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, 2015

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 17, 2015, there were77,895,892shares 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	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	47
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48
Item 5.	Other Information	48
Item 6.	Exhibits	49
SIGNATURES		50
EXHIBIT INDEX		51

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, 2015			December 31, 2014
	(in thousands, except par value and share amounts)
Assets
Cash and cash equivalents	$	89,662		$	34,227
Restricted cash	14,907			25,244
Trade accounts receivable, net of allowance for doubtful accounts (see Note 7 for related party amounts)	173,267			160,379
Receivables from distributors, net of allowance for doubtful accounts (see Note 7 for related party amounts)	214,672			271,256
Film and other inventory costs, net	830,692			827,890
Prepaid expenses	33,478			17,555
Other assets	47,406			40,408
Investments in unconsolidated entities	26,695			35,330
Property, plant and equipment, net of accumulated depreciation and amortization	164,171			180,607
Intangible assets, net of accumulated amortization	180,534			186,141
Goodwill	190,668			190,668
Total assets	$	1,966,152		$	1,969,705
Liabilities and Equity
Liabilities:
Accounts payable	$	9,781		$	9,031
Accrued liabilities	164,093			190,217
Payable to former stockholder	3,128			10,455
Deferred revenue and other advances	51,052			33,895
Revolving credit facility	80,000			215,000
Lease financing obligation	183,816			—
Senior unsecured notes	300,000			300,000
Deferred taxes, net	17,388			16,709
Total liabilities	809,258			775,307
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, 105,915,146and 105,718,014 shares issued, as of March 31, 2015 and December 31, 2014, respectively	1,059			1,057
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, 2015 and December 31, 2014	78			78
Additional paid-in capital	1,179,584			1,172,806
Accumulated other comprehensive loss	(2,637		)	(1,827		)
Retained earnings	708,007			762,784
Less: Class A Treasury common stock, at cost, 28,019,254 and 27,884,524 shares, as of March 31, 2015 and December 31, 2014, respectively	(780,554		)	(778,541		)
Total DreamWorks Animation SKG, Inc. stockholders' equity	1,105,537			1,156,357
Non-controlling interests	51,357			38,041
Total equity	1,156,894			1,194,398
Total liabilities and equity	$	1,966,152		$	1,969,705

See accompanying notes.

2

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended
	March 31,
	2015			2014
	(in thousands, except per share amounts)
Revenues (see Note 7 for related party amounts)	$	166,530		$	147,241
Operating expenses (income):
Costs of revenues	106,165			156,398
Selling and marketing	8,475			6,262
General and administrative	89,142			47,708
Product development	332			540
Other operating income (see Note 7 for related party amounts)	(2,281		)	(1,672		)
Operating loss	(35,303		)	(61,995		)
Non-operating income (expense):
Interest expense, net	(6,334		)	(1,773		)
Other (expense) income, net	(5,466		)	1,218
(Increase) decrease in income tax benefit payable to former stockholder	(25		)	927
Loss before loss from equity method investees and income taxes	(47,128		)	(61,623		)
Loss from equity method investees	6,362			3,260
Loss before income taxes	(53,490		)	(64,883		)
Provision (benefit) for income taxes	2,400			(22,467		)
Net loss	(55,890		)	(42,416		)
Less: Net (loss) income attributable to non-controlling interests	(1,113		)	520
Net loss attributable to DreamWorks Animation SKG, Inc.	$	(54,777	)	$	(42,936	)
Net loss per share of common stock attributable to DreamWorks Animation SKG, Inc.
Basic and diluted net loss per share	$	(0.64	)	$	(0.51	)
Shares used in computing net loss per share
Basic and diluted	85,615			84,484

See accompanying notes.

3

DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(Unaudited)

	Three Months Ended
	March 31,
	2015			2014
	(in thousands)
Net loss	$	(55,890	)	$	(42,416	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation (losses) gains	(810		)	132
Comprehensive loss	(56,700		)	(42,284		)
Less: Comprehensive (loss) income attributable to non-controlling interests	(1,113		)	520
Comprehensive loss attributable to DreamWorks Animation SKG, Inc.	$	(55,587	)	$	(42,804	)

See accompanying notes.

4

DREAMWORKS ANIMATION SKG, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
	Three Months Ended
	March 31,
	2015			2014
	(in thousands)
Operating activities
Net loss	$	(55,890	)	$	(42,416	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization and write-off of film and other inventory costs	93,352			145,412
Other impairments and write-offs	5,064			—
Amortization of intangible assets	3,977			3,154
Depreciation and amortization	13,374			1,081
Amortization of deferred financing costs	571			242
Stock-based compensation expense	4,399			5,309
Revenue earned against deferred revenue and other advances	(16,469		)	(16,188		)
Income related to investment contributions	(2,281		)	(1,672		)
Loss from equity method investees	6,362			3,260
Deferred taxes, net	679			(22,314		)
Changes in operating assets and liabilities:
Restricted cash	10,337			—
Trade accounts receivable	(16,704		)	(19,091		)
Receivables from distributors	54,648			79,267
Film and other inventory costs	(89,192		)	(122,837		)
Prepaid expenses and other assets	(20,387		)	(4,870		)
Accounts payable and accrued liabilities	(25,015		)	(48,594		)
Payable to former stockholder	(7,328		)	1,080
Income taxes payable/receivable, net	305			(658		)
Deferred revenue and other advances	41,760			27,348
Net cash provided by (used in) operating activities	1,562			(12,487		)
Investing activities
Investments in unconsolidated entities	(510		)	(7,000		)
Purchases of property, plant and equipment	(1,845		)	(5,711		)
Net cash used in investing activities	(2,355		)	(12,711		)
Financing activities
Proceeds from stock option exercises	—			261
Deferred financing costs	(5,729		)	—
Purchase of treasury stock	(2,013		)	(1,278		)
Contingent consideration payment	(335		)	—
Borrowings from revolving credit facility	340,405			—
Repayments of borrowings from revolving credit facility	(475,405		)	—
Proceeds from lease financing obligation	185,000			—
Repayments of lease financing obligation	(1,184		)	—
Capital contribution from non-controlling interest holder	15,000			—
Distributions to non-controlling interest holder	(571		)	—
Net cash provided by (used in) financing activities	55,168			(1,017		)
Effect of exchange rate changes on cash and cash equivalents	1,060			396
Increase (decrease) in cash and cash equivalents	55,435			(25,819		)
Cash and cash equivalents at beginning of period	34,227			95,467
Cash and cash equivalents at end of period	$	89,662		$	69,648
Non-cash investing activities:
Intellectual property and technology licenses granted in exchange for equity interest	$	2,225		$	1,294
Services provided in exchange for equity interest	55			383
Total non-cash investing activities	$	2,280		$	1,677
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes, net of amounts refunded	$	1,441		$	503
Cash paid during the period for interest, net of amounts capitalized	$	12,132		$	7,515

See accompanying notes.

5

DREAMWORKS ANIMATION SKG, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Business and Basis of Presentation

Business

The business of DreamWorks Animation SKG, Inc. ("DreamWorks Animation" or the "Company") is primarily devoted to the development, production and exploitation of animated films (and other audiovisual programs) and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising, licensing and other markets. The Company continues to expand its library and increase the value of its intellectual property assets by developing and producing new episodic series and other non-theatrical content 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 theatrically released during the five-year period beginning on January 1, 2013. As of July 1, 2014, Fox has also been licensed and engaged to render fulfillment services for the Company’s feature films theatrically released prior to January 1, 2013 in theatrical, non-theatrical, home entertainment and digital media. 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, subject to licenses approved by the Company during such period that extend beyond such period.

Also beginning in 2013, the Company's films are distributed in China and South Korea territories by separate distributors in each of these territories. 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 a subsidiary of Oriental DreamWorks Holding Limited ("ODW"), which is a related party.

Lastly, the Company continues to derive revenues from the distribution by Paramount Pictures Corporation, a subsidiary of Viacom Inc., and its affiliates (collectively, "Paramount") of its feature films released prior to January 1, 2013 pursuant to a distribution agreement and a fulfillment services agreement (collectively, the "Paramount Agreements"). As of July 1, 2014, the Company reacquired certain distribution rights to its feature films from Paramount, which rights have been licensed to Fox (as noted above). The amount paid to reacquire these rights was recorded as a definite-lived intangible asset (see Note 6). Paramount will continue to exploit and render fulfillment services in television and related media for feature films released prior to January 1, 2013 until the date that is 16 years after such film's theatrical release, and will continue to exploit and service certain other agreements with Paramount's sublicensees that remain in place after July 1, 2014.

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 ("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, 2015 and for the three months ended March 31, 2015 and 2014 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, 2014 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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, 2014 (the "2014 Form 10-K").

Except as described below, 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 deliveries of episodic content.

Reclassifications

Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the Company's 2015 presentation.

In addition, the Company has historically presented exploitation costs (e.g., advertising and marketing) that are directly attributable to its feature films, television series/specials or live performances as a component of costs of revenues. Due to the Company's continued business diversification efforts and the growth in the variety of business lines in which the Company now operates, the Company's advertising and marketing efforts have become less correlated with its various revenue streams. As a result, the Company has determined that it is more meaningful to present all marketing and distribution expenses incurred directly by the Company as a single line item in its statements of operations. Such selling and marketing expenses primarily consist of advertising and marketing costs, promotion costs, distribution fees and sales commissions to outside third parties. To conform to the new presentation, the Company's statements of operations now includes a line item entitled "selling and marketing expenses," which consist of certain (i) distribution expenses incurred directly by the Company that were previously classified in costs of revenues and (ii) general, non-direct advertising and marketing expenses previously classified in a line item entitled "selling, general and administrative expenses." Distribution and marketing expenses that are incurred by the Company's primary distributors (such as Fox and Paramount) are not included in this new line item because the Company records revenues from these distributors only after the distributors have recouped such costs (refer to the Company's significant accounting policies in Note 2 of the Company's 2014 Form 10-K for further information).

Further, given the nature of the Company's business, the Company has determined that consolidated "gross profit" is no longer a meaningful metric. In order to align the financial statement presentation with the nature of the Company's business, the Company will no longer present this line item in its statements of operations.

Revision

As discussed in the immediately preceding section, the Company's statements of operations presentation historically included advertising and marketing expenses directly attributable to its feature films, television series/specials or live performances in costs of revenues to arrive at "gross profit." As a result, advertising and marketing expenses were incorrectly included in the computation of "gross profit." Accordingly, the Company has revised its prior presentation of advertising and marketing expenses appearing in the accompanying financial statements by decreasing costs of revenues (with a corresponding increase in the new line item entitled "selling and marketing expenses") for the three months ended March 31, 2014 in the amount of $2.5 million. The Company assessed the materiality of this revision on previously issued financial statements and concluded that the revision was not material to the consolidated financial statements because, among other things, there was no impact on previously reported operating income or net income, for any period presented. The Company will continue to revise the classification of previously reported advertising and marketing expenses as they are reported in future quarterly and annual filings.

Segment Gross Profit

The Company continues to believe that advertising and marketing expenses directly attributable to its feature films or television series/specials are an important component in the evaluation of segment profitability. Accordingly, the Company's segment gross profit continues to include the advertising and marketing expenses, as well as other selling and distribution expenses, previously included within costs of revenues. This does not change the amounts of the previously reported segment profitability metric used by the Company's chief operating decision makers to review segment profitability. See Note 14 for the Company's reportable segment disclosures.

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Consolidation

The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animationand its wholly-owned and majority-owned subsidiaries.The Company 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, 2015, 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 remaining contributions (which represent the maximum exposure to the Company).

The Company also determined that the entity with which it entered into a lease financing obligation is a VIE (see Note 10). The Company concluded that it is not the primary beneficiary of this entity as it does not have the ability to influence or control the entity. As a result, this entity is not consolidated by the Company. The Company's maximum exposure is related to the Sharing Agreement (as further described in Note 10).

Restricted Cash

Restricted cash primarily represents cash accounts maintained by the ATV Joint Venture (refer to Note 3) in which the Company owns a 75% interest. Pursuant to the venture's operating agreement, $25.0 million of the initial cash contribution cannot be commingled with other corporate cash accounts and can only be used to fund the working capital of the ATV Joint Venture. As of March 31, 2015, the remaining balance of this restricted cash amount was $14.9 million.

Other

During the three months ended March 31, 2015, the Company and a third-party entered into agreements forming a new entity to commercialize one of the Company's technology initiatives. The new entity is majority-owned and controlled by the Company and, accordingly, is consolidated by the Company. The Company's consolidated financial statements include a cash contribution from the non-controlling interest holder in the amount of $15.0 million made at the time of formation of the new entity.

