Alliance Imaging Reports Results for the Third Quarter and First Nine Months Ended September 30, 2006.

Raises Full Year 2006 Adjusted EBITDA Guidance; Provides Medicare Reimbursement Update; Announces 2007 Preliminary Adjusted EBITDA Outlook; and Management Change

ANAHEIM, Calif. -- Alliance Imaging, Inc. (NYSE:AIQ), a leading national provider of diagnostic imaging services, announced results for the third quarter and first nine months ended September 30, 2006.

Third Quarter and First Nine Months 2006 Financial Results

Revenue for the third quarter of 2006 increased 6.8% to $113.5 million from $106.2 million in the comparable 2005 quarter. For the first nine months of 2006, revenue was $344.1 million compared to $320.6 million in the same period of 2005, an increase of 7.3%.

Alliance's Adjusted EBITDA (as defined below), was $42.2 million in the third quarter, a 6.7% increase compared to $39.6 million in the same quarter a year ago. For the first nine months of 2006, Adjusted EBITDA totaled $130.7 million compared to $122.5 million in the first nine months of 2005, an increase of 6.7%. "Adjusted EBITDA" as defined under the terms of Alliance's Credit Agreement, is earnings before interest expense, net of interest income; income taxes; depreciation expense; amortization expense; minority interest expense; non-cash share-based compensation; a maximum of $750,000 of severance and related costs in each fiscal year; the tentative class action lawsuit settlement; and other non-cash charges. For a more detailed discussion of Adjusted EBITDA and reconciliation to net income, see the table entitled "Adjusted EBITDA" included in the tables following this release.

Earnings per share on a diluted basis, in accordance with generally accepted accounting principles, was $0.10 per share in both the third quarter of 2006 and the third quarter of 2005.

Earnings per share on a diluted basis were $0.30 and $0.34 per share for the first nine months of 2006 and 2005, respectively. Non-cash share-based compensation and severance and related costs reduced diluted earnings per share by $0.03 in the first nine months of 2006. The tentative class action lawsuit settlement, net of taxes, reduced diluted earnings per share by $0.03 in the first nine months of 2006.

Cash flows provided by operating activities were $28.7 million in the third quarter of 2006 compared to $42.3 million in the corresponding quarter of 2005, and totaled $77.2 million and $93.0 million in the first nine months of 2006 and 2005, respectively. Capital expenditures in the third quarter of 2006 were $13.5 million compared to $17.5 million in the third quarter of 2005, and were $56.5 million and $46.5 million for the first nine months of 2006 and 2005, respectively. Alliance opened five new fixed-sites in the third quarter of 2006 and has opened ten new fixed-sites in the first nine months of 2006.

Alliance's total long-term debt (including current maturities) decreased $35.8 million to $543.8 million as of September 30, 2006 from $579.6 million as of December 31, 2005. Cash and cash equivalents decreased $0.5 million to $12.9 million at September 30, 2006 from $13.4 million at December 31, 2005.

Paul S. Viviano, Chairman of the Board and Chief Executive Officer, stated, "We are pleased with our continued progress and our financial performance year to date. We are pleased to be in a position to increase our full year 2006 guidance given our current circumstances. To alleviate the impact of the industry-wide pressures that Alliance faces, we will continue to focus on investing in our growth products-PET/CT, fixed-sites and radiation therapy; operate our mobile MRI business efficiently; and continue to drive our cost-savings initiatives."

Full Year 2006 Guidance

The Company's previous guidance was for revenue to range from $445 million to $453 million and Adjusted EBITDA to range from $163 million to $168 million.

Alliance is raising its full year 2006 revenue and Adjusted EBITDA 2006 guidance. The Company's revenue guidance is now expected to range from $452.5 million to $455.5 million. Alliance's Adjusted EBITDA is now expected to range from $168.5 million to $171 million.

The Company's previous guidance was for capital expenditures to range from $85 to $90 million and the reduction in long-term debt, net of the change in cash and cash equivalents, to range from $25 million to $30 million.

Alliance now expects capital expenditures to range from $75 million to $80 million and expects a reduction in long-term debt, net of the change in cash and cash equivalents, to range from $30 million to $35 million.

Consistent with previous guidance, the Company expects to open 10 to 15 fixed-sites in 2006, a portion of which are planned to replace mobile service to the Company's current customers. The Company's full year 2006 income tax rate is expected to total approximately 41% of pretax income.

