Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xþ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes xþ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No xþ

Indicate the number of shares of each of the issuer’s classes of common stock, as of the latest practicable date:

Certain statements included in this quarterly report may constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking 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 Corporation together with its 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 States and Canada; risks related to the Company’s growth and operations in China; the Company’s largest customer accounting for a significant portion of the Company’s revenue and backlog; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to the Company’s inability to protect the Company’s intellectual property; risks related to the Company’s implementation of a new enterprise resource planning system; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; risks related to the Company’s dependence on a sole supplier for its analog film; risks related to cyber-security; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this quarterly report are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.

IMAX^®, IMAX^® Dome, IMAX^® 3D, IMAX^® 3D Dome, Experience It In IMAX^®,TheIMAXExperience^®,AnIMAXExperience^®,An IMAX~~Experience~~^®,An ~~IMAX~~ 3DExperience^®, IMAX DMR^®, DMR^®, IMAX nXos^®, IMAX think big^®, think big^® and IMAX Is Believing^®, are trademarks and trade names of the Company or its subsidiaries that are registered or otherwise protected under laws of various jurisdictions.


	June 30, 2015			December 31, 2014			September 30, 2015			December 31, 2014
Assets
Cash and cash equivalents	$	146,383		$	106,503		$	117,361		$	106,503
Accounts receivable, net of allowance for doubtful accounts of $1,222 (December 31, 2014 — $947)		91,464			76,051
Accounts receivable, net of allowance for doubtful accounts of $1,558 (December 31, 2014 — $947)								87,534			76,051
Financing receivables		108,492			105,700			113,984			105,700
Inventories		34,186			17,063			35,562			17,063
Prepaid expenses		6,799			4,946			7,106			4,946
Film assets		14,842			15,163			15,460			15,163
Property, plant and equipment		207,099			183,424			212,967			183,424
Other assets		28,342			23,047			34,645			23,047
Deferred income taxes		21,673			23,058			21,458			23,058
Other intangible assets		28,811			27,551			28,719			27,551
Goodwill		39,027			39,027			39,027			39,027

Total assets	$	727,118		$	621,533		$	713,823		$	621,533

Liabilities
Bank indebtedness	$	22,278		$	4,710		$	22,278		$	4,710
Accounts payable		21,349			26,145			18,118			26,145
Accrued and other liabilities		66,614			75,425			72,519			75,425
Deferred revenue		98,062			88,566			106,301			88,566

Total liabilities		208,303			194,846			219,216			194,846

Commitments and contingencies

Non-controlling interests		85,532			43,912			87,851			43,912


Shareholders’ equity
Capital stock common shares — no par value. Authorized — unlimited number. 70,182,090 — issued and 70,152,426 — outstanding (December 31, 2014 — 68,988,050)		378,247			344,862
Less: Treasury stock held in trust, 29,664 shares at cost		(1,214	)		—
Capital stock common shares — no par value. Authorized — unlimited number.
69,193,840 — issued and 69,136,609 — outstanding (December 31, 2014 — 68,988,050 — issued and outstanding )								373,936			344,862
Less: Treasury stock held in trust, 57,231 shares at cost								(2,141	)		-
Other equity		42,666			47,319			43,769			47,319
Retained earnings (accumulated deficit)		17,998			(6,259	)
Accumulated deficit								(2,544	)		(6,259	)
Accumulated other comprehensive loss		(4,414	)		(3,147	)		(6,264	)		(3,147	)

Total shareholders’ equity		433,283			382,775			406,756			382,775

Total liabilities and shareholders’ equity	$	727,118		$	621,533		$	713,823		$	621,533

(the accompanying notes are an integral part of these condensed consolidated financial statements)


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2015			2014			2015			2014
Net income	$	26,380		$	13,779		$	27,865		$	14,358		$	10,514		$	5,297		$	38,379		$	19,655

Unrealized net loss from cash flow hedging instruments		352			937			(2,674	)		127			(2,309	)		(1,278	)		(4,983	)		(1,151	)
Realization of cash flow hedging net loss upon settlement		516			256			1,151			504			1,045			248			2,196			752
Other-than-temporary impairment of investment		—			350			—			350			-			-			-			350
Foreign currency translation adjustments		(100	)		(32	)		(170	)		(178	)		(992	)		318			(1,162	)		140

Other comprehensive income (loss), before tax		768			1,511			(1,693	)		803
Income tax (expense) benefit related to other comprehensive income (loss)		(206	)		(346	)		438			(165	)
Other comprehensive (loss) income, before tax														(2,256	)		(712	)		(3,949	)		91
Income tax benefit related to other comprehensive (loss) income														558			194			996			29

Other comprehensive income (loss), net of tax		562			1,165			(1,255	)		638
Other comprehensive (loss) income, net of tax														(1,698	)		(518	)		(2,953	)		120

Comprehensive income		26,942			14,944			26,610			14,996			8,816			4,779			35,426			19,775
Less: Comprehensive income attributable to non-controlling interests		(2,047	)		(469	)		(3,136	)		(469	)		(2,056	)		(467	)		(5,192	)		(936	)

Comprehensive income attributable to Common Shareholders	$	24,895		$	14,475		$	23,474		$	14,527		$	6,760		$	4,312		$	30,234		$	18,839

(the accompanying notes are an integral part of these condensed consolidated financial statements)


	Six Months Ended June 30,
	2015			2014			Nine Months Ended September 30,
Cash provided by (used in):							2015			2014
Operating Activities
Net income	$	27,865		$	14,358		$	38,379		$	19,655
Net income from discontinued operations		—			(355	)		-			(355	)
Adjustments to reconcile net income to cash from operations:
Depreciation and amortization		20,724			15,945			31,191			23,937
Write-downs, net of recoveries		1,457			1,579			2,928			1,753
Change in deferred income taxes		2,232			2,789			5,097			3,157
Stock and other non-cash compensation		10,861			8,090			15,204			11,609
Unrealized foreign currency exchange loss		851			64			716			847
Loss from equity-accounted investments		1,923			574			2,756			1,073
Gain on non-cash contribution to equity-accounted investees		(740	)		—			(1,146	)		(352	)
Investment in film assets		(7,404	)		(5,147	)		(12,069	)		(8,398	)
Changes in other non-cash operating assets and liabilities		(39,271	)		(3,219	)		(41,256	)		18,372
Net cash provided by operating activities from discontinued operations		—			572			-			572

Net cash provided by operating activities		18,498			35,250			41,800			71,870


Investing Activities
Purchase of property, plant and equipment		(34,920	)		(16,581	)		(38,443	)		(24,686	)
Investment in joint revenue sharing equipment		(11,613	)		(10,801	)		(20,969	)		(15,908	)
Investment in new business ventures								(2,000	)		(2,500	)
Acquisition of other intangible assets		(2,972	)		(970	)		(3,622	)		(1,979	)

Net cash used in investing activities		(49,505	)		(28,352	)		(65,034	)		(45,073	)


Financing Activities
Issuance of subsidiary shares to a non-controlling interest		40,000			40,491			40,000			40,491
Share issuance costs from the issuance of subsidiary shares to a non-controlling interest		(2,000	)		(3,556	)		(2,000	)		(3,556	)
Common shares issued — stock options exercised		22,850			2,657
Exercise of stock options								23,838			3,672
Increase in bank indebtedness		17,568			—			17,568			-
Credit facility amendment fees paid		(1,161	)		—			(1,310	)		-
Treasury stock purchased for future settlement of restricted share units		(1,214	)		—
Settlement of restricted share units		(4,988	)		(790	)
Repurchase of common shares								(34,279	)		(2,369	)
Treasury stock purchased for settlement of share based compensation								(10,000	)		(790	)

Net cash provided by financing activities		71,055			38,802			33,817			37,448


Effects of exchange rate changes on cash		(168	)		(159	)		275			(86	)


Increase in cash and cash equivalents during the period		39,880			45,541			10,858			64,159

Cash and cash equivalents, beginning of period		106,503			29,546			106,503			29,546

Cash and cash equivalents, end of period	$	146,383		$	75,087		$	117,361		$	93,705

(the accompanying notes are an integral part of these condensed consolidated financial statements)

IMAX Corporation, together with its subsidiaries (the “Company”), prepares its financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”).

The condensed consolidated financial statements include the accounts of the Company together with its subsidiaries, except for subsidiaries which the Company has identified as variable interest entities (“VIEs”) where the Company is not the primary beneficiary. The nature of the Company’s business is such that the results of operations for the interim periods presented are not necessarily indicative of results to be expected for the fiscal year. In the opinion of management, the information contained herein reflects all normal and recurring adjustments necessary to make the results of operations for the interim periods a fair statement of such operations.

The Company has evaluated its various variable interests to determine whether they are VIEs as required by the Consolidation Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC” or “Codification”). The Company has 1011 film production companies that are VIEs. For 45 of the Company’s film production companies, the Company has determined that it is the primary beneficiary of these entities as the Company has the power to direct the activities of the respective VIE that most significantly impact the respective VIE’s economic performance and has the obligation to absorb losses of the VIE that could potentially be significant to the respective VIE or the right to receive benefits from the respective VIE that could potentially be significant to the respective VIE. These consolidated production companies have total assets of $7.2 million (December 31, 2014 — $7.7 million) and total liabilities of $0.3 million as at ~~June~~September 30, 2015 (December 31, 2014 — $0.3 million). The majority of these consolidated assets are held by the IMAX Original Film Fund (the “Film Fund”) as described in note 16(b). For the other 6 film production companies which are VIEs, the Company did not consolidate these film entities since it does not have the power to direct activities and does not absorb the majority of the expected losses or expected residual returns. The Company equity accounts for these entities. As at ~~June~~September 30, 2015, these 6 VIEs have total assets of ~~$0.4~~$0.5 million (December 31, 2014 — $0.4 million) and total liabilities of ~~$0.5~~$0.4 million (December 31, 2014 — $0.4 million). Earnings of the investees included in the Company’s condensed consolidated statement of operations amounted to $nil and $nil for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — $nil and $nil, respectively). The carrying value of these investments in VIEs that are not consolidated is $nil at ~~June~~September 30, 2015 (December 31, 2014 — $nil). The Company’s exposure, which is determined based on the level of funding contributed by the Company and the development stage of the respective film, is $nil at ~~June~~September 30, 2015 (December 31, 2014 — $nil).

The Company accounts for investments in new business ventures using the guidance of the FASB ASC 323 “Investments —– Equity Method and Joint Ventures” (“ASC 323”) or ASC 320 “Investments in Debt and Equity Securities” (“ASC 320”), as appropriate.

All significant intercompany accounts and transactions, including all unrealized intercompany profits on transactions with equity-accounted investees, have been eliminated.

The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.

These interim financial statements should be read in conjunction with the consolidated financial statements included in the Company’s 2014 Annual Report on Form 10-K for the year ended December 31, 2014 (“the 2014 Form 10-K”) which should be consulted for a summary of the significant accounting policies utilized by the Company. These interim financial statements are prepared following accounting policies consistent with the Company’s financial statements for the year ended December 31, 2014, except as noted below.

In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory” (“ASU 2015-11). The purpose of the amendment is to more closely align the measurement of inventory in U.S. GAAP with the measurement

of inventory in International Financial Reporting Standards. The clarifications are not intended to result in any changes in practice and to reduce the complexity in guidance on the subsequent measurement of inventory. This standard only applies to inventory being measured using the first-in, first-out or average cost methods of accounting for inventory. For public entities, the amendments are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2015-11 on its condensed consolidated financial statements.

In August 2015, the FASB issued ASU No. 2015-14, “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” (“ASU 2015-14”). The purpose of the amendment is to defer the effective date of ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”) for all entities by one year. For public entities, the amendments in ASU 2014-09 are effective for interim and annual reporting periods beginning after December 15, 2017. The company is currently assessing the impact of ASU 2014-09 on its condensed consolidated financial statements.

The adoption of new accounting policies and recently issued FASB accounting standard codification updates, except for ASU 2015-11 and ASU 2015-14, were not material to the Company’s condensed consolidated financial statements for the period ended ~~June~~September 30, 2015.

Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales of theater systems are as follows:


	June 30, 2015			December 31, 2014				September 30, 2015			December 31, 2014
Gross minimum lease payments receivable	$	14,134		$	13,928			$	14,634		$	13,928
Unearned finance income		(2,540	)		(2,357	)			(2,602	)		(2,357	)

Minimum lease payments receivable		11,594			11,571		��		12,032			11,571
Accumulated allowance for uncollectible amounts		(972	)		(972	)			(972	)		(972	)

Net investment in leases		10,622			10,599				11,060			10,599

Gross financed sales receivables		132,830			131,155				141,508			131,155
Unearned finance income		(34,466	)		(35,560	)			(38,090	)		(35,560	)

Financed sales receivables		98,364			95,595				103,418			95,595
Accumulated allowance for uncollectible amounts		(494	)		(494	)			(494	)		(494	)

Net financed sales receivables		97,870			95,101				102,924			95,101

Total financing receivables	$	108,492		$	105,700			$	113,984		$	105,700

Net financed sales receivables due within one year	$	18,368		$	15,544			$	18,906		$	15,544
Net financed sales receivables due after one year	$	79,502		$	79,557			$	84,018		$	79,557

As at ~~June~~September 30, 2015, the financed sale receivables had a weighted average effective interest rate of ~~9.8% (June~~9.7% (September 30, 2014 — 10.2%).


	June 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
Raw materials	$	19,094	$	9,147	$	19,994	$	9,147
Work-in-process		3,687		1,211		1,870		1,211
Finished goods		11,405		6,705		13,698		6,705

	$	34,186	$	17,063	$	35,562	$	17,063

At ~~June~~September 30, 2015, finished goods inventory for which title had passed to the customer and revenue was deferred amounted to ~~$4.8~~$7.0 million (December 31, 2014 — $1.4 million).

During the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company had write-downs for excess and obsolete inventory based upon current estimates of net realizable value considering future events of a recovery of $0.1 million and ~~conditions~~an expense of $0.4 million, ~~and $0.5 million,~~ respectively (2014 — expense of less than $0.1 million and ~~less than~~expense of $0.1 million, respectively).


	As at December 31, 2014						As at September 30, 2015
	Cost		Accumulated Depreciation		Net Book Value		Cost		Accumulated Depreciation		Net Book Value
Equipment leased or held for use
Theater system components	$	179,236	$	63,862	$	115,374	$	191,026	$	74,617	$	116,409
Camera equipment		5,253		2,874		2,379		5,342		3,249		2,093

		184,489		66,736		117,753		196,368		77,866		118,502

Assets under construction		43,250		—		43,250		16,513		-		16,513

Other property, plant and equipment
Land		8,180		—		8,180		8,201		-		8,201
Buildings		16,584		10,998		5,586		65,116		12,168		52,948
Office and production equipment		27,996		19,659		8,337		36,852		20,749		16,103
Leasehold improvements		9,937		9,619		318		3,027		2,327		700

		62,697		40,276		22,421		113,196		35,244		77,952

	$	290,436	$	107,012	$	183,424	$	326,077	$	113,110	$	212,967


							As at December 31, 2014
							Cost		Accumulated Depreciation		Net Book Value
Equipment leased or held for use
Theater system components							$	179,236	$	63,862	$	115,374
Camera equipment								5,253		2,874		2,379

								184,489		66,736		117,753

Assets under construction								43,250		-		43,250

Other property, plant and equipment
Land								8,180		-		8,180
Buildings								16,584		10,998		5,586
Office and production equipment								27,996		19,659		8,337
Leasehold improvements								9,937		9,619		318

								62,697		40,276		22,421

							$	290,436	$	107,012	$	183,424


	As at December 31, 2014						As at September 30, 2015
	Cost		Accumulated Amortization		Net Book Value		Cost		Accumulated Amortization		Net Book Value
Patents and trademarks	$	9,686	$	5,967	$	3,719	$	10,257	$	6,402	$	3,855
Licenses and intellectual property		20,490		4,867		15,623		21,990		6,092		15,898
Other		9,873		1,664		8,209		11,324		2,358		8,966

	$	40,049	$	12,498	$	27,551	$	43,571	$	14,852	$	28,719


							As at December 31, 2014
							Cost		Accumulated Amortization		Net Book Value
Patents and trademarks							$	9,686	$	5,967	$	3,719
Licenses and intellectual property								20,490		4,867		15,623
Other								9,873		1,664		8,209

							$	40,049	$	12,498	$	27,551

Other intangible assets of ~~$10.8~~$11.3 million are comprised mainly of the Company’s investment in an enterprise resource planning system. Fully amortized other intangible assets are still in use by the Company.

During the ~~six~~nine months ended ~~June~~September 30, 2015, the Company acquired ~~$2.7~~$3.5 million in other intangible assets. The weighted average amortization period for these additions was 10 years.

During the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company incurred costs of less than $0.1 million and less than $0.1 million, respectively, to renew or extend the term of acquired other intangible assets which were recorded in selling, general and administrative expenses (2014 —– less than $0.1 million and ~~less than~~ $0.1 million, respectively).

As at ~~June~~September 30, 2015, estimated amortization expense for each of the years ended December 31, are as follows:


2015 (six months remaining)	$	1,406
2015 (three months remaining)			$	733
2016		2,864		2,932
2017		2,864		2,932
2018		2,864		2,932
2019		2,864		2,932

On March 3, 2015, the Company amended and restated the terms of its existing senior secured credit facility (the “Prior Credit Facility”) in order to, among other things, eliminate the fixed charge coverage ratio under the Prior Credit Facility and reset certain financial maintenance covenants. The amended and restated facility (the “Credit Facility”), with a scheduled maturity of March 3, 2020, has a maximum borrowing capacity of $200.0 million, the same maximum borrowing capacity as under the Prior Credit Facility. Certain of the Company’s subsidiaries serve as guarantors (the “Guarantors”) of the Company’s obligations under the Credit Facility. The Credit Facility is collateralized by a first priority security interest in substantially all of the present and future assets of the Company and the Guarantors.

The terms of the Credit Facility are set forth in the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), dated March 3, 2015, among the Company, the Guarantors, the lenders named therein, Wells Fargo Bank, National Association (“Wells Fargo”), as agent and issuing lender (Wells Fargo, together with the lenders named therein, the “Lenders”) and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner and in various collateral and security documents entered into by the Company and the Guarantors. Each of the Guarantors has also entered into a guarantee in respect of the Company’s obligations under the Credit Facility.

The Company was in compliance with all of its requirements at ~~June~~September 30, 2015.

Total amounts drawn and available under the Credit Facility at ~~June~~September 30, 2015 were $nil and $200.0 million, respectively (December 31, 2014 — $nil and $200.0 million, respectively).

As at ~~June~~September 30, 2015, the Company did not have any letters of credit and advance payment guarantees outstanding (December 31, 2014 — $nil), under the Credit Facility.

On October 6, 2014, IMAX PV Development Inc., a Delaware corporation (“PV Borrower”) and direct wholly-owned subsidiary of IMAX U.S.A. Inc., a Delaware corporation and direct wholly-owned subsidiary of the Company, entered into a construction loan agreement with Wells Fargo. The construction loan ~~is being used to fund up to $25.7 million~~ (the “Playa Vista Loan”) was used to fund $22.3 million of the costs of development and construction of the ~~new~~ West Coast headquarters of the Company, located ~~in a new office facility~~ in the Playa Vista neighborhood of Los Angeles, California (the “Playa Vista Project”).

The total cost of development of the Playa Vista Project iswas approximately ~~$52.0~~$54.0 million, with all costs in excess of the Playa Vista Loan ~~being~~ provided through funding by the Company. The Company began occupying the Playa Vista facility in March of 2015.

On October 19, 2015, PV Borrower converted the Playa Vista Loan from a construction loan into a permanent loan pursuant to the terms of the loan documents. Pursuant to the conversion, PV Borrower increased the principal balance of the loan by an additional $7.7 million, to $30.0 million. Prior to the conversion, the Playa Vista Loan bore interest at a variable interest rate per annum equal to 2.25% above the 30-day LIBOR rate, and PV Borrower was required to make monthly payments of interest only. However, as a result of the conversion, the interest rate decreased from 2.25% to 2.0% above the 30-day LIBOR rate, and PV Borrower will be required to make monthly payments of combined principal and interest over a 10-year term with a lump sum payment at the end of year 10. The loan is being amortized over 15 years. The Playa Vista Loan will be fully due and payable on October 19, 2025 (the “Maturity Date”), and may be prepaid at any time without premium, but with all accrued interest and other applicable payments.

The Playa Vista Loan is secured by a deed of trust from PV Borrower in favor of Wells Fargo, granting a first lien on and security interest in the Playa Vista property and the Playa Vista Project, including all improvements to be constructed thereon, and other documents evidencing and securing the loan (the “Loan Documents”). The Loan Documents include absolute and unconditional payment and completion guarantees provided by the Company to Wells Fargo for the performance by PV Borrower of all the terms and provisions of the Playa Vista Loan and ~~the construction and completion of the Playa Vista Project, and~~ an environmental indemnity also provided by the Company.

~~Unless converted from a construction to permanent loan as described below, the Playa Vista Loan will be fully due and payable on April 6, 2016 (the “Maturity Date”).~~

Absent a default, the Playa Vista Loan bears interest at a variable interest rate per annum equal to 2.25% above the 30-day LIBOR rate. The interest rate is subject to adjustment monthly based on the latest 30-day LIBOR rate. Prior to the Maturity Date, PV Borrower is required to make monthly payments of interest only. The Playa Vista Loan may be prepaid at any time without premium, but with all accrued interest and other applicable payments.

~~The Loan Documents require the completion of construction no later than 90 days prior to the Maturity Date, subject to delays for certain unforeseeable events.~~ The Loan Documents contain affirmative, negative and financial covenants (including compliance with the financial covenants of the Company’s outstanding revolving and term senior secured facility with Wells Fargo), agreements,

representations, warranties, borrowing conditions, and events of default customary for development projects such as the Playa Vista Project.

PV Borrower has the right to convert the Playa Vista Loan from a construction to a permanent loan with a term of 120 months (from the date of conversion), subject to the satisfaction of certain conditions including completion of the Playa Vista Project. If PV Borrower converts the Playa Vista Loan to a permanent loan, PV Borrower will have the right, subject to certain conditions, to increase the principal balance of the loan up to but not in excess of $30.0 million. Upon conversion, the interest rate under the permanent loan will decrease from 2.25% to 2.0% above the 30-day LIBOR rate and PV Borrower will be required to make monthly payments of combined principal and interest sufficient to fully amortize the loan based on a 15-year straight line amortization.

Total amounts drawn and available under the construction loan at ~~June~~September 30, 2015 were $22.3 million and $3.4 million, respectively (December 31, 2014 — $4.7 million and $21.0 million, respectively). Under the Playa Vista Loan, the effective interest rate for the three and ~~six~~nine months ended ~~June~~September 30, 2015 was ~~2.43%~~2.45% and ~~2.43%~~2.44%, respectively (2014 — n/a).

~~In accordance with the loan agreement, assuming the loan was not converted to a permanent loan, the Company is obligated to make payments on the principal of the construction loan as follows:~~

Within the Credit Facility, the Company is able to purchase foreign currency forward contracts and/or other swap arrangements. The settlement risk on its foreign currency forward contracts was ~~$3.3~~$4.5 million as at ~~June~~September 30, 2015 as the notional value exceeded the fair value of the forward contracts. As at ~~June~~September 30, 2015, the Company has ~~$37.0~~$36.7 million of such arrangements outstanding which are considered a hedge against the Canadian dollar.

As at ~~June~~September 30, 2015, the Company has available a $10.0 million facility (December 31, 2014 — $10.0 million) with the Bank of Montreal for use solely in conjunction with the issuance of performance guarantees and letters of credit fully insured by EDC (the “Bank of Montreal Facility”). As at ~~June~~September 30, 2015, the Company has letters of credit and advance payment guarantees outstanding of $0.3 million (December 31, 2014 — $0.3 million) under the Bank of Montreal Facility.

The Company is involved in lawsuits, claims, and proceedings, including those identified below, which arise in the ordinary course of business. In accordance with the Contingencies Topic of the FASB ASC, the Company will make a provision for a liability when it is both probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company believes it has adequate provisions for any such matters. The Company reviews these provisions in conjunction with any related provisions on assets related to the claims at least quarterly and adjusts these provisions to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other pertinent information related to the case. Should developments in any of these matters outlined below cause a change in the Company’s determination as to an unfavorable outcome and result in the need to recognize a material provision, or, should any of these matters result in a final adverse judgment or be settled for significant amounts, they could have a material adverse effect on the Company’s results of operations, cash flows, and financial position in the period or periods in which such a change in determination, settlement or judgment occurs.

The Company expenses legal costs relating to its lawsuits, claims and proceedings as incurred.

(a) In March 2005, the Company, together with Three-Dimensional Media Group, Ltd. (“3DMG”), filed a complaint in the U.S. District Court for the Central District of California, Western Division, against In-Three, Inc. (“In-Three”) alleging patent infringement. On March 10, 2006, the Company and In-Three entered into a settlement agreement settling the dispute between the Company and In-Three. Despite the settlement reached between the Company and In-Three, co-plaintiff 3DMG refused to dismiss its claims against In-Three. Accordingly, the Company and In-Three moved jointly for a motion to dismiss the Company’s and In-Three’s claims. On August 24, 2010, the Court dismissed all of the claims pending between the Company and In-Three, thus dismissing the Company from the litigation.

On May 15, 2006, the Company initiated arbitration against 3DMG before the International Centre for Dispute Resolution in New York (the “ICDR”), alleging breaches of the license and consulting agreements between the Company and 3DMG. On June 15, 2006, 3DMG filed an answer denying any breaches and asserting counterclaims that the Company breached the parties’ license agreement. On June 21, 2007, the ICDR unanimously denied 3DMG’s Motion for Summary Judgment filed on April 11, 2007 concerning the Company’s claims and 3DMG’s counterclaims. The proceeding was suspended on May 4, 2009 due to failure of 3DMG to pay fees associated with the proceeding. The proceeding was further suspended on October 11, 2010 pending resolution of reexamination proceedings currently pending involving one of 3DMG’s patents. The Company will continue to pursue its claims vigorously and believes that all allegations made by 3DMG are without merit. The Company further believes that the amount of loss, if any, suffered in connection with the counterclaims would not have a material impact on the financial position or results of operations of the Company, although no assurance can be given with respect to the ultimate outcome of the arbitration.

