10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2016

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file Number 001-35066

IMAX Corporation

(Exact name of registrant as specified in its charter)

Canada	98-0140269
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
2525 Speakman Drive, Mississauga, Ontario, Canada L5K 1B1 (905) 403-6500	110 E. 59th Street, Suite 2100 New York, New York, USA 10022 (212) 821-0100
(Address of principal executive offices, zip code, telephone numbers)

Securities registered pursuant to Section 12(b) of the Act:

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

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of class)

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

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

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting Company	☐

Indicate by check mark whether the registrant is a shell Company (as defined in Rule 12b-2 of the Act).    Yes  ☐    No  ☒

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

Class	Outstanding as of September 30, 2016
Common stock, no par value	66,813,963

IMAX CORPORATION

Table of Contents

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements		4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		44
Item 3.	Quantitative and Qualitative Factors about Market Risk		74
Item 4.	Controls and Procedures		75
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		76
Item 1A.	Risk Factors		76
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		76
Item 6.	Exhibits		76
Signatures			77

2

SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements included in this quarterly report may constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, plans and references to the future success of IMAX Corporation together with its consolidated subsidiaries (the “Company”) and expectations regarding the Company’s future operating, financial and technological results. These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with the expectations and predictions of the Company is subject to a number of risks and uncertainties, including, but not limited to, the signing of theater system agreements; conditions, changes and developments in the commercial exhibition industry; the performance of IMAX DMR films; the potential impact of increased competition in the markets within which the Company operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks associated with investments and operations in foreign jurisdictions and any future international expansion, including those related to economic, political and regulatory policies of local governments and laws and policies of the United States and Canada; risks related to the Company’s growth and operations in China; the Company’s largest customer accounting for a significant portion of the Company’s revenue and backlog; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security; risks related to the Company’s inability to protect its intellectual property; risks related to the Company’s implementation of a new enterprise resource planning system; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made in this quarterly report are qualified by these cautionary statements, and actual results or anticipated developments by the Company may not be realized, and even if substantially realized, may not have the expected consequences to, or effects on, the Company. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information, whether as a result of new information, future events or otherwise.

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

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IMAX CORPORATION

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

	Page
The following unaudited Condensed Consolidated Financial Statements are filed as part of this Report:
Condensed Consolidated Balance Sheets as at September  30, 2016 and December 31, 2015		5
Condensed Consolidated Statements of Operations for the three and nine month periods ended September 30, 2016 and 2015		6
Condensed Consolidated Statements of Comprehensive Income for the three and nine month periods ended September 30, 2016 and 2015		7
Condensed Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2016 and 2015		8
Notes to Condensed Consolidated Financial Statements		9

4

IMAX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)

(Unaudited)

	September 30, 2016			December 31, 2015
Assets
Cash and cash equivalents	$	218,104		$	317,449
Accounts receivable, net of allowance for doubtful accounts of $1,026 (December 31, 2015 — $1,146)		89,247			97,981
Financing receivables		118,897			117,231
Inventories		51,015			38,753
Prepaid expenses		11,603			6,498
Film assets		15,165			14,571
Property, plant and equipment		233,984			218,267
Other assets		26,419			26,136
Deferred income taxes		26,233			26,666
Other intangible assets		29,605			28,950
Goodwill		39,027			39,027
Total assets	$	859,299		$	931,529
Liabilities
Bank indebtedness	$	27,806		$	29,276
Accounts payable		16,733			23,455
Accrued and other liabilities		90,485			95,748
Deferred revenue		97,220			104,993
Total liabilities		232,244			253,472
Commitments and contingencies
Non-controlling interests		2,693			3,307
Shareholders’ equity
Capital stock common shares — no par value. Authorized — unlimited number. 66,813,963 — issued and 66,813,787 — outstanding (December 31, 2015 — 69,673,244 — issued and outstanding)		435,829			448,310
Less: Treasury stock held in trust, 176 shares at cost		(6	)		—
Other equity		180,358			168,425
Accumulated (deficit) earnings		(43,816	)		15,499
Accumulated other comprehensive loss		(4,562	)		(7,443	)
Total shareholders’ equity attributable to common shareholders		567,803			624,791
Non-controlling interests		56,559			49,959
Total shareholders’ equity		624,362			674,750
Total liabilities and shareholders’ equity	$	859,299		$	931,529

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

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IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except per share amounts)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Revenues
Equipment and product sales	$	30,835		$	33,083		$	81,064		$	72,824
Services		37,195			33,024			122,853			115,698
Rentals		16,007			16,665			58,538			59,006
Finance income		2,288			2,329			6,991			6,803
Other		225			—			975			141
		86,550			85,101			270,421			254,472
Costs and expenses applicable to revenues
Equipment and product sales		15,690			21,949			49,075			43,010
Services		20,393			15,899			58,517			50,201
Rentals		5,504			4,864			15,367			13,856
Other		64			—			110			—
		41,651			42,712			123,069			107,067
Gross margin		44,899			42,389			147,352			147,405
Selling, general and administrative expenses (including share-based compensation expense of $7.7 million and $22.5 million for the three and nine months ended September 30, 2016, respectively (2015 - expense of $4.3 million and $14.9 million, respectively))		30,686			24,973			92,706			82,348
Research and development		4,460			2,722			11,603			9,611
Amortization of intangibles		531			429			1,537			1,302
Receivable provisions, net of recoveries		275			361			631			709
Asset impairments		1,223			245			1,223			245
Impairment of investments		—			—			194			350
Income from operations		7,724			13,659			39,458			52,840
Interest income		370			222			1,217			727
Interest expense		(469	)		(463	)		(1,325	)		(1,170	)
Income from operations before income taxes		7,625			13,418			39,350			52,397
Provision for income taxes		(2,551	)		(2,477	)		(9,635	)		(12,408	)
Loss from equity-accounted investments, net of tax		(690	)		(427	)		(2,471	)		(1,610	)
Net income		4,384			10,514			27,244			38,379
Less: net income attributable to non-controlling interests		(1,859	)		(1,904	)		(7,401	)		(5,028	)
Net income attributable to common shareholders	$	2,525		$	8,610		$	19,843		$	33,351
Net income per share attributable to common shareholders - basic and diluted:
Net income per share - basic	$	0.04		$	0.12		$	0.29		$	0.47
Net income per share - diluted	$	0.04		$	0.12		$	0.29		$	0.46

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

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IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands of U.S. dollars)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income	$	4,384		$	10,514		$	27,244		$	38,379
Unrealized net (loss) gain from cash flow hedging instruments		(293	)		(2,309	)		1,865			(4,983	)
Realization of cash flow hedging net loss upon settlement		572			1,045			2,565			2,196
Foreign currency translation adjustments		(452	)		(992	)		(1,849	)		(1,162	)
Amortization of postretirement benefit plan actuarial loss		17			—			51			—
Other comprehensive (loss) income, before tax		(156	)		(2,256	)		2,632			(3,949	)
Income tax (expense) benefit related to other comprehensive (loss) income		(77	)		558			(1,166	)		996
Other comprehensive (loss) income, net of tax		(233	)		(1,698	)		1,466			(2,953	)
Comprehensive income		4,151			8,816			28,710			35,426
Less: Comprehensive income attributable to non-controlling interests		(1,717	)		(2,056	)		(5,986	)		(5,192	)
Comprehensive income attributable to common shareholders	$	2,434		$	6,760		$	22,724		$	30,234

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

7

IMAX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands of U.S. dollars)

(Unaudited)

	Nine Months Ended September 30,
	2016			2015
Cash provided by (used in):
Operating Activities
Net income	$	27,244		$	38,379
Adjustments to reconcile net income to cash from operations:
Depreciation and amortization		34,179			31,191
Write-downs, net of recoveries		2,903			2,928
Change in deferred income taxes		(517	)		5,097
Stock and other non-cash compensation		22,896			15,204
Unrealized foreign currency exchange (gain) loss		(206	)		716
Loss from equity-accounted investments		2,769			2,756
Gain on non-cash contribution to equity-accounted investees		(298	)		(1,146	)
Investment in film assets		(14,162	)		(12,069	)
Changes in other non-cash operating assets and liabilities		(29,504	)		(41,033	)
Net cash provided by operating activities		45,304			42,023
Investing Activities
Purchase of property, plant and equipment		(10,033	)		(38,443	)
Investment in joint revenue sharing equipment		(25,524	)		(20,969	)
Investment in new business ventures		—			(2,000	)
Acquisition of other intangible assets		(2,931	)		(3,622	)
Net cash used in investing activities		(38,488	)		(65,034	)
Financing Activities
Increase in bank indebtedness		—			17,568
Repayment of bank indebtedness		(1,500	)		—
Repurchase of common shares		(100,378	)		(34,279	)
Settlement of restricted share units and options		(8,376	)		(7,859	)
Common shares issued - stock options exercised		7,196			23,838
Taxes paid on secondary sale and repatriation dividend		(2,991	)		—
Taxes withheld and paid on employee stock awards vested		(230	)		(223	)
Treasury stock purchased for future settlement of restricted share units		(6	)		(2,141	)
Credit facility amendment fees paid		—			(1,310	)
Issuance of subsidiary shares to non-controlling interests - private offering		—			40,000
Share issuance costs from the issuance of subsidiary shares to non-controlling interests - private offering		—			(2,000	)
Net cash (used in) provided by financing activities		(106,285	)		33,594
Effects of exchange rate changes on cash		124			275
(Decrease) increase in cash and cash equivalents during period		(99,345	)		10,858
Cash and cash equivalents, beginning of period		317,449			106,503
Cash and cash equivalents, end of period	$	218,104		$	117,361

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

8

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”).

The 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 11 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. These consolidated production companies have total assets of $8.4 million (December 31, 2015 — $7.2 million) and total liabilities of $4.1 million as at September 30, 2016 (December 31, 2015 — $4.1 million). The majority of these consolidated assets are held by the IMAX Original Film Fund (the “Film Fund”) as described in note 16(b). For the other six film production companies which are VIEs, the Company did not consolidate these film entities since it does not have the power to direct activities and does not absorb the majority of the expected losses or expected residual returns. The Company equity accounts for these entities. As at September 30, 2016, these six VIEs have total assets of $0.4 million (December 31, 2015 — $0.4 million) and total liabilities of $0.4 million (December 31, 2015 — $0.4 million). Earnings of the investees included in the Company’s condensed consolidated statements of operations amounted to $nil and $nil for the three and nine months ended September 30, 2016, respectively (2015 — $nil and $nil, respectively). The carrying value of these investments in VIEs that are not consolidated is $nil at September 30, 2016 (December 31, 2015 — $nil). A loss in value of an investment other than a temporary decline is recognized as a charge to the condensed consolidated statements of operations. The Company’s exposure, which is determined based on the level of funding contributed by the Company and the development stage of the respective film, is $nil at September 30, 2016 (December 31, 2015 — $nil).

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

All 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 2015 Annual Report on Form 10-K for the year ended December 31, 2015 (“the 2015 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, 2015, except as noted below.

9

2. New Accounting Standards and Accounting Changes

Adoption of New Accounting Policies

In January 2015, the FASB issued ASU No. 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). Prior to the changes under ASU 2015-01, an entity was required to separately classify, present and disclose extraordinary events and transactions under the disclosure requirements of Subtopic 225-20, “Income Statement – Extraordinary and Unusual Items” (“Subtopic 225-20”). ASU 2015-01 eliminates from U.S. GAAP the concept of extraordinary items therefore such separate disclosure is no longer required in the Income Statement of an entity. For public companies, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments can be applied prospectively or retrospectively. The Company prospectively adopted the amendments under ASU 2015-01 on January 1, 2016. The adoption of the standard did not have an impact on the disclosures presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015, respectively.

In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”). ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities such as limited partnerships and similar entities, and variable interest entities that have free arrangements and related party relationships. Furthermore, all legal entities are subject to re-evaluation under the revised consolidation model. The amendments also provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. For public companies, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments can be applied retrospectively or using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. The Company adopted the amendments under ASU 2015-02 retrospectively on January 1, 2016. The adoption of the standard did not have an impact on the Company’s condensed consolidated financial statements as there was no change to the entities currently consolidated by the Company.

In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), and in August 2015 issued ASU No. 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”). Under ASU 2015-03, debt issuance costs reported on the balance sheet will be reflected as a direct deduction from the related debt liability rather than as an asset. While ASU 2015-03 addresses costs related to term debt, ASU 2015-15 provides clarification regarding costs to secure revolving lines of credit, which are, at the outset, not associated with an outstanding borrowing. ASU 2015-15 provides commentary that the U.S Securities and Exchange Commission (“SEC”) staff would not object to an entity deferring and presenting costs associated with line-of-credit arrangements as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. For public companies, the amendments apply to annual periods beginning on or after December 15, 2015, and interim periods within those years and are to be applied retrospectively. The Company adopted these standards on January 1, 2016. As at December 31, 2015, $0.4 million of unamortized debt issuance costs related to the Company’s loan to finance the construction of its Playa Vista facility were reclassified in the condensed consolidated balance sheet from Other assets to Bank indebtedness. The Company will continue to defer and present the debt issuance cost related to its senior secured revolving credit facility in Other assets and amortize it ratably over the term of the agreement.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. ASU 2016-09 requires that the Company elect to account for forfeitures based on an estimate of the number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. The Company elected to early adopt ASU 2016-09 during the second quarter of 2016 and to account for forfeitures as they occur. The impact from the adoption of the provisions related to forfeiture rates was reflected in the Company’s condensed consolidated financial statements on a modified retrospective basis resulting in a balance sheet reclass of $4.4 million decrease to Accumulated earnings, $0.9 million increase to Deferred income taxes and $5.3 million increase to Other equity. A recovery of stock-based compensation expense of $2.7 million for the nine month period ended September 30, 2016 was also recorded. Amendments related to accounting for excess tax benefits have been adopted prospectively resulting in a tax benefit of $0.1 million for the nine months ended September 30, 2016, and amendments related to the condensed consolidated statement of cash flows have been adopted

10

retrospectively. See Notes 11 and 12 for further discussion of the impact on the Company’s condensed consolidated financial statements from the adoption of ASU 2016-09.

Recently Issued FASB Accounting Standard Codification Updates

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The purpose of the amendment is intended to provide users of financial statements with more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. For public entities, the amendments in ASU 2016-01 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-01 on its condensed consolidated financial statements.

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. The Company is currently assessing the impact of ASU 2016-02 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”). The amendments in ASU 2016-05 apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The amendments clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. For public entities, the amendments in ASU 2016-05 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-05 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting” (“ASU 2016-07”). The purpose of the amendment is to eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by step basis as if the equity method had been in effect during all previous periods that the investment had been held. For public entities, the amendments in ASU 2016-07 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-07 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” (“ASU 2016-08”). The purpose of ASU 2016-08 is to clarify the implementation of guidance on principal versus agent considerations. For public entities, the amendments in ASU 2016-08 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-08 on its condensed consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”). The purpose of ASU 2016-10 is to provide more detailed guidance in the following key areas: identifying performance obligations and licenses of intellectual property. For public entities, the amendments in ASU 2016-10 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-10 on its condensed consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 pursuant to Staff announcements at the March 3, 2016 EITF Meeting” (“ASU 2016-11”). The purpose of ASU 2016-11 is to rescind from the FASB Accounting Standards Codification certain SEC paragraphs as a result of two SEC Staff Announcements at the March 3, 2016 meeting. For public entities, the amendments in ASU 2016-11 related to Topic 605 are effective for interim and annual reporting periods beginning after December 15, 2017 and amendments related to Topic 815 are effective for interim and annual reporting periods beginning after December 15,

11

2015. The Company is currently assessing the impact of ASU 2016-11 related to topic 605 on its condensed consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 660): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”). The purpose of ASU 2016-12 is to clarify certain narrow aspects of Topic 660 such as assessing the collectibility criterion, presentation of sales taxes and other similar taxes collected from customers, noncash consideration, contract modifications at transition, completed contracts at transition, and technical correction. For public entities, the amendments in ASU 2016-12 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-12 on its condensed consolidated financial statements.

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 August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The purpose of ASU 2016-15 is to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. For public entities, the amendments in ASU 2016-15 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-15 on its condensed consolidated financial statements.

Recently issued FASB accounting standard codification updates, except for the above noted standards, were not material to the Company’s condensed consolidated financial statements for the period ended September 30, 2016.

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3. Financing Receivables

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

	September 30,			December 31,
	2016			2015
Gross minimum lease payments receivable	$	11,341		$	13,998
Unearned finance income		(1,826	)		(2,381	)
Minimum lease payments receivable		9,515			11,617
Accumulated allowance for uncollectible amounts		(672	)		(672	)
Net investment in leases		8,843			10,945
Gross financed sales receivables		148,358			146,232
Unearned finance income		(37,661	)		(39,378	)
Financed sales receivables		110,697			106,854
Accumulated allowance for uncollectible amounts		(643	)		(568	)
Net financed sales receivables		110,054			106,286
Total financing receivables	$	118,897		$	117,231
Net financed sales receivables due within one year	$	21,260		$	19,068
Net financed sales receivables due after one year	$	88,794		$	87,218

As at September 30, 2016, the financed sale receivables had a weighted average effective interest rate of 9.2% (December 31, 2015 — 9.4%).

4. Inventories

	September 30,		December 31,
	2016		2015
Raw materials	$	32,662	$	25,750
Work-in-process		4,215		2,628
Finished goods		14,138		10,375
	$	51,015	$	38,753

At September 30, 2016, finished goods inventory for which title had passed to the customer and revenue was deferred amounted to $5.1 million (December 31, 2015 — $5.4 million).

During the three and nine months ended September 30, 2016, the Company had write-downs for excess and obsolete inventory based upon current estimates of net realizable value considering future events and conditions of a recovery of less than $0.1 million and an expense of $0.2 million, respectively (2015 — recovery of $0.1 million and expense of $0.4 million, respectively).

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5. Property Plant and Equipment

	As at September 30, 2016
			Accumulated		Net Book
	Cost		Depreciation		Value
Equipment leased or held for use
Theater system components	$	216,670	$	86,219	$	130,451
Camera equipment		5,902		3,750		2,152
		222,572		89,969		132,603
Assets under construction		14,890		—		14,890
Other property, plant and equipment
Land		8,203		—		8,203
Buildings		68,974		14,306		54,668
Office and production equipment		40,587		21,237		19,350
Leasehold improvements		7,159		2,889		4,270
		124,923		38,432		86,491
	$	362,385	$	128,401	$	233,984
	As at December 31, 2015
			Accumulated		Net Book
	Cost		Depreciation		Value
Equipment leased or held for use
Theater system components	$	199,974	$	74,568	$	125,406
Camera equipment		5,393		3,368		2,025
		205,367		77,936		127,431
Assets under construction		9,616		—		9,616
Other property, plant and equipment
Land		8,203		—		8,203
Buildings		67,150		12,679		54,471
Office and production equipment		34,396		17,035		17,361
Leasehold improvements		3,512		2,327		1,185
		113,261		32,041		81,220
	$	328,244	$	109,977	$	218,267

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6. Other Intangible Assets

	As at September 30, 2016
			Accumulated		Net Book
	Cost		Amortization		Value
Patents and trademarks	$	11,181	$	6,928	$	4,253
Licenses and intellectual property		22,490		7,295		15,195
Other		14,023		3,866		10,157
	$	47,694	$	18,089	$	29,605
	As at December 31, 2015
			Accumulated		Net Book
	Cost		Amortization		Value
Patents and trademarks	$	10,399	$	6,502	$	3,897
Licenses and intellectual property		22,390		6,464		15,926
Other		11,878		2,751		9,127
	$	44,667	$	15,717	$	28,950

Other intangible assets of $14.0 million are comprised mainly of the Company’s investment in an enterprise resource planning system. Fully amortized other intangible assets are still in use by the Company.

During the nine months ended September 30, 2016, the Company acquired $3.2 million in other intangible assets. The weighted average amortization period for these additions was 10 years.

During the three and nine months ended September 30, 2016, the Company incurred costs of less than $0.1 million and $0.2 million, respectively, to renew or extend the term of acquired other intangible assets which were recorded in selling, general and administrative expenses (2015 – less than $0.1 million and less than $0.1 million, respectively).

As at September 30, 2016, estimated amortization expense for each of the years ended December 31, are as follows:

2016 (three months remaining)	$	858
2017		3,270
2018		3,270
2019		3,270
2020		3,270

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7. Credit Facility and Playa Vista Loan

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

The terms of the Credit Facility are set forth in the Fourth Amended and Restated Credit Agreement (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 (Wells Fargo, together with the lenders named therein, the “Lenders”) and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner and in various collateral and security documents entered into by the Company and the Guarantors. Each of the Guarantors has also entered into a guarantee in respect of the Company’s obligations under the Credit Facility. On February 22, 2016, the Company amended the terms of the Credit Agreement to increase the general restricted payment basket thereunder (which covers, among other things, the repurchase of shares) from $150.0 million to $350.0 million in the aggregate after the amendment date.

The Company was in compliance with all of its requirements at September 30, 2016.

Total amounts drawn and available under the Credit Facility at September 30, 2016 were $nil and $200.0 million, respectively (December 31, 2015 — $nil and $200.0 million, respectively).

As at September 30, 2016, the Company did not have any letters of credit and advance payment guarantees outstanding (December 31, 2015 — $nil), under the Credit Facility.

Playa Vista Financing

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

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

On October 19, 2015, PV Borrower converted the Playa Vista Construction Loan from a construction loan into a permanent loan (“Playa Vista Loan”) pursuant to the terms of the loan documents. Pursuant to the conversion, PV Borrower increased the principal balance of the loan by an additional $7.7 million, to $30.0 million. Prior to the conversion, the Playa Vista Construction Loan bore interest at a variable interest rate per annum equal to 2.25% above the 30-day LIBOR rate, and PV Borrower was required to make monthly payments of interest only. However, as a result of the conversion, the interest rate decreased from 2.25% to 2.0% above the 30-day LIBOR rate, and PV Borrower will be required to make monthly payments of combined principal and interest over a 10-year term with a lump sum payment at the end of year 10. The 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, granting a first lien on and security interest in the Playa Vista property and the Playa Vista Project, including all improvements to be constructed thereon, and other documents evidencing and securing the loan (the “Loan Documents”). The Loan Documents include absolute and unconditional payment and completion guarantees provided by the Company to Wells Fargo for the performance by PV Borrower of all the terms and provisions of the Playa Vista Loan and an environmental indemnity also provided by the Company.

The Loan Documents contain affirmative, negative and financial covenants (including compliance with the financial covenants of the Company’s outstanding revolving senior secured facility with Wells Fargo), agreements, representations, warranties, borrowing conditions, and events of default customary for development projects such as the Playa Vista Project.

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Bank indebtedness includes the following:

	September 30,			December 31,
	2016			2015
Playa Vista Loan	$	28,167		$	29,667
Deferred charges on debt financing		(361	)		(391	)
	$	27,806		$	29,276

Total amounts drawn under the loan at September 30, 2016 was $28.2 million (December 31, 2015 — $29.7 million). The effective interest rate for the three and nine months ended September 30, 2016 was 2.51% and 2.46%, respectively (2015 — 2.45% and 2.44%, respectively).

In accordance with the loan agreement, the Company is obligated to make payments on the principal of the loan as follows:

2016 (three months remaining)	$	500
2017		2,000
2018		2,000
2019		2,000
2020		2,000
Thereafter		19,667
	$	28,167

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 September 30, 2016 as the fair value exceeded the notional value of the forward contracts. As at September 30, 2016, the Company has $26.9 million in notional value of such arrangements outstanding.

Bank of Montreal Facility

As at September 30, 2016, the Company has available a $10.0 million facility (December 31, 2015 — $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 September 30, 2016, the Company has letters of credit and advance payment guarantees outstanding of $0.1 million (December 31, 2015 — $0.3 million) under the Bank of Montreal Facility.

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8. 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.

(a) 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 and other fees under the license and consulting agreements. Discovery is currently ongoing and a final hearing before the ICDR has been scheduled for the week of July 10, 2017. Given the stage of discovery, the Company is unable to determine a range of potential damages in this matter. However, the Company believes that the amount of loss, if any, 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.

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

(c) In March 2013, IMAX (Shanghai) Multimedia Technology Co., Ltd., the Company’s majority-owned subsidiary in China, received notice from the Shanghai office of the General Administration of Customs that it had been selected for a customs audit. In the third quarter of 2016 IMAX (Shanghai) Multimedia Technology Co., Ltd put forth a proposal to the Shanghai office of the General Administration of Customs in an attempt to resolve the audit issue of what costs should be subject to duties and taxes on importation into China. As a result of the proposal, the Company has accrued $1.6 million as at September 30, 2016, of which $0.8 million is recorded in costs and expenses applicable to revenues and $0.8 million is recorded in property, plant and equipment. An additional $1.8 million will be paid to the authorities as

18

value-added tax, which local management believes is collectible in the form of future input tax credits, and therefore has been presented as a net balance of $nil in Accrued and other liabilities as at September 30, 2016. The Company is unable to assess any other potential impact of the customs audit, if any, at this time.

(d) 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. Giencourt submitted its statement of claim in January 2015, the Company submitted its statement of defense and counterclaim in April 2015 and Giencourt submitted its arbitration reply paper in September 2015. 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 seeks to recover from the Company. The Company has asserted a counterclaim against Giencourt for breach of contract and seeks to recover lost profits in excess of $24.0 million under the agreements. A final hearing with closing statements is scheduled for October 20 and 21, 2016. In addition, on December 10, 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 Company strongly disputes that discussions about a potential resolution of this matter amounted to an enforceable settlement. The panel has asked the parties to brief this issue, and oral arguments will be held during the upcoming October hearings. Although no assurances can be given with respect to the ultimate outcome of the proceedings, the Company believes that it has meritorious defenses and claims, and will continue to vigorously pursue them.

(e) 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.

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

	September 30,		December 31,
	2016		2015
Balance at the beginning of period	$	—	$	6
Warranty redemptions		—		(6	)
Warranties issued		15		—
Revisions		—		—
Balance at the end of period	$	15	$	—

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 sheet as at September 30, 2016 and December 31, 2015 with respect to this indemnity.

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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.

9. Condensed Consolidated Statements of Operations Supplemental Information

(a) 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 $1.3 million and $3.0 million for the three and nine months ended September 30, 2016, respectively (2015 — $1.3 million and $2.8 million, respectively).

Film exploitation costs, including advertising and marketing, totaled $4.8 million and $13.8 million for the three and nine months ended September 30, 2016, respectively (2015 — $3.4 million and $8.2 million, respectively) and are recorded in costs and expenses applicable to revenues-services as incurred.

Commissions are recognized as costs and expenses applicable to revenues-rentals in the month they are earned. These costs totaled $0.6 million and $0.9 million for the three and nine months ended September 30, 2016, respectively (2015 —$0.3 million and $0.5 million, respectively). Direct advertising and marketing costs for each theater are charged to costs and expenses applicable to revenues-rentals as incurred. These costs totaled an expense of $0.4 million and $1.0 million for the three and nine months ended September 30, 2016, respectively (2015 —$0.6 million and $1.2 million, respectively).

(b) Foreign Exchange

Included in selling, general and administrative expenses for the three and nine months ended September 30, 2016 is a loss of $0.2 million and a loss of $0.1 million, respectively (2015 — loss of $0.5 million and a loss of $1.5 million, respectively), for net foreign exchange gains/losses related to the translation of foreign currency denominated monetary assets and liabilities. See note 15(d) for additional information.

(c) 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.

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The Company has signed joint revenue sharing agreements with 49 exhibitors for a total of 981 theater systems, of which 592 theaters were operating as at September 30, 2016, the terms of which are similar in nature, rights and obligations. The accounting policy for the Company’s joint revenue sharing arrangements is disclosed in note 2(m) of the Company’s 2015 Form 10-K.

Amounts attributable to transactions arising between the Company and its customers under joint revenue sharing arrangements are included in Equipment and Product Sales and Rentals revenue and for the three and nine months ended September 30, 2016 amounted to $19.7 million and $66.9 million, respectively (2015 — $19.8 million and $67.3 million, respectively).

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 net box-office receipts of the film, which in recent years has ranged from 10-15%. The Company does not typically hold distribution rights or the copyright to these films.

For the nine months ended September 30, 2016, the majority of IMAX DMR revenue was earned from the exhibition of 48 IMAX DMR films (2015 – 48) throughout the IMAX theater network. The accounting policy for the Company’s IMAX DMR arrangements is disclosed in note 2(m) of the Company’s 2015 Form 10-K.

Amounts attributable to transactions arising between the Company and its customers under IMAX DMR arrangements are included in Services revenue and for the three and nine months ended September 30, 2016 amounted to $21.6 million and $78.8 million, respectively (2015 — $20.9 million and $75.1 million, respectively).

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.

The accounting policies relating to co-produced film arrangements are disclosed in notes 2(a) and 2(m) of the Company’s 2015 Form 10-K.

As at September 30, 2016, the Company has one significant co-produced film arrangement which represents the VIE total assets balance of $0.4 million and total liabilities balance of $0.4 million and five other co-produced film arrangements, the terms of which are similar.

For the three and nine months ended September 30, 2016, amounts totaling $0.5 million and $1.0 million, respectively (2015 — $0.3 million and $1.4 million, respectively) attributable to transactions between the Company and other parties involved in the production of the films have been included in cost and expenses applicable to revenues-services.

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10. Condensed Consolidated Statements of Cash Flows Supplemental Information

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

	Nine Months Ended
	September 30,
	2016			2015
Decrease (increase) in:
Accounts receivable	$	6,571		$	(12,048	)
Financing receivables		(1,145	)		(9,932	)
Inventories		(12,508	)		(18,904	)
Prepaid expenses		(5,105	)		(2,159	)
Commissions and other deferred selling expenses		285			(206	)
Insurance recoveries		132			28
Other assets		(1,299	)		(2,388	)
Increase (decrease) in:
Accounts payable		(6,616	)		4,212
Accrued and other liabilities		(1,991	)		(17,528	)
Deferred revenue		(7,828	)		17,892
	$	(29,504	)	$	(41,033	)

(b) Cash payments made on account of:

	Nine Months Ended
	September 30,
	2016		2015
Income taxes	$	20,822	$	21,542
Interest	$	541	$	302

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

	Nine Months Ended
	September 30,
	2016		2015
Film assets	$	11,842	$	11,917
Property, plant and equipment
Joint revenue sharing arrangements		11,581		10,043
Other property, plant and equipment		7,355		5,635
Other intangible assets		2,368		2,354
Other assets		631		579
Deferred financing costs		402		663
	$	34,179	$	31,191

22

(d) Write-downs, net of recoveries, are comprised of the following:

	Nine Months Ended
	September 30,
	2016		2015
Accounts receivable	$	556	$	709
Financing receivables		75		—
Inventories		246		405
Film assets		1,000		—
Property, plant and equipment		792		1,464
Impairment of investments		194		350
Other intangible assets		40		—
	$	2,903	$	2,928

11. Income Taxes

(a) 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 September 30, 2016, 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 September 30, 2016, the Company had net deferred income tax assets after valuation allowance of $26.2 million (December 31, 2015 — $26.7 million), which consists of a gross deferred income tax asset of $26.5 million (December 31, 2015 — $27.0 million), against which the Company is carrying a $0.3 million valuation allowance (December 31, 2015 — $0.3 million).

ASU 2016-09, related to stock-based compensation, was issued in March 2016 and early adopted by the Company in June 2016. ASU 2016-09 eliminates additional paid in capital (“APIC”) pools and requires excess tax benefits and tax deficiencies to be recorded in the condensed consolidated statements of operations when the awards vest or are settled. Amendments related to accounting for excess tax benefits have been adopted prospectively resulting in a tax benefit of $nil and $0.1 million for the three and nine months ended September 30, 2016, respectively. In addition, modified retrospective adoption of ASC 2016-09 eliminates the requirement that excess tax benefits be realized before they can be recognized. The Company has also recorded a cumulative-effect adjustment of $0.9 million to Accumulated earnings and Deferred income taxes related to the impact from adoption of the provisions related to forfeiture rates. See Notes 2 and 12 for further discussion of the impact from the adoption of ASU 2016-09.

(b) Income Tax Effect on Other Comprehensive (Loss) Income

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

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Unrealized change in cash flow hedging instruments	$	76		$	606		$	(485	)	$	1,309
Realized change in cash flow hedging instruments upon settlement		(149	)		(274	)		(667	)		(577	)
Amortization of actuarial loss on postretirement benefit plan		(4	)		—			(14	)		—
Foreign currency translation adjustments		—			226			—			264
	$	(77	)	$	558		$	(1,166	)	$	996

23

12. Capital Stock

(a) Stock-Based Compensation

The compensation costs recorded in the condensed consolidated statements of operations for the Company’s stock-based compensation plans were $7.7 million and $22.5 million for the three and nine months ended September 30, 2016, respectively (2015 —$4.3 million and $14.9 million, respectively).

As at September 30, 2016, the Company has reserved a total of 12,467,960 (December 31, 2015 — 7,023,258) common shares for future issuance under the Company’s Stock Option Plan (“SOP”) and the IMAX Corporation Amended and Restated Long-Term Incentive Plan (“IMAX LTIP”). Of the common shares reserved for issuance, there are options in respect of 5,473,673 common shares and restricted share units (“RSUs”) in respect of 1,140,138 common shares outstanding at September 30, 2016. At September 30, 2016, options in respect of 3,924,432 common shares were vested and exercisable.

Stock Option Plan

The Company recorded an expense of $3.4 million and $9.4 million for the three and nine months ended September 30, 2016, respectively (2015 — $2.3 million and $8.4 million, respectively) related to stock option grants issued to employees and directors in the IMAX LTIP and SOP plans. An income tax benefit is recorded in the condensed consolidated statements of operations of $0.9 million and $2.4 million for the three and nine months ended September 30, 2016, respectively (2015 —$0.5 million and $1.8 million, respectively), for these costs.

The weighted average fair value of all stock options granted to employees and directors for the three and nine months ended September 30, 2016 at the grant date was $7.80 and $8.16 per share, respectively (2015 — n/a and $8.07 per share, respectively). The following assumptions were used to estimate the average fair value of the stock options:

	Three Months		Nine Months
	Ended September 30,		Ended September 30,
	2016	2015	2016	2015
Average risk-free interest rate	1.44%	n/a	1.67%	1.97%
Expected option life (in years)	4.44 - 4.88	n/a	4.44 - 5.24	3.55 - 5.76
Expected volatility	30%	n/a	30%	30%
Dividend yield	0%	n/a	0%	0%

Stock options to Non-Employees

There were no common share options issued to non-employees during the three and nine months ended September 30, 2016 and 2015.

As at September 30, 2016, non-employee stock options outstanding amounted to 28,750 stock options (2015 — 39,500) with a weighted average exercise price of $26.90 per share (2015 — $26.78 per share). 26,950 stock options (2015 — 21,525) were exercisable with an average weighted exercise price of $26.97 per share (2015 — $26.34 per share) and the vested stock options have an aggregate intrinsic value of $0.1 million (2015 — $0.2 million).

For the three and nine months ended September 30, 2016, the Company recorded an expense of less than $0.1 million and a recovery less than $0.1 million, respectively (2015 — expense of less than $0.1 million and $0.1 million, respectively) to cost and expenses related to revenues – services and selling, general and administrative expenses related to the non-employee stock options. Included in accrued liabilities is an accrual of less than $0.1 million for non-employee stock options (December 31, 2015 — less than $0.1 million).

China Long Term Incentive Plan (“China LTIP”)

The China LTIP was adopted by IMAX China Holding, Inc. (“IMAX China”), a subsidiary of the Company, in October 2012. Each stock option (“China Option”), RSU or cash settled share-based payment (“CSSBP”) issued under the China LTIP represents an opportunity to participate economically in the future growth and value creation of IMAX China. Prior to the initial public offering of

24

IMAX China on October 8, 2015 (the “IMAX China IPO”), the China Options and CSSBPs issued by IMAX China operated in tandem with options granted to certain employees of IMAX China under the Company’s SOP and the IMAX LTIP (“Tandem Options”).

During 2015, no Tandem Options were granted in conjunction with China Options or CSSBPs. Immediately prior to the IMAX China IPO, there were 186,446 outstanding and unvested Tandem Options issued under the Company’s SOP and IMAX LTIP with a weighted average exercise price of $23.70 per share. The Tandem Options had a maximum contractual life of 7 years. The total fair value of the Tandem Options granted with respect to the China LTIP was $1.9 million. The Company was recognizing this expense over a 5 year period.

Pursuant to their terms, upon the occurrence of a qualified initial public offering or upon a change in control on or prior to the fifth anniversary of the grant date, the 186,446 Tandem Options issued would forfeit immediately and the related charge would be reversed. As a result of the IMAX China IPO on October 8, 2015, the 186,446 Tandem Options with an average price of $23.70 per share were forfeited immediately. The Company recorded a recovery of $0.6 million in 2015 related to the forfeiture of Tandem Options issued under the Company’s SOP and IMAX LTIP. During the three and nine months ended September 30, 2015, the Company recorded an expense of $0.1 million and $0.3 million, respectively, related to the Tandem Options.

The Company subsequently recognized an immediate charge related to the vesting of China Options and certain CSSBPs for China employees. The total fair value of the China Options and CSSBP awards granted with respect to the China LTIP was $3.9 million and $2.1 million, respectively. During the fourth quarter of 2015, a charge of $2.1 million and $1.4 million was recorded relating to the China Options and CSSBPs, respectively. The remaining charge will be recognized over the related requisite period. The CSSBPs represent the right to receive cash payments in an amount equal to a certain percentage of the excess of the total equity value of IMAX China based on the per share price in the IMAX China IPO over the strike price of the CSSBPs. The CSSBPs were issued in conjunction with the China LTIP, with similar terms and conditions as the China Options. The CSSBP awards are accounted as liability awards, however the fair value of the liability is fixed at the time of the initial public offering. During the fourth quarter of 2015, a portion of the CSSBPs vested and were settled in cash for $1.0 million.

In connection with the IMAX China IPO and in accordance with the China LTIP, IMAX China adopted a post-IPO share option plan and a post-IPO restricted stock unit plan. Pursuant to these plans, IMAX China issued additional China Options and China LTIP Restricted Share Units (“China RSUs”) during the nine months ended September 30, 2016. No additional China Options and China RSUs were issued for the three months ended September 30, 2016.

During the three and nine months ended September 30, 2016, the Company recorded an expense related to the China Options, China RSUs and CSSBPs of $0.2 million and $0.7 million, $0.1 million and $0.4 million and $0.1 million and $0.3 million, respectively. The liability recognized with respect to the CSSBPs as at September 30, 2016 was $0.7 million (December 31, 2015 — $0.4 million).

Stock Option Summary

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

							Weighted Average Exercise
	Number of Shares						Price Per Share
	2016			2015			2016		2015
Options outstanding, beginning of period		4,805,244			5,925,660		$	27.03	$	24.24
Granted		984,452			871,431			31.49		31.56
Exercised		(268,516	)		(1,231,964	)		20.54		19.35
Forfeited		(45,024	)		(45,474	)		28.03		28.26
Cancelled		(2,483	)		—			33.80		—
Options outstanding, end of period		5,473,673			5,519,653			28.14		26.45
Options exercisable, end of period		3,924,432			3,195,836			27.34		25.14

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The Company cancelled 2,483 stock options from its IMAX LTIP surrendered by a Company employee during the three and nine months ended September 30, 2016, respectively (2015 – nil and nil, respectively). No stock options were cancelled from its SOP surrendered by Company employees during the three and nine months ended September 30, 2016 and 2015.

As at September 30, 2016, options that are exercisable have an intrinsic value of $9.7 million and a weighted average remaining contractual life of 3.9 years. The intrinsic value of options exercised in the three and nine months ended September 30, 2016 was $0.5 million and $3.2 million, respectively (2015 — $1.2 million and $21.4 million, respectively).

Restricted Share Units

RSUs have been granted to employees, consultants and directors under the IMAX LTIP. Each RSU represents a contingent right to receive one common share and is the economic equivalent of one common share. The grant date fair value of each RSU is equal to the share price of the Company’s stock at the grant date. The Company recorded an expense of $3.9 million and $11.6 million for the three and nine months ended September 30, 2016, respectively (2015 — $1.9 million and $6.2 million, respectively), related to RSU grants issued to employees and directors in the plan. In addition, the Company recorded an expense of $nil and $nil for the three and nine months ended September 30, 2016, respectively (2015 — less than $0.1 million and less than $0.1 million, respectively), related to RSU grants issued to certain advisors and strategic partners of the Company.

During the three and nine months ended September 30, 2016, in connection with the vesting of RSUs, the Company settled 27,416 and 271,032, respectively (2015 — 32,345 and 192,077, respectively) common shares to IMAX LTIP participants, of which 21,871 and 50,167, respectively (2015 — nil and 21,709, respectively) common shares, net of shares withheld for tax withholdings of 5,328 and 8,836, respectively (2015 — 5,763 and 5,981, respectively) were issued from treasury and 217 and 212,029, respectively (2015 — 26,582 and 164,387, respectively) common shares were settled through the open market purchases by the IMAX LTIP trustee.

Total stock-based compensation expense related to non-vested RSUs not yet recognized at September 30, 2016 and the weighted average period over which the awards are expected to be recognized is $26.8 million and 2.4 years, respectively (2015 — $16.4 million and 3.0 years, respectively). The Company’s actual tax benefits realized for the tax deductions related to the vesting of RSUs was $0.3 million and $2.6 million for the three and nine months ended September 30, 2016, respectively (2015 — $0.4 million and $2.0 million, respectively).

