Brad Wechsler – Co-Chairman & Co-CEO Rich Gelfond – Co-Chairman & Co-CEO Joe Sparacio – EVP & CFO

Eric Wold – Merriman Curhan Ford Richard Ingrassia – Roth Capital Partners Jeff Blaeser – Morgan Joseph David Lu – Hedgehog Capital

Welcome to IMAX Corporation’s Q2 2008 earnings conference call. Please note that today's call is being recorded. At this time, I would like to turn the conference over to Brad Wechsler for opening remarks and introductions. Please go ahead, sir.

Thank you very much, operator. Good morning everyone, and thank you for joining us on today's second quarter conference call. Joining me is my partner, Co-Chairman and Co-CEO Rich Gelfond. Also, with us today, our CFO Joe Sparacio, also, our General Counsel Rob Lister, and our Head of Investor Relations, Heather Anthony. Before we begin, let me remind you the following information regarding forward-looking statements. Our comments and answers to your answers on this call may include statements that are forward looking, in that they pertain to future results or occurrences. 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 sales or future results and occurrences. During today's call, references may be made to certain non-GAAP financial measures as defined by Reg G of the Securities and Exchange Commission. The full text of our second quarter release along with supporting financial tables is available on our web site, www.imax.com. Today's conference call is being web cast in its entirety on our web site. Today, we will start reviewing our progress related to our strategic initiatives and briefly recap our quarterly results. Then I will turn it over to Rich to take you through our film performance and future outlook as we work toward improved financial results. So to jump right in, while we are very pleased with the significant strategic progress made thus far in 2008, our financial results do not yet reflect the pieces being put in place that we believe will return IMAX to profitability. This is due to a number of factors including our transition to digital and lower than expected film performance during the first half of the year. Each of which has put substantial near-term pressure on our top and bottom lines. As we look at the business today; however, we believe that having a total of approximately 50 digital systems in operation by year-end, coupled with a record breaking performance of "The Dark Knight", and the rest of our 2008 and 2009 film slate, will lead to improved financial results in the second half of 2008 and profitability in 2009. As I mentioned, we are very pleased with the strategic progress we have made over the past several months. We shipped and installed our first digital system as planned, and our rollout remains on schedule, which I will elaborate on in a second. We expanded our relationship with DreamWorks Animation, which now spans five films. We signed our first-ever international joint venture digital deals in Australia and Japan. We secured the necessary funding to support our growth. Through the record and ground breaking release, IMAX release of "The Dark Knight", we heightened both the public's and Hollywood's awareness of IMAX, and we continue to fill our film slate with prominent movies that lend themselves to the IMAX experience as evidenced by the four new titles announced this morning. We believe that all of these factors taken together position us well for significant future growth. Moving on to our financial results. As we have indicated in the past, we anticipate most of 2008 to be challenging from a financial perspective as we introduce our digital technology into the marketplace. Consistent with this, we recorded a second quarter net loss of $12.2 million or $0.29 per diluted share compared to a net loss of $4.5 million or $0.11 per share in the year ago period. Total revenue for the second quarter was $21.2 million compared to $27.1 million last year. Systems revenue was $10.6 million compared to $14.0 million last year. Although, we physically installed four systems in the quarter, we only recognized revenue on two compared to last year's second quarter. When I refer to physically installing, I mean, of our four installations, two were for systems where we have future obligations to upgrade to digital and therefore we cannot recognize revenue until the actual upgrade. Film revenue was $6.6 million compared to $8.0 million last year. Film production in IMAX DMR revenues decreased to $2.5 million in the second quarter from $3.8 million a year ago. Theater operations and other revenue were $4.0 million in the quarter compared to $5.1 million last year. This decrease in both film and theater operations revenue reflects lower year-over-year film performance given the last year's highly successful DMR release of "Spider-Man 3" versus disappointing results for our early 2008 films, particularly "Speed Racer". As we have commented in the past, we view our DMR films as something of a portfolio. While the first half underperformed, we believe the strength of our second half lineup should make up for much the softness experienced thus far. To that end, we are delighted to have kicked off the third quarter with "The Dark Knight" as Rich will elaborate