25SEP200317075567 25SEP200317162060

No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise. This amended and restated preliminary prospectusconstitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the ‘‘U.S. Securities Act’’) or any state securities laws andmay not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable state securities laws or pursuantto an exemption therefrom. Accordingly, the securities will only be offered or sold within the United States pursuant to Rule 144A under the U.S. Securities Act and thereaftermay only be reoffered or resold in the United States or to a U.S. person pursuant to the registration requirements of the U.S. Securities Act and applicable state securities laws oran exemption therefrom. See ‘‘Plan of Distribution’’.

AMENDED AND RESTATED PRELIMINARY PROSPECTUSInitial Public Offering October 27, 2003

CINEPLEX GALAXY INCOME FUND$ �� Units

This prospectus qualifies the distribution (the ‘‘Offering’’) of � units (the ‘‘Units’’) of Cineplex Galaxy Income Fund (the ‘‘Fund’’). The Fund isan unincorporated, open-ended, limited purpose trust established under the laws of the Province of Ontario. The Fund was created to indirectlyacquire and hold � % of the outstanding limited partnership units of Cineplex Galaxy LP (together with its general partner and subsidiaries, the‘‘Partnership’’) assuming no exercise of the Over-Allotment Option (as defined herein) ( � % if the Over-Allotment Option is exercised in full).Following closing of the Offering (‘‘Closing’’), � % of the outstanding limited partnership units of Cineplex Galaxy LP will be held by theInvestors (as defined herein) assuming no exercise of the Over-Allotment Option ( � % if the Over-Allotment Option is exercised in full). See‘‘Funding and Related Transactions’’ and ‘‘Use of Proceeds’’.Cineplex Galaxy LP has been formed to acquire substantially all of the business assets of Cineplex Odeon Corporation (‘‘COC’’) and all of theshares of Galaxy Entertainment Inc. (‘‘GEI’’). Following Closing, the Partnership will be one of the two leading film exhibition companies inCanada, with 81 theatres and 731 screens operating under the Cineplex Odeon and Galaxy brands. Box office revenues from these theatresrepresented approximately 29% of total Canadian box office revenues for the first eight months of 2003. See ‘‘Business of the Partnership’’.The Fund intends to make monthly distributions of its available cash to the maximum extent possible, although such distributions are not assured.The ability of the Fund to make cash distributions, and the actual amount distributed, will be entirely dependent on the operations and assets of thePartnership, and will be subject to various factors including the Partnership’s financial performance, its obligations under applicable credit facilities,fluctuations in its working capital, the sustainability of its margins and its capital expenditure requirements. In addition, the composition of cashdistributions for tax purposes may change over time and this may affect the after-tax return for investors. See ‘‘Certain Canadian Federal IncomeTax Considerations’’. The first such payment is expected to be made to holders of Units (the ‘‘Unitholders’’) on or about � , 2003 in respect ofthe period from Closing to � , 2003. See ‘‘Description of the Fund — Cash Distributions’’.There is currently no market through which the Units may be sold and purchasers may not be able to resell Units purchased under this prospectus.In connection with the Offering, the Underwriters (as defined herein) may over-allot or effect transactions that stabilize or maintain the marketprice of the Units at levels other than those which otherwise might prevail on the open market. See ‘‘Plan of Distribution’’.An investment in the Units is subject to a number of risks that should be considered by a prospective purchaser. The ability of the Fund to make cashdistributions will be dependent upon, among other things, the operations and assets of the Partnership. Cash distributions are not guaranteed. See‘‘Risk Factors’’.

Price: $10.00 per UnitPrice to the Public(1) Underwriters’ Fee Net Proceeds to the Fund(2)

Per Unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10.00 $ � $ �Total Offering(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ � $ � $ �

Notes:(1) The price of the Units has been determined by negotiation between the Fund, Cineplex Odeon Corporation, Galaxy Entertainment Inc. and the Underwriters.(2) Before deducting the expenses of the Offering, which are estimated to be approximately $ � , which expenses, together with the Underwriters’ fees, will be paid

by the Partnership from the proceeds of the Offering.(3) The Fund has granted the Underwriters an over-allotment option, exercisable for a period of 30 days from the Closing, to purchase up to an additional � Units

on the same terms as set out above solely to cover over-allotments, if any, and for market stabilization purposes (the ‘‘Over-Allotment Option’’). If theOver-Allotment Option is exercised in full, the total ‘‘Price to the Public’’, ‘‘Underwriters’ Fee’’ and ‘‘Net Proceeds to the Fund’’ will be $ � , $ � and $ � ,respectively. If the Over-Allotment Option is exercised in full, the Fund will indirectly hold a � % interest in the Partnership. This prospectus qualifies thedistribution of the Over-Allotment Option and the issuance and subsequent transfer of the Units issuable upon exercise of that option. See ‘‘Plan of Distribution’’.This prospectus also qualifies the distribution by the Fund of the exchange rights described under ‘‘Funding and Related Transactions — Exchange Agreement’’ andthe � Units issuable upon the exercise of the exchange rights.

RBC Dominion Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., GriffithsMcBurney & Partners and Westwind Partners Inc. (the ‘‘Underwriters’’), as principals, conditionally offer the Units, subject to prior sale, if, as andwhen issued and delivered by the Fund to, and accepted by, the Underwriters in accordance with the conditions contained in the UnderwritingAgreement referred to under ‘‘Plan of Distribution’’ and subject to the approval of certain legal matters on behalf of the Fund and CineplexGalaxy LP by Goodmans LLP and on behalf of the Underwriters by Torys LLP. Subscriptions for the Units will be received subject to rejection orallotment in whole or in part and the right is reserved to close the subscription books at any time without notice. A book-entry only certificaterepresenting the Units will be issued in registered form to The Canadian Depository for Securities Limited (‘‘CDS’’) or its nominee and will bedeposited with CDS on the date of the Closing which is expected to occur on or about � , 2003, or such later date as the Fund and theUnderwriters may agree, but in any event not later than � , 2003. A purchaser of Units will receive only a customer confirmation from aregistered dealer that is a CDS participant and from or through which the Units are purchased.Scotia Capital Inc. and National Bank Financial Inc. are subsidiaries of Canadian chartered banks that are members of a syndicate of financialinstitutions that have made credit facilities available to Galaxy Entertainment Inc. and to which Galaxy Entertainment Inc. is currently indebted. Inaddition, the Canadian banks of which RBC Dominion Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., BMO Nesbitt Burns Inc. andNational Bank Financial Inc. are subsidiaries have agreed to make credit facilities available to the Partnership. Accordingly, under applicablesecurities laws, the Fund may be considered a ‘‘connected issuer’’ to such Underwriters. See ‘‘Debt Financing’’ and ‘‘Plan of Distribution’’.

A copy of this amended and restated preliminary prospectus has been filed with the securities regulatory authorities in each of the provinces and territories of Canada but has notyet become final for the purposes of the sale of securities. Information contained in this amended and restated preliminary prospectus may not be complete and may have to beamended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authorities.

TABLE OF CONTENTS

Page Page

ELIGIBILITY FOR INVESTMENT . . . . . . . . 1 CINEPLEX ODEON CORPORATIONMANAGEMENT’S DISCUSSION ANDDEFINITION OF EBITDA AND ANALYSIS OF FINANCIAL CONDITIONNORMALIZED EBITDA . . . . . . . . . . . . . 1 AND RESULTS OF OPERATIONS . . . . . . 52

FORWARD-LOOKING STATEMENTS . . . . . 2GALAXY ENTERTAINMENT INC.

TRADEMARKS . . . . . . . . . . . . . . . . . . . . . . 2 MANAGEMENT’S DISCUSSION ANDANALYSIS OF FINANCIAL CONDITIONPROSPECTUS SUMMARY . . . . . . . . . . . . . . 3AND RESULTS OF OPERATIONS . . . . . . 60

THE FUND, THE TRUST AND CINEPLEXMANAGEMENT, TRUSTEES ANDGALAXY LP . . . . . . . . . . . . . . . . . . . . . . 17

DIRECTORS . . . . . . . . . . . . . . . . . . . . . . 65FILM EXHIBITION INDUSTRY . . . . . . . . . . 17

EXECUTIVE COMPENSATION . . . . . . . . . . 70BUSINESS OF THE PARTNERSHIP . . . . . . . 23

FUNDING AND RELATEDOverview . . . . . . . . . . . . . . . . . . . . . . . . . . 23 TRANSACTIONS . . . . . . . . . . . . . . . . . . . 71Competitive Strengths . . . . . . . . . . . . . . . . . 24 SUPPORT ARRANGEMENTS . . . . . . . . . . . 77Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 DESCRIPTION OF THE FUND . . . . . . . . . . 78Operations . . . . . . . . . . . . . . . . . . . . . . . . 26 DESCRIPTION OF THE TRUST . . . . . . . . . 88Theatre Circuit . . . . . . . . . . . . . . . . . . . . . 28 DESCRIPTION OF CINEPLEX GALAXY LP 91Services Agreement . . . . . . . . . . . . . . . . . . 32 DESCRIPTION OF CINEPLEX

GALAXY GP . . . . . . . . . . . . . . . . . . . . . . 94Competition . . . . . . . . . . . . . . . . . . . . . . . 32PRINCIPAL UNITHOLDERS . . . . . . . . . . . . 94Seasonality . . . . . . . . . . . . . . . . . . . . . . . . 33

