Good day, and welcome to the IMAX Corporation First Quarter 2012 Earnings Conference 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, and thanks for joining us on today’s first quarter 2012 conference call. Joining me today is our CEO, Rich Gelfond; our CFO, Joe Sparacio; 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 of 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 outcome. 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 as defined by our credit facility are contained in this morning’s press release. The full text of our first quarter release along with 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. We’re pleased with our start to 2012 and encouraged by the positive momentum that we have experienced through the first 4 months of the year. The first quarter and early part of the second quarter are usually a quieter period for box office performance. So it is exciting for us to be heading into the summer blockbuster season with so much wind at our backs. In addition to strong box office results, during the quarter we made important progress on several strategic initiatives: differentiation, technology and our new brand campaign, which is launching eminently. Our progress related to these 3 key initiatives was of great interest to our studio and exhibitor partners this week at CinemaCon, the exhibition industry and studio’s annual conference. We will discuss all of this today, as well as update you on network growth initiatives. But first, let me review our first quarter highlights. We constantly say that the network growth paired with compelling content leads to recurring revenues, and this really played out in the first quarter. Driven by near doubling of gross box office, total first quarter revenues increased 23% to $55.6 million. Adjusted earnings per share were $0.06, and reported earnings per share increased to a profit of $0.04. First quarter adjusted EBITDA was $16.4 million, up 82% versus last year. We also increased cash flow from operations by $20 million year-over-year. We believe much of the box office success from the first quarter stems from the halo effect of Mission Impossible 4 and being involved in the right titles for the IMAX brand. MI4, Journey 2 and the Hunger Games all generated very strong results for us. As I mentioned, box office momentum from the first quarter is continuing into the second quarter. Our global network…

As Rich highlighted, first quarter adjusted EBITDA as calculated under our credit facility increased 82% to $16.4 million from $9 million last year, and reflects a 960 basis point EBITDA margin expansion. Our trailing 12-month EBITDA as of March 31 was $75.1 million. Total first quarter revenues increased 23% in the period. Driving the increase were our recurring revenue segments, which increased 75% over the same timeframe and represented 63% of our total first quarter revenues as compared to 44% last year. Over time, our recurring revenues should increase with the growth of our commercial footprint. And all together, these segments come at a higher margin than our non-recurring segments combined. Adjusted net income in the first quarter increased 58% to $4 million or $0.06 per diluted share from $2.5 million or $0.04 per diluted share on the same basis last year. Reported net income for the first quarter was $2.6 million or $0.04 per diluted share, up from a reported loss of $1 million or $0.02 per basic share last year, which included a one-time $2.1 million charge or $0.03 per share related to an arbitration proceeding arising from a discontinued subsidiary. Our first quarter 2012 results also included a $700,000 charge related to the installation of certain equipment to some of our digital theaters, which will enable them to play future titles like The Dark Knight Rises in either analog or digital format. This charge was included in our IMAX system’s business segment. We expect to take a similar charge in the second quarter and expect to recoup some or all of these costs based on the anticipated performance of the film. Looking at the business segments. JV revenue increased 190% to $11.7 million in the first quarter from $4 million in last year’s first quarter, primarily reflecting…

Thanks, Joe. Again, we’re very pleased with the positive momentum we're experiencing at the box office, which has continued through the first quarter and into the second quarter. Network growth which drives recurring revenue, higher margin and increased cash flows was demonstrated in the first quarter, and we look forward to building on this over the longer term. With that, we’d like to open up the call to take your questions.

[Operator Instructions] The first question comes from Rich Ingrassia of Roth Capital Partners.

Rich, I don’t think investor realize how significant the second theater initiative could be given that there is not a single IMAX multiplex location with 2 screens today. But I expect your exhibitor partners might fall back to their old fears of cannibalization, et cetera. Can you say a little bit more maybe about what kind of data you have to offer or hope to offer to allay those fears or how you can otherwise make that business case for the second screen?

