NEW YORK, Oct. 20, 2016/PRNewswire/ --

HIGHLIGHTS

IMAXincreases installation guidance to a range of 155 to 160 theatres, up from prior guidance of 155 theatres
Signed a record 162 theatre systems in the third quarter, bringing first nine month signings to 293, eclipsing the 138 system signings for all of 2015
Installed 48 new IMAX® theatres—a third-quarter Company record
Domestic Per Screen Average of $174,200in third quarter, up 8% vs. the prior year period
Announced pilot virtual reality facilities in Los Angelesand Manchester, England, both to open late 2016

IMAX Corporation(NYSE: IMAX)today reported third-quarter 2016 revenues of $86.6 millionand net income attributable to common shareholders of $2.5 million, or $0.04per share. Adjusted net income attributable to common shareholders was $7.9 million, or $0.12per diluted share. EBITDA as calculated in accordance with the Company's credit facility was $24.5 million. For reconciliations of adjusted net income to reported net income, adjusted net income per diluted share to reported net income per diluted share, and for the definition and reconciliation of EBITDA as calculated in accordance with the Company's credit facility, please see the end of this press release.

"The third quarter was strategic on several fronts that we believe will support the continued long-term growth and health of our business – including record signings and installation activity, the repurchase of 500,000 common shares under our buy-back program and reaching key milestones in the coming launch of our pilot location-based virtual reality offering," said IMAXCEO Richard L. Gelfond. "In just the first nine months of the year, we signed a record 293 theatre agreements, the majority of which came from existing partners looking to expand their IMAXfootprint. As importantly, our accelerated install pace continued into the third quarter as well, with a record 48 new theatre installs–signaling continued demand from exhibitors to open their IMAX® theatres ahead of the highly anticipated upcoming film slate."

Network Update:
During the quarter, the Company installed 50 theatres, of which 48 were for new theatre locations and 2 were upgrades. The Company also signed contracts for 162 theatres in the third quarter of 2016. The total IMAXtheatre network consisted of 1,145 systems as of Sept. 30, 2016, of which 1,037 were in commercial multiplexes. There were 547 theatres in backlog as of Sept. 30, 2016, up 23.8% from the 442 in backlog as of June 30, 2016. For a breakdown of theatre system signings, installations, network and backlog by type, please see the end of this press release.

Box Office Update:
Gross box office from IMAX DMR® titles was $186.3 millionin the third quarter of 2016, compared with $189.8 millionin the prior-year period. The average global DMR box office per-screen average in the third quarter of 2016 was $184,700.

"From a box office perspective, we were encouraged by a number of key markets - including the domestic market - which saw IMAXper screen averages rise 8% in the third quarter. While global box office overall was flat versus the third quarter of last year, box office is cyclical and we can expect periods that are stronger than others – such as the first five months of 2016. We anticipate box office will pick up again in the fourth quarter with titles such as Marvel's Doctor Strange, which includes more than an hour of footage specially formatted exclusively for IMAX, the Harry Potter spin-off Fantastic Beasts and Where to Find Them, and of course Rogue One: A Star Wars Story. With the anticipated strength of the tentpole-heavy film slate over the next 24 months coupled with the heightened demand from filmmakers to differentiate their movies using IMAX® cameras and the ideal content spacing, we believe we are well-positioned to take advantage of the years ahead."

