Use these links to rapidly review the documentTABLE OF CONTENTS

---

---

SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549

---

FORM 10-Q

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

For the quarterly period ended September 25, 2003

Commission file number: 001-31315

---

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(Address of Principal Executive Offices)

80112(Zip Code)


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

---

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days:    Yes  ý    No  o

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

Class A
Common Stock52,724,100 shares outstanding at November 7, 2003

Class B
Common Stock89,216,142 shares outstanding at November 7, 2003

---

---



TABLE OF CONTENTS



|PART IFINANCIAL INFORMATION
|----------------------------
|Item 1.                     
|                            
|                            
|                            
|                            
|Item 2.                     
|Item 3.                     
|Item 4.                     
|PART IIOTHER INFORMATION   
|Item 1.                     
|Item 2.                     
|Item 6.                     
|SIGNATURES                  





PART IFINANCIAL INFORMATION

Item 1.    FINANCIAL STATEMENTS

REGAL ENTERTAINMENT GROUP        UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

|                                           |                                                                                                                                                                                                        | September 25, 2003                   |         | December 26, 2002 |  
|------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------ | ------- | ----------------- | -
|
|ASSETS                                     |                                                                                                                                                                                                        |                                      |         |                   |  
|CURRENT ASSETS:                            |                                                                                                                                                                                                        |                                      |         |                   |  
|                                           | Cash and cash equivalents                                                                                                                                                                              |                                      | $       | 154.7             |  
|                                           | Restricted cash                                                                                                                                                                                        |                                      |         | 6.7               |  
|                                           | Trade and other receivables, net                                                                                                                                                                       |                                      |         | 23.1              |  
|                                           | Inventories                                                                                                                                                                                            |                                      |         | 6.6               |  
|                                           | Prepaid expenses and other current assets                                                                                                                                                              |                                      |         | 41.1              |  
|                                           | Assets held for sale                                                                                                                                                                                   |                                      |         | 7.6               |  
|                                           | Deferred income tax asset                                                                                                                                                                              |                                      |         | 8.9               |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|TOTAL CURRENT ASSETS                       |                                                                                                                                                                                                        |                                      | 248.7   |                   |  
|PROPERTY AND EQUIPMENT:                    |                                                                                                                                                                                                        |                                      |         |                   |  
|                                           | Land                                                                                                                                                                                                   |                                      |         | 134.1             |  
|                                           | Buildings, leasehold improvements and equipment                                                                                                                                                        |                                      |         | 1,933.2           |  
|                                           | Construction in progress                                                                                                                                                                               |                                      |         | 13.6              |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|Total property and equipment               |                                                                                                                                                                                                        |                                      | 2,080.9 |                   |  
|Accumulated depreciation and amortization  |                                                                                                                                                                                                        |                                      | (263.6  | )                 |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|Total property and equipment, net          |                                                                                                                                                                                                        |                                      | 1,817.3 |                   |  
|GOODWILL                                   |                                                                                                                                                                                                        |                                      | 204.2   |                   |  
|OTHER ASSETS                               |                                                                                                                                                                                                        |                                      | 45.3    |                   |  
|DEFERRED INCOME TAX ASSET                  |                                                                                                                                                                                                        |                                      | 24.4    |                   |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|TOTAL ASSETS                               |                                                                                                                                                                                                        | $                                    | 2,339.9 |                   | $
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|                                           |                                                                                                                                                                                                        | LIABILITIES AND STOCKHOLDERS' EQUITY |         |                   |  
|CURRENT LIABILITIES:                       |                                                                                                                                                                                                        |                                      |         |                   |  
|                                           | Current maturities of long-term obligations                                                                                                                                                            |                                      | $       | 31.1              |  
|                                           | Accounts payable                                                                                                                                                                                       |                                      |         | 130.0             |  
|                                           | Accrued expenses                                                                                                                                                                                       |                                      |         | 90.1              |  
|                                           | Deferred revenue                                                                                                                                                                                       |                                      |         | 51.1              |  
|                                           | Bankruptcy claims and liabilities                                                                                                                                                                      |                                      |         | 3.6               |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|TOTAL CURRENT LIABILITIES                  |                                                                                                                                                                                                        |                                      | 305.9   |                   |  
|LONG-TERM DEBT                             |                                                                                                                                                                                                        |                                      | 1,091.5 |                   |  
|LEASE FINANCING ARRANGEMENTS               |                                                                                                                                                                                                        |                                      | 94.5    |                   |  
|CAPITAL LEASE OBLIGATIONS                  |                                                                                                                                                                                                        |                                      | 24.9    |                   |  
|DEFERRED TAX LIABILITY                     |                                                                                                                                                                                                        |                                      |        |                   |  
|OTHER NONCURRENT LIABILITIES               |                                                                                                                                                                                                        |                                      | 61.1    |                   |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|TOTAL LIABILITIES                          |                                                                                                                                                                                                        |                                      | 1,577.9 |                   |  
|MINORITY INTEREST                          |                                                                                                                                                                                                        |                                      | 3.8     |                   |  
|STOCKHOLDERS' EQUITY:                      |                                                                                                                                                                                                        |                                      |         |                   |  
|                                           | Class A common stock, $0.001 par value: 500,000,000 shares authorized; 52,698,949 and 46,448,382 shares issued and outstanding at September 25, 2003 and December 26, 2002, respectively               |                                      |         |                  |  
|                                           | Class B common stock, $0.001 par value (convertible): 200,000,000 shares authorized; 89,216,142 and 85,287,957 shares issued and outstanding at September 25, 2003 and December 26, 2002,
respectively |                                      |         | 0.1               |  
|                                           | Preferred stock, $0.001 par value: none issued and outstanding                                                                                                                                         |                                      |         |                  |  
|                                           | Additional paid-in capital                                                                                                                                                                             |                                      |         | 731.5             |  
|                                           | Retained earnings                                                                                                                                                                                      |                                      |         | 26.6              |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|TOTAL STOCKHOLDERS' EQUITY                 |                                                                                                                                                                                                        |                                      | 758.2   |                   |  
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |                                                                                                                                                                                                        | $                                    | 2,339.9 |                   | $
|                                           |                                                                                                                                                                                                        |                                      |         |                   |  

See accompanying notes to unaudited condensed consolidated financial statements.





REGAL ENTERTAINMENT GROUP        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

|                                            |                                                                                   | Quarter Ended
September 25, 2003 |       | Quarter Ended
September 26,2002 |   | Three Quarters Ended
September 25, 2003 |         | Three Quarters Ended
September 26, 2003
|------------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------- | ----- | ------------------------------- | - | --------------------------------------- | ------- | ---------------------------------------
|
|REVENUES:                                   |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|                                            | Admissions                                                                        |                                  | $     | 425.7                           |   | $                                       | 387.1   |                                        
|                                            | Concessions                                                                       |                                  |       | 160.9                           |   |                                         | 158.5   |                                        
|                                            | Other operating revenue                                                           |                                  |       | 43.3                            |   |                                         | 25.9    |                                        
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|TOTAL REVENUE                               |                                                                                   |                                  | 629.9 |                                 |   | 571.5                                   |         |                                        
|OPERATING EXPENSES:                         |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|                                            | Film rental and advertising costs                                                 |                                  |       | 225.8                           |   |                                         | 207.2   |                                        
|                                            | Cost of concessions                                                               |                                  |       | 23.4                            |   |                                         | 22.3    |                                        
|                                            | Rent expense                                                                      |                                  |       | 71.5                            |   |                                         | 64.7    |                                        
|                                            | Other operating expenses                                                          |                                  |       | 156.9                           |   |                                         | 141.3   |                                        
|                                            | General and administrative expenses                                               |                                  |       | 15.9                            |   |                                         | 16.6    |                                        
|                                            | Merger and restructuring expenses and amortization of deferred stock compensation |                                  |       | 2.0                             |   |                                         | 3.4     |                                        
|                                            | Depreciation and amortization                                                     |                                  |       | 39.7                            |   |                                         | 35.5    |                                        
|                                            | Loss (gain) on disposal and impairment of operating assets                        |                                  |       | (0.8                            | ) |                                         | 3.2     |                                        
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|TOTAL OPERATING EXPENSES                    |                                                                                   |                                  | 534.4 |                                 |   | 494.2                                   |         |                                        
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|INCOME FROM OPERATIONS                      |                                                                                   |                                  | 95.5  |                                 |   | 77.3                                    |         |                                        
|OTHER EXPENSE (INCOME):                     |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|                                            | Interest expense, net                                                             |                                  |       | 21.8                            |   |                                         | 15.0    |                                        
|                                            | Loss on extinguishment of debt                                                    |                                  |       |                                |   |                                         |        |                                        
|                                            | Minority interest in earnings of consolidated subsidiaries                        |                                  |       | 0.1                             |   |                                         | 2.4     |                                        
|                                            | Other, net                                                                        |                                  |       |                                |   |                                         |        |                                        
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|TOTAL OTHER EXPENSE, NET                    |                                                                                   |                                  | 21.9  |                                 |   | 17.4                                    |         |                                        
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|INCOME BEFORE INCOME TAXES                  |                                                                                   |                                  | 73.6  |                                 |   | 59.9                                    |         |                                        
|PROVISION FOR INCOME TAXES                  |                                                                                   |                                  | 29.4  |                                 |   | 23.8                                    |         |                                        
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|NET INCOME                                  |                                                                                   | $                                | 44.2  |                                 | $ | 36.1                                    |         | $                                      
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|LOSS ON REDEMPTION OF PREFERRED STOCK       |                                                                                   |                                  |      |                                 |   |                                        |         |                                        
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|NET INCOME AVAILABLE TO COMMON STOCKHOLDERS |                                                                                   | $                                | 44.2  |                                 | $ | 36.1                                    |         | $                                      
|                                            |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|EARNINGS PER SHARE:                         |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|                                            | Basic                                                                             |                                  | $     | 0.31                            |   | $                                       | 0.28    |                                        
|                                            | Diluted                                                                           |                                  | $     | 0.30                            |   | $                                       | 0.27    |                                        
|AVERAGE SHARES OUTSTANDING (in thousands):  |                                                                                   |                                  |       |                                 |   |                                         |         |                                        
|                                            | Basic                                                                             |                                  |       | 141,816                         |   |                                         | 130,951 |                                        
|                                            | Diluted                                                                           |                                  |       | 145,341                         |   |                                         | 136,202 |                                        

See accompanying notes to unaudited condensed consolidated financial statements.





