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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Regal Entertainment Grp. Class A (delisted) | NYSE:RGC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 22.99 | 0 | 01:00:00 |
Delaware
|
|
02-0556934
|
(State or Other Jurisdiction of
|
|
(I.R.S. Employer
|
Incorporation or Organization)
|
|
Identification No.)
|
|
|
|
7132 Regal Lane
|
|
|
Knoxville, TN
|
|
37918
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
Large accelerated filer
x
|
|
Accelerated filer
o
|
|
|
|
Non-accelerated filer
o
|
|
Smaller reporting company
o
|
(Do not check if a smaller reporting company)
|
|
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended
March 31, 2015 |
||||
REVENUES:
|
|
|
|
|
|
||
Admissions
|
$
|
515.7
|
|
|
$
|
454.1
|
|
Concessions
|
230.1
|
|
|
198.2
|
|
||
Other operating revenues
|
41.3
|
|
|
39.0
|
|
||
TOTAL REVENUES
|
787.1
|
|
|
691.3
|
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
||
Film rental and advertising costs
|
277.5
|
|
|
234.3
|
|
||
Cost of concessions
|
28.8
|
|
|
26.0
|
|
||
Rent expense
|
107.5
|
|
|
103.7
|
|
||
Other operating expenses
|
211.5
|
|
|
202.2
|
|
||
General and administrative expenses (including share-based compensation of $1.8 and $1.7 for the quarters ended March 31, 2016 and 2015, respectively)
|
21.2
|
|
|
18.6
|
|
||
Depreciation and amortization
|
55.7
|
|
|
54.2
|
|
||
Net loss on disposal and impairment of operating assets and other
|
4.3
|
|
|
1.9
|
|
||
TOTAL OPERATING EXPENSES
|
706.5
|
|
|
640.9
|
|
||
INCOME FROM OPERATIONS
|
80.6
|
|
|
50.4
|
|
||
OTHER EXPENSE (INCOME):
|
|
|
|
|
|
||
Interest expense, net
|
32.5
|
|
|
30.0
|
|
||
Earnings recognized from NCM
|
(12.3
|
)
|
|
(8.8
|
)
|
||
Equity in income of non-consolidated entities and other, net
|
(10.0
|
)
|
|
(9.1
|
)
|
||
TOTAL OTHER EXPENSE, NET
|
10.2
|
|
|
12.1
|
|
||
INCOME BEFORE INCOME TAXES
|
70.4
|
|
|
38.3
|
|
||
PROVISION FOR INCOME TAXES
|
29.7
|
|
|
15.3
|
|
||
NET INCOME
|
40.7
|
|
|
23.0
|
|
||
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST, NET OF TAX
|
—
|
|
|
0.1
|
|
||
NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
|
40.7
|
|
|
$
|
23.1
|
|
EARNINGS PER SHARE OF CLASS A AND CLASS B COMMON STOCK (NOTE 9):
|
|
|
|
|
|
||
Basic
|
$
|
0.26
|
|
|
$
|
0.15
|
|
Diluted
|
$
|
0.26
|
|
|
$
|
0.15
|
|
AVERAGE SHARES OUTSTANDING (in thousands):
|
|
|
|
|
|
||
Basic
|
156,017
|
|
|
155,677
|
|
||
Diluted
|
156,773
|
|
|
156,582
|
|
||
DIVIDENDS DECLARED PER COMMON SHARE
|
$
|
0.22
|
|
|
$
|
0.22
|
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended
March 31, 2015 |
||||
NET INCOME
|
$
|
40.7
|
|
|
$
|
23.0
|
|
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
|
|
|
|
|
||
Change in fair value of interest rate swap transactions
|
(1.3
|
)
|
|
(1.7
|
)
|
||
Amounts reclassified to net income from interest rate swaps
|
1.0
|
|
|
0.8
|
|
||
Change in fair value of available for sale securities
|
—
|
|
|
0.2
|
|
||
Reclassification adjustment for gain on sale of available for sale securities recognized in net income
|
(0.5
|
)
|
|
—
|
|
||
Change in fair value of equity method investee interest rate swaps
|
(0.6
|
)
|
|
(0.6
|
)
|
||
TOTAL OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX
|
(1.4
|
)
|
|
(1.3
|
)
|
||
TOTAL COMPREHENSIVE INCOME, NET OF TAX
|
39.3
|
|
|
21.7
|
|
||
Comprehensive loss attributable to noncontrolling interest, net of tax
|
—
|
|
|
0.1
|
|
||
COMPREHENSIVE INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
|
39.3
|
|
|
$
|
21.8
|
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended
March 31, 2015 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net income
|
$
|
40.7
|
|
|
$
|
23.0
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation and amortization