(b) In January 2004, the Company and IMAX Theatre Services Ltd., a subsidiary of the Company, commenced an arbitration seeking damages before the International Court of Arbitration of the International Chamber of Commerce (the “ICC”) with respect to the breach by Electronic Media Limited (“EML”) of its December 2000 agreement with the Company. In June 2004, the Company commenced a related arbitration before the ICC against EML’s affiliate, E-City Entertainment (I) PVT Limited (“E-City”). On March 27, 2008, the arbitration panel issued a final award in favor of the Company in the amount of $11.3 million, consisting of past and future rents owed to the Company, plus interest and costs, as well as an additional $2,512 each day in interest from October 1, 2007 until the date the award is paid. In July 2008, E-City commenced a proceeding in Mumbai, India seeking an order that the ICC award may not be recognized in India. The Company has opposed that application on a number of grounds and seeks to have the ICC award recognized in India. On June 13, 2013, the Bombay High Court ruled that it has jurisdiction over the proceeding but on November 19, 2013, the Supreme Court of India stayed proceedings in the High Court pending Supreme Court review of the High Court’s ruling. On June 24, 2011, the Company commenced a proceeding in the Ontario Superior Court of Justice for recognition of the ICC final award. On December 2, 2011, the Ontario Court issued an order recognizing the final award and requiring E-City to pay the Company $30,000 to cover the costs of the application. In January 2013, the Company filed an action in the New York Supreme Court seeking to collect the amount owed to the Company by certain entities and individuals affiliated with ~~E-City, and on July 11, 2014, the Company moved to amend its petition in~~E-City. On October 16, 2015, the New York ~~matter to have the Canadian judgment recognized as part of this proceeding. The Respondents in the New York action have answered and objected to~~Supreme Court denied the Company’s ~~petition, and they have moved to dismiss for improper service of process.~~petition. On July 29, 2014, the Company commenced a separate proceeding to have the Canadian judgment against E-City recognized in New ~~York.~~York, and on October 2, 2015, the New York Supreme Court granted IMAX’s request, recognizing the Canadian judgment and entering it as a New York judgment. On November 26, 2014, E-City filed a motion in the Bombay High Court seeking to enjoin IMAX from continuing the New York legal proceedings. On February 2, 2015, the Bombay High Court denied E-City’s request for an ad interim injunction. On March 16, 2015, E-City filed an appeal of this Bombay High Court decision.

(c) The Company and certain of its officers and directors were named as defendants in eight purported class action lawsuits filed between August 11, 2006 and September 18, 2006, alleging violations of U.S. federal securities laws. These eight actions were filed in the U.S. District Court for the Southern District of New York (the “Court”) and were subsequently consolidated by the Court. The plaintiffs filed a consolidated amended class action complaint on October 2, 2007, which added PricewaterhouseCoopers LLP, the Company’s auditors, as a defendant. The amended complaint, brought on behalf of shareholders who purchased the Company’s common stock on the NASDAQ between February 27, 2003 and July 20, 2007 (the “U.S. Class”), alleged primarily that the defendants engaged in securities fraud by disseminating materially false and misleading statements during the class period regarding the Company’s revenue recognition of theater system installations, and failing to disclose material information concerning the Company’s revenue recognition practices. On March 26, 2012, the parties executed and filed with the Court an amended formal stipulation of settlement and proposed form of notice to the class. On June 20, 2012, the Court issued an order granting final approval of the settlement. Under the terms of the settlement, members of the U.S. Class who did not opt out of the settlement released defendants from liability for all claims that were alleged in this action or could have been alleged in this action or any other proceeding (including the action in Canada as described in (d) of this note relating to the purchase of the Company’s securities on the NASDAQ between February 27, 2003 and July 20, 2007) or the subject matter and facts relating to this action. As part of the settlement and in exchange for the release, defendants agreed to pay $12.0 million to a settlement fund which amount was funded by the carriers of the Company’s directors and officers insurance policy and by PricewaterhouseCoopers LLP. The settlement was distributed to the U.S. Class on May 5, 2014.

~~(d)~~ A class action lawsuit was filed on September 20, 2006 in the Canadian Court against the Company and certain of its officers and directors, alleging violations of Canadian securities laws. This lawsuit was brought on behalf of shareholders who acquired the Company’s securities between February 17, 2006 and August 9, 2006. The lawsuit seeks $210.0 million in compensatory and punitive damages, as well as costs. For reasons released December 14, 2009, the Canadian Court granted leave to the plaintiffs to amend their statement of claim to plead certain claims pursuant to the Securities Act (Ontario) against the Company and certain individuals (“the Defendants”) and granted certification of the action as a class proceeding. These are procedural decisions, and do not contain any conclusions binding on a judge at trial as to the factual or legal merits of the claim. Leave to appeal those decisions was denied. In March 2013, the Defendants obtained an Order enforcing the settlement Order in ~~the~~a parallel class action in the United States in this Canadian class action lawsuit, with the result that the class in this case was reduced in size by approximately 85%. The United States class action was conclusively settled in May 2014 for $12.0 million. A motion by the Plaintiffs for leave to appeal that Order was dismissed. The Company believes the allegations made against it in the statement of claim are meritless and will vigorously defend the matter, although no assurance can be given with respect to the ultimate outcome of such proceedings. The Company’s directors’ and officers’ insurance policy provides for reimbursement of costs and expenses incurred in connection with this lawsuit as well as potential damages awarded, if any, subject to certain policy limits, exclusions and deductibles.

~~(e)~~(d) In November 2013, a purported class action complaint was filed in the United States District Court for the Northern District of Illinois (the “Court”) against IMAX Chicago Theatre LLC (“IMAX Chicago Theatre”), a subsidiary of the Company. The plaintiff, Scott Redman, alleges that IMAX Chicago Theatre provided certain credit card and debit card receipts to customers that were purportedly not in compliance with the applicable truncation requirements of the Fair and Accurate Credit Transactions Act. The plaintiff seeks statutory damages individually and on behalf of a putative class. On February 20, 2014, IMAX Chicago Theatre filed a motion to dismiss the complaint, which the Court denied on January 23, 2015. Discovery is ongoing in this matter. IMAX Chicago Theatre believes that it has meritorious defenses and intends to defend the lawsuit vigorously.

~~(f)~~(e) In March 2013, IMAX (Shanghai) Multimedia Technology Co., Ltd., the Company’s majority-owned subsidiary in China, received notice from the Shanghai office of the General Administration of Customs that it had been selected for a customs audit. The Company is unable to assess the potential impact, if any, of the audit at this time.

~~(g)~~(f) On November 11, 2013, Giencourt Investments, S.A. (“Giencourt”) initiated arbitration before the International Centre for Dispute Resolution in Miami, Florida. Giencourt submitted its statement of claim in January 2015, ~~and~~ the Company submitted its statement of defense and counterclaim in April 2015 and Giencourt submitted its arbitration reply paper in September 2015. Based on Giencourt’s September 2015 reply papers, Giencourt seeks monetary damages in the amount of up to approximately ~~$11.5~~$18.0 million and other relief relating to the Company’s alleged breaches of its theater agreement and related license agreement with Giencourt. The Company has asserted a counterclaim against Giencourt for breach of contract and seeks to recover lost profits in excess of $24.0 million under the agreements. A hearing on the merits is scheduled to occur in December 2015. Although no assurances can be given with respect to the ultimate outcome of the proceedings, the Company believes that it has meritorious defenses and claims, and will continue to vigorously pursue them.

~~(h)~~(g) In addition to the matters described above, the Company is currently involved in other legal proceedings or governmental inquiries which, in the opinion of the Company’s management, will not materially affect the Company’s financial position or future operating results, although no assurance can be given with respect to the ultimate outcome of any such proceedings.

~~(i)~~(h) In the normal course of business, the Company enters into agreements that may contain features that meet the definition of a guarantee. The Guarantees Topic of the FASB ASC defines a guarantee to be a contract (including an indemnity) that contingently requires the Company to make payments (either in cash, financial instruments, other assets, shares of its stock or provision of services) to a third party based on (a) changes in an underlying interest rate, foreign exchange rate, equity or commodity instrument, index or other variable, that is related to an asset, a liability or an equity security of the counterparty, (b) failure of another party to perform under an obligating agreement or (c) failure of another third party to pay its indebtedness when due.

The following summarizes the accrual for product warranties that was recorded as part of accrued liabilities in the condensed consolidated balance sheets:


	June 30, 2015			December 31, 2014			September 30, 2015			December 31, 2014
Balance at the beginning of period	$	6		$	7		$	6		$	7
Warranty redemptions		(6	)		(5	)		(6	)		(5	)
Warranties issued		—			11			-			11
Revisions		—			(7	)		-			(7	)

Balance at the end of period	$	—		$	6		$	-		$	6

The Company’s General By-law contains an indemnification of its directors/officers, former directors/officers and persons who have acted at its request to be a director/officer of an entity in which the Company is a shareholder or creditor, to indemnify them, to the extent permitted by theCanada Business Corporations Act, against expenses (including legal fees), judgments, fines and any amount actually and reasonably incurred by them in connection with any action, suit or proceeding in which the directors and/or officers are sued as a result of their service, if they acted honestly and in good faith with a view to the best interests of the Company. The nature of the indemnification prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counterparties. The Company has purchased directors’ and officers’ liability insurance. No amount has been accrued in the condensed consolidated balance sheet as at ~~June~~September 30, 2015 and December 31, 2014 with respect to this indemnity.

In the normal course of the Company’s operations, the Company provides indemnifications to counterparties in transactions such as: theater system lease and sale agreements and the supervision of installation or servicing of the theater systems; film production, exhibition and distribution agreements; real property lease agreements; and employment agreements. These indemnification agreements require the Company to compensate the counterparties for costs incurred as a result of litigation claims that may be suffered by the counterparty as a consequence of the transaction or the Company’s breach or non-performance under these agreements. While the terms of these indemnification agreements vary based upon the contract, they normally extend for the life of the agreements. A small number of agreements do not provide for any limit on the maximum potential amount of indemnification; however, virtually all of the Company’s system lease and sale agreements limit such maximum potential liability to the purchase price of the system. The fact that the maximum potential amount of indemnification required by the Company is not specified in some cases prevents the Company from making a reasonable estimate of the maximum potential amount it could be required to pay to counterparties. Historically, the Company has not made any significant payments under such indemnifications and no amounts have been accrued in the condensed consolidated financial statements with respect to the contingent aspect of these indemnities.

The Company defers direct selling costs such as sales commissions and other amounts related to its sale and sales-type lease arrangements until the related revenue is recognized. These costs and direct advertising and marketing, included in costs and expenses applicable to revenues-equipment and product sales, totaled ~~$0.6~~$1.3 million and ~~$1.1~~$2.8 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — ~~$0.7~~$0.6 million and ~~$0.9~~$1.5 million, respectively).

Film exploitation costs, including advertising and marketing, totaled ~~$3.6~~$3.4 million and ~~$4.8~~$8.2 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — ~~$2.2~~$2.4 million and ~~$3.6~~$6.0 million, respectively) and are recorded in costs and expenses applicable to revenues-services as incurred.

Commissions are recognized as costs and expenses applicable to revenues-rentals in the month they are earned. These costs totaled $0.3 million and ~~$0.2~~$0.5 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — ~~$0.5~~$0.2 million and ~~$0.5~~$0.7 million, respectively). Direct advertising and marketing costs for each theater are charged to costs and expenses applicable to revenues-rentals as incurred. These costs totaled $0.6 million and ~~$0.6~~$1.2 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — ~~$0.5~~$0.4 million and ~~$0.7~~$1.1 million, respectively).

Included in selling, general and administrative expenses for the three and ~~six~~nine months ended ~~June~~September 30, 2015 is a ~~gain~~loss of ~~$0.6~~$0.5 million and a loss of ~~$1.0~~$1.5 million, respectively (2014 — ~~gain~~loss of ~~$0.7~~$1.1 million and ~~gain~~a loss of ~~less than $0.1~~$1.0 million, respectively) for net foreign exchange gains/losses related to the translation of foreign currency denominated monetary assets and liabilities. See note 15(d) for additional information.

In a joint revenue sharing arrangement, the Company receives a portion of a theater’s box-office and concession revenues and in some cases a small upfront or initial payment, in exchange for placing a theater system at the theater operator’s venue. Under joint revenue sharing arrangements, the customer has the ability and the right to operate the hardware components or direct others to operate them in a manner determined by the customer. The Company’s joint revenue sharing arrangements are typically non-cancellable for 10 years or longer with renewal provisions. Title to equipment under joint revenue sharing arrangements generally does not transfer to the customer. The Company’s joint revenue sharing arrangements do not contain a guarantee of residual value at the end of the term. The customer is required to pay for executory costs such as insurance and taxes and is required to pay the Company for maintenance and extended warranty throughout the term. The customer is responsible for obtaining insurance coverage for the theater systems commencing on the date specified in the arrangement’s shipping terms and ending on the date the theater systems are delivered back to the Company.

The Company has signed joint revenue sharing agreements with 43 exhibitors for a total of ~~687~~707 theater systems, of which ~~477~~498 theaters were operating as at ~~June~~September 30, 2015, the terms of which are similar in nature, rights and obligations. The accounting policy for the Company’s joint revenue sharing arrangements is disclosed in note 2(m) of the Company’s 2014 Form 10-K.

Amounts attributable to transactions arising between the Company and its customers under joint revenue sharing arrangements are included in Equipment and Product Sales and Rentals revenue and, for the three and ~~six~~nine months ended ~~June~~September 30, 2015, amounted to ~~$31.6~~$19.8 million and ~~$47.5~~$67.3 million, respectively (2014 — ~~$19.4~~$15.3 million and ~~$30.2~~$45.5 million, respectively).

In an IMAX DMR arrangement, the Company transforms conventional motion pictures into the Company’s large screen format, allowing the release of Hollywood content to the global IMAX theater network. In a typical IMAX DMR film arrangement, the Company will absorb its costs for the digital re-mastering and then recoup this cost from a percentage of the gross box-office receipts of the film, which generally range from 10-15%. The Company does not typically hold distribution rights or the copyright to these films.

For the ~~six~~nine months ended ~~June~~September 30, 2015, the majority of IMAX DMR revenue was earned from the exhibition of 3348 IMAX DMR films (2014 — ~~26)~~36) throughout the IMAX theater network. The accounting policy for the Company’s IMAX DMR arrangements is disclosed in note 2(m) of the Company’s 2014 Form 10-K.

Amounts attributable to transactions arising between the Company and its customers under IMAX DMR arrangements are included in Services revenue and for the three and ~~six~~nine months ended ~~June~~September 30, 2015 amounted to ~~$36.6~~$20.9 million and ~~$54.3~~$75.1 million, respectively (2014 — ~~$24.0~~$18.4 million and ~~$39.2~~$57.6 million, respectively).

In certain film arrangements, the Company co-produces a film with a third party whereby the third party retains the copyright and rights to the film, except that the Company obtains exclusive theatrical distribution rights to the film. Under these arrangements, both parties contribute funding to the Company’s wholly-owned production company for the production of the film and for associated exploitation costs. Clauses in the film arrangements generally provide for the third party to take over the production of the film if the cost of the production exceeds its approved budget or if it appears as though the film will not be delivered on a timely basis.

The accounting policies relating to co-produced film arrangements are disclosed in notes 2(a) and 2(m) of the Company’s 2014 Form 10-K.

As at ~~June~~September 30, 2015, the Company has one significant co-produced film arrangement which primarily represents the VIE total assets balance of ~~$0.4~~$0.5 million and total liabilities balance of ~~$0.5~~$0.4 million and 5 other co-produced film arrangements, the terms of which are similar.

For the three and ~~six~~nine months ended ~~June~~September 30, 2015, amounts totaling ~~$0.5~~$0.3 million and ~~$1.1~~$1.4 million, respectively (2014 — ~~$1.3~~$1.2 million and ~~$1.9~~$3.1 million, respectively) attributable to transactions between the Company and other parties involved in the production of the films have been included in cost and expenses applicable to revenues-services.

(a) Changes in other non-cash operating assets and liabilities are comprised of the following:


					Nine Months Ended September 30,
					2015			2014
Decrease (increase) in:
Accounts receivable					$	(12,048	)	$	12,891
Financing receivables						(9,932	)		3,301
Inventories						(18,904	)		(11,725	)
Prepaid expenses						(2,159	)		(1,781	)
Commissions and other deferred selling expenses						(206	)		(804	)
Insurance recoveries						28			11,045
Other assets						(2,388	)		(2,586	)
Increase (decrease) in:
Accounts payable						4,212			(2,824	)
Accrued and other liabilities						(17,751	)		(12,983	)
Deferred revenue						17,892			23,838

					$	(41,256	)	$	18,372


(b) Cash payments made on account of:

					Nine Months Ended September 30,
					2015			2014
Income taxes					$	21,542		$	5,719

Interest					$	302		$	-


(c) Depreciation and amortization are comprised of the following:

	Six Months Ended June 30,				Nine Months Ended September 30,
	2015		2014		2015			2014
Film assets	$	8,243	$	5,343	$	11,917		$	7,989
Property, plant and equipment
Joint revenue sharing arrangements		6,575		5,852		10,043			8,928
Other property, plant and equipment		3,585		2,676		5,635			3,840
Other intangible assets		1,544		1,468		2,354			2,244
Other assets		381		343		579			542
Deferred financing costs		396		263		663			394

	$	20,724	$	15,945	$	31,191		$	23,937


	Six Months Ended June 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Impairment of investments	$	350	$	650	$	350	$	650
Accounts receivable		348		449		709		449
Financing receivables		—		167		-		193
Property, plant and equipment		295		270		1,464		380
Inventories		464		43		405		81

	$	1,457	$	1,579	$	2,928	$	1,753

The Company’s effective tax rate differs from the statutory tax rate and varies from year to year primarily as a result of permanent differences, investment and other tax credits, the provision for income taxes at different rates in foreign and other provincial jurisdictions, enacted statutory tax rate increases or reductions in the year, changes due to foreign exchange, changes in the Company’s valuation allowance based on the Company’s recoverability assessments of deferred tax assets, and favorable or unfavorable resolution of various tax examinations. The effective tax rate on income from continuing operations differs between the periods due to shifts in jurisdictional income and because taxes were allocated at higher rates to income from discontinued operations during the ~~six~~nine months ended ~~June~~September 30, 2014. During the ~~six~~nine months ~~June~~ended September 30, 2015, there was no change in the Company’s estimates of the recoverability of its deferred tax assets based on an analysis of both positive and negative evidence including projected future earnings. For the nine months ended September 30, 2015, the Company recorded an adjustment of $5.5 million to deferred tax assets and shareholders’ equity related to excess tax benefits generated on the exercise of certain employee stock options. In conjunction with this, a provision for uncertain tax positions was also recorded in the same amount directly against shareholders’ equity.

As at ~~June~~September 30, 2015, the Company had net deferred income tax assets after valuation allowance of ~~$21.7~~$21.5 million (December 31, 2014 — $23.1 million), which consists of a gross deferred income tax asset of ~~$22.0~~$21.8 million (December 31, 2014 — $23.4 million), against which the Company is carrying a $0.3 million valuation allowance (December 31, 2014 — $0.3 million).

The income tax ~~(expense)~~ benefit included in the Company’s other comprehensive (loss) income ~~(loss)~~ are related to the following items:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014			2015			2014			2015			2014
Unrealized change in cash flow hedging instruments	$	(92	)	$	(242	)	$	702		$	(159	)	$	606		$	330		$	1,309		$	171
Realized change in cash flow hedging instruments upon settlement		(135	)		(66	)		(302	)		(1	)		(274	)		(64	)		(577	)		(65	)
Other-than-temporary impairment of investment		—			(45	)		—			(45	)		-			-			-			(45	)
Foreign currency translation adjustments		21			7			38			40			226			(72	)		264			(32	)

	$	(206	)	$	(346	)	$	438		$	(165	)	$	558		$	194		$	996		$	29

The compensation costs recorded in the condensed consolidated statement of operations for the Company’s stock-based compensation plans were ~~$5.1~~$4.3 million and ~~$10.7~~$14.9 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — ~~$4.7~~$3.4 million and ~~$7.9~~$11.3 million, respectively).

As at ~~June~~September 30, 2015, the Company has reserved a total of ~~7,815,389~~7,714,886 (December 31, 2014 — 9,173,106) common shares for future issuance under the Company’s Stock Option Plan (“SOP”) and the IMAX 2013 Long-Term Incentive Plan (“IMAX LTIP”). Of the common shares reserved for issuance, there are options in respect of ~~5,594,136~~5,519,653 common shares and restricted stock units (“RSUs”) in respect of ~~757,528~~721,815 common shares outstanding at ~~June~~September 30, 2015. At ~~June~~September 30, 2015, options in respect of ~~3,054,774~~3,195,836 common shares were vested and exercisable.

The Company recorded an expense of ~~$2.2~~$2.3 million and ~~$6.1~~$8.4 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — ~~$2.2~~$2.1 million and ~~$4.4~~$6.5 million, respectively), related to stock option grants issued to employees and directors in the IMAX LTIP and SOP plans. An income tax benefit is recorded in the condensed consolidated statements of operations of $0.5 million and ~~$1.3~~$1.8 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively, for these costs. The stock options vest within 5 years and expire 10 years or less from the date granted.

The weighted average fair value of all stock options granted to employees and directors for the three and ~~six~~nine months ended ~~June~~September 30, 2015 at the grant date was n/a and $8.07 per share, respectively (2014 — n/a and $8.33 per share, respectively). The following assumptions were used to estimate the average fair value of the stock options:


	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended September 30,		Nine Months Ended September 30,
	2015	2014	2015	2014	2015	2014	2015	2014
Average risk-free interest rate	n/a	n/a	1.97%	2.50%	n/a	n/a	1.97%	2.50%
Expected option life (in years)	n/a	n/a	3.55 - 5.76	4.48 - 5.82	n/a	n/a	3.55 - 5.76	4.48 - 5.82
Expected volatility	n/a	n/a	30.0%	37.5%	n/a	n/a	30.0%	37.5%
Annual termination probability	n/a	n/a	0% - 9.50%	0% - 8.40%	n/a	n/a	0% - 9.50%	0% - 8.40%
Dividend yield	n/a	n/a	0%	0%	n/a	n/a	0%	0%

There were no common share options issued to non-employees during the three and ~~six~~nine months ended ~~June~~September 30, ~~2015~~2015. During the three and ~~2014.~~nine months ended September 30, 2014, an aggregate of 10,000 and 10,000, respectively, stock options to purchase the Company’s common stock with an average exercise price of $26.47 and $26.47, respectively, were granted to certain advisors and strategic partners of the Company. These stock options granted have a maximum contractual life of 7 years. The stock options were granted under the IMAX LTIP.

As at ~~June~~September 30, 2015, non-employee stock options outstanding amounted to 39,500 stock options (2014 — ~~54,251)~~31,500) with a weighted average exercise price of $26.78 (2014 — ~~$13.71)~~$21.75). 21,525 stock options (2014 — ~~41,576)~~16,100) were exercisable with an average weighted exercise price of $26.34 (2014 — ~~$11.15)~~$18.14) and the vested stock options have an aggregate intrinsic value of ~~$0.3~~$0.2 million (2014 — ~~$0.7~~$0.2 million). The weighted average fair value of stock options granted to non-employees during the three and nine months ended September 30, 2014 at the measurement date was $4.84 and $4.84 per share, respectively, utilizing a Binominal Model with the following underlying assumptions:

For the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company recorded a charge of less than $0.1 million and $0.1 million, respectively (2014 — less than $0.1 million and less than $0.1 million, respectively) to cost and expenses related to revenues —– services and selling, general and administrative expenses related to the non-employee stock options. Included in accrued liabilities is an accrual of less than $0.1 million for non-employee stock options (December 31, 2014 —– less than $0.1 million).

Each stock option issued under the China LTIP represents an opportunity to participate economically in the future growth and value creation of ~~the~~ IMAX China Holding, Inc. (“IMAX China”), a subsidiary of the Company. The China LTIP options issued by IMAX

China (“China Options”) operate in tandem with options granted to certain employees of ~~the~~ IMAX China under the Company’s SOP and IMAX LTIP (“Tandem Options”).

In 2012 and 2014, 146,623 and 39,823 Tandem Options, respectively, were granted to certain employees in conjunction with China Options with an average price of $22.39 per share and $28.52 per share, respectively, in accordance with the China LTIP. During the three and ~~six~~nine months ended ~~June~~September 30, 2015, no additional Tandem Options were granted in conjunction with China Options. As at ~~June~~September 30, 2015, there were 186,446 (December 31, 2014 — 186,446) outstanding and unvested Tandem Options issued under the China LTIP with a weighted average exercise price of $23.70 per share (December 31, 2014 — $23.70 per share). The Tandem Options have a maximum contractual life of 7 years. The total fair value of the Tandem Options granted with respect to the China LTIP was $1.9 million. The Company is recognizing this expense over a 5 year period. If a performance event occurs, including upon the occurrence of a qualified initial public offering or upon a change in control on or prior to the fifth anniversary of the grant date, the 186,446 Tandem Options issued forfeit immediately and the related charge would be ~~reversed.~~reversed (see subsequent event discussion below).

The Company has recorded an expense of $0.1 million and ~~$0.2~~$0.3 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively ~~(June~~(September 30, 2014 — $0.1 million and $0.2 million, respectively) related to Tandem Options issued under the China LTIP.

As discussed in note 16, IMAX China completed an initial public offering on October 8, 2015. As a result, the Tandem Options issued will be forfeited immediately in the fourth quarter of 2015. The Company will subsequently recognize an immediate charge related to the vesting of China Options and certain cash settled share-based payments (“CSSBP”) for China employees. During the fourth quarter of 2015, a net charge of $2.7 million will be recorded which includes the reversal of the Tandem rewards expensed to date of $0.9 million. The remaining charge will be recognized over the related requisite period. The CSSBPs are tied to the appreciation in the value of IMAX China. The CSSBPs represent the right to receive cash payments in an amount equal to a certain percentage of the excess of the total equity value of IMAX China based on the per share price in the initial public offering over the strike price of the CSSBPs. The CSSBPs were issued in conjunction with the CLTIP, with similar terms and conditions as the China Options. The CSSBP awards are accounted as liability awards and the fair value of the liability is remeasured at the end of each reporting period until vested. The total fair value of the China Options and CSSBP awards granted with respect to the China LTIP is $3.9 million and $2.1 million, respectively.

