Alliance Atlantis Announces Continued Strong Results For the Fourth Quarter and Full Year(x)

Alliance Atlantis Announces Continued Strong Results For the Fourth Quarter and Full Year(x)

- Consolidated EBITDA increases 42% for Q4 to $72.1 million, and 21% for the full year to $192.9 million - Free Cash Flow of $63.6 million for Q4 and $120.1 million for the full year compared to $32.7 million and an outflow of $23.1 million in the same periods in the prior year, respectively - Digital channels deliver positive contribution to EBITDA(xx) in Q4 - Advertising sales increase 20% over the prior full year - CSI: Miami named 2005's biggest hit TV series on a global basis in industry report(1) - Rupert Duchesne appointed to Board of Directors

www.allianceatlantis.com TSX: AAC.A, AAC.NV.B

TORONTO, March 3 /PRNewswire-FirstCall/ -- Alliance Atlantis Communications Inc. ("the Company") reported continued strong results for the fourth quarter and year ended December 31, 2005 driven in large part by the continued strength of the Company's broadcasting business as well as the exceptional ongoing performance of the CSI franchise.

"We are extremely pleased with the Company's overall performance in 2005," said Phyllis Yaffe, Chief Executive Officer of Alliance Atlantis. "The results we have delivered for our shareholders reconfirm our confidence in the long-term strength of our assets."

"Our broadcasting business remains an important driver of growth. And, as expected, during the fourth quarter, our eight digital channels as a group made a positive contribution to EBITDA. We expect an even stronger contribution from this group of channels going forward, as audience and subscriber levels continue to grow," she said.

"At the same time, the CSI franchise continues to outperform our original revenue and cash flow expectations, and is benefiting from sustained ratings successes and strong sales around the world. In fact, CSI: Miami was named as the biggest hit TV series for 2005 on a global scale in a recent report(2) , a testament to the impact this series has had in international markets," Ms. Yaffe noted.

"We are also very pleased by the progress Motion Picture Distribution LP's(xxx) management made in 2005, as they demonstrated strong focus and resilience during a challenging year," she said. "Of note, the Partnership successfully renewed key output agreements with New Line Cinema and Focus Features, and subsequent to year end the business entered into a new output agreement with The Weinstein Company."

"We support Motion Picture Distribution Inc.'s new streamlined management structure including the appointment of Victor Loewy as Chairman and of Patrice Theroux to the position of President and Chief Executive Officer," Ms. Yaffe noted.

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(1),(2) "Global TV Acquisitions" report, Informa Telecoms & Media,
February 15, 2006, based on the number of times a free-to-air TV series
was listed in year-end Top 10 rankings worldwide.
(x) This press release may contain forward-looking statements and should
be read in conjunction with the note on forward looking statements
contained at the conclusion of this release.

Capital Structure Update
------------------------

"As we indicated last quarter, we expect to continue to target a Net Debt to EBITDA ratio in the range of 1.5x to 2.5x, excluding our Motion Picture Distribution business, and will continue to repurchase shares under our Normal Course Issuer Bid, which we renewed in December, 2005," said David Lazzarato, Executive Vice President and Chief Financial Officer.

Rupert Duchesne Appointed to Board of Directors
-----------------------------------------------

Michael MacMillan, Executive Chairman of the Board of Directors also announced today that Rupert Duchesne has been appointed to the Board of Directors, effective March 2, 2006. Mr. Duchesne is President and CEO of Aeroplan, Canada's premier loyalty management company.

At the same time, Pierre DesRoches has advised the Board that, after more than 10 years of service, he wishes to retire from the Board and will therefore not stand for re-election as a director at the Company's 2006 annual shareholder meeting.

"On behalf of the Board and the management of Alliance Atlantis, I would like to thank Pierre for his important contributions as a Director," said Mr. MacMillan. "The Board welcomes Rupert Duchesne and we are confident that his skills and experience will add a valuable dimension to our Board."

