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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 ~~June~~September 2625, 2003

Commission file number: 333-87930

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

Delaware (State or Other Jurisdiction of Incorporation or Organization)		02-0624987 (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

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 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 No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act): Yes o No ý

Common Stock—7,500,000 shares outstanding at ~~August~~November 1110, 2003

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION
Item 1.		FINANCIAL STATEMENTS
		UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
		UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Item 2.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Item 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 4.		CONTROLS AND PROCEDURES
PART II—OTHER INFORMATION
Item 1.		LEGAL PROCEEDINGS
Item 6.		EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES
CERTIFICATIONS

PART I—FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

REGAL CINEMAS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except share data)

			June 26, 2003			December 26, 2002 (Note 3)
			September 25, 2003			December 26, 2002 (Note 3)
ASSETS
Current assets:
	Cash and equivalents		$	138.2		$	178.7
	Cash and cash equivalents		$	140.1		$	178.7
	Restricted cash			6.7			22.5
	Trade and other receivables			1722.49			27.1
	Inventories			65.1			5.0
	Prepaid and other current assets			3430.68			22.1
	Assets held for sale			7.94			9.3
	Deferred tax asset			1110.67			8.1
		Total current assets		~~222~~223.57			272.8
Property and equipment:
	Land			115.91			115.1
	Buildings and leasehold improvements			1,~~157~~161.65			1,025.8
	Equipment			~~608~~634.50			497.8
	Construction in progress			12.28			3.9
		Total property and equipment		1,~~894~~923.24			1,642.6
	Accumulated depreciation and amortization			(~~190~~224.56	)		(127.7	)
		Total property and equipment, net		1,~~703~~698.78			1,514.9
Goodwill and other intangible assets				117.5			115.5
Deferred tax asset				8672.29			57.2
Other assets				7764.37			46.4
		Total assets	$	2,~~207~~177.26		$	2,006.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current maturities of long-term obligations		$	30.56		$	16.5
	Accounts payable			~~151~~113.45			115.8
	Accrued expenses			~~173~~162.98			94.0
	Bankruptcy related liabilities and claims			43.06			23.6
		Total current liabilities		~~359~~310.85			249.9
Long-term debt, less current maturities				~~852~~848.43			558.0
Capital leases, less current maturities				22.75			1.4
Lease financing arrangements				9594.05			96.0
Other liabilities				5054.71			44.0
		Total liabilities		1,~~380~~329.69			949.3
Shareholder's equity:
	Preferred stock, $.001 par value; 5,000,000 shares authorized; none issued and outstanding at June 26, 2003 and December 26, 2002			—			—
	Preferred stock, $.001 par value; 5,000,000 shares authorized; none issued and outstanding September 25, 2003 and December 26, 2002			—			—
	Common stock, $.001 par value; 25,000,000 shares authorized; 7,500,000 issued and outstanding at June 26, 2003 and December 26, 2002			—			—
	Common stock, $.001 par value; 25,000,000 shares authorized; 7,500,000 issued and outstanding at September 25, 2003 and December 26, 2002			—			—
	Additional paid-in capital			~~651~~652.78			959.5
	Retained earnings			~~174~~194.9			98.0
		Total shareholder's equity		~~826~~847.67			1,057.5
		Total liabilities and shareholder's equity	$	2,~~207~~177.26		$	2,006.8

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
			Reorganized Company Thirteen weeks ended September 25, 2003			Reorganized Company Thirteen weeks ended September 26, 2002 (Note 3)			Reorganized Company Thirty-nine weeks ended September 25, 2003			Reorganized Company Thirty-five weeks ended September 26, 2002 (Note 3)			Predecessor Company Four weeks ended January 24, 2002
Revenues:
	Admissions		$	~~377~~366.75		$	~~342~~323.27		$	~~685~~1,051.27		$	~~540~~864.85		$	75.1
	Concessions			~~147~~137.28			~~142~~131.87			~~263~~401.75			~~221~~353.96			29.5
	Other operating revenues			3542.03			2022.01			62105.81			2850.78			3.7
		Total revenue		~~559~~546.96			~~505~~477.05			1,~~011~~558.73			~~791~~1,268.49			108.3
Operating expenses:
	Film rental and advertising costs			~~215~~195.14			~~194~~173.45			~~374~~569.04			~~294~~468.94			38.1
	Cost of concessions			20.41			2018.6			3656.89			3250.28			4.3
	Rent expense			5051.41			43.48			93144.56			69113.97			10.6
	Other operating expenses			~~135~~140.18			~~112~~120.40			~~254~~395.42			~~186~~306.6			24.0
	General and administrative expenses			1415.96			1615.63			2843.39			2641.14			2.6
	Merger and restructuring expenses and amortization of deferred stock compensation			1.30			32.75			23.6			1012.38			—
	Depreciation and amortization			3436.90			3032.21			66102.3			4981.23			6.4
	Loss (gain) on disposal and impairment of operating assets			(0.68	)		(0.12	)		(01.86	)		(0.64	)		0.6
		Total operating expenses		~~472~~459.72			~~421~~406.20			~~855.~~1,314.3			~~668~~1,074.6			86.6
Operating income				87.24			8371.85			~~156~~244.60			~~122~~194.83			21.7
Other income (expense):
Interest expense				(1518.69	)		(15.20	)		(2948.87	)		(2439.9	)		(8.5	)
Interest and other income				0.3			0.2			0.8			0.3			—
Interest and other income (expense)				0.4			(0.1	)		1.2			—			—
Gain (loss) on extinguishment of debt				—			(1.3	)		—			(0.2	)		661.9
Gain on extinguishment of debt				—			—			—			—			661.9
Income before reorganization items and income taxes				7168.9			6756.54			~~127~~196.65			98154.04			675.1
Reorganization items				—			—			—			—			(254.3	)
Income before income taxes				7168.9			6756.54			~~127~~196.65			98154.04			420.8
Provision for income taxes				2827.96			2822.5			5078.73			4062.16			—
Net income			$	4341.03		$	3933.09		$	76118.92		$	5791.98		$	420.8

See accompanying notes to unaudited condensed consolidated financial statements

REGAL CINEMAS CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(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
				Reorganized Company Thirty-nine weeks ended September 25, 2003			Reorganized Company Thirty-five weeks ended September 26, 2002 (Note 3)			Predecessor Company Four weeks ended January 24, 2002
Cash flows from operating activities:
Net income				$	76118.92		$	5791.98		$	420.8
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			66102.3			4981.23			6.4
		Provision for deferred income taxes			04.51			3249.5			—
		Amortization of deferred stock compensation			12.30			0.37			—
		Cancellation of shareholder loans			—			—			3.1
		Loss (gain) on disposal and impairment of operating assets			(01.86	)		(0.64	)		0.6
		Loss (gain) on extinguishment of debt			—			0.3			(661.9	)
		Gain on extinguishment of debt			—			—			(661.9	)
		Reorganization items			—			—			254.3
	Changes in operating assets and liabilities:
		Accounts receivable			0(4.69	)		(5.4.8	)		2.6
		Inventories			(0.56	)		(0.32	)		—
		Prepaid expenses and other assets			(3821.61	)		(73.49	)		(1.8	)
		Accounts payable			26(11.09	)		1311.79			7.1
		Accrued expenses and other liabilities			7679.0			1311.41			(81.0	)
			Net cash provided by (used in) operating activities		~~207~~266.7			~~153~~237.64			(49.8	)
Cash flows from investing activities:
	Capital expenditures				(6195.40	)		(2559.61	)		(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				813.80			15.81			—
	Decrease in restricted cash and other				24.9			1413.1			0.4
			Net cash used in investing activities		(~~526~~556.82	)		(940.79	)		(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				(45.36	)		(610.29	)		(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				(2021.82	)		(7286.08	)		—
	Payments on long-term obligations				(1116.30	)		—(43.1	)		—
	Cash used to pay dividend to parent				(21.3	)		—			—
	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
			Net cash provided by (used in) financing activities		250.9			(244.5	)		1.7
Cash used in reorganization					—			—			(21.3	)
	Net increase (decrease) in cash equivalents				(40.5	)		(38.9	)		(71.0	)
	Net decrease in cash equivalents				(38.6	)		(48.0	)		(71.0	)
	Cash and cash equivalents, beginning of period				178.7			166.7			237.7
			Cash and cash equivalents, end of period	$	~~138~~140.21		$	~~127~~118.87		$	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		$	—

See accompanying notes to unaudited condensed consolidated financial statements.

