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Segment Reporting | 9 Months Ended
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Sep. 30, 2021
Segment Reporting [Abstract] |
Segment Reporting | 14. Segment Reporting The Company’s Chief Executive Officer (“CEO”) is its Chief Operating Decision Maker (“CODM”), as such term is defined under U.S. GAAP. The CODM, along with other members of management, assess segment performance based on segment revenues and gross margins. Selling, general and administrative expenses, research and development costs, the amortization of intangible assets, provision for (reversal of) current expected credit losses, certain write-downs, interest income, interest expense and income tax (expense) benefit are not allocated to the Company’s segments. The Company has the following reportable segments: (i) IMAX DMR; (ii) Joint Revenue Sharing Arrangements; (iii) IMAX Systems, (iv) IMAX Maintenance; (v) Other Theater Business; (vi) New Business Initiatives; (vii) Film Distribution; and (viii) Film Post-Production. The Company organizes its reportable segments into the following four categories, identified by the nature of the product sold or service provided:
| (i) | IMAX Technology Network, which earns revenue based on contingent box office receipts and includes the IMAX DMR segment and contingent rent from the Joint Revenue Sharing Arrangement (“JRSA”) segment;
| (ii) | IMAX Technology Sales and Maintenance, which includes results from the IMAX Systems, IMAX Maintenance and Other Theater Business segments, as well as fixed revenues from the JRSA segment;
| (iii) | New Business Initiatives, which is a segment that includes activities related to the exploration of new lines of business and new initiatives outside of the Company’s core business; and
| (iv) | Film Distribution and Post-Production, which includes activities related to the licensing of film content, and the distribution of films primarily for the Company’s institutional theater partners (through the Film Distribution segment) and the provision of film post-production and quality control services (through the Film Post-Production segment).
The Company is presenting information at a disaggregated level to provide more relevant information to readers. Transactions between the IMAX DMR segment and the Film Post-Production segment are valued at exchange value. Inter-segment profits are eliminated upon consolidation, as well as for the disclosures below. The following table presents the Company’s revenue and gross margin (margin loss) by category and reportable segment for the three months ended September 30, 2021 and 2020:
|  | Revenue(1) |  |  | Gross Margin (Margin Loss)(4) |
(In thousands of U.S. Dollars) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
IMAX Technology Network |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IMAX DMR |  | $ | 15,701 |  |  | $ | 6,886 |  |  | $ | 7,293 |  |  | $ | 3,079 |
Joint Revenue Sharing Arrangements, contingent rent |  |  | 9,887 |  |  |  | 4,473 |  |  |  | 3,626 |  |  |  | (2,491 | )
|  |  | 25,588 |  |  |  | 11,359 |  |  |  | 10,919 |  |  |  | 588 |
IMAX Technology Sales and Maintenance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IMAX Systems(2) |  |  | 13,236 |  |  |  | 17,437 |  |  |  | 8,086 |  |  |  | 8,671 |
Joint Revenue Sharing Arrangements, fixed fees |  |  | 1,036 |  |  |  | 57 |  |  |  | 280 |  |  |  | (117 | )
IMAX Maintenance |  |  | 13,055 |  |  |  | 5,855 |  |  |  | 6,462 |  |  |  | 794 |
Other Theater Business(3) |  |  | 363 |  |  |  | 307 |  |  |  | 64 |  |  |  | 31 |
|  |  | 27,690 |  |  |  | 23,656 |  |  |  | 14,892 |  |  |  | 9,379 |
New Business Initiatives |  |  | 1,238 |  |  |  | 378 |  |  |  | 1,189 |  |  |  | 372 |
Film Distribution and Post-Production |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Film Distribution(5) |  |  | 699 |  |  |  | 1,126 |  |  |  | (4 | ) |  |  | (5,597 | )
Post-Production |  |  | 899 |  |  |  | 739 |  |  |  | 420 |  |  |  | (464 | )
|  |  | 1,598 |  |  |  | 1,865 |  |  |  | 416 |  |  |  | (6,061 | )
Sub-total |  |  | 56,114 |  |  |  | 37,258 |  |  |  | 27,416 |  |  |  | 4,278 |
Other |  |  | 488 |  |  |  | (2 | ) |  |  | 71 |  |  |  | (449 | )
Total |  | $ | 56,602 |  |  | $ | 37,256 |  |  | $ | 27,487 |  |  | $ | 3,829 |
The following table presents the Company’s revenue and gross margin (margin loss) by category and reportable segment for the nine months ended September 30, 2021 and 2020:
|  | Revenue(1) |  |  | Gross Margin (Margin Loss)(4) |
(In thousands of U.S. Dollars) |  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
IMAX Technology Network |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IMAX DMR |  | $ | 39,438 |  |  | $ | 18,061 |  |  | $ | 22,405 |  |  | $ | 7,492 |
Joint Revenue Sharing Arrangements, contingent rent |  |  | 26,108 |  |  |  | 10,307 |  |  |  | 7,299 |  |  |  | (10,610 | )
|  |  | 65,546 |  |  |  | 28,368 |  |  |  | 29,704 |  |  |  | (3,118 | )
IMAX Technology Sales and Maintenance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
