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SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended September 26, 2002

Commission file number: 001-31315

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Regal Entertainment Group(Exact name of Registrant as Specified in its Charter)

|Delaware                                                       |  | 02-0556934                                               
|-------------------------------------------------------------- |  | ---------------------------------------------------------
|(State or Other Jurisdiction of
Incorporation or Organization) |  | (Internal Revenue Service Employer
Identification Number)
|9110 East Nichols Avenue,
Suite 200
Centennial, CO             |  | 80112                                                    
|(Address of Principal
Executive Offices)                       |  | (Zip code)                                               

Registrant's
Telephone Number, Including Area Code:303/792-3600

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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

Class A
Common Stock46,072,919 shares outstanding at November 8, 2002 Class B Common Stock85,287,957 shares outstanding at
November 8, 2002

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TABLE OF CONTENTS

|                                                                                              |  | Page No.
|--------------------------------------------------------------------------------------------- |  | --------
|PART IFINANCIAL INFORMATION                                                                  |  | 3       
|Item 1. FINANCIAL STATEMENTS                                                                  |  | 3       
|UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS                                               |  | 3       
|UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS                                     |  | 4       
|UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                                     |  | 5       
|NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS                                |  | 6       
|Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  | 21      
|Item 3. QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK                              |  | 32      
|Item 4. CONTROLS AND PROCEDURES                                                               |  | 32      
|PART IIOTHER INFORMATION                                                                     |  | 33      
|Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                             |  | 33      
|Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      |  | 33      
|SIGNATURES                                                                                    |  | 34      
|CERTIFICATIONS                                                                                |  | 35      

2

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PART IFINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

REGAL ENTERTAINMENT GROUP (NOTE 1)        UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

|                                           |                                                                                                                                                                         | September 26, 2002 |         | January 3, 2002 |  
|------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------ | ------- | --------------- | -
|
|ASSETS                                     |                                                                                                                                                                         |                    |         |                 |  
|CURRENT ASSETS:                            |                                                                                                                                                                         |                    |         |                 |  
|                                           | Cash and cash equivalents                                                                                                                                               |                    | $       | 216.2           |  
|                                           | Restricted cash                                                                                                                                                         |                    |         | 22.3            |  
|                                           | Trade and other receivables, net                                                                                                                                        |                    |         | 11.8            |  
|                                           | Inventories                                                                                                                                                             |                    |         | 6.7             |  
|                                           | Prepaid expenses and other current assets                                                                                                                               |                    |         | 35.6            |  
|                                           | Assets held for sale                                                                                                                                                    |                    |         | 12.8            |  
|                                           | Deferred income tax asset                                                                                                                                               |                    |         | 1.0             |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|TOTAL CURRENT ASSETS                       |                                                                                                                                                                         |                    | 306.4   |                 |  
|PROPERTY AND EQUIPMENT:                    |                                                                                                                                                                         |                    |         |                 |  
|                                           | Land                                                                                                                                                                    |                    |         | 138.6           |  
|                                           | Buildings, leasehold improvements and equipment                                                                                                                         |                    |         | 1,670.5         |  
|                                           | Construction in progress                                                                                                                                                |                    |         | 12.2            |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|Total property and equipment               |                                                                                                                                                                         |                    | 1,821.3 |                 |  
|Accumulated depreciation and amortization  |                                                                                                                                                                         |                    | (117.8  | )               |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|Total property and equipment, net          |                                                                                                                                                                         |                    | 1,703.5 |                 |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|INVESTMENT IN REGAL CINEMAS, INC.          |                                                                                                                                                                         |                    |        |                 |  
|INTANGIBLE ASSETS                          |                                                                                                                                                                         |                    | 284.6   |                 |  
|OTHER NONCURRENT ASSETS                    |                                                                                                                                                                         |                    | 38.9    |                 |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|TOTAL ASSETS                               |                                                                                                                                                                         | $                  | 2,333.4 |                 | $
|                                           |                                                                                                                                                                         |                    |         |                 |  
|LIABILITIES AND STOCKHOLDERS' EQUITY       |                                                                                                                                                                         |                    |         |                 |  
|CURRENT LIABILITIES:                       |                                                                                                                                                                         |                    |         |                 |  
|                                           | Current maturities of long-term debt                                                                                                                                    |                    | $       | 19.7            |  
|                                           | Accounts payable                                                                                                                                                        |                    |         | 110.3           |  
|                                           | Accrued expenses                                                                                                                                                        |                    |         | 140.3           |  
|                                           | Deferred tax liability                                                                                                                                                  |                    |         | 0.6             |  
|                                           | Bankruptcy claims and liabilities                                                                                                                                       |                    |         | 33.3            |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|TOTAL CURRENT LIABILITIES                  |                                                                                                                                                                         |                    | 304.2   |                 |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|LONG-TERM DEBT                             |                                                                                                                                                                         |                    | 564.5   |                 |  
|LEASE FINANCING ARRANGEMENTS               |                                                                                                                                                                         |                    | 96.5    |                 |  
|CAPITAL LEASE OBLIGATIONS                  |                                                                                                                                                                         |                    | 4.0     |                 |  
|DEFERRED TAX LIABILITY                     |                                                                                                                                                                         |                    | 61.5    |                 |  
|OTHER NONCURRENT LIABILITIES               |                                                                                                                                                                         |                    | 47.4    |                 |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|TOTAL LIABILITIES                          |                                                                                                                                                                         |                    | 1,078.1 |                 |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|MINORITY INTEREST                          |                                                                                                                                                                         |                    | 4.2     |                 |  
|MANDATORY REDEEMABLE PREFERRED STOCK       |                                                                                                                                                                         |                    |        |                 |  
|STOCKHOLDERS' EQUITY:                      |                                                                                                                                                                         |                    |         |                 |  
|                                           | Contributed capital                                                                                                                                                     |                    |         |                |  
|                                           | Class A common stock, $0.001 par value; 500,000,000 shares authorized, 45,861,660 and 0 shares issued and outstanding at September 26 and January 3, 2002, respectively |                    |         |                |  
|                                           | Class B common stock, $0.001 par value; 200,000,000 shares authorized, 85,287,957 and 0 shares issued and outstanding at September 26 and January 3, 2002, respectively |                    |         | 0.1             |  
|                                           | Preferred stock, $0.001 par value; none issued and outstanding                                                                                                          |                    |         |                |  
|                                           | Additional paid in capital                                                                                                                                              |                    |         | 1,188.8         |  
|                                           | Retained earnings                                                                                                                                                       |                    |         | 62.2            |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|TOTAL STOCKHOLDERS' EQUITY                 |                                                                                                                                                                         |                    | 1,251.1 |                 |  
|                                           |                                                                                                                                                                         |                    |         |                 |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                                                                                                                         | $                  | 2,333.4 |                 | $
|                                           |                                                                                                                                                                         |                    |         |                 |  

See accompanying notes to unaudited condensed consolidated financial statements

3

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REGAL ENTERTAINMENT GROUP (NOTE 1)        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                                         |                                                            | Quarter Ended
September 26,
2002 |       | Quarter Ended
September 27,
2001 |   | Three Quarters
Ended
September 26,
2002 |        | Three Quarters
Ended
September 27,
2001 |        
|-------------------------------------------------------- | ---------------------------------------------------------- | -------------------------------- | ----- | -------------------------------- | - | --------------------------------------- | ------ | --------------------------------------- | -------
|
|REVENUES:                                                |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|                                                         | Admissions                                                 |                                  | $     | 387.1                            |   | $                                       | 110.0  |                                         | $      
|                                                         | Concessions                                                |                                  |       | 158.5                            |   |                                         | 43.4   |                                         |        
|                                                         | Other operating revenue                                    |                                  |       | 25.9                             |   |                                         | 5.3    |                                         |        
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|TOTAL OPERATING REVENUE                                  |                                                            |                                  | 571.5 |                                  |   | 158.7                                   |        |                                         | 1,593.8
|OPERATING EXPENSES:                                      |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|                                                         | Film rental and advertising costs                          |                                  |       | 207.2                            |   |                                         | 63.6   |                                         |        
|                                                         | Cost of concessions                                        |                                  |       | 22.3                             |   |                                         | 4.9    |                                         |        
|                                                         | Other theatre operating expenses                           |                                  |       | 206.0                            |   |                                         | 61.8   |                                         |        
|                                                         | General and administrative expenses                        |                                  |       | 16.6                             |   |                                         | 4.9    |                                         |        
|                                                         | Merger and restructuring expenses                          |                                  |       | 3.4                              |   |                                         | 0.3    |                                         |        
|                                                         | Depreciation and amortization                              |                                  |       | 35.5                             |   |                                         | 10.7   |                                         |        
|                                                         | Loss (gain) on disposal and impairment of operating assets |                                  |       | 3.2                              |   |                                         | (0.5   | )                                       |        
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|TOTAL OPERATING EXPENSES                                 |                                                            |                                  | 494.2 |                                  |   | 145.7                                   |        |                                         | 1,376.7
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|INCOME FROM OPERATIONS                                   |                                                            |                                  | 77.3  |                                  |   | 13.0                                    |        |                                         | 217.1  
|OTHER INCOME (EXPENSE):                                  |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|                                                         | Interest expense, net                                      |                                  |       | (15.0                            | ) |                                         | (5.3   | )                                       |        
|                                                         | Minority interest in earnings of consolidated subsidiaries |                                  |       | (2.4                             | ) |                                         | (0.3   | )                                       |        
|                                                         | Other, net                                                 |                                  |       |                                 |   |                                         | (1.2   | )                                       |        
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|TOTAL OTHER EXPENSE, NET                                 |                                                            |                                  | (17.4 | )                                |   | (6.8                                    | )      |                                         | (61.5  
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY ITEM |                                                            |                                  | 59.9  |                                  |   | 6.2                                     |        |                                         | 155.6  
|PROVISION FOR (BENEFIT FROM) INCOME TAXES                |                                                            |                                  | 23.8  |                                  |   | 0.1                                     |        |                                         | 68.6   
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|INCOME (LOSS) BEFORE EXTRAORDINARY ITEM                  |                                                            |                                  | 36.1  |                                  |   | 6.1                                     |        |                                         | 87.0   
|EXTRAORDINARY ITEM:                                      |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|                                                         | Loss on extinguishment of debt                             |                                  |       |                                 |   |                                         |       |                                         |        
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|NET INCOME (LOSS)                                        |                                                            | $                                | 36.1  |                                  | $ | 6.1                                     |        | $                                       | 85.5   
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|LOSS ON REDEMPTION OF PREFERRED STOCK                    |                                                            |                                  |      |                                  |   |                                        |        |                                         | 28.2   
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|NET INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS       |                                                            | $                                | 36.1  |                                  | $ | 6.1                                     |        | $                                       | 57.3   
|                                                         |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|EARNINGS (LOSS) PER SHARE:                               |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|                                                         | Basic                                                      |                                  | $     | 0.28                             |   | $                                       | 0.35   |                                         | $      
|                                                         | Diluted                                                    |                                  | $     | 0.27                             |   | $                                       | 0.32   |                                         | $      
|AVERAGE SHARES OUTSTANDING (in thousands):               |                                                            |                                  |       |                                  |   |                                         |        |                                         |        
|                                                         | Basic                                                      |                                  |       | 130,951                          |   |                                         | 17,440 |                                         |        
|                                                         | Diluted                                                    |                                  |       | 136,202                          |   |                                         | 18,969 |                                         |        

