-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QX9pr8EBZ09G/aNTGMcpproYyYpuNqJpBXQbP+8TvE1zkh+Sqql9pAlA0oKcOqK/ IeXnA9o1GsKn8W5zQuuBzg== 0000912057-02-018496.txt : 20020506 0000912057-02-018496.hdr.sgml : 20020506 ACCESSION NUMBER: 0000912057-02-018496 CONFORMED SUBMISSION TYPE: S-1/A PUBLIC DOCUMENT COUNT: 24 FILED AS OF DATE: 20020506 FILER: COMPANY DATA: COMPANY CONFORMED NAME: REGAL ENTERTAINMENT GROUP CENTRAL INDEX KEY: 0001168696 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE THEATERS [7830] STATE OF INCORPORATION: DE FISCAL YEAR END: 1229 FILING VALUES: FORM TYPE: S-1/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-84096 FILM NUMBER: 02634339 BUSINESS ADDRESS: STREET 1: 9110 NICHOLS AVE STREET 2: STE 200 CITY: ENGLEWOOD STATE: CO ZIP: 80112 BUSINESS PHONE: 3037923600 MAIL ADDRESS: STREET 1: 9110 NICHOLS AVE STREET 2: STE 200 CITY: ENGLEWOOD STATE: CO ZIP: 80112 S-1/A 1 a2078602zs-1a.htm S-1/A
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As filed with the Securities and Exchange Commission on May 6, 2002

Registration No. 333-84096

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

REGAL ENTERTAINMENT GROUP
(Exact name of Registrant as specified in its charter)

Delaware	7832	02-0556934
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

9110 East Nichols Avenue, Suite 200
Centennial, CO 80112
(303) 792-3600
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive office)

Peter B. Brandow
Executive Vice President and General Counsel
9110 East Nichols Avenue, Suite 200
Centennial, CO 80112
(303) 792-3600
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Whitney Holmes, Esq.
Christopher J. Walsh, Esq.
Hogan & Hartson L.L.P.
1200 Seventeenth Street, Suite 1500
Denver, Colorado 80202
(303) 899-7300

Nicholas P. Saggese, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue
Suite 3400
Los Angeles, California 90071
(213) 687-5000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED MAY 6, 2002

18,000,000 Shares

LOGO

Class A Common Stock

Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price of our Class A common stock is expected to be between $16.00 and $18.00 per share. We have applied to list our Class A common stock on The New York Stock Exchange under the symbol "RGC."

Upon completion of this offering, Anschutz will own 81.7% of our Class B common stock. Each share of Class A common stock has one vote and each share of Class B common stock has ten votes on all matters to be voted on by our stockholders. Accordingly, following this offering, Anschutz will own common stock representing 77.5% of the combined voting power of our common stock.

The underwriters have an option to purchase a maximum of 2,700,000 additional shares from several of our stockholders to cover over-allotments of shares.

Investing in our Class A common stock involves risks. See "Risk Factors" on page 12.

		Price to Public		Underwriting Discounts and Commissions		Proceeds to Regal
Per Share		$		$		$
Total		$		$		$

Delivery of the shares of Class A common stock will be made on or about , 2002.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Credit Suisse First Boston		Lehman Brothers

Bear, Stearns & Co. Inc.		Salomon Smith Barney

The date of this prospectus is , 2002.

The largest domestic motion picture exhibitor
with 5,886 screens in 561 theatres in 36 states

TABLE OF CONTENTS

		PAGE
PROSPECTUS SUMMARY		1
RISK FACTORS		12
CAUTIONARY STATEMENT ABOUT FORWARD LOOKING STATEMENTS		22
ABOUT REGAL ENTERTAINMENT GROUP		23
USE OF PROCEEDS		25
DIVIDEND POLICY		25
CAPITALIZATION		26
DILUTION		28
REGAL ENTERTAINMENT GROUP UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS		29
SELECTED HISTORICAL FINANCIAL DATA FOR REGAL ENTERTAINMENT GROUP		38
SELECTED HISTORICAL FINANCIAL AND OTHER DATA FOR REGAL CINEMAS, INC.		39
SELECTED HISTORICAL FINANCIAL AND OTHER DATA FOR UNITED ARTISTS		41
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		44
BUSINESS		65
MANAGEMENT		78
RELATED PARTY TRANSACTIONS		84
PRINCIPAL AND SELLING STOCKHOLDERS		93
DESCRIPTION OF CAPITAL STOCK		97
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS TO NON-U.S. HOLDERS		102
SHARES ELIGIBLE FOR FUTURE SALE		105
UNDERWRITING		107
NOTICE TO CANADIAN RESIDENTS		110
LEGAL MATTERS		111
EXPERTS		111
WHERE YOU CAN FIND MORE INFORMATION		112
INDEX TO FINANCIAL STATEMENTS		F-1

You should rely only on the information contained in this document. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

MARKET INFORMATION

Information regarding market share, market position and industry data pertaining to our business contained in this prospectus consists of estimates based on data and reports compiled by industry professional organizations (including the Motion Picture Association of America and the National Association of Theatre Owners) and analysts, and our knowledge of our revenues and markets.

We take responsibility for compiling and extracting, but have not independently verified, market and industry data provided by third parties, or by industry or general publications, and take no further responsibility for such data. Similarly, while we believe our internal estimates are reliable, our estimates have not been verified by any independent sources, and we cannot assure you as to their accuracy.

Dealer Prospectus Delivery Obligation

Until , 2002, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PROSPECTUS SUMMARY

The information below is only a summary of more detailed information included in other sections of this prospectus. Unless otherwise indicated, all references in this prospectus to "we," "us," "our," "Regal" or "Regal Entertainment" mean Regal Entertainment Group and its subsidiaries, including Regal Cinemas Corporation, United Artists Theatre Company, Edwards Theatres, Inc. and Regal CineMedia Corporation. This summary may not contain all of the information that is important to you or that you should consider before buying shares in the offering. The information in other sections of this prospectus is important, so please read this entire prospectus carefully.

REGAL ENTERTAINMENT GROUP

We are a leading motion picture exhibitor operating the largest theatre circuit in the United States. Our nationwide theatre circuit, comprising Regal Cinemas Corporation, United Artists Theatre Company and Edwards Theatres, Inc., operates 5,886 screens in 561 theatres in 36 states. We operate approximately 17% of all screens in the United States, nearly twice as many screens as our nearest competitor. Our geographically diverse circuit includes theatres in 41 of the top 50 U.S. demographic market areas as well as prime locations in growing suburban markets. We believe that the size, reach and quality of our theatre circuit provide an exceptional platform to realize economies of scale in our theatre operations and capitalize upon high-margin ancillary revenue opportunities.

We have a stable, recurring and geographically diverse revenue base and high operating margins. On a pro forma basis for fiscal 2001, we generated total revenues, EBITDA and EBITDA margin of $2.0 billion, $358.0 million and 17.7%. Our strong cash flow from operations, combined with our limited need to make maintenance capital expenditures and our conservative capital structure, provide us with significant flexibility to capitalize on future growth opportunities.

Formation of Regal Entertainment

Each of United Artists, Edwards Theatres and Regal Cinemas are major motion picture theatre circuits. Anschutz acquired the controlling equity interests in each of United Artists, Edwards Theatres and Regal Cinemas, Inc. in connection with their separate bankruptcy reorganization proceedings. United Artists emerged from its reorganization proceedings in March 2001, Edwards Theatres emerged from its reorganization proceedings in September 2001 and Regal Cinemas, Inc. emerged from its reorganization proceedings in January 2002.

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

On April 12, 2002, Regal Entertainment closed a transaction in which, in exchange for shares of Class A and Class B common stock, and warrants to acquire Class A and Class B common stock, of Regal Entertainment,

•: Anschutz contributed its controlling common and preferred equity interests, and a warrant to acquire common equity interests, in United Artists and its controlling common equity interests in Edwards Theatres and Regal Cinemas to Regal Entertainment,
•: Oaktree's Principal Activities Group, ACE II LLC, Juniper Family Investments, LLC, Lydia K. Harvey Revocable Trust, GSCP Recovery, Inc., LB I Group, Inc., The Tudor BVI Global Portfolio Ltd., Tudor Proprietary Trading, L.L.C., Putnam High Yield Trust, Putnam High Yield Advantage Fund, Putnam Variable Trust—Putnam VT High Yield Fund, Putnam Master Income Trust, Putnam Premier Income Trust, Putnam Master Intermediate Income Trust, Putnam

Diversified Income Trust, Putnam Funds Trust—Putnam High Yield Trust II, Putnam Strategic Income Fund, Putnam Variable Trust—Putnam VT Diversified Income Fund, Travelers Series Fund Inc.—Putnam Diversified Income Portfolio, Putnam High Yield Fixed Income Fund, LLC and Putnam High Yield Managed Trust exchanged their common equity interests in Regal Cinemas,

•: Oaktree's Principal Activities Group, ACE II LLC, Juniper Family Investments, LLC, Lydia K. Harvey Revocable Trust and W. James Edwards, III exchanged their common equity interests in Edwards Theatres,
•: ACE II LLC, Juniper Family Investments, LLC and Lydia K. Harvey Revocable Trust exchanged their common and preferred equity interests, and their warrants to acquire common equity interests, in United Artists, and
•: Anschutz contributed its controlling preferred equity interest in, and outstanding indebtedness of, Next Generation Network to Regal CineMedia Corporation in exchange for Regal CineMedia's common stock and, in turn, contributed the common stock of Regal CineMedia to Regal Entertainment.

As the result of the transactions involved in the formation of Regal Entertainment, Anschutz holds 69,082,834 shares of Class B common stock of Regal Entertainment, or approximately 81.7% of our outstanding Class B common stock. After giving effect to this offering, the Class B common stock held by Anschutz will represent approximately 77.5% of the voting power of our outstanding voting stock. Anschutz will therefore be able to elect all of our directors.

After the consummation of the transactions involved in the formation of Regal Entertainment, Anschutz and Oaktree's Principal Activities Group continued to hold approximately $12.0 million of senior subordinated notes of Edwards Theatres and approximately $59.7 million of the preferred stock of Edwards Theatres and W. James Edwards, III and Mr. Edwards' sisters, Carole Ann Ruoff and Joan Edwards Randolph, continued to hold approximately $15.7 million of preferred stock of Edwards Theatres. The senior subordinated notes and preferred stock of Edwards Theatres were subsequently redeemed on April 17, 2002.

The reorganization proceedings of United Artists, Edwards Theatres and Regal Cinemas, Inc. had significant effects on the operations and financial condition of each company that may affect us in the future. For example, United Artists adopted "fresh start reporting" whereby its assets, liabilities and new capital structure were adjusted to reflect an estimated fair value of $360.0 million at the time of its emergence from reorganization proceedings. In addition, in connection with their reorganizations, each of United Artists, Edwards Theatres and Regal Cinemas, Inc. were able to selectively close under-performing theatres and negotiate rent reductions and lease termination rights, which improved the financial performance of their asset bases.

Our Industry

Overview. The domestic motion picture exhibition industry has historically maintained steady growth in revenues and attendance. Since 1965, total box office revenues have grown at a compound annual growth rate of approximately 6%, and annual attendance has grown to approximately 1.5 billion attendees. The industry has been relatively unaffected by downturns in the economic cycle, with total box office revenues and attendance growing in three of the last five recessions. In 2001, total box office revenues increased for the tenth consecutive year, rising approximately 10% to $8.4 billion, and attendance grew approximately 5% to 1.5 billion attendees.

Trends. We believe that the U.S. motion picture exhibition industry will benefit from the following trends:

•: Increased Marketing of New Releases by Studios. Movie studios have increased marketing expenditures per new film at a compound annual growth rate of approximately 10% since 1995.

Because domestic movie theatres are the primary distribution channel for domestic film releases, the theatrical success of a film is often the most important factor in establishing its value in other film distribution channels, including home video, cable television, broadcast television and international releases.

•: Affordable and Increasingly Attractive Form of Entertainment. We believe that patrons are attending movies more frequently because moviegoing is convenient, affordable and attractively priced relative to other forms of out-of-home entertainment. Since 1991, per capita movie attendance has grown from 4.5 to 5.3 times per year. Over this period, average ticket prices for movies have increased at a compound annual growth rate of only 3%, while ticket prices for professional sporting events and concerts have increased at approximately three times that rate.
•: Ongoing Screen Rationalization. In 2000 and 2001, substantially all of the major exhibitors reduced their expansion plans and implemented screen rationalization programs to close under-performing theatres. This screen count rationalization benefits exhibitors as patrons of closed theatres migrate to remaining theatres, thereby increasing industry-wide attendance per screen and operating efficiencies.
•: Model Facilities Lower Future Capital Requirements. We believe that the modern, 10 to 18 screen megaplex is the appropriate facility for most markets. Over the last several years, major exhibitors spent substantial capital upgrading their asset bases, including the development of the megaplex format and introducing enhanced amenities such as stadium seating and digital sound. Given the substantial capital spent on theatre circuit expansion and facilities upgrades, we believe that major exhibitors have reduced their capital spending for new theatre construction or further upgrades.

Competitive Strengths

We believe that the following competitive strengths position us well for future growth:

Industry Leader. We are the largest domestic motion picture exhibitor with nearly twice as many screens as our nearest competitor. We believe that the quality and size of our theatre circuit is a significant competitive advantage for negotiating attractive concession contracts and generating economies of scale. We believe that our leading position enables us to capitalize on favorable attendance trends, attractive consolidation opportunities and high-margin ancillary businesses.

Superior Management Drives Strong Operating Margins. We have developed a proven operating philosophy focused on efficient operations and strict cost controls at both the corporate and theatre levels. We have developed a highly efficient purchasing and distribution supply chain that generates favorable concession margins. On a pro forma basis for fiscal 2001, we generated EBITDA margin of 17.7% and EBITDA per screen of approximately $60,800.

Healthy Balance Sheet and Strong Cash Flow Generation. We believe that, as a result of the reduction of $811.1 million in total liabilities at United Artists for $263.5 million of cash and indebtedness, and preferred and common stock, of United Artists, $15.0 million in total liabilities at Edwards Theatres for preferred and common stock of Edwards Theatres, and $1,631.5 million in total liabilities at Regal Cinemas, Inc. for $181.1 million of cash and common stock of Regal Cinemas, Inc. and the elimination of accumulated deficits resulting from the reorganizations of United Artists, Edwards Theatres and Regal Cinemas, Inc., we have one of the most conservative capital structures among reporting exhibitors of motion pictures with pro forma as adjusted stockholders' equity of $1,091.3 million (net of an accumulated deficit caused by the redemption of preferred stock). By combining our capital structure with our operating margins and our limited need to make maintenance capital expenditures, we believe that we will generate significant cash flow from operations to take advantage of future growth opportunities.

Proven Acquisition and Integration Expertise. We have significant experience identifying, completing and integrating acquisitions of theatre circuits. We have demonstrated our ability to enhance revenues and realize operating efficiencies through the successful acquisition and integration of 11 theatre circuits since 1995. We have generally achieved immediate cost savings at acquired theatres and improved their profitability through the application of our consolidated operating functions and key supplier contracts.

Reorganizations Formed a Stronger Circuit with More Flexibility. Our theatre operations have recently completed reorganizations that have enabled us to improve our asset base and profitability. By selectively closing under-performing locations and negotiating rent reductions and lease termination rights, we have enhanced our operational flexibility and created competitive advantages over major theatre operators that have not entered or completed a bankruptcy reorganization process. At the same time, we are continuing to address significant claims against Edwards Theatres and Regal Cinemas, Inc. that arose in connection with their bankruptcy proceedings. Several of those claims may prove to result in significant payments to the claimants. We have recorded liabilities for these claims of $113.5 million as of December 27, 2001. To the extent these claims are allowed by the bankruptcy court, they will be funded with $28.1 million of restricted cash that has been set aside, cash on hand, cash flow from operations or borrowings under Regal Cinemas' revolving credit facility.

Quality Theatre Portfolio. Regal Cinemas, Inc., United Artists and Edwards Theatres have invested approximately $1.8 billion in capital expenditures since 1997. As a result, we believe that we operate one of the most modern theatre circuits among major exhibitors of motion pictures. Approximately 75% of our screens are located in theatres with 10 or more screens. Approximately 60% of our screens are located in theatres featuring stadium seating and digital sound. Our theatres have an average of 10.5 screens per location, which is well above an average of 5.5 screens per location for the North American motion picture exhibition industry. In addition, our theatres have excellent access to first-run films since approximately 80% of our screens are located in film licensing zones in which we are the sole exhibitor.

Distinctive Opportunity in Ancillary Revenues. We are the largest and most geographically diverse theatre circuit in the nation with over 240 million annual attendees and a nationwide presence that includes 9 of the top 10 and 23 of the top 25 U.S. demographic market areas. We believe that our asset base provides an attractive platform for advertisers to reach a desirable customer base and for businesses to conduct corporate communications services, conferencing, product introductions and distance learning. We believe we have a distinct opportunity among exhibitors to generate revenues from digital advertising and from corporate communications services. Our subsidiary, Regal CineMedia, focuses exclusively on leveraging our theatre assets to increase our revenues from these high-margin, complementary lines of business. Regal CineMedia is in its formative stage and has not generated revenue or incurred significant operating expenses.

Business Strategy

Our business strategy is to continue to enhance our leading position in the motion picture exhibition industry. Key elements of our strategy include:

Enhancing Operating Efficiencies. We believe that significant opportunities exist for us to generate economies of scale from the integration of Regal Cinemas, United Artists and Edwards Theatres. We expect to enhance our operating results through the application of best practices from across our combined company.

consolidated operating results. In addition, we may pursue acquisitions that strengthen our ancillary business by broadening our service offerings.

Creating a Digital Network to Generate Ancillary Revenues. We intend to generate additional revenue growth by investing in the equipment necessary to create the largest digital video and communications network among domestic exhibitors. We intend to use the digital network to generate additional revenue from on-screen and in-lobby advertising and corporate communication services.

Pursuing Selective Growth Opportunities. We intend to selectively pursue theatre and screen expansion opportunities that meet our strategic and financial return criteria. We are combining the capital spending programs of Regal Cinemas, United Artists and Edwards Theatres under one management team to maximize our return on investment by enabling us to make strategic capital expenditures that we believe will provide the highest returns among our theatre portfolio.

Recent Developments

On April 17, 2002, Regal Cinemas sold $150 million principal amount of 9³/8% senior subordinated notes due 2012, which were issued under the indenture pursuant to which Regal Cinemas sold $200 million principal amount of 9³/8% senior subordinated notes due 2012 in January, 2002. The proceeds of the notes issued on April 17, together with cash on hand at Regal Cinemas, Inc., was used to repay approximately $180 million of senior bank debt of Edwards Theatres, to redeem approximately $12 million of senior subordinated notes of Edwards Theatres that were held by Anschutz and Oaktree's Principal Activities Group and to redeem approximately $75.4 million of preferred stock of Edwards Theatres that was held by Anschutz, Oaktree's Principal Activities Group and members of the Edwards family. In connection with the repayment of the indebtedness and the redemption of the subordinated notes and preferred stock of Edwards Theatres, Edwards Theatres became a wholly owned subsidiary of Regal Cinemas, Inc. The difference between the carrying value of the preferred stock and subordinated debt of Edwards Theatres and the redemption price will be a charge to equity (approximately $30 million) and will be reflected as a charge against earnings available to common stockholders in our 2002 financial statements.

Based on preliminary results, we expect to report pro forma combined revenues of approximately $522.1 million and pro forma combined EBITDA of approximately $108.0 million for the first quarter of 2002. The pro forma combined EBITDA amount does not include approximately $9.5 million of expenses of Regal. These are expenses associated with the restructuring which primarily include legal and professional fees and expenses associated with the combination of the theatre circuits which primarily include severance and lease termination expenses. These strong results were consistent with an approximately 14% increase in domestic box office revenues during the first quarter of 2002. In the opinion of management, all adjustments consisting of normal recurring accruals necessary for the fair presentation of the results of operations have been made. These results may not be indicative of future results. We have not completed our first quarter financial statements and, accordingly, net income, assets, liabilities and stockholders' equity data is not available.

Other Information

Our principal executive offices are located at 9110 East Nichols Avenue, Suite 200, Centennial, Colorado 80112. Our telephone number is (303) 792-3600. Unless otherwise indicated in this prospectus, all references to "United Artists" mean United Artists Theatre Company and its subsidiaries, all references to "Edwards Theatres" mean Edwards Theatres, Inc. and its subsidiaries, all references to "Regal Cinemas" mean Regal Cinemas Corporation and its subsidiaries, and all references to "Regal CineMedia" mean Regal CineMedia Corporation and its subsidiaries. Unless otherwise indicated in this prospectus, all references to "Anschutz" mean Anschutz Company and its subsidiaries and all references to "Oaktree's Principal Activities Group" mean OCM Principal Opportunities Fund II, L.P. and its subsidiaries. The term "pro forma" refers to the combined results of

operations described under "Unaudited Pro Forma Financial Statements." The Satellite Theatre Network® is the property of United Artists. Other trademarks and trade names appearing in this prospectus are the property of their holders.

Despite the competitive strengths described above, our business is subject to a number of risks. If we fail to adequately integrate the operations of Regal Cinemas, United Artists and Edwards Theatres, or if we fail to maintain the operating efficiencies we have generated in the past, or if we are unable to successfully establish the business of Regal CineMedia, our results of operations may suffer. In addition, we may not be able to successfully execute our business strategy because of the competitive environment in which we operate. Because a portion of the net proceeds of this offering will be used to repay approximately $240.6 million of outstanding senior indebtedness of United Artists, only approximately $43.4 million of the proceeds of the offering will be available for working capital and other purposes. The outstanding senior indebtedness of United Artists is owed to approximately 40 commercial lending institutions, including Credit Suisse First Boston Corporation, Salomon Brothers Holding Company, Putnam Diversified Income Trust, Putnam High Yield Total Return Fund, Putnam High Yield Trust II, Putnam High Yield Managed Fund and Putnam Variable Trust—PVT Diversified Income Fund. Anschutz and Oaktree's Principal Activities Group are not lenders to United Artists and will not receive any of the net proceeds from this offering. For a discussion of these, and other risks, please see "Risk Factors" beginning on page 12.

The Offering

Class A common stock offered		18,000,000 shares
Common stock to be outstanding immediately after this offering
	Class A	45,493,575 shares
	Class B	84,590,337 shares
Use of proceeds		We intend to use the net proceeds from this offering to retire indebtedness of United Artists, for operating costs and capital expenditures of Regal CineMedia and for general corporate purposes.
Over-allotment option		Several of our stockholders have granted the underwriters an option to purchase up to an additional 2,700,000 shares to cover over-allotments. We will not receive any of the proceeds of any shares sold by the selling stockholders upon the exercise of the underwriters' over-allotment option.
Proposed NYSE Symbol		RGC

The number of shares of Class A common stock and Class B common stock to be outstanding after this offering is based on the number of shares outstanding as of April 19, 2002. This number excludes:

•: 8,832,147 shares issuable upon exercise of outstanding options at a weighted average exercise price of $7.96 per share;
•: 3,928,185 shares of Class B common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $8.88 per share and 296,129 shares of Class A common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $8.88 per share; and
•: 2,362,207 shares reserved for future issuance under our 2002 Stock Incentive Plan.

Summary Unaudited Pro Forma Combined Financial Data for 2001

Regal was created through a series of transactions during 2001 and 2002. Anschutz acquired controlling equity interests in United Artists and Edwards Theatres upon United Artists' emergence from bankruptcy reorganization on March 1, 2001 and Edwards Theatres' emergence from bankruptcy reorganization on September 29, 2001. Our historical combined fiscal 2001 financial statements reflect the results of United Artists and Edwards Theatres following these dates. Therefore, the historical results of operations for Regal include only the results of operations of United Artists from March 2, 2001, and of Edwards Theatres from September 30, 2001. These controlling equity interests have been recorded in the combined financial statements of Regal at the combined cost basis of Anschutz.

On January 29, 2002, Anschutz acquired a controlling equity interest in Regal Cinemas, Inc. Anschutz exchanged its controlling equity interest in Regal Cinemas, Inc. for a controlling equity interest in Regal Cinemas immediately after Regal Cinemas, Inc. and its subsidiaries emerged from bankruptcy reorganization. Because our financial statements will reflect the results of Regal Cinemas following the date Anschutz acquired a controlling equity interest, our 2001 historical results of operations do not include Regal Cinemas, Inc.

We have provided unaudited pro forma combined results of operations for fiscal 2001 because (i) the results of Regal Cinemas, Inc. are significant, (ii) our historical results do not include a full year's results of United Artists and Edwards Theatres, and (iii) the effects of the reorganizations on our theatre operations are material. We believe this presentation of the unaudited pro forma combined results of operations for fiscal 2001 as set forth below is more useful in understanding our current operations than our historical 2001 financial statements.

The unaudited pro forma combined statement of operations for fiscal 2001 assumes that each of the following had occurred at the beginning of each entity's fiscal years:

•: the acquisition by Anschutz of the controlling equity interests in Regal Cinemas, United Artists and Edwards Theatres;
•: the contribution by Anschutz to Regal of those interests;
•: the exchange by several of the minority stockholders of Regal Cinemas, United Artists and Edwards Theatres of their equity interests in those entities for equity interests of Regal;
•: the elimination of operating results for theatres rejected or closed in connection with the bankruptcy reorganizations of Regal Cinemas, Inc., United Artists and Edwards Theatres;
•: the elimination of direct costs and other items associated with these entities' respective bankruptcy reorganizations;
•: the use of proceeds of the $150.0 million in principal amount of senior subordinated notes issued by Regal Cinemas on April 17, 2002; and
•: the estimated effects of this offering and the use of proceeds described herein.

The unaudited pro forma adjusted balance sheet assumes that each of the following had occurred on our fiscal year end:

•: the acquisition by Anschutz of the controlling equity interests in Regal Cinemas, United Artists and Edwards Theatres;
•: the contribution by Anschutz to Regal of those interests;
•: the exchange by several of the minority stockholders of Regal Cinemas, United Artists and Edwards Theatres of their equity interests in those entities for equity interests of Regal;
•: the completion of the bankruptcy reorganization of Regal Cinemas, Inc.;

•: the use of proceeds of the $150 million in principal amount of senior subordinated notes issued by Regal Cinemas on April 17, 2002; and
•: the estimated effects of this offering and the use of proceeds described herein.

The summary pro forma combined financial data does not necessarily indicate the operating results or financial position that would have resulted from our operation on a combined basis during the period presented, nor does this 2001 pro forma data necessarily represent any future operating results or financial position. In addition to this summary financial data, you should also refer to the more complete financial information included elsewhere in this prospectus, including historical financial results of Regal, Regal Cinemas, Inc., United Artists and Edwards Theatres and our unaudited pro forma combined financial statements and the accompanying notes.

				Pro Forma Combined
				Fiscal Year Ended
				December 27, 2001
				(dollars in millions, except operating and per share data)
Statement of Operations Data:
	Revenues:
		Admissions		$	1,403.3
		Concessions			553.4
		Other			70.4

			Total revenues		2,027.1
	Operating income				156.9
	Net income			$	53.1
	Income before extraordinary item per share:
		Basic		$	0.41
		Diluted			0.39
	Weighted average number of shares (1):
		Basic			130.1
		Diluted			136.8
Other Financial Data:
	EBITDA (2)			$	358.0
	EBITDA margin (3)				17.7	%
	Capital expenditures (4)			$	52.1
	Cash flows from operating activities (5)				258.4
	Cash flows used in investing activities (5)				(45.8	)
Operating Data:
	Theatres at period end				561
	Screens at period end				5,886
	Average screens per theatre				10.5
	Attendance (in millions)				241.1
	Average ticket price			$	5.82
	Average concessions per patron			$	2.30

	As of December 27, 2001
	Pro Forma As Adjusted
	(in millions)
Balance Sheet Data:
Cash and cash equivalents	$	123.2
Total assets		2,189.7
Total debt		732.7
Stockholders' equity		1,091.3

(1): Weighted average number of shares represents the shares of Class A and Class B common stock issued in conjunction with the formation of Regal Entertainment and those to be issued in this offering as if they had been outstanding for the entire year.
(2): EBITDA represents operating income (loss) from continuing operations before depreciation and amortization expense, loss (gain) on disposal of operating assets, loss on impairment of assets, theatre closing costs, lease exit and restructure costs, legal and professional fees related to restructuring and merger and recapitalization expenses. We have included EBITDA in this data because we believe it to be a measure commonly used by investors to analyze and compare companies in our industry. EBITDA is not a measurement of financial performance under generally accepted accounting principles 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 generally accepted accounting principles for purposes of analyzing our profitability or liquidity. In addition, not all funds depicted by pro forma 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 under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." EBITDA, as we calculate it, may not be comparable to similarly titled measures reported by other companies.

EBITDA is calculated as follows:

		Pro Forma
		Fiscal Year Ended
		December 27, 2001
		(in millions)
Operating income		$	156.9
Depreciation and amortization			151.3
Loss (gain) on disposal of operating assets			(2.8	)
Loss on impairment of assets			52.6

	EBITDA	$	358.0

(3): Defined as EBITDA as a percentage of total revenues.
(4): Represents our fiscal 2001 capital expenditures pro forma for theatres not closed or rejected during the bankruptcy proceedings.
(5): Represents the historical cash from operating and investing activities of Regal Cinemas, United Artists and Edwards Theatres as adjusted for operating results for rejected or closed theatres in connection with these entities' bankruptcy reorganizations and the elimination of reorganization

costs and certain interest and other payments associated with the reorganizations, as calculated as follows:

		Cash flows from operating activities		Cash flows from (used in) investing activities
		(in millions)
Regal Cinemas, Inc., historical		$	152.0	$	(23.3	)
United Artists, historical			36.1		8.8
Edwards Theatres, historical			13.6		(36.4	)

			201.7		(50.9	)
	Elimination of operating results for rejected and closed theatres and the elimination of reorganization costs and certain interest and other payments associated with these entities' bankruptcy reorganizations		56.7		5.1

Pro forma cash flow		$	258.4	$	(45.8	)

We have not provided information regarding cash flow from financing activities as we believe this information would not be meaningful because of the significant effects of the bankruptcy reorganizations.

RISK FACTORS

Before you invest in our Class A common stock, you should understand the high degree of risk involved. You should consider carefully the following risks and other information in this prospectus, including our pro forma and historical financial statements and related notes, before you decide to purchase shares of our Class A common stock. If any of the following risks actually occur, our business, financial condition and operating results could be adversely affected. As a result, the trading price of our Class A common stock could decline, perhaps significantly.

Risks Related to Our Business and Industry

Our operating companies lack a combined operating history and have in the past operated at a loss

Regal Cinemas, United Artists and Edwards Theatres operated as separate motion picture exhibitors until we acquired them, and each operated at a loss prior to its reorganization in bankruptcy. There can be no assurance that we can successfully conduct their combined operations on an economically feasible basis and we may therefore incur further losses in the future. Because we are recording the combination of Regal Cinemas, United Artists and Edwards Theatres in accordance with the purchase method of accounting, the pro forma combined information contained in this prospectus may not be indicative of our future operating results. As a result, we have limited historical financial and operating data upon which you can evaluate our business.

The bankruptcy reorganizations of our theatre circuit operators could harm our business, financial condition and results of operations

During the past 13 months, each of Regal Cinemas, Inc., United Artists and Edwards Theatres has emerged from reorganization under Chapter 11 of the U.S. Bankruptcy Code. Regal Cinemas, Inc. and Edwards Theatres have claims from these bankruptcy reorganizations that remain unsettled and are subject to ongoing negotiation and possible litigation. The final amounts paid in connection with the claims could materially exceed our current estimates of $69.6 million and $43.9 million respectively, which could reduce our profitability or cause us to incur losses that would affect the trading price of our common stock. In addition, the past inability of our theatre circuit operators to meet their obligations that resulted in their filing for bankruptcy protection, or the perception that we may not be able to meet our obligations in the future, could adversely affect our ability to obtain adequate financing, or our relationships with our customers and suppliers, as well as our ability to retain or attract high-quality employees.

Failure to integrate our operations or establish the business of Regal CineMedia may result in operating losses or reduce our profits

We have combined three independent motion picture exhibitors and Regal CineMedia into a new company, and our success as a national motion picture exhibitor will depend in large part on our ability to integrate the operations, employees and management of three previously independent motion picture exhibitors, as well as our ability to establish the business and operations of Regal CineMedia. The success of this business model will depend on our ability to build on the strengths of our operating companies and to centralize many of our business functions. To achieve that, we will be closing the Edwards Theatres executive offices and moving the theatre management operations of United Artists and Edwards Theatres to Regal Cinemas offices in Knoxville, Tennessee. We will have to expend substantial managerial, operational, financial and other resources to integrate these businesses. We will also need to expand the theatre management operations of Regal Cinemas to cover a much more geographically diverse theatre circuit than in the past. It may take us longer than anticipated to integrate the operations, employees and management of Regal Cinemas, United Artists and Edwards Theatres, establish the business of Regal CineMedia and implement our business model, or we may fail

to successfully complete the integration or be unable to establish the business of Regal CineMedia. Failure to integrate our motion picture exhibitors or establish Regal CineMedia successfully may result in significant operating inefficiencies. In addition, delays in the successful completion of the integration would delay our ability to benefit from cost savings and increased operating efficiencies, including the negotiation of long-term concession contracts. Consequently, a delay or failure of our integration efforts could prevent us from achieving or maintaining profitability or from attaining the level of profitability we hope to achieve.

The oversupply of screens in the motion picture exhibition industry and other factors caused several major movie theatre circuits to reorganize under the Bankruptcy Code, which may make it difficult for us to borrow or access the capital markets in the future

Since 1999, several major theatre exhibition companies, including United Artists, Edwards Theatres and Regal Cinemas, Inc., have filed for bankruptcy. One significant cause of those bankruptcies was the emphasis by theatre circuits on the development of large megaplexes in recent years. The strategy of aggressively building megaplexes was adopted throughout the industry and generated significant competition and resulted in an oversupply of screens in the North American exhibition industry. The oversupply of screens, increased construction, rent and occupancy costs and other factors, including a downturn in attendance in 2000, caused significant liquidity pressures throughout the motion picture exhibition industry. We and other theatre circuits experienced impairment write-offs, losses on theatre dispositions and downward adjustment of credit ratings and defaults under loan agreements. These factors may make it difficult for us to borrow money or access the capital markets and, as a result, the market price of our securities, including our common stock, may be adversely affected.

We have a substantial investment in developing ancillary revenue opportunities that we may be unable to achieve

We have invested and committed to invest approximately $2.0 million in ancillary revenue opportunities and we expect to make approximately $23.0 million of additional capital expenditures during 2002. These investments are aimed at generating revenues through a digital network that is not complete and through exploiting other ancillary business uses of our theatres. For example, we will invest in changing the network software and distribution network and develop a new sales force to implement the use of the Next Generation Network assets acquired by Regal CineMedia. We may be unable to attract significant interest in the products and services of Regal CineMedia. If we are unable to generate sufficient revenue from the sale of advertising in our theatres or from alternative products and services, we may not achieve or maintain the level of profitability we hope to achieve, and our results of operations may be adversely affected.

We operate in a competitive environment

The motion picture exhibition industry is fragmented and highly competitive, particularly with respect to film licensing, attracting patrons and developing new theatre sites. Theatres operated by national and regional circuits and by small independent exhibitors compete with our theatres. In recent years, motion picture exhibitors have emphasized the development of large megaplexes, some of which have as many as 30 screens in a single theatre. The industry-wide strategy of aggressively building megaplexes generated significant competition and rendered many older multiplex theatres obsolete more rapidly than expected. Many of these theatres are under long-term lease commitments that make them financially burdensome to close and some companies have elected to continue operating them notwithstanding their lack of profitability. In other instances, because theatres are typically limited use design facilities, or for other reasons, landlords have been willing to make rent concessions to keep them open. As a result, there is an oversupply of screens in the North American motion picture

exhibition industry. This has affected and may continue to affect the performance of some of our theatres.

There are no significant barriers to entry in the motion picture exhibition industry. Although we expect a decline in the number of screens industry-wide, our competitors, including new motion picture exhibitors, may from time to time build new theatres or screens in areas in which we operate, which may require us to compete for popular films or result in excess capacity in those areas and hurt attendance at our theatres. Moviegoers are generally not brand conscious and usually choose a theatre based on its location, the films showing there and its amenities. A change in consumer preferences or technology may cause increased competition, require us to make large capital expenditures and adversely affect our operations.

The distribution of motion pictures is in large part regulated by federal and state antitrust laws and has been the subject of numerous antitrust cases. Consent decrees resulting from those cases effectively require major motion picture distributors to offer and license films to exhibitors, including us, on a film-by-film and theatre-by-theatre basis. Consequently, we cannot assure ourselves of a supply of motion pictures by entering into long-term arrangements with major distributors, but must compete for our licenses on a film-by-film and theatre-by-theatre basis.

An increase in the use of alternative film delivery methods may drive down movie theatre attendance and limit ticket prices

We also compete with other movie delivery vehicles, including cable television, downloads via the Internet, video disks and cassettes, satellite and pay-per-view services. Further, new technologies for movie delivery (such as video on demand) could have a material adverse effect on our business and results of operations. We also compete for the public's leisure time and disposable income with other forms of entertainment, including sporting events, concerts, live theatre and restaurants.

Development of digital technology will increase our capital expenses

The industry is in the early stages of conversion from film based media to electronic based media. There are a variety of constituencies associated with this anticipated change which may significantly impact industry participants, including content providers, distributors, equipment providers and exhibitors. Should the conversion process rapidly accelerate, we may have to raise additional capital to finance the conversion costs associated with this potential change. The additional capital necessary may not, however, be available to us on attractive terms. Furthermore, it is impossible to accurately predict how the roles and allocation of costs between various industry participants will change if the industry changes from physical media to electronic media.

We depend on motion picture production and performance

Our ability to operate successfully depends upon the availability, diversity and appeal of motion pictures, our ability to license motion pictures and the performance of such motion pictures in our markets. We mostly license first-run motion pictures, the success of which have increasingly depended on the marketing efforts of the major studios. Poor performance of, or any disruption in the production of (including by reason of a strike), these motion pictures, or a reduction in the marketing efforts of the major studios, could hurt our business and results of operations. In addition, a change in the type and breadth of movies offered by studios may adversely affect the demographic base of moviegoers.

We may not benefit from our acquisition strategy

We may have difficulty identifying suitable acquisition candidates. Even if we do identify such candidates, we anticipate significant competition from other motion picture exhibitors and financial buyers when trying to acquire these candidates, and there can be no assurances that we will be able to

acquire such candidates at reasonable prices or on favorable terms. Moreover, some of these possible buyers may be stronger financially than we are. As a result of this competition for limited assets, we may not succeed in acquiring suitable candidates or may have to pay more than we would prefer to make an acquisition. If we cannot identify or successfully acquire suitable acquisition candidates, we may not be able to successfully expand our operations and our stock price could be adversely affected.

In any acquisition, we expect to benefit from cost savings through, for example, the reduction of overhead and theatre level costs, and from revenue enhancements resulting from the acquisition. However, there can be no assurance that we will be able to generate sufficient cash flow from these acquisitions to service any indebtedness incurred to finance such acquisitions or realize any other anticipated benefits. Nor can there be any assurance that our profitability will be improved by any one or more acquisitions. If we cannot generate sufficient cash flow to service debt incurred to finance an acquisition, our results of operations and profitability would be adversely affected. Any acquisition may involve operating risks, such as:

•: the difficulty of assimilating the acquired operations and personnel and integrating them into our current business;
•: the potential disruption of our ongoing business;
•: the diversion of management's attention and other resources;
•: the possible inability of management to maintain uniform standards, controls, procedures and policies;
•: the risks of entering markets in which we have little or no experience;
•: the potential impairment of relationships with employees;
•: the possibility that any liabilities we may incur or assume may prove to be more burdensome than anticipated; and
•: the possibility that any acquired theatres or theatre circuit operators do not perform as expected.

We depend on our relationships with film distributors

The film distribution business is highly concentrated, with nine major film distributors reportedly accounting for 93% of admissions revenues and 48 of the 50 top grossing films during 2000. Our business depends on maintaining good relations with these distributors. In addition, we are dependent on our ability to negotiate commercially favorable licensing terms for first-run films. A deterioration in our relationship with any of the nine major film distributors could affect our ability to negotiate film licenses on favorable terms or our ability to obtain commercially successful films and, therefore, could hurt our business and results of operations.

We must comply with the ADA

Our theatres must comply with Title III of the Americans with Disabilities Act of 1990, or the ADA. Compliance with the ADA requires that public accommodations "reasonably accommodate" individuals with disabilities and that new construction or alterations made to "commercial facilities" conform to accessibility guidelines unless "structurally impracticable" for new construction or technically infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, an award of damages to private litigants or additional capital expenditures to remedy such noncompliance. Any such imposition of injunctive relief, fines, damage awards or capital expenditures could adversely affect our business and results of operations.

We depend on our senior management

Our success depends upon the retention of our senior management, including Michael Campbell and Kurt Hall, our Co-Chief Executive Officers. We cannot assure you that we would be able to find qualified replacements for the individuals who make up our senior management if their services were no longer available. The loss of services of one or more members of our senior management team could have a material adverse effect on our business, financial condition and results of operations. We do not currently maintain key-man life insurance for any of our employees. The loss of any member of senior management could adversely affect our ability to effectively pursue our business strategy.

A prolonged economic downturn could materially affect our business by reducing consumer spending on attending movies

We depend on consumers voluntarily spending discretionary funds on leisure activities. Motion picture theatre attendance may be affected by prolonged, negative trends in the general economy that adversely affect consumer spending, including such trends resulting from terrorist attacks on the United States. Any reduction in consumer confidence or disposable income in general may affect the demand for motion pictures or severely impact the motion picture production industry, which, in turn, could adversely affect our operations.

Risks Related to Our Corporate Structure

The interests of our controlling stockholders may conflict with your interests

Following this offering, Anschutz and Oaktree's Principal Activities Group will own all of our outstanding Class B common stock. Our Class A common stock has one vote per share while our Class B common stock has ten votes per share on all matters to be voted on by stockholders. As a result, Anschutz and Oaktree's Principal Activities Group after this offering will control 94.9% of the combined voting power of all of our outstanding common stock. For as long as Anschutz and Oaktree's Principal Activities Group continue to own shares of common stock representing more than 50% of the combined voting power of our common stock, they will be able to elect all of the members of our board of directors and determine the outcome of all matters submitted to a vote of our stockholders, including matters involving mergers or other business combinations, the acquisition or disposition of assets, the incurrence of indebtedness, the issuance of any additional shares of common stock or other equity securities and the payment of dividends on common stock. Anschutz and Oaktree's Principal Activities Group will also have the power to prevent or cause a change in control, and could take other actions that might be desirable to Anschutz and Oaktree's Principal Activities Group but not to other stockholders. In addition, Anschutz and Oaktree's Principal Activities Group and their affiliates have controlling interest in companies in related and unrelated industries, including interests in the sports, motion picture and entertainment industries. In the future, they may combine our company with one or more of their other holdings.

Our substantial lease and debt obligations could impair our financial condition

We have substantial lease and debt obligations. For fiscal 2001, on a pro forma as adjusted basis, our total rent expense and interest expense were approximately $246.3 million and $64.2 million, respectively. As of January 3, 2002, on a pro forma as adjusted basis, we had total debt of $732.7 million.

On a pro forma as adjusted basis, we estimate our contractual cash obligations over the next several years to be as follows (in thousands):

	Payments Due by Period
	Total		Current		2-3 Years		4-5 Years		After 5 Years
Contractual Cash Obligations
Long-term debt	$	620,000	$	13,500	$	27,000	$	27,000	$	552,500
Capital lease obligations		4,270		158		331		453		3,328
Lease financing arrangements		99,445		1,613		3,909		5,514		88,409
Operating leases		3,594,821		225,467		450,803		440,405		2,478,146
General unsecured creditors		113,521		113,521		—		—		—
Other long term obligations		9,078		961		1,938		2,692		3,487

Total contractual cash obligations	$	4,441,135	$	355,220	$	483,981	$	476,064	$	3,125,870

Our substantial lease and debt obligations could have important consequences to you. For example, it could:

•: limit our ability to obtain necessary financing in the future;
•: make it more difficult for us to satisfy our obligations;
•: require us to dedicate a substantial portion of our cash flow to payments on our lease and debt obligations, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other corporate requirements;
•: make us more vulnerable to a downturn in our business and limit our flexibility to plan for, or react to, changes in our business; and
•: place us at a competitive disadvantage compared to competitors that might have proportionately less lease and debt obligations or have better access to capital.

If we are unable to meet our lease and debt service obligations, we could be forced to restructure or refinance our obligations and seek additional equity financing or sell assets. We may be unable to restructure or refinance our obligations and obtain additional equity financing or sell assets on satisfactory terms or at all. As a result, inability to meet our lease and debt service obligations could cause us to default on those obligations.

Many of our lease agreements and the agreements governing the terms of our debt obligations contain restrictive covenants that limit our ability to take specific actions or require us not to allow specific events to occur and prescribe minimum financial maintenance requirements that we must meet. If we violate those restrictive covenants or fail to meet the minimum financial requirements contained in a lease or debt instrument, we would be in default under that instrument, which could, in turn, result in defaults under other leases and debt instruments. Any such defaults could materially impair our financial condition. Among the restrictive covenants contained in our lease obligations and debt instruments are limitations on our or our subsidiaries' ability to incur debt, to make capital expenditures, to sell assets, to pay dividends or redeem capital stock, to make advances to us or our subsidiaries or investments in third parties. Among the minimum financial maintenance requirements contained in our lease obligations and debt instruments are minimum net worth or minimum total or net asset requirements, interest coverage requirements, minimum levels of EBITDA or other cash flow measurements and maximum debt to EBITDA ratios.

Our use of a substantial portion of the net proceeds from this offering to repay existing indebtedness will reduce the cash proceeds from this offering available to us

We intend to use a portion of the net proceeds from this offering to repay approximately $240.6 million of principal plus interest owed by United Artists under its term credit agreement. Because we will use a significant portion of the proceeds of this offering to repay existing debt, less of the cash proceeds from this offering will be available to us. As a result, we may need to seek additional debt or equity financing to fund future growth. If financing is not available on acceptable terms, we may be unable to expand our business and operations as anticipated. If we are unable to expand our business and operations, our financial results and the market for our common stock could be adversely affected.

We are a holding company with no operations of our own

We are a holding company with no operations of our own. Consequently, our ability to service our debt and pay dividends is dependent upon the earnings from the businesses conducted by our subsidiaries. The distribution of those earnings, or advances or other distributions of funds by these subsidiaries to us, all of which could be subject to statutory or contractual restrictions, are contingent upon the subsidiaries' earnings and are subject to various business considerations.

We may be subject to restrictions due to minority interests in our subsidiaries

We conduct our business through our subsidiaries. Minority stockholders may hold significant interests in these subsidiaries. Minority stockholders will own approximately 9.9% of the combined voting power of the outstanding capital stock of United Artists and approximately 5.0% of the outstanding capital stock of Next Generation Network upon the closing of this offering. The minority stockholders of United Artists have the right, pursuant to the terms of a stockholders agreement, to designate two members to the board of directors of United Artists. The minority stockholders of Next Generation Network do not have any rights to elect directors to the Next Generation Network board. Various disadvantages may result from the participation of minority stockholders whose interests may not always coincide with ours. The presence of minority interests may, among other things, impede our ability to implement organizational efficiencies and transfer cash and assets from one subsidiary to another in order to allocate assets most effectively.

Our certificate of incorporation and bylaws contain anti-takeover protections, which may discourage or prevent a takeover of our company, even if an acquisition would be beneficial to our stockholders

Provisions contained in our certificate of incorporation and bylaws, as well as provisions of the Delaware General Corporation Law, could delay or make it more difficult to remove incumbent directors or for a third party to acquire us, even if a takeover would benefit our stockholders. For example, our certificate of incorporation and bylaws:

•: authorize the issuance of "blank check" preferred stock that could be issued by our board of directors to increase the number of outstanding shares, making a takeover more difficult and expensive;
•: provide for a classified board of directors;
•: provide for a minimum and maximum number of directors, with the number of directors within the range to be fixed by a majority vote of the board of directors; this provision restricts the ability of our stockholders to increase the size of our board of directors; and
•: do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates.

Our issuance of shares of preferred stock could delay or prevent a change of control of our company

Our board of directors has the authority to cause us to issue, without any further vote or action by the stockholders, up to 50,000,000 shares of preferred stock, par value $0.001 per share, in one or more series, to designate the number of shares constituting any series, and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights, voting rights, rights and terms of redemption, redemption price or prices and liquidation preferences of such series. The issuance of shares of preferred stock may have the effect of delaying, deferring or preventing a change in control of our company without further action by the stockholders, even where stockholders are offered a premium for their shares.

Our issuance of preferred stock could dilute the voting power of the common stockholders

The issuance of shares of preferred stock with voting rights may adversely affect the voting power of the holders of our other classes of voting stock either by diluting the voting power of our other classes of voting stock if they vote together as a single class, or by giving the holders of any such preferred stock the right to block an action on which they have a separate class vote even if the action were approved by the holders of our other classes of voting stock.

Our issuance of preferred stock could adversely affect the market value of our common stock

The issuance of shares of preferred stock with dividend or conversion rights, liquidation preferences or other economic terms favorable to the holders of preferred stock could adversely affect the market price for our common stock by making an investment in the common stock less attractive. For example, investors in the common stock may not wish to purchase common stock at a price above the conversion price of a series of convertible preferred stock because the holders of the preferred stock would effectively be entitled to purchase common stock at the lower conversion price causing economic dilution to the holders of common stock.

We have not paid and currently do not anticipate paying any cash dividends on our common stock

We have not paid any cash dividends on our common stock since our inception and do not currently anticipate paying dividends on our common stock in the foreseeable future. Our payment of dividends is and will continue to be restricted by or subject to, among other limitations, applicable provisions of federal and state laws, our earnings, our status as a holding company, various business considerations and restrictions in credit agreements and indentures or other contracts.

Stock Market Risks

You will experience immediate and substantial dilution in net tangible book value per share of Class A common stock

The initial public offering price will be substantially higher than the pro forma combined net tangible book value per share of the outstanding common stock. If you purchase shares of our common stock, you will incur immediate and substantial dilution in the amount of $10.28 per share, based on an assumed initial public offering price of $17.00 per share, which is the mid-point of the initial public offering price range set forth on the cover of this prospectus.

Our stock price may be volatile and decline substantially

Prior to this offering, there has been no public market for our Class A common stock, and there can be no assurance that an active trading market for our Class A common stock will develop or continue upon completion of the offering. The initial public offering price will be determined by

negotiations between us and the representatives of the underwriters and may not be indicative of the price at which our Class A common stock will trade after the offering.

The stock market in general has experienced extreme price and volume fluctuations in recent years. These broad market fluctuations may adversely affect the market price of our Class A common stock, regardless of our actual operating performance. You may be unable to resell your shares at or above the public offering price because of a number of factors, including:

•: actual or anticipated quarterly fluctuations in our operating results;
•: changes in expectations of future financial performance or changes in estimates of securities analysts;
•: changes in the market valuations of other companies;
•: announcements relating to strategic relationships, acquisitions or industry consolidation; and
•: general economic, market and political conditions not related to our business.

Our results of operations fluctuate on a seasonal basis and may be unpredictable, which could increase the volatility of our stock price

Our revenues are usually seasonal because of the way the major film distributors release films. Generally, the most marketable movies are released during the summer and the holiday season. Poor performance of these films, or a disruption in the release of films during these periods, could hurt our results for the entire fiscal year. An unexpected "hit" film during other periods can alter the traditional trend. The timing of movie releases can have a significant effect on our results of operations, and our results of operations for one quarter are not necessarily indicative of our results of operations for any other quarter. These variations in results could cause increased volatility in our stock price.

The substantial number of shares that will be eligible for sale in the near future could cause the market price for our Class A common stock to decline

Prior to this offering, there has been no public market for our Class A common stock. We cannot predict the effect, if any, that market sales of shares of Class A common stock or the availability of shares of Class A common stock for sale will have on the market price of our common stock prevailing from time to time. Sales of substantial amounts of shares of our Class A common stock in the public market following this offering, or the perception that those sales will occur, could cause the market price of our Class A common stock to decline.

The 18,000,000 shares of Class A common stock being sold in this offering will be freely tradeable unless acquired by one of our affiliates. Upon completion of this offering, we will have outstanding an additional 27,493,575 unregistered shares of Class A common stock and 84,590,337 shares of Class B common stock which may convert into Class A common stock on a one-for-one basis. All of such 112,083,912 shares of unregistered common stock will constitute "restricted securities" under the Securities Act of 1933. Provided the holders comply with the holding periods and other conditions prescribed in Rule 144 under the Securities Act, these unregistered shares of common stock cease to be restricted securities and become freely tradeable at various times from 180 days to one year after completion of this offering.

Anschutz, Oaktree's Principal Activities Group, all of our other stockholders and our directors and executive officers have entered into the lock-up agreements described in "Underwriting," and with limited exceptions, have agreed not to sell or otherwise dispose of any shares of our common stock for a period of 180 days after the date of this prospectus. Anschutz, Oaktree's Principal Activities Group and other significant stockholders will be able to sell their shares pursuant to the registration rights that we have granted as described in "Description of Capital Stock—Registration Rights." We cannot

predict whether substantial amounts of our Class A common stock will be sold in the open market in anticipation of, or following, any divestiture by Anschutz, Oaktree's Principal Activities Group or our directors or executive officers of their shares of our common stock.

Additionally, approximately 8,832,147 shares of our Class A common stock will be issuable upon exercise of stock options that vest and become exercisable over the next five years. Of such options, as of April 17, 2002, 1,111,970 were fully vested. All of such shares subject to vested options, to the extent they are not held by one of our affiliates, will be freely tradable following effectiveness of the registration statement we plan to file promptly after completion of this offering.

The sale of a substantial number of shares may make it difficult for us to sell equity securities in the future

Sales of substantial amounts of shares of our Class A common stock in the public market following this offering, or the perception that those sales will occur, might make it difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. If we are unable to sell equity securities at times and prices that we deem appropriate, our ability to fund growth could be adversely affected.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains some "forward-looking statements" based on our current expectations, assumptions, estimates and projections about our business and our industry. When used in this prospectus, the words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are generally intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties, some of which are beyond our control.

For example, we could be adversely affected by:

•: reduced attendance at movies generally, a reduction in the number or diversity of popular movies released or an inability to successfully license and exhibit popular films;
•: competitive pressures from other motion picture exhibitors;
•: increased costs of operation, such as increased film licensing costs, rising cost of concessions or increases in hourly wages;
•: adverse determinations in lawsuits to which we are a party or legal or regulatory actions under laws that substantially affect our business, such as the Americans with Disabilities Act;
•: failure to successfully integrate our existing businesses or businesses that we acquire in the future;
•: inability to generate advertising revenue;
•: failure to successfully complete construction of our digital network;
•: failure to successfully market and profitably sell advertising and other services for which we are developing our digital network system;
•: reduced marketing of films by movie studios;
•: increased capital expenditures caused by a change in consumer preferences for our current megaplex format;
•: a change in the cost of attending movies relative to alternative forms of entertainment; or
•: reduced access to first run films as a result of competitors entering into a film licensing zone in which we are currently a sole exhibitor.

If any of these events, or other events that we do not currently foresee, actually occur, our results of operations could differ materially from those anticipated in the forward-looking statements. Various factors more fully described under the heading "Risk Factors" and elsewhere in this prospectus could cause our results to differ from those forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. In addition, we have no general duty to publicly update forward-looking statements, even if new information becomes available or other events occur in the future.

This prospectus contains information regarding market share, market position and industry data pertaining to our business based on data and reports compiled by industry professional organizations and analysts, and our knowledge of our revenues and markets. Although we believe these sources are reliable, we have not independently verified this market data. This market data includes projections that are based on a number of assumptions. If any one or more of those assumptions turns out to be incorrect, actual results may differ materially from the projections based on these assumptions.

ABOUT REGAL ENTERTAINMENT GROUP

The Exchange Transaction

On April 12, 2002, through a series of transactions, we issued Class B common stock to Anschutz in exchange for its controlling equity interests in Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia, we issued Class B common stock to Oaktree's Principal Activities Group in exchange for its contribution of capital stock of Regal Cinemas and Edwards Theatres and we issued Class A common stock to the other stockholders of Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia party to the Exchange Agreement in exchange for their capital stock of Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia, as follows:

•: Anschutz contributed its Regal Cinemas common stock for 45,579,192 shares of Class B common stock;
•: Anschutz contributed its common stock and Series A Convertible Preferred Stock of United Artists in exchange for 17,439,906 shares of Class B common stock;
•: Anschutz contributed its Edwards Theatres common stock for 6,668,091 shares of Class B common stock;
•: Anschutz contributed its Regal CineMedia common stock for 850,828 shares of Class B common stock;
•: Oaktree's Principal Activities Group exchanged its Regal Cinemas common stock for 12,265,357 shares of Class B common stock;
•: Oaktree's Principal Activities Group exchanged its Edwards Theatres common stock for 1,786,963 shares of Class B common stock;
•: The other stockholders of Regal Cinemas exchanged their Regal Cinemas common stock for 23,962,896 shares of Class A common stock;
•: The other stockholders of United Artists party to the Exchange Agreement exchanged their common stock and Series A Convertible Preferred Stock of United Artists for 1,260,292 shares of Class A common stock;
•: The other stockholders of Edwards Theatres exchanged their Edwards Theatres common stock for 2,223,528 shares of Class A common stock; and
•: The other stockholder of Regal CineMedia exchanged its Regal CineMedia common stock for 46,859 shares of Class A common stock.

Upon the closing of the exchange the holders of outstanding options of United Artists and Regal Cinemas received replacement options to purchase 8,832,147 shares of Class A common stock at prices ranging from $4.44 to $12.87 per share. We also granted to the holders of United Artists Warrants in exchange for their contribution to Regal of outstanding warrants to purchase 3,750,000 shares of United Artists' common stock, warrants to purchase 3,928,185 shares of Class B common stock at $8.88 per share and warrants to purchase 296,129 shares of Class A common stock at $8.88 per share. We refer to the exchange as the "exchange transaction." The terms of the exchange transaction were set forth in an Exchange Agreement entered into on March 8, 2002 among Anschutz and several of the minority stockholders of United Artists, Edwards Theatres and Regal Cinemas.

Following the exchange transaction, Anschutz transferred beneficial ownership of 1,455,183 shares of Class B common stock to Oaktree's Principal Activities Group. Consequently, upon completion of this offering, Anschutz will own 81.7% of our outstanding Class B common stock, representing 77.5% of the combined voting power of our outstanding common stock. Anschutz will have the ability to

direct the election of members of our board of directors and to determine the outcome of other matters submitted to the vote of our stockholders.

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

Our Relationship with Anschutz and Oaktree

During the period from February 2000 to April 2000, in a series of arm's length transactions effected through brokers, Anschutz purchased for cash at varying prices from unaffiliated third party lenders $92.2 million in outstanding principal amount of United Artists' revolving and term indebtedness under its prepetition senior credit facilities. This indebtedness was converted into 100% of the preferred stock and approximately 20% of the common stock of United Artists in its reorganization proceedings. Anschutz also received a warrant to acquire an additional 3.75 million shares of common stock of United Artists. After United Artists emerged from its reorganization proceedings, and prior to contributing the United Artists equity to Regal Entertainment, Anschutz purchased from minority stockholders of United Artists for cash an additional 61.0% of United Artists common stock.

During the period from August 2000 to January 2001, in a series of arm's-length transactions effected through brokers, Anschutz purchased for cash at varying prices from unaffiliated third party lenders $20.0 million in outstanding principal amount of Edwards Theatres' revolving and term indebtedness under its prepetition senior credit facilities. This indebtedness, along with a cash investment, was converted into $8.0 million of senior subordinated notes, approximately 63.1% of the preferred stock and approximately 40.8% of the common stock of Edwards Theatres in its reorganization proceedings.

During the period from August 2000 to January 2001, in a series of arm's-length transactions effected through brokers, Oaktree's Principal Activities Group purchased for cash at varying prices from unaffiliated third party lenders $5.0 million in outstanding principal amount of indebtedness of Edwards Theatres' revolving and term indebtedness under its prepetition senior credit facilities. This indebtedness, along with a cash investment, was converted into $2.0 million of senior subordinated notes, approximately 15.8% of the preferred stock and approximately 10.2% of the common stock of Edwards Theatres in its reorganization proceedings. After Edwards Theatres emerged from bankruptcy, Anschutz and Oaktree's Principal Activities Group purchased for cash an additional 32.7% of the common stock of Edwards Theatres from members of the Edwards family.

subordinated notes due 2010. The senior bank debt was converted into approximately 60.0% of the common stock of Regal Cinemas, Inc. and the subordinated notes were satisfied and retired by a cash payment equal to $129.5 million in Regal Cinemas, Inc.'s reorganization proceedings.

During the period from July 2000 to January 2001, in a series of arm's-length transactions effected through brokers, Oaktree's Principal Activities Group purchased for cash at varying prices from unaffiliated third party lenders (i) $108.8 million in outstanding principal amount of Regal Cinemas, Inc.'s revolving and term indebtedness under its prepetition senior credit facilities and (ii) $131.4 million in outstanding principal amount of Regal Cinemas, Inc.'s 9¹/2% senior subordinated notes due 2008 and 8⁷/8% senior subordinated notes due 2010. The senior bank debt was converted into approximately 15.0% of the common stock of Regal Cinemas, Inc. and the subordinated notes were satisfied and retired by a cash payment equal to $29.7 million in Regal Cinemas, Inc.'s reorganization proceedings. Upon its emergence from reorganization proceedings, Regal Cinemas, Inc. became a wholly owned subsidiary of Regal Cinemas and Anschutz, Oaktree's Principal Activities Group and the other stockholders of Regal Cinemas, Inc. exchanged their common stock of Regal Cinemas, Inc. for common stock of Regal Cinemas.

Anschutz is not subject to any contractual obligation to maintain its share ownership, except that Anschutz has agreed not to sell or otherwise dispose of any shares of our common stock for a period of 180 days after the date of this prospectus without the prior written consent of Credit Suisse First Boston Corporation or through limited disposition by gift or bequest.

USE OF PROCEEDS

We estimate our net proceeds from the sale of 18,000,000 shares of Class A common stock in this offering will be approximately $284.0 million, based on an assumed initial public offering price of $17.00 per share, the midpoint of the offering price range set forth on the cover of this prospectus, and after deducting the underwriting discount and our estimated offering expenses. We will not receive any proceeds of the shares sold by the selling stockholders upon any exercise of the underwriters' over allotment option.

Currently, we intend to use the net proceeds as follows:

•: $240.6 million to repay principal owed by United Artists under its term credit agreement; as of March 7, 2002, the interest rate on the principal owed under the term credit agreement was 5.85% per annum and the term credit agreement matures on February 2, 2005;
•: approximately $5.0 million for operating costs and capital expenditures of Regal CineMedia; and
•: the net balance of approximately $38.4 million for general corporate purposes, including future acquisitions and working capital.

The foregoing represents our current intentions based upon our present plans and business condition. Our management will have broad discretion in the application of the net proceeds from this offering, and the occurrence of unforeseen events or changed business conditions could result in the application of the net proceeds from this offering in a manner other than as described in this prospectus.

DIVIDEND POLICY

We do not intend to pay dividends on our common stock in the foreseeable future. Instead, we expect to retain our earnings to finance the expansion of our business and for general corporate purposes. In addition, our future dividend policy will depend on the requirements of financing agreements to which we may be a party and other factors considered relevant by our board of directors, including the General Corporation Law of the State of Delaware, which provides that dividends are only payable out of surplus or current net profits.

CAPITALIZATION

The following table shows our capitalization at December 27, 2001 on a pro forma combined basis and on a pro forma as adjusted basis. The pro forma combined presentation includes:

•: the acquisition by Anschutz of the controlling equity interests in Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia;
•: the contribution by Anschutz to Regal of those interests;
•: the exchange by several of the minority stockholders of Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia of their equity interests in those entities for equity interests of Regal;
•: the use of proceeds of the $150.0 million in principal amount of senior subordinated notes issued by Regal Cinemas on April 17, 2002; and
•: the completion of the bankruptcy reorganization of Regal Cinemas, Inc.

The pro forma as adjusted presentation includes the effects of this offering and the use of proceeds described herein.

			As of December 27, 2001
			Pro Forma Combined			Pro Forma As Adjusted (1)
			(in millions)
Cash and cash equivalents			$	79.8		$	123.2

Total debt:
		Revolving credit facilities (2)	$	—		$	—
		Term credit facilities		510.6			270.0
		Senior subordinated notes		350.0			350.0
		Lease financing arrangements		99.4			99.4
		Other		13.3			13.3

Total debt				973.3			732.7
Stockholders' equity:
	Class A common stock (3)			—			—
	Class B common stock (4)			0.1			0.1
	Additional paid in capital			859.8			1,143.8
	Retained earnings (deficit)			(25.2	)		(25.2	)
	Deferred compensation (5)			(27.4	)		(27.4	)

Total stockholders' equity				807.3			1,091.3

Total capitalization			$	1,780.6		$	1,824.0

(1)

The pro forma as adjusted column does not include:

•: 8,832,147 shares issuable upon exercise of outstanding options at a weighted average exercise price of $7.96 per share;
•: 3,928,185 of Class B common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $8.88 per share and 296,129 shares of Class A common stock issuable upon exercise of outstanding warrants at a weighted average exercise price of $8.88 per share; and
•: 2,362,207 shares reserved for future issuance under our 2002 Stock Incentive Plan.

(2): As of April 19, 2002, Regal Cinemas had $100.0 million of available borrowings under its senior credit facilities.
(3): Par value $0.001 per share, 500,000,000 shares authorized; 27,493,575 shares issued and outstanding (pro forma combined) and 45,493,575 shares issued and outstanding (pro forma as adjusted).
(4): Par value $0.001 per share, 200,000,000 shares authorized; 84,590,337 shares issued and outstanding (pro forma combined); and 84,590,337 shares issued and outstanding (pro forma as adjusted).
(5): Deferred stock-based compensation has been recorded based on the intrinsic value computed on $11.06 per share for the 8,832,147 shares subject to outstanding Regal stock options. These options were issued in replacement of existing options of Regal Cinemas and United Artists in conjunction with the exchange transaction at the exchange transaction value of $11.06 per share and based upon the cash purchase price of Edwards Theatres shares purchased from third parties in arms-length transactions at that time. Had the options been issued in conjunction with this offering, based on the midpoint of the range set forth on the cover of this prospectus of $17.00 per share, deferred compensation would have been approximately $79.8 million.

DILUTION

As of December 27, 2001, our pro forma combined net tangible book value would have been $590.7 million, or $5.27 per share of common stock. Pro forma combined net tangible book value per share is equal to our total net tangible book value, which is total tangible assets less total liabilities, divided by the number of shares of common stock outstanding on a pro forma basis after giving effect to the combination of Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia. Dilution in pro forma combined net tangible book value per share equals the difference between the amount per share paid by purchasers of shares of Class A common stock in this offering and the pro forma combined net tangible book value per share of common stock immediately following this offering.

Without taking into account any other changes in our pro forma combined net tangible book value per share after December 27, 2001, other than to give effect to the sale of the 18,000,000 shares of Class A common stock offered by this prospectus at an assumed initial public offering price of $17.00 per share, which represents the midpoint of the offering price range, set forth on the cover of this prospectus, and after deducting the underwriting discount and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of December 27, 2001, would have been $874.7 million, or $6.72 per share. This represents an immediate increase in pro forma as adjusted net tangible book value to existing stockholders of $1.45 per share, and an immediate dilution to purchasers in this offering of $10.28 per share. The following table illustrates the per share dilution:

		Per Share
Assumed initial public offering price per share of Class A common stock				$	17.00

	Pro forma combined net tangible book value per share as of December 27, 2001	$	5.27

	Increase per share attributable to existing investors		1.45

Pro forma net tangible book value per share after this offering					6.72

Pro forma dilution per share to new investors				$	10.28

The following table illustrates, on a pro forma basis, as of December 27, 2001, the difference between the number of shares of Class A common stock purchased from us, the total consideration paid and the average price per share paid (1) by existing common stockholders and (2) by the purchasers of Class A common stock in this offering at an assumed initial public offering price of $17.00 per share and before deducting the underwriting discount and estimated offering expenses payable by us.

		Shares Purchased			Total Consideration
		Shares Purchased			Total Consideration				Average Price Per Share
		Number	Percent		Amount		Percent		Average Price Per Share
Existing stockholders		112,083,912	86.2	%	$	807,300,000	72.5	%	$	7.20
New investors		18,000,000	13.8			306,000,000	27.5			17.00

	Total	130,083,912	100.0	%	$	1,113,300,000	100.0	%

As of April 19, 2002, there were options outstanding to purchase a total of 8,832,147 shares of Class A common stock at a weighted average price of $7.96 per share. As of the same date, there were warrants to purchase a total of 3,928,185 shares of Class B common stock and 296,129 shares of Class A common stock at a weighted average exercise price of $8.88 per share. New investors will experience further dilution to the extent any of our outstanding options or warrants are exercised.

REGAL ENTERTAINMENT GROUP
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

Regal was created through a series of transactions during 2001 and 2002. Anschutz acquired controlling equity interests in United Artists and Edwards Theatres upon United Artists' emergence from bankruptcy reorganization on March 1, 2001 and Edwards Theatres' emergence from bankruptcy reorganization on September 29, 2001. Our historical combined fiscal 2001 financial statements reflect the results of United Artists and Edwards Theatres following these dates. Therefore, the historical results of operations for Regal include only the results of operations of United Artists from March 2, 2001, and Edwards Theatres from September 30, 2001. These contributions have been recorded in the combined financial statements of Regal at the combined cost basis of Anschutz.

On January 29, 2002, Anschutz acquired a controlling equity interest in Regal Cinemas, Inc. Anschutz exchanged its controlling equity interest in Regal Cinemas, Inc. for a controlling equity interest in Regal Cinemas immediately after Regal Cinemas, Inc. and its subsidiaries emerged from bankruptcy reorganization. Since our financial statements will reflect the results of Regal Cinemas following the date Anschutz acquired a controlling interest, our 2001 historical results of operations do not include Regal Cinemas, Inc.

The unaudited pro forma combined statement of operations for fiscal 2001 assumes that each of the following had occurred at the beginning of each entity's fiscal years:

•: the acquisition by Anschutz of the controlling equity interests in Regal Cinemas, United Artists and Edwards Theatres;
•: the contribution by Anschutz to Regal of those interests;
•: the exchange by several of the minority stockholders of Regal Cinemas, United Artists and Edwards Theatres of their equity interests in those entities for equity interests of Regal;
•: the elimination of operating results for theatres rejected or closed in connection with the bankruptcy reorganizations of Regal Cinemas, Inc., United Artists and Edwards Theatres;
•: the elimination of direct costs and other items associated with these entities' respective bankruptcy reorganizations;
•: the use of proceeds of the $150.0 million in principal amount of senior subordinated notes issued by Regal Cinemas on April 17, 2002; and
•: the estimated effects of this offering and the use of proceeds described herein.

The unaudited pro forma combined balance sheet assumes that each of the following had occurred on our fiscal year end:

•: the acquisition by Anschutz of the controlling equity interests in Regal Cinemas, United Artists and Edwards Theatres;
•: the contribution by Anschutz to Regal of those interests;
•: the exchange by several of the minority stockholders of Regal Cinemas, United Artists and Edwards Theatres of their equity interests in those entities for equity interests of Regal;

•: the completion of the bankruptcy reorganization of Regal Cinemas, Inc.; and
•: the use of proceeds of the $150 million in principal amount of senior subordinated notes issued by Regal Cinemas on April 17, 2002.

The unaudited pro forma as adjusted balance sheet assumes that each of the previous had occured on our fiscal year end, as well as assuming that the estimated effects of this offering and the use of proceeds described herein had occurred on our fiscal year end. The unaudited pro forma as adjusted balance sheet does not reflect the contribution by Anschutz to Regal CineMedia of its interest in the preferred stock of Next Generation Network and the contribution of the common stock of Regal CineMedia to us because these transactions were not material.

The pro forma adjustments are based on available information and assumptions that management believes are reasonable. The notes to the unaudited pro forma combined statements of operations and balance sheet provide a detailed discussion of how such adjustments were derived and presented in the pro forma financial statements. The unaudited pro forma financial statements do not purport to represent what our results of operations or financial position would actually have been had the combination occurred on the date indicated, or to project our results of operations or financial position for any future period. The pro forma statements of operations do not reflect any synergies or other operating benefits which may be realized from the integration of the operations of the companies nor does it include any pro forma adjustments or reduction in rent or other occupancy costs resulting from certain lease amendments entered into in connection with the bankruptcy proceedings.

The unaudited pro forma financial statements should be read in conjunction with selected historical financial data of our subsidiaries, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the historical financial statements of Regal Entertainment, Regal Cinemas, Inc., United Artists and Edwards Theatres and the notes thereto included elsewhere in this prospectus.

REGAL ENTERTAINMENT GROUP

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 27, 2001

			Combined Regal Entertainment Historical 2001 (1)			Regal Cinemas, Inc. Historical 2001 (2)			Regal Cinemas, Inc. Adjustments (3)			Regal Cinemas Pro Forma Adjustments (4)			Edwards Theatres Pro Forma Adjustments (5)			United Artists Pro Forma Adjustments (6)			Edwards Theatres Refinancing (7)			This Offering (8)			Pro Forma Combined
			(in millions except per share amounts)
Revenues:
	Admissions		$	382.5		$	799.8		$	(38.3	)	$	—		$	190.2		$	69.1		$	—		$	—		$	1,403.3
	Concessions			153.3			321.3			(15.6	)		—			67.5			26.9			—			—			553.4
	Other operating revenues			21.1			44.5			(2.1	)		—			3.7			3.2			—			—			70.4

		Total revenues		556.9			1,165.6			(56.0	)		—			261.4			99.2			—			—			2,027.1
Operating expenses:
	Film rental and advertising costs			212.9			432.4			(18.8	)		—			103.5			36.2			—			—			766.2
	Cost of concessions			18.1			47.2			(2.9	)		—			11.3			3.1			—			—			76.8
	Rent expense			75.8			140.4			(14.7	)		—			32.4			12.4			—			—			246.3
	Other theatre operating expenses			151.7			297.8			(24.5	)		—			61.1			26.2			—			—			512.3
	General and administrative expenses			21.4			31.6			—			—			11.3			3.2			—			—			67.5
	Legal and professional fees—restructuring related			0.8			20.8			(20.8	)		—			(0.8	)		—			—			—			—
	Depreciation and amortization			42.6			91.0			(3.3	)		(9.9	)		20.8			10.1			—			—			151.3	(9)
	Theatre closing costs			1.8			12.1			(12.1	)		—			(1.8	)		—			—			—			—
	Loss (gain) on disposal of operating assets			(2.6	)		21.4			(21.4	)		—			0.1			(0.3	)		—			—			(2.8	)
	Loss on impairment of assets			2.9			78.5			(35.0	)		—			6.0			0.2			—			—			52.6

		Total operating expenses		525.4			1,173.2			(153.5	)		(9.9	)		243.9			91.1			—			—			1,870.2

Operating income (loss)				31.5			(7.6	)		97.5			9.9			17.5			8.1			—			—			156.9
Other income (expense):
	Interest expense			(21.8	)		(174.2	)		2.9			121.5			(11.1	)		(4.9	)		5.1			18.3			(64.2	)
	Interest income			0.4			5.1			—			—			—			—			—			—			5.5
	Other, net			(1.6	)		—			—			—			—			2.0			—			—			0.4
	Minority interest			—			—			—			—			—			—			(11.7	)		—			(11.7	)

Income (loss) before reorganization items, income taxes and extraordinary item				8.5			(176.7	)		100.4			131.4			6.4			5.2			(6.6	)		18.3			86.9
Reorganization items				—			(16.5	)		16.5			—			—			—			—			—			—

Income (loss) before income taxes and extraordinary item				8.5			(193.2	)		116.9			131.4			6.4			5.2			(6.6	)		18.3			86.9
Income tax expense (10)				(3.6	)		—			—			(16.6	)		(2.5	)		(2.0	)		(2.0	)		(7.1	)		(33.8	)

Income (loss) before extraordinary item			$	4.9		$	(193.2	)	$	116.9		$	114.8		$	3.9		$	3.2		$	(8.6	)	$	11.2		$	53.1

Weighted average shares outstanding (11)
	Basic			112.1																								130.1
	Diluted			118.8																								136.8
Income before extraordinary item per share (11)
	Basic		$	0.04																							$	0.41

	Diluted		$	0.04																							$	0.39

(See Accompanying Notes to Unaudited Pro Forma Combined Statement of Operations)

REGAL ENTERTAINMENT GROUP

Notes to Unaudited Pro Forma Combined Statement of Operations

(1): Represents the historical operating results for United Artists and Edwards Theatres from the date that Anschutz acquired control of the entities (for United Artists for the forty-four weeks ended January 3, 2002 and for Edwards Theatres for the three months ended December 27, 2001).

Commencing in 2002, Regal Entertainment will adopt the fiscal year end of Regal Cinemas, which is the last Thursday of each calendar year. Regal Cinemas' 2001 fiscal year ended on December 27, 2001. For the period from December 28, 2001 through January 3, 2002, United Artists recorded revenues of approximately $17.8 million and net income of approximately $2.5 million.

(2): Represents the results of operations of Regal Cinemas, Inc. and its subsidiaries for the fiscal year ended December 27, 2001. Upon emergence from bankruptcy, Regal Cinemas, Inc. became a wholly owned subsidiary of Regal Cinemas.
(3): Represents direct operating revenues and expenses for the year ended December 27, 2001 attributable to theatres rejected or closed as a result of Regal Cinemas, Inc.'s bankruptcy proceedings and elimination of reorganization and restucturing items.
(4): Represents (i) adjustments to non-cash depreciation and amortization expense made to give effect of Regal Cinemas, Inc. emergence from bankruptcy and the acquisition of a controlling equity interest by Anschutz which results in the elimination of historical amortization of goodwill totalling $10.4 million, a reduction in depreciation and amortization expense for the write down in assets totalling $2.0 million and an increase for stock compensation amortization of $2.5 million relating to the deferred stock compensation resulting from the replacement stock options, and (ii) adjustments to Regal Cinemas interest expense and amortization of deferred financing fees resulting from the (a) extinguishment of the old Regal Cinemas, Inc. senior credit facilities, senior subordinated notes and debentures, and
equipment financing note; (b) $270 million of borrowings by Regal Cinemas under its senior credit facility with an interest rate of 5.5%; and (c) $200 million of proceeds from the senior subordinated notes offering of Regal Cinemas in January 2002 with an interest rate of 9.375% as follows (in millions):

		Year Ended December 27, 2001
Interest expense before amortization of deferred financing fees for $270 million of borrowings under Regal Cinemas' senior credit facility and $200 million of proceeds from Regal Cinemas' January 2002 senior subordinated notes offering		$	33.7
Amortization of deferred financing fees			2.2
Elimination of historical interest expense under extinguished old Regal Cinemas, Inc. debt			(157.4	)

	Total adjustment	$	(121.5	)

(5): Represents the historical results of operations of Edwards Theatres for the nine months ended September 29, 2001, the date that Anschutz acquired a controlling equity interest in Edwards Theatres, as adjusted for the effects of the bankruptcy reorganization. These bankruptcy related adjustments include the elimination of the operating results of theatres rejected or closed through

the bankruptcy proceedings, reorganization costs and interest expense. The effect of adjusting the historical results of operations are as follows (in millions):

	Historical Nine Months			Adjustments			Pro Forma
Revenue	$	266.4		$	(5.0	)	$	261.4
Operating income		2.1			15.4			17.5
Income (loss) before extraordinary item		(29.5	)		33.4			3.9

(6): Represents the historical results of operations of United Artists for the nine weeks ended March 1, 2001, the date that Anschutz acquired a controlling equity interest in United Artists, as adjusted for the effects of the bankruptcy reorganization, reorganization costs, interest expense and stock compensation. The effect of adjusting the historical results of operations are as follows (in millions):

	Historical Nine Weeks		Adjustments			Pro Forma
Revenue	$	99.2	$	—		$	99.2
Operating income		14.8		(6.7	)		8.1
Income (loss) before extraordinary item		71.8		(68.6	)		3.2

(7): Represents (i) the elimination of the interest expense on the Edwards Theatres' senior credit facility and senior subordinated notes and the related tax effects, for the year ended December 27, 2001, as they were repaid with proceeds from the $150.0 million principal amount senior subordinated notes issued by Regal Cinemas on April 17, 2002, (ii) the recognition of interest expense, and related tax effect, we would have incurred on the $150.0 million senior subordinated notes issued by Regal Cinemas on April 17, 2002 had the notes been outstanding for the year ended December 27, 2001, and (iii) the recognition of the minority interest on the redemption of Edwards Theatres' preferred stock held by non-Anschutz investors. The net effect on interest expense is as follows (in millions):

Interest expense for the $155.8 million of net proceeds from Regal Cinemas' senior subordinated notes	$	13.1
Elimination of historical interest expense on extinguished Edwards Theatres' $180.0 million senior credit facility and subordinated notes		(18.2	)

Total Adjustments	$	(5.1	)

(8): Represents the elimination of interest expense and the related tax effect on United Artists' senior credit facility for the year ended December 27, 2001, as the United Artists senior credit facility is to be repaid with proceeds from this offering.
(9): Depreciation and amortization includes amortization of deferred stock-based compensation of approximately $5.5 million. Deferred stock-based compensation has been recorded based on the intrinsic value computed on $11.06 per share for the 8,832,147 shares subject to outstanding Regal stock options. These options were issued in replacement of existing options of United Artists and Regal Cinemas in conjunction with the exchange transaction at the exchange transaction value of $11.06 per share and based upon the cash purchase price of Edwards Theatres shares purchased

from third parties in arms-length transactions at that time. Had the options been issued in conjunction with this offering, based on the midpoint of the range set forth on the cover of this prospectus of $17.00 per share, depreciation and amortization resulting from the amortization of deferred compensation would have increased by approximately $10.5 million per year, before the effect of income taxes, over the five year vesting period.

(10): Represents the adjustments to reflect a composite income tax rate of 38.9% on a combined pro forma basis.
(11): Regal Entertainment historical weighted average number of shares represents the shares of Class A and Class B common stock issued in conjunction with the formation of Regal Entertainment and the dilutive effect of the outstanding stock options as if they had been outstanding for the entire year. Pro forma weighted average number of shares assumes the effect of the issuance of shares of this offering as if such shares had been outstanding for the entire year.

A reconciliation of the numerators and denominators of the basic and diluted per share computations for income before extraordinary item is as follows (in millions):

		Combined Regal Entertainment Historical 2001		Pro Forma Combined
Income before extraordinary item		$	4.9	$	53.1
Average shares of common stock outstanding:
	Basic		112.1		112.1
	Effect of shares in this offering		—		18.0

			112.1		130.1
Effect of stock options and warrants			6.7		6.7

	Diluted		118.8		136.8

Income before extraordinary item per share:
	Basic	$	0.04	$	0.41

	Diluted	$	0.04	$	0.39

REGAL ENTERTAINMENT GROUP

UNAUDITED PRO FORMA COMBINED BALANCE SHEET

AS OF DECEMBER 27, 2001

			Combined Regal Entertainment Historical 2001 (1)		Regal Entertainment Pro Forma Adjustments (2)			Regal Cinemas, Inc. Historical 2001 (3)			Regal Cinemas Pro Forma Adjustments (4)			United Artists and Edwards Theatres Pro Forma Adjustments (5)			Edwards Theatres Refinancing (6)			Pro Forma Combined		This Offering (7)			Pro Forma As Adjusted
			(in millions)
Assets
Current assets:
	Cash and cash equivalents		$	68.0	$	—		$	237.7		$	(114.3	)	$	—		$	(111.6	)	$	79.8	$	43.4		$	123.2
	Restricted cash			28.1		—			—			—			(28.1	)		—			—		—			—
	Accounts receivable			9.6		—			3.9			—			—			—			13.5		—			13.5
	Construction receivables			—		—			2.2			—			—			—			2.2		—			2.2
	Inventories			1.0		—			3.3			—			—			—			4.3		—			4.3
	Prepaid and other current assets			26.0		—			13.7			(0.1	)		—			—			39.6		—			39.6
	Assets held for sale			2.8		—			5.4			—			—			—			8.2		—			8.2

		Total current assets		135.5		—			266.2			(114.4	)		(28.1	)		(111.6	)		147.6		43.4			191.0
Property and equipment, net				552.8		—			1,226.5			(33.8	)		—			—			1,745.5		—			1,745.5
Goodwill, net of accumulated amortization				136.2		—			336.2			(336.2	)		72.4			—			208.6		—			208.6
Deferred tax asset				—		—			—			8.0			—			—			8.0		—			8.0
Other assets				298.2		(292.7	)		41.5			(12.9	)		—			2.5			36.6		—			36.6

Total assets			$	1,122.7	$	(292.7	)	$	1,870.4		$	(489.3	)	$	44.3		$	(109.1	)	$	2,146.3	$	43.4		$	2,189.7

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
	Current maturities of long-term obligations		$	15.6	$	—		$	2.2		$	13.5		$	—		$	(12.6	)	$	18.7	$	(2.5	)	$	16.2
	Accounts payable			76.4		—			40.2			—			—			—			116.6		—			116.6
	Accrued expenses			60.5		—			42.7			(2.9	)		—			3.0			103.3		—			103.3
	Liabilities subject to compromise			43.9		—			183.9			(114.3	)		(28.1	)		—			85.4		—			85.4

		Total current liabilities		196.4		—			269.0			(103.7	)		(28.1	)		(9.6	)		324.0		(2.5	)		321.5
Long term obligations:
	Senior credit facilities			405.5		—			—			256.5			—			(167.4	)		494.6		(238.1	)		256.5
	Senior subordinated notes			10.3		—			—			200.0			—			139.7			350.0		—			350.0
	Other debt			7.5		—			3.2			—			—			—			10.7		—			10.7
	Capital lease obligations			—		—			1.5			—			—			—			1.5		—			1.5
	Lease financing arrangements			—		—			97.8			—			—			—			97.8		—			97.8
	Other liabilities			32.6		—			23.5			(21.3	)		—			5.3			40.1		—			40.1
	Deferred tax liability			3.8		—			—			—			—			—			3.8		—			3.8
	Liabilities subject to compromise			—		—			1,899.3			(1,899.3	)		—			—			—		—			—

		Total liabilities		656.1		—			2,294.3			(1,567.8	)		(28.1	)		(32.0	)		1,322.5		(240.6	)		1,081.9
Minority interest				36.6		—			—			—			(20.1	)		—			16.5		—			16.5
Redeemable preferred stock				47.0		—			—			—			—			(47.0	)		—		—			—
Total stockholders' equity (deficit)				383.0		(292.7	)		(423.9	)		1,078.5			92.5			(30.1	)		807.3		284.0			1,091.3

Total liabilities and stockholders' equity (deficit)			$	1,122.7	$	(292.7	)	$	1,870.4		$	(489.3	)	$	44.3		$	(109.1	)	$	2,146.3	$	43.4		$	2,189.7

(See Accompanying Notes to Unaudited Pro Forma Combined Balance Sheet)

REGAL ENTERTAINMENT GROUP
Notes to Unaudited Pro Forma Combined Balance Sheet

(1): Represents the historical financial position of Regal Entertainment, as of its fiscal year end January 3, 2002.
(2): Represents pro forma adjustments to reflect (i) elimination of Regal Entertainment's investment in Regal Cinemas, Inc. and (ii) the reclassification of Regal Entertainment's parent's investment to additional-paid-in-capital.
(3): Represents the historical financial position of Regal Cinemas, Inc. as of its fiscal year ended December 27, 2001.
(4): Represents (i) adjustments to give effect of Regal Cinemas, Inc.'s emergence from bankruptcy proceedings, including the payment of allowed claims and extinguishment of debt and (ii) pro forma adjustments required to reflect the contribution of Anschutz; controlling equity interests at its net cost and the exchange of certain pre-petition claims for equity by the non-Anschutz investors. The equity of the non-Anschutz investors has been reflected in the accompanying unaudited pro forma combined balance sheet at fair value based upon the exchange value of Regal Cinemas.

These adjustments resulted in a $362.0 million reduction of historical goodwill and property and equipment of Regal Cinemas, Inc., allocated on a preliminary basis as follows (in millions):

Property and equipment	$	(33.8	)
Goodwill		(336.2	)
Deferred tax asset		8.0

	$	(362.0	)

Management does not expect final allocations to differ materially from the amounts presented above.

The estimated net use of funds assuming Regal Cinemas, Inc. emerged from bankruptcy on December 27, 2001 (in millions):

Payment of old senior credit facilities		$	(369.4	)
Cash to bondholders			(181.0	)
Redemption of equipment financing note			(17.7	)
Proceeds from senior credit facilities			270.0
Proceeds from new debt offering			200.0
Fees and expenses of new debt			(16.2	)

	Use of cash and cash equivalents (a)	$	(114.3	)

(a): Excludes the aggregate amount of allowed general unsecured claims estimated to be payable to all general unsecured creditors of $69.6 million assuming that all payments to these creditors will be paid under the terms and conditions of Regal Cinemas, Inc.'s emergence from bankruptcy. Certain payments will be deferred as part of the reconciliation and settlement process. The final payment amount may differ from our estimates depending on the final settlement of the claims ultimately determined to be allowable; however, management does not expect such estimates to differ materially from the final settlements.

(5): Represents pro forma adjustments to reflect (i) the contribution, in exchange for shares of Regal Entertainment, of additional minority interests in Edwards Theatres purchased by Anschutz subsequent to December 27, 2001, (ii) the exchange of the minority interest in Edwards Theatres

held by the remaining shareholders of Edwards Theatres, for shares of Regal Entertainment, (iii) the contribution, in exchange for shares of Regal Entertainment, of certain minority interests in United Artists purchased by Anschutz subsequent to December 27, 2001, and (iv) the payment of estimated bankruptcy claims at December 27, 2001. The equity contributions have been reflected at fair value with any difference between fair value and the related minority interest liability reflected, on a preliminary basis, as goodwill in the combined pro forma balance sheet.

(6): Represents the net proceeds received from the offering of $150.0 million principal amount of senior subordinated notes of Regal Cinemas completed on April 17, 2002 and the use of proceeds therefrom and cash on hand for (i) redemption of the preferred stock of Edwards Theatres held by non-Anschutz investors ($27.6 million), (ii) repayment of the subordinated debt of Edwards Theatres held by non-Anschutz investors ($2.4 million), (iii) the repayment of outstanding bank debt of Edwards Theatres ($180 million) and (iv) the redemption of preferred stock and subordinated debt of Edwards Theatres held by Anschutz ($57.4 million). See "Related Party Transactions." Details of these transactions are as follows (in millions):

Use of available cash on hand				$	111.6
Principal amount of senior notes	$	150.0
Repayment of subordinated debt of Edwards Theatres at book value - non-Anschutz investors		(2.1	)
Repayment of subordinated debt of Edwards Theatres at book value - Anschutz		(8.2	)

					139.7

Redemption of preferred stock of Edwards Theatres at book value - non-Anschutz investors		(15.2	)
Redemption of preferred stock of Edwards Theatres at book value - Anschutz		(31.8	)

					(47.0	)

Repayment of outstanding bank debt - current					(12.6	)
Repayment of outstanding bank debt - non-current					(167.4	)
Premium received on placement of debt - non-current					5.3
Premium received (current) and payable for accrued interest					3.0
Note issuance costs					(2.5	)
Excess of redemption costs over book value of preferred stock and subordinated debt of Edwards Theatres - non-Anschutz investors		(12.7	)
Excess of redemption costs over book value of preferred stock and subordinated debt of Edwards Theatres - Anschutz		(17.4	)

					(30.1	)

				$	—

(7): Represents the adjustments for the assumed net proceeds from this offering of $284.0 million and the use of a portion of such proceeds to retire debt with the remainder added to cash and cash equivalents.

