NEW YORK, July 28, 2020/PRNewswire/ --

HIGHLIGHTS

409 IMAX® theaters reopened in Chinaover the July 24thweekend. The Company now has 624 theaters or approximately 40% of its global network generating revenue and is ready to benefit from an IMAX-friendly slate
A strong balance sheet, with $319 millionin consolidated cash as of June 30, 2020, and an amended credit agreement, with covenant flexibilty through Q3 2021, positions the Company well to manage through the ongoing COVID-19 related challenges
Cost reduction measures taken at the outset of the pandemic reduced the Company's average monthly cash burn to approximately $10 million, as demonstrated by the second quarter and in line with previous guidance
IMAX signed agreements to add 29 theater systems, headlined by the international 17-theater CGV and 10-theater Wanda deals, demonstrating continued global demand for The IMAXExperience® from existing partners in established markets
As a result of the global pandemic, second quarter 2020 revenue decreased 92% versus 2019 to $8.9 million. Second quarter 2020 net (loss) attributable to common shareholders was ($26) million. Non-GAAP adjusted EBITDA (loss) was ($18.5) millionversus $41.4 millionin the prior-year period

	Three Months Ended
	June 30,
In thousands except per share data	2020			2019			YoY % Change
Total Revenue	$	8.9		$	104.8			(91.6)	%

(Margin Loss) Gross Margin	$	(7.7)		$	59.6			(112.9)	%
(Margin Loss) Gross Margin (%)		(86.8)	%		56.8	%

Net (Loss) income attributable to common shareholders	$	(26.0)		$	11.4		N/A
Diluted Net (Loss) income per share attributable to common shareholders	$	(0.44)		$	0.19		N/A
Adjusted Net (Loss) Income⁽¹⁾	$	(26.1)		$	19.7		N/A
Adj. Net (Loss) Income Per Share⁽¹⁾	$	(0.44)		$	0.32		N/A

Adjusted EBITDA per Credit Facility attributable to common shareholders⁽¹⁾	$	(18.5)		$	41.4		N/A
Adj. EBITDA Margin attributable to common shareholders (%) ⁽¹⁾		(219.3)	%		43.8	%	N/A

_____________

(1) Non-GAAP Financial Measure

Note: For the definition and reconciliations of reported results to non-GAAP financial results, please refer to the discussion of non-GAAP financial measures at the end of this earnings release.

IMAX Corporation(NYSE:IMAX) today reported second quarter 2020 revenues of $8.9 million, gross margin (loss) of ($7.7) million, and a net (loss) attributable to common shareholders of ($26.0) million, or ($0.44) per diluted share. For reconciliations of reported results to non-GAAP financial results, please see the end of this press release.

Results in the second quarter reflect the closure of substantially all of the theaters in the Company's global network driven by the Coronavirus pandemic. These closures reduced IMAX Technology Network and IMAX Maintenance revenue to essentially zero and caused a margin loss for the quarter. During the second quarter, the Company accrued $3.2 millionin payroll subsidies and tax credits from the Canadian and US governments as part of their COVID-19 relief programs which benefitted SG&A expense, cost of sales, and R&D expense.

"As the only global theatrical platform for blockbuster entertainment, IMAX is uniquely advantaged as theaters begin to reopen on a rolling basis throughout the world. Our model gives us the flexibility to reopen where safe, program locally relevant content to maximize revenues, and play a leadership role as the industry returns," said IMAX CEO Richard L. Gelfond.

"We are seeing early signs of progress, with approximately 40% of our global network currently generating revenue. This includes 409 IMAX® theaters in China, which are scheduled to debut Hollywoodand local language films over the coming weeks. Additionally, the South Korean blockbuster "Peninsula" continues to perform well across markets in Asiaand Europe, drawing $26.5 millionin global box office despite capacity limitations and highlighting solid demand among moviegoers in lower-risk markets worldwide."

"We believe that our solid financial position gives IMAX the strength to be ready as the rest of our network comes back online. At the end of the second quarter, the Company had $319 millionin consolidated cash and recently amended its credit agreement for increased financial flexibility through September 2021."

