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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002
------------------

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission File Number 0-24216


IMAX CORPORATION
(Exact name of registrant as specified in its charter)


Canada 98-0140269
------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)


2525 Speakman Drive, Mississauga, Ontario, Canada L5K 1B1
--------------------------------------------------- -------------
(Address of principal executive offices) (Postal Code)


Registrant's telephone number, including area code (905) 403-6500
--------------


N/A
-------------------------------------------------------------
(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No

Indicate the number of shares of each of the issuer's classes of common stock,
as of the latest practicable date:

Class Outstanding as of October 31, 2002
- -------------------------- ----------------------------------
Common stock, no par value 32,973,366

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IMAX CORPORATION

TABLE OF CONTENTS

PAGE
----
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.................................................3

Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.......................15

Item 3. Quantitative and Qualitative Factors about Market Risk..............23

Item 4. Controls and Procedures.............................................24


PART II. OTHER INFORMATION

Item 1. Legal Proceedings...................................................25

Item 4. Submission of Matters to a Vote of Security Holders.................26

Item 6. Listings of Exhibits and Reports on Form 8-K........................26

Signatures....................................................................27

Certifications................................................................28


SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION

Certain statements included herein may constitute "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995. These forward-looking statements include, but are
not limited to, references to future capital expenditures (including the amount
and nature thereof), business strategies and measures to implement strategies,
competitive strengths, goals, expansion and growth of its business and
operations, plans and references to the future success of IMAX Corporation
together with its wholly owned subsidiaries (the "Company"). These
forward-looking statements are based on certain assumptions and analyses made by
the Company in light of its experience and its perception of historical trends,
current conditions and expected future developments as well as other factors it
believes are appropriate in the circumstances. However, whether actual results
and developments will conform with the expectations and predictions of the
Company is subject to a number of risks and uncertainties, including, but not
limited to, general economic, market or business conditions; the opportunities
(or lack thereof) that may be presented to and pursued by the Company;
competitive actions by other companies; conditions in the out-of-home
entertainment industry; changes in laws or regulations; risks associated with
investments and operations in foreign jurisdictions and any future international
expansion, including those related to economic, political and regulatory
policies of local governments and laws and policies of the United States and
Canada; the potential impact of increased competition in the markets the Company
operates within; and other factors, many of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made herein are
qualified by these cautionary statements, and actual results or developments
anticipated by the Company may not be realized, and even if substantially
realized, may not have the expected consequences to, or effects on, the Company.
The Company undertakes no obligation to update publicly or otherwise revise any
forward-looking information, whether as a result of new information, future
events or otherwise.


Page 2

IMAX CORPORATION

PAGE
----
PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The following Condensed Consolidated Financial Statements are
filed as part of this Report:

Condensed Consolidated Balance Sheets as at September 30, 2002
and December 31, 2001.................................................4

Condensed Consolidated Statements of Operations for the three and
nine month periods ended September 30, 2002 and 2001..................5

Condensed Consolidated Statements of Cash Flows
for the nine month periods ended September 30, 2002 and 2001..........6

Notes to Condensed Consolidated Financial Statements..................7


Page 3

IMAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(in thousands of U.S. dollars)



SEPTEMBER 30,
2002 DECEMBER 31,
(UNAUDITED) 2001
------------- ------------

ASSETS
Cash and cash equivalents (note 6(e)) $ 25,203 $ 26,388
Accounts receivable, less allowance for doubtful accounts of $9,303
(2001 - $18,060) 19,376 18,296
Net investment in leases 49,022 51,644
Inventories (note 3) 38,519 42,723
Prepaid expenses 2,398 1,845
Film assets (note 4) 606 10,513
Fixed assets 47,475 52,652
Other assets 9,233 11,295
Deferred income taxes 3,943 3,022
Goodwill (note 2) 39,027 39,027
Other intangible assets 3,506 4,107
------------- -----------
Total assets $ 238,308 $ 261,512
============= ===========

LIABILITIES
Accounts payable $ 5,852 $ 6,735
Accrued liabilities 47,277 45,041
Deferred revenue 79,730 95,082
Income taxes payable 1,167 1,356
Senior notes due 2005 200,000 200,000
Convertible subordinated notes due 2003 (note 5) 9,143 29,643
Liabilities of discontinued operations (note 14) -- 2,103
------------- -----------
Total liabilities 343,169 379,960
------------- -----------

COMMITMENTS AND CONTINGENCIES (note 6)

SHAREHOLDERS' EQUITY (DEFICIT)
Common stock - no par value. Authorized - unlimited number.
Issued and outstanding - 32,973,366 (2001 - 31,899,114) 66,598 64,356
Deficit (172,104) (183,392)
Accumulated other comprehensive income 645 588
------------- -----------
Total shareholders' equity (deficit) (104,861) (118,448)
------------- -----------
Total liabilities and shareholders' equity (deficit) $ 238,308 $ 261,512
============= ===========


(the accompanying notes are an integral part of these
condensed consolidated financial statements)


Page 4

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(in thousands of U.S. dollars, except per share amounts)
(UNAUDITED)



THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------

REVENUE
IMAX systems (note 7) $ 9,574 $ 13,628 $ 50,671 $ 51,954
Films 10,262 6,448 29,050 23,312
Other 3,819 3,261 13,584 9,535
---------- ---------- ---------- ----------
23,655 23,337 93,305 84,801
COSTS OF GOODS AND SERVICES 15,735 33,139 53,289 73,131
---------- ---------- ---------- ----------
GROSS MARGIN 7,920 (9,802) 40,016 11,670

Selling, general and administrative expenses (note 12(b)) 7,021 12,125 27,863 36,176
Research and development 900 419 1,701 3,009
Amortization of intangibles (note 2) 339 762 1,067 2,272
Loss (income) from equity-accounted investees (167) 146 (88) 323
Restructuring costs and asset impairments
(recovery) (note 8) (330) 46,819 (330) 59,679
---------- ---------- ---------- ----------
EARNINGS (LOSS) FROM OPERATIONS 157 (70,073) 9,803 (89,789)

Interest income 106 160 295 725
Interest expense (4,299) (5,655) (13,048) (16,497)
Impairment of long-term investments -- (5,584) -- (5,584)
Foreign exchange gain (loss) (341) 242 167 (1,220)
---------- ---------- ---------- ----------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (4,377) (80,910) (2,783) (112,365)
Recovery of (provision for) income taxes (76) (10,997) 3,606 (1,196)
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS (4,453) (91,907) 823 (113,561)
Net earnings (loss) from discontinued operations (note 14) 2,066 (55,171) 2,066 (58,712)
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) BEFORE EXTRAORDINARY ITEM (2,387) (147,078) 2,889 (172,273)
Extraordinary gain on repurchase of convertible
subordinated notes, net of income tax expense of $57,
$5,450, $3,606 and $5,450 (note 5) 93 7,525 8,399 7,525
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) $ (2,294) $ (139,553) $ 11,288 $ (164,748)
========== ========== ========== ==========

EARNINGS (LOSS) PER SHARE (note 9):
Earnings (loss) per share - basic and fully diluted:
Net earnings (loss) from continuing operations $ (0.13) $ (2.95) $ 0.03 $ (3.69)
Net earnings (loss) from discontinued operations $ 0.06 $ (1.77) $ 0.06 $ (1.90)
----------- ----------- ----------- -----------
Net earnings (loss) before extraordinary item $ (0.07) $ (4.72) $ 0.09 $ (5.59)
Extraordinary item $ 0.00 $ 0.24 $ 0.25 $ 0.24
----------- ----------- ----------- -----------
Net earnings (loss) $ (0.07) $ (4.48) $ 0.34 $ (5.35)
=========== =========== =========== ===========


(the accompanying notes are an integral part of these
condensed consolidated financial statements)


Page 5

IMAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(in thousands of U.S. dollars)
(UNAUDITED)


NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
2002 2001
------------ -----------

CASH PROVIDED BY (USED IN):

OPERATING ACTIVITIES
Net earnings (loss) from continuing operations $ 823 $ (113,561)
Items not involving cash:
Depreciation, amortization and write-downs 13,319 85,213
Loss (income) from equity-accounted investees (88) 323
Deferred income taxes (4,527) 472
Impairment of long-term investments -- 5,584
Stock and other non-cash compensation 3,016 6,411
Investment in film assets (2,351) (5,984)
Changes in other non-cash operating assets and liabilities (2,839) 19,502
Net cash used in operating activities from discontinued operations -- (2,633)
------------ -----------
Net cash provided by (used in) operating activities 7,353 (4,673)
------------ -----------