REGAL ENTERTAINMENT GROUP        UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                     |                                                                            | Three Quarters Ended
September 25, 2003                                       |                                                                                                    | Three Quarters Ended
September 26, 2002   |  
|---------------------------------------------------- | -------------------------------------------------------------------------- | ----------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------- | ----------------------------------------- | -
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                            |                                                                               |                                                                                                    |                                           |  
|                                                     | Net income                                                                 |                                                                               | $                                                                                                  | 126.6                                     |  
|                                                     |                                                                            | Adjustments to reconcile net income to cash provided by operating activities: |                                                                                                    |                                           |  
|                                                     |                                                                            |                                                                               | Depreciation and amortization                                                                      |                                           |  
|                                                     |                                                                            |                                                                               | Amortization of deferred stock compensation                                                        |                                           |  
|                                                     |                                                                            |                                                                               | Loss on debt extinguishment                                                                        |                                           |  
|                                                     |                                                                            |                                                                               | Minority interest in earnings of consolidated subsidiaries                                         |                                           |  
|                                                     |                                                                            |                                                                               | Deferred income taxes                                                                              |                                           |  
|                                                     |                                                                            |                                                                               | (Gain) loss on disposal and impairment of operating assets                                         |                                           |  
|                                                     |                                                                            |                                                                               | Changes in operating assets and liabilities (excluding effects of acquisition and reorganization): |                                           |  
|                                                     |                                                                            |                                                                               |                                                                                                    | Trade and other receivables               |  
|                                                     |                                                                            |                                                                               |                                                                                                    | Inventories                               |  
|                                                     |                                                                            |                                                                               |                                                                                                    | Prepaid expenses and other current assets |  
|                                                     |                                                                            |                                                                               |                                                                                                    | Accounts payable                          |  
|                                                     |                                                                            |                                                                               |                                                                                                    | Accrued expenses and other liabilities    |  
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|NET CASH PROVIDED BY OPERATING ACTIVITIES            |                                                                            |                                                                               | 267.6                                                                                              |                                           |  
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                            |                                                                               |                                                                                                    |                                           |  
|                                                     | Capital expenditures                                                       |                                                                               |                                                                                                    | (89.8                                     | )
|                                                     | Proceeds from disposition of assets                                        |                                                                               |                                                                                                    | 18.7                                      |  
|                                                     | Cash used to acquire Hoyts, net of cash acquired                           |                                                                               |                                                                                                    | (97.6                                     | )
|                                                     | Cash used to purchase outstanding United Artists minority interest         |                                                                               |                                                                                                    |                                          |  
|                                                     | Decrease in other assets and assets held for sale                          |                                                                               |                                                                                                    |                                          |  
|                                                     | Decrease in reimbursable construction advances                             |                                                                               |                                                                                                    | 9.2                                       |  
|                                                     | Decrease in restricted cash                                                |                                                                               |                                                                                                    | 15.8                                      |  
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|NET CASH USED IN INVESTING ACTIVITIES                |                                                                            |                                                                               | (143.7                                                                                             | )                                         |  
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                            |                                                                               |                                                                                                    |                                           |  
|                                                     | Proceeds from exercise of stock purchase warrants                          |                                                                               |                                                                                                    | 37.5                                      |  
|                                                     | Proceeds from Regal Cinemas senior credit facility                         |                                                                               |                                                                                                    | 315.0                                     |  
|                                                     | Proceeds from convertible notes offering                                   |                                                                               |                                                                                                    | 240.0                                     |  
|                                                     | Net payment on convertible notes hedge and warrants                        |                                                                               |                                                                                                    | (18.8                                     | )
|                                                     | Payment of debt acquisition costs                                          |                                                                               |                                                                                                    | (15.8                                     | )
|                                                     | Cash used to pay dividends                                                 |                                                                               |                                                                                                    | (778.3                                    | )
|                                                     | Proceeds from stock option exercises                                       |                                                                               |                                                                                                    | 9.5                                       |  
|                                                     | Net payments on long term obligations                                      |                                                                               |                                                                                                    | (13.2                                     | )
|                                                     | Payment of bankruptcy claims and liabilities                               |                                                                               |                                                                                                    | (21.1                                     | )
|                                                     | Cash of subsidiaries at acquisition date                                   |                                                                               |                                                                                                    |                                          |  
|                                                     | Cash used to redeem Edwards preferred stock                                |                                                                               |                                                                                                    |                                          |  
|                                                     | Cash used to redeem Edwards senior subordinated notes                      |                                                                               |                                                                                                    |                                          |  
|                                                     | Cash used to payoff Edwards term loan                                      |                                                                               |                                                                                                    |                                          |  
|                                                     | Cash used to payoff United Artists term credit facility                    |                                                                               |                                                                                                    |                                          |  
|                                                     | Net proceeds from senior subordinated notes offering                       |                                                                               |                                                                                                    |                                          |  
|                                                     | Net proceeds from initial public offering                                  |                                                                               |                                                                                                    |                                          |  
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|NET CASH USED IN FINANCING ACTIVITIES                |                                                                            |                                                                               | (245.2                                                                                             | )                                         |  
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |                                                                            |                                                                               | (121.3                                                                                             | )                                         |  
|CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD     |                                                                            |                                                                               | 276.0                                                                                              |                                           |  
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|CASH AND CASH EQUIVALENTS AT END OF PERIOD           |                                                                            | $                                                                             | 154.7                                                                                              |                                           | $
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|SUPPLEMENTAL CASH FLOW INFORMATION:                  |                                                                            |                                                                               |                                                                                                    |                                           |  
|                                                     | Cash paid for income taxes, net of refunds received                        |                                                                               | $                                                                                                  | 19.1                                      |  
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|                                                     | Cash paid for interest                                                     |                                                                               | $                                                                                                  | 52.8                                      |  
|                                                     |                                                                            |                                                                               |                                                                                                    |                                           |  
|SUPPLEMENTAL NON-CASH FINANCING ACTIVITIES:          |                                                                            |                                                                               |                                                                                                    |                                           |  
|                                                     | Exchange of minority shares in Regal Cinemas for Regal Entertainment Group |                                                                               | $                                                                                                  |                                          |  
|                                                     | Exchange of minority shares in Edwards for Regal Entertainment Group       |                                                                               | $                                                                                                  |                                          |  
|                                                     | Contribution of additional shares purchased from minority interests        |                                                                               | $                                                                                                  |                                          |  
|                                                     | Issuance of common stock to acquire Hoyts                                  |                                                                               | $                                                                                                  | 88.1                                      |  

See accompanying notes to unaudited condensed consolidated financial statements.





REGAL ENTERTAINMENT GROUP  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.     THE COMPANY AND BASIS OF PRESENTATION

Regal Entertainment Group (the "Company" or "Regal") is the parent company of Regal Entertainment Holdings, Inc. ("REH"), which is the parent company of
Regal Cinemas Corporation ("Regal Cinemas") and its subsidiaries and United Artists Theatre Company ("United Artists") and its subsidiaries. Regal Cinemas' subsidiaries include Regal
Cinemas, Inc. and its subsidiaries, which include Edwards Theatres, Inc. ("Edwards"), Regal CineMedia Corporation ("Regal CineMedia"), Hoyts Cinemas Corporation ("Hoyts") and United
Artists Theatre Group ("UATG"). The terms Regal or the Company, REH, Regal Cinemas, United Artists, Edwards, Regal CineMedia, Hoyts and UATG shall be deemed to include the respective subsidiaries of
such entities when used in discussions included herein regarding the current operations or assets of such entities.

Regal
operates the largest theatre circuit in the United States, consisting of 6,061 screens in 555 theatres in 39 states as of September 25, 2003. 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 (such as Fiscal 2003) results in a 53-week fiscal year.

During
2000 and 2001, United Artists and a majority of its subsidiaries at that time (the "United Artists Bankrupt Entities"), Edwards Theatre Circuit Affiliated Group and its
subsidiaries at that time (the "Edwards Bankrupt Entities," which were merged into Edwards in connection with the bankruptcy proceedings of the Edwards Bankrupt Entities described below), and Regal
Cinemas, Inc. and its subsidiaries at that time (the "Regal Cinemas, Inc. Bankrupt Entities") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code
in the United States Bankruptcy Courts identified below, as well as joint plans of reorganization. The joint plans of reorganization, as amended, for the United Artists Bankrupt Entities and the
Edwards Bankrupt Entities were approved by the United States Bankruptcy Courts for the Central District of California and the District of Delaware, respectively. Such joint plans of reorganization
became effective on March 2, 2001 ("UA Effective Date") for the United Artists Bankrupt Entities and September 29, 2001 ("Edwards Effective Date") for
the Edwards Bankrupt Entities. The United States Bankruptcy Court for the Middle District of Tennessee approved the Regal Cinemas, Inc. Bankrupt Entities' joint plan of reorganization on
December 7, 2001, and it 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 and as a result, Regal Cinemas, Inc. became a wholly owned subsidiary
of Regal Cinemas. Regal Cinemas was formed for the primary purpose of acquiring and holding the shares of common stock of Regal Cinemas, Inc. Edwards was formed in connection with the
reorganization of the Edwards Bankrupt Entities to, among other things, effect the substantive consolidation of the Edwards Bankrupt Entities through their merger into Edwards. As a result of the
merger transaction, Edwards succeeded to all of the assets and liabilities of the Edwards Bankrupt Entities.

Anschutz
acquired controlling equity interests in United Artists, 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 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, Edwards and Regal Cinemas, Inc. Bankrupt Entities 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, Edwards and Regal Cinemas, Inc. Bankrupt Entities.

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).

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 2002 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 a digital video advertising company, Next Generation Network, Inc., which Anschutz contributed to Regal
CineMedia in exchange for shares of Regal CineMedia capital stock.

On
April 12, 2002, Regal acquired all of the outstanding common stock of Regal Cinemas, Edwards and Regal CineMedia and approximately 90% of the outstanding voting stock of United
Artists through a series of transactions in which Regal exchanged for such capital stock shares of its Class A and Class B common stock. Regal also issued in the exchange transaction
replacement options to purchase shares of its Class A common stock to the holders of outstanding options of United Artists and Regal Cinemas and replacement warrants to purchase shares of its
Class A and Class B common stock to certain holders of outstanding warrants of United Artists.

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

On
August 16, 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. The $22.3 million difference between the carrying amount and purchase price of
the minority interest was recorded as a component of goodwill.

On
March 28, 2003, Regal announced its acquisition of certain theatre operations of Hoyts representing a total of 52 theatres and 554 screens located in 10 states in the
Northeastern United States, pursuant to a stock purchase agreement dated February 3, 2003, among Regal, HUSH Holdings U.S. Inc. ("HUSH") and Hoyts for an aggregate purchase price of
$213.1 million. The results of operations of the acquired theatre locations have been included in the accompanying financial statements for the periods subsequent to the acquisition date of
March 28, 2003. See Note 2 for further discussion of this transaction.