Third-Quarter Segment Results

Revenue from sales and sales-type leases was $21.8 millionin the third quarter of 2016, compared with $26.6 millionin the third quarter of 2015. The Company installed 15 full theatre systems under sales and sales-type lease arrangements in the most recent quarter, compared with the 12 full sales-type theatres installed in the third quarter of 2015. The Company also recognized 2 upgrades under sales and sales-type lease arrangements in the most recent quarter, compared to 8 in the same period last year.
Revenue from joint revenue-sharing arrangements was $19.7 millionin the quarter, compared with $19.8 millionin the prior-year period. During the quarter, the Company installed 33 new theatres under joint revenue-sharing arrangements, compared with 22 in the third quarter of 2015. The Company had 592 theatres operating under joint revenue-sharing arrangements as of Sept. 30, 2016, as compared to 498 joint revenue-sharing theatres one year prior.
Production and DMR revenues were $21.5 millionin the third quarter of 2016, compared with $20.9 millionin the third quarter of 2015. As mentioned above, gross box office from DMR titles was $186.3 millionin the third quarter of 2016, compared with $189.8 millionin the prior-year period. The global DMR per screen average in the third quarter of 2016 was $184,700, compared with $220,500in same period last year.
Gross margin across all segments in the third quarter of 2016 was 51.9%, compared to 49.8% in the third quarter of 2015.
Operating expenses (which include SG&A and R&D, and excludes stock-based compensation) were $27.5 millionin the quarter, compared with $23.4 millionin the third quarter of 2015.

"While we remain focused on our core business, in the third quarter we expanded our efforts to deliver differentiated entertainment experiences with the coming launch of our premium location-based VR offering, IMAX VR™," Gelfond said. "I am pleased to report that we have already made significant progress on this initiative and have received strong interest for centre partnerships, content deals and many other opportunities that we hope to begin announcing over the coming months. While we are still in the early test phase of this effort, we are optimistic about VR and the potential sizeable opportunity that it presents our business."

Share Buybacks

The Company repurchased 500,000 shares in the third quarter of 2016. The Company purchased the shares at an average price of $29.32, for a total value of $14.7 million. The Company did not repurchase any shares in connection with the administration of the Company's long-term incentive plan in the third quarter of 2016.

Supplemental Earnings Materials
For more information about our results, please refer to the earnings slides posted on the IMAX Investor Relations website located at www.imax.com/content/investor-relations.

Investor Relations Website and Social Media

Beginning the week of October 24, 2016, and on a weekly basis thereafter, the Company intends to post quarter-to-date box office results on the IMAX Investor Relations website located at www.imax.com/content/investor-relations. 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. In addition, the Company has created a new Twitter account: @IMAX_IR. The Company intends to use Twitter to disclose the foregoing box office information, as well as other information that may be of interest to the Company's investor community.

The information posted on the Company's website and/or via its Twitter account may be deemed material to investors. Accordingly, investors, media and others interested in the Company should monitor the Company's website and its Twitter account 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 8:30 AM ET to discuss its third-quarter 2016 financial results. To access the call via telephone, interested parties in the US and Canadashould dial (800) 505-9568 approximately 5 to 10 minutes before the call begins. Other international callers should dial (416) 204-9271. The conference ID for the call is 6905161. A replay of the call will be available via webcast on the IMAX Investor Relations website located at www.imax.com/content/investor-relationsor via telephone by dialing (888) 203-1112 (US and Canada), or (647) 436-0148 (international). The Conference ID for the telephone replay is 6905161.

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 Sep. 30, 2016, there were 1,145 IMAXtheatres (1,037 commercial multiplexes, 16 commercial destinations and 92 institutions) in 74 countries. On Oct. 8, 2015, shares of IMAX China, a subsidiary of IMAX Corp., began trading on the Hong Kong Stock Exchangeunder the stock code "HK.1970."

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 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,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 Statesand 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 cyber-security; risks related to the Company's inability to protect its 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; 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 and Quarterly Reports on Form 10-Q.

For additional information please contact:

Investors:
IMAX Corporation, New York
Jessica Kourakos

212-821-0100

jkourakos@imax.com

Michael Mougias

212-821-0187

mmougias@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

		Three Months Ended September 30,
	Theater Signings:	2016		2015
	Full new sales and sales-type lease arrangements	5		11
	New joint revenue sharing arrangements	156		22
	Total new theaters	161		33
	Upgrade of IMAX theater systems	1		2
	Total Theater Signings	162		35