PLAN OF DISTRIBUTION . . . . . . . . . . . . . 95Trademarks . . . . . . . . . . . . . . . . . . . . . . . . 33

PRIOR ISSUANCES . . . . . . . . . . . . . . . . . . . 96Cineplex Odeon Corporation Restructuring . . 33

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . 96Regulatory Environment . . . . . . . . . . . . . . . 34

CERTAIN CANADIAN FEDERAL INCOMESUMMARY OF DISTRIBUTABLE CASH . . . 35TAX CONSIDERATIONS . . . . . . . . . . . . . 97SELECTED FINANCIAL INFORMATION . . 37

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . 101RECONCILIATION OF HISTORICALREVENUE TO NORMALIZED MATERIAL CONTRACTS . . . . . . . . . . . . . . 108REVENUE . . . . . . . . . . . . . . . . . . . . . . . . 39 EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . 109

RECONCILIATION OF HISTORICAL LEGAL PROCEEDINGS . . . . . . . . . . . . . . . 109RESULTS TO EBITDA ANDPROMOTER . . . . . . . . . . . . . . . . . . . . . . . . 109NORMALIZED EBITDA . . . . . . . . . . . . . 40

CONSOLIDATED CAPITALIZATION OF AUDITORS, TRANSFER AGENT ANDTHE FUND . . . . . . . . . . . . . . . . . . . . . . . 41 REGISTRAR . . . . . . . . . . . . . . . . . . . . . . 109

CONSOLIDATED CAPITALIZATION OF PURCHASERS’ STATUTORY RIGHTS . . . . . 109THE PARTNERSHIP . . . . . . . . . . . . . . . . . 41 GLOSSARY OF TERMS . . . . . . . . . . . . . . . . G-1

DEBT FINANCING . . . . . . . . . . . . . . . . . . . 42 FINANCIAL STATEMENTS . . . . . . . . . . . . . F-1MANAGEMENT’S DISCUSSION AND CERTIFICATE OF THE FUND ANDANALYSIS OF COMBINED FINANCIAL THE PROMOTER . . . . . . . . . . . . . . . . . . C-1CONDITION AND RESULTS OF

OPERATIONS . . . . . . . . . . . . . . . . . . . . . 43 CERTIFICATE OF THE UNDERWRITERS . C-2

i

ELIGIBILITY FOR INVESTMENT

Subject to compliance with the prudent investment standards and general investment provisions andrestrictions of the statutes referred to below (and, where applicable, the regulations made under those statutes)and, in certain cases, subject to the satisfaction of additional requirements relating to investment or lendingpolicies, standards, procedures and goals and, in certain cases, subject to the filing of such policies, standards,procedures or goals, the Units offered under this prospectus would not, if the date hereof was the date of theClosing, be precluded as investments under the following statutes:

Insurance Companies Act (Canada); Pension Benefits Act (Ontario);Pension Benefits Standards Act, 1985 (Canada); Trustee Act (Ontario);Trust and Loan Companies Act (Canada); Loan and Trust Corporations Act (Ontario);Cooperative Credit Associations Act (Canada); An Act respecting insurance (Québec) for anLoan and Trust Corporations Act (Alberta); insurer, as defined therein, incorporated underInsurance Act (Alberta); the laws of the Province of Québec, other thanEmployment Pension Plans Act (Alberta); a guarantee fund, an insurance fund or aAlberta Heritage Savings Trust Fund Act (Alberta); mutual association;Pension Benefits Standards Act (British Columbia); An Act respecting trust companies and savingsFinancial Institutions Act (British Columbia); companies (Québec) for a trust corporationThe Insurance Act (Manitoba); investing its own funds and funds received asThe Trustee Act (Manitoba); deposits and a savings corporation investing itsThe Pension Benefits Act (Manitoba); own funds;Pension Benefits Act (Nova Scotia); Supplemental Pension Plans Act (Québec); andTrustee Act (Nova Scotia); The Pension Benefits Act, 1992 (Saskatchewan).

In the opinion of Goodmans LLP, counsel to the Fund and Cineplex Galaxy LP, and of Torys LLP, counsel tothe Underwriters, provided that the Fund is a mutual fund trust under the Income Tax Act (Canada) (the‘‘Tax Act’’) on the date of this prospectus: (i) the Units will be qualified investments under the Tax Act for trustsgoverned by registered retirement savings plans, registered retirement income funds, deferred profit sharingplans and registered education savings plans, each as defined in the Tax Act (collectively, the ‘‘Plans’’) on thatdate; and (ii) based, in part, on a certificate of the Fund as to certain factual matters, the Units, if issued on thedate of this prospectus, would not on that date constitute ‘‘foreign property’’ for the purposes of the tax imposedunder Part XI of the Tax Act on those Plans (other than registered education savings plans), registeredinvestments and other tax exempt entities, including most registered pension funds or plans. Registerededucation savings plans are not subject to the foreign property rules. See ‘‘Certain Canadian Federal Income TaxConsiderations’’ and ‘‘Risk Factors’’.

DEFINITION OF EBITDA AND NORMALIZED EBITDA

References to ‘‘EBITDA’’ are to earnings before interest, income taxes and amortization. References to‘‘Normalized EBITDA’’ are to EBITDA adjusted for certain items that management believes facilitates thecomparison of historical periods. As described in the section ‘‘Reconciliation of Historical Results to EBITDAand Normalized EBITDA’’, Normalized EBITDA: (i) excludes losses on impairment of theatre assets,(ii) excludes costs incurred in connection with COC’s reorganization, (iii) excludes gains realized in theextinguishment of certain indebtedness in connection with COC’s reorganization, (iv) excludes the effect ofrestructuring charges, (v) excludes the effect of gain on investment disposal, (vi) excludes the effects of certaintheatres that were closed by COC as a part of its reorganization process as well as certain assets to be retainedby COC that are not integral to COC’s film exhibition business, (vii) reflects amendments to contractual leasearrangements achieved by COC through its reorganization, (viii) excludes the effect of management fees to beterminated on closing, (ix) excludes foreign currency exchange effects which, as a result of the transactionsdescribed in this prospectus, the Partnership does not expect to continue to incur, and (x) excludes gains ondisposal of certain theatre assets. All of such adjustments are based on historical information or contractualcommitments.

Because the Fund distributes substantially all of its cash on an on-going basis (after providing for certainamounts described elsewhere in this prospectus), management believes that EBITDA and Normalized EBITDA

1

are important measures in evaluating the performance of the Partnership and in determining whether to investin Units of the Fund. Specifically, management believes that Normalized EBITDA is the appropriate measurefrom which to make adjustments to determine the Distributable Cash of the Fund.

EBITDA and Normalized EBITDA are not earnings measures recognized by generally accepted accountingprinciples in Canada (‘‘GAAP’’) and do not have standardized meanings prescribed by GAAP. Therefore,EBITDA and Normalized EBITDA may not be comparable to similar measures presented by other issuers.Investors are cautioned that EBITDA and Normalized EBITDA should not be construed as an alternative to netincome or loss determined in accordance with GAAP as indicators of the Partnership’s performance or to cashflows from operating, investing and financing activities as measures of liquidity and cash flows. For areconciliation of EBITDA and Normalized EBITDA to income/(loss) from operations, based on the historicalfinancial statements contained elsewhere in this prospectus presented in accordance with GAAP, see‘‘Reconciliation of Historical Results to EBITDA and Normalized EBITDA’’.

FORWARD-LOOKING STATEMENTS

Certain statements in this prospectus may constitute ‘‘forward-looking’’ statements that involve known andunknown risks, uncertainties and other factors that may cause the actual results, performance or achievementsof the Fund or the Partnership, or industry results, to be materially different from any future results,performance or achievements expressed or implied by such forward-looking statements. When used in thisprospectus, such statements use such words as ‘‘may’’, ‘‘will’’, ‘‘expect’’, ‘‘believe’’, ‘‘plan’’ and other similarterminology. These statements reflect current expectations regarding future events and operating performanceand speak only as of the date of this prospectus. Forward-looking statements involve significant risks anduncertainties, should not be read as guarantees of future performance or results, and will not necessarily beaccurate indications of whether or not such results will be achieved. A number of factors could cause actualresults to differ materially from the results discussed in the forward-looking statements, including, but notlimited to, the factors discussed under ‘‘Risk Factors’’. Although the forward-looking statements contained inthis prospectus are based upon what management believes are reasonable assumptions, neither the Fund nor thePartnership can assure investors that actual results will be consistent with these forward-looking statements.These forward-looking statements are made as of the date of this prospectus, and the Fund and the Partnershipassume no obligation to update or revise them to reflect new events or circumstances.

TRADEMARKS

The trademarks ‘‘Cineplex’’, ‘‘Cineplex Odeon’’ and ‘‘Galaxy’’, among others, are trademarks owned byCOC or GEI that will be owned by the Partnership on completion of this Offering. On Closing, CineplexGalaxy LP, GEI, the Trust and the Fund will enter into a licence agreement pursuant to which the Trust and theFund and, in the case of the trademarks owned by GEI, Cineplex Galaxy LP, will be granted a licence to usethese trademarks in Canada. In addition, COC and its affiliates will be permitted to continue to use certaintrademarks, including the ‘‘Cineplex’’ and ‘‘Cineplex Odeon’’ trademarks, following Closing.

