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CINEPLEX GALAXY

CINEPLEX GALAXY. Q2 Report. Canada’s #1 Film Exhibitor. Cineplex Galaxy. Locations: 86 Screens: 775. Locations: 80 Screens: 785. Rationale for the Acquisition. The Leading Film Exhibitor in Canada Immediately Accretive to Distributable Cash

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CINEPLEX GALAXY

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  1. CINEPLEX GALAXY Q2 Report Canada’s #1 Film Exhibitor

  2. Cineplex Galaxy Locations:86 Screens:775 Locations: 80 Screens:785

  3. Rationale for the Acquisition • The Leading Film Exhibitor in Canada • Immediately Accretive to Distributable Cash • Complementary Operations will Lead to Cost Savings • Opportunities to Increase Distributable Cash through Revenue Growth • Addition of High Quality theatres in Metropolitan Markets • Superior Combined Management

  4. Famous Players Acquisition • Deal signed June 10, 2005 • Deal closed July 22, 2005 • Organization structure finalized July 29, 2005 • Sale of real estate to Rio Can completed August 4, 2005 • Employee integration/terminations completed August 5, 2005 • Announced sale of 27 locations to Empire on August 22, 2005 for gross proceeds of approx. $83 million

  5. Executive

  6. Top Tier Theatre Brands Colossus 3 theatres/56 screens QC, ON, BC SilverCity 22 theatres/286 screens BC, AB, MB, ON, QC

  7. Top Tier Theatre Brands Coliseum 4 theatres/49 screens 3 in ON, QC Paramount 4 theatres/53 screens BC, AB, ON, QC “Renaming opportunity”

  8. Top Tier Theatre Brands Mid-size market brand Community focus 23 theatres/193 screens • Premium “Urban” Market Brand • 51 theatres/489 screens

  9. Financing the Acquisition

  10. Synergies Completed to Date: • Employee head count reduced by 35% -- well on the way to meeting $20mm target • Head office employee integration/terminations completed August 5, 2005 Planned to Occur: • Vendor Contract negotiations • Head office facility integration - December 31, 2005 • Technology integration – October 31, 2005 • Merging the Media businesses – October 31, 2005 • Marketing efficiencies – single programs for all brands

  11. Strong Market Share Market Share of Canadian Box Office Revenues Q2 YTD 2004 Q2 YTD 2005 Cineplex Galaxy:31.4% Cineplex Galaxy:32.1% Other: 6.9% Other: 7.6% Guzzo: 3.1% Guzzo: 3.0% Landmark: 2.9% Landmark: 3.1% Empire: 6.0% Empire: 5.7% AMC: 6.5% AMC: 6.3% Famous Players:42.8% Famous Players:42.6% Source: A.C. Nielsen EDI data

  12. Strong Market Share Market Share of Canadian Box Office Revenues Q2 YTD 2005 Cineplex Galaxy Combined After Divestiture Cineplex Galaxy:32.1% Cineplex Galaxy:64.2% Other: 9.8% Other: 6.9% Guzzo: 3.0% Guzzo: 3.0% Landmark: 3.1% Landmark: 3.1% Empire: 6.0% Empire: 13.6% AMC: 6.3% AMC: 6.3% Famous Players:42.6% Source: A.C. Nielsen EDI data

  13. Diverse Supply of Films Cineplex Galaxy Film Supply by DistributorYTD Q2 2005 Other: 6.2% MGM: 4.5% Alliance Atlantis: 13.5% DreamWorks: 5.8% Paramount 6.0% Sony 12.1% Universal 10.5% Twentieth Century Fox.: 22.5% Buena Vista 5.9% Warner Bros: 13.0%

  14. Consistent Long-Term Box Office Revenue Growth Canadian Box Office Revenues 1965 - 2004 $ Millions CAGR since 1965: 6.3% Canadian Recessionary Periods

  15. Current Year CGX vs. Industry (*) source: Motion Picture Theatre Association of Canada

  16. Consistent Supply of Theatrical Releases US Annual Film Releases Films greater than $100 million gross 8 12 10 15 16 18 21 22 20 24 28 22 Source: Motion Picture Association of America, 2003

  17. Highest Grossing Films in 2005 In Millions of dollars Star Wars Episode3 Revenge of the Sith $379.1 War of the Worlds $230.9 Batman Begins $202.5 Charlie and the Chocolate Factory $194.8 Madagascar $183.6

  18. Highest Grossing Films in 2004 In Millions of Dollars Shrek 2 $441.2 Spiderman 2 $373.5 The Passion of the Christ $370.2 Meet the Fockers $279.2 The Incredibles $261.4

  19. Upcoming Films for 2005 Harry Potter and the Goblet of FireNovember 2005 The Lion, the Witch and the WardrobeDecember 2005 King KongDecember 2005 Fun with Dick and Jane December 2005 The Producers December 2005

  20. Increasing Revenue Per Patron Revenue Per Patron $12.31 $ 11.36 $ 11.06 $10.84 $ 11.12 $10.27 $9.83 Pro forma normalized values

  21. Box Office Pricing Strategy: • Cineplex Galaxy – Theatre based pricing strategy • Famous Players – Market based pricing strategy Action Plan: • Integrate to theatre based pricing strategy

  22. Expanded Concessions Driving Revenue per Patron Average Concession Dollars per Patron

  23. Significant Other Revenue Contribution Ancillary Revenues ($mill) $62.5 + 25.8% $22.8 $20.9 $17.4 $13.4 $12.0 $9.5

  24. New Projects Announced Project Screens Projected Opening Brand 7 Barrhaven Oct. 21 2005 Aurora 10 Nov. 18 2005 Milton 8 Spring 2006 Brockville 6 Spring 2006 Saskatoon 12 Spring 2006 Brossard 16 Spring 2006 Burloak 12 Fall 2006

  25. Cost Control • Prominent market position allows for effective management of direct theatre-level costs • Best practices amongst both companies will result in incremental operating savings and revenue enhancements • Significant focus on managing costs to the business volumes

  26. Corporate Initiatives 2005 • New Theatres: • Theatre Rebranding • On-Screen Advertising Business Integration • POS System integration • Loyalty Program • Digital Advertising Pre-Show Network

  27. Threats to the Business Threats: • Piracy • DVD release window erosion • Quality of Film Product Opportunities: • Social aspect of an out-of-home experience vs. stay at home • Theatre technology is far superior to “in-home” television system and screen • Entertainment Destinations

  28. Annual Total Revenue ($ millions) Screen Count

  29. Annual Box Office ($ millions) 16.0% CAGR

  30. Annual Attendance (millions) 10.8% CAGR

  31. Annual Concession Revenues ($ millions) 15.9% CAGR

  32. Annual EBITDA ($ millions) EBITDA Margin Adjusted EBITDA Margins – LTM March 2005: CGX 20.2% FP 9.0%

  33. Flexible Financing Structure • Development Facility • Available - $60 million • Working Capital Facility • Available - $50 million • Term Facility • Available - $315 million (reduced with divestiture proceeds)

  34. Leverage (*) excludes debt reduction with additional divestiture proceeds

  35. Focus on Value Creation • The number one Canadian film exhibitor with a market share of 64.2 %+ of Canadian Box Office • Own and operate the five top-tier entertainment brands in Canada • Significant opportunities to grow distributable cash • Only exhibitor in Canada with a continuing build program • Marketing power of the brands – reach more than 85 million Canadians across the country.

  36. CINEPLEX GALAXY Contact: Gord Nelson, Chief Financial Officer, 416-323-6602 Pat Marshall, Vice President Investor Relations, 416-323-6648

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