Good day and welcome to the IMAX Corporation's Second Quarter 2015 Earnings Conference Call. All participants are currently in a listen-only mode. Following the presentation, we will conduct a question-and-answer session . Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Teri Loxam. Please go ahead.

Thanks, Alisha. Good morning and thanks for joining us on today's second quarter 2015 earnings conference call. Joining me today in our New York office is our CFO, Joe Sparacio, who will have prepared remarks, and Rob Lister, Chief Legal Officer, and Head of Business Development. In addition our CEO, Rich Gelfond, who will also have prepared remarks, is joining us remotely from Vienna where he's attending the global premiere of Mission Impossible 5 tonight. The premiere is being held at the Vienna Opera House, one of the most iconic locations in the world and has been retrofitted into an IMAX theater, which is the way Paramount and Tom Cruise wanted to position the movie for global audiences. Also with Rich in Vienna is Andrew Cripps, our President of EMEA Sales. He will also be available for questions during the Q&A section of the presentation. In addition, Greg Foster, our Head of Entertainment, is joining us remotely from Los Angeles and he will be available for Q&A. I would like to 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 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 more detailed discussion of some of the factors that could affect our future results or 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 reconciliation to adjust EPS and adjusted EBITDA as defined by our credit facility are contained in this morning's press release. The…

Thank you, sir. We'll go first to Steve Handler (sic) [Eric Handler] (19:27) of MKM Partners.

Yeah. Thanks. That would be Eric Handler. But anyway, two quick questions for you guys. First, with regard to the IMAX China IPO, can you tell us what milestones are next to come before you actually can price the deal? And then secondly, for Joe, looking at free cash flow this year, you seem you have a higher working capital expense going on. You've got higher CapEx more front-loaded. So just wondered how that should pan out in the back half of the year and how we should think about CapEx and free cash flow for the full year. Richard L. Gelfond - Chief Executive Officer & Director: So I'll take the first question, Eric. It's Rich. The milestones that you should look for, although, I don't believe we'll publicly announce them, and as I said during my remarks, we're not going to comment on specific timing or that we have a formal hearing before the Hong Kong Stock Exchange. Obviously there's interaction before the formal hearing where you get formal approval of the list. You get reports from equity analysts. It's done slightly differently in Hong Kong than it's done on other markets. So before you actually start your road show you get analyst reports which set out their opinions on valuation. And then after that you start your road show and you list and those would be the steps that would happen. Joe, do you want to answer the other question? Joseph Sparacio - Chief Financial Officer & Executive Vice President: Sure. In terms of the CapEx, Eric, for the rest of the year, I think it's really geared towards the JV investments, the spending on Playa Vista is basically completed this point. And then you'll have some general CapEx as well, but, certainly not at the run rate that we're running in the first six months. In terms of working capital items, this quarter is a blip because of the high levels of box office and, as you're aware, our big JV deals settled with quarter after, so you're not going to see the cash impact from our earnings in the second quarter until really the third quarter. So I would expect that to even out through the rest of the year.

Thank you very much.

We'll go next to Steven Frankel of Dougherty. Steven B. Frankel - Dougherty & Co. LLC: Good afternoon. Film marketing was big in the quarter. What should we anticipate you spending on the marketing side between now and the end of the year? Richard L. Gelfond - Chief Executive Officer & Director: Joe, do you want to answer that? Joseph Sparacio - Chief Financial Officer & Executive Vice President: Yeah, let me just pull that out. Hold on a second. So we would anticipate a marketing spend probably in the neighborhood of about $10 million for the full year, not for the half-year, for the full year. Steven B. Frankel - Dougherty & Co. LLC: Okay. And for Greg, so with the ARRI JV you can have a lot more films using the cameras. How do you balance – wanted to have IMAX DNA in as many films as possible and not having so many that you kind of dilute the specialness of it? Greg Foster - Senior Executive VP & CEO-IMAX Entertainment: So that's absolutely the right question and that's precisely what we're doing. We're being very discreet about dealing with the supply/demand ratio. Many of you have heard me say we've turned down four or five, sometimes six movies for every movie we say yes to and the same thing that's starting to be the case with cameras. The ARRI partnership has been fantastic. We are also working very hard on the development side of adding additional DNA, IMAX specific DNA into the camera. We've had a tremendous reaction, as you've already seen from the Avengers people, from Luc Besson, from Captain America, et cetera. There is more coming. And we're going to be careful not to have every movie have specific IMAX DNA and cameras to it…

