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

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CINEPLEX GALAXY CINEPLEX GALAXY

Canada’s #1 Film Exhibitor

Q2 Report

22

Cineplex Galaxy Cineplex Galaxy

Locations: 86Screens: 775

Locations: 80 Screens: 785

33

Rationale for the AcquisitionRationale for the Acquisition

The Leading Film Exhibitor in CanadaImmediately Accretive to Distributable CashComplementary Operations will Lead to Cost SavingsOpportunities to Increase Distributable Cash through Revenue GrowthAddition of High Quality theatres in Metropolitan MarketsSuperior Combined Management

The Leading Film Exhibitor in CanadaImmediately Accretive to Distributable CashComplementary Operations will Lead to Cost SavingsOpportunities to Increase Distributable Cash through Revenue GrowthAddition of High Quality theatres in Metropolitan MarketsSuperior Combined Management

44

Famous Players AcquisitionFamous 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

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

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ExecutiveExecutive

Ellis Jacob President & CEO

Anne FitzgeraldSr Vice

President Legal

Dan McGrathExecutive Vice

President

Gord NelsonChief Financial

Officer

Jeff KentChief

Technology Officer

Michael Kennedy

Executive VP, Film

Programming

Michael McCartney

Sr Ex VP, Film Programming

Robert O'BrienSr Vice

President, Human

Resources/Payroll

66

Top Tier Theatre BrandsTop Tier Theatre Brands

SilverCity22 theatres/286 screensBC, AB, MB, ON, QC

Colossus3 theatres/56 screensQC, ON, BC

77


Coliseum 4 theatres/49 screens3 in ON, QC

Paramount4 theatres/53 screensBC, AB, ON, QC“Renaming opportunity”

88


Premium “Urban” Market Brand 51 theatres/489 screens

Mid-size market brandCommunity focus23 theatres/193 screens

99

Financing the AcquisitionFinancing the Acquisition

Gross Proceeds Number of Units

Subscription Receipts $110 million 6,835,000

6.0% Convertible Debentures

$105 million

Incremental Borrowing under Credit Facility

$259 million

Subsequent repayments of incremental borrowing

RioCan transaction $67 million

Empire sale (27 theatres)

$83 million

Remaining divestitures $TBD

1010

SynergiesSynergies

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

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

1111

Market Share of Canadian Box Office RevenuesQ2 YTD 2004 Q2 YTD 2005

Market Share of Canadian Box Office RevenuesQ2 YTD 2004 Q2 YTD 2005

AMC: 6.5%AMC: 6.5%

Cineplex Galaxy:31.4%


Famous Players:42.8%


Empire: 5.7%Empire: 5.7%

Landmark: 2.9%Landmark: 2.9%Guzzo: 3.1%Guzzo: 3.1%

Other: 7.6%Other: 7.6%

Source: A.C. Nielsen EDI dataSource: A.C. Nielsen EDI data

Strong Market ShareStrong Market Share






Guzzo: 3.0%Guzzo: 3.0%Landmark: 3.1%Landmark: 3.1%


AMC: 6.3%AMC: 6.3%

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Market Share of Canadian Box Office Revenues

Q2 YTD 2005

Cineplex Galaxy Combined After Divestiture

Market Share of Canadian Box Office Revenues

Q2 YTD 2005

Cineplex Galaxy Combined After Divestiture

AMC: 6.3%AMC: 6.3%






Landmark: 3.1%Landmark: 3.1%Guzzo: 3.0%Guzzo: 3.0%


Source: A.C. Nielsen EDI dataSource: A.C. Nielsen EDI data

Strong Market ShareStrong Market Share


Cineplex Galaxy:64.2%Other: 9.8%Other: 9.8%

Guzzo: 3.0%Guzzo: 3.0%Landmark: 3.1%Landmark: 3.1%


AMC: 6.3%AMC: 6.3%

1313

Diverse Supply of FilmsDiverse Supply of Films

Cineplex Galaxy Film Supply by DistributorYTD Q2 2005

Cineplex Galaxy Film Supply by DistributorYTD Q2 2005

Paramount 6.0%Paramount 6.0%

Alliance Atlantis: 13.5%Alliance Atlantis: 13.5%

DreamWorks: 5.8%DreamWorks: 5.8%


Warner Bros: 13.0%

Warner Bros: 13.0%

Twentieth Century Fox.: 22.5%

Twentieth Century Fox.: 22.5%

Buena Vista 5.9%

Sony 12.1%

Universal 10.5%

MGM: 4.5%MGM: 4.5%

1515

$0

$250

$500

$750

$1,000

1965 1970 1975 1980 1985 1990 1995 2000

$0

$250

$500

$750

$1,000

1965 1970 1975 1980 1985 1990 1995 2000

Canadian Box Office Revenues1965 - 2004

Canadian Box Office Revenues1965 - 2004

$ Millions$ Millions

Canadian Recessionary PeriodsCanadian Recessionary Periods

CAGR since 1965: 6.3%CAGR since 1965: 6.3%

Consistent Long-Term Box Office Revenue GrowthConsistent Long-Term Box Office Revenue Growth