upon later in the call. On an absolute dollar basis, SG&A was flat to last year at approximately $11.2 million. R&D increased to $2.0 million from $1.1 million last year, reflecting costs associated with the investments we are making in our digital technologies. Turning to the balance sheet, we ended the quarter with $24.6 million in cash, up from cash and short-term investments of $16.9 million at year-end, and $18.5 million a year ago. Our increased cash position includes the private placement sale in May of this year of approximately 2.7 million common shares at market price and resulting proceeds of approximately $18 million. In addition, during the quarter, we made our bi-annual interest payments on our senior notes of $7.7 million and invested $3.6 million related to equipment purchases for our joint venture strategy. Subsequent to the quarter end, we drew down approximately $10 million of our current credit facility for added cushion as we commenced our JV digital roll out. We remain confident that the combination of our cash position and our credit facility will be able to fund our future expansion. During the quarter, we signed agreements for six theater systems same as last year. Through the first six months, we have signed agreements for 72 theater systems compared to 19 new signings in the same period last year. In fact, we ended the second quarter with a record backlog consisting of 246 systems with a value of roughly $153 million including 139 joint venture arrangements. This compares to a total backlog of 79 systems with a value of $123.7 million last year, including three joint venture arrangements. As a reminder, joint venture arrangements carry no backlog value. Moving on to our most important strategic initiative, in June, we commenced our digital roll out as scheduled which was quite an ambitious timeline. At the end of June, we shift our first three digital systems, the AMC Hoffmann IMAX and AMC Potomac Mills IMAX in the Washington, D.C. area and the AMC Columbia IMAX Theater in Baltimore. Following a period of operational training and system testing, the theaters were fully operational in mid July. Overall, the installs went smoothly, and anecdotally, we have received feedback from the operators that define the system is friendly – very friendly to use. Importantly, to date, we have been 100% operational. We have not lost any shows since we went live three weeks ago. This is a great milestone for our company and the first important step toward what we believe will be unprecedented growth for IMAX in the coming years. At the end of July, we shipped our second three digital systems, the AMC Cherry Hill 24, the AMC Hamilton 24, and the AMC Neshaminy 24, all in the Philadelphia market. These installations are also currently on track and we expect to be up and running next weekend as planned. We are pleased with our digital – with our initial progress and continue to expect approximately 20 digital installs in the third quarter, and up to 30 digital installs in the fourth quarter. At this time, we anticipate that approximately 40 digital systems will be in operation for "Madagascar 2" and Harry Potter VI in November. Again, we want to reiterate how pleased we are with the strategic progress being made on all fronts. Execution of our digital roll out is on track. Our future film slate is building, our studio relationships are expanding, and we believe the caliber of the films we are sliding into our slate are very strong. We are comfortable that we have the necessary financing in place to fund our joint venture initiative. Our pipeline of potential new business remains robust. We have the largest systems backlog in our history, which reflects the buy-in we are getting from the theater exhibitors regarding our joint venture model. Before I turn the call over to Rich, let me re-emphasize the three main business drivers positioning us for future growth. First, the IMAX brand and its proven track record of delivering differentiated premium movie-going experiences is driving our growth in the commercial entertainment business. Second, the advent of digital projection virtually eliminates the film print costs the studios have had to incur which should result in our ability to show 10 to 12 Hollywood films a year as opposed to six to seven films historically. More content should translate into more revenue and per theater profitability. To date we have signed contracts for 189 IMAX digital theater systems. Third, our joint venture business model significantly lowers the upfront investment exhibitors have historically had to incur, down to about $150,000 compared to approximately $1.5 million in recent history. From our perspective, contributing the system in exchange for a percentage of box office, gives us greater recurring revenue and increased visibility. It helps fuel the acceleration of network growth. We have been working extremely hard particularly from a technology standpoint to make the IMAX business easy and profitable for ourselves as well as our two key business constituencies, exhibitors and studios. The first half of this year featured very significant progress towards that goal. With that, I would like to turn it over to Rich.