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 and television product;

• 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 the fair value of reporting units for purposes of testing goodwill for impairment;

• 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;

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

• 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.

2. Recent Accounting Pronouncements

In April 2015, the FASB issued an accounting standards update relating to the presentation of debt issuance costs. The accounting update requires companies to present debt issuance costs related to a recognized debt liability presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2016. The adoption of this guidance is expected to have an immaterial impact on the Company's consolidated financial statements.

In February 2015, the FASB issued an accounting standards update to amend existing guidance relating to the evaluation of certain legal entities for potential consolidation. The amendments modify the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities. In addition, the amendments modify the guidance on evaluating whether a fee paid to a decision maker or a service provider represents a variable interest and whether it should be included in the evaluation of the economics criterion in determining which party is the primary beneficiary of a VIE. In accordance with the accounting standards update, companies are required to reevaluate all legal entities that are considered VIEs to determine whether there is a change in the conclusion as to whether the VIE should be consolidated. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2016. The Company is currently evaluating the impact that the new standard will have on its consolidated financial statements.

In June 2014, the FASB issued an accounting standards update relating to the accounting for certain share-based awards. The accounting update states that, when the terms of an award provide that a performance target could be achieved after the requisite service period, the performance target should be treated as a performance condition that affects vesting and should not be reflected in the grant-date fair value. Companies are permitted to apply the guidance either prospectively to all awards granted or modified after the effective date or retrospectively to awards outstanding as of the beginning of the earliest annual period presented. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company adopted the new guidance upon issuance of the accounting standards update, which did not have an impact on its consolidated financial statements as the Company's existing accounting policy was already consistent with this guidance.

In May 2014, the FASB issued an accounting standards update to provide companies with a single model for use in accounting for revenue from contracts with customers. Once it becomes effective, the new guidance will replace most existing revenue recognition guidance in U.S. GAAP, including industry-specific guidance. The core principle of the model is to recognize revenue when control of goods or services transfers to the customer and in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services that have transferred. Under current U.S. GAAP, the Company recognizes revenue when the risks and rewards of ownership transfer to the customer. In addition, the new guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. The guidance is effective for the Company's fiscal year beginning January 1, 2017, including interim periods within that fiscal year. Early adoption is not permitted. However, on April 1, 2015, the FASB voted to propose a one-year deferral to the effective date, but to permit entities to adopt one year earlier if they choose (i.e., the original effective date). The proposal will be subject to the FASB's due process requirement, which includes a period for public comments. Companies are permitted to either apply the guidance retrospectively to all prior periods presented or, alternatively, apply the guidance in the year of adoption with the cumulative effect recognized at the date of initial application (referred to as the modified retrospective approach). The Company is in the process of determining the method of adoption, as well as evaluating the impact that the new standard will have on its consolidated financial statements.

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

3. Acquisitions

Recent Acquisitions

The Company entered into an Agreement and Plan of Merger and Reorganization (the "Big Frame Merger Agreement") pursuant to which, on April 7, 2014 (the "Big Frame Closing Date"), a wholly-owned subsidiary of the Company merged with and into Big Frame, Inc. ("Big Frame"). As a result of this transaction, Big Frame became a wholly-owned subsidiary of the Company. Big Frame is an online multi-channel network. The goodwill that resulted from the acquisition represents the potential synergies between Big Frame and the Company’s multi-channel network presence on the Internet and is not deductible for tax purposes.

On May 20, 2014, the Company acquired certain rights, properties and other items pertaining to Felix the Cat and related characters pursuant to an Asset Purchase Agreement. The acquisition was accounted for as a business combination due to the Company assuming certain licensing arrangements related to the rights. The goodwill that resulted from the acquisition represents potential synergies between the rights acquired and consumer product opportunities. The goodwill is deductible for tax purposes.

During the three months ended March 31, 2015, the Company identified measurement period adjustments to previous purchase accounting estimates for the acquisitions of Big Frame and Felix the Cat, which were primarily related to the finalization of net working capital adjustments. These adjustments were immaterial and applied retrospectively to the acquisition date. Accordingly, the Company's consolidated balance sheet as of December 31, 2014 has been adjusted to reflect the effects of the measurement period adjustments. As a result of the final purchase price allocations, the Company's total cash consideration for these two transactions totaled approximately $34.8 million and the primary assets acquired were identifiable intangible assets of $22.3 millionand resulting goodwill of $11.4 million. The results of operations for these two acquisitions have been included in the Company's consolidated financial statements since their respective closing dates and had an immaterial impact for the three months ended March 31, 2015.

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 AwesomenessTV, Inc. As a result of this transaction, ATV became a wholly-owned subsidiary of the Company. ATV is a multi-media platform company that generates revenues primarily from the production and distribution of content across a variety of channels including theatrical, home entertainment, television and online video-on-demand. 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 a part of the New Media segment.

Contingent Consideration

Pursuant to the Merger Agreement, the Company was originally required to make future cash payments to ATV's former stockholders as part of the total purchase price to acquire ATV. The contingent consideration was to be based on whether ATV increased 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 included, but were 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 estimated the fair value of contingent consideration using significant unobservable inputs ina Monte-Carlo simulation model and based 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 fluctuated if there were 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 were reflected in the Company's results of operations in the period that the change occurred.

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

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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 original Merger Agreement, the maximum contingent consideration that may be earned was $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. The change in estimate was recorded as a a component of general and administrative expenses in the consolidated statements of operations.

On December 11, 2014, the Company and the former ATV stockholders entered into an amendment to the Merger Agreement. The amendment provides for a fixed payment totaling $80.0 million to such stockholders in lieu of the contingent consideration specified in the Merger Agreement. As a result, the Company's contingent liability was reduced to zero and a gain in the amount of $6.8 million and $16.5 million for the three- and 12-month periods ended December 31, 2014, respectively, was recorded in the 2014 consolidated statements of operations as a change in fair value of contingent consideration.

Additionally, on December 11, 2014, the Company entered into a Unit Purchase Agreement (the "Unit Purchase Agreement") with an affiliate of Hearst Corporation ("Hearst"). Pursuant to the Unit Purchase Agreement, Hearst acquired a 25% equity interest in a newly formed joint venture ("ATV Joint Venture") conducting the ATV business for a purchase price of $81.25 million. The Company continues to retain control over ATV, and accordingly, the transaction (including the tax effect) was recorded within equity. The Company and Hearst plan to work together to support ATV's efforts to enter into new content channels, broaden its audience and expand its geographic reach. ATV will also gain access to Hearst's subscription video-on-demand technology.

4. Financial Instruments

The fair value of cash and cash equivalents, restricted cash, 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, 2015, 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, 2015, the fair value and the carrying value of the senior unsecured notes was $307.8 million and $300.0 million, respectively. As it relates to the Company's lease financing obligation, as of March 31, 2015, the fair value and the carrying value was $188.5 million and $183.8 million, respectively. The fair value of trade accounts receivable, the senior unsecured notes and the lease financing obligation 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, 2015 and December 31, 2014 was measured based on quoted prices in active markets.

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5. Film and Other Inventory Costs

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

	March 31, 2015		December 31, 2014
In release, net of amortization:
Feature films	$	454,158	$	392,186
Television series and specials	72,733		67,803
In production:
Feature films	146,574		206,240
Television series and specials	81,873		62,426
In development:
Feature films	63,979		88,200
Television series and specials	612		1,118
Product inventory and other(1)	10,763		9,917
Total film, television and other inventory costs, net	$	830,692	$	827,890

 ____________________

⁽¹⁾  As of March 31, 2015 and December 31, 2014, this category includes $6.5 million and $6.7 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution primarily in the home entertainment market.

The Company anticipates that approximately46% and 79%of the above "in release" film and other inventory costs as of March 31, 2015 will be amortized over the next 12 months and three years, respectively.

During the three months ended March 31, 2015, impairment charges recorded on film and other inventory costs were immaterial.

For the three months ended March 31, 2014, 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 as of March 31, 2014 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, the three-month period ended March 31, 2014 includes an impairment charge of $57.1 million.

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6. Intangible Assets

As of March 31, 2015 and December 31, 2014, intangible assets included $69.4 million of indefinite-lived intangible assets. In addition, intangible assets included 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, 2015:
Character rights	13.9	$	99,000	$	(16,381	)	$	(2,521	)	$	80,098
Distribution rights	11.2	30,000		(2,371		)	—			27,629
Programming content	2.0	11,200		(10,733		)	—			467
Trademarks and trade names	10.0	1,410		(251		)	—			1,159
Other intangibles	4.4	2,700		(919		)	—			1,781
Total		$	144,310	$	(30,655	)	$	(2,521	)	$	111,134
As of December 31, 2014:
Character rights	13.9	$	99,000	$	(15,101	)	$	(568	)	$	83,331
Distribution rights	11.2	30,000		(1,604		)	—			28,396
Programming content	2.0	11,200		(9,333		)	—			1,867
Trademarks and trade names	10.0	1,410		(216		)	—			1,194
Other intangibles	4.4	2,700		(747		)	—			1,953
Total		$	144,310	$	(27,001	)	$	(568	)	$	116,741

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, 2015	2015		2014
Oriental DreamWorks Holding Limited	45.45%	$	14,305	$	17,422
All Other(1)	17.5%-50.0%	11		6,029
Total equity method investments		14,316		23,451
Total cost method investments		12,379		11,879
Total investments in unconsolidated entities		$	26,695	$	35,330

____________________

⁽¹⁾   As of March 31, 2015, the Company determined that one of its equity method investments was impaired and that the carrying value would not be recoverable, primarily due to the Company's concerns related to the investee's financial condition. As a result, the Company determined that the fair value of the investment was zero and, accordingly, it recorded an impairment charge in the amount of $5.1 million related to such investment. Fair value was estimated using significant unobservable inputs.

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 Company's basis, with respect to the Company's investment in ODW, compared to the Company's share of venture-level equity), as well as contributions to

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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,
	2015		2014
Oriental DreamWorks Holding Limited(1)	$	5,398	$	2,210
All Other	964		1,050
Loss from equity method investees	$	6,362	$	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, 2014 to February 28, 2015.

The following table presents summarized financial information for the Company's equity method investees presented in the table above (in thousands):

	Three Months Ended
	March 31,
	2015		2014
Revenues	$	2,618	$	835
Costs of revenues	$	2,707	$	687
Net loss	$	14,506	$	6,774

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 $9.4 millionhad been funded as ofMarch 31, 2015, with the balance to be funded over time) and non-cash contributions valued at approximately $100.0 million (of which approximately $38.7 million had been satisfied as of March 31, 2015). 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, 2015 and 2014, the Company's consolidated statements of operations included other operating income recognized in connection with non-cash contributions made to ODW of $2.3 million and $1.7 million, respectively.

As of March 31, 2015, the Company's remaining contributions consisted of the following: (i) $40.6 million in cash (which is expected to be funded over the next three years), (ii) two of the Company's in-development film projects, (iii) remaining delivery requirements under the licenses of technology and certain other intellectual property of the Company and (iv) approximately$6.7 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):

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	March 31,			December 31,
	2015			2014
Company's venture-level equity	$	40,403		$	46,345
Technology and intellectual property licenses(1)	(10,489		)	(12,714		)
Other(2)	(15,609		)	(16,209		)
Total ODW investment recorded	$	14,305		$	17,422

____________________

⁽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 the Company's actual cost of providing such services. The Company's consolidated statements of operations included revenues earned through ODW's distribution of its feature films of $0.4 million and $0.7 million during the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015 and December 31, 2014, the Company's consolidated balance sheets included receivables from ODW of $8.3 million and $7.1 million, respectively, which were classified as a component of trade accounts receivable, and $19.7 million and $19.0 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, 2015		December 31, 2014
Employee compensation	$	64,281	$	67,084
Participations and residuals	50,574		50,646
Interest payable	2,715		7,951
Deferred rent	10,639		11,049
Other accrued liabilities	35,884		53,487
Total accrued liabilities	$	164,093	$	190,217

As of March 31, 2015, the Company estimates that over the next 12 months it will pay approximately$19.3 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, 2015 and December 31, 2014 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, 2015 and 2014 (in thousands):

					Amounts Earned
					Three Months Ended
	March 31,		December 31,		March 31,
	2015		2014		2015		2014(3)
Deferred Revenue(1)	$	23,693	$	1,074	$	118	$	5,908
Strategic Alliance/Development Advances(2)	417		1,667		7,684		7,138
Other	26,942		31,154		14,547		21,626
Total deferred revenue and other advances	$	51,052	$	33,895

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  ____________________

⁽¹⁾  Deferred revenue consists of those arrangements related to the licensing of content for distribution in the home entertainment, television and new media markets.