		Three Months Ended September 30,
	Theater Installations:	2016		2015
	Full new sales and sales-type lease arrangements	15		12
	New joint revenue sharing arrangements	33		22
	Total new theaters	48		34
	Upgrade of IMAX theater systems	2	⁽¹⁾	10	⁽¹⁾
	Total Theater Installations	50		44


		As of September 30,
	Theater Backlogs:	2016		2015
	New sales and sales-type lease arrangements	158		175
	New joint revenue sharing arrangements	389		209
	Total new theaters	547	⁽²⁾⁽³⁾	384	⁽²⁾⁽⁴⁾


		As of September 30,
	Theater Network:	2016		2015
	Commercial Multiplex Theaters:
	Sales and sales-type lease arrangements	445		389
	Joint revenue sharing arrangements	592		498
	Total Commercial Multiplex Theaters	1,037		887

	Commercial Destination Theaters	16		19
	Institutional Theaters	92		102
	Total Theater Installations	1,145		1,008
______________________ (1) Includes two installations of an upgrade to a laser-based digital system under sales and sales-type lease arrangements (2015 – nine laser-based digital systems, seven under sales and sales-type lease arrangements, one under a short-term operating lease arrangement and one under a joint revenue sharing arrangement). (2) Includes 20 laser-based digital theater system configurations (2015 – 69), including upgrades. The Company continues to develop and roll out its laser-based digital projection system. (3) Includes five upgrades to a laser-based digital theater system, in existing IMAX theater locations. (4) Includes 20 upgrades to a digital theater system, in existing IMAX theater locations (two xenon configurations and 18 laser configurations, of which four are under joint revenue sharing arrangements).

Additional Information (continued)

In addition to the 42 IMAX DMR films released to the IMAXtheater network during the first nine months ended September 30, 2016, 5 additional IMAX DMR films have been announced so far to be released in the remaining three months of 2016:

Inferno: TheIMAXExperience(Sony Pictures, October 2016);
Jack Reacher: Never Go Back: TheIMAXExperience(Paramount Pictures, October 2016);
Doctor Strange: TheIMAXExperience(Walt Disney Studios, November 2016);
Fantastic Beasts and Where to Find Them: TheIMAXExperience(Warner Bros. Pictures, November 2016); and
Rogue One: A Star Wars Story: TheIMAXExperience(Walt Disney Studios, December 2016).

In addition, the Company will be releasing an IMAXdocumentary film, Voyage of Time, on October 7, 2016.

To date, the Company has announced the following 24 titles to be released in 2017 to the IMAXtheater network:

xXx: Return of Xander Cage: TheIMAXExperience (Paramount Pictures, January 2017);
Resident Evil: The Final Chapter: TheIMAXExperience (Sony Pictures, February 2017);
Attraction: TheIMAXExperience(Art Pictures Studio, January 2017, Russiaonly);
The Lego Batman Movie: TheIMAXExperience(Warner Bros. Pictures, February 2017);
The Great Wall: TheIMAXExperience(Legendary East Ltd., February 2017);
Logan: TheIMAXExperience(20th Century Fox, March 2017);
Kong: Skull Island: TheIMAXExperience(Warner Bros. Pictures, March 2017);
Beauty and The Beast: TheIMAXExperience (Walt Disney Studios, March 2017);
Ghost in the Shell: TheIMAXExperience(Paramount Pictures, March 2017);
Fast 8: TheIMAXExperience(Universal Pictures, April 2017);
Guardians of the Galaxy Vol. 2: TheIMAXExperience(Walt Disney Studios, May 2017);
Pirates of the Caribbean: Dead Men Tell No Tales: TheIMAXExperience(Walt Disney Studios, May 2017);
Wonder Woman: TheIMAXExperience(Warner Bros. Pictures, June 2017);
The Mummy: TheIMAXExperience(Universal Pictures, June 2017);
Transformers: The Last Knight: TheIMAXExperience(Paramount Pictures, June 2017);
Spider-Man: Homecoming: TheIMAXExperience(Sony Pictures-distributed and Marvel Studios and Sony Pictures- produced, July 2017);
Dunkirk: TheIMAXExperience(Warner Bros. Pictures, July 2017);
The Solutrean: TheIMAXExperience(Sony Pictures, September 2017);
The Lego Ninjago Movie: TheIMAXExperience (Warner Bros. Pictures, September 2017);
Blade Runner 2049: TheIMAXExperience (Warner Bros. Pictures, October 2017);
Geostorm: TheIMAXExperience (Warner Bros. Pictures, October 2017);
Thor: Ragnarök: TheIMAXExperience(Walt Disney Studios, November 2017);
Justice League: TheIMAXExperience(Warner Bros. Pictures, November 2017); and
Star Wars: Episode VIII: TheIMAXExperience(Walt Disney Studios, December 2017).

