IMAX : Q4 2019 Supplemental Slides

Full Year 2019 Financial Results

February 19, 2020

® IMAX Corp.

Forward-Looking Statements

This presentation contains forward looking statements that are based on IMAX®management's assumptions and existing information and involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), business and technology strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of business, operations and technology, plans and references to the future success of IMAX 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, 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, including the adverse impact of the coronavirus outbreak in China; the performance of IMAX DMR®films; the signing of theater system agreements; conditions, changes and developments in the commercial exhibition industry; risks related to currency fluctuations; the potential impact of increased competition in the markets within which the Company operates; competitive actions by other companies; the failure to respond to change and advancements in digital technology; risks relating to recent consolidation among commercial exhibitors and studios; risks related to new business initiatives; conditions in the in-home and out-of-home entertainment industries; the opportunities (or lack thereof) that may be presented to and pursued by the Company; risks related to cyber-security and data privacy; risks related to the Company's inability to protect the Company's intellectual property; general economic, market or business conditions; the failure to convert theater system backlog into revenue; changes in laws or regulations; the failure to fully realize the projected cost savings and benefits from any of the Company's restructuring initiatives; and other factors, many of which are beyond the control of the Company. These factors, other risks and uncertainties and financial details are discussed in IMAX's most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. The Company undertakes no obligation to update publicly or otherwise revise any forward looking statements, whether as a result of new information, future events or otherwise.

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Strategic Update

Richard Gelfond

Chief Executive Officer

Focus on Growth

Strategic Actions Taken …

Enhance

End-to-End

Technology/

IMAX Experience

IMAX Enhanced &

Non-Traditional Content

… Driving Strong Performance Across KPIs in 20191

Revenue	+6%
Global Box Office	+7%
Global Commercial Theatre Network	+9%
Gross Margin ($)	+3%
Gross Profit Margin (%)	-140 bps
GAAP Net Income / EPS	+74% / +79%

More

Improve

Net Income2/ EPS2

+105% / +111%

Effectively Market

Performance

Our Brand

of China

Business

Adj. EPS2	+15%
Adj. EBITDA ($)2	+12%
Adj. EBITDA Margin (%)2	+210 bps

Source: Company Data

1. Percentage and other changes refer to FY 2019 vs. FY 2018 unless otherwise noted.
2. Attributable to common shareholders.

Focusing on Our Strategy, Delivering Solid Results and Setting Foundation For Growth

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China Performance Strong in FY19 Across KPIs

Box office						Theatre

$366M (USD) box office702 commercial network

+14% YoY	+9% YoY	+13% YoY
with stable same-store sales in
Mainland China (RMB)	Greater China (USD)
Mainland China (RMB)
vs. +5% industry

IMAX = 9 of the Top 10 films in 2019

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2020 Content Slate has Broad Appeal; features IMAX DNA

Mulan	No Time	Black Widow (May)	Fast & Furious 9 (May)	Wonder
(March)	to Die (April)			Woman 1984 (June)

Top Gun:	TENET (July)	Venom 2 (Oct)	The Eternals (Nov)	Dune (Dec)
Maverick (June)

2020 Portfolio is Broad and Balanced; IMAX DNA Creates Additional Demand

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Detective

Chinatown 3 (LL - TBD)

The Rescue (LL - TBD)

= Indicates IMAX DNA	6

IMAX is a Global Brand

North America

410

(+6)

1%

Central America

24

100+

26 - 100

11 - 25

6 - 10

1 - 5 None

Notes:

YoY 2018-2019 commercial network growth

Europe

210

(+21)

11%

Africa

14

(+2)

17%

South America	Middle East
26
24

(+3)	(+3)
13%
14%

1,529 Commercial

Theatres in 81

Countries

Asia Pacific

821

(+85)

12%

Source: Company Data

73% of IMAX Network is Located in International Markets

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FY 2019 Box Office - Benefits of Global Diversification

$ in Millions	+$76.4
	+7.4%
		Greater China	$1,108.5
	International (Ex.
	+$29.2
	China)
	+$45.6		$365.8M

Domestic

$1,032.1

+$1.6

$336.6

Greater China

$379.6

International$334.0

(Ex. China)

