IMAX Corporation Reports Second Quarter 2015 Financial Results

HIGHLIGHTS

- Record box office of $343 million in Q2 2015 results in over a half a billion of IMAX global box office generated in the first half of the year

- Stellar global per screen average of $415 thousand in Q2 2015, driven by a 41% increase in domestic and 33% increase in international per screen averages compared to Q2 2014

- Company increases annual installation guidance to 120 new theatres after another above target quarter of 35 new commercial installations in Q2 2015

- $107.2 million of revenues in Q2, IMAX's highest revenue generating quarter ever, was up 35% from same period last year, driving adjusted EPS of $0.40, 60% growth over Q2 2014

News provided by

IMAX Corporation

Jul 23, 2015, 06:30 ET

NEW YORK, July 23, 2015 /PRNewswire/ -- IMAX Corporation (NYSE: IMAX) today reported second quarter 2015 revenues of $107.2 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $50.4 million, adjusted net income after non-controlling interest of $28.7 million, or $0.40 per diluted share, and reported net income after non-controlling interest of $24.4 million, or $0.34 per diluted share. The Company also reported a very strong second quarter global per screen average of $414,600.

"The second quarter of 2015 was one of the strongest in IMAX's history, delivering our highest revenue ever, growing adjusted EPS by 60% compared to the same period last year, record box office and quarterly per screen averages that we have not seen since Avatar in 2010," stated IMAX CEO Richard L. Gelfond. "We believe the strength of this quarter clearly demonstrates the impact that a strong slate of blockbuster films can have on IMAX and the operating leverage that results."

Network Growth Update

The total IMAX® theatre network consisted of 976 systems as of June 30, 2015, of which 852 were in commercial multiplexes. There were 391 theatres in backlog as of June 30, 2015, compared to 419 in backlog as of June 30, 2014. In the second quarter of 2015, the Company signed contracts for 30 theatres, of which 28 were for new locations and 2 were for upgrades. In the quarter, the Company also installed 35 theatres, all of which were for new theatre locations. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

"Momentum also continued to build on the network side of our business with higher than expected installations and strong signings activity in the quarter," continued Gelfond, who is in Vienna for the world premiere of Mission Impossible: Rogue Nation at the historic Vienna Opera House, which has been transformed into an IMAX theatre for this event. "Tonight's M:I5 event is the continuation of the transformation of IMAX's brand from the smaller successes onto center stage. More agreements to use IMAX cameras as well as IMAX premieres such as Furious 7 and Jurassic World are a powerful marketer for our brand and also signal the increasingly important role IMAX plays in the entertainment ecosystem."

Second-Quarter Segment Results

Revenue from sales and sales-type leases was $18.7 million in the second quarter of 2015, compared to $14.5 million in the second quarter of 2014, primarily reflecting the installation of 15 full theatre systems (14 new, 1 used) under sales and sales-type lease arrangements in the most recent second quarter, compared to the 11 sales-type theatres the Company installed in the prior-year period. In addition, there were no upgrades in existing locations in the second quarter of 2015, compared to 4 xenon upgrades in the second quarter of 2014.
Revenue from joint revenue-sharing arrangements was $31.6 million in the quarter, compared to $19.4 million in the prior-year period. During the quarter, the Company installed 20 new theatres under joint revenue-sharing arrangements, compared to 19 in the same period in 2014. The Company had 477 theatres operating under joint revenue-sharing arrangements as of June 30, 2015, as compared to 408 joint-venture theatres one year prior.
Production and IMAX DMR® (Digital Re-Mastering) revenues were $36.6 million in the second quarter of 2015, compared to $24.0 million in the second quarter of 2014. Gross box office from DMR titles was $343.0 million in the second quarter of 2014, compared to $216.0 million in the prior-year period. The average global DMR box office per screen in the second quarter of 2014 was $414,600 compared to $299,800 in the prior-year period.