On
May 23, 2003, all outstanding warrants held by Anschutz to purchase a total of 3,928,185 shares of Class B common stock and warrants held by certain other investors to
purchase a total of 296,129 shares of Class A common stock were exercised at exercise prices of $8.88 per share. Proceeds from the transactions totaled approximately $37.5 million.

On
June 10, 2003, Regal declared an extraordinary cash dividend of $5.05 per share on each outstanding share of its Class A and Class B common stock. Stockholders of
record at the close of business on June 20, 2003 were paid this dividend on July 1, 2003. The dividend was recorded as a reduction of retained earnings (reduced to zero as of
June 10, 2003) and additional paid-in capital upon declaration. Sources used to fund the approximate $716.0 million extraordinary dividend included cash on hand of
approximately $190.6 million, the net proceeds of $310.8 million from the term loan under the amended and restated Regal Cinemas senior credit facility and the net proceeds of


$214.6 million from the issuance by Regal of $240.0 million 33/4% Convertible Senior Notes. Concurrent with the issuance of Regal's 33/4% Convertible Senior
Notes, we entered into convertible note hedge and warrant transactions with respect to our Class A common stock in order to reduce the potential dilution from conversion of the notes into
shares of our Class A common stock. As described further in Note 4, the convertible note hedge and warrant economically allow us to acquire sufficient Class A common shares from
our counterparty to meet our obligation to deliver Class A common shares upon conversion by the note holder, unless the Class A common share price exceeds $24.43. When the fair value of
our Class A common shares exceeds such price, the equity contracts have an offsetting economic impact, and accordingly will no longer be effective as a hedge of the dilutive impact of possible
conversion. The net cost of the convertible note hedge and warrant transactions was approximately $18.8 million and is included as a reduction of equity in the accompanying unaudited condensed
consolidated balance sheet as of September 25, 2003. See Notes 4 and 9 for further description of the related debt facilities and the convertible note hedge and warrant transactions.

On
July 7, 2003, Regal acquired an aggregate of 2,451,441 shares of its Class A common stock from LB I Group Inc. and Edwards Affiliated Holdings, LLC. Thereafter,
on July 9, 2003, Regal issued for the price it paid for those shares those same 2,451,441 shares of its Class A common stock to one of its stockholders, GSCP Recovery, Inc.
("GSCP"). In June 2003, GSCP offered Regal the option to issue shares of Class A common stock in lieu of paying GSCP cash in respect of the extraordinary dividend described in the
preceding paragraph. Regal exercised its option on July 7, 2003. The number of shares of Class A common stock outstanding did not change as a result of the transactions and Regal's
aggregate sales and purchase prices for the shares in the transactions were identical.

The
Company has prepared the unaudited condensed consolidated balance sheet as of September 25, 2003 and the unaudited condensed consolidated statements of operations and cash
flows in accordance with accounting principles generally accepted in the United States of America for interim financial information and the rules and regulations of the Securities and Exchange
Commission. Accordingly, certain information and footnote disclosures typically included in an annual report have been condensed or omitted for this quarterly report. In the opinion of management, all
adjustments (which include only normal recurring adjustments) necessary to present fairly in all material respects the financial position, results of operations and cash flows for all periods
presented have been made. The December 26, 2002 unaudited condensed consolidated balance sheet information is derived from the audited consolidated financial statements of the Company included
in the Company's annual report on Form 10-K filed on March 26, 2003 with the Securities and Exchange Commission (File No. 001-31315) for the Company's
fiscal year ended December 26, 2002. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto
included in the audited consolidated financial statements. The
results of operations for the quarter and three quarters ended September 25, 2003 are not necessarily indicative of the operating results that may be achieved for the full 2003 fiscal year.

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

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

2.     ACQUISITION

On March 28, 2003, Regal acquired 52 Hoyts theatres representing 554 screens located in 10 states in the Northeastern United States, pursuant to a stock
purchase agreement dated February 3, 2003, among Regal, HUSH and Hoyts. The purchase price of approximately $213.1 million includes cash of approximately $100.0 million, the
issuance of 4,761,904 shares of Regal's Class A common stock to HUSH with an aggregate fair value of $88.1 million as of the date of issuance, and the assumption of certain capital lease
and other obligations with an aggregate fair value of approximately $25.0 million.


The value of the 4,761,904 Class A common shares issued was determined based on the closing market price of Regal's common shares on February 4, 2003, the date on which the terms of the
acquisition were agreed to and announced. The transaction has been accounted for using the purchase method of accounting and, accordingly, the purchase price has been allocated to the assets acquired
and liabilities assumed for each of the respective theatre locations based on their estimated fair values at the date of acquisition, with the remaining balance allocated to goodwill. The results of
operations of the acquired theatre operations have been included in the accompanying financial statements for the periods subsequent to the acquisition date of March 28, 2003.

The
following is a summary of the allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in millions):

Current assets

$
1.1Buildings, leasehold improvements and equipment, net


200.2Goodwill


0.9Deferred income tax asset


33.0Other assets


0.2Current liabilities


(22.0
)Other liabilities


(0.3
)Total purchase price

$
213.1


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

Quarter Ended
September 26, 2002

Three Quarters Ended
September 25, 2003

Three Quarters Ended
September 26, 2002(In millions, except per share amounts)Revenues

$
622.4

$
1,852.0

$
1,745.4Operating income


85.9


267.7


240.7Net income


40.9


130.0


98.5Net income available to common stockholders


40.9


130.0


70.3Earnings per share:Basic

$
0.30

$
0.94

$
0.67Diluted

$
0.29

$
0.91

$
0.64


3.     PRO FORMA RESULTS OF OPERATIONS

On a pro forma basis for the 2002 periods presented, assuming (i) a full first quarter 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 due 2012, (iv) the repayment of Edwards indebtedness and
the redemption of Edwards preferred stock, (v) the effects of the Company's initial public offering in May 2002, and (vi) the Company's acquisition of the minority interest of
United Artists, total revenues, operating income and net income would have been $571.5 million, $77.3 million and


$37.3 million for the quarter ended September 26, 2002 and $1,720.0 million, $244.2 million and $118.5 million for the three quarters ended September 26,
2002.

4.     LONG-TERM OBLIGATIONS

Long-term obligations at September 25, 2003 and December 26, 2002 consist of the following (in millions):

September, 25, 2003

December 26, 2002Regal 33/4% Convertible Senior Notes

$
240.0

$
Regal Cinemas Senior Credit Facility


523.1


219.4Regal Cinemas 93/8% Senior Subordinated Notes


350.0


350.0Lease Financing arrangements, 11.5%, maturing in various installments through 2021


96.5


97.8Capital lease obligations


25.9


4.1Other


6.5


7.1Total long-term obligations


1,242.0


678.4Less current maturities


(31.1
)

(17.0
)Total long-term obligations, net

$
1,210.9

$
661.4


Regal 33/4% Convertible Senior NotesOn May 28, 2003, Regal issued $240.0 million aggregate
principal amount of 33/4% Convertible Senior Notes due May 15, 2008. Interest on the notes is payable semi-annually in arrears on May 15 and November 15
of each year, beginning November 15, 2003. The notes are senior unsecured obligations of Regal and rank on parity with all of our existing and future senior unsecured indebtedness and prior to
all of our subordinated indebtedness. The notes are effectively subordinated to all of our future secured indebtedness to the extent of the assets securing that indebtedness and to any indebtedness
and other liabilities of our subsidiaries. None of our subsidiaries have guaranteed any of our obligations with respect to the notes.
On or after May 15, 2007, our note holders will have the option to convert their notes, in whole or in part, into shares of our Class A common stock at any time prior to maturity,
subject to certain limitations, unless previously purchased by us at the note holder's option upon a change in control, at the current conversion price of $21.175 per share (which conversion price has
been adjusted for the effect of the extraordinary dividend paid on July 1, 2003see Note 1). Prior to May 15, 2007, our note holders will have the right, at their
option, to convert their notes, in whole or in part, into shares of our Class A common stock, subject to certain limitations, unless previously purchased by us at the note holder's option upon
a change in control, at the current conversion price of $21.175 per share, subject to further adjustments described below, if:



At
the current conversion price of $21.175, for each $1,000 of aggregate principal amount of notes converted, the Company would deliver approximately 47.2255 shares of our Class A
common stock. Upon conversion, we may elect to deliver cash in lieu of shares of Class A common stock or a combination of cash and shares of Class A common stock. With respect to the par
amount of the conversion obligation, we intend to deliver cash to note holders upon conversion. The conversion price and the number of shares delivered on conversion are subject to adjustment upon
certain events.

In
connection with the issuance of the notes, we used approximately $18.8 million of the net proceeds of the offering to enter into convertible note hedge and warrant transactions
with respect to our Class A common stock to reduce the potential dilution from conversion of the notes. We used the remainder of the net proceeds from this offering in partial payment of an
extraordinary dividend of $5.05 per share of our Class A and Class B common stock to our stockholders of record as of June 20, 2003. See Note 1 for further discussion
related to our extraordinary dividend.

Under
the terms of the convertible note hedge arrangement (the "Convertible Note Hedge") with Credit Suisse First Boston ("CSFB"), we paid $36.2 million for a forward purchase
option contract under which we are entitled to purchase from CSFB a fixed number of shares of our Class A common shares (at a current price per share of $21.175). In the event of the conversion
of the notes, this forward purchase option contract allows us to purchase, at a fixed price equal to the implicit conversion price of shares issued under the convertible notes, a number of shares
equal to the shares that we issue to a note holder upon conversion. Settlement terms of this forward purchase option allow the Company to elect cash or share settlement based on the settlement option
it chooses in settling the conversion feature of the notes. We accounted for the Convertible Note Hedge pursuant to the guidance in EITF 00-19, "Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in a Company's Own Stock." Accordingly, the $36.2 million purchase price of the forward stock purchase option contract was recorded as a debit to
consolidated stockholders' equity.

We
also sold to CSFB a warrant (the "Warrant") to purchase shares of our Class A common stock. The Warrant is currently exercisable for 11,334,120 share of our Class A
common stock at a current exercise price of $24.43 per share. We received $17.4 million cash from CSFB in return for the sale of this forward share purchase option contract. CSFB cannot
exercise the Warrant unless and until a conversion event occurs. We have the option of settling the Warrant in cash or shares of our Class A common stock. We accounted for the sale of the
Warrant as the sale of a permanent equity instrument pursuant to the guidance in EITF 00-19. Accordingly, the $17.4 million sales price of the forward stock purchase option contract
was recorded as a credit to consolidated stockholders' equity.

