Signings and Installations

March 31, 2018

Three Months

Ended March 31,

Theater Signings:

2018

2017

Full new sales and sales-type lease arrangements

15

36

New traditional joint revenue sharing arrangements

22

-

New hybrid joint revenue sharing lease arrangements

8

2

Total new theaters

45

38

Upgrades of IMAX theater systems

-

1

Total Theater Signings

45

39

Three Months

Ended March 31,

Theater Installations:

2018

2017

Full new sales and sales-type lease arrangements

13

5

New traditional joint revenue sharing arrangements

3

8

New hybrid joint revenue sharing lease arrangements

-

1

Total new theaters

16

14

Upgrades of IMAX theater systems

-

1

⁽¹⁾

Total Theater Installations

16

15

Three Months

Ended March 31,

Theater Backlogs:

2018

2017

New sales and sales-type lease arrangements

178

⁽²⁾

176

New joint revenue sharing arrangements

Hybrid lease arrangements

116

93

Traditional arrangements

235

255

Total Theater Backlog

529

⁽³⁾

524

⁽⁴⁾

Three Months

Ended March 31,

Theater Network:

2018

2017

Commercial Multiplex Theaters:

Sales and sales-type lease arrangements

568

472

Traditional joint revenue sharing arrangements

610

533

Hybrid joint revenue sharing lease arrangements

108

116

Total Commercial Multiplex Theaters

1,286

1,121

Commercial Destination Theaters

12

14

Institutional Theaters

84

91

Total Theater Network

1,382

1,226

____________________

(1)

Includes one installation of an upgrade to a laser-based digital system under a sales arrangement.

(2)

Includes 14 theater systems which were previously classified under joint revenue sharing arrangements – hybrid sales arrangements.

(3)

Includes 33 laser-based digital theater system configurations, including five upgrades.

(4)

Includes 21 laser-based digital theater system configurations, including three upgrades.

IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except per share amounts)

(Unaudited)

Three Months Ended

March 31,

2018

2017

Revenues

Equipment and product sales

$

19,513

$

11,544

Services

44,746

38,844

Rentals

18,202

15,857

Finance income

2,523

2,412

84,984

68,657

Costs and expenses applicable to revenues

Equipment and product sales

7,972

7,464

Services

20,351

19,814

Rentals

5,969

5,608

34,292

32,886

Gross margin

50,692

35,771

Selling, general and administrative expenses

28,083

30,941

(including share-based compensation expense of $4.4 million for the three months ended March 31, 2018 (2017

— $5.3 million))

Research and development

3,592

4,334

Amortization of intangibles

892

602

Receivable provisions, net of recoveries

451

185

Exit costs, restructuring charges and associated impairments

702

-

Income (loss) from operations

16,972

Interest income

247

228

Interest expense

(494)

(455)

Income (loss) from operations before income taxes

16,725

(518)

Provision for income taxes

(4,453)

(114)

Loss from equity-accounted investments, net of tax

(205)

(255)

Net income (loss)

12,067

(887)

Less: net (income) loss attributable to non-controlling interests

(3,562)

962

Net income attributable to common shareholders

$

8,505

$

75

Net income per share attributable to common shareholders - basic and diluted:

Net income per share — basic and diluted

$

0.13

$

-

Weighted average number of shares outstanding (000's):

Basic

64,555

66,363

Fully Diluted

64,619

67,180

Additional Disclosure:

Depreciation and amortization⁽¹⁾

$

13,521

$

12,088

(1) Includes $0.1 million of amortization of deferred financing costs charged to interest expense for the three months ended March 31, 2018 (2017 -

$0.1 million).

IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)

(Unaudited)

March 31,

December 31,

2018

2017

Assets

Cash and cash equivalents

$

145,579

$

158,725

Accounts receivable, net of allowance for doubtful accounts of $2,075 (December 31, 2017 — $1,613)

119,754

130,546

Financing receivables

129,774

129,494

Inventories

29,096

30,788

Prepaid expenses

10,165

7,549

Film assets

7,714

5,026

Property, plant and equipment

278,978

276,781

Other assets

62,569

26,757

Deferred income taxes

25,145

30,708

Other intangible assets

30,533

31,211

Goodwill

39,027

39,027

Total assets

$

878,334

$

866,612

Liabilities

Bank indebtedness

$

24,867

$

25,357

Accounts payable

13,782

24,235

Accrued and other liabilities

94,023

100,140

Deferred revenue

112,131

113,270

Total liabilities

244,803

263,002

Commitments and contingencies

Non-controlling interests

5,471

1,353

Shareholders' equity

Capital stock common shares — no par value. Authorized — unlimited number.

64,287,977 issued and 63,996,413 outstanding (December 31, 2017 — 64,902,201 issued and

64,695,550 outstanding)

441,303

445,797

Less: Treasury stock, 291,564 shares at cost (December 31, 2017 — 206,651)

(5,992)

(5,133)

Other equity

173,866

175,300

Accumulated deficit

(60,418)

(87,592)

Accumulated other comprehensive loss

(138)

(626)

Total shareholders' equity attributable to common shareholders

548,621

527,746

Non-controlling interests

79,439

74,511

Total shareholders' equity

628,060

602,257

Total liabilities and shareholders' equity

$

878,334

$

866,612

IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

Three Months Ended March 31,

2018

2017

Cash provided by (used in):

Operating Activities

Net income (loss)

$

12,067

$

(887)

Adjustments to reconcile net income to cash from operations:

Depreciation and amortization

13,521

12,088

Write-downs, net of recoveries

1,036

4,010

Change in deferred income taxes

(465)

(958)

Stock and other non-cash compensation

5,141

5,660

Unrealized foreign currency exchange loss (gain)

35

(171)

Loss from equity-accounted investments

106

156

Loss on non-cash contribution to equity-accounted investees

99

99

Investment in film assets

(6,259)

(3,334)

Changes in other non-cash operating assets and liabilities

(9,818)

(17,280)

Net cash provided by (used in) operating activities

15,463

(617)

Investing Activities

Purchase of property, plant and equipment

(6,588)

(4,068)

Investment in joint revenue sharing equipment

(4,810)

(7,547)

Acquisition of other intangible assets

(555)

(1,591)

Investment in new business ventures

-

(1,000)

Net cash used in investing activities

(11,953)

(14,206)

Financing Activities

Increase in bank indebtedness

-

-

Repayment of bank indebtedness

(500)

(500)

Repurchase of common shares

(13,396)

-

Treasury stock purchased for future settlement of restricted share units

(5,992)

(779)

Taxes withheld and paid on employee stock awards vested

(1,028)

(146)

Settlement of restricted share units and options

(173)

(11,158)

Issuance of subsidiary shares to a non-controlling interest

4,449

-

Common shares issued - stock options exercised

-

13,082

Net cash (used in) provided by financing activities

(16,640)

499

Effects of exchange rate changes on cash

(16)

46

Decrease in cash and cash equivalents during period

(13,146)

(14,278)

Cash and cash equivalents, beginning of period

158,725

204,759

Cash and cash equivalents, end of period

$

145,579

$

190,481

IMAX CORPORATION

SELECTED FINANCIAL DATA

In accordance with United States Generally Accepted Accounting Principles

(in thousands of U.S. dollars)

The Company has four primary reporting groups identified by nature of product sold or service provided: (1) Network Business, representing variable revenue generated by box-office results and which includes the reportable segments of IMAX DMR and contingent rent from the JRSAs and IMAX systems segments; (2) Theater Business, representing revenue generated by the sale and installation of theater systems and maintenance services, primarily related to the IMAX Systems and Theater System Maintenance reportable segments, and also includes fixed hybrid revenues and upfront installation costs from the JRSA segment; (3) New Business, which includes content licensing and distribution fees associated with our original content investments, virtual reality initiatives, IMAX Home Entertainment, and other business initiatives that are in the development and/or start-up phase, and (4) Other; which includes the film post-production and distribution segments and certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items.