INVESTING ACTIVITIES
Net sale of investments in marketable debt securities -- 7,529
Additional consideration on acquisition of Sonics Associates, Inc. -- (1,041)
Purchase of fixed assets (1,137) (930)
Decrease (increase) in other assets (727) 1,282
Increase in other intangible assets (469) (499)
Net cash used in investing activities from discontinued operations -- (218)
------------ -----------
Net cash provided by (used in) investing activities (2,333) 6,123
------------ -----------

FINANCING ACTIVITIES
Repurchase of convertible subordinated notes (6,022) (2,025)
Common shares issued 152 370
------------ -----------
Net cash used in financing activities (5,870) (1,655)
------------ -----------

Effects of exchange rate changes on cash from continuing operations (335) 2,172
Effects of exchange rate changes on cash from discontinued operations -- (1,276)
------------ -----------
Effects of exchange rate changes on cash (335) 896
------------ -----------

Increase (decrease) in cash and cash equivalents from continuing
operations (1,185) 4,818
Decrease in cash and cash equivalents from discontinued operations -- (4,127)
------------ -----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS, DURING THE PERIOD (1,185) 691

Cash and cash equivalents, beginning of period 26,388 30,908
------------ -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 25,203 $ 31,599
============ ===========


(the accompanying notes are an integral part of these
condensed consolidated financial statements)



Page 6

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

1. BASIS OF PRESENTATION

The Condensed Consolidated Financial Statements include the accounts of
IMAX Corporation together with its wholly owned subsidiaries (the
"Company"). The nature of the Company's business is such that the
results of operations for the interim periods presented are not
necessarily indicative of results to be expected for the fiscal year.
In the opinion of management, the information contained herein reflects
all adjustments necessary to make the results of operations for the
interim periods a fair statement of such operations. All such
adjustments are of a normal recurring nature, except as discussed in
the accompanying notes.

These financial statements should be read in conjunction with the
Company's most recent annual report on Form 10-K for the year ended
December 31, 2001 which should be consulted for a summary of the
significant accounting policies utilized by the Company. These interim
financial statements are prepared following accounting policies
consistent with the Company's financial statements for the year ended
December 31, 2001, except as described in note 2.

2. ACCOUNTING CHANGE

In June 2001, the FASB issued Statement of Financial Accounting
Standard No. 142, "Goodwill and Other Intangible Assets" ("FAS 142"),
under which goodwill and intangible assets with indefinite lives are no
longer amortized but are reviewed at least annually for impairment. The
Company adopted FAS 142 effective January 1, 2002. The effect of the
non-amortization provisions of FAS 142 for goodwill amounted to an
increase of $1.7 million in reported net earnings for the nine months
ended September 30, 2002. Pursuant to FAS 142, the Company completed
its test for goodwill impairment effective January 1, 2002 during the
second quarter of 2002. FAS 142 requires that goodwill be tested at
least annually for impairment using a two-step process. The first step
is to identify a potential impairment. As a part of the first step, the
Company identified its reporting units to be the same as their
operating segments. The carrying values of assets, liabilities,
goodwill, and other intangible assets were appropriately assigned to
each of these reporting units. To test for impairment in accordance
with FAS 142, the fair value of each reporting unit was determined and
compared to the carrying value of each unit. The Company completed the
process for each reporting unit and determined that the fair value
exceeded the carrying value and thus, did not proceed to complete the
second step under FAS 142 and concluded that there was no impairment in
goodwill.

In accordance with FAS 142, the effect of this change in accounting
principle is reflected prospectively. Supplemental comparative
disclosure as if the change had been applied retroactively, is as
follows:



THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ---------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------

Reported net earnings (loss) $ (2,294) $ (139,553) $ 11,288 $ (164,748)
Add back: Goodwill amortization -- 437 -- 1,733
------------ ------------ ------------ ------------
Adjusted net earnings (loss) $ (2,294) $ (139,116) $ 11,288 $ (163,015)
=========== ============ ============ ============

Basic and fully diluted earnings (loss) per
share:
Reported net earnings (loss) per share $ (0.07) $ (4.48) $ 0.34 $ (5.35)
Goodwill amortization $ -- $ 0.01 $ -- $ 0.06
------------ ------------ ------------ ------------
Adjusted net earnings (loss) per share $ (0.07) $ (4.47) $ 0.34 $ (5.29)
============= ============ ============ ============



Page 7

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

3. INVENTORIES



SEPTEMBER 30, DECEMBER 31,
2002 2001
------------- -------------

Raw materials $ 7,205 $ 5,939
Work-in-process 2,641 4,313
Finished goods 28,673 32,471
------------- -------------
$ 38,519 $ 42,723
============= =============


4. FILM ASSETS



SEPTEMBER 30, DECEMBER 31,
2002 2001
------------- -------------

Completed and released films, net of accumulated amortization $ 304 $ 1,682
Films in production 56 8,597
Development costs 246 234
------------- -------------
$ 606 $ 10,513
============= =============


Following the delivery of SPACE STATION in April 2002, the Company
transferred its films in production assets to deferred revenue.

5. CONVERTIBLE SUBORDINATED NOTES DUE 2003

In April 1996, the Company issued $100.0 million of Convertible
Subordinated Notes (the "Subordinated Notes") due April 1, 2003 bearing
interest at 5.75% payable in arrears on April 1 and October 1. The
Subordinated Notes, subordinate to present and future senior
indebtedness of the Company, are convertible into common shares of the
Company at the option of the holder at a conversion price of $21.406
per share (equivalent to a conversion rate of 46.7154 shares per $1,000
principal amount of Subordinated Notes) at any time prior to maturity.

The Subordinated Notes are redeemable at the option of the Company on
or after April 1, 1999 at redemption prices expressed as percentages of
the principal amount (2002 - 100.821%) plus accrued interest. The
Subordinated Notes may be redeemed at any time on or after April 1,
2001 without limitation.

During September to December 2001, the Company and a wholly owned
subsidiary of the Company purchased an aggregate of $70.4 million of
the Company's Subordinated Notes for $13.7 million, consisting of $12.5
million in cash, and common shares of the Company valued at $1.2
million. The Company recorded an extraordinary gain of $38.7 million in
2001, net of income tax expense of $16.8 million.

On January 7, 2002 and January 9, 2002, the Company and a wholly owned
subsidiary of the Company purchased an additional $19.5 million in the
aggregate of the Company's Subordinated Notes for $7.3 million,
consisting of $5.2 million in cash, and common shares of the Company
valued at $2.1 million. The Company recorded an extraordinary gain of
$8.3 million, net of income tax expense of $3.5 million. The Company
incurred additional expenses in the amount of $0.2 million in the
second quarter of 2002, net of an income tax recovery of $0.1 million
related the repurchase of the Subordinated Notes.

On August 2, 2002, the Company and a wholly owned subsidiary of the
Company purchased an additional $1.0 million in the aggregate of the
Company's Subordinated Notes for $0.9 million in cash. The Company
recorded an additional extraordinary gain of $0.1 million. This
transaction had the effect of reducing the principal amount of the
Company's outstanding Subordinated Notes to $9.1 million as of
September 30, 2002.


Page 8

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

6. COMMITMENTS AND CONTINGENCIES

(a) In November 2001, the Company filed a complaint with the High Court of
Munich (the "Court") against Big Screen, a German large-screen cinema
owner in Berlin ("Big Screen"), demanding payment of rental payments
and certain other amounts owed to the Company. Big Screen has raised a
defense based on alleged infringement of German antitrust rules,
relating mainly to an allegation of excessive pricing. Big Screen is
also a member of Euromax, an association of European large-screen
cinema owners that filed a complaint in 2000 with the European
Commission based on European Community ("EC") competition rules, which
was dismissed in its entirety by the EC in July 2002. Big Screen had
brought a number of motions for restraining orders in this matter
relating to the Company's provision of films and maintenance, all of
which have been rejected by the courts, including the Berlin Court of
Appeals, and for which all appeals have been exhausted. The Company
believes that all of the allegations in Big Screen's individual defense
are meritless and will accordingly continue to prosecute this matter
vigorously. The Company believes that the amount of the loss, if any,
suffered in connection with this dispute would not have a material
impact on the financial position or results of operations of the
Company, although no assurance can be given with respect to the
ultimate outcome of any such litigation.