⁽²⁾  Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2015 and 2014, $4.0 million and $2.4 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.5 million and $1.0 million, respectively, were recorded as a reduction to other assets. During the three months ended March 31, 2015 and 2014, $0.9 million and $0.5 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.6 million and $1.1 million, respectively, were recorded as a reduction to operating expenses.

⁽³⁾  Of the total amounts earned in "Other," for the three months ended March 31, 2014, $14.0 million was recorded as a reduction to film and other inventory costs.

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. 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. Prior to February 20, 2015, the Company had a revolving credit facility with a number of banks which allowed the Company to borrow up to a maximum of $400.0 million ("Prior Credit Agreement"). On February 20, 2015, the Company and the facility banks amended and restated the Prior Credit Agreement by entering into an Amended and Restated Credit Agreement (the "Restated Credit Agreement"). The Restated Credit Agreement allows the Company to have outstanding borrowings of up to $450.0 million at any one time, on a revolving basis. The Company and one or more of the lenders may from time to time, so long as no default or event of default has occurred under the Restated Credit Agreement, agree to increase the commitments under the Restated Credit Agreement by up to $50.0 million.

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Under the Restated Credit Agreement, 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 Restated Credit Agreement also contains a sublimit for letters of credit. The Company is required to pay to the lenders under the Restated Credit Agreement a letter of credit participation fee equal to the applicable margin for LIBOR-based borrowings on the average daily undrawn amount of outstanding letters of credit and pay to each issuer of letters of credit a letter of credit fronting fee equal to 0.125% per annum on the average daily undrawn amount of outstanding letters of credit issued by such letter of credit issuer. The Restated Credit Agreement requires the Company to maintain a specified ratio of total debt to total capitalization, and limits the outstanding credit exposure under the Restated Credit Agreement to a specified ratio of net remaining ultimates to the outstanding credit exposure under the Restated Credit Agreement, plus an additional amount based on the valuation of the Company's film library. Subject to specified exceptions, the Restated 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 (including dividends), entering into transactions with affiliates, agreeing to negative pledge clauses and restrictions on subsidiary distributions, and modifying organizational documents. The obligations of the Company under the Restated Credit Agreement are guaranteed by substantially all the subsidiaries of the Company organized under the laws of the United States of America, and substantially all the tangible and intangible assets of the Company and such subsidiaries are pledged as collateral against borrowings under the Restated Credit Agreement.

Lease Financing Obligation. On February 23, 2015, the Company, as seller, entered into a purchase agreement (the "Glendale Purchase Agreement") with a third party buyer ("Landlord") involving the Company’s headquarters facility located in Glendale, California (the "Property"). The Property is comprised of, among other things, 10 buildings on approximately 14.7 acres of land. Pursuant to the Glendale Purchase Agreement, the Company sold the Property to Landlord for a purchase price of $185.0 million. In addition, the Company entered into a sharing agreement (the "Sharing Agreement") with the Landlord whereby the Company will either pay or receive 50% of the net appreciation or depreciation in the sale price of the Property if the Landlord sells the property to a third-party prior to February 23, 2016. If the Property is not sold by February 23, 2016, then the fair market value of the Property as of such date will be used to determine the net appreciation or depreciation in which the Company and the Landlord will share (up to a maximum payment of $10.0 million by either party).

Concurrently with the sale of the Property, the Company and Landlord entered into a lease agreement (the "Lease"), pursuant to which Landlord leased the Property to the Company commencing immediately following the consummation of the sale. Annual rent during the initial term of the Lease starts at approximately $13.2 million, and increases one and one-half percent each year. The initial term of the Lease is 20 years, and the Company has four consecutive renewal options of five years each. The first two of such renewal terms are subject to fixed rent increasing by one and one-half percent each year, and the rent during each of such last two renewal terms will be the greater of (i) the rent in effect immediately preceding such renewal term or (ii) the then-current fair market value rent. The Lease is structured as a "triple net" lease, meaning that the Company is responsible for all expenses arising from the use or operation of the Property, including repairs, maintenance, insurance and taxes. The Lease also contains provisions regarding the obligations of the Company and Landlord in connection with a casualty or condemnation of the Property. Other than a sale by the initial Landlord party to the Lease, if any subsequent landlord decides to sell or otherwise convey title to the Property to a third party during the term of the Lease, the Company shall have a right of first refusal to purchase the Property on the same terms offered to such third party.

The Company accounted for the sale and lease arrangement (as described above) as a financing transaction as it did not qualify for sale-leaseback accounting treatment because of the Company's continuing involvement through the Sharing Agreement. Under the financing accounting method, the Property assets remain on the Company's consolidated balance sheets and proceeds received by the Company are recorded as a financing liability. Payments under the Lease are applied as payments of deemed principal and imputed interest on the underlying financing obligation. The Company currently anticipates that this transaction will be classified as a sale and leaseback of the property upon completion of the requirements under the Sharing Agreement.

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As of March 31, 2015, payments required on the lease financing obligations were as follows (in thousands):

2015	$	8,780
2016	13,335
2017	13,535
2018	13,738
2019	13,944
2020 and thereafter	322,269
Total payments	385,601
Less: interest implicit in obligation	(201,785		)
Total lease financing obligation	$	183,816

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, 2015		December 31, 2014			Interest Rate at March 31, 2015	2015		2014
Senior Unsecured Notes	$	300,000	$	300,000	August 2020	6.875%	$	4,446	$	2,234
Revolving Credit Facility	$	80,000	$	215,000	February 2020	2.67%	$	1,340	$	375
Lease Financing Obligation	$	183,816	N/A		February 2035	6.70%	$	1,141	N/A

____________________

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, 2015 and 2014, the Company incurred interest costs totaling $8.5 million and $6.1 million, respectively, of which $1.0 million and $3.2 million, respectively, were capitalized to film costs.

As of March 31, 2015, 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, adjusted for the tax effects of items that relate discretely to the interim period, if any. However, if minor changes to forecasted annual pre-tax earnings have a significant effect on the estimated annual effective tax rate, the Company may determine that this method would not be appropriate and that a different method should be applied. Furthermore, 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 (refer to the Company's 2014 Form 10-K for a more detailed description). The Company is obligated to remit to the affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax, California franchise tax and certain other related tax benefits. Due to the effect of this arrangement on the Company's provision for income taxes, the Company also combines the effect of the increase/decrease in income tax benefit payable to former stockholder (referred to as the combined effective tax rate).

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The Company utilized the annual effective tax rate method (as described above) to calculate the income tax provision for the three months ended March 31, 2015. However, as it relates to 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 period method, the Company determines the income tax provision based upon actual results as if the interim period were an annual period.

For the three months ended March 31, 2015, the Company recorded a provision for income taxes of $2.4 million, or an effective tax rate of (4.5)%. For the three months ended March 31, 2015, the Company's combined effective tax rate was also (4.5)%. For the three months ended March 31, 2014, the Company recorded a benefit for income taxes of $22.5 million, or an effective tax rate of 34.1%. However, the combined effective tax rate for the three months ended March 31, 2014 was 35.5%. The effective tax rate and the combined effective tax rate for the three months ended March 31, 2015 was primarily attributable to foreign taxes, as well as the effect of a valuation allowance. The difference in the Company's effective tax rate and combined effective tax rate for the three months ended March 31, 2015 compared to the rates during the three months ended March 31, 2014 was primarily due to the valuation allowance established, during the three months ended December 31, 2014, against the Company's deferred tax assets.

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 2009 remain open to audit. The Company's India subsidiary's income tax returns are currently under examination for the tax years ended March 31, 2012 through 2013.

12. Stockholders’ Equity and Non-controlling Interests

Class A Common Stock

Stock Repurchase Program.  In July 2010, the Company's Board of Directors authorized a 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, 2015 and 2014, the Company did not repurchase any shares of its Class A Common Stock. As of March 31, 2015, 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 are presented as a separate component of equity. A non-controlling interest represents the other equity holder's interest in a joint venture that the Company consolidates. The net income or loss 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, 2015 and 2014 (in thousands):

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 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	DreamWorks Animation SKG, Inc. Stockholders' Equity			Non-controlling Interests			Total Equity
Balance as of December 31, 2014	$	1,156,357		$	38,041		$	1,194,398
Stock-based compensation	6,780			—			6,780
Purchase of treasury shares	(2,013		)	—			(2,013		)
Foreign currency translation adjustments	(810		)	—			(810		)
Capital contribution from non-controlling interest holder	—			15,000			15,000
Distributions to non-controlling interest holder	—			(571		)	(571		)
Net loss	(54,777		)	(1,113		)	(55,890		)
Balance as of March 31, 2015	$	1,105,537		$	51,357		$	1,156,894
Balance as of December 31, 2013	$	1,404,795		$	1,224		$	1,406,019
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

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 and is adjusted to reflect the estimated probability of vesting. 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 (for example, during the year ended December 31, 2014, the Company granted awards that vest only if the Company achieves positive earnings before interest and taxes for the year ending December 31, 2015). 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, 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, 2015 and 2014, respectively, were as follows (in thousands):

	Three Months Ended
	March 31,
	2015		2014
Total stock-based compensation	$	4,399	$	5,309
Tax impact(1)	198		(1,885		)
Reduction in net income, net of tax	$	4,597	$	3,424

 ____________________

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

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 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Stock-based compensation cost capitalized as a part of film costs was $2.3 million and $3.7 million for the three-month periods ended March 31, 2015 and 2014, 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, 2015 and 2014:

	Three Months Ended
	March 31,
	Number Granted	Weighted Average Grant-Date Fair Value
	(in thousands)
2015
Restricted stock units	777	$	21.41
2014
Restricted stock and restricted stock units	224	$	29.91

As of March 31, 2015, 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 $72.5 million and will be amortized on a straight-line basis, or using a graded-attribution method for certain performance-based awards, over a weighted average period of 1.9 years.

14. Reportable Segments

The Company's current reportable segments are the following: Feature Films, Television Series and Specials, Consumer Products and New Media. Each segment is a strategic business unit that offers different products and services and is managed separately. 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. New Media consists of the Company's ATV and related businesses (which was previously not a reportable segment). This segment primarily generates revenues from the production and distribution of content across a variety of channels, including theatrical, home entertainment, television and online video-on-demand, and the exploitation of ancillary products and services, including marketing and consumer products. Operating segments that are not separately reportable are categorized in "All Other."

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

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 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

		Three Months Ended
		March 31,
		2015			2014
Revenues
	Feature Films	$	128,020		$	110,097
	Television Series and Specials	18,013			17,969
	Consumer Products	15,116			12,067
	New Media	4,583			4,093
	All Other	798			3,015
Total consolidated revenues		$	166,530		$	147,241
Segment gross profit (loss)(1)
	Feature Films	$	40,977		$	(25,388	)
	Television Series and Specials	3,451			5,759
	Consumer Products	6,538			6,004
	New Media	2,115			(80		)
	All Other	495			257
Total segment gross profit (loss)		$	53,576		$	(13,448	)
Reconciliation to consolidated loss before income taxes:
	Selling and marketing expenses(2)	1,686			1,971
	General and administrative expenses	89,142			47,708
	Product development expense	332			540
	Other operating income	(2,281		)	(1,672		)
	Non-operating expenses (income)	11,825			(372		)
	Loss from equity method investees	6,362			3,260
Total consolidated loss before income taxes		$	(53,490	)	$	(64,883	)

____________________

⁽¹⁾  The Company defines segment gross profit as segment revenues less segment costs of revenues (which is comprised of costs of revenues and certain costs classified as a component of "selling and marketing" in its statements of operations). Refer to Note 1 for further information related to changes made to the Company's statement of operations presentation.

⁽²⁾  Represents certain selling and marketing expenses that are not included as a component of segment gross profit due to the general nature of such expenses.

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

	Feature Films		Television Series and Specials		Consumer Products		New Media		Total
Balance as of March 31, 2015 and December 31, 2014	$	43,995	$	6,111	$	12,219	$	128,343	$	190,668

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 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

15. Related Party Transactions

Transactions with ODW

During the three months ended March 31, 2015, 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 (including its subsidiaries) make payments to each other in connection with the licensing of music that is owned by the other company. In addition, UMG serves as the Company's music publisher. Finally, UMG and ATV have formed joint ventures related to the music business. As it relates to these arrangements, for the three months ended March 31, 2015 and 2014, revenues recognized were not material. As of March 31, 2015 and December 31, 2014, the Company's deferred revenue and other advances (see Note 9) included a cash advance received of approximately $5.0 million, related to music licensing revenues.