Conference Call

The Company will host a conference call today at 8:30 AM ET to discuss its second quarter 2015 financial results. To access the call via telephone, interested parties in the US and Canada should dial (888) 438-5519 approximately 5 to 10 minutes before the call begins. International callers should dial (719) 325-2469. The conference ID for the call is 1711636. A replay of the call will be available via webcast on the 'Investor Relations' section of www.imax.com or via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 1711636.

About IMAX Corporation

IMAX, an innovator in entertainment technology, combines proprietary software, architecture and equipment to create experiences that take you beyond the edge of your seat to a world you've never imagined. Top filmmakers and studios are utilizing IMAX theatres to connect with audiences in extraordinary ways, and, as such, IMAX's network is among the most important and successful theatrical distribution platforms for major event films around the globe.

IMAX is headquartered in New York, Toronto and Los Angeles, with offices in London, Tokyo, Shanghai and Beijing. As of June 30, 2015, there were 976 IMAX theatres (852 commercial multiplexes, 20 commercial destinations and 104 institutions) in 65 countries.

IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience®, IMAX Is Believing® and IMAX nXos® are trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

This press release contains forward looking statements that are based on IMAX management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, but are not limited to, the signing of theater system agreements; conditions, changes and developments in the commercial exhibition industry; the performance of IMAX DMR films; the potential impact of increased competition in the markets within which the Company operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to the Company's growth and operations in China; the Company's largest customer accounting for a significant portion of the Company's revenue and backlog; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to the Company's inability to protect the Company's intellectual property; risks related to the Company's implementation of a new enterprise resource planning system; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; risks related to the Company's dependence on a sole supplier for its analog film; risks related to cybersecurity; and other factors, many of which are beyond the control of the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

For additional information please contact:

Investors:

IMAX Corporation, New York

Teri Loxam

212-821-0100

[email protected]

Business Media:

Sloane & Company, New York

Whit Clay

212-446-1864

[email protected]

Media:

IMAX Corporation, New York

Ann Sommerlath

212-821-0155

[email protected]

Entertainment Media:

Principal Communications Group, Los Angeles

Melissa Zuckerman/Paul Pflug

323-658-1555

[email protected]

Additional Information

	Signings and Installations
	June 30, 2015
				Three Months
				Ended June 30,
		Theater Signings:		2015		2014
			Full new sales and sales-type lease arrangements	19		17
			New joint revenue sharing arrangements	9		3
		Total new theaters		28		20

			Upgrades of IMAX theater systems	2	⁽¹⁾	4	⁽¹⁾⁽²⁾
		Total Theater Signings		30		24

				Three Months
				Ended June 30,
		Theater Installations:		2015		2014
			Full new sales and sales-type lease arrangements	15		11
			New joint revenue sharing arrangements	20		19
		Total new theaters		35		30
			Upgrades of IMAX theater systems	-		4	⁽²⁾
		Total Theater Installations		35		34

				As of June 30,
		Theater Backlog:		2015		2014
			New sales and sales-type lease arrangements	162		155
			New joint revenue sharing arrangements	205		242
		Total new theaters		367		397

			Upgrades of IMAX theater systems	24		22
		Total Theaters in Backlog		391	⁽³⁾	419	⁽³⁾

				As of June 30,
		Theater Network:		2015		2014
		Commercial Multiplex Theaters:
			Sales and sales-type lease arrangements	375		327
			Joint revenue sharing arrangements	477		408
		Total Commercial Multiplex Theaters		852		735

		Commercial Destination Theaters		20		19
		Institutional Theaters		104		114
		Total IMAX Theater Network		976		868

(1)	Includes two signings for the installation of laser-based digital systems in existing theater locations (2014 – 2 signings).
(2)	Includes one signing and two installations of upgrades to a xenon-based digital system under short-term operating lease arrangements.
(3)	Includes 73 laser theater system configurations (2014 – 66), including upgrades. The Company continues to develop and roll out its laser projection system.

