10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________

FORM 10-Q

___________________________

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

Commission File Number 001-32337

DREAMWORKS ANIMATION SKG, INC.

(Exact name of registrant as specified in its charter)

Delaware	68-0589190
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1000 Flower Street

Glendale, California 91201

(Address of principal executive offices) (Zip code)

(818) 695-5000

(Registrant's telephone number, including area code)

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   o.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	T	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o   No  x.

Indicate the number of shares outstanding of each of the registrant's classes of common stock: As of April 18, 2014, there were 76,797,154 shares of Class A common stock and 7,838,731 shares of Class B common stock of the registrant outstanding.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements—DreamWorks Animation SKG, Inc. (unaudited)	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 5.	Other Information	39
Item 6.	Exhibits	39
SIGNATURES		40
EXHIBIT INDEX		41

Unless the context otherwise requires, the terms "DreamWorks Animation," the "Company," "we," "us" and "our" refer to DreamWorks Animation SKG, Inc., its consolidated subsidiaries, predecessors in interest and the subsidiaries and assets and liabilities contributed to it by the entity then known as DreamWorks L.L.C. ("Old DreamWorks Studios") on October 27, 2004 (the "Separation Date") in connection with our separation from Old DreamWorks Studios (the "Separation").

1

PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2014			December 31, 2013
	(in thousands, except par value and share amounts)
Assets
Cash and cash equivalents	$	69,648		$	95,467
Trade accounts receivable, net of allowance for doubtful accounts (see Note 7 for related party amounts)	148,922			130,744
Receivables from distributors, net of allowance for doubtful accounts (see Note 7 for related party amounts)	203,934			283,226
Film and other inventory costs, net	914,634			943,486
Prepaid expenses	20,236			20,555
Other assets	28,505			23,385
Investments in unconsolidated entities	44,290			38,542
Property, plant and equipment, net of accumulated depreciation and amortization	183,152			186,670
Deferred taxes, net	244,664			221,920
Intangible assets, net of accumulated amortization	147,605			150,511
Goodwill	179,294			179,722
Total assets	$	2,184,884		$	2,274,228
Liabilities and Equity
Liabilities:
Accounts payable	$	5,684		$	5,807
Accrued liabilities	214,861			263,668
Payable to former stockholder	263,390			262,309
Deferred revenue and other advances	29,131			36,425
Senior unsecured notes	300,000			300,000
Total liabilities	813,066			868,209
Commitments and contingencies (Note 17)
Equity:
DreamWorks Animation SKG, Inc. Stockholders' Equity:
Class A common stock, par value $0.01 per share, 350,000,000 shares authorized, 104,279,149 and 104,155,993 shares issued, as of March 31, 2014 and December 31, 2013, respectively	1,043			1,042
Class B common stock, par value $0.01 per share, 150,000,000 shares authorized, 7,838,731 shares issued and outstanding, as of March 31, 2014 and December 31, 2013	78			78
Additional paid-in capital	1,109,461			1,100,101
Accumulated other comprehensive loss	(468		)	(600		)
Retained earnings	1,029,462			1,072,398
Less: Class A Treasury common stock, at cost, 27,482,030 and 27,439,119 shares, as of March 31, 2014 and December 31, 2013, respectively	(769,502		)	(768,224		)
Total DreamWorks Animation SKG, Inc. stockholders' equity	1,370,074			1,404,795
Non-controlling interests	1,744			1,224
Total equity	1,371,818			1,406,019
Total liabilities and equity	$	2,184,884		$	2,274,228

See accompanying notes.

2

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31,
	2014			2013
	(in thousands, except per share amounts)
Revenues (see Note 7 for related party amounts)	$	147,241		$	134,648
Costs of revenues	160,689			85,521
Gross (loss) profit	(13,448		)	49,127
Product development	540			963
Selling, general and administrative expenses	49,679			42,789
Other operating income (see Note 7 for related party amounts)	(1,672		)	—
Operating (loss) income	(61,995		)	5,375
Non-operating income (expense):
Interest (expense) income, net	(1,773		)	863
Other income, net	1,218			992
Decrease (increase) in income tax benefit payable to former stockholder	927			(698		)
(Loss) income before loss from equity method investees and income taxes	(61,623		)	6,532
Loss from equity method investees	3,260			—
(Loss) income before income taxes	(64,883		)	6,532
(Benefit) provision for income taxes	(22,467		)	418
Net (loss) income	(42,416		)	6,114
Less: Net income attributable to non-controlling interests	520			537
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	$	(42,936	)	$	5,577
Net (loss) income per share of common stock attributable to DreamWorks Animation SKG, Inc.
Basic net (loss) income per share	$	(0.51	)	$	0.07
Diluted net (loss) income per share	$	(0.51	)	$	0.07
Shares used in computing net (loss) income per share
Basic	84,484			84,671
Diluted	84,484			85,265

See accompanying notes.

3

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Three Months Ended
	March 31,
	2014			2013
	(in thousands)
Net (loss) income	$	(42,416	)	$	6,114
Other comprehensive (loss) income, net of tax:
Foreign currency translation gains (losses)	132			(2,492		)
Comprehensive (loss) income	(42,284		)	3,622
Less: Comprehensive income attributable to non-controlling interests	520			537
Comprehensive (loss) income attributable to DreamWorks Animation SKG, Inc.	$	(42,804	)	$	3,085

See accompanying notes.

4

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	March 31,
	2014			2013
	(in thousands)
Operating activities
Net (loss) income	$	(42,416	)	$	6,114
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Amortization and write-off of film and other inventory costs(1)	145,412			60,042
Amortization of intangible assets	3,154			1,686
Stock-based compensation expense	5,309			4,075
Amortization of deferred financing costs	242			—
Depreciation and amortization	1,081			983
Revenue earned against deferred revenue and other advances	(16,188		)	(11,153		)
Income related to investment contributions	(1,672		)	—
Loss from equity method investees	3,260			—
Deferred taxes, net	(22,314		)	231
Changes in operating assets and liabilities:
Trade accounts receivable	(19,091		)	4,119
Receivables from distributors	79,267			52,231
Film and other inventory costs	(122,837		)	(109,346		)
Intangible assets	—			1,015
Prepaid expenses and other assets	(4,870		)	(6,367		)
Accounts payable and accrued liabilities	(48,594		)	6,590
Payable to former stockholder	1,080			(25,700		)
Income taxes payable/receivable, net	(658		)	2,521
Deferred revenue and other advances	27,348			54,641
Net cash (used in) provided by operating activities	(12,487		)	41,682
Investing activities
Investments in unconsolidated entities	(7,000		)	(500		)
Purchases of property, plant and equipment	(5,711		)	(8,088		)
Net cash used in investing activities	(12,711		)	(8,588		)
Financing activities
Proceeds from stock option exercises	261			—
Purchase of treasury stock	(1,278		)	(16,552		)
Net cash used in financing activities	(1,017		)	(16,552		)
Effect of exchange rate changes on cash and cash equivalents	396			447
(Decrease) increase in cash and cash equivalents	(25,819		)	16,989
Cash and cash equivalents at beginning of period	95,467			59,246
Cash and cash equivalents at end of period	$	69,648		$	76,235
Non-cash investing activities:
Intellectual property and technology licenses granted in exchange for equity interest	$	1,294		$	—
Services provided in exchange for equity interest	383			—
Total non-cash investing activities	$	1,677		$	—
Supplemental disclosure of cash flow information:
Cash paid (refunded) during the period for income taxes, net	$	503		$	(2,278	)
Cash paid during the period for interest, net of amounts capitalized	$	7,515		$	217

⁽¹⁾Included within this amount is depreciation and amortization, interest expense and stock-based compensation previously capitalized to "Film and other inventory costs" (see Note 1). During the three months ended March 31, 2014 and 2013, these amounts totaled $8,821 and $5,603, respectively.

See accompanying notes.

5

DREAMWORKS ANIMATION SKG, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Basis of Presentation

Business

The businesses of DreamWorks Animation SKG, Inc. ("DreamWorks Animation" or the "Company") is primarily devoted to the development, production and exploitation of animated films and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising and licensing and other markets. The Company continues to build upon the value of its intellectual property created from its animated films by creating high-quality entertainment through the development and production of non-theatrical content such as television series and specials and live performances based on characters from its feature films. In addition, the Company has an extensive library of other intellectual property rights through its acquisition of Classic Media, which can be exploited in various markets. The Company's activities also include technology initiatives as it explores opportunities to exploit its internally developed software.

Distribution and Servicing Arrangements

The Company derives revenue from Twentieth Century Fox Film Corporation's worldwide (excluding China and South Korea) exploitation of its films in the theatrical and post-theatrical markets. Pursuant to a binding term sheet (the "Fox Distribution Agreement") entered into with Twentieth Century Fox and Twentieth Century Fox Home Entertainment, LLC (collectively, "Fox"), the Company has agreed to license Fox certain exclusive distribution rights and exclusively engage Fox to render fulfillment services with respect to certain of the Company's animated feature films and other audiovisual programs during the five-year period beginning on January 1, 2013. The rights licensed to, and serviced by, Fox will terminate on the date that is one year after the initial home video release date in the United States ("U.S.") of the last film theatrically released by Fox during such five-year period.

Also beginning in 2013, the Company's films are distributed in China and South Korea territories by distinct distributors. The key terms of the Company's distribution arrangements with its Chinese and South Korean distributors are largely similar to those with Fox and Paramount such that the Company also recognizes revenues earned under these arrangements on a net basis. The Company's distribution partner in China is Oriental DreamWorks Holding Limited ("ODW"), which is a related party.

Lastly, the Company continues to derive revenues from the distribution in worldwide theatrical, home entertainment, digital and television markets by Paramount Pictures Corporation, a subsidiary of Viacom Inc., and its affiliates (collectively, "Paramount"), for films that were released on or before December 31, 2012, pursuant to a distribution agreement and a fulfillment services agreement (collectively, the "Paramount Agreements"). With respect to each film for which Paramount has rendered fulfillment services, Paramount generally has the right to continue rendering such services for 16 years from such film's initial general theatrical release.

The Company generally retains all other rights to exploit its films, including commercial tie-in and promotional rights with respect to each film, as well as merchandising, interactive, literary publishing, music publishing and soundtrack rights. The Company's activities associated with its Classic Media properties and AwesomenessTV, Inc. ("ATV") business are not subject to the Company's distribution agreements with its theatrical distributors.

Basis of Presentation

The accompanying unaudited financial data as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, certain information and footnote disclosures normally included in comprehensive financial statements have been condensed or omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2013 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Form 10-K"). Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the Company's 2014 presentation.

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items, which in the opinion of management, are necessary for a fair statement for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full year, or for any future period, as fluctuations can occur based upon the timing of the Company's films' theatrical and home entertainment releases, and television series and specials broadcasts.

Consolidation

The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animationand its wholly-owned subsidiaries.The Company also consolidates less-than-wholly owned entities if the Company has a controlling financial interest in that entity.The Company uses the equity method of accounting for investments in companies in which it has a 50% or less ownership interest and has the ability to exercise significant influence. Such investments are presented as investments in unconsolidated entities on the Company's consolidated balance sheets (refer to Note 7 for further information of such investments). Prior to recording its share of net income or losses from equity method investees, investee financial statements are converted to U.S. GAAP. All significant intercompany accounts and transactions have been eliminated. Intra-entity profit related to transactions with equity method investees is eliminated until the amounts are ultimately realized.

In addition, the Company reviews its relationships with other entities to identify whether they are variable interest entities ("VIE") as defined by the Financial Accounting Standards Board ("FASB"), and to assess whether the Company is the primary beneficiary of such entity. If the determination is made that the Company is the primary beneficiary, then the entity is consolidated. As of March 31, 2014, the Company determined that it continued to have a variable interest in ODW as ODW does not have sufficient equity at risk (i.e., cash on hand to fund its operations) as a result of the timing of capital contributions to the entity in accordance with the Transaction and Contribution Agreement (see Note 7). However, the Company concluded that it is not the primary beneficiary of ODW as it does not have the ability to control ODW. As a result, it does not consolidate ODW into its financial statements. Refer to Note 7 for further discussion of how the Company accounts for its investment in ODW, including the Company's remaining contributions (which represent the maximum exposure to the Company).

The Company also determined that, as of March 31, 2014, it continued to have a variable interest in an entity that was created to operate and tour its live arena show that is based on its feature film How to Train Your Dragon, and that the Company is the primary beneficiary of this entity as a result of the Company's obligation to fund all losses.Accordingly, the Company's consolidated financial statements included the activities of the VIE. The consolidation of the VIE had an immaterial impact as of and for the three months ended March 31, 2014 and 2013.

Film and Other Inventory Costs Amortization

Amortization and write-off of film and other inventory costs in any period includes depreciation and amortization, interest expense and stock-based compensation expense that were capitalized as part of film and other inventory costs in the period that those charges were incurred. The total amount of such expenses reflected as a component of amortization and write-off of film and other inventory costs for the three months ended March 31, 2014 and 2013 is presented in the statements of cash flows.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates made by management in the preparation of the financial statements relate to the following:

• ultimate revenues and ultimate costs of film, television product and live performance productions;

• relative selling price of the Company's products for purposes of revenue allocation in multi-property licenses and other multiple deliverable arrangements;

• determination of fair value of assets and liabilities for the allocation of the purchase price in an acquisition;

• determination of fair value of non-cash contributions to investments in unconsolidated entities;

• useful lives of intangible assets;

• product sales that will be returned and the amount of receivables that ultimately will be collected;

• the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements;

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

• loss contingencies and contingent consideration arrangements; and

• assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting.

Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis.

2. Recent Accounting Pronouncements

In July 2013, the FASB issued an accounting standard update relating to the presentation of unrecognized tax benefits. The accounting update requires companies to present a deferred tax asset net of related unrecognized tax benefits if there is a net operating loss or other tax carryforwards that would apply in settlement of the uncertain tax position. To the extent that an uncertain tax position would not be settled through a reduction of a net operating loss or other tax carryforwards, the unrecognized tax benefit will be presented as a liability. The guidance is effective for the Company's fiscal year beginning January 1, 2014, with early adoption permitted. The Company adopted the new guidance effective January 1, 2014. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

3. Acquisitions

AwesomenessTV

On May 1, 2013, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which, on May 3, 2013 (the "ATV Closing Date"), a wholly-owned subsidiary of the Company ("the Merger Sub") merged with and into ATV. As a result of this transaction, ATV became a wholly-owned subsidiary of the Company. ATV is an online next-generation media production company that generates revenues primarily from online advertising sales and distribution of content through media channels such as theatrical, home entertainment and television. Through ATV's multi-channel network presence on the Internet, the Company will be able to gain access to new content distribution methods, as well as a broader audience. The goodwill acquired represents the potential synergies between ATV's filmed content, character portfolio and the Company's cross-platform expansion plans. The goodwill is allocated to a reporting unit that is currently not part of a separately reportable segment.

The Company's total consideration for this transaction totaled $128.5 million, including an accrual for estimated contingent consideration of $95.0 million. The following table outlines the components of consideration for the transaction (in thousands):

	As of
	May 3, 2013
Cash payment	$	33,460
Estimated contingent consideration	95,000
Total consideration	$	128,460

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the preliminary allocation of the purchase price (in thousands):

	As of
	May 3, 2013(1)
Cash and cash equivalents	$	1,340
Trade receivables(2)	1,279
Prepaid and other assets	434
Production costs	612
Property, plant and equipment	183
Intangible assets	12,900
Total identified assets acquired	16,748
Accounts payable	655
Deferred revenue	2,057
Deferred tax liabilities, net	3,765
Total liabilities assumed	6,477
Net identified assets acquired	10,271
Goodwill(3)	118,189
Total consideration	$	128,460

____________________

⁽¹⁾ Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million.

⁽²⁾ Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible.

⁽³⁾  The goodwill resulting from the acquisition of ATV is not deductible for tax purposes.

Contingent Consideration

Pursuant to the Merger Agreement, the Company may be required to make future cash payments to ATV's former shareholders as part of the total purchase price to acquire ATV. The contingent consideration is based on whether ATV increases its adjusted earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") over an adjusted EBITDA threshold, over a two-year period (which commenced on January 1, 2014). Adjustments to EBITDA for purposes of determining the contingent consideration earned include, but are not limited to: ATV's employee bonus plan, non-cash gains and losses (such as those related to foreign currency accounting and reversals of prior year accruals) and changes in the fair value of contingent payment liabilities resulting from the acquisition of ATV. The Company estimates the fair value of contingent consideration usingsignificant unobservable inputs in a Monte-Carlo simulation model and bases the fair value on the estimated risk-adjusted cost of capital of ATV's adjusted EBITDA following integration into the Company (an income approach). The estimate of the liability may fluctuate if there are changes in the forecast of ATV's future earnings or as a result of actual earnings levels achieved. Any changes in estimate of the contingent consideration liability will be reflected in the Company's results of operations in the period that the change occurs and classified in selling, general and administrative expenses.

The estimated fair value of the contingent consideration arrangement at the acquisition date was $95.0 million. The key assumptions in applying the income approach were as follows: an 8.5% discount rate, volatility of 32.6% and a probability-adjusted earnings measure for ATV of $25.0 million for 2014 and $41.0 million for 2015. Changes in one or more of the key assumptions could lead to a different fair value estimate of the contingent consideration. For example, using a discount rate of 15.0% or a volatility rate of 20.0% would change the estimated fair value of the contingent consideration to $90.5 million and $103.5 million, respectively. Under the Merger Agreement, the maximum contingent consideration that may be earned is $117.0 million. The estimate of contingent consideration liability increased from $96.5 million as of December 31, 2013 to $99.0 million as of March 31, 2014, primarily due tothe passage of time, changes in the forecast of cash flows and changes in the Company's credit risk adjusted rate used to discount obligations to present value. As of March 31, 2014, the discount rate and volatility applied were 18.0% and 35.9%, respectively. Using a discount rate of 15% or a volatility of 20% would change the

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

estimated fair value of the contingent consideration to $100.0 million and $107.0 million, respectively. The change in estimate was recorded in selling, general and administrative expenses in the consolidated statements of operations.

Pro Forma Financial Information

The following table presents (in thousands, except per share data) pro forma results of the Company as though ATV had been acquired as of January 1, 2012 (the beginning of the prior annual reporting period based on the period in which the acquisition occurred).

	Three Months Ended
	March 31, 2013
Revenues	$	134,886
Net income attributable to DreamWorks Animation SKG, Inc.	$	3,662
Basic net income per share	$	0.04
Diluted net income per share	$	0.04

These pro forma results do not necessarily represent what would have occurred if the ATV transaction had taken place on January 1, 2012, nor do they represent the results that may occur in the future. The pro forma amounts include the historical operating results of the Company and ATV prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include a decrease to tax expense assuming ATV was part of the Company in the amount of $0.5 million for the three months ended March 31, 2013. The pro forma results also include an increase to amortization expense related to the fair value of the intangible assets acquired of $2.9 millionfor the three months ended March 31, 2013.

4. Financial Instruments

The fair value of cash and cash equivalents, accounts payable, advances and amounts outstanding under the revolving credit facility approximates carrying value due to the short-term maturity of such instruments and floating interest rates. As of March 31, 2014, the fair value of trade accounts receivable approximated carrying value due to the similarities in the initial and current discount rates. In addition, as of March 31, 2014, the fair value of the senior unsecured notes approximated carrying value as the current borrowing rate approximated the debt instrument's actual interest rate. The fair value of trade accounts receivable and the senior unsecured notes was determined using significant unobservable inputs by performing a discounted cash flow analysis and using current discount rates as appropriate for each type of instrument.

The Company has short-term money market investments which are classified as cash and cash equivalents on the consolidated balance sheets. The fair value of these investments at March 31, 2014 and December 31, 2013 was measured based on quoted prices in active markets.

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

5. Film and Other Inventory Costs

Film, television, live performance and other inventory costs consist of the following (in thousands):

	March 31, 2014		December 31, 2013
In release, net of amortization:
Feature films	$	312,861	$	285,238
Television series and specials	62,217		58,631
In production:
Feature films	396,407		474,609
Television series and specials	28,260		15,332
In development:
Feature films	97,922		75,498
Television series and specials	456		1,500
Product inventory and other(1)	16,511		32,678
Total film, television, live performance and other inventory costs, net	$	914,634	$	943,486

 ____________________

⁽¹⁾  This category includes $8.6 million and $24.8 million of capitalized live performance costs as of March 31, 2014 and December 31, 2013, respectively. In addition, as of March 31, 2014 and December 31, 2013, this category includes $7.9 million of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market.

The Company anticipates that approximately39% and 77%of the above "in release" film and other inventory costs as of March 31, 2014 will be amortized over the next 12 months and three years, respectively.

As a result of the weaker-than-expected worldwide theatrical performance of Mr. Peabody and Sherman (released into the domestic theatrical market during March 2014), the Company performed an analysis to determine whether the unamortized film inventory costs exceeded fair value and was thus impaired. Key assumptions used in the fair value measurement were a discount rate of 7% and estimated remaining cash flows over a period of approximately 15 years. As a result of the analysis, during the three months ended March 31, 2014, the Company recorded an impairment charge of $57.1 million, resulting in a remaining carrying value of $86.0 million as of March 31, 2014. An increase in the discount rate of 5% would change the fair value measurement by approximately $7.8 million for the three months ended March 31, 2014. The estimate of remaining cash flows is dependent on, among other things, the title's performance in post-theatrical markets which have not yet released (e.g., home entertainment and television). A reduction of 10% in the estimated future variable revenues would result in an additional impairment charge of approximately $5.0 million to $10.0 million for this title.

No impairment charges were recorded on film and other inventory costs during the three months ended March 31, 2013.

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

6. Intangible Assets

As of March 31, 2014 and December 31, 2013, intangible assets included $49.5 million of indefinite-lived intangible assets. In addition, intangible assets were comprised of definite-lived intangible assets as follows (in thousands, unless otherwise noted):

	Weighted Average Estimated Useful Life (in years)	Gross		Accumulated Amortization			Impact of Foreign Currency Translation		Net
As of March 31, 2014:
Character rights	13.9	$	99,000	$	(10,322	)	$	1,999	$	90,677
Programming content	2.0	11,200		(5,133		)	—		6,067
Trademarks and trade names	10.0	1,200		(110		)	—		1,090
Other intangibles	2.0	500		(229		)	—		271
Total		$	111,900	$	(15,794	)	$	1,999	$	98,105
As of December 31, 2013:
Character rights	13.9	$	99,000	$	(8,663	)	$	1,754	$	92,091
Programming content	2.0	11,200		(3,733		)	—		7,467
Trademarks and trade names	10.0	1,200		(80		)	—		1,120
Other intangibles	2.0	500		(167		)	—		333
Total		$	111,900	$	(12,643	)	$	1,754	$	101,011

7. Investments in Unconsolidated Entities

The Company has made investments in entities which are accounted for under either the cost or equity method of accounting. These investments are classified as investments in unconsolidated entities in the consolidated balance sheets and consist of the following (in thousands, unless otherwise indicated):

	Ownership
	Percentage at	March 31,		December 31,
	March 31, 2014	2014		2013
Oriental DreamWorks Holding Limited	45.45%	$	15,856	$	16,389
All Other	30%-50%	4,421		3,140
Total equity method investments		20,277		19,529
Total cost method investments		24,013		19,013
Total investments in unconsolidated entities		$	44,290	$	38,542

Under the equity method of accounting, the carrying value of an investment is adjusted for the Company's proportionate share of the investees' earnings and losses (adjusted for the amortization of any differences in the basis of the Company's investment in ODW compared to the Company's share of venture-level equity), as well as contributions to and distributions from the investee. The Company classifies its share of income or loss from investments accounted for under the equity method as income/loss from equity method investees in its consolidated statements of operations.

