Alliance Atlantis Reports Outstanding Advertising and Subscriber Revenue Growth for Broadcasting and Continued Gains for CSI Franchise

Alliance Atlantis Reports Outstanding Advertising and Subscriber Revenue Growth for Broadcasting and Continued Gains for CSI Franchise

- Q2 net earnings increased 65% compared to the prior year's quarter to $43.0 million. Q2 diluted earnings per share was $1.02 compared to the prior year's quarter of $0.60 - Q2 Broadcasting revenue increased 12% compared to the prior year's quarter to $85.9 million - Q2 advertising and subscriber revenue increased 14% to $49.1 million and 10% to $36.3 million, respectively - Q2 Broadcasting EBITDA of $31.5 million increased 18% compared to prior year's period. Excluding digital media costs, Broadcasting EBITDA increased 26% to $33.6 million - Q2 CSI revenue of $100.0 million increased 18% compared to the prior year's quarter - All 3 CSI series have been ordered for the fall season - Three of Alliance Atlantis' digital channels were among the top four highest-rated digital television channels in Canada, and HGTV was the number one specialty television channel for women aged 25-54(1) - As previously announced, the Plan of Arrangement is scheduled to close on August 15, 2007

TSX: AAC.A, AAC.B

TORONTO, Aug. 14 /PRNewswire-FirstCall/ -- Alliance Atlantis Communications Inc. (the "Company") reported strong revenue and earnings growth for the quarter ended June 30, 2007, driven by outstanding increases in broadcast advertising and subscriber revenues, as well as continued strong international sales of the CSI franchise.

"We are pleased to announce outstanding revenue and EBITDA growth for our broadcasting business, driven by fantastic growth in both advertising and subscriber revenues," said Phyllis Yaffe, Chief Executive Officer of Alliance Atlantis. "As expected, our channels are benefiting from significant additions of analog and digital subscribers, as well as solid audience growth."

"It is extremely satisfying to see such strong financial and operational results across our business," said Michael MacMillan, Executive Chairman of Alliance Atlantis. "As we look forward to tomorrow's closing of the acquisition of the Company, the results announced today are a testament to the exceptional value that has been created by our employees, management, Board and business partners."

   Second Quarter Financial Results    Broadcasting   

Broadcasting revenue of $85.9 million represented an increase of 12% over the prior year's quarter. Total advertising revenue increased by 14% compared to the prior year's period. Total subscriber revenue grew 10% over the prior year's period, while aggregate subscribers to our analog and digital channels increased to 51.3 million.

Broadcasting EBITDA of $31.5 million during the quarter increased 18% compared to the prior year's quarter. This represented an EBITDA margin of 37% compared to a margin of 35% in the same period last year. The increases are primarily due to higher revenue. Excluding digital media expenses of $2.1 million, EBITDA increased 26% to $33.6 million.

Entertainment

In the Entertainment segment, CSI revenue of $100.0 million increased 18%. The increase was primarily due to higher license fees, an increase in international sales as well as higher US after sales (including second window cable sales and weekend syndication).

The CSI franchise recorded direct profit of $52.4 million representing a direct margin of 52% during the quarter. This compares to direct profit of $35.2 million representing a direct margin of 42% in the prior year's period. During the second quarter, the Company recorded reimbursements of certain previously incurred production costs. This reimbursement decreases the investment in film and television asset, causing amortization expense to also decrease. This drives a higher direct margin during the period.

The Entertainment - Other segment, which primarily represents sales made from the Company's historical library of program rights, recorded $5.6 million of revenue and direct profit of $1.7 million during the quarter compared to $9.4 million of revenue and a direct loss of $4.7 million in the prior year's period. The decrease in revenue this quarter is primarily attributed to the timing of sales.

This improvement in direct profit during the current quarter is due to lower amortization expense and participation costs. During the first six months of the current year, the Entertainment - Other segment contributed revenue of $13.8 million and direct profit of $2.6 million compared to $17.4 million of revenue and a direct loss of $3.2 million in the prior year's period.

Motion Picture Distribution

Motion Picture Distribution recorded revenue of $87.1 million compared to $82.3 million in the prior year's period.

Motion Picture Distribution recorded EBITDA of $6.0 million during the quarter compared to EBITDA of $5.1 million in the prior year's quarter.