2

PROSPECTUS SUMMARY

The following is a summary of the principal features of the Offering and should be read together with the moredetailed information and financial data and statements contained elsewhere in this prospectus. Cineplex Galaxy LP,together with its general partner and subsidiaries, are collectively referred to herein as the ‘‘Partnership’’. References inthis prospectus to the Partnership include, for the periods prior to Closing, the businesses of COC and GEI to beacquired by Cineplex Galaxy LP. Unless otherwise indicated, the disclosure contained in this prospectus assumes that(i) the steps under the heading ‘‘Funding and Related Transactions’’ have been completed, and (ii) theOver-Allotment Option is not exercised. In this prospectus, unless otherwise indicated, all dollar amounts areexpressed in Canadian dollars and references to ‘‘$’’ are to Canadian dollars. Please refer to the ‘‘Glossary of Terms’’at the end of this prospectus for a list of defined terms used herein.

Box office data for the first eight months of 2003 is from A.C. Nielsen EDI. Although there may be certain smallindependent theatres which do not report to A.C. Nielsen, these figures are widely used in the film exhibition industryand management believes they are reliable.

The Fund

The Fund is an unincorporated, open-ended, limited purpose trust established under the laws of theProvince of Ontario, created to indirectly acquire and hold all of the Class A LP Units, representing � % ofthe outstanding limited partnership units of Cineplex Galaxy LP (‘‘LP Units’’), and � % of the outstandingshares of Cineplex Galaxy GP. Following completion of the Offering, all of the Class B LP Units, representing

� % of the outstanding LP Units, and � % of the outstanding shares of Cineplex Galaxy GP, will be heldby the Investors. Effective on Closing, Cineplex Galaxy LP will own substantially all of the theatre businessassets of COC and all of the shares of GEI. See ‘‘Description of the Fund’’ and ‘‘Business of the Partnership’’.

Business of the Partnership

The Partnership is one of the two leading film exhibition companies in Canada. The Partnership owns,operates or has an interest in 81 theatres with 731 screens in six provinces. The Partnership’s box office revenuesfor the first eight months of 2003 represented approximately 29% of total Canadian box office revenues.

Film Exhibition Industry

Demand for theatrical films in Canada has shown stable growth over the past 10 years, with box officerevenue growing at a compound annual growth rate of 9.7%, achieving a record level of approximately$946 million in 2002, according to Screen Digest. This record of long-term growth in the Canadian filmexhibition industry is primarily a function of the following factors:

• Record attendance: Approximately 128 million patrons attended movies in 2002, compared to 74 million in1992, representing a compound annual growth rate of 5.6%.

• Stronger box office economics: Average ticket prices increased from $5.10 in 1992 to $7.39 in 2002,representing a compound annual growth rate of 3.8%.

• Increased frequency of attendance by movie-goers: Film attendance frequency increased from 2.8 movies percapita per year in 1992 to 4.2 movies in 2002.

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The following chart demonstrates the sustained growth of Canadian box office revenues since 1965:

Canadian Box Office Revenues (1965-2002)

$0

$250

$500

$750

$1,000

1965 1970 1975 1980 1985 1990 1995 2000

in M

illi

ons

CAGR since 1965 = 6.7%

CAGR since 1997 = 13.5%

Source: Screen Digest, 2003.

The exceptional growth in attendance levels and box office revenues since 1997 is attributable to threemajor factors: the positive market response to the modernization of theatre circuits, increased studio marketingexpenditures and the greater number of ‘‘blockbuster’’ film releases. The industry modernization was driven bymajor exhibitors upgrading their theatre circuits to the modern multiplex format, which was introduced inCanada in 1997. Modern multiplexes improved the movie-going experience through amenities such as stadiumseating, large screens, digital sound and expanded concession offerings. Film studios markedly increased theirspending on production and marketing to benefit from this response to modern multiplexes which also drivesadditional revenue streams from downstream markets.

The following table presents information regarding the Canadian film exhibition industry since 1997:

AnnualAverage Attendance

Box Office Ticket FrequencyYear Revenues Attendance Price Total Screens Per Capita

(millions) (millions) (at year end)

1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 502.7 99.9 $5.03 2,301 3.5x1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 592.2 112.8 $5.25 2,574 3.9x1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 658.7 117.8 $5.59 2,923 4.0x2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 698.5 119.8 $5.83 2,940 4.0x2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 813.0 123.3 $6.60 2,864 4.1x2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 945.5 128.0 $7.39 2,753 4.2xCompound annual growth rate (1997-2002) . . . . . . . 13.5% 5.1% 8.0% 3.7%

Source: Screen Digest, 2003.

The Partnership and Famous Players had a combined market share of approximately 75% of the totalCanadian box office revenues for the first eight months of 2003. The third largest industry participant,AMC Entertainment Inc., had approximately a 6% market share during the same period, and three othercompanies held regional market positions with national shares between 2% and 5%.

4

Current Industry Trends

Importance of Theatrical Success in Establishing Movie Brands and Subsequent Markets

Theatrical exhibition is the initial and most important distribution channel for new motion picture releases.A successful theatrical release which ‘‘brands’’ a film is often the determining factor in its popularity and value in‘‘downstream’’ distribution channels, such as home video, DVD and pay-per-view, network and syndicatedtelevision.

Increased Investment in Production and Marketing of Films by Studios

Additional revenues generated by films in domestic, international and downstream markets have driven themajor studios to increase spending on producing and marketing new theatrical releases at a compound annualgrowth rate of 7.2% over the past ten years, from US$6.5 billion in 1992 to over US$13 billion in 2002.

Increased Supply of Successful Films

Studios are increasingly producing films in series, such as Harry Potter, Lord of the Rings, Star Wars and TheMatrix. When the first film in a series is successful, subsequent films in that series benefit from existing publicawareness and anticipation. The result is that such features typically attract large audiences and generate strongbox office revenues.

The success of a broader range of film genres also benefits film exhibitors. The studios’ success in producingand marketing a wide variety of diverse yet commercially appealing movies such as Chicago, Seabiscuit, My BigFat Greek Wedding, Crouching Tiger, Hidden Dragon and A Beautiful Mind has expanded the demographic base ofregular movie-goers and also contributed to greater per capita attendance.

Favourable Demographic Attendance Trends

The demographic segment of the movie-going population in the U.S. that attends the most movies isbetween 12 to 17 years of age. This group is expanding and continues to be the largest segment of movie-goers.The ‘‘baby boom’’ generation, currently between the ages of 39 and 57, is also attending more movies in the U.S.Management believes that similar trends exist in Canada. According to Statistics Canada, these segments of thepopulation are expected to increase in Canada over the next few years. Management believes that thesedemographic trends will result in higher attendance levels and continued growth in the film exhibition business.

Convenient and Affordable Form of Out-of-Home Entertainment

With an average movie ticket price in Canada of only $7.39 in 2002, the movie-going experience continuesto provide value and compares favourably to alternative forms of out-of-home entertainment in Canada such asprofessional sporting events or live theatre.

Reduced Seasonality of Revenues

Historically, film exhibition industry revenues have been seasonal, with the most marketable motionpictures generally being released during the summer and the late-November through December holiday season.More recently, the seasonality of motion picture exhibition attendance has become less pronounced as filmstudios have expanded the historical summer and holiday release windows and increased the number of heavilymarketed films released during traditionally weaker periods.

Diversification of Revenue Streams

While box office revenues continue to account for the largest portion of exhibitors’ revenues, expandedconcession offerings, advertising, games, promotions and other ancillary revenue streams have increased as ashare of total revenues. The margins on these other revenue streams, particularly advertising, are much higherthan on admission sales and have enhanced the profitability of the industry in general.

5

Business Overview

The Partnership operates theatres under the Cineplex Odeon brand, which has enjoyed an establishedurban market presence in Canada for over 20 years, and the newer Galaxy brand, which is rapidly developing areputation as a primary entertainment destination in mid-sized communities.

The Partnership’s modern multiplex theatres are designed to provide patrons with a premium movie-goingexperience and maximize profitability by matching the number of screens with the size of the market served tooptimize revenues and minimize costs. The Partnership’s auditorium seating capacities are varied withinindividual theatres, enabling it to maximize revenues by shifting films to smaller or larger auditoriums inresponse to changing attendance levels. In addition, the Partnership is able to achieve significant efficiencies bystaggering show times and consolidating box office, concession, projection and lobby facilities, which enables thePartnership to improve operating margins.

The Partnership will continue to be affiliated with the Loews Cineplex theatre group, one of the world’slargest film exhibition companies, which will control or have an interest in 324 theatres with 3,164 screens afterClosing. Through this affiliation, the Partnership benefits from Loews Cineplex’s strong relationships with realestate developers, concession suppliers and advertisers.

