Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2018shares | |
Document and Entity Information [Abstract] | |
Entity Registrant Name | IMAX Corporation |
Entity Central Index Key | 921,582 |
Document Type | 10-Q |
Document Period End Date | Mar. 31, 2018 |
Amendment Flag | false |
Document Fiscal Year Focus | 2,018 |
Document Fiscal Period Focus | Q1 |
Current Fiscal Year End Date | --12-31 |
Entity Well Known Seasoned Issuer | Yes |
Entity Voluntary Filers | Yes |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock Shares Outstanding | 63,996,413 |
Trading Symbol | IMAX |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and cash equivalents | $ 145,579 | $ 158,725 |
Accounts receivable, net of allowance for doubtful accounts of $2,075 (December 31, 2017 - $1,613) | 119,754 | 130,546 |
Financing receivables | 129,774 | 129,494 |
Inventories | 29,096 | 30,788 |
Prepaid expenses | 10,165 | 7,549 |
Film assets | 7,714 | 5,026 |
Property, plant and equipment | 278,978 | 276,781 |
Other assets | 62,569 | 26,757 |
Deferred income taxes | 25,145 | 30,708 |
Other intangible assets | 30,533 | 31,211 |
Goodwill | 39,027 | 39,027 |
Total assets | 878,334 | 866,612 |
Liabilities | ||
Bank indebtedness | 24,867 | 25,357 |
Accounts payable | 13,782 | 24,235 |
Accrued and other liabilities | 94,023 | 100,140 |
Deferred revenue | 112,131 | 113,270 |
Total liabilities | 244,803 | 263,002 |
Commitments and contingencies | 0 | 0 |
Non-controlling interests | ||
Non-controlling interests | 5,471 | 1,353 |
Shareholders' equity | ||
Capital stock common shares - no par value. Authorized - unlimited number. 64,287,977 issued and 63,996,413 outstanding (December 31, 2017 - 64,902,201 issued and 64,695,550 outstanding) | 441,303 | 445,797 |
Less: Treasury stock, 291,564 shares at cost (December 31, 2017 - 206,651) | (5,992) | (5,133) |
Other equity | 173,866 | 175,300 |
Accumulated deficit | (60,418) | (87,592) |
Accumulated other comprehensive loss | (138) | (626) |
Total shareholders' equity attributable to common shareholders | 548,621 | 527,746 |
Non-controlling interests | 79,439 | 74,511 |
Total shareholders' equity | 628,060 | 602,257 |
Total liabilities and shareholders' equity | $ 878,334 | $ 866,612 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Assets | ||
Allowance for doubtful accounts | $ 2,075 | $ 1,613 |
Shareholders' equity | ||
Common stock, shares issued | 64,287,977 | 64,902,201 |
Common stock, shares outstanding | 63,996,413 | 64,695,550 |
Number of treasury shares held in trust for future settlement of share based awards | 291,564 | 206,651 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenues | ||
Equipment and product sales | $ 19,513 | $ 11,544 |
Services | 44,746 | 38,844 |
Rentals | 18,202 | 15,857 |
Finance income | 2,523 | 2,412 |
Revenues, total | 84,984 | 68,657 |
Costs and expenses applicable to revenues | ||
Equipment and product sales | 7,972 | 7,464 |
Services | 20,351 | 19,814 |
Rentals | 5,969 | 5,608 |
Cost and expenses applicable to revenues, total | 34,292 | 32,886 |
Gross margin | 50,692 | 35,771 |
Selling, general and administrative expenses (including share-based compensation expense of $4.4 million for the three months ended March 31, 2018 (2017 — $5.3 million)) | 28,083 | 30,941 |
Research and development | 3,592 | 4,334 |
Amortization of intangibles | 892 | 602 |
Receivable provisions, net of recoveries | 451 | 185 |
Exit costs, restructuring charges and associated impairments | 702 | 0 |
Income (loss) from operations | 16,972 | (291) |
Interest income | 247 | 228 |
Interest expense | (494) | (455) |
Income (loss) from operations before income taxes | 16,725 | (518) |
Provision for income taxes | (4,453) | (114) |
Loss from equity-accounted investments, net of tax | (205) | (255) |
Net income (loss) | 12,067 | (887) |
Less: net (income) loss attributable to non-controlling interests | (3,562) | 962 |
Net income attributable to common shareholders | $ 8,505 | $ 75 |
Net income per share attributable to common shareholders - basic and diluted: | ||
Net income per share attributable to common shareholder - basic | $ 0.13 | $ 0 |
Net income per share attributable to common shareholders - diluted | $ 0.13 | $ 0 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Operations [Abstract] | ||
Share-based compensation costs | $ 4.4 | $ 5.3 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net income (loss) | $ 12,067 | $ (887) |
Unrealized net (loss) gain from cash flow hedging instruments | (1,007) | 313 |
Realization of cash flow hedging net (gain) loss upon settlement | (220) | 285 |
Foreign currency translation adjustments | 2,052 | 458 |
Other comprehensive income, before Tax | 825 | 1,056 |
Income tax benefit (expense) related to other comprehensive income | 321 | (157) |
Other comprehensive income, net of Tax | 1,146 | 899 |
Comprehensive income | 13,213 | 12 |
Less: Comprehensive (income) loss attributable to non-controlling interests | (4,220) | 816 |
Comprehensive income attributable to common shareholders | $ 8,993 | $ 828 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Operating Activities | ||
Net income (loss) | $ 12,067 | $ (887) |
Adjustments to reconcile net income (loss) to cash from operations: | ||
Depreciation and amortization | 13,521 | 12,088 |
Write-downs, net of recoveries | 1,036 | 4,010 |
Change in deferred income taxes | (465) | (958) |
Stock and other non-cash compensation | 5,141 | 5,660 |
Unrealized foreign currency exchange loss (gain) | 35 | (171) |
Loss from equity-accounted investments | 106 | 156 |
Loss on non-cash contribution to equity-accounted investees | 99 | 99 |
Investment in film assets | (6,259) | (3,334) |
Changes in other non-cash operating assets and liabilities | (9,818) | (17,280) |
Net cash provided by (used in) operating activities | 15,463 | (617) |
Investing Activities | ||
Purchase of property, plant and equipment | (6,588) | (4,068) |
Investment in joint revenue sharing equipment | (4,810) | (7,547) |
Acquisition of other intangible assets | (555) | (1,591) |
Investment in new business ventures | 0 | (1,000) |
Net cash used in investing activities | (11,953) | (14,206) |
Financing Activities | ||
Repayment of bank indebtedness | (500) | (500) |
Repurchase of common shares | (13,396) | 0 |
Treasury stock purchased for future settlement of restricted share units | (5,992) | (779) |
Taxes withheld and paid on employee stock awards vested | (1,028) | (146) |
Settlement of restricted share units and options | (173) | (11,158) |
Issuance of subsidiary shares to a non-controlling interest | 4,449 | 0 |
Common shares issued - stock options exercised | 0 | 13,082 |
Net cash (used in) provided by financing activities | (16,640) | 499 |
Effects of exchange rate changes on cash | (16) | 46 |
Decrease in cash and cash equivalents during period | (13,146) | (14,278) |
Cash and cash equivalents, beginning of period | 158,725 | 204,759 |
Cash and cash equivalents, end of period | $ 145,579 | $ 190,481 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation and Condensed Consolidated Statements of Operations Supplemental Information [Abstract] | |
Basis of Presentation | IMAX CORPORATION NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in thousands of U.S. dollars, unless otherwise stated) (Unaudited) 1. Basis of Presentation IMAX Corporation, together with its consolidated subsidiaries (the “Company”), prepares its financial statements in accordance with United States Generally Accepted Accounting Principles (“U.S. GAAP”). These condensed consolidated financial statements include the accounts of the Company together with its consolidated 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 ten film production companies that are VIEs. For five 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. The majority of these consolidated assets are held by the IMAX Original Film Fund (the “Original Film Fund”) and the IMAX Virtual Reality Fund (the “VR Fund”) as described in note 17 (b). For the other five 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. A loss in value of an investment other than a temporary decline is recognized as a charge to the condensed consolidated statements of operations . Total assets and liabilities of the Company’s consolidated VIEs are as follows: March 31, December 31, 2018 2017 Total assets $ 11,357 $ 7,539 Total liabilities $ 11,445 $ 7,178 Total assets and liabilities of the VIE entities which the Company does not consolidate are as follows: March 31, December 31, 2018 2017 Total assets $ 448 $ 448 Total liabilities $ 380 $ 388 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 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 2017 Annual Report on Form 10-K for the year ended December 31, 2017 (“the 2017 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, 2017 , except as noted below. |
New Accounting Standards and Ac
New Accounting Standards and Accounting Changes | 3 Months Ended |
Mar. 31, 2018 | |
New Accounting Standards and Accounting Changes [Abstract] | |
New Accounting Standards and Accounting Changes | 2. New Accounting Standards and Accounting Changes Adoption of New Accounting Policies The Company adopted several standards including the following material standards on January 1, 2018, which are effective for annual periods ending after December 31, 2017, and for annual and interim periods thereafter. In 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC Topic 606”). The Company 2014-09 and several associated ASUs on January 1, 2018. See note 3 for a further discussion of the Company’s adoption of ASC Topic 606, including its 2018 operating results under the new standard. Recently Issued FASB Accounting Standard Codification Updates In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The purpose of the amendment is to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. New disclosures will include qualitative and quantitative requirements to provide additional information about the amounts recorded in the financial statements. Lessor accounting will remain largely unchanged from current guidance, however ASU 2016-02 will provide improvements that are intended to align lessor accounting with the lessee model and with updated revenue recognition guidance. For public entities, the amendments in ASU 2016-02 are effective for interim and annual reporting periods beginning after December 15, 2018. As a lessor, the Company has a significant portion of its revenue derived from leases, including its joint revenue sharing arrangements, and while the lessor accounting model is not fundamentally different, the Company continues to evaluate the effect of the standard on this revenue stream. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). The purpose of ASU 2016-13 is to require a financial asset measured on the amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. For public entities, the amendments in ASU 2016-13 are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently assessing the impact of ASU 2016-13 on its condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-03, “Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2018-03”). The purpose of ASU 2018-03 is to clarify certain aspects of the guidance issued in ASU 2016-01. For public entities, the amendments in ASU 2018-03 are effective for interim periods beginning after June 15, 2018. The Company is currently assessing the impact of ASU 2018-03 on its condensed consolidated financial statements. The Company considers the applicability and impact of all recently issued FASB accounting standard codification updates. Accounting standards updates that are not noted above were assessed and determined to be not applicable or not significant to the Company’s condensed consolidated financial statements for the period ended March 31, 2018 . |
Adoption of ASC Topic 606, Reve
Adoption of ASC Topic 606, Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contracts with Customers [Abstract] | |
Revenue from Contracts with Customers | 3. Adoption of ASC Topic 606, Revenue from Contracts with Customers, effective January 1, 2018 As discussed in note 2, in 2014 the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition. Several ASUs have been issued since the issuance of ASU 2014-09. These ASUs, which modify certain sections of ASU 2014-09 are intended to promote a more consistent interpretation and application of the principles outlined in the standard. On January 1, 2018, the Company adopted ASC Topic 606, utilizing the modified retrospective transition method with a cumulative catch-up adjustment. Prior year amounts are presented in accordance with ASC Topic 605, “Revenue Recognition” or other applicable standards effective prior to January 1, 2018. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application, referred to as open contracts. All system sales and maintenance contracts with the existing network of IMAX theaters and the backlog of sales contracts make up a significant majority of the Company’s open contracts at any point in time. DMR arrangements where the film continues to be shown by the Company’s exhibitor partners, film distribution arrangements with remaining terms, aftermarket sales orders that have been received but for which control of the assets has not yet transferred to the customer are all also considered open contracts. The Company’s revenues from the sales of projection systems, provision of maintenance services, sale of aftermarket 3D glasses and parts, conversion of film content into the IMAX DMR format, distribution of documentary film content and the provision of post- production services are within the scope of the standard. The Company’s joint revenue sharing revenue arrangements, with the exception of those where the title transfers to the customer prior to recognition of the system revenue (hybrid sales arrangements), are not in scope of the standard due to their classification as leases. Similarly, any system revenue transactions classified as sales-type leases are excluded from the provisions of the new standard. The Company has assessed its performance obligations under its arrangements pursuant to ASC Topic 606 and has concluded that there are no significant differences between the performance obligations required to be units of account under ASC Topic 606 and the deliverables considered to be units of account under ASC Topic 605. Specifically, the Company has concluded that its “System Obligation”, which consists of a theater system (projector, sound system, screen system and, if applicable, 3D glasses cleaning machine); services associated with the theater system including theater design support, supervision of installation services, and projectionist training; a license to use the IMAX brand to market the theater; 3D glasses; initial maintenance and extended warranty services; and potentially the licensing of films remains unchanged when considered under ASC Topic 606. The Company’s performance obligations for its DMR, maintenance, film distribution and aftermarket sales contracts remain similar to those under ASC Topic 605. The new standard requires the Company to estimate the total consideration, including an estimate of future variable consideration, received in exchange for the goods delivered or services rendered. Certain of the Company’s revenue streams will be impacted by the variable consideration provisions of the new standard. The arrangements for the sale of projection systems include indexed minimum payment increases over the term of the arrangement, as well as provision for additional payments in excess of the minimum agreed payments in situations where the theater exceeds certain box office thresholds. Both of these contract provisions constitute variable consideration under the new standard that, subject to constraints to ensure reversal of revenues do not occur, require estimation and recognition upon transfer of control of the System Obligation to the customer, which is at the earlier of client acceptance of the installation of the system, including projectionist training, and the theater’s opening to the public. As this variable consideration extends through the entire term of the arrangement, which typically last 10 years, the Company applies constraints to its estimates and recognizes the variable consideration on a discounted present value basis at recognition. Under the previous standard, these amounts were recognized as reported by exhibitors (or customers) in future periods. In certain joint revenue sharing arrangements, specifically the Company’s hybrid sales arrangements, the Company’s arrangements call for sufficient upfront revenues to cover the cost of the arrangement, with monthly payments calculated based on the theater’s net box office earned. Title and control of the projection system transfer to the customer at the point of revenue recognition, which is the earlier of client acceptance of the theater installation, including projectionist training, and theater opening to the public. Under the new revenue recognition standard, the percentage payment is considered variable consideration that must be estimated and recognized at the time of initial revenue recognition. Using box office projections and the Company’s history with theater and box office experience in different territories, the Company estimates the amount of percentage payment earned over the life of the arrangement, subject to sufficient constraint such that there is not a risk of significant revenue reversal. Under the previous recognition standard, these amounts were recognized as reported by exhibitors (or customers) in future periods. As a result, the Company has reclassified hybrid sales arrangements to the traditional sales segment since the total consideration received and the revenue recognition timing at transfer of control of the assets now very closely resemble those of the traditional sale arrangements. The Company’s arrangements include a requirement for the provision of maintenance services over the life of the arrangement, subject to a consumer price index increase on renewal each year. Under the new standard, the Company has included the future consideration from the provision of maintenance services in the relative selling price allocation calculation at the inception of the arrangement. Under the previous recognition standard, only the first year’s extended warranty and maintenance services included as part of the upfront consideration received by the Company was included in the relative selling price allocation to determine the allocation of consideration between deliverables, while the future years maintenance services were recognized and amortized over each year’s renewal term. Except in circumstances where customers prepay the entire term’s maintenance arrangement, payments are due to the Company for the years after the extended warranty and maintenance services offered as part of the System Obligation expire. Payments upon renewal each year can be either in arrears or in advance, and can vary in frequency from monthly to annually. At March 31, 2018, $18.1 million of consideration has been deferred in relation to outstanding stand ready performance obligations related to these maintenance services. As the maintenance services are a stand ready obligation, revenue, subject to appropriate constraint, is recognized evenly over the contract term, which is consistent with past treatment. The Company does not expect a significant change in the allocation of consideration between performance obligations to arise as a result of this change. The Company’s DMR and Film Distribution revenue streams fall under the variable consideration exemption for sales- or usage-based royalties. While the Company does not hold rights to the intellectual property in the form of the DMR film content, the Company is being reimbursed for the application of its intellectual property in the form of its patented DMR processes used in the creation of new intellectual property in the form of an IMAX DMR version of film. The Company’s Film Distribution revenues are strictly from the license of its intellectual property in the form of documentary film content to which the Company holds distribution rights. The Company’s remaining revenue streams are not significantly impacted by the new standard. As the arrangements do not call for variable consideration and recognition of revenues transfer at the time of provision of service or transfer of control of goods as appropriate. The recognition of variable consideration involves a significant amount of judgment. ASC Topic 606 requires variable consideration to be recognized subject to appropriate constraints to avoid a significant reversal of revenue in future periods. The standard identifies several examples of situations where constraining variable consideration would be appropriate: The amount of consideration is highly susceptible to factors outside the entity’s influence The uncertainty about the amount of consideration is not expected to be resolved for a long period of time The Company’s experience (or other evidence) with similar types of contracts is limited, or that experience has limited predictive value The Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances The Company recorded an increase to opening retained earnings of $27.6 million, net of tax, as of January 1, 2018 due to the cumulative impact of adopting ASC Topic 606, with the impact primarily related to revenue from its theatre system business. The impact to revenues as a result of applying ASC Topic 606 was an increase of $0.7 million for the three months ended March 31, 2018. The following table presents the impacted financial statement line items in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2018: Pre-adoption of ASC Topic 606 As (in thousands of U.S. dollars, except per share amounts) ASC Topic 606 Adjustments reported Revenues $ 84,315 $ 669 $ 84,984 Provision for income taxes (4,306) (147) (4,453) Net income (loss) 11,545 522 12,067 Less: net (income) loss attributable to non-controlling interests (3,494) (68) (3,562) Net income attributable to common shareholders 8,051 454 8,505 Net income per share attributable to common shareholders - basic and diluted 0.13 - 0.13 The following table presents the impact of ASC Topic 606 on the Company’s revenues for the three months ended March 31, 2018, by reportable segment: Pre-adoption of ASC Topic 606 As ASC Topic 606 Adjustments reported Network business IMAX DMR $ 27,051 $ - $ 27,051 Joint revenue sharing arrangements – contingent rent (1) 18,529 (668) 17,861 IMAX systems – contingent rent (1) 852 (852) - 46,432 (1,520) 44,912 Theater business IMAX systems Sales and sales-type leases (2) 14,911 3,227 18,138 Ongoing fees and finance income (3) 2,603 127 2,730 Joint revenue sharing arrangements – fixed fees (4) 1,165 (1,165) - Theater system maintenance 12,712 - 12,712 Other theater 1,377 - 1,377 32,768 2,189 34,957 New business 608 - 608 Other Film post-production 3,163 - 3,163 Film distribution 571 - 571 Other 773 - 773 4,507 - 4,507 Total $ 84,315 $ 669 $ 84,984 ___________ (1) Contingent rent of $0.7 million related to theater systems under hybrid sales arrangements and $0.9 million related to theater systems under sales arrangements was recognized in the Company’s transition adjustment. (2) Variable consideration of $1.6 million relating to theater systems recognized as sales or hybrid sales was recognized as part of the System Obligation in the quarter and the fixed consideration recognized for theater systems installed under hybrid sales arrangements was reclassified from Joint revenue sharing arrangement – fixed fees as hybrid sales are no longer considered part of the Joint revenue sharing arrangement segment. (3) Finance income of $0.1 million was recognized on the future consideration related to contracts. (4) Fixed consideration of $1.2 million related to the recognition of theater systems under hybrid sales arrangements was reclassified to Sales and Sales-type leases. Upon adoption of ASC Topic 606 the Company has evaluated its revenue streams by reportable segment and scoped out lease arrangements in accordance with the standard. The following table presents a breakdown of the Company’s revenues for the three months ended March 31, 2018, whereby fixed and variable consideration are subject to the new standard: Subject to the New Revenue Recognition Standard Subject to the Lease Standard Fixed consideration Variable consideration Lease arrangements Total Network business IMAX DMR $ - $ 27,051 $ - $ 27,051 Joint revenue sharing arrangements – contingent rent - - 17,861 17,861 IMAX systems – contingent rent - - - - - 27,051 17,861 44,912 Theater business IMAX systems Sales and sales-type leases 15,949 2,189 - 18,138 Ongoing fees and finance income 2,730 - - 2,730 Joint revenue sharing arrangements – fixed fees - - - - Theater system maintenance 12,712 - - 12,712 Other theater 1,377 - - 1,377 32,768 2,189 - 34,957 New business - 608 - 608 Other Film post-production 3,163 - - 3,163 Film distribution - 571 - 571 Other 50 723 - 773 3,213 1,294 - 4,507 Total $ 35,981 $ 31,142 $ 17,861 $ 84,984 The following table presents the impact from the adoption of ASC Topic 606 on the Company’s assets and liabilities in the condensed consolidated balance sheet: Balance at Balance at December 31, ASC Topic 606 January 1, 2017 Adjustments 2018 Assets Other Assets $ 26,757 $ 34,384 $ 61,141 Deferred income taxes 30,708 (6,436) 24,272 Shareholders' equity Accumulated deficit (87,592) 27,571 (60,021) Non-controlling interests 74,511 377 74,888 As it is the first quarter after transition, the Company has not experienced any significant true-up of its transition amounts. The following describes the Company’s updated revenue recognition policy to reflect the adoption of ASC Topic 606: Contracts with Multiple Performance Obligations The Company’s revenue arrangements with certain customers may involve performance obligations consisting of the delivery of a theater system (projector, sound system, screen system and, if applicable, 3D glasses cleaning machine); services associated with the theater system including theater design support, supervision of installation, and projectionist training; a license to use the IMAX brand; 3D glasses; maintenance and extended warranty services; and licensing of films. The Company evaluates all of the performance obligations in an arrangement to determine which are considered distinct, either individually or in a group, for accounting purposes and which of the deliverables represent separate units of accounting based on the applicable accounting guidance in the Leases Topic of the FASB ASC; the Guarantees Topic of the FASB ASC; and the Revenue Recognition Topic of the FASB. If separate units of accounting are either required under the relevant accounting standards or determined to be applicable under the Revenue Recognition Topic, the total consideration received or receivable in the arrangement is allocated based on the applicable guidance in the above noted standards. Theater Systems The Company has identified 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 to be, as a group, a distinct performance obligation, and a single unit of accounting (the “System Obligation”). When an arrangement does not include all the performance obligations of a System Obligation, the performance obligations of the System Obligation included in the arrangement are considered by the Company to be a grouped distinct performance obligation and a single unit of accounting. The Company is not responsible for the physical installation of the equipment in the customer’s facility; however, the Company supervises the installation by the customer. The customer has the right to use the IMAX brand from the date the Company and the customer enter into an arrangement. The Company’s System Obligation arrangements involve either a lease or a sale of the theater system. Consideration for the System Obligation, other than for those delivered pursuant to joint revenue sharing arrangements, consist of upfront or initial payments made before and after the final installation of the theater system equipment and ongoing payments throughout the term of the lease or over a period of time, as specified in the arrangement. The ongoing payments are the greater of an annual fixed minimum amount or a certain percentage of the theater box-office. Amounts received in excess of the annual fixed minimum amounts are considered contingent payments. The Company’s arrangements are non-cancellable, unless the Company fails to perform its obligations. In the absence of a material default by the Company, there is no right to any remedy for the customer under the Company’s arrangements. If a material default by the Company exists, the customer has the right to terminate the arrangement and seek a refund only if the customer provides notice to the Company of a material default and only if the Company does not cure the default within a specified period. Consideration is allocated to each unit of accounting based on the unit’s relative selling prices. The Company uses vender-specific objective evidence of selling price (VSOE) when the Company sells the deliverable separately and is the price actually charged by the Company for that deliverable. VSOE is established for the Company’s System Obligation, maintenance and extended warranty services and film license arrangements. The Company uses a best estimate of selling price (BESP) for units of accounting that do not have VSOE or third-party evidence of selling price. The Company determines BESP for a deliverable by considering multiple factors including the Company’s historical pricing practices, product class, market competition and geography. Sales Arrangements For arrangements qualifying as sales, the revenue allocated to the System Obligation is recognized in accordance with the Revenue Recognition Topic of the FASB ASC, when all of the following conditions signifying transfer of control have been met: (i) the projector, sound system and screen system have been installed and are in full working condition, (ii) the 3D glasses cleaning machine, if applicable, has been delivered, (iii) projectionist training has been completed and (iv) the earlier of (a) receipt of written customer acceptance certifying the completion of installation and run-in testing of the equipment and the completion of projectionist training or (b) public opening of the theater, provided there is persuasive evidence of an arrangement, the price is fixed or determinable and collectability is