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Condensed Consolidated Statements of Operations Supplemental Information | 6 Months Ended
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Jun. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Condensed Consolidated Statements of Operations Supplemental Information | 8. Condensed Consolidated Statements of Operations – Supplemental Information (a) Selling Expenses The following table summarizes the Company’s selling expenses, including sales commissions and marketing and other, which are recognized within Costs and Expenses Applicable to Revenues in the Condensed Consolidated Statements of Operations, for three and six months ended June 30, 2023 and 2022:
| Three Months Ended June 30, |
| 2023 |  |  | 2022 |
(In thousands of U.S. Dollars) | Sales Commissions |  |  | Marketing and Other |  |  | Sales Commissions |  |  | Marketing and Other |
Technology sales(1) | $ |  | 360 |  |  | $ |  | 167 |  |  | $ |  | 47 |  |  | $ |  | 38 |
Image enhancement and maintenance services(2) |  |  | — |  |  |  |  | 3,572 |  |  |  |  | — |  |  |  |  | 4,850 |
Technology rentals(3) |  |  | 36 |  |  |  |  | 450 |  |  |  |  | (334 | ) |  |  |  | 265 |
Total | $ |  | 396 |  |  | $ |  | 4,189 |  |  | $ |  | (287 | ) |  | $ |  | 5,153 |
| Six Months Ended June 30, |
| 2023 |  |  | 2022 |
(In thousands of U.S. Dollars) | Sales Commissions |  |  | Marketing and Other |  |  | Sales Commissions |  |  | Marketing and Other |
Technology sales(1) | $ |  | 560 |  |  | $ |  | 183 |  |  | $ |  | 47 |  |  | $ |  | 200 |
Image enhancement and maintenance services(2) |  |  | — |  |  |  |  | 10,344 |  |  |  |  | — |  |  |  |  | 7,765 |
Technology rentals(3) |  |  | 109 |  |  |  |  | 710 |  |  |  |  | (289 | ) |  |  |  | 730 |
Total | $ |  | 669 |  |  | $ |  | 11,237 |  |  | $ |  | (242 | ) |  | $ |  | 8,695 |
(1) Sales commissions paid prior to the recognition of the related revenue are deferred and recognized upon the client acceptance of the IMAX System. Direct advertising and marketing costs for each IMAX System are expensed as incurred. (2) Film exploitation costs, including advertising and marketing costs, are expensed as incurred. (3) Sales commissions related to joint revenue sharing arrangements accounted for operating leases are recognized in the month they are earned by the salesperson, which is typically the month in which the IMAX System is installed, and are subject to subsequent performance-based adjustments. In the second quarter of 2022, a $0.3 million reversal of accrued commissions was recorded due to such performance-based adjustments. Direct advertising and marketing costs for each IMAX System are expensed as incurred. (b) Foreign Exchange Included in Selling, General and Administrative Expenses for the three and six months ended June 30, 2023 are foreign currency net losses of $(0.5) million and $(0.6) million, respectively, (2022 — net losses of $(1.7) million and $(1.9) million, respectively) resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities. (See Note 15(c) for additional information.) (c) Collaborative Arrangements Joint Revenue Sharing Arrangements The accounting policy for the Company’s joint revenue sharing arrangements is disclosed in Note 3(o) of the Company’s audited Consolidated Financial Statements in its 2022 Form 10-K. Revenue attributable to transactions arising between the Company and its customers under joint revenue sharing arrangements are recorded within Revenues — Technology Sales (for hybrid joint revenue sharing arrangements) and Revenues — Technology Rentals (for traditional joint revenue sharing arrangements). For the three and six months ended June 30, 2023, such revenues totaled $20.6 million and $40.7 million, respectively (2022 — $19.0 million and $32.7 million, respectively). IMAX Film Remastering and Distribution In an IMAX film remastering and distribution (formerly known as “IMAX DMR”) arrangement, the Company receives a percentage of the box office receipts from a third party who owns the copyright to a film in exchange for converting the film into IMAX format and distributing it through the IMAX network. The fee earned by the Company in a typical IMAX film remastering and distribution arrangement averages approximately 12.5% of box office receipts (i.e. gross box office receipts less applicable sales taxes), except for within Greater China, where the Company receives a lower percentage of net box office receipts for certain Hollywood films. The accounting policy for the Company’s IMAX film remastering and distribution arrangements is disclosed in Note 3(o) of the Company’s audited Consolidated Financial Statements in its 2022 Form 10-K. Revenue attributable to transactions arising between the Company and its customers under IMAX film remastering and distribution arrangements are included in Revenues – Image Enhancement and Maintenance Services. For the three and six months ended June 30, 2023, such revenues totaled $29.2 million and $59.3 million, respectively, (2022 — $27.6 million and $47.1 million, respectively). (See Note 12(a) for a disaggregated presentation of the Company’s revenues.) Co-Produced Film Arrangements In certain film arrangements, the Company co-produces a film with a third party whereby the third party retains the copyright and certain other rights to the film. In some cases, the Company obtains exclusive theatrical distribution rights to the film. Under these arrangements, both parties contribute to the funding of the production, distribution and exploitation costs associated with the film. As of June 30, 2023, the Company is party to one co-produced film arrangement, which represents the VIE total assets balance of $1.6 million and liabilities balance of $0.3 million, and four other co-produced film arrangements, the terms of which are similar. The accounting policies relating to co-produced film arrangements are disclosed in Notes 3(a) and 3(o) of the Company’s 2022 Form 10-K. For the three and six months ended June 30, 2023, an expense of $0.2 million and $0.3 million, respectively, (2022 — $0.2 million and $0.4 million, respectively) attributable to transactions between the Company and other parties involved in the production of the films have been included in Costs and Expenses Applicable to Revenues ― Image Enhancement and Maintenance Services.

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