Welcome to IMAX Corporation’s first quarter earnings conference call. Today's call is being recorded. At this time, I would like to turn the conference over to Ms. Heather Anthony. Please go ahead, Ms. Anthony.

Good morning and thanks everyone for joining us on today's first quarter 2010 conference call. Apologies for the late start. We had some technical difficulties. Joining me is our CEO, Rich Gelfond, and our CFO, Joe Sparacio. Also with us are our Senior EVP and General Counsel Rob Lister. Before we begin, let me remind you the following information regarding forward-looking statements. Our comments and answers to your answers on this call may include statements that are forward looking in that they pertain to future results or outcomes. Actual future results or occurrences may differ materially from these forward-looking statements. Please refer to our SEC filings for a more detailed discussion of some of the factors that could affect our future sales or future results and outcomes. During today's call references may be made to certain non-GAAP financial measures as defined by Reg G of the Securities and Exchange Commission. A discussion of management’s use of these measures and the definition of these measures are contained in this morning’s press release. The full text of our first quarter release along with supporting financial tables is available on our web site, www.imax.com. Today's conference call is being web cast in its entirety on our web site. Today, Rich will review highlights of the first quarter, our outlook for future growth, the film slate and our general tone of business. Joe will then review our Q1 financial results in more detail. With that let me now turn the call over to Rich.

Thanks Heather. We are very pleased with our first quarter 2010 financial results. Our performance highlights the dynamic nature of our business model and what can happen when compelling film content is combined with our growing theater network. While we recognize that a film like Avatar is not an annual event it is important to remember that we would not have been able to capitalize on this cultural phenomenon were it not for our transition to digital and the implementation of our new financial model which accelerated the growth of our network, ensured greater box office impact of Hollywood films at IMAX and most importantly established recurring revenues. This model is still very much in its early stages but it is clear that this approach is resulting in significantly stronger operating performance. On our last call we spoke about Avatar and the halo effect that it was having on different areas of our business. The first area was of course its financial benefits which is certainly evident in our first quarter results as are the results of Alice in Wonderland which also is a large contributor to our first quarter. Adjusted EBITDA increased to a record $42 million for the quarter compared to last year’s first quarter adjusted EBITD of $7 million. Adjusted EBITDA for the trailing 12 months ended March 31 was $93.4 million compared to $15.1 million for the same period last year. Total revenue increased 120% to $72.8 million from $33.1 million last year. Adjusted EPS increased to $0.53 per diluted share compared to a loss of $0.06 per share on the same basis last year. Reported EPS increased to $0.40 per diluted share from a loss of $0.06 last year and we reduced net debt down to $16.5 million compared to $161 million last year and…

Thanks Rich. As Rich mentioned we are very pleased with our first quarter results. Adjusted first quarter net income increased to $35.3 million or $0.53 per share compared to an adjusted net loss of $2.6 million or a loss of $0.06 per share on the same basis last year. Adjusted net income excludes the impact of variable stock compensation for the quarter which was an $8.7 million charge this year’s first quarter as compared to a charge of less than $100,000 in last year’s first quarter which I will review in more detail during my comments on SG&A. Reported net income increased to $26.6 million or $0.40 per diluted share compared to a loss of $2.6 million or $0.06 per share last year. Total revenue for the quarter increased 120% to a record $72.8 million compared to $33.1 million in last year’s period. Looking at our key business segments; revenue from our joint venture relationships increased nearly nine-fold to $18.9 million from $1.9 million in last year’s first quarter. We installed six JV systems in the quarter including one digital upgrade. The weighted average number of JVs in operation during the first quarter was 119 and we ended the quarter with 122 JVs in operation. Joint venture theaters open for the full first quarter of 2010 generated gross box office per screen averages of approximately $665,000 compared to $152,000 last year. Total film revenue increased 275% to $29.3 million in the quarter compared to $7.8 million in the first quarter of 2009. The primary driver of the increase was the five-fold increase in our DMR business reflecting the box office performance of Avatar and Alice and our overall stronger first quarter film slate compared to the prior year. DMR revenue as a percentage of gross box office was 10.1% in…

Thanks Joe. To quickly wrap it up we are very pleased with our first quarter financial results which are a reflection of what can happen in our business when you combine compelling titles with our growing theater network. While we are pleased with the financial results of Avatar and Alice, the movies are generating longer term dividends for us; most notably future signings as well as securing future titles. We are pleased with the signing activity we are experiencing here in the early part of 2010 particularly in international territories some of which are brand new and which overall represents our biggest opportunity for network expansion. We are well positioned for long-term growth and look forward to updating you on quarters to come. With that we would like to open it up to questions.