SELECTED HISTORICAL FINANCIAL DATA
FOR REGAL ENTERTAINMENT GROUP

We present below selected historical financial data for Regal Entertainment Group based on historical data for the year ended January 3, 2002, considering the historical results for United Artists for the period from March 2, 2001 to January 3, 2002, and Edwards Theatres for the period from October 1, 2001 to December 27, 2001 (the fiscal 2001 periods in which Anschutz controlled United Artists and Edwards Theatres, "the periods under common control"). The selected historical financial data do not necessarily indicate the operating results or financial position which would have resulted from our operation on a combined basis during the period presented, nor do these historical data necessarily represent any future operating results or financial position of Regal Entertainment Group. As historical financial data for Regal Entertainment Group for the periods under common control ended January 3, 2002 includes partial year data for United Artists and Edwards Theatres, we have included limited information for Regal Entertainment Group and more complete financial data for Regal Cinemas, Inc. and United Artists below in order to assist you in making more meaningful comparisons between prior periods. In addition to these selected financial data, you should also refer to the more complete financial information included elsewhere in this prospectus, including more complete historical results for Regal Cinemas, Inc., United Artists and Edwards Theatres and our unaudited pro forma combined results.

	Periods Under Common Control Ended January 3, 2002
	(in millions)
Statement of Operations Data:
Total revenues	$	556.9
Operating income		31.5
Net income		4.9
	As of January 3, 2002
Balance Sheet Data:
Total assets	$	1,122.7
Total debt		438.9
Redeemable preferred stock		47.0
Parent's investment		383.0

SELECTED HISTORICAL FINANCIAL AND OTHER DATA
FOR REGAL CINEMAS, INC.

The selected historical consolidated financial data set forth below were derived from the consolidated financial statements of Regal Cinemas, Inc. The selected historical consolidated financial data as of and for the years ended December 27, 2001, December 28, 2000, December 30, 1999, December 31, 1998 and January 1, 1998, were derived from the consolidated financial statements of Regal Cinemas, Inc. and the notes thereto. The report of Deloitte & Touche LLP, as of December 27, 2001 and December 28, 2000, and for the three years in the period ended December 27, 2001, has been included elsewhere in this prospectus. The selected historical consolidated financial data set forth below should be read in conjunction with, and are qualified in their entirety by the "Unaudited Pro Forma Combined Financial Statements," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Regal Cinemas, Inc.'s consolidated financial statements and notes thereto included elsewhere in this prospectus.

		For or at the Fiscal Year Ended
		December 27, 2001			December 28, 2000			December 30, 1999			December 31, 1998			January 1, 1998
		(in millions, except operating data)
Revenues:
	Admissions	$	799.8		$	767.1		$	690.5		$	462.8		$	325.1
	Concessions		321.3			310.2			285.7			202.4			137.2
	Other		44.5			53.4			60.9			41.8			21.3

Total revenues			1,165.6			1,130.7			1,037.1			707.0			483.6
Operating expenses:
	Film rental and advertising costs		432.4			421.6			384.9			251.3			178.2
	Cost of concessions and other		47.2			49.0			44.3			31.7			21.1
	Other theatre operating expenses		438.2			446.4			377.7			241.7			156.5
	General and administrative expenses		31.6			32.7			32.1			20.4			16.6
	Legal and professional fees related to restructuring		20.8			4.9			—			—			—
	Depreciation and amortization		91.0			95.7			80.8			52.4			30.5
	Merger expenses		—			—			—			—			7.8
	Recapitalization expense		—			—			—			65.7			—
	Theatre closing costs		12.1			55.8			4.3			—			—
	Loss on disposal of operating assets		21.4			20.9			16.8			0.9			—
	Loss on impairment of assets		78.5			113.7			98.6			67.9			5.0

Total operating expenses			1,173.2			1,240.7			1,039.5			732.0			415.7

Operating income (loss)		$	(7.6	)	$	(110.0	)	$	(2.4	)	$	(25.0	)	$	67.9
Net income (loss)			(171.5	)		(366.5	)		(88.5	)		(73.5	)		25.2
Other Financial Data:
EBITDA (1)		$	216.2		$	181.0		$	198.1		$	161.9		$	111.2
EBITDA margin (2)			18.5	%		16.0	%		19.1	%		22.9	%		23.0	%
Cash flow provided by (used in) operating activities		$	152.0		$	(3.6	)	$	92.7		$	45.1		$	64.0
Cash flow used in investing activities			(23.3	)		(62.3	)		(435.9	)		(296.2	)		(202.3	)
Cash flow provided by (used in) financing activities			(9.9	)		144.2			363.2			253.4			139.6

Operating Data:
Theatre locations		304			391			430		403		256
Screens		3,662			4,328			4,413		3,573		2,306
Average screens per location		12.0			11.1			10.3		8.9		9.0
Attendance (in millions)		142.3			143.1			141.0		102.6		76.3
Average ticket price	$	5.62		$	5.36		$	4.90	$	4.51	$	4.26
Average concessions per patron		2.26			2.17			2.03		1.97		1.80
Balance Sheet Data:
Cash and cash equivalents	$	237.7		$	118.8		$	40.6	$	20.6	$	18.4
Total assets		1,870.4			1,991.1			2,080.2		1,660.5		660.7
Total debt		1,922.5			1,998.5			1,779.7		1,341.1		288.6
Stockholders' equity (deficit)		(423.9	)		(252.4	)		114.2		202.5		306.6

(1): EBITDA represents operating income (loss) from continuing operations before depreciation and amortization expense, loss (gain) on disposal of operating assets, loss on impairments of assets, theatre closing costs, lease exit and restructure costs, legal and professional fees related to restructuring and merger and recapitalization expenses. We have included EBITDA in this data because we believe it to be a measure commonly used by investors to analyze and compare companies in our industry. EBITDA is not a measurement of financial performance under generally accepted accounting principles 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 generally accepted accounting principles, 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 under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." EBITDA, as we calculate it, may not be comparable to similarly titled measures reported by other companies.

EBITDA is calculated as follows:

		Fiscal Year Ended
		December 27, 2001			December 28, 2000			December 30, 1999			December 31, 1998			January 1, 1998
		(in millions)
Operating income (loss)		$	(7.6	)	$	(110.0	)	$	(2.4	)	$	(25.0	)	$	67.9
Depreciation and amortization			91.0			95.7			80.8			52.4			30.5
Loss on disposal of operating assets			21.4			20.9			16.8			0.9			—
Loss on impairment of assets			78.5			113.7			98.6			67.9			5.0
Theatre closing costs			12.1			55.8			4.3			—			—
Legal and professional fees—restructuring related			20.8			4.9			—			—			—
Merger and recapitalization expense			—			—			—			65.7			7.8

	EBITDA	$	216.2		$	181.0		$	198.1		$	161.9		$	111.2

(2): Defined as EBITDA as a percentage of total revenues.

SELECTED HISTORICAL FINANCIAL AND OTHER DATA
FOR UNITED ARTISTS

In the table below we provide you with the historical financial data of United Artists. Effective March 1, 2001 United Artists emerged from protection under Chapter 11 of the U.S Bankruptcy Code pursuant to a reorganization plan that provided for the discharge of significant financial obligations. In accordance with AICPA Statement of Position 90-7, United Artists adopted fresh start reporting whereby United Artists' assets, liabilities and new capital structure were adjusted to reflect estimated fair values as of March 1, 2001. For the periods prior to March 2, 2001, the assets and liabilities of United Artists and the related consolidated results of operations are referred to below as "Predecessor Company", and for periods subsequent to March 1, 2001, the assets and liabilities of United Artists and the related consolidated results of operations are referred to as the "Reorganized Company."

As a result of the above, the financial data of the Predecessor Company is not comparable to the financial data of the Reorganized Company. For this and other reasons, you should read the selected historical financial data provided below in conjunction with the consolidated financial statements and accompanying notes found elsewhere in this prospectus and the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations."

			Reorganized Company			Predecessor Company
			Reorganized Company						For The Fiscal Years Ended (1)
			Forty-Four Weeks Ended January 3, 2002						For The Fiscal Years Ended (1)
			Forty-Four Weeks Ended January 3, 2002			Nine Weeks Ended March 1, 2001			December 28, 2000			December 30, 1999			December 31, 1998			December 31, 1997
						(in millions)
Revenue:
	Admissions		$	322.2		$	69.1		$	372.4		$	433.1		$	454.4		$	473.9
	Concession sales			130.1			26.9			154.6			174.4			188.5			189.6
	Other			19.2			3.2			23.3			23.9			19.6			20.8

		Total revenue		471.5			99.2			550.3			631.4			662.5			684.3
Costs and expenses:
	Film rental and advertising expenses			179.3			36.2			204.9			244.0			248.5			262.5
	Direct concession costs			14.8			3.1			18.0			22.7			28.0			30.2
	Other operating expenses			181.4			35.7			227.5			264.0			260.2			258.1
	Sale and leaseback rentals			14.8			2.9			16.9			16.8			14.5			12.8
	General and administrative			16.8			3.2			21.3			22.6			23.4			24.3
	Depreciation and amortization			35.6			6.8			44.8			53.5			53.9			59.0
	Asset impairments, lease exit and restructure costs (2)			2.9			1.1			55.1			61.6			36.3			35.8
	Gain on disposition of assets, net			(2.1	)		(4.6	)		(14.4	)		(4.5	)		(1.0	)		(28.0	)

		Total costs and expenses		443.5			84.4			574.1			680.7			663.8			654.7

Operating income (loss) from continuing operations			$	28.0		$	14.8		$	(23.8	)	$	(49.3	)	$	(1.3	)	$	29.6
Net income (loss) available to common stockholders				3.2			534.4			(123.6	)		(127.3	)		(98.0	)		(50.8	)

	Reorganized Company			Predecessor Company
	Reorganized Company						For The Fiscal Years Ended (1)
	Forty-Four Weeks Ended January 3, 2002						For The Fiscal Years Ended (1)
	Forty-Four Weeks Ended January 3, 2002			Nine Weeks Ended March 1, 2001			December 28, 2000			December 30, 1999			December 31, 1998			December 31, 1997
				(in millions, except operating data)
Other financial data:
EBITDA (3)	$	64.4		$	18.1		$	61.7		$	61.3		$	87.9		$	96.4
EBITDA margin (4)		13.7	%		18.2	%		11.2	%		9.7	%		13.3	%		14.1	%
Cash flow provided by (used in) operating activities	$	38.8		$	(2.7	)	$	(1.2	)	$	(9.5	)	$	55.1		$	48.7
Cash flow provided by (used in) investing activities	$	6.1		$	2.7		$	1.5		$	(35.4	)	$	(120.7	)	$	14.7
Cash flow provided by (used in) financing activities	$	(22.0	)	$	2.6		$	0.3		$	52.7		$	62.9		$	(33.0	)
Operating data:
Theatre locations		205			214			220			291			330			347
Screens		1,574			1,590			1,625			2,049			2,229			2,208
Average screens per location		7.7			7.4			7.4			7.0			6.8			6.4
Attendance (in millions)		54.7			12.0			66.7			80.9			89.5			96.5
Average ticket price	$	5.89		$	5.76		$	5.58		$	5.35		$	5.08		$	4.91
Average concessions per patron		2.38			2.24			2.32			2.15			2.11			1.97
Balance sheet data at period end:
Cash and cash equivalents	$	23.5		$	7.5		$	11.4		$	16.0		$	8.2		$	10.8
Total assets		453.6			422.5			432.5			534.3			579.1			563.0
Total debt (5)		248.6			727.5			722.5			721.6			653.9			414.0
Redeemable preferred stock		—			—			—			—			—			193.9
Stockholders' equity (deficit)		99.4			(519.3	)		(519.3	)		(394.1	)		(268.2	)		(20.3	)

(1): Beginning in 1999, United Artists changed its reporting period from the traditional calendar year to a 52/53 week presentation. The 2001 year contained 53 weeks and ended on January 3, 2002. The 2000 and 1999 years contained 52 weeks and ended on December 28 and December 30, respectively.
(2): Includes non-cash charges for the impairment of long-lived assets in accordance with Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed Of, the non-cash write off of under-performing theatres, and costs related to United Artists' restructuring exclusive of those amounts incurred subsequent to the petition date (September 5, 2000) which are classified as reorganization items.
(3): EBITDA represents operating income (loss) from continuing operations before depreciation and amortization expense, loss (gain) on disposal of operating assets, loss on asset impairments, theatre closing costs, lease exit and restructure costs, legal and professional fees related to restructuring, and merger and recapitalization expenses. We have included EBITDA in this data because we believe it to be a measure commonly used by investors to analyze and compare companies in our industry. EBITDA is not a measurement of financial performance under generally accepted accounting principles 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 generally accepted accounting principles, for purposes of analyzing our profitability or liquidity. In addition, not all funds depicted by pro forma 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 described in more detail under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." EBITDA, as we calculate it, may not be comparable to similarly titled measures reported by other companies.

EBITDA is calculated as follows:

		Reorganized Company			Predecessor Company
		Reorganized Company						For The Fiscal Years Ended (1)
		Forty-Four Weeks Ended January 3, 2002						For The Fiscal Years Ended (1)
		Forty-Four Weeks Ended January 3, 2002			Nine Weeks Ended March 1, 2001			December 28, 2000			December 30, 1999			December 31, 1998			December 31, 1997
					(in millions)
Operating income (loss)		$	28.0		$	14.8		$	(23.8	)	$	(49.3	)	$	(1.3	)	$	29.6
Depreciation and amortization			35.6			6.8			44.8			53.5			53.9			59.0
Gain on disposal of operating assets			(2.1	)		(4.6	)		(14.4	)		(4.5	)		(1.0	)		(28.0	)
Asset impairments, lease exit and restructure costs			2.9			1.1			55.1			61.6			36.3			35.8

	EBITDA	$	64.4		$	18.1		$	61.7		$	61.3		$	87.9		$	96.4

(4): Defined as EBITDA as a percentage of total revenue.
(5): Total debt at December 28, 2000 and at March 1, 2001 includes $716.4 million of debt that is a liability subject to compromise as part of United Artists' reorganization.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements of Regal, Regal Cinemas, Inc., United Artists, Edwards Theatres and notes thereto and the Unaudited Pro Forma Combined Financial Statements and notes thereto contained elsewhere in this prospectus. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including but not limited to, those described in the "Risk Factors" section of this prospectus. Our actual results may differ materially from those contained in any forward-looking statements.

Overview

We are the largest domestic motion picture exhibitor with 5,886 screens in 561 theatres in 36 states. We primarily conduct our operations through our wholly owned subsidiaries, Regal Cinemas, Edwards Theatres and Regal CineMedia, and our approximately 90% owned subsidiary United Artists.

Regal was created through a series of transactions during 2001 and 2002. Anschutz acquired controlling equity interests in United Artists and Edwards Theatres upon United Artists' emergence from bankruptcy reorganization on March 1, 2001 and Edwards Theatres' emergence from bankruptcy reorganization on September 29, 2001. On January 29, 2002, Anschutz acquired a controlling equity interest in Regal Cinemas, Inc. when Regal Cinemas, Inc. and its subsidiaries emerged from bankruptcy reorganization. Anschutz exchanged its controlling equity interest in Regal Cinemas, Inc. for a controlling equity interest in Regal Cinemas immediately thereafter. Regal Cinemas, Inc. is a wholly owned subsidiary of Regal Cinemas. Regal CineMedia was formed in February 2002 to focus on the development of ancillary revenues. In April 2002, Anschutz contributed its controlling equity interest in Next Generation Network to Regal CineMedia in exchange for Regal CineMedia's capital stock and, in turn, contributed the capital stock of Regal CineMedia to Regal in exchange for Class B common stock.

Our financial statements reflect the results of operations from the dates Anschutz acquired its controlling equity interests. These controlling equity interests have been recorded in our financial statements at the combined historical cost basis of Anschutz. Our fiscal 2001 financial statements reflect the results of United Artists from March 2, 2001, and Edwards Theatres from September 30, 2001. Our 2001 results of operations do not include Regal Cinemas, Inc. Our 2002 results of operations will include Regal Cinemas from January 30, 2002. Regal CineMedia is in its formative stage and has not generated revenue nor incurred significant operating expenses. Therefore, we believe our historical results of operations are not indicative of our current operations.

We have provided unaudited pro forma combined results of operations for fiscal 2001 because (i) the results of Regal Cinemas, Inc. are significant, (ii) our historical results do not include a full year's results of United Artists and Edwards Theatres, and (iii) the effects of the reorganizations on our theatre operations are material. We believe this presentation of the pro forma combined results of operations for fiscal 2001 as set forth below is more useful in understanding our current operations than our historical 2001 financial statements.

This financial data gives pro forma effect to those transactions described under "Unaudited Pro Forma Combined Financial Statements," as if those transactions had occurred at the beginning of fiscal 2001 or fiscal 2000, as appropriate. We have included 2000 pro forma combined financial data to provide, in the opinion of management, a meaningful period-to-period comparison with our 2001 unaudited pro forma combined data. This pro forma combined financial data should not be viewed as a substitute for our historical results of operations determined in accordance with generally accepted accounting principles.

We have also provided the historical results of operations for Regal Cinemas, Inc. and United Artists for their past three fiscal years because the results of Regal Cinemas, Inc. and United Artists are significant and important to understanding our business.

In 2001 and 2002, United Artists, Edwards Theatres and Regal Cinemas, Inc. completed reorganizations which had the effect of improving our asset base, balance sheet and profitability. As part of the reorganizations, our management conducted an extensive review of the combined theatre portfolio. On a combined basis, we closed 279 under-performing theatres representing 1,836 screens since January 2000. While the closing of these under-performing theatres reduced our combined operating revenues, the costs associated with operating the theatres exceeded the revenues that the theatres generated. Notably, we are not continuing to pay rent on any non-cancellable leases related to the closed theatres. We have renegotiated leases at 98 of our continuing theatres to obtain rent reductions, lease termination rights or shorter lease terms. These renegotiated leases enable us to increase our cash flow from operations by reducing our rent expense and to exit leases in which we have termination rights that do not satisfy our strategic and financial return criteria. Our pro forma adjustments do not include reductions in rent or other occupancy costs resulting from these lease renegotiations.

The industry is in the early stages of conversion from film based media to electronic based media. This anticipated conversion could impact virtually the entire industry, including content providers, distributors, equipment providers and exhibitors. Should the conversion process rapidly accelerate, substantial capital expenditures would be required to implement the conversion. Although we anticipate and are preparing to make the change, we do not believe that the conversion will happen quickly because electronic based media still require significant development before being ready to augment or replace film based media.

On a pro forma basis, we operated 5,911 screens at the end of 2000. During 2001, we acquired or developed 110 screens and closed or sold 135 screens resulting in 5,886 screens at the end of 2001. During 2002, we expect to open two theatres with 30 screens, add approximately 15 screens to existing theatres and close approximately 20 theatres with 140 screens.

Basis of Reporting

Admissions and Concessions Revenues

We generate revenues primarily from admissions receipts and concessions sales.

Other Operating Revenues

We generate other operating revenues from on-screen advertising, other in-theatre advertising programs and vendor marketing programs.

Direct Theatre Costs

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

RESULTS OF OPERATIONS—PRO FORMA COMBINED AND COMBINED ADJUSTED HISTORICAL

The following table sets forth for the fiscal periods indicated the percentage of total revenues represented by the specified items included in our unaudited pro forma combined statement of operations for 2001 and combined adjusted historical data for 2000. This financial data gives effect to those transactions described above under "Regal Entertainment Group Unaudited Pro Forma Combined Financial Statements," as if those transactions had occurred at the beginning of fiscal 2001 or 2000, as appropriate. For purposes of the discussion below, we have included this comparison based on unaudited pro forma financial data for 2001 and combined adjusted historical for 2000 because we believe it provides a more meaningful basis for period-to-period comparisons than actual historical financial data. The combined adjusted historical financial data represents the financial data for Regal assuming the pro forma statement of operations adjustments as outlined under "Regal Entertainment Group Unaudited Pro Forma Combined Financial Statements." This pro forma and combined adjusted historical financial data should not be viewed as a substitute for our results of operations determined in accordance with generally accepted accounting principles. The following pro forma and combined adjusted historical financial data does not purport to be indicative of future results of operations.

			Pro Forma		Combined Adjusted Historical
			Fiscal Year Ended
			December 27, 2001		December 28, 2000
Revenues:
	Admissions		69.2	%	69.5	%
	Concessions		27.3		27.1
	Other operating revenues		3.5		3.4

		Total revenues	100.0		100.0
Direct theatre costs:
	Film rental and advertising costs		37.8		37.8
	Cost of concessions		3.8		3.9
	Theatre operating expenses		37.4		37.9
	General and administrative		3.3		4.3

		Sub-total	82.3		83.9
	Depreciation and amortization		7.5		7.0
	Gain on disposal of operating assets		(0.1	)	(1.0	)
	Loss on impairment of assets		2.6		2.8

		Total operating expenses	92.3		92.7

Operating income			7.7	%	7.3	%

Pro Forma Year Ended December 27, 2001 Compared to Combined Adjusted Historical Year Ended December 28, 2000

Total Revenues

The following table summarizes revenues and revenue-related data for fiscal 2001 and 2000 (in millions, except averages):

		Pro Forma		Combined Adjusted Historical
		Fiscal Year Ended
		December 27, 2001		December 28, 2000
Admissions		$	1,403.3	$	1,263.9
Concessions			553.4		492.5
Other operating revenues			70.4		62.1

	Total revenues	$	2,027.1	$	1,818.5

Attendance			241.1		224.5
Average ticket price		$	5.82	$	5.63
Average concessions per patron			2.30		2.19

Admissions. Total admissions revenues increased $139.4 million, or 11.0%, to $1,403.3 million, for fiscal 2001, from $1,263.9 million for fiscal 2000. The increase in admissions revenues in 2001 compared to 2000 was primarily attributable to an approximately 3.4% increase in ticket prices coupled with a 7.4% increase in attendance.

Concessions. Total concessions revenues increased $60.9 million, or 12.4%, to $553.4 million for fiscal 2001, from $492.5 million for fiscal 2000. The increase in concessions revenues in 2001 compared to 2000 was primarily due to both higher attendance and an increase in concessions prices. Average concessions per patron increased 5.0% from 2000 to 2001.

Other Operating Revenues. Total other operating revenues increased $8.3 million, or 13.4%, to $70.4 million for fiscal 2001, from $62.1 million for fiscal 2000. The increase in other operating revenues in 2001 compared to 2000 was primarily attributable to increased revenues from on-screen advertising and other vendor marketing programs.

Direct Theatre Costs

The following table summarizes direct theatre costs for fiscal 2001 and 2000 (dollars in millions):

		Pro Forma				Combined Adjusted Historical
		Fiscal Year Ended
		December 27, 2001				December 28, 2000
		$		% of Revenues		$		% of Revenues
Film rental and advertising costs (1)		$	766.2	54.6	%	$	686.6	54.3	%
Cost of concessions (2)			76.8	13.9			70.7	14.4
Other theatre operating expenses (3)			758.6	37.4			689.9	37.9

	Total direct theatre costs (3)	$	1,601.6	79.0	%	$	1,447.2	79.6	%

(1): Percentage of revenues calculated as a percentage of admissions revenues.

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

Film Rental and Advertising Costs. Film rental and advertising costs increased $79.6 million, or 11.6%, to $766.2 million for fiscal 2001, from $686.6 million for fiscal 2000. Film rental and advertising costs as a percentage of admissions revenues increased to 54.6% in 2001 as compared to 54.3% in 2000. The increase in film rental and advertising costs as a percentage of admissions revenues in 2001 from 2000 was primarily attributable to a slight increase in film rental costs as a percentage of admissions revenue partially offset by a decline in advertising costs as a percentage of admissions revenues.

Cost of Concessions. Cost of concessions increased $6.1 million, or 8.6%, to $76.8 million for fiscal 2001, from $70.7 million for fiscal 2000. Cost of concessions as a percentage of concessions revenues decreased to 13.9% in 2001 as compared to 14.4% in 2000. The decrease in cost of concessions as a percentage of concessions revenues in 2001 was primarily attributable to purchasing cost reductions and increases in vendor marketing programs.

Other Theatre Operating Expenses. Other theatre operating expenses increased $68.7 million, or 10.0%, to $758.6 million for fiscal 2001, from $689.9 million for fiscal 2000. Other theatre operating expenses as a percentage of total revenues decreased to 37.4% in 2001 as compared to 37.9% in 2000. The decrease in other theatre operating expenses as a percentage of total revenues in 2001 was primarily attributable to the fixed cost nature of rent and occupancy costs coupled with the increase in total revenue.

General and Administrative Expenses

General and administrative expenses decreased $10.3 million, or 13.2%, to $67.5 million for fiscal 2001, from $77.8 million for fiscal 2000. As a percentage of total revenues, general and administrative expenses decreased to 3.3% in 2001 from 4.3% in 2000. The decrease in 2001 reflected a decline in corporate payroll costs primarily attributable to restructuring of operations in the course of and following the reorganization proceedings of United Artists, Edwards Theatres and Regal Cinemas, Inc., including closing of underperforming theatre locations, reductions in personnel, the elimination of offices and other measures.

EBITDA

EBITDA increased $64.5 million, or 22.0%, to $358.0 million in 2001, from $293.5 million for 2000. EDITDA as a percentage of total revenues increased to 17.7% in 2001 from 16.1% in 2000.

Operating Income

Operating income increased by $24.6 million (including the effects of $5.5 million of deferred compensation amortization in 2001), or 18.6%, to $156.9 million for 2001, from $132.3 million for 2000. Operating income as a percentage of total revenues increased to 7.7% in 2001 from 7.3% in 2000.

PRO FORMA COMBINED LIQUIDITY AND CAPITAL RESOURCES

We primarily conduct our operations through our subsidiaries: Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia. We were formed in March 2002 and as such we have not experienced significant uses of cash to date. We expect our primary uses of cash to be for operating expenses and general corporate purposes related to corporate operations. Our principal sources of liquidity will be cash from our operating subsidiaries and cash from this offering. In our operating subsidiaries, our principal uses of cash will be for operating expenses, capital expenditures, working

capital and debt service. The principal sources of liquidity for our theatre subsidiaries will be cash generated from their operations, cash on hand and the revolving credit facilities provided for under the Regal Cinemas and United Artists senior credit facilities.

Our revenues are generally collected in cash through admissions and concessions revenues. Our 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 our concessions are generally paid to vendors approximately 30 days from purchase. Because our revenues are primarily cash transactions from admissions and concessions, but our current liabilities generally include items that will become due within twelve months, at any given time, our balance sheet is likely to reflect a working capital deficit.

On a pro forma as adjusted basis, we estimate our contractual cash obligations over the next several periods to be as follows (in thousands):

	Payments Due by Period
	Total		Current		2-3 Years		4-5 Years		After 5 Years
Contractual Cash Obligations
Long-term debt	$	620,000	$	13,500	$	27,000	$	27,000	$	552,500
Capital lease obligations		4,270		158		331		453		3,328
Lease financing arrangements		99,445		1,613		3,909		5,514		88,409
Operating leases		3,594,821		225,467		450,803		440,405		2,478,146
General unsecured creditors		113,521		113,521		—		—		—
Other long term obligations		9,078		961		1,938		2,692		3,487

Total contractual cash obligations	$	4,441,135	$	355,220	$	483,981	$	476,064	$	3,125,870

The following table summarizes our potential commitments based on arrangements in place as of December 27, 2001 (in thousands):

	Amount of Commitment Expiration per Period
	Total Amounts Committed		Current	2-3 Years	4-5 Years	After 5 Years
Other Commercial Commitments
Lines of credit	$	100,000	—	—	—	$	100,000
Standby letters of credit		30,000	—	—	—		30,000

Total commercial commitments	$	130,000	—	—	—	$	130,000

We fund the cost of our operating subsidiaries' capital expenditures through internally generated cash flow, cash on hand and financing activities. Our capital requirements have historically arisen principally in connection with acquisitions of theatres, new theatre openings, adding new screens to existing theatres and upgrading our theatre facilities. During fiscal 2001, we invested $52.1 million in capital expenditures for theatres not closed or rejected during the bankruptcy reorganizations.

We intend to continue to grow our theatre circuit through selective expansion and acquisition opportunities. We anticipate that capital expenditures related to our theatre circuit will be approximately $80.0 million in 2002. We have commitments to build three new theatres representing an aggregate of 44 screens and, in 2002, expect to add 15 screens to existing theatres. In addition to capital expenditures associated with our theatre operations, we expect to have capital expenditures of approximately $25.0 million in connection with Regal CineMedia during 2002, almost entirely in the second half of the year. We anticipate a significant portion of these capital expenditures to be made in connection with the purchase of digital equipment to provide advertising and promotional services. As

we build our digital network and attempt to grow our ancillary revenues, we expect Regal CineMedia to generate an operating loss in 2002. Our primary sources of liquidity to fund these losses and capital expenditures will be cash on hand, cash from United Artists and cash from this offering.

Upon completion of this offering and applying the proceeds as set forth under "Use of Proceeds," we will have approximately $123.2 million of cash on hand and $732.7 million of debt at our subsidiaries in the form of senior credit facilities, senior subordinated notes, lease financing arrangements and other debt. As of December 27, 2001, on a pro forma basis, Regal Cinemas had $100.0 million available under its undrawn senior revolving credit facility, $270.0 million outstanding under its senior secured term loan and $350.0 million of senior subordinated notes due February 1, 2012. During 2002, we will have maturities of $16.2 million related to long-term debt obligations of Regal Cinemas.

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

The following is a description of material indebtedness of Regal Entertainment:

Regal Cinemas Senior Credit Facility

Regal Cinemas entered into a senior credit agreement with several financial institutions including Lehman Brothers Inc., Credit Suisse First Boston Corporation, General Electric Capital Corporation and Lehman Commercial Paper Inc. on January 29, 2002. Under the credit agreement, the lenders advanced Regal Cinemas $270.0 million through a senior secured term loan and have made available, subject to the satisfaction of conditions customary for extensions of credit of this type, an additional $100.0 million through a senior secured revolving credit facility. The term loan will amortize at a rate of 5% per annum for the first five years, with the remaining 75% due on January 29, 2008. The revolving credit facility became available on January 29, 2002 and will be available until January 29, 2007.

Borrowings bear interest, at Regal Cinemas' option, at either the base rate or Eurodollar rate plus, in each case, an applicable margin. The applicable margin for loans under the revolving credit facility is subject to adjustment based upon the consolidated total leverage ratio of Regal Cinemas. The base rate is a fluctuating interest rate equal to the higher of (a) the British Banking Association's prime rate or (b) the Federal Funds Effective Rate plus 0.5%. Regal Cinemas must also pay customary administration fees, expenses and commitment fees on the unused portion of the revolving credit facility and provide indemnities for liabilities arising in particular circumstances.

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

•: the net cash proceeds from asset sales in particular circumstances specified in the credit agreement;
•: up to 50% of their excess cash flow; and
•: the net cash proceeds from new debt or equity issuances in particular circumstances specified in the credit agreement.

The mandatory prepayment of the obligations under the credit agreement are subject to specified exceptions. The lenders under the term loan facility may elect to decline any mandatory prepayment.

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

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

•: its ratio of consolidated total debt to consolidated EBITDA to exceed the ratio of (a) 3.75 to 1 for the first through third fiscal quarters in 2002, (b) 3.50 to 1 for the fourth fiscal quarter in 2002 through the third fiscal quarter in 2004 and (c) 3.25 to 1 for the fourth fiscal quarter in 2004 through the fourth fiscal quarter in 2007 and thereafter;
•: its ratio of consolidated EBITDA plus consolidated rent expense to interest plus rent expense to be less than 1.50 to 1 for any period of four consecutive fiscal quarters;
•: its ratio of consolidated senior debt to consolidated EBITDA to exceed the ratio of (a) 2.65 to 1 for the first through the third fiscal quarters in 2002, (b) 2.40 to 1 for the fourth fiscal quarter 2002 through the third fiscal quarter in 2003, (c) 2.15 to 1 from the fourth fiscal quarter in 2003 through the third fiscal quarter in 2004, (d) 2.00 to 1 from the fourth fiscal quarter in 2004 through the third fiscal quarter in 2005, (e) 1.75 to 1 from the fourth fiscal quarter in 2005 through the fourth fiscal quarter in 2007 and thereafter;
•: its ratio of consolidated adjusted debt to consolidated EBITDA plus consolidated rent expense to exceed the ratio of (a) 5.75 to 1 for the first fiscal quarter in 2002 through the third fiscal quarter in 2002, (b) 5.50 to 1 for the fourth fiscal quarter in 2002 through the third fiscal quarter in 2004 and (c) 5.25 to 1 for the fourth fiscal quarter in 2004 through the fourth fiscal quarter in 2007 and thereafter; and
•: its capital expenditures as a percentage of the prior year's EBITDA to exceed 25% for fiscal 2002 and up to 35% for each year thereafter.

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

Regal Cinemas Senior Subordinated Notes

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

Regal Cinemas has the option to redeem the notes, in whole or in part, at any time on or after February 1, 2007 at redemption prices declining from 104.688% of their principal amount on

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

The notes have not been registered under the Securities Act of 1933, as amended. Under a registration rights agreement entered into in connection with the notes offering, Regal Cinemas is required to offer to exchange identical notes that have been registered under the Securities Act for the existing notes. Under the registration rights agreement, Regal Cinemas must file a registration statement with respect to the exchange notes on or before May 14, 2002 and must complete the notes exchange within 30 days after the registration statement is declared effective. Under certain circumstances, Regal Cinemas may also be required to file a shelf registration statement. If Regal Cinemas defaults on any of the registration covenants under the registration rights agreement, Regal Cinemas will be required to pay liquidated damages to the affected noteholders in an amount equal to 0.25% per annum of the principal amount of notes held by such holders for the first 90 day period immediately following a default. Thereafter, the amount of liquidated damages will increase by an additional 0.25% per annum with respect to each subsequent 90 day period until all defaults are cured, up to a maximum amount of 2.0% of the principal amount of the affected notes.

Regal Cinemas, Inc. Leveraged Sale and Leaseback

During 2000, Regal Cinemas, Inc. entered into a sale and leaseback transaction with an unaffiliated third party, involving 15 of its owned theatres. Under the terms of this transaction, Regal Cinemas, Inc. sold the land and related improvements of the theatres for $45.2 million and leased them back for an initial lease term of 20 years, with an option to extend it for up to 20 additional years. Regal Cinemas accounts for these leases as operating leases. Rent expense during the initial term is approximately $5.0 million annually. Regal Cinemas is amortizing the gain on the sale of $2.1 million over the initial lease term of 20 years and will offset rent expense.

Regal Cinemas Lease Financing Arrangements

For some of our new theatre sites built in fiscal years 1999, 2000 and 2001, we were considered the owner (for accounting purposes) of the theatre during the construction period. In accordance with Emerging Issues Task Force (EITF) No. 97-10, we were required to record the balance sheet obligations when the construction of the theatre was completed resulting in payments being recorded as interest expense and principal reduction rather than rent expense. These leases typically run for a period of 20 years. The application of the provisions of EITF No. 97-10 resulted in the recording of approximately $7.1 million and $82.9 million of such leases as capital leases in 2001 and 2000, respectively. The application of the provisions of EITF No. 97-10 has resulted in payments of $16.9 million and $16.1 million in 2001 and 2000, respectively, that would have otherwise been shown as rent expense.

United Artists Leveraged Sale and Leaseback

In December 1995, United Artists entered into a sale and leaseback transaction whereby the land and buildings underlying 27 of its operating theatres and four theatres and a screen addition under development were sold to and leased back from an unaffiliated third party. The transaction requires

United Artists to lease the underlying theatres for a period of 21 years and one month, with the option to extend for up to an additional 10 years. In conjunction with the transaction, the buyer of the properties issued publicly traded pass-through certificates. Several of its properties included in the sale and leaseback transaction have been determined by United Artists to be economically obsolete for theatre use. United Artists amended the lease on March 7, 2001 to allow United Artists to terminate the master lease with respect to the obsolete properties, allow the owner trustee to sell those properties and pay down the underlying debt and reduce the amount of rent paid by United Artists on the lease. Approximately $97.4 million in principal amount of pass-through certificates are outstanding.

In connection with the 1995 sale and leaseback transaction, United Artists entered into a Participation Agreement that requires United Artists to comply with various covenants, including, as described below, limitations on: indebtedness, restricted payments, transactions with affiliates, guarantees, issuance of preferred stock of subsidiaries and subsidiary distributions, transfer of assets and dividends. Pursuant to these covenants, United Artists is not permitted to (and is prohibited from letting a subsidiary, as the case may be):

•: Create, incur, assume or guarantee any indebtedness, unless the United Artists' consolidated fixed charge coverage ratio for the fiscal quarters immediately preceding such event, on a pro forma basis, would have been 1.40:1.
•: Declare or pay any dividend on, or make any distribution in respect of, any shares of United Artists' capital stock (except for dividends or distributions payable in shares of its capital stock or in options or warrants), purchase, redeem or acquire or retire for value any capital stock of United Artists or any affiliate, unless at the time of and after giving effect to the proposed restricted payment, (i) no default of event of default have occurred, (ii) United Artists could incur $1.00 of additional indebtedness and (ii) the aggregate amount of all restricted payments declared or made after May 12, 1992 does not exceed, among other things, the sum of 50% of the aggregate cumulative consolidated adjusted net income of United Artists.
•: Enter into any transaction with any affiliate of United Artists unless such transaction are on terms no less favorable to United Artists than would be available in a comparable transaction in arms-length dealings with a third party or for transactions involving aggregate payments equal to or greater than $10,000,000, United Artists shall have obtained a written fairness opinion of an independent investment banking firm or appraiser.
•: Let any subsidiary issue any preferred stock (other than to United Artists or a wholly owned subsidiary of United Artists) or permit any person to own or hold an interest in any preferred stock of any such subsidiary.
•: Transfer property among itself and its subsidiaries, except under limited circumstances.

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

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

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

Edwards Theatres Leveraged Sale and Leaseback

During 2000, Edwards Theatres entered into two sale leaseback transactions whereby Edwards Theatres sold and leased back two of its properties from an unaffiliated third party. The sale resulted in a $3.9 million gain which was deferred and is being amortized over the life of the leaseback. As part of these transactions, an additional location was sold with a portion of the building being leased back for corporate use. The related leases are being accounted for as operating leases.

During 1999, Edwards Theatres entered into four sale and leaseback transactions whereby Edwards Theatres sold and leased back four theatres from an unaffiliated third party. The sale of three of these theatres resulted in a $1.2 million gain which was deferred and is being amortized over the life of the leaseback. The sale of the remaining theatre resulted in a $0.3 million loss which was recognized in 1999. The related leases are being accounted for as operating leases.

Bankruptcy Claims

Regal Cinemas, Inc. and Edwards Theatres have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation.

Regal Cinemas, Inc. has accrued approximately $69.6 million during 2001 to resolve its claims. In the opinion of management, based on its examinations of these matters and discussions with legal counsel, the actual payment of these claims is not expected to materially exceed the liability accrued as of December 27, 2001.

The payment of these claims will be funded from cash on hand at Regal Cinemas. The timing of the payment of these claims will depend upon the resolution of these claims.

Edwards Theatres has accrued approximately $43.9 million during 2001 for the estimated costs to resolve outstanding 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 liquidity. The payment of these claims will be funded from cash on hand at Edwards Theatres and, if the allowed claims exceed $55 million, from contributions by Anschutz and Oaktree's Principal Activities Group. Any contributions made by Anschutz and Oaktree's Principal Activities Group will be reimbursed in cash and shares of our Class A common stock by Ms. Carole Ann Ruoff, Ms. Joan Edwards Randolph and Edwards Affiliated Holdings, LLC. See "Business—Legal Proceedings—Edwards Theatres' Reorganization."

RESULTS OF OPERATIONS—REGAL ENTERTAINMENT GROUP

Regal was created through a series of transactions during 2001 and 2002. Anschutz acquired controlling equity interests in United Artists and Edwards Theatres upon United Artists' emergence from bankruptcy reorganization on March 1, 2001 and Edwards Theatres' emergence from bankruptcy reorganization on September 29, 2001. On January 29, 2002, Anschutz acquired a controlling equity interest in Regal Cinemas, Inc. when Regal Cinemas, Inc. and its subsidiaries emerged from bankruptcy reorganization. Anschutz exchanged its controlling equity interest in Regal Cinemas, Inc. for a controlling equity interest in Regal Cinemas immediately thereafter. Regal Cinemas, Inc. is a wholly owned subsidiary of Regal Cinemas. Regal CineMedia was formed in February 2002 to focus on the development of ancillary revenues.

Our financial statements reflect the results of operations from the dates Anschutz acquired its controlling equity interests. These controlling equity interests have been recorded in our financial statements at the combined historical cost basis of Anschutz. Our fiscal 2001 financial statements reflect the results of United Artists from March 2, 2001, and Edwards Theatres from September 30, 2001. Our 2001 results of operations do not include Regal Cinemas, Inc. Our 2002 results of operations will include Regal Cinemas from January 30, 2002. Regal CineMedia to date has not generated significant revenue nor incurred significant operating expenses or made significant capital expenditures. Therefore, we believe our historical results of operations are not indicative of our current operations.

Our predessor company is United Artists and we have provided analysis of results of operations for United Artists in this "Management Discussion and Analysis of Financial Condition and Results of Operations." We have not provided a comparison of our 2001 results versus those of our predessor company in 2000 because (i) 2001 does not include a full year's operations for United Artists and (ii) 2001 includes three months of Edwards Theatres. Therefore, we do not believe a period-to-period comparison of these results would be useful in understanding our current operations.

The following discussion is based on the historical results of operations for United Artists and for Edwards Theatres for the periods under common control ended January 3, 2002.

For the Periods Under Common Control Ended January 3, 2002

Total Revenues

The following table summarizes revenues for the periods under common control ended January 3, 2002 (in millions):

		Periods Under Common Control Ended January 3, 2002
Admissions		$	382.5
Concessions			153.3
Other operating revenues			21.1

	Total revenues	$	556.9

The following table summarizes direct theatre costs for the periods under common control ended January 3, 2002 (in millions):

	Periods Under Common Control Ended January 3, 2002
	$		% of Revenues
Film rental and advertising costs (1)	$	212.9	55.7	%
Cost of concessions (2)		18.1	11.8
Other theatre operating expenses (3)		227.5	40.9

Total direct theatre costs (3)	$	458.5	82.3	%

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

General and Administrative Expenses

General and administrative expenses were $21.4 million, or 3.8% of total revenues, for the periods under common control ended January 3, 2002.

EBITDA

EBITDA was $77.0 million, or 13.8% of total revenues, for the periods under common control ended January 3, 2002.

Operating Income

Operating income was $31.5 million, or 5.7% of total revenues, for the periods under common control ended January 3, 2002.

Redemption of Edwards Theatres preferred stock and subordinated debt—2002

The difference between the carrying value of the preferred stock and subordinated debt of Edwards Theatres and the redemption price will be a charge to equity (approximately $30 million) and will be reflected as a charge against earnings available to common stockholders in our 2002 financial statements.

RESULTS OF OPERATIONS—REGAL CINEMAS, INC.

The following table sets forth for the fiscal periods indicated the percentage of total revenues represented by the specified items included in Regal Cinemas, Inc.'s consolidated statements of operations:

			Fiscal Year Ended
			December 27, 2001		December 28, 2000		December 30, 1999
Revenues:
	Admissions		68.6	%	67.8	%	66.6	%
	Concessions		27.6		27.5		27.5
	Other operating revenues		3.8		4.7		5.9

		Total revenues	100.0		100.0		100.0
Direct theatre costs:
	Film rental and advertising costs		37.1		37.3		37.1
	Cost of concessions		4.0		4.3		4.3
	Theatre operating expenses		37.6		39.5		36.4
	General and administrative		2.7		2.9		3.1

		Sub-total	81.4		84.0		80.9
	Legal and professional fees—restructuring		1.9		0.4		—
	Depreciation and amortization		7.8		8.5		7.8
	Theatre closing costs		1.0		4.9		0.4
	Loss on disposal of operating assets		1.9		1.8		1.6
	Loss on impairment of assets		6.7		10.1		9.5

		Total operating expenses	100.7		109.7		100.2

	Operating loss		(0.7	)%	(9.7	)%	(0.2	)%

Fiscal Years Ended December 27, 2001, December 28, 2000 and December 30, 1999

Total Revenues

The following table summarizes revenues and revenue-related data for fiscal 2001, 2000 and 1999 (in millions, except averages):

		Fiscal Year Ended
		December 27, 2001		December 28, 2000		December 30, 1999
Admissions		$	799.8	$	767.1	$	690.5
Concessions			321.3		310.2		285.7
Other operating revenues			44.5		53.4		60.9

	Total revenues	$	1,165.6	$	1,130.7	$	1,037.1

Attendance			142.3		143.1		141.0
Average ticket price		$	5.62	$	5.36	$	4.90
Average concessions per patron			2.26		2.17		2.03

Admissions. Total admissions revenues increased $32.7 million, or 4.3%, to $799.8 million for fiscal 2001 from $767.1 million for fiscal 2000, which increased $76.6 million, or 11.1%, from $690.5 million for fiscal 1999. The increase in admissions revenues in 2001 compared to 2000 was primarily attributable to an approximately 4.9% increase in ticket prices, which was partially offset by a 0.6% decrease in attendance due primarily to the closure of under-performing theatres. The increase in

admissions revenues in fiscal 2000 compared to fiscal 1999 was primarily attributable to an approximately 9.4% increase in ticket prices coupled with a 1.5% increase in attendance.

Concessions. Total concessions revenues increased $11.1 million, or 3.6%, to $321.3 million in 2001 from $310.2 million for 2000, which increased $24.5 million, or 8.6%, from $285.7 million for 1999. The increase in concessions revenues in 2001 compared to 2000 was due to a 4.2% increase in average concessions per patron, which was partially offset by a 0.6% decrease in attendance. The increase in concessions revenues in 2000 compared to 1999 was primarily due to both higher attendance and an increase in concessions per patron.

Other Operating Revenues. Total other operating revenues decreased $8.9 million, or 16.7%, to $44.5 million in 2001, from $53.4 million for 2000, which decreased $7.5 million, or 12.3%, from $60.9 million for 1999. Included in other operating revenues are on-screen advertising revenues and other marketing revenues from our vendor programs. Other operating revenues were lower in 2001 primarily due to the elimination of revenues from Regal Cinemas, Inc.'s entertainment centers, "Funscapes," which were closed in November 2000. This decrease was partially offset by increased revenues from on-screen advertising and vendor marketing programs. The decrease in other operating revenues in 2000 compared to 1999 was primarily attributable to declines in revenues associated with the closure of the Funscapes.

Direct Theatre Costs

The following table summarizes direct theatre costs for fiscal 2001, 2000 and 1999 (dollars in millions).

		Fiscal Year Ended
		December 27, 2001				December 28, 2000				December 30, 1999
		$		% of Revenues		$		% of Revenues		$		% of Revenues
Film rental and advertising costs (1)		$	432.4	54.1	%	$	421.6	55.0	%	$	384.9	55.7	%
Cost of concessions (2)			47.2	14.7			49.0	15.8			44.3	15.5
Other theatre operating expenses (3)			438.2	37.6			446.4	39.5			377.7	36.4

	Total direct theatre costs (3)	$	917.8	78.7	%	$	917.0	81.1	%	$	806.9	77.8	%

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

Film Rental and Advertising Costs. Film rental and advertising costs increased $10.8 million, or 2.6%, to $432.4 million in 2001, from $421.6 million for 2000, which increased $36.7 million, or 9.5%, from $384.9 million for 1999. Film rental and advertising costs as a percentage of admissions revenues decreased to 54.1% in 2001 as compared to 55.0% in 2000, which decreased from 55.7% in 1999. The increase in film rental and advertising costs in 2001 from 2000 was primarily attributable to higher box office revenues, which translated into higher film rental costs. The decrease in film rental and advertising costs as a percentage of admissions revenues is primarily attributable to a decline in advertising costs associated with the closure of under-performing theatres combined with a decline in the number of new theatre openings in 2001 as compared to 2000. The decrease in film rental and advertising costs as a percentage of admissions revenues in 2000 was primarily attributable to the higher film rental costs associated with the release of "Star Wars—The Phantom Menace" in 1999.

Cost of Concessions. Cost of concessions decreased $1.8 million, or 3.7%, to $47.2 million in 2001, from $49.0 million for 2000, which increased $4.7 million, or 10.6%, from $44.3 million for 1999. Cost of concessions as a percentage of concessions revenues decreased to 14.7% in 2001 as compared to 15.8% in 2000, which increased from 15.5% in 1999. The decrease in the cost of concessions as a percentage of concessions revenues in 2001 is primarily attributable to the continued closure of under-performing theatres and the closure of the Funscapes. The increase in cost of concessions as a percentage of concessions revenues in 2000 was primarily attributable to increases in cost associated with a higher mix of specialty cafes as well as increases in Funscapes' concession costs.

Other Theatre Operating Expenses. Other theatre operating expenses decreased $8.2 million, or 1.8%, to $438.2 million in 2001, from $446.4 million for 2000, which increased $68.7 million, or 18.2%, from $377.7 million for 1999. Other theatre operating expenses as a percentage of total revenues decreased to 37.6% in 2001 as compared to 39.5% in 2000, which increased from 36.4% in 1999. The decrease in other theatre operating expenses as a percentage of total revenues in 2001 is primarily attributable to declines in rent and occupancy costs associated with the continued closure of under-performing theatres. The increase in other theatre operating expenses as a percentage of total revenues in 2000 was primarily attributable to the rent and occupancy costs associated with Regal Cinemas, Inc.'s expansion efforts.

General and Administrative Expenses

General and administrative expenses decreased $1.1 million, or 3.4%, to $31.6 million in 2001, from $32.7 million in 2000, which increased $0.6 million, or 1.9%, from $32.1 million for 1999. As a percentage of total revenues, general and administrative expenses decreased to 2.7% in 2001 from 2.9% in 2000, and 3.1% in 1999. The decrease in general and administrative expense reflected a decline in corporate payroll costs, which was primarily attributable to Regal Cinemas, Inc.'s restructuring of its operations in the course of its reorganization proceedings, including closing theatre locations and reductions in staffing. The reduction in general and administrative expenses as a percentage of total revenues was primarily due to lower corporate salary and wage expenses and the corresponding decrease in payroll related costs and an increase in total revenues.

EBITDA

EBITDA increased $35.2 million, or 19.4%, to $216.2 million in 2001, from $181.0 million for 2000, which decreased $17.1 million, or 8.6%, from $198.1 million for 1999. EBITDA as a percentage of total revenues increased in 2001 to 18.5% from 16.0% in 2000, which decreased from 19.1% in 1999.

Operating Loss

Operating loss decreased $102.4 million, or 93.1%, to $7.6 million in 2001, from $110.0 million for 2000, which increased $107.6 million from $2.4 million for 1999. Operating loss as a percentage of total revenues decreased in 2001 to 0.7% from 9.7% in 2000, which increased from 0.2% in 1999.

RESULTS OF OPERATIONS—UNITED ARTISTS

Because of United Artists' adoption of fresh start reporting on March 2, 2001, United Artists' historical financial statements do not necessarily reflect its ongoing operations. In order to provide a meaningful basis of comparing United Artists' year over year operating results for purposes of the following tables and discussion, the operating results of United Artists for the forty-four weeks ended January 3, 2002 have been combined with the operating results of United Artists for the nine weeks ended March 1, 2001. The combined periods are herein referred to as combined United Artists fiscal 2001. The combined United Artists fiscal 2001 results are compared to the fiscal year ended December 28, 2000. Depreciation, amortization and other line items included in the operating results of United Artists are not comparable between periods as the nine weeks ended March 1, 2001 and the fiscal years ended December 28, 2000 and December 30, 1999 do not include the effect of fresh-start reporting adjustments. The combining of reorganized and predecessor periods is not acceptable under accounting principles generally accepted in the United States. This combined financial data should not be viewed as a substitute for United Artists' results of operations determined in accordance with generally accepted accounting principles. In addition, the following financial data does not purport to be indicative of future results of operations.

The following table sets forth for the fiscal periods indicated the percentage of total revenues represented by the specified items included in United Artists' statements of operations:

			Combined United Artists
			Fiscal Year Ended		Fiscal Year Ended
			January 3, 2002		December 28, 2000		December 30, 1999
Revenues:
	Admissions		68.6	%	67.7	%	68.6	%
	Concessions		27.5		28.1		27.6
	Other operating revenues		3.9		4.2		3.8

		Total revenues	100.0		100.0		100.0
Direct theatre costs:
	Film rental and advertising costs		37.8		37.2		38.6
	Cost of concessions		3.1		3.3		3.6
	Theatre operating expenses		41.1		44.4		44.5
	General and administrative		3.5		3.9		3.6
		Sub-total	85.5		88.8		90.3
	Depreciation and amortization		7.5		8.1		8.5
	Asset impairments, lease exit and restructure costs		0.7		10.0		9.7
	Gain on disposition of assets, net		(1.2	)	(2.6	)	(0.7	)

		Total operating expenses	92.5		104.3		107.8

	Operating income (loss)		7.5	%	(4.3	)%	(7.8	)%

Fiscal Years Ended January 3, 2002, December 28, 2000 and December 30, 1999

Total Revenues

The following table summarizes revenues and revenue-related data for the fiscal 2001, 2000 and 1999 (in millions, except averages):

		Combined United Artists
		Fiscal Year Ended		Fiscal Year Ended
		January 3, 2002		December 28, 2000		December 30, 1999
Admissions		$	391.3	$	372.4	$	433.1
Concessions			157.0		154.6		174.4
Other operating revenues			22.4		23.3		23.9

	Total revenues	$	570.7	$	550.3	$	631.4

Attendance			66.7		66.7		80.9
Average ticket price		$	5.87	$	5.58	$	5.35
Average concessions per patron			2.35		2.32		2.15

Admissions. Total admissions revenues increased $18.9 million, or 5.1%, to $391.3 million, for the year ended January 3, 2002 from $372.4 million for the year ended December 28, 2000, which decreased $60.7 million, or 14.0% from $433.1 million for the year ended December 30, 1999. The increase in admissions revenues in 2001 was primarily attributable to a 5.0% increase in average ticket prices. The decrease in admissions revenues in 2000 was primarily attributable to a 17.6% decrease in attendance, partially offset by a 4.5% increase in average ticket price.

Concessions. Total concessions revenues increased $2.4 million, or 1.6%, to $157.0 million in 2002, from $154.6 million for 2000, which decreased $19.8 million, or 11.4%, from $174.4 million for 1999. The increase in concessions revenues in 2001 was primarily due to an increase in average concessions per patron. The decrease in concessions revenues in 2000 was primarily due to lower attendance, partially offset by increased average concessions per patron.

Other Operating Revenues. Total other operating revenues decreased $0.9 million, or 3.9%, to $22.4 million in 2001, from $23.3 million for 2000, which decreased $0.6 million, or 2.5%, from $23.9 million for 1999. The decreases in other operating revenues in 2001 and 2000 were primarily due to the closure of under-performing theatres, the general downturn in the advertising market during 2001 and customers' reluctance to book The Satellite Theatre Network® events during United Artists' bankruptcy proceedings.

Direct Theatre Costs

The following table summarizes direct theatre costs for fiscal 2001, 2000 and 1999 (in millions):

	Combined United Artists
	Fiscal Year Ended				Fiscal Year Ended
	January 3, 2002				December 28, 2000				December 30, 1999
	$		% of Revenues		$		% of Revenues		$		% of Revenues
Film rental and advertising costs (1)	$	215.5	55.1	%	$	204.9	55.0	%	$	244.0	56.3	%
Cost of concessions (2)		17.9	11.4	%		18.0	11.6	%		22.7	13.0	%
Other theatre operating expenses (3)		234.8	41.1	%		244.4	44.4	%		280.8	44.5	%

Total direct theatre costs (3)	$	468.2	82.0	%	$	467.3	84.9	%	$	547.5	86.7	%

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

Film Rental and Advertising Costs. Film rental and advertising costs increased $10.6 million, or 5.2%, to $215.5 million in 2001, from $204.9 million for 2000, which decreased $39.1 million, or 16.0%, from $244.0 million for 1999. During 2001, a slight increase from 2000 in film rental costs as a percentage of admissions revenue was nearly offset by a decrease in advertising costs as a percentage of admissions revenue, thus resulting in film rental and advertising costs as a percentage of admission revenue increasing by 0.1%. The decrease in film rental and advertising costs as a percentage of admissions revenue during 2000 from 56.3% during 1999 was primarily attributable to the higher than average film terms associated with certain films released in 1999, as well as a decrease in advertising costs as a percentage of admissions revenue during 2000.

Cost of Concessions. Cost of concessions decreased $0.1 million, or 0.6%, to $17.9 million in 2001, from $18.0 million for 2000, which decreased $4.7 million, or 20.7%, from $22.7 million for 1999. Cost of concessions as a percentage of concessions revenues decreased to 11.4% in 2001 as compared to 11.7% in 2000, which decreased from 13.0% in 1999. The decreases in concession costs as a percentage of concessions revenue are primarily due to purchasing cost reductions, reduced concession promotional costs and increased rebates from certain concession vendors.

Other Theatre Operating Expenses. Other theatre operating expenses decreased $9.6 million, or 3.9%, to $234.8 million in 2001 from $244.4 million for 2000, which decreased $36.4 million, or 13.0%, from $280.8 million for 1999. Other theatre operating expenses as a percentage of total revenues decreased to 41.1% in 2001 from 44.4% during 2000, which decreased from 44.5% during 1999. The decreases in other theatre operating expenses are primarily due to the sale, closure or rejection of under-performing theatres and a reduction in other controllable costs.

General and Administrative Expenses

General and administrative expenses decreased $1.3 million, or 6.1%, to $20.0 million in 2001, from $21.3 million for 2000, which decreased $1.3 million, or 5.8%, from $22.6 million for 1999. As a percentage of total revenues, general and administrative expenses decreased to 3.5% in 2001 from 3.9% in 2000 and 3.6% in 1999. The decrease in general and administrative expenses during 2001 is primarily due to the elimination of four district offices, a reduction in the number of corporate personnel, and

other expense efficiency measures. The increase in 2000 was primarily due to employee retention payments incurred during 2000.

EBITDA

EBITDA increased $20.8 million, or 33.7%, to $82.5 million in 2001, from $61.7 million for 2000, which increased $0.4 million, or 0.7%, from $61.3 million for 1999. EBITDA as a percentage of total revenues increased in 2001 to 14.5% from 11.2% in 2000, which increased from 9.7% in 1999.

Operating Income (Loss)

Operating income increased by $66.6 million to $42.8 million in 2001, from a loss of $23.8 million for 2000. The 2000 loss decreased $25.5 million, or 51.7%, from a loss of $49.3 million for 1999. Operating income as a percentage of total revenues was 7.5% in 2001. Operating loss as a percentage of total revenues was 4.3% in 2000, which decreased from 7.8% in 1999.

REGAL ENTERTAINMENT GROUP

New Accounting Pronouncements

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

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

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 establishes accounting standards for recognition and measurement of the fair value of obligations associated with the retirement of long-lived assets when there is a legal obligation to incur such costs. Under SFAS No. 143, the costs of retiring an asset will be recorded as a liability when the retirement obligation arises and will be amortized to expense over the life of the asset. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. We are evaluating the impact of the adoption of

this standard and have not yet determined the effect of adoption on our financial position and results of operations.

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

SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001, and early application is encouraged. We are evaluating the impact of the adoption of SFAS No. 144 and have not yet determined the effect of adoption on our financial position and results of operations.

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

Seasonality

Our 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 season. 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 our results of operations, and the results of one quarter are not necessarily indicative of 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.

Qualitative and Quantitative Disclosures About Market Risk

Our market risk is confined to interest rate exposure of our debt obligations that bear interest based on floating rates. Our credit facilities provide for variable rate interest that could be adversely affected by an increase in interest rates. Pro forma for the combination of Regal Cinemas, United Artists and Edwards Theatres, their reorganizations and this offering and the use of proceeds therefrom, as of December 27, 2001 we had borrowings subject to variable interest rates of $270.0 million under our credit facilities. A one-half percent rise in the interest rate on our variable rate indebtedness held at December 27, 2001 would increase our interest expense by approximately $1.4 million.

Inflation

We do not believe that inflation has had a material impact on our financial position or results of operations.

BUSINESS

Our Business

We are a leading motion picture exhibitor operating the largest theatre circuit in the United States. Our nationwide theatre circuit, comprising Regal Cinemas, United Artists and Edwards Theatres, operates 5,886 screens in 561 theatres in 36 states. We operate approximately 17% of all screens in the United States, nearly twice as many screens as our nearest competitor. Our geographically diverse circuit includes theatres in 9 of the top 10 and 41 of the top 50 U.S. demographic market areas as well as prime locations in growing suburban markets. We believe that the size, reach and quality of our theatre circuit provide an exceptional platform to realize economies of scale in our theatre operations and capitalize upon high-margin ancillary revenue opportunities.

We have a stable, recurring and geographically diverse revenue base and high operating margins. On a pro forma basis for fiscal 2001, we generated total revenues, EBITDA and EBITDA margin of $2.0 billion, $358.0 million and 17.7%. Our strong cash flow from operations combined with our limited need to make maintenance capital expenditures and conservative capital structure provide us with significant flexibility to capitalize on future growth opportunities.

Our Industry

Overview. The domestic motion picture exhibition industry has historically maintained steady growth in revenues and attendance. Since 1965, total box office revenues have grown at a compound annual growth rate of approximately 6% and annual attendance has grown to approximately 1.5 billion attendees. The industry has been relatively unaffected by downturns in the economic cycle, with total box office revenues and attendance growing in three of the last five recessions. In 2001, total box office revenues increased for the tenth consecutive year rising approximately 10% to $8.4 billion, and attendance grew approximately 5% to 1.5 billion attendees.

Recent History. During the past few years, the domestic motion picture exhibition industry underwent a period of extraordinary new theatre construction and re-screening of older theatres. From 1996 to 1999, the number of screens increased at a compound annual growth rate of approximately 8%, which was more than double the industry's screen growth rate of approximately 3.5% from 1965 to 1995. The aggressive building strategies undertaken by exhibitors resulted in intensified competition in once stable markets and rendered many older theatres obsolete more rapidly than anticipated. This effect, together with the fact that many older theatres were under long-term, non-cancelable leases, created an oversupply of screens, which caused both attendance per screen and revenue per screen to decline. Most major exhibitors used extensive debt financing to fund their expansion efforts and experienced significant financial challenges in 1999 and 2000.

In 2000 and 2001, substantially all of the major exhibitors of motion pictures reduced their expansion plans and implemented screen rationalization plans to close under-performing theatres. During this period, the number of screens declined by approximately 1,800. This screen count rationalization has benefited exhibitors as patrons of closed theatres have migrated to remaining theatres, thereby increasing industry-wide attendance per screen and operating efficiencies.

The recent industry expansion was primarily driven by major exhibitors upgrading their asset bases to an attractive megaplex format that typically included 10 or more screens per theatre and adding enhanced features such as stadium seating, improved projection quality and superior sound systems. From 1996 to 1999, the five largest motion picture exhibitors spent over $4.1 billion on capital expenditures to expand and upgrade their theatre circuits. As a result of the extensive capital investment over the last several years, we believe the capital expenditures needed to maintain these modern theatres will be modest.

We believe that another evolution of theatre formats beyond the current megaplex is unlikely to occur in the foreseeable future. We believe theatres larger than the current 10 to 18 screen megaplex are not able to generate attractive returns in most locations because of the substantial market suitability requirements to generate a level of profitability similar to the current megaplex format. In addition, for the foreseeable future we do not believe that additional major amenities will be required to meaningfully enhance the moviegoing experience. Consequently, we believe major exhibitors have reduced capital spending and the rate of new screen growth substantially.

Current Industry Trends. We believe that the U.S. motion picture exhibition industry will benefit from the following trends:

Increased Marketing of New Releases by Studios. Movie studios have increased marketing expenditures per new film at a compound annual growth rate of approximately 10% since 1995. Because domestic movie theatres are the primary distribution channel for domestic film releases, the theatrical success of a film is often the most important factor in establishing its value in other film distribution channels, including home video, cable television, broadcast television and international releases. We believe that movie studios have placed an increased emphasis on theatrical success because these secondary distribution channels represent important and growing sources of additional revenues.

Affordable and Increasingly Attractive Form of Entertainment. We believe that patrons are attending movies more frequently because of convenience, affordability and attractive pricing compared to other forms of out-of-home entertainment. The average price per patron continues to compare favorably to alternatives such as concerts and sporting events. Since 1991, average movie ticket prices have increased at a compound annual growth rate of only 3%, while ticket prices for professional sporting events and concerts have increased at approximately three times that rate. Over the same time period, per capita movie attendance has grown from 4.5 to 5.3 times per year.

Ongoing Screen Rationalization. In 2000 and 2001, substantially all of the major motion picture exhibitors reduced their expansion plans and implemented screen rationalization programs to close under-performing theatres. This screen count rationalization benefits exhibitors as patrons of closed theatres migrate to remaining theatres, thereby increasing industry-wide attendance per screen and operating efficiencies.

Model Facilities Lower Future Capital Requirements. We believe that the modern, 10 to 18 screen megaplex is the appropriate facility for most markets. Over the last several years, major exhibitors spent substantial capital upgrading their asset bases, including the development of the megaplex format and introducing enhanced amenities such as stadium seating and digital sound. Given the substantial capital spent on theatre circuit expansion and facilities upgrades, we believe that major exhibitors have reduced their capital spending for new theatre construction or further upgrades.

Increasing Appeal of a Diversity of Films. Box office revenues are increasingly diversified among a number of strong movies rather than concentrated on a few major "hits." Box office revenues from the top 10 grossing movies as a percentage of annual total box office revenues have declined from an average of 29% during 1990 through 1992 to an average of 25% during 1998 through 2000. This increased appeal in a breadth of films benefits exhibitors by expanding the demographic base of moviegoers and generating greater attendance at a wider variety of movies as opposed to attracting to patrons to only a few major releases.

Extension of Movie Release Calendar Reduces Seasonality. Distributors have increasingly staggered new releases over more weekends as opposed to opening multiple movies on the same weekend or saving major releases for only a few holiday weekends. This trend has reduced the seasonality of box

office revenues by spreading attendance over an extended period of time, which we believe benefits exhibitors by increasing admissions and concessions revenues.

Competitive Strengths

We believe that the following competitive strengths position us well for future growth:

Industry Leader. We are the largest domestic motion picture exhibitor with nearly twice as many screens as our nearest competitor. We operate 5,886 screens in 561 theatres in 36 states across the nation. We believe that the quality and size of our theatre circuit is a significant competitive advantage for negotiating attractive concession contracts and generating economies of scale. We believe that our market leadership positions us to capitalize on favorable attendance trends, attractive consolidation opportunities and high-margin ancillary businesses. In addition, we also believe that our market leadership, brand names and the size, scope and quality of our asset base improve our access to prime real estate sites and enable us to negotiate favorable lease terms.

Superior Management Drives Higher Operating Margins. We have developed a proven operating philosophy focused on efficient operations and strict cost controls at both the corporate and theatre levels. At the corporate level, we are able to leverage our size and operational expertise to achieve economies of scale in purchasing and marketing functions. We have developed a highly efficient purchasing and distribution supply chain that generates favorable concession margins. At the theatre level, we devote significant attention to cost controls through the use of detailed management reports and performance-based compensation programs to encourage theatre managers to practice effective cost control. On a pro forma basis for fiscal 2001, we generated EBITDA margin of 17.7% and EBITDA per screen of approximately $60,800.

Healthy Balance Sheet and Strong Cash Flow Generation. We believe that we have one of the most conservative capital structures among reporting exhibitors of motion pictures. Pro forma as adjusted as of December 27, 2001, we had a ratio of pro forma net debt to EBITDA of 2.0 to 1. Regal Cinemas, Inc., United Artists and Edwards Theatres have invested approximately $1.8 billion in capital expenditures since 1997 to expand and upgrade their theatre circuits. As a result, we do not expect to require major capital reinvestments to maintain our operations. By combining our conservative capital structure with our high operating margins and low maintenance capital expenditures, we believe that we will generate significant cash flow to take advantage of future growth opportunities.

Proven Acquisition and Integration Strategy. We have significant experience identifying, completing and integrating acquisitions of theatre circuits. We have demonstrated our ability to enhance revenues and realize operating efficiencies through the successful acquisition and integration of 11 theatre circuits since 1995. We have generally achieved immediate cost savings at acquired theatres and improved their profitability through the application of our consolidated operating functions and key supplier contracts.

Reorganizations Formed a Stronger Circuit with More Flexibility. Our theatre operations have recently completed reorganizations that have enabled us to improve our asset base and profitability. The quality of our enhanced asset base enables us to benefit from a stable, recurring and geographically diversified mix of revenues and cash flows. As part of the reorganization, our management team conducted extensive reviews of our theatre portfolio. On a combined basis, we have closed 279 under-performing theatres representing 1,836 screens since January 2000. We have renegotiated leases at over 98 of our continuing theatres to obtain rent reductions, lease termination rights or shortened lease terms. By selectively closing under-performing locations and negotiating rent reductions and lease termination rights, we have enhanced our operational flexibility and created competitive advantages over major theatre operators who have not entered or completed a bankruptcy reorganization process.

Quality Theatre Portfolio. Regal Cinemas, Inc., United Artists and Edwards Theatres have invested approximately $1.8 billion in capital expenditures since 1997. As a result, we believe that we operate one of the most modern theatre circuits among major exhibitors of motion pictures. Approximately 60% of our screens are located in theatres featuring stadium seating and digital sound. Approximately 75% of our screens are located in theatres with 10 or more screens. Our theatres have an average of 10.5 screens per location, which is well above an average of 5.5 screens per location for the North American motion picture exhibition industry.

Leading Access to First-Run Films. Approximately 80% of our screens are located in film licensing zones in which we are the sole exhibitor. Being the sole exhibitor in a film licensing zone provides us with access to all films distributed by major distributors and eliminates our need to compete with other exhibitors for films in that zone. As the sole exhibitor in a particular zone, we can exhibit all commercially successful films on our screens, subject to a successful negotiation with the distributor, and have the ability to compete for attendance generated from commercially popular films.

Distinctive Opportunity in Ancillary Revenues. We believe we are in a distinct position among exhibitors as the largest and most geographically diverse theatre circuit in the nation with over 240 million annual attendees and a nationwide presence that includes 9 of the top 10 and 23 of the top 25 U.S. demographic market areas. We believe that our asset base provides an attractive platform for advertisers to reach a desirable customer base and for businesses to use for corporate communications, conferencing, product introductions and distance learning. We believe we will be able to generate revenues from digital advertising and by providing corporate communications services. We have a subsidiary, Regal CineMedia, which focuses exclusively on leveraging our theatre assets to increase our revenues from these high-margin complementary lines of business. Regal CineMedia is in its formative stages and has not generated revenue or incurred significant operating expenses.

Business Strategy

Our business strategy is to continue to enhance our leading position in the motion picture exhibition industry. Key elements of our strategy include:

Enhancing Operating Efficiencies. We intend to continue to generate operating margins that are among the highest in the industry by continuously attempting to improve our operating efficiency. We believe that significant opportunities exist for us to generate economies of scale from the combination of Regal Cinemas, United Artists and Edwards Theatres and we expect to benefit from merger synergies from the combined operations. We expect to enhance our operating results through the application of best practices from across the combined company.

Pursuing Strategic Acquisitions. We believe that our acquisition experience and the financial flexibility provided by our conservative capital structure position us well to execute future acquisitions. We may selectively pursue theatre acquisitions that enhance our market position and asset base and improve our consolidated operating results. In addition, we may pursue acquisitions that strengthen our ancillary business by broadening our service offerings.

Creating a Digital Network to Generate Ancillary Revenues. We intend to generate additional revenue growth by investing in the equipment necessary to create the largest digital video and communications network among domestic theatre operators for the provision of on screen and in-lobby advertising. We believe the capabilities and reach of the digital network will enhance our advertising and promotions business by providing a more efficient purchasing process for advertisers and streamlining the delivery of advertising, allowing for more targeted marketing and providing improved projection and sound capabilities. The digital network will also enable us to leverage our assets more efficiently during non-peak periods from the rental of auditoriums on a single site and networked basis for seminars, business conferencing, distance learning and other business meetings.

Pursuing Selective Growth Opportunities. We intend to selectively pursue theatre and screen expansion opportunities that meet our strategic and financial return criteria. We also intend to enhance our operations by selectively expanding and upgrading existing properties with prime locations. We are combining the capital spending programs of Regal Cinemas, United Artists and Edwards Theatres under one management team to maximize our return on investment by enabling us to make strategic capital expenditures that we believe will provide the highest returns among our theatre portfolio. We have commitments to build three new theatres representing an aggregate of 44 screens and, in 2002, expect to add 15 new screens to existing theatres.

Theatre Circuit

We operate the largest theatre circuit in the United States with 5,886 screens in 561 theatres in 36 states. We operate theatres in 9 of the top 10 and 41 of the top 50 U.S. demographic market areas. We target prime locations with excellent access to large, high patron-traffic areas.

We primarily operate multiscreen theatres. Our multiscreen theatre complexes typically contain 10 to 18 screens with auditoriums ranging from 100 to 500 seats each. As a result, our theatres appeal to a diverse group of patrons because we offer a wide selection of films and convenient show times. In addition, many of our theatres feature modern amenities such as wall-to-wall screens, digital stereo surround-sound, multi-station concessions stands, computerized ticketing systems, plush stadium seating with cup holders and retractable armrests, neon-enhanced interiors and exteriors and video game areas adjacent to the theatre lobby.

Our modern, multiscreen theatres are designed to increase profitability by optimizing revenues per square foot and reducing the cost per square foot of operation. We vary auditorium seating capacities within the same theatre, allowing us to exhibit films on a more cost effective basis for a longer period of time by shifting films to smaller auditoriums to meet changing attendance levels. In addition, we realize significant operating efficiencies of having common box office, concessions, projection, lobby and restroom facilities, which enables us to spread some of our costs, such as payroll, advertising and rent, over a higher revenue base. We stagger movie show times to reduce staffing requirements and lobby congestion and to provide more desirable parking and traffic flow patterns. In addition, we believe that operating a theatre circuit consisting primarily of modern theatres enhances our ability to attract patrons.

The following table details our theatre circuit by state as of December 27, 2001:

	Number of Screens					Number of Screens
State	Regal Cinemas	United Artists	Edwards Theatres	Total	State	Regal Cinemas	United Artists	Edwards Theatres	Total
California	204	199	554	957	South Carolina	89	7	—	96
Florida	638	135	—	773	Louisiana	9	74	—	83
New York	140	219	—	359	Maryland	27	41	—	68
Texas	143	161	47	351	Illinois	67	—	—	67
Washington	339	—	—	339	Minnesota	36	28	—	64
Pennsylvania	173	129	—	302	Idaho	14	—	49	63
Ohio	300	—	—	300	New Mexico	—	57	—	57
Virginia	258	29	—	287	Alaska	43	—	—	43
Georgia	236	36	—	272	Michigan	8	33	—	41
Oregon	212	—	—	212	Arkansas	16	21	—	37
New Jersey	107	53	—	160	Delaware	33	—	—	33
Tennessee	154	—	—	154	Oklahoma	26	—	—	26
North Carolina	61	60	—	121	Arizona	—	24	—	24
Alabama	118	—	—	118	Missouri	18	—	—	18
Nevada	84	26	—	110	Kentucky	16	—	—	16
Colorado	—	104	—	104	Wisconsin	16	—	—	16
Mississippi	—	103	—	103	West Virginia	12	—	—	12
Indiana	65	33	—	98	Connecticut	—	2	—	2

Theatre Operations

Our management closely monitors our operations. In connection with the combination of our three theatre circuits, we are implementing the best management practices across all of our theatres, including daily, weekly and monthly management reports generated for each individual theatre, as well as maintaining active communication between the theatres, divisional management and corporate management. We use these management reports and communications to closely monitor admissions and concessions revenues as well as accounting, payroll and workforce information necessary to manage our theatre operations effectively and efficiently.

We seek experienced theatre managers and require new theatre managers to complete a comprehensive training program. The program is designed to encompass all phases of theatre operations, including our operating philosophy, policies, procedures and standards. In addition, in some regions we have an incentive compensation program for theatre-level management that rewards theatre managers for controlling operating expenses while complying with our operating standards. We plan to implement this program in theatres that currently do not operate an active incentive compensation program for theatre managers.

In addition, we are implementing quality assurance programs in all of our theatres to maintain clean, comfortable and modern facilities. To maintain quality and consistency within our theatre circuit, district and regional managers regularly inspect each theatre. We also operate a "mystery shopper" program, which involves unannounced visits by unidentified customers who report on the quality of service, film presentation and cleanliness at individual theatres.

Regal CineMedia

Regal CineMedia focuses exclusively on the expansion of high-margin ancillary businesses, such as advertising, and the creation of new complementary business lines that leverage our existing asset and customer bases. We have committed resources and dedicated a management team with experience in these new business areas to focus exclusively on these opportunities and on emerging technologies such as digital advertising. We intend to invest in the equipment necessary to create the largest digital

network among U.S. theatre operators for the provision of advertising. While digital projection technologies required to display motion pictures in our theatres are not yet commercially viable, low-cost digital video and communications technology is available to expand the revenue generating capabilities and opportunities. We believe that this digital network will enable us to more effectively capitalize on ancillary revenue opportunities.

In-Theatre Advertising. We are the largest and most geographically diverse theatre circuit in the nation with over 240 million annual attendees. Our nationwide presence consists of locations in 9 of the top 10 and 41 of the top 50 U.S. demographic market areas as well as locations in suburban growth areas. We believe that our theatres provide an attractive platform for advertisers by allowing them to target a large and desirable customer base. We believe on-screen and in-lobby advertising allows advertisers to achieve high impact appeal due to the captive nature of the movie audience and the sound and projection capabilities of our theatres. On April 17, 2002, in connection with the exchange transaction, Regal CineMedia acquired the assets of Next Generation Network to use in implementing Regal CineMedia's business plan. We intend to modify and use the assets acquired through Next Generation Networks to distribute digital advertising content throughout our theatres and to other sites. The addition of digital video and communications technologies will further improve the quality of our slide advertising business and marketing and promotions business by replacing our slide projectors and streamlining the delivery of advertising and allowing for more targeted marketing. Our in-theatre advertising programs currently consist of rolling stock commercials, intermission slides, intermission music, lobby monitor advertising and entertainment, coupon distribution and customer sampling. We have strong business relationships with many national advertisers, such as the Coca-Cola Company, and with leading Internet ticket providers, Fandango and MovieFone. Advertising revenues generally generate high margins because they utilize our existing theatre assets and personnel.

The Satellite Theatre Network®. The Satellite Theatre Network® rents theatres on an individual or networked basis for seminars, corporate training, business meetings, distance learning or business communication uses, product and customer research and other entertainment uses. To provide broadcasting and teleconferencing services, we have created a network of theatres by installing digital video equipment within some of our theatres that are networked through a combination of satellite and telephonic communications. Our continued investment in digital video and communications equipment will allow for the expansion of our Satellite Theatre Network®. Theatre rentals allow us to utilize our assets more effectively during non-peak periods, such as weekday mornings.

Other Ancillary Business Opportunities. We believe that we will generate additional high-margin revenues in the future as we continue to expand our ancillary business activities. In addition, Regal CineMedia will work closely with our theatre operations group to leverage new technologies to create a more interactive relationship with patrons, to improve the marketing information we provide advertisers and thus improve the local marketing of motion pictures and provide a better overall movie-going experience for our customers.

Film Distribution

Domestic movie theatres are the primary initial distribution channel for domestic film releases. The theatrical success of a film is often the most important factor in establishing its value in other film distribution channels. Motion pictures are generally made available through several alternative distribution methods after the theatrical release date, including home video, cable television, broadcast television, international distribution and satellite and pay-per-view services. A strong opening run at the theatre can establish a film's success and substantiate the film's revenue potential for both domestic and international distribution channels. For example, the value of home video and pay cable distribution agreements frequently depends on the success of a film's theatrical release. Furthermore, studios' revenue-sharing percentage and ability to control the choice of distribution channels generally

declines as a film moves further from its theatrical release. As the primary distribution window for the public's evaluation of films, domestic theatrical distribution remains the cornerstone of a film's overall financial success.

The development of additional distribution channels has given motion picture producers the ability to generate a greater portion of a film's revenues through channels other than theatrical release. This increased revenue potential after a film's initial theatrical release has enabled major studios and some independent producers to increase the budgets for film production and advertising. The total cost of producing a film averaged approximately $47.7 million in 2001 compared with approximately $26.1 million in 1991, while the average cost to advertise and promote a film averaged approximately $31.0 million in 2001 compared with approximately $12.0 million in 1991.

Film Licensing

Evaluation of Film. We license films on a film-by-film and theatre-by-theatre basis by negotiating directly with film distributors. Prior to negotiating for a film license, we evaluate the prospects for upcoming films. Criteria we consider for each film include cast, director, plot, performance of similar films, estimated film rental costs and expected rating from the Motion Picture Association of America. Successful licensing depends greatly upon the exhibitor's knowledge of trends and historical film preferences of the residents in markets served by each theatre, as well as on the availability of commercially successful motion pictures.

Access to Film Product. Films are licensed from film distributors owned by major film production companies and from independent film distributors that generally distribute films for smaller production companies. Film distributors typically establish geographic film licensing zones and allocate each available film to one theatre within that zone. Film licensing zones generally encompass a radius of three to five miles in metropolitan and suburban markets, depending primarily upon population density.

In film licensing zones where we are the sole exhibitor, we obtain film licenses by selecting a film from among those films being offered and negotiating directly with the distributor. In zones where there is competition, a distributor will either allocate films among the exhibitors in the zone, or, on occasion, may require the exhibitors in the zone to bid for a film. When films are licensed under the allocation process, a distributor will select an exhibitor who then negotiates film rental terms directly with the distributor. We currently do not bid for films in any of our markets.

Film Rental Fees. Film licenses typically specify rental fees based on the higher of a gross receipts formula or a theatre admissions revenues formula. Under a gross receipts formula, the distributor receives a specified percentage of box office receipts, with the percentage declining over the term of the film run. Under a theatre admissions revenues formula, the distributor receives a specified percentage of the excess of admissions revenues over a negotiated allowance for theatre expenses. Although not specifically contemplated by the provisions of film licenses, rental fees actually paid by us are in some circumstances adjusted subsequent to exhibition in relation to the commercial success of a film in a process known as "settlement."

Duration of Film Licenses. The duration of our film licenses are negotiated with our distributors on a case-by-case basis. The terms of our license agreements depend on performance of each film. Marketable movies that are expected to have high box office admission revenues will generally have longer license terms than movies with more uncertain performance and popularity.

Relationship with Distributors. Many distributors provide quality first-run movies to the motion picture exhibition industry. However, according to industry reports, nine distributors accounted for approximately 93% of admissions revenues and 48 of the top 50 grossing films during 2000. No single distributor dominates the market. We license films from each of the major distributors and believe that our relationships with these distributors are good. From year to year, the revenues attributable to

individual distributors will vary widely depending upon the number and quality of films that each one distributes.

Concessions

In addition to box office admissions revenues, we generate revenues from concessions sales. We emphasize prominent and appealing concession stations designed for rapid and efficient service. We continually seek to increase concessions sales by optimizing product mix, introducing special promotions from time to time and training employees to cross-sell products. We have favorable concession supply contracts and have developed a highly efficient concession purchasing and distribution supply chain. Our management negotiates directly with manufacturers for many of our concession items to obtain competitive prices and to ensure adequate supplies.

Marketing and Advertising

Currently, film distributors organize and finance multimedia advertising campaigns for major film releases. To market our theatres, we utilize advertisements, including radio advertising, television commercials and movie schedules published in newspapers and over the Internet informing our patrons of film selections and show times. Newspaper advertisements are typically displayed in a single grouping for all of our theatres located in a newspaper's circulation area. In some of our markets we employ special marketing programs for specific films and concessions items.

In addition, we seek to develop patron loyalty through a number of marketing programs such as free summer children's film series, frequent moviegoer promotional programs, cross-promotion ticket redemptions and promotions within local communities. We currently offer these programs only in selected markets. We plan to use these programs in markets where we believe patron loyalty can be further enhanced, and we will continue to evaluate our markets on a case-by-case basis to determine the suitability of these programs in individual regions.

Management Information Systems

We have a significant commitment to our management information systems. In substantially all of our theatres, we have point-of-sale terminals and other management information systems installed. The point-of-sale terminals provide daily management reports that address all aspects of theatre operations, including concession sales, fraud detection and film booking. In addition, our systems provide us with payroll and workforce information that enable us to compare our actual to budgeted labor for each theatre and allow us to properly schedule and manage our hourly workforce. We plan to continue our commitment to developing our management information systems. We will continue to upgrade point-of-sale systems in theatres to optimize our management information systems. We believe that these systems enable us to monitor our theatre operations more closely and strengthen our ability to generate high margins.

Competition

The motion picture industry is highly competitive. Motion picture exhibitors generally compete on the basis of the following competitive factors:

•: ability to secure favorable licensing terms;
•: seating capacity, location and reputation of their theatres;
•: quality of projection and sound systems at their theatres; and
•: ability and willingness to promote the films they are showing.

Our competitors vary substantially in size, from small independent exhibitors to large national chains. As a result, our theatres are subject to varying degrees of competition in the regions in which

they operate. Our competitors, including newly established motion picture exhibitors, may build new theatres or screens in areas in which we operate, which may result in increased competition and excess capacity in those areas. If this occurs, it may have an adverse effect on our business and results of operations. As the largest motion picture exhibitor, however, we believe that we will be able to generate economies of scale and operating efficiencies that will give us a competitive advantage over many of our competitors.

We also compete with other motion picture distribution channels, including home video, cable television, broadcast television and satellite and pay-per-view services. Other new technologies (such as video on demand) could also have an adverse effect on our business and results of operations. In addition, we compete for the public's leisure time and disposable income with other forms of entertainment, including sporting events, concerts, live theatre and restaurants. In an effort to offset the competitive effects of these alternative distribution channels and forms of entertainment on our primary business, we are continuing to develop our ancillary revenues through our digital advertising and corporate communications services, and through our Regal CineMedia product offerings.

In addition to the motion picture industry, we also operate in other industries as a result of our ancillary business activities. These industries currently include advertising services and business communications services. Our advertising services compete with other forms of marketing media including television, radio and billboards, as well as advertising in shopping centers, airports, stadiums, supermarkets and public transportation, including taxis, trains and buses. While we believe that in-theatre advertising and promotions are becoming increasingly common, advertisers may choose alternative methods of conveying their messages. If this occurs, it may have an adverse effect on our ancillary business activities and may affect our results of operations.

Our auditorium rental and business communications services compete with other forms of large-scale venues including hotel conference centers, concert halls, other public meeting venues and in-house communications equipment. We believe that our combination of size, geographic distribution and advanced technology offer customers a unique and effective venue for events such as employee meetings and product demonstrations.

As discussed under "Business—Competitive Strengths," we believe that we have enhanced our operational flexibility and created competitive advantages over major theatre operators who have not entered or completed a bankruptcy reorganization process.

Seasonality

Our 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 season. The unexpected emergence of a hit film during other periods can alter the traditional trend. The timing of movie releases can have a significant effect on our results of operations, and the results of one quarter are not necessarily indicative of results for the next quarter 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.

Employees

As of December 27, 2001, we employed 23,815 persons, of whom 542 were corporate personnel and the remainder were theatre personnel. We consider our employee relations to be good.

Regulation

The distribution of motion pictures is in large part regulated by federal and state antitrust laws and has been the subject of numerous antitrust cases. Consent decrees effectively require major film

distributors to offer and license films to exhibitors, including us, on a film-by-film and theatre-by-theatre basis. Consequently, exhibitors cannot assure themselves of a supply of films by entering into long-term arrangements with major distributors, but must negotiate for licenses on a film-by-film and theatre-by-theatre basis.

Our theatres must comply with Title III of the Americans with Disabilities Act of 1990 (the "ADA") to the extent that such properties are "public accommodations" and/or "commercial facilities" as defined by the ADA. Compliance with the ADA requires that public accommodations "reasonably accommodate" individuals with disabilities and that new construction or alterations made to "commercial facilities" conform to accessibility guidelines unless "structurally impracticable" for new construction or technically infeasible for alterations. Non-compliance with the ADA could result in the imposition of injunctive relief, fines, an award of damages to private litigants and additional capital expenditures to remedy such non-compliance. United Artists and several of its subsidiaries are subject to a consent decree arising from a lawsuit captioned Connie Arnold et. al. v. United Artists Theatre Circuit, Inc. et. al. Plaintiffs alleged nationwide violations with the ADA for failure to remove barriers to access at existing theatres in a timely manner. In 1996, the parties involved in the case entered into a settlement agreement in which United Artists agreed to remove physical barriers to access at its theatres prior to July 2001. In January, 2001, the settlement agreement was amended to, among other things, extend the completion date for barrier removal to July 2006 and require minimum expenditures of $250,000 a year for barrier removal.

We believe that we are in substantial compliance with all current applicable regulations relating to accommodations for the disabled. We intend to comply with future regulations in this regard, and except as set forth above, we do not currently anticipate that compliance will require us to expend substantial funds. Our theatre operations are also subject to federal, state and local laws governing such matters as wages, working conditions, citizenship and health and sanitation requirements.

Properties

As of December 27, 2001, we operated 465 of our theatres pursuant to lease agreements and owned the land and buildings for 96 theatres. Of the 561 theatres operated by us as of December 27, 2001, 202 were acquired as existing theatres and 359 have been developed by us. The majority of our leased theatres are subject to lease agreements with original terms of 20 years or more and, in most cases, renewal options for up to an additional 10 years. These leases provide for minimum annual rentals and the renewal options generally provide for rent increases. Some leases require, under specified conditions, further rental payments based on a percentage of revenues above specified amounts. A significant majority of the leases are net leases, which require us to pay the cost of insurance, taxes and a portion of the lessor's operating costs. Regal Cinemas' corporate office is located in approximately 96,450 square feet of space in Knoxville, Tennessee. Our and United Artists' corporate office is located in approximately 47,500 square feet of space in Centennial, Colorado. We believe that these facilities are adequate for our operations.

Legal Proceedings

General. We are presently involved in various legal proceedings arising in the ordinary course of our business operations, including personal injury claims, employment matters and contractual disputes.

Bankruptcy Related Litigation. On January 31, 2001, PLC Commercial, LLC filed a claim against Edwards Theatres that arose from purported joint venture agreements to acquire, develop and construct at least five entertainment centers in key cities in North America. One center was completed in Houston, Texas and a site for a second center was selected in Raleigh, North Carolina. PLC, however, failed to commence and complete construction of that center. On August 23, 2000, Edwards Theatres filed for bankruptcy and later rejected all of the purported joint venture agreements, as well as Edwards Theatres' agreement to lease the theatre in Raleigh, North Carolina. PLC Commercial is

claiming breach of lease, breach of joint venture, breach of fiduciary duty, intentional and negligent misrepresentation, concealment and rescission and is seeking approximately $46.2 million in damages. Edwards Theatres has filed a motion for summary judgment on the first claim and intends to file additional motions for summary judgment on the remaining claims. Unless Edwards Theatres prevails on its summary judgment motions, the case is expected to proceed to trial. The case is currently pending in the U.S. Bankruptcy Court for the Central District of California. Edwards Theatres intends to vigorously defend these claims.