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Loss from equity method investees consist of the following (in thousands):

	Three Months Ended
	March 31, 2014
Oriental DreamWorks Holding Limited(1)	$	2,210
All Other	1,050
Loss from equity method investees	$	3,260

____________________

⁽¹⁾   The Company currently records its share of ODW results on a one-month lag. Accordingly, the Company's consolidated financial statements include its share of losses incurred by ODW from December 1, 2013 to February 28, 2014.

Oriental DreamWorks Holding Limited

On April 3, 2013 ("ODW Closing Date"), the Company formed a Chinese Joint Venture, ODW (or the "Chinese Joint Venture"), through the execution of a Transaction and Contribution Agreement, as amended, with its Chinese partners, China Media Capital (Shanghai) Center L.P. ("CMC"), Shanghai Media Group ("SMG") and Shanghai Alliance Investment Co., Ltd. ("SAIL", and together with CMC and SMG, the "CPE Holders"). In exchange for 45.45% of the equity of ODW, the Company has committed to making a total cash capital contribution to ODW of $50.0 million (of which $5.7 million was funded at the ODW Closing Date, with the balance to be funded over time) and non-cash contributions valued at approximately $100.0 million (of which approximately $25.4 million had been satisfied as of March 31, 2014). Such non-cash contributions include licenses of technology and certain other intellectual property of the Company, rights in certain trademarks of the Company, two in-development feature film projects developed by the Company and consulting and training services. During the three months ended March 31, 2014, the Company's consolidated statements of operations included $1.7 million of other operating income recognized in connection with non-cash contributions made to ODW.

As of March 31, 2014, the Company's remaining contributions consisted of the following: (i) $44.3 million in cash (which is expected to be funded over the next three years), (ii) two of the Company's in-development film projects (the specific projects of which have not yet been identified), (iii) remaining delivery requirements under the licenses of technology and certain other intellectual property of the Company and (iv) approximately $7.2 million in consulting and training services. Some of these remaining contribution commitments will require future cash outflows for which the Company is not currently able to estimate the timing of contributions as this will depend on, among other things, ODW's operations.

Basis Differences.The Company's investment in ODW does not equal the venture-level equity (the amount recorded on the balance sheet of ODW) due to various basis differences. Basis differences related to definite-lived assets are being amortized based on the useful lives of the related assets. Basis differences related to indefinite-lived assets are not being amortized. The following are the differences between the Company's venture-level equity and the balance of its investment in ODW (in thousands):

	March 31, 2014
Company's venture-level equity	$	44,445
Technology and intellectual property licenses(1)	(19,150		)
Other(2)	(9,439		)
Total ODW investment recorded	$	15,856

____________________

⁽¹⁾ Represents differences between the Company's historical cost basis and the equity basis reflected at the venture-level (the amount recorded on the balance sheet of ODW) related to the Company's contributions of technology and intellectual property licenses. These basis differences arise because the contributed assets are recorded at fair value by ODW.

⁽²⁾  Represents the Company's net contribution commitment due to ODW.

Other Transactions with ODW. The Company has various other transactions with ODW, a related party. The Company has entered into a distribution agreement with ODW for the distribution of the Company's feature films in China (beginning with The Croods). In addition, from time to time, the Company may provide consulting and training services to ODW, the charges of which are based on a pre-determined rate schedule which approximates the Company's actual cost of providing such services. During the three months ended March 31, 2014, the Company's consolidated statements of operations included $0.7

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million of revenues earned through ODW's distribution of the Company's feature films. As of March 31, 2014 and December 31, 2013, the Company's consolidated balance sheets included receivables from ODW of $5.1 million and $3.8 million, respectively, which were classified as a component of trade accounts receivable, and $4.3 million and $16.7 million, respectively, which were classified as a component of receivables from distributors.

8. Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2014		December 31, 2013
Employee compensation	$	22,805	$	65,625
Participations and residuals	48,799		50,690
Contingent consideration(1)	100,051		97,545
Interest payable	2,635		7,849
Deferred rent	8,553		8,114
Other accrued liabilities	32,018		33,845
Total accrued liabilities	$	214,861	$	263,668

  ____________________

⁽¹⁾  Primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 3 for further information).

As of March 31, 2014, the Company estimates that over the next 12 months it will pay approximately$23.1 millionof its accrued participation and residual costs.

9. Deferred Revenue and Other Advances

The following is a summary of deferred revenue and other advances included in the consolidated balance sheets as of March 31, 2014 and December 31, 2013 and the related amounts earned and recorded either as revenue in the consolidated statements of operations or recorded as an offset to other costs (as described below) for the three-month periods ended March 31, 2014 and 2013 (in thousands):

					Amounts Earned
					Three Months Ended
	March 31,		December 31,		March 31,
	2014		2013		2014		2013
Deferred Revenue	$	11,632	$	14,578	$	7,637	$	7,721
Strategic Alliance/Development Advances(1)	962		1,667		7,138		9,074
Other(2)	16,537		20,180		19,897		4,763
Total deferred revenue and other advances	$	29,131	$	36,425

  ____________________

⁽¹⁾  Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2014 and 2013, $2.4 million and $5.2 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.0 million and $0.5 million, respectively, were recorded as a reduction to other assets, respectively. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $0.5 million and $0.9 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.1 million and $0.4 million, respectively, were recorded as a reduction to operating expenses.

⁽²⁾  Of the total amounts earned, for the three months ended March 31, 2014, $14.0 million was recorded as a reduction to film and other inventory costs.

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10. Financing Arrangements

Senior Unsecured Notes. On August 14, 2013, the Company issued $300.0 million in aggregate principal amount of 6.875% Senior Notes due 2020 (the "Notes"). In connection with the issuance of the Notes, the Company entered into an indenture (the “Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee, specifying the terms of the Notes. The Notes were sold at a price to investors of 100% of their principal amount and were issued in a private placement pursuant to the exemptions under Rule 144A and Regulation S under the Securities Act of 1933, as amended. The net proceeds from the Notes amounted to $294.0 millionand a portion was used to repay the outstanding borrowings under the Company's revolving credit facility. The Notes are effectively subordinated to indebtedness under the revolving credit facility. Beginning on February 15, 2014, the Company is required to pay interest on the Notes semi-annually in arrears on February 15 and August 15 of each year. The principal amount is due upon maturity. The Notes are guaranteed by all of the Company's domestic subsidiaries that also guarantee its revolving credit facility.

The Indenture contains certain restrictions and covenants that, subject to certain exceptions, limit the Company's ability to incur additional indebtedness, pay dividends or repurchase the Company's common shares, make certain loans or investments, and sell or otherwise dispose of certain assets, among other limitations. The Indenture also contains customary events of default, which, if triggered, may accelerate payment of principal, premium, if any, and accrued but unpaid interest on the Notes. Such events of default include non-payment of principal and interest, non-performance of covenants and obligations, default on other material debt, failure to satisfy material judgments and bankruptcy or insolvency. If a change of control as described in the Indenture occurs, the Company may be required to offer to purchase the Notes from the holders thereof at a repurchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.

At any time prior to August 15, 2016, the Company may redeem all or part of the Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a specified premium as of the date of redemption, plus (iii) accrued and unpaid interest to, but not including, the date of redemption, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. On or after August 15, 2016, the Company may redeem all or a part of the Notes, at specified redemption prices plus accrued and unpaid interest thereon, to, but not including, the applicable redemption date, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. In addition, at any time prior to August 15, 2016, the Company may redeem up to 35% of the Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.875% of the principal amount thereof, in each case plus accrued and unpaid interest and additional interest, if any, thereon to, but not including, the redemption date.

Revolving Credit Facility. The Company has a revolving credit facility with a number of banks. On August 10, 2012, the Company and the facility banks terminated the then-existing credit agreement and entered into a new Credit Agreement ("New Credit Agreement"). The New Credit Agreement allows the Company to have outstanding borrowings up to $400.0 million at any one time, on a revolving basis. Borrowings are secured by substantially all of the Company's assets. The New Credit Agreement requires the Company to maintain a specified ratio of total debt to total capitalization and a specified ratio of net remaining ultimates to facility exposure. In addition, subject to specified exceptions, the New Credit Agreement also restricts the Company and its subsidiaries from taking certain actions, such as granting liens, entering into any merger or other significant transactions, making distributions, entering into transactions with affiliates, agreeing to negative pledge clauses and restrictions on subsidiary distributions, and modifying organizational documents. The revolving credit facility also prohibits the Company from paying dividends on its capital stock if, after giving pro forma effect to such dividend, an event of default would occur or exist under the revolving credit facility. The Company is required to pay a commitment fee on undrawn amounts at an annual rate of 0.375%. Interest on borrowed amounts (per draw) is determined by reference to either i) the lending banks' base rate plus 1.50% per annum or ii) the London Interbank Offered Rate ("LIBOR") plus 2.50% per annum.

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The following table summarizes information associated with the Company's financing arrangements (in thousands, except percentages):

							Interest Expense
							Three Months Ended
	Balance Outstanding at				Maturity Date		March 31,
	March 31, 2014		December 31, 2013			Interest Rate at March 31, 2014	2014		2013
Senior Unsecured Notes	$	300,000	$	300,000	August 2020	6.875%	$	2,234	N/A
Revolving Credit Facility	$	—	$	—	August 2017	N/A	$	375	$	220

____________________

N/A: Not applicable

Additional Financing Information

Interest Capitalized to Film Costs.    Interest on borrowed funds that are invested in major projects with substantial development or construction phases is capitalized as part of the asset cost until the projects are released or construction projects are put into service. Thus, capitalized interest is amortized over future periods on a basis consistent with that of the asset to which it relates. During the three months ended March 31, 2014 and 2013, the Company incurred interest costs totaling $6.1 million and $1.6 million, respectively, of which $3.2 million and $1.4 million, respectively, were capitalized to film costs.

As of March 31, 2014, the Company was in compliance with all applicable financial debt covenants.

11. Income Taxes

The Company typically determines its interim income tax provision by using the estimated annual effective tax rate and applying that rate to income/loss on a current year-to-date basis. However, if minor changes to forecasted annual pre-tax earnings have a significant effect on the annual effective tax rate, the Company may determine that this method would not be appropriate and that a different method should be applied. For the three months ended March 31, 2014, the Company determined that the annual effective tax rate method would not represent a reliable estimate of the interim income tax provision. As a result, the Company utilized a discrete period method to calculate taxes for the three months ended March 31, 2014. Under the discrete method, the Company determined the income tax provision based upon actual results as if the interim period were an annual period. 

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Set forth below is a reconciliation of the components that caused the Company's benefit/provision for income taxes (including the income statement line item "Decrease (increase) in income tax benefit payable to former stockholder") to differ from amounts computed by applying the U.S. Federal statutory rate of 35% for the three months ended March 31, 2014 and 2013.

	Three Months Ended
	March 31,
	2014		2013
Provision for income taxes (combined with decrease/increase in income tax benefit payable to former stockholder)(1)
U.S. Federal statutory rate	35.0	%	35.0	%
U.S. state taxes, net of Federal benefit	1.6		(2.7	)
Export sales exclusion/manufacturer's deduction(2)	1.2		7.3
Research and development credit(2)	—		(25.4	)
Federal energy tax credit(3)	—		(2.5	)
Executive compensation	(0.3	)	3.2
Stock-based compensation	—		1.3
Other	(2.0	)	(0.8	)
Effective tax rate (combined with decrease/increase in income tax benefit payable to former stockholder)(1)	35.5	%	15.4	%
Less: change in income tax benefit payable to former stockholder(1):
Export sales exclusion/manufacturer's deduction(2)	(1.1	)	(7.6	)
Imputed interest on payable to former stockholder	0.1		(1.8	)
Other	(0.4	)	(0.2	)
Total change in income tax benefit payable to former stockholder(1)	(1.4	)%	(9.6	)%
Effective tax rate	34.1	%	5.8	%

____________________

⁽¹⁾  As a result of a partial increase in the tax basis of the Company's tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of the Company's 2004 initial public offering, the Company may pay reduced tax amounts to the extent it generates sufficient taxable income in the future. The Company is obligated to remit to an affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax and California franchise tax and certain other related tax benefits. Refer to the Company's 2013 Form 10-K for a more detailed description.

⁽²⁾  The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment).

⁽³⁾  The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated.

The Company's federal income tax returns for the tax years ended December 31, 2007 through 2009 are currently under examination by the Internal Revenue Service, and all subsequent tax years remain open to audit. The Company's California state tax returns for all years subsequent to 2007 remain open to audit. The Company's India subsidiary's income tax returns are currently under examination for the tax years ended March 31, 2010 through 2012.

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12. Stockholders’ Equity and Non-controlling Interests

Class A Common Stock

Stock Repurchase Program.  In July 2010, the Company's Board of Directors terminated the then-existing stock repurchase program and authorized a new stock repurchase program pursuant to which the Company may repurchase up to an aggregate of $150.0 million of its outstanding stock. During the three months ended March 31, 2014, the Company did not repurchase any shares of its Class A Common Stock. During the three months ended March 31, 2013, the Company repurchased 0.8 million shares of its outstanding Class A Common Stock for $16.2 million under the July 2010 authorization. As of March 31, 2014, the Company's remaining authorization under the current stock repurchase program was $100.0 million.

Non-controlling Interests

The Company's consolidated balance sheets include non-controlling interests, which is presented as a separate component of equity. The non-controlling interest represents the other equity holder's interest in a joint venture that the Company consolidates. The net income attributable to the non-controlling interests is presented in the Company’s consolidated statements of operations. There is no other comprehensive income or loss attributable to the non-controlling interests.

The following table presents the changes in equity for the three-month periods ended March 31, 2014 and 2013 (in thousands):

	DreamWorks Animation SKG, Inc. Stockholders' Equity			Non-controlling Interests		Total Equity
Balance as of December 31, 2013	$	1,404,795		$	1,224	$	1,406,019
Proceeds from stock option exercises	261			—		261
Stock-based compensation	9,068			—		9,068
Purchase of treasury shares	(1,246		)	—		(1,246		)
Foreign currency translation adjustments	132			—		132
Net (loss) income	(42,936		)	520		(42,416		)
Balance as of March 31, 2014	$	1,370,074		$	1,744	$	1,371,818
Balance as of December 31, 2012	$	1,345,616		$	630	$	1,346,246
Stock-based compensation	8,404			—		8,404
Purchase of treasury shares	(16,534		)	—		(16,534		)
Foreign currency translation adjustments	(2,492		)	—		(2,492		)
Net income	5,577			537		6,114
Balance as of March 31, 2013	$	1,340,571		$	1,167	$	1,341,738

13. Stock-Based Compensation

The Company recognizes compensation costs for equity awards granted to its employees based on each award's grant-date fair value. Most of the Company's equity awards contain vesting conditions dependent upon the completion of specified service periods or achievement of established sets of performance criteria. Compensation cost for service-based equity awards is recognized ratably over the requisite service period. Compensation cost for certain performance-based awards is recognized using a graded expense-attribution method. The Company has granted performance-based awards where the value of the award upon vesting will vary depending on the level of performance ultimately achieved. The Company recognizes compensation cost for these awards based on the level of performance expected to be achieved. The Company will recognize the impact of any change in estimate in the period of the change.

Generally, equity awards are forfeited by employees who terminate prior to vesting. However, certain employment contracts for certain executive officers provide for the acceleration of vesting in the event of a change in control or specified termination events. The Company currently satisfies exercises of stock options and stock appreciation rights, the vesting of restricted stock and the delivery of shares upon the vesting of restricted stock units with the issuance of new shares.

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The impact of stock options (including stock appreciation rights) and restricted stock awards on net income (excluding amounts capitalized) for the three-month periods ended March 31, 2014 and 2013, respectively, was as follows (in thousands):

	Three Months Ended
	March 31,
	2014			2013
Total stock-based compensation	$	5,309		$	4,075
Tax impact(1)	(1,885		)	(628		)
Reduction in net income, net of tax	$	3,424		$	3,447

 ____________________

⁽¹⁾  Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item "Decrease/increase in income tax benefit payable to former stockholder" (see Note 11).

Stock-based compensation cost capitalized as a part of film costs was $3.7 million and $4.3 million for the three-month periods ended March 31, 2014 and 2013, respectively.

The following table sets forth the number and weighted average grant-date fair value of equity awards granted during the three-month periods ended March 31, 2014 and 2013:

	Three Months Ended
	March 31,
	Number Granted	Weighted Average Grant-Date Fair Value
	(in thousands)
2014
Restricted stock and restricted stock units	224	$	29.91
2013
Restricted stock and restricted stock units	261	$	16.87

As of March 31, 2014, the total compensation cost related to unvested equity awards granted to employees (excluding equity awards with performance objectives not probable of achievement) but not yet recognized was approximately $78.5 million and will be amortized on a straight-line basis over a weighted average period of 1.9 years.

14. Reportable Segments

During the three months ended September 30, 2013, the Company reorganized its internal management structure to align with changes in how it operates the business and evaluates financial performance of individual business units. As a result, there were changes to its operating segments and the Company has revised its segment information for prior periods to conform to the current presentation. The Company's current reportable segments are the following: Feature Films, Television Series and Specials and Consumer Products. Feature Films consists of the development, production and exploitation of feature films in the theatrical, television, home entertainment and digital markets. Television Series and Specials consists of the development, production and exploitation of television, direct-to-video and other non-theatrical content in the television, home entertainment and digital markets. Consumer Products consists of the Company's merchandising and licensing activities related to the exploitation of its intellectual property rights. Operating segments that are not separately reportable are categorized in "All Other" and include ATV and live performances.

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Segment performance is evaluated based on revenues and gross profit. The Company does not allocate assets to each of its operating segments, nor does the Company's chief operating decision maker evaluate operating segments using discrete asset information. Information on the reportable segments and a reconciliation of total segment revenues and gross (loss) profit to consolidated financial statements are presented below (in thousands):

		Three Months Ended
		March 31,
		2014			2013
Revenues
	Feature Films	$	110,097		$	78,546
	Television Series and Specials	17,969			19,368
	Consumer Products	12,067			27,484
	All Other	7,108			9,250
Total revenues		$	147,241		$	134,648
Gross (loss) profit(1)
	Feature Films	$	(25,388	)	$	25,950
	Television Series and Specials	5,759			4,917
	Consumer Products	6,004			18,428
	All Other	177			(168		)
Total gross (loss) profit		$	(13,448	)	$	49,127

____________________

⁽¹⁾  The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes.

The following table presents goodwill for each of the Company's reportable segments (in thousands):

	Feature Films		Television Series and Specials		Consumer Products		All Other			Total
Balance as of December 31, 2013	$	43,995	$	6,111	$	10,999	$	118,617		$	179,722
Measurement period adjustments related to the acquisition of ATV	—		—		—		(428		)	(428		)
Balance as of March 31, 2014	$	43,995	$	6,111	$	10,999	$	118,189		$	179,294

15. Related Party Transactions

Transactions with ODW

During the three months ended March 31, 2014, the Company had various transactions with a related party, ODW. See Note 7 for further discussion related to these transactions.

Transactions with Universal Music Group

One of the Company's directors, Lucian Grainge, is the chief executive officer of Universal Music Group ("UMG"). From time to time, the Company and UMG make payments to each other in connection with the licensing of music that is owned by the other company (or for which the other company serves as the music publisher). In addition, UMG serves as the music publisher for the Company's Classic Media properties (which the Company acquired in August 2012). Finally, UMG and ATV (which the Company acquired in May 2013) have formed joint ventures related to the music business. For the three months ended March 31, 2014, revenues recognized related to the arrangements were not material. During the three months ended March 31, 2014, the Company incurred expenses (which were recorded as film inventory costs) totaling $0.2 million related to these arrangements.

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16. Concentrations of Credit Risk

A substantial portion of the Company's revenue is derived directly from the Company's third-party distributors, Paramount and Fox. Paramount represented approximately 28% and 55% of total revenue for the three-month periods ended March 31, 2014 and 2013, respectively. Fox represented approximately 14% of total revenue for the three-month periods ended March 31, 2014.

As of March 31, 2014 and December 31, 2013, approximately 62% and 49%, respectively, of the Company's trade accounts receivable balance consisted of long-term receivables related to licensing arrangements with Netflix, Inc.

17.Commitments and Contingencies

Legal Proceedings. From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business, typically intellectual property litigation and infringement claims related to the Company's feature films and other commercial activities, which could cause the Company to incur significant expenses or prevent the Company from releasing a film or other properties. The Company also has been the subject of patent and copyright claims relating to technology and ideas that it may use or feature in connection with the production, marketing or exploitation of the Company's feature films and other properties, which may affect the Company's ability to continue to do so. Furthermore, from time to time the Company may introduce new products or services, including in areas where it currently does not operate, which could increase its exposure to litigation and claims by competitors, consumers or other intellectual property owners. Defending intellectual property litigation is costly and can impose a significant burden on management and employees, and there can be no assurances that favorable final outcomes will be obtained in all cases. While the resolution of these matters cannot be predicted with certainty, the Company does not believe, based on current knowledge, that any existing legal proceedings or claims are likely to have a material effect on its financial position, results of operations or cash flows.

Contributions to ODW. The Company has committed to making certain contributions in connection with the formation of ODW. Refer to Note 7 for further discussion related to these commitments.

Contingent Consideration. As a result of the Company's acquisition of ATV, the Company may be obligated to make additional contingent cash payments as part of the purchase price. Refer to Note 3 for further discussion.