Fourth Quarter and Full Year Financial Results
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Revenue

Fourth quarter broadcasting revenue of $84.2 million represented an increase of 16% over the prior year's period. Total advertising revenue also increased by 16% compared to last year's quarter, with our analog and digital channels recording 15% and 26% advertising growth respectively. Total subscriber revenue grew 17% over the prior year's period, with our analog and digital channels growing 7% and 49% respectively. During the fourth quarter, the digital channels benefited from a 5% increase in subscribers compared to the third quarter and a 30% increase in subscribers year-over-year. Additionally, the channels benefited from a retroactive adjustment payment of $2.3 million from one of the channels' distributors. For the full year, Broadcasting recorded revenue of $283.4 million representing an increase of 15% over the prior year driven by gains in advertising and subscriber revenue.

As expected, CSI revenue decreased during the fourth quarter, from $93.6 million in last year's quarter to $82.0 million. This was primarily due to the timing of revenue recognized on after sales (which includes second window cable sales, weekend syndication, DVD/video and merchandising and licensing) in the U.S. As previously disclosed, CSI's contribution in the second half of the year was not expected to match its contribution during the first half. For the full year CSI revenue increased 41% over the prior year, from $205.1 million to $288.4 million.

The Other Entertainment segment recorded $11.9 million of revenue during the quarter compared to $10.4 million in the prior year's period as a result of increased international sales from the Company's library of film and television programs. For the full year, Other Entertainment revenue of $53.1 million was essentially flat with prior year revenue of $53.6 million.

Fourth quarter Motion Picture Distribution revenue of $113.2 million was down from $147.2 million in the prior year's period. This decrease in revenue is largely due to strong DVD sales of Lord of the Rings: Return of the King in last year's quarter. For the full year, Motion Picture Distribution revenue decreased 18% to $418.1 million.

EBITDA

During the fourth quarter, Broadcasting EBITDA of $35.2 million was up 54% compared to the prior year's quarter. This represented an EBITDA margin of 42% compared to a margin of 32% in the same period last year. The increases are primarily due to higher revenue as noted above, as well as higher amortization of programming costs in the prior year. As expected, and excluding the retroactive adjustment payment noted above, during the fourth quarter the digital channels as a group made a positive contribution to EBITDA. Full year Broadcasting EBITDA of $90.7 million was up 24% compared to the prior year. Broadcasting EBITDA margin was 32% during 2005 compared to 30% for 2004.

During the fourth quarter, Entertainment EBITDA of $28.2 million represented an increase of 27% over the prior year's period. An increased contribution of $17.6 million due to a higher margin product mix and lower participation costs from the Other Entertainment segment was partially offset by a decreased direct profit contribution from CSI due to the timing of revenue as described above as well as the strengthening of the Canadian dollar. Entertainment recorded EBITDA of $94.1 million for the full year, representing an increase of 87% over the prior year, largely due to the continued growth of the CSI franchise.

Motion Picture Distribution EBITDA during the quarter of $19.9 million was essentially flat with prior year EBITDA of $20.1 million. This includes a $3.0 million one time benefit from a settlement with a supplier. EBITDA margin during the quarter increased to 18% compared to 14% in the prior year's quarter. For the full year, Motion Picture Distribution EBITDA of $46.0 million was down 37% due to lower revenue as noted above.

Corporate and Other expenses were $11.3 million during the quarter compared to $14.5 million in the prior year's period. The decrease is primarily related to lower stock based compensation costs. For the full year, Corporate and Other expenses were $38.3 million, representing an increase of 2% over the prior year. Higher professional fees during the year were partly offset by lower stock based compensation costs.

Amortization

In the fourth quarter, amortization expense was $8.0 million, an increase of $3.2 million compared to the same period last year. During the quarter charges totaling $5.0 million were applied to certain intangible broadcasting assets. Amortization expense decreased for the full year by $3.3 million or 15%.

Interest

Interest expense decreased from $11.9 million during last year's quarter to $9.3 million in this 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 6.1% as compared to 10.4% in the prior year's quarter. The decrease resulting from the debt refinancing has been partly offset in the quarter by interest relating to various government tax audits settled during the quarter. For the full year, interest expense decreased 55% to $26.3 million primarily as a result of the debt refinancing undertaken by the Company in December 2004. The Company's average cost of borrowing during the full year was 5.2% as compared to 11.1% for the prior year.

