Good day and welcome to the IMAX Corporation Fourth Quarter 2011 Earnings Call. [Operator Instructions] Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Heather Anthony, Vice President of Investor Relations. Please go ahead.

Good morning, everyone, and thanks for joining us on today’s fourth quarter and fiscal 2011 conference call. Joining me in Los Angeles is our CEO, Rich Gelfond; and our Head of Films Entertainment, Greg Foster. In New York, we have Joe Sparacio, our CFO and Rob Lister, our Chief Legal Officer. We’ve also uploaded a PowerPoint presentation in PDF format on to the IR section of our website this morning to help illustrate some points included in today’s discussion. Before we begin, let me remind you the following information regarding forward-looking statements. Our comments and answers to your questions on this call may include statements that are forward-looking and 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 results and outcomes. During today’s call, references may be made to certain non-GAAP financial measures as defined by Regulation G of the Securities and Exchange Commission. Discussion of management’s use of these measures and the definition of these measures, as well as reconciliations to adjusted EPS and adjusted EBITDA are defined by our credit facilities are contained in this morning’s press release. The full text of our fourth quarter release along with our supporting financial tables is available on imax.com. Today’s conference call is being webcast in its entirety on our website. With that, let me now turn the call over to Rich Gelfond.

Thanks, Heather, and good morning, everyone. I’m in our LA office, where Greg Foster and I have a series of industry meetings this week. Our fourth quarter financial results came in generally as expected. Revenue was $66.7 million, adjusted EBITDA was $21.1 million, and adjusted earnings per share was $0.14. The fourth quarter continued the strategic momentum we enjoyed throughout 2011, and we ended the year on a positive note with the success of Paramount’s Mission: Impossible - Ghost Protocol, which was released 5 days early in IMAX. Throughout the quarter, we remained focused on several initiatives that continue to position the company for long-term growth. The theme of these initiatives is the differentiation of the IMAX Experience through content differentiation, technical differentiation and marketing differentiation. All of which we will touch on during today’s call. Looking back on 2011, as you know, we manage our business on 2 levels, financially and strategically. From a strategic and therefore long-term financial perspective, 2011 was one of the most productive years in the history of IMAX. For example, we exceeded 200 total theater signings for the second year in a row, and in fact signed an all-time high of 190 new IMAX theaters. We installed a record 170 IMAX theater systems, including 33 digital system upgrades. We grew our commercial theater network by 33%. We established IMAX China and signed our first Chinese joint revenue sharing agreement for 75 theaters with Wanda Cinema Line, our largest international signing ever. We more than doubled the size of our theater network in greater China, ending the year with 88 total IMAX theaters opened there. We secured the exclusive license of digital laser projection IP from Kodak, and as I mentioned, we enjoyed the successful run of Paramount’s Mission: Impossible - Ghost Protocol, which is…

Thanks, Rich. I too am optimistic about 2012 and look forward to what seems to be a very solid lineup of titles, with still more to come. Fourth quarter revenues were $66.7 million, compared to $69.2 million last year. Fourth quarter adjusted EBITDA, as calculated under our credit facility, was $21.1 million versus $25.8 million last year. Adjusted net income in the fourth quarter was approximately $9.2 million or $0.14 per share, compared to adjusted net income of $14.3 million or $0.21 per share on the same basis last year. Reported net income for the fourth quarter was $6.3 million or $0.09 per diluted share, compared to $54.2 million or $0.80 per share last year. As a reminder, in last year’s fourth quarter, we reversed our deferred tax valuation allowance, which resulted in a one-time non-cash tax gain of $54.8 million or $0.81 per share. Looking at the business segments, revenue from IMAX systems was $29.8 million, compared to $32.9 million last year. The decrease reflects the installation of 17 new systems during the fourth quarter of 2011, compared to 20 new systems in last year’s period. We also installed one digital system upgrade in this year’s fourth quarter, compared to 7 in last year’s fourth quarter. JV revenue was $8.4 million in the fourth quarter, compared to $7.8 million in the same period last year. DMR revenue was $12.3 million in the fourth quarter of 2011, compared to $13.1 million in last year’s fourth quarter. Gross box office in the fourth quarter was approximately $97.6 million, compared to $101.9 million in the same period last year. DMR gross box office for the full year of 2011 was $417.2 million, our global weighted per screen average in 2011 was $1.1 million, $840,000 domestic and $1.5 million international. It is worth…