The following table summarizes certain information in respect of option activity under the SOP and IMAX LTIP for the ~~six~~nine month periods ended ~~June~~September 30:


	Number of Shares						Weighted Average Exercise Price Per Share				Number of Shares						Weighted Average Exercise Price Per Share
	2015			2014			2015		2014		2015			2014			2015		2014
Options outstanding, beginning of period		5,925,660			6,263,121		$	24.24	$	21.11		5,925,660			6,263,121		$	24.24	$	21.11
Granted		871,431			828,353			31.56		27.44		871,431			838,353			31.56		27.42
Exercised		(1,172,331	)		(505,187	)		19.49		5.26		(1,231,964	)		(661,581	)		19.35		5.55
Forfeited		(30,624	)		(10,000	)		27.82		18.98		(45,474	)		(36,242	)		28.26		24.63
Cancelled		—			(23,787	)		—		33.60		-			(23,787	)		-		33.60

Options outstanding, end of period		5,594,136			6,552,500			26.35		23.09		5,519,653			6,379,864			26.45		23.48

Options exercisable, end of period		3,054,774			3,656,730			24.88		21.35		3,195,836			3,620,742			25.14		22.11

The Company did not cancel any stock options from its SOP or IMAX LTIP (2014 — ~~17,787~~n/a and 23,787, respectively) surrendered by Company employees during the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively.

As at ~~June~~September 30, 2015, ~~5,378,444~~5,190,967 options were fully vested or are expected to vest with a weighted average exercise price of ~~$26.31,~~$26.49, aggregate intrinsic value of ~~$75.1~~$38.2 million and weighted average remaining contractual life of ~~4.7~~4.5 years. As at ~~June~~September 30, 2015, options that are exercisable have an intrinsic value of ~~$47.0~~$27.9 million and a weighted average remaining contractual life of ~~4.2~~4.1 years. The intrinsic value of options exercised in the three and ~~six~~nine months ended ~~June~~September 30, 2015 was ~~$11.1~~$1.2 million and ~~$20.2~~$21.4 million, respectively (2014 — ~~$9.0~~$3.3 million and ~~$11.1~~$14.4 million, respectively).

As at September 30, 2015, a Company trustee held 54,149 shares purchased for $2.0 million in the open market to be issued upon exercise of certain stock option awards. The shares held with the trustee are recorded at cost and are reported as a reduction against capital stock on the Balance Sheet.

RSUs have been granted to employees, consultants and directors under the IMAX LTIP. Each RSU represents a contingent right to receive one common share and is the economic equivalent of one common share. The grant date fair value of each RSU is equal to the share price of the Company’s stock at the grant date. The Company recorded an expense of ~~$2.8~~$1.9 million and ~~$4.3~~$6.2 million for the three and ~~six month period~~nine months ended ~~June~~September 30, 2015, respectively (2014 — ~~$2.4~~$1.2 million and ~~$3.3~~$4.5 million, respectively), related to RSU grants issued to employees and directors in the plan. The annual termination probability assumed for the three and ~~six~~nine months ended ~~June~~September 30, 2015 ~~was~~ranged from 0% to 8.07% and ranged from 0% to 9.50%, respectively. In addition, the Company recorded an expense of less than $0.1 million and less than $0.1 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — less than $0.1 million and less than $0.1 million, respectively), related to RSU grants issued to certain advisors and strategic partners of the Company.

During the three and ~~six month period~~nine months ended ~~June~~September 30, 2015, in connection with the vesting of RSUs, the Company settled ~~41,939~~32,345 and ~~159,732,~~192,077, respectively, common shares to IMAX LTIP participants, of which ~~15,276~~nil and 21,709 common shares, respectively (net of shares withheld of ~~218~~5,763 and ~~218,~~5,981, respectively, for tax withholdings) were issued from treasury and ~~26,445~~26,582 and ~~137,805~~164,387 common shares, respectively, were purchased in the open market by the IMAX LTIP trustee. As at ~~June~~September 30, 2015, a Company trustee held ~~29,664~~3,082 shares purchased for ~~$1.2~~$0.1 million in the open market to be issued upon vesting of certain RSU awards. The shares held with the trustee are recorded at cost and are reported as a reduction against capital stock on the Balance Sheet.

Total stock-based compensation expense related to non-vested RSU’s not yet recognized at ~~June~~September 30, 2015 and the weighted average period over which the awards are expected to be recognized is ~~$17.2~~$16.4 million and ~~3.1~~3.0 years. The Company’s actual tax benefits realized for the tax deductions related to the vesting of RSUs was $0.4 million and ~~$1.6~~$2.0 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively.

RSUs granted under the IMAX LTIP vest between immediately and four years from the grant date. Vesting of the RSUs is subject to continued employment or service with the Company.

The following table summarizes certain information in respect of RSU activity under the IMAX LTIP for the ~~six~~nine months ended ~~June~~September 30, 2015:


	Number of Awards						Weighted Average Grant Date Fair Value Per Share				Number of Awards						Weighted Average Grant Date Fair Value Per Share
	2015			2014			2015		2014		2015			2014			2015		2014
RSUs outstanding, beginning of period		595,834			264,140		$	27.13	$	26.14		595,834			264,140		$	27.13	$	26.14
Granted		333,096			482,588			34.37		27.41		337,557			482,588			34.39		27.41
Vested and settled		(159,732	)		(104,612	)		29.27		26.13		(192,077	)		(133,007	)		28.93		26.19
Forfeited		(11,670	)		—			29.08		—		(19,499	)		(2,695	)		29.37		26.28

RSUs outstanding, end of period		757,528			642,116			29.83		27.09		721,815			611,026			29.99		27.13

On June 16, 2014, the Company’s board of directors approved a ~~new~~ $150.0 million share repurchase program for shares of the Company’s common stock. Purchases under the program commenced during the third quarter of 2014. The share repurchase program expires on June 30, 2017. The repurchases may be made either in the open market or through private transactions, subject to market conditions, applicable legal requirements and other relevant factors. The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time. ~~No shares were repurchased in~~During the three and ~~six~~nine months ended ~~June~~September 30, 2015, ~~respectively.~~

The total number of shares purchased during the nine months ended September 30, 2015 and 2014 does not include any shares purchased in the administration of employee share-based compensation plans.

Reconciliations of the numerator and denominator of the basic and diluted per-share computations are comprised of the following:


													Three Months						Nine Months
	Three Months Ended June 30,						Six Months Ended June 30,						Ended September 30,						Ended September 30,
	2015			2014			2015			2014			2015			2014			2015			2014
Net income attributable to common shareholders	$	24,350		$	13,307		$	24,741		$	13,886		$	8,610		$	4,858		$	33,351		$	18,744
Less: Accretion charges associated with redeemable common stock		(262	)		(142	)		(484	)		(142	)		(263	)		(142	)		(747	)		(284	)

Net income applicable to common shareholders	$	24,088		$	13,165		$	24,257		$	13,744		$	8,347		$	4,716		$	32,604		$	18,460

Weighted average number of common shares (000’s):
Issued and outstanding, beginning of period		69,586			67,957			68,988			67,841			70,152			68,423			68,988			67,841
Weighted average number of shares issued during the period		257			271			538			227
Weighted average number of shares (repurchased) issued during the period														(453	)		57			594			365

Weighted average number of shares used in computing basic income per share		69,843			68,228			69,526			68,068			69,699			68,480			69,582			68,206
Assumed exercise of stock options and RSUs, net of shares assumed repurchased		1,845			1,224			1,823			1,380			1,161			1,122			1,520			1,391

Weighted average number of shares used in computing diluted income per share		71,688			69,452			71,349			69,448			70,860			69,602			71,102			69,597

The calculation of diluted earnings per share excludes ~~416,902~~1,473,950 and ~~495,537~~1,067,859 shares, respectively, that are issuable upon exercise of nil and ~~nil~~61,534 RSUs, respectively, and ~~416,902~~1,473,950 and ~~495,537~~1,006,325 stock options, respectively, for the three and ~~six~~nine months ended ~~June~~September 30, 2015, as the impact of these exercises would be antidilutive. The calculation of diluted earnings per share excludes ~~4,325,037~~4,278,053 and ~~4,205,083~~4,187,476 shares, respectively, that are issuable upon exercise of ~~119,954~~104,960 and ~~nil~~14,383 RSUs, respectively, and ~~4,205,083~~4,173,093 stock options for the three and ~~six~~nine months ended ~~June~~September 30, 2014, as the impact of these exercises would be antidilutive.

The following summarizes the movement of Shareholders’ Equity for the ~~six~~nine months ended ~~June~~September 30, 2015:


Balance as at December 31, 2014	$	382,775		$	382,775
Net income attributable to Common Shareholders		24,741			33,351
Adjustments to capital stock:
Cash received from the issuance of common shares		22,850			23,838
Issuance of common shares for vested RSUs		590			590
Fair value of stock options exercised at the grant date		9,945			10,036
Shares held in trust		(1,214	)
Shares held in treasury					(2,141	)
Average carrying value of repurchased and retired common shares					(5,390	)
Adjustments to other equity:
Employee stock options granted		6,300			8,684
Non-employee stock options granted		75
Non-employee stock options granted and vested					75
Fair value of stock options exercised at the grant date		(9,945	)		(10,036	)
Stock options exercises settled from treasury shares					(1,782	)
RSUs granted		4,262			6,077
RSUs vested		(5,584	)		(6,896	)
Utilization of windfall tax benefits from vested RSUs		239
Utilization of excess tax benefits from vested RSUs					328
Adjustments to accumulated deficit:
Common shares repurchased and retired					(28,889	)
Accretion charges associated with redeemable common stock		(484	)		(747	)
Adjustments to accumulated other comprehensive income:
Unrealized net loss from cash flow hedging instruments		(2,674	)		(4,983	)
Realization of cash flow hedging net loss upon settlement		1,151			2,196
Foreign currency translation adjustments		(185	)		(1,374	)
Tax effect of movement in other comprehensive income		441			1,044

Balance as at June 30, 2015	$	433,283
Balance as at September 30, 2015				$	406,756

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 Company refers to all theaters using the IMAX theater system as “IMAX theaters”. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items. The accounting policies of the segments are the same as those described in note 2 to the audited consolidated financial statements included in the Company’s 2014 Form 10-K.

Management, including the Company’s Chief Executive Officer (“CEO”) who is the Company’s Chief Operating Decision Maker (as defined in the Segment Reporting Topic of the FASB ASC), assesses segment performance based on segment revenues, gross margins and film performance. Selling, general and administrative expenses, research and development costs, amortization of intangibles, receivables provisions (recoveries), write-downs net of recoveries, interest income, interest expense and tax (provision) recovery are not allocated to the segments.

Transactions between the film production and IMAX DMR segment and the film post-production segment are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below.


	Three Months Ended June 30,					Six Months Ended June 30,					Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014		2015			2014		2015			2014			2015			2014
Revenue⁽¹⁾
IMAX theater systems
IMAX systems	$	22,365		$	17,996	$	34,479		$	25,756	$	30,153		$	10,145		$	64,632		$	35,901
Theater system maintenance		9,158			8,673		18,008			16,868		9,337			8,516			27,345			25,384
Joint revenue sharing arrangements		31,594			19,363		47,462			30,219		19,797			15,238			67,259			45,457

		63,117			46,032		99,949			72,843		59,287			33,899			159,236			106,742

Films
Production and IMAX DMR		36,603			24,050		54,279			39,235		20,865			18,350			75,144			57,585
Distribution		1,158			2,942		2,546			4,405		967			2,902			3,513			7,307
Post-production		1,608			2,391		4,498			5,617		761			2,426			5,259			8,043

		39,369			29,383		61,323			49,257		22,593			23,678			83,916			72,935


Other		4,674			3,730		8,099			5,242		3,221			3,165			11,320			8,407


Total	$	107,160		$	79,145	$	169,371		$	127,342	$	85,101		$	60,742		$	254,472		$	188,084


Gross margin
IMAX theater systems
IMAX systems⁽²⁾	$	13,537		$	11,589	$	21,722		$	16,362	$	13,109		$	7,598		$	34,831		$	23,960
Theater system maintenance		3,089			2,781		6,370			5,782		3,521			3,208			9,891			8,990
Joint revenue sharing arrangements⁽²⁾		24,069			13,378		34,686			20,661		12,130			9,382			46,816			30,043

		40,695			27,748		62,778			42,805		28,760			20,188			91,538			62,993

Films
Production and IMAX DMR⁽²⁾		28,488			18,634		41,713			29,708		13,929			13,469			55,642			43,177
Distribution⁽²⁾		(351	)		594		(216	)		784		15			569			(201	)		1,353
Post-production		317			364		895			889		(48	)		1,434			847			2,323

		28,454			19,592		42,392			31,381		13,896			15,472			56,288			46,853


Other		(114	)		454		(154	)		16		(267	)		(218	)		(421	)		(202	)


Total	$	69,035		$	47,794	$	105,016		$	74,202	$	42,389		$	35,442		$	147,405		$	109,644

Revenue by geographic area is based on the location of the customer. Revenue related to IMAX DMR is presented based upon the geographic location of the theaters that exhibit the re-mastered films. IMAX DMR revenue is generated through contractual relationships with studios and other third parties and these may not be in the same geographical location as the theater.


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014		2015		2014		2015		2014
Revenue
United States	$	42,310	$	32,762	$	68,031	$	52,667	$	27,914	$	24,008	$	95,945	$	76,675
Canada		3,145		2,507		5,028		4,632		3,412		2,199		8,440		6,831
Greater China(1)		26,348		17,613		43,914		27,901		27,513		14,114		71,427		42,015
Asia (excluding Greater China)										11,007		5,977		26,732		18,673
Western Europe		11,873		7,411		17,039		12,407		7,100		8,144		24,139		20,551
Asia (excluding Greater China)		9,949		8,410		15,725		12,696
Russia and the CIS		5,864		5,105		7,805		7,451		1,705		2,348		9,510		9,799
Latin America(2)		2,955		3,806		5,390		6,062		2,459		2,512		7,849		8,574
Rest of the World		4,716		1,531		6,439		3,526		3,991		1,440		10,430		4,966

Total	$	107,160	$	79,145	$	169,371	$	127,342	$	85,101	$	60,742	$	254,472	$	188,084

No single country in the Rest of the World, Western Europe, Latin America and Asia (excluding Greater China) classifications comprise more than 10% of the total revenue.

The Company has an unfunded U.S. defined benefit pension plan (the “SERP”) covering Richard L. Gelfond, CEO of the Company and Bradley J. Wechsler, Chairman of the Company’s Board of Directors.


	June 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
Obligation, beginning of period	$	19,405	$	18,284	$	19,405	$	18,284
Interest cost		126		264		189		264
Actuarial loss		—		857		-		857

Obligation, end of period and unfunded status	$	19,531	$	19,405	$	19,594	$	19,405


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014		2015		2014		2015		2014
Interest cost	$	63	$	66	$	126	$	132	$	63	$	66	$	189	$	198

Pension expense	$	63	$	66	$	126	$	132	$	63	$	66	$	189	$	198

No contributions are expected to be made for the SERP during the remainder of 2015. The Company expects interest costs of $0.1 million to be recognized as a component of net periodic benefit cost during the remainder of 2015.

The accumulated benefit obligation for the SERP was ~~$19.5~~$19.6 million at ~~June~~September 30, 2015 (December 31, 2014 —- $19.4 million).

The following benefit payments are expected to be made as per the current SERP assumptions and the terms of the SERP in each of the next 5 years, and in the aggregate:


2015 (six months remaining)	$	—
2015 (three months remaining)			$	-
2016		—		-
2017		20,042		20,042
2018		—		-
2019		—		-
Thereafter		—		-

	$	20,042	$	20,042

The Company also maintains defined contribution pension plans for its employees, including its executive officers. The Company makes contributions to these plans on behalf of employees in an amount up to 5% of their base salary subject to certain prescribed maximums. During the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company contributed and expensed an aggregate of ~~$0.3~~$0.2 million and ~~$0.6~~$0.8 million, respectively (2014 — ~~$0.4~~$0.3 million and ~~$0.7~~$1.0 million, respectively), to its Canadian plan and an aggregate of ~~$0.1~~$0.2 million and ~~$0.2~~$0.4 million, respectively (2014 — $0.1 million and ~~$0.2~~$0.3 million, respectively), to its defined contribution employee pension plan under Section 401(k) of the U.S. Internal Revenue Code.

The Company has an unfunded postretirement plan for Messrs. Gelfond and Wechsler. The plan provides that the Company will maintain health benefits for Messrs. Gelfond and Wechsler until they become eligible for Medicare and, thereafter, the Company will provide Medicare supplement coverage as selected by Messrs. Gelfond and Wechsler. The postretirement benefits obligation as at ~~June~~September 30, 2015 is ~~$0.8~~$0.9 million (December 31, 2014 — $0.8 million). The Company has expensed less than $0.1 million and less than $0.1 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — less than $0.1 million and less than $0.1 million, respectively).

The following benefit payments are expected to be made as per the current plan assumptions in each of the next 5 years:


2015 (six months remaining)	$	32
2015 (three months remaining)			$	32
2016		43		43
2017		70		70
2018		77		77
2019		84		84
Thereafter		544		553

	$	850	$	859

The Company has an unfunded postretirement plan for its Canadian employees who meet specific eligibility requirements. The Company will provide eligible participants, upon retirement, with health and welfare benefits. The postretirement benefits obligation as at ~~June~~September 30, 2015 is ~~$2.4~~$2.1 million (December 31, 2014 — $2.1 million). The Company has expensed less than $0.1 million and $0.1 million for the three and ~~six~~nine months ended ~~June~~September 30, 2015, respectively (2014 — less than $0.1 million and $0.1 million, respectively).

The following benefit payments are expected to be made as per the current plan assumptions in each of the next 5 years:


2015 (six months remaining)	$	89
2015 (three months remaining)			$	82
2016		100		92
2017		110		102
2018		120		111
2019		121		111
Thereafter		1,832		1,592

	$	2,372	$	2,090

The Company maintains cash with various major financial institutions. The Company’s cash is invested with highly rated financial institutions.

The Company’s accounts receivables and financing receivables are subject to credit risk. The Company’s accounts receivable and financing receivables are concentrated with the theater exhibition industry and film entertainment industry. To minimize the Company’s credit risk, the Company retains title to underlying theater systems under lease arrangements, performs initial and ongoing credit evaluations of its customers and makes ongoing provisions for its estimate of potentially uncollectible amounts. The Company believes it has adequately provided for related exposures surrounding receivables and contractual commitments.

The carrying values of the Company’s cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities due within one year approximate fair values due to the short-term maturity of these instruments. The Company’s other financial instruments are comprised of the following:


													As at September 30, 2015						As at December 31, 2014
	As at June 30, 2015						As at December 31, 2014						Carrying			Estimated			Carrying			Estimated
	Carrying Amount			Estimated Fair Value			Carrying Amount			Estimated Fair Value			Amount			Fair Value			Amount			Fair Value
Cash and cash equivalents	$	146,383		$	146,383		$	106,503		$	106,503		$	117,361		$	117,361		$	106,503		$	106,503
Net financed sales receivable	$	97,870		$	101,165		$	95,101		$	98,675		$	102,924		$	104,604		$	95,101		$	98,675
Net investment in sales-type leases	$	10,622		$	10,490		$	10,599		$	10,503		$	11,060		$	10,894		$	10,599		$	10,503
Available-for-sale investment													$	1,000		$	1,000		$	-		$	-
Foreign exchange contracts — designated forwards	$	(3,283	)	$	(3,283	)	$	(1,760	)	$	(1,760	)	$	(4,547	)	$	(4,547	)	$	(1,760	)	$	(1,760	)
Borrowings under the Playa Vista construction loan	$	(22,278	)	$	(22,278	)	$	(4,710	)	$	(4,710	)	$	(22,278	)	$	(22,278	)	$	(4,710	)	$	(4,710	)

Cash and cash equivalents are comprised of cash and interest-bearing investments with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value (Level 1 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at ~~June~~September 30, 2015 and December 31, 2014, respectively.

The estimated fair values of the net financed sales receivable and net investment in sales-type leases are estimated based on discounting future cash flows at currently available interest rates with comparable terms (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at ~~June~~September 30, 2015 and December 31, 2014, respectively.

The fair value of the Company’s available-for-sale investment is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30, 2015.

The fair value of foreign currency derivatives is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at ~~June~~September 30, 2015 and December 31, 2014, respectively. These identical instruments are traded on a closed exchange.

The carrying value of borrowings under the Playa Vista Loan approximates fair value as the interest rates offered under the construction loan are close to ~~June~~September 30, 2015 market rates for the Company for debt of the same remaining maturities (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at ~~June~~September 30, 2015.

There were no significant transfers between Level 1 and Level 2 during the ~~six~~nine months ended ~~June~~September 30, 2015 or 2014. When a determination is made to classify an asset or liability within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. The table below sets forth a summary of changes in the fair value of the Company’s available-for-sale investment measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the prior year period:

   Available For Sale Investments
           2015                    2014
Beginning balance, January 1,
   $ —      $ 1,000
Transfers into/out of Level 3
   —      —
Total gains or losses (realized/unrealized)

Included in earnings
   —      (650 )
Change in other comprehensive income
   —      350
Purchases, issuances, sales and settlements
   —      —




Ending balance, June 30,
   $ —      $ 700




The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date.
   $ —      $ (650 )

There were no transfers in or out of the Company’s level 3 assets during the ~~six~~nine months ended ~~June~~September 30, 2015.

The Company’s net investment in leases and its net financed sale receivables are subject to the disclosure requirements of ASC 310 “Receivables”. Due to differing risk profiles of its net investment in leases and its net financed sales receivables, the Company views its net investment in leases and its net financed sale receivables as separate classes of financing receivables. The Company does not aggregate financing receivables to assess impairment.

The Company monitors the credit quality of each customer on a frequent basis through collections and aging analyses. The Company also holds meetings monthly in order to identify credit concerns and whether a change in credit quality classification is required for the customer. A customer may improve in their credit quality classification once a substantial payment is made on overdue balances or the customer has agreed to a payment plan with the Company and payments have commenced in accordance to the payment plan. The change in credit quality indicator is dependent upon management approval.

The Company classifies its customers into four categories to indicate the credit quality worthiness of its financing receivables for internal purposes only:

Good standing — Theater continues to be in good standing with the Company as the client’s payments and reporting are up-to-date.

Credit Watch — Theater operator has begun to demonstrate a delay in payments, has been placed on the Company’s credit watch list for continued monitoring, but active communication continues with the Company. Depending on the size of outstanding balance, length of time in arrears and other factors, transactions may need to be approved by management. These financing receivables are considered to be in better condition than those receivables related to theaters in the “Pre-approved transactions” category, but not in as good of condition as those receivables in “Good standing”.

Pre-approved transactions only — Theater operator is demonstrating a delay in payments with little or no communication with the Company. All service or shipments to the theater must be reviewed and approved by management. These financing receivables are considered to be in better condition than those receivables related to theaters in the “All transactions suspended” category, but not in as good of condition as those receivables in “Credit Watch.” Depending on the individual facts and circumstances of each customer, finance income recognition may be suspended if management believes the receivable to be impaired.

All transactions suspended — Theater is severely delinquent, non-responsive or not negotiating in good faith with the Company. Once a theater is classified as “All transactions suspended”, the theater is placed on nonaccrual status and all revenue recognitions related to the theater are stopped.

The following table discloses the recorded investment in financing receivables by credit quality indicator:


													As at September 30, 2015						As at December 31, 2014
													Minimum		Financed				Minimum		Financed
	As at June 30, 2015						As at December 31, 2014						Lease		Sales				Lease		Sales
	Minimum Lease Payments		Financed Sales Receivables		Total		Minimum Lease Payments		Financed Sales Receivables		Total		Payments		Receivables		Total		Payments		Receivables		Total
In good standing	$	9,813	$	97,104	$	106,917	$	10,457	$	94,212	$	104,669	$	10,239	$	102,472	$	112,711	$	10,457	$	94,212	$	104,669
Pre-approved transactions		—		685		685		—		855		855		-		368		368		-		855		855
Transactions suspended		1,781		575		2,356		1,114		528		1,642		1,793		578		2,371		1,114		528		1,642

	$	11,594	$	98,364	$	109,958	$	11,571	$	95,595	$	107,166	$	12,032	$	103,418	$	115,450	$	11,571	$	95,595	$	107,166

While recognition of finance income is suspended, payments received by a customer are applied against the outstanding balance owed. If payments are sufficient to cover any unreserved receivables, a recovery of provision taken on the billed amount, if applicable, is recorded to the extent of the residual cash received. Once the collectibility issues are resolved and the customer has returned to being in good standing, the Company will resume recognition of finance income.

The Company’s investment in financing receivables on nonaccrual status is as follows:


											As at September 30, 2015					As at December 31, 2014
	As at June 30, 2015					As at December 31, 2014					Recorded		Related			Recorded		Related
	Recorded Investment		Related Allowance			Recorded Investment		Related Allowance			Investment		Allowance			Investment		Allowance
Net investment in leases	$	1,781	$	(972	)	$	1,114	$	(972	)	$	1,793	$	(972	)	$	1,114	$	(972	)
Net financed sales receivables		575		(494	)		528		(494	)		578		(494	)		528		(494	)

	$	2,356	$	(1,466	)	$	1,642	$	(1,466	)	$	2,371	$	(1,466	)	$	1,642	$	(1,466	)

The Company considers financing receivables with aging between 60-89 days as indications of theaters with potential collection concerns. The Company will begin to focus its review on these financing receivables and increase its discussions internally and with the theater regarding payment status. Once a theater’s aging exceeds 90 days, the Company’s policy is to review and assess collectibility on the theater’s past due accounts. Over 90 days past due is used by the Company as an indicator of potential impairment as invoices up to 90 days outstanding could be considered reasonable due to the time required for dispute resolution or for the provision of further information or supporting documentation to the customer.