Well, I think, Rich, what I said was we’re going to test it, and that’s pretty easy. We’ve talked to a number of -- a handful of exhibitors, and there is interest. And I think what we’ll do is we’ll put in there a second screen in a multiplex. When you have a film like The Dark Night opens, which is going to clearly open very strongly, you could open the thing simultaneously in both screens, and I think you’d expect very strong results. I think it’s also interesting when you have a situation like now, where we have Avengers for one week and then it carries over in a limited number of theaters. And then we go into Dark Shadows, where one screen could play Avengers, continue to play it, and the other screen would be able to play Dark Shadows. When you look at our business where a majority of the revenue comes from only 4 or 5 blockbuster titles a year, you could see being able to utilize the second screen in a very effective way. I think what we would do with the exhibitors, Rich, would be, we’d say that, if the screen isn’t performing after an IMAX opening, which is most likely in sort of the shoulder period, then you would let them go to alternative programming. But the reaction I’ve gotten from exhibitors so far is kind of, "Well, this sounds like a win-win situation. Let’s give it a try and let’s see how it works in the real world." And as I’ve said to you at other times, I wasn’t for it years ago because I felt that our brand wasn’t strong enough, or we didn’t have enough film product to deal with it, and I was concerned about lower IRRs. Now since our IRRs in our existing network are about 60%, I’m not counting the film side. If we end up getting IRRs in the 30% range, that’s still pretty acceptable and a still pretty good return. So I think we can create a win-win.

And on the brand campaign, you’ve described pretty clearly what you hope to accomplish with consumers. But do you also think it might be effective in pointing out the distinction between IMAX and some of the copycats, you alluded to one, for your business partners around the world? Or is that not really necessary?

No. I mean, I wouldn’t use the word. It’s always helpful to gain a competitive edge. But I think what really gains that edge historically, and will continue to, is consumer demand. And I think there’s a lot of low-hanging fruit out there. I think brand campaigns, you can't bet on them having immediate results. But in this case, I think there's enough people that walk into a theater and doesn't even know what IMAX is or understand the differentiation. So I’m actually pretty pumped about it, Rich. I take it as a very high likelihood of making a difference. One of the things I didn’t mention, but as part of the launch, is we're actually going to engage through social media and ask our fan boy audience to write the headlines themselves and create contests in describing IMAX. And I think that’s going to create additional awareness and buzz around our brand.

Okay, great. Just finally, if I'm breaking down your backlog comments correctly, in addition to what you currently have for the remainder of the year, it's about 80. You expect 15 to 20 systems to be signed and installed between now and year end?

We haven’t given guidance on that. What we'll do on that Rich is the level of business activity is quite strong, but we never forget what’s going to sign and install.

The next question comes from Eric Handler of MKM Partners.

Just a quick question on your statement about the installed guidance increasing next quarter. I think we got a little spoiled last year with all the big China deals and a number of other very large deals. Wonder if you could give us some color. Your signings have declined sequentially over the last 2 quarters. Just the tone of the market, what may be some of the stumbling blocks in getting some deals signed and just how optimistic you feel for the rest this year?

We feel pretty optimistic. I went through it in some detail through Latin America, china. Went through Western Europe and what’s going on. There's a lot of activity. It went down from last year because we signed a 75-theater deal with Wanda. I mean, we don’t have a 75-theater deal every quarter. We feel really good about the level of business activity around our business. When you look at things like 100% increases in box office in the first quarter, 500% increases so far quarter-to-date, the summer lineup, those are usually leading indicators of where signings are going to go. And you pair that with active discussions underway, and I feel pretty good about it.

Great. And then just a follow-up. The Avengers, which markets -- which are your big markets? Do you have that opening up this weekend?

No, it's opened already. It opened in Australia, and it opened in Russia. And the results were quite encouraging. For the first opening day, which is a weekday, I think we did around $20,000 a screen. And the second day, there really wasn’t much of a drop off. And if you follow our numbers, those are very, very strong results. You see results like that out of a Potter or a Dark Knight or things like that. It opens next weekend in the U.S.

The next question comes from James Marsh of Piper Jaffray.

Rich, just a quick -- hopefully you can give us a quick update on the timing of the W3O rule changes. There are some kind of scuttlebutt that, that might be retroactive, and I just didn't know if you knew what that language would look like and how it might be different than kind of the earlier discussions.

I’m told that it's supposed to sign shortly, James. But in fairness, I’ve been told that for the last several weeks but on fairly good authority. So that would be my expectation. China Film has been operating from a splits point of view, as if that agreement has already been signed. So for films that have played in Asia like Battleship and like Titanic, it’s subject to the new fee structure rather than the old fee structure. And again, I haven’t seen the document, but based on intelligence I’ve gotten, the language is not only expected to be consistent with what I have described, but maybe even a little bit stronger in terms of being favorable to IMAX.