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Current Year CGX vs. IndustryCurrent Year CGX vs. Industry

Q1 Q2 Q2 YTD

Canadian Industry (*)

- 5.4% - 16.9%

- 11.7%

Cineplex Galaxy - 4.7% - 13.2%

- 9.2%

(*) source: Motion Picture Theatre Association of Canada

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462 453

411

471

510 509

461478 482

467 473 483

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

462 453

411

471

510 509

461478 482

467 473 483

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

8 12 10 15 16 18 21 22 20 24 28 22 8 12 10 15 16 18 21 22 20 24 28 22

Consistent Supply of Theatrical ReleasesConsistent Supply of Theatrical Releases

Source: Motion Picture Association of America, 2003Source: Motion Picture Association of America, 2003

US Annual Film ReleasesUS Annual Film Releases

Films greater than $100 million gross

Films greater than $100 million gross

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Highest Grossing Films in 2005Highest Grossing Films in 2005

Batman Begins

$202.5

Batman Begins

$202.5

Charlie and the Chocolate Factory

$194.8

Charlie and the Chocolate Factory

$194.8

Madagascar

$183.6

Madagascar

$183.6

War of the Worlds

$230.9

War of the Worlds

$230.9

Star Wars Episode3 Revenge of the Sith

$379.1

Star Wars Episode3 Revenge of the Sith

$379.1

In Millions of dollars

1919

Highest Grossing Films in 2004Highest Grossing Films in 2004

The Passion of the Christ

$370.2

The Passion of the Christ

$370.2Meet the Fockers

$279.2

Meet the Fockers

$279.2The Incredibles

$261.4

The Incredibles

$261.4

Spiderman 2

$373.5

Spiderman 2

$373.5

Shrek 2

$441.2

Shrek 2

$441.2

In Millions of Dollars

2020

Upcoming Films for 2005Upcoming Films for 2005

Harry Potter and the Goblet of Fire

November 2005

Harry Potter and the Goblet of Fire

November 2005

The Lion, the Witch and the Wardrobe

December 2005

The Lion, the Witch and the Wardrobe

December 2005

King Kong December 2005 King Kong

December 2005

Fun with Dick and Jane

December 2005

Fun with Dick and Jane

December 2005

The Producers

December 2005

2222

$6.65 $6.97 $7.28 $7.40 $7.44 $7.38 $7.92

$2.64 $2.77 $2.89 $3.00 $3.00 $3.15$3.35$0.54

$0.53$0.67 $0.72 $0.62 $0.83

$1.04

2001 2002 2003 2004 Q2 YTD 2004 Q2 YTD 2005 Pro formaLTM March

2005

Box Office Concession Anc illary

$6.65 $6.97 $7.28 $7.40 $7.44 $7.38 $7.92

$2.64 $2.77 $2.89 $3.00 $3.00 $3.15$3.35$0.54

$0.53$0.67 $0.72 $0.62 $0.83

$1.04

2001 2002 2003 2004 Q2 YTD 2004 Q2 YTD 2005 Pro formaLTM March

2005

Box Office Concession Anc illary

Increasing Revenue Per PatronIncreasing Revenue Per Patron

Revenue Per PatronRevenue Per Patron

Pro forma normalized values

$9.83 $10.27$10.84 $ 11.12 $ 11.06 $ 11.36

$12.31

2323

Box Office PricingBox Office Pricing

Strategy:

Cineplex Galaxy – Theatre based pricing strategy

Famous Players – Market based pricing strategy

Action Plan:

Integrate to theatre based pricing strategy

Strategy:

Cineplex Galaxy – Theatre based pricing strategy

Famous Players – Market based pricing strategy

Action Plan:

Integrate to theatre based pricing strategy

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$3.35$3.15$3.00$3.00$2.89$2.77$2.64

2001 2002 2003 2004 Q2 2004 YTD Q2 YTD 2005 Pro formaLTM March

2005

$3.35$3.15$3.00$3.00$2.89$2.77$2.64

2001 2002 2003 2004 Q2 2004 YTD Q2 YTD 2005 Pro formaLTM March

2005

Expanded Concessions Driving Revenue per PatronExpanded Concessions Driving Revenue per Patron

Average Concession Dollars per PatronAverage Concession Dollars per Patron

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2001 2002 2003 2004 Pro formaLTM March

2005

Q2 YTD 2004 Q2 YTD 2005

Advertising Games Other

2001 2002 2003 2004 Pro formaLTM March

2005

Q2 YTD 2004 Q2 YTD 2005

Advertising Games Other

Significant Other Revenue ContributionSignificant Other Revenue Contribution

Ancillary Revenues ($mill)Ancillary Revenues ($mill)

$13.4 $17.4$20.9

$22.8

$9.5 $12.0

+ 25.8%

$62.5

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Project ScreensProjectedOpening Brand