Transactions with Vessel

One of the Company's directors, Jason Kilar, is the chief executive officer and a significant stockholder in Vessel, a start-up subscription Internet video service company. Vessel has entered into (and is expected to continue to enter into) content and referral agreements with clients of ATV. The agreements in effect provide for minimum payments during the next three years to ATV clients, with additional payments depending on applicable advertising and subscription revenues. Although ATV is not a party to these agreements, it will receive a percentage of the amounts paid to its clients under the terms of its arrangements with its individual clients. During the three months ended March 31, 2015, amounts received under these arrangements were immaterial.

16. Concentrations of Credit Risk

A substantial portion of the Company's revenue is derived directly from the Company's primary third-party distributors, Fox and Paramount. Fox represented approximately 26% and 14% of total revenue for the three-month periods ended March 31, 2015 and 2014, respectively. Paramount represented approximately 11% and 28% of total revenue for the three-month periods ended March 31, 2015 and 2014, respectively. In addition, during the three months ended March 31, 2015 and 2014, 44% and 41%, respectively, of the Company's revenues were earned through license arrangements with Netflix, Inc. ("Netflix").

As of March 31, 2015 and December 31, 2014, approximately 65% and 49%, respectively, of the Company's trade accounts receivable balance consisted of long-term receivables related to licensing arrangements with Netflix.

17.Commitments and Contingencies

Legal Proceedings

Shareholder Class Action and Derivative Lawsuits. In August 2014, two putative shareholder class action lawsuits alleging violations of federal securities laws were filed against the Company and several of its officers and directors in the U.S. District Court for the Central District of California. These lawsuits have been consolidated and generally assert that, between October 29, 2013 and July 29, 2014, the Company and certain of its officers and directors made alleged material misstatements and omissions regarding the financial performance of Turbo. In September 2014, a putative shareholder derivative action was filed in the U.S. District Court for the Central District of California against the Company (nominally and in a derivative capacity) and several of its officers and directors for alleged violations of fiduciary duties to the Company for, among other things, permitting the Company to issue alleged material misstatements and omissions regarding the financial performance of Turbo. This lawsuit generally asserts, purportedly on the Company's behalf, the same underlying factual allegations as those made in the class action lawsuits discussed above and has been deemed a related case. These lawsuits seek to recover damages on behalf of shareholders as well as other equitable and unspecified monetary relief. On April 1, 2015, the court granted the Company's motion to dismiss the consolidated securities class action lawsuit, with leave to amend. On April 16, 2015, the

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

plantiffs informed the Company that they had elected not to amend their complaint, and the case was dismissed on April 24, 2015. The derivative class action has not been dismissed. The Company intends to vigorously defend against these lawsuits. At this time the Company is unable to reasonably predict the ultimate outcome of the lawsuits, nor can it reasonably estimate a range of possible loss.

Antitrust Class Action. In September and October 2014, three putative class action lawsuits alleging violations of federal and state antitrust laws were filed against the Company and various other companies in the U.S. District Court for the Northern District of California. These lawsuits have been consolidated and generally assert that the defendants agreed to restrict competition through non-solicitation agreements and agreements to fix wage and salary ranges. The lawsuits seek to recover damages on behalf of all persons who worked for the defendants at any time from 2004 to the present. The Company intends to vigorously defend against these lawsuits. At this time the Company is unable to reasonably predict the ultimate outcome of these lawsuits, nor can it reasonably estimate a range of possible loss.

Other Legal Matters. 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 (other than those previously described) are likely to have a material effect on its financial position, results of operations or cash flows.

Other Commitments and Contingencies

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.

18. Earnings Per Share Data

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

	Three Months Ended
	March 31,
	2015			2014
Numerator:
Net loss attributable to DreamWorks Animation SKG, Inc.	$	(54,777	)	$	(42,936	)
Denominator:
Weighted average common shares and denominator for basic and diluted calculation:
Weighted average common shares outstanding	85,734			84,588
Less: Unvested restricted stock	(119		)	(104		)
Denominator for basic and diluted calculation	85,615			84,484
Net loss per share—basic and diluted	$	(0.64	)	$	(0.51	)

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. Due to the Company's loss for each of the three-month periods ended March 31, 2015 and 2014, all potential common stock equivalents are anti-dilutive.

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

	Three Months Ended
	March 31,
	2015	2014
Options to purchase shares of common stock and restricted stock awards	1,135	344
Stock appreciation rights	—	24
Total	1,135	368

The following table sets forth (in thousands) the number of equity awards that are contingently issuable (assuming the required performance conditions had been satisfied as of the dates shown in the table) and that could potentially dilute earnings per share in future periods provided that the Company has net income:

	Three Months Ended
	March 31,
	2015	2014
Options to purchase shares of common stock and restricted stock awards	1,372	941

19. Restructuring and Related Charges

2015 Restructuring Plan

On January 22, 2015, the Company announced its restructuring initiatives (the "2015 Restructuring Plan") that are intended to refocus the Company's core feature animation business. In connection with the 2015 Restructuring Plan, the Company made changes in its senior leadership team and also made changes based on its reevaluation of the Company's feature film slate. The 2015 Restructuring Plan activities resulted, or will result, in charges related to employee-related costs resulting from headcount reductions, lease obligations and other costs associated with the closure of one of the Company's facilities, accelerated depreciation and amortization charges, write-offs related to the recoverability of capitalized costs for certain unreleased productions and other contractual obligations. Certain of these costs were incurred during the three months ended December 31, 2014. The Company expects that the remaining costs will be primarily incurred during the year ending December 31, 2015, primarily related to relocation and contractual obligations. The actions associated with the restructuring plan primarily impact the Feature Film segment and are expected to be substantially completed during 2015.

Impact to 2015 Financial Results

For the three months ended March 31, 2015, the Company incurred charges for the Company's 2015 Restructuring Plan as follows (in thousands):

	Three Months Ended
	March 31, 2015
Employee termination costs	$	4,587
Relocation and other employee-related costs	1,496
Accelerated depreciation and amortization charges	9,279
Total restructuring and related charges	$	15,362

Employee termination costs consist of severance and benefits (including stock-based compensation) which are accounted for based on the type of employment arrangement between the Company and the employee. Certain of these arrangements include obligations that are accounted for as non-retirement postemployment benefits. The Company also employs individuals under employment contracts. Charges related to non-retirement postemployment benefits and amounts due under employment contracts for employees who will no longer provide services are accrued when probable and estimable. Severance and benefit costs related to all other employees are accounted for in accordance with accounting guidance on costs associated with exit or disposal activities. Such costs were recorded during the three months ended March 31, 2015 as this was the period in which the terms of the restructuring plan had been established, management with the appropriate authority committed to the plan and communication to employees had occurred. Such costs are classified in general and administrative

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DREAMWORKS ANIMATION SKG, INC.

 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

expenses in the Company's consolidated statements of operations. During the three months ended March 31, 2015, employee termination costs included approximately 160 additional employees. As a result, cumulative employee termination costs related to the 2015 Restructuring Plan were attributable to approximately 500 employees.

Relocation and other employee-related costs primarily consist of costs to relocate employees from the Company's Northern California facility to its Southern California facility. Such costs are expensed as incurred and are classified within general and administrative expenses.

Accelerated depreciation and amortization charges for the 2015 Restructuring Plan were determined in accordance with FASB guidance on accounting for the impairment or disposal of long-lived assets. The estimated useful lives of certain property, plant and equipment changed as a result of the Company’s decision to exit its Northern California facility. Such costs are classified within general and administrative expenses.

Liability Rollforward

The following table represents a rollforward of the liability incurred for employee termination benefits (excluding stock-based compensation) in connection with the 2015 Restructuring Plan (in thousands):

	Employee Termination Benefits
Balance at December 31, 2014	$	36,808
Costs incurred	10,286
Changes in estimate	(5,036		)
Payments and other	(6,568		)
Balance at March 31, 2015	$	35,490

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, 2014 (the "2014 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 2014 Form 10-K and Current Reports on Form 8-K, before deciding to purchase, hold or sell our common stock.

Management Overview

The following is a summary of the significant items that affected our financial results for the three months ended March 31, 2015:

• During the three months ended March 31, 2015, we incurred a net loss (excluding net loss attributable to non-controlling interests) of $54.8 million, or a loss of $0.64 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, 2015, we released our feature film Home, which contributed revenues to the Feature Films and Consumer Products segments totaling $3.1 million. A discussion of the revenues generated from this film is provided in the section entitled "—Overview of Financial Results—Revenues and Segment Costs of Revenues—Feature Films Segment—Current year theatrical releases."

• As a result of our 2015 Restructuring Plan (as described below, as well as described in Note 19 to the unaudited consolidated financial statements contained elsewhere in this Form 10-Q), we incurred restructuring and restructuring-

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related charges totaling $15.4 million related to employee termination and other employee-related costs and accelerated depreciation and amortization charges. In addition, we incurred incremental costs related to additional labor and other excess costs in order to execute the restructuring plans totaling $16.5 million. Further discussion is provided in the section entitled "—Overview of Financial Results—General and Administrative."

• During the three months ended March 31, 2015, we sold our headquarters facility for a purchase price of $185.0 million. Concurrent with the sale of the facility, we entered into a lease agreement with the seller pursuant to which we leased the facility back commencing immediately following the consummation of the sale. This transaction was accounted for under the financing method and was classified as a lease financing obligation on our consolidated balance sheets due to our continuing involvement in the property through a sharing agreement (as further described in Note 10 to our unaudited consolidated financial statements contained elsewhere in this Quarterly Report). We currently anticipate that this transaction will be classified as a sale and leaseback of the property upon completion of the requirements under the sharing agreement.

We have historically presented exploitation costs (e.g., advertising and marketing) that are directly attributable to our feature films, television series/specials or live performances as a component of costs of revenues. Due to our continued focus on business diversification and the growth in the variety of business lines in which we now operate, our advertising and marketing efforts have become less correlated with our various revenue streams. We have determined that it is more meaningful to present all marketing and other distribution expenses as a single line item in our statements of operations. For a description of these expenses, see "—Our Revenues and Costs—Our Costs—Selling and Marketing Expenses." 

As disclosed in Note 1 to the unaudited consolidated financial statements contained elsewhere in this Form 10-Q, our statements of operations presentation historically reflected exploitation costs in costs of revenues to arrive at "gross profit." We have revised our statements of operations presentation to remove advertising and marketing expenses from costs of revenues. However, we continue to believe that advertising and marketing expenses directly attributable to our feature films or television series/specials are an important component in our evaluation of segment profitability. Accordingly, our segment gross profit continues to include the advertising and marketing expenses, as well as other selling and distribution expenses, previously included within costs of revenues. This does not change the amounts of the previously reported segment profitability metric used by the Company's chief operating decision makers to review segment profitability. See Note 1 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report for further details of these presentation changes.

2015 Restructuring Plan

On January 22, 2015, we announced our restructuring initiatives (the "2015 Restructuring Plan") that are intended to refocus the Company's core feature animation business. In connection with the 2015 Restructuring Plan, we made changes in our senior leadership team and also made changes based on our reevaluation of our feature film slate. We expect that the 2015 Restructuring Plan activities will result in charges related to employee-related costs resulting from headcount reductions of approximately 500 employees, lease obligations and other costs associated with the closure of our Northern California facility, accelerated depreciation and amortization charges, write-offs related to the recoverability of capitalized costs for certain unreleased productions and other contractual obligations. Certain of these costs were incurred during the three months ended December 31, 2014. In aggregate, we expect to make cash payments totaling approximately $104.3 million related to our 2015 Restructuring Plan, comprised primarily of (i) severance, benefits and contractual obligations and (ii) excess labor costs. We expect that the remaining costs will be primarily incurred during the year ending December 31, 2015. We expect to make cash payments of approximately $73.5 million related to severance, benefits and contractual obligations, of which $15.1 million had been paid as of March 31, 2015. We expect to pay an additional $40.7 million related to such items during the nine months ending December 31, 2015, with the remainder of such expenses primarily being paid in 2016. We also expect to make aggregate cash payments of $30.8 million associated with excess labor costs (further described below). During the three months ended March 31, 2015, we paid approximately $14.1 million related to excess labor costs. We expect to pay an additional $16.7 million related to excess labor, which will primarily be paid during the nine months ending December 31, 2015. The actions associated with the restructuring plan are expected to be substantially completed during 2015.