"We continue to look ahead to an exceptionally strong slate through 2021, as studios affirm their commitment to the theatrical release by rescheduling their key blockbuster titles. Additionally, major global exhibitors continue to underscore the value of TheIMAX Experience, with new agreements including a 10-theatre deal with Wanda Film in Chinaand a multinational 17-theatre deal with CGV."

"We remain unwavering in our stance that the health and safety of audiences must be the priority as theaters reopen and we support by the work of local governments and our partners to put public health first."

Second Quarter and June Year-to-Date Segment Results⁽¹⁾

	IMAX Technology Network									IMAX Technology Sales and Maintenance
	Revenue			(Margin Loss) Gross Margin			(Margin Loss) Gross Margin %			Revenue			Gross Margin				Gross Margin %
2Q20	$	0.4		$	(6.5)		N/A			$	4.6			$	0.2			4.9	%
2Q19	64.8				43.3			66.8	%	34.8					15.4			44.1	%
% change		(99.4)	%		(115.1)	%					(86.8)	%			(98.5)	%

YTD 2Q20	$	17.0		$	(3.7)			(21.8)	%	$	19.7			$	5.0			25.1	%
YTD 2Q19	110.8				75.0			67.7	%		65.0				28.5			43.8	%
% change		(84.7)	%		(104.9)	%					(69.7)	%			(82.6)	%

(1) Please refer to the Company's Form 10-Q for the period ended June 30, 2020for additional segment information

IMAX Technology Network

IMAX Technology Network revenues decreased 99% to $0.4 millionin the second quarter of 2020, compared to $64.8 millionin the prior-year period. The closure of the Company's network due to the COVID-19 pandemic impacted results.
Margin (loss) for the IMAX Technology Network was ($6.5) millionin the second quarter of 2020 and was driven by the lack of revenue and ongoing fixed costs associated with our installed IMAX network.

IMAX Technology Sales and Maintenance

IMAX Technology Sales and Maintenance revenues decreased 87% to $4.6 millionin the second quarter of 2020, compared with $34.8 millionin the prior year period. Seven fewer sales type lease installations principally resulted in lower IMAX system revenue. IMAX maintenance revenue declined to nil as regular maintenance services were suspended due to the COVID-19 theater closures.
Total gross margin for IMAX Technology Sales and Maintenance was $0.2 millioncompared to $15.4 millionin the prior year period. Lower revenue was partially offset by the shift in certain overhead costs from cost of sales to SG&A.

Cash Balances and Outstanding Debt

Total cash and cash equivalents as of June 30, 2020were $319 million. Total debt was $300.2 millionas of June 30, 2020.

Share Count and Capital Return

The weighted average diluted shares outstanding at the end of the second quarter of 2020 declined 4.4% to 58.8 million, compared to 61.5 million in the second quarter of 2019, due primarily to share repurchase activity during the twelve-month period. During the second quarter of 2020, the Company did not repurchase any stock. A total of $89.4 millionremains available under the Company's outstanding share repurchase authorization, which was extended in June and now expires in June 2021.
During the second quarter of 2020, IMAX China repurchased a total of 423 thousand shares at an average price of $1.50for a total value of approximately $640 thousand.

Supplemental Materials

For more information about the Company's results, please refer to the IMAX Investor Relations website located at investors.imax.com.

Investor Relations Website and Social Media

On a weekly basis, the Company posts quarter-to-date box office results on the IMAX Investor Relations website located at investors.imax.com. The Company expects to provide such updates on Friday of each week, although the Company may change this timing without notice. Results will be displayed with a one-week lag.

The information posted on the Company's corporate and Investor Relations website may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website in addition to the Company's press releases, SECfilings and public conference calls and webcasts.

Conference Call

The Company will host a conference call today at 4:30PM ETto discuss its second quarter 2020 financial results. This call is being webcast by PGI and can be accessed at investors.imax.com. To access the call via telephone, interested parties in the US and Canadashould dial (800) 367-2403 approximately 5 to 10 minutes before the call begins. Other international callers should dial (647) 490-5367. The conference ID for the call is 9071085. A replay of the call will be available via webcast at investors.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 9071085.

