Apollo 13: The IMAX Experience

IMAX Corporation 2001 Annual Report The IMAX® brand is growing exponentially as successful IMAX In 2001, new IMAX theatres opened in South Africa, Canada, England, Germany, Poland, Northern Ireland, theatres are launched India, the USA and China. in new countries

Shanghai Science & Technology , the location of two new IMAX theatres. Message to Shareholders

2001 was a year of both significant chal- Even more important is our breakthrough lenges and important achievements, as we IMAX® Digital Re-mastering™ (IMAX® took major steps to reposition IMAX for DMR™) technology that allows the re- future growth and profit. While the past mastering of 35mm live-action films into year was difficult from a financial perspec- IMAX’s 15/70 format at a moderate cost. tive, we accomplished a number of strategic This opens the door to Hollywood’s massive objectives – including reducing our cost library of films for IMAX theatres, and we structure, retiring a significant portion of believe it will have a dramatic impact on our debt, improving the business model for our business going forward. IMAX theatres by reducing their operating costs and, most importantly, developing a A New Technology Will Bring key technology that will make IMAX® Hollywood Films to IMAX Theatres theatres a new release window for Holly- The development of our new IMAX DMR wood films. All of this positions us to deliver film conversion technology will have a on our overriding goal of returning IMAX profound impact on our business. IMAX to profitability and preparing the Company could become a major distribution channel for future growth. for a virtually unlimited number of success- 2001 was the year we firmly established ful commercial films ranging from well- access to mainstream commercial films, a known and well-loved classics such as E.T., key business-building goal that has been or Titanic to today’s event films like a major strategic priority for IMAX since Lord of the Rings, Harry Potter or Attack of the the mid-1990s. Never in the 30-year-plus Clones, thereby turning IMAX theatres into history of the Company has our film line-up the place to see “event” Hollywood films. been as strong as it is today; never before Just as the development of home video, have we seen such growth in the number pay cable, satellite programming and pay- and quality of films for IMAX theatres. per-view has created important new outlets New Technology

Whether it’s a specialized re-release IMAX screen. The image was fuzzy, of a classic original or a simultaneous washed-out and only filled half of the day-and-date release of a new event giant IMAX screen. IMAX’s DMR tech- film in 35mm and IMAX theatres, this nology can now take Hollywood films ground-breaking technology will give and make them every bit as big, sharp Hollywood a new outlet to reach audi- and beautiful as a classic IMAX film. HIGHLIGHTS Apollo Makes Giant Leap ences, and potentially revolutionize IMAX unveiled its plans for Apollo 13, At the heart of IMAX ® Digital the way people see first-run films. The first film to be transformed by the first live-action movie to be digitally Re-masteringTM (IMAX® DMRTM) is the IMAX DMR process is Universal’s re-mastered into IMAX’s 15/70 format a patent-pending technology that In recent years, some people believed quintessential space adventure, using the new IMAX DMR system. Apollo 13: will enable IMAX to reach into Holly- The IMAX Experience will be distributed by they were seeing Hollywood films Apollo 13, produced by Imagine IMAX in the summer exclusively to IMAX theatres throughout the world. The announce- wood’s massive library of new and that had been converted for IMAX Entertainment, directed by Ron ment was made by the film’s star, , director and producer old 35mm films, thereby turning theatres. They were not. What they Howard and starring Tom Hanks. Brian Grazer, president of distribution IMAX theatres into the place to see were seeing was a poor cousin: It will be released to IMAX theatres Nikki Rocco and IMAX co-CEOs Richard L. Gelfond and “event” Hollywood films. Bradley J. Wechsler. simply a 35mm film shown on an in August 2002. Message to Shareholders