Historically, RSUs granted under the IMAX LTIP have vested between immediately and four years from the grant date. In connection with the amendment and restatement of the IMAX LTIP at the Company’s annual and special meeting of shareholders on June 6, 2016, the IMAX LTIP plan was amended to impose a minimum one-year vesting period on future RSU grants, with a carve-out for 300,000 RSUs that may vest on a shorter schedule. Vesting of the RSUs is subject to continued employment or service with the Company.

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

	Number of Awards						Weighted Average Grant Date Fair Value Per Share
	2016			2015			2016		2015
RSUs outstanding, beginning of period		973,637			595,834		$	32.27	$	27.13
Granted		465,968			337,557			31.70		34.39
Vested and settled		(271,032	)		(192,077	)		29.30		28.93
Forfeited		(28,435	)		(19,499	)		30.78		29.37
RSUs outstanding, end of period		1,140,138			721,815			32.78		29.99

As at September 30, 2016, the IMAX LTIP trustee held 176 shares purchased for less than $0.1 million in the open market to be issued upon the settlement of RSUs. The shares held with the trustee are recorded at cost and are reported as a reduction against capital stock on the condensed consolidated balance sheet.

26

Issuer Purchases of Equity Securities

On June 16, 2014, the Company’s board of directors approved a new $150.0 million share repurchase program for shares of the Company’s common stock, which program was amended on April 20, 2016 to increase the aggregate purchase allowance to $200.0 million. Purchases under the program commenced during the third quarter of 2014, and the program expires on June 30, 2017. The repurchases may be made either in the open market or through private transactions, subject to market conditions, applicable legal requirements and other relevant factors. The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time.

During the three and nine months ended September 30, 2016, the Company repurchased 500,000 and 3,290,512 common shares, respectively (2015 — 1,000,000 and 1,000,000 common shares, respectively), at an average price of $29.32 and $30.48 per share, respectively (2015 — $34.25 and $34.25 per share, respectively). The retired shares were purchased for $14.7 million and $100.4 million, respectively (2015 — $34.3 million and $34.3 million, respectively). The average carrying value of the stock retired was deducted from common stock and the remaining excess over the average carrying value of stock was charged to accumulated deficit.

The total number of shares purchased during the three and nine months ended September 30, 2016 does not include any shares purchased in the administration of employee share-based compensation plans (which amounted to nil and 249,657 common shares, respectively, at an average price of $nil and $33.55 per share, respectively).

Canadian Securities Law Matters

The Company has received an exemption decision issued by the Ontario Securities Commission, dated April 1, 2016, for relief from the formal issuer bid requirements under Canadian securities laws. The exemption decision permits the Company to repurchase up to 10% of its outstanding common shares in any twelve-month period through the facilities of the New York Stock Exchange (“NYSE”) under repurchase programs that the Company may implement from time to time. The Canadian securities laws regulate an issuer’s ability to make repurchases of its own securities.

The Company sought the exemption so that it can make repurchases under its repurchase programs in excess of the maximum allowable in reliance on the existing “other published markets” exemption from the formal issuer bid requirements available under Canadian securities laws. The “other published markets” exemption caps the Company’s ability to repurchase its securities through the facilities of the NYSE at 5% of the issuer’s outstanding securities during any 12-month period.

The conditions of the exemption decision are as follows: (i) any repurchases made in reliance on the exemption decision must be permitted under, and part of repurchase programs established and conducted in accordance with, U.S. securities laws and NYSE rules, (ii) the aggregate number of common shares acquired in reliance on the exemption decision by the Company and any person or company acting jointly or in concert with the Company within any 12 months does not exceed 10% of the outstanding common shares at the beginning of the 12-month period, (iii) the common shares are not listed and posted for trading on an exchange in Canada, (iv) the exemption decision applies only to the acquisition of common shares by the Company within 36 months of the date of the decision, and (v) prior to purchasing common shares in reliance on the exemption decision, the Company discloses the terms of the exemption decision and the conditions applicable thereto in a press release that is issued on SEDAR and includes such language as part of the news release required to be issued in accordance with the “other published markets exemption” in respect of any repurchase program that may be implemented by the Company.

Impact of Stock-based Compensation Accounting Standard Update

ASU 2016-09, related to stock-based compensation, was issued in March 2016 and early adopted in June 2016. ASU 2016-09 eliminates the requirement to estimate and apply a forfeiture rate to reduce stock compensation expense during the vesting period and, instead, account for forfeitures as they occur. ASU 2016-09 requires that this change be adopted using the modified retrospective approach. The impact from the adoption of the provisions related to forfeiture rates was reflected on a modified retrospective basis resulting in a balance sheet reclass of $4.4 million decrease to Accumulated earnings, $0.9 million increase to Deferred income taxes and $5.3 million increase to Other equity. An increase in APIC and a reduction in stock-based compensation expense of $2.7 million for the nine month period ended September 30, 2016 was also recorded. Additionally, ASU 2016-09 addresses the presentation of excess tax benefits and employee taxes paid on the condensed consolidated statement of cash flows. The Company is required to present excess tax benefits as an operating activity on the condensed consolidated statement of cash flows, which is where the Company previously classified these items. ASU 2016-09 also requires the presentation of employee taxes as a financing activity on the condensed consolidated statement of cash flows. This change was reflected in the condensed consolidated statement of cash flows retrospectively. See Notes 2 and 11 for further discussion of the impact from the adoption of ASU 2016-09.

27

(b) Income Per Share

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

	Three Months					Nine Months
	Ended September 30,					Ended September 30,
	2016		2015			2016			2015
Net income attributable to common shareholders	$	2,525	$	8,610		$	19,843		$	33,351
Less: Accretion charges associated with redeemable common stock		—		(263	)		—			(747	)
Net income applicable to common shareholders	$	2,525	$	8,347		$	19,843		$	32,604
Weighted average number of common shares (000’s):
Issued and outstanding, beginning of period		67,067		70,152			69,673			68,988
Weighted average number of shares issued (repurchased) during the period		23		(453	)		(1,620	)		594
Weighted average number of shares used in computing basic income per share		67,090		69,699			68,053			69,582
Assumed exercise of stock options and RSUs, net of shares assumed repurchased		656		1,161			668			1,520
Weighted average number of shares used in computing diluted income per share		67,746		70,860			68,721			71,102

The calculation of diluted earnings per share excludes 2,570,983 and 2,834,896 shares, respectively that are issuable upon the vesting of 19,530 and 283,443 RSUs, respectively and the exercise of 2,551,453 and 2,551,453 stock options, respectively for the three and nine months ended September 30, 2016, as the impact would be antidilutive. The calculation of diluted earnings per share excludes 1,473,950 and 1,067,859 shares, respectively that are issuable upon the vesting of nil and 61,534 RSUs, respectively and the exercise of 1,473,950 and 1,006,325 stock options, respectively for the three and nine months ended September 30, 2015, as the impact would be antidilutive.

As part of the adoption of ASU 2016-09, the excess tax benefit is no longer included in the calculation of diluted shares under the treasury stock method. This has been applied prospectively.

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(c) Shareholder’s Equity Attributable to Common Shareholders

The following summarizes the movement of Shareholders’ Equity attributable to common shareholders for the nine months ended September 30, 2016:

Balance as at December 31, 2015	$	624,791
Net income attributable to common shareholders		19,843
Adjustments to capital stock:
Cash received from the issuance of common shares		5,514
Issuance of common shares for vested RSUs		1,121
Fair value of stock options exercised at the grant date		2,104
Average carrying value of repurchased and retired common shares		(21,220	)
Share held in treasury		(6	)
Adjustments to other equity:
Employee stock options granted		10,092
Non-employee stock options granted and vested		30
Fair value of stock options exercised at the grant date		(2,104	)
RSUs granted		12,242
RSUs vested		(8,793	)
Stock exercised from treasury shares		(1,216	)
Cash received from the issuance of common shares in excess of par value		1,682
Adjustments to accumulated deficit:
Common shares repurchased and retired		(79,158	)
Adjustments to accumulated other comprehensive loss:
Unrealized net gain from cash flow hedging instruments		1,865
Realization of cash flow hedging net loss upon settlement		2,565
Foreign currency translation adjustments		(434	)
Amortization of actuarial loss on postretirement benefit plan		51
Tax effect of movement in other comprehensive income		(1,166	)
Balance as at September 30, 2016	$	567,803

29

13. Segmented Information

The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-production; and other. The IMAX systems segment includes the design, manufacture, sale or lease of IMAX theater projection system equipment. The theater system maintenance segment includes the maintenance of IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment includes the provision of IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The film production and IMAX DMR segment includes the production of films and the performance of film re-mastering services. The film distribution segment includes the distribution of films for which the Company has distribution rights. The film post-production segment provides film post-production and film print services. The Company refers to all theaters using the IMAX theater system as “IMAX theaters”. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items. The accounting policies of the segments are the same as those described in note 2 to the audited consolidated financial statements included in the Company’s 2015 Form 10-K.

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

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

Transactions among the other segments are not significant.

30

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2016		2015			2016			2015
Revenue(1)
IMAX theater systems
IMAX systems	$	25,687	$	30,153		$	70,508		$	64,632
Theater system maintenance		10,293		9,337			30,031			27,345
Joint revenue sharing arrangements		19,698		19,797			66,940			67,259
		55,678		59,287			167,479			159,236
Films
Production and IMAX DMR		21,549		20,865			78,767			75,144
Distribution		2,092		967			3,345			3,513
Post-production		2,327		761			6,436			5,259
		25,968		22,593			88,548			83,916
Other		4,904		3,221			14,394			11,320
Total	$	86,550	$	85,101		$	270,421		$	254,472
Gross margin
IMAX theater systems
IMAX systems(2)	$	16,743	$	13,109		$	38,252		$	34,831
Theater system maintenance		3,398		3,521			10,207			9,891
Joint revenue sharing arrangements(2)		10,980		12,130			44,716			46,816
		31,121		28,760			93,175			91,538
Films
Production and IMAX DMR(2)		12,448		13,929			52,398			55,642
Distribution(2)		258		15			(998	)		(201	)
Post-production		1,003		(48	)		3,028			847
		13,709		13,896			54,428			56,288
Other		69		(267	)		(251	)		(421	)
Total	$	44,899	$	42,389		$	147,352		$	147,405

(1) The Company’s largest customer represented 11.2% and 14.3% of total revenues for the three and nine months ended September 30, 2016, respectively (2015 — 17.6% and 17.4%, respectively).

(2) IMAX systems include marketing and commission costs of $0.8 million and $1.9 million for the three and nine months ended September 30, 2016, respectively (2015 — $0.9 million and $1.8 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.4 million and $2.9 million for the three and nine months ended September 30, 2016, respectively (2015 — $1.3 million and $2.7 million, respectively). Production and DMR segment margins include marketing costs of $4.2 million and $11.7 million for the three and nine months ended September 30, 2016, respectively (2015 — $3.4 million and $8.3 million, respectively). Distribution segment margins include marketing expense of $0.6 million and $2.1 million for the three and nine months ended September 30, 2016, respectively (2015 — cost recovery of less than $0.1 million and cost recovery of $0.1 million, respectively).

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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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenue
United States	$	28,139	$	27,914	$	96,276	$	95,945
Canada		2,368		3,412		9,992		8,440
Greater China		29,736		27,513		84,797		71,427
Asia (excluding Greater China)		10,665		11,007		25,034		26,732
Western Europe		6,140		7,100		26,522		24,139
Russia & the CIS		2,397		1,705		7,684		9,510
Latin America		1,408		2,459		8,562		7,849
Rest of the World		5,697		3,991		11,554		10,430
Total	$	86,550	$	85,101	$	270,421	$	254,472

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.

32

14. Employee’s Pension and Postretirement Benefits

(a) 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:

	September 30,		December 31,
	2016		2015
Projected benefit obligation:
Obligation, beginning of period	$	19,478	$	19,405
Interest cost		196		253
Actuarial gain		—		(180	)
Obligation, end of period and unfunded status	$	19,674	$	19,478

The following table provides disclosure of pension expense for the SERP:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Interest cost	$	65	$	63	$	196	$	189
Pension expense	$	65	$	63	$	196	$	189

No contributions are expected to be made for the SERP during the remainder of 2016. The Company expects interest costs of $0.1 million to be recognized as a component of net periodic benefit cost during the remainder of 2016.

The accumulated benefit obligation for the SERP was $19.7 million at September 30, 2016 (December 31, 2015 — $19.5 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:

2016 (three months remaining)	$	—
2017		19,871
2018		—
2019		—
2020		—
Thereafter		—
	$	19,871

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, 2016), although Mr. Gelfond has not informed the Company that he intends to retire at that time, and is currently in discussions regarding an extension of his employment agreement with the Company.

(b) 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 and nine months ended September 30, 2016, the Company contributed and expensed an aggregate of $0.3 million and $0.9 million, respectively (2015 — $0.2 million and $0.8 million, respectively) to its Canadian defined contribution plan and an aggregate of $0.1 million and $0.5 million, respectively (2015 — $0.2 million and $0.4 million, respectively) to its defined contribution employee plan under Section 401(k) of the U.S. Internal Revenue Code.

33

(c) 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 September 30, 2016 is $0.8 million (December 31, 2015 — $0.8 million). The Company has expensed less than $0.1 million and less than $0.1 million for the three and nine months ended September 30, 2016, respectively (2015 — less than $0.1 million and less than $0.1 million, respectively).

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

2016 (three months remaining)	$	34
2017		54
2018		60
2019		66
2020		33
Thereafter		539
Total	$	786

(d) 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 September 30, 2016 is $1.9 million (December 31, 2015 — $1.8 million). The Company has expensed less than $0.1 million and less than $0.1 million for the three and nine months ended September 30, 2016, respectively (2015 — less than $0.1 million and $0.1 million, respectively).

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

2016 (three months remaining)	$	96
2017		100
2018		108
2019		115
2020		117
Thereafter		1,330
Total	$	1,866

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15. Financial Instruments

(a) 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.

(b) 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 September 30, 2016						As at December 31, 2015
	Carrying			Estimated			Carrying			Estimated
	Amount			Fair Value			Amount			Fair Value
Cash and cash equivalents	$	218,104		$	218,104		$	317,449		$	317,449
Net financed sales receivable	$	110,054		$	110,260		$	106,286		$	108,184
Net investment in sales-type leases	$	8,843		$	9,142		$	10,945		$	11,154
Available-for-sale investment	$	1,000		$	1,012		$	1,000		$	997
Convertible loan receivable	$	1,000		$	1,000		$	—		$	—
Foreign exchange contracts — designated forwards	$	7		$	7		$	(4,423	)	$	(4,423	)
Borrowings under the Playa Vista Loan	$	(28,167	)	$	(28,167	)	$	(29,667	)	$	(29,667	)

Cash and cash equivalents are comprised of cash and interest-bearing investments with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value (Level 1 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30, 2016 and December 31, 2015, respectively.

The estimated fair values of the net financed sales receivable and net investment in sales-type leases are estimated based on discounting future cash flows at currently available interest rates with comparable terms (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30, 2016 and December 31, 2015, respectively.

The fair value of the Company’s available-for-sale investment is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30, 2016 and December 31, 2015, respectively.

The fair value of the Company’s convertible loan receivable approximates market value as at September 30, 2016, as the loan was issued in the last month of the quarter (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy).

The fair value of foreign currency derivatives is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30, 2016 and December 31, 2015, respectively. These identical instruments are traded on a closed exchange.

The carrying value of borrowings under the Playa Vista Loan approximates fair value as the interest rates offered under the Playa Vista Loan are close to September 30, 2016 market rates for the Company for debt of the same remaining maturities (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30, 2016.

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There were no significant transfers between Level 1 and Level 2 during the nine months ended September 30, 2016 or 2015. 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 nine months ended September 30, 2016.

(c) 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.

36

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

	As at September 30, 2016						As at December 31, 2015
	Minimum		Financed				Minimum		Financed
	Lease		Sales				Lease		Sales
	Payments		Receivables		Total		Payments		Receivables		Total
In good standing	$	7,974	$	108,375	$	116,349	$	10,252	$	105,352	$	115,604
Pre-approved transactions		—		1,387		1,387		—		757		757
Transactions suspended		1,541		935		2,476		1,365		745		2,110
	$	9,515	$	110,697	$	120,212	$	11,617	$	106,854	$	118,471

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

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

	As at September 30, 2016					As at December 31, 2015
	Recorded		Related			Recorded		Related
	Investment		Allowance			Investment		Allowance
Net investment in leases	$	1,541	$	(672	)	$	1,365	$	(672	)
Net financed sales receivables		935		(643	)		745		(568	)
Total	$	2,476	$	(1,315	)	$	2,110	$	(1,240	)

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.

37

The Company’s aged financing receivables are as follows:

	As at September 30, 2016
									Related							Recorded
	Accrued						Billed		Unbilled		Total					Investment
	and						Financing		Recorded		Recorded		Related			Net of
	Current		30-89 Days		90+ Days		Receivables		Investment		Investment		Allowances			Allowances
Net investment in leases	$	84	$	81	$	771	$	936	$	8,579	$	9,515	$	(672	)	$	8,843
Net financed sales receivables		2,038		883		2,489		5,410		105,287		110,697		(643	)		110,054
Total	$	2,122	$	964	$	3,260	$	6,346	$	113,866	$	120,212	$	(1,315	)	$	118,897
	As at December 31, 2015
									Related							Recorded
	Accrued						Billed		Unbilled		Total					Investment
	and						Financing		Recorded		Recorded		Related			Net of
	Current		30-89 Days		90+ Days		Receivables		Investment		Investment		Allowances			Allowances
Net investment in leases	$	840	$	177	$	446	$	1,463	$	10,154	$	11,617	$	(672	)	$	10,945
Net financed sales receivables		908		1,013		1,177		3,098		103,756		106,854		(568	)		106,286
Total	$	1,748	$	1,190	$	1,623	$	4,561	$	113,910	$	118,471	$	(1,240	)	$	117,231

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

	As at September 30, 2016
									Related				Recorded
	Accrued						Billed		Unbilled				Investment
	and						Financing		Recorded		Related		Past Due
	Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases	$	12	$	53	$	315	$	380	$	2,424	$	—	$	2,804
Net financed sales receivables		546		522		2,463		3,531		23,103		—		26,634
Total	$	558	$	575	$	2,778	$	3,911	$	25,527	$	—	$	29,438
	As at December 31, 2015
									Related				Recorded
	Accrued						Billed		Unbilled				Investment
	and						Financing		Recorded		Related		Past Due
	Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases	$	41	$	47	$	205	$	293	$	1,076	$	—	$	1,369
Net financed sales receivables		129		224		839		1,192		10,795		—		11,987
Total	$	170	$	271	$	1,044	$	1,485	$	11,871	$	—	$	13,356

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:

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	For the Three Months Ended September 30, 2016
								Average		Interest
	Recorded		Unpaid		Related			Recorded		Income
	Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	748	$	269	$	(643	)	$	748	$	—
Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—
Total recorded investment in impaired loans:
Net financed sales receivables	$	748	$	269	$	(643	)	$	748	$	—
	For the Three Months Ended September 30, 2015
								Average		Interest
	Recorded		Unpaid		Related			Recorded		Income
	Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	525	$	53	$	(494	)	$	525	$	—
Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—
Total recorded investment in impaired loans:
Net financed sales receivables	$	525	$	53	$	(494	)	$	525	$	—
	For the Nine Months Ended September 30, 2016
								Average		Interest
	Recorded		Unpaid		Related			Recorded		Income
	Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	748	$	269	$	(643	)	$	674	$	—
Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—
Total recorded investment in impaired loans:
Net financed sales receivables	$	748	$	269	$	(643	)	$	674	$	—
	For the Nine Months Ended September 30, 2015
								Average		Interest
	Recorded		Unpaid		Related			Recorded		Income
	Investment		Principal		Allowance			Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	525	$	53	$	(494	)	$	525	$	—
Recorded investment for which there is no related allowance:
Net financed sales receivables		—		—		—			—		—
Total recorded investment in impaired loans:
Net financed sales receivables	$	525	$	53	$	(494	)	$	525	$	—

39

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 September 30, 2016				Nine Months Ended September 30, 2016
	Net Investment		Net Financed		Net Investment		Net Financed
	in Leases		Sales Receivables		in Leases		Sales Receivables
Allowance for credit losses:
Beginning balance	$	672	$	643	$	672	$	568
Charge-offs		—		—		—		—
Recoveries		—		—		—		—
Provision		—		—		—		75
Ending balance	$	672	$	643	$	672	$	643
Ending balance: individually evaluated for impairment	$	672	$	643	$	672	$	643
Financing receivables:
Ending balance: individually evaluated for impairment	$	9,515	$	110,697	$	9,515	$	110,697
	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Net Investment		Net Financed		Net Investment		Net Financed
	in Leases		Sales Receivables		in Leases		Sales Receivables
Allowance for credit losses:
Beginning balance	$	972	$	494	$	972	$	494
Charge-offs		—		—		—		—
Recoveries		—		—		—		—
Provision		—		—		—		—
Ending balance	$	972	$	494	$	972	$	494
Ending balance: individually evaluated for impairment	$	972	$	494	$	972	$	494
Financing receivables:
Ending balance: individually evaluated for impairment	$	12,032	$	103,418	$	12,032	$	103,418

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(d) 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. 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 September 30, 2016 (the “Foreign Currency Hedges”), with settlement dates throughout 2016 and 2017. Foreign currency derivatives are recognized and measured in the balance sheet at fair value. Changes in the fair value (gains or losses) are recognized in the condensed consolidated statements of operations except for derivatives designated and qualifying as foreign currency hedging instruments. For foreign currency hedging instruments, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in other comprehensive income and reclassified to the condensed consolidated 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 and therefore no gain or loss pertaining to an ineffective portion has been recognized.

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

Notional value of foreign exchange contracts:

	September 30,		December 31,
	2016		2015
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	$	26,869	$	30,710

Fair value of derivatives in foreign exchange contracts:

		September 30,			December 31,
	Balance Sheet Location	2016			2015
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	Other assets	$	734		$	—
	Accrued and other liabilities		(727	)		(4,423	)
		$	7		$	(4,423	)

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Derivatives in Foreign Currency Hedging relationships for the nine months ended September 30:

		Three Months Ended September 30,						Nine Months Ended September 30,
		2016			2015			2016			2015
Foreign exchange contracts — Forwards	Derivative (Loss) Gain Recognized in OCI (Effective Portion)	$	(293	)	$	(2,309	)	$	1,865		$	(4,983	)
	Location of Derivative Loss Reclassified from AOCI	Three Months Ended September 30,						Nine Months Ended September 30,
	into Income (Effective Portion)	2016			2015			2016			2015
Foreign exchange contracts — Forwards	Selling, general and administrative expenses	$	(572	)	$	(1,045	)	$	(2,565	)	$	(2,196	)

The Company’s estimated net amount of the existing gains as at September 30, 2016 is $0.1 million, which is expected to be reclassified to earnings within the next twelve months

(e) 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 September 30, 2016, the equity method of accounting is being utilized for an investment with a carrying value of $nil (December 31, 2015 — $1.0 million). The Company’s accumulated losses in excess of its equity investment were $1.4 million as at September 30, 2016, and are classified in Accrued and other liabilities. For the three months ended September 30, 2016, gross revenues, cost of revenue and net loss for the Company’s investments were $nil, $1.6 million and $1.5 million, respectively (2015 — $nil, $1.9 million and $1.8 million, respectively). For the nine months ended September 30, 2016, gross revenues, cost of revenue and net loss for the Company’s investments were $0.3 million, $6.0 million and $5.6 million, respectively (2015 — $nil, $6.4 million and $6.2 million, respectively). The Company has determined it is not the primary beneficiary of this VIE, and therefore this entity has not been consolidated. In the third quarter of 2016, the Company issued a convertible loan of $1.0 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 meets the criteria for classification as a debt security under the FASB ASC 320 and is recorded at a fair value of $nil at September 30, 2016 (December 31, 2015 — $nil). This investment was classified as an available-for-sale investment. Furthermore, the Company has an investment of $1.0 million (December 31, 2015 — $1.0 million) in the shares of an exchange traded fund. This investment is also classified as an available-for-sale investment. The Company has an investment of $2.5 million in the preferred shares of an enterprise which meet the criteria for classification as an equity security under FASB ASC 325. In the three and nine months ended September 30, 2016, respectively, the Company recognized an other-than-temporary impairment of $nil and $0.2 million in the condensed consolidated statements of operations (2015 — $nil and $0.4 million, respectively). The total carrying value of investments in new business ventures at September 30, 2016 is $1.0 million (December 31, 2015 — $2.2 million) and is recorded in Other assets.

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16. Non-Controlling Interests

(a) IMAX China Non-Controlling Interest

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

On October 8, 2015, IMAX China completed the IMAX China IPO. Following the IMAX China IPO, the Company continues to indirectly own approximately 68.5% 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 nine months ended September 30, 2016:

Balance as at December 31, 2015	$	49,959
Net income		8,015
Other comprehensive loss		(1,415	)
Balance as at September 30, 2016	$	56,559

(b) Other Non-Controlling Interest

In 2014, the Company announced the creation of the Film Fund to co-finance a portfolio of 10 original large-format films. The Film Fund, which is intended to be capitalized with up to $50.0 million, will finance an ongoing supply of original films that the Company believes will be more exciting and compelling than traditional documentaries. The initial investment in the Film Fund was committed to by a third party in the amount of $25.0 million, with the possibility of contributing additional funds. The Company, which will contribute $9.0 million to the Film Fund over five years starting in 2014, anticipates the Film Fund will be self-perpetuating, with a portion of box office proceeds reinvested into the Film Fund to generate a continuous, steady flow of high-quality documentary content. To date, the Film Fund invested $7.7 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 following summarizes the movement of the non-controlling interest in temporary equity, in the Company’s subsidiary for the nine months ended September 30, 2016:

Balance as at December 31, 2015	$	3,307
Net loss		(614	)
Balance as at September 30, 2016	$	2,693

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IMAX CORPORATION

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

OVERVIEW

IMAX Corporation, together with its consolidated subsidiaries (the “Company”), is one of the world’s leading entertainment technology companies, specializing in motion picture technologies and presentations. The Company refers to all theaters using the IMAX theater system as “IMAX theaters”. IMAX offers a unique end-to-end cinematic solution combining proprietary software, theater architecture and equipment to create the highest-quality, most immersive motion picture experience for which the IMAX^® brand has become known globally. Top filmmakers and studios utilize IMAX theaters to connect with audiences in innovative ways, and, as such, IMAX’s network is among the most important and successful theatrical distribution platforms for major event films around the world. There were 1,145 IMAX theater systems (1,037 commercial multiplexes, 16 commercial destinations, 92 institutional) operating in 74 countries as of September 30, 2016. This compares to 1,008 theater systems (887 commercial multiplexes, 19 commercial destinations, 102 institutional) operating in 66 countries as of September 30, 2015.

IMAX theater systems combine:

• IMAX DMR (Digital Re-Mastering) movie conversion technology, which results in higher image and sound fidelity than conventional cinema experiences;

• advanced, high-resolution projectors with specialized equipment and automated theater control systems, which generate significantly more contrast and brightness than conventional theater systems;

• large screens and proprietary theater geometry, which result in a substantially larger field of view so that the screen extends to the edge of a viewer’s peripheral vision and creates more realistic images;

• sound system components, which deliver more expansive sound imagery and pinpointed origination of sound to any specific spot in an IMAX theater; and

• specialized theater acoustics, which result in a four-fold reduction in background noise.

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

As a result of the immersiveness and superior image and sound quality of The IMAX Experience, the Company’s exhibitor customers typically charge a premium for IMAX DMR films over films exhibited in their other auditoriums. The premium pricing, combined with the higher attendance levels associated with IMAX DMR films, generates incremental box-office for the Company’s exhibitor customers and for the movie studios releasing their films to the IMAX network. The incremental box-office generated by IMAX DMR films has helped establish IMAX as a key premium distribution and marketing platform for Hollywood blockbuster films. Driven by the advent of digital technology that reduced the IMAX DMR conversion time and with the strengthening of the Company’s relationships with the major studios, the number of IMAX DMR films released to the theater network per year has increased to 44 films in 2015, up from six films in 2007. The Company expects to release a similar number of IMAX DMR films in 2016 as compared to 2015.

As one of the world’s leaders in entertainment technology, the Company strives to remain at the forefront of advancements in cinema technology. To that end, the Company introduced its next-generation laser-based digital projection system at the end of 2014, which was co-developed with Barco N.V and incorporates exclusive technology developed or otherwise obtained by the Company. The Company believes that the IMAX laser-based projectors present greater brightness and clarity, higher contrast, a wider color gamut and deeper blacks, and consume less power and last longer than existing digital technology. The laser projection solution is the first IMAX digital projection system capable of illuminating the largest screens in its network. As at September 30, 2016, 33 laser-based digital systems were operational.

The Company is also undertaking new lines of business, with a focus on location-based experiences, alternative forms of in-cinema entertainment and in-home entertainment. In the second quarter of 2016, the Company announced its comprehensive virtual reality (“VR”) strategy to develop a premium, location-based VR offering that will deliver immersive, multi-dimensional experiences, including entertainment content and games, to multiplexes, malls and other commercial destinations. The Company’s VR initiative is premised on a unique combination of high quality content, proprietary design and premium technology. The Company has also partnered with Google to design and develop a cinema-grade IMAX VR camera, which will enable filmmakers and content creators to capture and deliver high-quality, 360-degree content experiences to audiences.

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The Company’s VR experiences will include content developed by the Company’s studio partners and independent producers, as well as premium content created through use of the IMAX VR camera. The Company intends to deliver premium VR experiences in IMAX VR centers, which are expected to be located in both stand-alone, arcade-like venues, as well as shopping centers and multiplexes that are retrofitted with proprietary VR pods that permit interactive, moveable VR experiences. The Company plans to open several IMAX VR pilot sites over the coming months, beginning with a sales center in Los Angeles, California and a pilot location in Manchester, England that the Company will be launching in partnership with ODEON & UCI Cinemas Group. Through its VR initiative, the Company sees a unique opportunity to combine premium equipment, more robust computing power, and specially designed spaces to create a highly differentiated, destination-based VR experience that will draw audiences out of their homes, similar to the strategy it has successfully employed in the cinema space. In addition, the Company is working with Starbreeze AB, a Swedish-based independent creator, publisher and distributor of high quality VR entertainment content and hardware, and Acer Inc., to incorporate next-generation headset-mounted display technology that offers industry-leading resolution and an extra-wide peripheral field of view.

The Company is also focusing on alternative forms of in-cinema entertainment, including original content. In 2014, the Company announced the creation of the IMAX Original Film Fund (the “Film Fund”) to co-finance a portfolio of 10 original large format films. The Film Fund, which is intended to be capitalized with up to $50.0 million, will finance an ongoing supply of original films that the Company believes will be more exciting and compelling than traditional documentaries. The initial investment in the Film Fund was committed to by a third party in the amount of $25.0 million, with the possibility of contributing additional funds. The Company, which will contribute $9.0 million to the Film Fund over five years starting in 2014, anticipates the Film Fund will be self-perpetuating, with a portion of box office proceeds reinvested into the Film Fund to generate a continuous flow of high-quality documentary content. To date, the Film Fund has invested $7.7 million toward the development of original films.

Furthermore, in 2015, the Company announced the creation of the IMAX China Film Fund (the “China Film Fund”) with its subsidiary IMAX China and its partner CMC to help fund Mandarin language commercial films. The China Film Fund, which is expected initially to be capitalized with approximately $50.0 million, will target productions that can leverage the Company’s brand, relationships, technology and release windows in China. The China Film Fund is expected to co-finance approximately 15 Mandarin-language tent-pole films over three years, and will target contributions of between $3.0 million and $7.0 million per film. The China Film Fund will operate under an IMAX-CMC controlled greenlight committee, and the Company is in the process of bringing in other investors to increase the size of the China Film Fund.

With respect to in-home entertainment, the Company has announced new home theater initiatives, including a joint venture with TCL Multimedia Technology Holding Limited (“TCL”) to design, develop, manufacture and sell a premium home theater system. Since announcing the joint venture in 2013 and introducing the new private home theater in 2015, the Company has signed agreements for more than 130 premium home theater systems. Beyond its premium home theater, the Company is also developing other components of broader home entertainment platform designed to allow consumers to experience elements of The IMAX Experience^® in their homes.

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

• the signing, installation and financial performance of theater system arrangements (particularly its joint revenue sharing arrangements and new laser-based projection system);

• film performance and the securing of new film projects (particularly IMAX DMR films);

• revenue and gross margins from the Company’s operating segments;

• operating leverage;

• earnings from operations as adjusted for unusual items that the Company views as non-recurring;

• short- and long-term cash flow projections;

• the continuing ability to invest in and improve the Company’s technology to enhance its differentiation of presentation versus other cinematic experiences;

• the overall execution, reliability and consumer acceptance of The IMAX Experience; and

• the success of new business initiatives (including new content initiatives).

The primary revenue sources for the Company can be categorized into two main groups: theater systems and films. On the theater systems side, the Company derives revenues from theater exhibitors primarily through either a sale or sales-type lease arrangement or a joint revenue sharing arrangement. Theater exhibitors also pay for associated maintenance and extended warranty services. Film revenue is derived primarily from film studios for the provision of film production and digital re-mastering services for exhibition on

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IMAX theater systems around the world. The Company derives other film revenues from the distribution of certain films and the provision of post-production services. The Company also derives a small portion of other revenues from the operation of its own theaters, the provision of aftermarket parts for its system components, and camera rentals.

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

One of the Company’s principal businesses is the design, manufacture and delivery of premium theater systems (“IMAX theater systems”). The theater system equipment components (including the projection system, sound system, screen system and, if applicable, 3D glasses cleaning machine), theater design support, supervision of installation, projectionist training and the use of the IMAX brand are all elements of what the Company considers the system deliverable. The IMAX theater systems are based on proprietary and patented technology developed over the course of the Company’s 49-year history. The Company provides IMAX theater systems to customers through sales, long-term leases or under joint revenue sharing arrangements. The Company’s customers who purchase, lease or otherwise acquire the IMAX theater systems through joint revenue sharing arrangements are theater exhibitors that operate commercial theaters (particularly multiplexes), museums, science centers, or destination entertainment sites. The Company generally does not own IMAX theaters, but licenses the use of its trademarks along with the sale, lease or contribution of the IMAX theater system.

IMAX Systems

Sales and Sales-Type Lease Arrangements

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

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

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

Joint Revenue Sharing Arrangements

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

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

Under a hybrid joint revenue sharing arrangement, by contrast, the customer is responsible for making upfront payments prior to the delivery and installation of the IMAX theater system in an amount that is typically half of what the Company would receive from a

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straight sale transaction. As with a traditional joint revenue sharing arrangement, the customer also pays the Company a portion of the customer’s IMAX box-office receipts over the term of the arrangement, although the percentage of box-office receipts owing to the Company is typically half that of a traditional joint revenue sharing arrangement. The Company generally retains title to the theater system equipment components, and the equipment is returned to the Company at the conclusion of the arrangement. In limited instances, however, title to the theater system equipment components passes to the customer.

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

The introduction of joint revenue sharing arrangements has been an important factor in the expansion of the Company’s commercial theater network, which has grown by approximately 488% since the beginning of 2008. Joint revenue sharing arrangements allow commercial theater exhibitors to install IMAX theater systems without the significant initial capital investment required in a sale or sales-type lease arrangement. Joint revenue sharing arrangements drive recurring cash flows and earnings for the Company, as customers under joint revenue sharing arrangements pay the Company a portion of their ongoing box-office. The Company funds its joint revenue sharing arrangements through cash flows from operations. As at September 30, 2016, the Company had 592 theaters in operation under joint revenue sharing arrangements, an 18.9% increase as compared to the 498 joint revenue sharing arrangements open as at September 30, 2015. The Company also had contracts in backlog for an additional 389 theaters under joint revenue sharing arrangements as at September 30, 2016.

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

Theater System Maintenance

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

Other Theater Revenues

The Company derives a small portion of its revenues from other sources. As at September 30, 2016, the Company had two owned and operated IMAX theaters (December 31, 2015 — three owned and operated theaters). In addition, the Company has a commercial arrangement with one theater resulting in the sharing of profits and losses and provides management services to three other theaters. The Company also rents its proprietary 2D and 3D large-format film and digital cameras to third party production companies. The Company maintains cameras and other film equipment and also offers production advice and technical assistance to both documentary and Hollywood filmmakers. Additionally, the Company generates revenues from the sale of after-market parts and 3D glasses.

Revenue from theater system arrangements is recognized at a different time from when cash is collected. See “Critical Accounting Policies” in Item 1 of the Company’s Form 10-K for the year ended December 31, 2015 (the “2015 Form 10-K”) for further discussion on the Company’s revenue recognition policies.

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IMAX Theater Network

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

	2016 Theater Network Base								2015 Theater Network Base
	Commercial Multiplex		Commercial Destination		Institutional		Total		Commercial Multiplex		Commercial Destination		Institutional		Total
United States		348		5		41		394		333		6		48		387
Canada		37		2		7		46		37		2		8		47
Greater China(1)		354		—		17		371		258		—		17		275
Asia (excluding Greater China)		88		2		4		94		76		3		6		85
Western Europe		73		6		10		89		65		7		10		82
Russia & the CIS		50		—		—		50		48		—		—		48
Latin America(2)		38		—		11		49		34		—		11		45
Rest of the World		49		1		2		52		36		1		2		39
Total		1,037		16		92		1,145		887		19		102		1,008

(1) Greater China includes China, Hong Kong, Taiwan and Macau.

(2) Latin America includes South America, Central America and Mexico.

As of September 30, 2016, 38.4% of IMAX systems in operation were located in the United States and Canada compared to 43.1% as at September 30, 2015.

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

The Company currently believes that over time its commercial multiplex theater network could grow to approximately 2,450 IMAX theaters worldwide from 1,037 commercial multiplex IMAX theaters operating as September 30, 2016. While the Company continues to grow in the United States and Canada, it believes that the majority of its future growth will come from international markets. As at September 30, 2016, 61.6% of IMAX theater systems in operation were located within international markets (defined as all countries other than the United States and Canada), up from 56.9% as at September 30, 2015. Revenues and gross box-office derived from outside the United States and Canada continues to exceed revenues and gross box-office from the United States and Canada. Risks associated with the Company’s international business are outlined in Risk Factors – “The Company conducts business internationally, which exposes it to uncertainties and risks that could negatively affect its operations, sales and future growth prospects” in Item 1A of the Company’s 2015 Form 10-K.

Greater China continues to be the Company’s second-largest and fastest-growing market. The Company’s Greater China operations have accounted for an increasingly significant portion of its overall revenues, with nearly 31% of overall revenues generated from the Company’s China operations in the nine months ended September 30, 2016. As at September 30, 2016, the Company had 371 theaters operating in Greater China with an additional 381 theaters in backlog that are scheduled to be installed in Greater China by 2022. The Company’s backlog in Greater China represents 69.7% of the Company’s current backlog. The Company continues to invest in joint revenue sharing arrangements with select partners to ensure ongoing revenue in this key market. The Company’s largest single international partnership is in China with Wanda Cinema Line Corporation (“Wanda”). In the third quarter of 2016, the Company and Wanda signed an agreement for an additional 150 theater systems under a joint revenue sharing arrangement. This increases Wanda’s total commitment to the Company to 360 theater systems, of which 345 theater systems are under the parties’ joint revenue sharing arrangement. Furthermore, the Company has a partnership with CJ CGV Holdings, Ltd., for a commitment of 120 theater systems, of which 100 theater systems will be located in China. In addition, in the second quarter of 2016, the Company and Guangzhou JinYI Media Corporation (“JinYi”) expanded its existing commitment to include 40 theater systems under a joint revenue sharing arrangement. With the addition of these theater systems, JinYi’s total commitment to the Company is for 60 theater systems, all of which are located in China. See Risk Factors – “The Company faces risks in connection with the continued expansion of its business in China” in Item 1A of the Company’s 2015 Form 10-K.

In 2014, the Company completed the sale and issuance of 20% of the shares of the Company’s subsidiary, IMAX China Holding, Inc. (“IMAX China”), to entities owned and controlled by CMC Capital Partners (“CMC”), an investment fund that is focused on

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media and entertainment, and FountainVest Partners (“FountainVest”), a China-focused private equity firm. The sale price for the interest was $80.0 million, and was paid by the investors in two equal installments on April 8, 2014 and February 10, 2015 (collectively, the “IMAX China Investment”).

Thereafter, on October 8, 2015, IMAX China completed an initial public offering of its ordinary shares on the Main Board of the Hong Kong Stock Exchange Limited (the “IMAX China IPO”). Following the IMAX China IPO, the Company continues to indirectly own approximately 68.5% of IMAX China, which remains a consolidated subsidiary of the Company.

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

	2016						2015
	IMAX Commercial Multiplex Theater Network						IMAX Commercial Multiplex Theater Network
	JRSA		Sale / Sales- type lease		Total		JRSA		Sale / Sales- type lease		Total
Domestic Total (United States & Canada)		264		121		385		254		116		370
International:
Greater China		221		133		354		159		99		258
Asia (excluding Greater China)		50		38		88		40		36		76
Western Europe		42		31		73		37		28		65
Russia & the CIS		—		50		50		—		48		48
Latin America		—		38		38		—		34		34
Rest of the World		15		34		49		8		28		36
International Total		328		324		652		244		273		517
Worldwide Total		592		445		1,037		498		389		887

As at September 30, 2016, 264 (2015 — 254) of the 592 (2015 — 498) theaters under joint revenue sharing arrangements in operation, or 44.6% (2015 — 51.0%) were located in the United States and Canada, with the remaining 328 (2015 — 244) or 55.4% (2015 — 49.0%) of arrangements being located in international markets. The Company continues to seek to expand its network of theaters under joint revenue sharing arrangements, particularly in select international markets.

