Alliance Atlantis Announces Strong Second Quarter Results Driven by Core Broadcasting Business and CSI Franchise

Alliance Atlantis Announces Strong Second Quarter Results Driven by Core Broadcasting Business and CSI Franchise

Highlights:

- 21% increase in Consolidated EBITDA to $47 million - Total advertising sales up 22% year over year - CSI revenue up 119% year over year - Total Debt Prepayments year to date US$52 million

TSX: AAC.A, AAC.NV.B

TORONTO, Aug. 11 /PRNewswire-FirstCall/ -- Alliance Atlantis Communications Inc. reported strong earnings for the quarter ended June 30, 2005, driven by the outstanding performance of its broadcast channels and the CSI franchise.

"Our strategy of focusing on growing our broadcast business, maximizing the value of the CSI franchise and strengthening our balance sheet continues to provide exceptional results," said Phyllis Yaffe, Chief Executive Officer. "Our broadcast channels experienced strong advertising and subscriber growth, while the overall financial performance of the first two CSIs and the addition of CSI: NY have enhanced the franchise value."

Q2 Financial Results

Revenue

Broadcasting revenue increased 16% over the prior year's period to $73 million. This reflected a strong 22% growth in total advertising sales and a solid 10% growth in subscriber revenue. English language analog channel advertising revenue increased 19% during the quarter. This reflects strong growth in audiences, particularly for Showcase Television, Food Network Canada and HGTV Canada. The digital channels recorded a 42% growth in revenue driven by significant gains in both advertising and subscriber revenue.

Entertainment recorded exceptional revenue growth of 60% during the quarter primarily due to continued outstanding performance for the entire CSI franchise, which consists of CSI: Crime Scene Investigation, CSI: Miami and CSI: NY. Revenue gains are attributable to the addition of CSI: NY to the franchise, higher franchise video/DVD revenue, as well as strong first and second window sales both internationally and in the United States.

Motion Picture Distribution revenue was $88 million, representing a decrease of 43% compared to last year's period. This was primarily related to the video/DVD release of The Lord of the Rings: Return of the King in Canada and Spain in the second quarter of 2004.

EBITDA

Broadcasting recorded EBITDA of $25 million, an increase of 18% over the prior year's period. This represented an EBITDA margin of 34% during the quarter, a slight improvement year over year.

Entertainment generated EBITDA of $22 million, representing more than a four-fold increase year over year. This was due to higher revenue, as noted above, as well as significantly higher operating margins during the quarter.

Motion Picture Distribution EBITDA declined to $10 million from $20 million in last year's quarter. This is primarily due to the revenue decline discussed above, and one-time charges related to acquisition opportunities and professional fees.

Corporate and Other expenses were $10 million compared to $6 million in the prior year's period. "Overall operating expenses increased due to retirement allowances as well as higher professional fees including those associated with Sarbanes-Oxley," said David Lazzarato, Executive Vice President and Chief Financial Officer. "We will bring a renewed focus on reducing our corporate costs over the balance of this year and in 2006," he added.

Amortization

Amortization of $3 million was down by $2 million from the prior year's period. This is primarily due to lower amortization of development costs as a result of having exited the production business.

Interest

Interest expense decreased from $16 million to $5 million in the quarter primarily as a result of the debt refinancing undertaken by the Company in December 2004. The Company's average cost of borrowing in the quarter was 4.8% as compared to 11.5% in the prior year's quarter.

Minority Interest

Minority Interest primarily represents the Movie Distribution Income Fund's share of earnings from Motion Picture Distribution LP. Minority Interest was $3 million in the quarter, down from $10 million in last year's period due to lower earnings from the LP.

Earnings From Operations Before Undernoted And Discontinued Operations
(Operating Earnings)

Operating earnings for the three months ended June 30, 2005 were $35 million compared to $8 million for the prior year's period. Net operating earnings for the three months ended June 30, 2005 were $17 million, compared to $9 million in last year's quarter. On a per share diluted basis, net operating earnings were $0.38 during the quarter compared to $0.21 in the comparable period last year.