REGAL CINEMAS CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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. ("RCI") and its subsidiaries, which include Edwards Theatres, Inc. ("Edwards"), Regal CineMedia Corporation ("RCM"), Hoyts Cinemas Corporation ("Hoyts") and United Artists Theatre Group ("UATG"), operate multi-screen motion picture theatres throughout the United States. As of ~~June~~September 2625, 2003, the Company operated 5,~~101~~084 screens in ~~430~~428 theatres in 37 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 (such as Fiscal 2003) 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 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 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 unpaid interest was discharged under the terms of the Plan in exchange for total payments of approximately $575.3 million. 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.

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 twenty-two week period ended June 27, 2002 (post-reorganization), which includes the results of operations of Edwards and the assets of UATG from January 24, 2002 and of RCM from February 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." In connection with the acquisition of Hoyts and UATG, the accompanying financial statements presented herein reflect the results of operations of Hoyts for all periods subsequent to the acquisition date of March 28, 2003 and 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. 6

~~The Company has prepared the unaudited condensed consolidated balance sheet as~~ of ~~June 26, 2003 and the unaudited condensed consolidated statements of operations and cash flows 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. AccordinglyUATG, ~~certain information~~ and ~~footnote~~includes ~~disclosures~~Hoyts ~~typically~~as ~~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 26, 2002 information is derived from the audited consolidated financial statements included in Regal Cinemas' Annual Report on Form 10-K filed on March 2628, 2003 ~~with the Securities and Exchange Commission (File No. 333-87930) for the Company's fiscal year ended December 26~~, ~~2002.~~ ~~Users should read~~ the ~~unaudited~~date ~~condensed~~at ~~consolidated~~which ~~financial~~REG ~~statements~~initially ~~included~~held ~~herein~~common incontrol ~~conjunction with the consolidated financial statements and notes thereto included~~ in ~~the~~both ~~Company's audited~~RCI ~~consolidated financial statements. The results of operations for the thirteen weeks~~ and ~~twenty-six weeks ended June 26, 2003 are not necessarily indicative of the operating results that may be achieved for the full 2003 fiscal year~~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 thirty-five week period ended September 26, 2002 (post-reorganization), which includes the results of operations of Edwards and the assets of UATG from January 24, 2002 and of RCM from February 21, 2002, the deemed dates at which Anschutz initially held common control in RCI, Edwards, RCM and the assets of UATG. 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." The Company's 2003 financial statements include information reflecting the results of operations of Hoyts for all periods subsequent to its acquisition by the Company on March 28, 2003.

The Company has prepared the unaudited condensed consolidated balance sheet as of September 25, 2003 and the unaudited condensed consolidated statements of operations and cash flows 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 26, 2002 information is derived from the audited consolidated financial statements included in Regal Cinemas' Annual Report on Form 10-K filed on March 26, 2003 with the Securities and Exchange Commission (File No. 333-87930) for the Company's fiscal year ended December 26, 2002. Users should read the unaudited condensed consolidated financial statements included herein in conjunction with the consolidated financial statements and notes thereto included in the Company's audited consolidated financial statements. The results of operations for the thirteen weeks and thirty-nine weeks ended September 25, 2003 are not necessarily indicative of the operating results that may be achieved for the full 2003 fiscal year.

Net income and total comprehensive income are the same for all periods presented.

Certain reclassifications have been made to the 2002 financial statements to conform to the 2003 presentation.

2. FORMATION OF REGAL ENTERTAINMENT GROUP

Exchange Transaction

The Company became a wholly owned subsidiary of REG on April 12, 2002 in conjunction with an exchange transaction in which REG, through its wholly owned subsidiary Regal Entertainment Holdings, Inc. ("REH"), also acquired Edwards, United Artists Theatre Company (including its subsidiary United Artists Theatre Circuit, Inc. ("UATC")) and RCM. REG is controlled by Anschutz, which controlled each of us, Edwards, United Artists Theatre Company and RCM prior to REG's acquisition of us and them in the exchange transaction. Following the exchange transaction, RCI acquired Edwards, RCM, Hoyts and UATG from REH in a series of transactions discussed in Note 3—"Acquisitions" below.

Initial Public Offering of REG

In May 2002, REG issued 18.0 million shares of its Class A common stock in an initial public offering at a price of $19.00 per share, receiving aggregate net offering proceeds, net of underwriting discounts, commissions and other offering expenses, of $314.8 million.

3. ACQUISITIONS

Acquisition of United Artists Theatre Group

On June 6, 2003, RCI acquired all of the outstanding capital stock of UATG from REH for an estimated cash purchase price of approximately $311.4 million. The assets of UATG consist of 438 screens in 46 leased theatres, certain fee properties and certain other assets under construction. The formation and capitalization of UATG was effected through a series of transactions among REH, UATG, UATC and United Artists Properties I Corp. ("Prop I"). The assets used to capitalize UATG were deemed to be under the control of Anschutz, through Anschutz's ownership of United Artists Theatre Company (the parent of UATC and Prop I), from March 2, 2001, the date that these companies emerged from bankruptcy. The Company entered into an additional $315.0 million term loan under the amended and restated Regal Cinemas senior credit facility to fund the purchase price of UATG. See Note 4—"Long-Term Obligations" for further description of the amended and restated Regal 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 ($56.3 million), other assets ($1.6 million), current liabilities ($6.8 million), other liabilities ($3.6 million) and excess purchase price recorded in additional paid-in capital ($58.8 million).

Acquisition of Hoyts Cinemas Corporation

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. The purchase price included cash of approximately $188.1 million and the assumption of certain capital lease and other obligations with an aggregate 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.

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. 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 2003 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.

The following is a preliminary summary of the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in millions): current assets ($1.1 million), buildings, leasehold improvements and equipment ($200.2 million), goodwill ($0.9 million), deferred income tax asset ($33.0 million), other assets ($0.2 million), current liabilities ($22.0 million), and other liabilities ($0.3 million). 8

The following is a summary of the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: current assets ($1.1 million), buildings, leasehold improvements and equipment ($200.2 million), goodwill ($0.9 million), deferred income tax asset ($33.0 million), other assets ($0.2 million), current liabilities ($22.0 million), and other liabilities ($0.3 million).

The following unaudited pro forma results of operations for all periods presented assume the Hoyts acquisition occurred as of the beginning of the respective periods. The pro forma results have been prepared for comparative purposes only and do not purport to indicate the results of operations which would actually have occurred had the combination been in effect on the date indicated, or which may occur in the future. Pro forma results for the quarter ended September 25, 2003 are not presented below because the Hoyts results are included in the September 25, 2003 statement of operations for the entire quarterly period.

	Thirteen weeks ended September 26, 2002 (Reorganized Company)		Thirty-nine weeks ended September 25, 2003 (Reorganized Company)		Thirty-five weeks ended September 26, 2002 (Reorganized Company)		Four weeks ended January 24, 2002 (Predecessor Company)
	(In millions)
Revenues	$	526.3	$	1,602.7	$	1,401.5	$	123.5
Operating income		79.6		250.0		215.0		24.1
Net income		38.4		121.4		103.3		422.1

Acquisition of Regal CineMedia Corporation

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. Following the acquisition, RCM became a majority-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 RCM, the transaction was accounted for as a contribution of RCM to RCI by REH, at REG's historical cost basis of RCM, in a manner similar to a pooling of interests. Accordingly, the accompanying financial statements presented herein reflect the results of operations of RCM from February 21, 2002, the deemed date at which Anschutz initially held common control in both RCI and RCM.

Acquisition of Edwards Theatres, Inc.

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.

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. 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.

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.

The amounts recorded based on the acquisition of Edwards by the Company were current assets ($80.4 million), property and equipment ($293.0 million), other assets ($61.7 million), debt obligations ($190.3 million), other liabilities ($113.5 million) and redeemable preferred stock ($47.1 million).