Sales Backlog

The Company’s current sales backlog is as follows:

	September 30, 2016					September 30, 2015
	Number of Systems			Dollar Value (in thousands)		Number of Systems			Dollar Value (in thousands)
Sales and sales-type lease arrangements		158		$	197,730		175		$	228,907
Joint revenue sharing arrangements		389			55,456		209			47,664
		547	(1)(2)	$	253,186		384	(1)(3)	$	276,571

(1) Includes 20 laser-based digital theater system configurations (2015 – 69), including upgrades. The Company continues to develop and roll out its laser-based digital projection system. See “Research and Development” in Item 2 of this Part I for additional information.

(2) Includes five upgrades to a laser-based digital theater system, in existing IMAX theater locations.

(3) Includes 20 upgrades to a digital theater system, in existing IMAX theater locations (two xenon configurations and 18 laser configurations, of which four are under joint revenue sharing arrangements).

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The number of theater systems in the backlog reflects the minimum number of commitments under signed contracts. The dollar value fluctuates depending on the number of new theater system arrangements signed from year to year, which adds to backlog, and the installation and acceptance of theater systems and the settlement of contracts, both of which reduce backlog. Sales backlog typically represents the fixed contracted revenue under signed theater system sale and lease agreements that the Company believes will be recognized as revenue upon installation and acceptance of the associated theater. Sales backlog includes initial fees along with the estimated present value of contractual ongoing fees due over the lease term; however, it excludes amounts allocated to maintenance and extended warranty revenues as well as fees in excess of contractual ongoing fees that may be received in the future. The value of sales backlog does not include revenue from theaters in which the Company has an equity interest, operating leases, letters of intent or long-term conditional theater commitments. The value of theaters under joint revenue sharing arrangements is excluded from the dollar value of sales backlog, although certain theater systems under joint revenue sharing arrangements provide for contracted upfront payments and therefore carry a backlog value based on those payments. The Company believes that the contractual obligations for theater system installations that are listed in sales backlog are valid and binding commitments.

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

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

	2016						2015
	IMAX Theater Backlog						IMAX Theater Backlog
	JRSA		Sale / Lease		Total		JRSA		Sale / Lease		Total
Domestic Total (United States & Canada)		44		11		55		30		21		51
International:
Greater China		315		66		381		152		66		218
Asia (excluding Greater China)		16		21		37		12		20		32
Western Europe		9		7		16		8		8		16
Russia & the CIS		—		22		22		—		23		23
Latin America		—		16		16		—		22		22
Rest of the World		5		15		20		7		15		22
International Total		345		147		492		179		154		333
Worldwide Total		389		158		547		209		175		384

Approximately 89.9% of IMAX theater system arrangements in backlog as at September 30, 2016 are scheduled to be installed in international markets (2015 – 86.7%).

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The following reflects the Company’s signings and installations:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
Theater System Signings:
Full new sales and sales-type lease arrangements		5			11			52			42	(1)
New joint revenue sharing arrangements		156			22			238			39
Total new theaters		161			33			290			81
Upgrades of IMAX theater systems		1			2			3			5
Total theater signings		162			35			293			86
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
Theater System Installations:
Full new sales and sales-type lease arrangements		15			12			33	(2)		32	(2)
New joint revenue sharing arrangements		33			22			63			48
Total new theaters		48			34			96			80
Upgrades of IMAX theater systems		2	(3)		10	(3)		13	(4)(5)		12	(4)(5)
Total theater installations		50			44			109			92

(1) Includes one signing which replaced a theater system under an existing arrangement in backlog.

(2) Includes one used theater system (2015 – one theater system).

(3) Includes two installations of an upgrade to a laser-based digital system under sales and sales-type lease arrangements (2015 – nine laser-based digital systems, seven under a sales and sales-type lease arrangement, one under a short-term operating lease arrangement and one under a joint revenue sharing arrangement).

(4) Includes 11 installations of an upgrade to a laser-based digital system under sales and sales-type lease arrangements (2015 – 10 laser-based digital systems, eight under a sales and sales-type lease arrangement, one under a short-term operating lease arrangement and one under a joint revenue sharing arrangement).

(5) Includes two installations of an upgrade to a xenon-based digital system under sales arrangements (2015 – two xenon-based digital systems, one under a sales and sales-type lease arrangement and one under a short-term operating lease arrangement).

The Company now expects that it will install 155 new theater systems (excluding upgrades) in 2016. The Company’s installation estimates includes scheduled systems from backlog, as well as the Company’s estimate of installations from arrangements that will sign and install in the same calendar year. The Company cautions, however, that theater system installations may slip from period to period over the course of the Company’s business, usually for reasons beyond its control.

Films: Digital Re-Mastering (IMAX DMR) and other film revenue

Digital Re-Mastering (IMAX DMR)

In 2002, the Company developed a proprietary technology to digitally re-master Hollywood films into IMAX digital cinema package format or 15/70-format film for exhibition in IMAX theaters at a modest cost that is incurred by the Company. This system, known as IMAX DMR, digitally enhances the image resolution of motion picture films for projection on IMAX screens while maintaining or enhancing the visual clarity and sound quality to levels for which The IMAX Experience is known. This technology enabled the IMAX theater network to release Hollywood films simultaneously with their broader domestic release. The development of this technology was critical in helping the Company execute its strategy of expanding its commercial theater network by establishing IMAX theaters as a key, premium distribution platform for Hollywood films. In a typical IMAX DMR film arrangement, the Company receives a percentage, which in recent years has ranged between 10-15%, of net box-office receipts of any commercial films released in the IMAX network from the applicable film studio for the conversion of the film to the IMAX DMR format and for access to the Company’s premium distribution platform.

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IMAX films benefit from enhancements made by individual filmmakers exclusively for the IMAX release, and filmmakers and studios have sought IMAX-specific enhancements in recent years to generate interest in and excitement for their films. Such enhancements include shooting selected scenes with IMAX cameras to increase the audience’s immersion in the film and taking advantage of the unique dimensions of the IMAX screen by shooting the film in a larger aspect ratio. Certain films also enjoy early release windows in IMAX, including Everest: An IMAX 3D Experience and The Walk: The IMAX Experience, which were released one week early in IMAX theaters in September 2015. Several recent films have featured select sequences shot with IMAX cameras including Captain America: Civil War: An IMAX 3D Experience, released in May 2016; Batman v Superman: Dawn of Justice: An IMAX 3D Experience, released in March 2016; Star Wars: The Force Awakens: An IMAX 3D Experience, released in December 2015; Interstellar: The IMAX Experience, released in November 2014; and Transformers Age of Extinction: An IMAX 3D Experience, released in June 2014. In addition, Marvel’s Avengers: Infinity War — Part 1: An IMAX 3D Experience and Avengers: Infinity War — Part 2: An IMAX 3D Experience are expected to be shot in their entireties using the IMAX camera, which is the second time a full feature length movie will be filmed with the IMAX cameras. Sully: The IMAX Experience, released in August 2016, was shot with IMAX cameras for a majority of the film.

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

The Company believes that the growth in international box-office is an important driver of future growth for the Company. During nine months ended September 30, 2016, 62.8% of the Company’s gross box-office from IMAX DMR films was generated in international markets, as compared to 63.7% in the nine months ended September 30, 2015. To support growth in international markets, the Company has sought to bolster its international film strategy, supplementing the Company’s film slate of Hollywood DMR titles with appealing local IMAX DMR releases in select markets. During 2015, eleven local language IMAX DMR films, including eight in China and three in Japan were released to the IMAX theater network. During the nine months ended September 30, 2016, eleven local language IMAX DMR films, including eight in China, two in Russia and one in Japan were released to the IMAX theater network. The Company expects to announce additional local language IMAX DMR films to be released to the IMAX theater network in the remainder of 2016 and beyond.

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

• Inferno: The IMAX Experience (Sony Pictures, October 2016);

• Jack Reacher: Never Go Back: The IMAX Experience (Paramount Pictures, October 2016);

• Doctor Strange: The IMAX Experience (Walt Disney Studios, November 2016);

• Fantastic Beasts and Where to Find Them: The IMAX Experience (Warner Bros. Pictures, November 2016); and

• Rogue One: A Star Wars Story: The IMAX Experience (Walt Disney Studios, December 2016).

In addition, the Company released an IMAX documentary film, Voyage of Time, on October 7, 2016.

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

• xXx: Return of Xander Cage: The IMAX Experience (Paramount Pictures, January 2017);

• Resident Evil: The Final Chapter: The IMAX Experience (Sony Pictures, February 2017);

• Attraction: The IMAX Experience (Art Pictures Studio, January 2017, Russia only);

• The Lego Batman Movie: The IMAX Experience (Warner Bros. Pictures, February 2017);

• The Great Wall: The IMAX Experience (Legendary East Ltd., February 2017);

• Logan: The IMAX Experience (20th Century Fox, March 2017);

• Kong: Skull Island: The IMAX Experience (Warner Bros. Pictures, March 2017);

• Beauty and The Beast: The IMAX Experience (Walt Disney Studios, March 2017);

• Ghost in the Shell: The IMAX Experience (Paramount Pictures, March 2017);

• Fast 8: The IMAX Experience (Universal Pictures, April 2017);

• Guardians of the Galaxy Vol. 2: The IMAX Experience (Walt Disney Studios, May 2017);

• Pirates of the Caribbean: Dead Men Tell No Tales: The IMAX Experience (Walt Disney Studios, May 2017);

• Wonder Woman: The IMAX Experience (Warner Bros. Pictures, June 2017);

52

• The Mummy: The IMAX Experience (Universal Pictures, June 2017);

• Transformers: The Last Knight: The IMAX Experience (Paramount Pictures, June 2017);

• Spider-Man: Homecoming: The IMAX Experience (Sony Pictures-distributed and Marvel Studios and Sony Pictures-produced, July 2017);

• Dunkirk: The IMAX Experience (Warner Bros. Pictures, July 2017);

• The Solutrean: The IMAX Experience (Sony Pictures, September 2017);

• The Lego Ninjago Movie: The IMAX Experience (Warner Bros. Pictures, September 2017);

• Blade Runner 2049: The IMAX Experience (Warner Bros. Pictures, October 2017);

• Geostorm: The IMAX Experience (Warner Bros. Pictures, October 2017);

• Thor: Ragnarök: The IMAX Experience (Walt Disney Studios, November 2017);

• Justice League: The IMAX Experience (Warner Bros. Pictures, November 2017); and

• Star Wars: Episode VIII: The IMAX Experience (Walt Disney Studios, December 2017).

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

Other Film Revenues: Film Distribution and Post-Production

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

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

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, management evaluates its estimates, including those related to selling prices associated with the individual elements in multiple element arrangements; residual values of leased theater systems; economic lives of leased assets; allowances for potential uncollectibility of accounts receivable, financing receivables and net investment in leases; write-downs for inventory obsolescence; ultimate revenues for film assets; impairment provisions for film assets, long-lived assets and goodwill; depreciable lives of property, plant and equipment; useful lives of intangible assets; pension plan and post retirement assumptions; accruals for contingencies including tax contingencies; valuation allowances for deferred income tax assets; and, estimates of the fair value and expected exercise dates of stock-based payment awards. Management bases its estimates on historical experience, future expectations and other assumptions that are believed to be reasonable at the date of the condensed consolidated financial statements. Actual results may differ from these estimates due to uncertainty involved in measuring, at a specific point in time, events which are continuous in nature, and differences may be material. The Company’s significant accounting policies are discussed in Item 7 of the Company’s 2015 Form 10-K.

Impact of Recently Issued Accounting Pronouncements

See note 2 to the condensed consolidated financial statements in Item 1 for information regarding the Company’s recent changes in accounting policies and the impact of recently issued accounting pronouncements impacting the Company.

Non-GAAP Financial Measures

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

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RESULTS OF OPERATIONS

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

• IMAX Theater Systems

• The IMAX systems segment, which is comprised of the design, manufacture, sale or lease of IMAX theater projection system equipment.

• The theater system maintenance segment, which is comprised of the maintenance of IMAX theater projection system equipment in the IMAX theater network.

• The joint revenue sharing arrangements segment, which is comprised of the provision of IMAX theater projection system equipment to exhibitors in exchange for a certain percentage of box-office receipts, and in some cases, concession revenue and/or a small upfront or initial payment.

• The other segment, which includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items.

• Film

• The film production and IMAX DMR segment, which is comprised of the production of films and performance of film re-mastering services.

• The film distribution segment, which includes the distribution of films for which the Company has distribution rights.

• The film post-production segment, which includes the provision of film post-production and film print services.

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

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Three Months Ended September 30, 2016 versus Three Months Ended September 30, 2015

The Company reported net income of $4.4 million or $0.07 per basic and diluted share for the third quarter of 2016 as compared to net income of $10.5 million or $0.15 per basic share and $0.14 per diluted share for the third quarter of 2015. Net income for the third quarter of 2016 includes a $7.7 million charge, or $0.11 per diluted share (2015 — $4.3 million or $0.06 per diluted share), for stock-based compensation. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $9.9 million, or $0.15 per diluted share, for the third quarter of 2016 as compared to adjusted net income of $13.9 million, or $0.19 per diluted share, for the third quarter of 2015. Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation and the related tax impact, was $7.9 million, or $0.12 per diluted share, for the third quarter of 2016 as compared to adjusted net income attributable to common shareholders of $12.0 million, or $0.17 per diluted share, for the third quarter of 2015. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:

(In thousands of U.S. dollars, except per share amounts)	Three Months Ended						Three Months Ended
	September 30, 2016						September 30, 2015
	Net Income			Diluted EPS			Net Income			Diluted EPS
Reported net income	$	4,384		$	0.07		$	10,514		$	0.14	(1)
Adjustments:
Stock-based compensation		7,742			0.11			4,252			0.06
Tax impact on items listed above		(2,210	)		(0.03	)		(901	)		(0.01	)
Adjusted net income		9,916			0.15			13,865			0.19	(1)
Net income attributable to non-controlling interests		(1,859	)		(0.03	)		(1,904	)		(0.02	)
Stock-based compensation (net of tax of less than $0.1 million) attributable to non-controlling interests		(128	)		—			—			—
Adjusted net income attributable to common shareholders	$	7,929		$	0.12		$	11,961		$	0.17	(1)
Weighted average diluted shares outstanding					67,746						70,860

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

The following table sets forth the breakdown of revenue and gross margin by category for the three months ended September 30:

(In thousands of U.S. dollars)	Revenue				Gross Margin
	2016		2015		2016		2015
IMAX Theater Systems
IMAX Systems
Sales and sales-type leases(1)	$	21,804	$	26,635	$	12,936	$	9,775
Ongoing rent, fees, and finance income(2)		3,883		3,518		3,807		3,334
Other		4,904		3,221		69		(267	)
		30,591		33,374		16,812		12,842
Theater System Maintenance		10,293		9,337		3,398		3,521
Joint Revenue Sharing Arrangements		19,698		19,797		10,980		12,130
Film
Production and IMAX DMR		21,549		20,865		12,448		13,929
Film distribution and post-production		4,419		1,728		1,261		(33	)
		25,968		22,593		13,709		13,896
	$	86,550	$	85,101	$	44,899	$	42,389

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(1) Includes initial payments and the present value of fixed minimum payments from equipment, sales and sales-type lease transactions.

(2) Includes rental income from operating leases, contingent rents from operating and sales-type leases, contingent fees from sales arrangements and finance income.

Revenues and Gross Margin

The Company’s revenues for the third quarter of 2016 increased 1.7% to $86.6 million from $85.1 million in third quarter of 2015, primarily due to an increase in revenues from the Company’s film distribution and post-production segment, mostly offset by a decrease in revenue from the IMAX systems segment. The gross margin across all segments in the third quarter of 2016 was $44.9 million, or 51.9% of total revenue, compared to $42.4 million, or 49.8% of total revenue in the third quarter of 2015.

IMAX Systems

IMAX systems revenue decreased 8.3% to $30.6 million in the third quarter of 2016 as compared to $33.4 million in third quarter of 2015. The Company installed 17 theater systems under sales or sales-type lease arrangements in the third quarter of 2016 versus 20 theater systems in the third quarter of 2015.

Revenue from sales and sales-type leases was $21.8 million in the third quarter of 2016, as compared to $26.6 million in the third quarter of 2015. The Company recognized revenue on 15 full, new theater systems which qualified as either sales or sales-type leases in the third quarter of 2016, with a total value of $19.0 million, versus 12 full, new theater systems in the third quarter of 2015 with a total value of $14.5 million. The Company also recognized revenue on the installation of two laser-based digital upgrades in the third quarter of 2016, with a total value of $2.6 million under sales arrangements, as compared to seven laser-based digital upgrades and one xenon-based digital upgrade in the third quarter of 2015, with a total value of $10.4 million. Digital upgrades typically have a lower sales prices and gross margin than full theater system installations.

Average revenue per full, new sales and sales-type lease systems was $1.3 million for the three months ended September 30, 2016, as compared to $1.2 million in the three months ended September 30, 2015. The average revenue per full, new sales and sales-type lease systems varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location or other various factors. Average revenue per digital upgrade was $1.3 million for the three months ended September 30, 2016, which was consistent with the three months ended September 30, 2015.

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

	Three Months Ended September 30,
	2016			2015
New IMAX digital theater systems - installed and recognized
Sales and sales-types lease arrangements		15			12	(1)
Joint revenue sharing arrangements		33			22
Total new theater systems		48			34
IMAX digital theater system upgrades - installed and recognized
Sales and sales-types lease arrangements		2	(1)		8	(1)
Short-term operating lease arrangements		—			1	(1)
Joint revenue sharing arrangements		—			1	(1)
Total upgraded theater systems		2			10
Total theater systems installed		50			44

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(1) Includes two laser-based digital system configurations under sales arrangements (2015 – one new laser-based digital system configuration and nine laser-based digital system configuration upgrades).

IMAX theater system margin from full, new sales and sales-type lease systems was 68.8% in the third quarter of 2016 which was higher than the 58.6% experienced in the third quarter of 2015. The stronger margin was driven by variances in the product mix of systems installed in the third quarter of 2016 as compared to the prior year period. Gross margin from digital upgrades was less than $0.1 million in the third quarter of 2016, as compared to $1.2 million in the third quarter of 2015. Gross margin varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location and other various factors.

Revenues from sales and sales-type leases include settlement revenue of $0.2 million in the third quarter of 2016, as compared to $nil in the third quarter of 2015.

Ongoing rent revenue and finance income was $3.9 million in the third quarter of 2016 compared to $3.5 million in the third quarter of 2015. Gross margin for ongoing rent and finance income increased 14.2% to $3.8 million in the third quarter of 2016 from $3.3 million in the third quarter of 2015. Contingent fees included in this caption amounted to $0.9 million and $0.8 million in the three months ended September 30, 2016 and 2015, respectively.

Other revenue increased to $4.9 million in the third quarter of 2016 as compared to $3.2 million in 2015. Other revenue primarily includes revenue generated from the Company’s theater operations, camera rental business and after-market sales of projection system parts and 3D glasses. The growth in revenue is primarily the result of an increase in revenue from after-market sales and camera rentals during third quarter of 2016 as compared to the prior year period.

The gross margin recognized from other revenue was $0.1 million in the third quarter of 2016 as compared to a loss of $0.3 million in the third quarter of 2015, primarily driven by higher margins from the Company’s camera rentals in the current period versus the prior year comparative period.

Theater System Maintenance

Theater system maintenance revenue increased 10.2% to $10.3 million in the third quarter of 2016 from $9.3 million in the third quarter of 2015. Theater system maintenance gross margin was $3.4 million in the third quarter of 2016 versus $3.5 million in the third quarter of 2015, due to the number and nature of maintenance issues experienced in the current quarter versus the prior year comparative period. Maintenance revenue continues to grow as the number of theaters in the IMAX theater network grows. Maintenance margins vary depending on the mix of theater system configurations in the theater network, volume-pricing related to larger relationships and the timing and the date(s) of installation and/or service.

Joint Revenue Sharing Arrangements

Revenues from joint revenue sharing arrangements was relatively consistent at $19.7 million in the third quarter of 2016 and $19.8 million in the third quarter of 2015. The Company ended the third quarter of 2016 with 592 theaters operating under joint revenue sharing arrangements, as compared to 498 theaters at the end of the third quarter of 2015, an increase of 18.9%. The decrease in revenues from joint revenue sharing arrangements was largely due to lower film box-office performance versus the prior year period, offset by an increase in the number of theater systems installed in the current period coupled with continued network growth. During the third quarter of 2016, the Company installed 33 full, new theaters under joint revenue sharing arrangements, as compared to 22 full new theaters during the third quarter of 2015.

The gross margin from joint revenue sharing arrangements decreased 9.5% to $11.0 million in the third quarter of 2016 from $12.1 million in the third quarter of 2015. Included in the calculation of gross margin for the third quarter of 2016 were certain advertising, marketing and commission costs primarily associated with new theater launches of $1.4 million, as compared to $1.3 million during the third quarter of 2015.

Film

Revenue from the Company’s film segments increased 14.9% to $26.0 million in the third quarter of 2016 from $22.6 million in the third quarter of 2015 primarily due to higher film distribution and post-production revenue. Film production and IMAX DMR revenues increased 3.3% to $21.5 million in the third quarter of 2016 from $20.9 million in the third quarter of 2015, mostly the result of continued theater network growth. Gross box-office generated by IMAX DMR films decreased 1.8% to $186.3 million in the third

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quarter of 2016 from $189.8 million in the third quarter of 2015. Gross box-office per screen for the third quarter of 2016 averaged $184,700, in comparison to $220,500 in the third quarter of 2015. In the third quarter of 2016, gross box-office was generated primarily by the exhibition of 29 films (21 new and 8 carryovers), as compared to 21 films (14 new and 7 carryovers) exhibited in the third quarter of 2015:

Three Months Ended September 30, 2016 - Films Exhibited	Three Months Ended September 30, 2015 - Films Exhibited
The Crew: An IMAX 3D Experience	Wolf Totem: An IMAX 3D Experience
The Jungle Book: An IMAX 3D Experience	The Avengers: Age of Ultron: An IMAX 3D Experience
Alice in Wonderland: Through the Looking Glass: An IMAX  3D Experience	Jurassic World: An IMAX 3D Experience
Teenage Mutant Ninja Turtles: Out of the Shadows: An IMAX  3D Experience	Terminator Genisys: An IMAX 3D Experience
Warcraft: An IMAX 3D Experience	Mad Max: Fury Road: An IMAX 3D Experience
Finding Dory: An IMAX 3D Experience	Inside Out: An IMAX 3D Experience
Independence Day: Resurgence: An IMAX 3D Experience	The Monk Comes Down the Mountain: An IMAX 3D  Experience
The Legend of Tarzan: An IMAX 3D Experience	Minions: An IMAX 3D Experience
Ice Age: Collision Course: An IMAX 3D Experience	Monster Hunt: An IMAX 3D Experience
The BFG: An IMAX 3D Experience	Ant-Man: An IMAX 3D Experience
Jason Bourne: The IMAX Experience	Pixels: An IMAX 3D Experience
Godzilla: Resurgence: The IMAX Experience	Mission: Impossible – Rogue Nation: The IMAX Experience
Cold War 2: An IMAX 3D Experience	Attack on Titan: Part 1: The IMAX Experience
The Secret Life of Pets: An IMAX 3D Experience	To the Fore: The IMAX Experience
Ghostbusters: An IMAX 3D Experience	The Man from U.N.C.L.E.: The IMAX Experience
For a Few Bullets: The IMAX Experience	Go Away Mr. Tumor: The IMAX Experience
Star Trek Beyond: An IMAX 3D Experience	The Transporter Refueled: The IMAX Experience
League of Gods: An IMAX 3D Experience	Everest: An IMAX 3D Experience
Skiptrace: An IMAX 3D Experience	Attack on Titan: Part 2: The IMAX Experience
Time Raiders: An IMAX 3D Experience	Lost in Hong Kong: The IMAX Experience
Suicide Squad: An IMAX 3D Experience	The Walk: An IMAX 3D Experience
Ben-Hur: An IMAX 3D Experience
Sully: The IMAX Experience
My War: An IMAX 3D Experience
The Magnificent Seven: The IMAX Experience
Storks: An IMAX 3D Experience
The Duelist: The IMAX Experience
Deepwater Horizon: The IMAX Experience
L.O.R.D.: An IMAX 3D Experience

Other revenues attributable to the film segment was $4.4 million in the third quarter of 2016 as compared to $1.7 million in the third quarter of 2015, primarily due to an increase in film distribution revenue from IMAX original films.

The Company’s gross margin from its film segments decreased 1.3% to $13.7 million in the third quarter of 2016 from $13.9 million in the third quarter of 2015. Film production and IMAX DMR gross margins decreased to $12.4 million from $13.9 million primarily due to lower film box-office performance and higher costs, including marketing, print and sound. Other gross margin attributable to the film segment was $1.3 million in the third quarter of 2016 as compared to a loss of less than $0.1 million in the third quarter of 2015, primarily due to the release of A Beautiful Planet earlier in 2016.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $30.7 million in the third quarter of 2016, as compared to $25.0 million in the third quarter of 2015. Selling, general and administrative expenses excluding the impact of stock-based compensation were $23.0 million in the third quarter of 2016, as compared to $20.7 million in the third quarter of 2015. The following reflects the significant items impacting selling, general and administrative expenses as compared to the prior year period:

• a $3.4 million increase in the Company’s stock-based compensation;

• a $2.1 million increase in staff costs related to the core business, including salaries and benefits; and

• a $0.5 million net increase in other general corporate expenditures including consulting, professional fees, travel and entertainment.

These increases were offset by a $0.3 million decrease due to a change in foreign exchange rates. During the third quarter ended September 30, 2016, the Company recorded a foreign exchange loss of $0.2 million for net foreign exchange gains/losses related to the translation of foreign currency denominated monetary assets and liabilities as compared to a loss of $0.5 million recorded in 2015.

Research and Development

Research and development expenses increased to $4.5 million in the third quarter of 2016 compared to $2.7 million in the third quarter of 2015 and are primarily attributable to the continued development of the Company’s commercial laser-based digital projection system, digital distribution and other initiatives. As of September 30, 2016, the Company had 33 laser-based digital theater systems in operation and 20 laser-based digital theater systems in backlog.

The Company intends for additional research and development to continue in the fourth quarter of 2016 and beyond as the Company supports further development of the commercial laser-based projection system. In addition to continued research and development with respect to its core business, the Company intends to conduct research and development in connection with the previously-announced cinema-grade VR camera to be developed in partnership with Google. The Company also plans to continue research and development activity in the future in other areas considered important to the Company’s continued commercial success, including further improving the reliability of its projectors, developing and manufacturing more IMAX cameras, enhancing the Company’s 2D and 3D image quality, expanding the applicability of the Company’s digital technology, developing IMAX theater systems’ capabilities in both home and live entertainment, and further enhancing the IMAX theater and sound system design through the addition of more channels and improvements to the DMR process.

Receivable Provisions, Net of Recoveries

Receivable provisions, net of recoveries for accounts receivable and financing receivables amounted to a net provision of $0.3 million in the third quarter of 2016 as compared to a net provision of $0.4 million in the third quarter of 2015.

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

Asset impairments and Other Charges

In the third quarter of 2016, the Company recorded a charge related to property, plant and equipment of $0.4 million reflecting assets that no longer meet capitalization requirements as compared to $1.2 million in the third quarter of 2015.

In the third quarter of 2016, the Company recorded a charge of $1.0 million reflecting the carrying value of a documentary film asset that exceeded the expected revenues generated from estimated future gross box-office. No such charge was recognized in the third quarter of 2015.

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Interest Income and Expense

Interest income was $0.4 million in the third quarter of 2016, as compared to $0.2 million in the third quarter of 2015.

Interest expense was $0.5 million in the third quarter of 2016 and 2015, respectively. Included in interest expense is the amortization of deferred finance costs in the amount of $0.1 million in the third quarter of 2016, as compared to $0.3 million in the third quarter of 2015. The Company’s policy is to defer and amortize all the costs relating to debt financing which are paid directly to the debt provider, over the life of the debt instrument.

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 numerous 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.

As at September 30, 2016, the Company had a gross deferred income tax asset of $26.5 million, against which the Company is carrying a $0.3 million valuation allowance. For the three months ended September 30, 2016, the Company recorded an income tax provision of $2.6 million, of which a provision of less than $0.1 million was related to an increase in its provision for uncertain tax positions.

The Company’s Chinese subsidiary has made certain enquiries of the Chinese State Administration of Taxation regarding the potential deductibility of certain stock based compensation for stock options issued by the Chinese subsidiary’s parent company, IMAX China Holding, Inc. In addition, Chinese regulatory authorities responsible for capital and exchange controls will need to review and approve the proposed transactions before they can be completed. There may be a requirement for future investment of funds into China in order to secure the deduction. Should the Company proceed, any such future investment would come from existing capital invested in the IMAX China group of companies being redeployed amongst the IMAX China group of companies, including the Chinese subsidiary. The Company is unable to reliably estimate the magnitude of the related tax benefits at this time.

Equity-Accounted Investments

The Company accounts for investments in new business ventures using the guidance of the FASB ASC 323. As at September 30, 2016, the equity method of accounting is being utilized for an investment with a carrying value of $nil (December 31, 2015 — $1.0 million). The Company’s accumulated losses in excess of its equity investment were $1.4 million as at September 30, 2016. For the three months ended September 30, 2016, gross revenues, cost of revenue and net loss for these investments were $nil, $1.6 million and $1.5 million, respectively (2015 — $nil, $1.9 million and $1.8 million, respectively). The Company recorded its proportionate share of the net loss which amounted to $0.7 million third quarter of 2016, compared to $0.4 million experienced in the third quarter of 2015.

Non-Controlling Interests

The Company’s condensed consolidated financial statements include the non-controlling interest in the net income of IMAX China resulting from the IMAX China Investment and the IMAX China IPO as well as the impact of a non-controlling interest in its subsidiary created for the Film Fund activity. For the three months ended September 30, 2016, the net income attributable to non-controlling interests of the Company’s subsidiaries was $1.9 million (2015 — $1.9 million).

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Nine Months Ended September 30, 2016 versus Nine Months Ended September 30, 2015

The Company reported net income of $27.2 million or $0.40 per basic and diluted share for the nine months ended September 30, 2016, as compared to net income of $38.4 million or $0.54 per basic share and $0.53 per diluted share for the nine months ended September 30, 2015. Net income for the nine months ended September 30, 2016 includes a $22.5 million charge or $0.32 per diluted share (2015 — $14.9 million or $0.21 per diluted share) for stock-based compensation. Adjusted net income, which consists of net income excluding the impact of stock-based compensation and the related tax impact, was $43.3 million or $0.63 per diluted share for the nine months ended September 30, 2016, as compared to adjusted net income of $50.7 million or $0.70 per diluted share for the nine months ended September 30, 2015. Adjusted net income attributable to common shareholders, which consists of net income attributable to common shareholders excluding the impact of stock-based compensation and the related tax impact, was $35.5 million or $0.52 per diluted share for the nine months ended September 30, 2016, as compared to adjusted net income attributable to common shareholders of $45.7 million or $0.63 per diluted share for the nine months ended September 30, 2015. A reconciliation of net income and net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to adjusted net income, adjusted net income per diluted share, adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per diluted share is presented in the table below:

(In thousands of U.S. dollars, except per share amounts)	Nine Months Ended September 30, 2016						Nine Months Ended September 30, 2015
	Net Income			Diluted EPS			Net Income			Diluted EPS
Reported net income	$	27,244		$	0.40		$	38,379		$	0.53	(1)
Adjustments:
Stock-based compensation		22,485			0.32			14,930			0.21
Tax impact on items listed above		(6,394	)		(0.09	)		(2,603	)		(0.04	)
Adjusted net income		43,335			0.63			50,706			0.70	(1)
Net income attributable to non-controlling interests		(7,401	)		(0.11	)		(5,028	)		(0.07	)
Stock-based compensation (net of tax of $0.1 million) attributable to non-controlling interests		(421	)		—			—			—
Adjusted net income attributable to common shareholders	$	35,513		$	0.52		$	45,678		$	0.63	(1)
Weighted average diluted shares outstanding					68,721						71,102

(1) Includes impact of $0.7 million of accretion charges associated with redeemable Class C shares of IMAX China.

The following table sets forth the breakdown of revenue and gross margin by category for the nine months ended September 30:

(In thousands of U.S. dollars)	Revenue				Gross Margin
	2016		2015		2016			2015
IMAX Theater Systems
IMAX Systems
Sales and sales-type leases(1)	$	58,522	$	53,924	$	26,795		$	24,720
Ongoing rent, fees, and finance income(2)		11,986		10,708		11,457			10,111
Other		14,394		11,320		(251	)		(421	)
		84,902		75,952		38,001			34,410
Theater System Maintenance		30,031		27,345		10,207			9,891
Joint Revenue Sharing Arrangements		66,940		67,259		44,716			46,816
Film
Production and IMAX DMR		78,767		75,144		52,398			55,642
Film distribution and post-production		9,781		8,772		2,030			646
		88,548		83,916		54,428			56,288
	$	270,421	$	254,472	$	147,352		$	147,405

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(1) Includes initial payments and the present value of fixed minimum payments from equipment, sales and sales-type lease transactions.

(2) Includes rental income from operating leases, contingent rents from operating and sales-type leases, contingent fees from sales arrangements and finance income.

Revenues and Gross Margin

The Company’s revenues for the nine months ended September 30, 2016 increased 6.3% to $270.4 million from $254.5 million in the nine months ended September 30, 2015, largely due to an increase in revenues from the Company’s IMAX systems and film segments. The gross margin across all segments in the nine months ended September 30, 2016 was $147.4 million, or 54.5% of total revenue, and $147.4 million, or 57.9% of total revenue in the nine months ended September 30, 2015. Gross margin, excluding the impact of these digital upgrades, was 57.3% of total revenue in the nine months ended September 30, 2016, as compared to 60.4% in the nine months ended September 30, 2015.

IMAX Systems

IMAX systems revenue increased 11.8% to $84.9 million in the nine months ended September 30, 2016, as compared to $76.0 million in the nine months ended September 30, 2015. The Company installed 46 theater systems under sales or sales-type lease arrangements in the nine months ended September 30, 2016 versus 41 theater systems in the nine months ended September 30, 2015.

Revenue from sales and sales-type leases increased 8.5% to $58.5 million in the nine months ended September 30, 2016 from $53.9 million in the nine months ended September 30, 2015. The Company recognized revenue on 32 full, new theater systems which qualified as either sales or sales-type leases in the nine months ended September 30, 2016, with a total value of $40.9 million, versus 31 full, new theater systems in the nine months ended September 30, 2015 with a total value of $38.6 million. The Company also recognized revenue on the installation of 11 laser-based digital upgrades and two xenon-based digital upgrades in the nine months ended September 30, 2016, with a total value of $16.2 million, as compared to eight laser-based digital upgrades and one xenon-based digital upgrade in the nine months ended September 30, 2015, with a total value of $12.3 million. Digital upgrades typically have lower sales prices and gross margin than full theater system installations. There was one used xenon-based theater system installed in the nine months ended September 30, 2016 with a total value of $0.3 million, as compared to one xenon-based digital system installed and recognized in the nine months ended September 30, 2015 with a total value of $0.2 million.

Average revenue per full, new sales and sales-type lease systems was $1.3 million in the nine months ended September 30, 2016 and $1.2 million for the nine months ended September 30, 2015. The average revenue per full, new sales and sales-type lease systems varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location or other various factors. Average revenue per digital upgrade was $1.2 million in the nine months ended September 30, 2016, as compared to $1.4 million in the nine months ended September 30, 2015.

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

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	Nine Months Ended September 30,
	2016			2015
New IMAX xenon-based digital theater systems - installed and recognized
Sales and sales-types lease arrangements		33	(1)		32	(2)
Joint revenue sharing arrangements		63	(1)		48
Total new theater systems		96			80
IMAX xenon-based digital theater system upgrades - installed and recognized
Sales and sales-types lease arrangements		13	(1)		9	(2)
Short-term operating lease arrangements		—			2	(2)
Joint revenue sharing arrangements		—			1	(2)
Total upgraded theater systems		13			12
Total theater systems installed		109			92

(1) Includes 15 laser-based digital system configurations (four new laser-based digital systems, two under sales arrangements and two under joint revenue sharing arrangements and 11 laser-based digital system upgrades).

(2) Includes 11 laser-based digital system configurations (one new laser-based digital system and 10 laser-based digital system upgrades).

IMAX theater system margin from full, new sales and sales-type lease systems, excluding the impact of settlements, was 64.5% in the nine months ended September 30, 2016, as compared to 63.0% in the nine months ended September 30, 2015. Gross margin from digital upgrades was $1.7 million in the nine months ended September 30, 2016, as compared to $1.8 million in the nine months ended September 30, 2015. In addition, in the nine months ended September 30, 2016, the Company recorded a charge of $0.2 million upon the upgrade of xenon-based digital systems under operating lease arrangements to laser-based digital systems under sales arrangements in IMAX systems margin. In the nine months ended September 30, 2015, there was a reduction of $0.4 million included in gross margin due to a reduction in the net realizable value of its inventories. No similar charge was recorded in the nine months ended September 30, 2016. Gross margin varies depending upon the number of theater system commitments with a single respective exhibitor, an exhibitor’s location and other various factors.

Revenues from sales and sales-type leases include settlement revenue of $1.0 million in the nine months ended September 30, 2016, as compared to $0.1 million in the nine months ended September 30, 2015. Gross margin from sales and sales-type leases include settlement margin of $0.9 million in the nine months ended September 30, 2016, as compared to $0.1 million in the nine months ended September 30, 2015.

Ongoing rent revenue and finance income increased to $12.0 million in the nine months ended September 30, 2016, as compared to $10.7 million in the nine months ended September 30, 2015. Gross margin for ongoing rent and finance income increased to $11.5 million in the nine months ended September 30, 2016, compared to $10.1 million in the nine months ended September 30, 2015. Contingent fees included in this caption amounted to $3.1 million and $2.0 million in the nine months ended September 30, 2016 and 2015, respectively.

Other revenue increased to $14.4 million in the nine months ended September 30, 2016, as compared to $11.3 million in the nine months ended September 30, 2015. Other revenue primarily includes revenue generated from the Company’s theater operations, camera rental business, new business initiatives and after-market sales of projection system parts and 3D glasses. The growth in revenue is primarily the result of an increase in revenue from after-market sales and camera rentals in the nine months ended September 30, 2016 versus prior year comparative period.

The gross margin recognized from other revenue was a loss of $0.3 million in the nine months ended September 30, 2016, as compared to a loss of $0.4 million in the nine months ended September 30, 2015.

Theater System Maintenance

Theater system maintenance revenue increased 9.8% to $30.0 million in the nine months ended September 30, 2016 from $27.3 million in the nine months ended September 30, 2015. Theater system maintenance gross margin increased to $10.2 million in the nine

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months ended September 30, 2016 from $9.9 million in the nine months ended September 30, 2015. Maintenance revenue continues to grow as the number of theaters in the IMAX theater network grows. Maintenance margins vary depending on the mix of theater system configurations in the theater network, volume-pricing related to larger relationships and the timing and the date(s) of installation and/or service.

Joint Revenue Sharing Arrangements

Revenues from joint revenue sharing arrangements was $66.9 million in the nine months ended September 30, 2016, as compared to $67.3 million in the nine months ended September 30, 2015. As at September 30, 2016, the Company’s theater network included 592 theaters operating under joint revenue sharing arrangements, as compared to 498 theaters at the end of nine months ended September 30, 2015, an increase of 18.9%. During the nine months ended September 30, 2016, the Company installed 63 full, new theaters under joint revenue sharing arrangements, as compared to 48 full new theaters during the nine months ended September 30, 2015.

The gross margin from joint revenue sharing arrangements was $44.7 million in the nine months ended September 30, 2016, as compared to $46.8 million in the nine months ended September 30, 2015. Included in the calculation of gross margin for the nine months ended September 30, 2016, were certain advertising, marketing and commission costs primarily associated with new theater launches of $2.9 million, as compared to $2.7 million for such expenses in the nine months ended September 30, 2015.