																		As at September 30, 2015
																										Related							Recorded
																		Accrued						Billed		Unbilled		Total					Investment
	As at December 31, 2014																	And						Financing		Recorded		Recorded		Related			Net of
	Accrued And Current		30-89 Days		90+ Days		Billed Financing Receivables		Related Unbilled Recorded Investment		Total Recorded Investment		Related Allowances			Recorded Investment Net of Allowances		Current		30-89 Days		90+ Days		Receivables		Investment		Investment		Allowances			Allowances
Net investment in leases	$	420	$	175	$	253	$	848	$	10,723	$	11,571	$	(972	)	$	10,599	$	846	$	87	$	395	$	1,328	$	10,704	$	12,032	$	(972	)	$	11,060
Net financed sales receivables		1,558		1,260		2,659		5,477		90,118		95,595		(494	)		95,101		1,780		829		2,938		5,547		97,871		103,418		(494	)		102,924

Total	$	1,978	$	1,435	$	2,912	$	6,325	$	100,841	$	107,166	$	(1,466	)	$	105,700	$	2,626	$	916	$	3,333	$	6,875	$	108,575	$	115,450	$	(1,466	)	$	113,984


																			As at December 31, 2014
																										Related							Recorded
																		Accrued						Billed		Unbilled		Total					Investment
																		And						Financing		Recorded		Recorded		Related			Net of
																		Current		30-89 Days		90+ Days		Receivables		Investment		Investment		Allowances			Allowances
Net investment in leases																		$	420	$	175	$	253	$	848	$	10,723	$	11,571	$	(972	)	$	10,599
Net financed sales receivables																			1,558		1,260		2,659		5,477		90,118		95,595		(494	)		95,101

Total																		$	1,978	$	1,435	$	2,912	$	6,325	$	100,841	$	107,166	$	(1,466	)	$	105,700

The Company’s recorded investment in past due financing receivables for which the Company continues to accrue finance income is as follows:


															As at September 30, 2015
																							Related				Recorded
															Accrued						Billed		Unbilled				Investment
	As at December 31, 2014														And						Financing		Recorded		Related		Past Due
	Accrued And Current		30-89 Days		90+ Days		Billed Financing Receivables		Related Unbilled Recorded Investment		Related Allowance		Recorded Investment Past Due and Accruing		Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases	$	90	$	102	$	130	$	322	$	2,024	$	—	$	2,346	$	92	$	87	$	243	$	422	$	2,974	$	-	$	3,396
Net financed sales receivables		258		425		1,671		2,354		12,512		—		14,866		314		470		1,543		2,327		16,361		-		18,688

Total	$	348	$	527	$	1,801	$	2,676	$	14,536	$	—	$	17,212	$	406	$	557	$	1,786	$	2,749	$	19,335	$	-	$	22,084


															As at December 31, 2014
																							Related				Recorded
															Accrued						Billed		Unbilled				Investment
															And						Financing		Recorded		Related		Past Due
															Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases															$	90	$	102	$	130	$	322	$	2,024	$	-	$	2,346
Net financed sales receivables																258		425		1,671		2,354		12,512		-		14,866

Total															$	348	$	527	$	1,801	$	2,676	$	14,536	$	-	$	17,212

The Company considers financing receivables to be impaired when it believes it to be probable that it will not recover the full amount of principal and interest owing under the arrangement. The Company uses its knowledge of the industry and economic trends,

as well as its prior experiences to determine the amount recoverable for impaired financing receivables. The following table discloses information regarding the Company’s impaired financing receivables:


												For the Three Months Ended September 30, 2015
																			Average		Interest
	For the Six Months Ended June 30, 2014											Recorded		Unpaid		Related			Recorded		Income
	Recorded Investment		Unpaid Principal		Related Allowance			Average Recorded Investment		Interest Income Recognized		Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables		525		—		(493	)		526		—	$	525	$	53	$	(494	)	$	525	$	-

Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—		-		-		-			-		-

Total recorded investment in impaired loans:

Net financed sales receivables	$	525	$	—	$	(493	)	$	526	$	—	$	525	$	53	$	(494	)	$	525	$	-


												For the Three Months Ended September 30, 2014
																			Average		Interest
												Recorded		Unpaid		Related			Recorded		Income
												Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables												$	525		-	$	(493	)	$	525	$	-

Recorded investment for which there is no related allowance:
Net financed sales receivables													-		-		-			-		-

Total recorded investment in impaired loans:

Net financed sales receivables												$	525	$	-	$	(493	)	$	525	$	-


												For the Nine Months Ended September 30, 2015
																			Average		Interest
												Recorded		Unpaid		Related			Recorded		Income
												Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables												$	525	$	53	$	(494	)	$	525	$	-

Recorded investment for which there is no related allowance:
Net financed sales receivables													-		-		-			-		-

Total recorded investment in impaired loans:

Net financed sales receivables												$	525	$	53	$	(494	)	$	525	$	-


												For the Nine Months Ended September 30, 2014
																			Average		Interest
												Recorded		Unpaid		Related			Recorded		Income
												Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables												$	525		-	$	(493	)	$	526	$	-

Recorded investment for which there is no related allowance:
Net financed sales receivables													-		-		-			-		-

Total recorded investment in impaired loans:

Net financed sales receivables												$	525	$	-	$	(493	)	$	526	$	-

The Company’s activity in the allowance for credit losses for the period and the Company’s recorded investment in financing receivables is as follows:


	Three Months Ended June 30, 2014				Six Months Ended June 30, 2014				Three Months Ended September 30, 2015					Nine Months Ended September 30, 2015
	Net Investment in Leases		Net Financed Sales Receivables		Net Investment in Leases		Net Financed Sales Receivables		Net Investment			Net Financed		Net Investment			Net Financed
Allowance for credit losses:
									in Leases			Sales Receivables		in Leases			Sales Receivables
Allowance for credit losses:

Beginning balance	$	806	$	488	$	806	$	236	$	972		$	494	$	972		$	494
Charge-offs										-			-		-			-
Recoveries										-			-		-			-
Provision		159		5		159		257		-			-		-			-

Ending balance	$	965	$	493	$	965	$	493	$	972		$	494	$	972		$	494

Ending balance: individually evaluated for impairment	$	965	$	493	$	965	$	493	$	972		$	494	$	972		$	494


Financing receivables:
Ending balance: individually evaluated for impairment	$	13,701	$	92,626	$	13,701	$	92,626	$	12,032		$	103,418	$	12,032		$	103,418


									Three Months Ended September 30, 2014					Nine Months Ended September 30, 2014
									Net Investment			Net Financed		Net Investment			Net Financed
									in Leases			Sales Receivables		in Leases			Sales Receivables
Allowance for credit losses:

Beginning balance									$	965		$	493	$	806		$	236
Charge-offs										(20	)		-		(20	)		-
Recoveries										(74	)		-		(74	)		-
Provision										101			-		260			257

Ending balance									$	972		$	493	$	972		$	493

Ending balance: individually evaluated for impairment									$	972		$	493	$	972		$	493


Financing receivables:
Ending balance: individually evaluated for impairment									$	13,039		$	92,042	$	13,039		$	92,042

The Company is exposed to market risk from changes in foreign currency rates. A majority portion of the Company’s revenues is denominated in U.S. dollars while a substantial portion of its costs and expenses is denominated in Canadian dollars. A portion of the net U.S. dollar cash flows of the Company is periodically converted to Canadian dollars to fund Canadian dollar expenses through the spot market. In China and Japan the Company has ongoing operating expenses related to its operations in Chinese Renminbi and Japanese yen, respectively. Net cash flows are converted to and from U.S. dollars through the spot market. The Company also has cash receipts under leases denominated in Chinese Renminbi, Japanese yen, Canadian dollars and Euros which are converted to U.S. dollars through the spot market. The Company’s policy is to not use any financial instruments for trading or other speculative purposes.

The Company entered into a series of foreign currency forward contracts to manage the Company’s risks associated with the volatility of foreign currencies. Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continue to meet hedge effectiveness tests at ~~June~~September 30, 2015 (the “Foreign Currency Hedges”), with settlement dates throughout ~~2016.~~2016 and 2017. Foreign currency derivatives are recognized and measured in the balance sheet at fair value. Changes in the fair value (gains or losses) are recognized in the condensed consolidated statement of operations except for derivatives designated and qualifying as foreign currency hedging instruments. For foreign currency hedging instruments, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in other comprehensive income and reclassified to the condensed consolidated statement of operations when the forecasted transaction occurs. Any ineffective portion is recognized immediately in the consolidated statement of operations. The Company currently does not hold any derivatives which are not designated as hedging instruments and therefore no gain or loss pertaining to an ineffective portion has been recognized.

The following tabular disclosures reflect the impact that derivative instruments and hedging activities have on the Company’s condensed consolidated financial statements:


	June 30, 2015		December 31, 2014		September 30, 2015		December 31, 2014
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	$	37,011	$	36,754
Foreign exchange contracts – Forwards					$	36,670	$	36,754


	Balance Sheet Location	June 30, 2015			December 31, 2014			Balance Sheet Location	September 30, 2015		December 31, 2014
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	Accrued and other liabilities	$	(3,283	)	$	(1,760	)	Accrued and other liabilities	$	(4,547)	$	(1,760)

The Company accounts for investments in new business ventures using the guidance of the FASB ASC 323 or FASB ASC 320, as appropriate. As at ~~June~~September 30, 2015, the equity method of accounting is being utilized for investments with a total carrying value of ~~$1.4~~$1.9 million (December 31, 2014 — $2.8 million). For the three months ended ~~June~~September 30, 2015, gross revenues, cost of revenue and net loss for these investments were $nil, ~~$2.8~~$1.9 million and ~~$2.7~~$1.8 million, respectively (2014 — ~~$1.4 million,~~ $0.8 million, $0.2 million and ~~$0.2~~$1.5 million, respectively). For the ~~six~~nine months ended ~~June~~September 30, 2015, gross revenues, cost of revenue and net loss for these investments were $nil, ~~$4.5~~$6.4 million and ~~$4.4~~$6.2 million, respectively (2014 — ~~$2.3~~$3.1 million, ~~$1.7~~$1.9 million and ~~$1.0~~$2.5 million, respectively). The Company has determined it is not the primary beneficiary of these VIEs, and therefore these entities have not been consolidated. In addition, the Company has an investment in preferred stock of another business venture of $1.5 million which meets the criteria for classification as a debt security under the FASB ASC 320 and is recorded at its fair value of $nil at ~~June~~September 30, 2015 (December 31, 2014 — $nil). This investment was classified as an available-for-sale investment. Furthermore, during the quarter ended September 30, 2015, the Company invested $1.0 million in the shares of an exchange traded fund. This investment is also classified as an available-for-sale investment. The Company has an investment of $2.5 million in the preferred shares of an enterprise which meet the criteria for classification as an equity security under FASB ASC 325. As at ~~June~~September 30, 2015, the carrying value of the Company’s investment in preferred shares is $0.3 million (December 31, 2014 — $0.6 million). The total carrying value of investments in new business ventures at ~~June~~September 30, 2015 is ~~$1.7~~$3.2 million (December 31, 2014 — $3.4 million) and is recorded in Other Assets.

Pursuant to the transaction, IMAX China issued the investors 337,500 Common C Shares of par value $0.01 each in the authorized capital of IMAX China (the “Class C Shares”) for an aggregate subscription price of $40.0 million (the “First Closing”) on April 8, 2014 (the “First Completion Date”), and issued the investors another 337,500 Class C Shares for an aggregate subscription price of $40.0 million (the “Second Closing”) on February 10, 2015 (the “Second Completion Date”). IMAX China remains a consolidated subsidiary of the Company. Since second quarter of 2014, the Company’s condensed consolidated financial statements have included the non-controlling interest in the net income of IMAX China resulting from this transaction and the net proceeds have been classified as redeemable non-controlling interest in temporary equity.

The parties entered into a shareholders’ agreement in connection with the IMAX China Investment (the “Shareholders’ Agreement”), which terminated upon completion of the initial public offering of IMAX China on the Main Board of the Hong Kong Stock Exchange Limited on October 8, 2015 (the “IMAX China IPO”) (see subsequent event discussion below). While in effect, the Shareholders’ Agreement imposed certain restrictions on share transfers. Under the ~~shareholders’ agreement,~~Shareholders’ Agreement, holders of Class C Shares ~~may~~were not permitted to transfer any Class C Shares except (i) to certain permitted transferees, (ii) pursuant to any sale of Class C Shares on the public market in connection with or following an ~~IPO,~~initial public offering, and (iii) subject to the right of first offer of the holder of common A shares of par value $0.01 each in the authorized capital of IMAX China (the “Class A Shares”). With respect to transfers of Class A Shares prior to an ~~IPO,~~initial public offering, the ~~shareholders’ agreement~~Shareholders’ Agreement also ~~provides~~provided certain drag-along rights to the holder of Class A Shares and certain tag-along rights and put rights to holders of Class C Shares.

The shareholders’ agreement provides that each of FountainVest and CMC has the right to nominate one member of IMAX China’s board of directors so long as each owns at least 90.0% of the Class C Shares issued to such person at both the First Completion Date and Second Completion Date. This right will lapse on successful completion of an initial public offering of IMAX China provided that the terms of the initial public offering fulfill certain designated criteria. The holder of Class A Shares has the right to nominate seven members, including an independent director reasonably satisfactory to the holders of Class C Shares.

Prior to May 28, 2015, the board of directors of IMAX China consisted of nine members. In connection with IMAX China’s submission of an application on Form A1 for the purposes of an IPO on the main board of the Stock Exchange of Hong Kong Limited, and conditional upon completion of such IPO, five of the nine members of the board of directors of IMAX China resigned and three new board members were appointed. Two additional board members are expected to be appointed upon completion of the IPO.

~~The shareholders’ agreement entered into in connection with the transaction~~Shareholders’ Agreement also ~~contains~~contained restrictions on the transfer of IMAX China’s common shares and certain provisions relating to the redemption and share issuance in lieu of an initial public offering of IMAX China’s shares and put and call rights relating to a change of control of the Company.

The ~~shareholders’ agreement entered into~~Shareholders’ Agreement also provided that, in ~~connection with~~ the ~~transaction provides that IMAX China intends~~event a qualified initial public offering (as defined in the Shareholders’ Agreement) failed to ~~conduct an IPO of its shares~~occur by the fifth anniversary of the First Completion ~~Date. If a qualified IPO (as defined in the shareholders’ agreement) has not occurred by such date,~~Date, each holder of Class C Shares ~~may~~would have been entitled to request that all of such holders’ Class C Shares, at their election, either be: (i) redeemed by IMAX China at par value together with the issuance of 2,846,000 of the Company’s common shares, (ii) redeemed by IMAX China at par value together with the payment by the Company in cash of the consideration paid by the holders of the Class C Shares, or (iii) exchanged and/or redeemed by IMAX China in a combination of cash and the shares of the Company equal to the pro rata fair market value of IMAX China.

~~In the event that the Company reasonably believes that~~ These rights terminated as a ~~transaction involving a change of control~~result of the ~~Company will occur,~~IMAX China IPO, which was a qualified initial public offering for purposes of the ~~Company will serve~~Shareholders’ Agreement. All IMAX China shares have been re-designated into a ~~notice~~single class of shares.

The board of directors of IMAX China previously consisted of nine members, one of whom was appointed by CMC, one of whom was appointed by FountainVest, and one of whom was independent. On May 28, 2015, in connection with IMAX China’s submission of an application on ~~each holder~~Form A1 for the purposes of ~~Class C Shares. Upon receipt~~the IMAX China IPO, and conditional upon completion of such ~~notice, each holder~~initial public offering, five of ~~Class C Shares will have~~ the ~~right to cause~~nine members of the ~~Company to purchase all~~board of its Class C Shares, and the holder of Class A Shares will also have the right to purchase from each holder of Class C Shares all of its Class C Shares, each for consideration based upon the pro rata equity valuedirectors of IMAX ~~China.~~China resigned and three new board members were appointed. Two additional independent board members were appointed upon completion of the IMAX China IPO.

~~The shareholders’ agreement will terminate~~By its terms, the Shareholders’ Agreement terminated on the earliest to occur of (i) ~~an IPO,~~a qualified initial public offering, (ii) a redemption or share exchange in lieu of an IPO after the fifth anniversary on the First Completion Date, (iii) completion of a put or call transaction pursuant to a change of control of the Company, and (iv) any date agreed upon in writing by all of the parties to the ~~shareholders’ agreement. The shareholders’ agreement will also terminate with respect to any shareholder at such time as such shareholder no longer beneficially and legally holds any shares.~~Shareholders’ Agreement. Following completion of the IMAX China IPO the Shareholders’ Agreement automatically terminated.

The following summarizes the movement of the non-controlling interest in the Company’s subsidiary for the ~~six~~nine months ended ~~June~~September 30, 2015:


Balance as at December 31, 2014	$	40,272		$	40,272
Issuance of subsidiary shares to a non-controlling interest		40,000			40,000
Share issuance costs from the issuance of subsidiary shares to a non-controlling interest		(2,000	)		(2,000	)
Net income attributable to non-controlling interest		3,330			5,275
Other comprehensive loss, net of tax		12			164
Accretion charges associated with redeemable common stock		484			747

Balance as at June 30, 2015	$	82,098
Balance as at September 30, 2015				$	84,458

On October 8, 2015, IMAX China completed the IMAX China IPO. The global offering comprised 71,300,000 IMAX China shares, or approximately 20% of the enlarged issued share capital of IMAX China, after exercise in full of the underwriters’ over–allotment option. As part of the offering, IMAX China received net proceeds of approximately $58.2 million, after deducting commissions, from the issuance of 17,825,000 new shares. The Company, through a wholly owned subsidiary, received net proceeds of approximately $103.7 million, after deducting commissions, from the sale of 26,737,400 sale shares (after exercise in full of the over-allotment). Following completion of the offering, the Company indirectly owns approximately 68.5% of IMAX China. IMAX China remains a consolidated subsidiary of the Company. Upon completion of the initial public offering in October 2015, the IMAX China non-controlling interest will be reclassified from temporary equity to shareholder’s equity.

The shares of IMAX China have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws.

On October 15, 2015, in satisfaction of its obligations under the Shareholders’ Agreement, IMAX China paid a dividend of $0.14 per share. As a result, the Company received $38.0 million and the non-controlling interest shareholders were paid $9.5 million.

In 2014, the Company announced the creation of the Film Fund to co-finance a portfolio of 10 original large-format films. The Film Fund, which is intended to be capitalized with up to $50.0 million, will finance an ongoing supply of original films that the Company believes will be more exciting and compelling than traditional documentaries. The initial investment in the Film Fund was committed to by a third party in the amount of $25.0 million, with the possibility of contributing additional funds. The Company, which will contribute $9.0 million to the Film Fund over five years, anticipates the Film Fund will be self-perpetuating, with a portion of box office proceeds reinvested into the Film Fund to generate a continuous ~~steady~~ flow of high-quality documentary content. The related production, financing and distribution agreement includes put and call rights relating to change of control of the rights, title and interest in the co-financed pictures.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

IMAX Corporation, together with its subsidiaries (the “Company”), is one of the world’s leading entertainment technology companies, specializing in motion picture technologies and presentations. The Company refers to all theaters using the IMAX theater system as “IMAX theaters.” IMAX offers a unique end-to-end cinematic solution combining proprietary software, theater architecture and equipment to create the highest-quality, most immersive motion picture experience for which the IMAX^® brand has become known globally. Top filmmakers and studios utilize IMAX theaters to connect with audiences in innovative ways, and, as such, IMAX’s network is among the most important and successful theatrical distribution platforms for major event films around the world. There were ~~976~~1,008 IMAX theater systems ~~(852~~(887 commercial multiplexes, 2019 commercial destinations, ~~104~~102 institutional) operating in 6566 countries as of ~~June~~September 30, 2015. This compares to ~~868~~880 theater systems ~~(735~~(751 commercial multiplexes, 19 commercial destinations, ~~114~~110 institutional) operating in 5960 countries as of ~~June~~September 30, 2014.

Together these components cause audiences in IMAX theaters to feel as if they are a part of the on-screen action, creating a more intense, immersive and exciting experience than in a traditional theater.

As a result of the immersiveness and superior image and sound quality ofTheIMAX Experience, the Company’s exhibitor customers typically charge a premium for IMAX DMR films over films exhibited in their other auditoriums. The premium pricing, combined with the higher attendance levels associated with IMAX DMR films, generates incremental box-office for the Company’s exhibitor customers and for the movie studios releasing their films to the IMAX network. The incremental box-office generated by IMAX DMR films has helped establish IMAX as a key premium distribution and marketing platform for Hollywood blockbuster films. Driven by the advent of digital technology that reduced the IMAX DMR conversion time and with the strengthening of the Company’s relationships with the major studios, the number of IMAX DMR films released to the theater network per year has increased to 40 films in 2014, up from 6 films in 2007. The Company expects to release a slightly higher number of IMAX DMR films in 2015 as compared to 2014.

As one of the world’s leaders in entertainment technology, the Company strives to remain at the forefront of advancements in cinema technology. Accordingly, one of the Company’s key initiatives has been the development of its next-generation laser-based digital projection system, which it began rolling out at the end of 2014. In order to develop the laser-based digital projection system, the Company obtained exclusive rights to certain laser projection technology and other technology with applicability in the digital cinema field from Eastman Kodak Company (“Kodak”) in 2011 and entered a co-development arrangement with Barco N.V. (“Barco”) to co-develop a laser-based digital projection system that incorporates Kodak technology in 2012. Furthermore, in 2014, the Company announced an agreement with Necsel IP, Inc. (“Necsel”) to be the exclusive worldwide provider of specified lasers for IMAX’s laser projection systems in exchange for preferred pricing and supply terms. The Company believes that these arrangements with Kodak, Barco and Necsel have enabled IMAX laser projectors to present greater brightness and clarity, higher contrast, a wider color gamut and deeper blacks, and consume less power and last longer than existing digital technology. The laser projection solution is the first IMAX digital projection system capable of illuminating the largest screens in its network. As at ~~June~~September 30, 2015, ~~four~~11 laser-based digital theater systems were operational.

The Company is also undertaking new lines of business, particularly in the area of home entertainment. In 2013, the Company announced new home theater initiatives, including a joint venture with TCL Multimedia Technology Holding Limited (“TCL”) to

design, develop, manufacture and sell a premium home theater. In 2014, the Company and TCL announced that Wasu Digital TV media group was joining the joint-venture partnership, and would license and distribute content to the new home theater system. In June 2015, the Company and TCL unveiled the new premium home theater system in Shanghai, and expect to focus sales of the new system in China, the Middle East and other select global markets. ~~In 2014, the Company, and TCL announced that Wasu Digital TV media group was joining the joint-venture partnership and would license and distribute content to the new home theater system.~~ Beyond its premium home theater, the Company is also developing other components of its broader home entertainment platform designed to allow consumers to experience elements ofTheIMAXExperience^® in their homes.

Important factors that the Company’s Chief Executive Officer (“CEO”) Richard L. Gelfond uses in assessing the Company’s business and prospects include:

The primary revenue sources for the Company can be categorized into two main groups: theater systems and films. On the theater systems side, the Company derives revenues from theater exhibitors primarily through either a sale or sales-type lease arrangement or a joint revenue sharing arrangement. Theater exhibitors also pay for associated maintenance and extended warranty services. Film revenue is derived primarily from film studios for the provision of film production and digital re-mastering services for exhibition on IMAX theater systems around the world. The Company derives other film revenues from the distribution of certain films and the provision of post-production services. The Company also derives a small portion of other revenues from the operation of its own theaters, the provision of aftermarket parts for its system components, and camera rentals.

IMAX Theater Systems: IMAX Systems (Sales and Sales-type Leases), Joint Revenue Sharing Arrangements and Theater System Maintenance

One of the Company’s principal businesses is the design, manufacture and delivery of premium theater systems (“IMAX theater systems”). The theater system equipment components (including the projection system, sound system, screen system and, if applicable, 3D glasses cleaning machine), theater design support, supervision of installation, projectionist training and the use of the IMAX brand are all elements of what the Company considers the system deliverable. The IMAX theater systems are based on proprietary and patented technology developed over the course of the Company’s 48-year history. The Company provides IMAX theater systems to customers through sales, long-term leases or under joint revenue sharing arrangements. The Company’s customers who purchase, lease or otherwise acquire the IMAX theater systems through joint revenue sharing arrangements are theater exhibitors that operate commercial theaters (particularly multiplexes), museums, science centers, or destination entertainment sites. The Company generally does not own IMAX theaters, but licenses the use of its trademarks along with the sale, lease or contribution of the IMAX theater system.

The Company provides IMAX theater systems to customers on a sales or long-term lease basis, typically with an initial 10-year term. These agreements typically require the payment of initial fees and ongoing fees (which can include a fixed minimum amount per annum and contingent fees in excess of the minimum payments), as well as maintenance and extended warranty fees. The initial fees vary depending on the system configuration and location of the theater. Initial fees are paid to the Company in installments between the time of system signing and the time of system installation, which is when the total of these fees, in addition to the present value of future annual minimum payments, are recognized as revenue. Ongoing fees are paid over the term of the contract, commencing after the theater system has been installed, and are equal to the greater of a fixed minimum amount per annum or a percentage of box-office receipts. Contingent payments in excess of fixed minimum ongoing payments are recognized as revenue when reported by theater operators, provided collectibility is reasonably assured. Typically, ongoing fees are indexed to a local consumer price index. Finance income is derived over the term of a financed sale or sales-type lease arrangement as the unearned income on that financed sale or sales-type lease is earned.

Under the Company’s sales agreements, title to the theater system equipment components passes to the customer. In certain instances, however, the Company retains title or a security interest in the equipment until the customer has made all payments required under the agreement. Under the terms of a sales-type lease agreement, title to the theater system equipment components remains with the Company. The Company has the right to remove the equipment for non-payment or other defaults by the customer.

The revenue earned from customers under the Company’s theater system sales or lease agreements varies from quarter to quarter and year to year based on a number of factors, including the number and mix of theater system configurations sold or leased, the timing of installation of the theater systems, the nature of the arrangement and other factors specific to individual contracts.

The Company also provides IMAX theater systems to customers under joint revenue sharing ~~arrangements.~~arrangements (“JRSA”). The Company has two basic types of joint revenue sharing arrangements: traditional and hybrid.

Under a traditional joint revenue sharing arrangement, the Company provides the IMAX theater system in return for a portion of the customer’s IMAX box-office receipts and, in some cases, concession revenues, rather than requiring the customer to pay a fixed upfront payment or annual minimum payments. Payments, which are based on box-office receipts, are required throughout the term of the arrangement and are due either monthly or quarterly. Certain maintenance and extended warranty services are provided to the customer for a separate fixed annual fee. The Company retains title to the theater system equipment components, and the equipment is returned to the Company at the conclusion of the arrangement.