(Operator Instructions) The first question comes from the line of Richard Ingrassia – Roth Capital Partners. Richard Ingrassia – Roth Capital Partners: Pretty dramatic windfall Avatar brought to the company here. I suppose no one should be surprised you are plowing some of that cash into the business. Can you say just a little bit more about what kind of investments you would consider or perhaps have already made with what you have gotten from Avatar?

For example, we announced on the last call we are launching this portable theater which is an inflatable structure; very, very large. You could use it for a variety of purposes whether it would be special screenings of Aftershock in rural China, whether it will be a theater at Comic-Con, the comic book convention which has become key to the movie industry in San Diego or whether it is a premier in Central Park or whether it is a showing of Avatar in India. The IRRs on that at least model out very, very high and are certainly consistent with the IRRs on our regular theater deals. That will be one example where we are investing in that and as a matter of fact on my recent trip I discovered there was a lot of interest in that. So that would be a supplement to the way we are growing the company. Another example would be in our cable channel which we have talked about before where we are going to partner with Sony and Discovery. Other example is some day you may see an IMAX 3-D very, very high end home entertainment system. Things that are very consistent with our brand that provide kind of this awe inspiring entertainment, emotional connection with audiences and give us new places to go with our brand than we have gone before. Richard Ingrassia – Roth Capital Partners: Say a little more about the revenue share on DMR in the quarter. I think it is important to explain how this percentage can vary by release and how it can be impacted by one-time items and some of the stuff Joe mentioned. Maybe address your expected DMR revenue share on the Warner deal announced yesterday.

Let me start with that. The Warner deal is completely consistent with our revenue share historically with Warner Bros. There was a misstated analyst report out. Certainly they didn’t call the company so I don’t know where they got their information but let me be clear it is on the same terms as the past deals we have done with Warner. There is a little tweaking around the edges because we are in this transition from film to digital over the next couple of years. Just to give you a little perspective on that, we have 28 MPXs that haven’t been upgraded yet so we are pretty far through that transition. Some of the print issues, IMAX has the election…at our election to fund prints and recoup them on some formula. So the economics are identical. End of story. We have said before that film revenue will vary DMR from 10-15% depending on the specific film. In the case of Avatar it was the lower end of that range and there were really a couple of key reasons for that. One was China was kind of crazy on the revenue side. We did I think $24 million on 13 theaters in China. In China because of the take of China film and the way distribution works there we get a lower percentage of the fee. A second thing was the deal is quite anomalous because everyone knew the numbers might be very high so at some level we offered some kind of a print rebate for a portion of the cost of the prints which were $60,000 each. So again since the network is converting completely to digital and this is a homerun provision the results were somewhat skewed there. I will remind you in the second quarter last year our percentage was 14%. I think as a matter of fact I should make this clear, on the Warner Bros. deal and other deals we are doing some quarters it may be higher or it may be lower than the midpoint of that range.

Just to add on the point that was just made on the prints, normally when we fund prints you would see them down in cost of sales. This time because of the nature of the arrangement they were treated as an offset to revenue which skews your margin a little bit as well. Richard Ingrassia – Roth Capital Partners: Beyond the movies announced as locked, if you will, to their IMAX domestic release dates on the new Warner deal, give us some idea how the process would work if you are negotiating with Paramount, DreamWorks or Disney for a film in 2011 and Warner comes to you and says well we have this.

And who comes to us? I am sorry. Richard Ingrassia – Roth Capital Partners: Warner comes to you and is interested in a film in a slot in a similar timeframe.