The
Convertible Note Hedge and the Warrant economically allow us to acquire sufficient Class A common shares from CSFB to meet our obligation to deliver Class A common
shares upon conversion
by the note holder, unless the Class A common share price exceeds $24.43. When the fair value of our Class A common shares exceeds such price, the equity contracts have an offsetting
economic impact, and accordingly will no longer be effective as a hedge of the dilutive impact of possible conversion.



Amended and Restated Regal Cinemas Senior Credit FacilityOn August 27, 2003, Regal Cinemas entered into a new term
loan facility ("New Term Loan D") under the third amended and restated credit agreement of Regal Cinemas (a copy of which is filed herewith as Exhibit 4.1) for approximately
$523.1 million to refinance, at a more favorable interest rate, the aggregate outstanding principal amount under the former Term Loan C and Term Loan D facilities. The amortization schedule
under the New Term Loan D is equal to the sum of the scheduled quarterly amortization payments under the former Term Loan C and Term Loan D facilities. The New Term Loan D facility amortizes at a rate
of 5.2% per annum for the first three years of the loan, with the remaining 84.4% of principal becoming due in years four through six of the loan, maturing June 30, 2009. The borrowings
outstanding under the New Term Loan D facility currently bear interest of approximately 3.6%. The New Term Loan D facility is guaranteed by substantially all direct and indirect subsidiaries of Regal
Cinemas and by substantially all real and personal property of Regal Cinemas and its subsidiaries, as set forth in the third amended and restated credit agreement. The third amended and restated
credit agreement carries identical covenants to those in the Regal Cinemas credit agreement that was amended and restated. A summary description of the covenants and other provisions of the credit
agreement is included in "Management's Discussion and Analysis of Financial Condition and Results of OperationsLiquidity and Capital ResourcesRegal Cinemas Senior Credit
Facility" and Note 6 to our audited consolidated financial statements included in our 2002 Annual Report on Form 10-K. The summary description is qualified in its entirety to
the full text of the third amended and restated credit agreement of Regal Cinemas filed herewith as Exhibit 4.1.

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

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

5.     INCOME TAXES

The provision for income taxes of $29.4 million and $23.8 million for the quarters ended September 25, 2003 and September 26, 2002
reflect effective tax rates of approximately 39.9% and 39.7%, respectively. The provision for income taxes of $83.5 million and $68.6 million for the three quarters ended
September 25, 2003 and September 26, 2002 reflect effective tax rates of approximately 39.7% and 44.5%, respectively. Excluding the effects of minority interest in earnings of
consolidated subsidiaries recorded in the accompanying unaudited condensed consolidated statements of operations for the
quarters ended September 25, 2003 and September 26, 2002 and three quarters ended September 25, 2003 and September 26, 2002, the Company's effective tax rates were
approximately 39.9% and 38.2%, 39.6% and 40.7%, respectively.

For
federal income tax purposes, the Company has carryover tax basis in certain assets acquired in the Hoyts acquisition described in Note 2. Such acquired entities had net
operating loss carryforwards totaling approximately $155.4 million as of the date of acquisition. Pursuant to certain Internal Revenue Service limitations, the Company's allowable annual
deduction with respect to the Hoyts net operating loss carryforwards is limited to approximately $8.6 million. As of September 25, 2003, the Company recorded deferred tax assets in the
amount of approximately $33.0 million, net of a valuation allowance of approximately $14.7 million, in connection with the Hoyts acquisition.

In
assessing the valuation of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The
ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the


periods in which these temporary differences become deductible. The Company recorded a valuation allowance of approximately $48.8 million and $59.4 million against deferred tax assets at
September 25, 2003 and December 26, 2002, as management believes it is more likely than not that such deferred tax asset amounts would not be realized in future tax periods. The
valuation allowance relates to pre-acquisition deferred tax assets of Edwards, United Artists and Hoyts. During the quarter ended June 26, 2003 and in connection with the Company's
payment of the extraordinary dividend, United Artists sold certain assets at fair market value to other companies within our consolidated group, resulting in a deferred taxable gain. Based on this
transaction, the Company determined it was more likely than not that certain deferred tax assets of United Artists would be realized, and, accordingly reduced the valuation allowance by the amount of
$25.3 million. The reduction in the valuation allowance reduced goodwill related to the United Artists acquisition. Accordingly, future reductions in the valuation allowance will reduce
goodwill related to these respective acquisitions.

6.     CAPITAL STOCK AND STOCK BASED COMPENSATION



As of September 25, 2003, the Company's authorized capital stock consisted of:



Of
the authorized shares of Class A common stock, 18,000,000 shares were sold in connection with the Company's initial public offering in May 2002. The Company's
Class A common stock is listed on the New York Stock Exchange ("NYSE") under the trading symbol "RGC." As of September 25, 2003, 52,698,949 shares of Class A common stock were
outstanding. Of the authorized shares of Class B common stock, 89,216,142 shares were outstanding as of September 25, 2003, all of which are held by Anschutz and OCM Principal
Opportunities Fund II, L.P. and its subsidiaries ("Oaktree's Principal Activities Group"). Each share of Class B common stock converts into one share of Class A Common stock at the
option of the holder or upon certain transfers of a holder's Class B common stock. Each holder of Class B common stock is entitled to ten votes for each outstanding share of
Class B common stock owned by that stockholder on every matter properly submitted to the Stockholders for their vote. Of the authorized shares of the preferred stock, no shares were issued and
outstanding as of September 25, 2003. The Class A common stock is entitled to one vote for each outstanding share of Class A common stock on every matter properly submitted to the
stockholders for a vote. The Class A and Class B common stock vote together as a single class on all matters submitted to the stockholders for a vote. The material terms and provisions
of the Company's certificate of incorporation affecting the relative rights of the Class A common stock and the Class B common stock are described in the Company's 2002 Annual Report on
Form 10-K.



Other than disclosed in Note 4, no warrants to acquire the Company's common stock were outstanding at September 25, 2003.

In
connection with the July 1, 2003 extraordinary cash dividend described more fully in Note 1, and pursuant to the antidilution adjustment terms of the 2002 Stock
Incentive Plan, the exercise price and the number of shares of Class A common stock subject to options held by the Company's option holders were adjusted to restore their economic position to
that existing immediately before the extraordinary dividend. The number of options reserved for issuance under the plan were also adjusted. There were no accounting consequences for changes made to
reduce the exercise prices and increase the number of shares underlying options as a result of the extraordinary cash dividend because (1) the


aggregate intrinsic value of the awards immediately after the extraordinary dividend was not greater than the aggregate intrinsic value of the awards immediately before the extraordinary dividend and
(2) the ratio of the exercise price per share to the market value per share was not reduced.



In December 2002, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 148, "Accounting
for Stock-Based CompensationTransition and Disclosure." SFAS No.148 amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to SFAS No. 123's
fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No.123 and Accounting Principles Board ("APB")
Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to
stock-based employee compensation on reported net income and earnings per share in annual and interim financial statements. Under SFAS No. 123, entities are permitted to recognize as expense
the fair value of all stock-based awards on the date of grant over the vesting period and alternatively allows entities to continue to apply the provisions of APB Opinion No. 25, "Accounting
for Stock Issued to Employees" and related interpretations, and provide pro forma net income or loss and earnings or loss per share disclosures as if the fair-value-based method defined in
SFAS No. 123 had been applied.

The
Company has elected to continue accounting for its stock option grants under its 2002 Stock Incentive Plan using the intrinsic value method in accordance with the provisions of APB
Opinion No. 25, which requires compensation costs to be recognized for the excess of the fair value of options on the date of grant over the option exercise price. Had the fair value of options
granted under these plans been recognized in accordance with SFAS No. 123 as compensation expense on a straight-line basis over the vesting period of the grants, the Company's net
income and earnings per share would have been recorded in the amounts indicated below (in millions, except per share data):

|                                                                                                                                               |  | Quarter ended
September 25,
2003 |      | Quarter ended
September 26,
2002 |   | Three Quarters ended
September 25,
2003 |   | Three Quarters ended
September 26,
2002 |      
|---------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- | ---- | -------------------------------- | - | --------------------------------------- | - | --------------------------------------- | -----
|Net income available to common stockholders as reported:                                                                                       |  | $                                | 44.2 |                                  | $ | 36.1                                    |   | $                                       | 126.6
|Less: additional stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects |  |                                  | (0.7 | )                                |   | (0.9                                    | ) |                                         | (2.2 
|                                                                                                                                               |  |                                  |      |                                  |   |                                         |   |                                         |      
|Pro forma net income                                                                                                                           |  | $                                | 43.5 |                                  | $ | 35.2                                    |   | $                                       | 124.4
|                                                                                                                                               |  |                                  |      |                                  |   |                                         |   |                                         |      
|Basic earnings per share:                                                                                                                      |  |                                  |      |                                  |   |                                         |   |                                         |      
|As reported                                                                                                                                    |  | $                                | 0.31 |                                  | $ | 0.28                                    |   | $                                       | 0.92 
|Pro forma                                                                                                                                      |  | $                                | 0.31 |                                  | $ | 0.27                                    |   | $                                       | 0.91 
|Diluted earnings per share:                                                                                                                    |  |                                  |      |                                  |   |                                         |   |                                         |      
|As reported                                                                                                                                    |  | $                                | 0.30 |                                  | $ | 0.27                                    |   | $                                       | 0.89 
|Pro forma                                                                                                                                      |  | $                                | 0.30 |                                  | $ | 0.26                                    |   | $                                       | 0.88 



7.     CONTINGENCIES



Regal Cinemas, Inc. and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At
September 25, 2003, Regal Cinemas had accrued approximately $3.6 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, Inc.'s 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.



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

On
March 18, 2003, Reading International, Inc., Citadel Cinemas, Inc. and Sutton Hill Capital, LLC (collectively, the "Plaintiffs") filed a complaint and demand for
jury trial in the United States District Court for the Southern District of New York against Oaktree Capital Management LLC, Onex Corporation, Regal, United Artists, United Artists Theatre
Circuit, Inc., Loews Cineplex Entertainment Corporation, Columbia Pictures Industries, Inc., The Walt Disney Company, Universal Studios, Inc., Paramount Pictures Corporation,
Metro-Goldwyn-Mayer Distribution Company, Fox Entertainment Group, Inc., Dreamworks LLC, Stephen Kaplan and Bruce Karsh (collectively, the "Defendants") alleging various violations by the
Defendants of federal and state antitrust laws and New York common law. The Plaintiffs allege, among other things, that the consolidation of the theatre industry has adversely impacted their ability
to release first-run industry-anticipated top-grossing commercial films, and are seeking, among other things, a declaration that the Defendants' conduct is in violation of
antitrust laws, damages, and equitable relief enjoining Defendants from engaging in future anticompetitive conduct. Management believes that the allegations are without merit and intends to defend
vigorously the Plaintiffs' claims.