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 theaters 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 additional offices in London, Dublin, Tokyo, and Shanghai. As of June 30, 2020, there were 1,615 IMAX theater systems (1,527 commercial multiplexes, 13 commercial destinations, 75 institutional) operating in 81 countries and territories. Shares of IMAX China Holding, Inc., a subsidiary of IMAX Corporation, trade on the Hong Kong Stock Exchangeunder the stock code "HK.1970."

IMAX®, IMAX® Dome, IMAX® 3D, IMAX® 3D Dome, Experience It In IMAX®, The IMAX Experience®, An IMAX Experience®, An IMAX 3D Experience®, IMAX DMR®, DMR®, IMAX nXos® and Films to the Fullest^®, are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions. More information about the Company can be found at www.imax.com. You may also connect with IMAX on Instagram (https://www.instagram.com/imax), Facebook (www.facebook.com/imax), Twitter (www.twitter.com/imax) and YouTube (www.youtube.com/imaxmovies).

For additional information please contact:

Investors:
IMAX Corporation, New York
Brett Harriss
212-821-0187
bharriss@IMAX.com

Media:
IMAX Corporation, New York
Mark Jafar
212-821-0102
mjafar@imax.com

Forward-Looking Statements

This earnings 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, 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 consolidated 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, 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 performance of IMAX DMR^®films; the signing of theater system agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; 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 relating to recent consolidation among commercial exhibitors and studios; 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 cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any of the Company's restructuring initiatives; the impact of COVID-19 on our financial condition and results of operations and on the businesses of our customers and exhibitor partners; 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. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PrimaryReporting Groups

The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements; (iii) IMAX Systems, (iv) IMAX Maintenance; (v) Other Theater Business; (vi) New Business Initiatives; (vii) Film Distribution; and (viii) Film Post-production. The Company organizes its reportable segments into the following four categories, identified by the nature of the product sold or service provided:

(i)	IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from the Joint Revenue Sharing Arrangement ("JRSA") segment;

(ii)	IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment;

(iii)	New Business Initiatives, which is a segment that includes activities related to the exploration of new lines of business and new initiatives outside of the Company's core business; and

(iv)	Film Distribution and Post-production, which includes activities related to the licensing of film content, the distribution of films primarily for the Company's institutional theater partners (through the Film Distribution segment) and the provision of film post-production and quality control services (through the Film Post-production segment).

Signings and Installations

	Three Months Ended June 30,
Theater System Signings:	2020			2019
Full new sales and sales-type lease arrangements		12			7
New hybrid joint revenue sharing lease arrangements		17			45
New traditional joint revenue sharing arrangements		-			2
Total new IMAX theaters		29			54
Upgrades of IMAX theater systems		-			19
Total theater signings		29			73

	Three Months Ended June 30,
Theater System Installations:	2020			2019
Full new sales and sales-type lease arrangements		2			9
New hybrid joint revenue sharing lease arrangements		1			5
New traditional joint revenue sharing arrangements		-			13
Total new IMAX theaters		3			27
Upgrades of IMAX theater systems		—			8
Total theater installations		3			35

	Three Months Ended June 30,
Theater Sales Backlog:	2020			2019
Sales and sales-type lease arrangements		190			182
Hybrid JRSA		154			154
Traditional JRSA		215	⁽¹⁾		276	⁽¹⁾
Total theater backlog		559	⁽²⁾		612	⁽³⁾

	Three Months Ended June 30,
Theater Network:	2020			2019
Commercial Multiplex Theaters:
Sales and sales-type lease arrangements		659			619
Hybrid joint revenue sharing lease arrangements		138			133
Traditional joint revenue sharing lease arrangements		730			693
Total Commercial Multiplex Theaters⁽⁴⁾		1,527			1,445
Commercial Destination Theaters		13			15
Institutional Theaters		75			81
Total theater network		1,615			1,541

(1) Includes 46 IMAX Theater Systems where the customer has the option to convert from a joint revenue sharing arrangement to a sales arrangement (2019 — 60).

(2) Includes 154 new IMAX with Laser projection system configurations and 94 upgrades of existing locations to IMAX with Laser projection system configurations.