$361.5		$363.1
Domestic
FY 2018	Source: Company Data	FY 2019

Greater China and Rest of World Out-gross Domestic for First Time

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Emerging Markets Contribute to 16% increase in IMAX Total Addressable Market

Worldwide Updated Addressable Market: 3,318	3,318

Network + Backlog Penetration: 59%

1,414

1,267

	67%		BAR STACKS
		59%
	251		434
637			Unpenetrated Market
		121	42%
62	74%	IMAX Backlog
	702		1529
410		417	IMAX Network
Domestic	Greater China	RoW	TOTAL

Source: Company Data

Future Regional Expansion Opportunities Create Growth for the IMAX Network

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Blockbuster 2021 Around the Corner

SHANG-CHI	FAST &
and the	FURIOUS
Legend of the	10
Ten Rings
(February)	(April)

SPIDER-	INDIANA
MAN	JONES
(Untitled)	(Untitled)

(July)(July)

DOCTOR

STRANGE

in the

Multiverse of

Madness

(May)

MISSION:

IMPOSSIBLE

7

(July)

THE

BATMAN

(June)

THOR:

Love and Thunder

(November)

JURASSIC

WORLD

3

(June)

AVATAR

2

(December)

The Majority of the Projected Top Ten Releases Have the Potential to Top $1 Billion in Worldwide GBO

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Extending TheIMAX Experience®

TheIMAX Experienceis more than just the world's most immersive theatrical experience. In addition to preserving the filmmaker's full creative intent, IMAX adds value for

filmmakers, studios, exhibitors and consumers at every stage of the content lifecycle.

T H E I M A XE X P E R I E N C E

S T E P 1	S T E P 2	S T E P 3	S T E P 4	S T E P 5
Shot with	Optimized	Screened in	Amplified by	Exclusive to IMAX
IMAX Cameras	by IMAX	IMAX Theatres	IMAX Marketing	in the Home

Films shot with IMAX-certified	IMAX's proprietary DMR	Worldwide premieres across the	IMAX's award-winning "always-	IMAX Enhanced capitalizes
Cameras maximize IMAX DNA	technology enables full creative	expansive IMAX theatre network	on" brand and marketing	on the growing demand for
throughout the entire production	control for filmmakers	guarantee a global roll-out and	campaigns amplify fan loyalty and	exclusive IMAX streaming content
process		maximum audience reach	engagement	in the home

E X P A N S I O N

Fueling the Growing Demand For IMAX Enhanced Content

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IMAX Enhanced

In 2019, IMAX Enhanced made considerable strides in expanding the depth and breadth of its global ecosystem with the launch of new device categories, exclusive 4K content and streaming platforms to cover the entire value chain for IMAX fans and home theater enthusiasts. In addition, we released Spider-Man: Far From Home-thefirst-ever Marvel title to feature the IMAX expanded aspect ratio in the home.

D E V I C E P A R T N E R S : 1 8 I N 5 0 +	C O N T E N T T I T L E S : 3 4	S T R E A M I N G P L A T F O R M S : 6
C O U N T R I E S			I N 1 5 C O U N T R I E S

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The IMAX Ecosystem

Deeply Embedded in

the Fabric of the Global

Entertainment Industry

Consumers

The IMAX Experience

Eventicize Content

Exhibitors

Marketing

Eventicize Content

Drive Pricing

Drive Volume

Creatives/

Filmmakers

Cameras

Pre / Post Production

Aspect Ratio

Eventicize Content

Studios

DMR

Marketing

Eventicize Content

Post-Production

Streamers

Eventicize Content

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Financial Review

Patrick McClymont

Chief Financial Officer

Delivering on Key Metrics

Box Office Growth

Margins

Returns

OPEX(1)

Original Projections

Projected high single digit annual growth

Projected return to historic peak EBITDA Margin of 40.5%

Projected ROIC in excess of 10%

Projected Flat OPEX vs 2018 ($111.1M)

Delivered

+7% increase

Resulting from growing international network

and strong IMAX brand

New peak at 41.7%

Return of 10.3%

resulting from capital spending discipline

Decrease to $107.9M

(2.9%)

1. Operating expenses defined as selling, general and administrative expenses, plus R&D costs, lessstock-based compensation.