We will go next to James Marsh of Piper Jaffray. James M. Marsh - Piper Jaffray & Co (Broker): Great. Two quick questions. First, maybe just a follow up on the IMAX DNA comments you made earlier, Rich. Any chance to have more IMAX DNA showing up in foreign DMR films? Then just the second question probably – largely for Joe, but relates to foreign exchange. Any estimate on what PSAs might have looked like if currency was constant? And then just as far as the currency impact on system sales, it sounds like maybe that's had a little bit of impact on Latin America, but just wondering if you're seeing much impact on system sales outside the U.S.? Richard L. Gelfond - Chief Executive Officer & Director: So I'll answer the first one about foreign DMR films, the answer is yes, James, and in fact, after we're done with the whole question, Greg ought to circle back, but there are Chinese films where we're committed to using our cameras. We're – obviously, we announced that Luc Besson film that is using an IMAX camera. We're talking to people in Russia about it. So there's no doubt in my mind and we're even in discussions about keeping some of the cameras outside the U.S. So, yes, there will be more foreign DMR and Greg should add at the end. The second question you asked about the currency, is that affecting sales. As you know I'm in Vienna and Andrew Cripps, who runs international for us, is with me. So, Andrew, do you think that the strength of the U.S. dollar has had an impact on sales? Andrew Cripps - Executive Vice President & President-EMEA Region: It's had a minor effect in places like Russia where there's been a tremendous devaluation…

We'll go next to Ben Mogil of Stifel. Kevin Hon Siong Lee - Stifel, Nicolaus & Co., Inc.: Good morning. This is actually Kevin Lee for Ben. A quick question for you on the screen installation guidance increase. Can you kind of give us a sense of what's driving that and geographically where those installations are coming from? Thank you. Richard L. Gelfond - Chief Executive Officer & Director: So the first part of the question, I think what's driving it are a couple of things. First of all, the year is such a blockbuster driven year and the blockbusters are performing so well in IMAX that people are trying to get open before some of these movies come out, so it wouldn't surprise you that if you were going to open a theater on January 1 this year you would try to get it open two weeks earlier to get it open in time to play Star Wars day and day. Using some of our previous history, if you get a theater open in time for a real blockbuster you can achieve a lot of your payback very quickly. The other thing we're seeing is a return to more sign and installs. So, as you know, you can do new builds or you can do theaters that sign and install at the same time and, for whatever reason, I think it probably is movie driven reason plus trend line reason where people really see the results of having an IMAX theater versus a regular screen. I think people have gone back to doing more retrofits, they did in the past. So if you look at past years, almost all of our signings or a lot of them were for new builds and at the beginning of the year we do a budget for sign and installs during a particular year and there are a lot of examples. There are people like the Vue in the U.K. There's, in China, a big player, SFC, that's done a number of sign and installs, so there are just more people retrofitting their theaters. So I think those are primarily the two factors. Kevin Hon Siong Lee - Stifel, Nicolaus & Co., Inc.: Thank you. And geographically is it one way or the other more China, U.S., or...? Richard L. Gelfond - Chief Executive Officer & Director: I haven't seen a breakdown on it, but I can tell you that there have been a number in Europe and there have been a number in China and a couple in the U.S. Kevin Hon Siong Lee - Stifel, Nicolaus & Co., Inc.: Thank you very much. Richard L. Gelfond - Chief Executive Officer & Director: Thank you.

We'll go next to Townsend Buckles of JPMorgan.