(3) Includes 139 new IMAX with Laser projection system configurations and 118 upgrades of existing locations to IMAX with Laser projection system configurations.

(4) Period to period changes are net of the effects of permanently closed theaters.

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S.dollars, except per share amounts)
*(Unaudited)*

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2020		2019		2020		2019
Revenues
Technology sales		$	2,687	$	19,694	$	8,349	$	34,894
Image enhancement and maintenance services			3,799		56,662		24,520		100,809
Technology rentals			(137)		25,863		5,834		44,033
Finance income			2,506		2,578		5,054		5,259
			8,855		104,797		43,757		184,995
Costs and expenses applicable to revenues
Technology sales			2,546		11,939		6,415		21,374
Image enhancement and maintenance services			7,244		26,781		25,060		46,024
Technology rentals			6,753		6,524		14,884		12,904
			16,543		45,244		46,359		80,302
(Margin loss) gross margin			(7,688)		59,553		(2,602)		104,693
Selling, general and administrative expenses			29,796		32,136		58,432		59,785
Research and development			1,232		1,222		3,432		2,358
Amortization of intangibles			1,344		1,218		2,665		2,293
Credit loss expense			1,440		927		11,657		1,358
Asset impairments			-		-		1,151		-
Exit costs, restructuring charges and associated impairments			-		-		-		850
(Loss) income from operations			(41,500)		24,050		(79,939)		38,049
Gain (loss) in fair value of equity investment			2,025		(4,544)		(2,514)		(2,053)
Retirement benefits non-service expense			(130)		(160)		(246)		(320)
Interest income			891		572		1,256		1,142
Interest expense			(1,581)		(636)		(2,229)		(1,317)
(Loss) income before taxes			(40,295)		19,282		(83,672)		35,501
Income tax benefit (expense)			10,248		(5,308)		(5,257)		(8,956)
Equity in losses of investees, net of tax			-		(138)		(529)		(222)
Net (loss) income			(30,047)		13,836		(89,458)		26,323
Less: Net loss (income) attributable to non-controlling interests			4,080		(2,439)		14,137		(6,661)
Net (loss) income attributable to common shareholders		$	(25,967)	$	11,397	$	(75,321)	$	19,662
Net (loss) income per share attributable to common shareholders - basic and diluted:
Net (loss) income per share — basic and diluted		$	(0.44)	$	0.19	$	(1.26)	$	0.32

Weighted average number of shares outstanding (000's):
	Basic		58,808		61,331		59,613		61,354
	Fully Diluted		58,808		61,507		59,613		61,525
Additional Disclosure:
Depreciation and amortization⁽¹⁾		$	11,930	$	15,593	$	27,182	$	29,804

(1) Includes $0.2 millionand $0.3 millionof amortization of deferred financing costs charged to interest expense for the three months and six months ended June 30, 2020, respectively ($0.1 millionand $0.2 million, respectively).

IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
In accordance with United States Generally Accepted Accounting Principles
(In thousands of dollars, except share amounts)
*(Unaudited)*

	June 30,		December 31,
	2020		2019
Assets
Cash and cash equivalents	$	318,986	$	109,484
Accounts receivable, net of allowance for credit losses		54,839		99,513
Financing receivables, net of allowance for credit losses		123,865		128,038
Variable consideration receivable, net of allowance for credit losses		39,397		40,040
Inventories		60,179		42,989
Prepaid expenses		12,008		10,237
Film assets		13,147		17,921
Property, plant and equipment		287,220		306,849
Investment in equity securities		13,192		15,685
Other assets		24,575		25,034
Deferred income tax assets		46,826		23,905
Other intangible assets		28,204		30,347
Goodwill		39,027		39,027
Total assets	$	1,061,465	$	889,069
Liabilities
Bank indebtedness	$	297,765	$	18,229
Accounts payable		13,668		20,414
Accrued and other liabilities		108,917		112,779
Deferred revenue		104,311		94,552
Deferred income tax liabilities		18,475		—
Total liabilities		543,136		245,974
Commitments and contingencies
Non-controlling interests		4,237		5,908
Shareholders' equity
Capital stock common shares — no par value. Authorized — unlimited number.
58,878,749 issued and 58,857,436 outstanding (December 31, 2019— 61,362,872 issued and 61,175,852 outstanding)		405,583		423,386
Less: Treasurystock, 21,313 shares at cost (December 31, 2019— 187,020)		(329)		(4,038)
Other equity		172,690		171,789
Accumulated deficit		(134,395)		(40,253)
Accumulated other comprehensive loss		(4,180)		(3,190)
Total shareholders' equity attributable to common shareholders		439,369		547,694
Non-controlling interests		74,723		89,493
Total shareholders' equity		514,092		637,187
Total liabilities and shareholders' equity	$	1,061,465	$	889,069