See accompanying notes to unaudited condensed consolidated financial statements

4

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REGAL ENTERTAINMENT GROUP (NOTE 1)        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                     |                                                                            | Three Quarters
Ended
September 26, 2002                                       |                                                            | Three Quarters
Ended
September 27, 2001   |  
|---------------------------------------------------- | -------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | ---------------------------------------------------------- | ----------------------------------------- | -
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | Net income (loss)                                                          |                                                                               | $                                                          | 85.5                                      |  
|                                                     |                                                                            | Adjustments to reconcile net income to cash provided by operating activities: |                                                            |                                           |  
|                                                     |                                                                            |                                                                               | Depreciation and amortization                              |                                           |  
|                                                     |                                                                            |                                                                               | Amortization of deferred stock compensation                |                                           |  
|                                                     |                                                                            |                                                                               | Extraordinary loss on debt extinguishment                  |                                           |  
|                                                     |                                                                            |                                                                               | Minority interest in earnings of consolidated subsidiaries |                                           |  
|                                                     |                                                                            |                                                                               | Deferred income taxes                                      |                                           |  
|                                                     |                                                                            |                                                                               | Loss (gain) on disposal and impairment of operating assets |                                           |  
|                                                     |                                                                            |                                                                               | Changes in operating assets and liabilities:               |                                           |  
|                                                     |                                                                            |                                                                               |                                                            | Trade and other receivables               |  
|                                                     |                                                                            |                                                                               |                                                            | Inventories                               |  
|                                                     |                                                                            |                                                                               |                                                            | Prepaid expenses and other current assets |  
|                                                     |                                                                            |                                                                               |                                                            | Accounts payable                          |  
|                                                     |                                                                            |                                                                               |                                                            | Accrued expenses and other liabilities    |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES            |                                                                            |                                                                               | 235.1                                                      |                                           |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | Capital expenditures                                                       |                                                                               |                                                            | (60.7                                     | )
|                                                     | Proceeds from disposition of assets                                        |                                                                               |                                                            | 8.0                                       |  
|                                                     | Cash used to purchase outstanding United Artists minority interest         |                                                                               |                                                            | (34.0                                     | )
|                                                     | Decrease in other long term assets                                         |                                                                               |                                                            | 5.2                                       |  
|                                                     | Decrease in reimbursable construction advances                             |                                                                               |                                                            | 0.2                                       |  
|                                                     | Decrease in assets held for sale                                           |                                                                               |                                                            | 0.8                                       |  
|                                                     | Decrease in restricted cash                                                |                                                                               |                                                            | 5.8                                       |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|NET CASH USED IN INVESTING ACTIVITIES                |                                                                            |                                                                               | (74.7                                                      | )                                         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | 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                                    | )
|                                                     | Cash used to payoff United Artists term credit facility                    |                                                                               |                                                            | (240.0                                    | )
|                                                     | Net proceeds from senior subordinated notes offering                       |                                                                               |                                                            | 155.3                                     |  
|                                                     | Net proceeds from initial public offering                                  |                                                                               |                                                            | 314.8                                     |  
|                                                     | Proceeds from stock option exercises                                       |                                                                               |                                                            | 2.0                                       |  
|                                                     | Payment of debt acquisition costs                                          |                                                                               |                                                            | (9.4                                      | )
|                                                     | Payments on long term obligations                                          |                                                                               |                                                            | (47.4                                     | )
|                                                     | Decrease in cash overdraft                                                 |                                                                               |                                                            |                                          |  
|                                                     | Payment of bankruptcy claims and liabilities                               |                                                                               |                                                            | (88.1                                     | )
|                                                     | Cash of Regal Cinemas at acquisition date                                  |                                                                               |                                                            | 166.7                                     |  
|                                                     | Cash of Regal CineMedia at acquisition date                                |                                                                               |                                                            | 0.4                                       |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|NET CASH USED IN FINANCING ACTIVITIES                |                                                                            |                                                                               | (12.3                                                      | )                                         |  
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                            |                                                                               | 148.1                                                      |                                           |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     |                                                                            |                                                                               | 68.1                                                       |                                           |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|CASH AND CASH EQUIVALENTS AT END OF PERIOD           |                                                                            | $                                                                             | 216.2                                                      |                                           | $
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|SUPPLEMENTAL CASH FLOW INFORMATION:                  |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | Cash paid for income taxes                                                 |                                                                               | $                                                          | 13.6                                      |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | Cash paid for interest                                                     |                                                                               | $                                                          | 28.3                                      |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|SUPPLEMENTAL NON-CASH FINANCING ACTIVITIES:          |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | Exchange of minority shares in Regal Cinemas for Regal Entertainment Group |                                                                               | $                                                          | 361.9                                     |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | Exchange of minority shares in Edwards for Regal Entertainment Group       |                                                                               | $                                                          | 44.4                                      |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  
|                                                     | Contribution of additional shares purchased from minority interests        |                                                                               | $                                                          | 80.0                                      |  
|                                                     |                                                                            |                                                                               |                                                            |                                           |  

See accompanying notes to unaudited condensed consolidated financial statements

5

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REGAL ENTERTAINMENT GROUP        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS        SEPTEMBER 26, 2002

1      THE COMPANY AND BASIS OF PRESENTATION

Regal Entertainment Group (the "Company" or "Regal") is the parent company of Regal Cinemas Corporation and its subsidiaries, which include Regal
Cinemas, Inc. and Edwards Theatres, Inc. ("Edwards") (collectively "Regal Cinemas"), United Artists Theatre Company and its subsidiaries ("United Artists") and Regal CineMedia
Corporation and its subsidiaries ("Regal CineMedia"). Regal operates the largest theatre circuit in the United States, consisting of 5,711 screens in 530 theatres in 36 states as of
September 26, 2002. Regal CineMedia focuses on the development of ancillary revenues. The Company formally operates on a 52 week fiscal year with each quarter generally consisting of
13 weeks, unless otherwise noted. The Company's fiscal year ends on the first Thursday after December 25, which in certain years results in a 53 week fiscal year.

During
2000 and 2001, United Artists Theatre Company and a majority of its subsidiaries (the "United Artists Bankrupt Entities"), Edwards and Regal Cinemas, Inc. filed voluntary
petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Courts identified below (the "Applicable Bankruptcy Court"), as well as joint
plans of reorganization. The joint plans of reorganization, as amended, for the United Artists Bankrupt Entities and Edwards were approved by the Applicable Bankruptcy Court, and became effective on
March 2, 2001 ("UA Effective Date") for the United Artists Bankrupt Entities and September 29, 2001 ("Edwards Effective Date") for Edwards. The Applicable Bankruptcy Court approved Regal
Cinemas, Inc.'s joint plan of reorganization in December 2001, which became effective on January 29, 2002. Also on that date, the Anschutz Corporation and its subsidiaries
("Anschutz") and the other shareholders of Regal Cinemas, Inc. exchanged their equity interests in Regal Cinemas, Inc. for equity interests in Regal Cinemas Corporation and as a result,
Regal Cinemas, Inc. became a wholly owned subsidiary of Regal Cinemas
Corporation. Regal Cinemas Corporation was formed for the primary purpose of acquiring and holding the shares of common stock of Regal Cinemas, Inc.

Anschutz
acquired controlling equity interests in United Artists (including the United Artists Bankrupt Entities), Edwards and Regal Cinemas, Inc. upon each of the entities'
emergence from bankruptcy reorganization. Anschutz's contributions of these equity interests to the Company were recorded in the consolidated financial statements of the Company at the combined
historical cost basis of Anschutz, which represents Anschutz's net cost to acquire certain debt of the United Artists Bankrupt Entities, Edwards and Regal Cinemas, Inc. prior to their filing
voluntary petitions for relief under Chapter 11. Anschutz exchanged such debt holdings for controlling equity interests following the emergence from bankruptcy of the United Artists Bankrupt
Entities, Edwards and Regal Cinemas, Inc. As a result of the acquisition by Anschutz, Regal's fiscal 2001 consolidated results of operations include only the results of operations of United
Artists from the UA Effective Date to January 3, 2002, and of Edwards, from the Edwards Effective Date to December 27, 2001. Accordingly, Regal's unaudited condensed consolidated
statements of operations for the quarter and three quarters ended September 27, 2001 do not include the results of operations of Edwards or Regal Cinemas, Inc. and only include the
results of operations of United Artists from the UA Effective Date.

While
the actual date that Regal Cinemas, Inc. emerged from bankruptcy and Anschutz acquired its controlling equity interest in Regal Cinemas was January 29, 2002, for
financial reporting purposes the date is deemed to have occurred on January 24, 2002. As such, the Company's fiscal 2002 results of operations include the results of operations of United
Artists (from January 4, 2002), Edwards (from December 28, 2001), and Regal Cinemas (from January 24, 2002). At January 3, 2002, the Company's investment in Regal
Cinemas, Inc. was accounted for as an investment in the accompanying unaudited condensed consolidated balance sheet.

