Jan. 22--Faced with challenging economic times, Knoxville-based Regal Entertainment Group on Wednesday cut its quarterly dividend and announced a new "capital strategy" that will free up $100 million in cash this year.

A 40 percent cut in dividend payments will save the company $75 million this year and reduced capital expenditures will free up another $25 million, Chief Financial Officer Amy Miles said in a conference call with financial analysts.

Regal will pay a quarterly dividend of 18 cents per share on March 17 to shareholders of record on March 5, down from a dividend of 30 cents per share in the prior quarter.

This "conservative capital strategy is only prudent given the difficult lending environment" and uncertainty about the length of the recession, CEO Mike Campbell said.

Also, the nation's largest theater operator amended a senior credit agreement as part of its new strategy, which will allow it to take advantage of changing interest rates as it pays down debt, Miles said.

The company has a total debt of about $2 billion.

In November, Standard & Poor's Ratings Services put Regal Entertainment's ratings on CreditWatch with negative implications because of its higher debt leverage and concerns over its ability to meet financial lending requirements.

Despite the slumping economy, Campbell told analysts the company's financial health is strong and its future is upbeat.

"We remain excited about the future opportunities of Regal over the next several years," Campbell said.

Box office revenues for 2009 are off to a strong start -- up 23 percent from the same period last year. And, 2008 revenues were only slightly below the record set in 2007, Campbell said.

Going forward, Campbell said premium-priced 3D and IMAX movies should provide increased revenues.

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