Thanks, Brad. I would like to begin by taking you through our film slate, recent joint venture deals, and business outlook for the remainder of 2008. As discussed in our last call, in April, we released Paramount Pictures "Shine A Light The IMAX Experience” which grossed $4.6 million worldwide as of quarter end. On May 9, we released “Speed Racer The IMAX Experience” in partnership with Warner Brothers Pictures which resulted in $5.3 million in box office for the quarter or $44,000 per screen. Although the film's gross was significantly lower than expected, we should underscore that IMAX accounted for approximately 10% of the overall domestic box office, a little more than 1% of the North American screens. In June, we released the IMAX version of "Kung Fu Panda". The first of our five picture deals with DreamWorks Animation. The DreamWorks Animation film is a great success worldwide and the IMAX version has yielded $11.7 million in worldwide box office to date. As Brad alluded to, while our first half film performance was lower than we would have liked, we believe the strength of our second half titles should make up for much of the shortfall and help us finish the year on a positive note, which is a perfect segue into "The Dark Knight" which has exceeded our expectations and appears to be nothing short of a phenomenon. In addition to a fantastic script and great performances from the cast, we believe visionary Director Chris Nolan's groundbreaking use of IMAX cameras to shoot the film's six biggest action sequences has provided a unique draw for audiences seeking event-type movie going that the IMAX experience delivers. By using IMAX cameras, Chris Nolan took advantage of IMAX's full screen aspect ratio to advance the dramatic effect of these sequences. For those of you that haven't seen the film in IMAX, the action morphs to the larger screen size at these key points in the film expanding the image to fill the entire screen and injecting the film with even more excitement and drama. We are grateful to Chris for his vision and expanding the bounds of the IMAX experience. To us, even more exciting than a record opening weekend and round the clock sellout that tested our worldwide networks capacity constraints, is the (inaudible) the film has demonstrating. Through Tuesday, on 2% of the screens, we have grossed approximately $26.3 million of the approximately $400 million domestic box office or $279,000 per screen. Worldwide, our gross box office is approximately $32 million or $257,000 per screen on less than 1% of the screens. This past weekend, domestically, we experienced the modest 16% drop from the prior weekend, which, to give you some perspective compares to the overall film dropping about 40%. The film grossed $4 million in IMAX domestically this weekend making it the biggest third weekend for us on record and yielding a tremendous $42,000 per screen three weekends into the run. We believe that many moviegoers have waited to see the film so they could see it in IMAX and that many others have gone back to see the film in IMAX if they have not seen it in 35-millimeter. Our phones are ringing with people who can't get in to the New York Theater here for about a week because of advanced sellouts and that's still held up even though we are over three weeks into the run. Our view is that IMAX is becoming synonymous with event-type movie-going experiences, which we believe is driving substantial studio, exhibiter, and consumer interest in the IMAX experience. At $32 million worldwide, the movie has set a new IMAX DMR 2D record and is poised to surpass Harry Potter V with 3-D screens, which did $38 million. Our all time record remains “Polar Express 3-D” in 2004, which did $45 million. In many ways the biggest obstacle impeding our ability to do more business has been the current size of our network, which as many of you know is poised to more than double worldwide by 2010. In fact, based upon our backlog, the number of IMAX theaters in North American Multiplexes should nearly triple in the next few years. The interest and demand for “The Dark Knight The IMAX Experience”, demonstrates once again that consumers are willing to pay a premium for differentiated movie going experience, and the continued sellouts, long lines, unprecedented media, and general buzz surrounding the IMAX release shows how consumers are hungry for such a unique experience in the theater. Looking ahead, we were in the final stages of completing our '08 film slate. Following "The Dark Knight", today we announced that on September 26, we will debut an IMAX version of DreamWorks Pictures and Paramount's "Eagle Eye". "Eagle Eye", an action thriller starring Shia LaBeouf who re-teams with "Disturbia" director D.J. Caruso, marks our 30th DMR film. After that, “Madagascar 2 The IMAX Experience”, the second installment of our five picture deal with DreamWorks Animation will open on November 7th for a two week run. As Brad mentioned, we expect approximately 40 digital theaters will be up and running in time to exhibit this film. "Madagascar 2" will be followed by the release of Warner Brothers' highly anticipated "Harry Potter and the Half-Blood Prince" on November 21. As with the previous Harry Potter installment which features the last 17 minutes of the film in IMAX 3-D, we believe this film will include approximately 25 minutes in IMAX 3-D split between the opening sequence of the film and the finale. As I mentioned, the last “Harry Potter V” grossed $38 million on 153 screens or approximately $247,000 per screen, and we expect this November's Harry Potter release to be significantly wider because of us having approximately 40 additional digital screens in operation. All told, we expect to have eight first run Hollywood films in 2008 versus five in 2007, and our 2009 slate is starting to come together nicely. As a reminder, as we significantly increased the number of joint venture revenue sharing deals we sign, the number of films we offer, as well as the success of those films will have a greater impact on our financial performance as we will receive a greater percentage of the box office. As a result, our film selection process is becoming even more rigorous. On March 6 of next year, we will release “Watchmen The IMAX Experience”. The film adaptation of the critically acclaimed graphic novel with our partners at Warner Brothers which is distributing the film domestically and Paramount which is distributing the film internationally. "Watchmen" is being directed by Zack Snyder that directed the highly successful "300". "Watchmen" will be followed three weeks later with the release to IMAX theaters of DreamWorks Animations first 3-D film, "Monsters vs. Aliens". In addition, we are pleased to have reached agreement on material terms for the release of IMAX versions of the following two films, and we expect to finalize the paperwork shortly. 