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SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549

FORM 10−K

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

For the fiscal year ended December 26, 2002

Commission file number: 001−31315

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

Delaware 02−0556934 (State or Other Jurisdiction of (Internal Revenue Service Incorporation or Organization) Employer Identification Number)

9110 East Nichols Avenue, 80112 Suite 200 (Zip Code) Centennial, CO (Address of Principal Executive Offices)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange on which registered

Class A Common Stock, $.001 par value New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S−K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10−K or any amendment to this Form 10−K.

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b−2). Yes No

The aggregate market value of the voting and non−voting common equity held by non−affiliates of the registrant on June 27, 2002, computed by reference to the closing price for such stock on the New York Stock Exchange on such date, was $511,488,969 (22,248,324 shares at a closing price per share of $22.99).

Shares of Class A common stock outstanding—46,765,646 shares at March 20, 2003 Shares of Class B common stock outstanding—85,287,957 shares at March 20, 2003

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's definitive proxy statement to be used in connection with its 2003 Annual Meeting of Stockholders and to be filed within 120 days of December 26, 2002 are incorporated by reference into Part III, Items 10−13, of this report on Form 10−K.

TABLE OF CONTENTS

PART I Item 1. Business The Company Description of Business Recent Developments Industry Overview Industry Trends Theatre Operations Regal CineMedia Operations Film Distribution Film Licensing Concessions Competition Marketing and Advertising Management Information Systems Seasonality Employees Regulation Item 2. Properties Item 3. Legal Proceedings Item 4. Submission of Matters to a Vote of Security Holders Executive Officers of the Registrant

PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters Item 6. Selected Financial Data Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Overview Critical Accounting Policies Basis of Presentation Results of Operations for the Fiscal Year Ended December 26, 2002 and the Period Ended January 3, 2002 Liquidity and Capital Resources Contractual Obligations and Commitments Quarterly Results Inflation Seasonality Results of Operations for Fiscal 2001 and 2000—United Artists Recent Accounting Pronouncements Risk Factors Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Financial Statements and Supplementary Data Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

PART III Item 10. Directors and Executive Officers of the Registrant Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13. Certain Relationships and Related Transactions Item 14. Controls and Procedures

PART IV Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8−K

REGAL ENTERTAINMENT GROUP

PART I

The information in this Form 10−K contains certain forward−looking statements, including statements related to trends in the Company's business. The Company's actual results may differ materially from the results discussed in the forward−looking statements. Factors that might cause such a difference include those discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors" and "Business" as well as those discussed elsewhere in this Form 10−K.

Item 1. BUSINESS

THE COMPANY

Regal Entertainment Group, a Delaware corporation organized on March 6, 2002 ("we," "us," "our," the "Company" or "Regal"), is the parent company of Regal Entertainment Holdings, Inc. ("REH"), which is the parent company of Regal Cinemas Corporation ("Regal Cinemas") and its subsidiaries and United Artists Theatre Company ("United Artists") and its subsidiaries. Regal Cinemas' subsidiaries include Regal Cinemas, Inc. and its subsidiaries, which include Edwards Theatres, Inc. ("Edwards") and Regal CineMedia Corporation ("Regal CineMedia"). The terms Regal Cinemas, United Artists, Edwards and Regal CineMedia shall be deemed to include the respective subsidiaries of such entities when used in discussions included herein regarding the current operations or assets of such entities.

Regal acquired Regal Cinemas, United Artists, Edwards and Regal CineMedia through a series of transactions on April 12, 2002. For a detailed discussion of the transactions resulting in Regal's acquisition of its subsidiaries, please see Note 1 to the financial statements included in Part II, Item 8, of this Form 10−K, which is incorporated herein by reference. Each of the theatre circuits operated by Regal Cinemas, United Artists and Edwards emerged from bankruptcy reorganization under Chapter 11 of Title 11 of the United States Code prior to Regal's acquisition of such entities. For a detailed discussion of these bankruptcy proceedings, please see Note 3 to such financial statements, which is incorporated herein by reference. The Company manages its business under one reportable segment—theatre exhibition operations.

DESCRIPTION OF BUSINESS

Overview

Regal operates the largest and most geographically diverse theatre circuit in the United States, consisting of 5,663 screens in 524 theatres in 36 states as of December 26, 2002, with over 250 million annual attendees. Regal operates approximately 16% of all screens in the United States. The Company's geographically diverse circuit includes theatres in 9 of the top 10 and 41 of the top 50 U.S. demographic market areas, which includes locations in suburban growth areas. The Company primarily operates multi−screen theatres and has an average of 10.8 screens per location, which is well above the 2002 average of 5.8 screens per location for the North American motion picture exhibition industry. The Company develops, acquires and operates multi−screen theatres primarily in mid−sized metropolitan markets and suburban growth areas of larger metropolitan markets throughout the U.S. The Company seeks to locate each theatre where it will be the sole or leading exhibitor within a particular geographic film−licensing zone. Management believes that at December 26, 2002, approximately 83% of the Company's screens were located in film licensing zones in which the Company was the sole exhibitor. Regal CineMedia was formed during 2002 to focus exclusively on the expansion of ancillary businesses, such as advertising, and the creation of new complementary business lines that leverage the Company's existing asset and customer bases. The Company believes the size, reach and quality of its theatre circuit provide an exceptional platform to realize economies of scale in its theatre operations and capitalize on Regal CineMedia's ancillary revenue opportunities.

The Company has achieved growth in revenues and income from operations before depreciation and amortization expense, merger and restructuring expenses, and gain/loss on disposal and impairment of operating assets ("EBITDA"). As a result of the Company's focus on enhancing revenues, operating efficiently, strictly controlling theatre−level costs and successfully integrating accretive acquisitions, the Company has achieved what management believes are among the highest EBITDA margins in the domestic motion picture exhibition industry. EBITDA was approximately $443.4 million, or 20.7% of total revenues, for the year ended December 26, 2002. We believe that EBITDA provides a useful measure of cash flows from operations for our investors because EBITDA is an industry comparative measure of cash flows generated by our operations prior to the payment of interest and taxes and because it is a primary financial measure used by management to assess the performance of our Company. The Company's definition of EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America and should not be considered in isolation or construed as a substitute for net income or other operations data or cash flow data prepared in accordance with accounting principles generally accepted in the United States of America for purposes of analyzing our profitability or liquidity. In addition, not all funds depicted by EBITDA are available for management's discretionary use. For example, a portion of such funds are subject to contractual restrictions and functional requirements to pay debt service, fund necessary capital expenditures and meet other commitments from time to time as described in more detail herein. EBITDA, as defined by the Company, may not be comparable to similarly titled measures reported by other companies. For fiscal 2002, the Company reported total revenues, operating income and net income of $2,140.2 million, $283.6 million and $117.2 million, respectively. In addition, the Company generated $373.2 million of cash flows from operations. Please see Part II, Item 7, of this Form 10−K, under the caption "Results of Operations for Regal for the fiscal year ended December 26, 2002 and period ended January 3, 2002" for a tabular reconciliation of EBITDA to operating income.

Business Strategy

Our business strategy is to continue to enhance our leading position in the motion picture exhibition industry and to create incremental revenue growth and opportunities through Regal CineMedia. Key elements of our strategy include:

Enhancing Operating Efficiencies. We intend to generate operating margins that are among the highest in the industry by continuously attempting to improve our operating efficiency. By combining the operations of Regal Cinemas, United Artists and Edwards, we believe we have taken an important step toward improving our operating efficiency by creating economies of scale and eliminating corporate redundancy. We believe we can further 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, such as the Hoyts Cinemas Corporation acquisition described below under "Recent Developments", 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 are generating additional revenue growth by deploying the equipment necessary to create our Digital Content Network ("DCN"), the largest digital video and communications network among domestic exhibitors. We intend to use the DCN to generate additional revenue from on−screen and in−lobby advertising, the distribution of entertainment, sports, music and other digital content and corporate communications services, conferencing, product introductions and distance learning. We believe the technical capabilities and reach of the DCN will enhance our advertising and promotions business by providing a more efficient purchasing process for advertisers and by streamlining the delivery of advertising, thus allowing for more targeted marketing. Additionally, by providing high quality pre−show programs and improved projection and sound capabilities, the DCN will provide a better entertainment experience for our patrons. The DCN 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 and from the distribution of alternative digital programming in the sports, music, entertainment, and educational categories.

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 in prime locations. We have combined the capital spending programs of Regal Cinemas, United Artists and Edwards 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.

Competitive Strengths We believe that the following competitive strengths position the Company to capitalize on future growth opportunities:

Industry Leader. We are the largest domestic motion picture exhibitor with nearly twice as many screens as our nearest competitor. We operate 5,663 screens in 524 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 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. 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 an efficient purchasing and distribution supply chain that generates favorable concession margins. At the theatre level, management devotes 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. For fiscal 2002, the Company generated an EBITDA margin of 20.7% and EBITDA per screen of approximately $78,300. For fiscal 2002, the Company reported total revenues, operating income and net income of $2,140.2 million, $283.6 million and $117.2 million, respectively. In addition, the Company generated $373.2 million of cash flows from operations. Please see Part II, Item 7, of this Form 10−K, under the caption "Results of Operations for Regal for the fiscal year ended December 26, 2002 and period ended January 3, 2002" for a tabular reconciliation of EBITDA to operating income.

Healthy Balance Sheet and Strong Cash Flow Generation. We believe that we have one of the most conservative capital structures among reporting motion pictures exhibitors with stockholders' equity of $1,270.8 million as of December 26, 2002. As of December 26, 2002, we had a ratio of net debt to EBITDA of 0.91. Regal Cinemas, Inc., United Artists and Edwards have invested approximately $1.9 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 in the near term to maintain our operations in excess of those included in our capital spending programs. By combining our capital structure with our operating margins and 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 13 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 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. The reorganization process did, however, result in significant claims being asserted against Edwards and Regal Cinemas, Inc., which we continue to address. Several of those claims may result in significant payments to the claimants. At December 26, 2002, the Company had accrued approximately $23.6 million for the estimated costs to resolve these bankruptcy claims. To the extent these claims are allowed, they will be funded with cash on hand, cash flow from operations or borrowings under Regal Cinemas' revolving credit facility. In addition to these sources of funding, with respect to allowed Edwards claims, they may also be funded from restricted cash that has been set aside, and, if the allowed Edwards claims exceed $55 million, from contributions by The Anschutz Corporation and its subsidiaries ("Anschutz") and OCM Principal Opportunities Fund II, L.P. and its subsidiaries ("Oaktree's Principal Activities Group"). The timing of payment on these claims will depend upon the resolution of these claims.

Quality Theatre Portfolio. Regal Cinemas, Inc., United Artists and Edwards have invested approximately $1.9 billion in capital expenditures since 1997. As a result, we believe that we operate one of the most modern theatre circuits among major motion picture exhibitors. Approximately 61% of our screens are located in theatres featuring stadium seating. Approximately 76% of our screens are located in theatres with 10 or more screens. Our theatres have an average of 10.8 screens per location, which is well above the 2002 average of 5.8 screens per location for the North American motion picture exhibition industry.

Leading Access to First−Run Films. Approximately 83% 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 are the largest and most geographically diverse theatre circuit in the nation with over 250 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 our asset base, when combined with our DCN, provides an attractive platform for advertisers and entertainment, sports, music and other content providers to reach a desirable customer base and for businesses to use for corporate communications services, conferencing, product introductions, and distance learning. We believe we will be able to generate additional revenues from digital on−screen and in−lobby advertising, the distribution of entertainment, sports, music and other digital content, and by providing corporate communications services. Our subsidiary, Regal CineMedia, focuses exclusively on leveraging our theatre assets with digital distribution and projection and other new technology to increase our revenues from these complementary lines of business.

Dividend Policy

We believe that paying dividends on our shares of common stock is important to our stockholders and differentiates us from our competitors. To that end, the Company paid on December 13, 2002 our first cash dividend of $0.15 per share of Class A and Class B common stock, or approximately $19.8 million in the aggregate, to our stockholders of record on November 26, 2002, and declared on February 3, 2003 our second cash dividend of $0.15 per share of Class A and Class B common stock, payable on March 14, 2003, to our stockholders of record on February 25, 2003. Dividends are considered quarterly and may be paid only when approved by our board of directors.

RECENT DEVELOPMENTS

On February 3, 2003, the Company entered into a definitive stock purchase agreement pursuant to which the Company agreed to acquire certain assets of Hoyts Cinemas Corporation ("Hoyts Cinemas") for a combination of cash of approximately $100 million and Class A common stock (ranging from 4,308,390 to 4,761,905 shares based on the 14 trading days ending on the second trading day prior to closing of the transaction) and the assumption of certain capital leases. Under the stock purchase agreement, Regal expects to acquire 52 of the 97 Hoyts Cinemas theatres representing 554 screens located in 10 states in the Northeastern United States. Regal anticipates closing the transaction during the first half of 2003. There can be no assurance, however, that this transaction will be completed when anticipated or at all.

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 grew to approximately 1.6 billion attendees in 2002. 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 2002, total box office revenues increased for the eleventh consecutive year, increasing by approximately 13% to $9.5 billion, and attendance grew approximately 9% to 1.6 billion attendees.

During the late 1990's, the domestic motion picture exhibition industry underwent a period of extraordinary new theatre construction and the upgrade 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 and operating income 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, the first screen decline since 1963. 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 future 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.

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 8% from 1995 to 2002. 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 movie−going is convenient, affordable and attractively priced relative to other forms of out−of−home entertainment. The average price per patron continues to compare favorably to other out−of−home entertainment alternatives such as concerts and sporting events. Since 1992, 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 4.6 to 5.7 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 theatre is the appropriate facility for most markets. Over the last several years, major exhibitors have 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 26% during 2000 through 2002. This increased appeal in the 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 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.

THEATRE OPERATIONS

We operate the largest theatre circuit in the United States with 5,663 screens in 524 theatres in 36 states as of December 26, 2002. We operate theatres in 9 of the top 10 and 41 of the top 50 U.S. demographic market areas, which include locations in suburban growth areas. We target prime locations with excellent access to large, high patron−traffic areas. We operate our theatre circuit using our brands through our wholly owned subsidiaries, Regal Cinemas, Edwards, and United Artists.

We primarily operate multi−screen theatres. Our multi−screen theatre complexes typically contain 10 to 18 screens, each with auditoriums ranging from 100 to 500 seats. 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, multi−screen 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 by 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 the number of locations and theatre screens in our theatre circuit ranked by the number of screens in each state as of December 26, 2002:

Number of State Locations Screens State Locations Number of Screens

California 89 952 Louisiana 11 83 Florida 49 665 Indiana 7 82 New York 35 370 Maryland 6 68 Texas 27 328 Illinois 4 67 Washington 36 326 Minnesota 6 64 Ohio 25 296 Idaho 7 63 Pennsylvania 26 286 New Mexico 8 58 Virginia 24 268 Alaska 5 43 Georgia 20 263 Michigan 4 41 Oregon 26 211 Arkansas 4 37 Tennessee 13 154 Delaware 2 33 New Jersey 12 148 Oklahoma 2 26 Colorado 14 118 Arizona 2 21 Alabama 9 118 Missouri 1 18 North Carolina 14 111 Kentucky 1 16 Nevada 9 110 Wisconsin 1 16 Mississippi 15 100 West Virginia 1 12 South Carolina 8 89 Connecticut 1 2

In connection with the combination of our three theatre circuits, we have implemented 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 within the theatres and at the "Regal University," which is held at Regal Cinemas' Corporate Headquarters. The program is designed to encompass all phases of theatre operations, including our operating philosophy, policies, procedures and standards. In addition, we have an incentive compensation program for theatre−level management that rewards theatre managers for controlling operating expenses while complying with our operating standards.

In addition, we have implemented 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 OPERATIONS

Regal CineMedia focuses on the expansion of ancillary businesses, such as advertising, and the creation of new complementary business lines that utilize our existing theatre operating personnel and 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, business meetings, and alternative content distribution. We are investing in the equipment necessary to create the DCN, the largest digital network among U.S. theatre operators. While digital projection technologies required to display motion pictures in our theatres are not yet commercially viable, lower−cost digital video and communications technology is available to expand the revenue generating capabilities and opportunities. During 2002, 1,919 screens within 159 theatres in 15 markets were deployed as part of this digital network. In addition, the DCN is connected to 575 plasma screens that have been installed in the lobbies and other high−traffic locations within these theatres to provide additional advertising reach and exposure. We intend to expand the DCN to approximately 4,500 screens in 45 markets (approximately 80% of the total screens) in approximately 375 theatres by the end of 2003. The total investment in the DCN is expected to be approximately $67 million, of which we have invested approximately $28.5 million as of December 26, 2002. We believe that this digital network will enable us to more effectively capitalize on ancillary revenue opportunities.

In−Theatre Advertising. We believe that our theatres and DCN provide an attractive platform for advertisers by allowing them to target a large and desirable customer base and reduce the cost of in−theatre advertising. 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 12, 2002, in connection with the exchange transaction described in Note 1 to the accompanying financial statements, Regal CineMedia acquired the assets of Next Generation Network, Inc. ("NGN") to use in implementing Regal CineMedia's business plan. We have modified and upgraded the distribution software acquired from NGN 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 on−screen advertising business, marketing and promotions business by replacing our slide projectors and 35mm "rolling stock" advertising and making the delivery of advertising more time and cost efficient for advertisers and by allowing for more targeted marketing. Prior to the deployment of the DCN, our in−theatre advertising programs consisted of rolling stock commercials, intermission slides, intermission music, lobby monitor advertising and entertainment, coupon distribution and customer sampling. Within the DCN, the rolling stock commercials, intermission slides, and intermission music will be replaced by a "digital pre−show" which includes, in addition to high quality advertising, segments of entertaining and informative content provided by national media companies such as NBC, Turner Broadcasting, Universal Entertainment, and the "How Stuff Works" publishing firm (collectively the "Content Partners"). In addition to the long−term marketing and programming relationships created with the Content Partners, we have strong business relationships with many national advertisers, such as the Coca−Cola Company, and with a leading Internet ticket provider, Fandango. Advertising revenues generally generate high margins because they utilize our existing theatre assets and personnel. In January 2003, the new digital pre show that has been branded "The Twenty" was launched on approximately 2,000 screens in 15 markets.

Regal CineMeetings and Events. Previously known as United Artists' Satellite Theatre Network, Regal CineMeetings and Events 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 such as concerts and movie premieres. By utilizing the DCN and telephone networks, we can provide a video conferencing network and two−way audio broadcasting and teleconferencing services. 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 revenues in the future as we continue to expand our ancillary business activities. These activities are currently focused on creating a new kind of national digital distribution network for the distribution of sports, music, entertainment, education and other forms of digital content to paying customers as well as for promotional purposes. As the new programming "Channels" are developed they will be included as one of the product offerings of the Regal CineMedia and Events business units. 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.

Group Advance Ticket and Gift Certificate Sales. Regal CineMedia manages the sale of the Company's advance tickets sold to corporations and groups and the sale of gift certificates to individuals and groups. Cross−selling and bundling strategies across the advertising sales and other Regal CineMedia sales groups and across various of the Regal CineMedia product offerings provides many sales and operational cost benefits.

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 and DVD, 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 $58.8 million in 2002 compared with approximately $28.9 million in 1992, while the average cost to advertise and promote a film averaged approximately $30.6 million in 2002 compared with approximately $11.5 million in 1992.

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's 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, ten distributors accounted for approximately 94% of admissions revenues and 49 of the top 50 grossing films during 2002. While one motion picture distributor can dominate any given weekend's business, no single distributor dominates the market for an annual period. 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 popularity of films that each one distributes.

CONCESSIONS

In addition to box office admissions revenues, we generated approximately 27.5% of our total revenues from concessions sales during 2002. 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 an 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. 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 other 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.

We believe that we have enhanced our operational flexibility and created competitive advantages over other major theatre operators who have not entered or completed a bankruptcy reorganization process.

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, 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, a frequent moviegoer promotional programs, named the Regal Crown Club, cross−promotional 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 make extensive use of information technology in all areas of our business. We provide many ways for our customers to purchase tickets, ranging from the point of sale terminals in each theatre box office, to the self−service kiosks to Internet−based ticketing. We use our information technology systems to manage all aspects of our business. Our point of sale systems enable us to monitor cash transactions and detect fraud and inventory shrinkage, while capturing information about sales and attendance needed for film booking and settlement. Our scheduling systems support the coordination needed to properly allocate our auditoriums between film showings and Regal CineMeetings events while also ensuring that each movie audience views the intended set of advertisements and newspaper advertisements provide the correct show starting times. Our continuing investment in information technology has enabled our management team to operate our theatres efficiently.

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 26, 2002, we employed approximately 22,797 persons. Some of our facilities employ union projectionists. The Company's expansion into new markets may increase the number of employees represented by unions. The Company considers its 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. The 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. We believe that we are in substantial compliance with all of such laws.

Item 2. PROPERTIES

As of December 26, 2006, we operated 440 of our theatres pursuant to lease agreements and owned the land and buildings for 84 theatres. For a December 26, 2002 list of the states in which we operated theatres and the number of theatres and screens operated in each such state, please see the chart under "Business—Theatre Operations" above, which is incorporated herein by reference. Of the 524 theatres operated by us as of December 26, 2002, 181 were acquired as existing theatres and 343 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. Our theatre operating corporate office is located in approximately 96,450 square feet of space in Knoxville, Tennessee. Our and Regal CineMedia's 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.

Item 3. LEGAL PROCEEDINGS

Regal Cinemas, Inc., Edwards and United Artists are defendants in a number of claims arising from their decision to file voluntary petitions for relief under Chapter 11 and to close theatre locations or to cease construction of theatres on sites for which such entities had contractual obligations to lease or construct such property. The Company and its subsidiaries are also presently involved in various legal proceedings arising in the ordinary course of its business operations, including personal injury claims, employment and contractual matters and other disputes. The Company believes it has adequately provided for the settlement of such matters. Management believes any additional liability with respect to the above proceedings will not be material in the aggregate to the Company's consolidated financial position, results of operations or cash flows.

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

Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter ended December 26, 2002.

EXECUTIVE OFFICERS OF THE REGISTRANT

Shown below are the names, ages as of January 1, 2003, and current positions of our executive officers. There are no family relationships between any of the persons listed below, or between any of such persons and any of the directors of the Company or any persons nominated or chosen by the Company to become a director or executive officer of the Company.

Name Age Position Michael L. Campbell 49 Co−Chairman of the board of directors and Co−Chief Executive Officer of Regal and Chief Executive Officer of Regal Cinemas Kurt C. Hall 43 Co−Chairman of the board of directors and Co−Chief Executive Officer of Regal and President and Chief Executive Officer of Regal CineMedia Gregory W. Dunn 43 Executive Vice President and Chief Operating Officer Amy E. Miles 36 Executive Vice President, Chief Financial Officer and Treasurer Peter B. Brandow 42 Executive Vice President, General Counsel and Secretary

Michael L. Campbell is our Co−Chairman and Co−Chief Executive Officer and is Chief Executive Officer of Regal Cinemas. 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 Note 3 to the financial statements included in this Form 10−K. 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 a director of the National Association of Theatre Owners ("NATO") and serves on its executive committee of the board of directors.

Kurt C. Hall is our Co−Chairman and Co−Chief Executive Officer and is President and Chief Executive Officer of Regal CineMedia. Mr. Hall served as President and Chief Executive Officer of United Artists from March 6, 1998 to August 8, 2002, and as a director from May 12, 1992 until August 8, 2002. 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 Note 3 to the financial statements included in this Form 10−K. 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, Inc., a wholly owned subsidiary of United Artists, from May 12, 1992 to March 5, 1998. Mr. Hall serves on the executive committee of NATO.

Gregory W. Dunn is our Executive Vice President and Chief Operating Officer and President and Chief Operating Officer of Regal Cinemas 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 Note 3 to the financial statements included in this Form 10−K. Mr. Dunn served as Vice President of Marketing and Concessions of Regal Cinemas, Inc. from 1991 to 1995.

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 Note 3 to the financial statements included in this Form 10−K. 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 Note 3 to the financial statements included in this Form 10−K. 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.

PART II

Item 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common equity consists of Class A and Class B common stock. Our Class A common stock has traded on the New York Stock Exchange since May 9, 2002 under the symbol "RGC." There is no established public trading market for our Class B common stock.

The following table sets forth the high and low sales prices per share of our Class A common stock as reported by the New York Stock Exchange for the fiscal periods indicated.

Fiscal 2002

High Low

Second Quarter (May 9 − June 27, 2002) $ 25.10 $ 21.10 Third Quarter (June 28 − September 27, 2002) 24.70 16.00 Fourth Quarter (September 28 − December 26, 2002) 22.73 17.40 On March 20, 2003, there were 115 stockholders of record of our Class A common stock and two stockholders of record of our Class B common stock.

Dividend Policy

On December 13, 2002, we paid our first cash dividend of $0.15 per share of Class A and Class B common stock, or $19.8 million in the aggregate, to our stockholders of record on November 26, 2002. On February 3, 2003, we declared our second cash dividend of $0.15 per share of Class A and Class B common stock, payable on March 14, 2003, to our stockholders of record on February 25, 2003. We, at the discretion of the board of directors and subject to applicable law, anticipate paying regular quarterly dividends on our Class A and Class B common stock for the foreseeable future. The amount, if any, of the dividends to be paid in the future will depend upon our then available cash, anticipated cash needs, overall financial condition, loan agreement restrictions, future prospects for earnings and cash flows, as well as other relevant factors. For a description of the loan agreement restrictions on payment of dividends, please see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Regal Cinemas Senior Credit Facility" and Note 6 to the accompanying financial statements.

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

The Company used a portion of its net proceeds from its initial public offering to repay approximately $240.7 million of principal and accrued interest owed by United Artists under its term credit facility and approximately $15.0 million to fund operating costs and capital expenditures of Regal CineMedia. Since that time, the Company has used approximately an additional $34.0 million of the net proceeds to purchase the remaining outstanding shares of common stock of United Artists held by United Artists' minority shareholders and warrants to purchase shares of common stock of United Artists held by various institutional holders, $19.8 million to fund the Company's fourth quarter 2002 dividend payment, and the remaining $5.3 million for general corporate purposes.

Item 6. SELECTED FINANCIAL DATA

SELECTED HISTORICAL FINANCIAL DATA FOR 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 upon United Artists' emergence from bankruptcy reorganization on March 2, 2001 and Edwards' emergence from bankruptcy reorganization on September 29, 2001. The Company's financial statements reflect the results of operations from the dates Anschutz acquired its controlling equity interests in United Artists, Edwards and Regal Cinemas. These controlling equity interests have been recorded in the Company's financial statements at Anschutz's combined historical cost basis.

We present below selected historical financial data for Regal based on historical data for the period ended January 3, 2002, considering the historical results for United Artists for the period from March 2, 2001 to January 3, 2002, and Edwards for the period from September 29, 2001 to December 27, 2001 (the fiscal 2001 periods in which Anschutz controlled United Artists and Edwards, "the period under common control"), and for the year ended December 26, 2002, considering the results of operations of United Artists (from January 4, 2002), Edwards (from December 28, 2001), and Regal Cinemas (from January 24, 2002, the date upon which Anschutz acquired its controlling equity interest in Regal Cinemas). The selected historical financial data do not necessarily indicate the operating results or financial position that would have resulted from our operation on a combined basis during the periods presented, nor is the historical data necessarily indicative of any future operating results or financial position of Regal. Because historical financial data for Regal for the periods under common control ended January 3, 2002 include only partial year data for United Artists (from March 2, 2001) and Edwards (from September 29, 2001), we have included limited information for Regal. In addition to the below selected financial data, you should also refer to the more complete financial information included elsewhere in this Form 10−K.

Period Under Common December 26, Control Ended 2002 January 3, 2002

(in millions)

Statement of Operations Data: Total revenues $ 2,140.2 $ 556.9 Operating income 283.6 34.1 Net income 117.2 4.9

As of As of December 26, January 3, 2002 2002

(in millions)

Balance Sheet Data: Cash and cash equivalents $ 276.0 $ 68.0 Total assets 2,310.2 1,122.7 Total long term obligations 678.4 438.9 Stockholders' Equity 1,270.8 383.0 SELECTED HISTORICAL FINANCIAL AND OTHER DATA FOR UNITED ARTISTS

In the table below we provide you with the historical financial data of United Artists, our predecessor company for accounting purposes. Effective March 1, 2001 United Artists emerged from protection under Chapter 11 of the United States 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, the date control was acquired by Anschutz. 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 "Historical 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 Historical 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 United Artists' consolidated financial statements and accompanying notes found elsewhere in this Form 10−K and the discussion under "Management's Discussion and Analysis of Financial Condition and Results of Operations." As previously discussed, the results of operations of the Reorganized Company are included in the results of operations of Regal commencing March 1, 2001.

Historical Company Reorganized Company For The Fiscal Years Ended(1)

Forty−Four Weeks Nine Weeks Ended December 28, 2000 December 30, 1999 December 31, 1998 Ended January 3, 2002 March 1, 2001 (in millions)

Revenue: Admissions $ 322.2 $ 69.1 $ 372.4 $ 433.1 $ 454.4 Concession sales 130.1 26.9 154.6 174.4 188.5 Other 19.2 3.2 23.3 23.9 19.6

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

Total costs and expenses 443.5 84.4 574.1 680.7 663.8

Operating income (loss) from continuing operations $ 28.0 $ 14.8 $ (23.8) $ (49.3) $ (1.3)

Net income (loss) available to common stockholders $ 3.2 $ 534.4 $ (123.6) $ (127.3) $ (98.0)

Historical Company Reorganized Company For The Fiscal Years Ended(1)

Forty−Four Weeks Nine Weeks Ended Ended January 3, 2002 March 1, 2001 December 28, 2000 December 30, 1999 December 31, 1998

(in millions, except operating data)

Other financial data: Cash flow provided by (used in) operating activities 38.8 (2.7) (1.2) (9.5) 42.6 Cash flow provided by (used in) investing activities 6.1 2.7 1.5 (35.4) (113.4) Cash flow provided by (used in) financing activities (22.0) 2.6 0.3 52.7 68.2 Operating data: Theatre locations 205 214 220 291 330 Screens 1,574 1,590 1,625 2,049 2,229 Average screens per location 7.7 7.4 7.4 7.0 6.8 Attendance (in millions) 54.7 12.0 66.7 80.9 89.5 Average ticket price $ 5.89 $ 5.76 $ 5.58 $ 5.35 $ 5.08 Average concessions per patron 2.38 2.24 2.32 2.15 2.11 Balance sheet data at period end: Cash and cash equivalents $ 23.5 $ 7.5 $ 11.4 $ 16.0 $ 8.2 Total assets 453.6 422.5 432.5 534.3 579.1 Total debt(3) 248.6 727.5 722.5 721.6 653.9 Stockholders' equity (deficit) 99.4 (519.3) (519.3) (394.1) (268.2)

(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) 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. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the consolidated financial statements of Regal and United Artists and the notes thereto included elsewhere in this report on Form 10−K.

Overview

We are the largest domestic motion picture exhibitor with 5,663 screens in 524 theatres in 36 states as of December 26, 2002. We conduct our operations primarily through our wholly owned subsidiaries, Regal Cinemas, United Artists, Edwards and Regal CineMedia.

Regal was created through a series of transactions during 2001 and 2002. Anschutz acquired controlling equity interests in United Artists and Edwards upon the emergence from bankruptcy reorganization on March 2, 2001 of the United Artists Bankrupt Entities (as defined in Note 1 to the accompanying financial statements) and on September 29, 2001 of the Edwards Bankrupt Entities (as defined in Note 1 to the accompanying financial statements). On January 29, 2002, Anschutz acquired a controlling equity interest in Regal Cinemas, Inc. when the Regal Cinemas, Inc. Bankrupt Entities described in Note 1 to the accompanying financial statements emerged from bankruptcy reorganization. Anschutz exchanged its controlling equity interest in Regal Cinemas, Inc. for a controlling equity interest in Regal Cinemas immediately thereafter. Regal Cinemas, Inc. is a wholly owned subsidiary of Regal Cinemas. In addition, Regal CineMedia was formed in February 2002 to focus on the development of ancillary revenues and became our wholly owned subsidiary on April 12, 2002. On April 17, 2002, Regal Cinemas, Inc. acquired all of the outstanding capital stock of Edwards and, as a result, Edwards became a wholly owned subsidiary of Regal Cinemas, Inc.

The Company's financial statements reflect the results of operations from the dates Anschutz acquired its controlling equity interests in United Artists, Edwards and Regal Cinemas. These controlling equity interests have been recorded in the Company's financial statements at Anschutz's combined historical cost basis. Accordingly, the Company's financial statements for the period ended January 3, 2002 reflect only the results of operations of United Artists from March 1, 2001 and Edwards from September 30, 2001 to December 27, 2001. The Company's financial statements of operations for the year ended December 26, 2002 include the results of operations of United Artists (from January 4, 2002), Edwards (from December 28, 2001), and Regal Cinemas (from January 24, 2002).

Critical Accounting Policies

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

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

• The Company estimates its film cost expense and related film cost payable based on management's best estimate of the ultimate settlement of the film costs with the distributors. Film costs and the related film costs payable are adjusted to the final film settlement in the period that the Company settles with the distributors. Actual film costs and film costs payable could differ from those estimates.

• We depreciate and amortize the components of our property and equipment on a straight−line basis over the estimated useful lives of the assets. The estimates of the assets' useful lives require our judgment and our knowledge of the assets being depreciated and amortized. When necessary, the assets' useful lives are revised and the impact on depreciation and amortization is recognized on a prospective basis. Actual economic lives may differ materially from these estimates. In addition, the Company reviews property and equipment for impairment whenever

events or changes in circumstances indicate that the carrying amount of such assets might not be recoverable. When the future undiscounted cash flows of the operations to which the assets relate do not exceed the carrying value of the asset, such assets are written down to fair value. • The Company adopted SFAS 142, "Goodwill and Other Intangible Assets" in 2002. SFAS 142 specifies that goodwill and indefinite−lived intangible assets will no longer be amortized but instead will be subject to an annual impairment test. Based on an impairment test conducted during the fourth quarter of 2002, the Company was not required to record a charge for goodwill impairment. The Company will perform a fourth−quarter goodwill impairment test on an annual basis. In assessing the recoverability of the goodwill, the Company must make various assumptions regarding estimated future cash flows and other factors in determining the fair values of the respective assets. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges for these assets in future periods.

• Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. In addition, income tax rules and regulations are subject to interpretation and require judgment by the Company and may be challenged by the tax authorities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance if it is deemed more likely than not that its deferred income tax assets will not be realized. The Company expects that certain deferred income tax assets are not more likely than not to be recovered and, therefore, has established a valuation allowance. The Company reassesses the need for such allowance on an ongoing basis. Should the Company ultimately realize certain tax assets with a valuation allowance that relate to pre−acquisition periods, goodwill would be reduced. The Company believes that its provision for income taxes is adequate pertaining to any assessments from the tax authorities.

• We applied the principles of purchase and reorganization accounting when recording the acquisitions of controlling equity interests by Anschutz and the exchange of stock for minority interests and the emergence from bankruptcy of the theatre companies. These accounting principles require that we estimate the fair value of the individual assets and liabilities, including estimates of bankruptcy−related claims. The estimation of the fair value of the assets and liabilities involves a number of judgments and estimates that could differ materially from the actual amounts.

Basis of Presentation

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

Results of Operations for Regal for the fiscal year ended December 26, 2002 and period ended January 3, 2002

The following table sets forth the percentage of total revenues represented by certain items included in the Company's consolidated statements of operations for the fiscal year ended December 26, 2002 and the period ended January 3, 2002.

Fiscal year ended Period ended December 26, 2002 January 3, 2002

Revenues: Admissions 67.9% 68.7% Concessions 27.5 27.5 Other operating revenues 4.6 3.8

Total operating revenues 100.0 100.0 Operating expenses: Film rental and advertising costs(1) 54.4 55.7 Cost of concessions(2) 14.3 11.8 Other theatre operating expenses(3) 35.4 40.8 General and administrative expenses(3) 3.1 3.8 Depreciation and amortization(3) 6.3 7.6 Merger and restructuring expenses and amortization of deferred stock compensation(3) 0.9 — Loss on disposal and impairment of operating assets(3) 0.3 0.1 Total operating expenses(3) 86.8 93.9

Operating income(3) 13.2% 6.1%

(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.

Total revenues, operating income and net income for the year ended December 26, 2002 were $2,140.2 million, $283.6 million and 117.2 million compared to $556.9 million, $34.1 million, and $4.9 million for the period ended January 3, 2002. The Company believes its historical results are not indicative of its current operations, and, as a result, has not provided an in−depth comparison of the year ended December 26, 2002 results versus those for the period ended January 3, 2002 because (i) its historical results do not reflect the results of operations for Regal Cinemas for the period ended January 3, 2002 and these results are significant to the Company, (ii) its historical results do not include a full year of operating results for Regal Cinemas or United Artists for the year ended December 26, 2002, and (iii) the Company's capital structure has changed significantly subsequent to the period ended January 3, 2002. Therefore, the Company does not believe an in−depth period−to−period comparison of these results would be useful in understanding its current operations.

EBITDA

EBITDA (income from operations before depreciation and amortization expense, merger and restructuring expenses, and gain/loss on disposal and impairment of operating assets) was approximately $443.3 million, or 20.7% of total revenues, for the year ended December 26, 2002 and was $77.0 million, or 13.8% of total revenues, for the period ended January 3, 2002. We believe EBITDA provides a useful measure of cash flows from operations for our investors because EBITDA is an industry comparative measure of cash flows generated by our operations prior to the payment of interest and taxes and because it is a primary financial measure used by management to assess the performance of our Company. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States of America and should not be considered in isolation or construed as a substitute for net income or other operations data or cash flow data prepared in accordance with accounting principles generally accepted in the United States of America for purposes of analyzing our profitability or liquidity. In addition, not all funds depicted by EBITDA are available for management's discretionary use. For example, a portion of such funds are subject to contractual restrictions and functional requirements to pay debt service, fund necessary capital expenditures and meet other commitments from time to time as described in more detail in this Form 10−K. EBITDA, as calculated, may not be comparable to similarly titled measures reported by other companies. For fiscal 2002, the Company reported total revenues, operating income and net income of $2,140.2 million, $283.6 million and $117.2 million, respectively. In addition, the Company generated $373.2 million of cash flows from operations. EBITDA is calculated as follows:

Fiscal Year Ended Period Ended December 26, 2002 January 3, 2002

(in millions)

Operating income $ 283.6 $ 34.1 Depreciation and amortization 134.4 42.6 Loss on disposal and impairment of operating assets 6.4 0.3 Merger and restructuring expenses and amortization of deferred stock compensation 18.9 —

EBITDA $ 443.3 $ 77.0

Changes in Cash Flows

Cash flows generated from operating activities were approximately $373.2 million for the year ended December 26, 2002 compared to approximately $61.6 million for the period ended January 3, 2002. The increase was attributable to the inclusion of Edwards, Regal Cinemas and fifty−one weeks of United Artists in 2002 and to increases in net income and non cash items and changes in working capital items. Capital expenditures were $108.2 million for the year ended December 26, 2002 compared to $20.8 million for the period ended January 3, 2002. The increase is primarily due to the inclusion of Edwards, Regal Cinemas and fifty−one weeks of United Artists in 2002. In addition, Regal Cinemas, Inc. had approximately $166.7 million of cash on the date Anschutz acquired its controlling equity interest.

Liquidity and Capital Resources

The Company conducts its operations through its subsidiaries: Regal Cinemas, United Artists, Edwards and Regal CineMedia. The Company was formed in the first quarter of 2002 and expects its primary uses of cash to be for operating expenses and general corporate purposes related to corporate operations. The Company's principal sources of liquidity are from its operating subsidiaries. In the Company's operating subsidiaries, principal uses of cash will be for operating expenses, capital expenditures, and debt service. The principal sources of liquidity for the Company's subsidiaries are cash generated from their operations, cash on hand and the revolving credit facilities provided for under the Regal Cinemas senior credit facilities.

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

The Company funds the cost of its operating subsidiaries' capital expenditures through internally generated cash flow, cash on hand and financing activities. The Company's capital requirements have historically arisen principally in connection with acquisitions of theatres, new theatre openings, adding new screens to existing theatres, upgrading the Company's theatre facilities and replacing equipment. The Company intends to continue to grow its theatre circuit through selective expansion and acquisition opportunities. The Company currently expects capital expenditures for theatre development, replacement, expansion, upgrading and maintenance to be in the range of $90 million to $100 million in 2003. In addition to capital expenditures associated with its theatre operations, the Company expects to incur capital expenditures of approximately $43 million in connection with Regal CineMedia during 2003. The Company anticipates a significant portion of the Regal CineMedia capital expenditures to be made in connection with the development and deployment of the DCN to provide advertising and promotional services and to distribute various forms of digital programming. During the year ended December 26, 2002, the Company invested an aggregate of approximately $108.2 million in capital expenditures.

As of December 26, 2002, Regal Cinemas had $145 million committed under its undrawn senior revolving credit facility, $219.4 million outstanding under its senior secured term loan and $350 million principal amount of 9 3/8% senior subordinated notes due 2012. Regal Cinemas also maintains a letter of credit of $15 million as of December 26, 2002, which reduces the availability under its senior revolving credit facility to $130 million.

In May 2002, the Company issued 18.0 million shares of its Class A common stock in an initial public offering. The initial public offering was effected through two Form S−1 Registration Statements (File Nos. 333−84096 and 333−87870) that were declared effective by the Securities and Exchange Commission on May 8, 2002. All 18.0 million shares were sold at an initial public offering price of $19.00 per share, for an aggregate offering price of $342 million, through a syndicate of underwriters managed by Credit Suisse First Boston Corporation, Lehman Brothers Inc., Bear, Stearns & Co. Inc. and Salomon Smith Barney Inc.

The Company paid to the underwriters underwriting discounts and commissions totaling approximately $23.1 million in connection with the offering. In addition, the Company incurred additional expenses of approximately $4.1 million in connection with the offering. The net offering proceeds, after deducting underwriting discounts, commissions and other offering expenses, were approximately $314.8 million.

The Company used a portion of its net proceeds from its initial public offering to repay approximately $240.7 million of principal and accrued interest owed by United Artists under its term credit facility (see Note 6—"Long−Term Obligations" to the accompanying mandated consolidated financial statements) and approximately $15.0 million to fund operating costs and capital expenditures of Regal CineMedia. Since that time, the Company has used approximately an additional $34.0 million of the net proceeds to purchase the remaining outstanding shares of common stock of United Artists held by United Artists' minority shareholders and warrants to purchase shares of common stock of United Artists held by various institutional holders, $19.8 million to fund the Company's fourth quarter 2002 dividend payment, and the remaining $5.3 million for general corporate purposes.

On December 13, 2002, we paid our first cash dividend of $0.15 per share of Class A and Class B common stock, or $19.8 million in the aggregate, to our stockholders of record on November 26, 2002. On February 3, 2003, we declared our second cash dividend of $0.15 per share of Class A and Class B common stock, payable on March 14, 2003, to our stockholders of record on February 25, 2003. We, at the discretion of the board of directors and subject to applicable law, anticipate paying regular quarterly dividends on our Class A and Class B common stock for the foreseeable future. The amount, if any, of the dividends to be paid in the future will depend upon our then available cash, anticipated cash needs, overall financial condition, loan agreement restrictions, future prospects for earnings and cash flows, as well as other relevant factors.

On February 3, 2003, the Company entered into a definitive stock purchase agreement pursuant to which the Company agreed to acquire certain assets of Hoyts Cinemas for a combination of cash of approximately $100 million and stock (ranging from 4,308,390 to 4,761,905 shares based on the 14 trading days ending on the second trading day prior to closing of the transaction) and the assumption of certain capital leases. Under the stock purchase agreement, Regal expects to acquire 52 of the 97 Hoyts Cinemas theatres representing 554 screens located in 10 states in the Northeastern United States. Regal anticipates closing the transaction during the first half of 2003.

Contractual Obligations and Commitments

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

Payments Due by Period

Total Current 2 − 3 Years 4 − 5 Years After 5 Years

Contractual Cash Obligations Long−term debt $ 569.4 $ 14.1 $ 22.5 $ 182.8 $ 350.0 Capital lease obligations 4.1 0.2 0.4 0.4 3.1 Lease financing arrangements 97.8 1.8 4.7 6.3 85.0 Bankruptcy claims and Liabilities 23.6 23.6 — — — Other long term obligations 7.1 0.9 2.1 3.2 0.9 Operating leases 3,367.9 221.4 432.4 423.7 2,290.4

Total contractual cash obligations $ 4,069.9 $ 262.0 $ 462.1 $ 616.4 $ 2,729.4

Amount of Commitment Expiration per Period

Total Amounts After 5 Committed Current 2 − 3 Years 4 − 5 Years Years

Other Commercial Commitments Lines of credit $ 145.0 — — — $ 145.0

Total commercial commitments $ 145.0 — — — $ 145.0

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

The following is a description of the Company's material indebtedness as of December 26, 2002:

Regal Cinemas Senior Credit Facility

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

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

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

• the net cash proceeds from asset sales in particular circumstances specified in the amended and restated senior credit agreement; and • the net cash proceeds from new debt issuances in particular circumstances specified in the amended and restated senior credit agreement.

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

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

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

• its ratio of consolidated total debt to consolidated EBITDA for the trailing four quarters (as defined in the amended and restated senior credit agreement) to exceed the ratio of (a) 3.5 to 1 for the third fiscal quarter in 2002 through the fourth fiscal quarter in 2004 and (b) 3.25 to 1 for the first fiscal quarter in 2005 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 for the trailing four quarters to exceed the ratio of (a) 2.50 to 1 for the third fiscal quarter in 2002 through the fourth fiscal quarter in 2003, (b) 2.25 to 1 for the first fiscal quarter 2004 through the fourth fiscal quarter in 2004, and (c) 2.00 to 1 from the first fiscal quarter in 2005 through the fourth fiscal quarter in 2007, and thereafter; • its ratio of consolidated adjusted debt to consolidated EBITDA for the trailing four quarters plus consolidated rent expense for the trailing four quarters to exceed the ratio of (a) 5.50 to 1 for the third fiscal quarter in 2002 through the fourth fiscal quarter in 2004, and (b) 5.25 to 1 for the first fiscal quarter in 2005 through the fourth fiscal quarter in 2007 and thereafter; or • 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 amended and restated senior credit agreement also contains customary covenants, including limitations on Regal Cinemas' ability to incur debt, and events of default, including a change of control, as defined in the amended and restated senior credit agreement. The amended and restated senior credit agreement also limits Regal Cinemas' ability to pay dividends, to make advances to the Company or its other subsidiaries and otherwise to engage in intercompany transactions. These limitations will restrict its ability to fund operations outside of Regal Cinemas with funds generated at Regal Cinemas.

Regal Cinemas Senior Subordinated Notes

On January 29, 2002, Regal Cinemas issued $200.0 million aggregate principal amount of 9 3/8% senior subordinated notes due 2012. Subsequently, on April 17, 2002, Regal Cinemas issued an additional $150.0 million aggregate principal amount of 9 3/8% senior subordinated notes due 2012 with identical terms. The January notes were initially purchased by Credit Suisse First Boston Corporation and Lehman Brothers Inc., and the April notes were initially purchased by Credit Suisse First Boston Corporation. In each instance, the notes were resold to various qualified institutional buyers and non−U.S. persons pursuant to Rule 144A and Rule 903 or Rule 904, respectively, under the Securities Act of 1933. Interest on the notes is payable semi−annually on February 1 and August 1 of each year, and the notes mature on February 1, 2012. The notes are guaranteed by most of Regal Cinemas' existing subsidiaries, and, under the circumstances specified in the indenture, future subsidiaries will also be required to guarantee the notes. The notes are unsecured and rank behind Regal Cinemas' obligations under its senior credit facility and any future senior indebtedness.

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

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

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.

Regal Cinemas Lease Financing Arrangements

For some of the Company's new theatre sites built in fiscal years 1999, 2000 and 2001, the Company was considered the owner (for accounting purposes) of the theatre during the construction period. In accordance with Emerging Issues Task Force No. 97−10, the Company was required to record the balance sheet obligations ($97.8 million at December 26, 2002) 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.

United Artists Leveraged Sale and Leaseback

In December 1995, United Artists Theatre Circuit ("UATC") entered into a sale and leaseback transaction whereby the land and buildings underlying 27 of its operating theatres and four theatres and a screen addition under development were sold to and leased back from an unaffiliated third party. The transaction requires UATC to lease the underlying theatres for a period of 21 years and one month, with the option to extend for up to an additional 10 years. In conjunction with the transaction, the buyer of the properties issued publicly traded pass−through certificates. Several of its properties included in the sale and leaseback transaction have been determined by UATC to be economically obsolete for theatre use. As of December 26, 2002, 27 theatres were subject to the sale leaseback transaction. UATC amended the lease on March 7, 2001 to allow UATC to terminate the master lease with respect to the obsolete properties, to allow the owner trustee to sell those properties and pay down the underlying debt (at a discount to par through September 2002 and par thereafter) and to reduce the amount of rent paid by UATC on the lease. Included in the 2001 amendment is a $35.0 million cap on the ability to sell properties. Through December 26, 2002 approximately $12.1 million of this cap has been utilized through theatre sales. Five additional properties which are no longer operational and are being marketed for sale. The Company evaluates the remaining theatres on an ongoing basis. Approximately $87.5 million in principal amount of pass−through certificates were outstanding as of December 26, 2002.

In connection with the 1995 sale and leaseback transaction, UATC entered into a participation agreement that requires United Artists to comply with various covenants, which limit United Artists' ability to incur indebtedness, make restricted payments, engage in transactions with affiliates, execute guarantees, issue preferred stock of subsidiaries and make subsidiary distributions, transfer assets and pay dividends.

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

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

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

Edwards Leveraged Sale and Leaseback

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

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

Bankruptcy Claims

Regal Cinemas, Inc. and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At December 26, 2002, Regal Cinemas had accrued approximately $23.6 million for the estimated costs to resolve such bankruptcy claims. In the opinion of management, based on its examination of these matters, its experience to date and discussions with legal counsel, the outcome of these legal matters, after taking into consideration the amounts already accrued, is not expected to have a material effect on the Company's liquidity or results of operations. To the extent these claims are allowed, they will be funded with cash on hand, cash flow from operations or borrowings under Regal Cinemas' revolving credit facility. In addition to these sources of funding, with respect to allowed Edwards claims, they may also be funded from restricted cash that has been set aside, and, if the allowed Edwards claims exceed $55 million, from contributions by The Anschutz Corporation and its subsidiaries ("Anschutz") and OCM Principal Opportunities Fund II, L.P. and its subsidiaries ("Oaktree's Principal Activities Group"). The timing of payment on these claims will depend upon the resolution of these claims. See also Note 3—"Chapter 11 Proceedings" and Note 11—"Related Party Transactions" to the accompanying unaudited condensed consolidated financial statements.

Quarterly Results

The following tables set forth selected unaudited quarterly results for the eight quarters ending December 26, 2002. The quarterly financial data as of each period presented below have been derived from Regal's unaudited consolidated financial statements for those periods. Results for these periods are not necessarily indicative of results for the full year. The quarterly financial data should be read in conjunction with the consolidated financial statements of Regal and notes thereto included in Item 8 to this Form 10−K—Financial Statements and Supplemental Data.

Dec. 26, Sept. 26, June 27, Mar. 28, Jan. 3, Sept. 27, June 28, Mar. 29, 2002 2002 2002 2002 2002 2001 2001 2001

In millions (except per share data)

Total revenues $ 547.3 $ 571.5 $ 607.3 $ 414.1 $ 240.3 $ 158.7 $ 128.5 $ 29.4 Operating income (loss) 66.5 77.3 94.5 45.3 19.1 13.0 5.8 (3.7) Net income (loss) 31.7 36.1 38.7 10.5 6.8 6.1 (1.2) (6.8) Diluted earnings (loss) per share 0.23 0.27 0.09 0.19 0.27 0.32 (0.07) (1.27) Dividends per common share $ 0.15 $ — $ — $ — $ — $ — $ — $ —

Inflation

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

Seasonality

The Company's revenues are usually seasonal, coinciding with the timing of releases of motion pictures by the major distributors. Generally, studios release the most marketable motion pictures during the summer and the holiday seasons. The unexpected emergence of a "hit" film during other periods can alter the traditional pattern. The timing of movie releases can have a significant effect on the Company's results of operations, and the results of one quarter are not necessarily indicative of the results for the next or any other quarter. The seasonality of motion picture exhibition, however, has become less pronounced in recent years as studios have begun to release major motion pictures somewhat more evenly throughout the year. Results of Operations for Fiscal 2001 and 2000—United Artists

The following results of operations of United Artists, our predecessor company for accounting purposes, are being provided pursuant to applicable SEC rules. These results of operations of United Artists are not indicative of the combined results of operations of Regal because they do not include the results of Edwards and Regal Cinemas, and they do not purport to be indicative of future results of operations of Regal. 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 (Reorganized) have been combined with the operating results of United Artists for the nine weeks ended March 1, 2001 (Historical). 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 year ended December 28, 2000 do not include the effect of fresh−start reporting adjustments, which are discussed above under the caption "Selected Financial Data—Selected Historical Financial and Other Data for United Artists." The combining of reorganized and historical periods is not acceptable under accounting principles generally accepted in the United States of America. 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. Therefore, you should read the following results of operations of United Artists in conjunction with United Artists' consolidated financial statements and accompanying notes found elsewhere in this Form 10−K.

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

Revenues: Admissions 68.6% 67.7% Concessions 27.5 28.1 Other operating revenues 3.9 4.2

Total revenues 100.0 100.0 Operating expenses: Film rental and advertising costs 37.8 37.2 Cost of concessions 3.1 3.3 Theatre operating expenses 41.1 44.4 General and administrative 3.5 3.9 Depreciation and amortization 7.5 8.1 Asset impairments, lease exit and restructure costs 0.7 10.0 Gain on disposition of assets, net (1.2) (2.6)

Total operating expenses 92.5 104.3

Operating income (loss) 7.5% (4.3)%

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

Total Revenues

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

Combined United Artists

Fiscal Year Ended Fiscal Year Ended January 3, 2002 December 28, 2000

Admissions $ 391.3 $ 372.4 Concessions 157.0 154.6 Other operating revenues 22.4 23.3

Total revenues $ 570.7 $ 550.3

Attendance 66.7 66.7 Average ticket price $ 5.87 $ 5.58 Average concessions per patron 2.35 2.32 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. The increase in admissions revenues in 2001 was primarily attributable to a 5.0% increase in average ticket prices.

Concessions. Total concessions revenues increased $2.4 million, or 1.6%, to $157.0 million in 2002, from $154.6 million for 2000. The increase in concessions revenues in 2001 was primarily due to an increase in 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. The decreases in other operating revenues in 2001 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.

Operating Expenses

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. 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%.

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. Cost of concessions as a percentage of concessions revenues decreased to 11.4% in 2001 as compared to 11.7% in 2000. 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. Other theatre operating expenses as a percentage of total revenues decreased to 41.1% in 2001 from 44.4% during 2000. 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 of United Artists decreased $1.3 million, or 6.1%, to $20.0 million in 2001, from $21.3 million for 2000. As a percentage of total revenues, general and administrative expenses decreased to 3.5% in 2001 from 3.9% in 2000. 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.

Operating Income (Loss)

Operating income of United Artists increased by $66.6 million to $42.8 million in 2001, from a loss of $23.8 million for 2000 largely because of substantial asset impairments in 2000 compared to 2001. 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.

Recent Accounting Pronouncements

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

Pursuant to SFAS No. 142, the Company no longer amortizes goodwill, reorganizational value in excess of amounts allocated to identifiable assets or indefinite lived intangible assets, and will test for impairment at least annually at the reporting unit level. Other long−lived assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long−Lived Assets," issued in August 2001. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 for all goodwill and other intangible assets, including excess reorganization value, recognized in an entity's statement of financial position at that date, regardless of when those assets were initially recognized. As required by SFAS No. 142, the standard has not been retroactively applied to the results for the period prior to adoption. Amortization relating to goodwill and excess reorganization value was $9.6 million for the period ended January 3, 2002. The Company's initial and annual goodwill impairment tests for fiscal 2002 indicated that the fair value of its reporting units exceeded their carrying value and therefore, at this time, goodwill was not deemed to be impaired.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 establishes accounting standards for recognition and measurement of the fair value of obligations associated with the retirement of long−lived assets when there is a legal obligation to incur such costs. Under SFAS No. 143, the costs of retiring an asset will be recorded as a liability when the retirement obligation arises and will be amortized to expense over the life of the asset. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company is evaluating the impact of the adoption of this standard and has not yet determined the effect of adoption on its financial position and results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long−Lived Assets," which provides clarifications of certain implementation issues with SFAS No. 121 along with additional guidance on the accounting for the impairment or disposal of long−lived assets. SFAS No. 144 supersedes SFAS No. 121 and applies to all long−lived assets (including discontinued operations) and consequently amends APB 30, "Reporting the Effects of Disposal of a Segment of a Business." SFAS No. 144 develops one accounting model (based on the model in SFAS No. 121) for long−lived assets that are to be disposed of by sale, as well as addresses the principal implementation issues. SFAS No. 144 requires that entities measure long−lived assets that are to be disposed of by sale at the lower of book value or fair value less cost to sell. That requirement eliminates APB 30's requirement that discontinued operations be measured at net realizable value or that entities include under "discontinued operations" in the financial statements amounts for operating losses that have not yet occurred. Additionally, SFAS No. 144 expands the scope of discontinued operations to include all components of an entity with operations that (1) the entity can distinguish from the rest of the entity and (2) the entity will eliminate from the ongoing operations of the entity in a disposal transaction. The Company adopted SFAS No. 144 in the first quarter of 2002. The adoption of SFAS No. 144 did not have a material impact on the Company's financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 updates, clarifies and simplifies existing accounting pronouncements including the rescission of Statement 4, which required all gains and losses from extinguishments of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in APB Opinion No. 30 will now be used to classify those gains and losses. The provisions of SFAS No. 145 related to the rescission of Statement 4 is effective for fiscal years beginning after May 15, 2002.

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

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

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities—an Interpretation of ARB No. 51." This interpretation addresses consolidation by business enterprises of entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Variable interest entities are required to be consolidated by their primary beneficiaries if they do not effectively disperse risks among parties involved. The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns. The consolidation requirements of this interpretation apply immediately to variable interest entities created after January 31, 2003 and apply to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain new disclosure requirements apply to all financial statements issued after January 31, 2003. The Company is evaluating the impact of adopting this interpretation.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock−Based Compensation−Transition and Disclosure." SFAS No.148 amends SFAS No. 123, "Accounting for Stock−Based Compensation," to provide alternative methods of transition for a voluntary change to SFAS No. 123's fair value based method of accounting for stock−based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No.123 and APB Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to stock−based employee compensation on reported net income and earnings per share in annual and interim financial statements. While SFAS No. 148 does not amend SFAS No. 123 to require companies to account for employee stock options using the fair value method, the disclosure provisions are applicable to all companies with stock−based employee compensation, regardless of whether they account for such compensation using the fair value method of SFAS No. 123 or the intrinsic value method of APB No. 25, Accounting for Stock Issued to Employees, and related interpretations. The disclosure requirements are effective for fiscal years ending after December 15, 2002. The Company has elected to continue the intrinsic value method of accounting for its employee stock options in accordance with APB Opinion No. 25 and as a result, the adoption of SFAS No. 148 did not have a material impact on the Company's financial position and results of operations.

Risk Factors

Investing in our securities involves a significant degree of risk. In addition to the other information contained in this annual report, you should consider the following factors before investing in our securities.

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

Regal Cinemas, United Artists and Edwards operated as separate motion picture exhibitors until we acquired them, and the theatre circuits operated by them operated at a loss prior to their emergence from bankruptcy reorganization. As a result, we have limited historical financial and operating data upon which you can evaluate our business. There can be no assurance that we can successfully conduct their combined operations on an economically feasible basis and we may therefore incur losses in the future.

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

During the past 24 months, each of Regal Cinemas, Inc., United Artists and Edwards emerged from bankruptcy reorganization under Chapter 11 of the United States Bankruptcy Code. Regal Cinemas, Inc. and Edwards 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 the approximate $23.6 million amount accrued by Regal for such claims at December 26, 2002, 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.

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

Since 1999, several major motion picture exhibition companies, including United Artists, Edwards 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 motion picture 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 approximately $29.1 million in capital expenditures related to ancillary revenue opportunities during 2002 and we expect to make approximately $43 million of additional capital expenditures relating to these opportunities during 2003. 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 NGN 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.

Regal CineMedia's in−theatre advertising operations must compete with a number of other advertising mediums including, most notably, television advertising. There can be no guarantee that in−theatre advertising will continue to gain acceptance among major advertisers or that Regal CineMedia's in−theatre advertising format will be favorably received by the theatre−going public. If Regal CineMedia is unable to generate expected sales of advertising, it may not achieve or maintain the level of profitability we hope to achieve, and our results of operations may be adversely affected.

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 and the major studios not finance the conversion as expected, 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, including our proposed acquisition of Hoyts Cinemas described under "Business—Recent Developments," we expect to benefit from cost savings through, for example, the reduction of overhead and theatre level costs and certain favorable tax attributes, and from revenue enhancements resulting from the acquisition. There can be no assurance, however, 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 94% of admissions revenues and 49 of the 50 top grossing films during 2002. 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 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. Noncompliance 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−Chairmen and 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 or wars or threatened wars involving 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.

There can be no assurance that we will acquire Hoyts Cinemas

Although we have entered into a definitive stock purchase agreement to acquire Hoyts Cinemas, there can be no assurance that we will be able to complete this transaction. The acquisition is subject to regulatory approvals under applicable antitrust laws and other conditions. There can be no assurance that the required conditions will be satisfied. If we do not complete the purchase, we will not be able to realize the benefits we expect from the acquisition or to expand our operations into the areas served by Hoyts Cinemas. If we are unable to complete the purchase, it could affect the trading price of our common stock.

We may be unable to successfully integrate Hoyts Cinemas into our business or realize the cost savings that we anticipate

Our ability to integrate Hoyts Cinemas into our business and realize the cost savings and synergies that we anticipate are subject to a number of uncertainties, including those referred to above under "—Risks Relating to Our Business and Industry—We may not benefit from our acquisition strategy." Many of these uncertainties are related to conditions beyond our control, such as general negative economic trends and competition. We may be unable to achieve the anticipated cost savings and synergies from the acquisition.

The interests of our controlling stockholders may conflict with your interests

Anschutz and Oaktree's Principal Activities Group 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, at December 26, 2002, Anschutz and Oaktree's Principal Activities Group controlled approximately 94.8% 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 production 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 2002, our total rent expense and interest expense were approximately $231.0 million and $61.7 million, respectively. As of December 26, 2002, we had total long−term obligations of $678.4 million. As of December 26, 2002, we had current contractual cash obligations of approximately $245.1 million. For a detailed discussion of our contractual cash obligations and other commercial commitments over the next several years, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations—Contractual Obligations and Commitments" provided below. 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.

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 subsidiaries' debt and pay dividends on our common stock 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 are subject to statutory or contractual restrictions, are contingent upon the subsidiaries' earnings and are subject to various business considerations.

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.

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.

Our stock price may be volatile and decline substantially

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 purchased market 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

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, or the perception that those sales will occur, could cause the market price of our Class A common stock to decline.

As of December 26, 2002, we had outstanding 27,493,575 unregistered shares of Class A common stock and 85,287,957 shares of Class B common stock that may convert into Class A common stock on a one−for−one basis. All of such 112,781,532 shares of unregistered common stock constitute "restricted securities" under the Securities Act of 1933. Provided the holders comply with the applicable holding periods, volume limits and other conditions prescribed in Rule 144 under the Securities Act, these unregistered shares of common stock become freely tradable at various times on or after April 12, 2003.

Anschutz, Oaktree's Principal Activities Group and certain other significant stockholders are able to sell their shares pursuant to the registration rights that we have granted as described in "Description of Capital Stock—Registration Rights" in our prospectus dated May 8, 2002. 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.

If we complete the acquisition of Hoyts Cinemas, we have agreed to issue up to 4,761,904 shares of our Class A common stock as part of the purchase price. The Class A common stock issued will constitute "restricted securities" under the Securities Act and, in addition, will be subject to contractual restrictions prohibiting their sale or transfer, subject to limited exceptions, for a period of twelve months after the closing date of our acquisition of Hoyts Cinemas for all of the shares issued to Hoyts Cinemas and an additional six months after that for one half of those shares. Following the expiration of the contractual prohibition, and assuming compliance by the holder with the holding periods, volume limits and other conditions prescribed in Rule 144 under the Securities Act, these unregistered shares of common stock will become freely tradable at various times on or after the first anniversary of the issuance of such shares.

Additionally, as of December 26, 2002, approximately 9,225,157 shares of our Class A common stock will be issuable upon exercise of stock options that vest and are exercisable at various dates through January 29, 2007. Of such options, as of December 26, 2002, 157,163 were exercisable. All of such shares subject to vested options are registered and will be freely tradable when the option is exercised unless such shares are acquired by an affiliate of Regal, in which case the affiliate may only sell the shares subject to the volume limitations imposed by Rule 144 of the Securities Act of 1933.

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, 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.

Forward−looking statements

Some of the information in this Form 10−K includes "forward−looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this Form 10−K, including, without limitation, certain statements under "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" may constitute forward−looking statements. In some cases you can identify these "forward−looking statements" by words like "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of those words and other comparable words. These forward−looking statements involve risks and uncertainties. Our actual results could differ materially from those indicated in these statements as a result of certain risk factors as more fully discussed under "Risk Factors" above.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's market risk is confined to interest rate exposure of its debt obligations that bear interest based on floating rates. The Company's senior credit facilities provide for variable rate interest that could be adversely affected by an increase in interest rates. As of December 26, 2002, the Company had term borrowings of $219.4 million under its senior credit facilities. Borrowings under these facilities will bear interest, at the Company's option, at either a base rate (which will be the higher of prime rate of British Banking Association's or federal funds rate plus 0.5%) or the Eurodollar Rate plus, in each case, an applicable margin. The applicable margin can range from 1.50% to 3.25% for the revolving credit facility and 1.50% to 2.75% for the term loan facility. At December 26, 2002, the borrowings outstanding under the Company's term credit facilities bore interest approximately 4.6%. A one−half percent rise in the interest rate on the Company's variable rate indebtedness held at December 26, 2002, would have increased reported interest expense by approximately $1,100,000 for the year ended December 26, 2002.

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEPENDENT AUDITORS' REPORT

The Board of Directors Regal Entertainment Group:

We have audited the accompanying consolidated balance sheet of Regal Entertainment Group and subsidiaries as of December 26, 2002 and the combined balance sheet of Regal Entertainment Group (a combination of certain theatre interests of Anschutz, see note 1) as of January 3, 2002, and the related statements of operations, stockholders' equity and parent's investment, and cash flows for the year ended December 26, 2002 and the period under common control (March 1, 2001 to January 3, 2002). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated and 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 financial statements referred to above present fairly, in all material respects, the financial position of Regal Entertainment Group and subsidiaries as of December 26, 2002 and Regal Entertainment Group (a combination of certain theatre interests of Anschutz, see note 1) as of January 3, 2002, and the results of their operations and their cash flows for the year ended December 26, 2002 and the period ended January 3, 2002, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the accompanying consolidated financial statements, the Company changed its method of accounting for goodwill and other intangible assets during the year ended December 26, 2002.

/s/ KPMG LLP

Nashville, Tennessee January 24, 2003

REGAL ENTERTAINMENT GROUP (NOTE 1)

CONSOLIDATED AND COMBINED BALANCE SHEETS December 26, 2002 January 3, 2002

(in millions, except share data)

ASSETS CURRENT ASSETS: Cash and cash equivalents $ 276.0 $ 68.0 Restricted cash 22.5 28.1 Trade and other receivables, net 30.5 9.6 Inventories 6.7 4.2 Prepaid expenses and other current assets 39.7 20.0 Assets held for sale 9.7 2.8 Deferred income tax asset 4.7 —

TOTAL CURRENT ASSETS 389.8 132.7 PROPERTY AND EQUIPMENT: Land 134.7 60.0 Buildings, leasehold improvements and equipment 1,674.3 525.6 Construction in progress 6.5 —

Total property and equipment 1,815.5 585.6 Accumulated depreciation and amortization (160.0) (32.8)

Total property and equipment, net 1,655.5 552.8 INVESTMENT IN REGAL CINEMAS, INC. — 292.7 GOODWILL 227.5 136.2 OTHER NONCURRENT ASSETS 37.4 8.3

TOTAL ASSETS $ 2,310.2 $ 1,122.7

LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current maturities of long−term obligations $ 17.0 $ 15.6 Accounts payable 154.0 76.4 Accrued expenses 109.4 60.5 Bankruptcy claims and liabilities 23.6 43.9

TOTAL CURRENT LIABILITIES 304.0 196.4 LONG−TERM DEBT 561.5 420.6 LEASE FINANCING ARRANGEMENTS 96.0 — CAPITAL LEASE OBLIGATIONS 3.9 2.7 DEFERRED TAX LIABILITY 21.3 3.8 OTHER NONCURRENT LIABILITIES 49.9 32.6

TOTAL LIABILITIES 1,036.6 656.1 MINORITY INTEREST 2.8 36.6 MANDATORY REDEEMABLE PREFERRED STOCK — 47.0 STOCKHOLDERS' EQUITY: Contributed capital — 378.1 Class A common stock, $0.001 par value; 500,000,000 shares authorized, 46,448,382 and 0 shares issued and outstanding at December 26 and January 3, 2002, respectively — — Class B common stock, $0.001 par value; 200,000,000 shares authorized, 85,287,957 and 0 shares issued and outstanding at December 26 and January 3, 2002, respectively 0.1 — Preferred stock, $0.001 par value; none issued and outstanding — — Additional paid in capital 1,216.1 — Unamortized deferred stock compensation (19.5) — Retained earnings 74.1 4.9

TOTAL STOCKHOLDERS' EQUITY 1,270.8 383.0

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,310.2 $ 1,122.7

See accompanying notes to financial statements.

REGAL ENTERTAINMENT GROUP (NOTE 1)

CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS

(in millions, except share and per share data)

Year Ended Period Ended December 26, 2002 January 3, 2002

REVENUES: Admissions $ 1,453.7 $ 382.5 Concessions 588.3 153.3 Other operating revenue 98.2 21.1

TOTAL OPERATING REVENUE 2,140.2 556.9 OPERATING EXPENSES: Film rental and advertising costs 790.3 212.9 Cost of concessions 84.4 18.1 Other theatre operating expenses 757.1 227.5 General and administrative expenses 65.1 21.4 Merger and restructuring expenses and amortization of deferred stock compensation 18.9 — Depreciation and amortization 134.4 42.6 Loss on disposal and impairment of operating assets 6.4 0.3

TOTAL OPERATING EXPENSES 1,856.6 522.8

INCOME FROM OPERATIONS 283.6 34.1 OTHER INCOME (EXPENSE): Interest expense, net (61.7) (21.4) Minority interest in earnings of consolidated subsidiaries (13.4) 0.4 Other, net — (4.6)

TOTAL OTHER EXPENSE, NET (75.1) (25.6)

INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM 208.5 8.5 PROVISION FOR INCOME TAXES 89.8 3.6

INCOME BEFORE EXTRAORDINARY ITEM 118.7 4.9 EXTRAORDINARY ITEM: Loss on extinguishment of debt 1.5 —

NET INCOME $ 117.2 $ 4.9

LOSS ON REDEMPTION OF PREFERRED STOCK 28.2 —

NET INCOME AVAILABLE TO COMMON STOCKHOLDERS $ 89.0 $ 4.9

EARNINGS PER SHARE: Basic $ 0.83 $ 0.30 Diluted $ 0.79 $ 0.28 AVERAGE SHARES OUTSTANDING (in thousands): Basic 107,738 16,104 Diluted 112,284 17,368

See accompanying notes to financial statements.

REGAL ENTERTAINMENT GROUP

CONSOLIDATED AND COMBINED STATEMENTS OF STOCKHOLDERS' EQUITY AND PARENT'S INVESTMENT

(in millions, except per share data)

Class A Common Stock Class B Common Stock Additional Contributed Paid−In Deferred Shares Amount Shares Amount Capital Capital Stock Retained Total Compensation Earnings

Balances, March 2, 2001 — $ — — $ — $ — $ — $ — $ — $ — Contribution of controlling equity interest in United Artists, Edwards, and Regal Cinemas — — — — 378.1 — — — 378.1 Net income and comprehensive income — — — — — — — 4.9 4.9

Balances, January 3, 2002 — — — — 378.1 — — 4.9 383.0 Contribution of additional United Artists common stock — — — — 28.6 — — — 28.6 Contribution of Regal CineMedia — — — — 10.0 — — — 10.0 — — — — 31.1 — — — 31.1 Contribution of additional Edwards common stock Exchange of equity interests in United Artists, Edwards, Regal Cinemas, and Regal CineMedia for common stock of Regal 27.5 — 84.6 0.1 (447.8) 881.6 (22.9) — 411.0 Contribution of additional equity interests in United Artists in exchange for common stock of Regal — — 0.7 — — 10.3 — — 10.3 Loss on redemption of redeemable preferred stock — — — — — — — (28.2) (28.2) Initial public offering, net of costs 18.0 — — — — 314.8 — — 314.8 Amortization of deferred stock compensation — — — — — — 2.8 — 2.8 Exercise of stock options 1.0 — — — — 6.8 — — 6.8 Tax benefit from exercise of stock options — — — — — 3.2 — — 3.2 Forfeiture of stock options — — — — — (0.6) 0.6 — — Cash dividends declared, $0.15 per share — — — — — — — (19.8) (19.8) Net income and comprehensive income — — — — — — — 117.2 117.2

Balances, December 26, 2002 46.5 $ — 85.3 $ 0.1 $ — $ 1,216.1 $ (19.5) $ 74.1 $ 1,270.8

See accompanying notes to financial statements.

REGAL ENTERTAINMENT GROUP (NOTE 1)

CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS

Year Ended Period Ended December 26, 2002 January 3, 2002

(in millions)

CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 117.2 $ 4.9 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 134.4 42.6 Amortization of deferred stock compensation 2.8 — Extraordinary loss on debt extinguishment, net 1.5 — Minority interest in earnings of consolidated subsidiaries 13.4 (0.4) Deferred income taxes 73.5 (2.4) Loss on disposal and impairment of operating assets 6.4 0.3 Changes in operating assets and liabilities (excluding effects of acquisition and reorganization): Trade and other receivables (10.9) (3.0) Inventories 0.8 — Prepaid expenses and other current assets (3.9) (2.7) Accounts payable 28.2 11.1 Accrued expenses and other liabilities 9.8 11.2

NET CASH PROVIDED BY OPERATING ACTIVITIES 373.2 61.6 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (108.2) (20.8) Proceeds from disposition of assets 10.1 19.5 Cash used to purchase outstanding United Artists minority interest (34.0) — Decrease in other long term assets 9.5 2.0 Decrease in reimbursable construction advances 1.9 — Decrease in restricted cash 5.7 8.7

NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (115.0) 9.4 CASH FLOWS FROM FINANCING ACTIVITIES: Cash used to redeem Edwards preferred stock (75.3) — Cash used to redeem Edwards senior subordinated notes (11.3) — Cash used to payoff Edwards term loan (180.0) — Cash used to payoff United Artists term credit facility (240.0) — Cash used to pay dividend (19.8) — Net proceeds from senior subordinated notes offering 155.3 — Net proceeds from initial public offering 314.8 — Proceeds from stock option exercises 6.9 — Payment of debt acquisition costs (10.5) — Net payments on long term obligations (53.1) (13.2) Decrease in cash overdraft — (1.5) Payment of bankruptcy claims and liabilities (104.3) — Cash of subsidiaries at acquisition date 167.1 36.2

NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (50.2) 21.5 NET CASH USED IN REORGANIZATION — (24.5)

NET INCREASE IN CASH AND CASH EQUIVALENTS 208.0 68.0

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 68.0 —

CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 276.0 $ 68.0

SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for income taxes $ 17.1 $ 0.1

Cash paid for interest $ 42.8 $ 6.1

SUPPLEMENTAL NON−CASH FINANCING ACTIVITIES: Exchange of minority shares in Regal Cinemas for Regal Entertainment Group $ 361.9 $ —

Exchange of minority shares in Edwards for Regal Entertainment Group $ 44.2 $ —

Contribution of additional shares purchased from minority interests $ 80.0 $ —

See accompanying notes to financial statements.

