Broadcaster

Alliance Atlantis to spin off movie distribution unit into income fund

9/4/2003

TORONTO - Broadcaster, producer and distributor Alliance Atlantis Communications Inc. announced this week that it has filed a preliminary prospectus with the securities regulatory authorities in each of the provinces and territories of Canada for an initial public offering of units of Movie Distribution Income Fund.

The Fund has been created to indirectly acquire a non-controlling interest in the Canadian and U.K. motion picture distribution business carried on by Alliance Atlantis and its subsidiaries.

The proceeds of the offering will be used by the fund to acquire a non-controlling interest in Motion Picture Distribution LP, which will, on closing, acquire the business from Alliance Atlantis. The company will, in turn, use proceeds of the offering to reduce indebtedness in accordance with its stated policy in this regard.

The Company will retain a majority interest in the partnership after the offering. The underwriting syndicate for the offering will be co-led by CIBC World Markets Inc. and RBC Dominion Securities Inc.

It is expected that the fund will file by mid-September an amended and restated preliminary prospectus, containing additional financial information for the period ended June 30, 2003.

The Company's motion picture distribution business is the largest distributor of motion pictures in Canada, measured both by number of releases and theatrical box office receipts. The business is also developing a growing presence in the United Kingdom through its wholly-owned subsidiary, Momentum Pictures.

The business model is based on a portfolio approach to content acquisition. Distribution rights for motion pictures are obtained primarily under long-standing output agreements with leading U.S.-based independent studios, such as Miramax.

The business has built a motion picture catalogue with approximately 6,000 titles representing approximately 14,000 hours of programming rights. In each of the past three years the business has released an average of 80 theatrical motion pictures, 188 videos and 206 DVDs in Canada, and an average of 16 theatrical motion pictures, 40 videos and 37 DVDs in the United Kingdom. The business also sells programming to major Canadian and U.K. broadcasters.

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