4. LONG-TERM OBLIGATIONS

Long-term obligations at ~~June~~September 2625, 2003 and December 26, 2002 consist of the following (in millions):

		June 26, 2003			December 26, 2002
		September 25, 2003			December 26, 2002
Regal Cinemas Senior Credit Facility		$	~~525~~523.91		$	219.4
Regal Cinemas 93/8% Senior Subordinated Notes			350.0			350.0
Lease financing arrangements, 11.5%, maturing in various installments through 2021			9796.05			97.8
Capital lease obligations			23.64			1.5
Other			42.19			3.2
Total long-term obligations			~~1,000~~995.69			671.9
Less current maturities			(30.56	)		(16.5	)
	Total long-term obligations, net	$	~~970~~965.13		$	655.4

Amended and Restated Regal Cinemas Senior Credit Facility—InOn ~~connection with the acquisition of UATG described more fully in Note~~August ~~3—"Acquisitions~~27," 2003, Regal Cinemas entered into ana ~~additional~~new term loan facility ("New Term Loan D") under the third amended and restated ~~Regal~~credit ~~Cinemas~~agreement ~~senior~~of ~~credit facility~~Regal Cinemas (a copy of which is incorporated by reference herein as ~~exhibit~~Exhibit 4.21 ~~hereto~~to Regal Entertainment Group's Form 10-Q for the fiscal quarter ended September 25, 2003) for approximately $~~315~~523.01 million to refinance, at a more favorable interest rate, the aggregate outstanding principal amount under the former Term Loan C and Term Loan D facilities. The amortization schedule under the New Term Loan D is equal to the sum of the scheduled quarterly amortization payments under the former Term Loan C and Term Loan D facilities. The New Term Loan D facility amortizes at a rate of 5.2% per annum for the first ~~five~~ three years of the loan, with the remaining ~~remainder of 75~~84.4% of principal ~~(plus~~becoming ~~accrued interest)~~ due in ~~June 2009.~~years Atfour through six of the loan, maturing June 2630, ~~2003,~~2009. ~~the~~The borrowings outstanding under the New Term Loan D facility ~~bore~~currently bear interest at of approximately 3.~~8125~~6%. The New Term Loan D facility is guaranteed by substantially all direct and indirect subsidiaries of Regal Cinemas and by substantially all ofreal ~~its~~and ~~direct~~personal property of Regal Cinemas and ~~indirect~~its subsidiaries, as set forth in the third amended and restated credit agreement. The ~~Term~~third ~~Loan~~amended Dand ~~facility~~restated credit agreement carries identical covenants to those ofin the Regal Cinemas ~~senior~~ credit ~~facility~~agreement that was amended and restated. ~~See~~A summary description of the covenants and other provisions of the credit agreement is included in "Management's Discussion and Analysis of Financial Condition and results of Operations—Liquidity and Capital Resources—Regal Cinemas Senior Credit Facility" and Note 6 to ~~the~~ our audited consolidated financial statements included in ~~Item 8 of~~ our 2002 Annual Report on Form 10-K. ~~for~~The ~~further~~summary description ofis ~~the~~qualified ~~covenants~~in ~~and~~its ~~other~~entirety ~~terms~~to the full text of the third amended and restated ~~Regal Cinemas senior~~ credit ~~facility~~agreement ~~which~~of isRegal Cinemas incorporated ~~herein~~ by reference herein as Exhibit 4. 1.

As of ~~June~~September 2625, 2003, Regal Cinemas had $145 million ~~committed~~available under its undrawn senior revolving credit facility. Regal Cinemas also maintains letters of credit of $30 million (of which approximately $1615.89 million was outstanding as of ~~June~~September 2625, 2003), which reduces the availability under its senior revolving credit facility.

Other Long-Term Obligations—All other significant long-term obligations not explicitly discussed herein are described in Note 6 to the consolidated financial statements included in Item 8 of our 2002 Annual Report on Form 10-K.

Guarantors of Regal Cinemas' Senior Subordinated Notes

Regal Cinemas' senior subordinated 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 amended and restated senior credit facility and any future senior indebtedness. Each subsidiary 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.

5. INCOME TAXES

The provision for income taxes of $2827.96 million and $2822.5 million for the thirteen weeks ended ~~June~~September 2625, 2003 and ~~June~~September 26, 2002 reflect effective tax rates of approximately 40.21% and 4239.29%, respectively. The provision for income taxes of $5078.73 million and $4062.16 million for the ~~twenty~~thirty-nine ~~six~~ weeks ended ~~June~~September 2625, 2003 and the ~~twenty~~thirty-~~two~~five weeks ended ~~June~~September 2726, 2002 reflect effective tax rates of approximately 39.78% and 40.95%, respectively. No benefit for income taxes was recorded for the four weeks ended January 24, 2002 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 realized. ~~Accordingly, the effective tax rate for the four weeks ended January 24, 2002 was 0%.~~

For federal income tax purposes, the Company has carryover tax basis in certain assets acquired in the Hoyts acquisition described in Note 3. Such acquired entities had net operating loss carryforwards totaling approximately $155.4 million as of the date of acquisition. Pursuant to certain ~~IRS~~Internal Revenue Code limitations, the Company's allowable annual deduction with respect to the Hoyts' net operating loss carryforwards is limited to approximately $8.6 million. ~~During~~The ~~the quarter ended June 26, 2003, the~~ Company recorded deferred tax assets in the amount of ~~approximately~~ approximately $33.0 million, net of a valuation allowance of approximately $14.7 million, in connection with the Hoyts acquisition.

In assessing the valuation of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. The Company has recorded a valuation allowance against deferred tax assets of approximately $19.8 million and $5.1 million at ~~June~~September 2625, 2003 and December 26, 2002, respectively, as management believes it more likely than not that such deferred tax asset amounts would not be realized in future tax periods. The valuation allowance at ~~June~~September 2625, 2003 and December 26, 2002 relates to pre-acquisition deferred tax assets of Edwards and Hoyts. Accordingly, future reductions in the valuation allowance will reduce goodwill related to such acquisitions.

6. CAPITAL STOCK AND STOCK-BASED COMPENSATION

Capital Stock

As of ~~June~~September 2625, 2003, the Company's authorized capital stock consisted of:

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

Of the authorized shares of common stock, 7,500,000 shares were issued and outstanding as of June 26, 2003, all of which are held by REH. Of the authorized shares of the preferred stock, no shares are issued and outstanding as of June 26, 2003. The Company may issue the preferred shares from time to time in such series having such designated preferences and rights, qualifications and limitations as the Board of Directors may determine. 11

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

Of the authorized shares of common stock, 7,500,000 shares were issued and outstanding as of September 25, 2003, all of which are held by REH. Of the authorized shares of the preferred stock, no shares are issued and outstanding as of September 25, 2003. The Company may issue the preferred shares from time to time in such series having such designated preferences and rights, qualifications and limitations as the Board of Directors may determine.

Stock-based Compensation

InOn ~~connection with the~~ July 1, 2003, REG paid an extraordinary cash dividend ~~described~~of ~~more~~$5.05 ~~fully~~per inshare ~~Note~~of REG Class 10A and Class B common stock to stockholders of record on June 20, 2003. In connection with the extraordinary cash dividend, 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~~subject ~~under~~to option held by the Company's option holders were adjusted pursuant to the antidilution adjustment terms of the 2002 Stock Incentive Plan to restore their economic position to that existing immediately before the extraordinary dividend. ~~and~~The ~~the~~ number of options reserved for issuance under the plan were also adjusted. There were 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~~ 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.

In December 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting for Stock-Based Compensation—Transition and Disclosure." SFAS No.148 amends SFAS No. 123, "Accounting for Stock-Based Compensation," to provide alternative methods of transition 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 Accounting Principles Board ("APB") Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to stock-based 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 fair value of all stock-based awards on the date of grant over the vesting period and alternatively allows entities to continue to apply the provisions of APB Opinion No. 25, "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 SFAS No. 123 had been applied.

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):~~

	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

period of the grants, the Company's net income would have been recorded in the amounts indicated below (in millions):

	Thirteen weeks ended September 25, 2003 (Reorganized Company)			Thirteen weeks ended September 26, 2002 (Reorganized Company)			Thirty-nine weeks ended September 25, 2003 (Reorganized Company)			Thirty-five weeks ended September 26, 2002 (Reorganized Company)			Four weeks ended January 24, 2002 (Predecessor Company)
Net income, as reported:	$	41.3		$	33.9		$	118.2		$	91.8		$	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	)		(1.2	)		(1.6	)		(0.1	)

Pro forma net income	$	40.9		$	33.3		$	117.0		$	90.2		$	420.7

7. CONTINGENCIES

Bankruptcy 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 ~~June~~September 2625, 2003, approximately $43.06 million of remaining claims related to RCI's and Edwards' bankruptcy proceedings are recorded in the Company's ~~June~~September 2625, 2003 unaudited condensed consolidated balance sheet as "Bankruptcy 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 liquidity or results of operations. To the extent the 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. To the extent the 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.

revolving credit facility. To the extent the 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.

