Alliance Atlantis Communications Inc. Successfully Completes First Phase Of Re-Structuring On Target.

TORONTO--(BUSINESS WIRE)--Nov. 2, 1998-- Alliance Atlantis Co(NASDAQ:ALLIF) (TSE:AAC.A.) (ME:AAC.B.) ALLIANCE ATLANTIS COMMUNICATIONS INC. today announced the completion of the first phase of re-structuring the operations of the recently merged company. This follows the shareholder meetings of Alliance Communications Corporation and Atlantis Communications Inc. on September 16, 1998, at which a plan of arrangement to combine the two companies was overwhelmingly approved by shareholders. The Company subsequently announced that it intended to complete its review with respect to all staff positions and the status of all Canadian and international offices by the end of October.

As a result of that review, a total of 78 full-time and 44 contract and part-time positions across the Company (excluding the Broadcasting division) will be eliminated. While all areas across the Company were affected, the most significantly impacted were the Corporate and Administration functions. Of the total affected positions, 60 percent were Alliance-based and 40 percent were Atlantis-based.

Also as a result of the review, the Company announced today that it will be closing its Amsterdam office, previously responsible for Atlantis' television sales in Europe. The sales functions will be consolidated in the existing London, UK office.

The savings from this restructuring will contribute the majority of the previously announced $20 million in expected annualized operating cost savings. The Company expects to achieve the balance of the savings through a combination of merging the Broadcast Channels and a review of all business processes and discretionary spending throughout the Company.

The planned combination of the Company's four broadcasting channels -- History Television, Home & Garden Television, Life Network and Showcase -- is subject to the approval of the Canadian Radio-television & Telecommunications Commission (CRTC). Until then, the channels will continue to be operated separately under trusteeship.

Once the reorganization is complete, the Company expects to achieve the previously announced $20 million in annualized operating costs savings in the first full fiscal year following the merger. The Company continues to expect that the one-time cash costs of the restructuring and integration of the merger (including severance costs) will be approximately $50 million, of which approximately $35 million will result in an one-time charge to pre-tax earnings.

The Company continues to review the one-time non-cash charges to income and expects to determine the total amount of these by the time of ALLIANCE ATLANTIS' second quarter earnings news release in late November. The Company expects that these one-time non-cash charges to pre-tax income will be approximately $45 million, primarily resulting from the harmonization of each of the two companies' accounting policies and estimates, and the rationalization of the two companies' Development programs.

Michael MacMillan, Chairman and CEO of ALLIANCE ATLANTIS COMMUNICATIONS INC. said, "The merger has enabled the Company to implement an effective, integrated and cost-efficient operating structure. This has unfortunately resulted in the elimination of positions and the closure of offices. However, the new company, ALLIANCE ATLANTIS COMMUNICATIONS INC., is now better positioned to grow in all of our three core businesses - Television, Motion Pictures, and Cable Channel Broadcasting - much more effectively than either Alliance or Atlantis could have done on its own."

ALLIANCE ATLANTIS COMMUNICATIONS INC. is a leading international producer and distributor of filmed entertainment with significant ownership of Canadian cable channels. Headquartered in Toronto, ALLIANCE ATLANTIS operates offices in Los Angeles, London Montreal, Vancouver, Sydney, and Shannon. The Company's shares trade on the Toronto and Montreal stock exchanges under the symbols AAC.A, AAC.B and on NASDAQ under ALLIF.

Forward Looking Statements: This press release contains statements about expected future events and financial results that are forward-looking in nature and subject to risks and uncertainties, including satisfaction of the conditions to the transaction and the successful integration of Alliance and Atlantis. Those statements are intended to be covered by the safe harbour provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of additional factors that may affect future results is contained in both Alliance's recent filings with Securities and Exchange Commission in the U.S., and Alliance's and Atlantis' recent filings with securities regulatory authorities in Canada.