Edwards Theatres is also defending three different claims from Imax Corporation. On August 1, 2001, Imax filed a proof of claim against Edwards Theatres in the U.S. Bankruptcy Court for the Central District of California for alleged damages arising from Edwards Theatres' rejection of the IMAX system lease agreements entered into by Edwards Theatres and Imax. Imax's proof of claim alleges damages in a total amount of approximately $28.9 million. Imax also filed an adversary proceeding against Edwards Theatres on August 3, 2001, alleging unfair competition, false advertising and intellectual property violation. Imax is seeking treble damages in an unspecified amount and an award of costs and attorneys' fees. Edwards Theatres intends to vigorously defend these claims.

United Artists Reorganization. On September 5, 2000, United Artists and the majority of United Artists' subsidiaries, including United Artists Theatre Circuit, Inc. and the majority of its subsidiaries, all as debtors, filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware, as well as a joint plan of reorganization. Under the terms of the plan, Anschutz agreed to convert approximately $91.8 million of its pre-petition secured claims into shares of common stock and Series A Convertible Preferred Stock of United Artists, constituting approximately 20% and 100% of the outstanding shares common stock and Series A Convertible Preferred Stock, respectively.

In conjunction with the reorganization, United Artists' bank credit facility, as it existed before the petition date, was replaced by a Restructured Term Credit Facility of approximately $252.1 million, and an additional $35.0 million Revolving Credit Facility was secured. The plan provided that all claims would be paid in full, except general unsecured claims, specified equity interests and a claim of United Artists against United Artists Theatre Circuit arising from an intercompany note. A portion of all general unsecured claims other than those relating to United Artists were paid. General unsecured claims and equity interests relating to United Artists, equity interests relating United Artists Theatre Circuit and the intercompany note claim received no payment. On January 22, 2001, the joint plan of reorganization, as amended, was approved by the Court and declared effective by the debtors on March 2, 2001.

Edwards Theatres Reorganization. On August 23, 2000, Edwards Theatre Circuit, Inc. and affiliates filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Central District of California. Pursuant to these filings, Anschutz and Oaktree's Principal Activities Group agreed to exchange specified amounts of their pre-petition secured claims of approximately $14.6 million and cash of $41.4 million for $56.0 million in Edwards Theatres' Series A Preferred Stock and 51% of Edwards Theatres' newly-issued common stock.

Under Edwards Theatres' plan of reorganization, Anschutz and Oaktree's Principal Activities Group will contribute to Edwards Theatres $0.90 for each $1.00 of allowed general unsecured claims in excess of $55.0 million, up to $13.5 million. For each $900 contributed, Anschutz and Oaktree's Principal Activities Group will receive $1,044, up to a maximum of $15,663,333, from Ms. Carole Ann Ruoff and Ms. Joan Edwards Randolph, both former stockholders of Edwards Theatres, and from Edwards Affiliated Holdings, LLC, a company controlled by Mr. W. James Edwards, another former stockholder of Edwards Theatres. We will also acquire up to 331,451 shares of our Class A common stock from Edwards Affiliated Holdings, LLC, based on the dollar amount contributed by Anschutz and Oaktree's Principal Activities Group. Anschutz and Oaktree's Principal Activities Group will, in

turn, receive the same number of shares from us, and will also receive from Ms. Ruoff and Ms. Randolph an aggregate of up to $7,384,469 in cash, in each instance based on the amount contributed and allocated between Anschutz and Oaktree's Principal Activities Group in relation to their respective contributions.

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

The plan provided that Edwards Theatres' senior secured lenders would receive a principal pay-down of $8.5 million and all prepetition and post-petition accrued and unpaid interest at the applicable non-default rate. In connection with the plan, the existing secured lenders established a new $20.0 million secured revolving credit facility ranking pari passu with the existing senior term loan. General unsecured creditors were entitled to receive, at their option, either a cash distribution equal to 90% of the holder's allowed claim or an unsecured note equal to 100% of the allowed claim. The seven year notes provide for semi-annual interest payments, in arrears, beginning on the six-month anniversary of the effective date at a rate of 9% per annum, compounded annually. The notes also require semi-annual principal reduction payments beginning on the 6-month anniversary of the effective date.

On September 24, 2001, the plan of reorganization was confirmed.

Regal Cinemas, Inc. Reorganization. In October 2001, Regal Cinemas, Inc. filed a prepackaged plan of reorganization pursuant to which holders of its then existing senior credit facilities agreed to exchange approximately $725.0 million of their pre-petition claims for 100% of Regal Cinemas, Inc.'s newly-issued common stock. Other principal terms of the plan included:

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

Regal Cinemas emerged from bankruptcy on January 29, 2002.

MANAGEMENT

Directors and Executive Officers

Shown below are the names, ages and positions of our executive officers and directors as of March 8, 2002:

Name	Age	Position
Philip F. Anschutz	62	Non-executive Chairman of the board of directors
Michael L. Campbell	48	Vice Chairman of the board of directors and Co-Chief Executive Officer of Regal Entertainment Group, and Chief Executive Officer of Regal Cinemas
Kurt C. Hall	42	Vice Chairman of the board of directors and Co-Chief Executive Officer of Regal Entertainment Group, and President and Chief Executive Officer of Regal CineMedia
Thomas D. Bell, Jr.	52	Director
Michael F. Bennet	37	Director
Alfred C. Eckert III	54	Director
Stephen A. Kaplan	43	Director
Craig D. Slater	44	Director
Robert F. Starzel	61	Director
Gregory W. Dunn	42	Executive Vice President and Chief Operating Officer
Amy E. Miles	35	Executive Vice President, Chief Financial Officer and Treasurer
Peter B. Brandow	41	Executive Vice President, General Counsel and Secretary

Philip F. Anschutz is the non-executive Chairman of Regal's board of directors. Mr. Anschutz is not an officer of Regal and does not receive any remuneration from Regal for his services as non-executive Chairman. Mr. Anschutz has served as the Chairman of the board of directors of The Anschutz Corporation, which he founded in 1965, and Anschutz Company for more than the last five years. He has been a director and Chairman of the board of Qwest Communications International, Inc. since February 1997, and a director of Forest Oil Corporation since 1995. Mr. Anschutz was the Chairman of Southern Pacific Rail Corporation until it was acquired by Union Pacific Corporation in 1996, and has served as a director and Vice Chairman of Union Pacific thereafter.

Michael L. Campbell is Vice Chairman and Co-Chief Executive Officer of Regal and is Chief Executive Officer of Regal Cinemas Corporation. Mr. Campbell founded Regal Cinemas, Inc. in November 1989, and has served as President and Chief Executive Officer of Regal Cinemas, Inc. since its inception. Mr. Campbell served as a director and executive officer of Regal Cinemas, Inc. when it filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code and throughout the bankruptcy proceedings described in "Business—Legal Proceedings." Prior thereto, Mr. Campbell was the Chief Executive Officer of Premiere Cinemas Corporation, which he co-founded in 1982, and served in such capacity until Premiere was sold in October 1989. Mr. Campbell is a director of Fandango, Inc. and serves as Chairman of the National Association of Theatre Owners in addition to serving on its Executive Committee of the board of directors.

Kurt C. Hall is Vice Chairman and Co-Chief Executive Officer of Regal and is President and Chief Executive Officer of Regal CineMedia Corporation. Mr. Hall has served as President and Chief Executive Officer of United Artists Theatre Company since March 6, 1998, and a director since May 12, 1992. Mr. Hall served as a director and executive officer of United Artists when it filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code and throughout the bankruptcy proceedings described in "Business—Legal Proceedings." Prior thereto, Mr. Hall served as Chief Operating Officer since February 24, 1997, and as Executive Vice President since May 12, 1992.

Mr. Hall was Chief Financial Officer of United Artists Theatre Circuit from May 12, 1992 to March 5, 1998.

Gregory W. Dunn is Executive Vice President and Chief Operating Officer of Regal and President and Chief Operating Officer of Regal Cinemas Corporation and served as Executive Vice President and Chief Operating Officer of Regal Cinemas, Inc. from 1995 to March 2002. Mr. Dunn served as an executive officer of Regal Cinemas, Inc. when it filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code and throughout the bankruptcy proceedings described in "Business—Legal Proceedings." Mr. Dunn served as Vice President of Marketing and Concessions of Regal Cinemas, Inc. from 1991 to 1995.

Michael F. Bennet has been a Vice President of The Anschutz Investment Company since November 1997. Mr. Bennet served on the board of directors of United Artists Theatre Company since its emergence from bankruptcy on March 2, 2001. Before joining The Anschutz Investment Company, Mr. Bennet served as counsel to the Deputy Attorney General at the U.S. Department of Justice from September 1994 to October 1997. Prior thereto, Mr. Bennet practiced law at Wilmer, Cutler & Pickering in Washington, D.C.

Stephen A. Kaplan is a principal of Oaktree Capital Management, LLC. Since 1995 he has managed Oaktree's Principal Investment Activities Group that invests in controlling and minority positions in private and public companies. Prior to joining Oaktree Capital Management, LLC, Mr. Kaplan was a managing director of Trust Company of the West. Prior to his work with Trust Company of the West, Mr. Kaplan was a partner with the law firm Gibson, Dunn & Crutcher. Mr. Kaplan currently serves as a director of Forest Oil Corporation, General Maritime Corporation, Cherokee International, Inc. and CollaGenex Pharmaceuticals, Inc.

Craig D. Slater has served as President of The Anschutz Investment Company since 1997, and as Executive Vice President of Anschutz Company since April 1999 and The Anschutz Corporation since May 1999. Mr. Slater served as Vice President of Acquisitions and Investments of both The Anschutz Corporation and Anschutz Company from August 1995 until May and April 1999, respectively. He also served as Corporate Secretary of Anschutz Company and The Anschutz Corporation from September 1991 to October 1996. He currently serves on the boards of directors of Qwest Communications International, Inc., United Artists Theatre Company and Forest Oil Corporation.

Alfred C. Eckert III has been Chairman and Chief Executive Officer of GSC Partners, a private investment firm, since 1994. Mr. Eckert is also a director of Kensington Group (UK) and Moore Corporation Ltd. Mr. Eckert has been a director of McKesson since 1999, and was previously a director of HBO & Company.

Thomas D. Bell, Jr. is the President and Chief Executive Officer of Cousins Properties Incorporated. Mr. Bell has served as the Vice Chairman of the board of directors and Chairman of the Executive Committee of Cousins Properties since January 2001. Prior to joining Cousins Properties, Mr. Bell served as a senior advisor at Credit Suisse First Boston Corporation, overseeing real estate activities. Prior thereto, Mr. Bell spent ten years with Young & Rubican and retired as Chairman and Chief Executive Officer. Mr. Bell has served as a director of McLeod USA, which filed for bankruptcy on January 31, 2002, since August 2001. Mr. Bell was a director of McLeod USA throughout its bankruptcy proceedings. Mr. Bell is also a member of the boards of Lincoln Financial Group and the U.S. Chamber of Commerce.

Robert F. Starzel is the Senior Representative of the Chairman of the Union Pacific Corporation. Mr. Starzel served as Senior Vice President of Union Pacific Corporation from May 1998 to September 2000 and as Vice President of Union Pacific Railroad Company from September 1996 to April 1998. Mr. Starzel served as Vice Chairman of Rio Grande Industries from October 1998 to 1994 and Southern Pacific Rail Corporation from 1994 to September 1996.

Amy E. Miles is our Executive Vice President, Chief Financial Officer and Treasurer and has served as the Executive Vice President, Chief Financial Officer and Treasurer of Regal Cinemas, Inc. since January 2000. Ms. Miles served as an executive officer of Regal Cinemas, Inc. when it filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code and throughout the bankruptcy proceedings described in "Business—Legal Proceedings." Prior thereto, Ms. Miles was Senior Vice President of Finance from April 1999, when she joined Regal Cinemas, Inc. Ms. Miles was a Senior Manager with Deloitte & Touche from 1998 to 1999. From 1989 to 1998, she was with PriceWaterhouseCoopers, LLC.

Peter B. Brandow is our Executive Vice President, General Counsel and Secretary and has served as the Executive Vice President, General Counsel and Secretary of Regal Cinemas, Inc. since July 2001, and served as Senior Vice President, General Counsel and Secretary of Regal Cinemas, Inc. since February 2000. Mr. Brandow served as an executive officer of Regal Cinemas, Inc. when it filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code and throughout the bankruptcy proceedings described in "Business—Legal Proceedings." Prior thereto, Mr. Brandow was Vice President, General Counsel and Secretary from February 1999 when he joined Regal Cinemas, Inc. From September 1989 to January 1999, Mr. Brandow was an associate with the law firm Simpson Thatcher & Bartlett.

Board Composition

Our board of directors consists of nine directors classified into three classes consisting of three members each. Directors of each class are elected to serve three year terms and shall hold office until the next annual meeting of stockholders or until his or her successor is duly elected and qualified.

Board Committees

Our board of directors has established an audit committee and a compensation committee. The audit committee consists of Thomas D. Bell, Jr., Alfred C. Eckert III, and Robert F. Starzel. The audit committee will meet periodically with management and our independent accountants to review their work and confirm that they are properly discharging their respective responsibilities. The audit committee also is responsible for:

•: recommending the appointment of independent accountants to audit our financial statements and perform services related to the audit;
•: reviewing the scope and results of the audit with the independent accountants;
•: reviewing with management and the independent accountants our annual operating results;
•: considering the adequacy of the internal accounting control procedures; and
•: considering the independence of our accountants.

The compensation committee consists of Michael F. Bennet, Alfred C. Eckert III and Robert F. Starzel. The compensation committee is responsible for determining the salary and incentive compensation of our officers and providing recommendations for the salaries and incentive compensation of our other employees. The compensation committee also is responsible for administering our 2002 Stock Incentive Plan, including reviewing management recommendations with respect to option grants and taking other actions as may be required in connection with our compensation and incentive plans.

Compensation Committee Interlocks and Insider Participation

Please see "Related Party Transactions—Compensation Committee Interlocks and Insider Participation."

Director Compensation

We will reimburse our directors for reasonable out-of-pocket expenses related to attending board or committee meetings. We currently do not intend to pay cash compensation to directors for serving on our board of directors. We may grant non-employee directors non-qualified stock options to purchase shares of our Class A common stock on a yearly basis in an amount and with a vesting schedule to be determined by our board of directors.

Executive Compensation

We were founded in March 2002. Effective upon consummation of the combination of Regal Cinemas, United Artists and Edwards Theatres and for the balance of 2002, we anticipate that we will pay compensation based on the following annual salaries to our Co-Chief Executive Officers and to the three other individuals named below who are to be our executive officers and who we believe will be our three other most highly compensated executive officers in 2002.

			Long Term Compensation
Name and Principal Position	Annual Salary		Securities Underlying Options/SARs
Michael L. Campbell, Co-Chief Executive Officer and Chief Executive Officer of Regal Cinemas	$	589,100	1,908,840
Kurt C. Hall, Co-Chief Executive Officer and President and Chief Executive Officer of Regal CineMedia	$	589,100	620,918
Gregory W. Dunn, Executive Vice President and Chief Operating Officer	$	377,169	590,832
Amy E. Miles, Executive Vice President, Chief Financial Officer and Treasurer	$	310,500	590,832
Peter B. Brandow, Executive Vice President, General Counsel and Secretary	$	305,000	454,486

Under a severance plan maintained by Regal Cinemas, Inc. Mr. Brandow is entitled to severance payments in the event we terminate his employment without cause or if he terminates his employment with good reason prior to January 29, 2003. In either event, we would pay Mr. Brandow two times his base salary plus 1.5 times his target bonus.

For more specific information regarding the compensation to be paid to our executive officers following this offering, see "—Employment Agreements."

Employment Agreements

We have entered into employment agreements with Michael L. Campbell and Kurt C. Hall, pursuant to which Mr. Campbell will serve as one of our Co-Chief Executive Officers and as Chief Executive Officer of Regal Cinemas, and Mr. Hall will serve as our other Co-Chief Executive Officer and as President and Chief Executive Officer of Regal CineMedia. The term of the agreements is three years and provides for a base annual salary of $589,100 for each of Mr. Campbell and Mr. Hall, subject to subsequent annual adjustment. Each employee is also eligible to receive a cash bonus each year based on performance and attainment of earnings objectives set by our board of directors. Each employee's target bonus shall be at least 100% of his base annual salary and each employee's stretch bonus shall be at least 150% of his base annual salary. If we terminate either employee's employment without cause, such employee is entitled to severance payments equal to that of two times his base annual salary and health and life insurance benefits for 24 months from the date of the termination of his employment. Under those circumstances, each employee is also entitled to receive, pro-rated to the date of termination, any bonus he would have received for that year. If either employee terminates his

employment for good reason, he is entitled to receive, in addition to amounts payable if we were to have terminated his employment without cause, one times such employee's target bonus. Also, if we terminate employment, or if either employee resigns for good reason, within 3 months prior to, or one year after, a change of control of Regal, such employee is entitled to receive severance payments equal to: (i) the actual bonus, pro-rated to the date of termination, he would have received in respect of the fiscal year in which the termination occurs; and (ii) two and one-half times his annual base salary plus two times his target bonus, and health and life insurance benefits for 30 months. Each employee is also subject to a noncompete agreement under which he agrees not to compete with us or our theatre affiliates or solicit or hire certain of our employees during the term of his employment agreement and for one year thereafter.

In addition, in connection with its bankruptcy reorganization proceedings, Regal Cinemas, Inc. entered into an employment agreement with Mr. Campbell on substantially similar terms. The Regal Cinemas, Inc. agreement with Mr. Campbell also contained a transition period severance arrangement providing that, if Mr. Campbell resigns for good reason or is terminated without cause prior to January 29, 2003, he will be entitled to receive severance payments equal to: (i) the actual bonus, pro-rated to the date of termination, he would have received in respect of the fiscal year in which the termination occurs; and (ii) two and one-half times his annual base salary plus two times his target bonus. Except for the transition period severance arrangement, Mr. Campbell's employment agreement with Regal Cinemas, Inc. has been superseded by his employment agreement with Regal Entertainment Group. Any payment pursuant to the transition period severance arrangement would be reduced by any severance payments due under the Regal Entertainment employment agreement with Mr. Campbell.

We have entered into employment agreements with Amy E. Miles and Gregory W. Dunn, pursuant to which Ms. Miles will serve as our Chief Financial Officer and Mr. Dunn will serve as our Chief Operating Officer, and as President and Chief Operating Officer of Regal Cinemas. The term of the agreements is three years and the agreements provide for base annual salaries of $377,169 for Mr. Dunn and $310,500 for Ms. Miles subject to subsequent annual adjustment. Each employee is also eligible to receive a cash bonus each year based on performance and attainment of earnings objectives set by our board of directors. Each employee's target bonus shall be at least 75% of his or her base annual salary and each employee's stretch bonus shall be at least 100% of his or her base annual salary. If we terminate either employee's employment without cause, such employee is entitled to severance payments equal to that of two times his or her base annual salary and health and life insurance benefits for 24 months from the date of the termination of his or her employment. Under those circumstances, each employee is also entitled to receive, pro-rated to the date of termination, any bonus he or she would have received for that year. If either employee terminates his or her employment for good reason, he or she is entitled to receive, in addition to amounts payable if we were to have terminated his or her employment without cause, one times such employee's target bonus. Also, if we terminate employment, or if either employee resigns for good reason, within 3 months prior to, or one year after, a change of control of Regal, such employee is entitled to receive severance payments equal to: (i) the actual bonus, pro-rated to the date of termination, the executive would have received in the fiscal year in which the termination occurs, and (ii) two times the executive's annual salary plus one and one-half times the executive's target bonus, and health and life insurance benefits for 30 months. Each employee is also subject to a noncompete agreement under which he or she agrees not to compete with us or our theatre affiliates or solicit or hire certain of our employees during the term of his or her employment agreement and for one year thereafter.

In addition, in connection with its bankruptcy reorganization proceeding, Regal Cinemas, Inc. entered into employment agreements with Mr. Dunn and Ms. Miles on substantially similar terms. The Regal Cinemas, Inc. agreements with Mr. Dunn and Ms. Miles also contained a transition period severance arrangement providing that, if the executive resigns for good reason or is terminated without cause prior to January 29, 2003, the executive will be entitled to receive severance payments equal to: (i) the annual bonus, pro-rated to the date of termination, the executive would have received in the

fiscal year in which the termination occurs, and (ii) two times the executive's annual salary plus one and one half times the executive's target bonus. Except for the transition period severance arrangement, Mr. Dunn's and Ms. Miles' employment agreements with Regal Cinemas, Inc. have been superseded by their employment agreements with Regal Entertainment Group. Any payment pursuant to the transition severance arrangement would be reduced by the amount of any severance payments due under the Regal Entertainment employment agreements with Mr. Dunn and Ms. Miles.

2002 Stock Incentive Plan

The following is a summary description of our 2002 Stock Incentive Plan. Our board of directors and stockholders have approved the Stock Incentive Plan. You may refer to the exhibits that are part of the registration statement of which this prospectus is a part for a copy of the stock incentive plan.

Types of Awards. The stock option plan provides for grants of incentive stock options, which are intended to qualify for favorable federal tax treatment under Section 422 of the Internal Revenue Code of 1986, and nonqualified stock options, which do not so qualify. The stock incentive plan also provides for grants of restricted stock that are subject to restrictions and risks of forfeiture.

Shares Subject to the 2002 Stock Incentive Plan. As of March 8, 2002, the total number of shares of common stock authorized for issuance under our stock incentive plan was 11,194,354 shares. These shares may be authorized but unissued Class A common stock. If an option grant expires or for any reason is terminated or unexercised, the shares of Class A common stock relating to that grant again become available for issuance under the stock incentive plan. As of April 12, 2002, there were nonqualified stock options to purchase 8,832,147 shares outstanding and no incentive stock options outstanding.

Mergers and other Similar Transactions. In the event of a merger, consolidation, reorganization, stock dividend, stock split, or other similar change affecting our capital structure, we have the authority to make appropriate adjustments to the total number of shares available for issuance under the stock option plan, the number of shares that may be purchased and the exercise price applicable to outstanding stock options.

Eligibility. Grants may be made to any of our or any of our affiliates' employees, officers, directors, consultants or to any consultant, independent contractor or other person providing services to us or our affiliates, in each case as determined by our board of directors.

Administration. Our board of directors has delegated its duty to administer the stock incentive plan to our compensation committee.

Section 162(m). Section 162(m) of the Internal Revenue Code limits publicly-held companies to an annual deduction for federal income tax purposes of $1,000,000 for compensation paid to their chief executive officer and the four highest compensated executive officers (other than the chief executive officer) determined at the end of each year. However, performance-based compensation is excluded from this limitation. The stock incentive plan is designed to permit the compensation committee to grant awards that qualify as performance-based for purposes of satisfying the conditions of Section 162(m) at such time as the stock option plan becomes subject to Section 162(m).

Option Grants

There have been no grants of stock options to the named executive officers other than in connection with the combination of Regal Cinemas, United Artists and Edwards Theatres. See "Related Party Transactions—The Exchange Agreement."

RELATED PARTY TRANSACTIONS

The Exchange Agreement

On March 8, 2002, we entered into an Exchange Agreement with stockholders of Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia to acquire capital stock of Regal Cinemas, United Artists, Edwards Theatres and Regal CineMedia. The following table identifies our executive officers, directors and each stockholder beneficially owning five percent or more of either class of our outstanding common stock who received Class A common stock, Class B common stock or warrants or options to purchase Class A common stock or Class B common stock in connection with the exchange transaction. The value of the shares of Class A common stock and Class B common stock in the following table is based on the exchange transaction value of $11.06 per share and based upon the cash purchase price of Edwards Theatres shares purchased from Joan Edwards Randolph and Carole Ann Ruoff in negotiated arms length transactions at the time of the exchange transaction. The value of shares of Class A common stock underlying warrants and options is also based on the $11.06 per share price net of the respective exercise price. See "Principal Stockholders" for additional information about the beneficial ownership of shares of our common stock held by these holders.

			Shares of Class A Common Stock	Value of Shares of Class A Common Stock		Shares of Class A Common Stock Underlying Warrants and Options	Value of Shares of Class A Common Stock Underlying Warrants and Options		Shares of Class B Common Stock	Value of Shares of Class B Common Stock
REGAL CINEMAS
	Executive Officers and Directors
		Philip F. Anschutz (a)	—	$	—	—	$	—	45,579,192	$	504,105,864
		Michael L. Campbell	—		—	1,908,840		4,161,271	—		—
		Alfred C. Eckert III (b)	9,223,244		102,009,079	—		—	—		—
		Stephen A. Kaplan (c)	—		—	—		—	12,265,357		135,654,848
		Craig D. Slater (d)	630,583		6,974,247
		Gregory W. Dunn	—		—	590,832		1,288,014	—		—
		Amy E. Miles	—		—	590,832		1,288,014	—		—
		Peter B. Brandow	—		—	454,486		990,779	—		—
	Five Percent Stockholders
		Anschutz	—		—	—		—	45,579,192		504,105,864
		OCM Principal Opportunities Fund II, L.P.	—		—	—		—	12,265,357		135,654,848
		GSCP Recovery, Inc.	9,223,244		102,009,079	—		—	—		—
		LB I Group Inc.	5,638,333		62,359,963	—		—	—		—
		ACE II LLC	2,806,366		31,038,408	—		—	—		—
		Putnam Investment Management, LLC	4,046,175		44,750,696	—		—	—		—
UNITED ARTISTS
Executive Officers and Directors
		Philip F. Anschutz (a)	—	$	—	—	$	—	17,439,906	$	192,885,360
		Kurt C. Hall	—		—	620,918		1,353,601	—		—
		Craig D. Slater (d)	205,163		2,269,103	54,266		118,300
Five Percent Stockholders
		Anschutz	—		—	—		—	17,439,906		192,885,360
		ACE II LLC	1,032,678		11,421,419	241,863		527,261	—		—
EDWARDS THEATRES
Executive Officers and Directors
		Philip F. Anschutz (a)	—	$	—	—	$	—	6,668,091	$	73,749,086
		Stephen A. Kaplan (c)	—		—	—		—	1,786,963		19,763,811
		Craig D. Slater (d)	57,313		633,882
Five Percent Stockholders
		Anschutz	—		—	—		—	6,668,091		73,749,086
		ACE II LLC	410,568		4,540,882	—		—	—		—
		OCM Principal Opportunities Fund II, L.P.	—		—	—		—	1,786,963		19,763,811
		W. James Edwards III	1,743,732		19,285,676	—		—	—		—

REGAL CINEMEDIA
Executive Officers and Directors
	Philip F. Anschutz (a)	—	$	—	—	$	—	850,828	$	9,410,158
Five Percent Stockholders
	Anschutz	—		—	—		—	850,828		9,410,158
	ACE II LLC	46,859		518,261	—		—	—		—

(a): Includes shares received by Anschutz Investment Fund, LP.
(b): Includes shares received by GSCP Recovery, Inc. Mr. Eckert disclaims beneficial ownership in the shares held by GSCP Recovery, Inc. except to the extent of his pecuniary interest in such shares.
(c): Includes shares received by OCM Principal Opportunities Fund II, L.P. Mr. Kaplan disclaims beneficial ownership in the shares held by OCM Principal Opportunities Fund II, L.P. except to the extent of his pecuniary interest in such shares.
(d): Represents shares held by Juniper Family Investments, LLC, an entity formed for the benefit of Mr. Slater's family members. Mr. Slater disclaims beneficial ownership in the shares held by Juniper Family Investments, LLC and has no pecuniary interest in those shares.

In connection with the exchange transaction, Anschutz received warrants to purchase 3,928,185 shares of Class B common stock of Regal at a purchase price of $8.88 per share in exchange for its warrants to purchase United Artists stock. The purchase price will be proportionately reduced or increased, as the case may be, if the outstanding amount of Class B common stock is either divided into a greater number of shares (or a dividend is paid) or combined into a smaller number of shares. The warrants expire in March 2008.

Prior to the exchange transaction, Edwards Theatres issued 108,000 shares and 27,000 shares of its Class A common stock to Anschutz and Oaktree's Principal Activities Group, respectively, the holders of Edwards Theatres' Series A preferred stock, and an aggregate of 115,000 shares of its Class B common stock pro rata to W. James Edwards III, Carole Ann Ruoff and Joan Edwards Randolph, the holders of Edwards Theatres' Series B preferred stock in consideration for the elimination of voting rights on such preferred stock. These shares of Edwards Theatres' common stock were exchanged for our common stock in the exchange transaction described above.

Employment Agreements

We have entered into Employment Agreements with each of our executive officers. For the details of these agreements, please see "Management—Employment Agreements."

Reorganization Payments

In the reorganizations of Regal Cinemas, Inc., United Artists and Edwards Theatres, Anschutz and Oaktree's Principal Activities Group, as holders of pre-petition claims, received payments in cash and securities for their claims.

During the period from February 2000 to April 2000, in a series of arm's-length transactions effected through brokers, Anschutz purchased for cash at varying prices from unaffiliated third party lenders $92.2 million in outstanding principal amount of United Artists' revolving and term indebtedness under its prepetition senior credit facilities. This indebtedness was converted into 100% of the preferred stock and approximately 20% of the common stock of United Artists in its reorganization proceedings. Anschutz also received a warrant to acquire an additional 3.75 million shares of common

stock of United Artists. After United Artists emerged from its reorganization proceedings, and prior to contributing the United Artists equity to Regal Entertainment, Anschutz purchased from minority stockholders of United Artists for cash an additional 61.0% of United Artists common stock.

During the period from July 2000 to April 2001, in a series of arm's-length transactions effected through brokers, Anschutz purchased for cash at varying prices from unaffiliated third party lenders (i) $435.3 million in outstanding principal amount of Regal Cinemas, Inc.'s revolving and term indebtedness under its prepetition senior credit facilities and (ii) $572.7 million in outstanding principal amount of Regal Cinemas, Inc.'s 9¹/2% senior subordinated notes due 2008 and 8⁷/8% senior subordinated notes due 2010. The senior bank debt was converted into approximately 60.0% of the common stock of Regal Cinemas, Inc. and the subordinated notes were satisfied and retired by a cash payment equal to $129.5 million in Regal Cinemas, Inc. reorganization proceedings.

Upon its emergence from reorganization proceedings, Regal Cinemas, Inc. became a wholly owned subsidiary of Regal Cinemas and Anschutz, Oaktree's Principal Activities Group and the other stockholders of Regal Cinemas, Inc. exchanged their common stock of Regal Cinemas, Inc. for common stock of Regal Cinemas.

Edwards Theatres. Under Edwards Theatres' plan of reorganization, Anschutz and Oaktree's Principal Activities Group will contribute to Edwards Theatres $0.90 for each $1.00 of allowed general unsecured claims in excess of $55.0 million, up to $13.5 million. For each $900 contributed, Anschutz and Oaktree's Principal Activities Group will receive $1,044, up to a maximum of $15,663,333, from Ms. Carole Ann Ruoff and Ms. Joan Edwards Randolph, both former stockholders of Edwards Theatres, and from Edwards Affiliated Holdings, LLC, a company controlled by Mr. W. James Edwards, another former stockholder of Edwards Theatres. We will also acquire up to 331,451 shares of our Class A common stock from Edwards Affiliated Holdings, LLC, based on the dollar amount contributed by Anschutz and Oaktree's Principal Activities Group. Anschutz and Oaktree's Principal

Activities Group will, in turn, receive the same number of shares from us, and will also receive from Ms. Ruoff and Ms. Randolph an aggregate of up to $7,384,469 in cash, in each instance based on the amount contributed and allocated between Anschutz and Oaktree's Principal Activities Group in relation to their respective contributions.

Regal Cinemas. As members of the class of holders of Regal Cinemas, Inc.'s old senior credit facilities, Anschutz received $33.6 million, Oaktree's Principal Activities Group received $5.6 million and GSCP received $6.0 million in respect of accrued but unpaid interest. As members of the class of holders of Regal Cinemas, Inc.'s subordinated debt, Anschutz received cash payments of approximately $129.5 million, Oaktree's Principal Activities Group received cash payments of approximately $29.7 million and GSCP received cash payments of approximately $5.5 million in satisfaction of these claims, which payments equaled approximately 20% of the principal amount of subordinated debt held by them. Anschutz has received cash payments of approximately $3.2 million and Oaktree's Principal Activities Group has received cash payments of approximately $800,000 from Regal Cinemas, Inc. and Regal Entertainment and GSCP has received cash payments from Regal Cinemas, Inc. of approximately $50,000 in respect of documented expenses incurred in connection with Regal Cinemas, Inc.'s restructuring. In addition, Regal Entertainment Group paid GSCP $1,000,000 for restructuring services.

On December 6, 2001, Regal Cinemas, Inc. entered into a bridge facility with Anschutz and an affiliate of Oaktree's Principal Activities Group. Under the terms of the bridge facility, Regal Cinemas, Inc. paid a commitment fee of $1.6 million to Anschutz and $400,000 to an affiliate of Oaktree's Principal Activities Group, which in the aggregate was 1% of the total amount of available commitments under the bridge facility. This bridge facility was not drawn and terminated upon Regal Cinemas, Inc.'s emergence from bankruptcy.

Regal Entertainment Group Stockholders' Agreement

On March 8, 2002, we entered into an agreement with our stockholders that became effective upon the closing of the exchange transaction, providing for certain rights and obligations among the stockholders, including rights of first refusal. Pursuant to this agreement, any stockholder, with the exception of Anschutz, who receives an offer to purchase all or any portion of his equity securities must first deliver to Anschutz and Oaktree's Principal Activities Group, as applicable, such offer on the same terms as initially received by the stockholder. If Oaktree's Principal Activities Group, or its affiliates, receives an offer to purchase its shares, only Anschutz will have a right of first refusal. If we offer for sale equity securities other than in connection with this offering and other financing transactions, then each of Anschutz and Oaktree's Principal Activities Group have a preemptive right to purchase its pro rata portion of those offered securities. If either Anschutz or Oaktree's Principal Activities Group elects to purchase its pro rata portion, then each of the other stockholders also has a preemptive right to purchase its pro rata portion.

The agreement provides that each stockholder will vote to cause to be elected to our board of directors five directors designated by Anschutz, Stephen A. Kaplan or another designee of Oaktree's Principal Activities Group approved by Anschutz, Michael L. Campbell, Kurt C. Hall and one director designated by a majority of our outstanding voting stock. The agreement also provides that the stockholders will be entitled to participate in offers to purchase at least a 50% voting interest in Regal

or any sale by Anschutz. Any stockholder who receives such offer cannot participate in the sale unless the offer is extended to the other stockholders. In the event we receive a proposal for any merger or sale of a significant portion of our assets or sale of shares of capital stock or other extraordinary transaction, all stockholders are obligated to vote their shares in favor of such transaction; provided that our board of directors has recommended the transaction or our stockholders who hold at least ²/3 of total voting power have indicated their approval. These rights and obligations, in addition to the rights of first refusal and preemptive rights described above, will terminate upon the closing of this offering.

In addition, the agreement provides registration rights. After the six-month period following this offering, Anschutz or Oaktree's Principal Activities Group may require us to register all or a portion of the shares of common stock then held by such stockholder. Generally, we are not obligated to comply with more than three demands for registration from Anschutz and two demands for registration from Oaktree's Principal Activities Group. The agreement also provides for piggyback rights other than in connection with this offering or registration statements related to employee benefit plans or acquisitions by us.

United Artists Stockholders' Agreement

United Artists and its stockholders (Regal Entertainment, Anschutz Investment Fund, LP, Bankers Trust Company, ML CLO XIX Sterling (Cayman) Ltd., Stein Roe Floating Rate Limited Liability Company, Goldentree High Yield Partners, L.P., Bank of America, N.A., Franklin Floating Rate Trust, Goldentree High Yield Opportunities I, L.P., Goldentree High Yield Partners, L.P., Putnam Diversified Income Trust, Putnam High Yield Managed Fund, and Bear Stearns & Co., Inc.) are party to an agreement dated March 2, 2001 that contains provisions for corporate governance, including a voting agreement with respect to the election of directors of United Artists. Pursuant to this agreement, Anschutz Investment Fund, LP, Bank of America, N.A., Bankers Trust Company, ML CLO XIX Sterling (Cayman) Ltd., Stein Roe Floating Rate Limited Liability Company, Franklin Floating Rate Trust, Putnam High Yield Managed Fund and Putnam Diversified Income Trust have the right to designate members of the board of directors of United Artists. Anschutz is entitled to nominate four members and Bank of America, N.A., Bankers Trust Company, ML CLO XIX Sterling (Cayman) Ltd., Stein Roe Floating Rate Limited Liability Company, Franklin Floating Rate Trust, Putnam High Yield Managed Fund and Putnam Diversified Income Trust as a group, are entitled to nominate two members. Anschutz has assigned to us its right under the stockholders' agreement to nominate board members pursuant to an agreement between Anschutz and us. Our agreement with Anschutz also provides that we may not amend or terminate the United Artists stockholders' agreement without the consent of Anschutz.

Bank of America, N.A., Bankers Trust Company, ML CLO XIX Sterling (Cayman) Ltd., Stein Roe Floating Rate Limited Liability Company, Franklin Floating Rate Trust, Putnam High Yield Managed Fund and Putnam Diversified Income Trust have registration rights with respect to the common stock issued to them in connection with United Artists' plan of reorganization. At any time following an initial public offering of United Artists, holders including at least 30% of the total number of registrable securities held by all holders of registrable securities in a proposed registration may require United Artists to register those securities. As a group, Bank of America, N.A., Bankers Trust Company, ML CLO XIX Sterling (Cayman) Ltd., Stein Roe Floating Rate Limited Liability Company, Franklin Floating Rate Trust, Putnam High Yield Managed Fund and Putnam Diversified Income Trust may request a maximum of three registrations.

In addition, the stockholders' agreement includes piggyback rights upon a public offering of United Artists shares, as well as rights with respect to share transfers, such as first refusal rights, bring along rights and tag along rights. The agreement also includes customary suspension, underwriter "cut-back", indemnification and contribution provisions.

By the terms of the Exchange Agreement, any shares of United Artists' capital stock, or warrants to purchase shares of United Artists' capital stock, that Anschutz acquires may be exchanged for additional shares of our Class B common stock prior to the closing of this offering at the exchange ratio set forth in the Exchange Agreement.

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

On April 17, 2002, Regal Cinemas used a portion of its proceeds from the 9³/8% senior subordinated notes issued on April 17, 2002 to cause Edwards Theatres 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 Theatres' Series A preferred stock held by them. Edwards Affiliated Holdings, LLC, an entity controlled by Edwards Theatres' former stockholder and director, W. James Edwards, III and Mr. Edwards' sisters, Carole Ann Ruoff and Joan Edwards Randolph, received an aggregate of $15.7 million in the redemption of the Edwards Theatres' Series B preferred stock held by them.

Payment of Edwards Theatres' Senior Subordinated Notes

On April 17, 2002, Regal Cinemas used a portion of its proceeds from the 9³/8% senior subordinated notes issued on April 17, 2002 to cause Edwards Theatres to redeem from Anschutz approximately $9.6 million and Oaktree's Principal Activities Group approximately $2.4 million owed on the senior subordinated notes issued by Edwards Theatres to Anschutz and Oaktree's Principal Activities Group.

Guaranties of Certain Edwards Theatres' Lease Obligations

On March 8, 2002, Anschutz entered into a Guaranty for the benefit of Starwood Wasserman Fresno LLC pursuant to which Anschutz unconditionally and irrevocably agreed to guaranty the full and timely payment and performance of all of the duties, obligations and covenants of Edwards Theatres under a certain Lease dated December 27, 1999 entered into by Edwards Theatres and Starwood Wasserman Fresno LLC. Under such Lease, Edwards Theatres leases property located in Fresno, California from Starwood Wasserman Fresno LLC for the purpose of operating a theatre on such property. Pursuant to the Guaranty, if Edwards Theatres defaults under the Lease, Starwood Wasserman Fresno LLC may proceed immediately against Anschutz or Edwards Theatres, or both, or may enforce against Anschutz or Edwards Theatres, or both, any rights it has under the Lease or pursuant to applicable laws. As soon as practicable, Anschutz and Regal intend to have the Guaranty terminated and replaced by a new guaranty from Regal substantially in the form of the Guaranty, for the benefit of Starwood Wasserman Fresno LLC.

On March 8, 2002, Anschutz entered into a Guaranty for the benefit of Starwood Wasserman Ontario LLC pursuant to which Anschutz unconditionally and irrevocably agreed to guaranty the full and timely payment and performance of all of the duties, obligations and covenants of Edwards Theatres under a certain Lease dated July 16, 1999 entered into by Edwards Theatres and Starwood Wasserman Ontario LLC. Under such Lease, Edwards Theatres leases property located in Ontario, California from Starwood Wasserman Ontario LLC for the purpose of operating a theatre on such property. Pursuant to the Guaranty, if Edwards Theatres defaults under the Lease, Starwood Wasserman Ontario LLC may proceed immediately against Anschutz or Edwards Theatres, or both, or may enforce against Anschutz or Edwards Theatres, or both, any rights it has under the Lease or pursuant to applicable laws. As soon as practicable, Anschutz and Regal intend to have the Guaranty terminated and replaced by a new guaranty from Regal substantially in the form of the Guaranty, for the benefit of Starwood Wasserman Ontario LLC.

Indemnification Agreements

Regal Cinemas, Inc. has entered into indemnification agreements with each of Michael L. Campbell, Peter B. Brandow, Gregory W. Dunn and Amy E. Miles. The indemnification agreements provide that Regal Cinemas, Inc. will indemnify each of those individuals against claims arising out of events or occurrences related to that individual's service as an agent of Regal Cinemas, Inc., except among other restrictions to the extent such claims arise from conduct that was knowingly fraudulent, a knowing violation of law or of any policy of Regal Cinemas, Inc., deliberately dishonest or in bad faith or constituted willful misconduct.

Compensation Committee Interlocks and Insider Participation

No interlocking relationship exists between our board of directors or compensation committee and the board of directors or compensation committee of any other company, nor has any interlocking relationship existed in the past.

Edwards Theatres Transactions

As a privately held company, Edwards Theatres engaged in numerous transactions with its principal shareholders, including W. James Edwards, III and his two sisters, Carole Ann Ruoff and Joan Edwards Randolph, prior to its bankruptcy reorganization. In connection with Edwards Theatres' bankruptcy reorganization, many of these transactions have been terminated.

During 1999, Edwards Theatres Circuit paid approximately $5.2 million to Mr. Edwards and other members of his family. These amounts were related to salary and other compensation, business perquisites and taxes payable by these individuals attributable to Edwards Theatres' profits. At the time Edwards Theatres Circuit filed for bankruptcy protection, it held receivables from Mr. Edwards and other members of his family to Edwards Theatres Circuit in the amount of $5.2 million. Pursuant to Edwards Theatres Circuit's plan of reorganization it released the shareholders for any and all claims and liabilities relating to these receivables.

Edwards Theatres owned a boat, valued at approximately $295,750, which was used solely by Mr. Edwards and his family. Mr. Edwards paid all costs and expenses relating to the operation of the boat. On April 17, 2002, Edwards Theatres transferred ownership of the boat to Mr. Edwards.

The following agreements were executed in connection with the operation and ownership of arcade and amusement game machines operated in theatres:

•: On January 1, 1999, Edwards Theatres, signed a five-year agreement with Cinema Amusement Management Company pursuant to which Cinema Amusement agreed to provide management services with respect to the arcade and amusement game machines located at the theaters. Cinema Amusement was owned by Mr. Edwards and his two sisters, Carol Ann Ruoff and Joan Edwards Randolph.
•: On January 4, 1999, Edwards Megaplex Holdings, LLC, a subsidiary of Edwards Theatres, signed a 25-year agreement with Cinema Amusement, granting Cinema Amusement the exclusive right to operate telecommunication equipment, such as payphones, at certain theatre properties operated by Megaplex. The agreements dated January 1 (described above) and January 4 with Cinema Amusement were terminated when Cinema Amusement merged into Edwards Theatres on September 28, 2001.
•: On March 1, 1999, Cinema Amusement, Orange Coast Cinemas, Inc., Edwards Theatres and Megaplex signed a 10 year agreement with West Coast Services, under which West Coast Services provided repair, maintenance, collection and management services for Edwards Theatres and Cinema Amusement with respect to video games and telephones located at the theatres.

•: On September 9, 1999, Orange Coast Cinemas and Megaplex entered into a 25 year agreement, granting Orange Coast Cinemas the exclusive right to operate telecommunications equipment at certain theatre properties operated by Megaplex.
•: On September 28, 2001, Cinema Amusement, Edwards Theatres Circuit and Megaplex merged into Edwards Theatres. In exchange for their equity interest in Cinema Amusement, each stockholder (Mr. Edwards and his two sisters) received from Edwards Theatres a pro rata share of $6 million.
•: With respect to the March 1, 1999 and September 9, 1999 agreements, they were terminated pursuant to a global settlement between West Coast Services, Edwards Theatres (as successor-in-interest by merger to Edwards Theatres Circuit Inc., Megaplex and Cinema Amusement) and OCC.

Edwards Theatre Circuit has entered into five-year non-compete agreements with each of Mr. Edwards and his two sisters, pursuant to which Mr. Edwards receives guaranteed non-compete payments in the amount of $200,000 per annum, and his two sisters each receive guaranteed non-compete payments in the amount of $200,000 per annum, plus $20,000, representing the economic equivalent of health insurance and automobile expenses.

Edwards Cinema Plaza Escondido, a company owned by Mr. Edwards and his two sisters leased a theatre complex to Edwards Theatres. As of December 28, 1999, Edwards Theatres had a note receivable approximately $2.2 million due from Edwards Cinema. In May 2000, the theatre complex was transferred from Edwards Cinema to Edwards Theatres in exchange for forgiving the note receivable.

Eastlund Properties, LLC, as landlord, and Edwards Theatres, as tenant, are parties to a lease agreement dated June 19, 2000, which provides for the lease of property located at 200 Newport Center Drive, Newport Beach, California for a period of five years at an annual base rent of approximately $290,796. Eastlund Properties, LLC is an entity which is wholly owned by Bernice Evelyn Edwards, the mother of Mr. Edwards, as trustee of the Bernice Evelyn Edwards Trust u/d/t/ August 1, 1997.

Trail Properties, LLC, as landlord, and Edwards Theatres, as tenant, are parties to a lease agreement dated June 27, 2000, which provides for the lease of property located at 300 Newport Center Drive, Newport Beach, California for a period of 34 years at a monthly rent of approximately $68,750, subject to a 12% increase every five years of the lease. Trail Properties, LLC is an entity which is wholly owned by Bernice Evelyn Edwards, as trustee of the Bernice Evelyn Edwards Trust.

PricewaterhouseCoopers LLP was retained by Mr. Edwards and his two sisters in February 2002, to advise and assist the family in connection with the proposed combination of Edwards Theatres, Regal Cinemas and United Artists. Edwards Theatres has agreed to be responsible for payment of the $250,000 advisory fee.

Edwards Theatres sold property located at 275 Flower Street, Costa Mesa, California to Mr. Edwards' sisters on April 28, 2000 based upon its appraised value of $395,000.

Edwards Theatres sold property located at 3818 Channel Place, Newport Beach, California to Bernice Edwards and/or the Bernice Evelyn Edwards Trust April 14, 2000 based upon appraised value of $575,000.

Edwards Entertainment 2000, Inc. ("EE2K"), incorporated in May 1997 and wholly owned by Mr. Edwards and his wife Patricia, was formed to pursue theatre development projects outside of California. EE2K intended to finance its development projects primarily through financing from third parties. EE2K (or its wholly owned subsidiaries) entered into several leases, the majority of which were guaranteed by Edwards Theatres. Edwards Theatres held a receivable of approximately $27 million for

development costs incurred by EE2K but paid by Edwards Theatres. Edwards Theatres also paid any and all costs and expenses incurred by EE2K.

In August 1999, EE2K became an "Affiliated Group Member", and accordingly, a guarantor under Megaplex's Credit Agreement with Bank of America. The Credit Agreement provided a mechanism for EE2K, under certain circumstances, to cease to be a member of the "Affiliated Group." However, EE2K did not obtain separate financing and remained a member of the Affiliated Group until the time Edwards Theatres and EE2K filed for bankruptcy protection in August 2000.

Certain of these leases were part of a larger joint venture arrangement with PLC Commercial Inc. (a third party unrelated to Edwards Theatres). In May 1997, EE2K and Edwards Theatres entered into an agreement with PLC Commercial. The agreement contemplated that the parties would acquire, own, develop and operate property located in Houston, Texas as an entertainment complex, and further, would proceed with plans for the ownership, development and operation of not less than four future projects. In connection with the formation of this joint venture, a number of LLC's and limited partnerships were formed, and collateral agreements were executed (including a private placement memorandum and a subscription agreement). EE2K and certain Edwards Theatres affiliates were members/limited partners of some of the formed entities. Once EE2K became an affiliated group member, Edwards Theatres effectively assumed all EE2K's rights and obligations under the agreement with PLC. For additional information please see "Business—Legal Proceedings."

PRINCIPAL AND SELLING STOCKHOLDERS

Principal Stockholders

The following table shows information with respect to beneficial ownership of our common stock, as of April 19, 2002, as adjusted to reflect the sale of the Class A common stock offered by us in this offering, for:

•: each of our directors and named executive officers;
•: all of our directors and executive officers as a group; and
•: each person known by us to beneficially own five percent or more of either class of our common stock.

We have calculated the percentage of beneficial ownership based on 27,493,575 shares of Class A common stock and 84,590,337 shares of Class B common stock outstanding as of April 19, 2002, and 45,493,575 shares of Class A common stock and 84,590,337 shares of Class B common stock outstanding after completion of this offering. This table assumes no exercise of the underwriters' over-allotment option. The address for each of the stockholders is listed below.

	Class A Common Stock					Class B Common Stock
	Class A Common Stock					Class B Common Stock					Percent of Voting Power (1)
		Percent of Class					Percent of Class				Percent of Voting Power (1)
Name of Beneficial Owner	No. of Shares Beneficially Owned (2)	Prior to the Offering		Following the Offering		No. of Shares Beneficially Owned	Prior To the Offering		Following the Offering		Prior to the Offering		Following the Offering
Directors
Philip F. Anschutz (3)	73,708,639	72.8	%	61.8	%	73,708,639	82.6	%	82.6	%	79.1	%	77.5	%
Thomas D. Bell, Jr.	—	—		—		—	—		—		—		—
Michael F. Bennet	—	—		—		—	—		—		—		—
Alfred C. Eckert III (4)	9,223,244	33.5		20.3		—	—		—		1.1		*
Stephen A. Kaplan (5)	15,507,503	36.1		25.4		15,507,503	18.3		18.3		17.8		17.4
Craig D. Slater (6)	—	—		—		—	—		—		—		—
Robert F. Starzel	—	—		—		—	—		—		—		—
Executive Officers
Michael L. Campbell (7)	190,884	*		*		—	—		—		*		*
Kurt C. Hall (7)	124,184	*		*		—	—		—		*		*
Amy E. Miles (7)	59,083	*		*		—	—		—		*		*
Gregory W. Dunn (7)	59,083	*		*		—	—		—		*		*
Peter B. Brandow (7)	45,448	*		*		—	—		—		*		*
All directors and executive officers as a group (12 persons)	98,918,068	84.4	%	73.2	%	89,216,142	100	%	100	%	97.9	%	95.9	%
Five Percent Stockholders
Anschutz Investment Fund, LP (8)	73,708,639	72.8	%	61.8	%	73,708,639	82.6	%	82.6	%	79.1	%	77.5	%
OCM Principal Opportunities Fund II, L.P. (9)	15,507,503	36.1		25.4		15,507,503	18.3		18.3		17.8		17.4
GSCP Recovery, Inc. (10)	9,223,244	33.5		20.3		—	—		—		1.1		*
LB I Group Inc. (11)	5,638,333	20.5		12.4		—	—		—		*		*
ACE II LLC (12)	4,538,334	16.4		9.9		—	—		—		*		*

Putnam Investment Management, LLC and Putnam Fiduciary Trust Company (13)		4,075,669		14.8		9.0		—		—		—		*		*
Edwards Affiliated Holdings, LLC (14)		1,743,732		6.3		3.8		—		—		—		*		*

*: Represents less than 1%
(1): Each share of Class A common stock has one vote and each share of Class B common stock has ten votes on all matters to be voted on by stockholders. This column represents the combined voting power of the outstanding shares of Class B common stock and Class A common stock held by such beneficial owner and assumes that no shares of Class B common stock have been converted into Class A common stock.
(2): Beneficial ownership is determined under the rules of the Securities and Exchange Commission and includes voting or investment power with respect to the securities. Unless indicated by footnote, the address for each listed director, officer and principal stockholder is 9100 East Nichols Avenue, Suite 200, Centennial, CO 80112. Except as indicated by footnote, the persons named in the table have sole voting and investment power with respect to all shares of Class A common stock and Class B common stock shown as beneficially owned by them. The number of shares of Class A common stock and Class B common stock outstanding used in calculating the percentage for each listed person includes the shares of Class A common stock and Class B common stock underlying warrants or options held by that person that are currently exercisable or are exercisable within 60 days of April 19, 2002, but excludes shares of Class A common stock and Class B common stock underlying warrants or options held by any other person.
(3): All of the shares shown as beneficially owned by Mr. Anschutz are held by Anschutz Investment Fund, LP, which is controlled by Mr. Anschutz. Of the 73,708,639 shares of Class B common stock, 3,928,185 represent shares of Class B common stock issuable upon the exercise of outstanding warrants and 697,620 shares that are issuable upon the contribution by Anschutz to Regal of additional shares of common stock of United Artists. The 73,708,639 shares of Class A common stock represent 69,780,454 shares of Class A common stock issuable upon the conversion of a like number of shares of Class B common stock beneficially owned by Mr. Anschutz and 3,928,185 shares of Class A common stock issuable upon conversion of a like number of shares of Class B common that are issuable upon the exercise of outstanding warrants.
(4): All of the shares shown as beneficially owned by Mr. Eckert are held by GSCP Recovery, Inc., a Cayman Islands corporation, which Mr. Eckert may be deemed to control. Mr. Eckert disclaims beneficial ownership except to the extent of his pecuniary interest.
(5): All of the shares shown as beneficially owned by Mr. Kaplan are held by OCM Principal Opportunities Fund II, L.P., which Mr. Kaplan may be deemed to control. The 15,507,503 shares of Class A common stock represent 15,507,503 shares of Class A common stock issuable upon conversion of a like number of shares of Class B common stock. Mr. Kaplan disclaims beneficial ownership except to the extent of his pecuniary interest.

(6): Excludes 893,059 shares of Class A common stock and warrants to purchase 54,266 shares of Class A common stock held in trust for the benefit of Mr. Slater's family members and as to which Mr. Slater does not have voting or dispositive power.
(7): Reflects shares subject to currently exercisable options.
(8): The address of Anschutz Investment, Fund LP is 555 17th Street, Suite 2400, Denver, CO 80202.
(9): The address of OCM Principal Opportunities Fund II, L.P. is 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071.
(10): The address of GSCP Recovery, Inc. is c/o Maples and Calder, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands. The business address for Mr. Eckert is c/o Greenwich Street Capital Partners, Inc., 500 Campus Drive, Suite 220, Florham Park, New Jersey 07932.
(11): The address of LB I Group Inc. is c/o Lehman Brothers Inc., 399 Park Avenue, New York, NY 10022.
(12): Includes 241,863 shares of Class A common stock issuable upon the exercise of outstanding warrants. The address of ACE II LLC is 555 17th Street, Suite 2400, Denver, CO 80202.
(13): Represents (i) a total of 4,046,175 shares held by investment funds to which Putnam Investment Management, LLC ("PIM LLC") serves as investment advisor and (ii) a total of 29,494 shares held by investment funds to which Putnam Fiduciary Trust Company ("PFTC") serves as investment advisor. PIM LLC and PFTC are indirect wholly-owned subsidiaries of Putnam, LLC, and Putnam, LLC is an indirect subsidiary of Marsh & McLennan Companies, Inc. Each of PIM LLC and PFTC has investment power over the shares owned by the funds managed by it, but the Putnam funds maintain voting power over those shares. As such, each of PIM LLC and PFTC, respectively, may be deemed to be the beneficial owner for reporting purposes of the shares owned by the Putnam funds advised by it. Putnam, LLC and Marsh & McLennan Companies, Inc. could also each be deemed to be the beneficial owner for reporting purposes of the shares owned by funds advised by PIM LLC or PFTC; however, Marsh & McLennan Companies, Inc. and Putnam, LLC each disclaim beneficial ownership of these shares. The address of PIM LLC and PFTC is c/o Putnam Investments, One Post Office Square, Boston, MA 02109.
(14): The address of Edwards Affiliated Holdings, LLC is c/o W. James Edwards, III, 25 Hermitage Lane, Newport Beach, CA 92660.

Selling Stockholders

If the underwriters exercise their over-allotment option in full, each of the following selling stockholders has agreed to sell the number of shares of Class A common stock indicated as being subject to the over-allotment option. If such option is not exercised, the following selling stockholders will not offer or sell any shares of Class A common stock in this offering. The following table lists the selling stockholders and (i) the number of shares of our Class A common stock currently beneficially owned by each such stockholder, (ii) the number of such shares being offered for resale by this prospectus by each such stockholder, and (iii) assuming each such stockholder sells all of the shares offered for resale, the number and percentage of shares such stockholder will own after the completion of this offering. Except as otherwise indicated in the footnotes to the table, no selling stockholder has had any position, office or other material relationship, other than as a stockholder, with us or any of our predecessors or affiliates during the past three years.

Name of Stockholder	No. of Shares of Class A Common Stock Beneficially Owned(1)	No. of Shares of Class A Common Stock Subject to Over-Allotment Option	No. of Shares of Class A Common Stock Beneficially Owned Assuming Exercise in full of Over- Allotment Option	Percentage of Shares of Class A Common Stock Owned Assuming Exercise in full of Over-Allotment Option
Putnam High Yield Trust(2)	843,260	349,194	494,066	1.1	%
Putnam High Yield Advantage Fund(2)	621,071	175,460	445,611	1.0
Putnam Variable Trust-Putnam VT High Yield Fund(2)	302,677	96,585	206,092	*
Putnam Master Intermediate Income Trust(2)	238,125	45,552	192,573	*
Putnam Funds Trust-Putnam High Yield Trust II(2)	716,131	260,757	455,374	1.0
Travelers Series Fund Inc.—Putnam Diversified Income Portfolio(2)	41,962	6,995	34,967	*
Putnam High Yield Fixed Income Fund, LLC(2)	24,171	8,092	16,079	*
Edwards Affiliated Holdings, LLC(3)	1,743,732	240,000	1,503,732	3.3
The Tudor BVI Global Portfolio Ltd.(4)	1,213,892	1,213,892	0	*
Tudor Proprietary Trading, L.L.C.(4)	303,473	303,473	0	*

(1): Beneficial ownership is determined under the rules of the Securities and Exchange Commission and includes voting or investment power with respect to the securities. Except as indicated by footnote, the persons named in the table have sole voting and investment power with respect to all shares of Class A common stock shown as beneficially owned by them.
(2): Each of the Putnam selling stockholders listed was a lender to Regal Cinemas, Inc. prior to Regal Cinemas, Inc.'s bankruptcy reorganization.
(3): W. James Edwards III, the controlling member of Edwards Affiliated Holdings, LLC, was a principal stockholder and a director of Edwards Theatres prior to April 17, 2002.
(4): Each of The Tudor BVI Global Portfolio Ltd. and Tudor Proprietary Trading, L.L.C. were lenders to Regal Cinemas, Inc. prior to Regal Cinemas, Inc.'s bankruptcy reorganization.

DESCRIPTION OF CAPITAL STOCK

The following description of our capital stock and the material provisions of our certificate of incorporation and bylaws is only a summary. You should refer to the complete terms of our capital stock contained in our amended and restated certificate of incorporation and bylaws, which will become effective upon the closing of this offering and which have been filed as exhibits to the registration statement of which this prospectus is a part.

General

At the time of the offering, our authorized capital stock will consist of:

•: 500,000,000 shares of Class A common stock, par value $0.001 per share;
•: 200,000,000 shares of Class B common stock, par value $0.001 per share; and
•: 50,000,000 shares of preferred stock, par value $0.001 per share.

Of the authorized shares of Class A common stock, 18,000,000 shares are being offered hereby. On the closing of this offering, 45,493,575 shares of Class A common stock will be outstanding. Of the authorized shares of Class B common stock, on the closing of this offering 84,590,337 shares will be outstanding and held by Anschutz and Oaktree's Principal Activities Group. Of the authorized shares of the preferred stock, on the closing of this offering no shares will be outstanding. The material terms and provisions of our certificate of incorporation affecting the relative rights of the Class A common stock and the Class B common stock are described below. The following description of our capital stock is intended as a summary only and is qualified in its entirety by reference to the forms of our certificate of incorporation and bylaws filed with the registration statement of which this prospectus forms a part, and to the Delaware General Corporation Law (DGCL).

Common Stock

The Class A common stock and the Class B common stock will be identical in all respects, except with respect to voting and except that each share of Class B common stock will convert into one share of Class A common stock at the option of the holder or upon a transfer of the holder's Class B common stock, other than to certain transferees. Each holder of Class A common stock will be entitled to one vote for each outstanding share of Class A common stock owned by that stockholder on every matter properly submitted to the stockholders for their vote. Each holder of Class B common stock will be 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. Except as required by law, the Class A common stock and the Class B common stock will vote together on all matters. Subject to the dividend rights of holders of any outstanding preferred stock, holders of common stock are entitled to any dividend declared by the board of directors out of funds legally available for this purpose, and, subject to the liquidation preferences of any outstanding preferred stock, holders of common stock are entitled to receive, on a pro rata basis, all our remaining assets available for distribution to the stockholders in the event of our liquidation, dissolution or winding up. No dividend can be declared on the Class A or Class B common stock unless at the same time an equal dividend is paid on each share of Class B or Class A common stock, as the case may be. Dividends paid in shares of common stock must be paid, with respect to a particular class of common stock, in shares of that class. Holders of common stock do not have any preemptive right to become subscribers or purchasers of additional shares of any class of our capital stock. The outstanding shares of common stock are, and the shares of common stock offered in this offering will be, when issued and paid for, fully paid and nonassessable. The rights, preferences and privileges of holders of common stock may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.

Preferred Stock

Our certificate of incorporation allows us to issue without stockholder approval preferred stock having rights senior to those of the common stock. Following completion of this offering, no shares of preferred stock will be outstanding. Our board of directors will be authorized, without further stockholder approval, to issue up to 50,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions of any series of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, and to fix the number of shares constituting any series and the designations of these series. Our issuance of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of common stock or could adversely affect the rights and powers, including voting rights, of the holders of common stock. The issuance of preferred stock could also have the effect of decreasing the market price of the Class A common stock. We currently have no plans to issue any shares of preferred stock.

Power to Issue Additional Shares of Stock

We believe that the power of our board of directors to issue additional shares of common stock or preferred stock will provide us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs which might arise. The preferred stock and the Class A common stock will be available for issuance without further action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded. Although we have no intention of doing so, we could issue a class or series of stock that could have the effect of delaying or preventing a change in control or making removal of management more difficult.

Anti-Takeover Provisions

Our certificate of incorporation and bylaws may be deemed to have an anti-takeover effect and may delay, defer or prevent a tender offer or takeover attempt that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by stockholders.

Options and Warrants

Upon the closing of this offering, we will have outstanding options to purchase a total of 8,832,147 shares of Class A common stock under our 2002 Stock Incentive Plan with exercise prices ranging from $4.44 to $12.87 per share and we will have outstanding warrants to purchase a total of 296,129 shares of Class A common stock and 3,928,185 shares of Class B common stock at an exercise price of $8.88 per share.

Indemnification of Directors and Officers

Our certificate of incorporation and bylaws provide a right to indemnification to the fullest extent permitted by law to any person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether by or in our right or otherwise, by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was our director or officer or is or was serving at our request as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan, and that such person will be indemnified and held harmless by us to the fullest extent authorized by, and subject to the conditions and procedures set forth in the DGCL, against all expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person. Our certificate of incorporation and bylaws also provide for the advancement of expenses to an indemnified party. Additionally, we may indemnify any

employee or agent of ours to the fullest extent permitted by law. Our bylaws authorize us to take steps to ensure that all persons entitled to the indemnification are properly indemnified, including, if the board of directors so determines, purchasing and maintaining insurance.

Limitations on Liability and Indemnification of Officers and Directors

Our certificate of incorporation provides that none of the directors shall be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director, except liability for:

•: Any breach of the director's duty of loyalty to us or our stockholders;
•: Acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
•: The payment of unlawful dividends and unlawful repurchase or redemption of our capital stock prohibited by the DGCL; and
•: Any transaction from which the director derived any improper personal benefits.

The effect of this provision of our certificate of incorporation is to eliminate our rights and the rights of our stockholders to recover monetary damages against a director for breach of the fiduciary duty of care as a director, including breaches resulting from negligent or grossly negligent behavior, except in the situations described above. This provision does not limit or eliminate our rights or the rights of any stockholder to seek non-monetary relief, such as an injunction or rescission in the event of a breach of a director's duty of care.

Additional Certificate of Incorporation and Bylaw Provisions

General. Upon the closing of this offering, our certificate of incorporation and bylaws will contain the following additional provisions, some of which are intended to enhance the likelihood of continuity and stability in the composition of our board of directors and in the policies formulated by our board of directors. In addition, some provisions of the DGCL, if applicable to us, may hinder or delay an attempted takeover without prior approval of our board of directors. These provisions could discourage attempts to acquire us or remove incumbent management even if some or a majority of our stockholders believe this action is in their best interest. These provisions could, therefore, prevent stockholders from receiving a premium over the market price for the shares of common stock they hold.

Board of Directors. Our bylaws provide that our board of directors initially consist of nine members and that it may be increased or decreased in accordance with the bylaws. The total number of directors, however, may not be fewer than three nor more than nine. Pursuant to our bylaws, the number of directors is fixed by our board of directors within the limits set forth in the bylaws. Following the completion of this offering, our certificate of incorporation and bylaws will provide for a board of directors consisting of three classes of directors, each serving staggered three-year terms. As a result, a portion of our board of directors will be elected each year. At any time that the outstanding shares of Class B common stock represent 50% or less of the combined voting power of the common stock, directors may not be removed by vote of the stockholders except for cause.

Michael L. Campbell, Alfred C. Eckert III and Kurt C. Hall have been designated Class I directors whose terms expire at the 2003 annual meeting of stockholders. Thomas D. Bell, Jr., Michael F. Bennet and Craig D. Slater have been designated Class II directors whose terms expire at the 2004 annual meeting of stockholders. Philip F. Anschutz, Stephen M. Kaplan and Robert F. Starzel have been designated Class III directors whose terms expire at the 2005 annual meeting of stockholders. The authorized number of directors may be changed only by resolution of our board of directors. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. This classification of our board of directors may have the effect of delaying or preventing changes in control or management.

Filling of Board Vacancies; Removal. Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by the stockholders may be filled by the affirmative vote of a majority of our directors then in office. Whenever the holders of any class or classes of our stock or series thereof are entitled to elect one or more directors, vacancies and newly created directorships of such class or classes or series may be filled by the affirmative vote of a majority of our directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Each such director will hold office until the next election of directors of that director's class, and until such director's successor is elected and qualified, or until the director's earlier death, resignation or removal. Stockholders are not permitted to fill vacancies.

Stockholder action by written consent. Except as provided in the following sentence, pursuant to the DGCL, our bylaws and the requirements of the New York Stock Exchange, any action required or permitted to be taken by the stockholders must be effected at a duly called annual or special meeting of such holders, and may not be effected by any consent in writing by such holders. Any action required or permitted to be taken at a special stockholders' meeting may be taken without a meeting, without prior notice and without a vote, if the outstanding shares of Class B common stock represent greater than 50% of the combined voting power of the common stock and the action is taken by persons who would be entitled to vote at a meeting and who hold shares having voting power equal to not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and voted. The action must be evidenced by one or more written consents describing the action taken, signed by the stockholders entitled to take action without a meeting, and delivered to us in the manner prescribed by the DGCL.

Call of special meetings. Our bylaws provide that special meetings of the stockholders may be called only by a Co-Chief Executive Officer, our board of directors or the Chairperson.

Advance notice of director nominations and new business. Our bylaws provide that:

•

with respect to an annual meeting of stockholders, the proposal of business to be considered by stockholders, other than nominations of persons for election to our board of directors, may be made only:

•: pursuant to the notice of meeting,
•: by our board of directors, or
•: by a stockholder of record who is entitled to vote at the meeting and has complied with the advance notice procedures set forth in the bylaws; and

•

with respect to special meetings of stockholders, only the business specified in the notice of meeting may be brought before the meeting of stockholders and nominations of persons for election to our board of directors may be made at an annual or special meeting of stockholders only:

•: pursuant to the notice of the meeting,
•: by our board of directors, or
•: provided that our board of directors has determined that directors shall be elected at such meeting, by a stockholder who is entitled to vote at the meeting and has complied with the advance notice provisions set forth in our bylaws.

The advance notice provisions contained in the bylaws generally require nominations and new business proposals by stockholders to be delivered to our Secretary not later than the close of business on the 120^th day nor earlier than the close of business on the 150^th day prior to the first anniversary of the preceding year's annual meeting.

Delaware "business combination" statute. We have elected not to be subject to Section 203 of the Delaware General Corporation Law, which generally prohibits a publicly held Delaware corporation

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from engaging in various "business combination" transactions with any "interested stockholder" for a period of three years after the date of the transaction in which the person became an "interested stockholder," unless the transaction is approved by the board of directors or another exception is available. A "business combination" includes mergers, asset sales and other transactions resulting in a financial benefit to a stockholder. An "interested stockholder" is a person who, together with affiliates and associates, owns (or within three years, did own) 15% or more of a corporation's voting stock. The statute is intended to prohibit or delay the accomplishment of mergers or other takeover or change in control attempts. By virtue of our decision to elect out of the statute's provisions, the statute does not apply to us, but we could elect to be subject to Section 203 in the future.

Amendments to our certificate of incorporation and bylaws. Except where our board of directors is permitted by law or by our certificate of incorporation to act without any action by our stockholders, subject to any voting rights granted to our preferred stock, provisions of our certificate of incorporation may not be adopted, repealed, altered or amended, in whole or in part, without the approval of a majority of the combined voting power of the outstanding shares of our capital stock entitled to vote, voting as a single class. The holders of the outstanding shares of a particular class of our capital stock are entitled to vote as a class upon any proposed amendment of our certificate of incorporation that would alter or change the relative powers, preferences or participating, optional or other special rights of the shares of such class so as to affect them adversely vis-a-vis the holders of any other class. Our certificate of incorporation permits our board of directors to adopt, amend and repeal our bylaws.

Registration Rights

After the six-month period following this offering, the holders of up to 112,083,912 shares of our common stock will be entitled to registration rights. These rights include rights to require us to include the holders' common stock in future registration statements we file with the SEC subject to certain limitations and, in some cases, demand registration rights. See "Related Party Transactions—Regal Entertainment Group Stockholders' Agreement."

In addition, if at any time after the date of this offering, we prepare to register any of our common stock under the Securities Act, on our behalf or on behalf of any of our stockholders, we must send notice of the registration to all holders with registration rights. Subject to certain conditions and limitations, these holders may elect to register their eligible shares.

Registration of shares of common stock upon the exercise of demand registration rights would result in the covered shares becoming freely tradable without restriction under the Securities Act immediately upon the effectiveness of the registration statement. If shares of common stock are included in a registration, the holder of such shares will pay all transfer taxes relating to the sale of its shares, the fees and expenses of its own counsel and its pro rata portion of any underwriting discounts or commissions or the equivalent thereof. We will pay all other expenses incurred in connection with these registrations. These sales could reduce the trading price of our Class A common stock.

Transfer Agent and Registrar

We have retained Wells Fargo Bank Minnesota, National Association as transfer agent and registrar for our common stock.

Listing

We have applied to have our Class A common stock listed on the New York Stock Exchange under the trading symbol "RGC."

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS

This is a general summary of material U.S. federal income and estate tax considerations with respect to your acquisition, ownership and disposition of our common stock if you are a beneficial owner of shares other than:

•: A citizen or resident of the United States;
•: A corporation, partnership or other entity created or organized in, or under the laws of, the United States or any political subdivision of the United States;
•: An estate, the income of which is subject to U.S. federal income taxation regardless of its source;
•: A trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust; or
•: A trust that existed on August 20, 1996, was treated as a U.S. person on August 19, 1996, and elected to be treated as a U.S. person.

This summary does not address all of the U.S. federal income and estate tax considerations that may be relevant to you in light of your particular circumstances or if you are a beneficial owner subject to special treatment under United States income tax laws such as a:

•: Controlled foreign corporation;
•: Passive foreign investment company;
•: Foreign personal holding company;
•: Company that accumulates earnings to avoid U.S. federal income tax;
•: Foreign tax-exempt organization;
•: Financial institution;
•: Broker or dealer in securities; or
•: Former U.S. citizen or resident.

This summary does not discuss any aspect of state, local or non-United States taxation. This summary is based on current provisions of the Internal Revenue Code, Treasury regulations, judicial opinions, published positions of the U.S. Internal Revenue Service and all other applicable authorities, all of which are subject to change, possibly with retroactive effect. This summary is not intended as tax advice.

We urge prospective non-United States stockholders to consult their tax advisors regarding the United States federal, state, local and non-United States income and other tax considerations of acquiring, holding and disposing of shares of our common stock.

Dividends

In general, any distributions we make to you with respect to your shares of our common stock that constitute dividends for U.S. federal income tax purposes will be subject to U.S. withholding tax at a rate of 30.0% of the gross amount, unless you are eligible for a reduced rate of withholding tax under an applicable income tax treaty and you provide proper certification of your eligibility for such reduced rate (usually on an IRS Form W-8BEN). A distribution will constitute a dividend for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits as determined under the Internal Revenue Code. Any distribution not constituting a dividend will be treated first as

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reducing your basis in your shares of our common stock and, to the extent it exceeds your basis, as gain from the disposition of your shares of our common stock.

Dividends we pay to you that are effectively connected with your conduct of a trade or business within the United States and, if certain income tax treaties apply, are attributable to a U.S. permanent establishment maintained by you, generally will not be subject to U.S. withholding tax if you comply with applicable certification and disclosure requirements. Instead, such dividends generally will be subject to U.S. federal income tax, net of certain deductions, at the same rates applicable to U.S. persons. If you are a corporation, effectively connected income may also be subject to a "branch profits tax" at a rate of 30.0%, or a lower rate specified by an applicable income tax treaty. Dividends that are effectively connected with your conduct of a trade or business but that under an applicable income tax treaty are not attributable to a U.S. permanent establishment maintained by you may be eligible for a reduced rate of U.S. withholding tax under such treaty, provided you comply with certification and disclosure requirements necessary to obtain treaty benefits.

Sale or Other Disposition of Our Common Stock

You generally will not be subject to U.S. federal income tax on any gain realized upon the sale or other disposition of your shares of our common stock unless:

•: The gain is effectively connected with your conduct of a trade or business within the United States and, under certain income tax treaties, is attributable to a U.S. permanent establishment you maintain;
•: You are an individual, you hold your shares of our common stock as capital assets, you are present in the United States for 183 days or more in the taxable year of disposition and you meet other conditions, and you are not eligible for relief under an applicable income tax treaty; or
•: We are or have been a "United States real property holding corporation" for U.S. federal income tax purposes (which we believe we are not) and you hold or have held, directly or indirectly, at any time within the shorter of the five-year period preceding disposition or your holding period for your shares of our common stock, more than 5.0% of our Class A common stock.

Gain that is effectively connected with your conduct of a trade or business within the United States generally will be subject to U.S. federal income tax, net of certain deductions, at the same rates applicable to U.S. persons. If you are a corporation, the branch profits tax, as discussed above, also may apply to such effectively connected gain. If the gain from the sale or disposition of your shares is effectively connected with your conduct of a trade or business in the United States but under an applicable income tax treaty is not attributable to a permanent establishment you maintain in the United States, your gain may be exempt from U.S. tax under the treaty. If you are described in the second bullet point above, you generally will be subject to U.S. tax at a rate of 30.0% on the gain realized, although the gain may be offset by some U.S. source capital losses realized during the same taxable year.

Information Reporting and Backup Withholding

We must report annually to the IRS the amount of dividends or other distributions we pay to you on your shares of our common stock and the amount of tax we withhold on these distributions regardless of whether withholding is required. The IRS may make copies of the information returns reporting those dividends and amounts withheld available to the tax authorities in the country in which you reside pursuant to the provisions of an applicable income tax treaty or exchange of information treaty.

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The United States imposes a backup withholding tax on dividends and certain other types of payments to U.S. persons. You will not be subject to backup withholding tax on dividends you receive on your shares of our common stock if you provide proper certification (usually on an IRS Form W-8BEN) of your status as a non-U.S. person or you are a corporation or one of several types of entities and organizations that qualify for exemption.

Information reporting and backup withholding generally are not required with respect to the amount of any proceeds from the sale of your shares of our common stock outside the United States through a foreign office of a foreign broker that does not have certain specified connections to the United States. However, if you sell your shares of our common stock through a U.S. broker or the United States office of a foreign broker, the broker will be required to report to the IRS the amount of proceeds paid to you and also withhold backup withholding taxes unless you provide appropriate certification (usually on an IRS Form W-8BEN) to the broker of your status as a non-U.S. person or you are a corporation or one of several types of entities and organizations that qualify for exemption. Information reporting and backup withholding, if the appropriate certification is not provided, also apply if you sell your shares of our common stock through a foreign broker deriving more than a specified percentage of its income from U.S. sources or having certain other connections to the United States.

Any amounts withheld with respect to your shares of our common stock under the backup withholding rules will be refunded to you or credited against your U.S. federal income tax liability, if any, by the IRS if the required information is furnished in a timely manner.

Estate Tax

Shares of our common stock owned or treated as owned by an individual who is not a citizen or resident, as defined for U.S. federal tax purposes, of the United States at the time of his or her death will be subject to U.S. federal estate tax unless an applicable estate tax treaty provides otherwise.

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SHARES ELIGIBLE FOR FUTURE SALE

If our stockholders sell substantial amounts of common stock, including shares issued upon the exercise of outstanding options, in the public market following this offering, the market price of our Class A common stock could fall. These sales also may make it more difficult for us to sell equity or equity-related securities in the future and at a time and price that we deem appropriate.

Upon the closing of this offering, assuming no exercise of outstanding options or warrants we will have outstanding an aggregate of 45,493,575 shares of our Class A common stock and 84,590,337 shares of Class B common stock which may convert into Class A common stock on a one-for-one basis. Of these shares, the 18,000,000 shares of Class A common stock sold in this offering will be freely tradeable without restriction or further registration under the Securities Act, unless these shares are purchased by "affiliates" as that term is defined in Rule 144 under the Securities Act. This leaves 112,083,912 shares of our common stock eligible for sale in the public market commencing at various times between 180 days and one year after the completion of this offering (subject, in some cases, to volume limitations).

Lock-Up Agreements

All of our officers and directors and stockholders holding all of the common stock outstanding before closing of this offering have signed the lock-up agreements described in "Underwriting."

Rule 144

In general, under Rule 144, a person who has received shares of our Class A common stock under the Exchange Agreement, after beneficially owning such shares for at least one year, will be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

•: 1% of the number of shares of our Class A common stock outstanding; or
•: the average weekly trading volume of our Class A common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to that sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us. See "Related Party Transactions—The Exchange Transaction."

Rule 144(k)

Under Rule 144(k), a person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of any prior owner other than an affiliate, is entitled to sell those shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144. There will be no such shares eligible for resale under Rule 144(k) upon the closing of this offering.

Rule 701

In general, under Rule 701 of the Securities Act, any of our employees, consultants or advisors who purchased shares of our Class A common stock from us in connection with a compensatory stock or option plan or other written agreement is eligible to resell those shares 90 days after the effective date of this offering in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144. As of April 19, 2002, no options had been exercised.

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Registration Rights

Each of the parties to the exchange transaction has registration rights for shares of our capital stock they hold. See "Description of Capital Stock—Registration Rights" and "Related Party Transactions—Regal Entertainment Group Stockholders Agreement."

All of our stockholders with registration rights have agreed not to exercise their registration rights until 180 days following the date of this prospectus without the prior consent of Credit Suisse First Boston Corporation.

Stock Options

As soon as practicable after the closing of this offering, we intend to file a registration statement on Form S-8 covering the shares of Class A common stock reserved for issuance under our stock incentive plan. As of April 19, 2002, options to purchase 8,832,147 shares of Class A common stock were outstanding. The registration statement is expected to be filed and become effective as soon as practicable after the effective date of this offering. Shares of Class A common stock registered under any registration statement will, subject to Rule 144 volume limitations applicable to affiliates, be available for sale in the open market, unless the shares are subject to vesting restrictions or the lock-up agreements described above.

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UNDERWRITING

Under the terms and subject to the conditions contained in an underwriting agreement dated , 2002 we have agreed to sell to the underwriters named below, for whom Credit Suisse First Boston Corporation and Lehman Brothers Inc. (as joint bookrunners) are acting as representatives, the following respective numbers of shares of Class A common stock:

Underwriter			Number of Shares
Credit Suisse First Boston Corporation
Lehman Brothers Inc.
Bear, Stearns & Co. Inc.
Salomon Smith Barney Inc.

	Total

The underwriting agreement provides that the underwriters are obligated to purchase all the shares of Class A common stock in the offering if any are purchased, other than those shares covered by the over-allotment option described below. The underwriting agreement also provides that if an underwriter defaults the purchase commitments of non-defaulting underwriters may be increased or the offering may be terminated.

Several of our stockholders have granted to the underwriters a 30-day option to purchase on a pro rata basis up to 2,700,000 additional shares at the initial public offering price less the underwriting discounts and commissions. The option may be exercised only to cover any over-allotments of Class A common stock.

The underwriters propose to offer the shares of Class A common stock initially at the public offering price on the cover page of this prospectus and to selling group members at that price less a selling concession of $ per share. The underwriters and selling group members may allow a discount of $ per share on sales to other broker/dealers. After the initial public offering, the representatives may change the public offering price and concession and discount to broker/dealers.

The following table summarizes the compensation and estimated expenses we will pay:

	Per Share		Total
	Without Over-allotment	With Over-allotment	With Over-allotment	With Over-allotment
Underwriting Discounts and Commissions paid by us	$	$	$	$
Expenses payable by us

The representatives have informed us that they do not expect discretionary sales to exceed 5% of the shares of Class A common stock being offered.

We have agreed that we will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Securities and Exchange Commission a registration statement under the Securities Act of 1933 (the "Securities Act") relating to, any shares of our Class A common stock or securities convertible into or exchangeable or exercisable for any shares of our Class A common stock, or publicly disclose the intention to make any offer, sale, pledge, disposition or filing, without the prior written consent of Credit Suisse First Boston Corporation for a period of 180 days after the date of this prospectus, except issuances pursuant to the exercise of employee stock options outstanding on the date hereof.

107

Our officers and directors and all of our stockholders have agreed that they will not, subject to certain exceptions, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of our Class A common stock or securities convertible into or exchangeable or exercisable for any shares of our Class A common stock, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of our Class A common stock, whether any of these transactions are to be settled by delivery of our Class A common stock or other securities, in cash or otherwise, or publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of the underwriters for a period of 180 days after the date of this prospectus.

The underwriters have reserved for sale at the initial public offering price up to 900,000 shares of the Class A common stock for employees, directors and other persons associated with us who have expressed an interest in purchasing Class A common stock in the offering. The number of shares available for sale to the general public in the offering will be reduced to the extent these persons purchase the reserved shares. Any reserved shares not so purchased will be offered by the underwriters to the general public on the same terms as the other shares.

We and, if the underwriters' over-allottment option is exercised, the selling shareholders have agreed to indemnify the underwriters against liabilities under the Securities Act, or contribute to payments that the underwriters may be required to make in that respect.

We have applied to list the shares of Class A common stock on The New York Stock Exchange. The underwriters have undertaken to sell shares of our Class A common stock to a minimum of 2,000 beneficial owners in lots of 100 or more shares to meet the New York Stock Exchange distribution requirements for trading.

Prior to this offering, there has been no public market for our Class A common stock. The initial public offering price for the Class A common stock will be negotiated among us and the representatives. The principal factors to be considered in determining the initial public offering price will include:

•: market conditions for initial public offerings;
•: the history of and prospects for our business;
•: our past and present operations;
•: our past and present earnings and current financial position
•: an assessment of our management;
•: the market of securities of companies in businesses similar to ours; and
•: the general condition of the securities markets.

There can be no assurance that the initial public offering price will correspond to the price at which the Class A common stock will trade in the public market subsequent to the offering or that an active trading market will develop and continue after the offering.

As of April 19, 2002, LB I Group Inc., an affiliate of Lehman Brothers Inc., held an aggregate of 5,638,333 shares of Class A common stock.

Some of the underwriters or their affiliates have provided investment banking and financial advisory services for us from time to time for which they have received customary fees and reimbursements of expenses and may in the future provide additional services. In connection with Regal Cinemas, Inc.'s plan of reorganization, Lehman Brothers Inc. acted as sole advisor, sole lead arranger and sole book manager, Credit Suisse First Boston Corporation acted as syndication agent and

108

Lehman Commercial Paper Inc., an affiliate of Lehman Brothers Inc. acted as administrative agent under Regal Cinemas' $370.0 million senior credit facility and each received customary fees in connection therewith. Credit Suisse First Boston Corporation and Lehman Brothers Inc. were initial purchasers of Regal Cinemas' January 29, 2002 offering of $200,000,000 of its 9³/8% senior subordinated notes due 2012 and Credit Suisse First Boston Corporation was initial purchaser of Regal Cinemas' April 17, 2002 senior subordinated notes due 2012. In addition, Credit Suisse First Boston Corporation and an affiliate of Salomon Smith Barney Inc. are lenders under United Artists' term credit agreement and will receive $8.7 million and $8.8 million, respectively, of the net proceeds of this offering.

In connection with the offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate covering transactions and penalty bids, in accordance with Regulation M under the Securities Exchange Act of 1934.

•: Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.
•: Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option and/or purchasing shares in the open market.
•: Syndicate covering transactions involve purchases of the Class A common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
•: Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the Class A common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our Class A common stock or preventing or retarding a decline in the market price of the Class A common stock. As a result the price of our Class A common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected on The New York Stock Exchange or otherwise and, if commenced, may be discontinued at any time.

A prospectus in electronic format may be made available on the web sites maintained by one or more of the underwriters, or selling group members, if any, participating in this offering. The representatives may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions on the same basis as other allocations.

109

NOTICE TO CANADIAN RESIDENTS

Resale Restrictions

The distribution of the Class A common stock in Canada is being made only on a private placement basis exempt from the requirement that we prepare and file a prospectus with the securities regulatory authorities in each province where trades of Class A common stock are made. Any resale of the Class A common stock in Canada must be made under applicable securities laws which will vary depending on the relevant jurisdiction, and which may require resales to be made under available statutory exemptions or under a discretionary exemption granted by the applicable Canadian securities regulatory authority. Purchasers are advised to seek legal advice prior to any resale of the Class A common stock.

Representations of Purchasers

By purchasing Class A common stock in Canada and accepting a purchase confirmation a purchaser is representing to us, and the dealer from whom the purchase confirmation is received that:

•: the purchaser is entitled under applicable provincial securities laws to purchase the Class A common stock without the benefit of a prospectus qualified under those securities laws,
•: where required by law, that the purchaser is purchasing as principal and not as agent, and
•: the purchaser has reviewed the text above under Resale Restrictions.

Rights of Action—Ontario Purchasers Only

Under Ontario securities legislation, a purchaser who purchases a security offered by this prospectus during the period of distribution will have a statutory right of action for damages, or while still the owner of the shares, for rescission against us in the event that this prospectus contains a misrepresentation. A purchaser will be deemed to have relied on the misrepresentation. The right of action for damages is exercisable not later than the earlier of 180 days from the date the purchaser first had knowledge of the facts giving rise to the cause of action and three years from the date on which payment is made for the shares. The right of action for rescission is exercisable not later than 180 days from the date on which payment is made for the shares. If a purchaser elects to exercise the right of action for rescission, the purchaser will have no right of action for damages against us. In no case will the amount recoverable in any action exceed the price at which the shares were offered to the purchaser and if the purchaser is shown to have purchased the securities with knowledge of the misrepresentation, we will have no liability. In the case of an action for damages, we will not be liable for all or any portion of the damages that are proven to not represent the depreciation in value of the shares as a result of the misrepresentation relied upon. These rights are in addition to, and without derogation from, any other rights or remedies available at law to an Ontario purchaser. The foregoing is a summary of the rights available to an Ontario purchaser. Ontario purchasers should refer to the complete text of the relevant statutory provisions.

Enforcement of Legal Rights

All of our directors and officers as well as the experts named herein may be located outside of Canada and, as a result, it may not be possible for Canadian purchasers to effect service of process within Canada upon us or those persons. All or a substantial portion of our assets and the assets of those persons may be located outside of Canada and, as a result, it may not be possible to satisfy a judgment against us or those persons in Canada or to enforce a judgment obtained in Canadian courts against us or those persons outside of Canada.

Taxation and Eligibility for Investment

Canadian purchasers of Class A common stock should consult their own legal and tax advisors with respect to the tax consequences of an investment in the Class A common stock in their particular

110

circumstances and about the eligibility of the Class A common stock for investment by the purchaser under relevant Canadian legislation.

LEGAL MATTERS

The validity of the shares of Class A common stock offered in this prospectus will be passed upon for us by Hogan & Hartson L.L.P., Denver, Colorado. Certain legal matters relating to the sale of Class A common stock in this offering will be passed upon for the underwriters by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California.

EXPERTS

The consolidated balance sheet of Regal Entertainment Group (a combination of certain theatre assets, as defined in note 1 to the financial statements) as of January 3, 2002 and the related consolidated statement of operations and comprehensive earnings, stockholder's equity and cash flow for the period from March 2, 2001 to January 3, 2002, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent certified public accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

The consolidated financial statements of Regal Cinemas, Inc. as of December 27, 2001 and December 28, 2000, and for each of the three years in the period ended December 27, 2001, included in this prospectus have been audited by Deloitte & Touche LLP, independent auditors, as indicated in their report appearing herein (which report expresses an unqualified opinion and includes an explanatory paragraph referring to Regal Cinemas, Inc.'s voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code and subsequent acquisition), and have been so included in reliance upon the report of such firm given their authority as experts in accounting and auditing.

The consolidated financial statements of United Artists Theatre Company (Reorganized Company or Successor) as of January 3, 2002 and of United Artists Theatre Company (Predecessor Company or Predecessor) as of December 28, 2000 and the related consolidated statement of operations and comprehensive income, stockholders' equity and cash flow for the period from March 2, 2001 to January 3, 2002 (successor period) and the nine weeks ended March 1, 2001 and the year ended December 28, 2000, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent certified public accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

The report of KPMG LLP, dated February 8, 2002, contains an explanatory paragraph that states that effective March 1, 2001, United Artists Theatre Company emerged from protection under Chapter 11 of the U.S. Bankruptcy Code pursuant to a reorganization plan, which was confirmed by the bankruptcy court on January 22, 2001. In accordance with AICPA Statement of Position 90-7, the Company adopted fresh start reporting whereby its assets, liabilities and new capital structure were adjusted to reflect estimated fair value as of March 1, 2001. As a result, the consolidated financial statements for the period subsequent to March 1, 2001 reflect the Reorganized Company's new basis of accounting and are not comparable to the Predecessor Company's pre-reorganization consolidated financial statements.

The consolidated financial statements of United Artists Theatre Company for the fiscal year ended December 30, 1999, included in this prospectus and elsewhere in the registration statement to the extent and for the period indicated in their report have been audited by Arthur Andersen LLP, independent public accountants, and are included herein in reliance upon the authority of said firm as experts in accounting and auditing in giving said report.