Other

RCI and Edwards are defendants in a number of claims arising from their decision to file voluntary petitions for bankruptcy relief 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 and its subsidiaries are also presently involved in various legal proceedings arising in the ordinary course of its business operations, including personal injury claims, employment and contractual matters and other 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.

On August 13, 2003, the United States Court of Appeals for the Ninth Circuit reversed the United States District Court for the District of Oregon's award of summary judgment in favor of our subsidiaries identified below with respect to an American Disabilities Act ("ADA") claim on appeal before it. The law suit was originally filed in the district court on April 11, 2000 by the Oregon Paralyzed Veterans of America, Kathy Stewmon, Tina Smith and Kathy Braddy against Regal Cinemas, Inc. and Eastgate Theatre Inc. dba Act III Theatre, Inc. The plaintiffs alleged that the "stadium seating" plans in six of the defendants' movie theatres violate the ADA, the related regulations of the Department of Justice, and Oregon's public accommodations statute. The plaintiffs also claimed negligence in the design, construction, and operation of the stadium-riser theatres, seeking for their claims declaratory and injunctive relief, compensatory and punitive damages, damages for negligence and attorneys' fees and costs.

The only claim that survived on appeal was the ADA claim, which was reversed and remanded by the appellate court to the district court with instructions to enter summary judgment in favor of the plaintiffs (other than Oregon Paralyzed Veterans of America, which did not join in the appeal). The ADA claim was based upon the defendants' alleged failure to provide persons in wheelchairs seating arrangements with "lines of sight comparable to those for members of the general public" because the wheelchair accessible seating was located only in the first few rows, most often on the sloped floor portion, of the stadium-style theatres. The appellate court held that the Department of Justice's interpretation of "lines of sight comparable to those for members of the general public" to require a viewing angle for wheelchair seating within the range of angles offered to the general public in stadium-style seats is valid and entitled to deference. The appellate court did not address specific changes, if any, that might be required to bring the stadium-style theatres into compliance with the ADA, and its decision conflicts with a recent decision, based upon substantially similar facts, of the United States Court of Appeals for the Fifth Circuit captioned Lara v. Cinemark USA, Inc. We believe we are in compliance with the ADA regulation and as such have appealed the Ninth Circuit's decision to the Supreme Court of the United States.

8. RELATED PARTY TRANSACTIONS

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

On April 17, 2002, REG used a portion of the proceeds from REH's sale of Edwards to RCI 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. The holders of the Edwards Series B preferred stock received an aggregate of $15.7 million in the redemption of the Edwards Series B preferred stock held by them.~~

preferred stock held by them. The holders of the Edwards Series B preferred stock 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 RCI to cause Edwards to redeem from Anschutz 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 Activities Group.

Management Agreements

RCI manages the theatre operations of UATC and its subsidiaries pursuant to the terms of a management agreement. During the thirteen weeks and ~~twenty~~thirty-~~six~~nine weeks ended ~~June~~September 2625, 2003, RCI recorded management fee revenues of approximately $3.2.5 million and $68.49 million related to this arrangement. Such fees ~~have~~ have been recorded in the accompanying unaudited condensed consolidated statements of operations ~~for the thirteen weeks and twenty-six weeks ended June 26, 2003~~ as a component of "Other Operating Revenues."

Other Transactions

During the thirteen weeks ended ~~June~~September 2625, 2003, RCM incurred approximately $~~509~~593,000 of expenses payable to ~~certain~~an Anschutz ~~affiliates~~affiliate for ~~reimbursement of~~telecommunication ~~travel and marketing and communication expenses~~services. Additionally, RCM has recorded revenue of $~~260~~108,000 from certain affiliates of Anschutz and Oaktree's Principal Activities Group related to marketing and business meeting services provided by RCM to these affiliates.

9. RECENT ACCOUNTING PRONOUNCEMENTS

Effective December 27, 2002, the Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 establishes accounting standards for recognition and measurement of the fair value of obligations associated with the retirement of long-lived assets when there is a legal obligation to incur such costs. Under SFAS No. 143, the costs of retiring an asset will be recorded as a liability when the retirement obligation arises and will be amortized to expense over the life of the asset. The adoption of SFAS No. 143 did not have a material impact on the Company's financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145, "Rescission 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. As a result of the Company's adoption of SFAS No. 145 on December 27, 2002, the extraordinary gain from debt extinguishment during fiscal 2002 has been reclassified to earnings from continuing operations.

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 November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This interpretation will significantly change current practice in the accounting for, and disclosure of, guarantees. Guarantees meeting the characteristics described in the interpretation are required to be initially recorded at fair value, which is different from general current practice of recognition of a liability only when loss is probable and reasonably estimable, as prescribed in SFAS No. 5, "Accounting for Contingencies." The interpretation also requires a guarantor to make significant new disclosures for virtually all guarantees even if the likelihood of the guarantor's having to make payments under the guarantee is remote. The disclosure requirements in this interpretation were effective for financial statements of interim or annual periods ending after December 15, 2002. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis 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 the Company's financial position or results of operations.

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 infor ~~the~~interim ~~first fiscal year~~ or ~~interim~~annual ~~period~~periods ~~beginning~~ending after ~~June~~December 15, 2003. Certain new disclosure requirements apply to all financial statements issued after January 31, 2003. The adoption of this interpretation ~~did~~is not expected to have a material impact on the Company's financial position or results of operations.

In November of 2002, the EITF reached a consensus on Issue No. 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 price of the vendor's products 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 (a) a reimbursement of costs incurred 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 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 or results of operations.

In May 2003, the FASB issued SFAS No. 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 accounting for a number of 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. 150 will have a material impact on our financial position, cash flows or results of operations.

~~10. SUBSEQUENT EVENTS~~ 16

~~On July~~SFAS No. 1,150 ~~2003,~~requires ~~REG~~certain ~~paid~~financial aninstruments ~~extraordinary~~that ~~cash~~embody ~~dividend~~obligations of ~~$5.05~~the ~~per~~issuer ~~share of REG Class A~~ and ~~Class B~~have ~~common~~characteristics ~~stock to stockholders~~ of ~~record on~~both ~~June 20,~~liabilities ~~2003. In connection with the extraordinary cash dividend,~~ and ~~pursuant~~equity to ~~the~~be ~~antidilution~~classified ~~adjustment~~as ~~terms~~liabilities. Many of ~~the~~these instruments ~~REG~~previously ~~2002~~were ~~Stock~~classified ~~Incentive~~as ~~Plan~~equity ~~(which~~or ~~includes~~temporary ~~certain~~equity ~~employees~~and ~~of Regal~~as ~~Cinemas)~~such, ~~the~~SFAS ~~exercise~~No. 150 ~~price~~represents ~~and~~a ~~the~~significant ~~number~~change ofin ~~shares~~practice ~~subject~~in ~~to option held by~~ the ~~Company's~~accounting ~~option~~for ~~holders~~a ~~were~~number ~~adjusted~~of tomandatorily redeemable ~~restore~~equity ~~their~~instruments ~~economic~~and ~~position~~certain toequity derivatives that ~~existing~~frequently ~~immediately~~are ~~before the~~used ~~extraordinary~~in ~~dividend~~connection ~~and~~with ~~the~~share ~~number~~repurchase ofprograms. ~~options~~SFAS ~~reserved for issuance under the plan were adjusted~~No. 150 ~~There~~is ~~were~~effective nofor ~~accounting~~all ~~consequences~~financial ~~for~~instruments ~~changes~~created ~~made~~or tomodified ~~reduce~~after ~~the~~May 31, ~~exercise~~2003, ~~prices~~ and ~~increase~~to ~~the~~other ~~number~~instruments ofat ~~underlying~~the ~~shares~~beginning ~~as a result~~ of the ~~extraordinary~~first ~~cash~~interim ~~dividend~~period asbeginning ~~the~~after ~~(1)~~June ~~the~~15, ~~aggregate~~2003. ~~intrinsic~~The ~~value~~Company's adoption of ~~the~~SFAS ~~awards~~No. 150 ~~immediately~~did ~~after the dividend transaction was~~ not ~~greater~~have ~~than~~a ~~the~~material ~~aggregate~~impact ~~intrinsic~~on ~~value~~its offinancial ~~the~~position, ~~awards~~cash ~~immediately~~flows ~~before~~or ~~the~~results ~~dividend transaction and (2) the ratio~~ of ~~the exercise price per share to the market value per share was not reduced~~operations.