Minority Interest

Minority Interest primarily represents the Movie Distribution Income Fund's share of earnings from Motion Picture Distribution LP. During the fourth quarter, Minority Interest was $12.3 million compared to $8.4 million in last year's period, including $2.7 million for broadcasting minority interest compared to $1.3 million in last year's period. Minority Interest was $22.5 million during the full year compared to $34.0 million last year. Broadcasting Minority Interest for the full year was $5.0 million compared to $3.6 million in the prior year.

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

Operating earnings for the quarter were $40.5 million compared to an operating loss of $10.4 million for the prior year's period. The higher earnings, somewhat offset by a higher effective tax rate this year -- due to the mix of earnings between different tax jurisdictions, not currently tax affecting certain losses and recognizing tax losses in the prior year's quarter that were not previously recognized -- resulted in net operating earnings for the quarter of $24.9 million, compared to a net operating loss of $2.9 million in last year's quarter. On a per share diluted basis, net operating earnings were $0.56 during the quarter compared to a net operating loss of $0.07 in last year's period.

Operating earnings for the full year were $124.2 million compared to $9.8 million for the prior year. Higher earnings, somewhat offset by a higher effective tax rate this year, resulted in net operating earnings of $76.4 million, compared to $16.8 million last year. On a per share diluted basis, net operating earnings were $1.73 compared to net operating earnings of $0.39.

Net Earnings

Net earnings for the quarter were $24.8 million compared to net earnings of $9.6 million for the prior year's period. This increase reflects a $1.4 million foreign exchange loss during the current quarter compared to a $15.8 million gain in the same period last year. The losses in the current year are primarily unrealized and are related to the long-term investment in foreign operations held by the Company's Motion Picture Distribution business, partly offset by unrealized gains as a result of the unhedged portion on the Company's long-term U.S. dollar denominated debt. On a basic and diluted basis, net earnings per share were $0.57 and $0.56 for the quarter, compared to basic and diluted net earnings per share of $0.22 for last year's period.

Net earnings for the year were $70.9 million compared to $29.7 million last year. This increase reflects an $8.1 million foreign exchange loss in the current year compared to a $22.4 million gain in the prior year. On a basic and diluted basis, net earnings per share were $1.63 and $1.61 for the year, compared to basic and diluted net earnings per share of $0.69 and $0.68 respectively.

Liquidity

Free Cash Flow for the fourth quarter and full year were $63.6 million and $120.1 million, respectively compared to $32.7 million and an outflow of $23.1 million in the same periods in the prior year, respectively.

Consolidated net debt decreased from the prior year by $96.7 million to $331.9 million primarily as a result of improvements in free cash flow as well as the positive impact of the strengthening Canadian dollar on our U.S. dollar denominated debt.

Net debt, excluding non-recourse net debt related to Motion Picture Distribution LP, was $290.6 million, representing a reduction of $126.7 million from the prior year's period, or a reduction of $143.8 million excluding cash used to repurchase stock.

Operating Highlights
--------------------

Broadcasting

In 2005, we continued to be an industry leader in the specialty broadcast business by successfully executing our strategy of combining strong channel brands with exceptional content and marketing. This strategy has enabled us to deliver a substantial and growing subscriber base and successfully translate growing viewership into solid advertising sales growth.

Our digital channels again outperformed the industry average, with an overall average minute audience (AMA) increase of 30% for the broadcast year 2004-2005(3). These channels launched in Fall 2001, and now four of them have over one million subscribers: Showcase Action, Showcase Diva, IFC and BBC Kids. Showcase Action continues to rank No. 1 among English language Canadian Commercial new specialty networks in Adult 25-54 average minute audience, and in the Fall of 2005, five of our new specialty networks, Showcase Action, Showcase Diva, BBC Canada, National Geographic and IFC, were ranked in the top 10 for AMA among more than 47 new specialty networks.(4) Food Network also enjoyed a record increase in viewership of 25% from Fall 2004 to Fall 2005.(5)

Entertainment

In 2005, the CSI franchise continued to reach new milestones and deliver impressive results worldwide. We continue to leverage the CSI franchise around the world, and international sales of CSI: Crime Scene Investigation, CSI: Miami and CSI: NY remain strong and continue to grow. In 2005 all three series were consistently ranked in the top 15 shows on U.S. television.(6)

In 2005, Season Six of CSI: Crime Scene Investigation continued to rank as the No. 1 series on U.S. television, averaging nearly 26 million viewers weekly.(7) The series continues to captivate audiences around the world and in January was awarded the 2006 People's Choice Award for Favorite Drama Series - its fourth consecutive win in this category.