reasonably assured. The initial revenue recognized consists of the initial payments received and the present value of any future initial payments, fixed minimum ongoing payments and an estimate of future variable consideration (future CPI and additional payments in excess of the minimums in the case of full sale arrangements or a percentage of ongoing box office in the case of hybrid sales arrangements) that have been attributed to this unit of accounting. The Company has also agreed, on occasion, to sell equipment under lease or at the end of a lease term. Consideration agreed to for these lease buyouts is included in revenues from equipment and product sales, when persuasive evidence of an arrangement exists, the fees are fixed or determinable, collectability is reasonably assured and control of the theater system passes from the Company to the customer. Taxes assessed by governmental authorities that are both imposed on and concurrent with the specific revenue-producing transactions and collected by the Company have been excluded from the measurement of the transaction prices discussed above. Lease Arrangements The Company uses the Leases Topic of FASB ASC to evaluate whether an arrangement is a lease within the scope of the accounting standard. Transactions accounted for under the Leases Topic of FASB ASC are not within the scope of Topic 606. Arrangements not within the scope of the accounting standard are accounted for either as a sales or services arrangement, as applicable. For lease arrangements, the Company determines the classification of the lease in accordance with the Lease Topic of FASB ASC. A lease arrangement that transfers substantially all of the benefits and risks incident to ownership of the equipment is classified as a sales-type lease based on the criteria established by the accounting standard; otherwise the lease is classified as an operating lease. Prior to commencement of the lease term for the equipment, the Company may modify certain payment terms or make concessions. If these circumstances occur, the Company reassesses the classification of the lease based on the modified terms and conditions. For sales-type leases, the revenue allocated to the System Obligation is recognized when the lease term commences, which the Company deems to be when all of the following conditions have been met: (i) the projector, sound system and screen system have been installed and are in full working condition; (ii) the 3D glasses cleaning machine, if applicable, has been delivered; (iii) projectionist training has been completed; and (iv) the earlier of (a) receipt of the written customer acceptance certifying the completion of installation and run-in testing of the equipment and the completion of projectionist training or (b) public opening of the theater, provided collectability is reasonably assured. The initial revenue recognized for sales-type leases consists of the initial payments received and the present value of future initial payments and fixed minimum ongoing payments computed at the interest rate implicit in the lease. Contingent payments in excess of the fixed minimum payments are recognized when reported by theater operators, provided collectability is reasonably assured. For operating leases, initial payments and fixed minimum ongoing payments are recognized as revenue on a straight-line basis over the lease term. For operating leases, the lease term is considered to commence when all of the following conditions have been met: (i) the projector, sound system and screen system have been installed and in full working condition; (ii) the 3D glasses cleaning machine, if applicable, has been delivered; (iii) projectionist training has been completed; and (iv) the earlier of (a) receipt of written customer acceptance certifying the completion of installation and run-in testing of the equipment and the completion of projectionist training or (b) public opening of the theater. Contingent payments in excess of fixed minimum ongoing payments are recognized as revenue when reported by theater operators, provided collectability is reasonably assured. Revenues from joint revenue sharing arrangements with upfront payments that qualify for classification as sales-type leases are recognized in accordance with the sales and sales-type lease criteria discussed above. Contingent revenues from joint revenue sharing arrangements are recognized as box-office results and concessions revenues are reported by the theater operator, provided collectability is reasonably assured. Finance Income Finance income is recognized over the term of the sales-type lease or financed sales receivable, provided collectability is reasonably assured. Finance income recognition ceases when the Company determines that the associated receivable is not collectible. Finance income is suspended when the Company identifies a theater that is delinquent, non-responsive or not negotiating in good faith with the Company. Once the collectability issues are resolved the Company will resume recognition of finance income. Improvements and Modifications Improvements and modifications to the theater system after installation are treated as separate revenue transactions, if and when the Company is requested to perform these services. Revenue is recognized for these services when the performance of the services has been completed, provided there is persuasive evidence of an arrangement, the fee is fixed or determinable and collectability is reasonably assured. Cost of Equipment and Product Sale s Theater systems and other equipment subject to sales-type leases and sales arrangements includes the cost of the equipment and costs related to project management, design, delivery and installation supervision services as applicable. The costs related to theater systems under sales and sales-type lease arrangements are relieved from inventory to costs and expenses applicable to revenues-equipment and product sales when revenue recognition criteria are met. In addition, the Company defers direct selling costs such as sales commissions and other amounts related to these contracts until the related revenue is recognized. The Company may have warranty obligations at or after the time revenue is recognized which require replacement of certain parts that do not affect the functionality of the theater system or services. The costs for warranty obligations for known issues are accrued as charges to costs and expenses applicable to revenues-equipment and product sales at the time revenue is recognized based on the Company’s past historical experience and cost estimates. Cos t of Rentals For theater systems and other equipment subject to an operating lease or placed in a theater operators’ venue under a joint revenue sharing arrangement, the cost of equipment and those costs that result directly from and are essential to the arrangement, is included within property, plant and equipment. Depreciation and impairment losses, if any, are included in cost of rentals based on the accounting policy set out in note 2(g) of the Company’s Form 10-K. Under the new standard, commissions continue to be deferred and recognized as costs and expenses applicable to revenues-rentals in the month they are earned, which is typically the month of installation. Terminations, Consensual Buyouts and Concessions The Company enters into theater system arrangements with customers that contain customer payment obligations prior to the scheduled installation of the theater system. During the period of time between signing and the installation of the theater system, which may extend several years, certain customers may be unable to, or may elect not to, proceed with the theater system installation for a number of reasons including business considerations, or the inability to obtain certain consents, approvals or financing. Once the determination is made that the customer will not proceed with installation, the arrangement may be terminated under the default provisions of the arrangement or by mutual agreement between the Company and the customer (a “consensual buyout”). Terminations by default are situations when a customer does not meet the payment obligations under an arrangement and the Company retains the amounts paid by the customer. Under a consensual buyout, the Company and the customer agree, in writing, to a settlement and to release each other of any further obligations under the arrangement or an arbitrated settlement is reached. Any initial payments retained or additional payments received by the Company are recognized as revenue when the settlement arrangements are executed and the cash is received, respectively. These termination and consensual buyout amounts are recognized in Other revenues. In addition, the Company could agree with customers to convert their obligations for other theater system configurations that have not yet been installed to arrangements to acquire or lease the IMAX digital theater system. The Company considers these situations to be a termination of the previous arrangement and origination of a new arrangement for the IMAX digital theater system. For all arrangements entered into or modified prior to the date of adoption of the amended FASB ASC 605-25, the Company continues to defer an amount of any initial fees received from the customer such that the aggregate of the fees deferred and the net present value of the future fixed initial and ongoing payments to be received from the customer equals the selling price of the IMAX digital theater system to be leased or acquired by the customer. Any residual portion of the initial fees received from the customer for the terminated theater system is recorded in other revenues at the time when the obligation for the original theater system is terminated and the new theater system arrangement is signed. Under the amended FASB ASC 605-25, for all arrangements entered into or materially modified after the date of adoption, the total arrangement consideration to be received is allocated on a relative selling price basis to the digital upgrade and the termination of the previous theater system. The arrangement consideration allocated to the termination of the existing arrangement is recorded in Other revenues at the time when the obligation for the original theater system is terminated and the new theater system arrangement is signed. The Company may offer certain incentives to customers to complete theater system transactions including payment concessions or free services and products such as film licenses or 3D glasses. Reductions in, and deferral of, payments are taken into account in determining the sales price either by a direct reduction in the sales price or a reduction of payments to be discounted in accordance with the Leases or Interests Topic of the FASB ASC. Free products and services are accounted for as separate units of accounting. Other consideration given by the Company to customers are accounted for in accordance with the Revenue Recognition Topic of the FASB ASC. Maintenance and Extended Warranty Services Maintenance and extended warranty services may be provided under a multiple element arrangement or as a separately priced contract. Revenues related to these services are deferred and recognized on a straight-line basis over the contract period and are recognized in Services revenues. Maintenance and extended warranty services includes maintenance of the customer’s equipment and replacement parts. Under certain maintenance arrangements, maintenance services may include additional training services to the customer’s technicians. All costs associated with this maintenance and extended warranty program are expensed as incurred. A loss on maintenance and extended warranty services is recognized if the expected cost of providing the services under the contracts exceeds the related deferred revenue. As the maintenance services are a stand ready obligation with the cost of providing the service expected to increase throughout the term, revenue is recognized over the term of the arrangement such that increased amounts are recognized in later periods. Film Production and IMAX DMR Services In certain film arrangements, the Company produces a film financed by third parties whereby the third party retains the copyright and the Company obtains exclusive distribution rights. Under these arrangements, the Company is entitled to receive a fixed fee or to retain as a fee the excess of funding over cost of production (the “production fee”). The third parties receive a portion of the revenues received by the Company from distributing the film, which is charged to costs and expenses applicable to revenues-services. The production fees are deferred, and recognized as a reduction in the cost of the film based on the ratio of the Company’s distribution revenues recognized in the current period to the ultimate distribution revenues expected from the film. Film exploitation costs, including advertising and marketing are recorded in costs and expenses applicable to revenues-services as incurred. Revenue from film production services where the Company does not hold the associated distribution rights are recognized in Services revenues when performance of the contractual service is complete, provided there is persuasive evidence of an agreement, the fee is fixed or determinable and collectability is reasonably assured. Reven |
Financing Receivables
Financing Receivables | 3 Months Ended |
Mar. 31, 2018 | |
Financing Receivables [Abstract] | |
Financing Receivables | 4. Financing Receivables Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales of theater systems are as follows: March 31, December 31, 2018 2017 Gross minimum lease payments receivable $ 8,447 $ 8,537 Unearned finance income (1,110) (1,147) Minimum lease payments receivable 7,337 7,390 Accumulated allowance for uncollectible amounts (155) (155) Net investment in leases 7,182 7,235 Gross financed sales receivables 162,532 162,522 Unearned finance income (39,018) (39,341) Financed sales receivables 123,514 123,181 Accumulated allowance for uncollectible amounts (922) (922) Net financed sales receivables 122,592 122,259 Total financing receivables $ 129,774 $ 129,494 Net financed sales receivables due within one year $ 25,539 $ 25,455 Net financed sales receivables due after one year $ 97,053 $ 96,804 As at March 31, 2018 , the financed sale receivables had a weighted average effective interest rate of 9.1 % (December 31, 2017 — 9.1 %). |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2018 | |
Inventories [Abstract] | |
Inventories | 5. Inventories March 31, December 31, 2018 2017 Raw materials $ 23,421 $ 21,206 Work-in-process 3,896 2,601 Finished goods 1,779 6,981 $ 29,096 $ 30,788 At March 31, 2018 , finished goods inventory for which title had passed to the customer and revenue was deferred amounted to $ 3.3 million (December 31, 2017 — $ 4.9 million). There were no write-downs for excess and obsolete inventory based upon current estimates of net realizable value considering future events and conditions, during the three months ended March 31, 2018 and 2017. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 6. Property Plant and Equipment As at March 31, 2018 Accumulated Net Book Cost Depreciation Value Equipment leased or held for use Theater system components $ 268,940 $ 109,948 $ 158,992 Camera equipment 5,757 4,079 1,678 274,697 114,027 160,670 Assets under construction 25,187 - 25,187 Other property, plant and equipment Land 8,203 - 8,203 Buildings 74,859 18,005 56,854 Office and production equipment 44,556 23,604 20,952 Leasehold improvements 11,064 3,952 7,112 138,682 45,561 93,121 $ 438,566 $ 159,588 $ 278,978 As at December 31, 2017 Accumulated Net Book Cost Depreciation Value Equipment leased or held for use Theater system components $ 264,259 $ 103,922 $ 160,337 Camera equipment 5,757 3,939 1,818 270,016 107,861 162,155 Assets under construction 23,398 - 23,398 Other property, plant and equipment Land 8,203 - 8,203 Buildings 74,478 17,364 57,114 Office and production equipment 40,442 22,164 18,278 Leasehold improvements 10,974 3,341 7,633 134,097 42,869 91,228 $ 427,511 $ 150,730 $ 276,781 The Company recognized asset impairment charges of $0.5 million in the three months ended March 31, 2018 ( 2017 — $0.4 million) against property, plant and equipment after an assessment of the carrying value of certain assets in light of their future expected cash flows. |
Other Intangible Assets
Other Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Other Intangible Assets [Abstract] | |
Other Intangible Assets | 7. Other Intangible Assets As at March 31, 2018 Accumulated Net Book Cost Amortization Value Patents and trademarks $ 12,391 $ 7,914 $ 4,477 Licenses and intellectual property 21,168 7,822 13,346 Other 19,885 7,175 12,710 $ 53,444 $ 22,911 $ 30,533 As at December 31, 2017 Accumulated Net Book Cost Amortization Value Patents and trademarks $ 12,184 $ 7,710 $ 4,474 Licenses and intellectual property 21,471 7,800 13,671 Other 19,529 6,463 13,066 $ 53,184 $ 21,973 $ 31,211 Other intangible assets of $ 19.9 million are comprised mainly of the Company’s investment in an enterprise resource planning system. Fully amortized other intangible assets of $ 5.9 million are still in use by the Company. During the three months ended March 31, 2018 , the Company acquired $ 0.7 million in other intangible assets. The weighted average amortization period for these additions was 10 years. During the three months ended March 31, 2018 , the Company incurred costs of less than $ 0.1 million to renew or extend the term of acquired other intangible assets which were recorded in selling, general and administrative expenses ( 2017 – $0.1 million). As at March 31, 2018 , estimated amortization expense for each of the years ended December 31, are as follows: 2018 (nine months remaining) $ 3,653 2019 4,871 2020 4,871 2021 4,871 2022 4,871 |
Credit Facility and Playa Vista
Credit Facility and Playa Vista Loan | 3 Months Ended |
Mar. 31, 2018 | |
Credit Facility and Playa Vista Loan [Abstract] | |
Credit Facility and Playa Vista Construction Loan [Text Block] | 8. Credit Facility and Playa Vista Loan The Company maintains a senior secured credit facility (the “Credit Facility”) with a maximum borrowing capacity of $ 200.0 million and a scheduled maturity of March 3, 2020. 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. Certain of the Company’s subsidiaries serve as guarantors (the “Guarantors”) of the Company’s obligations under the Credit Facility. The terms of the Credit Facility are set forth in the Fourth Amended and Restated Credit Agreement (as amended, 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 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. The Company was in compliance with all of its requirements at March 31, 2018 . Total amounts drawn and available under the Credit Facility at March 31, 2018 were $nil and $ 200.0 million, respectively (December 31, 2017 — $nil and $ 200.0 million, respectively). As at March 31, 2018 , the Company did not have any and advance payment guarantees outstanding (December 31, 2017 — $nil), under the Credit Facility. Playa Vista Financing In 2014, IMAX PV Development Inc., a wholly-owned subsidiary of the Company (“PV Borrower”), entered into a loan agreement with Wells Fargo to principally fund the costs of development and construction of the Company’s new West Coast headquarters, located in the Playa Vista neighborhood of Los Angeles, California (the “Playa Vista Loan”). The Playa Vista Loan was fully drawn at $30.0 million and bears interest at a variable rate per annum equal to 2.0% above the 30-day LIBOR rate. PV Borrower is 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 Playa Vista 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 and other documents evidencing and securing the loan, 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. The Company had also guaranteed the Playa Vista Loan. The Loan Documents contain affirmative, negative and financial covenants (including compliance with the financial covenants of the Company’s outstanding Credit Facility), representations, warranties, borrowing conditions, and events of default customary for development projects such as the Playa Vista Project. Bank indebtedness includes the following: March 31, December 31, 2018 2017 Playa Vista Loan $ 25,167 $ 25,667 Deferred charges on debt financing (300) (310) $ 24,867 $ 25,357 Total amounts drawn under the loan at March 31, 2018 was $ 25.2 million (December 31, 2017 — $ 25.7 million). The effective interest rate for the three months ended March 31, 2018 was 3.70 % ( March 31, 2017 — 2.85 %). In accordance with the loan agreement, the Company is obligated to make payments on the principal of the loan as follows: 2018 (nine months remaining) $ 1,500 2019 2,000 2020 2,000 2021 2,000 2022 2,000 Thereafter 15,667 $ 25,167 Wells Fargo Foreign Exchange Facility Within the Credit Facility, the Company is able to purchase foreign currency forward contracts and/or other swap arrangements. There is no settlement risk on its foreign currency forward contracts at March 31, 2018 , as the fair value exceeded the notional value of the forward contracts. As at March 31, 2018 , the Company has $ 35.0 million in notional value of such arrangements outstanding. Bank of Montreal Facility As at March 31, 2018 , the Company has available a $ 10.0 million facility (December 31, 2017 — $ 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 Export Development Canada (the “Bank of Montreal Facility”). As at March 31, 2018 , the Company has outstanding letters of credit and advance payment guarantees outstanding of $ 0.1 million (December 31, 2017 — $nil), under the Bank of Montreal Facility. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2018 | |
Commitments, Contingencies and Guarantees [Abstract] | |
Commitments, Contingencies and Guarantees | 9. Commitments, Contingencies and Guarantees Commitments In the ordinary course of business, the Company enters into contractual agreements with third parties that include non-cancelable payment obligations, for which it is liable in future periods. These arrangements can include terms binding the Company to minimum payments and/or penalties if it terminates the agreement for any reason other than an event of default as described by the agreement. The Company has a minimum commitment of $ 2.7 million toward the development, production, post-production and marketing related to certain film and new content initiatives. As of March 31, 2018 , the Company has spent $ 1.3 million, and expects to spend $ 1.4 million during the remainder of the year. Contingencies and guarantees 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. On May 15, 2006, the Company initiated arbitration against Three-Dimensional Media Group, Ltd. (“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 re-examination proceedings involving one of 3DMG’s patents. Following a status conference on April 27, 2016 before the ICDR, the ICDR granted 3DMG leave to amend its answer and counterclaims, and subsequently lifted the stay in this matter. In its amended counterclaims, 3DMG seeks damages for alleged unpaid royalties, damages and other fees under the license and consulting agreements, and the Panel also has permitted 3DMG to advance new damage theories. The ICDR held the first phase of a final hearing during the week of July 10, 2017, and the second phase of the hearing occurred during the week of October 16, 2017. The parties submitted final, post-hearing briefs in December 2017, and the Panel held closing oral arguments in March 2018. The Company believes that the amount of loss suffered in connection with the amended 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. The minimum amount in the range has been used to measure the amount to be accrued for this loss contingency in accordance with FASB ASC Topic 450. 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 and on June 10, 2013, the Bombay High Court ruled that it had jurisdiction over the proceeding filed by E-City. The Company appealed that ruling to the Supreme Court of India, and on March 10, 2017, the Supreme Court set aside the Bombay High Court’s judgement and dismissed E-City’s petition. On March 29, 2017, the Company filed an Execution Application in the Bombay High Court seeking to enforce the ICC award against E-City and several related parties. That matter is currently pending. The Company has also taken steps to enforce the ICC final award outside of India. In December 2011, the Ontario Superior Court of Justice issued an order recognizing the final award and requiring E-City to pay the Company $30,000 to cover the costs of the application, and in October 2015, the New York Supreme Court recognized the Canadian judgment and entered it as a New York judgment. The Company intends to continue pursuing its rights and seeking to enforce the award, although no assurances can be given with respect to the ultimate outcome. In March 2013, IMAX (Shanghai) Multimedia Technology Co., Ltd. (“IMAX Shanghai”), the Company’s majority-owned subsidiary in China, received notice from the Shanghai office of the General Administration of Customs (“Customs Authority”) that it had been selected for a customs audit (the “Audit”). In the course of the Audit, the Customs Authority discovered the underpayment by IMAX Shanghai of the freight and insurance portion of the customs duties and taxes applicable to the importation of certain IMAX theater systems during the period from October 2011 through March 2013. Though IMAX Shanghai’s importation agent accepted responsibility for the error giving rise to the underpayment, the matter was transferred first to the Anti-Smuggling Bureau (the “ASB”) of the Customs Authority and then to the Third Division of Shanghai People’s Procuratorate for further review. During the year ended December 31, 2017, at the request of the ASB, IMAX Shanghai paid approximately $0.15 million to the ASB to satisfy the amount owing as a result of the underpayment. Given that the amount of the underpayment exceeds RMB 200,000 (the applicable ASB threshold), the Company has been advised that the matter may be treated as a criminal rather than as an administrative matter. During the year ended December 31, 2017, IMAX Shanghai recorded an estimate of $0.3 million in respect of fines that it believes are likely to result from the matter. IMAX Shanghai has been advised that the range of potential penalties is between three and five times the underpayment depending on whether the matter is assessed as criminal or administrative; however, the actual amount of any fines or other penalties remains unknown and the Company cautions that these actual fines or other penalties maybe be greater or less than the amount accrued or the expected range. On November 11, 2013, Giencourt Investments, S.A. (“Giencourt”) initiated arbitration before the International Centre for Dispute Resolution in Miami, Florida, based on alleged breaches by the Company of its theater agreement and related license agreement with Giencourt. An arbitration hearing for witness testimony was held during the week of December 14, 2015. At the hearing, Giencourt’s expert identified monetary damages of up to approximately $10.4 million, which Giencourt sought to recover from the Company. The Company asserted a counterclaim against Giencourt for breach of contract and sought to recover lost profits in excess of $24.0 million under the agreements. Subsequently, in December 2015, Giencourt made a motion to the panel seeking to enforce a purported settlement of the matter based on negotiations between Giencourt and the Company. The panel held a final hearing with closing arguments in October 2016. On February 7, 2017, the panel issued a Partial Final Award and on July 21, 2017, the panel issued a Final Award (collectively, the “Award”), which held that the parties had reached a binding settlement, and therefore the panel did not reach the merits of the dispute. The Company strongly disputes that discussions about a potential resolution of this matter amounted to an enforceable settlement. In October 2017, the Company filed a petition to vacate the arbitration award in the United States Court for the Southern District of Florida on various grounds, including that the panel exceeded its jurisdiction. The petition is still pending. At this time, the Company is unable to determine the amounts that it may owe pursuant to the Award, or the timing of any such payments, and therefore no assurances can be given with respect to the ultimate outcome of the matter . 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. 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. Financial Guarantees The Company has provided no significant financial guarantees to third parties. Product Warranties The Company’s accrual for product warranties, that was recorded as part of accrued and other liabilities in the condensed consolidated balance sheets was $0.1 million and $0.1 million at March 31, 2018 and December 31, 2017 , respectively. Director/Officer Indemnifications 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 the Canada Business Corporations Act , against expenses (including legal fees), judgments, fines and any amounts 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 sheets as at March 31, 2018 and December 31, 2017 , with respect to this indemnity. Other Indemnification Agreements 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. |
Condensed Consolidated Statem17
Condensed Consolidated Statements of Operations Supplemental Information | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation and Condensed Consolidated Statements of Operations Supplemental Information [Abstract] | |