Film

Revenue from the Company’s film segments was $88.5 million in the nine months ended September 30, 2016 as compared to $83.9 million in the nine months ended September 30, 2015. Gross box-office generated by IMAX DMR films increased 3.1% to $719.1 million in the nine months ended September 30, 2016 from $697.5 million in the nine months ended September 30, 2015, primarily due to continued network growth. Film production and IMAX DMR revenues increased 4.8% to $78.8 million in the nine months ended September 30, 2016 from $75.1 million in the nine months ended September 30, 2015. Gross box-office per screen for the nine months ended September 30, 2016 averaged $732,600 in comparison to $829,000 in the nine months ended September 30, 2015. In the nine months ended September 30, 2016, gross box-office was generated primarily from the exhibition of 48 films listed below (42 new and 6 carryovers) which was consistent with the 48 (37 new and 11 carryover) films exhibited in the nine months ended September 30, 2015:

Nine Months Ended September 30, 2016 - Films Exhibited	Nine Months Ended September 30, 2015 - Films Exhibited
Interstellar: The IMAX Experience	Teenage Mutant Ninja Turtles: An IMAX 3D Experience
Mad Max: Fury Road: An IMAX 3D Experience	Fury: The IMAX Experience
The Walk: The IMAX Experience	Interstellar: The IMAX Experience
The Martian: An IMAX 3D Experience	Big Hero 6: An IMAX 3D Experience
Mojin: The Lost Legend (aka “The Ghouls”): An IMAX 3D Experience	Penguins of Madagascar: An IMAX 3D Experience
Star Wars: The Force Awakens: An IMAX 3D Experience	Exodus: Gods and Kings: An IMAX 3D Experience
The Revenant: The IMAX Experience	The Hobbit: The Battle of the Five Armies: An IMAX 3D Experience
The Finest Hours: An IMAX 3D Experience	Gone with the Bullets: An IMAX 3D Experience
Kung Fu Panda 3: An IMAX 3D Experience	Seventh Son: An IMAX 3D Experience
The Monkey King 2: An IMAX 3D Experience	Night at the Museum: Secret of the Tomb: An IMAX 3D Experience
Crouching Tiger, Hidden Dragon: Sword of Destiny: An IMAX  3D Experience	Taken 3: The IMAX Experience
Deadpool: The IMAX Experience	American Sniper: The IMAX Experience
Gods of Egypt: An IMAX 3D Experience	Game of Thrones: The IMAX Experience (Season 4, Episodes 9 and 10)
Zootopia: An IMAX 3D Experience	Kingsman: The Secret Service: The IMAX Experience
10 Cloverfield Lane: The IMAX Experience	Jupiter Ascending: An IMAX 3D Experience
The Divergent Series: Allegiant: The IMAX Experience	Fifty Shades of Grey: The IMAX Experience
Batman v Superman: Dawn of Justice: An IMAX 3D Experience

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The Crew: An IMAX 3D Experience	Wolf Totem: An IMAX 3D Experience
The Jungle Book: An IMAX 3D Experience	Dragon Blade: An IMAX 3D Experience
Captain America: Civil War: An IMAX 3D Experience	Focus: The IMAX Experience
X-Men: Apocalypse: An IMAX 3D Experience	Chappie: The IMAX Experience
Alice in Wonderland: Through the Looking Glass: An IMAX 3D Experience	Cinderella: The IMAX Experience
Teenage Mutant Ninja Turtles: Out of the Shadows: An IMAX 3D Experience	The Divergent Series: Insurgent: An IMAX 3D Experience
Warcraft: An IMAX 3D Experience	Furious 7: The IMAX Experience
Finding Dory: An IMAX 3D Experience	The Water Diviner: The IMAX Experience
Independence Day: Resurgence: An IMAX 3D Experience	Dragon Ball Z: Resurrection of ‘F’: An IMAX 3D Experience
The Legend of Tarzan: An IMAX 3D Experience	The Avengers: Age of Ultron: An IMAX 3D Experience
Ice Age: Collision Course: An IMAX 3D Experience	Tomorrowland: The IMAX Experience
The BFG: An IMAX 3D Experience	Jurassic World: An IMAX 3D Experience
Jason Bourne: The IMAX Experience	Terminator Genisys: An IMAX 3D Experience
Godzilla: Resurgence: The IMAX Experience	San Andreas: An IMAX 3D Experience
Cold War 2: An IMAX 3D Experience	Mad Max: Fury Road: An IMAX 3D Experience
The Secret Life of Pets: An IMAX 3D Experience	Inside Out: An IMAX 3D Experience
Ghostbusters: An IMAX 3D Experience	The Maze Runner: The IMAX Experience
For a Few Bullets: The IMAX Experience	The Monk Comes Down the Mountain: An IMAX 3D Experience
Star Trek Beyond: An IMAX 3D Experience	Minions: An IMAX 3D Experience
League of Gods: An IMAX 3D Experience	Monster Hunt: An IMAX 3D Experience
Skiptrace: An IMAX 3D Experience	Ant-Man: An IMAX 3D Experience
Time Raiders: An IMAX 3D Experience	Pixels: An IMAX 3D Experience
Suicide Squad: An IMAX 3D Experience	Mission: Impossible – Rogue Nation: The IMAX Experience
Ben-Hur: An IMAX 3D Experience	Attack on Titan: Part 1: The IMAX Experience
Sully: The IMAX Experience	To the Fore: The IMAX Experience
My War: An IMAX 3D Experience	The Man from U.N.C.L.E.: The IMAX Experience
The Magnificent Seven: The IMAX Experience	Go Away Mr. Tumor: The IMAX Experience
Storks: An IMAX 3D Experience	The Transporter Refueled: The IMAX Experience
The Duelist: The IMAX Experience	Everest: An IMAX 3D Experience
Deepwater Horizon: The IMAX Experience	Attack on Titan: Part 2: The IMAX Experience
L.O.R.D.: An IMAX 3D Experience	Lost in Hong Kong: The IMAX Experience
	The Walk: An IMAX 3D Experience

Other revenues attributable to the film segment increased to $9.8 million in the nine months ended September 30, 2016 from $8.8 million in the nine months ended September 30, 2015, primarily due to an increase in film distribution revenue from IMAX original films. The nine months ended September 30, 2016 includes the release of an IMAX original production, A Beautiful Planet on April 29, 2016, whereas no original films were released in the prior year comparative period.

The Company’s gross margin from its film segments decreased 3.3% in the nine months ended September 30, 2016 to $54.4 million from $56.3 million in the nine months ended September 30, 2015. Film production and IMAX DMR gross margins decreased to $52.4 million from $55.6 million primarily due to higher costs, including marketing and print and sound. Other gross margin attributable to the film segment was $2.0 million in the nine months ended September 30, 2016, as compared to $0.6 million in the nine months ended September 30, 2015, primarily due to the release and performance of A Beautiful Planet, in the current year period

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Selling, General and Administrative Expenses

Selling, general and administrative expenses increased to $92.7 million in the nine months ended September 30, 2016, as compared to $82.3 million in the nine months ended September 30, 2015. Selling, general and administrative expenses excluding the impact of stock-based compensation were $70.2 million in the nine months ended September 30, 2016, as compared to $67.4 million in the nine months ended September 30, 2015. The following reflects the significant items impacting selling, general and administrative expenses as compared to the prior year period:

• a $7.6 million increase in the Company’s stock-based compensation;

• a $4.0 million increase in staff costs related to the core business, including salaries and benefits; and

• a $0.2 million net increase in other general corporate expenditures, including travel and entertainment.

These increases were offset by a $1.4 million decrease due to a change in foreign exchange rates. During the nine months ended September 30, 2016, the Company recorded a foreign exchange loss of $0.1 million for net foreign exchange gains/losses related to the translation of foreign currency denominated monetary assets and liabilities as compared to a loss of $1.5 million recorded in the nine months ended September 30, 2015.

Research and Development

Research and development expenses increased to $11.6 million in the nine months ended September 30, 2016 compared to $9.6 million in the nine months ended September 30, 2015 and are primarily attributable to the continued development of the Company’s new laser-based digital projection system, digital distribution and other initiatives. As of September 30, 2016, the Company had 33 laser-based digital theater systems in operation and 20 laser-based digital theater systems in backlog. In 2015, the Company introduced its new private home theater in China.

The Company intends for additional research and development to continue in the fourth quarter of 2016 and beyond as the Company supports further development of the commercial laser-based projection system. In addition to continued research and development with respect to its core business, the Company intends to conduct research and development in connection with the previously-announced cinema-grade VR camera to be developed in partnership with Google. The Company also plans to continue research and development activity in the future in other areas considered important to the Company’s continued commercial success, including further improving the reliability of its projectors, developing and manufacturing more IMAX cameras, enhancing the Company’s 2D and 3D image quality, expanding the applicability of the Company’s digital technology, developing IMAX theater systems’ capabilities in both home and live entertainment, and further enhancing the IMAX theater and sound system design through the addition of more channels and improvements to the DMR process.

Receivable Provisions, Net of Recoveries

Receivable provisions, net of recoveries for accounts receivable and financing receivables amounted to a net provision of $0.6 million in the nine months ended September 30, 2016, as compared to $0.7 million in the nine months ended September 30, 2015.

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

Asset Impairments and Other Charges

In the nine months ended September 30, 2016, the Company recognized a $0.2 million other-than-temporary impairment of its investments as the value is not expected to recover based on the length of time and extent to which the market value has been less than cost. In the nine months ended September 30, 2015, the Company recognized a similar charge of $0.4 million.

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In the nine months ended September 30, 2016, the Company recorded a charge related to property, plant and equipment of $0.8 million reflecting assets that no longer meet the capitalization requirements, as compared to $1.5 million in the nine months ended September 30, 2015.

In the nine months ended September 30, 2016, the Company recorded a charge of $1.0 million reflecting the carrying value of a documentary film asset that exceeded the expected revenues generated from estimated future gross box-office. No such charge was recognized in the nine months ended September 30, 2015.

Interest Income and Expense

Interest income was $1.2 million in the nine months ended September 30, 2016, as compared to $0.7 million in the nine months ended September 30, 2015.

Interest expense was $1.3 million in the nine months ended September 30, 2016, as compared to $1.2 million in the nine months ended September 30, 2015. Included in interest expense is the amortization of deferred finance costs in the amount of $0.4 million and $0.7 million in the nine months ended September 30, 2016 and 2015, respectively. The Company’s policy is to defer and amortize all the costs relating to debt financing which are paid directly to the debt provider, over the life of the debt instrument.

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 numerous 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.

As at September 30, 2016, the Company had a gross deferred income tax asset of $26.5 million, against which the Company is carrying a $0.3 million valuation allowance. For the nine months ended September 30, 2016, the Company recorded an income tax provision of $9.6 million, of which a provision of less than $0.1 million was related to an increase in its provision for uncertain tax positions.

The Company’s Chinese subsidiary has made certain enquiries of the Chinese State Administration of Taxation regarding the potential deductibility of certain stock based compensation for stock options issued by the Chinese subsidiary’s parent company, IMAX China Holding, Inc. In addition, Chinese regulatory authorities responsible for capital and exchange controls will need to review and approve the proposed transactions before they can be completed. There may be a requirement for future investment of funds into China in order to secure the deduction. Should the Company proceed, any such future investment would come from existing capital invested in the IMAX China group of companies being redeployed amongst the IMAX China group of companies, including the Chinese subsidiary. The Company is unable to reliably estimate the magnitude of the related tax benefits at this time.

Equity-Accounted Investments

The Company accounts for investments in new business ventures using the guidance of the FASB ASC 323. As at September 30, 2016, the equity method of accounting is being utilized for an investment with a carrying value of $nil (December 31, 2015 – $1.0 million). The Company’s accumulated losses in excess of its equity investment were $1.4 million as at September 30, 2016. For the nine months ended September 30, 2016, gross revenues, cost of revenue and net loss for these investments were $0.3 million, $6.0 million and $5.6 million, respectively (2015 — $nil, $6.4 million and $6.2 million, respectively). The Company recorded its proportionate share of the net loss which amounted to $2.5 million for the nine months ended September 30, 2016 compared to $1.6 million in the nine months ended September 30, 2015.

Non-Controlling Interests

The Company’s condensed consolidated financial statements include the non-controlling interest in the net income of IMAX China resulting from the IMAX China Investment and the IMAX China IPO as well as the impact of a non-controlling interest in its subsidiary created for the Film Fund activity. For the nine months ended September 30, 2016, the net income attributable to non-controlling interests of the Company’s subsidiaries was $7.4 million (2015 — $5.0 million).

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LIQUIDITY AND CAPITAL RESOURCES

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

The terms of the Credit Facility are set forth in the Fourth Amended and Restated Credit Agreement (the “Credit Agreement”), dated March 3, 2015, among the Company, the Guarantors, the lenders named therein, Wells Fargo Bank, National Association (“Wells Fargo”), as agent and issuing lender (Wells Fargo, together with the lenders named therein, the “Lenders”) and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner and in various collateral and security documents entered into by the Company and the Guarantors. Each of the Guarantors has also entered into a guarantee in respect of the Company’s obligations under the Credit Facility. On February 22, 2016, the Company amended the terms of the Credit Agreement to increase the general restricted payment basket thereunder (which covers, among other things, the repurchase of shares) from $150.0 million to $350.0 million in the aggregate after the amendment date.

Total amounts drawn and available under the Credit Facility at September 30, 2016 were $nil and $200.0 million, respectively (December 31, 2015 – $nil and $200.0 million, respectively).

Under the Credit Facility, the effective interest rate for the nine months ended September 30, 2016 was nil, as no amounts were outstanding during the period (2015 – nil).

The Credit Facility provides that the Company is required at all times to satisfy a Minimum Liquidity Test (as defined in the Credit Agreement) of at least $50.0 million. The Company is also required to maintain minimum EBITDA (as defined in the Credit Agreement) of $100.0 million. The Company is also required to maintain a Maximum Total Leverage Ratio (as defined in the Credit Agreement) of 2.25:1.0, which requirement decreases to (i) 2.0:1.0 on December 31, 2016; and (ii) 1.75:1.0 on December 31, 2017. The Company was in compliance with all of these requirements at September 30, 2016. The Maximum Total Leverage Ratio was 0.21:1 as at September 30, 2016, where Total Debt (as defined in the Credit Agreement) is the sum of all obligations evidenced by notes, bonds, debentures or similar instruments and was $28.2 million. EBITDA is calculated as follows:

	For the			For the
	Three Months Ended			Twelve Months Ended
EBITDA per Credit Facility:	September 30, 2016			September 30, 2016(1)
(In thousands of U.S. Dollars)
Net income	$	4,384		$	53,489
Add (subtract):
Loss from equity accounted investments		690			3,263
Provision for income taxes		2,551			17,279
Interest expense, net of interest income		99			358
Depreciation and amortization, including film asset amortization		11,984			45,036
Write-downs, net of recoveries including asset impairments and receivable provisions		1,654			3,700
Stock and other non-cash compensation		7,882			30,071
EBITDA before non-controlling interests		29,244			153,196
EBITDA attributable to non-controlling interests(2)		(4,738	)		(20,006	)
EBITDA attributable to common shareholders	$	24,506		$	133,190

(1) Ratio of total debt calculated using twelve months ended EBITDA

(2) The EBITDA calculation specified for purposes of the minimum EBITDA covenant excludes the reduction in EBITDA from the Company’s non-controlling interests.

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Playa Vista Financing

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

The total cost of development of the Playa Vista Project was approximately $54.0 million, with all costs in excess of the Playa Vista Construction Loan provided through funding by the Company.

On October 19, 2015, PV Borrower converted the Playa Vista Construction Loan from a construction loan into a permanent loan (“Playa Vista Loan”) pursuant to the terms of the loan documents. Pursuant to the conversion, PV Borrower increased the principal balance of the loan by an additional $7.7 million, to $30.0 million. Prior to the conversion, the Playa Vista Construction Loan bore interest at a variable interest rate per annum equal to 2.25% above the 30-day LIBOR rate, and PV Borrower was required to make monthly payments of interest only. However, as a result of the conversion, the interest rate decreased from 2.25% to 2.0% above the 30-day LIBOR rate, and PV Borrower will be required to make monthly payments of combined principal and interest over a 10-year term with a lump sum payment at the end of year 10. The 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, granting a first lien on and security interest in the Playa Vista property and the Playa Vista Project, including all improvements to be constructed thereon, and other documents evidencing and securing the loan (the “Loan Documents”). The Loan Documents include absolute and unconditional payment and completion guarantees provided by the Company to Wells Fargo for the performance by PV Borrower of all the terms and provisions of the Playa Vista Loan and an environmental indemnity also provided by the Company.

The Loan Documents contain affirmative, negative and financial covenants (including compliance with the financial covenants of the Company’s outstanding revolving senior secured facility with Wells Fargo), agreements, representations, warranties, borrowing conditions, and events of default customary for development projects such as the Playa Vista Project.

Total amount drawn under the Playa Vista Loan as at September 30, 2016 was $28.2 million (December 31, 2015 – $29.7 million). Under the Playa Vista Loan, the effective interest rate for the three and nine months ended September 30, 2016 was 2.51% and 2.46%, respectively (2015 — 2.45% and 2.44%, respectively).

Letters of Credit and Other Commitments

As at September 30, 2016, the Company did not have any letters of credit and advance payment guarantees outstanding (December 31, 2015 — $nil), under the Credit Facility.

The Company also has a $10.0 million facility for advance payment guarantees and letters of credit through the Bank of Montreal for use solely in conjunction with guarantees fully insured by Export Development Canada (the “Bank of Montreal Facility”). The Bank of Montreal Facility is unsecured and includes typical affirmative and negative covenants, including delivery of annual consolidated financial statements within 120 days of the end of the fiscal year. The Bank of Montreal Facility is subject to periodic annual reviews. As at September 30, 2016, the Company had letters of credit and advance payment guarantees outstanding of $0.1 million under the Bank of Montreal Facility (December 31, 2015 — $0.3 million).

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Cash and Cash Equivalents

As at September 30, 2016, the Company’s principal sources of liquidity included cash and cash equivalents of $218.1 million, the Credit Facility, anticipated collection from trade accounts receivable of $89.2 million including receivables from theaters under joint revenue sharing arrangements and DMR agreements with studios, anticipated collection from financing receivables due in the next 12 months of $23.4 million and payments expected in the next 12 months on existing backlog deals. As at September 30, 2016, the Company did not have any amount drawn on the Credit Facility (remaining availability of $200.0 million), and the Company had $28.2 million drawn on the Playa Vista Loan. There were $nil letters of credit and advance payment guarantees outstanding under the Credit Facility and $0.1 million under the Bank of Montreal Facility. Cash held outside of Canada as at September 30, 2016 was $140.1 million (December 31, 2015 — $122.2 million).

During the nine months ended September 30, 2016, the Company’s operations provided cash of $45.3 million which reflects a $12.5 million increase in inventory primarily due to the anticipated roll-out of its theater systems. The Company used cash of $161.4 million to repurchase common shares, fund capital expenditures, to build equipment for use in joint revenue sharing arrangements, to purchase other intangible assets, and to purchase property, plant and equipment. Based on management’s current operating plan for 2016, the Company expects to continue to use cash to deploy additional theater systems under joint revenue sharing arrangements and to fund DMR agreements with studios. Cash flows from joint revenue sharing arrangements are derived from the theater box-office and concession revenues and the Company invested directly in the roll out of 33 new theater systems under joint revenue sharing arrangements during the nine months ended September 30, 2016.

In 2014, the Company’s Board of Directors approved a $150.0 million share repurchase program for shares of the Company’s common stock, which program was amended on April 20, 2016 to increase the aggregate purchase allowance to $200.0 million. Purchases under the program commenced in 2014, and the program expires June 30, 2017. The repurchases may be made either in the open market or through private transactions, subject to market conditions, applicable legal requirements and other relevant factors. The Company has no obligation to repurchase shares, and the share repurchase program may be suspended or discontinued by the Company at any time. During the nine months ended September 30, 2016, the Company repurchased 3,290,512 common shares under the repurchase program at an average price of $30.48 per share. The retired shares were purchased for $100.4 million.

The Company has received an exemption decision issued by the Ontario Securities Commission, dated April 1, 2016, for relief from the formal issuer bid requirements under Canadian securities laws. The exemption decision permits the Company to repurchase up to 10% of its outstanding common shares in any twelve-month period through the facilities of the New York Stock Exchange under repurchase programs that the Company may implement from time to time. The Canadian securities laws regulate an issuer’s ability to make repurchases of its own securities.

The Company sought the exemption so that it can make repurchases under its repurchase programs in excess of the maximum allowable in reliance on the existing “other published markets” exemption from the formal issuer bid requirements available under Canadian securities laws. The “other published markets” exemption caps the Company’s ability to repurchase its securities through the facilities of the NYSE at 5% of the issuer’s outstanding securities during any 12-month period.

The conditions of the exemption decision are as follows: (i) any repurchases made in reliance on the exemption decision must be permitted under, and part of repurchase programs established and conducted in accordance with, U.S. securities laws and NYSE rules, (ii) the aggregate number of common shares acquired in reliance on the exemption decision by the Company and any person or company acting jointly or in concert with the Company within any 12 months does not exceed 10% of the outstanding common shares at the beginning of the 12-month period, (iii) the common shares are not listed and posted for trading on an exchange in Canada, (iv) the exemption decision applies only to the acquisition of common shares by the Company within 36 months of the date of the decision, and (v) prior to purchasing common shares in reliance on the exemption decision, the Company discloses the terms of the exemption decision and the conditions applicable thereto in a press release that is issued on SEDAR and includes such language as part of the news release required to be issued in accordance with the “other published markets exemption” in respect of any repurchase program that may be implemented by the Company.

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

The Company’s operating cash flow will be adversely affected if management’s projections of future signings for theater systems and film performance, theater installations and film productions are not realized. The Company forecasts its short-term liquidity requirements on a quarterly and annual basis. Since the Company’s future cash flows are based on estimates and there may be factors

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that are outside of the Company’s control (see “Risk Factors” in Item 1A in the Company’s 2015 Form 10-K), there is no guarantee that the Company will continue to be able to fund its operations through cash flows from operations. Under the terms of the Company’s typical sale and sales-type lease agreement, the Company receives substantial cash payments before the Company completes the performance of its obligations. Similarly, the Company receives cash payments for some of its film productions in advance of related cash expenditures.

Operating Activities

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

Cash provided by operating activities amounted to $45.3 million for the nine months ended September 30, 2016. Changes in other non-cash operating assets as compared to December 31, 2015 include: a decrease of $6.6 million in accounts receivable; an increase of $1.1 million in financing receivables; an increase of $12.5 million in inventories; an increase of $5.1 million in prepaid expenses; and a change in other assets of $0.9 million which includes an increase of $1.3 million in other assets, offset by a decrease of $0.3 million in commissions and other deferred selling expenses, and a decrease of $0.1 million in insurance recoveries. Changes in other operating liabilities as compared to December 31, 2015 include: a decrease in deferred revenue of $7.8 million related to amounts relieved from deferred revenue related to theater system installations, offset by backlog payments received in the current period; a decrease in accounts payable of $6.6 million; and a decrease of $2.0 million in accrued liabilities.

Investing Activities

Net cash used in investing activities amounted to $38.5 million in nine months ended September 30, 2016, which includes purchases of $10.0 million in property, plant and equipment, an investment in joint revenue sharing equipment of $25.5 million and an investment in other intangible assets of $2.9 million, primarily related to the Company’s enterprise resource planning system.

Financing Activities

Net cash used in financing activities in the nine months ended September 30, 2016 amounted to $106.3 million as compared to $33.6 million provided by financing activities in the nine months ended September 30, 2015. In the nine months ended September 30, 2016, the Company paid $100.4 million for the repurchase of common shares under the Company’s share repurchase program and $8.4 million to purchase treasury stock for the issuance of restricted share units and options. In addition, the Company paid $3.0 million of taxes relating to secondary sales and repatriation dividends and $0.2 million of taxes relating to employee stock award vesting. Furthermore, the Company also made $1.5 million in repayments under the Playa Vista Loan. These cash outlays were offset by $7.2 million received from the issuance of common shares resulting from stock option exercises.

Capital Expenditures

Capital expenditures, including the Company’s investment in joint revenue sharing equipment, purchase of property, plant and equipment, other intangible assets and investments in film assets were $52.7 million for the nine months ended September 30, 2016 as compared to $75.1 million for the nine months ended September 30, 2015.

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CONTRACTUAL OBLIGATIONS

Payments to be made by the Company under contractual obligations as of September 30, 2016 are as follows:

	Payments Due by Period
(In thousands of U.S. Dollars)	Total Obligations		2016		2017		2018		2019		2020		Thereafter
Purchase obligations(1)	$	31,699	$	18,591	$	13,078	$	30	$	—	$	—	$	—
Pension obligations(2)		19,871		—		19,871		—		—		—		—
Operating lease obligations(3)		18,915		2,262		5,248		4,501		2,350		612		3,942
Playa Vista Loan(4)		28,167		500		2,000		2,000		2,000		2,000		19,667
Postretirement benefits obligations		2,652		130		154		168		181		150		1,869
	$	101,304	$	21,483	$	40,351	$	6,699	$	4,531	$	2,762	$	25,478

(1) The Company’s total payments to be made under binding commitments with suppliers and outstanding payments to be made for supplies ordered but yet to be invoiced.

(2) 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, 2016), although Mr. Gelfond has not informed the Company that he intends to retire at that time, and is currently in discussions regarding an extenuation of his employment agreement with the Company.

(3) The Company’s total minimum annual rental payments to be made under operating leases, mostly consisting of rent at the Company’s property in New York and at the various owned and operated theaters.

(4) The Playa Vista Loan is fully due and payable on October 19, 2025. The Company is required to make monthly payments of combined principal and interest.

Pension and Postretirement Obligations

The Company has an unfunded defined benefit pension plan, the SERP, covering Mr. Gelfond. As at September 30, 2016, the Company had an unfunded and accrued projected benefit obligation of approximately $19.7 million (December 31, 2015 — $19.5 million) in respect of the SERP.

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

The Company has a postretirement plan to provide health and welfare benefits to Canadian employees meeting certain eligibility requirements. As at September 30, 2016, the Company had an unfunded benefit obligation of $1.9 million (December 31, 2015 — $1.8 million).

In July 2000, the Company agreed to maintain health benefits for Messrs. Gelfond and Wechsler, the Chairman of the Board, upon retirement. As at September 30, 2016, the Company had an unfunded benefit obligation of $0.8 million (December 31, 2015 — $0.8 million).

OFF-BALANCE SHEET ARRANGEMENTS

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

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Item 3. Quantitative and Qualitative Factors about Market Risk

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

Foreign Exchange Rate Risk

A majority of the Company’s revenue is denominated in U.S. dollars while a significant portion of its costs and expenses is denominated in Canadian dollars. A portion of the Company’s net U.S. dollar cash flows is converted to Canadian dollars to fund Canadian dollar expenses through the spot market. In addition, IMAX films generate box office in 74 different countries, and therefore unfavorable exchange rates between applicable local currencies and the U.S. dollar could have an impact on the Company’s reported gross box office and revenues. The Company has incoming cash flows from its revenue generating theaters and ongoing operating expenses in China through its majority-owned subsidiary IMAX Shanghai Multimedia Technology Co., Ltd. In Japan, the Company has ongoing Yen-denominated operating expenses related to its Japanese operations. Net Renminbi and Japanese Yen cash flows are converted to U.S. dollars through the spot market. The Company also has cash receipts under leases denominated in Renminbi, Japanese Yen, Euros and Canadian dollars.

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

For the three and nine months ended September 30, 2016, the Company recorded a foreign exchange loss of $0.2 million and a loss of $0.1 million as compared to a foreign exchange loss of $0.5 million and loss of $1.5 million for the three and nine months ended September 30, 2015, associated with the translation of foreign currency denominated monetary assets and liabilities.

The Company entered into a series of foreign currency forward contracts to manage the Company’s risks associated with the volatility of foreign currencies. The forward contracts have settlement dates throughout 2016 and 2017. Foreign currency derivatives are recognized and measured in the balance sheet at fair value. Changes in the fair value (gains or losses) are recognized in the condensed consolidated statements of operations except for derivatives designated and qualifying as foreign currency hedging instruments. All foreign currency forward contracts held by the Company as at September 30, 2016, are designated and qualify as foreign currency hedging instruments. For foreign currency hedging instruments, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in other comprehensive income and reclassified to the condensed consolidated statements of operations when the forecasted transaction occurs. Any ineffective portion is recognized immediately in the condensed consolidated statements of operations. The notional value of foreign currency hedging instruments at September 30, 2016 was $26.9 million (December 31, 2015 — $30.7 million). A loss of $0.3 million and a gain of $1.9 million was recorded to Other Comprehensive Income with respect to the depreciation/appreciation in the value of these contracts for the three and nine months ended September 30, 2016 (2015 — loss of $2.3 million and loss of $5.0 million). A loss of $0.6 million and a loss of $2.6 million was reclassified from Accumulated Other Comprehensive Income to selling, general and administrative expenses for the three and nine months ended September 30, 2016 (2015 — loss of $1.0 million and loss of $2.2 million). The Company’s estimated net amount of the existing gains as at September 30, 2016 is $0.1 million, which is expected to be reclassified to earnings within the next twelve months. Appreciation or depreciation on forward contracts not meeting the requirements for hedge accounting in the Derivatives and Hedging Topic of the FASB Accounting Standards Codification are recorded to selling, general and administrative expenses.

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

At September 30, 2016, the Company’s financing receivables and working capital items denominated in Canadian dollars, Renminbi, Yen and Euros was $50.8 million. Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates at September 30, 2016, the potential change in the fair value of foreign currency-denominated financing receivables and working capital items would have been $5.1 million. A significant portion of the Company’s selling, general, and administrative expenses is denominated in Canadian dollars. Assuming a 1% change appreciation or depreciation in foreign currency exchange rates at September 30, 2016, the potential change in the amount of selling, general, and administrative expenses would be $0.1 million for every $10.0 million in Canadian denominated expenditures.

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Interest Rate Risk Management

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

As at September 30, 2016, the Company had not drawn down on its Credit Facility (December 31, 2015 — $nil).

As at September 30, 2016, the Company had drawn down $28.2 million on its Playa Vista Loan (December 31, 2015 — $29.7 million).

The Company’s largest exposure with respect to variable rate debt comes from changes in the LIBOR. The Company had variable rate debt instruments representing 12.1% and 11.7% of its total liabilities at September 30, 2016 and December 31, 2015, respectively. If the interest rates available to the Company increased by 10%, the Company’s interest expense would increase by approximately $0.1 million and interest income from cash would increase by approximately $0.2 million. These amounts are determined by considering the impact of the hypothetical interest rates on the Company’s variable rate debt and cash balances at September 30, 2016.

Item 4. Controls and Procedures

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

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

The Company’s management, with the participation of its CEO and its CFO, has evaluated the effectiveness of the Company’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as at September 30, 2016 and has concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective. The Company will continue to periodically evaluate its disclosure controls and procedures and will make modifications from time to time as deemed necessary to ensure that information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s (the “SEC’s”) rules and forms.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

During the first quarter of 2016, the Company’s subsidiary, IMAX China Holding, Inc. (“IMAX China”), implemented a new enterprise resource planning (“ERP”) system. The implementation of the new ERP system resulted in material changes to the nature and type of IMAX China’s internal controls over financial reporting during the first half of the year. The Company reviewed the implementation effort as well as the impact on its internal controls over financial reporting and where appropriate, is making changes to these controls over financial reporting to address these system changes. The Company expects the transition period to be completed in 2016 as controls evolve under the new system. The Company believes that the internal control changes resulting from the new ERP implementation in China will improve the overall control environment. There were no other changes in the Company’s internal controls over financial reporting during the quarter ended at September 30, 2016 that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors disclosed in Part I, Item 1A “Risk Factors” in the Company’s 2015 Form 10-K. The risks described in the Company’s Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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

Issuer Purchases of Equity Securities

The Company’s common stock repurchase program activity for the three months ended September 30, 2016 was as follows:

	Total number of shares purchased		Average price paid per share		Total number of shares purchased as part of publicly announced program(a)		Maximum value of shares that may yet be purchased under the program
July 1 through July 31, 2016		—	$	—		—	$	77,053,384
August 1 through August 31, 2016		—		—		—	$	77,053,384
September 1 through September 30, 2016		500,000		29.32		500,000	$	62,391,374
Total		500,000	$	29.32		500,000

(a) On June 16, 2014, the Company’s Board of Directors approved a $150.0 million share repurchase program for shares of the Company’s common stock, which expires June 30, 2017. The repurchases may be made either in the open market or through private transactions, subject to market conditions, applicable legal requirements and other relevant factors. The Company has no obligation to repurchase shares, and the share repurchase program may be suspended or discontinued by the Company at any time. On April 20, 2016, the Company’s board of directors approved an incremental $50.0 million increase to the share repurchase allowance, for an aggregate allowance of $200.0 million under the program. All other terms remain unchanged. Purchases under the program commenced during the third quarter of 2014.

The Company did not repurchase any shares in connection with the administration of employee share-based compensation plans during the three months ended September 30, 2016.

Item 6. Exhibits

Exhibit No.	Description
10.43	Employment Agreement, dated September 1, 2016 between IMAX Corporation and Greg Foster.
31.1	Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002, dated October 20, 2016, by Richard L. Gelfond.
31.2	Certification Pursuant to Section 302 of the Sarbanes — Oxley Act of 2002, dated October 20, 2016, by Patrick McClymont.
32.1	Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002, dated October 20, 2016, by Richard L. Gelfond.
32.2	Certification Pursuant to Section 906 of the Sarbanes — Oxley Act of 2002, dated October 20, 2016, by Patrick McClymont.

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SIGNATURES

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

	IMAX CORPORATION
Date: October 20, 2016	By:	/s/ PATRICK MCCLYMONT
		Patrick McClymont
		Executive Vice-President & Chief Financial Officer
		(Principal Financial Officer)
Date: October 20, 2016	By:	/s/ JEFFREY VANCE
		Jeffrey Vance
		Senior Vice-President, Finance & Controller
		(Principal Accounting Officer)

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EX-10.43

IMAX CORPORATION

Exhibit 10.43

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated as of September 1st, 2016, is between IMAX CORPORATION, a corporation organized under the laws of Canada (the “Company”), and GREG FOSTER, of the City of Los Angeles in the State of California (the “Executive”).

WHEREAS, the Executive currently serves as the CEO, IMAX Entertainment and Senior Executive Vice President, IMAX Corporation;

WHEREAS, the Company wishes to enter into this Agreement to engage the Executive to continue to provide services to the Company, and the Executive wishes to be so engaged, pursuant to the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

Employment and Duties.

(a) General. Subject to the terms and conditions hereof, the Executive shall serve as CEO, IMAX Entertainment and Senior Executive Vice President, IMAX Corporation, reporting to the Company’s Chief Executive Officer (the “CEO”). The foregoing title must be used in complete form (including both the IMAX Entertainment and IMAX Corporation portions) and in the order in which it appears in this Agreement at all times. The Executive shall perform duties and services for the Company commensurate with the Executive’s position as directed by the CEO from time to time. The Executive’s principal place of employment shall be the offices of the Company in Los Angeles, California, subject to regular travel as required by the performance of his duties and the business of the Company.

(b) Exclusive Services. For so long as the Executive is employed by the Company, the Executive shall devote his full business working time to his duties hereunder, shall faithfully serve the Company, shall in all respects conform to and comply with the lawful and good faith directions and instructions given to him by the CEO, and shall use his best efforts to promote and serve the interests of the Company. Further, the Executive shall not, directly or indirectly, render material services to any other person or organization without the consent of the CEO or otherwise engage in activities that would impede his ability to fully perform his obligations hereunder. Notwithstanding the foregoing, it is understood and agreed that the Executive may serve as a director for the entities listed on Exhibit A hereto.

(c) Board of Directors. The Company shall recommend the appointment of the Executive to its Board of Directors (the “Board”) effective as of a date to be

determined by the parties, but in any event as soon as practicable after the date of this Agreement. Further, the Company shall recommend to the Governance Committee of the Board the nomination of the Executive for election to the Board at the annual meeting of the Company’s shareholders to be held in 2017.

Term. The Executive’s employment pursuant to this Agreement shall be effective as of July 2, 2016 (the “Effective Date”), and shall terminate upon the earlier to occur of (i) the Executive’s termination of employment pursuant to Section 4 hereunder and (ii) July 2, 2019. The period commencing as of the Effective Date and ending on July 2, 2019 is hereinafter referred to as the “Term”.

Compensation and Other Benefits. Subject to the provisions of this Agreement, the Company shall pay and provide the following compensation and other benefits to the Executive during the Term as compensation for services rendered hereunder:

(a) Base Salary. The Company shall pay to the Executive an annual salary (the “Base Salary”) of $1,000,000, which shall increase to $1,050,000 effective July 2, 2017, and which shall further increase to $1,100,000 effective July 2, 2018, in each case less applicable withholdings and deductions. The Base Salary will be payable in substantially equal installments in accordance with the Company’s regular payroll practices as established from time to time. Any portion of the Base Salary that has been earned between the Effective Date through the date of this Agreement and that has not been paid by the date of this Agreement shall be paid in the first payroll cycle occurring after the date of this Agreement.

(b) Bonus. The Executive shall be eligible to receive a discretionary incentive bonus under the Company’s bonus plans in effect from time to time, as determined in the sole discretion of the Company (the “Bonus”). The target amount of the Bonus shall be 100% of the Base Salary (the “Target Bonus”), with no maximum and the potential to overachieve. The actual amount of the Bonus shall be based upon the attainment of individual and Company performance goals and objectives consistent with the Company’s practices with respect to similarly-situated executives and approved by the Compensation Committee of the Board in its sole discretion, with the individual and Company portions of the Bonus each carrying 50% weight towards the overall Bonus. The Bonus (if any) shall be paid on the date on which the Company pays out bonuses to senior executives generally; provided, however, that except as otherwise set forth herein, the Executive must remain employed by the Company on the payout date.

(c) Equity Awards.

(i) As soon as practicable following the date hereof, the Executive shall be granted restricted share units (“RSUs”) with an aggregate grant date fair market value of $1,575,000. Thereafter, on each of July 2, 2017 and July 2, 2018, the Executive shall be granted additional RSUs, with each grant having an aggregate grant date fair market value of $787,500.

(ii) As soon as practicable following the date hereof, the Executive shall be granted nonqualified stock options (“Options”) to purchase common shares of the Company, no par value, with an aggregate grant date fair market value of $1,050,000. Thereafter, on or as soon as practicable after each of July 2, 2017 and July 2, 2018, the Executive shall be granted additional Options, with each grant having an aggregate grant date fair market value of $1,050,000.

(iii) The Options and RSUs to be granted pursuant to this Section 3(c) shall be granted on the terms and conditions set forth in the IMAX Corporation Amended and Restated Long-Term Incentive Plan (as amended from time to time, the “LTIP”), the grant agreements to be entered into between the Company and the Executive pursuant to the LTIP, and this Agreement. The Executive must be employed by the Company on the date of grant in order to receive the Options and RSUs.

(iv) For purposes of determining the number of Options and RSUs to be granted pursuant to this Section 3(c), the Company shall value (i) the Options in a manner consistent with the Company’s financial statement reporting; and (ii) the RSUs based on the Fair Market Value (as defined in the LTIP) of the Common Shares on the date of grant. The Options and RSUs shall vest in three (3) equal annual installments beginning on the first anniversary of the applicable grant date. The exercise price of the Options shall be the Fair Market Value of the Common Shares on the date of grant. The Options shall have a seven (7)-year term.

(d) Benefit Plans. During the Term, the Executive shall be entitled to participate, on the same basis and at the same level as generally available to other senior executives of the Company, in any group insurance, hospitalization, medical, dental, health and accident, disability, fringe benefit and deferred compensation plans or programs of the Company (including executive supplemental health benefits) now existing or hereafter established, as in effect from time to time. In addition, the Executive shall be reimbursed by the Company for up to $15,000 per year of the Term (for a maximum of $45,000 over the Term) for additional medical services and fees (the “Additional Medical Expenses”); provided that this shall be a taxable benefit to the Executive.

(e) Defined Contribution Retirement Plan. The Company shall establish a defined contribution retirement plan (the “Retirement Plan”) that will be created and managed solely for the Executive. The Company will establish the Retirement Plan as promptly as practicable following the date hereof; provided that the Retirement Plan will contain the following provisions:

(i) During each year of the Term, the Company shall contribute an aggregate amount equal to the Executive’s Base Salary for such year, with contributions to be made by the Company in monthly installments, for a total contribution over the Term of $3,150,000 (the “Aggregate Contribution”); provided, however, the Company shall not be required to make any further contributions following the date of the Executive’s

Separation from Service (as defined in Section 4(b)) in the event that, before the end of the Term, the Company terminates the Executive’s employment for Cause (as defined in Section 5(a)) or the Executive resigns his employment without Good Reason (as defined in Section 5(c));

(ii) The Retirement Plan will be subject to a vesting schedule based on continued employment with the Company, such that the Retirement Plan will be: (A) 25% vested on July 2, 2019; (B) 50% vested on July 2, 2022; (C) 75% vested on July 2, 2025; and (D) 100% vested on July 2, 2027; provided, however, that if the Executive incurs a Separation from Service for any reason other than (x) the Company’s termination of his employment for Cause, (y) the Executive’s resignation from his employment without Good Reason, or (z) the Executive’s declining an offer by the Company to renew the Executive’s employment following the expiration of the Term on terms that are not materially less favorable than those set forth herein, then the Executive will be considered 100% vested in the Retirement Plan as of the date of his Separation from Service;

(iii) The Executive or his delegate will be involved in decisions relating to investment or management of Retirement Plan assets; and

(iv) The schedule for payment of the Executive’s benefits under the Retirement Plan will be set forth in the documentation for the Retirement Plan.

Notwithstanding any of the foregoing, the Retirement Plan shall be established and administered in a manner intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and subject to any applicable taxes.

(f) Automobile. The Company shall provide the Executive with an automobile allowance of $1,100 per month (the “Automobile Payment”). In addition, the Company shall reimburse Executive for the costs of gasoline, insurance, and reasonable operating expenses for that automobile, in accordance with Company policies in effect for senior executives from time to time, up to a maximum of $11,800 per year of the Term.

(g) Vacation. The Executive shall be entitled to vacation time consistent with the applicable policies of the Company for other senior executives as in effect from time to time, but in no event less than twenty-five (25) days per year.

(h) Expenses. The Company shall reimburse the Executive for reasonable travel and other business-related expenses incurred by him in the fulfillment of his duties hereunder upon presentation of written documentation thereof, in accordance with the business expense reimbursement policies and procedures of the Company as in effect from time to time. Payments with respect to reimbursements of expenses shall be made consistent with the Company’s reimbursement policies and procedures and in no event

later than the last day of the calendar year following the calendar year in which the relevant expense is incurred.

(i) Life Insurance. For the first two years of the Term, the Company shall continue to pay up to $135,000 per year in premiums for life insurance for the benefit of a beneficiary (or beneficiaries) designated by the Executive, which amounts constitute the remaining two premium payments owed to the Executive under his prior employment agreement dated March 1, 2006, as amended. This shall be a taxable benefit to the Executive. The Company’s payments shall cease upon resignation by the Executive without Good Reason or termination of the Executive for Cause.