IMAX’s first 3D space film, SPACE STATION, is a breathtaking experience. Narrated by Tom Cruise, for film, IMAX DMR should help IMAX The year began strongly with the suc- SPACE STATION has more advance bookings become another important distribution cessful run of The Walt Disney Company’s than any film in IMAX’s history. channel for Hollywood films. All of these Beauty and the Beast, further confirmation outlets have provided Hollywood studios of the power of the IMAX brand to draw with significant new revenue streams, creat- and sustain commercial audiences. In 2002, ing entire industries and multi-billion-dollar Disney will release a total of four films: APOLLO 13: THE IMAX EXPERIENCE is the , from companies in their wake. Hence, it is our Beauty and the Beast, Ultimate X, filmed first Hollywood live-action movie to be digitally Academy Award-winning director belief that the introduction of mainstream during the X Games last summer in re-mastered for release to the IMAX theatre network. in his first IMAX 3D theatre network project, Hollywood films to the IMAX theatre Philadelphia for release in May, Treasure “IMAX has truly redefined the experience of movie- captures events that shook the world – the sinking network should translate into significant Planet, Disney’s big holiday animated feature, going,” says Ron Howard, director of Apollo 13. of the ships Titanic and Bismarck. new theatre signings, which would drive scheduled to be released simultaneously both upfront and recurring revenues. in both IMAX and regular theatres, and The first film to be transformed by , Disney’s most successful IMAX DMR is Universal Studios’ classic animated feature ever. space adventure, Apollo 13. A visually Following the release of Beauty and the stunning film based on actual events, Beast, one of the year’s most highly antici- 2002: A Year of Film Firsts Apollo 13 is produced by Imagine Enter- pated events is the opening of IMAX’s first tainment, directed by Ron Howard and 3D space film, SPACE STATION. Narrated by stars Tom Hanks. It will be re-released Tom Cruise, filmed by the astronauts them- as Apollo 13: The IMAX Experience in the selves and documenting the construction ULTIMATE X, the first Walt Disney Motion SANTA VS. THE SNOWMAN is the first summer of 2002, and is the culmination of the International Space Station, the film Pictures live-action IMAX film, goes to IMAX 3D animated film for producer/animator of an important strategic initiative and is enjoying the most successful advance extraordinary lengths to immerse Steve Oedekerk. The producer of the Oscar®- an extensive R&D program. bookings in IMAX’s history, with commit- audiences in what it takes to perform nominated Jimmy Neutron will be releasing this ments from more than 100 IMAX theatres. these daredevil feats. special family film in 3D for the holidays. 2002: The Return to Growth As mentioned earlier, the end of the As we enter 2002 we have lowered our summer shall see the release of Apollo 13: cost structure, many of our commercial The IMAX Experience, which will introduce partners have emerged from their reorgani- the breadth and power of the IMAX DMR zation processes on solid financial footing, conversion process. breaks new ground for Walt Disney Motion Pictures and the 2002 film slate for IMAX theatres Also due out in 2002 is Titanic director and the IMAX theatre network as the has never been better. James Cameron’s Ghosts of the Abyss and first day-and-date release of a film to both 35mm and IMAX venues.

Warner DVDs Roger Ebert on IMAX

In June 2001, Warner Brothers “As the average American movie screen Home Video commenced grows smaller and smaller, as palaces are shipping IMAX home videos phased out for multiplexes, why isn’t IMAX the under a joint agreement with the Company. To natural home for the great Hollywood epics?” date, seven titles have been released and the Roger Ebert, Chicago Sun-Times program has exceeded expectations. Two titles, Blue Planet and T-REX: Back to the Cretaceous, have each shipped in excess of 100,000 units. Message to Shareholders

Santa vs. the Snowman, created by Steve Subordinated Notes due April 1, 2003 at an Oedekerk, the producer of the Oscar®- average cost in cash and shares of less than Theatre Growth nominated Jimmy Neutron, which will be 24% of face value. This reduces our interest released in 3D during the holidays. expense by about $5 million annually and Besides these high-profile offerings, means IMAX does not face significant prin- The IMAX theatre network continued to grow in 2001. New IMAX theatres there will be a very strong line-up of tradi- cipal repayments until December 2005. opened in South Africa, Germany and Poland, and our first theatres opened tional IMAX films, including Kilimanjaro We divested the Company of Digital Pro- in Northern Ireland, India and mainland China. In China, IMAX opened two from Everest director David Breashears, jection International (DPI) to further reduce theatres at Shanghai Science & Technology Museum, the largest social and Top Speed from large-format veterans corporate costs and insulate IMAX from its cultural landmark in Shanghai. India and China have cultures with very exten- MacGillivray Freeman and Lewis & Clark losses. Initially, we acquired DPI to gain sive movie-going histories, and the introduction of IMAX theatres to these from National Geographic. access to key technology to develop a digital regions should help to open up these previously untapped markets. IMAX system and to participate in the high- Financial Results end market. As part of the In North America, IMAX opened its first 3D theatre in Boston at the acclaimed While we are disappointed by our reported sale, we retained certain key rights and New England Aquarium, and we completed our first installation for National financial results for 2001, these results technologies of DPI to allow us to participate Amusements at its flagship multiplex “The Bridge” on Los Angeles’ west side. reflect the challenging industry environment in the further development of these tech- that we operated in and include a signifi- nologies and, if business conditions improve The Company believes the introduction of IMAX DMR technology will cant number of non-cash charges related to for DPI, to be a partner in its future success. exponentially grow the number of films available to our theatres and drive our completed restructuring process, which To enhance the bottom line for IMAX additional leases of IMAX systems. was designed to stabilize and rationalize theatres, we introduced a lower-cost main- IMAX’s business in the midst of a deterior- tenance plan and signed an agreement with ating exhibition industry environment. Technicolor that will significantly reduce the As part of this process in 2001, we cost of film prints to IMAX theatres. These reduced head counts and consolidated our savings will drop directly to the theatre’s manufacturing operations in our Missis- bottom line. sauga facility, cutting about $14 million in In the last quarter of 2001, IMAX signed annual operating expenses. We took the contracts for eight theatre systems, com- necessary charges to clean up our balance pared to only four in the first nine months sheet while aggressively collecting receiv- of 2001 and three in the last quarter of ables. We retired approximately $90 million 2000. Three of the new systems were for of the $100 million 5.75% Convertible commercial multiplexes and five were in