(b) In June 2000, a complaint was filed against the Company and a third
party by Mandalay Resort Group f/k/a Circus Circus Enterprises, Inc.,
alleging breach of contract and express warranty, fraud and
misrepresentation in connection with the installation of certain motion
simulation bases in Nevada. The case is being heard in the U.S.
District Court for the District of Nevada. The complainant is seeking
damages in excess of $4.0 million. The Company has brought a third
party action against Tri-Tech International, Inc. ("Tri-Tech") claiming
that any liability of the Company would be due to Tri-Tech's
non-performance. The Company believes that the allegations made against
it in the complaint are meritless and will accordingly defend the
matter vigorously. The Company further believes that the amount of
loss, if any, suffered in connection with this lawsuit would not have a
material impact on the financial position or results of operations of
the Company, although no assurance can be given with respect to the
ultimate outcome of any such litigation.

(c) In March 2001, a complaint was filed against the Company by Muvico
Entertainment, L.L.C. ("Muvico"), alleging misrepresentation and
seeking rescission in respect of the system lease agreements between
the Company and Muvico. The Company filed counterclaims against Muvico
for breach of contract, unjust enrichment unfair competition and/or
deceptive trade practices and theft of trade secrets, and brought
claims against MegaSystems, Inc. ("MegaSystems"), a large-format
theater system manufacturer, for tortious interference and unfair
competition and/or deceptive trade practices and to enjoin Muvico and
MegaSystems from using the Company's confidential and proprietary
information. The Company moved for summary judgement on its contract
claims against Muvico in September 2002. The case is being heard in the
U.S. District Court, Southern District of Florida, Miami Division. The
Company believes that the allegations made by Muvico in its complaint
are entirely without merit and will accordingly defend the claims
vigorously. The Company further believes that the amount of loss, if
any, suffered in connection with this lawsuit would not have a material
impact on the financial position or results of operation of the
Company, although no assurance can be given with respect to the
ultimate outcome of any such litigation.

(d) In addition to the litigation described above, the Company is currently
involved in other litigation which, in the opinion of the Company's
management, will not materially affect the Company's financial position
or future results of operations, although no assurance can be given
with respect to the ultimate outcome of any such proceedings.

(e) As of September 30, 2002, the Company has letters of credit of $3.5
million outstanding, which have been collateralized by cash deposits.


Page 9

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

7. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS SUPPLEMENTAL
INFORMATION

Included in IMAX systems revenue for the three and nine months ended
September 30, 2002, are amounts of $nil and $5.3 million, respectively
(2001 - $nil and $5.5 million) for terminated lease agreements.

8. RESTRUCTURING COSTS AND ASSET IMPAIRMENTS (RECOVERY)



THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ----------------------
2002 2001 2002 2001
--------- ---------- --------- ----------

Restructuring costs (recovery) (1) $ (497) $ 3,446 $ (497) $ 16,306

Asset impairments (recovery)
Net investment in leases (2) (971) 12,686 (971) 12,686
Fixed assets (3) 1,138 27,761 1,138 27,761
Other assets -- 2,916 -- 2,916
--------- ---------- --------- ----------
Total $ (330) $ 46,819 $ (330) $ 59,679
========= ========== ========= ==========


(1) During 2001, the Company reduced its expenses and changed its
corporate structure to reflect industry-wide economic and
financial difficulties faced by certain of the Company's
customers. During the year ended December 31, 2001, the Company
relocated its Sonics sound-system facility in Birmingham, Alabama
to the Company's current facilities near Toronto, Canada, and
reduced its overall corporate workforce by 208 employees. During
the third quarter of 2002, the Company recovered $0.5 million of
restructuring accrued liabilities for terminated employees who
obtained employment prior to the completion of their severance
period. As at September 30, 2002 the Company has outstanding
accrued liabilities of $1.9 million (as at December 31, 2001 -
$5.1 million) for the costs of severed employees that will be paid
over the next two years.

(2) In its assessment of the carrying value of the Company's net
investment in leases for the quarter ended September 30, 2001, the
Company recorded a charge of $12.7 million, as collectability
associated with certain leases was considered uncertain. During
the third quarter of 2002, the Company recovered $1.0 million as
collectability associated with certain leases was resolved.

(3) The Company, in assessing the carrying value of its fixed assets
recorded charges of $1.1 million (2001 - $27.8 million) because of
industry-wide economic and financial difficulties affecting the
Company's prior year operations.


Page 10

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

9. EARNINGS (LOSS) PER SHARE

Reconciliations of the numerators and denominators of the basic and
fully diluted per-share computations, comprise of the following:



THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------- ---------------------
2002 2001 2002 2001
--------- --------- --------- ---------

Net earnings (loss) applicable to common shareholders:
Net earnings (loss) before extraordinary item $ (2,387) $(147,078) $ 2,889 $(172,273)
Extraordinary gain on repurchase of convertible
subordinated notes, net of income tax expense of
$57, $5,450, $3,606 and $5,450 93 7,525 8,399 7,525
--------- --------- --------- ---------
$ (2,294) $(139,553) $ 11,288 $(164,748)
========= ========= ========= =========

Weighted average number of common shares (000's):
Issued and outstanding, beginning of period 32,953 31,127 31,899 30,052
Weighted average number of shares issued during the period 9 10 1,034 740
--------- --------- --------- ---------
Weighted average number of shares used in computing basic
and fully diluted earnings (loss) per share 32,962 31,137 32,933 30,792
Assumed exercise of stock options, net shares assumed
acquired under the Treasury Stock Method -- -- 330 --
--------- --------- --------- ---------
Weighted average used in computing diluted earnings
per share 32,962 31,137 33,263 30,792
========= ========= ========= =========



The calculation of fully diluted earnings (loss) per share for the
quarters ended September 30, 2002 and 2001 excludes common shares
issuable upon conversion of the Subordinated Notes, as the impact of
these conversions would be anti-dilutive. The calculation of fully
diluted earnings (loss) per share for the quarter ended September 30,
2002 and 2001, also excludes outstanding options to purchase common
shares net of shares assumed acquired under the Treasury Stock Method,
as the impact of these exercises would be anti-dilutive.

10. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS SUPPLEMENTAL
INFORMATION



THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------- -------------------------
2002 2001 2002 2001
--------- ---------- --------- ----------


Interest paid $ -- $ 424 $ 8,308 $ 11,174
Income taxes paid $ 209 $ 300 $ 725 $ 867



Page 11

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

11. SEGMENTED INFORMATION

The Company has three reportable segments: IMAX systems, films and
other. The Company's digital projection systems operating segment was
disposed of effective December 11, 2001 and has been reflected as
discontinued operations (see note 14).

There has been no change in the basis of measurement of segment profit
or loss from the Company's most recent annual report on form 10-K for
the year ended December 31, 2001. Intersegment transactions are not
significant.



THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ---------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------

REVENUE
IMAX systems $ 9,574 $ 13,628 $ 50,671 $ 51,954
Films 10,262 6,448 29,050 23,312
Other 3,819 3,261 13,584 9,535
------------ ------------ ------------ ------------
TOTAL $ 23,655 $ 23,337 $ 93,305 $ 84,801
============ ============ ============ ============

EARNINGS (LOSS) FROM OPERATIONS
IMAX systems $ 3,970 $ (2,045) $ 25,196 $ 11,081
Films 1,544 (15,698) 3,355 (19,535)
Other (596) (369) (487) (2,693)
Corporate overhead (4,761) (51,961) (18,261) (78,642)
------------ ------------ ------------ ------------
TOTAL $ 157 $ (70,073) $ 9,803 $ (89,789)
============ ============ ============ ============


12. SUBSEQUENT EVENTS

(a) On October 23, 2002, the Company and George Kirkorian Premiere Theaters
LLC and other related parties ("Kirkorian") entered into an agreement
to settle all existing litigation between the parties. The Company has
brought claims alleging breach of contract, negligent misrepresentation
and fraud against Kirkorian. Kirkorian had counter-sued the Company
alleging, among other things, fraudulent inducement and negligent
misrepresentation.