Excellent. And then, just kind of quick question regarding the laser product. [indiscernible] on any fee was demoing a laser product. I don't know if your people got a chance to look at it. But are there any fundamental differences between what they're doing with their laser light engine and what you guys plan to do? What you demo for the exhibitors in the studios?

Yes, there are lot of fundamental differences, James. Some of the things that we’re very focused on, as I briefly mentioned in my remarks, are the color of black, which sounds funny, I’ll elaborate in a second; and also the contrast and brightness. And by the color black, I mean, when you see black on a screen, typically, in a regular theater, it kind of looks grey. But the blacker the black looks, the more of the contrast shows up in different scenes and that creates, for the viewer, just a far superior image. And as far as I know -- well, certainly no one else has the Kodak proprietary technology which -- we spent a lot of money buying those patents. So I think, we’ll have an extremely differentiated product than I think the people who saw it, who -- some newspapers have started writing stories and quoted them. I mean, you should read them. It’s just as -- just like there can be analysts at one level and analysts at another level, there could be lasers at one level on IMAX lasers.

And then just one last quick question. Been a lot of talk on CinemaCon about 48 frames per second. I assume it’s just a quick software upgrade for your projectors?

It actually isn’t a quick software upgrade. It requires some R&D on our part and it'll require some cost. And certainly, we intend to upgrade a number of projectors in our system to accommodate the Hobbit, Peter Jackson’s film, which is shot in 48 frames per second. So as I say, we’re going to take part in that, but it’s not so simple.

The next question comes from Ben Mogil of Stifel, Nicolaus.

So just sort of just 2 questions. In terms of looking at Latin America -- so in North America, the exhibitors' premium formats, the -- x DRPS, et cetera, really haven’t been an issue for you because you would obviously roll it out much earlier. When you look at Latin America, some marks have been very aggressive with rolling out the XD screens and in branding them as sort of the way to watch premium format. Can you talk a little bit of how you see that market evolving from that perspective, given that you don’t have the sort of first mover advantage that you say you do in North America?

I’ve been down there twice, Ben, since the New Year. And not only me, but the exhibitors are kind of amazed by how powerful the IMAX brand is, given the low penetration that we have in that area. And I think of our newer screens, we’ve been doing around $1.7 million per screen, which is extremely high. I think people have gotten to know IMAX on a worldwide basis. And what I consider to be the key constituencies, the real estate developers and the exhibitors get the joke, that they all -- or most of them have operations in other parts of the world. I think, in Brazil, there are 60 malls being built right now. And I think the data from the rest of the world shows that the copycat theaters don’t bring in incremental audiences. They bring in a ticket price premium, but not extra people. So if you're a mall developer, I mean, you want something that provides the anchor tenant function and brings people in. And if you are a exhibitor, you want people to come in who -- incremental people that weren’t in your theater before. And you are also going to sell popcorn too, and you’re going keep that and not split that with the studio. So I just haven’t see that kind of resistance. I mean, as a matter of fact, we heard yesterday, and I haven’t verified this, but we heard through CinemaCon that one of our exhibitors outside of the U.S. has 2 of the homegrown-s and they’re converting them to IMAX. They approached us about converting them to IMAX. And you talk to pretty much any of the exhibitors, except perhaps for Cinemark, and the other -- the exhibitors acknowledge that it doesn’t bring in incremental bodies. Maybe there are unique attributes to the Cinemark system that I’m not aware of, but the copycat thing really hasn’t brought in incremental bodies anywhere in the world.

And then sort of just - I just wanted to make sure that $1.7 million off per screen, that’s the Latin American numbers that you’ve got so far, correct?

Yes, for the newer theaters is what I’m saying. Not -- there are some older -- like institutional kind of theaters that I’m excluding.

Sure. No, that’s very fair. And then secondly, when you talk about the sort of specific market releases, I think Madagascar 3 was one that you gave us an example. You’ve obviously got a fixed cost in terms of converting the film into the IMAX DMR. So can you talk about, from a box office perspective, how small the box office you could realistically -- how many few countries you can realistically do this in and still make it worthwhile? Like could you say just do a film in Russia alone and make that worth the conversion costs?