CLOCKWISE FROM TOP RIGHT: SIMONS IMAX THEATRE, NEW ENGLAND AQUARIUM, BOSTON; PANASONIC IMAX THEATRE, KRAKOW; SHERIDAN IMAX CINEMA, ODYSSEY PAVILION, BELFAST; IMAX THEATRE AT THE BRIDGE, LOS ANGELES; SHANGHAI SCIENCE & TECHNOLOGY MUSEUM, SHANGHAI

Smithsonian Upgrade Cruise into SPACE

In January 2002, IMAX announced that Tom Cruise has gone the Smithsonian Institution had expanded beyond global, agreeing its commitment to The IMAX Experience, to narrate IMAX’s adding a third IMAX theatre to be located SPACE STATION. “The at the National Air and Space Museum’s minute I saw the amazing new Steven F. Udvar-Hazy Center in Dulles, 3D footage shot by the astronauts in space, I knew Virginia and upgrading its first IMAX theatre I had to be involved with this very special film,” at the National Air and Space Museum Cruise said. “My family and I have enjoyed IMAX to IMAX 3D. movies for many years.” Message to Shareholders Corporate Information Directors Officers Credits

▲ Share Listing Richard L. Gelfond Richard L. Gelfond DESIGN Trading Symbol Co-Chairman and Co-CEO Co-Chairman and Co-CEO Atlanta Visual Communications Nasdaq: IMAX TSE: IMX Bradley J. Wechsler * Bradley J. Wechsler COVER North America, including a theatre with will establish it as an important release Co-Chairman and Co-CEO Co-Chairman and Co-CEO Universal Studios National Amusements – its first-ever IMAX window for major Hollywood films. That, Corporate Headquarters IMAX Corporation Kenneth G. Copland Francis T. Joyce PHOTOGRAPHY theatre, at its state-of-the-art 17-screen in turn, is the key lever in jump-starting 2525 Speakman Drive Chairman of KGC Ltd. Chief Financial Officer Apollo 13 cinema and entertainment complex in our ability to lease new systems. Sheridan Science and Universal Studios Los Angeles. In addition, IT International Thirty-two years after its introduction, Technology Park J. Trevor Eyton Greg Foster Shanghai Science Mississauga, Ontario Director of President, & Technology Museum contracted for two more theatres in Europe, the IMAX film medium remains the most L5K 1B1 Brascan Corporation Filmed Entertainment Eric Charbonneau/Berliner Studios and we received a commitment from the powerful movie experience in the world. Ron Batzdorff/Universal Studios + • Smithsonian Institution for its third IMAX The Company’s first permanent theatre, Telephone Garth M. Girvan * Robert D. Lister Smithsonian Institution (905) 403-6500 Partner of McCarthy Tétrault Executive Vice President, Lockheed Martin Corporation theatre, as well as an upgrade to a 3D sys- which opened in in 1971, is still Fax Business & Legal Affairs and National Aeronautics tem at its National Air and Space Museum. in operation. The IMAX brand is respected (905) 403-6450 Ellis B. Jones General Counsel and Space Administration E-mail Chief Executive Officer Roger Ebert and loved by the more than 70 million info@.com of Wasserstein & Co., L.P. Mary Pat Ryan The Bell X-1 “Glamorous Glennis” Summary theatre-goers who each year experience Website Executive Vice President, National Air and Space 2001 was a watershed year for IMAX. We an IMAX presentation. www.imax.com G. Edmund King * Worldwide Marketing Museum/Smithsonian Institution Deputy Chairman and Sandy Schaeffer/MAI solidified our financial position, reduced We appreciate the dedication of IMAX a director of McCarvill Brian Bonnick Global Photo Associates Inc. Transfer Agents Corporation Senior Vice President, Jonathan Kannair our costs and created important re-purpos- employees, our partners’ support, and Mellon Investor Services, L.L.C. Technology Doug Mazell ing technology that should help establish the enthusiasm of millions of theatre-goers 85 Challenger Road Murray B. Koffler + Sean Gallup Overpeck Center IMAX theatres as a new distribution plat- around the world. Thank you for your Honorary Chairman of David B. Keighley Sheridan IMAX Cinema, Ridgefield Park, NJ 07660 Shoppers Drug Mart Senior Vice President and Odyssey Pavilion, Belfast form