Motion Picture Distribution LP announced their second quarter results on August 13, 2007. For further information on Motion Picture Distribution LP please refer to their press release or go to their website at www.moviedistributionincomefund.com.

Corporate and Other

During the quarter, Corporate and Other expenses, excluding costs related to the Plan of Arrangement, were consistent with the prior year at $6.3 million. The Company incurred professional fees, employment costs and services of $8.2 million related to the Plan of Arrangement during the current quarter. During the first half of the year, Corporate and Other expenses, excluding costs related to the Plan of Arrangement, decreased $0.9 million or 5% to $15.9 million. The Company incurred professional fees, employment costs and services of $17.0 million related to the Plan of Arrangement during the first half of the year.

Amortization

In the second quarter, amortization expense was $2.8 million compared to $5.1 million in the same period last year. The decrease was primarily due to the prior year including impairment charges related to certain broadcast intangible assets as well as a write down of intangible assets by Motion Picture Distribution LP.

Interest

In the second quarter, interest expense was $2.9 million compared to $8.0 million in the prior year's quarter. The decrease in interest expense is primarily the result of higher interest income earned on long-term accounts receivable balances as well as the prior year including interest expense relating to certain industry loans and advances. The Company's average cost of borrowing was 6.7% in the quarter as compared to 6.8% in the prior year's quarter.

Non-Controlling Interest

Non-Controlling Interest represents the 49% interest of Movie Distribution Income Fund in the earnings of Motion Picture Distribution LP and the various ownership interests in three of the Company's channels. During the second quarter, Non-Controlling Interest expense was $3.1 million compared to $3.0 million in last year's period.

Income Taxes

The income tax provision for the second quarter increased from $16.4 million to $29.3 million compared to the prior year's period. This represents an effective tax rate of 38.9% compared to 36.1% in the prior year's period. The increase is mainly the result of an increase in taxable earnings.

Net Earnings

Net earnings for the quarter were $43.0 million compared to net earnings of $26.0 million for the prior year's period. On a basic and diluted basis, net earnings per share were $1.04 and $1.02 respectively for the quarter, compared to basic and diluted net earnings per share of $0.61 and $0.60 respectively for the prior year's period.

Liquidity

Consolidated Free Cash Flow for the second quarter was an inflow of $7.7 million compared to $20.7 million in the prior year's quarter. The variance was primarily due to a decrease in non-cash operating balances. Excluding the Motion Picture Distribution business, Free Cash Flow during the quarter was an inflow of $10.9 million during the quarter compared to an inflow of $31.5 million in the prior year's period.

Consolidated net debt was $288.5 million compared to $364.3 million one year ago. Net debt, excluding non-recourse net debt related to Motion Picture Distribution LP, was $194.6 million, representing a reduction of $81.3 million from the prior year's period.

Outlook

For Broadcasting, solid growth in advertising and subscriber revenue is expected to continue for the remainder of the year. Margins for the full year are expected to be similar to the prior year.

The CSI franchise is expected to continue to perform strongly as CSI: Crime Scene Investigation, CSI: Miami and CSI: NY enter their 8th, 6th and 4th seasons, respectively.

   Operating Highlights    Broadcasting   

Alliance Atlantis' specialty television channels continued their strong record of top rankings for the Spring 2007 period. During the second quarter, three of the Company's established analog channels ranked in the top 10 of all Canadian English language analog specialty networks, with HGTV ranking 4th, History 5th and Showcase 7th. Alliance Atlantis' analog channels also experienced strong year over year growth in audiences, including increases of 46% for Food Network, 32% for HGTV, 27% for History and 20% for Slice when compared to Spring 2006(2).

Spring 2007 also marked a significant milestone as HGTV became the highest ranked specialty channel for women aged 25-54. In fact, all five of Alliance Atlantis' analog specialty television channels ranked among the top ten for this demographic(3).

Continuing their solid record of performance, three of Alliance Atlantis' digital channels were among the top four highest-rated digital television channels in Canada, with Showcase Action ranked 2nd, National Geographic Channel 3rd, and Showcase Diva 4th. Alliance Atlantis had two additional digital channels in the top ten, with BBC Canada ranked 8th and Discovery Health ranked 9th(4).