Additional Information (continued)

2015 DMR Films:
In addition to the 23 IMAX DMR films released to the IMAX theater network during the first six months of 2015, 13 additional IMAX DMR films have been announced so far to be released in the remaining six months of 2015:

Monk Comes Down the Mountain: An IMAX 3D Experience (China Film Group, July 2015);
Monster Hunt: An IMAX 3D Experience (Edko Films, July 2015)
Ant-Man: An IMAX 3D Experience (Walt Disney Studios, July 2015);
Pixels: An IMAX 3D Experience (Sony Pictures Entertainment, July 2015);
Mission: Impossible – Rogue Nation: The IMAX Experience (Paramount Pictures, July 2015);
The Man from U.N.C.L.E: The IMAX Experience (Warner Bros. Pictures, August 2015);
Everest: An IMAX 3D Experience (Universal Studios, September 2015);
The Walk: The IMAX Experience (Sony Pictures Entertainment, October 2015);
Crimson Peak: The IMAX Experience (Universal Studios, October 2015);
Spectre : The IMAX Experience (Sony Pictures Entertainment, November 2015);
The Hunger Games: Mockingjay Part 2: An IMAX 3D Experience (Lionsgate, November 2015);
In the Heart of the Sea: The IMAX Experience (Warner Bros. Pictures, December 2015); and
Star Wars: The Force Awakens: An IMAX 3D Experience (Walt Disney Studios, December 2015).

To date, the Company has announced the following 14 titles to be released to the IMAX theater network in 2016:

The Finest Hours: The IMAX Experience (Walt Disney Studios, January 2016);
Warcraft: An IMAX 3D Experience (Universal Studios, March 2016);
Batman v Superman: Dawn of Justice: The IMAX Experience (Warner Bros. Pictures, March 2016);
The Jungle Book: The IMAX Experience (Walt Disney Studios, April 2016);
Captain America: Civil War: The IMAX Experience (Walt Disney Studios, May 2016);
Alice in Wonderland: Through the Looking Glass: The IMAX Experience (Walt Disney Studios, May 2016);
Finding Dory: The IMAX Experience (Walt Disney Studios, June 2016);
Tarzan: The IMAX Experience (Warner Bros. Pictures, July 2016);
Knights of the Roundtable: King Arthur: The IMAX Experience (Warner Bros. Pictures, July 2016);
Suicide Squad: The IMAX Experience (Warner Bros. Pictures, August 2016);
Geostorm: The IMAX Experience (Warner Bros. Pictures, October 2016);
Doctor Strange: An IMAX 3D Experience (Walt Disney Studios, November 2016);
Fantastic Beasts and Where to Find Them: The IMAX Experience (Warner Bros. Pictures, November 2016); and
Rogue One: An IMAX 3D Experience (Walt Disney Studios, December 2016).

The Company remains in active negotiations with all of the major Hollywood studios for additional films to fill out its short and long-term film slate, and anticipates that a similar number of IMAX DMR films will be released to the IMAX network in 2015 to the 40 films that were released to the IMAX network in 2014.

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars, except per share amounts)
*(Unaudited)*