The Company remains in active negotiations with all of the major Hollywoodstudios for additional films to fill out its short and long-term film slate, and anticipates that the number of IMAX DMR films to be released to the IMAXnetwork in 2017 will be similar to the 47 IMAX DMR films slated for release in 2016.

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

		Three Months				Nine Months
		Ended September 30,				Ended September 30,
		2016		2015		2016		2015
Revenues
Equipment and product sales		$	30,835	$	33,083	$	81,064	$	72,824
Services			37,195		33,024		122,853		115,698
Rentals			16,007		16,665		58,538		59,006
Finance income			2,288		2,329		6,991		6,803
Other			225		-		975		141
			86,550		85,101		270,421		254,472
Costs and expenses applicable to revenues
Equipment and product sales			15,690		21,949		49,075		43,010
Services			20,393		15,899		58,517		50,201
Rentals			5,504		4,864		15,367		13,856
Other			64		-		110		-
			41,651		42,712		123,069		107,067
Gross margin			44,899		42,389		147,352		147,405
Selling, general and administrative expenses			30,686		24,973		92,706		82,348
	(including share-based compensation expense of $7.7 million and $22.5 million for the three and nine months ended September 30, 2016, respectively (2015 - expense of $4.3 million and $14.9 million, respectively))
Research and development			4,460		2,722		11,603		9,611
Amortization of intangibles			531		429		1,537		1,302
Receivable provisions, net of recoveries			275		361		631		709
Asset impairments			1,223		245		1,223		245
Impairment of investments			-		-		194		350
Income from operations			7,724		13,659		39,458		52,840
Interest income			370		222		1,217		727
Interest expense			(469)		(463)		(1,325)		(1,170)
Income from operations before income taxes			7,625		13,418		39,350		52,397
Provision for income taxes			(2,551)		(2,477)		(9,635)		(12,408)
Loss from equity-accounted investments, net of tax			(690)		(427)		(2,471)		(1,610)
Net income			4,384		10,514		27,244		38,379
Less: net income attributable to non-controlling interests			(1,859)		(1,904)		(7,401)		(5,028)
Net income attributable to common shareholders		$	2,525	$	8,610	$	19,843	$	33,351

Net income per share attributable to common shareholders - basic & diluted:
Net income per share – basic		$	0.04	$	0.12	$	0.29	$	0.47
Net income per share – diluted		$	0.04	$	0.12	$	0.29	$	0.46

Weighted average number of shares outstanding (000's):
	Basic		67,090		69,699		68,053		69,582
	Fully Diluted		67,746		70,860		68,721		71,102

Additional Disclosure:
Depreciation and amortization⁽¹⁾		$	12,115	$	10,467	$	34,179	$	31,191

(1) Includes $0.1 million and $0.4 million of amortization of deferred financing costs charged to interest expense for the three and nine months ended September 30, 2016, respectively (2015 - $0.3 million and $0.7 million, respectively).

IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
*(Unaudited)*


	As at		As at
	September 30		December 31
	2016		2015

Assets
Cash and cash equivalents	$	218,104	$	317,449
Accounts receivable, net of allowance for doubtful accounts of $1,026 (December 31, 2015 — $1,146)		89,247		97,981
Financing receivables		118,897		117,231
Inventories		51,015		38,753
Prepaid expenses		11,603		6,498
Film assets		15,165		14,571
Property, plant and equipment		233,984		218,267
Other assets		26,419		26,136
Deferred income taxes		26,233		26,666
Other intangible assets		29,605		28,950
Goodwill		39,027		39,027
Total assets	$	859,299	$	931,529

Liabilities
Bank indebtedness	$	27,806	$	29,276
Accounts payable		16,733		23,455
Accrued and other liabilities		90,485		95,748
Deferred revenue		97,220		104,993
Total liabilities		232,244		253,472

Commitments and contingencies

Non-controlling interests		2,693		3,307

Shareholders' equity
Capital stock common shares — no par value. Authorized — unlimited number.
66,813,963 — issued and 66,813,787 — outstanding (December 31, 2015 — 69,673,244 — issued and outstanding)		435,829		448,310
Less: Treasury stock held in trust, 176 shares at cost		(6)		-
Other equity		180,358		168,425
Accumulated (deficit) earnings		(43,816)		15,499
Accumulated other comprehensive loss		(4,562)		(7,443)
Total shareholders' equity attributable to common shareholders		567,803		624,791
Non-controlling interests		56,559		49,959
Total shareholders' equity		624,362		674,750
Total liabilities and shareholders' equity	$	859,299	$	931,529

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars)
*(Unaudited)*
	Nine Months Ended September 30,
	2016		2015

Cash provided by (used in):
Operating Activities
Net income	$	27,244	$	38,379
Adjustments to reconcile net income to cash from operations:
Depreciation and amortization		34,179		31,191
Write-downs, net of recoveries		2,903		2,928
Change in deferred income taxes		(517)		5,097
Stock and other non-cash compensation		22,896		15,204
Unrealized foreign currency exchange (gain) loss		(206)		716
Loss from equity-accounted investments		2,769		2,756
Gain on non-cash contribution to equity-accounted investees		(298)		(1,146)
Investment in film assets		(14,162)		(12,069)
Changes in other non-cash operating assets and liabilities		(29,504)		(41,033)
Net cash provided by operating activities		45,304		42,023

Investing Activities
Purchase of property, plant and equipment		(10,033)		(38,443)
Investment in joint revenue sharing equipment		(25,524)		(20,969)
Investment in new business ventures		-		(2,000)
Acquisition of other intangible assets		(2,931)		(3,622)
Net cash used in investing activities		(38,488)		(65,034)

Financing Activities
Increase in bank indebtedness		-		17,568
Repayment of bank indebtedness		(1,500)		-
Repurchase of common shares		(100,378)		(34,279)
Settlement of restricted share units and options		(8,376)		(7,859)
Common shares issued - stock options exercised		7,196		23,838
Taxes paid on secondary sale and repatriation dividend		(2,991)		-
Taxes withheld and paid on employee stock awards vested		(230)		(223)
Treasury stock purchased for future settlement of restricted share units		(6)		(2,141)
Credit facility amendment fees paid		-		(1,310)
Issuance of subsidiary shares to non-controlling interests - private offering		-		40,000
Share issuance costs from the issuance of subsidiary shares to non-controlling
interests - private offering		-		(2,000)
Net cash (used in) provided by financing activities		(106,285)		33,594

Effects of exchange rate changes on cash		124		275

(Decrease) increase in cash and cash equivalents during period		(99,345)		10,858

Cash and cash equivalents, beginning of period		317,449		106,503

Cash and cash equivalents, end of period	$	218,104	$	117,361

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				Nine Months
			Ended September 30,				Ended September 30,
				2016		2015	2016		2015
Revenue
IMAX Theater Systems
	IMAX Systems
		Sales and sales-type leases	$	21,804	$	26,635	$	58,522	$	53,924
		Ongoing rent, fees, and finance income		3,883		3,518		11,986		10,708
		Other		4,904		3,221		14,394		11,320
				30,591		33,374		84,902		75,952