|
55.7
|
|
|
54.2
|
|
||
Amortization of debt discount
|
0.1
|
|
|
—
|
|
||
Amortization of debt acquisition costs
|
1.2
|
|
|
1.2
|
|
||
Share-based compensation expense
|
1.8
|
|
|
1.7
|
|
||
Deferred income tax benefit
|
(4.2
|
)
|
|
(3.2
|
)
|
||
Net loss on disposal and impairment of operating assets and other
|
4.3
|
|
|
1.9
|
|
||
Equity in income of non-consolidated entities
|
(8.1
|
)
|
|
(5.5
|
)
|
||
Gain on sale of available for sale securities
|
(1.0
|
)
|
|
—
|
|
||
Non-cash loss on interest rate swaps
|
0.1
|
|
|
—
|
|
||
Non-cash rent income
|
(1.7
|
)
|
|
(1.3
|
)
|
||
Excess cash distribution on NCM shares
|
8.6
|
|
|
7.5
|
|
||
Landlord contributions
|
22.2
|
|
|
10.9
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||
Trade and other receivables
|
109.8
|
|
|
87.7
|
|
||
Inventories
|
(0.3
|
)
|
|
(0.7
|
)
|
||
Prepaid expenses and other assets
|
(6.3
|
)
|
|
(25.4
|
)
|
||
Accounts payable
|
(58.1
|
)
|
|
(41.8
|
)
|
||
Income taxes payable
|
25.2
|
|
|
7.6
|
|
||
Deferred revenue
|
17.2
|
|
|
19.2
|
|
||
Accrued expenses and other liabilities
|
(26.4
|
)
|
|
(35.1
|
)
|
||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
180.8
|
|
|
101.9
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Capital expenditures
|
(31.1
|
)
|
|
(29.7
|
)
|
||
Proceeds from disposition of assets
|
1.3
|
|
|
—
|
|
||
Investment in non-consolidated entities
|
(0.7
|
)
|
|
(0.2
|
)
|
||
Proceeds from sale of available for sale securities
|
3.6
|
|
|
—
|
|
||
NET CASH USED IN INVESTING ACTIVITIES
|
(26.9
|
)
|
|
(29.9
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Cash used to pay dividends
|
(35.4
|
)
|
|
(35.8
|
)
|
||
Payments on long-term obligations
|
(6.9
|
)
|
|
(6.7
|
)
|
||
Cash paid for tax withholdings and other
|
(3.2
|
)
|
|
(4.2
|
)
|
||
NET CASH USED IN FINANCING ACTIVITIES
|
(45.5
|
)
|
|
(46.7
|
)
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
108.4
|
|
|
25.3
|
|
||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
219.6
|
|
|
147.1
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
328.0
|
|
|
$
|
172.4
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|
|
|
|
|
||
Cash paid for income taxes
|
$
|
4.2
|
|
|
$
|
1.5
|
|
Cash paid for interest, net of amounts capitalized
|
$
|
42.5
|
|
|
$
|
40.6
|
|
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Investment in NCM
|
$
|
9.9
|
|
|
$
|
9.0
|
|
Increase in property and equipment and other from amended lease financing arrangements
|
$
|
8.1
|
|
|
$
|
2.0
|
|
|
As of the period ended
|
|
For the period ended
|
||||||||||||||||
|
Investment
in
NCM
|
|
Deferred
Revenue
|
|
Cash
Received
|
|
Earnings
recognized
from NCM
|
|
Other
NCM
Revenues
|
||||||||||
Balance as of and for the period ended December 31, 2015
|
$
|
157.4
|
|
|
$
|
(426.7
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Receipt of additional common units(1)
|
9.9
|
|
|
(9.9
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Receipt of excess cash distributions(2)
|
(4.5
|
)
|
|
—
|
|
|
11.3
|
|
|
(6.8
|
)
|
|
—
|
|
|||||
Receipt under tax receivable agreement(2)
|
(4.1
|
)
|
|
—
|
|
|
10.5
|
|
|
(6.4
|
)
|
|
—
|
|
|||||
Revenues earned under ESA(3)
|
—
|
|
|
—
|
|
|
4.3
|
|
|
—
|
|
|
(4.3
|
)
|
|||||
Amortization of deferred revenue(4)
|
—
|
|
|
2.8
|
|
|
—
|
|
|
—
|
|
|
(2.8
|
)
|
|||||
Equity income (loss) attributable to additional common units(5)
|
(0.9
|
)
|
|
—
|
|
|
—
|
|
|
0.9
|
|
|
—
|
|
|||||
Balance as of and for the period ended March 31, 2016
|
$
|
157.8
|
|
|
$
|
(433.8
|
)
|
|
$
|
26.1
|
|
|
$
|
(12.3
|
)
|
|
$
|
(7.1
|
)
|
(1)
|
On March 17, 2016, we received from National CineMedia approximately
0.7 million