Thanks, Joe. Again, while we would have liked a stronger year financially, we feel that we have executed our strategic plan extremely effectively and that this should position the company for long-term financial growth. We enter 2012 with a commercial network that is 33% larger than at this time a year ago, our mix between domestic and international theaters is moving toward higher grossing international, and our pipeline for new theater deals continues to be robust. We are assembling these to be a very compelling film slate that is more heavily weighted to titles that appeal to our core audience. We believe the fundamentals of our business model, network expansion and higher revenue contribution coming from higher margin businesses should position us to deliver significant growth over the long term. We continue working tirelessly to eventize movie-going and to make the IMAX Experience better and better. I want to thank our employees for their continued efforts and commitment to IMAX, and of course, I want to thank our shareholders for their support. With that, I’d like to open up the call to your questions.

[Operator Instructions] Your first question comes from Rich Ingrassia, ROTH Capital Partners.

Rich, can you scope the extent of the laser light transition, not just for IMAX, but for the whole exhibition industry? Are we on the cusp of a new replacement cycle here for digital cinema, and does that -- the technology that you’ve now cornered here in laser light with LLE, Kodak, Barco possibly put you at a position to benefit from the solving of the darkness problem in standard 3D overall?

It does, Rich, and in fact that’s one of the primary attributes of laser technology, in particular, the Kodak system, is brightness, it’s orders of magnitude brighter than the existing system. And the Kodak system, which we’re developing with Barco, also has blacker blacks and better contrast. So, it truly is a revolutionary development in the cinema industry. In fact, when we did our diligence on it, we took one of the directors who is very well known for not liking digital and liking film, and we showed him the technology and he was really impressed and his input into this -- and by the way, we’re having other filmmakers involve as we put this together was extremely positive. So that’s the first part, Rich. There are 2 other parts that I have to answer your question. The second is, does it position us to participate in the regular segment, the non-premium segment? And the answer is, it does. We don’t -- I don’t think we would develop a product that we would sell to replace conventional 35 or existing digital. But under the terms of the agreement with Barco, Barco is in a position to use the Kodak IP in order to sell into that market and pay us a significant royalty out of it. So we had -- neither we nor Barco has decided how to proceed, but at some point, we are in a position through Barco to enter that market and reap some of those revenues. On the third point of it is, is it a replacement cycle for the existing kind of digital industry? And it could be, but the question I have is who is going to pay for it. Under the arrangements -- the financing arrangement DCIP that it’s kind of a lease financing, which is the way the exhibitors transitioned over, but that lease financing provides for a 10-year payback under the virtual print fees. So if there were additional cost to transition over, I just don’t know who would pay for it. And in fact, I think -- as a result of that, I think, Rich, that our differentiation is going to widen versus the existing digital technology.

I kind of think somebody is going to be motivated and pay for it when they see the differentiation of laser and standard digital as well.

The question there though, Rich, is how can they recoup it, is -- is the consumer going to pay even more of a differential, the consumer does not seem willing to pay a differential for digital. So my own view is, I think your point is well taken, but we’ll see, as you know no one was willing to pay for digital transition a decade before. So, I don’t think that’s going to change.

A quick second question here on Internet or just marketing spend overall. You mentioned some banner placement on Ghost Protocol. Was that a one-time event then or is that now part of a movie -- your movie marketing strategy in any kind of formal way?