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


for their claims declaratory and injunctive relief, compensatory and punitive damages, damages for negligence and attorneys' fees and costs.

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

8.     RELATED PARTY TRANSACTIONS

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

On April 17, 2002, 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. The holders of the Edwards Series B preferred stock, who are members of or entities controlled by the Edwards family, 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
and from Oaktree's Principal Activities Group approximately $9.6 million and $2.4 million, respectively, owed on the Edwards subordinated notes issued by Edwards to Anschutz and
Oaktree's Principal Activities Group.

Warrant Exercises

On May 23, 2003, all outstanding warrants held by Anschutz to purchase a total of 3,928,185 shares of Class B common stock, Craig Slater, a Regal
director, to purchase a total of 6,696 shares of Class A common stock and Michael F. Bennet, a former Regal director, to purchase a total of 13,392 shares of Class A common stock were
exercised at exercise prices of $8.88 per share.

Other Transactions

During the quarter ended September 25, 2003, Regal CineMedia incurred approximately $593,000 of expenses payable to an Anschutz affiliate for reimbursement
of telecommunication services. Additionally, Regal CineMedia has recorded revenue of $108,000 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.



On
July 7, 2003, Regal acquired an aggregate of 2,451,441 shares of its Class A common stock from two stockholders and thereafter, on July 9, 2003, issued those same
shares for the same purchase price to another of its stockholders, GSCP. Alfred C. Eckert III, one of our directors, is a limited partner of GSCP (NJ), L.P. and an executive officer of GSCP (NJ),
L.P.'s general partner, GSCP (NJ), Inc., each of which entities reports shared beneficial ownership with GSCP with respect to such shares. Mr. Eckert disclaims beneficial ownership of these shares.
For a more detailed description of this transaction, see Note 1"The Company and Basis for Presentation."

During
the quarter ended September 25, 2003, United Artists remitted approximately $250,000 to Anschutz in satisfaction of amounts due under an insurance arrangement formerly held
by Anschutz and United Artists.

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

|                                                    |                                       | Quarter Ended
September 25, 2003 |       | Quarter Ended
September 26, 2002 |   | Three Quarters Ended
September 25, 2003 |         | Three Quarters Ended
September 26, 2002
|--------------------------------------------------- | ------------------------------------- | -------------------------------- | ----- | -------------------------------- | - | --------------------------------------- | ------- | ---------------------------------------
|Net income                                          |                                       | $                                | 44.2  |                                  | $ | 36.1                                    |         | $                                      
|Less:                                               |                                       |                                  |       |                                  |   |                                         |         |                                        
|                                                    | Loss on redemption of preferred stock |                                  |       |                                 |   |                                         |        |                                        
|                                                    |                                       |                                  |       |                                  |   |                                         |         |                                        
|Net income available to common stockholders         |                                       | $                                | 44.2  |                                  | $ | 36.1                                    |         | $                                      
|Weighted average shares outstanding (in thousands): |                                       |                                  |       |                                  |   |                                         |         |                                        
|                                                    | Basic:                                |                                  |       | 141,816                          |   |                                         | 130,951 |                                        
|Add common stock equivalents                        |                                       |                                  | 3,525 |                                  |   | 5,251                                   |         |                                        
|                                                    |                                       |                                  |       |                                  |   |                                         |         |                                        
|                                                    | Diluted:                              |                                  |       | 145,341                          |   |                                         | 136,202 |                                        
|Earnings per share                                  |                                       |                                  |       |                                  |   |                                         |         |                                        
|                                                    | Basic:                                |                                  | $     | 0.31                             |   | $                                       | 0.28    |                                        
|                                                    | Diluted                               |                                  | $     | 0.30                             |   | $                                       | 0.27    |                                        

On
April 17, 2002, Regal used a portion of the proceeds from REH's sale of Edwards to Regal Cinemas, Inc. 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 consolidated
statement of operations for the three quarters ended September 26, 2002.

The
$240 million convertible notes discussed in Note 4 allow us to settle any conversion, and we have the intent to settle any conversion, by remitting to the note holder
the accreted value of the note in cash, while settling the conversion spread (the excess conversion value over the accreted value) in the shares of our Class A common stock. The accounting for
convertible debt with such settlement features is addressed in the consensus reached by the EITF with respect to the accounting for Instrument C as set forth in EITF 90-19, "Convertible
Bonds with Issuer Option to Settle for Cash Upon Conversion." It is our intent to settle the notes' conversion obligations consistent with Instrument C. Because the accreted value of the notes will be
settled for cash upon the conversion, only the


conversion spread (the excess conversion value over the accreted value), which will be settled in stock, will result in potential dilution in our earnings-per-share
computations.

Common
stock equivalents consist of principally stock options and warrants. Stock options and warrants to purchase 11.4 million shares and 6.1 million shares of common
stock for the quarter and three quarters ended September 25, 2003 and 1.4 million shares and 0.6 million shares for the quarter and three quarters ended September 26, 2002,
respectively, were not included in the computation of diluted earnings per share because their inclusion would have been antidilutive.

10.   RECENT ACCOUNTING PRONOUNCEMENTS

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

In
April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS No. 145 updates, clarifies and simplifies existing accounting pronouncements including the rescission of Statement 4, which required all gains and losses from extinguishments of debt to be
aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in APB Opinion No. 30 will now be used to classify those gains and
losses. As a result of the Company's adoption of SFAS No. 145 on December 27, 2002, the extraordinary gain from debt extinguishment during fiscal 2002 has been reclassified to earnings
from continuing operations.

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

In
November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
of Others." This interpretation will significantly change current practice in the accounting for, and disclosure of, guarantees. Guarantees meeting the characteristics described in the interpretation
are required to be initially recorded at fair value, which is different from general current practice of recognition of a liability only when loss is probable and reasonably estimable, as prescribed
in SFAS No. 5, "Accounting for Contingencies." The interpretation also requires a guarantor to make significant new disclosures for virtually all guarantees even if the likelihood of the
guarantor's having to make payments under the guarantee is remote. The disclosure requirements in this interpretation were effective for financial statements of interim or annual periods ending after
December 15, 2002. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, irrespective of the guarantor's fiscal year-end. The adoption of this interpretation did not have a material impact on the Company's financial position or results
of operations.

In
January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entitiesan Interpretation of ARB No. 51." This
interpretation addresses consolidation by business


enterprises of entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. Variable interest entities are required to be consolidated by their primary beneficiaries if they do not effectively disperse
risks among parties involved. The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity's expected losses or receives a majority of its expected residual
returns. The consolidation requirements of this interpretation apply immediately to variable interest entities created after January 31, 2003 and apply to existing entities for interim or
annual periods ending after December 15, 2003. Certain new disclosure requirements apply to all financial statements issued after January 31, 2003. The adoption of this interpretation is
not expected to have a material impact on the Company's financial position or results of operations.

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

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

11.   SUBSEQUENT EVENTS

On October 21, 2003, the Company 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 12, 2003, to stockholders of record on November 24, 2003.

On
November 5, 2003, the Company announced that its Board of Directors expects to increase the Company's quarterly Class A and Class B common stock dividend by 20.0%
to $0.18 per share beginning in March 2004.





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

Some of the information in this Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts
included in this Form 10-Q, including, without limitation, certain statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations", may
constitute forward-looking statements. In some cases you can identify these "forward-looking statements" by words like "may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential" or "continue" or the negative of those words and other comparable words. These forward-looking statements involve risks and uncertainties. Our actual results could
differ materially from those indicated in these statements as a result of certain factors as more fully discussed under the heading "Risk Factors" contained in our Annual Report on
Form 10-K filed on March 26, 2003 with the Securities and Exchange Commission (File No. 001-31315) for the Company's fiscal year ended December 26,
2002. The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included herein.

Overview

We are the largest domestic motion picture exhibitor with 6,061 screens in 555 theatres in 39 states as of September 25, 2003. We conduct our operations
primarily through our wholly owned subsidiaries, Regal Cinemas, United Artists, Edwards, Hoyts 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 the emergence from bankruptcy
reorganization on March 2, 2001 of the United Artists Bankrupt Entities (as defined in Note 1 to the accompanying unaudited condensed consolidated financial statements) and on
September 29, 2001 of the Edwards Bankrupt Entities (as defined in Note 1 to the accompanying unaudited condensed consolidated financial statements). On January 29, 2002, Anschutz
acquired a controlling equity interest in Regal Cinemas, Inc. when the Regal Cinemas, Inc. Bankrupt Entities (as defined in Note 1 to the accompanying unaudited condensed
consolidated financial statements) 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 consolidated financial statements reflect the results of operations of United Artists, Edwards and Regal Cinemas from the dates Anschutz acquired its controlling equity
interests in these entities. These controlling equity interests have been recorded in the Company's consolidated financial statements at Anschutz's combined historical cost basis. Accordingly, the
Company's unaudited condensed consolidated financial statements for fiscal 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).

On
March 28, 2003, Regal acquired Hoyts. Accordingly, the results of operations of the acquired Hoyts theatre locations have been included in the accompanying financial statements
for the periods subsequent to the acquisition date of March 28, 2003.

The
Company generates revenues primarily from admissions and concession sales. Additional revenues are generated by on-screen advertisements, the rental of theatres for
business meetings and


other events by Regal CineMedia, electronic video games located adjacent to the lobbies of certain of the Company's theatres and vendor marketing programs. Film rental costs depend on the popularity
of a film and the length of time since the film's release and generally decline as a percentage of admission revenues the longer a film is in exhibition. Because the Company purchases certain
concession items, such as fountain drinks and popcorn, in bulk and not pre-packaged for individual servings, the Company is able to improve its margins by negotiating volume discounts.
Other operating expenses consist primarily of theatre labor and occupancy costs.