The Partnership’s revenues are primarily generated from box office and concession sales, which in turn aredriven by attendance and price levels. Box office and concession revenues accounted for approximately 68% and27% respectively, of the Partnership’s pro forma combined revenues for the twelve months ended December 31,2002. The Partnership has generated strong growth in normalized revenues and normalized EBITDA, asexhibited in the charts below. Normalized revenues increased approximately 26.7% and 26.1% for the 2001 and2002 fiscal years, respectively, as compared to their respective prior fiscal years. Normalized revenues decreasedby approximately 1.7% to $310.0 million for the twelve months ended June 30, 2003 and increased byapproximately 1.9% to $321.3 million for the twelve months ended September 30, 2003 as compared to thetwelve months ended December 31, 2002. The decline in normalized revenues during the twelve months endedJune 30, 2003 was primarily the result of relatively higher attendance volumes (and therefore greater box officeand concession revenues) during the six months ended June 30, 2002, which was in turn largely driven by thestrong film releases in that period such as Spider-Man and Ice Age. The increase in normalized revenues duringthe twelve months ended September 30, 2003 was primarily the result of improved overall box officeperformance during the three months ended September 30, 2003 and the impact of new theatres opened by thePartnership during such period.

Normalized EBITDA increased approximately 73.3% and 51.0% for the 2001 and 2002 fiscal years,respectively, as compared to their respective prior fiscal years. In each period there are non-cash accountingadjustments related to GAAP lease accounting. The impact of these adjustments in the twelve-month periodended June 30, 2003 is to reduce normalized EBITDA by $1.5 million as compared to the twelve-month periodended December 31, 2002. Normalized EBITDA in the twelve-month period ended June 30, 2003 decreased to

6

2OCT200319092063

$58.8 million from $63.0 million in the twelve months ending December 31, 2002 as a result of the decline inrevenues in the related periods and the above stated GAAP adjustments.

Normalized Revenue(1) Normalized EBITDA(1)

(millions) (millions)

(1) Normalized revenue and normalized EBITDA represent the historical revenue and earnings before interest, taxes and amortization,adjusted for certain items that management believes facilitates the comparison of historical periods. See ‘‘Reconciliation of HistoricalRevenue to Normalized Revenue’’ and ‘‘Reconciliation of Historical Results to EBITDA and Normalized EBITDA’’, for a descriptionof these items. Normalized revenue and normalized EBITDA are not earnings measures recognized by GAAP and do not have astandardized meaning prescribed by GAAP. Therefore, normalized revenue and normalized EBITDA may not be comparable to similarmeasures presented by other issuers.

(2) Twelve months ended June 30, 2003.

Reported amounts in accordance with GAAP for revenues were $265.4 million for 2000, $274.5 million for2001, $324.3 million for 2002 and $317.3 million for the twelve-month period ending June 30, 2003. Reportedamounts in accordance with GAAP for net income (loss) were $(257.9) million for 2000, $(211.9) million for2001, $400.8 million for 2002 and $36.1 million for the twelve-month period ended June 30, 2003. Financialinformation for 2000, 2001, and 2002 and the twelve-month period ending June 30, 2003 is based on thehistorical financial statements of COC and GEI for the corresponding time periods as outlined on pages 39and 40 of this prospectus.

Competitive Strengths

A Leading Canadian Exhibitor in a Consolidated Market

The Partnership’s theatres accounted for approximately 29% of Canadian box office revenues in the firsteight months of 2003. The Partnership’s size and market position make it strategically important to filmdistributors, concession suppliers, advertisers and real estate owners and developers.

Modern Theatre Circuit

The Partnership’s modern theatre circuit allows it to provide patrons with a premium movie-goingexperience, tailored to address specific market needs. Sixty-four percent of the Partnership’s screens arelocated in modern multiplex theatres, which generated 72% of the Partnership’s pro forma revenues for thetwelve-month period ended December 31, 2002.

Prominent Local Market Positions

The Cineplex Odeon theatres are generally located in major markets at very visible and prominent sites inhigh traffic areas. The Galaxy theatres represent a primary entertainment destination in the majority of theirmarkets, with 17 of Galaxy’s 18 theatres located in markets with no other modern multiplex theatre.

7

Enhanced Theatre Portfolio

The restructuring of Cineplex Odeon Corporation’s theatre portfolio in 2001-2002 significantly enhancedthe Partnership’s operational flexibility and has created a meaningful competitive advantage over competitorsthat have been less aggressive in closing under-performing theatres and renegotiating leases.

Well Positioned to Grow Through New Theatre Development

The Partnership is well capitalized and strategically positioned to take advantage of opportunities to buildnew theatres in both smaller and larger markets. The Partnership’s experience and track record in identifyingnew locations and successfully developing theatres will provide ongoing growth opportunities for thePartnership.

Experienced Management Team

Led by Ellis Jacob, Stephen Brown, Dan McGrath and Gord Nelson, the Partnership has assembled amanagement team with an average of 15 years of Canadian film exhibition industry experience and ademonstrated ability to increase cash flow and improve operating performance.

Relationship with Loews Cineplex Theatre Group

The Partnership will continue to be affiliated with the Loews Cineplex theatre group. The Loews Cineplextheatre group is one of the world’s largest film exhibition companies, which will control or have an interest in324 theatres with 3,164 screens after Closing, primarily in major cities throughout the United States, Canada,Mexico, Spain, Germany and South Korea.

Strategy

The Partnership’s business strategy is to continue to enhance its position as a leading exhibitor in theCanadian market by focusing on providing customers with a premium movie-going experience. Key elements ofthe Partnership’s strategy include:

Leveraging Market Specific Operating Focus

The Partnership utilizes its distinct Cineplex Odeon and Galaxy brands and market specific operating focusto serve the widest range of markets, with a premium movie-going experience tailored to the specific needs ofeach location.

Maximizing Operating Efficiencies

The Partnership’s prominent market position enables it to effectively manage film, concession and othertheatre-level costs, thereby maximizing operating efficiencies. The Partnership will continue to make efforts toachieve operating savings from the integration of COC’s and GEI’s former management infrastructures.

Capitalizing on Ancillary Revenue Opportunities

The Partnership seeks to expand and further develop ancillary revenue opportunities, such as advertising,promotions, games and special events. These activities generate attractive margins and involve limitedincremental operating expense. Management believes that the Partnership’s size and market position will allowit to exploit new ancillary revenue opportunities more quickly and profitably than most of its competitors.

Pursuing Selected Growth Opportunities

The Partnership seeks to enhance its competitive position by improving and refurbishing theatres andseeking selected complementary development and acquisition opportunities. Management believes that thePartnership has the financial strength, experience and flexibility to pursue attractive development andacquisition opportunities that are accretive to the Fund. The Partnership currently expects to open three newtheatres each year, if opportunities are available.

8

Summary of Distributable Cash

The following analysis has been prepared by management on the basis of the information contained in thisprospectus, more recent financial results available to management and management’s estimate of the amount ofexpenses and expenditures to be incurred by the Partnership as well as the effects of certain new theatres. Thisanalysis is not a forecast or a projection of future results. The actual results of operations of the Partnership forany period, whether before or after Closing, will likely vary from the amounts set forth in the following analysis,and such variation may be material.

Management believes that, upon completion of the Offering and the transactions described under ‘‘Fundingand Related Transactions’’, the Partnership will generate EBITDA from certain theatres that have been open forless than one year or are scheduled to open prior to December 31, 2003 and incur interest expenses,administrative costs and taxes that will differ from those contained in the historical financial statements or in theunaudited pro forma combined financial statements that are included elsewhere in this prospectus. In addition,in calculating cash available for distribution, the Partnership intends to continue to make maintenance capitalexpenditures consistent with its past practice. Although management does not have firm commitments for all ofthe aforementioned items and, accordingly, the complete financial effects of all of those items are not objectivelydeterminable, management believes that the following represents a reasonable estimate of what DistributableCash would have been for the twelve months ended June 30, 2003 had the Fund been in existence during suchtime:

Twelve months endedJune 30, 2003(1)

(unaudited)(in thousands, except

per Unit figures)

Normalized EBITDA(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $58,783Management estimates that the following amounts will affect distributable cash:

Integration savings(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,450New theatres(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,143Accounting adjustments(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,869)Adjustments to reflect contractual commitments and one time charges(6) . . . . . . . . . . . 859

Management also believes the distributable cash amounts should be reduced bythe following:Maintenance capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,173Interest(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,600Additional administrative expenses(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 750Taxes(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

Estimated cash available for distribution (‘‘Distributable Cash’’) . . . . . . . . . . . . . . . . . . . $54,702Estimated distributions per Unit(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ �

Notes:

(1) Assuming that the Fund and the Partnership were in existence for the period indicated.

(2) Certain financial information has been derived from the financial information of COC and GEI contained elsewhere in this prospectus.See ‘‘Definition of EBITDA and Normalized EBITDA’’. Normalized EBITDA is not a recognized measure under GAAP and does nothave a standardized meaning prescribed by GAAP. Therefore, Normalized EBITDA may not be comparable to similar measurespresented by other issuers. See ‘‘Reconciliation of Historical Results to EBITDA and Normalized EBITDA’’.

(3) As a result of the consolidation of the COC and GEI businesses, the Partnership intends to eliminate certain duplicative andunnecessary administrative and operating expenses. The basis for this adjustment is an anticipated reduction in: (i) head office andregional management staff; and (ii) professional fees resulting from the consolidation of the two businesses under commonmanagement.