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(3) Source: Nielsen Media Research (NMR): Monday-Sunday 6a.m.-6a.m.
Average Minute Audience (AMA) Adults 25-54 Broadcast Year
2003-2004(equal sign)09/01/2003-08/29/2004 vs. Broadcast Year
2004-2005+08/30/2004-08/28/2005
(4) Source: NMR Monday-Sunday 6a.m.-6a.m. AMA 08/29/05-01/01/06
(5) Source:NMR Monday-Sunday 6 a.m. to 6 a.m. Adult 25-54 AMA
(6) Source: NMR: Primetime Std Rank - Regular Programs for Demographic
PER2+ for 09/09/05 to 01/01/06
(7) Source: NMR: Primetime Std Rank - Regular Programs for Demographic
PER2+ for 09/09/05 to 01/01/06

CSI: Miami continues to record outstanding ratings in its fourth season and in the U.S. is the number one series on Monday nights with an average of 18 million viewers tuning in each week.(8) Internationally, CSI: Miami is performing exceptionally well on the ratings charts in Germany, France, Australia, Italy, Spain and the United Kingdom. As previously noted, CSI: Miami was named as the biggest hit TV series for 2005 on a global scale in a recent report.(9)

CSI: NY continues to experience a very successful second season as the U.S.'s No. 1 show airing in its timeslot on Wednesdays(10) and has experienced solid growth in its ratings since the premiere episode aired in September 2004. In addition, international sales of CSI: NY paced strongly in 2005.

Motion Picture Distribution

Motion Picture Distribution LP released their financial results on February 23, 2006. For further operating highlights and other details, please refer to their press release or to their website at www.moviedistributionincomefund.com.

About Alliance Atlantis Communications
--------------------------------------

Alliance Atlantis offers Canadians 13 well-branded specialty channels boasting targeted, high-quality programming. The Company also co-produces and distributes the hit CSI franchise and indirectly holds a 51% limited partnership interest in Motion Picture Distribution LP, a leading distributor of motion pictures in Canada, with a growing presence in motion picture distribution in the United Kingdom and Spain. The Company's common shares are listed on the Toronto Stock Exchange - trading symbols AAC.A and AAC.NV.B. The Company's Web site is www.allianceatlantis.com.

Forward-Looking Statements
--------------------------

This press release may contain forward-looking statements within the meaning of Canadian and U.S. securities laws. Such statements include, but are not limited to, statements relating to anticipated financial and operating results, the Company's plans, objectives, expectations and intentions and other statements including words such as "anticipate", "believe", "plan", "estimate", "expect", "intend", "will", "should", "may", and other similar expressions. These forward-looking statements are based on certain assumptions and reflect the Company's current expectations. The reader should not place undue reliance on them. They involve known and unknown risks, uncertainties and other factors that may cause them to differ materially from the anticipated future results or expectations expressed or implied by such forward-looking statements. Some factors that could cause actual results to differ materially from those set forth in the forward-looking statements are: audience acceptance of our filmed entertainment; our ability to attract advertising revenue; changes to the regulatory environment; actions of our competitors; technological change that increases competition or facilitates the infringement of our intellectual property; cost of production financing; the loss of key personnel; and our relationship with filmed entertainment content suppliers. Other risks and factors that could cause actual results to differ are described in Management's Discussion and Analysis ("MD&A") for the periods ended December 31, 2005, December 31, 2004 and December 31, 2003 under the headings "Industry Risk and Uncertainties" and "Market Risk". Our MD&A is available at the Company's Internet site (http://www.allianceatlantis.com/). The company undertakes no obligation to publicly update or revise any forward- looking statements or information, whether as a result of new information, future events or otherwise.

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(8) Source: NMR: Primetime Std Rank - Regular Programs for Demographic
PER2+ for 09/09/05 to 01/01/06
(9) "Global TV Acquisitions" report, Informa Telecoms & Media,
February 15, 2006, based on the number of times a free-to-air TV
series was listed in year-end Top 10 rankings worldwide
(10) Source: NMR: Primetime Std Rank - Regular Programs for Demographic
PER2+ FOR 09/09/05 to 01/01/06

This earnings release contains the unaudited consolidated earnings statements and statements of cash flows for the three months and year ended December 31, 2005 and the three months and year ended December 31, 2004.