6

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Commencing
in 2002, the Company elected to adopt the fiscal year end of Regal Cinemas, Inc. Regal Cinemas, Inc.'s 2001 fiscal year ended on December 27, 2001. As a
result of the election to conform the reporting periods, United Artists' results of operations reflected in the accompanying financial statements reflect operating results from January 4, 2002.
For the period from December 28, 2001 through January 3, 2002 (the date of United Artists' fiscal 2001 year end), United Artists recorded revenue of approximately $17.8 million
and net income of approximately $2.5 million.

On
March 5, 2002, Anschutz acquired a controlling equity interest in an insolvent digital video advertising company, Next Generation Network, Inc. ("NGN"), for
approximately $2.8 million in an out-of-court restructuring of NGN's indebtedness. Anschutz funded approximately $7.2 million to NGN through bridge loans and
other consideration. As described below, on April 12, 2002, Anschutz contributed all of its capital stock of NGN, representing approximately 95% of the outstanding capital stock of NGN, and the
outstanding principal balances of such bridge loans and other consideration to Regal CineMedia in exchange for 100,000 shares of capital stock of Regal CineMedia.

On
March 8, 2002, the holders of 100% of the capital stock of Regal Cinemas, Edwards and Regal CineMedia entered into an agreement to exchange their stock for shares of stock in
Regal. Regal also agreed to exchange its stock for approximately 90% of United Artists' outstanding common stock.

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

Upon
the closing of the exchange transaction, the holders of outstanding options of United Artists and Regal Cinemas received replacement options to purchase 8,832,147 shares of Regal
Class A common stock at prices ranging from $4.44 to $12.87 per share. Regal also granted to holders of United Artists warrants in exchange for their contribution to Regal of outstanding
warrants to purchase 3,750,000 shares of United Artists' common stock, warrants to purchase 3,928,185 shares of Class B common stock at $8.88 per share and warrants to purchase 296,129 shares
of Class A common stock at $8.88 per share.

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

Also,
on April 12, 2002, Anschutz contributed all of its capital stock of NGN, representing approximately 95% of the outstanding capital stock of NGN, and the outstanding
principal balances of such bridge loans and other consideration to Regal CineMedia in exchange for 100,000 shares of capital stock of Regal CineMedia, which was then exchanged for the Company's
Class B common stock in the exchange transaction described above.

On
April 17, 2002, Regal Cinemas, Inc. acquired all of the outstanding capital stock of Edwards from Regal Entertainment Holdings, Inc. ("REH"), a wholly owned
subsidiary of the Company, for an aggregate purchase price of approximately $272.5 million. As a result of Regal Cinemas, Inc. being under common control with Edwards, the transaction
was accounted for as a contribution of Edwards

7

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to Regal Cinemas, Inc. by REH, at the historical cost basis of 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 Regal Cinemas, Inc., were used by Regal Cinemas, Inc. to acquire Edwards from REH. REH used the
proceeds from its sale of Edwards to Regal Cinemas, Inc. 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), including accrued interest, primarily held by Anschutz and Oaktree's Principal Activities Group, and to redeem approximately
$75.3 million of redeemable preferred stock of Edwards held by Anschutz, Oaktree's Principal Activities Group and members of the Edwards family. The difference between the carrying amount and
redemption price of the redeemable preferred stock of $28.2 million was recorded as a charge to equity and is reflected as a reduction of net income available to common stockholders in the
accompanying unaudited condensed consolidated statement of operations for the three quarters ended September 26, 2002. In addition, the Company recorded an extraordinary loss of approximately
$1.3 million as a result of the early redemption of the Edwards Subordinated Notes. As a result of Regal Cinemas, Inc.'s acquisition of Edwards, Edwards became a wholly owned subsidiary
of Regal Cinemas, Inc.

In
May 2002, the Company issued 18.0 million shares of its Class A common stock in an initial public offering. The initial public offering was effected through a
Registration Statement on Form S-1 (File No. 333-84096) that was declared effective by the Securities and Exchange Commission on May 8, 2002. All
18.0 million shares were sold at an initial public offering price of $19.00 per share, for an aggregate offering price of $342 million, through a syndicate of underwriters managed by
Credit Suisse First Boston Corporation, Lehman Brothers Inc., Bear, Stearns & Co. Inc. and Salomon Smith Barney Inc.

The
Company paid underwriting discounts and commissions totaling approximately $23.1 million in connection with the offering. In addition, the Company incurred additional expenses
of approximately $4.1 million in connection with the offering. The net offering proceeds, after deducting underwriting discounts, commissions and other offering expenses, were approximately
$314.8 million. No offering expenses were paid directly or indirectly to any of the Company's directors or officers (or their associates) or to persons owning ten percent or more of any class
of the Company's equity securities or to any other affiliates of the Company.

The
Company used a portion of the net proceeds to repay approximately $240.7 million of principal and accrued interest owed by United Artists under the United Artists Term Credit
Facility (as defined below) and approximately $15.0 million to fund operating costs and capital expenditures of Regal CineMedia. Since that time, the Company has used an additional
$34.0 million of the net proceeds to acquire the remaining outstanding shares of common stock and warrants to purchase common stock of United Artists. The Company intends to use the remaining
portion to fund operating costs and capital expenditures of Regal CineMedia, fund the Company's fourth quarter 2002 dividend payment and for general corporate purposes. Pending these uses, since the
time of the offering, the Company has invested the remaining net proceeds in short-term money market and money market equivalent securities.

In
August 2002, REH acquired the remaining outstanding shares of common stock of United Artists held by the United Artists' minority stockholders and warrants to acquire shares of
common stock of United Artists held by various institutional holders for approximately $34.0 million. Immediately prior to
the acquisition, the common stock of United Artists was the only outstanding class of voting stock, of which the minority stockholders owned approximately 9.9%, and REH owned the remaining 90.1%. The
$22.3 million difference between the carrying amount and purchase price of the minority interest was recorded as a component of goodwill in the accompanying unaudited

8

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condensed consolidated balance sheet at September 26, 2002. As a result of this transaction, United Artists became a wholly owned subsidiary of REH.

The
Company, without audit, has prepared the condensed consolidated balance sheet as of September 26, 2002, the condensed consolidated statements of operations for the quarter and
three quarters ended September 26, 2002 and September 27, 2001 and the condensed consolidated statements of cash flows for the three quarters ended September 26, 2002 and
September 27, 2001 in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities
and Exchange Commission. Accordingly, certain information and footnote disclosures typically included in an 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 January 3, 2002 information is derived from the audited January 3, 2002 consolidated financial statements of the Company included in the Company's
prospectus, dated May 8, 2002, filed with the Securities and Exchange Commission in connection with Regal's initial public offering (File No. 333-84096). These unaudited
condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the audited financial statements. The results of
operations for the quarter and three quarters ended September 26, 2002 are not necessarily indicative of the operating results for the full year.

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

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

2      CHAPTER 11 PROCEEDINGS

Prior to and during the reorganization proceedings of United Artists, Edwards and Regal Cinemas, Inc., Anschutz acquired claims of creditors of United
Artists, and Anschutz and Oaktree's Principal Activities Group acquired claims of creditors of Edwards and Regal Cinemas, Inc. that allowed Anschutz to actively negotiate the terms upon which
each company would emerge from reorganization.

The
reorganization proceedings of United Artists, Edwards and Regal Cinemas, Inc. had significant effects on the operations and financial condition of each company. United Artists
and Regal Cinemas
adjusted their assets, liabilities and capital structure to reflect estimated fair values at the time of their emergence from their reorganization proceedings and the acquisition of a controlling
equity interest by Anschutz. In addition, in connection with their reorganizations, each of United Artists, Edwards and Regal Cinemas, Inc. were able to selectively close under-performing
theatres and negotiate rent reductions and lease termination rights, which improved the financial performance of their asset bases.



On August 23, 2000, Edwards Theatre Circuit, Inc. and affiliates 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

9

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senior unsecured subordinated notes (the "Edwards Subordinated Notes"). For a discussion of Edwards related bankruptcy claims and other related party transactions, see
Note 10"Related Party Transactions".

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.



On September 5, 2000, United Artists Theatre Company and the majority of its subsidiaries, including United Artists Theatre Circuit, Inc. and the
majority of its subsidiaries, all as debtors, filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District
of Delaware (the "Delaware Bankruptcy Court"), as well as a joint plan of reorganization. On January 22, 2001, the joint plan of reorganization, as amended (the "UA
Plan"), was approved by the Delaware Bankruptcy Court and declared effective by the debtors on March 2, 2001. As a consequence of the UA Plan, on March 2, 2001, United Artists'
reorganized capital structure consisted of approximately $252.1 million of debt under a restructured bank credit facility (the "United Artists Term Credit Facility"), $57 million of
convertible preferred stock and $39.1 million in common equity. Anschutz converted 100% of its senior debt of United Artists into a combination of convertible preferred stock, common stock and
warrants to purchase common stock (at an exercise price of $10.00 per share) which, in aggregate, represented approximately 54% of the fully diluted common equity of United Artists. Other senior
lenders under United Artists' pre-petition credit facility received common stock in United Artists representing approximately 29% of the fully diluted common equity and subordinated
lenders received warrants to purchase common stock at an exercise price of $10.00 per share, which, in the aggregate, represented approximately 7% of the fully diluted common equity, with the
remaining 10% of the fully diluted common equity reserved for management stock options.

In
addition, a pool of $5.0 million in cash and $1.1 million in payment-in-kind notes was established for distribution on a pro rata basis to
unsecured creditors. The payment-in-kind notes earn "in-kind" interest at 8% with one-third of the principal payable during March 2005,
one-third payable during March 2006 and the remaining one-third, along with all accrued interest, payable during March 2007.