(4) Four Galaxy theatres were opened during the twelve-month period ended June 30, 2003, one Cineplex Odeon theatre in NorthEdmonton was opened in July 2003 and two Galaxy theatres which are currently under construction are scheduled to open prior toDecember 31, 2003 (collectively, the ‘‘New Theatres’’). Collectively, the five open New Theatres generated $0.7 million and $2.6 millionof cash flow for the twelve months ended June 30, 2003 and for the twelve months ended September 30, 2003, respectively. Management

9

estimates that if the five New Theatres that are currently open had been open throughout the entire twelve months ended June 30, 2003,such theatres would have generated additional cash flow of $7.1 million (after reflecting estimated loss in cash flow from two adjacenttheatres in North Edmonton). Management estimates that if the seven New Theatres had been open throughout the entire twelvemonths ended June 30, 2003, such theatres would have generated additional cash flow of $9.1 million (after reflecting estimated loss incash flow from two adjacent theatres in North Edmonton). When this estimate is combined with the actual cash flows from the five openNew Theatres of $0.7 million for the twelve months ended June 30, 2003, management estimates that the New Theatres would havegenerated aggregate annual cash flow of $9.8 million (after reflecting estimated loss in cash flow from two adjacent theatres in NorthEdmonton) for the twelve months ended June 30, 2003. See ‘‘Management’s Discussion and Analysis of Combined Financial Conditionand Results of Operations — Outlook’’. Pursuant to the Support Arrangements, certain Investors will receive � million LP Units(the ‘‘Support Units’’) in connection with the transactions described under ‘‘Funding and Related Transactions’’. The aggregate value ofthe Support Units (at an issue price of $10.00 per unit) is equal to: (i) 100% of the purchase price attributable to the two Galaxytheatres currently under construction; plus (ii) 50% of the purchase price attributable to the one Cineplex theatre and four Galaxytheatres that opened between December 2002 and July 2003. The purpose of the Support Arrangements is to provide: (i) in effect, foran adjustment to the purchase price of the New Theatres in the event of a shortfall of up to $5.9 million in the actual annual cash flowsgenerated by the New Theatres as compared to the estimated annual cash flows of $9.8 million (after reflecting estimated loss in cashflow from two adjacent theatres in Edmonton); and (ii) protection for distributions to Unitholders of up to $5.9 million annually in theevent of such a shortfall until at least December 31, 2004 and not later than December 31, 2006. See ‘‘Support Arrangements’’.

(5) Adjustments to reflect the impact of: (i) certain non-cash theatre occupancy accounting adjustments related to the amortization ofdeferred tenant inducements and the difference between the straight-line rent expense and the cash rent payments actually made;(ii) capital taxes paid by COC that will no longer be applicable; and (iii) an adjustment to reflect deferred revenue relating to the sale ofgift certificates.

(6) Adjustments to reflect (i) changes to certain contractual arrangements, specifically related to beverage supply agreements and taxespayable on film costs; and (ii) certain one-time expenses pertaining to periods prior to July 1, 2002.

(7) Represents estimated interest expense on the New Credit Facilities described under ‘‘Debt Financing’’, based on assumed drawings of$110 million at an interest rate of 6.0%, based on three-year floating-to-fixed interest swap rates on the term credit facility.

(8) The Partnership estimates that, subsequent to the Offering, it will incur additional general and administrative costs on a continuing basisin connection with reporting to Unitholders, investor relations and other related expenses.

(9) Represents estimated large corporation taxes of $141,000 per year and no income taxes assuming the Fund was in existence for thetwelve months ended June 30, 2003.

(10) Calculated on a fully-diluted basis.

10

Selected Financial Information

The following selected financial information of Cineplex Odeon Corporation and GalaxyEntertainment Inc. has been derived from and should be read in conjunction with the historical financialstatements of Cineplex Odeon Corporation and Galaxy Entertainment Inc. contained elsewhere in thisprospectus.

12-month Six-month Six-monthperiod ended period ended period ended

2000(1) 2001(1) 2002(1) June 30, 2003(2) June 30, 2002 June 30, 2003

(unaudited) (unaudited) (unaudited) (unaudited)(in thousands, except theatre, screen and margin data)

RevenuesCOC . . . . . . . . . . . . . . $254,018(3) $246,338(3) $ — $ — $ — $ —GEI . . . . . . . . . . . . . . . 11,353(3) 28,203(3) — — — —COC and GEI . . . . . . . 265,371 274,541 324,301 317,298 159,202 152,199

EBITDA(4)

COC . . . . . . . . . . . . . . $(228,738) $(190,245) $ — $ — $ — $ —GEI . . . . . . . . . . . . . . . (537) 2,688 — — — —COC and GEI . . . . . . . (229,275) (187,557) 421,200 56,429 392,150 27,379

Income (loss) fromcontinuing operations(5)

COC . . . . . . . . . . . . . . $(254,662) $(209,024) $ — $ — $ — $ —GEI . . . . . . . . . . . . . . . (2,046) (2,187) — — — —COC and GEI . . . . . . . (256,708) (211,211) 401,204 37,135 381,791 17,722

Net IncomeCOC . . . . . . . . . . . . . . $(255,419)(3) $(209,593)(3) $ — $ — $ — $ —GEI . . . . . . . . . . . . . . . (2,488)(3) (2,324)(3) — — — —COC and GEI . . . . . . . (257,907) (211,917) 400,775 36,115 381,537 16,877

TheatresCOC . . . . . . . . . . . . . . 87 76 71 70 71 70GEI . . . . . . . . . . . . . . . 8 12 15 18 14 18

ScreensCOC . . . . . . . . . . . . . . 697 642 614 607 614 607GEI . . . . . . . . . . . . . . . 72 104 125 148 118 148

COC and GEI NormalizedRevenue(6) . . . . . . . . . . $197,490 $250,153 $315,376 $309,970 $154,292 $148,886EBITDA(6) . . . . . . . . . . 24,064 41,699 62,974 58,783 32,517 28,326EBITDA Margin . . . . . 12% 17% 20% 19% 21% 19%Theatres(7) . . . . . . . . . . 68 75 77 80 76 80Screens(7) . . . . . . . . . . . 613 678 694 717 687 717

Notes:

(1) Financial information is based on the financial information of each of COC and GEI contained elsewhere in this prospectus. Financialinformation in respect of 2000 is based upon the financial statements of GEI for the year ended December 31, 2000 and the financialstatements of COC for the year ended February 28, 2001; financial information in respect of 2001 is based upon the financial statementsof GEI for the year ended December 31, 2001 and the financial statements of COC for the year ended February 28, 2002; financialinformation in respect of 2002 is based upon the audited combined financial statements of GEI and COC for the period endedDecember 31, 2002 (which statements include twelve months of financial information in respect of GEI and nine months of financialinformation in respect of COC) and includes financial information of COC for the period from January 1, 2002 to March 31, 2002 whichis unaudited.

(2) The amounts for the twelve months ended June 30, 2003 are unaudited and have been derived from the financial results for the yearended December 31, 2002 and the six-month period ended June 30, 2003 and 2002 and COC’s three-month period ended March 31,

11

2002 included in this table and elsewhere in this prospectus. The results of operations for this period are not necessarily indicative of theresults of operations to be expected in any given fiscal year.

(3) The amounts are derived from the audited historical financial statements of COC and GEI included elsewhere in this prospectus.

(4) See ‘‘Definition of EBITDA and Normalized EBITDA’’. EBITDA is not a recognized measure under GAAP and does not have astandardized meaning prescribed by GAAP. Therefore, EBITDA may not be comparable to similar measures presented by other issuers.See ‘‘Reconciliation of Historical Results to EBITDA and Normalized EBITDA’’.

(5) Income (loss) from continuing operations is calculated as Net Income excluding tax.

(6) Normalized Revenue and Normalized EBITDA represent the historical revenue and earnings before interest, taxes and amortization,adjusted for certain items that management believes facilitates the comparison of historical periods. See ‘‘Reconciliation of HistoricalRevenue to Normalized Revenue’’ and ‘‘Reconciliation of Historical Results to EBITDA and Normalized EBITDA’’, for a descriptionof these items. Normalized Revenue and Normalized EBITDA are not earnings measures recognized by GAAP and do not have astandardized meaning prescribed by GAAP. Therefore, Normalized Revenue and Normalized EBITDA may not be comparable tosimilar measures presented by other issuers.

(7) Numbers of theatres and screens have been adjusted to reflect theatres that were closed as a result of COC’s reorganization andproperties that will not be transferred to the Partnership on Closing.

12

The Offering

Offering: � Units.

Amount: $ �

Price: $10.00 per Unit.

Units: Each Unit represents an equal undivided beneficial interest in the Fund and anydistributions from the Fund. Each Unit is transferable and entitles the holderthereof to (i) an equal participation in distributions of the Fund; (ii) rights ofredemption; and (iii) one vote at all meetings of Unitholders. See ‘‘Description ofthe Fund’’.

Use of Proceeds: The Fund will use the proceeds from the Offering to subscribe for units (the‘‘Trust Units’’) and Series 1 notes (the ‘‘Series 1 Trust Notes’’) of the Trust. TheTrust will, in turn, (i) subscribe for Class A LP Units representing, aftercompletion of the Offering, approximately � % of the outstanding LP Units(ii) subscribe for shares in the capital of Cineplex Galaxy GP (representing, aftercompletion of the Offering, approximately � % of the outstanding shares ofCineplex Galaxy GP) and (iii) advance funds under the Galaxy Notes to CineplexGalaxy Acquisition (which will subsequently amalgamate with GEI). CineplexGalaxy LP will use the proceeds of the Offering, together with the proceeds fromthe New Credit Facilities, to, among other things, repay notes issued by CineplexGalaxy LP to certain of the Investors as consideration for Cineplex Galaxy LP’sacquisition of substantially all of the theatre business assets of COC, to subscribefor shares of Cineplex Galaxy Acquisition and to pay the expenses of thisOffering. Cineplex Galaxy Acquisition will use funds received by it from theissuance of the Galaxy Notes to acquire all the shares of GEI from certain of theInvestors and, following the amalgamation of GEI and Cineplex GalaxyAcquisition, to repay existing debt of GEI to third parties. See ‘‘Debt Financing’’,‘‘Funding and Related Transactions’’ and ‘‘Use of Proceeds’’.