18. Earnings Per Share Data

The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2014			2013
Numerator:
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	$	(42,936	)	$	5,577
Denominator:
Weighted average common shares and denominator for basic calculation:
Weighted average common shares outstanding	84,588			84,781
Less: Unvested restricted stock	(104		)	(110		)
Denominator for basic calculation	84,484			84,671
Weighted average effects of dilutive stock-based compensation awards:
Restricted stock awards	—			594
Denominator for diluted calculation	84,484			85,265
Net (loss) income per share—basic	$	(0.51	)	$	0.07
Net (loss) income per share—diluted	$	(0.51	)	$	0.07

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Table of Contents

DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, stock appreciation rights, restricted stock awards and equity awards subject to performance conditions which were not included in the calculation of diluted per share amounts (for periods where the Company had net income) because the effects would be anti-dilutive:

	Three Months Ended
	March 31, 2013
Options to purchase shares of common stock and restricted stock awards	3,735
Stock appreciation rights	5,151
Total	8,886

The following table sets forth (in thousands) the number of equity awards that are contingently issuable which were not included in the calculation of diluted shares (for periods where the Company had net income) as the required performance conditions had not been met as of March 31, 2013:

	Three Months Ended
	March 31, 2013
Options to purchase shares of common stock and restricted stock awards	716

19. Restructuring Charges

During the three months ended December 31, 2012, the Company made a strategic business decision to change the production and release slates for some of its animated feature films. In connection with this decision, the Company committed to a restructuring plan to align its production and operating infrastructure. During the three months ended March 31, 2013, the Company implemented a restructuring plan to lower the cost structure, which resulted in a commitment to further reduce its workforce. As a result, the Company incurred additional restructuring charges attributable to employee-related costs (primarily related to severance and benefits) totaling $2.5 million for 47 employees for the three months ended March 31, 2013.Restructuring charges were not material for the three months ended March 31, 2014. These charges were recorded in costs of revenues and selling, general and administrative expenses in the Company's consolidated statements of operations. Payments made during the three months ended March 31, 2014 totaled$1.0 million related to these restructuring plans. As of March 31, 2014 and December 31, 2013, $0.7 million and $1.7 million, respectively, remained accrued as a liability. The Company expects to complete its restructuring plans by June 30, 2014. The Company's restructuring plans are primarily attributable to its Feature Films reportable segment.

20. Subsequent Events

On April 1, 2014, the Company executed an Agreement and Plan of Merger and Reorganization to acquire Big Frame, Inc. (a multi-channel network). The purchase price consisted of cash payments totaling $15.0 million (inclusive of amounts held in escrow) and was paid upon closing of the transaction, which occurred on April 8, 2014. The Company expects that the acquisition will have an immaterial impact on its consolidated financial statements.

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

This section and other parts of this Quarterly Report on Form 10-Q (the "Quarterly Report") contain forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. You should read the following discussion and analysis in conjunction with our unaudited consolidated financial statements and the related notes thereto contained elsewhere in this Quarterly Report, and our audited consolidated financial statements and related notes thereto, "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and the "Risk Factors" section included in our Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Form 10-K"). We urge you to carefully review and consider the various disclosures made by us in this Quarterly Report and in our other reports filed with the Securities and Exchange Commission (the "SEC"), including our 2013 Form 10-K and Current Reports on Form 8-K, before deciding to purchase, hold or sell our common stock.

Management Overview

The discussion of our revenues and costs of revenues for the three months ended March 31, 2014 and 2013 reflects our new segment categories. Refer to Note 14 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report for further information, including a description of each of our segments.

The following is a summary of the significant items that affected our financial results for the three months ended March 31, 2014:

• During the three months ended March 31, 2014, we incurred a net loss (excluding net income attributable to non-controlling interests) of $42.9 million, or $0.51 per share. A detailed discussion of our financial results is provided in the section entitled "—Overview of Financial Results."

• During the three months ended March 31, 2014, we released our feature film Mr. Peabody and Sherman. A discussion of the revenues generated from this film is provided in the section entitled "—Overview of Financial Results —Revenues—Feature Films— Current year theatrical releases." Due to Mr. Peabody and Sherman'sweaker-than-expected performance in the worldwide theatrical market, we recorded an impairment charge totaling$57.1 million. Further discussion is provided in the section entitled "—Overview of Financial Results—Costs of Revenues."

• In May 2013, we completed the acquisition of AwesomenessTV ("ATV"). During the three months ended March 31, 2014, our operating results included $4.1 million of revenues and $1.8 million of selling, general and administrative expenses attributable to ATV. Gross loss attributable to ATV was immaterial. Further discussion is provided in the section entitled "—Overview of Financial Results."

Our Business

Our business is primarily devoted to developing, producing and exploiting animated feature films and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising and licensing and other markets. In addition, we continue to build upon the value of our intellectual property by creating high-quality entertainment through the development and production of non-theatrical content such as television series and specials and live performances based on characters from our feature films.

For further information on our business, refer to Note 1 of our unaudited consolidated financial statements in "Part I—Item 1." For further details of our primary distribution and servicing arrangements, see "Part I—Item 1—Business—Distribution and Servicing Arrangements" of our 2013 Form 10-K.

Our Revenues and Costs

Our Revenues

Feature Films

Our feature films are currently the source of a significant portion of our revenues. We derive revenue from our distributors' worldwide exploitation of our feature films in theaters and in post-theatrical markets such as home entertainment, digital, pay and free broadcast television, as well as other ancillary markets. Pursuant to the distribution arrangements with each of our theatrical distributors, prior to reporting any revenue for one of our feature films to us, each of our distributors is entitled to (i) retain a distribution fee, which is based on a percentage of gross revenues (without deduction for distribution and

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marketing costs and third-party distribution fees and sales agent fees) and (ii) recoup all of its permissible distribution and marketing costs with respect to the exploitation of our films on a film-by-film basis.

As such, under the various distributor agreements, each film’s total exploitation expenses and distribution fees are offset against that film’s revenues on a worldwide basis across all markets, and our distributors report no revenue to the Company until the first period in which an individual film’s cumulative worldwide gross revenues exceed its cumulative worldwide gross distribution fee and exploitation costs, which may be several quarters after a film’s initial theatrical release. Additionally, as the cumulative revenues and cumulative costs for each individual film are commingled between all markets and geographical territories and our distributors only report additional revenue to us for a film in those reporting periods in which that film’s cumulative worldwide gross revenues continue to exceed its cumulative worldwide gross costs, our reported revenues in any period are often a result of gross revenues with respect to an individual film generated in one or several territories being offset by the gross costs of both related and unrelated territories, as well as markets, for such film.

Our films are distributed in foreign countries and, in recent years, we have derived on average 71% of our worldwide box office receipts and 59% of our feature film revenue from foreign countries (sequel films generally have higher percentages than our original films). A significant amount of our transactions in foreign countries is conducted in the local currencies and, as a result, fluctuations in foreign currency exchange rates can affect our business, results of operations and cash flow. For a detailed discussion of our foreign currency risk, please see "Part II—Item 7A—Quantitative and Qualitative Disclosures About Market Risk—Market and Exchange Rate Risk—Foreign Currency Risk" of our 2013 Form 10-K.

Television Series and Specials

Our business activities also include the development, production and exploitation of television, direct-to-video and other non-theatrical content. We have certain rights in our distribution and servicing arrangements (described above) to engage our distributors to distribute non-feature film product for us. However, our revenue and cost activities related to our television series/specials and direct-to-video product are generally not subject to our distribution agreements and, accordingly, we receive payment and record revenues directly from third parties. In June 2013, we announced that we had entered into separate, long-term agreements with Netflix and the German television network SuperRTL regarding the production and distribution of existing and future episodic series. The agreement with Netflix provides for the Company to deliver over 300 hours of newly created series based on DreamWorks Animation and Classic Media properties. Under both agreements, we will receive a per-episode license fee. We will also be entitled to retain all revenues from the exploitation of the series in other countries and derived from all media not expressly licensed to Netflix or SuperRTL.

Direct-to-video sales are conducted through distribution agreements with various third parties. Revenues from direct-to-video sales are primarily generated in the U.S., Canada and the United Kingdom. Although the majority of direct-to-video sales are conducted through third parties, we bear the inventory risk and cash collection risk, have discretion in supplier selection and are significantly involved in the marketing of the products. Consequently, we are considered the principal in the transactions and recognize direct-to-video revenue and the related distribution, marketing and placement fees on a gross basis.

Consumer Products

Our Consumer Products segment includes all merchandising and licensing activities related to our intellectual properties. We generate royalty-based revenues from the licensing of our characters, film elements and other intellectual property rights to consumer product companies, retailers, live entertainment companies, music publishers, theme parks, cruise ships and hotels worldwide.

All Other

The primary revenue streams generated by our other segments are related to ATV (which we acquired in May 2013) and live performances. ATV generates revenues primarily from online advertising sales and distribution of content through media channels such as theatrical, home entertainment and television. Historically, the revenue activities related to our live performances have been minor relative to the size of our animated feature film business. We receive payment and record revenues directly from third parties. Subsequent to final performances of our live shows during the initial engagement, we generally continue to earn revenues through license arrangements of these productions that we enter into directly with third parties.

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Our Costs

Costs of Revenues

Feature Films. Costs of revenues related to our Feature Films segment primarily include the amortization of capitalized costs, participation and residual costs and write-offs of amounts previously capitalized for titles not expected to be released or released titles not expected to recoup their capitalized costs. While the amortization of capitalized costs is based on the amount of revenues earned from all markets (including consumer products revenue), the amount of amortization reflected in the Feature Films segment is only that attributable to revenues reported in this segment.

Generally, given the structure of our distribution arrangements, our costs of revenues do not include distribution and marketing costs or third-party distribution and fulfillment services fees associated with our feature films. Distribution and marketing costs associated with the exploitation of our feature films would be included in our costs of revenues to the extent that we caused our distributors to make additional expenditures in excess of mutually agreed amounts.

Television Series and Specials. Similar to our Feature Films segment, costs of revenues related to our Television Series and Specials segment primarily include the amortization of capitalized costs, participation and residual costs and write-offs of amounts previously capitalized. In addition, costs of revenues include amortization of intangible assets (which consists of certain character rights). Our television series and specials are typically not subject to the same distribution agreements as our feature films, and accordingly, costs of revenues includes distribution and marketing costs directly incurred by us. We also use a third-party, Anderson Merchandisors ("Anderson"), to distribute certain home entertainment product in the U.S. and Canada, and as a result of our arrangement with Anderson, costs of revenues also includes costs related to physical inventory sales and associated distribution fees.

Consumer Products. Costs of revenues associated with our Consumer Products segment is primarily related to the portion of amortization of capitalized costs of our film, television series/specials and live performances, as well as amortization of certain intangible assets, associated with consumer product and licensing revenues. Costs of revenues also includes participation costs, direct costs for sales commissions to outside third parties for the licensing and merchandising of our characters and certain marketing and promotion costs.

All Other. All Other costs of revenues includes those attributable to ATV and our live performance business. Costs of revenues associated with our live performance business includes the amortization of capitalized costs (excluding the portion attributable to consumer products revenue), marketing and other operating costs.

Capitalized Production Costs

Capitalized production costs represent the costs incurred to develop and produce our animated films and television series/specials, which primarily consist of compensation (including salaries, bonuses, stock-based compensation and fringe benefits) for animators, creative talent and voice talent (which, in the case of sequels, can be significant), equipment and other direct operating costs relating to the production (including production overhead). In addition, capitalized production costs may include interest expense to the extent that amounts were qualified to be capitalized.

Capitalized production costs and participations and residual costs are amortized and included in costs of revenues in the proportion that the revenue for each film or television series/special ("Current Revenue") during the period bears to its respective estimated remaining total revenue to be received from all sources ("Ultimate Revenue"). The amount of capitalized production costs that are amortized each period will therefore depend on the ratio of Current Revenue to Ultimate Revenue for each film or television series/special for such period. Because the profitability for each title varies depending upon its individual projection of Ultimate Revenues and its amount of capitalized costs incurred, total amortization may vary from period to period due to several factors, including: (i) changes in the mix of titles earning revenue, (ii) changes in any title’s Ultimate Revenue and capitalized costs and (iii) write-downs of capitalized production costs due to changes in the estimated fair value of unamortized capitalized production costs.

Unamortized capitalized production costs are evaluated for impairment each reporting period on a title-by-title basis. If estimated remaining revenue is not sufficient to recover the unamortized capitalized production costs for that title, the unamortized capitalized production costs will be written down to fair value determined using a net present value calculation. For our feature films (which comprise the largest part of our business), the degree of uncertainty around the estimates of net cash flows is substantially reduced after a film’s initial theatrical release, and thus, to the extent that we record a material impairment charge, it typically occurs in the quarter of a film's initial theatrical release. For a discussion of write-downs of

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capitalized production costs recorded during the three months ended March 31, 2014, see "—Overview of Financial Results—Costs of Revenues."

Selling, General and Administrative Expenses

Our selling, general and administrative expenses consist primarily of employee compensation (including salaries, bonuses, stock-based compensation and employee benefits), rent, insurance and fees for professional services. In addition, selling, general and administrative expenses include advertising and marketing costs that are not directly attributable to our feature films, television series/specials or live performances. In addition, as a result of our restructuring plans (as described in Note 19 of the unaudited consolidated financial statements contained in Item 1 of this Quarterly Report), our selling, general and administrative expenses also include restructuring charges.

Other Operating Income

Operating-related income or gains that are not considered revenues are classified as other operating income in our consolidated statements of operations. Other operating income largely consists of income recognized in connection with our contributions to ODW in the form of consulting and training services and the license of technology. Refer to the section entitled "—Overview of Financial Results—Other Operating Income" for further details of amounts recognized as other operating income during the three months ended March 31, 2014.

For a detailed description of our revenues and operating expenses, please see "Management’s Discussion and Analysis of Financial Condition and Results of Operations—Our Revenues and Costs" of our 2013 Form 10-K.

Seasonality

The timing of revenue reporting and receipt of cash remittances to us, related to our feature films, from our distributors fluctuates based upon the timing of our films’ theatrical and home entertainment releases and, with respect to certain of our distributors, the recoupment position of our distributors on a film-by-film basis, which varies depending upon a film’s overall performance. From time-to-time, we may enter into license arrangements directly with third-parties to distribute our titles through digital media formats. The timing of revenues earned under these license arrangements fluctuates depending on when each title is made available. Furthermore, the timing of revenues related to our television specials may fluctuate if the title is holiday-themed. The licensing of our character and film elements are influenced by seasonal consumer purchasing behavior and the timing of our animated feature film theatrical releases and television series/specials broadcasts. We expect that revenues generated from our Classic Media properties will tend to be higher during the fourth quarter of each calendar year due to the holiday-themed content offered through television distribution rights as well as home entertainment products geared towards the holiday season. As a result, our annual or quarterly operating results, as well as our cash on hand, for any period are not necessarily indicative of results to be expected for future periods.

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Results of Operations

Overview of Financial Results

The following table sets forth, for the periods presented, certain data from our unaudited consolidated statements of operations. This information should be read in conjunction with our unaudited consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report.

	Three Months Ended March 31,						Increase/(Decrease)
	2014(1)			2013			$ Change			% Change
	(in millions, except percentages and per share data)
Revenues	$	147.2		$	134.6		$	12.6		9.4	%
Costs of revenues	160.6			85.5			75.1			87.8	%
Gross (loss) profit	(13.4		)	49.1			(62.5		)	(127.3	)%
Product development	0.5			1.0			(0.5		)	(50.0	)%
Selling, general and administrative expenses	49.7			42.8			6.9			16.1	%
Other operating income	(1.7		)	—			1.7			100.0	%
Operating (loss) income	(61.9		)	5.3			(67.2		)	NM
Non-operating income (expense):
Interest (expense) income, net	(1.8		)	0.9			(2.7		)	NM
Other income, net	1.2			1.0			0.2			20.0	%
Decrease (increase) in income tax benefit payable to former stockholder	0.9			(0.7		)	1.6			NM
(Loss) income before loss from equity method investees and income taxes	(61.6		)	6.5			(68.1		)	NM
Loss from equity method investees	3.3			—			3.3			100.0	%
(Loss) income before income taxes	(64.9		)	6.5			(71.4		)	NM
(Benefit) provision for income taxes	(22.5		)	0.4			(22.9		)	NM
Net (loss) income	(42.4		)	6.1			(48.5		)	NM
Less: Net income attributable to non-controlling interests	0.5			0.5			—			—	%
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	$	(42.9	)	$	5.6		$	(48.5	)	NM
Diluted net (loss) income per share attributable to DreamWorks Animation SKG, Inc.	$	(0.51	)	$	0.07		$	(0.58	)	NM
Shares used in computing diluted net (loss) income per share	84.5			85.3						(0.9	)%

____________________

NM: Not Meaningful.

⁽¹⁾  Our results for the three months ended March 31, 2014 included a write-down of film costs totaling $57.1 million. See "—Three Months Ended March 31, 2014 Compared to Three Months Ended March 31, 2013—Costs of Revenues" for further details.

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Three Months Ended March 31, 2014 Compared to Three Months Ended March 31, 2013

The following chart sets forth (in millions), for the periods presented, our revenues by segment. This information should be read in conjunction with our unaudited consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report.

____________________

⁽¹⁾  For each period shown, "Feature Films" consists of revenues attributable to the development, production and exploitation of feature films in the theatrical, television, home entertainment and digital markets. "Television Series and Specials" consists of revenues attributable to the development, production and exploitation of television, direct-to-video and other non-theatrical content. "Consumer Products" consists of revenues attributable to our merchandising and licensing activities related to the exploitation of our intellectual property rights. "All Other" consists of revenues not attributable to the reportable segments (primarily ATV and live performances).

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Revenues. For the three months ended March 31, 2014, our revenues were $147.2 million, an increase of $12.6 million, or 9.4%, as compared to $134.6 million for the three months ended March 31, 2013.

Feature Films

The following chart sets forth the revenues generated by our Feature Films segment, by category, for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013 (in millions):

____________________

⁽¹⁾ For each period shown, "Current year theatrical releases" consists of revenues attributable to films released during the current year, "Prior year theatrical releases" consists of revenues attributable to films released during the immediately prior year, and "Preceding year theatrical releases" consists of revenues attributable to films released during all previous periods that are not yet part of our library. Titles are added to the "Library" category starting with the quarter of a title's second anniversary of the initial domestic theatrical release.

Current year theatrical releases. Revenues generated by our "Current year theatrical release" category increased $0.4 million, or 15.4%, during the three months ended March 31, 2014 when compared to the three months ended March 31, 2013. During the three months ended March 31, 2014, Mr. Peabody and Sherman (March 2014 domestic theatrical release) contributed $3.0 million, or 2.0%, of consolidated revenues, primarilyearned in the ancillary markets as two of our distributors (Fox and our South Korean distributor) did not recoup their distribution and marketing costs during this period. We anticipate that these distributors will recoup their marketing and distribution costs from their future on-going distribution of Mr. Peabody and Sherman in the theatrical and post-theatrical (e.g., home entertainment and television) markets. During the three months ended March 31, 2013, The Croods (March 2013 release) contributed $2.6 million, or 1.9%, of consolidated revenues, earned in the ancillary markets. Although each of these titles contributed a similar amount of revenues during each respective period, Mr. Peabody and Sherman's worldwide theatrical performance was not as strong when compared to the performance of The Croods (refer to "Costs of Revenues" for further discussion).

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Prior year theatrical releases. Revenues generated by our "Prior year theatrical releases" category increased $33.5 million to $64.0 million during the three months ended March 31, 2014 when compared to $30.5 million during the three months ended March 31, 2013. Our revenues during the three months ended March 31, 2014 benefited from having two titles becoming available for distribution in the domestic pay television window (which includes SVOD distribution) compared to none during the three months ended March 31, 2013.

For the three months ended March 31, 2014, "Prior year theatrical release" revenues consisted of those generated by The Croods (March 2013 release) and Turbo (July 2013 release). During the three months ended March 31, 2014, The Croods and Turbo contributed $41.7 million (or 28.3%) and $22.3 million (or 15.1%) of revenues, respectively, primarily related to each title's SVOD distribution.

For the three months ended March 31, 2013, "Prior year theatrical release" revenues consisted of those generated by Madagascar 3 (June 2012 release) and Rise of the Guardians (November 2012 release). During the three months ended March 31, 2013, Madagascar 3 contributed $21.1 million, or 15.7%, of consolidated revenues, primarily earned in the international home entertainment market. During the three months ended March 31, 2013, Rise of the Guardians contributed $9.4 million, or 7.0%, of revenues earned in the worldwide home entertainment market.

Preceding year theatrical releases. Revenues generated by our "Preceding year theatrical releases" category consist of revenues attributable to films released during all previous periods that are not yet part of our library. Revenues generated by our "Preceding year theatrical releases" category decreased $2.4 million, or 31.6%, to $5.2 million during the three months ended March 31, 2014 when compared to $7.6 million of revenues during the three months ended March 31, 2013. This decrease was primarily attributable to Puss in Boots (a sequel title released in October 2011), which is a stronger title as compared to Rise of the Guardians (an original title released in November 2012). Preceding year theatrical release revenues during the three months ended March 31, 2014 were comprised of Rise of the Guardians and Madagascar 3, which contributed an aggregate of $5.2 million, or 3.5%, of consolidated revenues, primarily earned in the worldwide home entertainment market. Preceding year theatrical release revenues during the three months ended March 31, 2013 were comprised of Puss in Boots and Kung Fu Panda 2, which contributed an aggregate of $7.6 million, or 5.6% of consolidated revenues,primarily earned in the worldwide home entertainment market.

Library. Titles are added to the "Library" category starting with the quarter of a title's second anniversary of the initial domestic theatrical release. Revenues from our "Library" category remained relatively consistent for the three months ended March 31, 2014 and 2013 at $37.9 million and $37.8 million, respectively. During the three months ended March 31, 2014, revenues generated by our "Library" category were attributable to Puss in Boots, primarily generated in the worldwide television markets. During the three months ended March 31, 2013, revenues generated by our "Library" category were mainly attributable to Megamind, primarily generated in the worldwidefreetelevision markets.

Non-Feature Film Revenues

The following table sets forth the revenues generated by our segments, other than Feature Films, for the three months ended March 31, 2014 as compared to the three months ended March 31, 2013 (in millions, except percentages):

	Three Months Ended March 31,				Increase (Decrease)
Segment	2014		2013		$			%
Television Series and Specials	$	17.9	$	19.4	$	(1.5	)	(7.7	)%
Consumer Products	12.1		27.5		(15.4		)	(56.0	)%
All Other(1)	7.1		9.2		(2.1		)	(22.8	)%
Total Non-Feature Film revenues	$	37.1	$	56.1	$	(19.0	)	(33.9	)%
(1) "All Other" consists of revenues not attributable to the other segments.

Television Series and Specials. As illustrated in the table above, revenues generated from our Television Series and Specials segment decreased $1.5 million, or 7.7%, to $17.9 million during the three months ended March 31, 2014 when compared to $19.4 million during the three months ended March 31, 2013. This decrease was primarily attributable to a decline in revenues generated by our Classic Media properties during the three months ended March 31, 2014 when compared to the three months ended March 31, 2013 due to the timing of product availability which resulted in higher revenues earned during the three months ended March 31, 2013. As it relates to our Classic Media properties, Veggie Tales continues to be a main revenue contributor.

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Consumer Products. As illustrated in the table above, revenues generated from our Consumer Products segment decreased $15.4 million to $12.1 million during the three months ended March 31, 2014 when compared to $27.5 million during the three months ended March 31, 2013, which was primarily due to a lower volume of licensing arrangements related to our DreamWorks Animation and Classic Media properties as a result of the timing of these deals. Additionally, during the three months ended March 31, 2013, our revenues benefited from the sale of our share ofrights in the 1960s live-action Batman television series.