Foreign Exchange Losses

Foreign exchange losses were $8 million for the quarter compared to $2 million in the prior year's period. The majority of losses in the current quarter relate to the Company's motion picture distribution international structure, involving multiple currencies, resulting in unrealized losses on its long term investment in foreign operations. In addition, the Company incurred unrealized losses on the unhedged portion of its long term US dollar denominated debt.

Income Taxes

Provision for income taxes was $17 million for the quarter compared to a recovery of $2 million in the prior year's period. This increase reflects the significantly higher earnings in the quarter compared to the prior year, as well as not tax-effecting losses relating to Motion Picture Distribution LP's Spanish operations and some of the Company's non-wholly owned channels.

Net Earnings

The net earnings for the three months ended June 30, 2005 was $11 million compared to net earnings of $3 million for the three months ended June 30, 2004. On a basic and diluted basis, net earnings per share were $0.25 and $0.24, respectively, for the three months ended June 30, 2005, compared to basic and diluted net earnings per share of $0.07 for the three months ended June 30, 2004.

Liquidity

The Company's net debt decreased from the prior year by $60 million to $456 million as a result of improvements in our free cash flow. At the end of the quarter the Company had unused corporate credit facilities of $148 million. Subsequent to the quarter the Company made prepayments on its credit facilities in an aggregate amount of US$25 million. Year to date the Company has made prepayments totaling US$52 million.

Accounting Guideline 15 Variable Interest Entities ("AcG 15")

As a result of our review of the implications of AcG 15, the Company has reported an increase in assets and liabilities of $109.0 million at June 30, 2005. The majority of this amount relates to assets and liabilities held in respect of various tax shelter arrangements which provided financing for production activities in 1995. Under these arrangements the Company has an obligation to make certain future payments which obligation is effectively secured by financing loans that the Company has provided to the investors in these plans. Historically, these obligations and financing loans have been reported on a net basis. The Company has determined that it is required to consolidate the limited partnerships involved in these tax shelter arrangements. The consolidation of these entities increased assets and liabilities by $101 million. The remaining increase in assets and liabilities is due to the consolidation of an immaterial third party production company and a trust related to Motion Picture Distribution long term incentive plans.

Operating Highlights

Broadcasting

Our broadcasting group experienced some significant milestones during the second quarter of 2005.

HGTV enjoyed its most successful Spring season to date, recording increases in average minute audiences driven by strong performances by a number of Canadian shows. As well, History Television's broadcast of Worst Jobs in History generated the highest AMA for a short run series in the network's history.(1)

In June, the Company was the recipient of 23 awards at the Promax & BDA conference that took place in New York City. In particular, the "Thanks, Showcase" campaign was named the campaign that had the most impact this year, receiving the gold award for Total Package Design: Image On-Air and Print Combination.

BBC Canada tied with Showcase Action as the No. 1 ranked new specialty network for Women 25-54 out of all new specialty channels.(2)

Recent statistics published by Decima Research indicate that there is a growing number of Canadians subscribing to digital television - as of March 2005, 45% of Canadian television subscribers have digital cable, satellite, wireless or Telco TV in their home.(3) This number is expected to grow to 57% by the end of 2006.(4) As the number of digital households grows, Alliance Atlantis has strongly-branded channels with demonstrated momentum and is well-positioned to lead the industry in the digital realm. Alliance Atlantis' 8 New Specialty networks account for 17% of the English Canadian Commercial New Specialty networks - but generate 39% of the total Adult 25-54 average minute audience across all digital channels.(5)

Entertainment

The Company continues to leverage the CSI franchise internationally, and international sales of CSI: Crime Scene Investigation, CSI: Miami and CSI: NY remain strong and continue to grow. CSI:NY was the highest rated new show on CBS during the 2004/05 broadcast season and is selling well internationally.(6)