	Theater System Maintenance			10,293		9,337		30,031		27,345

	Joint Revenue Sharing Arrangements			19,698		19,797		66,940		67,259

Film
	Production and IMAX DMR			21,549		20,865		78,767		75,144
	Film distribution and post-production			4,419		1,728		9,781		8,772
				25,968		22,593		88,548		83,916
Total			$	86,550	$	85,101	$	270,421	$	254,472

Gross margins
IMAX Theater Systems
	IMAX systems⁽¹⁾
		Sales and sales-type leases	$	12,936	$	9,775	$	26,795	$	24,720
		Ongoing rent, fees, and finance income		3,807		3,334		11,457		10,111
		Other		69		(267)		(251)		(421)
				16,812		12,842		38,001		34,410

	Theater System Maintenance			3,398		3,521		10,207		9,891

	Joint Revenue Sharing Arrangements⁽¹⁾			10,980		12,130		44,716		46,816

Film
	Production and IMAX DMR⁽¹⁾			12,448		13,929		52,398		55,642
	Film distribution and post-production⁽¹⁾			1,261		(33)		2,030		646
				13,709		13,896		54,428		56,288
Total			$	44,899	$	42,389	$	147,352	$	147,405
__________________
(1)		IMAX systems include marketing and commission costs of $0.8 million and $1.9 million for the three and nine months ended September 30, 2016, respectively (2015 - $0.9 million and $1.8 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.4 million and $2.9 million for the three and nine months ended September 30, 2016, respectively (2015 - $1.3 million and $2.7 million, respectively). Production and DMR segment margins include marketing costs of $4.2 million and $11.7 million for the three and nine months ended September 30, 2016, respectively (2015 - $3.4 million and $8.3 million, respectively). Distribution segment margins include marketing expense of $0.6 million and $2.1 million for the three and nine months ended September 30, 2016, respectively (2015 - cost recovery of less than $0.1 million and cost recovery of $0.1 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 revenue attributable to common shareholders, 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 revenue attributable to common shareholders, 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, revenue, 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 $50.0 million. The Company will also be required to maintain minimum adjusted EBITDA (as defined in the credit agreement) of $100.0 million. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the credit agreement) of 2.25:1.0, which requirement decreases to (i) 2.0:1.0 on December 31, 2016; and (ii) 1.75:1.0 on December 31, 2017. The Company was in compliance with all of these requirements at September 30, 2016. The ratio of total debt to adjusted EBITDA was 0.21:1 as at September 30, 2016, 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 $28.2 million. Adjusted EBITDA is calculated as follows:

				For the				For the
				3 months ended				12 months ended
				September 30, 2016				September 30, 2016				⁽¹⁾
*(In thousands of U.S. Dollars)*
Net income				$	4,384			$	53,489
Add (subtract):
	Loss from equity accounted investments				690				3,263
	Provision for income taxes				2,551				17,279
	Interest expense, net of interest income				99				358
	Depreciation and amortization, including film asset amortization				11,984				45,036
	Write-downs, net of recoveries including asset impairments and
	receivable provisions				1,654				3,700
	Stock and other non-cash compensation				7,882				30,071
	EBITDA before non-controlling interests				29,244				153,196
	EBITDA attributable to non-controlling interests⁽²⁾				(4,738)				(20,006)
	EBITDA attributable to common shareholders			$	24,506			$	133,190
	Adjusted revenues attributable to common shareholders⁽³⁾			$	77,171			$	350,657
	Adjusted EBITDA margin				31.8%				38.0%
__________________
(1)	Ratio of funded debt calculated using twelve months ended EBITDA.
(2)	The EBITDA calculation specified for purpose of the minimum EBITDA covenant excludes the reduction in EBITDA from the Company's non-controlling interests.