Over-Allotment Option: The Fund has granted to the Underwriters, for a period of 30 days following theClosing, the Over-Allotment Option to purchase up to � additional Units atthe price of $10.00 per Unit payable in cash against delivery of such additionalUnits. If the Over-Allotment Option is exercised, the Underwriters will receive afee of $ � per additional Unit purchased pursuant to such option. If theOver-Allotment Option is exercised, the additional proceeds received will be usedby the Fund to subscribe for additional Trust Units and Series 1 Trust Notes ofthe Trust. The Trust will, in turn, subscribe for additional Class A LP Units.Cineplex Galaxy LP will use the proceeds from the Over-Allotment Option toacquire Class B LP Units from certain Investors and to repay the Over-AllotmentNotes issued to certain Investors as consideration for Cineplex Galaxy LP’sacquisition of substantially all of the theatre assets of COC. If theOver-Allotment Option is not exercised in full, additional Class B LP Units andshares of Cineplex Galaxy GP will be issued to such Investors in repayment of theOver-Allotment Notes. If the Over-Allotment Option is exercised in full, theFund will hold an indirect approximate � % interest in Cineplex Galaxy LPand an indirect approximate � % interest in Cineplex Galaxy GP. See ‘‘Planof Distribution’’.

Investors’ Interest: Assuming no exercise of the Over-Allotment Option, the Investors will holdClass B LP Units representing � % of the issued and outstanding LP Unitsand � % of the outstanding shares of Cineplex Galaxy GP. Pursuant to theExchange Agreement, and subject to the restrictions described under ‘‘Support

13

Arrangements’’, the Investors will be entitled to effectively exchange theirholdings of Class B LP Units for Units. In addition, subject to certain restrictions,the Investors will be granted ‘‘piggy-back’’ registration rights and certainInvestors will be granted demand registration rights. See ‘‘Principal Unitholders’’,‘‘Funding and Related Transactions — Investors’ Interest’’, ‘‘— ExchangeAgreement’’, ‘‘— Securityholders Agreement’’ and ‘‘Support Arrangements’’.The Investors have agreed to enter into a 180-day lock-up arrangement with theUnderwriters. See ‘‘Plan of Distribution’’.

Distribution Policy of the The Fund intends to make distributions of its available cash to the maximumFund: extent possible to the Unitholders. The Fund intends to make equal monthly cash

distributions to Unitholders of record on the last business day of each month, lessestimated cash amounts required for expenses and other obligations of the Fundand cash redemptions of Units and any tax liability. The initial cash distributionfor the period from the Closing to � , 2003 is expected to be paid on or before

� , 2003 and is estimated to be $ � per Unit (assuming that the Closingoccurs on � , 2003). See ‘‘Description of the Fund — Cash Distributions’’ and‘‘Certain Canadian Federal Income Tax Considerations’’.

Distribution Policy of the The Trust intends to make monthly cash distributions to the Fund of its monthlyTrust: cash receipts, after satisfaction of its interest obligations, if any, and less any

estimated cash amounts required for expenses and other obligations of the Trustand reserves for any principal repayments in respect of the Trust Notes. See‘‘Description of the Trust — Cash Distributions’’.

Distribution Policy of Cineplex Galaxy LP intends to make monthly cash distributions of itsCineplex Galaxy LP: distributable cash for that month, which will consist generally of its EBITDA less

any estimated cash amounts required for debt service obligations, other expenseobligations, maintenance capital expenditures, taxes, reserves (including amountson account of capital expenditures and to stabilize distributions to Unitholders)and such other amounts as may be considered appropriate by CineplexGalaxy LP. Capital and other expenditures may also be financed with drawingsunder one or more credit facilities to be established on behalf of the Partnership,other borrowings or additional issuances of Units. See ‘‘Description of CineplexGalaxy LP — Distributions’’ and ‘‘Debt Financing’’.

Distribution Policy GEI intends to make monthly cash distributions of its distributable cash for thatof GEI: month, which will consist generally of its EBITDA less any estimated cash

amounts required for debt service obligations (including payments in respect ofthe Galaxy Debt), other expense obligations, maintenance capital expenditures,taxes, reserves (including amounts on account of capital expenditures) and suchother amounts as may be considered appropriate by GEI. Capital and otherexpenditures may also be financed with drawings under one or more creditfacilities to be established on behalf of the Partnership, other borrowings oradditional issuances of Units. See ‘‘Debt Financing’’.

Support Arrangements: The Cineplex Galaxy LP Agreement and the Exchange Agreement will providefor certain support arrangements (the ‘‘Support Arrangements’’). The purpose ofthe Support Arrangements is to provide: (i) in effect, for an adjustment to thepurchase price of the seven new theatres (the ‘‘New Theatres’’) which have eithernot yet been opened or have been open for less than one year in the event of ashortfall of up to $5.9 million in the actual annual cash flows generated by theNew Theatres as compared to the estimated annual cash flows of $9.8 million(after reflecting estimated loss in cash flow from two adjacent theatres inEdmonton); and (ii) protection for distributions to Unitholders of up to

14

$5.9 million annually in the event of such a shortfall. See ‘‘SupportArrangements’’.

Risk Factors: An investment in the Units is subject to a number of risks that should beconsidered by a prospective purchaser. Cash distributions by the Fund are notguaranteed and will be based indirectly upon the business operated by thePartnership, which is susceptible to a number of risks. These risks, and other risksassociated with an investment in the Units, include those related to: reliance onfilm production and performance; increased capital expenses resulting from thedevelopment of digital technologies for film exhibition; reliance on keypersonnel; the acquisition and development of new theatre sites; alternative filmdelivery methods and other forms of entertainment; unauthorized copying offilms; rising insurance and labour costs; ability to generate additional ancillaryrevenue; the competitive environment of the film exhibition industry;dependance on relationships with major film distributors; dependance onrelationships with primary concession suppliers; dependence on the Partnership;the fact that cash distributions are not guaranteed and will fluctuate with businessperformance; the legal attributes of the Units; the absence of a prior publicmarket; the distribution of securities on redemption or termination of the Fund;Unitholder liability; dilution of existing Unitholders and holders of LP Units;control of the Partnership by the LCE Shareholders; leverage and restrictivecovenants in agreements relating to current and future indebtedness of thePartnership; future sales of Units by the Investors; investment eligibility andforeign property; income tax matters; restrictions on potential growth;restrictions on non-resident Unitholders; and liquidity of Units. See ‘‘RiskFactors’’.

15

28SEP200306482801

Structure Following Closing

The following chart illustrates, on a simplified basis, the structure of the Fund (including jurisdiction ofestablishment/incorporation of the various entities) following completion of this Offering and the indirectinvestment by the Fund in Cineplex Galaxy LP and related transactions (as described in more detail in ‘‘Fundingand Related Transactions’’). See ‘‘The Fund, the Trust and Cineplex Galaxy LP’’, ‘‘Description of the Fund’’,‘‘Description of the Trust’’, ‘‘Description of Cineplex Galaxy LP’’ and ‘‘Description of Cineplex Galaxy GP’’.

Cineplex Galaxy LimitedPartnership(Manitoba)

Galaxy Entertainment Inc.(Ontario)

Assets of Cineplex(2)

Odeon Corporation

Cineplex GalaxyGeneral Partner

Corporation(Canada)

Cineplex GalaxyTrust

(Ontario)

Cineplex Galaxy

Income Fund(Ontario)

Unitholders

Investors(1)

100%

• %

• %

• %

• %

generalpartner

100%Trust NotesTrust Units

100%

GalaxyNotes

(1) Only Investors who are members of the LCE Group will hold shares of Cineplex Galaxy GP.

(2) Excludes certain assets and associated liabilities of COC which are not integral to its film exhibition operations as well as six CineplexOdeon theatres in Canada which do not meet the strategic or financial criteria for acquisition by Cineplex Galaxy LP.

16

THE FUND, THE TRUST AND CINEPLEX GALAXY LP

The Fund is an unincorporated, open-ended, limited purpose trust established under the laws of theProvince of Ontario on October 2, 2003 by a declaration of trust (the ‘‘Fund Declaration of Trust’’). Theprincipal and head office of the Fund is located at 1303 Yonge Street, Toronto, Ontario M4T 2Y9. The Fund hasbeen established to acquire and hold the Trust Units and the Trust Notes. See ‘‘Description of the Fund.’’