The following table summarizes the costs that we incurred during the three months ended March 31, 2015, the remaining costs we expect to incur in order to execute upon our 2015 Restructuring Plan, as well as amounts previously incurred (in millions):

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	Three Months Ended		Future		Incurred through
	March 31, 2015		Periods		December 31, 2014
Employee termination costs	$	4.6	$	—	$	43.4
Relocation and other employee-related costs	1.5		5.5		—
Lease obligations and related charges	—		6.7		—
Accelerated depreciation and amortization charges	9.3		10.0		—
Film and other inventory write-offs	—		—		155.5
Other contractual obligations	—		—		11.2
Additional labor and other excess costs	16.5		21.8		—
Total restructuring and related charges	$	31.9	$	44.0	$	210.1

Employee Termination Costs. Employee termination costs consist of severance and benefits (including stock-based compensation) which are accounted for based on the type of employment arrangement between the Company and the employee. Certain of these arrangements include obligations that are accounted for as non-retirement postemployment benefits. We also employ individuals under employment contracts. Charges related to non-retirement postemployment benefits and amounts due under employment contracts for employees who will no longer provide services are accrued when probable and estimable. Severance and benefit costs related to all other employees are accounted for in accordance with accounting guidance on costs associated with exit or disposal activities. Such costs were recorded during the three months ended March 31, 2015, which is the period in which the terms of the restructuring plan had been established, management with the appropriate authority committed to the plan and communication to employees had occurred. Such costs are classified within general and administrative expenses.

Relocation and Other Employee-Related Costs. Relocation and other employee-related costs primarily consist of expected costs to relocate employees from our Northern California facility to our Southern California facility. Such costs are expensed as incurred and will be primarily incurred during the year ending December 31, 2015. Such costs are classified within general and administrative expenses.

Lease Obligations and Related Charges. Lease obligations and related charges largely consist of remaining rent payments that we expect to incur prior to exiting our Northern California facility. We expect that these charges will be incurred during the years ending December 31, 2015 and 2016. Such costs will be classified within general and administrative expenses.

Accelerated Depreciation and Amortization Charges. Accelerated depreciation and amortization charges consist of our estimate of the incremental charges we expect to incur as a result of shortened estimated useful lives of certain property, plant and equipment as a result of the decision to exit our Northern California facility. We expect that these charges will primarily be incurred during the year ending December 31, 2015. Such costs are classified within general and administrative expenses.

Film and Other Inventory Write-Offs. Film and other inventory write-offs (as presented in the table above) consist of capitalized production costs for unreleased titles that were written-off due to our decision to change our future film slate, change our creative leadership, abandon certain projects and change creative direction on certain titles. Such costs are classified within costs of revenues.

Other Contractual Obligations. Other contractual obligations consist of amounts due to third parties as a result of the changes made to the Company's film slate. Such costs are classified within selling and marketing or general and administrative expenses.

Additional Labor and Other Excess Costs. We have incurred, and we anticipate that we will continue to incur, additional costs primarily related to excess staffing in order to execute the restructuring plans specifically related to changes in the feature film slate. These additional labor costs are incremental to our normal operating charges and are expensed as incurred. In addition, we expect to incur excess costs due to the closure of our Northern California facility and primarily relate to costs that we expect to incur to continue to operate the facility until we exit the facility. These costs have historically been included in capitalized overhead but are now expensed as incurred. We expect that additional labor and other excess costs will primarily be incurred during the year ending December 31, 2015. Such costs are classified within general and administrative expenses.

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Our Business

Our business is primarily devoted to the development, production and exploitation of animated feature films (and other audiovisual programs) and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising, licensing and other markets. We continue to expand our library and increase the value of our intellectual property assets by developing and producing new episodic series and other non-theatrical content based on characters from our feature films. In addition, we have an extensive library of other intellectual property rights through our acquisition of Classic Media, which can be exploited in various markets. Our activities also include technology initiatives as we explore opportunities to exploit our internally developed software.

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 2014 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 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 among 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 70% of our worldwide box office receipts and 61% of our feature film revenue from foreign countries. 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, see "Part II—Item 7A—Quantitative and Qualitative Disclosures About Market Risk—Market and Exchange Rate Risk—Foreign Currency Risk" of our 2014 Form 10-K.

Television Series and Specials

Our business activities also include the development, production and exploitation of episodic series, 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. We entered into long-term agreements with Netflix in June 2013, in May 2014 with the German television network SuperRTL and, in February 2014, with southern European media company Planeta Junior regarding the production and distribution of existing and future episodic series. Each agreement provides for us to deliver over 1,000 episodes of newly created series based on our properties, including characters from the Classic Media library. 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. Additionally, we have entered into agreements for the distribution of our episodic series content with media companies in countries not covered by the Netflix and SuperRTL arrangements.

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As a result of our agreement with Netflix (as described above), we are currently developing and producing original episodic content in order to fulfill our obligations under the agreement. In cases where a series is based on characters from one of our feature films, a portion of the third-party revenues generated by the new series is allocated to the feature film title from which the series originated. This revenue allocation represents a license fee charged to the series for use of intellectual property derived from the related feature film.

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. Direct-to-video revenue is recognized when risk of inventory loss has transferred. Direct-to-video revenue is recorded net of estimated returns and rebates.

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.

Due to the significant expansion of our merchandising and licensing activities, we have made a strategic shift in our business such that some of our consumer product programs are becoming perennial rather than focused on specific events, such as film or DVD releases. Consumer product revenues derived from our franchise properties (e.g., Shrek and Madagascar) are allocated to individual titles based on the time period surrounding a title's initial release. Consumer product revenues earned in periods significantly after initial release are attributed to the franchise's brand and not an individual title.

New Media

Our New Media segment consists of our ATV and related businesses (which historically had been included within our All Other segment). We acquired ATV in May 2013. ATV generates revenues primarily from the production and distribution of content across a variety of channels, including theatrical, home entertainment, television and online video-on-demand, and the exploitation of ancillary products and services, including marketing and consumer products.

In December 2014, we entered into an agreement with an affiliate of Hearst, whereby Hearst acquired a 25% equity interest in a newly formed joint venture ("ATV Joint Venture") conducting the ATV business. We consolidate the results of the ATV Joint Venture as we are the controlling party. The Company and Hearst expect to work together to support ATV efforts to enter into new content channels, broaden its audience and expand its geographic reach. ATV will also gain access to Hearst’s subscription video-on-demand platform.

All Other

Revenue streams generated by all other segments are related to our live performances and other ancillary revenues. 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.

Our Costs

Costs of Revenues

Our costs of revenues primarily include the amortization of capitalized costs related to feature films and television series/specials (which consist of production, overhead and interest costs), participation and residual costs for our feature films and television series/specials and write-offs of amounts previously capitalized for titles not expected to be released or released titles not expected to recoup their capitalized costs. Below is a description of our costs of revenues by segment.

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.

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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). We also use a third-party, ANConnect (formerly, 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 include costs related to physical inventory sales.

Consumer Products. Costs of revenues associated with our Consumer Products segment are primarily related to the portion of amortization of capitalized costs of our film and television series/specials, as well as amortization of certain intangible assets, associated with consumer product and licensing revenues. Costs of revenues also include participation costs.

New Media. Costs of revenues associated with our New Media segment are those attributable to ATV and related businesses. Such costs are primarily related to the amortization of content production costs.

All Other. All Other costs of revenues include those attributable to our live performance business (excluding consumer product revenues which are included in the Consumer Products segment) and costs related to ancillary revenue streams.

Segment Costs of Revenues

Costs of revenues (as previously described) and selling, marketing and other distribution expenses directly attributable to our segments are the components that comprise our "segment costs of revenues" to arrive at segment profitability ("segment gross profit"). See Note 14 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report for a reconciliation of segment gross profit to income before income taxes.

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 generally occurs in the quarter of a film's initial theatrical release. For example, in the quarter ended March 31, 2014, we recorded an impairment charge of $57.1 million with respect to our film Mr.Peabody and Sherman, which was released in March 2014. We may also from time to time observe indicators of impairment subsequent to a film’s initial worldwide theatrical release, such as lower-than-expected performance in home entertainment and other post-theatrical markets, which result in a reduction in our estimate of a film’s Ultimate Revenues and may result in an impairment of the film in periods following its initial theatrical release. For example, Turbo wasinitially released in July 2013 in the domestic theatrical market and we recorded an impairment charge on the film during the quarter ended December 31, 2013.

As it relates to titles that have been impaired, additional impairments may be subsequently recorded if the uncertain components of our future revenues associated with those titles (e.g., those related to home entertainment sales) do not materialize as currently expected. For example, in November 2014, we released The Penguins of Madagascar into the domestic

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theatrical marketand performance has been below our forecast. As a result, during the quarter ended December 31, 2014, we recorded an impairment charge in the amount of $30.3 million. As of March 31, 2015, remaining unamortized capitalized production costs related to The Penguins of Madagascar were approximately $89.3 million. A reduction of 10% in our estimated future variable revenues attributable to The Penguins of Madagascar would result in an additional impairment charge of approximately $1.0 million to $5.0 million.

Selling and Marketing Expenses

Beginning with the quarter ended September 30, 2014, our statements of operations now include a financial statement line item titled "Selling and Marketing" (see "—Management Overview" and Note 1 of the unaudited consolidated financial statements contained elsewhere in this Quarterly Report for further information).

Selling and marketing expenses primarily consist of advertising and marketing costs, promotion costs, distribution fees and sales commissions to outside third parties. Generally, given the structure of our feature film distribution arrangements, we do not incur distribution and marketing costs or third-party distribution and fulfillment service fees associated with our feature films. Distribution and marketing costs associated with the exploitation of our feature films would be included in selling and marketing expenses to the extent that we caused our distributors to make additional expenditures in excess of mutually agreed amounts. Our television series and specials are typically not subject to the same distribution agreements as our feature films, and accordingly, selling and marketing expenses include distribution and marketing costs directly incurred by us.

General and Administrative Expenses

Our 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, 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 general and administrative expenses also include restructuring and restructuring-related charges.

Product Development Expenses

Product development expenses primarily consist of research and development costs related to our technology.

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.

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)
	2015			2014(1)			$ Change			% Change
	(in millions, except percentages and per share data)
Revenues	$	166.5		$	147.2		$	19.3		13.1	%
Operating expenses (income):
Costs of revenues	106.2			156.4			(50.2		)	(32.1	)%
Selling and marketing	8.5			6.2			2.3			37.1	%
General and administrative	89.1			47.7			41.4			86.8	%
Product development	0.3			0.5			(0.2		)	(40.0	)%
Other operating income	(2.3		)	(1.7		)	0.6			35.3	%
Operating loss	(35.3		)	(61.9		)	(26.6		)	(43.0	)%
Non-operating income (expense):
Interest expense, net	(6.3		)	(1.8		)	4.5			NM
Other (expense) income, net	(5.5		)	1.2			(6.7		)	NM
(Increase) decrease in income tax benefit payable to former stockholder	—			0.9			(0.9		)	(100.0	)%
Loss before loss from equity method investees and income taxes	(47.1		)	(61.6		)	(14.5		)	(23.5	)%
Loss from equity method investees	6.4			3.3			3.1			93.9	%
Loss before income taxes	(53.5		)	(64.9		)	(11.4		)	(17.6	)%
Provision (benefit) for income taxes	2.4			(22.5		)	24.9			NM
Net loss	(55.9		)	(42.4		)	13.5			31.8	%
Less: Net (loss) income attributable to non-controlling interests	(1.1		)	0.5			(1.6		)	NM
Net loss attributable to DreamWorks Animation SKG, Inc.	$	(54.8	)	$	(42.9	)	$	11.9		27.7	%
Diluted net loss per share attributable to DreamWorks Animation SKG, Inc.	$	(0.64	)	$	(0.51	)	$	0.13		25.5	%
Shares used in computing diluted net loss per share	85.6			84.5						1.3	%

____________________

NM: Not Meaningful.

⁽¹⁾  Our results for the three months ended March 31, 2014 included write-downs of film costs totaling $57.1 million. See "—Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014—Revenues and Segment Costs of Revenues—Feature Films Segment" for further details.

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Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014

The following chart sets forth (in millions, except percentages), 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 exploitation of feature films in the theatrical, television, home entertainment and digital markets. "Television Series and Specials" consists of revenues attributable to the 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. "New Media" consists of revenues attributable to ATV and related businesses. "All Other" consists of revenues not attributable to the reportable segments.