(b) On October 29, 2002, the Company entered into an agreement with Regal
Entertainment Group, Inc. ("REG"), an affiliate of Edwards Theatres
Circuit, Inc. ("Edwards") with respect to: (a) a settlement of all
litigation between the Company and Edwards; (b) the resolution of the
Company's claims in Edwards' bankruptcy proceedings; (c) the
installation of projection systems for five (5) IMAX theatres at
certain locations owned and/or operated by REG; and (d) terms relating
to REG's operation of the IMAX theatres. Pursuant to the agreement, and
subject to the approval of the court supervising the bankruptcy of
Edwards, the Company will receive US $13.5 million from REG in
connection with the transaction and settlement of the above-referenced
actions. The Company has allocated the total settlement to each of its
elements based on their relative fair value. For the three and nine
months ended September 30, 2002, the Company has reduced its allowance
for doubtful accounts by $0.8 million resulting in a decrease in
selling, general and administrative expenses. As the Company delivers
systems and services under this arrangement in future periods, the
amounts allocated to these systems and services will be recognized in
the Consolidated Statements of Operations.



Page 12

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

13. IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

(a) FASB STATEMENT OF FINANCIAL ACCOUNTING STANDARD NO. 144, "ACCOUNTING
FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS" ("FAS 144")

FAS 144 supercedes FAS 121 and the accounting and reporting provisions
of APB 30 for segments of a business to be disposed of. The
pronouncement was effective January 1, 2002, and has been adopted by
the Company.

(b) FASB STATEMENT OF FINANCIAL ACCOUNTING STANDARD NO. 145, "RESCISSION OF
FAS NOS. 4, 44 AND 64, AMENDMENT OF FAS 13, AND TECHNICAL CORRECTIONS
AS OF APRIL 2002" ("FAS 145")

In May 2002, the FASB issued FAS 145, under which gains and losses from
extinguishment of debt should be classified as extraordinary items only
if they meet the criteria in APB 30. Under FAS 145 the Company will be
required to reclass any gain or loss on extinguishment of debt that was
classified as an extraordinary item to normal operations for all fiscal
years beginning after May 15, 2002, including all prior period
presentations. The Company expects to implement FAS 145 by no later
than the first quarter of 2003, at which time the comparatives will be
restated to reclassify the extraordinary gain on repurchase of
convertible subordinated notes to be included within earnings (loss)
from continuing operations before income taxes.

(c) FASB STATEMENT OF FINANCIAL ACCOUNTING STANDARD NO. 146, "ACCOUNTING
FOR COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES" ("FAS 146")

In June 2002, the FASB issued FAS 146 which replaces EITF 94-3,
"Liability Recognition for Certain Employee Termination Benefits and
Other Costs to Exit and Activity (including Certain Costs Incurred in a
Restructuring)". EITF 94-3 required an entity to record a liability for
certain termination costs when it adopted a plan to restructure
operations. The FASB has concluded that an entity's commitment to a
plan, by itself, does not create a liability. Under the new rules, exit
costs and restructuring liabilities generally will be recognized only
when incurred. The provisions are effective for exit or disposal
activities that are initiated after December 31, 2002. The
pronouncement has no current impact on the Company's financial position
or results of operations.


Page 13

IMAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
IN ACCORDANCE WITH U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(Tabular amounts in thousands of U.S. dollars unless otherwise stated)
(UNAUDITED)

14. DISCONTINUED OPERATIONS

Effective December 11, 2001, the Company completed the sale of its
wholly owned subsidiary, Digital Projection International, including
its subsidiaries (collectively "DPI"), to a company owned by members of
DPI management. In accordance with Accounting Principles Board Opinion
No. 30, "Reporting the Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and
Infrequently Occurring Events and Transactions" ("APB 30"), the Company
has segregated the discontinued operations for all comparative periods
presented.

The liabilities of discontinued operations, summarized in the Condensed
Consolidated Balance Sheets, comprise of the following:



AT SEPTEMBER 30, AT DECEMBER 31,
2002 2001
---------------- ----------------

LIABILITIES
Accrued liabilities $ -- $ 2,103
---------------- ----------------
Total liabilities of discontinued operations $ -- $ 2,103
================ ================


The net earnings (loss) from discontinued operations, summarized in the
Condensed Consolidated Statements of Operations, comprise of the
following:



THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ---------------------------
2002 2001 2002 2001
------------ ------------ ------------ ------------

Revenue $ -- $ 6,121 $ -- $ 18,353
============ ============ ============ ============

Net earnings (loss) from discontinued
operations(1) $ 2,066 $ (55,171) $ 2,066 $ (58,712)
============ ============ ============ ============


(1) Net of income tax recovery of $nil in the three and nine months
ended September 30, 2002 (2001 - $1,099 and $2,418, respectively).
During the third quarter of 2002, the Company recorded earnings of
$2.1 million from the Company's discontinued operations relating
to future obligations that have been eliminated.

15. FINANCIAL STATEMENT PRESENTATION

Certain comparative figures in the unaudited Condensed Consolidated
Financial Statements for the three and nine months ended September 30,
2001, and December 31, 2001 have been reclassified to conform with the
presentation adopted in 2002.


Page 14

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

The Company's principal business is the design, manufacture, sales and leasing
of projector systems for giant screen theaters for customers including
commercial theaters, museums and science centers, and destination entertainment
sites. In addition, the Company's designs and manufactures high-end sound
systems and produces and distributes large format film. There are more than 225
IMAX(R) theaters operating in 30 countries worldwide as of September 30, 2002.
IMAX Corporation is a publicly traded company listed on both the TSX and NASDAQ.

ACCOUNTING POLICIES AND ESTIMATES

The Company reports its results under both United States Generally Accepted
Accounting Principles ("U.S. GAAP") and Canadian Generally Accepted Accounting
Principles. The financial statements and results referred to herein are reported
under U.S. GAAP.

The preparation of these financial statements requires management to make
estimates and judgements that affect the reported amounts of assets,
liabilities, revenues and expenses. On an ongoing basis, management evaluates
its estimates, including those related to accounts receivable, net investment in
leases, inventories, fixed and film assets, investments, intangible assets,
income taxes, contingencies and litigation. Management bases its estimates on
historical experience, future expectations and other assumptions that are
believed to be reasonable at the date of the financial statements. Actual
results may differ from these estimates due to uncertainty involved in
measuring, at a specific point in time, events which are continuous in nature.
The Company's significant accounting policies are discussed in note 2 of the
Consolidated Financial Statements in the Company's most recent annual report on
form 10-K for the year ended December 31, 2001 and are summarized below.

SIGNIFICANT ACCOUNTING POLICIES

Management considers the following critical accounting policies to have the most
significant effect on its estimates, assumptions and judgements:

REVENUE RECOGNITION

SALES-TYPE LEASES OF THEATER SYSTEMS

Theater system leases that transfer substantially all of the benefits and risks
of ownership to customers are classified as sales-type leases as a result of
meeting the criteria established by FASB Statement of Financial Accounting
Standards No. 13, "Accounting for Leases" ("FAS 13"). When revenue is
recognized, the initial rental fees due under the contract, along with the
present value of minimum ongoing rental payments are recorded as revenues for
the period, and the related projector costs including installation expenses are
recorded in cost of goods and services. Additional ongoing rentals in excess of
minimums are recognized as revenue when reported by the theater operator,
provided that collection is reasonably assured.

Effective January 1, 2000, the Company recognizes revenues from sales-type
leases upon installation of the theater system. Revenue associated with a
sales-type lease is recognized when all of the following criteria are met:
persuasive evidence of an agreement exists; the price is fixed or determinable;
and collection is reasonably assured. Prior to January 1, 2000, the Company
recognized revenue on the same basis, except that the time of delivery was used
rather than completion of installation.

From time to time, the Company is involved in a legal proceeding relating to a
terminated lease agreement. When settlements are received, the Company will
allocate the total settlement to each of the elements based their relative fair
value.