On
the UA Effective Date, United Artists adopted fresh-start reporting in accordance with AICPA Statement of Position 90-7, "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code" ("SOP 90-7"). For accounting purposes, the inception date of the reorganized company was deemed to be March 2, 2001. Under fresh-start reporting, the
reorganization value of United Artists, which represents the fair value of all of the assets (net of liabilities), was determined through negotiations between the United Artists' management and its
pre-petition creditors and was allocated to United Artists' assets based on their relative fair values. Liabilities, other than deferred income taxes, were also stated at their fair
values. Deferred income taxes are determined in accordance with SFAS No. 109, "Accounting for Income Taxes."

10

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



On
December 7, 2001, the Tennessee Bankruptcy Court confirmed the Regal Plan and as a result, Regal Cinemas, Inc. commenced appropriate actions to consummate the Regal Plan
and emerged from bankruptcy on January 29, 2002. Also on January 29, 2002, Regal Cinemas, Inc. became a wholly owned subsidiary of Regal Cinemas Corporation. The transaction was
accomplished by the issuance of 7,500,000 shares of Regal Cinemas Corporation common stock in exchange for 100% of the outstanding common stock of Regal Cinemas, Inc. As a result of this
exchange, Anschutz and Oaktree's Principal Activities Group acquired approximately 75% of the Regal Cinemas Corporation's common stock issued upon emergence.

Approximately
$1.8 billion of Regal Cinemas, Inc. long-term debt plus approximately $196 million of accrued and unpaid interest was discharged under the
terms of the Regal Plan in exchange for total payments of approximately $575.3 million. Regal Cinemas funded these payments through (i) cash on hand, (ii) a term loan
($270.0 million) borrowed under new senior credit facilities, and (iii) the issuance of new senior subordinated notes ($200.0 million).

In
connection with Regal Cinemas, Inc.'s emergence from bankruptcy and acquisition of a controlling interest by Anschutz, Regal Cinemas, Inc. made certain adjustments in
accordance with SOP 90-7 to reflect its emergence from bankruptcy and simultaneously allocated Anschutz's predecessor cost basis to Regal Cinemas, Inc.'s assets and
liabilities. The impact of these adjustments resulted in a $511.1 million write-down of Regal Cinemas, Inc.'s assets.

3      INTEGRATIONS

During the first quarter of 2002, the Company commenced a plan to restructure certain of its operations to facilitate the integration of Regal Cinemas, United
Artists and Edwards. The restructuring principally involved the closing of certain Edwards and United Artists corporate facilities
and relocation of the theatre management operations of United Artists and Edwards to Regal Cinemas' offices in Knoxville, Tennessee. The restructuring plan was communicated by Company management to
Edwards and United Artists corporate employees during the first quarter of 2002. Such restructuring did not result in any theatre closings.

With
respect to the Edwards restructuring plan, the Company terminated 78 corporate employees located in the Edwards Newport Beach, California corporate offices. Of the total Edwards
restructuring charge of $3.1 million for the three quarters ended September 26, 2002, approximately $1.1 million

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related to employee termination benefits and approximately $2.0 million related to other direct exit costs (principally lease termination fees) associated with the closing of Edwards'
corporate offices. The United Artists restructuring plan provided for the termination of 102 administrative employees located in the Centennial, Colorado corporate offices along with closure of a film
office located in New York City. Total United Artists restructuring charges were $2.7 million for the three quarters ended September 26, 2002, of which approximately $2.0 million
related to employee termination benefits and approximately $0.7 million related to direct exit costs for the closure of the New York City film office and certain legal and professional fees.

Such
costs are included in "Operating ExpensesMerger and restructuring expenses" in the accompanying unaudited condensed consolidated statements of operations for the
quarter and three quarters ended September 26, 2002. As of September 26, 2002, the Company has paid approximately $1.6 million and $1.8 million of Edwards and United
Artists restructuring expenses, respectively. The Company completed the Edwards and United Artists integration during the second quarter of 2002.

4      PRO FORMA RESULTS OF OPERATONS

On a pro forma basis, assuming (i) a full three quarters of post-bankruptcy operating results for Regal Cinemas, United Artists and Edwards,
(ii) the contribution by Anschutz and the exchange by several minority shareholders of their equity interests in United Artists, Edwards, Regal Cinemas, and Regal CineMedia for shares of the
Company, (iii) the issuance of $150 million of 93/8% senior subordinated notes, (iv) the repayment of Edwards indebtedness and the effects of the Company's initial
public offering, total revenues and net income would have been $571.5 million and $37.3 million and $1,720.0 million and $118.5 million for the quarter and three quarters
ended September 26, 2002, respectively, and $553.8 million and $33.9 million and $1,512.9 million and $41.7 million for the quarter and three quarters ended
September 27, 2001, respectively.

5      BANKRUPTCY RELATED CLAIMS

Regal Cinemas and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At September 26,
2002, approximately $33.3 million of remaining
claims related to Regal Cinemas' and Edwards' bankruptcy proceedings are recorded in the Company's unaudited condensed consolidated balance sheet as "Bankruptcy Claims and Liabilities". In the opinion
of management, based on its examination of these matters, its experience to date and discussions with legal counsel, the outcome of these legal matters, after taking into consideration the amounts
already accrued, is not expected to have a material effect on the Company's financial position, results of operations or cash flows. The timing of the payment of these claims will depend upon the
resolution of these claims.

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6      LONG-TERM OBLIGATIONS

Long-term obligations at September 26, 2002 and January 3, 2002, consist of the following:

September 26,
2002

January 3,
2002(In millions)Regal Cinemas Senior Credit Facility

$
225.0

$
Regal Cinemas 93/8% Senior Subordinated Notes


350.0


United Artists Term Credit Facility





240.6Edwards Senior Secured Term Loan





180.0Edwards Subordinated Notes to Shareholders





10.3Lease financing arrangements, 11.5%, maturing in various installments through 2021


98.3


Capital lease obligations


4.1


2.7Other


7.3


5.3United Artists Revolving Credit Facility





Total long-term obligations


684.7


438.9Less current maturities


(19.7
)

(15.6
)Total long-term obligations, net

$
665.0

$
423.3


Regal Cinemas Senior Credit FacilityRegal Cinemas entered into an amended and restated senior credit
agreement with several financial institutions including Lehman Brothers, Inc., Credit Suisse First Boston Corporation, General Electric Capital Corporation and Lehman Commercial
Paper, Inc., on August 12, 2002, amending its existing senior credit agreement to increase the amount available for borrowing under the senior secured revolving credit facility from
$100 million to $145 million and to decrease the amount of the senior secured term loan from $270 million to $225 million. Under the amended and restated senior credit
agreement, the lenders advanced Regal Cinemas $225.0 million through a senior secured term loan, which was used, together with cash on hand at Regal Cinemas, Inc., to repay in full its
existing $270.0 million term loan. The amended and restated senior credit agreement also made available, subject to the satisfaction of conditions customary for extensions of credit of this
type, an additional $145.0 million through a senior secured revolving credit facility. The $225.0 million term loan will amortize at a rate of 5% per annum until December 31,
2006, with the remaining 75% due in four installments ending on December 31, 2007. The senior secured revolving credit facility became available on August 12, 2002 and will be available
until January 29, 2007. Regal Cinemas also maintains a letter of credit for $15.0 million related to its general unsecured claims as of September 26, 2002, which reduces the
availability under its senior secured revolving credit facility to $130.0 million. As of September 26, 2002, there were no amounts outstanding on the senior secured revolving credit
facility.

Borrowings
under the term facility bear interest, at Regal Cinemas' option, at either the base rate or Eurodollar rate plus, in each case, an applicable margin, subject to adjustment
based upon the consolidated total leverage ratio of Regal Cinemas. The base rate is a fluctuating interest rate equal to the higher of (a) the British Banking Association's prime rate or
(b) the Federal Funds Effective Rate plus 0.5%. At September 26, 2002, interest on the senior credit facility was approximately 4.6%.

Regal
Cinemas may prepay borrowings under the amended and restated senior credit facility in whole or in part, in minimum amounts and subject to other conditions set forth in the amended
and restated senior credit agreement. Regal Cinemas is required to make mandatory prepayments to the lenders from the net cash proceeds from asset sales and new debt issuances, in particular
circumstances specified in the amended and restated senior credit agreement.

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

The
amended and restated senior credit agreement includes various financial covenants such as certain leverage and coverage ratios. The amended and restated senior credit agreement also
contains customary covenants, including limitations on Regal Cinemas' ability to incur debt, and events of default, including a change of control, as defined in the amended and restated senior credit
agreement. The amended and restated senior credit agreement also limits Regal Cinemas' ability to pay dividends, to make advances and otherwise to engage in intercompany transactions.

Regal Cinemas Senior Subordinated NotesOn January 29, 2002, Regal Cinemas issued
$200.0 million aggregate principal amount of 93/8% senior subordinated notes due 2012. Interest on the notes is payable semi-annually on February 1 and
August 1 of each year, and the notes mature on February 1, 2012. The notes are guaranteed by most of Regal Cinemas' existing subsidiaries and are unsecured, ranking behind Regal Cinemas'
obligations under its senior credit facility and any future senior indebtedness.

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

On
April 17, 2002, Regal Cinemas sold an additional $150 million principal amount of 93/8% senior subordinated notes due 2012, which were issued under the
indenture pursuant to which Regal Cinemas sold in January 2002 the $200 million principal amount of 93/8% senior subordinated notes due 2012.

United Artists Term Credit FacilityAs described in Note 1"The Company and Basis
of Presentation," the United Artists Term Credit Facility was repaid in connection with Regal's May 2002 initial public offering. The Company recorded an extraordinary loss of approximately
$1.4 million as a result of the early redemption of the United Artists Term Credit Facility.

United Artists Revolving Credit FacilityThe $35.0 million United Artists Revolving Credit
Facility (the "UA Revolver") was terminated during the third quarter ended September 26, 2002.

