Company Overview Founded in 1967 Headquartered in Mississauga, Ontario 400+ IMAX theatres in over 40 countries A leader in the creation and production of high-

end rides, such as IMAX Simulator Rides Most revenue is generated from the sale or long-

term lease of IMAX theatre systems, maintenance and warranty services, installation of theatre systems, and film distribution

Theatres

2004 2005 2006 2007 2008 20090

50

100

150

200

250

300

350

400

450

Number of IMAX Theatres Worldwide

Number of IMAX Theatres Worldwide

Theatres

2004 2005 2006 2007 2008 20090

50

100

150

200

250

300

350

400

450

Rest of the WorldChinaJapanEuropeMexicoUSCanada

Prior to IMAX the Industry standard for movie projection - CinemaScope and VistaVision

◦ widened the image projected from 35 mm film

◦ multiple large and awkward projectors were used to show a single movie

Traditional Film Technologies

Where the West Was Won

1960’s-1970’s

•Expo ’67 - Montreal•Expo ‘70 - Osaka•Ontario Place's Cinesphere

1980’s

• Competition grows• Showscan• Iwerks

1990’s

• Expo ‘90• IMAX bought by WGIM Corp for ~$100 million• Goes public - $13.50/share

• An Oscar!

2000’s

• Slowing North American entertainment market

• Shares drop by 70%

• 12 IMAX customers went bankrupt

Timeline

IMAX Share Prices

Politics◦ Films and content are highly regulated◦ Varying degrees of censorship and periodic bans

on directors who have offended party bosses◦ Only 20 foreign films are allowed each year

Culture – importance of relationships◦ CEO Gelfond began to travel to China 12 years

ago

Factors affecting IMAX’s expansion in China

• 2002– IMAX theatre attendance averaged 60% of

capacity (4 times the 15% required to be successful)

–Often sold out at 9 or 10 am• 2009–WTO orders Beijing to stop forcing owners of

copyrighted materials to deal only with a single government controlled distribution company

• IMAX films difficult to copy

China’s Potential

2001◦ First IMAX projection

system installed in China

2004 ◦ First commercially-

operated IMAX theatre in China

2007◦ MPX theatre at

Suzhou Science and Cultural Art Center

June, 2009◦ IMAX announces a three-film deal with Huayi

Brothers First major Chinese film studio to list on a stock

exchange Voted #42 Most Innovative Company by Fast

Company Magazine (Facebook #1, Amazon #2, Apple #3, Microsoft #48, Twitter #50)

Licenses technology to developers◦ Upfront fee and royalties and between 10-15% of

box office revenue

“The IMAX theatre network is expanding very rapidly in China and we continue to see heavy interest across the country – from commercial theatre chains, property developers and institutions”◦ Gelfond and Wechsler, 2005

Year Number

2006 10

2007 14

2008 18

2009 22

2010 29?

2012 42?

IMAX Theatres in China