		Three Months				Six Months
		Ended June 30,				Ended June 30,
		2015		2014		2015		2014
Revenues
Equipment and product sales		$	25,305	$	19,502	$	39,741	$	25,856
Services			50,958		39,742		82,674		68,614
Rentals			28,527		17,841		42,341		28,632
Finance income			2,229		2,060		4,474		4,240
Other			141		-		141		-
			107,160		79,145		169,371		127,342
Costs and expenses applicable to revenues
Equipment and product sales			13,521		9,366		21,061		13,085
Services			19,495		17,180		34,302		31,530
Rentals			5,109		4,805		8,992		8,525
			38,125		31,351		64,355		53,140
Gross margin			69,035		47,794		105,016		74,202
Selling, general and administrative expenses			29,023		23,498		57,375		44,810
	(including share-based compensation expense of $5.1 million and $10.7 million for the three and six months ended June 30 2015, respectively (2014 - expense of $4.7 million and $7.9 million, respectively))
Research and development			2,347		3,309		6,889		6,908
Amortization of intangibles			443		416		873		818
Receivable provisions, net of recoveries			343		329		348		616
Impairment of investments			350		650		350		650
Income from operations			36,529		19,592		39,181		20,400
Interest income			259		24		505		40
Interest expense			(403)		(268)		(707)		(534)
Income from operations before income taxes			36,385		19,348		38,979		19,906
Provision for income taxes			(9,256)		(5,407)		(9,931)		(5,479)
Loss from equity-accounted investments, net of tax			(749)		(162)		(1,183)		(424)
Income from continuing operations			26,380		13,779		27,865		14,003
Net income from discontinued operations, net of tax			-		-		-		355
Net income		$	26,380	$	13,779	$	27,865	$	14,358
Less: Net income attributable to non-controlling interests			(2,030)		(472)		(3,124)		(472)
Net income attributable to Common Shareholders		$	24,350	$	13,307	$	24,741	$	13,886

Net income per share - basic:
	Net income per share from continuing operations	$	0.34	$	0.19	$	0.35	$	0.20
	Net income per share from discontinued operations		-		-		-		0.01
		$	0.34	$	0.19	$	0.35	$	0.21

Net income per share - diluted:
	Net income per share from continuing operations	$	0.34	$	0.19	$	0.34	$	0.19
	Net income per share from discontinued operations		-		-		-		0.01
		$	0.34	$	0.19	$	0.34	$	0.20
Weighted average number of shares outstanding (000's):
	Basic		69,843		68,228		69,526		68,068
	Fully Diluted		71,688		69,452		71,349		69,448

Additional Disclosure:
	Depreciation and amortization⁽¹⁾	$	11,091	$	8,390	$	20,724	$	15,945


(1)	Includes $0.2 million and $0.4 million of amortization of deferred financing costs charged to interest expense for the three and six months ended June 30, 2015, respectively (2014 - $0.1 million and $0.3 million, respectively).

IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In accordance with United States Generally Accepted Accounting Principles
(in thousands of U.S. dollars)

	As at		As at
	June 30,		December 31,
	2015		2014
	(unaudited)
Assets
Cash and cash equivalents	$	146,383	$	106,503
Accounts receivable, net of allowance for doubtful accounts of $1,222 (December 31, 2014 — $947)		91,464		76,051
Financing receivables		108,492		105,700
Inventories		34,186		17,063
Prepaid expenses		6,799		4,946
Film assets		14,842		15,163
Property, plant and equipment		207,099		183,424
Other assets		28,342		23,047
Deferred income taxes		21,673		23,058
Other intangible assets		28,811		27,551
Goodwill		39,027		39,027
Total assets	$	727,118	$	621,533

Liabilities
Bank indebtedness	$	22,278	$	4,710
Accounts payable		21,349		26,145
Accrued and other liabilities		66,614		75,425
Deferred revenue		98,062		88,566
Total liabilities		208,303		194,846

Commitments and contingencies

Non-controlling interests		85,532		43,912

Shareholders' equity
Capital stock, common shares — no par value. Authorized — unlimited number.
70,182,090 — issued and 70,152,426 — outstanding (December 31, 2014 — 68,988,050)		378,247		344,862
Less: Treasury stock held in trust, 29,664 shares at cost		(1,214)		-
Other equity		42,666		47,319
Retained earnings (accumulated deficit)		17,998		(6,259)
Accumulated other comprehensive loss		(4,414)		(3,147)
Total shareholders' equity		433,283		382,775
Total liabilities and shareholders' equity	$	727,118	$	621,533