for both live-action and animated continued loyalty and confidence. Website President, David Keighley Hollywood films. www.melloninvestorservices.com Sam Reisman Productions 70MM Inc. FILM While our reported financial results March, 2002 Chairman and Chief Executive Moveable Inc. Computershare Trust Officer of The Rose Corporation Larry O’Reilly for 2001 were very disappointing, they do Company of Canada Senior Vice President, PRINTING 100 University Avenue reflect the unique economic climate and Marc A. Utay • Theatre Development and Howell Printing Company Ltd. 9th Floor challenges of 2001 which are largely behind Richard L. Gelfond Bradley J. Wechsler Managing Partner of Film Distribution Toronto, Ontario M5J 2Y1 Clarion Capital Partners us. Today, IMAX has developed the tools Co-Chairman and Co-Chairman and E-mail G. Mary Ruby [email protected] to achieve the scale and create the kind Co-Chief Executive Co-Chief Executive Townsend Ziebold + ▲ Senior Vice President, Website Non-Executive Legal Affairs and of impact in the exhibition industry that Officer Officer www.computershare.com Chairman of the Board, Corporate Secretary President of the Venture Investor Relations Capital Practice of Mary C. Sullivan Stephen G. Abraham Wasserstein & Co., L.P. Senior Vice President, (212) 821-0140 Human Resources and (Analysts) Administration

Auditors * Member of the Audit Committee Mark Welton PricewaterhouseCoopers + Member of the Compensation Senior Vice President, Committee Business Affairs Annual Meeting Date ▲ Member of the Nominating Committee June 5, 2002 •Member of the Option Committee Kathryn A. Gamble Vice President, Finance and Controller

Edward MacNeil Vice President, Finance

Richard L. Gelfond Co-Chairman and Co-Chief Executive Officer Richard L. Gelfond has been Co-Chairman of the Company since June 1999 and Co-Chief Executive Officer since May 1996. From March 1994 to June 1999, SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION Mr. Gelfond served as Vice Chairman of the Corporation. In addition, Mr. Gelfond serves on the Certain statements included herein may constitute “forward-looking statements” within the meaning of relevant United States and Canadian law. These boards of Mainframe Entertainment, Inc. and several private and philanthropic entities. forward-looking statements include, but are not limited to, references to future capital expenditures (including the amount and nature thereof), business strategies and measures to implement strategies, competitive strengths, goals, expansion and growth of its business and operations, plans and references to the future success of IMAX Corporation together with its wholly owned subsidiaries (the “Company”). 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, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by the Company; competitive actions Bradley J. Wechsler Co-Chairman and Co-Chief Executive Officer by other companies; conditions in the out-of-home entertainment industry; changes in laws or regulations; 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 Bradley J. Wechsler has been Chairman or Co-Chairman of the Company since March governments and laws and policies of the United States and Canada; the potential impact of increased competition in the markets the Company operates 1994 and Co-Chief Executive Officer with Mr. Gelfond since May 1996. Mr. Wechsler within; and other factors, many of which are beyond the control of the Company. Consequently, all of the forward-looking statements made herein are serves on the boards of Mainframe Entertainment, Inc., NYU Hospital, the Kernochan Center for Law, qualified by these cautionary statements, and actual results or developments anticipated by the Company may not be realized, and even if substantially Media and the Arts, and the American Museum of the Moving Image. 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. Movies Reimagined by IMAX TM

Revolutionizing the way we see live-action Hollywood movies.