newly issued common units of National CineMedia in accordance with the annual adjustment provisions of the Common Unit Adjustment Agreement. The Company recorded the additional common units (Additional Investments Tranche) at fair value using the available closing stock price of NCM, Inc. as of the date on which the units were issued. With respect to the common units issued on March 17, 2016, the Company recorded an increase to its investment in National CineMedia of
$9.9 million
with a corresponding increase to deferred revenue. Such deferred revenue amount is being amortized to advertising revenue over the remaining term of the exhibitor services agreement, between RCI and National CineMedia ("ESA") following the units of revenue method as described in (4) below. This transaction caused a proportionate increase in the Company's Additional Investments Tranche and increased our ownership share in National CineMedia to approximately
27.1 million
common units. As a result, on a fully diluted basis, we own a
19.7%
interest in NCM, Inc. as of
March 31, 2016
.
|
(2)
|
During the quarter ended
March 31, 2016
, the Company received
$21.8 million
in cash distributions from National CineMedia, exclusive of receipts for services performed under the ESA (including payments of
$10.5 million
received under the tax receivable agreement described in Note 4 to the 2015 Audited Consolidated Financial Statements of the Company). Approximately
$8.6 million
of these cash distributions received during the quarter ended
March 31, 2016
were attributable to the Additional Investments Tranche and were recognized as a reduction in our investment in National CineMedia. The remaining amounts were recognized in equity earnings during the period and have been included as components of "Earnings recognized from NCM" in the accompanying unaudited condensed consolidated financial statements.
|
(3)
|
The Company recorded other revenues, excluding the amortization of deferred revenue, of approximately
$4.3 million
for the quarter ended
March 31, 2016
pertaining to our agreements with National CineMedia, including per patron and per digital screen theatre access fees (net of payments of
$3.1 million
for the quarter ended
March 31, 2016
for on-screen advertising time provided to our beverage concessionaire) and other NCM revenues. These advertising revenues are presented as a component of "Other operating revenues" in the Company’s unaudited condensed consolidated financial statements.
|
(4)
|
Amounts represent amortization of ESA modification fees received from NCM to advertising revenue utilizing the units of revenue amortization method. These advertising revenues are presented as a component of "Other operating revenues" in the Company’s unaudited condensed consolidated financial statements.
|
(5)
|
Amounts represent the Company’s share in the net income (loss) of National CineMedia with respect to the Additional Investments Tranche. Such amounts have been included as a component of "Earnings recognized from NCM" in the unaudited condensed consolidated financial statements.
|
|
Quarter Ended
December 31, 2015 |
|
Quarter Ended
January 1, 2015 |
||||
Revenues
|
$
|
136.4
|
|
|
$
|
123.1
|
|
Income from operations
|
61.5
|
|
|
61.7
|
|
||
Net income
|
49.0
|
|
|
45.7
|
|
Balance as of December 31, 2015
|
$
|
160.7
|
|
Equity contributions
|
0.7
|
|
|
Equity in earnings of DCIP(1)
|
8.6
|
|
|
Receipt of cash distributions
|
—
|
|
|
Change in fair value of equity method investee interest rate swap transactions
|
(1.0
|
)
|
|
Balance as of March 31, 2016
|
$
|
169.0
|
|
(1)
|
Represents the Company’s share of the net income of DCIP. Such amount is presented as a component of “Equity in income of non-consolidated entities and other, net” in the accompanying unaudited condensed consolidated statement of income.