Condensed Consolidated Statements of Operations Supplemental Information | 10. Condensed Consolidated Statements of Operations Supplemental Information Selling Expenses 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 $ 0.7 million for the three months ended March 31, 2018 ( 2017 — $ 0.4 million). Film exploitation costs, including advertising and marketing, totaled $ 5.3 million for the three months ended March 31, 2018 ( 2017 — $ 2.4 million), 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 less than $ 0.1 million for the three months ended March 31, 2018 ( 2017 — $ 0.1 million). Direct advertising and marketing costs for each theater are charged to costs and expenses applicable to revenues-rentals as incurred. These costs totaled an expense of $ 0.1 million for the three months ended March 31, 2018 ( 2017 — $ 0.3 million). Foreign Exchange Included in selling, general and administrative expenses for the three months ended March 31, 2018 is a loss of $ 0.1 million ( 2017 — loss of less than $ 0.1 million), for net foreign exchange gains/losses related to the translation of foreign currency denominated monetary assets and liabilities. See note 16 (d) for additional information. Collaborative Arrangements Joint Revenue Sharing Arrangements 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 42 exhibitors for a total of 1,069 theater systems, of which 718 theaters were operating as at March 31, 2018 , 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 3. 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 months ended March 31, 2018 amounted to $ 17.9 million ( 2017 — $ 15.7 million). IMAX DMR 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 box-office receipts of the film, which in recent years has averaged approximately 12.5% outside of Greater China and a lower percentage for certain films within Greater China. The Company does not typically hold distribution rights or the copyright to these films. For the three months ended March 31, 2018 , the majority of IMAX DMR revenue was earned from the exhibition of 22 IMAX DMR films ( 2017 – 18 ) throughout the IMAX theater network. Amounts attributable to transactions arising between the Company and its customers under IMAX DMR arrangements are included in Services revenue and for the three months ended March 31, 2018 amounted to $ 27.1 million ( 2017 — $ 23.4 million). Co-Produced Film Arrangements 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 and 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. As at March 31, 2018 , the Company has two significant co-produced film arrangements which represent the VIE total assets balance of $ 11.4 and liabilities balance of $ 11.4 million and three other co-produced film arrangements, the terms of which are similar. The accounting policies relating to co-produced film arrangements are disclosed in notes 2(a) of the Company’s 2017 Form 10-K, and in note 3. For the three months ended March 31, 2018 , amounts totaling $ 0.2 million ( 2017 — $ 0.5 million) 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. As at March 31, 2018 , the Company is participating in one significant co-produced television arrangement. This arrangement is not a VIE. For the three months ended March 31, 2018 , revenues of $ 0.4 million ( 2017 — $nil) and costs and expenses applicable to revenues of $ 0.4 million ( 2017 — $nil) attributable to this collaborative arrangement have been recorded in Revenue – Services and Costs and expenses applicable to Revenues – Services, respectively. Included therein are net revenues attributable to transactions between the Company and other parties involved in the production of the episodic content of $nil ( 2017 — $nil). |
Condensed Consolidated Statem18
Condensed Consolidated Statements of Cash Flows Supplemental Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Condensed Consolidated Statements of Cash Flows Supplemental Information | 11. Condensed Consolidated Statements of Cash Flows Supplemental Information Changes in other non-cash operating assets and liabilities are comprised of the following: Three Months Ended March 31, 2018 2017 Decrease (increase) in: Accounts receivable $ 10,314 $ 161 Financing receivables (420) 1,763 Inventories 1,692 (3,312) Prepaid expenses (2,616) (1,421) Other assets (2,346) (224) Increase (decrease) in: Accounts payable (10,419) (6,041) Accrued and other liabilities (4,862) (18,825) Deferred revenue (1,161) 10,619 $ (9,818) $ (17,280) Cash payments made on account of: Three Months Ended March 31, 2018 2017 Income taxes $ 4,765 $ 7,270 Interest $ 226 $ 190 Depreciation and amortization are comprised of the following: Three Months Ended March 31, 2018 2017 Film assets $ 3,571 $ 3,805 Property, plant and equipment Joint revenue sharing arrangements 4,840 4,246 Other property, plant and equipment 3,442 2,760 Other intangible assets 1,217 926 Other assets 310 220 Deferred financing costs 141 131 $ 13,521 $ 12,088 Write-downs, net of recoveries, are comprised of the following: Three Months Ended March 31, 2018 2017 Accounts receivable $ 451 $ 185 Inventories - - Financing receivables - - Property, plant and equipment (2) 421 409 Joint revenue sharing arrangements (2) 126 - Other intangible assets 38 - Film assets (1) - 3,416 Other assets - - $ 1,036 $ 4,010 __________ (1) The Company reviewed the carrying value of certain documentary film assets as a result of lower than expected revenue being generated during the period and revised expectations for future revenues based on the latest information available. In the three months ended March 31, 2017, an impairment of $3.4 million was recorded based on the carrying value of these documentary films as compared to the related estimated future box office and revenues that would ultimately be generated by these films. No such impairment was recognized in the three months ended March 31, 2018. (2) The Company recognized asset impairment charges of $0.5 million (2017 — $0.4 million) against property, plant and equipment after an assessment of the carrying value of certain assets in light of their future expected cash flows. Significant non-cash investing and financing activities are comprised of the following: Three Months Ended March 31, 2018 2017 Net accruals related to: Purchases of property, plant and equipment $ 364 $ 1,384 Investment in joint revenue sharing arrangements (20) (55) Acquisition of other intangible assets 5 (25) $ 349 $ 1,304 |
Capital Stock
Capital Stock | 3 Months Ended |
Mar. 31, 2018 | |
Capital Stock [Abstract] | |
Capital Stock | 13. Capital Stock Stock-Based Compensation Compensation costs recorded in the condensed consolidated statements of operations for the Company’s stock-based compensation plans were $ 4.8 million for the three months ended March 31, 2018 ( 2017 — $ 5.3 million). The following reflects the stock-based compensation expense recorded to the respective financial statement line items: Three Months Ended March 31, 2018 2017 Cost and expenses applicable to revenues $ 96 $ - Selling, general and administrative expenses 4,417 5,264 Research and development 334 - Exit costs, restructuring charges and associated impairments (19) - $ 4,828 $ 5,264 The following reflects a breakdown of the Company’s stock-based compensation expense by each plan type: Three Months Ended March 31, 2018 2017 Stock options $ 1,389 $ 1,354 Restricted Share Units 3,215 3,446 China Long Term Incentive Plan Restricted Share Units 183 108 China Options 41 250 China Cash Settled Share-Based Payments - 106 $ 4,828 $ 5,264 Stock Option Summary The following table summarizes certain information in respect of option activity under the SOP and IMAX Long Term Incentive Plan for the three months ended March 31 : Weighted Average Exercise Number of Shares Price Per Share 2018 2017 2018 2017 Options outstanding, beginning of period 5,082,100 5,190,542 $ 29.31 $ 28.35 Granted 878,629 679,030 22.06 32.16 Exercised - (584,589) - 22.38 Forfeited (45,164) (16,380) 31.13 31.69 Expired (10,000) - 27.09 - Options outstanding, end of period 5,905,565 5,268,603 28.22 29.49 Options exercisable, end of period 4,133,351 3,945,034 29.14 28.68 Restricted Share Units (“RSU”) Summary The following table summarizes certain information in respect of RSU activity under the IMAX Long Term Incentive Plan for the three months ended March 31: Number of Awards Weighted Average Grant Date Fair Value Per Share 2018 2017 2018 2017 RSUs outstanding, beginning of period 995,329 1,124,180 $ 32.80 $ 33.01 Granted 535,362 373,540 20.85 32.45 Vested and settled (257,888) (201,793) 32.76 31.25 Forfeited (30,024) (20,506) 31.93 32.31 RSUs outstanding, end of period 1,242,779 1,275,421 27.58 33.13 Issuer Purchases of Equity Securities On June 12, 2017, the Company announced that its Board of Directors approved a new $200.0 million share repurchase program for shares of the Company’s common stock. The share repurchase program expires on June 30, 2020. 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 three months ended March 31, 2018 , the Company repurchased 654,224 common shares ( 2017 – nil) at an average price of $ 20.46 ( 2017 – $nil). The total number of shares purchased during the three months ended March 31, 2018 does not include any shares purchased in the administration of employee share-based compensation plans (which amounted to 300,000 ( 2017 — 368,624 ) common shares, at an average price of $ 20.55 per share ( 2017 — $ 32.38 per share)). Net Income Per Share Reconciliations of the numerator and denominator of the basic and diluted per-share computations are comprised of the following: Three Months Ended March 31, 2018 2017 Net income applicable to common shareholders $ 8,505 $ 75 Weighted average number of common shares (000's): Issued and outstanding, beginning of period 64,696 66,160 Weighted average number of shares repurchased, net of shares issued, during the period (141) 203 Weighted average number of shares used in computing basic income per share 64,555 66,363 Assumed exercise of stock options and RSUs, net of shares assumed repurchased 64 817 Weighted average number of shares used in computing diluted income per share 64,619 67,180 The calculation of diluted earnings per share excludes 6,409,364 ( 2017 — 1,785,013 ) shares that are issuable upon the vesting of 589,412 ( 2017 — 171,673 ) RSUs and the exercise of 5,819,952 ( 2017 — 1,613,340 ) stock options for the three months ended March 31, 2018 and 2017 , respectively, as the impact would be antidilutive. Shareholder’s Equity Attributable to Common Shareholders The following summarizes the movement of Shareholders’ Equity attributable to common shareholders for the three months ended March 31, 2018 : Balance as at December 31, 2017 $ 527,746 Adjustments to capital stock: Average carrying value of repurchased and retired common shares (4,494) Share held in treasury (859) Adjustments to other equity: Employee stock options granted 1,429 RSUs granted 3,398 RSUs vested (6,261) Adjustments to accumulated deficit: Net income attributable to common shareholders 8,505 Adoption of ASC Topic 606, Revenue from Contracts with Customers 27,571 Common shares repurchased and retired (8,902) Adjustments to accumulated other comprehensive loss: Unrealized net loss from cash flow hedging instruments (1,007) Realization of cash flow hedging net gain upon settlement (220) Foreign currency translation adjustments 1,394 Tax effect of movement in other comprehensive income 321 Balance as at March 31, 2018 $ 548,621 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | 12. Income Taxes Income Taxes 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. During the quarter ended March 31, 2018 , 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 March 31, 2018 , the Company had net deferred income tax assets after valuation allowance of $ 25.1 million (December 31, 2017 — $ 30.7 million), which consists of a gross deferred income tax asset of $ 25.3 million (December 31, 2017 — $ 30.9 million), against which the Company is carrying a $ 0.2 million valuation allowance (December 31, 2017 — $ 0.2 million). For the quarter ended March 31, 2018 , the Company recorded a provision for income taxes of $ 4.5 million. Included in the provision for income taxes was $0.1 million related to its provision for uncertain tax positions and a $0.7 million provision related to stock-based compensation costs recognized in the period as the tax deduction was less than the cumulative book expense recorded. The Company elected to early adopt ASU 2016-16 related to income taxes in the first quarter of 2017. The impact from the adoption was reflected in the Company’s condensed consolidated financial statements on a modified retrospective basis resulting in an increase to Accumulated deficit of $8.3 million, a decrease to Other assets of $14.8 million, an increase to Deferred taxes of $7.9 million and an increase to Accrued and other liabilities of $1.4 million. On December 22, 2017, the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act when a company does not have all the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. While the Company is able to make reasonable estimates of the impact of the reduction in corporate rate and other changes in the legislation the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions the Company may take. The effect of the provisional re-measurement on deferred taxes due to the Tax Reform was reflected entirely in 2017. As of December 31, 2017, the Company was able to determine a reasonable estimate of the effects of tax reform and recorded that estimate as a provisional amount. The provisional re-measurement of the deferred tax assets and liabilities resulted in a $9.3 million discrete tax provision for the year. The provisional re-measurement amount may change as data becomes available allowing more accurate scheduling of the deferred tax assets and liabilities. In addition, the Tax Act also included a number of other changes. The Company continues to monitor the impact of the Tax Act during the measurement period, which can range up to one-year, due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and actions the Company may take as a result of the Tax Act. No further changes have been reported as of March 31, 2018. As a result, no U.S. income taxes have been provided for any undistributed foreign earnings, or any additional outside basis differences inherent in these foreign entities, as the Company is a Canadian corporation and these amounts continue to be indefinitely reinvested in foreign operations which are owned directly or indirectly. The Company has not provided Canadian taxes on cumulative earnings of non-Canadian affiliates and associated companies that have been reinvested indefinitely. Taxes are provided for earnings of non-Canadian affiliates and associated companies when the Company determines that such earnings are no longer indefinitely reinvested. Cash held outside of North America as at March 31, 2018 was $125.9 million (December 31, 2017 — $119.4 million), of which $37.5 million was held in the People’s Republic of China (“PRC”) (December 31, 2017 — $32.6 million). The Company's intent is to permanently reinvest these amounts outside of Canada and the Company does not currently anticipate that it will need funds generated from foreign operations to fund North American operations. In the event funds from foreign operations are needed to fund operations in North America and if withholding taxes have not already been previously provided, the Company would be required to accrue and pay these additional withholding tax amounts on repatriation of funds from China to Canada. The Company currently estimates this amount to be $7.8 million. Income Tax Effect on Other Comprehensive Income The income tax benefit (expense) included in the Company’s other comprehensive income are related to the following items: Three Months Ended March 31, 2018 2017 Unrealized change in cash flow hedging instruments $ 263 $ (82) Realized change in cash flow hedging instruments upon settlement 58 (75) $ 321 $ (157) |
Segmented Information
Segmented Information | 3 Months Ended |
Mar. 31, 2018 | |
Segmented Information [Abstract] | |
Segmented Information | 14. Segmented Information 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. The Company’s reportable segments are organized under four primary groups identified by nature of product sold or service provided: (1) Network Business, representing variable revenue generated by box office results and which includes the reportable segment of IMAX DMR and contingent rent from the joint revenue sharing arrangements and IMAX systems segments. Effective January 1, 2018, the Company no longer includes hybrid joint revenue sharing arrangements, which take the form of a sale, in the joint revenue sharing arrangement reportable segment. These arrangements are now reflected under the IMAX systems segment of Theater Business ; (2) Theater Business, representing revenue generated by the sale and installation of theater systems and maintenance services, primarily related to the IMAX Systems and Theater System Maintenance reportable segments, and also includes hybrid (fixed and contingent) revenues and upfront installation costs from sales arrangements previously reported in the joint revenue sharing arrangements segment and after-market sales of projection system parts and 3D glasses from the other segment; (3) New Business, which includes content licensing and distribution fees associated with the Company’s original content investments, virtual reality initiatives, and other business initiatives that are in the development and/or start-up phase, and (4) Other; which includes the film post-production and distribution segments and certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items from the other segment. The Company is presenting information at a disaggregated level to provide more relevant information to readers, as permitted by the standard. On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, and all the related amendments on a prospective basis, refer to note 3 for additional information. In addition, refer to Item 2 of the Company’s Form 10-Q for additional information regarding the four primary groups mentioned above. Transactions between the film production 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 March 31, 2018 2017 Revenue (1) Network business IMAX DMR $ 27,051 $ 23,408 Joint revenue sharing arrangements – contingent rent (2) 17,861 15,233 IMAX systems – contingent rent (2) - 688 44,912 39,329 Theater business IMAX systems (2) 20,868 9,527 Joint revenue sharing arrangements – fixed fees (2) - 470 Theater system maintenance 12,712 11,045 Other theater 1,377 2,165 34,957 23,207 New business 608 1,280 Other Film post-production 3,163 3,072 Film distribution 571 512 Other 773 1,257 4,507 4,841 Total $ 84,984 $ 68,657 Gross Margin Network business IMAX DMR (3) $ 18,782 $ 17,467 Joint revenue sharing arrangements – contingent rent (2)(3) 12,740 10,250 IMAX systems – contingent rent (2) - 688 31,522 28,405 Theater business IMAX systems (2)(3) 14,292 5,741 Joint revenue sharing arrangements – fixed fees (2)(3) - 88 Theater system maintenance 6,205 4,249 Other theater (45) 430 20,452 10,508 New business (1,469) (337) Other Film post-production 1,685 1,101 Film distribution (3) (1,239) (3,764) Other (259) (142) 187 (2,805) Total $ 50,692 $ 35,771 ___________ (1) The Company’s largest customer represented 17.2 % of total revenues for the three months ended March 31, 2018 ( 2017 — 17.2 %). (2) On January 1, 2018, the Company adopted ASC Topic 606, utilizing the modified retrospective transition method with a cumulative catch-up adjustment. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application, referred to as open contracts. All system sales and maintenance contracts with the existing network of IMAX theaters and the backlog of sales contracts make up a significant majority of the Company’s open contracts at any point in time. DMR arrangements where the film continues to be shown by the Company’s exhibitor partners, film distribution arrangements with remaining terms, aftermarket sales orders that have been received but for which control of the assets has not yet transferred to the customer are all also considered open contracts. Refer to note 3 for additional information. (3) IMAX DMR segment margins include marketing costs of $ 4.1 million for the three months ended March 31, 2018 ( 2017 — $ 2.6 million). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $ 0.2 million for the three months ended March 31, 2018 ( 2017 — $ 0.4 million). IMAX systems segment margins include marketing and commission costs of $ 0.7 million for the three months ended March 31, 2018 ( 2017 — $ 0.4 million). Film distribution segment margins include marketing expense of $ 1.2 million for the three months ended March 31, 2018 ( 2017 — a recovery of $ 0.2 million). Geographic Information 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 March 31, 2018 2017 Revenue Greater China $ 28,146 $ 18,590 United States 27,632 25,198 Western Europe 10,262 5,813 Asia (excluding Greater China) 9,230 8,429 Canada 2,566 3,282 Latin America 1,479 1,654 Russia & the CIS 1,990 3,183 Rest of the World 3,679 2,508 Total $ 84,984 $ 68,657 No single country in the Rest of the World, Western Europe, Latin America and Asia (excluding Greater China) classifications comprises more than 10% of the total revenue. |
Employees Pension and Postretir
Employees Pension and Postretirement Benefits | 3 Months Ended |
Mar. 31, 2018 | |
Employees Pension and Postretirement Benefits [Abstract] | |
Employees Pension and Postretirement Benefits | 15. Employee's Pension and Postretirement Benefits Defined Benefit Plan The Company has an unfunded U.S. defined benefit pension plan (the “SERP”) covering Richard L. Gelfond, CEO of the Company. The following table provides disclosure of the pension obligation for the SERP: March 31, December 31, 2018 2017 Projected benefit obligation: Obligation, beginning of period $ 19,003 $ 19,580 Interest cost 105 427 Actuarial gain - (1,004) Obligation, end of period and unfunded status $ 19,108 $ 19,003 The following table provides disclosure of pension expense for the SERP: Three Months Ended March 31, 2018 2017 Interest cost $ 105 $ 107 Pension expense $ 105 $ 107 No contributions are expected to be made for the SERP during the remainder of 2018 . The Company expects interest costs of $ 0.3 million to be recognized as a component of net periodic benefit cost during the remainder of 2018 . The accumulated benefit obligation for the SERP was $ 19.1 million at March 31, 2018 (December 31, 2017 — $ 19.0 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: 2018 (nine months remaining) $ - 2019 - 2020 20,076 2021 - 2022 - Thereafter - $ 20,076 The SERP assumptions are that Mr. Gelfond will receive a lump sum payment six months after retirement at the end of the current term of his employment agreement (December 31, 2019), although Mr. Gelfond has not informed the Company that he intends to retire at that time. Defined Contribution Pension Plan The Company also maintains defined contribution 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 months ended March 31, 2018 , the Company contributed and expensed an aggregate of $ 0.3 million ( 2017 — $ 0.3 million ) to its Canadian defined contribution plan and an aggregate of $ 0.2 million ( 2017 — $ 0.2 million ) to its defined contribution employee plan under Section 401(k) of the U.S. Internal Revenue Code. Postretirement Benefits - Executives The Company has an unfunded postretirement plan for Mr. Gelfond and Bradley J. Wechsler, Chairman of the Company’s Board of Directors. 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 March 31, 2018 is $ 0.7 million (December 31, 2017 — $ 0.7 million). The Company has expensed less than $ 0.1 million for the three months ended March 31, 2018 ( 2017 — less than $0.1 million). The following benefit payments are expected to be made as per the current plan assumptions in each of the next 5 years: 2018 (nine months remaining) $ 24 2019 26 2020 33 2021 37 2022 40 Thereafter 544 Total $ 704 Postretirement Benefits – Canadian Employees The Company has an unfunded postretirement plan for its Canadian employees upon meeting specific eligibility requirements. The Company will provide eligible participants, upon retirement, with health and welfare benefits. The postretirement benefits obligation as at March 31, 2018 is $ 1.7 million (December 31, 2017 — $ 1.7 million). The Company has expensed less than $ 0.1 million for the three months ended March 31, 2018 ( 2017 — less than $ 0.1 million). The following benefit payments are expected to be made as per the current plan assumptions in each of the next 5 years: 2018 (nine months remaining) $ 91 2019 109 2020 86 2021 111 2022 99 Thereafter 1,169 Total $ 1,665 Deferred Compensation Retirement Plan The Company maintains a deferred compensation plan (“the Retirement Plan”) covering Greg Foster, CEO of IMAX Entertainment and Senior Executive Vice President of the Company. The Company has agreed to make a total contribution of $3.2 million pursuant to a schedule set forth in Mr. Foster’s employment agreement. The Retirement Plan is subject to a vesting schedule based on continued employment with the Company, and will vest in 25% increments on July 2 of 2019, 2022, 2025 and 2027, but will vest in full if Mr. Foster’s employment terminates under specified circumstances, including if the Company terminates his employment without cause, if he resigns for good reason, or if the Company does not offer to renew Mr. Foster’s employment on terms substantially similar to those set forth in his current employment agreement and, as a result, Mr. Foster incurs a separation from service. As at March 31, 2018 , the Company had an unfunded benefit obligation recorded of $ 1.2 million (December 31, 2017 — $ 1.0 million). The Company recognized an expense of $0.2 million and $0.3 million for the three months ended March 31, 2018 and 2017 , respectively. |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments [Abstract] | |
Financial Instruments | 16. Financial Instruments Financial Instruments 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 leased, 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. Fair Value Measurements 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 March 31, 2018 As at December 31, 2017 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Level 1 Cash and cash equivalents (1) $ 145,579 $ 145,579 $ 158,725 $ 158,725 Level 2 Net financed sales receivable (2) $ 122,592 $ 122,828 $ 122,259 $ 122,918 Net investment in sales-type leases (2) 7,182 7,306 7,235 7,409 Convertible loan receivable (2) 1,500 1,500 1,500 1,500 Equity securities (3) 2,012 2,012 2,016 2,016 Foreign exchange contracts — designated forwards (3) 198 198 1,425 1,425 Borrowings under the Playa Vista Loan (1) (25,167) (25,167) (25,667) (25,667) ______________ (1) Recorded at cost, which approximates fair value. (2) Estimated based on discounting future cash flows at currently available interest rates with comparable terms. (3) Value determined using quoted prices in active markets. There were no significant transfers between Level 1 and Level 2 during the three months ended March 31, 2018 or 2017 . 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. There were no transfers in or out of the Company’s level 3 assets during the three months ended March 31, 2018 . Financing Receivables 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, and 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 March 31, 2018 As at December 31, 2017 Minimum Financed Minimum Financed Lease Sales Lease Sales Payments Receivables Total Payments Receivables Total In good standing $ 6,176 $ 119,081 $ 125,257 $ 6,265 $ 118,060 $ 124,325 Credit Watch 580 2,830 3,410 568 2,926 3,494 Pre-approved transactions 581 548 1,129 557 1,003 1,560 Transactions suspended - 1,055 1,055 - 1,192 1,192 $ 7,337 $ 123,514 $ 130,851 $ 7,390 $ 123,181 $ 130,571 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 March 31, 2018 As at December 31, 2017 Recorded Related Recorded Related Investment Allowance Investment Allowance Net investment in leases $ - $ - $ - $ - Net financed sales receivables 1,055 (922) 1,192 (922) Total $ 1,055 $ (922) $ 1,192 $ (922) 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. The Company’s aged financing receivables are as follows: As at March 31, 2018 Related Recorded Accrued Billed Unbilled Total Investment and 30-89 Days Financing Recorded Recorded Related Net of Current 90+ Days Receivables Investment Investment Allowances Allowances Net investment in leases $ 110 $ 59 $ 511 $ 680 $ 6,657 $ 7,337 $ (155) $ 7,182 Net financed sales receivables 2,518 2,322 3,292 8,132 115,382 123,514 (922) 122,592 Total $ 2,628 $ 2,381 $ 3,803 $ 8,812 $ 122,039 $ 130,851 $ (1,077) $ 129,774 As at December 31, 2017 Related Recorded Accrued Billed Unbilled Total Investment and 30-89 Days Financing Recorded Recorded Related Net of Current 90+ Days Receivables Investment Investment Allowances Allowances Net investment in leases $ 103 $ 74 $ 376 $ 553 $ 6,837 $ 7,390 $ (155) $ 7,235 Net financed sales receivables 3,285 1,399 3,763 8,447 114,734 123,181 (922) 122,259 Total $ 3,388 $ 1,473 $ 4,139 $ 9,000 $ 121,571 $ 130,571 $ (1,077) $ 129,494 The Company’s recorded investment in past due financing receivables for which the Company continues to accrue finance income is as follows: As at March 31, 2018 Related Recorded Accrued Billed Unbilled Investment and 30-89 Days Financing Recorded Related Past Due Current 90+ Days Receivables Investment Allowance and Accruing Net investment in leases $ 85 $ 59 $ 511 $ 655 $ 2,137 $ - $ 2,792 Net financed sales receivables 645 1,020 3,066 4,731 25,693 - 30,424 Total $ 730 $ 1,079 $ 3,577 $ 5,386 $ 27,830 $ - $ 33,216 As at December 31, 2017 Related Recorded Accrued Billed Unbilled Investment and 30-89 Days Financing Recorded Related Past Due Current 90+ Days Receivables Investment Allowance and Accruing Net investment in leases $ 68 $ 70 $ 376 $ 514 $ 2,287 $ - $ 2,801 Net financed sales receivables 1,165 743 3,363 5,271 27,430 - 32,701 Total $ 1,233 $ 813 $ 3,739 $ 5,785 $ 29,717 $ - $ 35,502 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 or 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 March 31, 2018 Average Interest Recorded Unpaid Related Recorded Income Investment Principal Allowance Investment Recognized With an allowance recorded: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables 1,050 5 (922) 1,050 - With no related allowance recorded: Net investment in leases - - - - - Net financed sales receivables - - - - - Total: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables $ 1,050 $ 5 $ (922) $ 1,050 $ - For the Three Months Ended March 31, 2017 Average Interest Recorded Unpaid Related Recorded Income Investment Principal Allowance Investment Recognized With an allowance recorded: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables 525 75 (494) 525 - With no related allowance recorded: Net investment in leases - - - - - Net financed sales receivables - - - - - Total: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables $ 525 $ 75 $ (494) $ 525 $ - The Company’s activity in the allowance for credit losses for the period and the Company’s recorded investment in financing receivables are as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Net Investment Net Financed Net Investment Net Financed in Leases Sales Receivables in Leases Sales Receivables Allowance for credit losses: Beginning balance $ 155 $ 922 $ 672 $ 494 Charge-offs - - - - Recoveries - - - - Provision - - - - Ending balance $ 155 $ 922 $ 672 $ 494 Ending balance: individually evaluated for impairment $ 155 $ 922 $ 672 $ 494 Financing receivables: Ending balance: individually evaluated for impairment $ 7,337 $ 123,514 $ 8,480 $ 113,176 Foreign Exchange Risk Management 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. In addition, because IMAX films generate box office in 77 different countries, unfavourable exchange rates between applicable local currencies, and the U.S. dollar affect the Company’s reported gross box-office and revenues, further impacting the Company’s results of operations. 