Rich, with these strong box office results and a very promising slate for Q4 that's already spurring faster installs. How have you seen your box office as a catalyst to new signings in the past? Would you expect an acceleration in signings ahead over the next few quarters and could the installed base remain elevated further out, do you think? Richard L. Gelfond - Chief Executive Officer & Director: Townsend, ordinarily you're putting a finger on something that we usually call the Avatar effect. When Avatar came out, our pace of signings went up very quickly. So, in the past we have seen an increase in box office performance lead to an increase in signings. This year's a little bit different because it's not just one movie, it's kind of a lot of movies and it's around the globe. But you're also in an environment which we had some questions on before where the dollar is a little bit stronger. So, I've not seen the Avatar effect take effect yet, but I would expect to see it and I hope to see it in the back half of the year.

And your new signings this year skewing a bit more toward sales over JVs. Anything unique there whether it's a function of geographies or customer preference, is that a trend you're seeing going forward? Richard L. Gelfond - Chief Executive Officer & Director: Going forward, it's really hard to tell because it depends what markets you go into and how far out the projects are and the expected box office. But I think it's happening this year for a couple of reasons. One, I think the slate is so good, I think some of our partners would rather put up the capital themselves rather than share it with us which I – that, to me, is a short-term issue. I don't think that's going to be a long-term issue. The other issue would be when you see retrofits rather than new builds for some reason those seem to come with sales-type leases rather than joint ventures. So, again, I always hesitate, Townsend, to take a short-term thing that's happened through one or two quarters and say it changes the way you look at your business. As you know, the trajectory of our business over a number of years has been 50/50. The short-term has been a little bit different, but I don't really expect that to be the long-term.

Got it. Thank you, Rich. Richard L. Gelfond - Chief Executive Officer & Director: Thanks.

We'll go next to Eric Wold of B. Riley. Eric Wold - B. Riley & Co. LLC: Thank you. A couple of questions, one, kind of looking at China box office in the quarter (34:48) what is the mix there between local language content and Hollywood? And kind of what have you been seeing if you drill in, in those two, in terms of the underlying IMAX share of box office on Hollywood films versus local language? How does that been trending over the past year or couple of quarters? Richard L. Gelfond - Chief Executive Officer & Director: I'll answer it generally, and then I'll turn it over to Greg to be more specific. But the second quarter was just such a great quarter for Hollywood product, when you look at the films that were playing there, the Fast and Furious and Jurassic World and Avengers did so well in China as well as the rest of the world that it kind of wiped out the whole box office during that quarter. There wasn't a lot of time to show a lot else, so I don't think you can – it was way more dependent on Hollywood than it was on China. I think longer-term in China as more money – as their box office continues to grow as it has historically over the last number of years, I think you'll see more money going into production value in China. You'll see more releases of Chinese movies and I think you'll see more releases of Chinese movies and that's why our position of playing both movies is where we like to be. So, the record opening we had this weekend for Monster Hunt was almost double what our previous weekend opening was for Mandarin language film. Again, I certainly…

We'll go next to Mike Hickey of The Benchmark Company.

Hey, guys, great quarter. Thanks for taking my questions. Just curious your view on online ticket pricing in China. How much this may have added to the recent strength in the box office in that region in your performance, I guess. And how long do you think this discounting can sustain? And I have a follow up. Richard L. Gelfond - Chief Executive Officer & Director: As far as we can tell, it's not involved in the IMAX box office and we've actually – I don't want to lead you to believe that we've done a detailed study. But we don't think it's had an impact on IMAX. In terms of its impact on the rest of the box office, you know I was over there about a month ago and there's a lot of speculation but no one seems to know the facts and since it doesn't really relate to us we haven't paid much attention to it.

Okay, thank you. And then curious you'd be on competition from domestic POS solutions, particularly wondering you'd be on Dolby solution that seems to generate some support from the industry and if you think this could be impactful to your domestic business in the future? Richard L. Gelfond - Chief Executive Officer & Director: I mean, we just came off what is probably our best domestic quarter ever and we keep getting better and better as POS in general continue to proliferate including Dolby. We've always said there's room for good, better, best and we positioned ourselves as best and we've aligned ourselves with the right filmmakers. Things like premieres and cameras and an end-to-end solution. We're the only one really offering a differentiated experience with the kind of brand. You look at the data over the last several years and percentage of multiplex and IMAX has gotten and has steadily increased as the number of POS has increased. You look at performance on specific films especially these big blockbuster films. PSAs and IMAX continue to significantly outperform the POS. So, I think it's a final alternative for people who want it. I think it's probably a good business for the exhibitors but I don't really see it as a threat to us. In terms of Dolby, we're approaching our 1,000 screen and Dolby has 5 screens. So I don't really see that as a material threat at the moment, either.