All Other. Revenues generated by our All Other segment decreased $2.1 million to $7.1 million during the three months ended March 31, 2014 when compared to $9.2 million during the three months ended March 31, 2013. This decrease was primarily attributable to lower revenues from our live performances due to the final performances of our How to Train Your Dragon arena show and the London version of our Shrek The Musical show during the three months ended March 31, 2013. This decrease was largely offset by revenues generated by ATV (which we acquired in May 2013) during the three months ended March 31, 2014, which were $4.1 million, or 2.8% of consolidated revenues, primarily related to content licensing fees and advertising revenues earned.

Costs of Revenues.  Costs of revenues for the three months ended March 31, 2014 totaled $160.6 million, an increase of $75.1 million, or 87.8%, compared to $85.5 million for the three months ended March 31, 2013. Costs of revenues as a percentage of revenues were 109.1% for the three months ended March 31, 2014 and 63.5% for the three months ended March 31, 2013. The following is a discussion of our costs of revenues by segment:

Feature Films. The primary component of our costs of revenues is film amortization costs and, as it relates to the three months ended March 31, 2014, impairment charges. Costs of revenues as a percentage of revenues for our Feature Films segment were 123.1% during the three months ended March 31, 2014 compared to 67.0% for the three months ended March 31, 2013. The following were the primary contributors of our costs of revenues during the three months ended March 31, 2014 when compared to the three months ended March 31, 2013:

• During the three months ended March 31, 2014, we recorded an impairment charge of $57.1 million(exclusive of the impairment allocated to the Consumer Products segment, which was immaterial) on our theatrical release Mr. Peabody and Sherman (released domestically in March 2014). Due to Mr. Peabody and Sherman's weaker-than-expected worldwide theatrical performance during March 2014, we re-assessed the film's Ultimate Revenue projections (including our estimates of the film's revenues in post-theatrical markets (e.g., home entertainment and television, which have not yet been released)), which resulted in the film's estimated fair value (calculated using a net present value model) being less than the film’s unamortized capitalized production costs (refer to Note 5 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report for further information);

• Excluding the impairment charge described above, costs of revenues as a percentage of revenues increased slightly during the three months ended March 31, 2014 when compared to the three months ended March 31, 2013;

• 2014's "Prior year theatrical releases" had an overall higher amortization rate of compared to 2013's "Prior year theatrical releases." 2014's "Prior year theatrical releases" category included Turbo, which has a higher rate of amortization due to its lower projected Ultimate Revenues; and

• Our “Library” category had an overall lower amortization rate as a result of revenues generated by Puss in Boots (which is a title that has a lower rate of amortization) during the three months ended March 31, 2014 when compared to Megamind (which is a title that has a higher rate of amortization compared to the average amortization rate of our library titles), which was the primary revenue contributor in our "Library" category during the three months ended March 31, 2013.

Television Series and Specials. Costs of revenues, the primary component of which is inventory amortization costs, as a percentage of revenues for our Television Series and Specials segment were 68.0% during the three months ended March 31, 2014 compared to 74.6% for the three months ended March 31, 2013. The following were the primary contributors of our costs of revenues during the three months ended March 31, 2014 when compared to the three months ended March 31, 2013:

• A lower amortization rate attributable to our How to Train Your Dragon television series for the three months ended March 31, 2014 when compared to the three months ended March 31, 2013 as a result of an increase in our estimate of Ultimate Revenues that occurred subsequent to March 31, 2013;

• An increase in costs of revenues as a percentage of revenues as a result of the amortization of intangible assets associated with our Classic Media properties. This catalog of properties was recorded in groups of definite and indefinite-lived intangible assets upon acquisition. Intangible asset groups classified as

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indefinite-lived are not amortized, while those classified as definite-lived are amortized on a straight-line basis. Therefore, costs of revenues do not directly correlate with revenues generated during the period.

Consumer Products. Costs of revenues as a percentage of revenues for our Consumer Products segment during the three months ended March 31, 2014 were 50.2% compared to 33.0% for the three months ended March 31, 2013. Costs of revenues as a percentage of revenues increased as the amortization of intangible assets associated with our Classic Media properties do not directly correlate with revenues generated during the period (as further described above under our discussion of the Television Series and Specials segment).

All Other. During the three months ended March 31, 2014 and 2013,costs of revenues related to our All Other segment were $6.9 million and $9.4 million, respectively, which primarily consisted of those related to ATV and our live performance business. For the three months ended March 31, 2014, costs of revenues benefited from the decrease in live performance revenues, which historically have had higher costs of revenues as a percentage of revenues.

Product Development. Product development costs decreased to $0.5 million during the three months ended March 31, 2014 when compared to $1.0 million during the three months ended March 31, 2013. Product development costs primarily represent research and development costs related to our technology initiatives. The decrease is primarily due to a decline in development activity associated with a technology project that we are no longer pursuing.

Selling, General and Administrative Expenses. Total selling, general and administrative expenses increased $6.9 million to $49.7 million (including $5.1 million of stock-based compensation expense) for the three months ended March 31, 2014 from $42.8 million (including $3.9 million of stock-based compensation expense) for the three months ended March 31, 2013. This 16.1% aggregate increase was primarily attributable to:

• An increase of $1.8 million as our selling, general and administrative expenses now include those of ATV (which we acquired in May 2013);

• An increase of $2.5 million as a result of a change in the estimate of the fair value of the contingent consideration liability related to the acquisition of ATV (for further information, refer to Note 3 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report). In addition to changes resulting from the passage of time, we expect that there could be changes to our estimate of this liability at the end of the second quarter of 2014 depending on ATV's actual results; and

• An increase of $1.2 million in stock-based compensation as a result of additional equity-based awards granted in 2013.

These increases were partially offset by the following:

• A decrease of $5.6 million attributable to lower incentive compensation expense (excluding stock-based compensation) related to performance-based compensation, which varies with changes in forecasts of the related performance metrics that will be achieved;

• A decrease in restructuring charges of $1.7 million, which primarily consisted of severance and benefits; and

• Decreases of other selling, general and administrative expenses, none of which were individually material.

Other Operating Income. During the three months ended March 31, 2014, we made certain non-cash contributions to ODW which resulted in the recognition of income associated with these contributions. During the three months ended March 31, 2014, other operating income totaled $1.7 million and related to consulting and training services provided, as well as a portion of the value of the technology license granted.

Operating (Loss) Income. Operating loss for the three months ended March 31, 2014 was $61.9 million compared to operating income of $5.3 million for the three months ended March 31, 2013. The decrease in operating income when comparing the three months ended March 31, 2014 to the three months ended March 31, 2013 was largely due to the impairment of Mr. Peabody and Sherman's capitalized film costs (as previously described).

Interest Expense/Income, Net. For the three months ended March 31, 2014 and 2013, we recorded net interest expense (net of amounts capitalized) of $1.8 million and net interest income of $0.9 million, respectively. Interest expense (net) during the three months ended March 31, 2014 increased when compared to the three months ended March 31, 2013 primarily due to interest expense incurred on our senior unsecured notes issued in August 2013.

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Other Income, Net.  For the three months ended March 31, 2014 and 2013, total other income (net of other expenses) was $1.2 million and $1.0 million, respectively. Other income in both years consisted mainly of income recognized in connection with preferred vendor arrangements with certain of our strategic alliance partners.

Decrease (Increase) in Income Tax Benefit Payable to Former Stockholder.  As a result of a partial increase in the tax basis of our tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of our 2004 initial public offering (“Tax Basis Increase"), we may pay reduced tax amounts to the extent we generate sufficient taxable income in the future. As a result of the Tax Basis Increase, we are obligated to remit to such affiliates 85% of any cash savings in U.S. Federal income tax, California franchise tax and certain other related tax benefits, subject to repayment if it is determined that these savings should not have been available to us.

For the three months ended March 31, 2014, we recorded $0.9 million as a decrease in income tax benefit payable to former stockholder in our statements of operations as a result of our ability to claim certain federal tax deductions. For the three months ended March 31, 2013, our payable to the former stockholder was impacted by our ability to retroactively apply research and development credits and other federal tax incentives as a result of extensions granted under The American Taxpayer Relief Act of 2012 ("the Act"). As the Act was not enacted until January 2, 2013, we were not able to apply certain federal tax incentives until the first quarter of 2013, which resulted in $0.7 million recorded as an increase in income tax benefit payable to the former stockholder in our statements of operations.

Loss from Equity Method Investees. We use the equity method of accounting for investments in companies in which we own 50% or less and can exercise significant influence, but do not control. During the three months ended March 31, 2014, our portion of the losses incurred by equity method investees was $3.3 million, which were primarily attributable to our shares of losses incurred by ODW. We did not have any equity method investments during the three months ended March 31, 2013.

Benefit/Provision for Income Taxes.  Our loss before income taxes during the three months ended March 31, 2014 is expected to result in a decrease in our tax liability in future periods. Accordingly, for the three months ended March 31, 2014, we recorded a benefit for income taxes of $22.5 million, or an effective tax rate of34.1%. For the three months ended March 31, 2013, we recorded a provision for income taxes of $0.4 million, or an effective tax rate of 5.8%. However, when our benefit/provision for income taxes is combined with the amounts associated with the Decrease (Increase) in Income Tax Benefit Payable to Former Stockholder (see above), the combined effective tax rates for the three months ended March 31, 2014 and 2013 were 35.5% and 15.4%, respectively. For the three months ended March 31, 2013, our effective tax rate and combined effective tax rate was lower than the 35% statutory federal rate as a result of the retroactive application of certain research and development credits and other federal tax incentives.

For further information on the methodology applied in determining our benefit for income taxes for the three months ended March 31, 2014, refer to Note 11 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report.

Net Income Attributable to Non-controlling Interests. As a result of our acquisition of Classic Media, we hold a 50% equity interest in a joint venture operated through Bullwinkle Studios, LLC ("Bullwinkle Studios"). We consolidate the results of this joint venture because we retain control over the operations. Net income attributable to non-controlling interests represents the joint venture partner's share of the income generated by Bullwinkle Studios. For each of the three months ended March 31, 2014 and 2013, net income attributable to non-controlling interests was $0.5 million.

Net (Loss) Income Attributable to DreamWorks Animation SKG, Inc.  Net loss (excluding net income attributable to non-controlling interests) for the three months ended March 31, 2014 was $42.9 million, or $0.51 per share, as compared to net income of $5.6 million, or $0.07 per diluted share, during the three months ended March 31, 2013.

Financing Arrangements

There were no material changes during the period covered by this Quarterly Report, outside of the ordinary course of business, to the financing arrangements specified in the section "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our 2013 Form 10-K.

As of March 31, 2014, we were in compliance with all applicable financial debt covenants.

For a more detailed description of our various financing arrangements, please see Note 10 to the unaudited consolidated financial statements contained in Part I, Item 1 of this Quarterly Report and the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of our 2013 Form 10-K.

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Liquidity and Capital Resources

Current Financial Condition

Cash generated from our operating activities and cash on hand during the three months ended March 31, 2014 were adequate to meet our operating cash needs. For the next 12 months, we expect that cash on hand, cash from operations and funds available under our revolving credit facility will be sufficient to satisfy our anticipated cash needs for working capital (e.g., selling, general and administrative costs, participation and residual payments, production and development costsrelated to film and non-film initiatives and new business investments), capital expenditures and debt service payments.

As of March 31, 2014, we had cash and cash equivalents totaling $69.6 million. Our cash and cash equivalents consist of cash on deposit and short-term money market investments, principally U.S. government securities, that are rated AAA and with maturities of three months or less when purchased. Our cash and cash equivalents balance at March 31, 2014 decreased by $25.8 million from $95.5 million at December 31, 2013. Components of this change in cash for the three months ended March 31, 2014, as well as for the three months ended March 31, 2013, are provided below in more detail.

As previously described, our feature films are now being distributed in China by ODW. China imposes cross-border currency regulations that restrict inflows and outflows of cash. As a result, we may experience a delay in receiving cash remittances from ODW for revenues generated in China. Based on the current amounts of revenue generated through our distribution arrangement with ODW, we do not currently believe that a delay in cash remittances from China will affect our liquidity and capital resource needs. As of March 31, 2014, the amount of outstanding receivables from ODW for distribution of our films was $4.3 million.

Operating Activities

Net cash (used in) provided by operating activities for the three months ended March 31, 2014 and 2013 was as follows (in thousands):

	2014			2013
Net cash (used in) provided by operating activities	$	(12,487	)	$	41,682

During the three months ended March 31, 2014, our main source of cash from operating activities was the collection of revenue. The main sources of cash during this period were The Croods' international theatrical and worldwide home entertainment revenues, Rise of the Guardians' international television revenues, Madagascar 3's international theatrical and television revenues, Puss in Boots' international television revenues, and to a lesser extent, the collection of worldwide television and home entertainment revenues from our other films. Cash used in operating activities for the three months ended March 31, 2014 included $31.4 million paid related to incentive compensation payments. The cash from operating activities was also partially offset by production spending for our films and television series, as well as participation and residual payments. In recent years, cash used in operating activities has increased due to a greater number of projects in production as we are currently planning on releasing three films in each of 2014 and 2015, as well as our expansion of our episodic series productions. In addition, our cash collections have been lower due to the performance of our feature films, which, in the past year, has not been as strong as we have historically experienced.

During the three months ended March 31, 2013, our main source of cash from operating activities was the collection of revenue from Paramount related to Madagascar 3's domestic television, international theatrical and worldwide home entertainment revenues, Puss in Boots' international television revenues, and to a lesser extent, the collection of worldwide television and home entertainment revenues from our other films. Cash used in operating activities for the first three months of 2013 included $5.3 million paid related to annual incentive compensation payments, as well as $26.4 million paid to an affiliate of a former stockholder related to tax benefits realized in 2013 from the Tax Basis Increase. The cash from operating activities was also partially offset by production spending for our films and television specials/series, as well as participation and residual payments.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2014 and 2013 was as follows (in thousands):

	2014			2013
Net cash used in investing activities	$	(12,711	)	$	(8,588	)

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Net cash used in investing activities for the three months ended March 31, 2014 and 2013 was partially attributable to the investment in property, plant and equipment. In addition, during the three months ended March 31, 2014, we made cash contributions totaling $7.0 million in connection with investmentsin various unconsolidated entities. For further information of our investments in unconsolidated entities, refer to Note 7 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2014 and 2013 was as follows (in thousands):

	2014			2013
Net cash used in financing activities	$	(1,017	)	$	(16,552	)

Net cash used in financing activities for the three months ended March 31, 2014 and 2013 was primarily comprised of repurchases of our Class A common stock. During the three months ended March 31, 2014, we did not repurchase any of our common stock other than those related to repurchases in order to satisfy tax obligations related to the vesting of restricted stock awards. During the three months ended March 31, 2013, we repurchased 0.8 million shares of our Class A common stock for $16.2 million under our stock repurchase program (refer to Note 12 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report).

Contractual Obligations

Contributions to Oriental DreamWorks

Pursuant to the Transaction and Contribution Agreement with ODW (see Note 7 to our unaudited consolidated financial statements), we have committed to make certain cash and non-cash contributions in connection with the formation of ODW. As of March 31, 2014, our remaining contribution commitments consisted of the following: (i) $44.3 million in cash (which is expected to be funded over the next three years), (ii) two film projects developed by us, (iii) remaining delivery requirements under the licenses of technology and certain other intellectual property of ours and (iv) approximately $7.2 million in consulting and training services. Some of these remaining commitments will require future cash outflows for which we are not currently able to estimate the timing of contributions as this will depend on, among other things, ODW's operations. For a more detailed description of our contribution commitments, please see Note 7 of the unaudited consolidated financial statements contained in Part I, Item 1 of this Quarterly Report.

Contingent Consideration

As a result of our acquisition of ATV, we may be obligated to make additional contingent cash payments as part of the purchase price. The amount of contingent consideration to be paid is dependent on whether certain earnings targets are met in 2014 and 2015. The maximum amount of potential contingent consideration payable is $117.0 million. As of March 31, 2014, our estimate of the total fair value of the future cash consideration to be paid was $99.0 million. We anticipate that any expected cash payments will be made in 2015 and 2016 once ATV's operating results for 2014 and 2015 are available.

Non-Cancelable Talent Commitments

As of March 31, 2014, we had non-cancelable talent commitments totaling approximately$37.0 million that we expect to be payable over the next five years.

Other

On April 1, 2014, we executed an Agreement and Plan of Merger and Reorganization to acquire Big Frame, Inc. The purchase price consisted of cash payments totaling $15.0 million (inclusive of amounts held in escrow) and was paid upon closing of the transaction, which occurred on April 8, 2014. We expect that this acquisition will have an immaterial impact on our consolidated financial statements.

There have been no other material changes during the period covered by this Quarterly Report, outside of the ordinary course of business, to the contractual obligations specified in the table of contractual obligations included in the section "Management’s Discussion and Analysis of Financial Condition and Results of Operations" included in our 2013 Form 10-K.

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Critical Accounting Policies and Estimates

Our significant accounting policies are outlined in Note 2 to the audited consolidated financial statements contained in our 2013 Form 10-K. We prepare our consolidated financial statements in accordance with U.S. generally accepted accounting principles ("U.S. GAAP"). In doing so, we have to make estimates and assumptions that affect our reported amounts of assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities including:

• ultimate revenues and ultimate costs of film, television product and live performance productions;

• relative selling price of the Company's products for purposes of revenue allocation in multi-property licenses and other multiple deliverable arrangements;

• determination of fair value of assets and liabilities for the allocation of the purchase price in an acquisition;

• determination of fair value of non-cash contributions to investments in unconsolidated entities;

• useful lives of intangible assets;

• product sales that will be returned and the amount of receivables that ultimately will be collected;

• the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements;

• loss contingencies and contingent consideration arrangements; and

• assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting.

In some cases, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ materially from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates on past experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis.

An accounting policy is deemed to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, if different estimates reasonably could have been used, or if changes in the estimate that are reasonably likely to occur could materially impact the financial statements. Management believes there have been no material changes during the period covered by this Quarterly Report to the items that we disclosed as our critical accounting policies and estimates in "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements please see Note 2 of the unaudited consolidated financial statements contained in Part I, Item 1 of this Quarterly Report.

Non-GAAP Measures

Adjusted EBITDA Reconciliation

In connection with our issuance of the 6.875% senior notes due 2020 (the “Notes”) on August 14, 2013, we began to use Adjusted EBITDA to provide investors with a measure of our ability to make our interest payments on the Notes. We define Adjusted EBITDA as net income before provision for income taxes, loss from equity method investees, increase/decrease in income tax benefit payable to former stockholder, other income, net, interest income, net, other non-cash operating income, depreciation and amortization, stock-based compensation expense, impairments and other charges and certain components of amortization of film and other inventory costs (refer to the reconciliation below). Although the indenture governing the Notes does not include covenants based on Adjusted EBITDA, we believe our investors and noteholders use Adjusted EBITDA as one indicator of our ability to comply with our debt covenants as it is similar to the consolidated cash flow measure described in the indenture (refer to our Current Report on Form 8-K filed on August 14, 2013). Although consolidated cash flow is not a financial covenant under the indenture, it is a measure that is used to determine our ability to make certain restricted payments and incur additional indebtedness in accordance with the terms of the indenture.

Adjusted EBITDA is not prepared in accordance with U.S. GAAP. We believe the use of this non-GAAP measure on a consolidated basis assists investors in comparing our ongoing operating performance between periods. Adjusted EBITDA provides a supplemental presentation of our operating performance and generally includes adjustments for unusual or non-operational activities. We may not determine Adjusted EBITDA in a manner consistent with the methodologies used by other companies. Adjusted EBITDA (a) does not represent our operating income or cash flows from operating activities as defined by

36

U.S. GAAP; (b) does not include all of the adjustments used to compute consolidated cash flow for purposes of the covenants applicable to the Notes; (c) is not necessarily indicative of cash available to fund our cash flow needs; and (d) should not be considered as an alternative to net income, operating income, cash provided by operating activities or our other financial information as determined under U.S. GAAP. Our presentation of Adjusted EBITDA should not be construed as an implication that our future results will be unaffected by unusual or nonrecurring items. We believe that net income is the most directly comparable U.S. GAAP measure to Adjusted EBITDA. Accordingly, the following table presents a reconciliation of net income (or loss) to Adjusted EBITDA (in thousands):

	Three Month Ended
	March 31, 2014
Net loss	$	(42,416	)
Benefit for income taxes	(22,467		)
Loss from equity method investees	3,260
Decrease in income tax benefit payable to former stockholder	(927		)
Other income, net	(1,218		)
Interest expense, net	1,773
Operating loss	(61,995		)
Income related to investment contributions	(1,672		)
Amounts included in amortization of film and other inventory costs(1)	8,821
Film impairment	57,074
Depreciation and amortization(2)	4,235
Stock-based compensation expense	5,309
Adjusted EBITDA	$	11,772

____________________

⁽¹⁾  Amortization of film and other inventory costs in any period includes depreciation and amortization, interest expense and stock-based compensation expense that were capitalized as part of film and other inventory costs in the period that those charges were incurred. Refer to our accounting policies in our 2013 Form 10-K. For purposes of Adjusted EBITDA, we add back the portion of amortization of film and other inventory costs that represents amounts previously capitalized as depreciation and amortization, interest expense and stock-based compensation expense.

⁽²⁾  Includes amortization of intangible assets classified within costs of revenues.

In addition, as Adjusted EBITDA is also used as a liquidity measure, the following table presents a reconciliation of Adjusted EBITDA to cash flow provided by (used in) operating activities (in thousands):

	Three Month Ended
	March 31, 2014
Adjusted EBITDA	$	11,772
Amortization and write-off of film and other inventory costs(1)	79,517
Revenue earned against deferred revenue and other advances	(16,188		)
Other income, net	1,218
Interest expense, net	(1,773		)
Net refund from income taxes and stockholder payable	1,498
Changes in certain operating asset and liability accounts	(88,531		)
Cash used in operating activities	$	(12,487	)

 ____________________

⁽¹⁾  Represents the remaining portion of amortization and write-off of film and other inventory costs not already included in Adjusted EBITDA (refer to reconciliation of net loss to Adjusted EBITDA).

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market and Exchange Rate Risk

For quantitative and qualitative disclosures about our interest rate, foreign currency and credit risks, please see "Part II—Item 7A—Quantitative and Qualitative Disclosures About Market Risk," of our 2013 Form 10-K. Our exposure to interest rate, foreign currency and credit risks has not changed materially since December 31, 2013.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures.

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Quarterly Report. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on that evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended, is accurately recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

(b) Changes in internal controls over financial reporting.

There were no changes in our internal control over financial reporting that occurred during the period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See discussion of Legal Proceedings in Note 17 to the unaudited consolidated financial statements contained in Part I, Item 1 of this Quarterly Report.

ITEM 1A. RISK FACTORS

Information concerning certain risks and uncertainties appears in "Part I—Item 1A—Risk Factors" of the Company’s 2013 Form 10-K. You should carefully consider these risks and uncertainties before making an investment decision with respect to shares of our Class A common stock. Such risks and uncertainties could materially adversely affect our business, financial condition or operating results.