The way the agreement works is five of the pictures are locked in by both of us as long as the release date is met. So Harry Potter [seven b] when it comes out if it comes out on that date that is it. Warner has that spot. It is five of the 20. The other 15 one way I think of it is kind of a letter of intent on both sides. That would mean to make this up if someone comes to us with a blockbuster movie for next May and Warner hasn’t yet green lit one of the movies that was supposed to go there we are going to do the blockbuster movie. If Warner has green lit the other movie we will sit down with Warner Bros. and say, “Hey, what is the release take going to be on that one? We have this other movie that we are working on.” We will try and work it out with them in some way but there is no commitment on either side to do it. It is a good jumping off point and I don’t want to be too long winded about it but I think one trend you will see is studios working together around release dates to accommodate the IMAX window. So obviously we have a lot of other pictures to talk about for 2011 that we haven’t released yet but I think it represents an attempt to work together with the studios to fit in as much as possible while respecting the studio’s rights. I think with Warner we are going to try and work with them on those titles to make it work.

The next question comes from the line of James Marsh – Piper Jaffray. James Marsh – Piper Jaffray : On the international side you mentioned you only have nine screens so far in Japan and it is the second largest box office market worldwide. Help us understand how you see that market evolving over the next few months and years. I think it is kind of interesting in most markets you seem to go with the market leaders with the exhibitors. Here you are going with kind of one of the upstarts I guess in my view. Maybe you could talk a little bit about that.

As I think you know I was just there last week and I spent time not only with our client but with virtually all the other major exhibitors in Japan. And Japan, as I think most of you know, is a country that is somewhat slow to change. So there wasn’t a multiplex built in Japan until Virgin built the first multiplexes. Then once the first multiplexes succeeded, Virgin as a matter of fact got acquired in Japan, and there are more multiplexes still. I think we are seeing somewhat of a similar phenomenon. Tokyu opened these four theaters and the results are kind of off the charts positive. For example, one of the Tokyu theaters in Kawasaki was open less than a year and it has done over $6.5 million to date. It is just a crazy number in a retrofit theater. So Tokyu obviously knows its results and we have a good relationship with them. They wanted to protect themselves in certain sites and locations and we agreed to do that with them because they were first and they were a loyal customer. With that said, the other exhibitors are aware of what the Tokyu results are and I would be surprised in time if you didn’t see activity coming from them but I think it is a more measured place than some other countries. James Marsh – Piper Jaffray : Two quick questions on Iron Man. One, the funding of the additional prints is that going to be the same accounting you had in the first quarter with DMRs?

No it won’t be. It will be our traditional accounting. James Marsh – Piper Jaffray : Related to that, do you plan to show additional show times of Iron Man II to try and equal demand?

As you know it is not our decision. It is the exhibitor’s decision. From what I have heard about the tracking of Iron Man and from people who have seen it I expect it to be if not a record, a near record kind of opening weekend. I am not talking about IMAX. I am talking about domestic kind of. I would be really surprised if the exhibitors didn’t go to extended show schedules. That is what I would expect.

The next question comes from the line of Marla Becker – Hudson Square Research. Marla Becker – Hudson Square Research : First of all, obviously you are getting a lot of interest now from Hollywood studios. When you are speaking to studios and when you are discussing the Warner deal do you talk about the potential for moving some of that content to the cable network down the road once the 3-D TV network is launched?

No. The biggest reason would be it would be premature. We still haven’t even finalized the deal. It is still in the letter of intent stage and until I expect to finalize the deal until it is done it is not done. I think we have partners so that is certainly something we wouldn’t do unilaterally. Marla Becker – Hudson Square Research : When you are discussing some of these film deals, there was such high demand for Avatar and for Alice that you did midnight showings. How much flexibility do you think you have now in terms of keeping a film free for longer than you pre-committed if there is increased demand like that? Are you seeing your flexibility going up?

I do. I will answer kind of in two ways. As part of this trip I was recently on, I was at Odeon in England and they were playing How to Train Your Dragon, Alice and Avatar all at the same time and they had gotten the studios to agree to that. I think internationally there is some history of that kind of cooperation. I think domestically you are starting to see we are playing Dragon now and as I think you know AMC was playing Avatar at midnight shows. Before that Disney was showing midnight shows of Alice in Wonderland. I think the studios have been much more open to it. I think they realize what goes around comes around so to the extent they are flexible someone else will be flexible for them. I was a little obtuse in my comments but I will try and make it clearer; when I said all the product in 2011 there will be some flexibility on scheduling I think what will happen is it is likely the studios will work together in some way in a more cooperative way so that maybe the exclusive period will be a little bit shorter but they will get shows during the next film and the studios do the same thing for them. Marla Becker – Hudson Square Research : You sort of already answered this but just to make sure I understood, the 3-D TV joint venture it is still at the [inaudible] stage. Have you and Sony and Discovery ironed out any more details since the last time you discussed this?