Our significant accounting policies are described in Note 2 to the consolidated financial statements included in Item 8 of our 2002 Annual Report on
Form 10-K. Our financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make
estimates and assumptions that affect the reported amounts of the assets and liabilities and disclosures of contingent assets and liabilities as of the date of the balance sheet as well as the
reported amounts of revenues and expenses during the reporting period. We routinely make estimates and judgments about the carrying value of our assets and liabilities that are not readily apparent
from other sources. The Company evaluates and modifies on an ongoing basis such estimates and assumptions which includes, but are not limited to, those related to film costs, property and equipment,
goodwill, income taxes and reorganization and purchase accounting.
Estimates and assumptions are based on historical and other factors believed to be reasonable under the circumstances. The results of these estimates may form the basis of the carrying value of
certain assets and liabilities. Actual results, under conditions and circumstances different from those assumed, may differ from estimates. The impact and any associated risks related to estimates,
assumptions, and accounting policies are discussed within Management's Discussion and Analysis of Financial Condition and Results of Operations, as well as in the Notes to the Unaudited Condensed
Consolidated Financial Statements, if applicable, where such estimates, assumptions, and accounting policies affect the Company's reported and expected results.

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



Results of Operations for the quarters and three quarters ended September 25, 2003 and September 26, 2002

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 25, 2003 and September 26, 2002.

|                                                                                  |  | Quarter Ended
September 25,
2003 |   | Quarter Ended
September 26,
2002 |   | Three Quarters
Ended
September 25,
2003 |   | Three Quarters
Ended
September 26,
2002 |  
|--------------------------------------------------------------------------------- |  | -------------------------------- | - | -------------------------------- | - | --------------------------------------- | - | --------------------------------------- | -
|Revenues:                                                                         |  |                                  |   |                                  |   |                                         |   |                                         |  
|Admissions                                                                        |  | 67.6                             | % | 67.7                             | % | 67.9                                    | % | 67.9                                    | %
|Concessions                                                                       |  | 25.5                             |   | 27.7                             |   | 26.1                                    |   | 27.9                                    |  
|Other operating revenues                                                          |  | 6.9                              |   | 4.6                              |   | 6.0                                     |   | 4.2                                     |  
|                                                                                  |  |                                  |   |                                  |   |                                         |   |                                         |  
|Total revenues                                                                    |  | 100.0                            |   | 100.0                            |   | 100.0                                   |   | 100.0                                   |  
|Operating expenses:                                                               |  |                                  |   |                                  |   |                                         |   |                                         |  
|Film rental and advertising costs                                                 |  | 35.8                             |   | 36.3                             |   | 36.6                                    |   | 36.8                                    |  
|Cost of concessions                                                               |  | 3.7                              |   | 3.9                              |   | 3.7                                     |   | 4.0                                     |  
|Rent expense                                                                      |  | 11.4                             |   | 11.3                             |   | 11.3                                    |   | 11.4                                    |  
|Other operating expenses                                                          |  | 24.9                             |   | 24.7                             |   | 24.7                                    |   | 23.6                                    |  
|General and administrative                                                        |  | 2.5                              |   | 2.9                              |   | 2.6                                     |   | 3.2                                     |  
|Merger and restructuring expenses and amortization of deferred stock compensation |  | 0.3                              |   | 0.6                              |   | 0.4                                     |   | 1.0                                     |  
|Depreciation and amortization                                                     |  | 6.3                              |   | 6.2                              |   | 6.4                                     |   | 6.2                                     |  
|Loss (gain) on disposal and impairment of operating assets                        |  | (0.1                             | ) | 0.6                              |   | (0.2                                    | ) | 0.2                                     |  
|                                                                                  |  |                                  |   |                                  |   |                                         |   |                                         |  
|Total operating expenses                                                          |  | 84.8                             |   | 86.5                             |   | 85.5                                    |   | 86.4                                    |  
|                                                                                  |  |                                  |   |                                  |   |                                         |   |                                         |  
|Operating income                                                                  |  | 15.2                             | % | 13.5                             | % | 14.5                                    | % | 13.6                                    | %
|                                                                                  |  |                                  |   |                                  |   |                                         |   |                                         |  



Total Revenues

The
following table summarizes certain revenues and revenue-related data for the quarter ended September 25, 2003 ("Q3 2003 period"), the quarter ended September 26, 2002
("Q3 2002 period"), the three quarters ended September 25, 2003 ("Fiscal 2003 period"), and the three quarters ended September 26, 2002 ("Fiscal 2002 period") (in millions, except
attendance and average prices):

|                              |                | Q3 2003 period |        | Q3 2002 period |   | Fiscal 2003
period |       | Fiscal 2002
period
|----------------------------- | -------------- | -------------- | ------ | -------------- | - | ------------------ | ----- | ------------------
|Admissions                    |                | $              | 425.7  |                | $ | 387.1              |       | $                 
|Concessions                   |                |                | 160.9  |                |   | 158.5              |       |                   
|Other operating revenues      |                |                | 43.3   |                |   | 25.9               |       |                   
|                              |                |                |        |                |   |                    |       |                   
|                              | Total revenues |                | $      | 629.9          |   | $                  | 571.5 |                   
|Attendance (in thousands)     |                |                | 66,387 |                |   | 64,566             |       |                   
|Average ticket price          |                | $              | 6.41   |                | $ | 6.00               |       | $                 
|Average concession per patron |                | $              | 2.42   |                | $ | 2.45               |       | $                 

Admissions

Total
admissions revenues increased $38.6 million, or 10.0%, to $425.7 million for the Q3 2003 period, from $387.1 million for the Q3 2002 period. The increase in
admissions revenues in the Q3 2003 period compared to Q3 2002 period was primarily attributable to a 6.8% increase in ticket prices coupled with a 2.8% increase in attendance, which is attributable to
the inclusion of Hoyts from March 28, 2003. Excluding the effects of Hoyts, attendance for the Q3 2003 period was approximately 61.1 million, a 5.4% decrease from the Q3 2002 period.

Total
admissions revenues increased $144.0 million, or 13.3%, to $1,226.9 million for the Fiscal 2003 period, from $1,082.9 million for the Fiscal 2002 period. The
increase in admissions revenues in the Fiscal 2003 period compared to the Fiscal 2002 period was primarily attributable to a 6.2% increase in ticket prices coupled with an 6.6% increase in attendance,
which is principally related to the inclusion of Regal Cinemas and United Artists for a full three quarters in the Fiscal 2003 period and the inclusion of Hoyts from March 28, 2003. The Fiscal
2002 period includes the results of United Artists from January 4, 2002 and Regal Cinemas from January 24, 2002. Excluding the effects of Hoyts, attendance for the Fiscal 2003 period was
approximately 182.7 million, a 0.7% increase from the Fiscal 2002 period.

Concessions

Total concessions revenues increased $2.4 million, or 1.5%, to $160.9 million for the Q3 2003 period, from $158.5 million for the Q3 2002
period. The increase in concessions revenues in the Q3 2003 period compared to the Q3 2002 period was due to a 2.8% increase in attendance, which is attributable to the inclusion of Hoyts from
March 28, 2003, as discussed above, offset by a 1.2% decrease in average concessions per patron.

Total
concessions revenues increased $26.6 million, or 6.0%, to $471.1 million for the Fiscal 2003 period, from $444.5 million for the Fiscal 2002 period. The
increase in concessions revenues in the Fiscal 2003 period compared to the Fiscal 2002 period was due to a 6.6% increase in attendance, which is primarily attributable the inclusion of Regal Cinemas
and United Artists for a full three quarters in the Fiscal 2003 period and the inclusion of Hoyts from March 28, 2003, as discussed above.

Other Operating Revenues

Total other operating revenues increased $17.4 million, or 67.2%, to $43.3 million for the Q3 2003 period, from $25.9 million for the Q3 2002
period. Total other operating revenues increased



$41.7 million, or 62.8%, to $108.1 million for the Fiscal 2003 period, from $66.4 million for the Fiscal 2002 period. Included in other operating revenues are
on-screen advertising revenues, meetings and events and other marketing revenues from certain of the Company's vendor marketing programs. The increase in other operating revenues was
primarily attributable to the inclusion of Hoyts from March 28, 2003, increases in advertising and meetings revenues generated by Regal CineMedia and to a lesser extent, increases in the
Company's revenues from vendor marketing programs during the Q3 2003 and Fiscal 2003 periods.

Operating Expenses

The following table summarizes certain theatre operating expenses for the Q3 2003, Q3 2002, Fiscal 2003, and Fiscal 2002 periods (dollars in millions):

|                                      |  | Q3 2003 period |  | Q3 2002 period |  | Fiscal 2003 period |  | Fiscal 2002 period
|------------------------------------- |  | -------------- |  | -------------- |  | ------------------ |  | ------------------
|
|Film rental and advertising costs(1)  |  | 225.8          |  | 53.0           |  | 207.2              |  | 53.5              
|Cost of concessions(2)                |  | 23.4           |  | 14.5           |  | 22.3               |  | 14.1              
|Rent expense(3)                       |  | 71.5           |  | 11.4           |  | 64.7               |  | 11.3              
|Other operating expenses(3)           |  | 156.9          |  | 24.9           |  | 141.3              |  | 24.7              
|General and administrative expense(3) |  | 15.9           |  | 2.5            |  | 16.6               |  | 2.9               

---

Film Rental and Advertising Costs

Film rental and advertising costs increased $18.6 million, or 9.0%, to $225.8 million in the Q3 2003 period, from $207.2 million in the Q3
2002 period. Film rental and advertising costs as a percentage of admissions revenues decreased slightly to 53.0% during the Q3 2003 period from 53.5% in the Q3 2002 period as a result of product mix.
Film rental and advertising costs increased $74.9 million, or 12.8%, to $661.2 million in the Fiscal 2003 period, from $586.3 million in the Fiscal 2002 period. Film rental and
advertising costs as a percentage of admissions revenues decreased slightly to 53.9% in the Fiscal 2003 period as compared to 54.1% in the Fiscal 2002 period as a result of product mix. The increase
in film rental and advertising costs during the Q3 2003 and Fiscal 2003 periods was primarily attributable to the inclusion of Regal Cinemas and United Artists for a full three quarters in the Fiscal
2003 period and the inclusion of Hoyts from March 28, 2003.

Cost of Concessions

Cost of concessions increased $1.1 million, or 4.9%, to $23.4 million in the Q3 2003 period, from $22.3 million in the Q3 2002 period. Cost
of concessions as a percentage of concessions revenues increased to 14.5% in the Q3 2003 period as compared to 14.1% in the Q3 2002 period. The increase in cost of concessions as a percentage of
revenues in the Q3 2003 period was largely attributable to product mix. Cost of concessions increased $2.8 million, or 4.4%, to $66.8 million in the Fiscal 2003 period, from
$64.0 million in the Fiscal 2002 period. Cost of concessions as a percentage of concessions revenues decreased to 14.2% in the Fiscal 2003 period as compared to 14.4% in the Fiscal 2002 period.
The decrease in the cost of concessions in the Fiscal 2003 period as a percentage of concessions revenues is primarily attributable to the realization of operating efficiencies realized through the
2002 integration of Regal Cinemas, United Artists and Edwards.