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars)
*(Unaudited)*
		Six Months
		Ended June 30,
		2015		2014
Cash provided by (used in):
Operating Activities
Net income		$	27,865	$	14,358
	Net income from discontinued operations		-		(355)
Adjustments to reconcile net income to cash from operations:
	Depreciation and amortization		20,724		15,945
	Write-downs, net of recoveries		1,457		1,579
	Change in deferred income taxes		2,232		2,789
	Stock and other non-cash compensation		10,861		8,090
	Unrealized foreign currency exchange loss		851		64
	Loss from equity-accounted investments		1,923		574
	Gain on non-cash contribution to equity-accounted investees		(740)		-
Investment in film assets			(7,404)		(5,147)
Changes in other non-cash operating assets and liabilities			(39,271)		(3,219)
Net cash provided by operating activities from discontinued operations			-		572
	Net cash provided by operating activities		18,498		35,250

Investing Activities
Purchase of property, plant and equipment			(34,920)		(16,581)
Investment in joint revenue sharing equipment			(11,613)		(10,801)
Acquisition of other intangible assets			(2,972)		(970)
	Net cash used in investing activities		(49,505)		(28,352)

Financing Activities
Issuance of subsidiary shares to a non-controlling interest			40,000		40,491
Share issuance costs from the issuance of subsidiary shares to a non-controlling interest			(2,000)		(3,556)
Common shares issued - stock options exercised			22,850		2,657
Increase in bank indebtedness			17,568		-
Credit facility amendment fees paid			(1,161)		-
Treasury stock purchased for future settlement of restricted share units			(1,214)		-
Settlement of restricted share units			(4,988)		(790)
	Net cash provided by financing activities		71,055		38,802

Effects of exchange rate changes on cash			(168)		(159)

Increase in cash and cash equivalents during the period			39,880		45,541

Cash and cash equivalents, beginning of period			106,503		29,546
Cash and cash equivalents, end of period		$	146,383	$	75,087

IMAX CORPORATION
SELECTED FINANCIAL DATA
In accordance with United States Generally Accepted Accounting Principles
(in thousands of U.S. dollars)

The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-production; and other. The IMAX systems segment includes the design, manufacture, sale or lease of IMAX theater projection system equipment. The theater system maintenance segment includes the maintenance of IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment includes the provision of IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The film production and IMAX DMR segment includes the production of films and the performance of film re-mastering services. The film distribution segment includes the distribution of films for which the Company has distribution rights. The film post-production segment provides film post-production and film print services. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items.

			Three Months Ended June 30,				Six Months Ended June 30,
				2015		2014	2015		2014
Revenue
IMAX Theater Systems
	IMAX Systems
		Sales and sales-type leases	$	18,674	$	14,478	$	27,289	$	18,985
		Ongoing rent, fees, and finance income		3,691		3,518		7,190		6,771
		Other		4,674		3,730		8,099		5,242
				27,039		21,726		42,578		30,998
	Theater system maintenance			9,158		8,673		18,008		16,868
	Joint revenue sharing arrangements			31,594		19,363		47,462		30,219

Film
	Production and IMAX DMR			36,603		24,050		54,279		39,235
	Film distribution and post-production			2,766		5,333		7,044		10,022
				39,369		29,383		61,323		49,257
Total			$	107,160	$	79,145	$	169,371	$	127,342

Gross margin
IMAX Theater Systems
	IMAX systems⁽¹⁾
		Sales and sales-type leases	$	10,038	$	8,255	$	14,945	$	9,914
		Ongoing rent, fees, and finance income		3,499		3,334		6,777		6,448
		Other		(114)		454		(154)		16
				13,423		12,043		21,568		16,378
	Theater system maintenance			3,089		2,781		6,370		5,782
	Joint revenue sharing arrangements⁽¹⁾			24,069		13,378		34,686		20,661