Page 15

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

SIGNIFICANT ACCOUNTING POLICIES (cont'd)

REVENUE RECOGNITION (cont'd)

OPERATING LEASES OF THEATER SYSTEMS

Leases that do not transfer substantially all of the benefits and risks of
ownership to the customer are classified as operating leases. For these leases,
initial rental fees and minimum lease payments are recognized as revenue on a
straight-line basis over the lease term. Additional rentals in excess of minimum
annual amounts are recognized as revenue when the contracted portions of theater
admissions due to the Company reported by theater operators exceed the minimum
amounts, provided that collection is reasonably assured.

From time to time, if the Company and a lessee agree to change the terms of the
lease, other than renewing the lease or extending its terms, management
evaluates whether the new agreement would be classified as sales-type lease or
an operating lease under the provisions of FAS 13. Any adjustments which result
from a change in classification from a sales-type lease to an operating lease
are reported as a charge to income during the period the change occurs.

ACCOUNTS RECEIVABLE AND NET INVESTMENT IN LEASES

The allowance for doubtful accounts and provision against the net investment in
leases are based on the Company's assessment of the collectibility of specific
customer balances and the underlying asset value of the equipment under lease.
If there is a deterioration of a major customer's credit worthiness or actual
defaults under the terms of the leases are higher than the Company's historical
experience, the Company's estimates of recoverability could be adversely
affected.

INVENTORIES

In establishing the appropriate provisions for theatre systems inventory,
management must make estimates about the anticipated installation dates for the
current backlog and potential future signings, while taking into account both
general economic conditions and growth prospects within the customers' ultimate
marketplace, and the market acceptance of the Company's current and pending
products and film library. A misinterpretation or misunderstanding of these
conditions or uncertainty in the future outlook of the industry or the economy,
or other failure to estimate correctly, could result in inventory losses in
excess of the provisions determined to be appropriate as at the balance sheet
date.

GOODWILL

The Company adopted FAS 142 "Goodwill and Other Intangibles" effective January
1, 2002. Upon adoption of this standard, no impairment in goodwill was found to
exist. The Company will test the goodwill annually and between annual dates in
certain circumstances to determine if an impairment is necessary.

FIXED ASSETS

Management reviews the carrying values of its fixed assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of
an asset might not be recoverable. In performing its review for recoverability,
management estimates the future cash flows expected to result from the use of
the asset and its eventual disposition. If the sum of the expected future cash
flows is less than the carrying amount of the asset, an impairment loss is
recognized. Measurement of impairment losses is based on the excess of the
carrying amount of the asset over the fair value calculated using discounted
expected future cash flows. If the actual future cash flows are less than the
Company's estimates, the operating profits could be affected.


Page 16

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

SIGNIFICANT ACCOUNTING POLICIES (cont'd)

TAX ASSET VALUATION

As at September 30, 2002, the Company has net deferred income tax assets of $3.9
million, comprised of tax credit carry-forwards, net operating loss
carry-forwards and other deductible temporary differences, which can be utilized
to reduce either taxable income or taxes otherwise payable in future years.
Management assesses realization of these net deferred income tax assets
quarterly, and based on all available evidence, has concluded that it is more
likely than not that these net deferred income tax assets will be realized.
However, if the Company's projected future earnings are not achieved, these net
deferred income tax assets may not be realizable and the Company may need to
establish additional valuation allowances for all or a portion of the net
deferred income tax assets.

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2002, the FASB issued Statement of Financial Accounting Standard No. 145,
"Rescission of FAS Nos. 4, 44 and 64, Amendment of FAS 13, and Technical
Corrections as of April 2002" ("FAS 145"), under which gains and losses from
extinguishment of debt should be classified as extraordinary items only if they
meet the criteria in APB 30. Under FAS 145 the Company will be required to
reclassify any gain or loss on extinguishment of debt that was classified as an
extraordinary item to normal operations for all fiscal years beginning after May
15, 2002, including all prior period presentations. The Company expects to
implement FAS 145 by no later than the first quarter of 2003, at which time the
comparatives will be restated to classify the extraordinary gain on repurchase
of convertible subordinated notes to be included within earnings (loss) from
continuing operations before income taxes.

In June 2002, the FASB issued FAS 146 which replaces EITF 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit
and Activity (including Certain Costs Incurred in a Restructuring)". EITF 94-3
required an entity to record a liability for certain termination costs when it
adopted a plan to restructure operations. The FASB has concluded that an
entity's commitment to a plan, by itself, does not create a liability. Under the
new rules, exit costs and restructuring liabilities generally will be recognized
only when incurred. The provisions are effective for exit or disposal activities
that are initiated after December 31, 2002, with earlier application encouraged.
The pronouncement has no impact on the Company's financial statements.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS THREE MONTHS ENDED SEPTEMBER 30,
2001

The Company reported net losses from continuing operations of $4.5 million or
$0.13 per share on a fully diluted basis for the third quarter of 2002, compared
to net losses of $91.9 million or $2.95 per share on a fully diluted basis for
the third quarter of 2001. The prior year's results included a number of charges
related to the Company's efforts to rationalize the business.

The Company sold its digital projection systems operating segment to DPI
management in the fourth quarter of 2001. During the third quarter of 2002, the
Company recorded earnings of $2.1 million or $0.06 per share on a fully diluted
basis from the Company's discontinued operations relating to future obligations
that have been eliminated. The Company reported net losses from discontinued
operations of $55.2 million or $1.77 per share on a fully diluted basis for the
third quarter of 2001.

During the quarter, the Company recorded an extraordinary gain of $0.1 million
from the purchase of $1.0 million of the Company's Subordinated Notes by a
wholly owned subsidiary.


Page 17

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

RESULTS OF OPERATIONS (cont'd)

THREE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS THREE MONTHS ENDED SEPTEMBER 30,
2001 (cont'd)

REVENUE

The Company's revenues for the third quarter of 2002 increased 1.4% to $23.7
million from $23.3 million in the same quarter last year primarily as a result
of the release of the Company's film, SPACE STATION, which has achieved gross
box office receipts of approximately $17.2 million in the third quarter of 2002.

The Company installed 1 theater system in the third quarter of 2002, compared to
3 theater systems in the third quarter of 2001, one of which was an operating
lease. Other components of IMAX systems revenue such as maintenance fees and
ongoing rents increased slightly from the same quarter last year. IMAX systems
revenue in the third quarter of 2002 was $9.6 million from $13.6 million in the
same quarter of 2001.

Film revenues include revenue recognized from film production, film
distribution, film post-production and digital film re-mastering (DMR)
activities. Film revenues increased 59.2% to $10.3 million in the third quarter
of 2002 from $6.4 million in the same quarter last year primarily due to the
performance of SPACE STATION and Apollo 13: The IMAX Experience. On September
20, 2002, IMAX launched Apollo 13: The IMAX Experience, the Company's first
digitally re-mastered film using the Company's IMAX(R) DMR(TM) technology
establishing a new strategy in the creation of future film product.

Other revenues increased 17.1% to $3.8 million in the third quarter of 2002 from
$3.3 million in the same quarter last year, mainly due to stronger performance
from owned and operated theater operations primarily attributed to the release
of SPACE STATION and Apollo 13: The IMAX Experience.

GROSS MARGIN

Gross margin for the third quarter of 2002 was $7.9 million, or 33.5% of total
revenue, compared to negative $9.8 million in the corresponding quarter last
year. The increase in gross margin during the quarter was due to the stronger
performance of Films, especially SPACE STATION and Apollo 13: The IMAX
Experience. The negative gross margin in the third quarter of 2001 includes
charges recorded through costs of goods and services relating to the Company's
inventories and film assets of $4.7 million and $12.4 million, respectively.

OTHER

Selling, general and administrative expenses were $7.0 million in the third
quarter of 2002 compared to $12.1 million in the corresponding quarter last
year. A portion of the decrease from the prior year is as a result of a recovery
of bad debts in 2002 of $0.2 million, partially attributable to the adjustment
to allowance for doubtful accounts to reflect the settlement of Edwards,
resulting in a $0.8 million decrease in bad debt expense, compared to an expense
of $2.3 million in the same quarter last year. The remainder of the decline in
selling, general and administration expenses primarily relates to cost savings
achieved from the implementation of the Company's 2001 restructuring plan.

Research and development expenses were $0.9 million in the third quarter of
2002, compared to $0.4 million in the same quarter last year. The higher level
of expenses in 2002 primarily reflects the timing of general research and
development activities. Through research and development, the Company plans to
continue to design and develop cinema-based equipment and software to enhance
its product offering.