Under a hybrid joint revenue sharing arrangement, by contrast, the customer is responsible for making upfront payments prior to the delivery and installation of the IMAX theater system in an amount that is typically half of what the Company would receive from a straight sale transaction. As with a traditional joint revenue sharing arrangement, the customer also pays the Company a portion of the customer’s IMAX box-office receipts over the term of the arrangement, although the percentage of box-office receipts owing to the Company is typically half that of a traditional joint revenue sharing arrangement. The Company generally retains title to the theater system equipment components, and the equipment is returned to the Company at the conclusion of the arrangement. In limited instances, however, title to the theater system equipment components passes to the customer.

Under the significant majority of joint revenue sharing arrangements (both traditional and hybrid), the initial non-cancellable term of IMAX theater systems is 10 years or longer, and is renewable by the customer for one to two additional terms of between three to five years. The Company has the right to remove the equipment for non-payment or other defaults by the customer. The contracts are non-cancellable by the customer unless the Company fails to perform its obligations.

The introduction of joint revenue sharing arrangements has been an important factor in the expansion of the Company’s commercial theater network, which has grown by approximately ~~387%~~406% since the beginning of 2008. Joint revenue sharing arrangements allow commercial theater exhibitors to install IMAX theater systems without the significant initial capital investment required in a sale or sales-type lease arrangement. Joint revenue sharing arrangements drive recurring cash flows and earnings for the Company, as customers under joint revenue sharing arrangements pay the Company a portion of their ongoing box-office. The Company funds its joint revenue sharing arrangements through cash flows from operations. As at ~~June~~September 30, 2015, the Company ~~had~~

~~477~~had 498 theaters in operation under joint revenue sharing arrangements, a ~~16.9%~~18.0% increase as compared to the ~~408~~422 joint revenue sharing arrangements open as at ~~June~~September 30, 2014. The Company also had contracts in backlog for an additional ~~210~~209 theaters under joint revenue sharing arrangements as at ~~June~~September 30, 2015.

The revenue earned from customers under the Company’s joint revenue sharing arrangements can vary from quarter to quarter and year to year based on a number of factors including film performance, the mix of theater system configurations, the timing of installation of these theater systems, the nature of the arrangement, the location, size and management of the theater and other factors specific to individual arrangements.

For all IMAX theaters, theater owners or operators are also responsible for paying the Company an annual maintenance and extended warranty fee. Under these arrangements, the Company provides proactive and emergency maintenance services to every theater in its network to ensure that each presentation is up to the highest IMAX quality standard. Annual maintenance fees are paid throughout the duration of the term of the theater agreements and are typically indexed to a local consumer price index.

The Company derives a small portion of its revenues from other sources. As at ~~June~~September 30, 2015, the Company had three owned and operated IMAX theaters (December 31, 2014 —– three owned and operated theaters). In addition, the Company has a commercial arrangement with one theater resulting in the sharing of profits and losses and provides management services to two other theaters. The Company also rents its proprietary 2D and 3D large-format film and digital cameras to third party production companies. The Company maintains cameras and other film equipment and also offers production advice and technical assistance to both documentary and Hollywood filmmakers. Additionally, the Company generates revenues from the sale of after-market parts and 3D glasses.

Revenue from theater system arrangements is recognized at a different time from when cash is collected. See “Critical Accounting Policies” in Item 7 of the Company’s Form 10-K for the year ended December 31, 2014 (the “2014 Form 10-K”) for further discussion on the Company’s revenue recognition policies.

The following table outlines the breakdown of the theater network by type and geographic location as at ~~June~~September 30:


	2015 Theater Network Base								2014 Theater Network Base								2015 Theater Network Base								2014 Theater Network Base
	Commercial Multiplex		Commercial Destination		Institutional		Total		Commercial Multiplex		Commercial Destination		Institutional		Total		Commercial Multiplex		Commercial Destination		Institutional		Total		Commercial Multiplex		Commercial Destination		Institutional		Total
United States		333		7		49		389		324		6		53		383		333		6		48		387		325		6		50		381
Canada		37		2		8		47		35		2		8		45		37		2		8		47		35		2		8		45
Greater China⁽¹⁾		232		—		18		250		163		—		23		186		258		-		17		275		176		-		22		198
Asia (excluding Greater China)		73		3		6		82		66		3		6		75		76		3		6		85		66		3		6		75
Western Europe		62		7		10		79		51		7		11		69		65		7		10		82		52		7		11		70
Russia & the CIS		48		—		—		48		42		—		—		42		48		-		-		48		42		-		-		42
Latin America⁽²⁾		33		—		11		44		28		—		11		39		34		-		11		45		29		-		11		40
Rest of the World		34		1		2		37		26		1		2		29		36		1		2		39		26		1		2		29

Total		852		20		104		976		735		19		114		868		887		19		102		1,008		751		19		110		880

As of ~~June~~September 30, 2015, ~~44.7%~~43.1% of IMAX systems in operation were located in the United States and Canada compared to ~~49.3%~~48.4% as at ~~June~~September 30, 2014.

To minimize the Company’s credit risk, the Company retains title to the underlying theater systems under lease arrangements, performs initial and ongoing credit evaluations of its customers and makes ongoing provisions for its estimates of potentially uncollectible amounts.

The Company currently believes that over time its commercial multiplex theater network could grow to approximately 2,450 IMAX theaters worldwide from ~~852~~887 commercial multiplex IMAX theaters operating as of ~~June~~September 30, 2015. While the Company continues to grow in the United States and Canada, it believes that the majority of its future growth will come from international markets. As at ~~June~~September 30, 2015, ~~55.3%~~56.9% of IMAX theater systems in operation were located within international markets (defined as all countries other than the United States and Canada), up from ~~50.7%~~51.6% as at ~~June~~September 30, 2014. Revenues and gross box-office derived from outside the United States and Canada continues to exceed revenues and gross box-office from the United States and Canada. Risks associated with the Company’s international business are outlined in Risk Factors – “The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales and future growth prospects” in Item 1A of the Company’s 2014 Form 10-K.

Greater China continues to be the Company’s second-largest and fastest-growing market. As at ~~June~~September 30, 2015, the Company had ~~250~~275 theaters operating in Greater China with an additional 218 theaters (including three upgrades) in backlog that are scheduled to be installed in Greater China by 2021. The Company’s backlog in Greater China represents ~~55.8%~~56.8% of the Company’s current backlog. The Company continues to invest in joint revenue sharing arrangements with select partners to ensure ongoing revenue in this key market. The Company’s largest single international partnership is in China with Wanda Cinema Line Corporation (“Wanda”). Wanda’s total commitment to the Company is for 210 theater systems, of which 195 theater systems are under the parties’ joint revenue sharing arrangement. Furthermore, the Company has a partnership with CJ CGV Holdings, Ltd., for a commitment of 97 theater systems, of which 75 theater systems will be located in China. The Company believes that the China market presents opportunities for additional growth with favorable market trends, including government initiatives to foster cinema screen growth, to support the film industry and to increase the number of Hollywood films distributed in China, including a 2012 agreement between the U.S. and the Chinese government to permit 14 additional IMAX or 3D format films to be distributed in China each year and to permit distributors to receive higher distribution fees. The Company cautions, however, that its expansion in China faces a number of challenges. See Risk Factors —– “The Company faces risks in connection with the continued expansion of its business in China” in Item 1A of the Company’s 2014 Form 10-K.

In 2010, the Company formed IMAX China Holding, Inc. (“IMAX China”) to facilitate the Company’s expansion in China. As of December 31, 2014, IMAX China had offices in Shanghai and Beijing and a total of 62 employees.

On April 8, 2014, the Company announced the sale and issuance of 20% of the shares of IMAX China ~~Holding, Inc. (“IMAX China”)~~ to entities owned and controlled by CMC Capital Partners (“CMC”), an investment fund that is focused on media and entertainment, and FountainVest Partners (“FountainVest”), a China-focused private equity firm (collectively, the “IMAX China Investment”). The sale price for the interest was $80.0 million, and was paid by the investors in two equal installments. The first installment was received on April 8, 2014, and the second installment was received on February 10, 2015. ~~IMAX China remains a consolidated subsidiary of the Company.~~

The Company believes there have been a number of financial, strategic and operating benefits resulting from the IMAX China Investment. In particular, the Company believes that the investors’ knowledge of, and influence in, the Chinese media and entertainment industry has contributed to the continued expansion of IMAX’s theater network in China and the further strengthening of the Company’s government and industry relationships within China.

On ~~May 28,~~October 8, 2015, ~~the Company announced that~~ IMAX China ~~submitted an application on Form A1 in connection with~~completed an initial public offering of ~~IMAX China~~its ordinary shares on the ~~main board~~Main Board of ~~the Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”). The Form A1, which includes a redacted application proof of the listing document, was posted on~~ the Hong Kong Stock Exchange ~~website~~Limited (the “IMAX China IPO”). The Company continues to indirectly own approximately 68.5% of IMAX China, which remains a consolidated subsidiary of the Company, while CMC and ~~made available for viewing and downloading~~FountainVest continue to ~~investors in Hong Kong. There have not been any final decisions made regarding the timing or terms~~own approximately 5.7% each of ~~any listing, and the proposed listing is subject to, among other things, market conditions and approval by the Hong Kong Stock Exchange. Accordingly, there is no assurance~~IMAX China. The Company believes that the ~~proposed listing~~IMAX China IPO provides investors the ability to directly access and evaluate the IMAX China business, and provides greater clarity into the business’s performance in the fastest-growing entertainment market in the world. The Company believes that the introduction of additional local Chinese investors into the IMAX China business further solidifies the Company’s position in Greater China. The Company anticipates that proceeds from the IMAX China IPO will be ~~completed~~used to expand the IMAX theater network in ~~a timely matter or at all, nor is there any assurance regarding~~Greater China, to increase the ~~impact~~number of ~~the proposed listing on~~joint revenue sharing arrangements with the Company’s ~~common stock.~~exhibitor partners, to strengthen the Company’s cooperation with Chinese studios and filmmakers, and for general corporate purposes.

The following table outlines the breakdown of the Commercial Multiplex theater network by arrangement type and geographic location as at ~~June~~September 30:


	2015						2014						2015						2014
	IMAX Commercial Multiplex Theater Network						IMAX Commercial Multiplex Theater Network						IMAX Commercial Multiplex Theater Network						IMAX Commercial Multiplex Theater Network
	JRSA		Sale / Sales- type lease		Total		JRSA		Sale / Sales- type lease		Total		JRSA		Sale / Sales- type lease		Total		JRSA		Sale / Sales- type lease		Total
Domestic Total (United States & Canada)		255		115		370		247		112		359		254		116		370		248		112		360

International:
Greater China		140		92		232		94		69		163		159		99		258		105		71		176
Asia (excluding Greater China)		39		34		73		33		33		66		40		36		76		34		32		66
Western Europe		35		27		62		30		21		51		37		28		65		31		21		52
Russia & the CIS		—		48		48		—		42		42		-		48		48		-		42		42
Latin America		—		33		33		—		28		28		-		34		34		-		29		29
Rest of the World		8		26		34		4		22		26		8		28		36		4		22		26

International Total		222		260		482		161		215		376		244		273		517		174		217		391

Worldwide Total		477		375		852		408		327		735		498		389		887		422		329		751

As at ~~June~~September 30, 2015, ~~255~~254 (2014 — ~~247)~~248) of the ~~477~~498 (2014 — ~~408)~~422) theaters under joint revenue sharing arrangements in operation, or ~~53.5%~~51.0% (2014 — ~~60.5%~~58.8%) were located in the United States and Canada, with the remaining ~~222~~244 (2014 — ~~161)~~174) or ~~46.5%~~49.0% of arrangements being located in international markets. The Company continues to seek to expand its network of theaters under joint revenue sharing arrangements, particularly in select international markets.


	June 30, 2015					June 30, 2014					September 30, 2015					September 30, 2014
	Number of Systems			Dollar Value *(in thousands)*		Number of Systems			Dollar Value *(in thousands)*		Number of Systems			Dollar Value *(in thousands)*		Number of Systems			Dollar Value *(in thousands)*
Sales and sales-type lease arrangements		181		$	237,289		173		$	220,425		175		$	228,907		191		$	244,216
Joint revenue sharing arrangements		210			42,427		246			51,785		209			47,664		248			51,151

		391	⁽¹⁾⁽²⁾	$	279,716		419	⁽¹⁾⁽³⁾	$	272,210		384	⁽¹⁾⁽²⁾	$	276,571		439	⁽¹⁾⁽³⁾	$	295,367

The number of theater systems in the backlog reflects the minimum number of commitments under signed contracts. The dollar value fluctuates depending on the number of new theater system arrangements signed from quarter to quarter, which adds to backlog, and the installation and acceptance of theater systems and the settlement of contracts, both of which reduce backlog. Sales backlog typically represents the fixed contracted revenue under signed theater system sale and lease agreements that the Company believes will be recognized as revenue upon installation and acceptance of the associated theater. Sales backlog includes initial fees along with the estimated present value of contractual ongoing fees due over the lease term; however, it excludes amounts allocated to maintenance and extended warranty revenues as well as fees in excess of contractual ongoing fees that may be received in the future.

The value of sales backlog does not include revenue from theaters in which the Company has an equity interest, operating leases, letters of intent or long-term conditional theater commitments. The value of theaters under joint revenue sharing arrangements is excluded from the dollar value of sales backlog, although certain theater systems under joint revenue sharing arrangements provide for contracted upfront payments and therefore carry a backlog value based on those payments. The Company believes that the contractual obligations for theater system installations that are listed in sales backlog are valid and binding commitments.

From time to time, in the normal course of its business, the Company will have customers who are unable to proceed with a theater system installation for a variety of reasons, including the inability to obtain certain consents, approvals or financing. Once the determination is made that the customer will not proceed with installation, the agreement with the customer is terminated or amended. If the agreement is terminated, once the Company and the customer are released from all their future obligations under the agreement, all or a portion of the initial rents or fees that the customer previously made to the Company are recognized as revenue.

The following table outlines the breakdown of the total backlog by arrangement type and geographic location as at ~~June~~September 30:

Approximately 87% of IMAX theater system arrangements in backlog as at ~~June~~September 30, 2015 are scheduled to be installed in international markets (2014 ~~— 87%~~– 86%).

The following reflects the Company’s signings and installations for the periods ended ~~June~~September 30:


	For the Three Months Ended June 30,						For the Six Months Ended June 30,						For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2015			2014			2015			2014			2015			2014			2015			2014
Theater System Signings:
Full new sales and sales-type lease arrangements		19	⁽¹⁾		17			31	⁽¹⁾		49	⁽¹⁾		11			22			42	⁽¹⁾		71	⁽¹⁾
New joint revenue sharing arrangements		9			3			17			6			22			14			39			20

Total new theaters		28			20			48			55			33			36			81			91
Upgrades of IMAX theater systems		2	⁽²⁾		4	⁽²⁾⁽⁴⁾		3	^(2)(3)(4)		5	⁽²⁾⁽⁴⁾		2	⁽²⁾		6	⁽³⁾		5	⁽⁴⁾⁽⁵⁾		11	⁽⁴⁾⁽⁵⁾

Total theater signings		30			24			51			60			35			42			86			102


													For the Three Months Ended September 30,						For the Nine Months Ended September 30,
													2015			2014			2015			2014
Theater System Installations:
Full new sales and sales-type lease arrangements														12			6			32			20
New joint revenue sharing arrangements														22			14			48			38

Total new theaters														34			20			80			58
Upgrades of IMAX theater systems														10	⁽⁶⁾		-			12	⁽⁷⁾⁽⁸⁾		6	⁽⁷⁾

Total theater installations														44			20			92			64

The Company now expects that it will install approximately ~~120~~130 new theater systems (excluding digital upgrades) in 2015. The Company’s installation estimates includes scheduled systems from backlog, as well as the Company’s estimate of installations from arrangements that will sign and install in the same calendar year. The Company cautions, however, that theater system installations may slip from period to period over the course of the Company’s business, usually for reasons beyond its control.

In 2002, the Company developed a proprietary technology to digitally re-master Hollywood films into IMAX digital cinema package format or 15/70-format film for exhibition in IMAX theaters at a modest cost that is incurred by the Company. This system,

known as IMAX DMR, digitally enhances the image resolution of motion picture films for projection on IMAX screens while maintaining or enhancing the visual clarity and sound quality to levels for whichThe IMAXExperience^® is known. This technology has enabled the IMAX theater network to release Hollywood films simultaneously with their broader domestic release. The development of this technology was critical in helping the Company execute its strategy of expanding its commercial theater network by establishing IMAX theaters as a key, premium distribution platform for Hollywood films. In a typical IMAX DMR film arrangement, the Company receives a percentage, which ranges between 10-15%, of net box-office receipts of any commercial films released in the IMAX network from the applicable film studio for the conversion of the film to the IMAX DMR format and for access to the Company’s premium distribution platform.

IMAX films benefit from enhancements made by individual filmmakers exclusively for the IMAX release, and filmmakers and studios have sought IMAX-specific enhancements in recent years to generate interest in and excitement for their films. Such enhancements include shooting selected scenes with IMAX cameras to increase the audience’s immersion in the film and taking

advantage of the unique dimensions of the IMAX screen by shooting the film in a larger aspect ratio. Certain films also enjoy early release windows in IMAX, including ~~the upcoming films~~Everest: AnIMAX3D ExperienceandThe Walk: TheIMAXExperience,which ~~will be~~were released aone week early in IMAX ~~theatres.~~theaters in September 2015. Several recent films have featured select sequences shot with IMAX cameras includingInterstellar: The IMAXExperience, released in November 2014;Transformers Age of Extinction: AnIMAX3D Experience, released in June 2014;Star Trek Into Darkness: AnIMAX3D Experience, released in May 2013; andThe Hunger Games:Catching Fire: TheIMAXExperience, released in November ~~2013 and~~~~The Dark Knight Rises: The~~ ~~IMAX~~~~Experience~~~~, released in July 2012, which featured over an hour of footage shot with IMAX cameras.~~2013. Several upcoming films, includingStar Wars: The Force Awakens: AnIMAX3D Experience,Captain America: Civil War: TheIMAXExperienceandBatman v Superman: Dawn of Justice: TheIMAX Experiencehave also announced that certain sequences will be shot using the IMAX cameras and it has been announced that Marvel’s Avengers: Infinity War —- Parts 1 & 2 will be shot in their entireties using the IMAX camera, which is the first time a full feature length movie will be filmed with the IMAX cameras. In addition, several recent movies, includingTomorrowland: The IMAXExperience, released in May 2015,Guardians of the Galaxy: An IMAX3D Experience, released in August 2014;Transformers: Age of Extinction: An IMAX3D Experience, released in June 2014;Oblivion: The IMAXExperience, released in 2013 andSkyfall: The IMAXExperience, released in 2012 have featured footage taking advantage of the larger projected IMAX aspect ratio.

The original soundtrack of a film to be released to the IMAX network is re-mastered for the IMAX five or six-channel digital sound systems in connection with the IMAX DMR release. Unlike the soundtracks played in conventional theaters, IMAX re-mastered soundtracks are uncompressed and full fidelity. IMAX sound systems use proprietary loudspeaker systems and proprietary surround sound configurations that ensure every theater seat is in a good listening position.

The Company believes that the growth in international box-office will continue to be an important driver of future growth for the Company. During the ~~six~~nine months ended ~~June~~September 30, 2015, ~~62.0%~~63.7% of the Company’s gross box-office from IMAX DMR films was generated in international markets, as compared to ~~60.4%~~61.6% in the ~~six~~nine months ended ~~June~~September 30, 2014. To support growth in international markets, the Company has sought to bolster its international film strategy, supplementing the Company’s film slate of Hollywood DMR titles with appealing local IMAX DMR releases in select markets. During 2014, the Company released seven local language IMAX DMR films, including six in China and one in India. The Company released ~~four~~nine local language IMAX DMR films during the ~~six~~nine months ended ~~June~~September 30, 2015 and expects to announce additional local language IMAX DMR films to be released to the IMAX network in the remainder of 2015 and beyond.

In addition to the 2337 IMAX DMR films released to the IMAX theater network during the first ~~six~~nine months of 2015, 137 additional IMAX DMR films have been announced so far to be released in the remaining ~~six~~three months of 2015:

To date, the Company has announced the following 1415 titles to be released to the IMAX theater network in 2016:

•

Flight Crew: An IMAX 3DExperience (Russia-1 Channel, April 2016);

•

The Jungle Book: AnIMAX3D Experience(Walt Disney Studios, April 2016);

•

Captain America: Civil War: AnIMAX3D Experience(Walt Disney Studios, May 2016);

•

Alice Through theLooking Glass: An IMAX3D Experience (Walt Disney Studios, May 2016);

•

Warcraft: AnIMAX3D Experience(Universal Studios, ~~March~~June 2016);

In addition, in conjunction with Walt Disney Studios, the Company will be releasing an IMAX original production,A Beautiful Planet, on April 29, 2016.

The Company remains in active negotiations with all of the major Hollywood studios for additional films to fill out its short and long-term film slate, and anticipates that ~~a similar~~the number of IMAX DMR films ~~will~~to be released to the IMAX network in ~~2015~~2016 will be similar to the 4044 IMAX DMR films ~~that were released to the IMAX network~~slated for release in ~~2014.~~2015.

The Company is also a distributor of large-format films, primarily for its institutional theater partners. The Company generally distributes films which it produces or for which it has acquired distribution rights from independent producers. The Company receives either a percentage of the theater box-office receipts or a fixed amount as a distribution fee.

In 2014, the Company announced the creation of the IMAX Original Film Fund (the “Film Fund”) toco-finance a portfolio of 10 original large format films. The Film Fund, which is intended to be capitalized with up to $50.0 million, will finance an ongoing supply of original films that the Company believes will be more exciting and compelling than traditional documentaries. The initial investment in the Film Fund was committed to by a third party in the amount of $25.0 million, with the possibility of contributing additional funds. The Company, which will contribute $9.0 million to the Film Fund over five years, anticipates the Film Fund will be self-perpetuating, with a portion of box office proceeds reinvested into the Film Fund to generate a continuous ~~steady~~ flow of high-quality documentary content. In 2014, the Film Fund invested $7.5 million toward the development of original films.

The Company anticipates that the Film Fund will finance a number of Company-produced films going forward. Previously, films produced by the Company were typically financed through third parties, whereby the Company generally received a film production fee and a distribution fee in exchange for producing and distributing the film. The ownership rights to such films were held by the film sponsors, the film investors and/or the Company. ~~The Company utilizes third-party funding for the majority of original films it produces and distributes.~~ In 2014, the Company, in conjunction with WB, released an IMAX original production,Island of Lemurs: Madagascar.~~In 2012, the Company, along with WB and MacGillivray Freeman Films, Inc. (“MFF”), released an original title,~~~~To the Artic 3D.~~~~In 2011, the Company, along with WB, released~~~~Born to be Wild 3D~~. In January 2013, the Company announced an agreement with MFF to jointly finance, market and distribute up to four films (with an option for four additional films) produced by MFF to be released exclusively to IMAX theaters. The agreement is designed to ensure IMAX’s institutional theater partners have access to a ~~steady~~continuous flow of the highest-quality, large-format documentaries over the years to come. One of the four films produced under the MFF agreement,Journey to the South Pacifichad a limited release in November 2013 and a wide release in early 2014.

In addition, on June 16, 2015, the Company announced the creation of the IMAX China Film Fund (the “China Film Fund”) with its subsidiary IMAX China and its partner CMC to help fund Mandarin language commercial films. The China Film Fund, which is expected initially to be capitalized with up to $50.0 million, will target productions that can leverage the Company’s brand, relationships, technology and release windows in China.

IMAX Post/DKP Inc. (formerly David Keighley Productions 70MM Inc.), a wholly-owned subsidiary of the Company, provides film post-production and quality control services for large-format films (whether produced internally or externally), and digital post-production services.

The Company prepares its consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”).

The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, management evaluates its estimates, including those related to selling prices associated with the individual elements in multiple element arrangements; residual values of leased IMAX theater systems; economic lives of leased assets; allowances for potential uncollectibility of accounts receivable, financing receivables and net investment in leases; write-downs for inventory obsolescence; ultimate revenues for film assets; impairment provisions for film assets, long-lived assets and goodwill; depreciable lives of property, plant and equipment; useful lives of intangible assets; pension plan and post retirement assumptions; accruals for contingencies including tax contingencies; valuation allowances for deferred income tax assets; and, estimates of the fair value and expected exercise dates of stock-based payment awards. Management bases its estimates on historical experience, future expectations and other assumptions that are believed to be reasonable at the date of the consolidated financial statements. Actual results may differ from these estimates due to uncertainty involved in measuring, at a specific point in time, events which are continuous in nature, and differences may be material. The Company’s significant accounting policies are discussed in Item 7 of the Company’s 2014 Form 10-K.

~~The adoption of new accounting policies and recently issued FASB accounting standard codification updates were not material~~See note 2 to the ~~Company’s~~ condensed consolidated financial statements in Item 1 for information regarding the ~~period ended June 30, 2015.~~Company’s recent changes in accounting policies and the impact of recently issued accounting pronouncements.

In this report, the Company presents adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share as supplemental measures of performance of the Company, which are not recognized under U.S. GAAP. The Company presents adjusted net income and adjusted net income per diluted share because it believes that they are important supplemental measures of its comparable controllable operating performance and it wants to ensure that its investors fully understand the impact of its stock-based compensation (net of any related tax impact) on net income. In addition, the Company presents adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share because it believes that they are important supplemental measures of its comparable financial results and could potentially distort the analysis of trends in business performance and it wants to ensure that its investors fully understand the impact of net income attributable to non-controlling interests and its stock-based compensation (net of any related tax impact) in determining net income attributable to common shareholders. The Company presents adjusted gross margin from its joint revenue sharing arrangements segment excluding initial launch costs because it believes that it is an important supplemental measure used by management to evaluate ongoing joint revenue sharing arrangement theater performance. Management uses these measures to review operating performance on a comparable basis from period to period. However, these non-GAAP measures may not be comparable to similarly titled amounts reported by other companies. Adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share should be considered in addition to, and not as a substitute for, net income and net income attributable to common shareholders and other measures of financial performance reported in accordance with U.S. GAAP.