Edwards Senior Term Loan and Subordinated NotesAs described above, on April 17, 2002, Regal
Cinemas sold $150 million principal amount of 93/8% senior subordinated notes due 2012. The proceeds of the notes, together with cash on hand at Regal Cinemas, Inc., were
used to purchase Edwards from REH, which used the proceeds from the sale of Edwards to Regal Cinemas, Inc. to repay the Edwards term
loan and Subordinated Notes. The Company recorded an extraordinary loss of approximately $1.3 million as a result of the early redemption of the Edwards Subordinated Notes.

Lease Financing ArrangementsThese obligations primarily represent capitalized lease obligations
resulting from the requirements of Emerging Issues Task Force No. 97-10,The Effect of Lessee Involvement in Asset Construction,released in fiscal 1998.

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7      INCOME TAXES

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. 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.

During
the quarter ended September 27, 2001, the Company recorded a $6.1 million 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 2001 is 1.6%. The provision for income taxes of $23.8 million and $68.6 million for the
quarter and three quarters ended September 26, 2002 reflect effective tax rates of approximately 39.7% and 44.1%, respectively. Excluding the effects of minority interest in earnings of
consolidated subsidiaries recorded in the accompanying statements of operations for the quarter and three quarters ended September 26, 2002, the Company's effective tax rates were approximately
38.2% and 40.3%, respectively.

8      MANDATORY REDEEMABLE PREFERRED STOCK

Prior to April 17, 2002, Edwards had authorized and issued 56,000 shares (44,000 shares to Anschutz and 12,000 shares to Oaktree's Principal Activities
Group) of $0.001 par value, mandatory redeemable Series A preferred stock and 15,000 shares of Edwards' mandatory redeemable Series B preferred stock, $0.001 par value, to three other
shareholders.

As
described in Note 1"The Company and Basis of Presentation" and Note 10"Related Party Transactions," on April 17, 2002, the Company
redeemed approximately $75.3 million or 100% of the mandatory redeemable Series A and Series B preferred stock of Edwards that was held by Anschutz,
Oaktree's Principal Activities Group and members of the Edwards family. The difference between the carrying amount and redemption price of $28.2 million was recorded as a charge to equity and
is reflected as a reduction of net income available to common stockholders in the accompanying unaudited condensed consolidated statement of operations for the three quarters ended
September 26, 2002.

9      CONTINGENCIES

Regal Cinemas, Inc., Edwards and United Artists are defendants in a number of claims arising from their decision to file voluntary petitions for relief
under Chapter 11 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.

10    RELATED PARTY TRANSACTIONS

Edwards Bankruptcy Claims

Under the Edwards Plan, Anschutz and Oaktree's Principal Activities Group have agreed to contribute to Edwards $0.90 for each $1.00 of allowed general unsecured
claims in excess of $55.0 million, up to $13.5 million. For each $900 contributed, Anschutz and Oaktree's Principal

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Activities Group will receive $1,044, up to a maximum of $15,663,333, from Ms. Carole Ann Ruoff and Ms. Joan Edwards Randolph, both former stockholders of Edwards, and from Edwards
Affiliated Holdings, LLC, a company controlled by Mr. W. James Edwards, another former stockholder of Edwards. Regal will also acquire up to 331,451 shares of its Class A
common stock from Edwards Affiliated Holdings, LLC, based on the dollar amount contributed by Anschutz and Oaktree's Principal Activities Group. Anschutz and Oaktree's Principal Activities
Group will, in turn, receive the same number of shares from Regal, and will also receive from Ms. Ruoff and Ms. Randolph an aggregate of up to $7,384,469 in cash, in each instance based
on the amount contributed and allocated between Anschutz and Oaktree's Principal Activities Group in relation to their respective contributions.

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

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

In connection with the formation of Regal, Edwards issued 135,000 shares of its Class A common stock to the holders of Edwards' Series A preferred
stock and 115,000 shares of its Class B common stock to the holders of Edwards' Series B preferred stock in consideration for the elimination of voting rights on such preferred stock.

On
April 17, 2002, Regal used a portion of the proceeds from REH's sale of Edwards to Regal Cinemas, Inc. to cause Edwards to redeem its Series A and Series B
preferred stock. Anschutz received $47.8 million and Oaktree's Principal Activities Group received $11.9 million in the redemption of Edwards' Series A preferred stock held by
them. Edwards Affiliated Holdings, LLC, Ms. Ruoff and Ms. Randolph received an aggregate of $15.7 million in the redemption of the Edwards' Series B preferred stock
held by them.

Payment of Edwards' Subordinated Notes

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

Guaranties of Certain Edwards' Lease Obligations

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

16

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guaranty from Regal, substantially in the form of the Guaranty, for the benefit of Starwood Wasserman Fresno LLC.

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

Bridge Facility

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

Other Transactions

During the three quarters ended September 26, 2002, as members of the class of holders of Regal Cinemas, Inc.'s former senior credit facilities,
Anschutz, Oaktree's Principal Activities Group and Greenwich Street Capital Partners ("GSCP"), received $33.6 million, $5.6 million and $6.0 million, respectively, in respect of
accrued but unpaid interest. As members of the class of holders of Regal Cinemas Inc.'s subordinated debt, Anschutz received cash payments of approximately $129.5 million, Oaktree's
Principal Activities Group received cash payments of approximately $29.7 million and GSCP received cash payments of approximately $5.5 million in satisfaction of these claims, which
payments equaled approximately 20% of the principal amount of subordinated debt held by them. Anschutz received cash payments of approximately $3.2 million, Oaktree's Principal Activities Group
received cash payments of approximately $800,000 from Regal and GSCP received cash payments from Regal Cinemas, Inc. of approximately $50,000 in respect of certain expenses incurred in
connection with Regal Cinemas' restructuring. In addition, Regal paid GSCP $1.0 million for restructuring services.

During
the three quarters ended September 26, 2002, Regal CineMedia incurred approximately $56,000 of expenses payable to certain Anschutz affiliates for reimbursement of travel
and marketing expenses. Additionally, Regal CineMedia has recorded a $311,000 receivable from certain affiliates of Anschutz and Oaktree's Principal Activities Group related to marketing and business
meeting services provided by Regal CineMedia to these affiliates.

11    EARNINGS PER SHARE

Basic earnings per share is computed on the basis of the weighted average number of the common shares outstanding. Diluted earnings per share is computed on the
basis of the weighted average number of common shares outstanding plus the effect of potentially dilutive common stock options and

17

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warrants. The components of basic and diluted earnings per share are as follows (in millions, except share data):

|                                                    |                                       | Quarter Ended |       | Three Quarters Ended |  
|--------------------------------------------------- | ------------------------------------- | ------------- | ----- | -------------------- | -
|
|Net income (loss)                                   |                                       | $             | 36.1  |                      | $
|Less:                                               |                                       |               |       |                      |  
|                                                    | Loss on redemption of preferred stock |               |       |                     |  
|                                                    |                                       |               |       |                      |  
|Net income (loss) available to common stockholders  |                                       | $             | 36.1  |                      | $
|Weighted average shares outstanding (in thousands): |                                       |               |       |                      |  
|                                                    | Basic:                                |               |       | 130,951              |  
|Add common stock equivalents                        |                                       |               | 5,251 |                      |  
|                                                    |                                       |               |       |                      |  
|                                                    | Diluted:                              |               |       | 136,202              |  
|Earnings (loss) per share                           |                                       |               |       |                      |  
|                                                    | Basic:                                |               | $     | 0.28                 |  
|                                                    | Diluted:                              |               | $     | 0.27                 |  

Common
stock equivalents consist principally of stock options, stock purchase warrants and preferred stock. Stock options and warrants to purchase 1,176,589 shares of common stock for
the three quarters ended September 27, 2001 were not included in the computation of diluted earnings per share because their inclusion would have been antidilutive.

12    RECENT ACCOUNTING PRONOUNCEMENTS

In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 supersedes Accounting Principles Board Opinion No. 16 (APB 16), "Business
Combinations," and primarily addresses the accounting for the cost of an acquired business (i.e., the purchase price allocation), including any subsequent adjustment to its cost. SFAS No. 142
primarily addresses the accounting for goodwill and intangible asset subsequent to their acquisition (i.e., the post-acquisition accounting) and supersedes APB 17, "Intangible
Assets." The most significant changes made by SFAS No. 141 involve the requirement to use the purchase method of accounting for all business combinations, thereby eliminating use of the
pooling-of-interests method along with the establishment of new criteria for determining whether the Company should recognize intangible assets acquired in a business
combination separately from goodwill. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001. The adoption of SFAS No. 141 did not have a material
impact on the Company's financial position or results of operations.

Under
SFAS No. 142, the Company can no longer amortize goodwill, reorganizational value in excess of amounts allocated to identifiable assets or indefinite lived intangible
assets, and will test for impairment
at least annually at the reporting unit level. Additionally, the amortization period of intangible assets with finite lives is no longer limited to 40 years. Other long-lived assets
will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed
Of," and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," issued in August 2001. SFAS No. 142 is effective for fiscal years beginning
after December 15, 2001 for all goodwill and other intangible assets, including excess reorganization value, recognized in an entity's statement of financial position at that date, regardless
of when those assets were initially recognized. As required by SFAS No. 142, the standard has not been retroactively applied to the results for the period prior to adoption.

18

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Amortization relating to goodwill and excess reorganization value was $2.8 million and $6.8 million for the quarter and three quarters ended September 27, 2001. The Company's
goodwill transitional impairment test indicates that the fair value of the reporting unit exceeds the goodwill carrying value and therefore, at this time, goodwill is not deemed to be impaired. The
Company will conduct its annual valuation in the fourth quarter of 2002.

In
June 2001, the FASB issued 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. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002. The Company is evaluating the impact of the adoption of this standard and has not yet determined the effect of adoption on its financial position and
results of operations.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which provides clarifications of certain
implementation issues with SFAS No. 121 along with additional guidance on the accounting for the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS
No. 121 and applies to all long-lived assets (including discontinued operations) and consequently amends APB 30, "Reporting the Effects of Disposal of a Segment of a
Business." SFAS No. 144 develops one accounting model (based on the model in SFAS No. 121) for long-lived assets that are to be disposed of by sale, as well as addresses the
principal implementation issues. SFAS No. 144 requires that entities measure long-lived assets that are to be disposed of by sale at the lower of book value or fair value less cost
to sell. That requirement eliminates APB 30's requirement that discontinued operations be measured at net realizable value or that entities include under "discontinued operations" in the
financial statements amounts for operating losses that have not yet occurred. Additionally, SFAS No. 144 expands the scope of discontinued operations to include all components of an entity with
operations that (1) the entity can distinguish from the rest of the entity and (2) the entity will eliminate from the ongoing operations of the entity in a disposal transaction.