Film
	Production and IMAX DMR⁽¹⁾			28,488		18,634		41,713		29,708
	Film distribution and post-production			(34)		958		679		1,673
				28,454		19,592		42,392		31,381
Total			$	69,035	$	47,794	$	105,016	$	74,202

(1)

IMAX systems include marketing and commission costs of $0.6 million and $0.9 million for the three and six months ended June 30, 2015, respectively (2014 — $0.7 million and $0.9 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.3 million and $1.4 million for the three and six months ended June 30, 2015, respectively (2014 — $1.0 million and $1.2 million, respectively). Production and DMR segment margins include marketing costs of $3.6 million and $4.9 million for the three and six months ended June 30, 2015, respectively (2014 — $2.0 million and $3.2 million, respectively). Distribution segment margins include marketing costs of less than $0.1 million and cost recovery of $0.1 million for the three and six months ended June 30, 2015, respectively (2014 — $0.2 million and $0.4 million, respectively).

IMAX CORPORATION
OTHER INFORMATION
(in thousands of U.S. dollars)

*Non-GAAP Financial Measures:*
In this release, the Company presents adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share as supplemental measures of performance of the Company, which are not recognized under U.S. GAAP. The Company presents adjusted net income and adjusted net income per diluted share because it believes that they are important supplemental measures of its comparable controllable operating performance and it wants to ensure that its investors fully understand the impact of its stock-based compensation (net of any related tax impact) on net income. In addition, the Company presents adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share because it believes that they are important supplemental measures of its comparable financial results and could potentially distort the analysis of trends in business performance and it wants to ensure that its investors fully understand the impact of net income attributable to non-controlling interests and its stock-based compensation (net of any related tax impact) in determining net income attributable to common shareholders. Management uses these measures to review operating performance on a comparable basis from period to period. However, these non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share should be considered in addition to, and not as a substitute for, net income and net income attributable to common shareholders and other measures of financial performance reported in accordance with U.S. GAAP.

The Credit Facility provides that the Company will be required at all times to satisfy a Minimum Liquidity Test (as defined in the Credit Agreement) of at least $50 million. The Company will also be required to maintain minimum EBITDA (as defined in the Credit Agreement) of $90.0 million until December 30, 2015, which requirement increases to $100.0 million on December 31, 2015. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.5:1.0 until December 30, 2015, which requirement decreases to (i) 2.25:1.0 on December 31, 2015; (ii) 2.0:1.0 on December 31, 2016; and (iii) 1.75:1.0 on December 31, 2017. The ratio of total debt to EBITDA was 0.17:1 as at June 30, 2015, where Total Debt (as defined in the Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $22.3 million. EBITDA is calculated as follows:

		For the		For the
		3 months ended		12 months ended
		June 30, 2015		June 30, 2015⁽¹⁾
*(In thousands of U.S Dollars)*
Net income		$	26,380	$	55,676
Add (subtract):
	Loss from equity accounted investments		749		1,830
	Provision for income taxes		9,256		18,918
	Interest expense, net of interest income		144		227
	Depreciation and amortization, including film asset amortization		10,861		37,876
	Write-downs net of recoveries including asset impairments and receivable provisions		1,329		5,172
	Stock and other non-cash compensation		5,195		18,238
	EBITDA attributable to non-controlling interests⁽²⁾		(3,538)		(8,519)
		$	50,376	$	129,418

(1)	Ratio of funded debt calculated using twelve months ended EBITDA.
(2)	The EBITDA calculation specified for purposes of the minimum EBITDA covenant excludes the reduction in EBITDA from the Company's non-controlling interests.