Three Months

Ended March 31,

2018

2017

Revenue

Network Business

IMAX DMR

$

27,051

$

23,408

Joint revenue sharing arrangements – contingent rent

17,861

15,233

IMAX systems – contingent rent

-

688

44,912

39,329

Theater Business

IMAX systems

Sales and sales-type leases

18,138

6,942

Ongoing fees and finance income

2,730

2,585

Joint revenue sharing arrangements – fixed fees

-

470

Theater system maintenance

12,712

11,045

Other theater

1,377

2,165

34,957

23,207

New Business

608

1,280

Other

Film distribution and post-production

3,734

3,584

Other

773

1,257

4,507

4,841

Total

$

84,984

$

68,657

Gross margin

Network Business

IMAX DMR⁽¹⁾

$

18,782

$

17,467

Joint revenue sharing arrangements – contingent rent⁽¹⁾

12,740

10,250

IMAX systems – contingent rent

-

688

31,522

28,405

Theater Business

IMAX systems

Sales and sales-type leases

11,609

3,220

Ongoing fees and finance income

2,683

2,521

Joint revenue sharing arrangements – fixed fees⁽¹⁾

-

88

Theater system maintenance

6,205

4,249

Other theater

(45)

430

20,452

10,508

New Business

(1,469)

(337)

Other

Film distribution and post-production⁽¹⁾

446

(2,663)

Other

(259)

(142)

187

(2,805)

Total

$

50,692

$

35,771

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, EBITDA and adjusted EBITDA 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 Company is required to maintain a minimum level of "EBITDA", as such term is defined in the Company's credit agreement (and which is referred to herein as "Adjusted EBITDA", as the credit agreement includes additional adjustments beyond interest, taxes, depreciation and amortization). EBITDA and Adjusted EBITDA (each as defined below) should not be construed as substitutes for net income or as better measures of liquidity as determined in accordance with U.S. GAAP.  The Company believes that EBITDA and Adjusted EBITDA are relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry.

For the

For the

3 months ended

12 months ended

March 31, 2018

March 31, 2018

⁽¹⁾

(In thousands of U.S. Dollars)

Net income

$

12,067

$

25,472

Add (subtract):

Provision for income taxes

4,453

21,129

Interest expense, net of interest income

247

935

Depreciation and amortization, including film asset amortization

13,380

67,668

EBITDA

$

30,147

$

115,204

Stock and other non-cash compensation

5,141

23,199

Write-downs, net of recoveries including asset impairments and

receivable provisions

1,036

21,041

Exit costs, restructuring charges and associated impairments

702

16,876

Loss from equity accounted investments

205

653

Adjusted EBITDA before non-controlling interests⁽²⁾

$

37,231

$

176,973

Adjusted EBITDA attributable to non-controlling interests

(5,824)

(25,906)

Adjusted EBITDA per Credit Facility

$

31,407

*

$

151,067

*

Adjusted EBITDA per Credit Facility, excluding impact from "Marvel's Inhumans"

$

31,463

*

$

139,047

*

Adjusted revenues attributable to common shareholders

$

75,958

$

353,698

Adjusted EBITDA margin, excluding impact from "Marvel's Inhumans"

41.3

%

42.7

%

Adjusted EBITDA per Credit Facility of $31.4 million and $151.1 million for the three and twelve months ended March 31, 2018 respectively, include the impact

of the Company's investment in "Marvel's Inhumans", which resulted in a $0.1 million and $13.0 million loss, respectively. However, as permitted by the Credit

Facility, this loss was offset by addbacks of $nil and $13.3 million for amortization and by addbacks of, $nil and $11.7 million for impairment charges relating to

the investment, in each case for the three and twelve months ended March 31, 2018, respectively. The net effect of these addbacks was to increase Adjusted

EBITDA per Credit Facility by $0.1 million and $12.0 million for the three and twelve months ended March 31, 2018, respectively. This investment represents the

Company's first foray into a commercial television property, and therefore the Adjusted EBITDA per Credit Facility metric presented above may not be reflective

of the Company's typical operational activity. Further, the Company does not yet know whether it will make similar investments in the future. As a result, the

Company is also presenting Adjusted EBITDA per Credit Facility excluding the impact of "Marvel's Inhumans" to better facilitate comparisons to prior and

future periods.