REGAL ENTERTAINMENT GROUP

NOTES TO CONSOLIDATED AND COMBINED FINANCIAL STATEMENTS

DECEMBER 26, 2002

1 THE COMPANY AND BASIS OF PRESENTATION

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

Regal operates the largest theatre circuit in the United States, consisting of 5,663 screens in 524 theatres in 36 states as of December 26, 2002. Regal CineMedia focuses on the development of ancillary revenues. The Company formally operates on a 52−week fiscal year with each quarter generally consisting of 13 weeks, unless otherwise noted. The Company's fiscal year ends on the first Thursday after December 25, which in certain years results in a 53−week fiscal year.

During 2000 and 2001, United Artists and a majority of its subsidiaries at that time (the "United Artists Bankrupt Entities"), Edwards Theatre Circuit Affiliated Group and its subsidiaries at that time (the "Edwards Bankrupt Entities", which were merged into Edwards in connection with the bankruptcy proceedings of the Edwards Bankrupt Entities described below), and Regal Cinemas, Inc. and its subsidiaries at that time (the "Regal Cinemas, Inc. Bankrupt Entities") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Courts identified below (the "Applicable Bankruptcy Court"), as well as joint plans of reorganization. The joint plans of reorganization, as amended, for the United Artists Bankrupt Entities and the Edwards Bankrupt Entities were approved by the Applicable Bankruptcy Court, and became effective on March 2, 2001 ("UA Effective Date") for the United Artists Bankrupt Entities and September 29, 2001 ("Edwards Effective Date") for the Edwards Bankrupt Entities. The Applicable Bankruptcy Court approved the Regal Cinemas, Inc. Bankrupt Entities' joint plan of reorganization on December 7, 2001, and it became effective on January 29, 2002. Also on that date, Anschutz and the other shareholders of Regal Cinemas, Inc. exchanged their equity interests in Regal Cinemas, Inc. for equity interests in Regal Cinemas and as a result, Regal Cinemas, Inc. became a wholly owned subsidiary of Regal Cinemas. Regal Cinemas was formed for the primary purpose of acquiring and holding the shares of common stock of Regal Cinemas, Inc. Edwards was formed in connection with the reorganization of the Edwards Bankrupt Entities to, among other things, effect the substantive consolidation of the Edwards Bankrupt Entities through their merger into Edwards. As a result of the merger transaction, Edwards succeeded to all of the assets and liabilities of the Edwards Bankrupt Entities.

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

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

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

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

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

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

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

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

On April 17, 2002, Regal Cinemas, Inc. acquired all of the outstanding capital stock of Edwards from REH for an aggregate purchase price of approximately $272.5 million. As a result of Regal Cinemas, Inc. being under common control with Edwards, the transaction was accounted for as a contribution of Edwards to Regal Cinemas, Inc. by REH, at the historical cost basis of Edwards. In connection with the acquisition of Edwards, Regal Cinemas issued $150 million principal amount of 93/8% senior subordinated notes due 2012, under the indenture pursuant to which Regal Cinemas sold $200 million principal amount of 93/8% senior subordinated notes due 2012 in January 2002. The proceeds of the notes issued on April 17, 2002, together with cash on hand at Regal Cinemas, Inc., were used by Regal Cinemas, Inc. to acquire Edwards from REH. REH used the proceeds from its sale of Edwards to repay approximately $180.7 million of senior bank debt, including accrued interest, of Edwards, to redeem approximately $12.0 million of Edwards Subordinated Notes (as defined below), including accrued interest, primarily held by Anschutz and Oaktree's Principal Activities Group, and to redeem approximately $75.3 million of redeemable preferred stock of Edwards held by Anschutz, Oaktree's Principal Activities Group and members of the Edwards family. The difference between the carrying amount and redemption price of the redeemable preferred stock of $28.2 million was recorded as a charge to equity and is reflected as a reduction of net income available to common stockholders in the accompanying consolidated statement of operations for the year ended December 26, 2002. In addition, the Company recorded an extraordinary loss of approximately $1.5 million as a result of the early redemption of the Edwards Subordinated Notes. As a result of Regal Cinemas, Inc.'s acquisition of Edwards, Edwards became a wholly owned subsidiary of Regal Cinemas, Inc. and became a guarantor under Regal Cinemas, Inc.'s senior credit facility and Regal Cinemas' 9 3/8% senior subordinated notes.

In May 2002, the Company issued 18.0 million shares of its Class A common stock in an initial public offering. The initial public offering was effected through two Form S−1 Registration Statements (File Nos. 333−84096 and 333−87870) that were declared effective by the Securities and Exchange Commission on May 8, 2002. All 18.0 million shares were sold at an initial public offering price of $19.00 per share, for an aggregate offering price of $342 million, through a syndicate of underwriters managed by Credit Suisse First Boston Corporation, Lehman Brothers Inc., Bear, Stearns & Co. Inc. and Salomon Smith Barney Inc. The Company paid underwriting discounts and commissions totaling approximately $23.1 million in connection with the offering. In addition, the Company incurred additional expenses of approximately $4.1 million in connection with the offering. The net offering proceeds, after deducting underwriting discounts, commissions and other offering expenses, were approximately $314.8 million. The Company used a portion of the net proceeds to repay approximately $240.7 million of principal and accrued interest owed by United Artists under the United Artists Term Credit Facility (as defined below) and approximately $15.0 million to fund operating costs and capital expenditures of Regal CineMedia. During the remainder of the 2002 fiscal year, the Company used an additional $34.0 million of the net proceeds to acquire the remaining outstanding shares of common stock and warrants to purchase common stock of United Artists, approximately $19.8 million to fund the Company's fourth quarter 2002 dividend payment and the remaining $5.3 million for general corporate purposes.

On August 16, 2002, REH acquired the remaining outstanding shares of common stock of United Artists held by the United Artists' minority stockholders and warrants to acquire shares of common stock of United Artists held by various institutional holders for approximately $34.0 million. Immediately prior to the acquisition, the common stock of United Artists was the only outstanding class of voting stock, of which the minority stockholders owned approximately 9.9%, and REH owned the remaining 90.1%. The $22.3 million difference between the carrying amount and purchase price of the minority interest was recorded as a component of goodwill in the accompanying consolidated balance sheet at December 26, 2002. As a result of this transaction, United Artists became a wholly owned subsidiary of REH.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Combination

The consolidated financial statements include the accounts of Regal and the combined financial statements include companies under the common control of Anschutz through April 12, 2002. All significant intercompany accounts and transactions have been eliminated in consolidation. The portion of United Artists equity relating to shares not owned by the Company and the related earnings or losses were included in minority interest.

Revenue Recognition

Revenues are generated principally through admissions and concessions sales with proceeds received in cash at the point of sale. Other operating revenues consist primarily of product advertising (including vendor programs) and other ancillary revenues which are recognized as income in the period earned. 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.

Cash Equivalents

The Company considers all unrestricted highly liquid debt instruments and investments purchased with an original maturity of three months or less to be cash equivalents. At December 26, 2002, the Company held substantially all of its cash in temporary cash investments in the form of certificates of deposit and variable rate investment accounts with major financial institutions.

Restricted Cash

Edwards established a $35.0 million cash reserve, which was funded on the Edwards Effective Date for the payment of certain allowed unsecured claims, which thereafter will be the lesser of (i) $20 million; or (ii) the sum of the unpaid: (a) disputed claims that have elected the cash option; and (b) allowed claims that have elected the cash option. The restricted cash has been placed in a segregated account in which the holders of these allowed 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.

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.

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. Reimbursable construction advances are presented as a component of trade and other receivables in the accompanying balance sheets.

Property and Equipment

The Company states property and equipment at cost. Major renewals and improvements are capitalized, while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets, are expensed currently. 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:

Buildings 20−30 years Equipment 4−20 years Leasehold improvements Lesser of term of lease or asset life Included in property and equipment is $94.2 million and $2.7 million of assets accounted for under capital leases and lease financing arrangements as of December 26, 2002 and January 3, 2002, respectively. The Company records amortization using the straight−line method over the shorter of the lease terms or the estimated useful lives noted above.

Goodwill and Intangible Assets

SFAS No. 142, "Goodwill and Other Intangible Assets," became effective for the Company in the first quarter of fiscal 2002. This standard revised the financial accounting and reporting for goodwill and certain intangible assets. Among the revisions were the discontinuation of the amortization of goodwill and certain intangible assets and the periodic testing (at least annually) for the impairment of goodwill at a reporting unit level and additional financial statement disclosures. The Company has identified its reporting units under SFAS No. 142 to be the demographic market areas in which the Company conducts its theatre operations. The fair value of the Company's identified reporting units were estimated using the expected present value of associated future cash flows and market values of the underlying theatres within each reporting unit. The Company's initial and annual goodwill impairment tests for fiscal 2002 indicated that the fair value of its reporting units exceeded their carrying value and therefore, at this time, goodwill was not deemed to be impaired. As required by SFAS No. 142, the discontinuation of goodwill (excess reorganization value) amortization has not been retroactively applied to the results for the period prior to adoption. Amortization relating to goodwill was $9.6 million for the period ended January 3, 2002. The following is pro−forma information of the Company assuming that SFAS No. 142 had been in effect in during the period ended January 3, 2002 and goodwill amortization expense had not been recorded (in millions, except for share data):

Period ended January 3, 2002

Net income available to common stockholders, as reported: $ 4.9 Add: Goodwill amortization, net of related tax effect 5.8

Adjusted pro forma net income $ 10.7 Diluted earnings per share: As reported $ 0.28 Pro forma $ 0.62

Impairment of Long−Lived Assets

The Company reviews long−lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. 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. 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 their fair market value. 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 of which the Company expects to dispose.

Other Assets

Other assets include debt acquisition costs, which 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 26, 2002 and January 3, 2002 were $26.3 million and $2.1 million, respectively, net of accumulated amortization of $2.7 million and $0.4 million, respectively.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. In addition, income tax rules and regulations are subject to interpretation and require judgment by the Company and may be challenged by the taxation authorities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance if it is deemed more likely than not that its deferred income tax assets will not be realized.

The Company expects that certain deferred income tax assets are not more likely than not to be recovered and therefore, has set up a valuation allowance. The Company reassesses its need to establish a valuation allowance for its deferred income taxes on an ongoing basis. Should the Company realize certain tax assets with a valuation allowance that relate to pre−acquisition periods, goodwill would be reduced.

Deferred Revenue

Deferred revenue relates primarily to vendor rebates and advance ticket sales. Such items are included in accrued expenses. The Company recognizes these items in the accompanying financial statements when earned or redeemed.

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.

Film Costs

The Company estimates its film cost expense and related film cost payable based on management's best estimate of the ultimate settlement of the film costs with the distributors. Film costs and the related film costs payable are adjusted to the final film settlement in the period that the Company settles with the distributors.

Advertising and Start−Up Costs

The Company expenses advertising costs as incurred. Start−up costs associated with a new theatre are also expensed as incurred.

Stock−based Compensation

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

The Company has elected to continue accounting for its stock option plan using the intrinsic value method in accordance with the provisions of APB 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. Had the fair value of options granted under the Company's stock option plan described in Note 11— "Capital Stock and Stock Option Plan" been recognized in accordance with SFAS No. 123, the Company's reported net income and diluted earnings per share would have been recorded in the amounts indicated below (in millions, except per share data):

Period Year ended ended December 26, January 3, 2002 2002

Net income available to common stockholders, as reported: $ 89.0 $ 4.9 Less additional stock−based employee compensation expense determined under fair value based method for all awards, net of related tax effects (3.1) (0.6)

Pro forma net income 85.9 4.3 Diluted earnings per share: As reported $ 0.79 $ 0.28 Pro forma 0.77 0.25

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.

The Company applied the principles of purchase and reorganization accounting when recording the acquisitions of controlling equity interests by Anschutz and the exchange of stock for minority interests and the emergence from bankruptcy of the theatre companies. These accounting principles require that the Company estimate the fair value of the individual assets and liabilities including estimates of bankruptcy−related claims. The valuation of the fair value of the assets and liabilities involves a number of judgments and estimates that could differ significantly from actual results.

Segments

The Company manages its business under one reportable segment—theatre exhibition operations. As of December 26, 2002, Regal CineMedia did not meet the quantitative thresholds under SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," to qualify as a separate reportable segment.

Comprehensive Income

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

Reclassifications

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

Recent Accounting Pronouncements

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

Pursuant to SFAS No. 142, the Company no longer amortizes goodwill, reorganizational value in excess of amounts allocated to identifiable assets or indefinite lived intangible assets, and will test for impairment at least annually at the reporting unit level. Other long−lived assets will continue to be amortized over their useful lives and reviewed for impairment in accordance with SFAS No. 144, "Accounting for the Impairment or Disposal of Long−Lived Assets," issued in August 2001. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001 for all goodwill and other intangible assets, including excess reorganization value, recognized in an entity's statement of financial position at that date, regardless of when those assets were initially recognized. As required by SFAS No. 142, the standard has not been retroactively applied to the results for the period prior to adoption. Amortization relating to goodwill and excess reorganization value was $9.6 million for the period ended January 3, 2002. The Company's initial and annual goodwill impairment tests for fiscal 2002 indicated that the fair value of its reporting units exceeded their carrying value and therefore, at this time, goodwill was not deemed to be impaired.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations." SFAS No. 143 establishes accounting standards for recognition and measurement of the fair value of obligations associated with the retirement of long−lived assets when there is a legal obligation to incur such costs. Under SFAS No. 143, the costs of retiring an asset will be recorded as a liability when the retirement obligation arises and will be amortized to expense over the life of the asset. SFAS No. 143 is effective for fiscal years beginning after June 15, 2002. The Company is evaluating the impact of the adoption of this standard and has not yet determined the effect of adoption on its financial position or results of operations.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long−Lived Assets," which provides clarifications of certain implementation issues with SFAS No. 121 along with additional guidance on the accounting for the impairment or disposal of long−lived assets. SFAS No. 144 supersedes SFAS No. 121 and applies to all long−lived assets (including discontinued operations) and consequently amends APB 30, "Reporting the Effects of Disposal of a Segment of a Business." SFAS No. 144 develops one accounting model (based on the model in SFAS No. 121) for long−lived assets that are to be disposed of by sale, as well as addresses the principal implementation issues. SFAS No. 144 requires that entities measure long−lived assets that are to be disposed of by sale at the lower of book value or fair value less cost to sell. That requirement eliminates APB 30's requirement that discontinued operations be measured at net realizable value or that entities include under "discontinued operations" in the financial statements amounts for operating losses that have not yet occurred. Additionally, SFAS No. 144 expands the scope of discontinued operations to include all components of an entity with operations that (1) the entity can distinguish from the rest of the entity and (2) the entity will eliminate from the ongoing operations of the entity in a disposal transaction. The Company adopted SFAS No. 144 in the first quarter of 2002. The adoption of SFAS No. 144 did not have a material impact on the Company's financial position or results of operations.

In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 updates, clarifies and simplifies existing accounting pronouncements including the rescission of Statement 4, which required all gains and losses from extinguishments of debt to be aggregated and, if material, classified as an extraordinary item, net of related income tax effect. As a result, the criteria in APB Opinion No. 30 will now be used to classify those gains and losses. The provisions of SFAS No. 145 related to the rescission of Statement 4 is effective for fiscal years beginning after May 15, 2002.

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

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

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities—an Interpretation of ARB No. 51." This interpretation addresses consolidation by business enterprises of entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. Variable interest entities are required to be consolidated by their primary beneficiaries if they do not effectively disperse risks among parties involved. The primary beneficiary of a variable interest entity is the party that absorbs a majority of the entity's expected losses, receives a majority of its expected residual returns. The consolidation requirements of this interpretation apply immediately to variable interest entities created after January 31, 2003 and apply to existing entities in the first fiscal year or interim period beginning after June 15, 2003. Certain new disclosure requirements apply to all financial statements issued after January 31, 2003. The Company is evaluating the impact of adopting this interpretation.

In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock−Based Compensation—Transition and Disclosure." SFAS No.148 amends SFAS No. 123, "Accounting for Stock−Based Compensation," to provide alternative methods of transition for a voluntary change to SFAS No. 123's fair value based method of accounting for stock−based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No.123 and APB Opinion No. 28, "Interim Financial Reporting," to require disclosure in the summary of significant accounting policies of the effects of an entity's accounting policy with respect to stock−based employee compensation on reported net income and earnings per share in annual and interim financial statements. While SFAS No. 148 does not amend SFAS No. 123 to require companies to account for employee stock options using the fair value method, the disclosure provisions are applicable to all companies with stock−based employee compensation, regardless of whether they account for such compensation using the fair value method of SFAS No. 123 or the intrinsic value method of APB No. 25, Accounting for Stock Issued to Employees, and related interpretations. The disclosure requirements are effective for fiscal years ending after December 15, 2002. The Company has elected to continue the intrinsic value method of accounting for its employee stock options in accordance with APB Opinion No. 25 and as a result, the adoption of SFAS No. 148 did not have a material impact on the Company's financial position or results of operations.

3 CHAPTER 11 PROCEEDINGS

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

The reorganization proceedings of the United Artists, Edwards and Regal Cinemas, Inc. Bankrupt Entities had significant effects on the operations and financial condition of the companies. The United Artists and Regal Cinemas, Inc. Bankrupt Entities adjusted their assets, liabilities and capital structure to reflect estimated fair values at the time of their emergence from their reorganization proceedings and the acquisition of a controlling equity interest by Anschutz. In addition, in connection with their reorganizations, each of the United Artists, Edwards and Regal Cinemas, Inc. Bankrupt Entities 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.

Edwards Reorganization

On August 23, 2000, the Edwards Bankrupt Entities filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Central District of California (the "California Bankruptcy Court"). On May 24, 2001, the Edwards Bankrupt Entities filed a plan of reorganization and related disclosure statement, as amended (the "Edwards Plan"). On September 24, 2001, the California Bankruptcy Court confirmed the Edwards Plan. On September 29, 2001, all conditions required for the effectiveness of the Edwards Plan were met, and the Edwards Plan became effective. Pursuant to the Edwards Plan, Anschutz and Oaktree's Principal Activities Group agreed to exchange (i) approximately $14.6 million of their pre−petition secured claims and cash of $41.4 million for $56.0 million in Edwards' Series A preferred stock and 51% of Edwards' newly−issued common stock and (ii) $10.0 million of senior secured debt for $10.0 million of senior unsecured subordinated notes (the "Edwards Subordinated Notes"). For a discussion of Edwards related bankruptcy claims and other related party transactions, see Note 12—"Related Party Transactions".

The Edwards Plan also provided that the Edwards Bankrupt Entities' senior secured lenders receive a payment of $9.5 million of principal and all pre−petition and post−petition accrued and unpaid interest at the applicable non−default rate. In connection with the Edwards Plan, the Edwards Subordinated Notes were issued and the existing secured lenders established a $180.0 million restructured term loan. General unsecured creditors were entitled to receive, at their option, either a cash distribution equal to 90% of the holder's allowed claim or an unsecured seven year note equal to 100% of the allowed claim. The seven year notes provide for semi−annual interest payments, in arrears, beginning on the six−month anniversary of the effective date at a rate of 9% per annum, compounded annually. The notes also require semi−annual principal reduction payments beginning on the six−month anniversary of the Edwards Effective Date.

United Artists Reorganization

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

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

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

Regal Cinemas, Inc. Reorganization

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

• 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.

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

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

In connection with Regal Cinemas, Inc.'s emergence from bankruptcy and acquisition of a controlling interest by Anschutz, Regal Cinemas, Inc. made certain adjustments in accordance with SOP 90−7 to reflect its emergence from bankruptcy and simultaneously allocated Anschutz's cost basis to Regal Cinemas, Inc.'s assets and liabilities. The impact of these adjustments resulted in a $511.1 million write−down of Regal Cinemas, Inc.'s assets. The amounts recorded based on the acquisition by Anschutz allocated to the assets of Regal Cinemas, Inc. were current assets ($194.0 million), property and equipment ($1,131.8 million) deferred taxes and other assets ($86.7 million), debt and lease obligations ($574.5 million), other amounts and non−current liabilities ($191.3 million) and minority interest ($309.9 million).

4 INTEGRATIONS

During the first quarter of 2002, the Company commenced a plan to restructure certain of its operations to facilitate the integration of Regal Cinemas, United Artists and Edwards. The restructuring principally involved the closing of certain Edwards and United Artists corporate facilities and relocation of the theatre management operations of United Artists and Edwards to Regal Cinemas' offices in Knoxville, Tennessee. The restructuring plan was communicated by Company management to Edwards and United Artists corporate employees during the first quarter of 2002. Such restructuring did not result in any theatre closings. With respect to the Edwards restructuring plan, the Company terminated 78 corporate employees located in the Edwards Newport Beach, California corporate offices. Of the total Edwards restructuring charge of $3.1 million for the year ended December 26, 2002, approximately $1.1 million related to employee termination benefits and approximately $2.0 million related to other direct exit costs (principally lease termination fees) associated with the closing of Edwards' corporate offices. The United Artists restructuring plan provided for the termination of 102 administrative employees located in the Centennial, Colorado corporate offices along with closure of a film office located in New York City. Total United Artists restructuring charges were $2.9 million for the year ended December 26, 2002, of which approximately $2.0 million related to employee termination benefits and approximately $0.9 million related to direct exit costs for the closure of the New York City film office and certain legal and professional fees.

Integration costs and reorganization expenses ($10.1 million) and stock compensation amortization ($2.8 million) are also included in "Operating Expenses—Merger and restructuring expenses" in the accompanying consolidated statements of operations for the year ended December 26, 2002. As of December 26, 2002, the Company has paid approximately $3.3 of Edwards and United Artists restructuring expenses. The Company completed the Edwards and United Artists integration during the second quarter of 2002.

5 PRO FORMA RESULTS OF OPERATIONS (UNAUDITED)

On a pro forma basis, assuming (i) a full year of post−bankruptcy operating results for Regal Cinemas, United Artists and Edwards, (ii) the contribution by Anschutz and the exchange by several minority shareholders of their equity interests in United Artists, Edwards, Regal Cinemas, and Regal CineMedia for shares of the Company, (iii) the issuance of $350 million of 93/8% senior subordinated notes and (iv) the repayment of Edwards indebtedness and the effects of the Company's initial public offering, total revenues and net income would have been $2,266.4 million and $150.2 million and $2,013.5 million and $56.3 million for the year ended December 26, 2002 and the period ended January 3, 2002, respectively.

6 LONG−TERM OBLIGATIONS

Long−term obligations at December 26, 2002 and January 3, 2002, consist of the following:

December 26, 2002 January 3, 2002

(In millions)

Regal Cinemas Senior Credit Facility $ 219.4 $ — Regal Cinemas 93/8% Senior Subordinated Notes 350.0 — United Artists Term Credit Facility — 240.6 Edwards Senior Secured Term Loan — 180.0 Edwards Subordinated Notes to Shareholders — 10.3 Lease financing arrangements, 11.5%, maturing in various installments through 2021 97.8 — Capital lease obligations 4.1 2.7 Other 7.1 5.3 United Artists Revolving Credit Facility — —

Total long−term obligations 678.4 438.9 Less current maturities (17.0) (15.6)

Total long−term obligations, net $ 661.4 $ 423.3

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

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

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

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

The amended and restated senior credit agreement includes various financial covenants such as certain leverage and coverage ratios. The amended and restated senior credit agreement also contains customary covenants, including limitations on Regal Cinemas' ability to incur debt, and events of default, including a change of control, as defined in the amended and restated senior credit agreement. The amended and restated senior credit agreement also limits Regal Cinemas' ability to pay dividends, to make advances and otherwise to engage in intercompany transactions. Regal Cinemas Senior Subordinated Notes—On January 29, 2002, Regal Cinemas issued $200.0 million aggregate principal amount of 9 3/8% senior subordinated notes due 2012. Interest on the notes is payable semi−annually on February 1 and August 1 of each year, and the notes mature on February 1, 2012. The notes are guaranteed by most of Regal Cinemas' existing subsidiaries and are unsecured, ranking behind Regal Cinemas' obligations under its senior credit facility and any future senior indebtedness.

On April 17, 2002, Regal Cinemas sold an additional $150.0 million principal amount of 9 3/8% senior subordinated notes due 2012, which were issued under the indenture pursuant to which Regal Cinemas sold its senior subordinated notes in January 2002.

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

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

United Artists Revolving Credit Facility—The $35.0 million United Artists Revolving Credit Facility (the "UA Revolver") was terminated during the third quarter of fiscal 2002.

Edwards Senior Term Loan and Subordinated Notes—As described above, on April 17, 2002, Regal Cinemas sold $150 million principal amount of 9 3/8% senior subordinated notes due 2012. The proceeds of the notes, together with cash on hand at Regal Cinemas, Inc., were used to purchase Edwards from REH, which used the proceeds from the sale of Edwards to Regal Cinemas, Inc. to repay the Edwards term loan and Subordinated Notes. The Company recorded an extraordinary loss of approximately $1.3 million as a result of the early redemption of the Edwards Subordinated Notes.

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

Maturities of Long−Term Obligations—The Company's long−term debt, capital lease obligations, and lease financing arrangements are scheduled to mature as follows:

Lease Long−Term Capital Financing Debt and Other Leases Arrangements Total

(in millions)

2003 $ 15.0 $ 0.2 $ 1.8 $ 17.0 2004 12.2 0.2 2.1 14.5 2005 12.3 0.2 2.6 15.1 2006 12.3 0.2 2.9 15.4 2007 173.8 0.2 3.4 177.4 Thereafter 350.9 3.1 85.0 439.0

Totals $ 576.5 $ 4.1 $ 97.8 $ 678.4

7 SALE−LEASEBACK TRANSACTIONS

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.

United Artists Leveraged Sale and Leaseback

In December 1995, United Artists Theatre Circuit ("UATC") entered into a sale and leaseback transaction whereby the land and buildings underlying 27 of its operating theatres and four theatres and a screen addition under development were sold to and leased back from an unaffiliated third party. The transaction requires UATC to lease the underlying theatres for a period of 21 years and one month, with the option to extend for up to an additional 10 years. In conjunction with the transaction, the buyer of the properties issued publicly traded pass−through certificates. Several of its properties included in the sale and leaseback transaction have been determined by UATC to be economically obsolete for theatre use. As of December 26, 2002, 27 theatres were subject to the sale leaseback transaction. UATC amended the lease on March 7, 2001 to allow UATC to terminate the master lease with respect to the obsolete properties, to allow the owner trustee to sell those properties and pay down the underlying debt (at a discount to par through September 2002 and par thereafter) and to reduce the amount of rent paid by UATC on the lease. Included in the 2001 amendment is a $35.0 million cap on the ability to sell properties. Through December 26, 2002 approximately $12.1 million of this cap has been utilized through theatre sales. Five additional properties which are no longer operational and are being marketed for sale. The Company evaluates the remaining theatres on an ongoing basis. Approximately $87.5 million in principal amount of pass−through certificates were outstanding as of December 26, 2002.

In connection with the 1995 sale and leaseback transaction, UATC entered into a participation agreement that requires United Artists to comply with various covenants, which limit United Artists' ability to incur indebtedness, make restricted payments, engage in transactions with affiliates, execute guarantees, issue preferred stock of subsidiaries and make subsidiary distributions, transfer assets and pay dividends. On November 8, 1996, United Artists entered into a sale and leaseback transaction, pursuant to which United Artists sold three of its operating theatres and two theatres under development to an unaffiliated third party for approximately $21.5 million and leased back those theatres pursuant to a lease that terminates in 2017. The lease provides United Artists with an option to extend the term of the lease for an additional 10 years. Two of the theatres have been determined by United Artists to be economically obsolete and are no longer in operation.

In December 1997, United Artists entered into a sale and leaseback transaction, pursuant to which United Artists sold two theatres under development and leased them back from an unaffiliated third party for approximately $18.1 million. 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 Leveraged Sale and Leaseback

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

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

8 INCOME TAXES

The components of total income tax expense (benefit) for the year ended December 26, 2002 and the period ended January 3, 2002 are as follows (in millions):

Year ended Period ended December 26, January 3, 2002 2002

Income before taxes and extraordinary items: $ 89.8 $ 3.6 Tax benefit from exercise of options (3.2) — Extraordinary item (1.0) —

Total $ 85.6 $ 3.6

The components of the provision for (benefit from) income taxes for income from operations are as follows (in millions):

Year ended Period ended December 26, January 3, 2002 2002

Federal Current $ 9.9 $ 5.4 Deferred 62.8 (2.2)

Total Federal 72.7 3.2 State Current 4.6 0.6 Deferred 12.5 (0.2)

Total State 17.1 0.4

Total income tax provision/(benefit) $ 89.8 $ 3.6

A reconciliation of the provision for income taxes as reported and the amount computed by multiplying the income before taxes and extraordinary item by the U.S. federal statutory rate of 35% was as follows (in millions):

Year ended Period ended December 26, January 3, 2002 2002

Provision calculated at federal statutory income tax rate $ 72.9 $ 2.3 State and local income taxes, net of federal benefit 11.1 0.2 Minority interest expense 4.8 — Reorganization costs 1.0 — Fresh start adjustments — 0.7 Other — 0.4

Total income tax provision $ 89.8 $ 3.6 Significant components of the Company's net deferred tax liability consisted of the following at:

December 26, January 3, 2002 2002

(in millions)

Deferred tax assets Net operating loss carryforward $ 39.6 $ 38.8 Excess of tax basis over book basis of intangible assets 27.0 12.5 Deferred rent 13.0 — Bankruptcy related liabilities 7.8 16.2 Deferred revenue 4.9 12.8 Other — 9.4 Deferred gain on sale lease back — 2.7 Accrued expenses — 1.1 Impairment of long−lived assets — 8.8 Excess of tax basis over book basis of fixed assets — 8.3

Total deferred tax assets 92.3 110.6 Valuation allowance (59.4) (100.3)

Total deferred tax assets after valuation allowance 32.9 10.3

Deferred tax liabilities Excess of book basis over tax basis of fixed assets (46.0) (13.0) Other (3.5) (1.1)

Total deferred liabilities (49.5) (14.1)

Net deferred tax asset/(liability) $ (16.6) $ (3.8)

At December 26, 2002, the Company has net operating loss carryforwards for federal income tax purposes of approximately $99.1 million with expiration commencing during 2007. The Company's net operating loss carryforwards were generated by the entities of United Artists and Edwards. 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 the net operating losses acquired from United Artists and Edwards may be impaired as a result of the "ownership change" limitations.

In assessing the realizable value of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which these temporary differences become deductible. The Company has recorded a valuation allowance against deferred tax assets at December 26, 2002 and January 3, 2002, totaling $59.4 million and $100.3 million, respectively, as management believes it is more likely than not that the deferred tax asset would not be realized in future tax periods. The valuation allowance relates to pre−acquisition deferred tax assets of Edwards and United Artists. Accordingly, future reductions in the valuation allowance will reduce goodwill related to the acquisitions of Edwards and United Artists.

9 MANDATORY REDEEMABLE PREFERRED STOCK

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

As described in Note 1—"The Company and Basis of Presentation" and Note 12—"Related Party Transactions," on April 17, 2002, the Company redeemed approximately $75.3 million or 100% of the mandatory redeemable Series A and Series B preferred stock of Edwards that was held by Anschutz, Oaktree's Principal Activities Group and members of the Edwards family. The difference between the carrying amount and redemption price of $28.2 million was recorded as a charge to equity and is reflected as a reduction of net income available to common stockholders in the accompanying consolidated statement of operations for the year ended December 26, 2002.

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 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. Minimum rentals payable under all non−cancelable operating leases with terms in excess of one year as of December 26, 2002, are summarized for the following fiscal years (in thousands):

2003 $ 204.4 2004 200.6 2005 197.7 2006 195.5 2007 193.4 Thereafter 2,137.5 Rent expense under such operating leases amounted to $231.0 million and $84.5 million for the year ended December 26, 2002 and the period ended January 3, 2002, respectively. Contingent rent expense was $13.6 million and $3.5million for the years ended December 26, 2002 and January 3, 2002, respectively.

Bankruptcy Claims

Regal Cinemas, Inc. and Edwards have bankruptcy claims that remain unsettled and are subject to ongoing negotiation and possible litigation. At December 26, 2002, Regal Cinemas had accrued approximately $23.6 million for the estimated costs to resolve such bankruptcy claims. In the opinion of management, based on its examination of these matters, its experience to date and discussions with legal counsel, the outcome of these legal matters, after taking into consideration the amounts already accrued, is not expected to have a material effect on the Company's liquidity or results of operations. To the extent the Regal Cinemas claims are allowed by the bankruptcy court, they will be funded with cash on hand, cash flow from operations or borrowings under Regal Cinemas revolving credit facility. To the extent the Edwards claims are allowed by the bankruptcy court, they will be funded from restricted cash that has been set aside, cash on hand, cash from operations and, if the allowed claims exceed $55 million, from contributions by Anschutz and Oaktree's Principal Activities Group. The timing of these claims will depend upon the resolution of these claims. See also Note 3—"Chapter 11 Proceedings" and Note 12—"Related Party Transactions" to the accompanying consolidated financial statements.

Other

Regal Cinemas, Inc., Edwards and United Artists are defendants in a number of claims arising from their decision to file voluntary petitions for relief under Chapter 11 and to close theatre locations or to cease construction of theatres on sites for which such entities had contractual obligations to lease such property. The Company and its subsidiaries are also presently involved in various legal proceedings arising in the ordinary course of its business operations, including personal injury claims, employment and contractual matters and other disputes. The Company believes it has adequately provided for the settlement of such matters. Management believes any additional liability with respect to the above proceedings will not be material in the aggregate to the Company's consolidated financial position, results of operations or cash flows.

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

11 CAPITAL STOCK AND STOCK OPTION PLAN

As of December 26, 2002, the Company's authorized capital stock consisted 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 were offered in connection with the Company's initial public offering in May 2002. The Company's Class A common stock is listed on the New York Stock Exchange under the trading symbol "RGC." As of December 26, 2002, 46,448,382 shares of Class A common stock were outstanding. Of the authorized shares of Class B common stock, 85,287,957 shares were outstanding as of December 26, 2002, all of which are held by Anschutz and Oaktree's Principal Activities Group. Of the authorized shares of the preferred stock, no shares are issued and outstanding as of December 26, 2002. The material terms and provisions of the Company's certificate of incorporation affecting the relative rights of the Class A common stock and the Class B common stock are described below.

Common Stock

The Class A common stock and the Class B common stock are 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 the Company's remaining assets available for distribution to the stockholders in the event of the Company's 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 the Company's capital stock. The outstanding shares of common stock are, 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 the Company may designate and issue in the future.

Preferred Stock The Company's certificate of incorporation allows us to issue without stockholder approval preferred stock having rights senior to those of the common stock. As of December 26, 2002, no shares of preferred stock are outstanding. The Company's board of directors is 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. The 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.

Options and Warrants

See "2002 Stock Incentive Plan" below for detail with respect to the Company's stock option plan. At December 26, 2002 Company had 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.

2002 Stock Incentive Plan

In 2002, the Company established the 2002 Stock Incentive Plan (the "Plan") for a total of 11,194,354 authorized shares which provide for the granting of incentive stock options and non−qualified stock options to principally officers and employees of the Company. The Plan also provides for grants of restricted stock that are subject to restrictions and risks of forfeiture. As of December 26, 2002, the Company had outstanding options to purchase a total of 9,255,157 shares of Class A common stock under the Plan. As of December 26, 2002, the number of securities remaining available for future issuance under the Plan totaled 1,014,390 shares.

In conjunction with the exchange transaction on April 12, 2002 (see Note 1—"The Company and Basis of Presentation"), the holders of outstanding options of United Artists and Regal Cinemas received replacement options to purchase 8,832,147 shares of Regal Class A common stock at prices ranging from $4.44 to $12.87 per share. As a result, stock option information presented herein prior to the exchange of options has been retroactively restated to reflect the effects of the exchange transaction. Deferred stock compensation totaling approximately $22.9 million was recorded based on the intrinsic value of the options exchanged using the value of the exchange transaction ($11.06 per share). Such options are generally exercisable in installments of 20% per year from the original grant date of the exchanged options and expire no later than 10 years from the date of grant. For the period from April 12, 2002 through December 26, 2002, the Company recorded compensation expense of $1.7 million, net of tax, related to such options.

Stock option grants issued subsequent to the exchange transaction have been established at prices not less than the fair market value as of the date of grant. Such grants are exercisable in installments of 20% per year and expire no later than 10 years from the date of grant.

The following table summarizes information about stock options outstanding as of December 26, 2002, as restated for the effects of the exchange transaction:

Weighted Weighted Average Grant Options Options Average Exercise Date Fair Exercisable Outstanding Shares Price Value At Year End

Under option at March 2, 2001 — Options granted in 2001 at fair value 2,287,552 $ 5.37 $ 5.81 Options exercised in 2001 — Options canceled or redeemed in 2001 —

Under option at January 3, 2002 2,287,552 $ 5.37 — Options granted in 2002 above fair value 298,900 $ 21.89 $ 6.21 Options granted in 2002 at fair value 7,825,296 $ 11.00 $ 5.00 Options exercised in 2002 (954,807) $ 7.19 Options canceled or redeemed in 2002 (231,784) $ 12.88

Under option at December 26, 2002 9,225,157 $ 10.60 157,163

The following table summarizes information about the Plan's stock options at December 26, 2002, including the weighted average remaining contractual life and weighted average exercise price:

Options Outstanding Options Exercisable

Weighted Weighted Weighted Number Average Average Number Average Outstanding Contractual Exercise Exercisable Exercise Range of Exercise Price at 12/26/02 Life Price at 12/26/02 Price

$ 4.44 − 8.87 7,395,717 9.36 $ 8.01 102,923 $ 7.90 $ 8.88 − 12.87 342,240 9.36 $ 10.30 54,240 $ 12.52 $19.00 − 23.25 1,487,200 9.46 $ 21.79 — —

9,225,157 157,163

The Company utilizes the intrinsic value method of accounting for stock option grants in accordance with the provisions of APB No. 25, Accounting for Stock Issued to Employees, and related interpretations. Had the fair value of options granted under these plans been recognized in accordance with SFAS No. 123 as compensation expense on a straight−line basis over the vesting period of the grants, the Company's net income available to common stockholders would have been recorded in the amounts indicated below (in millions except per share data):

Period ended Year ended January 3, December 26, 2002 2002 Net income available to common stockholders, as reported: $ 89.0 $ 4.9 Less: Total stock−based employee compensation expense determined under fair value based method for all awards, net of related tax effects (3.1) (0.6)

Pro forma net income 85.9 4.3 Diluted earnings per share: As reported $ 0.79 $ 0.28 Pro forma $ 0.77 $ 0.25 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 of each option grant is estimated on the date of grant using (1) the minimum value method for options granted prior to the exchange transaction and (2) the Black−Scholes option pricing model for the exchanged options and all options issued after the exchange transaction.

The weighted−average grant−date fair value of options granted in 2002 and 2001 were estimated using the Balck−Scholes option pricing model with the following assumptions:

Year ended Period ended December 26, January 3, 2002 2002

Risk−free interest rate 4.0 − 4.9% 5.4% Expected life (years) 7.5 10.0 Expected volatility 0.0 − 0.39 0.0 Expected dividend yield 0.0 − 3.0% 0.0 12 RELATED PARTY TRANSACTIONS

Edwards Bankruptcy Claims

Under the Edwards Plan, Anschutz and Oaktree's Principal Activities Group have agreed to contribute to Edwards $0.90 for each $1.00 of allowed general unsecured claims in excess of $55.0 million, up to $13.5 million. For each $900 contributed, Anschutz and Oaktree's Principal Activities Group will receive $1,044, up to a maximum of $15,663,333, from Ms. Carole Ann Ruoff and Ms. Joan Edwards Randolph, both former stockholders of Edwards, and from Edwards Affiliated Holdings, LLC, a company controlled by Mr. W. James Edwards, another former stockholder of Edwards. Regal will also acquire up to 331,451 shares of its Class A common stock from Edwards Affiliated Holdings, LLC, based on the dollar amount contributed by Anschutz and Oaktree's Principal Activities Group. Anschutz and Oaktree's Principal Activities Group will, in turn, receive the same number of shares from Regal, and will also receive from Ms. Ruoff and Ms. Randolph an aggregate of up to $7,384,469 in cash, in each instance based on the amount contributed and allocated between Anschutz and Oaktree's Principal Activities Group in relation to their respective contributions.

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

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

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

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

Payment of Edwards' Subordinated Notes

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

Guaranties of Certain Edwards' Lease Obligations

On March 8, 2002, Anschutz entered into a Guaranty for the benefit of Starwood Wasserman Fresno LLC pursuant to which Anschutz unconditionally and irrevocably agreed to guaranty the full and timely payment and performance of all of the duties, obligations and covenants of Edwards under a certain Lease dated December 27, 1999 entered into by Edwards and Starwood Wasserman Fresno LLC. Under such Lease, Edwards leases property located in Fresno, California from Starwood Wasserman Fresno LLC for the purpose of operating a theatre on such property. On December 31, 2002, the Guaranty was terminated and replaced by a new joint and several guaranty from Regal and Regal Cinemas, Inc. Pursuant to the new Guaranty, if Edwards defaults under the Lease, Starwood Wasserman Fresno LLC may proceed immediately against Regal and Regal Cinemas, Inc. or Edwards, or both, or may enforce against Regal and Regal Cinemas, Inc. or Edwards, or both, any rights it has under the Lease or pursuant to applicable laws.

On March 8, 2002, Anschutz entered into a Guaranty for the benefit of Starwood Wasserman Ontario LLC pursuant to which Anschutz unconditionally and irrevocably agreed to guaranty the full and timely payment and performance of all of the duties, obligations and covenants of Edwards under a certain Lease dated July 16, 1999 entered into by Edwards and Starwood Wasserman Ontario LLC. Under such Lease, Edwards leases property located in Ontario, California from Starwood Wasserman Ontario LLC for the purpose of operating a theatre on such property. On December 31, 2002, the Guaranty was terminated and replaced by a new joint and several guaranty from Regal and Regal Cinemas, Inc. Pursuant to the new Guaranty, if Edwards defaults under the Lease, Starwood Wasserman Ontario LLC may proceed immediately against Regal and Regal Cinemas, Inc. or Edwards, or both, or may enforce against Regal and Regal Cinemas, Inc. or Edwards, or both, any rights it has under the Lease or pursuant to applicable laws.

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

Other Transactions

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

During the year ended December 26, 2002, Regal CineMedia incurred approximately $391,000 of expenses payable to certain Anschutz affiliates for reimbursement of travel and marketing expenses. Additionally, Regal CineMedia has recorded revenue of $718,000 from certain affiliates of Anschutz and Oaktree's Principal Activities Group related to marketing and business meeting services provided by Regal CineMedia to these affiliates.

13 EMPLOYEE BENEFIT PLAN

The Company sponsors an employee benefit plan, the Regal Cinemas, Inc. 401(k) Plan, under section 401(k) of the Internal Revenue Code for the benefit of substantially all full−time employees. The plan provides that participants may contribute up to 20% of their compensation, subject to Internal Revenue Service limitations. The plan currently matches an amount equal to 40% of the participant's contributions up to 6% of the participant's compensation. Employee contributions are invested in various investment funds based upon elections made by the employee.

In conjunction with the exchange transaction in April 2002 (see Note 1—"The Company and Basis of Presentation"), Regal Cinemas', United Artists' and Edwards' management and operations were combined. Accordingly, during May 2002, United Artists transferred all plan assets (approximately $19.9 million) under the United Artists Theatre Circuit 401(k) Savings Plan to the Regal Cinemas, Inc. 401(k) plan. The Company made discretionary contributions of approximately $1.0 million and $1.1 million to the Regal Cinemas, Inc. and United Artists plans in 2002 and 2001, respectively.

14 EARNINGS PER SHARE

Basic earnings per share is computed on the basis of the weighted average number of the common shares outstanding. Diluted earnings per share is computed on the basis of the weighted average number of common shares outstanding plus the effect of potentially dilutive common stock options and warrants. The components of basic and diluted earnings per share are as follows (in millions, except share data):

Year ended Period ended December 26, January 3, 2002 2002

Net income $ 117.2 $ 4.9 Less: Loss on redemption of preferred stock 28.2 —

Net income available to common stockholders $ 89.0 $ 4.9 Weighted average shares outstanding (in thousands): Basic: 107,738 16,104 Add common stock equivalents 4,546 1,264

Diluted: 112,284 17,368 Earnings per share Basic: $ 0.83 $ 0.30 Diluted: $ 0.79 $ 0.28 15 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, inventory, accounts payable and accrued liabilities:

The carrying amounts approximate fair value because of the short maturity of these instruments.

Long term obligations, excluding capital lease obligations and lease financing arrangements:

The fair value of the Regal Cinemas Senior Credit Facility, which consists of a term loan and revolving credit facility, is estimated based on quoted market prices as of December 26, 2002. 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 Regal Cinemas Senior Subordinated Notes are estimated based on quoted market prices for these issuances as of December 26, 2002. The fair value of United Artists borrowings under the United Artists Term Credit Facility was estimated based on dealer quotes at January 3, 2002. The carrying amount of the Edwards Senior Term Loan at January 3, 2002 approximated fair value as the interest rates reset periodically. In addition, the carrying amount of the Edwards Subordinated Notes at January 3, 2002 approximated fair value due to the timing of their origination. The fair value of the Company's other debt obligations were based on recent financing transactions for similar debt issuances and carrying value approximates fair value. The aggregate carrying amounts and fair values of long−term debt at December 26, 2002 and January 3, 2002 consist of the following:

December 26, 2002 January 3, 2002 (In millions)

Carrying amount $ 576.5 $ 436.2 Fair value $ 599.0 $ 432.6

16 SUBSEQUENT EVENTS

On February 3, 2003, the Company declared a cash dividend of $0.15 per share on each share of the Company's Class A and Class B common stock, payable on March 14, 2003, to stockholders of record on February 25, 2003.

On February 4, 2003, the Company entered into a definitive stock purchase agreement pursuant to which the Company agreed to acquire certain assets of Hoyts Cinemas for a combination of cash of approximately $100 million and common stock (ranging from 4,308,390 to 4,761,905 shares based on the 14 trading days ending on the second trading day prior to closing of the transaction) and the assumption of certain capital leases. Regal expects to acquire 52 of the 97 Hoyts Cinemas theatres representing 554 screens located in 10 states in the Northeastern United States. Regal anticipates closing the transaction during the first half of 2003.

INDEPENDENT AUDITORS' REPORT

The Board of Directors United Artists Theatre Company:

We have audited the accompanying consolidated statements of operations and cash flows of United Artists Theatre Company 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 (Historical 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.

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 disclosure sin 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 aforementioned consolidated financial statements present fairly, in all material respects, the results of the operations and cash flows of United Artists Theatre Company for the forty−four weeks ended January 3, 2002 (Reorganized Period) and for the nine−weeks ended March 1, 2001 and the year ended December 28, 2000 (Historical Period) in conformity with the accounting principles generally accepted in the United States of America.

As described in Note 1 and 2 of 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 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 Historical Company's pre−reorganization consolidated financial statements.

/s/ KPMG LLP

Denver, Colorado February 8, 2002

UNITED ARTISTS THEATRE COMPANY AND SUBSIDIARIES

Consolidated Statements of Operations

(Amounts in Millions)

Reorganized Company Historical Company

Forty−Four Weeks Ended Nine Weeks Ended Year Ended January 3, 2002 March 1, 2001 December 28, 2000

Revenue: Admissions $ 322.2 $ 69.1 372.4 Concession sales 130.1 26.9 154.6 Other 19.2 3.2 23.3

471.5 99.2 550.3

Costs and expenses: Film rental and advertising expenses 179.3 36.2 204.9 Direct concession costs 14.8 3.1 18.0 Other operating expenses 181.4 35.7 227.5 Sale and leaseback rentals (note 12) 14.8 2.9 16.9 General and administrative 16.8 3.2 21.3 Depreciation and amortization 35.6 6.8 44.8 2.9 1.1 55.1 Asset impairments, lease exit and restructure costs (note 8) Gain on disposition of assets, net (2.1) (4.6) (14.4)

443.5 84.4 574.1

Operating income (loss) from continuing operations 28.0 14.8 (23.8) Other income (expense): Interest, net (note 4) (18.2) (6.9) (69.5) Minority interests in earnings of consolidated subsidiaries (0.1) (1.1) (2.0) Other, net (2.9) 0.1 (2.2)

(21.2) (7.9) (73.7) Income (loss) before reorganization items, income tax expense, discontinued operations, and extraordinary items 6.8 6.9 (97.5)

Reorganization items (note 1): — 64.9 (25.4)

Income (loss) before income tax expense, discontinued operations and extraordinary item 6.8 71.8 (122.9) Income tax expense (note 10) (3.6) — (0.7)

Income (loss) before discontinued operations and extraordinary items 3.2 71.8 (123.6) Discontinued operations (note 9) — — —

Income (loss) before extraordinary item 3.2 71.8 (123.6) Extraordinary item, net of income taxes (note 1) — 462.6 —

Net income (loss) $ 3.2 $ 534.4 (123.6)

See accompanying notes to consolidated financial statements.

UNITED ARTISTS THEATRE COMPANY AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Amounts in Millions)

Historical Company

Reorganized Company Forty−Four Weeks Nine Weeks Ended Year Ended Ended January 3, 2002 March 1, 2001 December 28, 2000

Net income (loss) $ 3.2 $ 534.4 (123.6) Non−cash expense associated with discontinued operations — — (0.2) Effect of leases with escalating minimum annual rentals 3.1 0.6 4.7 Depreciation and amortization 35.6 6.8 44.8 Provision for impairments and lease exit costs 2.9 1.1 49.0 Reorganization items — (64.9) 25.4 Gain on disposition of assets, net (2.1) (4.6) (14.4) Minority interests in earnings of consolidated subsidiaries 0.1 1.1 2.0 Early lease termination payments — — (0.5) Extraordinary gain on extinguishments of debt — (462.6) — Deferred income taxes (2.4) — — Change in assets and liabilities: Receivables (4.1) 2.2 (0.5) Prepaid expenses and concession inventory (5.1) (3.8) 3.8 Other assets (0.8) (0.2) — Accounts payable — (10.6) (2.5) Accrued and other liabilities 8.4 (2.2) 10.8

Net cash provided by (used in) operating activities 38.8 (2.7) (1.2) Cash flow from investing activities: Capital expenditures (12.8) (0.6) (18.2) Change in receivable from sale and leaseback escrow — — — Proceeds from sale and leaseback transaction and escrow — — — Proceeds from disposition of assets, net 16.9 4.5 17.0 Change in investments and receivables, net — — 4.1 Other, net 2.0 (1.2) (1.4)

Net cash provided by (used in) investing activities 6.1 2.7 1.5

Cash flow from financing activities: Debt borrowings 68.0 22.5 17.0 Debt repayments (87.2) (16.8) (16.1) Decrease in cash overdraft (1.5) (3.1) (0.1) Other, net (1.3) — (0.5)

Net cash provided by (used in) financing activities (22.0) 2.6 0.3

Net cash used in reorganization items (6.4) (7.0) (5.2)

Net increase (decrease) in cash and cash equivalents 16.5 (4.4) (4.6) Cash and cash equivalents: Beginning of period 7.0 11.4 16.0

End of period $ 23.5 $ 7.0 11.4

Supplemental cash flow information: Cash paid for interest $ 6.1 $ 7.9 50.1

Cash paid for income tax $ 0.1 $ — 0.6

See accompanying notes to consolidated financial statements.

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 Historical 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 "Historical 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 Historical 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 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 Historical 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 Historical Company subject to compromise as of March 1, 2001 (amounts in millions):

Trade accounts payable and other $ 30.8 Debt and related accrued interest 740.7 Lease exit costs 39.6

Total liabilities subject to compromise $ 811.1

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 Historical 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 Historical 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 Historical Company's reorganization from the Petition Date to the Effective Date have been reflected as reorganization items in the accompanying consolidated statement of operations.

Reorganization items (expenses) recorded by the Historical Company during the nine weeks ended March 1, 2001 and the fifty−two weeks ended December 28, 2000 consisted of the following (in millions):

March 1, 2001 December 28, 2000

Adjustments of assets and liabilities to fair value $ 71.8 $ — Professional fees (6.4) (4.9) Asset impairments (0.4) (3.8) Deferred loan costs — (16.4) Other (0.1) (0.3)

$ 64.9 $ (25.4)

(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 and an adjustment to stockholder's equity of over $600 million, will have a significant effect on United Artists' future statements of operations.

The implementation of the Plan also resulted in, among other things, the satisfaction or disposition of various types of claims against the Historical 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.

(c) Investments

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 and $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 year ended December 28, 2000, 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 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.

(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

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

(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 period 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. The adoption of this standard will not have a material impact on the financial position or the results of operations of United Artists.

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", 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 a Term Facility and a new $35.0 million Revolving Credit Facility.

Interest, net includes amortization of deferred loan costs of $0.5 million, $0.5 million and $2.6 million for the forty−four weeks ended January 3, 2002, the nine weeks ended March 1, 2001, and the fiscal year ended December 28, 2000, respectively. Additionally, interest, net includes interest income of $0.3 million, $0.1 million and $0.4 million for the forty−four weeks ended January 3, 2002, the nine weeks ended March 2, 2001 and the fiscal year ended December 28, 2000, respectively.

The Historical 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) 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 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.

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.

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:

Weighted Number of Average Options Options Exercise Price 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.

Number Weighted Average Weighted Average Number Exercisable Weighted Average Exercise Price Outstanding Remaining Contractual Life Exercise Price as of January 3, 2002 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

(6) 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.

(7) 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 millions):

Forty−Four Weeks Nine Weeks Ended Ended Fiscal Year January 3, 2002 March 1, 2001 2000

Asset impairments $ 2.9 $ 1.1 $ 37.8 Lease exit costs — — 11.3 Restructure costs — — 6.0 Other — — —

$ 2.9 $ 1.1 $ 55.1

Lease Exit Costs

During 2000, 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 in 2000.

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.

(8) 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.

(9) 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 millions):

Forty−Four Weeks Nine Ended January 3, Weeks Ended Fiscal Year 2002 March 1, 2001 2000

Current income taxes: Federal $ 5.4 $ — $ 0.4 State 0.6 — 0.3

Total 6.0 — 0.7

Deferred income taxes: Federal (2.2) — — State (0.2) — —

Total deferred provision (benefit) (2.4) — —

Total income tax provision $ 3.6 $ — $ 0.7

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 year ended 2000, 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.

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 millions):

Forty−Four Weeks Nine Ended January 3, Weeks Ended Fiscal Year 2002 March 1, 2001 2000

Expected tax provision (benefit) $ 2.4 $ 187.0 $ (43.2) State tax net of federal benefit 0.4 — — Change in valuation allowance Gain from discharge of indebtedness — (147.2) — Other — 5.7 46.2 Fresh start adjustments — (49.0) — Reorganization costs 0.7 2.2 — Increase in basis of assets — — — Other 0.1 1.3 (2.3)

Provision for income taxes $ 3.6 $ — $ 0.7

At the effective date of the Plan, the Historical 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 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 Historical 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.

(10) 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.

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 millions):

In−Theatre Theatre Operations Advertising STN Total

As of and for the forty−four weeks ended January 3, 2002 Revenue $ 460.0 $ 8.7 $ 2.8 $ 471.5 Operating income 18.7 8.2 1.1 28.0 Depreciation and amortization 35.2 0.1 0.3 35.6 Assets 451.9 0.4 1.3 453.6 Capital expenditures 12.4 — 0.4 12.8

As of and for the nine weeks ended March 1, 2001 Revenue $ 97.0 $ 1.2 $ 1.0 $ 99.2 Operating income 13.3 1.2 0.3 14.8 Depreciation and amortization 6.8 — — 6.8 Assets 415.9 1.2 5.4 422.5 Capital expenditures 0.6 — — 0.6

(11) 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 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 gains were eliminated.

Rent expense for theatre and corporate operations is summarized as follows (amounts in millions):

Forty−Four Weeks Nine Ended January 3, Weeks Ended Fiscal Year 2002 March 1, 2001 2000

Minimum rental $ 70.7 $ 11.7 $ 76.4 Contingent rental 2.9 0.4 1.5 Effect of leases with escalating Minimum annual rentals 2.7 0.6 4.7 Rent tax 0.3 0.1 0.5

$ 76.6 $ 12.8 $ 83.1

Approximately $14.8 million, $2.9 million and $16.9 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 and the year ended 2000, 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 millions):

Third Party Fiscal Years Leases

2002 $ 73.7 2003 72.7 2004 72.5 2005 71.5 2006 66.7 Thereafter 639.7 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.

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. 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.

(12) Comparative Quarterly Financial Information (unaudited)

Fiscal Year 2001

Four Weeks Nine Weeks Forty−Four Ended Ended Weeks Ended Fourth Third Second March 29, March 1, January 3, 2001 Quarter Quarter Quarter 2001 2001

(in millions)

Revenue $ 471.5 $ 155.0 $ 158.6 $ 128.5 $ 29.4 $ 99.2 Operating income (loss) from continuing operations 28.0 13.2 13.0 5.7 (3.9) 14.8 Income (loss) before reorganization items, income tax expenses, and extraordinary item 6.8 8.6 6.3 (1.2) (6.9) 6.9 Reorganization items — — — — — 64.9 Extraordinary item — — — — — 462.6 Net income (loss) 3.2 5.1 6.2 (1.2) (6.9) 534.4

Fiscal Year 2000

Fourth Third Second Full Year Quarter Quarter Quarter First Quarter

(in millions)

Revenue $ 550.3 $ 136.7 $ 149.5 $ 138.6 $ 125.5 Operating income (loss) from continuing operations (23.8) 9.9 (15.4) (17.9) (0.4) Loss before reorganization items and income tax expense (97.5) (3.6) (37.3) (37.4) (19.2) Reorganization items (25.4) (8.0) (17.4) — — Net loss (123.6) (11.7) (54.8) (38.0) (19.1)

(13) 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. Regal is an entity formed and controlled by Anschutz, the 84% stockholder of United Artists. Also on March 8, 2002 Regal agreed to exchange its stock for stock in two other theatre companies also commonly controlled by Anschutz.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Biographical and other information regarding our executive officers is provided in Part I of this Form 10−K under the heading "Executive Officers of the Registrant" as permitted by General Instruction G to Form 10−K. The other information required by this item is incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting (under the headings "Proposal 1. Election of Class I Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance") to be held on May 7, 2003 and to be filed with the Securities and Exchange Commission within 120 days after December 26, 2002.

Item 11. EXECUTIVE COMPENSATION

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting (under the headings "Executive Compensation" and "Proposal 1. Election of Class I Directors—Compensation of Directors") to be held on May 7, 2003 and to be filed with the Securities and Exchange Commission within 120 days after December 26, 2002.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting (under the headings "Beneficial Ownership of Voting Securities" and "Executive Compensation—Equity Compensation Plan Information") to be held on May 7, 2003 and to be filed with the Securities and Exchange Commission within 120 days after December 26, 2002.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated by reference to the Company's Proxy Statement for its Annual Stockholders Meeting (under the heading "Certain Relationships and Related Transactions") to be held on May 7, 2003 and to be filed with the Securities and Exchange Commission within 120 days after December 26, 2002.

Item 14. CONTROLS AND PROCEDURES

Within the 90 days prior to the date of this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Co−Chief Executive Officers and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a−14(c) and 15d−14(c). Based upon that evaluation, our Co−Chief Executive Officers and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective in timely alerting them to material information required to be included in the Company's periodic Securities and Exchange Commission filings relating to the Company (including its consolidated subsidiaries). There were no significant changes in the Company's internal controls or in other factors that could significantly affect these internal controls subsequent to the date of our most recent evaluation thereof.

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8−K

(a) The following documents are filed as a part of this report on Form 10−K:

(1) Financial Statements of Regal Entertainment Group:

Independent Auditors' Report regarding Regal's consolidated financial statements

Regal's Consolidated Balance Sheets as of December 26, 2002 and January 3, 2002

Regal's Consolidated Statements of Operations for the fiscal year ended December 26, 2002 and the period ended January 3, 2002

Regal's Consolidated Statements of Stockholders' Equity for the fiscal year ended December 26, 2002 and the period ended January 3, 2002

Regal's Consolidated Statements of Cash Flows for the for the fiscal year ended December 26, 2002 and the period ended January 3, 2002

Notes to Regal's Consolidated Financial Statements

Financial Statements of United Artists Theatre Company and Subsidiaries:

Independent Auditors' Report regarding United Artists' consolidated financial statements

United Artists' Consolidated Statements of Operations for the fiscal years ended January 3, 2002 (Reorganized Company) and December 28, 2000 (Historical Company)

United Artists' Consolidated Statements of Cash Flows for the fiscal years ended January 3, 2002 (Reorganized Company) and December 28, 2000 (Historical Company)

Notes to United Artists' Consolidated Financial Statements

(2) Financial Statement Schedules have been omitted because of the absence of conditions under which they are required, or because the information is shown elsewhere in this Form 10−K.

(3) Exhibits:

Exhibit Number Description

2.1 Regal Cinemas Amended Joint Plan of Reorganization dated December 5, 2001 (filed as exhibit 2.1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference)

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 Disclosure Statement for Second Amended Joint Plan of Reorganization

2.5 Edwards Theatres Second Amended Plan of Reorganization dated July 23, 2001 (filed as exhibit 2.5 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference)

2.6 Edwards Theatres Disclosure Statement to Accompany Debtor's Second Amended Plan of Reorganization (filed as exhibit 2.6 to the Registration Statement of the Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference)

2.7 Exchange Agreement, dated as of March 11, 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 (filed as exhibit 2.7 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference)

3.1 Amended and Restated Certificate of Incorporation of Registrant (filed as exhibit 3.1 to the Registrant's Form 10−Q for the fiscal quarter ended March 28, 2002 (Commission File No. 001−31315), and incorporated herein by reference)

3.2 Amended and Restated Bylaws of Registrant (filed as exhibit 3.2 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

4.1 Specimen Class A Common Stock Certificate (filed as exhibit 4.1 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

4.2 Specimen Class B Common Stock Certificate (filed as exhibit 4.2 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

4.3 Amended and Restated Credit Agreement, dated as of August 12, 2002, among Regal Cinemas Corporation and Regal Cinemas, Inc. as Co−Borrowers, the Lenders Party thereto, Lehman Brothers Inc. and Credit Suisse First Boston as Joint Advisors, Joint Lead Arrangers and Joint Book Managers, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent, and Lehman Commercial Paper Inc., as Administrative Agent (filed as Exhibit 10.1 to Regal Cinemas Corporations' Form 10−Q for the fiscal quarter ended June 27, 2002 (Commission File No. 333−87930), and incorporated herein by reference)

4.4 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 (filed as exhibit 4.6 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference)

4.5 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 (filed as exhibit 4.7 to Amendment No. 1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on April 19, 2002, and incorporated herein by reference)

4.6 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 (filed as exhibit 4.8 to Amendment No. 1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on April 19, 2002, and incorporated herein by reference)

4.7 Third Supplemental Indenture, dated as of November 28, 2002 by and among Regal Cinemas Corporation, as Issuer, Regal CineMedia Corporation, as Guaranteeing Subsidiary, and U.S. Bank National Association, as Trustee

3 4.8 Regal Cinemas Corporation 9 /8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated January 29, 2002

3 4.9 Regal Cinemas Corporation 9 /8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated April 17, 2002 (filed as exhibit 4.10 to Amendment No. 1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on April 19, 2002, and incorporated herein by reference)

4.10 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)

4.11 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference)

4.12 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference)

4.13 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference)

4.14 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference)

4.15 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference)

10.1 Regal Entertainment Group Stockholders Agreement (filed as exhibit 10.1 to the Registration Statement of Registrant on For S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference)

10.1.1 Regal Entertainment Group Amended and Restated Stockholders' Agreement (filed as exhibit 10.1 to the Registrant's Form 10−Q for the quarter ended September 26, 2002 (Commission File No. 001−31315), and incorporated herein by reference)

10.2* 2002 Regal Entertainment Group Stock Incentive Plan (filed as exhibit 10.2 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

10.2.1* Form of Stock Option Agreement (filed as exhibit 10.2.1 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

10.3 Form of Warrant Agreement (filed as exhibit 10.2.3 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference)

10.4* Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Michael L. Campbell (filed as exhibit 10.4 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

10.5* Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Kurt C. Hall (filed as exhibit 10.5 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

10.6* Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Amy E. Miles (filed as exhibit 10.6 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

10.7* Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Gregory W. Dunn (filed as exhibit 10.7 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference)

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 (Commission File No. 33−49598) on October 5, 1992, and incorporated herein by reference)

21.1 Subsidiaries of the Registrant

23.1 Consent of KPMG LLP, Independent Accountants

23.2 Consent of KPMG LLP, Independent Accountants

24.1 Powers of Attorney (included on the signature page)

99.1 Written Statement of Co−Chief Executive Officers and Chief Financial Officer Pursuant to Section 906 of the Sarbanes−Oxley Act of 2002 (18 U.S.C. Section 1350)

* Identifies each management contract or compensatory plan or arrangement

(b) Current Reports on Form 8−K filed during the fourth quarter of fiscal year 2002:

Current report on Form 8−K filed under "Item 5. Other Events" on October 23, 2002

(c) The exhibits required to be filed herewith are listed above.

(d) Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

REGAL ENTERTAINMENT GROUP

March 26, 2003 By: /s/ MICHAEL L. CAMPBELL

Michael L. Campbell Co−Chief Executive Officer

March 26, 2003 By: /s/ KURT C. HALL

Kurt C. Hall Co−Chief Executive Officer POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Michael L. Campbell, Kurt C. Hall, Amy E. Miles and Peter B. Brandow and each of them, his or her true and lawful attorneys−in−fact and agents, with full power of substitution and resubstitution, from such person and in each person's name, place and stead, in any and all capacities, to sign any and all amendments to this Form 10−K and to file the same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys−in−fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys−in−fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ MICHAEL L. CAMPBELL Director, Co−Chairman and Co−Chief Executive Officer and Chief Executive Officer of Regal Cinemas March 26, 2003 Michael L. Campbell Corporation (Co−Principal Executive Officer)

/s/ KURT C. HALL Director, Co−Chairman and Co−Chief Executive Officer and President and Chief Executive Officer of Regal March 26, 2003 CineMedia Corporation (Co−Principal Executive Kurt C. Hall Officer)

/s/ AMY E. MILES Chief Financial Officer (Principal Financial Officer and March 26, 2003 Principal Accounting Officer) Amy E. Miles

/s/ PHILIP F. ANSCHUTZ Director March 26, 2003 Philip F. Anschutz

/s/ MICHAEL F. BENNETT Director March 26, 2003 Michael F. Bennett

/s/ STEPHEN A. KAPLAN Director March 26, 2003 Stephen A. Kaplan

/s/ CRAIG D. SLATER Director March 26, 2003 Craig D. Slater

/s/ ALFRED C. ECKERT, III Director March 26, 2003 Alfred C. Eckert, III

/s/ ROBERT F. STARZEL Director March 26, 2003 Robert F. Starzel

/s/ THOMAS D. BELL, JR. Director March 26, 2003 Thomas D. Bell, Jr.

CERTIFICATIONS

Certification by the Co−Chief Executive Officer of Regal Entertainment Group Pursuant to Section 302 of the Sarbanes−Oxley Act of 2002

I, Michael L. Campbell, Co−Chief Executive Officer of Regal Entertainment Group (the "Company"), hereby certify that:

(1) I have reviewed this annual report on Form 10−K of the Company;

(2) Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

(3) Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of, and for, the periods presented in this annual report;

(4) The Company's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a−14 and 15d−14) for the Company and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the Company including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

(5) The Company's other certifying officers and I have disclosed, based on our most recent evaluation, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize, and report financial data and have identified for the Company's auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls; and

(6) The Company's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated this 26th day of March, 2003

/s/ MICHAEL L. CAMPBELL

Michael L. Campbell Co−Chief Executive Officer

Certification by the Co−Chief Executive Officer of Regal Entertainment Group Pursuant to Section 302 of the Sarbanes−Oxley Act of 2002

I, Kurt C. Hall, Co−Chief Executive Officer of Regal Entertainment Group (the "Company"), hereby certify that:

(1) I have reviewed this annual report on Form 10−K of the Company;

(2) Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

(3) Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of, and for, the periods presented in this annual report;

(4) The Company's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a−14 and 15d−14) for the Company and have:

(a) designed such disclosure controls and procedures to ensure that material information relating to the Company including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

(5) The Company's other certifying officers and I have disclosed, based on our most recent evaluation, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize, and report financial data and have identified for the Company's auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls; and

(6) The Company's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated this 26th day of March, 2003

/s/ KURT C. HALL

Kurt C. Hall Co−Chief Executive Officer

Certification by the Chief Financial Officer of Regal Entertainment Group Pursuant to Section 302 of the Sarbanes−Oxley Act of 2002 I, Amy E. Miles, Chief Financial Officer of Regal Entertainment Group (the "Company"), hereby certify that:

(1) I have reviewed this annual report on Form 10−K of the Company;

(2) Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;

(3) Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations, and cash flows of the Company as of, and for, the periods presented in this annual report;

(4) The Company's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in the Exchange Act Rules 13a−14 and 15d−14) for the Company and have:

(a) designed such disclosure controls and procedures to ensure that material information relating to the Company including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the Company's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and

(c) presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

(5) The Company's other certifying officers and I have disclosed, based on our most recent evaluation, to the Company's auditors and the audit committee of the Company's board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Company's ability to record, process, summarize, and report financial data and have identified for the Company's auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company's internal controls; and

(6) The Company's other certifying officers and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Dated this 26th day of March, 2003

/s/ AMY E. MILES

Amy E. Miles Chief Financial Officer

Exhibit Index

Exhibit Number Description

2.1 Regal Cinemas Amended Joint Plan of Reorganization dated December 5, 2001 (filed as exhibit 2.1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference) 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 Disclosure Statement for Second Amended Joint Plan of Reorganization 2.5 Edwards Theatres Second Amended Plan of Reorganization dated July 23, 2001 (filed as exhibit 2.5 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference) 2.6 Edwards Theatres Disclosure Statement to Accompany Debtor's Second Amended Plan of Reorganization (filed as exhibit 2.6 to the Registration Statement of the Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference) 2.7 Exchange Agreement, dated as of March 11, 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 (filed as exhibit 2.7 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference) 3.1 Amended and Restated Certificate of Incorporation of Registrant (filed as exhibit 3.1 to the Registrant's Form 10−Q for the fiscal quarter ended March 28, 2002 (Commission File No. 001−31315), and incorporated herein by reference) 3.2 Amended and Restated Bylaws of Registrant (filed as exhibit 3.2 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 4.1 Specimen Class A Common Stock Certificate (filed as exhibit 4.1 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 4.2 Specimen Class B Common Stock Certificate (filed as exhibit 4.2 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 4.3 Amended and Restated Credit Agreement, dated as of August 12, 2002, among Regal Cinemas Corporation and Regal Cinemas, Inc. as Co−Borrowers, the Lenders Party thereto, Lehman Brothers Inc. and Credit Suisse First Boston as Joint Advisors, Joint Lead Arrangers and Joint Book Managers, Credit Suisse First Boston, as Syndication Agent, General Electric Capital Corporation, as Documentation Agent, and Lehman Commercial Paper Inc., as Administrative Agent (filed as Exhibit 10.1 to Regal Cinemas Corporations' Form 10−Q for the fiscal quarter ended June 27, 2002 (Commission File No. 333−87930), and incorporated herein by reference) 4.4 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 (filed as exhibit 4.6 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference) 4.5 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 (filed as exhibit 4.7 to Amendment No. 1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on April 19, 2002, and incorporated herein by reference) 4.6 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 (filed as exhibit 4.8 to Amendment No. 1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on April 19, 2002, and incorporated herein by reference) 4.7 Third Supplemental Indenture, dated as of November 28, 2002 by and among Regal Cinemas Corporation, as Issuer, Regal CineMedia Corporation, as Guaranteeing Subsidiary, and U.S. Bank National Association, as Trustee 3 4.8 Regal Cinemas Corporation 9 /8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated January 29, 2002 3 4.9 Regal Cinemas Corporation 9 /8% Senior Subordinated Notes due 2012 Registration Rights Agreement, dated April 17, 2002 (filed as exhibit 4.10 to Amendment No. 1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on April 19, 2002, and incorporated herein by reference) 4.10 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) 4.11 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference) 4.12 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference) 4.13 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference) 4.14 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference) 4.15 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 (Commission File No. 333−1024) on February 5, 1996, and incorporated herein by reference) 10.1 Regal Entertainment Group Stockholders Agreement (filed as exhibit 10.1 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference) 10.1.1 Regal Entertainment Group Amended and Restated Stockholders' Agreement (filed as exhibit 10.1 to the Registrant's Form 10−Q for the quarter ended September 26, 2002 (Commission File No. 001−31315), and incorporated herein by reference) 10.2 2002 Regal Entertainment Group Stock Incentive Plan (filed as exhibit 10.2 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 10.2.1 Form of Stock Option Agreement (filed as exhibit 10.2.1 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 10.3 Form of Warrant Agreement (filed as exhibit 10.2.3 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on March 11, 2002, and incorporated herein by reference) 10.4 Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Michael L. Campbell (filed as exhibit 10.4 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 10.5 Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Kurt C. Hall (filed as exhibit 10.5 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 10.6 Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Amy E. Miles (filed as exhibit 10.6 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 10.7 Employment Agreement, dated May 3, 2002, between Regal Entertainment Group and Gregory W. Dunn (filed as exhibit 10.7 to Amendment No. 2 to the Registration Statement of Registrant on Form S−1 (Commission File No. 333−84096) on May 6, 2002, and incorporated herein by reference) 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 (Commission File No. 33−49598) on October 5, 1992, and incorporated herein by reference) 21.1 Subsidiaries of the Registrant 23.1 Consent of KPMG LLP, Independent Accountants 23.2 Consent of KPMG LLP, Independent Accountants 24.1 Powers of Attorney (included on the signature page) 99.1 Written Statement of Co−Chief Executive Officers and Chief Financial Officer Pursuant to Section 906 of the Sarbanes−Oxley Act of 2002 (18 U.S.C. Section 1350) QuickLinks −− Click here to rapidly navigate through this document

Exhibit 2.4

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE

In re: ) Chapter 11 ) UNITED ARTISTS THEATRE ) Case No. 00−3514 (SLR) COMPANY, et al.,(1) ) (Jointly Administered) ) Debtors. )

SECOND AMENDED DISCLOSURE STATEMENT FOR SECOND AMENDED PLAN OF REORGANIZATION OF UNITED ARTISTS THEATRE COMPANY, UNITED ARTISTS REALTY COMPANY, UNITED ARTISTS PROPERTIES I CORP., UNITED ARTISTS PROPERTIES II CORP., UNITED ARTISTS THEATRE CIRCUIT, INC. AND ITS FILING SUBSIDIARIES UNDER CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE

IMPORTANT DATES

• Date by which Ballots must be received: January 12, 2001

• Date by which objections to Confirmation of the Plan must be filed and served: January 12, 2001

• Hearing on Confirmation of the Plan: January 22, 2001

11 U.S.C. § 1125(b) PROHIBITS SOLICITATION OF AN ACCEPTANCE OR REJECTION OF A PLAN OF REORGANIZATION UNLESS A COPY OF THE PLAN OF REORGANIZATION OR A SUMMARY THEREOF IS ACCOMPANIED OR PRECEDED BY A COPY OF A DISCLOSURE STATEMENT APPROVED BY THE BANKRUPTCY COURT. THIS PROPOSED DISCLOSURE STATEMENT HAS NOT YET BEEN APPROVED BY THE BANKRUPTCY COURT, AND, THEREFORE, THE FILING AND DISSEMINATION OF THIS PROPOSED DISCLOSURE STATEMENT IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED AS, AN AUTHORIZED SOLICITATION PURSUANT TO 11 U.S.C. § 1125 AND RULE 3017 OF THE FEDERAL RULES OF BANKRUPTCY PROCEDURE. NO SUCH SOLICITATION WILL BE MADE EXCEPT AS AUTHORIZED PURSUANT TO SUCH LAW AND RULES.