I think it’s not a onetime event, it’s part of our ongoing strategy, but it really depends on the film and the time of year. So we probably would put incremental marketing dollars behind something like Avengers, which is a key Fanboy movie and has a lot of potential during that time of the year, that would make sense for us. I think if it were a shoulder period movie where there wouldn’t really be a lot of likely impact, that’s a place where we won’t put the money. But we definitely put marketing money into the budget, and that’s definitely part of our plan going forward. I mean, one of the things is -- one of the responses is, obviously, we’re not blind to the fact that our competitors have created generic boxes that have an x name in them. And I think we -- not only do we have a technical differentiation, and not only do we have filmmakers and film differentiation, but I think to the extent we keep reinforcing the brand image, we can even have more of a differentiation.

Thank you. The next question comes from James Marsh of Piper Jaffray.

Two quick questions. First, Rich, on the changes to the China film market, I got a couple of questions here, one relates to kind of the mechanics of the whole thing. And you talked about the 14 IMAX 3D kind of carve out, what gives you confidence that that’s going to drive more IMAX and 3D content? It’s not just going to shift the IMAX and 3D films out of the previous 20-film quota bucket, if that makes sense.

Well, first of all, James, when you look at the existing 20 buckets, 15 of our films were getting in under that bucket anyway, more or less because the kinds of films that we generally do are the blockbuster sorts of movies. So, the Spider-Man, the Harry Potter, I think they’ll continue to get into the quota. Greg who is with me when you started asking the question, answered it by the phone calls we’ve gotten already. And I think the fact of the matter is, there are certain films that won’t get in under the existing quota. But in a way, we’re kind of the ticket into the country for other films. And I think China was very thoughtful and careful in structuring it this way, because what they were seeing is that IMAX films and enhanced -- other enhancements such as 3D sort of define a lot more money being spent on the film, and a lot more of a blockbuster status and I think the word enhanced format and IMAX was the shorthand version for that. So, I don’t think they instituted it not to do it. And I guess the last point I’d make on that, James, is that because of the growth in cinema in China, which you know very well, 2,000, 3,000 screens added a year, they’re going to need content supply in China. And I think part of this was a way the Chinese didn’t have to officially change their quota number, but they could accommodate their consumers and the exhibition community in China.

Okay. And then just quick follow up to that related to China. What’s your expectation on the timing here? I know there is a number of regulatory bodies that have to kind of sign off on this, but obviously you’ve got some high level political figures involved in it. I mean, what’s your take on the dynamics there and timing?

Well, I mean, this announcement was made by the Vice President of China, who is going to be the next President, Xi, and it was also made by Joe Biden. So, I -- this kind of level I don’t think that’s a kind of thing you play around with, I mean, I think it’s -- certain aspects like the 25% are done. I think there does have to be some regulation filled in around it, I am not sure exactly when, but I’ve been told by people in China that they are acting quickly which, at the earliest, I’ve heard it could be a couple of weeks and at the latest, I’ve heard it’s going to be a couple of months. But my guess is with the change in government coming later in the year, they’re going to want to get it done relatively quickly.

Okay. This is my last question. I’ll let someone else take the mic here. Do you have any sense for how the The Hunger Games advance tickets sales are going? I know they started and yesterday and we are hearing that it was tracking towards potential 24-hour record. Do you guys have any color on that?

Greg, why don’t you answer that?

What I do know is on isolated situations that I’ve heard about yesterday, for instance one from our partner Regal, they put the tickets on sale and 400 tickets in a specific theater went in about an hour, and it’s 405 theater auditorium. So that’s one theater, but based on the traffic that we’re getting and the questions we’re getting on our website, and this data not only on that theater, but a couple of others, I suspect that especially in the beginning that opening weekend is going to be pretty substantial on Hunger Games. It has generated a level of interest that we didn’t anticipate being quite as high as it is, and clearly it’s very -- I mean, we thought it would be terrific, but we didn’t think it would be as massive as it seems to be, it’s definitely part of the culture.