The
Company adopted SFAS No. 144 in the first quarter of 2002. The adoption of SFAS No. 144 did not have a material impact on the Company's financial position and 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. The provisions of SFAS No. 145 related to the rescission of Statement 4 is effective for fiscal years beginning after May 15, 2002.

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

In
July 2001, the American Institute of Certified Public Accountants issued Emerging Issues Task Force Topic No. D-98, which requires that equity securities,
with redemption features that are not

19

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solely within the control of the issuer, be classified outside permanent equity. This guidance was effective for the Company's fourth quarter of 2001 and is to be applied retroactively. The adoption
of this guidance did not have a material impact on the Company's financial position or results of operations.

13    SUBSEQUENT EVENTS

On October 21, 2002, the Company's board of directors declared a cash dividend of $0.15 per share on each share of the Company's Class A and
Class B common stock, payable on December 13, 2002, to stockholders of record on November 26, 2002.

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

The information in this Form 10-Q includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this Form 10-Q,
including, without limitation, certain statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" may constitute forward-looking statements. These
forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these statements as a result of certain risk factors as more fully
discussed below and under the heading "Risk Factors" contained in our final prospectus dated May 8, 2002 related to our initial public offering. Although the Company believes that the
expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. The following analysis of our financial condition
and results of operations should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and Notes thereto included herein.



We are the largest domestic motion picture exhibitor with 5,711 screens in 530 theatres in 36 states as of September 26, 2002. We conduct our operations
primarily through our wholly owned subsidiaries, Regal Cinemas, United Artists, Edwards and Regal CineMedia.

Regal
was created through a series of transactions during 2001 and 2002. Anschutz acquired controlling equity interests in United Artists and Edwards upon United Artists' emergence from
bankruptcy reorganization on March 2, 2001 and Edwards' emergence from bankruptcy reorganization on September 29, 2001. On January 29, 2002, Anschutz acquired a controlling equity
interest in Regal Cinemas, Inc. when Regal Cinemas, Inc. and its subsidiaries emerged from bankruptcy reorganization. Anschutz exchanged its controlling equity interest in Regal
Cinemas, Inc. for a controlling equity interest in Regal Cinemas immediately thereafter. Regal Cinemas, Inc. is a wholly owned subsidiary of Regal Cinemas. In addition, Regal CineMedia
was formed in February 2002 to focus on the development of ancillary revenues and became our wholly owned subsidiary on April 12, 2002. On
April 17, 2002, Regal Cinemas, Inc. acquired all of the outstanding capital stock of Edwards and as a result, Edwards became a wholly owned subsidiary of Regal Cinemas, Inc.

The
Company's financial statements reflect the results of operations from the dates Anschutz acquired its controlling equity interests in United Artists, Edwards and Regal Cinemas. These
controlling equity interests have been recorded in the Company's financial statements at Anschutz's combined historical cost basis. Accordingly, the Company's financial statements for the quarter and
three quarters ended September 27, 2001 reflect only the results of operations of United Artists from the UA Effective Date. The Company's results of operations for the three quarters ended
September 26, 2002 include the results of operations of United Artists (from January 4, 2002), Edwards (from December 28, 2001), and Regal Cinemas (from January 24, 2002).



Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which require management to
make estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet as well as the
reported amounts of revenues and expenses during the reporting period. We routinely make estimates and judgments about the carrying value of our assets and liabilities that are not readily apparent
from other sources. Such estimates and

21

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judgments are evaluated and modified as necessary on an ongoing basis. We believe that the following significant accounting policies may involve a higher degree of judgment and complexity:



The Company generates revenues primarily from admissions and concession sales. Additional revenues are generated by electronic video games located adjacent to the
lobbies of certain of the Company's theatres, vendor marketing programs and on screen advertisements and rental of theatres for business meetings and other events by Regal CineMedia. Direct theatre
costs consist of film rental and advertising costs, costs of concessions and theatre operating expenses. 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. Theatre operating expenses consist primarily of theatre labor
and occupancy costs.

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The following table sets forth the percentage of total revenues represented by certain items included in the Company's unaudited condensed consolidated statements
of operations for the quarters and three quarters ended September 26, 2002 and September 27, 2001.

|                         |                                                               | Quarter ended
September 26,
2002 |      | Quarter ended
September 27,
2001 |      | Three Quarters ended
September 26,
2002 |      | Three Quarters ended
September 27,
2001 |     
|------------------------ | ------------------------------------------------------------- | -------------------------------- | ---- | -------------------------------- | ---- | --------------------------------------- | ---- | --------------------------------------- | ----
|Revenues:                |                                                               |                                  |      |                                  |      |                                         |      |                                         |     
|                         | Admissions                                                    |                                  | 67.7 | %                                | 69.3 | %                                       | 67.9 | %                                       | 68.6
|                         | Concessions                                                   |                                  | 27.7 |                                  | 27.3 |                                         | 27.9 |                                         | 27.8
|                         | Other operating revenues                                      |                                  | 4.6  |                                  | 3.4  |                                         | 4.2  |                                         | 3.6 
|                         |                                                               |                                  |      |                                  |      |                                         |      |                                         |     
|Total operating revenues |                                                               | 100.0                            |      | 100.0                            |      | 100.0                                   |      | 100.0                                   |     
|Direct theatre costs:    |                                                               |                                  |      |                                  |      |                                         |      |                                         |     
|                         | Film rental and advertising costs(1)                          |                                  | 53.5 |                                  | 57.8 |                                         | 54.1 |                                         | 55.7
|                         | Cost of concessions(2)                                        |                                  | 14.1 |                                  | 11.3 |                                         | 14.4 |                                         | 11.3
|                         | Other theatre operating expenses(3)                           |                                  | 36.1 |                                  | 38.9 |                                         | 35.0 |                                         | 42.6
|                         | General and administrative expenses(3)                        |                                  | 2.9  |                                  | 3.1  |                                         | 3.2  |                                         | 3.5 
|                         |                                                               |                                  |      |                                  |      |                                         |      |                                         |     
|Sub-total(3)             |                                                               | 79.1                             |      | 85.2                             |      | 78.9                                    |      | 87.5                                    |     
|                         | Depreciation and amortization(3)                              |                                  | 6.2  |                                  | 6.7  |                                         | 6.2  |                                         | 7.9 
|                         | Merger and restructuring expenses(3)                          |                                  | 0.6  |                                  | 0.2  |                                         | 1.1  |                                         | 0.1 
|                         | Loss (gain) on disposal and impairment of operating assets(3) |                                  | 0.6  |                                  | (0.3 | )                                       | 0.2  |                                         | (0.2
|                         |                                                               |                                  |      |                                  |      |                                         |      |                                         |     
|                         |                                                               | Total operating expenses(3)      |      | 86.5                             |      | 91.8                                    |      | 86.4                                    |     
|                         |                                                               |                                  |      |                                  |      |                                         |      |                                         |     
|Operating income(3)      |                                                               | 13.5                             | %    | 8.2                              | %    | 13.6                                    | %    | 4.7                                     | %   
|                         |                                                               |                                  |      |                                  |      |                                         |      |                                         |     

---

Total
revenues, operating income and net income for the quarter ended September 26, 2002 were $571.5 million, $77.3 million and $36.1 million compared to
$158.7 million, $13.0 million, and $6.1 million for the quarter ended September 27, 2001. Total revenues, operating income and net income (loss) for the three quarters
ended September 26, 2002 were $1,593.8 million, $217.1 million and $85.5 million compared to $316.6 million, $14.8 million, and ($2.0 million) for the
three quarters ended September 27,
2001. The Company believes its historical results are not indicative of its current operations, and, as a result, has not provided an in-depth comparison of the quarter and three quarters
ended September 26, 2002 results versus those for the quarter and three quarters ended September 27, 2001 because (i) its historical results do not reflect the results of
operations for Regal Cinemas or Edwards for the quarter and three quarters ended September 27, 2001 and these results are significant to the Company, (ii) its historical results do not
include a full three quarters of operating results for Regal Cinemas or United Artists for the three quarters ended September 26, 2002, and (iii) the Company's capital structure has
changed significantly subsequent to the quarter ended September 27, 2001. Therefore, the Company does not believe an in-depth period-to-period comparison of
these results would be useful in understanding its current operations.

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EBITDA

EBITDA (income from operations before depreciation and amortization expense, merger and restructuring expenses, and gain/loss on disposal and impairment of
operating assets) was approximately $119.4 million, or 20.9% of total revenues, for the quarter ended September 26, 2002 and was $23.5 million, or 14.8% of total revenues, for the
quarter ended September 27, 2001. EBITDA was approximately $335.5 million, or 21.1% of total revenues, for the three quarters ended September 26, 2002 and was $39.6 million
or 12.5% of total revenues, for the three quarters ended September 27, 2001.

EBITDA
is not a measurement of financial performance under accounting principles generally accepted in the United States of America and should not be considered in isolation or construed
as a substitute for net income or other operations data or cash flow data prepared in accordance with accounting principles generally accepted in the United States of America for purposes of analyzing
our profitability or liquidity. In addition, not all funds depicted by EBITDA are available for management's discretionary use. For example, a portion of such funds are subject to contractual
restrictions and functional requirements to pay debt service, fund necessary capital expenditures and meet other commitments from time to time as described in more detail in the Company's prospectus
dated May 8, 2002. EBITDA, as calculated, may not be comparable to similarly titled measures reported by other companies.