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

Some of the information in this Quarterly Report on 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. In some cases you can identify these "forward-looking statements" by words like "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of those words and other comparable words. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these statements. The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included herein.

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 conduct our operations primarily through our subsidiaries: RCI; Edwards; RCM; Hoyts; and UATG.

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.

We became a wholly owned subsidiary of REG on April 12, 2002 in conjunction with an exchange transaction in which REG, through its wholly owned subsidiary REH, also acquired Edwards and RCM. REG is controlled by Anschutz, which controlled each of us, Edwards and RCM prior to REG's acquisition of us and them in the exchange transaction. Following the exchange transaction, RCI acquired Edwards, RCM, Hoyts and UATG from REH or REG in a series of transactions discussed in Note 3—"Acquisitions" to the accompanying financial statements. 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 Company generates revenues primarily from admissions and concession sales. Additional revenues are generated by on-screen and in-lobby advertisements, the rental of theatres for business meetings and other events by RCM and electronic video games located adjacent to the lobbies of certain of the Company's theatres and vendor marketing programs. Film rental costs depend on the popularity of a film and the length of time since the film's release and generally decline as a percentage of admission revenues the longer a film is in exhibition. Because the Company purchases certain concession items, such as fountain drinks and popcorn, in bulk and not pre-packaged for individual servings, the Company is able to improve its margins by negotiating volume discounts. Other operating expenses consist primarily of theatre labor and occupancy costs.

Critical Accounting Policies

Our significant accounting policies are described in Note 2 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, 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. The Company evaluates and modifies on an ongoing basis such estimates and assumptions which include, but are not limited to, those related to film costs, property and equipment, goodwill, income taxes and reorganization and purchase accounting. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The results of these estimates may form the basis of the carrying value of certain assets and liabilities. Actual results, under conditions and circumstances different from those assumed, may differ from estimates. The impact and any associated risks related to estimates, assumptions, and accounting policies are discussed within Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as in the Notes to the Unaudited Condensed Consolidated Financial Statements, if applicable, where such estimates, assumptions, and accounting policies affect the Company's reported and expected results.

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. The Company evaluates and modifies on an ongoing basis such estimates and assumptions which include, but are not limited to, those related to film costs, property and equipment, goodwill, income taxes and reorganization and purchase accounting. Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The results of these estimates may form the basis of the carrying value of certain assets and liabilities. Actual results, under conditions and circumstances different from those assumed, may differ from estimates. The impact and any associated risks related to estimates, assumptions, and accounting policies are discussed within Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as in the Notes to the Unaudited Condensed Consolidated Financial Statements, if applicable, where such estimates, assumptions, and accounting policies affect the Company's reported and expected results.

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 statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. In addition, income tax rules and regulations are subject to interpretation and require judgment by the Company and may be

financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. In addition, income tax rules and regulations are subject to interpretation and require judgment by the Company and may be challenged by the taxing authorities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance if it is deemed more likely than not that its deferred income tax assets will not be realized. The Company reassesses the need for such allowance on an ongoing basis. Should the Company ultimately realize certain tax assets with a valuation allowance that relate to pre-acquisition periods, goodwill would be reduced. 19

challenged by the taxing authorities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance if it is deemed more likely than not that its deferred income tax assets will not be realized. The Company reassesses the need for such allowance on an ongoing basis. Should the Company ultimately realize certain tax assets with a valuation allowance that relate to pre-acquisition periods, 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.

Results of Operations

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.

On November 28, 2002, RCI acquired all of the outstanding capital stock of RCM. Upon becoming a subsidiary of RCI, RCM's results of operations were consolidated with Regal Cinemas' as of February 21, 2002, the deemed date upon which Anschutz first held common control in both RCI and RCM.

The Company's 2002 statements of operations include information reflecting the four week period ended January 24, 2002 (Predecessor Company) and the twenty-two week period ended June 27, 2002 (Reorganized Company). As a result, the Company's post-reorganization statements of operations 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 and RCI's acquisition of Edwards. For financial reporting purposes, the inception date of the Reorganized Company is deemed to be 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."

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.

InThe ~~order~~Company's to2002 ~~provide~~statements aof ~~meaningful~~operations ~~basis~~include ofinformation ~~comparing~~reflecting the ~~twenty-six~~four ~~weeks~~week period ended ~~June~~January 2624, ~~2003 and June 27,~~ 2002 ~~for~~(pre-reorganization) ~~purposes~~and of the ~~following tables and~~ ~~discussion,~~thirty-five ~~the~~week ~~operating~~period ~~results~~ended ~~of the Reorganized Company for the twenty-two weeks June~~September 2726, 2002 (post-reorganization), which includes the results of operations of Edwards and ~~UATG~~the ~~for~~assets ~~the~~of ~~period~~UATG from January 24, 2002 toand ~~June~~of RCM from February 2721, 2002, ~~and~~the deemed dates at which Anschutz initially held common control in RCI, Edwards, RCM ~~for~~and the ~~period~~assets ~~from~~of ~~February 21,~~UATG. ~~2002~~As toa ~~June 27~~result, ~~2002,~~the Company's post-reorganization statements of operations have not been ~~combined~~prepared on a consistent basis with the ~~operating~~ ~~results~~pre-reorganization statements of operations and are not comparable in all respects to the ~~Predecessor~~statements ~~Company~~of ~~for~~operations prior to the ~~four~~reorganization. ~~weeks~~For ~~ended~~financial ~~January 24~~reporting purposes, ~~2002~~the ~~(collectively,~~inception date of the ~~"Combined~~Reorganized Company") ~~and~~is ~~are~~deemed ~~compared~~ to ~~the~~have ~~twenty-six~~occurred ~~weeks ended~~on ~~June~~January 2624, ~~2003~~2002. ~~Depreciation~~As such, ~~amortization~~operating results and ~~certain~~financial ~~other~~position ~~line~~for ~~items~~periods ~~included~~subsequent into ~~the~~January 24, ~~operating~~2002 ~~results~~are ofherein referred to as the ~~Combined~~"Reorganized Company" ~~are~~and ~~not~~for ~~comparable~~all ~~between~~ periods ending ason ~~the~~or ~~four~~prior ~~weeks~~to ~~ended~~ January 24, 2002 ofas the "Predecessor Company." doThe ~~not~~Company's ~~include~~2003 ~~the~~statements ~~effects~~ of ~~fresh-start~~operations ~~and~~include ~~purchase~~information ~~accounting~~reflecting ~~adjustments.~~the ~~The~~results ~~combining~~ of ~~reorganized~~operations ~~and~~of ~~predecessor~~Hoyts ~~periods~~for ~~is not in~~all ~~accordance~~periods ~~with~~subsequent ~~accounting~~to ~~principles~~its ~~generally~~acquisition ~~accepted~~by in the ~~United~~Company ~~States~~on ofMarch 28, ~~America~~2003.

In order to provide a meaningful basis of comparing the thirty-nine weeks ended September 25, 2003 and September 26, 2002 for purposes of the following tables and discussion, the operating results

of the Reorganized Company for the thirty-five weeks September 26, 2002, which includes the results of operations of Edwards and UATG for the period from January 24, 2002 to September 26, 2002 and RCM for the period from February 21, 2002 to September 26, 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 thirty-nine weeks ended September 25, 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:

				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
				Reorganized Company Thirteen Weeks Ended September 25, 2003		Reorganized Company Thirteen Weeks Ended September 26, 2002		Reorganized Company Thirty-nine Weeks Ended September 25, 2003		Combined Company Thirty-nine Weeks Ended September 26, 2002
Revenues:
	Admissions			67.51	%	67.8	%	67.75	%	68.52	%
	Concessions			2625.32		2827.36		2625.18		27.98
	Other operating revenues			67.27		34.96		6.27		34.60
		Total revenues		100.0		100.0		100.0		100.0
Operating expenses:
	Film rental and advertising costs			3835.47		3836.53		3736.05		3736.08
	Cost of concessions			3.67		43.19		3.67		4.10
	Rent expense			9.03		89.62		9.23		8.9.0
	Other operating expenses			2425.18		2225.31		25.24		2324.40
	General and administrative			2.79		3.32		2.8		3.2
	Merger and restructuring expenses and amortization of deferred stock compensation			0.31		0.75		0.2		10.19
	Depreciation and amortization			6.26		6.07		6.6		6.24
	Loss (gain) on disposal and impairment of operating assets			(0.1	)	(0.1	)	(0.12	)	—
		Total operating expenses		84.40	%	8385.40	%	84.53	%	8384.93	%
			Operating income	1516.60	%	1615.60	%	15.57	%	1615.17	%