20th Century Fox's "Night at the Museum 2, Escape From the Smithsonian" starring Ben Stiller, Amy Adams and Owen Wilson, is opening on May 22. "Night at the Museum 2" marks our fourth Fox film and follows our successful collaboration on the first “Night at the Museum", in December 2006, which grossed $18.3 million in IMAX or $162,000 per screen. We are delighted to be expanding our relationship with our partners at 20th Century Fox. The second film is DreamWorks pictures and Paramount's "Transformers, Revenge of the Fallen" in IMAX on June 26 of next year. We were pleased to be expanding our relationship with DreamWorks and Paramount as well as with Michael Bay, whose brand of action packed film making plays right into IMAX's core customer demographic. Thus far, we have announced five films for 2009 including “Under the Sea 3-D” an original IMAX film being released in partnership with Warner Brothers, and the film I just mentioned, DreamWorks Animation “Monsters vs. Aliens 3-D”, and we certainly anticipate making more film announcements in the weeks and months ahead. In fact, beyond these films, we are currently in discussions regarding a substantial number of film projects with virtually every major studio. As we have discussed in the past, more content translates into increased revenue for exhibitors and should contribute to the accelerated growth of the IMAX network worldwide. Commensurate with our digital roll out, as many of you know, we have also introduced our new joint venture business model. Under the JV structure, the exhibiter contributes the cost to converting the theater and we contribute the system in return for a significant part of the IMAX box office from the theaters. The strategic rationale being that we could expand the network much more rapidly and drive greater recurring revenue from both the joint venture on the exhibiter side and the film revenue on the studio side into our business. In addition to our 100-theater JV with AMC and 30 plus theater JV with Regal, we continue to experience interest in our joint venture business model evidenced by our recently announced international deals with Hoyts Cinemas in Australia and Tokyu Cinemas in Japan. We are extremely pleased with these two deals. We hope that once these exhibitors are up and running, we could build upon these relationships similar to how we started with AMC and Regal. For example, you may recall that our AMC joint venture relationship initially began with five theaters and our Regal JV relationship initially began with two theaters. We are confident our relationships with Hoyts and Tokyu, and the performance of these key international theaters will pave the way to additional IMAX digital systems with even more global exhibition partners. As discussed last quarter, much of 2008 will be negatively impacted by our digital transition, which is reflected in our increased R&D costs, installations being delayed by clients wanting to obtain a digital system rather than a film system, and our inability under the accounting rules to recognize revenue on systems where we are required to provide a digital upgrade. As Brad mentioned, we expect that the roll out of our digital systems in the back half of 2008 will lay the foundation for improved second half financial performance, and we continue to expect fiscal 2009 to be profitable. In 2008, we expect to install approximately 40 joint ventures and recognize revenue on 15 sales or sales-type leases from our current backlog. Additionally, we anticipate approximately ten sign and installs including four JV theaters, which are systems that install the same calendar year they are signed, and thus not in backlog at the start of the year. As usual, we should caution you that projected installation are always subject to slippage for reasons generally outside of our control. Before we open it up to questions, I just like to re-iterate how energized we are by the positive catalysts unfolding here at IMAX. We have officially entered into the digital era and are on track to have roughly 50 digital systems in operation by year-end. The early execution of our roll out has gone very smoothly thus far, a testament to all of our cross-functional teams successfully working together, and particularly our technology area, which deserves an enormous amount of credit. "The Dark Knight" is a cultural phenomenon that has impacted our company as positively as any development in recent memory. The popularity of the film particularly in the IMAX format is testing our capacity constraints, a high class problem that should start to remedy itself as we begin roll out of our AMC and Regal joint ventures in the second half and into 2009 and 2010. In addition, we believe that Chris Nolan's use of IMAX cameras has created interest among other prominent Hollywood filmmakers, which may result in more films down the road being shot in part or in whole with IMAX cameras. Hollywood is increasingly embracing IMAX as an important distribution channel, which is resulting in our beginning to experience another high-class problem having to turn down film, scheduled to debut, and competing time slots. An exhibiter interest in our joint venture model remains very strong. Finally, if you take a look at our network growth and the acceleration of that growth, we are optimistic about our future prospects. Based on our current backlog, our domestic commercial footprint is expected to grow to 250 theaters by the end of 2010 from approximately 100 commercial theaters at the end of 2007, and our worldwide commercial theater network is projected to more than double, growing to approximately 400 by the end of 2010 from roughly 180 at the end of 2007. Importantly, after we incorporate these IMAX screens, we believe that we will have only tapped into roughly 40% of our identifiable market worldwide. So, we still have the potential for significant growth ahead of us. We look forward to reporting you on our continued progress as we work to deliver enhanced value for our shareholders. With that we would like to thank you for listening and for supporting us over the years and open the call to take your questions.

