Alliance Atlantis announces completion of strategic review of its Motion Picture Distribution holding and intention to explore ownership alternatives

Alliance Atlantis announces completion of strategic review of its Motion Picture Distribution holding and intention to explore ownership alternatives

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

TORONTO, Oct. 20 /PRNewswire-FirstCall/ -- Alliance Atlantis Communications Inc. ("AACI") today announced the completion of the strategic review of its holding in Motion Picture Distribution LP ("MPD") and its intention to explore ownership alternatives.

"During the course of our review we have identified many opportunities for broadcasters and motion picture distributors in this environment of evolving delivery technologies," said Phyllis Yaffe, Chief Executive Officer. "We believe these new technologies are enhancing and facilitating consumer access to content and are growing the market for content owners. But, following a thorough analysis and review, we have concluded it is not necessary for AACI to own an interest in MPD in order for us to benefit from MPD's content and create value for our core broadcasting business."

"In light of this conclusion, we will be exploring ownership alternatives; including selling some or all of our holding in MPD, on acceptable financial terms and with appropriate long-term commercial arrangements in place," said David Lazzarato, Executive Vice President and Chief Financial Officer.

AACI has engaged RBC Capital Markets and Bennett Jones LLP as its financial and legal advisors, respectively, and will work with the Trustees of Movie Distribution Income Fund ("MDIF") and their advisors to establish a process to achieve these objectives. AACI intends to provide an update during its third quarter conference call expected the second week of November, 2006.

There can be no assurance that any such process will result in a sale by AACI of its interest in MPD in whole or in part. As previously disclosed in public filings, the MPD Securityholders' Agreement provides that each of AACI and MDIF requires the approval of the other with respect to a sale of its holdings.

About Alliance Atlantis Communications

AACI 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 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.B. The Company's website is www.allianceatlantis.com.

Forward-Looking Statements

This press release includes forward-looking statements which reflect AACI's current expectations. Forward-looking statements are those which are not historical fact and include AACI's intention to explore sale alternatives for its stake in MPD. The reader should not place undue reliance on such forward-looking statements. 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. One such factor the reader should consider is that the exploration of ownership alternatives may not result in a transaction. A transaction may not occur, among other reasons, because an acceptable offer does not arise, the requisite approvals under the Securityholders' Agreement are not obtained, and/or any regulatory approvals, including from the Ministry of Canadian Heritage and the Investment Review of Industry Canada, are not obtained. Other risks and factors are described in materials filed by AACI with the security regulatory authorities in Canada from time to time, including AACI's 2005 Management's Discussion and Analysis. AACI 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.

Source: Alliance Atlantis Communications Inc.

CONTACT: Andrew Akman, Senior Vice President, Finance - Corporate
Development & Investor Relations, Alliance Atlantis Communications Inc, Tel:
(416) 966-7701, Email: andrew.akman@allianceatlantis.com; Nicola McIsaac
Manager, Corporate Communications, Alliance Atlantis Communications Inc.,
Tel: (416) 969-4405, Email: nicola.mcisaac@allianceatlantis.com

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