1303276--6/28/2006--Marquee_Holdings

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{competitive, industry, competition}

{cost, regulation, environmental}

{capital, credit, financial}

{acquisition, growth, future}

{operation, international, foreign}

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{customer, product, revenue}

{personnel, key, retain}

{cost, operation, labor}

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RISK FACTORS Risks Related to Our Business The integration of our operations after the Mergers may not benefit the combined business and may lead to higher operating costs. Acquiring or expanding existing circuits and theatres may require additional financing, and we cannot be certain that we will be able to obtain new financing on favorable terms, or at all. We face significant competition when trying to acquire theatres, and we may not be able to acquire theatres on terms favorable to us. We may not generate sufficient cash flow from our theatre acquisitions to service our indebtedness. Optimizing our theatre circuit through new construction is subject to delay and unanticipated costs. We have had significant financial losses in recent years. We may suffer future impairment losses and lease termination charges. Our international and Canadian operations are subject to fluctuating currency values. Attendance levels at our international theatres depend on the market for local language films, and we sometimes have been unable to obtain the films we want for our theatres in certain foreign markets. Our international theatres are subject to local industry structure and regulatory and trade practices, which may adversely affect our ability to operate at a profit. We must comply with the ADA, which could entail significant cost. We will not be required to evaluate our internal controls over financial reporting under the standards required by Section 404 of the Sarbanes-Oxley Act of 2002 until our fiscal year ending in March 2008. We are party to significant litigation. We may be subject to liability under environmental laws and regulations. Our loss of key management personnel or our inability to hire and retain skilled employees at our theatres could adversely affect our business. We may suffer material losses or damages, or be required to make material payments on existing lease and other guaranty obligations, concerning entities, businesses and assets Loews no longer owns as a result of the Loews Transactions, and we may not be able to collect on indemnities from the purchaser of our Canadian and German film exhibition operations in order to satisfy these losses, damages or payments. We may not be able to generate additional ancillary revenues. We are controlled by the Sponsors, whose interests may not be aligned with our noteholders. Risks Related to Our Industry We have no control over distributors of the films and our business may be adversely affected if our access to motion pictures is limited or delayed. We are subject, at times, to intense competition. An industry-wide oversupply of screens has affected and may continue to affect the performance of some of our theatres. An increase in the use of alternative film delivery methods or other forms of entertainment may drive down our attendance and limit our ticket prices. General political, social and economic conditions can reduce our attendance. Industry-wide conversion to electronic-based media may increase our costs. Risks Related to our Debt Our substantial debt could adversely affect our operations and prevent us from satisfying our obligations under our notes. If our cash flows prove inadequate to service our debt and provide for our other obligations, we may be required to refinance all or a portion of our existing debt or future debt at terms unfavorable to us. Holdings is a holding company with no operations of its own. The senior discount notes due 2014 ("Discount Notes due 2014") are not obligations of Holdings' subsidiaries and our noteholders' rights to receive payments on the notes is effectively subordinated to the claims of the creditors of Holdings' subsidiaries. Despite our indebtedness levels, Holdings' subsidiaries may be able to incur substantially more indebtedness, which may increase the risks created by our substantial indebtedness. The indentures governing our notes and those of our subsidiaries contain covenants that may limit our ability to take advantage of certain business opportunities advantageous to us that may arise. We must offer to repurchase our notes upon a change of control, which could also result in an event of default under our senior secured credit facility.

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1303276--6/28/2006--Marquee_Holdings_Inc.