Oh. There's no question in Russia alone, it would work because of their box office. So for example, we’re doing a Russian film next year. I think you know that, Stalingrad. But the cost is variable on the DMR. And in fact, it’s lower for animation than it is for live-action. So Madagascar 3 won’t be that expensive for us to convert, and Russia is actually one of the key markets we'll release it in, where CGI 3D is extremely popular. So we generally won't go into these things unless we think we’ll at least breakeven or make money on them. The one exception might be in places where we’re hoping to grow the market. So I think I discussed on the last call how we were going to do DMR Bollywood in India as a way to spur growth in that market. And we did this limited release in France, on Marsupilami, which really isn’t a moneymaker. On the other hand, digital-only releases -- digital production, like CGI, is a lower cost for us to convert, significantly lower, Because the DMR process we take film and we convert it to digital, then we up-res it, then we change it back to film. When you take about digital only, you don't have to do the first step or the last step. So the costs are lower.

The next question comes from Aravinda Galappatthige of Canaccord Genuity.

Just have a couple for Rich. Rich, I was wondering, I know you mentioned a little bit about the Chinese competitor DMAX. From your perspective, from what you see in the technology, is there anything about the technology that surprised you in terms of the sound or the resolution? Obviously, it seems to be a step ahead of some of the North American exhibitor branded -- the XDRX type products. Is there any similarities or differences you see with IMAX that have sort of surprised you there?

Well, when you say seems to be a step ahead, I believe there are 2 theaters in operation, and the source of the information was from a Xinhua News Agency, the Chinese state-owned news agency. So I really wouldn’t draw that conclusion necessarily. Some of our people have seen it and think this is a significant differentiation with IMAX. So I don’t necessarily buy the premise of what you're asking in your question. I think IMAX is IMAX, and we're constantly evolving and we have laser technology. It’s the next thing down the road. And as I mentioned, during the last -- starting at the beginning of this year going through the end of next year, we have close to 10 films that are going to have specific IMAX attributes to them, including different aspect ratios and film with cameras. We have 45-year brand. So as I said, in China, when Blu-ray came out, China Film launched a product called Redray, and it wasn’t that successful. I’m sure there's a niche for this product somewhere, and the market will tell how broad that niche is. But I don’t think it’s a going to really affect IMAX’s growth prospects in a material way.

And then, just my last question on Europe, obviously, you are making an effort to sort of drive -- get more traction in terms of new signings, et cetera, there. And obviously, the box office performance had a lot to do with that. Is there any comments you can give us on how the box office has being fairing in Europe? Obviously, perhaps, not as strong as China, et cetera. But judging by the international numbers, it looks like it’s fairly strong. Is it sort of better than the domestic numbers? Or how significant has the improvement been in box office there?

Well, there's been a significant improvement, but I don’t want to mislead Aravinda. Europe has still been lagging and the rest of the international. Partly, it was the kind of films in the first quarter. I think that -- what’s it’s called, Avengers, sorry. I lost my train of thought. Avengers, I think, opened in the Netherlands and in France to very, very strong numbers, as strong as the rest of the world. But given the economic situation in Europe, there is certainly challenges that aren’t as significant -- or more significant there than elsewhere in the world. So Spain’s box office, for example, and Greece’s box office is quite weak. The UK’s box office is quite strong. And as I said, for Avengers, the Netherlands and France kind of blew the cover off the ball.

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

So Rich, you’re talking about adding proprietary elements, which is a great part of the strategy. Is there anything that you can do specifically to increase the number of films shot with your cameras?

Sure, there is, Steven. Part of it is happening organically already. As I said, in addition to the Dark Knight and Star Trek, there are probably 3 or 4 films that we sort of have a handshake already to the using our camera that we haven’t announced yet. And some of those films are outside the U.S. and some of the foreign territories. So that’s just happening on its own because of box office. The second part of it is we can invent better cameras, digital cameras that are easier to use, that have quicker reload times. And that’s actually a strategic initiative that we have underway this year. And I would think, by the end of the year, we probably would have a better digital camera. In fact, one of the things that makes us unique as a company is our relationship with the filmmakers. So we haven’t kind of gone out and invented a camera and built it and they will come. Instead, we're meeting with filmmakers and figuring out the kinds of features and the kinds of things we can do to make them want to use it even more. And we're in the middle of that process.