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 March 31, 2018 (the “Foreign Currency Hedges”), with settlement dates throughout 2018 and 2019 . 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 statements of operations except for derivatives designated and qualifying as foreign currency cash flow hedging instruments. For foreign currency cash flow 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 statements of operations when the forecasted transaction occurs. Any ineffective portion is recognized immediately in the condensed consolidated statements of operations. The Company currently does not hold any derivatives which are not designated as hedging instruments . The following tabular disclosures reflect the impact that derivative instruments and hedging activities have on the Company’s condensed consolidated financial statements: Notional value of foreign exchange contracts: March 31, December 31, 2018 2017 Derivatives designated as hedging instruments: Foreign exchange contracts — Forwards $ 34,962 $ 35,170 Fair value of derivatives in foreign exchange contracts: March 31, December 31, Balance Sheet Location 2018 2017 Derivatives designated as hedging instruments: Foreign exchange contracts — Forwards Other assets $ 497 $ 1,447 Accrued and other liabilities (299) (22) $ 198 $ 1,425 Derivatives in Foreign Currency Hedging relationships are as follows: Three Months Ended March 31, 2018 2017 Foreign exchange contracts — Forwards Derivative (Loss) Gain Recognized in OCI (Effective Portion) $ (1,007) $ 313 Location of Derivative Gain Three Months Ended (Loss) Reclassified from AOCI March 31, into Income (Effective Portion) 2018 2017 Foreign exchange contracts — Forwards Selling, general and administrative expenses $ 220 $ (285) Three Months Ended March 31, 2018 2017 Foreign exchange contracts - Forwards Derivative Gain (Loss) Recognized In and Out of OCI (Effective Portion) $ 46 $ (47) The Company's estimated net amount of the existing gains as at March 31, 2018 is $ 0.4 million, which is expected to be reclassified to earnings within the next twelve months. Investments in New Business Ventures 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 March 31, 2018 , the equity method of accounting is being utilized for an investment with a carrying value of $nil (December 31, 2017 — $nil). The Company’s accumulated losses in excess of its equity investment were $ 2.1 million as at March 31, 2018 , and are classified in Accrued and other liabilities. For the three months ended March 31, 2018 , gross revenues, cost of revenue and net loss for the Company’s investment was $ 0.5 million, $ 0.9 million and $ 0.6 million, respectively ( 2017 — $ 0.2 million , $ 0.9 million and $ 0.7 million, respectively). The Company has determined it is not the primary beneficiary of this VIE, and therefore this entity has not been consolidated. In a prior year, the Company issued a convertible loan of $1.5 million to this entity with a term of 3 years with an annual effective interest rate of 5.0%. The instrument is classified as an available-for-sale investment due to certain features that allow for conversion to common stock in the entity in the event of certain triggers occurring. In addition, the Company has an investment in preferred stock of another business venture of $ 1.5 million which meet the criteria for classification as a debt security under the FASB ASC 320 and is recorded at a fair value of $ nil at March 31, 2018 (December 31, 2017 — $ nil ). This investment was classified as an equity investment. Furthermore, the Company has an investment of $ 1.0 million (December 31, 2017 — $ 1.0 million) in the shares of an exchange traded fund. This investment is also classified as an equity investment. As at March 31, 2018 , the Company held investments with a total value of $ 3.5 million in the preferred shares of enterprises which meet the criteria for classification as an equity security under FASB ASC 325, carried at historical cost, net of impairment charges. The carrying value of these equity security investments was $ 1.0 million at March 31, 2018 (December 31, 2017 — $1.0 million). The total carrying value of investments in new business ventures at March 31, 2018 is $ 3.5 million (December 31, 2017 — $3.5 million) and is recorded in Other assets. |
Non-Controlling Interests
Non-Controlling Interests | 3 Months Ended |
Mar. 31, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Non-Controlling Interests [Text Block] | 17. Non-Controlling Interests IMAX China Non-Controlling Interest In 2015, IMAX China completed the IMAX China IPO. Following the IMAX China IPO, the Company continues to indirectly own approximately 67.93% of IMAX China, which remains a consolidated subsidiary of the Company. The following summarizes the movement of the non-controlling interest in shareholders’ equity, in the Company’s subsidiary for the three months ended March 31, 2018 : Balance as at December 31, 2017 $ 74,511 Retained earnings impact resulting from the adoption of ASC Topic 606, Revenue from Contracts with Customers 377 Net income 3,893 Other comprehensive income 658 Balance as at March 31, 2018 $ 79,439 Other Non-Controlling Interest The Company’s Original Film Fund was established in 2014 to co-finance a portfolio of 10 original large-format films. The initial investment in the Original 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 agreed to contribute $ 9.0 million to the Original Film Fund over five years starting in 2014 and sees the Original Film Fund as a self-perpetuating vehicle designed to generate a continuous, steady flow of high-quality documentary content. As at March 31, 2018 , the Original Film Fund invested $15.5 million toward the development of original films. 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. The Company also established its VR Fund among the Company, its subsidiary IMAX China and other strategic investors. The VR Fund will help finance the creation of interactive VR content experiences over the next three years for use across all VR platforms, including in the pilot IMAX VR Centers. The VR Fund recently helped finance the production of one interactive VR experience, which debuted exclusively in the pilot IMAX VR Centers in November 2017 before being made available to other VR platforms. The VR Fund continues to finance other productions of interactive VR experiences as part of its ongoing activities. As at March 31, 2018 , the Company invested $4.0 million toward the development of VR content. The following summarizes the movement of the non-controlling interest in temporary equity, in the Company’s subsidiary for the three months ended March 31, 2018 : Balance as at December 31, 2017 $ 1,353 Issuance of subsidiary shares to non-controlling interests 4,449 Net loss (331) Balance as at March 31, 2018 $ 5,471 |
Exit costs Restructuring and As
Exit costs Restructuring and Associated Impairments | 3 Months Ended |
Mar. 31, 2018 | |
Exit costs restructuring and associated impairments [Abstract] | |
Restructuring And Related Activities Disclosure [Text Block] | 18. Exit costs, restructuring charges and associated impairments In June 2017, the Company implemented a cost reduction plan with the goal of increasing profitability, operating leverage and free cash flow. The cost reduction plan included the exit from certain non-core businesses or initiatives, as well as a one-time reduction in workforce. Restructuring charges are comprised of employee severance costs including benefits and stock-based compensation, costs of consolidating facilities and contract termination costs. Restructuring charges are based upon plans that have been committed to by the Company, but may be refined in subsequent periods. These charges are recognized pursuant to FASB ASC 420. A liability for a cost associated with an exit or disposal activity is recognized and measured at its fair value in the condensed consolidated statement of operations in the period in which the liability is incurred. When estimating the value of facility restructuring activities, assumptions are applied regarding estimated sub-lease payments to be received, which can differ from actual results. In connection with the Company’s restructuring initiatives, the Company incurred $ 0.7 million in restructuring charges for the three months ended March 31, 2018 ( 2017 — $nil). A summary of the restructuring costs by reporting groups identified by nature of product sold, or service provided as disclosed in note 14 recognized during the three months ended March 31, 2018 , are as follows: Employee Severance and Benefits IMAX DMR $ 380 Corporate 200 Theater system maintenance 122 $ 702 The Company expects to recognize restructuring charges of $ 0.4 million during the remainder of 2018 . The following table sets forth a summary of restructuring accrual activities for the three months ended March 31, 2018 : Employee Severance and Benefits Balance as at December 31, 2017 $ 2,221 Restructuring charges 702 Cash payments (1,393) Balance as at March 31, 2018 $ 1,530 In the three months ended March 31, 2018 the Company did not recognize any exit costs or associated impairments. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation and Condensed Consolidated Statements of Operations Supplemental Information [Abstract] | |
Basis of Accounting | All 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 2017 Annual Report on Form 10-K for the year ended December 31, 2017 (“the 2017 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, 2017 , except as noted below. |
Variable interest entities | These condensed consolidated financial statements include the accounts of the Company together with its consolidated 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 ten film production companies that are VIEs. For five 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. The majority of these consolidated assets are held by the IMAX Original Film Fund (the “Original Film Fund”) and the IMAX Virtual Reality Fund (the “VR Fund”) as described in note 17 (b). For the other five 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. A loss in value of an investment other than a temporary decline is recognized as a charge to the condensed consolidated statements of operations |
Equity and Cost Method Investments Policy | 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. |
New Accounting Pronouncements Adopted | Adoption of New Accounting Policies The Company adopted several standards including the following material standards on January 1, 2018, which are effective for annual periods ending after December 31, 2017, and for annual and interim periods thereafter. In 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASC Topic 606”). The Company 2014-09 and several associated ASUs on January 1, 2018. See note 3 for a further discussion of the Company’s adoption of ASC Topic 606, including its 2018 operating results under the new standard. |
Accounting Pronouncements Not Yet Adopted | Recently Issued FASB Accounting Standard Codification Updates In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842)” (“ASU 2016-02”). The purpose of the amendment is to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. New disclosures will include qualitative and quantitative requirements to provide additional information about the amounts recorded in the financial statements. Lessor accounting will remain largely unchanged from current guidance; however, ASU 2016-02 will provide improvements that are intended to align lessor accounting with the lessee model and with updated revenue recognition guidance. For public entities, the amendments in ASU 2016-02 are effective for interim and annual reporting periods beginning after December 15, 2018. As a lessor, the Company has a significant portion of its revenue derived from leases, including its joint revenue sharing arrangements, and while the lessor accounting model is not fundamentally different, the Company continues to evaluate the effect of the standard on this revenue stream. In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). The purpose of ASU 2016-13 is to require a financial asset measured on the amortized cost basis to be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. For public entities, the amendments in ASU 2016-13 are effective for interim and annual reporting periods beginning after December 15, 2019. The Company is currently assessing the impact of ASU 2016-13 on its condensed consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-03, “Technical Corrections and Improvements to Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2018-03”). The purpose of ASU 2018-03 is to clarify certain aspects of the guidance issued in ASU 2016-01. For public entities, the amendments in ASU 2018-03 are effective for interim periods beginning after June 15, 2018. The Company is currently assessing the impact of ASU 2018-03 on its condensed consolidated financial statements. The Company considers the applicability and impact of all recently issued FASB accounting standard codification updates. Accounting standards updates that are not noted above were assessed and determined to be not applicable or not significant to the Company’s condensed consolidated financial statements for the period ended March 31, 2018 . |
Commitments and Contingencies Policy | 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. |
Commissions Expense Policy | 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 |
Collaborative Arrangements Policy | 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. 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 box-office receipts of the film, which in recent years has averaged approximately 12.5% outside of Greater China and a lower percentage for certain films within Greater China. The Company does not typically hold distribution rights or the copyright to these films. 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 and 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. |
Revenue Recognition Leases | The accounting policy for the Company’s joint revenue sharing arrangements is disclosed in note 3. |
Income tax policy | On December 22, 2017, the SEC issued Staff Accounting Bulletin (“SAB 118”), which provides guidance on accounting for tax effects of the Tax Act when a company does not have all the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete but it is able to determine a reasonable estimate, it must record a provisional estimate to be included in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately before the enactment of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC 740. While the Company is able to make reasonable estimates of the impact of the reduction in corporate rate and other changes in the legislation the final impact of the Tax Act may differ from these estimates, due to, among other things, changes in interpretations and assumptions, additional guidance that may be issued by the I.R.S., and actions the Company may take. |
Segment Reporting Policy | The Company’s reportable segments are organized under four primary groups identified by nature of product sold or service provided: (1) Network Business, representing variable revenue generated by box office results and which includes the reportable segment of IMAX DMR and contingent rent from the joint revenue sharing arrangements and IMAX systems segments. Effective January 1, 2018, the Company no longer includes hybrid joint revenue sharing arrangements, which take the form of a sale, in the joint revenue sharing arrangement reportable segment. These arrangements are now reflected under the IMAX systems segment of Theater Business ; (2) Theater Business, representing revenue generated by the sale and installation of theater systems and maintenance services, primarily related to the IMAX Systems and Theater System Maintenance reportable segments, and also includes hybrid (fixed and contingent) revenues and upfront installation costs from sales arrangements previously reported in the joint revenue sharing arrangements segment and after-market sales of projection system parts and 3D glasses from the other segment; (3) New Business, which includes content licensing and distribution fees associated with the Company’s original content investments, virtual reality initiatives, and other business initiatives that are in the development and/or start-up phase, and (4) Other; which includes the film post-production and distribution segments and certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items from the other segment. The Company is presenting information at a disaggregated level to provide more relevant information to readers, as permitted by the standard. On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, and all the related amendments on a prospective basis, refer to note 3 for additional information. In addition, refer to Item 2 of the Company’s Form 10-Q for additional information regarding the four primary groups mentioned above. |
Fair Value of Financial Instruments Policy | ______________ (1) Recorded at cost, which approximates fair value. (2) Estimated based on discounting future cash flows at currently available interest rates with comparable terms. (3) Value determined using quoted prices in active markets. |
Fair Value Transfer Policy | There were no significant transfers between Level 1 and Level 2 during the three months ended March 31, 2018 or 2017 . 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. |
Credit Risk Policy | 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, and 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. |
Condition for Company's policy to review and assess collectability on theater's past due accounts | 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 or 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. |
Derivatives policy | 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. In addition, because IMAX films generate box office in 77 different countries, unfavourable exchange rates between applicable local currencies, and the U.S. dollar affect the Company’s reported gross box-office and revenues, further impacting the Company’s results of operations. 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 March 31, 2018 (the “Foreign Currency Hedges”), with settlement dates throughout 2018 and 2019 . 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 statements of operations except for derivatives designated and qualifying as foreign currency cash flow hedging instruments. For foreign currency cash flow 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 statements of operations when the forecasted transaction occurs. Any ineffective portion is recognized immediately in the condensed consolidated statements of operations. The Company currently does not hold any derivatives which are not designated as hedging instruments |
ASU 2010-20 | 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. |
Costs Associated With Exit Or Disposal Activities Or Restructurings Policy | In June 2017, the Company implemented a cost reduction plan with the goal of increasing profitability, operating leverage and free cash flow. The cost reduction plan included the exit from certain non-core businesses or initiatives, as well as a one-time reduction in workforce. Restructuring charges are comprised of employee severance costs including benefits and stock-based compensation, costs of consolidating facilities and contract termination costs. Restructuring charges are based upon plans that have been committed to by the Company, but may be refined in subsequent periods. These charges are recognized pursuant to FASB ASC 420. A liability for a cost associated with an exit or disposal activity is recognized and measured at its fair value in the condensed consolidated statement of operations in the period in which the liability is incurred. When estimating the value of facility restructuring activities, assumptions are applied regarding estimated sub-lease payments to be received, which can differ from actual results. |
Revenue Recognition Policy | The following describes the Company’s updated revenue recognition policy to reflect the adoption of ASC Topic 606: Contracts with Multiple Performance Obligations The Company’s revenue arrangements with certain customers may involve performance obligations consisting of the delivery of a theater system (projector, sound system, screen system and, if applicable, 3D glasses cleaning machine); services associated with the theater system including theater design support, supervision of installation, and projectionist training; a license to use the IMAX brand; 3D glasses; maintenance and extended warranty services; and licensing of films. The Company evaluates all of the performance obligations in an arrangement to determine which are considered distinct, either individually or in a group, for accounting purposes and which of the deliverables represent separate units of accounting based on the applicable accounting guidance in the Leases Topic of the FASB ASC; the Guarantees Topic of the FASB ASC; and the Revenue Recognition Topic of the FASB. If separate units of accounting are either required under the relevant accounting standards or determined to be applicable under the Revenue Recognition Topic, the total consideration received or receivable in the arrangement is allocated based on the applicable guidance in the above noted standards. Theater Systems The Company has identified 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 to be, as a group, a distinct performance obligation, and a single unit of accounting (the “System Obligation”). When an arrangement does not include all the performance obligations of a System Obligation, the performance obligations of the System Obligation included in the arrangement are considered by the Company to be a grouped distinct performance obligation and a single unit of accounting. The Company is not responsible for the physical installation of the equipment in the customer’s facility; however, the Company supervises the installation by the customer. The customer has the right to use the IMAX brand from the date the Company and the customer enter into an arrangement. The Company’s System Obligation arrangements involve either a lease or a sale of the theater system. Consideration for the System Obligation, other than for those delivered pursuant to joint revenue sharing arrangements, consist of upfront or initial payments made before and after the final installation of the theater system equipment and ongoing payments throughout the term of the lease or over a period of time, as specified in the arrangement. The ongoing payments are the greater of an annual fixed minimum amount or a certain percentage of the theater box-office. Amounts received in excess of the annual fixed minimum amounts are considered contingent payments. The Company’s arrangements are non-cancellable, unless the Company fails to perform its obligations. In the absence of a material default by the Company, there is no right to any remedy for the customer under the Company’s arrangements. If a material default by the Company exists, the customer has the right to terminate the arrangement and seek a refund only if the customer provides notice to the Company of a material default and only if the Company does not cure the default within a specified period. Consideration is allocated to each unit of accounting based on the unit’s relative selling prices. The Company uses vender-specific objective evidence of selling price (VSOE) when the Company sells the deliverable separately and is the price actually charged by the Company for that deliverable. VSOE is established for the Company’s System Obligation, maintenance and extended warranty services and film license arrangements. The Company uses a best estimate of selling price (BESP) for units of accounting that do not have VSOE or third-party evidence of selling price. The Company determines BESP for a deliverable by considering multiple factors including the Company’s historical pricing practices, product class, market competition and geography. Sales Arrangements For arrangements qualifying as sales, the revenue allocated to the System Obligation is recognized in accordance with the Revenue Recognition Topic of the FASB ASC, when all of the following conditions signifying transfer of control have been met: (i) the projector, sound system and screen system have been installed and are in full working condition, (ii) the 3D glasses cleaning machine, if applicable, has been delivered, (iii) projectionist training has been completed and (iv) the earlier of (a) receipt of written customer acceptance certifying the completion of installation and run-in testing of the equipment and the completion of projectionist training or (b) public opening of the theater, provided there is persuasive evidence of an arrangement, the price is fixed or determinable and collectability is reasonably assured. The initial revenue recognized consists of the initial payments received and the present value of any future initial payments, fixed minimum ongoing payments and an estimate of future variable consideration (future CPI and additional payments in excess of the minimums in the case of full sale arrangements or a percentage of ongoing box office in the case of hybrid sales arrangements) that have been attributed to this unit of accounting. The Company has also agreed, on occasion, to sell equipment under lease or at the end of a lease term. Consideration agreed to for these lease buyouts is included in revenues from equipment and product sales, when persuasive evidence of an arrangement exists, the fees are fixed or determinable, collectability is reasonably assured and control of the theater system passes from the Company to the customer. Taxes assessed by governmental authorities that are both imposed on and concurrent with the specific revenue-producing transactions and collected by the Company have been excluded from the measurement of the transaction prices discussed above. Lease Arrangements The Company uses the Leases Topic of FASB ASC to evaluate whether an arrangement is a lease within the scope of the accounting standard. Transactions accounted for under the Leases Topic of FASB ASC are not within the scope of Topic 606. Arrangements not within the scope of the accounting standard are accounted for either as a sales or services arrangement, as applicable. For lease arrangements, the Company determines the classification of the lease in accordance with the Lease Topic of FASB ASC. A lease arrangement that transfers substantially all of the benefits and risks incident to ownership of the equipment is classified as a sales-type lease based on the criteria established by the accounting standard; otherwise the lease is classified as an operating lease. Prior to commencement of the lease term for the equipment, the Company may modify certain payment terms or make concessions. If these circumstances occur, the Company reassesses the classification of the lease based on the modified terms and conditions. For sales-type leases, the revenue allocated to the System Obligation is recognized when the lease term commences, which the Company deems to be when all of the following conditions have been met: (i) the projector, sound system and screen system have been installed and are in full working condition; (ii) the 3D glasses cleaning machine, if applicable, has been delivered; (iii) projectionist training has been completed; and (iv) the earlier of (a) receipt of the written customer acceptance certifying the completion of installation and run-in testing of the equipment and the completion of projectionist training or (b) public opening of the theater, provided collectability is reasonably assured. The initial revenue recognized for sales-type leases consists of the initial payments received and the present value of future initial payments and fixed minimum ongoing payments computed at the interest rate implicit in the lease. Contingent payments in excess of the fixed minimum payments are recognized when reported by theater operators, provided collectability is reasonably assured. For operating leases, initial payments and fixed minimum ongoing payments are recognized as revenue on a straight-line basis over the lease term. For operating leases, the lease term is considered to commence when all of the following conditions have been met: (i) the projector, sound system and screen system have been installed and in full working condition; (ii) the 3D glasses cleaning machine, if applicable, has been delivered; (iii) projectionist training has been completed; and (iv) the earlier of (a) receipt of written customer acceptance certifying the completion of installation and run-in testing of the equipment and the completion of projectionist training or (b) public opening of the theater. Contingent payments in excess of fixed minimum ongoing payments are recognized as revenue when reported by theater operators, provided collectability is reasonably assured. Revenues from joint revenue sharing arrangements with upfront payments that qualify for classification as sales-type leases are recognized in accordance with the sales and sales-type lease criteria discussed above. Contingent revenues from joint revenue sharing arrangements are recognized as box-office results and concessions revenues are reported by the theater operator, provided collectability is reasonably assured. Finance Income Finance income is recognized over the term of the sales-type lease or financed sales receivable, provided collectability