse First Boston, as syndication agent, General Electric Capital Corporation, as documentation agent, and Lehman Commercial Paper Inc., as administrative agent (incorporated by reference to exhibit 4.2 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended June 26, 2003)
4.3		Fourth Supplemental Indenture, dated as of March 27, 2003, among Regal Cinemas, Interstate Theatres Corporation, Frederick Plaza Cinema, Inc. and U.S. Bank National Association (incorporated by reference to exhibit 4.1 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended March 27, 2003)
4.4		Fifth Supplemental Indenture, dated as of June 6, 2003, among CineMedia Software, Inc., a Delaware corporation, UATG, Regal Cinemas and U.S. Bank National Association, as trustee under the Indenture referred to therein (incorporated by reference to exhibit 4.3 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended June 26, 2003)
4.5		Form of Regal Cinemas 9³/8% Senior Subordinated Notes due 2012 (incorporated by reference to Exhibit A to exhibit 4.6 to REG's registration statement on Form S-1 (Commission File No. 333-84096) filed March 11, 2002)
10.1		Stock Purchase Agreement, dated as of June 6, 2003, between REH and RCI
10.2		Stock Purchase Agreement, dated as of March 27, 2003, between REG and RCI
31.1		Rule 13a-14(a) Certification of Chief Executive Officer of Regal Cinemas
31.2		Rule 13a-14(a) Certification of Chief Financial Officer of Regal Cinemas

I, Michael L. Campbell, Chief Executive Officer of Regal Cinemas Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Regal Cinemas Corporation;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 12, 2002 /s/ MICHAEL L. CAMPBELL Michael L. Campbell Chief Executive Officer

CERTIFICATIONS

I, Amy E. Miles, Chief Financial Officer and Executive Vice President of Regal Cinemas Corporation, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Regal Cinemas Corporation;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

Date: November 12, 2002 /s/ AMY E. MILES Amy E. Miles Chief Financial Officer and Executive Vice President

REGAL CINEMAS CORPORATION Exhibit Index LISTS OF EXHIBITS FILED WITH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 26, 2002

Exhibit Number		Exhibit Description
10.1		Amended and Restated Credit Agreement, dated as of August 12, 2002, among Regal Cinemas Corporation, as Borrower, Regal Cinemas, Inc., as Borrower, the several lenders from time to time parties thereto, Lehman Brothers Inc. and Credit Suisse First Boston, as Joint Advisors, Joint Lead Arrangers and Joint Book Managers, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent and Lehman Commercial Paper Inc., as Administrative Agent (filed as Exhibit 10.1 to Regal Cinemas Corporation's Form 10-Q for the fiscal quarter ended June 27, 2002 (Commission File No. 333-87930) and incorporated herein by reference)

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