During the first quarter, the Company re-launched Life Network as Slice. Compared to Spring 2006, the channel has experienced a 29% growth in audience for its targeted demographic of women 25-54(5). Additionally, many new programs that aired on Slice during Spring 2007 have resulted in significant AMA growth compared to the corresponding time periods in Spring 2006. The time periods airing The Real Housewives of Orange County have seen 100% AMA growth for Adults 18-49 and 92% AMA growth for Women 18-49 vs. Spring 2006(6). The time periods airing Outlaw In-Laws have seen 40% AMA growth for Adults 18-49 and 60% AMA growth for Women 18-49 vs. Spring 2006(7).

Entertainment

During the second quarter of 2007, the CSI franchise continued to deliver exceptional results. CSI: Crime Scene Investigation ended the 2006/2007 broadcast season, its 7th, as the #1 drama on U.S. television with an average of 20.5 million viewers per week. CSI: Miami ended its 5th season as the #5 drama on U.S. television with an average of 17 million viewers per week. CSI: Miami is also currently ranked the # 1 drama in syndication within the United States. CSI: NY ended its 3rd season as the #1 series in its timeslot and averaged 14 million viewers per week. Since inception, the CSI franchise has delivered a total of 356 episodes and is currently producing CSI: Crime Scene Investigation Season 8, CSI: Miami Season 6 and CSI: NY Season 4(8).

   -------------------------------------   (1) Source: BBM/NMR Mo-Su 6a-6a Average Minute Audience Total Canada       Adults 25-54 & Women 25-54. Spring 2007 =       04/02/2007-06/24/2007, Spring 2006 = 04/03/2006-06/25/2006   (2) BBM/NMR Mo-Su 6a-6a Average Minute Audience Total Canada Adults       25-54. Spring 2007 = 04/02/2007-06/24/2007, Spring 2006       = 04/03/2006-06/25/2006   (3) BBM/NMR Mo-Su 6a-6a Average Minute Audience Total Canada Women 25-54.       Spring 2007 = 04/02/2007-06/24/2007, Spring 2006       = 04/03/2006-06/25/2006   (4) BBM/NMR Mo-Su 6a-6a Average Minute Audience Total Canada Adults       25-54. Spring 2007 = 04/02/2007-06/24/2007, Spring 2006       = 04/03/2006-06/25/2006   (5) BBM/NMR Mo-Su 6a-6a Average Minute Audience Total Canada Women 25-54.       Spring 2007 = 04/02/2007-06/24/2007, Spring 2006       = 04/03/2006-06/25/2006   (6) BBM/NMR 04/10/06-07/03/06, 03/05/07-06/04/07, Mo-Su 6a-6a Average       Minute Audience Women 18-49   (7) BBM/NMR 04/10/06-07/03/06, 03/05/07-06/04/07, Mo-Su 6a-6a Average       Minute Audience Women 18-49   (8) National Nielsen Ratings: Primetime Season to Date Ranking - Regular       Programming for Demographic PER2+: 09/18/06 to 05/06/07     About Alliance Atlantis Communications   --------------------------------------  

Alliance Atlantis offers Canadians 13 well-branded specialty television 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 motion picture distribution operations 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 Web site is www.allianceatlantis.com.

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

This press release contains forward-looking statements, which are based on certain assumptions and reflect current expectations of Alliance Atlantis Communications Inc. (collectively with its subsidiaries, the "Company"). Forward-looking statements are those that are not historical fact and include, but are not limited to, statements of the Company's expectations and intentions. 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. Important factors that could cause actual results to differ materially from those set forth in the forward-looking statements include: failure to comply with the terms of the arrangement agreement (the "Arrangement Agreement") dated January 10, 2007 and entered into with a new acquisition company formed by CanWest, as amended, which is available on Sedar at www.sedar.com; failure to complete, or a significant delay in completing, the transactions contemplated by the Arrangement Agreement; audience acceptance of the Company's filmed entertainment; technological change that increases competition or facilitates the infringement of the Company's intellectual property; the Company's ability to attract advertising revenue; actions of competitors; changes to the regulatory environment; cost of production financing; actions of the broadcasting distribution undertakings, or "BDUs" that distribute the Company's channels; the loss of key personnel; the Company's relationship with filmed entertainment content suppliers and changes in the general economy. Additional information about the factors listed above and information about other factors are described in materials filed by the Company with the securities regulatory authorities in Canada from time to time, including the Company's 2006 MD&A and the Company's MD&A for the quarter ended June 30, 2007. 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.