During its fifth broadcast season the original series CSI: Crime Scene Investigation hit new heights in terms of audience numbers and creativity. The series ended the broadcast season as the No. 1 drama on U.S. television.(7) Additionally, CSI: Crime Scene Investigation ended its season on an unprecedented high with the Emmy(R)-nominated season finale, directed by Quentin Tarantino, being watched by nearly 31 million viewers in the U.S. - the highest rated season finale for the series to date.(8) The series also experienced record viewership levels and achieved the highest end of season average with an impressive average viewership of nearly 27 million viewers per week during the 2004/05 broadcast season.(9)

CSI: Miami also performed well throughout the broadcast season and ended the season as the third most watched drama on U.S. television.(10)

Motion Picture Distribution

The Motion Picture Distribution business anticipates a stronger release slate in the second half of the year and has already seen outstanding theatrical performances in Canada with Wedding Crashers and Aurore in Quebec. For more information on the second quarter results and outlook for Motion Picture Distribution LP please refer to their press release issued earlier today.

----------------------------------
(1) NMR: Average Minute Audience Viewers 05/30/05 -06/01/05
(2) NMR: Average Minute Audience, Women 25-54. Mon-Sun 6a-6a. Apr 4/05 -
June 26/05
(3) Canadian Digital TV Marketplace - Decima Report Vol. 4 - Report 4.
Decima Publishing Inc., July 2005
(4) Canadian Digital TV Marketplace - Decima Report Vol. 4 - Report 4.
Decima Publishing Inc., July 2005
(5) NMR: Average Minute Audience, Adults 25-54. Mo-Sun 6a-6a, 04/04/05 -
06/26/05
(6) NMR: Primetime Season to Date Ranking for Demographic P2+ for
09/20/04 through to 05/25/05
(7) NMR: Primetime Season to Date Ranking for Demographic P2+ for
09/20/04 through to 05/25/05
(8) NMR: Primetime Weekly Rankings for Demographic P2+ for 05/23/05
through to 05/25/05
(9) NMR: Primetime Season to Date Ranking for Demographic P2+ for
09/20/04 through to 05/25/05
(10) NMR: Primetime Season to Date Ranking for Demographic P2+ for
09/20/04 through to 05/25/05

Outlook

For the remainder of 2005, the Company anticipates continued strong performance in Broadcasting and Entertainment and improved performance in Motion Picture Distribution.

"Despite the Motion Picture Distribution business reducing their guidance for the 2005 year, based on the strength of our Broadcast and Entertainment businesses we are reconfirming our 2005 consolidated guidance for Revenue ($1,040 million), EBITDA ($176 million) and year-end Net Debt ($362 million). We will continue to provide updates to guidance as appropriate on a consolidated basis only," said David Lazzarato, Executive Vice President and Chief Financial Officer. "Additionally, we are reconfirming the consolidated Revenue, EBITDA and year-end Net Debt guidance for 2006 of $1,142 million, $223 million and $213 million respectively".

About Alliance Atlantis Communications

In 2005, Alliance Atlantis Communications Inc. celebrates its 10th anniversary as a leading specialty broadcaster, continuing to offer Canadians recognizable, high-quality brands boasting targeted, high-quality programming across 13 specialty channels. The Company co-produces and distributes a limited number of television programs in Canada and internationally, including the hit CSI franchise, and holds a 51% limited partnership interest in Motion Picture Distribution LP, Canada's leading motion picture distribution business. The Company's common shares are listed on the Toronto Stock Exchange - trading symbols AAC.A, AAC.NV.B. The Company's Web site is www.allianceatlantis.com.

Certain statements and information included in this release constitute "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Alliance Atlantis to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. The words or phrases "guidance", "expect", "anticipate", "estimates", and "forecast" and similar words or expressions are intended to identify such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management's projections, estimates and expectations is contained in the Company's periodic reports and registration statements filed with the Canadian securities regulatory authorities and the U.S. Securities and Exchange Commission. Alliance Atlantis undertakes no duty to update or revise its forward-looking statements, including its earnings outlook, because of new information, future events or otherwise.

This earnings release contains the unaudited consolidated balance sheets, earnings statements and statements of cash flows for the three months ended June, 2005 and the three months ended June 30, 2004.