Okay, great. And then on the install guidance, it looks like 3 sales-type leases moved out of your guidance from this year when I look back at last quarter’s slide deck?

It’s pretty -- Steve, this is Joe. It basically remains static from where we were. What you may have as if you are rolling forward the network; what you need to factor in is that there were handful of closings during the period.

Okay. And as you look at all the signing activity, all that the pipeline activity you’ve been talking about, is there anything in particular that’s going to stop it from closing as quickly as you might have liked or any event that’s like a film or 2 they need to see at the box office before they step up and sign deals?

Steve, so if you look at last year compared to this year and you put one aside, you’ve gone from 26 to 23. There is a really strong level of activity going on and I think that - Joe just give me a look, am I not saying right?

No, you are right.

I’m right about that. Okay, I’m right about that. And with the 3 signing happened in the last day of the month or the first day of the next month really doesn’t have to do with any kind of global trends, it has to do with whether a guy happens to be on vacation or the second signatory isn't there. There are no trends in my opinion that has affected our signings outlook right now.

Okay. And lastly on China, assuming that the WTO agreement gets signed fairly quickly, how much of a pipeline of additional Hollywood films do you have to bring there to bring into China this year?

Well, all I can say to you is that last year, we’ve had about 12 Hollywood films in China, in addition to one or 2 indigenous films in China. In the U.S., we had 20 something films so that’s the gap now. The good news and bad news is the 12 including most of the blockbusters. So, I don’t really expect to get in a lot of blockbuster. On the other hand you will certainly get films and the shoulder period either through the 3D window or the IMAX window. I don’t know exactly what that number is going to be, but bring us closer to the U.S. number.

The next question comes from the Jim Goss of Barrington Research.

I’ve got several questions. First, you mentioned the increase in the overall studio take in China from 13% to 25%. Would you provide some potential upside on the DMR. On the flip side of that I was wondering if you perceive there to be any pushback at all from the exhibitors as to either the DMR rate or the split and joint revenue sharing agreements in the domestic markets or any other markets.

Well, I mean with the exhibitors Jim, the splits are contractual, and I don’t anticipate any pushback, because I think the increase in the film take grade isn’t coming out the exhibitors in China, its coming out of China film as a distribution fee. So the exhibitors are keeping the same percentage of box office that they had before. So I don't anticipate any push back on that. In terms of what I think was the second part of your question, on the DMR side, I mean, we had 12.5% since we launched DMR, which is I don't know about a decade ago, it hasn’t changed this demand for ourselves, the demand remains very strong, we were offered many more movies than we’re able to do, film makers really want to be in the IMAX business and I really don't see any short-term pressure.

Okay, that's good to know. And my second one is, recognizing that IMAX is very much about its proprietary technologies. I was wondering if you were at all intrigued with the Dolby Atmos initiatives, there were announcing at CinemaCon. And whether there was any chance that on that audio side that there might be something worth incorporating on a limited basis, just to see if they would further enhance your experience?

Jim, I was actually very impressed with what Dolby is doing. But there is a much lower cost solutions to the mass market. And in fact, what we do is more sophisticated than that. And in fact, this year we introduced our sound system real-time tuning of the speakers. So if one show has 200 people in it, and the next show has 400 people in it, the sound I know are so very different. By the way, half of the people don't like the movie and they walk out, the sound dynamics change in the middle of the movie. So, although I’m very impressed with what Dolby did to the mass market, I don't think it's as sophisticated as what IMAX is doing in it’s as sophisticated as what IMAX is doing in its market.

All right, good. And the last question, I was wondering just sort of as a variance on the early release schedule issue, would you ever lead-into a big sequel or series, you had said The Dark Knight Rises with the beginning of the week being the first couple of movies in the sequence. So you did Batman Begins and The Dark Knight leading into The Dark Knight Rises?

We talked about that, Jim, and I think it’s possible in certain circumstances to do that. I think the issue is on marketing, because our network doesn't have thousands of theaters, it will be a fairly high cost in doing that, but I could see as our brand efforts expand and as reservoir of our names in Internet, social media connections improve, that some point maybe being able to do that, but probably not right away.

The next question comes from Martin Pyykkonen of Wedge Partners. Please go ahead.