is reasonably assured. Finance income recognition ceases when the Company determines that the associated receivable is not collectible. Finance income is suspended when the Company identifies a theater that is delinquent, non-responsive or not negotiating in good faith with the Company. Once the collectability issues are resolved the Company will resume recognition of finance income. Improvements and Modifications Improvements and modifications to the theater system after installation are treated as separate revenue transactions, if and when the Company is requested to perform these services. Revenue is recognized for these services when the performance of the services has been completed, provided there is persuasive evidence of an arrangement, the fee is fixed or determinable and collectability is reasonably assured. Cost of Equipment and Product Sale s Theater systems and other equipment subject to sales-type leases and sales arrangements includes the cost of the equipment and costs related to project management, design, delivery and installation supervision services as applicable. The costs related to theater systems under sales and sales-type lease arrangements are relieved from inventory to costs and expenses applicable to revenues-equipment and product sales when revenue recognition criteria are met. In addition, the Company defers direct selling costs such as sales commissions and other amounts related to these contracts until the related revenue is recognized. The Company may have warranty obligations at or after the time revenue is recognized which require replacement of certain parts that do not affect the functionality of the theater system or services. The costs for warranty obligations for known issues are accrued as charges to costs and expenses applicable to revenues-equipment and product sales at the time revenue is recognized based on the Company’s past historical experience and cost estimates. Cos t of Rentals For theater systems and other equipment subject to an operating lease or placed in a theater operators’ venue under a joint revenue sharing arrangement, the cost of equipment and those costs that result directly from and are essential to the arrangement, is included within property, plant and equipment. Depreciation and impairment losses, if any, are included in cost of rentals based on the accounting policy set out in note 2(g) of the Company’s Form 10-K. Under the new standard, commissions continue to be deferred and recognized as costs and expenses applicable to revenues-rentals in the month they are earned, which is typically the month of installation. Terminations, Consensual Buyouts and Concessions The Company enters into theater system arrangements with customers that contain customer payment obligations prior to the scheduled installation of the theater system. During the period of time between signing and the installation of the theater system, which may extend several years, certain customers may be unable to, or may elect not to, proceed with the theater system installation for a number of reasons including business considerations, or the inability to obtain certain consents, approvals or financing. Once the determination is made that the customer will not proceed with installation, the arrangement may be terminated under the default provisions of the arrangement or by mutual agreement between the Company and the customer (a “consensual buyout”). Terminations by default are situations when a customer does not meet the payment obligations under an arrangement and the Company retains the amounts paid by the customer. Under a consensual buyout, the Company and the customer agree, in writing, to a settlement and to release each other of any further obligations under the arrangement or an arbitrated settlement is reached. Any initial payments retained or additional payments received by the Company are recognized as revenue when the settlement arrangements are executed and the cash is received, respectively. These termination and consensual buyout amounts are recognized in Other revenues. In addition, the Company could agree with customers to convert their obligations for other theater system configurations that have not yet been installed to arrangements to acquire or lease the IMAX digital theater system. The Company considers these situations to be a termination of the previous arrangement and origination of a new arrangement for the IMAX digital theater system. For all arrangements entered into or modified prior to the date of adoption of the amended FASB ASC 605-25, the Company continues to defer an amount of any initial fees received from the customer such that the aggregate of the fees deferred and the net present value of the future fixed initial and ongoing payments to be received from the customer equals the selling price of the IMAX digital theater system to be leased or acquired by the customer. Any residual portion of the initial fees received from the customer for the terminated theater system is recorded in other revenues at the time when the obligation for the original theater system is terminated and the new theater system arrangement is signed. Under the amended FASB ASC 605-25, for all arrangements entered into or materially modified after the date of adoption, the total arrangement consideration to be received is allocated on a relative selling price basis to the digital upgrade and the termination of the previous theater system. The arrangement consideration allocated to the termination of the existing arrangement is recorded in Other revenues at the time when the obligation for the original theater system is terminated and the new theater system arrangement is signed. The Company may offer certain incentives to customers to complete theater system transactions including payment concessions or free services and products such as film licenses or 3D glasses. Reductions in, and deferral of, payments are taken into account in determining the sales price either by a direct reduction in the sales price or a reduction of payments to be discounted in accordance with the Leases or Interests Topic of the FASB ASC. Free products and services are accounted for as separate units of accounting. Other consideration given by the Company to customers are accounted for in accordance with the Revenue Recognition Topic of the FASB ASC. Maintenance and Extended Warranty Services Maintenance and extended warranty services may be provided under a multiple element arrangement or as a separately priced contract. Revenues related to these services are deferred and recognized on a straight-line basis over the contract period and are recognized in Services revenues. Maintenance and extended warranty services includes maintenance of the customer’s equipment and replacement parts. Under certain maintenance arrangements, maintenance services may include additional training services to the customer’s technicians. All costs associated with this maintenance and extended warranty program are expensed as incurred. A loss on maintenance and extended warranty services is recognized if the expected cost of providing the services under the contracts exceeds the related deferred revenue. As the maintenance services are a stand ready obligation with the cost of providing the service expected to increase throughout the term, revenue is recognized over the term of the arrangement such that increased amounts are recognized in later periods. Film Production and IMAX DMR Services In certain film arrangements, the Company produces a film financed by third parties whereby the third party retains the copyright and the Company obtains exclusive distribution rights. Under these arrangements, the Company is entitled to receive a fixed fee or to retain as a fee the excess of funding over cost of production (the “production fee”). The third parties receive a portion of the revenues received by the Company from distributing the film, which is charged to costs and expenses applicable to revenues-services. The production fees are deferred, and recognized as a reduction in the cost of the film based on the ratio of the Company’s distribution revenues recognized in the current period to the ultimate distribution revenues expected from the film. Film exploitation costs, including advertising and marketing are recorded in costs and expenses applicable to revenues-services as incurred. Revenue from film production services where the Company does not hold the associated distribution rights are recognized in Services revenues when performance of the contractual service is complete, provided there is persuasive evidence of an agreement, the fee is fixed or determinable and collectability is reasonably assured. Revenues from digitally re-mastering (IMAX DMR) films where third parties own or hold the copyrights and the rights to distribute the film are derived in the form of processing fees for the application of the Company’s patented processes calculated as a percentage of box-office receipts generated from the re-mastered films. Since these fees are subject to the sales-based royalty exception, they are recognized as Services revenues when box-office receipts are reported by the third party that owns or holds the related film rights, provided collectability is reasonably assured. Losses on film production and IMAX DMR services are recognized as costs and expenses applicable to revenues-services in the period when it is determined that the Company’s estimate of total revenues to be realized by the Company will not exceed estimated total production costs to be expended on the film production and the cost of IMAX DMR services. Film Distribution Revenue from the flat-fee licensing of films whose distribution rights are owned by the Company is recognized in Services revenues when persuasive evidence of a licensing arrangement exists, the film has been completed and delivered, the license period has begun, the fee is fixed or determinable and collectability is reasonably assured. When license fees are based on a percentage of box-office receipts, the revenue is subject to the sales-based royalty exception and is recognized when box-office receipts are reported by exhibitors, provided collectability is reasonably assured. Film exploitation costs, including advertising and marketing, are recorded in costs and expenses applicable to revenues-services as incurred. Film Post-Production Services Revenues from post-production film services are recognized in Services revenues when performance of the contracted services is complete provided there is persuasive evidence of an arrangement, the fee is fixed or determinable and collectability is reasonably assured. Other The Company recognizes revenue in Services revenues from its owned and operated theaters resulting from box-office ticket and concession sales as tickets are sold, films are shown and upon the sale of various concessions. The sales are cash or credit card transactions with theater goers based on fixed prices per seat or per concession item. In addition, the Company enters into commercial arrangements with third party theater owners resulting in the sharing of profits and losses which are recognized in Services revenues when reported by such theaters. The Company also provides management services to certain theaters and recognizes revenue over the term of such services. Revenues on camera rentals are recognized in Rental revenues over the rental period. Revenue from the sale of 3D glasses is recognized in Equipment and product sales revenue when the 3D glasses have been delivered to the customer. Other service revenues are recognized in Service revenues when the performance of contracted services is complete. |
Basis of presentation (Tables)
Basis of presentation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation and Condensed Consolidated Statements of Operations Supplemental Information [Abstract] | |
VIEs Total assets and liabilities | Total assets and liabilities of the Company’s consolidated VIEs are as follows: March 31, December 31, 2018 2017 Total assets $ 11,357 $ 7,539 Total liabilities $ 11,445 $ 7,178 Total assets and liabilities of the VIE entities which the Company does not consolidate are as follows: March 31, December 31, 2018 2017 Total assets $ 448 $ 448 Total liabilities $ 380 $ 388 |
Adoption of ASC Topic 606, Re28
Adoption of ASC Topic 606, Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contracts with Customers [Abstract] | |
Impacts of Adoption of Standard Related to Revenue Recognition | The following table presents the impacted financial statement line items in the Company’s condensed consolidated statement of operations for the three months ended March 31, 2018: Pre-adoption of ASC Topic 606 As (in thousands of U.S. dollars, except per share amounts) ASC Topic 606 Adjustments reported Revenues $ 84,315 $ 669 $ 84,984 Provision for income taxes (4,306) (147) (4,453) Net income (loss) 11,545 522 12,067 Less: net (income) loss attributable to non-controlling interests (3,494) (68) (3,562) Net income attributable to common shareholders 8,051 454 8,505 Net income per share attributable to common shareholders - basic and diluted 0.13 - 0.13 The following table presents the impact from the adoption of ASC Topic 606 on the Company’s assets and liabilities in the condensed consolidated balance sheet: Balance at Balance at December 31, ASC Topic 606 January 1, 2017 Adjustments 2018 Assets Other Assets $ 26,757 $ 34,384 $ 61,141 Deferred income taxes 30,708 (6,436) 24,272 Shareholders' equity Accumulated deficit (87,592) 27,571 (60,021) Non-controlling interests 74,511 377 74,888 |
Impacts of Adoption of Standard Related to Revenue Recognition by Segment | The following table presents the impact of ASC Topic 606 on the Company’s revenues for the three months ended March 31, 2018, by reportable segment: Pre-adoption of ASC Topic 606 As ASC Topic 606 Adjustments reported Network business IMAX DMR $ 27,051 $ - $ 27,051 Joint revenue sharing arrangements – contingent rent (1) 18,529 (668) 17,861 IMAX systems – contingent rent (1) 852 (852) - 46,432 (1,520) 44,912 Theater business IMAX systems Sales and sales-type leases (2) 14,911 3,227 18,138 Ongoing fees and finance income (3) 2,603 127 2,730 Joint revenue sharing arrangements – fixed fees (4) 1,165 (1,165) - Theater system maintenance 12,712 - 12,712 Other theater 1,377 - 1,377 32,768 2,189 34,957 New business 608 - 608 Other Film post-production 3,163 - 3,163 Film distribution 571 - 571 Other 773 - 773 4,507 - 4,507 Total $ 84,315 $ 669 $ 84,984 Upon adoption of ASC Topic 606 the Company has evaluated its revenue streams by reportable segment and scoped out lease arrangements in accordance with the standard. The following table presents a breakdown of the Company’s revenues for the three months ended March 31, 2018, whereby fixed and variable consideration are subject to the new standard: Subject to the New Revenue Recognition Standard Subject to the Lease Standard Fixed consideration Variable consideration Lease arrangements Total Network business IMAX DMR $ - $ 27,051 $ - $ 27,051 Joint revenue sharing arrangements – contingent rent - - 17,861 17,861 IMAX systems – contingent rent - - - - - 27,051 17,861 44,912 Theater business IMAX systems Sales and sales-type leases 15,949 2,189 - 18,138 Ongoing fees and finance income 2,730 - - 2,730 Joint revenue sharing arrangements – fixed fees - - - - Theater system maintenance 12,712 - - 12,712 Other theater 1,377 - - 1,377 32,768 2,189 - 34,957 New business - 608 - 608 Other Film post-production 3,163 - - 3,163 Film distribution - 571 - 571 Other 50 723 - 773 50 1,294 - 1,344 Total $ 32,818 $ 31,142 $ 17,861 $ 81,821 |
Financing Receivables (Tables)
Financing Receivables (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financing Receivables [Abstract] | |
Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales | March 31, December 31, 2018 2017 Gross minimum lease payments receivable $ 8,447 $ 8,537 Unearned finance income (1,110) (1,147) Minimum lease payments receivable 7,337 7,390 Accumulated allowance for uncollectible amounts (155) (155) Net investment in leases 7,182 7,235 Gross financed sales receivables 162,532 162,522 Unearned finance income (39,018) (39,341) Financed sales receivables 123,514 123,181 Accumulated allowance for uncollectible amounts (922) (922) Net financed sales receivables 122,592 122,259 Total financing receivables $ 129,774 $ 129,494 Net financed sales receivables due within one year $ 25,539 $ 25,455 Net financed sales receivables due after one year $ 97,053 $ 96,804 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventories [Abstract] | |
Inventories | March 31, December 31, 2018 2017 Raw materials $ 23,421 $ 21,206 Work-in-process 3,896 2,601 Finished goods 1,779 6,981 $ 29,096 $ 30,788 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | As at March 31, 2018 Accumulated Net Book Cost Depreciation Value Equipment leased or held for use Theater system components $ 268,940 $ 109,948 $ 158,992 Camera equipment 5,757 4,079 1,678 274,697 114,027 160,670 Assets under construction 25,187 - 25,187 Other property, plant and equipment Land 8,203 - 8,203 Buildings 74,859 18,005 56,854 Office and production equipment 44,556 23,604 20,952 Leasehold improvements 11,064 3,952 7,112 138,682 45,561 93,121 $ 438,566 $ 159,588 $ 278,978 As at December 31, 2017 Accumulated Net Book Cost Depreciation Value Equipment leased or held for use Theater system components $ 264,259 $ 103,922 $ 160,337 Camera equipment 5,757 3,939 1,818 270,016 107,861 162,155 Assets under construction 23,398 - 23,398 Other property, plant and equipment Land 8,203 - 8,203 Buildings 74,478 17,364 57,114 Office and production equipment 40,442 22,164 18,278 Leasehold improvements 10,974 3,341 7,633 134,097 42,869 91,228 $ 427,511 $ 150,730 $ 276,781 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Intangible Assets [Abstract] | |
Other Intangible Assets | As at March 31, 2018 Accumulated Net Book Cost Amortization Value Patents and trademarks $ 12,391 $ 7,914 $ 4,477 Licenses and intellectual property 21,168 7,822 13,346 Other 19,885 7,175 12,710 $ 53,444 $ 22,911 $ 30,533 As at December 31, 2017 Accumulated Net Book Cost Amortization Value Patents and trademarks $ 12,184 $ 7,710 $ 4,474 Licenses and intellectual property 21,471 7,800 13,671 Other 19,529 6,463 13,066 $ 53,184 $ 21,973 $ 31,211 |
Other Intangible Assets - Future Amortization | As at March 31, 2018 , estimated amortization expense for each of the years ended December 31, are as follows: 2018 (nine months remaining) $ 3,653 2019 4,871 2020 4,871 2021 4,871 2022 4,871 |
Credit Facility and Playa Vis33
Credit Facility and Playa Vista Loan (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Credit Facility and Playa Vista Loan [Abstract] | |
Bank indebtedness | Bank indebtedness includes the following: March 31, December 31, 2018 2017 Playa Vista Loan $ 25,167 $ 25,667 Deferred charges on debt financing (300) (310) $ 24,867 $ 25,357 |
Construction loan principal payments | In accordance with the loan agreement, the Company is obligated to make payments on the principal of the loan as follows: 2018 (nine months remaining) $ 1,500 2019 2,000 2020 2,000 2021 2,000 2022 2,000 Thereafter 15,667 $ 25,167 |
Condensed Consolidated Statem34
Condensed Consolidated Statements of Cash Flows Supplemental Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Changes in other non-cash operating assets and liabilities | Three Months Ended March 31, 2018 2017 Decrease (increase) in: Accounts receivable $ 10,314 $ 161 Financing receivables (420) 1,763 Inventories 1,692 (3,312) Prepaid expenses (2,616) (1,421) Other assets (2,346) (224) Increase (decrease) in: Accounts payable (10,419) (6,041) Accrued and other liabilities (4,862) (18,825) Deferred revenue (1,161) 10,619 $ (9,818) $ (17,280) |
Cash payments | Cash payments made on account of: Three Months Ended March 31, 2018 2017 Income taxes $ 4,765 $ 7,270 Interest $ 226 $ 190 |
Summary of depreciation and amortization | Three Months Ended March 31, 2018 2017 Film assets $ 3,571 $ 3,805 Property, plant and equipment Joint revenue sharing arrangements 4,840 4,246 Other property, plant and equipment 3,442 2,760 Other intangible assets 1,217 926 Other assets 310 220 Deferred financing costs 141 131 $ 13,521 $ 12,088 |
Write downs, net of recoveries | Three Months Ended March 31, 2018 2017 Accounts receivable $ 451 $ 185 Inventories - - Financing receivables - - Property, plant and equipment (2) 421 409 Joint revenue sharing arrangements (2) 126 - Other intangible assets 38 - Film assets (1) - 3,416 Other assets - - $ 1,036 $ 4,010 |
Other Significant Non cash Transactions | Three Months Ended March 31, 2018 2017 Net accruals related to: Purchases of property, plant and equipment $ 364 $ 1,384 Investment in joint revenue sharing arrangements (20) (55) Acquisition of other intangible assets 5 (25) $ 349 $ 1,304 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes [Abstract] | |
Income tax effect related to other comprehensive loss | Three Months Ended March 31, 2018 2017 Unrealized change in cash flow hedging instruments $ 263 $ (82) Realized change in cash flow hedging instruments upon settlement 58 (75) $ 321 $ (157) |
Capital Stock (Tables)
Capital Stock (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Capital Stock [Abstract] | |
Stock compensation | Three Months Ended March 31, 2018 2017 Cost and expenses applicable to revenues $ 96 $ - Selling, general and administrative expenses 4,417 5,264 Research and development 334 - Exit costs, restructuring charges and associated impairments (19) - $ 4,828 $ 5,264 |
Stock-based compensation by plan type | The following reflects a breakdown of the Company’s stock-based compensation expense by each plan type: Three Months Ended March 31, 2018 2017 Stock options $ 1,389 $ 1,354 Restricted Share Units 3,215 3,446 China Long Term Incentive Plan Restricted Share Units 183 108 China Options 41 250 China Cash Settled Share-Based Payments - 106 $ 4,828 $ 5,264 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following table summarizes certain information in respect of option activity under the SOP and IMAX Long Term Incentive Plan for the three months ended March 31 : Weighted Average Exercise Number of Shares Price Per Share 2018 2017 2018 2017 Options outstanding, beginning of period 5,082,100 5,190,542 $ 29.31 $ 28.35 Granted 878,629 679,030 22.06 32.16 Exercised - (584,589) - 22.38 Forfeited (45,164) (16,380) 31.13 31.69 Expired (10,000) - 27.09 - Options outstanding, end of period 5,905,565 5,268,603 28.22 29.49 Options exercisable, end of period 4,133,351 3,945,034 29.14 28.68 |
Restricted Stock Units activity under the IMAX LTIP | The following table summarizes certain information in respect of RSU activity under the IMAX Long Term Incentive Plan for the three months ended March 31: Number of Awards Weighted Average Grant Date Fair Value Per Share 2018 2017 2018 2017 RSUs outstanding, beginning of period 995,329 1,124,180 $ 32.80 $ 33.01 Granted 535,362 373,540 20.85 32.45 Vested and settled (257,888) (201,793) 32.76 31.25 Forfeited (30,024) (20,506) 31.93 32.31 RSUs outstanding, end of period 1,242,779 1,275,421 27.58 33.13 |
Basic and diluted per-share computations | Reconciliations of the numerator and denominator of the basic and diluted per-share computations are comprised of the following: Three Months Ended March 31, 2018 2017 Net income applicable to common shareholders $ 8,505 $ 75 Weighted average number of common shares (000's): Issued and outstanding, beginning of period 64,696 66,160 Weighted average number of shares repurchased, net of shares issued, during the period (141) 203 Weighted average number of shares used in computing basic income per share 64,555 66,363 Assumed exercise of stock options and RSUs, net of shares assumed repurchased 64 817 Weighted average number of shares used in computing diluted income per share 64,619 67,180 |
Movement of Shareholders' Equity | The following summarizes the movement of Shareholders’ Equity attributable to common shareholders for the three months ended March 31, 2018 : Balance as at December 31, 2017 $ 527,746 Adjustments to capital stock: Average carrying value of repurchased and retired common shares (4,494) Share held in treasury (859) Adjustments to other equity: Employee stock options granted 1,429 RSUs granted 3,398 RSUs vested (6,261) Adjustments to accumulated deficit: Net income attributable to common shareholders 8,505 Adoption of ASC Topic 606, Revenue from Contracts with Customers 27,571 Common shares repurchased and retired (8,902) Adjustments to accumulated other comprehensive loss: Unrealized net loss from cash flow hedging instruments (1,007) Realization of cash flow hedging net gain upon settlement (220) Foreign currency translation adjustments 1,394 Tax effect of movement in other comprehensive income 321 Balance as at March 31, 2018 $ 548,621 |
Segmented Information (Tables)
Segmented Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segmented Information [Abstract] | |
Inter-segment revenue | Three Months Ended March 31, 2018 2017 Revenue (1) Network business IMAX DMR $ 27,051 $ 23,408 Joint revenue sharing arrangements – contingent rent (2) 17,861 15,233 IMAX systems – contingent rent (2) - 688 44,912 39,329 Theater business IMAX systems (2) 20,868 9,527 Joint revenue sharing arrangements – fixed fees (2) - 470 Theater system maintenance 12,712 11,045 Other theater 1,377 2,165 34,957 23,207 New business 608 1,280 Other Film post-production 3,163 3,072 Film distribution 571 512 Other 773 1,257 4,507 4,841 Total $ 84,984 $ 68,657 Gross Margin Network business IMAX DMR (3) $ 18,782 $ 17,467 Joint revenue sharing arrangements – contingent rent (2)(3) 12,740 10,250 IMAX systems – contingent rent (2) - 688 31,522 28,405 Theater business IMAX systems (2)(3) 14,292 5,741 Joint revenue sharing arrangements – fixed fees (2)(3) - 88 Theater system maintenance 6,205 4,249 Other theater (45) 430 20,452 10,508 New business (1,469) (337) Other Film post-production 1,685 1,101 Film distribution (3) (1,239) (3,764) Other (259) (142) 187 (2,805) Total $ 50,692 $ 35,771 |
Geographic Information | Three Months Ended March 31, 2018 2017 Revenue Greater China $ 28,146 $ 18,590 United States 27,632 25,198 Western Europe 10,262 5,813 Asia (excluding Greater China) 9,230 8,429 Canada 2,566 3,282 Latin America 1,479 1,654 Russia & the CIS 1,990 3,183 Rest of the World 3,679 2,508 Total $ 84,984 $ 68,657 |
Employees Pension and Postret38
Employees Pension and Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
SERP Benefits [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Amounts accrued | March 31, December 31, 2018 2017 Projected benefit obligation: Obligation, beginning of period $ 19,003 $ 19,580 Interest cost 105 427 Actuarial gain - (1,004) Obligation, end of period and unfunded status $ 19,108 $ 19,003 |
Pension Expense | Three Months Ended March 31, 2018 2017 Interest cost $ 105 $ 107 Pension expense $ 105 $ 107 |
Schedule of expected benefit payments | 2018 (nine months remaining) $ - 2019 - 2020 20,076 2021 - 2022 - Thereafter - $ 20,076 |
Postretirement Benefits Executives [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of expected benefit payments | 2018 (nine months remaining) $ 24 2019 26 2020 33 2021 37 2022 40 Thereafter 544 Total $ 704 |
Postretirement Benefits Canadian Employees [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of expected benefit payments | 2018 (nine months remaining) $ 91 2019 109 2020 86 2021 111 2022 99 Thereafter 1,169 Total $ 1,665 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | 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 March 31, 2018 As at December 31, 2017 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Level 1 Cash and cash equivalents (1) $ 145,579 $ 145,579 $ 158,725 $ 158,725 Level 2 Net financed sales receivable (2) $ 122,592 $ 122,828 $ 122,259 $ 122,918 Net investment in sales-type leases (2) 7,182 7,306 7,235 7,409 Convertible loan receivable (2) 1,500 1,500 1,500 1,500 Equity securities (3) 2,012 2,012 2,016 2,016 Foreign exchange contracts — designated forwards (3) 198 198 1,425 1,425 Borrowings under the Playa Vista Loan (1) (25,167) (25,167) (25,667) (25,667) |
Recorded Investment in Financing Receivables | The following table discloses the recorded investment in financing receivables by credit quality indicator: As at March 31, 2018 As at December 31, 2017 Minimum Financed Minimum Financed Lease Sales Lease Sales Payments Receivables Total Payments Receivables Total In good standing $ 6,176 $ 119,081 $ 125,257 $ 6,265 $ 118,060 $ 124,325 Credit Watch 580 2,830 3,410 568 2,926 3,494 Pre-approved transactions 581 548 1,129 557 1,003 1,560 Transactions suspended - 1,055 1,055 - 1,192 1,192 $ 7,337 $ 123,514 $ 130,851 $ 7,390 $ 123,181 $ 130,571 |
Investment In Financing Receivables On Nonaccrual Status | The Company’s investment in financing receivables on nonaccrual status is as follows: As at March 31, 2018 As at December 31, 2017 Recorded Related Recorded Related Investment Allowance Investment Allowance Net investment in leases $ - $ - $ - $ - Net financed sales receivables 1,055 (922) 1,192 (922) Total $ 1,055 $ (922) $ 1,192 $ (922) |
Aging of Financing Receivables | The Company’s aged financing receivables are as follows: As at March 31, 2018 Related Recorded Accrued Billed Unbilled Total Investment and 30-89 Days Financing Recorded Recorded Related Net of Current 90+ Days Receivables Investment Investment Allowances Allowances Net investment in leases $ 110 $ 59 $ 511 $ 680 $ 6,657 $ 7,337 $ (155) $ 7,182 Net financed sales receivables 2,518 2,322 3,292 8,132 115,382 123,514 (922) 122,592 Total $ 2,628 $ 2,381 $ 3,803 $ 8,812 $ 122,039 $ 130,851 $ (1,077) $ 129,774 As at December 31, 2017 Related Recorded Accrued Billed Unbilled Total Investment and 30-89 Days Financing Recorded Recorded Related Net of Current 90+ Days Receivables Investment Investment Allowances Allowances Net investment in leases $ 103 $ 74 $ 376 $ 553 $ 6,837 $ 7,390 $ (155) $ 7,235 Net financed sales receivables 3,285 1,399 3,763 8,447 114,734 123,181 (922) 122,259 Total $ 3,388 $ 1,473 $ 4,139 $ 9,000 $ 121,571 $ 130,571 $ (1,077) $ 129,494 |