Results of Operations for the thirteen weeks and thirty-nine weeks ended ~~June~~September 2625, 2003 and ~~June~~September 2726, 2002

The following table summarizes certain revenues and revenue-related data for the thirteen weeks ended ~~June~~September 2625, 2003 ("Q2Q3 2003 period"), the thirteen ~~weeks~~ ~~ended June 27, 2002 ("Q2 2002 period"), the twenty-six~~ weeks ended ~~June~~September 2726, ~~2003~~2002 ("~~Fiscal~~Q3 ~~2003 period") and the twenty-six weeks ended June 27, 2002 ("Fiscal 2002 period") (in millions, except average prices):~~

2002 period"), the thirty-nine weeks ended September 25, 2003 ("Fiscal 2003 period") and the thirty-nine weeks ended September 26, 2002 ("Fiscal 2002 period") (in millions, except average prices):

Total Revenues

		Reorganized Company Q2 2003 period		Reorganized Company Q2 2002 period		Reorganized Company Fiscal 2003 period		Combined Company Fiscal 2002 period
		Reorganized Company Q3 2003 period		Reorganized Company Q3 2002 period		Reorganized Company Fiscal 2003 period		Combined Company Fiscal 2002 period
Admissions		$	~~377~~366.75	$	~~342~~323.27	$	~~685~~1,051.27	$	~~615~~939.96
Concessions			~~147~~137.28		~~142~~131.87		~~263~~401.75		~~251~~383.41
Other operating revenues			3542.03		2022.01		62105.81		3254.45
	Total revenues	$	~~559~~546.96	$	~~505~~477.05	$	1,~~011~~558.73	$	~~899~~1,377.72
Attendance			5857.91		5753.38		~~108~~165.56		~~104~~157.19
Average ticket price		$	6.4142	$	56.9702	$	6.3235	$	5.9295
Average concession per patron		$	2.5041	$	2.4945	$	2.4342	$	2.4143

Admissions

Total admissions revenues increased $3542.58 million, or 1013.42%, to $~~377~~366.75 million for the Q2Q3 2003 period, from $~~342~~323.27 million for the Q2Q3 2002 period. The increase in admissions revenues in the Q2Q3 2003 period compared to Q2Q3 2002 period was primarily attributable to a 76.46% increase in ticket prices coupled with a 26.81% increase in attendance. The increase in attendance during the Q2Q3 2003 period was principally due to the inclusion of Hoyts from March 28, 2003~~, partially offset by a general decline in Q2 2003 industry box office results and the closure of 120 underperforming screens since the end of the Q2 2002 period~~.

Total admissions revenues increased $69112.31 million, or 11.39%, to $~~685~~1,051.27 million for the Fiscal 2003 period, from $~~615~~939.96 million for the Fiscal 2002 period. The increase in admissions revenues in the Fiscal 2003 period compared to the Fiscal 2002 period was primarily attributable to a 6.87% increase in ticket prices and a 4.29% increase in attendance, which is principally related to the inclusion of Hoyts from March 28, 2003 and a full ~~twenty~~thirty-~~six~~nine 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 $46.41 million, or 34.16%, to $~~147~~137.28 million for the Q2Q3 2003 period, from $~~142~~131.87 million for the Q2Q3 2002 period. The increase in concessions revenues in the Q2Q3 2003 period compared to the Q2Q3 2002 period was due to a 06.41% increase in ~~average concessions per patron and 2.8% increase in~~ attendance as a result of the inclusion of Hoyts from March 28, 2003, partially offset by a ~~general~~1.6% ~~decline~~decrease in ~~industry~~average ~~box~~concessions ~~office~~per ~~results for the Q2 2003 period and the closure of 120 underperforming screens since the end of the Q2 2002 period~~patron.

Total concessions revenues increased $1218.34 million, or 4.98%, to $~~263~~401.75 million for the Fiscal 2003 period, from $~~251~~383.41 million for the Fiscal 2002 period. The increase in concessions revenues in the Fiscal 2003 period compared to the Fiscal 2002 period was due to a ~~0.8% increase in average concessions per patron and a~~ 4.29% increase in attendance, which is primarily attributable the inclusion of Edwards' operations for a full ~~twenty~~thirty-~~six~~nine weeks in 2003 and Hoyts from March 28, 2003~~, partially offset by a general decline in industry box office results for the Fiscal 2003 period and the closure of 120 underperforming screens since the end of the Q2 2002 period~~.

Other Operating Revenues

Total other operating revenues increased $1520.02 million, or 7591.04%, to $3542.03 million for the Q2Q3 2003 period, from $2022.01 million for the Q2Q3 2002 period. Total other operating revenues increased $3050.46 million, or 9392.8%, to $62105.81 million for the Fiscal 2003 period, from $3254.45 million for the Fiscal 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 Hoyts from March 28, 2003, increases in advertising and meetings revenues generated by Regal CineMedia and, to ~~a lesser extent, increases in the Company's revenues from vendor marketing programs during the Q2 2003 and Fiscal 2003 periods.~~

a lesser extent, increases in the Company's revenues from vendor marketing programs during the Q3 2003 and Fiscal 2003 periods.

Operating Expenses

The following table summarizes certain theatre operating expenses for the Q2Q3 2003, Fiscal 2003, Q2Q3 2002 and Fiscal 2002 periods (dollars in millions):

	Reorganized Company Q2 2003 period		Reorganized Company Q2 2002 period		Reorganized Company Fiscal 2003 period		Combined Company Fiscal 2002 period
	Reorganized Company Q3 2003 period		Reorganized Company Q3 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~~195.14	5653.93	~~194~~173.45	5653.86	~~374~~569.04	54.61	~~333~~506.05	5453.19
Cost of concessions(2)	20.41	1314.96	2018.6	14.41	3656.89	14.02	3655.51	14.54
Rent expense(3)	5051.41	9.03	43.48	89.62	93144.56	9.23	80124.53	8.9.0
Other operating expenses(3)	~~135~~140.18	2425.18	~~112~~120.40	2225.31	~~254~~395.42	25.24	~~210~~330.6	2324.40
General and administrative expenses(3)	1415.96	2.79	1615.63	3.32	2843.39	2.8	2844.70	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.

Film Rental and Advertising Costs

Film rental and advertising costs increased $2021.79 million, or 1012.6%, to $~~215~~195.14 million in the Q2Q3 2003 period, from $~~194~~173.45 million in the Q2Q3 2002 period. Film rental and advertising costs as a percentage of admissions revenues ~~remained~~decreased ~~consistent~~to ~~at 56~~53.93% ~~and~~during 56the Q3 2003 period from 53.86% during ~~the~~Q3 Q22002 ~~2003~~period. ~~and~~Such Q2decrease ~~2002~~was ~~periods,~~primarily attributable ~~respectively~~to product mix. Film rental and advertising costs increased $4162.09 million, or 12.34%, to $~~374~~569.04 million in the Fiscal 2003 period, from $~~333~~506.05 million in the Fiscal 2002 period. Film rental and advertising costs as a percentage of admissions revenues increased slightly to 54.61% in the Fiscal 2003 period as compared to 5453.19% in the Fiscal 2002 period. The increase in film rental and advertising costs during the Q2Q3 2003 and Fiscal 2003 periods was primarily attributable to the inclusion of ~~Edwards~~Hoyts ~~for~~from March 28, 2003 and a full ~~twenty~~thirty-~~six~~nine weeks of inoperations of Edwards for the Fiscal 2003 period ~~and Hoyts from March 28, 2003~~.

Cost of Concessions

Cost of concessions ~~decreased~~increased $01.25 million, or 18.01%, to $20.41 million in the Q2Q3 2003 period, from $2018.6 million in the Q2Q3 2002 period. Cost of concessions as a percentage of concessions revenues ~~decreased~~increased to 1314.96% in the Q2Q3 2003 period as compared to 14.41% in the Q2Q3 2002 period. Cost of concessions increased $01.38 million, or 03.83%, to $3656.89 million in the Fiscal 2003 period, from $3655.51 million in the Fiscal 2002 period. Cost of concessions as a percentage of concessions revenues decreased to 14.02% in the Fiscal 2003 period as compared to 14.54% in the Fiscal 2002 period. The ~~decrease~~increase in the cost of concessions induring Q2the Q3 2003 ~~and~~period ~~Fiscal~~was ~~2003~~primarily ~~periods~~due asto achanges ~~percentage~~in product mix during the period. The decrease in the cost of concessions ~~revenues~~in the Fiscal 2003 period is primarily attributable to the realization of operating efficiencies realized through the 2002 integration of Regal Cinemas and Edwards ~~and to a lesser extent, the second quarter 2003 integration of Hoyts~~.