Yes we have absolutely ironed out a lot of details. If you asked me for my guess I think it is going to happen but until it is done and all the issues are resolved it is not done.

The next question comes from the line of Steve Frankel – Brigantine Advisors. Steve Frankel – Brigantine Advisors : I wonder if you might give us some more detail on the domestic deals you recently signed with regional players. How many screens are planned with those?

I think there are a total of three deals in the first quarter and those are sales type lease. There is no JVs there.

The one with Salt Lake City is one upgrade and two new theaters. Also a sales, sales type lease. Steve Frankel – Brigantine Advisors : Are there any plans to enter JVs with some of the larger regional players?

We are in discussions with some of the larger regional players about JVs as well as with our traditional partners about expanding their commitments certainly. Steve Frankel – Brigantine Advisors : That was going to be my next question. Where are you in discussions with AMC and Regal about backfilling in some of these zones with additional screens?

We are in discussions. Steve Frankel – Brigantine Advisors : Would you anticipate some kind of announcement between now and the end of the year?

Between now and the end of the year, yes I would anticipate some kind of announcement between now and the end of the year.

The next question comes from the line of Mark Argento – Craig Hallum Capital. Mark Argento – Craig Hallum Capital : Could you provide a little granularity, I know the guidance for the 40-45 JVs and 15-20 sales/sales leases, does that include the digital upgrades in those numbers?

No it does not.

To be clear, that is out of backlog. So we had 41 signings in the first quarter so obviously the guidance went up because of the additional signings went into backlog. We are not going to try and predict what we are going to sign and install during the year or during the quarter but given the pace of activity we hope it is more than that. Mark Argento – Craig Hallum Capital : You said you had 28 MPX systems you haven’t yet upgraded to digital. What would be the expectation there in terms of getting those upgraded?

Actually, obviously we operate on a budget. During the first quarter the amount of upgrades we signed as much higher than we had budgeted for the quarter and even this quarter I think we are ahead of budget also. So that is actually going pretty well. It is hard to predict exactly when it would happen but using the generic term, and I am sorry I am not trying to be evasive but I think relatively quickly you will see it happen. Mark Argento – Craig Hallum Capital : I am still trying to understand some of the technology issues. I know on some of the really big theaters you have is the digital quality not where it needs to be yet so they still have to remain film or is it to the point where you could theoretically cut them all over to digital if the capital is there and the time?

It is mostly a question of brightness that holds you back. You could do it now but what makes IMAX IMAX is all of these elements you combine and brightness is one of them. We are working on different ways to get the adequate brightness to do the really large screens and it is very hard to predict a date. Some of this is R&D but we would hope to be able to do that in the next 2-3 years. Mark Argento – Craig Hallum Capital : Some of these other line items in terms of revenues I know post-production was about $2.6 million. Theater operations you touched on earlier. Post-production is that for traditional institutional movies or is there something going on there?

Third party producers of film. So last year with the credit crunch a lot of productions kind of halted. This year things are back to a level of normalcy if you will. That business is very choppy and will vary from quarter-to-quarter. Mark Argento – Craig Hallum Capital : I know you mentioned the other category. Clearly you have been selling a lot more glasses. The typical margins around that are what, 50%? How should we think about that?

It really varies. I wouldn’t want to put a percentage on it.

The next question comes from the line of Jeff Blaeser – Morgan Joseph. Jeff Blaeser – Morgan Joseph: I know you don’t give guidance but can you give us a ballpark or some estimates for Q2 theater showings for some of your upcoming films? Iron Man, Shrek, Persia, Toy Story 3? Something to go with on a modeling basis?

I think we feel pretty good about our slate. One tool we use is the Hollywood Stock Exchange which predicts the first four weeks of box office. I think their guess is better. The way it works is internally we put together an ultimate and that is how we prepare our budget. As we said that is why we said How to Train Your Dragon was very much in line with our internal expectations. But so far to date we are ahead of our internal expectations because we didn’t expect to get continuing revenue from Alice and from Avatar particularly internationally. The way we look at it is we use Hollywood Stock Exchange as one tool. Obviously our film department makes their own predictions but I think predicting films is like predicting stocks. You can’t be perfect on it so I suggest you take your own stab at it. Jeff Blaeser – Morgan Joseph: I understand. You wouldn’t want to project movies because that is out of your control. I was thinking more in terms of IMAX theaters. I think Iron Man you said 250. How should we look at Shrek, Persia and Toy Story in terms of IMAX theater showings?