Financing receivables continues to accrue finance income | The Company’s recorded investment in past due financing receivables for which the Company continues to accrue finance income is as follows: As at March 31, 2018 Related Recorded Accrued Billed Unbilled Investment and 30-89 Days Financing Recorded Related Past Due Current 90+ Days Receivables Investment Allowance and Accruing Net investment in leases $ 85 $ 59 $ 511 $ 655 $ 2,137 $ - $ 2,792 Net financed sales receivables 645 1,020 3,066 4,731 25,693 - 30,424 Total $ 730 $ 1,079 $ 3,577 $ 5,386 $ 27,830 $ - $ 33,216 As at December 31, 2017 Related Recorded Accrued Billed Unbilled Investment and 30-89 Days Financing Recorded Related Past Due Current 90+ Days Receivables Investment Allowance and Accruing Net investment in leases $ 68 $ 70 $ 376 $ 514 $ 2,287 $ - $ 2,801 Net financed sales receivables 1,165 743 3,363 5,271 27,430 - 32,701 Total $ 1,233 $ 813 $ 3,739 $ 5,785 $ 29,717 $ - $ 35,502 |
Impaired financing receivables | The following table discloses information regarding the Company’s impaired financing receivables: For the Three Months Ended March 31, 2018 Average Interest Recorded Unpaid Related Recorded Income Investment Principal Allowance Investment Recognized With an allowance recorded: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables 1,050 5 (922) 1,050 - With no related allowance recorded: Net investment in leases - - - - - Net financed sales receivables - - - - - Total: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables $ 1,050 $ 5 $ (922) $ 1,050 $ - For the Three Months Ended March 31, 2017 Average Interest Recorded Unpaid Related Recorded Income Investment Principal Allowance Investment Recognized With an allowance recorded: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables 525 75 (494) 525 - With no related allowance recorded: Net investment in leases - - - - - Net financed sales receivables - - - - - Total: Net investment in leases $ - $ - $ - $ - $ - Net financed sales receivables $ 525 $ 75 $ (494) $ 525 $ - |
Allowance for credit losses and investment in financing receivables | The Company’s activity in the allowance for credit losses for the period and the Company’s recorded investment in financing receivables are as follows: Three Months Ended March 31, 2018 Three Months Ended March 31, 2017 Net Investment Net Financed Net Investment Net Financed in Leases Sales Receivables in Leases Sales Receivables Allowance for credit losses: Beginning balance $ 155 $ 922 $ 672 $ 494 Charge-offs - - - - Recoveries - - - - Provision - - - - Ending balance $ 155 $ 922 $ 672 $ 494 Ending balance: individually evaluated for impairment $ 155 $ 922 $ 672 $ 494 Financing receivables: Ending balance: individually evaluated for impairment $ 7,337 $ 123,514 $ 8,480 $ 113,176 |
Notional amount of derivative | Notional value of foreign exchange contracts: March 31, December 31, 2018 2017 Derivatives designated as hedging instruments: Foreign exchange contracts — Forwards $ 34,962 $ 35,170 |
Fair value of foreign exchange contracts | Fair value of derivatives in foreign exchange contracts: March 31, December 31, Balance Sheet Location 2018 2017 Derivatives designated as hedging instruments: Foreign exchange contracts — Forwards Other assets $ 497 $ 1,447 Accrued and other liabilities (299) (22) $ 198 $ 1,425 |
Derivatives in Foreign Currency Hedging relationships | Three Months Ended March 31, 2018 2017 Foreign exchange contracts — Forwards Derivative (Loss) Gain Recognized in OCI (Effective Portion) $ (1,007) $ 313 Location of Derivative Gain Three Months Ended (Loss) Reclassified from AOCI March 31, into Income (Effective Portion) 2018 2017 Foreign exchange contracts — Forwards Selling, general and administrative expenses $ 220 $ (285) Three Months Ended March 31, 2018 2017 Foreign exchange contracts - Forwards Derivative Gain (Loss) Recognized In and Out of OCI (Effective Portion) $ 46 $ (47) |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
IMAX China Noncontrolling Interest | |
Non-controlling Interests | |
Non-controlling Interests | Balance as at December 31, 2017 $ 74,511 Retained earnings impact resulting from the adoption of ASC Topic 606, Revenue from Contracts with Customers 377 Net income 3,893 Other comprehensive income 658 Balance as at March 31, 2018 $ 79,439 |
Other Noncontrolling Interest [Member] | |
Non-controlling Interests | |
Non-controlling Interests | Balance as at December 31, 2017 $ 1,353 Issuance of subsidiary shares to non-controlling interests 4,449 Net loss (331) Balance as at March 31, 2018 $ 5,471 |
Exit costs Restructuring and 41
Exit costs Restructuring and Associated Impairments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Exit costs restructuring and associated impairments [Abstract] | |
Restructuring and related costs [Table Text Block] | A summary of the restructuring costs by reporting groups identified by nature of product sold, or service provided as disclosed in note 14 recognized during the three months ended March 31, 2018 , are as follows: Employee Severance and Benefits IMAX DMR $ 380 Corporate 200 Theater system maintenance 122 $ 702 |
Restructuring and accrual activities [Table Text Block] | The following table sets forth a summary of restructuring accrual activities for the three months ended March 31, 2018 : Employee Severance and Benefits Balance as at December 31, 2017 $ 2,221 Restructuring charges 702 Cash payments (1,393) Balance as at March 31, 2018 $ 1,530 |
Basis of presentation (Table 1)
Basis of presentation (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Basis of Presentation and Condensed Consolidated Statements of Operations Supplemental Information [Abstract] | ||
Variable Interest Entity, Consolidated, Carrying Amount, Assets | $ 11,357 | $ 7,539 |
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | 11,445 | 7,178 |
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets | 448 | 448 |
Variable Interest Entity, Nonconsolidated, Carrying Amount, Liabilities | $ 380 | $ 388 |
Basis of Presentation (Narrativ
Basis of Presentation (Narratives) (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Basis of Presentation (Textuals) [Abstract] | |
Number Of Variable Interest Entities | ten |
Number Of Variable Interest Entities Primary Beneficiary | five |
Number Of Variable Interest Entities Not A Primary Beneficiary | five |
New Accounting Standards And 44
New Accounting Standards And Accounting Changes (Narratives) (Details) $ in Thousands | Jan. 01, 2017USD ($) |
New Accounting Pronouncements and Changes in Accounting Principles | |
Impact on accumulated deficit due to adoption of ASU 2016-16 | $ 8,314 |
Impact on other assets due to adoption of ASU 2016-16 | 14,800 |
Impact on deferred taxes due to adoption of ASU 2016-16 | 7,900 |
Impact on accrued and other liabilities due to adoption of ASU 2016-16 | $ 1,400 |
Adoption of ASC Topic 606 Reven
Adoption of ASC Topic 606 Revenue from Contracts with Customers (Table 1) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenues | $ 84,984 | $ 68,657 |
Provision for income taxes | (4,453) | (114) |
Net income (loss) | 12,067 | (887) |
Less: net (income) loss attributable to non-controlling interests | (3,562) | 962 |
Net income attributable to common shareholders | $ 8,505 | $ 75 |
Net income per share attributable to common shareholder - basic | $ 0.13 | $ 0 |
Net income per share attributable to common shareholders - diluted | $ 0.13 | $ 0 |
Pre-adoption of ASC Topic 606 [Member] | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenues | $ 84,315 | |
Provision for income taxes | (4,306) | |
Net income (loss) | 11,545 | |
Less: net (income) loss attributable to non-controlling interests | (3,494) | |
Net income attributable to common shareholders | $ 8,051 | |
Net income per share attributable to common shareholder - basic | $ 0.13 | |
Net income per share attributable to common shareholders - diluted | $ 0.13 | |
ASC Topic 606 Adjustments | ||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenues | $ 669 | |
Provision for income taxes | (147) | |
Net income (loss) | 522 | |
Less: net (income) loss attributable to non-controlling interests | (68) | |
Net income attributable to common shareholders | $ 454 | |
Net income per share attributable to common shareholder - basic | $ 0 | |
Net income per share attributable to common shareholders - diluted | $ 0 |
Adoption of ASC Topic 606 Rev46
Adoption of ASC Topic 606 Revenue from Contracts with Customers (Table 2) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | ||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | $ 84,984 | $ 68,657 | |||
Network Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 44,912 | 39,329 | ||
IMAX DMR [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 27,051 | 23,408 | [1] | ||
Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1],[3] | 17,861 | [2] | 15,233 | |
IMAX systems - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1],[3] | 0 | [2] | 688 | |
Theater Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 34,957 | 23,207 | ||
Sales and sales-type leases [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [4] | 18,138 | |||
Ongoing fees and finance income [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [5] | 2,730 | |||
Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1],[3] | 0 | [6] | 470 | |
Theater system maintenance [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 12,712 | 11,045 | ||
Other theater [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 1,377 | 2,165 | ||
New Business [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 608 | 1,280 | ||
Other Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 4,507 | 4,841 | ||
Film post-production [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 3,163 | 3,072 | ||
Film distribution [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 571 | 512 | ||
Other [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 773 | $ 1,257 | ||
Pre-adoption of ASC Topic 606 [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 84,315 | ||||
Pre-adoption of ASC Topic 606 [Member] | Network Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 46,432 | ||||
Pre-adoption of ASC Topic 606 [Member] | IMAX DMR [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 27,051 | ||||
Pre-adoption of ASC Topic 606 [Member] | Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [2] | 18,529 | |||
Pre-adoption of ASC Topic 606 [Member] | IMAX systems - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [2] | 852 | |||
Pre-adoption of ASC Topic 606 [Member] | Theater Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 32,768 | ||||
Pre-adoption of ASC Topic 606 [Member] | Sales and sales-type leases [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [4] | 14,911 | |||
Pre-adoption of ASC Topic 606 [Member] | Ongoing fees and finance income [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [5] | 2,603 | |||
Pre-adoption of ASC Topic 606 [Member] | Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [6] | 1,165 | |||
Pre-adoption of ASC Topic 606 [Member] | Theater system maintenance [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 12,712 | ||||
Pre-adoption of ASC Topic 606 [Member] | Other theater [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 1,377 | ||||
Pre-adoption of ASC Topic 606 [Member] | New Business [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 608 | ||||
Pre-adoption of ASC Topic 606 [Member] | Other Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 4,507 | ||||
Pre-adoption of ASC Topic 606 [Member] | Film post-production [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 3,163 | ||||
Pre-adoption of ASC Topic 606 [Member] | Film distribution [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 571 | ||||
Pre-adoption of ASC Topic 606 [Member] | Other [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 773 | ||||
ASC Topic 606 Adjustments | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 669 | ||||
ASC Topic 606 Adjustments | Network Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | (1,520) | ||||
ASC Topic 606 Adjustments | IMAX DMR [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
ASC Topic 606 Adjustments | Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [2] | (668) | |||
ASC Topic 606 Adjustments | IMAX systems - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [2] | (852) | |||
ASC Topic 606 Adjustments | Theater Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 2,189 | ||||
ASC Topic 606 Adjustments | Sales and sales-type leases [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [4] | 3,227 | |||
ASC Topic 606 Adjustments | Ongoing fees and finance income [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [5] | 127 | |||
ASC Topic 606 Adjustments | Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [6] | (1,165) | |||
ASC Topic 606 Adjustments | Theater system maintenance [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
ASC Topic 606 Adjustments | Other theater [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
ASC Topic 606 Adjustments | New Business [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
ASC Topic 606 Adjustments | Other Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
ASC Topic 606 Adjustments | Film post-production [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
ASC Topic 606 Adjustments | Film distribution [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
ASC Topic 606 Adjustments | Other [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | $ 0 | ||||
[1] | The Company’s largest customer represented 17.2% of total revenues for the three months ended March 31, 2018 (2017 —17.2%). | ||||
[2] | Contingent rent of $0.7 million related to theater systems under hybrid sales arrangements and $0.9 million related to theater systems under sales arrangements was recognized in the Company’s transition adjustment. | ||||
[3] | On January 1, 2018, the Company adopted ASC Topic 606, utilizing the modified retrospective transition method with a cumulative catch-up adjustment. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application, referred to as open contracts. All system sales and maintenance contracts with the existing network of IMAX theaters and the backlog of sales contracts make up a significant majority of the Company’s open contracts at any point in time. DMR arrangements where the film continues to be shown by the Company’s exhibitor partners, film distribution arrangements with remaining terms, aftermarket sales orders that have been received but for which control of the assets has not yet transferred to the customer are all also considered open contracts. Refer to note 3 for additional information. | ||||
[4] | Variable consideration of $1.6 million relating to theater systems recognized as sales or hybrid sales was recognized as part of the System Obligation in the quarter and the fixed consideration recognized for theater systems installed under hybrid sales arrangements was reclassified from Joint revenue sharing arrangement – fixed fees as hybrid sales are no longer considered part of the Joint revenue sharing arrangement segment. | ||||
[5] | Finance income of $0.1 million was recognized on the future consideration related to contracts. | ||||
[6] | Fixed consideration of $1.2 million related to the recognition of theater systems under hybrid sales arrangements was reclassified to Sales and Sales-type leases. |
Adoption of ASC Topic 606 Rev47
Adoption of ASC Topic 606 Revenue from Contracts with Customers (Table 3) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | ||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | $ 84,984 | $ 68,657 | |||
Network Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 44,912 | 39,329 | ||
IMAX DMR [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 27,051 | 23,408 | [1] | ||
Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1],[3] | 17,861 | [2] | 15,233 | |
IMAX systems - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1],[3] | 0 | [2] | 688 | |
Theater Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 34,957 | 23,207 | ||
Sales and sales-type leases [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [4] | 18,138 | |||
Ongoing fees and finance income [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [5] | 2,730 | |||
Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1],[3] | 0 | [6] | 470 | |
Theater system maintenance [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 12,712 | 11,045 | ||
Other theater [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 1,377 | 2,165 | ||
New Business [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 608 | 1,280 | ||
Other Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 4,507 | 4,841 | ||
Film post-production [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 3,163 | 3,072 | ||
Film distribution [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 571 | 512 | ||
Other [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | [1] | 773 | $ 1,257 | ||
Fixed Consideration [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 35,981 | ||||
Fixed Consideration [Member] | Network Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Fixed Consideration [Member] | IMAX DMR [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Fixed Consideration [Member] | Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Fixed Consideration [Member] | IMAX systems - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Fixed Consideration [Member] | Theater Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 32,768 | ||||
Fixed Consideration [Member] | Sales and sales-type leases [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 15,949 | ||||
Fixed Consideration [Member] | Ongoing fees and finance income [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 2,730 | ||||
Fixed Consideration [Member] | Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Fixed Consideration [Member] | Theater system maintenance [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 12,712 | ||||
Fixed Consideration [Member] | Other theater [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 1,377 | ||||
Fixed Consideration [Member] | New Business [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Fixed Consideration [Member] | Other Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 3,213 | ||||
Fixed Consideration [Member] | Film post-production [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 3,163 | ||||
Fixed Consideration [Member] | Film distribution [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Fixed Consideration [Member] | Other [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 50 | ||||
Variable Consideration [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 31,142 | ||||
Variable Consideration [Member] | Network Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 27,051 | ||||
Variable Consideration [Member] | IMAX DMR [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 27,051 | ||||
Variable Consideration [Member] | Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Variable Consideration [Member] | IMAX systems - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Variable Consideration [Member] | Theater Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 2,189 | ||||
Variable Consideration [Member] | Sales and sales-type leases [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 2,189 | ||||
Variable Consideration [Member] | Ongoing fees and finance income [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Variable Consideration [Member] | Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Variable Consideration [Member] | Theater system maintenance [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Variable Consideration [Member] | Other theater [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Variable Consideration [Member] | New Business [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 608 | ||||
Variable Consideration [Member] | Other Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 1,294 | ||||
Variable Consideration [Member] | Film post-production [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Variable Consideration [Member] | Film distribution [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 571 | ||||
Variable Consideration [Member] | Other [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 723 | ||||
Lease Arrangement [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 17,861 | ||||
Lease Arrangement [Member] | Network Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 17,861 | ||||
Lease Arrangement [Member] | IMAX DMR [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 17,861 | ||||
Lease Arrangement [Member] | IMAX systems - contingent rent [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Theater Business Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Sales and sales-type leases [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Ongoing fees and finance income [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Theater system maintenance [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Other theater [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | New Business [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Other Total [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Film post-production [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Film distribution [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | 0 | ||||
Lease Arrangement [Member] | Other [Member] | |||||
Revenue Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Revenues | $ 0 | ||||
[1] | The Company’s largest customer represented 17.2% of total revenues for the three months ended March 31, 2018 (2017 —17.2%). | ||||
[2] | Contingent rent of $0.7 million related to theater systems under hybrid sales arrangements and $0.9 million related to theater systems under sales arrangements was recognized in the Company’s transition adjustment. | ||||
[3] | On January 1, 2018, the Company adopted ASC Topic 606, utilizing the modified retrospective transition method with a cumulative catch-up adjustment. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application, referred to as open contracts. All system sales and maintenance contracts with the existing network of IMAX theaters and the backlog of sales contracts make up a significant majority of the Company’s open contracts at any point in time. DMR arrangements where the film continues to be shown by the Company’s exhibitor partners, film distribution arrangements with remaining terms, aftermarket sales orders that have been received but for which control of the assets has not yet transferred to the customer are all also considered open contracts. Refer to note 3 for additional information. | ||||
[4] | Variable consideration of $1.6 million relating to theater systems recognized as sales or hybrid sales was recognized as part of the System Obligation in the quarter and the fixed consideration recognized for theater systems installed under hybrid sales arrangements was reclassified from Joint revenue sharing arrangement – fixed fees as hybrid sales are no longer considered part of the Joint revenue sharing arrangement segment. | ||||
[5] | Finance income of $0.1 million was recognized on the future consideration related to contracts. | ||||
[6] | Fixed consideration of $1.2 million related to the recognition of theater systems under hybrid sales arrangements was reclassified to Sales and Sales-type leases. |
Adoption of ASC Topic 606 Rev48
Adoption of ASC Topic 606 Revenue from Contracts with Customers (Table 4) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Assets | |||
Other assets | $ 62,569 | $ 61,141 | $ 26,757 |
Deferred income taxes | 25,145 | 24,272 | 30,708 |
Shareholders' equity | |||
Accumulated deficit | (60,418) | (60,021) | (87,592) |
Non-controlling interests | $ 79,439 | 74,888 | 74,511 |
Calculated Under Revenue Guidance In Effect Before Topic 606 [Member] | |||
Assets | |||
Other assets | 26,757 | ||
Deferred income taxes | 30,708 | ||
Shareholders' equity | |||
Accumulated deficit | (87,592) | ||
Non-controlling interests | $ 74,511 | ||
ASC Topic 606 Adjustments | |||
Assets | |||
Other assets | 34,384 | ||
Deferred income taxes | (6,436) | ||
Shareholders' equity | |||
Accumulated deficit | 27,571 | ||
Non-controlling interests | $ 377 |
Adoption of ASC Topic 606 Rev49
Adoption of ASC Topic 606 Revenue from Contracts with Customers (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Jan. 01, 2018 | |
Revenue Initial Application Period Cumulative Effect Transition [Abstract] | ||
Revenue Initial Application Period Cumulative Effect Transition Description | As discussed in note 2, in 2014 the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”. The standard outlines a five-step model whereby revenue is recognized as performance obligations within a contract are satisfied. The standard also requires new, expanded disclosures regarding revenue recognition. Several ASUs have been issued since the issuance of ASU 2014-09. These ASUs, which modify certain sections of ASU 2014-09 are intended to promote a more consistent interpretation and application of the principles outlined in the standard. On January 1, 2018, the Company adopted ASC Topic 606, utilizing the modified retrospective transition method with a cumulative catch-up adjustment. Prior year amounts are presented in accordance with ASC Topic 605, “Revenue Recognition” or other applicable standards effective prior to January 1, 2018. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application, referred to as open contracts. All system sales and maintenance contracts with the existing network of IMAX theaters and the backlog of sales contracts make up a significant majority of the Company’s open contracts at any point in time. DMR arrangements where the film continues to be shown by the Company’s exhibitor partners, film distribution arrangements with remaining terms, aftermarket sales orders that have been received but for which control of the assets has not yet transferred to the customer are all also considered open contracts. The Company’s revenues from the sales of projection systems, provision of maintenance services, sale of aftermarket 3D glasses and parts, conversion of film content into the IMAX DMR format, distribution of documentary film content and the provision of post- production services are within the scope of the standard. The Company’s joint revenue sharing revenue arrangements, with the exception of those where the title transfers to the customer prior to recognition of the system revenue (hybrid sales arrangements), are not in scope of the standard due to their classification as leases. Similarly, any system revenue transactions classified as sales-type leases are excluded from the provisions of the new standard. The Company has assessed its performance obligations under its arrangements pursuant to ASC Topic 606 and has concluded that there are no significant differences between the performance obligations required to be units of account under ASC Topic 606 and the deliverables considered to be units of account under ASC Topic 605. Specifically, the Company has concluded that its “System Obligation”, which consists of a theater system (projector, sound system, screen system and, if applicable, 3D glasses cleaning machine); services associated with the theater system including theater design support, supervision of installation services, and projectionist training; a license to use the IMAX brand to market the theater; 3D glasses; initial maintenance and extended warranty services; and potentially the licensing of films remains unchanged when considered under ASC Topic 606. The Company’s performance obligations for its DMR, maintenance, film distribution and aftermarket sales contracts remain similar to those under ASC Topic 605. The new standard requires the Company to estimate the total consideration, including an estimate of future variable consideration, received in exchange for the goods delivered or services rendered. Certain of the Company’s revenue streams will be impacted by the variable consideration provisions of the new standard. The arrangements for the sale of projection systems include indexed minimum payment increases over the term of the arrangement, as well as provision for additional payments in excess of the minimum agreed payments in situations where the theater exceeds certain box office thresholds. Both of these contract provisions constitute variable consideration under the new standard that, subject to constraints to ensure reversal of revenues do not occur, require estimation and recognition upon transfer of control of the System Obligation to the customer, which is at the earlier of client acceptance of the installation of the system, including projectionist training, and the theater’s opening to the public. As this variable consideration extends through the entire term of the arrangement, which typically last 10 years, the Company applies constraints to its estimates and recognizes the variable consideration on a discounted present value basis at recognition. Under the previous standard, these amounts were recognized as reported by exhibitors (or customers) in future periods. In certain joint revenue sharing arrangements, specifically the Company’s hybrid sales arrangements, the Company’s arrangements call for sufficient upfront revenues to cover the cost of the arrangement, with monthly payments calculated based on the theater’s net box office earned. Title and control of the projection system transfer to the customer at the point of revenue recognition, which is the earlier of client acceptance of the theater installation, including projectionist training, and theater opening to the public. Under the new revenue recognition standard, the percentage payment is considered variable consideration that must be estimated and recognized at the time of initial revenue recognition. Using box office projections and the Company’s history with theater and box office experience in different territories, the Company estimates the amount of percentage payment earned over the life of the arrangement, subject to sufficient constraint such that there is not a risk of significant revenue reversal. Under the previous recognition standard, these amounts were recognized as reported by exhibitors (or customers) in future periods. As a result, the Company has reclassified hybrid sales arrangements to the traditional sales segment since the total consideration received and the revenue recognition timing at transfer of control of the assets now very closely resemble those of the traditional sale arrangements. The Company’s arrangements include a requirement for the provision of maintenance services over the life of the arrangement, subject to a consumer price index increase on renewal each year. Under the new standard, the Company has included the future consideration from the provision of maintenance services in the relative selling price allocation calculation at the inception of the arrangement. Under the previous recognition standard, only the first year’s extended warranty and maintenance services included as part of the upfront consideration received by the Company was included in the relative selling price allocation to determine the allocation of consideration between deliverables, while the future years maintenance services were recognized and amortized over each year’s renewal term. Except in circumstances where customers prepay the entire term’s maintenance arrangement, payments are due to the Company for the years after the extended warranty and maintenance services offered as part of the System Obligation expire. Payments upon renewal each year can be either in arrears or in advance, and can vary in frequency from monthly to annually. At March 31, 2018, $18.1 million of consideration has been deferred in relation to outstanding stand ready performance obligations related to these maintenance services. As the maintenance services are a stand ready obligation, revenue, subject to appropriate constraint, is recognized evenly over the contract term, which is consistent with past treatment. The Company does not expect a significant change in the allocation of consideration between performance obligations to arise as a result of this change. The Company’s DMR and Film Distribution revenue streams fall under the variable consideration exemption for sales- or usage-based royalties. While the Company does not hold rights to the intellectual property in the form of the DMR film content, the Company is being reimbursed for the application of its intellectual property in the form of its patented DMR processes used in the creation of new intellectual property in the form of an IMAX DMR version of film. The Company’s Film Distribution revenues are strictly from the license of its intellectual property in the form of documentary film content to which the Company holds distribution rights. The Company’s remaining revenue streams are not significantly impacted by the new standard. As the arrangements do not call for variable consideration and recognition of revenues transfer at the time of provision of service or transfer of control of goods as appropriate. | |