(x) Non-GAAP financial measures

The Company uses EBITDA, direct profit (loss), operating earnings (loss), and net operating earnings (loss) to gain a better understanding of the results of the business. These non-GAAP financial measures are not recognized under Canadian or United States GAAP. These non-GAAP financial measures are provided to enhance the user and investor understanding of the Company's historical and current financial performance and its prospects for the future. Management believes that these measures provide useful information in that they exclude amounts that are not indicative of the Company's core operating results and ongoing operations and provide a more consistent basis for comparison between years. The Company uses EBITDA, direct profit (loss), operating earnings (loss), and net operating earnings (loss) to measure operating performance. The Company has defined EBITDA, calculated using figures determined in accordance with Canadian GAAP, as earnings (loss) before under noted, which are earnings before amortization, interest, equity losses in affiliates, minority interest, unusual items, investment gains and losses, foreign exchange gains and losses, income taxes and discontinued operations, net of tax. Direct profit (loss) is defined as revenue less direct operating expenses, as defined in note 13 to the Company's unaudited interim consolidated financial statements. Operating earnings (losses) has been defined as earnings (loss) from operations before under noted and discontinued operations, which are earnings before investment gains and losses, foreign exchange gains and losses, income taxes and discontinued operations, net of tax. Net operating earnings are defined as operating earnings, net of an applicable portion of income tax.

Net debt is defined as the Company's revolving credit facility, senior subordinated notes and term loans, net of cash and cash equivalents.

While many in the financial community consider EBITDA, operating earnings and net operating earnings to be important measures of operating performance, they should be considered in addition to, but not as a substitute for, earnings (losses) before under noted, earnings (loss) from operations before under noted and discontinued operations, net earnings, cash flow and other measures of financial performance prepared in accordance with Canadian GAAP which are presented in the attached unaudited interim consolidated financial statements. In addition, the Company's calculation of EBITDA, operating earnings (loss) and net operating earnings (loss) may be different than the calculation used by other companies and therefore comparability may be affected. A reconciliation of these non-GAAP financial measures to the most directly comparable measures calculated in accordance with Canadian GAAP is presented in the Company's Management's Discussion and Analysis.

(xx)Alliance Atlantis holds a 51% limited partnership interest in Motion Picture Distribution LP (the "Partnership"), a motion picture distributor in Canada, the U.K. and Spain. The balance of the Partnership is owned by Movie Distribution Income Fund (TSX: FLM.UN).

ALLIANCE ATLANTIS

10 YEARS AS A BROADCASTER

-------------------------------------------------------------------------

June 30, 2005
Consolidated Financial Statements and
Supplemental Information
For the Three Months and Six Months Ended
June 30, 2005 and 2004
(Unaudited)

-------------------------------------------------------------------------

The interim Consolidated Financial Statements for the three month and six
month periods ended June 30 have not been reviewed by an auditor.

The accompanying unaudited interim consolidated financial statements and supplemental information of Alliance Atlantis Communications Inc. ("the Company") are the responsibility of management and have been approved by the Board of Directors. The unaudited interim consolidated financial statements and supplemental information have been prepared by management in accordance with Canadian generally accepted accounting principles. The unaudited interim consolidated financial statements and supplemental information include some amounts and assumptions based on management's best estimates which have been derived with careful judgement.

In fulfilling its responsibilities, management of the Company has developed and maintains a system of internal accounting controls. These controls are designed to ensure that the financial records are reliable for preparing the financial statements. The Board of Directors of the Company carries out its responsibility for the financial statements through its Audit Committee. The Audit Committee reviews the Company's unaudited interim consolidated financial statements and recommends their approval by the Board of Directors.