I think Shrek will be a similar number with pretty high penetration in the network. Toy Story is a shorter run. I am not sure and I don’t want to misspeak. Certainly there will be some film prints in there. I don’t know if it will be a full network but it will be a pretty robust run. Twilight I think will also be a fairly robust run. Prince of Persia is international only. That is a territory by territory basis and I just haven’t heard where Disney is at in the distribution pattern now so I don’t know. Jeff Blaeser – Morgan Joseph: I know it is early and you may not have any feel but any impact from the increased ticket prices in terms of revenue and maybe the concession portion you get on your end within the joint ventures?

It is really hard to say and as you said it is really early. In my gut I don’t feel one right now. We haven’t seen a big tail off in demand. As I said again we have only our first benchmark, one day from international markets which was in France. I think it will be very interesting, in 2-D a lot of people think of IMAX as 3-D but if you go back and you look at the 2009 film slate most of our movies were 2-D. In fact, Iron Man, Twilight and Inception are 2-D. I think we are in a territory where we are learning. I would be very surprised especially with the shorter runs. I think maybe if you had longer runs it might be more elastic, the price demand, but I think when you have these shorter windows that we have that people that want to see it in IMAX are going to go see it in IMAX but we will see. Jeff Blaeser – Morgan Joseph: If you have the joint venture gross profit for the quarter?

It is right in the press release in the back. $16.8 million in the quarter.

The next question comes from the line of Aravinda Galappatthige - Cormack Securities.

I just wanted to understand the digital upgrades a little better. On my count it is probably about another 140 non-digital commercial screens out there. You mentioned that MPX systems are about 30. How much of the overall film based systems do you think would digitize over time or is it only the MPX systems that are being upgraded right now?

Joe is looking at the numbers for you but while he is looking that up, many of the SRs are upgrading also, not only the MPXs. For those of you who haven’t been around long enough, in the film world we have three systems; GT, SR and MPX. The MPX being the multiplex retrofits. So as I said there is about 30 of those left. We are in the process of doing a number of the SRs and then it is really the GTs that are 2-3 years away. That is a little bit of a smaller problem than you think because those tend to be very large theaters with a lot of seats so they are very high grossing boxes. Think Sony Lincoln Square. Think the BFI in London. Think of Universal City Walk, the [Metrian]. So the studios are willing to provide prints there for a longer period of time because the grosses are so high in those theaters. Not to say it is not important to do that. We will get there but it is more important to get the more marginal grossing theaters converted over quicker.

I would say you have the 28 MPX units and those are certainly this would be appropriate. You also have 47 SRs which will be a subset of that which can be converted. Then we have 88 GTs and as Rich said many of them are not a problem. This really goes to the point that Rich mentioned earlier. That is a digital solution for those bigger theaters sometime in the future. The rest of the screens if you look at it are flat screens or domes which we really don’t have a solution for.

Those aren’t playing commercial products to be clear.

What is the average selling price you are getting for the digital upgrades and what is the rough margin you have been getting in Q1?

First of all before Joe answers that specifically we made a strategic decision to make low or no margin on our digital upgrades. The reason we did that is we wanted to preserve our DMR revenue stream and we wanted to accommodate the theater owner so they could continue to get prints when the studio was cutting back on providing prints to more marginal theaters. So that was our strategic decision which is one reason why the upgrades are going quicker.

Generally the cost of an upgrade is in the $350,000 range. That is pretty much where the sales price is targeted. Maybe a little higher or a little lower depending upon the age of the screen or the nature of the client. But the way to look at that is kind of a break-even business right now and that is why when we are giving guidance in terms of installations we pull those numbers out.

In terms of the JV market size I think we talked about it before on previous calls, you are looking at 1,000 screens as your initial target. I think if you throw in the backlog you are close to 500 commercial screens. Obviously 600 of the 1,000 is international. How much of that 600 do you think would be a reasonable JV target?