Variable Consideration Revenue Recognition | The recognition of variable consideration involves a significant amount of judgment. ASC Topic 606 requires variable consideration to be recognized subject to appropriate constraints to avoid a significant reversal of revenue in future periods. The standard identifies several examples of situations where constraining variable consideration would be appropriate: The amount of consideration is highly susceptible to factors outside the entity’s influence The uncertainty about the amount of consideration is not expected to be resolved for a long period of time The Company’s experience (or other evidence) with similar types of contracts is limited, or that experience has limited predictive value The Company has a practice of either offering a broad range of price concessions or changing the payment terms and conditions of similar contracts in similar circumstances | |
Revenue Initial Application Period Cumulative Effect Transition Explanation of Change | The Company recorded an increase to opening retained earnings of $27.6 million, net of tax, as of January 1, 2018 due to the cumulative impact of adopting ASC Topic 606, with the impact primarily related to revenue from its theatre system business. The impact to revenues as a result of applying ASC Topic 606 was an increase of $0.7 million for the three months ended March 31, 2018. | |
Revenue Remaining Performance Obligation | $ 18,100 | |
Opening retained earnings adjustment, Adoption of ASC Topic 606 | $ 27,571 | |
Revenue impact, Adoption of ASC Topic 606 | 669 | |
Contingent Rent Adjustment - Hybrid Sales Arrangements, Adoption of Topic 606 | (668) | |
Contingent Rent Adjustment - Sales Arragements, Adoption of ASC Topic 606 | (852) | |
Variable Consideration Adjustment, Adoption of ASC Topic 606 | 1,656 | |
Finance Income, Adoption of ASC Topic 606 | 127 | |
Fixed Consideration Adjustment, Adoption of ASC Topic 606 | (1,165) | |
True-ups of Transition Amounts, Adoption of ASC Topic 606 | $ 0 |
Financing Receivables (Table 1)
Financing Receivables (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales | ||
Gross minimum lease payments receivable | $ 8,447 | $ 8,537 |
Unearned finance income | (1,110) | (1,147) |
Minimum lease payments receivable | 7,337 | 7,390 |
Accumulated allowance for uncollectible amounts | (155) | (155) |
Net investment in leases | 7,182 | 7,235 |
Gross financed sales receivables | 162,532 | 162,522 |
Unearned finance income | (39,018) | (39,341) |
Financed sales receivables | 123,514 | 123,181 |
Accumulated allowance for uncollectible amounts | (922) | (922) |
Net financed sales receivables | 122,592 | 122,259 |
Total financing receivables | 129,774 | 129,494 |
Net financed sales receivables due within one year | 25,539 | 25,455 |
Net financed sales receivables due after one year | $ 97,053 | $ 96,804 |
Financing Receivables (Narrativ
Financing Receivables (Narratives) (Details) | Mar. 31, 2018 | Dec. 31, 2017 |
Financing Receivables (Textuals) [Abstract] | ||
Financed sale receivables, Weighted average effective interest rate | 9.10% | 9.10% |
Inventories (Table 1) (Details)
Inventories (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventories | ||
Raw materials | $ 23,421 | $ 21,206 |
Work-in-process | 3,896 | 2,601 |
Finished goods | 1,779 | 6,981 |
Total | $ 29,096 | $ 30,788 |
Inventories (Narratives) (Detai
Inventories (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Inventories (Textuals) [Abstract] | |||
Finished goods inventory with title passed to customer | $ 3,300 | $ 4,900 | |
Write-downs for excess and obsolete inventory | $ 0 | $ 0 |
Film Assets (Table 1) (Details)
Film Assets (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Film Costs [Abstract] | ||
Film assets | $ 7,714 | $ 5,026 |
Property, Plant and Equipment55
Property, Plant and Equipment (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Property, plant and equipment | ||
Cost | $ 438,566 | $ 427,511 |
Accumulated Depreciation | 159,588 | 150,730 |
Net Book Value | 278,978 | 276,781 |
Equipment leased or held for use [Member] | ||
Property, plant and equipment | ||
Cost | 274,697 | 270,016 |
Accumulated Depreciation | 114,027 | 107,861 |
Net Book Value | 160,670 | 162,155 |
Theater System Components [Member] | ||
Property, plant and equipment | ||
Cost | 268,940 | 264,259 |
Accumulated Depreciation | 109,948 | 103,922 |
Net Book Value | 158,992 | 160,337 |
Camera Equipment [Member] | ||
Property, plant and equipment | ||
Cost | 5,757 | 5,757 |
Accumulated Depreciation | 4,079 | 3,939 |
Net Book Value | 1,678 | 1,818 |
Assets Under Construction [Member] | ||
Property, plant and equipment | ||
Cost | 25,187 | 23,398 |
Accumulated Depreciation | 0 | 0 |
Net Book Value | 25,187 | 23,398 |
Other property, plant and equipment [Member] | ||
Property, plant and equipment | ||
Cost | 138,682 | 134,097 |
Accumulated Depreciation | 45,561 | 42,869 |
Net Book Value | 93,121 | 91,228 |
Land [Member] | ||
Property, plant and equipment | ||
Cost | 8,203 | 8,203 |
Accumulated Depreciation | 0 | 0 |
Net Book Value | 8,203 | 8,203 |
Buildings [Member] | ||
Property, plant and equipment | ||
Cost | 74,859 | 74,478 |
Accumulated Depreciation | 18,005 | 17,364 |
Net Book Value | 56,854 | 57,114 |
Office and Production Equipment [Member] | ||
Property, plant and equipment | ||
Cost | 44,556 | 40,442 |
Accumulated Depreciation | 23,604 | 22,164 |
Net Book Value | 20,952 | 18,278 |
Leasehold Improvements [Member] | ||
Property, plant and equipment | ||
Cost | 11,064 | 10,974 |
Accumulated Depreciation | 3,952 | 3,341 |
Net Book Value | $ 7,112 | $ 7,633 |
Property, Plant and Equipment56
Property, Plant and Equipment (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property, Plant and Equipment (Textuals) [Abstract] | ||
Property, plant and equipment impairment charges | $ 5 | $ 4 |
Other Intangible Assets (Table
Other Intangible Assets (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Other Intangible Assets | ||
Other Intangible Assets, Cost | $ 53,444 | $ 53,184 |
Other Intangible Assets, Accumulated Amortization | 22,911 | 21,973 |
Other Intangible Assets, Net Book Value | 30,533 | 31,211 |
Patents and Trademarks [Member] | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 12,391 | 12,184 |
Other Intangible Assets, Accumulated Amortization | 7,914 | 7,710 |
Other Intangible Assets, Net Book Value | 4,477 | 4,474 |
Licenses and Intellectual Property [Member] | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 21,168 | 21,471 |
Other Intangible Assets, Accumulated Amortization | 7,822 | 7,800 |
Other Intangible Assets, Net Book Value | 13,346 | 13,671 |
Other [Member] | ||
Other Intangible Assets | ||
Other Intangible Assets, Cost | 19,885 | 19,529 |
Other Intangible Assets, Accumulated Amortization | 7,175 | 6,463 |
Other Intangible Assets, Net Book Value | $ 12,710 | $ 13,066 |
Other Intangible Assets (Tabl58
Other Intangible Assets (Table 2) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
Other Intangible Assets [Abstract] | |
2018 (nine months remaining) | $ 3,653 |
2,019 | 4,871 |
2,020 | 4,871 |
2,021 | 4,871 |
2,022 | $ 4,871 |
Other Intangible Assets (Narrat
Other Intangible Assets (Narratives) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Other Intangible Assets (Textuals) [Abstract] | ||
Other Intangible Asset, comprised mainly of ERP System | $ 19.9 | |
Fully amortized other intangible assets that are still being used by the company | 5.9 | |
Acquisition of other intangible assets, cost | $ 0.7 | |
Weighted average amortization period for additions to other intangible assets | P10Y | |
Costs incurred to renew or extend the term of acquired other intangible assets | less than | |
Costs incurred to renew or extend the term of acquired other intangible assets | $ 0.1 | $ 0.1 |
Credit Facility and Playa Vis60
Credit Facility and Playa Vista Loan (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Bank indebtedness [Line Items] | ||
Bank indebtedness | $ 24,867 | $ 25,357 |
Playa Vista Loan [Member] | ||
Bank indebtedness [Line Items] | ||
Playa Vista Loan | 25,167 | 25,667 |
Deferred charges on debt financing | (300) | (310) |
Bank indebtedness | 24,867 | 25,357 |
Playa Vista loan principal payments | ||
2018 (nine months remaining) | 1,500 | |
2,019 | 2,000 | |
2,020 | 2,000 | |
2,021 | 2,000 | |
2,022 | 2,000 | |
Thereafter | 15,667 | |
Playa Vista Loan | $ 25,167 | $ 25,667 |
Credit Facility and Playa Vis61
Credit Facility and Playa Vista Loan (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Oct. 20, 2015 | Mar. 03, 2015 | |
Playa Vista Loan [Member] | |||||
Credit Facility and Playa Vista Loan (Textuals) [Abstract] | |||||
Maximum borrowing capacity | $ 30,000 | ||||
Amounts Drawn | $ 25,167 | $ 25,667 | |||
Interest rate description | variable rate per annum at 2.0% above the 30-day LIBOR rate | ||||
Effective interest rate | 3.70% | 2.85% | |||
Maturity date | Oct. 19, 2025 | ||||
Term of loan | 120 months | ||||
Playa Vista Loan - Payment Terms | 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 Playa Vista Loan is being amortized over 15 years. The Playa Vista Loan will be fully due and payable on October 19, 2025. | ||||
Playa Vista Loan - Security | The Playa Vista Loan is secured by a deed of trust from PV Borrower in favor of Wells Fargo and other documents evidencing and securing the loan, 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. The Company had also guaranteed the Playa Vista Loan. | ||||
Credit Facility [Member] | |||||
Credit Facility and Playa Vista Loan (Textuals) [Abstract] | |||||
Credit Facility Maturity Date | Mar. 3, 2020 | ||||
Maximum borrowing capacity | $ 200,000 | ||||
Remaining Borrowing Capacity | $ 200,000 | 200,000 | |||
Amounts Drawn | 0 | 0 | |||
Letters of credit and advance payment guarantees | $ 0 | 0 | |||
Compliance with covenants | The Company was in compliance with all of its requirements at March 31, 2018. | ||||
Wells Fargo Foreign Exchange Facility [Member] | |||||
Credit Facility and Playa Vista Loan (Textuals) [Abstract] | |||||
Settlement risk on its foreign currency forward contracts | $ 0 | ||||
Notional Amount of arrangements entered into | 34,962 | ||||
Bank of Montreal Facilities [Member] | |||||
Credit Facility and Playa Vista Loan (Textuals) [Abstract] | |||||
Remaining Borrowing Capacity | 10,000 | 10,000 | |||
Letters of credit and advance payment guarantees | $ 100 | $ 0 |
Commitments, Contingencies an62
Commitments, Contingencies and Guarantees (Narratives) Details - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 25 Months Ended | 51 Months Ended | 95 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 14, 2015 | Mar. 27, 2008 | Dec. 02, 2011 | |
Minimum commitment related to certain film and new content | $ 2,677 | ||||
Amount spent to reduce film and content commitments | 1,255 | ||||
Future expected spend in current year | 1,422 | ||||
Loss contingency | The minimum amount in the range has been used to measure the amount to be accrued for this loss contingency in accordance with FASB ASC Topic 450. | ||||
Final Award in favor of company | Amount of $11.3 million plus an additional $2,512 each day in interest from October 1, 2007 until the date the award is paid | $30,000 to cover the costs of the application | |||
Underpayment of the freight and insurance portion of the customs duties and taxes related to the customs audit | $ 150 | ||||
Importation Fee Underpayment | RMB 200,000 | ||||
Estimated penalties accrued | $ 300 | ||||
Damages sought | $ 10,400 | ||||
Counterclaim sought | $ 24,000 | ||||
Financial Guarantees | 0 | ||||
Product Warranty Accrual | 100 | 100 | |||
Indemnification of its directors/officers | $ 0 | $ 0 | |||
Other Indemnification | 0 |
Condensed Consolidated Statem63
Condensed Consolidated Statement of Operations Supplemental Information (Narratives) (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018USD ($)yrFilmexhibitorTheaters | Mar. 31, 2017USD ($)Film | Dec. 31, 2017USD ($) | |
Selling Expenses | |||
Deferred direct selling costs and direct advertising and marketing included in costs and expenses applicable to revenues-equipment and product sales | $ 700 | $ 400 | |
Film exploitation costs, including advertising and marketing included in costs and expenses applicable to revenues-services | $ 5,300 | 2,400 | |
Commissions recognized as cost and expenses included in costs and expenses applicable to revenues-rentals | less than | ||
Commissions recognized as cost and expenses included in costs and expenses applicable to revenues-rentals | $ 100 | 100 | |
Direct advertising and marketing costs included in costs and expenses applicable to revenues-rentals | 100 | $ 300 | |
Foreign Exchange | |||
Foreign exchange translation (loss) | less than | ||
Foreign exchange translation (loss) | $ (100) | $ (100) | |
Collaborative Arrangements | |||
Total number of exhibitors under joint revenue sharing agreements | exhibitor | 42 | ||
Total number of theater systems under joint revenue sharing agreements | Theaters | 1,069 | ||
Total number of operating theaters under joint revenue sharing agreement | Theaters | 718 | ||
Amounts attributable to transactions arising between the company and its customers under joint revenue sharing arrangements | $ 17,900 | $ 15,700 | |
Average percentage of the box-office receipts of the film for recovering digital re-mastering cost | 12.50% | ||
IMAX DMR films exhibited in the period | Film | 22 | 18 | |
Amounts attributable to transactions arising between the company and its customers under IMAX DMR arrangements | $ 27,051 | $ 23,408 | |
Number of significant co-produced film arrangement | Film | 2 | ||
Number of other co-produced film arrangements | Film | 3 | ||
Variable Interest Entity, Consolidated, Carrying Amount, Assets | $ 11,357 | $ 7,539 | |
Variable Interest Entity, Consolidated, Carrying Amount, Liabilities | 11,445 | $ 7,178 | |
Amounts attributable to transactions between the company and other parties involved in the production of films included in cost and expense | $ 200 | 500 | |
Number of Co-produced television collaborative arrangements | one | ||
Co-produced television collaborative arrangement revenue | $ 400 | 0 | |
Co-produced television collaborative arrangement costs and expenses | 400 | 0 | |
Co-produced television collaborative arrangement net revenue recorded | $ 0 | $ 0 | |
Minimum [Member] | |||
Collaborative Arrangements | |||
Non-cancellable term of joint revenue sharing arrangements | yr | 10 | ||
Maximum [Member] | |||
Collaborative Arrangements | |||
Non-cancellable term of joint revenue sharing arrangements | longer |
Condensed Consolidated Statem64
Condensed Consolidated Statements of Cash Flows Supplemental Information (Table 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Decrease (increase) in: | ||
Accounts receivable | $ 10,314 | $ 161 |
Financing receivables | (420) | 1,763 |
Inventories | 1,692 | (3,312) |
Prepaid expenses | (2,616) | (1,421) |
Other assets | (2,346) | (224) |
Increase (decrease) in: | ||
Accounts payable | (10,419) | (6,041) |
Accrued and other Liabilities | (4,862) | (18,825) |
Deferred revenue | (1,161) | 10,619 |
Changes in other non-cash operating assets and liabilities | (9,818) | (17,280) |
Cash payments | ||
Income taxes | 4,765 | 7,270 |
Interest | $ 226 | $ 190 |
Condensed Consolidated Statem65
Condensed Consolidated Statements of Cash Flows Supplemental Information (Table 2) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of Depreciation and amortization | ||
Film assets | $ 3,571 | $ 3,805 |
Property, plant and equipment | ||
Joint revenue sharing arrangements | 4,840 | 4,246 |
Other property, plant and equipment | 3,442 | 2,760 |
Other intangible assets | 1,217 | 926 |
Other assets | 310 | 220 |
Deferred financing costs | 141 | 131 |
Depreciation and amortization | $ 13,521 | $ 12,088 |
Condensed Consolidated Statem66
Condensed Consolidated Statements of Cash Flows Supplemental Information (Table 3) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | ||
Write-downs, net of recoveries | |||
Accounts receivable | $ 451 | $ 185 | |
Property, plant and equipment | [1] | 421 | 409 |
Joint revenue sharing arrangements | [1] | 126 | 0 |
Other intangible assets | 38 | 0 | |
Film assets | [2] | 0 | 3,416 |
Write-downs, net of recoveries | $ 1,036 | $ 4,010 | |
[1] | The Company recognized asset impairment charges of $0.5 million (2017 — $0.4 million) against property, plant and equipment after an assessment of the carrying value of certain assets in light of their future expected cash flows. | ||
[2] | The Company reviewed the carrying value of certain documentary film assets as a result of lower than expected revenue being generated during the period and revised expectations for future revenues based on the latest information available. In the three months ended March 31, 2017, an impairment of $3.4 million was recorded based on the carrying value of these documentary films as compared to the related estimated future box office and revenues that would ultimately be generated by these films. No such impairment was recognized in the three months ended March 31, 2018. |
Condensed Consolidated Statem67
Condensed Consolidated Statements of Cash Flows Supplemental Information (Table 4) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Non cash Investing And Financing Items [Abstract] | ||
Purchases of property, plant and equipment | $ 364 | $ 1,384 |
Investment in joint revenue sharing arrangements | (20) | (55) |
Acquisition of other intangible assets | 5 | (25) |
Net accruals related to | $ 349 | $ 1,304 |
Condensed Consolidated Statem68
Condensed Consolidated Statements of Cash Flows Supplemental Information (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Asset Impairment Charges [Abstract] | ||
Property, plant and equipment impairment charges | $ 5 | $ 4 |
Documentary film asset impairments | $ 3,416 |
Income Taxes (Table 1) (Details
Income Taxes (Table 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Unrealized change in cash flow hedging instruments | $ 263 | $ (82) |
Realized change in cash flow hedging instruments upon settlement | 58 | (75) |
Income tax effect on other comprehensive income | $ 321 | $ (157) |
Income Taxes (Narratives) (Deta
Income Taxes (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Jan. 01, 2017 | |
Deferred Tax Assets | ||||
Change in Company's estimates of the recoverability of its deferred tax assets | $ 0 | |||
Deferred income tax asset after valuation allowance | 25,100 | $ 30,700 | ||
Deferred income tax asset before valuation allowance | 25,300 | 30,900 | ||
Valuation allowance | 200 | 200 | ||
Provision for income taxes | (4,453) | $ (114) | ||
Tax provision related to uncertain tax positions | 100 | |||
Income tax related to employee stock compensation plans | 700 | |||
Impact on accumulated deficit due to adoption of ASU 2016-16 | $ 8,314 | |||
Impact on other assets due to adoption of ASU 2016-16 | 14,800 | |||
Impact on deferred taxes due to adoption of ASU 2016-16 | 7,900 | |||
Impact on accrued and other liabilities due to adoption of ASU 2016-16 | $ 1,400 | |||
Impact of changes due to U.S. tax reform | 9,300 | |||
Cash held outside of North America | 125,900 | 119,400 | ||
Cash held in the PRC | 37,500 | $ 32,600 | ||
Withholding tax estimate on repatriation of funds | $ 7,800 |
Capital Stock (Table 1) (Detail
Capital Stock (Table 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock-Based Compensation [Abstract] | ||
Cost and expenses applicable to revenues | $ 96 | $ 0 |
Selling, general and administrative expenses | 4,417 | 5,264 |
Research and development | 334 | 0 |
Exit costs, restructuring charges and associated impairments | (19) | 0 |
Stock-Based Compensation | $ 4,828 | $ 5,264 |
Capital Stock (Table 2) (Detail
Capital Stock (Table 2) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense by plan type | $ 4,828 | $ 5,264 |
Employee Stock Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense by plan type | 1,389 | 1,354 |
Restricted Share Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense by plan type | 3,215 | 3,446 |
China RSU [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense by plan type | 183 | 108 |
Employee Stock Option China Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense by plan type | 41 | 250 |
CSSBP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense by plan type | $ 0 | $ 106 |
Capital Stock (Table 3) (Detail
Capital Stock (Table 3) (Details) - Employee Stock Option [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Option activity under the Stock Option Plan and the IMAX LTIP | ||
Options outstanding, beginning of period | 5,082,100 | 5,190,542 |
Options outstanding, weighted average exercise price per share, beginning of period | $ 29.31 | $ 28.35 |
Granted | 878,629 | 679,030 |
Granted, weighted average exercise price per share | $ 22.06 | $ 32.16 |
Exercised | 0 | (584,589) |
Exercised, weighted average exercise price per share | $ 0 | $ 22.38 |
Forfeited | (45,164) | (16,380) |
Forfeited, weighted average exercise price per share | $ 31.13 | $ 31.69 |
Expired | (10,000) | 0 |
Expired, weighted average exercise price per share | $ 27.09 | $ 0 |
Options outstanding, end of period | 5,905,565 | 5,268,603 |
Options outstanding, weighted average exercise price per share, end of period | $ 28.22 | $ 29.49 |
Options exercisable, end of period | 4,133,351 | 3,945,034 |
Options exercisable, weighted average exercise price per share, end of period | $ 29.14 | $ 28.68 |
Capital Stock (Table 4) (Detail
Capital Stock (Table 4) (Details) - Restricted Share Units (RSUs) [Member] - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Resticted Share Units activity under the IMAX LTIP | ||
RSUs outstanding, beginning of period | 995,329 | 1,124,180 |
RSUs outstanding, weighted average grant date fair value per share, beginning of period | $ 32.80 | $ 33.01 |
Granted | 535,362 | 373,540 |
Granted, weighted average grant date fair value per share | $ 20.85 | $ 32.45 |
Vested and settled | (257,888) | (201,793) |
Vested and settled, weighted average grant date fair value per share | $ 32.76 | $ 31.25 |
Forfeited | (30,024) | (20,506) |
Forfeited, weighted average grant date fair value per share | $ 31.93 | $ 32.31 |
RSUs outstanding, end of period | 1,242,779 | 1,275,421 |
RSUs outstanding, weighted average grant date fair value per share, end of period | $ 27.58 | $ 33.13 |
Capital Stock (Table 5) (Detail
Capital Stock (Table 5) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | |
Net income applicable to common shareholders | $ 8,505 | $ 75 | |||
Weighted average number of common shares: | |||||
Issued and outstanding, beginning of period | 63,996,413 | 64,695,550 | 64,695,550 | 66,159,902 | |
Weighted average number of shares repurchased, net of shares issued, during the period | (140,769) | 202,826 | |||
Weighted average number of shares used in computing basic income per share | 64,554,781 | 66,362,728 | |||
Assumed exercise of stock options and RSUs, net of shares assumed repurchased | 64,528 | 817,104 | |||
Weighted average number of shares used in computing diluted income per share | 64,619,308 | 67,179,832 |
Capital Stock (Table 6) (Detail
Capital Stock (Table 6) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Movement of Shareholders Equity | ||
Balance as at December 31, 2017 | $ 527,746 | |
Adjustment to capital stock for average carrying value of repurchased and retired common shares | (4,494) | |
Adjustment to capital stock for share held in treasury | (859) | |
Adjustment to other equity for employee stock options granted | 1,429 | |
Adjustment to other equity for RSUs granted | 3,398 | |
Adjustment to other equity for RSUs vested | (6,261) | |
Net income attributable to common shareholders | 8,505 | $ 75 |
Adoption of ASC Topic 606, Revenue from Contracts with Customers | 27,571 | |
Adjustment to accumulated deficit for common shares repurchased and retired | (8,902) | |
Adjustment to accumulated other comprehensive loss for unrealized net loss from cash flow hedging instruments | (1,007) | |
Adjustment to accumulated other comprehensive loss for the realization of cash flow hedging net gain upon settlement | (220) | |
Adjustment to accumulated other comprehensive loss for foreign currency translation adjustments | 1,394 | |
Adjustment to accumulated other comprehensive loss for tax effect of movement in other comprehensive income | 321 | |
Balance as at March 31, 2018 | $ 548,621 |
Capital Stock (Narratives) (Det
Capital Stock (Narratives) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jun. 12, 2017 | |
Capital Stock (Textuals) [Abstract] | |||
Share-based compensation costs recorded for the period | $ 4,828 | $ 5,264 | |
Details of the share repurchase program | On June 12, 2017, the Company announced that its Board of Directors approved a new $200.0 million share repurchase program for shares of the Company’s common stock. The share repurchase program expires on June 30, 2020. 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. | ||
Stock Repurchase Program, Authorized Amount | $ 200,000 | ||
Stock Repurchase Program Expiration Date | Jun. 30, 2020 | ||
Stock Repurchased And Retired During Period, Shares | 654,224 | 0 | |
Stock Acquired, Average Cost per Share | $ 20.46 | $ 0 | |
Common shares purchased in open market by trustee in connection with RSUs | 300,000 | 368,624 | |
Weighted average price of common shares purchased in open market by trustee in connection with RSUs | $ 20.55 | $ 32.38 | |
Antidilutive shares issuable upon exercise of stock options and restricted share units | 6,409,364 | 1,785,013 | |
Employee Stock Option [Member] | |||
Capital Stock (Textuals) [Abstract] | |||
Share-based compensation costs recorded for the period | $ 1,389 | $ 1,354 | |
Antidilutive shares issuable upon exercise of stock options and restricted share units | 5,819,952 | 1,613,340 | |
Restricted Share Units (RSUs) [Member] | |||
Capital Stock (Textuals) [Abstract] | |||
Share-based compensation costs recorded for the period | $ 3,215 | $ 3,446 | |
Antidilutive shares issuable upon exercise of stock options and restricted share units | 589,412 | 171,673 |
Segmented Information (Table 1)
Segmented Information (Table 1)(Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | ||||
Revenues | |||||
Revenues | $ 84,984 | $ 68,657 | |||
Gross margins | |||||
Gross margins | 50,692 | 35,771 | |||
Network Business Total [Member] | |||||
Revenues | |||||
Revenues | [1] | 44,912 | 39,329 | ||
Gross margins | |||||
Gross margins | 31,522 | 28,405 | |||
IMAX DMR [Member] | |||||
Revenues | |||||
Revenues | 27,051 | 23,408 | [1] | ||
Gross margins | |||||
Gross margins | [2] | 18,782 | 17,467 | ||
Joint revenue sharing arrangements - contingent rent [Member] | |||||
Revenues | |||||
Revenues | [1],[4] | 17,861 | [3] | 15,233 | |
Gross margins | |||||
Gross margins | [2],[4] | 12,740 | 10,250 | ||
IMAX systems - contingent rent [Member] | |||||
Revenues | |||||
Revenues | [1],[4] | 0 | [3] | 688 | |
Gross margins | |||||
Gross margins | [4] | 0 | 688 | ||
Theater Business Total [Member] | |||||
Revenues | |||||
Revenues | [1] | 34,957 | 23,207 | ||
Gross margins | |||||
Gross margins | 20,452 | 10,508 | |||
IMAX Systems [Member] | |||||
Revenues | |||||
Revenues | [1],[4] | 20,868 | 9,527 | ||
Gross margins | |||||
Gross margins | [2],[4] | 14,292 | 5,741 | ||
Joint revenue sharing arrangements - fixed fees [Member] | |||||
Revenues | |||||
Revenues | [1],[4] | 0 | [5] | 470 | |
Gross margins | |||||
Gross margins | [2],[4] | 0 | 88 | ||
Theater system maintenance [Member] | |||||
Revenues | |||||
Revenues | [1] | 12,712 | 11,045 | ||
Gross margins | |||||
Gross margins | 6,205 | 4,249 | |||
Other theater [Member] | |||||
Revenues | |||||
Revenues | [1] | 1,377 | 2,165 | ||
Gross margins | |||||
Gross margins | (45) | 430 | |||
New Business [Member] | |||||
Revenues | |||||
Revenues | [1] | 608 | 1,280 | ||
Gross margins | |||||
Gross margins | (1,469) | (337) | |||
Other Total [Member] | |||||
Revenues | |||||
Revenues | [1] | 4,507 | 4,841 | ||
Gross margins | |||||
Gross margins | 187 | (2,805) | |||
Film post-production [Member] | |||||
Revenues | |||||
Revenues | [1] | 3,163 | 3,072 | ||