The Trust is an unincorporated, open-ended, limited purpose trust established under the laws of theProvince of Ontario by a declaration of trust (the ‘‘Trust Declaration of Trust’’). The principal and head office ofthe Trust is located at 1303 Yonge Street, Toronto, Ontario M4T 2Y9. The Trust has been created to (i) acquireand hold Class A LP Units, which, on Closing, will represent � % of the outstanding LP Units, (ii) acquireand hold shares of Cineplex Galaxy GP, which, following completion of the Offering, will represent � % ofthe outstanding shares of Cineplex Galaxy GP, and (iii) advance funds under the Galaxy Notes to CineplexGalaxy Acquisition (which will subsequently amalgamate with GEI). See ‘‘Description of the Trust’’.

Cineplex Galaxy LP is a limited partnership formed under the laws of the Province of Manitoba. CineplexGalaxy LP has been created to acquire and hold substantially all of the theatre business assets currently ownedby COC and all the shares of GEI as described under ‘‘Funding and Related Transactions’’. See ‘‘Description ofCineplex Galaxy LP’’.

For a description of the structure of the Fund before and after completion of the Offering and relatedtransactions, see ‘‘Funding and Related Transactions’’.

FILM EXHIBITION INDUSTRY

Overview

The motion picture industry consists of three principal activities: production, distribution and exhibition.Production involves the development, financing and production of feature-length motion pictures. Distributioninvolves the promotion and exploitation of motion pictures in a variety of different channels. Theatricalexhibition is the primary initial distribution channel for new motion picture releases. The theatrical success of amovie is typically the most important factor in determining its popularity and value in later forms of exhibition,such as home video, DVD and pay-per-view, network and syndicated television.

Demand for theatrical films in Canada has shown stable growth over the past ten years, with box officerevenue growing at a compound annual growth rate of 9.7%, achieving a record level of approximately$946 million in 2002, according to Screen Digest. This record of long-term growth in the Canadian filmexhibition industry is primarily a function of the following factors:

• Record attendance: Approximately 128 million patrons attended movies in 2002, compared to 74 million in1992, representing a compound annual growth rate of 5.6%.

• Stronger box office economics: Average ticket prices increased from $5.10 in 1992 to $7.39 in 2002,representing a compound annual growth rate of 3.8%.

• Increased frequency of attendance by movie-goers: Film attendance frequency increased from 2.8 movies percapita per year in 1992 to 4.2 movies in 2002.

17

28SEP200316495767

The following chart demonstrates the sustained growth of Canadian box office revenues since 1965:

Canadian Box Office Revenues (1965-2002)

$0

$250

$500

$750

$1,000

1965 1970 1975 1980 1985 1990 1995 2000

in M

illi

ons

CAGR since 1965 = 6.7%

CAGR since 1997 = 13.5%

Source: Screen Digest, 2003.

The exceptional growth in attendance levels and box office revenues since 1997 is attributable to threemajor factors: the positive market response to the modernization of theatre circuits, increased studio marketingexpenditures and the greater number of ‘‘blockbuster’’ film releases. The industry modernization was driven bymajor exhibitors upgrading their theatre circuits to the modern multiplex format, which was introduced inCanada in 1997. Modern multiplexes improved the movie-going experience through amenities such as stadiumseating, large screens, digital sound and expanded concession offerings. Film studios’ markedly increased theirspending on production and marketing to benefit from this response to modern multiplexes which also drivesadditional revenue streams from downstream markets.

As a result of the transition to modern multiplexes, the Canadian film exhibition industry experiencedsignificant new theatre construction and re-screening of older theatres from 1997 through 2000. Over 1,270 newscreens opened in Canada during this period, with the industry reaching a peak of approximately 2,940 screensat the end of 2000. This expansion resulted in intensified competition for patronage and rendered many oldertheatres obsolete. The new screens, combined with the difficulty of closing older theatres as a result of theirlong-term, non-cancelable leases, created an oversupply of screens in many markets. However, since 2000,approximately 320 screens in Canada have been closed through restructuring and portfolio rationalizations.These closures have supported an increase in profitability and annual attendance per screen from 40,743 in 2000to 46,487 in 2002.

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The following table presents information regarding the Canadian film exhibition industry since 1997:

AnnualAverage Attendance

Box Office Ticket FrequencyYear Revenues Attendance Price Total Screens Per Capita

(millions) (millions) (at year end)

1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 502.7 99.9 $5.03 2,301 3.5x1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 592.2 112.8 $5.25 2,574 3.9x1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 658.7 117.8 $5.59 2,923 4.0x2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 698.5 119.8 $5.83 2,940 4.0x2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 813.0 123.3 $6.60 2,864 4.1x2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 945.5 128.0 $7.39 2,753 4.2xCompound annual growth rate (1997-2002) . . . . . . . 13.5% 5.1% 8.0% 3.7%

Source: Screen Digest, 2003.

Management believes the theatre overbuilding that resulted in unfavourable market conditions in 2000 and2001 is unlikely to recur for the following reasons:

• A majority of the desirable locations in Canada are now served by modern multiplex theatres of anappropriate size relative to their markets, making new theatre construction generally uneconomic inthese markets.

• The industry experience of 2000 and 2001 has limited the access to capital for expansion in competitivemarkets.

• Theatre owners have increased their focus on increasing return on invested capital rather than marketshare, revenue growth or screen additions, which was prompted in part by ownership changes.

Management believes that the type of modern multiplex format developed in recent years will continue tosatisfy consumer demands, and that another revolutionary change of theatre formats is unlikely to occur in theforeseeable future.

The Canadian film exhibition industry is characterized by higher levels of growth relative to the industry inthe U.S. Attendance in Canada grew at a compound annual growth rate of 5.1% from 1997 to 2002 compared toonly 3.3% for the U.S. Management believes that the Canadian market has further potential for growth, asindicated by its lower annual attendance frequency per capita of 4.2x in 2002 compared to 6.1x in the U.S.

The Partnership and Famous Players had a combined market share of approximately 75% of the totalCanadian box office revenues for the first eight months of 2003. The third largest industry participant,AMC Entertainment Inc., had approximately a 6% market share during the same period, and three othercompanies held regional market positions with national shares between 2% and 5%. By contrast, theU.S. market is much more fragmented, with the five largest theatre circuits accounting for 62% of total U.S. box

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office revenues in 2002. The following chart indicates the approximate market shares of various participants inthe Canadian film exhibition industry:

Market Share of Canadian Box Office RevenuesEight Months Ending August 31, 2003

Other7.9%Guzzo

3.5%Landmark

2.9%

Empire4.6%

AMC6.3%

Famous Players45.6%

The Partnership29.2%

Source: A.C. Nielsen EDI data.

Current Industry Trends

Management believes that the following market trends will drive the continued growth and profitability ofthe film exhibition industry in Canada:

Importance of Theatrical Success in Establishing Movie Brands and Subsequent Markets

Theatrical exhibition is the initial and most important distribution channel for new motion picture releases.A successful theatrical release which ‘‘brands’’ a film is often the determining factor in its popularity and value in‘‘downstream’’ distribution channels, such as home video, DVD and pay-per-view, network and syndicatedtelevision. Management believes that the critical importance of theatrical exhibition in the overall distribution offilms will ensure a steady supply of films supported by strong marketing.

Increased Investment in Production and Marketing of Films by Studios

Additional revenues generated by films in domestic, international and downstream markets have driven themajor studios to increase spending on producing and marketing new theatrical releases at a compound annualgrowth rate of 7.2% over the past ten years, from US$6.5 billion in 1992 to over US$13 billion in 2002. Increasedmarketing by major studios is focused on attracting larger audiences to theatres. This is reflected by theincreased number of ‘‘blockbuster’’ films that generated gross box office revenues in the U.S. and Canada inexcess of $100 million which increased from 11 in 1992 to 24 in 2002. The increased number of blockbuster filmshas generated more revenue for the major studios which management believes has generally been reinvested inproducing and marketing larger budgeted films.

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The following chart demonstrates the increase in average spending per film in the U.S., particularlysince 1997:

U.S. Film Production and Marketing Investment — Average Spending per Film

Source: Motion Picture Association of America, 2003.

Increased Supply of Successful Films

Studios are increasingly producing films in series, such as Harry Potter, Lord of the Rings, Star Wars and TheMatrix. When the first film in a series is successful, subsequent films in that series benefit from existing publicawareness and anticipation. The result is that such features typically attract large audiences and generate strongbox office revenues. Management believes that as studios increasingly produce franchise films, exhibitors willbenefit from these films’ greater and more reliable revenues.

The success of a broader range of film genres also benefits film exhibitors. The studios’ success in producingand marketing of a wide variety of diverse yet commercially appealing movies such as Chicago, Seabiscuit, My BigFat Greek Wedding, Crouching Tiger, Hidden Dragon and A Beautiful Mind has expanded the demographic base ofregular movie-goers and also contributed to greater per capita attendance. The flexibility provided by differentsized auditoriums at modern multiplexes allows a wider variety of films to be available in a broader range ofmarkets. Management believes that this trend has contributed to the increased stability of theatre cash flows inrecent years.

Favourable Demographic Attendance Trends

The demographic segment of the movie-going population in the U.S. with the highest attendance, as well asconcessions and games spending, is between 12 to 17 years of age. In 1997, 42% of this segment of the total U.S.population attended movies at least once per month; by 2002 this figure had increased to 46%. Managementbelieves that similar movie-going and spending trends exist in Canada. According to Statistics Canada, theCanadian population between 10 to 19 years of age is expected to continue to increase over the next few years.