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of dollars)
*(Unaudited)*

	Six Months Ended
	June 30,
	2020		2019
Cash (used in) provided by:
Operating Activities
Net (loss) income	$	(89,458)	$	26,323
Adjustments to reconcile net (loss) income to cash from operating activities:
Depreciation and amortization		27,182		29,804
Credit loss expense		11,657		1,358
Write-downs		6,806		508
Deferred income tax (benefit) expense		(4,878)		1,296
Share-based and other non-cash compensation		10,850		11,710
Unrealized foreign currency exchange loss (gain)		312		(14)
Loss in fair value of equity securities		2,514		2,053
Equity in losses of investees		529		222
Changes in assets and liabilities:
Accounts receivable		36,971		489
Inventories		(16,887)		(3,226)
Film Assets		(4,057)		(8,214)
Deferred revenue		9,799		(1,355)
Changes in other operating assets and liabilities		(12,220)		(12,437)
Net cash (used in) provided by operating activities		(20,880)		48,517
Investing Activities
Purchase of property, plant and equipment		(594)		(4,175)
Purchase of equipment for joint revenue sharing arrangements		(3,908)		(22,235)
Acquisition of other intangible assets		(1,221)		(1,121)
Investment in equity securities		—		(15,153)
Net cash used in investing activities		(5,723)		(42,684)
Financing Activities
Increase in credit facility borrowings		280,244		35,000
Repayment of credit facility borrowings		—		(50,000)
Credit facility amendment fees paid		(959)		—
Settlement of restricted share units and options		(2,757)		(7,619)
Treasurystock repurchased for future settlement of restricted share units		(329)		(1,575)
Repurchase of common shares, IMAX China		(1,532)		(16,813)
Taxes withheld and paid on employee stock awards vested		(251)		(219)
Common shares issued - stock options exercised		—		2,379
Repurchase of common shares		(36,624)		(1,258)
Issuance of subsidiary shares to non-controlling interests (net of return on capital)		—		1,106
Dividends paid to non-controlling interests		(2,118)		(2,266)
Net cash provided by (used in) financing activities		235,674		(41,265)
Effects of exchange rate changes on cash		431		293
Increase (decrease) in cash and cash equivalents during period		209,502		(35,139)
Cash and cash equivalents, beginning of period		109,484		141,590
Cash and cash equivalents, end of period	$	318,986	$	106,451

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue
IMAX Technology Network
IMAX DMR	$	546	$	39,293	$	11,175	$	67,243
Joint revenue sharing arrangements, contingent rent⁽²⁾		(137)		25,540		5,834		43,584
		409		64,833		17,009		110,827
IMAX Technology Sales and Maintenance
IMAX Systems		4,549		16,501		10,237		29,527
Joint revenue sharing arrangements, fixed fees		369		2,548		1,139		5,087
IMAX Maintenance		—		13,207		7,370		26,158
Other Theater Business⁽³⁾		(309)		2,580		954		4,206
		4,609		34,836		19,700		64,978
New Business Initiatives		632		478		1,110		1,312
Film Distribution and Post-production		3,182		3,601		5,676		6,263
		8,832		103,748		43,495		183,380
Other		23		1,049		262		1,615
Total revenues	$	8,855	$	104,797	$	43,757	$	184,995