The consolidated financial statements of Edwards Theatres, Inc. as of December 27, 2001 and December 26, 2000 and for each of the years in the three-year period ended December 27, 2001, have been included herein and in the registration statement in reliance upon the report of KPMG LLP, independent accountants, appearing elsewhere herein, and upon the authority of said firm as experts in accounting and auditing.

111

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1, including amendments to it, relating to the Class A common stock offered by us. This prospectus does not contain all of the information in the registration statement and its exhibits and schedules. For further information with respect to our company and our Class A common stock, you should review the registration statement and its exhibits and schedules. You may inspect a copy of the registration statement and the exhibits and schedules to the registration statement without charge at the SEC's principal office in Washington, D.C. You may obtain copies of all or any part of the registration statement from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of fees prescribed by the SEC. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains a Web site that contains reports, proxy and information statements and other information regarding companies that file electronically with the SEC. The address of the SEC's Web site is www.sec.gov.

We intend to furnish our stockholders with annual reports containing audited financial statements certified by our independent auditors.

112

REGAL ENTERTAINMENT GROUP

INDEX TO FINANCIAL STATEMENTS

REGAL ENTERTAINMENT GROUP
	Report of KPMG LLP, Independent Auditors	F-2
	Combined Balance Sheet	F-3
	Combined Statement of Operations	F-4
	Combined Statement of Parent's Investment	F-5
	Combined Statement of Cash Flows	F-6
	Notes to Combined Financial Statements	F-7
REGAL CINEMAS, INC.
	Report of Deloitte & Touche LLP, Independent Auditors	F-24
	Consolidated Balance Sheets at December 27, 2001 and December 28, 2000	F-25
	Consolidated Statements of Operations for the years ended December 27, 2001,
	December 28, 2000 and December 30, 1999	F-26
	Consolidated Statements of Shareholders' Equity (Deficit) for the years ended
	December 27, 2001, December 28, 2000 and December 30, 1999	F-27
	Consolidated Statements of Cash Flows for the years ended December 27, 2001,
	December 28, 2000 and December 30, 1999	F-28
	Notes to Consolidated Financial Statements	F-29
UNITED ARTISTS THEATRE COMPANY
	Report of KPMG LLP, Independent Auditors	F-50
	Report of Arthur Andersen LLP, Independent Auditors	F-51
	Consolidated Balance Sheets	F-52
	Consolidated Statements of Operations	F-53
	Consolidated Statement of Stockholders' Equity (Deficit)	F-54
	Consolidated Statements of Cash Flows	F-55
	Notes to Consolidated Financial Statements	F-56
EDWARDS THEATRES, INC.
	Report of KPMG LLP, Independent Auditors	F-74
	Balance Sheets	F-75
	Statement of Operations and Comprehensive Loss	F-76
	Statement of Stockholders' Equity	F-77
	Statement of Cash Flows	F-78
	Notes to Financial Statements	F-79

F-1

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholder
Anschutz Company:

We have audited the accompanying combined balance sheets of Regal Entertainment Group (a combination of certain theatre interests of Anschutz, see note 1) as of January 3, 2002, and the related combined statement of operations, parent's investment, and cash flows for the periods under common control then ended. These combined financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Regal Entertainment Group (a combination of certain theatre interests of Anschutz, see note 1) as of January 3, 2002, and the results of its operations and its cash flows for the periods under common control then ended, in conformity with accounting principles generally accepted in the United States of America.

/s/ KPMG LLP

Denver, Colorado
March 8, 2002

F-2

REGAL ENTERTAINMENT GROUP

(A COMBINATION OF CERTAIN THEATRE INTERESTS OF ANSCHUTZ, SEE NOTE 1)

Combined Balance Sheet

January 3, 2002

(In Thousands)

ASSETS
CURRENT ASSETS
	Cash and cash equivalents	$	68,000
	Restricted cash		28,100
	Trade receivables, net		1,200
	Other receivables		8,400
	Inventory		1,000
	Prepaid expenses and other current assets		26,000

TOTAL CURRENT ASSETS			132,700

INVESTMENTS AND OTHER ASSETS
	Investment in Regal Cinemas, Inc.		292,700
	Intangible assets, net		136,200
	Other noncurrent assets, net		8,300

TOTAL INVESTMENTS AND OTHER ASSETS			437,200

PROPERTY AND EQUIPMENT, net			552,800

TOTAL ASSETS		$	1,122,700

LIABILITIES AND PARENT'S INVESTMENT
CURRENT LIABILITIES
	Accounts payable	$	76,400
	Accrued and other liabilities		45,000
	Other current liabilities		500
	Bankruptcy related liabilities and claims		43,900
	Deferred revenue		15,000
	Current portion of long-term debt		15,600

TOTAL CURRENT LIABILITIES			196,400

LONG-TERM DEBT			423,300

OTHER LIABILITIES
	Deferred lease obligations		17,300
	Deferred income taxes		3,800
	Other noncurrent liabilities		15,300

TOTAL OTHER LIABILITIES			36,400

TOTAL LIABILITIES			656,100

MINORITY INTEREST OF SUBSIDIARIES			36,600

MANDATORY REDEEMABLE PREFERRED STOCK			47,000

PARENT'S INVESTMENT:
	Contributed capital		378,100
	Retained earnings		4,900

TOTAL PARENT'S INVESTMENT			383,000

COMMITMENTS AND CONTINGENCIES
TOTAL LIABILITIES AND PARENT'S INVESTMENT		$	1,122,700

(SEE NOTES TO COMBINED FINANCIAL STATEMENTS)

F-3

REGAL ENTERTAINMENT GROUP

(A COMBINATION OF CERTAIN THEATRE INTERESTS OF ANSCHUTZ, SEE NOTE 1)

Combined Statement of Operations

For Periods Under Common Control (note 1)

(In Thousands)

OPERATING REVENUE
	Admissions	$	382,500
	Concession sales		153,300
	Other		21,100

TOTAL OPERATING REVENUE			556,900

OPERATING EXPENSES
	Film rental and advertising expenses		212,900
	Concession costs		18,100
	Other theatre operating expenses		212,700
	Sale and leaseback rentals		14,800
	General and administrative		21,400
	Depreciation and amortization		42,600
	Asset impairments		2,900

TOTAL OPERATING EXPENSES			525,400

INCOME FROM OPERATIONS			31,500
OTHER INCOME (EXPENSE)
	Interest and other income		400
	Interest expense		(21,800	)
	Gain on sale of property and equipment		2,600
	Minority interests in earnings of consolidated subsidiaries		400
	Other, net		(4,600	)

TOTAL OTHER EXPENSE, NET			(23,000	)

INCOME BEFORE INCOME TAX EXPENSE			8,500
INCOME TAX EXPENSE			(3,600	)

NET INCOME		$	4,900

(SEE NOTES TO COMBINED FINANCIAL STATEMENTS)

F-4

REGAL ENTERTAINMENT GROUP

(A COMBINATION OF CERTAIN THEATRE INTERESTS OF ANSCHUTZ, SEE NOTE 1)

Combined Statement of Parent's Investment

For Periods Under Common Control (note 1)

(In Thousands)

Contributed capital	$	378,100
Net income		4,900

Balance at January 3, 2002	$	383,000

(SEE NOTES TO COMBINED FINANCIAL STATEMENTS)

F-5

REGAL ENTERTAINMENT GROUP

(A COMBINATION OF CERTAIN THEATRE INTERESTS OF ANSCHUTZ, SEE NOTE 1)

Combined Statement of Cash Flows

For Periods Under Common Control (note 1)

(In Thousands)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income			$	4,900
Adjustments to reconcile net income to net cash provided by operating activities:
	Effect of leases with escalating minimum annual rentals			3,100
	Depreciation and amortization			42,600
	Provision for asset impairments			2,900
	Reorganization items			800
	Gain on disposition of assets, net			(2,600	)
	Minority interests in earnings of consolidated subsidiaries			(400	)
	Deferred income taxes			(2,400	)
	Changes in operational working capital, excluding cash and debt:
		Receivables		(3,000	)
		Prepaid expenses and inventory		(1,900	)
		Other assets		(800	)
		Accounts payable		11,100
		Accrued and other liabilities and deferred revenue		7,300

NET CASH PROVIDED BY OPERATING ACTIVITIES				61,600

CASH FLOWS FROM INVESTING ACTIVITIES
	Capital expenditures			(20,800	)
	Proceeds from disposition of assets, net			19,500
	Decrease in restricted cash			8,700
	Other, net			2,000

NET CASH PROVIDED BY INVESTING ACTIVITIES				9,400

CASH FLOWS FROM FINANCING ACTIVITIES
	Cash of subsidiaries at acquisition date			36,200
	Debt borrowings			68,000
	Debt repayments			(87,200	)
	Borrowings under capital leases			1,600
	Interest on subordinated debt			300
	Decrease in cash overdraft			(1,500	)
	Other, net			4,100

NET CASH PROVIDED BY FINANCING ACTIVITIES				21,500

NET CASH USED IN REORGANIZATION				(24,500	)

NET INCREASE IN CASH AND CASH EQUIVALENTS				68,000
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD				—

CASH AND CASH EQUIVALENTS AT END OF PERIOD			$	68,000

SUPPLEMENTAL CASH FLOW INFORMATION
	Cash paid for interest		$	6,100

	Cash paid for income tax		$	100

(SEE NOTES TO COMBINED FINANCIAL STATEMENTS)

F-6

REGAL ENTERTAINMENT GROUP

(A COMBINATION OF CERTAIN THEATRE INTERESTS OF ANSCHUTZ, SEE NOTE 1)

Notes to Combined Financial Statements

January 3, 2002

(1) THE COMPANY AND BASIS OF PRESENTATION

Regal Entertainment Group (the Company) consists of the controlling equity interests in United Artists Theatre Company and its subsidiaries (United Artists), Edwards Theatres, Inc. and its subsidiaries (Edwards) and Regal Cinemas Corporation and its subsidiaries (Regal) owned by The Anschutz Corporation (TAC). These contributions have been recorded in the consolidated financial statements of the Company at the combined historical cost basis of TAC ($378.1 million), which represents its net cost to acquire certain debt of Regal, United Artists and Edwards prior to them filing voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court (the Court). TAC exchanged these debt holdings for controlling equity interests following the emergence from bankruptcy of Regal (which emerged from bankruptcy on January 29, 2002), United Artists and Edwards.

Regal, United Artists and Edwards operate multi-screen motion picture theatres throughout the United States. During 2000 and 2001, United Artists, Edwards and Regal filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the Court (the Chapter 11 Cases), as well as joint plans of reorganization. During 2001, the joint plans of reorganization, as amended, for United Artists and Edwards (the UA Plan and the Edwards Plan, respectively), were approved by the Court, and were declared effective on March 1, 2001 (the UA Effective Date) for United Artists and September 29, 2001 (the Edwards Effective Date) for Edwards. The Court approved Regal's joint plan of reorganization in 2002 and the effective date was declared to be January 29, 2002 (the Regal Effective Date). At January 3, 2002, the Company's investment in Regal has been accounted for as a cost investment as described in note 6.

The combined statement of operations and combined statement of cash flows include the activities of United Artists from the UA Effective Date through January 3, 2002 and the activities of Edwards from the Edwards Effective Date through December 27, 2001 (Periods Under Common Control). Commencing in 2002, the Company will adopt the fiscal year end of Regal, which is the last Thursday of each calendar year. Regal's 2001 fiscal year ended on December 27, 2001. For the period from December 28, 2001 through January 3, 2002, UA recorded revenue of approximately $17.8 million and net income of approximately $2.5 million.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Combination

The combined financial statements include the accounts of Regal Entertainment Group (as defined in Note 1), including their majority owned and controlled subsidiaries of United Artists and Edwards. All significant intercompany accounts and transactions have been eliminated in consolidation. The portion of United Artists and Edwards equity relating to shares not owned by the Company and the related earnings or losses are included in minority interest.

Cash and Cash Equivalents

Investments with initial maturities of three months or less are classified as cash equivalents.

F-7

Restricted Cash

Edwards established a $35.0 million cash reserve, which was funded on the Edwards Effective Date for the payment of allowed Class 5A claims, which thereafter will be the lesser of (i) $20 million; or (ii) the sum of the unpaid: (a) disputed Class 5A claims that have elected the cash option; and (b) allowed Class 5A claims that have elected the cash option. The restricted cash has been placed in a segregated account in which the holders of the allowed Class 5A claims that have elected the cash option have a first priority security interest. The restricted cash is classified as a current asset as the related claims are classified as current liabilities.

In addition, Edwards has deposited an additional $1.9 million into a separate segregated account as part of a settlement agreement with one Class 5A claim holder.

Financial Instruments

The carrying amounts of cash, cash equivalents, accounts receivable, inventory, prepaid expenses, accounts payable and accrued liabilities approximate fair value due to their short-term maturities. The fair value of long-term debt is assumed to approximate its carrying value, except as discussed in Note 8.

Inventory

Inventory is accounted for on a first in, first out basis at the lower of cost or replacement value.

Investments

Investments in affiliated entities in which the Company generally has between a 20% and 50% ownership interest and has the ability to exercise significant influence are accounted for by the equity method. Under the equity method, the investment is initially recorded at cost and subsequently adjusted to recognize dividends received and the Company's share of the net income or losses of the affiliates as they occur. Investments in which the Company's ownership is less than 20% are accounted for using the cost method. Under the cost method, the investments are recorded at cost and any dividends received are recorded as income.

Property and Equipment

Property and equipment, net at January 3, 2002, consists of the following components (in thousands).

Land	$	60,000
Theatre buildings, equipment and other		525,600

		585,600
Less: accumulated depreciation and amortization		(32,800	)

	$	552,800

F-8

Property and equipment are stated at cost and include acquisition costs allocated to the tangible assets acquired. Construction costs, including applicable direct overhead and interest, are capitalized as incurred. Repairs and maintenance expenses are charged to operating expenses as incurred.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from three to forty years. Leasehold improvements are amortized over the shorter of the terms of the leases, including certain renewal periods, or the estimated useful lives of the assets. The costs associated with new theatre construction are depreciated over the completed theatres' estimated useful life, beginning when the theatres are placed into service.

Impairment of Long-Lived Assets

Long-lived assets are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. This review consists of a comparison of the carrying value of the asset with the asset's expected future undiscounted cash flows without interest costs. Estimates of expected future cash flows are to represent management's best estimate based on reasonable and supportable assumptions and projections. If the expected future cash flows exceed the carrying value of the asset, no impairment is recognized. If the carrying value of the asset exceeds the expected future cash flows, an impairment exists and is measured by the excess of the carrying value over the estimated fair value of the asset. Any impairment provisions are permanent and may not be restored in the future.

Intangible Assets

Intangible assets consist of theatre lease acquisition costs, which are amortized on a straight-line basis over the terms of the leases including certain renewal periods (weighted average life of approximately 19 years). Intangible assets and related accumulated amortization at January 3, 2002 are as follows (in thousands):

Theatre lease acquisition costs	$	145,900
Accumulated amortization		(9,700	)

	$	136,200

Other Assets

Other assets include deferred loan costs, long-term receivables and prepaid rent. Deferred loan costs are amortized over the terms of the loan agreements. Deferred loan cost amortization expense is

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included in interest expense. Other assets include the following components at January 3, 2002 (in thousands):

Deferred loan costs	$	2,100
Other long-term receivables		800
Prepaid rent		500
Other		5,300

		8,700
Accumulated amortization		(400	)

	$	8,300

Revenue Recognition

Revenues are generated principally through admissions and concessions sales with proceeds received in cash at the point of sale. Revenue from advance ticket sales is recorded as deferred revenue and recognized when the tickets are redeemed. Unredeemed advance ticket sales are recognized when it is determined that redemption is unlikely.

Operating Costs and Expenses

Film rental and advertising expenses include the costs of renting films and the costs of co-op and directory advertising. Direct concession costs include product costs and concession promotional expenses. Film advertising and concession promotional expenses are expensed as incurred. Other operating expenses include common facility costs such as employee costs, theatre rental and utilities, which are common to both ticket sales and concession operations. Rental expense for operating leases which provide for escalating minimum annual rentals during the term of the lease, are accounted for on a straight-line basis over the terms of the leases.

Income Taxes

Income taxes are accounted for using the asset and liability method whereby deferred tax assets and liabilities are recognized for loss carryforwards and the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Such deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those loss carryforwards and temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date of such change. Deferred tax assets are reduced by a valuation allowance, if necessary, equal to the portion of such assets that are not expected to be realized.

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Accounting Estimates

Preparation of financial statements in conformity with generally accepted accounting principles requires that management make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the balance sheet date as well as the reported amounts of revenues and expenses during the reporting period. The actual results could differ significantly from those estimates. Film cost expense and related film cost payable are based on management's estimate of the ultimate settlement of the film costs with the distributors. These estimates are adjusted to the final film settlement in the period that the settlement with the distributors occurs. Actual film costs and film payable could differ from those estimates.

Segments

The Company manages its business based on one reportable segment.

Stock-Based Compensation

United Artists accounts for its stock option plan in accordance with the provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, 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. Under Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation, entities are permitted to recognize as expense the fair value of all stock-based awards on the date of grant over the vesting period. Alternatively, SFAS No. 123 also allows entities to continue to apply the provisions of APB Opinion No. 25 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. United Artists has elected to continue to apply the provisions of APB Opinion No. 25 and provide the pro forma disclosures required by SFAS No. 123.

Reporting Period

Reporting periods are based on a calendar that coincides with film playweeks and other public reporting theatre operators (January 3, 2002 for United Artists and December 27, 2001 for Edwards). This presentation is used to more accurately reflect the Company's natural business cycle.

New Accounting Pronouncements

In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, Business Combinations, which requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and eliminates the pooling-of-interests method of accounting. SFAS No. 141 is not expected to have an impact on the Company's financial position or results of operations.

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In June 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible Assets", which United Artists will adopt on January 4, 2002, being the first day of our fiscal 2002 year. SFAS No. 142 requires that goodwill and other intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually. The adoption of this standard will result in United Artists no longer amortizing the reorganization value in excess of identified assets and other intangible assets. This change, if adopted as of March 1, 2001, would have resulted in a reduction of amortization expense of $9.7 million and an increase in income (loss) before income tax expense, discontinued operations and extraordinary items of $9.7 million for the forty-four week period ended January 3, 2002.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. This Statement supersedes FASB Statement No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of, and the accounting and reporting provisions of APB Opinion No. 30, Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual or Infrequently Occurring Events and Transactions, for the disposal of a segment of a business. The provisions of the Statement are effective for fiscal years beginning after December 15, 2001.

(3) UNITED ARTISTS CHAPTER 11 PROCEEDINGS

On September 5, 2000 United Artists filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the "Chapter 11 Cases"), as well as a joint plan of reorganization. On January 22, 2001 the joint plan of reorganization, as amended, (the "Plan"), was approved by the Court, and the Debtors declared the Plan to be effective on March 1, 2001 (the "Effective Date).

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

The implementation of the UA Plan also resulted in, among other things, the satisfaction or disposition of various types of claims against the United Artists, the assumption and rejection of certain leases and agreements, and the establishment of a new board of directors following the UA Effective Date, along with new employment and other arrangements with certain members of management.

As a consequence of the UA Plan, on March 2, 2001, United Artists' reorganized capital structure consisted of approximately $252.1 million of debt under the Restructured Bank Credit Facility, $57 million of preferred stock and $39.1 million in common equity. TAC, affiliates of which were

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pre-petition senior lenders, converted 100% of its senior debt into a combination of convertible preferred stock, common stock and warrants ($10.00 exercise price) to purchase common stock of United Artists which, in aggregate, represents approximately 54% of the fully diluted common equity of the United Artists. Other senior lenders under the Pre-Petition Credit Facility received common stock in United Artists representing approximately 29% of the fully diluted common stock and subordinated lenders received common stock warrants with an exercise price of $10.00 per share representing approximately 7% of the fully diluted common stock, with the remaining fully diluted common stock reserved for management stock options.

(4) EDWARDS CHAPTER 11 PROCEEDINGS

On August 23, 2000, Edwards Theatres Circuit Affiliated Group (Debtors, as of September 28, 2001) filed a voluntary petition for relief under Chapter 11, Title 11 of the United States Code in the United States Bankruptcy Court in the Central District of California, Santa Ana Division (the Bankruptcy Court).

On May 24, 2001 the Debtors filed a Plan of Reorganization and related disclosure statement, as subsequently amended on July 23, 2001 (the Plan). On September 24, 2001 (the Confirmation Date), the Bankruptcy Court confirmed the Second Amended Plan of Reorganization. On September 28, 2001 all conditions required for the effectiveness of the Plan were met, and the Plan became effective (the Effective Date).

On the Effective Date, the Debtors restructured their corporate organization to effect the following transactions: (a) the creation of Edwards and (b) the merger of the Debtors with and into Edwards which is the surviving corporation.

The underlying objective of the Plan is to provide a vehicle for the recapitalization of the Debtors and payment of allowed claims. The Plan provides for, among other things:

•: Substantive consolidation of the Debtors into Edwards;
•: Dissolution of the merging debtors and vesting of all of the Debtors' assets and liabilities into Edwards, whose common stock is 51% owned by Anschutz and another investor and 49% owned by the Debtors shareholders;
•: An equity infusion from Anschutz and another investor of approximately $56.0 million ($44.8 million from Anschutz), which consisted of $41.4 million in cash and $14.6 million in bank debt held and accrued interest by Anschutz and another investor to be converted into redeemable preferred and common stock of Edwards;
•: Restructuring of the $250 million senior secured credit facility. The senior outstanding secured debt of $213.5 million as of December 26, 2000 was reduced by a cash payment of approximately $9.5 million. The remaining $204 million was restructured into (i) $180 million Restructured Term Credit Agreement, (ii) $10 million senior unsecured subordinated note held by Anschutz and another investor, and (iii) 16,000 shares of Series A preferred stock and approximately 146,000 shares of Class A common stock for the remaining $14.0 million;

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•: Payment in full in cash on the Edwards Effective Date of all allowed administrative claims, allowed administrative tax claims, allowed priority tax claims, and allowed other priority claims;
•: Payment of allowed Class 5A claims. The Plan entitles the holders of allowed Class 5A claims to receive either (i) a cash payment equal to 90% of the allowed claim or (ii) 100% of the allowed Class 5A claim in an unsecured note, bearing interest at 9%, with a seven year term, requiring semi-annual principal and interest payments beginning March 28, 2002;
•: Merger of CAMCO, which is a non-debtor entity owned by the Debtor shareholders, into Edwards. On the Effective Date, CAMCO was merged with and Edwards. Each CAMCO shareholder received their pro-rata share of $6.0 million.

Since Edwards's reorganization value immediately before the confirmation date was greater than the total of all postpetition liabilities and allowed prepetition claims, Edwards did not meet the criteria set forth in AICPA Statement of Position 90-7, Financial Reporting by Entities in Reorganization (SOP 90-7) required to qualify for fresh start reporting. The reorganization value was determined by an independent valuation obtained by management using discounted projected cash flows and economic and industry information relevant to the operations of Edwards. The estimated reorganization value of Edwards as of September 27, 2001 was approximately $388 million.

(5) PRO FORMA COMBINED RESULTS OF OPERATIONS

If the contributions of the United Artists and Edwards equity interests had been made at the beginning of fiscal 2001 and the effects of the bankruptcy reorganization (including closed theatres and debt restructurings), the revenue and net income of the Regal Entertainment Group would have been approximately $917.5 million and $13.8 million. Comparable amounts for fiscal 2000 are not readily available. These proforma amounts are not necessarily indicative of those amounts that would have occurred had United Artists and Edwards actually been operated as a consolidated entity.

(6) INVESTMENT IN REGAL CINEMAS, INC.

Anschutz acquired debt of Regal in 2001 for a net acquisition cost of $292.7 million, which was converted to 60% of the common stock interests in Regal on January 29, 2002. Regal operates multi-screen motion picture theatres principally throughout the eastern and northwestern United States.

(7) BANKRUPTCY RELATED LIABILITIES AND CLAIMS

At December 27, 2001 remaining claims related to the bankruptcy proceedings are recorded in Bankruptcy Related Liabilities and Claims. The accrued amounts include Edwards's estimated costs to

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settle disputed claims. These liabilities were transferred from liabilities subject to compromise as of the Effective Date and are summarized as follows as of December 27, 2001 (in thousands):

Theatre lease rejection and contractual claims	$	43,100
Other—tax claims		800

	$	43,900

(8) LONG-TERM DEBT

Long-term debt at January 3, 2002 is presented below (in thousands).

(A)	Term Credit Facility, interest at 5.93% at January 3, 2002	$	240,600
(B)	Revolving Credit Facility, interest at 4.93% at January 3, 2002		—
(C)	Other		8,000
(D)	Senior Secured Term Loan, interest at 6.28% at December 27, 2001		180,000
(E)	Senior Unsecured Subordinated Notes, interest at 13% at December 27, 2001		10,300

			438,900
	Less current portion		(15,600	)

	Total long-term debt	$	423,300

(A): The United Artists Term Credit Facility (Term Facility) represents amounts owed to all lenders. Borrowers under the Term Facility include United Artists and certain of its subsidiaries. The Term Facility provides for interest to be accrued at varying rates, with interest payable monthly. Principal payments under the Term Facility are $.6 million quarterly from June 30, 2001 through December 31, 2003 and $6.3 million each quarter during 2004, with the remaining principal balance due on February 2, 2005. Additional principal repayments may also be required as a result of asset sales or the issuance of certain debt or equity securities.
(B): The United Artists Revolving Credit Facility (the Revolver) is a $35 million revolving credit facility with a sub-limit of $10 million related to the issuance of letters of credit. There were $.8 million of outstanding letters of credit at January 3, 2002. Outstanding borrowings bear interest at varying rates, with interest payable monthly. Such borrowings are secured by the same collateral as the Term Facility and are due in full on August 2, 2004. The commitment may be reduced as the result of issuance of certain debt or equity securities. Borrowers under the Revolver include United Artists and certain of its subsidiaries.
(C): Included in other debt are $2.7 million of equipment capital lease obligations.

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(D): The Edwards senior secured term loan is secured by substantially all assets of Edwards and bears interest at Libor plus a margin, as defined (6.28% at December 27, 2001). Interest is payable monthly and principal payments are due in various amounts ranging from $2.1 million to $9.1 million beginning June 27, 2002 and continuing quarterly through March 31, 2005, with a final principal payment of $126.7 million due on the maturity date of June 30, 2005. Mandatory prepayments are required based on certain events such as receipt of cash proceeds related to dispositions of assets, refinancing of indebtedness or when allowed claims under the Plan elect or receive the unsecured note option. The senior secured term loan agreement contains various affirmative, restrictive and financial covenants, including various financial ratios and relationships. In addition to these covenants, there are also certain events, as defined, that would constitute an event of default including, but not limited to, cross-defaults, change in control, or conditions that could be expected to have a material adverse effect on Edwards, as defined. Edwards was in compliance with the covenants at December 27, 2001 (see note 14).
(E): The Edwards Senior Unsecured Subordinated Notes are payable to Anschutz ($8 million) and another shareholder. The notes bear interest at 11% - 13% per year, as defined, with principal and interest due on September 29, 2005.

The Term Credit Facility and the Revolving Credit Facility are secured by, among other things, the capital stock of certain subsidiaries of United Artists, mortgages on certain of United Artists and its subsidiaries properties, and a security interest in substantially all of the assets of United Artists and its subsidiaries. All such security interests held by the lenders under the Term Credit Facility are subordinate to the security interests held by the lenders under the Revolver. The Senior Secured Term Loan is secured by substantially all of the assets of Edwards.

The Term Credit Facility, the Revolving Credit Facility and the Senior Secured Term Loan contain certain provisions that require United Artists and Edwards to maintain certain financial ratios and places limitations on, among other things, capital expenditures and additional indebtedness.

The scheduled maturities of the long-term debt, for the next five years and thereafter, are presented below (in thousands).

Fiscal year end:
	2002	$	15,600
	2003		19,700
	2004		45,900
	2005		352,200
	Thereafter		5,500

	Total	$	438,900

Based on dealer quotes at January 3, 2002, the fair value of the Term Credit Facility is $237 million. The carrying amount of the Term Credit Facility is $240.6 million at January 3, 2002. The carrying amount of the Senior Secured Term Loan approximates fair value since the interest rate resets

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periodically. The carrying amount of the Senior Unsecured Subordinated Notes approximate fair value due to their recent origination

(9) REDEEMABLE PREFERRED STOCK

Edwards has authorized and issued 56,000 shares (44,000 shares to Anschutz) of $0.001 par value, mandatory redeemable Series A preferred stock and 15,000 shares of Edwards' mandatory redeemable Series B preferred stock, $0.001 par value, to three other shareholders. Additionally, 929,000 shares of undesignated preferred stock has been authorized, none of which is issued or outstanding at December 27, 2001.

Dividends accrue cumulatively at 12% and 8% per year for the Series A and B preferred stock, respectively. The Series A preferred stock has a senior ranking to the Series B preferred stock, with respect to redemption on the mandatory redemption date of October 1, 2008, at a price equal to the liquidation preference ($1,000 per share) plus a redemption premium. The redemption premium is paid in shares of common stock, as defined. Edwards can redeem the preferred stock at any time that it can legally do so by paying the liquidation preference plus a liquidation premium, as defined. The preferred stock has priority over any junior securities. The preferred stock was recorded based on the discounted cash flows of the redeemable preferred stock. The preferred stock will accrete using the interest method through retained earnings to its total aggregate redemption value represented as its liquidation preference plus accumulated and unpaid dividends and will be reflected as a charge against earnings available to common shareholders. If the preferred stock is redeemed before it has accreted to its liquidation value, the difference (approximately $24 million at January 3, 2002) will be recognized as a charge in that period. The Series A and B preferred stockholders each have four votes per share in all matters voted on by common shareholders.

(10) EMPLOYEE BENEFITS PLAN

United Artist's 401(k) Savings Plan (the Savings Plan) provides that employees may contribute up to 20% of their compensation, subject to Internal Revenue Service limitations, to the Savings Plan. Employee contributions are invested in various investment funds based upon elections made by the employee. Depending on the amount of each employees' level of contribution, the Savings Plan currently matches up to 4% of their compensation. Contributions to the Savings Plan were approximately $.6 million for the Periods Under Common Control.

(11) STOCK OPTIONS

United Artists has adopted a stock option plan, whereby the Company's Board of Directors may issue common shares and grant incentive stock options to employees, directors and consultants. The plan authorizes common stock issuances and grants of options to purchase up to 2,746,666 shares of common stock. The options generally vest over 60 months and expire upon the earlier of three years after termination of employment or ten years from the date of grant. At January 3, 2002, there were 715,966 shares available for grant under the plan.

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(11) STOCK OPTIONS (Continued)

The weighted average fair value of options on the date of grant during 2001 was $2.21 using the Black-Scholes option-pricing model with the following assumptions: no expected dividends or volatility, risk-free interest rate of approximately 5.4% and a term to maturity of 10 years. The remaining weighted average contractual life of options outstanding at January 3, 2002 was 9.17 years, with exercise prices ranging from $5.00 to $14.50.

United Artists utilizes APB Opinion No. 25 to account for its employee stock options. If the Company determined compensation costs based on the fair value of the options at the grant date under SFAS No. 123, the Company's net earnings would have been approximately $4,300 for the Periods Under Common Control.

Option activity during the Periods Under Common Control, consisted of the following:

	Number of Options	Weighted Average Exercise Price		Options Exercisable
Granted pursuant to reorganization	2,030,700	$	6.05	—

Balance at January 3, 2002	2,030,700	$	6.05	192,270

The following table summarizes information about stock options outstanding at January 3, 2002.

Range of Exercise Price		Number of Options Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Options Exercisable as of January 3, 2002	Weighted Average Exercise Price
$	5.00	1,703,222	9.17	$	5.00	170,322	$	5.00
$	10.00	219,478	9.17		10.00	21,948		10.00
$	14.50	108,000	9.17		14.50	—		—

		2,030,700	9.17	$	6.05	192,270	$	5.57

(12) INCOME TAXES

United Artists

The components of income tax expense of United Artists is as follows (amounts in thousands):

Current income taxes:
	State expense	$	600
	Federal expense		5,400

			6,000

Deferred income taxes:
	State expense		(200	)
	Federal expense		(2,200	)

			(2,400	)

Total income tax expense		$	3,600

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Income tax expense differed from the amount computed by applying the U.S. federal income tax rate of 35% to income before income tax expense as a result of the following (amounts in thousands):

Expected tax provision	$	2,300
State tax net of federal benefit		200
Fresh start adjustments		700
Other		400

	$	3,600

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at January 3, 2002 (amounts in thousands):

Deferred tax assets:
	Net operating loss carryforwards		$	33,600
	Intangible and other assets			10,100
	Accrued liabilities			1,100
	Property and equipment			8,300
	Deferred revenue			5,900
	Other			8,300

				67,300
	Less valuation allowance			(66,200	)

	Net deferred tax assets			1,100

Deferred tax liabilities:
	Property and equipment			3,800
	Other			1,100

		Net deferred tax liabilities		4,900

	Total net deferred tax liabilities		$	3,800

At December 28, 2000, United Artists had a net operating loss carryforward for federal income tax purposes of approximately $361.9 million, which will begin to expire in 2007. United Artists' income tax returns for 1998 and 1999 have not been audited. An audit by the IRS of these years could reduce the amount of net operating loss carryforward and/or change the basis of the assets, thereby reducing future deductible amounts. The Company believes any future audit adjustments would not have a material adverse effect on their financial condition or results of operation.

The net operating loss will be reduced, and possibly eliminated, due to the extinguishment of debt in conjunction with the bankruptcy. In addition, any available net operating loss will be limited due to the changes in ownership of United Artists.

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Edwards

The components of the income tax provision for the years ended December 27, 2001 (in thousands):

		2001
Federal:
	Current	$	—
	Deferred		—
State:
	Current		85
	Deferred		—

	Income taxes	$	85

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 27, 2001 are as follows (in thousands):

			2001
Deferred tax assets:
Impairment of long-lived assets				8,837
Deferred lease obligation				6,912
Net operating loss carryforward				5,192
Gain on sale leaseback				2,708
Bankruptcy related liabilities and claims				16,226
Goodwill—for tax purposes				2,360
Other				1,020

		Total gross deferred tax assets		43,255
Valuation allowance				(34,101	)

		Net deferred tax assets		9,154

Deferred tax liabilities:
	Depreciation and amortization			9,154

		Total gross deferred tax liabilities		9,154

		Net deferred tax liabilities	$	—

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The reconciliation of the difference between income taxes computed using the statutory U.S. income tax rate and the provision for income taxes is as follows (in thousands):

	2001
Expected federal income tax benefit	$	(139	)
State taxes		13
Change in valuation allowance		211

	$	85

In determining the possible future realization of deferred tax assets, future taxable income from the following sources are taken into account: (a) the reversal of taxable temporary differences, (b) future operations exclusive of reversing temporary differences and (c) tax planning strategies that, if necessary, would be implemented to accelerate taxable income into years in which net operating losses might otherwise expire. As of December 27, 2001 the valuation allowance against deferred tax assets amounted to $35.6 million. Net operating loss carryforwards at December 27, 2001 are approximately $13.0 million for federal tax purposes, expiring through 2021.

The Tax Reform Act of 1986 imposed substantial restrictions on the utilization of net operating losses in the event of an "ownership change" of a corporation. Accordingly, Edwards Theatres' ability to utilize net operating losses may be limited as a result of such an "ownership change," as defined in the Internal Revenue Code. The net operating loss carryforwards attributable to Edwards Entertainment 2000 before the Recapitalization by Edwards Theatres may be further limited according to these provisions.

(13) COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company conducts a significant portion of its theatre and corporate operations in leased premises. These leases have non-cancelable terms expiring at various dates after January 3, 2002. Many leases have renewal options. Most of the leases provide for contingent rentals based on the revenue results of the theatre and require the payment of taxes, insurance, and other costs applicable to the property. Also, certain leases contain escalating minimum rental provisions that have been accounted for on a straight-line basis over the initial term of the leases.

The Company incurred base and contingent rent expense including the effects of leases with escalating minimum annual rentals of approximately $84.5 million for the Periods Under Common Control.

The Company is party to several sale and leaseback transactions whereby the land and buildings underlying 42 theatres and one corporate office were sold and leased back from unaffiliated third parties.

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Future minimum lease payments under noncancelable operating leases for each of the next five years and thereafter are summarized as follows (amounts in thousands):

Fiscal year end:
	2002	$	114,800
	2003		113,700
	2004		112,900
	2005		111,100
	2006		106,100
	Thereafter		1,139,500

Total minimum payments		$	1,698,100

Claims, Lawsuits and Bankruptcy Proceedings

Upon the filing of the Chapter 11 Cases and petitions, the Bankruptcy Code imposed a stay applicable to all entities of, among other things, the commencement or continuation of judicial, administrative, or other actions or proceedings against United Artists or Edwards that were or could have been commenced before the bankruptcy petition. Prepetition claims that were contingent, unliquidated, or undisputed as of the commencement of the Chapter 11 Cases, may be allowed or disallowed depending on the nature of the claim. The aggregate unsettled claims against Edwards approximate $153 million at December 27, 2001.

The ultimate legal and financial liability of the Company in respect to all claims, lawsuits, and proceedings referred to above cannot be estimated with any certainty. However, the Company has recorded liabilities of approximately $43.9 million at January 3, 2002 for the estimated costs to resolve these outstanding matters. Management believes that no legal proceedings in which it is involved will have a material adverse effect on its financial position, although the resolution in any reporting period of one or more of these matters could have a significant impact on the Company's results of operations for that period. The owners have agreed to contribute $0.90 in cash for each $1.00 of Class 5A claims allowed in excess of $70 million.

ADA Contingency

The Americans with Disabilities Act of 1990 (the "ADA") and certain state statutes, among other things, require that places of public accommodation, including theatres (both existing and newly constructed), be accessible to and that assistive listening devices be available for use by certain patrons with disabilities. With respect to access to theatres, the ADA may require that certain modifications be made to existing theatres to make such theatres accessible to certain theatre patrons and employees who are disabled. The ADA requires that theatres be constructed in such a manner that persons with disabilities have full use of the theatre and its facilities and reasonable access to work stations. The ADA provides for a private right of action and reimbursement of plaintiff's attorneys' fees and expenses under certain circumstances. The Company has established a program to review and evaluate the Company's theatres and to make any changes that may be required by the ADA.

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Noncompete Agreements

Edwards entered into three separate five-year noncompete agreements with three shareholders in connection with the Recapitalization. The present value of the future obligations of $2.7 million is included in other assets and other long term liabilities at December 27, 2001. The liability will be reduced as cash payments are made and the asset will be amortized ratably over the life of the agreements.

Employment Agreement

During 2001, Edwards entered into an employment agreement with a shareholder. The employment agreement provides for an annual base salary of $.3 million and expires in 2006.

Litigation

United Artists and Edwards are subject to other claims and lawsuits arising in the ordinary course of business. In the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

(14) SUBSEQUENT EVENTS

On January 29, 2002, the Company exchanged its investments in Regal debt instruments for a 60% common ownership of Regal. In addition, on January 29, 2002 Regal completed an offering for the issuance of $200 million of 9³/8% senior subordinated notes.

On March 7, 2002, the Company amended its $180 million Restructured Term Credit Agreement which allowed it to change the Company's fiscal year end to December 27, 2001.

On March 8, 2002, the holders of 100% of the common stock in Regal and Edwards and the holders of over 80% of the voting stock of United Artists entered into an agreement to exchange their capital stock of these entities for all of the outstanding capital stock of Regal Entertainment Group. We were formed and are controlled by Anschutz, the controlling equity holder of Regal, United Artists Edwards Theatres. As a result of this exchange transaction, Regal Entertainment Group's financial statements will reflect each theatre company's operations after emergence from bankruptcy and the predecessor cost basis of Anschutz and the fair value of stock of other exchanging parties as of March 8, 2002. It is anticipated that the preferred stock and subordinated debt of Edwards Theatres will be redeemed at their liquidation values.

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INDEPENDENT AUDITORS' REPORT

Board of Directors
Regal Cinemas, Inc.
Knoxville, Tennessee

We have audited the accompanying consolidated balance sheets of Regal Cinemas, Inc. and subsidiaries (debtors-in-possession as of October 11, 2001) (the Company) as of December 27, 2001 and December 28, 2000, and the related consolidated statements of operations, shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 27, 2001. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, such consolidated financial statements present fairly, in all material respects, the consolidated financial position of Regal Cinemas, Inc. and subsidiaries as of December 27, 2001 and December 28, 2000, and the results of its operations and its cash flows for each of the three years in the period ended December 27, 2001 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the Company filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code with the United States Bankruptcy Court for the District of Middle Tennessee on October 11, 2001. The Bankruptcy Court confirmed the plan of reorganization on December 7, 2001 and the plan became effective January 29, 2002, the date the Company emerged from bankruptcy. As described in Note 2, the Company has also been acquired subsequent to its emergence from bankruptcy. No effects of accounting for the reorganization or the acquisition are reflected in the accompanying financial statements.

/s/ DELOITTE & TOUCHE LLP

February 15, 2002
(March 8, 2002 as to Note 2)
Nashville, Tennessee

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REGAL CINEMAS, INC. (DEBTORS-IN-POSSESSION AS OF OCTOBER 11, 2001)

CONSOLIDATED BALANCE SHEETS

DECEMBER 27, 2001 AND DECEMBER 28, 2000

(In Thousands, Except Share Amounts)

			December 27, 2001			December 28, 2000
ASSETS
CURRENT ASSETS:
	Cash and cash equivalents		$	237,688		$	118,834
	Accounts receivable			3,882			1,473
	Reimbursable construction advances			2,234			10,221
	Inventories			3,291			6,092
	Prepaid and other current assets			13,730			22,690
	Assets held for sale			5,328			3,808

		Total current assets		266,153			163,118
PROPERTY AND EQUIPMENT:
	Land			80,571			87,491
	Buildings and leasehold improvements			1,014,319			1,119,677
	Equipment			427,066			453,320
	Construction in progress			1,842			8,195

				1,523,798			1,668,683
	Accumulated depreciation and amortization			(297,261	)		(246,850	)

		Total property and equipment, net		1,226,537			1,421,833
GOODWILL, net of accumulated amortization of $36,679 and $31,080, respectively				336,174			365,227
OTHER ASSETS				41,505			40,950

TOTAL ASSETS			$	1,870,369		$	1,991,128

LIABILITIES AND SHAREHOLDERS' DEFICIT
CURRENT LIABILITIES:
	Current maturities of long-term obligations		$	2,173		$	1,823,683
	Accounts payable			40,215			55,753
	Accrued expenses			42,657			148,559
	Liabilities subject to compromise			183,900			—

		Total current liabilities		268,945			2,027,995
LONG-TERM OBLIGATIONS, less current maturities:
	Long-term debt			3,219			3,709
	Capital lease obligations			1,512			17,790
	Lease financing arrangements			97,821			153,350
OTHER LIABILITIES				23,495			40,669
LIABILITIES SUBJECT TO COMPROMISE				1,899,274			—

		Total liabilities		2,294,266			2,243,513
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' DEFICIT:
	Preferred stock, no par; 100,000,000 shares authorized, none issued and outstanding			—			—
	Common stock, no par; 500,000,000 shares authorized; 216,212,491 issued and outstanding in 2001; 216,282,348 issued and outstanding in 2000			196,452			196,804
	Loans to shareholders			(3,062	)		(3,414	)
	Retained deficit			(617,287	)		(445,775	)

		Total shareholders' deficit		(423,897	)		(252,385	)

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT			$	1,870,369		$	1,991,128

See notes to consolidated financial statements.

F-25

REGAL CINEMAS, INC. (DEBTORS-IN-POSSESSION AS OF OCTOBER 11, 2001)

CONSOLIDATED STATEMENTS OF OPERATIONS

YEARS ENDED DECEMBER 27, 2001, DECEMBER 28, 2000, AND DECEMBER 30, 1999

(In Thousands)

			December 27, 2001			December 28, 2000			December 30, 1999
REVENUES:
	Admissions		$	799,769		$	767,108		$	690,469
	Concessions			321,264			310,234			285,707
	Other operating revenue			44,538			53,379			60,895

		Total revenues		1,165,571			1,130,721			1,037,071
OPERATING EXPENSES:
	Film rental and advertising costs			432,358			421,594			384,894
	Cost of concessions			47,193			48,962			44,276
	Theatre operating expenses			438,190			446,391			377,702
	General and administrative expenses			31,593			32,686			32,134
	Legal and professional fees—restructuring related			20,846			4,907			—
	Depreciation and amortization			91,019			95,734			80,787
	Theatre closing costs			12,015			55,802			4,269
	Loss on disposal of operating assets			21,446			20,893			16,826
	Loss on impairment of assets			78,504			113,734			98,587

		Total operating expenses		1,173,164			1,240,703			1,039,475

OPERATING LOSS				(7,593	)		(109,982	)		(2,404	)

OTHER INCOME (EXPENSE):
	Interest expense (contractual interest of $189,999 for the year ended December 27, 2001)			(174,218	)		(178,559	)		(132,162	)
	Interest income			5,108			2,821			659

LOSS BEFORE REORGANIZATION ITEMS, INCOME TAXES, AND EXTRAORDINARY ITEM				(176,703	)		(285,720	)		(133,907	)
REORGANIZATION ITEMS				(16,501	)		—			—

LOSS BEFORE INCOME TAXES AND EXTRAORDINARY ITEM				(193,204	)		(285,720	)		(133,907	)
BENEFIT FROM (PROVISION FOR) INCOME TAXES				—			(80,825	)		45,357

LOSS BEFORE EXTRAORDINARY ITEM				(193,204	)		(366,545	)		(88,550	)
EXTRAORDINARY ITEM:
	Gain on extinguishment of debt, net of applicable taxes of $0			21,692			—			—

NET LOSS			$	(171,512	)	$	(366,545	)	$	(88,550	)

See notes to consolidated financial statements.

F-26

REGAL CINEMAS, INC. (DEBTORS-IN-POSSESSION AS OF OCTOBER 11, 2001)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)

YEARS ENDED DECEMBER 27, 2001, DECEMBER 28, 2000, AND DECEMBER 30, 1999

(In Thousands, Except Share Amounts)

		Common Stock			Preferred Stock		Loans to Shareholders			Retained Earnings (Deficit)			Total
BALANCE, DECEMBER 31, 1998		$	197,427		$	—	$	(4,140	)	$	9,320		$	202,607
	Issuance of 120,000 shares of common stock upon exercise of stock options		600			—		—			—			600
	Issuance of 569,500 shares of common stock in exchange for shareholder loans		2,848			—		(2,848	)		—			—
	Repurchase and cancellation of 307,564 shares of common stock		(1,097	)		—		600			—			(497	)
	Net loss		—			—		—			(88,550	)		(88,550	)

BALANCE, DECEMBER 30, 1999		$	199,778		$	—	$	(6,388	)	$	(79,230	)	$	114,160
	Cancellation of 591,153 shares of common stock		(2,974	)		—		2,974			—			—
	Net loss		—			—		—			(366,545	)		(366,545	)

BALANCE, DECEMBER 28, 2000		$	196,804		$	—	$	(3,414	)	$	(445,775	)	$	(252,385	)
	Cancellation of 69,857 shares of common stock		(352	)		—		352			—			—
	Net loss		—			—		—			(171,512	)		(171,512	)

BALANCE, DECEMBER 27, 2001		$	196,452		$	—	$	(3,062	)	$	(617,287	)	$	(423,897	)

See notes to consolidated financial statements.

F-27

REGAL CINEMAS, INC. (DEBTORS-IN-POSSESSION AS OF OCTOBER 11, 2001)

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 27, 2001, DECEMBER 28, 2000, AND DECEMBER 30, 1999

(In Thousands)

			December 27, 2001			December 28, 2000			December 30, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(171,512	)	$	(366,545	)	$	(88,550	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization				91,018			95,734			80,787
Extraordinary gain on extinguishment of debt				(21,692	)		—			—
Loss on impairment of assets				78,505			113,734			98,587
Loss on disposal of operating assets				21,446			20,893			16,826
Theatre closing costs				12,015			55,802			4,269
Deferred income taxes				—			86,708			(47,899	)
Reorganization items				16,501			—			—
Changes in operating assets and liabilities:
	Accounts receivable			(2,409	)		1,279			409
	Inventories			2,801			(1,042	)		(1,036	)
	Prepaids and other current assets			8,630			(4,407	)		(6,304	)
	Accounts payable			6,200			(45,399	)		22,352
	Accrued expenses and other liabilities			110,491			39,601			13,248

		Net cash provided by (used in) operating activities		151,994			(3,642	)		92,689
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures				(33,591	)		(148,751	)		(435,768	)
Proceeds from sale of fixed assets				8,270			75,791			8,875
Decrease in reimbursable construction advances				3,169			10,029			(11,607	)
Investment in goodwill and other assets				(1,102	)		626			2,618

		Net cash used in investing activities		(23,254	)		(62,305	)		(435,882	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under long-term obligations				—			177,000			390,000
Payments on long-term obligations				(9,886	)		(41,426	)		(26,927	)
Purchase and retirement of common stock				—			—			(497	)
Exercise of warrants, options, and stock compensation expense				—			—			600
Proceeds from interest rate swap terminations				—			8,603			—

Net cash (used in) provided by financing activities				(9,886	)		144,177			363,176

NET INCREASE IN CASH AND EQUIVALENTS				118,854			78,230			19,983
CASH AND CASH EQUIVALENTS, beginning of period				118,834			40,604			20,621

CASH AND CASH EQUIVALENTS, end of period			$	237,688		$	118,834		$	40,604

See notes to consolidated financial statements.

F-28

REGAL CINEMAS, INC. (DEBTORS-IN-POSSESSION AS OF OCTOBER 11, 2001)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 27, 2001, DECEMBER 28, 2000 AND DECEMBER 30, 1999

1. The Company and Plan of Reorganization

Regal Cinemas, Inc. and its wholly owned subsidiaries (the "Company" or "Regal") operate multi-screen motion picture theatres principally throughout the eastern and northwestern United States. The Company formally operates on a 52 week fiscal year with each quarter consisting of 13 weeks, unless otherwise noted.

Over the past several years, the film exhibition industry has faced severe financial challenges due primarily to the rapid building of state of the art theatre complexes that resulted in an unanticipated oversupply of screens. The aggressive new build strategies generated significant competition in once stable markets and rendered many older theatres obsolete more rapidly than anticipated. This effect produced an oversupply of screens throughout the exhibition industry at a rate much quicker than the industry could effectively handle. The industry overcapacity coupled with declines in national box office attendance during previous fiscal years affected the operating results of the Company and many of its competitors.

As the Company has funded expansion efforts over the past several years primarily from borrowings under its credit facilities, the Company's leverage position has grown significantly over this time. Consequently, since the fourth quarter of 2000, the Company has been in default of certain financial covenants contained in its Senior Credit Facilities, its equipment financing term note ("Equipment Financing"), its 9.5% Senior Subordinated Notes due 2008 (the "Regal Notes") and its 8.875% Senior Subordinated Notes due 2010 (the "Regal Debentures"). As a result of the defaults, the holders of the Company's Senior Credit Facilities and the indenture trustee for the Regal Notes and Regal Debentures exercised their right to accelerate the maturity of all of the outstanding indebtedness under the respective agreements. The Company did not have the ability to fund or refinance the accelerated maturity of the indebtedness.

Following these events, on September 6, 2001, the Company solicited all holders of Regal Notes and Regal Debentures (the "Subordinated Notes") and its general unsecured creditors to vote for approval or rejection of the Company's proposed Chapter 11 joint plan of reorganization (the "Plan"). The Company established a record date of August 31, 2001 (for determining which note-holders and general unsecured creditors were entitled to vote on the Plan) and a voting deadline of October 5, 2001. The Plan and its related documents were the product of negotiations between the Company and the holders of approximately 82.3% of its senior bank debt and 93.7% of the Subordinated Notes (the "New Investors") who agreed to vote to accept the Plan. The Plan received in number and amount sufficient votes to enable the Company to file voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code, and to seek, as promptly as practicable thereafter, confirmation of the Plan. The following description of the Plan is not purported to be complete.

On October 11, 2001, the Company and its subsidiaries (collectively, the "Debtors"), filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Middle District of Tennessee (the "Bankruptcy Court") under case numbers 301-11305 through 301-11320 (the "Chapter 11 Case"), seeking court supervision of the Company's restructuring efforts. In essence, the Plan provides for the

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substantive consolidation of the Debtors for Plan treatment and distribution purposes only, as well as the following:

(i): Payment in full of allowed administrative claims; federal, state, and local tax claims; and other priority claims.
(ii): Payment in full of the allowed claims under the Senior Credit Facility. This does not include certain claims held by the New Investors. The New Investors have agreed to the satisfaction in cash of the interest and certain expense components of their claims and 100% of the common stock of the reorganized Company in satisfaction of the remainder.
(iii): Reinstatement or payment in full plus interest of, surrender of collateral securing, (or in the case of a right to setoff, offset to the extent of the Debtors' claims against the holder of) allowed miscellaneous secured claims and capitalized lease obligations.
(iv): Payment in full, plus interest of general unsecured claims that are allowed.
(v): Satisfaction and retirement of the Subordinated Notes by a cash payment equal to approximately 20%, or $181.0 million, of the Subordinated Notes claims represented by such instruments.

In connection with the negotiation of the Plan, the Debtors and the New Investors entered into a Lock-Up Agreement providing for, among other things, their mutual agreement to support the Plan, the New Investors' agreement to certain restrictions on their sale or other disposition of their respective claims against the Debtors and the New Investors' agreement that their Senior Credit Facility claims would receive the treatment as specified in the Plan. The New Investors would receive, in lieu of their Senior Credit Facility claims, a cash payment in the amount of the accrued interest outstanding to them, 100% of the new common stock of the reorganized Company, and a payment of certain restructuring costs of approximately $2 million. Additionally, in satisfaction and retirement of their Subordinated Notes, the New Investors would receive a cash payment equal to, approximately 20% of Subordinated Note claims represented, by such instruments.

The Company will not make any distributions in respect of the Company's existing common stock or other equity interests, and because of the substantive consolidation under the Plan, inter-company claims will be eliminated for Plan confirmation purposes only with no value ascribed to the stock of Regal's subsidiaries.

In conjunction with the commencement of the Chapter 11 Case, the Company also presented its "first day" motions, which the Bankruptcy Court approved, principally consisting of requests relating to:

(1): Payment of all pre-petition employee compensation, benefits and other employee obligations and the continued payment of these items.
(2): Continued payment to vendors in the ordinary course of business for post-petition goods and services received after the Petition Date.
(3): Payment in whole or in part on the pre-petition amounts owed to certain other vendors, known as "Critical Trade Vendors", assuming such vendors continue to supply the Company in accordance with normal trade terms.

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(4): Continued use of the Company's cash management system and accounts.

The Company requested the Bankruptcy Court's approval of these motions in order for the Debtors to continue business operations as debtors-in-possession in order to provide for a minimal impact on the day-to-day operations.

As permitted under the Bankruptcy Code, the Debtors have elected to assume or reject certain real estate leases, personal property leases, service contracts and other executory pre-petition contracts. Since July 2000, the Company has conducted an extensive review of its theatre portfolio and closed 128 under-performing theatres representing approximately 942 screens. In addition, the Company renegotiated leases at over 50 of the Company's continuing theatres and obtained rent reductions and/or lease termination rights. The Company expects these closures and lease negotiations, along with the Company's reorganization through its Chapter 11 case will improve the Company's asset base, operating results and balance sheet.

On December 7, 2001, Bankruptcy Court confirmed the Plan. As a result, the Company commenced actions to consummate the plan (the date of substantial consummation, the "Effective Date") and emerge as the reorganized Company (the "Reorganized Debtors"). Affiliates of Kohlberg Kravis Roberts & Co. L.P. ("KKR"), an affiliate of Hicks, Muse, Tate & Furst Incorporated ("Hicks Muse") (collectively, the "Initial Sponsors"), the New Investors, the DLJ Entities (defined in the Release and Indemnification Agreement) and the Debtors entered into a comprehensive Release and Indemnification Agreement, which such agreement would be assumed pursuant to the Plan. Pursuant to the Release and Indemnification Agreement, effective as of the Effective Date, (a) the Debtors and Reorganized Debtors are released by the Initial Sponsors and the DLJ Entities (collectively, the "Shareholder Release Parties") from liability in connection with the Debtors' relationships with the Shareholder Release Parties and (b) each of the New Investors and each of the Shareholder Release Parties mutually release each other from liability in collection the certain agreements between and among the Debtors and the initial sponsors, any claims held by them, and the restructuring of the Debtors. In addition, in consideration for the release of the Debtors and Reorganized Debtors by the Shareholder Release Parties, effective as of the Effective Date, the Reorganized Debtors will indemnify the Shareholder Release Parties from liability in connection with their relationship with the Debtors. The Release and Indemnification Agreement also contains a covenant between the New Investors and the Shareholder Release Parties not to sue and provides for the payment of certain management fees and certain director fees and the reimbursement of certain expenses for certain of the Shareholder Release Parties.

In the Chapter 11 Case, substantially all liabilities of the Debtors as of the Petition Date are subject to compromise or other treatment under a plan of reorganization to be confirmed by the Bankruptcy Court. The Bankruptcy Code authorizes the Company, as debtors-in-possession, to operate in the ordinary course of business; however, the Company may not engage in transactions outside the ordinary course of business without approval of the Bankruptcy Court. The Bankruptcy Code stays, as of the Petition Date, actions to collect pre-petition indebtedness. In addition, the Bankruptcy Code bars enforcement of other pre-petition, contractual obligations against the Debtors. In addition, the Debtors may, subject to Bankruptcy Court approval, reject executory contracts and unexpired leases, and parties affected by such rejections may file claims with the Bankruptcy Court in accordance with procedures set by the Bankruptcy Court and the Bankruptcy Code. Schedules were filed by the Debtors with the

F-31

Bankruptcy Court setting forth the assets and liabilities of the Debtors as of the Petition date as reflected in the Debtors' accounting records. The Company will investigate differences between the amounts reflected in such schedules and claims filed by creditors that may be either reconciled or adjudicated before the Bankruptcy Court. The ultimate allowed amounts of all such liabilities will not be known until proofs of claims have been filed and the claims reconciliation process has been completed. The Bankruptcy Court set November 26, 2001 as the bar date for non-governmental units and May 6, 2002 as the bar date for governmental units to file proofs of claims against the debtors. The Company emerged from bankruptcy effective January 29, 2002.

The consolidated financial statements as of December 27, 2001 have been presented in conformity with the AICPA's Statement of Position 90-7, "Financial Reporting By Entities In Reorganization Under the Bankruptcy Code," ("SOP 90-7"). The statement requires a segregation of liabilities subject to compromise by the Bankruptcy Court as of the bankruptcy filing date and identification of all transactions and events that are directly associated with the reorganization of the Company. The accompanying consolidated historical financial statements do not reflect the effects of the reorganization of the Company through the Chapter 11 Case and represent the Company's financial position and capital structure existing before the effective date of the Plan. These consolidated financial statements should be read with the understanding that the reorganization significantly altered the historical capital structure reflected in the accompanying balance sheet as of December 27, 2001.

Under the provisions of SOP 90-7, "fresh start" accounting would normally be appropriate for the Company upon emergence from bankruptcy. However, as discussed in Note 2, the Company has been acquired therefore purchase accounting will be applied by the acquiring entity.

2. Subsequent Event

The Company emerged from bankruptcy on January 29, 2002 in accordance with the Plan of Reorganization confirmed by the bankruptcy court on December 7, 2001. On January 29, 2002, the Company also became a wholly-owned subsidiary of Regal Cinemas Corporation (RCC). The transaction was accomplished by the issuance of 7,500,000 shares of RCC common stock in exchange for 100% of the outstanding common stock of the Company. RCC was formed for the primary purpose of becoming the issuer of senior credit facilities and the $200 million of senior subordinated notes issued upon emergence from bankruptcy. The $1.817 billion of long-term debt plus $195.9 million of accrued and unpaid interest included in Liabilities Subject to Compromise (see Note 8) was discharged under the terms of the Plan in exchange for total payments of approximately $575.3 million. The Company funded these payments through 1) cash on hand, 2) a term loan ($270 million) borrowed under new senior credit facilities, and 3) the issuance of new senior subordinated notes ($200 million).

RCC entered into a senior credit agreement with certain lenders on January 29, 2002. Under the credit agreement, the lenders advanced RCC $270.0 million through a senior secured term loan and have made available, subject to certain conditions, an additional $100.0 million through a senior secured revolving credit facility. The term loan will amortize at a rate of 5% per annum for the first five years, with the remaining 75% due on January 29, 2008. The revolving credit facility became available on January 29, 2002 and will be available until January 29, 2007.

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Borrowings bear interest, at RCC's option, at either the base rate or Eurodollar rate plus, in each case, an applicable margin. The applicable margin for loans under the revolving credit facility is subject to adjustment based upon the combined total leverage ratio of RCC. The base rate is a fluctuating interest rate equal to the higher of (a) the British Banking Association's prime rate or (b) the Federal Funds Effective Rate plus 0.5%. RCC must also pay customary administration fees, expenses and commitment fees on the unused portions of the revolving credit facility and provide certain indemnities.

The new senior credit facilities are secured by, among other things, the capital stock of certain subsidiaries of Regal Cinemas Corporation, mortgages on certain properties and a security interest in substantially all assets of Regal Cinemas, Inc.

The new senior credit facilities contain customary covenants, including limitations on the company's ability to issue additional indebtedness, pay dividends, and to make advances to affiliates. In addition, the new credit facilities specify that the company must meet or exceed defined interest and rent coverage ratios and must not exceed defined leverage ratios. The covenants also limit the annual amount of capital expenditures.

The $200 million of senior subordinated notes are due 2012 and bear interest at 9³/8%. These notes are redeemable in whole or in part on or after February 1, 2007 at the redemption prices set forth in the indenture. Up to 35% of the notes may be redeemed on or prior to February 1, 2005 with the proceeds of certain public equity offerings.

As a result of the emergence from bankruptcy, certain holders of approximately $725 million of the company's old senior credit facilities exchanged these pre-petition claims and became 100% owners of RCC's newly issued common stock. As a result of this exchange, Anschutz and Oaktree's Principal Activities Group, the largest of the new investors, acquired approximately 75% of the RCC's common stock issued upon emergence.

On March 8, 2002, the holders of 100% of the common stock in RCC entered into an agreement to exchange their stock for shares of stock in Regal Entertainment Group (REG). REG is an entity formed and controlled by Anschutz, the controlling stockholder of RCC. Also on March 8, 2002 REG agreed to exchange its stock for stock in two other theatre companies also commonly owned and controlled by Anschutz.

The company's financial statements in the period of emergence will reflect the predecessor cost basis of Anschutz instead of full reorganization value as determined by the bankruptcy court and as would normally be required by SOP 90-7. The subsequent financial statements will also reflect the discharge of approximately $2.1 billion of liabilities subject to compromise reflected on the accompanying December 27, 2001 historical debtors-in-possession balance sheet.

3. Summary of Significant Accounting Policies

Principles of Consolidation—The consolidated financial statements include the accounts of Regal and its wholly-owned subsidiaries. The Company has eliminated all significant inter-company accounts and transactions from the consolidated financial statements.

Cash Equivalents—The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash equivalents. At December 28, 2000, the Company

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held approximately $107.0 million in temporary cash investments in the form of certificates of deposit and variable rate investment accounts with major financial institutions.

Inventories—Inventories consist of concession products and theatre supplies. The Company states inventories on the basis of first-in, first-out (FIFO) cost, which is not in excess of net realizable value.

Start-up Costs—The Company expenses start-up costs of a new theatre as incurred.

Reimbursable Construction Advances—Reimbursable construction advances consist of amounts due from landlords to fund a portion of the construction costs of new theatres that the Company will operate pursuant to lease agreements. The landlords repay the amounts either during construction on a percentage of completion basis, or upon completion of the theatre.

Property and Equipment—The Company states property and equipment at cost. The Company charges repairs and maintenance to expense as incurred. Gains and losses from disposition of property and equipment are included in income and expense when realized. The Company records depreciation and amortization using the straight-line method over the following estimated useful lives. Depreciation expense for the years ended December 27, 2001, December 28, 2000 and December 30, 1999 was $80.6 million, $84.1 million and $68.2 million, respectively.

Buildings and leaseholds		20-30 years
Equipment		5-20 years

Included in property and equipment is $126.0 million and $188.0 million of assets accounted for under capital leases and lease financing arrangements as of December 27, 2001 and December 28, 2000, respectively. The Company records amortization using the straight-line method over the shorter of the lease terms or the estimated useful lives noted above.

The Company capitalizes interest in accordance with Statement of Financial Accounting Standards ("SFAS") No. 34, Capitalization of Interest. Capitalized interest was $0.4 million, $5.4 million, and $11.5 million for fiscal years 2001, 2000 and 1999, respectively.

Goodwill—Goodwill, which represents the excess of acquisition costs over the net assets acquired in business combinations, has been allocated to the individual theatres acquired and is amortized on the straight-line method. Goodwill generated from the acquisition of Act III Cinemas, Inc. is amortized over a 40-year period; all other goodwill is amortized over a 25-30 year period.

Impairment of Long-Lived Assets—In accordance with SFAS No. 121 "Accounting for the Impairment of Long-Lived Assets to be Disposed of", the Company reviews long-lived assets, including allocated goodwill, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the sum of the expected future cash flows, undiscounted and without interest charges is less than the carrying amount of the asset, the Company recognizes an impairment charge in the amount by which the carrying value of the assets exceeds its fair market value. The Company evaluates assets for impairment on an individual theatre basis, which management believes is the lowest level for which there are identifiable cash flows. The fair value of assets is determined using the present value of the estimated future cash flows or the expected selling price less selling costs for assets the Company expects to dispose of.

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Other Assets—Other assets consists primarily of equity method investments and debt acquisition costs. Debt acquisition costs are deferred and amortized over the terms of the related agreements using the straight-line method which approximates the interest method. Debt acquisition costs as of December 27, 2001 and December 28, 2000 were $29.2 million and $33.8 million, respectively, net of accumulated amortization of $17.3 million and $12.3 million, respectively.

Income Taxes—Deferred tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

Deferred Revenue—Deferred revenue relates primarily to vendor rebates and is included in accrued expenses. The Company recognizes these rebates in the accompanying financial statements when earned.

Deferred Rent—The Company recognizes rent on a straight-line basis after considering the effect of rent escalation provisions resulting in a level monthly rent expense for each lease over its term. The deferred rent liability is included in other liabilities.

Revenue recognition—Revenues are recognized when admissions and concessions sales are received at the theatres.

Other Operating Revenues—Other operating revenues consist primarily of product advertising and other ancillary revenue which are recognized as income in the period earned.

Advertising Costs—The Company expenses advertising costs as incurred.

Interest Rate Swaps—The Company enters into interest rate swaps as a hedge against interest exposure of variable rate debt. In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as subsequently amended by SFAS Nos. 137 and 138, the differences to be paid or received on swap agreements are included in interest expense. The Company bases the fair value of its interest rate swap on dealer quotes. These values represent the amounts the Company would receive or pay to terminate the agreements taking into consideration current interest rates.

Stock-based Compensation—SFAS No.123, Accounting for Stock-Based Compensation, encourages, but does not require, companies to adopt the fair value method of accounting for stock-based employee compensation. The Company accounts for stock-based employee compensation using the intrinsic value method in accordance with Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations (see Note 11).

Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Segments—The Company manages its business based on one reportable segment.

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New Accounting Standards—In June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 141, "Business Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 supersedes Accounting Principles Board Opinion No. 16 (APB 16), "Business Combinations," and primarily addresses the accounting for the cost of an acquired business (i.e., the purchase price allocation), including any subsequent adjustments to its cost. SFAS No. 142 primarily addresses the accounting for goodwill and intangible assets subsequent to their acquisition (i.e., the post-acquisition accounting) and supersedes APB 17, Intangible Assets. The most significant changes made by SFAS No. 141 involve the requirement to use the purchase method of accounting for all business combinations, thereby eliminating the use of the pooling-of-interests method along with the establishment of new criteria for determining whether the Company should recognize intangible assets acquired in a business combination separately from goodwill. SFAS No. 141 is effective for all business combinations initiated after June 30, 2001.

Under SFAS No. 142, the Company will no longer amortize goodwill or indefinite lived intangible assets, and will test those assets for impairment, at least annually, at a reporting unit level. Additionally, the amortization period of any intangible assets with finite lives is no longer limited to forty years. Any identifiable intangible assets would continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 121. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 for all goodwill and other intangible assets recognized in an entity's statement of financial position at that date, regardless of when those assets were initially recognized. The Company's unidentifiable intangible assets, if any, will not be amortized but will be evaluated for impairment in accordance with SFAS No. 142.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets" which provides clarifications of certain implementation issues within SFAS No. 121 along with additional guidance on the accounting for the impairment or disposal of long-lived assets. SFAS No. 144 supersedes SFAS No. 121 and applies to all long-lived assets (including discontinued operations) and consequently amends APB 30, "Reporting the Effects of Disposal of a Segment of a Business." SFAS No. 144 develops one accounting model (based on the model in SFAS No. 121) for long-lived assets that are to be disposed of by sale, as well as addresses the principal implementation issues. SFAS No. 144 requires that entities measure long-lived assets that are to be disposed of by sale at the lower of book value or fair value less cost to sell. That requirement eliminates APB 30's requirement that discontinued operations be measured at net realizable value or that entities include under "discontinued operations" in the financial statements amounts for operating losses that have not yet occurred. SFAS No. 144 is effective for financial statements issued for fiscal years beginning after December 15, 2001 and early application is encouraged. The Company does not believe the adoption of SFAS No. 144 will have a significant impact on the consolidated financial statements.

4. Sale-Leaseback Transactions

During the third quarter of fiscal 2000, the Company completed sale-leaseback transactions involving 15 of its owned theatres. Under the terms of the transaction, the Company sold the land and related improvements of the theatres for $45.2 million and in turn leased them back for an initial lease term of 20 years. The leases include specified renewal options for up to 20 additional years and the Company accounts for these leases as operating leases. Rent expense during the initial term is

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approximately $5.0 million annually. The Company will amortize the gain on the sale of $2.1 million over the initial lease term of 20 years and will offset rent expense.

5. Impairment of Long-Lived Assets

Asset Impairment—As stated in Note 3, the Company periodically reviews the carrying value of long-lived assets, including allocated goodwill, for impairment based on expected future cash flows in accordance with SFAS No. 121. The Company performs such reviews on an individual theatre level, the lowest level of identifiable cash flows. Factors considered in management's estimate of future theatre cash flows include historical operating results over complete operating cycles, current and anticipated impacts of competitive openings in individual markets, and anticipated sales or dispositions of theatres.

Management uses the results of this analysis to identify theatres with negative current or forecasted operating cash flows, thus indicating whether impairment may have occurred. The Company measures the resulting impairment loss as the amount by which the carrying value of the asset exceeds fair value, which the Company estimates using discounted cash flows. Projected cash flows also include estimated proceeds for the sale of owned properties in the instances where management intends to sell the location. The Company has recognized the following impairment losses due to this analysis:

	2001		2000		1999
	(In Thousands)
Write-down of theatre property and equipment	$	59,845	$	92,054	$	68,477
Write-off of goodwill		18,659		21,680		30,110

Total	$	78,504	$	113,734	$	98,587

In accordance with SFAS No. 121, the Company has recorded assets held for sale, which consists of closed theatre properties, at the lower of carrying amount or fair value less costs to sell. Any required impairment charge is recorded at the time management formally makes the decision to close these theatres.

6. Theatre Closing and Loss on Disposal Costs

The Company's management team continually evaluates the status of the Company's under-performing locations. During 2001, the Company recorded $21.4 million as the net loss on disposal of these locations. In conjunction with certain closed or abandoned locations, the Company has a reserve for lease termination and related costs of $40.1 million at December 27, 2001. This reserve was initially established at December 30, 1999 and represents management's best estimate of the potential costs for exiting these leases at the time management makes the formal decision to close such theatres. These estimates are based on analyses of the properties, correspondence with the landlord, exploratory discussions with potential sub-lessees and individual market conditions. Also included in theatre closing costs are other expenses incurred by the Company upon closure of certain theatres.

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The following is a summary of the activity in this reserve:

	December 27, 2001			December 28, 2000
	(In Thousands)
Beginning balance	$	41,463		$	4,269
Rent and other termination payments		(10,471	)		(14,967	)
Additional closing and termination costs		43,063			56,124
Revision of prior estimates		(33,951	)		(3,963	)

Ending balance	$	40,104		$	41,463

In accordance with SOP 90-7, the Company has revised prior estimates for the remaining leasehold obligations in accordance with Section 502(b)(6) of the Bankruptcy Code. Section 502(b)(6) limits a lessor's claim to the rent reserved by such lease, without acceleration, to the greater of one year or 15 percent, not to exceed three years, of the remaining term of the lease. Any unpaid rent is also included in the reserve. This reserve is included in Liabilities Subject to Compromise at December 27, 2001.

7. Long-Term Obligations

As a result of the Company's bankrupcty filing previously discussed in Note 1, substantially all of the Company's long-term obligations as of October 11, 2001, are classified as Liabilities Subject to

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Compromise at December 27, 2001. Long-term obligations at December 27, 2001 and December 28, 2000, consists of the following:

				December 27, 2001			December 28, 2000
				(In Thousands)
$600,000 of the Company's senior subordinated notes due June 1, 2008, with interest payable semiannually at 9.5%. Notes are redeemable, in whole or in part, at the option of the Company at any time on or after June 1, 2003, at the redemption prices (expressed as percentages of the principal amount thereof) set forth below together with accrued and unpaid interest to the redemption date, if redeemed during the 12 month period beginning on June 1 of the years indicated:
Year		Redemption Price
	2003	104.750	%
	2004	103.167	%
	2005	101.583	%
	2006 and thereafter	100.000	%	$	600,000		$	600,000
$200,000 of the Company's senior subordinated debentures due December 15, 2010, with interest payable semiannually at 8.875%. Debentures are redeemable, in whole or in part, at the option of the Company at any time on or after December 15, 2003, at the redemption prices (expressed as percentages of the principal amount thereof) set forth below together with accrued and unpaid interest to the redemption date, if redeemed during the 12 month period beginning on December 15 of the years indicated:
Year		Redemption Price
	2003	104.750	%
	2004	103.328	%
	2005	101.219	%
	2006	100.109	%
	2007	100.000	%		200,000			200,000
Term Loans					505,000			505,000
Revolving credit facility					495,000			495,000
Equipment financing note payable, payable in varying quarterly installments through April 1, 2005, including interest at LIBOR plus 3.25% (5.61% at December 27, 2001), collateralized by related equipment					17,662			19,500
Capital lease obligations, 7.9%, maturing in 2009					1,570			19,597
Lease financing arrangements, 11.5%, maturing in various installments through 2021					99,445			155,165
Other					3,780			4,270

					1,922,457			1,998,532
Less current maturities					(2,173	)		(1,823,683	)
Less amounts subject to compromise					(1,817,732	)		—

Total long-term obligations				$	102,552		$	174,849

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Credit Facilities—These credit facilities (the Senior Credit Facilities) include a $500.0 million Revolving Credit Facility (including the availability of Revolving Loans, Swing Line Loans, and Letters of Credit) and three term loan facilities: Term A, Term B, and Term C (the Term Loans). The Company must pay an annual commitment fee ranging from 0.2% to 0.425%, depending on the Company's Total Leverage Ratio, as defined in the Senior Credit Facilities, of the unused portion of the Revolving Credit Facility. The Revolving Credit Facility expires in June 2005. At December 27, 2001 and December 28, 2000, there were $495.0 million in outstanding borrowings under the Revolving Credit Facility.

Borrowings under the Term A Loan or the Revolving Credit Facility can be made at the Base Rate plus a margin of 0% to 1%, depending on the Total Leverage Ratio. The Base Rate on revolving loans is the rate established by the Administrative Agent in New York as its base rate for dollars loaned in the United States. The outstanding balance under the Term A Loan was $235.2 million at both December 27, 2001 and December 28, 2000 with $2.4 million due annually through 2004 and the balance due in 2005.

Under the Term B Loan, the Company may borrow funds at the Base Rate plus a margin of 0.75% to 1.25% depending on the Total Leverage Ratio. The outstanding balance under the Term B Loan was $137.5 million at both December 27, 2001 and December 28, 2000 with the balance due in 2006.

Under the Term C Loan, the Company may borrow funds at the Base Rate plus a margin of 1.0% to 1.5% depending on the Total Leverage Ratio. The outstanding balance under the Term C Loan was $132.3 million at both December 27, 2001 and December 28, 2000 with $1.35 million due annually through 2006, and the balance due in 2007.

A pledge of the stock of the Company's domestic subsidiaries collateralizes the Senior Credit Facilities. The Company's direct and indirect U.S. subsidiaries guarantee payment obligations under certain of the Credit Facilities.

The Senior Credit Facilities contain customary covenants and restrictions on the Company's ability to issue additional debt, pay dividends or engage in certain activities and include customary events of default. In addition, the Credit Facilities specify that the Company must meet or exceed defined interest coverage ratios and must not exceed defined leverage ratios.

Since the fourth quarter of 2000, the Company has been in default of certain financial covenants contained in its Credit Facilities and its equipment financing term note ("Equipment Financing"). As a result of the default, the administrative agent under the Company's Senior Credit Facilities delivered payment blockage notices to the Company and the indenture trustee of its 9¹/2% Senior Subordinated Notes due 2008 (the "Regal Notes") and its 8⁷/8% Senior Subordinated Notes due 2010 (the "Regal Debentures"), prohibiting the payment by Regal of the semi-annual interest payments of approximately $28.5 million due holders of the Regal Notes on December 1, 2001, December 1, 2000 and June 1, 2001 and $8.9 million due to the holders of the Regal Debentures on December 15, 2001, December 15, 2000 and June 15, 2001. Because of the failure to make the interest payments, the Company was in default of the indentures related to the Regal Notes and Regal Debentures. Additionally, the Company was in payment default of its Senior Credit Facilities, as the Company failed to pay the 2001 interest payments totaling approximately $211.0 million and principal payments totaling

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approximately $3.8 million. As a result of the interest payment defaults, the holders of the Company's Senior Credit Facilities and the indenture trustee for the Regal Notes and Regal Debentures exercised their right to accelerate the maturity of all of the outstanding indebtedness under the respective agreements. The Company did not have the ability to fund or refinance the accelerated maturity of the indebtedness.

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

Interest Rate Swaps—In September 1998, the Company entered into interest rate swap agreements for five-year terms to hedge a portion of the Senior Credit Facilities variable interest rate risk. In September 2000, the Company monetized the value of these agreements for approximately $8.6 million. As the Company had accounted for these swap agreements as interest rate hedges, the Company has deferred the gain realized from the sale. The Company is amortizing the deferred gain as a credit to interest expense over the remaining original term of these swaps (through September 2003). The current portion of this gain is included in accrued expenses and the long-term portion in other liabilities. The fair value of the Company's remaining interest rate swap, which matures in March 2002, is $(0.2) million as of December 27, 2001. Upon emergence from bankruptcy, the remaining interest rate swap was terminated.

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities as amended by SFAS Nos. 137 and 138. These statements specify how to report and account for derivative instruments and hedging activities, thus requiring the recognition of those items as assets or liabilities in the statement of financial position and measure them at fair value. The Company adopted these statements in the first quarter of fiscal 2001. The adoption of these statements resulted in a charge of $(0.5) million to establish a liability for the fair market value of the Company's interest rate swap agreement. Any changes in the fair market value of this swap agreement are included in interest expense.

Extraordinary Gain—During 2001, the Company entered into agreements with certain of its landlords that resulted in the termination of certain leases, including eight which were accounted for as either capital leases or lease financing arrangements. Accordingly, the Company wrote-off the related debt obligations and net book value of the related property and equipment and other assets. During 2001, the Company also entered into lease modifications of certain lease financing arrangements which provided for a reduction of the total lease payments. In conjunction with these terminations and modifications the Company made payments of approximately $5.8 million, which, after the write-off of the related assets and liabilities, resulted in an extraordinary gain due to debt extinguishment of $21.7 million, net of applicable taxes of zero for the year ended December 27, 2001.

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Maturities of Long-Term Obligations—The Company's long-term debt, capital lease obligations, and lease financing arrangements are scheduled to mature as follows:

	Long-Term Debt		Capital Leases		Lease Financing Arrangements		Total
	(in Thousands)
2002	$	1,818,223	$	58	$	1,613	$	1,819,894
2003		541		63		1,811		2,415
2004		597		68		2,098		2,763
2005		659		73		2,568		3,300
2006		501		80		2,946		3,527
Thereafter		921		1,228		88,409		90,558

	$	1,821,442	$	1,570	$	99,445	$	1,922,457

8. Liabilities Subject to Compromise

The filing of the Chapter 11 Case by the Debtors automatically stayed actions by creditors and other parties of interest to recover any claim that arose prior to the commencement of the cases. In accordance with SOP 90-7 the following table sets forth the liabilities of the Company subject to compromise as of December 27, 2001:

		(in Thousands)
Debt:
	Senior subordinated notes and debentures	$	800,000
	Senior credit facilities		1,000,000
	Equipment financing note		17,662
	Other long-term debt		70

			1,817,732
Other:
	Trade accounts payable and other		32,450
	Reserve for lease termination and related costs		37,123
	Accrued interest		195,869

Total liabilities subject to compromise			2,083,174
Amounts to be settled using current assets			(183,900	)

Balance subject to compromise		$	1,899,274

Contractual interest expense not accrued or recorded on certain pre-petition debt totaled approximately $15.8 million for the year ended December 27, 2001.

Additional liabilities subject to compromise may arise subsequent to the Petition Date resulting from rejection of executory contracts, including leases, and from the determination by the bankruptcy court (or agreed to by parties in interest) of allowed claims for contingencies and other disputed amounts.

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8. Liabilities Subject to Compromise (Continued)

The above summary of liabilities subject to compromise excludes certain obligations on the Petition Date that the Company received approval from the court to continue to service in the normal course of business. These obligations primarily include the pre-petition film licensing agreements and other amounts owing to the motion picture studios, employee compensation and other essential trade creditors. The liabilities listed above that were settled through the use of current assets (cash) existing at December 27, 2001 have been classified as a current liability in the accompanying balance sheet.

9. Reorganization Items

In accordance with SOP 90-7, expenses and income directly incurred or realized as a result of the Chapter 11 Cases have been segregated from the normal operations and are disclosed separately. The major components are as follows:

		(In Thousands)
Legal and professional fees		$	2,793
Lease termination and related costs, net			10,382
Interest income			(492	)
Additional claims			3,818

	Total reorganization items	$	16,501

10. Commitments and Contingencies

Leases—The Company accounts for a majority of its leases as operating leases. The Company, at its option, can renew a substantial portion of the leases at defined or then fair rental rates for various periods. Certain leases for Company theatres provide for contingent rentals based on revenues. Minimum rentals payable under all non-cancelable operating leases with terms in excess of one year as of December 27, 2001, are summarized for the following fiscal years:

	(In Thousands)
2002	$	110,678
2003		111,802
2004		112,439
2005		112,085
2006		111,094
Thereafter		1,338,613

Rent expense under such operating leases amounted to $136.2 million, $158.2 million, and $130.3 million for fiscal years 2001, 2000 and 1999, respectively. Contingent rent expense was $4.3 million, $3.6 million, and $3.6 million for fiscal years 2001, 2000, and 1999, respectively.

Contingencies—The Company is a defendant in a number of claims arising from its decision to file voluntary petitions for relief under Chapter 11 of the Bankruptcy Code and to close theatre locations or to cease construction of theatres on sites for which the Company had a contractual obligation to lease such property. The Company believes it has adequately provided for the settlement of such claims. However, as discussed in Note 1, governmental units have until May 6, 2002 to file proofs of claims against the Company. The Company is also presently involved in various legal proceedings

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arising in the ordinary course of its business operations, including personal injury claims, employment matters and contractual disputes. Upon the filing of the petitions, the Bankruptcy Court imposed a stay applicable to all entities, of, among other things, the commencement or continuation of judicial, administrative, or other actions or proceedings against the Company that were or could have been commenced before the bankruptcy petition. 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.

11. Capital Stock and Stock Option Plans

Earnings Per Share—The Company does not present earnings per share information herein as the Company's shares do not trade in a public market.

Preferred Stock—The Company currently has 100,000,000 shares of preferred stock authorized with none issued. The Company may issue the preferred shares from time to time in such series having such designated preferences and rights, qualifications and limitations as the Board of Directors may determine.

Stock Option Plans—The Company issued certain key members of management options under the 1998 Stock Purchase and Option Plan for Key Employees of Regal Cinemas, Inc. (the "Plan"). Under the Plan, the Board of Directors of the Company may award stock options to purchase up to 30,000,000 shares of the Company's common stock. Grants or awards under the Plan may take the form of purchased stock, restricted stock, incentive or nonqualified stock options or other types of rights as specified in the Plan.

The following table summarizes information about fixed stock options outstanding at December 27, 2001:

			Weighted Average Exercise Shares Price		Options Exercisable At Year End
Under option at December 31, 1998	18,625,625		$	3.76	8,021,889
Options granted in 1999	1,692,609		$	5.00
Options exercised in 1999	(120,000	)	$	5.00
Options canceled or redeemed in 1999	(3,742,404	)	$	3.72

Under option at December 30, 1999	16,455,830		$	3.78	9,027,781
Options granted in 2000	—			—
Options exercised in 2000	—			—
Options canceled or redeemed in 2000	(1,652,818	)	$	3.78

Under option at December 28, 2000	14,803,012		$	3.78	9,920,444
Options granted in 2001	—			—
Options exercised in 2001	—			—
Options canceled or redeemed in 2001	(445,945	)	$	4.38

Under option at December 27, 2001	14,357,067		$	3.76	11,444,711

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Options Outstanding
Options Outstanding					Options Exercisable
		Weighted Average Contractual Life			Options Exercisable
Range of Exercise Price	Number Outstanding at 12//27/01	Weighted Average Contractual Life	Weighted Average Exercise Price		Number Exercisable at 12/27/01	Weighted Average Exercise Price
$0.34 - $0.62	1,403,311	3.1	$	0.5370	1,403,311	$	0.5370
$1.58 - $3.67	3,458,691	3.3	$	2.0428	3,458,691	$	2.0428
$4.03 - $5.00	9,495,065	6.4	$	4.8659	6,582,709	$	4.8080

	14,357,067	5.3	$	3.7571	11,444,711	$	3.4486

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 grant, the Company's net loss would have been recorded in the amounts indicated below:

	2001			2000			1999
	(In Thousands)
Net Loss:
As Reported	$	(171,512	)	$	(366,545	)	$	(88,550	)
Pro Forma		(173,083	)		(368,769	)		(91,204	)

The pro forma results do not purport to indicate the effects on reported net income for recognizing compensation expense that is expected to occur in future years.

The fair value for the employee and directors options granted during fiscal years 2001, 2000 and 1999, was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions: risk-free interest rates of 5.9% for 1999 grants and an inconsequential volatility factor in 2001, 2000 and 1999. A weighted average expected life of 10 years was used for employee options granted in 1999 and the weighted average grant date fair value of options granted in 1999 was $2.24 per share. There were no options granted in fiscal years 2001 and 2000.

Pursuant to the reorganization of the Company through the Chapter 11 Case, all of the outstanding stock options of the Company granted prior to the effective date of the Plan were cancelled effective January 29, 2002. New stock options were issued in Regal Cinemas Corporation upon the Company's emergence from bankruptcy on January 29, 2002 (Note 2).

12. Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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Significant components of the Company's net deferred tax asset consisted of the following at:

		2001			2000
		(In Thousands)
Deferred tax assets:
	Net operating loss carryforward	$	171,788		$	107,378
	Excess of tax basis over book basis for leases		7,717			5,786
	Accrued expenses		31,693			27,626
	Interest expense deferred under IRC 163(j)		2,267			2,267
	Favorable leases		476			476
	Excess of tax basis over book basis of certain assets		24,178			42,263
	AMT credit carryforward		7,176			1,316
	Other		3,979			4,509

			249,274			191,621
Valuation allowance			(233,765	)		(182,846	)

Deferred tax assets			15,509			8,775
Deferred tax liabilities:
	Excess of book basis over tax basis of certain intangible assets		(7,066	)		(5,150	)
	Other		(8,443	)		(3,625	)

Deferred tax liabilities			(15,509	)		(8,775	)

Net deferred tax asset		$	—		$	—

The Company has recorded a valuation allowance against deferred tax assets for the years ended December 27, 2001 and December 28, 2000 totaling approximately $233.7 million and $182.8 million, respectively, as management believed it was more likely than not that the deferred tax asset would not be realized in future tax periods.

At December 27, 2001, the Company and certain of its subsidiaries have various federal and state net operating loss (NOL) carryforwards available to offset future taxable income. The Company has approximately $409.7 million of NOL carryforwards, in the aggregate, for federal purposes that begin to expire in the 2009 tax year. Additionally, the Company has approximately $527.6 million of NOL carryforwards for state tax purposes. At December 27, 2001, the Company has approximately $7.1 million of alternative minimum tax credit carryforwards available to reduce future federal income tax liabilities. Under current federal income tax taw, the alternative minimum tax credit can be carried forward indefinitely. However, due to the filing for protection under Chapter 11 of the federal bankruptcy laws on October 11, 2001 and pursuant to Internal Revenue Code, the Company must reduce tax attributes equal to the cancellation of debt resulting from the bankruptcy filing. Thus management believes it is more likely than not that the net deferred tax assets will not be realized in future tax periods.

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The components of the provision for (benefit from) income taxes for income from continuing operations for each of the three fiscal years were as follows:

	2001			2000			1999
	(In Thousands)
Current	$	—		$	(5,883	)	$	—
Deferred		(50,919	)		(96,138	)		(45,357	)
Increase in deferred income tax valuation allowance		50,919			182,846			—

Total income tax provision (benefit)	$	—		$	80,825		$	(45,357	)

The increase in the valuation allowance in 2001 and 2000 of $50.9 million and $182.8 million, respectively, primarily reflects the change in assessment of the likelihood of utilization of the net deferred tax assets of the Company and its subsidiaries.

A reconciliation of the provision for (benefit from) for income taxes as reported and the amount computed by multiplying the income before income taxes and extraordinary item by the U.S. federal statutory rate of 35% was as follows:

	2001			2000			1999
	(In Thousands)
Benefit computed at federal statutory income tax rate	$	(60,029	)	$	(100,002	)	$	(46,868	)
State and local income taxes, net of federal benefit		(7,575	)		(12,763	)		(2,029	)
Reorganization costs		8,976			—			—
Goodwill amortization		3,079			3,414			3,481
Goodwill impairment		4,591			7,102			—
Increase in valuation allowance		50,919			182,846			—
Other		39			228			59

Total income tax provision (benefit)	$	—		$	80,825		$	(45,357	)

13. Related Party Transactions

The Company entered into a management agreement with the Initial Sponsors pursuant to which the Company has incurred $1.0 million of management fee expense during fiscal 2001, 2000 and 1999.

14. Cash Flow Information

	2001			2000			1999
	(In Thousands)
Supplemental information on cash flows:
Interest paid	$	29,228		$	138,541		$	128,909
Income tax refunds received, net		(147	)		(215	)		(4,884	)

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NONCASH TRANSACTIONS:

2001:

In accordance with agreements with certain landlords, the Company terminated or amended certain leases in 2001 resulting in an extraordinary gain of $21.7 million. The components of this gain were the write-offs of lease financing and capital lease obligations of $75.1 million, fixed assets totaling $49.2 million, and related accounts receivable and payable totaling $4.8 million and $2.5 million, respectively. In addition, the Company made a payment of $1.8 million to execute these transactions.

