HIGHLIGHTS
- Robust performance in Q4 leads to adjusted EPS of $0.44, 91% growth over same period last year, drives full year adjusted EPS to $0.81
- Highest global box office quarter ever for IMAX of $244 million, brings full year 2013 box office to $727 million
- IMAX has record year for signings with 119 signings in Q4 and 277 in the full year, double that of 2012
- IMAX expands backlog to historical high of 384 new commercial theatres, a 45% increase year-over-year

NEW YORK, Feb. 20, 2014/PRNewswire/ -- IMAX Corporation(NYSE:IMAX; TSX:IMX)today reported robust fourth quarter 2013 financial results driven by the combination of strong installations as well as its highest grossing quarterly global box office ever. The Company reported revenues for the fourth quarter 2013 of $105.1 million, adjusted EBITDA as calculated in accordance with the Company's credit facility of $52.2 million, adjusted net income of $30.8 million, or $0.44per diluted share, and reported net income of $27.8 million, or $0.40per diluted share. The Company also reported a fourth quarter per screen average of $366,300.

(Logo: http://photos.prnewswire.com/prnh/20111107/MM01969LOGO)

Full year 2013 revenues were $287.9 million, adjusted EBITDA as calculated in accordance with the Company's credit facility was $113.2 million, adjusted net income was $55.7 million, or $0.81per diluted share, and reported net income was $44.1 million, or $0.64per diluted share. For reconciliations of adjusted net income to reported net income and for the definition of adjusted EBITDA and free cash flow, please see the tables at the end of this press release. The Company also reported a 2013 per screen average of $1.15 million. With the exception of 2010, when the Company's per screen average was much higher driven by Avatar, the Company's per screen averages over the past 5 years have been in a range of approximately $1.1 to $1.2 million.

"IMAXfired on all cylinders in the fourth quarter, with an exceptional number of installations and signings, as well as the highest grossing box office in the Company's history," said IMAXCEO, Richard L. Gelfond. "Breakout performances by films such as Gravity, Hobbit,and Stalingradinternationally, exemplify the power and differentiation of the IMAXformat." Gelfond continued, "The strong fourth quarter drove over 90% growth in our EBITDA compared to the same period last year, resulting in margin expansion and strong operating leverage for the full year. Overall, 2013 was a very exciting and productive year at IMAXas we effectively streamlined costs, expanded the network, signed a record number of deals and continued to execute on the film front."

Network Growth Update

In the fourth quarter of 2013, the Company signed contracts for 119 theatre systems and installed 58 theatre systems, of which 4 were upgrades of existing theatre locations, bringing the full year total installations to 112 new theatre systems across 23 countries.

"With our footprint now spanning 57 countries, IMAXis more global than ever before," added Gelfond. "Moving forward, we are focused on managing all aspects of our business to ensure that we take full advantage of attractive movie-going trends unique to each local market and that we secure IMAX'sposition as the world's premium cinematic experience. Our record level of signings in 2013 will drive ongoing network growth, and we are optimistic about what the future holds."

The total IMAX® theatre network consisted of 837 systems as of December 31, 2013, of which 701 were in commercial multiplexes. IMAXsigned contracts for 277 theatres in 2013, across 31 countries, resulting in 407 theatre systems in backlog as of December 31, 2013, compared to 276 theatre systems in backlog as of December 31, 2012. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