IMAX Outpaced the Industry and Delivered in the Right Places

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FY 2019 Financial Summary

$ in Millions, Except EPS Data

Revenue / Gross Margin

Revenue +5.7%

Operating Expenses 1

Operating Expenses (2.9%)

Earnings

Adj. EBITDA +12.1%

Earnings Per Share

Adj. EPS +15.4%

+5.7%

(3.3%)

39.6%

41.7%

+15.4%

$395.7

+12.1%

$374.4

$166.5 +9.0%

$181.5

$111.1

$107.9

$133.2

$99.6

$149.3

$90.7

$1.05

$0.08

$0.91

$0.38

$0.97

$207.9 +3.0%$214.2

FY 2018

FY 2019

Cost of Revenues

Gross Margin

FY 2018

FY 2019

1Operating expenses defined as selling, general and administrative expenses, plus R&D costs, less stock-based compensation.

	$58.6
$33.6	Net Income
FY 2018	FY 2019

Adj. EBITDA Margin (%)

Reflects the add-back / reduction of items consistent with our definition of adjusted EBITDA as shown on slide 25.

$0.53	Net Income
Per Diluted Share

FY 2018

FY 2019

Reflects the per diluted share add-back / reduction of items consistent with our definition of adjusted EPS as shown on slide 24.

Source: Company Data

Solid Revenue Growth and Cost Discipline Drive Operating Leverage

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FY 2019 Segment Detail

$ in Millions

66.0%	Network		Theatre Sales & Maintenance
	64.4%
			50.9%		48.1%
		+6.9%
					+7.2%
			$196.8
					$180.5
$184.2		$168.4
$62.6	+12.1%	$70.1
					$93.7
			$82.6	+13.4%

$121.6	+4.2%	$126.7

$85.8

+1.2%

$86.8

FY 2018			FY 2019	FY 2018			FY 2019
Gross Margin (%)		Cost of Revenues			Gross Margin	Gross Margin (%)		Cost of Revenues			Gross Margin

Source: Company Data

TS&M Margin Growth

55.0%

53.0%

51.2%

50.0%

48.9%

48.4%

45.0%	43.5%	44.1%

42.3%

40.0%

39.1%

35.0%

30.0%

Q1

Q2

Q3

Q4

Theater Sales & Maintenance Margin

STL Margin

Network Growth on Higher Box Office; Sequential Gross Margin Improvement on Our Theater System Installs

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Network Update - IMAX Systems Pipeline

Pipeline

564

11531

Other Upgrades

Full Year 2019

90

17

JV Upgrades

JV

	Total Signings	Total Installations
Sales and STL	49	55
Hybrid STL	48	20
JV's	7	54
		276
Upgrades	39	57
JV Upgrades	21	38
Other Upgrades	18	19
Total	143	186

80

179	134

		132
109

175	168

Hybrid STL

Sales / Sales Type Lease

Source: Company Data

FY 2018

FY 2019

Continued Strong Demand for IMAX Systems; High Visibility into Multi-Year Network Growth

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IMAX Pipeline: Mix by Deal Type and Region

Backlog by Type

498

499

564

531

47%		52%
	57%
	60%

53%		48%
	43%
	40%

2016	2017	2018	2019
		JV		Other Systems

Note: Backlog includes upgrades

Source: Company Data

Backlog by Region

498

499

564

531

33%38%

52%52%

67%62%

48%48%

2016	2017	2018	2019
		Greater China		ROW (Includes N. America)

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Appendix

Use of Non-GAAP Financial Measures

In this earnings presentation, 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, EBITDA, Adjusted EBITDA per Credit Facility, adjusted EBITDA margin, free cash flow and return on invested capital 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) and non-recurring charges 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) and non-recurring charges 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.

The Company is required to maintain a minimum level of "EBITDA", as such term is defined in the Company's credit agreement (and which is referred to herein as "Adjusted EBITDA per Credit Facility", as the credit agreement includes additional adjustments beyond interest, taxes, depreciation and amortization). EBITDA and Adjusted EBITDA per Credit Facility (each as defined above) should not be construed as substitutes for net income or as better measures of liquidity as determined in accordance with U.S. GAAP. The Company believes that EBITDA, Adjusted EBITDA per Credit Facility and Adjusted EBITDA margin are relevant and useful information widely used by analysts, investors and other interested parties in the Company's industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of its operating performance and to provide additional information with respect to the Company's ability to comply with its credit agreement requirements.