James H.M. Sprayregen Laura Davis Jones (Bar No. 2436) James W. Kapp III PACHULSKI, STANG, ZIEHL, David R. Seligman YOUNG & JONES PC Jonathan A. Carson 919 North Market Street, 16th Floor KIRKLAND & ELLIS Wilmington, Delaware 19801 200 East Randolph Drive (302) 652−4100 Chicago, Illinois 60601 (312) 861−2000 Co−Counsel to Debtors and Debtors in Possession

Dated: December , 2000

(1) The Debtors are the following entities: United Artists Theatre Company, United Artists Theatre Circuit, Inc., United Artists Realty Company, United Artists Properties I Corp., United Artists Properties II Corp., UAB, Inc., UAB II, Inc., Tallthe Inc., UA Theatre Amusements, Inc., UA International Property Holding, Inc., UA Property Holding II, Inc., United Artists International Management Company, Beth Page Theatre Co., Inc., United Film Distribution Company of South America, U.A.P.R., Inc., King Reavis Amusement Company, Mamaroneck Playhouse Holding Corporation, and R and S Theatres, Inc.

TABLE OF CONTENTS

ARTICLE I EXECUTIVE SUMMARY AND BACKGROUND OF PLAN 1 AND DISCLOSURE STATEMENT A. In General B. Executive Summary 1. Purposes of the Disclosure Statement 2. Voting Record Date; Voting; Required Approvals 3. Debtors' Principal Assets and Liabilities 4. Terms of the Plan; Treatment of Classes of Claims and Equity Interests 5. Liquidation Analysis 6. Risk Factors 7. Reorganized Debtors and the Post−Confirmation Estate 8. Permanent Injunction C. Background of the Debtors and the Events Leading to the Plan 1. Corporate Structure 2. The Debtors' Principal Assets and Liabilities 3. Business Segments 4. The Film Exhibition Industry 5. Recent Developments in the Film Exhibition Industry 6. United Artists' Recent Capital Improvements 7. Declines in Film Exhibition Profitability 8. Summary of Certain Lending Facilities a. Revolving Credit Facility b. Subordinated Notes c. Leverage Lease Financing Transaction 9. Prepetition Restructuring Activities 10. Negotiations and Lock−Up Agreements with the Prepetition Lenders 11. Negotiations and Lock−Up Agreements with the Subordinated Noteholders 12. Negotiations with Unsecured Creditors 13. The Petition Date D. Components of the Plan; Treatment of Classes of Claims and Equity Interests 1. Purpose 2. Treatment of Prepetition Lenders 3. DIP Financing and Cash Collateral 4. Exit Facility 5. Treatment of Claims and Interests 6. Management Equity 7. Funding the Plan 8. No Substantive Consolidation 9. Classification of Claims 10. Treatment of Claases 11. Liquidation Analysis E. Risk Factors F. Reorganized Debtors and the Post−Confirmation Estates G. Prepetition Committees H. Relationship Between the Debtors i

ARTICLE II THE PLAN OF REORGANIZATION A. Introduction B. Classification of Claims and Interests 1. Summary 2. Classification and Treatment of Claims a. Administrative Expense Claims b. Priority Tax Claims c. Classification and Treatment of Claims against UA d. Classification and Treatment of Claims against UATC e. Classification and Treatment of Claims against UAR f. Classification and Treatment of Claims against UAP I g. Classification and Treatment of Claims against UAP II h. Classification and Treatment of Claims against UAB i. Classification and Treatment of Claims against UAB II j. Classification and Treatment of Claims against Tallthe k. Classification and Treatment of Claims against UATA l. Classification and Treatment of Claims against UAIPH m. Classification and Treatment of Claims against UAPH II n. Classification and Treatment of Claims against UAIMC o. Classification and Treatment of Claims against BPTC p. Classification and Treatment of Claims against UFDC q. Classification and Treatment of Claims against UAPR r. Classification and Treatment of Claims against KRAC s. Classification and Treatment of Claims against Mamaroneck t. Classification and Treatment of Claims against R&S

ARTICLE III FINANCIAL ANALYSIS A. Liquidation Analysis 1. Estimate of Net Proceeds 2. Estimate of Costs 3. Distribution of Net Proceeds Under the Absolute Priority Rule 4. Liquidation Analysis 5. Notes to Liquidation Analysis a. Cash and Cash Equivalents b. Accounts and Notes Receivable c. Inventories d. Prepaid Expenses e. Equity Investment in Affiliates f. Net Property, Plant and Equipment and Lease Acquisition Costs g. Other Assets h. Trustee and Professional Fees i. Wind−Down Costs j. Revolver, Term Loan, and Letters of Credit k. Other Secured Debt l. Consolidated Liquidation Analysis 6. Valuation Methodology B. Projections 1. Responsibility for and Purpose of the Projections 2. Summary of Significant Assumptions ii

a. Fiscal Years b. Plan Terms and Consummation c. Assumptions Preceding the Effective Date d. Theatre Divestiture Program e. Screens per Theatre f. General Economic Conditions g. Revenues (i) Net Box Office Receipts (ii) Net Concession Proceeds (iii) Other Net Revenues h. Operating Expenses i. General and Administrative Expenses j. Income Taxes k. Capital Expenditures l. EBITDA m. Interest Expense n. Fresh Start Accounting o. Reorganization Value p. Working Capital q. Restructured Bank Credit Facility 3. Special Note Regarding Forward−Looking Statements 4. Financial Projections 5. Notes to Pro−Forma Reorganized Balance Sheet

ARTICLE IV PROCEDURES FOR TREATMENT OF DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS A. Prosecution of Objections to Claims B. Estimation of Claims C. Payments and Distributions on Disputed Claims D. Allowance of Claims and Interests E. Controversy Concerning Impairment

ARTICLE V TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES A. Assumption of Executory Contracts and Unexpired Leases 1. Generally 2. Notice of Intent to Assume and of Proposed Cure Amount 3. Consent to Mortgage, Security Interest, or Other Lien Upon Unexpired Leases of Real Property 4. Cure of Defaults for Executory Contracts and Unexpired Leases Assumed 5. Notice 6. Approval of Assumptions and Assignments B. Assumption of Documents Supplementary to Executory Contracts or Unexpired Leases C. Assignments Pursuant to the Plan D. Claims Based on Rejection of Executory Contracts or Unexpired Leases E. Indemnification of Directors, Officers and Employees F. Compensation and Benefit Programs

ARTICLE VI MEANS FOR IMPLEMENTATION OF THE PLAN iii

A. Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors B. Cancellation of Notes, Instruments, Common Stock, Preferred Stock and Stock Options C. Issuance of New Securities; Execution of Related Documents D. Transactions Required by the Plan 1. New UA (a) Organization (b) Assets and Liabilities of New UA (c) Governance of New UA (d) Exit Financing Facility 2. New UATC (a) Organization (b) Assets and Liabilities of New UATC (c) Governance of New UATC (d) Exit Financing Facility 3. Reorganized UAR (a) Organization (b) Assets and Liabilities of Reorganized UAR (c) Governance of Reorganized UAR (d) Exit Financing Facility 4. Reorganized UAP I (a) Organization (b) Assets and Liabilities of Reorganized UAP I (c) Governance of Reorganized UAP I (d) Exit Financing Facility (a) Organization (b) Assets and Liabilities of Reorganized UAP II (c) Governance of Reorganized UAP II (d) Exit Financing Facility 6. Reorganized UAIPH (a) Organization (b) Assets and Liabilities of Reorganized UAIPH (c) Governance of Reorganized UAIPH 7. Reorganized UAPH II (a) Organization (b) Assets and Liabilities of Reorganized UAPH II (c) Governance of Reorganized UAPH II 8. Reorganized R&S (a) Organization (b) Assets and Liabilities of Reorganized R&S (c) Governance of Reorganized R&S 9. Mamaroneck (a) Organization (b) Assets and Liabilities of Reorganized Mamaroneck (c) Governance of Reorganized Mamaroneck E. New UA Common Stock Dilution F. Corporate Governance, Corporate Action, and Directors and Officers 1. New Certificates of Incorporation and Formation 2. Corporate Action 3. Directors and Officers of the Reorganized Debtors G. Sources of Cash for Plan Distribution iv

1. New UA Common Stock 2. New UA Convertible Preferred Stock (a) Conversion (b) Dividends (c) Distributions upon Liquidation, Dissolution or Winding Up (d) Adjustments (e) Voting Rights (f) Covenants 2. Equity Elector Warrants and New UA Warrants (a) Purchase Price (i) Exercise (ii) Adjustments 3. Management Stock Options 4. New UA Stockholders' Agreement 5. New UATC Common Stock 6. Exemptions From Registration Under the Securities Act (a) Section 1145 Exemption (b) Subsequent Resales

ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS A. Distributions for Claims Allowed as of the Effective Date B. Distributions by the Reorganized Debtors; Distributions with Respect to Debt Securities C. Delivery and Distributions and Undeliverable or Unclaimed Distributions 1. Delivery of Distributions in General 2. Undeliverable Distributions (a) Holding of Undeliverable Distributions (b) Failure to Claim Undeliverable Distributions (c) Compliance with Tax Requirements D. Distribution Record Date E. Timing and Calculation of Amounts to be Distributed F. De Minimis and Fractional Distribution G. Setoffs H. Surrender of Canceled Instruments or Securities 1. Notes 2. Failure to Surrender Canceled Instruments I. Lost, Stolen, Mutilated or Destroyed Instruments or Securities J. Distributions to Professional Escrow Account on the Effective Date K. Distribution of New UA Warrants

ARTICLE VIII CONDITIONS PRECEDENT A. Condition Precedent to Confirmation B. Conditions Precedent to Consummation C. Waiver of Conditions D. Effect of Non−Occurrence of Conditions to Consummation

ARTICLE IX RELEASE, INJUNCTIVE AND RELATED PROVISIONS A. Subordination B. Certain Mutual Releases v

C. Limited Releases by Holder of Claims D. Preservation of Rights of Action 1. In General 2. Intercompany Claims E. Exculpation F. Injunction

ARTICLE X RETENTION OF JURISDICTION

ARTICLE XI PROCESS OF VOTING AND CONFIRMATION A. Voting Instructions B. Voting Tabulation C. Confirmation Hearing D. Statutory Requirements for Confirmation of the Plan 1. Generally 2. Best Interests of Creditors Test/Liquidation Analysis 3. Financial Feasibility 4. Acceptance by Impaired Class 5. Confirmation Without Acceptance by All Impaired Classes

ARTICLE XII RISK FACTORS A. Financial Information; Disclaimer B. Certain Federal Income Tax Consequences 1. Certain U.S. Federal Income Tax Consequences to the Holders of Claims and Equity Interests a. Consequences to Holders of the Subordinated Notes (i) In General (ii) Accrued Interest b. Consequences to the Prepetition Lenders c. Consequences to Holders of Other Claims d. Consequences to Holders of Equity Interests in the Company 2. Certain U.S. Federal Income Tax Consequences to the Debtors a. Cancellation of Debt 3. Limitation on Net Operating Loss Carryovers and Other Tax Attributes 4. Backup Withholding C. Certain Bankruptcy Considerations 1. Risk of Non−Confirmation of the Plan 2. Nonconsensual Confirmation 3. Delays of Confirmation and/or Effective Date 4. Classification Risks 5. Subordination Risks 6. Consolidation Risks 7. Contingencies Not to Affect Vote of Impaired Classes to Accept the Plan 8. Expiration of Bank Lock−Up Agreements D. Pending Litigation A. 680 Cinema Corp., Bernard Goldberg and Bruce Silverstein v. United Artists Theatre Circuit, Inc., & Ackerman Enterprises, et al. B. 1033 Third Street Corporation v. United Artists Theatre Circuit, Inc. C. Connie Arnold, et al. v. United Artists Theatre Circuit, Inc. et al. vi

D. BF Amarillo, L.P. v. United Artists Theatre E. Bryson Properties XII v. UATC F. Charles Y. Cheng v. UATC. G. CIN Riverbridge, L.P. v. United Artists Theatre Circuit, Inc. H. Cinema 8 Center, LLC v. United Artists Theatre Circuit, Inc. I. Codding Enterprises v. King Reavis Amusement Company and United Artists Theatre Circuit, Inc. J. East Lake Plaza Associates, LLC v. United Artists Theatre Circuit Inc. K. Drexler Technology Corporation v. Dolby Laboratories, Inc. & United Artists Theatre Circuit, Inc., et al. L. Drexler Technology Corporation v. Sony Corporation & United Artists Theatre Circuit, Inc., et al. M. E.C. Pavilion, L.L.C. v. United Artists Theatre Circuit, Inc. N. ESI Ergonomic Solutions, L.L.C. v. United Artists Theatre Circuit, Inc.; American Blast Fax, Inc. et al. O. Equity Landing, Inc. v. United Artists Theatre Circuit, Inc. P. General Electric Capital Corporation v. United Artists Theatre Circuit, Inc. et al. Q. Golden Ring Mall Company Limited Partnership v. United Artists Theatre Circuit, Inc. R. Horton Plaza, LLC v. United Artists Theatre Circuit, Inc. S. Dallas S. Hudgens III v. United Artists Theatre Circuit, Inc. T. IC Theatre Limited Liability Company v. United Artists Theatre Circuit, Inc. U. K−Mart Corporation v. United Artists Theatre Circuit, Inc. V. John Kelly v. United Artists Theatre Circuit Inc. W. Market Place Commercial Limited Partnership v. United Artists Theatre Circuit, Inc. X. Meadows Centre Joint Venture v. United Artists Theatre Circuit, Inc. Y. Oakland Mall, Ltd. v. United Artists Theatre Circuit, Inc. Z. Old Town Val Vista, LLC v. United Artists Theatre Circuit, Inc. AA. P.A. Properties, Inc. v. UATC AB. PALS Associates v. United Artists Theatre Circuit, Inc. AC. Princeton Market Fair Associates, LTD. v. United Artists Theatre Circuit, Inc. AD. Regency Centers, LP v. United Artists Theatre Circuit, Inc. AF. Retail Property Trust v. United Artists Theatre Circuit, Inc. AG. Rouse−Park Meadows, LLC v. United Artists Theatre Circuit, Inc. AH. Simon Property Group, LP v. United Artists Theatre Circuit, Inc. AI. Showscan Entertainment, Inc. v. UATC AJ. Southwest Shopping Center v. United Artists Theatre Circuit, Inc. AK. Spring Valley Improvements, LLC v. United Artists Theatre Circuit, Inc. et al. AL. Sunrise Mall Associates v. United Artists Theatre Circuit, Inc. AM. Michelle Smith v. United Artists Theatre Circuit, Inc. (719C14358). AN. Talisman Roswell, L.L.C. v. United Artists Theatre Circuit, Inc. AO. United Artists Theatre Circuit, Inc. v. CB Richard Ellis AP. United Artists Theatre Circuit, Inc. v. Yale University vii

AQ. Blackfox Parkway Associates, LLC. v. United Artists Theatre Circuit, Inc.

ARTICLE XIII POST−FILING DEVELOPMENTS A. First Day Motions 1. Customer Service Programs 2. Employee Claims and Existing Benefit Programs 3. Film Motion 4. Cash Management Motion 5. Claims Bar Date 6. Lease Rejection and Lease Rejection Procedures Motion 7. Mechanics Lien Motion 8. Essential Trade Creditor Motion 9. DIP Financing and Cash Collateral Motion 10. Scheduling Motion 11. Miscellaneous Procedural and Administrative Motions B. Transfer of Involuntary Bankruptcy Case C. Committees D. United Artists Theatre Company/Trade Subcommittee of the Official Committee of Unsecured Creditors E. Exit Facility Motion

ARTICLE XIV MISCELLANEOUS PROVISIONS A. Dissolution of Committee(s) B. Payment of Statutory Fees D. Modification of Plan E. Revocation of Plan F. Successors and Assigns G. Reservation of Rights H. Section 1146 Exemption I. Further Assurances J. Service of Documents K. Filing of Additional Documents L. Plan Supplement

ARTICLE XV RECOMMENDATION viii

ARTICLE I EXECUTIVE SUMMARY AND BACKGROUND OF PLAN AND DISCLOSURE STATEMENT

A. In General

This Disclosure Statement is being furnished by United Artists Theatre Company, United Artists Realty Company, United Artists Properties I Corp., United Artists Properties II Corp., United Artists Theatre Circuit, Inc. and its Filing Subsidiaries (the "Plan," a copy of which is annexed hereto as Exhibit A), pursuant to Section 1125 of the United States Bankruptcy Code (the "Bankruptcy Code"), in connection with the solicitation of votes (the "Solicitation") for the acceptance or rejection of the Plan, as it may be altered, amended, modified or supplemented from time to time in accordance with the Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules") regarding the outstanding Claims against, and Equity Interests in, the Debtors. Capitalized terms used, but not otherwise defined, herein shall have the meanings given to such terms in the Plan.

Holders of Claims against, and Equity Interests in, the Debtors should read this Disclosure Statement, together with the Plan, the form of Ballot and the Voting Instructions (collectively, the "Solicitation Materials") in their entirety before voting on the Plan. The sources of the information provided in this Disclosure Statement are the Debtors' books and records and certain publicly available filings in the Chapter 11 Cases.

THIS DISCLOSURE STATEMENT CONTAINS A SUMMARY OF CERTAIN PROVISIONS OF THE PLAN, CERTAIN OTHER DOCUMENTS, AND CERTAIN FINANCIAL INFORMATION. THE DEBTORS BELIEVE THAT THESE SUMMARIES ARE FAIR AND ACCURATE. IN THE EVENT OF ANY INCONSISTENCY OR DISCREPANCY BETWEEN A DESCRIPTION IN THIS DISCLOSURE STATEMENT AND THE TERMS AND PROVISIONS OF THE PLAN, OR THE OTHER DOCUMENTS AND FINANCIAL INFORMATION TO BE INCORPORATED THEREIN BY REFERENCE, THE PLAN SHALL GOVERN FOR ALL PURPOSES.

THE STATEMENTS AND FINANCIAL INFORMATION CONTAINED HEREIN HAVE BEEN MADE AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFIED. HOLDERS OF CLAIMS AND EQUITY INTERESTS REVIEWING THIS DISCLOSURE STATEMENT SHOULD NOT INFER AT THE TIME OF SUCH REVIEW THAT THERE HAVE BEEN NO CHANGES IN THE FACTS SET FORTH HEREIN UNLESS SO SPECIFIED. EACH HOLDER OF A CLAIM AND EQUITY INTEREST SHOULD CAREFULLY REVIEW THE PLAN, THIS DISCLOSURE STATEMENT, AND THE EXHIBITS TO BOTH DOCUMENTS IN THEIR ENTIRETY BEFORE CASTING A BALLOT.

NO PARTY IS AUTHORIZED TO GIVE ANY INFORMATION ABOUT OR CONCERNING THE PLAN OTHER THAN THAT WHICH IS CONTAINED IN THIS DISCLOSURE STATEMENT. NO REPRESENTATIONS CONCERNING THE DEBTORS OR THE VALUE OF THEIR PROPERTY HAVE BEEN AUTHORIZED BY THE DEBTORS OTHER THAN AS SET FORTH IN THIS DISCLOSURE STATEMENT OR, SUBSEQUENT TO A FILING BY THE DEBTORS UNDER THE BANKRUPTCY CODE, BY ANY BANKRUPTCY COURT. ANY INFORMATION, REPRESENTATIONS, OR INDUCEMENTS MADE TO OBTAIN YOUR ACCEPTANCE OF THE PLAN WHICH ARE OTHER THAN OR INCONSISTENT WITH THE INFORMATION CONTAINED HEREIN AND IN THE PLAN SHOULD NOT BE RELIED UPON BY ANY HOLDER OF A CLAIM OR EQUITY INTEREST.

THIS DISCLOSURE STATEMENT HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE ACCURACY OR ADEQUACY OF STATEMENTS CONTAINED THEREIN.

B. Executive Summary

The following summary is qualified in its entirety by the more detailed information contained elsewhere in this Disclosure Statement.

1. Purposes of the Disclosure Statement

The Solicitation Materials, including this Disclosure Statement and a Ballot to be used for voting on the Plan, are being distributed to Impaired Classes of Claims and Equity Interests. Classes of Claims impaired under the Plan and entitled to vote are Classes lB, 2B, 2D, 2F, 3B, 3E, 4B, 4E, 5B, 5E, 6D, 7D, 8D, 9D, 10D, 11D, 12D, 13D, 14D, 15D, 16D, and 18D. In addition, Classes of Claims and Equity Interests impaired under the Plan and not entitled to vote on the Plan (as described below) are Classes 1E, 1F and 2G. The purpose of this Solicitation, among other things, is to obtain the requisite number of acceptances of the Plan under the Bankruptcy Code from the Impaired Classes ("Statutory Requirements for Confirmation of Plan" are described in Article X1.E. of the Disclosure Statement). Assuming the requisite acceptances are obtained, the Debtors intend to seek Confirmation of the Plan at the Confirmation Hearing (as defined in Article XI.D. herein) commencing on January 22, 2001.

2. Voting Record Date; Voting; Required Approvals

The Debtors have established December 8, 2000 (the "Voting Record Date") as the date for determining which Holders of Claims and Equity Interests are eligible to vote on the Plan. After carefully reviewing this Disclosure Statement, the Plan and the other Solicitation Materials, each Holder of a Claim or Equity Interest in an Impaired Class entitled to vote on the Plan should vote to accept or reject the Plan in accordance with the Voting Instructions, and return the Ballot to Bankruptcy Services LLC (the "Information Agent"), located at Heron Tower, 70 East 55th Street, 6th Floor, New York, NY 10022, Attn: Diane Rocano, in a manner so that it is received by 4:00 p.m., prevailing Eastern Standard Time, on or before January 12, 2001. Any Ballot received after that date and time may not be counted. Ballots should be returned in accordance with the instructions for delivery set forth in the Voting Instructions.

Each Holder of a Claim in Classes lB, 2B, 2D, 2F, 3B, 3E, 4B, 4E, 5B, 5E, 6D, 7D, 8D, 9D, 10D, 11D, 12D, 13D, 14D, 15D, 16D, and 18D is entitled to vote either to accept or to reject the Plan. Holders of Claims in such Classes will accept the Plan if (i) the Holders of at least two−thirds in dollar amount of the Allowed Claims actually voting in each such Class have voted to accept the Plan and (ii) the Holders of more than one−half in number of the Allowed Claims actually voting in each such Class have voted to accept the Plan. Because, as noted below, certain Impaired Classes will receive no distribution nor retain any property under the Plan, and thus are conclusively presumed to have rejected the Plan, the Debtors will seek Confirmation of the Plan pursuant to a procedure commonly known as cram−down. The cram−down procedure is described in more detail in Article XI.E.4 of the Disclosure Statement.

On and after the Effective Date, each Holder of a Claim who has accepted the Plan, in exchange for, among other things, a distribution under the Plan, shall automatically be deemed to have released each of the Debtors, the Reorganized Debtors, their subsidiaries, and the Releasees, and the agents, officers, directors, partners, members, professionals, and agents of the foregoing (and the officers, directors, partners, members, professionals, and agents of each thereof), from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person or Entity would have been legally entitled to assert (whether individually or collectively), based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date in any way relating or pertaining to the Debtors, the Reorganized Debtors, the Chapter 11 Cases, the Plan, the Disclosure Statement, or any related agreements, instruments or other documents, except: (i) for Claims arising under the Plan; and (ii) for Claims arising after the Petition Date in the ordinary course of business. In furtherance of the foregoing, the Confirmation Order will constitute an injunction permanently enjoining the commencement or prosecution by any entity,

2 whether directly, derivatively, or otherwise, of any Claim, demand, liability, obligation, debt, right, Cause of Action, interest, remedy released or to be released pursuant to the Plan against the foregoing Persons and Entities.

Each Class under the Plan is designated with a number−letter code to indicate a particular Claim against a particular Debtor. For example, "2F" means a General Unsecured Claim against UATC. Please review these designations carefully so that you are aware to which Class your Claim is classified.

The majority (but not entirety) of creditors receiving this Disclosure Statement and Ballots to Vote on the Plan (because they are so entitled to vote) are classified in the following Classes:

Class Claim

1B, 2B, 3B, 4B, and 5B Bank Claims 2F, 3E, 4E, 5E, 6D, 7D, 8D, 9D, 10D, 11D, 12D, 13D, General Unsecured Claims 14D, 15D, 16D, and 18D

The following classes are unimpaired under the Plan, and Holders of Claims in such Classes are conclusively presumed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code:

Class Claim

1A, 2A, 3A, 4A, 5A, 6A, 7A, 8A, 9A, 10A, 11A, 12A, Other Priority Claims 13A, 14A, 15A, 16A, 17A, and 18A 1C, 2C, 3C, 4C, and 5C Secured Claims 6B, 7B, 8B, 9B, 10B, 11B, 12B, 13B, 14B, 15B, 16B, 17B, Other Secured Claims and 18B 1D, 2E, 3D, 4D, 5D, 6C, 7C, 8C, 9C, 10C, 11C, 12C, 13C, Intercompany Claims 14C, 15C, 16C, 17C, and 18C 17D General Unsecured Claims 3F, 4F, 5F, 6E, 7E, 8E, 9E, 10E, 11E, 12E, 13E, 14E, 15E, Equity Interests 16E, 17E, 17F, and 18E

The following Classes will receive no distribution nor retain any property under the Plan and are conclusively presumed to have rejected the Plan pursuant to Section 1126(g) of the Bankruptcy Code:

Class Claim

1F and 2G Equity Interests 1E General Unsecured Claims

3. Debtors' Principal Assets and Liabilities

UA's principal asset is the common stock of UATC and UAR. UA's principal liabilities are (i) its indebtedness under the Prepetition Bank Credit Facility and (ii) the indebtedness under the Subordinated Notes. UAR's principal assets are its interests in two movie theatres and the common stock of UAP II and UAP I, which holds title to and leases several parcels of real property upon which UATC operates movie theatres. UATC's principal assets are its ownership, both wholly and jointly, directly and indirectly, partnership, and membership interests in wholly−owned and less than wholly− owned subsidiaries, and its interests, as owner, lessee, or lessor, of certain parcels of real property upon which it operates movie theatres. UATC's principal liabilities are the indebtedness under or related to the Prepetition Bank Credit Facility and trade debt.

3 4. Terms of the Plan; Treatment of Classes of Claims and Equity Interests

The Plan classifies Claims and Equity Interests into the following Classes:

Class Claim Summary Description lA, 2A, 3A, 4A, 5A, Other Priority Claims Priority Claims consist of all Claims accorded the priority and right of 6A, 7A, 8A, 9A, 10A, payment under Section 507(a) of the Bankruptcy Code (including 11A, 12A, 13A, 14A, priority employee salary and wage Claims to the extent not paid prior 15A, 16A, 17A, and to Confirmation pursuant to any first−day orders authorizing payment 18A of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. lB, 2B, 3B, 4B, and 5B Bank Claims Bank Claims consist of all Claims arising from or relating to the Prepetition Bank Credit Agreement. 1C, 2C, 3C, 4C, and 5C Other Secured Claims Other Secured Claims consist of all Secured Claims other than Bank Claims. 6B, 7B, 8B, 9B, 10B, Secured Claims A Secured Claim against a Debtor is: (i) a Claim (other than a Claim 11B, 12B, 13B, 14B, in any way arising from or relating to a Claim of a lessor for damages 15B, 16B, 17B, and resulting from the termination of a lease of real property) held by any 18B person or entity, including a judgment creditor, secured by a lien on any property in which a Debtor or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of the Debtor or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim 1D, 2E, 3D, 4D, 5D, Intercompany Claims Each Claim of by a Debtor or a Subsidiary against a Debtor or its 6C, 7C, 8C, 9C, 10C, Estate, other than the UA Note Claim or an Equity Interest. 11C, 12C, 13C, 14C, 15C, 16C, 17C, and 18C 1E, 2F, 3E, 4E, 5E, 6D, General Unsecured Claims General Unsecured Claims consist of all Unsecured Claims other than 7D, 8D, 9D, 10D, 11D, Bank Claims and the UA Note Claim. 12D, 13D, 14D, 15D, 16D, 17D, and 18D 2D UA Note Claim The UA Note Claim consists of UA's Claim against UATC on account of the Intercompany Note. 1F, 2G, 3F, 4F, 5F, 6E, Equity Interests Equity Interests consist of any Equity Interest in the Debtors. 7E, 8E, 9E, 10E, 11E, 12E, 13E, 14E, 15E, 16E, 17E, 17F, and 18E

4 The Plan generally contemplates, among other things: (a) the payment in full of Priority and Administrative Claims; (b) a refinancing of the Prepetition Bank Credit Agreement by the Restructured Bank Credit Facility, the terms of which are described further herein, such that the Holders of Bank Claims will receive, depending on certain irrevocable elections described further herein, certain rights and interests in New UA (i.e., the Restructured Bank Credit Note Interests, New UA Common Stock, New UA Convertible Preferred Stock, and/or Equity Elector Warrants); (c) the general unimpaired treatment of Secured Claims and Other Secured Claims; (d) the general unimpaired treatment of Intercompany Claims; (e) a distribution of the New UA Warrants to Bank of America for further distribution as described in the Plan, (f) the Pro Rata distribution of the Unsecured Claim Distribution Amount, Class 2F Promissory Notes, and the Preference Litigation Proceeds in full satisfaction of General Unsecured Claims against UATC; (g) the general payment in full, in the form of a Promissory Note, of General Unsecured Claims against UAR, its Debtor−subsidiaries, and UATC's Debtor−subsidiaries; (h) the cancellation of Equity Interests in UA and UATC; and (i) the general unimpaired treatment of Equity Interests in UAR, its Debtor−subsidiaries, and UATC's Debtor−subsidiaries.

5. Liquidation Analysis

The Debtors believe that the Plan will produce a greater recovery for Holders of Claims and Equity Interests than would be achieved in a Chapter 7 liquidation because, among other things, the administrative costs and delays incurred in connection with a Chapter 7 case would likely diminish the distributions to such Holders, and the projected liquidation of the Debtors would not produce any recovery for Holders of Unsecured Claims. Houlihan Lokey, the Debtors' financial advisors, have prepared a liquidation analysis on behalf of the Debtors to assist Holders of Claims and Equity Interests to reach their determination as to whether to accept or reject the Plan. This Liquidation Analysis estimates the proceeds to be realized if the Debtors were to be liquidated under Chapter 7 of the Bankruptcy Code. The Liquidation Analysis is based upon projected assets and liabilities of the Debtors as of December 28, 2000 and incorporates estimates and assumptions developed by the Debtors which are subject to potentially material changes with respect to economic and business conditions, as well as uncertainty not within the Debtors' control. The Liquidation Analysis does not include liabilities that may arise as a result of litigation, certain new tax assessments, landlord lease rejection Claims, employee severance Claims, or other potential Claims. No value was assigned to additional proceeds which might result from the sale of certain items with intangible value. The Liquidation Analysis also does not include potential recoveries from avoidance actions. Therefore, the actual liquidation value of the Debtors could vary materially from the estimates provided herein.

6. Risk Factors

There are a variety of factors that all Impaired Creditors and Impaired Equity Holders should consider prior to accepting or rejecting the Plan. Some of these factors, which are described in more detail in Article XII of the Disclosure Statement, are as follows and may impact the recoveries under the Plan:

a. The financial information contained in this Disclosure Statement has not been audited and is based on an analysis of data available at the time of the preparation of the Plan and Disclosure Statement.

b. Article XII of the Disclosure Statement herein describes certain significant federal tax consequences of the transactions that are described herein and in the Plan that affect the Debtors and others. Such consequences may include: (1) the realization of cancellation of indebtedness income; (2) the reduction of net operating loss carryforward and unrealized built−in−losses; and (3) the recognition of taxable income by the Holders of Claims and Equity Interests. Holders of Claims and Equity Interests are urged to consult with their own tax advisors regarding the federal, state, local, and foreign tax consequences of the Plan.

5 c. Although the Debtors believe that the Plan complies with all applicable standards of the Bankruptcy Code, the Debtors can provide no assurance that the Plan will comply with Section 1129 of the Bankruptcy Code or that the Bankruptcy Court will confirm the Plan.

d. The Debtors may be required to request Confirmation of the Plan without the acceptance of all Impaired Classes entitled to vote in accordance with Section 1129(b) of the Bankruptcy Code.

e. Any delays of either Confirmation or the Effective Date of the Plan could result in, among other things, increased Claims of Professionals.

f. Although the Plan does not contemplate consolidating any of the Debtors into one entity, the Debtors can provide no assurance that the Bankruptcy Court will not order one or more of the Debtors to be substantively consolidated, or that a party in interest will not move for such substantive consolidation to occur. Substantive consolidation of one or more of the Debtors into one entity would affect the distribution of property currently provided in the Plan.

g. The Debtors are party to various legal proceedings, described in more detail herein, which could result in decisions adverse to the Debtors.

The occurrence of any and all such contingencies which could affect distributions available to Holders under the Plan, however, will not affect the validity of the vote taken by the Impaired Classes to accept or reject the Plan or require any sort of re−vote by the Impaired Classes.

7. Reorganized Debtors and the Post−Confirmation Estate

Except as otherwise provided in the Plan, each Debtor shall continue to exist as a Reorganized Debtor after the Effective Date as a separate entity with all the powers of a corporation under the laws of the respective state of incorporation and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under such applicable state law. Except as otherwise provided in the Plan, the Lock−Up Agreements, the Restructured Bank Credit Agreement, or any agreement, instrument or indenture relating thereto, on or after the Effective Date, all property in each Estate (including, but not limited to, any Debtor's equity, partnership, membership or other interest in any Debtor or non−Debtor business entity) and any property acquired by each of the Debtors under the Plan shall vest in each respective Reorganized Debtor, free and clear of all liens, Claims, charges, or other encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, and or as otherwise provided in the Plan). On and after the Effective Date, each Reorganized Debtor may operate its business and may use, acquire or dispose of property and compromise or settle any Claims or Equity Interests without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and the Confirmation Order.

8. Permanent Injunction

From and after the Effective Date, all Persons and Entities are permanently enjoined from commencing or continuing in any manner, any suit, action or other proceeding, on account of or respecting any Claim, obligation, debt, right, Cause of Action, remedy or liability released or to be released pursuant to Article X of the Plan.

C. Background of the Debtors and the Events Leading to the Plan

1. Corporate Structure

United Artists Theatre Company ("UA"), together with its Debtor and non−Debtor affiliates (collectively, "United Artists"), licenses films from all major and independent film distributors for exhibition in its theatres. United Artists is the sixth largest motion picture exhibitor in North America,

6 owning and/or operating approximately 236 theatres with 1,728 screens in twenty−three states. United Artists' corporate headquarters are in Englewood, Colorado.

UA owns 100% of the common stock of Debtors United Artists Realty Company ("UAR") and United Artists Theatre Circuit, Inc. ("UATC"). UAR in turn owns 100% of the common stock of Debtors United Artists Properties I Corp. ("UAP I") and United Artists Properties II Corp. ("UAP II"). UATC in turn owns 100% of the common stock of Debtors UAB, Inc. ("UAB"), UAB II, Inc. ("UAB"), Tallthe Inc. ("Tallthe"), UA Theatres Amusements, Inc. ("UATA"), UA International Property Holding, Inc. ("UAIPH"), UA Property Holding II, Inc. ("UAPH II"), United Artists International Management Company ("UAIMC"), Beth Page Theatre Co., Inc. ("BPTC"), United Film Distribution Company of South America ("UFDC"), and U.A.P.R., Inc. ("UAPR"). UATC also owns interests in certain non−Debtor subsidiaries including: 60% of the common stock of Multimatic Displays, Inc.; and 100% of the membership interests in UA SHOR, LLC. UATC also owns interests in certain foreign non−Debtor subsidiaries including: 99.9% of the interests in United Artists International, Limited, a Hong Kong corporation; 90% of the interests in UA Mexico Holdings, S.A. de C.V., a Mexican corporation; 10% of the interests in United Artists Singapore Theatres Pte. Ltd., Singapore corporation; and 10% of the interests in Siam UATC Company Limited, a Thailand corporation.

UAIPH in turn owns 100% of the common stock of UATC Europe, B.V., a Netherlands corporation, UAPH II in turn owns interests in the following entities: 51% of the stock of Debtor R and S Theatres, Inc. ("R&S"); 100% of the stock of Debtor King Reavis Amusement Company ("KRAC"); approximately 67% of the preferred stock and 95% of the common stock of Debtor Mamaroneck Playhouse Holding Corporation ("Mamaroneck"); 50% of the stock of Magnolia Amusement Company; 5% of the stock of Bagley Building Company; 50% of the stock of Vogue Realty Company; 50% of the stock of Trumball Theatre Corp.; 16.67% of the stock of The Turp Company; 50% of the stock of UAGG Theatre Operating Corp.; and 80% of the stock of San Francisco Theatres, Inc. UAPH II also owns interests in certain foreign entities as follows: 0.1% of the interests in United Artists International, Limited, a Hong Kong corporation; and 10% of the interests in UA Mexico Holdings, S.A. de C.V., a Mexican corporation.

2. The Debtors' Principal Assets and Liabilities

UA's principal asset is the common stock of UATC and UAR. UA's principal liabilities are its indebtedness (a) under the Prepetition Bank Credit Facility and (b) to Holders of Subordinated Notes. UAR's principal assets are (a) the common stock of UAP I and UAP II and (b) its ownership of two theatres. UAR's principal liability is its guarantee of the indebtedness under the Prepetition Bank Credit Facility. UAP I's principal assets are its ownership interests in approximately twenty movie theatres. UAP I's principal liability is its guarantee of the indebtedness under the Prepetition Bank Credit Facility. UAP II has negligible assets, and its principal liability is its guarantee of the indebtedness under the Prepetition Bank Credit Facility.

UATC's principal assets are (i) its ownership, both wholly and jointly, directly and indirectly, of its subsidiaries and (ii) its leasehold and/or ownership interests in several hundred movie theatres. UATC's principal liabilities are its indebtedness (a) under and related to the Prepetition Bank Credit Facility, (b) to film studios and distributors and other vendors, and (c) to lessors of its theatres.

UAB's principal assets are its leasehold interest in three theatres and a net operating loss, and its principal liabilities are its lease obligations. UAB II's principal asset is a net operating loss, and its principal liability is its obligations under a recently terminated lease. Tallthe's principal asset is a net operating loss, and its principal liability is its obligations under a lease. UATA's principal asset is a net operating loss, and its principal liabilities are negligible. UAIPH's principal asset is its equity interest in UATC Europe B.V., a Netherlands corporation, and its principal liabilities are negligible. UAPH II's principal asset is its equity interest in certain Debtor and non−Debtor affiliates, and its principal liability

7 consists of certain secured obligations. UAIMC's principal asset is a net operating loss, and its principal liabilities are negligible. BPTC's principal asset is a leasehold interest, and its principal liability is its obligations relating to that leasehold interest. UFDC's principal assets and liabilities are negligible. UAPR's principal asset is a net operating loss, and its principal liability is certain alleged liabilities to former employees. KRAC's principal assets are its ownership interest in one theatre and its leasehold interest in a second theatre, and its principal liabilities are its obligations relating to those theatre operations. Mamaroneck's principal asset consists of cash proceeds from the sale of its sole asset, the Mamaroneck Playhouse, and its principal liability is its obligations to its shareholders. R&S's principal assets are its leaseholders interests in two theatres, and its principal liability is its obligations relating to those interests.

3. Business Segments

United Artists derives approximately two−thirds of its revenue from box office admissions, which in 1999 totaled $433 million. United Artists' remaining revenue comes mostly from concession sales, which totaled approximately $175 million in 1999. United Artists' major operating cost is the film license fees it pays to film studios and distributors. United Artists generally pays film license fees based on a percentage of box office revenue, and over the years has paid approximately 50% of its box office revenue to film studios and distributors.

Film is the life−blood of United Artists' business. If film studios and distributors stop supplying United Artists with films, United Artists will have to cease all operations because it will have no film to exhibit in its theatres. To ensure United Artists' continued access to films, United Artists must maintain good relationships with film studios. United Artists already has excellent, long−standing relationships with all of the major and independent film studios. The best way for United Artists to maintain these relationships is by timely paying film license fees to the studios and providing assurances that it will timely pay film license fees in the future.

4. The Film Exhibition Industry

There are currently more than 400 motion picture exhibitors operating approximately 37,000 screens in North America. With so many exhibitors, the film exhibition industry is competitive yet fragmented. As of December 31, 1999, United Artists' 2,018 screens represented 5.4% of the screens in North America. United Artists' $433 million in box office revenue represented a 5.9% market share of the $7.3 billion total box office revenue in North America. As of June 30, 2000, due to continued expansion of screens in general and United Artists' disposition of screens in particular, United Artists' screens decreased to 1,816 (4.8% of the total screens in North America), and United Artists' market share of total box office revenue decreased to 5.4%.

The film exhibition business is highly seasonal and has heightened attendance levels during the summer months and holidays. During non−peak periods, earnings can fluctuate dramatically due to the presence or absence of successful or "blockbuster" films. Film box office revenue is very sensitive to changes in attendance levels because a significant amount of the costs to exhibit films, such as rents, payroll, etc., are fixed costs necessary to operate theatres.

8 5. Recent Developments in the Film Exhibition Industry

During the past few years, the economics of film exhibition have changed dramatically and to the detriment of film exhibitors. Although the number of film screens nationwide has increased, construction and operations costs also have increased, and movie theatre attendance has been relatively flat. There are simply insufficient attendance and box office revenue to support the operating and construction costs of existing and newly constructed movie theatres.

This change in the economics of film exhibition started primarily in 1997, when several of United Artists' major competitors embarked on massive expansion programs to build new theatres with the latest technology and theatre designs, including digital sound systems and stadium seating, in order to gain market share. These expansion programs were fueled by greater private equity investment and associated high−yield financing in the film exhibition industry and increased investment in the real estate sector. As a result of these expansion programs, the number of screens nationwide increased by 7.2% in 1997, 7.2% in 1998, and 8.8% in 1999. In comparison, the average rate of increase in the number of movie screens since 1978 is only 3.9%.

Not only has there been a significant increase in the number of movie theatres nationwide, but there also have been significant increases in the number of movie screens per theatre and in the construction costs per movie screen. These increases are the result of the development of the "megaplex" theatre model. Historically, most movie theatres had only one to three screens, with some having as many as six screens. In the past decade or so, the dominant theatre model became the "multiplex" theatre—a multi−screen theatre with eight to twelve screens and sloped floors. Multiplex theatres were designed to be more profitable and lead to economies of scale because exhibitors could spread operating facilities (concession stands and restrooms) and fixed costs (rents, utilities, and personnel) over more screens. However, during 1996, a new theatre design, the "megaplex," was introduced. A megaplex theatre has fourteen or more movie screens (some megaplexes have as many as thirty screens), stadium seating, high−backed rocking seats, digital sound, expanded concession areas, and other new amenities. Megaplex theatres enable multiple showings of the same film and the simultaneous showing of films that appeal to a wide variety of audiences. Megaplex theatres also allow exhibitors greater flexibility in moving a film title from one screen to another as the title becomes more or less popular. By 1997, the megaplex became the industry standard in most major markets.

For all of their perceived benefits, however, these new multiplex and megaplex theatres are expensive to build. The cost per screen of a stadium−seating, megaplex theatre is now $1 million or more. In contrast, approximately five years ago the construction cost per screen of a typical multiplex theatre was less than $500,000.

Unfortunately, the skyrocketing construction costs associated with these new multiplex and megaplex theatres have not been offset by increases in box office revenue. Although box office revenue was at record levels in 1999, this was attributable mostly to increases in ticket prices; attendance in 1999 was approximately equal to that for 1998. This flat attendance, coupled with the significant increases in the number of movie screens, resulted in an approximately 8.1% decrease in industry attendance per screen and an approximately 1.0% decrease in industry box office revenue per screen in 1999. As a result, cash flow (earnings before interest, taxes, depreciation and amortization, or "EBITDA") and earnings for the entire film exhibition industry declined. These reduced cash flows and earnings, coupled with increased debt from the significant investment in new multiplex and megaplex theatres, have put significant financial pressure on the film exhibition industry.

6. United Artists' Recent Capital Improvements

United Artists developed a "capital reinvestment" program in response to its competitors' recent capital investments and improvements. This program devoted United Artists' limited resources to: disposing of theaters that were non−profitable or in non−strategic markets; rebuilding or renovating

9 theatres in important markets; and building new twelve−to−sixteen screen stadium theatres ("smaller megaplexes") on a very limited basis to defend market share. United Artists believes that the "smaller megaplex" theatre model probably has the best cost per screen ratio and may produce the best long−term return on investment.

Since 1997, United Artists has made a significant amount of capital improvements under its capital reinvestment program. United Artists' total capital expenditures, which primarily included the renovation, expansion, or replacement of existing theatres, increased from $67.4 million in 1997 to $116.9 million in 1998. Virtually all of United Artists' theatres built since 1997 are smaller megaplexes with stadium seating and all other state−of−the−art amenities. As a result, United Artists' average number of screens per theatre increased from 4.8 in 1992 to 7.1 as of December 31, 1999. Now, more than 39% of all of United Artists' movie screens have been constructed since 1992, and as of December 31, 1999, 293 of United Artists' 2,018 screens have stadium seating.

By 1999, United Artists believed that many of its markets had adequate seat and movie screen capacity, and this, plus United Artists' tightening liquidity status, led United Artists to lower its 1999 capital improvement expenditures to $64.5 million. By this time, however, United Artists' competitors had constructed so many new theatres and screens that the entire film exhibition industry was over−saturated with theatres. While United Artists, the sixth largest exhibitor in North America, invested only $248.8 million between 1997 and 1999, the top five film exhibitors invested an aggregate of $3.6 billion in capital improvements during the same period.

7. Declines in Film Exhibition Profitability

As a result of the aggressive over−expansion in the industry, and despite record attendance levels in 1998 and 1999, the profits and asset valuations of the major film exhibitors, including United Artists, declined. The higher operating and construction costs of these new multiplex and megaplex theatres, coupled with their higher screen per theatre and cost per screen ratios, led to lower attendance and cash flows per screen and eroded any economies of scale that these theatres were designed to achieve. Moreover, at older, non−stadium theatres, cash flow declined due to increased competition from newly constructed megaplex theatres.

The new multiplex and megaplex theatres also led to an increase in the average cost of film licensing. Usually, a film exhibitor pays license fees to movie studios based upon a percentage of box office revenue, with the percentage payable for any particular film decreasing over time. An exhibitor might pay a license fee of 70% of box office revenue for the first week of a movie's exhibition, 60% the second week, and so on. Therefore, an exhibitor's average license fees decrease (and profits increase) the longer a movie title plays. Now, as a result of the increase in the number of movie screens nationwide, most consumers can see a film in the first two or three weeks of a title's release, which results in shorter−lived box office runs. Therefore, exhibitors can no longer capitalize on the more favorable pricing dynamics that take effect in the latter weeks of movie runs.

For all of these reasons, United Artists' cash flow became insufficient to support its current debt balances and related obligations. Specifically, UA incurred net losses of $50 million in 1997, $98 million in 1998, and $127.3 million in 1999. Moreover, as a result of a decline in cash flow and the increase in debt relating to its capital expansion program, United Artists became significantly over−leveraged compared to its competitors, in part because it already had a higher leverage ratio than most of its competitors prior to the industry screen expansions beginning in 1997. Even though United Artists slowed its screen expansion efforts and focused on improving its existing capacity, these industry−wide developments hampered United Artists' efforts to mitigate its decline in cash flow and defend its positions in key geographical markets.

10 8. Summary of Certain Lending Facilities

a. Revolving Credit Facility

Before the Petition Date, United Artists partially funded its and its subsidiaries' operations through a $450 million partially revolving credit facility (the "Prepetition Bank Credit Facility") established under the Prepetition Bank Credit Agreement, a credit agreement dated April 21, 1998, by and among UA and Bank of America National Trust and Savings Association, as administrative agent ("Bank of America"), and certain other lenders specified therein, as amended from time to time. As of May 2, 2000, the outstanding indebtedness under the Prepetition Bank Credit Agreement totaled approximately $440 million in principal.

The Prepetition Bank Credit Facility is guaranteed by the following direct or indirect subsidiaries of UA: UATC; UAR; UAP I; and UAP II. The Prepetition Bank Credit Facility is secured by, among other things, a pledge of 100% of the stock in the following direct or indirect subsidiaries of UA: UAR; UAP I; UAP II; UATC; UAB; UAB II; Tallthe; UAIPH; UAPH II; UAIMC; BPTC; UFDC; UATA; and UAPR. The Prepetition Bank Credit Facility is also secured by mortgages on approximately thirty−one theatres owned by UATC, UAR, and UAP I. The Prepetition Bank Credit Facility is also secured by substantially all of the personal property of UA, UATC, UAR, UAP I, and UAP II. The Prepetition Bank Credit Facility is also secured by an Intercompany Note, pursuant to which UATC is obligated to pay to UA the principal amount, plus interest, of any amounts that UA loans to UATC from the proceeds of that Facility.

b. Subordinated Notes

In April, 1998, at the same time that it entered into the Prepetition Bank Credit Facility, UA issued the Fixed Rate Notes, which are $225 million of 9.75% unsecured senior subordinated notes due April 15, 2008, pursuant to the Fixed Rate Note Indenture, an indenture dated April 28, 1998 between UA and State Street Bank and Trust Company of Missouri, N.A., as the Fixed Rate Note Indenture Trustee. In April, 1998, UA also issued the Floating Rate Notes, which are $50 million of three month LIBOR plus 4.375% unsecured senior subordinated notes, pari passu, due October 15, 2007 pursuant to the Floating Rate Note Indenture, an indenture dated April 21, 1998 between UA and State Street Bank and Trust Company of Missouri, N.A., as the Floating Rate Note Indenture Trustee. The Fixed Rate Notes and the Floating Rate Notes (collectively, the "Subordinated Notes") are subordinate to the Claims under the Prepetition Bank Credit Agreement.

c. Leverage Lease Financing Transaction

On December 13, 1995, UATC entered into a leveraged lease financing transaction, pursuant to which it obtained "off balance sheet" financing for thirty−one movie theatres that it currently operates (the "Leveraged Lease Financing Transaction"). In connection with the Leveraged Lease Financing Transaction, UATC conveyed title to those theatres (a) to an Owner Trust for an estate of twenty−one years and (b) to a Remainder Trust for the remainder, upon the expiration of the estate of twenty−one years. UATC received the sale proceeds from the conveyance of those theatres and also executed a lease, dated December 13, 1995 (the "Lease") with the Owner Trust pursuant to which UATC would occupy and operate those theatres until January 12, 2017, with an option to extend the Lease for two additional periods of five years each.

The Owner Trust funded its purchase of the thirty−one theatres by receiving an equity investment of $8,577,459 from third−party investors and obtaining a 9.30% mortgage loan of $116,753,000 from Fleet National Bank of Connecticut, not individually, but as a corporate indenture trustee for an indenture trust who sold pass−through certificates to investors on the open market pursuant to that trust. The Fleet mortgage loan, which matures on July 1, 2015, is secured in part by a first mortgage on the Owner Trust's and the Remainder Trust's interests in each of the thirty−one theatres as well as an assignment of all of the Owner Trust's right, title, and interest in the Lease. On or about June 30, 1997,

11 State Street Bank and Trust Company purchased substantially all the corporate trust business of Fleet National Bank, including all of its rights under the Leveraged Lease Financing Transaction. Accordingly, State Street Bank serves as indenture trustee under the Leveraged Lease Financing Transaction.

On or about November 8, 1996, UATC entered into a sale−leaseback transaction, pursuant to which UATC sold five movie theatres to Theatre Investors II, LLC for $22,854,379 and leased back those theatres pursuant to a lease that terminates in 2017, with two options to renew to November 7, 2026. Moreover, on or about December 15, 1997, UATC entered into another sale−leaseback transaction, pursuant to which UATC sold two movie theatres to Park Meadows Business Trust for $18,130,643 and leased back those theatres pursuant to a lease that terminates in 2019, with two options to renew to December 31, 2029.

9. Prepetition Restructuring Activities

In 1997, United Artists instituted a program called "Project Clean−Up," which was partially in response to the increase in the number of United Artists' unprofitable theatre leases caused by the development of new theatres by United Artists' competitors. Project Clean−Up complemented United Artists' capital reinvestment program described above. Under Project Clean−Up, United Artists began (a) terminating leases for unprofitable theatres that could not compete with the new multiplex and megaplex stadium theatres and (b) selling real estate underlying theatres that had higher values for uses other than theatres. The intent of Project Clean−Up was to (i) improve United Artists' cash flow by eliminating non−performing theatres, (ii) enable United Artists to focus its management on the more productive parts of United Artists' asset base, and (iii) improve market perception of United Artists' asset base.

By 1999, United Artists had reduced its total number of theatres and screens from their 1995 levels of approximately 406 theatres having 2,310 screens (an 8.3% market share of total screens) to 283 theatres having 2,018 screens (a 5.4% market share of total screens). These dispositions resulted in approximately $51 million of net sale proceeds and the elimination of approximately $12.7 million of annual negative cash flow. Moreover, United Artists reduced its general and administrative costs from $35.1 million in 1996 to $24.3 million, $23.4 million, and $22.6 million in 1997, 1998, and 1999, respectively. It is currently estimated that United Artists' fiscal 2000 general and administrative costs will be approximately $21.5 million.

Unfortunately, the sale or closing of some of United Artists' theatres under Project Clean−Up has not occurred quickly enough to enable United Artists to support its debt service adequately. During early 2000, United Artists began to face serious liquidity problems caused by its declining cash flow and significant debt burden. In 1999, cash flow already had declined to $66.1 million and resulted in an interest coverage ratio of 0.99, compared to cash flow and an interest coverage ratio of $91.9 million and 1.69, respectively, in 1998.

Beginning in the latter part of 1999, United Artists has attempted to accelerate the disposition of theatres under Project Clean−Up by devoting more of its internal resources to that project as well as employing the services of outside disposition specialists. Although the rate of disposition has increased, it has not been enough to significantly ease United Artists' liquidity problems. Consequently, United Artists has been unable to satisfy all of its obligations in a timely manner, which has resulted in additional drains on United Artists' limited resources, such as lease litigation with landlords.

Due in part to United Artists' continued liquidity problems and its use of asset sale proceeds from Project Clean−Up to fund on−going operations, on or about April 12, 2000, the lenders under the Prepetition Bank Credit Facility declared a payment default under that Facility and, as permitted by the Indentures, blocked the payment of interest to the Holders of the Subordinated Notes. As a result, on April 15, 2000, UA was unable to make a $12.3 million interest payment to the Holders of the

12 Subordinated Notes. Moreover, since May 4, 2000, UA was unable to make timely interest payments under the Prepetition Bank Credit Facility until, as explained below, shortly before the Petition Date.

10. Negotiations and Lock−Up Agreements with the Prepetition Lenders

In anticipation of a potential restructuring, in March, 2000, the Debtors retained Kirkland & Ellis and Houlihan Lokey Howard & Zukin to assist it with the development of a restructuring plan. In April, 2000, the Debtors began extensive, arm's length negotiations with an ad hoc committee comprised of the Bank of America and certain of the Prepetition Lenders (i.e., Morgens, Waterfall, Vintiadis & Company, Inc. ("Morgens, Waterfall") and Van Kampen Investment Advisory Corp. ("Van Kampen") (collectively, the "Working Group"), together with all of the parties' respective legal and financial advisors, concerning a consensual restructuring of the Prepetition Bank Credit Facility. Subsequently, E.N. Investment Company ("ENIC"), a subsidiary of The Anschutz Corporation, became a Holder of approximately $92,153,153.73 of Claims under the Prepetition Bank Credit Facility, and began participating in the negotiations with the Debtors concerning a consensual restructuring of that Facility. In August, 2000, the Debtors, Bank of America, and certain of the Prepetition Lenders representing 98.08% of the total principal amount outstanding, and 83.33% in number of holders, under the Prepetition Bank Credit Facility (including ENIC, Morgens, Waterfall, and Van Kampen), marked the culmination of their negotiations by executing Lock−Up, Voting, and Consent Agreements (collectively, the "Bank Lock−Up Agreements"), copies of which are contained in the Plan Supplement. The remaining Prepetition Lenders, which consist of Putnam Diversified Income Trust, Putnam High Yield Managed Fund, Putnam High Yield Trust II, and Putnam High Yield Total Return Fund (collectively, the "Putnam Entities") did not execute the Bank Lock−Up Agreements, but have given written directions to their agent to vote with the majority of the Prepetition Lenders on any issue relating to the Prepetition Bank Credit Facility.

The Bank Lock−Up Agreements provide a framework for the consensual restructuring of the Debtors' obligations through a Chapter 11 bankruptcy case and plan of reorganization. The Bank Lock−Up Agreements specify, in part, the treatment to be provided to each general class of the Debtors' creditors under the Plan in a Term Sheet attached to and incorporated by the Bank Lock−Up Agreements (the "Term Sheet"). Under the Bank Lock−Up Agreements, the Debtors, upon the commencement of the Chapter 11 Cases, committed themselves to filing the Plan and Disclosure Statement consistent with the Term Sheet. Those Prepetition Lenders who signed the Bank Lock−Up Agreements committed themselves, among other things: (a) to support and vote for the Plan so long as it was consistent with the Term Sheet (subject to compliance with all applicable solicitation procedures and other requirements under the Bankruptcy Code); (b) to forbear from exercising any rights or remedies they may have under the Prepetition Bank Credit Facility and all related documents, applicable law, or otherwise, regarding any existing default under the Facility. As a result of the Bank Lock Up Agreements and the Putnam entities' irrevocable voting instructions previously discussed, the Debtors have the support of 100% of their Prepetition Lenders.

The Bank Lock−Up Agreements in essence also required the Debtors to pay any due and payable interest and letter of credit and commitment fees (subject to certain exceptions contained in the Bank Lock−Up Agreements) and all accrued professional fees and expenses of ENIC, Bank of America, and the Working Group (collectively, the "Prepetition Bank Credit Facility Fees"), when the Debtors, Bank of America, and certain of the Prepetition Lenders representing at least 662/3% of the total principal amount outstanding, and more than 50% in number of holders, under the Prepetition Bank Credit Facility (including ENIC), executed the Bank Lock−Up Agreements. The Bank Lock−Up Agreements further required the Debtors to remain current, and obtain all necessary approvals to remain current, on such Prepetition Bank Credit Facility Fees on the Petition Date. In accordance with the Bank Lock−Up Agreements, prior to the Petition Date, the Debtors did in fact pay all due and payable interest and letter of credit and commitment fees under the Prepetition Bank Credit Facility.

13 The Bank Lock−Up Agreements remain in effect and binding upon the signatories thereto until the earlier of (a) the Debtors' failure to file a plan of reorganization consistent with the terms of the Term Sheet and the Bank Lock−Up Agreements on or before October 31, 2000 (the Plan having been filed on September 5, 2000), (b) the Prepetition Lenders' receipt of notice from the Debtors that they cannot provide for the economic treatment of the Claims under the Prepetition Bank Credit Facility in a plan of reorganization in accordance with the Bank Lock−Up Agreements and Term Sheet, (c) the filing by the Debtors of a plan which does not provide for the economic treatment of Claims under the Prepetition Bank Credit Facility in accordance with the Bank Lock−Up Agreements and Term Sheet, (d) the Bankruptcy Court's denial of Confirmation of the Plan and the Debtors' failure to file a new or amended Plan in accordance with the Bank Lock−Up Agreements and Term Sheet within thirty (30) days thereafter; or (e) one year from the date of the Bank Lock−Up Agreements.

In anticipation of a potential bankruptcy case, UAPH II, which holds approximately 67% of the preferred stock and 95% of the common stock Mamaroneck, called a Mamaroneck shareholders' meeting. UAPH II previously had voted in favor of a shareholders' resolution to dissolve Mamaroneck pursuant to state law. UAPH II called the new shareholders' meeting to consider a resolution authorizing Mamaroneck's board of directors to liquidate, dissolve, and/or wind up Mamaroneck, pursuant to state or federal law, as the board in the exercise of its discretion saw fit. On or about August 22, 2000, a meeting of Mamaroneck's shareholders was held, upon due and proper notice, and the requisite number of shareholders voted in favor of the proposed resolution.

11. Negotiations and Lock−Up Agreements with the Subordinated Noteholders

In early August, 2000, the Debtors also commenced arm's length negotiations with an ad hoc committee of holders of the Subordinated Notes, including Apollo Advisors, Trentex Capital Management, Goldentree Asset Management, Putnam Investments and IDS, together with the parties' respective legal and financial advisors (the "Prepetition Subordinated Noteholder Committee"), regarding the terms of the Debtors' consensual restructuring. The Subordinated Noteholder Committee retained Milbank, Tweed, Handley & McCloy ("Milbank") as its legal advisor and Chanin Kirkland Messina LLC ("Chanin") as its financial advisor. The Debtors also entered into a letter agreement, dated July 5, 2000, with Milbank pursuant to which the Debtors agreed to pay the reasonable legal fees and expenses of Milbank in connection with its representation of the Prepetition Subordinated Noteholder Committee. As compensation for Milbank's services, the Debtors agreed to provide Milbank with an initial fee reserve of $25,000 to be applied against fees and expenses to be incurred in connection with Milbank's representation of the Prepetition Subordinated Noteholder Committee. The letter agreement is terminable at will by either the Debtors or Milbank on certain conditions set forth therein. The Debtors also entered into a letter agreement, dated July 31, 2000, with Chanin, pursuant to which, among other things, the Debtors agreed to pay to Chanin certain fees in connection with Chanin's rendering of financial advisory services to the Prepetition Subordinated Noteholder Committee in connection with the Debtors' proposed restructuring. As compensation for these services, the Debtors agreed to pay Chanin, beginning August 1, 2000, $150,000 per month for the first month, and $100,000 per month thereafter. The Chanin letter agreement is terminable at will by either the Debtors or Chanin on certain conditions set forth therein.

The Debtors engaged in approximately two months of good faith, arm's length negotiations regarding a consensual restructuring with an ad hoc committee of the Subordinated Noteholders, together with that committee's attorneys and financial advisors, whose fees were paid for by the Debtors. On Friday afternoon, September 1, 2000, three Subordinated Noteholders (the "Petitioning Creditors") commenced an involuntary bankruptcy case against "United Artists Theater Company," in the United States Bankruptcy Court for the Northern District of Texas in an apparent attempt to file an involuntary bankruptcy case against the Debtors' holding company, United Artists Theatre Company. In re United Artists Theater Co. (Case No. 200−35637) (Bankr. N.D. Tex. Sept. 1, 2000) (the "Involuntary Case").

14 On or about September 5, 2000, the Debtors and certain of the Subordinated Noteholders representing at least 66 2/3% of the total principal amount outstanding under the Subordinated Notes reached an agreement regarding a consensual restructuring and executed Lock−Up, Voting, and Consent Agreements (collectively, the "Subordinated Noteholder Lock−Up Agreements"). Among other things, the Subordinated Noteholder Lock−Up Agreements reflect the respective signatories' support for, and intention to vote in favor of, the Plan in accordance with the Bank Lock−Up Agreements, subject to compliance with all applicable solicitation procedures and other requirements under the Bankruptcy Code. The Subordinated Noteholder Lock−Up Agreements essentially provide: (a) for the Holders of Subordinated Note Claims to receive the New UA Warrants, as defined in the Plan; and (b) for the Debtors to pay the legal and financial advisory fees of the Prepetition Subordinated Noteholders' Committee in accordance with the specific terms of the Lock−Up Agreements.

12. Negotiations with Unsecured Creditors

The Debtors were unable to approach their general unsecured creditors before the Petition Date due to the numerosity and unidentified nature of a significant portion of those claims. Nevertheless, at that time the Debtors hoped and anticipated that they would be able to obtain the support of their general unsecured creditors for the Plan, which provides for a distribution to those creditors greater than what those creditors would receive in a Chapter 7 case. As discussed below, after commencing the Chapter 11 Cases, the Debtors and the Trade Subcommittee of the Official Committee of Unsecured Creditors entered into good faith, arms−length negotiations concerning the treatment of Holders of Allowed Unsecured Class 2F Claims under the Plan. On or about December 6, 2000, the Debtors and the Trade Subcommittee reached an agreement regarding the Plan's treatment of such Holders of Allowed Unsecured Class 2F Claims and as a result executed the United Artists Theatre Company/Trade Subcommittee of the Official Committee of Unsecured Creditors Proposed Restructuring Term Sheet (the "Trade Subcommittee Term Sheet," a copy of which is contained in the Plan Supplement). The Plan has been amended to incorporate this agreement and the terms in the Term Sheet. The Trade Subcommittee Term Sheet essentially sets forth certain modifications to the terms of the Plan including: (1) the treatment of Unsecured Claims of UATC, including Unsecured Claims arising from UATC's rejection of certain unexpired leases under Section 502(b)(6) of the Bankruptcy Code; (2) the method of the Debtors' determination of those unexpired leases and executory contracts which they intend to assume, assume and assign or reject pursuant to the Plan; and (3) certain agreements regarding certain avoidance actions to be brought by the Debtors. The Trade Subcommittee Term Sheet also obligates the Trade Subcommittee to, among other things, (i) not consent to, provide any support to, participate in the formulation of, or vote on any plan of reorganization, other than the Plan; and (ii) use its best efforts to cause the Committee and the Trade Subcommittee to take all actions in their reasonable discretion to achieve confirmation and consummation of the Plan.

13. The Petition Date

On September 5, 2000, the Petition Date, each of the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. As discussed below, on or about September 6, 2000, the Debtors reached an agreement with the Petitioning Creditors with respect to the Involuntary Case. The Debtors and the Petitioning Creditors agreed, in pertinent part, to transfer the Involuntary Case to the United States District Court for the District of Delaware. On September 7, 2000, the Bankruptcy Court entered an order procedurally consolidating the Chapter 11 Cases for administrative purposes only. Since the Petition Date, the Debtors have continued to operate their businesses and manage their properties as debtors−in−possession pursuant to Section 1107 and 1108 of the Bankruptcy Code. Additional post−filing developments are discussed in Article XIII of the Disclosure Statement.

15 D. Components of the Plan; Treatment of Classes of Claims and Equity Interests

The Debtors commenced the Chapter 11 Cases after it became apparent that their previous efforts would be unable to address their liquidity needs timely and sufficiently. The purpose of the Plan is to restructure the Debtors' current lending facilities to provide the Debtors with the ability to emerge from bankruptcy with the liquidity needed to move forward in their business activities. The Debtors believe that the reorganization contemplated by the Plan is in the best interests of their Creditors and Equity Holders. If the Plan is not confirmed, the Debtors believe that they will be forced to either file an alternate plan of reorganization or liquidate under Chapter 7 of the Bankruptcy Code. In either event, the Debtors believe that Holders of General Unsecured Claims, Subordinated Notes, and Equity Interest Holders would realize a less favorable distribution of value, if any, for their Claims or Equity Interests, than under this Plan proposed by the Debtors. See the "Liquidation Analysis" contained in Article III.A below.

1. Purpose

The principal purpose of the Plan is to provide the Debtors with the liquidity necessary to stabilize the Reorganized Debtors and to allow them to continue their respective businesses. This is accomplished as follows.

2. Treatment of Prepetition Lenders

As previously discussed, the Plan incorporates the terms of the Bank Lock−Up Agreements. The Bank Lock−Up Agreements require each Prepetition Lender to make knowing, voluntary, and irrevocable election to be treated under the Plan as a Debt Elector or an Equity Elector. Under the Bank Lock−Up Agreements, each Prepetition Lender will irrevocably be treated as a Debt Elector unless that Lender has made an affirmative, irrevocable election in writing to be treated as an Equity Elector under the Plan on or before August 29, 2000.

Under the Plan (as described more fully herein) and in accordance with the Bank Lock−Up Agreements, the Equity Electors will receive, in the aggregate, on or as soon as practicable after the Effective Date, in full and complete satisfaction of its Claims under the Prepetition Bank Credit Facility, a Pro Rata distribution of (a) approximately 20% of New UA Common Stock, (b) $57,000,000 in zero dividend perpetual New UA Convertible Preferred Stock with the right to convert to New UA Common Stock at a $6.25 strike price, and (c) Equity Elector Warrants to acquire New UA Common Stock at a $10.00 strike price for seven years. In the Bank Lock−Up Agreements, Anschutz (through ENIC) has committed itself to be United Artists' "equity sponsor" and has elected to be treated as an Equity Elector on account of all of its Claims under the Prepetition Bank Credit Facility. However, the Bank Lock−Up Agreements provide that if the aggregate amount of Prepetition Bank Credit Facility Claims of Prepetition Lenders electing to be treated as Equity Electors under the Plan (including ENIC) exceed $100,000,000, then Anschutz (and thereby ENIC) have the sole and absolute discretion to render void its obligations under the Bank Lock−Up Agreements.

Under the Plan (as described more fully herein) and in accordance with the Lock−Up Agreements, each Debt Elector will receive Pro Rata note interests in a restructured Prepetition Bank Credit Facility with a principal amount set at the equivalent of 72.5% of the aggregate amount of Claims of the Debt Electors under the Prepetition Bank Credit Facility, with a maturity date four years from the Confirmation Date, secured by substantially all of the assets of UA, UATC, UAR, UAP I, and UAP II (with a pledge by UAPH II to use all commercially reasonable efforts to pledge the stock in all of its subsidiaries) (the "Restructured Bank Credit Facility"). The Debt Electors will also receive in the aggregate approximately 80% of the New UA Common Stock, which is subject to dilution as set forth in the Plan. Bank of America (or its assignee) will also receive certain New UA Warrants to be held in trust for the benefit of the Debt Electors (or their assignees), to be distributed as described in the Plan.

16 The Restructured Bank Credit Agreement is also subject to other terms and limitations set forth in the Bank Lock−Up Agreements, as contained in the Term Sheet including, among other things: (a) maximum capital expenditure limitations of (i) $30 million for the year 2000, (ii) $50 million for each year thereafter (excluding any unused carry−over from the prior year only), and (iii) $10 million in unused carry−over from the prior year; (b) limitations on additional indebtedness exceeding (i) $5,000,000 in the aggregate for borrowed money, capital lease obligations, and related to required rate contracts, on an unsecured or secured (relating to capital expenditures only) basis and (ii) $25,000,000 for borrowed money or preferred stock from Anschutz or its affiliates, provided that, among other things, such indebtedness is subordinate to the Restructured Bank Credit Facility; and (c) the mutual release of certain parties, as set forth more fully in Article IX.B of the Disclosure Statement. The Bank Lock−Up Agreements also provide for a $1,000,000 fee to be paid in Cash to Bank of America on the Confirmation Date, to be held in trust for the benefit of the Working Group and ENIC in consideration for their efforts in the consensual restructuring of the Debtors' obligations (the "Working Group Fee").

3. DIP Financing and Cash Collateral

In the Bank Lock−Up Agreements, the signatories thereto recognized that the Debtors need a debtor in possession credit facility in an amount not to exceed $25,000,000 to satisfy their liquidity needs during the Chapter 11 Cases (the "DIP Facility"). The Bank Lock−Up Agreements require each Prepetition Lender who elects to be treated as an Equity Elector to participate in and film its Pro Rata portion of the DIP Facility. The Bank Lock−Up Agreements also require a majority of those Prepetition Lenders who are parties thereto to consent to the granting of priming liens in favor of the DIP Facility lenders. The Lock−Up Agreements also require that, as a condition to the Debtors' use of the Prepetition Lenders' cash collateral and the Prepetition Lenders' consent to have their Claims under the Prepetition Bank Credit Facility primed, the Debtors shall, among other things, (a) make monthly adequate protection payments equal to the amount of non−default contract interest under the Prepetition Bank Credit Facility, and (b) grant liens on substantially all of their assets, and to the extent such liens are junior to any liens, such liens are junior only to the DIP Facility priming liens and any valid, non−avoidable prepetition liens held by third parties.

In conjunction with the filing of this Plan, the Debtors have sought (and obtained) approval of the DIP Facility with terms consistent with the Bank Lock−Up Agreements. As set forth in more detail in the DIP Order, the DIP Lenders are entitled to the payment of certain fees and reimbursement of expenses in connection with their respective participation in the DIP Facility. The DIP Facility will provide the Debtors with the necessary liquidity between the Petition Date and the Effective Date of the Plan.

4. Exit Facility

The Debtors anticipate that they will need an exit financing credit facility upon Confirmation of the Plan up to $35,000,000 (the "Exit Facility"). To that end, the signatories to the Bank Lock−Up Agreements have agreed that the Prepetition Lenders that are signatories thereto consent to the Debtors' receipt of Exit Facility financing on terms and conditions that, among other things, provide the Exit Facility lender with a first priority lien on the Reorganized Debtors' assets and/or payment on a last−in, first−out basis. On or about November l0, 2000, the Debtors filed a motion for authority to enter into the Exit Facility with Bankers Trust Company and one or more of its affiliates (collectively, "BTCo") on terms and conditions substantially in the form of the Term Sheet (the "Exit Facility Term Sheet") attached as Annex A to an Exit Facility commitment letter with BTCo (the "Exit Facility Commitment Letter," a copy of which is contained in the Plan Supplement). The Exit Facility will essentially consist of a revolving credit facility of up to $35 million, with a $10 million sub−limit for letters of credit. Deutsche Bank Securities, Inc., an affiliate of BTCo, may arrange for other banks, financial institutions, and other "accredited investors" to provide a portion of the Exit Facility, and

17 BTCo will act as administrative agent for such lenders under the Exit Facility. A hearing on the Debtors' motion is scheduled for December 8, 2000. If the motion is approved, the Debtors will have the authority to take certain actions, including, but not limited to (i) the execution of the Exit Facility Commitment letter, and (ii) the making of any required payments and indemnifications necessary during the course of the Chapter 11 Cases, as set forth in the Exit Facility Commitment Letter.