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended
March 31, 2015 |
||||
Net revenues
|
$
|
40.6
|
|
|
$
|
40.7
|
|
Income from operations
|
23.4
|
|
|
23.8
|
|
||
Net income
|
18.5
|
|
|
17.4
|
|
Balance as of December 31, 2015
|
$
|
(10.0
|
)
|
Equity in earnings attributable to Open Road Films
|
—
|
|
|
Balance as of March 31, 2016
|
$
|
(10.0
|
)
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended
March 31, 2015 |
||||
Revenues
|
$
|
35.5
|
|
|
$
|
36.8
|
|
Income (loss) from operations
|
(25.3
|
)
|
|
3.1
|
|
||
Net income (loss)
|
(26.3
|
)
|
|
2.5
|
|
Balance as of December 31, 2015
|
$
|
7.5
|
|
Equity in earnings attributable to AC JV, LLC(1)
|
0.3
|
|
|
Balance as of March 31, 2016
|
$
|
7.8
|
|
(1)
|
Represents the Company’s recorded share of the net income of
AC JV, LLC
. Such amount is presented as a component of “Equity in income of non-consolidated entities and other, net” in the accompanying unaudited condensed consolidated statement of income.
|
Property and equipment
|
$
|
0.9
|
|
Goodwill
|
8.3
|
|
|
Total purchase price
|
$
|
9.2
|
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
Regal Cinemas Amended Senior Credit Facility, net of debt discount
|
$
|
956.4
|
|
|
$
|
958.8
|
|
Regal 5
3
/
4
% Senior Notes Due 2022
|
775.0
|
|
|
775.0
|
|
||
Regal 5
3
/
4
% Senior Notes Due 2025
|
250.0
|
|
|
250.0
|
|
||
Regal 5
3
/
4
% Senior Notes Due 2023
|
250.0
|
|
|
250.0
|
|
||
Lease financing arrangements, weighted average interest rat
e of 11.30% as o
f March 31, 2016, maturing in various installments through November 2028
|
94.9
|
|
|
89.4
|
|
||
Capital lease obligations, 8.5% to 10.7%, maturing in various installments through December 2030
|
10.6
|
|
|
11.1
|
|
||
Other
|
7.0
|
|
|
8.1
|
|
||
Total debt obligations
|
2,343.9
|
|
|
2,342.4
|
|
||
Less current portion
|
25.7
|
|
|
27.4
|
|
||
Less debt issuance costs, net of accumulated amortization of $17.3 and $16.2, respectively (1)
|
$
|
29.6
|
|
|
30.7
|
|
|
Total debt obligations, less current portion and debt issuance costs
|
$
|
2,288.6
|
|
|
$
|
2,284.3
|
|
Unvested at beginning of period
|
773,643
|
|
Granted during the period
|
261,119
|
|
Vested during the period
|
(512,591
|
)
|
Forfeited during the period
|
(7,873
|
)
|
Conversion of performance shares during the period
|
262,476
|
|
Unvested at end of period
|
776,774
|
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended
March 31, 2015 |
||||||||||||
|
Class A
|
|
Class B
|
|
Class A
|
|
Class B
|
||||||||
Basic earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|||||
Numerator:
|
|
|
|
|
|
|
|
|
|
||||||
Allocation of earnings
|
$
|
34.5
|
|
|
$
|
6.2
|
|
|
$
|
19.6
|
|
|
$
|
3.5
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding (in thousands)
|
132,308
|
|
|
23,709
|
|
|
131,968
|
|
|
23,709
|
|
||||
Basic earnings per share
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
||||||||
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Allocation of earnings for basic computation
|
$
|
34.5
|
|
|
$
|
6.2
|
|
|
$
|
19.6
|
|
|
$
|
3.5
|
|
Reallocation of earnings as a result of conversion of Class B to Class A shares
|
6.2
|
|
|
—
|
|
|
3.5
|
|
|
—
|
|
||||
Reallocation of earnings to Class B shares for effect of other dilutive securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Allocation of earnings
|
$
|
40.7
|
|
|
$
|
6.2
|
|
|
$
|
23.1
|
|
|
$
|
3.5
|
|
Denominator:
|
|
|
|
|
|
|
|
||||||||
Number of shares used in basic computation (in thousands)
|
132,308
|
|
|
23,709
|
|
|
131,968
|
|
|