(Margin Loss) Gross Margin
IMAX Technology Network
IMAX DMR⁽¹⁾	$	(30)	$	23,961	$	4,413	$	43,736
Joint revenue sharing arrangements, contingent rent⁽¹⁾		(6,501)		19,318		(8,119)		31,253
		(6,531)		43,279		(3,706)		74,989
IMAX Technology Sales and Maintenance
IMAX Systems ⁽¹⁾		2,650		8,019		5,826		15,071
Joint revenue sharing arrangements, fixed fees⁽¹⁾		48		870		227		1,165
IMAX Maintenance		(1,908)		5,640		(1,149)		10,921
Other Theater Business		(564)		841		46		1,316
		226		15,370		4,950		28,473
New Business Initiatives		512		281		873		900
Film Distribution and Post-production ⁽¹⁾		(1,396)		458		(3,331)		433
		(7,189)		59,388		(1,214)		104,795
Other		(499)		165		(1,388)		(102)
Total Segment Margin	$	(7,688)	$	59,553	$	(2,602)	$	104,693

__________________

(1) IMAX DMR gross margin includes marketing expense of $nil and $2.4million for the three and six months ended June 30, 2020, respectively (2019 — $9.5million and $13.4 million, respectively). JRSA gross margin includes advertising, marketing and commission expense of less than $0.1 millionand $0.6million for the three and six months ended June 30, 2020, respectively (2019 —$0.2 million and $0.3 million, respectively). IMAX Systems gross margin includes marketing and commission costs of $0.2million and $0.4million for the three and six months ended June 30, 2020, respectively, (2019 — $0.4million and $0.9 million, respectively). Film Distribution segment gross margin includes marketing expense of $nil and $0.2million for the three and six months ended June 30, 2020, respectively (2019 — less than $0.1million and $0.6 million, respectively).

(2) The Company is reporting negative revenue due to the continued amortization of lessee incentives that are typically netted against lease revenues, which are abnormally low during the period due to the COVID-19 global pandemic.

(3) The Company is reporting negative revenue due to an adjustment to prior period revenue.

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

Non-GAAP Financial Measures:

In this release, the Company presents adjusted net (loss) income attributable to common shareholders and adjusted net (loss) income attributable to common shareholders per diluted share, EBITDA, Adjusted EBITDA per Credit Facility, Adjusted EBITDA margin, and free cash flow as supplemental measures of the Company's performance, which are not recognized under U.S.GAAP. Adjusted net (loss) income attributable to common shareholders and adjusted net (loss) income attributable to common shareholders per diluted share exclude, where applicable: (i) share-based compensation; (ii) exit costs, restructuring charges and associated impairments, (iii) changes in the fair value of equity investments, (iv) COVID-19 government relief benefits, as well as the related tax impact of these adjustments, and (v) the income tax effects related to the removal of the indefinitely reinvested assertion on the historical earnings of certain subsidiaries.

The Company believes that these non-GAAP financial measures are important supplemental measures that allow management and users of the Company's financial statements to view operating trends and analyze controllable operating performance on a comparable basis between periods without the after-tax impact of share-based compensation and certain unusual items included in net (loss) income attributable to common shareholders. Although share-based compensation is an important aspect of the Company's employee and executive compensation packages, it is a non-cash expense and is excluded from certain internal business performance measures.

In addition to the non-GAAP financial measures discussed above, management also uses "EBITDA," as such term is defined in the Credit Agreement, and which is referred to herein as "Adjusted EBITDA per Credit Facility." As allowed by the Credit Agreement, Adjusted EBITDA per Credit Facility includes adjustments in addition to the exclusion of interest, taxes, depreciation and amortization. Accordingly, this non-GAAP financial measure is presented to allow a more comprehensive analysis of the Company's operating performance and to provide additional information with respect to the Company's compliance against its Credit Agreement requirements in the current period, if applicable. In addition, the Company believes that Adjusted EBITDA per Credit Facility presents relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry to evaluate, assess and benchmark the Company's results.