Management, including the Company’s CEO, who is the Company’s Chief Operating Decision Maker (as defined in the Segment Reporting Topic of the FASB ASC), assesses segment performance based on segment revenues, gross margins and film performance. Selling, general and administrative expenses, research and development costs, amortization of intangibles, receivables provisions (recoveries), write-downs net of recoveries, interest income, interest expense and tax (provision) recovery are not allocated to the segments. As identified in note 13 to the accompanying condensed consolidated financial statements in Item 1, the Company has the following seven reportable segments identified by category of product sold or service provided:

The Company’s Management’s Discussion and Analysis (“MD&A”) of Financial Condition and Results of Operations has been organized by the Company into two primary reporting groups —– IMAX Theater Systems and Film. Each of the Company’s reportable segments, as identified above, has been classified into one of these broader reporting groups for purposes of MD&A discussion. The Company believes that this approach is consistent with management’s view of the business and is not expected to have an impact on the readers’ ability to understand the Company’s business. Management feels that a discussion and analysis based on its reporting groups is significantly more relevant as the Company’s consolidated statements of operations captions combine results from several segments.

Three Months Ended ~~June~~September 30, 2015 Versus Three Months Ended ~~June~~September 30, 2014

The Company reported net income of ~~$26.4~~$10.5 million or ~~$0.37~~$0.15 per basic share and ~~$0.36~~$0.14 per diluted share for the ~~second~~third quarter of 2015, as compared to ~~$13.8~~$5.3 million or ~~$0.20~~$0.08 per basic and diluted share for the ~~second~~third quarter of 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was ~~$30.7~~$13.9 million or ~~$0.42~~$0.19 per diluted share for the ~~second~~third quarter of 2015 as compared to adjusted net income of ~~$17.7~~$8.3 million or ~~$0.26~~$0.12 per diluted share for the ~~second~~third quarter of 2014. Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation and the related tax impact, was ~~$28.7~~$12.0 million or ~~$0.40~~$0.17 per diluted share for the ~~second~~third quarter of 2015 as compared to adjusted net income attributable to common shareholders of ~~$17.2~~$7.8 million or ~~$0.25~~$0.11 per diluted share for the ~~second~~third quarter of 2014. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measures, to adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:


														Three Months Ended						Three Months Ended
	Three Months Ended June 30, 2015						Three Months Ended June 30, 2014							September 30, 2015						September 30, 2014
	Net Income			Diluted EPS			Net Income			Diluted EPS				Net Income			Diluted EPS			Net Income			Diluted EPS
Reported net income	$	26,380		$	0.36	⁽¹⁾	$	13,779		$	0.20	⁽¹⁾		$	10,514		$	0.14	⁽¹⁾	$	5,297		$	0.08	⁽¹⁾
Adjustments:													Adjustments:
Stock-based compensation		5,103			0.07			4,715			0.07				4,252			0.06			3,425			0.05
Tax impact of items listed above		(740	)		(0.01	)		(828	)		(0.01	)			(901	)		(0.01	)		(464	)		(0.01	)

Adjusted net income		30,743			0.42	⁽¹⁾		17,666			0.26	⁽¹⁾			13,865			0.19	⁽¹⁾		8,258			0.12	⁽¹⁾
Net income attributable to non-controlling interests		(2,030	)		(0.02	)		(472	)		(0.01	)			(1,904	)		(0.02	)		(439	)		(0.01	)

Adjusted net income attributable to common shareholders	$	28,713		$	0.40	⁽¹⁾	$	17,194		$	0.25	⁽¹⁾		$	11,961		$	0.17	⁽¹⁾	$	7,819		$	0.11	⁽¹⁾

Weighted average diluted shares outstanding					71,688						69,452		Weighted average diluted shares outstanding					70,860						69,602

The following table sets forth the breakdown of revenue and gross margin by category:


	Revenue				Gross Margin					Revenue				Gross Margin
*(In thousands of US dollars)*	Three Months Ended June��30,				Three Months Ended June 30,					Three Months Ended September 30,				Three Months Ended September 30,
	2015		2014		2015			2014		2015		2014		2015			2014
IMAX Theater Systems
IMAX Systems
Sales and sales-type leases⁽¹⁾	$	18,674	$	14,478	$	10,038		$	8,255	$	26,635	$	6,644	$	9,775		$	4,246
Ongoing rent, fees, and finance income⁽²⁾		3,691		3,518		3,499			3,334		3,518		3,501		3,334			3,352
Other		4,674		3,730		(114	)		454		3,221		3,165		(267	)		(218	)

		27,039		21,726		13,423			12,043		33,374		13,310		12,842			7,380


Theater System Maintenance		9,158		8,673		3,089			2,781		9,337		8,516		3,521			3,208

Joint Revenue Sharing Arrangements		31,594		19,363		24,069			13,378		19,797		15,238		12,130			9,382


Film
Production and IMAX DMR		36,603		24,050		28,488			18,634		20,865		18,350		13,929			13,469
Film distribution and post-production		2,766		5,333		(34	)		958		1,728		5,328		(33	)		2,003

		39,369		29,383		28,454			19,592		22,593		23,678		13,896			15,472

	$	107,160	$	79,145	$	69,035		$	47,794	$	85,101	$	60,742	$	42,389		$	35,442

The Company’s revenues for the ~~second~~third quarter of 2015 increased by ~~35.4%~~40.1% to ~~$107.2~~$85.1 million from ~~$79.1~~$60.7 million in the same period last year, primarily due to an increase in revenues from the IMAX systems and joint revenue sharing arrangements ~~and film~~ segments. The gross margin across all segments in the ~~second~~third quarter of 2015 was ~~$69.0~~$42.4 million, or ~~64.4%~~49.8% of total revenue, compared to ~~$47.8~~$35.4 million, or ~~60.4%~~58.3% of total revenue in the ~~second~~third quarter of 2014. Impacting the gross margin was the installation of 7 laser-based digital upgrades in the current period which had lower margins. Gross margin, excluding the impact of these laser-based digital upgrades, was 55.2% of total revenue in the third quarter of 2015.

IMAX systems revenue increased ~~24.5%~~150.7% to ~~$27.0~~$33.4 million in the ~~second~~third quarter of 2015, as compared to ~~$21.7~~$13.3 million in the ~~second~~third quarter of 2014, resulting primarily from the installation of ~~three more~~6 additional full, new theater systems and 7 laser-based and one xenon-based digital system upgrades under sales or sales-type lease arrangements versus the prior-year period.

Revenue from sales and sales-type leases increased ~~29.0%~~300.9% to ~~$18.7~~$26.6 million in the ~~second~~third quarter of 2015 from ~~$14.5~~$6.6 million in the ~~second~~third quarter of 2014. The Company recognized revenue on 1412 full, new theater systems which qualified as either sales or sales-type leases in the ~~second~~third quarter of 2015, with a total value of ~~$17.8~~$14.5 million, as compared to 116 full, new theater systems in the ~~second~~third quarter of 2014, with a total value of ~~$13.3~~$6.4 million. ~~No digital upgrades were~~The Company recognized $10.4 million in ~~the current quarter as compared to~~total revenue from the installation of one xenon-based digital upgrade ~~with a total value of $0.9 million during the second quarter of 2014. One used xenon-based digital system was installed~~ and ~~recognized~~7 laser based-digital upgrades in the three months ended ~~June~~September 30, ~~2015 with a total value of $0.2 million while no used systems were installed in~~2015. During the three months ended ~~June~~September 30, ~~2014.~~2014, the Company did not recognize any revenue from digital upgrades. Laser-based and xenon-based digital upgrades typically have lower sales prices and gross margin than full, new theater system installations.

Average revenue per full, new sales and sales-type lease systems was ~~$1.3 million for the three months ended June 30, 2015, as compared to~~ $1.2 million for the three months ended ~~June~~September 30, 2015, as compared to $1.1 million for the three months ended September 30, 2014. The average revenue per full, new sales and sales-type lease systems varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location and other various factors. Average revenue per upgrade was $1.3 million for the three months ended September 30, 2015. No digital upgrades were recognized during the three months ended September 30, 2014.

The installation of theater systems in newly built theaters or multiplexes depends primarily on the timing of the construction of those projects, which is not under the Company’s control. The breakdown in mix of sales and sales-type lease and joint revenue sharing arrangements (see discussion below) installations by theater system configuration for the ~~second~~third quarter of 2015 and 2014 is outlined in the table below:

~~Settlement revenue was $0.1 million for the second quarter of 2015 as compared to $nil for the second quarter of 2014.~~

IMAX theater systems gross margin from full, new sales and sales-type leases was ~~65.7%~~58.6% in the ~~second~~third quarter of 2015 versus ~~61.7%~~61.2% in the ~~second~~third quarter of 2014. Gross margin from digital upgrades was ~~$nil in the second quarter of 2015, as compared to $0.6~~$1.2 million in the ~~second quarter of 2014. Gross margin on used systems was a loss of $0.2 million in the second~~third quarter of 2015, as compared to $nil in the ~~second~~third quarter of 2014. Gross margin varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location and other various factors. Included in IMAX theater systems margin is a charge of $0.4 million for the three months ended June 30, 2015 (2014 — $nil) due to a reduction in the net realizable value of its inventories. No similar charges were recorded in the second quarter of 2014.

In the second quarter of 2014, the Company donated, and recognized the associated costs, of a full, new xenon-based digital theater system to the University of Southern California’s School of Cinematic Arts. The theater, which is the first teaching lab of its kind in a collegiate setting, will give students the opportunity to learn about the latest innovations in filmmaking, set design, sound and post-production.

Ongoing rent revenue and finance income was ~~$3.7~~$3.5 million in the ~~second~~third quarter of 2015 and ~~$3.5 million in the second quarter of 2014.~~2014, respectively. Gross margin for ongoing rent and finance income was ~~$3.5~~$3.3 million in the ~~second~~third quarter of 2015 as compared to ~~$3.3~~$3.4 million in the ~~second~~third quarter of 2014. Contingent fees included in this caption ~~were consistent at~~amounted to $0.8 million and $0.7 million in the three months ended ~~June~~September 30, 2015 and 2014, respectively.

Other revenue ~~increased to $4.7~~was consistent at $3.2 million in the ~~second~~third quarter of 2015 ~~as compared to $3.7 million in the same period in 2014.~~and 2014, respectively. Other revenue primarily includes revenue generated from the Company’s theater operations, camera rental business and after-market sales of projection system parts and 3D glasses. The growth in revenue is primarily the result of an increase in revenue from the sale of 3D glasses and higher box office generated by the films exhibited in the IMAX owned and operated theaters during the quarter as compared to the prior year period.

The gross margin on other revenue was a loss of ~~$0.1~~$0.3 million in the ~~second~~third quarter of 2015 as compared to a ~~margin~~loss of ~~$0.5~~$0.2 million in the ~~second~~third quarter of ~~2014.~~2014, primarily a result of the Company’s owned and operated theater performance.

Theater system maintenance revenue increased ~~5.6%~~9.6% to ~~$9.2~~$9.3 million during the ~~second~~third quarter of 2015 as compared to ~~$8.7~~$8.5 million in the ~~second~~third quarter of 2014. Theater system maintenance gross margin was ~~$3.1~~$3.5 million in the ~~second~~third quarter of 2015 as compared to ~~$2.8~~$3.2 million in the ~~second~~third quarter of 2014. Maintenance revenue continues to grow as the number of theaters in the IMAX theater network grows. Maintenance margins vary depending on the mix of theater system configurations in the theater network and the timing and the date(s) of installation and/or service.

Revenues from joint revenue sharing arrangements increased ~~63.2%~~29.9% to ~~$31.6~~$19.8 million in the ~~second~~third quarter of 2015 compared to ~~$19.4~~$15.2 million in the ~~second~~third quarter of 2014. The increase in revenues from joint revenue sharing arrangements was primarily due to an increase in the number of theaters in operation ~~and stronger film performance~~ as compared to the prior year comparative period.The Company ended the ~~second~~third quarter of 2015 with ~~477~~498 theaters operating under joint revenue sharing arrangements, as compared to ~~408~~422 theaters at the end of the ~~second~~third quarter of 2014. During the quarter, the Company installed 2022 full, new theaters under joint revenue sharing arrangements, as compared to 1914 theaters in the prior year comparative period.

The gross margin from joint revenue sharing arrangements in the ~~second~~third quarter of 2015 increased ~~79.9%~~29.3% to ~~$24.1~~$12.1 million, as compared to ~~$13.4~~$9.4 million in the ~~second~~third quarter of 2014. Included in the calculation of ~~the second quarter~~ gross margin were certain advertising, marketing and commission costs primarily associated with new theater launches of $1.3 million and ~~$1.0~~$0.9 million incurred in the ~~second~~third quarter of 2015 and 2014, respectively. Adjusted gross margin from joint revenue sharing arrangements, which excludes these expenses, was ~~$25.4~~$13.4 million in the ~~second~~third quarter of 2015, as compared to ~~$14.4~~$10.3 million in the ~~second~~third quarter of 2014, respectively. A reconciliation of gross margin from the joint revenue sharing arrangement segment, the most directly comparable U.S. GAAP measure, to adjusted gross margin is presented in the table below:

   Three Months Ended June 30,
(In thousands of U.S. Dollars)            2015                    2014
Gross margin from joint revenue sharing arrangements
   $ 24,069    $ 13,378
Add:

Advertising, marketing and commission costs
   1,305    1,036




Adjusted gross margin from joint revenue sharing arrangements
$ 25,374 $ 14,414

Revenue from the Company’s film segments ~~increased 34.0%~~decreased 4.6% to ~~$39.4~~$22.6 million in the ~~second~~third quarter of 2015 from ~~$29.4~~$23.7 million in the ~~second~~third quarter of 2014, primarily due to ~~stronger~~lower film ~~performance~~distribution and ~~continued network growth.~~post-production revenue largely offset by higher IMAX DMR revenue in the current period. Gross box-office generated by IMAX DMR films increased ~~58.8%~~12.4% to ~~$343.0~~$189.8 million for the ~~second~~third quarter of 2015 from ~~$216.0~~$169.0 million for the ~~second~~third quarter of 2014. Film production and IMAX DMR revenues increased ~~52.2%~~13.7% to ~~$36.6~~$20.9 million in the ~~second~~third quarter of 2015 from ~~$24.0~~$18.4 million in the ~~second~~third quarter of 2014. The increase in film production and IMAX DMR revenues was primarily due to an increase in the IMAX theater network ~~and a stronger film slate~~ in the second quarter of 2015 versus the prior year comparative period. Gross box-office per screen for the three months ended ~~June~~September 30, 2015 averaged ~~$414,600~~$220,500 in comparison to ~~$299,800~~$227,900 in the comparable period last year. In the ~~second~~third quarter of 2015, gross box-office was generated primarily by the exhibition of 1121 films (listed below), as compared to 15 films primarily exhibited during the ~~second~~third quarter of 2014:

Other revenues attributable to the film segment decreased to ~~$2.8~~$1.7 million in the ~~second~~third quarter of 2015 from $5.3 million in the ~~second~~third quarter of 2014 primarily due to a decrease in film distribution revenue from IMAX original ~~films.~~films and post-production revenue.

The Company’s gross margin from its film segments in the ~~second~~third quarter of 2015 ~~increased~~decreased to ~~$28.5~~$13.9 million from ~~$19.6~~$15.5 million in the ~~second~~third quarter of 2014. Film production and IMAX DMR gross margin increased to ~~$28.5~~$13.9 million in the ~~second~~third quarter of 2015 from ~~$18.6~~$13.5 million in the ~~second~~third quarter of 2014, primarily due to ~~stronger film performance and~~ continued network growth. Other gross margin attributable to the film segment was a loss of less than $0.1 million in the ~~second~~third quarter of 2015 as compared to a margin of ~~$1.0~~$2.0 million in the ~~second~~third quarter of ~~2014.~~2014 primarily due to lower film distribution and post-production revenue.

Selling, general and administrative expenses were ~~$29.0~~$25.0 million in the ~~second~~third quarter of 2015 as compared to ~~the~~ $23.5 million ~~experienced~~ in the ~~second~~third quarter of 2014. Selling, general and administrative expenses excluding the impact of stock-based compensation was ~~$23.9~~$20.7 million in the ~~second~~third quarter of 2015 as compared to ~~$18.8~~$20.1 million in the ~~second~~third quarter of 2014. The following reflects the significant items impacting selling, general and administrative expenses in the ~~second~~third quarter of 2015 as compared to the prior year period:

Research and development expenses were ~~$2.4~~$2.7 million in the ~~second~~third quarter of 2015, as compared to ~~$3.3~~$4.6 million in the ~~second~~third quarter of 2014. These expenses are primarily attributable to the continued development of the Company’s new laser-based digital projection system. The Company developed its next-generation laser projector, which provides greater brightness and clarity, higher contrast, a wider color gamut and deeper blacks, while consuming less power and lasting longer than existing digital technology, to ensure that the Company continues to provide the highest quality, premier movie going experience available to consumers. As of ~~June~~September 30, 2015, the Company had 7311 and 69 laser-based digital theater systems in its ~~backlog.~~network and backlog, respectively.

The ~~Company intends for additional research and development to continue throughout 2015 as the Company supports further development of the laser-based projection system. In addition, the~~ Company plans to continue research and development activity in ~~the future in other~~ areas considered important to ~~the Company’s~~its continued commercial success, including further improving the reliability of its projectors, developing and manufacturing more IMAX cameras, enhancing the Company’s 2D and 3D image quality, expanding the applicability of the Company’s digital technology and using such technology to help expand the Company’s home entertainment platform, developing IMAX theater systems’ capabilities in both home and live entertainment, and further enhancing the IMAX theater and sound system design through the addition of more channels, improvements to the Company’s proprietary tuning system and mastering process.

The Company recorded receivable provisions, net of recoveries, of ~~$0.3~~$0.4 million for accounts receivable and financing receivables in the ~~second~~third quarter of 2015, ~~which was consistent with~~compared to less than $0.1 million being recorded in the prior year comparative period.

The Company’s accounts receivables and financing receivables are subject to credit risk. These receivables are concentrated with the leading theater exhibitors and studios in the film entertainment industry. To minimize the Company’s credit risk, the Company retains title to underlying theater systems under lease arrangements, performs initial and ongoing credit evaluations of its customers and makes ongoing provisions for its estimate of potentially uncollectible amounts. Accordingly, the Company believes it has adequately protected itself against exposures relating to receivables and contractual commitments.

The Company recorded a charge of $1.2 million reflecting assets that no longer meet capitalization requirements in the third quarter of 2015 as compared to $0.1 million in the third quarter of 2014.

Interest income was ~~$0.3~~$0.2 million in the ~~second~~third quarter of 2015, as compared to ~~less than~~ $0.1 million in the ~~second~~third quarter of 2014.

Interest expense was slightly higher at ~~$0.4~~$0.5 million in the ~~second~~third quarter of 2015 as compared to $0.3 million in the ~~second~~third quarter of 2014. Included in interest expense is the amortization of deferred finance costs of ~~$0.2~~$0.3 million in the ~~second~~third quarter of 2015 as compared to $0.1 million in the ~~second~~third quarter of 2014. The Company’s policy is to defer and amortize all the costs relating to debt financing which are paid directly to the debt provider, over the life of the debt instrument.

As at ~~June~~September 30, 2015, the Company had a gross deferred income tax asset of ~~$22.0~~$21.8 million, against which the Company is carrying a $0.3 million valuation allowance. For the three months ended ~~June~~September 30, 2015, the Company recorded an income tax provision of ~~$9.3~~$2.5 million, of which a provision of $0.1 million was related to an increase in its provisions for uncertain tax positions.

The Company accounts for investments in new business ventures using the guidance of the FASB ASC 323 “Investments —– Equity Method and Joint Ventures” (“ASC 323”). At ~~June~~September 30, 2015, the equity method of accounting is being utilized for investments with a total carrying value of ~~$1.4~~$1.9 million (December 31, 2014 —- $2.8 million). For the three months ended ~~June~~September 30, 2015, gross revenues, ~~cost~~costs of revenue and net ~~loss~~losses for these investments were $nil, ~~$2.8~~$1.9 million and ~~$2.7~~$1.8 million, respectively (2014 ~~— $1.4 million,~~– $0.8 million, $0.2 million and ~~$0.2~~$1.5 million, respectively). The Company recorded its proportionate share of the net loss which amounted to ~~$0.8~~$0.4 million for the ~~second~~third quarter of 2015, compared to ~~$0.2~~$0.3 million in the prior year comparative period.

The Company’s condensed consolidated financial statements include the non-controlling interest in the net income of IMAX China resulting from the IMAX China Investment and the net proceeds are classified as redeemable non-controlling interest in temporary equity as well as the impact of a non-controlling interest in its subsidiary created for the Film Fund activity. For the three months ended ~~June~~September 30, 2015, the net income attributable to non-controlling interests of the Company’s subsidiaries was ~~$2.0~~$1.9 million (2014 — ~~$0.5~~$0.4 million).

~~Six~~Nine Months Ended ~~June~~September 30, 2015 Versus ~~Six~~Nine Months Ended ~~June~~September 30, 2014

The Company reported net income of ~~$27.9~~$38.4 million or ~~$0.39~~$0.54 per basic share and ~~$0.38~~$0.53 per diluted share for the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to ~~$14.4~~$19.7 million or ~~$0.21~~$0.28 per basic and diluted share for the ~~six~~nine months ended ~~June~~September 30, 2014. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was ~~$36.8~~$50.7 million or ~~$0.51~~$0.70 per diluted share for the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to adjusted net income of ~~$20.9~~$29.2 million or ~~$0.30~~$0.41 per diluted share for the ~~six~~nine months ended ~~June~~September 30, 2014. Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding stock-based compensation expense and the related tax impact, was ~~$33.7~~$45.7 million, or ~~$0.47~~$0.63 per diluted share, in the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to adjusted net income attributable to common shareholders of ~~$20.4~~$28.3 million, or ~~$0.29~~$0.40 per diluted share, for the ~~six~~nine months ended ~~June~~September 30, 2014. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP ~~measure,~~measures, to adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:


	Six Months Ended June 30, 2015						Six Months Ended June 30, 2014						Nine Months Ended September 30, 2015						Nine Months Ended September 30, 2014
	Net Income			Diluted EPS			Net Income			Diluted EPS			Net Income			Diluted EPS			Net Income			Diluted EPS
Reported net income	$	27,865		$	0.38	⁽¹⁾	$	14,358		$	0.21	⁽¹⁾	$	38,379		$	0.53	⁽¹⁾	$	19,655		$	0.28	⁽¹⁾
Adjustments:
Stock-based compensation		10,678			0.15			7,903			0.11			14,931			0.21			11,328			0.16
Tax impact of items listed above		(1,702	)		(0.02	)		(1,343	)		(0.02	)		(2,603	)		(0.04	)		(1,807	)		(0.03	)

Adjusted net income		36,841			0.51	⁽¹⁾		20,918			0.30	⁽¹⁾		50,707			0.70	⁽¹⁾		29,176			0.41	⁽¹⁾
Net income attributable to non-controlling interests		(3,124	)		(0.04	)		(472	)		(0.01	)		(5,028	)		(0.07	)		(911	)		(0.01	)

Adjusted net income attributable to common shareholders	$	33,717		$	0.47	⁽¹⁾	$	20,446		$	0.29	⁽¹⁾	$	45,679		$	0.63	⁽¹⁾	$	28,265		$	0.40	⁽¹⁾

Weighted average diluted shares outstanding					71,349						69,448						71,102						69,597

The following table sets forth the breakdown of revenue and gross margin by category:


	Revenue				Gross Margin					Revenue				Gross Margin
*(In thousands of US dollars)*	Six Months Ended June 30,				Six Months Ended June 30,					Nine Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015			2014		2015		2014		2015			2014
IMAX Theater Systems
IMAX Systems
Sales and sales-type leases⁽¹⁾	$	27,289	$	18,985	$	14,945		$	9,914	$	53,924	$	25,629	$	24,720		$	14,161
Ongoing rent, fees, and finance income⁽²⁾		7,190		6,771		6,777			6,448		10,708		10,272		10,111			9,799
Other		8,099		5,242		(154	)		16		11,320		8,407		(421	)		(202	)

		42,578		30,998		21,568			16,378		75,952		44,308		34,410			23,758


Theater System Maintenance		18,008		16,868		6,370			5,782		27,345		25,384		9,891			8,990


Joint Revenue Sharing Arrangements		47,462		30,219		34,686			20,661		67,259		45,457		46,816			30,043


Film
Production and IMAX DMR		54,279		39,235		41,713			29,708		75,144		57,585		55,642			43,177
Film distribution and post-production		7,044		10,022		679			1,673		8,772		15,350		646			3,676

		61,323		49,257		42,392			31,381	��	83,916		72,935		56,288			46,853

	$	169,371	$	127,342	$	105,016		$	74,202
										$	254,472	$	188,084	$	147,405		$	109,644

The Company’s revenues for the ~~six~~nine months ended ~~June~~September 30, 2015 increased by ~~33.0%~~35.3% to ~~$169.4~~$254.5 million from ~~$127.3~~$188.1 million in the same period last year, primarily due to an increase in revenues from the Company’s IMAX systems, joint revenue sharing arrangements and film production and IMAX DMR segments. The gross margin across all segments in the ~~six~~nine months ended ~~June~~September 30, 2015 was ~~$105.0~~$147.4 million, or ~~62.0%~~57.9% of total revenue, compared to ~~$74.2~~$109.6 million, or 58.3% of total revenue, in the ~~six~~nine months ended ~~June~~September 30, 2014. Impacting the gross margin, in the nine months ended September 30, 2015, was the installation of 8 laser-based digital upgrades which had lower margins. Gross margin, excluding the impact of these laser-based digital upgrades, was 60.4% of total revenue in the nine months ended September 30, 2015.

IMAX systems revenue increased ~~37.4%~~71.4% to ~~$42.6~~$76.0 million in the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to ~~$31.0~~$44.3 million in the ~~six~~nine months ended ~~June~~September 30, 2014, resulting primarily from the installation in 2015 of ~~five more~~11 additional full, new theater systems and 8 laser-based and one xenon-based digital system upgrades under sales or sales-type lease arrangements versus the prior-year period.