(xx)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's 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, gains and losses on disposal of assets, dilution gains, 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 25 to the Company's 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, gains and losses on disposal of assets, dilution gains, 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 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, net earnings, cash flow and other measures of financial performance prepared in accordance with Canadian GAAP which are presented in the attached 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.

(xxx)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).

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CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months and Year Ended December 31, 2005 and 2004
(unaudited)

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Management's responsibility for financial reporting

The accompanying unaudited interim consolidated financial statements 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 have been prepared by management in accordance with Canadian generally accepted accounting principles. When alternative methods of accounting exist, management has chosen those it deems most appropriate in the circumstances. The unaudited interim consolidated financial statements necessarily include amounts based on informed judgments and estimates of the expected effects of current events and transactions with appropriate consideration to materiality. In addition, in preparing the financial information management must make determinations as to the relevancy of information to be included, and make estimates and assumptions that affect reported information. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as expected.

The Company maintains a system of internal accounting and administrative controls. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable and accurate and the Company's assets are appropriately accounted for and adequately safeguarded.

The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting, and is ultimately responsible for reviewing and approving the unaudited interim consolidated financial statements. The Board carries out this responsibility through its Audit Committee.

The Audit committee is appointed by the Board, and all of its members are independent directors. The Committee reviews the unaudited interim consolidated financial statements and reports its findings to the Board for consideration when the Board approves the unaudited interim consolidated financial statements for issuance to the shareholders.

Phyllis Yaffe David Lazzarato
Chief Executive Officer Executive Vice President and
Chief Financial Officer

Alliance Atlantis Communications Inc.
Consolidated Statements of Earnings
For the periods ended December 31, 2005 and December 31, 2004
(unaudited)
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(in millions of Canadian dollars - except per share amounts)

Three months ended Year ended
December 31, December 31,
2005 2004 2005 2004
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Revenue
Broadcasting 84.2 72.6 283.4 245.9
Entertainment 93.9 104.0 341.5 258.7
Motion Picture Distribution 113.2 147.2 418.1 512.1
Corporate and Other 0.1 0.1 0.4 0.8
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291.4 323.9 1,043.4 1,017.5
Direct operating expenses 171.9 225.9 677.2 705.5
Direct profit
Broadcasting 53.2 38.6 159.2 132.7
Entertainment 35.8 27.7 118.2 74.8
Motion Picture Distribution 30.4 31.6 88.4 103.7
Corporate and Other 0.1 0.1 0.4 0.8
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119.5 98.0 366.2 312.0
Operating expenses
Selling, general and
administrative 40.7 37.3 161.2 135.8
Stock based compensation 6.7 9.9 12.1 16.7
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47.4 47.2 173.3 152.5
Earnings (loss) before undernoted
and discontinued operations
Broadcasting 35.2 22.9 90.7 73.3
Entertainment 28.2 22.2 94.1 50.2
Motion Picture Distribution 19.9 20.1 46.0 72.9
Corporate and Other (11.2) (14.4) (37.9) (36.9)
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72.1 50.8 192.9 159.5
Amortization 8.0 4.8 18.0 21.3
Unusual items (0.8) 36.1 (0.8) 36.1
Interest 9.3 11.9 26.3 58.2
Equity losses in affiliates 2.8 - 2.7 0.1
Minority interest 12.3 8.4 22.5 34.0
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Earnings (loss) from operations
before undernoted and
discontinued operations 40.5 (10.4) 124.2 9.8
Investment (gains) losses, net (0.5) (1.8) 0.2 (2.4)
(Gain) loss on disposal of assets (0.4) - (4.1) 0.2
Foreign exchange losses (gains) 1.4 (15.8) 8.1 (22.4)
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Earnings before income taxes,
and discontinued operations 40.0 7.2 120.0 34.4
Provision for (recovery of) income
taxes 15.2 (1.9) 49.1 0.6
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Net earnings before discontinued
operations 24.8 9.1 70.9 33.8
Discontinued operations, net of
income taxes - 0.5 - (4.1)
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Net earnings for the period 24.8 9.6 70.9 29.7
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Earnings per Common Share before
discontinued operations
Basic $ 0.57 $ 0.21 $ 1.63 $ 0.78
Diluted $ 0.56 $ 0.21 $ 1.61 $ 0.78
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Earnings per Common Share
Basic $ 0.57 $ 0.22 $ 1.63 $ 0.69
Diluted $ 0.56 $ 0.22 $ 1.61 $ 0.68
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Alliance Atlantis Communications Inc.
Consolidated Statements of Deficit
For the periods ended December 31, 2005 and December 31, 2004
(unaudited)
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(in millions of Canadian dollars)