The Company recorded lease financing arrangements and net assets of $7.1 million.

The Company retired 69,857 shares of common stock valued at $0.3 million in exchange for canceling notes receivable from certain shareholders.

2000:

The Company recorded lease financing arrangements and net assets of $83.3 million during fiscal 2000.

The Company retired 214,275 shares of common stock valued at $1.1 million in exchange for canceling notes receivable from certain shareholders.

1999:

The Company recorded lease financing arrangements and net assets of $75.5 million during the fourth quarter of 1999.

The Company issued 569,500 shares of common stock valued at $2.8 million in exchange for notes receivables from certain shareholders.

The Company cancelled 119,964 shares of common stock and the related notes receivable valued at $.6 million from certain shareholders.

15. Employee Benefit Plans

The Company sponsors employee benefit plans under section 401(k) of the Internal Revenue Code for the benefit of substantially all full-time employees. The Company made discretionary contributions of approximately $483,000, $508,000, and $426,000 to the plans in 2001, 2000 and 1999, respectively. Employees are immediately eligible; however, there is an age requirement of 21.

16. Fair Value of Financial Instruments

The methods and assumptions used to estimate the fair value of each class of financial instrument are as follows:

Cash and cash equivalents, accounts receivable, accounts payable: The carrying amounts approximate fair value because of the short maturity of these instruments.

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Long term debt, excluding capital lease obligations and lease financing arrangements: The carrying amounts of the Company's term loans and the revolving credit facility are estimated based on quoted market prices as of the Company's fiscal year end for the Company's senior credit facility, which consists of the Company's term loans and revolving credit facility. The associated interest rates are based on floating rates identified by reference to market rates and are assumed to approximate fair value. The fair values of the Company's senior subordinated notes and debentures are estimated based on the Company's plan of reorganization, as confirmed by the Bankruptcy Court, which provides for a cash payment of approximately 20% of the face value of the subordinated notes and debenture. The fair values of the Company's other debt obligations are based on recent financing transactions for similar debt issuances and carrying value approximates fair value. The carrying amounts and fair values of long-term debt at December 27, 2001 and December 28, 2000 consists of the following:

	2001		2000
	(In Thousands)
Carrying amount	$	1,821,442	$	1,823,770
Fair value	$	1,181,442	$	779,770

Interest rate swaps: The fair value of the Company's one remaining interest rate swap, which matures in March 2002, is $(0.2) million as of December 27, 2001 based on dealer quotes. The Company terminated this interest rate swap in connection with its Chapter 11 filing.

F-49

INDEPENDENT AUDITORS' REPORT

The Board of Directors
United Artists Theatre Company:

We have audited the accompanying consolidated balance sheets of United Artists Theatre Company ("Reorganized Company") as of January 3, 2002, and of United Artists Theatre Company ("Predecessor Company") as of December 28, 2000 and the related consolidated statements of operations, stockholders' equity (deficit) and comprehensive income, and cash flows for the forty-four weeks ended January 3, 2002 (Reorganized Period) and for the nine weeks ended March 1, 2001 and for the year ended December 28, 2000 (Predecessor Periods). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

In our opinion, the aforementioned Reorganized Company consolidated financial statements present fairly, in all material respects, the financial position of the Reorganized Company as of January 3, 2002, and the results of their operations and their cash flows for the forty-four weeks ended January 3, 2002 in conformity with accounting principles generally accepted in the United States of America. Further, in our opinion, the aforementioned Predecessor Company consolidated financial statements present fairly, in all material respects, the financial position of the Predecessor Company as of December 28, 2000, and the results of their operations and their cash flows for the nine-weeks ended March 1, 2001 and the year ended December 28, 2000 in conformity with the accounting principles generally accepted in the United States of America.

As described in Note 1 and 2 to the consolidated financial statements, effective March 1, 2001, United Artists Theatre Company emerged from protection under Chapter 11 of the U.S. Bankruptcy Code pursuant to a reorganization plan, which was confirmed by the Bankruptcy Court on January 22, 2001. In accordance with AICPA Statement of Position 90-7, the Company adopted fresh start reporting whereby its assets, liabilities and new capital structure were adjusted to reflect estimated fair values as of March 1, 2001. As a result, the consolidated financial statements for the periods subsequent to March 1, 2001 reflect the Reorganized Company's new basis of accounting and are not comparable to the Predecessor Company's pre-reorganization consolidated financial statements.

/s/ KPMG LLP

Denver, Colorado
February 8, 2002

F-50

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To United Artists Theatre Company:

We have audited the accompanying consolidated statements of operations, stockholders' equity (deficit) and comprehensive income and cash flow for the fiscal year ended December 30, 1999 of United Artists Theatre Company and subsidiaries. These consolidated financial statements are the responsibility of United Artists Theatre Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated results of operations and cash flow of United Artists Theatre Company for the fiscal year ended December 30, 1999, in conformity with accounting principles generally accepted in the United States.

/s/ Arthur Andersen LLP

Denver, Colorado
April 13, 2000 (except with respect to the matter discussed in Note 1, as to
which the date is March 2, 2001).

F-51

UNITED ARTISTS THEATRE COMPANY
AND SUBSIDIARIES

Consolidated Balance Sheets

(Amounts in Thousands)

				Reorganized Company January 3, 2002			Predecessor Company December 28, 2000
Assets
Current assets:
	Cash and cash equivalents			$	23,500		$	11,400
	Receivables, net:
		Notes			—			1,500
		Other			8,400			6,800

					8,400			8,300
	Prepaid expenses, concession inventory, and other current assets				21,800			14,300

		Total current assets			53,700			34,000
	Investments and related receivables				2,500			3,000
	Assets held for sale				2,800			—
	Property and equipment, at cost:
		Land			36,500			31,600
		Theatre buildings, equipment and other			247,700			548,600

					284,200			580,200
		Less accumulated depreciation and amortization			(25,500	)		(230,400	)

					258,700			349,800
	Reorganization value in excess of amounts allocated to identifiable assets (note 2)				132,900			—
	Intangible assets, net				—			39,300
	Other assets, net (note 3)				3,000			6,400

				$	453,600		$	432,500

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
		Accounts payable:
			Film rentals	$	18,000		$	15,700
			Other		35,000			37,900

					53,000			53,600
		Accrued liabilities
			Salaries and wages		5,700			5,300
			Interest		100			2,900
			Other		27,400			20,600

					33,200			28,800
		Current portion of long-term debt (note 4)			3,000			1,900

			Total current liabilities		89,200			84,300
Other liabilities					11,000			41,500
Debt (note 4)					245,600			4,200
Deferred income taxes (note 10)					3,800			—

		Total liabilities not subject to compromise			349,600			130,000
Liabilities subject to compromise (note 1)					—			816,900

		Total liabilities			349,600			946,900
Minority interests in equity of consolidated subsidiaries					4,600			4,900
Stockholders' equity (deficit) (note 6):
	Convertible preferred stock (aggregate liquidation value $57 million, par value $.01 per share, authorized, issued and outstanding of 9.2 and 9.1 million shares, respectively)				100			—
	Common stock (par value $.01 per share, authorized, issued and outstanding of 10.5 and 10.0 million shares, respectively)				100			100
	Additional paid-in capital				96,000			51,100
	Retained earnings (deficit)				3,200			(568,400	)
	Treasury stock				—			(2,100	)

			Total stockholders' equity (deficit)		99,400			(519,300	)

				$	453,600		$	432,500

Commitments and contingencies (note 12)
Subsequent event (note 14)

See accompanying notes to consolidated financial statements.

F-52

UNITED ARTISTS THEATRE COMPANY
AND SUBSIDIARIES

Consolidated Statements of Operations

(Amounts in Thousands)

			Reorganized Company			Predecessor Company
			Forty-Four Weeks Ended January 3, 2002						Fiscal Years Ended
						Nine Weeks Ended March 1, 2001			Fiscal Years Ended
						Nine Weeks Ended March 1, 2001			December 28, 2000		December 30, 1999
Revenue:
	Admissions		$	322,200		$	69,100		372,400		433,100
	Concession sales			130,100			26,900		154,600		174,400
	Other			19,200			3,200		23,300		23,900

				471,500			99,200		550,300		631,400

Costs and expenses:
	Film rental and advertising expenses			179,300			36,200		204,900		244,000
	Direct concession costs			14,800			3,100		18,000		22,700
	Other operating expenses			181,400			35,700		227,500		264,000
	Sale and leaseback rentals (note 12)			14,800			2,900		16,900		16,800
	General and administrative			16,800			3,200		21,300		22,600
	Depreciation and amortization			35,600			6,800		44,800		53,500
	Asset impairments, lease exit and restructure costs (note 8)			2,900			1,100		55,100		61,600
	Gain on disposition of assets, net			(2,100	)		(4,600	)	(14,400	)	(4,500	)

				443,500			84,400		574,100		680,700

		Operating income (loss) from continuing operations		28,000			14,800		(23,800	)	(49,300	)
Other income (expense):
	Interest, net (note 4)			(18,200	)		(6,900	)	(69,500	)	(67,700	)
	Minority interests in earnings of consolidated subsidiaries			(100	)		(1,100	)	(2,000	)	(1,000	)
	Other, net			(2,900	)		100		(2,200	)	(5,800	)

				(21,200	)		(7,900	)	(73,700	)	(74,500	)

	Income (loss) before reorganization items, income tax expense, discontinued operations, and extraordinary items			6,800			6,900		(97,500	)	(123,800	)
Reorganization items (note 1):				—			64,900		(25,400	)	—

	Income (loss) before income tax expense, discontinued operations and extraordinary item			6,800			71,800		(122,900	)	(123,800	)
Income tax expense (note 10)				(3,600	)		—		(700	)	(1,100	)

	Income (loss) before discontinued operations and extraordinary items			3,200			71,800		(123,600	)	(124,900	)
Discontinued operations (note 9)				—			—		—		(2,400	)

	Income (loss) before extraordinary item			3,200			71,800		(123,600	)	(127,300	)
Extraordinary item, net of income taxes (note 1)				—			462,600		—		—

	Net income (loss)		$	3,200		$	534,400		(123,600	)	(127,300	)

See accompanying notes to consolidated financial statements

F-53

UNITED ARTISTS THEATRE COMPANY
AND SUBSIDIARIES

Consolidated Statement of Stockholders' Equity (Deficit) and Comprehensive Income

(Amounts in Thousands)

		Preferred stock		Common stock		Additional paid-in capital		Retained earnings/ (Accumulated deficit)		Accumulated other comprehensive income		Treasury stock		Total stockholders' equity (deficit)
Balance at December 31, 1998		$	—	100		51,100		(317,500	)	—		(1,900	)	$	(268,200	)
	Treasury stock purchases		—	—		—		—		—		(200	)		(200	)
Comprehensive income
	Net loss		—	—		—		(127,300	)	—		—			(127,300	)
	Unrealized holding gain		—	—		—		—		1,600		—			1,600

Comprehensive income															(125,700	)
Balance at December 30, 1999			—	100		51,100		(444,800	)	1,600		(2,100	)		(394,100	)
Comprehensive income
	Net loss		—	—		—		(123,600	)	—		—			(123,600	)
	Realized holding gain		—	—		—		—		(1,600	)	—			(1,600	)

Comprehensive income															(125,200	)
Balance at December 28, 2000			—	100		51,100		(568,400	)	—		(2,100	)		(519,300	)
Net income			—	—		—		534,400		—		—			534,400
Adjustment to predecessor equity accounts in connection with fresh-start reporting			—	(100	)	(51,100	)	34,000		—		2,100			(15,100	)
Issuance of equity in Reorganized Company			100	100		96,000		—		—		—			96,200


Balance at March 2, 2001			100	100		96,000		—		—		—			96,200
Net income and comprehensive income			—	—		—		3,200		—		—			3,200

Balance at January 3, 2002		$	100	100		96,000		3,200		—		—		$	99,400

See accompanying notes to consolidated financial statements.

F-54

UNITED ARTISTS THEATRE COMPANY
AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Amounts in Thousands)

			Reorganized Company			Predecessor Company
			Forty-Four Weeks Ended January 3, 2002						Fiscal Years Ended
						Nine Weeks Ended March 1, 2001			Fiscal Years Ended
						Nine Weeks Ended March 1, 2001			December 28, 2000		December 30, 1999
Net income (loss)			$	3,200		$	534,400		(123,600	)	(127,300	)
	Non-cash expense associated with discontinued operations			—			—		(200	)	1,100
	Effect of leases with escalating minimum annual rentals			3,100			600		4,700		4,800
	Depreciation and amortization			35,600			6,800		44,800		53,500
	Provision for impairments and lease exit costs			2,900			1,100		49,000		54,700
	Reorganization items			—			(64,900	)	25,400		—
	Gain on disposition of assets, net			(2,100	)		(4,600	)	(14,400	)	(4,500	)
	Minority interests in earnings of consolidated subsidiaries			100			1,100		2,000		1,000
	Early lease termination payments			—			—		(500	)	(2,100	)
	Extraordinary gain on extinguishments of debt			—			(462,600	)	—		—
	Deferred income taxes			(2,400	)		—		—		—
	Change in assets and liabilities:
		Receivables		(4,100	)		2,200		(500	)	(200	)
		Prepaid expenses and concession inventory		(5,100	)		(3,800	)	3,800		(1,500	)
		Other assets		(800	)		(200	)	—		700
		Accounts payable		—			(10,600	)	(2,500	)	5,600
		Accrued and other liabilities		8,400			(2,200	)	10,800		4,700

Net cash provided by (used in) operating activities				38,800			(2,700	)	(1,200	)	(9,500	)

Cash flow from investing activities:
	Capital expenditures			(12,800	)		(600	)	(18,200	)	(64,500	)
	Change in receivable from sale and leaseback escrow			—			—		—		5,200
	Proceeds from sale and leaseback transaction and escrow			—			—		—		5,400
	Proceeds from disposition of assets, net			16,900			4,500		17,000		12,600
	Change in investments and receivables, net			—			—		4,100		2,400
	Other, net			2,000			(1,200	)	(1,400	)	3,500

		Net cash provided by (used in) investing activities		6,100			2,700		1,500		(35,400	)

Cash flow from financing activities:
	Debt borrowings			68,000			22,500		17,000		144,000
	Debt repayments			(87,200	)		(16,800	)	(16,100	)	(76,300	)
	Decrease in cash overdraft			(1,500	)		(3,100	)	(100	)	(9,800	)
	Other, net			(1,300	)		—		(500	)	(5,200	)

		Net cash provided by (used in) financing activities		(22,000	)		2,600		300		52,700

Net cash used in reorganization items				(6,400	)		(7,000	)	(5,200	)	—

		Net increase (decrease) in cash and cash equivalents		16,500			(4,400	)	(4,600	)	7,800
Cash and cash equivalents:
	Beginning of period			7,000			11,400		16,000		8,200

	End of period		$	23,500		$	7,000		11,400		16,000

Supplemental cash flow information:
	Cash paid for interest		$	6,100		$	7,900		50,100		64,100

	Cash paid for income tax		$	100		$	—		600		500

See accompanying notes to consolidated financial statements.

F-55

UNITED ARTISTS THEATRE COMPANY
AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Chapter 11 Reorganization and Basis of Presentation

The accompanying consolidated financial statements include the accounts of United Artists Theatre Company ("United Artists") and those of all majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. United Artists owns all of the outstanding capital stock of the United Artists Theatre Circuit, Inc. ("UATC"), and all of the outstanding capital stock of United Artists Realty Company ("UAR"). UAR and its subsidiary United Artists Properties I Corp. ("Prop I") are the owners and lessors of certain operating theatre properties leased to and operated by UATC.

On September 5, 2000 (the "Petition Date") United Artists Theatre Company and certain of its subsidiaries, (collectively, the "Debtors") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the "Chapter 11 Cases"), as well as a joint plan of reorganization. On January 22, 2001 the joint plan of reorganization, as amended, (the "Plan"), was approved by the Court, and the Debtors declared the Plan to be effective on March 2, 2001 (the "Effective Date"). In conjunction with the reorganization, the Predecessor Company's bank credit facility as it existed before the Petition Date (the "Pre-Petition Credit Facility") was restructured into a Restructured Term Credit Facility (the "Term Facility") of approximately $252.2 million, and an additional $35.0 million Revolving Credit Facility was obtained.

On March 2, 2001, United Artists Theatre Company adopted fresh-start reporting in accordance with AICPA Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code" ("SOP 90-7"). Under fresh-start reporting, the reorganization value of United Artists, which represents the fair value of all of United Artists' assets (net of liabilities), was determined through negotiations between United Artists' management and its pre-petition creditors and such reorganization value is allocated to United Artists' assets based on their relative fair values. Liabilities, other than deferred income taxes, are also stated at their fair values. Deferred taxes are determined in accordance with Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards No. 109. Application of SOP 90-7 creates a new reporting entity having no retained earnings or accumulated deficit. The estimated reorganization value of United Artists as of March 2, 2001 was approximately $360 million.

United Artists' post-reorganization balance sheet, statement of operations and statements of cash flow which reflect the application of fresh-start reporting, have not been prepared on a consistent basis with the pre-reorganization financial statements and are not comparable in all respects to the financial statements prior to the reorganization. Accordingly, for periods prior to March 2, 2001, the assets and liabilities of United Artists and the related consolidated financial statements are referred to herein as "Predecessor Company", and for periods subsequent to March 1, 2001, the assets and liabilities of United Artists and the related consolidated financial statements are referred to herein as "Reorganized Company". The "Company" and "United Artists" refer to both Reorganized Company and Predecessor Company.

As a consequence of the Plan, on March 2, 2001, the Reorganized Company's capital structure consisted of approximately $252.2 million of debt under the Term Facility, convertible preferred stock with a par value of $0.1 million and a liquidation value of $57 million and $96 million in Additional Paid-in Capital. The Anschutz Corporation ("TAC"), affiliates of which were pre-petition senior lenders, converted 100% of its senior debt into a combination of convertible preferred stock, common stock and 3.7 million warrants ($10.00 exercise price) to purchase common stock of United Artists

F-56

which, in aggregate, represents approximately 54% of the fully diluted common equity of United Artists. Other senior lenders under the Pre-Petition Credit Facility received common stock in United Artists representing approximately 29% of the fully diluted common stock and subordinated lenders received 1.8 million common stock warrants with an exercise price of $10.00 per share representing approximately 7% of the fully diluted common stock, with the remaining fully diluted common stock (approximately 10%) reserved for management stock options.

The filing of the Chapter 11 Cases by the Debtors (i) automatically stayed actions by creditors and other parties in interest to recover any claim that arose prior to the commencement of the Chapter 11 Cases, and (ii) served to accelerate, for purposes of allowance, all pre-bankruptcy filing liabilities of the Predecessor Company, whether or not those liabilities were liquidated or contingent on the Petition Date. In accordance with SOP 90-7 the following table sets forth the liabilities of the Predecessor Company subject to compromise as of March 1, 2001 (amounts in thousands):

Trade accounts payable and other		$	30,800
Debt and related accrued interest			740,700
Lease exit costs			39,600

	Total liabilities subject to compromise	$	811,100

Additional liabilities subject to compromise may arise subsequent to the Petition Date resulting from the determination by the bankruptcy court (or through agreement by the parties in interest) of allowed claims for contingencies and other disputed amounts.

The above summary of liabilities subject to compromise excludes certain obligations existing on the Petition Date with respect to which the Predecessor Company received approval from the court to continue to service in the normal course of business. These obligations primarily include the pre-petition film licensing agreements and other amounts owing to the motion picture studios, employee compensation and other essential trade creditors.

A settlement agreement was reached with the committee representing the unsecured creditors in the Chapter 11 Cases. As a result of this agreement and its approval through confirmation of the Plan, a pool of $5.0 million in cash and $1.1 million in payment-in-kind notes was established for distribution on a pro rata basis to the Predecessor Company's unsecured creditors. The payment-in-kind notes earn "in-kind" interest at 8% with one third of the principal payable during March 2005, one-third payable during March 2006 and the remaining one third, along with all accrued interest, payable during March 2007.

The discharge of obligations subject to compromise for less than the recorded amounts resulted in an extraordinary gain on discharge of debt of $462.6 million.

In accordance with SOP 90-7, all costs and expenses incurred in connection with the Predecessor Company's reorganization from the Petition Date to the Effective Date have been reflected as reorganization items in the accompanying consolidated statement of operations.

F-57

Reorganization items (expenses) recorded by the Predecessor Company during the nine weeks ended March 1, 2001 and the fifty-two weeks ended December 28, 2000 consisted of the following:

	March 1, 2001			December 28, 2000
Adjustments of assets and liabilities to fair value	$	71,800		—
Professional fees		(6,400	)	(4,900	)
Asset impairments		(400	)	(3,800	)
Deferred loan costs		—		(16,400	)
Other		(100	)	(300	)

	$	64,900		(25,400	)

(2) Fresh-Start Reporting

In connection with the emergence from bankruptcy, United Artists adopted fresh-start reporting in accordance with the requirements of SOP 90-7. The application of SOP 90-7 resulted in the creation of a new reporting entity.

Under fresh-start reporting, the reorganization value of the entity has been allocated to United Artists' assets and liabilities on a basis substantially consistent with purchase accounting. The fresh-start reporting adjustments, primarily related to the adjustment of United Artists' assets and liabilities to fair market values, will have a significant effect on United Artists' future statements of operations.

F-58

The effects of the reorganization and fresh-start reporting on United Artists' balance sheet as of March 2, 2001 are as follows (in thousands):

			Predecessor Company									Reorganized Company
			March 2, 2001			(a) Discharge of Debt		(b) Settlement with Stockholders		(c) Fresh-Start Adjustments		March 2, 2001
Assets
Current assets:
	Cash and cash equivalents		$	7,500		—		—		(500	)	7,000
	Receivables, net
		Notes		1,500		—		—		—		1,500
		Other		4,500		—		—		—		4,500

				6,000		—		—		—		6,000
	Prepaid expenses and concession inventory			16,500		—		—		(600	)	15,900
	Other assets			1,500		—		—		—		1,500

		Total current assets		31,500		—		—		(1,100	)	30,400
Investments and related receivables				3,000		—		—		(100	)	2,900
Property and equipment, at cost:
	Land			31,200		—		—		14,100		45,300
	Theatre buildings, equipment and other			544,800		—		—		(300,200	)	244,600

				576,000		—		—		(286,100	)	289,900
	Less accumulated depreciation and amortization			(233,300	)	—		—		233,300		—

				342,700		—		—		(52,800	)	289,900
Reorganization value in excess of amounts allocated to identifiable assets				—		—		—		142,600		142,600
Intangible assets, net				38,600		—		—		(38,600	)	—
Other assets, net				6,700		—		—		(6,000	)	700

			$	422,500		—		—		44,000		466,500

Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
	Accounts payable
		Film rentals	$	19,400		—		—		—		19,400
		Other		20,800		10,400		—		4,000		35,200

				40,200		10,400		—		4,000		54,600
	Accrued liabilities
		Salaries and wages		5,500		—		—		(1,500	)	4,000
		Interest		100		—		—		—		100
		Other		24,400		2,900		—		—		27,300

				30,000		2,900		—		(1,500	)	31,400
	Current portion of long-term debt			7,000		1,900		—		—		8,900

		Total current liabilities		77,200		15,200		—		2,500		94,900
Other liabilities				44,600		—		—		(36,500	)	8,100
Debt				4,100		252,200		—		—		256,300
Deferred income taxes				—		—		—		6,200		6,200

		Total liabilities not subject to compromise		125,900		267,400		—		(27,800	)	365,500
Liabilities subject to compromise				811,100		(811,100	)	—		—		—

		Total liabilities		937,000		(543,700	)	—		(27,800	)	365,500
Minority interests in equity of consolidated subsidiaries				4,800		—		—		—		4,800
Stockholders' equity (deficit):
	Convertible preferred stock			—		—		100		—		100
	Common stock			100		—		—		—		100
	Treasury stock			(2,100	)	—		2,100		—		—
	Additional paid-in capital			51,300		81,100		(36,400	)	—		96,000
	Accumulated deficit			(568,600	)	462,600		106,000		—		—

		Total stockholders' equity (deficit)		(519,300	)	543,700		71,800		—		96,200

			$	422,500		—		71,800		(27,800	)	466,500

(a): To record the debt discharge and the issuance of new debt under the Term Facility of $252.2 million, and to record the settlement with the Predecessor Company's creditors, up to $10.0 million of which may be available for distribution on a pro rata basis to the Predecessor Company's unsecured creditors.
(b): To record the elimination of the Predecessor Company's equity and related accounts.
(c): To record the adjustments to reflect the assets and liabilities at their fair values and to adjust the accumulated deficit to zero.

F-59

The implementation of the Plan also resulted in, among other things, the satisfaction or disposition of various types of claims against the Predecessor Company, the assumption and rejection of certain leases and agreements, and the establishment of a new board of directors following the Effective Date, along with new employment and other arrangements with certain members of management.

(3) Summary of Significant Accounting Policies

(a) Cash and Cash Equivalents

United Artists considers investments with initial maturities of three months or less to be cash equivalents.

(b) Inventory

United Artists accounts for inventory on a first in, first out basis and at the lower of cost and replacement value.

Investments in which United Artists' ownership is 20% to 50% are generally accounted for using the equity method. Under this method, the investment, originally recorded at cost, is adjusted to recognize dividends received and United Artists' share of net earnings or losses of the investee as they occur. Investments in which United Artists' ownership is less than 20% are accounted for using the cost method. Under this method, the investments are recorded at cost and any dividends received are recorded as income.

(d) Property and Equipment

Property and equipment are stated at cost, including acquisition costs allocated to tangible assets acquired. Construction costs, including applicable direct overhead and interest, are capitalized. United Artists capitalized $0.2 million, $0.0 million, $0.4 million and $0.8 million of interest related to its various construction projects during the forty-four weeks ended January 3, 2002, the nine weeks ended March 1, 2002, and the fiscal years ended December 28, 2000 and December 30, 1999, respectively. Repairs and maintenance are charged to operations.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, which range from 3 to 40 years. Leasehold improvements are amortized over the terms of the leases, including certain renewal periods or, in the case of certain improvements, the estimated useful lives of the assets, if shorter. Costs associated with new theatre construction are depreciated once such theatres are placed in service.

(e) Impairment of Long-Lived Assets

United Artists provides for the impairment of long-lived assets, including goodwill, pursuant to Statement of Financial Accounting Standards No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of ("SFAS 121"), which requires that long-lived assets and certain identifiable intangibles held and used by an entity to be reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when estimated undiscounted future cash flows to be generated by the asset are less than its carrying value. Measurement of the impairment loss

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is based on the estimated fair value of the asset, which is generally determined using valuation techniques such as the discounted present value of expected future cash flows.

(f) Reorganization Value in Excess of Amounts Allocated to Identifiable Assets

United Artists has reorganization value in excess of amounts allocated to identifiable assets of $132.9 million, net of accumulated amortization of $9.7 million, at January 3, 2002. This asset is being amortized over approximately a 19 year period, based on the underlying lease terms of the specific locations. The carrying value of the reorganization asset will be periodically reviewed if the facts and circumstances suggest that it may be impaired. United Artists will measure the impairment based upon future cash flows of United Artists over the remaining amortization period.

(g) Other Assets

Other assets consist primarily of deferred loan costs, long term receivables and other assets. Amortization of the deferred loan costs is calculated on a straight-line basis over the terms of the underlying loan agreements and is included as a component of interest expense. Other assets and related accumulated amortization as of the fiscal year ends 2001 and 2000 are summarized as follows (amounts in thousands):

	January 3, 2002			December 28, 2000
Deferred loan costs	$	2,100		$	900
Other long term receivables		800			700
Prepaid rent		500			5,500

		3,400			7,100
Accumulated amortization		(400	)		(700	)

	$	3,000		$	6,400

(h) Operating Costs and Expenses

Film rental and advertising expenses include film rental and co-op and directory advertising costs. Film advertising costs are expensed as incurred. Direct concession costs include direct concession product costs and concession promotional expenses. Concession promotional expenses are expensed as incurred. Other operating expenses include common facility costs such as employee costs, theatre rental and utilities, which are common to both ticket sales and concession operations. As such, other operating expenses are reported as a combined amount as the allocation of such costs to exhibition and concession activities would be arbitrary and not meaningful. Rental expense for operating leases which provide for escalating minimum annual rentals during the term of the lease are accounted for on a straight-line basis over the terms of the underlying leases.

(i) Income Taxes

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and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(j) Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

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

(k) Stock-Based Compensation

United Artists accounts for its stock option plan in accordance with the provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations, 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. Under SFAS No. 123, Accounting for Stock-Based Compensation, entities are permitted to recognize as expense the fair value of all stock-based awards on the date of grant over the vesting period. Alternatively, SFAS No. 123 also allows entities to continue to apply the provisions of APB Opinion No. 25 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. United Artists has elected to continue to apply the provisions of APB Opinion No. 25 and provide the pro forma disclosures required by SFAS No. 123.

(l) Reclassification

Certain prior year amounts have been reclassified for comparability with the 2001 presentation.

(m) Reporting Period

United Artists' reporting period is based on a calendar that coincides with film playweeks and other public reporting theatre operators. Each fiscal year ends on the Thursday closest to December 31, which results in a fifty-two or fifty-three week fiscal year. The year ended January 3, 2002 includes fifty-three weeks.

(n) Impact on Recently Issued Accounting Standards

In June 2001, the FASB issued SFAS No. 141, "Business Combinations", which is effective immediately. SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001 and eliminates the pooling-of-interests method.

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The adoption of this standard will not have a material impact on the financial position or the results of operations of United Artists.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets", which is effective for fiscal years beginning after December 15, 2001. SFAS No. 144 establishes one accounting model to be used for long-lived assets to be disposed of by sale and broadens the presentation of discontinued operations to include more disposal transactions. The adoption of this standard is not expected to have a material impact on the financial position or the results of operations of United Artists.

(4) Debt

As a result of the Plan being declared effective on March 2, 2001, substantially all of the debt existing prior to that date was replaced by the Term Facility and a new $35.0 million Revolving Credit Facility.

Debt is summarized as follows (amounts in thousands):

		January 3, 2002			December 28, 2000
Term Facility(a)		$	240,600		$	—
Revolving Credit Facility(b)			—			—
Other(c)			8,000			7,800
Pre-Petition Credit Facility			—			439,700
Senior Subordinated Notes			—			275,000
Debtor in Possession Facility			—			—

			248,600			722,500
Less current portion			(3,000	)		(1,900	)
Less amounts subject to compromise			—			(716,400	)

	Long term debt	$	245,600		$	4,200

(a): The Term Facility represents a 72.5% reinstatement of the amounts owed to all lenders, other than TAC and its affiliates, under the Pre-Petition Credit Facility. Borrowers under the Term Facility include United Artists, UATC, UAR, and certain of UAR's subsidiaries. The Term Facility provides for interest to be accrued at varying rates, with interest payable monthly. The interest rate at

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January 3, 2002 was 5.93%. Principal payments under the Term Facility are $0.6 million quarterly from June 30, 2001 through December 31, 2003 and $6.3 million payable each quarter during 2004, with the remaining principal balance due on February 2, 2005. Additional principal repayments may also be required as a result of asset sales or the issuance of certain debt or equity securities.

The Term Facility is secured by, among other things, the capital stock of certain subsidiaries of UATC, mortgages on certain of UATC's, UAR's and Prop I's properties, and a security interest in substantially all assets of United Artists, UATC, and their subsidiaries. All such security interests held by the lenders under the Term Facility are subordinate to the security interests held by the lenders under the $35.0 million Revolving Credit Facility as described in (b).

The Term Facility contains certain provisions that require United Artists to maintain certain financial ratios and places limitations on, among other things, capital expenditures and additional indebtedness.

(b)

The $35.0 million Revolving Credit Facility (the "Revolver") is a $35.0 million revolving credit facility (with a sublimit of $10.0 million related to the issuance of letters of credit, of which there were $0.8 million outstanding at January 3, 2002) repayable in full on August 2, 2004. The commitment may be reduced as the result of issuance of certain debt or equity securities. Borrowers under the Revolver include United Artists, UATC, UAR, and certain of UAR's subsidiaries. The Revolver provides for interest to be accrued at varying rates, with interest payable monthly. The interest rate at January 3, 2002 was 4.68%.

The Revolver is secured by the same collateral as is the Term Facility.

The Revolver contains certain provisions that require United Artists to maintain certain financial ratios and places limitations on, among other things, capital expenditures and additional indebtedness. Such provisions are substantially the same as those within the Term Facility as described in (a) above.

(c)

Other debt includes $2.7 million of equipment lease obligations, $1.1 million of payment-in-kind notes and $4.2 million of mortgages secured by land and buildings as of January 3, 2002 and $3.2 million of capital lease obligations and $4.6 million of mortgages secured by land and buildings as of December 28, 2000.

The aggregate annual maturities of long-term debt are as follows:

Year ending December:
	2002		$	3,000
	2003			2,900
	2004			25,700
	2005			211,500
	Thereafter			5,500

		Total	$	248,600

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(4) Debt (Continued)

Interest, net includes amortization of deferred loan costs of $0.5 million, $0.5 million, $2.6 million, and $2.2 million for the forty-four weeks ended January 3, 2002, the nine weeks ended March 1, 2001, and the fiscal years ended December 28, 2000, and December 30, 1999, respectively. Additionally, interest, net includes interest income of $0.3 million, $0.1 million, $0.4 million and $1.3 million for the forty-four weeks ended January 3, 2002, the nine weeks ended March 2, 2001 and the fiscal years ended December 28, 2000 and December 30, 1999, respectively.

The Predecessor Company had contractual interest of $11.7 million for the nine weeks ended March 1, 2001 and $76.9 million for the fifty-two weeks ended December 28, 2000.

(5) Disclosures About Fair Value of Financial Instruments

Cash and Cash Equivalents

The carrying amount of cash and cash equivalents approximates fair value because of its short maturity.

Financial Instruments

The carrying amount and estimated fair value of United Artists' financial instruments at January 3, 2002 are summarized as follows (amounts in thousands):

		Carrying Amount			Estimated Fair Value
Term Facility		$	240,600		237,000
Debt			8,000		8,000

The fair value of United Artists borrowings under the Term Facility is estimated based on dealer quotes at January 3, 2002. The fair value of other debt is assumed to approximate its carrying value.

(6) Stockholders' Equity (Deficit)

Common Stock

At January 3, 2002, United Artists had outstanding 10,000,000 shares of common stock, $0.01 par value per share.

Convertible Preferred Stock

United Artists has authorized for issuance 9.2 million shares of convertible preferred stock with a par value of $.01 per share. At January 3, 2002, United Artists has 9.1 outstanding shares of Series A Convertible Preferred Stock which are convertible into common stock at the option of the holder at a conversion price of $6.25 per share. The preferred shares have a stated liquidation preference of $6.25 per share or $57 million in the aggregate, are not entitled to receive cash dividends, are senior to all common stock, and have a weighted voting right equal to the number of shares of common stock into which they would be converted.

Warrants

In connection with the reorganization as discussed in Note 1 and 2, United Artists issued 5.6 million warrants to certain creditors with a fair value of $0.28 per warrant. Each warrant is

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convertible into one share of new common stock at an exercise price of $10 per share. The warrants expire in March 2008.

Stock Option Plans

United Artists has adopted a stock option plan, pursuant to which United Artists' Board of Directors may issue common shares and grant incentive stock options to employees, directors and consultants. The plan authorizes common stock issuances and grants of options to purchase up to 2,746,666 shares of common stock. The options generally vest over 60 months and expire upon the earlier of three years after termination of employment or ten years from the date of grant. At January 3, 2002, there were options for 2,030,700 shares outstanding, and options for 715,966 shares available for grant under the plan.

As discussed in note 3, United Artists utilizes APB Opinion No. 25 to account for its employee stock options. If United Artists determined compensation costs based on the fair value of the options at the grant date under FASB Statement No. 123, "Accounting for Stock Based Compensation", United Artists' net earnings would have been approximately $2.6 million for the forty-four weeks ended January 3, 2002 as compared to the reported $3.2 million.

Option activity during the forty-four weeks ended January 3, 2002, consisted of the following:

	Number of Options	Weighted Average Exercise Price	Options Exercisable
Balance at March 2, 2001	—
Granted	2,030,700	6.05

Balance at January 3, 2002	2,030,700	6.05	192,270

The following table summarizes information about stock options outstanding at January 3, 2002.

Exercise Price		Number Outstanding	Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number Exercisable as of January 3, 2002	Weighted Average Exercise Price
$	5.00	1,703,222	9.17	$	5.00	170,322	$	5.00
	10.00	219,478	9.17		10.00	21,948		10.00
	14.50	108,000	9.17		14.50	—		—

		2,030,700	9.17		6.05	192,270	$	5.57

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(7) Employee Benefits Plan

The UATC 401(k) Savings Plan (the "Savings Plan") provides that employees may contribute up to 20% of their compensation, subject to Internal Revenue Service limitations, to the Savings Plan. Employee contributions are invested in various investment funds based upon elections made by the employee. Depending on the amount of each employee's level of contribution, the Savings Plan currently matches up to 4% of their compensation.

Contributions to the Savings Plan were $0.6 million and $0.1 million, respectively, for the forty-four weeks ended January 3, 2002 and nine weeks ended March 1, 2001, and for the fiscal years ended December 2000 and 1999 were $0.8 million and $0.7 million, respectively and are included in the other operating expense category.

(8) Asset Impairments, Lease Exit and Restructure Costs

The following table relates the detailed components of the expenses for asset impairments, lease exit and restructure costs: (amounts in thousands)

					Fiscal Years
	Forty-Four Weeks Ended January 3, 2002		Nine Weeks Ended March 1, 2001		Fiscal Years
	Forty-Four Weeks Ended January 3, 2002		Nine Weeks Ended March 1, 2001		2000	1999
Asset impairments	$	2,900	$	1,100	37,800	35,700
Lease exit costs		—		—	11,300	22,700
Restructure costs		—		—	6,000	300
Other		—		—	—	2,900

	$	2,900	$	1,100	55,100	61,600

Lease Exit Costs

During 2000 and 1999, United Artists continued to pursue a strategy intended to identify and divest of or renegotiate the leases of under-performing and non-strategic theatres and properties. As part of the disposition plan United Artists recorded estimated lease termination costs of $11.3 million and $22.7 million in 2000 and 1999, respectively.

Restructure Costs

Costs relating to United Artists' restructuring and Chapter 11 reorganization, exclusive of those amounts incurred subsequent to the petition date which are classified as reorganization items in the accompanying statement of operations, were $6.0 million for the fiscal year ended December 28, 2000.

(9) Discontinued Operations

During 1998, United Artists established a plan to dispose of its entertainment center business operations, and operations in all of the entertainment centers ceased during 1999. At December 30, 1999, United Artists established an additional reserve of $2.4 million related to estimated costs necessary to terminate three remaining leases and settle remaining litigation related to the entertainment centers. At December 28, 2000, liabilities subject to compromise included a $2.2 million reserve for such lease termination costs. As part of the application of fresh start accounting, all liabilities subject to compromise were discharged on March 2, 2001.

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(10) Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operation gloss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The benefit of United Artists' deferred tax asset has been reduced by a valuation allowance.

The components of the provision for income taxes are as follows (amounts in thousands):

								Fiscal Years
			Forty-Four Weeks Ended January 3, 2002			Nine Weeks Ended March 1, 2001		Fiscal Years
			Forty-Four Weeks Ended January 3, 2002			Nine Weeks Ended March 1, 2001		2000		1999
Current income taxes:
	Federal		$	5,400		$	—		400	700
	State			600		$	—		300	400

		Total		6,000		$	—		700	1,100

Deferred income taxes:			$	—
	Federal			(2,200	)	$	—	$	—	—
	State			(200	)	$	—	$	—	—

		Total deferred provision (benefit)		(2,400	)	$	—	$	—	—

		Total income tax provision	$	3,600		$	—		700	1,100

With respect to the nine weeks ended March 1, 2001, income tax expense pertains to both income before extraordinary times as well a certain adjustments necessitated by the effectiveness of the Plan and the required fresh start adjustment in accordance with SOP 90-7 to United Artists' financial statements.

For the years ended 2000 and 1999, income tax expense pertains to income before extraordinary items, and is largely a result of activity related to subsidiaries consolidated for financial reporting purposes, but not for tax purposes. No income tax expense was recognized with respect to the extraordinary gain resulting from the cancellation of indebtedness that occurred in connection with the effectiveness of the Plan as such gain is exempt from income taxation.

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Income tax expense differed form the amount computed by applying the U.S. Federal income tax rat (35% for all periods) to income (loss) before income tax expense as a result of the following (amounts in thousands):

								Fiscal Years
			Forty-Four Weeks Ended January 3, 2002		Nine Weeks Ended March 1, 2001			Fiscal Years
			Forty-Four Weeks Ended January 3, 2002		Nine Weeks Ended March 1, 2001			2000		1999
Expected tax provision (benefit)			$	2,400	$	187,000		(43,200	)	(44,200	)
State tax net of federal benefit				400		—		—		—
Change in valuation allowance
	Gain from discharge of indebtedness			—		(147,200	)	—		—
	Other			—		5,700		46,200		46,000
Fresh start adjustments				—		(49,000	)	—		—
Reorganization costs				700		2,200		—		—
Increase in basis of assets				—		—		—		200
Other				100		1,300		(2,300	)	(900	)

		Provision for income taxes	$	3,600	$	0		700		1,100

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at January 3, 2002 and December 28, 2000 are as follows (amounts in thousands):

			January 3, 2002			December 28, 2000
Deferred tax assets:
	Net operating loss carryforwards		$	33,600		$	137,500
	Intangible and other assets			10,100			14,900
	Accrued liabilities			1,100			7,500
	Property and equipment			8,300			37,800
	Deferred revenue			5,900			4,700
	Other			8,300			6,000

				67,300			208,400
	Less valuation allowance			(66,200	)		(207,700	)

		Net deferred tax assets		1,100			700

Deferred tax liabilities:
	Property and equipment			(3,800	)		—
	Other			(1,100	)		(700	)

		Net deferred tax liabilities		(4,900	)		(700	)

		Total net deferred tax liability	$	(3,800	)	$	—

At the effective date of the Plan, the Predecessor Company had available net operating loss ("NOL") carryforwards for federal income tax purposes of approximately $359 million. These NOL carryforwards have been reduced as a result of the discharge and cancellation of various pre-petition

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liabilities under the Plan. The Reorganized Company has not recorded a financial statement benefit for the NOL carryforwards because the criterion to record a benefit has not been satisfied. After the reduction, for federal income tax purposes as of January 3, 2002, the Reorganized Company has available NOL carryforwards of approximately $83.5 million with expiration commencing during 2007. Further, as a result of a statutory "ownership change" (as defined in Section 382 of the Internal Revenue Code) that occurred as a result of the effectiveness of the Plan, the Reorganized Company's ability to utilize its NOL carryforwards and certain deferred tax assets for federal income tax purposes is restricted to approximately $5 million per annum.

If United Artists, in future tax periods, were to recognize tax benefits attributable to tax attributes of the Predecessor Company (such as NOL carryforwards), such benefit would be applied to reduce certain balance sheet asset sin accordance with Financial Accounting Standards Board statement No. 109 Accounting for Income Taxes.

(11) Segment Information

United Artists' operations are classified into three business segments: Theatre Operations, In-Theatre Advertising and The Satellite Theatre Network® ("STN"). In-Theatre Advertising sells various advertising within its theatres and on United Artists' web page. STN rents theatre auditoriums for seminars, corporate training, business meetings and other educational or communication uses, product and consumer research and other entertainment uses. Theatre auditoriums are rented individually or on a networked basis.

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The following table presents certain information relating to the Theatre Operations, In-Theatre Advertising and STN segments for each of the last three years (amounts in thousands):

		Theatre Operations			In-Theatre Advertising	STN	Total
As of and for the forty-four weeks ended January 3, 2002
	Revenue	$	460,000		8,700	2,800	471,500
	Operating income		18,700		8,200	1,100	28,000
	Depreciation and amortization		35,200		100	300	35,600
	Assets		451,900		400	1,300	453,600
	Capital expenditures		12,400		—	400	12,800

As of and for the nine weeks ended March 1, 2001
	Revenue	$	97,000		1,200	1,000	99,200
	Operating income		13,300		1,200	300	14,800
	Depreciation and amortization		6,800		—	—	6,800
	Assets		415,900		1,200	5,400	422,500
	Capital expenditures		600		—	—	600
As of and for the Year ended December 28, 2000
	Revenue	$	535,900		10,000	4,400	550,300
	Operating income (loss)		(34,400	)	9,300	1,300	(23,800	)
	Depreciation and amortization		44,300		100	400	44,800
	Assets		425,600		1,200	5,700	432,500
	Capital expenditures		18,200		—	—	18,200
As of and for the Year ended December 30, 1999
	Revenue	$	616,800		8,400	6,200	631,400
	Operating income (loss)		(57,900	)	7,300	1,300	(49,300	)
	Depreciation and amortization		53,200		200	100	53,500
	Assets		528,700		1,700	3,900	534,300
	Capital expenditures		64,500		—	—	64,500

(12) Commitments and Contingencies

United Artists conducts a significant portion of its theatre and corporate operations in leased premises. These leases have non-cancelable terms expiring at various dates after January 3, 2002. Many leases have renewal options. Most of the leases provide for contingent rentals based on the revenue results of the underlying theatre and require the payment of taxes, insurance, and other costs applicable to the property. Also, certain leases contain escalating minimum rental provisions that have been accounted for on a straight-line basis over the initial term of the leases.

UATC and UAR are parties to several sale and leaseback transactions whereby the land and buildings underlying 37 theatres were sold and leased back from unaffiliated third parties pursuant to lease terms averaging 21 years with generally two 5 year renewal options. During late 2000 and early 2001, UATC amended the largest of these sale and leaseback transactions to allow UATC to terminate the master lease with respect to obsolete properties, allow the Owner Trustee to sell up to $35.0 million

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of those properties and pay down the underlying debt at 85% of par, and reduce the amount of rent paid by UATC on the master lease on a pro rata basis to the amount of debt repaid. Gains on the sale and leaseback transactions were deferred and amortized as a reduction of rent expense over the individual theatre lease terms prior to the adoption of SOP 90-7. Under fresh-start reporting the remaining unamortized deferred gain was eliminated. Unamortized deferred gains aggregated $17.7 million, $17.9 million and $19.0 million at March 1, 2001, December 28, 2000 and December 30, 1999, respectively.

Rent expense for theatre and corporate operations is summarized as follows (amounts in thousands):

					Fiscal Years
	Forty-Four Weeks Ended January 3, 2002		Nine Weeks Ended March 1, 2001		Fiscal Years
	Forty-Four Weeks Ended January 3, 2002		Nine Weeks Ended March 1, 2001		2000	1999
Minimum rental	$	70,700	$	11,700	76,400	87,100
Contingent rental		2,900		400	1,500	2,400
Effect of leases with escalating Minimum annual rentals		2,700		600	4,700	4,800
Rent tax		300		100	500	600

	$	76,600	$	12,800	83,100	94,900

Approximately $14.8 million, $2.9 million, $16.9 million and $16.8 million of the minimum rentals reflected in the preceding table for the forty-four weeks ended January 3, 2002, for the nine weeks ended March 1, 2001, 2000 and 1999, respectively, were incurred pursuant to the sale and leaseback transactions.

Future minimum lease payments under noncancelable operating leases for each of the next five years and thereafter are summarized as follows (amounts in thousands):

Fiscal Years	Third Party Leases
2002	$	73,700
2003		72,700
2004		72,500
2005		71,500
2006		66,700
Thereafter		639,700

Upon the filing of the Chapter 11 Cases and petitions, the Bankruptcy Code imposed a stay applicable to all entities, of, among other things, the commencement or continuation of judicial, administrative, or other actions or proceedings against United Artists that were or could have been commenced before the bankruptcy petition.

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made to existing theatres to make such theatres accessible to certain theatre patrons and employees who are disabled. The ADA requires that theatres be constructed in such a manner that persons with disabilities have full use of the theatre and its facilities and reasonable access to work stations. The ADA provides for a private right of action and reimbursement of plaintiff's attorneys' fees and expenses under certain circumstances. United Artists has established a program to review and evaluate United Artists theatres and to make any changes that may be required by the ADA. United Artists estimates the cost to comply with these requirements is $2.5 million to $5.0 million.

(13) Comparative Quarterly Financial Information (unaudited)

	Fiscal Year 2001
	Forty-Four Weeks Ended January 3, 2001		Fourth Quarter	Third Quarter	Second Quarter		Four Weeks Ended March 29, 2001		Nine Weeks Ended March 1, 2001
Revenue	$	471,500	155,000	158,600	128,500		29,400		$	99,200
Operating income (loss) from continuing operations		28,000	13,200	13,000	5,700		(3,900	)		14,800
Income (loss) before reorganization items, income tax expenses, and extraordinary item		6,800	8,600	6,300	(1,200	)	(6,900	)		6,900
Reorganization items		—	—	—	—		—			64,900
Extraordinary item		—	—	—	—		—			462,600
Net income (loss)		3,200	5,100	6,200	(1,200	)	(6,900	)		534,400

	Fiscal Year 2000
	Full Year			Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Revenue	$	550,300		136,700		149,500		138,600		125,500
Operating income (loss) from continuing operations		(23,800	)	9,900		(15,400	)	(17,900	)	(400	)
Loss before reorganization items and income tax expense		(97,500	)	(3,600	)	(37,300	)	(37,400	)	(19,200	)
Reorganization items		(25,400	)	(8,000	)	(17,400	)	—		—
Net loss		(123,600	)	(11,700	)	(54,800	)	(38,000	)	(19,100	)

(14) Events Subsequent to Audit Report Date (unaudited)

On March 8, 2002, the holders of in excess of 80% of the voting stock in United Artists entered into an agreement to exchange their stock for shares of common stock in Regal Entertainment Group. Regal Entertainment Group is an entity formed and controlled by Anschutz, the 84% stockholder of United Artists. Also on March 8, 2002 Regal Entertainment Group agreed to exchange its stock for stock in two other theatre companies also commonly controlled by Anschutz.

F-73

INDEPENDENT AUDITORS' REPORT

The Boards of Directors
Edwards Theatres, Inc. and Subsidiaries:

We have audited the accompanying consolidated balance sheets of Edwards Theatres, Inc. and Subsidiaries (the Company) (formerly Edwards Theatres Circuit Affiliated Group) as of December 27, 2001 and December 26, 2000 and the related consolidated statements of operations and comprehensive loss, stockholders' equity, and cash flows for each of the years in the three-year period ended December 27, 2001. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Edwards Theatres, Inc. and Subsidiaries (formerly Edwards Theatres Circuit Affiliated Group) as of December 27, 2001 and December 26, 2000 and the results of their operations and their cash flows for each of the years in the three-year period ended December 27, 2001 in conformity with accounting principles generally accepted in the United States of America.

/s/ KPMG LLP

Orange County, California
February 22, 2002, except as to note 16,
which is as of April 17, 2002.

F-74

EDWARDS THEATRES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 27, 2001 and December 26, 2000

(In Thousands, Except Share Data)

				2001			2000
Assets
Current assets:
	Cash and cash equivalents			$	44,575		42,145
	Restricted cash				28,151		—
	Accounts receivable				1,194		1,729
	Inventories				997		1,100
	Prepaid expenses and other current assets				4,163		3,617

			Total current assets		79,080		48,591
Property and equipment, net					308,986		351,889
Other assets					9,337		8,237

				$	397,403		408,717

Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable			$	23,358		19,432
	Accrued liabilities				12,314		10,464
	Deferred revenue				14,967		11,115
	Current portion of long-term debt				12,600		213,500
	Bankruptcy related liabilities and claims				43,948		—

			Total current liabilities		107,187		254,511

Long-term debt					167,400		—
Senior unsecured subordinated notes payable to shareholders					10,325		—
Deferred gain on sale-leaseback of assets					6,297		6,769
Accrued lease obligations					17,281		13,048
Other long-term liabilities					4,272		714

			Total long-term liabilities		205,575		20,531

Liabilities subject to compromise					—		68,316

					312,762		343,358

Commitments and contingencies
Subsequent events (note 16)
Preferred stock, $0.001 par value, 1,000,000 shares authorized in 2001:
	Redeemable cumulative Series A preferred stock, $0.001 par value (liquidation and redemption value of $56,000,000), issued and outstanding 56,000 shares				39,703		—
	Redeemable cumulative Series B preferred stock, $0.001 par value (liquidation and redemption value of $15,000,000), issued and outstanding 15,000 shares				7,337		—
Stockholders' equity:
	Common stock (Debtor)				—		189
	Common stock, $0.001 par value, 10,000,000 shares authorized in 2001:
		Class A common stock, $0.001 par value. Authorized 2,000,000 shares; issued and outstanding 510,000 shares in 2001			1		—
		Class B common stock, $0.001 par value. Authorized 2,000,000 shares; issued and outstanding 490,000 shares in 2001			1		—
	Additional paid-in capital				38,889		39
	Retained earnings (accumulated deficit)				(1,290	)	65,131

			Total stockholders' equity		37,601		65,359

				$	397,403		408,717

See accompanying notes to consolidated financial statements.

F-75

EDWARDS THEATRES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Loss

Years ended December 27, 2001, December 26, 2000, and December 28, 1999

(In Thousands)

			2001			2000		1999
Net revenues:
	Admissions		$	254,325		244,716		210,795
	Concessions			91,901		78,855		75,520
	Other			5,824		6,123		6,390

		Total net revenues		352,050		329,694		292,705

Costs and expenses:
	Film exhibition costs			139,237		125,082		115,951
	Concession costs			14,681		15,270		13,302
	Other theatre operating expenses			128,922		129,628		120,961
	General and administrative expenses			15,924		23,807		17,556
	Depreciation and amortization			27,509		27,722		21,543
	Restructuring charges			1,880		—		—
	Net loss on sales and impairments of long-lived assets			18,221		10,962		30,640

		Total costs and expenses		346,374		332,471		319,953

		Operating income (loss)		5,676		(2,777	)	(27,248	)

Other income (expense):
	Interest and other income			399		561		1,202
	Interest expense			(18,203	)	(23,688	)	(12,851	)

		Total other expense		(17,804	)	(23,127	)	(11,649	)

Reorganization costs, net				19,452		18,106		—

		Loss before income taxes and extraordinary item		(31,580	)	(44,010	)	(38,897	)
Income taxes				114		380		636

		Loss before extraordinary item		(31,694	)	(44,390	)	(39,533	)
Extraordinary gain on extinguishment of debt				978		—		—

		Net loss		(30,716	)	(44,390	)	(39,533	)
Less accretion of redeemable preferred stock to redemption value				94		—		—

		Net loss applicable to common stockholders	$	(30,810	)	(44,390	)	(39,533	)

Other comprehensive loss:
	Net loss		$	(30,716	)	(44,390	)	(39,533	)
	Change in unrealized gain on marketable equity securities			—		(613	)	(191	)

		Total comprehensive loss	$	(30,716	)	(45,003	)	(39,724	)

See accompanying notes to consolidated financial statements.

F-76

EDWARDS THEATRES, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

Years ended December 27, 2001, December 26, 2000, and December 28, 1999

(In Thousands, Except Share Amounts)

				Class A common stock			Class B common stock
											Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Income (Loss)
	Common Stock									Additional Paid-in Capital
	Common Stock			Shares	Amount		Shares	Amount		Additional Paid-in Capital					Total
Balance, December 29, 1998	$	87		—	$	—	—	$	—	29	154,511		804		155,431
Distribution to Ed-Pac stockholders		—		—		—	—		—	—	(400	)	—		(400	)
Distribution to stockholders		—		—		—	—		—	—	(4,945	)	—		(4,945	)
Issuance of common stock		102		—		—	—		—	10	—		—		112
Unrealized loss on marketable equity securities		—		—		—	—		—	—	—		(191	)	(191	)
Net loss		—		—		—	—		—	—	(39,533	)	—		(39,533	)

Balance, December 28, 1999		189		—		—	—		—	39	109,633		613		110,474
Distribution to stockholders		—		—		—	—		—	—	(112	)	—		(112	)
Reclassification adjustment for gains on marketable equity securities included in net income		—		—		—	—		—	—	—		(613	)	(613	)
Net loss		—		—		—	—		—	—	(44,390	)	—		(44,390	)

Balance, December 26, 2000		189		—		—	—		—	39	65,131		—		65,359
Distribution to controlling stockholders in excess of contributed net assets		—		—		—	—		—	—	(6,000	)	—		(6,000	)
Issuance of Class A common stock for cash		—		510,000		1	—		—	16,366	—		—		16,367
Distribution of Series B preferred stock under the Plan		—		—		—	—		—	—	(7,315	)			(7,315	)
Class B common stock issued under the Plan to existing common stockholders		(189	)	—		—	490,000		1	188	—		—		—
Constructive capital contribution related to undistributed earnings on date S Corporation elections were terminated		—		—		—	—		—	22,296	(22,296	)	—		—
Net loss		—		—		—	—		—	—	(30,716	)	—		(30,716	)
Series A preferred stock accretion		—		—		—	—		—	—	(71	)	—		(71	)
Series B preferred stock accretion		—		—		—	—		—	—	(23	)	—		(23	)

Balance, December 27, 2001	$	—		510,000	$	1	490,000	$	1	38,889	(1,290	)	—		37,601

See accompanying notes to consolidated financial statements.

F-77

EDWARDS THEATRES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 27, 2001, December 26, 2000, and December 28, 1999

(In Thousands)

					2001			2000		1999
Cash flows from operating activities:
	Net loss				$	(30,716	)	(44,390	)	(39,533	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Noncash reorganization items				9,579		15,249		—
		Extraordinary gain on extinguishment of debt				(978	)	—		—
		Depreciation and amortization				27,509		27,722		21,543
		Amortization of deferred gain on sale leaseback				(472	)	(141	)	(88	)
		Amortization of deferred issuance costs				1,387		2,277		418
		Gain on sale of marketable securities				—		(1,231	)	—
		Net loss on sales and impairments of long-lived assets				18,221		10,962		30,640
		Deferred income taxes				—		338		660
		Provision for doubtful accounts relating to advances from shareholders and other related parties				—		5,342		—
		Changes in operating assets and liabilities:
			Accounts receivable, prepaid expenses, and inventories			92		4,350		(4,216	)
			Accounts payable and accrued liabilities			5,776		1,620		(15,243	)
			Deferred revenue			3,852		(3,547	)	1,231
			Other long-term liabilities			3,555		—		—
			Deferred lease obligations			4,793		4,233		5,159
			Bankruptcy related claims			(29,001	)	—		—

				Net cash provided by operating activities		13,597		22,784		571

Cash flows from investing activities:
	Purchases of property and equipment					(10,190	)	(47,528	)	(145,810	)
	Proceeds from sale of property and equipment					3,736		23,241		87,537
	Change in notes receivable from and advances to related party					—		74		76
	Change in advances to stockholders					—		(45	)	(333	)
	Proceeds from sale of marketable securities					—		1,834		—
	Change in other assets					(1,814	)	2,066		(542	)
	Increase in restricted cash—funding of Class 5A claims reserve					(36,855	)	—		—
	Decrease in restricted cash—payments of Class 5A allowed claims					8,704		—		—

				Net cash used in investing activities		(36,419	)	(20,358	)	(59,072	)

Cash flows from financing activities:
	Net borrowings on credit facility					—		38,500		38,000
	Proceeds from issuance of Series A preferred stock					29,323		—		112
	Proceeds from issuance of Class A common stock					12,109		—		—
	Payment of deferred issuance costs					(937	)	(1,983	)	(6,820	)
	Principal payments on long-term debt					(9,495	)	—		(3,791	)
	Principal payments on capital lease obligations					(73	)	(285	)	(698	)
	Distributions and dividends paid to stockholders					(6,000	)	(112	)	(14,045	)
	Interest on subordinated debt					325		—		—

				Net cash provided by financing activities		25,252		36,120		12,758

				Net increase (decrease) in cash and cash equivalents		2,430		38,546		(45,743	)
Cash and cash equivalents at beginning of year						42,145		3,599		49,342

Cash and cash equivalents at end of year					$	44,575		42,145		3,599

Cash paid during the year for:
	Interest (net of $1,391 and $3,500 of capitalized interest for 2000 and 1999, respectively)				$	27,740		12,084		11,506
	Income taxes					176		344		157
Supplemental schedule of noncash investing and financing activities:
	Notes receivable exchanged for property				$	—		2,166		—
	Conversion of senior debt to senior unsecured subordinated note payable					10,000		—		—
	Conversion of senior debt and accrued interest to Series A preferred stock					10,309		—		—
	Conversion of senior debt and accrued interest to Class A common stock					4,258		—		—
	Conversion of equity to Series B preferred stock					7,315		—		—
	Issuance of noncompete agreements and related obligation					2,700		—		—

See accompanying notes to consolidated financial statements.

F-78

EDWARDS THEATERS, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years ended December 27, 2001, December 26, 2000, and December 28, 1999

1) Chapter 11 Reorganization and Basis of Reporting

On August 23, 2000, Edwards Theatres Circuit Affiliated Group (as it existed before September 28, 2001, collectively the Predecessor Company or the Debtors) filed a voluntary petition for relief under Chapter 11, Title 11 of the United States Code in the United States Bankruptcy Court in the Central District of California, Santa Ana Division (the Bankruptcy Court).

On the Effective Date, the Debtors restructured their corporate organization to effect the following transactions: (a) the creation of New Edwards (Edwards Theatres, Inc. or the Company) and (b) the merger of the Debtors with and into the Company which is the surviving corporation.

The underlying objective of the Plan is to provide a vehicle for the recapitalization of the Debtors and payment of allowed claims. The Plan provides for, among other things:

•: Substantive consolidation of the Debtors into New Edwards;
•: Merging of the debtors and vesting of all of the Debtors' assets and liabilities into New Edwards, whose common stock is 51% owned by the Investor Group and 49% owned by the Debtors shareholders;
•: An equity infusion from an Investor Group of approximately $56.0 million, which consisted of $41.4 million in cash and $14.6 million in bank debt held and accrued interest by the Investor Group to be converted into redeemable preferred and common stock of New Edwards;
•: Restructuring of the $250.0 million senior secured credit facility. The outstanding senior secured debt of $213.5 million as of December 26, 2000 was reduced by a cash payment of approximately $9.5 million. The remaining $204 million was restructured into (i) $180 million Restructured Term Credit Agreement, (ii) $10 million senior unsecured subordinated note held by the Investor Group, and (iii) 16,000 shares of Series A preferred stock and approximately 146,000 shares of Class A common stock for the remaining $14.0 million;
•: Payment in full in cash on the Effective Date of all allowed administrative claims, allowed administrative tax claims, allowed priority tax claims, and allowed other priority claims;
•: Payment of allowed Class 5A claims. The Plan entitles the holders of allowed Class 5A claims to receive either (i) a cash payment equal to 90% of the allowed claim or (ii) 100% of the allowed Class 5A claim in an unsecured note, bearing interest at 9%, with a seven year term, requiring semi-annual principal and interest payments beginning March 28, 2002 (see note 3);
•: Merger of CAMCO, which is a non-debtor entity owned by the Debtor shareholders, into New Edwards. On the Effective Date, CAMCO was merged with and into the Company. Each CAMCO shareholder received their pro-rata share of $6.0 million. The payment in excess of the CAMCO shareholders' nominal carryover basis in the assets was accounted for as a distribution in the accompanying consolidated financial statements.

Since the Company's reorganization value immediately before the confirmation date was greater than the total of all postpetition liabilities and allowed prepetition claims, the Company did not meet

F-79

the criteria set forth in AICPA Statement of Position 90-7, Financial Reporting by Entities in Reorganization (SOP 90-7) required to qualify for fresh start reporting. The reorganization value was determined by an independent valuation obtained by management using discounted projected cash flows and economic and industry information relevant to the operations of the Company. The estimated reorganization value of the Company as of September 27, 2001 was approximately $388 million.

The historical carrying values for the Company's assets and liabilities are reflected as the basis carried over from the pre-reorganization financial statements, and are comparable to the combined financial statements prior to the reorganization. Because the Company did not qualify for fresh-start accounting under SOP 90-7, and there was not a sufficient change in ownership to qualify for push-down purchase accounting under Statement of Financial Accounting Standards No. 141, the consolidation of the Debtors and CAMCO into New Edwards has been accounted for as a reorganization of entities under common control. The historical financial statements of the Debtors have been consolidated as if they were a single entity for all periods presented.

(2) Summary of Significant Accounting Policies

(a): Description of Business and Revenue Recognition

The primary business of the Company is the operation of motion picture theatres. As of December 27, 2001 the Company operates 52 theatres in California, Idaho, and Texas.

Revenues are generated principally through admissions and concessions sales with proceeds received in cash at the point of sale. The Company has an advance ticket sales program to sell Group Activity tickets and Ed Dollars. Ed Dollars are purchased and redeemed dollar for dollar, whereas Group Activity tickets are sold at a discounted price and are subject to certain restrictions. Revenues from advance ticket sales are recorded as deferred revenue and are recognized when the tickets are redeemed. Prior to 1999, the Company had recorded revenue on advance ticket sales based on estimates of usage. During 2000, the Company recognized $8.2 million of previously deferred revenue related to advance tickets sold prior to 1999, based on revised estimates of advance ticket sales not redeemed as of December 26, 2000.

The ability of the Company to operate depends on the availability of marketable motion pictures. The Company currently obtains the motion pictures for its theatres from ten major film distributors as well as numerous smaller independent film distributors. Film rental costs are recognized based on the applicable box office receipts and the terms of the film licenses.

(b): Basis of Presentation and Principles of Consolidation

The financial statements of the Company as of December 26, 2000 and for the years ended December 26, 2000 and December 28, 1999 and for the period from December 27, 2000 to September 27, 2001 present the combined financial statements of the Debtors, which included 20 corporations, 20 partnerships and 19 LLC's, all of which were under common control. In connection with the recapitalization agreement described in note 1, 56 of the 59 entities under common ownership prior to the recapitalization were merged into Edwards Theatres, Inc., with the remaining entities becoming wholly owned subsidiaries of Edwards Theatres, Inc.

F-80

The consolidated financial statements of the Company as of December 27, 2001 and for the period from September 28, 2001 to December 27, 2001 include Edwards Theatres, Inc. and its wholly owned subsidiaries. All intercompany amounts have been eliminated in consolidation.

(c): Bankruptcy Accounting

The Company has applied the provisions of Statement of Position (SOP) 90-7, Financial Reporting by Entities in Reorganization Under the Bankruptcy Code. SOP 90-7 does not change the application of generally accepted accounting principles in the preparation of financial statements. However, it does require that the financial statements for periods including and subsequent to filing the Chapter 11 petition distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business (see note 6).

(d): Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, as well as disclosure of contingent assets and liabilities. Actual results could differ from those estimates.

(e): Cash and Cash Equivalents

The Company invests its excess cash in money market funds and short-term certificates of deposit. The Company considers short-term, highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

(f): Restricted Cash

The Company established a $35.0 million cash reserve, which was funded on the Effective Date for the payment of allowed Class 5A claims, which thereafter will be the lesser of (i) $20 million; or (ii) the sum of the unpaid: (a) disputed Class 5A claims that have elected the cash option (see note 3); and (b) allowed Class 5A claims that have elected the cash option. The restricted cash has been placed in a segregated account in which the holders of the allowed Class 5A claims that have elected the cash option have a first priority security interest. The restricted cash is classified as a current asset as the related claims are classified as current liabilities.

In addition, the Company has deposited an additional $1.9 million into a separate segregated account as part of a settlement agreement with one Class 5A claim holder.

(g): Marketable Equity Securities

Management determines the appropriate classification of marketable equity securities at the time of purchase and reevaluates such designation as of each balance sheet date. Prior to their sale in 2000, marketable equity securities were classified as available-for-sale. Accordingly, securities were carried at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of other comprehensive income. Realized gains and losses and declines in value judged to be other than temporary are included in results of operations. The cost of securities sold is based on the specific identification method. Dividends are included in results of operations.

F-81

(2) Summary of Significant Accounting Policies (Continued)

(h) Property and Equipment

Property and equipment are recorded at cost. For assets placed in service during 1987 to 1995, depreciation is computed using accelerated methods for financial reporting and tax purposes. For assets placed in service prior to 1987 and subsequent to 1995, depreciation is computed using the straight-line method for financial reporting purposes. The useful lives used for depreciation purposes are as follows:

Buildings and leasehold improvements		5 to 31 years
Furniture, fixtures, and equipment		3 to 10 years

The useful life assigned to leasehold improvements has been estimated based upon the lesser of the useful life of the asset or the noncancelable lease term.

(i) Other Assets

Included in other assets at December 27, 2001 and December 26, 2000 are approximately $6.1 million and $5.7 million, respectively, of costs related to debt financing, net of accumulated amortization. These costs are being amortized to interest expense using the effective-interest method over the terms of the underlying debt instruments. Also included in other assets are approximately $1.8 million and $2.2 million, respectively, in lease rights, net of accumulated amortization of $0.80 million and $1.0 million, respectively, as of December 27, 2001 and December 26, 2000, respectively. Lease rights represent the present value of the amounts that the fair market value lease rates, determined at the date the leases were acquired, exceed the stated lease rates contained in the leases. Lease rights are amortized on a straight-line basis over the remaining term of the underlying leases on the date of acquisition, which averages approximately 20 years. Amortization expense for lease rights approximated $131,000, $220,000, and $384,000 for 2001, 2000, and 1999, respectively. In connection with the write-offs recorded as a component of net loss on sales and impairment of long-lived assets during 2001 and 2000, approximately $168,000 and $3.0 million, respectively, of these lease rights were written off as the related theaters were closed (note 8).

(j) Advertising

The Company expenses advertising costs when incurred. The Company incurred advertising expense of approximately $7.2 million, $9.0 million, and $9.6 million in 2001, 2000, and 1999, respectively.

(k) Income Taxes

The Company provides for income taxes under the asset and liability method. Accordingly, deferred income tax assets and liabilities are computed for differences between the financial statement and tax basis of assets and liabilities that will result in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the period in which the differences are expected to affect taxable income.

During 1997, three of the corporations within the consolidated group elected to be taxed as S corporations under the Internal Revenue Code. Management of the Company made the same

F-82

election during 1998 for the remaining corporations, except for Edwards Entertainment 2000, Inc. which was a C corporations.

In connection with the Recapitalization, the Company became a C Corporation effective September 28, 2001. The conversion created a gross deferred tax asset of $18.9 million and gross deferred tax liability of $8.4 million, which were based upon the temporary book to tax differences existing at the date of termination of the Company's S Corporation status. A valuation allowance of $10.5 million was established at September 28, 2001 against the net deferred tax asset. Therefore, there was no recorded income tax expense or benefit resulting from the conversion from S Corporations to a C Corporation. The pro forma tax expense as if the Company and its subsidiary entities had been consolidated C Corporations is not materially different than historical tax expense for all periods presented. The undistributed retained earnings of the Company as of the date of termination of S Corporation status totaling $22.3 million has been reflected as a constructive capital contribution in the accompanying consolidated statement of stockholders' equity.

(l) Impairment of Long Lived Assets

The Company applies the provisions of Statement of Financial Accounting Standards No. (Statement) 121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of. The Company reviews for the impairment of long-lived assets to be held and used in the business whenever events or changes in circumstances indicate that the carrying amount of an asset or a group of assets may not be recoverable. The Company considers a trend of operating results that are not inconsistent with management's expectation to be the primary indicator of potential impairment. For the purposes of Statement 121, assets are generally evaluated for impairment at the theatre level, which management believes is the lowest level for which there are identifiable cash flows. In certain limited cases, a theatre may be aggregated with another theatre if it is geographically located near another theatre, and where the closure of one theatre would impact the Company's ability to obtain motion pictures from major film distributors for either theatre. The Company considers a theatre to be impaired if a forecast of future operating cash flows directly related to the theatre, including disposal value, if any, is less than its carrying amount. If a theatre is determined to be impaired, the loss is measured as the amount by which the carrying amount of the theatre exceeds its fair value. Fair value is based on management's estimates determined using the best information available, including the results of valuation techniques such as discounting estimated future cash flows as if the decision to continue to use the impaired theatres was a new investment decision. Considerable management judgment is necessary to estimate discounted future cash flows and fair value. Actual fair value of an asset is the amount at which the asset could be bought or sold in a current transaction between willing parties, accordingly, actual fair value results could vary significantly from such estimates. It is reasonably possible that the Company's estimate that it will recover the remaining carrying value of theatre assets will change in the near term.

Based on projected cash flows of underperforming theatres, a noncash impairment charge of approximately $4.4 million, $1.8 million, and $31.3 million was recorded in 2001, 2000, and 1999, respectively, to reduce the carrying amount of the Company's operating but impaired theatres and

F-83

other long-lived assets to management's estimates of fair value. The impairment charges are included in Net Loss on Sales and Impairment on Long-Lived Assets. (note 8).

(m) Concentration of Business and Credit Risk

The Company maintains bank accounts with financial institutions with funds insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000. The Company's accounts at these institutions may exceed the FDIC insured limit at times. The Company has not experienced any losses in such accounts.

The Company purchases concessions from several different vendors, however, during 2001, 2000, and 1999 approximately 80%, 77%, and 90% of the concessions, respectively, were purchased from one vendor. To date, the Company has been able to obtain concessions from this vendor as needed, and management believes that other suppliers could provide for the Company's needs on comparable terms.

(n) Fair Value of Financial Instruments

Cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities are financial instruments for which the carrying value approximates fair value because of the short-term maturity of these instruments.

(o) Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

(p) Fiscal Year

The Debtors' financial statements were kept on an accounting cycle through fiscal 2000 which resulted in 13 weeks being included in each accounting quarter. This method would have resulted in a fiscal year end of December 25, 2001. However, on the Effective Date, the Company changed to a Friday through Thursday accounting cycle, accordingly its fiscal year ends on the last Thursday of the month. As a result, fiscal year 2001 ended December 27, 2001. During 2000 and 1999, the Company's fiscal year ended on the last Tuesday in December. As a result, fiscal year 2000 ended on December 26, 2000 and fiscal year 1999 ended on December 28, 1999.

(q) New Accounting Pronouncements

In July 2001, the FASB issued SFAS No. 142, Goodwill and Other Intangible Assets, which the Company will adopt on December 28, 2001, the first day of its fiscal 2002 year. SFAS No. 142 requires that goodwill and other intangible assets with indefinite useful lives no longer be amortized, but instead tested for impairment at least annually. The adoption of this standard is not expected to have a material impact on the financial position of the operation of the Company.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS No. 144). SFAS No. 144 addresses financial accounting and reporting for the impairment or disposal of long-lived assets. This Statement requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to

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be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset. SFAS No. 144 requires companies to separately report discontinued operations and extends that reporting to a component of an entity that either has been disposed of (by sale, abandonment, or in a distribution to owners) or is classified as held for sale. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. The Company is required to adopt SFAS No. 144 on December 28, 2001.

(3) Extraordinary Gain on Extinguishment of Debt

In accordance with the Plan, the holders of allowed Class 5A claims are entitled to receive either (i) a cash payment equal to 90% of the allowed claim or (ii) 100% of the allowed Class 5A claim in an unsecured note, bearing interest at 9%, with a 7-year term, requiring semi-annual principal and interest payments beginning March 28, 2002. Generally, all of the holders of allowed Class 5A claims have elected to receive cash, totaling $8.8 million, resulting in an extraordinary gain of $978,000 related to allowed Class 5A claims paid as of December 27, 2001. The Company does not recognize the gain on extinguishment of debt until the holder of the allowed Class 5A claim makes the cash option election and the payment is made.

(4) Liabilities Subject to Compromise and Bankruptcy Related Liabilities and Claims

At December 26, 2000 liabilities subject to compromise include certain current and noncurrent liabilities of the Company as of the Petition Date. These liabilities were transferred from their respective prepetition balance sheet accounts to liabilities subject to compromise and have been treated as noncash items in the accompanying fiscal 2000 consolidated statements of cash flows. Nonoperating liabilities and liabilities subject to compromise as of December 26, 2000 are summarized as follows (in thousands):

Accounts payable, trade	$	24,950
Estimated theatre lease rejection and contractual claims		19,676
Accrued interest		13,788
Capital lease obligations		9,902

	$	68,316

At December 27, 2001 any remaining claims related to the bankruptcy proceedings are recorded in Bankruptcy Related Liabilities and Claims. The accrued amounts include the Company's estimated costs to settle disputed claims (see note 15). These liabilities were transferred from liabilities subject to compromise as of the Effective Date and are summarized as follows as of December 27, 2001 (in thousands):

Theatre lease rejection and contractual claims	$	43,085
Other—tax claims		863

	$	43,948

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(5) Property and Equipment

Property and equipment at December 27, 2001 and December 26, 2000 consists of the following (in thousands):

		2001			2000
Land		$	23,486		28,616
Buildings and leasehold improvements			253,962		261,084
Furniture, fixtures, and equipment			131,553		149,180

			409,001		438,880
Accumulated depreciation and amortization			(100,015	)	(87,171	)

			308,986		351,709
Construction in progress			—		180

	Property and equipment, net	$	308,986		351,889

(6) Reorganization Costs

The Company has incurred Reorganization related charges of approximately $19.5 million and $18.1 million for the fiscal years ended December 27, 2001 and December 26, 2000, respectively. Reorganization Costs are directly associated with the reorganization proceedings under the Company's Chapter 11 Filings and subsequent Plan. Significant items included in such costs are amounts related to (a) landlord claims related to the rejection of unexpired leases, (net of deferred lease and capital lease obligations), (b) claims related to rejected executory contracts (including construction contracts), (c) the write-off of deferred financing costs, and (d) professional and advisory fees incurred directly related to and subsequent to the bankruptcy filing. Reorganization costs (gains) recorded in fiscal 2001 and 2000 consisted of (in thousands):

	December 27, 2001			December 26, 2000
Theatre lease rejection claims and rejected executory contracts (net of write-off of deferred lease and capital lease obligations of $7,569 in 2001 and $5,865 in 2000)	$	5,176		11,190
Professional advisory fees		13,907		4,184
Write-down of unamortized deferred financing costs associated with prepetition debt		—		1,052
Retention bonus (paid upon completion of Reorganization)		1,297		—
Other		567		1,874
Interest income (prior to Effective Date)		(1,495	)	(194	)

	$	19,452		18,106

(7) Restructuring Charges

The Company incurred a charge of approximately $1.6 million associated with change in control payments for ten senior executives during the year ended December 27, 2001. These charges have been

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reflected as Restructuring Charges in the consolidated statement of operations and comprehensive loss. As of December 27, 2001, approximately $1.4 million has been paid.

(8) Net Loss on Sale and Impairment of Long-Lived Assets

The following table reflects the amounts recorded in operations relating to impaired assets, closed theatres, and sales of assets (in thousands):

	2001			2000		1999
Write-off of property and equipment associated with theatre closures	$	14,374		19,202		—
Impairment charges		4,420		1,818		31,253
Gain on sale of assets		(741	)	(13,027	)	(613	)
Write-off of lease rights related to closed theatres		168		2,969		—

	$	18,221		10,962		30,640

(9) Debt Obligations

As a result of the Plan described in note 1, substantially all of the debt existing prior to the Effective Date was restructured into a $180 million senior credit facility and a $10 million senior unsecured subordinated note. Long-term debt consists of the following at December 27, 2001 and December 26, 2000 (in thousands):

		December 27, 2001			December 26, 2000
Senior secured term loan		$	180,000		213,500
Less current portion			(12,600	)	(213,500	)

	Long term debt	$	167,400		—

The senior secured term loan is secured by substantially all assets of the Company and bears interest at Libor plus a margin, as defined (6.28% at December 27, 2001). Interest is payable monthly and principal payments are due in various amounts ranging from $2.1 million to $9.1 million beginning June 27, 2002 and continuing quarterly through March 31, 2005, with a final principal payment of $126.7 million due on the maturity date of June 30, 2005. Mandatory prepayments are required based on certain events such as receipt of cash proceeds related to dispositions of assets, refinancing of indebtedness or when allowed claims under the Plan elect or receive the unsecured note option. The senior secured term loan agreement contains various affirmative, restrictive and financial covenants, including various financial ratios and relationships. In addition to these covenants, there are also certain events, as defined, that would constitute an event of default including, but not limited to, cross-defaults, change in control, or conditions that could be expected to have a material adverse effect on the Company, as defined. The Company was in compliance with the covenants at December 27, 2001.

The senior unsecured subordinated notes are payable to shareholders of the Company. The notes bear interest at 13% per year with principal and interest due on September 29, 2005.

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The aggregate annual maturities of long-term debt and senior unsecured subordinated notes payable to shareholders are as follows:

Year ending December:
	2002		$	12,600
	2003			16,800
	2004			20,200
	2005			140,725

		Total	$	190,325

(10) Lease Obligations

(a) Lease Commitments

Certain of the Company's theatres and equipment are leased under noncancelable leases expiring in various years through 2034. The theatre leases generally provide for the payment of fixed monthly rentals, contingent rentals based on a percentage of revenue over a specified amount, and the payment of property taxes, common area maintenance, insurance, and repairs. The Company, at its option, can renew a substantial portion of its theatre leases, at the then fair rental rate, for various periods with renewal periods ranging from 5 to 20 years. Certain lease agreements are subject to financial covenants. Based on financial results for the year ended December 27, 2001, the Company became in default on three lease agreements at December 27, 2001. However, Company has received waivers on two of the defaults in exchange for lease guarantees executed by certain Company shareholders. One of the landlords has not waived the default but has not taken any action with respect to the rights and remedies under the lease agreement. The Company does not believe that this matter could reasonably be expected to have a material adverse effect on its financial condition, results of operation, or liquidity.

Upon the approval of the Bankruptcy Court, the Company rejected certain executory contracts, including leases, under the relevant provisions of the Bankruptcy Code. Rejection of a lease gives the lessor the right to assert a prepetition claim against the Company as though the lease had been terminated immediately before the date of the Chapter 11 filing. However, the amount of the claim may be limited by the Bankruptcy Code. Estimated claims for rejected leases and rejected executory contracts (net of deferred lease and capital lease obligations) of $5.2 million and $11.2 million are included in reorganization costs for fiscal 2001 and 2000, respectively (see note 6).

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(10) Lease Obligations (Continued)

Future minimum noncancelable operating lease commitments are as follows (in thousands):

			Other
Year ending December:
	2002		$	41,089
	2003			40,958
	2004			40,404
	2005			39,613
	2006			39,413
	Thereafter			499,833

		Total minimum lease payments	$	701,310

The Company incurred base and contingent rent expense of $40.3 million, $43.8 million, and $34.5 million for fiscal 2001, 2000, and 1999, respectively.

(b) Sale-Leaseback Transactions

During 2000, the Company entered into two sale-leaseback transactions with a related party whereby the Company sold and leased back certain properties. The sale resulted in a $3.9 million gain which was deferred and is being amortized over the life of the leaseback. As part of this transaction, an additional location was sold ($3.7 million) with a portion of the building being leased back for corporate use. This resulted in a $621,000 gain being recognized in 2000 and the remaining $1.0 million gain being deferred and amortized over the life of the leaseback. The related leases are being accounted for as operating leases.

During 1999, the Company entered into four sale-leaseback transactions whereby the Company sold and leased back four theatres. The sales of three theatres resulted in a $1.2 million gain which was deferred and is being amortized over the life of the leasebacks. The sale of the other theatre resulted in a $343,000 loss which was recognized in 1999. The related leases are being accounted for as operating leases.

(11) Income Taxes

The components of the income tax provision for the years ended December 27, 2001 and December 26, 2000 are as follows (in thousands):

			2001		2000		1999
Federal:
	Current		$	—	439		115
	Deferred			—	(338	)	—
State:
	Current			114	279		200
	Deferred			—	—		321

		Income taxes	$	114	380		636

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The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 27, 2001 and December 26, 2000 are as follows (in thousands):

			2001			2000
Deferred tax assets:
	Capital leases		$	—		32
	Impairment of long-lived assets			8,837		5,195
	Deferred lease obligation			6,912		244
	Net operating loss carryforward			5,192		4,451
	Gain on sale leaseback			2,708		—
	Bankruptcy related liabilities and claims			16,226		2,895
	Goodwill for tax purposes			2,360		—
	Other			1,020		—

		Total gross deferred tax assets		43,255		12,817
	Valuation allowance			(34,101	)	(11,764	)

		Net deferred tax assets		9,154		1,053

Deferred tax liabilities:
	Depreciation and amortization			9,154		198
	Other			—		855

		Total gross deferred tax liabilities		9,154		1,053

		Net deferred tax liabilities	$	—		—

In determining the possible future realization of deferred tax assets, future taxable income from the following sources are taken into account: (a) the reversal of taxable temporary differences, (b) future operations exclusive of reversing temporary differences and (c) tax planning strategies that, if necessary, would be implemented to accelerate taxable income into years in which net operating losses might otherwise expire. As of December 27, 2001 the valuation allowance against deferred tax assets amounted to $34.1 million. Net operating loss carryforwards at December 27, 2001 are approximately $13.0 million for federal tax purposes, expiring through 2021.

The Tax Reform Act of 1986 imposed substantial restrictions on the utilization of net operating losses in the event of an "ownership change" of a corporation. Accordingly, the Company's ability to utilize net operating losses may be limited as a result of such an "ownership change," as defined in the Internal Revenue Code. The net operating loss carryforwards attributable to Edwards Entertainment 2000 before the Recapitalization by the Company may be further limited according to these provisions.

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The reconciliation of the difference between income taxes computed using the statutory U.S. income tax rate and the provision for income taxes is as follows (in thousands):

	2001			2000
Expected federal income tax benefit	$	(10,751	)	(15,536	)
State taxes		114		279
Expected tax expense on income earned by pass through entities		—		11,085
Net deferred tax assets recorded upon conversion to C Corporation		(10,545	)	—
Change in valuation allowance		22,337		5,302
Other		(1,041	)	(750	)

	$	114		380

(12) Related Party Transactions

(a) Advances to Officers, Employees, and Others

Through 2000, the Company had made advances to officers, employees, and others which were non-interest bearing and due on demand. During 2000, management of the Company determined the balance of the advances were not collectible, therefore, a valuation allowance of $1.2 million was recorded against the advances in 2000. The charge was recorded in general and administrative expenses.

(b) Advances to Stockholders

As of December 26, 2000, advances to certain Debtor stockholders aggregated approximately $3.9 million, including accrued interest. During 2000, management of the Company determined the advances were not collectible; therefore, a valuation allowance of $3.9 million was recorded against the advances in 2000. The charge was recorded in general and administrative expenses.

(c) Edwards Cinema Plaza Escondido

Edwards Cinema Plaza Escondido (ECPE), a company owned principally by Debtor stockholders, leased a theatre complex to Edwards Escondido Venture until May 2000. As of May 2000, the Company had a note receivable approximating $2.2 million due from ECPE. In May 2000, the theatre complex in Escondido was transferred from ECPE to the Company in exchange for forgiving the note receivable. The fair market value of the land was approximately $2.2 million, accordingly, no gain or loss was recorded.

(d) Employment Agreement

During fiscal 2001, the Company entered into an employment agreement with a shareholder. The employment agreement provides for an annual base salary of $300,000 and expires in 2006.

(e) Noncompete Agreements

The Company entered into three separate five-year noncompete agreements with three Debtor shareholders in connection with the Recapitalization. The present value of the future obligations of

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$2.7 million are included in other assets and other long-term liabilities at December 27, 2001. The liability will be reduced as cash payments are made over the five-year term, and the asset will be amortized ratably over the life of the agreements.

(f) Debt Conversion by Shareholder

The Investor Group held approximately $24.0 million in bank debt and approximately $0.6 million in accrued interest as of the Effective Date, which was converted into a (i) $10 million senior unsecured subordinated note and (ii) 16,000 shares of Series A preferred stock and approximately 146,000 shares of Class A common stock.

(g) Shareholder Distribution

In connection with the Plan, the Debtors shareholders received a $6.0 million cash distribution for 100% of their equity interest in CAMCO, which was a nondebtor entity owned by the Debtor shareholders. CAMCO was merged with and into the Company on the Effective Date.

(h) Legal Services

A board member is a partner of a law firm that provided legal services to the Debtors and the Company during fiscal 2001 and which received approximately $3.0 million in cash payments.

(13) Stockholders' Equity

(a) Authorized Shares

The Company's Amended and Restated Certificate of Incorporation authorizes the issuance of two classes of stock designated as common stock and preferred stock. The Company is authorized to issue 11,000,000 shares. The total authorized number of shares of common stock, par value $0.001 per share, is 10,000,000, of which 2,000,000 shares are designated Class A common stock and 2,000,000 shares are designated Class B common stock. The total authorized number of shares of preferred stock, par value $0.001 is 1,000,000, of which 56,000 shares are designated Series A preferred stock and 15,000 shares are designated Series B preferred stock.

(b) Voting Rights

Class A common stockholders have the right to two votes per share. Class B common stockholders have the right to one vote per share. Series A and B preferred stockholders have the right to four votes per share. The Class A common stock, Class B common stock, the Series A preferred stock, and the Series B preferred stock shall vote together, without distinction between classes or series.

(c) Dividends and Distributions

Any dividends declared by the board of directors in excess of preferred dividends will be paid as follows: (i) 10.2% to the Series A preferred stockholders, (ii) 9.8% to the Series B stockholders, and (iii) 80% to common stockholders, on a pro rata basis in each respective category.

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(14) Redeemable Preferred Stock

In connection with the Plan, the Company issued 56,000 and 15,000 shares of $0.001 par value, mandatorily redeemable Series A preferred stock and Series B preferred stock, respectively. The Company received $41.4 million in cash and $14.6 million in bank debt for the Series A preferred stock and Class A common stock. The Company estimated the fair value of the Series A preferred stock and Series B preferred stock to be $707.73 and $487.61 per share, respectively, using a discounted cash flow approach. The fair value of the Series B preferred stock issued to the Debtor shareholders of $7.3 million was treated as a distribution in the accompanying consolidated statement of stockholders' equity. The increase in fair value of the Series A preferred stock and Series B preferred stock, from $707.73 and $487.61 per share, respectively, to their redemption value of $1,000 per share, will accrete through a charge directly to retained earnings through the mandatory redemption date of October 2, 2008, using the effective interest method. The total discount from the liquidation value for the Series A and B preferred stock was $16.4 million and $7.7 million, respectively.

The rights, preferences and privileges of the Series A preferred stock and Series B preferred stock are as follows:

(a) Dividend Provisions

Dividends, if declared by the board of directors, are payable annually in arrears on October 1^st of each year, commencing on October 1, 2002. The Series A preferred stockholders are entitled to receive an annual dividend of $120 per share and if not declared by the board of directors or if paid after the payment date, interest will accrue on the dividend at a rate of 12% per year, compounded annually. The Series B preferred stockholders are entitled to receive an annual dividend of $80 per share and if not declared by the board of directors or if paid after the payment date, interest will accrue on the dividend at a rate of 12% per year, compounded annually.

(b) Liquidation Preference

Upon the occurrence of any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary (Liquidation), the holders of the Series A preferred stock will be paid, before any distribution or payment is made to the holders of Series B preferred stock and common stock, (i) $1,000 per share (as adjusted for any unpaid dividends, splits or recapitalizations) plus (ii) all accrued and unpaid dividends (Series A Preferred Liquidation Preference).

After the Series A Liquidation Preference has been paid to the holders of the Series A preferred stock, the holders of the Series B preferred stock are entitled to be paid (i) $1,000 per share (as adjusted for any unpaid dividends, splits, or recapitalizations) plus (ii) all accrued and unpaid dividends (Series B Preferred Liquidation Preference).

After the holders of the Series A and B preferred stock have received their Liquidation Preferences, the remaining assets of the Company will be distributed (i) 10.2% on a pro rata basis to the holders of the Series A preferred stock (ii) 9.8% on a pro rata basis to the holders of the Series B preferred stock and (iii) 80% on a pro rata basis to the holders of the common stock

(c) Conversion Rights

The Series A and B preferred stock have no conversion rights.