23,709
|
|
||||
Weighted average effect of dilutive securities (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Add:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Conversion of Class B to Class A common shares outstanding
|
23,709
|
|
|
—
|
|
|
23,709
|
|
|
—
|
|
||||
Restricted stock and performance shares
|
756
|
|
|
—
|
|
|
905
|
|
|
—
|
|
||||
Number of shares used in per share computations (in thousands)
|
156,773
|
|
|
23,709
|
|
|
156,582
|
|
|
23,709
|
|
||||
Diluted earnings per share
|
$
|
0.26
|
|
|
$
|
0.26
|
|
|
$
|
0.15
|
|
|
$
|
0.15
|
|
Nominal Amount
|
|
Effective Date
|
|
Fixed Rate
|
|
Receive Rate
|
|
Expiration Date
|
Designated as Cash Flow Hedge
|
Gross Fair Value at March 31, 2016
|
Balance Sheet Location
|
$150.0 million
|
|
April 2, 2015
|
|
1.220%
|
|
1-month LIBOR*
|
|
December 31, 2016
|
Yes
|
$(0.5) million
|
See Note 12
|
$200.0 million
|
|
June 30, 2015
|
|
2.165%
|
|
1-month LIBOR*
|
|
June 30, 2018
|
Yes
|
$(5.3) million
|
See Note 12
|
|
|
After-tax Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)
|
|||||
|
|
Quarter Ended
March 31, 2016 |
Quarter Ended
March 31, 2015 |
||||
Derivatives designated as cash flow hedges:
|
|
|
|
||||
Interest rate swaps
|
|
$
|
(1.3
|
)
|
$
|
(1.7
|
)
|
|
|
Pre-tax Amounts Reclassified from Accumulated Other Comprehensive Loss into Interest Expense, net
|
|||||
|
|
Quarter Ended
March 31, 2016 |
Quarter Ended
March 31, 2015 |
||||
Derivatives designated as cash flow hedges:
|
|
|
|
||||
Interest rate swaps(1)
|
|
$
|
1.7
|
|
$
|
1.3
|
|
(1)
|
We estimate that
$1.8 million
of deferred pre-tax losses attributable to these interest rate swaps will be reclassified into earnings as interest expense during the next 12 months as the underlying hedged transactions occur.
|
|
|
Interest Rate Swaps
|
||||||
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended March 31, 2015
|
||||
Accumulated other comprehensive loss, net, beginning of period
|
|
$
|
(2.7
|
)
|
|
$
|
(2.9
|
)
|
Change in fair value of interest rate swap transactions (effective portion), net of taxes of $0.9 and $1.1, respectively
|
|
(1.3
|
)
|
|
(1.7
|
)
|
||
Amounts reclassified from accumulated other comprehensive loss to interest expense, net of taxes of $0.7 and $0.5, respectively
|
|
1.0
|
|
|
0.8
|
|
||
Accumulated other comprehensive loss, net, end of period
|
|
$
|
(3.0
|
)
|
|
$
|
(3.8
|
)
|
|
|
Pre-tax Gain (Loss) Recognized in Interest Expense, net
|
||||||
|
|
Quarter Ended
March 31, 2016 |
|
Quarter Ended
March 31, 2015 |
||||
Derivatives designated as cash flow hedges (ineffective portion):
|
|
|
|
|
||||
Interest rate swaps(1)
|
|
$
|
0.8
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Derivatives
not
designated as cash flow hedges:
|
|
|
|
|
||||
Interest rate swaps (2)
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Amounts represent the ineffective portion of the change in fair value of the hedging derivatives and are recorded as a reduction of interest expense in the consolidated financial statements.
|
(2)
|
Amounts represent the change in fair value of the former hedging derivatives and are recorded as a reduction of interest expense in the consolidated financial statements from the de-designation date of April 2, 2015. On June 30, 2015,
one
of these interest rate swap agreements designated to hedge
$200.0 million
of variable rate debt obligations expired. The remaining interest rate swap agreement (designated to hedge
$100.0 million
of variable rate debt obligations) expired on December 31, 2015.