Another segment of the population in the U.S. that is attending more movies is the ‘‘baby boom’’generation, currently between the ages of 39 and 57. In Canada, this segment has increased from 22% of thepopulation in 1990 to over 28% in 2002 and, according to Statistics Canada, is expected to continue to increaseover the next few years. Management believes that this segment of the population has an increasing amount ofleisure time to attend films and, accordingly, they have become a significant target audience for film production.

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Management believes that these demographic trends will result in higher attendance levels and continuedgrowth in the film exhibition business.

Convenient and Affordable Form of Out-of-Home Entertainment

Management believes that patrons are attending movies more frequently due to the appeal of movie-goingas a convenient and affordable form of out-of-home entertainment. With an average movie ticket price inCanada of only $7.39 in 2002, the movie-going experience continues to provide value and compares favourablyto alternative forms of out-of-home entertainment in Canada such as professional sporting events or live theatre,as demonstrated below. Also, management believes that the modern multiplex theatre format represents ahighly attractive entertainment destination, with an array of amenities, broad choice of movies and diversity ofconcession offerings.

Relative Price Range of Selected Out-of-Home Entertainment in Canada

$0.00

$50.00

$100.00

$150.00

$200.00

NHL NBA Major LeagueBaseball

Live Theatre Partnership’sMovie Tickets

Tic

ket P

rice

$3.50

$13.50

$182.00

$152.00 $151.15

$116.00

$13.48 $20.00

$6.00

$26.00

Source: NHL, NBA, MLB and Mirvish Productions (Toronto only).

Reduced Seasonality of Revenues

Historically, film exhibition industry revenues have been seasonal, with the most marketable motionpictures generally being released during the summer and the late-November through December holiday season.More recently, the seasonality of film exhibition attendance has become less pronounced as film studios haveexpanded the historical summer and holiday release windows and increased the number of heavily marketedfilms released during traditionally weaker periods. For example, successful films such as Hannibal, Spy Kids andIce Age were released in February and March, months with historically fewer major releases. This trend hasbenefited exhibitors by allowing them to more effectively leverage their fixed cost base throughout the year whileproviding greater stability of revenues and profitability. Management believes that this trend has reduced thetraditional seasonality of cash flows in the film exhibition industry and has increased aggregate box officerevenues as improved attendance in non-peak periods has not impacted attendance in traditional peak periods.

Diversification of Revenue Streams

While box office revenues continue to account for the largest portion of exhibitors’ revenues, concessionofferings, advertising, games, promotions and other ancillary revenue streams have increased as a share of totalrevenues. The margins on these other revenue streams, particularly advertising, are much higher than onadmission sales and have enhanced the profitability of the industry in general.

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BUSINESS OF THE PARTNERSHIP

Overview

The Partnership is one of the two leading film exhibition companies in Canada. The Partnership owns,operates or has an interest in 81 theatres with 731 screens in six provinces. The Partnership’s box office revenuesfor the first eight months of 2003 represented approximately 29% of total Canadian box office revenues.

Cineplex Galaxy LP will be formed on Closing by the combination of the Cineplex Odeon and Galaxy filmexhibition businesses. This combination brings together two businesses with complementary target markets andstrategies. The Partnership operates theatres under the Cineplex Odeon brand, which has enjoyed an establishedurban market presence in Canada for over 20 years, and the newer Galaxy brand, which is rapidly developing areputation as a primary entertainment destination in mid-sized communities.

The Partnership’s 63 Cineplex Odeon theatres hold a leading market share in some of the most importantmarkets in Canada with more than 74% of the Cineplex Odeon screens being located in the top ten censusmetropolitan areas. The Cineplex Odeon theatres had approximately a 24% share of the total film exhibitionmarket in Canada, measured by box office revenues for the first eight months of 2003. Approximately 70% ofCineplex Odeon’s box office revenues were generated from modern multiplex theatres in the first eight monthsof 2003.

The Partnership’s 18 Galaxy theatres are all located in mid-sized markets (with regional populations of50,000 to 200,000 people). Since its inception in 1999, the Galaxy theatre circuit has grown to become the fourthlargest theatre circuit in Canada with an approximate 5% share of the total film exhibition market, measured bybox office revenues for the first eight months of 2003. Over 86% of Galaxy’s box office revenues were generatedfrom modern multiplex theatres in the first eight months of 2003. In all but one of Galaxy’s markets, thePartnership is the only operator of a modern multiplex theatre. Management believes that additionaldevelopment opportunities for new Galaxy theatres exist in underserved mid-sized markets in Canada.

The Partnership will continue to be affiliated with the Loews Cineplex theatre group, one of the world’slargest film exhibition companies, which will control or have an interest in 324 theatres with 3,164 screens afterClosing. Through this affiliation, the Partnership benefits from Loews Cineplex’s strong relationships with realestate developers, concession suppliers and advertisers. In addition, the Partnership maintains long-standingrelationships with all of the major film distributors, which generally provide the Partnership access to all of thefilms available in the marketplace.

The Partnership’s revenues are primarily generated from box office and concession sales, which in turn aredriven by attendance and price levels. Box office and concession revenues accounted for approximately 68% and27%, respectively, of the Partnership’s pro forma combined revenues for the twelve months ended December 31,2002. The Partnership has generated strong growth in normalized revenues and normalized EBITDA, asexhibited in the charts below. Normalized revenues increased approximately 26.7% and 26.1% for the 2001 and2002 fiscal years, respectively, as compared to their respective fiscal years. Normalized revenues decreased byapproximately 1.7% to $310.0 million for the twelve months ended June 30, 2003 and increased byapproximately 1.9% to $321.3 million for the twelve months ended September 30, 2003 as compared to thetwelve months ended December 31, 2002. The decline in normalized revenues during the twelve months endedJune 30, 2003 was primarily the result of relatively higher attendance volumes (and therefore greater box officeand concession revenues) during the six months ended June 30, 2002, which was in turn largely driven by thestrong film releases in that period such as Spider-Man and Ice Age. The increase in normalized revenues duringthe twelve months ended September 30, 2003 was primarily the result of improved overall box officeperformance during the three months ended September 30, 2003 and the impact of new theatres opened by thePartnership during such period.

Normalized EBITDA increased approximately 73.3% and 51.0% for the 2001 and 2002 fiscal years,respectively, as compared to their respective prior fiscal years. In each period there are non-cash accountingadjustments related to GAAP lease accounting. The impact of these adjustments in the twelve-month periodended June 30, 2003 is to reduce normalized EBITDA by $1.5 million as compared to the twelve-month periodended December 31, 2002. Normalized EBITDA in the twelve-month period ended June 30, 2003 decreased to

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$58.8 million from $63.0 million in the twelve months ending December 31, 2002 as a result of the decline inrevenues in the related periods and the above stated GAAP adjustments.

Normalized Revenue(1) Normalized EBITDA(1)

(millions) (millions)

(1) Normalized revenue and normalized EBITDA represent the historical revenue and earnings before interest, taxes and amortization,adjusted for certain items that management believes facilitates the comparison of historical periods. See ‘‘Reconciliation of HistoricalRevenue to Normalized Revenue’’ and ‘‘Reconciliation of Historical Results to EBITDA and Normalized EBITDA’’, for a descriptionof these items. Normalized revenue and normalized EBITDA are not earnings measures recognized by GAAP and do not have astandardized meaning prescribed by GAAP. Therefore, normalized revenue and normalized EBITDA may not be comparable to similarmeasures presented by other issuers.

(2) Twelve months ended June 30, 2003.

Reported amounts in accordance with GAAP for revenues were $265.4 million for 2000, $274.5 million for2001, $324.3 million for 2002 and $317.3 million for the twelve-month period ending June 30, 2003. Reportedamounts in accordance with GAAP for net income (loss) were $(257.9) million for 2000, $(211.9) million for2001, $400.8 million for 2002 and $36.1 million for the twelve month period ended June 30, 2003. Financialinformation for 2000, 2001, and 2002 and the twelve-month period ending June 30, 2003 is based on thehistorical financial statements of COC and GEI for the corresponding time periods as outlined on pages 39and 40 of this prospectus.

Competitive Strengths

The following factors provide the Partnership with competitive advantages within the Canadian filmexhibition industry.

A Leading Canadian Exhibitor in a Consolidated Market

The Partnership’s theatres accounted for approximately 29% of Canadian box office revenues in the firsteight months of 2003. Based on box office revenues for this period, the Partnership and Famous Playersaccounted for approximately 75% of the film exhibition business in Canada. The remaining market competitorshave significantly smaller market positions and are primarily regional or local operators. The Partnership’s sizeand market position make it strategically important to film distributors, concession suppliers, advertisers andreal estate owners and developers.

Modern Theatre Circuit

The Partnership’s modern theatre circuit allows it to provide patrons with a premium movie-goingexperience, tailored to address specific market needs. Over the past seven years, the Partnership has investedapproximately $253 million in developing and upgrading its theatre circuit. As a result, 64% of the Partnership’sscreens are located in modern multiplex theatres, which generated 72% of the Partnership’s pro forma revenuesfor the twelve-month period ended December 31, 2002. The Partnership focuses on appropriately sizing itstheatres for each market and has an average of 9.0 screens per location, compared to the industry average of6.9 per location. Modern multiplexes also generally provide expanded concession offerings and ancillary revenueopportunities, which enhance profit potential. Management believes that the significant amounts spent by the

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