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(d) Voting Rights

Holders of the each share of both Series A and B preferred stock have the right to vote four votes for each share.

(e) Optional Redemption

The Company has the right to redeem, at any time, all or any of the shares of the Series A and B preferred stock by paying the liquidation preferences plus a redemption premium.

(f) Mandatory Redemption

The Company will redeem, on October 2, 2008 all of the outstanding shares of the Series A and B preferred stock by paying the liquidation preferences plus the redemption premiums.

(g) Conditional Investment and Equity Redemption

As part of the Plan, the Series A preferred stockholders are required to contribute to the Company $0.90 in cash for each $1.00 of allowed Class 5A general unsecured claims that exceed $55 million but are less than $70 million, and the Series A preferred stockholders will concurrently receive from the existing Series B preferred stockholders $1.00 in Series B preferred stock (with a liquidation preference of $1.00 per share) for each $0.90 in cash so contributed.

If the amount of allowed Class 5A general unsecured claims exceed $70 million, the Series A preferred stockholders are required to contribute to the Company $0.90 in cash for each $1.00 of claims allowed in excess of $70 million (see note 15(a)), and the Series A preferred stockholders will concurrently receive $1.00 in Series C convertible preferred stock for each $1.00 in cash so contributed. In addition, for each $93.75 contributed in cash under this provision by the Series A preferred stockholders for claims allowed in excess of $70 million, the Company will redeem one share of Series B common stock, up to a total of 480,000 shares.

In accordance with the Plan, the proceeds from the Series B preferred stock will be deposited into the restricted cash account and distributed in payment of allowed Class 5A claims.

The proceeds from the sale of the Series C convertible preferred stock will be applied by the Company to purchase shares of Class B common stock at a price of $93.75 per share until a total of 480,000 shares of Class B common stock have been purchased. The cash will be deposited into the restricted cash account and will be used to pay allowed Class 5A claims.

(15) Commitments and Contingencies

(a) Claims, Lawsuits, and Bankruptcy Proceedings

The Company is involved in a number of claims, lawsuits and proceedings that arose from filing its voluntary petition for relief under Chapter 11 in U.S. Bankruptcy Court. During the period from the Petition Date to the Effective Date of the Plan, the Company had the right, subject to the approval of the Bankruptcy Court, under the relevant provisions of the Bankruptcy Code, to assume or reject certain executory contracts (including construction contracts) and unexpired leases, including real property leases. Certain parties to such executory contracts and unexpired leases with the Company, including parties to such real property leases, may file motions

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with the Bankruptcy Court seeking to require the Company to assume or reject those contracts or leases. In this context, "assumption" requires that the Company cure, or provide adequate assurance that it will cure, all existing defaults under the contract or lease and provide adequate assurance of future performance under relevant provisions of the Bankruptcy Code; and "rejection" means that the Company is relieved from its obligations to perform further under the contract or lease. Rejection of an executory contract or lease may constitute a breach of that contract assuming, among other things, the enforceability of that contract, and may afford the nondebtor party the right to assert a claim against the bankruptcy estate for damages arising out of the breach, which claim shall be allowed or disallowed as a pre-petition claim.

Prepetition claims that were contingent, unliquidated, or disputed as of the commencement of the Company's Chapter 11 cases, including, without limitation, those that arose in connection with rejection of executory contracts or unexpired leases, may be allowed or disallowed. Certain claims were fixed by the Bankruptcy Court or otherwise settled or agreed upon by the parties. However, certain claims remained unsettled upon Reorganization and are subject to ongoing negotiation and possible litigation. The aggregate unsettled claims against the Company approximate $150 million at December 27, 2001 based upon the claims filed with the Bankruptcy Court.

Based on the complexity of the matters and the number of cases, management is not able to estimate a reasonably possible range of loss for these claims. Under Statement of Financial Accounting Standards No. 5, Accounting For Contingencies, the Company has not accrued for any possible losses that cannot be estimated. However, the Company has a balance accrued of approximately $44 million as of December 27, 2001 as its estimate of the probable costs to resolve the outstanding matters for which an estimate of probable loss can be made, which is recorded in bankruptcy related liabilities and claims (see note 4). These amounts were determined by management, based on its examination of these matters, its experience to date, and discussions with legal counsel. It is reasonably possible in the near term that the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company's results of operations for that period. The Company has a Conditional Investment and Equity Redemption provision with the Investor Group if the ultimate settlement of these claims exceeds certain amounts (see note 14(g)). As a result, the Company does not expect the ultimate resolution of these matters to have a material adverse effect on its financial position or liquidity.

(b) Litigation

The Company is subject to other claims and lawsuits arising in the ordinary course of business. In the opinion of management, the ultimate resolution of these matters will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

(16) Subsequent Events

On March 7, 2002, the Company amended its $180 million Restructured Term Credit Agreement which allowed it to change the Company's fiscal year end to December 27, 2001.

In January 2002 the Company announced that it would be relocating its corporate headquarters to Knoxville, Tennessee. In connection with the relocation, the Company expects to record a charge in the

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first quarter of fiscal 2002, primarily for employee related costs and write down of certain assets to net realizable values. The move is expected to be substantially completed by May 2002.

On April 12, 2002, the Company's stockholders exchanged 100% of their equity interests in Edwards Theatres, Inc. for equity ownership in Regal Entertainment Group (REG). REG is an entity formed and controlled by Anschutz. Also on April 12, 2002, REG exchanged its stock for stock in two other theatre companies commonly controlled by Anschutz.

On April 17, 2002, approximately $180 million principal amount of the senior bank debt and $10.3 million principal amount of senior unsecured subordinated notes payable were repaid.

On April 17, 2002, the Company redeemed its Series A and Series B preferred stock for approximately $75 million. In connection with the repayment of the indebtedness and redemption of the subordinated notes and preferred stock, the Company became a wholly owned subsidiary of Regal Cinemas, Inc.

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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table shows the various fees and expenses, other than the underwriting discounts and commissions, payable by Registrant in connection with the sale of the Class A common stock being registered under this registration statement. All amounts shown are estimates except for the Securities and Exchange Commission registration fee.

Registration fee	$	31,740
NASD filing fee (including legal fees)		55,500
NYSE listing fee		350,000
Printing and engraving expenses		828,200
Legal fees and expenses		1,000,000
Accounting fees and expenses		594,000
Blue Sky fees and expenses (including legal fees)		5,000
Transfer agent and registrar fees and expenses		3,750
Miscellaneous		50,000

Total	$	2,918,190

*: To be included by amendment.

Item 14. Indemnification of Directors and Officers.

The Delaware General Corporation Law authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors' fiduciary duties. Our certificate of incorporation includes a provision that eliminates the personal liability of directors for monetary damages for actions taken as a director, except for liability: for breach of duty of loyalty; for acts or omissions not in good faith or involving intentional misconduct or knowing violation of law; under Section 174 of the Delaware General Corporation Law (unlawful dividends); or for transactions from which the director derived improper personal benefit.

Our certificate of incorporation provides that we must indemnify our directors and officers to the fullest extent authorized by the Delaware General Corporation Law. We will also pay expenses incurred in defending any such proceeding in advance of its final disposition upon delivery to us of an undertaking, by or on behalf of an indemnified person, to repay all amounts so advanced if it should be determined ultimately that such person is not entitled to be indemnified under this section or otherwise.

The indemnification rights set forth above shall not be exclusive of any other right which an indemnified person may have or hereafter acquire under any statute, provision of our certificate of incorporation, our by laws, agreement, vote of stockholders or disinterested directors or otherwise.

Regal Cinemas, Inc. has entered into indemnification agreements with each of Mr. Campbell, Mr. Brandow, Mr. Dunn and Ms. Miles. The indemnification agreements provide that Regal Cinemas, Inc. will indemnify each of those individuals against claims arising out of events or occurrences related to that individual's service as an agent of Regal Cinemas, Inc., except among other restrictions to the extent such claims arise from conduct that was fraudulent, a knowing violation of law or of any policy of Regal Cinemas, Inc., deliberately dishonest, in bad faith or constituted willful misconduct.

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We maintain insurance to protect ourselves and our directors, officers and representatives against any such expense, liability or loss, whether or not we would have the power to indemnify him against such expense, liability or loss under the Delaware General Corporation Law.

Item 15. Recent Sales of Unregistered Securities.

The following information relates to securities issued or sold by Registrant within the last three years. All such securities were offered and sold in reliance upon the exemption from registration under Section 4(2) of the Securities Act, relating to sales by an issuer not involving any public offering, including offers and sales under Regulation D, or Rule 701 under the Securities Act.

The sales of securities were made without the use of an underwriter and the certificates evidencing the shares bear a restrictive legend permitting the transfer thereof only upon registration of the shares or pursuant to an exemption from registration under the Securities Act.

(1): On March 6, 2002, in connection with its formation, Registrant sold to Anschutz Investment Group LLC one share of Class B common stock for a purchase price of $1.00. This sale was effected without registration under the Securities Act in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act. Such issuance was made in connection with the formation of the Registrant by its controlling stockholder and did not involve any public offering of securities of the Registrant.
(2): On March 8, 2002, prior to the initial filing of this Registration Statement, Registrant agreed to issue approximately 27,493,575 shares of Class A common stock and approximately 84,590,337 shares of Class B common stock to 23 accredited investors in exchange for all of the capital stock of Regal Cinemas Corporation and Edwards Theatres, Inc. and approximately 90% of the outstanding voting stock of United Artists Theatre Company. The closing of this exchange occurred on April 12, 2002. These transactions were effected without registration under the Securities Act in reliance upon the exemptions from registration contained in Section 4(2) of, and Rule 152 and Rule 506 of Regulation D promulgated under, the Securities Act.
(3): On March 8, 2002, Registrant agreed to issue additional shares of Class B common stock to Anschutz in exchange for the contribution of additional shares of United Artists Theatre Company, or warrants to purchase shares of United Artists Theatre Company, acquired by Anschutz prior to the completion of this offering. Anschutz owns a majority of the outstanding common stock of Registrant. As of April 19, 2002, none of these additional shares of Class B common stock had been issued. These transactions will be effected without registration in reliance on the exemption from registration contained in Section 4(2) of, and Rule 506 of Regulation D promulgated under, the Securities Act.
(4): On April 12, 2002, in connection with the closing of the exchange transaction referred to above, Registrant granted to employees holding outstanding options to purchase capital stock of Regal Cinemas Corporation and United Artists Theatre Company replacement options to purchase 8,832,147 shares of Class A common stock at a weighted average exercise price of $7.96 per share. These transactions were effected without registration under the Securities Act in reliance upon the exemption from registration contained in Rule 701 promulgated under the Securities Act.
(5): In connection with the closing of the exchange transaction, Registrant also granted to three accredited investors, one of which was Anschutz, in exchange for their warrants to purchase 3,750,000 shares of common stock of United Artists Theatre Company, warrants to purchase 296,129 shares of Class A common stock at $8.88 per share and 3,928,185 shares of Class B common stock at $8.88 per share. Anschutz owns a majority of the outstanding capital stock of Registrant. This transaction was effected without registration under the Securities Act in reliance

II-2

on the exemption from registration contained in Section 4(2), and Rule 506 of Regulation D promulgated under, of the Securities Act.

The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and other instruments issued in such transactions. All recipients either received adequate information about Registrant or had access, through employment or other relationships, to information about Registrant.

Item 16. Exhibits and Financial Statement Schedules.

(a) Exhibits:

Exhibit Number		Description
1		Form of Underwriting Agreement
2.1		Regal Cinemas Amended Joint Plan of Reorganization dated December 5, 2001†
2.2		Regal Cinemas Disclosure Statement dated September 6, 2001 (filed as exhibit 2.3 to Regal Cinemas, Inc.'s Form 10-Q for the fiscal quarter ended September 27, 2001 (Commission File No. 333-52943), and incorporated herein by reference)
2.3		United Artists Second Amended Joint Plan of Reorganization (filed as exhibit 2 to United Artists Theatre Circuit, Inc.'s Current Report on Form 8-K filed on February 9, 2001 (Commission File No. 033-49598), and incorporated herein by reference)
2.4		United Artists Second Amended and Restated Disclosure Statement (filed as exhibit 2 to United Artists Theatre Circuit, Inc.'s Current Report on Form 8-K filed on February 9, 2001 (Commission File No. 033-49598), and incorporated herein by reference)
2.5		Edwards Theatres Second Amended Plan of Reorganization dated July 23, 2001†
2.6		Edwards Theatres Disclosure Statement to Accompany Debtor's Second Amended Plan of Reorganization†
2.7		Exchange Agreement, dated as of March 8, 2002, by and among Regal Entertainment Group and certain stockholders of Regal Cinemas Corporation, United Artists, Theatre Company, Edwards Theatres, Inc. and Regal CineMedia Corporation†
3.1		Registrant's Certificate of Incorporation†
3.2		Form of Amended and Restated Certificate of Incorporation of Registrant to be effective upon the closing of the offering being made pursuant to this Registration Statement
3.3		Registrant's Bylaws†
3.4		Form of Amended and Restated Bylaws of Registrant to be effective upon the closing of the offering being made pursuant to this Registration Statement
4.1		Specimen Class A Common Stock Certificate
4.2		Specimen Class B Common Stock Certificate

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4.3		Revolving Credit Agreement, dated as of February 2, 2001, among United Artists Theatre Company, United Artists Theatre Circuit, Inc., United Artists Realty Company, United Artists Properties I Corp., United Artists Properties II Corp., the Lenders Party thereto, and Bankers Trust Company, as Administrative Agent (filed as exhibit 10.3 to United Artists Theatre Circuit, Inc.'s Form 10-Q for the fiscal quarter ended March 29, 2001 (Commission File No. 033-49598), and incorporated herein by reference)
4.4		Restructured Term Credit Agreement, dated as of February 2, 2001, among United Artists Theatre Company, United Artists Theatre Circuit, Inc., United Artists Realty Company, United Artists Properties I Corp., United Artists Properties II Corp., the Lenders Party thereto and Bank of America, N.A., as Administrative Agent (filed as exhibit 10.1 to United Artists Theatre Circuit, Inc.'s Form 10-Q for the fiscal quarter ended March 29, 2001 (Commission File No. 033-49598), and incorporated herein by reference)
4.5		Credit Agreement, dated as of January 29, 2002, among Regal Cinemas Corporation and Regal Cinemas, Inc. as Co-Borrowers, the Lenders Party thereto, Lehman Brothers Inc., as Sole Advisor, Sole Lead Arranger and Sole Book Manager, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent, and Lehman Commercial Paper Inc., as Administrative Agent†
4.6		Indenture, dated as of January 29, 2002, by and among Regal Cinemas Corporation, as Issuer, the Guarantors Party thereto and U.S. Trust National Association, as Trustee†
4.7		First Supplemental Indenture, dated as of April 17, 2002, by and among Regal Cinemas Corporation, as Issuer, the Guarantors Party thereto and U.S. Trust National Association, as Trustee†
4.8		Second Supplemental Indenture, dated as of April 17, 2002, by and among Regal Cinemas Corporation, as Issuer, Edwards Theatres, Inc., Florence Theatre Corporation, Morgan Edwards Theatre Corporation, United Cinema Corporation, as Guaranteeing Subsidiaries and U.S. Bank National Association, as Trustee†
4.9		Regal Cinemas Corporation 9¹/8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated January 29, 2002†
4.10		Regal Cinemas Corporation 9¹/8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated April 17, 2002†
4.11		Amendment to Leveraged Lease Facility and Second Supplemental Indenture, dated as of March 7, 2001, among United Artists, Wilmington Trust Company, William J. Wade, Theatre Investors, Northway Associates Limited Partnership, State Street Bank and Trust Company, Susan Keller and MacKay Shields LLC (filed as exhibit 10.2 to United Artists Theatre Circuit, Inc.'s Form 10-Q for the fiscal quarter ended March 29, 2001 (Commission File No. 033-49598) and incorporated herein by reference)
4.12		Trust Indenture and Security Agreement, dated as of December 13, 1995, between Wilmington Trust Company, William J. Wade and Fleet National Bank of Connecticut and Alan B. Coffey (filed as exhibit 4.2 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)

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4.13		Pass Through Certificates, Series 1995-A Registration Rights Agreement, dated as of December 13, 1995, among United Artists, Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated (filed as exhibit 4.3 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
4.14		Participation Agreement, dated as of December 13, 1995, among United Artists, Theatre Circuit, Inc., Wilmington Trust Company, William J. Wade, Theatre Investors, Inc., Northway Mall Associates, LLC, Wilmington Trust Company, William J. Wade, Fleet National Bank of Connecticut, Alan B. Coffey and Fleet National Bank of Connecticut (filed as exhibit 4.4 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
4.15		Pass Through Trust Agreement, dated as of December 13, 1995, between United Artists Theatre Circuit, Inc. and Fleet National Bank of Connecticut (filed as exhibit 4.5 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
4.16		Lease Agreement, dated as of December 13, 1995, between Wilmington Trust Company and William J. Wade and United Artists (filed as exhibit 4.6 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
5		Opinion of Hogan & Hartson L.L.P. with respect to legality
10.1		Regal Entertainment Group Stockholders' Agreement†
10.2		2002 Regal Entertainment Group Stock Incentive Plan
10.2.1		Form of Stock Option Agreement
10.3		Form of Warrant Agreement†
10.4		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Michael L. Campbell
10.5		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Kurt C. Hall
10.6		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Amy E. Miles
10.7		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Gregory W. Dunn
10.8		Lease Agreement, dated as of October 1, 1988, between United Artists Properties I Corp. and United Artists Theatre Circuit, Inc. (filed as exhibit 10.1 to United Artists Theatre Circuit, Inc.'s Form S-1 filed October 5, 1992 (Commission File No. 33-49598), and incorporated herein by reference)
21		Subsidiaries of the Registrant†
23.1		Consent of KPMG LLP, Independent Accountants
23.2		Consent of KPMG LLP, Independent Accountants
23.3		Consent of KPMG LLP, Independent Accountants

II-5

23.4		Consent Deloitte & Touche LLP, Independent Auditors
23.5		Consent of Arthur Andersen LLP, Independent Accountants
23.6		Consent of Hogan & Hartson L.L.P. (set forth in Exhibit 5)
24		Powers of Attorney (included on the signature page of the Registration Statement)†

†: previously filed

(b): Financial Statement Schedules:

All other schedules are omitted because they are not required, are not applicable or the information is included in the consolidated financial statements or notes thereto.

Item 17. Undertakings.

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreements certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1): For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(2): For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-6

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Centennial, Colorado, on May 6, 2002.

		Regal Entertainment Group
		By:	/s/ MICHAEL L. CAMPBELL Michael L. Campbell Co-Chief Executive Officer
		By:	/s/ KURT C. HALL Kurt C. Hall Co-Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the dates indicated.

Signature	Title	Date

/s/ MICHAEL L. CAMPBELL Michael L. Campbell	Director, Vice Chairman and Co-Chief Executive Officer and Chief Executive Officer of Regal Cinemas Corporation (Co-Principal Executive Officer)	May 6, 2002
/s/ KURT C. HALL Kurt C. Hall	Director, Vice Chairman and Co-Chief Executive Officer and President and Chief Executive Officer of Regal CineMedia Corporation (Co-Principal Executive Officer)	May 6, 2002
* Amy E. Miles	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	May 6, 2002
* Philip F. Anschutz	Director	May 6, 2002
* Michael F. Bennett	Director	May 6, 2002

II-7

* Stephen A. Kaplan	Director	May 6, 2002
* Craig D. Slater	Director	May 6, 2002
* Alfred C. Eckert III	Director	May 6, 2002
* Robert F. Starzel	Director	May 6, 2002
* Thomas D. Bell, Jr.	Director	May 6, 2002

II-8

Exhibit Index

Exhibit Number		Description
1		Form of Underwriting Agreement
2.1		Regal Cinemas Amended Joint Plan of Reorganization dated December 5, 2001†
2.2		Regal Cinemas Disclosure Statement dated September 6, 2001 (filed as exhibit 2.3 to Regal Cinemas, Inc.'s Form 10-Q for the fiscal quarter ended September 27, 2001 (Commission File No. 333-52943), and incorporated herein by reference)
2.3		United Artists Second Amended Joint Plan of Reorganization (filed as exhibit 2 to United Artists Theatre Circuit, Inc.'s Current Report on Form 8-K filed on February 9, 2001 (Commission File No. 033-49598), and incorporated herein by reference)
2.4		United Artists Second Amended and Restated Disclosure Statement (filed as exhibit 2 to United Artists Theatre Circuit, Inc.'s Current Report on Form 8-K filed on February 9, 2001 (Commission File No. 033-49598), and incorporated herein by reference)
2.5		Edwards Theatres Second Amended Plan of Reorganization dated July 23, 2001†
2.6		Edwards Theatres Disclosure Statement to Accompany Debtor's Second Amended Plan of Reorganization†
2.7		Exchange Agreement, dated as of March 8, 2002, by and among Regal Entertainment Group and certain stockholders of Regal Cinemas Corporation, United Artists, Theatre Company, Edwards Theatres, Inc. and Regal CineMedia Corporation†
3.1		Registrant's Certificate of Incorporation†
3.2		Form of Amended and Restated Certificate of Incorporation of Registrant to be effective upon the closing of the offering being made pursuant to this Registration Statement
3.3		Registrant's Bylaws†
3.4		Form of Amended and Restated Bylaws of Registrant to be effective upon the closing of the offering being made pursuant to this Registration Statement
4.1		Specimen Class A Common Stock Certificate
4.2		Specimen Class B Common Stock Certificate
4.3		Revolving Credit Agreement, dated as of February 2, 2001, among United Artists Theatre Company, United Artists Theatre Circuit, Inc., United Artists Realty Company, United Artists Properties I Corp., United Artists Properties II Corp., the Lenders Party thereto, and Bankers Trust Company, as Administrative Agent (filed as exhibit 10.3 to United Artists Theatre Circuit, Inc.'s Form 10-Q for the fiscal quarter ended March 29, 2001 (Commission File No. 033-49598), and incorporated herein by reference)
4.4		Restructured Term Credit Agreement, dated as of February 2, 2001, among United Artists Theatre Company, United Artists Theatre Circuit, Inc., United Artists Realty Company, United Artists Properties I Corp., United Artists Properties II Corp., the Lenders Party thereto and Bank of America, N.A., as Administrative Agent (filed as exhibit 10.1 to United Artists Theatre Circuit, Inc.'s Form 10-Q for the fiscal quarter ended March 29, 2001 (Commission File No. 033-49598), and incorporated herein by reference)

4.5		Credit Agreement, dated as of January 29, 2002, among Regal Cinemas Corporation and Regal Cinemas, Inc. as Co-Borrowers, the lenders party thereto, Lehman Brothers Inc., as Sole Advisor, Sole Lead Arranger and Sole Book Manager, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent, and Lehman Commercial Paper Inc., as Administrative Agent†
4.6		Indenture, dated as of January 29, 2002, by and among Regal Cinemas Corporation, as Issuer, the Guarantors Party thereto and U.S. Trust National Association, as Trustee†
4.7		First Supplemental Indenture, dated as of April 17, 2002, by and among Regal Cinemas Corporation, as Issuer, the Guarantors Party thereto and U.S. Trust National Association, as Trustee†
4.8		Second Supplemental Indenture, dated as of April 17, 2002, by and among Regal Cinemas Corporation, as Issuer, Edwards Theatres, Inc., Florence Theatre Corporation, Morgan Edwards Theatre Corporation, United Cinema Corporation, as Guaranteeing Subsidiaries and U.S. Bank National Association, as Trustee†
4.9		Regal Cinemas Corporation 9¹/8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated January 29, 2002†
4.10		Regal Cinemas Corporation 9¹/8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated April 17, 2002†
4.11		Amendment to Leveraged Lease Facility and Second Supplemental Indenture, dated as of March 7, 2001, among United Artists, Wilmington Trust Company, William J. Wade, Theatre Investors, Northway Associates Limited Partnership, State Street Bank and Trust Company, Susan Keller and MacKay Shields LLC (filed as exhibit 10.2 to United Artists Theatre Circuit, Inc.'s Form 10-Q for the fiscal quarter ended March 29, 2001 (Commission File No. 033-49598) and incorporated herein by reference)
4.12		Trust Indenture and Security Agreement, dated as of December 13, 1995, between Wilmington Trust Company, William J. Wade and Fleet National Bank of Connecticut and Alan B. Coffey (filed as exhibit 4.2 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
4.13		Pass Through Certificates, Series 1995-A Registration Rights Agreement, dated as of December 13, 1995, among United Artists, Morgan Stanley & Co. Incorporated and Merrill Lynch, Pierce, Fenner & Smith Incorporated (filed as exhibit 4.3 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
4.14		Participation Agreement, dated as of December 13, 1995, among United Artists, Theatre Circuit, Inc., Wilmington Trust Company, William J. Wade, Theatre Investors, Inc., Northway Mall Associates, LLC, Wilmington Trust Company, William J. Wade, Fleet National Bank of Connecticut, Alan B. Coffey and Fleet National Bank of Connecticut (filed as exhibit 4.4 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
4.15		Pass Through Trust Agreement, dated as of December 13, 1995, between United Artists Theatre Circuit, Inc. and Fleet National Bank of Connecticut (filed as exhibit 4.5 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)

4.16		Lease Agreement, dated as of December 13, 1995, between Wilmington Trust Company and William J. Wade and United Artists (filed as exhibit 4.6 to United Artists Theatre Circuit, Inc.'s Form S-2 filed February 5, 1996 (Commission File No. 333-1024), and incorporated herein by reference)
5		Opinion of Hogan & Hartson L.L.P. with respect to legality
10.1		Regal Entertainment Group Stockholders' Agreement†
10.2		2002 Regal Entertainment Group Stock Incentive Plan
10.2.1		Form of Stock Option Agreement
10.3		Form of Warrant Agreement†
10.4		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Michael L. Campbell
10.5		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Kurt C. Hall
10.6		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Amy E. Miles
10.7		Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Gregory W. Dunn
10.8		Lease Agreement, dated as of October 1, 1988, between United Artists Properties I Corp. and United Artists Theatre Circuit, Inc. (filed as exhibit 10.1 to United Artists Theatre Circuit, Inc.'s Form S-1 filed October 5, 1992 (Commission File No. 33-49598), and incorporated herein by reference)
21		Subsidiaries of the Registrant†
23.1		Consent of KPMG LLP, Independent Accountants
23.2		Consent of KPMG LLP, Independent Accountants
23.3		Consent of KPMG LLP, Independent Accountants
23.4		Consent Deloitte & Touche LLP, Independent Auditors
23.5		Consent of Arthur Andersen LLP, Independent Accountants
23.6		Consent of Hogan & Hartson L.L.P. (set forth in Exhibit 5)
24		Powers of Attorney (included on the signature page of the Registration Statement)†

†: previously filed

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EXHIBIT 1

[18,000,000]

Regal Entertainment Group

Class A Common Stock

UNDERWRITING AGREEMENT

April , 2002

CREDIT SUISSE FIRST BOSTON CORPORATION
LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
SALOMON SMITH BARNEY INC.,
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629

Dear Sirs:

1. Introductory. Regal Entertainment Group, a Delaware corporation ("Company"), proposes to issue and sell [18,000,000] shares ("Firm Securities") of its Class A Common Stock, par value $0.001 per share ("Securities") and the stockholders listed on Schedule A hereto ("Selling Stockholders") propose severally and not jointly to sell to the Underwriters, at the option of the Underwriters, an aggregate of not more than [2,700,000] additional shares of the Securities as set forth below (such [2,700,000] shares being hereinafter referred to as "Optional Securities"). The Firm Securities and the Optional Securities are herein collectively called the "Offered Securities". As part of the offering contemplated by this Agreement, Credit Suisse First Boston Corporation (the "Designated Underwriter") has agreed to reserve out of the Firm Securities purchased by it under this Agreement, up to [900,000] shares, for sale to the Company's directors, officers, employees and other parties associated with the Company (collectively, "Participants"), as set forth in the Prospectus (as defined herein) under the heading "Underwriting" (the "Directed Share Program"). The Firm Securities to be sold by the Designated Underwriter pursuant to the Directed Share Program (the "Directed Shares") will be sold by the Designated Underwriter pursuant to this Agreement at the public offering price. Any Directed Shares not subscribed for by the end of the business day on which this Agreement is executed will be offered to the public by the Underwriters as set forth in the Prospectus. The Company and the Selling Stockholders, severally and not jointly, hereby agree with the several Underwriters named in Schedule B hereto ("Underwriters") as follows:

2. Representations and Warranties of the Company and the Selling Stockholders. (a) The Company represents and warrants to, and agrees with, the several Underwriters that:

(i) A registration statement (No. 333-84096) relating to the Offered Securities, including a form of prospectus, has been filed with the Securities and Exchange Commission ("Commission") and either (A) has been declared effective under the Securities Act of 1933, as amended ("Act"), and is not proposed to be amended or (B) is proposed to be amended by amendment or post-effective amendment. If such registration statement ("initial registration statement") has been declared effective, either (A) an additional registration statement ("additional registration

statement") relating to the Offered Securities may have been filed with the Commission pursuant to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has become effective upon filing pursuant to such Rule and the Offered Securities all have been duly registered under the Act pursuant to the initial registration statement and, if applicable, the additional registration statement or (B) such an additional registration statement is proposed to be filed with the Commission pursuant to Rule 462(b) and will become effective upon filing pursuant to such Rule and upon such filing the Offered Securities will all have been duly registered under the Act pursuant to the initial registration statement and such additional registration statement. If the Company does not propose to amend the initial registration statement or if an additional registration statement has been filed and the Company does not propose to amend it, and if any post-effective amendment to either such registration statement has been filed with the Commission prior to the execution and delivery of this Agreement, the most recent amendment (if any) to each such registration statement has been declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act or, in the case of the additional registration statement, Rule 462(b). For purposes of this Agreement, "Effective Time" with respect to the initial registration statement or, if filed prior to the execution and delivery of this Agreement, the additional registration statement means (A) if the Company has advised the Representatives that it does not propose to amend such registration statement, the date and time as of which such registration statement, or the most recent post-effective amendment thereto (if any) filed prior to the execution and delivery of this Agreement, was declared effective by the Commission or has become effective upon filing pursuant to Rule 462(c), or (B) if the Company has advised the Representatives that it proposes to file an amendment or post-effective amendment to such registration statement, the date and time as of which such registration statement, as amended by such amendment or post-effective amendment, as the case may be, is declared effective by the Commission. If an additional registration statement has not been filed prior to the execution and delivery of this Agreement but the Company has advised the Representatives that it proposes to file one, "Effective Time" with respect to such additional registration statement means the date and time as of which such registration statement is filed and becomes effective pursuant to Rule 462(b). "Effective Date" with respect to the initial registration statement or the additional registration statement (if any) means the date of the Effective Time thereof. The initial registration statement, as amended at its Effective Time, including all information contained in the additional registration statement (if any) and deemed to be a part of the initial registration statement as of the Effective Time of the additional registration statement pursuant to the General Instructions of the Form on which it is filed and including all information (if any) deemed to be a part of the initial registration statement as of its Effective Time pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred to as the "Initial Registration Statement". The additional registration statement, as amended at its Effective Time, including the contents of the initial registration statement incorporated by reference therein and including all information (if any) deemed to be a part of the additional registration statement as of its Effective Time pursuant to Rule 430A(b), is hereinafter referred to as the "Additional Registration Statement". The Initial Registration Statement and the Additional Registration Statement are herein referred to collectively as the "Registration Statements" and individually as a "Registration Statement". The form of prospectus relating to the Offered Securities, as first filed with the Commission pursuant to and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no such filing is required) as included in a Registration Statement, is hereinafter referred to as the "Prospectus". No document has been or will be prepared or distributed in reliance on Rule 434 under the Act.

and the rules and regulations of the Commission ("Rules and Regulations") and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (B) on the Effective Date of the Additional Registration Statement (if any), each Registration Statement conformed, or will conform, in all material respects to the requirements of the Act and the Rules and Regulations and did not include, or will not include, any untrue statement of a material fact and did not omit, or will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading and (C) on the date of this Agreement, the Initial Registration Statement and, if the Effective Time of the Additional Registration Statement is prior to the execution and delivery of this Agreement, the Additional Registration Statement each conforms, and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Date of the Additional Registration Statement in which the Prospectus is included, each Registration Statement and the Prospectus will conform, in all material respects to the requirements of the Act and the Rules and Regulations, and neither of such documents includes, or will include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. If the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement: on the Effective Date of the Initial Registration Statement, the Initial Registration Statement and the Prospectus will conform in all material respects to the requirements of the Act and the Rules and Regulations, neither of such documents will include any untrue statement of a material fact or will omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and no Additional Registration Statement has been or will be filed. The two preceding sentences do not apply to statements in or omissions from a Registration Statement or the Prospectus based upon written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information is that described as such in Section 7(b) hereof.

(iii) The Company has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and the Company is duly qualified to do business as a foreign corporation in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where the failure to so qualify would not, individually or in the aggregate, have a material adverse effect on the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole, adversely affect the ability of the Company to issue the Offered Securities or perform its obligations hereunder, or otherwise affect the validity of the Offered Securities ("Material Adverse Effect")..

(iv) Each subsidiary of the Company has been duly incorporated or organized and is an existing corporation or other business organization, as the case may be, in good standing under the laws of the jurisdiction of its incorporation or organization, as the case may be, with all requisite power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and each subsidiary of the Company is duly qualified to do business as a foreign corporation or other business organization in good standing in all other jurisdictions in which its ownership or lease of property or the conduct of its business requires such qualification, except where failure to so qualify would not have a Material Adverse Effect; all of the issued and outstanding capital stock or other ownership interests of each subsidiary of the Company has been duly authorized and, in the case of each subsidiary that is a corporation, validly issued and is fully paid and nonassessable; and, except as disclosed in the Prospectus, the capital stock of each subsidiary owned by the Company, directly or through subsidiaries, is owned free from liens, encumbrances and defects.

(v) The Offered Securities and all other outstanding shares of capital stock of the Company have been duly authorized; all outstanding shares of capital stock of the Company are, and, when the Offered Securities have been delivered and paid for in accordance with this Agreement on each Closing Date (as defined below), such Offered Securities will have been, validly issued, fully paid and nonassessable and will conform to the description thereof contained in the Prospectus; and the stockholders of the Company have no preemptive rights with respect to the Securities; and except as disclosed in the Prospectus, there are no outstanding options, warrants or other rights to subscribe for or to purchase, any securities or obligations convertible into, or any contracts or commitments to issue or sell, shares of the Company's capital stock or any such options, warrants, rights, convertible securities or obligations.

(vi) Except as disclosed in the Prospectus, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or any Underwriter for a brokerage commission, finder's fee or other like payment in connection with this offering, and, to the Company's knowledge, neither the Company nor any of its subsidiaries is a party to any other arrangements, agreements, understandings, payments or issuances with respect to the Company that may affect the Underwriters' compensation as determined by the National Association of Securities Dealers, Inc. (the "NASD").

(vii) Other than the Stockholders Agreement, dated as of March 8, 2002 (the "Stockholders Agreement"), by and among the Company and the stockholders listed therein, and the Registration Rights Agreement, dated March 8, 2002 (the "Registration Rights Agreement"), between the Company and its stockholders, there are no contracts, agreements or understandings between the Company and any person granting such person the right to require the Company to file a registration statement under the Act with respect to any securities of the Company owned or to be owned by such person or to require the Company to include such securities in the securities registered pursuant to a Registration Statement or in any securities being registered pursuant to any other registration statement filed by the Company under the Act, and with respect to any such rights granted pursuant to the Stockholders Agreement, the stockholders party thereto have agreed not to exercise any such rights prior to the date that is 180 days after the date of the initial public offering of the Securities.

(viii) The Offered Securities have been approved for listing on The New York Stock Exchange subject to notice of issuance.

(ix) No consent, approval, authorization, or order of, or filing with, any governmental agency or body or any court is required for the consummation of the transactions contemplated by this Agreement in connection with the issuance and sale of the Offered Securities by the Company, except such as have been obtained and made under the Act and the Securities Exchange Act, as amended (the "Exchange Act") and such as may be required under state securities laws or the bylaws or rules and regulations of the NASD.

(x) The execution, delivery and performance of this Agreement, and the issuance and sale of the Offered Securities will not result in a breach or violation of any of the terms and provisions of, or constitute a default under, (A) any statute, any rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or any subsidiary of the Company or any of their properties, (B) any agreement or instrument to which the Company or any such subsidiary is a party or by which the Company or any such subsidiary is bound or to which any of the properties of the Company or any such subsidiary is subject, or (C) the charter or by-laws of the Company or any such subsidiary, except in the case of a breach, violation, or default described in clause (A) or (B) above that would not, singly or in the aggregate, be expected to have a Material Adverse Effect, and the Company has full power and authority to authorize, issue and sell the Offered Securities as contemplated by this Agreement.

(xi) This Agreement has been duly authorized, executed and delivered by the Company.

(xii) Except as disclosed in the Prospectus, the Company and its subsidiaries have good and marketable title to all real properties and all other properties and assets owned by them, in each case free from liens, encumbrances and defects that would materially affect the value thereof or materially interfere with the use made or to be made thereof by them; and except as disclosed in the Prospectus, the Company and its subsidiaries hold all leased real or personal property under valid and enforceable leases with no exceptions that would materially interfere with the use made or to be made thereof by them.

(xiii) The Company and its subsidiaries possess adequate certificates, authorities or permits issued by appropriate governmental agencies or bodies necessary to conduct the business now operated by them and have not received any notice of proceedings relating to the revocation or modification of any such certificate, authority or permit that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

(xiv) Neither the Company nor any of its subsidiaries is (A) in violation of its charter or bylaws or other similar governing documents or (B) in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except, in each case, for any such violation or default which, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

(xv) No labor dispute with the employees of the Company or any subsidiary exists or, to the knowledge of the Company, is imminent that might have a Material Adverse Effect.

(xvi) The Company and its subsidiaries own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other rights to inventions, know-how, patents, copyrights, confidential information and other intellectual property (collectively, "intellectual property rights") necessary to conduct the business now operated by them, or presently employed by them, and have not received any notice of infringement of or conflict with asserted rights of others with respect to any intellectual property rights that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect.

(xvii) Except as disclosed in the Prospectus, neither the Company nor any of its subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental agency or body or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, "environmental laws"), owns or operates any real property contaminated with any substance that is subject to any environmental laws, is liable for any off-site disposal or contamination pursuant to any environmental laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate have a Material Adverse Effect; and the Company is not aware of any pending investigation which might lead to such a claim.

(xviii) (A) Except as disclosed in the Prospectus, there are no pending suits or proceedings against or affecting the Company, any of its subsidiaries or any of their respective properties that, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect, or that are required to be described in the Registration Statement or the Prospectus that are not described as required, or would materially and adversely affect the ability of the Company to perform its obligations under this Agreement, or which are otherwise material in the context of the sale of the Offered Securities; and to the Company's

knowledge, no such actions, suits or proceedings are threatened or contemplated and (B) there are no statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.

(xix) The financial statements included in each Registration Statement and the Prospectus present fairly in all material respects the financial position of the Company and its consolidated subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, and such financial statements have been prepared in conformity with the generally accepted accounting principles in the United States applied on a consistent basis; and the assumptions used in preparing the pro forma financial statements included in each Registration Statement and the Prospectus provide a reasonable basis for presenting the significant effects directly attributable to the transactions or events described therein, the related pro forma adjustments give appropriate effect to those assumptions, and the pro forma columns therein reflect the proper application of those adjustments to the corresponding historical financial statement amounts.

(xx) Except as disclosed in the Prospectus, since the date of the latest audited financial statements included in the Prospectus there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole, and, except as disclosed in or contemplated by the Prospectus, there has been no dividend or distribution of any kind declared, paid or made by the Company on any class of its capital stock.

(xxi) The Company is not and, after giving effect to the offering and sale of the Offered Securities and the application of the proceeds thereof as described in the Prospectus, will not be an "investment company" as defined in the Investment Company Act of 1940.

(xxii) All material Tax returns required to be filed by the Company and each of its subsidiaries have been filed and all such returns are true, complete, and correct in all material respects. All material Taxes that are due or claimed to be due from the Company and each of its subsidiaries have been paid other than those (A) currently payable without penalty or interest or (B) being contested in good faith and by appropriate proceedings and for which, in the case of both clauses (A) and (B), adequate reserves have been established on the books and records of the Company and its subsidiaries in accordance with GAAP. There are no material Tax assessments proposed in writing against the Company or any of its subsidiaries. To the Company's knowledge, the accruals and reserves on the books and records of the Company and its subsidiaries in respect of any material Tax liability for any taxable period not finally determined are adequate to meet any assessments of Tax for any such period. For purposes of this Agreement, the term "Tax" and "Taxes" shall mean all federal, state, local and foreign taxes, and other assessments of a similar nature (whether imposed directly or through withholding), including any interest, additions to tax, or penalties applicable thereto.

(xxiii) Neither the Company nor any of its affiliates (other than any Underwriter, as to which the Company makes no representation), has taken, directly or indirectly, any action designed to cause or result in, or which has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the price of the shares of the Securities in violation of Regulation M under the Exchange Act.

(xxiv) KPMG LLP and Deloitte & Touche, LLP, who have certified the financial statements included in each Registration Statement and the Prospectus, are independent public auditors as required by the Act and the Rules and Regulations. The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide reasonable assurances that (A) transactions are executed in accordance with management's general or specific authorization;

(B) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (C) access to assets is permitted only in accordance with management's general or specific authorization; and (D) the recorded accountability for inventory assets is compared with the existing inventory assets at reasonable intervals and appropriate action is taken with respect to any differences.

(xxv) The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; none of the Company or any of its subsidiaries (A) has received notice from any insurer or agent of such insurer that substantial capital improvements or other material expenditures will have to be made in order to continue such insurance or (B) has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers at a cost that would not have a Material Adverse Effect.

(xxvi) The authorized, issued and outstanding capital stock of the Company as of the date indicated is as set forth in the Prospectus under the heading "Pro Forma Combined" under the caption "Capitalization", and, after giving effect to the sale of the Offered Securities, as set forth under the heading "Pro Forma As Adjusted" under the caption "Capitalization" (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Prospectus or pursuant to the exercise of convertible securities, options or warrants referred to in the Prospectus). Since March 7, 2002, the Company has not issued any securities other than (A) shares of Class A Common Stock, (B) shares of Class B Common Stock, (C) options to purchase shares of Class A Common Stock and (D) warrants to purchase Class A Common Stock pursuant to the Exchange Agreement, dated as of March , 2002, by and among the Company and the parties listed therein.

(xxvii) Subsequent to the respective dates as of which information is given in the Registration Statement and the Prospectus, (A) the Company and its subsidiaries have not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in the ordinary course of business; (B) the Company has not purchase any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock; and (C) there has not been any material change in the capital stock, short-term debt or long-term debt of the Company and its subsidiaries (taken as a whole), except in each case as described in the Prospectus.

(xxviii) The industry, statistical and market-related data included in each Registration Statement and the Prospectus are derived from sources that the Company reasonably and in good faith believes to be accurate, reasonable and reliable, and such data agrees with the sources from which they were derived.

(xxix) The Company is in compliance with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"), except where the failure to be in such compliance would not, individually or in the aggregate, have a Material Adverse Effect; no "reportable event" (as defined in ERISA) has occurred with respect to any "pension plan" (as defined in ERISA) for which the Company would have any liability; except for matters that would not, individually or in the aggregate, have a Material Adverse Effect, the Company has not incurred and does not expect to incur liability under (A) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (B) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder ("Code"); and each "pension plan" for which the Company and each of its subsidiaries would have any liability that is intended

to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification.

(xxx) Furthermore, the Company represents and warrants to the Underwriters that (A) the Registration Statement, the Prospectus and any preliminary prospectus comply, and any further amendments or supplements thereto will comply, with any applicable laws or regulations of foreign jurisdictions in which the Prospectus or any preliminary prospectus, as amended or supplemented, if applicable, are distributed in connection with the Directed Share Program, and that (B) no authorization, approval, consent, license, order, registration or qualification of or with any government, governmental instrumentality or court, other than such as have been obtained, is necessary under the securities law and regulations of foreign jurisdictions in which the Directed Shares are offered outside the United States.

(xxxi) The Company has not offered, or caused the Underwriters to offer, any offered Securities to any person pursuant to the Directed Share Program with the specific intent to unlawfully influence (A) a customer or supplier of the Company to alter the customer's or supplier's level or type of business with the Company or (B) a trade journalist or publication to write or publish favorable information about the Company or its products.

(b) Each of (i) Putnam High Yield Trust, Putnam High Yield Advantage Trust, Putnam Variable Trust-Putnam VT High Yield Fund, Putnam Master Intermediate Income Trust, Putnam Funds Trust-Putnam High Yield Trust II, Travelers Series Fund Inc.-Putnam Diversified Income Portfolio, and Putnam High Yield Fixed Income Fund, LLC (collectively, the "Putnam Selling Stockholders"), and (ii) The Tudor BVI Global Portfolio Ltd. And Tudor Proprietary Trading, L.L.C. (collectively, the "Tudor Selling Stockholders," and, together with the Putnam Selling Stockholders, the "Institutional Selling Stockholders"), severally and not jointly, represents and warrants to, and agrees with, the several Underwriters that:

(i) Such Institutional Selling Stockholder has and on each Closing Date hereinafter mentioned will have valid and unencumbered title to the Offered Securities to be delivered by such Institutional Selling Stockholder on such Closing Date and full right, power and authority to enter into this Agreement and to sell, assign, transfer and deliver the Offered Securities to be delivered by such Institutional Selling Stockholder on such Closing Date hereunder; and upon the delivery of and payment for the Offered Securities on each Closing Date hereunder the several Underwriters will acquire valid and unencumbered title to the Offered Securities to be delivered by such Institutional Selling Stockholder on such Closing Date.

(ii) If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement: (A) on the Effective Date of the Initial Registration Statement, the Initial Registration Statement did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (B) on the Effective Date of the Additional Registration Statement (if any), each Registration Statement did not include, or will not include, any untrue statement of a material fact and did not omit, or will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (C) on the date of this Agreement, the Initial Registration Statement and, if the Effective Time of the Additional Registration Statement is prior to the execution and delivery of this Agreement, the Additional Registration Statement (if any) each does not, and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Date of the Additional Registration Statement in which the Prospectus is included, each Registration Statement and the Prospectus will not, include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. If

the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement: on the Effective Date of the Initial Registration Statement, the Initial Registration Statement and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The two preceding sentences apply only to the extent that any statements in or omissions from a Registration Statement or the Prospectus are made in reliance on and in conformity with written information relating to such Institutional Selling Stockholder furnished to the Company by such Institutional Selling Stockholder specifically for use therein, it being understood and agreed that the only such information furnished by any Institutional Selling Stockholder consists of such Institutional Selling Stockholder's name, number of shares of the Company's Class A Common Stock held by such Institutional Selling Stockholder before and after the offering and its plan to sell any Optional Securities pursuant to this Agreement as set forth under the caption "Principal and Selling Stockholders—Selling Stockholders."

(iii) Except as disclosed in the Prospectus, there are no contracts, agreements or understandings between such Institutional Selling Stockholder and any person that would give rise to a valid claim against such Institutional Selling Stockholder or any Underwriter for a brokerage commission, finder's fee or other like payment in connection with the offering of the Optional Securities by such Institutional Selling Stockholder.

(i) Edwards Affiliated Holdings, LLC has and on each Closing Date hereinafter mentioned will have valid title to the Offered Securities to be delivered by Edwards Affiliated Holdings, LLC on such Closing Date; on each Closing Date, the Offered Securities to be delivered by Edwards Affiliated Holdings, LLC are unencumbered except for the restrictions contained in that certain Escrow Substitution & Distribution Agreement, dated as of March 8, 2002, by and among The Anschutz Corporation, a Kansas corporation ("Anschutz"), OCM Principal Opportunities Fund II, L.P., a Delaware limited partnership ("Oaktree"), W. James Edwards III, Carole Ann Ruoff ("Ruoff"), Joan Edwards Randolph ("Randolph") and Patricia D. Edwards, Bernice Evelyn Edwards individually and as Trustee on behalf of the Bernice Evelyn Edwards Trust, the Company and Edwards Theatres, Inc., a Delaware corporation ("Edwards"), that certain First Amended & Restated Escrow Agreement, dated as of March 8, 2002 by and among the Company, Edwards, Oaktree, Anschutz, W. James Edwards III, Patricia D. Edwards, Ruoff, Randolph and Bernice Evelyn Edwards individually and as Trustee on behalf of The Evelyn Edwards Trust and U.S. Bank Trust National Association (the "Escrow Agent"), as amended by that certain Agreement dated April 12, 2002 and that certain letter to the Escrow Agent dated April 12, 2002, and as further amended by that certain Agreement dated May , 2002 and that certain letter to the Escrow Agent dated , 2002 (collectively, the "the Escrow Agreement")]; and, subject to the terms and conditions of the Escrow Agreement, Edwards Affiliated Holdings, LLC has full right, power and authority to enter into this Agreement and to sell, assign, transfer and deliver the Offered Securities to be delivered by Edwards Affiliated Holdings, LLC on such Closing Date hereunder; and upon the delivery of and payment for the Offered Securities on each Closing Date hereunder the several Underwriters will acquire valid and unencumbered title to the Offered Securities to be delivered by Edwards Affiliated Holdings, LLC on such Closing Date.

and did not omit, or will not omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (C) on the date of this Agreement, the Initial Registration Statement and, if the Effective Time of the Additional Registration Statement is prior to the execution and delivery of this Agreement, the Additional Registration Statement (if any) each does not, and at the time of filing of the Prospectus pursuant to Rule 424(b) or (if no such filing is required) at the Effective Date of the Additional Registration Statement in which the Prospectus is included, each Registration Statement and the Prospectus will not, include, any untrue statement of a material fact or omits, or will omit, to state any material fact required to be stated therein or necessary to make the statements therein not misleading. If the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement: on the Effective Date of the Initial Registration Statement, the Initial Registration Statement and the Prospectus will not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. Except with respect to the information contained in the Prospectus under the caption "Related Party Transactions—Edwards Theatres Transactions," the two preceding sentences apply only to the extent that any statements in or omissions from a Registration Statement or the Prospectus are made in reliance on and in conformity with written information relating to Edwards Affiliated Holdings, LLC furnished to the Company by Edwards Affiliated Holdings, LLC specifically for use therein, it being understood and agreed that the only such information furnished by Edwards Affiliated Holdings, LLC consists of such Edwards Affiliated Holdings, LLC's name, number of shares of the Company's Class A Common Stock held by Edwards Affiliated Holdings, LLC before and after the offering and its plan to sell any Optional Securities pursuant to this Agreement as set forth under the caption "Principal and Selling Stockholders—Selling Stockholders."

(iii) Except as disclosed in the Prospectus, there are no contracts, agreements or understandings between Edwards Affiliated Holdings, LLC and any person that would give rise to a valid claim against Edwards Affiliated Holdings, LLC or any Underwriter for a brokerage commission, finder's fee or other like payment in connection with this offering.

(iv) The description in the Registration Statement and the Prospectus under the caption "Related Party Transactions—Edwards Theatres Transactions" are accurate in all material respects and fairly present the information required to be shown.

3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Company, at a purchase price of $[ ] per share, the respective numbers of shares of Firm Securities set forth opposite the names of the Underwriters in Schedule B hereto.

The Company will deliver the Firm Securities to the Representatives for the accounts of the Underwriters, against payment of the purchase price in Federal (same day) funds by official bank check or checks or wire transfer to an account at a bank acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn to the order of the Company at the office of Hogan & Hartson L.L.P., One Tabor Center, 1200 Seventeenth Street, Suite 1500, Denver, Colorado 80202, at 10:00 A.M., New York time, on [ ], 2002, or at such other time not later than seven full business days thereafter as CSFBC and the Company determine, such time being herein referred to as the "First Closing Date". For purposes of Rule 15c6-1 under the Exchange Act, the First Closing Date (if later than the otherwise applicable settlement date) shall be the settlement date for payment of funds and delivery of securities for all the Offered Securities sold pursuant to the offering. The certificates for the Firm Securities so to be delivered will be in definitive form, in such denominations and registered in such names as CSFBC requests and will be made available for checking and packaging at the above office of Hogan & Hartson L.L.P. at least 24 hours prior to the First Closing Date.

In addition, upon written notice from CSFBC given to the Company and the Selling Stockholders from time to time not more than 30 days subsequent to the date of the Prospectus, the Underwriters may purchase all or less than all of the Optional Securities at the purchase price per Security to be paid for the Firm Securities. The Selling Stockholders agree, severally and not jointly, to sell to the Underwriters the respective numbers of Optional Securities obtained by multiplying the number of Optional Securities specified in such notice by a fraction the numerator of which is the number of shares set forth opposite the names of such Selling Stockholders in Schedule A hereto under the caption "Number of Optional Securities to be Sold" and the denominator of which is the total number of Optional Securities (subject to adjustment by CSFBC to eliminate fractions). Such Optional Securities shall be purchased from each Selling Stockholder for the account of each Underwriter in the same proportion as the number of Firm Securities set forth opposite such Underwriter's name bears to the total number of Firm Securities (subject to adjustment by CSFBC to eliminate fractions) and may be purchased by the Underwriters only for the purpose of covering over-allotments made in connection with the sale of the Firm Securities. No Optional Securities shall be sold or delivered unless the Firm Securities previously have been, or simultaneously are, sold and delivered. The right to purchase the Optional Securities or any portion thereof may be exercised from time to time and to the extent not previously exercised may be surrendered and terminated at any time upon notice by CSFBC to the Company and the Selling Stockholders.

Certificates in negotiable form for the Optional Securities to be sold by Edwards Affiliated Holdings, LLC (other than from the Putnam Selling Stockholders) have been placed in custody, for delivery under this Agreement, under Custody Agreements made with the Company, as custodian ("Custodian"). Edwards Affiliated Holdings, LLC agrees that the shares represented by the certificates held in custody for Edwards Affiliated Holdings, LLC under such Custody Agreements are subject to the interests of the Underwriters hereunder, that the arrangements made by Edwards Affiliated Holdings, LLC for such custody are to that extent irrevocable, and that the obligations of Edwards Affiliated Holdings, LLC hereunder shall not be terminated by operation of law, whether by the death of any individual member of Edwards Affiliated Holdings, LLC or the occurrence of any other event, or in the case of a trust, by the death of any trustee or trustees or the termination of such trust. If Edwards Affiliated Holdings, LLC or any such trustee or trustees should die, or if any other such event should occur, or if any of such trusts should terminate, before the delivery of the Offered Securities hereunder, certificates for such Offered Securities shall be delivered by the Custodian in accordance with the terms and conditions of this Agreement as if such death or other event or termination had not occurred, regardless of whether or not the Custodian shall have received notice of such death or other event or termination.]

Each time for the delivery of and payment for the Optional Securities, being herein referred to as an "Optional Closing Date", which may be the First Closing Date (the First Closing Date and each Optional Closing Date, if any, being sometimes referred to as a "Closing Date"), shall be determined by CSFBC but shall be not later than five full business days after written notice of election to purchase Optional Securities is given. The Custodian [(or, in the case of the Institutional Selling Stockholders (as defined herein), such Institutional Selling Stockholder)] will deliver the Optional Securities being purchased on each Optional Closing Date to the Representatives for the accounts of the several Underwriters, at the above office of Hogan & Hartson L.L.P. against payment of the purchase price therefor in Federal (same day) funds by official bank check or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to the order of the Selling Stockholders as set forth on Schedule C, at the above office of Hogan & Hartson L.L.P. The certificates for the Optional Securities being purchased on each Optional Closing Date will be in definitive form, in such denominations and registered in such names as CSFBC requests upon reasonable notice prior to such Optional Closing Date and will be made available for checking and packaging at the above office of Hogan & Hartson L.L.P. at a reasonable time in advance of such Optional Closing Date.

4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Offered Securities for sale to the public as set forth in the Prospectus.

5. Certain Agreements of the Company and the Selling Stockholders. The Company and each of the Selling Stockholders agree, severally and not jointly, with the several Underwriters that:

(a) If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, the Company will file the Prospectus with the Commission pursuant to and in accordance with subparagraph (1) (or, if applicable and if consented to by CSFBC, subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the second business day following the execution and delivery of this Agreement or (B) the fifteenth business day after the Effective Date of the Initial Registration Statement. The Company will advise CSFBC promptly of any such filing pursuant to Rule 424(b). If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement and an additional registration statement is necessary to register a portion of the Offered Securities under the Act but the Effective Time thereof has not occurred as of such execution and delivery, the Company will file the additional registration statement or, if filed, will file a post-effective amendment thereto with the Commission pursuant to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement or, if earlier, on or prior to the time the Prospectus is printed and distributed to any Underwriter, or will make such filing at such later date as shall have been consented to by CSFBC.

(b) The Company will advise CSFBC promptly of any proposal to amend or supplement the initial or any additional registration statement as filed or the related prospectus or the Initial Registration Statement, the Additional Registration Statement (if any) or the Prospectus and will not effect such amendment or supplementation without CSFBC's consent; and the Company will also advise CSFBC promptly of the effectiveness of each Registration Statement (if its Effective Time is subsequent to the execution and delivery of this Agreement) and of any amendment or supplementation of a Registration Statement or the Prospectus and of the institution by the Commission of any stop order proceedings in respect of a Registration Statement and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued.

(c) If, at any time when a prospectus relating to the Offered Securities is required to be delivered under the Act in connection with sales by any Underwriter or dealer, any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Company will promptly notify CSFBC of such event and will promptly prepare and file with the Commission, at its own expense, an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. Neither CSFBC's consent to, nor the Underwriters' delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.

(d) As soon as practicable, but not later than the Availability Date (as defined below), the Company will make generally available to its securityholders an earnings statement covering a period of at least 12 months beginning after the Effective Date of the Initial Registration Statement (or, if later, the Effective Date of the Additional Registration Statement) which will satisfy the provisions of Section 11(a) of the Act. For the purpose of the preceding sentence, "Availability Date" means the 45th day after the end of the fourth fiscal quarter following the fiscal quarter that includes such Effective Date, except that, if such fourth fiscal quarter is the last

quarter of the Company's fiscal year, "Availability Date" means the 90th day after the end of such fourth fiscal quarter.

(e) The Company will furnish to the Representatives copies of each Registration Statement (three of which will be signed and will include all exhibits), each related preliminary prospectus, and, so long as a prospectus relating to the Offered Securities is required to be delivered under the Act in connection with sales by any Underwriter or dealer, the Prospectus and all amendments and supplements to such documents, in each case in such quantities as CSFBC requests. The Prospectus shall be so furnished on or prior to 3:00 P.M., New York time, on the business day following the later of the execution and delivery of this Agreement or the Effective Time of the Initial Registration Statement. All other such documents shall be so furnished as soon as available. The Company will pay the expenses of printing and distributing to the Underwriters all such documents.

(f) The Company will arrange for the qualification of the Offered Securities for sale under the laws of such jurisdictions as CSFBC designates and will continue such qualifications in effect so long as required for the distribution; provided, however, that the Company will not be required to arrange for qualification of the Offered Securities in any jurisdiction in which the Company would be required to qualify to do business as a foreign corporation or to execute a general consent to service of process in order to effect such qualification of the Offered Securities.

(g) During the period of three years hereafter, the Company will furnish to the Representatives and, upon request, to each of the other Underwriters, as soon as practicable after the end of each fiscal year, a copy of its annual report to stockholders for such year; and the Company will furnish to the Representatives (i) as soon as available, a copy of each report and any definitive proxy statement of the Company filed with the Commission under the Exchange Act or mailed to stockholders, and (ii) from time to time, such other publicly available information concerning the Company as CSFBC may reasonably request.

(h) The Company and each Selling Stockholder agree with the several Underwriters that the Company and such Selling Stockholder will pay all of their respective expenses incident to the performance of the obligations of the Company and such Selling Stockholder, as the case may be, under this Agreement, for any filing fees and other expenses (including fees and disbursements of counsel) in connection with qualification of the Offered Securities for sale under the laws of such jurisdictions as CSFBC designates and the printing of memoranda relating thereto, for the filing fee incident to the review by the NASD of the Offered Securities, for any travel expenses of the Company's officers and employees and any other expenses of the Company in connection with attending or hosting meetings with prospective purchasers of the Offered Securities, for any transfer taxes on the sale by the Selling Stockholders of the Offered Securities to the Underwriters and for expenses incurred in distributing preliminary prospectuses and the Prospectus (including any amendments and supplements thereto) to the Underwriters.

(i) For a period of 180 days after the date of the initial public offering of the Offered Securities, the Company will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, or file with the Commission a registration statement under the Act relating to, any additional shares of its Securities or securities convertible into or exchangeable or exercisable for any shares of its Securities, or publicly disclose the intention to make any such offer, sale, pledge, disposition or filing, without the prior written consent of CSFBC, except issuances of Securities pursuant to the conversion or exchange of convertible or exchangeable securities or the exercise of warrants or options, in each case outstanding on the date hereof and described in the Prospectus, grants of employee stock options pursuant to the terms of a plan in effect on the date hereof and described in the Prospectus, issuances of Securities pursuant to the exercise of such options.

(j) In connection with the Directed Share Program, the Company will ensure that the Directed Shares will be restricted to the extent required by the NASD or the NASD rules from sale, transfer, assignment, pledge or hypothecation for a period of three months following the date of the effectiveness of the Registration Statement. The Designated Underwriter will notify the Company as to which Participants will need to be so restricted. The Company will direct the transfer agent to place stop transfer restrictions upon such securities for such period of time.

(k) The Company will pay all fees and disbursements of counsel incurred by the Underwriters in connection with the Directed Shares Program and stamp duties, similar taxes or duties or other taxes, if any, incurred by the underwriters in connection with the Directed Share Program.

Furthermore, the Company covenants with the Underwriters that the Company will comply with all applicable securities and other applicable laws, rules and regulations in each foreign jurisdiction in which the Directed Shares are offered in connection with the Directed Share Program.

6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Firm Securities on the First Closing Date and the Optional Securities to be purchased on each Optional Closing Date will be subject to the accuracy of the representations and warranties on the part of the Company and the Selling Stockholders herein, to the accuracy of the statements of Company officers made pursuant to the provisions hereof, to the performance by the Company and the Selling Stockholders of their obligations hereunder and to the following additional conditions precedent:

(a) The Representatives shall have received a letter, dated the date of delivery thereof (which, if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, shall be on or prior to the date of this Agreement or, if the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement, shall be prior to the filing of the amendment or post-effective amendment to the registration statement to be filed shortly prior to such Effective Time), of KPMG LLP (with respect to the financial statements of each of the Company, Edwards Theatres, Inc. and United Artists Theatre Company included in the Prospectus) confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating to the effect that:

i. in their opinion the financial statements and schedules examined by them and included in the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Act and the related published Rules and Regulations;

ii. they have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 71, Interim Financial Information, on the unaudited financial statements included in the Registration Statements;

iii. on the basis of the review referred to in clause (ii) above, a reading of the latest available interim financial statements of the Company, inquiries of officials of the Company, Edwards Theatres, Inc. and United Artists Theatre Company who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that:

(A) the unaudited financial statements included in the Registration Statement do not comply as to form in all material respects with the applicable accounting requirements of the Act and the related published Rules and Regulations or any material modifications should be made to such unaudited financial statements for them to be in conformity with GAAP;

(B) at the date of the latest available balance sheet read by such accountants, or at a subsequent specified date not more than three business days prior to the date of this Agreement, there was any change in the capital stock or any increase in short-term indebtedness or long-term debt of the Company, Edwards Theatres, Inc. and United Artists Theatre Company and its consolidated subsidiaries or, at the date of the latest available balance sheet read by such accountants, there was any decrease in consolidated net current assets or net assets, as compared with amounts shown on the latest balance sheet included in the Prospectus; or

(C) for the period from the closing date of the latest income statement included in the Prospectus to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year, in consolidated net revenue or net operating income, or in the total or per share amounts of consolidated income before extraordinary items or net income,

except in all cases set forth in clauses (B) and (C) above for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and

iv. they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Registration Statement (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Company, Edwards Theatres, Inc. and United Artists Theatre Company and its subsidiaries subject to the internal controls of the Company, Edwards Theatres, Inc. and United Artists Theatre Company's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

For purposes of this subsection, (i) if the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement, "Registration Statement" shall mean the initial registration statement as proposed to be amended by the amendment or post-effective amendment to be filed shortly prior to its Effective Time, (ii) if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement but the Effective Time of the Additional Registration Statement is subsequent to such execution and delivery, "Registration Statements" shall mean the Initial Registration Statement and the additional registration statement as proposed to be filed or as proposed to be amended by the post-effective amendment to be filed shortly prior to its Effective Time, and (iii) "Prospectus" shall mean the prospectus included in the Registration Statements.

(b) The Representatives shall have received a letter, dated the date of delivery thereof (which, if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, shall be on or prior to the date of this Agreement or, if the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement, shall be prior to the filing of the amendment or post-effective amendment to the registration statement to be filed shortly prior to such Effective Time), of Deloitte & Touche, LLP (with respect to the financial statements of Regal Cinemas, Inc. included in the Prospectus) confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating to the effect that:

i. in their opinion the financial statements and schedules examined by them and included in the Registration Statement comply as to form in all material respects with the

applicable accounting requirements of the Act and the related published Rules and Regulations; and

ii. they have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Registration Statement (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of Regal Cinemas Corporation and its subsidiaries, including Regal Cinemas, Inc. subject to the internal controls of Regal Cinemas Corporation's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in such letter.

For purposes of this subsection, (i) if the Effective Time of the Initial Registration Statement is subsequent to the execution and delivery of this Agreement, "Registration Statement" shall mean the initial registration statement as proposed to be amended by the amendment or post-effective amendment to be filed shortly prior to its Effective Time, (ii) if the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement but the Effective Time of the Additional Registration is subsequent to such execution and delivery, "Registration Statements" shall mean the Initial Registration Statement and the additional registration statement as proposed to be filed or as proposed to be amended by the post-effective amendment to be filed shortly prior to its Effective Time, and (iii) "Prospectus" shall mean the prospectus included in the Registration Statements.

(c) If the Effective Time of the Initial Registration Statement is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York time, on the date of this Agreement or such later date as shall have been consented to by CSFBC. If the Effective Time of the Additional Registration Statement (if any) is not prior to the execution and delivery of this Agreement, such Effective Time shall have occurred not later than 10:00 P.M., New York time, on the date of this Agreement or, if earlier, the time the Prospectus is printed and distributed to any Underwriter, or shall have occurred at such later date as shall have been consented to by CSFBC. If the Effective Time of the Initial Registration Statement is prior to the execution and delivery of this Agreement, the Prospectus shall have been filed with the Commission in accordance with the Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing Date, no stop order suspending the effectiveness of a Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Selling Stockholders, the Company or the Representatives, shall be contemplated by the Commission.

(d) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as one enterprise which, in the judgment of a majority in interest of the Underwriters including the Representatives, is material and adverse and makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Offered Securities; (ii) any downgrading in the rating of any debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Company (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading, of such rating); (iii) any change in U.S. or

international financial, political or economic conditions or currency exchange rates or exchange controls as would, in the judgment of a majority in interest of the Underwriters including the Representatives, be likely to prejudice materially the success of the proposed issue, sale or distribution of the Offered Securities, whether in the primary market or in respect of dealings in the secondary market; (iv) any material suspension or material limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange, or any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market; (v) any banking moratorium declared by U.S. Federal or New York authorities; (vi) any major disruption of settlements of securities or clearance services in the United States or (vii) any attack on, outbreak or escalation of hostilities or act of terrorism involving the United States, any declaration of war by Congress or any other national or international calamity or emergency if, in the judgment of a majority in interest of the Underwriters including the Representatives, the effect of any such attack, outbreak, escalation, act, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for the Offered Securities.

(e) The Representatives shall have received an opinion, dated such Closing Date, of Hogan & Hartson L.L.P., counsel for the Company, substantially in the form attached as Exhibit A hereto.

(f) The Representatives shall have received an opinion, dated such Closing Date, of Peter Brandow, General Counsel to the Company, substantially in the form attached as Exhibit B hereto.

(g) The Representatives shall have received an opinion, dated such Optional Closing Date, of Ropes & Gray, counsel for the Putnam Selling Stockholders, substantially in the form attached as Exhibit C hereto.

(h) The Representatives shall have received an opinion, dated such Optional Closing Date, of [ ], counsel for the Tudor Selling Stockholders, substantially in the form attached as Exhibit D hereto.

(i) The Representatives shall have received an opinion, dated such Optional Closing Date, of Joseph Mona, counsel for the Edwards Affiliated Holdings, substantially in the form attached as Exhibit E hereto.

(j) The Representatives shall have received from Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Underwriters, such opinion or opinions, dated such Closing Date, with respect to the incorporation of the Company, the validity of the Offered Securities delivered on such Closing Date, the Registration Statements, the Prospectus and other related matters as the Representatives may require, and the Selling Stockholders and the Company shall have furnished to such counsel such documents as they may reasonably request for the purpose of enabling them to pass upon such matters.

(k) The Representatives shall have received a certificate, dated such Closing Date, of the Co-Chief Executive Officer or any Vice President and a principal financial or accounting officer of the Company in which such officers, to the best of their knowledge after reasonable investigation, shall state that: the representations and warranties of the Company in this Agreement are true and correct in all material respects (except for those representations and warranties that are already qualified as to materiality, in which case such representations and warranties shall be true in all respects); the Company has complied in all material respects with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date; no stop order suspending the effectiveness of any

Registration Statement has been issued and no proceedings for that purpose have been instituted or are pending or contemplated by the Commission; the Additional Registration Statement (if any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance with Rule 111(a) or (b) under the Act, prior to the time the Prospectus was printed and distributed to any Underwriter; and, subsequent to the respective dates of the most recent financial statements in the Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or other), business, properties or results of operations of the Company and its subsidiaries taken as a whole except as set forth in or contemplated by the Prospectus or as described in such certificate.

(l) The Representatives shall have received a letter, dated such Closing Date, of KPMG LLP which meets the requirements of subsection (a) of this Section, except that the specified date referred to in such subsection will be a date not more than three days prior to such Closing Date for the purposes of this subsection.

(m) The Representatives shall have received a letter, dated such Closing Date, of Deloitte & Touche, LLP which meets the requirements of subsection (b) of this Section, except that the specified date referred to in such subsection will be a date not more than three days prior to such Closing Date for the purposes of this subsection.

(n) On or prior to the date of this Agreement, the Representatives shall have received lockup letters from each of the stockholders, executive officers and directors of the Company.

(o) The Custodian shall deliver to CSFBC a letter stating that they will deliver to each Selling Stockholder a United States Treasury Department Form 1099 (or other applicable form or statement specified by the United States Treasury Department regulations in lieu thereof) on or before January 31 of the year following the date of this Agreement.

(p) Each Selling Stockholder shall deliver to CSFBC a properly completed and executed United States Treasury Department Form W-9 (or other applicable form or statement specified by Treasury Department regulations in lieu thereof).

The Selling Stockholders and the Company will furnish the Representatives with such conformed copies of such opinions, certificates, letters and documents as the Representatives reasonably request. CSFBC may in its sole discretion waive on behalf of the Underwriters compliance with any conditions to the obligations of the Underwriters hereunder, whether in respect of an Optional Closing Date or otherwise.

7. Indemnification and Contribution. (a) The Company will indemnify and hold harmless each Underwriter, its partners, directors and officers and each person, if any who controls such Underwriter within the meaning of Section 15 of the Act, against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such

documents in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (c) below; provided, however, that with respect to any untrue statement or alleged untrue statement in or omission or alleged omission from any preliminary prospectus the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased the Offered Securities concerned, to the extent that a prospectus relating to such Offered Securities was required to be delivered by such Underwriter under the Act in connection with such purchase and any such loss, claim, damage or liability of such Underwriter results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Offered Securities to such person, a copy of the Prospectus if the Company had previously furnished copies thereof to such Underwriter.

Insofar as the foregoing indemnity agreement, or the representations and warranties contained in Section 2(a)(ii), may permit indemnification for liabilities under the Act of any person who is an Underwriter or a partner or controlling person of an Underwriter within the meaning of Section 15 of the Act and who, at the date of this Agreement, is a director, officer or controlling person of the Company, the Company has been advised that in the opinion of the Commission such provisions may contravene Federal public policy as expressed in the Act and may therefore be unenforceable. In the event that a claim for indemnification under such agreement or such representations and warranties for any such liabilities (except insofar as such agreement provides for the payment by the Company of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by such a person, the Company will submit to a court of appropriate jurisdiction (unless in the opinion of counsel for the Company the matter has already been settled by controlling precedent) the question of whether or not indemnification by it for such liabilities is against public policy as expressed in the Act and therefore unenforceable, and the Company will be governed by the final adjudication of such issue.

The Company agrees to indemnify and hold harmless the Designated Underwriter and each person, if any, who controls the Designated Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (the "Designated Entities"), from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) (i) caused by any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the consent of the Company for distribution to Participants in connection with the Directed Share Program or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) caused by the failure of any Participant to pay for and accept delivery of Directed Shares that the Participant agreed to purchase; or (iii) related to, arising out of, or in connection with the Directed Share Program, other than losses, claims, damages or liabilities (or expenses relating thereto) that are finally judicially determined to have resulted from the bad faith or gross negligence of the Designated Entities.

(b) Each of the Institutional Selling Stockholders, severally and not jointly, will indemnify and hold harmless each Underwriter, its partners, directors and officers and each person who controls such Underwriter within the meaning of Section 15 of the Act, against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or

alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that such Institutional Selling Stockholder shall only be subject to such liability to the extent that the untrue statement or alleged untrue statement or omission or alleged omission is based upon and in conformity with written information provided by such Institutional Selling Stockholder relating to such Institutional Selling Stockholder specifically for use therein or contained in a representation or warranty given by such Institutional Selling Stockholder in this Agreement, it being understood and agreed that the only such information furnished by any Institutional Selling Stockholder consists of each Institutional Selling Stockholder's name, number of shares of the Company's Class A Common Stock held by each Selling Stockholder before and after the offering and its plan to sell any Optional Securities pursuant to this Agreement as set forth under the caption "Principal and Selling Stockholders—Selling Stockholders"; provided, however, that with respect to any untrue statement or alleged untrue statement in or omission or alleged omission from any preliminary prospectus the indemnity agreement contained in this subsection (b) shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased the Offered Securities concerned, to the extent that a prospectus relating to such Offered Securities was required to be delivered by such Underwriter under the Act in connection with such purchase and any such loss, claim, damage or liability of such Underwriter results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Offered Securities to such person, a copy of the Prospectus if the Company had previously furnished copies thereof to such Underwriter; and provided, however, that the liability under this Section 7 of each Institutional Selling Stockholder shall be limited to an amount equal to the gross proceeds to such Institutional Selling Stockholder from the sale of any Optional Securities sold by such Institutional Selling Stockholder hereunder.

(c) Edwards Affiliated Holdings, LLC will indemnify and hold harmless each Underwriter, its partners, directors and officers and each person who controls such Underwriter within the meaning of Section 15 of the Act, against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that Edwards Affiliated Holdings, LLC shall only be subject to such liability (i) to the extent that the untrue statement or alleged untrue statement or omission or alleged omission is based upon and in conformity with written information provided by Edwards Affiliated Holdings, LLC relating to Edwards Affiliated Holdings, LLC specifically for use therein or contained in a representation or warranty given by Edwards Affiliated Holdings, LLC in this Agreement, it being understood and agreed that the only such information furnished by Edwards Affiliated Holdings, LLC consists of Edwards Affiliated Holdings, LLC's name, number of shares of the Company's Class A Common Stock held by Edwards Affiliated Holdings, LLC before and after the offering and its plan to sell any Optional Securities pursuant to this Agreement as set forth under the caption "Principal and Selling Stockholders—Selling Stockholders,"or (ii) to the extent that the untrue statement or alleged untrue statement or omission or alleged omission relates to information set forth under the caption "Related Party Transactions—Edwards Theatres Transactions;" provided, however, that with

respect to any untrue statement or alleged untrue statement in or omission or alleged omission from any preliminary prospectus the indemnity agreement contained in this subsection (c) shall not inure to the benefit of any Underwriter from whom the person asserting any such losses, claims, damages or liabilities purchased the Offered Securities concerned, to the extent that a prospectus relating to such Offered Securities was required to be delivered by such Underwriter under the Act in connection with such purchase and any such loss, claim, damage or liability of such Underwriter results from the fact that there was not sent or given to such person, at or prior to the written confirmation of the sale of such Offered Securities to such person, a copy of the Prospectus if the Company had previously furnished copies thereof to such Underwriter; and provided, however, that the liability under this Section 7 of each Institutional Selling Stockholder shall be limited to an amount equal to the gross proceeds to such Institutional Selling Stockholder from the sale of any Optional Securities sold by such Institutional Selling Stockholder hereunder.

(d) Each Underwriter will severally and not jointly indemnify and hold harmless the Company, its directors and officers and each person, if any, who controls the Company within the meaning of Section 15 of the Act, and each Selling Stockholder and each person, if any, who controls each Selling Stockholder within the meaning of Section 15 of the Act, against any losses, claims, damages or liabilities to which the Company or such Selling Stockholder may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company and each Selling Stockholder in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures appearing in the 4^th paragraph under the caption "Underwriting" and the information contained in the 9^th, 16^th and 17^th paragraphs under the caption "Underwriting."

(e) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under subsection (a), (b), (c) or (d) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a), (b), (c) or (d) above, except to the extent that the indemnifying party is materially prejudiced by such omission to notify. In case any such action is brought against any indemnified party and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. Notwithstanding anything contained herein to the contrary, if indemnity may be sought pursuant to the last paragraph in Section 7 (a) hereof in respect of such action or

proceeding, then in addition to such separate firm for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one separate firm (in addition to any local counsel) for the Designated Underwriter for the defense of any losses, claims, damages and liabilities arising out of the Directed Share Program, and all persons, if any, who control the Designated Underwriter within the meaning of either Section 15 of the Act of Section 20 of the Exchange Act. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of an indemnified party.

(f) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a), (b), (c) or (d) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a), (b), (c) or (d) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Stockholders, on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company and the Selling Stockholders on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and the Selling Stockholders bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the Selling Stockholders or the Underwriters and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (e) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (e). Notwithstanding the provisions of this subsection (e), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (e) to contribute are several in proportion to their respective underwriting obligations and not joint.

(g) The obligations of the Company and the Selling Stockholders under this Section shall be in addition to any liability which the Company and the Selling Stockholders may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company, to each

officer of the Company who has signed a Registration Statement and to each person, if any, who controls the Company or the Selling Stockholders within the meaning of the Act.

8. Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the aggregate number of shares of Offered Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total number of shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date, CSFBC may make arrangements satisfactory to the Company and the Selling Stockholders for the purchase of such Offered Securities by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Offered Securities that such defaulting Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate number of shares of Offered Securities with respect to which such default or defaults occur exceeds 10% of the total number of shares of Offered Securities that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to CSFBC, the Company and the Selling Stockholders for the purchase of such Offered Securities by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter, the Company or the Selling Stockholders, except as provided in Section 9 (provided that if such default occurs with respect to Optional Securities after the First Closing Date, this Agreement will not terminate as to the Firm Securities or any Optional Securities purchased prior to such termination). As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.

9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Selling Stockholders, of the Company or its officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter, any Selling Stockholder, the Company or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Offered Securities. If this Agreement is terminated pursuant to Section 8 or if for any reason the purchase of the Offered Securities by the Underwriters is not consummated, the Company and the Selling Stockholders shall remain responsible for the expenses to be paid or reimbursed by them pursuant to Section 5 and the respective obligations of the Company, the Selling Stockholders, and the Underwriters pursuant to Section 7 shall remain in effect, and if any Offered Securities have been purchased hereunder the representations and warranties in Section 2 and all obligations under Section 5 shall also remain in effect. If the purchase of the Offered Securities by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 8 or the occurrence of any event specified in clause (iii), (iv), (v), (vi) or (vii) of Section 6(c), the Company will reimburse the Underwriters for all out-of-pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Offered Securities.

10. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives c/o Credit Suisse First Boston Corporation, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention: Transactions Advisory Group, or, if sent to the Company, will be mailed, delivered or telegraphed and confirmed to it at 9110 East Nichols Avenue, Centennial, Colorado 80112, Attention: General Counsel; or, if sent to the Selling Stockholders or any of them, will be mailed, delivered or telegraphed and confirmed to the persons identified on Schedule C, with a copy to Whitney Holmes, Esq. at Hogan & Hartson L.L.P., One Tabor Center, 15^th Floor, 1200 Seventeenth Street, Denver, Colorado 80202; provided, however,

that any notice to an Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed and confirmed to such Underwriter.

11. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 7, and no other person will have any right or obligation hereunder.

12. Representation. The Representatives will act for the several Underwriters in connection with this financing, and any action under this Agreement taken by the Representatives jointly or by CSFBC will be binding upon all the Underwriters.

13. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

14. Applicable Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York, including, without limitation, Sections 5-1401 and 5-1402 of the New York General Obligations Law and New York Civil Practice Laws and Rules 327(b).

The Company hereby submits to the non-exclusive jurisdiction of the Federal and state courts in the Borough of Manhattan in The City of New York in any suit or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

If the foregoing is in accordance with the Representatives' understanding of our agreement, kindly sign and return to the Company one of the counterparts hereof, whereupon it will become a binding agreement between the Company, the Selling Stockholders and the several Underwriters in accordance with its terms.

Very truly yours,

	REGAL ENTERTAINMENT GROUP
	By
		Name: Title:
	PUTNAM HIGH YIELD TRUST PUTNAM HIGH YIELD ADVANTAGE FUND PUTNAM VARIABLE TRUST—PUTNAM VT HIGH YIELD FUND PUTNAM MASTER INTERMEDIATE INCOME TRUST PUTNAM FUNDS TRUST—PUTNAM HIGH YIELD TRUST II TRAVELERS SERIES FUND INC.—PUTNAM DIVERSIFIED INCOME PORTFOLIO
	By: Putnam Investment Management LLC
	By
		Name: Title:
	PUTNAM HIGH YIELD FIXED INCOME FUND, LLC
	By: Putnam Fiduciary Trust Company
	By
		Name: Title:
	THE TUDOR BVI GLOBAL PORTFOLIO LTD.

		By
				Name: Title:
		TUDOR PROPRIETARY TRADING, L.L.C.
		By
				Name: Title:
		EDWARDS AFFILIATED HOLDINGS, LLC
		By
				Name: Title:

CREDIT SUISSE FIRST BOSTON CORPORATION LEHMAN BROTHERS INC. BEAR, STEARNS & CO. INC. SALOMON SMITH BARNEY INC.

	Acting on behalf of themselves and as the Representatives of the several Underwriters
BY CREDIT SUISSE FIRST BOSTON CORPORATION
By
		Name: Title:

SCHEDULE A

Selling Stockholder		Number of Optional Securities to be Sold
Putnam High Yield Trust		349,194
Putnam High Yield Advantage Fund		175,460
Putnam Variable Trust—Putnam VT High Yield Fund		96,585
Putnam Master Intermediate Income Trust		45,552
Putnam Funds Trust—Putnam High Yield Trust II		260,757
Travelers Series Fund Inc.—Putnam Diversified Income Portfolio		6,995
Putnam High Yield Fixed Income Fund, LLC		8,092
The Tudor BVI Global Portfolio Ltd.		1,213,892
Tudor Proprietary Trading, L.L.C.		303,473
Edwards Affiliated Holdings, LLC		240,000
	TOTAL	2,700,000

SCHEDULE B

Underwriter			Number of Firm Securities
Credit Suisse First Boston Corporation
Lehman Brothers Inc.
Bear, Stearns & Co. Inc.
Salomon Smith Barney Inc.

	Total

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EXHIBIT 1

EX-3.2 4 a2078602zex-3_2.htm EXHIBIT 3.2
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EXHIBIT 3.2

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

REGAL ENTERTAINMENT GROUP

Regal Entertainment Group, a corporation organized and existing under the laws of the State of Delaware, does hereby certify:

1. The name of the corporation is Regal Entertainment Group (the "Corporation"). The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on March 6, 2002.

2. The Amended and Restated Certificate of Incorporation as hereinafter set forth has been duly adopted in accordance with Section 242 of the General Corporation Law of the State of Delaware (the "Delaware General Corporation Law"), and the restatement herein set forth has been duly adopted pursuant to Section 245 of the Delaware General Corporation Law by the written consent of the Board of Directors of the Corporation in accordance with Section 141(f) of the Delaware General Corporation Law and by the written consent of the Stockholders of the Corporation in accordance with Section 228 of the Delaware General Corporation Law. This Amended and Restated Certificate of Incorporation restates and integrates and amends the provisions of the Corporation's Certificate of Incorporation.

3. The text of the Certificate of Incorporation is hereby amended and restated to read in its entirety as follows:

ARTICLE FIRST
NAME OF CORPORATION

The name of the corporation is Regal Entertainment Group (the "Corporation").

ARTICLE SECOND
REGISTERED OFFICE AND REGISTERED AGENT

The address of the Corporation's registered office in the State of Delaware is The Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801. The name of the registered agent of the Corporation at such address is The Corporation Trust Company.

ARTICLE THIRD
PURPOSE

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "Delaware General Corporation Law"). The Corporation shall have all power necessary or convenient to the conduct, promotion or attainment of such acts and activities.

ARTICLE FOURTH
CAPITAL STOCK

A. The total number of shares of all classes of capital stock that the Corporation shall have authority to issue is 750,000,000 shares consisting of: (1) 500,000,000 shares of Class A Common Stock, par value $0.001 per share (the "Class A Common Stock"), (2) 200,000,000 shares of Class B Common Stock, par value $0.001 per share (the "Class B Common Stock" and, together with the Class A Common Stock, the "Common Stock") and (3) 50,000,000 shares of Preferred Stock, par value $0.001

per share (the "Preferred Stock"). Except as otherwise provided herein, the number of authorized shares of Class A Common Stock, Class B Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding or reserved for issuance upon reclassification or conversion of the Class B Common Stock or any series of Preferred Stock, or upon the exercise of outstanding options, warrants or other instruments or securities outstanding from time to time that are convertible into, or exchangeable for Common Stock or Preferred Stock) by the affirmative vote of a majority of the combined voting power of outstanding shares of capital stock of the Corporation entitled to vote thereon, voting as a single class irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law (or any successor provision thereto). This paragraph A of Article FOURTH shall not in any way limit the provisions of Section 242(b)(1) of the Delaware General Corporation Law other than with respect to the elimination of any class vote that would otherwise be required pursuant to Section 242(b)(2).

B. The Board of Directors shall have the full authority permitted by law, at any time and from time to time, to provide for the issuance of shares of Preferred Stock in one or more series and to determine by resolution or resolutions the following provisions, designations, powers, preferences and relative, participating, optional and other special rights, and the qualifications, limitations or restrictions, of the shares of any such series of Preferred Stock:

(1) the designation of such series (which may be by distinguishing number, letter or title), the number of shares to constitute such series (which number the Board of Directors may thereafter increase or decrease (but not below the number of shares thereof then outstanding)) and the stated or liquidation value thereof, if different from the par value thereof;

(2) whether the shares of such series shall have voting rights in addition to any voting rights provided by law, and, if so, the terms of such voting rights, which may be full or limited;

(3) the dividends, if any, payable on such series, whether any such dividends shall be cumulative and, if so, from what dates, the conditions and dates upon which such dividends shall be payable, the preference or relation that such dividends shall bear to the dividends payable on any shares of any other class of capital stock or any other series of Preferred Stock;

(4) whether the shares of such series shall be subject to redemption at the election of the Corporation or the holders of such series, or upon the occurrence of a specified event and, if so, the times, prices and other terms and conditions of such redemption, including the manner of selecting shares for redemption if less than all shares are to be redeemed and the securities or other property payable on such redemption, if any;

(5) the amount or amounts payable on, if any, and the preferences, if any, of shares of such series in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of, or upon any distribution of the assets of, the Corporation;

(6) whether the shares of such series shall be subject to the operation of a retirement or sinking fund and, if so, the extent to and manner in which any such retirement or sinking fund shall be applied to the purchase or redemption of the shares of such series for retirement or other corporate purposes and the terms and provisions relative to the operation thereof;

(7) whether the shares of such series shall be convertible into, or exchangeable for, shares of any other class of capital stock or any other series of Preferred Stock or any other securities (whether or not issued by the Corporation) and, if so, the price or prices or the rate or rates of conversion or exchange and the method, if any, of adjusting the same, and any other terms and conditions of conversion or exchange;

(8) the limitations and restrictions, if any, to be effective while any shares of such series are outstanding upon the payment of dividends or the making of other distributions on, or upon the purchase, redemption or other acquisition by the Corporation of, the Common Stock or shares of any other class of capital stock or any other series of Preferred Stock;

(9) the conditions or restrictions, if any, upon the creation of indebtedness of the Corporation or upon the issuance of any additional stock, including additional shares of any other series of Preferred Stock or of any other class of capital stock;

(10) the ranking (be it pari passu, junior or senior) of each series vis-a-vis any other class of capital stock or series of Preferred Stock as to the payment of dividends, the distribution of assets and all other matters; and

(11) any other powers, preferences and relative, participating, optional or other special rights, and any qualifications, limitations or restrictions of such series of Preferred Stock, insofar as they are not inconsistent with the provisions of this Amended and Restated Certificate of Incorporation (this "Certificate of Incorporation"), to the full extent permitted in accordance with the Delaware General Corporation Law.

C. The powers, preferences and relative, participating, optional or other special rights, if any, of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series of Preferred Stock at any time outstanding. All shares of any one series of Preferred Stock shall be identical in all respects with all other shares of such series, except that shares of any one series issued at different times may differ as to the dates from which dividends thereon shall be cumulative.

D. Subject to the other provisions of this Article FOURTH and actions taken by the Board of Directors pursuant to this Article FOURTH:

(1) The holders of shares of Class A Common Stock and Class B Common Stock shall be entitled to receive such dividends or other distributions payable in cash, capital stock or otherwise, when, as and if declared by the Board of Directors at any time or from time to time, out of funds legally available for the payment thereof, and shall share equally on a per share basis in all such dividends or other distributions. No dividend or other distribution may be declared or paid on any share of Class A Common Stock unless at the same time a dividend or other distribution, equal to such dividend or distribution, subject to the following proviso, is simultaneously declared or paid, as the case may be, on each share of Class B Common Stock, nor shall any dividend or other distribution be declared or paid on any share of Class B Common Stock unless at the same time a dividend or other distribution equal to such dividend or distribution, subject to the following proviso, is simultaneously declared or paid, as the case may be, on each share of Class A Common Stock, in each case without preference or priority of any kind; provided, however, that if a dividend or other distribution payable in shares of any class of Common Stock or in rights, options, warrants or other securities convertible into or exchangeable or exercisable for shares of Common Stock shall be declared with respect to the Common Stock, the dividend or other distribution payable to holders of Class A Common Stock shall be payable in shares of Class A Common Stock or in rights, options, warrants or other securities convertible into or exchangeable or exercisable for shares of Class A Common Stock, as the case may be, and the dividend or other distribution payable to holders of Class B Common Stock shall be payable in shares of Class B Common Stock or in rights, options, warrants or other securities convertible into or exchangeable or exercisable for shares of Class B Common Stock, as the case may be.

(2) Except as may be designated by the Board of Directors with respect to any Preferred Stock issued by the Corporation, the voting power of the Corporation shall be exclusively vested in the Common Stock.