Right. Could you just -- just a follow up on that, could you give us some reference point for how some of these other presales have gone? I mean, the -- obviously, Harry Potter and Twilight were big numbers, but did they take place closer to the launch after the promote -- marketing promotion started? I mean, how long did it take to generate those $25 million or $30 million in presales, do you have any idea?

It depends ultimately on when the exhibitor puts the tickets on sale, and it would be silly to compare Hunger Games 4 weeks out to what happened with a picture like Harry Potter or Transformers. But I would categorize what we’ve seen so far at Hunger Games as robust.

Okay.

And James, as you know, we already have significant presales for The Dark Knight Rises in July, but that’s a bit of an anomaly.

Your next question comes from Eric Handler of MKM Partners.

Yes, thanks for taking my question. Just a quick question regarding your screen installation guidance, and tell me if I’m interpreting this correctly. Your guidance is based on what you know and what’s signed as of December 31. You’ve put out a couple of press releases since that time, including the Latin American deal. So if I’m interpreting correctly based on February 23, should those numbers actually be higher?

Well, the answer is, I mean, first of all, installs always move in and out at the end of the -- if you look at the end of the year, we do this in real time. So you can’t just take the old number and say it’s static and add the signings into it. The second point I’d make, is if we think there is less than a 50 -- or I think probably less than an 80% chance of it installing, we’re not going to put it in our guidance. And Joe, you may have some specific things to add to that.

Rich, I completely agree with your comment. I mean, we scrub all of the installation information that we provide guidance on. So it’s not a straight add, believe me.

And as you’ve noticed, Eric, I mean, we pretty much beat it most quarters and most years, and that’s because the last thing we want to do is promise installations and have them not happen.

Understood. And just as a follow up, with the way you’re looking at marketing, it seems like a fine line of what you’re going to do versus what the some distributors should be doing. How do you sort of delineate in terms of who is going to pay for the YouTube-type of advertisements and some of the other promotions that you’re looking at doing?

As a practical matter, it’s easier than you would think, and that’s because our marketing is really brand centric and their marketing is film centric. So during MI-4, our banner ad said IMAX is believing and it was focused on the IMAX Experience, whereas Paramount’s marketing was more focused on the film itself, Tom Cruise, things like that. And it’s discretionary on our part, so in large part. So, what we do is, we -- we assess what’s the best way to market the brand. And as I said, if it’s a small shoulder period movie, that’s not one we are going to choose to really promote the brand, but if it’s a larger movie, like the Dark Knight or Spider-Man or something like that, we are going to focus on the brand at that time, and it’s ad hoc, but it actually works, Eric.

The next question comes from Marla Backer of Hudson Square.

I have a couple of questions on the films. First of all, MI-4 was just such a success, and as you say, to a large extent attributable to the IMAX early release. Can you just give us a little bit more color on what it is you’d look for to green-light and early -- with the studio to go forward with an early release of another -- of another film?

It’s Greg. I will take this one. It’s actually a fairly simple formula. The key to it is differentiation. We’ve had several companies ask us since the success of Mission: Impossible to say yes, to an early release and we’ve said no to some of them, because we’re not going to do it for every movie. We need to -- more of the same is clearly not working, that’s what 2011 showed us.

So, if there is an IMAX film that has specific IMAX DNA that differentiates the film from the rest of the marketplace, if it’s a movie that can actually benefit from an early window, Mission: Impossible 4 was a franchise that it had 3 titles before, yet the last one was 5 or 6 years before, and it needed a little bit of a kick start. And so the IMAX DNA and IMAX which was shooting with the cameras, IMAX focused filmmakers like Brad Bird and Bad Robot and the support they got from Paramount, as well as Tom Cruise, plus the -- where it sat in the competitive marketplace during December was the perfect title to do this way. And those are the kind of criteria that we’ll be looking at going forward to make sure that we can actually add something to it, as opposed to doing it just to say that we did it.