Just a couple of things, on the early release, Rich, just curious what sort of conversation is going on, I mean if I characterize this right with MI-4, expectations coming into it were certainly raised with the performance and early release, everybody is happy, the studio is watching. Is there discussion going on for almost any film or is it more films that maybe need an extra push with the overall marketing and the early release. I’m just curious if you’re kind of clambering for early releases, and it look like it’s hard to get to some extent or it’s a very rightful short approach for future films without naming titles, just early approach?

Martin, I apologize, because I was probably being too settle if you’re asking that question, which is there’s a pre-condition to us to doing an early release which is, it has out IMAX DNA in it meaning it have to be shot with the cameras or it has some of the special aspect ratio, there’s a pre-condition to the studio to doing it, which means it has to have a film that they see will benefit by word of mouth coming early. In terms of our pre-condition as I said they’re probably six, seven, eight films we’re working on right now that could potentially be early releases because they’re either have the special aspect ratio or they’re being film with cameras. From the studios point of view until the movie is completed or at least pretty much locked, they can’t determine whether it’s going to benefit from an early release or not. So think of it as an Airport, people circling, there is a lot of plain circling right now, but until the movies are done they can’t make that decision. So I would expect there would be early releases, but they won’t be announced until closer to the release date of the film.

So I know where your film might be different, but would say in average be let’s said it doesn’t happen till within a month of release till the studio sees well it’s tracking to the extent that they’re interested or…

No, I don’t think it’s - I mean, I don’t think the tracking, I’m sorry. I think it could be a month or 2 something like that, Martin.

Okay. And then on the Latin American deal slide, I know you don’t want to put out guidance, usually we’re not going to raise an addressable market number, but I’m just curious where the master license was redone that’s kind of behind you, are we approaching any sort of a tipping point if you will say for the back half of the year or deal flow across the continent might start to open up more or is it going to be bits and pieces, would you say?

Well I think it’s a little bit like China, where you spend some time building the ground work and as I said twice, I’ve been there twice I actually met with a number of South American exhibitors at CinemaCon, we hosted a dinner where we had 24 South American exhibitors, and there has never been an event like that before, there are number of things under discussion. And if you look back on China as an example, it didn't go from my zero to 200, it takes a little while to ramp up. So I’m not predicting this, but by way of magnitude, whereas last year we did 3 or 4 signings in South America, I would guess this year it could be 10 or 15, and then next year it could be 25. And again, please don’t take that as formal guidance. But I am just trying to give a sense of the way I see it playing out.

Okay. Last question just on Avengers, after it opened and then you get Dark Shadows obviously on May 11, I don’t know if you said this, but as of May 11th, we gain, what percentage of domestic screens will still be running Avengers versus starting Dark Shadows, have you said on that or can you say on that?

Yes, there’s 75 screens that will still be playing Avengers, and international it’s pretty much as a two-week run everywhere, Avengers. 192 international runs on a top by the way.

The next question comes from Robert Hoffman of Princeton Opportunity.

Quick question on your flexibility and it’s almost following up on Martin’s question. If Avengers turns out to be a fabulous movie and Dark Shadows is not sort of similar to what we saw with Hunger Games and Titans, what’s your flexibility in terms of swapping back, and is that changing overtime, is that an area that you can negotiate differently going forward, now that you are pretty much pure digital?

Yes, I’m not sure we are negotiate it differently but as a practical matter, I think it’s become much easier to work around. So using your example, rest of the times open pretty well, and for IMAX in the first weekend, but over time, it went down quicker, than I think we and Warner Brothers, would have liked. And as a result, we open Titanic on only about 75 screens at the time, but by the end of the second week Titanic was on most for the network, certainly more than 200 screens and 100 games came back and Warner was quite gracious in their willingness to work with us. And I think all the studios kind of get it that they have relationships with exhibitors; we have relationships with exhibitors; so it's not necessarily a contractual thing. But I'm really glad you asked that question, because I think when you look at how our business use to run, if you picked a good movie, it ran and it did very well, and if a movie didn’t work as well, you stay with it for perhaps longer than you would want to, because digital allows the flexibility for $150 for pop in a different version of the film versus $30,000 in the print world, it is much easier for us to kind of go back and forth. So yes, there is more flexibility.

Great. And then kind of a complete different question. When you - with the laser ability to improve the large screen market, would you ever envision yourselves doing JVs with the - kind of the museum market will that ever makes sense?