August 11, 2005

PHYLLIS YAFFE DAVID LAZZARATO
Chief Executive Officer Executive Vice President and
Chief Financial Officer

Alliance Atlantis Communications Inc.
Consolidated Balance Sheets
(unaudited)
-------------------------------------------------------------------------
(in millions of Canadian dollars)

June 30, December 31, June 30,
2005 2004 2004
-------------------------------------------------------------------------
Assets (revised)
(note 19)

Cash and cash equivalents 26.7 55.0 6.2
Accounts receivable 333.5 372.2 405.6
Investment in film and television
programs (note 3):
Broadcasting 187.4 185.2 194.7
Motion Picture Distribution 178.8 186.8 189.5
Entertainment 224.7 195.3 174.2
Development costs 0.7 1.2 1.9
Property and equipment 40.8 43.7 48.0
Investments 18.0 16.4 18.6
Future income taxes 108.4 128.4 93.1
Other assets 20.0 23.9 30.1
Loans receivable from tax shelters
(note 2) 100.8 90.9 90.2
Broadcast licences 108.7 108.7 109.3
Goodwill 204.2 212.6 219.1
-------------------------------------------------------------------------
1,552.7 1,620.3 1,580.5
-------------------------------------------------------------------------
Liabilities
Revolving credit facilities (note 4) 22.0 - 71.0
Accounts payable and accrued
liabilities 440.6 528.1 519.1
Income taxes payable 46.0 57.2 38.4
Liabilities related to discontinued
operations (note 10) - - 1.1
Deferred revenue 36.5 40.4 23.6
Term loans (note 5) 460.8 483.6 51.4
Tax shelter participation liabilities
(note 2) 100.8 90.9 90.2
Senior subordinated notes (note 6) - - 400.1
Minority interest 57.9 67.4 62.2
-------------------------------------------------------------------------
1,164.6 1,267.6 1,257.1
-------------------------------------------------------------------------
Shareholders' Equity
Share capital and other (note 7) 732.0 725.7 722.2
Deficit (338.6) (372.5) (401.0)
Cumulative translation adjustments (5.3) (0.5) 2.2
-------------------------------------------------------------------------
388.1 352.7 323.4
-------------------------------------------------------------------------
1,552.7 1,620.3 1,580.5
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Commitments and contingencies (note 12)

The accompanying notes form an integral part of these unaudited interim
consolidated financial statements.

Alliance Atlantis Communications Inc.
Consolidated Statements of Earnings
For the periods ended June 30, 2005 and June 30, 2004
(unaudited)
-------------------------------------------------------------------------
(in millions of Canadian dollars - except per share amounts)

Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
-------------------------------------------------------------------------
(revised) (revised)
(note 19) (note 19)

Revenue
Broadcasting (note 13) 72.7 62.8 135.2 118.7
Motion Picture
Distribution (note 13) 88.4 155.3 188.7 250.7
Entertainment (note 13) 79.0 49.3 180.7 109.2
Corporate and Other - 0.2 0.3 0.6
-------------------------------------------------------------------------
240.1 267.6 504.9 479.2
-------------------------------------------------------------------------
Direct operating expenses 150.9 194.3 337.4 339.9
Direct profit
Broadcasting 42.1 36.5 74.4 68.4
Motion Picture Distribution
(note 13) 19.8 26.4 30.0 47.9
Entertainment (note 13) 27.3 10.1 62.8 22.4
Corporate and Other - 0.3 0.3 0.6
-------------------------------------------------------------------------
89.2 73.3 167.5 139.3
-------------------------------------------------------------------------
Operating expenses
Selling, general and
administrative 41.0 33.3 80.7 63.4
Stock-based compensation 1.1 1.2 1.0 4.0
-------------------------------------------------------------------------
42.1 34.5 81.7 67.4
-------------------------------------------------------------------------
Earnings (loss) before
undernoted and discontinued
operations
Broadcasting 24.9 21.1 41.0 38.6
Motion Picture Distribution
(note 13) 10.3 19.6 8.6 35.9
Entertainment 21.9 4.1 53.1 11.0
Corporate and Other (10.0) (6.0) (16.9) (13.6)
-------------------------------------------------------------------------
47.1 38.8 85.8 71.9
-------------------------------------------------------------------------
Amortization, including
development costs charges 3.0 5.4 6.7 11.9
Interest (note 8) 5.4 16.1 10.9 30.7
Equity losses in affiliates - 0.1 - 0.1
Minority interest 3.4 9.7 1.7 17.5
-------------------------------------------------------------------------
Earnings from operations before
undernoted and discontinued
operations 35.3 7.5 66.5 11.7
Investment gains (note 9) - (0.1) - (0.4)
Foreign exchange losses 8.1 2.3 9.4 4.9
-------------------------------------------------------------------------
Earnings before income taxes,
and discontinued operations 27.2 5.3 57.1 7.2
Provision for (recovery of)
income taxes 16.5 (1.7) 23.2 1.4
-------------------------------------------------------------------------
Net earnings before
discontinued operations 10.7 7.0 33.9 5.8
Discontinued operations,
net of tax (note 10) - (3.8) - (4.6)
-------------------------------------------------------------------------
Net earnings for the period 10.7 3.2 33.9 1.2
-------------------------------------------------------------------------
Earnings per Common Share
before discontinued operations
Basic (note 11) $0.25 $0.16 $0.78 $0.13
Diluted (note 11) $0.24 $0.16 $0.77 $0.13
-------------------------------------------------------------------------
Earnings per Common Share
Basic (note 11) $0.25 $0.07 $0.78 $0.03
Diluted (note 11) $0.24 $0.07 $0.77 $0.03
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The accompanying notes form an integral part of these unaudited interim
consolidated financial statements.