Gross margins | |||||
Gross margins | 1,685 | 1,101 | |||
Film distribution [Member] | |||||
Revenues | |||||
Revenues | [1] | 571 | 512 | ||
Gross margins | |||||
Gross margins | [2] | (1,239) | (3,764) | ||
Other [Member] | |||||
Revenues | |||||
Revenues | [1] | 773 | 1,257 | ||
Gross margins | |||||
Gross margins | $ (259) | $ (142) | |||
[1] | The Company’s largest customer represented 17.2% of total revenues for the three months ended March 31, 2018 (2017 —17.2%). | ||||
[2] | IMAX DMR segment margins include marketing costs of $4.1 million for the three months ended March 31, 2018 (2017 — $2.6 million). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $0.2 million for the three months ended March 31, 2018 (2017 — $0.4 million). IMAX systems segment margins include marketing and commission costs of $0.7 million for the three months ended March 31, 2018 (2017 — $0.4 million). Film distribution segment margins include marketing expense of $1.2 million for the three months ended March 31, 2018 (2017 — a recovery of $0.2 million). | ||||
[3] | Contingent rent of $0.7 million related to theater systems under hybrid sales arrangements and $0.9 million related to theater systems under sales arrangements was recognized in the Company’s transition adjustment. | ||||
[4] | On January 1, 2018, the Company adopted ASC Topic 606, utilizing the modified retrospective transition method with a cumulative catch-up adjustment. The Company is applying the new revenue standard only to contracts not completed as of the date of initial application, referred to as open contracts. All system sales and maintenance contracts with the existing network of IMAX theaters and the backlog of sales contracts make up a significant majority of the Company’s open contracts at any point in time. DMR arrangements where the film continues to be shown by the Company’s exhibitor partners, film distribution arrangements with remaining terms, aftermarket sales orders that have been received but for which control of the assets has not yet transferred to the customer are all also considered open contracts. Refer to note 3 for additional information. | ||||
[5] | Fixed consideration of $1.2 million related to the recognition of theater systems under hybrid sales arrangements was reclassified to Sales and Sales-type leases. |
Segmented Information (Table 2)
Segmented Information (Table 2) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Geographical Information | ||
Revenues, total | $ 84,984 | $ 68,657 |
Greater China [Member] | ||
Geographical Information | ||
Revenues, total | 28,146 | 18,590 |
United States [Member] | ||
Geographical Information | ||
Revenues, total | 27,632 | 25,198 |
Western Europe [Member] | ||
Geographical Information | ||
Revenues, total | 10,262 | 5,813 |
Asia (excluding Greater China) [Member] | ||
Geographical Information | ||
Revenues, total | 9,230 | 8,429 |
Canada [Member] | ||
Geographical Information | ||
Revenues, total | 2,566 | 3,282 |
Latin America [Member] | ||
Geographical Information | ||
Revenues, total | 1,479 | 1,654 |
Russia & the CIS [Member] | ||
Geographical Information | ||
Revenues, total | 1,990 | 3,183 |
Rest of the World [Member] | ||
Geographical Information | ||
Revenues, total | $ 3,679 | $ 2,508 |
Segmented Information (Narrativ
Segmented Information (Narratives) (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2018USD ($)Segments | Mar. 31, 2017USD ($) | |
Segment Reporting (Textuals) [Abstract] | ||
Number of Primary Groups | Segments | 4 | |
Description of products and services from which each reportable segment derives its revenues | The Company’s reportable segments are organized under four primary groups identified by nature of product sold or service provided: (1) Network Business, representing variable revenue generated by box office results and which includes the reportable segment of IMAX DMR and contingent rent from the joint revenue sharing arrangements and IMAX systems segments. Effective January 1, 2018, the Company no longer includes hybrid joint revenue sharing arrangements, which take the form of a sale, in the joint revenue sharing arrangement reportable segment. These arrangements are now reflected under the IMAX systems segment of Theater Business; (2) Theater Business, representing revenue generated by the sale and installation of theater systems and maintenance services, primarily related to the IMAX Systems and Theater System Maintenance reportable segments, and also includes hybrid (fixed and contingent) revenues and upfront installation costs from sales arrangements previously reported in the joint revenue sharing arrangements segment and after-market sales of projection system parts and 3D glasses from the other segment; (3) New Business, which includes content licensing and distribution fees associated with the Company’s original content investments, virtual reality initiatives, and other business initiatives that are in the development and/or start-up phase, and (4) Other; which includes the film post-production and distribution segments and certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items from the other segment. | |
Description of the basis of accounting for transactions between reportable segments | On January 1, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, and all the related amendments on a prospective basis, refer to note 3 for additional information. In addition, refer to Item 2 of the Company’s Form 10-Q for additional information regarding the four primary groups mentioned above. | |
Percentage of total revenues represented by largest customer | 17.20% | 17.20% |
Marketing and commission costs | $ 0.7 | $ 0.4 |
Disclosure on Geographic Areas, Description of Revenue from External Customers | No single country in the Rest of the World, Western Europe, Latin America and Asia (excluding Greater China) classifications comprises more than 10% of the total revenue. | |
IMAX DMR [Member] | ||
Segment Reporting (Textuals) [Abstract] | ||
Marketing costs (recovery) | $ 4.1 | 2.6 |
Joint revenue sharing arrangements [Member] | ||
Segment Reporting (Textuals) [Abstract] | ||
Advertising, marketing and commission costs (recovery) | 0.2 | 0.4 |
IMAX Systems [Member] | ||
Segment Reporting (Textuals) [Abstract] | ||
Advertising, marketing and commission costs (recovery) | 0.7 | 0.4 |
Film distribution [Member] | ||
Segment Reporting (Textuals) [Abstract] | ||
Marketing costs (recovery) | $ 1.2 | $ (0.2) |
Employees Pension and Postret81
Employees Pension and Postretirement Benefits (Table 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Amounts Accrued | |||
Interest cost | $ 105 | $ 107 | |
Pension Expense | |||
Interest cost | 105 | 107 | |
Pension expense | 105 | 107 | |
Pension Plans, Defined Benefit [Member] | |||
Amounts Accrued | |||
Obligation, beginning of period | 19,003 | $ 19,580 | $ 19,580 |
Interest cost | 105 | 427 | |
Actuarial gain | 0 | (1,004) | |
Obligation, end of period and unfunded status | 19,108 | 19,003 | |
Pension Expense | |||
Interest cost | $ 105 | $ 427 |
Employees Pension and Postret82
Employees Pension and Postretirement Benefits (Table 2) (Details) $ in Thousands | Mar. 31, 2018USD ($) |
SERP Benefits [Member] | |
Schedule of expected benefit payments | |
2018 (nine months remaining) | $ 0 |
2,019 | 0 |
2,020 | 20,076 |
2,021 | 0 |
2,022 | 0 |
Thereafter | 0 |
Total expected future benefit payment | 20,076 |
Postretirement Benefits Executives [Member] | |
Schedule of expected benefit payments | |
2018 (nine months remaining) | 24 |
2,019 | 26 |
2,020 | 33 |
2,021 | 37 |
2,022 | 40 |
Thereafter | 544 |
Total expected future benefit payment | 704 |
Postretirement Benefits Canadian Employees [Member] | |
Schedule of expected benefit payments | |
2018 (nine months remaining) | 91 |
2,019 | 109 |
2,020 | 86 |
2,021 | 111 |
2,022 | 99 |
Thereafter | 1,169 |
Total expected future benefit payment | $ 1,665 |
Employees Pension and Postret83
Employees Pension and Postretirement Benefits (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Sep. 01, 2016 | |
SERP Benefits [Member] | |||||
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract] | |||||
Accumulated benefit obligation for the SERP | $ 19,100 | $ 19,000 | |||
Benefit Obligation | 19,108 | 19,003 | $ 19,580 | ||
Companies contribution and expenses during the remainder of 2018 | 0 | ||||
Expected interest costs in the remainder of the year | $ 300 | ||||
SERP assumptions | The SERP assumptions are that Mr. Gelfond will receive a lump sum payment six months after retirement at the end of the current term of his employment agreement (December 31, 2019), although Mr. Gelfond has not informed the Company that he intends to retire at that time. | ||||
Defined Contribution Plan [Member] | |||||
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract] | |||||
Description Of Defined Contribution Pension And Other Postretirement Plans | 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. | ||||
Maximum percentage of base salary contributed to Defined Contribution Pension Plan by Company | 5.00% | ||||
Postretirement Benefits Executives [Member] | |||||
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract] | |||||
Benefit Obligation | $ 704 | 698 | |||
Maximum amount of Postretirement benefit expensed | less than | less than | |||
Maximum amount of Postretirement benefit expensed | $ 100 | $ 100 | |||
Postretirement Benefits Canadian Employees [Member] | |||||
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract] | |||||
Benefit Obligation | $ 1,665 | 1,678 | |||
Maximum amount of Postretirement benefit expensed | less than | less than | |||
Maximum amount of Postretirement benefit expensed | $ 100 | $ 100 | |||
Canadian Plan [Member] | |||||
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract] | |||||
Companies contribution and expenses during the remainder of 2018 | 332 | 329 | |||
Us Internal Revenue Code [Member] | |||||
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract] | |||||
Companies contribution and expenses during the remainder of 2018 | $ 193 | 234 | |||
Deferred Compensation Plan [Member] | |||||
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract] | |||||
Deferred compensation plan description | The Company maintains a deferred compensation plan (“the Retirement Plan”) covering Greg Foster, CEO of IMAX Entertainment and Senior Executive Vice President of the Company. The Company has agreed to make a total contribution of $3.2 million pursuant to a schedule set forth in Mr. Foster’s employment agreement. The Retirement Plan is subject to a vesting schedule based on continued employment with the Company, and will vest in 25% increments on July 2 of 2019, 2022, 2025 and 2027, but will vest in full if Mr. Foster’s employment terminates under specified circumstances, including if the Company terminates his employment without cause, if he resigns for good reason, or if the Company does not offer to renew Mr. Foster’s employment on terms substantially similar to those set forth in his current employment agreement and, as a result, Mr. Foster incurs a separation from service. | ||||
Requisite employment term | 3 years | ||||
Vesting increments | 25.00% | ||||
Total contibution obligation over employment term | $ 3,200 | ||||
Unfunded benefit obligation recorded | $ 1,200 | $ 1,000 | |||
Compensation expense recognized | $ 200 | $ 300 |
Financial Instruments (Table 1)
Financial Instruments (Table 1) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | |
Other Financial Instrument | |||||
Cash and cash equivalents | $ 145,579 | $ 158,725 | $ 190,481 | $ 204,759 | |
Net financed sales receivable | 122,592 | 122,259 | |||
Net investment in sales-type leases | 7,182 | 7,235 | |||
Convertible loan receivable | 1,500 | ||||
Equity investment preferred shares | 1,500 | ||||
Foreign exchange contracts - designated forwards | 198 | 1,425 | |||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member] | |||||
Other Financial Instrument | |||||
Cash and cash equivalents | [1] | 145,579 | 158,725 | ||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member] | |||||
Other Financial Instrument | |||||
Net financed sales receivable | [2] | 122,592 | 122,259 | ||
Net investment in sales-type leases | [2] | 7,182 | 7,235 | ||
Convertible loan receivable | [2] | 1,500 | 1,500 | ||
Equity securities | [3] | 2,012 | 2,016 | ||
Borrowings under the Playa Vista Loan | [1] | (25,167) | (25,667) | ||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Designated as Hedging Instrument [Member] | Fair Value, Inputs, Level 2 [Member] | |||||
Other Financial Instrument | |||||
Foreign exchange contracts - designated forwards | [3] | 198 | 1,425 | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member] | |||||
Other Financial Instrument | |||||
Cash and cash equivalents | [1] | 145,579 | 158,725 | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member] | |||||
Other Financial Instrument | |||||
Net financed sales receivable | [2] | 122,828 | 122,918 | ||
Net investment in sales-type leases | [2] | 7,306 | 7,409 | ||
Convertible loan receivable | [2] | 1,500 | 1,500 | ||
Equity securities | [3] | 2,012 | 2,016 | ||
Borrowings under the Playa Vista Loan | [1] | (25,167) | (25,667) | ||
Estimate of Fair Value, Fair Value Disclosure [Member] | Designated as Hedging Instrument [Member] | Fair Value, Inputs, Level 2 [Member] | |||||
Other Financial Instrument | |||||
Foreign exchange contracts - designated forwards | [3] | $ 198 | $ 1,425 | ||
[1] | Recorded at cost, which approximates fair value. | ||||
[2] | Estimated based on discounting future cash flows at currently available interest rates with comparable terms. | ||||
[3] | Value determined using quoted prices in active markets. |
Financial Instruments (Table 2)
Financial Instruments (Table 2) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Recorded investment in financing receivables by credit quality indicator | ||
Minimum Lease Payments | $ 7,337 | $ 7,390 |
Financed Sales Receivables | 123,514 | 123,181 |
Total | 130,851 | 130,571 |
In Good Standing [Member] | ||
Recorded investment in financing receivables by credit quality indicator | ||
Minimum Lease Payments | 6,176 | 6,265 |
Financed Sales Receivables | 119,081 | 118,060 |
Total | 125,257 | 124,325 |
Credit Watch Member [Member] | ||
Recorded investment in financing receivables by credit quality indicator | ||
Minimum Lease Payments | 580 | 568 |
Financed Sales Receivables | 2,830 | 2,926 |
Total | 3,410 | 3,494 |
Pre-Approved Transactions [Member] | ||
Recorded investment in financing receivables by credit quality indicator | ||
Minimum Lease Payments | 581 | 557 |
Financed Sales Receivables | 548 | 1,003 |
Total | 1,129 | 1,560 |
Transactions Suspended [Member] | ||
Recorded investment in financing receivables by credit quality indicator | ||
Minimum Lease Payments | 0 | 0 |
Financed Sales Receivables | 1,055 | 1,192 |
Total | $ 1,055 | $ 1,192 |
Financial Instruments (Table 3)
Financial Instruments (Table 3) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investment In Financing Receivables On Nonaccrual Status | ||
Net investment in leases recorded investment | $ 0 | $ 0 |
Net investment in leases related allowance | 0 | 0 |
Net financed sales receivables recorded investment | 1,055 | 1,192 |
Net financed sales receivables related allowance | (922) | (922) |
Total recorded investment | 1,055 | 1,192 |
Total related allowance | $ (922) | $ (922) |
Financial Instruments (Table 4)
Financial Instruments (Table 4) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2016 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | $ 8,812 | $ 9,000 | ||||
Related Unbilled Recorded Investment | 122,039 | 121,571 | ||||
Total Recorded Investment | 130,851 | 130,571 | ||||
Related Allowances | (1,077) | (1,077) | ||||
Recorded Investment Net of Allowances | 129,774 | 129,494 | ||||
Financing Receivables Accrued and Current | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 2,628 | 3,388 | ||||
Financing Receivables 30 to 89 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 2,381 | 1,473 | ||||
Financing Receivables Equal To Greater Than 90 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 3,803 | 4,139 | ||||
Net Investment in Leases [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 680 | 553 | ||||
Related Unbilled Recorded Investment | 6,657 | 6,837 | ||||
Total Recorded Investment | 7,337 | 7,390 | ||||
Related Allowances | (155) | (155) | $ (155) | $ (672) | $ (672) | $ (672) |
Recorded Investment Net of Allowances | 7,182 | 7,235 | ||||
Net Investment in Leases [Member] | Financing Receivables Accrued and Current | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 110 | 103 | ||||
Net Investment in Leases [Member] | Financing Receivables 30 to 89 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 59 | 74 | ||||
Net Investment in Leases [Member] | Financing Receivables Equal To Greater Than 90 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 511 | 376 | ||||
Net Financed Sales Receivables [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 8,132 | 8,447 | ||||
Related Unbilled Recorded Investment | 115,382 | 114,734 | ||||
Total Recorded Investment | 123,514 | 123,181 | ||||
Related Allowances | (922) | (922) | $ (922) | $ (494) | $ (494) | $ (494) |
Recorded Investment Net of Allowances | 122,592 | 122,259 | ||||
Net Financed Sales Receivables [Member] | Financing Receivables Accrued and Current | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 2,518 | 3,285 | ||||
Net Financed Sales Receivables [Member] | Financing Receivables 30 to 89 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 2,322 | 1,399 | ||||
Net Financed Sales Receivables [Member] | Financing Receivables Equal To Greater Than 90 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 3,292 | 3,763 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 5,386 | 5,785 | ||||
Related Unbilled Recorded Investment | 27,830 | 29,717 | ||||
Related Allowances | 0 | 0 | ||||
Recorded Investment Net of Allowances | 33,216 | 35,502 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Financing Receivables Accrued and Current | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 730 | 1,233 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Financing Receivables 30 to 89 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 1,079 | 813 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Financing Receivables Equal To Greater Than 90 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 3,577 | 3,739 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Investment in Leases [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 655 | 514 | ||||
Related Unbilled Recorded Investment | 2,137 | 2,287 | ||||
Related Allowances | 0 | 0 | ||||
Recorded Investment Net of Allowances | 2,792 | 2,801 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Investment in Leases [Member] | Financing Receivables Accrued and Current | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 85 | 68 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Investment in Leases [Member] | Financing Receivables 30 to 89 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 59 | 70 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Investment in Leases [Member] | Financing Receivables Equal To Greater Than 90 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 511 | 376 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Financed Sales Receivables [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 4,731 | 5,271 | ||||
Related Unbilled Recorded Investment | 25,693 | 27,430 | ||||
Related Allowances | 0 | 0 | ||||
Recorded Investment Net of Allowances | 30,424 | 32,701 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Financed Sales Receivables [Member] | Financing Receivables Accrued and Current | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 645 | 1,165 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Financed Sales Receivables [Member] | Financing Receivables 30 to 89 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | 1,020 | 743 | ||||
Financing Receivables Continue To Accrue Finance Income [Member] | Net Financed Sales Receivables [Member] | Financing Receivables Equal To Greater Than 90 Days Past Due [Member] | ||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||
Billed Financing Receivables | $ 3,066 | $ 3,363 |
Financial Instruments (Table 5)
Financial Instruments (Table 5) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Net Investment in Leases [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment | $ 0 | $ 0 |
Unpaid Principal | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | 0 | 0 |
Net Financed Sales Receivables [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment | 1,050 | 525 |
Unpaid Principal | 5 | 75 |
Related Allowance | 922 | 494 |
Average Recorded Investment | 1,050 | 525 |
Interest Income Recognized | 0 | 0 |
With related allowance [Member] | Net Investment in Leases [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | 0 | 0 |
With related allowance [Member] | Net Financed Sales Receivables [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment | 1,050 | 525 |
Unpaid Principal | 5 | 75 |
Related Allowance | 922 | 494 |
Average Recorded Investment | 1,050 | 525 |
Interest Income Recognized | 0 | 0 |
Without related allowance [Member] | Net Investment in Leases [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | 0 | 0 |
Without related allowance [Member] | Net Financed Sales Receivables [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | $ 0 | $ 0 |
Financial Instruments (Table 6)
Financial Instruments (Table 6) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Allowance for credit losses: | ||
Beginning balance | $ 1,077 | |
Ending balance | 1,077 | |
Net Investment in Leases [Member] | ||
Allowance for credit losses: | ||
Beginning balance | 155 | $ 672 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | 0 | 0 |
Ending balance | 155 | 672 |
Ending balance: individually evaluated for impairment | 155 | 672 |
Financing receivables: | ||
Ending balance: individually evaluated for impairment | 7,337 | 8,480 |
Net Financed Sales Receivables [Member] | ||
Allowance for credit losses: | ||
Beginning balance | 922 | 494 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision | 0 | 0 |
Ending balance | 922 | 494 |
Ending balance: individually evaluated for impairment | 922 | 494 |
Financing receivables: | ||
Ending balance: individually evaluated for impairment | $ 123,514 | $ 113,176 |
Financial Instruments (Table 7)
Financial Instruments (Table 7) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member] | ||
Derivatives Fair Value [Line Items] | ||
Foreign exchange contracts - Forwards | $ 34,962 | $ 35,170 |
Financial Instruments (Table 8)
Financial Instruments (Table 8) (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Fair value of foreign exchange contracts | ||
Foreign exchange contracts - designated forwards | $ 198 | $ 1,425 |
Other Assets [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of foreign exchange contracts | ||
Derivative Asset, Fair Value | 497 | 1,447 |
Accrued and other liabilities [Member] | Designated as Hedging Instrument [Member] | ||
Fair value of foreign exchange contracts | ||
Derivative Liability, Fair Value | $ (299) | $ (22) |
Financial Instruments (Table 9)
Financial Instruments (Table 9) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Derivatives in Foreign Currency Hedging relationships | ||
Derivative (Loss) Gain Recognized in OCI (Effective Portion) | $ (1,007) | $ 313 |
Location of Derivative Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 220 | (285) |
Derivative (Gain) Loss Recognized In and Out of OCI (Effective Portion) | 46 | (47) |
Selling, general and administrative expenses [Member] | ||
Derivatives in Foreign Currency Hedging relationships | ||
Location of Derivative Gain (Loss) Reclassified from AOCI into Income (Effective Portion) | 220 | (285) |
Fair Value Hedging [Member] | ||
Derivatives in Foreign Currency Hedging relationships | ||
Derivative (Loss) Gain Recognized in OCI (Effective Portion) | $ (1,007) | $ 313 |
Financial Instruments (Narrativ
Financial Instruments (Narratives) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)Countries | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Financial Instruments (Textuals) [Abstract] | |||
Transfers between Level 1 and Level 2 | $ 0 | $ 0 | |
Transfers into/out of Level 3 | $ 0 | ||
Financing receivables indications of theaters with potential collection concerns | 60-89 days | ||
Financing receivables indications of theaters to review and assess | Once a theater’s aging exceeds 90 days, the Company’s policy is to review and assess collectibility on the theat | ||
Financing receivables indications of theaters with potential impairment | 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 | ||
Number of countries that generate box office | Countries | 77 | ||
Foreign Exchange contract settlement date range | Settlement dates throughout 2018 and 2019 | ||
Estimated gain to be reclassified to earnings within the next twelve months | $ 400 | ||
Financial Instruments Additional (Textuals) [Abstract] | |||
Total carrying value of investments in new business ventures | $ 3,500 | $ 3,500 | |
Convertible loan receivable | $ 1,500 | ||
Convertible loan effective interest rate | 5.00% | ||
Convertible loan receivable due date | Sep. 26, 2019 | ||
Schedule of Equity Investment [Line Items] | |||
Equity Investment, Debt Securities | $ 1,500 | ||
Investment classified as equity security - fair value | 0 | $ 0 | |
Variable Interest Entity, Not Primary Beneficiary [Member] | Equity Accounted Investment [Member] | |||
Financial Instruments Additional (Textuals) [Abstract] | |||
Carrying value of investments accounted for under the equity method of accounting | 0 | 0 | |
Gross revenues of investment new business ventures | 500 | 200 | |
Cost of revenue of investment new business ventures | 900 | 900 | |
Net loss on equity-accounted investments | 600 | $ 700 | |
Equity method investment, difference between carrying amount and underlying equity | 2,100 | ||
Other Debt Securities [Member] | |||
Schedule of Equity Investment [Line Items] | |||
Investment classified as equity security - cost | 3,500 | ||
Investment classified as equity security - fair value | 1,000 | 1,000 | |
Fixed Income Securities [Member] | |||
Schedule of Equity Investment [Line Items] | |||
Investment classified as equity security - cost | $ 1,000 | $ 1,000 |
Non-Controlling Interests (Ta94
Non-Controlling Interests (Table 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Non-controlling Interests | ||
Retained earnings impact resulting from the adoption of ASC Topic 606, Revenue from Contracts with Customers | $ 27,571 | |
Issuance of subsidiary shares to non-controlling interests | 4,449 | $ 0 |
Net income (loss) | 3,562 | $ (962) |
IMAX China Noncontrolling Interest | ||
Non-controlling Interests | ||
Balance as at December 31, 2017 | 74,511 | |
Retained earnings impact resulting from the adoption of ASC Topic 606, Revenue from Contracts with Customers | 377 | |
Net income (loss) | 3,893 | |
Other comprehensive income | 658 | |
Balance as at March 31, 2018 | 79,439 | |
Other Noncontrolling Interest [Member] | ||
Non-controlling Interests | ||
Balance as at December 31, 2017 | 1,353 | |
Issuance of subsidiary shares to non-controlling interests | 4,449 | |
Net income (loss) | (331) | |
Balance as at March 31, 2018 | $ 5,471 |
Non-Controlling Interests (Narr
Non-Controlling Interests (Narratives) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2014USD ($)yrFilm | |
Redeemable Noncontrolling Interest [Line Items] | |||
Investment in film assets | $ (6,259) | $ (3,334) | |
IMAX China Noncontrolling Interest | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Minority Interest Ownership Percentage By Company | 67.93% | ||
Other Noncontrolling Interest [Member] | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Non-controlling interest description | The Company’s Original Film Fund was established in 2014 to co-finance a portfolio of 10 original large-format films. The initial investment in the Original 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 agreed to contribute $9.0 million to the Original Film Fund over five years starting in 2014 and sees the Original Film Fund as a self-perpetuating vehicle designed to generate a continuous, steady flow of high-quality documentary content. The Company also established its VR Fund among the Company, its subsidiary IMAX China and other strategic investors. The VR Fund will help finance the creation of interactive VR content experiences over the next three years for use across all VR platforms, including in the pilot IMAX VR Centers. | ||
Number Of Expected Original Films | Film | 10 | ||
Film Fund Expected Capital Contribution | $ 25,000 | ||
Investment in film assets | $ 15,500 | ||
Investment in content | $ 4,000 | ||
Other Noncontrolling Interest [Member] | IMAX [Member] | |||
Redeemable Noncontrolling Interest [Line Items] | |||
Film Fund commitment amount | $ 9,000 | ||
Contribution Period | yr | 5 |
Exit costs Restructuring and 96
Exit costs Restructuring and Associated Impairments (Table 1) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring costs and reserves [Line Items] | ||
Restructuring charges | $ 702 | $ 0 |
Other Exit Costs | $ 0 | |
IMAX DMR [Member] | ||
Restructuring costs and reserves [Line Items] | ||
Restructuring charges | 380 | |
Corporate Segment [Member] | ||
Restructuring costs and reserves [Line Items] | ||
Restructuring charges | 200 | |
Theater system maintenance [Member] | ||
Restructuring costs and reserves [Line Items] | ||
Restructuring charges | $ 122 |
Exit costs Restructuring and 97
Exit costs Restructuring and Associated Impairments (Table 2) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Restructuring costs and reserves [Line Items] | ||
Restructuring charges | $ 702 | $ 0 |
Other Exit Costs [Member] | ||
Restructuring costs and reserves [Line Items] | ||
Balance as at December 31, 2017 | 2,221 | |
Restructuring charges | 702 | |
Cash payments | (1,393) | |
Balance as at March 31, 2018 | $ 1,530 |
Exit costs Restructuring and 98
Exit costs Restructuring and Associated Impairments (Narratives) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Exit costs restructuring and associated impairments [Abstract] | ||
Restructuring charges incurred | $ 700 | $ 0 |
Future expected restructuring charges | 400 | |
Business exit costs or associated impairments | $ 0 |