Welcome to the Cineplex Galaxy Income Fund 2006 Annual General Meeting 1
2 Welcome
Cineplex Entertainment Circuit Cineplex Odeon Theatres: 51 Screens: 491 Famous Players Theatres: 54 Screens: 573 Galaxy Cinemas Theatres: 24 Screens: 205 3
Famous Players Acquisition - Rationale The leading film exhibitor in Canada Accretive to distributable cash Complementary operations will lead to cost savings Opportunities to increase distributable cash through revenue growth Increase advertising market share and other income Addition of high quality theatres in metropolitan markets Superior combined management 4
Box Office Market Share Market Share of Canadian Box Office Revenues Cineplex Galaxy Combined After Divestiture Cineplex Galaxy 32.1% Other 6.9% 69% AMC 6.3% Empire 6.0% Landmark 3.1% Cineplex Entertainment Empire 13.6% 64.2% Empire 13.6% Other 9.8% AMC 6.3% Landmark 3.1% Guzzo 3.0% Guzzo 3.0% Famous Players 42.6% Source: A.C. Nielsen EDI data 5
Six Top-Tier Brands SilverCity Colossus Coliseum 22 theatres 3 theatres 4 theatres Famous Players Cineplex Odeon Galaxy 25 theatres 51 theatres 24 theatres 6
Industry overview 7
Consistent Long-Term Box Office Revenue Growth Canadian Box Office Revenue 1965-2006 $1,000 $750 CAGR since 1965: 5.6% $500 $250 $0 1965 1970 1975 1980 1985 1990 1995 2000 2005 Canadian Recessionary Periods 8
Industry Box Office 2005 Q1 2006 Canadian Industry* -8.6% 86% +2.0% Cineplex Entertainment -6.1% +2.3% (same store) * Source: Motion Picture Theatre Associations of Canada 9
Highest Grossing Films in 2005 Star Wars: Episode III Harry Potter and Goblet of Fire War of the Worlds Wedding Crashers Charlie and the Chocolate Factory $380 M $244 M $234 M $209 M $206 M 10
Upcoming Films for 2006 Mission Impossible May 2006 Poseidon May 2006 The Da Vinci Code May 2006 Over the Hedge May 2006 X-Men May 2006 11
Upcoming Films for 2006 Cars June 2006 Click June 2006 Superman Returns June 2006 Pirates of the Caribbean 2 July 2006 12
Upcoming Films for 2006 Casino Royale November 2006 The Santa Clause 3 November 2006 Happy Feet November 2006 Charlottes Web December 2006 13
Company overview 14
2005-2006 Key Accomplishment Repatriation of IT Function from Loews (New York) Vista POS Digital Pre-Show Network Famous Players Acquisition New credit facility Equity offering RioCan REIT transaction Divestiture completion to Empire and Fortune 15
2005-2006 Key Accomplishment Aurora Barrhaven 16
Increasing Revenue per Guest Revenue per Guest $9.83 $0.54 $2.64 $10.27 $0.53 $2.77 $10.84 $0.67 $11.23 $0.74 $2.89 $3.04 $12.28 $12.33 $1.11 $0.80 $3.44 $3.72 $6.65 $6.97 $7.28 $7.45 $7.73 $7.81 2001 2002 2003 2004 2005 Q1 2006 Box Office Concessions Other 17
Significant Other Revenue Contribution Other Revenues ($ millions) $62.5 $44.3 $13.4 $17.4 $20.9 $22.8 2001 2002 2003 2004 2005 Pro Forma LTM Mar. 2005 2005 excludes divestitures and includes FP for partial year Pro forma excludes divestitures 18
Synergies Three Core Synergies: 1. Reducing overhead costs and adopting best practices Consolidating two head offices Staff reductions Adopting best practices Enhanced revenues Operating savings 2. Media sales efficiencies and effectiveness Creation of Cineplex Media 3. Improved purchasing and merchandising opportunities Supplier contracts Merchandising strategies Concession management 19
Acquisition Synergies Annualized Synergies: ($ millions) Prospectus Q1 Current General and Administrative $15 $15 $15 Media 5 5 9 Operations - 5 6 Total $20 $25 $30 20
Looking Into the Future Leverage Over 60 Million Guests Magazine In-Theatre Interactive Media-Web Loyalty Naming Rights 21