This -- we shouldn’t have to worry at all about this becoming sort of too run-of-the-mill to remain special?

No, we’re going to be extremely careful about it.

Yes, the way we summarize it, Marla, is we say the movie has to have IMAX DNA around it. Because I think if you look back, one of the problems that happen with 3D is it got oversaturated too quickly, and it got put in every film whether it was appropriate or not. And I think we’d rather do 2 films a year and do them well than do 6 films a year and dilute the effectiveness.

Okay. That’s good to hear. A fast question on the local content, a market such as China, local content seems to make so much sense, India, because Bollywood content has such a large part of their exhibition in that market. In a market like France where you’re planning on the first local content title, how are you planning to look at local content on a market-by-market basis? When does it just become uneconomical to satisfy your exhibitor partners in that market because the market is just too small to support your DMR costs?

It’s a very good question, Marla, and I think -- let’s talk about France specifically. The theaters have done well, the per-screens are all okay, but Pathé Gaumont thinks they could be better and they are also in the filmmaking business. So we’ve agreed sort of to do that one as a test, and I think they see it as largely a branding exercise because they believe this Marsupilami is going to be one of the highest grossing French films of the year. So we’ve agreed to do it with them as a test and see what happens. And I don’t think we’ll lose money. I think in a worst case we’ll sort of breakeven on it. But I think part of what we’re going to do is not set hard and fast rules, we’re going to try and be pragmatic and see who our partners are and what the film is. That film, in particular, can also play in French Canada. So I think the economics look differently than if you look at it just in France. But I don’t think you should expect us to do a lot of films like that unless there’s concrete results. Like in Russia, we have about 40 theaters, including backlog and so obviously doing Stalingrad in 2013 is economic for us, and that’s the kind of film, which I think can do very well. And if you look at China and Flying Swords, I mean, doing 12% of the box office on less than 2% of the screens is a powerful statement. And Greg was just in China about 2 weeks ago, and what -- how many films did you get offered?

16.

16 films. So we’re not going to do all 16 films, but I think we can replicate some of the successes we’ve had in the U.S. where we get to cherry pick, we make good relationships with the studios. The studios communicate with the exhibitors, they drive exhibition and it becomes a virtuous cycle.

That makes sense. Okay. And my last question is on the laser technology, the licensing deal. And I agree with what you said, Rich, it really seems that opportunities to upgrade within the exhibition industry are kind of limited for the -- exactly as you said, the financing aspect of it. Do you think there are any opportunities outside of theatrical that you could possibly leverage by virtue of your licensing deal either with Barco, or with potentially another partner?

I think there are, Marla, and whether it’s the commercial projection market or whether it’s eventually scoreboards at stadiums or other things, I think the attributes of our system are so differentiated that I think they are. I mean, we certainly haven’t put a business plan to get on that, but we will.

Right. And doesn’t Barco have a business that’s similar to that, I’m not sure if it’s specifically scoreboards, but they have that digital kiosk, outdoor business, don’t they?

They do, yes. So imagine Jeremy Lin on the new laser screen at Madison Square Garden. I think they will be even more special than it is today.

I would love to see that.

Your next question comes from Steven Frankel of Dougherty & Company.

Rich, could you give us an idea of how many screens you think you’ll have opened in China by this time next year?

I don’t know. Joe, do you have it specifically? I think probably around 130, that will be my guess, not having the data in front me. Joe, do you have any more color you could add to that?

No, Rich, that’s about right, yes. That’s about right. And that includes Taiwan and Hong Kong as well.

Okay, and...

And then, Steve, if you include the backlog, we have up to -- we have about 212 that’s built outside already today. And there’s still a lot of interest in China even before the WTO came out with this -- I mean, the governments came out with their response to the WTO ruling.