Fair enough. Thanks, guys. Good luck.

We'll go next to Matthew Brooks from Macquarie. Matthew Brooks - Macquarie Capital (USA), Inc.: Good morning, guys. I was just wondering if it's possible for you to specify separately the revenue you got in Greater China, also signings backlog and whether you can say the IPO expenses. Richard L. Gelfond - Chief Executive Officer & Director: Well, I'll start. The first part which is the IPO expenses that we've expensed in the quarter were about $1 million. And there are IPO expenses that are kind of held in advance and you amortize them against the deal when you have it. But, I'm not going to disclose that right now because that's not the road we're heading on. Joe, do you want to answer the other parts of the question? Joseph Sparacio - Chief Financial Officer & Executive Vice President: Yeah, I'm just – just take a second to look that up, it's in the... Matthew Brooks - Macquarie Capital (USA), Inc.: While he's looking that up, maybe you can make some sort of comment. You've had the display now I think in Shanghai for a while now – the new home product. Do you have any more thoughts on maybe how many of those you might be able to install in a year based on maybe the level of interest you've got so far from the demo? Richard L. Gelfond - Chief Executive Officer & Director: Yeah, we had a number of leads – significant number of leads coming from the various demos we've had. But it's premature I mean, this just happened a month or two ago to draw a conclusions as to what the size of the market or how many converted to actual sales. Joseph Sparacio - Chief Financial Officer & Executive Vice President: In terms…

We'll go next to Jim Goss with Barrington Research.

Thanks. First I was noticing – I believe I counted only three of the 14 films on that early release syndication for 2016 that were in 3D, and I realize you're indifferent about 2D versus 3D, but I was wondering what's driving that discussion and do you have almost greater exclusivity if it is an IMAX 2D versus a 3D? Richard L. Gelfond - Chief Executive Officer & Director: Greg? Greg Foster - Senior Executive VP & CEO-IMAX Entertainment: Jim, your first point is the most accurate one, which is we really don't make decisions based on whether they are 2D or 3D. We do what we think is the best IMAX movie. Obviously, you point out, there's 14 films that have been announced, but we've been very clear about the fact, and this year is proving to be the case. We'll do 40 or more movies this year we'll do 40 or more movies next year. So, the question is not about what 14 films we've announced, but what 25 films or so we haven't. An example of two exclusivities that are both 3D-focused are Everest and The Walk. So, we really don't make the decisions. We do like 2D movies, Mission Impossible is a 2D movie, there's plenty of them coming up. But we can't pick our movies based on whether they are 2D or 3D because – then we'd miss out on terrific movies and again our goal is to find 52 weeks of compelling content and that's really the only focus we have.

Okay. Also with the early – or the acceleration of the install pattern to earlier in the year, is the fact that you are increasingly international in that expansion driving that factor and are there other metric shifts you anticipate given the increasingly international footprint? Richard L. Gelfond - Chief Executive Officer & Director: You know, Jim, again as I said to an earlier question, I'm one of the most reluctant people to say after a quarter that it starts to trend. So, I think it's way too early to say that the matrix have really changed. As you know, our international PSAs have been better than our domestic PSAs. Although this quarter, the domestic PSAs were extremely strong. As you also know, because we address it during our formal remarks, international is much less penetrated than domestic. So, I think those are kind of positive trends, but we'll see whether they continue or not.