Barrhaven

Aurora

Milton

Brockville

Saskatoon

Brossard

Burloak

7

10

8

6

16

12

12

Oct. 21 2005

Nov. 18 2005

Spring 2006

Spring 2006

Spring 2006

Spring 2006

Fall 2006

New Projects Announced

2727

Cost ControlCost 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

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

2828

Corporate Initiatives 2005Corporate Initiatives 2005

New Theatres:

Theatre Rebranding

On-Screen Advertising Business Integration

POS System integration

Loyalty Program

Digital Advertising Pre-Show Network

New Theatres:

Theatre Rebranding

On-Screen Advertising Business Integration

POS System integration

Loyalty Program

Digital Advertising Pre-Show Network

2929

Threats to the BusinessThreats 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

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

3131

$197.5 $250.2 $316.4 $330.0 $353.7

$740.0613

1,278

775740694678

2000 2001 2002 2003 2004 Pro Forma

LTM March

2005

-250

-50

150

350

550

750

950

1150

1350

1550

$197.5 $250.2 $316.4 $330.0 $353.7

$740.0613

1,278

775740694678

2000 2001 2002 2003 2004 Pro Forma

LTM March

2005

-250

-50

150

350

550

750

950

1150

1350

1550

Annual Total RevenueAnnual Total Revenue

($ millions)($ millions)

Screen Count

3232

$130.1$169.3

$213.9 $221.2 $235.4

$475.9

2000 2001 2002 2003 2004 Pro forma

LTM March

2005

$130.1$169.3

$213.9 $221.2 $235.4

$475.9

2000 2001 2002 2003 2004 Pro forma

LTM March

2005

Annual Box OfficeAnnual Box Office


16.0% CAGR

3333

21.125.5

30.7 30.4 31.8

60.1

2000 2001 2002 2003 2004 Pro forma

LTM March

2005

21.125.5

30.7 30.4 31.8

60.1

2000 2001 2002 2003 2004 Pro forma

LTM March

2005

Annual AttendanceAnnual Attendance

(millions)(millions)

10.8% CAGR

3434

$52.9$67.2

$88.0$85.1

$201.5

$95.5

2000 2001 2002 2003 2004 Pro forma

LTM March

2005

$52.9$67.2

$88.0$85.1

$201.5

$95.5

2000 2001 2002 2003 2004 Pro forma

LTM March

2005

Annual Concession RevenuesAnnual Concession Revenues


15.9% CAGR

3535

$24.1

$41.7

$63.0$68.5

$74.5

$97.5

$117.5

15.6%

16.7%

19.4%20.4%

21.1%

13.2%12.2%

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

2000 2001 2002 2003 2004 Pro forma

LTM March

2005 without

synergies

Pro forma

LTM March

2005 with

synergies

5.0%

15.0%

$24.1

$41.7

$63.0$68.5

$74.5

$97.5

$117.5

15.6%

16.7%

19.4%20.4%

21.1%

13.2%12.2%

$0.0

$20.0

$40.0

$60.0

$80.0

$100.0

$120.0

2000 2001 2002 2003 2004 Pro forma

LTM March

2005 without

synergies

Pro forma

LTM March

2005 with

synergies

5.0%

15.0%

Annual EBITDAAnnual EBITDA


EBITDA Margin

Adjusted EBITDA Margins – LTM March 2005:

CGX 20.2%

FP 9.0%

3636

Flexible Financing StructureFlexible Financing Structure

Development Facility– Available - $60 million

Working Capital Facility– Available - $50 million

Term Facility– Available - $315 million (reduced with

divestiture proceeds)

Development Facility– Available - $60 million

Working Capital Facility– Available - $50 million

Term Facility– Available - $315 million (reduced with

divestiture proceeds)

3737

LeverageLeverage$ millions

Debt prior to acquisition of FP $141

Incremental acquisition debt 259

Repayment – RioCan transaction <67>

Repayment – Empire transaction <83>

Repayment – additional divestiture proceeds TBD

Net debt $250

Pro forma LTM March 2005 Adjusted EBITDA $101.4

Non-cash items 6.4

Pro forma LTM March 2005 “Adjusted Cash EBITDA” - pre-synergies

$107.8

Synergies 20.0

Pro forma LTM March 2005 “Adjusted Cash EBITDA” – post-synergies

$127.8

Pro forma LTM March 2005 Leverage – pre-synergies(*) 2.3 x

Prom forma LTM March 2005 Leverage – post-synergies (*) 2.0 x(*) excludes debt reduction with additional divestiture proceeds

3838

Focus on Value CreationFocus on Value Creation

The number one Canadian film exhibitor with a market share of 64.2 %+ of Canadian Box OfficeOwn and operate the five top-tier entertainment brands in CanadaSignificant opportunities to grow distributable cashOnly exhibitor in Canada with a continuing build programMarketing power of the brands – reach more than 85 million Canadians across the country.

The number one Canadian film exhibitor with a market share of 64.2 %+ of Canadian Box OfficeOwn and operate the five top-tier entertainment brands in CanadaSignificant opportunities to grow distributable cashOnly exhibitor in Canada with a continuing build programMarketing power of the brands – reach more than 85 million Canadians across the country.

3939

CINEPLEX GALAXY CINEPLEX GALAXY

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

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

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