5. Treatment of Claims and Interests

The Plan, in accordance with the terms of the Bank Lock−Up Agreements, also provides for and discusses the treatment, satisfaction and payment of other Claims against the Debtors, including but not limited to: (a) General Unsecured Claims, including but not limited to Claims of landlords, who shall receive a Pro Rata distribution of an aggregate Cash payment and certain Preference Litigation Proceeds, and a promissory note, all described more fully herein, (b) Claims of Professionals, who shall be paid in full pursuant to orders of the Bankruptcy Court and with funds set aside as appropriate "carve outs" (which includes a requirement in Article VII.J of the Plan that the Reorganized Debtors deposit Cash into a Professional Escrow Account in an amount reasonably sufficient to pay all Accrued Professional Compensation that has accrued as of the Effective Date; provided, however, that such Cash will be used to satisfy Claims of Professionals only pursuant to further order of the Bankruptcy Court); (c) the Claims of Holders of Subordinated Notes, who will receive the New UA Warrants as described in the Plan; and (d) Intercompany Claims, which shall essentially be paid in full in the ordinary course of business. The Claims of film studios and other critical trade vendors will already have been assumed and paid in full in the ordinary course of the film exhibition and distribution industry pursuant to an order of the Bankruptcy Court.

6. Management Equity

The Plan, in accordance with the terms of the Bank Lock−Up Agreements, also authorizes New UA to provide for Kurt C. Hall to continue as President and Chief Executive Officer of the Reorganized Debtors along with a management team selected by Mr. Hall, subject to approval by the relevant Reorganized Debtor's board of directors, which shall consist of seven members (two nominated by the Debt Electors, four nominated by ENIC, and the Debtors' Chief Executive Offer). The Lock−Up Agreements also provide that existing management employment agreements for certain executive managers shall be assumed and modified under the Plan to provide for mutual releases between such executive managers and the Reorganized Debtors. The Lock−Up Agreements also provide that 1,780,000 shares of New UA's Common Stock will be reserved for stock option grants to existing management executives, which shall dilute existing New UA Common Stock and be vested as follows: 10% upon the Effective Date; 10% on the one−year anniversary after the Effective Date; and 20% on each of the second through fifth one−year anniversaries after the Effective Date. The Plan, in accordance with the Bank Lock−Up Agreements, also provides that a New UA's shareholder's agreement will incorporate up to 761,111 stock options to be reserved for future grants to management by New UA's board of directors, adjusted upward for the dilution effect of certain other warrants, with a strike price to be determined by New UA's board of directors.

7. Funding the Plan

On the Effective Date, the Plan provides for two sources of new liquidity. First, the existing Prepetition Bank Credit Facility will be refinanced by the Restructured Bank Credit Facility, subject to the terms and conditions of the Bank Lock−Up Agreements. The Restructured Bank Credit Facility will be secured by liens on substantially all of the Reorganized Debtors' assets (other than those subject to preexisting mortgages and other liens) and will be on terms and conditions customary for a facility of this type. Second, on or after the Effective Date, the Debtors will receive the $35 million Exit Facility. The Exit Facility will be available for the working capital and general corporate purposes of the Debtors and will also be secured by liens on substantially all of the Reorganized Debtors' assets (other than those subject to preexisting mortgages and other liens held by third parties prior to the Petition

18 Date or created pursuant to the Plan) and will be on terms and conditions customary for a facility of this type.

8. No Substantive Consolidation

The Debtors are not being substantively consolidated under the Plan. Thus, except as otherwise provided in the Plan, any Claim against one of the Debtors will be satisfied solely from the cash and assets of such Debtor. Separate Classes have been established for each of the Debtors.

9. Classification of Claims

The classification of Claims and Equity Interests against the Debtors pursuant to this Plan is as follows:

UNITED ARTISTS THEATRE COMPANY

CLASS DESCRIPTION

1A consists of all Claims against UA accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 1B consists of all Claims against UA arising from or relating to the Prepetition Bank Credit Agreement. 1C consists of all Secured Claims against UA other than Bank Claims classified in Class 1B. A Secured Claim against UA is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UA or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UA or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 1D consists of all Intercompany Claims against UA. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 1E consists of all General Unsecured Claims against UA. IF consists of the Equity Interests in UA.

19 UNITED ARTISTS THEATRE CIRCUIT, INC.

CLASS DESCRIPTION

2A consists of all Claims against UATC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 2B consists of all Claims against UATC arising from or relating to the Prepetition Bank Credit Agreement. 2C consists of all Secured Claims against UATC other than the Bank Claims classified in Class 2B. A Secured Claim against UATC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UATC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UATC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 2D consists of the UA Note Claim against UATC. The UA Note Claim is all Claims of UATC arising from or relating to the Intercompany Note. 2E consists of all Intercompany Claims against UATC. An intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 2F consists of all General Unsecured Claims against UATC. 2G consists of all Equity Interests in UATC:

UNITED ARTISTS REALTY COMPANY

CLASS DESCRIPTION

3A consists of all Claims against UAR accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 3B consists of all Claims against UAR arising from or relating to the Prepetition Bank Credit Agreement. 3C consists of all Secured Claims against UAR other than the Bank Claims classified in Class 3B. A Secured Claim against UAR is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAR or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAR or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 3D consists of all Intercompany Claims against UAR. An Intercompany Claim is a Claim of any Debtor or a Subsidiary against any other Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 3E consists of all General Unsecured Claims against UAR. 3F consists of all Equity Interests in UAR.

20 UNITED ARTISTS PROPERTIES I CORP.

CLASS DESCRIPTION

4A consists of all Claims against UAP I accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 4B consists of all Claims against UAP I arising from or relating to the Prepetition Bank Credit Agreement. 4C consists of all Secured Claims against UAP I other than the Bank Claims classified in Class 4B. A Secured Claim against UAP I is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAP I or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAP I or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 4D consists of all Intercompany Claims against UAP I. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 4E consists of all General Unsecured Claims against UAP I. 4F consists of all Equity Interests in UAP I.

UNITED ARTISTS PROPERTIES II CORP.

CLASS DESCRIPTION

5A (consists of all Claims against UAP II accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority "Tax Claim or an Administrative Expense. 5B consists of all Claims against UAP II arising from or relating to the Prepetition Bank Credit Agreement. 5C consists of all Secured Claims against UAP II other than the Bank Claims classified in Class 5B. A Secured Claim against UAP II is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAP II or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAP II or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 5D consists of all Intercompany Claims against UAP II. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 5E consists of all General Unsecured Claims against UAP II. 5F consists of all Equity Interests in UAP II.

21 UAB, INC.

CLASS DESCRIPTION

6A consists of all Claims against UAB accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 6B consists of all Secured Claims against UAB. A Secured Claim against UAB is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAB or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAB or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 6C consists of all Intercompany Claims against UAB. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 6D consists of all General Unsecured Claims against UAB. 6E consists of all Equity Interests in UAB.

UAB II, INC.

CLASS DESCRIPTION

7A consists of all Claims against UAB II accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 7B consists of all Secured Claims against UAB II. A Secured Claim against UAB II is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAB II or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAB II or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 7C consists of all Intercompany Claims against UAB II. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 7D consists of all General Unsecured Claims against UAB II. 7E consists of all Equity Interests in UAB II.

22 TALLTHE, INC.

CLASS DESCRIPTION

8A consists of all Claims against Tallthe accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 8B consists of all Secured Claims against Tallthe. A Secured Claim against Tallthe is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which Tallthe or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of Tallthe or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 8C consists of all Intercompany Claims against Tallthe. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 8D consists of all General Unsecured Claims against Tallthe. 8E consists of all Equity Interests in Tallthe.

UA THEATRE AMUSEMENTS, INC.

CLASS DESCRIPTION

9A consists of all Claims against UATA accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 9B consists of all Secured Claims against UATA. A Secured Claim against UATA is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UATA or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UATA or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 9C consists of all Intercompany Claims against UATA. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 9D consists of all General Unsecured Claims against UATA. 9E consists of all Equity Interests in UATA.

23 UA INTERNATIONAL PROPERTY HOLDING, INC.

CLASS DESCRIPTION

10A consists of all Claims against UAIPH accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 10B consists of all Secured Claims against UAIPH. A Secured Claim against UAIPH is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAIPH or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAIPH or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 10C consists of all Intercompany Claims against UAIPH. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 10D consists of all General Unsecured Claims against UAIPH. 10E consists of all Equity Interests in UAIPH.

UA PROPERTY HOLDING II, INC.

CLASS DESCRIPTION

11A consists of all Claims against UAPH II accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 11B consists of all Secured Claims against UAPH II. A Secured Claim against UAPH II is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAPH II or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAPH or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 11C consists of all Intercompany Claims against UAPH II. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 11D consists of all General Unsecured Claims against UAPH II. 11E consists of all Equity Interests in UAPH II.

24 UNITED ARTISTS INTERNATIONAL MANAGEMENT COMPANY

CLASS DESCRIPTION

12A consists of all Claims against UAIMC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 12B consists of all Secured Claims against UAIMC. A Secured Claim against UAIMC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAIMC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAIMC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 12C consists of all Intercompany Claims against UAIMC. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 12D consists of all General Unsecured Claims against UAIMC. 12E consists of all Equity Interests in UAIMC.

BETH PAGE THEATRE CO. INC.

CLASS DESCRIPTION

13A consists of all Claims against BPTC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 13B consists of all Secured Claims against BPTC. A Secured Claim against BPTC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which BPTC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of BPTC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 13C consists of all Intercompany Claims against BPTC. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 13D consists of all General Unsecured Claims against BPTC. 13E consists of all Equity Interests in BPTC.

25 UNITED FILM DISTRIBUTION COMPANY OF SOUTH AMERICA

CLASS DESCRIPTION

14A consists of all Claims against UFDC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 14B consists of all Secured Claims against UFDC. A Secured Claim against UFDC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UFDC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UFDC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 14C consists of all Intercompany Claims against UFDC. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 14D consists of all General Unsecured Claims against UFDC. 14E consists of all Equity Interests in UFDC.

U.A.P.R., INC.

CLASS DESCRIPTION

15A consists of all Claims against UAPR accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 15B consists of all Secured Claims against UAPR. A Secured Claim against UAPR is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAPR or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAPR or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 15C consists of all Intercompany Claims against UAPR. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 15D consists of all General Unsecured Claims against UAPR. 15E consists of all Equity Interests in UAPR.

26 KING REAVIS AMUSEMENT COMPANY

CLASS DESCRIPTION

16A consists of all Claims against KRAC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 16B consists of all Secured Claims against KRAC. A Secured Claim against KRAC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which KRAC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of KRAC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 16C consists of all Intercompany Claims against KRAC. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 16D consists of all General Unsecured Claims against KRAC. 16E consists of all Equity Interests in KRAC.

MAMARONECK PLAYHOUSE HOLDING CORPORATION

CLASS DESCRIPTION

17A consists of all Claims against Mamaroneck accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 17B consists of all Secured Claims against Mamaroneck. A Secured Claim against Mamaroneck is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which Mamaroneck or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of Mamaroneck or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 17C consists of all Intercompany Claims against Mamaroneck. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 17D consists of all General Unsecured Claims against Mamaroneck. 17E consists of all Preferred Stock in Mamaroneck. 17F consists of all Common Stock in Mamaroneck.

27 R AND S THEATRES, INC.

CLASS DESCRIPTION

18A consists of all Claims against R&S accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary and benefits Claims), other than a Priority Tax Claim or an Administrative Expense. 18B consists of all Secured Claims against R&S. A Secured Claim against R&S is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which R&S or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of R&S or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. 18C consists of all Intercompany Claims against R&S. An Intercompany Claim is a Claim by a Debtor or a Subsidiary against a Debtor or its Estate (other than the UA Note Claim or an Equity Interest in any Debtor). 18D consists of all General Unsecured Claims against R&S. 18E consists of all Equity Interests in R&S.

The Plan provides that Administrative Expenses, Priority Tax Claims, and Claims in Classes 1A, 1C, 1D, 2A, 2C, 2E, 3A, 3C, 3D, 3F, 4A, 4C, 4D, 4E, 4F, 5A, 5C, 5D, 5E, 5F, 6A, 6B, 6C, 6D, 6E, 7A, 7B, 7C, 7D, 7E, 8A, 8B, 8C, 8D, 8E, 9A, 9B, 9C, 9D, 9E, 10A, 10B, 10C, 10D, 10E, 11A, 11B, 11C, 11D, 11E, 12A, 12B, 12C, 12D, 12E, 13A, 13B, 13C, 13D, 13E, 14A, 14B, 14C, 14D, 14E, 15A, 15B, 15C, 15D, 15E, 16A, 16B, 16C, 16D, 16E, 17A, 17B, 17C, 17D, 17E, 17F, 18A, 18B, 18C, 18D, and 18E will be paid in full or retain all rights relating to such Claims.

Class 2B consists of all Bank Claims against UATC arising from or relating to the Prepetition Bank Credit Facility. Under the Plan, each Holder of an Allowed Class 2B Claim shall irrevocably be treated as a Debt Elector unless such Holder has made an affirmative, irrevocable election in writing to be treated as an Equity Elector under the Plan on or before August 29, 2000. On or as soon as practicable after the Effective Date, in full and complete satisfaction of all Class 2B Claims and in accordance with the terms in the Lock−Up Agreements, (i) each Debt Elector shall receive a Pro Rata distribution of (A) the Restructured Bank Credit Agreement Note Interests and (B) the Debt Electors' New UA Common Stock and (ii) Bank of America shall receive the New UA Warrants, to be distributed as described in the Plan. On or as soon as practicable after the Effective Date, in full and complete satisfaction of all Class 2B Claims and in accordance with the terms in the Lock−Up Agreements, each Equity Elector shall receive a Pro Rata distribution of (i) the Equity Electors' New UA Common Stock, (ii) the New UA Convertible Preferred Stock, and (iii) the Equity Elector Warrants; provided, however, that if any Equity Elector does not fund its required portion of the DIP Facility in accordance with the terms of that Facility and the DIP Order, such Equity Elector shall be deemed a Debt Elector for all purposes under the Plan and in connection with the Chapter 11 Cases and shall have no ability to cure such failure to fund its portion of the DIP Facility. Class 2B is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Class 2B Claims is required for the Plan to be confirmed.

Holders of Bank Claims in Classes 1B, 3B, 4B, and 5B will receive the same treatment afforded to Holders of Class 2B Claims.

28 Holders of Secured Claims, including Other Secured Claims, in Classes 1C, 2C, 3C, 4C, 5C, 6B, 7B, 8B, 9B, lOB, 11B, 12B, 13B, 14B, 15B, 16B, 17B, and 18B will have their legal, equitable and contractual rights unaltered by the Plan.

Holders of Intercompany Claims in Classes 1D, 2E, 3D, 4D, 5D, 6C, 7C, SC, 9C, 10C, 11C 12C, 13C, 14C, 15C, 16C, 17C, and 18C shall retain such Claims and all rights, interests, and obligations related thereto.

Holders of General Unsecured Claims in Class 1E shall receive no distribution directly from the Debtors under the Plan. Holders of General Unsecured Claims in Class 2F will receive Pro Rata distributions of the Unsecured Claim Distribution Amount, Class 2F Promissory Notes, and the Preference Litigation Proceeds. Holders of General Unsecured Claims in Classes 3E, 4E, 5E, 6D, 7D, 8D, 9D, 10D, 11D, 12D, 13D, 14D, 15D, 16D, and 18D will be paid in full under the Plan in the form of a Promissory Note in the amount of such Allowed Claim,

Holders of Equity Interests in Classes 1F and 2G shall receive no distribution from the Debtors under the Plan. Holders of Equity Interests in Classes 3F, 4F, 5F, 6E, 7E, 8E, 9E, 10E, 11E, 12E, 13E, 14E, 15E, 16E, and 18E shall retain their Interests in the relevant Reorganized Debtor. Holders of Equity Interests in Class 17E shall receive the Mamaroneck Preferred Stock Payment, and Holders of Equity Interests in Class 17F shall receive a Pro Rata distribution of all liquidated assets of Mamaroneck after Mamaroneck makes all distributions to Holders of Class 17A, 17B, 17C, 17D, and 17E.

10. Treatment of Classes The following tables summarize the classification of Claims, projected aggregate amounts of such Class Claims as of the Voting Record Date that are not disputed, unliquidated, and contingent, and the projected recovery of such Classes. The assumptions made in determining such projected recoveries and the risk factors relating to the Plan are contained in Articles III and XIII in the Disclosure Statement, respectively. The treatment of Classes of Claims against the Debtors is summarized as follows:

UNITED ARTISTS THEATRE COMPANY

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 1A Claims Other Priority Claims $ 0 Paid in full Class 1B Claims Bank Claims $ 446,442 82.4% Class 1C Claims Other Secured Claims $ 0 Paid in full Class 1D Claims Intercompany Claims $ 1,112 Retains all rights Class 1E Claims General Unsecured Claims $ 295,535 1.22% Class 1F Claims Equity Interests N/A None

* Although Holders of Class IE Claims will not receive any distribution directly from the Debtors, Bank of America, on behalf of the Debt Electors, and as described in Article VII.K. of the Plan, shall distribute the New UA Warrants to the Subordinated Note Indenture Trustee or other designated agent of the Holders of Allowed Class 1E Claims, to be distributed by said Trustee or agent on a Pro Rata basis to such Holders of Allowed Class 1E Claims,which would in effect result in the stated 1.22% projected recovery, which is not included in the projected recovery of Class1B.

29

UNITED ARTIST THEATRE CIRCUIT, INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses* $ 8,395 Paid in full Unclassified Tax Claims Priority Tax Claims $ 10,537 Paid in full Class 2A Claims Other Priority Claims $ 0 Paid in full Class 2B Claims Bank Claims $ 446,442 82.4% Class 2C Claims Other Secured Claims $ 2,574 Paid in full Class 2D Claims UA Note Claim $ 446,442 1.81% Class 2E Claims Intercompany Claims $ 26,184 Retains all rights Class 2F Claims General Unsecured Claims** $ 96,469 5.2%*** Class 2G Claims Equity Interests N/A None

* For purposes of projected claim amounts, the Debtors are treating administrative expense claims as claims against UATC'S estate, because although such claims are incurred on behalf of all Debtors, UATC, as the operating Debtor handling the Debtors' cash management system, will most likely be the Debtor satisfying such claims.

** Assumes that critical trade creditors and claims relating to film licensing, distribution, and advertising contracts are paid pursuant to first−day orders granted by the Bankntptcy Court. Also includes estimated lease rejection claims.

*** Subject to reduction in accordance with Articles III.C.6 and 1.B.26 of the Plan.

*UNITED ARTISTS REALTY COMPANY Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 3A Claims Other Priority Claims $ 0 Paid in full Class 3B Claims Bank Claims $ 446,442 82.4% Class 3C Claims Other Secured Claims $ 0 Paid in full Class 3D Claims Intercompany Claims $ 12,037 Retains all rights Class 3E Claims General Unsecured Claims $ 0 Paid in full Class 3F Claims Equity Interests N/A Retains all rights

UNITED ARTISTS PROPERTIES I CORP.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claim Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 4A Claims Priority Tax Claims $ 0 Paid in full Class 4B Claims Bank Claims $ 446,442 82.4% Class 4C Claims Other Secured Claims $ 0 Paid in full Class 4D Claims Intercompany Claims $ 43,676 Retains all rights Class 4E Claims General Unsecured Claims $ 47 Paid in full Class 4F Claims Equity Interests N/A Retains all rights

30 UNITED ARTISTS PROPERTIES II CORP.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 35 Paid in full Class 5A Claims Other Priority Claims $ 0 Paid in full Class 5B Claims Bank Claims $ 446,442 82.4% Class 5C Claims Other Secured Claims $ 0 Paid in full Class 5D Claims Intercompany Claims $ 0 Paid in full Class 5E Claim General Unsecured Claims $ 0 Paid in full Class 5F Claims Equity Interests N/A Retains all rights

UAB, INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 23 Paid in full Class 6A Claims Other Priority Claims $ 0 Paid in full Class 6B Claims Secured Claims $ 0 Paid in full Class 6C Claims Intercompany Claims $ 0 Retains all rights Class 6D Claims General Unsecured Claims $ 0 Paid in full Class 6E Claims Equity Interests N/A Retains all rights

UAB II, INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 7A Claims Other Priority Claims $ 0 Paid in full Class 7B Claims Secured Claim $ 0 Paid in full Class 7C Claim Intercompany Claims $ 1,598 Retains all rights Class 7D Claims General Unsecured Claims $ 0 Paid in full Class 7E Claims Equity Interests N/A Retains all rights

TALLTHE INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in till Unclassified Tax Claims Priority Tax Claims $ 10 Paid in full Class 8A Claims Other Priority Claims $ 0 Paid in full Class 8B Claims Secured Claims $ 0 Paid in till Class 8C Claims Intercompany Claims $ 834 Retains all rights Class 8D Claims General Unsecured Claims $ 4 Paid in full Class 8E Claims Equity Interests N/A Retains all rights

31 UA THEATRE AMUSEMENTS, INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 9A Claims Other Priority Claims $ 0 Paid in full Class 9B Claims Secured Claims $ 0 Paid in full Class 9C Claims Intercompany Claims $ 0 Retains all rights Class 9D Claims General Unsecured Claims $ 0 Paid in full Class 9E Claims Equity Interests N/A Retains all rights

UA INTERNATIONAL PROPERTY HOLDING, INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 10A Claims Other Priority Claims $ 0 Paid in full Class 10B Claims Secured Claims $ 0 Paid in full Class 10C Claims Intercompany Claims $ 0 Retains all rights Class 10D Claims General Unsecured Claims $ 0 Paid in full Class 11C Claims Equity Interests N/A Retains all rights

UA PROPERTY HOLDING II, INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 11A Claims Other Priority Claims $ 0 Paid in full Class 11B Claim Secured Claims $ 983 Paid in full Class I 1 C Claims Intercompany Claims $ 0 Retains all rights Class 11D Claims General Unsecured Claims $ 0 Paid in full Class 11 E Claims Equity Interests N/A Retains all rights

UNITED ARTISTS INTERNATIONAL MANAGEMENT COMPANY

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 12A Claims Other Priority Claims $ 0 Paid in full Class 12B Claims Secured Claims $ 0 Paid in full Class 12C Claims Intercompany Claims $ 55 Retains all rights Class 12D Claims General Unsecured Claims $ 0 Paid in full

32 UNITED ARTISTS INTERNATIONAL MANAGEMENT COMPANY

Projected Claims Class Description ($ in 000's) Projected Recovery

Class 12E Claims Equity Interests N/A Retains all rights

BETH PAGE THEATRE CO., INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 13A Claims Other Priority Claims $ 0 Paid in full Class 13B Claims Secured Claims $ 0 Paid in full Class 13C Claims Intercompany Claims $ 0 Retains all rights Class 13D Claims General Unsecured Claims $ 18 Paid in full Class 13E Claims Equity Interests N/A Retains all rights

UNITED FILM DISTRIBUTION COMPANY OF SOUTH AMERICA

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 14A Claims Other Priority Claims $ 0 Paid in full Class 14B Claims Secured Claims $ 0 Paid in full Class 14C Claims Intercompany Claims $ 0 Retains all rights Class 14D Claims General Unsecured Claims $ 0 Paid in full Class 14E Claims Equity Interests N/A Retains all rights

U.A.P.R., INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 15A Claims Other Priority Claims $ 0 Paid in full Class 15B Claims Secured Claims $ 0 Paid in full Class 15C Claims Intercompany Claims $ 0 Retains all rights Class 15D Claims General Unsecured Claims $ 0 Paid in full Class 15E Claims Equity Interests N/A Retains all rights

33 KING REAVIS AMUSEMENT COMPANY

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 7 Paid in full Class 16A Claims Other Priority Claims $ 0 Paid in full Class 16B Claims Secured Claims $ 135 Paid in full Class 16C Claims Intercompany Claims $ 0 Retains all rights Class 16D Claims General Unsecured Claims $ 3 Paid in full Class 16E Claims Equity Interests N/A Retains all rights

MAMARONECK PLAYHOUSE HOLDING CORPORATION

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 0 Paid in full Class 17A Claims Other Priority Claims $ 0 Paid in full Class 17B Claims Secured Claims $ 0 Paid in full Class 17C Claims Intercompany Claims $ 0 Retains all rights Class 17D Claims General Unsecured Claims $ 0 Paid in full Class 17E Claims Preferred Stock $ 588 Paid in full

Class 17F Claims Common Stock N/A Paid in full

R AND S THEATRES, INC.

Projected Claims Class Description ($ in 000's) Projected Recovery

Unclassified Claims Administrative Expenses $ 0 Paid in full Unclassified Tax Claims Priority Tax Claims $ 56 Paid in full Class 18A Claims Other Priority Claims $ 0 Paid in full Class 18B Claims Secured Claims $ 0 Paid in full Class 18C Claims Intercompany Claims $ 1,204 Retains all rights Class 18D Claims General Unsecured Claims $ 270 Paid in full Class 18E Claims Equity Interests N/A Retains all rights

11. Liquidation Analysis The Debtors believe that the Plan will produce a greater recovery for Holders of Claims and Equity Interests than would be achieved in a liquidation in a Chapter 7 case. Houlihan Lokey Howard & Zukin, financial advisors to the Debtors, has prepared a liquidation analysis, set forth in Article III herein, to assist Holders of Claims and Equity Interests to reach their determination as to whether to accept or reject the Plan (the "Liquidation Analysis"). The Liquidation Analysis estimates the proceeds to be realized if the Debtors were to be liquidated under Chapter 7 of the Bankruptcy Code. The Liquidation Analysis is based upon projected assets and liabilities of the Debtors as of December 28, 2000 and incorporates estimates and assumptions developed by the Debtors which are subject to potentially material changes with respect to economic and business conditions, as well as uncertainties not within the Debtors' control.

No effect to creditor recoveries has been assumed for proceeds from any causes of action, including, but not limited to, preference, fraudulent transfer and other avoidance actions, or any other litigation that the Debtors may be capable of asserting. This Liquidation Analysis does not, therefore, include any estimate of the necessary expenses to litigate such Claims.

34 E. Risk Factors

There are a variety of factors that all Impaired Holders of Claims and Equity Interests should consider prior to voting to accept or reject the Plan. Such factors, which are described in more detail in Article XII herein, consist of some of the following and in each case will likely impact any recovery under the Plan:

1. the financial information contained in this Disclosure Statement has not been audited and is based upon an analysis of data available at the time of the preparation of the Plan and Disclosure Statement;

2. although the Debtors believe the Plan complies with all applicable standards of the Bankruptcy Code, the Debtors can provide no assurance that the Plan will comply with Section 1129 of the Bankruptcy Code and that the Plan will be confirmed by the Bankruptcy Court;

3. the Debtors will be required to request Confirmation of the Plan without the acceptance of all Impaired Classes entitled to vote in accordance with Section 1129(b) of the Bankruptcy Code;

4. the Bank Lock−Up Agreements will terminate one−year from the date of their execution and, thereafter will no longer bind signatories thereto to be bound to support the Debtors' Plan; and

5. any delays of either Confirmation or effectiveness of the Plan could result in, among other things, increased professional fee Claims.

The occurrence of any and all such contingencies which could affect distributions available to Holders under the Plan, however, will not affect the validity of the vote taken by the Impaired Classes to accept or reject the Plan or require any re−vote by the Impaired Classes.

F. Reorganized Debtors and the Post−Confirmation Estates

Except as otherwise described below, each Debtor shall continue to exist as a Reorganized Debtor after the Effective Date as a separate entity with all the powers of a corporation under the laws of the respective state of incorporation and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under such applicable state law. Except as otherwise provided in the Plan, the Lock−Up Agreement, the Restructured Bank Credit Agreement, or any agreement, instrument or indenture relating thereto, on or after the Effective Date, all property in each Estate (including, but not limited to, any Debtor's equity, partnership, membership or other interest in any Debtor or non−Debtor business entity, and the Causes of Action) and any property acquired by each of the Debtors under the Plan shall vest in each respective Reorganized Debtor, free and clear of all liens, Claims, charges, or other encumbrances and Equity Interests. On and after the Effective Date, the Reorganized Debtors may operate their business and may use, acquire or dispose of property and compromise or settle any Claims or Equity Interests, without supervision or approval by the Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and the Condfirmation Order. In accordance with Section 1109(b) of the Bankruptcy Code, nothing herein or in the Plan shall preclude any party in interest from appearing and being heard on any issue in the Chapter 11 Cases.

G. Prepetition Committees

As previously stated, the Bank of America and certain of the Prepetition Lenders formed an ad hoc Working Group prior to the Petition Date. The Working Group consisted of Bank of America, Morgens, Waterfall and Van Kampen. The Working Group was advised by Pillsbury Madison & Sutro, LLP, legal advisors to Bank of America, as Agent under the Prepetition Bank Credit Facility. E&Y Restructuring LLC was also retained by Pillsbury Madison to be Bank of America's financial advisors. Subsequently, when ENIC, a subsidiary of Anschutz, became a Holder of Claims under the Prepetition

35 Bank Credit Facility, ENIC and Anschutz also began participating in the negotiations with the Debtors concerning a consensual restructuring of that Facility. ENIC and Anschutz retained the law firm of Skadden, Arps, Slate, Meagher & Flom LLP as their legal advisors.

Certain of the Holders of the Subordinated Notes formed the Prepetition Subordinated Noteholder Committee prior to the Petition Date. The members of the Prepetition Noteholder Committee who as of the Petition Date have executed a confidentiality agreement with the Debtors are Apollo Advisors, Trentex Capital Management, Goldentree Asset Management, Putnam Investments, and IDS. Prior to Petition Date, the Prepetition Noteholder Committee retained Milbank as its counsel and Chanin as its financial advisor. As discussed previously, the Debtors have had contact and negotiations with the Prepetition Noteholder Committee concerning the terms of the Plan.

H. Relationship Between the Debtors

As stated previously, UATC and UAR are wholly−owned subsidiaries of UA. UAP I and UAP II are wholly−owned subsidiaries of UAR. The remaining Debtors are direct or indirect subsidiaries of UATC. From time to time, UA has loaned to UATC for its operations some of the loan proceeds that UA has received under the Prepetition Bank Credit Facility. UATC is obligated to pay to UA the principal amount, plus interest, of Prepetition Bank Credit Facility proceeds that it has borrowed from UA, pursuant to an Intercompany Note. The current principal outstanding indebtedness under the Intercompany Note is equivalent to the principal outstanding indebtedness under the Prepetition Bank Credit Facility. Moreover, UATC has operated a consolidated cash management system pursuant to which it administers the cash flow of all Debtors.

ARTICLE II THE PLAN OF REORGANIZATION

A. Introduction

The following summary and the other descriptions in the Disclosure Statement are qualified in their entirety by reference to the provisions of the Plan and its exhibits, a copy of which is annexed hereto as Exhibit A. It is urged that each Holder of a Claim or Equity Interest carefully review the terms of the Plan.

In general, a Chapter 11 plan of reorganization (i) divides claims and equity interests into separate classes, (ii) specifies the property that each class is to receive under the plan and (iii) contains other provisions necessary to the reorganization of the debtor. Under the Bankruptcy Code, "claims" and "equity interests" are classified rather than "creditors" and "shareholders" because such entities may hold claims or equity interests in more than one class. For purposes of the Disclosure Statement, the term "Holder" refers to the holder of a Claim or Equity Interest, respectively, in a particular Class under the Plan.

A Chapter 11 plan may specify that certain classes of claims or equity interests are either to be paid in full upon effectiveness of the plan or are to remain unchanged by the reorganization effectuated by the plan. Such classes are referred to as "unimpaired," and because of such favorable treatment the holders in such Classes are deemed to accept the plan. Accordingly, it is not necessary to solicit votes from the holders of claims or equity interests in such classes. A Chapter 11 plan also may specify that certain classes will not receive any distribution of property or retain any claim against a debtor. Such classes are deemed not to accept the plan and, therefore, need not be solicited to vote to accept or reject the plan.

36 The majority (but not the entirety) of creditors receiving the Disclosure Statement and ballots to vote on the Plan (because they are entitled to vote) are classified in the following Classes:

Class Claim

1B, 2B, 3B, 4B, and 5B Bank Claims

2F, 3E, 4E, 5E, 6D, 7D, 8D, 9D, 10D, 11D, 12D, 13D, General Unsecured Claims 14D, 15D, 16D, and 18D

The following Classes are unimpaired under the Plan, and Holders of Claims in such Classes are conclusively presumed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code:

Class Claim

1A, 2A, 3A, 4A, 5A, 6A, 7A, 8A, 9A, 10A, 11A, 12A, Other Priority Claims 13A, 14A, 15A, 16A, 17A, and 18A lC, 2C, 3C, 4C, and 5C Secured Claims 6B, 7B, 8B, 9B, 10B, 11B, 12B, 13B, 14B, 15B, 16B, 17B, Other Secured Claims and 18B 1D, 2E, 3D, 4D, 5D, 6C, 7C, 8C, 9C, 10C, 11C, 12C, 13C, Intercompany Claims 14C, 15C, 16C, 17C, and 18C 3F, 4F, 5F, 6E, 7E, 8E, 9E, 10E, 11E, 12E, 13E, 14E, 15E, Equity Interests 16E, 17E, 17F, and 18E 17D General Unsecured Creditors

The following Classes will receive no distribution nor retain any property under the Plan and are conclusively presumed to have rejected the Plan pursuant to Section 1126(g) of the Bankruptcy Code:

Class Claim

1F and 2G Equity Interests 1E General Unsecured Claims

Payments to be made under the Plan will be made on the Effective Date or as soon as reasonably practicable thereafter, or at such other time or times as are specified in the Plan.

As set forth in Article III of the Disclosure Statement, the Debtors believe that under the Plan, each Holder will obtain a recovery in an amount not less than the recovery which otherwise would be obtained if the assets of the Debtors were liquidated under Chapter 7 of the Bankruptcy Code.

37 B. Classification of Claims and Interests

1. Summary The categories of Claims and Equity Interests and their treatment listed below classify Claims and Equity Interests for all purposes, including voting, Confirmation, and distribution pursuant to the Plan and Sections 1122 and 1123(a)(1) of the Bankruptcy Code. A Claim or Equity Interest shall be deemed classified in a particular Class only to the extent that the Claim or Equity Interest qualifies within the description of that Class and shall be deemed classified in a different Class to the extent that any remainder of such Claim or Equity Interest qualifies within the description of such different Class. A Claim or Equity Interest is in a particular Class only to the extent that such Claim or Equity Interest is Allowed in that Class and has not been paid or otherwise settled prior to the Effective Date.

The classification of Claims and Equity Interests against the Debtors pursuant to the Plan is as follows:

UNITED ARTISTS THEATRE COMPANY

Class Claim Status Voting Rights

1A Other Priority Claims Unimpaired not entitled to vote 1B Bank Claims Impaired entitled to vote 1C Other Secured Claims Unimpaired not entitled to vote 1D Intercompany Claims Unimpaired not entitled to vote 1E General Unsecured Claims Impaired not entitled to vote 1F Equity Interests Impaired not entitled to vote

UNITED ARTISTS THEATRE CIRCUIT, INC.

Class Claim Status Voting Rights

2A Other Priority Claims Unimpaired not entitled to vote 2B Bank Claims Impaired entitled to vote 2C Other Secured Claims Unimpaired not entitled to vote 2D UA Note Claim Impaired entitled to vote 2E Intercompany Claims Unimpaired not entitled to vote 2F General Unsecured Claims Impaired entitled to vote 2G Equity Interests Impaired not entitled to vote

UNITED ARTISTS REALTY COMPANY

Class Claim Status Voting Rights

3A Other Priority Claims Unimpaired not entitled to vote 3B Bank Claims Impaired entitled to vote 3C Other Secured Claims Unimpaired not entitled to vote 3D Intercompany Claims Unimpaired not entitled to vote 3E General Unsecured Claims Impaired entitled to vote 3F Equity Interests Unimpaired not entitled to vote

38 UNITED ARTISTS PROPERTIES I CORP.

Class Claim Status Voting Rights

4A Other Priority Claims Unimpaired not entitled to vote 4B Bank Claims Impaired entitled to vote 4C Other Secured Claims Unimpaired not entitled to vote 4D Intercompany Claims Unimpaired not entitled to vote 4E General Unsecured Claims Impaired entitled to vote 4F Equity Interests Unimpaired not entitled to vote

UNITED ARTISTS PROPERTIES II CORP.

Class Claim Status Voting Rights

5A Other Priority Claims Unimpaired not entitled to vote 5B Bank Claims Impaired entitled to vote 5C Other Secured Claims Unimpaired not entitled to vote 5D Intercompany Claims Unimpaired not entitled to vote 5E General Unsecured Claims Impaired entitled to vote 5F Equity Interests Unimpaired not entitled to vote

UAB, INC.

Class Claim Status Voting Rights

6A Other Priority Claims Unimpaired not entitled to vote 6B Secured Claims Unimpaired not entitled to vote 6C Intercompany Claims Unimpaired not entitled to vote 6D General Unsecured Claims Impaired entitled to vote 6E Equity Interests Unimpaired not entitled to vote

UAB II, INC.

Class Claim Status Voting Rights

7A Other Priority Claims Unimpaired not entitled to vote 7B Secured Claims Unimpaired not entitled to vote 7C Intercompany Claims Unimpaired not entitled to vote 7D General Unsecured Claims Impaired entitled to vote 7E Equity Interests Unimpaired not entitled to vote

TALLTHE INC.

Class Claim Status Voting Rights

8A Priority Claims Unimpaired not entitled to vote 8B Secured Claims Unimpaired not entitled to vote 8C Intercompany Claims Unimpaired not entitled to vote 8D General Unsecured Claims Impaired entitled to vote 8E Equity Interests Unimpaired not entitled to vote

39 UA THEATRE AMUSEMENTS, INC.

Class Claim Status Voting Rights

9A Other Priority Claims Unimpaired not entitled to vote 9B Secured Claims Unimpaired not entitled to vote 9C Intercompany Claims Unimpaired not entitled to vote 9D General Unsecured Claims Impaired entitled to vote 9E Equity Interests Unimpaired not entitled to vote

UA INTERNATIONAL PROPERTY HOLDING, INC.

Class Claim Status Voting Rights

10A Other Priority Claims Unimpaired not entitled to vote 10B Secured Claims Unimpaired not entitled to vote 10C Intercompany Claims Unimpaired not entitled to vote 10D General Unsecured Claims Impaired entitled to vote 10E Equity Interests Unimpaired not entitled to vote

UA PROPERTY HOLDING II, INC.

Class Claim Status Voting Rights

11A Other Priority Claims Unimpaired not entitled to vote 11B Secured Claims Unimpaired not entitled to vote 11C Intercompany Claims Unimpaired not entitled to vote 11D General Unsecured Claims Impaired entitled to vote 11E Equity Interests Unimpaired not entitled to vote

UNITED ARTISTS INTERNATIONAL MANAGEMENT COMPANY

Class Claim Status Voting Rights

12A Other Priority Claims Unimpaired not entitled to vote 12B Secured Claims Unimpaired not entitled to vote 12C Intercompany Claims Unimpaired not entitled to vote 12D General Unsecured Claims Impaired entitled to vote 12E Equity Interests Unimpaired not entitled to vote

BETH PAGE THEATRE CO. INC.

Class Claim Status Voting Rights

13A Other Priority Claims Unimpaired not entitled to vote 13B Secured Claims Unimpaired not entitled to vote 13C Intercompany Claims Unimpaired not entitled to vote 13D General Unsecured Claims Impaired entitled to vote 13E Equity Interests Unimpaired not entitled to vote

40 UNITED FILM DISTRIBUTION COMPANY OF SOUTH AMERICA

Class Claim Status Voting Rights

14A Other Priority Claims Unimpaired not entitled to vote 14B Secured Claims Unimpaired not entitled to vote 14C Intercompany Claims Unimpaired not entitled to vote 14D General Unsecured Claims Impaired entitled to vote 14E Equity Interests Unimpaired not entitled to vote

U.A.P.R., INC.

Class Claim Status Voting Rights

15A Other Priority Claims Unimpaired not entitled to vote 15B Secured Claims Unimpaired not entitled to vote 15C Intercompany Claims Unimpaired not entitled to vote 15D General Unsecured Claims Impaired entitled to vote 15E Equity Interests Unimpaired not entitled to vote

KING REAVIS AMUSEMENT COMPANY

Class Claim Status Voting Rights

16A Other Priority Claims Unimpaired not entitled to vote 16B Secured Claims Unimpaired not entitled to vote 16C Intercompany Claims Unimpaired not entitled to vote 16D General Unsecured Claims Impaired entitled to vote 16E Equity Interests Unimpaired not entitled to vote

MAMARONECK PLAYHOUSE HOLDING CORPORATION

Class Claim Status Voting Rights

17A Other Priority Claims Unimpaired not entitled to vote 17B Secured Claims Unimpaired not entitled to vote 17C Intercompany Claims Unimpaired not entitled to vote 17D General Unsecured Claims Impaired entitled to vote 17E Preferred Stock Equity Interests Unimpaired not entitled to vote 17F Common Stock Equity Interests Unimpaired not entitled to vote

R AND S THEATRES, INC.

Class Claim Status Voting Rights

18A Other Priority Claims Unimpaired not entitled to vote 18B Secured Claims Unimpaired not entitled to vote 18C Intercompany Claims Unimpaired not entitled to vote 18D General Unsecured Claims Impaired entitled to vote 18E Equity Interests Unimpaired not entitled to vote

41 2. Classification and Treatment of Claims

a. Administrative Expense Claims

Subject to the provisions of Section 330(a) and 33 1 of the Bankruptcy Code, each Holder of an Allowed Administrative Claim will be paid the full unpaid amount of such Allowed Administrative Claim in Cash on the Effective Date, or upon such other terms as may be agreed upon by such Holder and the Reorganized Debtors or otherwise upon order of the Bankruptcy Court; provided, however, that Allowed Administrative Claims representing obligations incurred in the ordinary course of business or otherwise assumed by the Debtors pursuant to the Plan will be assumed on the Effective Date and paid or performed by the Reorganized Debtors when due in accordance with the terms and conditions of the particular agreements governing such obligations.

b. Priority Tax Claims

On the Effective Date, each Holder of a Priority Tax Claim due and payable on or prior to the Effective Date shall be paid Cash in an amount equal to the amount of such Allowed Claim, or shall be paid on account of its Allowed Claim on such other terms as have been or may be agreed upon by such Holder and the Debtors. The amount of any Priority Tax Claim that is not an Allowed Claim or that is not otherwise due and payable on or prior to the Effective Date, and the rights of the Holder of such Claim, if any, to payment in respect thereof shall (i) be determined in the manner in which the amount of such Claim and the rights of the Holder of such Claim would have been resolved or adjudicated if the Chapter 11 Cases had not been commenced, (ii) survive the Effective Date and Consummation of the Plan as if the Chapter 11 Cases had not been commenced, and (iii) not be discharged pursuant to Section 1141 of the Bankruptcy Code. In accordance with Section 1124 of the Bankruptcy Code, the Plan shall leave unaltered the legal, equitable, and contractual rights of each Holder of a Priority Tax Claim.

c. Classification and Treatment of Claims against UA

Class 1A—Other Priority Claims (Unimpaired)

Class 1A consists of all Other Priority Claims against UA accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 1A Claims are unaltered by the Plan. Unless the Holder of such Claim and UA agree to a different treatment, each Holder of an Allowed Class 1A Claim shall receive one of the following alternative treatments, at the election of UA: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by New UA; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by New UA, or (B) will be paid in full in Cash by New UA when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 1A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 1A is not impaired, and the Holders of Class 1A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 1A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 1B—Bank Claims (Impaired)

Class 1B consists of all Bank Claims against UA arising from or relating to the Prepetition Bank Credit Facility. Under the Plan, in full and complete satisfaction of all Claims in Class lB, each Holder

42 of an Allowed Class 1B Claim shall receive the same treatment set forth for the Holders of Class 2B Claims. Class 1B is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Class 1B Claims is required for the Plan to be confirmed.

Class 1C—Other Secured Claims (Unimpaired)

Class 1C consists of all Secured Claims against UA but does not include Bank Claims. A Secured Claim against UA is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UA or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UA or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 1C Claim shall receive one of the following alternative treatments, at the election of UA: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UA shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UA or New UA; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 1C Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 1C Claims are unaltered by the Plan. Because Class 1C is not impaired, the Holders of Class 1C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 1C Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any claims in this Class.

Class 1D—Intercompany Claims (Unimpaired)

Class 1D consists of all Intercompany Claims against UA. Under the Plan, on the Effective Date, each Holder of an Allowed Class 1D Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 1D is not impaired, and the Holders of Class 1D Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 1D are not entitled to vote to accept or reject the Plan.

Class 1E—General Unsecured Claims (Impaired)

Class 1E consists of all General Unsecured Claims against UA (including but not limited to Subordinated Note Claims) but does not include Bank Claims or Intercompany Claims. On the Effective Date, the Holders of Class 1E Claims shall be deemed to have neither received any distribution directly from the Debtors nor have retained any property of the Debtors under the Plan. All Subordinated Notes issued before the Petition Date will be canceled.

Class 1F—Equity Interests (Impaired)

Class 1F consists of all Claims of Holders of Equity Interests in UA. An Equity Interest means any equity interest in UA, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, the Holders of Class 1F Equity Interests shall neither receive any distribution from the Debtors nor retain any property of the Debtors under the Plan. All Common Stock issued before the Petition Date will be

43 canceled. Class 1F is impaired, but because no distributions will be made to Holders of Class 1F Equity Interests from the Debtors nor will such Holders retain any property of the Debtors, such Holders are deemed to reject the Plan pursuant to Section 1126(g) of the Bankruptcy Code. Class 1F is not entitled to vote to accept or reject the Plan.

d. Classification and Treatment of Claims against UATC

Class 2A—Other Priority Claims (Unimpaired)

Class 2A consists of all Other Priority Claims against UATC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 2A Claims are unaltered by the Plan. Unless the Holder of such Claim and UATC agree to a different treatment, each Holder of an Allowed Class 2A Claim shall receive one of the following alternative treatments, at the election of UATC: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by New UATC; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by New UATC, or (B) will be paid in full in Cash by New UATC when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 2A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 2A is not impaired, and the Holders of Class 2A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 2A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 2B—Bank Claims (Impaired)

Each Holder of an Allowed Class 2B Claim shall be treated under the Plan as a Debt Elector or an Equity Elector. On or as soon as practicable after the Effective Date, in full and complete satisfaction of all Class 2B Claims and in accordance with the terms in the Lock−Up Agreements, (i) each Debt Elector shall receive, among other things, a Pro Rata distribution of (A) the Restructured Bank Credit Agreement Note Interests and (B) the Debt Electors' New UA Common Stock, and (iii) Bank of America (or its assignee) shall receive the New UA Warrants, to be held in trust for the benefit of the Debt Electors (or their assignees) and distributed as described in Article VII.K of the Plan. On or as soon as practicable after the Effective Date, in full and complete satisfaction of all Class 2B Claims and in accordance with the terms in the Lock−Up Agreements, each Equity Elector shall receive, among other things, a Pro Rata distribution of (i) the Equity Electors' New UA Common Stock, (ii) the New UA Convertible Preferred Stock, and (iii) the Equity Elector Warrants; provided, however, that if any Equity Elector does not fund its required portion of the DIP Facility in accordance with the terms of that Facility and the DIP Order, such Equity Elector shall be deemed a Debt Elector for all purposes under the Plan and in connection with the Chapter 11 Cases and shall have no ability to cure such failure to fund its portion of the DIP Facility. On the Confirmation Date, Bank of America shall receive from the Reorganized Debtors, in accordance with the Lock−Up Agreements, a $1,000,000 Cash fee to be held in trust for the benefit of the Working Group and ENIC in consideration for their efforts in the consensual restructuring of the Debtors' obligations. Class 2B is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Class 2B Claims is required for the Plan to be confirmed.

44 Class 2C—Other Secured Claims (Unimpaired)

Class 2C consists of all Secured Claims against UATC but does not include Bank Claims. A Secured Claim against UATC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UATC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UATC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 2C Claim shall receive one of the following alternative treatments, at the election of UATC: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UA shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UATC or New UATC; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 2C Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 2C Claims are unaltered by the Plan. Because Class 2C is not impaired, the Holders of Class 2C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 2C Claims are not entitled to vote to accept or reject the Plan.

Class 2D—UA Note Claim (Impaired)

Class 2D consists of the UA Note Claim against UATC. On or as soon as reasonably practicable after the Effective Date, in full and complete satisfaction of the Class 2D Claim, UA, the Holder of the Allowed Class 2D Claim, shall receive the New UATC Common Stock.

Class 2E—Intercompany Claims (Unimpaired)

Class 2E consists of all Intercompany Claims against UATC. Under the Plan, on the Effective Date, each Holder of an Allowed Class 2E Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 2E is not impaired, and the Holders of Class 2E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 2E are not entitled to vote to accept or reject the Plan.

Class 2F—General Unsecured Claims (Impaired)

Class 2F consists of all General Unsecured Claims against UATC but does not include Bank Claims, Intercompany Claims, or the UA Note Claim. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 2F Claim shall receive, in full and complete satisfaction of such Claim, (i) a Pro Rata distribution of the Unsecured Claim Distribution Amount payable in three equal installments, (ii) a Class 2F Promissory Note, and (iii) a Pro Rata distribution of certain Preference Litigation Proceeds; provided, however, that if Class 2F does not vote to accept the Plan, then on the Effective Date, each Holder of a Class 2F Claim shall neither receive any distribution nor retain any property under the Plan. Class 2F is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 2F is required for the Plan to be confirmed.

45 Class 2G—Equity Interests (Impaired)

Class 2G consists of all Claims of Holders of Equity Interests in UATC. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, the Holders of Class 2G Equity Interests shall neither receive any distributions nor retain any property under the Plan. All Common Stock issued before the Petition Date will be canceled. Class 2G is impaired, but because no distributions will be made to Holders of Class 2G Equity Interests nor will such Holders retain any property, such Holders are deemed to reject the Plan pursuant to Section 1126(g) of the Bankruptcy Code. Class 2G is not entitled to vote to accept or reject the Plan.

e. Classification and Treatment of Claims against UAR

Class 3A—Other Priority Claims (Unimpaired)

Class 3A consists of all Other Priority Claims against UAR accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 3A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAR agree to a different treatment, each Holder of an Allowed Class 3A Claim shall receive one of the following alternative treatments, at the election of UAR: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAR; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAR, or (B) will be paid in full in Cash by Reorganized UAR when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 3A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 3A is not impaired, and the Holders of Class 3A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 3A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 3B—Bank Claims (Impaired)

Class 3B consists of all Bank Claims against UAR arising from or relating to the Prepetition Bank Credit Facility. Under the Plan, in full and complete satisfaction of all Claims in Class 3B, each Holder of an Allowed Class 3B Claim shall receive the same treatment set forth for the Holders of Class 2B Claims described above. Class 3B is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Class 3B Claims is required for the Plan to be confirmed.

Class 3C—Other Secured Claims (Unimpaired)

Class 3C consists of all Secured Claims against UAR but does not include Bank Claims. A Secured Claim against UAR is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAR or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAR or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim.

46 Under the Plan, on the Effective Date, each Holder of an Allowed Class 3C Claim shall receive one of the following alternative treatments, at the election of UAR: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAR shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAR or Reorganized UAR; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 3C Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 3C Claims are unaltered by the Plan. Because Class 3C is not impaired, the Holders of Class 3C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 3C Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 3D—Intercompany Claims (Unimpaired)

Class 3D consists of all Intercompany Claims against UAR. Under the Plan, on the Effective Date, each Holder of an Allowed Class 3D Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 3D is not impaired, and the Holders of Class 3D Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 3D are not entitled to vote to accept or reject the Plan.

Class 3E—General Unsecured Claims (Impaired)

Class 3E consists of all General Unsecured Claims against UAR but does not include Bank Claims or Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 3E Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 3E is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 3E is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 3F—Equity Interests (Unimpaired)

Class 3F consists of all Claims of Holders of Equity Interests in UAR. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 3F Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 3F is not impaired, and the Holders of Class 3F Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 3F are not entitled to vote to accept or reject the Plan.

f. Classification and Treatment of Claims against UAP I

Class 4A—Other Priority Claims (Unimpaired)

Class 4A consists of all Other Priority Claims against UAP I accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 4A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAP I agree to a different

47 treatment, each Holder of an Allowed Class 4A Claim shall receive one of the following alternative treatments, at the election of UAP I: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAP I; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAP I, or (B) will be paid in full in Cash by Reorganized UAP I when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 4A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 4A is not impaired, and the Holders of Class 4A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 4A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 4B—Bank Claims (Impaired)

Class 4B consists of all Bank Claims against UAP I arising from or relating to the Prepetition Bank Credit Facility. Under the Plan, in full and complete satisfaction of all Claims in Class 4B, each Holder of an Allowed Class 4B Claim shall receive the same treatment set forth for the Holders of Class 2B Claims described above. Class 4B is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Class 4B Claims is required for the Plan to be confirmed.

Class 4C—Other Secured Claims (Unimpaired)

Class 4C consists of all Secured Claims against UAP I but does not include Bank Claims. A Secured Claim against UAP I is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAP I or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAP I or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 4C Claim shall receive one of the following alternative treatments, at the election of UAP I: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAP I shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAP I or Reorganized UAP I; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 4C Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 4C Claims are unaltered by the Plan. Because Class 4C is not impaired, the Holders of Class 4C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 4C Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 4D—Intercompany Claims (Unimpaired)

Class 4D consists of all Intercompany Claims against UAP I. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 4D Claim shall retain

48 such Claim and the rights, interests, and obligations related thereto. Class 4D is not impaired, and the Holders of Class 4D Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 4D are not entitled to vote to accept or reject the Plan.

Class 4E—General Unsecured Claims (Impaired)

Class 4E consists of all General Unsecured Claims against UAP I but does not include Bank Claims or Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 4E Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 4E is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 4E is required for the Plan to be confirmed.

Class 4F—Equity Interests (Unimpaired)

Class 4F consists of all Claims of Holders of Equity Interests in UAP I. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 4F Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 4F is not impaired, and the Holders of Class 4F Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 4F Claims are not entitled to vote to accept or reject the Plan.

g. Classification and Treatment of Claims against UAP II

Class 5A—Other Priority Claims (Unimpaired)

Class 5A consists of all Other Priority Claims against UAP II accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 5A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAP II agree to a different treatment, each Holder of an Allowed Class 5A Claim shall receive one of the following alternative treatments, at the election of UAP II: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAP II; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAP II, or (B) will be paid in full in Cash by the Reorganized UAP II when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 5A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 5A is not impaired, and the Holders of Class 5A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 5A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 5B—Bank Claims (Impaired)

Class 5B consists of all Bank Claims against UAP II arising from or relating to the Prepetition Bank Credit Facility. Under the Plan, in full and complete satisfaction of all Claims in Class 5B, each Holder of an Allowed Class 5B Claim shall receive the same treatment set forth for the Holders of Class 2B Claims described above. Class 5B is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Class 5B Claims is required for the Plan to be confirmed.

49 Class 5C—Other Secured Claims (Unimpaired)

Class 5C consists of all Secured Claims against UAP II but does not include Bank Claims, A Secured Claim against UAP II is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAP II or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAP II or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 5C Claim shall receive one of the following alternative treatments, at the election of UAP II: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAP II shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAP II or Reorganized UAP II; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 5C Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 5C Claims are unaltered by the Plan. Because Class 5C is not impaired, the Holders of Class 5C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 5C Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 5D—Intercompany Claims (Unimpaired)

Class 5D consists of all Intercompany Claims against UAP II. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 5D Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 5D is not impaired, and the Holders of Class 5D Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 5D are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 5E—General Unsecured Claims (Impaired)

Class 5E consists of all General Unsecured Claims against UAP II but does not include Bank Claims or Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 5E Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 5E is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 5E is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 5F—Equity Interests (Unimpaired)

Class 5F consists of all Claims of Holders of Equity Interests in UAP II. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 5F Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 5F is not impaired, and the Holders of Class 5F Claims are conclusively deemed

50 to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 5F Claims are not entitled to vote to accept or reject the Plan.

h. Classification and Treatment of Claims against UAB

Class 6A—Other Priority Claims (Unimpaired)

Class 6A consists of all Other Priority Claims against UAB accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 6A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAB agree to a different treatment, each Holder of an Allowed Class 6A Claim shall receive one of the following alternative treatments, at the election of UAB: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAB; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAB, or (B) will be paid in full in Cash by Reorganized Debtor UAB when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 6A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 6A is not impaired, and the Holders of Class 6A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 6A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 6B—Secured Claims (Unimpaired)

Class 6B consists of all Secured Claims against UAB. A Secured Claim against UAB is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAB or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAB or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 6B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 6B Claim shall receive one of the following alternative treatments, at the election of UAB: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAB shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAB or Reorganized UAB; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 6B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 6B Claims are unaltered by the Plan. Because Class 6B is not impaired, the Holders of Class 6B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 6B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

51 Class 6C—Intercompany Claims (Unimpaired)

Class 6C consists of all Intercompany Claims against UAB. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 6C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 6C is not impaired, and the Holders of Class 6C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 6C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 6D—General Unsecured Claims (Impaired)

Class 6D consists of all General Unsecured Claims against UAB but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 6D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 6D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 6D is required for the Plan to be confirmed.

Class 6E—Equity Interests (Unimpaired)

Class 6E consists of all Claims of Holders of Equity Interests in UAB. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 6E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 6E is not impaired, and the Holders of Class 6E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 6E Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

i. Classification and Treatment of Claims against UAB II

Class 7A—Other Priority Claims (Unimpaired)

Class 7A consists of all Other Priority Claims against UAB II accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 7A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAB II agree to a different treatment, each Holder of an Allowed Class 7A Claim shall receive one of the following alternative treatments, at the election of UAB II: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAB II; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAB II, or (B) will be paid in full in Cash by Reorganized Debtor UAB II when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 7A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 7A is not impaired, and the Holders of Class 7A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1127(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 7A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

52 Class 7B—Secured Claims (Unimpaired)

Class 7B consists of all Secured Claims against UAB II. A Secured Claim against UAB II is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAB II or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAB II or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 7B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 7B Claim shall receive one of the following alternative treatments, at the election of UAB II: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAB II shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAB II or Reorganized UAB II; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 7B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 7B Claims are unaltered by the Plan. Because Class 7B is not impaired, the Holders of Class 7B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 7B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 7C—Intercompany Claims (Unimpaired)

Class 7C consists of all Intercompany Claims against UAB II. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 7C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 7C is not impaired, and the Holders of Class 7C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 7C are not entitled to vote to accept or reject the Plan.

Class 7D—General Unsecured Claims (Impaired)

Class 7D consists of all General Unsecured Claims against UAB II but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 7D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 7D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 7D is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 7E—Equity Interests (Unimpaired)

Class 7E consists of all Claims of Holders of Equity Interests in UAB II. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 7E Equity Interest shall retain its Common Stock and all rights, interests, and obligations

53 related thereto. Class 7E is not impaired, and the Holders of Class 7E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 7E Claims are not entitled to vote to accept or reject the Plan.

j. Classification and Treatment of Claims against Tallthe

Class 8A—Other Priority Claims (Unimpaired)

Class 8A consists of all Other Priority Claims against Tallthe accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 8A Claims are unaltered by the Plan. Unless the Holder of such Claim and Tallthe agree to a different treatment, each Holder of an Allowed Class 8A Claim shall receive one of the following alternative treatments, at the election of Tallthe: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized Tallthe; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized Tallthe, or (B) will be paid in full in Cash by Reorganized Debtor Tallthe when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 8A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 8A is not impaired, and the Holders of Class 8A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1128(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 8A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 8B—Secured Claims (Unimpaired)

Class 8B consists of all Secured Claims against Tallthe. A Secured Claim against Tallthe is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which Tallthe or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of Tallthe or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 8B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 8B Claim shall receive one of the following alternative treatments, at the election of Tallthe: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) Tallthe shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against Tallthe or Reorganized Tallthe; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 8B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 8B Claims are unaltered by the Plan. Because Class 8B is not impaired, the Holders of Class 8B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of

54 Class 8B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 8C—Intercompany Claims (Unimpaired)

Class 8C consists of all Intercompany Claims against Tallthe. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 8C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 8C is not impaired, and the Holders of Class 8C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 8C are not entitled to vote to accept or reject the Plan.

Class 8D—General Unsecured Claims (Impaired)

Class 8D consists of all General Unsecured Claims against Tallthe but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 8D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 8D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 8D is required for the Plan to be confirmed.

Class 8E—Equity Interests (Unimpaired)

Class 8E consists of all Claims of Holders of Equity Interests in Tallthe. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 8E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 8E is not impaired, and the Holders of Class 8E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 8E Claims are not entitled to vote to accept or reject the Plan.

k. Classification and Treatment of Claims against UATA

Class 9A—Other Priority Claims (Unimpaired)

Class 9A consists of all Other Priority Claims against UATA accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 9A Claims are unaltered by the Plan. Unless the Holder of such Claim and UATA agree to a different treatment, each Holder of an Allowed Class 9A Claim shall receive one of the following alternative treatments, at the election of UATA: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UATA; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UATA, or (B) will be paid in full in Cash by Reorganized Debtor UATA when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 9A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 9A is not impaired, and the Holders of Class 9A Claims are conclusively deemed to have accepted the Plan pursuant to

55 Section 1129(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 9A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 9B—Secured Claims (Unimpaired)

Class 9B consists of all Secured Claims against UATA. A Secured Claim against UATA is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UATA or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UATA or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 9B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 9B Claim shall receive one of the following alternative treatments, at the election of UATA: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UATA shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UATA or Reorganized UATA; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 9B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 9B Claims are unaltered by the Plan. Because Class 9B is not impaired, the Holders of Class 9B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 9B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 9C—Intercompany Claims (Unimpaired)

Class 9C consists of all Intercompany Claims against UATA. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 9C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 9C is not impaired, and the Holders of Class 9C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 9C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 9D—General Unsecured Claims (Impaired)

Class 9D consists of all General Unsecured Claims against UATA but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 9D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 9D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 9D is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 9E—Equity Interests (Unimpaired)

Class 9E consists of all Claims of Holders of Equity Interests in UATA. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares

56 of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 9E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 9E is not impaired, and the Holders of Class 9E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 9E Claims are not entitled to vote to accept or reject the Plan.

l. Classification and Treatment of Claims against UAIPH

Class 10A—Other Priority Claims (Unimpaired)

Class 10A consists of all Other Priority Claims against UAIPH accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 10A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAIPH agree to a different treatment, each Holder of an Allowed Class 10A Claim shall receive one of the following alternative treatments, at the election of UAIPH: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAIPH; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAIPH, or (B) will be paid in full in Cash by Reorganized Debtor UAIPH when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 10A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 10A is not impaired, and the Holders of Class 10A Claims are conclusively deemed to have accepted the Plan pursuant to Section 11210(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 10A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 10B—Secured Claims (Unimpaired)

Class 10B consists of all Secured Claims against UAIPH. A Secured Claim against UAIPH is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAIPH or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAIPH or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 10B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 10B Claim shall receive one of the following alternative treatments, at the election of UAIPH: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAIPH shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAIPH or Reorganized UAIPH; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 10B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

57 The legal, equitable and contractual rights of the Holders of Class 10B Claims are unaltered by the Plan. Because Class 10B is not impaired, the Holders of Class 10B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 10B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 10C—Intercompany Claims (Unimpaired)

Class 10C consists of all Intercompany Claims against UAIPH. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 10C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 10C is not impaired, and the Holders of Class 10C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 10C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 10D—General Unsecured Claims (Impaired)

Class 10D consists of all General Unsecured Claims against UAIPH but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 10D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 10D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 10D is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 10E—Equity Interests (Unimpaired)

Class 10E consists of all Claims of Holders of Equity Interests in UAIPH. An Equity Interest means any equity interest, including, but not limited to, all issued, unissued, authorized or outstanding shares of stock (including Common Stock and Preferred Stock), together with any warrants, options or contract rights to purchase or acquire such interests at any time. On the Effective Date, each Holder of a Class 10E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 10E is not impaired, and the Holders of Class 10E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 10E Claims are not entitled to vote to accept or reject the Plan.

m. Classification and Treatment of Claims against UAPH II

Class 11A—Other Priority Claims (Unimpaired)

Class 11A consists of all Other Priority Claims against UAPH II accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 11A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAPH II agree to a different treatment, each Holder of an Allowed Class 11A Claim shall receive one of the following alternative treatments, at the election of UAPH II: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAPH II; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAPH II, or (B) will be paid in full in Cash by Reorganized Debtor UAPH II when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the

58 Bankruptcy Code. Any default with respect to any Class 11A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 11A is not impaired, and the Holders of Class 11A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1121(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 11A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 11B—Secured Claims (Unimpaired)

Class 11B consists of all Secured Claims against UAPH II. A Secured Claim against UAPH II is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAPH II or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAPH II or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 11B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 11B Claim shall receive one of the following alternative treatments, at the election of UAPH II: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAPH II shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAPH II or Reorganized UAPH II; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 11B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 11B Claims are unaltered by the Plan. Because Class 11B is not impaired, the Holders of Class 11B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 11B Claims are not entitled to vote to accept or reject the Plan.

Class 11C—Intercompany Claims (Unimpaired)

Class 11C consists of all Intercompany Claims against UAPH II. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 11C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 11C is not impaired, and the Holders of Class 11C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 11C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 11D—General Unsecured Claims (Impaired)

Class 11D consists of all General Unsecured Claims against UAPH II but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 11D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 11D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 11D is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

59 Class 11E—Equity Interests (Unimpaired)

Class 11E consists of all Claims of Holders of Equity Interests in UAPH II. On the Effective Date, each Holder of a Class 11E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 1lE is not impaired, and the Holders of Class 1lE Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 11E Claims are not entitled to vote to accept or reject the Plan.

n. Classification and Treatment of Claims against UAIMC

Class 12A—Other Priority Claims (Unimpaired)

Class 12A consists of all Other Priority Claims against UAIMC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 12A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAIMC agree to a different treatment, each Holder of an Allowed Class 12A Claim shall receive one of the following alternative treatments, at the election of UAIMC: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAIMC; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAIMC, or (B) will be paid in full in Cash by Reorganized Debtor UAIMC when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 12A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 12A is not impaired, and the Holders of Class 12A Claims are conclusively deemed to have accepted the Plan pursuant to Section 11212(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 12A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 12B—Secured Claims (Unimpaired)

Class 12B consists of all Secured Claims against UAIMC. A Secured Claim against UAIMC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAIMC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAIMC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 12B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 12B Claim shall receive one of the following alternative treatments, at the election of UAIMC: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAIMC shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAIMC or Reorganized UAIMC; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 12B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

60 The legal, equitable and contractual rights of the Holders of Class 12B Claims are unaltered by the Plan. Because Class 12B is not impaired, the Holders of Class 12B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 12B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 12C—Intercompany Claims (Unimpaired)

Class 12C consists of all Intercompany Claims against UAIMC. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 12C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 12C is not impaired, and the Holders of Class 12C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 12C are not entitled to vote to accept or reject the Plan.

Class 12D—General Unsecured Claims (Impaired)

Class 12D consists of all General Unsecured Claims against UAIMC but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 12D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 12D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 12D is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 12E—Equity Interests (Unimpaired)

Class 12E consists of all Claims of Holders of Equity Interests in UAIMC. On the Effective Date, each Holder of a Class 12E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 12E is not impaired, and the Holders of Class 12E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 12E Claims are not entitled to vote to accept or reject the Plan.

o. Classification and Treatment of Claims against BPTC

Class 13A—Other Priority Claims (Unimpaired)

Class 13A consists of all Other Priority Claims against BPTC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 13A Claims are unaltered by the Plan. Unless the Holder of such Claim and BPTC agree to a different treatment, each Holder of an Allowed Class 13A Claim shall receive one of the following alternative treatments, at the election of BPTC: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized BPTC; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized BPTC, or (B) will be paid in full in Cash by Reorganized Debtor BPTC when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 13A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 13A is not impaired, and the Holders of Class 13A Claims are conclusively deemed to have accepted the Plan pursuant to

61 Section 11213(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 13A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 13B—Secured Claims (Unimpaired)

Class 13B consists of all Secured Claims against BPTC. A Secured Claim against BPTC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which BPTC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of BPTC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 13B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 13B Claim shall receive one of the following alternative treatments, at the election of BPTC: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) BPTC shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against BPTC or Reorganized BPTC; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 13B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 13B Claims are unaltered by the Plan. Because Class 13B is not impaired, the Holders of Class 13B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 13B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 13C—Intercompany Claims (Unimpaired)

Class 13C consists of all Intercompany Claims against BPTC. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 13C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 13C is not impaired, and the Holders of Class 13C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 13C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 13D—General Unsecured Claims (Impaired)

Class 13D consists of all General Unsecured Claims against BPTC but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 13D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 13D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 13D is required for the Plan to be confirmed.

62 Class 13E—Equity Interests (Unimpaired)

Class 13E consists of all Claims of Holders of Equity Interests in BPTC. On the Effective Date, each Holder of a Class 13E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 13E is not impaired, and the Holders of Class 13E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 13E Claims are not entitled to vote to accept or reject the Plan.

p. Classification and Treatment of Claims against UFDC

Class 14A—Other Priority Claims (Unimpaired)

Class 14A consists of all Other Priority Claims against UFDC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 14A Claims are unaltered by the Plan. Unless the Holder of such Claim and UFDC agree to a different treatment, each Holder of an Allowed Class 14A Claim shall receive one of the following alternative treatments, at the election of UFDC: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UFDC; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UFDC, or (B) will be paid in full in Cash by Reorganized Debtor UFDC when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 14A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 14A is not impaired, and the Holders of Class 14A Claims are conclusively deemed to have accepted the Plan pursuant to Section 11214(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 14A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 14B—Secured Claims (Unimpaired)

Class 14B consists of all Secured Claims against UFDC. A Secured Claim against UFDC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UFDC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UFDC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 14B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 14B Claim shall receive one of the following alternative treatments, at the election of UFDC: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UFDC shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UFDC or Reorganized UFDC; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 14B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 14B Claims are unaltered by the Plan. Because Class 14B is not impaired, the Holders of Class 14B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of

63 Class 14B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 14C—Intercompany Claims (Unimpaired)

Class 14C consists of all Intercompany Claims against UFDC. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 14C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 14C is not impaired, and the Holders of Class 14C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 14C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 14D—General Unsecured Claims (Impaired)

Class 14D consists of all General Unsecured Claims against UFDC but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 14D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 14D is not impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 14D is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 14E—Equity Interests (Unimpaired)

Class 14E consists of all Claims of Holders of Equity Interests in UFDC. On the Effective Date, each Holder of a Class 14E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 14E is not impaired, and the Holders of Class 14E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 14E Claims are not entitled to vote to accept or reject the Plan.

q. Classification and Treatment of Claims against UAPR

Class 15A—Other Priority Claims (Unimpaired)

Class 15A consists of all Other Priority Claims against UAPR accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 15A Claims are unaltered by the Plan. Unless the Holder of such Claim and UAPR agree to a different treatment, each Holder of an Allowed Class 15A Claim shall receive one of the following alternative treatments, at the election of UAPR: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized UAPR, (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized UAPR, or (B) will be paid in full in Cash by Reorganized Debtor UAPR when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 15A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 15A is not impaired, and the Holders of Class 15A Claims are conclusively deemed to have accepted the Plan pursuant to Section 11215(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 15A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

64 Class 15B—Secured Claims (Unimpaired)

Class 15B consists of all Secured Claims against UAPR. A Secured Claim against UAPR is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which UAPR or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of UAPR or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 15B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 15B Claim shall receive one of the following alternative treatments, at the election of UAPR: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) UAPR shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against UAPR or Reorganized UAPR, or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 15B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 15B Claims are unaltered by the Plan. Because Class 15B is not impaired, the Holders of Class 15B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 15B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 15C—Intercompany Claims (Unimpaired)

Class 15C consists of all Intercompany Claims against UAPR. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 15C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 15C is not impaired, and the Holders of Class 15C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 15C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 15D—General Unsecured Claims (Impaired)

Class 15D consists of all General Unsecured Claims against UAPR but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 15D Claim shall, in full and complete satisfaction of such Claim be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 15D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 15D is required for the Plan to be confirmed. The Debtors are not aware of any Claims in this Class.

Class 15E—Equity Interests (Unimpaired)

Class 15E consists of all Claims of Holders of Equity Interests in UAPR. On the Effective Date, each Holder of a Class 15E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 15E is not impaired, and the Holders of Class 15E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 15E Claims are not entitled to vote to accept or reject the Plan.

65 r. Classification and Treatment of Claims against KRAC

Class 16A—Other Priority Claims (Unimpaired)

Class 16A consists of all Other Priority Claims against KRAC accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 16A Claims are unaltered by the Plan. Unless the Holder of such Claim and KRAC agree to a different treatment, each Holder of an Allowed Class 16A Claim shall receive one of the following alternative treatments, at the election of KRAC: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized KRAC; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized KRAC, or (B) will be paid in full in Cash by Reorganized Debtor KRAC when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 16A Claim that existed immediately prior to the tiling of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 16A is not impaired, and the Holders of Class 16A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 16A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 16B—Secured Claims (Unimpaired)

Class 16B consists of all Secured Claims against KRAC. A Secured Claim against KRAC is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which KRAC or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of KRAC or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 16B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 16B Claim shall receive one of the following alternative treatments, at the election of KRAC: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) KRAC shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against KRAC or Reorganized KRAC; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 16B Claim that existed immediately prior to the filing of the Chapter 11 Cases, shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 16B Claims are unaltered by the Plan Because Class 16B is not impaired, the Holders of Class 16B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 16B Claims are not entitled to vote to accept or reject the Plan.

Class 16C—Intercompany Claims (Unimpaired)

Class 16C consists of all Intercompany Claims against KRAC. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 16C Claim shall

66 retain such Claim and the rights, interests, and obligations related thereto. Class 16C is not impaired, and the Holders of Class 16C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 16C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 16D—General Unsecured Claims (Impaired)

Class 16D consists of all General Unsecured Claims against KRAC but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 16D Claim shall, in full and complete satisfaction of such Claim be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 16D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 16D is required for the Plan to be confirmed.