Alliance Atlantis Communications Inc.
Consolidated Statements of Deficit
For the periods ended June 30, 2005 and June 30, 2004
(unaudited)
-------------------------------------------------------------------------
(in millions of Canadian dollars)

Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
-------------------------------------------------------------------------
(revised) (revised)
(note 19) (note 19)
Deficit - beginning of period (349.3) (404.2) (372.5) (402.2)
Net earnings for the period 10.7 3.2 33.9 1.2
-------------------------------------------------------------------------
Deficit - end of period (338.6) (401.0) (338.6) (401.0)
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The accompanying notes form an integral part of these unaudited interim
consolidated financial statements.

Alliance Atlantis Communications Inc.
Consolidated Statements of Cash Flow
For the periods ended June 30, 2005 and June 30, 2004
(unaudited)
-------------------------------------------------------------------------
(in millions of Canadian dollars)

Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
-------------------------------------------------------------------------
(revised) (revised)
(note 19) (note 19)

Cash and cash equivalents
provided by (used in)
Operating activities
Net earnings for the period 10.7 3.2 33.9 1.2
Items not affecting cash
Amortization of film and
television programs:
Broadcasting 27.0 23.2 52.3 44.3
Motion Picture
Distribution 31.5 34.2 60.5 48.6
Entertainment 34.5 24.0 71.9 68.3
Development costs charges - 1.6 0.6 4.4
Amortization of property
and equipment 2.5 3.1 5.1 6.0
Amortization of other assets 1.9 2.0 2.8 4.0
Reduction of Goodwill - 0.6 - 0.6
Loss on sale of
discontinued operations - 0.7 - 0.7
Investment gains - (0.1) - (0.4)
Equity losses in affiliates - 0.1 - 0.1
Minority interest 3.4 9.7 1.7 17.5
Future income taxes 12.0 (6.8) 20.0 (8.3)
Unrealized net foreign
exchange losses 7.8 (0.5) 8.6 6.0
Stock-based compensation 1.0 1.1 1.7 4.0
Investment in film and
television programs:
Broadcasting (26.3) (37.4) (54.5) (58.8)
Motion Picture Distribution (26.9) (26.7) (53.1) (38.7)
Entertainment (50.4) (7.7) (99.5) (68.8)
Development costs expenditures (0.1) (0.3) (0.1) (3.1)
Net changes in other non-cash
balances related to operations (82.7) (112.6) (60.4) (106.9)
Discontinued operations - 2.0 - 2.5
-------------------------------------------------------------------------
(54.1) (86.6) (8.5) (76.8)
-------------------------------------------------------------------------
Investing activities
Loans receivable - - - 0.2
Property and equipment (0.6) (0.5) (2.2) (1.4)
Long-term investments (2.2) (0.1) (1.6) (0.1)
Business acquisition (note 15) - (35.4) - (35.4)
Proceeds from sale of investments
in subsidiaries - 1.7 - 1.9
-------------------------------------------------------------------------
(2.8) (34.3) (3.8) (34.8)
-------------------------------------------------------------------------
Financing activities
Senior revolving credit
facilities, net 22.0 46.0 22.0 46.0
Deferred financing costs - (1.0) - (1.0)
Repayment of long-term debt (31.4) (29.3) (31.4) (30.5)
Issue of equity by subsidiary
to minority interest - 15.0 - 15.0
Distributions paid to
minority interest (7.5) (7.1) (11.2) (10.6)
Issue of share capital 0.4 1.7 4.6 4.2
Discontinued operations - - - (0.7)
-------------------------------------------------------------------------
(16.5) 25.3 (16.0) 22.4
-------------------------------------------------------------------------
Change in cash and cash
equivalents (73.4) (95.6) (28.3) (89.2)
Cash and cash equivalents
- beginning of period 100.1 101.8 55.0 95.4
-------------------------------------------------------------------------
Cash and cash equivalents
- end of period 26.7 6.2 26.7 6.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------