Medicare Reimbursement Reductions

On February 8, 2006, the Deficit Reduction Act of 2005 ("DRA") was signed into law by President George W. Bush. The DRA imposes caps on Medicare payment rates for certain imaging services, including MRI, PET and PET/CT, furnished in physician's offices and other non-hospital based settings. Under the cap, payments for specified imaging services cannot exceed the hospital outpatient payment rates for those services. This change is to apply to services furnished on or after January 1, 2007. The limitation is applicable to the technical component of the services only, which is the payment the Company receives for the services for which the Company bills directly under the Medicare Physician Fee Schedule. The technical reimbursement under the Physician Fee Schedule generally allows for higher reimbursement than under the hospital outpatient prospective payment system ("HOPPS").

On November 1, 2006, the Centers for Medicare and Medicaid Services ("CMS") issued a final determination of Medicare Part B HOPPS reimbursement rates for PET and PET/CT imaging procedures. The national rate for PET scans will be reduced from the current rate of $1,150 per scan to $855 per scan effective January 1, 2007. The national rate for PET/CT scans will be reduced from the current rate of $1,250 per scan to $950 per scan effective January 1, 2007.

For full year 2006, Alliance estimates that approximately 5.6% of the Company's revenue will be billed directly to the Medicare program, which has increased from approximately 4.3% of the Company's revenue billed directly to the Medicare program in 2005. If the DRA had been in effect for full year 2006, Alliance estimates the reduction in Medicare revenue due to the DRA reimbursement rate decrease would have reduced revenue and Adjusted EBITDA by approximately $9.7 million. Additionally, the PET and PET/CT Medicare HOPPS reduction would have reduced revenue and Adjusted EBITDA by approximately $2.8 million. Combined, the DRA and PET and PET/CT Medicare HOPPS rate reductions would have negatively impacted Alliance's 2006 revenue and Adjusted EBITDA by a total of $12.5 million.

In addition, the DRA also codifies the reduction in reimbursement for multiple images on contiguous body parts. Effective January 1, 2006, CMS pays 100% of the technical component of the higher priced imaging procedure and 75% for the technical component of each additional imaging procedure for multiple images of contiguous body parts within a family of codes performed in the same session. The Company believes that the implementation of this reimbursement reduction in 2006 has not had a significant impact on Alliance's financial condition and results of operation.

2007 Adjusted EBITDA Preliminary Outlook

Given the significant Medicare reimbursement reductions that will impact the Company in 2007, Alliance's preliminary 2007 outlook is for Adjusted EBITDA to range from $146 million to $154 million. The 2007 Medicare reimbursement reductions discussed above are expected to have a negative impact on Adjusted EBITDA of approximately $14 million. Alliance's 2007 budget is in the process of being completed and our 2007 Adjusted EBITDA outlook is subject to change. The Company is providing this preliminary outlook to assist in understanding the impact of the DRA and the PET and PET/CT HOPPS reimbursement changes and their projected impact on Alliance. Full year 2007 guidance is unavailable at this time and the Company intends to provide such guidance in mid-December 2006.

Management Change

The Company also announced that Andrew P. Hayek, Alliance's President and Chief Operating Officer, submitted his resignation effective January 2007 to pursue an opportunity with DaVita, Inc. Regarding Mr. Hayek's departure, Mr. Viviano stated, "Over the past four years, Andrew has led many of the initiatives which have helped transform Alliance Imaging and I greatly appreciate his outstanding leadership and performance. I wish Andrew well in his future endeavors. As we commence our efforts to select a candidate to succeed Andrew, I am highly confident that our senior management team will continue to move forward with the various initiatives underway to meet the opportunities and challenges facing Alliance."

Third Quarter 2006 Earnings Conference Call

Investors and all others are invited to listen to a conference call discussing third quarter 2006 results. The conference call is scheduled for Friday, November 3, 2006 at 1:00 p.m. Eastern Time. The call will be broadcast live on the Internet and can be accessed by visiting the Company's website at www.allianceimaging.com. Click on Audio Presentations in the Investor Relations section of the website to access the link. The conference call can also be accessed at [phone] (United States) or

[phone] (International). Interested parties should call at least five minutes prior to the conference call to register. A replay of the call can be accessed until February 4, 2007 by visiting the Company's website or by calling [phone] (United States) or [phone] (International). The conference call identification number is 8035531.

About Alliance Imaging

Alliance Imaging is a leading national provider of shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of diagnostic imaging systems deployed. Alliance provides imaging and therapeutic services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging centers. The Company had 494 diagnostic imaging systems, including 334 MRI systems and 71 PET or PET/CT systems, and served over 1,000 clients in 43 states at September 30, 2006. Of these 494 diagnostic imaging systems, 74 were located in fixed-sites, which includes systems installed in hospitals or other buildings on or near hospital campuses, medical groups' offices, or medical buildings and retail sites.

Forward-Looking Statements

This press release contains forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. For a complete list of risks and uncertainties, please refer to the Risk Factor section of the Company's Form 10-K for the year ended December 31, 2005 filed with the Securities and Exchange Commission.

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