And in regards to that ruling, in your comments that you think it’s going to get enacted pretty quickly, will that enable you to slide in a couple of more films in 2012?

I think it’s likely we will, and one of the things I mentioned in general terms, but I’ll be more specific about it is, some of our agreements with the studios this year say that we get 50% of whatever they get. So in certain instances, we’ll see an immediate impact this year. So I do expect to see, as I said, a small positive impact financially, and I do think we’ll be able to get more films in, although it’s hard to quantify at this point.

Okay. And switching gears to the U.S., earlier in the year and late last year, you talked a lot about some successes in small markets in the U.S. and how those screens were significantly outperforming. I know it was a tough year domestically, has that outperformance held up or have those small market theaters kind of reverted to the mean over the year?

No, as a matter of fact, they continue to do very strong. And the reason for that is they tend to be family-owned and there tends to be a tremendous focus on marketing and promotion and differentiation. And as a matter of fact, the theater that we couldn’t stop talking about in Wichita, Kansas, Bill Warren, he is opening today I believe it is in Oklahoma City...

Moore, Oklahoma...

Moore, Oklahoma. And I have seen pictures of what the theater looks like in its marketing, and it’s just incredible that I don’t know which theaters you look at, but it’s day and night compared to what the chains have done. And I think that accounts for a lot of the over performance.

Okay. And one more domestic-focus question. Have you had any material discussions with AMC and Regal about starting to populate selected zones with a second theater, is that something that’s on the radar screen?

It’s definitely on the radar screen. We sort of have a strategic initiative and I’m going to talk a little bit about my own point of view. I have been opposed to it for a long time, because I didn’t think there was enough film product, and I thought there might be some consumer confusion. But given where we are now and the demand for IMAX film from the studios and the success of MI-4, and the possibility of an early release window, internally we put together a group to look at it. And I’m certainly starting to moderate my position on this, and I wouldn’t be surprised to see us testing it in some markets, but we haven’t made a final decision yet.

Thank you. Your next question comes from Ben Mogil of Stifel, Nicolaus.

Just following up on Steve’s question, in North -- moving back to North America where clearly there has been -- theater development has obviously been stalled across the board. Are you seeing any interest by exhibitors or are you willing to sort of allow in some of the places where they can do sort of a premium format screens of their own, as well as one of your own screens I think? I think Regal and Anchorage has something like that, your thoughts on sort of that as a way to sort of unclog some of the backlog?

Before I answer, I want to frame it a little bit.

Sure.

In Canada, 3 years ago, or around 3 years ago, we had 8 theaters. We now have 33 theaters in Canada. We don’t really talk about that much, but the network is 4x the size. So, I mean, we just announced a deal with Guzzo Cinémas in Québec for our 4 theaters. So the level of activity, and following up on what Steve said, in the smaller markets, there is more there than we thought originally. So I think there is more than we expected or you expected in those territories. In terms of the second screens building out, it’s really weird, but our experience with AMC was in auditoriums where they put ETXs. We actually grew faster than in auditoriums where they didn’t put ETXs, and I don’t quite understand all of the reasons for that. But it statistically works out. I think if you listen to all of the exhibitors with the possible exception of Cinemark, they would say that their home-grown brands don’t bring in incremental audiences, therefore don’t bring them additional concession revenue, IMAX has obviously bring in incremental audiences. So I think there is a place for them and I don’t think it’s a terribly threatening place for us. I think the question is how do we keep differentiating and how do we keep moving forward. So, Mission: Impossible 4, for example, was not playing in the same multiplex in a premium screen, where there was an IMAX screen and certainly we’re not going to continue to develop a differentiated experience and allow it to be shared with the copycats, particularly in the same boxes. So I’d say, our response to it is brand marketing, owning the brand and continued differentiation. And if you look at the results, especially early this year, they seem to be positive. So I am monitoring it, we are responding to it, in my discussions I’m not overly concerned about it, but I think I would be blind if I didn’t say that we are constantly looking at ways to evolve and differentiate. I think ultimately laser light is going to be a very material way to do that.