22 Marketing
Marketing Commercial 23
Growth 1. Other income initiatives Digital pre-show network Cineplex Media Alternative programming 2. Merchandising 3. Theatre openings 24
Cineplex Media Magazine publishing: Famous Magazine, Famous Kids, Famous Quebec In-theatre advertising: Magazine, onscreen, posters, monitors, buildings, naming rights 25
Cineplex Media Revenue by Component Digital Pre-Show 29% Magazine 12% Lobby / Monitors 5% Full Motion 47% Commissions 4% Website and Other 3% 26
Digital Pre-Show Network Rollout Plan Phase 1: April 1 Launch Toronto Extended Market Area - 21 Locations; 215 Screens Phase 2: Complete Nationwide - Additional 800+ Screens TOTAL 89 theatres & 1020 screens 27
28 Alternative Programming
Merchandising Concession Per Patron $3.04 $0.20 $3.44 $0.39 $3.72 $0.56 $2.86 $3.05 $3.16 2004 2005 Q1 2006 Core RBO 29
30 The Best Partners
Deal Overview 5-Year Term Effective, April 28, 2006 Significant financial impact Concession rebates Media revenue Other revenue Focus on marketing and innovation to increase purchase incidence 31
32 Marketing and Innovation
33 Milton, ON - June 2006
34 Brossard, QC - June 2006
35 Saskatoon, SK - July 2006
36 Brockville, ON - July 2006
37 North Oshawa, ON - November 2006
38 Collingwood, ON - December 2006
New Theatres for 2006/07 Brand Location Screens Opening Galaxy Milton 8 June Cineplex Odeon Brossard 16 June Galaxy Saskatoon 12 July Galaxy Brockville 6 July Cineplex Odeon Oshawa 10 November Galaxy Collingwood 7 December SilverCity Burloak 12 2007 7 Theatres 71 Screens 39
Financial highlights 40
Annual Total Revenue ($ millions) 1,275 1,269 613 $197.5 678 394 740 $250.2 775 $316.4 $330.0 $353.7 $490.3 $740.0 2000 2001 2002 2003 2004 2005 Pro Forma LTM March 2005 Screen Count 2005 excludes divestitures and includes FP for partial year 41
Annual Attendance (millions) 60.1 21.1 25.5 30.7 30.4 31.8 39.9 2000 2001 2002 2003 2004 2005 Pro Forma LTM March 2005 2005 excludes divestitures and includes FP for partial year 42
Annual EBITDA ($ millions) $140.0 $120.0 EBITDA Margin 19.4% 20.4% 21.1% $101.4 $128.4 $ 1 00.0 $80.0 12.2% 2% 16.7% $63.0 $68.5 $74.5 $77.6 17.2% 15.8% 13.7% 15.0% $60.0 $41.7 $40.0 $24.1 $20.0 $0.0 5.0% 2000 2001 2002 2003 2004 2005 Pro forma LTM March 2005 Adjusted EBITDA Margins LTM March 2005: without synergies CGX 20.2% FP 9.0% Pro forma LTM March 2005 with synergies 2005 EBITDA excludes divestitures and non-recurring/transaction related items and includes FP for partial year 43
Total Revenue Q1 2006 ($ millions) +3.2% 32% $157.6 $162.7 $70.0 Q1 2005 Q1 2005 Pro Forma Q1 2006 44
Q1 2006 Attendance (millions) +0.9% 13.1 13.2 6.2 Q1 2005 Q1 2005 Pro Forma Q1 2006 45
Q1 2006 Adjusted EBITDA ($ millions) +282% $18.3 $10.8 $6.5 Q1 2005 Q1 2005 Pro Forma Q1 2006 Margin 15.4% 4.1% 11.2% 46
Credit Facilities Development facility Available - $60 million Working capital facility Available - $50 million Term facility Drawn - $235 million 47
Unit Holder Return Unit price at 2004 AGM $13.82 Unit price May 8, 2006 $16.50 Unit price appreciation $2.68 Distributions paid $1.15 15 Total Return 31.3% 48
Analyst Coverage Company Analyst Stock Rating BMO Nesbitt Burns Jeff Tkachuk Perform CIBC World Markets Petro Panarites Outperform Merrill Lynch Joel Sutherland Buy National Bank Financial Adam Shine Outperform Raymond James Andy Nasr Outperform RBC Capital Markets Walter Spracklin Outperform Scotia Capital Chris Blake Outperform TD Newcrest Adina Bloom Hold Wellington West Capital Markets Robert Winslow Buy Westwind Capital Partners Ben Mogil Buy 49
50 Questions