Class 16E—Equity Interests (Unimpaired)

Class 16E consists of all Claims of Holders of Equity Interests in KRAC. On the Effective Date, each Holder of a Class 16E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 16E is not impaired, and the Holders of Class 16E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 16E Claims are not entitled to vote to accept or reject the Plan.

s. Classification and Treatment of Claims against Mamaroneck

Class 17A—Other Priority Claims (Unimpaired)

Class 17A consists of all Other Priority Claims against Mamaroneck accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 17A Claims are unaltered by the Plan. Unless the Holder of such Claim and Mamaroneck agree to a different treatment, each Holder of an Allowed Class 17A Claim shall receive one of the following alternative treatments, at the election of Mamaroneck: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized Mamaroneck; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized Mamaroneck, or (B) will be paid in full in Cash by Reorganized Mamaroneck when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 17A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 17A is not impaired, and the Holders of Class 17A Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 17A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 17B—Secured Claims (Unimpaired)

Class 17B consists of all Secured Claim against Mamaroneck. A Secured Claim against Mamaroneck is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which Mamaroneck or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of Mamaroneck or its Estate in such property

67 securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 17B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 17B Claim shall receive one of the following alternative treatments, at the election of Mamaroneck: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) Mamaroneck shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against Mamaroneck or Reorganized Mamaroneck, or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 17B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 17B Claims are unaltered by the Plan. Because Class 17B is not impaired, the Holders of Class 17B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 17B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 17C—Intercompany Claims (Unimpaired)

Class 17C consists of all Intercompany Claims against Mamaroneck. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 17C is not impaired, and the Holders of Class 17C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code:. Therefore, the Holders of Claims in Class 17C are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 17D—General Unsecured Claims (Unimpaired)

Class 17D consists of all General Unsecured Claims against Mamaroneck but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 17D Claim shall be paid in full. Class 17D is not impaired, and the Holders of Class 17D Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code, Therefore, fhe Holders of Claims in Class 17D are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 17E—Preferred Stock (Unimpaired)

Class 17E consists of all Claims of Holders of preferred Stock in Mamaroneck. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 17E Preferred Stock Claim shall receive a Mamaroneck Preferred Stock Payment. All Mamaroneck Preferred Stock issued before the Petition Date will be canceled. Class 17E is not impaired, and the Holders of Class 17E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 17E are not entitled to vote to accept or reject the Plan.

Class 17F—Common Stock (Unimpaired)

Class 17F consists of all Claims of Holders of Common Stock in Mamaroneck. On or as soon as reasonably practicable after the Effective Date, Holders of Class 17F Common Stock shall receive a Pro Rata Cash distribution of all liquidated assets of Mamaroneck after Mamaroncck makes all distributions to Holders of Class 17A, 17B, 17C, 17D, and 17E Claims. All Mamaroneck Common

68 Stock issued before the Petition Date will be canceled. Class 17F is not impaired, and the Holders of Class 17F Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(fl of the Bankruptcy Code. Therefore, the Holders of Claims in Class 17F are not entitled to vote to accept or reject the Plan.

t. Classification and Treatment of Claims against R&S

Class 18A—Other Priority Claims (Unimpaired)

Class 18A consists of all Other Priority Claims against R&S accorded the priority and right of payment under Section 507(a) of the Bankruptcy Code (including priority employee salary and wage Claims to the extent not paid prior to Confirmation pursuant to any first−day orders authorizing payment of Prepetition wage, salary, and benefits Claims), other than a Priority Tax Claim or an Administrative Expense Claim. The legal, equitable and contractual rights of the Holders of Class 18A Claims are unaltered by the Plan. Unless the Holder of such Claim and R&S agree to a different treatment, each Holder of an Allowed Class 18A Claim shall receive one of the following alternative treatments, at the election of R&S: (i) to the extent then due and owing on the Effective Date, such Claim will be paid in full in Cash by Reorganized R&S; (ii) to the extent not due and owing on the Effective Date, such Claim (A) will be paid in full in Cash by Reorganized R&S, or (B) will be paid in full in Cash by Reorganized Debtor R&S when and as such Claim becomes due and owing in the ordinary course of business; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 18A Claim that existed immediately prior to the filing of the Chapter 11 Case shall be deemed cured upon the Effective Date. Class 18A is not impaired, and the Holders of Class 18A Claims are conclusively deemed to have accepted the Plan pursuant to Section 11218(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 18A are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

Class 18B—Secured Claims (Unimpaired)

Class 18B consists of all Secured Claims against R&S. A Secured Claim against R&S is: (i) a Claim held by any person or entity, including a judgment creditor, secured by a lien on any property in which R&S or its Estate has an interest, which lien is valid, perfected and enforceable under applicable law or by reason of a Final Order, and is not subject to avoidance under the Bankruptcy Code or applicable non−bankruptcy law, but only to the extent of (A) the value of such Secured Claim Holder's interest in any interest of R&S or its Estate in such property securing such Claim or (B) the amount subject to setoff, as applicable, as determined pursuant to Section 506(a) of the Bankruptcy Code; or (ii) a Claim Allowed under the Plan as a Secured Claim. The Debtors are not aware of any Holders of Class 18B Claims.

Under the Plan, on the Effective Date, each Holder of an Allowed Class 18B Claim shall receive one of fhe following alternative treatments, at the election of R&S: (i) the legal, equitable and contractual rights to which such Claim entitles the Holder thereof shall be unaltered by the Plan; (ii) R&S shall surrender all collateral securing such Claim to the Holder thereof, without representation or warranty by or recourse against R&S or Reorganized R&S; or (iii) such Claim will be otherwise treated in any other manner so that such Claim shall otherwise be rendered unimpaired pursuant to Section 1124 of the Bankruptcy Code. Any default with respect to any Class 18B Claim that existed immediately prior to the filing of the Chapter 11 Cases shall be deemed cured upon the Effective Date.

The legal, equitable and contractual rights of the Holders of Class 18B Claims are unaltered by the Plan. Because Class 18B is not impaired, the Holders of Class 18B Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 18B Claims are not entitled to vote to accept or reject the Plan. The Debtors are not aware of any Claims in this Class.

69 Class 18C—Intercompany Claims (Unimpaired)

Class 18C consists of all Intercompany Claims against R&S. Under the Plan, on or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 18C Claim shall retain such Claim and the rights, interests, and obligations related thereto. Class 18C is not impaired, and the Holders of Class 18C Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Claims in Class 18C are not entitled to vote to accept or reject the Plan,

Class 18D—General Unsecured Claims (Impaired)

Class 18D consists of all General Unsecured Claims against R&S but does not include Intercompany Claims. On or as soon as reasonably practicable after the Effective Date, each Holder of an Allowed Class 18D Claim shall, in full and complete satisfaction of such Claim, be paid in full in the form of a Promissory Note in the amount of such Allowed Claim. Class 18D is impaired, and approval of the Plan by Holders of at least two−thirds in amount and more than one−half in number of Holders in Class 18D is required for the Plan to be confiied.

Class 18E—Equity Interests (Unimpaired)

Class 18E consists of all Claims of Holders of Equity Interests in R&S. On the Effective Date, each Holder of a Class 18E Equity Interest shall retain its Common Stock and all rights, interests, and obligations related thereto. Class 18E is not impaired, and the Holders of Class 18E Claims are conclusively deemed to have accepted the Plan pursuant to Section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 18E Claims are not entitled to vote to accept or reject the Plan.

ARTICLE III FINANCIAL ANALYSIS

A. Liquidation Analysis

Pursuant to Section 1129(a)(7) of the Bankruptcy Code (sometimes called the "best interests" test) the Bankruptcy Code requires that each Holder of an Impaired claim or Equity Interest either (a) accept the Plan or (b) receive or retain under the Plan property of a value, as of the Effective Date, that is not less than the value such Holder would receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code on the Effective Date. The first step in meeting this test is to determine the dollar amount that would be generated from the hypothetical liquidation of the Debtors' assets and properties in the context of a liquidation in a Chapter 7 case. The gross amount of Cash available would be the sum of the proceeds from the disposition of the Debtors' assets and the Cash held by the Debtor at the time of the commencement of the Chapter 7 case. Such amount is reduced by the amount of any Claims secured by such assets, the costs and expenses of the liquidation, and such additional administrative expenses and priority Claims that may result from the termination of the Debtors' business and the use of Chapter 7 for the purposes of a hypothetical liquidation. Any remaining net cash would be allocated to creditors and shareholders in strict priority in accordance with Section 726 of the Bankruptcy Code.

A general summary of the assumptions used by the Debtors' management in preparing the liquidation analysis follows. The more specific assumptions are discussed below.

1. Estimate of Net Proceeds Estimates were made of the Cash proceeds that might be realized from the liquidation of the Debtors' assets. The Chapter 7 liquidation period is assumed to commence on December 28, 2000 and to average six months following the appointment of a Chapter 7 trustee. While some assets may be liquidated in less than six months, other assets may be more difficult to collect or sell, requiring a liquidation period

70 substantially longer than six months; this time would allow for the collection of receivables, sale of assets and wind−down of daily operations. Based on current market conditions and other theatre exhibitors' liquidity situations, it is assumed that the Debtors will be able to dispose of their business and other assets in multiple transactions, rather than dispose of their business operations as an entirety.

Wholly−owned real estate, leased theatre properties, leasehold improvements, and theatre fixtures and furniture account for a substantial portion of the Debtors' assets. The Chapter 7 liquidation value of the Debtors' theatre assets was assessed for each property individually based on an evaluation of historical cash flow performance, remaining lease terms and payment obligations, available real estate appraisals, and the overall marketability of the asset. Theatre assets with declining historical and projected future cash flow performance near a break−even or unprofitable level were assumed to generate no value in a Chapter 7 liquidation, For other non−theatre assets, liquidation values were assessed for general Classes by estimating the percentage recoveries that the Debtors might achieve through their disposition.

The estimation of net proceeds available from the liquidation of the Debtors' theatre assets assumes that (a) there is a ready market for theatre properties located in strategic geographic regions, (b) a willing buyer exists for the Debtors' performing theatres, and (c) the Debtors are successful in completing the sale of targeted Project Clean−Up properties at estimated "pricepoints." It is important to note, however, that the theatre industry as a whole is over−leveraged and over−saturated with movie theatre screens, thus severely limiting potential sale opportunities for the Debtors' theatre properties. With respect to the Debtors' leased properties, the Liquidation Analysis assumes that cash−flow positive theatres with favorable lease terms are either sold or reverted back to landlords. Leased theatre properties with minimal or negative cash flow and/or unfavorable lease terms are assumed to generate no value in a Chapter 7 liquidation while at the same time generating incremental lease rejection Claims. The treatment of leased theatre properties in the liquidation analysis similarly assumes that there is a ready market for theatre properties with favorable lease terms and cash flow prospects.

2. Estimate of Costs The Debtors' costs of liquidation under Chapter 7 would include the fees payable to a Chapter 7 trustee, as well as those that might be payable to attorneys and other professionals that such a trustee may engage. Further, costs of liquidation would include any obligations and unpaid expenses incurred by the Debtors during the Chapter 11 Cases and allowed in the Chapter 7 case, such as trade obligations, compensation for attorneys, financial advisors, appraisers, accountants and other professionals, and costs and expenses of members of any statutory committee of unsecured creditors appointed by the United States Trustee pursuant to Section 1102 of the Bankruptcy Code and any other committee so appointed.

3. Distribution of Net Proceeds Under the Absolute Priority Rule The foregoing postpetition claims, costs, expenses, fees and such other Claims that may arise in a Chapter 7 liquidation case would be paid in full from the liquidation proceeds before the balance of those proceeds would be made available to pay prepetition priority and unsecured Claims. Under the absolute priority rule, no junior creditor may receive any distribution until all senior creditors are paid in full, and no equity holder would receive any distribution until all creditors are paid in full. The Debtors believe that in a Chapter 7 case, Holders of Allowed Unsecured Claims against, and Equity Interests in, UA and UATC would receive no distributions of any liquidation proceeds.

71 After consideration of the effects that a Chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors as compared to a Chapter 11 case, including (a) the increased costs and expenses of a liquidation under Chapter 7 arising from fees payable to a bankruptcy trustee and the trustee's professional advisors, (b) the erosion in value of assets in a Chapter 7 case in the context of the expeditious liquidation required under Chapter 7 and the "forced sale" atmosphere that would prevail, and (c) substantially ,increased Claims which would be satisfied on a priority basis, the Debtors have determined, as summarized on the following chart, that Confirmation of the Plan will provide each creditor and equity holder with a recovery that is equal to or greater than it would receive pursuant to a liquidation of the Debtors under Chapter 7 of the Bankruptcy Code.

SUMMARY OF RECOVERIES

Claims Classes Chapter 7 Under the Plan

Priority and Administrative Claims Unclassified 100% 100%

Other Priority Claims lA, 2A, 3A, 4A, 5A, 6A, 7A, 8A, 9A, 100% 100% lOA, 1 lA, 12A, 13A, 14A, 15A, 16A, 17A, and 18A

SUMMARY OF RECOVERIES

Bank Claims 1B, 2B, 3B, 4B and 5B 47.6% 82.4%*

Other Secured Claims 1C, 2C, 3C, 4C and 5C 100% 100%

Secured Claims 6B, 7B, 8B, 9B, 10B, 11B, 12B, 13B, 14B, 15B, 100% 100% 16B, 17B and 18B

Intercompany Claims 1D, 2E, 3D, 4D, 5D, 6C, 7C, 8C, 9C, 10C, 11C, 100% 100% 12C, 13C, 14C, 15C, 16C, 17C and 18C

UA Note Claim 2D 0% 1.81%

General Unsecured Claims (Against UATC) 2F 0% 5.2%**

General Unsecured Claims (Against UA) 1E 0% 1.22%***

General Unsecured Claims (Against all other 3E, 4E, 5E, 6D, 7D, 8D, 9D, 10D, 11D, 12D, 13D, 100% 100% Debtors) 14D, 15D, 16D, 17D and 18D

Equity Interests (in UA and UATC) 1F and 2G 0% 0%

Equity Interests (in all other Debtors) 3F, 4F, 5F, 6E, 7E, 8E, 9E, 10E, 11E, 12E, 13E, 100% 100% 14E, 15E, 16E, 17E, 17F and 18E

* The estimated recovery assumes par value for the Restructured Bank Credit Facility, however, that assumption should not be considered an indication of the trading value for the Restructured Bank Credit Facility in the secondary market, which would be based upon a number of factors including the level of interest rates, general economic conditions, and actual financial performance of the Debtors compared to projected results.

** Assumes that critical trade creditors and claims relating to film licensing, distribution, and advertising contracts are paid pursuant to first−day orders granted by the Bankruptcy Court. Also

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includes estimated lease rejection claims. Subject to reduction in accordance with Articles III.C.6 and 1.B.26 of the Plan.

*** Although Holders of Class 1E Claims will not receive any distribution directly from the Debtors, Bank of America, on behalf of the Debt Electors, and as described in Article VII.K. of the Plan, shall distribute the New UA Warrants to the Subordinated Note Indenture Trustee or other designated agent of the Holders of Allowed Class 1E Claims, to be distributed by said Trustee or agent on a Pro Rata basis to such Holders of Allowed Class 1E Claims, which would in effect result in the stated 1.22% projected recovery, which is not included in the projected recovery of Class 1B.

Moreover, the Debtors believe that the value of the distributions from the liquidation proceeds to each Class of Allowed Claims in a Chapter 7 case would be the same or less than the value of distributions under the Plan because (1) such distributions in a Chapter 7 case may not occur for a substantial period of time and (2) the amount of landlord lease rejection claims would be significantly higher in a Chapter 7 liquidation. In this regard, it is possible that a distribution of the proceeds of the liquidation could be delayed for a year or more after the completion of such liquidation in order to resolve the Claims and prepare for distributions. In the event litigation were necessary to resolve Claims asserted in the Chapter 7 case, the delay could be further prolonged and administrative expenses further increased. The effects of this delay on the value of distributions under the hypothetical liquidation have not been considered

4. Liquidation Analysis

The Debtors' Liquidation Analysis is an estimate of the proceeds that may be generated as a result of a hypothetical liquidation of the Debtors' assets under Chapter 7 of the Bankruptcy Code. Underlying the Liquidation Analysis are a number of estimates and assumptions that are inherently subject to significant economic, competitive and operational uncertainties and contingencies beyond the control of the Debtors or a Chapter 7 trustee. Additionally, various liquidation decisions upon which certain assumptions are based are subject to change. Therefore, there can be no assurance that the assumptions and estimates employed in determining the liquidation values of the Debtors' assets will result in an accurate estimate of the proceeds that would be realized were United Artists to undergo an actual liquidation. The Liquidation Analysis does not include liabilities that may arise as a result of litigation, certain new tax assessments, landlord lease rejection Claims, employee severance Claims, or other potential Claims. No value was assigned to additional proceeds which might result from the sale of certain items with intangible value. The Liquidation Analysis also does not include potential recoveries from avoidance actions. Therefore, the actual liquidation value of the Debtors could vary materially from the estimates provided herein. The Liquidation Analysis set forth below was based on the estimated values of United Artists' assets as of December 28, 2000. These values have not been subject to any review, compilation or audit by any independent accounting firm.

73 UNITED ARTISTS THEATRE COMPANY LIQUIDATION ANALYSIS ($ in 000's)

12/28/00 Estimated Estimated Balance Estimated Liquidation (before fresh start) Recovery Proceeds

PROCEEDS FROM LIQUIDATION Cash & Investments $ 18,894 100.0% $ 18,894 Accounts and Notes Receivable 9,640 80.0% 7,712 Inventories 5,942 60.0% 3,565 Prepaid Expense 13,864 0.0% — Equity Investment in Affiliates 3,091 20.0% 618 Net PP&E and Lease Acquisition Costs (including capital leases) 391,726 53.7% 210,459 Other Assets 16,978 0.0% —

Total Proceeds from the Liquidation of Assets $ 460,134 52.4% $ 241,248 Plus: Cash Flow Generated During the Liquidation Period — Total Proceeds Available for Distribution $ 241,248

Estimated Estimated Claim % Recovery recovery

ALLOCATION OF PROCEEDS Priority & Administrative Claims: Trustee & Professional Fees $ 10,237 100.0% $ 10,237 Priority Tax Claims 10,668 100.0% 10,668 Wind−Down Costs 7,356 100.0% 7,356

Total Priority & Administrative Claims $ 28,261 $ 28,261 Value Available for Payment of Secured Claims $ 212,986 Secured Claims: DIP Facility $ 0 100.0% $ 0 Revolver 97,000 47.6% 46,141 Letters of Credit 2,738 47.6% 1,303 Term Loan 340,056 47.6% 161,757 Other Secured Debt 7,959 47.6% 3,786

Total Secured Claims $ 447,753 $ 212,986 Proceeds Available for Payment of General Unsecured Claims $ 0 Proceeds Available for Distribution to Equity $ 0

5. Notes to Liquidation Analysis

a. Cash and Cash Equivalents. Cash consists of all cash in banks or operating accounts and liquid investments with maturities of three months or less and is assumed to be fully recoverable.

b. Accounts and Notes Receivable. Accounts and notes receivable consist of receivables from United Artists' Satellite Theatre Network business customers and other miscellaneous receivables related to the sale of the Debtors' interests in the Far East and real estate held by the Staten Theatre Group partnership. The recovery of accounts and notes receivable is based on management's estimate of collection, given such factors as the aging and historical collection patterns of the receivable and the effect of the liquidation on the Debtors' ability to collect outstanding accounts and notes receivable.

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c. Inventories. Inventories are comprised of concessions products, carpeting, SDDS units, and other uninstalled theatre−related equipment. The overall inventory recovery is net of costs incurred to liquidate the inventories.

d. Prepaid Expenses. Prepaid expenses and other current assets consist primarily of miscellaneous prepaid expenses such as rent and other occupancy costs, insurance, taxes and deposits. The liquidation value of these prepaid expenses assumes that trade vendors and landlords offset the prepaid amounts against the amounts payable to the Debtors.

e. Equity Investment in Affiliates. Equity investment in affiliates includes the Debtors' ownership interest in non−Debtor affiliated entities. The recovery of 20% of the Debtors' equity investment in these affiliates is based on management's estimate of realizable value in conjunction with a sale of the Debtors' ownership interests in the context of a liquidation.

f. Net Property, Plant and Equipment and Lease Acquisition Costs. Property Plant and Equipment includes owned land, buildings, machinery and equipment, and leasehold improvements related primarily to existing theatre properties. For all assets, liquidation values were assessed for general classes of assets by estimating the percentage recoveries that the Debtors might achieve through their disposition. There is a recovery on leasehold improvements only to the extent that management estimated that an interested third−party purchaser would be willing to pay some premium in conjunction with the assumption of the underlying lease. There is no recovery of leasehold improvements to other leased properties because such improvements will revert to the lessor upon the discontinuation of the leases, or, in the case of an assignable lease, will inure to the benefit of the assignees of the leases. These estimated liquidation values could vary dramatically from the amounts that might be recovered in an actual Chapter 7 bankruptcy liquidation.

g. Other Assets. Other assets primarily include non−current assets, which are deferred financing costs and other miscellaneous assets. These assets are assumed to have no value in a liquidation. Although the liquidation of United Artists' tradename and other intangible assets may have value in a liquidation, no liquidation proceeds were assumed from the sale of goodwill or other intangible assets due to the uncertainty of realizable value.

h. Trustee and Professional Fees. Trustee fees are estimated at 3% of gross liquidation proceeds. Professional fees represent the costs of a Chapter 7 case related to attorneys, accountants, appraisers and other professionals retained by the trustee. Based on management review of the nature of these costs and the outcomes of similar liquidations, fees were estimated to average approximately $1 million per month for six months during the liquidation period. No Priority Claims other than trustee and Professional fees are assumed.

i. Wind−Down Costs. Wind−down costs consist of corporate overhead, severance, stay bonuses, and other related costs to be incurred during the Chapter 7 liquidation period. Management assumes that the liquidation would occur over a nine−month period and that such expenses, costs and overhead would decrease over time.

j. Revolver, Term Loan, and Letters of Credit. The Revolver, Term Loan, and Letters of Credit, which are part of the Prepetition Bank Credit Facility, are secured by, among other things, a pledge of 100% of the capital stock of the following direct or indirect subsidiaries of United Artists; UAR; UAP I; UAP II; UAR; UATC; UAB; UAB II; Tallthe; UAIPH; UAPH II; UAIMC; BPTC; UPDC; UATA; and UAPR. The Revolver, Term Loan, and Letters of Credit are also secured by mortgages on approximately thirty−one theatres owned by UATC, UAR, and UAP I, and by substantially all of the personal property of UA, UATC, UAR, UAP I, and UAP II. The obligations under the Revolver, Term Loan, and Letters of Credit are guaranteed

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by the following direct or indirect subsidiaries of United Artists: UATC; UAR, UAP I; and UAP II. The claims securing the Revolver and Term Loan include prepetition interest.

k. Other Secured Debt. Other secured debt consists of various term loans, mortgage notes, capital leases, seller notes and other borrowings secured by specific assets, equipment and properties.

l. Consolidated Liquidation Analysis. The Debtors have prepared a liquidation analysis of the Debtors on a consolidated basis. The Debtors do not believe or imply that their bankruptcy estates would be substantively consolidated in a liquidation under Chapter 7 of the Bankruptcy Code and expressly reserve all rights with respect thereto. In any event, the Debtors also do not believe that substantive consolidation of the Debtors' estates would significantly affect the distribution to Holders of Allowed Claims. Other than Intercompany Claims and Bank Claims, virtually all of the Claims against any of the Debtors are Claims against UA or UATC, UA's wholly−owned subsidiary.

6. Valuation Methodology

In order to comply with the "best interests" test as well as to determine the relative distributions to parties in interest under the Plan, an estimated reorganization value (the "Reorganization Value") has been prepared by Houlihan Lokey Howard & Zukin Capital ("Houlihan Lokey"), financial advisors to the Debtors. Houlihan Lokey has determined the Reorganization Value based on an assumed Effective Date of December 28, 2000 giving effect to the implementation of the Plan.

In reaching its conclusions on Reorganization Value, Houlihan Lokey analyzed the Debtors' current operations and projections, as well as the industry in which the Debtors compete. Among other analyses, Houlihan Lokey (a) reviewed certain historical financial information of the Debtors, (b) reviewed certain internal operating reports, including management−prepared financial projections and analyses, (c) assisted in the creation of updated financial projections, (d) discussed historical and projected financial performance with senior management, (e) reviewed industry trends and operating statistics, (f) analyzed the capital structures, financial performance, and market valuations of other competitors in the theatre industry, (g) analyzed the capital structures and betas of companies in industries with operational dynamics similar to those of the Debtors, and (h) prepared such other analyses as Houlihan Lokey deemed necessary and appropriate.

Houlihan Lokey relied on the accuracy and reasonableness of the historical financial information and projection assumptions provided by the Debtors' management. Houlihan Lokey's valuation is based on the assumption that the operating results anticipated by management can be achieved in all material respects, including attendance levels, revenue growth, and improvements in operating margins, earnings, and cash flow. To the extent that the valuation is dependent upon the Debtors' achievement of the projections contained in the Disclosure Statement, the valuation should be considered speculative.

In addition to relying on management's projection assumptions, Houlihan Lokey's valuation analysis is based on a number of assumptions including, but not limited to: (a) a successful and timely reorganization of the Debtors' capital structure; (b) an improvement in current market conditions through the Effective Date as well as the forecast period for the operating projections; (c) the Plan becoming effective in accordance with its proposed terms; and (d) the continuity of present operating management of the Debtors following consummation of the Plan. Houlihan Lokey's valuation analysis further assumes that the Debtors (i) are successful in disposing of its Project Clean−Up theatres in accordance with the time line reflected in the operating projections and (ii) have the financial flexibility to invest capital in upgrading its existing theatre base to remain competitive.

Two methodologies were used to derive the value of Reorganized Debtors based on the projections: (a) a comparison of the company and its current and historical operating performance to 76 the public market values of companies deemed comparable to the Debtors; and (b) a calculation of the present value of free cash flows (including a terminal value, defined herein) based on a set of projections (the "Projections") created by the Debtors' senior management and Houlihan Lokey.

The market−based approach involves: (a) identifying a group of publicly traded companies whose businesses are comparable to those of the Debtors (the "Comparable Companies"); (b) calculating capitalization multiples, which are ratios based on (i) the enterprise value (calculated as Total Market Value of Equity plus Total Debt less Cash) of the Comparable Companies and (ii) the financial results of these companies; and (c) applying a range of capitalization multiples to the Debtors' recent financial results to arrive at an implied value range for the Debtors.

The discounted cash flow approach involves the analysis of the unleveraged free cash flows that the Debtors are expected to generate based on the Projections. These cash flows, in conjunction with an estimated value of the Company at the end of the projected period (the "Terminal Value"), are discounted to the Effective Date at the Debtors' post−restructuring weighted average cost of capital in order to determine the Debtors' enterprise value.

In calculating the Debtors' weighted average cost of capital, Houlihan Lokey applied a beta that it believed was appropriate given the Debtors' risk profile. The betas of other theatre exhibitors were deemed meaningless as a result of the over leveraged nature of the exhibitor industry; thus, the betas of Comparable Companies were not considered when Houlihan Lokey determined an appropriate beta for the Debtors. Consequently, Houlihan Lokey utilized betas from companies that, although not in the exhibitor industry, shared key operating characteristics with the Debtors. These characteristics include: (a) the generation of most revenues on a cash−basis rather than a receivables−basis; (b) peak sales occurring during a particular season, holidays, and/or weekends; (c) the service−oriented rather than manufacturing−oriented business; (d) much of the fixed assets are not owned; and (e) an entertainment sector business.

Based on the analysis performed, Houlihan Lokey estimates the Reorganization Value as of December 28, 2000 to be from $360 million to $400 million, with a mid−point of $380 million. Based on this range and the total level of indebtedness outlined in the Plan ($260 million), Houlihan Lokey estimates an equity value range (including convertible preferred stock) of approximately $100 million to $140 million with a mid−point value of $120 million.

The Reorganization Value represents the going concern value of the Debtors on a deleveraged basis, giving effect to the implementation of the Plan. As such, the Reorganization Value is not a prediction of the future trading prices of securities of the Reorganized Debtors. The Reorganization Value does not represent a liquidation value of the Debtors or their assets; a Liquidation Analysis has been prepared and provided separately in Article III.A.4 of the Disclosure Statement. This valuation also does not represent an appraisal of the Debtors' assets.

B. Projections

1. Responsibility for and Purpose of the Projections

As a condition to confirmation of a plan, the Bankruptcy Code requires, among other things, that the bankruptcy court determine that the plan is "feasible," i.e., that Confirmation is not likely to be followed by a liquidation or the need for further financial reorganization of the debtor. In connection with the development of the Plan, and for purposes of determining whether the Plan satisfies feasibility standards, the Debtors' management has, through the development of financial projections (the "Projections"), analyzed the ability of the Debtors to meet their obligations under the Plan to maintain sufficient liquidity and capital resources to conduct its business. The Projections were also prepared to assist each Holder of a Claim entitled to vote under the Plan (see Article III of the Disclosure Statement) in determining whether to accept or reject the Plan.

77 The Projections should be read in conjunction with the assumptions, qualifications and footnotes to tables containing the Projections set forth herein, the historical consolidated financial information (including the notes and schedules thereto) and the other information set forth in UA's and UATC's Annual Reports on Form 10−K for the fiscal year ended 1999, and UA's and UATC's Quarterly Reports on Form 10−Q for the periods ended March 30, 2000 and June 29, 2000 respectively. The Projections were prepared in good faith based upon assumptions believed to be reasonable and applied in a manner consistent with past practice. Most of the assumptions about the operations of the business after the assumed Effective Date which are utilized in the Projections were prepared in August, 2000 and were based, in part, on economic, competitive, and general business conditions prevailing at the time. While as of the date of this Disclosure Statement such conditions have not materially changed, any future changes in these conditions may materially impact the ability of the Debtors to achieve the Projections.

THE PROJECTIONS WERE NOT PREPARED WITH A VIEW TOWARDS COMPLYING WITH THE GUIDELINES FOR PROSPECTIVE FINANCIAL STATEMENTS PUBLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS. THE DEBTORS' INDEPENDENT ACCOUNTANT HAS NEITHER COMPILED NOR EXAMINED THE ACCOMPANYING PROSPECTIVE FINANCIAL INFORMATION TO DETERMINE THE REASONABLENESS THEREOF AND, ACCORDINGLY, HAS NOT EXPRESSED AN OPINION OR ANY OTHER FORM OF ASSURANCE WITH RESPECT THERETO.

THE DEBTORS DO NOT, AS A MATTER OF COURSE, PUBLISH PROJECTIONS OF THEIR ANTICIPATED FINANCIAL POSITION, RESULTS OF OPERATIONS OR CASH FLOWS. ACCORDINGLY, THE DEBTORS DO NOT INTEND, AND DISCLAIM ANY OBLIGATION, TO (A) FURNISH UPDATED PROJECTIONS TO HOLDERS OF CLAIMS OR EQUITY INTERESTS PRIOR TO THE EFFECTIVE DATE OR TO HOLDERS OF NEW COMMON STOCK OR ANY OTHER PARTY AFTER THE EFFECTIVE DATE, (B) INCLUDE SUCH UPDATED INFORMATION IN ANY DOCUMENTS THAT MAY BE REQUIRED TO BE FILED WITH THE SEC, OR (C) OTHERWISE MAKE SUCH UPDATED INFORMATION PUBLICLY AVAILABLE.

THE PROJECTIONS PROVIDED IN THE DISCLOSURE STATEMENT HAVE BEEN PREPARED EXCLUSIVELY BY THE DEBTORS' MANAGEMENT. THESE PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY MANAGEMENT, MAY NOT BE REALIZED, AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE DEBTORS' CONTROL. THE DEBTORS CAUTION THAT NO REPRESENTATIONS CAN BE MADE AS TO THE ACCURACY OF THESE FINANCIAL PROJECTIONS OR TO THE REORGANIZED DEBTORS' ABILITY TO ACHIEVE THE PROJECTED RESULTS. SOME ASSUMPTIONS INEVITABLY WILL NOT MATERIALIZE. FURTHER, EVENTS AND CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THESE PROJECTIONS WERE PREPARED MAY BE DIFFERENT FROM THOSE ASSUMED OR, ALTERNATIVELY, MAY HAVE BEEN UNANTICIPATED, AND THUS THE OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A MATERIAL AND POSSIBLY ADVERSE MANNER. THE PROJECTIONS, THEREFORE, MAY NOT BE RELIED UPON AS A GUARANTY OR OTHER ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR.

FINALLY, THE FOLLOWING PROJECTIONS INCLUDE ASSUMPTIONS AS TO THE ENTERPRISE VALUE OF THE REORGANIZED DEBTORS, THE FAIR VALUE OF ITS ASSETS AND ITS ACTUAL LIABILITIES AS OF THE EFFECTIVE DATE. THE REORGANIZED DEBTORS WILL BE REQUIRED TO MAKE SUCH ESTIMATIONS AS OF THE EFFECTIVE DATE. SUCH DETERMINATION WILL BE BASED UPON THE FAIR VALUES AS OF THAT DATE, WHICH

78 COULD BE MATERIALLY GREATER OR LOWER THAN THE VALUES ASSUMED IN THE FOREGOING ESTIMATES.

2. Summary of Significant Assumptions

The Debtors have developed the Projections (summarized below) to assist both creditors and equity holders in their evaluation of the Plan and to analyze its feasibility. The Projections are based upon a number of significant assumptions described below. Actual operating results and values may and will vary from those projected.

a. Fiscal Years. The Debtors' fiscal year ends on the Thursday closest to December 31 of each year. Any reference to "Fiscal" immediately followed by a specific year means the 52 or 53 week period ending on the Thursday closest to December 31 of such year.

b. Plan Terms and Consummation. The Projections assume an Effective Date of December 28, 2000 with Allowed Claims and Equity Interests treated in accordance with the treatment provided in the Plan with respect to such Allowed Claims and Equity Interests. If consummation of the Plan does not occur prior to December 31, 2000, there is no guarantee that, among other things, trade creditors (e.g., the film studios) will support the Debtors as projected. A material reduction in the Debtors' access to film or trade credit, or a complete cessation of film shipment to the Debtors, would materially impact the Debtors' ability to achieve the projected results. Further, if the Effective Date does not occur prior to December 31, 2000, additional bankruptcy−related expenses will be incurred until such time as a new plan of reorganization is confirmed. These expenses could significantly impact the Debtors' results of operations and cash flows.

c. Assumptions Preceding the Effective Date. As a basis for the Projections, management has estimated the operating results for the period of time leading up to the Effective Date. Specifically, it has been assumed that during the Chapter 11 Cases, film studios and distributors will continue to provide the Debtors with films and trade creditors will continue to provide the Debtors with goods on customary terms and credit.

d. Theatre Divestiture Program. The Debtors have been implementing Project Clean−Up, a theatre divestiture program, whereby the Debtors have sold or closed, or intend to sell or close, 199 theatres containing 960 screens (of which 181 theatres and 855 screens have been closed or sold as of the Petition Date). Sales and closures are expected to improve EBITDA going forward. In addition, during the course of the Chapter 11 Cases, the Debtors plan to evaluate the closure, sale, and/or lease renegotiation of additional underperforming theatres and properties not currently encompassed by first−day motions to reject certain leases.

e. Screens per Theatre. The Debtors intend to improve both their profitability and the value of their asset base by increasing the average number of movie screens per theatre. The Debtors expect to achieve this goal by divesting smaller theatres and investing capital, in the form of screen expansions and upgrades, into several of its profitable theatres. The Debtors predict that they will have an average of 8.0 screens per theatre by 2004 (1,583 screens across 197 theatres) relative to 6.9 screens per theatre at the end of fiscal 1999 (2,108 screens across 304 theatres).

f. General Economic Conditions. The Projections were prepared assuming that economic conditions in the markets served by the Debtors do not differ significantly over the next four years from current economic conditions. Inflation in revenues and costs are assumed to remain relatively low.

g. Revenues. Total net revenues can be broken down into (i) net box office receipts (admissions less film expenses), (ii) net concession proceeds (concession sales less cost of goods sold), and

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(iii) other net revenues (net slide advertising proceeds, net satellite theatre proceeds, and miscellaneous revenues). The Debtors' ability to achieve its projected revenue levels assumes that (a) the Debtors complete the targeted disposal/sale of Project Clean−Up theatres prior to the Effective Date, (b) the Debtors have the financial flexibility to make strategic capital investments in upgrading its existing theatre base, and (c) there will be no significant after−effect on the Debtors from the Chapter 11 reorganization process with respect to film studios and trade creditors.

(i) Net Box Office Receipts. Admissions are expected to decrease by 9.5% and 8.2% in fiscal years ("FY") 2000 and 2001, respectively, and are expected to grow at an annual rate of 3.5% from FY 2001 to FY 2004. Although projected increases in average ticket prices during FY 2000 and FY 2001 should serve to increase admissions, a meaningful decline in attendance (12.6% in FY 2000 and 10.0% in FY 2001) associated with the Debtors' declining theatre base (primarily resulting from Project Clean−Up and other scheduled divestitures) is driving the overall decline in admissions. Annual ticket price increases of 2.0% and annual attendance growth of 1.5% from FY 2002 to FY 2004 provide for admissions growth during those periods. Film licensing and advertising expenses are assumed to remain constant at 55.4% of admissions. Given the overall increase in admissions from FY 2001 to FY 2004 and the constancy of film expenses, net box office receipts are projected to grow at a compound annual growth rate ("CAGR") of approximately 3.5%.

(ii) Net Concession Proceeds. Concession sales are expected to decrease by 7.2% and 6.4% in FY 2000 and FY 2001, respectively, but are expected to grow by 4.5% annually from FY 2002 to FY 2004. Although average concessions per capita is expected to increase during FY 2000 and FY 2001, the aforementioned decline in attendance levels is expected to result in an overall decline in concession sales. Concession per capita growth of 3.0% annually and an annual increase in attendance levels of 1.5% from FY2002 to FY2004 provide for concession sales growth during those periods. Cost of goods sold ("COGS"), stated as a percentage of concession sales, are projected to increase 0.4% annually (as a percentage of revenues) from FY 2001 to FY 2004. (iii) Other Net Revenues. Net slide advertising revenues and net satellite theatre revenues are expected to grow 5.0% per year through FY 2004. Miscellaneous revenues are assumed to grow at a 1.0% annual rate through FY 2004. h. Operating Expenses. Operating expenses are comprised of the following key categories: (i) salaries and personnel expenses; (ii) advertising expenses; (iii) repairs, supplies and utilities; (iv) other operating expenses (travel & entertainment, pre−opening costs, insurance, and miscellaneous operating expenses); and (v) rent (rent, escalating rent, percentage rent and common area maintenance charges). Operating expenses in categories (i) through (iv) are expected to increase at an annual rate of 2.0% (as a percentage of admissions) rate through FY 2004. Total rent expenses are expected to decline in FY 2000 and 2001 as the Debtors dispose of underperforming properties as part of Project Clean−Up, thus decreasing the Debtors' overall rent/lease obligations. Rent is assumed to remain constant after the Effective Date.

i. General and Administrative Expenses. General and administrative expenses are projected to decline in FY 2000 and FY 2001 as a percentage of total revenue due primarily to the impact of (i) the closure of unprofitable theatres and (ii) reductions in corporate overhead. General and administrative expenses are assumed to remain constant at 3.8% of total revenue from FY2002 to FY2004.

j. Income Taxes. The Projections assume that, upon consummation, the Reorganized Debtors will not have the benefit of any net operating loss carry−forwards. The Projections also assume

80

a reduction in much of the tax basis of the Debtors' long−term assets as a result of debt forgiveness. The combined federal, state and local income tax rate is estimated at 40%.

k. Capital Expenditures. Capital expenditures consist of investments in (i) the renovation/upgrade of targeted existing theatres (e.g., screen expansion and installation of stadium theatre seating), (ii) the replacement of old theatres with new stadium seating theatres, and (iii) standard maintenance. The Projections assume a level of capital expenditures which, consistent with management's business plan, can be supported by the capital structure and forecasted operating results of the Reorganized Debtors.

l. EBITDA. EBITDA is defined, for purposes of the Projections, as earnings before interest expense, income tax provision, depreciation and amortization, non−cash escalating rent, non−cash pre−opening expenses, unusual items, reorganization items, and extraordinary items.

m. Interest Expense. Interest expense reflects interest on the Restructured Bank Credit Facility, and interest on obligations under capital leases and real estate mortgages. The Restructured Bank Credit Facility is assumed to require monthly Cash interest payments commencing in January, 2001.

n. Fresh Start Accounting. The Projections have been prepared using the basic principles of "fresh start" accounting for periods after December 31, 2000. These principles are contained in the American Institute of Certified Public Accountants Statement of Position 90−7 "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code." Under "fresh start" accounting principles, the Debtors will determine the reorganization value of the reorganized company at the Effective Date. This value will be allocated, based on estimated fair market values, to specific tangible or identifiable intangible assets, and the Debtors will record an intangible asset equal to the reorganization value in excess of amounts allocable to identifiable assets. The Projections assume that the reorganization value in excess of amounts allocable to identifiable assets will be amortized over the four years ($6.8 million per year) following the Effective Date. The Debtors are in the process of evaluating further how the reorganization value will be allocated to their various assets. It is likely that the final allocation, and therefore the amount of reorganization value in excess of book, the amortization of reorganization value in excess of book as well as depreciation and amortization expense, will differ from the amounts presented herein.

o. Reorganization Value. For purposes of this Disclosure Statement and in order to prepare the Projections, management has utilized a reorganization value of the Reorganized Debtors of $380 million as of December 28, 2000, which represents the mid−point of the valuation range, as referenced in Article III.A.6 of the Disclosure Statement.

p. Working Capital. Components of working capital are projected primarily on the basis of historic patterns applied to projected levels of operation. It has been assumed that vendor trade terms return to normal levels in the post−Effective Date period.

q. Restructured Bank Credit Facility. The Reorganized Debtors are assumed to enter into the four−year term Restructured Bank Credit Facility. The Projections make certain assumptions regarding the terms of the Restructured Bank Credit Facility including, among other things, the amortization requirements thereunder. While the assumptions regarding the minimum amortization requirements may be different from the actual amortization included in the final agreement, any differences will not have a material impact on the overall liquidity of the Reorganized Debtors.

81

3. Special Note Regarding Forward−Looking Statements

Except for the historical information, statements contained in this Disclosure Statement and incorporated herein by reference, including the projections in this section, may be considered "forward−looking statements" within the meaning of federal securities law. Such forward−looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by such forward−looking statements. Potential risks and uncertainties include, but are not limited to, general economic and business conditions, the competitive environment in which the Debtors operate and will operate, the success or failure of the Debtors in implementing their current business and operational strategies, the level of trade creditor support, the availability, location and terms of sites for theatre development, the ability of the Debtors to dispose of their unprofitable theatres, the ability of the Debtors to maintain and improve their attendance levels and operating margins, and the liquidity of the Debtors on a cash flow basis (including the ability to comply with the financial covenants of its credit arrangements and to fund the Debtors' capital expenditure program). For additional information about the Debtors and relevant risk factors, see Article XII of the Disclosure Statement.

4. Financial Projections

The financial projections prepared by management are summarized in the following tables. Specifically, the attached tables include:

a. Reorganized United Artists Unaudited Pro−Forma Balance Sheets Reflecting Reorganization Adjustments;

b. Reorganized United Artists Unaudited Balance Sheets for Fiscal Years Ending in 2000 Through 2004;

c. Reorganized United Artists Unaudited Income Statements for Fiscal Years 2000 Through 2004; and

d. Reorganized United Artists Unaudited Statement of Cash Flows For Fiscal Years 2000 Through 2004.

All captions in the attached projections do not correspond exactly to the Debtors' historical external reporting; some captions have been combined for presentation purposes.

82 REORGANIZED UNITED ARTISTS UNAUDITED PRO−FORMA BALANCE SHEETS REFLECTING REORGANIZATION ADJUSTMENTS ($ in 000s)

Estimated Fresh Start Restated 12/28/00 Adjustments 12/28/00

ASSETS Current Assets: Cash (a),(b) $ 18,894 $ (7,000) $ 11,894 Net Receivables 9,640 — 9,640 Merchandise Inventory &Prepaid Expenses 19,805 — 19.805

Total Current Assets $ 48,339 $ (7,000) s 41,339 Investments 3,091 — 3,091 Total Property, Plant & Equipment 636,313 — 636,313 Less: Accumulated Depreciation (286,137) — (286,137)

Net PP&E 350,176 — 350,176 Net Intangible Assets 41,550 — 41,550 Other Assets (Net)(c) 16,978 (14,831) 2,147 Reorganization Value in Excess of Book (d) — 27,170 27,170

TOTAL ASSETS $ 460,134 $ 5,340 $ 465,473 LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable (b) $ 72,929 $ (10,000) $ 62,929 Accounts & Other Liabilities (b) 55,564 (33,020) 22,545

Total Current Liabilities $ 128,493 $ (43,020) $ 85,473 New Secured Credit Facility (a) $ 0 $ 0 $ 0 Senior Secured Debt (b) 437,055 (187,001) 250,054 Senior Subordinated Notes (c) 275,000 (275,000) — Other Debt 6,976 — 6,976 Other Liabilities (b) 94.196 42,260 51,936

TOTAL LIABILITIES $ 941,720 $ (547,281) $ 394,440 Minority Interest $ 5,884 — $ 5,884 Convertible Preferred Stock(c) — 57,000 57,000 Common Stock &Additional Paid−in Capital (d) 49,286 (41,137) 8,149 Dividends — — — Foreign Currency Translation (d) 13 (13) — Retained Earnings (d) {536,770) 536,770 —

TOTAL LIABILITIES & STOCKHOLDER'S EQUITY $ 460,134 $ 5,340 $ 465,473

5. Notes to Pro−Forma Reorganized Balance Sheet

a. Adjustments result from the refinancing of obligations under the DIP Facility with the Post−Confirmation Restructured Bank Credit Facility. While as of the date of the Disclosure Statement the Debtors estimate that there will be no outstanding indebtedness under the DIP Facility as of December 28, 2000, the amount of actual indebtedness under the DIP Facility as of the Effective Date could differ materially as a result of, among other things, changes in business and general economic conditions, the competitive environment in which the Debtors operate, and the terms of the Debtors' film licensing arrangement with film studios. The Debtors estimate a $2 million cash charge associated with the refinancing of the DIP Facility upon the Effective Date.

83 b. The Plan provides for, among other things, the payment of $2.5 million to Holders of General Unsecured Claims.

c. The Plan provides for, among other things, a deleveraging of the Debtors through the "exchange" of all Bank Claims for approximately $252.2 million of Restructured Bank Credit Note Interests, $57,000,000 in New UA Convertible Preferred Stock, 10,000,000 shares of New UA Common Stock, 3,750,000 Equity Elector Warrants, and the New UA Warrants (to be distributed as described in the Plan). The Adjustments reflect the cancellation of the Bank Claims and the Subordinated Notes and the issuance of new securities in accordance with the Plan. "Other Assets" has been adjusted to "write−off' all remaining deferred financing fees related to the issuance of the Prepetition Bank Credit Facility and the Subordinated Notes.

d. The Debtors propose to account for the reorganization and the related transactions using the principles of "fresh start" accounting as required by Statement of Position 90−7 ("SOP 90−7") issued by the American Institute of Certified Public Accountants (the "AICPA"). The Debtors have estimated a range of reorganization value, between $360 million and $400 million. For purposes of determining reorganization value, the Debtors have used the midpoint of that range ($380 million), $65 million of which value is attributable to shareholder's equity (including but not limited to the New UA Common Stock). In accordance with SOP 90−7, the reorganization value has been allocated to specific tangible and identifiable intangible assets and liabilities. The unallocated portion of the reorganization value is classified as Reorganization Value in Excess of Book and is amortized over four years. For the purposes of the Balance Sheet, book values have been assumed to equal fair values except for specific items for which quantifiable data is currently available. The Debtors are currently evaluating the value of various assets, including certain of their fixed assets and leased theatre properties, which may lead to additional pro forma adjustments to book values and result in a different Reorganization Value in Excess of Book as of the Effective Date. The value of shareholders' equity in the fresh start balance sheet is not an estimate of and does not necessary reflect the public market trading value after Confirmation of the New UA Common Stock, Equity Elector Warrants, the New UA Convertible Preferred Warrants, or the New UA Warrants, which value is subject to many uncertainties and cannot be reasonably estimated at this time. The Debtors do not make any representation as to the public market trading value of any securities to be issued pursuant to the Plan.

84 REORGANIZED UNITED ARTISTS UNAUDITED BALANCE SHEETS FOR FISCAL YEARS ENDING IN 2000 THROUGH 2004 ($ in 000s)

As of Fiscal Year Ending

ASSETS 12/28/00 1/3/02 1/2/03 1/1104 12/30/04

Current Assets: Cash $ 11,894 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Net Receivables 9,640 10,365 10,819 11,294 11,790 Merchandise Inventory & Prepaid Expenses 19,805 18,235 19.318 20,054 20.819

Total Current Assets $ 41,339 $ 38,599 $ 40,137 $ 41,348 $ 42,609 Investments 3,091 3,091 3,091 3,091 3,091 Total Property, Plant & Equipment 636,313 674,563 716,563 761,313 789,813 Less: Accumulated Depreciation (286,137) (318,280) (350.724) (382,687) (413.980:

Net PP&E 350,176 356,282 365,839 378,626 375,832 Net Intangible Assets 41,550 37,693 33,837 29,980 26,123 Deferred Tax Asset — 1,629 3,297 4,966 6,635 Other Assets (net) 2,147 1,647 1,147 647 147 Reorganization Value in Excess of Book 27,170 20,378 13,585 6,793 —

TOTAL ASSETS $ 465,473 $ 459,320 $ 460,934 $ 465,541 $ 454,438 LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 62,929 $ 62,804 $ 64,787 $ 66,854 $ 68,887 Accrued & Other Liabilities 22,545 21,268 22,078 22,919 23,793

Total Current Liabilities $ 85,473 $ 84,072 $ 86,865 $ 89,773 $ 92,679 New Secured Credit Facility $ 0 $ 7,163 $ 9,184 $ 10,519 $ 14,094 Senior Secured Debt 250,054 242,464 239,936 237,408 212,129 Senior Subordinated Notes — — — — — Other Debt 6,976 6,226 5,476 4,726 3,976 Other Liabilities 51,936 56.108 60.280 64.451 68,623

TOTAL LIABILITIES $ 394,440 $ 396,033 $ 401,740 $ 406,877 $ 391,501 Minority Interest 5,884 5,884 5,884 5,884 5,884 Convertible Preferred Stock 57,000 57,000 57,000 57,000 57,000 Common Stock & Additional Paid−in Capital 8,149 8,149 8,149 8,149 8,149 Dividends — — — — — Foreign Currency Translation — — — — — Retained Earnings — (7,747) (11,840) (12,460) (8,097)

Total Liabilities and Shareholders' equity $ 465,473 $ 459,320 $ 460,934 $ 465,451 $ 454,438

85 REORGANIZED UNITED ARTISTS UNAUDITED INCOME STATEMENTS FOR FISCAL YEARS 2000 THROUGH 2004 ($ in 000s)

Fiscal Year Ending

12/28/00 1/3/02 1/2/03 1/1/04 12/30/04

Revenues: Admissions $ 391,883 $ 359,748 $ 372,447 $ 385,595 $ 399,206 Concession Sales 161,871 151,511 158,397 165,596 173,123 Net Other Revenues 19,822 20,446 21,098 21,778 22,488

Total Revenues $ 573,576 $ 531,706 $ 551,942 $ 572,969 $ 594,817 Costs & Expenses: Film Rental & Advertising Expenses $ 216,363 $ 198,938 $ 206,263 $ 213,862 $ 221,748 Direct Concession Costs 19,564 19,646 21,172 22,791 24,525 Occupancy Expense 119,320 106,967 107,741 108,535 109,350 Other Operating Expenses 133,703 120,368 124,968 130,160 134,683 General & Administrative 21,781 20,146 20,485 21,208 21,956 Depreciation & Amortization 45,774 43,293 43,593 43,113 42,443 No−Recurring Restructuring Charges 13,528 — — — —

Operation Expenses $ 570,033 $ 509,357 $ 524,221 $ 539,674 $ 554,705 Operating Income $ 3,543 $ 22,349 $ 27,722 $ 33,295 $ 40,112 Interest Expense (Net) 78,354 29,069 28,669 28,453 26,966 Other Expenses/(Income) (2,274) — — — — Gains/Loss on Sale of Assets 18,288 — — — — Equity Loss/(Income) (1) — — — — Minority Interest 1,013 1.013 1,013 1,013 1,013

Earnings Before Taxes (91,836) (7,733) (1,960) 3,828 12,133 Income Tax Expense — 14 2,133 4,448 7.770

NET INCOME $ (91,836) $ (7,747) $ (4,093) $ (620) $ 4,363 Adjusted EBITDA. $ 68,111 $ 70,188 $ 75,486 $ 80,579 $ 86,727 % EBITDA Margin 11.9% 13.2% 13.7% 14.1% 14.6% Net Income Before Amortization of Reorganization Value in Excess of Book Value (591.836) $ (954) $ 2,700 $ 6,713 $ 11,156

86 REORGANIZED UNITED ARTISTS UNAUDITED STATEMENT OF CASH FLOWS FOR FISCAL YEARS 2000 THROUGH 2004 ($ in 000s)

Fiscal Year Ending

OPERATING ACTIVITIES 12/28/00 1/3/02 1/2/03 1/1/04 12/30/04

Net income (Loss) $ (91,836) $ (7,747) $ (4,093) $ (620) $ 4,363 Adjustments to Reconcile net (loss) income to net cash provided by (used for) operating activities: Non−Cash Escalating Rent 4,628 4,172 4,172 4,172 4,172 Depreciation & Amortization 45,774 43,293 43,593 43,113 42,443 Provisions for Impairments and Lease Exit Costs 28,585 — — — — Gain on Disposition of Assets (10,297) — — — — Deferred Tax Asset — (1,629) (1,669) (1,669) (1,669) Minority Interest in Earnings 2,105 1,013 1,013 1,013 1,013 Change in Assets & Liabilities: Receivables (318) (725) (454) (475) (496) Inventory & Prepaids 688 1,571 (1,083) (736) (765) Other Assets 172 — — — — Accounts Payable 5,947 (125) 1,983 2,067 2,032 Accrued & Other Current Liabilities 22,337 (1,276) 809 841 874

NET CASH PROVIDED BY OPERATING ACTIVITIES $ 7,785 $ 38,547 $ 44,271 $ 47,706 $ 51,967 INVESTING ACTIVITIES Capital Expenditures $ (18,801) $ (48,000) $ (42,000) $ (44,750) $ (28,500) Early Lease Termination Payments (575) — — — — Other (1,077) (1,013) (1,013) (1,013) (1,013) Proceeds from Asset Sales 21,601 9,750 — — —

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 51,148 $ (39,263) $ (43,013) $ (45,763) $ (29,513) FINANCING ACTIVITIES Debt Borrowings/(Repayments) $ (1,855) $ (1,177) $ (1,258) $ (1,943) $ (22,454) Increase/(Decrease) in Cash Overdraft (11,153) — — — —

NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES $ (13,009) $ (1,177) $ (1,258) $ (1,943) $ (22,454) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS $ (4,076) $ (1,894) $ 0 $ 0 $ 0 CASH AND EQUIVALENTS AT BEGINNING OF YEAR $ 15,970 $ 11,894 $ 10,000 $ 10,000 $ 10,000 CASH AND EQUIVALENTS AT END OF YEAR $ 11,894 $ 10,000 $ 10,000 $ 10,000 $ 10,000

87 ARTICLE IV PROCEDURES FOR TREATMENT OF DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS

A. Prosecution of Objections to Claims

After the ConfirmationDate, the Debtors andthe ReorganizedDebtors shall have the exclusive authority to File, settle, compromise, withdraw or litigate to judgment, any objections to Claims. From and after the Confirmation Date, the Debtors and the Reorganized Debtors may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. The Debtors also reserve the right to resolve any Disputed Claims outside the Bankruptcy Court under applicable governing law.

B. Estimation of Claims

The Debtors or the Reorganized Debtors may, at any time, request that the Bankruptcy Court estimate any contingent or unliquidated Claimpursuant to Section 502(c) ofthe Bankruptcy Code regardless of whether the Debtors or the Reorganized Debtors previously have objected to such Claim or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any contingent or unliquidated Claim, that estimated amount will constitute either the allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximumlimitation on such Claim, the Debtors or Reorganized Debtors may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim. All of the aforementioned Claims objection, estimation and resolution procedures are cumulative and not necessarily exclusive of one another. Claims may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court.

C. Payments and Distributions on Disputed Claims

Notwithstanding any provision in the Plan to the contrary, except as otherwise agreed by the Debtors or the Reorganized Debtors in their sole discretion, no partial payments and no partial distributions will be made with respect to a Disputed Claim until the resolution of such dispute by settlement or Final Order. In accordance with Article VI.A.1 of the Plan , as soon as reasonably practicable after a Disputed Claim becomes an Allowed Claim, the Holder of such Allowed Claim will receive all payments and distributions to which such Holder is then entitled under the Plan. Notwithstanding the foregoing, any Person or Entity who holds both an Allowed Claim(s) and a Disputed Claim(s) will receive the appropriate payment or distribution on the Allowed Claim(s), although, except as otherwise agreed by the Debtors or the Reorganized Debtors in their sole discretion, no payment or distribution will be made on the Disputed Claim(s) until such dispute is resolved by settlement or Final Order. In the event there are Disputed Claims requiring adjudication and resolution, the Debtors reserve the right, or upon order of the Court, to establish appropriate reserves for potential payment of such Claims.

D. Allowance of Claims and Interests

Except as expressly provided in the Plan (including, but not limited to, the treatment ofBank Claims and Intercompany Claims as deemed Allowed Claims) or any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation Order), no Claim or Equity Interest shall be deemed Allowed, unless and until such Claim or Equity Interest is deemed Allowed under the Bankruptcy Code or by the Debtors or the Reorganized Debtors, or the Bankruptcy Court enters a Final Order in the Chapter 11 Cases allowing such Claim or Equity Interest. Except as expressly

88 provided in the Plan or any order entered in the Chapter 11 Cases prior to the Effective Date (including the Confirmation Order), the Reorganized Debtors after Confirmation will have and retain any and all rights and defenses the Debtors had with respect to any Claim or Equity Interest as of the date the appropriate Debtor Filed its petition for relief under the Bankruptcy Code, including the Causes of Action referenced in Article X.D of the Plan. All Claims of any entity that owes money to the Debtors shall be disallowed unless and until such entity pays the amount it owes the Debtors in full. Any objection to an Administrative Claim, Priority Claim or Secured Claim must be Filed and served within one hundred and twenty (120) days of the Effective Date.

E. Controversy Concerning Impairment

If a controversy arises as to whether any Claims or Equity Interests, or any Class of Claims or Equity Interests, are Impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing, determine such controversy before the Confirmation Date.

ARTICLE V TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Assumption of Executory Contracts and Unexpired Leases

1. Generally The Debtors will determine which of their executory contracts should be assumed, assumed and assigned, or rejected by analyzing all information pertinent to that determination including, but not limited to, the costs associated with continuing or rejecting their executory contracts and the benefits to the Estates against which such costs must be compared. The Debtors have sought authority from the Bankruptcy Court to assume film studio and related advertising contracts in a motion to assume such contracts Filed on the Petition Date.

On or before the Confirmation Date, the Debtors will File a List of Contracts and Leases listing certain of the Debtors' executory contracts and unexpired leases that the Debtors wish to assume, assume and assign, or reject, and on the Effective Date: (1) each executory contract or unexpired lease ofthe Debtors on such List (except those: executory contracts and unexpired leases that (a) previously have been rejected by order of the Bankruptcy Court, (b) are the subject of a motion to reject pending on the Effective Date, or(c) are otherwise rejected pursuant to the terms of the Plan) will be deemed assumed, assumed and assigned, or rejected, as indicated, inaccordance withtheprovisions and requirements of Sections 365 and 1123 ofthe Bankruptcy Code; (2) all other executory contracts or unexpired leases of the Debtors (except those executory contracts and unexpired leases that (x) previously have been rejected by order of the Bankruptcy Court, (y) are the subject of a motion to reject pending on the Effective Date, or (z) are otherwise rejected pursuant to the terms of the Plan) will be deemed assumed in accordance with the provisions and requirements of Sections 365 and 1123 of the Bankruptcy Code; and (3) the terms of any such executory contract or unexpired lease assumed or assumed and assigned pursuant to clause (1) or (2) of this sentence shall be modified to include any amendments thereto, if any, that were agreed to by the relevant and appropriate parties on or before the Confirmation Date. Notwithstanding the foregoing and unless otherwise agreed by the relevant parties, the Debtors and the Reorganized Debtors reserve the right, at any time prior to fifteen (15) days after the Effective Date, to amend the List of Contra.cts and Leases to: (1) amend the treatment to any executory contract or unexpired lease listed therein, thus providing for its assumption, assumption and assignment, or rejection, as indicated, pursuant to Article V1.A.1 of the Plan; and (2) add any executory contract or unexpired lease to such List and provide for its assumption, assumption and assignment, or rejection, as indicated, pursuant to Article VI of the Plan, all in accordance with Sections 365 and 1123 ofthe Bankruptcy Code. The Reorganized Debtors shall provide notice of the List of Contracts and Leases (and any amendments thereto) to the parties to the executory contracts or

89 unexpired leases affected thereby. Each contract or lease listed on the List of Contracts and Leases shall be assumed, assumed and assigned, or rejected only to the extent that such contract or lease constitutes an executory contract or unexpired lease. Listing a contract or lease on the List of Contracts and Leases shall not constitute an admission by a Debtor or Reorganized Debtor that such contract or lease (including any related agreements) is in fact an executory contract or unexpired lease or that a Debtor or Reorganized Debtor has any liability thereunder. The assumption pursuant to the Plan of an executory contract or unexpired lease, and all of the obligations thereunder, by a Reorganized Debtor shall constitute the Reorganized Debtor's adequate assurance that it will perform under such executory contract or unexpired lease in the future under 11 USC. § 365(b)(l)(C).

2. Notice of Intent to Assume and of Proposed Cure Amount The Debtors shall indicate in the List of Contracts and Leases the amounts of the Debtors' proposed cure payments to the parties to the executory contracts and unexpired leases listed therein. Any party to an executory contract or unexpired lease subject to a cure amount must File a written objection to such cure

amount within twenty (20) days after receipt of such notice of such cure amount or thereafter be forever prohibited and barred from objecting to such cure amount.

3. Consent to Mortgage, Security Interest, or Other Lien Upon Unexpired Leases of Real Property The Debtors shall indicate in the List of Contracts and Leases those unexpired leases of real property to be assumed pursuant to Article VI.A. 1 of the Plan in which the Debtors propose to grant (and have perfected) a security interest, mortgage, or other lien. Any party to any such unexpired lease proposed to be so encumbered, who believes that such unexpired lease prohibits such an encumbrance, must File a written objection to such encumbrance within twenty (20) days after receipt of such notice of such proposed encumbrance. Any party to such a lease that fails to File a written objection to such proposed encumbrance shall be deemed to have consented affirmatively and unconditionally to both (a) the grant of a security interest, mortgage, or other lien in such lease and(b) the recording or other act to perfect such security interest, mortgage, or other lien, or thereafter be forever prohibited and barred from objecting to such encumbrance.

4. Cure of Defaults for Executory Contracts and Unexpired Leases Assumed Any monetary amounts by which each executory contract and unexpired lease to be assumed pursuant to the Article VI.A.1 ofthe Plan is in default, shall be satisfied, pursuant to Section 365(b)(l) of the Bankruptcy Code, at the option ofthe Reorganized Debtor assuming such executory contract or unexpired lease: (a) by payment of the default amount in Cash on or before thirty (30) days after the Effective Date; (b) by payment of the remaining 50% of the default amount in Cash on or before June 15, 2001. A Reorganized Debtor's obligation pursuant to the Plan to make such above payments of the default amount shall be deemed to be adequate assurance that the Reorganized Debtor will promptly cure such default under 11 U.S.C. § 365(b)(l)(A). Any payments made pursuant to and in accordance with Article VI.A.4 ofthe Plan will be deemed made on the Effective Date. In the event of a dispute regarding (1) the amount of any cure payments, (2) the ability of the Retorganized Debtors or any assignee to provide "adequate assurance of future performance" (within the meaning of Section 365 of the Bankruptcy Code) under the contract or lease to be assumed, or (3) any other matter pertaining to assumption, the cure payments required by Section 365(b)( 1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the dispute and approving the assumption; provided, however, that based on the Bankruptcy Court's resolution of any such dispute, the applicable Debtor or Reorganized Debtor shall have the right, within (30) days of the entry of such Final Order and subject to approval by the Bankruptcy Court pursuant to Section 365 of the Bankruptcy Code, to reject the applicable executory contract or unexpired lease. Notwithstanding the foregoing, neither the grant by the Debtors or Reorganized Debtors of a security interest, mortgage, or other lien in any unexpired lease or executory contract assumed pursuant to Article VI of the Plan, nor the recording or other act required for the perfection thereof, shall constitute a breach or other default under such lease or other applicable law.

90 5. Notice The Disclosure Statement and the Plan shall constitute due and sufficient notice of the intention of the Debtors and the Reorganized Debtors to assume all executory contracts and unexpired leases in accordance with Article VI of the Plan.

6. Approval of Assumptions and Assignments Entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of such assumptions, assumptions and assignments, and rejections pursuant to Sections 365(a) and 1123 of the Bankruptcy Code.

B. Assumption of Documents Supplementary to Executory Contracts or Unexpired Leases

Each executory contract or unexpired lease of the Debtors and Reorganized Debtors shall include: (a) modifications, amendments, supplements restatements, or other agreements made directly or indirectly by any agreement & instrument, or other document that in any manner affects such executory contract or unexpired lease, irrespective of whether such agreement, instrument, or other document is listed in the List of Contracts and Leases or in the Schedules; and (ii) executory contracts or unexpired leases appurtenant to the

premises listed on such List, Schedule, or other document, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, usufructs, reciprocal easement agreements, vault, tunnel or bridge agreements or franchises, and any other interest in real estate or rights in rem to such premises, unless any of the foregoing agreements are rejected in accordance with Article VI of the Plan.

C. Assignments Pursuant to the Plan

As of the effective time of any restructuring transaction, if any, consummated pursuant to Article V of the Plan, any executory contract or unexpired lease to be held by a surviving, resulting, or acquiring entity in such restructuring transaction, shall be deemed assigned to the applicable entity pursuant to Section 365 of the Bankruptcy Code, and any party to such lease shall be deemed to have consented affirmatively and unconditionally tlo such assignment. Notwithstanding anything in an unexpired lease or executory contract, an assignment pursuant to Article V1.C ofthe Plan shall not constitute a breach or other default under the executory contract, unexpired lease, or other applicable law.

D. Claims Based on Rejection of Executory Contracts or Unexpired Leases

If the rejection of an executory contract or unexpired lease pursuant to Article VI of the Plan gives rise to a Claim by the other party or parties to such contract or lease, such Claim shall be forever barred and shall not be enforceable against the Debtors, the Reorganized Debtors, their respective successors, estates, and property, unless (1) a proof of Claim is Filed with the Bankruptcy Court and actually received by the respective Reorganized Debtors on or before the later of: (a) thirty (30) days after the Effective Date; (b) thirty (30) days after the entry of a Final Order approving such rejection; or (c) solely with respect to Claims of non−Debtor parties to such contracts or leases affected thereby, thirty (30) days after the date of any amendment to the List of Contracts and Leases that results in such rejection; or (2) otherwise ordered by the Bankruptcy Court or otherwise provided for in the Plan. Claims arising from the rejection of executory contracts or unexpired leases for which proofs of Claim are required to be Filed will be, and will be treated as, General Unsecured Claims subject to the provisions of Article VIII of the Plan.

E. Indemnification of Directors, Officers and Employees

Notwithstanding any other provision ofthe Plan, the obligations of the Debtors to indemnify any Person or Entity serving at any time on or prior to the Effective Date as one of their directors, officers, or employees by reason of such Person's or Entity's service in such capacity, or as a director, officer, or

91 employee of any other corporation or legal entity, to the extent provided in any certificate of incorporation, by−law, or other similar constituent document or by statutory law or written agreement with the Debtors, shall be deemed and treated as executory contracts (and entitled to any benefit afforded under applicable legal authority resulting therefrom) that are assumed by the Debtors pursuant to the Plan and Section 365 of the Bankruptcy Code as of the Effective Date. Accordingly, such indemnification obligations shall survive unaffected by entry of the Confirmation Order, irrespective of whether such indemnification is owed for an act or event occurring before or after the Petition Date, and irrespective ofwhether a proof of Claim based on such indemnification obligations is Filed. The Debtors or the Reorganized Debtors, as the case may be, may modify such indemnification obligations, to the extent that they are authorized to do so, pursuant to the Plan or Sections 365 and 1123 of the Bankruptcy Code. It is the Debtors' position that such indemnification obligations are one of many obligations assumed as part of the overall assumption of such executory contracts with such officers, directors, and employees.

F. Compensation and Benefit Programs

Except as otherwise expressly provided in the Plan, all employment contracts, all employment and severance policies, and all compensation and benefit Plan, policies, and programs of the Debtors applicable to their employees, retirees and non−employee directors, and the employees and retirees of its subsidiaries, including, without limitation, all savings plans, retirement plans, health care plans, disability plans, severance benefit plans, incentive plans, and life, accidental death, and dismemberment insurance plans, are treated as executory contracts under the Plan and on the me Effective Date will be assumed pursuant to the provisions of Sections 365 and 1123 of the Bankruptcy: Code.

ARTICLE VI MEANS FOR IMPLEMENTATION OF THE PLAN

A. Continued Corporate Existence and Vesting of Assets in the Reorganized Debtors

Except as otherwise provided in the Plan, each Debtor shall continue to exist as a Reorganized Debtor after the Effective Date as a separate entity with all the powers of a corporation under the laws of the respective state of incorporation and without prejudice to any right to alter or terminate such existence (whether by merger or otherwise) under such applicable state law. Except as otherwise provided in the Plan, the Lock−Up Agreements, the Restructured Bank Credit Agreement, or any agreement, instrument or indenture relating thereto, on or after the Effective Date, all property in each Estate and any property acquired by each of the Debtors under the Plan shall vest in each respective Reorganized Debtor, free and clear of all liens, Claims, charges, or other encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as othetise provided in the Plan). On and after the Effective Date, each Reorganized Debtor may operate its business and may use, acquire or dispose ofproperty and compromise or settle any Claims or Equity Interests without supervision or approval by the Bankruptcy Court and free of any restrictions ofthe Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly imposed by the Plan and the Confirmation Order. In accordance with Section 1109(b) of the Bankruptcy Code, nothing in Article V.A of the Plan shall preclude any party in interest from appearing and being heard on any issue in the Chapter 11 Cases.

B. Cancellation of Notes, Instruments, Common Stock, Preferred Stock and StockOptions

On the Effective Date, except as otherwise provided in the Plan, (i) all notes, instmments, certificates, and other documents of the Debtors evidencing the Bank Claims and the UA Note Claim, (ii) the Subordinated Notes, (iii) all Equity Interests in Mamaroneck, and (iv) all Equity Interests in UA and UATC shall be canceled, and the obligations of the Debtors thereunder shall be discharged.

92 On the Effective Date, except to the extent provided otherwise in the Plan, any indenture relating to any of the foregoing, including, without limitation, the Subordinated Note Indentures, shall be deemed to be canceled, and the obligations of the debtors thereunder shall be discharged, except for the obligation to indemnify the Subordinated Note Indenture Trustee; provided, however, that the Subordinated Note Indentures shall continue in effect solely for the purposes of(i) allowing the Subordinated Note Indenture Trustee, its agent, or its servicer to make distributions on account of the SubordinatedNote Claims pursuant to the Plan and (ii) permitting such SubordinatedNote Indenture Trustee, its agent, or its servicer to maintain any rights or liens it or they may have for fees, costs, and expenses under such Indentures or other agreement. Upon payment in full of the fees and expenses of the Subordinated Note Indenture Trustee pursuant to Article V11.B of the Plan, the liens (if any) of the Subordinated Note Indenture Trustee shall automatically be deemed released and terminated.

C. Issuance of New Securities; Execution of Related Documents

On or as soon as reasonably practicable after the Effective Date, except as otherwise provided in the Plan, the Reorganized Debtors shall issue all securities, notes, instruments, certificates, warrants, and other documents to be i.ssued in accordance with the Plan, including, but not limited to, the Restructured Bank Credit Agreement, the Esquity Elector Warrants, theNew UA Common Stock, the New UA Convertible Preferred Stock, the New UA Warrants, the New UATC Common Stock and the Management Equity, each of which shall be distributed as referenced in the Plan. The Reorganized Debtors shall execute and deliver such other agreements, documents and instruments as are required to be executed in accordance with the terms of the Plan and/or the Lock−Up Agreements.

D. Transactions Required by the Plan

Any transaction required by the Plan shall be implemented in accordance with Article V of the Plan and Article VI ofthe Disclosure Statement. The description in Article V of the Plan of the organizational and ownership structures, governance, and assets and liabilities of the Reorganized Debtors assumes that any transactions required to implement the Plan have been completed. Any corporate transactions to be taken to implement the Plan are described more fully in the Transactions to Implement the Plan, contained in the Plan Supplement.

THE ESTATES OF THE DEBTORS HAVE NOT BEEN CONSOLIDATED, SUBSTANTIVELY OR OTHERWISE. THE CLAIMS HELD AGAINST ONE OF THE DEBTORS WILL BE SATISFIED SOLELY FROM THE CASH AND ASSETS OF SUCH DEBTOR. EXCEPT AS SPECIFICALLY SET FORTH HEREIN, NOTHING IN THE PLAN OR THE DISCLOSURE STATEMENT, SHALL CONSTITUTE OR BE DEEMED TO CONSTITUTE AN ADMISSION THAT ANY ONE OF THE DEBTORS IS SUBJECT TO OR LIABLE FOR ANY CLAIM AGAINST ANY OTHER DEBTOR. THE CLAIMS OF CREDITORS THAT HOLD CLAIMS AGAINST ALL OR MORE THAN ONE OF THE DEBTORS WILL BE TREATED AS SEPARATE CLAIMS WITH RESPECTTOEACHDEBTOR'SESTATEFORALLPURPOSES(INCLUDING,BUTNOTLIMITED TO, DISTRIBUTIONS AND VOTING), AND SUCH CLAIMS WILL BE ADMINISTERED AS PROVIDED IN THE PLAN.

1. New UA

(a) Organization. On or as soon as reasonably practicable after the Effective Date, the following classes of rights and interests in New UA's equity shall be created: New UA Common Stock, New UA Convertible Preferred Stock, Equity Elector Warrants, and New UA Warrants. On or as soon as reasonably practicable after the Effective Date, the New UA Common Stock, New UA Convertible Preferred Stock, Equity Elector Warrants, and New UA Warrants shall be distributed in accordance with the terms of the Plan.

93 (b) Assets and Liabilities of New UA. On the Effective Date, New UA will own its own assets (including the New UATC Common Stock in consideration for, among other things, the satisfaction of the UA Note Claim of UA), free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(c) Governance of New UA. On and after the Effective Date, the business and affairs of New UA will be managed by and under the direction of New UA's board of directors as set forth in Article V.E of the Plan.

(d) Exit Financing Facility. To finance the Cash requirements to consummate the Plan and to provide the Reorganized Debtors with working capital on a going−forward basis, on the Effective Date New UA shall enter into the Exit Facility, which may be guaranteed and/or secured by certain assets of the one or more of the Reorganized Debtors.