Amortization of intangibles were $0.3 million in the third quarter of 2002,
compared to $0.8 million in the same quarter last year. The lower level of
amortization is primarily due to the Company's adoption of FAS 142 which does
not require the amortization of goodwill as of January 1, 2002.


Page 18

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

RESULTS OF OPERATIONS (cont'd)

THREE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS THREE MONTHS ENDED SEPTEMBER 30,
2001 (cont'd)

OTHER (cont'd)

During the third quarter of 2001 the Company recorded restructuring and asset
impairment charges of $46.8 million, in conjunction with the financial
difficulties faced by certain of its customers. These charges included asset
impairment charges of $43.4 million as the Company had provided for or
written-down $12.7 million in net investment in leases, $27.8 million in fixed
assets and $2.9 million in other assets in the third quarter of 2001. The
Company believes this evaluation and related write-downs were necessary in light
of industry-wide economic and financial conditions, and is consistent with the
Company's focus on rationalizing and returning to profitability. During the
third quarter of 2002, the Company recorded additional charges of $0.2 million
after assessing the carrying value of some of the Company's fixed assets. During
2001, in light of market trends, industry-wide economic and financial
conditions, the Company recorded a restructuring charge of $3.4 million to
rationalize its operations, reduce staffing levels and write-down certain assets
to be disposed of. During the third quarter of 2002, the Company released $0.5
million of excess restructuring accrued liabilities for employees who obtained
employment prior to the completion of their severance period.

Interest income decreased to $0.1 million in the third quarter of 2002 from $0.2
million in the same quarter last year primarily due to a decline in the average
balance of cash and cash equivalents held.

Interest expense decreased to $4.3 million in the third quarter of 2002 from
$5.7 million in the same quarter last year related to the repurchase of the
Company's Subordinated Notes.

In 2001, after performing its assessment of the carrying value of long-term
investments, the Company recorded $5.6 million in charges for declines in value
that are considered to be other than temporary. There were no related charges in
2002.

The effective tax rate on earnings and losses before taxes differs from the
statutory tax rate and varies from quarter to quarter primarily as a result of
changes in the valuation allowance and the provision of income taxes at
different tax rates in foreign and other jurisdictions. The Company has recorded
a valuation allowance adjustment in the quarter to reflect its assessment of
potential future accounting income. This adjustment has been recorded through
recovery of (provision for) income taxes in the quarter.

NINE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2001

The Company reported net earnings from continuing operations of $0.8 million or
$0.03 per share on a fully diluted basis for the first nine months of 2002,
compared to net losses of $113.6 million or $3.69 per share on a diluted basis
in the same period last year.

The Company discontinued its digital projection systems operating segment in the
fourth quarter of 2001. DPI was sold to DPI management. During the third quarter
of 2002, the Company recorded earnings of $2.1 million or $0.06 per share on a
fully diluted basis from the Company's discontinued operations relating to
future obligations that have been eliminated. The Company reported net losses
from discontinued operations of $58.7 million or $1.90 per share on a diluted
basis for the first nine months of 2001.

The Company recorded an extraordinary gain of $8.4 million, net of income tax
expense of $3.6 million from the repurchase of $20.5 million of the Company's
Subordinated Notes by a wholly owned subsidiary.


Page 19

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

RESULTS OF OPERATIONS (cont'd)

NINE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2001
(cont'd)

REVENUE

The Company's revenues for the first nine months of 2002 increased 10.0% to
$93.3 million from $84.8 million in the same period last year primarily as a
result of the release of the Company's film SPACE STATION, which has achieved
gross box office receipts of approximately $30.0 million in its first 24 weeks,
and due to an increase in revenues in the Company's owned and operated theaters.

IMAX systems revenue, which includes revenue from theater system sales and
leases, rent and maintenance fees, decreased approximately 2.5% to $50.7 million
in the first nine months of 2002 from $52.0 million in the same period last
year. The Company installed 11 theater systems in the first nine months of 2002,
one of which was an operating lease, compared to 9 theater systems in the first
nine months of 2001, one of which was an operating lease. In addition, for 2001
the Company recognized revenue on 2 systems that were converted from
joint-ventures to sales-type leases.

Film revenues include revenue recognized from film production, film
distribution, film post-production and digital film re-mastering (DMR)
activities. Film revenues increased 24.6% to $29.1 million in the first nine
months of 2002 from $23.3 million in the same period last year primarily due to
the stronger performance of the Company's library films in release, especially
the newly released SPACE STATION.

Other revenues increased 42.5% to $13.6 million in the first nine months of 2002
from $9.5 million in the same period last year, mainly due to stronger
performance from owned and operated theater operations primarily attributed to
the release of SPACE STATION, Beauty and the Beast and Apollo 13: The IMAX
Experience.

GROSS MARGIN

Gross margin for the first nine months of 2002 was $40.0 million, or 42.9% of
total revenue, compared to $11.7 million, or 13.7% of total revenue, in the same
period last year. The improvement in margin is due primarily to stronger
performance from films in release during the current year including SPACE
STATION, along with margin improvements in the Company's owned and operated
theaters due to the performance of SPACE STATION, Beauty and the Beast and
Apollo 13: The IMAX Experience. In addition, the Company recorded charges in the
prior year through costs of goods and services relating to the Company's
inventories and film assets of $4.7 million and $12.4 million, respectively, in
the third quarter of 2001.

OTHER

Selling, general and administrative expenses were $27.9 million in the first
nine months of 2002 compared to $36.2 million in the corresponding period last
year. A portion of the decrease from the prior year is as a result of a lower
provision for bad debts in 2002 of $1.0 million, partially attributable to the
adjustment to allowance for doubtful accounts to reflect the settlement of
Edwards, resulting in a $0.8 million decrease in bad debt expense, compared to
$5.5 million in the same period last year. In addition, the first nine months of
2001 included a $2.6 million charge in connection with a stock grant. Partially
offsetting the above were higher legal fees associated primarily with actions
where the Company was a plaintiff in the first nine months of 2002 of $4.8
million, compared to $1.4 million in the same period last year. The remainder of
the decline in selling general and administrative expenses relates primarily to
cost savings achieved from the implementation of the Company's 2001
restructuring plan.

Research and development expenses were $1.7 million in the first nine months of
2002, compared to $3.0 million in the same period last year. The lower level of
expenses in 2002 primarily reflects the timing of general research and
development activities. Through research and development, the Company plans to
continue to design and develop cinema based equipment and software to enhance
its product offering.


Page 20

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

RESULTS OF OPERATIONS (cont'd)

NINE MONTHS ENDED SEPTEMBER 30, 2002 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 2001
(cont'd)

OTHER (cont'd)

Amortization of intangibles was $1.1 million in the first nine months of 2002,
compared to $2.3 million in the same period last year. The lower level of
amortization is primarily due to the Company's adoption of FAS 142 which does
not require the amortization of goodwill as of January 1, 2002.

In 2001, the Company recorded restructuring and asset impairment charges of
$59.7 million of in conjunction with the financial difficulties faced by certain
of their customers. These charges included asset impairment charges of $43.4
million as the Company had provided for or wrote-down $12.7 million in net
investment in leases, $27.8 million in fixed assets and $2.9 million in other
assets in the first nine months of 2001. The Company believes this evaluation
and related write-downs were necessary in light of industry-wide economic and
financial conditions, and is consistent with the Company's focus on
rationalizing, and returning to profitability. During the first nine months of
2002, the Company recorded additional charges of $0.2 million after assessing
the carrying value of some of the Company's fixed assets. During 2001, in light
of market trends, industry-wide economic and financial conditions, the Company
recorded a restructuring charge of $16.3 million to rationalize its operations,
reduce staffing levels and write-down certain assets to be disposed of. During
the third quarter of 2002, the Company released $0.5 million of excess
restructuring accrued liabilities for employees who obtained employment prior to
the completion of their severance period.

Interest income decreased to $0.3 million in the first nine months of 2002 from
$0.7 million in the same period last year primarily due to a decline in the
average balance of cash and cash equivalents held.

Interest expense decreased to $13.0 million in the first nine months of 2002
from $16.5 million in the same period last year related to the repurchase of the
Company's Subordinated Notes.