(j) Other Benefits. The Company shall reimburse the Executive for up to $10,000 per year of the Term for financial, estate and tax planning services (for a maximum of $30,000 over the Term), which shall be a taxable benefit to the Executive. In addition, the Company will pay up to $5,000 per year for business club memberships (for a maximum of $15,000 over the Term). The foregoing reimbursements for financial, estate and tax planning services and business club memberships, together with the Additional Medical Expenses, are collectively referred to as the “Fringe Benefits”.

Termination of Employment. Subject to this Section 4, the Company shall have the right to terminate the Executive’s employment at any time, with or without Cause (as defined in Section 5), and the Executive shall have the right to terminate his employment at any time and for any reason.

(a) Termination Due to Death or Disability. The Executive’s employment under this Agreement will terminate upon the Executive’s death or the Executive’s Disability (as defined in Section 5). In the event the Executive’s employment terminates as a result of the Executive’s death or Disability, the Company shall pay to the Executive (or his estate, as applicable) (i) the Base Salary and Automobile Payment through and including the date of termination; (ii) an amount equal to the Executive’s accrued and unused vacation pay as of the date of termination; (iii) any other amounts or benefits required to be paid or provided by law or under any plan, program, policy or practice of the Company (including unreimbursed business expenses properly incurred through the date of termination) ((i) through (iii) collectively the “Other Accrued Compensation and Benefits”), and (iv) a pro-rated Target Bonus for the year in which the termination occurs, in each case payable within thirty (30) days of the Executive’s Separation from Service (as defined in Section 4(b)) by reason of death or Disability (or as otherwise expressly set forth in the applicable plan, program or agreement). Furthermore, upon a termination of employment as a result of the Executive’s death or Disability, a portion of the Executive’s Options and RSUs that have already been granted pursuant to this Agreement shall vest such that, when combined with previously vested Options and RSUs, an aggregate of 50% of all of the Options and RSUs that have been granted pursuant to this Agreement shall have vested. Any vested Options shall continue to be exercisable for a period of 180 days following the date of the Executive’s death or Disability (but in no event later than the expiration of the term of such Options). All Options not exercised within such 180-day period shall be cancelled and shall revert back to the Company for no consideration and the Executive or his estate, as applicable, shall

have no further right or interest therein. Except as provided in this Section 4(a), the Executive shall have no further right to receive any other compensation or benefits after a termination of employment due to the Executive’s death or Disability.

(b) Termination for Cause; Resignation without Good Reason. At any time prior to the expiration of the Term, the Executive’s employment may be terminated by the Company immediately for Cause. If, prior to the expiration of the Term, the Executive incurs a “Separation from Service” within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”) by reason of the Company’s termination of the Executive’s employment for Cause, or if the Executive resigns from his employment during the Term for any reason other than Good Reason (as defined in Section 5), (i) the Executive shall be entitled to payment of his Other Accrued Compensation and Benefits, payable within thirty (30) days after the Executive’s Separation from Service (or as otherwise expressly set forth in the applicable plan, program or agreement); (ii) all unvested Options and RSUs will be cancelled without consideration and the Executive shall have no further rights with respect to such Options and RSUs; and (iii) the Executive will have thirty (30) days to exercise any vested options, in accordance with the terms of the LTIP. The Executive shall have no further right to receive any other compensation or benefits after his termination for Cause or resignation of employment other than for Good Reason. The Executive shall provide thirty (30) days’ written notice to the Company prior to resigning his employment during the Term.

(c) Termination without Cause; Resignation for Good Reason.

(i) If, prior to the expiration of the Term, the Executive incurs a Separation from Service by reason of the Company’s termination of the Executive’s employment without Cause, or as a result of his resignation for Good Reason, then the Executive shall receive the Other Accrued Compensation and Benefits and, subject to Section 4(e):

(A) the Company shall continue to pay the Executive the Base Salary and Automobile Payment in accordance with the Company’s ordinary payroll practices in effect from time to time for a period equal to the greater of: (i) twelve (12) months; and (ii) the remainder of the Term, with payments commencing on the 60^th day following the Executive’s Separation from Service (the “Severance Period”);

(B) the Company shall provide the Executive with cash payments equal to a pro-rated Target Bonus (i) for time worked up through the termination date and for which a bonus has not yet been paid; and (ii) in respect of the Severance Period, in each case at such intervals as the same would have been paid had the Executive remained in the active service of the Company; provided, however, that in no event will payment commence prior to the 60^th day following the Executive’s Separation from Service;

(C) the Company shall provide the Executive and his eligible dependents with continued participation in the Company’s group medical plans during the Severance Period or, in the event such participation is not permitted, the Company shall pay for the cost of continuing medical insurance coverage for the Executive and his eligible dependents under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). The Executive shall continue to be obligated to pay his share of premiums, deductibles and co-payments which may be deducted from the payment made pursuant to this Section 4(c)(i)(C) in the same manner as if the Executive were actively employed. In the event that the Executive obtains subsequent employment and is eligible to participate in the group medical plans of his new employer, the Executive agrees to notify the Company promptly, and any coverage provided under the Company’s group medical plans, or COBRA payments, as the case may be, shall terminate when coverage under the new employer’s medical plans become effective;

(D) the Company shall continue to pay the life insurance premiums contemplated by Section 3(i);

(E) the Company shall continue to provide the Executive with the Fringe Benefits;

(F) in the event the Aggregate Contribution has not yet been made to the Retirement Plan as of the date of the Separation from Service, the Company will continue to make monthly contributions to the Retirement Plan for the duration of the Severance Period, up to a maximum contribution of $1,000,000 over the Severance Period; provided that in no event shall the total amount contributed to the Retirement Plan exceed the Aggregate Contribution; and

(G) all outstanding equity will be treated in accordance with the terms of the LTIP or the applicable award letters.

(ii) The Executive agrees that the provisions of Section 4(c) are fair and reasonable and that if his employment is terminated without Cause or he resigns for Good Reason he shall have no further right to receive any other compensation or benefits.

(d) Non-Renewal of Agreement. If, following the expiration of the Term, the Company does not offer to continue the Executive’s employment on substantially similar terms to those set forth herein and upon the expiration of the Term the Executive incurs a Separation from Service, the Company will pay the Executive a pro-rated Target Bonus for time worked during the year in which the Separation from Service occurs, payable within thirty (30) days of the Executive’s Separation from Service. In addition, for a period equal to eighteen (18) months from the date of the Separation of Service (the “Non-Renewal Period”):

(i) the Company will permit the Executive to continue using his Company e-mail account; provided that e-mail account access shall expire at such time the Executive obtains subsequent employment;

(ii) the Company shall provide the Executive and his eligible dependents with continued participation in the Company’s group medical plans during such Non-Renewal Period or, in the event such participation is not permitted, the Company shall pay for the cost of continuing medical insurance coverage for the Executive and his eligible dependents under COBRA. The Executive shall continue to be obligated to pay his share of premiums, deductibles and co-payments which may be deducted from the payment made pursuant to this Section 4(d)(ii) in the same manner as if the Executive was actively employed. In the event that the Executive obtains subsequent employment and is eligible to participate in the group medical plans of his new employer, the Executive agrees to notify the Company promptly, and any coverage provided under the Company’s group medical plans, or COBRA payments, as the case may be, shall terminate when coverage under the new employer’s medical plans become effective; and

(iii) the Company will reimburse the Executive for up to $50,000, to be used by the Executive for: (A) office rent, administrative assistance and related expenses; (B) conference fees and related expenses; (C) advisory services; and (D) business related travel and expenses, to be used in the Executive’s discretion.

(iv) The Executive agrees that apart from the foregoing, in the event of a non-renewal of the Agreement, the Executive shall have no further right to receive any other compensation or benefits, unless required by law and subject to the terms of the LTIP or applicable award letters.

(e) Execution and Delivery of Release; Restrictive Covenants. The Company shall not be required to make the payments and provide the benefits under Section 4(c) (other than the Other Accrued Compensation and Benefits) unless (i) the Executive executes and delivers to the Company, within sixty (60) days following the Executive’s Separation from Service, a general waiver and release of claims in the Company’s standard form and the release has become effective and irrevocable in its entirety, and (ii) the Executive remains in material compliance with the Confidentiality, Non-Competition and Intellectual Property Agreement attached hereto as Exhibit B (the “Non-Competition Agreement”), through the Severance Period. The Executive’s failure or refusal to sign the release (or the revocation of such release in accordance with applicable laws) or the Executive’s failure to materially comply with the Non-Competition Agreement shall result in the forfeiture of the payments and benefits payable under Section 4(c).

(f) Notice of Termination. Any termination of employment by the Company or the Executive shall be communicated by a written “Notice of Termination” to the other party hereto given in accordance with Section 22 of this Agreement, except that the Company may waive the requirement for such Notice of Termination by the Executive.

The date of the Executive’s termination of employment shall be the date specified in the Notice of Termination.

(g) Resignation from Directorships and Officerships. The termination of the Executive’s employment for any reason shall constitute the Executive’s resignation from (i) any director, officer or employee position the Executive has with the Company and its subsidiaries and affiliates, and (ii) all fiduciary positions (including as a trustee) the Executive may hold with respect to any employee benefit plans or trusts established by the Company and its subsidiaries and affiliates. The Executive agrees that this Agreement shall serve as written notice of his resignation in this circumstance.

1. Definitions.

(a) Cause. For purposes of this Agreement, “Cause” shall mean the termination of the Executive’s employment because of:

(i) the cessation of the Executive’s ability to work legally in the United States or Canada other than for reasons not within the Executive’s reasonable control;

(ii) any act or omission that constitutes a material breach by the Executive of any of his obligations under this Agreement; provided, however, that if such act or omission is related to the Executive’s performance of his duties within the scope of his employment, then he shall have thirty (30) days after written notice is received by the Executive of such material breach to cure such breach;

(iii) the continued failure or refusal of the Executive to perform the duties reasonably required of him in his role, which is not cured within thirty (30) days after written notice is received by the Executive of such failure or refusal;

(iv) the Executive’s commission of, or plea of nolo contendere to, (A) any felony or (B) any crime involving dishonesty or moral turpitude which reflects negatively upon the Company and materially impairs or impedes its operations;

(v) the Executive’s engaging in any misconduct, gross negligence, act of dishonesty, violence or threat of violence that is materially injurious to the Company or any of its subsidiaries or affiliates;

(vi) the Executive’s breach of the Non-Competition Agreement or any material written policy of the Company or any of its subsidiaries or affiliates, in each case which is not cured within thirty (30) days after written notice is received by the Executive of such breach; or

(vii) any other action by the Executive which is materially injurious to the financial condition or business reputation of, or is otherwise materially injurious to, the Company or any of its subsidiaries or affiliates, or which results in the violation by the Company or any of its subsidiaries or affiliates of any law.

(b) Disability. For purposes of this Agreement, “Disability” means a physical or mental disability or infirmity of the Executive that prevents the normal performance of substantially all of his duties under this Agreement as an Executive of the Company, which disability or infirmity shall exist for any continuous period of 180 days.

(c) Good Reason. For purposes of this agreement, “Good Reason” shall mean the Executive’s resignation as a result of a material reduction in the Executive’s responsibilities from those set forth in this Agreement; provided, however, that no such event shall constitute Good Reason unless (A) the Executive first gives the Company written notice of his intention to resign his employment for Good Reason and the grounds for such resignation, (B) such grounds for resignation (if susceptible to correction) are not corrected by the Company within thirty (30) days of its receipt of such notice and (C) the Executive actually resigns his employment with the Company within thirty (30) days following the expiration of the thirty (30) day cure period.

Nondisparagement. The Executive agrees that at no time during the Executive’s employment by the Company or thereafter shall the Executive make, or cause or assist any other person to make, any statement or other communication to any third party that impugns or attacks, or is otherwise critical of, the reputation, business or character of the Company, its subsidiaries and affiliates, and their respective directors, officers or employees.

Recovery of Compensation. All payments and benefits provided under this Agreement shall be subject to any compensation recovery or clawback as required under law and Company policy.

Section 409A of the Code.

(a) The payments and benefits provided under this Agreement are intended to comply with, or be exempt from, Section 409A and shall be interpreted or construed consistent with that intent. The Company shall not accelerate any payment or the provision of any benefits under this Agreement or make or provide any such payment or benefits if such payment or provision of such benefits would, as a result, be subject to tax under Section 409A. If, in the good faith judgment of the Company, any provision of this Agreement could cause the Executive to be subject to adverse or unintended tax consequences under Section 409A, such provision shall be modified by the Company in its sole discretion to maintain, to the maximum extent practicable, the original intent of the applicable provision without contravening the requirements of Section 409A. This Section 8(a) does not create an obligation on the part of the Company to modify this Agreement and does not guarantee that the amounts or benefits owed under this Agreement will not be subject to tax, interest and penalties under Section 409A.

(b) Anything in this Agreement to the contrary notwithstanding, each payment of compensation made to the Executive shall be treated as a separate and distinct installment payment from all other such payments for purposes of Section 409A. The actual date of payment pursuant to this Agreement shall be within the sole discretion of the Company. In no event may the Executive be permitted to control the year in which payment occurs. With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A: (i) the right

to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; and (iii) such payments shall be made on or before the last day of the Executive’s taxable year following the taxable year in which the expense occurred, or such earlier date as required hereunder.

(c) Notwithstanding any other provision of this Agreement, to the extent that the right to any payment (including the provision of benefits) hereunder provides for the “deferral of compensation” within the meaning of Section 409A(d)(1), if the Executive is a “Specified Executive” within the meaning of Section 409A(a)(2)(B)(i) on the date of the Executive’s Separation from Service, then no such payment shall be made or commence during the period beginning on the date of the Executive’s Separation from Service and ending on the date that is six (6) months following the Executive’s Separation from Service or, if earlier, on the date of the Executive’s death. The amount of any payment that would otherwise be paid to the Executive during this period shall instead be paid to the Executive on the fifteenth (15^th) day of the first calendar month following the end of the six (6)-month period.

Source of Payments. All payments provided under this Agreement, other than payments made pursuant to a plan which provides otherwise, shall be paid in cash from the general funds of the Company, and no special or separate fund shall be established, and no other segregation of assets shall be made, to assure payment. The Executive shall have no right, title or interest whatsoever in or to any investments which the Company may make to aid the Company in meeting its obligations hereunder. To the extent that any person acquires a right to receive payments from the Company hereunder, such right shall be no greater than the right of an unsecured creditor of the Company.

Representation and Warranty. The Executive represents and warrants that he is not subject to any non-competition covenant or any other agreement with any party that would in any manner restrict or limit his ability to render the services required of him hereunder.

Assignment. This Agreement may be assigned by the Company. The Executive may not assign or delegate his duties under this Agreement.

Binding Agreement. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns.

Withholding. Any payments made or benefits provided to the Executive under this Agreement shall be reduced by any applicable withholding taxes or other amounts required or permitted to be withheld by law or contract.

Amendment; Waiver. Subject to Section 8, this Agreement may not be modified, amended or waived in any manner, except by an instrument in writing signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement by the other party (including the failure to insist upon strict compliance with any term, covenant or condition) shall

not operate or be construed as a waiver of (i) any other provision of this Agreement, or (ii) any subsequent breach by such party of a provision of this Agreement.

Governing Law. All matters affecting this Agreement, including the validity thereof, are to be subject to, and interpreted and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed in that State.

Arbitration. Any dispute or controversy arising under or in connection with this Agreement or otherwise in connection with the Executive’s employment by the Company that cannot be mutually resolved by the parties to this Agreement and their respective advisors and representatives shall be settled exclusively by arbitration in Los Angeles County, California in accordance with the rules of the American Arbitration Association before one arbitrator of exemplary qualifications and stature, who shall be selected jointly by an individual to be designated by the Company and an individual to be selected by the Executive, or if such two individuals cannot agree on the selection of the arbitrator, who shall be selected by the American Arbitration Association.

Survival of Certain Provisions. The rights and obligations set forth in this Agreement that, by their terms, extend beyond the Term shall survive the Term.

Entire Agreement. This Agreement and the Non-Competition Agreement contains the entire agreement and understanding of the parties hereto with respect to the matters covered herein, and supersedes all prior or contemporaneous negotiations, commitments, agreements and writings with respect to the subject matter hereof. All such other negotiations, commitments, agreements and writings shall have no further force or effect, and the parties to any such other negotiation, commitment, agreement or writing shall have no further rights or obligations thereunder.

Severability. In the event any provision or part of this Agreement is found to be invalid or unenforceable, only that particular provision or part so found, and not the entire Agreement, will be inoperative.

Counterparts. This Agreement may be executed by either of the parties hereto in counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

Headings. The headings of sections herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

Notices. All notices or communications hereunder shall be in writing, addressed as follows:

if to the Company:

IMAX Corporation

110 East 59^th Street

Suite 2100

New York, NY 10022

Attention: Chief Legal Officer

Facsimile:        (212) 371-7584

if to the Executive:

Greg Foster

Address on file with the Company.

All such notices shall be conclusively deemed to be received and shall be effective (i) if sent by hand delivery or overnight courier, upon receipt or (ii) if sent by electronic mail or facsimile, upon receipt by the sender of confirmation of such transmission; provided, however, that any electronic mail or facsimile will be deemed received and effective only if followed, within 48 hours, by a hard copy sent by certified United States mail.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company and the Executive have duly executed this Agreement as of the date first written above.

IMAX CORPORATION
By:	/s/ Carrie Lindzon-Jacobs
Name:	Carrie Lindzon-Jacobs
Title:	Executive Vice President, Human Resources
By:	/s/ Michael Lynne
Name:	Michael Lynne
Title:	Director
GREG FOSTER
/s/ Greg Foster

EX-31.1

IMAX CORPORATION

Exhibit 31.1

Certification Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

I, Richard L. Gelfond, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 of the registrant, IMAX Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 20, 2016	By:	/s/ Richard L. Gelfond
		Name:	Richard L. Gelfond
		Title:	Chief Executive Officer

EX-31.2

IMAX CORPORATION

Exhibit 31.2

Certification Pursuant to Section 302 of the Sarbanes - Oxley Act of 2002

I, Patrick McClymont, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 of the registrant, IMAX Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	October 20, 2016	By:	/s/ Patrick McClymont
		Name:	Patrick McClymont
		Title:	Chief Financial Officer & Executive Vice President

EX-32.1

IMAX CORPORATION

Exhibit 32.1

CERTIFICATIONS

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (A) and (B) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Richard L. Gelfond, Chief Executive Officer & Director of IMAX Corporation, a Canadian corporation (the “Company”), hereby certify, to my knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 20, 2016	By:	/s/ Richard L. Gelfond
		Name:	Richard L. Gelfond
		Title:	Chief Executive Officer

EX-32.2

IMAX CORPORATION

Exhibit 32.2

CERTIFICATIONS

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (A) and (B) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code), I, Patrick McClymont, Chief Financial Officer & Executive Vice President of IMAX Corporation, a Canadian corporation (the “Company”), hereby certify, to my knowledge, that:

The Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the “Form 10-Q”) of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	October 20, 2016	By:	/s/ Patrick McClymont
		Name:	Patrick McClymont
		Title:	Chief Financial Officer & Executive Vice President

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2016 shares
Document and Entity Information [Abstract]
Entity Registrant Name	IMAX Corporation
Entity Central Index Key	0000921582
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
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	66,813,963
Trading Symbol	IMAX

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 218,104	$ 317,449
Accounts receivable, net of allowance for doubtful accounts of $1,026 (December 31, 2015 - $1,146)	89,247	97,981
Financing receivables	118,897	117,231
Inventories	51,015	38,753
Prepaid expenses	11,603	6,498
Film assets	15,165	14,571
Property, plant and equipment	233,984	218,267
Other assets	26,419	26,136
Deferred income taxes	26,233	26,666
Other intangible assets	29,605	28,950
Goodwill	39,027	39,027
Total assets	859,299	931,529
Liabilities
Bank indebtedness	27,806	29,276
Accounts payable	16,733	23,455
Accrued and other liabilities	90,485	95,748
Deferred revenue	97,220	104,993
Total liabilities	232,244	253,472
Commitments and contingencies
Non-controlling interests
Non-controlling interests	2,693	3,307
Shareholders' equity
Capital stock common shares - no par value. Authorized - unlimited number. 66,813,963 - issued and 66,813,787 outstanding (December 31, 2015 - 69,673,244 - issued and outstanding)	435,829	448,310
Less: Treasury stock held in trust, 176 shares at cost	(6)	0
Other equity	180,358	168,425
Accumulated (deficit) earnings	(43,816)	15,499
Accumulated other comprehensive loss	(4,562)	(7,443)
Total shareholders' equity attributable to common shareholders	567,803	624,791
Non-controlling interests	56,559	49,959
Total shareholders' equity	624,362	674,750
Total liabilities and shareholders' equity	$ 859,299	$ 931,529

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Assets
Allowance for doubtful accounts	$ 1,026	$ 1,146
Shareholders' equity
Common stock, shares issued	66,813,963	69,673,244
Common stock, shares outstanding	66,813,787	69,673,244
Number of treasury shares held in trust for future settlement of share based awards	176

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Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues
Equipment and product sales	$ 30,835	$ 33,083	$ 81,064	$ 72,824
Services	37,195	33,024	122,853	115,698
Rentals	16,007	16,665	58,538	59,006
Finance income	2,288	2,329	6,991	6,803
Other	225	0	975	141
Revenues, total	86,550	85,101	270,421	254,472
Costs and expenses applicable to revenues
Equipment and product sales	15,690	21,949	49,075	43,010
Services	20,393	15,899	58,517	50,201
Rentals	5,504	4,864	15,367	13,856
Other	64	0	110	0
Cost and expenses applicable to revenues, total	41,651	42,712	123,069	107,067
Gross margin	44,899	42,389	147,352	147,405
Selling, general and administrative expenses (including share-based compensation expense of $7.7 million and $22.5 million for the three and nine months ended September 30, 2016, respectively (2015 - expense of $4.3 million and $14.9 million, respectively))	30,686	24,973	92,706	82,348
Research and development	4,460	2,722	11,603	9,611
Amortization of intangibles	531	429	1,537	1,302
Receivable provisions, net of recoveries	275	361	631	709
Asset impairments	1,223	245	1,223	245
Impairment of investments	0	0	194	350
Income from operations	7,724	13,659	39,458	52,840
Interest income	370	222	1,217	727
Interest expense	(469)	(463)	(1,325)	(1,170)
Income from operations before income taxes	7,625	13,418	39,350	52,397
Provision for income taxes	(2,551)	(2,477)	(9,635)	(12,408)
Loss from equity-accounted investments, net of tax	(690)	(427)	(2,471)	(1,610)
Net income	4,384	10,514	27,244	38,379
Less: Net income attributable to non-controlling interests	(1,859)	(1,904)	(7,401)	(5,028)
Net income attributable to common shareholders	$ 2,525	$ 8,610	$ 19,843	$ 33,351
Net income per share attributable to common shareholders - basic and diluted:
Net income per share - basic	$ 0.04	$ 0.12	$ 0.29	$ 0.47
Net income per share - diluted	$ 0.04	$ 0.12	$ 0.29	$ 0.46

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Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidated Statements of Operations [Abstract]
Share-based compensation costs	$ 7.7	$ 4.3	$ 22.5	$ 14.9

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net income	$ 4,384	$ 10,514	$ 27,244	$ 38,379
Unrealized net (loss) gain from cash flow hedging instruments	(293)	(2,309)	1,865	(4,983)
Realization of cash flow hedging net loss upon settlement	572	1,045	2,565	2,196
Foreign currency translation adjustments	(452)	(992)	(1,849)	(1,162)
Amortization of postretirement benefit plan actuarial loss	17	0	51	0
Other comprehensive (loss) income, before tax	(156)	(2,256)	2,632	(3,949)
Income tax (expense) benefit related to other comprehensive (loss) income	(77)	558	(1,166)	996
Other comprehensive (loss) income, net of tax	(233)	(1,698)	1,466	(2,953)
Comprehensive income	4,151	8,816	28,710	35,426
Less: Comprehensive income attributable to non-controlling interests	(1,717)	(2,056)	(5,986)	(5,192)
Comprehensive income attributable to common shareholders	$ 2,434	$ 6,760	$ 22,724	$ 30,234

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating Activities
Net income	$ 27,244	$ 38,379
Adjustments to reconcile net income to cash from operations:
Depreciation and amortization	34,179	31,191
Write-downs, net of recoveries	2,903	2,928
Change in deferred income taxes	(517)	5,097
Stock and other non-cash compensation	22,896	15,204
Unrealized foreign currency exchange (gain) loss	(206)	716
Loss from equity-accounted investments	2,769	2,756
Gain on non-cash contribution to equity-accounted investees	(298)	(1,146)
Investment in film assets	(14,162)	(12,069)
Changes in other non-cash operating assets and liabilities	(29,504)	(41,033)
Net cash provided by operating activities	45,304	42,023
Investing Activities
Purchase of property, plant and equipment	(10,033)	(38,443)
Investment in joint revenue sharing equipment	(25,524)	(20,969)
Investment in new business ventures	0	(2,000)
Acquisition of other intangible assets	(2,931)	(3,622)
Net cash used in investing activities	(38,488)	(65,034)
Financing Activities
Increase in bank indebtedness	0	17,568
Repayment of bank indebtedness	(1,500)	0
Repurchase of common shares	(100,378)	(34,279)
Settlement of restricted share units and options	(8,376)	(7,859)
Common shares issued - stock options exercised	7,196	23,838
Taxes paid on secondary sale and repatriation dividend	(2,991)	0
Taxes withheld and paid on employee stock awards vested	(230)	(223)
Treasury stock purchased for future settlement of restricted share units	(6)	(2,141)
Credit facility amendment fees paid	0	(1,310)
Issuance of subsidiary shares to non-controlling interests - private offering	0	40,000
Share issuance costs from the issuance of subsidiary shares to non-controlling interests - private offering	0	(2,000)
Net cash (used in) provided by financing activities	(106,285)	33,594
Effects of exchange rate changes on cash	124	275
(Decrease) increase in cash and cash equivalents during period	(99,345)	10,858
Cash and cash equivalents, beginning of period	317,449	106,503
Cash and cash equivalents, end of period	$ 218,104	$ 117,361

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Basis of Presentation

9 Months Ended

Sep. 30, 2016

Basis of Presentation and Condensed Consolidated Statements of Operations Supplemental Information [Abstract]

Basis of Presentation

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”).

The 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 11 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. These consolidated production companies have total assets of $8.4 million (December 31, 2015— $7.2 million) and total liabilities of $4.1 million as at September 30,2016 (December 31, 2015— $4.1 million). The majority of these consolidated assets are held by the IMAX Original Film Fund (the “Film Fund”) as described in note 16(b). For the other six film production companies which are VIEs, the Company did not consolidate these film entities since it does not have the power to direct activities and does not absorb the majority of the expected losses or expected residual returns. The Company equity accounts for these entities. As at September 30,2016, these six VIEs have total assets of $0.4 million (December 31, 2015— $0.4million) and total liabilities of $0.4 million (December 31, 2015— $0.4million). Earnings of the investees included in the Company’s condensed consolidated statements of operations amounted to $nil and $nil for the three andnine months ended September 30, 2016, respectively (2015— $nil and $nil, respectively). The carrying value of these investments in VIEs that are not consolidated is $nil at September 30,2016 (December 31, 2015— $nil). A loss in value of an investment other than a temporary decline is recognized as a charge to the condensed consolidated statements of operations. The Company’s exposure, which is determined based on the level of funding contributed by the Company and the development stage of the respective film, is $nil at September 30,2016 (December 31, 2015— $nil).

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

All 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 2015 Annual Report on Form10-K for the year ended December31, 2015 (“the 2015 Form10-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 December31, 2015, except as noted below.

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New Accounting Standards and Accounting Changes

9 Months Ended

Sep. 30, 2016

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

In January 2015, the FASB issued ASU No. 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). Prior to the changes under ASU 2015-01, an entity was required to separately classify, present and disclose extraordinary events and transactions under the disclosure requirements of Subtopic 225-20, “Income Statement – Extraordinary and Unusual Items” (“Subtopic 225-20”). ASU 2015-01 eliminates from U.S. GAAP the concept of extraordinary items therefore such separate disclosure is no longer required in the Income Statement of an entity. For public companies, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments can be applied prospectively or retrospectively. The Company prospectively adopted the amendments under ASU 2015-01 on January 1, 2016. The adoption of the standard did not have an impact on the disclosures presented in the condensed consolidated statements of operations for the three and nine months ended September 30, 2016 and 2015, respectively.

In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”).  ASU 2015-02 changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities such as limited partnerships and similar entities, and variable interest entities that have free arrangements and related party relationships.  Furthermore, all legal entities are subject to re-evaluation under the revised consolidation model. The amendments also provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. For public companies, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments can be applied retrospectively or using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. The Company adopted the amendments under ASU 2015-02 retrospectively on January 1, 2016. The adoption of the standard did not have an impact on the Company’s condensed consolidated financial statements as there was no change to the entities currently consolidated by the Company.

In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), and in August 2015 issued ASU No. 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”). Under ASU 2015-03, debt issuance costs reported on the balance sheet will be reflected as a direct deduction from the related debt liability rather than as an asset. While ASU 2015-03 addresses costs related to term debt, ASU 2015-15 provides clarification regarding costs to secure revolving lines of credit, which are, at the outset, not associated with an outstanding borrowing. ASU 2015-15 provides commentary that the U.S Securities and Exchange Commission (“SEC”) staff would not object to an entity deferring and presenting costs associated with line-of-credit arrangements as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. For public companies, the amendments apply to annual periods beginning on or after December 15, 2015, and interim periods within those years and are to be applied retrospectively. The Company adopted these standards on January 1, 2016. As at December 31, 2015, $0.4 million of unamortized debt issuance costs related to the Company’s loan to finance the construction of its Playa Vista facility were reclassified in the condensed consolidated balance sheet from Other assets to Bank indebtedness.  The Company will continue to defer and present the debt issuance cost related to its senior secured revolving credit facility in Other assets and amortize it ratably over the term of the agreement.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. ASU 2016-09 requires that the Company elect to account for forfeitures based on an estimate of the number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. The Company elected to early adopt ASU 2016-09 during the second quarter of 2016 and to account for forfeitures as they occur. The impact from the adoption of the provisions related to forfeiture rates was reflected in the Company’s condensed consolidated financial statements on a modified retrospective basis resulting in a balance sheet reclass of $4.4 million decrease to Accumulated earnings, $0.9 million increase to Deferred income taxes and $5.3 million increase to Other equity. A recovery of stock-based compensation expense of $2.7 million for the nine month period ended September 30, 2016 was also recorded. Amendments related to accounting for excess tax benefits have been adopted prospectively resulting in a tax benefit of $0.1 million for the nine months ended September 30, 2016, and amendments related to the condensed consolidated statement of cash flows have been adopted retrospectively. See Notes 11 and 12 for further discussion of the impact on the Company’s condensed consolidated financial statements from the adoption of ASU 2016-09.

Recently Issued FASB Accounting Standard Codification Updates

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The purpose of the amendment is intended to provide users of financial statements with more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. For public entities, the amendments in ASU 2016-01 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-01 on its condensed consolidated financial statements.

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. The Company is currently assessing the impact of ASU 2016-02 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”). The amendments in ASU 2016-05 apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The amendments clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. For public entities, the amendments in ASU 2016-05 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-05 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting” (“ASU 2016-07”). The purpose of the amendment is to eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by step basis as if the equity method had been in effect during all previous periods that the investment had been held. For public entities, the amendments in ASU 2016-07 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-07 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” (“ASU 2016-08”). The purpose of ASU 2016-08 is to clarify the implementation of guidance on principal versus agent considerations. For public entities, the amendments in ASU 2016-08 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-08 on its condensed consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”). The purpose of ASU 2016-10 is to provide more detailed guidance in the following key areas: identifying performance obligations and licenses of intellectual property. For public entities, the amendments in ASU 2016-10 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-10 on its condensed consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 pursuant to Staff announcements at the March 3, 2016 EITF Meeting” (“ASU 2016-11”). The purpose of ASU 2016-11 is to rescind from the FASB Accounting Standards Codification certain SEC paragraphs as a result of two SEC Staff Announcements at the March 3, 2016 meeting. For public entities, the amendments in ASU 2016-11 related to Topic 605 are effective for interim and annual reporting periods beginning after December 15, 2017 and amendments related to Topic 815 are effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently assessing the impact of ASU 2016-11 related to topic 605 on its condensed consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 660): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”). The purpose of ASU 2016-12 is to clarify certain narrow aspects of Topic 660 such as assessing the collectibility criterion, presentation of sales taxes and other similar taxes collected from customers, noncash consideration, contract modifications at transition, completed contracts at transition, and technical correction. For public entities, the amendments in ASU 2016-12 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-12 on its condensed consolidated financial statements.

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 August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The purpose of ASU 2016-15 is to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. For public entities, the amendments in ASU 2016-15 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-15 on its condensed consolidated financial statements.

Recently issued FASB accounting standard codification updates, except for the above noted standards, were not material to the Company’s condensed consolidated financial statements for the period ended September 30,2016.

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Financing Receivables

9 Months Ended

Sep. 30, 2016

Financing Receivables [Abstract]

Financing Receivables

3. Financing Receivables

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

	September 30,		December 31,
	2016		2015
Gross minimum lease payments receivable	$	11,341	$	13,998
Unearned finance income		(1,826)		(2,381)
Minimum lease payments receivable		9,515		11,617
Accumulated allowance for uncollectible amounts		(672)		(672)
Net investment in leases		8,843		10,945
Gross financed sales receivables		148,358		146,232
Unearned finance income		(37,661)		(39,378)
Financed sales receivables		110,697		106,854
Accumulated allowance for uncollectible amounts		(643)		(568)
Net financed sales receivables		110,054		106,286
Total financing receivables	$	118,897	$	117,231
Net financed sales receivables due within one year	$	21,260	$	19,068
Net financed sales receivables due after one year	$	88,794	$	87,218

As at September 30,2016, the financed sale receivables had a weighted average effective interest rate of 9.2% (December 31, 2015— 9.4%).

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Inventories

9 Months Ended

Sep. 30, 2016

Inventories [Abstract]

Inventories

4.  Inventories

	September 30,		December 31,
	2016		2015
Raw materials	$	32,662	$	25,750
Work-in-process		4,215		2,628
Finished goods		14,138		10,375
	$	51,015	$	38,753

At September 30,2016, finished goods inventory for which title had passed to the customer and revenue was deferred amounted to $5.1million (December 31, 2015— $5.4million).

During the three and nine months ended September 30, 2016, the Company had write-downs for excess and obsolete inventory based upon current estimates of net realizable value considering future events and conditions of a recovery of less than $0.1 million and an expense of $0.2 million, respectively (2015— recovery of $0.1million and expense of $0.4 million, respectively).

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Property Plant and Equipment

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

5.  Property Plant and Equipment

	As at September 30, 2016
			Accumulated		Net Book
	Cost		Depreciation		Value
Equipment leased or held for use
Theater system components	$	216,670	$	86,219	$	130,451
Camera equipment		5,902		3,750		2,152
		222,572		89,969		132,603
Assets under construction		14,890		-		14,890
Other property, plant and equipment
Land		8,203		-		8,203
Buildings		68,974		14,306		54,668
Office and production equipment		40,587		21,237		19,350
Leasehold improvements		7,159		2,889		4,270
		124,923		38,432		86,491
	$	362,385	$	128,401	$	233,984
	As at December 31, 2015
			Accumulated		Net Book
	Cost		Depreciation		Value
Equipment leased or held for use
Theater system components	$	199,974	$	74,568	$	125,406
Camera equipment		5,393		3,368		2,025
		205,367		77,936		127,431
Assets under construction		9,616		-		9,616
Other property, plant and equipment
Land		8,203		-		8,203
Buildings		67,150		12,679		54,471
Office and production equipment		34,396		17,035		17,361
Leasehold improvements		3,512		2,327		1,185
		113,261		32,041		81,220
	$	328,244	$	109,977	$	218,267

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Other Intangible Assets

9 Months Ended

Sep. 30, 2016

Other Intangible Assets [Abstract]

Other Intangible Assets

6.  Other Intangible Assets

	As at September 30, 2016
			Accumulated		Net Book
	Cost		Amortization		Value
Patents and trademarks	$	11,181	$	6,928	$	4,253
Licenses and intellectual property		22,490		7,295		15,195
Other		14,023		3,866		10,157
	$	47,694	$	18,089	$	29,605
	As at December 31, 2015
			Accumulated		Net Book
	Cost		Amortization		Value
Patents and trademarks	$	10,399	$	6,502	$	3,897
Licenses and intellectual property		22,390		6,464		15,926
Other		11,878		2,751		9,127
	$	44,667	$	15,717	$	28,950

Other intangible assets of $14.0 million are comprised mainly of the Company’s investment in an enterprise resource planning system. Fully amortized other intangible assets are still in use by the Company.

During the nine months ended September 30, 2016, the Company acquired $3.2million in other intangible assets. The weighted average amortization period for these additions was 10years.

During the three and nine months ended September 30, 2016, the Company incurred costs of less than $0.1 million and $0.2 million, respectively, to renew or extend the term of acquired other intangible assets which were recorded in selling, general and administrative expenses (2015– less than $0.1million and less than $0.1 million, respectively).

As at September 30,2016, estimated amortization expense for each of the years ended December31, are as follows:

2016 (three months remaining)	$	858
2017		3,270
2018		3,270
2019		3,270
2020		3,270

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Credit Facility and Playa Vista Loan

9 Months Ended

Sep. 30, 2016

Credit Facility and Playa Vista Construction Loan [Abstract]

Credit Facility and Playa Vista Construction Loan [Text Block]

7.  Credit Facility and Playa Vista Loan

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

The terms of the Credit Facility are set forth in the Fourth Amended and Restated Credit Agreement (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 (Wells Fargo, together with the lenders named therein, the “Lenders”) and Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner and in various collateral and security documents entered into by the Company and the Guarantors. Each of the Guarantors has also entered into a guarantee in respect of the Company’s obligations under the Credit Facility. On February 22, 2016, the Company amended the terms of the Credit Agreement to increase the general restricted payment basket thereunder (which covers, among other things, the repurchase of shares) from $150.0 million to $350.0 million in the aggregate after the amendment date.

The Company was in compliance with all of its requirements at September 30,2016.

Total amounts drawn and available under the Credit Facility at September 30,2016 were $nil and $200.0 million, respectively (December 31, 2015 — $nil and $200.0 million, respectively).

As at September 30,2016, the Company did not have any letters of credit and advance payment guarantees outstanding (December 31, 2015 — $nil), under the Credit Facility.

Playa Vista Financing

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

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

On October 19, 2015, PV Borrower converted the Playa Vista Construction Loan from a construction loan into a permanent loan (“Playa Vista Loan”) pursuant to the terms of the loan documents. Pursuant to the conversion, PV Borrower increased the principal balance of the loan by an additional $7.7 million, to $30.0 million. Prior to the conversion, the Playa Vista Construction Loan bore interest at a variable interest rate per annum equal to 2.25% above the 30-day LIBOR rate, and PV Borrower was required to make monthly payments of interest only. However, as a result of the conversion, the interest rate decreased from 2.25% to 2.0% above the 30-day LIBOR rate, and PV Borrower will be required to make monthly payments of combined principal and interest over a 10-year term with a lump sum payment at the end of year 10. The 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, granting a first lien on and security interest in the Playa Vista property and the Playa Vista Project, including all improvements to be constructed thereon, and other documents evidencing and securing the loan (the “Loan Documents”). The Loan Documents include absolute and unconditional payment and completion guarantees provided by the Company to Wells Fargo for the performance by PV Borrower of all the terms and provisions of the Playa Vista Loan and an environmental indemnity also provided by the Company.

The Loan Documents contain affirmative, negative and financial covenants (including compliance with the financial covenants of the Company’s outstanding revolving senior secured facility with Wells Fargo), agreements, representations, warranties, borrowing conditions, and events of default customary for development projects such as the Playa Vista Project.

Bank indebtedness includes the following:

	September 30,		December 31,
	2016		2015
Playa Vista Loan	$	28,167	$	29,667
Deferred charges on debt financing		(361)		(391)
	$	27,806	$	29,276

Total amounts drawn under the loan at September 30,2016 was $28.2 million (December 31, 2015 — $29.7 million). The effective interest rate for the three andnine months ended September 30, 2016was2.51% and 2.46%, respectively (2015 — 2.45% and 2.44%, respectively).

In accordance with the loan agreement, the Company is obligated to make payments on the principal of the loan as follows:

2016 (three months remaining)	$	500
2017		2,000
2018		2,000
2019		2,000
2020		2,000
Thereafter		19,667
	$	28,167

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 September 30,2016 as the fair value exceeded the notional value of the forward contracts. As at September 30,2016, the Company has $26.9 million in notional value of such arrangements outstanding.

Bank of Montreal Facility

As at September 30,2016, the Company has available a $10.0million facility (December 31, 2015— $10.0million) 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 September 30,2016, the Company has letters of credit and advance payment guarantees outstanding of $0.1million (December 31, 2015 — $0.3 million) under the Bank of Montreal Facility.

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Contingencies and Guarantees

9 Months Ended

Sep. 30, 2016

Commitments, Contingencies and Guarantees [Abstract]

Contingencies and Guarantees

8.  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.

1. 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 and other fees under the license and consulting agreements. Discovery is currently ongoing and a final hearing before the ICDR has been scheduled for the week of July 10, 2017. Given the stage of discovery, the Company is unable to determine a range of potential damages in this matter. However, the Company  believes that the amount of loss, if any, 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.