This earnings release contains the unaudited interim consolidated financial statements for the three months ended June 30, 2007 and June 30, 2006.

   Non-GAAP Financial Measures   ---------------------------  

The Company uses EBITDA, direct profit and free cash flow to gain a better understanding of the results of the business. These non-GAAP financial measures are not recognized under Canadian 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 and free cash flow to measure operating performance. The Company has defined EBITDA, calculated using figures determined in accordance with Canadian GAAP, as earnings before under noted, which are earnings before amortization, interest, equity (earnings) losses in affiliates, loss on disposal of assets, foreign exchange gains and losses, income taxes and non-controlling interest. Direct profit is defined as revenue less direct operating expenses, as defined in note 25 of the Company's consolidated financial statements included in the Company's 2006 Annual Report. Free cash flow is defined as the total of cash and cash equivalents provided by (used in) operating activities and provided by (used in) investing activities.

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 to be an important measure of operating performance, it 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 unaudited interim consolidated financial statements. In addition, the Company's calculation of EBITDA 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 MD&A.

   -------------------------------------------------------------------------                      CONSOLIDATED FINANCIAL STATEMENTS                 For the Three Months and Six Months Ended                      June 30, 2007 and June 30, 2006                                (Unaudited)    -------------------------------------------------------------------------          The interim Consolidated Financial Statements have not been                          reviewed by an auditor.     Management's responsibility for financial reporting   

The accompanying unaudited interim consolidated financial statements and Management's Discussion and Analysis ("MD&A") of Alliance Atlantis Communications Inc. ("Alliance Atlantis", or collectively with its subsidiaries, "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 and information in the MD&A 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. The MD&A also includes information regarding the impact of current transactions and events, sources of liquidity and capital resources, operating trends, and risks and uncertainties. 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 and MD&A. 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 Audit Committee meets periodically with management, as well as the independent external auditors, to discuss internal controls over the financial reporting process, auditing matters and financial reporting issues. The Audit Committee reviews the unaudited interim consolidated financial statements and the MD&A and reports its findings to the Board for consideration when the Board approves the unaudited interim consolidated financial statements and the MD&A for issuance to the shareholders.