In 2001, in performing its assessment of the carrying value of long-term
investments, the Company recorded $5.6 million in 2001 in charges for declines
in the value that are considered to be other than temporary. There were no
related charges in 2002.

The effective tax rate on earnings and losses before taxes differs from the
statutory tax rate and will vary from quarter to quarter primarily as a result
of changes in the valuation allowance and the provision of income taxes at
different tax rates in foreign and other jurisdictions. The Company has recorded
a valuation allowance adjustment to its assessment of potential future
accounting income. The tax expense recorded on the extraordinary gain has been
offset by a reduction in the valuation allowance on available net capital loss
carry-forwards. The release of the valuation allowance has been recorded through
the recovery of (provision for) income taxes.

LIQUIDITY AND CAPITAL RESOURCES

At September 30, 2002, the Company's principal source of liquidity included cash
and cash equivalents of $25.2 million, trade accounts receivable of $19.4
million and net investment in leases due within one year of $4.6 million.

On September 26, 2001, the Company's demand facility with Toronto Dominion Bank
Financial Group matured. At the time of maturity, the Company had no cash
advances outstanding under the facility, which had been used in the past to
facilitate U.S. and Canadian letters of credit and cross currency swaps which
were entered into by the Company in connection with the sale of systems. This
line was secured by the Company's accounts receivable, inventory, certain real
estate and other assets of the Company. As of September 30, 2002, the Company
has letters of credit of $3.5 million outstanding, which have been
collateralized by cash deposits.


Page 21

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

LIQUIDITY AND CAPITAL RESOURCES (cont'd)

The 7.875% Senior Notes (the "Senior Notes") due December 1, 2005 are subject to
redemption by the Company, in whole or in part, at any time on or after December
1, 2002 at redemption prices expressed as percentages of the principal amount
for each 12-month period commencing December 1 of the years indicated: 2002 -
103.938%; 2003 - 101.969%; 2004 and thereafter - 100.000% together with interest
accrued thereon to the redemption date and are subject to redemption by the
Company prior to December 1, 2002 at a redemption price equal to 100% of the
principal amount plus a "make-whole premium". If certain changes result in the
imposition of withholding taxes under Canadian law, the Senior Notes may be
redeemed by the Company at a redemption price equal to 100% of the principal
amount plus accrued interest to the date of redemption. In the event of a change
in control, holders of the Senior Notes may require the Company to repurchase
all or part of the Senior Notes at a price equal to 101% of the principal amount
plus accrued interest to the date of repurchase.

The 5.75% Convertible Subordinated Notes (the "Subordinated Notes") due April 1,
2003 are convertible into common shares of the Company at the option of the
holder at a conversion price of $21.406 per share (equivalent to a conversion
rate of 46.7154 shares per $1,000 principal amount of Subordinated Notes) at any
time prior to maturity. The Subordinated Notes are redeemable at the option of
the Company on or after April 1, 1999 at redemption prices expressed as
percentages of the principal amount (2002 - 100.821%) plus accrued interest. The
Subordinated Notes may be redeemed at any time on or after April 1, 2001 without
limitation. During 2001, the Company and a wholly owned subsidiary of the
Company purchased an aggregate of $70.4 million of the Company's Subordinated
Notes for $13.7 million consisting of $12.5 million in cash and common shares of
the Company valued at $1.2 million. The Company cancelled the purchased
Subordinated Notes and recorded an extraordinary gain of $38.7 million, net of
income tax expense of $16.8 million. In January 2002, the Company and the
subsidiary of the Company purchased an additional $19.5 million in the aggregate
of the Company's Subordinated Notes for $7.3 million consisting of $5.2 million
in cash and common shares of the Company valued at $2.1 million. The Company
recorded a gain of $8.3 million, net of income tax expense of $3.5 million. On
August 2, 2002, the Company and the subsidiary of the Company purchased an
additional $1.0 million in the aggregate of the Company's Subordinated Notes for
$0.9 million in cash. The Company recorded an additional extraordinary gain of
$0.1 million. These transactions had the effect of reducing the principal of the
Company's outstanding Subordinated Notes to $9.1 million as of September 30,
2002.

The terms of the Company's outstanding Senior Notes impose certain restrictions
on its operating and financing activities, including restrictions on its ability
to:

o issue additional debt;
o create liens;
o make investments;
o enter into transactions with affiliates;
o effect sales of assets;
o declare or pay dividends or other distributions to shareholders; and
o effect consolidations, amalgamations and mergers.

The Company's total minimum annual rental payments to be made by the Company
under operating leases for premises as of September 30, 2002 are as follows:




2002 $ 1,284
2003 4,761
2004 4,418
2005 4,289
2006 4,412
2007 4,304
Thereafter 36,155
--------------
$ 59,623
==============



Page 22

IMAX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (cont'd)

LIQUIDITY AND CAPITAL RESOURCES (cont'd)

As of September 30, 2002, the Company has an unfunded projected benefit
obligation of approximately $15.5 million (December 31, 2001 - $13.8 million) in
respect of its defined benefit pension plan. The Company intends to use the
proceeds of a life insurance policy taken on its Co-Chief Executive Officers, to
satisfy, in whole or in part, the survival benefits due and payable under the
plan, although there can be no assurance that the Company will elect to do so.

The Company partially funds its operations through cash flow from operations.
Under the terms of the Company's typical theater system lease agreement, the
Company receives substantial cash payments before it completes the performance
of its obligations. Similarly, the Company receives cash payments for some of
its film productions in advance of related cash expenditures.

In the first nine months of 2002, cash provided by operating activities amounted
to $7.4 million. The deferred income taxes operating activity change includes
the reduction of the valuation allowance associated with the repurchase of the
Subordinated Notes.

Cash used in investing activities amounted to $2.3 million in the first nine
months of 2002, which includes purchases of $1.1 million in fixed assets and an
increase in other assets of $0.7 million.

During the first nine months of 2002, cash used in financing activities amounted
to $5.9 million, mainly related to the repurchase by the Company and a
subsidiary of the Company of a portion of the Company's Subordinated Notes.

The Company believes that cash flow from operations together with existing cash
will be sufficient to meet cash requirements for the foreseeable future. In
addition, the Company believes it has access to other sources of liquidity and
is currently in various stages of discussion with other financial institutions
in securing an operating line facility. The Company's accounts receivable,
inventory, certain fixed assets and net investment in leases are currently
unsecured and available as collateral. However, there can be no assurance that
the Company will be successful in securing additional financing. In addition, if
management's projections of future signings and installations are not realized,
there is no guarantee the Company will continue to be able to fund its
operations through cash flows from operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE FACTORS ABOUT MARKET RISK

The Company is exposed to market risk from changes in foreign currency rates.
The Company does not use financial instruments for trading or other speculative
purposes.

A substantial portion of the Company's revenues are denominated in U.S. dollars
while a substantial portion of its costs and expenses denominated in Canadian
dollars. A portion of the net U.S. dollar flows of the Company are converted to
Canadian dollars to fund Canadian dollar expenses through the spot market. The
Company plans to convert Canadian dollar expenses to U.S. dollars through the
spot market on a go-forward basis. In Japan, the Company has ongoing operating
expenses related to its operations. Net Japanese Yen flows are converted to U.S.
dollars through the spot market. The Company also has cash receipts under leases
denominated in Japanese Yen and French francs. The Company plans to convert
Japanese Yen and French franc lease cash flows to U.S. dollars through the spot
market on a go-forward basis.


Page 23

IMAX CORPORATION

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES

Within 90 days prior to the filing date of this report ("the "Evaluation Date"),
the Company's Co-Chief Executive Officers and Chief Financial Officer evaluated
the effectiveness of the Company's "disclosure controls and procedures" (as
defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15(d)-
14(c)). Based on that evaluation, these officers have concluded that as of the
Evaluation Date, the Company's disclosure controls and procedures were adequate
and effective to ensure that material information relating to the Company and
the Company's consolidated subsidiaries would be made known to them by others
within those entities.

CHANGES IN INTERNAL CONTROLS

There were no significant changes in the Company's internal controls or, to the
Company's knowledge, in other factors that could significantly affect the
Company's disclosure controls and procedure subsequent to Evaluation Date. There
were no significant deficiencies or material weaknesses in the Company's
internal controls and as a result, no corrective actions were required or
undertaken.