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

3. In March 2013, IMAX (Shanghai) Multimedia Technology Co., Ltd., the Company’s majority-owned subsidiary in China, received notice from the Shanghai office of the General Administration of Customs that it had been selected for a customs audit.In the third quarter of 2016, IMAX (Shanghai) Multimedia Technology Co., Ltd put forth a proposal to the Shanghai office of the General Administration of Customs in an attempt to resolve the audit issue of what costs should be subject to duties and taxes on importation into China. As a result of the proposal, the Company has accrued $1.6 million as at September 30, 2016, of which $0.8 million is recorded in costs and expenses applicable to revenues and $0.8 million is recorded in property, plant and equipment. An additional $1.8 million will be paid to the authorities as value-added tax, which local management believes is collectible in the form of future input tax credits, and therefore has been presented as a net balance of $nil in Accrued and other liabilities as at September 30, 2016. The Company is unable to assess any other potential impact of the customs audit, if any, at this time.

4. 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. Giencourt submitted its statement of claim in January 2015, the Company submitted its statement of defense and counterclaim in April 2015 and Giencourt submitted its arbitration reply paper in September 2015. 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 seeks to recover from the Company. The Company has asserted a counterclaim against Giencourt for breach of contract and seeks to recover lost profits in excess of $24.0 million under the agreements. A final hearing with closing statements is scheduled for October 20 and 21, 2016. In addition, on December 10, 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 Company strongly disputes that discussions about a potential resolution of this matter amounted to an enforceable settlement. The panel has asked the parties to brief this issue, and oral arguments will be held during the upcoming October hearings. Although no assurances can be given with respect to the ultimate outcome of the proceedings, the Company believes that it has meritorious defenses and claims, and will continue to vigorously pursue them.

5. 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.

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

	September 30,		December 31,
	2016		2015
Balance at the beginning of period	$	-	$	6
Warranty redemptions		-		(6)
Warranties issued		15		-
Revisions		-		-
Balance at the end of period	$	15	$	-

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 sheet as at September 30,2016 and December31, 2015 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.

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Condensed Consolidated Statements of Operations Supplemental Information

9 Months Ended

Sep. 30, 2016

Basis of Presentation and Condensed Consolidated Statements of Operations Supplemental Information [Abstract]

Condensed Consolidated Statements of Operations Supplemental Information

9.  Condensed Consolidated Statements of Operations Supplemental Information

1. 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 $1.3million and $3.0 million for the three and nine months ended September 30, 2016, respectively (2015— $1.3 million and $2.8 million, respectively).

Film exploitation costs, including advertising and marketing, totaled $4.8million and $13.8 million for the three and nine months ended September 30, 2016, respectively (2015— $3.4million and $8.2 million, respectively) and are recorded in costs and expenses applicable to revenues-services as incurred.

Commissions are recognized as costs and expenses applicable to revenues-rentals in the month they are earned. These costs totaled $0.6million and $0.9 million for the three and nine months ended September 30, 2016, respectively (2015—$0.3million and $0.5 million, respectively). Direct advertising and marketing costs for each theater are charged to costs and expenses applicable to revenues-rentals as incurred. These costs totaled an expense of $0.4 million and $1.0 million for the three and nine months ended September 30, 2016, respectively (2015—$0.6 million and $1.2 million, respectively).

2. Foreign Exchange

Included in selling, general and administrative expenses for the three and nine months ended September 30, 2016is a loss of $0.2million and a loss of $0.1 million, respectively (2015— loss of $0.5million and a loss of $1.5 million, respectively), for net foreign exchange gains/losses related to the translation of foreign currency denominated monetary assets and liabilities. See note 15(d) for additional information.

3. 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 49exhibitors for a total of 981theater systems, of which 592theaters were operating as at September 30,2016, 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 note2(m) of the Company’s 2015 Form10-K.

Amounts attributable to transactions arising between the Company and its customers under joint revenue sharing arrangements are included in Equipment and Product Sales and Rentals revenue and for the three and nine months ended September 30, 2016 amounted to $19.7million and $66.9 million, respectively (2015— $19.8million and $67.3 million, respectively).

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 net box-office receipts of the film, which in recent years has ranged from 10-15%. The Company does not typically hold distribution rights or the copyright to these films.

For the nine months ended September 30, 2016, the majority of IMAX DMR revenue was earned from the exhibition of 48 IMAX DMR films (2015 – 48) throughout the IMAX theater network. The accounting policy for the Company’s IMAX DMR arrangements is disclosed in note2(m) of the Company’s 2015 Form10-K.

Amounts attributable to transactions arising between the Company and its customers under IMAX DMR arrangements are included in Services revenue and for the three and nine months ended September 30, 2016 amounted to $21.6million and $78.8 million, respectively (2015— $20.9million and $75.1 million, respectively).

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.

The accounting policies relating to co-produced film arrangements are disclosed in notes2(a) and 2(m) of the Company’s 2015 Form10-K.

As at September 30,2016, the Company has one significant co-produced film arrangement which represents the VIE total assets balance of $0.4 million and total liabilities balance of $0.4million and five other co-produced film arrangements, the terms of which are similar.

For the three and nine months ended September 30, 2016, amounts totaling $0.5million and $1.0 million, respectively (2015— $0.3million and $1.4 million, respectively) attributable to transactions between the Company and other parties involved in the production of the films have been included in cost and expenses applicable to revenues-services.

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Condensed Consolidated Statements of Cash Flows Supplemental Information

9 Months Ended

Sep. 30, 2016

Condensed Consolidated Statements of Cash Flows Supplemental Information [Abstract]

Condensed Consolidated Statements of Cash Flows Supplemental Information

10.  Condensed Consolidated Statements of Cash Flows Supplemental Information

1. Changes in other non-cash operating assets and liabilities are comprised of the following:

	Nine Months Ended
	September 30,
		2016		2015
Decrease (increase) in:
Accounts receivable	$	6,571	$	(12,048)
Financing receivables		(1,145)		(9,932)
Inventories		(12,508)		(18,904)
Prepaid expenses		(5,105)		(2,159)
Commissions and other deferred selling expenses		285		(206)
Insurance recoveries		132		28
Other assets		(1,299)		(2,388)
Increase (decrease) in:
Accounts payable		(6,616)		4,212
Accrued and other liabilities		(1,991)		(17,528)
Deferred revenue		(7,828)		17,892
	$	(29,504)	$	(41,033)

2. Cash payments made on account of:

	Nine Months Ended
	September 30,
		2016		2015
Income taxes	$	20,822	$	21,542
Interest	$	541	$	302

3. Depreciation and amortization are comprised of the following:

	Nine Months Ended
	September 30,
		2016		2015
Film assets	$	11,842	$	11,917
Property, plant and equipment
Joint revenue sharing arrangements		11,581		10,043
Other property, plant and equipment		7,355		5,635
Other intangible assets		2,368		2,354
Other assets		631		579
Deferred financing costs		402		663
	$	34,179	$	31,191

4. Write-downs, net of recoveries, are comprised of the following:

	Nine Months Ended
	September 30,
		2016		2015
Accounts receivable	$	556	$	709
Financing receivables		75		-
Inventories		246		405
Film assets		1,000		-
Property, plant and equipment		792		1,464
Impairment of investments		194		350
Other intangible assets		40		-
	$	2,903	$	2,928

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Taxes [Abstract]

Income Taxes

11. Income Taxes

1. 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 September 30,2016, 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 September 30,2016, the Company had net deferred income tax assets after valuation allowance of $26.2 million (December 31, 2015— $26.7million), which consists of a gross deferred income tax asset of $26.5 million (December 31, 2015— $27.0 million), against which the Company is carrying a $0.3million valuation allowance (December 31, 2015— $0.3million).

ASU 2016-09, related to stock-based compensation, was issued in March 2016 and early adopted by the Company in June 2016. ASU 2016-09 eliminates additional paid in capital ("APIC") pools and requires excess tax benefits and tax deficiencies to be recorded in the condensed consolidated statements of operations when the awards vest or are settled. Amendments related to accounting for excess tax benefits have been adopted prospectively resulting in a tax benefit of $nil and $0.1 million for the three and nine months ended September 30, 2016, respectively. In addition, modified retrospective adoption of ASC 2016-09 eliminates the requirement that excess tax benefits be realized before they can be recognized. The Company has also recorded a cumulative-effect adjustment of $0.9 million to Accumulated earnings and Deferred income taxes related to the impact from adoption of the provisions related to forfeiture rates. See Notes 2 and 12 for further discussion of the impact from the adoption of ASU 2016-09.

2. Income Tax Effect on Other Comprehensive (Loss) Income

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Unrealized change in cash flow hedging instruments	$	76	$	606	$	(485)	$	1,309
Realized change in cash flow hedging instruments upon settlement		(149)		(274)		(667)		(577)
Amortization of actuarial loss on postretirement benefit plan		(4)		-		(14)		-
Foreign currency translation adjustments		-		226		-		264
	$	(77)	$	558	$	(1,166)	$	996

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Capital Stock

9 Months Ended

Sep. 30, 2016

Capital Stock [Abstract]

Capital Stock

12. Capital Stock

1. Stock-Based Compensation

The compensation costs recorded in the condensed consolidated statements of operations for the Company’s stock-based compensation plans were $7.7million and $22.5 million for the three and nine months ended September 30, 2016, respectively (2015—$4.3million and $14.9 million, respectively).

As at September 30,2016, the Company has reserved a total of 12,467,960 (December 31, 2015— 7,023,258) common shares for future issuance under the Company’s Stock Option Plan (“SOP”) and the IMAX Corporation Amended and Restated Long-Term Incentive Plan (“IMAX LTIP”). Of the common shares reserved for issuance, there are options in respect of 5,473,673 common shares and restricted share units (“RSUs”) in respect of 1,140,138 common shares outstanding at September 30,2016. At September 30,2016, options in respect of 3,924,432 common shares were vested and exercisable.

Stock Option Plan

The Company recorded an expense of $3.4million and $9.4 million for the three and nine months ended September 30, 2016, respectively (2015— $2.3million and $8.4 million, respectively) related to stock option grants issued to employees and directors in the IMAX LTIP and SOP plans. An income tax benefit is recorded in the condensed consolidated statements of operations of $0.9 million and $2.4 million for the three and nine months ended September 30, 2016, respectively (2015—$0.5 million and $1.8 million, respectively), for these costs.

The weighted average fair value of all stock options granted to employees and directors for the three and nine months ended September 30, 2016 at the grant date was $7.80and $8.16 per share, respectively (2015— n/a and $8.07per share, respectively). The following assumptions were used to estimate the average fair value of the stock options:

	Three Months		Nine Months
	Ended September 30,		Ended September 30,
	2016	2015	2016	2015
Average risk-free interest rate	1.44%	n/a	1.67%	1.97%
Expected option life (in years)	4.44 - 4.88	n/a	4.44 - 5.24	3.55 - 5.76
Expected volatility	30%	n/a	30%	30%
Dividend yield	0%	n/a	0%	0%

Stock options to Non-Employees

There were no common share options issued to non-employees during the three and nine months ended September 30, 2016 and 2015.

As at September 30,2016, non-employee stock options outstanding amounted to 28,750 stock options (2015 — 39,500) with a weighted average exercise price of $26.90 per share (2015— $26.78 per share). 26,950 stock options (2015— 21,525) were exercisable with an average weighted exercise price of $26.97 per share (2015— $26.34 per share) and the vested stock options have an aggregate intrinsic value of $0.1million(2015— $0.2million).

For the three and nine months ended September 30, 2016, the Company recorded an expense of less than $0.1 million and a recovery less than $0.1 million, respectively (2015— expense of less than $0.1 million and $0.1 million, respectively) to cost and expenses related to revenues – services and selling, general and administrative expenses related to the non-employee stock options. Included in accrued liabilities is an accrual of less than $0.1million for non-employee stock options (December 31, 2015 — less than $0.1 million).

China Long Term Incentive Plan (“China LTIP”)

The China LTIP was adopted by IMAX China Holding, Inc. (“IMAX China”), a subsidiary of the Company, in October 2012.  Each stock option (“China Option”), RSU or cash settled share-based payment (“CSSBP”) issued under the China LTIP represents an opportunity to participate economically in the future growth and value creation of IMAX China. Prior to the initial public offering of IMAX China on October 8, 2015 (the “IMAX China IPO”), the China Options and CSSBPs issued by IMAX China operated in tandem with options granted to certain employees of IMAX China under the Company’s SOP and the IMAX LTIP (“Tandem Options”).

During 2015, no Tandem Options were granted in conjunction with China Options or CSSBPs. Immediately prior to the IMAX China IPO, there were 186,446 outstanding and unvested Tandem Options issued under the Company’s SOP and IMAX LTIP with a weighted average exercise price of $23.70 per share. The Tandem Options had a maximum contractual life of 7 years. The total fair value of the Tandem Options granted with respect to the China LTIP was $1.9 million. The Company was recognizing this expense over a 5 year period.

Pursuant to their terms, upon the occurrence of a qualified initial public offering or upon a change in control on or prior to the fifth anniversary of the grant date, the 186,446 Tandem Options issued would forfeit immediately and the related charge would be reversed. As a result of the IMAX China IPO on October 8, 2015, the 186,446 Tandem Options with an average price of $23.70 per share were forfeited immediately. The Company recorded a recovery of $0.6 million in 2015 related to the forfeiture of Tandem Options issued under the Company’s SOP and IMAX LTIP. During the three and nine months ended September 30, 2015, the Company recorded an expense of $0.1 million and $0.3 million, respectively, related to the Tandem Options.

The Company subsequently recognized an immediate charge related to the vesting of China Options and certain CSSBPs for China employees. The total fair value of the China Options and CSSBP awards granted with respect to the China LTIP was $3.9 million and $2.1 million, respectively. During the fourth quarter of 2015, a charge of $2.1 million and $1.4 million was recorded relating to the China Options and CSSBPs, respectively. The remaining charge will be recognized over the related requisite period. The CSSBPs represent the right to receive cash payments in an amount equal to a certain percentage of the excess of the total equity value of IMAX China based on the per share price in the IMAX China IPO over the strike price of the CSSBPs. The CSSBPs were issued in conjunction with the China LTIP, with similar terms and conditions as the China Options. The CSSBP awards are accounted as liability awards, however the fair value of the liability is fixed at the time of the initial public offering. During the fourth quarter of 2015, a portion of the CSSBPs vested and were settled in cash for $1.0 million. 

In connection with the IMAX China IPO and in accordance with the China LTIP, IMAX China adopted a post-IPO share option plan and a post-IPO restricted stock unit plan. Pursuant to these plans, IMAX China issued additional China Options and China LTIP Restricted Share Units (“China RSUs”) during the nine months ended September 30, 2016. No additional China Options and China RSUs were issued for the three months ended September 30,2016.

During the three and nine months ended September 30, 2016, the Company recorded an expense related to the China Options, China RSUs and CSSBPs of $0.2 million and $0.7 million, $0.1 million and $0.4 million and $0.1 million and $0.3 million, respectively. The liability recognized with respect to the CSSBPs as at September 30,2016 was $0.7 million (December 31, 2015 — $0.4 million).

Stock Option Summary

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

				Weighted Average Exercise
	Number of Shares			Price Per Share
	2016	2015	2016		2015
Options outstanding, beginning of period	4,805,244	5,925,660	$	27.03	$	24.24
Granted	984,452	871,431		31.49		31.56
Exercised	(268,516)	(1,231,964)		20.54		19.35
Forfeited	(45,024)	(45,474)		28.03		28.26
Cancelled	(2,483)	-		33.80		-
Options outstanding, end of period	5,473,673	5,519,653		28.14		26.45
Options exercisable, end of period	3,924,432	3,195,836		27.34		25.14

The Company cancelled 2,483 stock options from its IMAX LTIP surrendered by a Company employee during the three and nine months ended September 30, 2016, respectively (2015 – nil and nil, respectively). No stock options were cancelled from its SOP surrendered by Company employees during the three and nine months ended September 30, 2016 and 2015.

As at September 30,2016, options that are exercisable have an intrinsic value of $9.7million and a weighted average remaining contractual life of 3.9 years. The intrinsic value of options exercised in the three and nine months ended September 30, 2016 was $0.5 million and $3.2 million, respectively (2015— $1.2million and $21.4 million, respectively).

Restricted Share Units

RSUs have been granted to employees, consultants and directors under the IMAX LTIP. Each RSU represents a contingent right to receive one common share and is the economic equivalent of one common share. The grant date fair value of each RSU is equal to the share price of the Company’s stock at the grant date. The Company recorded an expense of $3.9 million and $11.6 million for the three and nine months ended September 30, 2016, respectively (2015— $1.9 million and $6.2 million, respectively), related to RSU grants issued to employees and directors in the plan. In addition, the Company recorded an expense of $nil and $nil for the three and nine months ended September 30, 2016, respectively (2015— less than $0.1 million and less than $0.1 million, respectively), related to RSU grants issued to certain advisors and strategic partners of the Company.

During the three and nine months ended September 30, 2016, in connection with the vesting of RSUs, the Company settled 27,416 and 271,032, respectively (2015 — 32,345 and 192,077, respectively) common shares to IMAX LTIP participants, of which 21,871 and 50,167, respectively (2015 —  nil and 21,709, respectively) common shares, net of shares withheld for tax withholdings of 5,328 and 8,836, respectively (2015 — 5,763 and 5,981, respectively) were issued from treasury and 217 and 212,029, respectively (2015 — 26,582 and 164,387, respectively) common shares were settled through the open market purchases by the IMAX LTIP trustee.

Total stock-based compensation expense related to non-vested RSUs not yet recognized at September 30,2016 and the weighted average period over which the awards are expected to be recognized is $26.8 million and 2.4 years, respectively (2015— $16.4 million and 3.0 years, respectively). The Company’s actual tax benefits realized for the tax deductions related to the vesting of RSUs was $0.3 million and $2.6 million for the three and nine months ended September 30, 2016, respectively (2015— $0.4 million and $2.0 million, respectively).

Historically, RSUs granted under the IMAX LTIP have vested between immediately and fouryears from the grant date. In connection with the amendment and restatement of the IMAX LTIP at the Company’s annual and special meeting of shareholders on June 6, 2016, the IMAX LTIP plan was amended to impose a minimum one-year vesting period on future RSU grants, with a carve-out for 300,000 RSUs that may vest on a shorter schedule. Vesting of the RSUs is subject to continued employment or service with the Company.

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

	Number of Awards		Weighted Average Grant Date Fair Value Per Share
	2016	2015		2016		2015
RSUs outstanding, beginning of period	973,637	595,834	$	32.27	$	27.13
Granted	465,968	337,557		31.70		34.39
Vested and settled	(271,032)	(192,077)		29.30		28.93
Forfeited	(28,435)	(19,499)		30.78		29.37
RSUs outstanding, end of period	1,140,138	721,815		32.78		29.99

As at September 30,2016, the IMAX LTIP trustee held 176 shares purchased for less than $0.1 million in the open market to be issued upon the settlement of RSUs. The shares held with the trustee are recorded at cost and are reported as a reduction against capital stock on the condensed consolidated balance sheet.

Issuer Purchases of Equity Securities

On June16, 2014, the Company’s board of directors approved a new $150.0 million share repurchase program for shares of the Company’s common stock, which program was amended on April 20, 2016 to increase the aggregate purchase allowance to $200.0 million. Purchases under the program commenced during the third quarter of 2014, and the program expires on June30, 2017.The repurchases may be made either in the open market or through private transactions, subject to market conditions, applicable legal requirements and other relevant factors.The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time.

During the three and nine months ended September 30, 2016, the Company repurchased 500,000 and 3,290,512 common shares, respectively (2015— 1,000,000 and 1,000,000 common shares, respectively), at an average price of $29.32 and $30.48 per share, respectively (2015— $34.25 and $34.25 per share, respectively). The retired shares were purchased for $14.7 million and $100.4 million, respectively (2015— $34.3 million and $34.3 million, respectively). The average carrying value of the stock retired was deducted from common stock and the remaining excess over the average carrying value of stock was charged to accumulated deficit.

The total number of shares purchased during the three and nine months ended September 30, 2016 does not include any shares purchased in the administration of employee share-based compensation plans (which amounted to nil and 249,657 common shares, respectively, at an average price of $nil and $33.55 per share, respectively).

Canadian Securities Law Matters

The Company has received an exemption decision issued by the Ontario Securities Commission, dated April 1, 2016, for relief from the formal issuer bid requirements under Canadian securities laws. The exemption decision permits the Company to repurchase up to 10% of its outstanding common shares in any twelve-month period through the facilities of the New York Stock Exchange (“NYSE”) under repurchase programs that the Company may implement from time to time. The Canadian securities laws regulate an issuer’s ability to make repurchases of its own securities.

The Company sought the exemption so that it can make repurchases under its repurchase programs in excess of the maximum allowable in reliance on the existing “other published markets” exemption from the formal issuer bid requirements available under Canadian securities laws. The “other published markets” exemption caps the Company’s ability to repurchase its securities through the facilities of the NYSE at 5% of the issuer’s outstanding securities during any 12-month period.

The conditions of the exemption decision are as follows: (i) any repurchases made in reliance on the exemption decision must be permitted under, and part of repurchase programs established and conducted in accordance with, U.S. securities laws and NYSE rules, (ii) the aggregate number of common shares acquired in reliance on the exemption decision by the Company and any person or company acting jointly or in concert with the Company within any 12 months does not exceed 10% of the outstanding common shares at the beginning of the 12-month period, (iii) the common shares are not listed and posted for trading on an exchange in Canada, (iv) the exemption decision applies only to the acquisition of common shares by the Company within 36 months of the date of the decision, and (v) prior to purchasing common shares in reliance on the exemption decision, the Company discloses the terms of the exemption decision and the conditions applicable thereto in a press release that is issued on SEDAR and includes such language as part of the news release required to be issued in accordance with the “other published markets exemption” in respect of any repurchase program that may be implemented by the Company.

Impact of Stock-based Compensation Accounting Standard Update

ASU 2016-09, related to stock-based compensation, was issued in March 2016 and early adopted in June 2016. ASU 2016-09 eliminates the requirement to estimate and apply a forfeiture rate to reduce stock compensation expense during the vesting period and, instead, account for forfeitures as they occur. ASU 2016-09 requires that this change be adopted using the modified retrospective approach. The impact from the adoption of the provisions related to forfeiture rates was reflected on a modified retrospective basis resulting in a balance sheet reclass of $4.4 million decrease to Accumulated earnings, $0.9 million increase to Deferred income taxes and $5.3 million increase to Other equity. An increase in APIC and a reduction in stock-based compensation expense of $2.7 million for the nine month period ended September 30, 2016 was also recorded.  Additionally, ASU 2016-09 addresses the presentation of excess tax benefits and employee taxes paid on the condensed consolidated statement of cash flows. The Company is required to present excess tax benefits as an operating activity on the condensed consolidated statement of cash flows, which is where the Company previously classified these items. ASU 2016-09 also requires the presentation of employee taxes as a financing activity on the condensed consolidated statement of cash flows. This change was reflected in the condensed consolidated statement of cash flows retrospectively. See Notes 2 and 11 for further discussion of the impact from the adoption of ASU 2016-09.

2. Income Per Share

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

	Three Months				Nine Months
	Ended September 30,				Ended September 30,
	2016		2015		2016		2015
Net income attributable to common shareholders	$	2,525	$	8,610	$	19,843	$	33,351
Less: Accretion charges associated with redeemable common stock		-		(263)		-		(747)
Net income applicable to common shareholders	$	2,525	$	8,347	$	19,843	$	32,604
Weighted average number of common shares (000's):
Issued and outstanding, beginning of period		67,067		70,152		69,673		68,988
Weighted average number of shares issued (repurchased) during the period		23		(453)		(1,620)		594
Weighted average number of shares used in computing basic income per share		67,090		69,699		68,053		69,582
Assumed exercise of stock options and RSUs, net of shares assumed repurchased		656		1,161		668		1,520
Weighted average number of shares used in computing diluted income per share		67,746		70,860		68,721		71,102

The calculation of diluted earnings per share excludes 2,570,983 and 2,834,896 shares, respectively that are issuable upon the vesting of 19,530 and 283,443 RSUs, respectively and the exercise of 2,551,453 and 2,551,453 stock options, respectively for the three and nine months ended September 30, 2016, as the impact would be antidilutive. The calculation of diluted earnings per share excludes 1,473,950 and 1,067,859 shares, respectively that are issuable upon the vesting of nil and 61,534 RSUs, respectively and the exercise of 1,473,950 and 1,006,325stock options, respectively for the three and nine months ended September 30, 2015, as the impact would be antidilutive.

As part of the adoption of ASU 2016-09, the excess tax benefit is no longer included in the calculation of diluted shares under the treasury stock method. This has been applied prospectively.

3. Shareholder’s Equity Attributable to Common Shareholders

The following summarizes the movement of Shareholders’ Equity attributable to common shareholders for the nine months ended September 30, 2016:

Balance as at December 31, 2015	$	624,791
Net income attributable to common shareholders		19,843
Adjustments to capital stock:
Cash received from the issuance of common shares		5,514
Issuance of common shares for vested RSUs		1,121
Fair value of stock options exercised at the grant date		2,104
Average carrying value of repurchased and retired common shares		(21,220)
Share held in treasury		(6)
Adjustments to other equity:
Employee stock options granted		10,092
Non-employee stock options granted and vested		30
Fair value of stock options exercised at the grant date		(2,104)
RSUs granted		12,242
RSUs vested		(8,793)
Stock exercised from treasury shares		(1,216)
Cash received from the issuance of common shares in excess of par value		1,682
Adjustments to accumulated deficit:
Common shares repurchased and retired		(79,158)
Adjustments to accumulated other comprehensive loss:
Unrealized net gain from cash flow hedging instruments		1,865
Realization of cash flow hedging net loss upon settlement		2,565
Foreign currency translation adjustments		(434)
Amortization of actuarial loss on postretirement benefit plan		51
Tax effect of movement in other comprehensive income		(1,166)
Balance as at September 30, 2016	$	567,803

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Segmented Information

9 Months Ended

Sep. 30, 2016

Segmented Information [Abstract]

Segmented Information

13.  Segmented Information

The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-production; and other. The IMAX systems segment includes the design, manufacture, sale or lease of IMAX theater projection system equipment. The theater system maintenance segment includes the maintenance of IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment includes the provision of IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The film production and IMAX DMR segment includes the production of films and the performance of film re-mastering services. The film distribution segment includes the distribution of films for which the Company has distribution rights. The film post-production segment provides film post-production and film print services. The Company refers to all theaters using the IMAX theater system as “IMAX theaters”. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items. The accounting policies of the segments are the same as those described in note 2 to the audited consolidated financial statements included in the Company’s 2015 Form 10-K.

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

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

Transactions among the other segments are not significant.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2016		2015		2016		2015
Revenue(1)
IMAX theater systems
IMAX systems	$	25,687	$	30,153	$	70,508	$	64,632
Theater system maintenance		10,293		9,337		30,031		27,345
Joint revenue sharing arrangements		19,698		19,797		66,940		67,259
		55,678		59,287		167,479		159,236
Films
Production and IMAX DMR		21,549		20,865		78,767		75,144
Distribution		2,092		967		3,345		3,513
Post-production		2,327		761		6,436		5,259
		25,968		22,593		88,548		83,916
Other		4,904		3,221		14,394		11,320
Total	$	86,550	$	85,101	$	270,421	$	254,472
Gross margin
IMAX theater systems
IMAX systems(2)	$	16,743	$	13,109	$	38,252	$	34,831
Theater system maintenance		3,398		3,521		10,207		9,891
Joint revenue sharing arrangements(2)		10,980		12,130		44,716		46,816
		31,121		28,760		93,175		91,538
Films
Production and IMAX DMR(2)		12,448		13,929		52,398		55,642
Distribution(2)		258		15		(998)		(201)
Post-production		1,003		(48)		3,028		847
		13,709		13,896		54,428		56,288
Other		69		(267)		(251)		(421)
Total	$	44,899	$	42,389	$	147,352	$	147,405

___________

(1)

The Company’s largest customer represented 11.2% and 14.3% of total revenues for the three and nine months ended September 30, 2016, respectively (2015 — 17.6% and 17.4%, respectively).

(2)

IMAX systems include marketing and commission costs of $0.8million and $1.9 million for the three and nine months ended September 30, 2016, respectively (2015 — $0.9 million and $1.8 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.4million and $2.9 million for the three and nine months ended September 30, 2016, respectively (2015 — $1.3million and $2.7 million, respectively). Production and DMR segment margins include marketing costs of $4.2million and $11.7 million for the three and nine months ended September 30, 2016, respectively (2015 — $3.4million and $8.3 million, respectively). Distribution segment margins include marketing expense of $0.6million and $2.1 million for the three and nine months ended September 30, 2016, respectively (2015 — cost recovery of less than $0.1million and cost recovery of $0.1 million, respectively).

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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenue
United States	$	28,139	$	27,914	$	96,276	$	95,945
Canada		2,368		3,412		9,992		8,440
Greater China		29,736		27,513		84,797		71,427
Asia (excluding Greater China)		10,665		11,007		25,034		26,732
Western Europe		6,140		7,100		26,522		24,139
Russia & the CIS		2,397		1,705		7,684		9,510
Latin America		1,408		2,459		8,562		7,849
Rest of the World		5,697		3,991		11,554		10,430
Total	$	86,550	$	85,101	$	270,421	$	254,472

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.

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Employees Pension and Postretirement Benefits

9 Months Ended

Sep. 30, 2016

Employees Pension and Postretirement Benefits [Abstract]

Employees Pension and Postretirement Benefits

14.  Employee's Pension and Postretirement Benefits

1. 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:

	September 30,		December 31,
	2016		2015
Projected benefit obligation:
Obligation, beginning of period	$	19,478	$	19,405
Interest cost		196		253
Actuarial gain		-		(180)
Obligation, end of period and unfunded status	$	19,674	$	19,478

The following table provides disclosure of pension expense for the SERP:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Interest cost	$	65	$	63	$	196	$	189
Pension expense	$	65	$	63	$	196	$	189

No contributions are expected to be made for the SERP during the remainder of 2016. The Company expects interest costs of $0.1million to be recognized as a component of net periodic benefit cost during the remainder of 2016.

The accumulated benefit obligation for the SERP was $19.7million at September 30,2016 (December 31, 2015 — $19.5million).

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:

2016 (three months remaining)	$	-
2017		19,871
2018		-
2019		-
2020		-
Thereafter		-
	$	19,871

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, 2016), although Mr. Gelfond has not informed the Company that he intends to retire at that time, and is currently in discussions regarding an extension of his employment agreement with the Company.

2. 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 and nine months ended September 30, 2016, the Company contributed and expensed an aggregate of $0.3million and $0.9 million, respectively (2015 — $0.2million and $0.8 million, respectively) to its Canadian defined contribution plan and an aggregate of $0.1million and $0.5 million, respectively (2015 — $0.2million and $0.4 million, respectively) to its defined contribution employee plan under Section401(k) of the U.S.Internal Revenue Code.

3. 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 September 30,2016 is $0.8million (December 31, 2015— $0.8million). The Company has expensed less than $0.1million and less than $0.1 million for the three and nine months ended September 30, 2016, respectively (2015— less than $0.1million and less than $0.1 million, respectively).

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

2016 (three months remaining)	$	34
2017		54
2018		60
2019		66
2020		33
Thereafter		539
Total	$	786

4. 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 September 30,2016 is $1.9million (December 31, 2015— $1.8 million). The Company has expensed less than $0.1million and less than $0.1 million for the three and nine months ended September 30, 2016, respectively (2015— less than $0.1million and $0.1 million, respectively).

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

2016 (three months remaining)	$	96
2017		100
2018		108
2019		115
2020		117
Thereafter		1,330
Total	$	1,866

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Financial Instruments

9 Months Ended

Sep. 30, 2016

Financial Instruments [Abstract]

Financial Instruments

15.  Financial Instruments

1. 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.

2. 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 September 30, 2016				As at December 31, 2015
		Carrying		Estimated		Carrying		Estimated
		Amount		Fair Value		Amount		Fair Value
Cash and cash equivalents	$	218,104	$	218,104	$	317,449	$	317,449
Net financed sales receivable	$	110,054	$	110,260	$	106,286	$	108,184
Net investment in sales-type leases	$	8,843	$	9,142	$	10,945	$	11,154
Available-for-sale investment	$	1,000	$	1,012	$	1,000	$	997
Convertible loan receivable	$	1,000	$	1,000	$	-	$	-
Foreign exchange contracts — designated forwards	$	7	$	7	$	(4,423)	$	(4,423)
Borrowings under the Playa Vista Loan	$	(28,167)	$	(28,167)	$	(29,667)	$	(29,667)

Cash and cash equivalents are comprised of cash and interest-bearing investments with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value (Level1 input in accordance with the Fair Value Measurements Topic of the FASBASC hierarchy) as at September 30,2016 and December31, 2015, respectively.

The estimated fair values of thenet financed sales receivable and net investment in sales-type leases are estimated based on discounting future cash flows at currently available interest rates with comparable terms (Level2 input in accordance with the Fair Value Measurements Topic of the FASBASC hierarchy) as at September 30,2016 and December31, 2015, respectively.

The fair value of the Company’s available-for-sale investment is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30,2016 and December31, 2015, respectively.

The fair value of the Company’s convertible loan receivableapproximates market value as at September 30,2016, as the loan was issued in the last month of the quarter(Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy).

The fair value of foreign currency derivatives is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASBASC hierarchy) as at September 30,2016 and December31, 2015, respectively. These identical instruments are traded on a closed exchange.

The carrying value of borrowings under the Playa Vista Loan approximates fair value as the interest rates offered under the Playa Vista Loan are close to September 30,2016 market rates for the Company for debt of the same remaining maturities (Level2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30,2016.

There were no significant transfers between Level 1 and Level 2 during the nine months ended September 30, 2016or 2015. 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 nine months ended September 30, 2016.

3. Financing Receivables

The Company’s net investment in leases and its net financed sale receivables are subject to the disclosure requirements of ASC310 “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 September 30, 2016						As at December 31, 2015
	Minimum		Financed				Minimum		Financed
	Lease		Sales				Lease		Sales
	Payments		Receivables		Total		Payments		Receivables		Total
In good standing	$	7,974	$	108,375	$	116,349	$	10,252	$	105,352	$	115,604
Pre-approved transactions		-		1,387		1,387		-		757		757
Transactions suspended		1,541		935		2,476		1,365		745		2,110
	$	9,515	$	110,697	$	120,212	$	11,617	$	106,854	$	118,471

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

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

	As at September 30, 2016				As at December 31, 2015
	Recorded		Related		Recorded		Related
	Investment		Allowance		Investment		Allowance
Net investment in leases	$	1,541	$	(672)	$	1,365	$	(672)
Net financed sales receivables		935		(643)		745		(568)
Total	$	2,476	$	(1,315)	$	2,110	$	(1,240)

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 September 30, 2016
									Related						Recorded
	Accrued						Billed		Unbilled		Total				Investment
	and		30-89				Financing		Recorded		Recorded		Related		Net of
	Current		Days		90+ Days		Receivables		Investment		Investment		Allowances		Allowances
Net investment in leases	$	84	$	81	$	771	$	936	$	8,579	$	9,515	$	(672)	$	8,843
Net financed sales receivables		2,038		883		2,489		5,410		105,287		110,697		(643)		110,054
Total	$	2,122	$	964	$	3,260	$	6,346	$	113,866	$	120,212	$	(1,315)	$	118,897
	As at December 31, 2015
									Related						Recorded
	Accrued						Billed		Unbilled		Total				Investment
	and		30-89				Financing		Recorded		Recorded		Related		Net of
	Current		Days		90+ Days		Receivables		Investment		Investment		Allowances		Allowances
Net investment in leases	$	840	$	177	$	446	$	1,463	$	10,154	$	11,617	$	(672)	$	10,945
Net financed sales receivables		908		1,013		1,177		3,098		103,756		106,854		(568)		106,286
Total	$	1,748	$	1,190	$	1,623	$	4,561	$	113,910	$	118,471	$	(1,240)	$	117,231

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

	As at September 30, 2016
									Related				Recorded
	Accrued						Billed		Unbilled				Investment
	and						Financing		Recorded		Related		Past Due
	Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases	$	12	$	53	$	315	$	380	$	2,424	$	-	$	2,804
Net financed sales receivables		546		522		2,463		3,531		23,103		-		26,634
Total	$	558	$	575	$	2,778	$	3,911	$	25,527	$	-	$	29,438
	As at December 31, 2015
									Related				Recorded
	Accrued						Billed		Unbilled				Investment
	and						Financing		Recorded		Related		Past Due
	Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases	$	41	$	47	$	205	$	293	$	1,076	$	-	$	1,369
Net financed sales receivables		129		224		839		1,192		10,795		-		11,987
Total	$	170	$	271	$	1,044	$	1,485	$	11,871	$	-	$	13,356

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 September 30, 2016
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	748	$	269	$	(643)	$	748	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	748	$	269	$	(643)	$	748	$	-
	For the Three Months Ended September 30, 2015
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-
	For the Nine Months Ended September 30, 2016
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	748	$	269	$	(643)	$	674	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	748	$	269	$	(643)	$	674	$	-
	For the Nine Months Ended September 30, 2015
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-

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 September 30, 2016				Nine Months Ended September 30, 2016
	Net Investment		Net Financed		Net Investment		Net Financed
	in Leases		Sales Receivables		in Leases		Sales Receivables
Allowance for credit losses:
Beginning balance	$	672	$	643	$	672	$	568
Charge-offs		-		-		-		-
Recoveries		-		-		-		-
Provision		-		-		-		75
Ending balance	$	672	$	643	$	672	$	643
Ending balance: individually evaluated for impairment	$	672	$	643	$	672	$	643
Financing receivables:
Ending balance: individually evaluated for impairment	$	9,515	$	110,697	$	9,515	$	110,697
	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Net Investment		Net Financed		Net Investment		Net Financed
	in Leases		Sales Receivables		in Leases		Sales Receivables
Allowance for credit losses:
Beginning balance	$	972	$	494	$	972	$	494
Charge-offs		-		-		-		-
Recoveries		-		-		-		-
Provision		-		-		-		-
Ending balance	$	972	$	494	$	972	$	494
Ending balance: individually evaluated for impairment	$	972	$	494	$	972	$	494
Financing receivables:
Ending balance: individually evaluated for impairment	$	12,032	$	103,418	$	12,032	$	103,418

4. 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. 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 FASBASC at inception, and continue to meet hedge effectiveness tests at September 30,2016 (the “Foreign Currency Hedges”), with settlement dates throughout 2016 and 2017. Foreign currency derivatives are recognized and measured in the balance sheet at fair value. Changes in the fair value (gains or losses) are recognized in the condensed consolidated statements of operations except for derivatives designated and qualifying as foreign currency hedging instruments. For foreign currency hedging instruments, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in other comprehensive income and reclassified to the condensed consolidated 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 and therefore no gain or loss pertaining to an ineffective portion has been recognized.

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

Notional value of foreign exchange contracts:

	September 30,		December 31,
	2016		2015
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	$	26,869	$	30,710

Fair value of derivatives in foreign exchange contracts:

		September 30,		December 31,
	Balance Sheet Location	2016		2015
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	Other assets	$	734	$	-
	Accrued and other liabilities		(727)		(4,423)
		$	7	$	(4,423)

Derivatives in Foreign Currency Hedging relationships for the nine months ended September 30:

		Three Months Ended September 30,				Nine Months Ended September 30,
			2016		2015		2016		2015
Foreign exchange contracts — Forwards	Derivative (Loss) Gain Recognized in OCI (Effective Portion)	$	(293)	$	(2,309)	$	1,865	$	(4,983)
	Location of Derivative Loss
	Reclassified from AOCI	Three Months Ended September 30,				Nine Months Ended September 30,
	into Income (Effective Portion)		2016		2015		2016		2015
Foreign exchange contracts — Forwards	Selling, general and administrative expenses	$	(572)	$	(1,045)	$	(2,565)	$	(2,196)

The Company's estimated net amount of the existing gains as at September 30,2016is $0.1 million, which is expected to be reclassified to earnings within the next twelve months

5. Investments in New Business Ventures

The Company accounts for investments in new business ventures using the guidance of the FASBASC323 or FASBASC320, as appropriate. As at September 30,2016, the equity method of accounting is being utilized for an investment with a carrying value of $nil (December 31,2015—$1.0 million). The Company’s accumulated losses in excess of its equity investment were $1.4 million as at September 30,2016, and are classified in Accrued and other liabilities. For the three months ended September 30,2016, gross revenues, cost of revenue and net loss for the Company’s investments were $nil, $1.6million and $1.5million, respectively (2015— $nil, $1.9million and $1.8million, respectively). For the nine months ended September 30, 2016, gross revenues, cost of revenue and net loss for the Company’s investments were $0.3 million, $6.0million and $5.6million, respectively (2015— $nil, $6.4million and $6.2million, respectively). The Company has determined it is not the primary beneficiary of this VIE, and therefore this entity has not been consolidated. In the third quarter of 2016, the Company issued a convertible loan of $1.0 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 meets the criteria for classification as a debt security under the FASB ASC 320 and is recorded at a fair value of $nil at September 30,2016 (December 31, 2015— $nil). This investment was classified as an available-for-sale investment. Furthermore, the Company has an investment of $1.0 million (December 31, 2015— $1.0 million) in the shares of an exchange traded fund. This investment is also classified as an available-for-sale investment. The Company has an investment of $2.5 million in the preferred shares of an enterprise which meet the criteria for classification as an equity security under FASB ASC 325. In the three and nine months ended September 30, 2016, respectively, the Company recognized an other-than-temporary impairment of$nil and $0.2 million in the condensed consolidated statements of operations (2015 — $nil and $0.4 million, respectively). The total carrying value of investments in new business ventures at September 30,2016 is $1.0million (December 31, 2015— $2.2million) and is recorded in Other assets.