   August 14, 2007     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    June 30,                                                 2007   31, 2006       2006   -------------------------------------------------------------------------   Assets   Cash and cash equivalents                    132.3      114.4       75.1   Accounts and other receivables               517.2      486.4      368.1   Investment in film and television programs    (note 3)                                    547.1      577.1      524.7   Property and equipment                        45.3       49.3       38.6   Investments (note 2 and 8)                    48.8        4.7        5.4   Future income taxes                           69.9       73.3       78.1   Other assets                                   5.3       11.5       12.1   Loans receivable from tax shelters    (note 14)                                    47.1       95.6       97.8   Broadcast licences                           105.0      105.0      105.0   Goodwill (note 6 and 13)                     175.5      179.1      204.7                                            --------------------------------                                              1,693.5    1,696.4    1,509.6   -------------------------------------------------------------------------   Liabilities   Revolving credit facilities (note 4)          59.5       49.0       50.0   Accounts payable and accrued liabilities     560.7      613.5      429.7   Income taxes payable                          84.3       68.4       43.8   Deferred revenue                              22.5       20.4       27.3   Term loans (note 5)                          361.3      398.1      389.4   Tax shelter participation liabilities    (note 14)                                    47.1       95.6       97.8                                            --------------------------------                                              1,135.4    1,245.0    1,038.0    Non-controlling interest                      54.4       61.0       57.6    -------------------------------------------------------------------------   Shareholders' Equity   Share capital and other (note 7)             710.9      706.0      715.1   Deficit                                     (232.0)    (312.5)    (290.6)   Accumulated other comprehensive income    (loss) (note 2 and 8)                        24.8       (3.1)     (10.5)                                            --------------------------------                                                503.7      390.4      414.0                                            --------------------------------                                              1,693.5    1,696.4    1,509.6   -------------------------------------------------------------------------      Alliance Atlantis Communications Inc.   Consolidated Statements of Earnings   For the periods ended June 30,   (unaudited)   (In millions of Canadian dollars - except per share amounts)                                          Three months ended    Six months                                               June 30,       ended June 30,                                             2007     2006     2007     2006   -------------------------------------------------------------------------   Revenue     Broadcasting                           85.9     76.8    163.9    146.5     Entertainment                         105.6     94.1    276.1    195.2     Motion Picture Distribution            87.1     82.3    196.6    182.9                                         -----------------------------------                                           278.6    253.2    636.6    524.6   Direct operating expenses               154.9    163.0    385.5    344.6   Direct profit     Broadcasting                           52.5     45.1     96.6     82.5     Entertainment                          54.1     30.5    117.3     66.8     Motion Picture Distribution            17.1     14.6     37.2     30.7                                         -----------------------------------                                           123.7     90.2    251.1    180.0   Operating expenses     Selling, general and administrative    41.7     39.0     89.8     76.8     Transaction expenses (note 17)          8.2        -     17.0        -     Stock based compensation                0.8      1.6      3.0      5.2                                         -----------------------------------                                            50.7     40.6    109.8     82.0   Earnings (loss) before undernoted     Broadcasting                           31.5     26.6     52.2     46.7     Entertainment                          50.0     24.2    107.5     56.8     Motion Picture Distribution             6.0      5.1     14.5     11.3     Corporate and Other                   (14.5)    (6.3)   (32.9)   (16.8)                                         -----------------------------------                                            73.0     49.6    141.3     98.0   Amortization                              2.8      5.1      7.0      7.8   Interest (note 10)                        2.9      8.0      6.9     14.3   Equity (earnings) losses in affiliates   (0.2)       -     (0.2)     0.1   -------------------------------------------------------------------------   Earnings from operations before    undernoted                              67.5     36.5    127.6     75.8   Loss on disposal of assets                0.1        -      0.1        -   Foreign exchange gains                   (8.0)    (8.9)   (15.4)    (9.6)   -------------------------------------------------------------------------   Earnings before income taxes and    non-controlling interest                75.4     45.4    142.9     85.4   Provision for income taxes               29.3     16.4     50.1     30.3   Non-controlling interest                  3.1      3.0      8.6      7.6   -------------------------------------------------------------------------   Net earnings for the period              43.0     26.0     84.2     47.5   -------------------------------------------------------------------------   Earnings per Common Share (note 11)     Basic                                 $1.04    $0.61    $2.04    $1.10     Diluted                               $1.02    $0.60    $2.00    $1.09   -------------------------------------------------------------------------      Alliance Atlantis Communications Inc.   