2. New UATC{fm (a) Organization. On the Effective Date, New UA will receive and own all of the New UATC Common Stock, free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(b) Assets and Liabilities of New UATC. On the Effective Date, New UATC will own its own assets (including, but not limited to, its equity, partnership, or membership interests in certain Debtor and non−Debtor entities), all free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(c) Governance of New UATC. On and after the Effective Date, the business and affairs of New UATC will be managed by and under the direction of New UATC's board of directors as set forth in Article V.E of the Plan.

(d) Exit Financing Facility. To finance the Cash requirements to consummate the Plan and to provide the Reorganized Debtors with working capital on a going−forward basis, on the Effective Date, New UATC shall enter into the Exit Facility, which may be guaranteed and/or secured by certain assets of the Reorganized Debtors.

3. Reorganized UAR

(a) Organization. On the Effective Date, New UA will retain and own all of the Reorganized UAR Common Stock, free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(b) Assets and Liabilities of Reorganized UAR. On the Effective Date, Reorganized UAR will own its own assets (including, but not limited to, UAR's Equity Interests in UAP I and UAP II), all free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(c) Governance of Reorganized UAR. On and after the Effective Date, the business and affairs of Reorganized UAR will be managed by and under the direction of Reorganized UAR's board of directors as set forth in Article V.E of the Plan.

94 (d) Exit Financing Facility. To finance the Cash requirements to consummate the Plan and to provide the Reorganized Debtors with working capital on a going−forward basis, on the Effective Date, Reorganized UAR shall enter into the Exit Facility, which may be guaranteed and/or secured by certain assets of the Reorganized Debtors.

4. Reorganized UAP I

(a) Organization. On the Effective Date, Reorganized UAR will retain and own all of the Reorganized UAP I Common Stock, free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(b) Assets and Liabilities of Reorganized UAP I. On the Effective Date, Reorganized LJAP 1 will own its own assets all free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(c) Governance of Reorganized UAP I. On and after the Effective Date, the business and affairs of Reorganized UAP I will be managed by and under the direction of Reorganized UAP I's board of directors as set forth in Article V.E of the Plan.

(d) Exit Financing Facility. To finance the Cash requirements to consummate the Plan and to provide the Reorganized Debtors with working capital on a going−forward basis, on the Effective Date, Reorganized UA.P I shall enter into the Exit Facility, which may be guaranteed and/or secured by certain assets of the Reorganized Debtors.

5. Reorganized UAP II

(a) Organization. On the Effective Date, Reorganized UAR will retain and own all of the Reorganized UAP II Common Stock, free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(b) Assets and Liabilities of Reorganized UAP II. Onthe Effective Date, Reorganized UAP II will own its own assets all free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(c) Governance of Reorganized UAP II. On and after the Effective Date, the business and affairs of Reorganized UAP II will be managed by and under the direction of Reorgsltied UAP II's board of directors as set forth in Article V.E of the Plan.

(d) Exit Financing Facility. To financing the Cash requirements to consummate the Plan

and to provide the Reorganized Debtors with working capital on a going−forward basis, on the Effective Date, Reorganized UAP II shall enter into the Exit Facility, which may be guaranteed and/or secured by certain assets of the Reorganized Debtors.

95 6. Reorganized UAIPH

(a) Organization. On the Effective Date, New UATC will retain and own all of the UAIPH Common Stock, free and clear of liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(b) Assets and Liabilities of Reorganized UAIPH. Onthe Effective Date, Reorganized UAIPH will own its own assets (including, but not limited to, UAIPH's equity interest in UATC Europe B.V.), free and clear ofany liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(c) Governance of Reorganized UAIPH. On and after the Effective Date, the business and affairs of Reorganized UAIPH will be managed by and under the direction of Reorganized UAIPH's board of directors as set forth in Article V.E of the Plan.

7. Reorganized UAPH II

(a) Organization. On the Effective Date, New UATC will retain and own all of the UAPH II Common Stock, all free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(b) Assets and Liabilities of Reorganized UAPH II. On the Effective Date, Reorganized UAPH II will retain and own its own assets (including, but not limited to, its Equity Interests in R&S, KRAC, and Mamaroneck and its equity interests in certain non−Debtor entities), all free and clear of any liens, Claims, and encumbrances (except for liens, if any, granted to secure the Restructured Bank Credit Agreement, Claims under the DIP Facility that by their terms survive termination of that Facility, the Exit Facility, or as otherwise provided in the Plan).

(c) Governance of Reorganized UAPH II. On and after the Effective Date, the business and affairs of Reorganized UAPH II will be managed by and under the direction of Reorganized UAPH II's board of directors as set forth in Article V.E of the Plan.

8. Reorganized R&S

(a) Organization. On the Effective Date, Reorganized UAPH II and Royal will retain and own all of the R&S Common Stock (in proportion to their respective percentage ownership interests prior to the Petition Date), free and clear of any liens, Claims, and encumbrances (except as otherwise provided in the Plan).

(b) Assets and Liabilities of Reorganized R&S. On the Effective Date, Reorganized R&S will retain and own its own assets free and clear of any liens, Claims, and encumbrances (except as otherwise provided in the Plan).

(c) Governance of Reorganized R&S. On and after the Effective Date, the business and affairs of Reorganized R&S will be managed by and under the direction of Reorganized R&S's board of directors as set forth in Article V.E of the Plan.

9. Mamaroneck (a) Organization. On the Effective Date, all Preferred and Common Mamaroneck Stock shall be canceled, and Mamaroneck shall be dissolved and shall cease to do business pursuant to the Confirmation Order. On or as soon as reasonably practicable after the Effective Date, all Holders of such Preferred Stock and Common Stock shall be paid in accordance with the Plan. In the event that applicable state law requires additional acts to be taken or performed in order to dissolve the affairs of Mamaroneck, Reorganized UAPH II shall be authorized to take all

96 necessary steps and perform all requisite acts in order to dissolve Mamaroneck in accordance with applicable state law (other than provisions of such state law relating to distributions to Holders of Claims against, and Equity Interests in, Mamaroneck). Reorganized UAPH II shall be granted power of attorney on behalf of Mamaroneck to perform any and all acts and/or execute such documentation as is necessary or appropriate in furtherance of the dissolution of Mamaroneck.

(b) Assets and Liabilities of Reorganized Mamaroneck. On or as soon as reasonably practicable after the Effective Date, Reorganized Mamaroneck shall distribute its assets, free and clear of any liens, Claims, and encumbrances (except as otherwise provided in the Plan) to Holders of Allowed Claims against Mamaroneck.

(c) Governance of Reorganized Mamaroneck. On and after the Effective Date, the business and affairs of Reorganized Mamaroneck will be managed by and under the direction of Reorganized UAPH II pursuant to the power of attorney granted in Article V.D.

E. New UA Common Stock Dilution

The following charts illustrates the dilution of New UA Common Stock upon the conversion of the New UA Convertible Preferred Stock and the exercise of the Equity Elector Warrants, the New UA Warrants, and Management Equity.

UNITED ARTISTS THEATRE COMPANY EQUITY OWNERSHIP DILUTION ANALYSIS* STAGE I—ISSUANCE OF NEW COMMON STOCK

UA Debt Unsecured Total Anschutz Electors Management Creditors

Initial Number of Shares Outstanding — — — — — New Common Shares Allocated 10,000,000 2,000,000 8,000,000 — — Subtotal 10,000,000 2,000,000 8,000,000 — — Percentage Held 100.0% 20.0% 80.0% 0.0% 0.0%

STAGE II—EXERCISE OF $5.00 (STRIKE PRICE) OPTIONS

UA Debt Unsecured Total Anschutz Electors Management Creditors

Common Stock Shares Allocated 2,464,333 — — 2,464,333 — Total Diluted Shares Outstanding after Exercise 12,464,333 2,000,000 8,000,000 2,464,333 — Percentage Held 100.0% 16.0% 64.2% 19.8% 0.0%

STAGE III—NEW UA CONVERTIBLE PREFERRED STOCK CONVERSION ($6.25 STRIKE PRICE)

UA Debt Unsecured Total Anschutz Electors Management Creditors

Shares Outstanding 12,464,333 2,000,000 8,000,000 2,464,333 — Common Stock Shares Allocated 9,120,000 9,120,000 — — — Total Diluted Shares Outstanding after Exercise 21,584,333 11,120,000 8,000,000 2,464,333 — Percentage Held 100.0% 51.5% 37.1% 11.4% 0.0%

97 STAGE IV—EXERCISE OF $10.00 (STRIKE PRICE) OPTIONS

UA Debt Unsecured Total Anschutz Electors Management Creditors

Shares Outstanding 21,584,333 11,120,000 8,000,000 2,464,333 — Common Stock Shares Allocated 3,826,778 3,750,000 — 76,778 — Total Diluted Shares Outstanding after Exercise 25,411,111 14,870,000 8,000,000 2,541,111 — Percentage Held 100.0% 58.5% 31.5% 10.0% 0.0%

STAGE V—EXERCISE OF NEW UA WARRANTS AND MANAGEMENT ANTI−DILUTION PROTECTION

UA Debt Unsecured Total Anschutz Electors Management Creditors

Shares Outstanding 25,411,111 14,870,000 8,000,000 2,541,111 — Common Stock Shares Allocated 2,055,556 — — 205,556 1,850,000 Total Diluted Shares Outstanding after Exercise 27,446,667 14,870,000 8,000,000 2,746,667 1,850,000 Percentage Held 100.0% 54.1% 29.1% 10.0% 6.7%

F. Corporate Governance, Corporate Action, and Directors and Officers

1. New Certificates of Incorporation and Formation On or as soon as reasonably practicable after the Effective Date, each of the Reorganized Debtors shall file New Certificates of Incorporation with the secretary of state (or equivalent state officer or entity) of the state under which each such Reorganized Debtor is or is to be incorporated. Such New Certificates of Incorporation shall, among other things: (a) prohibit the issuance of nonvoting equity securities to the extent required by Section 1123(a) of the Bankruptcy Code; and (b) in the case of New UA (i) change the number of authorized shares of New UA Common Stock to 10,000,000 (subject to dilution in accordance with the Plan and the Lock−Up Agreements), (ii) reflect the appropriate number of authorized shares of New UA Convertible Preferred Stock, and (iii) provide for the issuance of Equity Elector Warrants, New UA Warrants, and Management Equity. After the Effective Date, each Reorganized Debtor may amend and restate its New Certificate of Incorporation and other constituent documents as permitted by the relevant state corporate law.

2. Corporate Action On the Effective Date, the adoption of New Certificates of Incorporation or similar constituent documents, the amendment of by−laws, the selection of directors and officers of any of the Reorganized Debtors, and all actions contemplated by the Plan shall be authorized and approved in all respects (subject to the provisions of the Plan). All matters provided for in the Plan involving the corporate structure of the Debtors or the Reorganized Debtors, and any corporate action required by the Debtors or the Reorganized Debtors in connection with the Plan, shall be deemed to have occurred and shall be in effect, without any requirement of further action by the security holders or directors of the Debtors or the Reorganized Debtors. On the Effective Date, the appropriate officers and directors of the Reorganized Debtors are authorized and directed to issue, execute and deliver the agreements, documents, securities and instruments contemplated by the Plan in the name of and on behalf of the Reorganized Debtors.

3. Directors and Officers of the Reorganized Debtors Subject to any requirement of Bankruptcy Court approval, pursuant to Section 1129(a)(5) of the Bankruptcy Code, the Debtors will disclose, on

98 or prior to the Confirmation Date, the identity and affiliations of any Person proposed to serve on the initial boards of directors of the Reorganized Debtors in the Statement of Officers and Directors. To the extent any such Person is an Insider, the nature of any compensation for such Person will also be disclosed. The classification and composition of the boards of directors shall be consistent with each Reorganized Debtor's New Certificate of Incorporation and as set forth in, and in accordance with the terms of, the Lock−Up Agreements. Each such director or officer shall serve from and after the Effective Date pursuant to the terms of each Reorganized Debtor's New Certificate of Incorporation, other constituent documents, the applicable state corporation law and as set forth and in accordance with the terms of the Lock−Up Agreements. New UA will have a seven−person board of directors consisting of the following designations: one director shall be New UA's chief executive officer; two directors shall be nominated by the Debt Electors with an initial term of two years; and four directors shall be nominated by ENIC.

The following table sets forth certain information with respect to the current officers and directors of the Debtors:

UNITED ARTISTS THEATRE COMPANY

Name Position

Kurt C. Hall President, CEO Michael F. Pade Executive Vice President Ralph E. Hardy Executive Vice President, General Counsel, Secretary David Giesler Executive Vice President, Chief Financial Officer Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President

UNITED ARTISTS THEATRE COMPANY

Name Position

Robert A McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President John W. Boyle Director Albert J. Fitzgibbons, III Director James J. Burke, Jr. Director Scott M. Shaw Director Robert F. End Director Kurt C. Hall Director Michael L. Pade Director

99 UNITED ARTISTS THEATRE CIRCUIT, INC.

Name Position

Kurt C. Hall President, CEO Michael F. Pade Executive Vice President Ralph E. Hardy Executive Vice President, General Counsel, Secretary David Giesler Executive Vice President, Chief Financial Officer Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President John W. Boyle Director Albert J. Fitzgibbons, III Director James J. Burke, Jr. Director Scott M. Shaw Director Robert F. End Director Kurt C. Hall Director Michael L. Pade Director

100 UNITED ARTISTS REALTY COMPANY

Name Position

Kurt C. Hall President, CEO Michael F. Pade Executive Vice President Ralph E. Hardy Executive Vice President, General Counsel, Secretary David Giesler Executive Vice President, Chief Financial Officer Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President John W. Boyle Director Albert J. Fitzgibbons, III Director James J. Burke, Jr. Director Scott M. Shaw Director Robert F. End Director Kurt C. Hall Director Michael L. Pade Director

101 UNITED ARTISTS PROPERTIES I CORP.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

UNITED ARTISTS PROPERTIES II CORP.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

102 UAB, INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

UAB II, INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

103 TALLTHE, INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, Genera1 Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

UA THEATRE AMUSEMENTS, INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

104 UA INTERNATIONAL PROPERTY HOLDING, INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

UA PROPERTY HOLDING II. INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

105 UNITED ARTISTS INTERNATIONAL. MANAGEMENT COMPANY

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

BETH PAGE THEATRE CO. INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

106 UNITED FILM DISTRIBUTION COMPANY OF SOUTH AMERICA

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Wallace R. Helton Vice President Robert McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

U.A.P.R., INC.

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

107 KING REAVIS AMUSEMENT COMPANY

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

MAMARONECK PLAYHOUSE HOLDING CORPORATION

Name Position

Kurt C. Hall President and CEO Ralph E. Hardy Executive Vice President, General Counsel and Secretary David Giesler Executive Vice President, Chief Financial Officer Michael F. Pade Executive Vice President Raymond C. Nutt Executive Vice President Neal Pinsker Executive Vice President Bruce Taffet Executive Vice President Steven J. Koets Senior Vice President Edward Cooper Vice President Charles Fogel Vice President Vince M. Fusco Vice President Gerald M. Grewe Vice President Wallace R. Helton Vice President Robert A. McCormick Vice President Rebecca A. Sanders Vice President Darrell C. Taylor Vice President Douglas A. Wolkin Vice President Scott M. Shaw Director Kurt C. Hall Director Ralph E. Hardy Director

108 R AND S THEATRES, INC.

Name Position

G. Monte Royal President Constance B. Royal Secretary Darrell C. Taylor Vice President David Giesler Treasurer G. Monte Royal Director Constance B. Royal Director Darrell C. Taylor Director

G. Sources of Cash for Plan Distribution

All Cash necessary for the Reorganized Debtors to make payments pursuant to the Plan shall be obtained from existing Cash balances, the operations of the Debtors or Reorganized Debtors, or post−Confirmation borrowing under other available facilities of the Debtors or Reorganized Debtors, including, but not limited to, the DIP Facility and the Exit Facility. The Reorganized Debtors may also make such payments using Cash received from its direct and indirect subsidiaries through the Reorganized Debtors' consolidated cash management operated by New UATC and from advances or dividends from such subsidiaries in the ordinary course of business.

H. Securities Distributed in Accordance with Plan and Applicability of Securities Laws

The New UA Common Stock, the New UA Convertible Preferred Stock, the Equity Elector Warrants, the New UA Warrants, Management Stock Options, and the New UATC Common Stock (sometimes collectively referred to herein as the "Securities") will be created and issued in accordance with the Plan. Such Securities are described generally below, and such descriptions are subject to, and are qualified in their entirety by reference to, all of the provisions (including definitions of certain terms therein) contained in New UA's and New UATC's New Certificate of Incorporation and by−laws, the Certificate of Designations of the New UA Convertible Preferred Stock, the Equity Elector Warrants, the New UA Warrants, the Management Stock Options, and a New UA Common Stock stockholders' agreement, the final negotiation and execution of which are not yet complete.

1. New UA Common Stock.

The holders of New UA Common Stock of UATC will be entitled to one vote per share for each share of record on all matters submitted to a vote of shareholders. Subject to preferential rights with respect to any series of preferred stock, holders of New UA Common Stock will be entitled to receive ratably such dividends as may be declared by New UA's board of directors on the New UA Common Stock out of funds legally available therefor. Upon any voluntary or involuntary liquidation, dissolution or winding−up of the affairs of New UA, the holders of New UA Common Stock, subject to preferential rights with respect to any series of preferred stock, will be entitled to share equally and ratably in all remaining assets and funds of New UA. The holders of New UA Common Stock will have no preemptive, subscription, conversion or cumulative voting rights and will not be subject to future calls or assessments by New UA. All shares of New UA Common Stock to be issued under the Plan will be fully paid and nonassessable.

2. New UA Convertible Preferred Stock.

(a) Conversion. The New UA Convertible Preferred Stock will be convertible into New UA Common Stock at any time or from time to time, at the option of the holder of such Preferred

109 Stock; provided, however, each outstanding share of New UA Convertible Preferred Stock will automatically be converted into New UA Common Stock at the conversion price then in effect upon the closing of an underwritten public offering pursuant to an effective registration statement under the Securities Act, covering the offering and sale of the New UA Common Stock for the account of New UA in which the aggregate gross proceeds received by New UA equals or exceeds an amount yet to be determined and in which the public offering price per share equals or exceeds the conversion price in effect immediately prior to the closing of such public offering.

(b) Dividends. The holders of New UA Convertible Preferred Stock will not be entitled to receive cash dividends.

(c) Distributions upon Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or other winding up of the affairs of New UA, subject to the prior preferences and other rights of any senior stock, but before any distribution or payment is made to the holders of junior stock, the holders of New UA Convertible Preferred Stock will be entitled to be paid an amount equal to $6.25 (as may be adjusted for any recapitalizations, stock combinations, stock dividends, stock splits and the like) in respect of each outstanding share of such Preferred Stock as of the date of such liquidation or dissolution or such other winding up.

(d) Adjustments. Each share of New UA Convertible Preferred Stock will be converted into a number of shares of New UA Common Stock determined by dividing (i) $6.25, by (ii) the conversion price in effect on the conversion date (the "Conversion Price"). The Conversion Price at which shares of New UA Common Stock will initially be issuable upon conversion of the shares of New UA Convertible Preferred Stock will be $6.25. The Conversion Price will be subject to adjustment as follows:

(i) If New UA issues any New UA Common Stock other than excluded stock (e.g., shares of New UA Common Stock issued to employees) without consideration or for a consideration per share less than the Conversion Price then in effect immediately prior to such issuance, the Conversion Price in effect immediately prior to each such issuance will immediately (except as otherwise provided for in the Certificate of Designations of the New UA Convertible Preferred Stock) be reduced to the price determined by dividing (A) an amount equal to the sum of (1) the number of shares of New UA Common Stock outstanding immediately prior to such issuance and (2) the consideration, if any, received by New UA upon such issuance, by (B) the total of shares of New UA Common Stock outstanding immediately after such issuance.

(ii) If New UA (A) declares a dividend or makes a distribution on its New UA Common Stock in shares of its New UA Common Stock, (B) subdivides or reclassifies the outstanding shares of New UA Common Stock into a greater number of shares, or(C) combines or reclassifies the outstanding New UA Common Stock into a smaller number of shares, the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or reclassification will be proportionately adjusted so that the holder of any shares of New UA Convertible Preferred Stock surrendered for conversion after such date will be entitled to receive the number of shares of New UA Common Stock which such holder would have owned or been entitled to receive had such New UA Convertible Preferred Stock been converted immediately prior to such date. Successive adjustments in the Conversion Price will be made whenever any event specified above occurs.

(iii) In the event New UA fixes a record date for the making of a distribution to all holders of shares of its New UA Common Stock (A) of shares of any class other than its New UA Common Stock, (B) of evidence of indebtedness of New UA or any subsidiary of New UA, (C) of assets (excluding cash dividends or distributions, and certain other dividends or

110 distributions), or (D) of rights or warrants (excluding those referred to in Article V.G.2.(a) of the Plan), then and in each such case, the holders of New UA Convertible Preferred Stock will receive, at the time of distribution, the same distribution that they would have received had their New UA Convertible Preferred Stock been converted into New UA Common Stock immediately prior to the date of such event.

(iv) In the event of any consolidation with or merger of New UA with or into another corporation, or in case of any sale, lease or conveyance to another corporation of the assets of New UA as an entirety or substantially as an entirety, each share of New UA Convertible Preferred Stock will, after the date of such consolidation, merger, sale, lease or conveyance, be convertible into the number of shares of stock or other securities or property (including cash) to which the New UA Common Stock issuable (at the time of such consolidation, merger, sale, lease or conveyance) upon conversion of such share of New UA Convertible Preferred Stock would have been entitled upon such consolidation, merger, sale, lease or conveyance; and in any such case, if necessary, the rights and interests of the holders of the shares of New UA Convertible Preferred Stock will be appropriately adjusted so as to be applicable, as nearly as may reasonably be, to any shares of stock or other securities or property thereafter deliverable on the conversion of the shares of New UA Convertible Preferred Stock.

(e) Voting Rights. In addition to any special voting rights provided in the New UA Convertible Preferred Stock's Certificate of Designations and by applicable law, the holders of shares of New UA Convertible Preferred Stock will be entitled to vote upon all matters upon which holders of the New UA Common Stock have the right to vote, and will be entitled to vote the number of shares equal to the largest number of full shares of New UA Common Stock into which such shares of New UA Convertible Preferred Stock could be converted at the record date for the determination of the stockholders entitled to vote on such matters, or, if no such record date is established, at the date such vote is taken or any written consent of stockholders is solicited, such votes to be counted together with all other shares of capital stock having general voting powers and not separately as a class. In all cases where the holders of shares of New UA Convertible Preferred Stock have the right to vote separately as a class, such holders shall be entitled to one vote for each such share held by them respectively. Without the consent of the holders of at least a majority of the shares of New UA Convertible Preferred Stock then outstanding, New UA may not: (i) increase the authorized amount of New UA Convertible Preferred Stock; (ii) create any other class of parity stock or senior stock or increase the authorized amount of any such other class; (iii) amend, alter or repeal any provision of New UA's New Certificate of Incorporation or bylaw's or the New UA Convertible Preferred Stock's Certificate Of Designations so as to adversely affect the rights, preferences or privileges of the New UA Convertible Preferred Stock; or (iv) merge or consolidate with or into any other person, or sell substantially all of its assets or business to any other person, except that New UA may engage in a transaction under (iv) if the stockholders of New UA immediately prior to such transaction hold at least 50% of the voting power of the surviving corporation in such transaction.

(f) Covenants. In addition to Article V.G.2(e) of the Plan, so long as any New UA Convertible Preferred Stock is outstanding, New UA, without first obtaining the affirmative vote or written consent of the holders of not less than a majority of such outstanding shares of New UA Convertible Preferred Stock, will not: (i) authorize or issue shares of stock of any class or any obligations convertible into or exchangeable for, or having option rights to purchase, any shares of stock of New UA having any preference or priority as to dividends, assets or other rights superior to or on parity with any such preference or priority of the New UA Convertible Preferred Stock; (ii) reclassify any class or series of any junior stock into parity stock or senior stock or reclassify any series of parity stock into senior stock; (iii) pay or declare any dividend on any junior stock (with certain exceptions) while the New UA Convertible Preferred Stock remains outstanding, or

111 apply any of its assets (with certain exceptions) to the redemption, retirement, purchase or acquisition, directly or indirectly, through subsidiaries or otherwise, of any junior stock; or (iv) materially change the principal business of New UA.

2. Equity Elector Warrants and New UA Warrants

(a) Purchase Price. The holders of Equity Elector Warrants and New UA Warrants (collectively, the "Warrants") will be entitled to purchase from New UA at any time after the date of issuance of such Warrants (the "Date of Issuance") and on or before the seventh anniversary of the Date of Issuance, a certain number of shares of New UA Common Stock at a purchase price per share of $10.00 (the "Purchase Price"). The Purchase Price will be adjusted from time to time.

(i) Exercise. A Warrant may be exercised by the holder in whole or in part by surrendering such Warrant to New UA. An exercise of such Warrant will be deemed to have been effected immediately prior to the close of business on the day on which such Warrant is surrendered to New UA and the Purchase Price is paid.

(ii) Adjustments. If the New UA Common Stock is subdivided into a greater number of shares or a dividend in New UA Common Stock is paid in respect of New UA Common Stock, the Purchase Price in effect immediately prior to such subdivision or at the record date of such dividend will simultaneously with the effectiveness of such subdivision or immediately after the record date of such dividend be proportionately reduced. If the outstanding New UA Common Stock is combined into a smaller number of shares, the Purchase Price in effect immediately prior to such combination will, simultaneously with the effectiveness of such combination, be proportionately increased. When an adjustment to the Purchase Price is required to be made, the number of New UA Common Stock purchasable upon exercise of Warrant (the "Warrant Shares") will be adjusted to the number determined by dividing (A) an amount equal to the number of shares issuable upon the exercise of such a Warrant immediately prior to such adjustment, multiplied by the Purchase Price in effect immediately prior to such adjustment, by (B) the Purchase Price in effect immediately after such adjustment. In case of any reclassification or change of the outstanding securities of New UA or of any reorganization of New UA (or any other corporation the stock or securities of which are at the time receivable upon the exercise of a Warrant) or any similar corporate reorganization on or after the Date of Issuance, then and in each such case, the holder of a Warrant, at any time after the consummation of such reclassification, change, reorganization, merger or conveyance, will be entitled to receive, in lieu of the shares or other securities and property receivable upon the exercise of such a Warrant prior to such consummation, the shares or other securities or property to which such holder would have been entitled upon such consummation if such holder had exercised such Warrant immediately prior to such consummation.

3. Management Stock Options.

1,780,000 shares of New UA's Common Stock will be reserved for Management Stock Option grants to existing and/or future management executives of the Debtors and/or Reorganized Debtors ("Management"), which shall dilute existing New UA Common Stock and be vested as follows: 10% upon the Effective Date; 10% on the one−year anniversary after the Effective Date; and 20% on each of the second through fifth one−year anniversaries after the Effective Date. The strike price for the Management Stock Options will be $5 per share (with certain limited exceptions). New UA Common Stock issued to Management on account of the Management Stock Options will dilute on a Pro Rata basis the existing New UA Common Stock. The Plan, in accordance with the Bar & Lock−Up Agreements, also provides that a New UA's stockholders' agreement will incorporate up to 76 1,111

112 stock options to be reserved for future grants to Management by New UA's board of directors, adjusted upward for the dilution effect of other Warrants, with a strike price to be determined by New UA's board of directors.

4. New UA Stockholders' Agreement.

In connection with the Plan, the holders of the New UA Common Stock, New UA Convertible Preferred Stock, the Equity Elector Warrants, and the Debt Elector Warrants will enter into a stockholders agreement which will provide for, among other things, registration rights and restrictions on transfer (including a right of first refusal for Anschutz and "drag−along" rights).

5. New UATC Common Stock.

Under the Plan, the Holder of the Allowed Class 2D Claim shall receive the New IJA Common Stock, with rights and terms substantially similar to the UA Common Stock.

6. Exemptions From Registration Under the Securities Act.

(a) Section 1145 Exemption. The offer and sale by New UA of the New UA Common Stock, the New UA Convertible Preferred Stock, the Equity Elector Warrants, the Debt Elector Warrants, Management Stock Options, and New UATC Common Stock to the holders of Claims against, and Interests in, the Debtors, and the offer and sale of New UA Common Stock upon the exercise of the conversion privilege or any other right under such Securities (collectively, the "Underlying New UA Common Stock"), under and in accordance with the Plan and on account of and with respect to such Claims and Interests, are and will be exempt from registration under the Securities Act pursuant to Section 1145(a)(l) and (2) of the Bankruptcy Code. Section 1145(a) of the Bankruptcy Code provides, in part:

Except with respect to an entity that is an underwriter, as defined in subsection (b) of this section, section 5 of the Securities Act of 1933 and any state or local law requiring registration for offer or sale of a security or registration or licensing of an issuer of, underwriter of, or broker or dealer in, a security do not apply to—

(1) the offer or sale under a plan of a security of the debtor, of an affiliate participating in a joint plan with the debtor, or of a successor to the debtor under the plan—

(A) in exchange for a claim against, an interest in, or a claim for an administrative expense in the case concerning, the debtor or such affiliate; or

(B) principally in exchange and partly for cash or property;

(2) the offer of a security through any warrant, option, right to subscribe or conversion privilege that was sold in the manner specified in paragraph (1) of this subsection, or the sale of a security upon the exercise of such a warrant, option, right or privilege.

11 U.S.C. 5 1145. Specifically, New UA Common Stock will be offered and sold under the Plan in exchange for Class 2B Claim against the Debtors, and accordingly, the distribution of such securities are exempt under Section 1145(a)(1) of the Bankruptcy Code from the registration and prospectus delivery requirements of Section 5 of the Securities Act. Moreover, New UATC Common Stock will be offered and sold under the Plan in exchange for Class 2D Claims against the Debtors, and accordingly, the distribution of such securities are exempt under Section 1145(a)(1) of the Bankruptcy Code from the registration and prospectus delivery requirements of Section 5 of the Securities Act. Underlying New UA Common Stock will also be issued by New UA upon exercise of a conversion privilege, or other right under the Securities, as the case may be, that was sold or exchanged in the manner specified in Section 1145(a)(1);

113 accordingly, Section 1145(a)(2) of the Bankruptcy Code will exempt such Underlying New UA Common Stock from the registration and prospectus delivery requirements of !Section 5 of the Securities Act.

(b) Subsequent Resales. The exemption provided by Section 1145(a) of the Bankruptcy Code only applies to the offer and sale of the Securities or any other securities under the Plan and does not extend to any subsequent offer or resale of such Securities, any subsequent offer or resale of other securities offered and sold under the Plan, or the Underlying New Common Stock. However, other provisions of Section 1145 of the Bankruptcy Code provide clarification with respect to the availability of the exemption afforded by Section 4(1) of the Securities Act to such offers and resales. Section 1145(c) provides that, "an offer or sale of securities of the kind and in the manner specified under subsection (a)(1) of this section is deemed to be a public offering." This prevents the characterization of such a distribution as a "private placement" which would otherwise result in any such securities being treated as "restricted securities" under Rule 144 promulgated under the Securities Act. Thus, the Securities or any other securities distributed under the Plan will not be "restricted securities" and may be resold (subject to restrictions on resale, if any, as provided in the terms of such Securities) without being subject to the restrictions on resales imposed by Rule 144 promulgated under the Securities Act, so long as the selling entity is not an "affiliate" of the issuer as defined under Rule 144(a)(1). Alternatively, any such selling entity deemed to be an "affiliate" of the issuer may resell the Securities or any other securities distributed under the Plan subject to the restrictions of Rule 144 (except for the holding period requirement).

ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS

A. Distributions for Claims Allowed as of the Effective Date

1. Except as otherwise provided in the Plan or as may be ordered by the Bankruptcy Court, distributions to be made on the Effective Date on account of Claims that are allowed as of the Effective Date and that are entitled to receive distributions under the Plan shall be made on the Effective Date or as soon as practicable thereafter. Distributions on account of Claims that become Allowed Claims after the Effective Date shall be made pursuant to Articles VI1.C and VII1.C of the Plan.

2. For purposes of determining the accrual of interest or rights in respect of any other payment from and after the Effective Date, (a) the accrual of interest and rights under the Prepetition Bank Credit Facility shall no longer continue on or after the Effective Date, and (b) any security, credit document, or other financial instrument to be issued under. the Plan (including but not limited to, the Restructured Bank Credit Agreement, the New UA Common Stock, the New UA Convertible Preferred Stock, the Equity Elector Warrants, the New UA Warrants, the Management Equity, and the New UATC Common Stock) shall be deemed issued as of the Effective Date regardless of the date on which they are actually dated, authenticated or distributed; provided, however that the Reorganized Debtors shall withhold any actual payment, if any, until such distribution is made and no interest shall accrue or otherwise be payable on any such amounts withheld.

3. Beginning on the Effective Date, except as otherwise stated in the Plan, the Reorganized Debtors in their sole discretion shall make distributions under the Plan as frequently as is reasonably practical and efficient under the circumstances.

114 B. Distributions by the Reorganized Debtors; Distributions with Respect to Debt Securities

The Reorganized Debtors shall make all distributions required under the Plan, except as otherwise provided therein. Notwithstanding the provisions of Article V.B of the Plan regarding the cancellation of the Subordinated Note Indentures, the Subordinated Note Indentures shall continue in effect to the extent necessary to allow the Subordinated Note Indenture Trustee to receive the New UA Warrants on behalf of the Holders of the Subordinated Notes and make distributions pursuant to the Plan on account of the Subordinated Notes as agent for New UA. The Subordinated Note Indenture Trustee and its attorney and/or accountants, for providing services related to distributions to the Holders of Allowed Subordinated Note Claims and otherwise making a substantial contribution to these Chapter 11 Cases, shall be entitled to Administrative Claims against the Estate of the relevant Debtor for reasonable compensation for such services and reimbursement of reasonable expenses incurred in connection with such services in accordance with Section 503(b)(3)(5) of the Bankruptcy Code; provided, however, that such Trustee, attorney, and/or accountant present invoices in a timely manner to the relevant Reorganized Debtor, who must review and consent to the reasonableness of such services and expenses set forth therein. Payments on account of such Administrative Claim(s) shall be made on terms mutually acceptable to the relevant Reorganized Debtor and the Holder(s) of such Administrative Claims.

C. Delivery and Distributions and Undeliverable or Unclaimed Distributions

1. Delivery of Distributions in General

Distributions to Holders of Allowed Claims shall be made at the address of the Holder of such Claim as indicated on records of the Debtors. Except as otherwise provided by the Plan or the Bankruptcy Code, distributions shall be made in accordance with the provisions of the applicable indenture, participation agreement, loan agreement or analogous instrument or agreement, if any, and distributions will be made to any Holders of record as of the Distribution Record Date.

2. Undeliverable Distributions

(a) Holding of Undeliverable Distributions. If any Allowed Claim Holder's distribution is returned to the Reorganized Debtors as undeliverable, no further distributions shall be made to such Holder unless and until the Reorganized Debtors are notified in writing of such Holder's then−current address, such that the distribution becomes deliverable. Undeliverable distributions shall remain in the possession of the Reorganized Debtors pursuant to Article VI1.C of the Plan until such time as a distribution becomes deliverable. Undeliverable Cash shall not be entitled to any interest, dividends or other accruals of any kind.

(b) Failure to Claim Undeliverable Distributions. In an effort to ensure that all Holders of Allowed Claims receive their allocated distributions, the Reorganized Debtors shall File with the Bankruptcy Court a listing of Holders of undeliverable distributions. This list will be maintained for as long as the Chapter 11 Cases remain open. Any Holder of an Allowed Claim that does not assert a Claim pursuant to the Plan for an undeliverable distribution within five years after the Effective Date shall have his, her, or its Claim for such undeliverable distribution discharged and shall be forever barred from asserting any such Claim against the Reorganized Debtors or their property. In such cases, any Cash held for distribution on account of such Claims shall be property of the Reorganized Debtors, free of any restrictions thereon. Nothing contained in the Plan shall require the Reorganized Debtors to attempt to locate any Holder of an Allowed Claim.

(c) Compliance with Tax Requirements. In connection with the Plan, to the extent applicable, the Reorganized Debtors shall imply with all tax withholding and reporting requirements imposed on it by any government unit, and all distributions pursuant to the Plan shall be subject to such withholding and reporting requirements.

115 D. Distribution Record Date

As of the close of business on the Distribution Record Date, the transfer register for any instrument, security, or other documentation canceled pursuant to Article V.B of the Plan (including, but not limited to, the Subordinated Notes and the Common Stock of certain of the Reorganized Debtors) shall be closed and there shall be no further changes in the record Holders of any such instrument, security, or documentation. Moreover, each Reorganized Debtor shall have no obligation to recognize the transfer of any such instrument, security, or other documentation occurring after the Distribution Record Date, and shall be entitled for all purposes herein to recognize and deal only with those Holders of record as of the close of business on the Distribution Record Date.

E. Timing and Calculation of Amounts to be Distributed

Beginning on the Effective Date, the Reorganized Debtors, in their sole discretion and as frequently, soon, reasonably practicable, and efficient under the circumstances, shall make the distributions to Holders of Allowed Claims in accordance with the Plan. Beginning on the date that is the end of each calendar quarter following the Effective Date, the Reorganized Debtors, in their discretion and as frequently and reasonably practicable and efficient under the circumstances, shall also make the distributions to Holders of Disputed Claims whose Claims were allowed during the preceding calendar quarter, in accordance with the Plan.

F. De Minimis and Fractional Distributions

No Cash payment of less than five dollars ($5.00) shall be made by the Reorganized Debtors on account of any Allowed Claim, unless a specific request therefor is made in writing by the Holder of such Claim. In the event a Holder of an Allowed Claim is entitled to distribution that is not a whole dollar number, the actual payment or issuance made will reflect a rounding of such fractional portion of such distribution down or up to the nearest whole dollar, but in any case not to result in a distribution that exceeds any allowable total distribution authorized by the Plan.

G. Setoffs

Except as otherwise provided in the Plan, the Reorganized Debtors may, pursuant to Sections 502(d) or 553 of the Bankruptcy Code or applicable non−bankruptcy law, offset against any Allowed Claim, and the distributions to be made pursuant to the Plan on account of such Claim (before any distribution is made on account of such Claim), the Claims, rights, and Causes of Action of any nature that the Debtors or Reorganized Debtors may hold against the Holder of such Allowed Claim; provided, however, that (1) the failure to effect such a setoff or the allowance of any Claim hereunder shall not constitute a waiver or release by the Debtors or Reorganized Debtors of any such Claims, rights, and Causes of Action that the Debtors or Reorganized Debtors may possess against such Holder, and (2) the Debtors' or the Reorganized Debtors' failure to institute, or express or implied waiver of, any Cause of Action referenced in Section 502(d) of the Bankruptcy Code shall not constitute a waiver or release by the Debtors or Reorganized Debtors of any right of setoff.

H. Surrender of Canceled Instruments or Securities

Except as set forth in Article VII.1 of the Plan, as a condition precedent to receiving any distribution pursuant to the Plan on account of an Allowed Claim (other than a Bank Claim) evidenced by the instruments, securities or other documentation canceled pursuant to Article V.B of the Plan, the Holder of such a Claim shall tender the applicable instruments, securities or other documentation evidencing such Claim to the appropriate Reorganized Debtor. Any such instruments, securities, or other documentation to be distributed pursuant to the Plan on account of any such Claim shall,

116 pending such surrender, be treated as an undeliverable distribution pursuant to Article VI1.C of the Plan,

1. Notes

Each Holder of a Subordinated Note Claim shall tender such Notes relating to such Claim to New UA in accordance with written instructions to be provided to such Holders by New UA as promptly as practicable following the Effective Date. Such instructions shall specify that delivery of such Subordinated Notes will be effected, and risk of loss and title thereto will pass, only upon the proper delivery of such Subordinated Notes with a letter of transmittal in accordance with such instructions. All such surrendered Notes shall be marked as canceled.

2. Failure to Surrender Canceled Instruments

Any Holder of an Allowed Claim on account of any instrument, security, or other documentation canceled pursuant to Article V.B of the Plan and required to be tendered hereunder within five years after the Effective Date (including, but not limited to, the Subordinated Notes, the UA Common Stock, and the Mamaroneck Preferred Stock and Common Stock) shall have its Claim for a distribution pursuant to the Plan on account of such canceled instrument, security, or other documentation discharged and shall be forever barred from asserting any such Claim against any Reorganized Debtor or its respective property. In such cases, any property held for distribution on account of such Claim shall be disposed of pursuant to the provisions set forth above in Article VI1.C.

I. Lost, Stolen, Mutilated or Destroyed Instruments or Securities

Any Holder of an Allowed Claim on account of any instrument, security, or other documentation canceled pursuant to Article V.B of the Plan that has been lost, stolen, mutilated or destroyed, shall, in lieu of surrendering such instrument, security or other documentation: (i) deliver to the Reorganized Debtors (A) an affidavit of loss reasonably satisfactory to the Reorganized Debtors (or, in the case of a Subordinated Note, to the Subordinated Note Indenture Trustee) setting forth the unavailability of such instrument, security, or other document, and (B) such additional security or indemnity as may reasonably be required by the Reorganized Debtors to hold the Reorganized Debtors (or, in the case of the Subordinated Notes, the Subordinated Note Indenture Trustee) harmless from any damages, liabilities or costs incurred in treating such individual as a Holder of an Allowed Claim; and (ii) satisfy any other requirements under the Subordinated Note Indentures, the Prepetition Bank Credit Agreement, any article of incorporation or by−law, or any other relevant document. Upon compliance with Article VII.1 of the Plan by a Holder of a Claim evidenced by such instrument, security or other documentation, such Holder shall, for all purposes under the Plan, be deemed to have surrendered such instrument, security or other documentation.

J. Distributions to Professional Escrow Account on the Effective Date

On the Effective Date, the Reorganized Debtors shall deposit Cash into the Professional Escrow Account in an amount reasonably sufficient to pay all Accrued Professional Compensation that has accrued as of the Effective Date; provided, however, that such Cash will be used to satisfy Claims of Professionals only pursuant to further order of the Bankruptcy Court.

K. Distribution of New UA Warrants

Upon Bank of America's receipt of the New UA Warrants in accordance with Article III.C.2 of the Plan, Bank of America, on behalf of the Debt Electors, shall irrevocably quitclaim and cause to be immediately distributed such New UA Warrants to the Subordinated Note Indenture Trustee or other designated agent of the Holder of Class 1E Claims, to be distributed by said Trustee or agent on a Pro

117 Rata basis to such Holders of Allowed Class IE Claims, in consideration for the execution of the Subordinated Noteholder Lock−Up Agreements by certain of the Subordinated Noteholders holding at least 66Ya% of the total principal amount outstanding under the Subordinated Notes and in exchange for the discharge of such Holders' Claims.

ARTICLE VIII CONDITIONS PRECEDENT

A. Condition Precedent to Confirmation

It shall be a condition to Confirmation of the Plan that the following condition shall have been satisfied or waived pursuant to the provisions of Article 1X.C of the Plan:

1. the approval of all provisions, terms and conditions of " le Plan in the Confirmation Order;

2. the Restructured Bank Credit Agreement shall have been executed by all parties required to execute that Agreement; and

3. the Exit Facility shall be available to the Debtors on the terms and conditions as set forth in the Lock−Up Agreements.

B. Conditions Precedent to Consummation

It shall be a condition to Consummation of the Plan that the following conditions shall have been satisfied or waived pursuant to the provisions of Article 1X.C of the Plan:

1. the Confirmation Order shall have been signed by the Bankruptcy Court and duly entered on the docket for the Chapter 11 Case by the Clerk of the Bankruptcy Court in form and substance acceptable to the Debtor;

2. the Confirmation Order shall be a Final Order; and

3. the Exit Facility shall be available to the Debtors on the terms and conditions as set forth in the Lock−Up Agreements.

C. Waiver of Conditions

Except as otherwise required by the Lock−Up Agreements, the Debtors, in their sole discretion, may waive any of the conditions to Confirmation of the Plan and/or to Consummation of the Plan set forth in Articles 1X.A and 1X.B of the Plan (other than the condition set forth in Article IX.A.2 of the Plan that the Restructured Bank Credit Agreement must be executed by all parties required to execute that Agreement) at any time, without notice, without leave or order of the Bankruptcy Court, and without any formal action other than proceeding to confirm and/or consummate the Plan.

D. Effect of Non−Occurrence of Conditions to Consummation

If the Confirmation Order is vacated, the Plan shall be null and void in all respects and nothing contained in the Plan or the Disclosure Statement shall: (1) constitute a waiver or release of any Claims by or against, or any Equity Interests in, the Debtors; (2) prejudice in any manner the rights of the Debtors; or (3) constitute an admission, acknowledgment, offer or undertaking by the Debtors in any respect.

118 ARTICLE IX RELEASE. INJUNCTIVE AND RELATED PROVISIONS

A. Subordination

The classification and manner of satisfying all Claims and Equity Interests and the respective distributions and treatments under the Plan take into account and/or conform to the relative priority and rights of the Claims and Equity Interests in each Class in connection with any contractual, legal and equitable subordination rights, if any, relating thereto, whether arising under general principles of equitable subordination, Section S 10(b) of the Bankruptcy Code or otherwise, and any and all such rights are settled, compromised and released pursuant to the Plan. The Confirmation Order shall permanently enjoin, effective as of the Effective Date, all Persons and Entities from enforcing or attempting to enforce any such contractual, legal and equitable subordination rights satisfied, compromised and settled pursuant to Article 1X.A of the Plan.

B. Certain Mutual Releases

Except as otherwise specifically provided in the Plan, including but not limited to Article V1.E of the Plan, on and after the Effective Date, each of the Debtors, the Reorganized Debtors, their subsidiaries, their affiliates, and the Releasees, and the agents, officers, directors, partners, members, professionals, and agents of the foregoing (and the officers, directors, partners, members, professionals, and agents of each thereof), for good and valuable consideration, including, but not limited to, the commitment and obligation of the Prepetition Lender Releasees to vote for, support, and implement the Plan in accordance with the Tern: Sheet, the obligations and undertakings of the Prepetition Lenders Releasees set forth in the Restructured Bank credit Agreement, and the service of the D&O Releasees to facilitate the expeditious reorganization of the Debtors and the implementation of the restructuring contemplated by the Plan, shall automatically be deemed to have released each other unconditionally and forever from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that any of the foregoing entities would have been legally entitled to assert (in their own right, whether individually or collectively, or on behalf of the Holder of any Claim or Equity Interest or other Person or Entity), based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date, relating in any way to the Debtors, the Reorganized Debtors, the Chapter 11 Cases, the Plan, the Disclosure Statement, or any related agreements, instruments or other documents, except: (i) for Claims arising under the Plan; and (ii) for Claims arising after the Petition Date in the ordinary course of business. In furtherance of the foregoing, the Confirmation Order will constitute an injunction permanently enjoining the commencement or prosecution by any entity, whether directly, derivatively, or otherwise, of any Claim, demand, liability, obligation, debt, right, Cause of Action, interest, remedy released or to be released pursuant to the Plan against the foregoing Persons and Entities.

C. Limited Releases by Holder of Claims

On and after the Effective Date, each Holder of a Claim who has accepted the Plan, in exchange for, among other things, a distribution under the Plan, shall automatically be deemed to have released each of the Debtors, the Reorganized Debtors, their subsidiaries, their affiliates, and the Releasees, and the agents, officers, directors, partners, members, professionals, and agents of the foregoing (and the officers, directors, partners, members, professionals, and agents of each thereof), from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmanned, known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person or

119 Entity would have been legally entitled to assert (whether individually or collectively), based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date in any way relating or pertaining to the Debtors, the Reorganized "Debtors, the Chapter 11 Cases, the Plan, the Disclosure Statement, or any related agreements, instruments or other documents, m: (i) for Claims arising under the Plan; and (ii) for Claims arising after the Petition Date in the ordinary course of business. In furtherance of the foregoing, the Confirmation Order will constitute an injunction permanently enjoining the commencement or prosecution by any entity, whether directly, derivatively, or otherwise, of any Claim, demand, liability, obligation, debt, right, Cause of Action, interest, remedy released or to be released pursuant to the Plan against the foregoing Persons and Entities.

D. Preservation of Rights of Action

1. In General

The Debtors are currently investigating whether to pursue potential Causes of Action against other parties or entities. The investigation has not been completed to date, and under the Plan, the Reorganized Debtors retain all rights on behalf of the Debtors and the Post−Confirmation Estates to commence and pursue any and all Causes of Action (under any theory of law, including, without limitation, the Bankruptcy Code, and in any court or other tribunal including, without limitation, in an adversary proceeding filed in the Debtors' Chapter 11 Cases) discovered in such an investigation to the extent the Reorganized Debtors deem appropriate. Potential Causes of Action currently being investigated by the Debtors, which may but need not (if at all) be pursued by the Debtors prior to the Effective Date and by the Reorganized Debtors after the Effective Date to the extent warranted: (a) include without limitation, (i) the following potential Claims and Causes of Action set forth below (the "Causes of Action Summary") and (ii) Preference Actions; and (b) are set forth in more detail in the List of Retained Causes of Action, which is contained in the Plan Supplement:

Party Basis of Claim Party Basis of Claim Party Basis of Claim

10 Michael Drive Associates, Lease Matters M&J Wilkow, Ltd. Lease Matters Super Savers Cinema Lease Matters L.P. 280 Metro Center Lease Matters MacDade Mall, Inc. Lease Matters 1991 Heritage Plaza, L.P. Lease Matters 300 East 64th Associates, LP Commercial MacDade Mall Associates, L.P. Lease Matters 95 Fontana, LLC Lease Matters Litigation 540 Acquisition Co. LLC Lease Matters Macerich Company Lease Matters A.M. Phelan and Katherin Lease Matters 5615 Associates LLP Lease Matters Macerich Marina Lease Matters Allen theatres, Inc. Lease Matters 7272 Wisconsin Building Lease Matters Magnolia Federal Bank for Savings Lease Matters AstolatReal Estate Corporation Lease Matters Corp. ABQ Bank Lease Matters Manayunk Associates, L.P. Lease Matters Benequity Properties, Ltd. Lease Matters Acklinis Associates Lease Matters Maplewood Mall Associates L.P. Lease Matters Brookhaven Village Lease Matters Adrian Weill Lease Matters Marcene Seeker Lease Matters CBL & Associates Mgmt, Inc. Lease Matters Aegis Oxford, LLC Lease Matters Marco Quazzo, Esq. Lease Matters CCC Wayne Cinema Corp. Lease Matters Aetna Life Insurance Lease Matters Marina Holding Corp. Lease Matters Cinema Entertainment Corp. Lease Matters Company AH Warner Center Properties Lease Matters Mary Ann Kiriakides Lease Matters Connecticut General Life Insurance Lease Matters Company Alan D. Laff Esq. Stacia Bank Lease Matters Matthew K. Brown, Esq. Lease Matters Country Club Mall Asssociates Lease Matters Delaney, Esq. Limited Partnership

120 Alan B. Guttenberg, Esq. Lease Matters Maurice L. Burk, Esq. Lease Matters Dodge Investments Limited Lease Matters Partnership 8001 Alex Kiriakides, Jr. and John Lease Matters Mbank Dallas, N.A. Lease Matters Donald E. Axinn Lease Matters Kiriakedes Alfred Polizzotto Commmercial MCAVA Real Estate, Inc. Lease Matters Easte Towne Mall Company Lease Matters Litigation Allstate Life Insurance Lease Matters Mellon Mortgage Co. Lease Matters F.E.E.V.E. Limited Lease Matters Alva Partnership Lease Matters Mellon Bank, N.A. Lease Matters F.S.A. Super Saver Cinemas Lease Matters American General Life Lease Matters Merced Mall Ltd. (Codding Lease Matters Federal Realty Investment Trust Lease Matters Insurance Company Enterprises) Amerishop Thornton LLC Lease Matters Merrie Ann Myers Lease Matters First International Theatres Lease Matters Atlantic Hylan Corp. Lease Matters Mesa Denver Associates Lease Matters Foundation Holdings LLC Lease Matters B&F Sonora LLC; Cinega Lease Matters Michael P. Ribons, Esq. Lease Matters Gateway Shopping Center, Inc. Lease Matters Sonora LLC, Columbia Sonora LLC, Corteen Bakersfield Retail Cneter, Lease Matters Michael G. Prestia, Esq. Lease Matters George Baxter, Jr. Lease Matters L.L.C. BancOne Capital Markets Lease Matters Mid Island Properties Lease Matters Georgia Theatre Company—II Lease Matters Bancroft S.F. Properties Lease Matters Midtown Promenade, Ltd. Lease Matters Groton Shoppers Mall Lease Matters Bank Western, a Federal Lease Matters Monarch, Inc. Lease Matters Gulf States Theatres, Inc. Lease Matters Savings Bank Bank of America National Lease Matters Mount Hope Cemetery Associates, Lease Matters H&P Associates Lease Matters Trust & Savings Assoc. Inc. Bank of the West Lease Matters Mowry Realty Assoc. LLC Lease Matters Hammond Square JV Lease Matters Bank One, Arizona NA Lease Matters Mr. L.H. Sanford Heckinger Lease Matters Hollywood Theatres, Inc. Lease Matters Bank of America Lease Matters Mr. W.S. Richardson, Jr. Lease Matters Intergalactic Trading Company Lease Matters Bankers Trust Company Lease Matters Mrs. Yvonne S. Thomas Lease Matters Interstate Lefont Theatres Lease Matters Corporation Belle Barataria Investors, Lease Matters Lease Matters Jack Loeks Theatres, Lease Matters LLC Inc. Benesch Friedlander Copland Lease Matters Natchez Mall, LLC Lease Matters Janesville Mall Limited Partnership Lease Matters & Aronoff Berley Realty Corp. Lease Matters National City Bank, Indiana Lease Matters JATL Associates Lease Matters Binker Goes Shopping LLC Lease Matters Nations Bank, N.A. Lease Matters Julian la Craw Co. Lease Matters Bittmore Square Associates, Lease Matters Nationsbank of Texas, N.A. Lease Matters Kerasotes Theatres, Inc. Lease Matters J.V. Boatman's National Bank of Lease Matters New York Life Insurance Co. Lease Matters Key Road Associates Lease Matters St. Louis Bradley Real Estate, Inc. Lease Matters New Plan Excel Realty Trust Lease Matters Key Theatres, Inc. Lease Matters Broadmoor Hotel Lease Matters Nichols Dry Good Co. of Many, Lease Matters Kings Plaza Shopping Center Lease Matters Inc. Brookfield Colorado Inc. Lease Matters North Creek Group, Ltd. Lease Matters Kraus−Anderson Incorporated Lease Matters 121 Brookfield Properties Lease Matters O'Connor Realty Investors, L.P. Lease Matters Krupp Commercial Properties Lease Matters Colorado, Inc. Limited Partnership Brookgreen Carolina Lease Matters Okee Square Associates, Ltd. Lease Matters Lebcon Associates Lease Matters Corporation California State Teachers' Lease Matters Olympus Pointe Theatre Center Lease Matters Leon H. Charney and Jerome Lease Matters Retirement System Investors, LLC Chazen California Federal Bank Lease Matters Opus Estates, L.L.C. Lease Matters Machesney Park Associates Lease Matters Camellia Shopping Center Lease Matters ORIX USA Corporation Lease Matters McKibbon Brothers, Inc. Lease Matters Canadian Imperial Bank of Lease Matters ORIX RAM Montgomery Venture Lease Matters Midland Red Oak Realty, Inc. Lease Matters commerce, as agent for IBC, Inc. and Bank One, Colorado, N.A. Carlos A Fierro Lease Matters OTR Lease Matters Moultrie Twin Theatre Lease Matters Carolina Mall Company Lease Matters P.F. Properties LLC Lease Matters Mountain Pine Timber, Inc. Lease Matters Carolina Mall LLC Lease Matters Pacific Acquisition Coporation Lease Matters Movies, Inc. Lease Matters Carpenters Pension Trust Lease Matters Pan Pacific Development (Laguna), Lease Matters Mrs. Euna Hoye Love Lease Matters Fund Inc. CBL & Associates Lease Matters Pan Pacific Retail Properties Lease Matters Mrs. Shirley Hoye Martin Lease Matters Management, Inc. CEE Retail Realty, Inc. Lease Matters Park Meadows Business Trust Lease Matters Music City Mall, LLC Lease Matters Center West Properties, Inc. Lease Matters Park Meadows Business Trust Lease Matters Muskegon Associates Chestnut Theatre Associates, Lease Matters Paula Boyd Flynn, Mary Helen Lease Matters Muvico Entertainment L.L.C. Lease Matters L.P. Boyd Zimmerman and Lewis Campbell Boyd, Jr. Chris Town Shopping Center Lease Matters Paula Boyd Irving Lease Matters N. Jeanne Drown, Duane Stueckle Lease Matters Co., LLC and Oppenheimer Co., Inc. Christie Avenue Partners Lease Matters Peter J. Gregors, Esq. Lease Matters NAMYH Associates Lease Matters Circle Center Development Lease Matters Pima Grande Development Lease Matters North Plains Development Lease Matters Company Limited Partnership Company Citicorp Real Estate, Inc. Lease Matters Pinnacle Commercial, Inc. Lease Matters Parklane Shopping Center, Inc. Lease Matters City National Bank Lease Matters Plus Financial, Inc. Lease Matters Pickering Corporation, Inc. Lease Matters City National Bank and Mads Lease Matters PNC Bank, NA Lease Matters Pines Mall Limited Partnership Lease Matters B. Bjerre, Co−Trustees Clearview Cinemas Group, Lease Matters Princeton Market Fair Associates, Lease Matters Plains Park Center Lease Matters Inc. Ltd. Coastal American Corporation Lease Matters Princeton Market Fair Associates, Lease Matters Price−Rock Springs Company Lease Matters Ltd. Colonial Realty Limited Lease Matters Princeton/FS Realty Associates, Lease Matters Regal Cinemas, Inc. Lease Matters Partnership Ltd. 122 Colonial Properties Lease Matters Prizm Partners Lease Matters Republic Properties, Inc. Lease Matters Columbia Savings Lease Matters Prudential Insurance Company of Litigation Resolution Trust Corporation Lease Matters America Column Financial, Inc. Lease Matters Prudential Mortgage Capital Lease Matters Resources Financial Corporation Lease Matters Company, LLC Community Centers One, Lease Matters R & S Theatres, Inc. Lease Matters Rio West Partners Limited Lease Matters L.L.C. Partnership Community Centers Two, Lease Matters Ramsey D. Myatt, Esq. Lease Matters River Woods of Tampa, Ltd. Lease Matters LLC Connecticut Mutual Life Lease Matters RCK Properties, Inc. Lease Matters Roaring Fork Associates, L.L.C. Lease Matters Insurance Company Connecticut General Life Lease Matters Reed Development Assoc., Inc. Lease Matters Rosewell Mall Cinema, Inc. Lease Matters Insuance Co. Conservative Development Lease Matters Regency Centers L.P. Lease Matters Sidney Kohl Lease Matters Co. Continental Bank Lease Matters Regions Bank of Louisiana Lease Matters Simon Property Group, LP Lease Matters Cordano Associates and Lease Matters Related Mgmt. Co. LP Lease Matters Southbrook Mall Associates, L.P. Lease Matters Sunrise Mall Associate Corporate Property Investors Lease Matters Robert J. Burr, Esq. Lease Matters Star Cinema NoCAL, LLC Lease Matters Cortlandt Town Center Lease Matters Robert C. Muir Company Lease Matters StarTime Entertainment−Georgia Litigation Limited Partnership CP Venture Two LLC Lease Matters Robert D. Almquist, Esq. Lease Matters Stembler Brothers Company Lease Matters Credit Lyonnais New York Lease Matters Robin C. Kelly, Esq. Lease Matters Talisman Roswell, L.L.C. Lease Matters Branch Crestar Bank Lease Matters Roger L. Simon, Esq. Lease Matters The Equitable Life Assurance Lease Matters Society of the United States Crown American Properties, Lease Matters Roslyn Savings Bank Lease Matters Tristran Real Estate Corporation Lease Matters L.P. Daiwa Financial Corp. Lease Matters Rouse—Moorestown, Inc. Lease Matters Wal−Go Associates Lease Matters David Rosen, Successor Lease Matters RPS Realty Trust Lease Matters Washington Square Partners, Ltd. Lease Matters Trustee David L. Forney, Esq. Lease Matters Sam & Simone Spiegel d/b/a Bayou Lease Matters Wayne Preakness Associates Lease Matters Landing Shopping Center David L. Grigg, Esq. Lease Matters Santa Rosa Mall, LLC Lease Matters Westloop Center Associates Lease Matters David C. Tassell, Esq. Lease Matters Sawmill Square Associates Lease Matters Wildwood Theatres, Inc. Lease Matters David T. Thuma, Esq. Lease Matters Sawmill Square Mall Office Lease Matters Carr−Gottstein Properties, Inc. Lease Matters DDRA Community Centers Lease Matters Scranton Mall Associates Lease Matters Wallace Theatre Corporation Lease Matters Five De Bartolo Capital Lease Matters SDG Macerich Properties, L.P. Lease Matters Victoria Doulos Lease Matters Partnership Demuth & Siniawa, L.P. Lease Matters Searstown Mall LLC Lease Matters Travelers Insurance Co. Insurance Matters Denhill Denver, L.L.C. Lease Matters Shefsky Froelich & Devine Ltd. Lease Matters Adair−Green Advertising Accounts Receivable 123 Denver West Village, Inc. Lease Matters Sheldon M. Goldstein, Esq. Lease Matters Aetna US Healthcare Accounts Receivable Denver West Village Lease Matters Shore Parkway Associates Lease Matters American Express Accounts Receivable Denver Pavilions, L.P. Lease Matters Showcase Mall Joint Venture Lease Matters AMS Accounts Receivable Developers Diversified Realty Lease Matters Shows−Lassen Alexandria, a Joint Lease Matters Advanced SmithKlineBeecham Accounts Receivable Corporation Venture Developers Diversified Realty Lease Matters Sibling Realty Associates Lease Matters ARK 21 Accounts Receivable Diamond—Abelman Inc. Lease Matters Sierra Vista Mall Lease Matters Atlantic Records Accounts Receivable Don Gulf Coast L.L.C. Lease Matters Silver Springs, Inc. Lease Matters Audio Visual Resource, Inc. Accounts Receivable Dugas Partnership Lease Matters Simon Property Group, L.P. Lease Matters Azzurro Ristorante Italiano Accounts Receivable Eastern Savings Bank Lease Matters Simon Debartolo Group Lease Matters Bellagio (Mirage Resorts) Accounts Receivable Eden Prairie Center Lease Matters Simon Property Group, L.P. Lease Lease Matters Bennigans Accounts Receivable Matters Ehrman Properties LLC c/o Lease Matters Singing River Mall Lease Matters Blue Cross Blue Shield of CA Accounts Receivable Wells Fargo Bank Endurance L.P. Lease Matters Siniawa Enterprises Lease Matters BNA Accounts Receivable Equitable Life Assurance Lease Matters SKW Real Estate Limited Lease Matters Bozell Kamstra / True North Accounts Receivable Society of the United States Partnership Eric L. Goldberg, Esq. Lease Matters SLK Westbury, LLC Lease Matters Broadmoor Hotel Accounts Receivable Expressway Tower Lease Matters Society National Bank Lease Matters Buddha Records Accounts Receivable F & M Partnership Lease Matters Sonoma National Bank Lease Matters Capitol Records Accounts Receivable Family Mortgage Service Lease Matters Sonora Center Development Lease Matters CBN Accounts Receivable Corporation, No. 21 Federal Realty Investment Lease Matters South Central Oil Co., Inc. Lease Matters Century Media Accounts Receivable Trust FG Asset Management, Inc. Lease Matters Southerland Properties Lease Matters Century 21 HT Brown Accounts Receivable First National Community Lease Matters Southhold Properties, Inc. Lease Matters Ceridian Accounts Receivable Bank First Fidelity Bank, N.A., Lease Matters Southwest Shopping Center Co. Lease Matters Charter Communications Accounts Receivable New Jersey First Interstate Bank (Now Lease Matters Sterling Oxford Mall, Limited Lease Matters Chris Cooper Accounts Receivable Wells Fargo Bank) Partnership First Union Bank of North Lease Matters Street Retail Forest Hills I, LLC Lease Matters Cinema Concepts US Army/Ellis Accounts Receivable Carolina Fishing Center Realty Corp. Lease Matters Succession of Jacob Abdalla Lease Matters Cinemad/Max & Ermas Accounts Receivable Fleet National Bank of Lease Matters Sun America Life Insurance Lease Matters Cinemark Corporation Accounts Receivable Connecticut Fleet National Bank of Lease Matters Sun America Life Insurance Lease Matters CNN Cinemas Accounts Receivable Connecticut, as Corporate Indenture Trustee 124 Fleet National Bank of Lease Matters Sun America Life Insurance Lease Matters Coca−Cola USA Accounts Receivable Connecticut Franc C. Salazar, Esq. Lease Matters Sun America Life Insurance Lease Matters Columbia Records Accounts Receivable FROG Co. LLC Lease Matters Sun America Life Insurance Lease Matters Crosspoint Church @ Cary Accounts Receivable G.R. associates L.P. Lease Matters Sunrise Mall Lease Matters Crossroads Church Accounts Receivable Gadco—Gardens East Plaza, Lease Matters Susan Shirk, Property Manager Lease Matters Denver Museum of Natural History Accounts Receivable Inc. Gardens East Plaza, Ltd. Lease Matters Teachers Insurance and Annuity Lease Matters Discovery Church Accounts Receivable Association of America Gary Zentmyer Development Lease Matters Teachers Insurance & Annuity Lease Matters Eastern Federal Corporation Accounts Receivable Association of America GE Capital Corporation Lease Matters Teachers Retirement System of Lease Matters Eastside Church Accounts Receivable Texas General Electric Capital Lease Matters Terry L. Rakow, Esq. Lease Matters eDelta.com Accounts Receivable Corporation General Growth Management, Lease Matters Texas Beverly co., Inc. Lease Matters eLabor.com Accounts Receivable Inc. General Growth Properties, Lease Matters Thacher Proffitt & Wood Lease Matters EMI Music Accounts Receivable Inc. George E. Shamis Trustee Lease Matters The CONTALP LLC Lease Matters Entertainment Media Accounts Receivable under will of George J. Shamis, deceased Gerald Abraham, Agent for Lease Matters The Equitable Assurance Society of Lease Matters Epic Records Group Accounts Receivable Lily Thomas Abraham the United States GGP/Homart Inc. Lease Matters The Equitable Life Assurance Lease Matters Fuddruckers Accounts Receivable Society of the United States GMAC Commercial Mortgage Lease Matters The Equitable Life Mortgage and Lease Matters Fun Bubble Accounts Receivable Corp. Realty Golden Triangle Mall Lease Matters The Falls Shopping Center Lease Matters GE Capital Fleet Services Accounts Receivable Associates Associates Goldman Sachs & Co. Lease Matters The Prudential Insurance Company Lease Matters GEAC Accounts Receivable of America Gordon Sign Company Lease Matters The Home Savings Bank Lease Matters General Cinema Theatres Accounts Receivable GPI Theatre Properties I, LP Lease Matters The Oaks Shopping Center, L.P. Lease Matters Glaxo−Wellcome Accounts Receivable Grant Plaza Associates Lease Matters The Retail Property Trust Lease Matters Grace Valley Community Church Accounts Receivable Green Valley Commercial Lease Matters The Penn Mutual Life Insurance Lease Matters Guerra, Joseph Accounts Receivable Limited Partnership Company Gulf South Associates, Lease Matters The Equitable Life Assurance Lease Matters Gulf Coast Wireless Accounts Receivable Limited Partnership Society of the US Harold Schlanger Lease Matters The First National Bank of Boston Lease Matters Home Depot Accounts Receivable Henderson Investment Co., Lease Matters The Equitable Life Assurance Lease Matters IHOP Accounts Receivable Inc. Society of the United States 125 Henry Kibel and Anita Lease Matters The Chase Manhattan Bank Lease Matters IML Accounts Receivable Levinson Henry E. Kruman, Esq. Lease Matters The Market Place Partnership Lease Matters Interscope Records Accounts Receivable High Ridge—rand Theatres Lease Matters The Prudential Insurance Co. of Lease Matters Jackson Foundation and Family Accounts Receivable Joint America Trusts High Ridge Partners, Ltd. Lease Matters The Macerich Partnership, L.P. Lease Matters Jillian's Accounts Receivable HMF Properties Limited Lease Matters The Equitable Life Assurance Lease Matters Juneteenth Film Festival Accounts Receivable Partnership Society of the U Homart Development co. Lease Matters The Estate of James Campbell Lease Matters Lakeside Fellowship Accounts Receivable Home Federal Savings Bank Lease Matters The AETNA Casualty & Surety Lease Matters Lantern Entertainment Accounts Receivable Company Huber Properties Inc. Lease Matters The Prudential Insurance Company Lease Matters Lantern Lane Entertainment Accounts Receivable of America I−430 L.L.C. c/o Flake & Lease Matters The Equitable Life Assurance Lease Matters Mann Center for Performing Art Accounts Receivable Kelley Society of the United States I−430 L.L.C. Lease Matters The Toronto—Dominion Bank Lease Matters Marcus Cable Accounts Receivable Independence Savings Bank Lease Matters The Capital Company of America, Lease Matters MDC Holdings Accounts Receivable LLC Insignia Commercial Group, Lease Matters Thomas C. BeinLease Matters Lease Matters Media Power Advertising/Gowen Accounts Receivable Inc. Chrysler Insignia Commercial Group, Lease Matters Timothy W. Hasler, Esq. Lease Matters Media One Group Accounts Receivable Inc. International Bank of Lease Matters TKL−East LLC Lease Matters Mind Matters Seminar Accounts Receivable commerce Interstate Land Mgmt Corp. Lease Matters Today Northgate Mall, LP Lease Matters Movieland Accounts Receivable Jacob A. and Mary Ann Lease Matters Troutman Sanders Lease Matters National Seminars Accounts Receivable Abdalla Jacqueline Hoff−Sasser Lease Matters Turnpike Films, Inc. Lease Matters New Heights Christian Fellow. Accounts Receivable James F. Tierney IV Lease Matters Turtle Creek Limited Partnership Lease Matters Nortel Networks Accounts Receivable Jay F. Kamlet, Esq. Lease Matters Turtle Creek LP Lease Matters Overseas Film Goup Accounts Receivable Jeannine M. Thornson, Esq. Lease Matters Twin Peaks Mall Associates, Ltd. Lease Matters Jefferson Valley Mall Lease Matters United New Mexico at Albuquerque Lease Matters Palika Bazaar Accounts Receivable Jefferson Bank Lease Matters VESTAR Development Co. Lease Matters Park−Davis Pharmaceutical Accounts Receivable Jennifer A. Victor, Esq. Lease Matters Vice Realty Corp. Lease Matters Pro Motion Slides Accounts Receivable Jerome W. Bettman, Jr. and Lease Matters Villa Linda Mall, Ltd. Lease Matters Professional Salon Concepts Accounts Receivable Marilyn Christensen Bettman John Hancock Mutual Life Lease Matters Virginia National Bank Lease Matters Publicis Accounts Receivable Ins. Co. John F. Cahlan, Esq. Lease Matters Wachovia Bank of North Carolina, Lease Matters RCA Accounts Receivable NA 126 John W. Southerland and Lease Matters WACHOVIA Bank of Georgia, Lease Matters Research Institute of America Accounts Receivable Frankie C. Southerland Rose N.A. John W. Southerland Lease Matters Wallace Theatres Lease Matters San Francisco State University Accounts Receivable John Hancock Mutual Life Lease Matters Washington Federal Savings & Lease Matters S&A Restaurant Accounts Receivable Insurance Association Loan John M. Nolan, Esq. Lease Matters Water Tower Square Associates Lease Matters Screenvision Accounts Receivable John W. Fink, Esq. Lease Matters Wayne K. Guessford Lease Matters SFSU Accounts Receivable Jon M. Kaufman, Esq. Lease Matters Weingarten Realty Investors Lease Matters Shivan Enterprises Accounts Receivable K Mart of Pennsylvania LP Lease Matters Wells Fargo Bank, Trustee for the Lease Matters Showtime Enterprises Accounts Receivable Trust Lurie K Mart Corp. Lease Matters Wells Fargo Bank Lease Matters Showtime Networks Accounts Receivable Kaye, Scholer, Fierman, Hays Lease Matters Wells Fargo Bank National Lease Matters SmithKline Beecham c/o (ACE) Accounts Receivable & Handler Association KB Penn Realty Associates, Lease Matters Wells Fargo Real Estate Group, Inc. Lease Matters Soloman Software Accounts Receivable Inc. Kravitz Properties, Inc. Lease Matters Wells Fargo Bank, N.A. Lease Matters Sprint PCS—AZ Accounts Receivable Kristina Lackey Lease Matters West America Bank Lease Matters Sprint PCS—CA Accounts Receivable L. Rodney Chamblee Lease Matters West Brook Plaza, a partnership Lease Matters Sprint PCS—CA2 Accounts Receivable comprised of Louis Mullen, Harold Samuels Sr., Prescott A. Sherman & Ragland Watkins Lakeland Income Properties, Lease Matters West Campus Development co. Inc. Lease Matters Sprint PCS—CA3 Accounts Receivable L.L.C. Laurel A. Hartman Lease Matters Westbar Lease Matters Sprint PCS—IN Accounts Receivable Lee T. Dicker, Esq. Lease Matters Westbar Limited Partnership Lease Matters Sprint PCS—NV Accounts Receivable Lehman Brothers Holdings, Lease Matters Westgate Shopping Center Lease Matters SRA International Accounts Receivable Inc. d/b/a Lehman Capital Lehman Brother, Inc. Lease Matters Westview Mall Associates Lease Matters Starship USA Accounts Receivable Lerner Sibling Partnership Lease Matters Westview Investment L.C. Lease Matters Synygy Accounts Receivable Lernr Sibling Partnership & Lease Matters William J. Wade Lease Matters Syntel Accounts Receivable Briar Ridge Realty, LLC Levin Properties Lease Matters Wilmington Trust Company Lease Matters The Eye Clinic Accounts Receivable Levin Properties Lease Matters Woodbury Theatre, LLC Lease Matters The River Church Accounts Receivable Lincoln Plaza Associates Lease Matters WRC Properties, Inc. Lease Matters Theatre Radio Network Accounts Receivable Long Beach Marketplace, Lease Matters Yale University/Douglaston Plaza Lease Matters Time & Time Again Ent. Accounts Receivable LLC Louis E. Silver, P.C. Lease Matters US Air Force Nat'l Accounts Receivable Rauma Records Accounts Receivable 127 Amazing Space, Inc. Bankruptcy Matters Greenwhich Entertainment Group, Bankruptcy Matters University of Texas at Arlington Accounts Receivable Inc. ROTC Silver Cinemas International Bankruptcy Matters Jesse Montaya Bankruptcy Matters Val Morgan Accounts Receivable Inc. Silver Cinemas, Inc. Bankruptcy Matters NSB Film Corp., Inc. Bankruptcy Matters Virtela Communications Accounts Receivable Landmark Theatre Corp. Bankruptcy Matters Q−zar Entertainment Group, Inc. Bankruptcy Matters Wallcrafters Accounts Receivable Landmark Theatre USA, Inc. Bankruptcy Matters Sanctuary Woods Multimedia, Inc. Bankruptcy Matters Williams Conferencing Accounts Receivable Theatrix Interactive, Inc. Bankruptcy Matters Barney Skanska Construction Co. Construction Matters World Vision Church Accounts Receivable Alameda Newspapers, Inc. Class Actions Irwin Seat Co. Construction Matters Wyncom Accounts Receivable AT&T Corp. Class Actions Brintons US Axminister Construction Matters Yes! A Positive Network Accounts Receivable Hartford Accident & Class Actions Hensel Phelps Construction Construction Matters Destination Accounts Receivable Indemnity Company, et al. Hennepin County, MN Class Actions American Fixture & Design, Inc. Construction Matters Zany Brainy Accounts Receivable LASMSA Limited Partnership Class Actions CB Richard Ellis Commercial Litigation All Cinema Accounts Receivable MCI Communications Class Actions Cline Enterprise Inc Construction Matters Ace Audio Visual Accounts Receivable Corporation Motorola, Inc. Class Actions CTCM Construction Matters Life Size Entertainment Accounts Receivable National Council On Class Actions EGL, Inc. Construction Matters Marvin Films Accounts Receivable Compensation Reinsurance Pool Acadia Realty Trust Lease Matters Etkin Skanska Construction Co. Construction Matters Seventh Art Releasing Accounts Receivable American Nevada Corporation Lease Matters GMTD Corp. Construction Matters Wilson Safe Company Accounts Receivable Aranov Realty Management Lease Matters NJ Orr Construction Company LLC Construction Matters LocalNet Communications, Inc. Accounts Receivable Inc BF Amarillo LP Lease Matters OTR. Construction Matters First Run Features Accounts Receivable CBL & Associates Lease Matters Anthony Pepe and affiliated Construction Matters 300 E. 64th St. Associates, L.P. Litigation Matters companies CIN River Bridge LP Lease Matters Peny Usa Inc. Construction Matters Academy theatres, LLP Commercial Litigation Galleria at Tyler Lease Matters Pepco Construction of New York Construction Matters Amethyst, L.L.C. Litigation Matters Incorporated Gart Properties LLC Lease Matters Resource Construction Company Construction Matters Gerald B. Anderson Litigation Matters LSF Bassett LP Lease Matters Ryall Electric Supply Co. Construction Matters Arcadia Coffee Company Litigation Matters Mile—Hi Properties Lease Matters Calvin Dodson Lease Matters Block 2647, Lot 1 Associates, Commercial Litigation Related Management Lease Matters Showcase Mall Construction Matters Briar Ridge Realty Litigation Matters Company LP Simon Property Group Lease Matters Tom Hogan, Esq. Construction Matters Joseph E. Lavin Litigation Matters Simon Property Group Lease Matters Uniforms to You & Co. Construction Matters Wayne S. Bullock Litigation Matters 128 Spring Valley Improvements, Lease Matters Turnpike Films, Inc. Michael Subtenant Matters M. Reza Eslami Commercial Litigation LLC Abrams The Macerich Company Lease Matters Wehrenberg, Inc. John V. Louis Subtenant Matters Fightertown Entertainment, Inc. Litigation Matters The Rouse Company Lease Matters Unlimited Entertainment Inc. Mark Subtenant Matters Funtyme Concepts Litigation Matters Stafford, Guarantor The Rouse Company Lease Matters Cinema Partners Ltd. David M. Subtenant Matters Heyne Industries, Inc. Litigation Matters Schwartz & Yimaj A. Kadir The Torrance Company James Lease Matters Skillman Cinema, Ltd. Subtenant Matter Joseph E. Lavin Litigation Matters Jones, V.P. Westfield America Lease Matters Nevin Sledge & Andrea Long Space Tenant National Telecommunications Litigation Matters D/B/A Tribal Weaver Consultants, Inc. ("NTCI") Valerie Panteleo Space Tenant Tribal Weaver Space Tenant Petosa Brothers Litigation Matters Daniel Tomasini Space Tenant Carolyn Lee Epperson Space Tenant Efraim Shurka Litigation Matters Frank DiGennaro/Ron Space Tenant The Goldsmith Space Tenant Douglas E. Skinner Litigation Matters DiGennaro Angel Dancuart Space Tenant Hair Artistry Space Tenant SLK Westbury, LLC Litigation Matters Curtis Shepherd Space Tenant California Federal Bank Space Tenant Phyllis C. Spector Commercial Litigation Bayside Camera Jacques Space Tenant Peter Mungridis C/o Athen Space Tenant Spector of Wisconsin Commercial Litigation Adrian Asthethics Phillips Brokerage of Bayside Space Tenant Ted Yudacufski Casa Alvarado Space Tenant Spector Theatres, LLC (f/k/a Commercial Litigation Chess Center Cinescape Theatres) The Place for Posters Space Tenant Joseph R. Altieri Space Tenant Spector Theatres, LLC Commercial Litigation Bayside Little League, Inc. Space Tenant Hollywood Style Nails Space Tenant Ramon Alvarez Rodriquez Employee Litigation Brenner Travel Service Space Tenant Bijin Hair Studio Space Tenant Warrington Township, PA Litigation Matters Clark's Trading Space Tenant Hideyo Ogawa Space Tenant Katharine M. Watson Litigation Matters Andrew J. Lee Space Tenant California Federal Bank Mgr. Space Tenant Yale University Litigation Matters Golden Gate Christian Ref. Space Tenant Hedman Furniture Bill Peterson & Space Tenant City of Boulder Tax Matters Church Reverend Peter Yang P. Coy Miller DOSA Space Tenant Eller Media Company Space Tenant City of New Orleans Tax Matters CALA Foods, Inc. c/o Ralph's Space Tenant Martin's Wine Cellar Space Tenant Heskel Brandon Theatre, LLC Partnership Matters Grocery Gannett Outdoor Advertising Space Tenant KT Park Corporation Space Tenant Heskel Elias Partnership Matters Chico Carpet, Inc. Bahman Space Tenant Goldenberg Development Corp. Space Tenant Staten Theatre Group Partnership Litigation Chehrazi CCC Larchmont Cinema Space Tenant Colonial Parking, Inc. Space Tenant Staten Theatre Group II Partnership Matters Corp. Budget Flowers Space Tenant Sega Gameworks—Lakeline Space Tenant Meyer Ackerman Partnership Matters Smithtown Shoe Repair Space Tenant Dominic Gatto Commercial Litigation Brian Ackerman Partnership Matters 129 Barbara Ruvio Space Tenant Corey Greenberg Partnership Montgomery Retail Realty, Inc. Overpayment Matters Couleur Provence, Inc. Space Tenant Eden Prairie Mall, LLC Real Estate Matters Mobiliario Construction Matters Louki Enterprises, Inc. Space Tenant General Growth Properties Real Estate Matters Service Port Refrigeration Co. Billing Matters DeBaron Enterprises Space Tenant Blumenfeld Development Group, Real Estate Matters Curtis Shepherd Lease Matters Ltd. Seven Islands Restaurants Space Tenant International Cinema Accounts Receivable 160−06 LLC Overpayment Spencer Dean Funding Corp. Space Tenant Goldenberg Candy Company Rebate Matters Wehrenberg, Inc. Lease Matters Contact: Michael O'Connell Theatre Workshop Space Tenant M&M/Mars Contact: John Rebate Matters Orion Transportation Services, Inc. Billing Matters Productions Seeberger Village of Lynbrook Space Tenant Hershey "Movie Magic" Contact: Rebate Matters IMAX Property Damage Tina Lasfalk Westwood Parking Company Space Tenant Banner Candy Mfg. Corp. Contact: Rebate Matters Theo F. Cangelosi Overpayment Libby Mauro Downtown Mgmt Corp. Santa Space Tenant Clawson Hewett Brokers Contact: Rebate Matters Cineteck, Inc. Accounts Receivable Cruz Tiffany Thompson Santa Cruz Jewelers Space Tenant Nestle Food Company Contact: Rebate Matters HNQ Corporation Accounts Receivable Mike Cino Promotion in Motion Contact Jeff Rebate Matters Scudillo Star Cinema NoCal—Del Mar Space Tenant Summit Foods Contact Leslie Rebate Matters Baptist Foundation of Arizona and Lease Matters DeNino Theatre Leasing, Inc. Atitlan Trading Co. Space Tenant Ricos Contact: Skip Stefansen Rebate Matters Valley Real Estate Opportunity, Inc. Lease Matters Affiliated Paper Company Credit Claims LSC Contact: Skip Stefansen Rebate Matters AFI Overpayment Airborne Express Credit Claims Aqua Source Contact: John Thomas Rebate Matters Hicks, Muse, Tate & Furst, Inc. Breach of Contract AT Systems Credit Claims Scribner & Associates Contact: Rebate Matters Cartera/Trillium Construction Construction Matters Robert Scribner Managers, Inc. Brinks, Inc. Credit Claims Baer & Associates Contact: Mike Rebate Matters My−San Theatres Lien Matters Ware Contact Paging Credit Claims Winpak Contact: Alfie Blain Rebate Matters Kojeli, Muna Theft Copesan Credit Claims Ballpark Franks/Sara Lee Rebate Matters Texoma Cabinets, Inc. Lien Matters Galleria Credit Claims Promotional Management Group Rebate Matters EagleDirect.com Theft IBI Credit Claims Screenvision Rebate Matters United Products Overpayment Loomis Fargo Credit Claims Theatre Lobby Network Rebate Matters Protocol, LLC Accounts Receivable MovieAd Credit Claims Irwin Seating & US Fire Insurance Litigation Matters Balcor Management Services, Inc. Overpayment Co. Presto X Credit Claims Samsonite Inc. Litigation Matters California Pizza Kitchen Lease Matters United Parcel Service Credit Claims Pepco Construction Litigation Matters Crain Atlanta Prepayment 130 Waste Management Credit Claims Christie Avenue Partners JS, The Litigation Matters Double Decker Bus Company Front Failure to Perform Martin Group Range Charter Service Services Southwest Shopping Centers Lease Rejections Christopher Saxon and Bridget Litigation Matters Everbrite, Inc. Inventory Matters Co. II, LLC Champagne d/b/a The Carpet Man Berlin Scales Lease Rejections Irwin Seating & US Fire Insurance Litigation Matters Evergreen Security, Inc. Disputed Invoices Co. Theatre Leasing Inc. Lease Rejections A&H Home and Lawn Maintenance Litigation Matters Westbrook Development Company, Construction Claims Inc. Inc. Weingarten Nostat, Inc. Lease Rejections Pepco Construction Co., 453 Arlene Litigation Matters Giorgio Shellfish Corp. d/b/a Trespass Street, Staten Island NY 10314 Jordan's Lobster Dock Old Town Val Vista, LLC Lease Rejections Steven Nordseth d/b/a Fun Litigation Matters Goertzens Lawn Service Unwanted Services M. C. Strauss Company dba Lease Rejections Trammel Crow DFW Ltd., Litigation Matters Hall Construction Construction Claims Val Vista Crossing Excel Realty Partners, LP Lease Rejections Christie Avenue Partners JS, The Litigation Matters Hoyts Cinema Litigation Matters Martin Group Amado−San Vicente, Ltd. Lease Rejections Harvey Lindsay Commercial Real Lease Rejection Industrial Cooling Services Rendered Estate The Retail Property Trust Lease Rejections Valley Forge Center Associates; Lease Rejection Los Angeles County Assessor Tax Matters King of Prussia State of California Public Lease Rejections Louis Law Family Trust Lease Rejection Penn Real Estate Group Tax Matters Employees' Retirement System WinShip Properties Yvette Lease Rejections Simon Property Group L.P. Lease Rejection Universal Bonding Reimburse−ment DeGuero Thomas F. Hinds Lease Rejections Anderson Mall Lease Rejection Weisman Enterprises, Inc. D/b/a Accounts Receivable Best Vendors Burnham Pacific AAF BPP Lease Rejections Holiday/Cinema, LLC Lease Rejection Cinema Partners Ltd. Lease Rejection Retail, LLC BPP Retail, LLC. Granada Lease Rejections Lend Lease Real Estate Investments Lease Rejection Spring Valley Improvements, LLC Lease Rejection Tarrytown PALS Associates Lease Rejections BF Amarillo, L.P. d/b/a Westgate Lease Rejection Sunrise Mall Associates Lease Rejection Mall Lendlease AAF Fund B/Westgate Mall OTR Lease Rejections Regal Cinema, Inc. Lease Rejection Freedom Properties L.P. Lease Rejection Codding Enterprises Lease Rejections Roy M. Smith and W.M. Bevly Lease Rejection Stoltz Management of Delaware, Lease Rejection Inc., Agent for Freedom Properties, Inc. Glasshouse Square Shopping Lease Rejection The Estate of Charles C.Y. Cheng Lease Rejection Estate of Fannie E. Harrison, Lease Rejection Center Deceased Deceased c/o Metropolitan Management Group 131 F.C. Pavilion, LLC Lease Rejection Jim J. Anchustegui Lease Rejection Bradley I. Dorn Metropolitan Lease Rejection Management Corporation Executive Director San Jose Failure to Mitigate Advanced Entertainment Concepts, Lease Rejection Dondel Associates Lease Rejection Redevelopment Agency Inc. San Jose Redevelopment Lease Rejection MWBC, Inc. d/b/a Q−ZAR Lease Rejection Briarwood Lease Rejection Agency Carson−Madrona Co. Lease Rejection Bryson Properties XII Lease Rejection Twelve Oaks Mall Limited Lease Rejection Partnership The Torrance Company Lease Rejection LSF Bassett LP Lease Rejection Oakland Mall, Ltd. Lease Rejection Meadows Center Association Lease Rejection Driftwood Village Shopping Center Lease Rejection Corporate Property Investors Lease Rejection IC Theatre Limited Liability Lease Rejection Texas Properties, Inc. Lease Rejection Sowashee Venture Lease Rejection Company Academy Station Limited Lease Rejection 60 West Corporation Lease Rejection Village Square Limited Partnership Lease Rejection Liability Company Matmar Fort Collins Lease Rejection June B. Lecka Lease Rejection Betty Choate Matthews Lease Rejection Partnership Rouse−Park Meadows, LLC Lease Rejection Star Time Entertainment—Georgia, Litigation Matters York Properties Inc. Lease Rejection LLC Blackfox Real Estate Group, Lease Rejection Star Time Cinemas, Inc. Litigation Matters John R. Darnavandi Lease Rejection LLC Blackfox Parkway Lease Rejection Mayer Mitchell et al d/b/a Lease Rejection Philip Meadow Herbert Meadow Lease Rejection Associations, LLC New Plan Excel Realty Trust, Lease Rejection Sterik Company Lease Rejection Muvico Entertainment LLC Muvico Lease Rejection Inc. Theatres, Inc. Daniel S. Dornfield, Esq. New Lease Rejection Eastlake Plaza Associates Lease Rejection Equity (Landing) Inc. Lease Rejection Plan Excel Realty Trust, Inc. P & H Associates Lease Rejection Bernhardt C. Heebe, A. Louis Lease Rejection Broward Associates Lease Rejection Sizeler, margery Alaynick Kirshman and Victor F. Kirshman Kranzco Realty Trust Lease Rejection Market Place Commercial Limited Lease Rejection Alec P. Courtelis and Donald Lease Rejection Partnership Smith, Jr. d/b/a Movies Inc. Interstate Connecticut Corp. Lease Rejection Golden Ring Mall Company Lease Rejection K−Mart Corporation Lease Rejection Limited Partnership General Electric Capital Lease Rejection Jeffrey M. Clifton Lease Rejection CIN Riverbridge, L.P. David Lease Rejection Corporation Siegel, Property Manager Gumberg Asset Management Corp., agent F.S.A. Super Saver Cinemas Lease Rejection Talisman Roswell, LLC Lease Rejection Regency Centers, L.P. Lease Rejection Connie Arnold ADA Claim Jacqueline Kehl ADA Claim Ann Cupolo ADA Claim Bruce Silverstein Commercial Litigation Nancy Ferreya ADA Claim Elizabeth Twaddel ADA Claim 132 Donna Taliento Commercial Litigation Guy Thomas ADA Claim Valerie Vivona ADA Claim Domenic Gatto Litigation Matters Ana Berlowitz ADA Claim Ralph Boemio ADA Claim Janet and Warren Tocci, Jr. Commercial Litigation Howard Ripley ADA Claim Cinde Soto ADA Claim Dallas S. Hudgens, III Lease Rejection 680 Cinemas Corp. Commercial Litigation Juliana Cyril ADA Claim Bernbard Goldberg Lease Matters Capability Marble & Granite, Inc. Commercial Litigation Reliance National Indemnity Co. Commercial Litigation VAL Floors, Inc. Commercial Litigation Janet and Warren Tocci, Jr. Litigation Matters Hoboken Wood Flooring Commercial Litigation Corporation Lehrer McGovern Bovis Lease Matters Leads Painting & Decorating Corp. Lease Matters Stone Systems, Inc. Litigation Matters Par Plumbing Co., Inc. Lease Matters Westdeutsche Immoolienbank Lease Matters Martin Schlanger Lease Matters Harold Schlanger Lease MattersAndre CB Richard Ellis Litigation Matters Drexler Technology Corporation Commercial Litigation ESI Ergonomic Solutions Commercial Litigation General Cinema Theatres Inc. Lease Matters Tristar Pictures, Lease Matters Cinemark USA Inc. Commercial Litigation American Multi−Cinema Inc. Commercial Litigation Loews Cineplex Entertainment Commercial Litigation Corp. Larry McGaha Commercial Litigation P.A. Properties Commercial Litigation Budd Schwabb Commercial Litigation Showscan Entertainment, Inc. Commercial Litigation Barney Skanska USA Commercial Litigation First Sterling Corp Commercial Litigation West Realty Commercial Litigation 14th Street Associates Commercial Litigation Natasi White Commercial Litigation Empire City Ironworks & Building Commercial Litigation Cardella Trucking Co. Lease Matters Specialists, Corp. Pro Spec Interiors Lease Matters Jerry Clark Employee Litigation Max Pedraz Rolon Employee Litigation Andre Rodriquez−Vasquez Employee Litigation 1033 3rd Street Corp Lease Matters Aircadia Investment Corp. Lease Matters Philip Rapa Lease Matters Blackfox Parkway Associates Lease Matters Cinema 8 Lease Matters John Damavandi Lease Matters CIN Riverbridge Lease Matters Debartain Capital Partnership Lease Matters East Lake Plaza Associates Lease Matters Horton Plaza LLC Lease Matters David Law Lease Matters Hermine Law Lease Matters Craig V. Russell Lease Matters Nick Studen Lease Matters Village Aurora Lease Matters G.S. York Lease Matters York Family Property Lease Matters BFI Waste System Overbilling Angela Mangam Litigation Matters Carribean Cinemas Employee Matters John DePietro Lease Matters Terek Fermantez Employee Matters Green Associates Employee Matters Nichols Sanitation Overbilling Julie Reisken Employee Matters Robin Stephens Employee Matters Laura Hershey Lease Matters Brent Ellingson Employee Matters Tommy English Employee Matters Steven Gowdy Lease Matters Aimee Guzmsarn−Maldanado Employee Matters Glenda Johnson Employee Matters Kevin King Lease Matters 133 In addition, potential Causes of Action which may be pursued by the Debtors prior to the Effective Date and by the Reorganized Debtors after the Effective Date, also include, without limitation the following:

Any other Causes of Action, whether legal, equitable or statutory in nature, arising out of, or in connection with the Debtor's businesses or operations, including, without limitation, the following: possible claims against vendors, landlords, subleasees, assignees, customers or suppliers for warranty, indemnity, back charge/set−off issues, overpayment or duplicate payment issues and collections/accounts receivables matters; deposits or other amounts owed by any creditor, lessor, utility, supplier, vendor, landlord, sublease, assignee, or other entity; employee, management or operational matters, claims, against landlords, subleasees and assignees arising from the various leases, subleases and assignment agreements relating thereto, including, without limitation, claims for overcharges relating to taxes, common area maintenance and other similar charges; financial reporting; environmental, and product liability matters; actions against insurance carriers relating to coverage, indemnity or other matters; counterclaims and defenses relating to notes or other obligations; contract or tort claims which may exist or subsequently arise; and

Except for certain Debtors who have expressly waived certain claims, any and all avoidance claims (including, without limitation, Preference Actions) pursuant to any applicable section ofthe Bankruptcy Code, including, without limitation Sections 544, 545, 547, 548, 549, 550, 551, 553(b) and/or 724(a) of the Bankruptcy Code, arising from any transaction involving or concerning the Debtors.

In addition, there may be numerous other Causes of Action which currently exist or may subsequently arise that are not set forth herein, in the Cause of Action Summary or in the List of Retained Causes of Action, because the facts upon which such Causes of Action are based are not currently or fully known by the Debtors and, as a result, can not be raised during the pendency of the Chapter 11 Cases (collectively, the "Unknown Causes of Action"). The failure to list any such Unknown Cause of Action herein, or in the Cause of Action Summary or the List of Retained Causes of Action, is not intended to limit the rights of the Reorganized Debtors to pursue any Unknown Cause of Action to the extent the facts underlying such Unknown Cause of Action subsequently become fully known to the Debtors.

The potential net proceeds from the Causes of Action identified herein, in the Causes of Action Summary and the List of Retained Causes of Action, or which may subsequently arise or be pursued, are speculative and uncertain and therefore no value has been assigned to such recoveries. The Debtors and the Reorganized Debtors do not intend, and it should not be assumed that because any existing or potential Causes of Action have not yet been pursued by the Debtors or are not set forth herein, whether in the Causes of Action Summary or the List of Retained Causes of Action, that any such Causes of Action have been waived.

Unless Causes of Action against a Person or entity are expressly waived, relinquished, released, compromised or settled in the Plan or any Final Order, the Debtors expressly reserve all Causes of Action and Unknown Causes of Action, including the Causes of Action described herein and in the Causes of Action Summary and the List of Retained Causes of Action, as well as any other Causes of Action or Unknown Causes ofAction, for later adjudication and therefore, no preclusion doctrine, including, without limitation, the doctrines ofres judicata, collateral estoppel, issue preclusion, claimpreclusion, estoppel (judicial, equitable or otherwise) or lathes shall apply to such Causes of Action upon or after the confirmation or consumma tion of the Plan. In addition, the Debtors expressly reserve the right to pursue or adopt any claims alleged in any lawsuit in which the Debtors are a defendant or an interested party, including the lawsuits described in Article XI1.D of the Disclosure

134 Statement, against any Person, including, without limitation, the plaintiffs and co−defendants in such lawsuits.

Except as otherwise provided in the Plan or in any contract, instrument, release, indenture or other agreement entered into in connection with the Plan, in accordance with Section 1123(b)(3) of the Bankruptcy Code, any Claims, rights, and Causes of Action that the respective Debtors, Estates, or Post−Confirmation Estates may hold against any Person or Entity, including but not limited to those Causes of Action listed in Article 1X.D of the Disclosure Statement, shall vest in the Reorganized Debtors, and the Reorganized Debtors shall retain and may exclusively enforce, as the authorized representatives of the respective Estates and Post−Confirmation Estates, any and all such Claims, rights, or Causes ofAction. Except as otherwise provided in the Trade Subcommittee Term Sheet (including, without limitation, the carveouts for potential Preference Actions against certain entities described in such Term Sheet), the Reorganized Debtors (a) may pursue any and all such Claims rights, or Causes of Action, as appropriate, in accordance with the best interests of the Reorganized Debtors, and (b) shall have the exclusive right, authority, and discretion to institute, prosecute, abandon, settle, or compromise any and all such Claims, rights, and Causes of Action without the consent or approval of any third party and without any further order of court.

2. Intercompany Claims

On the Effective Date, and to the extent not otherwise modified pursuant to a corporate transaction set forth in Article V of the Plan, each Reorganized Debtor shall retain all rights and obligations relating to all Intercompany Claims that it may have against any direct or indirect wholly−

135 owned or less than wholly owned subsidiary of UA as follows, Such Intercompany Claims, as of the Petition Date, are approximately as follows:

INTERCOMPANY CLAIMS OWED TO OR FROM UATC AS OF PETITION DATE

UA Direct/Indirect Subsidiary Claim Owed to UATC Claim Owed by UATC

United Artists Theatre Company $ 1,111,744.60 Tallthe, Inc. $ 833,823.15 R and S Theatres, Inc. $ 1,204,267.52 United Film Distribution Company of South America $ 94.35 United Artists Properties I Corp. $ 43,675,626.32 United Artists Realty Company $ 12,037,255.05 UAB II, Inc. $ 1,597,879.44 United Artists International Management Company $ 54,745.51 Stalen Theatre Group II $ 523,966.94 United Stonestown Corporation $ 6,503.93 Staten Theme Group $ 1,431,930.55 UATC/Heskel Brandon Theatre LLC $ 658,453.77 UAGG Theatres Operatina Corp. $ 85,823.46 Magnolia Amusement Company $ 34,218.46 RAM−UA/KOP, LLC $ 13,509.28 Olympus Pointe Theatre Centre Investors, LLC $ 12,763.97 Multimatic Displays, Inc. $ 9,879.95 Showscan/United Artists Theatres Joint Venture $ 669.25 TOTAL INTERCOMPANY CLAIMS OWED TO UATC $ 63,293,164.96 Beth Page Theatre Company $ 170,507.45 King Reavis Amusement Company $ 234,091.98 Mamaroneck Playhouse Holding Company $ 3,588,259.47 San Francisco Theatres, Inc. $ 1,943,278.74 U.A.P.R., Inc. $ 1,747,455.63 UA International Property Holding, Inc. $ 359,843.82 United Artists Properties II Corp. $ 1,080.494.35 UAB, Inc. $ 698,240.97 UA Property Holding II, Inc. $ 7,280,451.81 Trumball Theatre Corp. $ 20,255.28 UA Intematmnal Hong Kong $ 8,299,440.79 UATC Europe BV $ 17,355.73 Vogue Realy Company $ 738,510.19 Rio Rich Theatres $ 5,460.83 TOTAL CLAIMS OWED BY UATC $ 25,183,647.04 NET TOTAL CLAIMS OWED TO UATC $ 37,109,517.92

The Debtors have been informed that the Working Group, ENIC, and Holders of Equity Interests in UA have agreed that, pursuant and subject to the specific terms of definitive documentation to be delivered on or before the Effective Date, on the Effective Date Bank of America will pay the $l,OOO,OOO Working Group Fee that it previously had been holding in trust for the benefit of the Working Group and ENIC as referenced in Article I.D.2 ofthe Disclosure Statement to a designated agent for the Holders of Allowed Class 1F Equity Interests to be distributed by said agent on a Pro Rata basis in exchange for a covenant not to sue certain third parties on certain causes of action related to the Debtors' business activities prior to the Petition Date.

136 E. Exculpation

The Debtors, the Reorganized Debtors, their subsidiaries, the Releasees, the Committee(s), and their members and Professionals (acting in such capacity) shall neither have nor incur any liability to any Person or Entity for any act taken or omitted to be taken in connection with or related to the formulation, preparation, dissemination, implementation, administration, Confirmation or Consummation of the Plan, the Disclosure Statement or any contract, instrument, release or other agreement or document created or entered into in connection with the Plan, including the Lock−Up Agreements, or any other act taken or omitted to be taken in connection with the Chapter 11 Cases; provided, however, that the foregoing provisions of Article X.E of the Plan shall have no effect on the liability of any Person or Entity that results from any such act or omission that is determined in a Final Order to have constituted gross negligence or willful misconduct.

F. Injunction

From and after the Effective Date, all Persons and Entities are permanently enjoined from commencing or continuing in any manner, any suit, action or other proceeding, on account of or respecting any Claim, demand, liability, obligation, debt, right, Cause of Action, interest, remedy released or to be released pursuant to Article X of the Plan.

ARTICLE X RETENTION OF JURISDICTION

Notwithstanding the entry ofthe Confirmation Order and the occurrence ofthe Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Cases after the Effective Date as is legally permissible, including jurisdiction to:

A. allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim, including the resolution of any request for payment of any Administrative Claim and the resolution of any and all objections to the allowance or priority of Claims;

B. grant or deny any applications for allowance of compensation or reimbursement of expenses authorized pursuant to the Bankruptcy Code or the Plan, for periods ending on or before the Confiition Date;

C. resolve any matters related to the assumption, assumption and assignment, or rejection of any executory contract or unexpired lease to which the Debtors are parties or with respect to which the Debtors may be liable and to hear, determine and, if necessary, liquidate any Claims arising therefrom, including all matters related to amendments to the Statement of Contracts and Leases after the Effective Date pursuant to Article VI of the Plan to add or remove any executory contracts or unexpired leases to the list of executory contracts and unexpired leases to be rejected;

D. ensure that distributions to Holders of Allowed Claims are accomplished pursuant to the provisions of the Plan, including without limitation ruling on any motion Filed pursuant to Article VII of the Plan and resolving any disputes concerning any distributions contemplated in or relating to Article VI1.K ofthe Plan;

E. decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications involving the Debtors that may be pending on the Effective Date;

137 F. enter such orders as may be necessary or appropriate to implement or consummate the provisions of the Plan and all contracts, instruments, releases, indentures and other agreements or documents created in connection with the Plan or the Disclosure Statement;

G. resolve any cases, controversies, suits or disputes that may arise in connection with the Consummation, interpretation or enforcement of the Plan or any Person's or Entity's obligations incurred in connection with the Plan (other than a case, controversy, suit or dispute relating solely to the interpretation or enforcement of Restructured Bank Credit Agreement and not in any way relating to the Plan).

H. issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any Person or Entity with Consummation or enforcement of the Plan, except as otherwise provided herein;

I. resolve any cases, controversies, suits or disputes with respect to the releases, injunction and other provisions contained in Article X of the Plan and enter such orders as may be necessary or appropriate to implement such releases, injunction and other provisions;

J. enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked or vacated;

K. determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement; and

L. enter an order and/or final decree concluding the Chapter 11 Cases

ARTICLE Xl PROCESS OF VOTING AND CONFIRMATION

The following is a brief summary regarding the acceptance and Confirmation of the Plan. Holders of Claims and Equity Interests are encouraged to review the relevant provisions of the Bankruptcy Code and/or to consult their own attorneys. Additional information regarding voting procedures is set forth in the Notice accompanying this Disclosure Statement.

A. Voting Instructions

This Disclosure Statement, accompanied by a Ballot to be used for voting on the Plan, is being distributed to Holders of Claims in Classes lB, 2B, 2D, 2F, 3B, 3E, 4B, 4E, 5B, 5E, 6D, 7D, 8D, 9D, lOD, 11D, 12D, 13D, 14D, I5D, 16D, and 18D. Only such Holders are entitled to vote to accept or reject the Plan and may do so by completing the Ballot and returning it to the Information Agent. In light of the benefits to be attained by the Plan on behalf of each Class of Claims, the Debtors recommend that Holders of Claims in each of the Impaired Classes vote to accept the Plan and return the Ballot.

BALLOTS MUST BE RECEIVED BY THE INFORMATION AGENT, BANKRUPTCY SERVICES, LLC ("BSI"), HERON TOWER, 70 EAST 55TH STREET, 6TH FLOOR, NEW YORK, NEW YORK 10022, ATTENTION: DIANE ROCANO, ON OR BEFORE 4:00 P.M., PREVAILING EASTERN TIME, ON JANUARY 12, 2001 (THE "VOTING DEADLINE"). ANY BALLOT RECEIVED AFTER THAT TIME MAY NOT BE COUNTED. ANY BALLOT WHICH IS EXECUTED BY THE HOLDER OF AN ALLOWED CLAIM OR EQUITY INTEREST BUT WHICH DOES NOT INDICATE AN ACCEPTANCE OR REJECTION OF THE PLAN SHALL BE DEEMED AN ACCEPTANCE OF THE PLAN.

138 B. Voting Tabulation

In tabulating votes, the following hierarchy shall be used to determine the Claim amount associated with a creditors vote: (1) the Claim amount established by Court order; (2) the Claim amount contained on an unobjected to proof of Claim, (3) the Claim amount contained on an unobjected to Ballot; (4) the Claim amount listed in the Debtors' schedules; and (5) in the absence of any of the foregoing, zero. The Claim amount established through this process controls for voting purposes only and does not constitute the Allowed amount of any Claim. Further, the designation of a Claim as disputed, contingent or unliquidated on the Debtors' schedules will not be used to disqualify any vote.

To ensure that a vote is counted, a Claim Holder must (i) complete a Ballot, (ii) indicate the Holder's decision either to accept or reject the Plan in the boxes provided in Item No. 3 of the Ballot, and (iii) sign and return the Ballot to the address set forth on the enclosed prepaid envelope.

The Ballot is not a letter of transmittal and may not be used for any purpose other than to vote to accept or reject the Plan and to determine the alleged amount of a beneficial Holder's Claim. Accordingly, at the time the Ballot is transmitted, creditors should not surrender certificates, instruments, or other documents representing or evidencing their Claims, and neither the Debtors nor the Solicitation Agent will accept delivery of such certificates or instruments surrendered together with a Ballot. The remittance of notes or other evidence of Claims for exchange pursuant to the Plan may only be made by a Holder and will not be accepted if certificates or instruments representing Claims (in proper form for transfer) are delivered together with a letter of transmittal thai will be furnished to as provided under the Plan or as notified following Confirmation of the Plan by the Bankruptcy Court.

The Ballot does not constitute, and shall not be deemed to be, a Proof of Claim or Equity Interest or an assertion or admission of a Claim or Equity Interest. If a creditor casts a Ballot and (a) the creditor has not timely filed a proof of Claim (or has otherwise had such a proof of Claim deemed timely filed by the Court under applicable law) and is listed on the Debtors' schedules of liabilities as holding a Claim that is contingent, unliquidated or disputed or (b) the creditor has filed a proof of Claim and the entirety of the creditor's Claim is the subject of an objection to said Claim filed before the commencement of the Confirmation hearing, said creditor's Ballot shall not be counted in accordance with Bankruptcy Rule 3018, unless temporarily allowed by the Court for voting purposes, pursuant to Bankruptcy Rule 3018(a), after notice and a hearing prior to the Voting Deadline. Ballots cast by creditors whose Claims are not listed on the Debtors' schedules of liabilities, but who timely file proofs of Claim in unliquidated or unknown amounts that are not the subject of an objection filed before the commencement of the Confirmation hearing, will count for satisfying the numerosity requirement of section 1126(c) of the Bankruptcy Code, but will not count toward satisfying the aggregate dollar amount provisions of that section. If the Debtors file an objection to a proof of Claim after the Voting Deadline, such Claim shall not count for voting purposes, unless temporarily allowed by the Court for voting purposes pursuant to Bankruptcy Rule 3018(a) after notice and a hearing.

If a Holder holds Claims in more than one Class under the Plan, the Holder may receive more than one Ballot coded for each Ballot received.

Except to the extent the Debtors so determine or as permitted by the Bankruptcy Court, Ballots received after the Voting Deadline will not be accepted or counted by the Debtors in connection with the Debtors' request for Confirmation of the Plan. The method of delivery of Ballots to be sent to the Solicitation Agent is at the election and risk of each Holder of a Claim. Except as otherwise provided herein, such delivery will be deemed made only when the original executed Ballot is actually received by the Solicitation Agent. Instead of effecting delivery by mail, it is recommended, though not required, that such Holders use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. Delivery of a Ballot by facsimile, e−mail or any other electronic means will not be accepted. No Ballot should be sent to any of the Debtors, any indenture trustee, or

139 the Debtors' financial or legal advisors. The Debtors expressly reserve the right to amend, at any time and from time to time, the terms of the Plan (subject to compliance with the requirements of Section 1127 of the Bankruptcy Code). If the Debtors make a material change in the terms of the Plan or if the Debtors waive a material condition, the Debtors will disseminate additional solicitation materials and will extend the solicitation, in each case to the extent required by law.

If multiple Ballots are received from an individual Holder of Claims with respect to the same Claims prior to the Expiration Date, the last Ballot timely received will supersede and revoke any earlier received Ballot. Creditors must vote all of their Claims or equity interests within a particular Plan class either to accept or reject the Plan and may not split their vote. Accordingly, a ballot that partially rejects and partially accepts the Plan will not be counted.

If a Ballot is signed by trustees, executors, administrators, guardians, attorneys−in−fact, officers of corporations, or others acting in a fiduciary or representative capacity, such persons should indicate such capacity when signing and, unless otherwise determined by the Debtors, must submit proper evidence satisfactory to the Debtors to so act on behalf of a beneficial interest Holder.

In the event a designation is requested under Section 1126(e)of the Bankruptcy Code, any vote to accept or reject the Plan cast with respect to such Claim will not be counted for purposes of determining whether the Plan has been accepted or rejected, unless the Bankruptcy Court orders otherwise.

Any Holder of an Impaired Claim who has delivered a valid Ballot voting on the Plan may withdraw such vote solely in accordance with Rule 3018(a) of the Federal Rules of Bankruptcy Procedure.

Subject to any contrary order of the Bankruptcy Court, the Debtors reserve the absolute right to reject any and all Ballots not proper in form the acceptance of which would, in the opinion of the Debtors or their counsel, not be in accordance with the provisions of the Bankruptcy Code. Subject to contrary order of the Bankruptcy Court, the Debtors further reserve the right to waive any defects or irregularities or conditions of delivery as to any particular Ballot unless otherwise directed by the Bankruptcy Court. The Debtors' interpretation of the terms and conditions of the Plan (including the Ballot and the Voting Instructions), unless otherwise directed by the Bankruptcy Court, shall be final and binding on all parties. Unless waived or as ordered by the Bankruptcy Court, any defects or irregularities in connection with deliveries of Ballots must be cured within such time as the Debtors (or the Bankruptcy Court) determine. Neither the Debtors nor any other person or entity will be under any duty to provide notification of defects or irregularities with respect to deliveries of Ballots nor will any of them incur any liabilities for failure to provide such notification. Unless otherwise directed by the Bankruptcy Court, delivery of such Ballots will not be deemed to have been made until such irregularities have been cured or waived. Ballots previously furnished (and as to which any irregularities have not theretofore been cured or waived) will not be counted.

C. Confirmation Hearing

Section 1128(a) of the Bankruptcy Code requires the Bankruptcy Court, after notice, to hold a hearing on Confirmation of the Plan (the "Confirmation Hearing"). Section 1128(b) of the Bankruptcy Code provides that any party−in−interest may object to Confirmation of the Plan. The Bankruptcy Court has scheduled the Confirmation Hearing for January 22, 2001, before the Honorable Sue L. Robinson, United States Bankruptcy Judge, in the room normally occupied by the Bankruptcy Judge in the United States Bankruptcy Court for the District of Delaware, Marine Midland Plaza, 824 Market Street, Wilmington, Delaware 19801. The Confirmation Hearing may be adjourned from time to time by the Bankruptcy Court without further notice except for an announcement of the adjourned date made at the Confirmation Hearing or any adjournment thereof.

140 Objections to Confirmation of the Plan must be Filed and served on(i) the Debtors (c/o James H.M. Sprayregen and James W. Kapp III at Kirkhand &Ellis, 200 East Randolph, Chicago, Illinois 60601), (ii) Bank of America (c/o Robert Morrison at Pillsbury Madison & Sutro LLP, 725 S. Figueroa Street, Suite 1200, Los Angeles, California 90017 and Scott D. Cousins at Greenberg Traurig, LLP, One Commerce Center, 1201 North Orange Street, Wilmington, Delaware 1980 l), (iii) Van Kampen (c/o Richard Smolev at Hopkins & Sutter, Three First National Plaza, Chicago, Illinois 60602, (iv) Morgens, Waterfall (c/o Brian Trust at Duval & Stachenfeld LLP, 300 East 42nd Street, New York, New York 10017), and(v) the United States Securities and Exchange Commission (c/o Jolene M. Wise, Esq., Midwest Regional Office, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661), or before January 12,2001, in accordance with the Notice accompanying this Disclosure Statement. Unless objections to Confirmation are timely served and filed in compliance with the Bankruptcy Court's order approving the Disclosure Statement, they will not be considered by the Bankruptcy Court.

D. Statutory Requirements for Confirmation of the Plan

1. Generally

At the Confirmation Hearing, the Bankruptcy Court shall determine whether the requirements of Section 1129 of the Bankruptcy Court have been satisfied. If so, the Bankruptcy Court shall enter the Confirmation Order. The Debtors believe that the Plan satisfies or will satisfy the applicable requirements, as follows:

a. The Plan complies with the applicable provisions of the Bankruptcy Code.

b. The Debtors, as Plan proponents, will have complied with the applicable provisions of the Bankruptcy Code.

c. The Plan has been proposed in good faith and not by any means forbidden by law.

d. Any payment made or promised under the Plan for services or for costs and expenses in, or in connection with, this Bankruptcy Case, or in connection with the Plan and incident to the case, has been disclosed to the Bankruptcy Court, and any such payment made before the Confirmation of the Plan is reasonable, or if such payment is to be fixed after the Confirmation of the Plan, such payment is subject to the approval of the Bankruptcy Court as reasonable.

e. With respect to each Class of Impaired Claims or Equity Interests, either each Holder of a Claim or Equity Interest of such Class has accepted the Plan, or will receive or retain under the Plan on account of such Claim or Equity Interest, property of a value, as of the Effective Date of the Plan, that is not less than the amount that such Holder would receive or retain if the Debtors were liquidated on such date under Chapter 7 of the:Bankruptcy Code.

f. Each Class of Claims or Equity Interests that is entitled to vote on the Plan has either accepted the Plan or is not impaired under the Plan.

g. Except to the extent that the Holder of a particular Claim will agree to a different treatment of such Claim, the Plan provides that Allowed Administrative, Allowed Priority Tax Claims and Allowed Other Priority Claims will be paid in full on the Effective Date, or as soon thereafter as practicable.

h. At least one Class of Impaired Claims or Equity Interests will accept the Plan, determined without including any acceptance of the Plan by any insider holding a Claim of such Class.

i. Confirmation of the Plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the Debtors or any successor to the Debtors under the Plan, unless such liquidation or reorganization is proposed in the Plan.

141 j. All fees of the type described in 28 USC. 5 1930, including the fees of the United States Trustee will be paid as of the Effective Date.

The Debtors believe that (a) the Plan satisfies or will satisfy all of the statutory requirements of Chapter 11 of the Bankruptcy Code; (b) it has complied or will have complied with all of the requirements of Chapter 11; and (c) the Plan has been proposed in good faith

2. Best Interests of Creditors Test/Liquidation Analysis

Before the Plan may be confirmed, the Bankruptcy Court must find (with certain exceptions) that the Plan provides, with respect to each Class, that each Holder of a Claim or Equity Interest in such Class either (a) has accepted the Plan or(b) will receive or retain under the Plan property of a value, as of the Effective Date, that is not less than the amount that such person would receive or retain if the Debtors liquidated under Chapter 7 of the Bankruptcy Code.

In Chapter 7 cases, unsecured creditors and interest holders of a debtor are paid from available assets generally in the following order, with no lower class receiving any payments until all amounts due to senior classes have been paid fully or payment provided for: (a) secured creditors (to the extent of the value of their collateral); (b) priority creditors; (c) unsecured creditors; (d) debt expressly subordinated by its terms or by order of the bankruptcy court; and (e) equity interest holders.

As described in more detail in the Liquidation Analysis in Article 1II.A of the Disclosure Statement, the Debtors believe that the value of any distributions in a Chapter 7 case would be equal or less than the going−concern value of distributions under the Plan. In addition, such distributions in a Chapter 7 case may not occur for a longer period of time thereby reducing the present value of such distributions. In this regard, it is possible that distribution of the proceeds of a liquidation could be delayed for a period in order for a Chapter 7 trustee and its professionals to become knowledgeable about the Bankruptcy Case and the Claims against the Debtors, In addition, the fees and expenses of a Chapter 7 trustee would likely exceed those of the Debtors in Possession, thereby further reducing cash available for distribution.

3. Financial Feasibility

The Bankruptcy Code requires the Bankruptcy Court to find, as a condition to Confirmation, that Confirmation is not likely to be followed by the liquidation of the Debtors or the need for further financial reorganization, unless such liquidation is contemplated by the Plan. Pursuant to the terms of the Plan, the Debtors will possess sufficient Cash to satisfy postpetition obligations under the Plan.

4. Acceptance by Impaired Class

The Bankruptcy Code requires, as a condition to Confirmation, that each class of claims or equity interests that is impaired under a plan accept the plan, with the exception described in the following Section, A class that is not "impaired" under a plan of reorganization is deemed to have accepted the plan and, therefore, solicitation of acceptances with respect to such class is not required. A class is "impaired" unless the plan (a) leaves unaltered the legal, equitable and contractual rights to which the claim or equity interest entitles the holder of such claim or equity interest; (b) cures any default and reinstates the original terms of the obligation; or (c) provides that on the consummation date, the holder of the claim or interest receives cash equal to the allowed amount of such claim or, with respect to any interest, any fixed liquidation preference to which the interest holder is entitled or any fixed price at which the debtor may redeem the security.

142 5. Confirmation Without Acceptance by All Impaired Classes

Section 1129(b) of the Bankruptcy Code allows a Bankruptcy Court to confirm a plan, even if the plan has not been accepted by all impaired classes entitled to vote on the plan, provided that the plan has been accepted by at least one impaired class. Holders of Claims and Equity Interests in Classes 1F and 2G are impaired and will receive no distribution from the Debtors under the Plan and therefore are deemed to have rejected the Plan. Thus, the Debtors will seek the application of the statutory requirements set forth in Section 1129(b) of the Bankruptcy Code for Confirmation of the Plan despite lack of acceptance by all Impaired Classes.

Section 1129(b) of the Bankruptcy Code states that notwithstanding the failure of an impaired class to accept a plan of reorganization, the plan shall be confirmed, on request of the proponent of the plan, in a procedure commonly known as "cram−down," so long as the plan does not "discriminate unfairly" and is "fair and equitable" with respect to each class of claims or equity interests that is impaired under, and has not accepted, the plan.

The condition that a plan be "fair and equitable" with respect to a non−accepting class of secured claims includes the requirements that: (a) the holders of such secured claims retain the liens securing such claims to the extent of the allowed amount of the claims, whether the property subject to the liens is retained by the debtor or transferred to another entity under the plan and (b) each holder of a secured claim in the class receives deferred cash payments totaling at least the allowed amount of such claim with a present value, as of the effective date of the plan, at least equivalent to the value of the secured claimant's interest in the debtor's property subject "to the liens.

The condition that a plan be "fair and equitable" with respect to a non−accepting class of unsecured claims includes the following requirement that either: (i) the plan provides that each holder of a claim of such class receive or retain on account of such claim property of a value, as of the effective date of the plan, equal to the allowed amount of such claim; or (ii) the holder of any claim or interest that is junior to the claims of such class will not receive or retain under the plan on account of such junior claim or interest any property.

The condition that a plan be "fair and equitable" with respect to a non−accepting class of equity interests includes the requirements that either: (a) the plan provide that each holder of an equity interest in such class receive or retain under the plan, on account of such equity interest, property of a value, as of the effective date of the plan, equal to the greater of(i) the allowed amount of any fixed liquidation preference to which such holder is entitled, (ii) any fixed redemption price to which such holder is entitled, or (iii) the value of such interest; or (b) if the class does not receive such an amount as required under (a), no class of equity interests junior to the non−accepting class may receive a distribution under the plan.

ARTICLE XII RISK FACTORS

All Holders of Impaired Claims should read and carefully consider the factors set forth below, as well as the other information set forth or otherwise referenced in this Disclosure Statement, prior to voting to accept or reject the Plan.

A. Financial Information; Disclaimer

Although the Debtors have used their best efforts to ensure the accuracy of the financial information provided in this Disclosure Statement, the financial information contained in this Disclosure Statement has not been audited and is based upon an analysis of data available at the time of the preparation of the Plan and Disclosure Statement. While the Debtors believe that such financial

143 information fairly reflects the financial condition of the Debtors, the Debtors are unable to warrant or represent that the information contained herein and attached hereto is without inaccuracies.

B. Certain Federal Income Tax Consequences

The following is a summary of certain U.S. federal income tax consequences of the Plan to the Debtors, Holders of Claims and Equity Interests, and Holders of subordinated Notes. This summary is based on the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations thereunder, and administrative and judicial interpretations and practice, all as in effect on the date hereof and all of which are subject to change, with possible retroactive effect. Due to the lack of definitive judicial and administrative authority in a number of areas, substantial uncertainty may exist with respect to some of the tax consequences described below. No opinion of counsel has been obtained, and the Debtors do not intend to seek a ruling from the Internal Revenue Service (the "IRS') as to any of such tax consequences, and there can be no assurance that the IRS will not challenge one or more of the tax consequences of the Plan described below.

This summary does not apply to Holders of Claims and Equity Interests that are not United States persons (as defined in the Code) or that are otherwise subject to special treatment under U.S. federal income tax law (including, for example, banks, governmental authorities or agencies, financial institutions, insurance companies, pass−through entities, tax−exempt organizations, brokers and dealers in securities, mutual funds, small business investment companies, and regulated investment companies). Moreover, this summary does not purport to cover all aspects of U.S. federal income taxation that may apply to the Debtors, Holders of Claims and Equity Interests, and Holders of Subordinated Notes based upon their particular circumstances. Additionally, this summary does not discuss any tax consequences that may arise under state, local, or foreign tax law.

The following summary is not a substitute for careful tax planning and advice based on the particular circumstances of each Holder of Claims and Equity Interests and Subordinated Notes. Each such Holder is urged to consult his, her, or its own tax advisor as to the federal income tax consequences, as well as any applicable state, local, and foreign consequences of the Plan.

1. Certain U.S. Federal Income Tax Consequences to the Holders of Claims and Equity Interests

a. Consequences to Holders of the Subordinated Notes

(i) In General

Whether the Holders of Subordinated Notes will recognize gain or loss upon the receipt of such Notes in exchange for, among other things, the discharge of their Claims, depends on (a) whether the exchange qualifies as a tax−free reorganization and (b) whether the Subordinated Notes are treated as "securities" for purposes of the reorganization provisions of the Code. Whether an instrument constitutes a "security" is determined based on all the facts and circumstances, but most authorities have held that the length of the term of a debt instrument is an important factor in determining whether such instrument is a security for federal income tax purposes. These authorities have indicated that a term of less than five years is evidence that the instrument is not a security, whereas a term of ten years of more is evidence that it is a security. There are numerous other factors that could be taken into account in determining whether a debt instrument is a security, including among others, the security for payment, the creditworthiness of the obligor, the subordination or lack thereof to other creditors, the right to vote or otherwise participate in the management of the obligor, convertibility of the instrument into an equity interest of the obligor, whether payments of interest are fixed, variable or contingent, and whether such payments are made on a current basis or accrued.

144 The Fixed Rate Notes (issued April 28,199s and maturing in April 15,2008) have a term of approximately ten years and thus should be treated as securities for federal income tax purposes. The Floating Rate Notes (issued in April 21, 1998 and maturing in October 15,2007) have a term of approximately nine and a half years and thus should also be treated as securities for federal income tax purposes. The term of a debt instrument is not necessarily determinative, however, and there can be no assurance that the IRS or the court will agree that the Subordinated Notes constitute securities for federal income tax purposes.

Assuming that the Subordinated Notes are treated as securities, the receipt of Subordinated Notes should be treated as a recapitalization (and therefore, a tax−free reorganization), and Holders of Subordinated Notes should not recognize any gain or loss, except that a Holder will recognize gain, but not loss, to the extent that the New UA Warrants are treated as received in satisfaction of accrued interest on the Subordinated Notes. Such Holder should obtain a tax basis in the New UA Warrants equal to the tax basis of the Subordinated Notes surrendered thereof and should have a holding period for the New UA Warrants that includes the holding period for the Subordinated Notes; provided. however, that the tax basis of any New UA Warrant treated as received in satisfaction of accrued interest should equal the amount of such accrued interest, and the holding period for such New UA Warrant should not include the holding period of the Subordinated Notes.

(ii) Accrued Interest

To the extent that any amount received by a Holder of a Subordinated Note under the Plan is attributable to accrued but unpaid interest, such amount may be taxable to the Holder as interest income, if such accrued interest has not been previously included in the Holder's gross income for U.S. federal income tax purposes. Conversely, a Holder of a Subordinated Note may be able to recognize a deductible loss (or, possibly a write−off against a reserve for bad debts) for such purposes to the extent that any accrued interest was previously included in the Holder's gross income but was not paid in full by the Debtors.

b. Consequences to the Prepetition Lenders

Pursuant to the Plan, the Restructured Bank Credit Facility will in essence replace the Prepetition Bank Credit Facility. In general, the entire amount of gain or loss is recognized for federal income tax purposes on a sale, exchange, or other disposition of property, unless specific provisions of the Code provide for nonrecognition treatment. Under Treasury regulations, a significant modification of a debt instrument, including a modification evidenced by an amendment of the instrument, is deemed to result in an exchange of the original instrument for a modified instrument. Under such Treasury regulations, a significant modification of a debt instrument includes, among other things, a change in the annual yield of the instrument (including a change resulting from a reduction of the principal of a debt instrument) by more than the greater of (a) 25 basis points or (b) five percent of the annual yield of the unmodified instrument. Because the principal amount of the Restructured Bank Credit Facility is 72.5% of the Prepetition Bank Credit Facility, the "replacement" of the Prepetition Bank Credit Facility should be treated as substantial modification. As a result, the Debt Electors should recognize gain or loss on the deemed exchange of the Bank Claims with the Restructured Bank Credit Note Interests to the extent of the difference between (a) the "amount realized" with respect to such exchange and (b) the Debt Electors' tax basis in the Restructured Bank Credit Facility (other than accrued interest). To the extent that any amount received by the Debt Electors under the Plan is attributable to accrued but unpaid interest, such amount may be taxable to the Debt Electors as interest income (as described in "Accrued Interest" Article XI1.B. 1.a.(ii)).

145 c. Consequences to Holders of Other Claims

In general, Holders of Allowed Claims (other than Holders of Subordinated Notes) should recognize taxable gain or loss for U.S. federal income tax purposes to the extent that their Allowed Claims are surrendered in exchange for Cash, a promissory note, or any other distribution. The amount of taxable gain or loss would be based upon the difference between the tax basis of such Allowed Claims and the fair market value of such distributions received by such Holder. The tax basis of such Holder's Allowed Claim would equal the fair market value of such Claim at the time of the distribution, and the holding period for such new distributions, if any, would begin on the day following the exchange.

The U.S. federal income tax treatment of any taxable gain or loss recognized by a Holder regarding any Allowed Claims (as long−term or short−term capital gain or loss or as ordinary income or loss) will be determined by a number of factors, including (a) the U.S. tax status of the Holder, (b) whether the obligation from which the Allowed Claim arose constitutes a capital asset of the Holder, (c) whether the obligation from which the Allowed Claim arose has been held for more than one year or was purchased at a discount, and (d) whether and to what extent the Holder has previously claimed a bad debt deduction in respect of the obligation from which the Allowed Claim arose.

d. Consequences to Holders of Equity Interests in the Company

A Holder of any Equity Interest that is cancelled under the Plan will be allowed a "worthless stock deduction" in an amount equal to the Holder's adjusted basis in such Equity Interest. A "worthless stock deduction" is a deduction allowed to a holder of a corporation's stock for the taxable year in which such stock becomes worthless. If the Holder held the Equity Interest as a capital asset, the loss will be treated as a loss from the sale or exchange of such capital asset.

2. Certain U.S. Federal Income Tax Consequences to the Debtors

a. cancelation of Debt

The aggregate outstanding indebtedness of each of the Debtors will be substantially reduced pursuant to the Plan. In general, for U.S. federal income tax purposes, a debtor recognizes cancellation of indebtedness ("COD") income upon satisfaction of its outstanding indebtedness for less than its adjusted issue price. The amount of COD income is, in general, the excess of(i) the adjusted issue price of the indebtedness satisfied, over (ii) the sum of the issue price of any new indebtedness of the taxpayer issued, the amount of cash paid and the fair market value of any other consideration (including the stock of the taxpayer) given in satisfaction of indebtedness.

A debtor is not required to include COD income in gross income if the debt discharge occurs in case under the Bankruptcy Code. However, the debtor must, as of the first day of the next taxable year, reduce its tax attributes (in general, first its net operating loss ("NOL") carryover and then tax credits and capital loss carryovers, and the tax basis of its assets) by the amount of COD income excluded from gross income by this exception. Under the Plan, the Debtors may realize COD income attributable to the cancellation of the Subordinated Notes. Because COD income will be realized in a case filed under the Bankruptcy Code, the Debtors will not be required to recognize the COD income in taxable income, but will be required to reduce their NOL carryover and certain other tax attributes by the amount of COD income.

The IRS has ruled informally that the attribute reduction rules apply on a separate company basis to corporations that are members of a consolidated group of corporations. As previously stated, the Debtors anticipate that they will reduce the amount of their NOL carryforward (and then, although highly unlikely, reduce their other tax attributes and the tax basis of their assets), and this will be done on a separate company basis so that each entity that is a member of the consolidated group will reduce

146 its share of NOL carryforward (and then its other tax attributes and then the tax basis of its assets) by the amount of COD income attributable to such member.

3. Limitation on Net Operating Loss Carryovers and Other Tax Attributes

Code Section 382 generally limits a corporation's use of its net operating losses (and may limit a corporation's use of certain built−in losses, recognized within a five−year period) if a corporation undergoes an "ownership change" (hereinafter the limitation under Code Section 382 is referred to as the "Section 382 Limitation"). Section 382 Limitation on the use of pre−change losses in any post−change year is equal to the product of the fair market value of the corporation's outstanding stock immediately before the ownership change and the long−term tax−exempt rate (which is published monthly by the Treasury Department and is intended to represent current interest rates on long−term tax−exempt debt obligations) in effect for the month in which the ownership change occurs. Code Section 383 applies similar limitations to capital loss carryovers and tax credits. In general, an ownership change occurs when the percentage of the corporation's stock owned by certain "5 percent shareholders" increases by more than 50 percentage points over the lowest percentage owned at any time during the applicable "testing period" (generally, the shorter of(i) the three−year period preceding the testing date or (ii) the period of time since the most recent ownership change of the corporation). A "5 percent shareholder" for these purposes includes, generally, an individual or entity that directly or indirectly owns 5 percent or more of the corporation's stock during the relevant period, and may include one or more groups of shareholders that in the aggregate own less than 5 percent of the value of the corporation's stock. Under applicable Treasury regulations, an ownership change with respect to an affiliated group of corporations filing a consolidated return that have consolidated NOL's is generally measured by changes in stock ownership of the parent corporation of the group (e.g., UA). The Debtors expect that the exchanges anticipated to occur pursuant to the Plan should cause an ownership change with respect to UA.

When an "ownership change" occurs pursuant to the implementation of a plan of reorganization under the Bankruptcy Code, the general Section 382 Limitation may not apply if certain requirements are satisfied. Under Section 382(l)(5) of the Code, the Section 382 Limitation does not apply to an ownership change of a loss corporation if the corporation was under the jurisdiction of a bankruptcy court immediately before the change and those persons who were shareholders and creditors of the loss corporation immediately before the ownership change own at least 50 percent of the loss corporation's stock by value and voting power after the ownership change (the "Bankruptcy Exception"). Stock held by a creditor that was converted from indebtedness is considered in determining whether the 50 percent requirement is satisfied only if (a) the creditor held (or is treated as holding) the debt at least 18 months before the case was tiled or (b) the debt arose in the ordinary course of the loss corporation's trade or business and has been held by the person who has at all times held the beneficial interest in the claim. If an exchange of debt for stock in a bankruptcy case does not qualify for the Bankruptcy Exception, the value of the loss corporation for purposes of calculating its Section 382 Limitation shall reflect the increase, if any, in value of the loss corporation resulting form any surrender or cancellation of creditor's claims in the transaction.

Thus, under Code Section 382(l)(5), Debtors would avoid entirely the application of Section 382 Limitation to the NOLs and recognized built−in losses, if any, but would be required to reduce their NOLs and possibly other tax attributes by any deduction for interest claimed by the Reorganized Debtors with respect to any indebtedness converted into stock for (a) the three−year period preceding the taxable year of the "ownership change" and (b) the portion of the year of the "ownership change" prior to the consummation of the Plan. In addition, under Section 382(1)(5)(D) of the Code, if a second "ownership change" with respect to the Reorganized Debtors occurs within the two−year period following the consummation of the Plan, the Section 382(l)(5) exception will not apply and any NOLs and other pre−change losses remaining after the second "ownership change" will be eliminated. If the

147 Debtors were to determine that either(i) the risk of the occurrence of a second "ownership change," or (ii) the NOL reduction under Section 382(l)(5) of the Code is too substantial, the Debtors could elect out of the application of Code Section 382(l)(5).

If the Debtors elect not to utilize Section 382(l)(5) or if the exchanges do not qualify for the tax treatment under Section 382(l)(5), the Debtors' use of their NOL carryover to offset taxable income earned after the ownership change will be subject to the Section 382 Limitation. Since the Debtors are in bankruptcy, however, Code section 382(l)(6) will apply. Under Code Section 382(l)(6), the Section 382 Limitation will be calculated by reference to the net equity value of the Debtors' stock immediately after the ownership change (rather than immediately before the ownership change, as is the case for non−bankruptcy ownership changes). In such case, because it is difficult to predict the Debtors' net equity value immediately after the "exchanges" contemplated by the Plan, the Debtors use of their NOL carryover may be substantially limited after the ownership change.

4. Backup Withholding

The Debtors will withhold all amount required by law to be withheld from payments of interest and dividends. The Debtors will comply with ail applicable reporting requirements of the Code.

C. Certain Bankruptcy Considerations

1. Risk of Non−Confirmation of the Plan

Even if the requisite acceptances are received, there can be no assurance that the Bankruptcy Court will confirm the Plan. A non−accepting creditor of the Debtors might challenge the solicitation procedures and results or the terms of the Plan as not being in compliance with the Bankruptcy Code. Even if the Bankruptcy Court were to determine that the balloting procedures and results were appropriate, the Bankruptcy Court could still decline to confirm the Plan if found that any statutory conditions to Confirmation had not been met, including that the terms of the Plan are fair and equitable to non−accepting Classes. Section 1129 of the Bankruptcy Code sets forth the requirements for Confirmation and requires, among other things, a finding by the Bankruptcy Court that the Plan "does not unfairly discriminate" and is "fair and equitable" with respect to any non−accepting Classes and that the Confirmation of the Plan is not likely to be followed by a liquidation or a need for further financial reorganization and that the value of distributions to non−accepting Classes of Impaired Claims and Equity Interests will not be less than the value of distributions such Classes of Impaired Claims and Equity Interests would receive if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code. While there can be no assurance that the Bankruptcy Court will conclude that these requirements have been met, the Debtors believe that the Plan will not be followed by a liquidation or the need for further financial reorganization and that non−accepting Holders of Impaired Claims and Equity Interests will receive distributions at least as great as would be received following a liquidation pursuant to Chapter 7 of the Bankruptcy Code. The Debtors believe that Holders of Unsecured Claims against UA and UATC, the Subordinated Note Holders, and Holders of Equity Interests in UA and UATC would not receive any distribution under a liquidation pursuant to Chapter 7 or Chapter 11.

Article III.C.6 of the Plan provides that if Class 2F does not vote to accept the Plan, then on the Effective Date:, each Holder of a Class 2F Claim shall neither receive any distribution nor retain any property under the Plan. While the Debtor believes that this provision is permissible under the Bankruptcy Code, arguments exist that certain case law would permit a contrary conclusion which, if accepted by the Bankruptcy Court, may result in the Plan not being confirmed.

Article X.C. of the Plan provides that each Holder of a Claim who has accepted the Plan in exchange for, among other things, a distribution under the Plan, shall be deemed to have released unconditionally each of the Debtors, the Reorganized Debtors, their subsidiaries, their affiliates, and

148 the Releases, and the agents, officers, directors, partners, members, professionals, and agents of the foregoing (and the officers, directors, partners, members, professionals, and agents of each thereof), from any and all Claims, obligations, rights, suits, damages, Causes of Action, remedies and liabilities whatsoever, whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, existing or hereafter arising, in law, equity or otherwise, that such Person or Entity would have been legally entitled to assert (whether individually or collectively), based in whole or in part upon any act or omission, transaction, agreement, event or other occurrence taking place on or before the Effective Date in any way relating or pertaining to the Debtors, the Reorganized Debtors, the Chapter 11 Cases, the Plan, the Disclosure Statement, or any related agreements, instruments or other documents, except: (i) for Claims arising under the Plan; and (ii) for Claims arising after the Petition Date in the ordinary course of business. In furtherance of the foregoing, the Confirmation Order will constitute an injunction permanently enjoining the commencement or prosecution by any entity, whether directly, derivatively, or otherwise, of any Claim, demand, liability, obligation, debt, right, Cause of Action, interest, remedy released or to be released pursuant to the Plan against the foregoing Persons and Entities. Although the Debtors believe that this provision is permissible under the Bankruptcy Code, the staff of the Securities and Exchange Commission ("SEC") disputes the enforceability of the release contained in Article X.C. of the Plan, on the ground that the release is unenforceable under Section 524(e) of the Bankruptcy Code. The SEC has reserved its right to oppose confirmation of the Plan based on such objection.

2. Nonconsensual Confirmation

Pursuant to the "cramdown" provisions of Section 1129(b) of the Bankruptcy Code, the Bankruptcy Count can confirm Plan at the Debtors' request if at least or; other Impaired Class has accepted the Plan (with such acceptance being determined without including the acceptance of any "insider"in such Class) and, as to each Impaired Class which has not accepted the Plan, the Bankruptcy Court determines that the Plan "does not discriminate unfairly" and is "fair and equitable" with respect to Impaired Classes. In accordance with Section 1129(a)(8) of the Bankruptcy Code, the Debtors may be required to request Confirmation of the Plan without the acceptance of all Impaired Classes entitled to vote in accordance with Section 1129(b) of the Bankruptcy Code.

The Debtors, except as provided for in the Lock−Up Agreements, reserve the right to modify the terms of the Plan as necessary for the Confirmation of the Plan without the acceptance of all Impaired Classes. Such modification could result in a less favorable treatment of any non−accepting Class or Classes, as well as of any Classes junior to such non−accepting Classes, than the treatment currently provided in the Plan. Such less favorable treatment could include a distribution of property to the Class affected by the modification of a lesser value than that currently provided in the Plan or no distribution of property whatsoever under the Plan.

3. Delays of Confirmation and/or Effective Date

Any delays of either Confirmation or effectiveness of the Plan could result in, among other things, increased Claims of Professionals. These or any other negative effects of delays of either Confirmation or effectiveness of the Plan could endanger the ultimate approval of the Plan by the Bankruptcy Court.

4. Classification Risks

Under Section 1123(a)(4) of the Bankruptcy Code, a plan of reorganization must provide the same treatment for each claim or interest of a particular class, unless the holder of the particular claim or interest agrees to a less favorable treatment of such particular claim or interest. The Debtors can provide no assurance that the Bankruptcy Court will not disapprove of the classifications of Claims and Equity Interests contained in the Plan.

149 5. Subordination Risks

The Subordinated Note Indentures, pursuant to which the Subordinated Notes were issued, contain language seeking to subordinate certain Claims to other Claims. The Debtors can provide no assurances, however, the Bankruptcy Court will interpret such language as mandating or not mandating subordination.

6. Consolidation Risks

The Plan does not contemplate consolidating any of the Debtors into one entity. The Debtors can provide no assurance, however, that (i) the Bankruptcy Court will not order one or more of the Debtors to be substantively consolidated; or (ii) that a party in interest will not move for such substantive consolidation to occur. Substantive consolidation of one or more of the Debtors into one entity would affect the distribution of property currently provided in the Plan.

7. Contingencies Not to Affect Vote of Impaired Classes to Accept the Plan

The distributions available to Holders under the Plan can be affected by a variety of contingencies, including, without limitation, whether or not the Debtors are consolidated, and whether the Bankruptcy Court orders certain Claims or Equity Interests to be subordinated to other Claims or Equity Interests. The occurrence of any and all such contingencies which could affect distributions available to Holders under the Plan, however, will not affect the validity of the vote taken by the Impaired Classes to accept or reject the Plan or require any sort of re−vote by the Impaired Classes.

8. Expiration of Bank Lock−Up Agreements.

The Bank Lock−Up Agreements will terminate, among other things, one year after the date of their execution. Thereafter, the signatories thereto will no longer be bound to support the Debtors' Plan.

D. Pending Litigation

The Debtors are involved from time to time in routine litigation that is incidental to their businesses. Typically, these matters consist of theatre construction or lease disputes, intellectual property, advertising and/or licensing disputes, insurance matters, real estate and use tax disputes, and employment litigation. The Debtors do not believe that the outcome of any such litigation will have a material adverse effect upon the Debtors. However, prior to the Petition Date, one or more of the Debtors were a party to, or were affected by, certain litigation that could result in decisions materially adverse to the Debtors and their estates. This litigation includes those legal proceedings in which Claims are asserted against, or may affect, one or more of the Debtors in amount that may exceed $200,000 (the "Legal Proceedings").

A. 680 Cinema Corp., Bernard Goldberg and Bruce Silverstein v. United Artists Theatre Circuit, Inc., & Ackerman Enterprises, et al. This matter was filed on September 27, 1994 in the U.S. District Court for the Eastern District of New York, Case Number CV9445554. Plaintiffs allege violation of Sections 1 and 2 of the Sherman Antitrust Act and violation of Section 340 of New York State General Business Law. Plaintiffs allege that UATC's partners in the Staten Theatre Group partnership, Domenic Gatto, Meyer Ackerman and others, undertook specific action to thwart plaintiffs' entry into theatre exhibition on Staten Island. These actions allegedly included, among other things: attempting to monopolize and preclude competition in the relevant market; harassing the landlord of the Fox Plaza Theatre in a manner that resulted in defendants obtaining the lease to such theatre despite plaintiffs' allegedly better offer; alleged action to delay plaintiffs' opening of its Atrium Theatre; and defendants' alleged

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conspiracy with film distributors to deny plaintiffs product for the Atrium Theatre. Plaintiffs allege $7,000,000.00 in actual damages, prior to trebling. The Debtors disagree with plaintiffs' contentions on this matter.

B. 1033 Third Street Corporation v. United Artists Theatre Circuit, Inc. This action was filed on December 27, 1999 in Superior Court, San Diego County, California, Case Number GIT740919. The plaintiff alleges breach of a lease dated October 30, 1980 for the Glasshouse Square Theatre in San Diego, California due to the Debtors' failure to pay rent, and the plaintiff demands damages and attorney's fees and costs. The Debtors allege that the plaintiff failed to mitigate its damages by unreasonably refusing to allow a sale agreement of the Glasshouse Theatre between UATC and a third party. The Debtors disagree with the plaintiff's contention on this matter. The plaintiff filed a motion for relief from the automatic stay in the Bankruptcy Court on November 21, 2000, and the Debtors filed an objection thereto on December 4, 2000. Unless otherwise resolved, the hearing on the plaintiff's motion is scheduled for December 8, 2000. If the motion is approved, the underlying California state court litigation will proceed so that the plaintiff can attempt to obtain a judgment and attempt to collect that judgment against an attachment release bond posted by the Debtors in the state court litigation (in settlement of the plaintiff's application for a prejudgment writ of attachment).

C. Connie Arnold, et al. v. United Artists Theatre Circuit, Inc. et al. This class action (the "Arnold Litigation") was originally commenced in California state court in 1991 against UATC by plaintiffs Connie Arnold and Ann Cupolo, among other named plaintiffs, both individually and as representatives of a class of persons similarly situated (the "Arnold Plaintiffs"), for alleged violations of state accessibility laws at UATC's movie theatres in California. The Arnold Litigation complaint was subsequently amended to include alleged violation of the Americans with Disabilities Act, 42 U.S.C. § 12001 et seq. (the "ADA") at UATC's movie theatres in California and nationwide. The Arnold Litigation was subsequently removed to the United States District Court for the Northern District of California. Ultimately, the Arnold Litigation was settled by and between the Arnold Plaintiffs, UATC and the United States Department of Justice (the "DOJ"), as party−intervenor, on March 28, 1996 (the "Settlement").

On August 14, 1996, the court granted final approval to the Settlement and entered an order approving the Settlement and an injunctive order enforcing the terms of the Settlement (collectively, the "Consent Decree"). The Consent Decree requires UATC to, among other things, make certain modifications to its chain of theatres to provide greater access to persons with mobility disabilities (i.e., to make "barrier modifications"). Under the Consent Decree, UATC may seek an extension of the Deadline if it cannot complete its barrier removal obligations by that Deadline without great difficulty, burden or expense. UATC, the DOJ, and the Arnold Plaintiffs disagree regarding the extent to which UATC has made the required barrier modifications under the Consent Decree. It is UATC's position that, since 1996, it has worked diligently to comply with the terms of the Consent Decree and has made substantial progress towards that end. The Arnold Plaintiffs and the DOJ disagree with UATC's position in that regard. UATC is also of the position that, given its current financial circumstances, it is unable to complete the remainder of its obligations under the Consent Decree by the Deadline without great difficulty, burden and expense. To that end, UATC approached the Arnold Plaintiffs and the DOJ to obtain a consensual extension of the Deadline, but the parties were unable to reach an agreement.

On October 30, 2000, UATC filed a motion in the United States District Court for the Northern District of California and sought a limited transfer of venue of the Arnold Litigation to the United States District Court for the District of Delaware solely for the purpose of determining an appropriate extension of the Deadline. UATC argued that the determination

151 of an appropriate extension of the Deadline depended on UATC's financial condition and ability to fund future obligations, which were questions to be determined by the Delaware District Court as part of the plan confirmation process. The Arnold Plaintiffs and the DOJ opposed UATC's motion. The United States District Court for the Northern District of California conducted a hearing on UATC's motion on November 27, 2000, took the matter under advisement but has yet to rule on such motion. UATC is still attempting to obtain a consensual extension of the Deadline.

It is UATC's position that the Consent Decree is an executory contract which UATC may assume or reject in accordance with Section 365 of the Bankruptcy Code and the Plan. UATC is in the process of determining whether it will assume or reject the Consent Decree and shall indicate such determination in the List of Contracts and Leases to be filed on or before the Confirmation Date in accordance with Article VI.A.1 of the Plan. UATC's determination will depend on, among other things, its ability to obtain an acceptable extension of the Deadline, either consensually or as a result of a court order. If UATC assumes the Consent Decree, it will endeavor to comply with all of its obligations thereunder in accordance with Section 365 of the Bankruptcy Code. If UATC rejects the Consent Decree, then it is UATC's position that: (1) the Arnold Plaintiffs and the DOJ may be entitled to Unsecured Claims against UATC's estate in accordance with Section 365(g) of the Bankruptcy Code and Article VI.D. of the Plan; and (2) the Arnold Plaintiffs' and the DOJ's Claims against the Debtors arising from or relating to the Consent Decree shall be discharged in accordance with Section 1141 of the Bankruptcy Code and Articles X and XI of the Plan. The DOJ and the Arnold Plaintiffs reserve the right to dispute any of the above−referenced positions taken by UATC, including without limitation UATC's characterization of the order approving the settlement and the injunctive order enforcing the terms of the settlement as an executory contract subject to rejection.