EBITDA is defined as net (loss) income excluding (i) interest expense, net of interest income; (ii) income tax (benefit) expense; and (iii) depreciation and amortization, including film asset amortization. Adjusted EBITDA per Credit Facility is defined as EBITDA excluding: (i) share-based and other non-cash compensation; (ii) gain (loss) in fair value of equity investment; (iii) write-downs, net of recoveries, including asset impairments and credit loss expense; (iv) gain (loss) from equity accounted investment; (v) exit costs, restructuring charges and associated impairments; (vi) legal arbitration award; and (vii) executive transition costs.

Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the condensed consolidated statements of cash flows). Cash provided by operating activities consist of net (loss) 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 below.

These non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Additionally, the non-GAAP financial measures used by the Company should not be considered as a substitute for, or superior to, the comparable GAAP amounts. A reconciliation of each of these non-GAAP measures to the most directly comparable GAAP measures is presented below.

	For the Three Months Ended June 30, 2020									For the Three Months Ended June 30, 2019
	Attributable to Non-controlling			Less:						Attributable to Non-controlling			Less:
	Interests and			Attributable to			Attributable to			Interests and			Attributable to			Attributable to
	Common			Non-controlling			Common			Common			Non-controlling			Common
	Shareholders			Interests			Shareholders			Shareholders			Interests			Shareholders
*(In thousands of U.S.Dollars)*
Reported net loss	$	(30,047)		$	(4,080)		$	(25,967)		$	13,836		$	2,439		$	11,397
Add (subtract):
Income tax (benefit) expense		(10,248)			638			(10,886)			5,308			1,187			4,121
Interest expense, net of interest income		524			(96)			620			64			(140)			204
Depreciation and amortization, including film asset amortization		11,930			1,049			10,881			15,593			1,177			14,416
EBITDA	$	(27,841)		$	(2,489)		$	(25,352)		$	34,801		$	4,663		$	30,138
Share-based and other non-cash compensation		6,541			299			6,242			7,186			228			6,958
(Gain) Loss in fair value of equity investment		(2,025)			(612)			(1,413)			4,544			1,443			3,101
Write-downs, including asset impairments and credit loss expense		3,843			1,815			2,028			1,169			84			1,085
Loss from equity accounted investments		—			—			—			138			—			138
Adjusted EBITDA per Credit Facility	$	(19,482)		$	(987)		$	(18,495)		$	47,838		$	6,418		$	41,420
Revenues attributable to common shareholders⁽²⁾		8,855			421			8,434			104,797			10,216			94,581
Adjusted EBITDA margin attributable to common shareholders		(220.0)	%		(234.7)	%		(219.3)	%		45.6	%		62.8	%		43.8	%

	For the Twelve Months Ended June 30, 2020 ⁽¹⁾									For the Twelve Months Ended June 30, 2019 ⁽¹⁾
	Attributable to Non-controlling			Less:						Attributable to Non-controlling			Less:
	Interests and			Attributable to			Attributable to			Interests and			Attributable to			Attributable to
	Common			Non-controlling			Common			Common			Non-controlling			Common
	Shareholders			Interests			Shareholders			Shareholders			Interests			Shareholders
*(In thousands of U.S.Dollars)*
Reported net loss	$	(57,210)		$	(9,093)		$	(48,117)		$	37,596		$	11,220		$	26,376
Add (subtract):
Income tax expense		13,069			6,707			6,362			10,386			3,737			6,649
Interest expense, net of interest income		922			(424)			1,346			392			63			329
Depreciation and amortization, including film asset amortization		60,865			4,897			55,968			59,207			5,372			53,835
EBITDA	$	17,646		$	2,087		$	15,559		$	107,581		$	20,392		$	87,189
Share-based and other non-cash compensation		22,710			730			21,980			23,513			527			22,986
Loss in fair value of equity investment		978			274			704			2,053			652			1,401
Write-downs, including asset impairments and credit loss expense		23,404			5,420			17,984			5,518			1,827			3,691
Loss from equity accounted investments		304			—			304			409			—			409
Exit costs, restructuring charges and associated impairments		—			—			—			9,234			—			9,234
Legal arbitration award		—			—			—			4,237			—			4,237
Executive transition costs		—			—			—			2,994			—			2,994
Adjusted EBITDA per Credit Facility	$	65,042		$	8,511		$	56,531		$	155,539		$	23,398		$	132,141
Revenues attributable to common shareholders⁽²⁾		254,426			21,697			232,729			376,067			39,905			336,162
Adjusted EBITDA margin attributable to common shareholders		25.6	%		39.2	%		24.3	%		41.4	%		58.6	%		39.3	%