Consolidated Statements of Deficit   For the periods ended June 30,   (unaudited)   (In millions of Canadian dollars)                                          Three months ended    Six months                                               June 30,       ended June 30,                                             2007     2006     2007     2006   -------------------------------------------------------------------------   Deficit - beginning of period,    previously reported                   (275.0)  (301.4)  (312.5)  (310.3)   Adjustment on implementation of new    accounting standards (note 2)              -        -     (3.7)       -                                         -----------------------------------   Deficit - beginning of period,    revised                               (275.0)  (301.4)  (316.2)  (310.3)   Net earnings for the period              43.0     26.0     84.2     47.5   Shares repurchased and cancelled    under issuer bid (note 7)                  -    (15.2)       -    (27.8)   -------------------------------------------------------------------------   Deficit - end of period                (232.0)  (290.6)  (232.0)  (290.6)   -------------------------------------------------------------------------      Consolidated Statements of Comprehensive Income   For the periods ended June 30,   (unaudited)   (In millions of Canadian dollars)                                                           Three months ended                                                                June 30,                                                              2007      2006   -------------------------------------------------------------------------   Net earnings for the period                               43.0      26.0   Other comprehensive income (loss)     Unrealized gains on available-for-sale investments,      net of tax of $1.2                                      6.1         -     Unrealized gain on interest rate swap designated as      cash flow hedge, net of tax of $1.6                     3.1         -     Unrealized foreign currency translation losses on net      assets of self-sustaining foreign operations          (25.3)     (9.3)     Unrealized foreign currency translation gains on      term loans designated as a hedge on certain net      investments in self-sustaining foreign operations,      net of tax of $3.7 (June 30, 2006 - $1.3)              17.0       5.9   -------------------------------------------------------------------------                                                              0.9      (3.4)   -------------------------------------------------------------------------   Total comprehensive income                                43.9      22.6   -------------------------------------------------------------------------                                                              Six months ended                                                                 June 30,                                                              2007      2006   -------------------------------------------------------------------------   Net earnings for the period                               84.2      47.5   Other comprehensive income (loss)     Unrealized gains on available-for-sale investments,      net of tax of $4.1                                     21.0         -     Unrealized gain on interest rate swap designated as      cash flow hedge, net of tax of $1.1                     2.1         -     Unrealized foreign currency translation losses on      net assets of self-sustaining foreign operations      (28.9)     (6.8)     Unrealized foreign currency translation gains on term      loans designated as a hedge on certain net      investments in self-sustaining foreign operations,      net of tax of $4.1 (June 30, 2006 - $1.2)              18.6       5.4   -------------------------------------------------------------------------                                                             12.8      (1.4)   -------------------------------------------------------------------------   Total comprehensive income                                97.0      46.1   -------------------------------------------------------------------------      Alliance Atlantis Communications Inc.   Consolidated Statements of Cash Flows   For the periods ended June 30,   (unaudited)   (In millions of Canadian dollars)                                          Three months ended    Six months                                               June 30,       ended June 30,                                             2007     2006     2007     2006   -------------------------------------------------------------------------   Cash and cash equivalents provided by    (used in)   Operating activities   Net earnings for the period              43.0     26.0     84.2     47.5   Items not affecting cash     Amortization of film and television      programs (note 12)                    58.4     71.6    166.4    161.6     Amortization of property and equipment  2.8      2.8      6.1      5.5     Amortization of other assets              -      2.0      0.2      2.6     Write down of intangible assets           -      1.0      0.9      1.0     Equity (earnings) losses in      affiliates                            (0.2)       -     (0.2)     0.1     Non-controlling interest                3.1      3.0      8.6      7.6     Future income taxes                     4.5      0.9     (2.1)     9.0     Unrealized net foreign exchange gains  (9.1)   (10.1)    (8.4)   (12.1)     Non-cash stock based compensation       0.7      2.2      1.6      3.2   Investment in film and television    programs (note 12)                     (85.9)   (78.7)  (192.1)  (182.1)   Net changes in other non-cash balances    related to operations                   (8.5)     3.4    (35.8)   (24.9)                                         -----------------------------------                                             8.8     24.1     29.4     19.0   -------------------------------------------------------------------------   Investing activities   Purchases of property and equipment      (1.1)    (3.4)    (2.1)    (4.4)                                         -----------------------------------                                            (1.1)    (3.4)    (2.1)    (4.4)   -------------------------------------------------------------------------   Financing activities   Proceeds from  revolving credit    facility                                17.5     23.5     10.5     17.0   Proceeds from settlement of interest    rate swap                                1.1        -      1.1        -   Repayment of term loans                  (4.0)    (3.4)    (6.8)    (6.0)   Distributions paid to non-controlling    interest                                (5.8)    (5.7)   (12.1)   (11.5)   Issue of share capital                    0.2      3.1      3.9      6.8   Shares purchased and cancelled under    issuer bid                                 -    (31.1)       -    (55.4)                                         -----------------------------------                                             9.0    (13.6)    (3.4)   (49.1)   -------------------------------------------------------------------------   Effect of exchange rate changes on    cash and cash equivalents               (5.8)    (0.5)    (6.0)    (1.0)   -------------------------------------------------------------------------   Change in cash and cash equivalents      10.9      6.6     17.9    (35.5)   Cash and cash equivalents - beginning    of period                              121.4     68.5    114.4    110.6                                         -----------------------------------   Cash and cash equivalents - end of    period                                 132.3     75.1    132.3     75.1   -------------------------------------------------------------------------   -------------------------------------------------------------------------  

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; Jennifer Bell, Vice
President, Corporate & Public Affairs, Alliance Atlantis Communications Inc,
Tel: (416) 934-7854, Email: jennifer.bell@allianceatlantis.com

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