Fourth-Quarter Segment Results

Revenue from sales and sales-type leases was $32.6 millionin the fourth quarter of 2013, compared to $20.2 millionin the fourth quarter of 2012, primarily reflecting the installation of 24 full, new theatre systems under sales and sales-type lease arrangements in the most recent fourth quarter, compared to the 14 in the fourth quarter of 2012. In addition there were 4 digital system upgrades in existing locations in the fourth quarter of 2013, compared to 3 upgrades in the fourth quarter of 2012.
Revenue from joint revenue-sharing arrangements was $24.5 millionin the quarter, compared to $17.0 millionin the prior-year period. During the quarter, the Company installed 30 new theatres under joint revenue-sharing arrangements, compared to 29 in the year ago period. The Company had 382 theatres operating under joint revenue-sharing arrangements as of December 31, 2013, as compared to 316 theatres one year prior.
Production and IMAX DMR® (Digital Re-Mastering) revenues were $28.6 millionin the fourth quarter of 2013, compared to $19.2 millionin the fourth quarter of 2012. Gross box office from DMR titles was $244.5 millionin the fourth quarter of 2013, compared to $152.0 millionin the prior-year period. The average global DMR box office per screen in the fourth quarter of 2013 was $366,300compared to $264,400in the prior-year period.

Conference Call

The Company will host a conference call today at 8:30 AM ETto discuss its fourth quarter and full year 2013 financial results. To access the call via telephone, interested parties in the US and Canadashould dial (800) 820-0231 approximately 5 to 10 minutes before the call begins. International callers should dial (416) 640-5926. The conference ID for the call is 9729185. A replay of the call will be available via webcast on the 'Investor Relations' section of www.imax.comor via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 9729185.

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 IMAXtheatres to connect with audiences in extraordinary ways, and, as such, IMAX'snetwork is among the most important and successful theatrical distribution platforms for major event films around the globe.

IMAXis headquartered in New York, Torontoand Los Angeles, with offices in London, Tokyo, Shanghaiand Beijing. As of Dec. 31, 2013, there were 837 IMAXtheatres (701 commercial multiplexes, 19 commercial destinations and 117 institutions) in 57 countries.

IMAX®, IMAX® 3D, IMAX DMR®, Experience It In IMAX®, An IMAX 3D Experience®, The IMAX Experience®, IMAX Is Believing® and IMAXnXos® are trademarks of IMAX Corporation. More information about the Company can be found at www.imax.com. You may also connect with IMAXon 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 IMAXmanagement'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, references to future capital expenditures (including the amount and nature thereof), business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, plans and references to the future success of IMAX Corporationtogether with its wholly-owned subsidiaries (the "Company") and expectations regarding the Company's future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by the Company; the performance of IMAX DMR films; competitive actions by other companies; conditions in the in-home and out-of-home entertainment industries; the signing of theater system agreements; changes in laws or regulations; conditions, changes and developments in the commercial exhibition industry; 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 Statesand Canada; risks related to the Company's growth and operations in China; the failure to respond to change and advancements in digital technology; the Company's largest customer accounting for a significant portion of the Company's revenue and backlog; risks related to new business initiatives; the potential impact of increased competition in the markets within which the Company operates; 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; the failure to convert theater system backlog into revenue; risks related to the Company's dependence on a sole supplier for its analog film; 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'smost recent Annual Report on Form 10-K.

For additional information please contact:

Investors:

IMAX Corporation, New York

Teri Loxam

212-821-0100

tloxam@imax.com

Business Media:

Sloane & Company, New York

Whit Clay

212-446-1864

wclay@sloanepr.com

Media:

IMAX Corporation, New York

Ann Sommerlath

212-821-0155

asommerlath@imax.com

Entertainment Media:

Principal Communications Group, Los Angeles

Melissa Zuckerman/Paul Pflug

323-658-1555

melissa@pcommgroup.com

paul@pcommgroup.com

Additional Information

Signings and Installations
Dec. 31, 2013
			Three Months				Twelve Months
			Ended Dec. 31,				Ended Dec. 31,
	Theatre Signings:		2013		2012		2013		2012
		Full new sales and sales-type lease arrangements	18		11		56		43
		New joint revenue sharing arrangements	98		17		190		78
	Total new theatres		116		28		246		121

		Upgrades of IMAX theatre systems	3		10		31	(1)	21	(2)
	Total Theatre Signings		119		38		277		142