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Non-Controlling Interests

9 Months Ended

Sep. 30, 2016

Temporary Equity Disclosure [Abstract]

Non-Controlling Interests [Text Block]

16.  Non-Controlling Interests

1. IMAX China Non-Controlling Interest

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

On October 8, 2015, IMAX China completed the IMAX China IPO. Following the IMAX China IPO, the Company continues to indirectly own approximately 68.5% 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 nine months ended September 30, 2016:

Balance as at December 31, 2015	$	49,959
Net income		8,015
Other comprehensive loss		(1,415)
Balance as at September 30, 2016	$	56,559

2. Other Non-Controlling Interest

In 2014, the Company announced the creation of the Film Fund to co-finance a portfolio of 10 original large-format films. The Film Fund, which is intended to be capitalized with up to $50.0 million, will finance an ongoing supply of original films that the Company believes will be more exciting and compelling than traditional documentaries. The initial investment in the Film Fund was committed to by a third party in the amount of $25.0 million, with the possibility of contributing additional funds. The Company, which will contribute $9.0 million to the Film Fund over five years starting in 2014, anticipates the Film Fund will be self-perpetuating, with a portion of box office proceeds reinvested into the Film Fund to generate a continuous, steady flow of high-quality documentary content. To date, the Film Fund invested $7.7 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 following summarizes the movement of the non-controlling interest in temporary equity, in the Company’s subsidiary for the nine months ended September 30, 2016:

Balance as at December 31, 2015	$	3,307
Net loss		(614)
Balance as at September 30, 2016	$	2,693

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2016

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 2015 Annual Report on Form10-K for the year ended December31, 2015 (“the 2015 Form10-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 December31, 2015, except as noted below.

Variable interest entities

The 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 11 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. These consolidated production companies have total assets of $8.4 million (December 31, 2015— $7.2 million) and total liabilities of $4.1 million as at September 30,2016 (December 31, 2015— $4.1 million). The majority of these consolidated assets are held by the IMAX Original Film Fund (the “Film Fund”) as described in note 16(b). For the other six film production companies which are VIEs, the Company did not consolidate these film entities since it does not have the power to direct activities and does not absorb the majority of the expected losses or expected residual returns. The Company equity accounts for these entities. As at September 30,2016, these six VIEs have total assets of $0.4 million (December 31, 2015— $0.4million) and total liabilities of $0.4 million (December 31, 2015— $0.4million). Earnings of the investees included in the Company’s condensed consolidated statements of operations amounted to $nil and $nil for the three andnine months ended September 30, 2016, respectively (2015— $nil and $nil, respectively). The carrying value of these investments in VIEs that are not consolidated is $nil at September 30,2016 (December 31, 2015— $nil). A loss in value of an investment other than a temporary decline is recognized as a charge to the condensed consolidated statements of operations. The Company’s exposure, which is determined based on the level of funding contributed by the Company and the development stage of the respective film, is $nil at September 30,2016 (December 31, 2015— $nil).

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

In January 2015, the FASB issued ASU No. 2015-01, “Income Statement – Extraordinary and Unusual Items (Subtopic 225-20): Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items” (“ASU 2015-01”). Prior to the changes under ASU 2015-01, an entity was required to separately classify, present and disclose extraordinary events and transactions under the disclosure requirements of Subtopic 225-20, “Income Statement – Extraordinary and Unusual Items” (“Subtopic 225-20”). ASU 2015-01 eliminates from U.S. GAAP the concept of extraordinary items therefore such separate disclosure is no longer required in the Income Statement of an entity. For public companies, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments can be applied prospectively or retrospectively. The Company prospectively adopted the amendments under ASU 2015-01 on January 1, 2016. The adoption of the standard did not have an impact on the disclosures presented in the condensed consolidated statement of operations for the three and six months ended June 30, 2016 and 2015, respectively.

In February 2015, the FASB issued ASU No. 2015-02, “Consolidation (Topic 810): Amendments to the Consolidation Analysis” (“ASU 2015-02”).  ASU 2015-02, changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities such as limited partnerships and similar entities, and variable interest entities that have free arrangements and related party relationships.  Furthermore, all legal entities are subject to re-evaluation under the revised consolidation model. The amendments also provide a scope exception from consolidation guidance for reporting entities with interest in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. For public companies, the amendments are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. The amendments can be applied retrospectively or using a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption. The Company adopted the amendments under ASU 2015-02 retrospectively on January 1, 2016. The adoption of the standard did not have an impact on the Company’s condensed consolidated financial statements as there was no change to the entities currently consolidated by the Company.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting” (“ASU 2016-09”). The amendment is to simplify several aspects of the accounting for share-based payment transactions including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public entities, the amendments in ASU 2016-09 are effective for interim and annual reporting periods beginning after December 15, 2016. ASU 2016-09 requires that the Company elect to account for forfeitures based on an estimate of the number of awards for which the requisite service period will not be rendered or to account for forfeitures as they occur. The Company elected to early adopt ASU 2016-09 during the second quarter of 2016 and to account for forfeitures as they occur. The impact from the adoption of the provisions related to forfeiture rates was reflected in the Company’s condensed consolidated financial statements on a modified retrospective basis resulting in a balance sheet reclass of $4.4 million decrease to Accumulated earnings, $0.9 million increase to Deferred income taxes and $5.3 million increase to Other equity. A recovery of stock-based compensation expense of $2.7 million for the nine month period ended September 30, 2016 was also recorded. Amendments related to accounting for excess tax benefits have been adopted prospectively resulting in a tax benefit of $0.1 million for the nine months ended September 30, 2016, and amendments related to the condensed consolidated statement of cash flows have been adopted retrospectively. See Notes 11 and 12 for further discussion of the impact on the Company’s condensed consolidated financial statements from the adoption of ASU 2016-09.

Debt policy

In April 2015, the FASB issued ASU No. 2015-03, “Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs” (“ASU 2015-03”), and in August 2015 issued ASU No. 2015-15, “Interest – Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements” (“ASU 2015-15”). Under ASU 2015-03, debt issuance costs reported on the balance sheet will be reflected as a direct deduction from the related debt liability rather than as an asset. While ASU 2015-03 addresses costs related to term debt, ASU 2015-15 provides clarification regarding costs to secure revolving lines of credit, which are, at the outset, not associated with an outstanding borrowing. ASU 2015-15 provides commentary that the U.S Securities and Exchange Commission (“SEC”) staff would not object to an entity deferring and presenting costs associated with line-of-credit arrangements as an asset and subsequently amortizing them ratably over the term of the revolving debt arrangement. For public companies, the amendments apply to annual periods beginning on or after December 15, 2015, and interim periods within those years and are to be applied retrospectively. The Company adopted these standards on January 1, 2016. As at December 31, 2015, $0.4 million of unamortized debt issuance costs related to the Company’s loan to finance the construction of its Playa Vista facility were reclassified in the condensed consolidated balance sheet from Other assets to Bank indebtedness.  The Company will continue to defer and present the debt issuance cost related to its senior secured revolving credit facility in Other assets and amortize it ratably over the term of the agreement.

Accounting Pronouncements Not Yet Adopted

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”). The purpose of the amendment is intended to provide users of financial statements with more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. For public entities, the amendments in ASU 2016-01 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-01 on its condensed consolidated financial statements.

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. The Company is currently assessing the impact of ASU 2016-02 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships” (“ASU 2016-05”). The amendments in ASU 2016-05 apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The amendments clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require de-designation of that hedging relationship provided that all other hedge accounting criteria (including those in paragraphs 815-20-35-14 through 35-18) continue to be met. For public entities, the amendments in ASU 2016-05 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-05 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-07, “Investments – Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting” (“ASU 2016-07”). The purpose of the amendment is to eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by step basis as if the equity method had been in effect during all previous periods that the investment had been held. For public entities, the amendments in ASU 2016-07 are effective for interim and annual reporting periods beginning after December 15, 2016. The Company is currently assessing the impact of ASU 2016-07 on its condensed consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations” (“ASU 2016-08”). The purpose of ASU 2016-08 is to clarify the implementation of guidance on principal versus agent considerations. For public entities, the amendments in ASU 2016-08 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-08 on its condensed consolidated financial statements.

In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” (“ASU 2016-10”). The purpose of ASU 2016-10 is to provide more detailed guidance in the following key areas: identifying performance obligations and licenses of intellectual property. For public entities, the amendments in ASU 2016-10 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-10 on its condensed consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-11, “Revenue Recognition (Topic 605) and Derivatives and Hedging (Topic 815): Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 pursuant to Staff announcements at the March 3, 2016 EITF Meeting” (“ASU 2016-11”). The purpose of ASU 2016-11 is to rescind from the FASB Accounting Standards Codification certain SEC paragraphs as a result of two SEC Staff Announcements at the March 3, 2016 meeting. For public entities, the amendments in ASU 2016-11 related to Topic 605 are effective for interim and annual reporting periods beginning after December 15, 2017 and amendments related to Topic 815 are effective for interim and annual reporting periods beginning after December 15, 2015. The Company is currently assessing the impact of ASU 2016-11 related to topic 605 on its condensed consolidated financial statements.

In May 2016, the FASB issued ASU No. 2016-12, “Revenue from Contracts with Customers (Topic 660): Narrow-Scope Improvements and Practical Expedients” (“ASU 2016-12”). The purpose of ASU 2016-12 is to clarify certain narrow aspects of Topic 660 such as assessing the collectibility criterion, presentation of sales taxes and other similar taxes collected from customers, noncash consideration, contract modifications at transition, completed contracts at transition, and technical correction. For public entities, the amendments in ASU 2016-12 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-12 on its condensed consolidated financial statements.

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 August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The purpose of ASU 2016-15 is to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. For public entities, the amendments in ASU 2016-15 are effective for interim and annual reporting periods beginning after December 15, 2017. The Company is currently assessing the impact of ASU 2016-15 on its condensed consolidated financial statements.

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.

Legal Costs Policy

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

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.

Film Costs Policy

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 net box-office receipts of the film, which in recent years has ranged from 10-15%. The Company does not typically hold distribution rights or the copyright to these films.

Revenue Recognition Leases

The accounting policy for the Company’s joint revenue sharing arrangements is disclosed in note2(m) of the Company’s 2015 Form10-K.

Films Revenue Recognition Policy

The accounting policy for the Company’s IMAX DMR arrangements is disclosed in note 2(m) of the Company’s 2015 Form 10-K. The accounting policies relating to co-produced film arrangements are disclosed in notes2(a) and 2(m) of the Company’s 2015 Form10-K.

Segment Reporting Policy

The accounting policies of the segments are the same as those described in note 2 to the audited consolidated financial statements included in the Company’s 2015 Form 10-K.

Fair Value of Financial Instruments Policy

Cash and cash equivalents are comprised of cash and interest-bearing investments with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value (Level1 input in accordance with the Fair Value Measurements Topic of the FASBASC hierarchy) as at September 30,2016 and December31, 2015, respectively.

The estimated fair values of thenet financed sales receivable and net investment in sales-type leases are estimated based on discounting future cash flows at currently available interest rates with comparable terms (Level2 input in accordance with the Fair Value Measurements Topic of the FASBASC hierarchy) as at September 30,2016 and December31, 2015, respectively.

The fair value of the Company’s available-for-sale investment is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30,2016 and December31, 2015, respectively.

The fair value of the Company’s convertible loan receivableapproximates market value as at September 30,2016, as the loan was issued in the last month of the quarter(Level 2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy).

The fair value of foreign currency derivatives is determined using quoted prices in active markets (Level 2 input in accordance with the Fair Value Measurements Topic of the FASBASC hierarchy) as at September 30,2016 and December31, 2015, respectively. These identical instruments are traded on a closed exchange.

The carrying value of borrowings under the Playa Vista Loan approximates fair value as the interest rates offered under the Playa Vista Loan are close to September 30,2016 market rates for the Company for debt of the same remaining maturities (Level2 input in accordance with the Fair Value Measurements Topic of the FASB ASC hierarchy) as at September 30,2016.

Fair Value Transfer Policy

There were no significant transfers between Level 1 and Level 2 during the nine months ended September 30, 2016or 2015. 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. 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 FASBASC at inception, and continue to meet hedge effectiveness tests at September 30,2016 (the “Foreign Currency Hedges”), with settlement dates throughout 2016 and 2017. Foreign currency derivatives are recognized and measured in the balance sheet at fair value. Changes in the fair value (gains or losses) are recognized in the condensed consolidated statements of operations except for derivatives designated and qualifying as foreign currency hedging instruments. For foreign currency hedging instruments, the effective portion of the gain or loss in a hedge of a forecasted transaction is reported in other comprehensive income and reclassified to the condensed consolidated 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 and therefore no gain or loss pertaining to an ineffective portion has been recognized.

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.

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Financing Receivables (Tables)

9 Months Ended

Sep. 30, 2016

Financing Receivables [Abstract]

Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales

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

	September 30,		December 31,
	2016		2015
Gross minimum lease payments receivable	$	11,341	$	13,998
Unearned finance income		(1,826)		(2,381)
Minimum lease payments receivable		9,515		11,617
Accumulated allowance for uncollectible amounts		(672)		(672)
Net investment in leases		8,843		10,945
Gross financed sales receivables		148,358		146,232
Unearned finance income		(37,661)		(39,378)
Financed sales receivables		110,697		106,854
Accumulated allowance for uncollectible amounts		(643)		(568)
Net financed sales receivables		110,054		106,286
Total financing receivables	$	118,897	$	117,231
Net financed sales receivables due within one year	$	21,260	$	19,068
Net financed sales receivables due after one year	$	88,794	$	87,218

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Inventories (Tables)

9 Months Ended

Sep. 30, 2016

Inventories [Abstract]

Inventories

	September 30,		December 31,
	2016		2015
Raw materials	$	32,662	$	25,750
Work-in-process		4,215		2,628
Finished goods		14,138		10,375
	$	51,015	$	38,753

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Property Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2016

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

	As at September 30, 2016
			Accumulated		Net Book
	Cost		Depreciation		Value
Equipment leased or held for use
Theater system components	$	216,670	$	86,219	$	130,451
Camera equipment		5,902		3,750		2,152
		222,572		89,969		132,603
Assets under construction		14,890		-		14,890
Other property, plant and equipment
Land		8,203		-		8,203
Buildings		68,974		14,306		54,668
Office and production equipment		40,587		21,237		19,350
Leasehold improvements		7,159		2,889		4,270
		124,923		38,432		86,491
	$	362,385	$	128,401	$	233,984
	As at December 31, 2015
			Accumulated		Net Book
	Cost		Depreciation		Value
Equipment leased or held for use
Theater system components	$	199,974	$	74,568	$	125,406
Camera equipment		5,393		3,368		2,025
		205,367		77,936		127,431
Assets under construction		9,616		-		9,616
Other property, plant and equipment
Land		8,203		-		8,203
Buildings		67,150		12,679		54,471
Office and production equipment		34,396		17,035		17,361
Leasehold improvements		3,512		2,327		1,185
		113,261		32,041		81,220
	$	328,244	$	109,977	$	218,267

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Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2016

Other Intangible Assets [Abstract]

Other Intangible Assets

	As at September 30, 2016
			Accumulated		Net Book
	Cost		Amortization		Value
Patents and trademarks	$	11,181	$	6,928	$	4,253
Licenses and intellectual property		22,490		7,295		15,195
Other		14,023		3,866		10,157
	$	47,694	$	18,089	$	29,605
	As at December 31, 2015
			Accumulated		Net Book
	Cost		Amortization		Value
Patents and trademarks	$	10,399	$	6,502	$	3,897
Licenses and intellectual property		22,390		6,464		15,926
Other		11,878		2,751		9,127
	$	44,667	$	15,717	$	28,950

Other Intangible Assets - Future Amortization

As at September 30,2016, estimated amortization expense for each of the years ended December31, are as follows:

2016 (three months remaining)	$	858
2017		3,270
2018		3,270
2019		3,270
2020		3,270

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Credit Facility and Playa Vista Loan (Tables)

9 Months Ended

Sep. 30, 2016

Credit Facility and Playa Vista Construction Loan [Abstract]

Bank indebtedness

Bank indebtedness includes the following:

	September 30,		December 31,
	2016		2015
Playa Vista Loan	$	28,167	$	29,667
Deferred charges on debt financing		(361)		(391)
	$	27,806	$	29,276

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:

2016 (three months remaining)	$	500
2017		2,000
2018		2,000
2019		2,000
2020		2,000
Thereafter		19,667
	$	28,167

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Contingencies and Guarantees (Tables)

9 Months Ended

Sep. 30, 2016

Commitments, Contingencies and Guarantees [Abstract]

Accrual for product warranties

	September 30,		December 31,
	2016		2015
Balance at the beginning of period	$	-	$	6
Warranty redemptions		-		(6)
Warranties issued		15		-
Revisions		-		-
Balance at the end of period	$	15	$	-

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Condensed Consolidated Statements of Cash Flows Supplemental Information (Tables)

9 Months Ended

Sep. 30, 2016

Condensed Consolidated Statements of Cash Flows Supplemental Information [Abstract]

Changes in other non-cash operating assets and liabilities

	Nine Months Ended
	September 30,
		2016		2015
Decrease (increase) in:
Accounts receivable	$	6,571	$	(12,048)
Financing receivables		(1,145)		(9,932)
Inventories		(12,508)		(18,904)
Prepaid expenses		(5,105)		(2,159)
Commissions and other deferred selling expenses		285		(206)
Insurance recoveries		132		28
Other assets		(1,299)		(2,388)
Increase (decrease) in:
Accounts payable		(6,616)		4,212
Accrued and other liabilities		(1,991)		(17,528)
Deferred revenue		(7,828)		17,892
	$	(29,504)	$	(41,033)

Cash payments

	Nine Months Ended
	September 30,
		2016		2015
Income taxes	$	20,822	$	21,542
Interest	$	541	$	302

Summary of depreciation and amortization

	Nine Months Ended
	September 30,
		2016		2015
Film assets	$	11,842	$	11,917
Property, plant and equipment
Joint revenue sharing arrangements		11,581		10,043
Other property, plant and equipment		7,355		5,635
Other intangible assets		2,368		2,354
Other assets		631		579
Deferred financing costs		402		663
	$	34,179	$	31,191

Write downs, net of recoveries

	Nine Months Ended
	September 30,
		2016		2015
Accounts receivable	$	556	$	709
Financing receivables		75		-
Inventories		246		405
Film assets		1,000		-
Property, plant and equipment		792		1,464
Impairment of investments		194		350
Other intangible assets		40		-
	$	2,903	$	2,928

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2016

Income Taxes [Abstract]

Income tax effect related to other comprehensive loss

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Unrealized change in cash flow hedging instruments	$	76	$	606	$	(485)	$	1,309
Realized change in cash flow hedging instruments upon settlement		(149)		(274)		(667)		(577)
Amortization of actuarial loss on postretirement benefit plan		(4)		-		(14)		-
Foreign currency translation adjustments		-		226		-		264
	$	(77)	$	558	$	(1,166)	$	996

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Capital Stock (Tables)

9 Months Ended

Sep. 30, 2016

Capital Stock [Abstract]

Weighted average fair value of common share granted to employees and directors

The following assumptions were used to estimate the average fair value of the stock options:

	Three Months		Nine Months
	Ended September 30,		Ended September 30,
	2016	2015	2016	2015
Average risk-free interest rate	1.44%	n/a	1.67%	1.97%
Expected option life (in years)	4.44 - 4.88	n/a	4.44 - 5.24	3.55 - 5.76
Expected volatility	30%	n/a	30%	30%
Dividend yield	0%	n/a	0%	0%

Option activity under the Stock Option Plan and the IMAX LTIP

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

				Weighted Average Exercise
	Number of Shares			Price Per Share
	2016	2015	2016		2015
Options outstanding, beginning of period	4,805,244	5,925,660	$	27.03	$	24.24
Granted	984,452	871,431		31.49		31.56
Exercised	(268,516)	(1,231,964)		20.54		19.35
Forfeited	(45,024)	(45,474)		28.03		28.26
Cancelled	(2,483)	-		33.80		-
Options outstanding, end of period	5,473,673	5,519,653		28.14		26.45
Options exercisable, end of period	3,924,432	3,195,836		27.34		25.14

Restricted Stock Units activity under the IMAX LTIP

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

	Number of Awards		Weighted Average Grant Date Fair Value Per Share
	2016	2015		2016		2015
RSUs outstanding, beginning of period	973,637	595,834	$	32.27	$	27.13
Granted	465,968	337,557		31.70		34.39
Vested and settled	(271,032)	(192,077)		29.30		28.93
Forfeited	(28,435)	(19,499)		30.78		29.37
RSUs outstanding, end of period	1,140,138	721,815		32.78		29.99

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				Nine Months
	Ended September 30,				Ended September 30,
	2016		2015		2016		2015
Net income attributable to common shareholders	$	2,525	$	8,610	$	19,843	$	33,351
Less: Accretion charges associated with redeemable common stock		-		(263)		-		(747)
Net income applicable to common shareholders	$	2,525	$	8,347	$	19,843	$	32,604
Weighted average number of common shares (000's):
Issued and outstanding, beginning of period		67,067		70,152		69,673		68,988
Weighted average number of shares issued (repurchased) during the period		23		(453)		(1,620)		594
Weighted average number of shares used in computing basic income per share		67,090		69,699		68,053		69,582
Assumed exercise of stock options and RSUs, net of shares assumed repurchased		656		1,161		668		1,520
Weighted average number of shares used in computing diluted income per share		67,746		70,860		68,721		71,102

Movement of Shareholders' Equity

The following summarizes the movement of Shareholders’ Equity attributable to common shareholders for the nine months ended September 30, 2016:

Balance as at December 31, 2015	$	624,791
Net income attributable to common shareholders		19,843
Adjustments to capital stock:
Cash received from the issuance of common shares		5,514
Issuance of common shares for vested RSUs		1,121
Fair value of stock options exercised at the grant date		2,104
Average carrying value of repurchased and retired common shares		(21,220)
Share held in treasury		(6)
Adjustments to other equity:
Employee stock options granted		10,092
Non-employee stock options granted and vested		30
Fair value of stock options exercised at the grant date		(2,104)
RSUs granted		12,242
RSUs vested		(8,793)
Stock exercised from treasury shares		(1,216)
Cash received from the issuance of common shares in excess of par value		1,682
Adjustments to accumulated deficit:
Common shares repurchased and retired		(79,158)
Adjustments to accumulated other comprehensive loss:
Unrealized net gain from cash flow hedging instruments		1,865
Realization of cash flow hedging net loss upon settlement		2,565
Foreign currency translation adjustments		(434)
Amortization of actuarial loss on postretirement benefit plan		51
Tax effect of movement in other comprehensive income		(1,166)
Balance as at September 30, 2016	$	567,803

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Segmented Information (Tables)

9 Months Ended

Sep. 30, 2016

Segmented Information [Abstract]

Inter-segment revenue

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2016		2015		2016		2015
Revenue(1)
IMAX theater systems
IMAX systems	$	25,687	$	30,153	$	70,508	$	64,632
Theater system maintenance		10,293		9,337		30,031		27,345
Joint revenue sharing arrangements		19,698		19,797		66,940		67,259
		55,678		59,287		167,479		159,236
Films
Production and IMAX DMR		21,549		20,865		78,767		75,144
Distribution		2,092		967		3,345		3,513
Post-production		2,327		761		6,436		5,259
		25,968		22,593		88,548		83,916
Other		4,904		3,221		14,394		11,320
Total	$	86,550	$	85,101	$	270,421	$	254,472
Gross margin
IMAX theater systems
IMAX systems(2)	$	16,743	$	13,109	$	38,252	$	34,831
Theater system maintenance		3,398		3,521		10,207		9,891
Joint revenue sharing arrangements(2)		10,980		12,130		44,716		46,816
		31,121		28,760		93,175		91,538
Films
Production and IMAX DMR(2)		12,448		13,929		52,398		55,642
Distribution(2)		258		15		(998)		(201)
Post-production		1,003		(48)		3,028		847
		13,709		13,896		54,428		56,288
Other		69		(267)		(251)		(421)
Total	$	44,899	$	42,389	$	147,352	$	147,405

Geographic Information

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenue
United States	$	28,139	$	27,914	$	96,276	$	95,945
Canada		2,368		3,412		9,992		8,440
Greater China		29,736		27,513		84,797		71,427
Asia (excluding Greater China)		10,665		11,007		25,034		26,732
Western Europe		6,140		7,100		26,522		24,139
Russia & the CIS		2,397		1,705		7,684		9,510
Latin America		1,408		2,459		8,562		7,849
Rest of the World		5,697		3,991		11,554		10,430
Total	$	86,550	$	85,101	$	270,421	$	254,472

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Employees Pension and Postretirement Benefits (Tables)

9 Months Ended

Sep. 30, 2016

Defined Benefit Plan Disclosure [Line Items]

Amounts accrued

The following table provides disclosure of the pension obligation for the SERP:

	September 30,		December 31,
	2016		2015
Projected benefit obligation:
Obligation, beginning of period	$	19,478	$	19,405
Interest cost		196		253
Actuarial gain		-		(180)
Obligation, end of period and unfunded status	$	19,674	$	19,478

SERP Benefits [Member]

Defined Benefit Plan Disclosure [Line Items]

Pension Expense

The following table provides disclosure of pension expense for the SERP:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Interest cost	$	65	$	63	$	196	$	189
Pension expense	$	65	$	63	$	196	$	189

Schedule of expected benefit payments

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:

2016 (three months remaining)	$	-
2017		19,871
2018		-
2019		-
2020		-
Thereafter		-
	$	19,871

Postretirement Benefits Executives [Member]

Defined Benefit Plan Disclosure [Line Items]

Schedule of expected benefit payments

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

2016 (three months remaining)	$	34
2017		54
2018		60
2019		66
2020		33
Thereafter		539
Total	$	786

Postretirement Benefits Canadian Employees [Member]

Defined Benefit Plan Disclosure [Line Items]

Schedule of expected benefit payments

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

2016 (three months remaining)	$	96
2017		100
2018		108
2019		115
2020		117
Thereafter		1,330
Total	$	1,866

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Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

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 September 30, 2016				As at December 31, 2015
		Carrying		Estimated		Carrying		Estimated
		Amount		Fair Value		Amount		Fair Value
Cash and cash equivalents	$	218,104	$	218,104	$	317,449	$	317,449
Net financed sales receivable	$	110,054	$	110,260	$	106,286	$	108,184
Net investment in sales-type leases	$	8,843	$	9,142	$	10,945	$	11,154
Available-for-sale investment	$	1,000	$	1,012	$	1,000	$	997
Convertible loan receivable	$	1,000	$	1,000	$	-	$	-
Foreign exchange contracts — designated forwards	$	7	$	7	$	(4,423)	$	(4,423)
Borrowings under the Playa Vista Loan	$	(28,167)	$	(28,167)	$	(29,667)	$	(29,667)

Recorded Investment in Financing Receivables

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

	As at September 30, 2016						As at December 31, 2015
	Minimum		Financed				Minimum		Financed
	Lease		Sales				Lease		Sales
	Payments		Receivables		Total		Payments		Receivables		Total
In good standing	$	7,974	$	108,375	$	116,349	$	10,252	$	105,352	$	115,604
Pre-approved transactions		-		1,387		1,387		-		757		757
Transactions suspended		1,541		935		2,476		1,365		745		2,110
	$	9,515	$	110,697	$	120,212	$	11,617	$	106,854	$	118,471

Investment In Financing Receivables On Nonaccrual Status

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

	As at September 30, 2016				As at December 31, 2015
	Recorded		Related		Recorded		Related
	Investment		Allowance		Investment		Allowance
Net investment in leases	$	1,541	$	(672)	$	1,365	$	(672)
Net financed sales receivables		935		(643)		745		(568)
Total	$	2,476	$	(1,315)	$	2,110	$	(1,240)

Aging of Financing Receivables

The Company’s aged financing receivables are as follows:

	As at September 30, 2016
									Related						Recorded
	Accrued						Billed		Unbilled		Total				Investment
	and		30-89				Financing		Recorded		Recorded		Related		Net of
	Current		Days		90+ Days		Receivables		Investment		Investment		Allowances		Allowances
Net investment in leases	$	84	$	81	$	771	$	936	$	8,579	$	9,515	$	(672)	$	8,843
Net financed sales receivables		2,038		883		2,489		5,410		105,287		110,697		(643)		110,054
Total	$	2,122	$	964	$	3,260	$	6,346	$	113,866	$	120,212	$	(1,315)	$	118,897
	As at December 31, 2015
									Related						Recorded
	Accrued						Billed		Unbilled		Total				Investment
	and		30-89				Financing		Recorded		Recorded		Related		Net of
	Current		Days		90+ Days		Receivables		Investment		Investment		Allowances		Allowances
Net investment in leases	$	840	$	177	$	446	$	1,463	$	10,154	$	11,617	$	(672)	$	10,945
Net financed sales receivables		908		1,013		1,177		3,098		103,756		106,854		(568)		106,286
Total	$	1,748	$	1,190	$	1,623	$	4,561	$	113,910	$	118,471	$	(1,240)	$	117,231

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 September 30, 2016
									Related				Recorded
	Accrued						Billed		Unbilled				Investment
	and						Financing		Recorded		Related		Past Due
	Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases	$	12	$	53	$	315	$	380	$	2,424	$	-	$	2,804
Net financed sales receivables		546		522		2,463		3,531		23,103		-		26,634
Total	$	558	$	575	$	2,778	$	3,911	$	25,527	$	-	$	29,438
	As at December 31, 2015
									Related				Recorded
	Accrued						Billed		Unbilled				Investment
	and						Financing		Recorded		Related		Past Due
	Current		30-89 Days		90+ Days		Receivables		Investment		Allowance		and Accruing
Net investment in leases	$	41	$	47	$	205	$	293	$	1,076	$	-	$	1,369
Net financed sales receivables		129		224		839		1,192		10,795		-		11,987
Total	$	170	$	271	$	1,044	$	1,485	$	11,871	$	-	$	13,356

Impaired financing receivables

The following table discloses information regarding the Company’s impaired financing receivables:

	For the Three Months Ended September 30, 2016
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	748	$	269	$	(643)	$	748	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	748	$	269	$	(643)	$	748	$	-
	For the Three Months Ended September 30, 2015
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-
	For the Nine Months Ended September 30, 2016
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	748	$	269	$	(643)	$	674	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	748	$	269	$	(643)	$	674	$	-
	For the Nine Months Ended September 30, 2015
							Average		Interest
	Recorded		Unpaid		Related		Recorded		Income
	Investment		Principal		Allowance		Investment		Recognized
Recorded investment for which there is a related allowance:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-
Recorded investment for which there is no related allowance:
Net financed sales receivables		-		-		-		-		-
Total recorded investment in impaired loans:
Net financed sales receivables	$	525	$	53	$	(494)	$	525	$	-

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 September 30, 2016				Nine Months Ended September 30, 2016
	Net Investment		Net Financed		Net Investment		Net Financed
	in Leases		Sales Receivables		in Leases		Sales Receivables
Allowance for credit losses:
Beginning balance	$	672	$	643	$	672	$	568
Charge-offs		-		-		-		-
Recoveries		-		-		-		-
Provision		-		-		-		75
Ending balance	$	672	$	643	$	672	$	643
Ending balance: individually evaluated for impairment	$	672	$	643	$	672	$	643
Financing receivables:
Ending balance: individually evaluated for impairment	$	9,515	$	110,697	$	9,515	$	110,697
	Three Months Ended September 30, 2015				Nine Months Ended September 30, 2015
	Net Investment		Net Financed		Net Investment		Net Financed
	in Leases		Sales Receivables		in Leases		Sales Receivables
Allowance for credit losses:
Beginning balance	$	972	$	494	$	972	$	494
Charge-offs		-		-		-		-
Recoveries		-		-		-		-
Provision		-		-		-		-
Ending balance	$	972	$	494	$	972	$	494
Ending balance: individually evaluated for impairment	$	972	$	494	$	972	$	494
Financing receivables:
Ending balance: individually evaluated for impairment	$	12,032	$	103,418	$	12,032	$	103,418

Notional amount of derivative

Notional value of foreign exchange contracts:

	September 30,		December 31,
	2016		2015
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	$	26,869	$	30,710

Fair value of foreign exchange contracts

Fair value of derivatives in foreign exchange contracts:

		September 30,		December 31,
	Balance Sheet Location	2016		2015
Derivatives designated as hedging instruments:
Foreign exchange contracts — Forwards	Other assets	$	734	$	-
	Accrued and other liabilities		(727)		(4,423)
		$	7	$	(4,423)

Derivatives in Foreign Currency Hedging relationships

Derivatives in Foreign Currency Hedging relationships for the nine months ended September 30:

		Three Months Ended September 30,				Nine Months Ended September 30,
			2016		2015		2016		2015
Foreign exchange contracts — Forwards	Derivative (Loss) Gain Recognized in OCI (Effective Portion)	$	(293)	$	(2,309)	$	1,865	$	(4,983)
	Location of Derivative Loss
	Reclassified from AOCI	Three Months Ended September 30,				Nine Months Ended September 30,
	into Income (Effective Portion)		2016		2015		2016		2015
Foreign exchange contracts — Forwards	Selling, general and administrative expenses	$	(572)	$	(1,045)	$	(2,565)	$	(2,196)

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Non-Controlling Interests (Tables)

9 Months Ended

Sep. 30, 2016

IMAX China Noncontrolling Interest

Non-controlling Interests

Non-controlling Interests

Balance as at December 31, 2015	$	49,959
Net income		8,015
Other comprehensive loss		(1,415)
Balance as at September 30, 2016	$	56,559

Other Noncontrolling Interest [Member]

Non-controlling Interests

Non-controlling Interests

Balance as at December 31, 2015	$	3,307
Net loss		(614)
Balance as at September 30, 2016	$	2,693

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Basis of Presentation (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Basis of Presentation (Textuals) [Abstract]
Number Of Variable Interest Entities			11
Number Of Variable Interest Entities Primary Beneficiary			5
Number Of Variable Interest Entities Not A Primary Beneficiary			6
Variable interest entity, non-consolidated, Assets	$ 0.4		$ 0.4
Variable interest entity, non-consolidated, Liabilities	0.4		0.4
Variable Interest Entity, Primary Beneficiary [Member]
Basis of Presentation (Textuals) [Abstract]
Variable interest entity, consolidated, Assets	8.4		8.4		$ 7.2
Variable interest entity, consolidated, Liabilities	4.1		4.1		4.1
Variable Interest Entity, Not Primary Beneficiary [Member]
Basis of Presentation (Textuals) [Abstract]
Variable interest entity, non-consolidated, Assets	0.4		0.4		0.4
Variable interest entity, non-consolidated, Liabilities	0.4		0.4		0.4
Earnings of the investees	0.0	$ 0.0	0.0	$ 0.0
Carrying value of film production company VIEs	0.0		0.0		0.0
Loss exposure	$ 0.0		$ 0.0		$ 0.0

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New Accounting Standards And Accounting Changes (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
New Accounting Pronouncements and Changes in Accounting Principles
Deferred charges on debt financing			$ 391
Accumulated earnings relcass due to adoption of ASU 2016-09		$ 4,400
Deferred tax asset reclass due to adoption of ASU 2016-09		900
Other equity reclass due to adoption of ASU 2016-09		5,300
Stock-based compensation expense recovery due to adoption of ASU 2016-09		2,700
Excess tax benefit due to adoption of ASU 2016-09	$ 0	$ 100

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Financing Receivables (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Financing receivables, consisting of net investment in sales-type leases and receivables from financed sales
Gross minimum lease payments receivable	$ 11,341	$ 13,998
Unearned finance income	(1,826)	(2,381)
Minimum lease payments receivable	9,515	11,617
Accumulated allowance for uncollectible amounts	(672)	(672)
Net investment in leases	8,843	10,945
Gross financed sales receivables	148,358	146,232
Unearned finance income	(37,661)	(39,378)
Financed sales receivables	110,697	106,854
Accumulated allowance for uncollectible amounts	(643)	(568)
Net financed sales receivables	110,054	106,286
Total financing receivables	118,897	117,231
Net financed sales receivables due within one year	21,260	19,068
Net financed sales receivables due after one year	$ 88,794	$ 87,218

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Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Inventories
Raw materials	$ 32,662	$ 25,750
Work-in-process	4,215	2,628
Finished goods	14,138	10,375
Total	$ 51,015	$ 38,753

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Property Plant and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Property, plant and equipment
Cost	$ 362,385	$ 328,244
Accumulated Depreciation	128,401	109,977
Net Book Value	233,984	218,267
Equipment leased or held for use [Member]
Property, plant and equipment
Cost	222,572	205,367
Accumulated Depreciation	89,969	77,936
Net Book Value	132,603	127,431
Theater System Components [Member]
Property, plant and equipment
Cost	216,670	199,974
Accumulated Depreciation	86,219	74,568
Net Book Value	130,451	125,406
Camera Equipment [Member]
Property, plant and equipment
Cost	5,902	5,393
Accumulated Depreciation	3,750	3,368
Net Book Value	2,152	2,025
Assets Under Construction [Member]
Property, plant and equipment
Cost	14,890	9,616
Accumulated Depreciation	0	0
Net Book Value	14,890	9,616
Other property, plant and equipment [Member]
Property, plant and equipment
Cost	124,923	113,261
Accumulated Depreciation	38,432	32,041
Net Book Value	86,491	81,220
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	68,974	67,150
Accumulated Depreciation	14,306	12,679
Net Book Value	54,668	54,471
Office and Production Equipment [Member]
Property, plant and equipment
Cost	40,587	34,396
Accumulated Depreciation	21,237	17,035
Net Book Value	19,350	17,361
Leasehold Improvements [Member]
Property, plant and equipment
Cost	7,159	3,512
Accumulated Depreciation	2,889	2,327
Net Book Value	$ 4,270	$ 1,185

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Other Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Other Intangible Assets
Other Intangible Assets, Cost	$ 47,694	$ 44,667
Other Intangible Assets, Accumulated Amortization	18,089	15,717
Other Intangible Assets, Net Book Value	29,605	28,950
Patents and Trademarks [Member]
Other Intangible Assets
Other Intangible Assets, Cost	11,181	10,399
Other Intangible Assets, Accumulated Amortization	6,928	6,502
Other Intangible Assets, Net Book Value	4,253	3,897
Licenses and Intellectual Property [Member]
Other Intangible Assets
Other Intangible Assets, Cost	22,490	22,390
Other Intangible Assets, Accumulated Amortization	7,295	6,464
Other Intangible Assets, Net Book Value	15,195	15,926
Other [Member]
Other Intangible Assets
Other Intangible Assets, Cost	14,023	11,878
Other Intangible Assets, Accumulated Amortization	3,866	2,751
Other Intangible Assets, Net Book Value	$ 10,157	$ 9,127

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Credit Facility and Playa Vista Loan (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Bank indebtedness [Line Items]
Deferred charges on debt financing		$ (391)
Total bank indebtedness	$ 27,806	29,276
Playa Vista Loan [Member]
Bank indebtedness [Line Items]
Playa Vista Loan	28,167	29,667
Deferred charges on debt financing	(361)	(391)
Total bank indebtedness	27,806	29,276
Playa Vista loan principal payments
2016 (three months remaining)	500
2017	2,000
2018	2,000
2019	2,000
2020	2,000
Thereafter	19,667
Playa Vista Loan	$ 28,167	$ 29,667

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Contingencies and Guarantees (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Accrual for product warranties
Balance at the beginning of period	$ 0	$ 6
Warranty redemptions	0	(6)
Warranties issued	15	0
Revisions	0	0
Balance at the end of period	$ 15	$ 0

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Condensed Consolidated Statement of Operations Supplemental Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($) yr Film exhibitor Theaters	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) yr Film exhibitor Theaters	Sep. 30, 2015 USD ($) Film
Selling Expenses
Deferred direct selling costs and direct advertising and marketing included in costs and expenses applicable to revenues-equipment and product sales	$ 1,300	$ 1,300	$ 3,000	$ 2,800
Film exploitation costs, including advertising and marketing included in costs and expenses applicable to revenues-services	4,800	3,400	13,800	8,200
Commissions recognized as cost and expenses included in costs and expenses applicable to revenues-rentals	600	300	900	500
Direct advertising and marketing costs included in costs and expenses applicable to revenues-rentals	400	600	1,000	1,200
Foreign Exchange
Foreign exchange translation (loss) gain related to monetary assets and liabilities	$ (200)	(500)	$ (100)	(1,500)
Collaborative Arrangements
Total number of exhibitors under joint revenue sharing agreements | exhibitor	49		49
Total number of theater systems under joint revenue sharing agreements | Theaters	981		981
Total number of operating theaters under joint revenue sharing agreement | Theaters	592		592
Amounts attributable to transactions arising between the company and its customers under joint revenue sharing arrangements	$ 19,700	19,800	$ 66,900	$ 67,300
IMAX DMR films exhibited in the period | Film			48	48
Amounts attributable to transactions arising between the company and its customers under IMAX DMR arrangements	$ 21,549	20,865	$ 78,767	$ 75,144
Number of significant co-produced film arrangement | Film	1		1
Number of other co-produced film arrangements | Film	5		5
Variable interest entity, non-consolidated, Assets	$ 400		$ 400
Variable interest entity, non-consolidated, Liabilities	400		400
Amounts attributable to transactions between the company and other parties involved in the production of films included in cost and expense	$ 500	$ 300	$ 1,000	$ 1,400
Minimum [Member]
Collaborative Arrangements
Non-cancellable term of joint revenue sharing arrangements | yr	10		10
Percentage of the gross box-office receipts of the film, minimum for recovering digital re-mastering cost	10.00%		10.00%
Maximum [Member]
Collaborative Arrangements
Non-cancellable term of joint revenue sharing arrangements			longer
Percentage of the gross box-office receipts of the film, maximum for recovering digital re-mastering cost	15.00%		15.00%

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Condensed Consolidated Statements of Cash Flows Supplemental Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Decrease (increase) in:
Accounts receivable	$ 6,571	$ (12,048)
Financing receivables	(1,145)	(9,932)
Inventories	(12,508)	(18,904)
Prepaid expenses	(5,105)	(2,159)
Commissions and other deferred selling expenses	285	(206)
Insurance recoveries	132	28
Other assets	(1,299)	(2,388)
Increase (decrease) in:
Accounts payable	(6,616)	4,212
Accrued and other Liabilities	(1,991)	(17,528)
Deferred revenue	(7,828)	17,892
Changes in other non-cash operating assets and liabilities	(29,504)	(41,033)
Cash payments
Income taxes	20,822	21,542
Interest	$ 541	$ 302

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Receivable Provisions Net of Recoveries (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Receivable Provisions, Net of Recoveries [Abstract]
Receivable provisions, net of recoveries	$ 275	$ 361	$ 631	$ 709

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Unrealized change in cash flow hedging instruments	$ 76	$ 606	$ (485)	$ 1,309
Realized change in cash flow hedging instruments upon settlement	(149)	(274)	(667)	(577)
Amortization of actuarial loss on postretirement benefit plan	(4)	0	(14)	0
Foreign currency translation adjustments	0	226	0	264
Income tax effect on other comprehensive (loss) income	$ (77)	$ 558	$ (1,166)	$ 996

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Capital Stock (Details) - Employee Stock Option [Member]	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Weighted average fair value of common share granted to employees and directors
Average risk-free interest rate	1.44%		1.67%	1.97%
Average risk-free interest rate		n/a
Expected option life (in years)		n/a
Expected volatility	30.00%		30.00%	30.00%
Expected volatility		n/a
Dividend yield	0.00%		0.00%	0.00%
Dividend yield		n/a
Minimum [Member]
Weighted average fair value of common share granted to employees and directors
Expected option life (in years)	4 years 5 months 8 days		4 years 5 months 8 days	3 years 6 months 18 days
Maximum [Member]
Weighted average fair value of common share granted to employees and directors
Expected option life (in years)	4 years 10 months 17 days		5 years 2 months 26 days	5 years 9 months 4 days

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Segmented Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues
Revenues		$ 86,550	$ 85,101	$ 270,421	$ 254,472
Gross margins
Gross margins		44,899	42,389	147,352	147,405
IMAX theater systems total [Member]
Revenues
Revenues	[1]	55,678	59,287	167,479	159,236
Gross margins
Gross margins		31,121	28,760	93,175	91,538
IMAX systems [Member]
Revenues
Revenues	[1]	25,687	30,153	70,508	64,632
Gross margins
Gross margins	[2]	16,743	13,109	38,252	34,831
Theater system maintenance [Member]
Revenues
Revenues	[1]	10,293	9,337	30,031	27,345
Gross margins
Gross margins		3,398	3,521	10,207	9,891
Joint revenue sharing arrangements [Member]
Revenues
Revenues	[1]	19,698	19,797	66,940	67,259
Gross margins
Gross margins	[2]	10,980	12,130	44,716	46,816
Films Total [Member]
Revenues
Revenues	[1]	25,968	22,593	88,548	83,916
Gross margins
Gross margins		13,709	13,896	54,428	56,288
Production and IMAX DMR [Member]
Revenues
Revenues	[1]	21,549	20,865	78,767	75,144
Gross margins
Gross margins	[2]	12,448	13,929	52,398	55,642
Distribution [Member]
Revenues
Revenues	[1]	2,092	967	3,345	3,513
Gross margins
Gross margins	[2]	258	15	(998)	(201)
Post-production [Member]
Revenues
Revenues	[1]	2,327	761	6,436	5,259
Gross margins
Gross margins		1,003	(48)	3,028	847
Other [Member]
Revenues
Revenues	[1]	4,904	3,221	14,394	11,320
Gross margins
Gross margins		$ 69	$ (267)	$ (251)	$ (421)

[1] The Company’s largest customer represented 11.2% and 14.3% of total revenues for the three and nine months ended September 30, 2016, respectively (2015 — 17.6% and 17.4%, respectively).