During the period covered by this Quarterly Report, there have been no material changes from the risk factors previously disclosed in the Company's 2013 Form 10-K or filings subsequently made with the SEC.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table shows Company repurchases of its Class A common stock for the three months ended March 31, 2014.

	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced  Plan or Program(1)	Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plan or Program(1)
January 1–January 31, 2014	—	$	—	—	$	100,000,000
February 1–February 28, 2014	—	$	—	—	$	100,000,000
March 1–March 31, 2014	—	$	—	—	$	100,000,000
Total	—	$	—	—

 ____________________

⁽¹⁾  In July 2010, the Company’s Board of Directors terminated the then-existing stock repurchase program and authorized a new stock repurchase program pursuant to which the Company may repurchase up to an aggregate of $150 million of its outstanding stock.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit 31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 101	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 formatted in eXtensible Business Reporting Language: (i) Unaudited Consolidated Balance Sheets at March 31, 2014 and December 31, 2013; (ii) Unaudited Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013; (iii) Unaudited Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2014 and 2013; (iv) Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013; and (v) Notes to the Unaudited Consolidated Financial Statements

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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.

	DREAMWORKS ANIMATION SKG, INC.
Date: April 29, 2014	By:	/S/    LEWIS W. COLEMAN
	Name:	Lewis W. Coleman
	Title:	President and Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)

40

EXHIBIT INDEX

Exhibit Number	Description
31.1	Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certifications of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 formatted in eXtensible Business Reporting Language: (i) Unaudited Consolidated Balance Sheets at March 31, 2014 and December 31, 2013; (ii) Unaudited Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013; (iii) Unaudited Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2014 and 2013; (iv) Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013; and (v) Notes to the Unaudited Consolidated Financial Statements

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EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO EXCHANGE ACT RULE 13A – 14(A) OR 15D – 14(A),

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

I, Jeffrey Katzenberg, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DreamWorks Animation SKG, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 29, 2014	/S/    JEFFREY KATZENBERG
	Jeffrey Katzenberg, Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO EXCHANGE ACT RULE 13A – 14(A) OR 15D – 14(A),

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

I, Lewis W. Coleman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of DreamWorks Animation SKG, Inc.;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this 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 report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 29, 2014	/S/    LEWIS W. COLEMAN
	Lewis W. Coleman, President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350

As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of DreamWorks Animation SKG, Inc., a Delaware corporation (the “Company”), for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: April 29, 2014	/S/    JEFFREY KATZENBERG
	Jeffrey Katzenberg Chief Executive Officer
Date: April 29, 2014	/S/    LEWIS W. COLEMAN
	Lewis W. Coleman President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002, or other document authenticating, acknowledging or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Earnings Per Share Data (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Computation of basic and diluted net income per share

The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2014			2013
Numerator:
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	$	(42,936	)	$	5,577
Denominator:
Weighted average common shares and denominator for basic calculation:
Weighted average common shares outstanding	84,588			84,781
Less: Unvested restricted stock	(104		)	(110		)
Denominator for basic calculation	84,484			84,671
Weighted average effects of dilutive stock-based compensation awards:
Restricted stock awards	—			594
Denominator for diluted calculation	84,484			85,265
Net (loss) income per share—basic	$	(0.51	)	$	0.07
Net (loss) income per share—diluted	$	(0.51	)	$	0.07

Weighted average number of options used to purchase shares of common stock, stock appreciation rights, restricted stock awards and equity awards

The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, stock appreciation rights, restricted stock awards and equity awards subject to performance conditions which were not included in the calculation of diluted per share amounts (for periods where the Company had net income) because the effects would be anti-dilutive:

	Three Months Ended
	March 31, 2013
Options to purchase shares of common stock and restricted stock awards	3,735
Stock appreciation rights	5,151
Total	8,886

Number of equity awards that are contingently issuable

The following table sets forth (in thousands) the number of equity awards that are contingently issuable which were not included in the calculation of diluted shares (for periods where the Company had net income) as the required performance conditions had not been met as of March 31, 2013:

	Three Months Ended
	March 31, 2013
Options to purchase shares of common stock and restricted stock awards	716

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Stockholders' Equity and Non-controlling Interests (Details) (USD $) Share data in Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Class of Stock [Line Items]
Value of shares authorized to be repurchased	$ 150,000,000
Stock repurchase program, remaining authorized repurchase amount	100,000,000
Increase (Decrease) in Equity [Roll Forward]
Total DreamWorks Animation SKG, Inc. stockholders’ equity, beginning of period	1,404,795,000	1,345,616,000
Non-controlling interests, beginning of period	1,224,000	630,000
Total equity, beginning of period	1,406,019,000	1,346,246,000
Proceeds from stock option exercises	261,000
Stock-based compensation	9,068,000	8,404,000
Purchase of treasury shares	(1,246,000)	(16,534,000)
Foreign currency translation adjustments	132,000	(2,492,000)
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	(42,936,000)	5,577,000
Less: Net income attributable to non-controlling interests	520,000	537,000
Net (loss) income	(42,416,000)	6,114,000
Total DreamWorks Animation SKG, Inc. stockholders’ equity, end of period	1,370,074,000	1,340,571,000
Non-controlling interests, end of period	1,744,000	1,167,000
Total equity	1,371,818,000	1,341,738,000
Common Class A [Member]
Class of Stock [Line Items]
Stock repurchased during period, shares		0.8
Stock repurchased during period, value		$ 16,200,000

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Investments in Unconsolidated Entities Basis Difference In Equity Investment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Schedule of Equity Method Investments [Line Items]
Total investment recorded	$ 20,277		$ 19,529
ODW Holding Limited [Member]
Schedule of Equity Method Investments [Line Items]
Company's venture-level equity	44,445
Total investment recorded	15,856		16,389
ODW Holding Limited [Member] | Technology and Intellectual Property Licenses [Member]
Schedule of Equity Method Investments [Line Items]
Basis differences	(19,150)	[1]
ODW Holding Limited [Member] | Other [Member]
Schedule of Equity Method Investments [Line Items]
Basis differences	$ (9,439)	[2]

[1] Represents differences between the Company's historical cost basis and the equity basis reflected at the venture-level (the amount recorded on the balance sheet of ODW) related to the Company's contributions of technology and intellectual property licenses. These basis differences arise because the contributed assets are recorded at fair value by ODW.

[2] Represents the Company's net contribution commitment due to ODW.

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Stock-Based Compensation - Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based compensation, allocation of recognized period costs, capitalized amount	$ 3.7	$ 4.3
Stock-based compensation, nonvested awards, total compensation cost not yet recognized	$ 78.5
Stock-based compensation, nonvested awards, total compensation cost not yet recognized, period of recognition (in years)	1 year 10 months 24 days

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Investments in Unconsolidated Entities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Apr. 03, 2013
Schedule of Cost and Equity Method Investments [Line Items]
Total equity method investments	$ 20,277	$ 19,529
Total cost method investments	24,013	19,013
Investments in unconsolidated entities	44,290	38,542
ODW Holding Limited [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Equity method investment, ownership percentage	45.45%		45.45%
Total equity method investments	15,856	16,389
All Other [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Total equity method investments	$ 4,421	$ 3,140
All Other [Member] | Maximum [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Equity method investment, ownership percentage	50.00%
All Other [Member] | Minimum [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Equity method investment, ownership percentage	30.00%

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Deferred Revenue and Other Advances (Tables)

3 Months Ended

Mar. 31, 2014

Deferred Revenue Disclosure [Abstract]

Summary of deferred revenue and other advances included in the consolidated balance sheets

The following is a summary of deferred revenue and other advances included in the consolidated balance sheets as of March 31, 2014 and December 31, 2013 and the related amounts earned and recorded either as revenue in the consolidated statements of operations or recorded as an offset to other costs (as described below) for the three-month periods ended March 31, 2014 and 2013 (in thousands):

					Amounts Earned
					Three Months Ended
	March 31,		December 31,		March 31,
	2014		2013		2014		2013
Deferred Revenue	$	11,632	$	14,578	$	7,637	$	7,721
Strategic Alliance/Development Advances(1)	962		1,667		7,138		9,074
Other(2)	16,537		20,180		19,897		4,763
Total deferred revenue and other advances	$	29,131	$	36,425

  ____________________

⁽¹⁾  Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2014 and 2013, $2.4 million and $5.2 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.0 million and $0.5 million, respectively, were recorded as a reduction to other assets, respectively. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $0.5 million and $0.9 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.1 million and $0.4 million, respectively, were recorded as a reduction to operating expenses.

⁽²⁾  Of the total amounts earned, for the three months ended March 31, 2014, $14.0 million was recorded as a reduction to film and other inventory costs.

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Stock-Based Compensation - Number and Weighted Average Grant Date Fair Value of Equity Awards Granted (Details) (Restricted Stock Units (RSUs) [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Restricted Stock Units (RSUs) [Member]
Number of shares granted	224	261
Weighted average grant date fair value (in dollars per share)	$ 29.91	$ 16.87

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Restructuring Charges

3 Months Ended

Mar. 31, 2014

Restructuring and Related Activities [Abstract]

Restructuring Charges

Restructuring Charges

During the three months ended December 31, 2012, the Company made a strategic business decision to change the production and release slates for some of its animated feature films. In connection with this decision, the Company committed to a restructuring plan to align its production and operating infrastructure. During the three months ended March 31, 2013, the Company implemented a restructuring plan to lower the cost structure, which resulted in a commitment to further reduce its workforce. As a result, the Company incurred additional restructuring charges attributable to employee-related costs (primarily related to severance and benefits) totaling $2.5 million for 47 employees for the three months ended March 31, 2013.Restructuring charges were not material for the three months ended March 31, 2014. These charges were recorded in costs of revenues and selling, general and administrative expenses in the Company's consolidated statements of operations. Payments made during the three months ended March 31, 2014 totaled$1.0 million related to these restructuring plans. As of March 31, 2014 and December 31, 2013, $0.7 million and $1.7 million, respectively, remained accrued as a liability. The Company expects to complete its restructuring plans by June 30, 2014. The Company's restructuring plans are primarily attributable to its Feature Films reportable segment.

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Accrued Liabilities (Details) (USD $)	Mar. 31, 2014		Dec. 31, 2013
Payables and Accruals [Abstract]
Employee compensation	$ 22,805,000		$ 65,625,000
Participations and residuals	48,799,000		50,690,000
Contingent consideration	100,051,000	[1]	97,545,000	[1]
Interest payable	2,635,000		7,849,000
Deferred rent	8,553,000		8,114,000
Other accrued liabilities	32,018,000		33,845,000
Total accrued liabilities	214,861,000		263,668,000
Accrued participation and residual costs estimated to pay over the next 12 months	$ 23,100,000

[1] Primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 3 for further information).

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Acquisitions Consideration Transferred (Details) (AwesomenessTV, Inc. [Member], USD $) In Thousands, unless otherwise specified	0 Months Ended
	May 03, 2013		Mar. 31, 2014	Dec. 31, 2013
AwesomenessTV, Inc. [Member]
Business Acquisition, Contingent Consideration [Line Items]
Cash payment	$ 33,460
Estimated contingent consideration	95,000		99,000	96,500
Total consideration	$ 128,460	[1]

[1] Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million.

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of impact of stock options and restricted stock awards on net income

The impact of stock options (including stock appreciation rights) and restricted stock awards on net income (excluding amounts capitalized) for the three-month periods ended March 31, 2014 and 2013, respectively, was as follows (in thousands):

	Three Months Ended
	March 31,
	2014			2013
Total stock-based compensation	$	5,309		$	4,075
Tax impact(1)	(1,885		)	(628		)
Reduction in net income, net of tax	$	3,424		$	3,447

 ____________________

⁽¹⁾  Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item "Decrease/increase in income tax benefit payable to former stockholder" (see Note 11).

Schedule of number and weighted average grant date fair value of equity awards granted

The following table sets forth the number and weighted average grant-date fair value of equity awards granted during the three-month periods ended March 31, 2014 and 2013:

	Three Months Ended
	March 31,
	Number Granted	Weighted Average Grant-Date Fair Value
	(in thousands)
2014
Restricted stock and restricted stock units	224	$	29.91
2013
Restricted stock and restricted stock units	261	$	16.87

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Financing Arrangements (Details) (USD $)	3 Months Ended			3 Months Ended			0 Months Ended	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014 Revolving Credit Facility [Member]	Mar. 31, 2013 Revolving Credit Facility [Member]	Dec. 31, 2013 Revolving Credit Facility [Member]	Aug. 14, 2013 Senior Unsecured Notes [Member]	Mar. 31, 2014 Senior Unsecured Notes [Member]	Dec. 31, 2013 Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount							$ 300,000,000.0
Senior unsecured notes	300,000,000		300,000,000					300,000,000	300,000,000
Stated interest rate of debt							6.875%	6.875%
Debt sold to investors, percentage of principle amount sold							100.00%
Proceeds from issuance of long-term debt							294,000,000
Redemption price of principle amount due to change in control, percentage								101.00%
Debt Instrument, Percent Redeemable, Certain Equity Offerings								35.00%
Percentage of redeemable principal amount by Company								106.875%
Line of credit facility, maximum borrowing capacity				400,000,000.0
Annual commitment fee on undrawn amounts of revolving credit facility				0.375%
Commitment fee percentage, rate spread over bank base rate				1.50%
Commitment fee percentage, rate spread over LIBOR				2.50%
Maturity date								Aug. 15, 2020
Revolving credit facility, amount outstanding				0		0
Expiration date of revolving credit facility				Aug. 01, 2017
Interest expense				375,000	220,000			2,234,000
Interest costs incurred	6,100,000	1,600,000
Interest costs capitalized	$ 3,200,000	$ 1,400,000

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Concentrations of Credit Risk (Details)	3 Months Ended	12 Months Ended	3 Months Ended
	Mar. 31, 2014 Accounts Receivable [Member] Netflix [Member] Credit Concentration Risk [Member]	Dec. 31, 2013 Accounts Receivable [Member] Netflix [Member] Credit Concentration Risk [Member]	Mar. 31, 2014 Fox [Member] Sales Revenue, Goods, Net [Member]	Mar. 31, 2014 Paramount [Member] Sales Revenue, Goods, Net [Member]	Mar. 31, 2013 Paramount [Member] Sales Revenue, Goods, Net [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	62.00%	49.00%	14.00%	28.00%	55.00%

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Investments in Unconsolidated Entities Loss From Equity Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Schedule of Income (Loss) From Equity Method Investments [Line Items]
Loss from equity method investees	$ 3,260		$ 0
ODW Holding Limited [Member]
Schedule of Income (Loss) From Equity Method Investments [Line Items]
Loss from equity method investees	2,210	[1]
All Other [Member]
Schedule of Income (Loss) From Equity Method Investments [Line Items]
Loss from equity method investees	$ 1,050

[1] The Company currently records its share of ODW results on a one-month lag. Accordingly, the Company's consolidated financial statements include its share of losses incurred by ODW from December 1, 2013 to February 28, 2014.

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Acquisitions

3 Months Ended

Mar. 31, 2014

Business Combinations [Abstract]

Acquisitions

Acquisitions

AwesomenessTV

On May 1, 2013, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which, on May 3, 2013 (the "ATV Closing Date"), a wholly-owned subsidiary of the Company ("the Merger Sub") merged with and into ATV. As a result of this transaction, ATV became a wholly-owned subsidiary of the Company. ATV is an online next-generation media production company that generates revenues primarily from online advertising sales and distribution of content through media channels such as theatrical, home entertainment and television. Through ATV's multi-channel network presence on the Internet, the Company will be able to gain access to new content distribution methods, as well as a broader audience. The goodwill acquired represents the potential synergies between ATV's filmed content, character portfolio and the Company's cross-platform expansion plans. The goodwill is allocated to a reporting unit that is currently not part of a separately reportable segment.

The Company's total consideration for this transaction totaled $128.5 million, including an accrual for estimated contingent consideration of $95.0 million. The following table outlines the components of consideration for the transaction (in thousands):

	As of
	May 3, 2013
Cash payment	$	33,460
Estimated contingent consideration	95,000
Total consideration	$	128,460

The following table summarizes the preliminary allocation of the purchase price (in thousands):

	As of
	May 3, 2013(1)
Cash and cash equivalents	$	1,340
Trade receivables(2)	1,279
Prepaid and other assets	434
Production costs	612
Property, plant and equipment	183
Intangible assets	12,900
Total identified assets acquired	16,748
Accounts payable	655
Deferred revenue	2,057
Deferred tax liabilities, net	3,765
Total liabilities assumed	6,477
Net identified assets acquired	10,271
Goodwill(3)	118,189
Total consideration	$	128,460

____________________

⁽¹⁾ Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million.

⁽²⁾ Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible.

⁽³⁾  The goodwill resulting from the acquisition of ATV is not deductible for tax purposes.

Contingent Consideration

Pursuant to the Merger Agreement, the Company may be required to make future cash payments to ATV's former shareholders as part of the total purchase price to acquire ATV. The contingent consideration is based on whether ATV increases its adjusted earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") over an adjusted EBITDA threshold, over a two-year period (which commenced on January 1, 2014). Adjustments to EBITDA for purposes of determining the contingent consideration earned include, but are not limited to: ATV's employee bonus plan, non-cash gains and losses (such as those related to foreign currency accounting and reversals of prior year accruals) and changes in the fair value of contingent payment liabilities resulting from the acquisition of ATV. The Company estimates the fair value of contingent consideration usingsignificant unobservable inputs in a Monte-Carlo simulation model and bases the fair value on the estimated risk-adjusted cost of capital of ATV's adjusted EBITDA following integration into the Company (an income approach). The estimate of the liability may fluctuate if there are changes in the forecast of ATV's future earnings or as a result of actual earnings levels achieved. Any changes in estimate of the contingent consideration liability will be reflected in the Company's results of operations in the period that the change occurs and classified in selling, general and administrative expenses.

The estimated fair value of the contingent consideration arrangement at the acquisition date was $95.0 million. The key assumptions in applying the income approach were as follows: an 8.5% discount rate, volatility of 32.6% and a probability-adjusted earnings measure for ATV of $25.0 million for 2014 and $41.0 million for 2015. Changes in one or more of the key assumptions could lead to a different fair value estimate of the contingent consideration. For example, using a discount rate of 15.0% or a volatility rate of 20.0% would change the estimated fair value of the contingent consideration to $90.5 million and $103.5 million, respectively. Under the Merger Agreement, the maximum contingent consideration that may be earned is $117.0 million. The estimate of contingent consideration liability increased from $96.5 million as of December 31, 2013 to $99.0 million as of March 31, 2014, primarily due tothe passage of time, changes in the forecast of cash flows and changes in the Company's credit risk adjusted rate used to discount obligations to present value. As of March 31, 2014, the discount rate and volatility applied were 18.0% and 35.9%, respectively. Using a discount rate of 15% or a volatility of 20% would change the estimated fair value of the contingent consideration to $100.0 million and $107.0 million, respectively. The change in estimate was recorded in selling, general and administrative expenses in the consolidated statements of operations.

Pro Forma Financial Information

The following table presents (in thousands, except per share data) pro forma results of the Company as though ATV had been acquired as of January 1, 2012 (the beginning of the prior annual reporting period based on the period in which the acquisition occurred).

	Three Months Ended
	March 31, 2013
Revenues	$	134,886
Net income attributable to DreamWorks Animation SKG, Inc.	$	3,662
Basic net income per share	$	0.04
Diluted net income per share	$	0.04

These pro forma results do not necessarily represent what would have occurred if the ATV transaction had taken place on January 1, 2012, nor do they represent the results that may occur in the future. The pro forma amounts include the historical operating results of the Company and ATV prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include a decrease to tax expense assuming ATV was part of the Company in the amount of $0.5 million for the three months ended March 31, 2013. The pro forma results also include an increase to amortization expense related to the fair value of the intangible assets acquired of $2.9 millionfor the three months ended March 31, 2013.

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Earnings Per Share Data - Computation of Basic and Diluted Net Income Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Earnings Per Share, Basic and Diluted [Line Items]
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	$ (42,936)	$ 5,577
Weighted average common shares outstanding (in shares)	84,588	84,781
Less: Unvested restricted stock (in shares)	(104)	(110)
Denominator for basic calculation (in shares)	84,484	84,671
Denominator for diluted calculation (in shares)	84,484	85,265
Net (loss) income per share—basic (in dollars per share)	$ (0.51)	$ 0.07
Net (loss) income per share—diluted (in dollars per share)	$ (0.51)	$ 0.07
Restricted Stock Awards and Units [Member]
Earnings Per Share, Basic and Diluted [Line Items]
Dilutive stock-based awards (in shares)	0	594

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Acquisitions Pro Forma Information (Details) (AwesomenessTV, Inc. [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
AwesomenessTV, Inc. [Member]
Business Acquisition [Line Items]
Revenues	$ 134,886
Net income attributable to DreamWorks Animation SKG, Inc.	$ 3,662
Basic net income per share	$ 0.04
Diluted net income per share	$ 0.04

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Film and Other Inventory Costs (Tables)

3 Months Ended

Mar. 31, 2014

Film Costs [Abstract]

Film, television, live performance and other inventory costs

Film, television, live performance and other inventory costs consist of the following (in thousands):

	March 31, 2014		December 31, 2013
In release, net of amortization:
Feature films	$	312,861	$	285,238
Television series and specials	62,217		58,631
In production:
Feature films	396,407		474,609
Television series and specials	28,260		15,332
In development:
Feature films	97,922		75,498
Television series and specials	456		1,500
Product inventory and other(1)	16,511		32,678
Total film, television, live performance and other inventory costs, net	$	914,634	$	943,486

 ____________________

⁽¹⁾  This category includes $8.6 million and $24.8 million of capitalized live performance costs as of March 31, 2014 and December 31, 2013, respectively. In addition, as of March 31, 2014 and December 31, 2013, this category includes $7.9 million of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market.

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Acquisitions (Tables) (AwesomenessTV, Inc. [Member])

3 Months Ended

Mar. 31, 2014

AwesomenessTV, Inc. [Member]

Business Acquisition [Line Items]

Schedule of total consideration for business combination

The following table outlines the components of consideration for the transaction (in thousands):

	As of
	May 3, 2013
Cash payment	$	33,460
Estimated contingent consideration	95,000
Total consideration	$	128,460

Schedule of purchase price allocation

The following table summarizes the preliminary allocation of the purchase price (in thousands):

	As of
	May 3, 2013(1)
Cash and cash equivalents	$	1,340
Trade receivables(2)	1,279
Prepaid and other assets	434
Production costs	612
Property, plant and equipment	183
Intangible assets	12,900
Total identified assets acquired	16,748
Accounts payable	655
Deferred revenue	2,057
Deferred tax liabilities, net	3,765
Total liabilities assumed	6,477
Net identified assets acquired	10,271
Goodwill(3)	118,189
Total consideration	$	128,460

____________________

⁽¹⁾ Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million.

⁽²⁾ Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible.