(3)		3 months ended September 2016				12 months ended September 2016
	Total revenues		$ 86,550							$	389,754
	Greater China revenues	$ 29,736					$ 123,961
	Non-controlling interest ownership percentage	31.54%					31.54%
	Deduction for non-controlling interest share of revenues		(9,379)								(39,097)
	Adjusted revenues attributable to common shareholders		$ 77,171							$	350,657

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

*Adjusted Net Income and Adjusted Diluted Per Share Calculations – Quarter Ended September 30, 2016 vs. 2015:*

The Company reported net income of $4.4 million or $0.07 per basic and diluted share for the third quarter of 2016, as compared to net income of $10.5 million or $0.15 per basic share and $0.14 per diluted share for the third quarter of 2015. Net income for the third quarter of 2016 includes a $7.7 million charge or $0.11 per diluted share (2015 — $4.3 million or $0.06 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 $9.9 million or $0.15 per diluted share for the third quarter of 2016, as compared to adjusted net income of $13.9 million or $0.19 per diluted share for the third quarter of 2015. 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 $7.9 million or $0.12 per diluted share for the third quarter of 2016, as compared to adjusted net income attributable to common shareholders of $12.0 million or $0.17 per diluted share for the third quarter of 2015. 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 September 30,
		2016				2015
		Net Income		Diluted EPS		Net Income		Diluted EPS
Reported net income		$	4,384	$	0.07	$	10,514	$	0.14	⁽¹⁾
Adjustments:
	Stock-based compensation		7,742		0.11		4,252		0.06
	Tax impact on items listed above		(2,210)		(0.03)		(901)		(0.01)
Adjusted net income			9,916		0.15		13,865		0.19	⁽¹⁾
	Net income attributable to non-controlling interests		(1,859)		(0.03)		(1,904)		(0.02)
	Stock-based compensation (net of tax of less than $0.1
	million) attributable to non-controlling interests		(128)		-		-		-
Adjusted net income attributable to common shareholders		$	7,929	$	0.12	$	11,961	$	0.17	⁽¹⁾

Weighted average diluted shares outstanding					67,746				70,860

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

*Adjusted Net Income and Adjusted Diluted Per Share Calculations – Period Ended September 30, 2016 vs. 2015*

The Company reported net income of $27.2 million or $0.40 per basic and diluted share for the nine months ended September 30, 2016, as compared to net income of $38.4 million or $0.54 per basic share and $0.53 per diluted share for the nine months ended September 30, 2015. Net income for the nine months ended September 30, 2016 includes a $22.5 million charge or $0.32 per diluted share (2015 — $14.9 million or $0.21 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 $43.3 million or $0.63 per diluted share for the nine months ended September 30, 2016, as compared to adjusted net income of $50.7 million or $0.70 per diluted share for the nine months ended September 30, 2015. 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 $35.5 million or $0.52 per diluted share for the nine months ended September 30, 2016, as compared to adjusted net income attributable to common shareholders of $45.7 million or $0.63 per diluted share for the nine months ended September 30, 2015. 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:

		Nine Months Ended September 30,
		2016				2015
		Net Income		Diluted EPS		Net Income		Diluted EPS
Reported net income		$	27,244	$	0.40	$	38,379	$	0.53	⁽¹⁾
Adjustments:
	Stock-based compensation		22,485		0.32		14,930		0.21
	Tax impact on items listed above		(6,394)		(0.09)		(2,603)		(0.04)
Adjusted net income			43,335		0.63		50,706		0.70	⁽¹⁾
	Net income attributable to non-controlling interests		(7,401)		(0.11)		(5,028)		(0.07)
	Stock-based compensation (net of tax of $0.1 million)
	attributable to non-controlling interests		(421)		-		-		-
Adjusted net income attributable to common shareholders		$	35,513	$	0.52	$	45,678	$	0.63	⁽¹⁾

Weighted average diluted shares outstanding					68,721				71,102

_____________
(1)	Includes impact of $0.7 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. 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		For the
		Three months ended		Nine months ended
		September 30, 2016		September 30, 2016
*(In thousands of U.S. Dollars)*
Net cash provided by operating activities		$	9,237	$	45,304
Net cash used in investing activities			(7,625)		(38,488)
	Free cash flow	$	1,612	$	6,816

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SOURCE IMAX Corporation