(3) Holders of Preferred Stock and holders of Common Stock shall not have any preemptive, preferential or other right to subscribe for or purchase or acquire any shares of any class or series of capital stock or any other securities of the Corporation, whether now or hereafter authorized, and whether or not convertible into, or evidencing or carrying the right to purchase, shares of any class or series of capital stock or any other securities now or hereafter authorized and whether the same shall be issued for cash, services or property, or by way of dividend or otherwise, other than such right, if any, as the Board of Directors in its discretion from time to time may determine. If

the Board of Directors shall offer to the holders of the Preferred Stock or the holders of the Common Stock, or any of them, any such shares or other securities of the Corporation, such offer shall not in any way constitute a waiver or release of the right of the Board of Directors subsequently to dispose of other portions of said shares or securities without so offering the same to said holders.

(4) The shares of Preferred Stock may be issued for such consideration and for such corporate purposes as the Board of Directors may from time to time determine.

(5) The powers, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions with respect to Class A Common Stock and Class B Common Stock shall be in all respects identical, except as otherwise required by law or expressly provided in this Certificate of Incorporation.

(6) With respect to all matters upon which holders of Common Stock are entitled to vote or to which holders of Common Stock are entitled to give consent, except as may be provided in this Certificate of Incorporation or by applicable law, every holder of Class A Common Stock shall be entitled to cast thereon one (1) vote in person or by proxy for each share of Class A Common Stock standing in such holder's name on the transfer books of the Corporation, and every holder of Class B Common Stock shall be entitled to cast thereon ten (10) votes in person or by proxy for each share of Class B Common Stock standing in such holder's name on the transfer books of the Corporation. Except as otherwise required by law or as otherwise provided in this Certificate of Incorporation, the holders of Class A Common Stock and Class B Common Stock shall vote together as a single class, subject to any voting rights that may be granted to holders of any outstanding Preferred Stock, on all matters submitted to a vote of stockholders of the Corporation.

(7) During any period of time that the outstanding shares of Class B Common Stock represent less than a majority of the combined voting power of the outstanding shares of capital stock of the Corporation, no action shall be taken by the stockholders of the Corporation by written consent. During any such period, action shall be taken by the stockholders of the Corporation only at an annual or special meeting of the stockholders of the Corporation called in accordance with the Corporation's Bylaws.

E. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, and subject to the rights of the holders of any series of Preferred Stock, the net assets of the Corporation available for distribution to stockholders of the Corporation shall be distributed pro rata to the holders of Common Stock in accordance with their respective rights and interests and shares of Class B Common Stock shall rank pari passu with shares of Class A Common Stock as to such distribution. For purposes of this paragraph E of Article FOURTH, the voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of capital stock, securities or other consideration) of all or substantially all the assets of the Corporation or a consolidation, merger or other restructuring of the Corporation with or into one or more other corporations or other entities (whether or not the Corporation is the corporation surviving such consolidation, merger or other restructuring) shall not be deemed to be a liquidation, dissolution or winding up of the affairs of the Corporation.

F. Conversion of shares of Class B Common Stock shall occur as follows:

(1) Each outstanding share of Class B Common Stock may, at the option of the holder thereof, at any time, be converted into one fully paid and non-assessable share of Class A Common Stock.

(2) Each share of outstanding Class B Common Stock that is Transferred (as defined below) shall convert automatically into one fully paid and non-assessable share of Class A Common Stock immediately upon such Transfer.

(3) In the event of any conversion of shares of Class B Common Stock pursuant to subparagraph (1) or (2) of paragraph F of Article FOURTH, the holder of such shares of Class B

Common Stock shall promptly surrender the certificate or certificates therefore, duly endorsed in blank or accompanied by proper instruments of transfer, at the office of the Corporation, or of any transfer agent for such shares, and shall give written notice to the Corporation (the "Notice"), at such office: (A) stating that shares of Class B Common Stock have been converted into shares of Class A Common Stock as provided in subparagraph (1) or (2) of paragraph F of Article FOURTH; (B) specifying the subparagraph of paragraph F of Article FOURTH pursuant to which the conversion occurred; (C) identifying the number of shares of Class B Common Stock being converted; and (D) setting out the name or names (with addresses) and denominations in which the certificate or certificates for shares of Class A Common Stock shall be issued, with instructions for delivery thereof. Delivery of such Notice together with the certificates representing the shares of Class B Common Stock shall obligate the Corporation to issue such shares of Class A Common Stock into which such shares of Class B Common Stock are being converted. Thereupon the Corporation or its agent shall promptly issue and deliver to such holder a certificate or certificates representing the shares to which such holder is entitled, registered in the name of such holder or designee as specified in the Notice. The Corporation shall take any and all steps necessary to effect a conversion pursuant to subparagraph (2) of paragraph F of Article FOURTH, notwithstanding any failure by the holder to deliver to the Corporation the Notice or the certificates representing the shares subject to such conversion. The Corporation shall not be obligated to effect a conversion pursuant to subparagraph (1) of paragraph F or Article FOURTH until such time as the holder delivers to the Corporation the Notice and the certificates representing the shares subject to such conversion.

(4) If the Corporation in any manner subdivides (by way of stock split, reclassification, stock dividend, recapitalization or otherwise) or combines the outstanding shares of one class of Common Stock at a time when shares of the other class of Common Stock are outstanding, the outstanding shares of the other class of Common Stock will be likewise subdivided or combined. In connection with any such subdivision or combination, each share of Class B Common Stock shall thereafter be convertible into, in lieu of one share of Class A Common Stock, the same kind and amount of securities or other assets, or both, that were issuable or distributable to the holders of shares of outstanding Class A Common Stock upon such subdivision or combination with respect to that number of shares of Class A Common Stock into which each share of Class B Common Stock would have been converted had such share of Class B Common Stock been converted into Class A Common Stock immediately prior to such subdivision or combination.

(5) To the extent permitted by law, conversion shall be deemed to have been effected as of the date on which conversion was first (A) elected by delivering to the Corporation the Notice and the certificates representing the shares subject to the conversion in the case of subparagraph (1) of paragraph F of Article FOURTH or (B) required under subparagraph (2) of paragraph F of Article FOURTH (such date being the "Conversion Time"). The person entitled to receive shares issuable upon such conversion shall be treated for all purposes as the record holder of such class of shares at and as of the Conversion Time, and the right of such person as a holder of the shares held prior to such conversion shall cease and terminate at and as of the Conversion Time, notwithstanding, (X) in the case of conversion pursuant to subparagraph (2) of paragraph F of Article FOURTH, any failure by the holder to deliver to the Corporation the Notice or the certificates representing the shares subject to conversion, and (Y) in the case of conversion pursuant to either subparagraph (1) or subparagraph (2) of paragraph F of Article FOURTH the Corporation's failure to issue to the holder certificates representing the shares to be held after the conversion has been effected.

(6) If (A) any dividend or other distribution has been declared with respect to shares of Class B Common Stock that will be converted into shares of Class A Common Stock pursuant to the provisions of this paragraph F of Article FOURTH, (B) the record date or payment date therefore will be subsequent to such conversion and (C) such dividend or other distribution was declared prior to such conversion, then such dividend or other distribution shall be deemed to have been declared, and shall be payable, with respect to the shares of Class A Common Stock

into which such shares of Class B Common Stock shall have been converted (without duplication), and any such dividend or other distribution that shall have been declared on such shares payable in shares of Class B Common Stock or rights, options, warrants or other securities convertible into or exchangeable or exercisable for shares of Class B Common Stock, shall be deemed to have been declared, and shall be payable, in corresponding shares of Class A Common Stock or rights, options, warrants or other securities convertible into or exchangeable or exercisable for shares of Class A Common Stock, as the case may be.

(7) The Corporation hereby reserves and shall at all times reserve and keep available, out of its authorized and unissued shares of capital stock, for the purposes of effecting conversions, such number of duly authorized shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of the Class B Common Stock contemplated herein. All such shares so issuable shall, when so issued, be duly and validly issued, fully paid and non-assessable, and free from liens and charges with respect to the issue.

(8) Each certificate for shares of Class B Common Stock shall bear a legend on the reverse side thereof reading as follows:

"The shares of Class B Common Stock represented by this certificate may not be transferred to any person in connection with a transfer that does not meet the qualifications set forth in paragraph F of Article FOURTH of the Certificate of Incorporation, as amended, of this Corporation. Any person who receives such shares in connection with a transfer that does not meet the qualifications prescribed by paragraph F of Article FOURTH is not entitled to own or to be registered as the holder of such shares of Class B Common Stock, and such shares of Class B Common Stock shall automatically convert into an equal number of shares of Class A Common Stock. Each holder of this certificate, by accepting the same, accepts and agrees to all of the foregoing."

(9) Except for the issuance of any shares of Class B Common Stock pursuant to subparagraph (1) of paragraph D of Article FOURTH, the Corporation shall not reissue or resell any shares of Class B Common Stock that shall have been converted into shares of Class A Common Stock pursuant to or as permitted by the provisions of this paragraph F of Article FOURTH, or any shares of Class B Common Stock that shall have been acquired by the Corporation in any other manner. The Corporation shall, from time to time, as determined by the Board of Directors, take such appropriate action as may be necessary to retire such shares and to reduce the authorized amount of Class B Common Stock accordingly.

(10) The Corporation shall pay any and all documentary, stamp or similar issue or transfer taxes payable in respect of the issue or delivery of shares of Class A Common Stock upon any conversion of shares of Class B Common Stock pursuant hereto; provided, however, that the Corporation shall not be required to pay any tax that may be payable in respect of any registration of transfer involved in the issue or delivery of shares of Class A Common Stock in a name other than that of the registered holder of the shares of Class B Common Stock to be converted, and no such issue or delivery shall be made unless and until the person requesting such issue has paid to the Corporation the amount of any such tax or has established, to the satisfaction of the Corporation, that such tax has been paid or is not required.

(11) In connection with any transfer or conversion of any capital stock of the Corporation pursuant to or as permitted by the provisions of this paragraph F of Article FOURTH, or in connection with the making of any determination referred to in this paragraph F of Article FOURTH:

(A) the Corporation shall be under no obligation to make any investigation of facts unless an officer, employee or agent of the Corporation responsible for making such transfer or determination or issuing Class A Common Stock pursuant to such conversion has substantial reason to believe, or unless the Board of Directors (or a committee of the Board of Directors designated for the purpose) determines that there is substantial reason to believe,

that any affidavit or other document is incomplete or incorrect in any material respect or that an investigation would disclose facts indicating that such conversion was in violation of subparagraph (3) of paragraph F of this Article FOURTH, in either of which events the Corporation shall (I) make or cause to be made such investigation as it may deem necessary or desirable in the circumstances and (II) have a reasonable time to complete such investigation; and

(B) neither the Corporation nor any director, officer, employee or agent of the Corporation shall be liable in any manner for any action taken or omitted to be taken in good faith.

(12) For purposes of this paragraph F of this Article FOURTH,

(A) "Affiliate" shall mean, as applied to any person, any other person that, directly or indirectly, controls, is controlled by or is under common control with such person. For purposes of the foregoing, "control," when used with respect to any person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by contract or otherwise, and the terms "controlled" and "controlling" shall have the meanings correlative to the foregoing;

(B) "Eligible Class B Stockholder" shall mean (I) Anschutz Company, a Delaware corporation, The Anschutz Corporation, a Kansas corporation, Anschutz Investment Fund, LP, a Delaware limited partnership, EN Investment Company, a Colorado corporation, and ACE II LLC, a Delaware limited liability company (including any successors of the foregoing), (II) OCM Principal Opportunities Fund II, L.P., a Delaware limited partnership (including any successors thereof) and (III) any Affiliate of those persons provided for in (I) or (II);

(C) "Permitted Transfer" shall mean any sale, gift, mortgage, pledge, exchange, assignment or other disposition (whether with or without consideration and whether voluntary or involuntary or by operation of law), including a disposition under judicial order, legal process, execution, attachment or enforcement of an encumbrance between or among any Eligible Class B Stockholders;

(D) a "person" shall mean a corporation, trust, limited liability company, association, partnership, joint venture, organization, business, individual, government (or subdivision thereof), governmental agency or other legal entity; and

(E) "Transfer" shall mean a sale, gift, mortgage, pledge, exchange, assignment or other disposition (whether with or without consideration and whether voluntary or involuntary or by operation of law), including a disposition under judicial order, legal process, execution, attachment or enforcement of an encumbrance but shall not include a Permitted Transfer or a Transfer pursuant to a merger, consolidation or other restructuring of the Corporation with or into one or more entities (whether or not the Corporation is the surviving entity).

ARTICLE FIFTH
BUSINESS COMBINATIONS WITH INTERESTED STOCKHOLDERS

The Corporation by this provision hereby elects not to be governed by Section 203 of the Delaware General Corporation Law.

ARTICLE SIXTH
BOARD OF DIRECTORS

A. The Board of Directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the Board of Directors. Each class shall consist, as nearly as may be possible, of one-third of the total number of directors constituting the entire Board of Directors. At the first annual

meeting of stockholders following the date on which the Class A Common Stock becomes registered pursuant to Section 12 of the Securities Exchange Act of 1934, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of three years. At the second annual meeting of stockholders following such date, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of three years. At the third annual meeting of stockholders following such date, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose term expire at such annual meeting. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.

B. Subject to any provisions contained in the Corporation's Bylaws regarding the restrictions on and the conditions to the stockholders' ability to call a meeting of the stockholders of the Corporation, and subject to the next sentence, any director may be removed from office at any time with or without cause, by the affirmative vote of a majority of the combined voting power of outstanding shares of capital stock of the Corporation entitled to vote thereon, voting as a single class as contemplated under paragraph A of Article FOURTH. During any period of time that the outstanding shares of Class B Common Stock represent less than a majority of the combined voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, the directors of the Corporation may be removed by the affirmative vote of a majority of the combined voting power of outstanding shares of capital stock of the Corporation entitled to vote thereon, voting as a single class as contemplated under paragraph A of Article FOURTH, only for cause and only at a meeting of stockholders of the Corporation called for the purpose in accordance with the Corporation's Bylaws.

C. The number of directors of the Corporation shall be such number as from time to time shall be fixed by, or in the manner provided in, the Bylaws of the Corporation. Unless and except to the extent that the Bylaws of the Corporation shall otherwise require, the election of directors of the Corporation need not be by written ballot. Except as otherwise provided in this Certificate of Incorporation, each director of the Corporation shall be entitled to one vote per director on all matters voted or acted upon by the Board of Directors. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

ARTICLE SEVENTH
AMENDMENTS

A. The Corporation reserves the right to adopt, repeal, alter or amend any provision of this Certificate of Incorporation, in the manner now or hereafter prescribed by the laws of the State of Delaware and this Certificate of Incorporation, and all rights, preferences and privileges conferred on stockholders, directors, officers, employees, agents and other persons in this Certificate of Incorporation, if any, are granted subject to this reservation.

B. Except where the Board of Directors is permitted by law or by this Certificate of Incorporation to act without any action by the stockholders and except as otherwise provided by law or as otherwise provided in this Certificate of Incorporation, and subject to any voting rights granted to holders of any outstanding shares of Preferred Stock, provisions of this Certificate of Incorporation shall not be adopted, repealed, altered or amended, in whole or in part, without the approval of a majority of the combined voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, voting as a single class; provided, however, that the holders of the outstanding shares of a class shall be entitled to vote as a class upon any proposed amendment of this Certificate of Incorporation (including, without limitation, the provisions of this paragraph B of Article SEVENTH) that would alter or change the relative powers, preferences or participating, optional or other special

rights of the shares of such class so as to affect them adversely vis-a-vis the holders of any other class. Any increase or decrease (but not below the number of shares thereof then outstanding or reserved for issuance upon conversion of the Class B Common Stock or any series of Preferred Stock) in the authorized number of shares of any class or classes of capital stock of the Corporation or creation, authorization or issuance of any rights, options, warrants or other securities convertible into or exchangeable or exercisable for shares of any such class or classes of capital stock shall be deemed not to affect adversely the powers, preferences or special rights of the shares of Class A Common Stock, Class B Common Stock or Preferred Stock.

ARTICLE EIGHTH
LIMITATION ON DIRECTOR LIABILITY; INDEMNIFICATION

A. To the fullest extent permitted by the Delaware General Corporation Law as it now exists and as it may hereafter be amended, no director shall be personally liable to the Corporation or any of its stockholders for monetary damages for breach of any fiduciary or other duty as a director provided that this provision shall not eliminate or limit the liability of a director (1) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (2) for acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, (3) under Section 174 of the Delaware General Corporation Law or (4) for any transaction from which the director derived an improper personal benefit.

B. The rights and authority conferred in this Article EIGHTH shall not be exclusive of any other right that any person may otherwise have or hereafter acquire.

C. Neither the amendment, alteration or repeal of this Article EIGHTH, nor the adoption of any provision inconsistent with this Article EIGHTH, shall adversely affect any right or protection of a director of the Corporation existing at the time of such amendment, alteration or repeal with respect to acts or omissions occurring prior to such amendment, alteration, repeal or adoption.

D. Any person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether by or in the right of the Corporation or otherwise (a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan, shall be (and shall be deemed to have a contractual right to be) indemnified and held harmless by the Corporation (and any successor to the Corporation by merger or otherwise) to the fullest extent authorized by, and subject to the conditions and (except as provided herein) procedures set forth in the Delaware General Corporation Law, as the same exists or may hereafter be amended (but any such amendment shall not be deemed to limit or prohibit the rights of indemnification hereunder for past acts or omissions of any such person insofar as such amendment limits or prohibits the indemnification rights that said law permitted the Corporation to provide prior to such amendment), against all expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person (except for a suit or action pursuant to paragraph E of Article EIGHTH) only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. Persons who are not directors or officers of the Corporation and are not so serving at the request of the Corporation may be similarly indemnified in respect of such service to the extent authorized at any time by the Board of Directors of the Corporation. The indemnification conferred in this paragraph D of Article EIGHTH also shall include the right to be paid by the Corporation (and such successor) the expenses (including attorneys' fees) incurred in the defense of or other involvement in any such proceeding in advance of its final disposition; provided, however, that, if and to the extent the Delaware

General Corporation Law requires, the payment of such expenses (including attorneys' fees) incurred by a director or officer in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer to repay all amounts so paid in advance if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this paragraph D of Article EIGHTH or otherwise; and provided further, that, such expenses incurred by other employees and agents may be so paid in advance upon such terms and conditions, if any, as the Board of Directors deems appropriate.

E. If a claim under paragraph D of Article EIGHTH is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring an action against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such action. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct that make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed or is otherwise not entitled to indemnification under paragraph D of Article EIGHTH, but the burden of proving such defense shall be on the Corporation. The failure of the Corporation (in the manner provided under the Delaware General Corporation Law) to have made a determination prior to or after the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law shall not be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Unless otherwise specified in an agreement with the claimant, an actual determination by the Corporation (in the manner provided under the Delaware General Corporation Law) after the commencement of such action that the claimant has not met such applicable standard of conduct shall not be a defense to the action, but shall create a presumption that the claimant has not met the applicable standard of conduct.

ARTICLE NINTH
AMENDMENTS TO BYLAWS BY THE BOARD OF DIRECTORS

In furtherance and not in limitation of the powers conferred by the Delaware General Corporation Law, the Board of Directors of the Corporation is expressly authorized and empowered to adopt, amend and repeal the Bylaws of the Corporation.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, Regal Entertainment Group has caused this Amended and Restated Certificate of Incorporation to be signed by Peter B. Brandow, its Executive Vice President, General Counsel and Secretary, thereunto duly authorized, on this day of May, 2002.

		REGAL ENTERTAINMENT GROUP
		By:

		Name:		Peter B. Brandow
		Title:		Executive Vice President, General Counsel and Secretary

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EXHIBIT 3.2

EX-3.4 5 a2078602zex-3_4.htm EXHIBIT 3.4
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EXHIBIT 3.4

AMENDED AND RESTATED

BYLAWS

REGAL ENTERTAINMENT GROUP

Adopted
as of

May , 2002

TABLE OF CONTENTS

1.	OFFICES
	1.1.	Registered Office
	1.2.	Other Offices
	1.3.	Books and Records
2.	MEETINGS OF STOCKHOLDERS
	2.1.	Place of Meetings
	2.2.	Annual Meetings
	2.3.	Special Meetings
	2.4.	Notice of Meetings
	2.5.	Waivers of Notice
	2.6.	Business at Special Meetings
	2.7.	List of Stockholders
	2.8.	Quorum at Meetings
	2.9.	Voting and Proxies
	2.10.	Required Vote
	2.11.	Action Without a Meeting
	2.12.	Advance Notice of Stockholder Business
	2.13.	Advance Notice of Director Nomination
3.	DIRECTORS
	3.1.	Powers
	3.2.	Number and Election
	3.3.	Nomination of Directors
	3.4.	Vacancies
	3.5.	Meetings
		3.5.1. Regular Meetings
		3.5.2. Special Meetings
		3.5.3. Telephone Meetings
		3.5.4. Action Without Meeting
		3.5.5. Waiver of Notice of Meeting
	3.6.	Quorum and Vote at Meetings
	3.7.	Committees of Directors
	3.8.	Compensation of Directors
4.	OFFICERS
	4.1.	Positions
	4.2.	Chairperson and Vice Chairmen of the Board of Directors
	4.3.	Chief Executive Officer
	4.4.	Vice President
	4.5.	Secretary
	4.6.	Assistant Secretary
	4.7.	Treasurer
	4.8.	Assistant Treasurer
	4.9.	Term of Office
	4.10.	Compensation
	4.11.	Fidelity Bonds
5.	CAPITAL STOCK
	5.1.	Certificates of Stock; Uncertificated Shares
	5.2.	Lost Certificates
	5.3.	Record Date
		5.3.1. Actions by Stockholders
		5.3.2. Payments

	5.4.	Stockholders of Record
	5.5.	Transfers of Stock
6.	INDEMNIFICATION; INSURANCE
	6.1.	Authorization of Indemnification
	6.2.	Right of Claimant to Bring Action Against the Corporation
	6.3.	Non-exclusivity
	6.4.	Survival of Indemnification
	6.5.	Insurance
7.	GENERAL PROVISIONS
	7.1.	Inspection of Books and Records
	7.2.	Dividends
	7.3.	Reserves
	7.4.	Execution of Instruments
	7.5.	Fiscal Year
	7.6.	Seal

AMENDED AND RESTATED

BYLAWS

REGAL ENTERTAINMENT GROUP

1. OFFICES

1.1. Registered Office

The initial registered office of Regal Entertainment Group (the "Corporation") shall be located at 1209 Orange Street, Wilmington, County of New Castle, Delaware 19801, and the initial registered agent in charge thereof shall be The Corporation Trust Company.

1.2. Other Offices

The Corporation may also have offices at such other places, both within and without the State of Delaware, as the Board of Directors may from time to time determine or as may be necessary or useful in connection with the business of the Corporation.

1.3. Books and Records

The books and records of the Corporation may be kept at such place or places within or outside of the State of Delaware as the Board of Directors or the respective officers in charge thereof may from time to time determine.

2. MEETINGS OF STOCKHOLDERS

2.1. Place of Meetings

All meetings of the stockholders shall be held at such place as may be fixed from time to time by the Board of Directors, the Chairperson or any Chief Executive Officer, or if not so fixed, at the principal executive offices of the Corporation. Notwithstanding the foregoing, the Board of Directors may determine that the meeting shall not be held at any place, but may instead be held by means of remote communication.

2.2. Annual Meetings

The Corporation shall hold annual meetings of stockholders, commencing with the year 2003, on such date and at such time as shall be designated from time to time by the Board of Directors, the Chairperson or any Chief Executive Officer, at which stockholders shall elect the class of the Board of Directors whose terms expire in accordance with the Certificate of Incorporation of the Corporation, as amended, modified and/or restated from time to time (the "Certificate of Incorporation"), and transact such other business as may properly be brought before the meeting.

2.3. Special Meetings

Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called only by the Board of Directors, the Chairperson or any Chief Executive Officer.

If a special meeting is called by any person or persons other than the Board of Directors, the request for such special meeting shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, shall be delivered personally or sent by registered mail or by telegraphic or other facsimile transmission to the Chairperson, any Chief Executive Officer or the Secretary of the Corporation. No business may be transacted at such special meeting other than as specified in the notice of such special meeting (or any supplement

thereto) delivered to the Chairperson, any Chief Executive Officer or the Secretary of the Corporation and to the stockholders.

2.4. Notice of Meetings

Notice of any meeting of stockholders, stating the place, if any, date and hour of the meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, and (if it is a special meeting) the purpose or purposes for which the meeting is called, shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting (except to the extent that such notice is waived or is not required as provided in the General Corporation Law of the State of Delaware (the "Delaware General Corporation Law") or these Bylaws). Such notice shall be given in accordance with, and shall be deemed effective as set forth in, Sections 222 and 232 (or any successor section or sections) of the Delaware General Corporation Law.

2.5. Waivers of Notice

Whenever the giving of any notice is required by statute, the Certificate of Incorporation or these Bylaws, a written waiver thereof signed by the person or persons entitled to said notice, or a waiver thereof by electronic transmission by the person entitled to said notice, delivered to the Corporation, whether before or after the event as to which such notice is required, shall be deemed equivalent to notice. Attendance of a stockholder at a meeting shall constitute a waiver of notice (1) of such meeting, except when the stockholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting, and (2) (if it is a special meeting) of consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, unless the stockholder objects to considering the matter at the beginning of the meeting.

2.6. Business at Special Meetings

Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice (except to the extent that such notice is waived or is not required as provided in the Delaware General Corporation Law or these Bylaws).

2.7. List of Stockholders

After the record date for a meeting of stockholders has been fixed, at least ten (10) days before such meeting, the officer who has charge of the stock ledger of the Corporation shall make a list of all stockholders entitled to vote at the meeting, arranged in alphabetical order and showing the address of each stockholder (but not the electronic mail address or other electronic contact information, unless the Board of Directors so directs) and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (1) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (2) during ordinary business hours, at the principal place of business of the Corporation. If the meeting is to be held at a place, then such list shall also, for the duration of the meeting, be produced and kept open to the examination of any stockholder who is present at the time and place of the meeting. If the meeting is to be held solely by means of remote communication, then such list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

2.8. Quorum at Meetings

Stockholders may take action on a matter at a meeting only if a quorum exists with respect to that matter. Except as otherwise provided by statute or by the Certificate of Incorporation, the holders of a majority of the voting power of the shares entitled to vote at the meeting, and who are present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business. Except as otherwise provided by statute or by the Certificate of Incorporation, where a separate vote by a class or series or classes or series is required, the holders of a majority of the voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter. Once a share is represented for any purpose at a meeting (other than solely to object (1) to holding the meeting or transacting business at the meeting, or (2) (if it is a special meeting) to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice), it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting unless a new record date is or must be set for the adjourned meeting. The holders of a majority of the voting power of the shares represented at a meeting, whether or not a quorum is present, may adjourn such meeting from time to time.

2.9. Voting and Proxies

Unless otherwise provided in the Delaware General Corporation Law, the Corporation's Certificate of Incorporation or any resolution or resolutions of the Board of Directors providing for the issuance of preferred stock with greater or lesser voting rights pursuant to the authority expressly vested in the Board of Directors with regard thereto in the Certificate of Incorporation, and subject to the other provisions of these Bylaws, each stockholder shall be entitled to one (1) vote on each matter, in person or by proxy, for each share of the Corporation's capital stock that has voting power and that is held by such stockholder. No proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A duly executed appointment of proxy shall be irrevocable if the appointment form states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. If authorized by the Board of Directors, and subject to such guidelines as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders may, by means of remote communication, participate in a meeting of stockholders and be deemed present in person and vote at such meeting whether such meeting is held at a designated place or solely by means of remote communication, provided that (1) the Corporation implements reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder or proxyholder, (2) the Corporation implements reasonable measures to provide such stockholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings and (3) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action is maintained by the Corporation.

2.10. Required Vote

When a quorum is present at any meeting of stockholders, all matters shall be determined, adopted and approved by the affirmative vote (which need not be by ballot) of the holders of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote with respect to the matter, unless the proposed action is one upon which, by express provision of statutes or of the Certificate of Incorporation, a different vote is specified and required, in which case such express provision shall govern and control with respect to that vote on that matter. Where a separate vote by a class or series or classes or series is required, the affirmative vote of the holders of a majority of the voting power of the shares of

such class or series or classes or series present in person or represented by proxy at the meeting shall be the act of such class or series or classes or series, unless the proposed action is one upon which, by express provision of statutes or of the Certificate of Incorporation, a different vote is specified and required, in which case such express provision shall govern and control with respect to that vote on that matter. Notwithstanding the foregoing, directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.

2.11. Action Without a Meeting

Except as provided below in this Section 2.11 with regard to written consents in lieu of special meetings, no action shall be taken by the stockholders except at an annual or special meeting of stockholders called in accordance with these Bylaws, and no action shall be taken by the stockholders by written consent in lieu of an annual meeting of stockholders. Any action required or permitted to be taken at a special stockholders' meeting may be taken without a meeting, without prior notice and without a vote, if (i) the outstanding shares of the Corporation's Class B Common Stock represents greater than 50% of the combined voting power of the outstanding shares of capital stock of the Corporation, and (ii) the action is taken by persons who would be entitled to vote at a meeting and who hold shares having voting power equal to not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and voted. The action must be evidenced by one or more written consents describing the action taken, signed by the stockholders entitled to take action without a meeting, and delivered to the Corporation in the manner prescribed by the Delaware General Corporation Law for inclusion in the minute book. No consent shall be effective to take the corporate action specified unless the number of consents required to take such action are delivered to the Corporation within sixty (60) days of the delivery of the earliest-dated consent. A telegram, cablegram or other electronic transmission consenting to such action and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for the purposes of this Section 2.11, provided that any such telegram, cablegram or other electronic transmission sets forth or is delivered with information from which the Corporation can determine (1) that the telegram, cablegram or other electronic transmission was transmitted by the stockholder or proxyholder or by a person or persons authorized to act for the stockholder or proxyholder and (2) the date on which such stockholder or proxyholder or authorized person or persons transmitted such telegram, cablegram or electronic transmission. The date on which such telegram, cablegram or electronic transmission is transmitted shall be deemed to be the date on which such consent was signed. No consent given by telegram, cablegram or other electronic transmission shall be deemed to have been delivered until such consent is delivered to the Corporation in accordance with Section 228(d)(1) of the Delaware General Corporation Law. Written notice of the action taken shall be given in accordance with the Delaware General Corporation Law to all stockholders who do not participate in taking the action who would have been entitled to notice if such action had been taken at a meeting having a record date on the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation.

2.12. Advance Notice of Stockholder Business

To be properly brought before an annual meeting, any business (other than director nominations) must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (c) otherwise properly brought before the meeting by a stockholder (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.12 and on the record date for the determination of stockholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 2.12. For such business to be considered properly brought before the meeting by a stockholder such stockholder must, in addition to any other applicable requirements, have given

timely notice and in proper form of such stockholder's intent to bring such business before such meeting.

To be timely, such stockholder's notice must be in proper written form and must be delivered to or mailed and received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 120^th day nor earlier than the close of business on the 150^th day prior to the first anniversary of the commencement of the preceding year's annual meeting.

To be in proper form, a stockholder's notice to the Secretary shall set forth:

(a) the name and record address of the stockholder who intends to propose the business and the class or series and number of shares of capital stock of the Corporation which are owned beneficially and of record by such stockholder;

(b) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to introduce the business specified in the notice;

(c) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; and

(d) any material interest of the stockholder in such business.

No business shall be conducted at the annual meeting of stockholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 2.12; provided, however, that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 2.12 shall be deemed to preclude discussion by any stockholder of any such business. The Chairperson of the meeting may refuse to acknowledge the proposal of any business not made in compliance with the foregoing procedure.

2.13. Advance Notice of Director Nomination

Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation, except as may otherwise provided in the Certificate of Incorporation. To be properly brought before an annual meeting of stockholders, or any special meeting of stockholders called for the purpose of electing directors, nominations for the election of director must be specified in the notice of meeting (or any supplement thereto), (a) made by or at the direction of the Board of Directors (or any duly authorized committee thereof) or (b) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation (i) who is a stockholder of record on the date of the giving of the notice provided for in this Section 2.13 and on the record date for the determination of stockholders entitled to vote at such meeting and (ii) who complies with the notice procedures set forth in this Section 2.13.

To be timely, a stockholder's notice must be in proper written form and must be delivered or mailed and received by the Secretary of the Corporation at the principal executive offices of the Corporation not later than the close of business on the 120^th day nor earlier than the close of business on the 150^th day prior to the first anniversary of the commencement of the preceding year's annual meeting.

To be in proper form, a stockholder's notice to the Secretary shall set forth:

(a) as to each person whom the stockholder proposes to nominate for election as a director (i) the name, age business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the person and (iv) any other information relating to the person that would be required to be disclosed in a solicitation of proxies for election of directors pursuant to Section 14 of the

Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations promulgated thereunder; and

(b) as to the stockholder giving the notice (i) the name and record address of such stockholder, (ii) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder, (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (iv) a representation that such stockholder is a holder of record of capital stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at such meeting and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder. Such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a director if elected.

No person shall be eligible for election as director of the Corporation unless nominated in accordance with the procedures set forth in this Section 2.13. If the Chairperson of the meeting determines that a nomination was not made in accordance with the foregoing procedures, the Chairperson shall declare to the meeting that the nomination was defective and such defective nomination shall be disregarded.

3. Directors

3.1. Powers

The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which may exercise all such powers of the Corporation and do all such lawful acts and things, subject to any limitation set forth in the Certificate of Incorporation or as otherwise may be provided in the Delaware General Corporation Law.

3.2. Number and Election

The number of directors that shall constitute the whole Board of Directors shall not be fewer than three (3) or more than nine (9). The first Board of Directors shall consist of nine (9) directors. Thereafter, within the limits above specified, the number of directors shall be determined by resolution of the Board of Directors.

3.3. Nomination of Directors

The Board of Directors shall nominate candidates to stand for election as directors; and other candidates also may be nominated by any Corporation stockholder, provided such nomination(s) for such other candidates are submitted in writing to the Secretary of the Corporation in accordance with the requirements of and within the time period prescribed in Section 2.13 hereof, together with the identity of the nominator and the number of shares of the Corporation's stock owned, directly or indirectly, by the nominator. The directors whose terms expire in accordance with the Certificate of Incorporation of the Corporation shall be elected at the annual meeting of the stockholders, except as provided in Section 3.4 hereof, and each director so elected shall hold office until such director's successor is elected and qualified or until the director's earlier death, resignation or removal. Directors need not be stockholders.

3.4. Vacancies

Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by the affirmative vote of a majority of the directors then in office, although fewer than a

quorum, or by a sole remaining director. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by the affirmative vote of a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. Each director so chosen shall hold office until the next election of directors of the class to which such director was appointed, and until such director's successor is elected and qualified, or until the director's earlier death, resignation or removal. In the event that one or more directors resign from the Board of Directors, effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office until the next election of directors of the class to which each such director was appointed, and until such director's successor is elected and qualified, or until the director's earlier death, resignation or removal.

3.5. Meetings

3.5.1. Regular Meetings

Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors.

3.5.2. Special Meetings

Special meetings of the Board of Directors may be called by the Chairperson or any Chief Executive Officer on one (1) day's notice to each director, either personally or by telephone, express delivery service (so that the scheduled delivery date of the notice is at least one (1) day in advance of the meeting), telegram, facsimile transmission, electronic mail (effective when directed to an electronic mail address of the director), or other electronic transmission, as defined in Section 232(c) (or any successor to such Section) of the Delaware General Corporation Law (effective when directed to the director), and on five (5) days' notice by mail (effective upon deposit of such notice in the mail). The notice need not describe the purpose of a special meeting.

3.5.3. Telephone Meetings

Members of the Board of Directors may participate in a meeting of the Board of Directors by any communication by means of which all participating directors can simultaneously hear each other during the meeting. A director participating in a meeting by this means is deemed to be present in person at the meeting.

3.5.4. Action Without Meeting

Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting if the action is taken by all members of the Board of Directors. The action must be evidenced by one or more consents in writing or by electronic transmission describing the action taken, signed by each director, and delivered to the Corporation for inclusion in the minute book.

3.5.5. Waiver of Notice of Meeting

A director may waive any notice required by statute, the Certificate of Incorporation or these Bylaws before, at or after the date and time stated in the notice. Except as set forth below, the waiver must be in writing, signed by the director entitled to the notice, or made by electronic transmission by the director entitled to the notice, and delivered to the Corporation for inclusion in the minute book. Notwithstanding the foregoing, a director's attendance at or participation in a meeting waives any required notice to the director of the meeting unless the

director at the beginning of the meeting objects to holding the meeting or transacting business at the meeting and does not thereafter vote for or assent to action taken at the meeting.

3.6. Quorum and Vote at Meetings

At all meetings of the Board of Directors, a quorum of the Board of Directors consists of a majority of the total number of directors prescribed from time to time pursuant to Section 3.2 hereof. The vote of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the Certificate of Incorporation or by these Bylaws.

3.7. Committees of Directors

The Board of Directors may designate one or more committees, each committee to consist of one or more directors. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. If a member of a committee shall be absent from any meeting, or disqualified from voting thereat, the remaining member or members present and not disqualified from voting, whether or not such member or members constitute a quorum, may, by unanimous vote, appoint another member of the Board of Directors to act at the meeting in the place of such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, except as limited by applicable law, by the Certificate of Incorporation or by these Bylaws. Unless otherwise specified in the Board of Directors resolution appointing the Committee, all provisions of the Delaware General Corporation Law and these Bylaws relating to meetings, action without meetings, notice (and waiver thereof), and quorum and voting requirements of the Board of Directors apply, as well, to such committees and their members.

3.8. Compensation of Directors

The Board of Directors shall have the authority to fix the compensation of directors. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.

4. OFFICERS

4.1. Positions

The officers of the Corporation shall be a Chairperson (unless otherwise specifically determined by resolution of the Board of Directors as provided below), one or more Chief Executive Officers (or Co-Chief Executive Officers, if applicable), a Secretary and a Treasurer, and such other officers as the Board of Directors (or an officer authorized by the Board of Directors) from time to time may appoint, including one or more Vice Chairmen, Executive Vice Presidents, Vice Presidents, Assistant Secretaries and Assistant Treasurers. Each such officer shall exercise such powers and perform such duties as shall be set forth below and such other powers and duties as from time to time may be specified by the Board of Directors or by any officer(s) authorized by the Board of Directors to prescribe the duties of such other officers. Any number of offices may be held by the same person, except that in no event shall any Chief Executive Officer and the Secretary be the same person. As set forth below, each of the Chairperson, any Chief Executive Officer, any Executive Vice President and/or any Vice President may execute bonds, mortgages, deeds and other contracts under the seal of the Corporation, if required, except where required or permitted by law to be otherwise executed and except where the execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation.

4.2. Chairperson and Vice Chairmen of the Board of Directors

Unless otherwise specifically determined by resolution of the Board of Directors, the Chairperson and the Vice Chairmen of the Board of Directors shall be officers of the Corporation. The Chairperson (whether or not designated as an officer of the Corporation) shall (when present) preside at all meetings of the Board of Directors and stockholders, and shall ensure that all orders and resolutions of the Board of Directors and stockholders are carried into effect. The Chairperson may execute bonds, mortgages, deeds and other contracts, under the seal of the Corporation, if required, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or other agent of the Corporation. In the absence or disability of the Chairperson, the Vice Chairman (in the event there be more than one Vice Chairman, the Vice Chairman in the order of election) shall be vested with and shall perform all powers and duties of the Chairperson.

4.3. Chief Executive Officer

The Chief Executive Officer (which title shall be deemed to include Co-Chief Executive Officers, if applicable, wherever reference is made to Chief Executive Officer herein and the context does not otherwise require) shall be the principal executive officer(s) of the Corporation and shall have full responsibility and authority for management of the day-to-day operations of the Corporation (subject to the authority of the Board of Directors). The Chief Executive Officer may (or Co-Chief Executive Officers, if applicable, may, either individually or jointly) execute bonds, mortgages, deeds and other contracts, under the seal of the Corporation, if required, except where required or permitted by law to be otherwise signed and executed and except where the signing and execution thereof shall be expressly delegated by the Board of Directors to some other officer or agent of the Corporation. The Chief Executive Officer(s) shall have the express authority to sign certificates representing shares of the Corporation's capital stock as "President".

4.4. Vice President

Each Vice President shall have such powers and perform such duties as the Board of Directors or any Chief Executive Officer may from time to time prescribe. In the absence of the Chief Executive Officer or in the event of the Chief Executive Officer's inability or refusal to act, the Vice President (or in the event there be more than one Vice President, the Vice Presidents in the order designated, or in the absence of any designation, then in the order of their appointment) shall perform the duties of the Chief Executive Officer, and when so acting shall have all the powers of, and be subject to all the restrictions upon, the Chief Executive Officer.

4.5. Secretary

The Secretary shall have responsibility for preparation of minutes of meetings of the Board of Directors and of the stockholders and for authenticating records of the Corporation. The Secretary shall give, or cause to be given, notice of all meetings of the stockholders and special meetings of the Board of Directors. The Secretary or an Assistant Secretary may also attest all instruments signed by any other officer of the Corporation.

4.6. Assistant Secretary

The Assistant Secretary, or if there be more than one, the Assistant Secretaries, shall, in the absence of the Secretary or in the event of the Secretary's inability or refusal to act, perform the duties and exercise the powers of the Secretary.

4.7. Treasurer

The Treasurer shall be the chief financial officer of the Corporation and shall have responsibility for the custody of the corporate funds and securities and shall see to it that full and

accurate accounts of receipts and disbursements are kept in books belonging to the Corporation. The Treasurer shall render to the Chief Executive Officer(s) and the Board of Directors, upon request, an account of all financial transactions and of the financial condition of the Corporation.

4.8. Assistant Treasurer

The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers, shall, in the absence of the Treasurer or in the event of the Treasurer's inability or refusal to act, perform the duties and exercise the powers of the Treasurer.

4.9. Term of Office

The officers of the Corporation shall hold office until their successors are chosen and qualify or until their earlier resignation or removal. Any officer may resign at any time upon written notice to the Corporation. Any officer elected or appointed by the Board of Directors may be removed at any time, with or without cause, by the affirmative vote of a majority of the Board of Directors.

4.10. Compensation

The compensation of officers of the Corporation shall be fixed by the Board of Directors, a committee of the Board of Directors designated for the purpose or by any officer(s) authorized by the Board of Directors to prescribe the compensation of such other officers.

4.11. Fidelity Bonds

The Corporation may secure the fidelity of any or all of its officers or agents by bond or otherwise.

5. CAPITAL STOCK

5.1. Certificates of Stock; Uncertificated Shares

The shares of the Corporation may be certificated or uncertificated, as provided under the Delaware General Corporation Law. Notwithstanding the preceding sentence, every holder of stock represented by certificates, and upon request every holder of uncertificated shares, shall be entitled to have a certificate (representing the number of shares registered in certificate form) signed in the name of the Corporation by the Chairperson, Chief Executive Officer (as President) or any Vice President, and by the Treasurer, Secretary or any Assistant Treasurer or Assistant Secretary of the Corporation. All certificates representing capital stock of the Corporation shall be numbered and entered into the books of the Corporation as they are issued, and shall bear the holders' name and number of shares of capital stock represented by the certificate. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar whose signature or facsimile signature appears on a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue.

5.2. Lost Certificates

The Board of Directors, Chairperson, Chief Executive Officer or Secretary may direct a new certificate of stock to be issued in place of any certificate theretofore issued by the Corporation and alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming that the certificate of stock has been lost, stolen or destroyed. When authorizing such issuance of a new certificate, the Board of Directors or any such officer may, as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or such owner's legal representative, to advertise the same in such

manner as the Board of Directors or such officer shall require and/or to give the Corporation a bond or indemnity, in such sum or on such terms and conditions as the Board of Directors or such officer may direct, as indemnity against any claim that may be made against the Corporation on account of the certificate alleged to have been lost, stolen or destroyed or on account of the issuance of such new certificate or uncertificated shares.

5.3. Record Date

5.3.1. Actions by Stockholders

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) days nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, unless the Board of Directors fixes a new record date for the adjourned meeting. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing (if permitted under Section 2.11) without a special meeting (action by written consent in lieu of annual meetings of stockholders being prohibited under all circumstances), the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a special meeting (if permitted under Section 2.11), when no prior action by the Board of Directors is required by the Delaware General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in the manner prescribed by Section 213(b) of the Delaware General Corporation Law. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the Delaware General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a special meeting (if permitted under Section 2.11) shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action.

5.3.2. Payments

In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

5.4. Stockholders of Record

The Corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends, to receive notifications, to vote as such owner,

and to exercise all the rights and powers of an owner. The Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise may be provided by the Delaware General Corporation Law.

5.5. Transfers of Stock

Transfers of stock shall be made upon the books of the Corporation only by the record holder of such stock, in person or by duly authorized attorney, and, in the case of stock represented by a certificate, upon the surrender of the certificate or certificates for the same number of shares, properly endorsed. The Board of Directors shall have the power to make all such rules and regulations, not inconsistent with the Certificate of Incorporation, these Bylaws and the Delaware General Corporation Law, as the Board of Directors may deem appropriate concerning the issue, transfer and registration of certificates for stock of the Corporation. The Board of Directors may appoint one or more transfer agents or registrars of transfers or both, and may require all stock certificates to bear the signature of either or both.

6. INDEMNIFICATION; INSURANCE

6.1. Authorization of Indemnification

Each person who was or is a party or is threatened to be made a party to or is involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether by or in the right of the Corporation or otherwise (a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan, shall be (and shall be deemed to have a contractual right to be) indemnified and held harmless by the Corporation (and any successor to the Corporation by merger or otherwise) to the fullest extent authorized by, and subject to the conditions and (except as provided herein) procedures set forth in the Delaware General Corporation Law, as the same exists or may hereafter be amended (but any such amendment shall not be deemed to limit or prohibit the rights of indemnification hereunder for past acts or omissions of any such person insofar as such amendment limits or prohibits the indemnification rights that said law permitted the Corporation to provide prior to such amendment), against all expenses, liabilities and losses (including attorneys' fees, judgments, fines, ERISA taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such person in connection therewith; provided, however, that the Corporation shall indemnify any such person seeking indemnification in connection with a proceeding (or part thereof) initiated by such person (except for a suit or action pursuant to Section 6.2 hereof) only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. Persons who are not directors or officers of the Corporation and are not so serving at the request of the Corporation may be similarly indemnified in respect of such service to the extent authorized at any time by the Board of Directors of the Corporation. The indemnification conferred in this Section 6.1 also shall include the right to be paid by the Corporation (and such successor) the expenses (including attorneys' fees) incurred in the defense of or other involvement in any such proceeding in advance of its final disposition; provided, however, that, if and to the extent the Delaware General Corporation Law requires, the payment of such expenses (including attorneys' fees) incurred by a director or officer in advance of the final disposition of a proceeding shall be made only upon delivery to the Corporation of an undertaking by or on behalf of such director or officer to repay all amounts so paid in advance if it shall ultimately be determined that such director or officer is not entitled to be indemnified under this Section 6.1 or otherwise; and provided further, that, such expenses incurred by other employees and agents may be so paid in advance upon such terms and conditions, if any, as the Board of Directors deems appropriate.

6.2. Right of Claimant to Bring Action Against the Corporation

If a claim under Section 6.1 hereof is not paid in full by the Corporation within sixty (60) days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring an action against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such action. It shall be a defense to any such action (other than an action brought to enforce a claim for expenses incurred in connection with any proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant has not met the standards of conduct that make it permissible under the Delaware General Corporation Law for the Corporation to indemnify the claimant for the amount claimed or is otherwise not entitled to indemnification under Section 6.1 hereof, but the burden of proving such defense shall be on the Corporation. The failure of the Corporation (in the manner provided under the Delaware General Corporation Law) to have made a determination prior to or after the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the Delaware General Corporation Law shall not be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. Unless otherwise specified in an agreement with the claimant, an actual determination by the Corporation (in the manner provided under the Delaware General Corporation Law) after the commencement of such action that the claimant has not met such applicable standard of conduct shall not be a defense to the action, but shall create a presumption that the claimant has not met the applicable standard of conduct.

6.3. Non-exclusivity

The rights to indemnification and advance payment of expenses provided by Section 6.1 hereof shall not be deemed exclusive of any other rights to which those seeking indemnification and advance payment of expenses may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office.

6.4. Survival of Indemnification

The indemnification and advance payment of expenses and rights thereto provided by, or granted pursuant to, Section 6.1 hereof shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, employee, partner or agent and shall inure to the benefit of the personal representatives, heirs, executors and administrators of such person.

6.5. Insurance

The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee, partner (limited or general) or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, against any liability asserted against such person or incurred by such person in any such capacity, or arising out of such person's status as such, and related expenses, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of the Delaware General Corporation Law.

7. GENERAL PROVISIONS

7.1. Inspection of Books and Records

Any stockholder of record of the Corporation, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours

for business to inspect for any proper purpose the Corporation's stock ledger, a list of its stockholders, and its other books and records, and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person's interest as a stockholder. In every instance where an attorney or other agent shall be the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the Corporation at its registered office or at its principal place of business.

7.2. Dividends

The Board of Directors may declare dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation and the laws of the State of Delaware.

7.3. Reserves

The directors of the Corporation may set apart, out of the funds of the Corporation available for dividends, a reserve or reserves for any proper purpose and may abolish any such reserve.

7.4. Execution of Instruments

All checks, drafts or other orders for the payment of money, and promissory notes of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate.

7.5. Fiscal Year

The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

7.6. Seal

The corporate seal shall be in such form as the Board of Directors shall approve. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or otherwise reproduced.

* * * * *

The foregoing Amended and Restated Bylaws were adopted by the Board of Directors on May , 2002

Secretary

QuickLinks

EXHIBIT 3.4

EX-4.1 6 a2078602zex-4_1.htm EXHIBIT 4.1

THIS CERTIFIES THAT

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS A COMMON STOCK, $0.001 PAR VALUE, OF

REGAL ENTERTAINMENT GROUP

transferable on the books of the Corporation by the holder hereof in person or by Attorney upon surrender of this certificate properly endorsed. This certificate is not valid unless countersigned by the Transfer Agent and Registrar.

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by the facsimile signatures of its duly authorized officers and sealed with the facsimile seal of the Corporation.

Dated:

/s/ MICHAEL L. CAMPBELL

VICE CHAIRMAN

/s/ KURT C. HALL

VICE CHAIRMAN

[SEAL]

/s/ PETER B. BRANDOW

SECRETARY

COUNTERSIGNED AND REGISTERED:
WELLS FARGO BANK MINNESOTA, N.A.

TRANSFER AGENT
AND REGISTRAR

AUTHORIZED SIGNATURE

REGAL ENTERTAINMENT GROUP

The corporation will furnish without charge to each stockholder who so requests the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof, so far as the same have been fixed, and the qualifications, limitations or restrictions of such preferences and/or rights, and the number of shares constituting each such class and series.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM

—

as tenants in common

UTMA

—

(Cust)

Custodian

(Minor)

TEN ENT

—

as tenants by entireties

under Uniform Transfer to Minors

JT TEN

—

as joint tenants with right of survivorship
and not as tenants in common

Act

(State)

Additional abbreviations may also be used though not in the above list.

For value received hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE


Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.
Dated		NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE GUARANTEED ALL GUARANTEES MUST BE MADE BY A FINANCIAL INSTITUTION (SUCH AS A BANK OR BROKER) WHICH IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM ("STAMP"), THE NEW YORK STOCK EXCHANGE, INC. MEDALLION SIGNATURE PROGRAM ("MSP"), OR THE STOCK EXCHANGES MEDALLION PROGRAM ("SEMP") AND MUST NOT BE DATED. GUARANTEES BY A NOTARY PUBLIC ARE NOT ACCEPTABLE.

EX-4.2 7 a2078602zex-4_2.htm EXHIBIT 4.2

THIS CERTIFIES THAT

is the owner of

FULLY PAID AND NON-ASSESSABLE SHARES OF CLASS B COMMON STOCK, $0.001 PAR VALUE, OF

REGAL ENTERTAINMENT GROUP

IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by the facsimile signatures of its duly authorized officers and sealed with the facsimile seal of the Corporation.

Dated:

/s/ MICHAEL L. CAMPBELL

VICE CHAIRMAN

/s/ KURT C. HALL

VICE CHAIRMAN

[SEAL]

/s/ PETER B. BRANDOW

SECRETARY

COUNTERSIGNED AND REGISTERED:
WELLS FARGO BANK MINNESOTA, N.A.

TRANSFER AGENT
AND REGISTRAR

AUTHORIZED SIGNATURE

REGAL ENTERTAINMENT GROUP

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM

—

as tenants in common

UTMA

—

(Cust)

Custodian

(Minor)

TEN ENT

—

as tenants by entireties

under Uniform Transfer to Minors

JT TEN

—

as joint tenants with right of survivorship
and not as tenants in common

Act

(State)

Additional abbreviations may also be used though not in the above list.

For value received hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE


Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

Attorney to transfer the said stock on the books of the within-named Corporation with full power of substitution in the premises.
Dated		NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE GUARANTEED ALL GUARANTEES MUST BE MADE BY A FINANCIAL INSTITUTION (SUCH AS A BANK OR BROKER) WHICH IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM ("STAMP"), THE NEW YORK STOCK EXCHANGE, INC. MEDALLION SIGNATURE PROGRAM ("MSP"), OR THE STOCK EXCHANGES MEDALLION PROGRAM ("SEMP") AND MUST NOT BE DATED. GUARANTEES BY A NOTARY PUBLIC ARE NOT ACCEPTABLE.

The shares of Class B Common Stock represented by this certificate may not be transferred to any person in connection with a transfer that does not meet the qualifications set forth in paragraph F of Article FOURTH of the Certificate of Incorporation, as amended, of this Corporation. Any person who receives such shares in connection with a transfer that does not meet the qualifications prescribed by paragraph F of Article FOURTH is not entitled to own or to be registered as the holder of such shares of Class B Common Stock, and such shares of Class B Common Stock shall automatically convert into an equal number of shares of Class A Common Stock. Each holder of this certificate, by accepting the same, accepts and agrees to all of the foregoing.

The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities laws. The securities have been acquired for investment and may not be sold, transferred, pledged or hypothecated in the absence of an effective registration statement for the securities under the Securities Act and applicable state securities laws, or an opinion of counsel satisfactory to the Company and its counsel that registration is not required and that an applicable exemption is available.

EX-5 8 a2078602zex-5.htm EXHIBIT 5

[Hogan & Hartson L.L.P. Letterhead]

May 6, 2002

Board of Directors
Regal Entertainment Group
9110 East Nichols Avenue, Suite 200
Englewood, CO 80112

Gentlemen:

We are acting as counsel to Regal Entertainment Group, a Delaware corporation (the "Company"), in connection with its registration statement on Form S-1, as amended (the "Registration Statement"), filed with the Securities and Exchange Commission relating to the proposed public offering of up to 20,700,000 shares of the Company's Class A common stock, par value $0.001 per share, up to 18,000,000 of which shares are to be sold by the Company (the "Company Shares"), and up to 2,700,000 of which shares are to be sold by ten stockholders (the "Selling Stockholders") of the Company identified in the Registration Statement (the "Selling Stockholder's Shares"). This opinion letter is furnished to you at your request to enable you to fulfill the requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. § 229.601(b)(5), in connection with the Registration Statement. For purposes of this opinion letter, we have examined copies of the following documents:

1.: An executed copy of the Registration Statement.
2.: A form of the Amended and Restated Certificate of Incorporation of the Company, to be filed with the Secretary of State of the State of Delaware and as certified by the Secretary of the Company on the date hereof as having been approved by the Board of Directors and the stockholders of the Company for filing with the Secretary of State of the State of Delaware prior to the closing of the Company's proposed initial public offering and as being complete and accurate (the "Amended and Restated Charter").
3.: A form of the Amended and Restated Bylaws of the Company, as certified by the Secretary of the Company on the date hereof as having been approved by the Board of Directors of the Company to become effective upon the filing with the Secretary of State of the State of Delaware of the Amended and Restated Charter and as being complete and accurate (the "Amended and Restated Bylaws").
4.: The proposed form of Underwriting Agreement among the Company and the several Underwriters to be named therein, for whom Credit Suisse First Boston Corporation and Lehman Brothers Inc. will act as representatives, filed as Exhibit 1 to the Registration Statement (the "Underwriting Agreement").
5.: Resolutions of the Board of Directors of the Company adopted by unanimous written consent on March 6, 2002 and on May 3, 2002, as certified by the Secretary of the Company on the date hereof as being complete, accurate and in effect, relating to the issuance and sale of the Company Shares and arrangements in connection therewith, the adoption of the Amended and Restated Charter, the adoption of the Amended and Restated Bylaws, and the issuance and sale by the Company of the Selling Stockholder's Shares to the Selling Stockholders.
6.: The action of the stockholders of the Company by written consent dated May 3, 2002, as certified by the Secretary of the Company on the date hereof as being complete, accurate and in effect, relating to the adoption of the Amended and Restated Charter.

7.: The Certificate of Incorporation of the Company, as certified by the Secretary of State of the State of Delaware on April 11, 2002 and by the Secretary of the Company on the date hereof as being complete, accurate, and in effect.
8.: The Bylaws of the Company dated March 8, 2002 as certified by the Secretary of the Company on the date hereof as having been approved by the Board of Directors of the Company and as being complete, accurate, and in effect.
9.: The capital stock records of the Company relating to the issuance and sale by the Company of the Selling Stockholder's Shares to the Selling Stockholders.

In our examination of the aforesaid documents, we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the accuracy and completeness of all documents submitted to us, the authenticity of all original documents, and the conformity to authentic original documents of all documents submitted to us as copies (including telecopies). This opinion letter is given, and all statements herein are made, in the context of the foregoing.

This opinion letter is based as to matters of law solely on the Delaware General Corporation Law, as amended. We express no opinion herein as to any other laws, statutes, ordinances, rules, or regulations. As used herein, the term "Delaware General Corporation Law, as amended" includes the statutory provisions contained therein, all applicable provisions of the Delaware Constitution and reported judicial decisions interpreting these laws.

Based upon, subject to and limited by the foregoing, we are of the opinion that (A) following (i) execution and delivery by the Company of the Underwriting Agreement, (ii) effectiveness of the Registration Statement, (iii) issuance of the Company Shares pursuant to the terms of the Underwriting Agreement, and (iv) receipt by the Company of the consideration for the Company Shares specified in the resolutions of the Board of Directors and the Pricing Committee of the Board of Directors, the Company Shares will be validly issued, fully paid, and nonassessable; and (B) assuming that, at the time the Selling Stockholder's Shares were issued and sold by the Company, the Company received the consideration specified in the resolutions referred to in paragraph 5 above, the Selling Stockholder's Shares are validly issued, fully paid, and nonassessable.

This opinion letter has been prepared for your use in connection with the Registration Statement and speaks as of the date hereof. We assume no obligation to advise you of any changes in the foregoing subsequent to the delivery of this opinion letter.

We hereby consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement and to the reference to this firm under the caption "Legal Matters" in the prospectus constituting a part of the Registration Statement. In giving this consent, we do not thereby admit that we are an "expert" within the meaning of the Securities Act of 1933, as amended.

		Very truly yours,

		/s/ HOGAN & HARTSON L.L.P.
		HOGAN & HARTSON L.L.P.

EX-10.2 9 a2078602zex-10_2.htm EXHIBIT 10.2
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EXHIBIT 10.2

REGAL ENTERTAINMENT GROUP

2002 STOCK INCENTIVE PLAN

Section 1. General Purpose of Plan; Definitions

The name of this plan is the Regal Entertainment Group 2002 Stock Incentive Plan (the "Plan"). The Plan was adopted by the Board (defined below) on May 3, 2002. The purpose of the Plan is to enable the Company to attract and retain highly qualified personnel who will contribute to the Company's success and to provide incentives to Participants (defined below) that are linked directly to increases in shareholder value and will therefore inure to the benefit of all shareholders of the Company. Any of the Awards (defined below), may be made as performance incentives or to reward attainment of annual or long-term performance goals in accordance with the terms hereof.

For purposes of the Plan, the following terms shall be defined as set forth below:

(a): "Administrator" means the Board, or if and to the extent the Board does not administer the Plan, the Committee in accordance with Section 2 below.
(b): "Annual Incentive Award" means any Award made subject to the attainment of performance goals over a performance period of up to one year.
(c): "Award" means any grant of an Option or Restricted Stock under the Plan.
(d): "Award Agreement" means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award.
(e): "Board" means the Board of Directors of the Company.
(f): "Cause" means, as determined by the Board, unless otherwise provided in an Award Agreement, (i) any willful breach of any material written policy of the Company that results in material and demonstrable liability or loss to the Company; (ii) the engaging by the Participant in conduct involving moral turpitude that causes material and demonstrable injury, monetarily or otherwise, to the Company, including, but not limited to, misappropriation or conversion of assets of the Company (other than nonmaterial assets); (iii) any conviction of or entry of a plea of nolo contendere to a felony; or (iv) any material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements between a Participant and the Company or any Parent or Subsidiary hereof.
(g): "Change in Control" shall be deemed to have occurred, unless otherwise defined in an Award Agreement, upon both of the following occurring: (A) acquisition by any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than Anschutz Company, The Anschutz Corporation, Anschutz Investment Fund, LP or any entity or organization controlled by Philip F. Anschutz (collectively, the "Anschutz Entities"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Power"); and (B) such beneficial ownership (as so defined) by such individual, entity or group of more than 20% of the Voting Power shall then exceed the beneficial ownership (as so defined) by the Anschutz Entities of the Voting Power.
(h): "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor thereto.
(i): "Committee" means any committee the Board may appoint to administer the Plan. If at any time or to any extent the Board shall not administer the Plan, then the functions of the Board specified in the Plan shall be exercised by the Committee.

(j): "Common Stock" means the common stock designated Class A, par value $0.001 per share, of the Company.
(k): "Company" means Regal Entertainment Group, a Delaware corporation or any successor corporation.
(l): "Covered Employee" means a Participant who is a covered employee within the meaning of Code Section 162(m).
(m): "Disability" means, when used in connection with the exercise of an Incentive Stock Option following termination of employment, disability within the meaning of section 22(e)(3) of the Code.
(n): "Eligible Recipient" means an officer, director, employee, consultant or advisor of, or one who has accepted an offer to be so by, the Company or of any Parent or Subsidiary.
(o): "Exercise Price" means the per share price, if any, at which a holder of an Award may purchase the Shares issuable upon exercise of the Award.
(p): "Fair Market Value" of a share of Common Stock as of a particular date shall mean: (1) until such time as shares of Common Stock are listed on a national securities exchange or traded in an over-the-counter market, the fair market value of a share of Common Stock as determined by the Board in good faith based on all of the relevant facts and circumstances and (2) after such time as shares of Common Stock are listed on a national or regional securities exchange or traded in an over-the-counter market, (i) the closing price per share of Common Stock on the national or regional securities exchange on which such stock is principally traded or (ii) if Common Stock is not listed or admitted for trading on any such exchange, the closing price as reported by the NASDAQ Stock Market or over-the-counter market, in each case on such date or, if such stock was not traded on such date, on the last preceding date on which there was a sale of Common Stock.
(q): "Incentive Stock Option" means any Option intended to be designated as an "incentive stock option" within the meaning of Section 422 of the Code or the corresponding provision of any subsequently enacted tax statute, as amended from time to time.
(r): "Nonqualified Stock Option" means any Option that is not an Incentive Stock Option.
(s): "Option" means an option to purchase Shares granted pursuant to Section 6 below.
(t): "Parent" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations in the chain (other than the Company) owns stock possessing 50% or more of the combined voting power of all classes of stock in one of the other corporations in the chain.
(u): "Participant" means any Eligible Recipient selected by the Administrator, pursuant to the Administrator's authority in Section 2 below, to receive grants of Options and/or awards of Restricted Stock.
(v): "Performance Award" means an Award made subject to the attainment of performance goals over a period of up to ten (10) years.
(w): "Permanent Disability" means any medically determinable physical or mental condition that the Administrator, in its discretion, finds to permanently prevent a Participant from performing the material duties of his or her current employment. If a Participant makes application for disability benefits under the Company's long-term disability program, as now in effect or as hereafter amended, and qualifies for such benefits, the Participant shall be presumed to qualify as permanently disabled under this Plan.
(x): "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee

benefit plan of the Company or any of its affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(y): "Retirement" means termination by the Participant of employment or service with the Company or any Parent or Subsidiary on or after reaching the normal retirement age of sixty-five.
(z): "Restricted Stock" means Shares subject to certain restrictions granted pursuant to Section 7 below.
(aa): "Shares" means shares of Common Stock reserved for issuance under the Plan, as adjusted pursuant to Sections 3 and 5, and any successor security.
(ab): "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations (other than the last corporation) in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

Section 2. Administration.

(a)

The Plan shall be administered by the Board or, at the Board's sole discretion, by the Committee, which shall be appointed by the Board, and which shall serve at the pleasure of the Board. Pursuant to the terms of the Plan, the Administrator shall have the power and authority:

(i): to select those Eligible Recipients who shall be Participants;
(ii): to determine whether and to what extent Options or awards of Restricted Stock or other Awards are to be granted hereunder to Participants;
(iii): to determine the number of Shares to be covered by each Award granted hereunder;
(iv): to determine the terms and conditions, not inconsistent with the terms of the Plan, of each Award granted hereunder;
(v): to determine the terms and conditions, not inconsistent with the terms of the Plan, which shall govern all written instruments evidencing Options or awards of Restricted Stock or other Awards granted hereunder;
(vi): to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time deem advisable; and
(vii): to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any Award Agreement relating thereto) in its sole discretion and to otherwise supervise the administration of the Plan.

(b): The Administrator may, in its discretion, without amendment to the Plan, (i) accelerate the date on which any Option granted under the Plan becomes exercisable or vested, waive or amend the operation of Plan provisions respecting, exercise after termination of employment or otherwise adjust any of the terms of such Option, and (ii) accelerate the lapse of restrictions, or waive any condition imposed hereunder, with respect to any share of Restricted Stock or otherwise adjust any of the terms applicable to any such Award; provided that no action under this Section 2(b) shall adversely affect any outstanding Award without the consent of the holder thereof.
(c): As a condition to any subsequent Award, the Administrator may, at its discretion, require Participants to return to the Company Awards previously made under the Plan. Subject to the terms and conditions of the Plan, any such new Award shall be upon such terms and conditions as are specified by the Administrator at the time the new Award is made. The Administrator may, in its discretion, make Awards in substitution or exchange for any other award under another plan of the Company, any Parent or Subsidiary thereof, or any business entity to be acquired by the Company or Parent or Subsidiary thereof.

(d): All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, including the Company and the Participants.

Section 3. Shares Subject to Plan.

The total number of shares of Common Stock reserved and available for issuance under the Plan shall be 11,194,354 Shares. Such Shares may consist, in whole or in part, of authorized and unissued shares or treasury shares.

To the extent that (i) an Option expires or is otherwise terminated without being exercised, or (ii) any Shares subject to any award of Restricted Stock are forfeited, such Shares shall again be available for issuance in connection with future Awards granted under the Plan. If in connection with the exercise of an Option, or any Shares are withheld by the Company as payment of the exercise price or income taxes, any Shares have been pledged as collateral for indebtedness incurred by a Participant and such Shares are returned to the Company in satisfaction of such indebtedness, such Shares shall again be available for issuance in connection with future Awards granted under the Plan.

Section 4. Eligibility.

Eligible Recipients may be granted Options and/or Restricted Stock. The Participants under the Plan shall be selected from time to time by the Administrator, in its sole discretion, from among the Eligible Recipients.

The Administrator shall have the authority to grant to any Eligible Recipient who is an employee of the Company or of any Parent or Subsidiary (including directors who are also officers of the Company) Incentive Stock Options, Nonqualified Stock Options, or both types of Options, and/or Restricted Stock. Directors of the Company or of any Parent or Subsidiary, consultants or advisors who are not also employees of the Company or of any Parent or Subsidiary may only be granted Options that are Nonqualified Stock Options and/or Restricted Stock.

During any time when the Company has a class of equity securities registered under Section 12 of the Exchange Act, but only after such time as the reliance period described in Treasury Regulation Section 1.162-27(f)(2) has expired:

(i): The maximum number of Shares subject to Options that can be awarded under the Plan to any person eligible for an Award is 2,000,000 per year; and
(ii): The maximum number of Shares that can be awarded under the Plan, other than pursuant to an Option to any person eligible for an Award is 2,000,000 per year.

The preceding limitations are subject to adjustments as provided in the Plan.

Section 5. Corporate Reorganization; Change in Control.

(a) Reorganization of Company. Except as provided otherwise by the Administrator at the time an Award is granted, upon the occurrence of any of the following events, if the notice required by Section 5(b) shall have first been given, the Plan and all Options then outstanding hereunder shall automatically terminate and be of no further force and effect whatsoever, and other Awards then outstanding shall be treated as described in Sections 5(b) and 5(c), without the necessity for any additional notice or other action by the Board or Company: (a) the merger or consolidation of the Company with or into another corporation or other reorganization (other than a reorganization under the United States Bankruptcy Code) of the Company (other than a consolidation, merger, or reorganization in which the Company is the continuing corporation and which does not result in any reclassification or change of outstanding shares of Stock); or (b) the sale or conveyance of the property of Company as an entirety or substantially as an entirety (other than a sale or conveyance in which the Company continues as a holding company of an entity or entities that conduct the business or businesses formerly conducted by the Company); or (c) the dissolution or liquidation of the Company.

(b) Required Notice. At least 30 days prior written notice of any event described in Section 5(a) shall be given by the Company to each Option holder and Participant unless (a) in the case of the events described in clause (a) or (b) of Section 5(a), the Company, or the successor or purchaser, as the case may be, shall make adequate provision for the equitable assumption of the outstanding Options or the equitable substitution of new options for the outstanding Options on terms comparable to the outstanding Options except that the Option holder shall have the right thereafter, subject to the terms of the assumed or substituted Options, to purchase the kind and amount of securities or property or cash receivable upon such merger, consolidation, other reorganization, sale or conveyance by a holder of the number of Shares that would have been receivable upon exercise of the Option immediately prior to such merger, consolidation, sale or conveyance (assuming such holder of Shares failed to exercise any rights of election and received per share of the kind and amount received per share by a majority of the non-electing shares), (b) the Company, or the successor or purchaser, as the case may be, shall make an equitable adjustment of outstanding Awards (other than Options) so that thereafter, subject to the terms and conditions of the adjusted Awards, such Awards shall entitle the Participant to receive the kind and amount of securities or property or cash receivable upon such merger, consolidation, other reorganization, sale or conveyance by a holder of the number of Shares that would have been receivable with respect to such Award immediately prior to such merger, consolidation, other reorganization, sale or conveyance (assuming such holder of Shares failed to exercise any rights of election and received per share the kind and amount received per share by a majority of the non-elected shares). The provisions of this Section 5 shall similarly apply to successive mergers, consolidations, reorganizations, sales or conveyances. Such notice shall be deemed to have been given when delivered personally to a Participant or when mailed to a Participant by registered or certified mail, postage prepaid, at such Participant's address last known to the Company.

(c) Acceleration of Exercisability. Participants notified in accordance with Section 5(b) may exercise their Options at any time before the occurrence of the event requiring the giving of notice (but subject to occurrence of such event), regardless of whether all conditions of exercise relating to length of service, attainment of financial performance goals or otherwise have been satisfied. Upon the giving of notice in accordance with Section 5(b), all restrictions with respect to Restricted Stock shall lapse immediately. Any Options that are not assumed or substituted under clauses (a) or (b) of Section 5(b) that have not been exercised prior to the event described in Section 5(a) shall automatically terminate upon the occurrence of such event.

(d) Adjustments. In the event of any stock dividend, extraordinary cash dividend or other change in the corporate structure affecting the Common Stock, an equitable substitution or proportionate adjustment shall be made in (i) the aggregate number of Shares reserved for issuance under the Plan, (ii) the kind, number and Exercise Price of Shares subject to outstanding Options granted under the Plan and (iii) the kind, number and purchase price of Shares subject to outstanding awards of Restricted Stock granted under the Plan, in each case as may be determined by the Administrator, in its sole discretion, so as not to enlarge or diminish the value of the Options or the awards of Restricted Stock. In connection with any event described in this paragraph, the Administrator may provide, in its sole discretion, for the cancellation of any outstanding Awards and payment of the Fair Market Value thereof in cash or other property.

(e) Change in Control. Unless provided otherwise by the Administrator at the time of the grant of an Award, notwithstanding any other provision of the Plan, upon a Change in Control of the Company (i) all Options shall become immediately exercisable in full during the remaining term thereof, and shall remain so, whether or not the Participants to whom such Options have been granted remain employees or consultants of the Company; and (ii) all restrictions with respect to outstanding Restricted Stock Awards shall immediately lapse without any further action or passage of time.

Section 6. Options.

Options may be granted alone or in addition to other awards of Restricted Stock granted under the Plan. Any Option granted under the Plan shall be in such form as the Administrator may from time to time approve, and the provisions of each Option need not be the same with respect to each

Participant. Participants who are granted Options shall enter into an Award Agreement with the Company, in such form as the Administrator shall determine, which Award Agreement shall set forth, among other things, the Exercise Price of the Option, the term of the Option and provisions regarding exercisability of the Option granted thereunder.

The Options granted under the Plan may be of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock Options. The Award Agreement shall specify the type of Option being granted. To the extent that any Option purporting to be an Incentive Stock Option does not qualify as an Incentive Stock Option, it shall constitute a separate Nonqualified Stock Option. More than one Option may be granted to the same Participant and be outstanding concurrently hereunder.

Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Administrator shall deem desirable:

(a) Option Exercise Price. The per share Exercise Price of Shares purchasable under an Option shall be determined by the Administrator in its sole discretion at the time of grant but shall not, (i) in the case of Incentive Stock Options, be less than 100% of the Fair Market Value of the Common Stock on such date (110% of the Fair Market Value per Share on such date if, on such date, the Eligible Recipient owns (or is deemed to own under Section 424(d) of the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, its Parent or Subsidiary), and (ii) in the case of Nonqualified Stock Options, to the extent required at the time of grant by California "Blue Sky" law, be less than 85% of the Fair Market Value of the Common Stock on such date and in no event be less than the par value of the Common Stock. Notwithstanding the foregoing, if a Participant owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary and an Option is granted to such Participant, the Exercise Price of such Option, to the extent required at the time of grant by California "Blue Sky" law with respect to any Option, shall be no less than 110% of the Fair Market Value of the Stock on the date such Option is granted.

(b) Option Term. The term of each Option shall be fixed by the Administrator, but no Option shall be exercisable more than ten years after the date such Option is granted; provided, however, that if an employee owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary and an Incentive Stock Option is granted to such employee, the term of such Incentive Stock Option (to the extent required by the Code at the time of grant) shall be no more than five years from the date of grant.

(c) Exercisability. Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Administrator at or after the time of grant; provided, however, that, to the extent required at the time of grant by California "Blue Sky" law, Options granted to individuals other than officers, directors or consultants of the Company shall be exercisable at the rate of at least 20% per year over five years from the date of grant. The Administrator may also provide that any Option shall be exercisable only in installments, and the Administrator may waive such installment exercise provisions at any time, in whole or in part, based on such factors as the Administrator may determine, in its sole discretion.

(d) Method of Exercise. Subject to Section 6(c), Options may be exercised in whole or in part at any time during the Option Period, by giving written notice of exercise to the Company specifying the number of Shares to be purchased, accompanied by (i) payment in full of the aggregate Exercise Price of the Shares so purchased in cash; (ii) delivery of outstanding shares of Common Stock that have been owned by you for more than six months with a Fair Market Value on the date of exercise equal to the aggregate exercise price payable with respect to the Options' exercise; (iii) to the extent a public market for the Common Stock exists as determined by the Company, simultaneous sale through a broker reasonably acceptable to the Administrator of Shares acquired on exercise, as permitted under

Regulation T of the Federal Reserve Board; or (iv) any combination of the foregoing that fully satisfies the aggregate Exercise Price of the shares being purchased.

In the event a grantee elects to pay the exercise price payable with respect to an Option pursuant to clause (ii) above, (A) only a whole number of share(s) of Common Stock (and not fractional shares of Common Stock) may be tendered in payment, (B) such grantee must present evidence acceptable to the Company that he or she has owned any such shares of Common Stock tendered in payment of the Exercise Price (and that such tendered shares of Common Stock have not been subject to any substantial risk of forfeiture) for at least six months prior to the date of exercise, and (C) Common Stock must be delivered to the Company. Delivery for this purpose may, at the election of the grantee, be made either by (A) physical delivery of the certificate(s) for all such shares of Common Stock tendered in payment of the price, accompanied by duly executed instruments of transfer in a form acceptable to the Company, or (B) direction to the grantee's broker to transfer, by book entry, of such shares of Common Stock from a brokerage account of the grantee to a brokerage account specified by the Company. When payment of the exercise price is made by delivery of Common Stock, the difference, if any, between the aggregate exercise price payable with respect to the Option being exercised and the Fair Market Value of the shares of Common Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No grantee may tender shares of Common Stock having a Fair Market Value exceeding the aggregate exercise price payable with respect to the Option being exercised (plus any applicable taxes).

(e) Non-Transferability of Options. Except as otherwise permitted by the Administrator or in the Award Agreement, Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will, by the laws of descent or distribution.

(f) Termination of Employment or Service. Upon the termination of a Participant's employment or service with the Company and its Parent and Subsidiaries for any reason (including, without limitation, by reason of the Participant' s continuing employment with a subsidiary following the sale of such Subsidiary) other than due to death, Permanent Disability or Retirement, which are discussed in Section 8 below, any Shares subject to an Option that have not vested prior to such termination, shall immediately expire as of the date of such termination (the "Termination Date," except as provided in the applicable Award Agreement). If a Participant's employment with, or service as a director, consultant or advisor to the Company or to any Parent or Subsidiary terminates for any reason other than Cause, any vested Option or vested portion thereof may thereafter be exercised to the extent that it is exercisable at the time of such termination. Incentive Stock Options not exercised by such Participant within three (3) months after the date of termination (or within one (1) year after a termination caused by Disability) will cease to qualify as Incentive Stock Options and will be treated as Nonqualified Stock Options under the Plan if required to be so treated under the Code. In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for a period equal to the shorter of three (3) years (or six (6) months in the event the Company previously consummated an initial underwritten public offering of its equity securities pursuant to an effective registration statement filed under the Securities Act) following the Participant's termination of employment or service with the Company or any Parent or Subsidiary for any reason (other than Cause) or the unexpired term of the Option. Notwithstanding the foregoing, no Option shall be exercisable after the expiration of its term. Unless provided otherwise in an Award Agreement or in the Administrator's discretion any time thereafter, in the event of the termination of an Optionee's employment for Cause, all outstanding Options, vested or not vested, granted to such Participant shall expire on the date of such termination.

(g) Incentive Stock Options. An Option shall constitute an Incentive Stock Option only (i) if the Participant is an employee of the Company or a Parent or Subsidiary thereof, (ii) to the extent specifically provided in the related Award Agreement, and (iii) to the extent that the aggregate Fair Market Value (determined as of the date the Incentive Stock Option is granted) of Shares with respect to which Incentive Stock Options granted to a Participant under this Plan and all other option plans of the Company or of any Parent or Subsidiary become exercisable for the first time by the Participant during any calendar year is less than or equal to $100,000 (as determined in accordance with Section 422(d) of the Code), with the portion of such Incentive Stock Options in excess of $100,000

being treated as Nonqualified Stock Options. This limitation shall be applied by taking Options into account in the order in which they are granted.

(h) Rights as Shareholder. An Optionee shall have no rights to dividends or any other rights of a shareholder with respect to the Shares subject to the Option until the Optionee has given written notice of exercise, has paid in full for such Shares, has satisfied the requirements of Section 11 hereof and, if requested, has given the representation described in paragraph (b) of Section 12 hereof, and, upon becoming a shareholder, the Participant shall become a party to and be bound by the conditions of the Stockholders' Agreement as provided in the Award Agreement.

(i) Repurchase Rights. Unless the Administrator determines otherwise, the Award Agreement pertaining to the Option, shall grant the Company a repurchase option with respect to Shares obtained upon the exercise of an Option. Such repurchase option shall be exercisable, at the discretion of the Board, upon the voluntary or involuntary termination of the Participant's service with the Company for any reason including, without limitation, for death, Permanent Disability or Retirement and must be exercised, except to the extent otherwise required by California law, within one year following such termination or within one year of exercise of an option that is exercised after the date of such termination, whichever is later. The purchase price for the Shares repurchased pursuant to the Award Agreement pertaining to the Option shall be no less than the Fair Market Value of the Shares on the date of termination, and may be paid by cancellation of any indebtedness of the Participant to the Company. Such repurchase option shall terminate upon the consummation of an initial underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act.

Section 7. Restricted Stock.

Awards of Restricted Stock may be issued either alone or in addition to Options granted under the Plan. The Administrator shall determine the Eligible Recipients to whom, and the time or times at which, awards of Restricted Stock shall be made; the number of Shares to be awarded; the purchase price to be paid by the Participant for the acquisition of Restricted Stock; and the Restricted Period (as defined in Section 7(b)(ii)) applicable to awards of Restricted Stock. The Administrator may also condition the grant of the award of Restricted Stock upon the exercise of Options, or upon such other criteria as the Administrator may determine, in its sole discretion. The provisions of the awards of Restricted Stock need not be the same with respect to each Participant.

(a) Awards and Certificates. The prospective recipient of awards of Restricted Stock shall not have any rights with respect to any such Award, unless and until such recipient has executed an Award Agreement evidencing the Award (a "Restricted Stock Award Agreement") and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Administrator may specify) after the award date. Except as otherwise provided below in Section 7(c), each Participant who is granted an award of Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, which certificate shall be registered in the name of the Participant and shall bear an appropriate legend referring to the terms, conditions, and restrictions applicable to any such Award.

The Company may require that the stock certificates evidencing Restricted Stock granted hereunder be held in the custody of the Company until the restrictions thereon shall have lapsed, and that, as a condition of any award of Restricted Stock, the Participant shall have delivered a stock power, endorsed in blank, relating to the Shares covered by such Award.

(b) Restrictions and Conditions. The awards of Restricted Stock granted pursuant to this Section 7 shall be subject to the following restrictions and conditions:

(i): The price per Share, if any, that a Participant must pay for Shares purchasable under an award of Restricted Stock shall be determined by the Administrator in its sole discretion at the time of grant but, to the extent required at the time of grant by California "Blue Sky" law, such price shall not be less than 85% of the Fair Market Value of the Stock on such date or

at the time the purchase is consummated. In no event may the purchase price be less than the par value of the Common Stock. If a Participant owns or is deemed to own (by reason of the attribution rules applicable under Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary and an award of Restricted Stock is granted to such Participant, the purchase price of such Award, to the extent required at the time of grant by California "Blue Sky" law with respect to any Option, shall be no less than 100% of the Fair Market Value of the Common Stock on the date such award of Restricted Stock is granted or the date the purchase is consummated.

(ii): Subject to the provisions of the Plan and the Restricted Stock Award Agreement governing any such Award, during such period as may be set by the Administrator commencing on the date of grant (the "Restricted Period"), the Participant shall not be permitted to sell, hypothecate, dispose, transfer, pledge or assign shares of Restricted Stock awarded under the Plan; provided, however, that the Administrator may, in its sole discretion, provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions in whole or in part based on such factors and such circumstances as the Administrator may determine, in its sole discretion.

(c) Rights as Stockholder. Except as provided in Section 7(a) and subject to the terms and conditions of the Shareholders' Agreement, or as otherwise provided in a Restricted Stock Award Agreement, the Participant shall generally have the rights of a stockholder of the Company with respect to Restricted Stock during the Restricted Period. Certificates for unrestricted Shares shall be delivered to the Participant promptly after, and only after, the Restricted Period shall expire without forfeiture in respect of such awards of Restricted Stock except as the Administrator, in its sole discretion, shall otherwise determine.

(d) Repurchase Rights. Unless the Administrator determines otherwise, the Restricted Stock Award Agreement shall grant the Company a repurchase option exercisable, at the discretion of the Board, upon the voluntary or involuntary termination of the Participant's service with the Company for any reason including, without limitation, for death, Permanent Disability or Retirement which must be exercised, except as otherwise provided by California "Blue Sky" law, within one year following such termination. The purchase price for unrestricted Shares repurchased pursuant to the Restricted Stock Award Agreement shall be no less than the Fair Market Value of the Shares on the date of termination, and may be paid by cancellation of any indebtedness of the Participant to the Company. The purchase price for all other Shares repurchased pursuant to the Restricted Stock Award Agreement may be paid by cancellation of any indebtedness of the Participant to the Company and shall be the lesser of the Fair Market Value on the date of termination, or the purchase price paid by the Participant. Such repurchase options shall lapse at a rate determined by the Administrator; provided that, to the extent required at the time of grant by California "Blue Sky" law, for awards of Restricted Stock granted to Participants other than officers, directors or consultants of the Company, the repurchase option with respect to Shares that are subject to forfeiture shall lapse at the rate of at least 20% per year over five years from the date of grant, and the repurchase option with respect to unrestricted Shares shall terminate upon the consummation of an initial underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act.

(e) Termination of Employment or Service. Unless the Administrator otherwise provides in an Award Agreement or in writing after the Award Agreement is issued, upon a Participant's termination of employment or service, any Restricted Stock held by such Participant that has not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of Restricted Stock, the Participant shall have no further rights with respect to such Award, including, but not limited to, any right to vote or any right to receive dividends with respect to shares of Restricted Stock.

Section 8. Acceleration of Vesting upon Death, Permanent Disability, and Retirement

Unless otherwise provided in an Award Agreement, a Participant shall immediately become 100 percent Vested in all of his or her outstanding Options or Restricted Stock upon the occurrence of the Participant's death, Permanent Disability or Retirement while the Participant is in the employ or service of the Company or any Parent or Subsidiary.

Section 9. Performance and Annual Incentive Awards.

(a) Performance Conditions. The right of a Participant to exercise or receive a grant or settlement of any Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Board. The Board may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions, and may exercise its discretion to reduce the amounts payable under any Award subject to performance conditions, except as limited under this Section 9 hereof in the case of a Performance Award or Annual Incentive Award intended to qualify under Code Section 162(m). If and to the extent required under Code Section 162(m), any power or authority relating to a Performance Award or Annual Incentive Award intended to qualify under Code Section 162(m), shall be exercised by the Committee and not the Board.

(b) Performance or Annual Incentive Awards Granted to Designated Covered Employees. If and to the extent that the Committee determines that a Performance or Annual Incentive Award to be granted to a Participant who is designated by the Committee as likely to be a Covered Employee should qualify as "performance-based compensation" for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Performance or Annual Incentive Award shall be contingent upon achievement of pre-established performance goals and other terms set forth in this Section 9.

(c) Performance Goals Generally. The performance goals for such Performance or Annual Incentive Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 9. Performance goals shall be objective and shall otherwise meet the requirements of Code Section 162(m) and regulations thereunder, including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being "substantially uncertain." The Committee may determine that such Performance or Annual Incentive Awards shall be granted, exercised and/or settled upon achievement of any one performance goal or that two or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Performance or Annual Incentive Awards. Performance goals may differ for Performance or Annual Incentive Awards granted to any one Grantee or to different Grantees.

(d) Business Criteria. One or more of the following business criteria for the Company, on a consolidated basis, and/or specified subsidiaries or business units of the Company (except with respect to the total stockholder return and earnings per share criteria), shall be used exclusively by the Committee in establishing performance goals for such Performance or Annual Incentive Awards: (i) total stockholder return; (ii) such total stockholder return as compared to total return (on a comparable basis) of a publicly available index such as, but not limited to, the Standard & Poor's 500 Stock Index; (iii) net income; (iv) pretax earnings; (v) earnings before interest expense, taxes, depreciation and amortization; (vi) pretax operating earnings after interest expense and before bonuses, service fees, and extraordinary or special items; (vii) operating margin; (viii) earnings per share; (ix) return on equity; (x) return on capital; (xi) return on investment; (xii) operating earnings; (xiii) working capital; (xiv) ratio of debt to stockholders' equity and (xv) revenue.

(e) Timing For Establishing Performance Goals. Performance goals shall be established not later than 90 days after the beginning of any performance period applicable to such Performance or Annual Incentive Awards, or at such other date as may be required or permitted for "performance-based compensation" under Code Section 162(m).

(f) Performance or Annual Incentive Award Pool. The Committee may establish a Performance or Annual Incentive Award pool, which shall be an unfunded pool, for purposes of measuring Company performance in connection with Performance or Annual Incentive Awards.

(g) Settlement of Performance or Annual Incentive Awards; Other Terms. Settlement of such Performance or Annual Incentive Awards shall be in cash, Stock, other Awards or other property, in the discretion of the Committee. The Committee may, in its discretion, reduce the amount of a settlement otherwise to be made in connection with such Performance or Annual Incentive Awards. The Committee shall specify the circumstances in which such Performance or Annual Incentive Awards shall be paid or forfeited in the event of termination of Service by the Participant prior to the end of a performance period or settlement of Performance Awards.

(h) Written Determinations. All determinations by the Committee as to the establishment of performance goals, the amount of any Performance Award pool or potential individual Performance Awards and as to the achievement of performance goals relating to Performance Awards, and the amount of any Annual Incentive Award pool or potential individual Annual Incentive Awards and the amount of final Annual Incentive Awards, shall be made in writing in the case of any Award intended to qualify under Code Section 162(m). To the extent required to comply with Code Section 162(m), the Committee may delegate any responsibility relating to such Performance Awards or Annual Incentive Awards.

(i) Status of Section 9 Awards Under Code Section 162(m). It is the intent of the Company that Performance Awards and Annual Incentive Awards under Section 9 hereof granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Code Section 162(m) and regulations thereunder shall, if so designated by the Committee, constitute "qualified performance-based compensation" within the meaning of Code Section 162(m) and regulations thereunder. Accordingly, the terms of Section 9, including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Code Section 162(m) and regulations thereunder. The foregoing notwithstanding, because the Committee cannot determine with certainty whether a given Grantee will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term "Covered Employee" as used herein shall mean only a person designated by the Committee, at the time of grant of Performance Awards or an Annual Incentive Award, as likely to be a Covered Employee with respect to that fiscal year. If any provision of the Plan or any agreement relating to such Performance Awards or Annual Incentive Awards does not comply or is inconsistent with the requirements of Code Section 162(m) or regulations thereunder, such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

Section 10. Parachute Limitations.

Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Participant with the Company or any Parent of a Subsidiary, except an agreement, contract, or understanding hereafter entered into that expressly modifies or excludes application of this paragraph (an "Other Agreement"), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Participant (including groups or classes of Participants or beneficiaries of which the Participant is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Participant (a "Benefit Arrangement"), if the Participant is a "disqualified individual," as defined in Section 280G(c) of the Code, any Option, Restricted Stock held by that Participant and any right to receive any payment or other benefit under this Plan shall not become exercisable or vested (i) to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Participant under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Participant under this Plan to be considered a "parachute payment" within the meaning of Section 280G(b)(2) of the Code as then in effect (a "Parachute Payment") and (ii) if, as a result of receiving a Parachute Payment, the aggregate after-tax amounts received by the Participant from the Company under this Plan, all Other Agreements,

and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Participant without causing any such payment or benefit to be considered a Parachute Payment. In the event that the receipt of any such right to exercise, vesting, payment, or benefit under this Plan, in conjunction with all other rights, payments, or benefits to or for the Participant under any Other Agreement or any Benefit Arrangement would cause the Participant to be considered to have received a Parachute Payment under this Plan that would have the effect of decreasing the after-tax amount received by the Participant as described in clause (ii) of the preceding sentence, then the Participant shall have the right, in the Participant's sole discretion, to designate those rights, payments, or benefits under this Plan, any Other Agreements, and any Benefit Arrangements that should be reduced or eliminated so as to avoid having the payment or benefit to the Participant under this Plan be deemed to be a Parachute Payment.

