DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Regal Cinemas has entered into hedging relationships via interest rate swap agreements to hedge against interest rate exposure of its variable rate debt obligations under Regal Cinemas' Amended Senior Credit Facility. Certain of these interest rate swaps qualify for cash flow hedge accounting treatment and as such, the change in the fair values of the interest rate swaps is recorded on the Company's consolidated balance sheet as an asset or liability with the effective portion of the interest rate swaps' gains or losses reported as a component of other comprehensive income and the ineffective portion reported in earnings. As interest expense is accrued on the debt obligation, amounts in accumulated other comprehensive income/loss related to the interest rate swaps will be reclassified into earnings. In the event that an interest rate swap is terminated or de-designated prior to maturity, gains or losses accumulated in other comprehensive income or loss remain deferred and are reclassified into earnings in the periods during which the hedged forecasted transaction affects earnings. See Note 14—"Fair Value of Financial Instruments" for discussion of the Company’s interest rate swaps’ fair value estimation methods and assumptions.

Below is a summary of Regal Cinemas' current interest rate swap agreements as of December 31, 2015:

Nominal Amount	Effective Date	Fixed Rate	Receive Rate	Expiration Date	Designated as Cash Flow Hedge	Gross Fair Value at December 31, 2015	Balance Sheet Location
$150.0 million	April 2, 2015	1.220%	1-month LIBOR*	December 31, 2016	Yes	$0.5 million	See Note 14
$200.0 million	June 30, 2015	2.165%	1-month LIBOR*	June 30, 2018	Yes	$4.5 million	See Note 14

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* Subject to a 0.75% LIBOR floor

On April 2, 2015, Regal Cinemas amended two of its existing interest rate swap agreements originally designated as cash flow hedges on $350.0 million of variable rate debt obligations. Since the terms of the interest rate swaps designated in the original cash flow hedge relationships changed with these amendments, we de-designated the original hedge relationships and re-designated the amended interest rate swaps in new cash flow hedge relationships as of the amendment date of April 2, 2015.

No amendments or modifications were made to two existing interest swap agreements (originally designated to hedge $300.0 million of variable rate debt obligations). Since such interest rate swaps no longer met the highly effective qualification for cash flow hedge accounting, the two hedge relationships were de-designated effective April 2, 2015. Accordingly, since the interest rate swaps no longer qualified for cash flow hedge accounting treatment, the change in their fair values since de-designation have been recorded on the Company’s consolidated balance sheet as an asset or liability with the interest rate swaps’ gains or losses reported as a component of interest expense during the period of change. On June 30, 2015, one of these interest rate swap agreements designated to hedge $200.0 million of variable rate debt obligations expired. The remaining interest rate swap agreement (designated to hedge $100.0 million of variable rate debt obligations) expired on December 31, 2015.

The following tables show the effective portion of gains and losses on derivative instruments designated and qualifying in cash flow hedges recognized in other comprehensive income (loss), and amounts reclassified from accumulated other comprehensive loss to interest expense for the periods indicated (in millions):

	After-tax Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)
	Year Ended December 31, 2015			Year Ended January 1, 2015			Year Ended December 26, 2013
Derivatives designated as cash flow hedges:
Interest rate swaps	$	(4.3	)	$	(2.1	)	$	(0.2	)

	Pre-tax Amounts Reclassified from Accumulated Other Comprehensive Loss into Interest Expense, net
	Year Ended December 31, 2015		Year Ended January 1, 2015		Year Ended December 26, 2013
Derivatives designated as cash flow hedges:
Interest rate swaps(1)	$	7.4	$	5.2	$	4.2

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(1) We estimate that $2.4 million of deferred pre-tax losses attributable to these interest rate swaps will be reclassified into earnings as interest expense during the next 12 months as the underlying hedged transactions occur.

The changes in accumulated other comprehensive loss, net associated with the Company’s interest rate swap arrangements for the years ended December 31, 2015, January 1, 2015, and December 26, 2013 were as follows (in millions):

	Interest Rate Swaps
	Year Ended December 31, 2015			Year Ended January 1, 2015			Year Ended December 26, 2013
Accumulated other comprehensive loss, net, beginning of period	$	(2.9	)	$	(4.0	)	$	(6.3	)
Change in fair value of interest rate swap transactions (effective portion), net of taxes of $2.8, $1.3, and $0.1 respectively	(4.3		)	(2.1		)	(0.2		)
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of taxes of ($2.9), ($2.0) and ($1.7), respectively	4.5			3.2			2.5
Accumulated other comprehensive loss, net, end of period	$	(2.7	)	$	(2.9	)	$	(4.0	)

The following table sets forth the effect of our interest rate swap arrangements on our consolidated statements of income for the years ended December 31, 2015, January 1, 2015, and December 26, 2013 (in millions):

	Pre-tax Gain (Loss) Recognized in Interest Expense, net
	Year Ended December 31, 2015		Year Ended January 1, 2015		Year Ended December 26, 2013
Derivatives designated as cash flow hedges (ineffective portion):
Interest rate swaps(1)	$	1.9	$	—	$	—
Derivatives not designated as cash flow hedges:
Interest rate swaps (2)	$	1.5	$	—	$	—

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(1) Amounts represent the ineffective portion of the change in fair value of the hedging derivatives and are recorded as a reduction of interest expense in the consolidated financial statements.

(2) Amounts represent the change in fair value of the former hedging derivatives and are recorded as a reduction of interest expense in the consolidated financial statements.