Rent Expense

Rent expense increased $6.8 million, or 10.5%, to $71.5 million in the Q3 2003 period from $64.7 million in the Q3 2002 period. Rent expense
as a percentage of total revenues was 11.4% and 11.3% for the Q3 2003 and Q3 2002 periods, respectively. Rent expense increased $23.1 million, or 12.7%, to $204.9 million in the Fiscal
2003 period from $181.8 million in the Fiscal 2002 period. Rent expense as a percentage of total revenues was 11.3% and 11.4% for the Fiscal 2003 and Fiscal 2002 periods respectively. The
increase in rent expense in the Q3 2003 and Fiscal 2003 periods was primarily attributable to the inclusion of Hoyts from March 28, 2003 and Regal Cinemas and United Artists for a full three
quarters in the Fiscal 2003 period.

Other Operating Expenses

Other operating expenses increased $15.6 million, or 11.0%, to $156.9 million in the Q3 2003 period, from $141.3 million in the Q3 2002
period. Other operating expenses as a percentage of total revenues increased slightly to 24.9% in the Q3 2003 period as compared to 24.7% in the Q3 2002 period. Other operating expenses increased
$70.4 million, or 18.7%, to $446.3 million in the Fiscal 2003 period, from $375.9 million in the Fiscal 2002 period. Other operating expenses as a percentage of total revenues
rose to 24.7% in the Fiscal 2003 period as compared to 23.6% in the Fiscal 2002 period. The increase in total other operating expenses in the Q3 2003 and Fiscal 2003 periods was primarily attributable
to incremental costs associated with the inclusion of Hoyts from March 28, 2003 and a full three quarters of Regal Cinemas and United Artists for the Fiscal 2003 period coupled with incremental
expenses associated with Regal CineMedia, which did not begin substantive operations until the second quarter of 2002. Such increases are partially offset by operating efficiencies realized through
the 2002 integration of Regal Cinemas, United Artists and Edwards.

General and Administrative Expenses

General and administrative expenses decreased $0.7 million, or 4.2%, to $15.9 million during the Q3 2003 period, from $16.6 million in the Q3
2002 period. As a percentage of total revenues, general and administrative expenses were approximately 2.5% and 2.9% in the Q3 2003 and Q3 2002 periods, respectively. General and administrative
expenses decreased $4.0 million, or 8.0%, to $46.3 million during the Fiscal 2003 period, from $50.3 million in the Fiscal 2002 period. As a percentage of total revenues, general
and administrative expenses were approximately 2.6% and 3.2% in the Fiscal 2003 and Fiscal 2002 periods, respectively. The decrease during the Q3 2003 and Fiscal 2003 periods was primarily
attributable to operating efficiencies realized through the 2002 integration of Regal Cinemas, United Artists and Edwards.

Depreciation and Amortization

Depreciation and amortization increased $4.2 million, or 11.8%, to $39.7 million in the Q3 2003 period, from $35.5 million in the Q3 2002
period. Depreciation and amortization increased $16.4 million, or 16.6%, to $114.9 million in the Fiscal 2003 period, from $98.5 million in the Fiscal 2002 period. The increase
during the Q3 2003 and Fiscal 2003 periods in depreciation and amortization is primarily due to the inclusion of Hoyts from March 28, 2003 and a full three quarters of Regal Cinemas and United
Artists for the Fiscal 2003 period.

Operating Income

Operating income totaled approximately $95.5 million for the Q3 2003 period. The reported operating income for the Q3 2003 period represents an increase of
$18.2 million from operating income of $77.3 million in the Q3 2002 period. Operating income totaled approximately $261.4 million for the Fiscal 2003 period, which represents an
increase of $44.3 million from $217.1 in the Fiscal 2002 period.


The increase in operating income during the Fiscal 2003 period is primarily attributable to the growth in total revenues as a result of the inclusion of Regal Cinemas and United Artists for a full
three quarters in the Fiscal 2003 period and the results of Hoyts from March 28, 2003, coupled with the realized benefits associated with the 2002 integration of Regal Cinemas, United Artists
and Edwards. The increase in operating income during the Q3 2003 and Fiscal 2003 periods was also attributable to a reduction of merger and restructuring expenses, partially offset by increases in
certain other operating expense items described in previous sections.

Interest Expense

Interest expense increased $6.8 million, or 45.3%, to $21.8 million in the Q3 2003 period, from $15.0 million in the Q3 2002 period.
Interest expense increased $4.1 million, or 8.8%, to $50.9 million in the Fiscal 2003 period, from $46.8 million in the Fiscal 2002 period. The increase in interest expense in the
Q3 2003 and Fiscal 2003 periods is principally due to higher outstanding indebtedness for the Q3 2003 and Fiscal 2003 periods as a result of the financing arrangements consummated in the Q2 2003
period in connection with the extraordinary dividend transaction.

Income Taxes

The provision for income taxes of $29.4 million and $23.8 million for the Q3 2003 and Q3 2002 periods reflect effective tax rates of approximately
39.9% and 39.7%, respectively. The provision for income taxes of $83.5 million and $68.6 million for the Fiscal 2003 and Fiscal 2002 periods reflect effective tax rates of approximately
39.7% and 44.5%, respectively. Excluding the effects of minority interest in earnings of consolidated subsidiaries recorded in the accompanying unaudited condensed consolidated statements of
operations for the Q3 2003 and Q3 2002 periods and the Fiscal 2003 and Fiscal 2002 periods, the Company's effective tax rates were approximately 39.9% and 38.2%, 39.6% and 40.7%, respectively. The
Fiscal 2002 effective tax rates also reflected the impact of certain non-deductible merger expenses.

Net Income

Net income totaled $44.2 million for the Q3 2003 period. The reported net income for the Q3 2003 period represents an increase of $8.1 million from
$36.1 million in the Q3 2002 period. Net income totaled $126.6 million for the Fiscal 2003 period, which represents an increase of $69.3 million from $57.3 million in the
Fiscal 2002 period.



EBITDA (earnings before interest, taxes, depreciation and amortization) was approximately $135.1 million, or 21.4% of total revenues, for the Q3 2003
period. We believe EBITDA provides a useful measure of liquidity for our investors because EBITDA is an industry comparative measure of liquidity prior to the payment of interest and taxes and because
it is a primary financial measure used by management to assess the performance and liquidity of our Company. EBITDA is not a measurement of liquidity or 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 this quarterly report on Form 10-Q. EBITDA, as calculated, may not be comparable to
similarly titled measures reported by other companies. For the Q3 2003 period, the Company reported total revenues, operating income and net



income of $629.9 million, $95.5 million and $44.2 million, respectively. In addition, the Company generated $27.6 million of cash flows from operations for the Q3 2003
period. A reconciliation of net cash provided by operating activities to EBITDA and net income is calculated as follows:

Q3 2003 period(in millions)Net cash provided by operating activities

$
27.6Changes in working capital items and other


67.9Operating income


95.5Depreciation and amortization


39.7Minority interest and other, net


(0.1
)EBITDA


135.1Depreciation and amortization


(39.7
)Interest expense, net


(21.8
)Provisions for income taxes


(29.4
)Net income

$
44.2




Cash flows generated from operating activities were approximately $267.6 million for the Fiscal 2003 period compared to approximately $235.1 million
for the Fiscal 2002 period. The increase was attributable to increases in net income, decreases in certain non-cash items and increases in certain working capital items. Capital
expenditures were $89.8 million for the Fiscal 2003 period compared to $60.7 million for the Fiscal 2002 period. The increase is primarily due to the inclusion of Hoyts from
March 28, 2003 and a full three quarters of operations of Regal Cinemas and United Artists during the Fiscal 2003 period coupled with incremental capital expenditures associated with Regal
CineMedia, which did not begin substantive operations until the second quarter of 2002. Cash flows used in investing activities for the Fiscal 2003 period also reflect approximately
$97.6 million of net cash used to acquire Hoyts. Cash flows used in financing activities were approximately $245.2 million for the Fiscal 2003 period compared to cash flows used in
financing activities of approximately $12.3 million for the Fiscal 2002 period. The net increase in cash flows used in financing activities during the Fiscal 2003 period is primarily
attributable to the financing transactions and related payment of the extraordinary dividend.



The Company conducts its operations through its subsidiaries: Regal Cinemas, United Artists, Edwards, Hoyts 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, general corporate purposes related to corporate operations and the Company's quarterly dividend. The Company's
principal sources of liquidity are from its operating subsidiaries. In the Company's operating subsidiaries, principal uses of cash will be for operating expenses, capital expenditures, and debt
service. The principal sources of liquidity for the Company's subsidiaries are cash generated from their operations, cash on hand and the revolving credit facilities provided for under Regal Cinemas'
third amended and restated credit agreement.

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





The Company funds the cost of its operating subsidiaries' capital expenditures through internally generated cash flow, cash on hand and financing activities. The Company's capital
requirements have historically arisen principally in connection with acquisitions of theatres, new theatre openings, adding new screens to existing theatres, upgrading the Company's theatre facilities
and replacing equipment. The Company intends to continue to grow its theatre circuit through selective expansion and acquisition opportunities. The Company currently expects capital expenditures for
theatre development, replacement, expansion, upgrading and maintenance to be in the range of $70 million to $80 million in 2003. In addition to capital expenditures associated with its
theatre operations, the Company expects to incur capital expenditures of approximately $50 million in connection with Regal CineMedia during 2003. The Company anticipates a significant portion
of the Regal CineMedia capital expenditures to be made in connection with the development and deployment of the digital content network to provide advertising and promotional services and to
distribute various forms of digital programming. During the three quarters ended September 25, 2003, the Company invested an aggregate of approximately $89.8 million in capital
expenditures.

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

On
August 16, 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. The $22.3 million difference between the carrying amount and purchase price of
the minority interest was recorded as a component of goodwill.

On
March 28, 2003, the Company completed its acquisition of certain theatre operations of Hoyts representing a total of 52 theatres and 554 screens located in 10 states in the
Northeastern United States for an aggregate purchase price of $213.1 million. The purchase price included cash of approximately $100.0 million, the issuance of 4,761,904 shares of
Regal's Class A common stock to HUSH with an aggregate fair value of $88.1 million and the assumption of certain capital lease obligations with an aggregate fair value of approximately
$25.0 million.

On
May 23, 2003, all outstanding warrants held by Anschutz to purchase a total of 3,928,185 shares of Class B common stock and warrants held by certain other investors to
purchase a total of 296,129 shares of Class A common stock were exercised at exercise prices of $8.88 per share. Proceeds from the transactions totaled approximately $37.5 million.