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Revenues and Segment Costs of Revenues

Feature Films Segment

Operating results for the Feature Films segment were as follows (in millions, except percentages):

	Three Months Ended March 31,					Increase (Decrease)
	2015		2014			$			%
Segment revenues	$	128.0	$	110.1		$	17.9		16.3	%
Segment costs of revenues	87.0		135.5			(48.5		)	(35.8	)%
Segment gross profit (loss)	$	41.0	$	(25.4	)	$	66.4		NM

____________________

NM: Not Meaningful.

Segment Revenues

The following chart sets forth the revenues generated by our Feature Films segment, by category, for the three months ended March 31, 2015 as compared to the three months ended March 31, 2014 (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

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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 releases" category decreased slightly to $2.9 million during the three months ended March 31, 2015 compared to $3.0 million during the three months ended March 31, 2014. During the three months ended March 31, 2015, Home (March 2015 theatrical release) contributed ancillary revenues of $2.9 million, or 1.7% of consolidated revenues. As is somewhat typical for many of our new theatrical releases, our primary distributor, Fox, did not report any theatrical revenue to us during the three months ended March 31, 2015 for Home as Fox is entitled to recover its marketing and distribution costs before they are required to report to us any revenue generated from the exploitation of this film. We currently anticipate that Fox will begin reporting revenue to us during the three months ending June 30, 2015 as a result of the film's performance in the worldwide theatrical markets. During the three months ended March 31, 2014, Mr. Peabody and Sherman (March 2014 release) contributed $3.0 million, or 2.0% of consolidated revenues, earned in the ancillary markets.

Prior year theatrical releases. Revenues generated by our "Prior year theatrical releases" category increased $10.9 million, or 17.0%, to $74.9 million during the three months ended March 31, 2015 when compared to $64.0 million of revenues earned during the three months ended March 31, 2014. The increase was primarily due to home entertainment revenues generated by our feature film How to Train Your Dragon 2 (June 2014 release), which was a stronger-performing title when compared to Turbo (July 2013 release). This increase was partially offset by a decrease in revenues as Mr. Peabody and Sherman (March 2014 release) contributed a lower amount of revenues during the three months ended March 31, 2015 when compared to the amount of revenues contributed by The Croods (March 2013 release) during the three months ended March 31, 2014.

For the three months ended March 31, 2015, "Prior year theatrical release" revenues consisted of those generated by The Penguins of Madagascar (November 2014 release), How to Train Your Dragon 2 and Mr. Peabody and Sherman. The Penguins of Madagascar contributed $2.0 million (or 1.2% of consolidated revenues) of ancillary revenues. How to Train Your Dragon 2 and Mr. Peabody and Sherman contributed $41.4 million (or 24.9%) and $31.5 million (or 18.9%) of revenues, respectively, primarily related to each title’s SVOD distribution.

For the three months ended March 31, 2014, "Prior year theatrical release" revenues consisted of those generated by The Croods and Turbo. 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.

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 increased $7.1 million to $12.3 million during the three months ended March 31, 2015 when compared to $5.2 million of revenues during the three months ended March 31, 2014. Although there was only one title that comprised the "Preceding year theatrical releases" category during the three months ended March 31, 2015 compared to two titles during the same period of the prior year, revenues increased as a result of a non-routine licensing arrangement attributable to the home entertainment market related to Turbo (July 2013 release), which was earned during the three months ended March 31, 2015.

Preceding year theatrical release revenues during the three months ended March 31, 2015 consisted of those related to Turbo, which contributed $12.3 million (or 7.4%) of consolidated revenues, primarily earned in the international home entertainment market. 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.

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 consistent at $37.9 million during each of the three-month periods ended March 31, 2015 and 2014. During the three months ended March 31, 2015, Library revenues included those generated in the home entertainment market by How to Train Your Dragon, which benefited from the home entertainment release of the sequel How to Train Your Dragon 2 (released into the home entertainment market in November 2014). In addition, during the three months ended March 31, 2015, our "Library" category included recoveries totaling $6.3 million from previously established home entertainment reserves related to sales through our former primary theatrical distributor (the benefit of this was partially offset by $1.0 million of associated film amortization which was recorded as a component of costs of revenues). During the three months ended March 31, 2015 and 2014, the other primary contributors to revenues generated by our "Library" category were Rise of the Guardians and Puss in Boots, respectively, primarily earned in the worldwide television markets.

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Segment Costs of Revenues

The primary component of costs of revenues for our Feature Film segment is film amortization and impairment costs. Segment costs of revenues as a percentage of revenues for our Feature Films segment were 68.0% during the three months ended March 31, 2015 compared to 123.1% for the three months ended March 31, 2014. During the three months ended March 31, 2015, impairment charges recorded were immaterial. However, 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). Excluding the impairment charges, segment costs of revenues as a percentage of revenues decreased during the three months ended March 31, 2015 when compared to the three months ended March 31, 2014. This decrease was attributable to 2015's "Library" category which had an overall lower amortization rate when compared to 2014's "Library" category.

Television Series and Specials Segment

Operating results for the Television Series and Specials segment were as follows (in millions, except percentages):

	Three Months Ended March 31,				Increase (Decrease)
	2015		2014		$			%
Segment revenues	$	18.0	$	17.9	$	0.1		0.6	%
Segment costs of revenues	14.5		12.1		2.4			19.8	%
Segment gross profit	$	3.5	$	5.8	$	(2.3	)	(39.7	)%

Segment Revenues

Revenues generated from our Television Series and Specials segment remained relatively consistent during the three months ended March 31, 2015 when compared to the three months ended March 31, 2014 and were comprised of revenues generated from a variety of our episodic series. During the three months ended March 31, 2015, the primary driver of revenues was our episodic series All Hail King Julien, while during the three months ended March 31, 2014, the primary driver of revenues was our How to Train Your Dragon series.

Segment Costs of Revenues

Segment 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 80.8% for the three months ended March 31, 2015 compared to 68.0% for the three months ended March 31, 2014. The increase in segment costs of revenues as a percentage of revenues was primarily a result of advertising and marketing costs attributable to our new episodic series. Partially offsetting this increase was a decrease in segment costs of revenues as a percentage of revenues due to an overall decrease in the amortization rates associated with our episodic series when comparing the three months ended March 31, 2015 to the three months ended March 31, 2014.

Consumer Products Segment

Operating results for the Consumer Products segment were as follows (in millions, except percentages):

	Three Months Ended March 31,				Increase (Decrease)
	2015		2014		$		%
Segment revenues	$	15.1	$	12.1	$	3.0	24.8	%
Segment costs of revenues	8.6		6.1		2.5		41.0	%
Segment gross profit	$	6.5	$	6.0	$	0.5	8.3	%

Segment Revenues

As illustrated in the table above, revenues generated from our Consumer Products segment increased $3.0 million, or 24.8%, to $15.1 million during the three months ended March 31, 2015 when compared to $12.1 million during the three months ended March 31, 2014. This increase was primarily due to revenues earned from our location-based entertainment initiatives. Segment revenues for each of the three-month periods ended March 31, 2015 and 2014 were

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primarily driven by those generated by licensing arrangements related to a variety of our intellectual property rights associated with the characters from our feature films.

Segment Costs of Revenues

Segment costs of revenues as a percentage of revenues for our Consumer Products segment increased to 56.7% during the three months ended March 31, 2015 compared to 50.2% during the three months ended March 31, 2014. Segment costs of revenues as a percentage of revenues increased primarily as a result of costs incurred during the three months ended March 31, 2015 related to our new initiatives.

New Media Segment

Operating results for our New Media segment were as follows (in millions, except percentages):

	Three Months Ended March 31,					Increase (Decrease)
	2015		2014			$			%
Segment revenues	$	4.6	$	4.1		$	0.5		12.2	%
Segment costs of revenues	2.5		4.2			(1.7		)	(40.5	)%
Segment gross profit (loss)	$	2.1	$	(0.1	)	$	2.2		NM

____________________

NM: Not Meaningful.

Segment Revenues

Revenues generated by our New Media segment increased slightly to $4.6 million during the three months ended March 31, 2015 compared to $4.1 million during the three months ended March 31, 2014. This increase was primarily attributable to revenues generated by channels and Big Frame (which we acquired in April 2014).

Segment Costs of Revenues

During the three months ended March 31, 2015 and March 31, 2014, costs of revenues related to our New Media segment were $2.5 million (or 53.9% of segment revenues) and $4.2 million (or 102.0% of segment revenues), respectively. Segment costs of revenues as a percentage of segment revenues decreased when compared to the three months ended March 31, 2014 due to revenues earned during the three months ended March 31, 2015 from channels and the release of Expelled, which had lower associated costs.

All Other Segments

Operating results for all other segments in the aggregate were as follows (in millions, except percentages):

	Three Months Ended March 31,				Increase (Decrease)
	2015		2014		$			%
Segment revenues	$	0.8	$	3.0	$	(2.2	)	(73.3	)%
Segment costs of revenues	0.3		2.7		(2.4		)	(88.9	)%
Segment gross profit	$	0.5	$	0.3	$	0.2		66.7	%

Segment Revenues and Costs of Revenues

As illustrated in the table above, segment revenues and segment costs of revenues attributable to our All Other segment decreased during the three months ended March 31, 2015 when compared the three months ended March 31, 2014 as we are no longer operating any live performance productions.

Selling and Marketing. Selling and marketing expenses directly attributable to our feature films and television series/specials are included as a component of segment profitability, and, thus, are included in each respective segment's revenues and costs of revenues discussion. As illustrated in the table below (in millions, except percentages), for the three-month periods ended March 31, 2015 and March 31, 2014, the amount of selling and marketing expenses not allocated to our segments was $1.7 million and $2.0 million, respectively.

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	Three Months Ended March 31,				Increase (Decrease)
	2015		2014		$			%
Selling and marketing	$	8.5	$	6.2
Less: allocation to segments	6.8		4.2
Unallocated selling and marketing	$	1.7	$	2.0	$	(0.3	)	(15.0	)%

The decrease of $0.3 million, or 15.0%, when comparing the three months ended March 31, 2015 to the three months ended March 31, 2014, was primarily due to a decline in spend related to general company marketing activities.

General and Administrative. Total general and administrative expenses increased $41.4 million to $89.1 million (including stock-based compensation expense of $4.1 million) for the three months ended March 31, 2015 from $47.7 million (including stock-based compensation expense of $5.1 million) for the three months ended March 31, 2014. This 86.8% aggregate increase was largely attributable to charges related to our 2015 Restructuring Plan. Such charges primarily consisted of $6.1 million related to employee termination and other employee-related costs (which primarily consist of severance and benefits), $9.3 million related to accelerated depreciation and amortization costs and $16.5 million related to additional labor and other excess costs. Refer to "—Management Overview—2015 Restructuring Plan" for further description of these costs. In addition, due to the expansion of the ATV business, general and administrative expenses increased $5.9 million when comparing the three months ended March 31, 2015 to the three months ended March 31, 2014.

Our general and administrative expenses during the three months ended March 31, 2014 included a $2.5 million expense which resulted from a change in the estimate of the fair value of the contingent consideration liability related to the acquisition of ATV. Due to the amounts paid in lieu of the contingent consideration arrangement, our liability was reduced to zero during the three months ended December 31, 2014. For further information, refer to Note 3 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report.

Product Development. Product development costs decreased to $0.3 million during the three months ended March 31, 2015 when compared to $0.5 million during the three months ended March 31, 2014. Product development costs primarily represent research and development costs related to our technology.

Other Operating Income. During the three months ended March 31, 2015 and 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, 2015 and 2014, other operating income totaled $2.3 million and $1.7 million, respectively, and related to consulting and training services provided, as well as a portion of the value of the technology license granted.

Operating Loss. Operating loss for the three months ended March 31, 2015 and 2014 was $35.3 million and $61.9 million, respectively. Operating loss for the three months ended March 31, 2015 was largely driven by charges related to our 2015 Restructuring Plan (as previously described), while operating loss for the three months ended March 31, 2014 was largely due to the impairment charge related to Mr. Peabody and Sherman.

Interest Expense, Net. For the three months ended March 31, 2015 and 2014, we recorded net interest expense (net of interest income and amounts capitalized) of $6.3 million and $1.8 million, respectively. This increase of $4.5 million was primarily due to an increase in interest expense as a result of higher outstanding debt balances.