_____________
(1) Senior Secured Net Leverage Ratio calculated using twelve months ended Adjusted EBITDA per Credit Facility. During the second quarter, the Company entered into the Amendment to the Credit Facility Agreement which provides for, among other things, the suspension of the Senior Secured Net Leverage Ratio financial covenant through the first quarter of 2021.
(2)

	Three months ended June 30, 2020					Three months ended June 30, 2019					12 months ended June 30, 2020					12 months ended June 30, 2019
Total revenues				$	8,855				$	104,797				$	254,426				$	376,067
Greater Chinarevenues	$	1,393				$	32,575				$	71,700				$	125,289
Non-controlling interest ownership percentage⁽³⁾		30.19	%				31.36	%				30.26	%				31.85	%
Deduction for non-controlling interest share of revenues					(421)					(10,216)					(21,697)					(39,905)
Revenues attributable to common shareholders				$	8,434				$	94,581				$	232,729				$	336,162


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

IMAX CORPORATION
Adjusted Net (Loss) Income Attributable to Common Shareholders and Adjusted Diluted Per Share Calculations
(In thousands of U.S.dollars)
(Unaudited)

	Three Months Ended				Three Months Ended
	June 30, 2020				June 30, 2019
*(In thousands of U.S.dollars, except per share amounts)*	Net Loss		Diluted EPS		Net Income		Diluted EPS
Reported net (loss) income attributable to common shareholders	$	(25,967)	$	(0.44)	$	11,397	$	0.19
Adjustments⁽¹⁾:
Share-based compensation		6,168		0.10	$	6,799		0.11
Change in the fair value of equity securities		(1,413)		(0.02)		3,101		0.05
COVID-19 government relief benefits		(3,151)		(0.05)		—		—
Tax Impact on items listed above		(857)		(0.01)		(1,604)		(0.03)
Income tax effects related to the removal of the indefinitely reinvested assertion on the historical earnings of certain subsidiaries		(841)		(0.02)		—		—
Adjusted net (loss) income⁽¹⁾	$	(26,061)	$	(0.44)	$	19,693	$	0.32

Weighted average basic shares outstanding				58,808				61,331
Weighted average diluted shares outstanding				58,808				61,507


(1)	Reflects amounts attributable to non-controlling interests.

	Six Months Ended				Six Months Ended
	June 30, 2020				June 30, 2019
*(In thousands of U.S.dollars, except per share amounts)*	Net Income		Diluted EPS		Net Income		Diluted EPS
Reported net (loss) income attributable to common shareholders	$	(75,321)	$	(1.26)	$	19,662	$	0.32
Adjustments⁽¹⁾:
Share-based compensation		10,243		0.17	$	11,076		0.18
Exit costs, restructuring charges and associated impairments		—		—		850		0.01
Change in the fair value of equity securities		1,752		0.03		1,401		0.03
COVID-19 government relief benefits		(3,151)		(0.05)		—		—
Tax impact on items listed above		(1,195)		(0.02)		(2,484)		(0.04)
Income tax effects related to the removal of the indefinitely reinvested assertion on the historical earnings of certain subsidiaries		12,885		0.21		—		—
Adjusted net (loss) income⁽¹⁾	$	(54,787)	$	(0.92)	$	30,505	$	0.50

Weighted average basic shares outstanding				59,613				61,354
Weighted average diluted shares outstanding				59,613				61,525


(1)	Reflects amounts attributable to non-controlling interests.

*Free Cash Flow:*

	Three Months Ended		Six Months Ended
	June 30, 2020		June 30, 2020
Net cash used in operating activities	$	(26,846)	$	(20,880)
Net cash used in investing activities		(3,010)		(5,723)
Free cash flow	$	(29,856)	$	(26,603)

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SOURCE IMAX Corporation