Page 24

IMAX CORPORATION

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

(a) In November 2001, the Company filed a complaint with the High Court of
Munich (the "Court") against Big Screen, a German large-screen cinema
owner in Berlin ("Big Screen"), demanding payment of rental payments
and certain other amounts owed to the Company. Big Screen has raised a
defense based on alleged infringement of German antitrust rules,
relating mainly to an allegation of excessive pricing. Big Screen is
also a member of Euromax, an association of European large-screen
cinema owners that filed a complaint in 2000 with the European
Commission based on European Community ("EC") competition rules, which
was dismissed in its entirety by the EC in July 2002. Big Screen had
brought a number of motions for restraining orders in this matter
relating to the Company's provision of films and maintenance, all of
which have been rejected by the courts, including the Berlin Court of
Appeals, and for which all appeals have been exhausted. The Company
believes that all of the allegations in Big Screen's individual defense
are meritless and will accordingly continue to prosecute this matter
vigorously. The Company believes that the amount of the loss, if any,
suffered in connection with this dispute would not have a material
impact on the financial position or results of operations of the
Company, although no assurance can be given with respect to the
ultimate outcome of any such litigation.

(b) In June 2000, a complaint was filed against the Company and a third
party by Mandalay Resort Group f/k/a Circus Circus Enterprises, Inc.,
alleging breach of contract and express warranty, fraud and
misrepresentation in connection with the installation of certain motion
simulation bases in Nevada. The case is being heard in the U.S.
District Court for the District of Nevada. The complainant is seeking
damages in excess of $4.0 million. The Company has brought a third
party action against Tri-Tech International, Inc. ("Tri-Tech") claiming
that any liability of the Company would be due to Tri-Tech's
non-performance. The Company believes that the allegations made against
it in the complaint are meritless and will accordingly defend the
matter vigorously. The Company further believes that the amount of
loss, if any, suffered in connection with this lawsuit would not have a
material impact on the financial position or results of operations of
the Company, although no assurance can be given with respect to the
ultimate outcome of any such litigation.

(c) In December 2000, the Company filed a complaint against George
Krikorian Premiere Theaters LLC and certain other related parties
(collectively "Kirkorian") in the U.S. Central District of California,
alleging breach of contract, negligent misrepresentation and fraud
resulting in damages to the Company. In February 2001, Krikorian filed
counterclaims against the Company alleging, among other things,
fraudulent inducement and negligent misrepresentation, which
counterclaims were subsequently dismissed and then amended. Further
counterclaims were filed in May 2001. On October 23, 2002, the parties
entered into an agreement to settle all existing litigation. (see note
12, Subsequent Events, in the Notes to Condensed Consolidated Financial
Statements)

(d) In March 2001, a complaint was filed against the Company by Muvico
Entertainment, L.L.C. ("Muvico"), alleging misrepresentation and
seeking rescission in respect of the system lease agreements between
the Company and Muvico. The Company filed counterclaims against Muvico
for breach of contract, unjust enrichment unfair competition and/or
deceptive trade practices and theft of trade secrets, and brought
claims against MegaSystems, Inc. ("MegaSystems"), a large-format
theater system manufacturer, for tortious interference and unfair
competition and/or deceptive trade practices and to enjoin Muvico and
MegaSystems from using the Company's confidential and proprietary
information. The case is being heard in the U.S. District Court,
Southern District of Florida, Miami Division. The Company moved for
summary judgement on its contract claims against Muvico in September
2002. The Company believes that the allegations made by Muvico in its
complaint are entirely without merit and will accordingly defend the
claims vigorously. The Company further believes that the amount of
loss, if any, suffered in connection with this lawsuit would not have a
material impact on the financial position or results of operation of
the Company, although no assurance can be given with respect to the
ultimate outcome of any such litigation.


Page 25

IMAX CORPORATION

PART II OTHER INFORMATION (cont'd)

ITEM 1. LEGAL PROCEEDINGS (cont'd)

(e) In August 2000, Edwards Theatres Circuit, Inc. and related companies
("Edwards") filed for protection under Chapter 11 of the United States
bankruptcy code in the U.S. Bankruptcy Court for the Central District
of California, Santa Ana Division. On August 2, 2001, the Company filed
a proof of claim in the amount of $28.9 million for amounts due and
owing to the Company at the time of the commencement of the bankruptcy
and for damages arising from Edwards' rejection of certain IMAX
equipment leases pursuant to section 365 of the Bankruptcy Code. On
October 29, 2002, the Company entered into an agreement with Regal
Entertainment Group, Inc. ("REG"), an affiliate of Edwards, resolving
all litigation and bankruptcy claims between the Company and Edwards.
(see note 12, Subsequent Events, in the Notes to Condensed Consolidated
Financial Statements).

(f) The Company has received requests for information from the United
States Securities and Exchange Commission in connection with an
informal inquiry by the Commission into certain trading in the equity
securities of the Company in January 2002. The Company is co-operating
fully with the Commission's requests and does not believe that it is
the target of the Commission's inquiry or that such inquiry will have a
material adverse effect on the Company's business, financial condition
or results of operation.

(g) In addition to the matters described above, the Company is currently
involved in other legal proceedings which, in the opinion of the
Company's management, will not materially affect the Company's
financial position or future operating results, although no assurance
can be given with respect to the ultimate outcome of any such
proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

(a) At the Annual Meeting of the Company's shareholders held on June 5,
2002, shareholders represented at the meeting, (i) elected Kenneth G.
Copeland, Garth M. Girvan, Murray B. Koffler and Marc A. Utay as Class
II directors of the Company for a term expiring in 2005 (27,300,367
shares voted for and 14,472 shares withheld); and (ii) appointed
PricewaterhouseCoopers, LLP as auditors of the Company to hold office
until the next annual meeting of shareholders at a remuneration to be
fixed by the Board of Directors (27,341,107 shares voted for and 16,511
withheld). In addition to the foregoing directors, the following
directors continued in office: J. Trevor Eyton; Richard L. Gelfond;
Ellis B. Jones; G. Edmund King; Sam Reisman; Bradley J. Wechsler and W.
Towsend Ziebold.

(b) Effective September 18, 2002, Mr. Reisman resigned from the Board of
Directors. On October 10, 2002, Mr. Michael Fuchs was appointed to the
Board of Directors to fill the vacancy created by Mr. Reisman's
resignation.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

There are no exhibits required to be filed with this report.

(b) REPORTS ON FORM 8-K

There were no reports filed on Form 8-K in the three month period ended
September 30, 2002.


Page 26

IMAX CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

IMAX CORPORATION

Date: November 5, 2002 By: /s/ Francis T. Joyce
- ----------------------- --------------------
Francis T. Joyce
Chief Financial Officer
(Principal Financial Officer)




Date: November 5, 2002 By: /s/ Kathryn A. Gamble
- ----------------------- ----------------------
Kathryn A. Gamble
Vice President, Finance, Controller
(Principal Accounting Officer)



Page 27

IMAX CORPORATION

CERTIFICATIONS

PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002

I, Bradley J. Wechsler, certify that:

1. I have reviewed this quarterly report or Form 10-Q of IMAX Corporation;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.

4. This registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date");
and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

IMAX CORPORATION

Date: November 5, 2002 /s/ Bradley J. Wechsler
- ----------------------- -----------------------
Title: Co-Chief Executive Officer


Page 28

IMAX CORPORATION

CERTIFICATIONS

PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002

I, Richard L. Gelfond, certify that:

1. I have reviewed this quarterly report or Form 10-Q of IMAX Corporation;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.

4. This registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date");
and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

IMAX CORPORATION

Date: November 5, 2002 /s/ Richard L. Gelfond
- ----------------------- ----------------------
Title: Co-Chief Executive Officer


Page 29

IMAX CORPORATION

CERTIFICATIONS

PURSUANT TO SECTION 302 OF THE SARBANES - OXLEY ACT OF 2002

I, Francis T. Joyce, certify that:

1. I have reviewed this quarterly report or Form 10-Q of IMAX Corporation;

2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this quarterly report.

4. This registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:

a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date");
and

c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function):

a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.

IMAX CORPORATION

Date: November 5, 2002 /s/ Francis T. Joyce
- ----------------------- --------------------
Title: Chief Financial Officer


Page 30