Revenue from sales and sales-type leases increased ~~43.7%~~110.4% to ~~$27.3~~$53.9 million in the ~~six~~nine months ended ~~June~~September 30, 2015 from ~~$19.0~~$25.6 million in the ~~six~~nine months ended ~~June~~September 30, 2014. The Company recognized revenue on 1931 full, new theater systems which qualified as either sales or sales-type leases in the ~~six~~nine months ended ~~June~~September 30, 2015, with a total value of ~~$24.1~~$38.6 million, versus 1420 full, new theater systems in the ~~six~~nine months ended ~~June~~September 30, 2014, with a total value of ~~$16.7~~$23.1 million. Additionally, the Company recognized $12.3 million in total revenue onfrom the installation of 8 laser-based and one ~~laser-based~~xenon-based digital upgrade ~~with a total value of $1.9 million~~upgrades as compared to two xenon-based digital upgrades in the ~~six~~nine months ended ~~June~~September 30, 2014, with a total value of $1.7 million. ~~Digital~~Laser-based and xenon-based digital upgrades typically have lower sales prices and gross margin than full, new theater system installations. The Company has decided to offer digital upgrades at lower selling prices for strategic reasons since the Company believes that digital systems increase flexibility and profitability for the Company’s existing exhibition customers. One used xenon-based digital system was installed and recognized in the ~~six~~nine months ended ~~June~~September 30, 2015 with a total value of $0.2 million as compared to none in the ~~six months ended 2014.~~prior year period.

Average revenue per full, new sales and sales-type lease systems was ~~$1.3 million for the six months ended June 30, 2015 as compared to~~consistent at $1.2 million for the ~~six~~nine months ended ~~June 30, 2014. Average revenue per digital upgrade was $1.9 million for the six months ended June~~September 30, 2015 ~~as compared to $0.8 million during the six months ended June 30,~~and 2014, respectively. The average revenue per full, new sales and sales-type lease systems varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location or other various factors. Average revenue per upgrade was $1.4 million for the nine months ended September 30, 2015, as compared to $0.8 million during the nine months ended September 30, 2014, respectively. For the nine months ended September 30, 2015, the average revenue per upgrade was higher as 8 of the 9 system upgrades were for a laser-based digital system configuration which are priced higher than xenon-based digital upgrades.

The installation of theater systems in newly-built theaters or multiplexes depends primarily on the timing of the construction of those projects, which is not under the Company’s control. The breakdown in mix of sales and sales-type lease and joint revenue sharing arrangements (see discussion below) installations by theater system configuration for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014 is outlined in the table below:

   Six Months Ended June 30,
           2015                 2014
New IMAX xenon-based digital theater systems — installed and recognized

Sales and sales-types lease arrangements
   20 ⁽¹⁾ 14
Joint revenue sharing arrangements
   26    24


Total new theater systems
   46    38


IMAX xenon-based digital theater system upgrades — installed and recognized

Sales and sales-types lease arrangements
   1 ⁽²⁾ 2
Short-term operating lease arrangements
   1    2 ⁽³⁾
Joint revenue sharing arrangements
   —      2


Total upgraded theater systems
   2    6


Total theater systems installed
   48    44


	Nine Months Ended September 30,
	2015			2014
New IMAX xenon-based digital theater systems - installed and recognized
Sales and sales-types lease arrangements		32	⁽¹⁾⁽²⁾		20
Joint revenue sharing arrangements		48			38

Total new theater systems		80			58

IMAX xenon-based digital theater system upgrades - installed and recognized
Sales and sales-types lease arrangements		9	⁽²⁾		2
Operating lease arrangements		2	⁽³⁾		2	⁽⁵⁾
Joint revenue sharing arrangements		1	⁽⁴⁾		2

Total upgraded theater systems		12			6

Total theater systems installed		92			64

Settlement revenue was $0.1 million and $nil for the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively.

IMAX theater systems gross margin from full, new sales and sales-type leases was ~~65.7%~~63.0% in the ~~six~~nine months ended ~~June~~September 30, 2015, which was higher than the ~~61.4%~~61.3% experienced in the ~~six~~nine months ended ~~June~~September 30, 2014. Gross margin experienced from digital upgrades was ~~$0.6~~$1.8 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to $0.9 million in the ~~six~~nine months ended ~~June~~September 30, 2014. Gross margin from the sale of a used system was a loss of $0.2 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to $nil in the ~~six~~nine months ended ~~June~~September 30, 2014. Included in IMAX theater systems margin is a charge of $0.4 million for the ~~six~~nine months ended ~~June~~September 30, 2015 ~~(2014 — $nil)~~ due to a reduction in the net realizable value of its inventories. No similar charges were recorded in the ~~six~~nine month period ended ~~June~~September 30, 2014. Gross margin varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location and other various factors.

In the first ~~six~~nine months of 2014, the Company donated, and recognized the associated costs, of a full, new xenon-based digital theater system to the University of Southern California’s School of Cinematic Arts. The theater, which is the first teaching lab of its kind in a collegiate setting, will give students the opportunity to learn about the latest innovations in filmmaking, set design, sound and post-production.

Ongoing rent revenue and finance income increased to ~~$7.2~~$10.7 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$6.8~~$10.3 million in the ~~six~~nine months ended ~~June~~September 30, 2014. Gross margin for ongoing rent and finance income was ~~$6.8~~$10.1 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$6.4~~$9.8 million in the ~~six~~nine months ended ~~June~~September 30, 2014. Contingent fees included in this caption amounted to ~~$1.2 million and $1.3~~$2.0 million in the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively.

Other revenue increased to ~~$8.1~~$11.3 million in the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to ~~$5.2~~$8.4 million in the same period in 2014. Other revenue primarily includes revenue generated from the Company’s theater operations, camera rental business and after-market sales of projection system parts and 3D glasses. The growth in revenue is primarily the result of an increase in revenue from 3D glasses and higher box office generated by the films exhibited in the IMAX owned and operated theaters during the ~~six~~nine month period ended ~~June~~September 30, 2015 as compared to the prior year period.

The gross margin on other revenue was a loss of ~~$0.1~~$0.4 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to a ~~margin~~loss of ~~less than $0.1~~$0.2 million in the ~~six~~nine months ended ~~June~~September 30, 2014.

Theater system maintenance revenue increased ~~6.8%~~7.7% to ~~$18.0~~$27.3 million during the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to ~~$16.9~~$25.4 million during the ~~six~~nine months ended ~~June~~September 30, 2014. Theater system maintenance gross margin was ~~$6.4~~$9.9 million in the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to ~~$5.8~~$9.0 million in the ~~six~~nine months ended ~~June~~September 30, 2014. Maintenance revenue continues to grow as the number of theaters in the IMAX theater network grows. Maintenance margins vary depending on the mix of theater system configurations in the theater network and the timing and the date(s) of installation and/or service.

Revenues from joint revenue sharing arrangements increased ~~57.1%~~48.0% to ~~$47.5~~$67.3 million in the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to ~~$30.2~~$45.5 million in the ~~six~~nine months ended ~~June~~September 30, 2014. The Company ended the ~~six~~nine month period with ~~477~~498 theaters operating under joint revenue sharing arrangements, as compared to ~~408~~422 theaters at the end of the ~~six~~nine months ended ~~June~~September 30, 2014. The increase in revenues from joint revenue sharing arrangements was primarily due to an increase in the number of theaters in operation as compared to the prior year comparative period as well as strong box office performance in the current period as compared to the prior year comparative period.During the ~~six~~nine months ended ~~June~~September 30, 2015, the Company installed 2648 full, new theaters under joint revenue sharing arrangements, as compared to 2438 new theaters in the prior year comparative period.

The gross margin from joint revenue sharing arrangements in the ~~six~~nine months ended ~~June~~September 30, 2015 increased ~~67.9%~~55.8% to ~~$34.7~~$46.8 million from ~~$20.7~~$30.0 million in the ~~six~~nine months ended ~~June~~September 30, 2014. Included in the calculation of gross margin in the first ~~six~~nine months of 2015 were certain advertising, marketing and commission costs primarily associated with new theater launches of ~~$1.4~~$2.7 million, as compared to ~~$1.2~~$2.1 million incurred in the prior year comparative period. Adjusted gross margin from joint revenue sharing arrangements, which excludes these expenses, was ~~$36.1~~$49.5 million in the ~~six~~nine months ended ~~June~~September 30, 2015, compared to ~~$21.9~~$32.1 million in the year ago period. A reconciliation of gross margin from the joint revenue sharing arrangement segment, the most directly comparable U.S. GAAP measure, to adjusted gross margin is presented in the table below:


	Six Months Ended June 30,				Nine Months Ended September 30,
*(In thousands of U.S. Dollars)*	2015		2014		2015		2014
Gross margin from joint revenue sharing arrangements	$	34,686	$	20,661	$	46,816	$	30,043
Add:
Advertising, marketing and commission costs		1,435		1,231		2,698		2,106

Adjusted gross margin from joint revenue sharing arrangements	$	36,121	$	21,892	$	49,514	$	32,149

Revenue from the Company’s film segments increased to ~~$61.3~~$83.9 million in the ~~six~~nine months ended ~~June~~September 30, 2015 from ~~$49.3~~$72.9 million in the ~~six~~nine months ended ~~June~~September 30, 2014, ~~across the~~primarily due to stronger film ~~production~~performance and ~~DMR, distribution and post-production operations.~~continued network growth. Gross box-office generated by IMAX DMR films increased to ~~$507.7~~$697.5 million for the ~~six~~nine months ended ~~June~~September 30, 2015 from ~~$354.4~~$523.5 million for the ~~six~~nine months ended ~~June~~September 30, 2014, ~~an 43.3%~~a 33.2% increase year-over-year. Film production and IMAX DMR revenues increased to ~~$54.3~~$75.1 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$39.2~~$57.6 million in the ~~six~~nine months ended ~~June~~September 30, 2014. Gross box-office per screen for the ~~six~~nine months ended ~~June~~September 30, 2015 averaged ~~$614,800,~~$829,000, in comparison to ~~$498,200~~$727,800 in the comparable period last year. In 2015, gross box-office was generated primarily by the exhibition of 3348 films to IMAX theaters (listed below), as compared to 2636 films primarily exhibited during the ~~six~~nine months ended ~~June~~September 30, 2014:


Seventh Son: AnIMAX 3D Experience		~~Jack Ryan: Shadow Recruit: The~~~~IMAX~~ ~~Experience~~


Gone with the Bullets: AnIMAX 3D Experience		~~I, Frankenstien: An~~~~IMAX~~ ~~3D Experience~~
Night at the Museum: Secret of the Tomb: TheIMAX Experience		~~The Monkey King: The~~~~IMAX~~ ~~Experience~~
Taken 3: TheIMAX Experience		~~Robocop: The~~~~IMAX~~ ~~Experience~~
American Sniper: TheIMAX Experience		~~Stalingrad: An~~~~IMAX~~~~3D Experience~~
Game of Thrones: TheIMAX Experience (Season 4, Episodes 9		~~300: Rise of an Empire: An~~~~IMAX~~~~3D Experience~~
and 10)		~~Need for Speed: An~~~~IMAX~~~~3D Experience~~
Kingsman: The Secret Service: TheIMAX Experience		~~Divergent: The~~~~IMAX~~ ~~Experience~~
Jupiter Ascending: AnIMAX3D Experience		~~Noah: The~~~~IMAX~~~~Experience~~
Fifty Shades of Grey: TheIMAX Experience		~~Captain America: The Winter Soldier: An~~~~IMAX~~~~3D Experience~~
Wolf Totem: AnIMAX3D Experience		~~Transcendence: The~~~~IMAX~~ ~~Experience~~
Dragon Blade: AnIMAX 3D Experience		~~The Amazing Spider-Man 2: An~~~~IMAX~~~~3D Experience~~
Focus: TheIMAX Experience		~~Godzilla: An~~~~IMAX~~~~3D Experience~~
Chappie: TheIMAXExperience		~~Coming Home: The~~~~IMAX~~~~Experience~~
Cinderella: TheIMAX Experience		~~Maleficent: An IMAX 3D Experience~~
The Divergent Series: Insurgent: AnIMAX 3D Experience Furious 7: TheIMAX Experience The Water Diviner: TheIMAX Experience Dragon Ball Z: Resurrection of ‘F’: AnIMAX3D Experience The Avengers: Age of Ultron: AnIMAX 3D Experience Tomorrowland: TheIMAX Experience Jurassic World: AnIMAX 3D Experience Terminator Genisys: AnIMAX 3D Experience San Andreas: AnIMAX 3D Experience Mad Max: Fury Road: AnIMAX 3D Experience Inside Out: AnIMAX3D Experience The Maze Runner: TheIMAXExperience The Monk Comes Down the Mountain: AnIMAX 3D Experience Minions: AnIMAX 3D Experience Monster Hunt: AnIMAX3D Experience Ant-Man: AnIMAX 3D Experience Pixels: AnIMAX 3D Experience Mission: Impossible – Rogue Nation: TheIMAX Experience Attack on Titan: Part 1:TheIMAX Experience To the Fore: TheIMAX Experience The Man from U.N.C.L.E.: TheIMAX Experience Go Away Mr. Tumor :TheIMAXExperience The Transporter Refueled :TheIMAXExperience Everest: AnIMAX3D Experience Attack on Titan: Part 2:TheIMAX Experience Lost in Hong Kong: TheIMAXExperience The Walk: AnIMAX3D Experience		Jack Ryan: Shadow Recruit: TheIMAX Experience I, Frankenstein: AnIMAX 3D Experience The Monkey King: TheIMAX Experience Robocop: TheIMAX Experience Stalingrad: AnIMAX3D Experience 300: Rise of an Empire: AnIMAX3D Experience Need for Speed: AnIMAX3D Experience Divergent: TheIMAX Experience Noah: TheIMAXExperience Captain America: The Winter Soldier: AnIMAX3D Experience Transcendence: TheIMAX Experience The Amazing Spider-Man 2: AnIMAX3D Experience Godzilla: AnIMAX3D Experience Coming Home: TheIMAXExperience Maleficent: AnIMAX 3D Experience Edge of Tomorrow: AnIMAX 3D Experience
~~Furious 7: The~~~~IMAX~~ ~~Experience~~		How to Train Your Dragon 2: AnIMAX 3D Experience
~~The Water Diviner: The~~~~IMAX~~ ~~Experience~~		Transformers: Age of Extinction: AnIMAX 3D Experience
~~Dragon Ball Z: Resurrection ‘F’:~~Hercules: AnIMAX3D Experience
Lucy: TheIMAX Experience The ~~Avengers: Age~~White Haired Witch of ~~Ultron: An~~~~IMAX~~ ~~3D Experience~~
~~Tomorrowland: The~~~~IMAX~~ ~~Experience~~
~~Jurassic World: An~~~~IMAX~~ ~~3D Experience~~
~~Terminator Genisys: An~~~~IMAX~~ ~~3D Experience~~
~~San Andreas: An~~~~IMAX~~ ~~3D Experience~~
~~Mad Max: Fury Road: An~~~~IMAX~~ ~~3D Experience~~
~~Inside Out:~~Lunar Kingdom: AnIMAX3D Experience
Guardians of the Galaxy: AnIMAX3D Experience Teenage Mutant Ninja Turtles: AnIMAX3D Experience The Expendables 3: TheIMAXExperience Forrest Gump: TheIMAXExperience The Maze Runner: TheIMAXExperience		The Equalizer: TheIMAXExperience Breakup Buddies: TheIMAXExperience

Other revenues attributable to the film segment decreased to ~~$7.0~~$8.8 million in the ~~six~~nine months ended ~~June~~September 30, 2015 from ~~$10.0~~$15.4 million in the ~~six~~nine months ended ~~June~~September 30, 2014. The ~~six~~nine months ended ~~June~~September 30, 2014 includes the broad release of two IMAX original productions,Journey to the South PacificandIsland of Lemurs: Madagascar, whereas no original films were released in the current year ~~comparative~~ period.

The Company’s gross margin from its film segments increased ~~35.1%~~20.1% in the ~~six~~nine months ended ~~June~~September 30, 2015 to ~~$42.4~~$56.3 million from ~~$31.4~~$46.9 million in the ~~six~~nine months ended ~~June~~September 30, 2014. Film production and IMAX DMR gross margin increased to ~~$41.7~~$55.6 million from ~~$29.7~~$43.2 million in the ~~six~~nine months ended ~~June~~September 30, 2014, primarily due to the stronger film performance ~~and lower~~of IMAX DMR ~~production and print costs.~~films. Other gross margin attributable to the film segment was ~~$0.7~~$0.6 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$1.7~~$3.7 million in the ~~six~~nine months ended ~~June~~September 30, ~~2014.~~2014, as no original films were released in the nine months ended September 30, 2015 compared to 2 in the prior year comparative period.

Selling, general and administrative expenses increased to ~~$57.4~~$82.3 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$44.8~~$68.3 million experienced in the prior year comparative period. Selling, general and administrative expenses excluding the impact of stock-based compensation were ~~$46.7~~$67.4 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$36.9~~$57.0 million in the ~~six~~nine months ended ~~June~~September 30, 2014. The following reflects the significant items impacting selling, general and administrative expenses as compared to the prior year period:

Research and development expenses were ~~consistent at $6.9~~$9.6 million and $11.5 million in the ~~six~~nine months ended ~~June~~September 30, 2015 and 2014, respectively. These expenses are primarily attributable to the continued development of the Company’s new laser-based digital projection system. The Company developed its next-generation laser projector, which provides greater brightness and clarity, a wider color gamut and deeper blacks, while consuming less power and lasting longer than existing digital technology, to ensure that the Company continues to provide the highest quality, premier movie going experience available to consumers. As of ~~June~~September 30, 2015, the Company had 7311 and 69 laser-based digital theater systems in its ~~backlog.~~network and backlog, respectively.

The Company ~~intends for~~had additional research and development ~~to continue~~ throughout 2015 as the Company ~~supports~~supported further development of the laser-based projection system. In addition, the Company plans to continue research and development activity ~~in the future~~ in other areas considered important to the Company’s continued commercial success, including further improving the reliability of its projectors, developing and manufacturing more IMAX cameras, enhancing the Company’s 2D and 3D image quality, expanding the applicability of the Company’s digital technology and using such technology to help expand the Company’s home entertainment platform, developing IMAX theater systems’ capabilities in both home and live entertainment, and further enhancing the IMAX theater and sound system design through the addition of more channels, improvements to the Company’s proprietary tuning system and mastering process.

The Company recorded receivable provisions, net of recoveries for accounts receivable and financing receivables amounted to a net provision of ~~$0.3~~$0.7 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to $0.6 million for the ~~six~~nine months ended ~~June~~September 30, 2014.

The Company’s accounts receivables and financing receivables are subject to credit risk. These receivables are concentrated with the leading theater exhibitors and studios in the film entertainment industry. To minimize the Company’s credit risk, the Company retains title to underlying theater systems leased, performs initial and ongoing credit evaluations of its customers and makes ongoing provisions for its estimate of potentially uncollectible amounts. Accordingly, the Company believes it has adequately protected itself against exposures relating to receivables and contractual commitments.

In the ~~six~~nine months ended ~~June~~September 30, 2015, the Company recognized a $0.4 million other-than-temporary impairment of its available-for-sale investment as the value is not expected to recover its cost as compared to $0.7 million in 2014.

In the ~~six~~nine months ended ~~June~~September 30, 2015, the Company recorded a charge of ~~$nil~~$1.5 million reflecting assets that no longer meet capitalization requirements as compared to ~~$0.3~~$0.5 million in 2014.

Interest income was ~~$0.5~~$0.7 million in the ~~six~~nine months ended ~~June~~September 30, 2015 and ~~less than $0.1~~$0.2 million in the prior year comparative period.

Interest expense was ~~$0.7~~$1.2 million in the ~~six~~nine months ended ~~June~~September 30, 2015, which increased from the ~~$0.5~~$0.8 million experienced in the ~~six~~nine months ended ~~June~~September 30, 2014. Included in interest expense is the amortization of deferred finance costs in the amount of ~~$0.4~~$0.7 million in the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$0.3~~$0.4 million in the ~~six~~nine months ended ~~June~~September 30, 2014. The Company’s policy is to defer and amortize all the costs relating to debt financing which are paid directly to the debt provider, over the life of the debt instrument.

There was no change in the Company’s estimates of the recoverability of its deferred tax assets based on an analysis of both positive and negative evidence including projected future earnings. As at ~~June~~September 30, 2015, the Company had a gross deferred income tax asset of ~~$22.0~~$21.8 million, against which the Company is carrying a $0.3 million valuation allowance. For the ~~six~~nine months ended ~~June~~September 30, 2015, the Company recorded an income tax provision of ~~$9.9~~$12.4 million, of which a provision of ~~$0.2~~$0.3 million was related to an increase in its provisions for uncertain tax positions.

The Company accounts for investments in new business ventures using the guidance of the FASB ASC 323. At ~~June~~September 30, 2015, the equity method of accounting is being utilized for investments with a total carrying value of ~~$1.4~~$1.9 million (December 31, 2014 — $2.8 million). For the ~~six~~nine months ended ~~June~~September 30, 2015, gross revenues, ~~cost~~costs of revenue and net ~~loss~~losses for these investments were $nil, ~~$4.5~~$6.4 million and ~~$4.4~~$6.2 million, respectively (2014 — ~~$2.3~~$3.1 million, ~~$1.7~~$1.9 million and ~~$1.0~~$2.5 million, respectively). The Company recorded its proportionate share of the net loss which amounted to ~~$1.2~~$1.6 million for the ~~six~~nine months ended ~~June~~September 30, 2015, as compared to ~~$0.4~~$0.7 million for the ~~six~~nine months ended ~~June~~September 30, 2014.

On January 30, 2014, the Company’s lease with respect to its owned and operated Nyack IMAX theater ended and the Company decided not to renew the lease. In 2014, revenues for the Nyack IMAX theater were less than $0.1 million and the Company recognized income of $0.4 million, net of a tax expense of $0.2 million from the operation of the theater. Upon the expiration of the lease, lease inducements contingent upon the completion of the full term of the lease were recognized as a reduction in rent expense of $0.8 million. The transactions of the Company’s owned and operated Nyack theater are reflected as discontinued operations.

The Company’s condensed consolidated financial statements include the non-controlling interest in the net income of IMAX China resulting from the IMAX China Investment and the net proceeds are classified as redeemable non-controlling interest in temporary equity as well as the impact of a non-controlling interest in its subsidiary created for the Film Fund activity. For the ~~six~~nine months ended ~~June~~September 30, 2015, the net income attributable to non-controlling interests of the Company’s subsidiaries was ~~$3.1~~$5.0 million (2014 — ~~$0.5~~$0.9 million).

Total amounts drawn and available under the Credit Facility at ~~June~~September 30, 2015 were $nil and $200.0 million, respectively (December 31, 2014 — $nil and $200.0 million, respectively).

Under the Credit Facility, the effective interest rate for the ~~six~~nine months ended ~~June~~September 30, 2015 for the revolving loan portion was nil, as no amounts were outstanding during the period (2014 — nil).

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~~$50.0 million. The Company will also be required to maintain minimum EBITDA (as defined in the Credit Agreement) of $90.0 million until December 30, 2015, which requirement increases to $100.0 million on December 31, 2015. The Company must also maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.5:1.0 until December 30, 2015, which requirement decreases to (i) 2.25:1.0 on December 31, 2015; (ii) 2.0:1.0 on December 31, 2016; and (iii) 1.75:1.0 on December 31, 2017. The ratio of total debt to EBITDA was ~~0.17:~~0.16:1 as at ~~June~~September 30, 2015, where Total Debt (as defined in the Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $22.3 million. EBITDA is calculated as follows:


EBITDA per Credit Facility:							For the 3 months ended September 30, 2015			For the 12 months ended September 30, 2015⁽¹⁾
*(In thousands of U.S. Dollars)*	For the 3 months ended June 30, 2015			For the 12 months ended June 30, 2015⁽¹⁾
EBITDA per Credit Facility:
Net income	$	26,380		$	55,676		$	10,514		$	60,893
Add (subtract):
Loss from equity accounted investments		749			1,830			427			1,960
Provision for income taxes		9,256			18,918			2,477			20,207
Interest expense, net of interest income		144			227			241			348
Depreciation and amortization, including film asset amortization		10,861			37,876			10,200			40,215
Write-downs net of recoveries including asset impairments and receivable provisions		1,329			5,172			1,471			6,469
Stock and other non-cash compensation		5,195			18,238			4,343			19,062
EBITDA attributable to non-controlling interests⁽²⁾		(3,538	)		(8,519	)		(3,399	)		(11,031	)

	$	50,376		$	129,418		$	26,274		$	138,123

On October 19, 2015, PV Borrower converted the Playa Vista Loan from a construction loan into a permanent loan pursuant to the terms of the loan documents. Pursuant to the conversion, PV Borrower increased the principal balance of the loan by an additional $7.7 million, to $30.0 million. Prior to the conversion, the Playa Vista Loan bore interest at a variable interest rate per annum equal to 2.25% above the 30-day LIBOR rate, and PV Borrower was required to make monthly payments of interest only. However, as a result of the conversion, the interest rate decreased from 2.25% to 2.0% above the 30-day LIBOR rate, and PV Borrower will be required to make monthly payments of combined principal and interest over a 10-year term with a lump sum payment at the end of year 10. The loan is being amortized over 15 years. The Playa Vista Loan will be fully due and payable on October 19, 2025 (the “Maturity Date”) and may be prepaid at any time without premium, but with all accrued interest and other applicable payments.

~~Unless converted from a construction to permanent loan as described below, the Playa Vista Loan will be fully due and payable on April 6, 2016 (the “Maturity Date”).~~

~~The Loan Documents require the completion of construction no later than 90 days prior to the Maturity Date, subject to delays for certain unforeseeable events.~~ The Loan Documents contain affirmative, negative and financial covenants (including compliance with the financial covenants of the Company’s outstanding ~~Credit Facility~~revolving and term senior secured facility with Wells Fargo), agreements, representations, warranties, borrowing conditions, and events of default customary for development projects such as the Playa Vista Project.

Total amount drawn under the construction loan as at ~~June~~September 30, 2015 was $22.3 million (December 31, 2014 — $4.7 million). Under the Playa Vista Loan, the effective interest rate for the ~~six~~nine months ended ~~June~~September 30, 2015 was ~~2.43%~~2.44% (2014 — n/a).

As at ~~June~~September 30, 2015, the Company did not have any letters of credit and advance payment guarantees outstanding (December 31, 2014 — $nil) under the Credit Facility.