Three months ended Year ended
December 31, December 31,
2005 2004 2005 2004
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Deficit - beginning of period (326.4) (382.1) (372.5) (402.2)
Net earnings for the period 24.8 9.6 70.9 29.7
Shares repurchased and cancelled
under issuer bid (8.7) - (8.7) -
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Deficit - end of period (310.3) (372.5) (310.3) (372.5)
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Alliance Atlantis Communications Inc.
Consolidated Statements of Cash Flow
For the periods ended December 31, 2005 and December 31, 2004
(unaudited)
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(in millions of Canadian dollars)

Three months ended Year ended
December 31, December 31,
2005 2004 2005 2004
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Cash and cash equivalents
provided by (used in)
Operating activities
Net earnings for the period 24.8 9.6 70.9 29.7
Items not affecting cash
Amortization of film and
television programs 68.9 75.9 343.4 290.2
Amortization of development
costs 0.3 - 1.2 4.4
Amortization of property and
equipment 2.4 2.3 10.1 11.3
Amortization of other assets 0.8 2.8 4.9 9.8
Write down of broadcast
intangible asset 2.3 - 2.3 -
Write down of broadcast
licenses 2.7 1.1 2.7 1.1
Loss on redemption of long-term
debt - 36.1 - 36.1
Investment (gains) losses, net (0.5) (1.8) 0.2 (2.4)
(Gain) loss on disposal of
assets (0.4) - (4.1) 0.2
Equity losses in affiliates 2.8 - 2.7 0.1
Minority interest 12.3 8.4 22.5 34.0
Future income taxes 21.4 (34.0) 41.3 (39.8)
Unrealized net foreign exchange
(gains) losses (2.6) (18.2) 7.9 (24.7)
Stock based compensation 1.6 0.5 3.9 1.5
Investment in film and television
programs (94.1) (77.7) (380.8) (310.8)
Development costs expenditures - 1.4 (0.1) (1.7)
Net changes in other non-cash
balances related to operations 22.4 21.5 (15.3) (31.9)
Discontinued operations - - - 2.1
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65.1 27.9 113.7 9.2
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Investing activities
Purchases of property and
equipment (3.0) (0.5) (6.9) (4.5)
Proceeds from sale of assets 1.4 - 6.1 -
Business acquisitions - - - (35.2)
Proceeds from sale of investments 0.1 4.9 11.6 4.9
Purchases of investments - - (4.4) -
Discontinued operations - - - 1.9
Other - 0.4 - 0.6
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(1.5) 4.8 6.4 (32.3)
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Financing activities
Proceeds from revolving credit
facility 19.0 - 33.0 -
Repayment of term loans (1.5) (432.8) (63.6) (448.1)
Proceeds on term loans - 440.9 - 440.9
Deferred financing costs - (7.5) - (8.5)
Issue of equity by subsidiary
to minority interest - - - 15.0
Distributions paid to minority
interest (6.8) (6.1) (26.1) (22.7)
Issue of share capital 4.9 1.3 11.5 6.8
Shares purchased and cancelled
under issuer bid (17.1) - (17.1) -
Discontinued operations - - - (0.7)
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(1.5) (4.2) (62.3) (17.3)
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Effect of exchange rate changes
on cash and cash equivalents (2.2) - (2.2) -
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Change in cash and cash
equivalents 59.9 28.5 55.6 (40.4)
Cash and cash equivalents
- beginning of period 50.7 26.5 55.0 95.4
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Cash and cash equivalents - end
of period 110.6 55.0 110.6 55.0
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Source: Alliance Atlantis Communications Inc.

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

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