Free cash flow is defined as cash provided by operating activities minus cash used in investing activities (from the condensed consolidated statements of cash flows). Cash provided by operating activities consist of net income, plus depreciation and amortization, plus the change in deferred income taxes, plus other non-cash items, plus changes in working capital, less investment in film assets, plus other changes in operating assets and liabilities. Cash used in investing activities includes capital expenditures, acquisitions and other cash used in investing activities. Management views free cash flow, a non-GAAP measure, as a measure of the Company's after-tax cash flow available to reduce debt, add to cash balances, and fund other financing activities. Free cash flow does not represent residual cash flow available for discretionary expenditures. A reconciliation of cash provided by operating activities to free cash flow is presented on a subsequent slide of this earnings presentation.

Return on Invested Capital ("ROIC") is not defined under U.S. generally accepted accounting principles. Therefore, ROIC should not be considered a substitute for other measures prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines ROIC as earnings before interest after taxes (before non-controlling interests) divided by total invested capital (total equity plus total debt less goodwill and other intangible assets). The Company believes ROIC is meaningful to investors as it focuses on shareholder value creation. A reconciliation of ROIC is presented on a subsequent slide of this earnings presentation.

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Primary Reporting Groups

The Company has four primary reporting groups identified by nature of product sold or service provided: (1) Network Business, representing variable revenue generated by box-office results and which includes the reportable segments of IMAX DMR and contingent rent from the JRSAs and IMAX systems segments; (2) Theater Business, representing revenue generated by the sale and installation of theater systems and maintenance services, primarily related to the IMAX Systems and Theater System Maintenance reportable segments, and also includes fixed hybrid revenues and upfront installation costs from the JRSA segment;

1. New Business, which includes home entertainment, and other new business initiatives that are in the development,start-up and/or wind-up phases, and (4) Other; which includes the film post-production and distribution segments and certain IMAX theaters that the Company owns and operates, camera rentals and other miscellaneous items.

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Q4 2019 Non-GAAP Financial Reconciliation - Adj. Earnings Per Share

$ in Millions, Except EPS Data

		Three Months Ended			Three Months Ended
		December 31, 2019			December 31, 2018
		Net Income			Diluted EPS			Net Income			Diluted EPS
Reported net income	$	21,352	$	0.35	$	3,771	$	0.06
Adjustments:					-
Stock-based compensation		5,914			0.10			5,046			0.08
Exit costs, restructuring charges and associated impairments		-			-			8,384			0.13
Legal arbitration award		-			-			4,237			0.07
Executive transition costs		-			-			2,994			0.05
Change in fair value of equity investment		(2,026)			(0.03)			-			-
Impact of enactment of U.S. Tax Act		-			-			-			-
Tax impact on items listed above		(1,095)			(0.02)			(4,586)			(0.07)
Adjusted net income		24,145			0.40			19,846			0.32
Net income attributable to non-controlling interests (1)		(3,181)			(0.05)			(2,077)			(0.04)
Stock-based compensation (net of tax of less than
$0.1 million and less than $0.1 million, respectively)(1)		(112)			(0.01)			(115)			-
Exit costs, restructuring charges and associated impairments (net of tax of $nil and
$0.4 million, respectively) (1)		-			-			(1,262)			(0.02)
Change in fair value of equity investment		617			0.01			-			-
Adjusted net income attributable to common shareholders	$	21,469		$	0.35		$	16,392		$	0.26
Weighted average diluted shares outstanding					61,542						62,127

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

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FY 2019 Non-GAAP Financial Reconciliation - Adj. Earnings Per Share