			Three Months				Twelve Months
			Ended Dec. 31,				Ended Dec. 31,
	Theatre Installations:		2013		2012		2013		2012
		Full new sales and sales-type lease arrangements	24		14		47	(3)	47
		New joint revenue sharing arrangements	30		29		65		60
	Total new theatres		54		43		112	(3)	107

		Upgrades of IMAX theatre systems	4		3		21	(1)	18
	Total Theatre Installations		58		46		133		125

			As of Dec. 31,
	Theatre Backlog:		2013		2012
		New sales and sales-type lease arrangements	125		128
		New joint revenue sharing arrangements	259		137
	Total new theatres		384		265

		Upgrades of IMAX theatre systems	23		11
	Total Theatres in Backlog		407	(4)	276	(5)

			As of Dec. 31,
	Theatre Network:		2013		2012
	Commercial Multiplex Theatres:
		Sales and sales-type lease arrangements	319		282
		Joint revenue sharing arrangements	382		316
	Total Commercial Multiplex Theatres		701		598

	Commercial Destination Theatres		19		19
	Institutional Theatres		117		114
	Total IMAX Theatre Network		837		731

______________________

(1)	Includes upgrades to xenon-based digital systems under short-term operating lease arrangements (10 signings, 10 installations).
(2)	Includes 3 IMAX theaters acquired from another existing customer that has been operating under a joint revenue sharing arrangement. These theaters were purchased from the Company under a sales arrangement.
(3)	Includes the following items: (i) one new xenon-based digital system under a short-term operating lease arrangement; (ii) one theater system which has increased the Company's institutional theater network; and (iii) one IMAX Private Theater (the first of its kind in the IMAX theater network).
(4)	Includes 23 upgrades to a digital theater system, in an existing IMAX theater location (3 xenon and 20 laser, of which 4 are under joint revenue sharing arrangements).
(5)	Includes 11 upgrades to a digital theater system, in an existing IMAX theater location (6 xenon and 5 laser).

Additional Information (continued)

2013 DMR Films:

In 2013, 38 films were converted through the IMAX DMR process and released to theaters in the IMAXnetwork by film studios as compared to 35 films in 2012. These films were:

The Grandmaster: The IMAXExperience (Jet Tone Films and Sil-Metropole Organization, January 2013, Chinaonly);
Hansel & Gretel: Witch Hunters: An IMAX3D Experience (Paramount Pictures, January 2013);
Top Gun: An IMAX3D Experience (Paramount Pictures, February 2013);
Journey to the West: Conquering the Demons: An IMAX3D Experience (Bingo Movie Development Ltd, February 2013, Chinaonly);
A Good Day to Die Hard: The IMAXExperience (Twentieth Century Fox, February 2013);
Jack the Giant Slayer: An IMAX3D Experience (Warner Bros. Pictures, March 2013);
Oz: The Great and Powerful: An IMAX3D Experience (Walt Disney Pictures, March 2013);
G.I. Joe: Retaliation: An IMAX3D Experience (Paramount Pictures, March 2013);
Dragon Ball Z: Battle of the Gods: An IMAX3D Experience (Toei Animation Company, March 2013, Japanonly);
Jurassic Park: An IMAX3D Experience(Universal Pictures, April 2013);
Oblivion: The IMAXExperience (Universal Pictures, April 2013);
Iron Man 3: An IMAX3D Experience (Walt Disney Pictures, May 2013);
Star Trek: Into Darkness: An IMAX3D Experience (Paramount Pictures, May 2013);
Fast & Furious 6: The IMAXExperience (Universal Pictures, May 2013, select international markets);
After Earth: The IMAXExperience (Columbia Pictures, May 2013);
Man of Steel: The IMAXExperience (Warner Bros. Pictures, June 2013);
World War Z: An IMAX3D Experience (Paramount Pictures, June 2013, select international markets);
Despicable Me 2: An IMAX3D Experience (Universal Pictures, July 2013, select international markets);
White House Down: The IMAXExperience(Sony Pictures, July 2013, select international markets);
Man of Tai Chi: The IMAXExperience (China Film Group, Wanda Group, Village Roadshow, July 2013, Chinaonly);
Lone Ranger: The IMAXExperience (Walt Disney Pictures, July 2013, select international markets);
Pacific Rim: An IMAX3D Experience (Warner Bros. Pictures, July 2013);
Elysium: The IMAXExperience (Sony Pictures, August 2013);
The Mortal Instruments: City of Bones: The IMAXExperience (Sony Pictures, August 2013);
Riddick Sequel: The IMAXExperience (Universal Pictures, September 2013);
The Wizard of Oz: An IMAX3DExperience(Picturehouse, September 2013);
Young Detective Dee: Riseof the Sea Dragon: An IMAX3D Experience (Huayi Bros., September 2013, Chinaonly);
Metallica Through the Never: An IMAX3DExperience(Warner Bros. Pictures, September 2013);
Gravity: An IMAX3D Experience (Warner Bros. Pictures, October 2013);
Stalingrad: An IMAX3D Experience (AR Films, October 2013, Russiaand the CIS only);
Captain Phillips: The IMAXExperience (Sony Pictures, October 2013);
The Young and Prodigious T.S. Spivet: An IMAX3D Experience (Epithète Films., October 2013, Franceonly);
Thor: The Dark World: An IMAX3D Experience (Walt Disney Pictures, October 2013, select international markets);
Ender's Game: The IMAXExperience (Lionsgate, November 2013);
The Hunger Games: Catching Fire: The IMAXExperience (Lionsgate, November 2013);
The Hobbit: The Desolation of Smaug: An IMAX3D Experience (Warner Bros. Pictures, December 2013);
Dhoom 3: The IMAXExperience(Yash Raj Films, December 2013, Indiaonly); and
Police Story: An IMAX3D Experience (China Vision, December 2013, Chinaonly).