IMAX CORPORATION
OTHER INFORMATION
(in thousands of U.S. dollars)

*Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended June 30, 2015 vs. 2014:*
The Company reported net income of $26.4 million or $0.37 per basic share and $0.36 per diluted share for the second quarter of 2015, as compared to $13.8 million or $0.20 per basic and diluted share for the second quarter of 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $30.7 million or $0.42 per diluted share for the second quarter of 2015 as compared to adjusted net income of $17.7 million or $0.26 per diluted share for the second quarter of 2014. Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation and the related tax impact, was $28.7 million or $0.40 per diluted share for the second quarter of 2015 as compared to adjusted net income attributable to common shareholders of $17.2 million or $0.25 per diluted share for the second quarter of 2014. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measures, to adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:

		Three Months Ended					Three Months Ended
		June 30, 2015					June 30, 2014
		Net Income		Diluted EPS			Net Income		Diluted EPS
Reported net income		$	26,380	$	0.36	⁽¹⁾	$	13,779	$	0.20	⁽¹⁾
Adjustments:
	Stock-based compensation		5,103		0.07			4,715		0.07
	Tax impact on items listed above		(740)		(0.01)			(828)		(0.01)
Adjusted net income			30,743		0.42	⁽¹⁾		17,666		0.26	⁽¹⁾
	Net income attributable to non-controlling interests		(2,030)		(0.02)			(472)		(0.01)
Adjusted net income attributable to common shareholders		$	28,713	$	0.40	⁽¹⁾	$	17,194	$	0.25	⁽¹⁾

Weighted average diluted shares outstanding					71,688					69,452

(1)	Includes impact of $0.3 million (2014 ― $0.1 million) of accretion charges associated with redeemable Class C shares of IMAX China.

*Adjusted Net Income and Adjusted Diluted Per Share Calculations – Six Months Ended June 30, 2015 vs. 2014:*

The Company reported net income of $27.9 million or $0.39 per basic share and $0.38 per diluted share for the six months ended June 30, 2015, as compared to $14.4 million or $0.21 per basic and diluted share for the six months ended June 30, 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $36.8 million or $0.51 per diluted share for the six months ended June 30, 2015 as compared to adjusted net income of $20.9 million or $0.30 per diluted share for the six months ended June 30, 2014. Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding stock-based compensation expense and the related tax impact, was $33.7 million, or $0.47 per diluted share, in the six months ended June 30, 2015, as compared to adjusted net income attributable to common shareholders of $20.4 million, or $0.29 per diluted share, for the six months ended June 30, 2014. A reconciliation of net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:

		Six Months					Six Months
		Ended June 30, 2015					Ended June 30, 2014
		Net Income		Diluted EPS			Net Income		Diluted EPS
Reported net income		$	27,865	$	0.38	⁽¹⁾	$	14,358	$	0.21	⁽¹⁾
Adjustments:
	Stock-based compensation		10,678		0.15			7,903		0.11
	Tax impact on items listed above		(1,702)		(0.02)			(1,343)		(0.02)
Adjusted net income			36,841		0.51	⁽¹⁾		20,918		0.30	⁽¹⁾
	Net income attributable to non-controlling interests		(3,124)		(0.04)			(472)		(0.01)
Adjusted net income attributable to common shareholders		$	33,717	$	0.47	⁽¹⁾	$	20,446	$	0.29	⁽¹⁾

Weighted average diluted shares outstanding					71,349					69,448

(1)	Includes impact of $0.5 million (2014 ― $0.1 million) of accretion charges associated with redeemable Class C shares of IMAX China.

*Free Cash Flow:*

Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the consolidated statements of cash flows). Cash provided by operating activities consist of net income, plus depreciation and amortization, plus the change in deferred income taxes, plus other non-cash items, plus changes in working capital, less investment in film assets, plus other changes in operating assets and liabilities. Cash used in investing activities includes capital expenditures, acquisitions and other cash used in investing activities. Management views free cash flow, a non-GAAP measure, as a measure of the Company's after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. A reconciliation of cash provided by operating activities to free cash flow is presented in the table below:

					For the
					6 months ended
					June 30, 2015
*(In thousands of U.S. Dollars)*
Net cash provided by operating activities					$ 18,498
Net cash used in investing activities					(49,505)
Free cash flow					$ (31,007)