Thank you, sir. (Operator instructions) Our first question will come from Eric Wold of Merriman Curhan Ford, please go ahead. Eric Wold – Merriman Curhan Ford: Hi, good morning, couple of questions. One, looking at the film slate for next year, between "Watchmen" and "Monsters vs. Aliens", assuming the dates don't change for these releases, they are about three weeks apart to the release date, kind of give us a sense of– is that really the sign of your ability to kind of get movies done and profit much quicker under the digital world, and then should we expect about that level between most films in '09 and 2010?

Actually, I think, three weeks is probably a little short, Eric. I think, probably the more typical time between films will be four or five weeks. In this instance, though, because of the advent of digital, we were able to amortize of cost of the prints over a much broader network, meaning there will be a film release which still costs $20,000 a print; however, there will also a significant digital release which will be very inexpensive. So, therefore the average cost comes down. In this instance, Eric, I think digital enabled it to happen, but it was more or less just the timing of the release date for films, not a strategic shift in our thinking, and I think – as I said, I think it is going to be four or five weeks, but I think we will be opportunistic in cases like this year where we only have two weeks to run "Madagascar", that's what we'll do, and I think you will see some of that next year, but, I think ideally it would have a little bit longer running room. Eric Wold – Merriman Curhan Ford: Okay, I apologize if you did say it, but with the eight movies you have this year, what is the thought on how many movies you could end up having next year and then if you want to look into 2010?

Well, I think, we are going to – we have started increasing the number of films. I don't think we were specific, but we did say under digital. We are just using your previous question, if every film would play three weeks, 52 divided by three is 17 films a year. We were not doing that. That's not our business model. We have been to seven – six, seven to eight– six to eight films a year recently. We think in a digital world, we should be in the 10 to 12 picture range, and I think you should start to see a gradual move up in IMAX as we go forward into '09 and beyond. Eric Wold – Merriman Curhan Ford: Okay, and then lastly. On the expense side, your R&D was a little over $2 million or so in the quarter, $2.5 million in Q1, how much is left that was spent in Q3? What should we think about that and where should that go? Should I get back down to $7 million kind of where it was, kind of in 06' or somewhere a lower than that?

I am going to ask Joe to answer that.

On the Research and Development year-to-date, it is about $4.5 million. We are now projecting that by the end of the year, we will be in the $7.5 million to $8.0 million range, and then the expectation would be that it would begin to ramp down from there. Eric Wold – Merriman Curhan Ford: Okay. How far down could it go back – to half that level where it was prior to digital?

Eric, going back a number of years in film world, we were at probably $3.5 to $4.0 million of, sort of, annual R&D. I think that's probably a little low in the early years of digital, and if you wanted – I literally just said that because that's a little low, but it should not be near the $7 million to $8 million of sustaining rate that we have been going through for the last couple of years. Eric Wold – Merriman Curhan Ford: Okay. Perfect guys. Thank you.

Thank you. Our next question will now come from Richard Ingrassia from Roth Capital Partners. Please go ahead. Richard Ingrassia – Roth Capital Partners: Thanks. Good morning, everybody.