Other Expense/Income, Net.  For the three months ended March 31, 2015 and 2014, total other expense (net) was a net expense of $5.5 million compared to net other income of $1.2 million, respectively. The net other expense for the three months ended March 31, 2015 was primarily due to a write-off in the amount of $5.1 million related to a strategic investment made by us that was determined to not be recoverable as of March 31, 2015. In addition, other expense also included losses on foreign currency exchange transactions, which increased $1.1million when compared to the same period of the prior year primarily due to unrealized foreign currency losses related to intercompany balances that will be settled. Lastly, other income in both years included income recognized in connection with preferred vendor arrangements with certain of our strategic alliance relationships.

Increase/Decrease 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,

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subject to repayment if it is determined that these savings should not have been available to us. For the three months ended March 31, 2015, we recorded an immaterial increase to our income tax benefit payable to former stockholder in our statements of operations as we are not currently anticipating a tax benefit from the Tax Basis Increase for the year ending December 31, 2015. 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 a reduction in our ability to claim certain tax deductions.

Loss from Equity Method Investees. During the three months ended March 31, 2015 and 2014, our portion of the losses incurred by equity method investees was $6.4 million and $3.3 million, respectively, which were primarily attributable to our shares of losses incurred by ODW. The increase of $3.1 million was primarily due to an increase in ODW's expenses due to the growth of the company.

Provision/Benefit for Income Taxes.  For the three months ended March 31, 2015, we recorded a provision for income taxes of $2.4 million, or an effective tax rate of(4.5)%. Our combined effective tax rate, which is our effective tax rate combined with the amounts associated with the Increase/Decrease in Income Tax Benefit Payable to Former Stockholder (see above), was also (4.5)%. Our effective tax rate and combined effective tax rate for the three months ended March 31, 2015 were lower than the 35% statutory federal rate primarily due to the valuation allowance against our deferred tax assets. In addition, our effective tax rate and combined effective tax rate for the three months ended March 31, 2015 was primarily attributable to foreign taxes. For the three months ended March 31, 2014, we recorded a benefit for income taxes of $22.5 million, or an effective tax rate of 34.1%. However, our combined effective tax rate for the three months ended March 31, 2014 was 35.5%. Our effective tax rate was lower than the 35% statutory federal rate primarily due to nondeductible expenses. Our combined effective tax rate for the three months ended March 31, 2014 was higher than the 35% statutory federal rate primarily due to our ability to claim certain federal tax deductions.

For further information on the methodology applied in determining our provision/benefit for income taxes for the three months ended March 31, 2015 and 2014, refer to Note 11 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report.

Net (Loss) 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"). In addition, in December 2014, we sold an interest in our ATV business to a third party and, in February 2015, we formed a new entity (which is less than wholly owned) to commercialize one of our technology initiatives. We consolidate the results of each of these entities because we retain control over the operations. Net income (or loss) attributable to non-controlling interests represents the joint venture partner's share of the income (or loss) that is consolidated in our operating results. For the three months ended March 31, 2015 and March 31, 2014, net loss and net income attributable to non-controlling interests was $1.1 million and $0.5 million, respectively. The net loss recognized during the three months ended March 31, 2015 was primarily attributable to the activities associated with the ATV Joint Venture. During the three months ended March 31, 2014, our ATV business was conducted through wholly-owned subsidiaries, and, thus, there was no net income/loss attributable to non-controlling interests.

Net Loss Attributable to DreamWorks Animation SKG, Inc.  Net loss (excluding net loss/income attributable to non-controlling interests) for the three months ended March 31, 2015 was $54.8 million, or a loss of $0.64 per share, as compared $42.9 million, or a loss of $0.51 per share, during the three months ended March 31, 2014.

Financing Arrangements

Amended and Restated Revolving Credit Facility

On February 20, 2015, the Company amended and restated the Credit Agreement by entering into an Amended and Restated Credit Agreement (the “Restated Credit Agreement”) with a number of banks. The Restated Credit Agreement allows the Company to have outstanding borrowings of up to $450.0 million at any one time, on a revolving basis. Borrowings under the Restated Credit Agreement bear interest at per annum rates determined by reference to the base rate or to LIBOR, with the base rate being increased by a margin of 1.50% per annum and LIBOR being increased by a margin of 2.50% per annum.

Lease Financing Obligation

On February 23, 2015, we entered into a purchase agreement with a third party to sell our headquarters facility for a purchase price of $185.0 million. Concurrently with the sale of the property, we entered into a lease agreement with the buyer, pursuant to which we leased the property back from the buyer commencing immediately following the consummation of the sale.

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There were no other 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 2014 Form 10-K.

As of March 31, 2015, 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 2014 Form 10-K.

Liquidity and Capital Resources

Current Financial Condition

Cash generated from our operating activities, proceeds from our lease financing obligation, borrowings from our revolving credit facility and cash on hand during the three months ended March 31, 2015 were adequate to meet our operating cash needs. For the next 12 months, we expect that cash on hand, cash from operations, funds available under our revolving credit facility and other capital resources will be sufficient to satisfy our anticipated cash needs for working capital (e.g., general and administrative costs, selling and marketing costs, participation and residual payments, production and development costsrelated to film and non-film initiatives and new business investments), capital expenditures, debt service payments and our restructuring initiatives.

As of March 31, 2015, we had cash and cash equivalents totaling $89.7 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, 2015 increased by $55.4 million from $34.2 million at December 31, 2014. Components of this change in cash for the three months ended March 31, 2015, as well as for the three months ended March 31, 2014, 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, 2015, the amount of outstanding receivables from ODW for distribution of our films was $19.7 million.

Operating Activities

Net cash provided by (used) in operating activities for the three months ended March 31, 2015 and 2014 was as follows (in thousands):

	2015		2014
Net cash provided by (used in) operating activities	$	1,562	$	(12,487	)

During the three months ended March 31, 2015, our main source of cash from operating activities was the collection of revenue. The main sources of cash during this period were How to Train Your Dragon 2's worldwide home entertainment revenues, The Croods' worldwide home entertainment revenues, Madagascar 3's international television revenues, and to a lesser extent, the collection of worldwide television and home entertainment revenues from our other films. In addition, cash provided by operating activities during the three months ended March 31, 2015 benefited from a higher amount of advances received during the three months ended March 31, 2015 for future deliveries of content when compared to the same period of the prior year.

Cash used in operating activities for the three months ended March 31, 2015 included $6.8 million paid related to incentive compensation payments, which decreased $24.6 million when compared to the amount paid during the three months ended March 31, 2014 as these cash payments fluctuate based on our financial results. During the three months ended March 31, 2015, we also made payments (net of refunds received) to an affiliate of a former stockholder related to tax benefits realized in 2014 from the Tax Basis Increase in the amount of $7.4 million. 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.

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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.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2015 and 2014 was as follows (in thousands):

	2015			2014
Net cash used in investing activities	$	(2,355	)	$	(12,711	)

Net cash used in investing activities for the three months ended March 31, 2015 and 2014 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 investments in various unconsolidated entities compared to only $0.5 million during the three months ended March 31, 2015. For further information regarding 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 provided by (used in) financing activities for the three months ended March 31, 2015 and 2014 was as follows (in thousands):

	2015		2014
Net cash provided by (used in) financing activities	$	55,168	$	(1,017	)

Net cash provided by financing activities for the three months ended March 31, 2015 was largely comprised of $185.0 million of net proceeds received from our sale of our headquarters facilities (which was recorded as a financing arrangement as further described in Note 10 of our unaudited consolidated financial statements contained elsewhere in this Form 10-Q), which was offset by $1.2 million in repayments under the lease financing obligation. Net cash provided by financing activities for the three months ended March 31, 2015 also included $340.4 million in borrowings under our revolving credit facility, which was more than offset by $475.4 million in repayments of borrowings. The overall increase in borrowings was due to cash needs, including cash needed to fund our episodic series production costs, restructuring initiatives and new business initiatives.

In addition, cash provided by financing activities also included a cash contribution from a non-controlling interest holder in the amount of $15.0 million related to the formation of a new entity to commercialize one of the Company's technology initiatives.

Lastly, during the three months ended March 31, 2014, net cash used in financing activities was primarily comprised of repurchases of our Class A common stock and only consisted of repurchases in order to satisfy tax obligations related to the vesting of restricted stock awards. 

Contractual Obligations

Contributions to Oriental DreamWorks

Pursuant to the Transaction and Contribution Agreement with ODW, we have committed to make certain cash and non-cash contributions in connection with the formation of ODW. As of March 31, 2015, our remaining contribution commitments consisted of the following: (i) $40.6 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 $6.7 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.

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Lease Financing Obligation

On February 23, 2015, we entered into an agreement to sell our real property located in Glendale, California and, concurrently, lease back the property. See Note 10 of the unaudited consolidated financial statements contained elsewhere in this Quarterly Report for further information on this transaction and the required cash obligations.

Purchase Obligations

During the three months ended March 31, 2015, we entered into an agreement with one of our suppliers which committed the Company to minimum purchase obligations. As of March 31, 2015, remaining minimum purchase obligations totaled $21.6 million and will be paid during 2015 and 2016.

Non-Cancelable Talent Commitments

As of March 31, 2015, we had non-cancelable talent commitments totaling approximately $32.1 million that we expect to be payable over the next five years.

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 2014 Form 10-K.

Critical Accounting Policies and Estimates

Our significant accounting policies are outlined in Note 2 to the audited consolidated financial statements contained in our 2014 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 and television product;

• 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 the fair value of reporting units for purposes of testing goodwill for impairment;

• 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, 2014.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standards update to provide companies with a single model for use in accounting for revenue from contracts with customers. Once it becomes effective, the

43

new guidance will replace most existing revenue recognition guidance in U.S. GAAP, including industry-specific guidance. We are required to adopt the guidance on January 1, 2017. Early adoption is not permitted. However, on April 1, 2015, the FASB voted to propose a one-year deferral to the effective date, but to permit entities to adopt one year earlier if they choose (i.e., the original effective date). The proposal will be subject to the FASB's due process requirement, which includes a period for public comments. Companies are permitted to either apply the guidance retrospectively to all prior periods presented or, alternatively, apply the guidance in the year of adoption with the cumulative effect recognized at the date of initial application (referred to as the modified retrospective approach). We are currently in the process of determining the method of adoption, as well as evaluating the impact that the new standard will have on our consolidated financial statements.

For further details, as well as a discussion of other 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

In addition to the financial results reported in accordance with U.S. GAAP, we have provided the following non-GAAP measures: Adjusted Income/Loss and Adjusted EBITDA (collectively, "non-GAAP measures"). Adjusted Income/Loss and Adjusted EBITDA are not prepared in accordance with U.S. GAAP. We believe the use of these non-GAAP measures on a consolidated basis assists investors in comparing our ongoing operating performance between periods. Adjusted Income/Loss and Adjusted EBITDA provide a supplemental presentation of our operating performance and generally reflect adjustments for unusual or non-operational activities. We may not calculate Adjusted Income/Loss or Adjusted EBITDA in a manner consistent with the methodologies used by other companies. Adjusted Income/Loss and Adjusted EBITDA (a) do not represent our operating income or cash flows from operating activities as defined by U.S. GAAP; (b) in the case of Adjusted EBITDA, does not include all of the adjustments used to compute consolidated cash flow for purposes of the covenants applicable to the Notes; (c) are not necessarily indicative of cash available to fund our cash flow needs; and (d) should not be considered alternatives 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 Income/Loss and Adjusted EBITDA measures should not be construed as an implication that our future results will be unaffected by unusual items.

Adjusted Income/Loss Measures

On January 22, 2015, the Company announced its restructuring initiatives (the "2015 Restructuring Plan") that are intended to refocus the Company's core feature animation business. In connection with the 2015 Restructuring Plan, the Company has made changes in its senior leadership team and has also made changes based on its reevaluation of the Company's feature film slate. The Company evaluates operating performance to exclude the effects of the charges related to the execution of the 2015 Restructuring Plan as it believes the restructuring-related charges do not correlate with the ongoing operating results of the Company’s business and were charges that resulted from significant decisions that were made in order to refocus the Company. As a result, the Company believes that presenting the Company’s Adjusted Operating Income/Loss, Adjusted Net Income/Loss Attributable to DWA and Adjusted Diluted Income/Loss per share (collectively, "Adjusted Income/Loss Measures") will aid investors in evaluating the performance of the Company. The Company defines Adjusted Income/Loss Measures as net earnings (loss) adjusted to exclude the items within its Consolidated Statements of Operations that relate to its 2015 Restructuring Plan (as discussed further in "—Management's Discussion and Analysis of Financial Condition and Results of Operations—Management Overview").