⁽³⁾  The goodwill resulting from the acquisition of ATV is not deductible for tax purposes.

Business acquisition, pro forma information

The following table presents (in thousands, except per share data) pro forma results of the Company as though ATV had been acquired as of January 1, 2012 (the beginning of the prior annual reporting period based on the period in which the acquisition occurred).

	Three Months Ended
	March 31, 2013
Revenues	$	134,886
Net income attributable to DreamWorks Animation SKG, Inc.	$	3,662
Basic net income per share	$	0.04
Diluted net income per share	$	0.04

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Stock-Based Compensation - Impact of Stock Options and Restricted Stock Awards on Net Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Total stock-based compensation	$ 5,309		$ 4,075
Tax impact	(1,885)	[1]	(628)	[1]
Reduction in net income, net of tax	$ 3,424		$ 3,447

[1] Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item "Decrease/increase in income tax benefit payable to former stockholder" (see Note 11).

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Film and Other Inventory Costs (Details) (USD $)	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013	Dec. 31, 2013
Film Costs [Line Items]
In release, net of amortization, feature films	$ 312,861,000			$ 285,238,000
In release, net of amortization, television series and specials	62,217,000			58,631,000
In production, feature films	396,407,000			474,609,000
In production, television series and specials	28,260,000			15,332,000
In development, feature films	97,922,000			75,498,000
In development, television series and specials	456,000			1,500,000
Product inventory and other	16,511,000	[1]		32,678,000	[1]
Total film, television, live performance and other inventory costs, net	914,634,000			943,486,000
Capitalized live performance costs	8,600,000			24,800,000
Release costs expected to be amortized over the next 12 months	39.00%
Release costs expected to be amortized over three years	77.00%
Estimated remaining cash flow period	15 years
Impairment charge of film costs	57,100,000		0
DreamWorks Animation and Classic Media [Member]
Film Costs [Line Items]
Physical inventory	7,900,000			7,900,000
Impaired Film and Other Inventory Assets [Member]
Film Costs [Line Items]
Discount rate used in fair value measurement	7.00%
Reported Value Measurement [Member] | Impaired Film and Other Inventory Assets [Member]
Film Costs [Line Items]
Total film, television, live performance and other inventory costs, net	86,000,000
Sensitivity, Potential Change [Member]
Film Costs [Line Items]
Discount rate used in fair value measurement	5.00%
Film and other inventory costs, fair value change	7,800,000
Film and other inventory, estimated reduction in future revenue, percentage	10.00%
Sensitivity, Potential Change [Member] | Minimum [Member]
Film Costs [Line Items]
Impairment charge of film costs	5,000,000
Sensitivity, Potential Change [Member] | Maximum [Member]
Film Costs [Line Items]
Impairment charge of film costs	$ 10,000,000

[1] This category includes $8.6 million and $24.8 million of capitalized live performance costs as of March 31, 2014 and December 31, 2013, respectively. In addition, as of March 31, 2014 and December 31, 2013, this category includes $7.9 million of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market.

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of definite-lived assets

In addition, intangible assets were comprised of definite-lived intangible assets as follows (in thousands, unless otherwise noted):

	Weighted Average Estimated Useful Life (in years)	Gross		Accumulated Amortization			Impact of Foreign Currency Translation		Net
As of March 31, 2014:
Character rights	13.9	$	99,000	$	(10,322	)	$	1,999	$	90,677
Programming content	2.0	11,200		(5,133		)	—		6,067
Trademarks and trade names	10.0	1,200		(110		)	—		1,090
Other intangibles	2.0	500		(229		)	—		271
Total		$	111,900	$	(15,794	)	$	1,999	$	98,105
As of December 31, 2013:
Character rights	13.9	$	99,000	$	(8,663	)	$	1,754	$	92,091
Programming content	2.0	11,200		(3,733		)	—		7,467
Trademarks and trade names	10.0	1,200		(80		)	—		1,120
Other intangibles	2.0	500		(167		)	—		333
Total		$	111,900	$	(12,643	)	$	1,754	$	101,011

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Investments in Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2014

Investments in Unconsolidated Entities [Abstract]

Schedule of cost and equity method investments

These investments are classified as investments in unconsolidated entities in the consolidated balance sheets and consist of the following (in thousands, unless otherwise indicated):

	Ownership
	Percentage at	March 31,		December 31,
	March 31, 2014	2014		2013
Oriental DreamWorks Holding Limited	45.45%	$	15,856	$	16,389
All Other	30%-50%	4,421		3,140
Total equity method investments		20,277		19,529
Total cost method investments		24,013		19,013
Total investments in unconsolidated entities		$	44,290	$	38,542

Schedule of losses from equity method investments

Loss from equity method investees consist of the following (in thousands):

	Three Months Ended
	March 31, 2014
Oriental DreamWorks Holding Limited(1)	$	2,210
All Other	1,050
Loss from equity method investees	$	3,260

____________________

⁽¹⁾   The Company currently records its share of ODW results on a one-month lag. Accordingly, the Company's consolidated financial statements include its share of losses incurred by ODW from December 1, 2013 to February 28, 2014.

Schedule of differences in venture-level equity and investment in unconsolidated entity

The following are the differences between the Company's venture-level equity and the balance of its investment in ODW (in thousands):

	March 31, 2014
Company's venture-level equity	$	44,445
Technology and intellectual property licenses(1)	(19,150		)
Other(2)	(9,439		)
Total ODW investment recorded	$	15,856

____________________

⁽¹⁾ Represents differences between the Company's historical cost basis and the equity basis reflected at the venture-level (the amount recorded on the balance sheet of ODW) related to the Company's contributions of technology and intellectual property licenses. These basis differences arise because the contributed assets are recorded at fair value by ODW.

⁽²⁾  Represents the Company's net contribution commitment due to ODW.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In July 2013, the FASB issued an accounting standard update relating to the presentation of unrecognized tax benefits. The accounting update requires companies to present a deferred tax asset net of related unrecognized tax benefits if there is a net operating loss or other tax carryforwards that would apply in settlement of the uncertain tax position. To the extent that an uncertain tax position would not be settled through a reduction of a net operating loss or other tax carryforwards, the unrecognized tax benefit will be presented as a liability. The guidance is effective for the Company's fiscal year beginning January 1, 2014, with early adoption permitted. The Company adopted the new guidance effective January 1, 2014. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

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Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2014

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2014		December 31, 2013
Employee compensation	$	22,805	$	65,625
Participations and residuals	48,799		50,690
Contingent consideration(1)	100,051		97,545
Interest payable	2,635		7,849
Deferred rent	8,553		8,114
Other accrued liabilities	32,018		33,845
Total accrued liabilities	$	214,861	$	263,668

  ____________________

⁽¹⁾  Primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 3 for further information).

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Business and Basis of Presentation (Details) (Distribution Arrangement [Member])	3 Months Ended
	Mar. 31, 2014
Paramount [Member]
Business and Basis Of Presentation [Line Items]
Distribution arrangement, exploitation period	16 years
Fox [Member]
Business and Basis Of Presentation [Line Items]
Distribution arrangement, output term	5 years
Period after U.S. home video release that output term will terminate	1 year

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Income Taxes (Details)	0 Months Ended	3 Months Ended
	Jan. 02, 2013	Mar. 31, 2014		Mar. 31, 2013
Income Tax Benefit Payable To Former Stockholder [Line Items]
U.S. Federal statutory rate		35.00%	[1]	35.00%	[1]
Effective tax rate		34.10%	[1]	5.80%	[1]
Percentage the company is obligated to remit to an affiliate of the former significant stockholder		85.00%
Extension of research and development credits and other federal tax incentives, period	2 years
Portion Including Payable to Former Stockholder [Member]
Income Tax Benefit Payable To Former Stockholder [Line Items]
U.S. state taxes, net of Federal benefit		1.60%	[1]	(2.70%)	[1]
Export sales exclusion/manufacturer's deduction		1.20%	[1],[2]	7.30%	[1],[2]
Research and development credit		0.00%	[1],[2]	(25.40%)	[1],[2]
Federal energy tax credit		0.00%	[1],[3]	(2.50%)	[1],[3]
Executive compensation		(0.30%)	[1]	3.20%	[1]
Stock-based compensation		0.00%	[1]	1.30%	[1]
Other		(2.00%)	[1]	(0.80%)	[1]
Effective tax rate combined with decrease/increase in income tax benefit payable to former stockholder		35.50%	[1]	15.40%	[1]
Portion Payable to Former Stockholder [Member]
Income Tax Benefit Payable To Former Stockholder [Line Items]
Export sales exclusion/manufacturer's deduction		(1.10%)	[1],[2]	(7.60%)	[1],[2]
Imputed interest on payable to former stockholder		0.10%	[1]	(1.80%)	[1]
Other		(0.40%)	[1]	(0.20%)	[1]
Total change in income tax benefit payable to former stockholder		(1.40%)	[1]	(9.60%)	[1]

[1] As a result of a partial increase in the tax basis of the Company's tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of the Company's 2004 initial public offering, the Company may pay reduced tax amounts to the extent it generates sufficient taxable income in the future. The Company is obligated to remit to an affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax and California franchise tax and certain other related tax benefits. Refer to the Company's 2013 Form 10-K for a more detailed description.

[2] The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment).

[3] The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated.

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Assets
Cash and cash equivalents	$ 69,648	$ 95,467
Trade accounts receivable, net of allowance for doubtful accounts (see Note 7 for related party amounts)	148,922	130,744
Receivables from distributors, net of allowance for doubtful accounts (see Note 7 for related party amounts)	203,934	283,226
Film and other inventory costs, net	914,634	943,486
Prepaid expenses	20,236	20,555
Other assets	28,505	23,385
Investments in unconsolidated entities	44,290	38,542
Property, plant and equipment, net of accumulated depreciation and amortization	183,152	186,670
Deferred taxes, net	244,664	221,920
Intangible assets, net of accumulated amortization	147,605	150,511
Goodwill	179,294	179,722
Total assets	2,184,884	2,274,228
Liabilities:
Accounts payable	5,684	5,807
Accrued liabilities	214,861	263,668
Payable to former stockholder	263,390	262,309
Deferred revenue and other advances	29,131	36,425
Senior unsecured notes	300,000	300,000
Total liabilities	813,066	868,209
Commitments and contingencies (Note 17)
DreamWorks Animation SKG, Inc. Stockholders' Equity:
Additional paid-in capital	1,109,461	1,100,101
Accumulated other comprehensive loss	(468)	(600)
Retained earnings	1,029,462	1,072,398
Less: Class A Treasury common stock, at cost, 27,482,030 and 27,439,119 shares, as of March 31, 2014 and December 31, 2013, respectively	(769,502)	(768,224)
Total DreamWorks Animation SKG, Inc. stockholders' equity	1,370,074	1,404,795
Non-controlling interests	1,744	1,224
Total equity	1,371,818	1,406,019
Total liabilities and equity	2,184,884	2,274,228
Common Class A [Member]
DreamWorks Animation SKG, Inc. Stockholders' Equity:
Common stock	1,043	1,042
Common Class B [Member]
DreamWorks Animation SKG, Inc. Stockholders' Equity:
Common stock	$ 78	$ 78

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Intangible Assets (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	$ 49,500,000	$ 49,500,000
Finite-Lived Intangible Assets, Net [Abstract]
Gross	111,900,000	111,900,000
Accumulated amortization	(15,794,000)	(12,643,000)
Impact of foreign currency translation	1,999,000	1,754,000
Net	98,105,000	101,011,000
Character Rights [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Weighted average estimated useful life	13 years 10 months 24 days	13 years 10 months 24 days
Gross	99,000,000	99,000,000
Accumulated amortization	(10,322,000)	(8,663,000)
Impact of foreign currency translation	1,999,000	1,754,000
Net	90,677,000	92,091,000
Programming Content [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Weighted average estimated useful life	2 years	2 years
Gross	11,200,000	11,200,000
Accumulated amortization	(5,133,000)	(3,733,000)
Impact of foreign currency translation	0	0
Net	6,067,000	7,467,000
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Weighted average estimated useful life	10 years	10 years
Gross	1,200,000	1,200,000
Accumulated amortization	(110,000)	(80,000)
Impact of foreign currency translation	0	0
Net	1,090,000	1,120,000
Other Intangibles [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Weighted average estimated useful life	2 years	2 years
Gross	500,000	500,000
Accumulated amortization	(229,000)	(167,000)
Impact of foreign currency translation	0	0
Net	$ 271,000	$ 333,000

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Operating activities
Net (loss) income	$ (42,416)		$ 6,114
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Amortization and write-off of film and other inventory costs	145,412	[1]	60,042	[1]
Amortization of intangible assets	3,154		1,686
Stock-based compensation expense	5,309		4,075
Amortization of deferred financing costs	242		0
Depreciation and amortization	1,081		983
Revenue earned against deferred revenue and other advances	(16,188)		(11,153)
Income related to investment contributions	(1,672)		0
Loss from equity method investees	3,260		0
Deferred taxes, net	(22,314)		231
Changes in operating assets and liabilities:
Trade accounts receivable	(19,091)		4,119
Receivables from distributors	79,267		52,231
Film and other inventory costs	(122,837)		(109,346)
Intangible assets	0		1,015
Prepaid expenses and other assets	(4,870)		(6,367)
Accounts payable and accrued liabilities	(48,594)		6,590
Payable to former stockholder	1,080		(25,700)
Income taxes payable/receivable, net	(658)		2,521
Deferred revenue and other advances	27,348		54,641
Net cash (used in) provided by operating activities	(12,487)		41,682
Investing activities
Investments in unconsolidated entities	(7,000)		(500)
Purchases of property, plant and equipment	(5,711)		(8,088)
Net cash used in investing activities	(12,711)		(8,588)
Financing activities
Proceeds from stock option exercises	261		0
Purchase of treasury stock	(1,278)		(16,552)
Net cash used in financing activities	(1,017)		(16,552)
Effect of exchange rate changes on cash and cash equivalents	396		447
(Decrease) increase in cash and cash equivalents	(25,819)		16,989
Cash and cash equivalents at beginning of period	95,467		59,246
Cash and cash equivalents at end of period	69,648		76,235
Non-cash investing activities:
Intellectual property and technology licenses granted in exchange for equity interest	1,294		0
Services provided in exchange for equity interest	383		0
Total non-cash investing activities	1,677		0
Supplemental disclosure of cash flow information:
Cash paid (refunded) during the period for income taxes, net	503		(2,278)
Cash paid during the period for interest, net of amounts capitalized	7,515		217
Depreciation and amortization, interest expense and stock-based compensation previously capitalized	$ 8,821		$ 5,603

[1] Included within this amount is depreciation and amortization, interest expense and stock-based compensation previously capitalized to "Film and other inventory costs" (see Note 1). During the three months ended March 31, 2014 and 2013, these amounts totaled $8,821 and $5,603, respectively.

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Reportable Segments Schedule of goodwill by segment (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Goodwill [Roll Forward]
Goodwill, beginning of period	$ 179,722
Measurement period adjustments related to the acquisition of ATV	(428)
Goodwill, end of period	179,294
Feature Films [Member]
Goodwill [Roll Forward]
Goodwill, beginning of period	43,995
Measurement period adjustments related to the acquisition of ATV	0
Goodwill, end of period	43,995
Television Series and Specials [Member]
Goodwill [Roll Forward]
Goodwill, beginning of period	6,111
Measurement period adjustments related to the acquisition of ATV	0
Goodwill, end of period	6,111
Consumer Products [Member]
Goodwill [Roll Forward]
Goodwill, beginning of period	10,999
Measurement period adjustments related to the acquisition of ATV	0
Goodwill, end of period	10,999
All Other [Member]
Goodwill [Roll Forward]
Goodwill, beginning of period	118,617
Measurement period adjustments related to the acquisition of ATV	(428)
Goodwill, end of period	$ 118,189

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Income Taxes (Tables)

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Schedule of effective income tax rate reconciliation

Set forth below is a reconciliation of the components that caused the Company's benefit/provision for income taxes (including the income statement line item "Decrease (increase) in income tax benefit payable to former stockholder") to differ from amounts computed by applying the U.S. Federal statutory rate of 35% for the three months ended March 31, 2014 and 2013.

	Three Months Ended
	March 31,
	2014		2013
Provision for income taxes (combined with decrease/increase in income tax benefit payable to former stockholder)(1)
U.S. Federal statutory rate	35.0	%	35.0	%
U.S. state taxes, net of Federal benefit	1.6		(2.7	)
Export sales exclusion/manufacturer's deduction(2)	1.2		7.3
Research and development credit(2)	—		(25.4	)
Federal energy tax credit(3)	—		(2.5	)
Executive compensation	(0.3	)	3.2
Stock-based compensation	—		1.3
Other	(2.0	)	(0.8	)
Effective tax rate (combined with decrease/increase in income tax benefit payable to former stockholder)(1)	35.5	%	15.4	%
Less: change in income tax benefit payable to former stockholder(1):
Export sales exclusion/manufacturer's deduction(2)	(1.1	)	(7.6	)
Imputed interest on payable to former stockholder	0.1		(1.8	)
Other	(0.4	)	(0.2	)
Total change in income tax benefit payable to former stockholder(1)	(1.4	)%	(9.6	)%
Effective tax rate	34.1	%	5.8	%

____________________

⁽¹⁾  As a result of a partial increase in the tax basis of the Company's tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of the Company's 2004 initial public offering, the Company may pay reduced tax amounts to the extent it generates sufficient taxable income in the future. The Company is obligated to remit to an affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax and California franchise tax and certain other related tax benefits. Refer to the Company's 2013 Form 10-K for a more detailed description.

⁽²⁾  The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment).

⁽³⁾  The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated.

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Restructuring Charges (Details) (USD $) In Millions, unless otherwise specified			3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Employee Severance [Member]	Mar. 31, 2013 Employee Severance [Member] employee
Restructuring Cost and Reserve [Line Items]
Restructuring charges				$ 2.5
Restructuring charges, employees affected				47
Payments made for restructuring charges			1.0
Restructuring reserve, remaining accrual	$ 0.7	$ 1.7

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Concentrations of Credit Risk

3 Months Ended

Mar. 31, 2014

Risks and Uncertainties [Abstract]

Concentrations of Credit Risk

Concentrations of Credit Risk

A substantial portion of the Company's revenue is derived directly from the Company's third-party distributors, Paramount and Fox. Paramount represented approximately 28% and 55% of total revenue for the three-month periods ended March 31, 2014 and 2013, respectively. Fox represented approximately 14% of total revenue for the three-month periods ended March 31, 2014.

As of March 31, 2014 and December 31, 2013, approximately 62% and 49%, respectively, of the Company's trade accounts receivable balance consisted of long-term receivables related to licensing arrangements with Netflix, Inc.

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Stockholders' Equity and Non-controlling Interests (Tables)

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Schedule of stockholders equity and non-controlling interest

The following table presents the changes in equity for the three-month periods ended March 31, 2014 and 2013 (in thousands):

	DreamWorks Animation SKG, Inc. Stockholders' Equity			Non-controlling Interests		Total Equity
Balance as of December 31, 2013	$	1,404,795		$	1,224	$	1,406,019
Proceeds from stock option exercises	261			—		261
Stock-based compensation	9,068			—		9,068
Purchase of treasury shares	(1,246		)	—		(1,246		)
Foreign currency translation adjustments	132			—		132
Net (loss) income	(42,936		)	520		(42,416		)
Balance as of March 31, 2014	$	1,370,074		$	1,744	$	1,371,818
Balance as of December 31, 2012	$	1,345,616		$	630	$	1,346,246
Stock-based compensation	8,404			—		8,404
Purchase of treasury shares	(16,534		)	—		(16,534		)
Foreign currency translation adjustments	(2,492		)	—		(2,492		)
Net income	5,577			537		6,114
Balance as of March 31, 2013	$	1,340,571		$	1,167	$	1,341,738

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Earnings Per Share Data

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share Data

Earnings Per Share Data

The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2014			2013
Numerator:
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	$	(42,936	)	$	5,577
Denominator:
Weighted average common shares and denominator for basic calculation:
Weighted average common shares outstanding	84,588			84,781
Less: Unvested restricted stock	(104		)	(110		)
Denominator for basic calculation	84,484			84,671
Weighted average effects of dilutive stock-based compensation awards:
Restricted stock awards	—			594
Denominator for diluted calculation	84,484			85,265
Net (loss) income per share—basic	$	(0.51	)	$	0.07
Net (loss) income per share—diluted	$	(0.51	)	$	0.07

The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, stock appreciation rights, restricted stock awards and equity awards subject to performance conditions which were not included in the calculation of diluted per share amounts (for periods where the Company had net income) because the effects would be anti-dilutive:

	Three Months Ended
	March 31, 2013
Options to purchase shares of common stock and restricted stock awards	3,735
Stock appreciation rights	5,151
Total	8,886

The following table sets forth (in thousands) the number of equity awards that are contingently issuable which were not included in the calculation of diluted shares (for periods where the Company had net income) as the required performance conditions had not been met as of March 31, 2013:

	Three Months Ended
	March 31, 2013
Options to purchase shares of common stock and restricted stock awards	716

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Business and Basis of Presentation

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

Business and Basis of Presentation

Business

The businesses of DreamWorks Animation SKG, Inc. ("DreamWorks Animation" or the "Company") is primarily devoted to the development, production and exploitation of animated films and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising and licensing and other markets. The Company continues to build upon the value of its intellectual property created from its animated films by creating high-quality entertainment through the development and production of non-theatrical content such as television series and specials and live performances based on characters from its feature films. In addition, the Company has an extensive library of other intellectual property rights through its acquisition of Classic Media, which can be exploited in various markets. The Company's activities also include technology initiatives as it explores opportunities to exploit its internally developed software.

Distribution and Servicing Arrangements

The Company derives revenue from Twentieth Century Fox Film Corporation's worldwide (excluding China and South Korea) exploitation of its films in the theatrical and post-theatrical markets. Pursuant to a binding term sheet (the "Fox Distribution Agreement") entered into with Twentieth Century Fox and Twentieth Century Fox Home Entertainment, LLC (collectively, "Fox"), the Company has agreed to license Fox certain exclusive distribution rights and exclusively engage Fox to render fulfillment services with respect to certain of the Company's animated feature films and other audiovisual programs during the five-year period beginning on January 1, 2013. The rights licensed to, and serviced by, Fox will terminate on the date that is one year after the initial home video release date in the United States ("U.S.") of the last film theatrically released by Fox during such five-year period.

Also beginning in 2013, the Company's films are distributed in China and South Korea territories by distinct distributors. The key terms of the Company's distribution arrangements with its Chinese and South Korean distributors are largely similar to those with Fox and Paramount such that the Company also recognizes revenues earned under these arrangements on a net basis. The Company's distribution partner in China is Oriental DreamWorks Holding Limited ("ODW"), which is a related party.