Rent Expense

Rent expense increased $7.03 million, or 16.17%, to $5051.41 million in the Q2Q3 2003 period from $43.48 million in the Q2Q3 2002 period. Rent expense as a percentage of total revenues was 9.03% and 89.62% for the Q2Q3 2003 and Q2Q3 2002 periods, respectively. Rent expense increased $1320.03 million, or 16.1%, to $93.5 million in the Fiscal 2003 period from $80.5 million in the Fiscal 2002 period. Rent expense as a percentage of total revenues was 9.2% and 8.9% for the Fiscal 2003 and 2002 periods, respectively. The increase in rent expense in the Q2 2003 and Fiscal 2003 periods was primarily attributable to the inclusion of Hoyts from March 28, 2003, coupled with marginal increases in rent at expanded locations.

16.3%, to $144.6 million in the Fiscal 2003 period from $124.3 million in the Fiscal 2002 period. Rent expense as a percentage of total revenues was 9.3% and 9.0% for the Fiscal 2003 and 2002 periods, respectively. The increase in rent expense in the Q3 2003 and Fiscal 2003 periods was primarily attributable to the inclusion of Hoyts from March 28, 2003, coupled with marginal increases in rent at expanded locations.

Other Operating Expenses

Other operating expenses increased $2220.78 million, or 2017.23%, to $~~135~~140.18 million in the Q2Q3 2003 period, from $~~112~~120.40 million in the Q2Q3 2002 period. Other operating expenses as a percentage of total revenues increased to 2425.18% in the Q2Q3 2003 period as compared to 2225.31% in the Q2Q3 2002 period. Other operating expenses increased $4364.86 million, or 2019.85%, to $~~254~~395.42 million in the Fiscal 2003 period, from $~~210~~330.6 million in the Fiscal 2002 period. Other operating expenses as a percentage of total revenues rose to 25.24% in the Fiscal 2003 period as compared to 2324.40% in the Fiscal 2002 period. The increase in total other operating expenses ~~and as a percentage of total revenues~~ in the Q2Q3 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~~thirty-~~six~~nine weeks of operations 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 ~~decreased~~increased $10.73 million, or ~~10.~~2.0%, to $1415.96 million during the Q2Q3 2003 period, from $1615.63 million in the Q2Q3 2002 period. As a percentage of total revenues, general and administrative expenses were approximately 2.79% and 3.32% in the Q2Q3 2003 and Q2Q3 2002 periods, respectively. General and administrative expenses decreased $0.41 million, or 10.42%, to $2843.39 million during the Fiscal 2003 period, from $2844.70 million in the Fiscal 2002 period. As a percentage of total revenues, general and administrative expenses were approximately 2.8% and 3.2% in the Fiscal 2003 and Fiscal 2002 periods, respectively. The decrease in general and administrative expenses as a percentage of total revenues during the Q2Q3 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~~.

Depreciation and Amortization

Depreciation and amortization increased $43.79 million, or 1512.61%, to $3436.90 million in the Q2Q3 2003 period, from $3032.21 million in the Q2Q3 2002 period. Depreciation and amortization increased $1014.76 million, or 1916.26%, to $66102.3 million in the Fiscal 2003 period, from $5587.67 million in the Fiscal 2002 period. The increase in depreciation and amortization during the Q2Q3 2003 and Fiscal 2003 periods is primarily due to the inclusion of Hoyts from March 28, 2003 and a full ~~twenty~~thirty-~~six~~nine weeks of operations of Edwards and Regal CineMedia for the Fiscal 2003, ~~offset by the closure of 120 under-performing screens since the end of the Q2 2002~~ period.

Operating Income

Operating income totaled approximately $87.24 million for the Q2Q3 2003 period. The reported operating income for the Q2Q3 2003 period represents an increase of $315.49 million, or 22.2%, from operating income of $8371.85 million in the Q2Q3 2002 period. Operating income totaled approximately $~~156~~244.60 million for the Fiscal 2003 period, which represents an increase of $1228.10 million, or 13.0%, from $~~144~~216.50 in the Fiscal 2002 period. The increase in operating income during the Q2Q3 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~~and Regal Cinemas. ~~and~~The toincrease ain operating ~~lesser~~income ~~extent,~~during the Q3 2003 ~~integration~~ ofand ~~Hoyts.~~ Fiscal 2003 periods was also

attributable to a reduction of merger and restructuring expenses, partially offset by increases in certain other operating expense items described in previous sections.

Interest Expense

Interest expense increased $03.49 million, or 226.60%, to $1518.69 million in the Q2Q3 2003 period, from $15.20 million in the Q2Q3 2002 period. ~~The~~Interest ~~increase is interest~~ expense inincreased ~~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~~ $30.63 million, or 100.86%, to $2948.87 million in the Fiscal 2003 period, from $3348.4 million in the Fiscal 2002 period. The ~~decrease~~increase in interest expense in the ~~Fiscal~~Q3 2003 period is ~~due~~attributable to ~~RCI's~~additional ~~debt~~borrowings ~~restructuring~~under ~~associated~~the ~~with~~amended ~~its~~and ~~Chapter~~restated 11Regal ~~bankruptcy~~Cinemas ~~filing,~~senior ~~coupled~~credit ~~with~~facility ~~lower~~related ~~weighted~~to ~~average~~the ~~interest~~purchase ~~rates~~of onUATG ~~its~~during ~~new~~the ~~outstanding~~second ~~debt.~~quarter ~~RCI~~of ~~emerged from bankruptcy on January 29, 2002~~2003.

Income Taxes

The provision for income taxes of $2827.96 million and $2822.5 million for the Q2Q3 2003 and Q2Q3 2002 periods reflect effective tax rates of approximately 40.21% and 4239.29%, respectively. The provision for income taxes of $5078.73 million and $4062.16 million for the Fiscal 2003 period and the ~~twenty~~thirty-~~two~~five weeks ended ~~June~~September 2726, 2002 reflect effective tax rates of approximately 39.78% and 40.95%, respectively. No benefit for income taxes was recorded for the four weeks ended January 24, 2002 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 realized. ~~Accordingly, the effective tax rate for the four weeks ended January 24, 2002 is 0%.~~

Net Income

Net income totaled $4341.03 million for the Q2Q3 2003 period. The reported net income for the Q2Q3 2003 period represents an increase of $47.04 million ~~from~~or 21.8% from net income of $3933.09 million in the Q2Q3 2002 period. Net income totaled $76118.92 million for the Fiscal 2003 period, which represents a decrease of $~~401~~394.84 million from net income of $~~478~~512.76 in the Fiscal 2002 period. The Fiscal 2002 period included a $661.9 million gain on extinguishment of debt related to the RCI restructuring.

Changes in Cash Flows

Cash flows generated from operating activities were approximately $~~207~~245.74 million for the Fiscal 2003 period compared to approximately $~~103~~187.86 million for the Fiscal 2002 period. The increase was attributable to a full ~~twenty~~thirty-~~six~~nine weeks of operations of Edwards and Regal CineMedia in 2003 and the ~~results~~inclusion 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~~513.57 million during the Fiscal 2003 period and is primarily attributable to the Q2second quarter 2003 purchase of Hoyts and UATG ~~and~~coupled with increased capital expenditures as a result of a full ~~twenty~~thirty-~~six~~nine weeks of operations for Edwards during 2003 and Hoyts from March 28, 2003. Cash flows provided by financing activities were approximately $~~278~~272.62 million for the Fiscal 2003 period compared to cash flows used in financing activities of approximately $~~181~~242.18 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

The Company conducts its operations through its subsidiaries: RCI,; Edwards,; RCM,; Hoyts; and UATG. The Company expects its primary uses of cash to be for operating expenses and general corporate purposes related to corporate operations. The Company's principal sources of liquidity are from its operating subsidiaries. In the Company's operating subsidiaries, principal uses of cash will be for operating expenses, capital expenditures, and debt service. The principal sources of liquidity for the ~~Company's subsidiaries are cash generated from their operations, cash on hand and the revolving credit facilities provided for under the amended and restated Regal Cinemas senior credit facility.~~

Company's subsidiaries are cash generated from their operations, cash on hand and the revolving credit facilities provided for under Regal Cinemas' third amended and restated credit agreement.