Good morning, Rich.

Good morning, Rich. Richard Ingrassia – Roth Capital Partners: In the past, some changes in installation schedules have been fairly typical as you mentioned, Rich. So, should we be surprised if there is a change at all in the JV roll out schedule or do you have a better visibility there than on your legacy business?

There is no doubt that it's more predictable than it is in our legacy business, and the reason for that is that it's pretty much all retrofits rather than new builds, and it's all domestic rather than international. If you go through the variances in our install schedule, the biggest reasons for them tend to be either that the construction wasn't finished on time, permitting issues, things related to that, or they are in other countries, for example, we have had one that's been delayed in Pakistan for awhile and one in Lebanon, and I think you can understand, although doing business in New York City is difficult, it's not quite the same thing. So, I think you could see in our digital roll out changes in the boxes, so we said we are going to do Philadelphia and we will do New York instead, and I think it's possible. You could see a couple slip, because life isn't perfect, screen won't come in on time or a part won't work, but I think it will be much more predictable than what you have seen historically. Richard Ingrassia – Roth Capital Partners: And there are no negative incentives should that happen, right?

You mean, people have a right to walk away from the contract or something like that? Richard Ingrassia – Roth Capital Partners: Yes, or some change in the terms?

No, there aren't, but to make you comfortable, like for this year, the vast majority of the ones that are scheduled to open, you know, we have already done drawings with the exhibitors. The parts have been ordered. The inventory is being put in place, and this is very much with both AMC and Regal. It's very much a joint effort where they have a team and we have a team, and we were working together on a daily basis, and Brad and I get very frequent reports from the people running our team for us. So, when we say there is going to be 40 open and it is going to be 50 for the year, could it be off by a couple? Sure it could be. Could it be off by 20? That would be shocking to me. Unless some technical problem we haven't foreseen comes out of the blue. Richard Ingrassia – Roth Capital Partners: Okay, thanks. And sticking with the JV, I know there is no recoup so you start sharing first dollar, but can you give us a more precise idea of the lag in cash flow recognition post installation?

Basically and Joe, correct me if I'm wrong, I think, it is a figure, a quarter more or less. Joe?

Yes.

Yes. Richard Ingrassia – Roth Capital Partners: Okay, thanks, and one more question, if you don't mind. Obviously, you are entering a period here of more monthly installations than you have ever experienced as a company. Can you say just a few words about the resources you have in place at manufacturing and installation and service, and if you'll need to add to that capacity, when that might happen?

We did that already. I mean, one of the things that Rich and I have been working on for at least six months is making sure that we were prepared for sort of the change in our business and the more aggressive installation growth that we are going into, and we have hired, I think, both temporary and permanent people. We also recently beefed up our service representatives because we want to have people in the field to support the systems as necessary. So, I think that's already occurred.

And, Rich, just to give you kind of a broader perspective on it, I mean, our customers have seen the numbers that they are doing for "The Dark Knight" right now, and they are opening in time for Madagascar and Harry Potter, and this isn't a case of us pushing customers. This is a case of them pushing as hard as we are. Richard Ingrassia – Roth Capital Partners: Okay, thank you.

Thank you. (Operator instructions) Our next question will come from Jeff Blaeser of Morgan Joseph. Please go ahead. Jeff Blaeser – Morgan Joseph: Thank you, good morning, and thanks for taking my call. As you expand your theater base, let's say from 100 to 200 plus, do you see any potential cannibalization within the IMAX theaters? As an example "The Dark Knight", if you say you've done around $30 million, $35 million to date, if you extrapolate 200 theaters, what do you think that number would have been had we been one year out?

Let me give you the argument both ways and then tell you how we were think about it. Jeff Blaeser – Morgan Joseph: Okay.

The argument for no cannibalization is much more significant awareness of IMAX, and the fact that we are capacity constrained right now, so we are just going to be meeting unsatisfied demand. The argument going the other way, of course, is when you put multiple theaters into a DMA, you are going to be eating somebody else's lunch. So, in the context of all of that, I think our view as we begin to think of '09 and look at our own long-term model has been to put in a modest cannibalization factor to be conservative in terms of per screen performance going forward. I'm not going to define modest for you.