And on laser light, I just want to make sure I heard you guys correctly before. You are looking for this to be a -- 2000 and second half of E3 installation event. Is that correct?

That’s correct. I mean, again it’s an R&D project, so I don’t want to promise it, but that’s the path we’re on right now.

Sure. And then just lastly and then I’ll see the floor to someone else, did you guys buy the patents out right from Kodak, or is it simply a license?

It’s a license partly because actually we have rights to every Kodak patent in that portfolio and we have exclusivity in the “cinema space.”So if you’ve been reading, which I’m sure you have been, about Kodak’s strategy of selling those patents for a lot of money to different people, we couldn’t own them, because they have other uses, but we’ve licensed essentially their entire portfolio. In fact I was going to say, there may be other nuggets of things that are of interest to us in our license. Our license isn’t limited to developing the laser projector. In fact our license has exclusivity, as I said, in certain areas and there may be side things that we can develop from them.

The next question comes from Aravinda Galappatthige of Canaccord Genuity.

I have a question for Rich and one for Joe. I’ll start off with Rich. Rich, can you talk a little bit about the prospects in the Latin American market? Obviously, it’s a sizeable market, the PSA seem to be good. Are you still tied to RACIMEC as you look to penetrate the rest of the market, because there’s obviously a fair bit of pent-up demand there given that the penetration there has been a bit slower, as a result of the arrangement?

Well, I think -- when I went into it, Aravinda, I think -- I thought a lot of the problems were on the partnership and how it was functioning, and when I came out of it after spending a lot of time, I think the issue was more the way the contract was structured, as I said during my remarks. So we couldn’t do JVs in Latin America. It was difficult to approach the chains. So the way we’ve really restructured at 2 points, one is, there is much more flexibility to deliver the kind of deals we do in other countries. And the second thing is, we have a much more direct role than we had before. So in every case, we’ll work with RACIMEC, but in certain instances like with the big multinational chains, it will take the lead and in other instances, RACIMEC will take the lead. There are also fairly tight performance standards under the agreement. So if there isn’t results delivered within 2012, there are ways that we take more of a front row. So I’m comfortable that the structure works and that the incentives are there. And while there are no guarantees, I would be surprised if we didn’t see a significant pickup in activity.

Thanks for that, Rich. And a question for Joe on the working capital use, obviously working capital usage in 2011 was quite high, nearly $50 million, it’s gone up a lot since -- in the last couple of years as well. I know there is fair bit of sort of liquidation of the size there. But I just wanted to see, I mean, Joe, are there any comments you can give us as we think about forecasting working capital on a go-forward basis? Particularly keeping in mind that you’ve signed a lot, particularly in 2011, and that should start to help the deferred revenues as we step into 2012. Is there any comment you can make on that?

Yes, I think, Aravinda, one of the big -- one of the big drags that we’ve had not only in 2011, but also in 2010, was the liquidation of the variable stock awards. And those awards are really down to a trickle at this point. And that’s really more than half of your difference. Other pieces of it are we had a buildup of inventory at the end of the year because we are installing at a fairly rapid pace, so that’s part of it. And the other part, which will impact working capital, is we’re a growing company. As we continue to install close to 50 to 60 theaters under our sales-type lease arrangement or sale and we continue to grow our DMR revenue base, those receivables grow. Now they’ll get liquidated afterwards, but in a growing company you’re going to expect a drag on working capital as you grow.

Okay, thanks. And then -- but offsetting that, Joe, and wouldn’t the increase -- wouldn’t you have increases in deferred revenue as well because your signings rate is quite high and that should hit 2012, shouldn’t it?

Yes it would, but the installation rate was at a higher level than the signings rate.