The accompanying notes form an integral part of these unaudited interim
consolidated financial statements.

ALLIANCE ATLANTIS

-------------------------------------------------------------------------

SUPPLEMENTAL INFORMATION

For the three month and six month periods ended
June 30, 2005 and June 30, 2004

(unaudited)

-------------------------------------------------------------------------

Alliance Atlantis Communications Inc.
Supplemental Information
For the periods ended June 30, 2005 and June 30, 2004
(unaudited)
-------------------------------------------------------------------------
Three months ended Six months ended
June 30, June 30,
2005 2004 2005 2004
-------------------------------------------------------------------------
Production Deliveries
Motion Pictures
(number of films): - - - 1.0
Television hours:
CSI Vegas/Miami/NY 18.0 10.0 40.0 26.0
Drama - - - 8.5
Kids - 1.0 - 9.5
-------------------------------------------------------------------------
18.0 11.0 40.0 44.0
-------------------------------------------------------------------------
Fact - 19.0 - 30.0
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Broadcasting Paid Subscribers June March December September
(millions) 30, 2005 31, 2005 31, 2004 30, 2004
-------------------------------------------------------------------------
Showcase Television (100%) 6.3 6.2 6.2 6.1
Life Network (100%) 5.7 5.6 5.6 5.9
HGTV Canada (67%) 5.7 5.7 5.6 5.1
History Television (100%) 5.8 5.8 5.7 5.6
The Food Network (51%) 4.5 4.4 4.4 4.3
Series+ (50%) 1.3 1.3 1.3 1.3
Historia (50%) 1.3 1.3 1.3 1.3
Showcase Action (100%) 1.2 1.2 1.1 1.1
Showcase Diva (100%) 1.1 1.1 1.0 1.0
IFC - The Independent Film
Channel Canada (100%) 1.1 1.0 1.0 0.9
Discovery Health Channel (65%) 0.8 0.8 0.8 0.8
BBC Canada (50%) 0.9 0.9 0.9 0.8
BBC Kids (50%) 1.0 1.0 0.8 0.7
National Geographic Channel (50%) 0.9 0.9 0.8 0.8
-------------------------------------------------------------------------
37.6 37.2 36.5 35.7
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Source: Alliance Atlantis Communications Inc.

CONTACT: Andrew Akman, Vice President, Corporate Development & Investor
Relations, Tel: (416) 966-7701, E-mail: andrew.akman@allianceatlantis.com;
Jennifer Bell, Director, Corporate & Public Affairs, Tel: (416) 934-7854,
E-mail: jennifer.bell@allianceatlantis.com

-------
Profile: intent