|
|
|
|
|
Fair Value Measurements at March 31, 2016
|
||||||||||||
|
Balance Sheet Location
|
Total Carrying
Value at March 31, 2016 |
|
Quoted prices in
active market
(Level 1)
|
|
Significant other
observable inputs
(Level 2)
|
|
Significant
unobservable inputs
(Level 3)
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap designated as cash flow hedge (2)
|
Accrued Expenses
|
$
|
3.2
|
|
|
$
|
—
|
|
|
$
|
3.2
|
|
|
$
|
—
|
|
Interest rate swap designated as cash flow hedge (2)
|
Other Non-Current Liabilities
|
$
|
2.6
|
|
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
—
|
|
Total liabilities at fair value
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
$
|
5.8
|
|
|
$
|
—
|
|
|
|
Total Carrying
Value at December 31, 2015 |
|
Fair Value Measurements at December 31, 2015
|
||||||||||||
|
Balance Sheet Location
|
Quoted prices in
active market (Level 1) |
|
Significant other
observable inputs (Level 2) |
|
Significant
unobservable inputs (Level 3) |
||||||||||
|
|
|
|
(in millions)
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Equity securities, available for sale (1)
|
Other Non-Current Assets
|
$
|
3.4
|
|
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total assets at fair value
|
|
$
|
3.4
|
|
|
$
|
3.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swap designated as cash flow hedge (2)
|
Accrued Expenses
|
$
|
3.1
|
|
|
$
|
—
|
|
|
$
|
3.1
|
|
|
$
|
—
|
|
Interest rate swap designated as cash flow hedge (2)
|
Other Non-Current Liabilities
|
$
|
1.9
|
|
|
$
|
—
|
|
|
$
|
1.9
|
|
|
$
|
—
|
|
Total liabilities at fair value
|
|
$
|
5.0
|
|
|
$
|
—
|
|
|
$
|
5.0
|
|
|
$
|
—
|
|
(1)
|
As of December 31, 2015, the Company held
322,780
common shares (accounted for as available for sale securities) of RealD, Inc., as described further in Note 2—"Investments." The fair value of the RealD, Inc. shares was determined using RealD, Inc.’s publicly traded common stock price (Level 1 of the valuation hierarchy) of
$10.55
per share as of December 31, 2015. On February 24, 2016, RealD, Inc. stockholders approved an all-cash merger whereby Rizvi Traverse Management, LLC acquired RealD, Inc. for
$11.00
per share. Under the terms of the merger agreement, RealD, Inc. shareholders received
$11.00
in cash for each share of RealD, Inc.’s common stock. On March 24, 2016, the Company received approximately
$3.6 million
in cash consideration for it's remaining
322,780
RealD, Inc. common shares. As a result of the transaction, the Company recorded a gain of approximately
$1.0 million
during the quarter ended March 31, 2016.
|
(2)
|
The fair value of the Company’s interest rate swaps described in Note 11—"Derivative Instruments" is based on Level 2 inputs, which include observable inputs such as dealer quoted prices for similar assets or liabilities, and represents the estimated amount Regal Cinemas would receive or pay to terminate the agreements taking into consideration various factors, including current interest rates, credit risk and counterparty credit risk. The counterparties to the Company’s interest rate swaps are major financial institutions. The Company evaluates the bond ratings of the financial institutions and believes that credit risk is at an acceptably low level.
|
|
March 31, 2016
|
|
December 31, 2015
|
||||
|
(in millions)
|
||||||
Carrying value
|
$
|
2,231.4
|
|
|
$
|
2,233.8
|
|
Fair value
|
$
|
2,272.6
|
|
|
$
|
2,226.6
|
|
|
Interest rate swaps
|
|
Available for sale securities
|
|
Equity method investee interest rate swaps
|
|
Total
|
||||||||
Balance as of December 31, 2015
|
$
|
(2.7
|
)
|
|
$
|
0.5
|
|
|
$
|
0.1
|
|
|
$
|
(2.1
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Change in fair value of interest rate swap transactions
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
||||
Amounts reclassified to net income from interest rate swaps
|
1.0
|
|
|
—
|
|
|
—
|
|
|
1.0
|
|
||||
Reclassification adjustment for gain on sale of available for sale securities recognized in net income
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
||||
Change in fair value of equity method investee interest rate swaps
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
(0.3
|
)
|
|
(0.5
|
)
|
|
(0.6
|
)
|
|
(1.4
|
)
|
||||
Balance as of March 31, 2016
|
$
|
(3.0
|
)
|
|
$
|
—
|
|
|
$
|
(0.5
|
)
|
|
$
|
(3.5
|
)
|
|
Interest rate swaps
|
|
Available for sale securities
|
|
Equity method investee interest rate swaps
|
|
Total
|
||||||||
Balance as of January 1, 2015
|
$
|
(2.9
|
)
|
|
$
|
0.7
|
|
|
$
|
0.7
|
|
|
$
|
(1.5
|
)
|
Other comprehensive income (loss), net of tax
|
|
|
|
|
|
|
|
||||||||
Change in fair value of interest rate swap transactions
|
(1.7
|
)
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
||||
Amounts reclassified to net income from interest rate swaps
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||
Change in fair value of available for sale securities
|
—
|
|
|
0.2
|
|
|
—
|
|
|
0.2
|
|
||||
Change in fair value of equity method investee interest rate swaps
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
(0.6
|
)
|
||||
Total other comprehensive income (loss), net of tax
|
(0.9
|
)
|
|
0.2
|
|
|
(0.6
|
)
|
|
(1.3
|
)
|
||||
Balance as of March 31, 2015
|
$
|
(3.8
|
)
|
|
$
|
0.9
|
|
|
$
|
0.1
|
|
|
$
|
(2.8
|
)
|
•
|
We demonstrated our commitment to providing incremental value to our stockholders. Total cash dividends paid to our stockholders during the
Q1 2016 Period
totaled approximately
$35.4 million
.