Cash flows generated from operating activities were approximately $235.1 million the three quarters ended September 26, 2002 compared to
approximately $5.3 million for the comparable period in 2001. The increase was attributable to the inclusion of Edwards, Regal Cinemas and thirty-eight weeks of United Artists in 2002 and to
increases in net income and non cash items and changes in working capital items. Capital expenditures were $60.7 million for the three quarters ended September 26, 2002 compared to
$5.8 million for the comparable period of 2001. The increase is primarily due to the
inclusion of Edwards, Regal Cinemas and thirty-eight weeks of United Artists in 2002. In addition, Regal Cinemas, Inc. had $166.7 million of cash on the date Anschutz acquired a
controlling equity interest therein.



The Company conducts its operations through its subsidiaries: Regal Cinemas, United Artists, Edwards and Regal CineMedia. The Company was formed in the first
quarter of 2002 and 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 and proceeds from the Company's May 2002 initial public offering. 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 Regal Cinemas senior credit facilities.

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 revenues are primarily cash transactions from admissions and concessions. The Company's current liabilities, however,
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.

24

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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 and upgrading the Company's theatre
facilities. The Company intends to continue to grow its theatre circuit through selective expansion and acquisition opportunities. The Company anticipates that capital expenditures related to its
theatre circuit will be approximately $75.0 million in 2002. The Company has commitments to build two new theatres and expects to add 6 screens to existing theatres in 2002. The Company
currently expects capital expenditures for theatre development, expansion, upgrading, and maintenance to approximate $90 million to $100 million in 2003. In addition to capital
expenditures associated with its theatre operations, the Company expects to have capital expenditures of approximately $30 million in connection with Regal CineMedia during 2002 and
approximately $35 million in 2003. The Company anticipates a significant portion of these capital expenditures to be made in connection with the development and deployment of a digital
projection network to provide advertising and promotional services. During the three quarters ended September 26, 2002, the Company invested $60.7 million in capital expenditures.

On
October 21, 2002, the Company's board of directors declared a cash dividend of $0.15 per share on each share of the Company's Class A and Class B common stock,
payable on December 13, 2002, to stockholders of record on November 26, 2002. The Company, at the discretion of the board of directors and subject to applicable law, anticipates paying
regular quarterly dividends on its Class A and Class B common stock for the foreseeable future. The amount, if any, of the dividends to be paid in the future will depend upon the
Company's then available cash, anticipated cash needs, overall financial condition, loan agreement restrictions, future prospects for earnings and cash flows, as well as other relevant factors.

As
of September 26, 2002, Regal Cinemas had $145 million committed under its undrawn senior revolving credit facility, $225 million outstanding under its senior
secured term loan and $350 million principal amount of 93/8% senior subordinated notes due 2012. Regal Cinemas also maintains letter of credit availability of $15 million
as of September 26, 2002, which reduces the availability under its senior revolving credit facility to $130 million.

In
May 2002, the Company issued 18.0 million shares of its Class A common stock in an initial public offering. The initial public offering was effected through a
Registration Statement on Form S-1 (File No. 333-84096) that was declared effective by the Securities and Exchange Commission on May 8, 2002. All
18.0 million shares were sold at an initial public offering price of $19.00 per share, for an aggregate offering price of $342 million, through a syndicate of underwriters managed by
Credit Suisse First Boston Corporation, Lehman Brothers Inc., Bear, Stearns & Co. Inc. and Salomon Smith Barney Inc.

The
Company paid to the underwriters underwriting discounts and commissions totaling approximately $23.1 million in connection with the offering. In addition, the Company has
incurred additional expenses of approximately $4.1 million in connection with the offering. The net offering proceeds, after deducting underwriting discounts, commissions and other offering
expenses, were approximately $314.8 million. No offering expenses were paid directly or indirectly to any of the Company's directors or officers (or their associates) or persons owning ten
percent or more of any class of equity securities or to any other affiliates.

The
Company used a portion of the net proceeds to repay approximately $240.7 million of principal and accrued interest owed by United Artists under its term credit agreement (see
Note 6"Long-Term Obligations" to the accompanying mandated condensed consolidated financial statements) and approximately $15.0 million to fund operations and
capital expenditures of Regal CineMedia. Since that time, the Company has used an additional $34.0 million of the net proceeds to purchase the remaining outstanding shares of capital stock of
United Artists held by United Artists' minority

25

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shareholders. The Company intends to use the remaining proceeds to further fund Regal CineMedia, fund the Company's fourth quarter 2002 dividend payment and for general corporate purposes. The
Company may also use a portion of the net proceeds for the acquisition of businesses, products and technologies. Pending these uses, since the time of the offering, the Company has invested the
remaining net proceeds in short-term money market and money market equivalent securities.



The Company primarily leases its theatres pursuant to long-term non-cancelable operating leases. As of September 26, 2002, the
Company's estimated contractual cash obligations and commercial commitments over the next several years are as follows (in millions):

|                             |                                    | Payments Due by Period
|---------------------------- | ---------------------------------- | ----------------------
|
|Contractual Cash Obligations |                                    |                       
|                             | Long-term debt                     |                       
|                             | Capital lease obligations          |                       
|                             | Lease financing arrangements       |                       
|                             | General unsecured creditors        |                       
|                             | Other long term obligations        |                       
|                             | Operating leases                   |                       
|                             |                                    |                       
|                             | Total contractual cash obligations |                       
|                             |                                    |                       
|
|
|Other Commercial Commitments |                                    |                       
|                             | Lines of credit                    |                       
|                             |                                    |                       
|Total commercial commitments |                                    | $                     
|                             |                                    |                       

The
Company believes that the amount of cash and cash equivalents on hand, cash flow expected from operations, availability under its revolving credit facilities and proceeds from the
May 2002 initial public offering 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.

The
following is a description of material indebtedness of the Company as of September 26, 2002:



Regal Cinemas entered into an amended and restated senior credit agreement with several financial institutions including Lehman Brothers, Inc., Credit
Suisse First Boston Corporation, General Electric Capital Corporation and Lehman Commercial Paper, Inc., on August 12, 2002, amending its existing senior credit agreement to increase the
amount available for borrowing under the senior secured revolving credit facility from $100 million to $145 million and to decrease the amount of the senior secured term loan from
$270 million to $225 million. Under the amended and restated senior credit agreement, the lenders advanced Regal Cinemas $225.0 million through a senior secured term loan, which
was used, together with cash on hand at Regal Cinemas, Inc., to repay in full its existing $270.0 million term loan. The amended and restated senior credit agreement also made available,
subject to the satisfaction of conditions customary for extensions of credit of this type, an additional $145.0 million through a senior secured revolving credit facility. The
$225.0 million term loan will

26

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amortize at a rate of 5% per annum until December 31, 2006, with the remaining 75% due in four installments ending on December 31, 2007. The senior secured revolving credit facility
became available on August 12, 2002 and will be available until January 29, 2007. Regal Cinemas also maintains a letter of credit for $15.0 million related to its general
unsecured claims as of September 26, 2002, which reduces the availability under its senior secured revolving credit facility to $130.0 million. As of September 26, 2002, there
were no amounts outstanding on the senior secured revolving credit facility.

Borrowings
under the term credit facility bear interest, at Regal Cinemas' option, at either the base rate or Eurodollar rate plus, in each case, an applicable margin, subject to
adjustment based upon the consolidated total leverage ratio of Regal Cinemas. The base rate is a fluctuating interest rate equal to the higher of (a) the British Banking Association's prime
rate or (b) the Federal Funds Effective Rate plus 0.5%. At September 26, 2002, interest on the senior credit facility was approximately 4.6%.

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



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

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

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



The
amended and restated senior credit agreement also contains customary covenants, including limitations on Regal Cinemas' ability to incur debt, and events of default, including a
change of control,

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as defined in the amended and restated senior credit agreement. The amended and restated senior credit agreement also limits Regal Cinemas' ability to pay dividends, to make advances to the Company
or its other subsidiaries and otherwise to engage in intercompany transactions. These limitations will restrict its ability to fund operations outside of Regal Cinemas with funds generated at Regal
Cinemas.



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

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

In
May 2002, Regal Cinemas filed a registration statement (Registration No. 333-87930) under the Securities Act of 1933 pursuant to a registration rights
agreement entered into in connection with the 93/8% senior subordinated notes offerings. The registration statement was declared effective by the Securities and Exchange Commission on
July 10, 2002, enabling the eligible holders of the notes to exchange their notes for notes registered under the Securities Act of 1933. The transaction described in the registration statement,
pursuant to which all of the note holders exchanged their notes for registered notes, closed on August 14, 2002. Regal Cinemas did not receive any proceeds from the transaction.



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

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



In December 1995, United Artists Theatre Circuit ("UATC") entered into a sale and leaseback transaction whereby the land and buildings underlying 27 of its
operating theatres and four theatres and a screen addition under development were sold to and leased back from an unaffiliated third party. The transaction requires UATC to lease the underlying
theatres for a period of 21 years and one month, with the option to extend for up to an additional 10 years. In conjunction with the transaction, the buyer of the properties issued
publicly traded pass-through certificates. Several of its properties included in the sale and leaseback transaction have been determined by UATC to be economically obsolete for theatre
use. As of September 26, 2002, 27 theatres were subject to the sale leaseback transaction. UATC amended the lease on March 7, 2001 to allow UATC to terminate the master lease with
respect to the obsolete properties, to allow the owner trustee to sell those properties and pay down the underlying debt (at a discount to par through September 2002 and par thereafter) and to reduce
the amount of rent paid by UATC on the lease. Approximately $95.6 million in principal amount of pass-through certificates were outstanding as of September 26, 2002.

In
connection with the 1995 sale and leaseback transaction, UATC entered into a Participation Agreement that requires United Artists to comply with various covenants, including,
limitations on indebtedness, restricted payments, transactions with affiliates, guarantees, issuance of preferred stock of subsidiaries and subsidiary distributions, transfer of assets and dividends.

On
November 8, 1996, United Artists entered into a sale and leaseback transaction, pursuant to which United Artists sold three of its operating theatres and two theatres under
development to an unaffiliated third party for approximately $21.5 million and leased back those theatres pursuant to a lease that terminates in 2017. The lease provides United Artists with an
option to extend the term of the lease for an additional 10 years. Two of the theatres have been determined by United Artists to be economically obsolete and are no longer in operation.