Very, very difficult to answer. I think you have to really do it on a country by country basis. A place like Japan I think you could do 50. Some of the European countries like England, France, Germany, Italy, Spain you probably could average 30 in each of those countries. I just think you have to go through like that. Maybe in a place like India you do something like we did in South America where you find a strategic partner and you do a broader deal where you get comfortable with the risk because you have a partner who has accountability outside of India. Those are the kinds of things we are thinking about. So if you want like a rough guess I would say there is probably a potential of about half of them but that would be just a wild guess. Or maybe more than that.

The next question comes from the line of Jim Goss – Barrington Research. Jim Goss – Barrington Research : You alluded earlier to the first DMR on an international film. I was wondering if over time you think you will have increasingly local regional titles in some of your foreign locations to fill in with some of the bigger blockbusters that come out of America? Also, regarding the 1,000 IMAX zones are you having any early stage rethinking of what that ought to be? Or do you think you need to pursue what you have and then revisit that idea? Then one other thing, I am sort of thinking if there winds up being an eventual fatigue of 3-D with people less willing to pay the premium IMAX would have less of a risk for that because it has something extra as a premium experience. As you pointed out a lot of them are in 2-D. I am wondering how you are looking at the whole concept for the theater industry and for IMAX specifically?

Good questions. In terms of the international DMR it is really a function of three things. First of all it is the territory and how dependent on the territory is it on U.S. box office versus local box office. So you take a country like Japan where 50% of the box office is Japanese and 50% is U.S. obviously that would be a market that would be more interesting than the U.K. where a much higher percentage of the box office is U.S. Second factor would be the theater count in that country. It is no accident we are doing it in China first because we have 27 theaters in China. So we have looked to do it in a market where we have fairly significant critical mass of theaters. Then the third thing would be kind of understanding the movies they make and how the distribution patterns work. Obviously a country like France where if you had a big enough market it might make sense to do it. If it was a love story of two people in a winery it might not be conducive to an IMAX experience versus more of an event type film. I think you have to blend those factors and figure out when and where you do it. I think if it works in China and we keep growing in local markets you will see more of that. Your second question about the 1,000 zones and reconsidering, to some extent internationally where we haven’t drawn the map we are giving some consideration. When we drew the zones we were in a film world and we thought there were 6-8 films a year rather than 14 films a year and we had a box office if you recall in our pro forma about 850,000 a…

A significant and more growing part of the IMAX audience is what we refer to as a fan-boy audience. That would be the audience that would go to see Matrix or Iron Man and Tron is certainly a much anticipated fan-boy movie. I think you can program in the later slots to that audience. I think it would work less well for family fare than it would work for the other ones. Regal and AMC have been really smart about how to program their theaters. They have really done a good job of taking the shelf space and maximizing it and I think they understand it and I think they are going to do more of it.

The next question comes from the line of Martin Pyykkonen – Janco Partners. Martin Pyykkonen – Janco Partners : A couple of questions more or less around the JV model and then I have a 3-D one after that. The gross margin of 89% on the JV, significantly above and I know there is really not a long-term trend so my question there is what do you feel is sustainable gross margin on the JV segment? Also the DMR segment is well above average at 83% gross going back over the last 5-6 quarters in particular what was driving that? Then on the international view for the JVs obviously right now it seems a lot of what is going on is a rush to build and get capacity, Avatar having been a big driver of that. I am just wondering if for the next year the JV deals you have signed outside of those markets where you essentially don’t trust the box office and you know where those are, could a substantial majority of those be a JV deal when you look internationally as opposed to a sale or lease type sale?

I am going to answer the second question first and then Joe will answer the first question. I wanted to rotate your words, rush to build. In fact, remember we are still coming out of the financial crisis so there is not a lot of new building going on. A lot of mall development got stuck in the middle and a lot of financing dried up. I think one of the things that makes IMAX particularly attractive is you don’t have all of these new screens going up and you have to figure out a way to get more revenues out of your existing network and I think IMAX is a good way to do that. I think that is one of the things that is fueling it number one. Two, I have to point out really without Avatar last year our domestic box office ad our international box office were virtually identical. As I said in my remarks this year our international box office per screen, our per screen international box office is higher than our domestic per screen box office. I think that is a real driver rather than any individual…obviously Avatar is part of that but that followed through and Alice and some places that followed through on Dragon. I want to make it clear it is not really one movie. It is a lot of what is going on. I would think in the right countries we would hope to drive the business to the JV model and that is certainly our intention. In the first quarter that proved true and a lot of the discussions we have going on right now are JV discussions. We are trying to steer it that way.

