Main Topics

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Main Topics

• Financials
• Business strategy
• Valuation of units
• Koch
• Q A Session

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Demonstrated Record of Growth

• E1 has a strong track record of financial
  performance and growth
• 2005 revenue and EBITDA of 519.8M and 26.0M,
  respectively
• Includes the acquisition of Video One from August
  1, 2004 Koch Entertainment from June 1, 2005

Historical Revenues 1 (C millions)
Historical EBITDA 1 (C millions)
Revenue Growth
EBITDA Margin
1 2000 to 2003 Year ended March 31.
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Summary 2005 Results
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Summary Q1 2006 Results
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Distributions

• Reasons for reduction to .90
• Poor results in 2005
• Increase working capital

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Bank Debt

• Operating Loan - 27.75 mm
• Covers seasonal working capital needs
• Direct borrowings were fully repaid at Dec 31
• Term Loan - 52.9 mm
• Financed Video One Koch acquisitions
• Minimum 4 mm repayment per year
• These loans are currently being restructured

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Building the Business

• Enhance exclusivity build sales and margins
• Expand exclusive music and video content
• Expand exclusive distribution arrangements
• Capitalize on growing video-game market
• Initiatives on Vendor Managed Inventory

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of Exclusive Sales
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Expand Exclusive Distribution Agreements

• Koch Entertainment
• Universal Home Video
• Sheridan Square Entertainment
• National Film Board Library

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Expand LicensedMusic Video Content

• Koch US adds 30 new music labels since
  acquisition
• Koch Canada continuing to look for opportunities
  in Canada
• Paradox, a division of Entertainment One, also
  continues licensing exclusive video content in
  North America

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Capitalize on Growing Video-Game Market

• Game sales are increasing
• Boost to bottom line despite lower margins
• Leverage existing customer base

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Vendor Managed Inventory

• Moving beyond normal buy-sell arrangements
• New arrangements with national drug grocery
  store chains
• Monitor consumer buying through point-of-sale
  terminals
• Expansion of reach in retail

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Valuation Canadian Operations
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1 in Canada

• We are Canadas 1 Home Entertainment Products
  Wholesaler
• We set the standard for Wholesaling in Canada

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Canadas 1 DVD Wholesaler

• Annual volume approximately 350 million
• Exclusive distributor for Universal Home Video
• 30,000 titles
• 3,000 customers

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Canadas 1 CD Wholesaler

• Largest on-hand CD inventory
• Largest CD Catalogue at 12,000 items
• 25 year relationships with the industrys
  largest music producers

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1 Internet Fulfillment Wholesaler

• Serving consumers through our partnerships with
  the Worlds largest On-Line retailers

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Canadas 1 Specialty Retailer

• 90 CD Plus retail stores
• Specialize in CDs, DVDs, and Video Games

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Management

• Darren ThroopPresident CEO
• Michael KochCEO Koch US
• Chris JamiesonCFO
• Terry StevensSenior Vice President General
  Manager

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• 1 Independent Record Label in U.S.
• 0.65 2005 U.S. market share
• Largest number of Charted Titles among
  Independents for 5th consecutive year (25 titles
  in 2005)
• Consistent growth and accelerated profitability

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• Diversified and growing artist roster
• Jim Jones, Diplomats, D-Block, Snoop Dogg, Robert
  Earl Keen, Charlie Daniels, Bob James, Earl
  Klugh, Marcus Miller,
• Children's properties The Wiggles, Strawberry
  Shortcake, Barney, Atomic Betty

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• DISTRIBUTION
• 1 Independent Distributor in the U.S. that is
  not owned by one of the majors, with 1.36 of the
  U.S. audio market in 2005
• In 2005, 49 of our distribution sales were from
  owned labels, up from 40 in 2004
• 30 music and video labels added for exclusive
  distribution since becoming a subsidiary of
  Entertainment One last June

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• KOCHs video sales up 26 from 2004 to 2005.
• KOCH Vision and KOCH Lorber Films represent 33
  of overall KOCH video distribution sales.
• Multiple content providers

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• DIGITAL
• 2005 revenues up 175 over 2004
• Content Aggregation exclusively represents
  growing roster of third-party labels (35
  presently)
• Close relationships with all major digital
  customers.

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Sheridan Square Deal

• Major multi-year exclusive distribution deal for
  Koch
• Covers all Sheridans labels except one
• Anticipate additional 30 million (U.S.) in
  revenues annually
• Began May 22, 2006