$ in Millions, Except EPS Data

		12 Months Ended			12 Months Ended
		December 31, 2019			December 31, 2018
		Net Income			Diluted EPS			Net Income			Diluted EPS
Reported net income	$	58,571	$	0.95	$	33,595	$	0.53
Adjustments:
Stock-based compensation		22,830			0.37			22,211			0.35
Exit costs, restructuring charges and associated impairments		850			0.01			9,542			0.15
Legal arbitration award		-			-			11,737			0.19
Executive transition costs		-			-			2,994			0.05
Change in fair value of equity investment		517			0.01			-			-
Impact of enactmnet of U.S Tax Cut and Jobs Act		-			-			-			-
Tax impact on items listed above		(5,614)			(0.09)			(9,873)			(0.16)
Adjusted net income		77,154			1.25			70,206			1.11
Net income attributable to non-controlling interests (1)		(11,705)			(0.19)			(10,751)			(0.17)
Stock-based compensation (net of tax of $0.1 million and
$0.1 million, respectively) (1)		(480)			(0.01)			(394)			(0.01)
Exit costs, restructuring charges and associated impairments (net of tax of $nil and $0.4
million, respectively) (1)		-			-			(1,262)			(0.02)
Change in fair value of equity investment		(184)			-			-			-
Adjusted net income attributable to common shareholders	$	64,785	$	1.05	$	57,799	$	0.91
Weighted average diluted shares outstanding					61,489						63,207

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

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2019 Non-GAAP Financial Reconciliation - Adj. EBITDA

$ in Millions

Three Months Ended		Three Months Ended		12 Months Ended		12 Months Ended
December 31, 2019		December 31, 2018		December 31, 2019(1)		December 31, 2018(1)

Net income	$
Add (subtract):
Provision for income taxes
Interest expense, net of interest income
Depreciation and amortization, including film asset amortization
EBITDA	$
Stock and other non-cash compensation
Change in fair value of equity investment
Write-downs, net of recoveries including asset impairments and
receivable provisions
Exit costs, restructing charges and associated impairments
Legal arbitration award
Executive transition costs
(Income) loss from equity accounted investments
Adjusted EBITDA before non-controlling interests	$
Adjusted EBITDA attributable to non-controlling interests (2)
Adjusted EBITDA per Credit Facility	$
Adjusted revenues attributable to common shareholders (3)	$
Adjusted EBITDA margin
_____________

21,352	$	3,771	$	58,571	$	33,595
-
4,782			(22)			16,768			9,518
381			(110)			423			1,072
17,987			15,453			63,487			57,437
44,502	$	19,092	$	139,249	$	101,622
6,173			5,483			23,570			23,723
(2,026)			-			517			-
3,822			2,797			6,806			5,338
-			8,384			850			9,542
-			4,237			-			11,737
-			2,994			-			2,994
(59)			(15)			(3)			492
52,412	$	42,972	$	170,989	$	155,448
(5,457)			(6,593)			(21,661)			(22,220)
46,955		$	36,379		$	149,328		$	133,228
112,635		$	97,573		$	358,053		$	336,723
41.7	%	37.3	%	41.7	%	39.6	%

1. Senior Secured Net Leverage Ratio calculated using twelve months ended Adjusted EBIT DA per Credit Facility.
2. T he Adjusted EBIT DA per Credit Facility calculation specified for purpose of the minimum Adjusted EBIT DA covenant excludes the reduction in Adjusted EBIT DA from the Company'snon-controlling interests.

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2019 Free Cash Flow Reconciliation and Return on Invested Capital

$ in Millions

Free Cash Flow

		Three Months Ended			12 Months Ended
		December 31, 2019			December 31, 2019
Net cash provided by operating activities	$	23,119	$	90,376
Net cash used in investing activities		(12,340)			(65,994)
Free cash flow	$	10,779	$	24,382

Return on Invested Capital

Twelve Months Ended

December 31,

		2019			2018
Income from operations	$	77,278	$	45,176
Provision for income taxes		(16,768)			(9,518)
EBIAT	$	60,510	$	35,658
Total shareholders' equity	$	637,187	$	592,918
Total bank indebtedness		18,229			37,753
Less: Goodwill		39,027			39,027
Less: Other intangible assets		30,347			34,095
Total Invested Capital	$	586,042	$	557,549
Return on Invested Capital (Non-GAAP measure)		10.33%			6.40%

F Y 2 0 1 9 F I N A N C I A L R E S U L T S	*	26