|
•
|
We continued to embrace innovative concepts that generate incremental revenue and cash flows for the Company and deliver a premium movie-going experience for our customers on several complementary fronts:
|
◦
|
First, we continued to improve customer amenities, primarily through the installation of luxury reclining seats. With respect to our luxury reclining seating initiative, as of March 31, 2016, we offered luxury reclining seating in 872 auditoriums at 79 theatre locations. We expect to install luxury reclining seating in approximately 40-45 locations during 2016 and expect to outfit approximately 30% of the total
|
◦
|
Second, to address consumer trends and customer preferences, we have continued to expand our menu of food and alcoholic beverage products. The enhancement of our food and alcoholic beverage offerings has had a positive effect on our operating results and we expect to continue to invest in such offerings in our theatres. As of March 31, 2016, we offered an expanded menu of food in 191 locations and alcoholic beverages in 116 locations and during 2016, we expect to introduce an expanded menu of food in approximately 65 locations and alcoholic beverages in approximately 75 locations.
|
◦
|
Third, we maintain a frequent moviegoer loyalty program, named the Regal Crown Club®, to actively engage our core customers. Regal Crown Club® members are eligible for specified awards, such as concession items, based on purchases made at our participating theatres. During the Q1 2016 Period, we completed the national rollout of the new Regal Crown Club®. Members of the new program can earn unlimited credits and have the ability to redeem credits when they desire in an online reward center where members can select the rewards of their choice. We believe these changes allow us to offer more relevant offers to our members and increase customer engagement in the program. As of March 31, 2016, we had approximately 12.7 million active members in the Regal Crown Club®, making it the largest loyalty program in our industry.
|
•
|
We continued to actively manage our asset base during the
Q1 2016 Period
by reopening 5 screens at an existing theatre and closing five underperforming theatres with 37 screens, ending the
Q1 2016 Period
with
567
theatres and
7,329
screens.
|
|
Q1 2016 Period
|
|
Q1 2015 Period
|
||||||||||
|
$
|
|
% of
Revenue
|
|
$
|
|
% of
Revenue
|
||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||
Admissions
|
$
|
515.7
|
|
|
65.5
|
%
|
|
$
|
454.1
|
|
|
65.7
|
%
|
Concessions
|
230.1
|
|
|
29.2
|
|
|
198.2
|
|
|
28.7
|
|
||
Other operating revenues
|
41.3
|
|
|
5.3
|
|
|
39.0
|
|
|
5.6
|
|
||
Total revenues
|
787.1
|
|
|
100.0
|
|
|
691.3
|
|
|
100.0
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||
Film rental and advertising costs(1)
|
277.5
|
|
|
53.8
|
|
|
234.3
|
|
|
51.6
|
|
||
Cost of concessions(2)
|
28.8
|
|
|
12.5
|
|
|
26.0
|
|
|
13.1
|
|
||
Rent expense(3)
|
107.5
|
|
|
13.7
|
|
|
103.7
|
|
|
15.0
|
|
||
Other operating expenses(3)
|
211.5
|
|
|
26.9
|
|
|
202.2
|
|
|
29.2
|
|
||
General and administrative expenses (including share-based compensation expense of $1.8 and $1.7 for the Q1 2016 Period and the Q1 2015 Period, respectively)(3)
|
21.2
|
|
|
2.7
|
|
|
18.6
|
|
|
2.7
|
|
||
Depreciation and amortization(3)
|
55.7
|
|
|
7.1
|
|
|
54.2
|
|
|
7.8
|
|
||
Net loss on disposal and impairment of operating assets(3)
|
4.3
|
|
|
0.5
|
|
|
1.9
|
|
|
0.3
|
|
||
Total operating expenses(3)
|
706.5
|
|
|
89.8
|
|
|
640.9
|
|
|
92.7
|
|
||
Income from operations(3)
|
80.6
|
|
|
10.2
|
|
|
50.4
|
|
|
7.3
|
|
||
Interest expense, net(3)
|
32.5
|
|
|
4.1
|
|
|
30.0
|
|
|
4.3
|
|
||
Earnings recognized from NCM(3)
|
(12.3
|
)
|
|
1.6
|
|
|
(8.8
|
)
|
|
1.3
|
|
||
Equity in income of non-consolidated entities and other, net(3)
|
(10.0
|
)
|
|
1.3
|
|
|
(9.1
|
)
|
|
1.3
|
|
||
Provision for income taxes(3)
|
29.7
|
|
|
3.8
|
|
|
15.3
|
|
|
2.2
|
|
||
Net income attributable to controlling interest(3)
|
$
|
40.7
|
|
|
5.2
|
|
|
$
|
23.1
|
|
|
3.3
|
|
Attendance (in thousands)
|
53,297
|
|
|
*
|
|
|
50,605
|
|
|
*
|
|
||
Average ticket price(4)
|
$
|
9.68
|
|
|
*
|
|
|
$
|
8.97
|
|
|
*
|
|
Average concessions per patron(5)
|
$
|
4.32
|
|
|
*
|
|
|
$
|
3.92
|
|
|
*
|
|
(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.