[2] IMAX systems include marketing and commission costs of $0.8 million and $1.9 million for the three and nine months ended September 30, 2016, respectively (2015 — $0.9 million and $1.8 million, respectively). Joint revenue sharing arrangements segment margins include advertising, marketing and commission costs of $1.4 million and $2.9 million for the three and nine months ended September 30, 2016, respectively (2015 — $1.3 million and $2.7 million, respectively). Production and DMR segment margins include marketing costs of $4.2 million and $11.7 million for the three and nine months ended September 30, 2016, respectively (2015 — $3.4 million and $8.3 million, respectively). Distribution segment margins include marketing expense of $0.6 million and $2.1 million for the three and nine months ended September 30, 2016, respectively (2015 — cost recovery of less than $0.1 million and cost recovery of $0.1 million, respectively).

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Employees Pension and Postretirement Benefits (Details) - Pension Plans, Defined Benefit [Member] - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Amounts Accrued
Obligation, beginning of period			$ 19,478	$ 19,405	$ 19,405
Interest cost	$ 65	$ 63	196	189	253
Actuarial gain			0		(180)
Obligation, end of period and unfunded status	19,674		19,674		19,478
Pension Expense
Interest cost	65	63	196	189	$ 253
Pension expense	$ 65	$ 63	$ 196	$ 189

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Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
Other Financial Instrument
Cash and cash equivalents	$ 218,104	$ 317,449	$ 117,361	$ 106,503
Net financed sales receivable	110,054	106,286
Net investment in sales-type leases	8,843	10,945
Convertible loan receivable	1,000
Foreign exchange contracts - designated forwards	7	(4,423)
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member]
Other Financial Instrument
Cash and cash equivalents	218,104	317,449
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]
Other Financial Instrument
Net financed sales receivable	110,054	106,286
Net investment in sales-type leases	8,843	10,945
Available-for-sale investment	1,000	1,000
Convertible loan receivable	1,000	0
Borrowings under the Playa Vista Loan	(28,167)	(29,667)
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	7	(4,423)
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 1 [Member]
Other Financial Instrument
Cash and cash equivalents	218,104	317,449
Estimate of Fair Value, Fair Value Disclosure [Member] | Fair Value, Inputs, Level 2 [Member]
Other Financial Instrument
Net financed sales receivable	110,260	108,184
Net investment in sales-type leases	9,142	11,154
Available-for-sale investment	1,012	997
Convertible loan receivable	1,000	0
Borrowings under the Playa Vista Loan	(28,167)	(29,667)
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	$ 7	$ (4,423)

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Non-Controlling Interests (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Non-controlling Interests
Issuance of subsidiary shares to non-controlling interests - private offering			$ 0	$ 40,000
Share issuance costs from the issuance of subsidiary shares to a non-controlling interest			0	(2,000)
Net income (loss)	$ 1,859	$ 1,904	7,401	$ 5,028
IMAX China Noncontrolling Interest
Non-controlling Interests
Balance as at December 31, 2015			49,959
Net income (loss)			8,015
Other comprehensive loss			(1,415)
Balance as at September 30, 2016	56,559		56,559
Other Noncontrolling Interest [Member]
Non-controlling Interests
Balance as at December 31, 2015			3,307
Net income (loss)			(614)
Balance as at September 30, 2016	$ 2,693		$ 2,693

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Financing Receivables (Details Textuals)	Sep. 30, 2016	Dec. 31, 2015
Financing Receivables (Textuals) [Abstract]
Financed sale receivables, Weighted average effective interest rate	9.20%	9.40%

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Inventories (Details Textuals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Inventories (Textuals) [Abstract]
Finished goods inventory with title passed to customer	$ 5,100		$ 5,100		$ 5,400
Write-downs (recoveries) for excess and obsolete inventory	$ (15)	$ (59)	$ 246	$ 405

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Other Intangible Assets (Details 1) $ in Thousands	Sep. 30, 2016 USD ($)
Other Intangible Assets [Abstract]
2016 (three months remaining)	$ 858
2017	3,270
2018	3,270
2019	3,270
2020	$ 3,270

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Other Intangible Assets (Details Textuals) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Other Intangible Assets (Textuals) [Abstract]
Other Intangible Asset, comprised mainly of ERP System	$ 14.0		$ 14.0
Acquisition of other intangible assets, cost			$ 3.2
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	less than		less than
Costs incurred to renew or extend the term of acquired other intangible assets	$ 0.1	$ 0.1	$ 0.2	$ 0.1

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Credit Facility and Playa Vista Loan (Details Textuals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Mar. 03, 2015	Oct. 06, 2014
Playa Vista Construction Loan [Member]
Credit Facility and Playa Vista Construction Loan (Textuals) [Abstract]
Playa Vista construction loan funding							$ 22,300
Interest rate description			Prior to the conversion, the Playa Vista Construction Loan bore interest at a variable interest rate per annum equal to 2.25% above the 30-day LIBOR rate, and PV Borrower was required to make monthly payments of interest only.
Effective interest rate		2.45%		2.44%
Playa Vista Loan [Member]
Credit Facility and Playa Vista Construction Loan (Textuals) [Abstract]
Maximum borrowing capacity	$ 30,000		$ 30,000
Amounts Drawn	$ 28,167		$ 28,167		$ 29,667
Playa Vista Construction Loan conversion date					Oct. 19, 2015
Additional borrowing under revolving term loan					$ 7,700
Interest rate description			As a result of the conversion, the interest rate decreased from 2.25% to 2.0% above the 30-day LIBOR rate
Total cost of development of the Playa Vista Project					54,000
Effective interest rate	2.51%		2.46%
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, granting a first lien on and security interest in the Playa Vista property and the Playa Vista Project, including all improvements to the constructed thereon, and other documents evidencing and securing the loan (the "Loan Documents").
Wells Fargo Foreign Exchange Facility [Member]
Credit Facility and Playa Vista Construction Loan (Textuals) [Abstract]
Settlement risk on its foreign currency forward contracts	$ 0		$ 0
Notional Amount of arrangements entered into	26,869		26,869
Bank of Montreal Facilities [Member]
Credit Facility and Playa Vista Construction Loan (Textuals) [Abstract]
Remaining Borrowing Capacity	10,000		10,000		10,000
Letters of credit and advance payment guarantees	100		$ 100		300
Credit Facility [Member]
Credit Facility and Playa Vista Construction Loan (Textuals) [Abstract]
Credit Facility Maturity Date			Mar. 03, 2020
Maximum borrowing capacity						$ 200,000
Remaining Borrowing Capacity	200,000		$ 200,000		200,000
Amounts Drawn	0		0		0
Letters of credit and advance payment guarantees	$ 0		$ 0		$ 0
Line of credit facility covenant terms			On February 22, 2016, the Company amended the terms of the Credit Agreement to increase the general restricted payment basket thereunder (which covers, among other things, the repurchase of shares) from $150 million to $350 million in the aggregate after the amendment date.
Compliance with covenants			The Company was in compliance with all of its requirements at September 30, 2016.

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Contingencies and Guarantees (Details Textuals) - USD ($) $ in Millions	9 Months Ended	25 Months Ended	51 Months Ended	95 Months Ended
	Sep. 30, 2016	Dec. 14, 2015	Mar. 27, 2008	Dec. 02, 2011	Dec. 31, 2015
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
Damages sought		$ 10.4
Counterclaim sought		$ 24.0
Financial Guarantees	$ 0.0
Indemnification of its directors/officers	$ 0.0				$ 0.0
Other Indemnification	0
Total amount payable related to customs audit	$ 3.4
Accrual recorded to costs and expenses applicable to revenue related to customs audit	0.8
Accrual recorded to Property, Plant and Equipment related to customs audit	0.8
Future input tax credits receivable	1.8
Net amount of VAT included in Accrued and other liabilities	$ 0.0

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Condensed Consolidated Statements of Cash Flows Supplemental Information (Details 1) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Summary of Depreciation and amortization
Film assets	$ 11,842	$ 11,917
Property, plant and equipment
Joint revenue sharing arrangements	11,581	10,043
Other property, plant and equipment	7,355	5,635
Other intangible assets	2,368	2,354
Other assets	631	579
Deferred financing costs	402	663
Depreciation and amortization	$ 34,179	$ 31,191

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Condensed Consolidated Statements of Cash Flows Supplemental Information (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Write-downs, net of recoveries
Accounts receivable			$ 556	$ 709
Financing receivables			75	0
Inventories	$ (15)	$ (59)	246	405
Film assets			1,000	0
Property, plant and equipment			792	1,464
Impairment of investments	$ 0	$ 0	194	350
Other intangible assets			40	0
Write-downs, net of recoveries			$ 2,903	$ 2,928

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Income Taxes (Details Textual) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
Deferred Tax Assets
Deferred income tax asset after valuation allowance	$ 26.2	$ 26.2	$ 26.7
Deferred income tax asset before valuation allowance	26.5	26.5	27.0
Valuation allowance	0.3	0.3	$ 0.3
Excess tax benefit due to adoption of ASU 2016-09	$ 0.0	0.1
Deferred tax asset reclass due to adoption of ASU 2016-09		$ 0.9

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Capital Stock (Details 2) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Option activity under the Stock Option Plan and the IMAX LTIP
Options outstanding, end of period	5,473,673		5,473,673
Employee Stock Option [Member]
Option activity under the Stock Option Plan and the IMAX LTIP
Granted			984,452	871,431
Granted, weighted average exercise price per share			$ 31.49	$ 31.56
Exercised			(268,516)	(1,231,964)
Exercised, weighted average exercise price per share			$ 20.54	$ 19.35
Forfeited			(45,024)	(45,474)
Forfeited, weighted average exercise price per share			$ 28.03	$ 28.26
Cancelled	2,483	0	(2,483)	0
Cancelled, weighted average exercise price per share			$ 33.80	$ 0
Options outstanding, end of period	5,473,673	5,519,653	5,473,673	5,519,653
Options outstanding, weighted average exercise price per share, end of period	$ 28.14	$ 26.45	$ 28.14	$ 26.45
Options exercisable, end of period	3,924,432	3,195,836	3,924,432	3,195,836
Options exercisable, weighted average exercise price per share, end of period	$ 27.34	$ 25.14	$ 27.34	$ 25.14

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Capital Stock (Details 3) - Restricted Share Units (RSUs) [Member] - $ / shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Resticted Share Units activity under the IMAX LTIP
Granted	465,968	337,557
Granted, weighted average grant date fair value per share	$ 31.70	$ 34.39
Vested and settled	(271,032)	(192,077)
Vested and settled, weighted average grant date fair value per share	$ 29.30	$ 28.93
Forfeited	(28,435)	(19,499)
Forfeited, weighted average grant date fair value per share	$ 30.78	$ 29.37
RSUs outstanding, end of period	1,140,138	721,815
RSUs outstanding, weighted average grant date fair value per share, end of period	$ 32.78	$ 29.99

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Capital Stock (Details 4) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2016	Jan. 01, 2016	Dec. 31, 2015	Jun. 30, 2015	Jan. 01, 2015
Net income attributable to common shareholders	$ 2,525	$ 8,610	$ 19,843	$ 33,351
Less: Accretion charges associated with redeemable common stock	0	(263)	0	(747)
Net income applicable to common shareholders	$ 2,525	$ 8,347	$ 19,843	$ 32,604
Weighted average number of common shares:
Issued and outstanding, beginning of period	66,813,787		66,813,787		67,066,654	69,673,244	69,673,244	70,152,426	68,988,050
Weighted average number of shares issued (repurchased) during the period	23,128	(453,359)	(1,620,689)	594,029
Weighted average number of shares used in computing basic income per share	67,089,782	69,699,067	68,052,555	69,582,079
Assumed exercise of stock options and RSUs, net of shares assumed repurchased	656,438	1,161,385	668,325	1,519,785
Weighted average number of shares used in computing diluted income per share	67,746,220	70,860,452	68,720,880	71,101,864

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Capital Stock (Details 5) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Movement of Shareholders Equity
Balance as at December 31, 2015			$ 624,791
Net income attributable to common shareholders	$ 2,525	$ 8,610	19,843	$ 33,351
Adjustment to capital stock for cash received from issuance of common shares			5,514
Adjustment to capital stock for issuance of common shares for vested RSUs			1,121
Adjustment to capital stock for fair value of stock options exercised at the grant date			2,104
Adjustment to capital stock for average carrying value of repurchased and retired common shares	(21,220)		(21,220)
Adjustment to capital stock for shares held in treasury	(6)		(6)		$ 0
Adjustment to other equity for employee stock options granted			10,092
Adjustment to other equity for non-employee stock options granted and vested			30
Adjustment to other equity for fair value of stock options exercised at the grant date			(2,104)
Adjustment to other equity for RSUs granted	12,242		12,242
Adjustment to other equity for RSUs vested	(8,793)		(8,793)
Adjustment to other equity for stock exercised from treasury shares			(1,216)
Adjustment to other equity for cash received from the issuance of common shares in excess of par value	1,682		1,682
Adjustment to accumulated deficit for common shares repurchased and retired	(79,158)		(79,158)
Adjustment to accumulated other comprehensive loss for unrealized net gain from cash flow hedging instruments			1,865
Adjustment to accumulated other comprehensive loss for the realization of cash flow hedging net loss upon settlement			2,565
Adjustment to accumulated other comprehensive loss for foreign currency translation adjustments			(434)
Adjustment to accumulated other comprehensive loss for the amortization of actuarial loss on post retirement benefit plan	17	$ 0	51	$ 0
Adjustment to accumulated other comprehensive loss for tax effect of movement in other comprehensive income			(1,166)
Balance as at September 30, 2016	$ 567,803		$ 567,803

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Capital Stock (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				9 Months Ended			12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Dec. 31, 2015	Sep. 30, 2015	Sep. 30, 2016	Oct. 07, 2015	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014	Apr. 20, 2016	Jan. 01, 2016	Oct. 08, 2015	Jan. 01, 2015	Jun. 16, 2014
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period	$ 7,740			$ 4,300	$ 22,489		$ 14,900
Reserved common shares for future issuance	12,467,960	7,023,258	7,023,258		12,467,960			7,023,258
Options outstanding	5,473,673				5,473,673
Antidilutive shares issuable upon exercise of stock options and restricted share units	2,570,983			1,473,950	2,834,896		1,067,859
Details of the share repurchase program					On April 20, 2016, the Company’s board of directors approved an incremental $50 million increase to the share repurchase allowance, for an aggregate allowance of $200 million under the program. All other terms remain unchanged.				On June 16, 2014, the Company’s board of directors approved a new $150.0 million share repurchase program for shares of the Company’s common stock. Purchases under the program commenced during the third quarter of 2014. The share repurchase program expires on June 30, 2017. The repurchases may be made either in the open market or through private transactions, subject to market conditions, applicable legal requirements and other relevant factors. The Company has no obligation to repurchase shares and the share repurchase program may be suspended or discontinued by the Company at any time.
Stock Repurchase Program, Authorized Amount										$ 200,000				$ 150,000
Stock Repurchase Program Expiration Date					Jun. 30, 2017
Stock Repurchased And Retired During Period, Shares	500,000			1,000,000	3,290,512		1,000,000
Stock Acquired, Average Cost per Share	$ 29.32			$ 34.25	$ 30.48		$ 34.25
Payments For Repurchase Of Common Stock	$ 14,664			$ 34,279	$ 100,378		$ 34,279
Number of treasury shares held in trust for future settlement of share based awards					176
Value of treasury shares held in trust for future settlement of share based awards	6	$ 0	$ 0		$ 6			$ 0
Accumulated earnings relcass due to adoption of ASU 2016-09					4,400
Deferred tax asset reclass due to adoption of ASU 2016-09					900
Other equity reclass due to adoption of ASU 2016-09					5,300
Stock-based compensation expense recovery due to adoption of ASU 2016-09					2,700
Employee Stock Option [Member]
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period	3,392			2,300	9,370		8,400
Tax benefits realized stock options	$ 900			$ 500	$ 2,400		$ 1,800
Options exercisable	3,924,432			3,195,836	3,924,432		3,195,836
Options outstanding	5,473,673			5,519,653	5,473,673		5,519,653				4,805,244		5,925,660
Options outstanding, weighted average exercise price	$ 28.14			$ 26.45	$ 28.14		$ 26.45				$ 27.03		$ 24.24
Granted					984,452		871,431
Weighted average fair value of options granted	$ 7.80			$ 0	$ 8.16		$ 8.07
Options exercisable intrinsic value	$ 9,723				$ 9,723
Cancelled	2,483			0	(2,483)		0
Weighted average remaining contractual life of exercisable option					3 years 10 months 24 days
Intrinsic value of options exercised	$ 482			$ 1,200	$ 3,200		$ 21,400
Options common shares were vested and exercisable	3,924,432				3,924,432
Options exercisable, weighted average exercise price per share, end of period	$ 27.34			$ 25.14	$ 27.34		$ 25.14
Weighted average exercise price of options forfieted					$ 28.03		$ 28.26
Antidilutive shares issuable upon exercise of stock options and restricted share units	2,551,453			1,473,950	2,551,453		1,006,325
Options Non Employees [Member]
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period	less than			less than	less than
Share-based compensation costs recorded for the period	$ 100			$ 100	$ (100)		$ 100
Options exercisable	26,950			21,525	26,950		21,525
Options outstanding	28,750			39,500	28,750		39,500
Options outstanding, weighted average exercise price	$ 26.90			$ 26.78	$ 26.90		$ 26.78
Granted	0			0	0		0
Amount for stock options or rights included in accrued liabilities					less than			less than
Amount for stock options or rights included in accrued liabilities	$ 100	100	$ 100		$ 100			$ 100
Intrinsic value of options exercised	$ 100			$ 200	$ 100		$ 200
Options exercisable, weighted average exercise price per share, end of period	$ 26.97			$ 26.34	$ 26.97		$ 26.34
Employee Stock Option China Incentive Plan [Member]
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period	$ 200	2,100		$ 100	$ 700		$ 300	$ (600)
Options outstanding												186,446
Options outstanding, weighted average exercise price												$ 23.70
Granted								0
Options fully vested or expected to vest, weighted average remaining contractual life						7 years
Common share options subject to vesting based on performance commitment												186,446
Options forfeited			186,446
Weighted average exercise price of options forfieted			$ 23.70
Fair value of options outstanding												$ 1,900
Share-based compensation costs, not yet recognized, period for recognition						5 years
Total fair value of awards granted			$ 3,900
CSSBP [Member]
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period	100	1,400			300
Granted								0
Amount for stock options or rights included in accrued liabilities	700	400	400		700			$ 400
Options vested and settled during period		$ 1,000
Total fair value of awards granted			$ 2,100
China RSU [Member]
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period	$ 100				$ 400
Restricted Share Units (RSUs) [Member]
Capital Stock (Textuals) [Abstract]
Number of RSUs outstanding	1,140,138			721,815	1,140,138		721,815				973,637		595,834
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period					465,968		337,557
RSUs outstanding, Weighted Average Grant Date Fair Value per Share	$ 32.78			$ 29.99	$ 32.78		$ 29.99				$ 32.27		$ 27.13
Antidilutive shares issuable upon exercise of stock options and restricted share units	19,530			0	283,443		61,534
Share-based compensation costs, not yet recognized, period for recognition					2 years 4 months 24 days		3 years
Share-based compensation costs, not yet recognized	$ 26,753			$ 16,400	$ 26,753		$ 16,400
Tax benefits realized	$ 300			$ 400	$ 2,600		$ 2,000
Restricted Stock Unit Contingent Right	1
Restricted Stock Unit Economic Equivalent	1
Common shares issued in connection with vested RSUs	27,416			32,345	271,032		192,077
Common shares issued from treasury in connection with vested RSUs	21,871			0	50,167		21,709
Common shares purchased in open market by trustee in connection with RSUs	217			26,582	212,029		164,387
Shares withheld for tax withholding	5,328			5,763	8,836		5,981
Number of treasury shares held in trust for future settlement of share based awards					176
Value of treasury shares held in trust for future settlement of share based awards	$ 6				$ 6
RSUs that may vest on shorter schedule					300,000
Restricted Share Units (RSUs) [Member] | Employee [Member]
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period	$ 3,900			$ 1,900	$ 11,600		$ 6,200
Common shares purchased in open market by trustee in connection with RSUs	0				249,657
Weighted average price of common shares purchased in open market by trustee in connection with RSUs	$ 0				$ 33.55
Restricted Share Units (RSUs) [Member] | Non Employee [Member]
Capital Stock (Textuals) [Abstract]
Share-based compensation costs recorded for the period				less than			less than
Share-based compensation costs recorded for the period	$ 0			$ 100	$ 0		$ 100
Maximum [Member] | Restricted Share Units (RSUs) [Member]
Capital Stock (Textuals) [Abstract]
Stock based awards vesting period					4 years		4 years
Minimum [Member] | Restricted Share Units (RSUs) [Member]
Capital Stock (Textuals) [Abstract]
Stock based awards vesting period					1 year		0 years

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Segmented Information (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Geographical Information
Revenues, total	$ 86,550	$ 85,101	$ 270,421	$ 254,472
United States [Member]
Geographical Information
Revenues, total	28,139	27,914	96,276	95,945
Canada [Member]
Geographical Information
Revenues, total	2,368	3,412	9,992	8,440
Greater China [Member]
Geographical Information
Revenues, total	29,736	27,513	84,797	71,427
Asia (excluding Greater China) [Member]
Geographical Information
Revenues, total	10,665	11,007	25,034	26,732
Western Europe [Member]
Geographical Information
Revenues, total	6,140	7,100	26,522	24,139
Russia & the CIS [Member]
Geographical Information
Revenues, total	2,397	1,705	7,684	9,510
Latin America [Member]
Geographical Information
Revenues, total	1,408	2,459	8,562	7,849
Rest of the World [Member]
Geographical Information
Revenues, total	$ 5,697	$ 3,991	$ 11,554	$ 10,430

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Segmented Information (Details Textual) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) Segments	Sep. 30, 2015 USD ($)
Segment Reporting (Textuals) [Abstract]
Number of Reportable Segments | Segments			7
Marketing and commission costs	$ 1.3	$ 1.3	$ 3.0	$ 2.8
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 comprise more than 10% of total revenue.
Description of products and services from which each reportable segment derives its revenues			The Company has seven reportable segments identified by category of product sold or service provided: IMAX systems; theater system maintenance; joint revenue sharing arrangements; film production and IMAX DMR; film distribution; film post-production; and other. The IMAX systems segment designs, manufactures, sells or leases IMAX theater projection system equipment. The theater system maintenance segment maintains IMAX theater projection system equipment in the IMAX theater network. The joint revenue sharing arrangements segment provides IMAX theater projection system equipment to an exhibitor in exchange for a share of the box-office and concession revenues. The film production and IMAX DMR segment produces films and performs film re-mastering services. The film distribution segment distributes films for which the Company has distribution rights. The film post-production segment provides film post-production and film print services. The other segment includes certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items.
Description of the basis of accounting for transactions between reportable segments			The accounting policies of the segments are the same as those described in note 2 to the audited consolidated financial statements included in the Company's 2015 Form 10-K. Transactions between the film production and IMAX DMR segment and the film post-production segment are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below.
IMAX systems [Member]
Segment Reporting (Textuals) [Abstract]
Advertising, marketing and commission costs	0.8	0.9	$ 1.9	1.8
Joint revenue sharing arrangements [Member]
Segment Reporting (Textuals) [Abstract]
Advertising, marketing and commission costs	1.4	1.3	2.9	2.7
Production and IMAX DMR [Member]
Segment Reporting (Textuals) [Abstract]
Marketing costs (recovery)	4.2	$ 3.4	11.7	8.3
Distribution [Member]
Segment Reporting (Textuals) [Abstract]
Marketing costs (recovery)		less than
Marketing costs (recovery)	$ 0.6	$ (0.1)	$ 2.1	$ (0.1)
Significant Customer 1 [Member]
Segment Reporting (Textuals) [Abstract]
Percentage of total revenues represented by largest customer	11.20%	17.60%	14.30%	17.40%

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Employees Pension and Postretirement Benefits (Details 1) $ in Thousands	Sep. 30, 2016 USD ($)
SERP Benefits [Member]
Schedule of expected benefit payments
2016 (three months remaining)	$ 0
2017	19,871
2018	0
2019	0
2020	0
Thereafter	0
Total expected future benefit payment	19,871
Postretirement Benefits Executives [Member]
Schedule of expected benefit payments
2016 (three months remaining)	34
2017	54
2018	60
2019	66
2020	33
Thereafter	539
Total expected future benefit payment	786
Postretirement Benefits Canadian Employees [Member]
Schedule of expected benefit payments
2016 (three months remaining)	96
2017	100
2018	108
2019	115
2020	117
Thereafter	1,330
Total expected future benefit payment	$ 1,866

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Employees Pension and Postretirement Benefits (Details Textuals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Dec. 31, 2014
Employees Pension and Postretirement Benefits (Additional 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%
SERP Benefits [Member]
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract]
Accumulated benefit obligation for the SERP	$ 19,700		$ 19,700		$ 19,500
Benefit Obligation	19,674		19,674		19,478	$ 19,405
Companies contribution and expenses			0
Expected interest costs in the remainder of the year	100		100
Postretirement Benefits Executives [Member]
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract]
Benefit Obligation	$ 786		$ 786		763
Maximum amount of Postretirement benefit expensed	less than	less than	less than	less than
Maximum amount of Postretirement benefit expensed	$ 100	$ 100	$ 100	$ 100
Postretirement Benefits Canadian Employees [Member]
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract]
Benefit Obligation	$ 1,866		$ 1,866		$ 1,778
Maximum amount of Postretirement benefit expensed	less than	less than	less than
Maximum amount of Postretirement benefit expensed	$ 100	$ 100	$ 100	100
Canadian Plan [Member]
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract]
Companies contribution and expenses	316	245	891	819
U.S. Internal Revenue Code [Member]
Pension and Other Postretirement Benefit Expense (Textuals) [Abstract]
Companies contribution and expenses	$ 137	$ 200	$ 486	$ 400

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Financial Instruments (Details 2) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Recorded investment in financing receivables by credit quality indicator
Minimum Lease Payments	$ 9,515	$ 11,617
Financed Sales Receivables	110,697	106,854
Total	120,212	118,471
In Good Standing [Member]
Recorded investment in financing receivables by credit quality indicator
Minimum Lease Payments	7,974	10,252
Financed Sales Receivables	108,375	105,352
Total	116,349	115,604
Pre-Approved Transactions [Member]
Recorded investment in financing receivables by credit quality indicator
Minimum Lease Payments	0	0
Financed Sales Receivables	1,387	757
Total	1,387	757
Transactions Suspended [Member]
Recorded investment in financing receivables by credit quality indicator
Minimum Lease Payments	1,541	1,365
Financed Sales Receivables	935	745
Total	$ 2,476	$ 2,110

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Financial Instruments (Details 3) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Investment In Financing Receivables On Nonaccrual Status
Net investment in leases recorded investment	$ 1,541	$ 1,365
Net investment in leases related allowance	(672)	(672)
Net financed sales receivables recorded investment	935	745
Net financed sales receivables related allowance	(643)	(568)
Total recorded investment	2,476	2,110
Total related allowance	$ (1,315)	$ (1,240)

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Financial Instruments (Details 4) - USD ($) $ in Thousands	Sep. 30, 2016	Jun. 30, 2016	Jan. 01, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Jan. 01, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	$ 6,346			$ 4,561
Related Unbilled Recorded Investment	113,866			113,910
Total Recorded Investment	120,212			118,471
Related Allowances	(1,315)			(1,240)
Recorded Investment Net of Allowances	118,897			117,231
Financing Receivables Accrued and Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	2,122			1,748
Financing Receivables 30 to 89 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	964			1,190
Financing Receivables Equal To Greater Than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	3,260			1,623
Net Investment in Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	936			1,463
Related Unbilled Recorded Investment	8,579			10,154
Total Recorded Investment	9,515			11,617
Related Allowances	(672)	$ (672)	$ (672)	(672)	$ (972)	$ (972)	$ (972)
Recorded Investment Net of Allowances	8,843			10,945
Net Investment in Leases [Member] | Financing Receivables Accrued and Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	84			840
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	81			177
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	771			446
Net Financed Sales Receivables [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	5,410			3,098
Related Unbilled Recorded Investment	105,287			103,756
Total Recorded Investment	110,697			106,854
Related Allowances	(643)	$ (643)	$ (568)	(568)	$ (494)	$ (494)	$ (494)
Recorded Investment Net of Allowances	110,054			106,286
Net Financed Sales Receivables [Member] | Financing Receivables Accrued and Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	2,038			908
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	883			1,013
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	2,489			1,177
Financing Receivables Continue To Accrue Finance Income [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	3,911			1,485
Related Unbilled Recorded Investment	25,527			11,871
Related Allowances	0			0
Recorded Investment Net of Allowances	29,438			13,356
Financing Receivables Continue To Accrue Finance Income [Member] | Financing Receivables Accrued and Current
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	558			170
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	575			271
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	2,778			1,044
Financing Receivables Continue To Accrue Finance Income [Member] | Net Investment in Leases [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	380			293
Related Unbilled Recorded Investment	2,424			1,076
Related Allowances	0			0
Recorded Investment Net of Allowances	2,804			1,369
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	12			41
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	53			47
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	315			205
Financing Receivables Continue To Accrue Finance Income [Member] | Net Financed Sales Receivables [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Billed Financing Receivables	3,531			1,192
Related Unbilled Recorded Investment	23,103			10,795
Related Allowances	0			0
Recorded Investment Net of Allowances	26,634			11,987
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	546			129
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	522			224
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	$ 2,463			$ 839

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Financial Instruments (Details 5) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Financing Receivable, Impaired [Line Items]
Recorded Investment	$ 748	$ 525	$ 748	$ 525
Unpaid Principal	269	53	269	53
Related Allowance	(643)	(494)	(643)	(494)
Average Recorded Investment	748	525	674	525
Interest Income Recognized	0	0	0	0
Net Financed Sales Receivables [Member]
Financing Receivable, Impaired [Line Items]
Impaired Financing Receivable with Related Allowance, Recorded Investment	748	525	748	525
Impaired Financing Receivable With Related Allowance, Unpaid Principal	269	53	269	53
Impaired Financing Receivable With Related Allowance, Average Recorded Investment	748	525	674	525
Impaired Financing Receivable With Related Allowance, Interest Income Recognized	0	0	0	0
Impaired Financing Receivable With No Related Allowance, Recorded Investment	0	0	0	0
Impaired Financing Receivable With No Related Allowance, Unpaid Principal	0	0	0	0
Impaired Financing Receivable With No Related Allowance, Average Recorded Investment	0	0	0	0
Impaired Financing Receivable With No Related Allowance, Interest Income Recognized	0	0	0	0
Related Allowance	$ (643)	$ (494)	$ (643)	$ (494)

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Financial Instruments (Detail 6) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Allowance for credit losses:
Beginning balance			$ 1,240
Ending balance	$ 1,315		1,315
Net Investment in Leases [Member]
Allowance for credit losses:
Beginning balance	672	$ 972	672
Charge-offs	0	0	0	$ 0
Recoveries	0	0	0	0
Provision	0	0	0	0
Ending balance	672	972	672	972
Ending balance: individually evaluated for impairment	672	972	672	972
Financing receivables:
Ending balance: individually evaluated for impairment	9,515	12,032	9,515	12,032
Net Financed Sales Receivables [Member]
Allowance for credit losses:
Beginning balance	643	494	568
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	0	0	75	0
Ending balance	643	494	643	494
Ending balance: individually evaluated for impairment	643	494	643	494
Financing receivables:
Ending balance: individually evaluated for impairment	$ 110,697	$ 103,418	$ 110,697	$ 103,418

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Financial Instruments (Details 7) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Foreign Exchange Contract [Member] | Designated as Hedging Instrument [Member]
Derivatives Fair Value [Line Items]
Foreign exchange contracts - Forwards	$ 26,869	$ 30,710

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Financial Instruments (Details 8) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Fair value of foreign exchange contracts
Foreign exchange contracts - designated forwards	$ 7	$ (4,423)
Other Assets [Member] | Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member]
Fair value of foreign exchange contracts
Derivative Asset, Fair Value	734	0
Accrued and other liabilities [Member] | Foreign Exchange Forward [Member] | Designated as Hedging Instrument [Member]
Fair value of foreign exchange contracts
Derivative Liability, Fair Value	$ (727)	$ (4,423)

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Financial Instruments (Details 9) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Derivatives in Foreign Currency Hedging relationships
Derivative (Loss) Gain Recognized in OCI (Effective Portion)	$ (293)	$ (2,309)	$ 1,865	$ (4,983)
Location of Derivative Loss Reclassified from AOCI into Income (Effective Portion)	(572)	(1,045)	(2,565)	(2,196)
Selling, general and administrative expenses [Member]
Derivatives in Foreign Currency Hedging relationships
Location of Derivative Loss Reclassified from AOCI into Income (Effective Portion)	(572)	(1,045)	(2,565)	(2,196)
Fair Value Hedging [Member]
Derivatives in Foreign Currency Hedging relationships
Derivative (Loss) Gain Recognized in OCI (Effective Portion)	$ (293)	$ (2,309)	$ 1,865	$ (4,983)

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Financial Instruments (Details Textual) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Financial Instruments (Textuals) [Abstract]
Transfers into/out of Level 3			$ 0	$ 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
Estimated gain to be reclassified to earnings within the next twelve months			$ 100
Financial Instruments Additional (Textuals) [Abstract]
Carrying value of investments accounted for under the equity method of accounting	$ 1,000		1,000		$ 2,200
Adjustment directly to earnings for impairment of available-for-sale investment	0	$ 0	194	350
Convertible loan receivable	1,000		$ 1,000
Convertible loan effective interest rate			5.00%
Convertible loan receivable due date			Sep. 26, 2019
Schedule of Available For Sale Securities [Line Items]
Investment classified as available-for-sale - cost	1,500		$ 1,500
Investment classified as available-for-sale - fair value	0		0		0
Variable Interest Entity, Not Primary Beneficiary [Member]
Financial Instruments Additional (Textuals) [Abstract]
Carrying value of investments accounted for under the equity method of accounting	0		0		1,000
Equity method investment, difference between carrying amount and underlying equity	1,400		1,400
Variable Interest Entity, Not Primary Beneficiary [Member] | Equity Accounted Investment [Member]
Financial Instruments Additional (Textuals) [Abstract]
Gross revenues of investment new business ventures	0	0	300	0
Cost of revenue of investment new business ventures	1,600	1,900	6,000	6,400
Net loss on equity-accounted investments	1,500	$ 1,800	5,600	$ 6,200
Other Debt Securities [Member]
Schedule of Available For Sale Securities [Line Items]
Investment classified as available-for-sale - cost	2,500		2,500
Fixed Income Securities [Member]
Schedule of Available For Sale Securities [Line Items]
Investment classified as available-for-sale - cost	$ 1,000		$ 1,000		$ 1,000

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Non-Controlling Interests (Details Textuals) $ in Thousands			9 Months Ended		12 Months Ended
	Feb. 10, 2015 USD ($)	Apr. 08, 2014 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2014 USD ($) yr Film
Redeemable Noncontrolling Interest [Line Items]
Aggregate subscription price			$ 0	$ 40,000
Investment in film assets			$ (14,162)	$ (12,069)
IMAX China Noncontrolling Interest
Redeemable Noncontrolling Interest [Line Items]
Non-controlling interest description		On April 8, 2014, the Company announced the sale and issuance of 20.0% of the shares in IMAX China to entities owned and controlled by CMC Capital Partners ("CMC"), an investment fund focused on media and entertainment, and FountainVest Partners ("FountainVest"), a China-focused private equity firm.
Minority Interest Ownership Percentage By Company			68.50%
Minority Interest Ownership Percentage By Noncontrolling Owners		20.00%
IMAX China Noncontrolling Interest | Class C Shares [Member]
Redeemable Noncontrolling Interest [Line Items]
Aggregate subscription price	$ 40,000	$ 40,000
Other Noncontrolling Interest [Member]
Redeemable Noncontrolling Interest [Line Items]
Non-controlling interest description					In 2014, the Company announced the creation of the Film Fund to co-finance a portfolio of 10 original large-format films. The Film Fund, which is intended to be capitalized with up to $50.0 million, will finance an ongoing supply of original films that the Company believes will be more exciting and compelling than traditional documentaries. The initial investment in the Film Fund was committed to by a third party in the amount of $25.0 million, with the possibility of contributing additional funds. The Company, which will contribute $9.0 million to the Film Fund over five years starting in 2014, anticipates the Film Fund will be self-perpetuating, with a portion of box office proceeds reinvested into the Film Fund to generate a continuous, steady flow of high-quality documentary content. The related production, financing and distribution agreement includes put and call rights relating to change of control of the rights, title and interest in the co-financed pictures.
Number Of Expected Original Films | Film					10
Film Fund Expected Capital Contribution					$ 50,000
Investment in film assets			$ 7,700
Other Noncontrolling Interest [Member] | Third Party [Member]
Redeemable Noncontrolling Interest [Line Items]
Film Fund commitment amount					25,000
Other Noncontrolling Interest [Member] | IMAX [Member]
Redeemable Noncontrolling Interest [Line Items]
Film Fund commitment amount					$ 9,000
Contribution Period | yr					5