The Company also has a $10.0 million facility for advance payment guarantees and letters of credit through the Bank of Montreal for use solely in conjunction with guarantees fully insured by EDC (the “Bank of Montreal Facility”). The Bank of Montreal Facility is unsecured and includes typical affirmative and negative covenants, including delivery of annual consolidated financial statements within 120 days of the end of the fiscal year. The Bank of Montreal Facility is subject to periodic annual reviews. As at ~~June~~September 30, 2015, the Company had letters of credit and advance payment guarantees outstanding of $0.3 million under the Bank of Montreal Facility (December 31, 2014 — $0.3 million).

As at ~~June~~September 30, 2015, the Company’s principal sources of liquidity included cash and cash equivalents of ~~$146.4~~$117.4 million, the Credit Facility, the Playa Vista Loan, anticipated collection from trade accounts receivable of ~~$91.5~~$87.5 million including receivables from theaters under joint revenue sharing arrangements and DMR agreements with studios, anticipated collection from financing receivables due in the next 12 months of ~~$21.7~~$21.3 million and payments expected in the next 12 months on existing backlog deals. As at ~~June~~September 30, 2015, the Company had $22.3 million drawn on the Playa Vista ~~Loan (remaining availability of $3.4 million).~~Loan. There were $nil letters of credit and advance payment guarantees outstanding under the Credit Facility and $0.3 million under the Bank of Montreal Facility. Cash held outside of Canada as at ~~June~~September 30, 2015 was ~~$104.8~~$93.9 million (December 31, 2014 — $61.0 million).

During the ~~six~~nine months ended ~~June~~September 30, 2015, the Company’s operations provided cash of ~~$18.5~~$41.8 million which reflects an ~~$17.3~~$18.9 million increase in inventory partly related to the roll-out of its laser-based projection system. The Company used cash of ~~$49.5~~$63.0 million to fund capital expenditures, principally for the construction of the Playa Vista Project, to build equipment for use in joint revenue sharing arrangements, to purchase other intangible assets, and to purchase property, plant, and equipment. Based on management’s current operating plan for 2015, the Company expects to continue to use cash to deploy additional theater systems under joint revenue sharing arrangements and to fund DMR agreements with studios. Cash flows from joint revenue sharing arrangements are derived from the theater box-office and concession revenues and the Company invested directly in the roll out of 2648 theater systems under joint revenue sharing arrangements during the ~~six~~nine months ended ~~June~~September 30, 2015.

In October 2015, IMAX China completed the IMAX China IPO. As part of the offering, IMAX China received net proceeds of approximately $58.2 million, after deducting commissions, from the issuance of 17,825,000 new shares. IMAX Corporation, through a wholly owned subsidiary, received net proceeds of approximately $103.7 million, after deducting commissions, from the sale of 26,737,400 sale shares (after exercise in full of the over-allotment). The Company anticipates that proceeds from the IMAX China IPO will be used to expand the IMAX theater network in Greater China, to increase the number of revenue sharing arrangements with the Company’s exhibitor partners, to strengthen the Company’s cooperation with Chinese studios and filmmakers and for general corporate purposes.

In 2014, the Company announced the sale and issuance of 20.0% of the shares in IMAX China to entities owned and controlled by investors CMC and FountainVest. The sale price for the interest was $80.0 million was paid by the investors in two equal installments, the first of which was received on April 8, 2014 and the second of which was received on February 10, 2015. Approximately half of the net proceeds of the transaction will remain in IMAX China, to be used toward the continued build-out of the Company’s business in China, including additional joint revenue sharing locations and other growth initiatives. The remaining funds will be available for general corporate purposes.

In 2014, the Company’s Board of Directors approved a ~~new~~ $150.0 million share repurchase program for shares of the Company’s common stock. Purchases under the program commenced in 2014. The share repurchase program expires June 30, 2017. The repurchases may be made either in the open market or through private transactions, subject to market conditions, applicable legal requirements and other relevant factors. The Company has no obligation to repurchase shares, and the share repurchase program may be suspended or discontinued by the Company at any time. During the nine months ended September 30, 2015, the Company repurchased 1,000,000 (2014 — 85,405) common shares at an average price of $34.25 (2014 — $27.71) per share. The retired shares were purchased for $34.3 million (2014 — $2.4 million).

The Company believes that cash flow from operations together with existing cash and borrowing available under the Credit Facility will be sufficient to fund the Company’s business operations, including its strategic initiatives relating to existing joint revenue sharing arrangements for the next 12 months.

The Company’s operating cash flow will be adversely affected if management’s projections of future signings for theater systems and film performance, theater installations and film productions are not realized. The Company forecasts its short-term liquidity requirements on a quarterly and annual basis. Since the Company’s future cash flows are based on estimates and there may be factors that are outside of the Company’s control (see “Risk Factors” in Item 1A in the Company’s 2014 Form 10-K), there is no guarantee that the Company will continue to be able to fund its operations through cash flows from operations. Under the terms of the Company’s typical sale and sales-type lease agreement, the Company receives substantial cash payments before the Company completes the performance of its obligations. Similarly, the Company receives cash payments for some of its film productions in advance of related cash expenditures.

The Company’s net cash provided by operating activities is affected by a number of factors, including the proceeds associated with new signings of theater system lease and sale agreements in the year, costs associated with contributing systems under joint revenue sharing arrangements, the box-office performance of films distributed by the Company and/or released to IMAX theaters, increases or decreases in the Company’s operating expenses, including research and development, and the level of cash collections received from its customers.

Cash provided by operating activities amounted to ~~$18.5~~$41.8 million for the ~~six~~nine months ended ~~June~~September 30, 2015. Changes in other non-cash operating assets as compared to December 31, 2014 include: an increase of ~~$3.6~~$12.0 million in accounts receivable; an increase of $9.9 million in financing receivables; an increase of ~~$15.8 million in accounts receivable; an increase of $17.3~~$18.9 million in inventories; an increase of ~~$1.9~~$2.2 million in prepaid expenses; and

an increase of ~~$2.3~~$2.6 million in other assets, which includes a ~~$0.3~~$0.2 million increase in commission and other deferred selling expenses and a ~~$2.0~~$2.4 million increase in other assets. Changes in other operating liabilities as compared to December 31, 2014 include: an increase in deferred revenue of ~~$9.6~~$17.9 million related to backlog payments received in the current period, offset slightly by amounts

relieved from deferred revenue related to theater system installations; an increase in accounts payable of ~~$7.3~~$4.2 million; and a decrease of ~~$15.3~~$17.8 million in accrued liabilities.

Net cash used in investing activities amounted to ~~$49.5~~$65.0 million in the ~~six~~nine months ended ~~June~~September 30, 2015, which includes purchases of ~~$34.9~~$38.4 million in property, plant and equipment, an investment in joint revenue sharing equipment of ~~$11.6~~$21.0 million and an increase in other intangible assets of ~~$3.0~~$3.6 million. Included in the Company’s purchase of property, plant and equipment for the ~~six~~nine months ended ~~June~~September 30, 2015 is ~~$25.7~~$26.0 million for the construction of the Playa Vista Project. In addition, the Company invested $2.0 million in new business ventures.

Net cash provided by financing activities in the ~~six~~nine months ended ~~June~~September 30, 2015 amounted to ~~$71.1~~$33.8 million as compared to ~~$38.8~~$37.4 million for ~~six~~nine months ended ~~June~~September 30, 2014. In the first quarter of 2015, the Company issued common shares net of related issuance costs of $38.0 million related to the IMAX China Investment by CMC and FountainVest, which represents a non-controlling interest in IMAX China. During the ~~six~~nine months ended ~~June~~September 30, 2015, the Company also received ~~$22.9~~$23.8 million from the issuance of common shares resulting from stock option exercises. ~~The~~Furthermore, the Company ~~also~~ borrowed an additional $17.6 million under the Playa Vista Loan. During the nine months ended September 30, 2015, the Company spent $34.3 million to repurchase shares under the Company’s share buyback program and $10.0 million to purchase treasury stock for the settlement of restricted share units and stock options of which, $2.1 million is currently held in treasury stock for the issuance of restricted share units and stock options during the remainder of the year.

Capital expenditures, including the Company’s investment in joint revenue sharing equipment, purchase of property, plant and equipment, net of sales proceeds, other intangible assets and investments in film assets, were ~~$56.9~~$75.1 million for the ~~six~~nine months ended ~~June~~September 30, 2015 as compared to ~~$33.5~~$51.0 million for the ~~six~~nine months ended ~~June~~September 30, 2014. As discussed above, a portion of the Playa Vista Project iswas financed through a construction loan and related office facility, which has offset the cash outlay associated with the project.

Payments to be made by the Company under contractual obligations, as at ~~June~~September 30, 2015, are as follows:


	Payments Due by Period														Payments Due by Period
*(In thousands of U.S. Dollars)*	Total Obligations		2015		2016		2017		2018		2019		Thereafter		Total Obligations		2015		2016		2017		2018		2019		Thereafter
Pension obligations⁽¹⁾	$	20,042	$	—	$	—	$	20,042	$	—	$	—	$	—	$	20,042	$	-	$	-	$	20,042	$	-	$	-	$	-
Purchase obligations		31,975		31,848		127		—		—		—		—		25,449		25,338		111		-		-		-		-
Playa Vista Loan⁽²⁾		22,278		—		22,278		—		—		—		—		22,278		-		22,278		-		-		-		-
Operating lease obligations		10,787		2,685		2,810		2,130		1,844		1,272		46		19,468		1,265		4,902		4,016		3,595		1,779		3,911
Postretirement benefits obligations		3,222		121		143		180		197		205		2,376		2,949		114		135		172		188		195		2,145

	$	88,304	$	34,654	$	25,358	$	22,352	$	2,041	$	1,477	$	2,422	$	90,186	$	26,717	$	27,426	$	24,230	$	3,783	$	1,974	$	6,056

The Company has an unfunded defined benefit pension plan (the “SERP”) covering Messrs. Gelfond and Wechsler. As at ~~June~~September 30, 2015, the Company had an unfunded and accrued projected benefit obligation of approximately ~~$19.5~~$19.6 million (December 31, 2014 — $19.4 million) in respect of the SERP.

Pursuant to an employment agreement dated January 1, 2014, the term of Mr. Gelfond’s current employment agreement was extended through December 31, 2016, although Mr. Gelfond has not informed the Company that he intends to retire at that time. Under the terms of the arrangement, no compensation earned since 2011 will not be included in calculating his entitlement under the SERP.

The Company has a postretirement plan to provide health and welfare benefits to Canadian employees meeting certain eligibility requirements. As at ~~June~~September 30, 2015, the Company had an unfunded benefit obligation of ~~$2.4~~$2.1 million (December 31, 2014 — $2.1 million).

In July 2000, the Company agreed to maintain health benefits for Messrs. Gelfond and Wechsler upon retirement. As at ~~June~~September 30, 2015, the Company had an unfunded benefit obligation of ~~$0.8~~$0.9 million (December 31, 2014 — $0.8 million).

There are currently no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on the Company’s financial condition.

The Company is exposed to market risk from foreign currency exchange rates and interest rates, which could affect operating results, financial position and cash flows. Market risk is the potential change in an instrument’s value caused by, for example, fluctuations in interest and currency exchange rates. The Company’s primary market risk exposure is the risk of unfavorable movements in exchange rates between the U.S. dollar, the Canadian dollar and the Chinese Yuan Renminbi. The Company does not use financial instruments for trading or other speculative purposes.

A majority of the Company’s revenue is denominated in U.S.��dollars while a significant portion of its costs and expenses is denominated in Canadian dollars. A portion of the Company’s net U.S. dollar cash flows is converted to Canadian dollars to fund Canadian dollar expenses through the spot market. The Company has incoming cash flows from its revenue generating theaters and ongoing operating expenses in China through its subsidiary IMAX Shanghai Multimedia Technology Co. Ltd. In Japan, the Company has ongoing Yen-denominated operating expenses related to its Japanese operations. Net Renminbi and Japanese Yen cash flows are converted to U.S. dollars through the spot market. The Company also has cash receipts under leases denominated in Renminbi, Japanese Yen, Euros and Canadian dollars.

The Company manages its exposure to foreign exchange rate risks through the Company’s regular operating and financing activities and, when appropriate, through the use of derivative financial instruments. These derivative financial instruments are utilized to hedge economic exposures as well as reduce earnings and cash flow volatility resulting from shifts in market rates.

For the three and ~~six~~nine months ended ~~June~~September 30, 2015, the Company recorded a foreign exchange ~~gain~~loss of ~~$0.6~~$0.5 million and loss of ~~$1.0~~$1.5 million, respectively, as compared to a foreign exchange ~~gain~~loss of ~~$0.7~~$1.1 million and ~~gain~~loss of ~~less than $0.1~~$1.0 million for the three and ~~six~~nine months ended ~~June~~September 30, 2014, associated with the translation of foreign currency denominated monetary assets and liabilities.

The Company entered into a series of foreign currency forward contracts to manage the Company’s risks associated with the volatility of foreign currencies. The forward contracts have settlement dates throughout ~~2016.~~2016 and 2017. Foreign currency derivatives are recognized and measured in the balance sheet at fair value. Changes in the fair value (gains or losses) are recognized in the condensed consolidated statement of operations except for derivatives designated and qualifying as foreign currency hedging instruments. All foreign currency forward contracts held by the Company as at ~~June~~September 30, 2015, are designated and qualify as foreign currency hedging instruments. For foreign currency hedging instruments, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in other comprehensive income and reclassified to the condensed consolidated statement of operations when the forecasted

transaction occurs. Any ineffective portion is recognized immediately in the condensed consolidated statement of operations. The notional value of foreign currency hedging instruments was ~~$37.0~~$36.7 million as at ~~June~~September 30, 2015 (December 31, 2014 — $36.8 million). A ~~gain~~loss of ~~$0.4~~$2.3 million and a loss of ~~$2.7~~$5.0 million was recorded to Other Comprehensive Income with respect to the depreciation/appreciation in the value of these contracts in the three and ~~six~~nine months ended ~~June 30, 2015, respectively (2014 — gain of $0.9 million and gain of $0.1 million, respectively). A loss of $0.5 million and a loss of $1.2 million for the three and six months ended June~~September 30, 2015, respectively (2014 — loss of ~~$0.3~~$1.3 million and loss of ~~$0.5~~$1.2 million, respectively). A loss of $1.0 million and a loss of $2.2 million for the three and nine months ended September 30, 2015, respectively (2014 — loss of $0.2 million and loss of $0.8 million, respectively) was reclassified from Accumulated Other Comprehensive Income to selling, general and administrative expenses. Appreciation or depreciation on forward contracts not meeting the requirements for hedge accounting in the Derivatives and Hedging Topic of the FASB Accounting Standards Codification are recorded to selling, general and administrative expenses.

For all derivative instruments, the Company is subject to counterparty credit risk to the extent that the counterparty may not meet its obligations to the Company. To manage this risk, the Company enters into derivative transactions only with major financial institutions.

At ~~June~~September 30, 2015, the Company’s financing receivables and working capital items denominated in Canadian dollars, Renminbi, Yen and Euros was ~~$32.4~~$39.9 million. Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates at ~~June~~September 30, 2015, the potential change in the fair value of foreign currency-denominated financing receivables and working capital items would have been ~~$3.2~~$4.0 million. A significant portion of the Company’s selling, general, and administrative expenses is denominated in Canadian dollars. Assuming a 1% change appreciation or depreciation in foreign currency exchange rates at ~~June~~September 30, 2015, the potential change in the amount of selling, general, and administrative expenses would be $0.1 million for every $10.0 million in Canadian denominated expenditures.

The Company’s earnings are also affected by changes in interest rates due to the impact those changes have on its interest income from cash, and its interest expense from variable-rate borrowings under the Credit Facility.

As at ~~June~~September 30, 2015, the Company had not drawn down on its Credit Facility (December 31, 2014 — $nil).

As at ~~June~~September 30, 2015, the Company had drawn down $22.3 million on its Playa Vista Loan (December 31, 2014 — $4.7 million).

The Company’s largest exposure with respect to variable rate debt comes from changes in the LIBOR. The Company had variable rate debt instruments representing ~~10.7%~~10.2% and 2.4% of its total liabilities at ~~June~~September 30, 2015 and December 31, 2014, respectively. If the interest rates available to the Company increased by 10%, the Company’s interest expense would increase by ~~less than~~approximately $0.1 million and interest income from cash would increase by approximately ~~$0.1~~$0.3 million. These amounts are determined by considering the impact of the hypothetical interest rates on the Company’s variable rate debt and cash balances at ~~June~~September 30, 2015.

The Company maintains disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods and that such information is accumulated and communicated to management, including the CEO and the Chief Financial Officer (“CFO”), to allow timely discussions regarding required disclosure. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

The Company’s management, with the participation of its CEO and its CFO, has evaluated the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as at ~~June~~September 30, 2015 and has concluded that, as at the end of the period covered by this report, the Company’s disclosure controls and procedures were adequate and effective. The Company will continue to periodically evaluate its disclosure controls and procedures and will make modifications from time to time as deemed necessary to ensure that information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC’s”) rules and forms.

There were no changes in the Company’s internal control over financial reporting which occurred during the three months ended ~~June~~September 30, 2015, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

See note 8 to the accompanying condensed consolidated financial statements in Item 1 for information regarding legal proceedings involving the Company.

This Form 10-Q should be read together with the Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, which describes various risks and uncertainties to which the Company is or may become ~~subject.~~subject, and is supplemented by the discussion below. The risks described below and in the Company’s 2014 Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

The Company’s common stock may experience volatility as a result of IMAX China being a public company.

On October 8, 2015, IMAX China Holding, Inc. (“IMAX China”) completed an initial public offering of its ordinary shares on the Main Board of the Hong Kong Stock Exchange Limited (the “IMAX China IPO”). Following the IMAX China IPO, IMAX China became a new public company, of which the Company beneficially owns approximately 68.5%. As a public company, the price for IMAX China’s common shares may fluctuate, which may drive volatility in the Company’s common stock price. There can be no assurances regarding the impact of fluctuations in the price of IMAX China common shares on the value of the Company’s common stock. For additional information on the IMAX China IPO, arrangements between the Company and IMAX China and specific market risks please see the Company’s Current Reports on Form 8-K dated October 1, 2015 and October 10, 2015.

Item 2.~~Item~~ Unregistered Sales of Equity Securities and Use of Proceeds

The Company’s common stock repurchase program activity for the three months ended September 30, 2015 was as follows:

The total number of shares purchased during the three months ended September 30, 2015 does not include any shares received in the administration of employee share-based compensation plans.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Canada				98-0140269
		(State or other jurisdiction of incorporation or organization)				(I.R.S. Employer Identification Number)

		2525 Speakman Drive, Mississauga, Ontario, Canada L5K 1B1 (905) 403-6500				110 E. 59^th Street, Suite 2100 New York, New York, USA 10022 (212) 821-0100


		Title of Each Class				Name of Exchange on Which Registered
		Common Shares, no par value				The New York Stock Exchange


Large accelerated filer þ	x Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting Company ¨
		~~Accelerated filer~~		¨

~~Non-accelerated filer~~	¨	~~(Do~~(Do not check if a smaller reporting company)	~~Smaller reporting Company~~	¨


~~Class~~	Class		Outstanding as of ~~June~~September 30, 2015
	Common stock, no par value	~~70,182,090~~	69,193,840


			Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements			4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations			4142
Item 3.	Quantitative and Qualitative Factors about Market Risk			7072
Item 4.	Controls and Procedures			7274

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings			7274
Item 1A.	Risk Factors			7274
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds			75
Item 6.	Exhibits			7275
Signatures		73		76


	Page
The following unaudited Condensed Consolidated Financial Statements are filed as part of this Report:

Condensed Consolidated Balance Sheets as at ~~June~~September 30, 2015 and December 31, 2014		5
Condensed Consolidated Statements of Operations for the three and ~~six~~nine month periods ended ~~June~~September 30, 2015 and 2014		6
Condensed Consolidated Statements of Comprehensive Income for the three and ~~six~~nine month periods ended ~~June~~September 30, 2015 and 2014		7
Condensed Consolidated Statements of Cash Flows for the ~~six~~nine month periods ended ~~June~~September 30, 2015 and 2014		8
Notes to Condensed Consolidated Financial Statements		9


	September 30, 2015		December 31, 2014
Playa Vista Loan	$	22,278	$	4,710


	Available For Sale Investments
	2015		2014
Beginning balance, January 1,	$	—	$	1,000
Transfers into/out of Level 3		—		—
Total gains or losses (realized/unrealized)
Included in earnings		—		(650	)
Change in other comprehensive income		—		350
Purchases, issuances, sales and settlements		—		—

Ending balance, June 30,	$	—	$	700

The amount of total gains or losses for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date.	$	—	$	(650	)


	As at June 30, 2015
	Accrued And Current		30-89 Days		90+ Days		Billed Financing Receivables		Related Unbilled Recorded Investment		Total Recorded Investment		Related Allowances			Recorded Investment Net of Allowances
Net investment in leases	$	680	$	66	$	430	$	1,176	$	10,417	$	11,594	$	(972	)	$	10,622
Net financed sales receivables		2,646		1,270		2,479		6,395		91,970		98,364		(494	)		97,870

Total	$	3,326	$	1,336	$	2,909	$	7,571	$	102,387	$	109,958	$	(1,466	)	$	108,492


	For the Three Months Ended June 30, 2015
	Recorded Investment		Unpaid Principal		Related Allowance			Average Recorded Investment		Interest Income Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables		525		49		(494	)		525		—
Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—
Total recorded investment in impaired loans:

Net financed sales receivables	$	525	$	49	$	(494	)	$	525	$	—


	For the Three Months Ended June 30, 2014
	Recorded Investment		Unpaid Principal		Related Allowance			Average Recorded Investment		Interest Income Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables		525		—		(493	)		524		—
Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—
Total recorded investment in impaired loans:

Net financed sales receivables	$	525	$	—	$	(493	)	$	524	$	—


	For the Six Months Ended June 30, 2015
	Recorded Investment		Unpaid Principal		Related Allowance			Average Recorded Investment		Interest Income Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables		525		49		(494	)		525		—
Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—
Total recorded investment in impaired loans:

Net financed sales receivables	$	525	$	49	$	(494	)	$	525	$	—


	Three Months Ended June 30, 2015				Six Months Ended June 30, 2015
	Net Investment in Leases		Net Financed Sales Receivables		Net Investment in Leases		Net Financed Sales Receivables
Allowance for credit losses:
Beginning balance	$	972	$	494	$	972	$	494
Charge-offs		—		—		—		—
Recoveries		—		—		—		—
Provision		—		—		—		—

Ending balance	$	972	$	494	$	972	$	494

Ending balance: individually evaluated for impairment	$	972	$	494	$	972	$	494

Financing receivables:
Ending balance: individually evaluated for impairment	$	11,594	$	98,364	$	11,594	$	98,364


		Three Months Ended June 30,				Six Months Ended June 30,
		2015		2014		2015			2014
Foreign exchange contracts — Forwards	Derivative Gain (Loss) Recognized in OCI (Effective Portion)	$	352	$	937	$	(2,674	)	$	127

		$	352	$	937	$	(2,674	)	$	127


	Location of Derivative Loss Reclassified from AOCI into Income (Effective Portion)	Three Months Ended June 30,						Six Months Ended June 30,
		2015			2014			2015			2014
Foreign exchange contracts — Forwards	Selling, general and administrative expenses	$	(516	)	$	(256	)	$	(1,151	)	$	(504	)

		$	(516	)	$	(256	)	$	(1,151	)	$	(504	)


Balance as at December 31, 2014	$	3,640
Issuance of subsidiary shares to a non-controlling interest		—
Share issuance costs from the issuance of subsidiary shares to a non-controlling interest		—
Net loss attributable to non-controlling interest		(206	)

Balance as at June 30, 2015	$	3,434


	Six Months Ended June 30,
	2015			2014
New IMAX xenon-based digital theater systems — installed and recognized
Sales and sales-types lease arrangements		20	⁽¹⁾		14
Joint revenue sharing arrangements		26			24

Total new theater systems		46			38

IMAX xenon-based digital theater system upgrades — installed and recognized
Sales and sales-types lease arrangements		1	⁽²⁾		2
Short-term operating lease arrangements		1			2	⁽³⁾
Joint revenue sharing arrangements		—			2

Total upgraded theater systems		2			6

Total theater systems installed		48			44


~~Six~~Nine Months Ended ~~June~~September 30, 2015 —– Films Exhibited		~~Six~~Nine Months Ended ~~June~~September 30, 2014 —– Films Exhibited
Teenage Mutant Ninja Turtles: AnIMAX 3D Experience		Despicable Me 2: AnIMAX3D Experience
Fury: TheIMAX Experience		Gravity: AnIMAX3D Experience
Interstellar: TheIMAX Experience		Thor: The Dark World: AnIMAX3D Experience
Big Hero 6: AnIMAX 3D Experience		Ender’s Game: TheIMAX Experience
Penguins of Madagascar: AnIMAX3D Experience		The Hunger Games: Catching Fire: TheIMAXExperience
Exodus: Gods and Kings: AnIMAX 3D Experience		The Hobbit: Desolation of Smaug: AnIMAX3D Experience
The Hobbit: The Battle of the Five Armies: AnIMAX 3D		Dhoom 3: AnIMAX3D Experience
Experience		Policy Story: AnIMAX3D Experience


	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced program		Maximum value of shares that may yet be purchased under the program(a)
July 1 through July 31, 2015		—	$	—		—	$	146,941,074
August 1 through August 31, 2015		1,000,000	$	34.25		1,000,000	$	112,689,079
September 1 through September 30, 2015		—	$	—		—	$	112,689,079

Total		1,000,000	$	34.25		1,000,000


Exhibit No.		Description

31.1		Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002, dated ~~July 23,~~October 28, 2015, by Richard L. Gelfond.

31.2		Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002, dated ~~July 23,~~October 28, 2015, by Joseph Sparacio.

32.1		Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002, dated ~~July 23,~~October 28, 2015, by Richard L. Gelfond.

32.2		Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002, dated ~~July 23,~~October 28, 2015, by Joseph Sparacio.


	IMAX CORPORATION

Date: ~~July 23,~~October 28, 2015		By:	/s/ JOSEPH SPARACIO
			Joseph Sparacio
			Executive Vice-President & Chief Financial Officer
			(Principal Financial Officer)

Date: ~~July 23,~~October 28, 2015		By:	/s/ JEFFREY VANCE
			Jeffrey Vance
			Senior Vice-President, Finance & Controller ~~(Principal Accounting Officer)~~
			(Principal Accounting Officer)