That’s actually, definitely a part of the plan. And we've had special screens in the ways, I didn’t mention this. But in fact, some of the people who saw the laser technology were museums, the museums typically have larger screens. So they will be a natural market for us, so the answer is yes. That will be one of the focuses for us.

Okay. If you had your brothers, would you rather have a JV or a purchase if Liberty Science Center wanting to put the new system in?

It depends entirely on the characteristics of the particular institution. So if we do lots of people and we get comfortable with the risk in the attendance we’d rather do a JV, if it's more risky proposition in a more remote area, we'd rather do a sale. So it's just a risk award analysis.

Thank you. The last question will come from David McFadgen of Cormark Securities.

Yes, just on China. Can you tell us how many theaters in the backlog at the end of Q1 or [indiscernible] for China. And then over what timeframe do you expect to take to be able to install all those?

We're getting that for you right now, David. It's about 130, but I think about 40 more this year, am I right about that, 35 to 40 something like that this year or getting. Wanda alone is 20, it’s just the guess, it will be around 30 to 40 this year. One of the characteristics of China is a lot of the theaters go and new build. So Wanda is the largest mall developer for example in China, we’re in virtually everyone of their malls. And by the way CinemaCon this week, I’ve spend a lot of time with the CEO of Wanda, and he told me that the IMAX theaters are working very well in virtually every one of their malls, and virtually everyone of their malls was working well. So, probably over the next 2 or 3 years, the vast majority of that backlog will rollout, David.

Okay, so just to clarify that. So this year you're looking for 35 to 40 installs in China?

I don’t know exactly as I said, that’s just a guesstimate. I know it’s 20 alone with one of the headers trying to find as we’re talking, just give us a second.

Can I ask you another question based on this?

Sure.

As you said that, most of these theaters and backlog for China are for new builds. How long does it take to actually build a theater from start to the finish in China?

In China?

Yes.

First of all, to answer your question, I checked that it’s 35 to 40 if my recollection was right. In terms of building a theater in China, China is one of the fastest places in the world, you can build something because there is obviously so much labor and the labor is reasonably priced. This is just anecdotal. I’m guessing, David, it’s certainly less than a year. I was over there for an event when we announced Wanda deal. And the night before it was literally a bat and ball room. And I’d say, they had constructed the most amazing set I had ever seen. So they really can do things very quickly, so again this is just my guess. But I would think they could probably do it in 6 months. You have to remember though a lot of these are part of malls, we can’t just look at it in terms of how long it takes to build the theaters, how long it takes to build the mall.

We signed a 75 theater deal in March and then we see our 2011 guidance in 3 months. Right.

Last year, the tension was they wanted to open quicker than we thought was feasible, and it wasn’t from a technical point of view for us, it was more we wanted to make sure the marketing was in place, and people are trained and the operations are right. But they were actually pushing us harder.

Okay. And sorry, if I just may be have another one, just on China gains. If for example DMAX does have some success in the market, I guess the market would probably be big enough to allow you to continue to grow quickly with it, and how would we know if DMAX is having an impact on you?

I mean, I’ll given an example, when Cinemark announced the first copycat theaters in North America, I had actually had the statistic and I remember it exactly, but I think we had like a 139 IMAX theaters, and as DMAX has gone along, we’ve opened - we’ve almost doubled our presence in North America, a little less than that. During the last 2 or 3 years, while DMAX opened their 50th theater, XD, I am sorry. XD opened here and all these [indiscernible] as China copy our name confused me, I apologize. But as they opened their theaters, our growth was roughly double what their was. So if you look at our growth of our backlog and the number of signings, it appears like the market is big enough and in fact in the U.S. kind of a copycat market has been seen by most of the exhibitors as supplement to IMAX, not a replacement. So our biggest clients like Regal and AMC also have those theaters where they can’t put an IMAX theater in. And in fact we’ve been told by China film that they see their large stream solution as a supplement to what IMAX is rather than as competitive or a replacement. Okay. So thank you all for being on the call. I don’t underestimate the power of momentum. In 2010, it was very powerful for us as you all know. In 2011, with the reliance on family entertainment film, which weren’t performing, momentum kind of worked the other way and the momentum we’ve seen in the first quarter and then accelerating in the second quarter heading into the summer movies slate seems to be quite good. It’s the movie business, so you never know what the future holds, but I feel the wind is at our backs and quite good about where we are standing today. So with that, thank you all for being on the call.

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