Lastly, the Company continues to derive revenues from the distribution in worldwide theatrical, home entertainment, digital and television markets by Paramount Pictures Corporation, a subsidiary of Viacom Inc., and its affiliates (collectively, "Paramount"), for films that were released on or before December 31, 2012, pursuant to a distribution agreement and a fulfillment services agreement (collectively, the "Paramount Agreements"). With respect to each film for which Paramount has rendered fulfillment services, Paramount generally has the right to continue rendering such services for 16 years from such film's initial general theatrical release.

The Company generally retains all other rights to exploit its films, including commercial tie-in and promotional rights with respect to each film, as well as merchandising, interactive, literary publishing, music publishing and soundtrack rights. The Company's activities associated with its Classic Media properties and AwesomenessTV, Inc. ("ATV") business are not subject to the Company's distribution agreements with its theatrical distributors.

Basis of Presentation

The accompanying unaudited financial data as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, certain information and footnote disclosures normally included in comprehensive financial statements have been condensed or omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2013 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Form 10-K"). Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the Company's 2014 presentation.

The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items, which in the opinion of management, are necessary for a fair statement for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full year, or for any future period, as fluctuations can occur based upon the timing of the Company's films' theatrical and home entertainment releases, and television series and specials broadcasts.

Consolidation

The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animationand its wholly-owned subsidiaries.The Company also consolidates less-than-wholly owned entities if the Company has a controlling financial interest in that entity.The Company uses the equity method of accounting for investments in companies in which it has a 50% or less ownership interest and has the ability to exercise significant influence. Such investments are presented as investments in unconsolidated entities on the Company's consolidated balance sheets (refer to Note 7 for further information of such investments). Prior to recording its share of net income or losses from equity method investees, investee financial statements are converted to U.S. GAAP. All significant intercompany accounts and transactions have been eliminated. Intra-entity profit related to transactions with equity method investees is eliminated until the amounts are ultimately realized.

In addition, the Company reviews its relationships with other entities to identify whether they are variable interest entities ("VIE") as defined by the Financial Accounting Standards Board ("FASB"), and to assess whether the Company is the primary beneficiary of such entity. If the determination is made that the Company is the primary beneficiary, then the entity is consolidated. As of March 31, 2014, the Company determined that it continued to have a variable interest in ODW as ODW does not have sufficient equity at risk (i.e., cash on hand to fund its operations) as a result of the timing of capital contributions to the entity in accordance with the Transaction and Contribution Agreement (see Note 7). However, the Company concluded that it is not the primary beneficiary of ODW as it does not have the ability to control ODW. As a result, it does not consolidate ODW into its financial statements. Refer to Note 7 for further discussion of how the Company accounts for its investment in ODW, including the Company's remaining contributions (which represent the maximum exposure to the Company).

The Company also determined that, as of March 31, 2014, it continued to have a variable interest in an entity that was created to operate and tour its live arena show that is based on its feature film How to Train Your Dragon, and that the Company is the primary beneficiary of this entity as a result of the Company's obligation to fund all losses.Accordingly, the Company's consolidated financial statements included the activities of the VIE. The consolidation of the VIE had an immaterial impact as of and for the three months ended March 31, 2014 and 2013.

Film and Other Inventory Costs Amortization

Amortization and write-off of film and other inventory costs in any period includes depreciation and amortization, interest expense and stock-based compensation expense that were capitalized as part of film and other inventory costs in the period that those charges were incurred. The total amount of such expenses reflected as a component of amortization and write-off of film and other inventory costs for the three months ended March 31, 2014 and 2013 is presented in the statements of cash flows.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates made by management in the preparation of the financial statements relate to the following:

• ultimate revenues and ultimate costs of film, television product and live performance productions;

• relative selling price of the Company's products for purposes of revenue allocation in multi-property licenses and other multiple deliverable arrangements;

• determination of fair value of assets and liabilities for the allocation of the purchase price in an acquisition;

• determination of fair value of non-cash contributions to investments in unconsolidated entities;

• useful lives of intangible assets;

• product sales that will be returned and the amount of receivables that ultimately will be collected;

• the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements;

• loss contingencies and contingent consideration arrangements; and

• assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting.

Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Common Class A [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	104,279,149	104,155,993
Class A Treasury common stock, shares	27,482,030	27,439,119
Common Class B [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	7,838,731	7,838,731
Common stock, shares outstanding	7,838,731	7,838,731

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Income Taxes

3 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company typically determines its interim income tax provision by using the estimated annual effective tax rate and applying that rate to income/loss on a current year-to-date basis. However, if minor changes to forecasted annual pre-tax earnings have a significant effect on the annual effective tax rate, the Company may determine that this method would not be appropriate and that a different method should be applied. For the three months ended March 31, 2014, the Company determined that the annual effective tax rate method would not represent a reliable estimate of the interim income tax provision. As a result, the Company utilized a discrete period method to calculate taxes for the three months ended March 31, 2014. Under the discrete method, the Company determined the income tax provision based upon actual results as if the interim period were an annual period. 

Set forth below is a reconciliation of the components that caused the Company's benefit/provision for income taxes (including the income statement line item "Decrease (increase) in income tax benefit payable to former stockholder") to differ from amounts computed by applying the U.S. Federal statutory rate of 35% for the three months ended March 31, 2014 and 2013.

	Three Months Ended
	March 31,
	2014		2013
Provision for income taxes (combined with decrease/increase in income tax benefit payable to former stockholder)(1)
U.S. Federal statutory rate	35.0	%	35.0	%
U.S. state taxes, net of Federal benefit	1.6		(2.7	)
Export sales exclusion/manufacturer's deduction(2)	1.2		7.3
Research and development credit(2)	—		(25.4	)
Federal energy tax credit(3)	—		(2.5	)
Executive compensation	(0.3	)	3.2
Stock-based compensation	—		1.3
Other	(2.0	)	(0.8	)
Effective tax rate (combined with decrease/increase in income tax benefit payable to former stockholder)(1)	35.5	%	15.4	%
Less: change in income tax benefit payable to former stockholder(1):
Export sales exclusion/manufacturer's deduction(2)	(1.1	)	(7.6	)
Imputed interest on payable to former stockholder	0.1		(1.8	)
Other	(0.4	)	(0.2	)
Total change in income tax benefit payable to former stockholder(1)	(1.4	)%	(9.6	)%
Effective tax rate	34.1	%	5.8	%

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⁽¹⁾  As a result of a partial increase in the tax basis of the Company's tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of the Company's 2004 initial public offering, the Company may pay reduced tax amounts to the extent it generates sufficient taxable income in the future. The Company is obligated to remit to an affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax and California franchise tax and certain other related tax benefits. Refer to the Company's 2013 Form 10-K for a more detailed description.

⁽²⁾  The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment).

⁽³⁾  The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated.

The Company's federal income tax returns for the tax years ended December 31, 2007 through 2009 are currently under examination by the Internal Revenue Service, and all subsequent tax years remain open to audit. The Company's California state tax returns for all years subsequent to 2007 remain open to audit. The Company's India subsidiary's income tax returns are currently under examination for the tax years ended March 31, 2010 through 2012.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 18, 2014 Common Class A [Member]	Apr. 18, 2014 Common Class B [Member]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Entity Registrant Name	DreamWorks Animation SKG, Inc.
Entity Central Index Key	0001297401
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		76,797,154	7,838,731

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Stockholders' Equity and Non-controlling Interests

3 Months Ended

Mar. 31, 2014

Stockholders' Equity Note [Abstract]

Stockholders' Equity and Non-controlling Interests

Stockholders’ Equity and Non-controlling Interests

Class A Common Stock

Stock Repurchase Program.  In July 2010, the Company's Board of Directors terminated the then-existing stock repurchase program and authorized a new stock repurchase program pursuant to which the Company may repurchase up to an aggregate of $150.0 million of its outstanding stock. During the three months ended March 31, 2014, the Company did not repurchase any shares of its Class A Common Stock. During the three months ended March 31, 2013, the Company repurchased 0.8 million shares of its outstanding Class A Common Stock for $16.2 million under the July 2010 authorization. As of March 31, 2014, the Company's remaining authorization under the current stock repurchase program was $100.0 million.

Non-controlling Interests

The Company's consolidated balance sheets include non-controlling interests, which is presented as a separate component of equity. The non-controlling interest represents the other equity holder's interest in a joint venture that the Company consolidates. The net income attributable to the non-controlling interests is presented in the Company’s consolidated statements of operations. There is no other comprehensive income or loss attributable to the non-controlling interests.

The following table presents the changes in equity for the three-month periods ended March 31, 2014 and 2013 (in thousands):

	DreamWorks Animation SKG, Inc. Stockholders' Equity			Non-controlling Interests		Total Equity
Balance as of December 31, 2013	$	1,404,795		$	1,224	$	1,406,019
Proceeds from stock option exercises	261			—		261
Stock-based compensation	9,068			—		9,068
Purchase of treasury shares	(1,246		)	—		(1,246		)
Foreign currency translation adjustments	132			—		132
Net (loss) income	(42,936		)	520		(42,416		)
Balance as of March 31, 2014	$	1,370,074		$	1,744	$	1,371,818
Balance as of December 31, 2012	$	1,345,616		$	630	$	1,346,246
Stock-based compensation	8,404			—		8,404
Purchase of treasury shares	(16,534		)	—		(16,534		)
Foreign currency translation adjustments	(2,492		)	—		(2,492		)
Net income	5,577			537		6,114
Balance as of March 31, 2013	$	1,340,571		$	1,167	$	1,341,738

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Income Statement [Abstract]
Revenues (see Note 7 for related party amounts)	$ 147,241		$ 134,648
Costs of revenues	160,689		85,521
Gross (loss) profit	(13,448)	[1]	49,127	[1]
Product development	540		963
Selling, general and administrative expenses	49,679		42,789
Other operating income (see Note 7 for related party amounts)	(1,672)		0
Operating (loss) income	(61,995)		5,375
Non-operating income (expense):
Interest (expense) income, net	(1,773)		863
Other income, net	1,218		992
Decrease (increase) in income tax benefit payable to former stockholder	927		(698)
(Loss) income before loss from equity method investees and income taxes	(61,623)		6,532
Loss from equity method investees	3,260		0
(Loss) income before income taxes	(64,883)		6,532
(Benefit) provision for income taxes	(22,467)		418
Net (loss) income	(42,416)		6,114
Less: Net income attributable to non-controlling interests	520		537
Net (loss) income attributable to DreamWorks Animation SKG, Inc.	$ (42,936)		$ 5,577
Net (loss) income per share of common stock attributable to DreamWorks Animation SKG, Inc.
Basic net (loss) income per share (in dollars per share)	$ (0.51)		$ 0.07
Diluted net (loss) income per share (in dollars per share)	$ (0.51)		$ 0.07
Shares used in computing net (loss) income per share
Basic (in shares)	84,484		84,671
Diluted (in shares)	84,484		85,265

[1] The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes.

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Intangible Assets

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

As of March 31, 2014 and December 31, 2013, intangible assets included $49.5 million of indefinite-lived intangible assets. In addition, intangible assets were comprised of definite-lived intangible assets as follows (in thousands, unless otherwise noted):

	Weighted Average Estimated Useful Life (in years)	Gross		Accumulated Amortization			Impact of Foreign Currency Translation		Net
As of March 31, 2014:
Character rights	13.9	$	99,000	$	(10,322	)	$	1,999	$	90,677
Programming content	2.0	11,200		(5,133		)	—		6,067
Trademarks and trade names	10.0	1,200		(110		)	—		1,090
Other intangibles	2.0	500		(229		)	—		271
Total		$	111,900	$	(15,794	)	$	1,999	$	98,105
As of December 31, 2013:
Character rights	13.9	$	99,000	$	(8,663	)	$	1,754	$	92,091
Programming content	2.0	11,200		(3,733		)	—		7,467
Trademarks and trade names	10.0	1,200		(80		)	—		1,120
Other intangibles	2.0	500		(167		)	—		333
Total		$	111,900	$	(12,643	)	$	1,754	$	101,011

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Film and Other Inventory Costs

3 Months Ended

Mar. 31, 2014

Film Costs [Abstract]

Film And Other Inventory Costs

Film and Other Inventory Costs

Film, television, live performance and other inventory costs consist of the following (in thousands):

	March 31, 2014		December 31, 2013
In release, net of amortization:
Feature films	$	312,861	$	285,238
Television series and specials	62,217		58,631
In production:
Feature films	396,407		474,609
Television series and specials	28,260		15,332
In development:
Feature films	97,922		75,498
Television series and specials	456		1,500
Product inventory and other(1)	16,511		32,678
Total film, television, live performance and other inventory costs, net	$	914,634	$	943,486

 ____________________

⁽¹⁾  This category includes $8.6 million and $24.8 million of capitalized live performance costs as of March 31, 2014 and December 31, 2013, respectively. In addition, as of March 31, 2014 and December 31, 2013, this category includes $7.9 million of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market.

The Company anticipates that approximately39% and 77%of the above "in release" film and other inventory costs as of March 31, 2014 will be amortized over the next 12 months and three years, respectively.

As a result of the weaker-than-expected worldwide theatrical performance of Mr. Peabody and Sherman (released into the domestic theatrical market during March 2014), the Company performed an analysis to determine whether the unamortized film inventory costs exceeded fair value and was thus impaired. Key assumptions used in the fair value measurement were a discount rate of 7% and estimated remaining cash flows over a period of approximately 15 years. As a result of the analysis, during the three months ended March 31, 2014, the Company recorded an impairment charge of $57.1 million, resulting in a remaining carrying value of $86.0 million as of March 31, 2014. An increase in the discount rate of 5% would change the fair value measurement by approximately $7.8 million for the three months ended March 31, 2014. The estimate of remaining cash flows is dependent on, among other things, the title's performance in post-theatrical markets which have not yet released (e.g., home entertainment and television). A reduction of 10% in the estimated future variable revenues would result in an additional impairment charge of approximately $5.0 million to $10.0 million for this title.

No impairment charges were recorded on film and other inventory costs during the three months ended March 31, 2013.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings. From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business, typically intellectual property litigation and infringement claims related to the Company's feature films and other commercial activities, which could cause the Company to incur significant expenses or prevent the Company from releasing a film or other properties. The Company also has been the subject of patent and copyright claims relating to technology and ideas that it may use or feature in connection with the production, marketing or exploitation of the Company's feature films and other properties, which may affect the Company's ability to continue to do so. Furthermore, from time to time the Company may introduce new products or services, including in areas where it currently does not operate, which could increase its exposure to litigation and claims by competitors, consumers or other intellectual property owners. Defending intellectual property litigation is costly and can impose a significant burden on management and employees, and there can be no assurances that favorable final outcomes will be obtained in all cases. While the resolution of these matters cannot be predicted with certainty, the Company does not believe, based on current knowledge, that any existing legal proceedings or claims are likely to have a material effect on its financial position, results of operations or cash flows.

Contributions to ODW. The Company has committed to making certain contributions in connection with the formation of ODW. Refer to Note 7 for further discussion related to these commitments.

Contingent Consideration. As a result of the Company's acquisition of ATV, the Company may be obligated to make additional contingent cash payments as part of the purchase price. Refer to Note 3 for further discussion.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company recognizes compensation costs for equity awards granted to its employees based on each award's grant-date fair value. Most of the Company's equity awards contain vesting conditions dependent upon the completion of specified service periods or achievement of established sets of performance criteria. Compensation cost for service-based equity awards is recognized ratably over the requisite service period. Compensation cost for certain performance-based awards is recognized using a graded expense-attribution method. The Company has granted performance-based awards where the value of the award upon vesting will vary depending on the level of performance ultimately achieved. The Company recognizes compensation cost for these awards based on the level of performance expected to be achieved. The Company will recognize the impact of any change in estimate in the period of the change.

Generally, equity awards are forfeited by employees who terminate prior to vesting. However, certain employment contracts for certain executive officers provide for the acceleration of vesting in the event of a change in control or specified termination events. The Company currently satisfies exercises of stock options and stock appreciation rights, the vesting of restricted stock and the delivery of shares upon the vesting of restricted stock units with the issuance of new shares.

The impact of stock options (including stock appreciation rights) and restricted stock awards on net income (excluding amounts capitalized) for the three-month periods ended March 31, 2014 and 2013, respectively, was as follows (in thousands):

	Three Months Ended
	March 31,
	2014			2013
Total stock-based compensation	$	5,309		$	4,075
Tax impact(1)	(1,885		)	(628		)
Reduction in net income, net of tax	$	3,424		$	3,447

 ____________________

⁽¹⁾  Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item "Decrease/increase in income tax benefit payable to former stockholder" (see Note 11).

Stock-based compensation cost capitalized as a part of film costs was $3.7 million and $4.3 million for the three-month periods ended March 31, 2014 and 2013, respectively.

The following table sets forth the number and weighted average grant-date fair value of equity awards granted during the three-month periods ended March 31, 2014 and 2013:

	Three Months Ended
	March 31,
	Number Granted	Weighted Average Grant-Date Fair Value
	(in thousands)
2014
Restricted stock and restricted stock units	224	$	29.91
2013
Restricted stock and restricted stock units	261	$	16.87

As of March 31, 2014, the total compensation cost related to unvested equity awards granted to employees (excluding equity awards with performance objectives not probable of achievement) but not yet recognized was approximately $78.5 million and will be amortized on a straight-line basis over a weighted average period of 1.9 years.

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Deferred Revenue and Other Advances

3 Months Ended

Mar. 31, 2014

Deferred Revenue Disclosure [Abstract]

Deferred Revenue and Other Advances

Deferred Revenue and Other Advances

The following is a summary of deferred revenue and other advances included in the consolidated balance sheets as of March 31, 2014 and December 31, 2013 and the related amounts earned and recorded either as revenue in the consolidated statements of operations or recorded as an offset to other costs (as described below) for the three-month periods ended March 31, 2014 and 2013 (in thousands):

					Amounts Earned
					Three Months Ended
	March 31,		December 31,		March 31,
	2014		2013		2014		2013
Deferred Revenue	$	11,632	$	14,578	$	7,637	$	7,721
Strategic Alliance/Development Advances(1)	962		1,667		7,138		9,074
Other(2)	16,537		20,180		19,897		4,763
Total deferred revenue and other advances	$	29,131	$	36,425

  ____________________

⁽¹⁾  Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2014 and 2013, $2.4 million and $5.2 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.0 million and $0.5 million, respectively, were recorded as a reduction to other assets, respectively. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $0.5 million and $0.9 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.1 million and $0.4 million, respectively, were recorded as a reduction to operating expenses.

⁽²⁾  Of the total amounts earned, for the three months ended March 31, 2014, $14.0 million was recorded as a reduction to film and other inventory costs.

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Related Party Transactions (Details) (UMG [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
UMG [Member]
Related Party Transaction [Line Items]
Related party transaction, expenses from transactions with related party, amounts capitalized	$ 0.2

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Investments in Unconsolidated Entities

3 Months Ended

Mar. 31, 2014

Investments in Unconsolidated Entities [Abstract]

Investments in Unconsolidated Entities

Investments in Unconsolidated Entities

The Company has made investments in entities which are accounted for under either the cost or equity method of accounting. These investments are classified as investments in unconsolidated entities in the consolidated balance sheets and consist of the following (in thousands, unless otherwise indicated):

	Ownership
	Percentage at	March 31,		December 31,
	March 31, 2014	2014		2013
Oriental DreamWorks Holding Limited	45.45%	$	15,856	$	16,389
All Other	30%-50%	4,421		3,140
Total equity method investments		20,277		19,529
Total cost method investments		24,013		19,013
Total investments in unconsolidated entities		$	44,290	$	38,542

Under the equity method of accounting, the carrying value of an investment is adjusted for the Company's proportionate share of the investees' earnings and losses (adjusted for the amortization of any differences in the basis of the Company's investment in ODW compared to the Company's share of venture-level equity), as well as contributions to and distributions from the investee. The Company classifies its share of income or loss from investments accounted for under the equity method as income/loss from equity method investees in its consolidated statements of operations.

Loss from equity method investees consist of the following (in thousands):

	Three Months Ended
	March 31, 2014
Oriental DreamWorks Holding Limited(1)	$	2,210
All Other	1,050
Loss from equity method investees	$	3,260

____________________

⁽¹⁾   The Company currently records its share of ODW results on a one-month lag. Accordingly, the Company's consolidated financial statements include its share of losses incurred by ODW from December 1, 2013 to February 28, 2014.

Oriental DreamWorks Holding Limited

On April 3, 2013 ("ODW Closing Date"), the Company formed a Chinese Joint Venture, ODW (or the "Chinese Joint Venture"), through the execution of a Transaction and Contribution Agreement, as amended, with its Chinese partners, China Media Capital (Shanghai) Center L.P. ("CMC"), Shanghai Media Group ("SMG") and Shanghai Alliance Investment Co., Ltd. ("SAIL", and together with CMC and SMG, the "CPE Holders"). In exchange for 45.45% of the equity of ODW, the Company has committed to making a total cash capital contribution to ODW of $50.0 million (of which $5.7 million was funded at the ODW Closing Date, with the balance to be funded over time) and non-cash contributions valued at approximately $100.0 million (of which approximately $25.4 million had been satisfied as of March 31, 2014). Such non-cash contributions include licenses of technology and certain other intellectual property of the Company, rights in certain trademarks of the Company, two in-development feature film projects developed by the Company and consulting and training services. During the three months ended March 31, 2014, the Company's consolidated statements of operations included $1.7 million of other operating income recognized in connection with non-cash contributions made to ODW.

As of March 31, 2014, the Company's remaining contributions consisted of the following: (i) $44.3 million in cash (which is expected to be funded over the next three years), (ii) two of the Company's in-development film projects (the specific projects of which have not yet been identified), (iii) remaining delivery requirements under the licenses of technology and certain other intellectual property of the Company and (iv) approximately $7.2 million in consulting and training services. Some of these remaining contribution commitments will require future cash outflows for which the Company is not currently able to estimate the timing of contributions as this will depend on, among other things, ODW's operations.

Basis Differences.The Company's investment in ODW does not equal the venture-level equity (the amount recorded on the balance sheet of ODW) due to various basis differences. Basis differences related to definite-lived assets are being amortized based on the useful lives of the related assets. Basis differences related to indefinite-lived assets are not being amortized. The following are the differences between the Company's venture-level equity and the balance of its investment in ODW (in thousands):

	March 31, 2014
Company's venture-level equity	$	44,445
Technology and intellectual property licenses(1)	(19,150		)
Other(2)	(9,439		)
Total ODW investment recorded	$	15,856

____________________

⁽¹⁾ Represents differences between the Company's historical cost basis and the equity basis reflected at the venture-level (the amount recorded on the balance sheet of ODW) related to the Company's contributions of technology and intellectual property licenses. These basis differences arise because the contributed assets are recorded at fair value by ODW.

⁽²⁾  Represents the Company's net contribution commitment due to ODW.