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

		Three Months				Year Ended
		Ended December 31,				Ended December 31,
		2013		2012^*		2013		2012^*
Revenues
Equipment and product sales		$	38,014	$	22,405	$	78,663	$	78,161
Services			42,463		33,936		139,464		135,071
Rentals			22,511		18,356		61,293		61,268
Finance income			2,063		1,986		8,142		7,523
Other			-		732		375		732
			105,051		77,415		287,937		282,755
Costs and expenses applicable to revenues
Equipment and product sales			16,956		9,811		37,517		37,538
Services			15,483		16,741		68,844		70,570
Rentals			5,286		8,434		16,973		21,402
Other			-		-		-		-
			37,725		34,986		123,334		129,510
Gross margin			67,326		42,429		164,603		153,245
Selling, general and administrative expenses			23,305		22,529		82,669		81,560
	(including share-based compensation expense of $3.2 million and $11.9 million for the three months and year ended December 31, 2013, respectively (2012 - expense of $2.8 million and $13.1 million, respectively))
Research and development			3,504		3,788		14,771		11,411
Amortization of intangibles			472		174		1,618		706
Receivable provisions, net of recoveries			166		(305)		445		524
Impairment of available-for-sale investment			-		-		-		150
Income from operations			39,879		16,243		65,100		58,894
Interest income			16		12		55		85
Interest expense			(338)		686		(1,345)		(689)
Income from continuing operations before income taxes			39,557		16,941		63,810		58,290
Provision for income taxes			(9,927)		(3,594)		(16,629)		(15,079)
Loss from equity-accounted investments			(1,759)		(324)		(2,757)		(1,362)
Income from continuing operations			27,871		13,023		44,424		41,849
Net loss from discontinued operations			(42)		(140)		(309)		(512)
Net Income		$	27,829	$	12,883	$	44,115	$	41,337

Net income per share - Basic:
	Net income per share from continuing operations	$	0.41	$	0.20	$	0.66	$	0.64
	Net loss per share from discontinued operations		-		-		-		(0.01)
		$	0.41	$	0.20	$	0.66	$	0.63
Net income per share - Diluted:
	Net income per share from continuing operations	$	0.40	$	0.19	$	0.64	$	0.62
	Net loss per share from discontinued operations		-		-		-		(0.01)
		$	0.40	$	0.19	$	0.64	$	0.61