In
December 1997, United Artists entered into a sale and leaseback transaction, pursuant to which United Artists sold two theatres under development and leased them back from an
unaffiliated third party for approximately $18.1 million. Approximately $9.2 million of the sales proceeds were paid to
United Artists during 1999 for reimbursement of some construction costs associated with the two theatres. The lease has a term of 22 years with options to extend the term of the lease for an
additional 10 years.

During
1999, United Artists entered into a sale and leaseback transaction on one existing theatre. Proceeds were received in the amount of $5.4 million by United Artists during
1999. The lease has a term of 20 years, with an option to extend the term of the lease for up to 20 additional years.



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

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



Regal Cinemas, Inc. and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At
September 26, 2002, Regal Cinemas had accrued approximately $33.3 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 the Regal Cinemas 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 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. See also Note 2"Chapter 11 Proceedings" and Note 10"Related Party Transactions"
to the accompanying unaudited condensed consolidated financial statements.



In June 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 supersedes Accounting Principles Board Opinion No. 16 (APB 16), "Business
Combinations," and primarily addresses the accounting for the cost of an acquired business (i.e., the purchase price allocation), including any subsequent adjustment to its cost. SFAS No. 142
primarily addresses the accounting for goodwill and intangible asset subsequent to their acquisition (i.e., the post-acquisition accounting) and supersedes APB 17, "Intangible
Assets." The most significant changes made by SFAS No. 141 involve the requirement to use the purchase method of accounting for all business combinations, thereby eliminating use of the
pooling-of-interests method along with the establishment of new criteria for determining whether the Company should recognize intangible assets acquired in a business
combination separately from goodwill. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001. The adoption of SFAS No. 141 did not have a material
impact on the Company's financial position or results of operations.

Under
SFAS No. 142, the Company can no longer amortize goodwill, reorganizational value in excess of amounts allocated to identifiable assets or indefinite lived intangible
assets, and will test for impairment at least annually at the reporting unit level. Additionally, the amortization period of intangible assets with finite lives is no longer limited to
40 years. Other long-lived assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets to be Disposed Of," and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," issued in August 2001.
SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 for all goodwill and other intangible assets, including excess reorganization value, recognized in an
entity's statement of financial position at that date, regardless of when those assets were initially recognized. As required by SFAS No. 142, the standard has not been retroactively applied to
the results for the period prior to adoption. Amortization relating to goodwill and excess reorganization value was $2.8 million and $6.8 million for the quarter and three quarters ended
September 27, 2001. The Company's goodwill transitional impairment test indicates that the fair value of the reporting unit exceeds the goodwill carrying value

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and therefore, at this time, goodwill is not deemed to be impaired. The Company will conduct its annual valuation in the fourth quarter of 2002.

In
June 2001, the FASB issued 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. SFAS No. 143 is effective for fiscal
years beginning after June 15, 2002. The Company is evaluating the impact of the adoption of this standard and has not yet determined the effect of adoption on its financial position and
results of operations.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets," which provides clarifications of certain
implementation issues with SFAS No. 121 along with additional guidance on the accounting for the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS
No. 121 and applies to all long-lived assets (including discontinued operations) and consequently amends APB 30, "Reporting the Effects of Disposal of a Segment of a
Business." SFAS No. 144 develops one accounting model (based on the model in SFAS No. 121) for long-lived assets that are to be disposed of by sale, as well as addresses the
principal implementation issues. SFAS No. 144 requires that entities measure long-lived assets that are to be disposed of by sale at the lower of book value or fair value less cost
to sell. That requirement eliminates APB 30's requirement that discontinued operations be measured at net realizable value or that entities include under "discontinued operations" in the
financial statements amounts for operating losses that have not yet occurred. Additionally, SFAS No. 144 expands the scope of discontinued operations to include all components of an entity with
operations that (1) the entity can distinguish from the rest of the entity and (2) the entity will eliminate from the ongoing operations of the entity in a disposal transaction.

The
Company adopted SFAS No. 144 in the first quarter of 2002. The adoption of SFAS No. 144 did not have a material impact on the Company's financial position and 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. The provisions of SFAS No. 145 related to the rescission of Statement 4 is effective for fiscal years beginning after May 15, 2002.

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

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

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this guidance did not have a material impact on the Company's financial position or results of operations.



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.



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

Item 3.  QUANTITATIVE & QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

Item 4.  CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management,
including our Co-Chief Executive Officers and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14. Based upon that evaluation, our Co-Chief Executive Officers and Chief Financial Officer concluded that the Company's disclosure controls and
procedures are effective in timely alerting them to material information required to be included in the Company's periodic Securities and Exchange Commission filings relating to the Company (including
its consolidated subsidiaries). There were no significant changes in the Company's internal controls or in other factors that could significantly affect these internal controls subsequent to the date
of our most recent evaluation.

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PART IIOTHER INFORMATION

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

Use of IPO Proceeds

In May 2002, the Company consummated the initial public offering of 18.0 million shares of its Class A common stock. The shares of
Class A common stock sold in the offering were registered under the Securities Act of 1933, as amended, on two Form S-1 Registration Statements (File
Nos. 333-84096 and 333-87870) that were declared effective by the Securities and Exchange Commission on May 8, 2002. All of the offered shares were sold at $19.00
per share, for an aggregate offering price of $342.0 million. The net offering proceeds to us, after deducting underwriting discounts, commissions and other offering expenses totaling
approximately $27.2 million, were approximately $314.8 million.

The
Company used a portion of its net proceeds to repay approximately $240.7 million of principal and accrued interest owed by United Artists under its term credit facility and
approximately $15.0 million to fund operating costs and capital expenditures of Regal CineMedia. Since that time, the Company has used an additional $34.0 million of the net proceeds to
purchase the remaining outstanding shares of capital stock of United Artists held by United Artists' minority shareholders. The Company intends to use the remaining proceeds to further fund Regal
CineMedia, fund the Company's fourth quarter 2002 dividend payment and for general corporate purposes. The Company continues to invest the remainder of the net proceeds from the offering in
short-term money market and money market equivalent securities.

The
amounts that the Company will actually expend for capital expenditures, working capital and other general corporate purposes will vary significantly depending on a number of factors,
including future
revenue growth, if any, and the amount of cash that the Company generates from operations. As a result, the Company will retain broad discretion over the allocation of its net proceeds of the
offering.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K



|Exhibit Number |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1           |  | Amended and Restated Stockholders' Agreement, dated May 14, 2002, by and among the Company, Anschutz Investment Fund, LP, ACE II LLC, Juniper Family Investments, LLC, Lyndia K. Harvey as
Trustee of the Lyndia K. Harvey Revocable Trust and OCM Principal Opportunities Fund II, L.P. and the stockholders of the Company identified on Appendix I attached thereto                                                                                                                                                                                                                                                                                                                        
|10.2           |  | Amended and Restated Credit Agreement, dated as of August 12, 2002, among Regal Cinemas Corporation, as a Borrower, Regal Cinemas, Inc., as a Borrower, the several lenders from time to time parties thereto, Lehman Brothers Inc. and
Credit Suisse First Boston, as Joint Advisors, Joint Lead Arrangers and Joint Book Managers, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent and Lehman Commercial Paper Inc., as
Administrative Agent (filed as Exhibit 10.1 to Regal Cinemas Corporation's Form 10-Q for the fiscal quarter ended June 27, 2002 (Commission File No. 333-87930) and incorporated herein by reference)



On
August 12, 2002, the Company filed a current report on Form 8-K under "Item 9. Regulation FD Disclosure."

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SIGNATURES

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

|                        |  | REGAL ENTERTAINMENT GROUP
|----------------------- |  | -------------------------
|Date: November 12, 2002 |  | By:                      
|Date: November 12, 2002 |  | By:                      
|Date: November 12, 2002 |  | By:                      

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CERTIFICATIONS

I,
Michael L. Campbell, Co-Chief Executive Officer of Regal Entertainment Group, certify that:





|Date: November 12, 2002 |  | /s/MICHAEL L. CAMPBELLMichael L. Campbell Co-Chief Executive
Officer
|----------------------- |  | --------------------------------------------------------------------

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CERTIFICATIONS

I,
Kurt C. Hall, Co-Chief Executive Officer of Regal Entertainment Group, certify that:





|Date: November 12, 2002 |  | /s/KURT C. HALLKurt C. Hall Co-Chief Executive Officer
|----------------------- |  | ------------------------------------------------------

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CERTIFICATIONS

I,
Amy E. Miles, Chief Financial Officer, Executive Vice President and Treasurer of Regal Entertainment Group, certify that:





|Date: November 12, 2002 |  | /s/AMY E. MILESAmy E. Miles Chief Financial Officer, Executive
Vice President and Treasurer
|----------------------- |  | -------------------------------------------------------------------------------------------

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REGAL ENTERTAINMENT GROUP        Exhibit Index        LIST OF EXHIBITS FILED WITH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 26, 2002

|Exhibit Number |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1           |  | Amended and Restated Stockholders' Agreement, dated May 14, 2002, by and among the Company, Anschutz Investment Fund, LP, ACE II LLC, Juniper Family Investments, LLC, Lyndia K. Harvey as
Trustee of the Lyndia K. Harvey Revocable Trust and OCM Principal Opportunities Fund II, L.P. and the stockholders of the Company identified on Appendix I attached thereto                                                                                                                                                                                                                                                                                                                        
|10.2           |  | Amended and Restated Credit Agreement, dated as of August 12, 2002, among Regal Cinemas Corporation, as a Borrower, Regal Cinemas, Inc., as a Borrower, the several lenders from time to time parties thereto, Lehman Brothers Inc. and
Credit Suisse First Boston, as Joint Advisors, Joint Lead Arrangers and Joint Book Managers, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent and Lehman Commercial Paper Inc., as
Administrative Agent (filed as Exhibit 10.1 to Regal Cinemas Corporation's Form 10-Q for the fiscal quarter ended June 27, 2002 (Commission File No. 333-87930) and incorporated herein by reference)

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