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 /CNW/ - 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 No.1 drama on U.S. television with an
average of 20.5 million viewers per week. CSI: Miami ended its 5th season as
the No.5 drama on U.S. television with an average of 17 million viewers per
week. CSI: Miami is also currently ranked the No. 1 drama in syndication
within the United States. CSI: NY ended its 3rd season as the No.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
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: 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

Organization Profile

ALLIANCE ATLANTIS COMMUNICATIONS INC.

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