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.

The Company funds the cost of its operating subsidiaries' capital expenditures through internally generated cash flow, cash on hand and financing activities. The Company's capital requirements have historically arisen principally in connection with acquisitions of theatres, new theatre openings, adding new screens to existing theatres, upgrading the Company's theatre facilities and 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 theatre development, replacement, expansion, upgrading, and maintenance to be in the range of $7560 million to $8570 million in 2003. In addition to capital expenditures associated with its theatre operations, the Company expects to incur capital expenditures of approximately $50 million in 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 $6195.40 million in capital expenditures.

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.~~

On June 6, 2003, RCI acquired all of the outstanding capital stock of UATG from REH, consisting of 438 screens in 46 leased theatres, certain fee properties and certain other assets under construction, for an estimated cash purchase price of approximately $311.4 million. The Company ~~entered~~borrowed ~~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~~Regal Cinemas' third amended and restated ~~Regal Cinemas senior~~ credit ~~facility~~ agreement.

As of ~~June~~September 2625, 2003, Regal Cinemas had $145 million ~~committed~~available under its undrawn senior revolving credit facility, $~~525~~523.91 million outstanding under its senior ~~secured~~ secured term ~~loans~~loan 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~~September 2625, 2003 (of which approximately $15.9 million was outstanding as of September 25, 2003), which reduces the availability under its senior revolving credit facility.

~~The Company primarily leases its theatres pursuant to long-term non-cancelable operating leases. As of June~~ 26~~, 2003, the Company's estimated contractual cash obligations and commercial commitments over the next several years are as follows (in millions):~~

			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

The Company primarily leases its theatres pursuant to long-term non-cancelable operating leases. As of September 25, 2003, the Company's estimated contractual cash obligations and commercial commitments over the next several years are as follows (in millions):

			Amount of Commitment Expiration per Period
				Payments Due by Period
			Total Amounts Committed			Current		2–3 Years	4–5 Years		After 5 Years
				Total			Current		2-3 Years			4-5 Years		After 5 Years
Other Commercial Commitments
Contractual Cash Obligations
	Total commercial commitments(1)		$	145.0		—		—	—		$	145.0
	Long-term debt			$	873.1		$	27.0	$	54.0		$	205.8	$	586.3
	Lease financing arrangements				96.5			2.0		5.3			7.0		82.2
	Bankruptcy claims and liabilities				3.6			3.6
	Capital leases				23.4			0.9		1.8			3.3		17.4
	Other long term obligations				2.9			0.7		1.3			0.2		0.7
	Operating leases				2,936.4			195.8		381.2			375.8		1,983.6
		Total contractual cash obligations		$	3,935.9		$	230.0	$	443.6		$	592.1	$	2,670.2

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

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

(1): As of September 25, 2003, Regal Cinemas had $145 million available under its undrawn senior revolving credit facility. Regal Cinemas also maintain letters of credit of $30 million (of which approximately $15.9 million was outstanding as of September 25, 2003), which reduces the availability under its senior revolving credit facility.

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

Bankruptcy Claims

RCI and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At ~~June~~September 2625, 2003, Regal Cinemas had accrued approximately $43.06 million for the estimated costs to resolve such bankruptcy 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 liquidity or results of operations. To the extent these claims are allowed by the applicable bankruptcy court, they will be funded with cash on hand, cash flow from operations or borrowings under Regal Cinemas' revolving credit facility. In addition to these sources of funding, with respect to allowed Edwards claims, they may also be funded from restricted cash that has been set aside, and, if the allowed 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

there is a legal obligation to incur such costs. Under SFAS No. 143, the costs of retiring an asset will be recorded as a liability when the retirement obligation arises and will be amortized to expense over the life of the asset. The adoption of SFAS No. 143 did not have a material impact on the Company's financial position or results of operations.

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 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 May 2003, the FASB issued SFAS No. 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 accounting for a number of 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's ~~does not expect the~~ adoption of SFAS No. 150 ~~will~~did not have a material impact on ~~our~~its financial position, cash flows 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.

Item 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's market risk is confined to interest rate exposure of its and its wholly owned subsidiaries' debt obligations that bear interest based on floating rates. The ~~Company's~~third amended and restated ~~senior~~ credit ~~facilities~~agreement ~~provide~~provides for variable rate interest that could be adversely affected by an increase in interest rates. As of ~~June~~September 2625, 2003, ~~the Company had~~ term borrowings of $~~525~~523.91 million under ~~its~~the third amended and restated ~~senior~~ credit ~~facilities~~agreement were outstanding. Borrowings under ~~these~~this ~~facilities~~facility ~~will~~ bear interest, at the Company's option, at either a base rate (which ~~will~~is 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 12.5025% to 2.7550% for the term loan ~~facilities~~facility. AtThe ~~June 26, 2003, the~~ borrowings outstanding under the ~~Company's~~New ~~term~~Term ~~credit~~Loan ~~facilities~~D ~~bore~~facility ~~interest~~currently ~~ranging~~bear ~~from~~interest of approximately 3.~~8125~~6% ~~to 4~~.~~0625%.~~ A one-half percent rise in the interest rate on the Company's variable rate indebtedness held at ~~June~~September 2625, 2003, would have increased reported interest expense by approximately $~~657~~654,~~400~~000 for the quarter ended ~~June~~ September 2625, 2003.

Item 4.
CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission's rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officers (whom we refer to in this periodic report as our Certifying Officers), as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Certifying Officers, the effectiveness of our disclosure controls and procedures as of ~~June~~September 2625, 2003, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers ~~concluded~~ concluded that, as of ~~June~~September 2625, 2003, our disclosure controls and procedures were effective.

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 1.
LEGAL PROCEEDINGS

Pursuant to the introductory instruction to Part II (Other Information) of Form 10-Q, the information required to be furnished by us under this Part II, Item 1 (Legal Proceedings) is incorporated by reference to Note 7 (Contingencies) of our notes to our unaudited condensed consolidated financial statements included in Part I, Item 1 (Financial Statements) of this report on Form 10-Q.

Item 6.
EXHIBITS AND REPORTS ON FORM 8-K

(a): Exhibits:

(a) Exhibits:

Exhibit No.		Exhibit Description
4.1		Third Amendment to Amended and Restated Credit Agreement, dated as of August 27, 2003, among Regal Cinemas, RCI, the several lenders from time to time parties thereto, and Lehman Commercial Paper Inc., as Administrative Agent, Credit Suisse First Boston, acting through its Cayman Islands Branch, as Syndication Agent, Sole Advisor, Sole Lead Arranger and Sole Book Manager (incorporated by reference to exhibit 4.1 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended September 25, 2003)
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

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

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

None

~~(b) Current Reports on Form 8-K filed during our second fiscal quarter of 2003:~~ 31

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: August 11, 2003	By:	/s/ MICHAEL L. CAMPBELL Michael L. Campbell Chief Executive Officer
Date: November 10, 2003	By:	/s/ MICHAEL L. CAMPBELL Michael L. Campbell Chief Executive Officer
Date: August 11, 2003	By:	/s/ AMY E. MILES Amy E. Miles Executive Vice President and Chief Financial Officer (Principal Financial Officer)
Date: November 10, 2003	By:	/s/ AMY E. MILES Amy E. Miles Executive Vice President and Chief Financial Officer (Principal Financial Officer)

REGAL CINEMAS CORPORATION
Exhibit Index

Exhibit No.		Exhibit Description
3.1		Amended and Restated Bylaws of Regal Cinemas
4.1		Third Amendment to Amended and Restated Credit Agreement, dated as of August 27, 2003, among Regal Cinemas, RCI, the several lenders from time to time parties thereto, and Lehman Commercial Paper Inc., as Administrative Agent, Credit Suisse First Boston, acting through its Cayman Islands Branch, as Syndication Agent, Sole Advisor, Sole Lead Arranger and Sole Book Manager (incorporated by reference to exhibit 4.1 to REG's Form 10-Q (Commission File No. 001-31315) filed for the fiscal quarter ended September 25, 2003)
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

Filing Compare · REGAL CINEMAS CORP