IMAX Systems(2) |  |  | 35,117 |  |  |  | 27,674 |  |  |  | 21,646 |  |  |  | 14,497 |
Joint Revenue Sharing Arrangements, fixed fees |  |  | 3,776 |  |  |  | 1,196 |  |  |  | 783 |  |  |  | 110 |
IMAX Maintenance |  |  | 33,196 |  |  |  | 13,225 |  |  |  | 15,360 |  |  |  | (355 | )
Other Theater Business(3) |  |  | 1,283 |  |  |  | 1,261 |  |  |  | 269 |  |  |  | 77 |
|  |  | 73,372 |  |  |  | 43,356 |  |  |  | 38,058 |  |  |  | 14,329 |
New Business Initiatives |  |  | 2,554 |  |  |  | 1,488 |  |  |  | 2,281 |  |  |  | 1,245 |
Film Distribution and Post-Production |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Film Distribution(5) |  |  | 1,115 |  |  |  | 4,453 |  |  |  | (319 | ) |  |  | (9,296 | )
Post-Production |  |  | 2,886 |  |  |  | 3,088 |  |  |  | 1,316 |  |  |  | (96 | )
|  |  | 4,001 |  |  |  | 7,541 |  |  |  | 997 |  |  |  | (9,392 | )
Sub-total |  |  | 145,473 |  |  |  | 80,753 |  |  |  | 71,040 |  |  |  | 3,064 |
Other |  |  | 838 |  |  |  | 260 |  |  |  | (669 | ) |  |  | (1,837 | )
Total |  | $ | 146,311 |  |  | $ | 81,013 |  |  | $ | 70,371 |  |  | $ | 1,227 |
(1) | The Company’s largest customer represents 18.2% and 22.2%, respectively, of total Revenues for the three and nine months ended September 30, 2021 (2020 — 11.0% and 11.3%, respectively). No single customer comprises more than 10% of the Company’s total Accounts Receivable as of September 30, 2021 and December 31, 2020.
(2) | The revenue from this segment includes the initial upfront payments and the present value of fixed minimum payments from sales and sales-type lease arrangements of IMAX Theater Systems, as well as the present value of estimated variable consideration from sales of IMAX Theater Systems. To a lesser extent, the revenue from this segment also includes finance income associated with these revenue streams.
(3) | The revenue from this segment principally includes after-market sales of IMAX projection system parts and 3D glasses.
(4) | IMAX DMR gross margin includes marketing costs of $3.2 million and $5.8 million, respectively, for the three and nine months ended September 30, 2021 (2020 — $0.4 million and $2.8 million, respectively). JRSA gross margin includes advertising, marketing and commission expense of $0.8 million and $1.9 million, respectively, for the three and nine months ended September 30, 2021 (2020 — $0.7 million and $1.3 million, respectively). IMAX Systems gross margin includes marketing and commission costs of $0.3 million and $0.9 million, respectively, for the three and nine months ended September 30, 2021 (2020 — $0.6 million and $1.0 million, respectively). Film Distribution segment gross margin includes marketing expense of $nil and less than $0.1 million, respectively, for the three and nine months ended September 30, 2021 (2020 — $0.2 million and $0.4 million, respectively).
(5) | During the three and nine months ended September 30, 2020, Film Distribution segment results include impairment losses of $5.4 million and $9.9 million, respectively, to write-down the carrying value of certain documentary and alternative content film assets due to a decrease in projected box office totals and related revenues based on management’s regular quarterly recoverability assessments. No such charges were incurred in the three and nine months ended September 30, 2021.
Geographic Information Revenue by geographic area is based on the location of the customer. Revenue related to IMAX DMR is presented based upon the geographic location of the theaters that exhibit the remastered films. IMAX DMR revenue is generated through contractual relationships with studios and other third parties and these may not be in the same geographical location as the theater.
|  | Three Months Ended |  |  |  | Nine Months Ended |
|  | September 30, |  |  |  | September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Revenue |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Greater China |  | $ | 22,203 |  |  | $ | 19,346 |  |  |  | $ | 75,634 |  |  |  | $ | 26,008 |
United States |  |  | 16,469 |  |  |  | 4,335 |  |  |  |  | 34,275 |  |  |  |  | 21,112 |
Western Europe |  |  | 7,634 |  |  |  | 5,085 |  |  |  |  | 11,160 |  |  |  |  | 10,273 |
Asia (excluding Greater China) |  |  | 4,925 |  |  |  | 4,935 |  |  |  |  | 12,837 |  |  |  |  | 12,663 |
Russia & the CIS |  |  | 1,353 |  |  |  | 738 |  |  |  |  | 4,577 |  |  |  |  | 2,962 |
Latin America |  |  | 1,181 |  |  |  | 1,616 |  |  |  |  | 1,579 |  |  |  |  | 3,251 |
Canada |  |  | 1,083 |  |  |  | 384 |  |  |  |  | 620 |  |  |  |  | 1,327 |
Rest of the World |  |  | 1,754 |  |  |  | 817 |  |  |  |  | 5,629 |  |  |  |  | 3,417 |
Total |  | $ | 56,602 |  |  | $ | 37,256 |  |  |  | $ | 146,311 |  |  |  | $ | 81,013 |
No single country in the Rest of the World, Western Europe, Latin America and Asia (excluding Greater China) comprises more than 10% of the Company’s total revenue in the three and nine months ended September 30, 2021.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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