D. BF Amarillo, L.P. v. United Artists Theatre. This action was filed on March 17, 2000 in the 320th Judicial District Court in Potter County, Texas, Case Number 87,337−D. The plaintiff alleges default of lease for the Westgate Mall Theatre in Amarillo, Texas due the Debtors failure to pay rent after November 1999, that the lease terminated, and that the Debtor owes the plaintiff the balance of rent through May 31, 2010. The Debtors disagree with the plaintiff's contention on this matter.

E. Bryson Properties XII v. UATC. This action was filed on August 6, 1999 in the U.S. District Court for the Northern District of Illinois, Eastern Division, Case Number 99 C4703. The plaintiff is a successor in interest to the original landlord for the Mill Road Theatre in Milwaukee, Wisconsin in which the Debtor was the tenant. The lease for the Mill Road Theatre ran from February 2, 1970 through December 30, 2001. The Debtor entered into an Assignment, Consent and Assumption Agreement with Spector Theatres, LLC and Amethyst, LLC in which Spector Theatres sub−leased the theatre to Amethyst. Amethyst operated the Mill Road Theatre but failed to pay rent after September 1998. Plaintiff alleges that Debtor failed to pay rent CAM and other expenses from April 1999 through July of 1999 and that Debtor owes plaintiff for attorney's fees and other costs. Although the action was dismissed, it is anticipated that the plaintiff will attempt to refile the action in the immediate future. The Debtors disagree with the plaintiff's contention on this matter.

F. Charles Y. Cheng v. UATC. This action was filed on July 12, 1999 in the District Court of Dallas County, 162 District, Texas, Case Number DB 99−4125−I. Plaintiff is the successor in interest to the Skillman Theatre in Dallas, Texas in connection with a lease dated April 19, 1978 through June 30, 2004. UATC as lessee, entered into a sublease with Skillman General Cinema, which ceased operations in January 1998 and sent the Debtors a letter of abandonment dated January 30, 1999. The Debtors procured a potential new tenant which would use more space

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and pay a higher rent, but the plaintiff refused the tenant. Plaintiff alleges Debtor owes unpaid rent and other expenses. The Debtors disagree with the plaintiff's contention on this matter.

G. CIN Riverbridge, L.P. v. United Artists Theatre Circuit, Inc. This matter was filed on June 29, 2000 in the County Court in and for Palm Beach County, Florida, case number MC−00−11970−RE. Plaintiff is UATC's landlord at the Riverbridge Theatre, West Palm Beach, Florida. Landlord alleged breach of the parties' lease dated February 21, 1986 by failing to pay rent for June 2000 in the amount of $34,019.20 and demanded possession and future damages. The Debtors disagree with the plaintiff's contention on this matter.

H. Cinema 8 Center, LLC v. United Artists Theatre Circuit, Inc. This matter was filed on May 24, 2000 in the District Court, Clark County, Nevada, Case Number A414394, Department XVIII. Plaintiff alleges Debtor's breach of a contract dated September 9, 1994 for the lease of Cinema 8 Theatre, Las Vegas, Nevada, due to the Debtors' failure to pay rent after January 2001. The Debtors disagree with the plaintiff's contention on this matter.

I. Codding Enterprises v. King Reavis Amusement Company and United Artists Theatre Circuit, Inc. This matter was filed on February 2, 2000 in the Superior Court, Sonoma County, California, Case Number 223450. Plaintiff is UATC's landlord at the Empire Theatre, Rohnert Park, California and the Coddingtown Mall Theatre, Santa Rosa, California. The plaintiff alleges that UATC left the premises with a damaged roof requiring in excess of $100,000.00 to repair. The plaintiff further alleges a breach of the lease in connection with the Empire Theatre alleging unpaid rent in the amount of $14,714.65 plus $786,659.00 as the discounted value of unpaid rent for the balance of the term. Landlord further alleges UATC breached the lease for failure to operate the Empire Theatre. The Debtors disagree with the plaintiff's contention on this matter.

J. East Lake Plaza Associates, LLC v. United Artists Theatre Circuit, Inc. This matter was filed on May 1, 2000 in the Civil District Court, Orleans Parish, Louisiana, Case Number 2000−6720. Plaintiff is Debtor's landlord for the East Lake 8 Theatre in New Orleans, Louisiana and alleges that the Debtors breached the lease dated January 18, 1994 and demands due rent, CAM charges, specific performance, attorney's fees and other costs. The Debtors disagree with the plaintiff's contention on this matter.

K. Drexler Technology Corporation v. Dolby Laboratories, Inc. & United Artists Theatre Circuit, Inc., et al. This matter was filed on July 27, 1998 in the U.S. District Court for the Northern District of California, Case Number C98−02935MMC. Plaintiff alleges that it holds patents to certain technology relating to the optical storage and retrieval of digital data which it contends apply to the digital sound systems used in motion pictures. Plaintiff sued Dolby Laboratories, Inc. as the maker of the Dolby Digital motion picture soundtrack system for patent infringement. Plaintiff also sued various motion picture distributors and exhibitors for use of the Dolby Digital system and equipment. Dolby has agreed to indemnify UATC and is defending UATC. The Debtors disagree with plaintiffs' contentions on this matter.

L. Drexler Technology Corporation v. Sony Corporation & United Artists Theatre Circuit, Inc., et al. This matter was filed on July 27, 1998 in the U.S. District Court for the Northern District of California, Case Number C98−02936MMC. Plaintiff alleges that it holds patents to certain technology relating to the optical storage and retrieval of digital data which it contends apply to the digital sound systems used in motion pictures. Plaintiff sued Sony Corporation as the marker of the "SDDS" system for patent infringement. Plaintiff also sued various motion picture distributors for use of the SDDS system and equipment. Sony has offered an indemnification and is paying for the defense. The Debtors disagree with plaintiffs' contentions on this matter.

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M. E.C. Pavilion, L.L.C. v. United Artists Theatre Circuit, Inc. This matter was filed in the U.S. District Court of California, San Jose Division, California on February 17, 2000. The plaintiff, the Debtor's landlord for the San Jose Pavilions in San Jose, California, alleges breach of lease for failure to pay rent after November 1999 and for Debtor's failure to continuously operate the theatre. The Debtors disagree with the plaintiff's contention on this matter.

N. ESI Ergonomic Solutions, L.L.C. v. United Artists Theatre Circuit, Inc.; American Blast Fax, Inc. et al. This action was filed on November 18, 1999 in the Superior Court, Mariposa County, Arizona, Case Number CV99−20649. The plaintiff alleges that the defendants violated the Telephone Consumer Protection Act of 1991, which prohibits an entity from sending an unsolicited advertisement via telephone facsimile machine and provides a cause of action to an individual providing for money damages in the amount of $500 for each violation and treble damages if such action was willful and intentional. Plaintiff purports to be a representative of a class of 90,000 persons who received such advertisements from UATC in September 1999. The defendants disagree with the plaintiffs' contentions on this matter. In fact, UATC initiated an action on February 14, 2000 in the U.S. District Court for the District of Arizona, Case Number CIV−00−0274−PHX−RCB, captioned United Artists Theatre Circuit, Inc. v. The Federal Communications Commission; William E. Kennard, an individual, in his capacity as Chairman of the Federal Communications Commission; and ESI Ergonomics, L.L.C., an Arizona limited liability corporation, seeking, among other things, a declaration that the Telephone Consumer Protection Act is unconstitutional. The Debtors disagree with the plaintiff's contention on this matter. On or about November 15, 2000, the plaintiff filed a motion in the Bankruptcy Court to certify the proported plaintiff class and have its proof of claim treated as a class proof of claim. The Debtors are currently examining their options with respect to plaintiff's motion, including, without limitation, filing an objection thereto.

O. Equity Landing, Inc. v. United Artists Theatre Circuit, Inc. This matter was filed on March 1, 2000 in the Circuit Court, Eleventh Judicial District, Dade County Florida, Case Number 5767−CA−8. Plaintiff is Debtor's landlord and alleges breach of contract of lease for the Mandarin Theatre in Jacksonville, Florida. The plaintiff demands rent for February 2000, and rent, property taxes, and CAM charges from February 2000 through August 31, 2007. Plaintiff also claims repudiation of lease and all future rent, real estate taxes and CAM expenses as future damages. The Debtors disagree with the plaintiff's contention on this matter.

P. General Electric Capital Corporation v. United Artists Theatre Circuit, Inc. et al. On or about June 19, 1998, the plaintiff brought a suit against the Debtor for the collection of rents in connection with the Stratford Square Theatre in Stratford, Connecticut. On December 15, 1992, the Debtor entered into an Exchange Agreement with Interstate LeFont Theatre, and the theatre was subleased to Hoyt Cinemas Corporation ("Hoyt"). On or about April 1, 1998, Hoyt informed the plaintiff that it would cease operations and withhold further rent. The plaintiff's complaint demands monthly lease payments for the term of the lease. This matter was consolidated with Kranzco Realty Trust v. United Artists Theatre Circuit, Inc. et al., in which the Plaintiff alleges that Debtor and sublessee Hoyt breached the terms of a lease and consent agreement for the same theatre by failing to make the required monthly lease payments. The Debtors disagree with the plaintiffs' contentions on this matter.

Q. Golden Ring Mall Company Limited Partnership v. United Artists Theatre Circuit, Inc. This forcible entry and detainer action was filed on January 3, 2000 in the District Court, Baltimore County, Maryland. The plaintiff, who is the Debtor's landlord for the Golden Ring Mall Theatre in Maryland, alleges rent due for the Debtor's failure to operate the theatre since October 1999. The Debtors disagree with the plaintiff's contention on this matter.

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R. Horton Plaza, LLC v. United Artists Theatre Circuit, Inc. The matter was filed on April 21, 2000 in the Superior Court, San Diego, County, California, Case Number GIC 747115. The plaintiff, the Debtor's landlord for the Horton Plaza Theatre in San Diego, California, alleges breach of a lease dated February 7, 1984 and default by failure to pay rent. Additionally, plaintiff alleges failure to pay rent under second lease dated December 8, 1995. The Debtors disagree with the plaintiff's contention on this matter.

S. Dallas S. Hudgens III v. United Artists Theatre Circuit, Inc. This matter was filed on August 18, 2000 in the State Court of Gwinnett County, Georgia, Case No. 00−C−5032 1. Plaintiff is UATC's landlord at the Gwinnett Theatre, Duluth, Georgia. Landlord alleges breach of contract, anticipatory breach of contract, negligence, conversion, primitive changes and a claim for attorneys' fees. Landlord demands $48,550.88 per month for rent due plus $4,029,718.89 for future damages. The Debtors disagree with the plaintiff's contention on this matter.

T. IC Theatre Limited Liability Company v. United Artists Theatre Circuit, Inc. This matter was filed on December 15, 1999 in the District Court, Araphoe County, Colorado, Case Number 99CV4098. The plaintiff, who is the Debtor's landlord for the Cooper V Theatre in Aurora, Colorado, alleges breach of lease for failure to make rent and CAM expense payments. The Debtors disagree with the plaintiff's contention on this matter.

U. K−Mart Corporation v. United Artists Theatre Circuit, Inc. This matter was filed in the Circuit Court, 13th Judicial Circuit, Hillsborough County, Florida, Case Number 0002147, Division H on March 21, 2000. The plaintiff, who is the Debtor's landlord for the Mission Bell Theatre in Tampa, Florida, alleges breach of a lease dated February 21, 1981 for failure to pay rent and operate the theatre after November 1999. The Debtors disagree with the plaintiff's contention on this matter.

V. John Kelly v. United Artists Theatre Circuit Inc. This matter was filed on September 16, 1996, in the Supreme Court of the State of New York, County of Westchester, Case Number 14605/96. The plaintiff alleges personal injury and failure to maintain premises in a reasonable and safe manner. The Debtors have insurance coverage for this matter, but are subject to a self insured retention of $500,000. The Debtors disagree with the plaintiff' contention on this matter.

W. Market Place Commercial Limited Partnership v. United Artists Theatre Circuit, Inc. This matter was filed in the District Court of Maryland for Baltimore City on March 21, 2000, Case Number 2000135643. Plaintiff, who is Debtor's landlord for the Harbor Park Theatre in Baltimore Maryland, alleges damages for past due rent and late charges, but excluding additional interest and attorney's fees. The Debtors disagree with the plaintiff's contention on this matter.

X. Meadows Centre Joint Venture v. United Artists Theatre Circuit, Inc. This matter was filed on December 23, 1999 in the District Court, Jefferson County, Colorado, Case Number 99CV3315. Plaintiff, the Debtor's landlord for the Cooper VI Theatre in Arvada, Colorado, alleges breach of a lease dated May 9, 1984 for failing to pay rent, CAM charges and future rent. The Debtors disagree with the plaintiff's contention on this matter.

Y. Oakland Mall, Ltd. v. United Artists Theatre Circuit, Inc. This matter was filed on July 31, 2000 in the Circuit Court for the Sixth Judicial Circuit, Michigan, Case No. 00−024926−ZK. Plaintiff is UATC's landlord for the Oakland Mall Theatre, Troy, Michigan. Plaintiff alleges breach of a lease dated June 15, 1979 as amended and alleges said lease is not terminated in that UATC is obligated to pay damages for monthly rent after April 2000 in the amount of $122,090.89 and continuing thereafter in the amount of $20,166.71 per month in future damages. The Debtors disagree with the plaintiff's contention on this matter.

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Z. Old Town Val Vista, LLC v. United Artists Theatre Circuit, Inc. This matter was filed on May 19, 2000 in the Superior Court, Maricopa County, Arizona, Case Number CV2000−009676. Plaintiff, the Debtor's landlord for the Val Vista Theatre in Mesa, Arizona, alleges breach of a lease dated April 1, 1988 by failing to pay rent for April and May of 2000 and demands due rent, CAM charges, late charges, tax charges, attorney's fees, and future rent. The Debtors disagree with the plaintiff's contention on this matter.

AA. P.A. Properties, Inc. v. UATC. This matter was filed on December 29, 1998 in the Circuit Court, 19th Judicial Circuit, Lake County, Illinois, Case Number 98L1007. This matter arises out of an agreement between the plaintiff and UATC in connection with auditing of common area maintenance expenses at a New York theatre. Plaintiff alleges that UATC breached the agreement, entitling PAP to damages of over $768,000.00 based on "recovery opportunities" that PAP claims to have identified to UATC, plus attorneys fees, interest and costs. PAP alleges that it identified certain improper common area maintenance expenses and is therefore entitled to a fee from UATC because UATC was allegedly saved from having to pay the expense. The Debtors disagree with the plaintiff's contention on this matter.

AB. PALS Associates v. United Artists Theatre Circuit, Inc. This matter was filed on December 6, 1999 in the Superior Court, Los Angeles County, California, Case Number TCO12760. Plaintiff, the Debtor's landlord for the Lakewood Theatre in Lakewood, California, alleges breach of lease for unpaid rent from November 1, 1999. Additionally, the plaintiff makes claims for future rent and for breach of contract for failure to continue to operate the business. The Debtors disagree with the plaintiff's contention on this matter. On or about November 20, 2000 the plaintiff filed a motion in the Bankruptcy Court seeking relief from the automatic stay to pursue the California state court litigation. The deadline for the Debtors to object to the plaintiff's motion is December 11, 2000.

AC. Princeton Market Fair Associates, LTD. v. United Artists Theatre Circuit, Inc. This matter was filed on March 20, 2000 in the Superior Court, Mercer County, New Jersey, Case Number L−762−00. Plaintiff, who is Debtor's landlord for the Princeton Market Fair Theatre in West Windsor, New Jersey, alleges breach of lease for failure to maintain the theatre in a neat and orderly fashion, and claims ejectment. The Debtors disagree with the plaintiff's contention on this matter.

AD. Regency Centers, LP v. United Artists Theatre Circuit, Inc. This matter was filed on December 14, 1999 in the Circuit Court, Duval County, Florida, Case Number 9907362CA. Plaintiff, the Debtor's landlord for the Wellington Marketplace Theatre in Palm Beach, Florida, alleges breach of lease for failure of the Debtors to pay rent after November 1, 1999. The Debtors disagree with the plaintiff's contention on this matter.

AE. Frank Petit v. United Artists Theatre Circuit, Inc. (375519109−8). Workers Compensation claim involving Debtors' employee Frank Petit who allegedly herniated a disc while bending over a projection platter in New York and was determined to be permanently and totally disabled. The Debtors disagree with the plaintiff's contention on this matter.

AF. Retail Property Trust v. United Artists Theatre Circuit, Inc. This matter was filed on January 11, 2000 in the Superior Court, Orange County California, Case Number 00CC00779. Plaintiff, the Debtor's landlord for the Brea Mall Theatre in Brea, California, alleges breach of a lease dated May 6, 1977 for failure to pay rent. The plaintiff seeks unpaid rent, attorney's fees and other costs. The Debtors disagree with the plaintiff's contention on this matter.

AG. Rouse−Park Meadows, LLC v. United Artists Theatre Circuit, Inc. This matter was filed on January 24, 2000 in the District Court, Douglas County, Colorado, case number 00CV47, Division 1. Plaintiff is UATC's landlord for the Park Meadows Mall Theatre, Englewood,

156

Colorado and alleges that UATC is liable for past due accrued rent in the amount of at least $300,000. The Debtors disagree with the plaintiff's contention on this matter.

AH. Simon Property Group, LP v. United Artists Theatre Circuit, Inc. This matter was filed on December 23, 1999 in the Second Judicial District Court, Bernalillo County, New Mexico, Case Number CV9912607. Plaintiff, the Debtor's landlord for the Cottonwood Mall Theatre in Albuquerque, New Mexico, alleges breach of a lease dated May 17, 1996 expiring on December 31, 2016. Plaintiff claims rent due, and further alleges that Debtor breached lease by failing to operate the entertainment center portion of the premises. The Debtors disagree with the plaintiff's contention on this matter.

AI. Showscan Entertainment, Inc. v. UATC. Showscan Entertainment, Inc. ("SEI") alleges a breach of contract, filed a demand for arbitration on September 7, 1999 with the American Arbitration Association and claimed that it is entitled to $5,115,000 plus attorneys' fees and costs plus interest. SEI alleges that UATC's failure to honor certain obligations to purchase a certain amount of movie−motion seats resulting in damages in connection with difficulty in obtaining loans and a distressing financial position. The agreement provides for liquidated damages for failure to purchase additional machinery. The Debtors disagree with the plaintiff's contention on this matter.

AJ. Southwest Shopping Center v. United Artists Theatre Circuit, Inc. This action was filed on January 18, 2000 and is pending in the Circuit Court, Pulaski County, Arkansas, Case Number CV00−529. Plaintiff is the Debtor's landlord for the Park Plaza Seven Theatre in Little Rock, Arkansas and alleges breach of lease for Debtors failure to pay rent. Additionally, the plaintiff alleges that the Debtors breached the lease by vacating the premises and removing, without prior consent, furniture, fixtures and equipment. The Debtors disagree with the plaintiff's contention on this matter.

AK. Spring Valley Improvements, LLC v. United Artists Theatre Circuit, Inc. et al. This matter was filed on March 29, 2000 in the Justice Court, Town of Clarkstown, Rockland County, New York. Plaintiff is Debtor's landlord for the Spring Valley Mall Theatre in Spring Valley, New York and alleges a breach of a lease dated October 24, 1986. The plaintiff further alleges that the Debtor is indebted for unpaid past rent, and that the plaintiff is entitled to accelerate the rent through the end of the lease term. The case was removed to the U.S. District Court for the Southern District of New York (Case No. 00CIV 3008 (CM)). the Justice Court entered a judgment on July 23, 2000 in the amount of $383,990.68. The Debtors disagree with the plaintiff's contention on this matter.

AL. Sunrise Mall Associates v. United Artists Theatre Circuit, Inc. This matter was filed on March 2, 2000 in the U.S. District Court for the Eastern District of New York, case number CV−001246. Plaintiff is UATC's landlord at the Sunrise Mall Theatre, Massapequa, New York. Plaintiff alleges a breach of the lease and that it is entitled to the sum of $156,758.00 for rent. tax rent. CAM charges and percentage rent. Landlord further alleges that there is due and owing future damages in connection with the balance of the term of the lease. The Debtors disagree with the plaintiff's contention on this matter.

AM. Michelle Smith v. United Artists Theatre Circuit, Inc. (719C14358). Workers compensation claim involving Debtor's employee Michelle Smith who allegedly herniated a disc in her back while lifting cups in Arizona and was determined to have partial permanent impairment. The Debtors disagree with the plaintiff's contention on this matter.

AN. Talisman Roswell, L.L.C. v. United Artists Theatre Circuit, Inc. This matter was filed in the State Court, Gwinnett, County, Georgia, on January 27, 2000, case number 00−C−0656−1. Plaintiff is UATC's landlord at the Roswell Theatre, Roswell, Georgia and seeks in excess of $150,000.00

157

from UATC for past due rent, plus attorney's fees. The Debtors disagree with the plaintiff's contention on this matter.

AO. United Artists Theatre Circuit, Inc. v. CB Richard Ellis. On July 17, 1999 UATC filed a demand for arbitration with the American Arbitration Association against CB Richard Ellis, Inc. for breach of a contract to provide certain real property management services to UATC. UATC alleges that CB wrongfully retains approximately $600,000 in funds that were to have been paid to third party vendors. CB has claimed that UATC owes CB $708,267.24 for services provided under the Agreement. The Debtors disagree with plaintiffs' contentions on this matter.

AP. United Artists Theatre Circuit, Inc. v. Yale University. On November 21, 1994 UATC filed a petition in the Supreme Court, New York County, New York, Index No.132530−94, seeking court appointment of an arbitrator to arbitrate a dispute under a lease between UATC and its landlord, Yale University ("Yale"), for the Douglaston Plaza Shopping Center Theatre. UATC questioned the validity of certain CAM charges for the years 1992 through 1994 totaling approximately $211,000.00, relating to the renovation of the shopping center's parking deck. Yale alleges that UATC's share of such expenses totals approximately $1.8 million. The Debtors disagree with Yale's contention in this matter.

AQ. Blackfox Parkway Associates, LLC. v. United Artists Theatre Circuit, Inc. This action was filed on December 1, 1999 in the District Court, Boulder County, Colorado, case number 99CV1992−2. Plaintiff is UATC's landlord at the Courtyard IV Theatre, Longmont, Colorado. Plaintiff's first cause of action is for breach of contract for failure to pay rent and second claim is for breach of an implied covenant of good faith and fair dealing. The Debtors disagree with the plaintiff's contention on this matter.

ARTICLE XIII POST−FILING DEVELOPMENTS

A. First Day Motions

On the Petition Date, the Debtors sought and obtained approval from the Bankruptcy Court of certain motions and applications (the "First Day Motions") which the Debtors filed simultaneously with their petitions for relief commencing the Chapter 11 Cases. Set forth below is a brief summary of certain of the First Day motions filed by the Debtors in the Chapter 11 Cases.

1. Customer Service Programs

The Debtors obtained an order authorizing the Debtors to perform obligations and to pay certain Claims arising under their customer service programs. This relief should enable the Debtors to maintain their important relationships with their customers.

2. Employee Claims and Existing Benefit Programs

The Debtors obtained an order authorizing the Debtors to pay and honor their prepetition obligations to employees in the ordinary course of business. Consistent with this order, the Debtors are continuing to honor their obligations to employees (including, but not limited to, vacation pay and other benefits) in accordance with applicable law and internal United Artists policies and such policies shall be unaffected by the Plan. This relief should enable the Debtors to maintain their excellent relationships with their employees.

158 3. Film Motion

The Debtors obtained an order authorizing them to assume executory film licensing and cooperative and other advertising contracts with their film studios and distributors, or, alternatively to pay the prepetition Claims of film studios and distributors. Consistent with this Order, the Debtors have continued to pay film license fees and cooperative and other advertising fees in the ordinary course of business. This relief should enable the Debtors to maintain their long−standing and excellent relationships with their film suppliers.

4. Cash Management Motion

Pursuant to this Motion, the Debtors obtained authorization to use their current cash management system and bank accounts.

5. Claims Bar Date

Pursuant to this motion, the Debtors obtained an order establishing November 15, 2000 as the deadline for filing proofs of Claim and Equity Interests against the Debtors' estates. As of December 4, 2000, total amounts of Claims filed were approximately as follows: $17,416,000 of priority Claims; $2,230,411,000 of Secured Claims; and $849,846,000 of Unsecured Claims (the Debtors taking no position by this description as to the validity or invalidity of such Claims).

6. Lease Rejection and Lease Rejection Procedures Motion

Pursuant to this motion, the Debtors obtained an order (1) authorizing them to reject certain unexpired leases of non−residential real property and (2) establishing procedures for the rejection of additional unexpired leases of non−residential real property in the future. Subsequently, the Debtors filed additional motions to reject certain additional unexpired leases of non−residential real property in the Chapter 11 Cases.

7. Mechanics Lien Motion

Pursuant to this motion, the Debtors obtained authorization, in their sole discretion and in the reasonable exercise of their business judgment, to pay the prepetition mechanics' liens claims in the ordinary course of the businesses up to $1,000,000.

8. Essential Trade Creditor Motion

Pursuant to this motion, the Debtors obtained authorization to pay the prepetition Claims of their essential trade creditors. This relief has enabled the Debtors to maintain their excellent relationships with their essential trade credit suppliers.

9. DIP Financing and Cash Collateral Motion

The Debtors obtained entry of both an interim order and a Final Order permitting borrowing under the DIP Facility and use of the cash collateral securing the Prepetition Bank Credit Facility. Proceeds from the DIP Facility and use of cash collateral have enabled the Debtors to operate their businesses during the Chapter 11 Cases and pay prepetition obligations (to the extent authorized by the Bankruptcy Court) and postpetition obligations.

10. Scheduling Motion

As a result of this motion, the Bankruptcy Court: (1) scheduled hearings to approve the adequacy of the Disclosure Statement and to confirm the Plan; (2) established deadlines to object to the Disclosure Statement and the Plan; (3) approved a form of notice; (4) approved the Debtors'

159 solicitation materials; (5) approved the Debtors' procedures for solicitation; and (6) approved the Debtors' procedures for tabulation of ballots accepting or rejecting the Plan. The order granting the scheduling motion provides, in part, for the following events to occur in these Chapter 11 Cases:

• A hearing to consider the adequacy of the Disclosure Statement is scheduled for December 8, 2000 at 3:00 p.m., prevailing Eastern time;

• Solicitation of the Plan and other solicitation materials must occur by December 18, 2000;

• Deadline for parties in interest to vote on the Plan is January 12, 2001;

• Objections to the confirmation of the Plan must be filed with the Bankruptcy Court by January 12, 2001;

• The Debtors must respond to objections to the Plan by January 18, 2001; and

• A hearing to consider confirmation of the Plan is scheduled for January 22, 2001 at 4:00 p.m., prevailing Eastern time. 11. Miscellaneous Procedural and Administrative Motions

These motions sought approval of non−substantive procedures to be employed in the Bankruptcy Court governing the Chapter 11 Cases. The motions also seek to employ bankruptcy counsel and advisors to the Debtors.

B. Transfer of Involuntary Bankruptcy Case

On or about September 6, 2000 the Debtors reached an agreement with Petitioning Creditors with respect to the Involuntary Case. The Debtors and the Petitioning Creditors agreed, in pertinent part, to transfer the Involuntary Case to the United States District Court for the District of Delaware.

C. Committees

On September 25, 2000, an official committee of general unsecured creditors was appointed by the United States Trustee. The Creditor's Committee consists of: Coca−Cola North America; Simon Property Group, L.P.; Putnam Investment Management; Inc., Ares Management, L.P.; Ares Management II, L.P.; Goldentree Asset Management, L.P.; Heartland Capital Corp.; and Trendex Capital Management−Aspen Advisors. The Creditors' Committee retained Chanin as its financial advisor and Milbank and Morris Nichols Arsht & Tunnell as its legal advisors. A Trade Subcommittee of the Committee was also formed in the Chapter 11 Cases. The Trade Subcommittee consists of Coca−Cola North America and Simon Property Group, L.P.

D. United Artists Theatre Company/Trade Subcommittee of the Official Committee of Unsecured Creditors.

After commencing the Chapter 11 Cases, the Debtors and the Trade Subcommittee of the Official Committee of Unsecured Creditors entered into good faith, arms−length negotiations concerning the treatment of Holders of Allowed Unsecured Class 2F Claims under the Plan. The Debtors and the Trade Subcommittee have reached an agreement regarding the Plan's treatment of such Holders of Allowed Class 2F Unsecured Claims and as a result executed the United Artists Theatre Company/Trade Subcommittee of the Official Committee of Unsecured Creditors Proposed Restructuring Term Sheet (the "Trade Subcommittee Term Sheet," a copy of which is contained in the Plan Supplement). The Trade Subcommittee Term Sheet essentially sets forth certain modifications to the terms of the Plan including: (1) the treatment of Unsecured Claims of UATC, including Unsecured Claims arising from UATC's rejection of certain unexpired leases under Section 502(b)(6) of the Bankruptcy Code; (2) the method of the Debtors' determination of those unexpired leases and executory contracts which

160 the intend to assume, assume and assign or reject pursuant to the Plan; and (3) certain agreements regarding certain avoidance actions to be brought by the Debtors. The Plan has been amended to incorporate this agreement and the terms in the Term Sheet. The Trade Subcommittee Term Sheet also obligates the Trade Subcommittee to, among other things, (i) not consent to, provide any support to, participate in the formulation of, or vote on any plan of reorganization, other than the Plan; and (ii) use its best efforts to cause the Committee and the Trade Subcommittee to take all actions in their reasonable discretion to achieve confirmation and consummation of the Plan. The Plan has been amended to incorporate this agreement and the terms of the Term Sheet.

E. Exit Facility Motion

On or about November 10, 2000, the Debtors filed a motion for authority to enter into the Exit Facility with Bankers Trust Company and one or more of its affiliates (collectively, "BTCo") on terms and conditions substantially in the form of the Term Sheet (the "Exit Facility Term Sheet") attached as Annex A to an Exit Facility commitment letter with BTCo (the "Exit Facility Commitment Letter," a copy of which is contained in the Plan Supplement). The Exit Facility will essentially consist of a revolving credit facility of up to $35 million, with a $10 million sub−limit for letters of credit. Deutsche Bank Securities, Inc., an affiliate of BTCo, may arrange for other banks, financial institutions, and other "accredited investors" to provide a portion of the Exit Facility, and BTCo will act as a administrative agent for such lenders under the Exit Facility. A hearing on the Debtors' motion is scheduled for December 8, 2000. If the motion is approved, the Debtors will have the authority to take certain actions, including, but not limited to (i) the execution of the Exit Facility Commitment letter; and (ii) the making of any required payments and indemnifications necessary during the course of the Chapter 11 Cases, as set forth in the Exit Facility Commitment Letter.

ARTICLE XIV MISCELLANEOUS PROVISIONS

Certain additional miscellaneous information reading the Plan is set forth below.

A. Dissolution of Committee(s)

On the Effective Date, the Committee shall dissolve and members thereof shall be released and discharged from all rights and duties arising from, or related to, the Chapter 11 Cases; provided, however, that the Trade Subcommittee shall continue in existence for the limited purpose of consulting with the Reorganized Debtors concerning (1) the initiation, prosecution and settlement of Preference Actions and (2) the allowance of or objection to proofs of Claim. The Trade Committee shall be dissolved and all of its members released and discharged from all rights and duties arising from, and related to, the Chapter 11 Cases upon the conclusion of such activities of the Reorganized Debtors about which the Trade Committee will consult with the Reorganized Debtors.

The reasonable fees and expenses incurred after the Petition Date by the Prepetition Noteholders Committee's counsel and financial advisor (together with the reasonable fees and expenses of local counsel) Milbank and Chanin, respectively, through the date of the appointment of the Creditors' Committee regarding the Chapter 11 Cases, will be paid (without application by or on behalf of any such professionals to the Bankruptcy Court and without notice and a hearing) by the Reorganized Debtors as an Administrative Claim under the Plan. If the Reorganized Debtors and any such professional retained by the Prepetition Noteholders Committee cannot agree on the amount of fees and expenses to be paid to such professional, the amount of any such fees and expenses shall be determined by the Bankruptcy Court.

161 B. Payment of Statutory Fees

All fees payable pursuant to 28 U.S.C. § 1930, as determined by the Bankruptcy Court at the hearing pursuant to Section 1128 of the Bankruptcy Code, shall be paid on or before the Effective Date.

C. Discharge of Debtors

Except as otherwise provided in the Plan and the Lock−Up Agreements, on the Effective Date: (1) the rights afforded in the Plan and the treatment of all Claims and Equity Interests therein, shall be in exchange for and in complete satisfaction, discharge and release of Claims and Equity Interests of any nature whatsoever, including any interest accrued on such Claims from and after the Petition Date, against the Debtors and the Debtors in Possession, or any of their assets, property, or Estates; (2) the Plan shall bind all Holders of Claims and Equity Interests, and all Claims against, and Equity Interests in, the Debtors and Debtors in Possession shall be satisfied, discharged and released in full, and the Debtors' liability with respect thereto shall be extinguished completely, including, without limitation, any liability of the kind specified under Section 502(g) of the Bankruptcy Code; and (3) all Persons and Entities shall be precluded from asserting against the Debtors, the Debtors in Possession, the Estates, and the Reorganized Debtors, their successors and assigns, their assets and properties, any other Claims or Equity Interests based upon any documents, instruments, or any act or omission, transaction or other activity of any kind or nature that occurred prior to the Effective Date.

D. Modification of Plan

Subject to the limitations contained in the Plan, (1) the Debtors reserve the right, in accordance with the Bankruptcy Code and the Bankruptcy Rules, to amend or modify the Plan prior to the entry of the Confirmation Order and (2) after the entry of the Confirmation Order, the Debtors or the Reorganized Debtors, as the case may be, may, upon order of the Bankruptcy Court, amend or modify the Plan, in accordance with Section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or reconcile any inconsistency in the Plan in such manner as may be necessary to carry out the purpose and intent of the Plan.

E. Revocation of Plan

The Debtors reserve the right, at any time prior to the entry of the Confirmation Order, to revoke and withdraw the Plan.

F. Successors and Assigns

The rights, benefits and obligations of any Person or Entity named or referred to in the Plan shall be binding on, and shall inure to the benefit of any heir, executor, administrator, successor or assign of such Person or Entity.

G. Reservation of Rights

Except as expressly set forth herein, the Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Orders. The filing of the Plan, any statement or provision contained in the Plan, or the taking of any action by the Debtor or Debtors in Possession with respect to the Plan shall be or shall be deemed to be an admission or waiver of any rights of the Debtors or Debtors in Possession with respect to the Holders of Claims or Equity Interests prior to the Effective Date.

162 H. Section 1146 Exemption

Pursuant to Section 1146(c) of the Bankruptcy Code, under the Plan, (1) the issuance, distribution, transfer, or exchange of any debt, equity, security or other interest in the Debtors or Reorganized Debtors; (2) the creation, modification, consolidation or recording of any mortgage, deed or trust, or other security interest, or the securing of additional indebtedness by such or other means (whether (a) in connection with the issuance and distribution of any debt, equity, security, or other interest in the Debtors or Reorganized Debtors or (b) otherwise in furtherance of, or in connection with, the Plan); (3) the making, assignment, or recording of any lease or sublease; or (4) the making, delivery, or recording of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including any deeds, bills of sale, assignments of other instrument of transfer executed in connection with any transaction arising out of, contemplated by, or in any way related to the Plan, shall not be subject to any document recording tax, mortgage recording tax, stamp tax, or similar tax or government assessment, and the appropriate state or local government official or agent is directed to forego the collection of any such tax or government assessment and to accept for filing and recording any of the foregoing instruments or other documents without the payment of any such tax or government assessment.

I. Further Assurances

The Debtors, the Reorganized Debtors, all Holders of Claims receiving distributions under the Plan, and all other parties in interest shall, from time to time, prepare, execute and deliver any agreements or documents and take any other actions as may be necessary or advisable to effectuate the provisions and intent of the Plan.

J. Service of Documents

Any pleading, notice or other document required by the Plan to be served on or delivered to the Reorganized Debtors shall be sent by first class U.S. mail, postage prepaid to:

United Artists Theatre Circuit, Inc. c/o the Reorganized Debtors 9110 E. Nichols Avenue, Suite 200 Englewood, Colorado 80112−3405 Attn: Ralph E. Hardy, Esq.

With copies to:

Kirkland & Ellis 200 East Randolph Drive Chicago, Illinois 60601 Attn: James H.M. Sprayregen, Esq. James W. Kapp III Esq.

Pachulski, Stang, Ziehl, Young & Jones, P.C. 919 N. Market Street, 16th Floor Wilmington, Delaware 19801 Attn: Laura Davis Jones, Esq.

163 K. Filing of Additional Documents

On or before the Effective Date, the Debtors may File with the Bankruptcy Court such agreements and other documents as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan.

L. Plan Supplement

The Plan Supplement, containing certain documents relating to the Plan and Disclosure Statement, shall be Filed with the Bankruptcy Court and will be available from the Information Agent upon specific request in writing. The Plan Supplement contains the following documents:

1. The Bank Lock−Up Agreements;

2. The Subordinated Noteholder Lock−Up Agreements;

3. Trade Subcommittee Term Sheet;

4. Exit Facility Commitment Letter;

5. Transactions to Implement Plan;

6. Form of Promissory Note;

7. Form of Class 2F Promissory Note; and

8. List of Retained Causes of Action.

Accompanying this Disclosure Statement are copies of: (1) the Plan annexed to this Disclosure Statement as Exhibit A; (2) the Notice of Hearings to Confirm the Plan; (3) Notice of Opportunity to Object; (4) Notice of Voting Deadline and Procedures for Vote Tabulation; and (5) Notice of Deadline to File Motions Pursuant to Fed. R. Bankr. P. 3018(a); and (6) a Ballot for Voting to Accept or Reject the Plan.

* * * * *

164 ARTICLE XV RECOMMENDATION

In the opinion of the Debtors, the Plan is preferable to the alternatives described herein because it provides for a larger distribution to the Holders of Claims and Interests then would otherwise result in a liquidation under Chapter 7 of the Bankruptcy Code: In addition, any alternative other than Confirmation of the Plan could result in extensive delays and increased administrative expenses resulting in smaller distributions to the Holders of Claims and Equity Interests. Accordingly, the Debtors recommend that Holders of Claims and Equity Interests entitled to vote on the Plan support Confirmation of the Plan and vote to accept the Plan.

Dated: December , 2000

Respectfully Submitted,

UNITED ARTISTS THEATRE COMPANY; UNITED ARTISTS THEATRE CIRCUIT, INC.; UNITED ARTISTS REALTY COMPANY; UNITED ARTISTS PROPERTIES I CORP.; UNITED ARTISTS PROPERTIES II CORP.; UAB, INC.; UAB II, INC.; TALLTHE, INC.; UA THEATRE AMUSEMENTS, INC.; UA INTERNATIONAL PROPERTY HOLDINGS, INC.; UA PROPERTY HOLDING II, INC.; UNITED ARTISTS INTERNATIONAL MANAGEMENT COMPANY; BETH PAGE THEATRE CO., INC; UNITED FILM DISTRIBUTION COMPANY OF SOUTH AMERICA; U.A.P.R., INC.; KING REAVIS AMUSEMENT COMPANY; MAMARONECK PLAYHOUSE HOLDING CORPORATION; and R AND S THEATRES, INC.

By: /s/ RALPH E. HARDY

Ralph E. Hardy Title: Executive Vice President, General Counsel, and Secretary

Prepared by: James H.M. Sprayregen James W. Kapp III David R. Seligman Jonathan A. Carson KIRKLAND & ELLIS 200 East Randolph Drive Chicago, Illinois 60601 (312) 861−2000

and

Laura Davis Jones (Bar No. 2436) PACKULSKI, STANG, ZIEHL, YOUNG & JONES PC 919 North Market Street, 16th Floor Wilmington, Delaware 19801 (302) 652−4100

CO−COUNSEL TO DEBTORS AND DEBTORS IN POSSESSION

165 EXHIBIT A

[United Artists Second Amended Joint Plan of Reorganization is filed as Exhibit 2.3 hereto and incorporated herein by reference.]

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Exhibit 4.7

THIRD SUPPLEMENTAL INDENTURE

Third Supplemental Indenture (this "Supplemental Indenture"), dated as of November 28, 2002, among Regal CineMedia Corporation (the "Guaranteeing Subsidiary"), a subsidiary of Regal Cinemas Corporation (or its permitted successor), a Delaware corporation (the "Company"), the Company and U.S. Bank National Association, as trustee under the Indenture referred to below (the "Trustee").

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "Indenture"), dated as of January 29, 2002, providing for the issuance of 93/8% Senior Subordinated Notes due 2012 (the "Notes");

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which any newly−acquired or created Guarantor shall unconditionally guarantee all of the Company's obligations under the Notes and the Indenture on the terms and conditions set forth herein (the "Subsidiary Guarantee"); and

WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. Agreement to Guarantee. The Guaranteeing Subsidiary irrevocably and unconditionally guarantees the Guarantee Obligations, which include (i) the due and punctual payment of the principal of, premium, if any, and interest (and Liquidated Damages, if any) on the Notes, whether at maturity, by acceleration, call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer or otherwise, the due and punctual payment of interest on the overdue principal and premium, if any, and (to the extent permitted by law) interest on any interest on the Notes, and payment of expenses, and the due and punctual performance of all other obligations of the Company, to the Holders or the Trustee all in accordance with the terms set forth in Article X of the Indenture, and (ii) in case of any extension of time of payment or renewal of any Notes or any such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration, call for redemption, upon a Change of Control Offer, upon an Asset Sale Offer or otherwise.

The obligations of Guaranteeing Subsidiary to the Holders and to the Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth in Article X of the Indenture and reference is hereby made to such Indenture for the precise terms of this Subsidiary Guarantee.

No past, present or future director, officer, employee, incorporator or stockholder (direct or indirect) of the Guaranteeing Subsidiary (or any such successor entity), as such, shall have any liability for any obligations of the Guaranteeing Subsidiary under this Subsidiary Guarantee or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation, except in their capacity as an obligor or Guarantor of the Notes in accordance with the Indenture.

1 This is a continuing Guarantee and shall remain in full force and effect and shall be binding upon the Guaranteeing Subsidiary and its successors and assigns until full and final payment of all of the Company's obligations under the Notes and Indenture or until released in accordance with the Indenture and shall inure to the benefit o f the successors and assigns of the Trustee and the Holders, and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges herein conferred upon that party shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions hereof. This is a Guarantee of payment and performance and not of collectibility.

The obligations of the Guaranteeing Subsidiary under its Subsidiary Guarantee shall be limited to the extent necessary to insure that it does not constitute a fraudulent conveyance under applicable law.

THE TERMS OF ARTICLE X OF THE INDENTURE ARE INCORPORATED HEREIN BY REFERENCE.

3. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE, 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).

4. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

5. Effect of Headings. The Section headings herein are for convenience only and shall not affect the construction hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

THE COMPANY:

REGAL CINEMAS CORPORATION

By: /s/ PETER B. BRANDOW

Name: Peter B. Brandow Title: Executive Vice President

GUARANTEEING SUBSIDIARY:

REGAL CINEMEDIA CORPORATION

By: /s/ GENE HARDY

Name: Gene Hardy Title: Executive Vice President

2 THE TRUSTEE:

U.S. BANK NATIONAL ASSOCIATION

By: /s/ RICHARD H. PROKOSCH

Name: Richard H. Prokosch Title: Vice President 3 QuickLinks

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Exhibit 4.8

$200,000,000

REGAL CINEMAS CORPORATION

93/8% Senior Subordinated Notes due 2012

REGISTRATION RIGHTS AGREEMENT

January 29, 2002

CREDIT SUISSE FIRST BOSTON CORPORATION LEHMAN BROTHERS INC. c/o Credit Suisse First Boston Corporation Eleven Madison Avenue New York, New York 10010−3629

Dear Sirs:

Regal Cinemas Corporation, a Delaware corporation (the "Issuer"), proposes to issue and sell to Credit Suisse First Boston Corporation and Lehman Brothers Inc. (together, the "Initial Purchasers"), upon the terms set forth in a purchase agreement dated January 17, 2002 (the "Purchase Agreement"), U.S. $200,000,000 aggregate principal amount of its Series A 9 3/8% Senior Subordinated Notes due 2012 (the "Initial Notes") to be guaranteed (the "Guarantees," together with the Initial Notes, the "Initial Securities") by the guarantors named therein (the "Guarantors" and, collectively with the Issuer, the "Company"). The Initial Securities will be issued pursuant to an Indenture, dated as of the Closing Date, (the "Indenture"), among the Issuer, the Guarantors and U.S. Bank National Association, as trustee (the "Trustee"). As an inducement to the Initial Purchasers to enter into the Purchase Agreement, each of the Issuer and each of the Guarantors agrees with the Initial Purchasers, for the benefit of the Initial Purchasers and the holders of the Securities (as defined below) (collectively the "Holders"), as follows:

1. Registered Exchange Offer. Unless not permitted by applicable law (after the Issuer and the Guarantors have complied with the ultimate paragraph of this Section 1), the Issuer and the Guarantors shall prepare and, within 105 days (such 105th day being a "Filing Deadline") after the date on which the Initial Purchasers purchase the Initial Securities pursuant to the Purchase Agreement (the "Closing Date"), file with the Securities and Exchange Commission (the "Commission") a registration statement (the "Exchange Offer Registration Statement") on an appropriate form under the Securities Act of 1933, as amended (the "Securities Act"), with respect to a proposed offer (the "Registered Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities of the Issuer, with guarantees endorsed thereon by the Guarantors, issued under the Indenture, identical in all material respects to the Initial Securities and registered under the Securities Act (the "Exchange Securities"). Each of the Issuer and the Guarantors shall use its respective best efforts to (i) cause such Exchange Offer Registration Statement to become effective under the Securities Act at the earliest possible time, but no later than 165 days after the Closing Date (such 165th day being an "Effectiveness Deadline"), (ii) cause such Exchange Offer Registration Statement to be effective continuously during the Registered Exchange Offer and (iii) keep the Registered Exchange Offer open for a period of not less than 20 business days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the "Exchange Offer Registration Period").

If the Issuer and the Guarantors commence the Registered Exchange Offer, the Issuer and the Guarantors (i) will be entitled to consummate the Registered Exchange Offer 20 business days after commencement (provided that the Issuer and the Guarantors have accepted all the Initial Securities

theretofore validly tendered in accordance with the terms of the Registered Exchange Offer) and (ii) will be required to consummate the Registered Exchange Offer no later than 30 business days after the date on which the Exchange Offer Registration Statement is declared effective (such 30th business day being the "Consummation Deadline").

Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Issuer and the Guarantors shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder's business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States.

The Issuer and each of the Guarantors acknowledges that, pursuant to current interpretations by the Commission's staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder which is a broker−dealer electing to exchange Initial Securities, acquired for its own account as a result of market making activities or other trading activities, for Exchange Securities (an "Exchanging Dealer"), is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section, and (c) Annex C hereto in the "Plan of Distribution" section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell Securities (as defined below) acquired in exchange for Initial Securities constituting any portion of an unsold allotment, is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S−K under the Securities Act, as applicable, in connection with such sale.

The Issuer and each of the Guarantors shall use its respective best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Issuer and the Guarantors shall make a sufficient number of copies of such prospectus and any amendment or supplement thereto available to any broker−dealer for use in connection with any resale of any Exchange Securities for a period of not less than 180 days after the consummation of the Registered Exchange Offer.

If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Issuer and the Guarantors, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the "Private Exchange") for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Issuer, with guarantees endorsed thereon by the Guarantors, issued under the Indenture and identical in all material respects to the Initial Securities (the "Private Exchange Securities"). The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the "Securities".

2 In connection with the Registered Exchange Offer, the Issuer and the Guarantors shall:

(a) mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;

(b) keep the Registered Exchange Offer open for not less than 20 business days (or longer, if required by applicable law) after the date notice thereof is mailed to Holders;

(c) utilize the services of a depositary for the Registered Exchange Offer with an address in the Borough of Manhattan, The City of New York, which may be the Trustee or an affiliate of the Trustee;

(d) permit Holders to withdraw tendered Initial Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and

(e) otherwise comply with all applicable laws.

As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Issuer and the Guarantors shall:

(x) accept for exchange all the Initial Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange;

(y) deliver to the Trustee for cancellation all the Initial Securities so accepted for exchange; and

(z) cause the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange.

The Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter.

Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial Securities.

Each Holder participating in the Registered Exchange Offer shall be required to represent to the Issuer and the Guarantors that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of the Issuer or any of the Guarantors or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker−dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker−dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market−making activities or other trading activities and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.

Notwithstanding any other provisions hereof, the Issuer and the Guarantors will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

3 If following the date hereof there has been announced a change in Commission policy with respect to exchange offers that in the reasonable opinion of counsel to the Issuer and the Guarantors raises a substantial question as to whether the Registered Exchange Offer is permitted by applicable federal law, the Issuer and the Guarantors will seek a no−action letter or other favorable decision from the Commission allowing the Issuer and the Guarantors to consummate the Registered Exchange Offer is such a no−action letter or decision is obtainable under then existing law or Commission policy. The Issuer and the Guarantors will pursue the issuance of such a decision to the Commission staff level. In connection with the foregoing, the Issuer and each of the Guarantors will take all such other actions as may be requested by the Commission or otherwise required in connection with the issuance of such decision, including without limitation (i) participating in telephonic conferences with the Commission, (ii) delivering to the Commission staff an analysis prepared by counsel to the Issuer and the Guarantors setting forth the legal bases, if any, upon which such counsel has concluded that the Registered Exchange Offer should be permitted and (iii) diligently pursuing a resolution (which need not be favorable) by the Commission staff.

2. Shelf Registration. If, (i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Issuer and the Guarantors are not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof or (ii) any Holder of the Initial Securities which are Transfer Restricted Securities notifies the Company prior to the 20th business day following the consummation of the Registered Exchange Offer that (a) it is prohibited by law or Commission policy from participating in the Registered Exchange Offering, (b) it may not resell the Exchange Securities acquired by it in the Registered Exchange Offer to the public without delivering a prospectus, and the prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by it, or (c) it is a broker−deal and holds the Exchange Securities acquired directly from the Company or any of the Company's affiliates, the Issuer and each of the Guarantors shall take the following actions (the date on which any of the conditions described in the foregoing clauses (i) and (ii) occur, including in the case of clause (ii) the receipt of the required notice, being a "Trigger Date"):

(a) The Issuer and each of the Guarantors shall promptly (but in no event more than 30 days after the Trigger Date (such 30th date being a "Filing Deadline")) file with the Commission and thereafter use its best efforts to cause to be declared effective no later than 60 days after the Trigger Date (such 60th day being an "Effectiveness Deadline") a registration statement (the "Shelf Registration Statement" and, together with the Exchange Offer Registration Statement, a "Registration Statement") on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the "Shelf Registration"); provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder.

(b) The Issuer and each of the Guarantors shall use its respective best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the date of its effectiveness or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) can be sold pursuant to Rule 144 under the Securities Act without any volume limitation under Rule 144 or any successor rule thereof. The Issuer and each of the Guarantors shall be deemed not to have used its respective best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required by

4 applicable law or such action is taken by the Company in good faith and for valid business reasons so long as the Company promptly thereafter complies with the requirements of Section 6(b).

(c) Notwithstanding any other provisions of this Agreement to the contrary, the Issuer and each of the Guarantors shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

3. Registration Procedures. In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply:

(a) The Issuer and each of the Guarantors shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Issuer and each of the Guarantors shall use its respective best efforts to reflect in each such document, when so filed with the Commission, such comments as such Initial Purchaser reasonably may propose; (ii) include the information substantially in the form set forth in Annex A hereto on the cover, in Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer" section and in Annex C hereto in the "Plan of Distribution" section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information substantially in the form set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an Initial Purchaser participating in the Registered Exchange Offer or the Shelf Registration Statement, include the information required by Items 507 or 508 of Regulation S−K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential "underwriter" status of any broker−dealer that is the beneficial owner (as defined in Rule 13d−3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange Securities received by such broker−dealer in the Registered Exchange Offer (a "Participating Broker−Dealer"), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in−house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include the names of the Holders who propose to sell Securities pursuant to the Shelf Registration Statement as selling securityholders.

(b) The Issuer and the Guarantors shall give written notice to the Initial Purchasers, the Holders of the Securities and any Participating Broker−Dealer from whom the Issuer has received prior written notice that it will be a Participating Broker−Dealer in the Registered Exchange Offer

5 (which notice pursuant to clauses (ii)−(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):

(i) when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post−effective amendment thereto has become effective;

(ii) of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information;

(iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose;

(iv) of the receipt by the Issuer or any of the Guarantors or any of their respective legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and

(v) of the happening of any event that requires the Issuer or the Guarantors to make changes in the Registration Statement or the prospectus in order that the Registration Statement or the prospectus does not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading.

(c) The Issuer and each of the Guarantors shall use reasonable efforts to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement.

(d) The Issuer and each of the Guarantors shall furnish to each Holder of Securities included within the coverage of the Shelf Registration, without charge, at least one copy of the Shelf Registration Statement and any post−effective amendment thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference).

(e) The Issuer and each of the Guarantors shall deliver to each Exchanging Dealer and each Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post−effective amendment thereto, including financial statements and schedules, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference).

(f) The Issuer and each of the Guarantors shall, during the Shelf Registration Period, deliver to each Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Issuer and each of the Guarantors consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.

(g) The Issuer and the Guarantors shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker−Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request. The Issuer and each of the Guarantors consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating Broker−Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement.

6 (h) Prior to any public offering of the Securities pursuant to any Registration Statement the Issuer and each of the Guarantors shall register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or "blue sky" laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Issuer and the Guarantors shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action which would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject.

(i) The Issuer and each of the Guarantors shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request at least two business days prior to sales of the Securities pursuant to such Registration Statement.

(j) Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Issuer and each of the Guarantors is required to maintain an effective Registration Statement, the Issuer and each of the Guarantors shall promptly prepare and file a post−effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an 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, in light of the circumstances under which they were made, not misleading. If the Company notifies the Initial Purchasers, the Holders of the Securities and any known Participating Broker−Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Initial Purchasers, the Holders of the Securities and any such Participating Broker−Dealers shall suspend use of such prospectus, and their period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers, the Holders of the Securities and any known Participating Broker−Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j).

(k) Not later than the effective date of the applicable Registration Statement, the Issuer and each of the Guarantors will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, and, if required, provide the applicable trustee with printed certificates for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company.

(l) The Issuer and each of the Guarantors will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12−month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Issuer's first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12−month period.

7 (m) The Issuer and the Guarantors shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary for such qualification. In the event that such qualification would require the appointment of a new trustee under the Indenture, the Issuer shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.

(n) The Issuer and the Guarantors may require each Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Issuer and the Guarantors may exclude from such registration the Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request.

(o) The Issuer and each of the Guarantors shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as any Holder of the Securities shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration.

(p) In the case of any Shelf Registration, the Issuer and each of the Guarantors shall (i) make reasonably available for inspection by the Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Holders of the Securities or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Issuer and the Guarantors, (ii) cause the Issuer's and the Guarantors' officers, directors, and employees to supply all relevant information reasonably requested by the Holders of the Securities or any such underwriter, attorney accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; and (iii) use its best efforts to cause the Issuer's and the Guarantors' accountants and auditors to supply all relevant information reasonably requested by the Holders of the Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the any such inspections pursuant to the foregoing clauses (ii) and (iii) and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof; and provided further, that such information shall be kept confidential by the Holder or by any such attorney, accountant or other agent unless required by law or regulation to be disclosed.

(q) In the case of any Shelf Registration, the Issuer and each of the Guarantors, if requested by any Holder of Securities covered thereby, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion shall include such matters as are customarily included in opinions requested in underwritten offerings of such type); (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities and (iii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Shelf Registration Statement to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of

8 appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72.

(r) In the case of the Registered Exchange Offer, if requested by an Initial Purchaser or any known Participating Broker−Dealer, the Issuer and each of the Guarantors shall cause (i) its counsel to deliver to such Initial Purchaser or such Participating Broker−Dealer a signed opinion in the form set forth in Section 6(c) of the Purchase Agreement with such changes as are customary in connection with the preparation of a Registration Statement and (ii) its independent public accountants and the independent public accountants with respect to any other entity for which financial information is provided in the Registration Statement to deliver to such Initial Purchaser or such Participating Broker−Dealer a comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Section 6(a) of the Purchase Agreement, with appropriate date changes.

(s) If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or caused to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied.

(t) The Issuer and each of the Guarantors will use its best efforts to (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any.

(u) In the event that any broker−dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Rules") of the National Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Issuer and each of the Guarantors will assist such broker−dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a "qualified independent underwriter" (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker−dealer as may be required in order for such broker−dealer to comply with the requirements of the Rules.

4. Registration Expenses:

(a) All expenses incident to the Issuer's and the Guarantors' performance of and compliance with this Agreement will be borne by the Issuer and the Guarantors, regardless of whether a Registration Statement is ever filed or becomes effective, including without limitation;

(i) all registration and filing fees and expenses;

(ii) all fees and expenses of compliance with federal securities and state "blue sky" or securities laws;

9 (iii) all expenses of printing (including printing certificates for the Securities to be issued in the Registered Exchange Offer and the Private Exchange and printing of Prospectuses), messenger and delivery services and telephone;

(iv) all fees and disbursements of counsel for the Issuer and the Guarantors;

(v) all application and filing fees in connection with listing the Exchange Securities on a national securities exchange or automated quotation system pursuant to the requirements hereof; and

(vi) all fees and disbursements of independent certified public accountants of the Issuer and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance);

provided, however, that in an underwritten offering, the Issuer shall not be responsible for any fees and expenses of any underwriter, including any underwriting discounts and commissions or any legal fees and counsel to the underwriters.

The Issuer and each of the Guarantors will bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any person, including special experts, retained by the Issuer and the Guarantors.

(b) In connection with any Registration Statement required by this Agreement, the Issuer and each of the Guarantors will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities who are selling or reselling Securities pursuant to the "Plan of Distribution" contained in the Exchange Offer Registration Statement or the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared.

5. Indemnification.

(a) The Issuer and each of the Guarantors agrees to indemnify and hold harmless each Holder of the Securities, any Participating Broker−Dealer and each person, if any, who controls such Holder or such Participating Broker−Dealer within the meaning of the Securities Act or the Exchange Act (each Holder, any Participating Broker−Dealer and such controlling persons are referred to collectively as the "Indemnified Parties") from and against any losses, claims, damages or liabilities, joint or several, or any actions in respect thereof (including, but not limited to, any losses, claims, damages, liabilities or actions relating to purchases and sales of the Securities) to which each Indemnified Party may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, 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 shall reimburse, as incurred, the Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action in respect thereof; provided, however, that (i) the Issuer and the Guarantors shall not be liable in any such case to the extent that such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for

10 inclusion therein and (ii) with respect to any untrue statement or omission or alleged untrue statement or omission made in any preliminary prospectus relating to a Shelf Registration Statement, the indemnity agreement contained in this subsection (a) shall not inure to the benefit of any Holder or Participating Broker−Dealer from whom the person asserting any such losses, claims, damages or liabilities purchased the Securities concerned, to the extent that a prospectus relating to such Securities was required to be delivered by such Holder or Participating Broker−Dealer under the Securities Act in connection with such purchase and any such loss, claim, damage or liability of such Holder or Participating Broker−Dealer 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 Securities to such person, a copy of the final prospectus if the Company had previously furnished copies thereof to such Holder or Participating Broker−Dealer; provided further, however, that this indemnity agreement will be in addition to any liability which the Issuer or the Guarantors may otherwise have to such Indemnified Party. The Issuer and each of the Guarantors shall also indemnify underwriters, their officers and directors and each person who controls such underwriters within the meaning of the Securities Act or the Exchange Act to the same extent as provided above with respect to the indemnification of the Holders of the Securities if requested by such Holders.

(b) Each Holder of the Securities, severally and not jointly, will indemnify and hold harmless (i) the Issuer and the Guarantors and each person, if any, who controls the Issuer and the Guarantors within the meaning of the Securities Act or the Exchange Act and (ii) each person who signs the Registration Statement from and against any losses, claims, damages or liabilities or any actions in respect thereof, to which the Issuer or the Guarantors or any such controlling person may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in a Registration Statement or prospectus or in any amendment or supplement thereto or in any preliminary prospectus relating to a Shelf Registration, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or omission or alleged untrue statement or omission was made in reliance upon and in conformity with written information pertaining to such Holder and furnished to the Company by or on behalf of such Holder specifically for inclusion therein; and, subject to the limitation set forth immediately preceding this clause, shall reimburse, as incurred, the Issuer or the Guarantors for any legal or other expenses reasonably incurred by the Issuer or the Guarantors or any such controlling person in connection with investigating or defending any loss, claim, damage, liability or action in respect thereof. This indemnity agreement will be in addition to any liability which such Holder may otherwise have to the Issuer or any of the Guarantors or any of its controlling persons.

(c) Promptly after receipt by an indemnified party under this Section 5 of notice of the commencement of any action or proceeding (including a governmental investigation), such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 5, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the 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 reasonably 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

11 be liable to such indemnified party under this Section 5 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense thereof. 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 includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action, and does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsections (a) or (b) 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 (or actions in respect thereof) referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the exchange of the Securities, pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by the foregoing clause (i) 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 indemnifying party or parties on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable considerations. The relative fault of the parties 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 Issuer or the Guarantors on the one hand or such Holder or such other indemnified party, as the case may be, on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such 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 (d) 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 claims which is the subject of this subsection (d). Notwithstanding any other provision of this Section 5(d), the Holders of the Securities shall not be required to contribute any amount in excess of the amount by which the net proceeds received by such Holders from the sale of the Securities pursuant to a Registration Statement exceeds the amount of damages which such Holders have 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this paragraph (d), each person, if any, who controls such indemnified party within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as such indemnified party and each person, if any, who controls the Issuer or the Guarantors within the meaning of the Securities Act or the Exchange Act shall have the same rights to contribution as the Issuer or the Guarantors.

(e) The agreements contained in this Section 5 shall survive the sale of the Securities pursuant to a Registration Statement and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of any indemnified party.

12 6. Liquidated Damages Under Certain Circumstances.

(a) Liquidated Damages (the "Liquidated Damages") with respect to the Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (iv) below being herein called a "Registration Default"):

(i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable filing Deadline;

(ii) any Registration Statement required by this Agreement is not declared effective by the Commission on or prior to the applicable Effectiveness Deadline;

(iii) the Registered Exchange Offer has not been consummated on or prior to the Consummation Deadline; or

(iv) subject to Section 6(b), any Registration Statement required by this Agreement has been declared effective by the Commission but (A) such Registration Statement thereafter ceases to be effective or (B) such Registration Statement or the related prospectus ceases to be usable in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any 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 (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder.

Each of the foregoing will constitute a Registration Default whatever the reason for any such event and whether it is voluntary or involuntary or is beyond the control of the Issuer or the Guarantors or pursuant to operation of law or as a result of any action or inaction by the Commission.

Liquidated Damages shall accrue on the Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 0.25% per annum (the "Liquidated Damages Rate") for the first 90−day period immediately following the occurrence of such Registration Default. The Liquidated Damages Rate shall increase by an additional 0.25% per annum with respect to each subsequent 90−day period until all Registration Defaults have been cured, up to a maximum Liquidated Damages Rate of 2.0% per annum, except as provided in Section 6(c) hereof. The Issuer and the Guarantors shall not be required to pay Liquidated Damages for more than one Registration Default at any given time.

(b) A Registration Default referred to in Section 6(a)(iv) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post−effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Issuer and the Guarantors where such post−effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events, with respect to the Issuer and the Guarantors that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Issuer and the Guarantors are proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 30 days, Liquidated Damages shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured.

13 (c) Any amounts of Liquidated Damages due pursuant to Section 6(a) will be payable in cash on the regular interest payment dates with respect to the Securities. The amount of Liquidated Damages will be determined by multiplying the applicable Liquidated Damages Rate by the principal amount of the Securities and further multiplied by a fraction, the numerator of which is the number of days such Liquidated Damages Rate was applicable during such period (determined on the basis of a 360−day year comprised of twelve 30−day months), and the denominator of which is 360.

(d) "Transfer Restricted Securities" means each Security until (i) the date on which such Security has been exchanged by a person other than a broker−dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker−dealer in the Registered Exchange Offer of an Initial Security for an Exchange Note, the date on which such Exchange Note is sold to a purchaser who receives from such broker−dealer on or prior to the date of such sale a copy of the prospectus contained in the Exchange Offer Registration Statement, (iii) the date on which such Security has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Security is distributed to the public pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act.

7. Rules 144A. The Issuer and each of the Guarantors shall use its best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Issuer or any of the Guarantors is not required to file such reports, it will, upon the request of any Holder of Securities, in connection with any potential sale of any Securities by such Holder, make publicly available the information required by Rule 144A(d)(4). The Issuer and each of the Guarantors will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Issuer by the Initial Purchasers upon request.

8. Underwritten Registrations. If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering ("Managing Underwriters") will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering.

No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person's Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

9. Miscellaneous.

(a) No Inconsistent Agreements. The Issuer and each of the Guarantors will not on or after the date of this Agreement enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer's or any of the Guarantors' securities under any agreement in effect on the date hereof.

(b) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents.

14 (c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first−class mail, facsimile transmission, or air courier which guarantees overnight delivery:

(1) if to a Holder of the Securities, at the most current address given by such Holder to the Company.

(2) if to the Initial Purchasers;

Credit Suisse First Boston Corporation Eleven Madison Avenue New York, NY 10010−3629 Fax No.: (212) 325−8278 Attention: Transactions Advisory Group

with a copy to:

Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue Los Angeles, CA 90071 Fax: (213) 687−5600 Attention: Nicholas P. Saggese, Esq.

(3) if to the Issuer or the Guarantors, at the Issuer's address as follows:

Regal Cinemas, Inc. 7132 Commercial Park Drive Knoxville, TN 37918 Fax: (865) 922−3188 Attention: Chief Financial Officer

with a copy to:

Weil, Gotshal & Manges, LLP 767 Fifth Avenue New York, NY 10153 Fax: (212) 310−8007 Attention: Todd Chandler

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient's facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery.

(d) Third Party Beneficiaries. The Holders shall be third party beneficiaries to the agreements made hereunder between the Issuer and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary or advisable to protect their rights or the right of Holders hereunder.

(e) Successors and Assigns. This Agreement shall be binding upon the Issuer and each of the Guarantors and each of their respective successors and assigns.

(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

15 (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(h) Governing 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).

(i) Severability. If any one of more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(j) Securities Held by the Company. Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(k) Agent for Service; Submission to Jurisdiction; Waiver of Immunities. By the execution and delivery of this Agreement, the Issuer and each of the Guarantors (i) acknowledges that it has, by separate written instrument, irrevocably designated and appointed The Corporation Trust Company (and any successor entity), as its authorized agent upon which process may be served in any suit or proceeding arising out of or relating to this Agreement that may be instituted in any federal or state court in the State of New York or brought under federal or state securities laws, and acknowledges that The Corporation Trust Company has accepted such designation, (ii) submits to the nonexclusive jurisdiction of any such court in any such suit or proceeding, and (iii) agrees that service of process upon The Corporation Trust Company and written notice of said service to the Issuer and the Guarantors shall be deemed in every respect effective service of process upon it in any such suit or proceeding. The Issuer and each of the Guarantors further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of The Corporation Trust Company in full force and effect so long as any of the Securities shall be outstanding. To the extent that the Issuer or any of the Guarantors may acquire any immunity from jurisdiction of any court or from any legal process (whether through service of notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, it hereby irrevocably waives such immunity in respect of this Agreement, to the fullest extent permitted by law.

16 If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Issuer a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers, the Issuer and the Guarantors in accordance with its terms.

Very truly yours,

ISSUER

REGAL CINEMAS CORPORATION

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

GUARANTORS

REGAL CINEMAS, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

R.C. COBB, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

COBB FINANCE CORP.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

REGAL INVESTMENT COMPANY

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

ACT III CINEMAS, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

ACT III THEATRES, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

17 A 3 THEATRES OF TEXAS, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

A 3 THEATRES OF SAN ANTONIO, LTD.

By: A3 Theatres of Texas, Inc., its General Partner

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

GENERAL AMERICAN THEATRES, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

BROADWAY CINEMAS, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

TEMT ALASKA, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

JR CINEMAS, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

EASTGATE THEATRES, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

REGAL CINEMAS HOLDINGS, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary 18 REGAL CINEMAS GROUP, INC.

By: /s/ Peter Brandow

Name: Peter Brandow Title: Secretary

The foregoing Registration Rights Agreement is hereby confirmed and accepted as of the date first above written.

CREDIT SUISSE FIRST BOSTON CORPORATION

By: [ILLEGIBLE]

Name: Title:

LEHMAN BROTHERS INC.

By: [ILLEGIBLE]

Name: Alexander [ILLEGIBLE] Title: [ILLEGIBLE] 19 ANNEX A

Each broker−dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker−dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker−dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker−dealer as a result of market−making activities or other trading activities. The Company and each of the Guarantors has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make a sufficient number of copies of this Prospectus available to any broker−dealer for use in connection with any such resale. See "Plan of Distribution."

A−1 ANNEX B

Each broker−dealer that receives Exchange Securities for its own account in exchange for Initial Securities, where such Initial Securities were acquired by such broker−dealer as a result of market−making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. See "Plan of Distribution."

B−1 ANNEX C

PLAN OF DISTRIBUTION

Each broker−dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker−dealer in connection with resales of Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market−making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date, it will make a sufficient number of copies this prospectus, as amended or supplemented, available to any broker−dealer for use in connection with any such resale. In addition, until , 20 , all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.

The Company will not receive any proceeds from any sale of Exchange Securities by broker−dealers. Exchange Securities received by broker−dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over−the−counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker−dealer or the purchasers of any such Exchange Securities. Any broker−dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker−dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

For a period of 180 days after the Expiration Date the Company will promptly send a sufficient number of additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker−dealer that requests such documents in the Letter of Transmittal. The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker−dealers) against certain liabilities, including liabilities under the Securities Act.

C−1 ANNEX D

CHECK HERE IF YOU ARE A BROKER−DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:

Address:

If the undersigned is not a broker−dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of Exchange Securities. If the undersigned is a broker−dealer that will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market−making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

D−1 QuickLinks

Exhibit 4.8 REGISTRATION RIGHTS AGREEMENT

ANNEX A

ANNEX B PLAN OF DISTRIBUTION

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Exhibit 21.1

Jurisdiction of Subsidiaries of Regal Entertainment Group Organization

Act III Cinemas, Inc. Delaware Act III Inner Loop Theatres, Inc. Delaware Act III Theatres, Inc. Delaware A 3 Theatres of San Antonio, Ltd. Texas A 3 Theatres of Texas, Inc. Delaware Bagley Building Company Michigan Beth Page Theatre Co. Inc. New York Broadway Cinemas, Inc. Oregon CDP Limited Liability Company California Clark−Regal, LLC California Cobb Finance Corp. Alabama Eastgate Theatres, Inc. Oregon Edwards Theatres, Inc. California Florence Theatre Corporation California General American Theatres, Inc. Oregon Green Hills Commons, LLC Tennessee J.R. Cinemas, Inc. Oregon King Reavis Amusement Company California Magnolia Amusement Company Arkansas Morgan Edwards Theatre Corporation California Multimatic Displays, Inc. New York Next Generation Network, Inc. Delaware Olympus Pointe Theatre Center Investors, LLC California Orix RAM Montgomery Venture General Partnership Illinois RAM/U−KOP, LLC Delaware R and S Theaters, Inc. Mississippi R.C. Cobb, Inc. Alabama Regal Cinemas Corporation Delaware Regal Cinemas Group, Inc. Delaware Regal Cinemas Holdings, Inc. Delaware Regal Cinemas, Inc. Tennessee Regal CineMedia Corporation Delaware Regal Entertainment Holdings, Inc. Delaware Regal Investment Company Delaware Rio Rich Theatres Ventures California San Francisco Theatres, Inc. California Siam UATC Company Limited Thailand Corp. Thailand Staten Theatre Group New York Staten Theatre Group II New York TEMT Alaska, Inc. Alaska The Turp Company California Trumball Theatre Corp. Connecticut UAGG Theatre Operating Corp. New York UA International Property Holding, Inc. Colorado UA Mexico Holdings, S.A. de C.V. Mexico U.A.P.R., Inc. Delaware UA Property Holding II, Inc. Colorado UA SHOR LLC Delaware UATC Europe B.V. Netherlands UATC/Heskel Brandon Theatre LLC Delaware

United Artists International, Limited Hong Kong United Artists International Management Company Colorado United Artists/Pacific Media Joint Venture Colorado United Artists Properties I Corp. Colorado United Artists Properties II Corp. Colorado United Artists Realty Company Delaware United Artists Singapore Theatres Pte. Ltd. Singapore United Artists Theatre Circuit, Inc. Maryland United Artists Theatre Company Delaware United Cinema Corporation California United Film Distribution Company of South America Delaware United Stonestown Corporation California Vogue Realty Company California

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Exhibit 23.1

INDEPENDENT AUDITORS' CONSENT

The Board of Directors Regal Entertainment Group:

We consent to the incorporation by reference in the registration statement (No. 333−87958) on Form S−8 of Regal Entertainment Group of our report dated January 24, 2003 with respect to the consolidated balance sheet of Regal Entertainment Group and subsidiaries as of December 26, 2002 and the combined balance sheets of Regal Entertainment Group (a combination of certain theatre interests of Anschutz) as of January 3, 2002, and the related statements of operations, stockholders' equity and parent's investment, and cash flows for the year ended December 26, 2002 and the period under common control (March 1, 2001 to January 3, 2002), which report appears in the December 26, 2002 annual report on Form 10−K of Regal Entertainment Group.

As described in Note 2 to the consolidated financial statements, in 2002 the Company changed its method of accounting for goodwill and other intangible assets.

/s/ KPMG LLP

Nashville, Tennessee January 24, 2003

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Exhibit 23.2

INDEPENDENT AUDITORS' CONSENT

The Board of Directors United Artists Theatre Company

We consent to the incorporation by reference in the registration statement (No. 333−87958) on From S−8 of Regal Entertainment Group of our report dated January 24,2003 with respect to consolidated statements of operations and cash flows of United Artists Theatre Company 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 (Historical Periods), which report appears in the December 26, 2002 annual report on Form 10−K of Regal Entertainment Group.

As described in Note 1 and 2 of 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 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 Historical Company's pre−reorganization consolidated financial statements.

/s/ KPMG LLP

Denver, Colorado February 8, 2002

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Exhibit 99.1

Written Statement of Co−Chief Executive Officers and Chief Financial Officer Pursuant to Section 906 of the Sarbanes−Oxley Act of 2002 (18 U.S.C. Section 1350)

The undersigned, the Co−Chief Executive Officers and the Chief Financial Officer of Regal Entertainment Group, a Delaware corporation (the "Company"), each hereby certifies that, to his/her knowledge on the date hereof:

(a) the Form 10−K of the Company for the fiscal year ended December 26, 2002 filed on the date hereof with the Securities and Exchange Commission (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

/s/ MICHAEL L. CAMPBELL

Michael L. Campbell Co−Chief Executive Officer March 26, 2003

/s/ KURT C. HALL

Kurt C. Hall Co−Chief Executive Officer March 26, 2003

/s/ AMY E. MILES

Amy E. Miles Chief Financial Officer March 26, 2003

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Exhibit 99.1

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