I apologize, but we can only take one more call because we have to run off to some meetings immediately. And if there any additional calls, certainly Heather will get in touch with you after this, and I’ll be happy to talk to you at some point today. So operator, please make the next call the last one.

The last question will come from Jim Goss of Barrington Research.

All right, thanks for squeezing me in. One follow-up to a previous discussion about the 5-day early release window: do you think this would be useful during the crowded summer schedule where there don’t seem to be enough weekends?

No, that’s one of the interesting questions, Jim, is I think you really have to look at it at a period-by-period basis. And I think for most of the crowded weekends, films were getting in already. So, I think it’s more likely to impact places where films weren’t getting in, some of the shoulder period. However, China is a funny place, because sometimes the releases -- aren’t day and day it on a worldwide basis. So, I think we have to do it on a micro level. My guess is, let’s say, we got 4 or 5 new movies in by way of example, that probably 1 or 2 of them would be in a more -- a period where we had a hole, that was a more popular period, and then the others would likely be on the shoulder period. But I think it’s not going to change the heavy part of the lineup dramatically.

Okay. One for Joe, if you look at the seasonal trends, variations in the revenue and earnings pattern, do you see that settling into some new pattern as you look at both the growth in your overall films or screen slate, the geographic diversity and any of the other issues that are affecting it? Like which quarters do you think will be the relatively much higher versus lower quarters as you see it right now, say, for 2012 in particular?

I don’t see any big shift here. I think if you were to look at our film slate for this year, certainly the second and third quarters look great and we have some great films at the tail-end of the fourth quarter. So I don’t really see anything that would change the trend, I see a very nice film slate shaping up. I think the shoulder periods are going to be the shoulder periods, and we’ll try to fill in those slots. I think the good news in the first quarter is it seems like we’re doing pretty good with some of the films we’ve been able to slot into what has been a fairly slow part of the year.

Okay. And the international area, as that becomes more prominent, tends to have similar patterns to the U.S.?

Yes, by and large. I mean, some of the release windows are somewhat different, but by and large they’ll kind of track. I mean, the only place -- one of the places you might have a difference is like in China where Mission: Impossible 4 opened in January and not December. But instead, we had Flying Swords in December and that did very, very well. So you could have some nuances there, but I think at this point given the makeup of our portfolio, I wouldn’t anticipate anything too dramatic.

Okay. And the last thing, if you look at the PSAs in the domestic screens relative to some of the international markets, does that vary by -- significantly by type of market or size of screen or what exactly is driving that difference, and do you see that changing at all?

I mean, Greg and Rich certainly pipe in, but I would tend to think that some of what we experienced in 2011 was programming driven. Many of the animated titles that we had on screen just did not hold or did not perform as we had anticipated, and I think the result of some of that was the per-screen averages went down.

All right. Well, thanks, Jim. I think I ought to just summarize briefly, and when we analyze the company over a period of time and creating value for shareholders, the key metrics for us is network growth. And in fact the network grew 33%, last year it’s been running at 30% compound annual growth rate. I think you look at this year, our backlog is strong, our signings were strong last year. So, over time I think we’re creating a very valuable franchise with recurring revenues. I think if you graph against that the film results, you’re not going to follow the same trend line exactly. You’re going to go over the trend line or you’re going to under the trend line. And clearly 2011 was under the trend line, driven primarily by disappointing results from animation in the United States, but I think when you look at the beginnings of 2012, you can’t underestimate momentum. And I think MI-4 gave us a lot of momentum going into the year. It’s very early to say, but in 2011, the momentum was going against us. In 2012, you all have seen the film results and our films are doing better than we expected. The WTO thing came a little bit out of the blue, and that’s a positive. And the year is feeling very good to us so far on both levels, the network growth level and the finance level. So, let’s hope that trend continues, but in any event, I think we’re increasingly building a very valuable franchise that’s creating recurring revenues. And again, thank you for all your support over the time, and we’ll report back to you soon. Thanks.

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