Okay. And lastly, the China financial market turmoil, you said it's not going to affect the IPO. How does that affect the timetable or can you just pick your spot in terms of when it actually takes place and it just depends on how you're analyzing the situation? Richard L. Gelfond - Chief Executive Officer & Director: Jim, just to be clear, I said that it has not altered our plans. You should know that the volatility in the Chinese market has been way more centered on Mainland China than it's been centered in Hong Kong and the run-up wasn't similar to Hong Kong as it was in Mainland China and the direction wasn't the same in Mainland China as it was in Hong Kong. So, that's the environment we're looking at. But you need two factors to do an IPO. You need a company to be performing well and you need an external market that's receptive to it. And I'm just not going to make predictions about the latter at the present time and we still have plans to do it and we'll keep you posted.

We'll take our last question from Rob Peters of Credit Suisse.

Thanks very much for taking my question and, Rich, it sounds like you've got a better view than most of us this morning. Just maybe for Greg, when you look at the blackout that you're seeing in China right now and the ability to kind of bring local language films into that spot, I was just wondering, a lot of the times you guys were saying, when you're getting IMAX DNA into the film you're turning away a number of films that want to work with you. When these blackouts do come up, is that kind of a similar situation in China where you've got a lot of local language studios already kind of knocking at your door that it's just a matter of opening it up and say, all right, we'll do this, this, and this or is it a matter that you have to kind of go out and find these films? Greg Foster - Senior Executive VP & CEO-IMAX Entertainment: No, it's the former. An example is when we realize that the blackout period was going to be extended from its normal drop-off which is at the end of July into the second half of August, our team in China as well as Anthony Vogels from our L.A. office met in Beijing and I believe in a three-day period saw 14 movies that were offered to us. So, we're able to – I don't want to say pick and choose because it's a partnership and it's incredibly collaborative and we have to obviously have the relationships with the filmmakers and the studios – but, we're in a fortunate position given the fact that the brand and the box office have been working so far as you've seen from the last – first half of the year to be able to have a little bit more of an interactive conversation about what makes the most sense for us and then we make what we think is the best business and partnership decision going forward. So, I hope that answers your question.

At this time, that's all the time we have for questions. I'll turn the call back over to Ms. Loxam for any additional or closing comments.

Thanks, Alisha. Before turning it back over to Rich to close the call, I wanted to let you all know that today is my last earnings call with IMAX as I'll be leaving to pursue a new opportunity. I was not looking to leave, but a terrific opportunity was offered to me and I had to take it, despite all the exciting things that are happening at IMAX. My time at IMAX, and my interactions with the IMAX team as well as all of our shareholders and analysts have truly been amazing and I'll forever be a fan and supporter of the company. I'll be around for the next few weeks to ensure a smooth transition and I'll be able to share more details about my new job over that time. My predecessor and IMAX veteran, Heather Anthony, who was been heading up our budgeting and financial analysis activities, will be stepping back into IR on an interim basis until a full time replacement is found. And with that, I'll turn it back over to Rich Gelfond for some closing comments. Richard L. Gelfond - Chief Executive Officer & Director: Okay. Thanks, Teri, and thank you Teri for all the great work you've done over the last couple of years. So when you look at the company through two kind of silos, you just have to be extremely pleased with where the quarter is and where the first half of the year is. So we've done over $0.5 billion in box office for the first half of the year. And although, when you talk about domestic and international, you would mix apples and oranges, but by any measure a year that's going to approach $1 billion in box office is just quite a statement about where we've come over a period of time. During the quarter, we beat virtually every matrix that we could be measured against. So we're delivering financially. But as I say very frequently on these calls, one of the key things for me is really where you stand in the ecosystem and where you stand as a company and are you making progress? And I think, whether it's the scope of the things we're looking at from – we now have a film fund in China we announced, we now have a documentary film fund. We have an in-home product we're looking at. We really built out our scope as well as the ecosystem in the substance where there really isn't a major blockbuster film that's coming out where we're not a part of the release pattern and we're not in the mix with the director and the producer and the studio. So, I feel very gratified by not only the quarter's results but the strategic progress we've made over the year so far. And I think given the film slate particularly for the fourth quarter I think there's reason for optimism for the rest of the year. Thank you, everybody.

That does conclude our conference for today. We thank you for your participation.