And to just add to the way we were thinking about it, when you look at a film like– it's going to be film dependent. So, when you look at a film like Dark Knight, I will give you like sort of an outline example, but the BFI at London has $1.5 million in ticket sales. They sold out weeks in advance in the theater. So, if you add other theaters, I don't really think there would be a cannibalization factor. So, I think, earlier in the run, it's less likely, and for real blockbusters, it's less likely. I think when you get later in the run and you get films on more of the shoulder period, you might see a little bit more of it happening, and that just gives you, as Brad said, a little more insight into the way we are think being it, but we are modeling it conservatively and we will all learn about it together. Jeff Blaeser – Morgan Joseph: Okay, fair enough, and also back on the installed base that you mentioned 40 to 50 this year to 250 by the end of Okay. I think that would equate to about 50 per year thereafter. Will the rest be international? I think you gave it to us. What would be the overall?

No. What we were saying is we were going to complete the AMC and Regal roll out in 2010, and that would give us 250 domestic theaters by 2010. You know, then we talked about international. We have not yet gone through our budget and made plans for precisely how many we are going to roll out, but there certainly should be more than 50 a year. Jeff Blaeser – Morgan Joseph: Okay, that's just a base case, and then add-ons will most likely develop.

That's based upon signed contractual deals that we have in backlog right now, and we obviously will be adding to our backlog as we continue to do business. Jeff Blaeser – Morgan Joseph: As a good problem to have, is that backlog impacting future signings just because you may not be able to get to them in a certain time or you have not seen that yet?

No, but what you are seeing is in North America. I mean, we probably have about 400 zones, and we are in 250 of those zones including the contracts. I have said this before and everyone should be clear about this, there is no other 100-theater deal that you could do in North America because you have to start to attack the holes in your network rather than your wholesale network. So, the ability to deliver is not affecting our backlog. Jeff Blaeser – Morgan Joseph: Great, thank you very much.

Thank you. And our next question will now come from David Lu of Hedgehog Capital. David Lu – Hedgehog Capital: Hi, guys, how are you?

Hi.

Hi. David Lu – Hedgehog Capital: Just wondering, if there are any plans for digital IMAX camera on the drawing boards or if that's something impossible?

Right now in terms of digital camera development, we have made the decision to let others do that. Right now, there has been Sony and Panavision, have been increasing the quality of their digital image capture systems. It often happens in conjunction with working with a film maker, for example, James Cameron has been very involved in developing image capture to suit their needs for given pictures. As long as that is going on, we haven't seen the need to do that ourselves. What we feel we can do and where we continue to invest and make progress is take those images that are captured whether they are captured digitally or on film and then with our own digital proprietary DMR system to improve the sort of size and resolution and make them what we consider to be IMAX quality. David Lu – Hedgehog Capital: So, you are saying you are continuing to work on improvements to that conversion?

On digital manipulation, always, for example, we have mentioned in the past IMAX Live. As you go digital, we want to be able to do the World Cup in IMAX. Now, that means realtime up revving and as opposed to doing it off-line and these are things that we were still working on. David Lu – Hedgehog Capital: Okay, great. Thanks.

Thank you, Dave.

Thank you. At this time, I would like to turn the meeting back over to management.

I guess, just summing up the call and where we are is that IMAX has been this phenomenal consumer proposition for 40 years and where people are willing to pay a premium price for a premium experience, and I think the changes in the last couple of years led by the transition to digital and our joint venture model, I think will enable us to monetise the commercial appeal of IMAX in a way that we haven't been able to do in the past. As we said at the beginning of the call, the transition to digital has been somewhat painful from a financial point of view, and obviously financial results look backwards not forwards, and I think we are still seeing some of the effects of that transition. And as we get into the real world and we start shipping the digital systems and we start delivering more and more movies, not "The Dark Knight" is obviously a phenomenal success, but some of the four pictures we announced today and others to come in 2009. We believe that our financial results will follow the business momentum, and as a management team, I think we are all incredibly excited about where we are. And we laid out a number of strategical goals and initiatives over the last couple of years, and I think we have achieved most, if not all of them, and we are looking forward to being able to have calls with you where that translates into financial results as well.

I have nothing to add. I think that was very comprehensive. Thank you very much.

Thank you very much.

Thank you. Ladies and gentlemen, this does conclude your conference call for today. Once again, thank you for participating and at this time we ask that you please disconnect your lines. Have yourselves a great day.