On
June 10, 2003, Regal declared an extraordinary cash dividend of $5.05 per share on each outstanding share of its Class A and Class B common stock. Stockholders of
record at the close of business on June 20, 2003 were paid this dividend on July 1, 2003. Sources used to fund the approximate $716.0 million extraordinary dividend included cash
on hand of approximately $190.6 million, the net proceeds of $310.8 million from the term loan under the amended and restated Regal Cinemas senior credit facility and the net proceeds of
$214.6 million from the issuance by Regal of $240.0 million 33/4% Convertible Senior Notes. The dividend was recorded as a reduction of retained earnings (reduced to zero
as of June 10, 2003) and additional paid-in capital upon declaration. As a result of this additional indebtedness, our principal and interest payment obligations will increase
substantially. The degree to which we will be leveraged could materially and adversely affect our ability to obtain financing for working capital, acquisitions or other purposes and could make us more
vulnerable to industry downturns and competitive pressures. Our ability to meet our debt service obligations will be dependent upon our future performance, which will be subject to financial, business
and other factors affecting our operations, many of which are beyond our control.

Concurrent
with the issuance of Regal's 33/4% Convertible Senior Notes, we entered into convertible note hedge and warrant transactions with respect to our Class A
common stock in order to


reduce the potential dilution from conversion of the notes into shares of our Class A common Stock. The net cost of the convertible note hedge and warrant transactions was approximately
$18.8 million and is included as a component of equity in the accompanying unaudited condensed consolidated balance sheet as of September 25, 2003. See Note 4 to the accompanying
unaudited condensed consolidated financial statements for further description of the above debt facilities and the related convertible note hedge and warrant transactions.

The
$240 million Convertible Senior Notes discussed in Note 4 allow us to settle any conversion, and we have the ability and intent to settle any conversion, by remitting
to the note holder the accreted value of the note in cash, while settling the conversion spread (the excess conversion value over the accreted value) in the shares of our Class A common stock.
Based upon our ability to generate cash flow from operations, our financial capacity and ability to raise capital, we believe that we have the ability to generate the liquidity necessary to settle in
cash the principal amount of the Convertible Senior Notes upon a conversion event.

During
the three quarters ended September 25, 2003, we paid three quarterly cash dividends of $0.15 per share of Class A and Class B common stock, or
$62.3 million in the aggregate, to our stockholders of record. On October 21, 2003, the Company 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 12, 2003, to stockholders of record on November 24, 2003. On November 5, 2003, the Company announced that its Board of
Directors expects to increase the Company's quarterly Class A and Class B common stock dividend by 20.0% to $0.18 per share beginning in March 2004. We, at the discretion of the
board of directors and subject to applicable law, anticipate paying regular quarterly dividends on our 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 our 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 25, 2003, Regal Cinemas had $145 million available under its undrawn senior revolving credit facility, $523.1 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 letters of credit of $30 million (of which
approximately $15.9 million was outstanding as of September 25, 2003), which reduces the availability under its senior revolving credit facility.



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

|                                   |  | Payments Due By Period
|---------------------------------- |  | ----------------------
|
|Contractual Cash Obligations       |  |                       
|Long-term debt                     |  | $                     
|Capital lease obligations          |  |                       
|Lease financing arrangements       |  |                       
|Bankruptcy claims and liabilities  |  |                       
|Other long term obligations        |  |                       
|Operating leases                   |  |                       
|                                   |  |                       
|Total contractual cash obligations |  | $                     
|                                   |  |                       

|                                |  | Amount of Commitment Expiration per Period
|------------------------------- |  | ------------------------------------------
|
|Other Commercial Commitments    |  |                                           
|Total commercial commitments(1) |  | $                                         
|                                |  |                                           

---

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



Regal Cinemas, Inc. and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At
September 25, 2003, Regal Cinemas had accrued approximately $3.6 million for the estimated costs to resolve such bankruptcy claims. In the opinion of management, based on its examination
of these matters, its experience to date and discussions with legal counsel, the outcome of these legal matters, after taking into consideration the amounts already accrued, is not expected to have a
material effect on the Company's liquidity or results of operations. To the extent these claims are allowed by the applicable bankruptcy court, they will be funded with cash on hand, cash flow from
operations or borrowings under Regal Cinemas' revolving credit facility. In addition to these sources of funding, with respect to allowed Edwards claims, they may also be funded from restricted cash
that has been set aside, and, if the allowed Edwards claims exceed $55 million, from contributions by Anschutz and Oaktree's Principal Activities Group. The timing of payment on these claims
will depend upon the resolution of these claims.

Recent Accounting Pronouncements

Effective December 27, 2002, the Company adopted SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 establishes
accounting standards for recognition and


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

In
April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections."
SFAS No. 145 updates, clarifies and simplifies existing accounting pronouncements including the rescission of Statement 4, which required all gains and losses from extinguishments of debt to be
aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in APB Opinion No. 30 will now be used to classify those gains and
losses. As a result of the Company's adoption of SFAS No. 145 on December 27, 2002, the extraordinary gain from debt extinguishment during fiscal 2002 has been reclassified to earnings
from continuing operations.

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

In
November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness
of Others." This interpretation will significantly change current practice in the accounting for, and disclosure of, guarantees. Guarantees meeting the characteristics described in the interpretation
are required to be initially recorded at fair value, which is different from general current practice of recognition of a liability only when loss is probable and reasonably estimable, as prescribed
in SFAS No. 5, "Accounting for Contingencies." The interpretation also requires a guarantor to make significant new disclosures for virtually all guarantees even if the likelihood of the
guarantor's having to make payments under the guarantee is remote. The disclosure requirements in this interpretation were effective for financial statements of interim or annual periods ending after
December 15, 2002. The initial recognition and initial measurement provisions of this interpretation are applicable on a prospective basis to guarantees issued or modified after
December 31, 2002, irrespective of the guarantor's fiscal
year-end. The adoption of this interpretation did not have a material impact on the Company's financial position or results of operations.

In
January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entitiesan Interpretation of ARB No. 51." This
interpretation addresses consolidation by business enterprises of entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Variable interest entities are required to be consolidated by their
primary beneficiaries if they do not effectively disperse risks among parties involved. The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity's
expected losses or receives a majority of its expected residual returns. The consolidation requirements of this interpretation apply immediately to variable interest entities created after
January 31, 2003 and apply to existing entities for interim or annual periods ending after December15, 2003. Certain new disclosure requirements apply to all financial statements issued after
January 31, 2003. The adoption of this interpretation is not expected to have a material impact on the Company's financial position or results of operations.

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

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

Seasonality

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

Item 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's market risk is confined to interest rate exposure of its and its wholly owned subsidiaries' debt obligations that bear interest based on floating
rates. The third amended and restated credit agreement provides for variable rate interest that could be adversely affected by an increase in interest rates. As of September 25, 2003, term
borrowings of $523.1 million under the third amended and restated credit agreement were outstanding. Borrowings under this facility bear interest, at the


Company's option, at either a base rate (which is the higher of the prime rate of British Banking Association's or the federal funds rate plus 0.5%) or the Eurodollar rate plus, in each case, an
applicable margin. The applicable margin can range from 1.50% to 3.25% for the revolving credit facility and 2.25% to 2.50% for the term loan facility. The borrowings outstanding under the New Term
Loan D facility currently bear interest of approximately 3.6%. A one-half percent rise in the interest rate on the Company's variable rate indebtedness held at September 25,
2003, would have increased reported interest expense by approximately $654,000 for the quarter ended September 25, 2003.

Item 4.  CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit
to the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified by the Commission's
rules and forms, and that information is accumulated and communicated to our management, including our principal executive and principal financial officers (whom we refer to in this periodic report as
our Certifying Officers), as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Certifying Officers, the effectiveness of our
disclosure controls and procedures as of September 25, 2003, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded
that, as of September 25, 2003, our disclosure controls and procedures were effective.

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



PART IIOTHER INFORMATION

Item 1.  LEGAL PROCEEDINGS

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

Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

On July 9, 2003, Regal sold 2,451,441 shares of its Class A common stock to one of its stockholders, GSCP Recovery, Inc., receiving aggregate
offering proceeds of approximately $46.6 million. The shares were sold to a single accredited investor in a private placement transaction not involving any public offering that was exempt from
the registration requirements of the Securities Act of 1933, as amended, pursuant to section 4(2) thereof. Additional detail regarding this transaction is disclosed in Note 1 to the
accompanying unaudited condensed consolidated financial statements and is incorporated herein by reference.

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                  
|----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1         |  | Third Amended and Restated Credit Agreement, dated as of August 27, 2003, among Regal Cinemas, Regal Cinemas, Inc., the several lenders from time to time parties thereto, Lehman Commercial Paper Inc., as
Administrative Agent, Credit Suisse First Boston, acting through its Cayman Islands Branch, as Syndication Agent, Sole Advisor, Sole Lead Arranger and Sole Book Manager.
|31.1        |  | Rule 13a-14(a) Certification of Co-Chief Executive Officer of Regal                                                                                                                                                                                                                                                                                                                  
|31.2        |  | Rule 13a-14(a) Certification of Co-Chief Executive Officer of Regal                                                                                                                                                                                                                                                                                                                  
|31.3        |  | Rule 13a-14(a) Certification of Chief Financial Officer of Regal                                                                                                                                                                                                                                                                                                                     
|32          |  | Section 1350 Certifications                                                                                                                                                                                                                                                                                                                                                          





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 10, 2003 |  | By:                      
|Date: November 10, 2003 |  | By:                      
|Date: November 10, 2003 |  | By:                      



REGAL ENTERTAINMENT GROUP
Exhibit Index

|Exhibit No. |  | Exhibit Description                                                                                                                                                                                                                                                                                                                                                                 
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4.1         |  | Third Amended and Restated Credit Agreement, dated as of August 27, 2003, among Regal Cinemas, Regal Cinemas, Inc., the several lenders from time to time parties thereto, Lehman Commercial Paper Inc., as
Administrative Agent, Credit Suisse First Boston, acting through its Cayman Islands Branch, as Syndication Agent, Sole Advisor, Sole Lead Arranger and Sole Book Manager
|31.1        |  | Rule 13a-14(a) Certification of Co-Chief Executive Officer of Regal                                                                                                                                                                                                                                                                                                                 
|31.2        |  | Rule 13a-14(a) Certification of Co-Chief Executive Officer of Regal                                                                                                                                                                                                                                                                                                                 
|31.3        |  | Rule 13a-14(a) Certification of Chief Financial Officer of Regal                                                                                                                                                                                                                                                                                                                    
|32          |  | Section 1350 Certifications