Other Transactions with ODW. The Company has various other transactions with ODW, a related party. The Company has entered into a distribution agreement with ODW for the distribution of the Company's feature films in China (beginning with The Croods). In addition, from time to time, the Company may provide consulting and training services to ODW, the charges of which are based on a pre-determined rate schedule which approximates the Company's actual cost of providing such services. During the three months ended March 31, 2014, the Company's consolidated statements of operations included $0.7 million of revenues earned through ODW's distribution of the Company's feature films. As of March 31, 2014 and December 31, 2013, the Company's consolidated balance sheets included receivables from ODW of $5.1 million and $3.8 million, respectively, which were classified as a component of trade accounts receivable, and $4.3 million and $16.7 million, respectively, which were classified as a component of receivables from distributors.

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Accrued Liabilities

3 Months Ended

Mar. 31, 2014

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2014		December 31, 2013
Employee compensation	$	22,805	$	65,625
Participations and residuals	48,799		50,690
Contingent consideration(1)	100,051		97,545
Interest payable	2,635		7,849
Deferred rent	8,553		8,114
Other accrued liabilities	32,018		33,845
Total accrued liabilities	$	214,861	$	263,668

  ____________________

⁽¹⁾  Primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 3 for further information).

As of March 31, 2014, the Company estimates that over the next 12 months it will pay approximately$23.1 millionof its accrued participation and residual costs.

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Financing Arrangements

3 Months Ended

Mar. 31, 2014

Line of Credit Facility [Abstract]

Financing Arrangements

Financing Arrangements

Senior Unsecured Notes. On August 14, 2013, the Company issued $300.0 million in aggregate principal amount of 6.875% Senior Notes due 2020 (the "Notes"). In connection with the issuance of the Notes, the Company entered into an indenture (the “Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee, specifying the terms of the Notes. The Notes were sold at a price to investors of 100% of their principal amount and were issued in a private placement pursuant to the exemptions under Rule 144A and Regulation S under the Securities Act of 1933, as amended. The net proceeds from the Notes amounted to $294.0 millionand a portion was used to repay the outstanding borrowings under the Company's revolving credit facility. The Notes are effectively subordinated to indebtedness under the revolving credit facility. Beginning on February 15, 2014, the Company is required to pay interest on the Notes semi-annually in arrears on February 15 and August 15 of each year. The principal amount is due upon maturity. The Notes are guaranteed by all of the Company's domestic subsidiaries that also guarantee its revolving credit facility.

The Indenture contains certain restrictions and covenants that, subject to certain exceptions, limit the Company's ability to incur additional indebtedness, pay dividends or repurchase the Company's common shares, make certain loans or investments, and sell or otherwise dispose of certain assets, among other limitations. The Indenture also contains customary events of default, which, if triggered, may accelerate payment of principal, premium, if any, and accrued but unpaid interest on the Notes. Such events of default include non-payment of principal and interest, non-performance of covenants and obligations, default on other material debt, failure to satisfy material judgments and bankruptcy or insolvency. If a change of control as described in the Indenture occurs, the Company may be required to offer to purchase the Notes from the holders thereof at a repurchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase.

At any time prior to August 15, 2016, the Company may redeem all or part of the Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a specified premium as of the date of redemption, plus (iii) accrued and unpaid interest to, but not including, the date of redemption, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. On or after August 15, 2016, the Company may redeem all or a part of the Notes, at specified redemption prices plus accrued and unpaid interest thereon, to, but not including, the applicable redemption date, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. In addition, at any time prior to August 15, 2016, the Company may redeem up to 35% of the Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.875% of the principal amount thereof, in each case plus accrued and unpaid interest and additional interest, if any, thereon to, but not including, the redemption date.

Revolving Credit Facility. The Company has a revolving credit facility with a number of banks. On August 10, 2012, the Company and the facility banks terminated the then-existing credit agreement and entered into a new Credit Agreement ("New Credit Agreement"). The New Credit Agreement allows the Company to have outstanding borrowings up to $400.0 million at any one time, on a revolving basis. Borrowings are secured by substantially all of the Company's assets. The New Credit Agreement requires the Company to maintain a specified ratio of total debt to total capitalization and a specified ratio of net remaining ultimates to facility exposure. In addition, subject to specified exceptions, the New Credit Agreement also restricts the Company and its subsidiaries from taking certain actions, such as granting liens, entering into any merger or other significant transactions, making distributions, entering into transactions with affiliates, agreeing to negative pledge clauses and restrictions on subsidiary distributions, and modifying organizational documents. The revolving credit facility also prohibits the Company from paying dividends on its capital stock if, after giving pro forma effect to such dividend, an event of default would occur or exist under the revolving credit facility. The Company is required to pay a commitment fee on undrawn amounts at an annual rate of 0.375%. Interest on borrowed amounts (per draw) is determined by reference to either i) the lending banks' base rate plus 1.50% per annum or ii) the London Interbank Offered Rate ("LIBOR") plus 2.50% per annum.

The following table summarizes information associated with the Company's financing arrangements (in thousands, except percentages):

							Interest Expense
							Three Months Ended
	Balance Outstanding at				Maturity Date		March 31,
	March 31, 2014		December 31, 2013			Interest Rate at March 31, 2014	2014		2013
Senior Unsecured Notes	$	300,000	$	300,000	August 2020	6.875%	$	2,234	N/A
Revolving Credit Facility	$	—	$	—	August 2017	N/A	$	375	$	220

____________________

N/A: Not applicable

Additional Financing Information

Interest Capitalized to Film Costs.    Interest on borrowed funds that are invested in major projects with substantial development or construction phases is capitalized as part of the asset cost until the projects are released or construction projects are put into service. Thus, capitalized interest is amortized over future periods on a basis consistent with that of the asset to which it relates. During the three months ended March 31, 2014 and 2013, the Company incurred interest costs totaling $6.1 million and $1.6 million, respectively, of which $3.2 million and $1.4 million, respectively, were capitalized to film costs.

As of March 31, 2014, the Company was in compliance with all applicable financial debt covenants.

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Earnings Per Share Data - Contingently Issuable Equity Awards (Details) (Options to Purchase Shares of Common Stock and Restricted Stock Awards [Member], Contingently Issuable Shares [Member]) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Options to Purchase Shares of Common Stock and Restricted Stock Awards [Member] | Contingently Issuable Shares [Member]
Contingently Issuable Equity Awards Excluded from Computation of Earnings Per Share [Line Items]
Contingently issuable equity awards	716

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Subsequent Events (Details) (Big Frame Inc [Member], Subsequent Event [Member], USD $) In Thousands, unless otherwise specified	0 Months Ended
	Apr. 08, 2014
Big Frame Inc [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Purchase price	$ 15,000

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Earnings Per Share Data - Antidilutive Securities (Details) (Stock Compensation Plan [Member]) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	8,886
Options to Purchase Shares of Common Stock and Restricted Stock Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	3,735
Stock Appreciation Rights (SARs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	5,151

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Financing Arrangements (Tables)

3 Months Ended

Mar. 31, 2014

Line of Credit Facility [Abstract]

Schedule of financing arrangements

The following table summarizes information associated with the Company's financing arrangements (in thousands, except percentages):

							Interest Expense
							Three Months Ended
	Balance Outstanding at				Maturity Date		March 31,
	March 31, 2014		December 31, 2013			Interest Rate at March 31, 2014	2014		2013
Senior Unsecured Notes	$	300,000	$	300,000	August 2020	6.875%	$	2,234	N/A
Revolving Credit Facility	$	—	$	—	August 2017	N/A	$	375	$	220

____________________

N/A: Not applicable

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Deferred Revenue and Other Advances (Details) (USD $)	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013		Dec. 31, 2013
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	$ 29,131,000				$ 36,425,000
Deferred Revenue [Member]
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	11,632,000				14,578,000
Deferred revenue and other advances, amounts earned	7,637,000		7,721,000
Strategic Alliance/Development Advances [Member]
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	962,000	[1]			1,667,000	[1]
Deferred revenue and other advances, amounts earned	7,138,000	[1]	9,074,000	[1]
Amount capitalized as offset to property, plant and equipment	2,400,000		5,200,000
Amount capitalized as offset to other assets	1,000,000		500,000
Amount capitalized as offset to prepaid expenses	500,000		900,000
Amount recorded as an offset to operating expenses	1,100,000		400,000
Other Advances [Member]
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	16,537,000	[2]			20,180,000	[2]
Deferred revenue and other advances, amounts earned	19,897,000	[2]	4,763,000	[2]
Amount recorded as an offset of film and other inventory costs	$ 14,000,000

[1] Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2014 and 2013, $2.4 million and $5.2 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.0 million and $0.5 million, respectively, were recorded as a reduction to other assets, respectively. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $0.5 million and $0.9 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2014 and 2013, of the total amounts earned, $1.1 million and $0.4 million, respectively, were recorded as a reduction to operating expenses.

[2] Of the total amounts earned, for the three months ended March 31, 2014, $14.0 million was recorded as a reduction to film and other inventory costs.

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Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Transactions with ODW

During the three months ended March 31, 2014, the Company had various transactions with a related party, ODW. See Note 7 for further discussion related to these transactions.

Transactions with Universal Music Group

One of the Company's directors, Lucian Grainge, is the chief executive officer of Universal Music Group ("UMG"). From time to time, the Company and UMG make payments to each other in connection with the licensing of music that is owned by the other company (or for which the other company serves as the music publisher). In addition, UMG serves as the music publisher for the Company's Classic Media properties (which the Company acquired in August 2012). Finally, UMG and ATV (which the Company acquired in May 2013) have formed joint ventures related to the music business. For the three months ended March 31, 2014, revenues recognized related to the arrangements were not material. During the three months ended March 31, 2014, the Company incurred expenses (which were recorded as film inventory costs) totaling $0.2 million related to these arrangements.

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Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On April 1, 2014, the Company executed an Agreement and Plan of Merger and Reorganization to acquire Big Frame, Inc. (a multi-channel network). The purchase price consisted of cash payments totaling $15.0 million (inclusive of amounts held in escrow) and was paid upon closing of the transaction, which occurred on April 8, 2014. The Company expects that the acquisition will have an immaterial impact on its consolidated financial statements.

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Investments in Unconsolidated Entities Narrative (Details) (USD $)	3 Months Ended					3 Months Ended			3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014 ODW Holding Limited [Member]	Dec. 31, 2013 ODW Holding Limited [Member]	Mar. 31, 2014 Distribution Arrangement [Member] ODW Holding Limited [Member]	Mar. 31, 2014 ODW Holding Limited [Member] in-development_film_project	Apr. 03, 2013 ODW Holding Limited [Member]	Mar. 31, 2014 Non-Cash Contributions [Member] ODW Holding Limited [Member]
Investments in and Advances to Affiliates [Line Items]
Equity method investment, ownership percentage							45.45%	45.45%
Equity method investment, cash contribution commitment								$ 50,000,000
Cash paid at closing date								5,700,000
Estimated aggregate value of non-cash contributions								100,000,000
Value of non-cash contributions satisfied							25,400,000
Remaining cash contribution commitment to be paid							44,300,000
Payment period for remaining cash contribution commitment							3 years
Number of in-development film projects							2
Value of consulting and training services rendered							7,200,000
Revenues	147,241,000	134,648,000				700,000
Other operating income	(1,672,000)	0							(1,700,000)
Trade accounts receivable, net of allowance for doubtful accounts	148,922,000		130,744,000	5,100,000	3,800,000
Receivable from distributors, net of allowance for doubtful accounts	$ 203,934,000		$ 283,226,000	$ 4,300,000	$ 16,700,000

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Acquisitions (Details) (USD $)			0 Months Ended		3 Months Ended			9 Months Ended	3 Months Ended		0 Months Ended	3 Months Ended	0 Months Ended	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	May 03, 2013 AwesomenessTV, Inc. [Member]		Mar. 31, 2013 AwesomenessTV, Inc. [Member]	Mar. 31, 2014 AwesomenessTV, Inc. [Member]	Dec. 31, 2013 AwesomenessTV, Inc. [Member]	Mar. 31, 2014 Adjustment [Member] AwesomenessTV, Inc. [Member]	Mar. 31, 2014 Sensitivity, Potential Change [Member]	Mar. 31, 2014 Sensitivity, Potential Change [Member] AwesomenessTV, Inc. [Member]	May 03, 2013 Income Approach Valuation Technique [Member] AwesomenessTV, Inc. [Member]	Mar. 31, 2014 Income Approach Valuation Technique [Member] AwesomenessTV, Inc. [Member]	May 03, 2013 Income Approach Valuation Technique [Member] Sensitivity, Potential Change [Member] AwesomenessTV, Inc. [Member]	Mar. 31, 2014 Income Approach Valuation Technique [Member] Sensitivity, Potential Change [Member] AwesomenessTV, Inc. [Member]
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract]
Cash and cash equivalents			$ 1,340,000	[1]
Trade receivables			1,279,000	[1],[2]
Prepaid and other assets			434,000	[1]
Production costs			612,000	[1]
Property, plant and equipment			183,000	[1]
Intangible assets			12,900,000	[1]
Total identified assets acquired			16,748,000	[1]
Accounts payable			655,000	[1]
Deferred revenue			2,057,000	[1]
Deferred tax liabilities, net			3,765,000	[1]
Total liabilities assumed			6,477,000	[1]
Net identified assets acquired			10,271,000	[1]
Goodwill	179,294,000	179,722,000	118,189,000	[1],[3]
Total consideration			128,460,000	[1]
Decrease to goodwill								900,000
Changes in fair value of estimated contingent consideration								500,000
Decrease in deferred tax liabilities								400,000
Acquired receivables, gross contractual amounts due			1,300,000
Acquired receivables deemed uncollectible			0
Contingent consideration arrangement with former shareholders, term			2 years
Estimated Contingent consideration			95,000,000			99,000,000	96,500,000
Discount rate									5.00%		8.50%	18.00%	15.00%	15.00%
Volatility rate											32.60%	35.90%	20.00%	20.00%
Contingent Consideration, Fair Value After Change in Discount Rate, Amount										100,000,000			90,500,000
Contingent Consideration, Fair Value After Change in Volatility Rate, Amount										107,000,000			103,500,000
Probability adjusted earnings in 2014											25,000,000
Probability adjusted earnings in 2015											41,000,000
Maximum contingent consideration that may be earned						117,000,000
Pro forma information, adjustments, decrease to income tax expense					500,000
Pro forma information, adjustments, Increase in amortization expense					$ 2,900,000

[1] Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million.

[2] Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible.

[3] The goodwill resulting from the acquisition of ATV is not deductible for tax purposes.

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Consolidated Statements of Comprehensive (Loss) Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (42,416)	$ 6,114
Other comprehensive (loss) income, net of tax:
Foreign currency translation gains (losses)	132	(2,492)
Comprehensive (loss) income	(42,284)	3,622
Less: Comprehensive income attributable to non-controlling interests	520	537
Comprehensive (loss) income attributable to DreamWorks Animation SKG, Inc.	$ (42,804)	$ 3,085

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Financial Instruments

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Financial Instruments

Financial Instruments

The fair value of cash and cash equivalents, accounts payable, advances and amounts outstanding under the revolving credit facility approximates carrying value due to the short-term maturity of such instruments and floating interest rates. As of March 31, 2014, the fair value of trade accounts receivable approximated carrying value due to the similarities in the initial and current discount rates. In addition, as of March 31, 2014, the fair value of the senior unsecured notes approximated carrying value as the current borrowing rate approximated the debt instrument's actual interest rate. The fair value of trade accounts receivable and the senior unsecured notes was determined using significant unobservable inputs by performing a discounted cash flow analysis and using current discount rates as appropriate for each type of instrument.

The Company has short-term money market investments which are classified as cash and cash equivalents on the consolidated balance sheets. The fair value of these investments at March 31, 2014 and December 31, 2013 was measured based on quoted prices in active markets.

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Reportable Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Segment Reporting Information [Line Items]
Revenues	$ 147,241		$ 134,648
Gross (Loss) Profit	(13,448)	[1]	49,127	[1]
Feature Films [Member]
Segment Reporting Information [Line Items]
Revenues	110,097		78,546
Gross (Loss) Profit	(25,388)	[1]	25,950	[1]
Television Series and Specials [Member]
Segment Reporting Information [Line Items]
Revenues	17,969		19,368
Gross (Loss) Profit	5,759	[1]	4,917	[1]
Consumer Products [Member]
Segment Reporting Information [Line Items]
Revenues	12,067		27,484
Gross (Loss) Profit	6,004	[1]	18,428	[1]
All Other [Member]
Segment Reporting Information [Line Items]
Revenues	7,108		9,250
Gross (Loss) Profit	$ 177	[1]	$ (168)	[1]

[1] The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes.

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Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Recent accounting pronouncements

Recent Accounting Pronouncements

In July 2013, the FASB issued an accounting standard update relating to the presentation of unrecognized tax benefits. The accounting update requires companies to present a deferred tax asset net of related unrecognized tax benefits if there is a net operating loss or other tax carryforwards that would apply in settlement of the uncertain tax position. To the extent that an uncertain tax position would not be settled through a reduction of a net operating loss or other tax carryforwards, the unrecognized tax benefit will be presented as a liability. The guidance is effective for the Company's fiscal year beginning January 1, 2014, with early adoption permitted. The Company adopted the new guidance effective January 1, 2014. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements.

Basis of Presentation

Basis of Presentation

The accompanying unaudited financial data as of March 31, 2014 and for the three months ended March 31, 2014 and 2013 has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, certain information and footnote disclosures normally included in comprehensive financial statements have been condensed or omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2013 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Form 10-K"). Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the Company's 2014 presentation.

The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items, which in the opinion of management, are necessary for a fair statement for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full year, or for any future period, as fluctuations can occur based upon the timing of the Company's films' theatrical and home entertainment releases, and television series and specials broadcasts.

Consolidation

Consolidation

The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animationand its wholly-owned subsidiaries.The Company also consolidates less-than-wholly owned entities if the Company has a controlling financial interest in that entity.The Company uses the equity method of accounting for investments in companies in which it has a 50% or less ownership interest and has the ability to exercise significant influence. Such investments are presented as investments in unconsolidated entities on the Company's consolidated balance sheets (refer to Note 7 for further information of such investments). Prior to recording its share of net income or losses from equity method investees, investee financial statements are converted to U.S. GAAP. All significant intercompany accounts and transactions have been eliminated. Intra-entity profit related to transactions with equity method investees is eliminated until the amounts are ultimately realized.

In addition, the Company reviews its relationships with other entities to identify whether they are variable interest entities ("VIE") as defined by the Financial Accounting Standards Board ("FASB"), and to assess whether the Company is the primary beneficiary of such entity. If the determination is made that the Company is the primary beneficiary, then the entity is consolidated.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates made by management in the preparation of the financial statements relate to the following:

• ultimate revenues and ultimate costs of film, television product and live performance productions;

• relative selling price of the Company's products for purposes of revenue allocation in multi-property licenses and other multiple deliverable arrangements;

• determination of fair value of assets and liabilities for the allocation of the purchase price in an acquisition;

• determination of fair value of non-cash contributions to investments in unconsolidated entities;

• useful lives of intangible assets;

• product sales that will be returned and the amount of receivables that ultimately will be collected;

• the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements;

• loss contingencies and contingent consideration arrangements; and

• assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting.

Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis.

Fair Value of Financial Instruments

The fair value of cash and cash equivalents, accounts payable, advances and amounts outstanding under the revolving credit facility approximates carrying value due to the short-term maturity of such instruments and floating interest rates. As of March 31, 2014, the fair value of trade accounts receivable approximated carrying value due to the similarities in the initial and current discount rates. In addition, as of March 31, 2014, the fair value of the senior unsecured notes approximated carrying value as the current borrowing rate approximated the debt instrument's actual interest rate. The fair value of trade accounts receivable and the senior unsecured notes was determined using significant unobservable inputs by performing a discounted cash flow analysis and using current discount rates as appropriate for each type of instrument.

The Company has short-term money market investments which are classified as cash and cash equivalents on the consolidated balance sheets. The fair value of these investments at March 31, 2014 and December 31, 2013 was measured based on quoted prices in active markets.

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Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Schedule of segment reporting information

Information on the reportable segments and a reconciliation of total segment revenues and gross (loss) profit to consolidated financial statements are presented below (in thousands):

		Three Months Ended
		March 31,
		2014			2013
Revenues
	Feature Films	$	110,097		$	78,546
	Television Series and Specials	17,969			19,368
	Consumer Products	12,067			27,484
	All Other	7,108			9,250
Total revenues		$	147,241		$	134,648
Gross (loss) profit(1)
	Feature Films	$	(25,388	)	$	25,950
	Television Series and Specials	5,759			4,917
	Consumer Products	6,004			18,428
	All Other	177			(168		)
Total gross (loss) profit		$	(13,448	)	$	49,127

____________________

⁽¹⁾  The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes.

Schedule of goodwill

The following table presents goodwill for each of the Company's reportable segments (in thousands):

	Feature Films		Television Series and Specials		Consumer Products		All Other			Total
Balance as of December 31, 2013	$	43,995	$	6,111	$	10,999	$	118,617		$	179,722
Measurement period adjustments related to the acquisition of ATV	—		—		—		(428		)	(428		)
Balance as of March 31, 2014	$	43,995	$	6,111	$	10,999	$	118,189		$	179,294

XML

Reportable Segments

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

During the three months ended September 30, 2013, the Company reorganized its internal management structure to align with changes in how it operates the business and evaluates financial performance of individual business units. As a result, there were changes to its operating segments and the Company has revised its segment information for prior periods to conform to the current presentation. The Company's current reportable segments are the following: Feature Films, Television Series and Specials and Consumer Products. Feature Films consists of the development, production and exploitation of feature films in the theatrical, television, home entertainment and digital markets. Television Series and Specials consists of the development, production and exploitation of television, direct-to-video and other non-theatrical content in the television, home entertainment and digital markets. Consumer Products consists of the Company's merchandising and licensing activities related to the exploitation of its intellectual property rights. Operating segments that are not separately reportable are categorized in "All Other" and include ATV and live performances.

Segment performance is evaluated based on revenues and gross profit. The Company does not allocate assets to each of its operating segments, nor does the Company's chief operating decision maker evaluate operating segments using discrete asset information. Information on the reportable segments and a reconciliation of total segment revenues and gross (loss) profit to consolidated financial statements are presented below (in thousands):

		Three Months Ended
		March 31,
		2014			2013
Revenues
	Feature Films	$	110,097		$	78,546
	Television Series and Specials	17,969			19,368
	Consumer Products	12,067			27,484
	All Other	7,108			9,250
Total revenues		$	147,241		$	134,648
Gross (loss) profit(1)
	Feature Films	$	(25,388	)	$	25,950
	Television Series and Specials	5,759			4,917
	Consumer Products	6,004			18,428
	All Other	177			(168		)
Total gross (loss) profit		$	(13,448	)	$	49,127

____________________

⁽¹⁾  The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes.

The following table presents goodwill for each of the Company's reportable segments (in thousands):

	Feature Films		Television Series and Specials		Consumer Products		All Other			Total
Balance as of December 31, 2013	$	43,995	$	6,111	$	10,999	$	118,617		$	179,722
Measurement period adjustments related to the acquisition of ATV	—		—		—		(428		)	(428		)
Balance as of March 31, 2014	$	43,995	$	6,111	$	10,999	$	118,189		$	179,294