Section 11. Amendment and Termination.

The Board may amend, alter or discontinue the Plan, but no amendment, alteration, or discontinuation shall be made that would impair the rights of a Participant under any Award theretofore granted without such Participant's consent. To the extent necessary and desirable, the Board shall obtain approval of the shareholders (as described below), for any amendment that would:

(a): except as provided in Section 5 of the Plan, increase the total number of Shares reserved for issuance under the Plan;
(b): change the class of officers, directors, employees, consultants and advisors eligible to participate in the Plan; or
(c): extend the maximum Option period under Section 6(b) of the Plan.

The Administrator may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Section 2 and to Section 5 of the Plan, no such amendment shall impair the rights of any Participant without his or her consent.

Notwithstanding the foregoing, the Plan shall terminate upon the sale of all or substantially all of the assets of the Company, or a distribution of all or substantially all of the assets of the Company to its shareholders, or the merger or reorganization of the Company if the Company is not the surviving entity and the Plan is not assumed in connection therewith.

Section 12. Unfunded Status of Plan.

The Plan is intended to constitute an "unfunded" plan for incentive compensation. With respect to any payments not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.

Section 13. Withholding Taxes.

(a): Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state, local and other withholding tax requirements related thereto. Whenever Shares are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any federal, state, local and other withholding tax requirements related thereto.
(b): Unless otherwise determined by the Administrator, a Participant may elect to deliver shares of Common Stock (or have the Company withhold shares deliverable upon grant or vesting of Restricted Stock) to satisfy, in whole or in part, the amount the Company is required to withhold for taxes in connection with the exercise of an Option or the delivery of Restricted Stock upon grant or vesting, as the case may be. Such election must be made on or before the date the amount of tax to be withheld is determined. Once made, the election shall be irrevocable. The fair market value of the Shares to be withheld or delivered will be the Fair Market Value as of the

date the amount of tax to be withheld is determined. In the event a Participant elects to deliver or have the Company withhold Shares of Common Stock pursuant to this Section 11(b), such delivery or withholding must be made subject to the conditions and pursuant to the procedures set forth in Section 6(d) with respect to the delivery or withholding of Common Stock in payment of the Exercise Price of Options.

Section 14. General Provisions.

(a): Shares shall not be issued pursuant to the exercise of any Award granted hereunder unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities Act, the Exchange and the requirements of any stock exchange upon which the Common Stock may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such compliance.
(b): The Administrator may require each person acquiring Shares to represent to and agree with the Company in writing that such person is acquiring the Shares without a view to distribution thereof. The certificates for such Shares may include any legend that the Administrator deems appropriate to reflect any restrictions on transfer.
(c): All certificates for Shares delivered under the Plan shall be subject to such stock-transfer orders and other restrictions as the Administrator may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable Federal or state securities law, and the Administrator may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions.
(d): The Company's repurchase of any Shares shall be subject to the terms of any credit or loan agreement or similar arrangement to which the Company may be a party.
(e): Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval, if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.
(f): Each Participant shall, no later than the date as of which the value of an Award first becomes includible in the gross income of the Participant for Federal income tax purposes, pay to the Company, or make arrangements satisfactory to the Administrator regarding payment of, which shall include, without limitation, compliance with Section 11(b) hereof, any Federal, state, or local taxes of any kind required by law to be withheld with respect to such Award. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.
(g): No member of the Board or the Administrator, nor any officer or employee of the Company acting on behalf of the Board or the Administrator, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Administrator and each and any officer or employee of the Company acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation.
(h): To the extent applicable, pursuant to the provisions of Section 260.140.46 of Title 10 of the California Code of Regulations, the Company shall provide to each Participant and to each individual who acquires Common Stock pursuant to the Plan, not less frequently than annually during the period such Participant or purchaser has one or more awards granted under the Plan outstanding, and, in the case of an individual who acquires Common Stock pursuant to the Plan, during the period such individual owns such Common Stock, copies of the Company's annual financial statements. The Company shall not be required to provide such statements to key

employees of the Company whose duties in connection with the Company assure their access to equivalent information.

(i): To the extent applicable, the provisions of Sections 260.160.41, 260.140.42 and 260.140.45 of Title 10 of the California Code of Regulations are incorporated herein by reference.
(j): Unless the Committee expressly provides otherwise, in connection with any underwritten public offering by the Company of its equity securities pursuant to an effective registration statement filed under the Securities Act, for such period as the Company or its underwriters may request and subject to such other provisions as the Committee may deem necessary or desirable, the Participant shall not, directly or indirectly, sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any Option or other contract for the purchase of, purchase any Option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any Shares acquired under this Plan without the prior written consent of the Company or its underwriters.
(k): If the shares of Common Stock are not listed on a national securities exchange or traded in an over-the-counter market, then at the end of the Company's fiscal year containing the fifth anniversary of the Effective Date, the Company shall obtain an appraisal of the fair market value of a share of Common Stock as of the end of such fiscal year prepared within 90 days of the end of such fiscal year by an independent appraiser selected by the Board of Directors.
(l): No provision in the Plan or any Award or Award Agreement shall be construed to confer upon any individual the right to remain in the employ or service of the Company or Parent or Subsidiary or to interfere in any way with any contractual or other right or authority of the Company either to increase or decrease the compensation or other payment to any individual at any time, or to terminate any employment or other relationship between any individual and the Company. In addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change of duties or positions of the Participant, so long as such Participant continues to be a director, officer, employee, consultant, or adviser of the Company or Parent or Subsidiary. The obligation of the Company to pay any benefits pursuant to this Plan shall be interpreted as a contractual obligation to pay only those amounts described herein, in the manner and under the conditions prescribed herein. The Plan shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amount in trust or escrow for payment to any Participant or beneficiary under the terms of the Plan.

Section 15. Shareholder Approval; Effective Date of Plan.

(a): The grant of any Award hereunder shall be contingent upon shareholder approval of the Plan being obtained within 12 months before or after the date the Board adopts the Plan.
(b): Subject to the approval of the Plan by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted by the Board, the Plan shall be effective as of May 3, 2002 (the "Effective Date").

Section 16. Term of Plan.

No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the Effective Date, but Awards theretofore granted may extend beyond that date.

Section 17. Severability

Whenever possible, each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Plan.

Section 18. Governing Law.

The Plan and all determinations made and actions taken pursuant hereto shall be governed by the laws of the State of Delaware, without giving effect to the conflict of laws principles thereof.

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EXHIBIT 10.2

EX-10.2-1 10 a2078602zex-10_21.htm EXHIBIT 10.2.1
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EXHIBIT 10.2.1

Grant No.

REGAL ENTERTAINMENT GROUP

2002 STOCK INCENTIVE PLAN

FORM OF STOCK OPTION AGREEMENT

This Stock Option Agreement (the "Option Agreement") is made and entered into as of the Date of Grant set forth below (the "Effective Date") by and between Regal Entertainment Group, a Delaware corporation (the "Company"), and the optionee named below (the "Optionee"). Capitalized terms not defined herein shall have the meaning ascribed to them in the Company's 2002 Stock Incentive Plan (the "Plan") that, unless terminated earlier by the Administrator, terminates on , 2012.

Name of Optionee: Social Security No.: Address:
Facsimile Number: Shares Subject to Option: Exercise Price Per Share: Date of Grant: Expiration Date: Type of Stock Option
(Check one):		o Incentive Stock Option o Non-Qualified Stock Option

1. Number of Shares. The Company hereby grants to Optionee an option (this "Option") to purchase the total number of shares of Common Stock set forth above as Shares Subject to Option (the "Option Shares") at the Exercise Price Per Share set forth above (the "Exercise Price"), subject to the terms and conditions of this Option Agreement, the Plan and the Stockholders' Agreement described in Section 2, and, this grant is contingent upon stockholder approval within 12 months of the adoption of the Plan and, in the event that the Option is designated as an Incentive Stock Option, to the extent such Option exceeds the $100,000 rule of Section 422(d), the portion of this Option in excess of such $100,000 shall be treated as a Non-Qualified Stock Option.

2. Stockholders' Agreement. By executing this Option Agreement, the Optionee agrees that upon becoming a stockholder, the Optionee shall automatically become a party to and be bound by and subject to the terms and conditions of that certain Stockholders' Agreement, dated as of March 8, 2002 (the "Stockholders' Agreement"), among the Company and the stockholders party thereto or any successor agreement thereto. The Stockholders' Agreement shall be binding on the Optionee and the other parties thereto and the Optionee and the Company hereby agree that the Optionee shall have the rights and obligations of a "Non-Sponsor Stockholder" thereunder.

3. Option Term. The term of the Option (the "Option Term") shall commence on the Effective Date and, unless the Option is previously terminated pursuant to the Plan or this Option Agreement, shall terminate upon the expiration of ten (10) years from the Effective Date. Upon expiration of the Option Term, all rights of the Optionee hereunder shall terminate.

4. Conditions of Exercise.

(a) The Option shall vest and become exercisable as to 20% of the Option Shares on each yearly anniversary of the Effective Date.

(b) Except as otherwise provided herein, the right of the Optionee to purchase Option Shares with respect to which this Option has become exercisable may be exercised in whole or in part at any time or from time to time prior to expiration of the Option Term, subject to provisions of the

Plan, to compliance with relevant securities law at the time of such exercise and to the approval of counsel for the Company with respect to such compliance. This Option may not be exercised for a fraction of a share.

5. Nontransferability of Option and Option Agreement.

(a) The Option and this Option Agreement shall not be transferable and, during the lifetime of Optionee, the Option may be exercised only by Optionee. Except as otherwise provided by the Administrator, Options may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or, by the laws of descent and distribution. Any attempted sale, pledge, assignment, hypothecation, transfer or other disposition of the Option contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null and void and without effect.

(b) Following the issuance of Option Shares upon exercise of the Option, neither the Option Shares nor any interest therein may be transferred, sold, assigned, exchanged, pledged, hypothecated or otherwise disposed of, including by gift (collectively, "Transferred") by the Optionee unless such Option Shares are Transferred pursuant to (i) an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), and applicable state securities laws covering such Option Shares, (ii) an opinion of legal counsel for the holder of such Option Shares to be Transferred satisfactory to the Company stating that such transaction is exempt from registration, or (iii) written notice from the Company, signed by the principal financial and accounting officer of the Company, to the effect that the Company has otherwise satisfied itself that such transaction is exempt from registration.

6. Method of Exercise of Option. The Option may be exercised by means of written notice of exercise to the Company specifying the number of Option Shares to be purchased, accompanied by payment in full of the aggregate Option Exercise Price, in the manner set forth in the Plan and any applicable withholding taxes in accordance with the Plan. The written notice must also specify how your shares of Stock should be registered (in your name or in your and your spouse's name). If someone else desires to exercise this Option after your death, that person must prove to the Company's satisfaction that he or she is entitled to do so.

7. Right of First Refusal. Before any Shares obtained upon exercise of an Option that are held by Optionee or any transferee (either being sometimes referred to herein as the "Holder") may be sold or otherwise Transferred (including transfer by gift or operation of law), as provided for in the Stockholders' Agreement certain stockholders shall have a right of first refusal to purchase the Option Shares subject to the terms and conditions set forth in Section 2.3 of the Stockholders' Agreement (the "Right of First Refusal"). Such Right of First Refusal shall terminate upon the consummation of an initial underwritten public offering by the Company of its Common Stock pursuant to an effective registration statement filed under the Securities Act.

8. Effect of Termination of Employment or Service. Upon the termination of Optionee's employment or service with the Company or any Parent or Subsidiary for any reason (including without limitation by reason of the Optionee's continuing employment with a Subsidiary following the sale of such Subsidiary) other than due to death, Permanent Disability or retirement, which are discussed in Section 9 below, any Shares subject to an Option that have not vested prior to such termination, shall immediately expire as of the date of such termination (the "Termination Date").

9. Acceleration of Vesting Upon Death, Permanent Disability, Retirement and Change of Control. Optionee shall immediately become 100 percent vested in all of his or her outstanding Options upon the occurrence of the Optionee's death, Permanent Disability or Retirement or upon a Change of Control while the Optionee is in the employ or service of the Company or any Parent or Subsidiary.

10. Termination of Option.

(a) Incentive Stock Options. An Incentive Stock Option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Effective Date.

The Incentive Stock Option will expire earlier if your employment or service terminates as described as follows:

i. If the Optionee's employment or service terminates for any reason, other than death, Permanent Disability or Cause then the Incentive Stock Option will expire at the close of business at Company headquarters on the 90th day after the Optionee's termination date;

ii. If Optionee's employment or service is terminated for Cause, then the Optionee shall immediately forfeit all rights to the Incentive Stock Option and the Incentive Stock Option shall immediately expire;

iii. If the Optionee's employment or service terminates because of death, then the Incentive Stock Option will expire at the close of business at Company headquarters on the date 12 months after the date of death; or

iv. If the Optionee's employment or service terminates because of Permanent Disability, then the Incentive Stock Option will expire at the close of business at Company headquarters on the date 12 months after the optionee's termination date.

(b) Non-Qualified Stock Options. A Non-Qualified Stock Option will expire in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Effective Date. A Non-Qualified Stock Option will expire earlier if your employment or service terminates as described as follows:

(i) If the Optionee's employment or service terminates for any reason, other than death, Permanent Disability or Cause, then the Non-Qualified Stock Option will expire at the close of business at Company headquarters on the 90th day after the Optionee's termination date or, if the Company has not consummated an initial underwritten public offering of its Common Stock pursuant to an effective registration statement filed under the Securities Act, three (3) years following the Optionee's termination of employment or service for any reason other than death, Permanent Disability or Cause;

(ii) If Optionee's employment or service is terminated for Cause, then the Optionee shall immediately forfeit all rights to the Non-Qualified Stock Option and the Non-qualified Stock Option shall immediately expire;

(iii) If the Optionee's employment or service terminates because of death, then the Non-Qualified Stock Option will expire at the close of business at Company headquarters on the date 12 months after the date of death or, if the Company has not consummated an initial underwritten public offering of its Common Stock pursuant to an effective registration statement filed under the Securities Act, three (3) years following the Optionee's termination of employment or service because of death; or

(iv) If the Optionee's employment or service terminates because of Permanent Disability, then the Non-Qualified Stock Option will expire at the close of business at Company headquarters on the date 12 months after the optionee's termination date or, if the Company has not consummated an initial underwritten public offering of its Common Stock pursuant to an effective registration statement filed under the Securities Act, three (3) years following the Optionee's termination of employment or service because of Permanent Disability.

11. Right of Purchase. The Company shall have a repurchase option (the "Repurchase Option") with respect to Shares obtained upon the exercise of an Option. Under this Repurchase Option the Company may purchase from Optionee, or Optionee's personal representative, as the case may be, any or all of Optionee's Shares obtained upon exercise of an Option. Such repurchase option shall be exercisable, at the discretion of the Board, upon the voluntary or involuntary termination of the Optionee's service with the Company for any reason including, without limitation, death, Permanent Disability or Retirement and must be exercised, except as otherwise provided by California "Blue Sky" law, within one year following such termination or within one year of exercise of an Option that is exercised after the Termination Date, whichever is later. The purchase price for the Shares repurchased

pursuant to this Option Agreement pertaining to the Option shall be no less than the Fair Market Value of the Shares on the Termination Date, and may be paid by cancellation of any indebtedness of the Optionee to the Company. The Repurchase Option shall terminate upon the consummation of an initial underwritten public offering by the Company of its Common Stock pursuant to an effective registration statement filed under the Securities Act.

(a) The Repurchase Option is exercised by the Company by delivering personally or by registered mail, to Optionee (or his transferee or legal representative, as the case may be), within sixty (60) days of the Termination Date or within sixty (60) days of the exercise of an Option that is exercised after the Termination Date, whichever is later, a notice in writing indicating the Company's intention to exercise the Repurchase Option and setting forth a date for closing not later than thirty (30) days from the mailing of such notice. The closing shall take place at the Company's office. At the closing, the holder of the certificates for the Shares being transferred shall deliver the stock certificate or certificates evidencing the Shares, and the Company shall deliver the purchase price therefor. At the Company's option and to the extent permitted by applicable law, all or any portion of such purchase price may be paid by canceling indebtedness represented by any note or notes issued by Optionee to the Company.

(b) If the Company is prevented from exercising the Repurchase Option at the time set forth above due to General Provisions of the Plan or due to provisions of the Stockholders' Agreement or any credit or loan agreement or similar agreement to which the Company is a party, the Company may exercise such Repurchase Option as of the first date, if any, on which such provisions are no longer applicable to preventing such exercise by providing notice with sixty (60) days of such date and following the procedures set forth in Section 10(a) above.

12. Transferability of the Shares; Escrow.

(a) Optionee hereby authorizes and directs the Secretary of the Company, or such other person designated by the Company, to take such steps as may be necessary to cause the transfer from Optionee to the Company (or, if applicable, Anschutz or Oaktree) of the Shares as to which the Right of First Refusal or Repurchase Option has been exercised.

(b) To insure the availability for delivery of Optionee's Shares upon repurchase by the Company (or, if applicable, any holder who, pursuant to the Stockholders' Agreement, has Right of First Refusal on such Shares), Optionee hereby appoints the Secretary of the Company, or any other person designated by the Company as escrow agent, as its attorney-in-fact to sell, assign and transfer unto the Company (or, if applicable, any holder who, pursuant to the Stockholders' Agreement, has Right of First Refusal on such Shares) such Shares, if any, repurchased pursuant to the Repurchase Option or purchased under the Right of First Refusal and shall, upon exercise of an Option deliver and deposit with the Secretary of the Company, or such other person designated by the Company, the share certificates representing the Shares subject to such exercise, together with the stock assignment duly endorsed in blank, attached hereto as Exhibit A-1. The Shares and stock assignment shall be held by the Secretary in escrow, pursuant to the Joint Escrow Instructions of the Company and Optionee attached as Exhibit A-2 hereto, until the Repurchase Option or Right of First Refusal is exercised, until expiration of such rights, or until such time as this Option Agreement no longer is in effect. As a further condition to the Company's obligations under this Option Agreement, the spouse of the Optionee, if any, shall execute and deliver to the Company the Consent of Spouse attached hereto as Exhibit A-3. Upon termination of such rights, the escrow agent shall promptly deliver to the Optionee or the Optionee's representative, the certificate or certificates representing such Shares in the escrow agent's possession belonging to the Optionee in accordance with the terms of the Joint Escrow Instructions, and the escrow agent shall be discharged of all further obligations hereunder; provided, however, that the escrow agent shall nevertheless retain such certificate or certificates if so required pursuant to other restrictions imposed pursuant to this Option Agreement.

(c) The Company, or its designee, shall not be liable for any act it may do or omit to do with respect to holding the Shares in escrow and while acting in good faith and in the exercise of its judgment.

(d) Any purported transfer or sale of the Shares shall be subject to restrictions on transfer imposed by any applicable state and Federal securities laws and the terms and conditions of the Stockholders' Agreement. Any transferee shall, at the discretion of the Administrator, hold such Shares subject to all provisions hereof and shall acknowledge the same by signing a copy of this Option Agreement.

13. Rights as a Shareholder. Neither the Optionee nor any of the Optionee's successors in interest shall have any rights as a stockholder of the Company with respect to any shares of Common Stock subject to the Option until the date of issuance of a stock certificate for such shares of Common Stock. This Option Agreement shall not affect in any way the ownership, voting rights or other rights or duties of Optionee, except as specifically provided herein and except as specifically provided in the Stockholders' Agreement with respect to any shares of Common Stock issued upon exercise of the Option.

14. Investment Representation. The Optionee hereby represents and warrants to the Company that the Optionee, by reason of the Optionee's business or financial experience (or the business or financial experience of the Optionee's professional advisors who are unaffiliated with and who are not compensated by the Company or any affiliate or selling agent of the Company, directly or indirectly), has the capacity to protect the Optionee's own interests in connection with the transactions contemplated under this Option Agreement.

15. Tax Advisor Representations. Optionee has reviewed with his own tax advisors the Federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Option Agreement. Optionee is relying solely on such advisors and not on any statements or representations of the Company or any of its agents. Optionee understands that he or she (and not the Company) shall be responsible for any tax liability that may arise as a result of this investment or the transactions contemplated by this Option Agreement.

16. Notices. All notices and other communications under this Option Agreement shall be in writing and shall be given by facsimile or first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three days after mailing or 24 hours after transmission by facsimile to the respective parties named below:

If to Company:		Regal Entertainment Group 7132 Mike Campbell Drive Knoxville, TN 37918 Attention: Secretary Facsimile: (865) 922-6085
If to the Optionee:		To the address or facsimile number set forth on page one of this Agreement.

Either party hereto may change such party's address for notices by notice duly given pursuant hereto.

17. Securities Laws Requirements. The Option shall not be exercisable to any extent, and the Company shall not be obligated to transfer any Option Shares to the Optionee upon exercise of such Option, if such exercise, in the opinion of counsel for the Company, would violate the Securities Act (or any other federal or state statutes having similar requirements as may be in effect at that time). Further, the Company may require as a condition of transfer of any Option Shares pursuant to any exercise of the Option that the Optionee furnish a written representation that he or she is purchasing or acquiring the Option Shares for investment and not with a view to resale or distribution to the public. The Optionee hereby represents and warrants that he or she understands that the Option Shares are "restricted securities," as defined in Rule 144 under the Securities Act, and that any resale of the Option Shares must be in compliance with the registration requirements of the Securities Act, or an exemption therefrom, and, to the extent required at the time of grant, with California "Blue Sky"

law. Each certificate representing Option Shares shall bear the legends set forth below and with any other legends that may be required by the Company or by any Federal or state securities laws:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE RESTRICTED SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES THEREUNDER, AND MAY NOT BE SOLD, OFFERED FOR SALE OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM.

THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE ISSUER OR ITS ASSIGNEE(S). SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER, VOTING AGREEMENTS AND OTHER CONDITIONS AND RESTRICTIONS SPECIFIED IN THE STOCKHOLDERS' AGREEMENT AMONG THE COMPANY AND THE OTHER STOCKHOLDERS NAMED THEREIN, COPIES OF WHICH ARE ON FILE AT THE OFFICE OF THE COMPANY AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES UPON WRITTEN REQUEST.

Further, if the Company decides, in its sole discretion, that the listing or qualification of the Option Shares under any securities or other applicable law is necessary or desirable, the Option shall not be exercisable, in whole or in part, unless and until such listing or qualification, or a consent or approval with respect thereto, shall have been effected or obtained free of any conditions not acceptable to the Company.

18. No Obligation to Register Option Shares. The Company shall be under no obligation to register the Option Shares pursuant to the Securities Act or any other Federal or state securities laws.

19. Protections Against Violations of Agreement. No purported sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift, transfer in trust (voting or other) or other disposition of, or creation of a security interest in or lien on, any of the Option Shares by any holder thereof in violation of the provisions of this Option Agreement, the Stockholders' Agreement or the Certificate of Incorporation or the Bylaws of the Company, will be valid, and the Company will not transfer any of said Option Shares on its books nor will any of said Option Shares be entitled to vote, nor will any dividends be paid thereon, unless and until there has been full compliance with said provisions to the satisfaction of the Company. The foregoing restrictions are in addition to and not in lieu of any other remedies, legal or equitable, available to enforce said provisions.

20. Withholding Requirements.

(a) Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state, local and other withholding tax requirements related thereto. Whenever Shares are to be delivered pursuant to an Award, the Company shall have the right to require the Optionee to remit to the Company in cash an amount sufficient to satisfy any federal, state, local and other withholding tax requirements related thereto.

(b) Unless otherwise determined by the Administrator, Optionee may elect to deliver shares of Common Stock or Option Shares pursuant to Section 7 hereof to satisfy, in whole or in part, the amount the Company is required to withhold for taxes in connection with the exercise of an Option. Such election must be made on or before the date the amount of tax to be withheld is determined. Once made, the election shall be irrevocable. The fair market value of the Shares to be withheld will be the Fair Market Value as of the date the amount of tax to be withheld is determined. In the event Optionee elects to have the Company withhold Shares of Common Stock pursuant to this Section 11(b) of the Plan, such delivery or withholding must be made subject to the conditions and pursuant to the procedures set forth in the Plan with respect to the withholding of Common Stock in payment of the Exercise Price of Options.

21. Failure to Enforce Not a Waiver. The failure of the Company to enforce at any time any provision of this Option Agreement shall in no way be construed to be a waiver of such provision or of any other provision hereof.

22. Governing Law. This Option Agreement shall be governed by and construed according to the laws of the State of Delaware without regard to its principles of conflict of laws.

23. Incorporation of Plan. The Plan is hereby incorporated by reference and made a part hereof, and the Option and this Option Agreement shall be subject to all terms and conditions of the Plan. Certain capitalized terms used in this Option Agreement are defined in the Plan, and they have the meaning set forth in the Plan.

24. Amendments; Entire Agreement. This Option Agreement may be amended or modified at any time only by an instrument in writing signed by each of the parties hereto. This Option Agreement and the Plan constitute the entire understanding between the Optionee and the Company regarding this Option.

25. Agreement Not a Contract of Employment. Neither the Plan, the granting of the Option, this Option Agreement nor any other action taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that the Optionee has a right to continue to provide services as an officer, director, employee, consultant or advisor of the Company or any Parent, Subsidiary or affiliate of the Company for any period of time or at any specific rate of compensation.

26. Authority of the Board. The Board shall have full authority to interpret and construe the terms of the Plan and this Option Agreement. The determination of the Board as to any such matter of interpretation or construction shall be final, binding and conclusive.

27. Market Stand-Off. In connection with any underwritten public offering by the Company (the "Registrant") of Registrant's equity securities pursuant to an effective registration statement filed under the Securities Act for such period as the Registrant or its underwriters may request (such period not to exceed 180 days following the date of the applicable offering), the Optionee shall not, directly or indirectly, sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose of or transfer, or agree to engage in any of the foregoing transactions with respect to, any shares of capital stock of the Company acquired under this Option Agreement or any successor agreement without the prior written consent of the Registrant or the underwriters of such public offering.

28. Additional Compensation Arrangements. Nothing contained in this Option Agreement shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval, if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

29. Survival of Terms. This Option Agreement shall apply to and bind Optionee and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.

30. Severability. Whenever possible, each provision of this Option Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Option Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of this Option Agreement.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Option Agreement on the day and year first above written.

		Regal Entertainment Group
		By
		Name
		Title

The undersigned hereby accepts and agrees to all the terms and provisions of the foregoing Option Agreement and to all the terms and provisions of the Plan, and the Stockholders' Agreement herein incorporated by reference.

		The Optionee
		Address:

EXHIBIT A-1

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED, [ ] (the "Purchaser") hereby sells, assigns and transfers unto Regal Entertainment Group, a Delaware corporation (the "Company"), ( ) shares of Company's common stock designated Class A, par value $0.001 per share (the "Common Stock"), standing in his or her name on the books of said corporation represented by Certificate No. herewith and does hereby irrevocably constitute and appoint to transfer the said stock on the books of the within named corporation with full power of substitution in the premises.

This Assignment Separate from Certificate may be used only in accordance with the Stock Option Agreement (the "Agreement") of the Company and the undersigned dated , .

		Dated:
		Signature

INSTRUCTIONS: Please do not fill in any blanks other than the signature line. The purpose of this Assignment Separate from Certificate is to enable the exercise of the "right of first refusal" and "repurchase option," as set forth in the Agreement, without requiring additional signatures on the part of the Purchaser. This Assignment Separate from Certificate must be delivered to the Company with the above Certificate No. .

EXHIBIT A-2

JOINT ESCROW INSTRUCTIONS

, 20
Regal Entertainment Group
7132 Mike Campbell Drive
Knoxville, TN 37918
Attention: Secretary

Dear :

As Escrow Agent for both Regal Entertainment Group, a Delaware corporation (the "Company"), and [ ] ("Purchaser") of the Company's common stock designated Class A, par value $0.001 per share (the "Common Stock"), you are hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that certain Stock Option Agreement between the Company and Purchaser, dated (the "Agreement"), in accordance with the following instructions:

1. In the event the Company or any holder entitled to a Right of First Refusal set forth in the Stockholders' Agreement (as defined in the Plan) (referred to collectively for convenience herein as the "Company") exercises the Company's right of first refusal set forth in the Stockholders' Agreement (as defined in the Plan) or repurchase option set forth in the Agreement (respectively, the "Right of First Refusal or Repurchase Option"), the Company shall give to Purchaser and to you a written notice specifying the number of shares of Common Stock (the "Shares") to be purchased, the purchase price, and the time for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby irrevocably authorize and direct you to close the transaction contemplated by such notice in accordance with the terms of said notice.

2. At the closing, you are directed (a) to date the Assignment Separate From Certificate necessary for the transfer in question, (b) to fill in the number of Shares being transferred, and (c) to deliver same, together with the certificate evidencing the Shares to be transferred, to the Company or its assignee, against the simultaneous delivery to you of the purchase price for the number of Shares purchased pursuant to the exercise of the Company's Right of First Refusal or Repurchase Option.

3. Purchaser hereby irrevocably authorizes the Company to deposit with you any certificates evidencing the Shares to be held by you hereunder and any additions and substitutions to said Shares as set forth in the Agreement. Purchaser does hereby irrevocably constitute and appoint you as Purchaser's attorney-in-fact and agent for the term of this escrow to execute with respect to such Shares all documents necessary or appropriate to make such Shares negotiable and to complete any transaction herein contemplated, including but not limited to, the filing with any applicable state blue sky authority of any required applications for consent to, or notice of transfer of, the Shares. Subject to the provisions of this Section 3 and to that certain Stockholders' Agreement (as defined in the Plan), Purchaser shall exercise all rights and privileges of a stockholder of the Company while the stock is being held by you.

4. Upon written request of the Purchaser, but not more than once per calendar year, unless the Company's Right of First Refusal or Repurchase Option has been exercised, you will deliver to Purchaser a certificate or certificates representing the aggregate number of Shares that are not then subject to the Company's Right of First Refusal or Repurchase Option. Within 120 days after Purchaser's termination of employment or service with the Company or any Parent or Subsidiary (each, as defined in the Company's 2002 Stock Incentive Plan), you will deliver to Purchaser, or Purchaser's representative, as the case may be, a certificate or certificates representing the aggregate number of Shares held or issued pursuant to the Agreement and not purchased by the Company or its assignees pursuant to exercise of the Company's Repurchase Option; provided that such Shares are not then subject to the Company's Right of First Refusal.

5. If at the time of termination of this escrow you should have in your possession any documents, securities, or other property belonging to Purchaser, you shall deliver all of the same to Purchaser and shall be discharged of all further obligations hereunder.

6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

7. You shall be obligated only for the performance of such duties as are specifically set forth herein and may rely and shall be protected in relying or refraining from acting on any instrument reasonably believed by you to be genuine and to have been signed or presented by the proper party or parties. You shall not be personally liable for any act you may do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith, and any act done or omitted by you pursuant to the advice of your own attorneys shall be conclusive evidence of such good faith.

8. You are hereby expressly authorized to disregard any and all warnings given by any of the parties hereto or by any other person or corporation, excepting only orders or process of courts of law and are hereby expressly authorized to comply with and obey orders, judgments or decrees of any court. In case you obey or comply with any such order, judgment or decree, you shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, notwithstanding any such order, judgment or decree being subsequently reversed, modified, annulled, set aside, vacated or found to have been entered without jurisdiction.

9. You shall not be liable in any respect on account of the identity, authorities or rights of the parties executing or delivering or purporting to execute or deliver the Agreement or any documents or papers deposited or called for hereunder.

10. You shall not be liable for the outlawing of any rights under the Statute of Limitations with respect to these Joint Escrow Instructions or any documents deposited with you.

11. You shall be entitled to employ such legal counsel and other experts as you may deem necessary and proper to advise you in connection with your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel reasonable compensation therefor.

12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be an officer or agent of the Company or if you shall resign by written notice to each party. In the event of any such termination, the Company shall appoint a successor Escrow Agent.

13. If you reasonably require other or further instruments in connection with these Joint Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in furnishing such instruments.

14. It is understood and agreed that should any dispute arise with respect to the delivery and/or ownership or right of possession of the securities held by you hereunder, you are authorized and directed to retain in your possession without liability to anyone all or any part of said securities until such disputes shall have been settled either by mutual written agreement of the parties concerned or by a final order, decree or judgment of a court of competent jurisdiction after the time for appeal has expired and no appeal has been perfected, but you shall be under no duty whatsoever to institute or defend any such proceedings.

15. Notices. All notices and other communications under this Joint Escrow Instructions shall be in writing and shall be given by facsimile or first class mail, certified or registered with return receipt requested, and shall be deemed to have been duly given three days after mailing or 24 hours after transmission by facsimile to the respective parties named below at the following addresses or at such

other addresses as a party may designate by ten day's advance written notice to each of the other parties hereto:

If to Company:		Regal Entertainment Group 7132 Mike Campbell Drive Knoxville, TN 37918 Attention: Chief Executive Officer Facsimile: (865) 922-6085
If to the Purchaser:
Facsimile:
If to the Escrow Agent:		Regal Entertainment Group 7132 Mike Campbell Drive Knoxville, TN 37918 Attention: Secretary Facsimile: (865) 922-6085

16. By signing these Joint Escrow Instructions, you become a party hereto, a party to the Agreement and a party to the Stockholders' Agreement.

17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and their respective successors and permitted assigns.

18. These Joint Escrow Instructions shall be governed by the internal substantive laws, but not the choice of law rules, of the State of Delaware.

		Purchaser:
		Signature:
		By:
		Residence Address:

		Regal Entertainment Group
		Signature:
		By:
		Title:

		Escrow Agent
		Signature:
		By:		Secretary

EXHIBIT A-3

CONSENT OF SPOUSE

I, , spouse of [ ], have read and hereby approve the Stock Option Agreement by and between [ ] and Regal Entertainment Group (the "Company"), dated (the "Agreement"). In consideration of the granting of the right to my spouse to purchase shares of Company common stock designated Class A, par value $0.001 per share ("Common Stock"), as set forth in the Agreement, I hereby appoint my spouse as my attorney-in-fact with respect to the exercise of any rights under the Agreement and agree to be bound by the provisions of the Agreement insofar as I may have any rights in said Agreement or any shares of Common Stock issued pursuant thereto under the community property laws or similar laws relating to marital property in effect in the state of our residence as of the date of the signing of the foregoing Agreement.

		Dated:
		Signature

EX-10.4 11 a2078602zex-10_4.htm EXHIBIT 10.4
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EXHIBIT 10.4

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is made as of May 3, 2002 (this "Agreement") by and between Regal Entertainment Group, a Delaware corporation (the "Company"), and Michael L. Campbell ("Executive").

RECITALS

In order to induce Executive to serve as the Co-Chief Executive Officer of the Company and Vice Chairman of its Board of Directors and as the Chief Executive Officer of the Company's subsidiary, Regal Cinemas Corporation, the Company desires to provide Executive with compensation and other benefits on the terms and conditions set forth in this Agreement.

Executive is willing to accept such employment and perform services for the Company, on the terms and conditions hereinafter set forth.

It is therefore hereby agreed by and between the parties as follows:

1. Employment.

1.1 Position. Subject to the terms and conditions of this Agreement, the Company agrees to employ Executive during the Term (as defined herein) as its Co-Chief Executive Officer and as Vice Chairman of its Board of Directors. In his capacity as the Co-Chief Executive Officer of the Company, Executive shall report to the Board of Directors of the Company (the "Board") and shall have the powers, responsibilities and authorities of chief executive officers of corporations of the size, type and nature of the Company, as it exists from time to time, as are assigned by the Board consistent with Executive's position. In his capacity as Chief Executive Officer of the Company's subsidiary, Regal Cinemas Corporation, Executive shall report to the Board of Directors of Regal Cinemas Corporation and shall have the powers, responsibilities and authorities of chief executive officers of corporations of the size, type and nature of Regal Cinemas Corporation, as it exists from time to time, as are assigned by the Board of Directors of Regal Cinemas Corporation consistent with Executive's position. At the request of the Company, Executive will serve as an officer and/or director of any of the Company's other subsidiaries for no additional compensation.

1.2 Duties. Subject to the terms and conditions of this Agreement, Executive hereby agrees to be employed as the Co-Chief Executive Officer of the Company and to serve as Vice Chairman of the Board and as the Chief Executive Officer of Regal Cinemas Corporation, and agrees to devote such working time and efforts (except for permitted vacation periods and reasonable periods of illness and other incapacity), to the best of his ability, experience and talent, to the performance of services, duties and responsibilities in connection therewith so that such performance shall be his primary business activity. Executive shall perform such duties and exercise such powers with respect to the activities of the Company, commensurate with his positions, as the Co-Chief Executive Officer of the Company and as a member of the Board, as the Board shall from time to time reasonably delegate to him. Executive will be responsible for the selection of the members of the management team for the Company's theatre operations, including Regal Cinemas Corporation and its subsidiaries and United Artists Theatre Company and its subsidiaries, subject in each instance to the good faith approval of the Board.

1.3 Other Service. Nothing in this Agreement shall preclude Executive from serving on boards of directors of other companies or trade organizations and participating in charitable, community or religious activities that do not substantially interfere with his duties and responsibilities hereunder or conflict with the interest of the Company.

1.4 Office. Executive's primary office will be located in the Company's office facility located in Knoxville, Tennessee, or any other location acceptable to Executive.

2. Term.

2.1 Term of Employment. Executive's term of employment under this Agreement shall commence as of the Effective Date (as defined below), and, subject to the terms hereof, shall terminate on the earlier of (i) the third anniversary of the Effective Date, or (ii) termination of Executive's employment pursuant to this Agreement (the "Term"); provided, however, that any termination of employment by Executive (other than for death or Permanent Disability) or by the Company may only be made upon 90 days prior written notice to the other party hereto. Executive shall resign from any and all positions, including board memberships, held by him with the Company or any subsidiary of the Company upon any termination of employment.

2.2 Extensions. On each anniversary of the date hereof, commencing in 2003, one year shall be added to the termination date specified in Section 2.1(i) hereof, so that as of each anniversary of the date hereof the remaining Term of Executive's employment as determined under Section 2.1(i) hereof shall be three (3) years.

2.3 Effective Date. This Agreement shall only be effective and enforceable by the Company or Executive upon the closing under the Exchange Agreement, dated as of March 8, 2002, by and among the Company and the other parties thereto (the "Effective Date").

3. Compensation.

3.1 Salary. The Company shall pay Executive a base salary ("Base Salary") at the rate of $589,100 per annum commencing on the beginning of Executive's term of employment hereunder. Base Salary shall be payable in accordance with the ordinary payroll practices of the Company. The Compensation Committee of the Board will review Executive's salary at least annually and may increase (but not reduce) Executive's Base Salary in its sole discretion. Once increased, such Base Salary shall not be reduced and, as so increased, shall constitute "Base Salary" hereunder.

3.2 Annual Bonus. In addition to his Base Salary, Executive shall, commencing with the 2002 fiscal year and continuing each fiscal year hereafter, be afforded a reasonable opportunity to earn an annual cash bonus (the "Bonus") during the Term. In determining Executive's bonus, Executive's target bonus shall be at least 100% of Base Salary (the "Target Bonus") and Executive's stretch bonus shall be at least 150% of Base Salary. For 2002, the Executive's Bonus shall be calculated in accordance within the Company's 2002 Bonus Plan as adopted by the Board. After 2002, the Compensation Committee of the Board, after consultation with management, will in the last quarter of each year establish a reasonable performance target for the Company's bonus plan for the next year based on the actual and projected performance of the Company. Executive shall be eligible to receive any bonus awarded under the Company's bonus plan so long as Executive is employed by the Company as of the last day of the Company's fiscal year.

4. Employee Benefits.

4.1 Employee Benefit Programs, Plans and Practices. The Company shall during the Term provide Executive with coverage under all employee pension and welfare benefit programs, plans and practices (to the extent permitted under any employee benefit plan) in accordance with the terms thereof, which the Company generally makes available to its senior executives.

4.2 Vacation. While employed hereunder, Executive shall be entitled to no less than 20 business days paid vacation in each calendar year, which shall be taken at such times as are consistent with Executive's responsibilities hereunder.

5. Expenses. Executive is authorized to incur reasonable expenses in carrying out his duties and responsibilities under this Agreement. The Company will reimburse Executive for such expenses upon presentation by Executive from time to time of appropriately itemized and approved (consistent with the Company's policy) accounts of such expenditures.

6. Termination of Employment.

6.1 Termination Without Cause. Except as provided in Section 6.3, if Executive's employment is terminated by the Company (other than for Permanent Disability, death or Cause), Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which he is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for which Executive is entitled to reimbursement hereunder. If Executive is terminated under this Section 6.1, Executive shall also be entitled to receive:

(a) an amount in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(i) the actual bonus, if any, he would have received in respect of the fiscal year in which his termination occurs, prorated by a fraction, the numerator of which is the number of days in such fiscal year prior to the date of Executive's termination and the denominator of which is 365, payable at the same time as bonuses are paid to other executives;

(ii) two times Executive's annual Base Salary; payable in installments as normal payroll over the 24 months following such termination of employment; and

(b) continued coverage for a 24-month period under any employee medical, health and life insurance plans in accordance with the respective terms thereof applicable to active employees (other than the requirement of continued employment); provided, however, that payments and benefits due hereunder shall be reduced by any amounts owed by Executive to the Company.

In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not Executive obtains other employment.

6.2 Termination For Good Reason. Except as provided in Section 6.3, if Executive resigns for Good Reason (as defined below), Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which he is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for which Executive is entitled to reimbursement hereunder. If Executive resigns under this Section 6.2, Executive shall also be entitled to receive:

(a) an amount (the "Section 6.2 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(ii) two times Executive's annual Base Salary; plus one times Executive's Target Bonus; payable in a lump sum within 30 days following such termination of employment; provided that if such resignation occurs within 90 days prior to calendar year end, Executive shall have the option to defer payment, without interest, of the Section 6.2 Termination Amount to January 1 of the next year; and

Good Reason shall be defined as (i) a reduction in Executive's Base Salary or the establishment of or any amendment to the annual cash bonus plan which would materially impair the ability of Executive to receive the Target Bonus (other than the establishment of reasonable EBITDA or other reasonable performance targets to be set annually in good faith by the Board), (ii) a diminution of Executive's titles, offices, positions or authority, excluding for this purpose an action not taken in bad faith and which is remedied within twenty (20) days after receipt of written notice thereof given by Executive; or the assignment to Executive of any duties inconsistent with Executive's position (including status or reporting requirements), authority, or material responsibilities, or the removal of Executive's authority or material responsibilities, excluding for this purpose an action not taken in bad faith and which is remedied by the Company within twenty (20) days after receipt of notice thereof given by Executive, (iii) a transfer of Executive's primary workplace by more than fifty (50) miles from the current workplace, (iv) a material breach of this Agreement by the Company which is not remedied within twenty (20) days after receipt of written notice thereof given by Executive, (v) Executive is not the Chief Executive Officer of Regal Cinemas Corporation, or (vi) Executive is not the Co-Chief Executive Officer of the Company and a member of the Board.

6.3 Termination During a Change of Control. Notwithstanding Section 6.1 or 6.2, if within three months prior to or one year after a Change of Control (as defined below), Executive's employment is terminated by the Company (other than for Permanent Disability, death or Cause) or the Executive resigns for Good Reason, Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which he is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for which Executive is entitled to reimbursement hereunder. If Executive is terminated or resigns under this Section 6.3, Executive shall also be entitled to receive:

(a) an amount (the "Section 6.3 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(ii) two and one half times Executive's annual Base Salary; plus two times Executive's Target Bonus payable in a lump sum within 30 days following such termination of employment; provided that if such termination or resignation occurs within 90 days prior to calendar year end, Executive shall have the option to defer payment, without interest, of the Section 6.3 Termination Amount to January 1 of the next year; and

(b) continued coverage for a 30-month period under any employee medical, health and life insurance plans in accordance with the respective terms thereof applicable to active employees (other than the requirement of continued employment); provided, however, that payments and benefits due hereunder shall be reduced by any amounts owed by the Executive to the Company.

A Change of Control shall be deemed to have occurred upon both of the following occurring: (A) any individual, entity, or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than Anschutz Company, The Anschutz Corporation, or any entity or organization controlled by Philip F. Anschutz (collectively, the "Anschutz Entities"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) acquires 20% or more of the combined voting power of the then-outstanding voting securities of the Company entitled to vote generally in the election of directors ("Voting Power"); and (B) such beneficial ownership (as so defined) by such individual, entity or group of more than 20% of the Voting Power then exceeds the beneficial ownership (as so defined) by the Anschutz Entities of the Voting Power.

6.4 Permanent Disability. If Executive is unable to engage in the activities required by Executive's job by reason of any medically determined physical or mental impairment which has lasted or can be expected to last for a continuous period of not less than six (6) consecutive months ("Permanent Disability"), the Company or Executive may terminate Executive's employment on written notice thereof, and Executive shall receive or commence receiving, as soon as practicable:

(i) the actual bonus, if any, he would have received in respect of the fiscal year in which his termination occurs, prorated by a fraction, the numerator of which is the number of days of the fiscal year until termination and the denominator of which is 365, payable at the same time as bonuses are paid to other executives; and

(ii) accrued but unpaid Base Salary and such payments under applicable plans or programs, including but not limited to those referred to in Sections 4.1, 4.2 and 5 hereof, to which he is entitled pursuant to the terms of such plans or programs.

6.5 Death. In the event of Executive's death during the Term, Executive's estate or designated beneficiaries shall receive or commence receiving, as soon as practicable:

(i) the actual bonus, if any, he would have received in respect of the fiscal year in which his death occurs, prorated by a fraction, the numerator of which is the number of days of the fiscal year until his death and the denominator of which is 365, payable at the same time as bonuses are paid to other executives; and

(ii) accrued but unpaid Base Salary and such payments under applicable plans or programs, including but not limited to those referred to in Sections 4.1, 4.2 and 5 hereof, to which Executive's estate or designated beneficiaries are entitled pursuant to the terms of such plans or programs.

6.6 Termination for Cause; Resignation by Executive.

(a) The Company shall have the right to terminate the employment of Executive for Cause. In the event that Executive's employment is terminated by the Company for Cause or by Executive for any reason (other than by Executive for Good Reason or as a result of the Executive's Permanent Disability or death) during the Term, Executive shall not be entitled to the payment of any compensation otherwise included under this Agreement. After the termination of Executive's employment under this Section 6.6, the obligations of the Company under this Agreement to make any further payments, or provide any benefits specified herein, to Executive shall thereupon cease and terminate.

(b) As used herein, the term "Cause" shall be limited to (i) any willful breach of any material written policy of the Company that results in material and demonstrable liability or loss to the Company; (ii) the engaging by Executive in conduct involving moral turpitude that causes material and demonstrable injury, monetarily or otherwise, to the Company, including, but not limited to, misappropriation or conversion of assets of the Company (other than immaterial assets); (iii) conviction of or entry of a plea of nolo contendere to a felony; or (iv) a material breach of this Agreement by engaging in action in violation of the restrictive covenants in this Agreement. No act or failure to act by the Executive shall be deemed "willful" if done, or omitted to be done, by him in good faith and with the reasonable belief that his action or omission was in the best interest of the Company.

Company's written request, as a director or officer of any other corporation (other than a subsidiary of the Company) or as a trustee or fiduciary of an employee benefit plan not sponsored by the Company or a subsidiary of the Company, against all liabilities and reasonable expenses that may be incurred by Executive in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal or administrative, or investigative and whether formal or informal, because Executive is or was a director or officer of the Company, a director or officer of such other corporation or a trustee or fiduciary of such employee benefit plan, and against which Executive may be indemnified by the Company, and (ii) pay for or reimburse the reasonable expenses incurred by Executive in the defense of any proceeding to which Executive is a party because Executive is or was a director or officer of the Company, a director or officer of such other corporation or a trustee or fiduciary of such employee benefit plan. The rights of Executive under the Indemnification Provisions shall survive the termination of the employment of Executive by the Company.

8. Notices. All notices or communications hereunder shall be in writing, addressed as follows:

To the Company:

Regal Entertainment Group
c/o Regal Cinemas Corporation
7132 Mike Campbell Drive
Knoxville, TN 37918
Attn: Peter B. Brandow, Esq., General Counsel

with copies to:

Anschutz Investment Company
555 Seventeenth Street, Suite 2400
Denver, CO 80202
Attn: Craig D. Slater, President

To Executive:

Mr. Michael L. Campbell
6800 Shinnecock Lane
Knoxville, Tennessee 37918

Any such notice or communication shall be delivered by hand or by courier or sent certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such other address as such party may designate in a notice duty delivered as described above), and the third business day after the actual date of mailing hall constitute the time at which notice was given.

9. Separability; Legal Fees. If any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect. The non-prevailing party shall bear the costs of any legal fees and other fees and expenses which may be incurred by the prevailing party in respect of enforcing its respective rights under this Agreement.

10. Assignment. This contract shall be binding upon and inure to the benefit of the heirs and representatives of Executive and the assigns, and successors of the Company, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by Executive (except by will or by operation of the laws of intestate succession) or by the Company, except that the Company may assign this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially all of the stock, assets or businesses of the Company, if such successor expressly agrees to assume the obligations of the Company hereunder.

11. Amendment. This Agreement may only be amended by written agreement of the parties hereto.

12. Nondisclosure of Confidential Information: Non-Competition.

(a) Executive shall not, without the prior written consent of the Company, use, divulge, disclose or make accessible to any other person, firm, partnership, corporation or other entity any Confidential Information pertaining to the business of the Company or any of its affiliates, except (i) while employed by the Company, in the business of and for the benefit of the Company, or (ii) as required by law. For purposes of this Section 12(a), "Confidential Information" shall mean non-public information concerning the financial data, strategic business plans, product development (or other proprietary product data), customer lists, marketing, acquisition and divestiture plans and other non-public, proprietary and confidential information of the Company, its subsidiaries, its theater affiliates (the "Restricted Group") or suppliers (including, without limitation, any motion picture distributor or exhibitor) or vendors, that, in any case, is not otherwise available to the public (other than by Executive's breach of the terms hereof).

(b) During the period of his employment hereunder and for one year thereafter (except in the case where Executive terminates his employment with the Company for the Good Reason event described in clause (v) of the definition of "Good Reason"), Executive agrees that, without the prior written consent of the Company, (A) he will not, directly or indirectly, either as principal, manager, agent, consultant, officer, stockholder, partner, investor, lender or employee or in any other capacity, carry on, be engaged in, or have any financial interest in, any business in Competition (as defined in Section 12(c)) with the business of the Restricted Group and (B) he shall not, on his own behalf or on behalf of any person, firm or company, directly or indirectly, solicit or hire for the benefit of anyone, other than the Restricted Group, any person who is, or was at any time during the six (6) months immediately preceding the time of the solicitation or hiring by Executive employed by the Restricted Group (other than Executive's secretary or other administrative employee who worked directly for him).

(c) For purposes of this Section 12, a business shall be deemed to be in "Competition" with the Restricted Group if it operates a first-run movie theater with a minimum of six (6) screens within ten (10) miles of any first-run movie theater with a minimum of six (6) screens operated by a member of the Restricted Group. Nothing in this Section 12 shall be construed so as to preclude Executive from investing in a publicly or privately held company, provided Executive's beneficial ownership of any class of such company's securities does not exceed 1% of the outstanding securities of such class.

(d) Executive and the Company agree that this covenant not to compete is a reasonable covenant under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction such restraint is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this covenant as to the court shall appear not reasonable and to enforce the remainder of the covenant as so amended. Executive agrees that any breach of the covenants contained in this Section 12 would irreparably injure the Company. Accordingly, Executive agrees that the Company may, in addition to pursuing any other remedies it may have in equity, obtain an injunction against Executive from any court having jurisdiction over the matter restraining any further violation of this Agreement by Executive and cease making any payments otherwise required by this Agreement; provided, however, that in the event a court of competent jurisdiction, which recognizes the validity of the provisions of this Section 12, finds Executive not to be in violation of the provisions of this Section 12, then the Company shall pay to Executive, in a lump sum, within ten days of such determination, all amounts that would have been payable to Executive hereunder through the date of such determination and continue making any other payments due with respect to periods of time subsequent to such determination in accordance with the provisions of this Agreement.

13. Beneficiaries: References. Executive shall be entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive's death, and may change such election, in either case by giving the Company written notice thereof. In the event of Executive's death or a judicial determination

of his incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative, and the Company shall pay amounts payable under this Agreement, unless otherwise provided herein, in accordance with the terms of this Agreement, to Executive's personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees or estate, as the case may be. Any reference to the masculine gender in this Agreement shall include, where appropriate, the feminine.

14. Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations. The provisions of this Section 14 are in addition to the survivorship provisions of any other section of this Agreement.

15. Governing Law. This Agreement shall be construed, interpreted and governed in accordance with the laws of the state of Colorado, without reference to rules relating to conflicts of law.

16. Effect on Prior Agreements. Except for amendments to this Agreement, this Agreement contains the entire understanding between the parties hereto and supersedes in all respects any prior or other agreement or understanding between the Company or any affiliate of the Company and Executive, including, without limitation, the Employment Agreement, dated as of October 11, 2001 (the "Prior Agreement"), by and between Regal Cinemas, Inc. and Executive, which agreement shall terminate in all respects upon the Effective Date, except that the provisions of Section 6.1 under the Prior Agreement shall remain in full force and effect until January 29, 2003; provided, that any amounts payable by Regal Cinemas, Inc. under such Section 6.1 shall be reduced by any severance payments due under this Agreement.

17. Withholding. The Company shall be entitled to withhold from payment any amount of withholding required by law.

18. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original.

* * * *

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the first paragraph.

REGAL ENTERTAINMENT GROUP
By:
/s/ KURT C. HALL
	Name:	Kurt C. Hall
	Title:	Co-Chief Executive Officer & Vice Chairman of the Board of Directors
EXECUTIVE
/s/ MICHAEL L. CAMPBELL
Michael L. Campbell

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EXHIBIT 10.4

EX-10.5 12 a2078602zex-10_5.htm EXHIBIT 10.5
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EXHIBIT 10.5

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is made as of May 3, 2002 (this "Agreement") by and between Regal Entertainment Group, a Delaware corporation (the "Company"), and Kurt C. Hall ("Executive").

RECITALS

In order to induce Executive to serve as the Co-Chief Executive Officer of the Company and Vice Chairman of its Board of Directors and as the President and Chief Executive Officer of the Company's subsidiary, Regal CineMedia Corporation, the Company desires to provide Executive with compensation and other benefits on the terms and conditions set forth in this Agreement.

Executive is willing to accept such employment and perform services for the Company, on the terms and conditions hereinafter set forth.

It is therefore hereby agreed by and between the parties as follows:

1. Employment.

1.1 Position. Subject to the terms and conditions of this Agreement, the Company agrees to employ Executive during the Term (as defined herein) as its Co-Chief Executive Officer and as Vice Chairman of its Board of Directors. In his capacity as the Co-Chief Executive Officer of the Company, Executive shall report to the Board of Directors of the Company (the "Board") and shall have the powers, responsibilities and authorities of chief executive officers of corporations of the size, type and nature of the Company, as it exists from time to time, as are assigned by the Board consistent with Executive's position. In his capacity as President and Chief Executive Officer of the Company's subsidiary, Regal CineMedia Corporation, Executive shall report to the Board of Directors of Regal CineMedia Corporation and shall have the powers, responsibilities and authorities of presidents and chief executive officers of corporations of the size, type and nature of Regal CineMedia Corporation, as it exists from time to time, as are assigned by the Board of Directors of Regal CineMedia Corporation consistent with Executive's position. At the request of the Company, Executive will serve as an officer and/or director of any of the Company's other subsidiaries for no additional compensation.

1.2 Duties. Subject to the terms and conditions of this Agreement, Executive hereby agrees to be employed as the Co-Chief Executive Officer of the Company and to serve as Vice Chairman of the Board and as the President and Chief Executive Officer of Regal CineMedia Corporation, and agrees to devote such working time and efforts (except for permitted vacation periods and reasonable periods of illness and other incapacity), to the best of his ability, experience and talent, to the performance of services, duties and responsibilities in connection therewith so that such performance shall be his primary business activity. Executive shall perform such duties and exercise such powers with respect to the activities of the Company, commensurate with his positions, as the Co-Chief Executive Officer of the Company and as a member of the Board, as the Board shall from time to time reasonably delegate to him. Executive will be responsible for the selection of the members of the management team for the Company's digital media advertising operations, including Regal CineMedia Corporation and its subsidiaries, subject to the good faith approval of the Board.

1.4 Office. Executive's primary office will be located in the Company's office facility located in Centennial, Colorado, or any other location acceptable to Executive.

2. Term.

3. Compensation.

4. Employee Benefits.

6. Termination of Employment.

(a) an amount in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(ii) two times Executive's annual Base Salary; payable in installments as normal payroll over the 24 months following such termination of employment; and

(a) an amount (the "Section 6.2 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

Good Reason shall be defined as (i) a reduction in Executive's Base Salary or the establishment of or any amendment to the annual cash bonus plan which would materially impair the ability of Executive to receive the Target Bonus (other than the establishment of reasonable EBITDA or other reasonable performance targets to be set annually in good faith by the Board), (ii) a diminution of Executive's titles, offices, positions or authority, excluding for this purpose an action not taken in bad faith and which is remedied within twenty (20) days after receipt of written notice thereof given by Executive; or the assignment to Executive of any duties inconsistent with Executive's position (including status or reporting requirements), authority, or material responsibilities, or the removal of Executive's authority or material responsibilities, excluding for this purpose an action not taken in bad faith and which is remedied by the Company within twenty (20) days after receipt of notice thereof given by Executive, (iii) a transfer of Executive's primary workplace by more than fifty (50) miles from the current workplace, (iv) a material breach of this Agreement by the Company which is not remedied within twenty (20) days after receipt of written notice thereof given by Executive, (v) Executive is not the President and Chief Executive Officer of Regal CineMedia Corporation, or (vi) Executive is not the Co-Chief Executive Officer of the Company and a member of the Board.

(a) an amount (the "Section 6.3 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(i) the actual bonus, if any, he would have received in respect of the fiscal year in which his termination occurs, prorated by a fraction, the numerator of which is the number of days of the fiscal year until termination and the denominator of which is 365, payable at the same time as bonuses are paid to other executives; and

6.5 Death. In the event of Executive's death during the Term, Executive's estate or designated beneficiaries shall receive or commence receiving, as soon as practicable:

(ii) accrued but unpaid Base Salary and such payments under applicable plans or programs, including but not limited to those referred to in Sections 4.1, 4.2 and 5 hereof, to which Executive's estate or designated beneficiaries are entitled pursuant to the terms of such plans or programs.

6.6 Termination for Cause; Resignation by Executive.

8. Notices. All notices or communications hereunder shall be in writing, addressed as follows:

To the Company:

Regal Entertainment Group
c/o United Artists Theatre Company
9110 East Nichols Avenue, Suite 200
Centennial, CO 80112
Attn: Peter B. Brandow, Esq., General Counsel

with copies to:

Anschutz Investment Company
555 Seventeenth Street, Suite 2400
Denver, CO 80202
Attn: Craig D. Slater, President

To Executive:

Mr. Kurt C. Hall
c/o United Artists Theatre Company
9110 East Nichols Avenue, Suite 200
Centennial, CO 80112

11. Amendment. This Agreement may only be amended by written agreement of the parties hereto.

12. Nondisclosure of Confidential Information: Non-Competition.

(c) For purposes of this Section 12, a business shall be deemed to be in "Competition" with the Restricted Group if it (i) operates a first-run movie theater with a minimum of six (6) screens within ten (10) miles of any first-run movie theater with a minimum of six (6) screens operated by a member of the Restricted Group, or (ii) sells, promotes or distributes advertising through digital media for display at movie theatres or other public venues or retail establishments. Nothing in this Section 12 shall be construed so as to preclude Executive from investing in a publicly or privately held company, provided Executive's beneficial ownership of any class of such company's securities does not exceed 1% of the outstanding securities of such class.

giving the Company written notice thereof. In the event of Executive's death or a judicial determination of his incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative, and the Company shall pay amounts payable under this Agreement, unless otherwise provided herein, in accordance with the terms of this Agreement, to Executive's personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees or estate, as the case may be. Any reference to the masculine gender in this Agreement shall include, where appropriate, the feminine.

15. Governing Law. This Agreement shall be construed, interpreted and governed in accordance with the laws of the state of Colorado, without reference to rules relating to conflicts of law.

17. Withholding. The Company shall be entitled to withhold from payment any amount of withholding required by law.

18. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original.

* * * *

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the first paragraph.

REGAL ENTERTAINMENT GROUP

By:
/s/ MICHAEL L. CAMPBELL
	Name:	Michael L. Campbell
	Title:	Co-Chief Executive Officer & Vice Chairman of the Board of Directors

EXECUTIVE

/s/ KURT C. HALL
Kurt C. Hall

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EXHIBIT 10.5

EX-10.6 13 a2078602zex-10_6.htm EXHIBIT 10.6
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EXHIBIT 10.6

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is made as of May 3, 2002 (this "Agreement") by and between Regal Entertainment Group, a Delaware corporation (the "Company"), and Amy E. Miles ("Executive").

RECITALS

In order to induce Executive to serve as Executive Vice President and Chief Financial Officer of the Company, the Company desires to provide Executive with compensation and other benefits on the terms and conditions set forth in this Agreement.

Executive is willing to accept such employment and perform services for the Company, on the terms and conditions hereinafter set forth.

It is therefore hereby agreed by and between the parties as follows:

1. Employment.

1.2 Duties. Subject to the terms and conditions of this Agreement, Executive hereby agrees to be employed as Executive Vice President and Chief Financial Officer of the Company and agrees to devote such working time and efforts (except for permitted vacation periods and reasonable periods of illness and other incapacity), to the best of her ability, experience and talent, to the performance of services, duties and responsibilities in connection therewith so that such performance shall be her primary business activity. Executive shall perform such duties and exercise such powers with respect to the activities of the Company, commensurate with her position, as Executive Vice President and Chief Financial Officer of the Company, as the Co-Chief Executive Officers shall from time to time reasonably delegate to her.

1.3 Other Service. Nothing in this Agreement shall preclude Executive from serving on boards of directors of other companies or trade organizations and participating in charitable, community or religious activities that do not substantially interfere with her duties and responsibilities hereunder or conflict with the interest of the Company.

1.4 Reporting. Executive shall report directly to (a) Michael L. Campbell, Co-Chief Executive Officer and Vice Chairman of the Board of Directors of the Company or (b) if Mr. Campbell is no longer employed by the Company, the then existing Chief Executive Officer of the Company.

2. Term.

shall resign from any and all positions, including board memberships, held by her with the Company or any subsidiary of the Company upon any termination of employment.

2.2 Extensions. On each anniversary of the date hereof, commencing in 2002, one year shall be added to the termination date specified in Section 2.1(i) hereof, so that as of each anniversary of the date hereof the remaining Term of Executive's employment as determined under Section 2.1(i) hereof shall be three (3) years.

3. Compensation.

3.1 Salary. The Company shall pay Executive a base salary ("Base Salary") at the rate of $310,500 per annum commencing on the beginning of Executive's term of employment hereunder. Base Salary shall be payable in accordance with the ordinary payroll practices of the Company. The Compensation Committee of the Board of Directors of the Company will review Executive's salary at least annually and may increase (but not reduce) Executive's Base Salary in its sole discretion. Once increased such Base Salary shall not be reduced, and, as so increased, shall constitute "Base Salary" hereunder.

3.2 Annual Bonus. In addition to her Base Salary, Executive shall, commencing with the 2002 fiscal year and continuing each fiscal year thereafter, be afforded a reasonable opportunity to earn an annual cash bonus (the "Bonus") during the Term. In determining Executive's bonus, Executive's target bonus shall be at least 75% of Base Salary (the "Target Bonus") and Executive's stretch bonus shall be at least 100% of Base Salary. For 2002, Executive's Bonus shall be calculated in accordance with the Company's 2002 Bonus Plan as adopted by the Board. After 2002, the Compensation Committee, after consultation with management, will in the last quarter of each year establish a reasonable performance target for the Company's bonus plan for the next year based on the actual and projected performance of the Company.

4. Employee Benefits.

5. Expenses. Executive is authorized to incur reasonable expenses in carrying out her duties and responsibilities under this Agreement. The Company will reimburse Executive for such expenses upon presentation by Executive from time to time of appropriately itemized and approved (consistent with the Company's policy) accounts of such expenditures.

6. Termination of Employment.

6.1 Termination Without Cause. Except as provided in Section 6.3, if Executive's employment is terminated by the Company (other than for Permanent Disability, death or Cause), Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which she is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for

which Executive is entitled to reimbursement hereunder. If Executive is terminated under this Section 6.1, Executive shall also be entitled to receive:

(a) an amount in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(i) the actual bonus, if any, she would have received in respect of the fiscal year in which her termination occurs, prorated by a fraction, the numerator of which is the number of days in such fiscal year prior to the date of Executive's termination and the denominator of which is 365, payable at the same time as bonuses are paid to other executives;

(ii) two times Executive's annual Base Salary; payable in installments as normal payroll over the 24 months following such termination of employment; and

6.2 Termination For Good Reason. Except as provided in Section 6.3, if Executive resigns for Good Reason (as defined below), Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which she is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for which Executive is entitled to reimbursement hereunder. If Executive resigns under this Section 6.2, Executive shall also be entitled to receive:

(a) an amount (the "Section 6.2 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

authority or material responsibilities, excluding for this purpose an action not taken in bad faith and which is remedied by the Company within twenty (20) days after receipt of notice thereof given by Executive, (iii) a transfer of Executive's primary workplace by more than fifty (50) miles from the current workplace, (iv) a material breach of this Agreement by the Company which is not remedied within twenty (20) days after receipt of written notice thereof given by Executive or (v) Executive is not the Executive Vice President and Chief Financial Officer of the Company.

6.3 Termination During a Change of Control. Notwithstanding Section 6.1 or 6.2, if within three months prior to or one year after a Change of Control (as defined below), Executive's employment is terminated by the Company (other than for Permanent Disability, death or Cause) or Executive resigns for Good Reason, Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which she is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for which Executive is entitled to reimbursement hereunder. If Executive is terminated or resigns under this Section 6.3, Executive shall also be entitled to receive:

(a) an amount (the "Section 6.3 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(ii) two times Executive's annual Base Salary; plus one and one half times Executive's Target Bonus payable in a lump sum within 30 days following such termination of employment; provided that if such termination or resignation occurs within 90 days prior to calendar year end, Executive shall have the option to defer payment, without interest, of the Section 6.3 Termination Amount to January 1 of the next year; and

6.4 Permanent Disability. If Executive is unable to engage in the activities required by Executive's job by reason of any medically determined physical or mental impairment which has lasted or can be expected to last for continuous period of not less than six (6) consecutive months ("Permanent Disability"), the Company or Executive may terminate Executive's employment on written notice thereof, and Executive shall receive or commence receiving, as soon as practicable:

(i) the actual bonus, if any, she would have received in respect of the fiscal year in which her termination occurs, prorated by a fraction, the numerator of which is the number of

days of the fiscal year until termination and the denominator of which is 365, payable at the same time as bonuses are paid to other executives; and

(ii) accrued but unpaid Base Salary and such payments under applicable plans or programs, including but not limited to those referred to in Sections 4.1, 4.2 and 5 hereof, to which she is entitled pursuant to the terms of such plans or programs.

6.5 Death. In the event of Executive's death during the Term, Executive's estate or designated beneficiaries shall receive or commence receiving, as soon as practicable:

(i) the actual bonus, if any, she would have received in respect of the fiscal year in which her death occurs, prorated by a fraction, the numerator of which is the number of days of the fiscal year until her death and the denominator of which is 365, payable at the same time as bonuses are paid to other executives; and

(ii) accrued but unpaid Base Salary and such payments under applicable plans or programs, including but not limited to those referred to in Sections 4.1, 4.2 and 5 hereof, to which Executive's estate or designated beneficiaries are entitled pursuant to the terms of such plans or programs.

6.6 Termination for Cause: Resignation by Executive.

(a) The Company shall have the right to terminate the employment of Executive for Cause. In the event that Executive's employment is terminated by the Company for Cause or by Executive for any reason (other than by Executive for Good Reason or as a result of Executive's Permanent Disability or death) during the Term, Executive shall not be entitled to the payment of any compensation otherwise included under this Agreement. After the termination of Executive's employment under this Section 6.6, the obligations of the Company under this Agreement to make any further payments, or provide any benefits specified herein, to Executive shall thereupon cease and terminate.

(b) As used herein, the term "Cause" shall be limited to (i) any willful breach of any material written policy of the Company which results in material and demonstrable liability or loss to the Company; (ii) the engaging by Executive in conduct involving moral turpitude that causes material and demonstrable injury, monetarily or otherwise, to the Company, including, but not limited to, misappropriation or conversion of assets of the Company (other than nonmaterial assets); (iii) conviction of or entry of a plea of nolo contendere to a felony; or (iv) a material breach of this Agreement by engaging in action in violation of the restrictive covenants in this Agreement. No act or failure to act by the Executive shall be deemed "willful" if done, or omitted to be done, by her in good faith and with the reasonable belief that her action or omission was in the best interest of the Company.

7. Indemnification. To the fullest extent permitted by the indemnification provisions of the articles of incorporation and bylaws of the Company in effect as of the date of this Agreement and the indemnification provisions of the corporation statute of the jurisdiction of the Company's incorporation in effect from time to time (collectively, the "Indemnification Provisions"), and in each case subject to the conditions thereof, the Company shall (i) indemnify Executive, as a director and officer of the Company or a subsidiary of the Company or a trustee or fiduciary of an employee benefit plan of the Company or a subsidiary of the Company, or, if Executive shall be serving in such capacity at the Company's written request, as a director or officer of any other corporation (other than a subsidiary of the Company) or as a trustee or fiduciary of an employee benefit plan not sponsored by the Company or a subsidiary of the Company, against all liabilities and reasonable expenses that may be incurred by Executive in any threatened, pending, or completed action, suit or proceeding, whether civil, criminal or administrative, or investigative and whether formal or informal, because Executive is or was a director or officer of the Company, a director or officer of such other corporation or a trustee or fiduciary of such employee benefit plan, and against which Executive may be indemnified by the Company, and (ii) pay for or reimburse the reasonable expenses incurred by Executive in the defense of any proceeding to

which Executive is a party because Executive is or was a director or officer of the Company, a director or officer of such other corporation or a trustee or fiduciary of such employee benefit plan. The rights of Executive under the Indemnification Provisions shall survive the termination of the employment of Executive by the Company.

8. Notices. All notices or communications hereunder shall be in writing, addressed as follows:

To the Company:

Regal Entertainment Group
c/o Regal Cinemas Corporation
7132 Mike Campbell Drive
Knoxville, TN 37918
Attn: Peter B. Brandow, Esq., General Counsel

with copies to:

Anschutz Investment Company
555 Seventeenth Street, Suite 2400
Denver, CO 80202
Attn: Craig D. Slater, President

To Executive:

Ms. Amy E. Miles
1603 Peppertree Drive
Alcoa, TN 37701

Any such notice or communication shall be delivered by hand or by courier or sent certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such other address as such party may designate in a notice duly delivered as described above), and the third business day after the actual date of mailing shall constitute the time at which notice was given.

10. Assignment. This contract shall be binding upon and inure to the benefit of the heirs and representatives of Executive and the assigns and successors of the Company, but neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise subject to hypothecation by Executive (except by will or by operation of the laws of intestate succession) or by the Company, except that the Company may assign this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially all of the stock, assets or businesses of the Company, if such successor expressly agrees to assume the obligations of the Company hereunder.

11. Amendment. This Agreement may only be amended by written agreement of the parties hereto.

12. Nondisclosure of Confidential Information; Non-competition.

other non-public, proprietary and confidential information of the Company, its subsidiaries, its theater affiliates (the "Restricted Group") or suppliers (including, without limitation, any motion picture distributor or exhibitor) or vendors, that, in any case, is not otherwise available to the public (other than by Executive breach of the terms hereof).

(b) During the period of her employment hereunder and for one year thereafter (except in the case where Executive terminates her employment with the Company for the Good Reason event described in clause (v) of the definition of "Good Reason"), Executive agrees that, without the prior written consent of the Company, (A) she will not, directly or indirectly, either as principal, manager, agent, consultant, officer, stockholder, partner, investor, lender or employee or in any other capacity, carry on, be engaged in or have any financial interest in, any business in Competition (as defined in Section 12(c)) with the business of the Restricted Group and (B) she shall not, on her own behalf or on behalf of any person, firm or company, directly or indirectly, solicit or hire for the benefit of anyone, other than the Restricted Group, any person who is, or was at any time during the six (6) months immediately preceding the time of the solicitation or hiring by Executive employed by the Restricted Group (other than Executive's secretary or other administrative employee who worked directly for her).

(c) For purposes of this Section 12, a business shall be deemed to be in "Competition" with the Restricted Group if it operates any first-run movie theater with a minimum of six (6) screens within ten (10) miles of any first-run movie theater with a minimum of six (6) screens operated by a member of the Restricted Group. Nothing in this Section 12 shall be construed so as to preclude Executive from investing in any publicly or privately held company, provided Executive's beneficial ownership of any class of such company's securities does not exceed 1% of the outstanding securities of such class.

(d) Executive and the Company agree that this covenant not to compete is a reasonable covenant under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction such restraint is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this covenant as to the court shall appear not reasonable and to enforce the remainder of the covenant as so amended. Executive agrees that any breach of the covenants contained in this Section 12 would irreparably injure the Company. Accordingly, Executive agrees that the Company may, in addition to pursuing any other remedies it may have in law or in equity, obtain an injunction against Executive from any court having jurisdiction over the matter restraining any further violation of this Agreement by Executive and cease making any payments otherwise required by this Agreement; provided, however, that in the event a court of competent jurisdiction, which recognizes the validity of the provisions of this Section 12, finds Executive not to be in violation of the provisions of this Section 12, then the Company shall pay to Executive, in a lump sum, within ten days of such determination, all amounts that would have been payable to Executive hereunder through the date of such determination and continue making any other payments due with respect to periods of time subsequent to such determination in accordance with the provisions of this Agreement.

13. Beneficiaries; References. Executive shall be entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive's death, and may change such election, in either case by giving the Company written notice thereof. In the event of Executive's death or a judicial determination of her incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to her beneficiary, estate or other legal representative, and the Company shall pay amounts payable under this Agreement, unless otherwise provided herein, in accordance with the terms of this Agreement, to Executive's personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees or estate, as the case may be. Any reference to the feminine gender in this Agreement shall include, where appropriate, the masculine.

15. Governing Law. This Agreement shall be construed, interpreted and governed in accordance with the laws of the state of Colorado, without reference to rules relating to conflicts of law.

17. Withholding. The Company shall be entitled to withhold from payment any amount of withholding required by law.

18. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original.

* * * *

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the first paragraph.

REGAL ENTERTAINMENT GROUP

By:	/s/ MICHAEL L. CAMPBELL
	Name:	Michael L. Campbell
	Title:	Co-Chief Executive Officer and Vice Chairman

EXECUTIVE

/s/ AMY E. MILES
Amy E. Miles

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EXHIBIT 10.6

EX-10.7 14 a2078602zex-10_7.htm EXHIBIT 10.7
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EXHIBIT 10.7

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT is made as of May 3, 2002 (this "Agreement") by and between Regal Entertainment Group, a Delaware corporation (the "Company"), and Gregory W. Dunn ("Executive").

RECITALS

In order to induce Executive to serve as Executive Vice President and Chief Operating Officer of the Company and as the President and Chief Operating Officer of the Company's subsidiary, Regal Cinemas Corporation, the Company desires to provide Executive with compensation and other benefits on the terms and conditions set forth in this Agreement.

Executive is willing to accept such employment and perform services for the Company, on the terms and conditions hereinafter set forth.

It is therefore hereby agreed by and between the parties as follows:

1. Employment.

1.1 Position. Subject to the terms and conditions of this Agreement, the Company agrees to employ Executive during the Term (as defined herein) as its Executive Vice President and Chief Operating Officer. In his capacity as the Executive Vice President and Chief Operating Officer of the Company, Executive shall have the powers, responsibilities and authorities of chief operating officers of corporations of the size, type and nature of the Company, as it exists from time to time, as are assigned by the Co-Chief Executive Officers consistent with Executive's position. In his capacity as President and Chief Operating Officer of the Company's subsidiary, Regal Cinemas Corporation, Executive shall report to the Chief Executive Officer of Regal Cinemas Corporation and shall have the powers, responsibilities and authorities of chief operating officers of corporations of the size, type and nature of Regal Cinemas Corporation, as it exists from time to time, as are assigned by the Chief Executive Officer of Regal Cinemas Corporation consistent with Executive's position. At the request of the Company, Executive will serve as an officer and/or director of any of the Company's other subsidiaries for no additional compensation.

1.2 Duties. Subject to the terms and conditions of this Agreement, Executive hereby agrees to be employed as the Executive Vice President and Chief Operating Officer of the Company and as the President and Chief Operating Officer of Regal Cinemas Corporation, and agrees to devote such working time and efforts (except for permitted vacation periods and reasonable periods of illness and other incapacity), to the best of his ability, experience and talent, to the performance of services, duties and responsibilities in connection therewith so that such performance shall be his primary business activity. Executive shall perform such duties and exercise such powers with respect to the activities of the Company, commensurate with his position, as the Executive Vice President and Chief Operating Officer of the Company, as the Co-Chief Executive Officers shall from time to time reasonably delegate to him.

2. Term.

3. Compensation.

3.1 Salary. The Company shall pay Executive a base salary ("Base Salary") at the rate of $377,169 per annum commencing on the beginning of Executive's term of employment hereunder. Base Salary shall be payable in accordance with the ordinary payroll practices of the Company. The Compensation Committee of the Board of Directors of the Company will review Executive's salary at least annually and may increase (but not reduce) Executive's Base Salary in its sole discretion. Once increased such Base Salary shall not be reduced, and, as so increased, shall constitute "Base Salary" hereunder.

3.2 Annual Bonus. In addition to his Base Salary, Executive shall, commencing with the 2002 fiscal year and continuing each fiscal year thereafter, be afforded a reasonable opportunity to earn an annual cash bonus (the "Bonus") during the Term. In determining Executive's bonus, Executive's target bonus shall be at least 75% of Base Salary (the "Target Bonus") and Executive's stretch bonus shall be at least 100% of Base Salary. For 2002, Executive's Bonus shall be calculated in accordance with the Company's 2002 Bonus Plan as adopted by the Board. After 2002, the Compensation Committee, after consultation with management, will in the last quarter of each year establish a reasonable performance target for the Company's bonus plan for the next year based on the actual and projected performance of the Company.

4. Employee Benefits.

6. Termination of Employment.

6.1 Termination Without Cause. Except as provided in Section 6.3, if Executive's employment is terminated by the Company (other than for Permanent Disability, death or Cause),

Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which he is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for which Executive is entitled to reimbursement hereunder. If Executive is terminated under this Section 6.1, Executive shall also be entitled to receive:

(a) an amount in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

(ii) two times Executive's annual Base Salary; payable in installments as normal payroll over the 24 months following such termination of employment; and

(a) an amount (the "Section 6.2 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

Executive's titles, offices, positions or authority, excluding for this purpose an action not taken in bad faith and which is remedied within twenty (20) days after receipt of written notice thereof given by Executive; or the assignment to Executive of any duties inconsistent with Executive's position (including status or reporting requirements), authority, or material responsibilities, or the removal of Executive's authority or material responsibilities, excluding for this purpose an action not taken in bad faith and which is remedied by the Company within twenty (20) days after receipt of notice thereof given by Executive, (iii) a transfer of Executive's primary workplace by more than fifty (50) miles from the current workplace, (iv) a material breach of this Agreement by the Company which is not remedied within twenty (20) days after receipt of written notice thereof given by Executive, (v) Executive is not the President and Chief Operating Officer of Regal Cinemas Corporation or (vi) Executive is not the Executive Vice President and Chief Operating Officer of the Company.

6.3 Termination During a Change of Control. Notwithstanding Section 6.1 or 6.2, if within three months prior to or one year after a Change of Control (as defined below), Executive's employment is terminated by the Company (other than for Permanent Disability, death or Cause) or Executive resigns for Good Reason, Executive shall receive such payments, if any, under applicable plans or programs, including but not limited to those referred to in Section 4.1 hereof, to which he is entitled pursuant to the terms of such plans or programs, and any unpaid payments of Base Salary previously earned, any unpaid Bonus earned or awarded for prior periods, accrued vacation and expense incurred for which Executive is entitled to reimbursement hereunder. If Executive is terminated or resigns under this Section 6.3, Executive shall also be entitled to receive:

(a) an amount (the "Section 6.3 Termination Amount") in lieu of any other cash compensation beyond that provided in the immediately preceding sentence, which amount shall be equal to the sum of:

("Permanent Disability"), the Company or Executive may terminate Executive's employment on written notice thereof, and Executive shall receive or commence receiving, as soon as practicable:

(i) the actual bonus, if any, he would have received in respect of the fiscal year in which his termination occurs, prorated by a fraction, the numerator of which is the number of days of the fiscal year until termination and the denominator of which is 365, payable at the same time as bonuses are paid to other executives; and

6.5 Death. In the event of Executive's death during the Term, Executive's estate or designated beneficiaries shall receive or commence receiving, as soon as practicable:

(ii) accrued but unpaid Base Salary and such payments under applicable plans or programs, including but not limited to those referred to in Sections 4.1, 4.2 and 5 hereof, to which Executive's estate or designated beneficiaries are entitled pursuant to the terms of such plans or programs.

6.6 Termination for Cause: Resignation by Executive.

(a) The Company shall have the right to terminate the employment of Executive for Cause. In the event that Executive's employment is terminated by the Company for Cause or by Executive for any reason (other than by Executive for Good Reason or as a result of Executive's Permanent Disability or death) during the Term, Executive shall not be entitled to the payment of any compensation otherwise included under this Agreement. After the termination of Executive's employment under this Section 6.6, the obligations of the Company under this Agreement to make any further payments, or provide any benefits specified herein, to Executive shall thereupon cease and terminate.

(b) As used herein, the term "Cause" shall be limited to (i) any willful breach of any material written policy of the Company that results in material and demonstrable liability or loss to the Company; (ii) the engaging by Executive in conduct involving moral turpitude that causes material and demonstrable injury, monetarily or otherwise, to the Company, including, but not limited to, misappropriation or conversion of assets of the Company (other than immaterial assets); (iii) conviction of or entry of a plea of nolo contendere to a felony; or (iv) a material breach of this Agreement by engaging in action in violation of the restrictive covenants in this Agreement. No act or failure to act by Executive shall be deemed "willful" if done, or omitted to be done, by his in good faith and with the reasonable belief that his action or omission was in the best interest of the Company.

administrative, or investigative and whether formal or informal, because Executive is or was a director or officer of the Company, a director or officer of such other corporation or a trustee or fiduciary of such employee benefit plan, and against which Executive may be indemnified by the Company, and (ii) pay for or reimburse the reasonable expenses incurred by Executive in the defense of any proceeding to which Executive is a party because Executive is or was a director or officer of the Company, a director or officer of such other corporation or a trustee or fiduciary of such employee benefit plan. The rights of Executive under the Indemnification Provisions shall survive the termination of the employment of Executive by the Company.

8. Notices. All notices or communications hereunder shall be in writing, addressed as follows:

To the Company:

Regal Entertainment Group
c/o Regal Cinemas Corporation
7132 Mike Campbell Drive
Knoxville, TN 37918
Attn: Peter B. Brandow, Esq., General Counsel

with copies to:

Anschutz Investment Company
555 Seventeenth Street, Suite 2400
Denver, CO 80202
Attn: Craig D. Slater, President

To Executive:

Mr. Gregory W. Dunn
7809 Eden Lane
Knoxville, TN 37938

Any such notice or communication shall be delivered by hand or by courier or sent certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such other address as such party may designate in a notice duly delivered as described above), and the third business day after the actual date of mailing shall constitute the time at which notice was given.

11. Amendment. This Agreement may only be amended by written agreement of the parties hereto.

12. Nondisclosure of Confidential Information; Non-competition.

(ii) as required by law. For purposes of this Section 12(a), "Confidential Information" shall mean non-public information concerning the financial data, strategic business plans, product development (or other proprietary product data), customer lists, marketing, acquisition and divestiture plans and other non-public, proprietary and confidential information of the Company, its subsidiaries, its theater affiliates (the "Restricted Group") or suppliers (including, without limitation, any motion picture distributor or exhibitor) or vendors, that, in any case, is not otherwise available to the public (other than by Executive breach of the terms hereof).

(b) During the period of his employment hereunder and for one year thereafter (except in the case where Executive terminates his employment with the Company for the Good Reason event described in clause (v) of the definition of "Good Reason"), Executive agrees that, without the prior written consent of the Company, (A) he will not, directly or indirectly, either as principal, manager, agent, consultant, officer, stockholder, partner, investor, lender or employee or in any other capacity, carry on, be engaged in or have any financial interest in, any business in Competition (as defined in Section 12(c)) with the business of the Restricted Group and (B) he shall not, on his own behalf or on behalf of any person, firm or company, directly or indirectly, solicit or hire for the benefit of anyone, other than the Restricted Group, any person who is, or was at any time during the six (6) months immediately preceding the time of the solicitation or hiring by Executive employed by the Restricted Group (other than Executive's secretary or other administrative employee who worked directly for him).

(d) Executive and the Company agree that this covenant not to compete is a reasonable covenant under the circumstances, and further agree that if in the opinion of any court of competent jurisdiction such restraint is not reasonable in any respect, such court shall have the right, power and authority to excise or modify such provision or provisions of this covenant as to the court shall appear not reasonable and to enforce the remainder of the covenant as so amended. Executive agrees that any breach of the covenants contained in this Section 12 would irreparably injure the Company. Accordingly, Executive agrees that the Company may, in addition to pursuing any other remedies it may have in law or in equity, obtain an injunction against Executive from any court having jurisdiction over the matter restraining any further violation of this Agreement by Executive and cease making any payments otherwise required by this Agreement; provided, however, that in the event a court of competent jurisdiction, which recognizes the validity of the provisions of this Section 12, finds Executive not to be in violation of the provisions of this Section 12, then the Company shall pay to Executive, in a lump sum, within ten days of such determination, all amounts that would have been payable to Executive hereunder through the date of such determination and continue making any other payments due with respect to periods of time subsequent to such determination in accordance with the provisions of this Agreement.

13. Beneficiaries; References. Executive shall be entitled to select (and change, to the extent permitted under any applicable law) a beneficiary or beneficiaries to receive any compensation or benefit payable hereunder following Executive's death, and may change such election, in either case by giving the Company written notice thereof. In the event of Executive's death or a judicial determination of his incompetence, reference in this Agreement to Executive shall be deemed, where appropriate, to refer to his beneficiary, estate or other legal representative, and the Company shall pay amounts payable under this Agreement, unless otherwise provided herein, in accordance with the terms of this Agreement, to Executive's personal or legal representatives, executors, administrators, heirs,

distributees, devisees, legatees or estate, as the case may be. Any reference to the masculine gender in this Agreement shall include, where appropriate, the feminine.

15. Governing Law. This Agreement shall be construed, interpreted and governed in accordance with the laws of the state of Colorado, without reference to rules relating to conflicts of law.

17. Withholding. The Company shall be entitled to withhold from payment any amount of withholding required by law.

18. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original.

* * * *

[Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the first paragraph.

REGAL ENTERTAINMENT GROUP

By:	/s/ MICHAEL L. CAMPBELL
	Name:	Michael L. Campbell
	Title:	Co-Chief Executive Officer and Vice Chairman

EXECUTIVE

/s/ GREGORY W. DUNN
Gregory W. Dunn

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EXHIBIT 10.7

EX-23.1 15 a2078602zex-23_1.htm EXHIBIT 23.1
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Exhibit 23.1

CONSENT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholder
Anschutz Company:

We consent to the use of our report dated March 8, 2002, with respect to the combined balance sheets of Regal Entertainment Group (a combination of certain theatre interests of Anschutz, see note 1) as of January 3, 2002, and the related combined statements of operations, parent's investment and cash flows for the periods under common control then ended included herein and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

Denver, Colorado
May 2, 2002

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Exhibit 23.1

EX-23.2 16 a2078602zex-23_2.htm EXHIBIT 23.2
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Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTS

The Board of Directors
United Artists Theatre Company:

We consent to the use of our report dated February 8, 2002, with respect to the consolidated balance sheets of United Artists Theatre Company ("Reorganized Company") as of January 3, 2002 and of United Artists Theatre Company ("Predecessor Company") as of December 28, 2000, and the related consolidated statements of operations, stockholders' equity (deficit) and comprehensive income and cash flows for the forty-four weeks ended January 3, 2002 (Reorganized Period) and for the nine weeks ended March 1, 2001 and for the year ended December 28, 2000 (Predecessor Periods) included herein and to the reference to our firm under the heading "Experts" in the prospectus.

The report of KPMG LLP contains an explanatory paragraph that states that effective March 1, 2001, United Artists Theatre Company emerged from protection under Chapter 11 of the U.S. Bankruptcy Code pursuant to a reorganization plan, which was confirmed by the Bankruptcy Court on January 22, 2001. In accordance with AICPA Statement of Position 90-7, the Company adopted fresh start reporting whereby its assets, liabilities and new capital structure were adjusted to reflect estimated fair values as of March 1, 2001. As a result, the consolidated financial statements for the periods subsequent to March 1, 2001 reflect the Reorganized Company's new basis of accounting and are not comparable to the Predecessor Company's pre-reorganization consolidated financial statements.

/s/ KPMG LLP

Denver, Colorado
May 2, 2002

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Exhibit 23.2

EX-23.3 17 a2078602zex-23_3.htm EXHIBIT 23.3
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Exhibit 23.3

INDEPENDENT AUDITORS' CONSENT

The Board of Directors
Edwards Theatres, Inc. and Subsidiaries:

We consent to the use of our report dated February 22, 2002, except as to Note 16 which is as of April 17, 2002, with respect to the consolidated balance sheets of Edwards Theatres, Inc. and Subsidiaries as of December 27, 2001 and December 26, 2000 and the related consolidated statements of operations and comprehensive loss, stockholders' equity and cash flows for each of the years in the three-year period ended December 27, 2001, included herein and to the reference to our firm under the heading "Experts" in the prospectus.

/s/ KPMG LLP

Orange County, California
May 2, 2002

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Exhibit 23.3

EX-23.4 18 a2078602zex-23_4.htm EXHIBIT 23.4
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EXHIBIT 23.4

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 2 to Registration Statement No. 333-84096 of Regal Entertainment Group of our report on the consolidated financial statements of Regal Cinemas, Inc. dated February 15, 2002 except for Note 2, as to which the date is March 8, 2002 (which report expresses an unqualified opinion and includes an explanatory paragraph referring to Regal Cinemas, Inc.'s voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code and subsequent acquisition), appearing in the Prospectus, which is part of this Registration Statement.

We also consent to the reference to us under the headings "Selected Historical Financial and Other Data for Regal Cinemas, Inc." and "Experts" in such Prospectus.

/s/ DELOITTE & TOUCHE LLP

Nashville, Tennessee
May 6, 2002

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EXHIBIT 23.4

EX-23.5 19 a2078602zex-23_5.htm EXHIBIT 23.5
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EXHIBIT 23.5

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report (and to all references to our Firm) included in or made a part of this registration statement.

/s/ ARTHUR ANDERSEN LLP

Denver, Colorado
May 5, 2002.

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EXHIBIT 23.5

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/s/ MICHAEL L. CAMPBELL

Michael L. Campbell
ATTORNEY-IN-FACT

/s/ KURT C. HALL

Kurt C. Hall
ATTORNEY-IN-FACT