Weighted average number of shares outstanding (000's):
	Basic		67,696		66,264		67,151		65,854
	Fully Diluted		69,334		68,281		68,961		67,933


Additional Disclosure:
Depreciation and amortization⁽¹⁾		$	8,145	$	8,084	$	37,172	$	32,788

(1)	Includes $0.1 million and $0.5 million of amortization of deferred financing costs charged to interest expense for the three months and year ended December 31, 2013 (2012 - less than $0.1 million and $0.2 million respectively).

*	Includes a reclass of the Company's owned and operated Nyack theater from continuing operations to discontinued operations.

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



	As at December 31,
	2013		2012

Assets
Cash and cash equivalents	$	29,546	$	21,336
Accounts receivable, net of allowance for doubtful accounts of $887 (December 31, 2012 — $1,564)		73,074		42,007
Financing receivables		107,110		94,193
Inventories		9,825		15,794
Prepaid expenses		3,602		3,833
Film assets		7,076		3,737
Property, plant and equipment		132,847		113,610
Other assets		27,034		23,963
Deferred income taxes		24,259		36,461
Goodwill		39,027		39,027
Other intangible assets		27,745		27,911
Total assets	$	481,145	$	421,872

Liabilities
Bank indebtedness	$	-	$	11,000
Accounts payable		19,396		15,144
Accrued and other liabilities		65,232		68,695
Deferred revenue		76,932		73,954
Total liabilities		161,560		168,793

Commitments and contingencies

Shareholders' equity
Capital stock common shares — no par value. Authorized — unlimited number.
Issued and outstanding — 67,841,233 (December 31, 2012 — 66,482,425)		327,313		313,744
Other equity		36,452		28,892
Deficit		(43,051)		(87,166)
Accumulated other comprehensive loss		(1,129)		(2,391)
Total shareholders' equity		319,585		253,079
Total liabilities and shareholders' equity	$	481,145	$	421,872

IMAX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of U.S. dollars)
		Years Ended December 31,
		2013		2012^*
Cash provided by (used in):
Operating Activities
Net income		$	44,115	$	41,337
	Net loss from discontinued operations		309		512
Adjustments to reconcile net income to cash from operations:
	Depreciation and amortization		37,172		32,788
	Write-downs, net of recoveries		1,336		1,607
	Change in deferred income taxes		12,899		14,724
	Stock and other non-cash compensation		12,685		14,220
	Unrealized foreign currency exchange loss (gain)		1,183		(329)
	Gain on curtailment of postretirement benefits		(2,185)		-
	Loss from equity-accounted investments		2,757		1,362
Investment in film assets			(20,935)		(16,817)
Changes in other non-cash operating assets and liabilities			(33,755)		(15,262)
Net cash used in operating activities from discontinued operations			(548)		(512)
	Net cash provided by operating activities		55,033		73,630

Investing Activities
Purchase of property, plant and equipment			(13,016)		(6,055)
Investment in joint revenue sharing equipment			(22,775)		(23,257)
Investment in new business ventures			(4,000)		(381)
Acquisition of other intangible assets			(2,486)		(5,826)
	Net cash used in investing activities		(42,277)		(35,519)

Financing Activities
Increase in bank indebtedness			12,000		9,917
Repayment of bank indebtedness			(23,000)		(54,000)
Common shares issued - stock options exercised			8,970		8,920
Proceeds from disgorgement of stock sale profits			-		314
Credit Facility amendment fees paid			(2,151)		-
Share issuance expenses			(202)		-
	Net cash used in financing activities		(4,383)		(34,849)

Effects of exchange rate changes on cash			(163)		(64)

Increase in cash and cash equivalents during year			8,210		3,198

Cash and cash equivalents, beginning of year			21,336		18,138

Cash and cash equivalents, end of year		$	29,546	$	21,336

*	Includes a reclass of the Company's owned and operated Nyack theater from continuing operations to discontinued operations.