In terms of the JV margin, a big component of our costs it is cost of sales is depreciation on the equipment and that is basically a fixed cost. So when you have a high volume quarter like this the margins are going to go much higher. When we did the annual pro forma based on 800,000 and then we updated it to 1.1 million, your annualized normalized margin was in the mid 60’s to 70% range when you averaged it all out. You could be higher or lower depending upon business volume. This was a high volume quarter. A large percentage of our costs are fixed and so you are going to get that result. It is pretty much the same answer on the DMR front. That is the importance of widening the network. When we go through the DMR process for a film that $1 million or $1.5 million we spend per film is a fixed cost. So when you have a high volume period these are the types of margins you can generate. Martin Pyykkonen – Janco Partners : On 3-D in the home, I know this is a longer term opportunity, you are obviously very well positioned for what might develop. You mentioned earlier about the high end home entertainment system. I am just curious as you are thinking about it now is that something where you actually deliver the product as you obviously do with your audio technology in all the theaters today? Or would it more of a licensing driven model where you license the [IP] and we would find it in Best Buy’s Home Theater kind of room? Then secondly on this 3-D channel I know all the details are being finalized but as you see it now is this mostly a one-time or say for a series but then you might render say Discovery’s content from 2-D to 3-D get fee for that or is there any kind of revenue share potentially even on the affiliate side as the cable channel gets paid by the cable operators?

On the second part of your question, 2-D to 3-D, we do have provisions in the agreement that provide if there are conversion services we certainly have the opportunity to provide them. We are hoping that will prove to be a revenue source in the future but we will see. On your other point I think we are going to try most of our model to be either a licensing or joint venture model. I don’t think our strength is really manufacturing on a wide scale. We may provide other value in your example on a very high end home entertainment system that is a case where you are not delivering tens of thousands of units. Any kind of mass product I would be really surprised if we were involved in the manufacturing in any way.

The next question comes from the line of Eric Wold – Merriman Curhan Ford. Eric Wold – Merriman Curhan Ford: A quick question thinking about as you look into your scheduled for next year obviously given that the growing IMAX screen base made it easier I guess to get a good box office initially when the movie comes out. Have you thought about what the optimum number of weeks is that you would want a movie to show on the IMAX screen to give you more flexibility? Is that different than what a studio typically wants the number of weeks to be?

I think it completely depends on the film and the time of year. So if it is more of a shoulder period year where there is less competition among films I think we would be more amenable to a longer run. I think if it is around Memorial Day or July 4th obviously there is more competition for the slots. If you ask me sort of in the abstract I think the ideal for IMAX would be 2-3 weeks depending on what the film was. As I mentioned earlier I think there will be some kind of a combination between the studios where hopefully in the future during those high congestion periods the studios accommodate each other. Eric Wold – Merriman Curhan Ford: On that point, I know you kind of ran into it with Avatar, Alice and Dragon. Have the studios been fairly accommodating and give up some times? Obviously with Dragon at midnight you are probably not getting many kids going there but have they tended to kind of work together and give up some time slots and help each other out?

Increasingly so. I think if you had asked the question a year ago I would have said no. I think they understand that, as I said before, what goes around comes around and I think they are understanding if I give this studio the ability to play at midnight during my run they will give me the ability to play at midnight during their run. So we are definitely seeing more cooperation. As we go into 2011 and we start to talk through dates with different studios I think they are showing some flexibility.

There are no further questions at this time.

All I would say is thank you very much. We have been saying for years as we transition to digital and JV we are going to build a network that is not only going to be good for consumers but was going to be a very good financial and business model. I think given the film results in the first quarter we have proven that out. I think given the amount of which consumers are enjoying the IMAX experience and connecting with our brand, given the financial returns to exhibitors and studios we are pretty much on track and feeling good about things. We want to thank our employees particularly but also certainly our shareholders for your support. We will talk to you in a couple of months. Thank you.

Ladies and gentlemen this does conclude the conference call for today. You may now disconnect your line. Have a great day.