|
(4)
|
Calculated as admissions revenues/attendance.
|
(5)
|
Calculated as concessions revenues/attendance.
|
|
Q1 2016 Period
|
|
Q1 2015 Period
|
||||
EBITDA
|
$
|
158.6
|
|
|
$
|
122.6
|
|
Interest expense, net
|
(32.5
|
)
|
|
(30.0
|
)
|
||
Provision for income taxes
|
(29.7
|
)
|
|
(15.3
|
)
|
||
Deferred income taxes
|
(4.2
|
)
|
|
(3.2
|
)
|
||
Changes in operating assets and liabilities
|
61.1
|
|
|
11.5
|
|
||
Landlord contributions
|
22.2
|
|
|
10.9
|
|
||
Other items, net
|
5.3
|
|
|
5.4
|
|
||
Net cash provided by operating activities
|
$
|
180.8
|
|
|
$
|
101.9
|
|
Period
|
|
(a)
Total Number of Shares Purchased
|
|
(b)
Average Price Paid per Share
|
|
(c)
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
(d)
Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet be Purchased Under the Plans or Programs
|
|||||
January 1, 2016 - January 31, 2016
|
|
175,711
|
|
|
$
|
17.79
|
|
|
—
|
|
|
—
|
|
February 1, 2016 - February 29, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
March 1, 2016 - March 31, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
175,711
|
|
|
$
|
17.79
|
|
|
—
|
|
|
—
|
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a) Certification of Chief Executive Officer of Regal
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a) Certification of Chief Financial Officer of Regal
|
|
|
|
|
32
|
|
|
Section 1350 Certifications
|
|
|
|
|
101
|
|
|
Financial statements from the quarterly report on Form 10-Q of Regal Entertainment Group for the quarter ended March 31, 2016, filed on May 10, 2016, formatted in XBRL: (i) the Unaudited Condensed Consolidated Balance Sheets, (ii) the Unaudited Condensed Consolidated Statements of Income, (iii) the Unaudited Condensed Consolidated Statements of Comprehensive Income, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows and (v) the Notes to Unaudited Condensed Consolidated Financial Statements tagged as detailed text
|
|
REGAL ENTERTAINMENT GROUP
|
|
|
|
|
Date: May 10, 2016
|
By:
|
/s/ AMY E. MILES
|
|
|
Amy E. Miles
|
|
|
Chief Executive Officer (Principal Executive Officer) and Chair of the Board of Directors
|
|
|
|
Date: May 10, 2016
|
By:
|
/s/ DAVID H. OWNBY
|
|
|
David H. Ownby
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)
|
Exhibit
Number
|
|
Description
|
|
|
|
|
|
31.1
|
|
|
Rule 13a-14(a) Certification of Chief Executive Officer of Regal
|
|
|
|
|
31.2
|
|
|
Rule 13a-14(a) Certification of Chief Financial Officer of Regal
|
|
|
|
|
32
|
|
|
Section 1350 Certifications
|
|
|
|
|
101
|
|
|
Financial statements from the quarterly report on Form 10-Q of Regal Entertainment Group for the quarter ended March 31, 2016, filed on May 10, 2016, formatted in XBRL: (i) the Unaudited Condensed Consolidated Balance Sheets, (ii) the Unaudited Condensed Consolidated Statements of Income, (iii) the Unaudited Condensed Consolidated Statements of Comprehensive Income, (iv) the Unaudited Condensed Consolidated Statements of Cash Flows and (v) the Notes to Unaudited Condensed Consolidated Financial Statements tagged as detailed text
|
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