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 is comprised of the design, manufacture, sale or lease IMAX theater projection system equipment. The theater system maintenance segment consists of the maintenance of IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment is comprised of the installation IMAX theater projection system equipment to an exhibitor in exchange for a certain percentage of box-office receipts, concession revenue and in some cases a small upfront or initial payment. The film production and IMAX DMR segment is comprised of the production of films and 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 includes the provision of 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				Year Ended
			Ended December 31,				Ended December 31,
				2013		*2012^()**	2013		*2012^()**
Revenue
IMAX Theater Systems
	IMAX Systems
		Sales and sales-type leases	$	32,623	$	20,237	$	65,944	$	69,988
		Ongoing rent, fees, and finance income		4,134		4,105		14,245		13,417
		Other		3,838		3,802		11,182		13,019
				40,595		28,144		91,371		96,424
	Theater system maintenance			8,134		7,751		31,978		28,629
	Joint revenue sharing arrangements			24,458		17,049		64,130		57,526

Film
	Production and IMAX DMR			28,642		19,245		83,496		78,050
	Film distribution and post-production			3,222		5,226		16,962		22,126
				31,864		24,471		100,458		100,176
Total			$	105,051	$	77,415	$	287,937	$	282,755

Gross margins
IMAX Theater Systems
	IMAX systems⁽¹⁾
		Sales and sales-type leases	$	19,262	$	11,715	$	35,652	$	36,974
		Ongoing rent, fees, and finance income		3,630		4,055		13,388		13,271
		Other		(273)		398		102		1,057
				22,619		16,168		49,142		51,302
	Theater system maintenance			2,664		2,848		12,096		10,970
	Joint revenue sharing arrangements⁽¹⁾			17,769		8,968		44,565		37,308

Film
	Production and IMAX DMR⁽¹⁾			23,344		13,641		56,088		49,355
	Film distribution and post-production			930		804		2,712		4,310
				24,274		14,445		58,800		53,665
Total			$	67,326	$	42,429	$	164,603	$	153,245

(1)

IMAX systems include marketing and commission costs of $1.5 million and $2.5 million for the three and twelve months ended December 31, 2013, respectively (2012 — $0.6 million and $2.7 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.6 million and $3.6 million for the three and twelve months ended December 31, 2013, respectively (2012 — $1.3 million and $3.4 million, respectively). Production and DMR segment margins include marketing costs of $1.1 million and $4.2 million for the three and twelve months ended December 31, 2013, respectively (2012 — $1.1 million and $3.3 million, respectively). Distribution segment margins include marketing costs of $0.2 million and $0.4 million for the three and twelve months ended December 31, 2013, respectively (2012 — $0.3 million and $1.5 million, respectively).

Includes a reclass of the Company's owned and operated Nyack theater from continuing operations to discontinued operations.

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

Non-GAAP Financial Measures:

In this release, the Company presents adjusted EBITDA, adjusted net income and adjusted net income per diluted share as supplemental measures of performance of the Company, which are not recognized under United Statesgenerally accepted accounting principles ("GAAP"). The Company presents adjusted EBITDA, 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 its net income. 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 EBITDA, adjusted net income and adjusted net income per diluted share should be considered in addition to, and not as a substitute for, net income and other measures of financial performance reported in accordance with GAAP.