(1)

Ratio of funded debt calculated using twelve months ended Adjusted EBITDA.

(2)

The Adjusted EBITDA calculation specified for purpose of the minimum Adjusted EBITDA covenant excludes the reduction in Adjusted EBITDA from the

Company's non-controlling interests.

(3)

3 months ended March 31, 2018

12 months ended March 31, 2018

Total revenues

$

84,984

$

397,094

Greater China revenues

$

28,146

$

136,030

Non-controlling interest ownership percentage⁽⁴⁾

32.07%

31.90%

Deduction for non-controlling interest share of revenues

(9,026)

(43,396)

Adjusted revenues attributable to common shareholders

$

75,958

$

353,698

(4)

Weighted average ownership percentage for change in non-controlling interest share

IMAX CORPORATION

OTHER INFORMATION

(in thousands of U.S. dollars)

Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended March 31, 2018 vs. 2017:

The Company reported net income of $12.1 million, which calculates to $0.19 per basic and diluted share, for the first quarter of 2018 as compared to a net loss of $0.9 million, or $0.01 per basic and diluted share for the first quarter of 2017. Net income for the first quarter of 2018 includes a $4.8 million charge, or $0.08 per diluted share (2017 — $5.3 million or $0.08 per diluted share), for stock-based compensation and a $0.7 million charge, or $0.01 per diluted share (2017 - $nil), for exit costs, restructuring charges and associated impairments. Adjusted net income, which consists of net income excluding the impact of stock-based compensation, exit costs, restructuring charges and associated impairments and the related tax impact, was $17.1 million, or $0.27 per diluted share, for the first quarter of 2018 as compared to adjusted net income of $3.0 million, or $0.05 per diluted share, for the first quarter of 2017. The Company reported net income attributable to common shareholders of $8.5 million, or $0.13 per basic and diluted share for the first quarter of 2018 (2017 — $0.1 million or $nil per basic and diluted share). Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation, exit costs, restructuring charges and associated impairments and the related tax impact, was $13.4 million, or $0.21 per diluted share, for the first quarter of 2018 as compared to adjusted net income attributable to common shareholders of $3.9 million, or $0.06 per diluted share, for the first quarter of 2017. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, 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:

Quarter Ended March 31,

(In thousands of U.S. dollars, except per share amounts)

2018

2017

Net Income

Diluted EPS

Net Income

Diluted EPS

Reported net income

$

12,067

$

0.19

$

(887)

$

(0.01)

Adjustments:

Stock-based compensation

4,847

0.08

5,264

0.08

Exit costs, restructuring charges and associated impairments

702

0.01

-

-

Tax impact on items listed above

(559)

(0.01)

(1,341)

(0.02)

Adjusted net income

17,057

0.27

3,036

0.05

Net (income) loss attributable to non-controlling interests

(3,562)

(0.06)

962

0.01

Stock-based compensation (net of tax of less than

$0.1 million and less than $0.1 million, respectively) 

(57)

-

(128)

-

Adjusted net income attributable to common shareholders

$

13,438

$

0.21

$

3,870

$

0.06

Weighted average diluted shares outstanding

64,619

67,180

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. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented in the table below:

For the

Three months ended

March 31, 2018

(In thousands of U.S. Dollars)

Net cash provided by operating activities

$

15,463

Net cash used in investing activities

(11,953)

Net cash flow

$

3,510