Adjusted EBITDA is calculated on a basis consistent with the Company's Credit Facility, which refers to Adjusted EBITDA as EBITDA. The Credit Facility provides that the Company will be required to maintain a Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of not less than 1.1:1. The Company will also be required to maintain minimum EBITDA (as defined in the Credit Agreement) of $80.0 millionon December 31, 2013, which increases to $90.0 millionon December 31, 2014, and $100.0 millionon December 31, 2015. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.25:1 on December 31, 2013, which requirement decreases to 2.0:1 on December 31, 2014, and 1.75:1 on December 31, 2015. The ratio of total debt to EBITDA was nil:1 as at December 31, 2013, 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 $nil. EBITDA is calculated as follows:


		For the		For the
		3 months ended		12 months ended
		December 31, 2013		December 31, 2013
*(In thousands of U.S. Dollars)*
Net income		$	27,829	$	44,115
Add:
	Loss from equity-accounted investments		1,759		2,757
	Provision for income taxes⁽¹⁾		9,906		16,470
	Interest expense, net of interest income		321		1,290
	Depreciation and amortization, including film asset amortization		8,011		36,685
	Write-downs, net of recoveries and receivable provisions		1,057		1,336
	Stock and other non-cash compensation		3,337		12,685
	Gain on curtailment of postretirement benefits		-		(2,185)
	Adjusted EBITDA	$	52,220	$	113,153

(1)	Includes a tax recovery in discontinued operations of less than $0.1 million and $0.2 million for the three and twelve months ended December 31, 2013, respectively.

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

Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended December 31, 2013vs. 2012:

The Company reported net income of $27.8 million or $0.41 per basic share and $0.40per diluted share for the fourth quarter of 2013 as compared to $12.9 million or $0.20 per basic share and $0.19per diluted share for the fourth quarter of 2012. Net income for the quarter includes a $3.2 million charge or $0.04 per diluted share (2012 – $2.9 million or $0.04per diluted share) for stock-based compensation. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $30.8 millionor $0.44 per diluted share in the fourth quarter of 2013 as compared to adjusted net income of $15.7 millionor $0.23per diluted share for the fourth quarter of 2012. A reconciliation of net income, the most directly comparable U.S. GAAP measure, to adjusted net income and adjusted net income per diluted share is presented in the table below:

		Three Months Ended				Three Months Ended
		December 31, 2013				December 31, 2012
		Net Income		Diluted EPS		Net Income		Diluted EPS
Reported		$	27,829	$	0.40	$	12,883	$	0.19
Adjustments:
	Stock-based compensation		3,156		0.04		2,861		0.04
	Tax impact on item listed above		(185)		-		(74)		-
Adjusted		$	30,800	$	0.44	$	15,670	$	0.23

Weighted average diluted shares outstanding					69,334				68,281

Adjusted Net Income and Adjusted Diluted Per Share Calculations – Year Ended December 31, 2013vs. 2012:

The Company reported net income of $44.1 million or $0.66 per basic share and $0.64 per diluted share for the year ended December 31, 2013 as compared to net income of $41.3 million or $0.63 per basic share and $0.61per diluted share for the year ended December 31, 2012. Net income for the year ended December 31, 2013 includes an $11.9 million charge or $0.17 per diluted share (2012 — $13.1 million or $0.19 per diluted share) for stock-based compensation. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $55.7 millionor $0.81per diluted share for the year ended December 31, 2013as compared to adjusted net income of $54.3 millionor $0.80per diluted share for the year ended December 31, 2012. A reconciliation of net income, the most directly comparable U.S. GAAP measure, to adjusted net income and adjusted net income per diluted share is presented in the table below:

		Year Ended				Year Ended
		December 31, 2013				December 31, 2012
		Net Income		Diluted EPS		Net Income		Diluted EPS
Net income		$	44,115	$	0.64	$	41,337	$	0.61
Add:
	Stock-based compensation		11,928		0.17		13,113		0.19
	Tax impact on items listed above		(344)		-		(160)		-
Adjusted net income		$	55,699	$	0.81	$	54,290	$	0.80

Weighted average diluted shares outstanding					68,961				67,933

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		For the
	3 months ended		12 months ended
	December 31, 2013		December 31, 2013
*(In thousands of U.S. Dollars)*
Net cash provided by operating activities	$	22,058	$	55,033
Net cash (used in) investing activities		(15,435)		(42,277)
Free cash flow	$	6,623	$	12,756

SOURCE IMAX Corporation