The Company uses these Adjusted Income/Loss Measures to, among other things, evaluate the Company's operating performance. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of the Company's operational strength and business performance because they provide a link between profitability and operating cash flow. The Company believes these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by the Company's management and help improve investors' understanding of the Company’s operating performance. In addition, the Company believes that these are among the primary measures used externally by the Company's investors, analysts and industry peers for purposes of valuation and for the comparison of the Company's operating performance to other companies in its industry.

Adjusted Income/Loss Measures Reconciliation

The following is a reconciliation of each of the Company's GAAP measures (operating income/loss, net income/loss attributable to DreamWorks Animation SKG, Inc. and loss (or diluted earnings) per share) to the non-GAAP adjusted amounts (in thousands, except per share amounts):

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	Three Months Ended March 31, 2015
Operating loss — as reported	$	(35,303	)
Reverse 2015 Restructuring Plan charges:
Employee-related termination costs(1)	4,587
Relocation and other employee-related costs(2)	1,496
Accelerated depreciation and amortization charges(3)	9,279
Additional labor and other excess costs(4)	16,509
Total restructuring-related charges	31,871
Adjusted operating loss	$	(3,432	)
Net loss attributable to DreamWorks Animation SKG, Inc. — as reported	$	(54,777	)
Reverse 2015 Restructuring Plan charges:
Employee-related termination costs(1)	4,587
Relocation and other employee-related costs(2)	1,496
Accelerated depreciation and amortization charges(3)	9,279
Additional labor and other excess costs(4)	16,509
Total restructuring-related charges	31,871
Tax impact(5)	1,434
Adjusted net loss attributable to DreamWorks Animation SKG, Inc.	$	(21,472	)
Loss per share — as reported	$	(0.64	)
Reverse 2015 Restructuring Plan charges:
Employee-related termination costs(1)	0.05
Relocation and other employee-related costs(2)	0.02
Accelerated depreciation and amortization charges(3)	0.11
Additional labor and other excess costs(4)	0.19
Total restructuring-related charges	0.37
Tax impact(5)	0.02
Adjusted loss per share	$	(0.25	)

____________________

⁽¹⁾  Employee-related termination costs. Employee-related termination costs consist of severance and benefits (including stock-based compensation) attributable to employees that were terminated in connection with the 2015 Restructuring Plan.

⁽²⁾  Relocation and other employee-related costs. Relocation and other employee-related costs primarily consist of costs to relocate employees from our Northern California facility to our Southern California facility.

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⁽³⁾  Accelerated depreciation and amortization charges. Accelerated depreciation and amortization charges consist of incremental charges incurred as a result of shortened estimated useful lives of certain property, plant and equipment due to the decision to exit our Northern California facility.

⁽⁴⁾  Additional labor and other excess costs. Additional labor consists of costs related to excess staffing in order to execute the restructuring plans specifically related to changes in the feature film slate. These additional labor costs are incremental to our normal operating charges and are expensed as incurred. Other excess costs are those due to the closure of our Northern California facility and primarily relate to costs that we incurred to continue to operate the facility until we exit the facility.

⁽⁵⁾  Tax Impact. The tax impact of the non-GAAP adjustments is calculated at the Company’s combined effective tax rate of (4.5)% for the three months ended March 31, 2015.

Adjusted EBITDA

In connection with our issuance of the Notes on August 14, 2013 (see Note 10 of our unaudited consolidated financial statements contained elsewhere in this Quarterly Report), 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 Reconciliation

We believe that net income is the most directly comparable U.S. GAAP measure to Adjusted EBITDA. Accordingly, the following table below presents a reconciliation of net income (or loss) to Adjusted EBITDA (in thousands):

	Three Months Ended
	March 31,
	2015			2014
Net loss	$	(55,890	)	$	(42,416	)
Provision (benefit) for income taxes	2,400			(22,467		)
Loss from equity method investees	6,362			3,260
Increase/decrease in income tax benefit payable to former stockholder	25			(927		)
Other expense/income, net	5,466			(1,218		)
Interest expense, net	6,334			1,773
Operating loss	(35,303		)	(61,995		)
Income related to investment contributions	(2,281		)	(1,672		)
Amounts included in amortization of film and other inventory costs(1)	12,478			8,821
Film impairments	933			57,074
Depreciation and amortization(2)	17,351			4,235
Stock-based compensation expense	4,399			5,309
Adjusted EBITDA	$	(2,423	)	$	11,772

____________________

⁽¹⁾  Amortization and write-offs of film and other inventory costs in any period include 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 2014 Form 10-K. For purposes of Adjusted EBITDA, we add back the portion of amortization and write-offs of film and other inventory costs that represents amounts previously capitalized as depreciation and amortization, interest expense and stock-based compensation expense.

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⁽²⁾  Includes those amounts pertaining to the amortization of intangible assets that are 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 Months Ended
	March 31,
	2015			2014
Adjusted EBITDA	$	(2,423	)	$	11,772
Amortization and write-off of film and other inventory costs(1)	79,941			79,517
Revenue earned against deferred revenue and other advances	(16,469		)	(16,188		)
Other expense/income, net	(5,466		)	1,218
Other impairments and write-offs	5,064			—
Interest expense, net	(6,334		)	(1,773		)
Net (payments of) refund from income taxes and stockholder payable	(8,793		)	1,498
Changes in certain operating asset and liability accounts	(43,958		)	(88,531		)
Cash provided by (used in) operating activities	$	1,562		$	(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 income (or loss) to Adjusted EBITDA).

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 2014 Form 10-K. Our exposure to interest rate, foreign currency and credit risks has not changed materially since December 31, 2014.

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.

47

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.

Investigation by the SEC. In May 2014, the Company learned that the Division of Enforcement of the U.S. Securities and Exchange Commission ("SEC") is conducting an investigation into the writedown of film inventory relating to Turbo and related matters. The Company is cooperating with the SEC in this matter.

ITEM 1A. RISK FACTORS

Information concerning certain risks and uncertainties appears in "Part I—Item 1A—Risk Factors" of the Company’s 2014 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 2014 Form 10-K or filings subsequently made with the SEC.

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, 2015.

	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, 2015	—	$	—	—	$	100,000,000
February 1–February 28, 2015	—	$	—	—	$	100,000,000
March 1–March 31, 2015	—	$	—	—	$	100,000,000
Total	—	$	—	—

 ____________________

⁽¹⁾  In July 2010, the Company’s Board of Directors authorized a stock repurchase program pursuant to which the Company may repurchase up to an aggregate of $150.0 million of its outstanding stock.

ITEM 5. OTHER INFORMATION

None.

48

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, 2015 formatted in eXtensible Business Reporting Language: (i) Unaudited Consolidated Balance Sheets at March 31, 2015 and December 31, 2014; (ii) Unaudited Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014; (iii) Unaudited Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2015 and 2014; (iv) Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014; and (v) Notes to the Unaudited Consolidated Financial Statements

49

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: May 1, 2015	By:	/S/    FAZAL MERCHANT
	Name:	Fazal Merchant
	Title:	Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)

50

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, 2015 formatted in eXtensible Business Reporting Language: (i) Unaudited Consolidated Balance Sheets at March 31, 2015 and December 31, 2014; (ii) Unaudited Consolidated Statements of Operations for the three months ended March 31, 2015 and 2014; (iii) Unaudited Consolidated Statements of Comprehensive (Loss) Income for the three months ended March 31, 2015 and 2014; (iv) Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2015 and 2014; and (v) Notes to the Unaudited Consolidated Financial Statements

51

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: May 1, 2015	/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, Fazal Merchant, 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: May 1, 2015	/S/    FAZAL MERCHANT
	Fazal Merchant, 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, 2015 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: May 1, 2015	/S/    JEFFREY KATZENBERG
	Jeffrey Katzenberg Chief Executive Officer
Date: May 1, 2015	/S/    FAZAL MERCHANT
	Fazal Merchant 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.

XML

Acquisitions (Details) (USD $)	1 Months Ended	0 Months Ended	3 Months Ended		12 Months Ended	0 Months Ended
	May 20, 2014 business	Dec. 11, 2014	Mar. 31, 2015	Dec. 31, 2014	Dec. 31, 2014	May 03, 2013	Mar. 31, 2014	Dec. 31, 2013
Business Acquisition [Line Items]
Goodwill			190,668,000	$ 190,668,000	$ 190,668,000
Big Frame and Felix the Cat Rights [Member]
Business Acquisition [Line Items]
Number of business acquired	2
Total cash consideration transferred	34,800,000
Identifiable intangible assets acquired	22,300,000
Goodwill	11,400,000
AwesomenessTV, Inc. [Member]
Business Acquisition [Line Items]
Contingent consideration arrangement with former shareholders, term			2 years
Estimated contingent consideration		0				95,000,000	99,000,000	96,500,000
Maximum contingent consideration that may be earned						117,000,000
Fixed payment amount in lieu of contingent consideration from Merger Agreement		80,000,000
Gain related to contingent consideration liability				6,800,000	16,500,000
Income Approach Valuation Technique [Member] | AwesomenessTV, Inc. [Member]
Business Acquisition [Line Items]
Discount rate						8.50%
Volatility rate						32.60%
Probability adjusted earnings in 2014						25,000,000
Probability adjusted earnings in 2015						41,000,000
Sensitivity analysis, hypothetical discount rate						15.00%
Sensitivity analysis, hypothetical volatility rate						20.00%
Discount Rate [Member] | Income Approach Valuation Technique [Member] | AwesomenessTV, Inc. [Member]
Business Acquisition [Line Items]
Change in fair value of contingent consideration after change in discount rate						90,500,000
Volatility Rate [Member] | Income Approach Valuation Technique [Member] | AwesomenessTV, Inc. [Member]
Business Acquisition [Line Items]
Change in fair value of contingent consideration after change in volatility rate						103,500,000
Hearst Corporation [Member] | ATV Joint Venture [Member]
Business Acquisition [Line Items]
Equity interest in joint venture		25.00%
Purchase price for equity interest in joint venture		$ 81,250,000

XML

Impact of Stock Options and Restricted Stock Awards on Net Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Total stock-based compensation	$ 4,399		$ 5,309
Tax impact	198	[1]	(1,885)	[1]
Reduction in net income, net of tax	$ 4,597		$ 3,424

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

XML

Accrued Liabilities (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Payables and Accruals [Abstract]
Employee compensation	$ 64,281,000	$ 67,084,000
Participations and residuals	50,574,000	50,646,000
Interest payable	2,715,000	7,951,000
Deferred rent	10,639,000	11,049,000
Other accrued liabilities	35,884,000	53,487,000
Total accrued liabilities	164,093,000	190,217,000
Accrued participation and residual costs estimated to pay over the next 12 months	$ 19,300,000

XML

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, 2015	Mar. 31, 2014
Restricted Stock Units (RSUs) [Member]
Number of shares granted	777	224
Weighted average grant date fair value (in dollars per share)	$ 21.41	$ 29.91

XML

Investments in Unconsolidated Entities Basis Difference In Equity Investment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015		Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Total investment recorded	$ 14,316		$ 23,451
ODW Holding Limited [Member]
Schedule of Equity Method Investments [Line Items]
Company's venture-level equity	40,403		46,345
Total investment recorded	14,305		17,422
ODW Holding Limited [Member] | Technology and Intellectual Property Licenses [Member]
Schedule of Equity Method Investments [Line Items]
Basis differences	(10,489)	[1]	(12,714)	[1]
ODW Holding Limited [Member] | Other [Member]
Schedule of Equity Method Investments [Line Items]
Basis differences	$ (15,609)	[2]	$ (16,209)	[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.

XML

Stockholders' Equity and Non-controlling Interests (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015 and 2014 (in thousands):

	DreamWorks Animation SKG, Inc. Stockholders' Equity			Non-controlling Interests			Total Equity
Balance as of December 31, 2014	$	1,156,357		$	38,041		$	1,194,398
Stock-based compensation	6,780			—			6,780
Purchase of treasury shares	(2,013		)	—			(2,013		)
Foreign currency translation adjustments	(810		)	—			(810		)
Capital contribution from non-controlling interest holder	—			15,000			15,000
Distributions to non-controlling interest holder	—			(571		)	(571		)
Net loss	(54,777		)	(1,113		)	(55,890		)
Balance as of March 31, 2015	$	1,105,537		$	51,357		$	1,156,894
Balance as of December 31, 2013	$	1,404,795		$	1,224		$	1,406,019
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

XML

Reportable Segments Schedule of goodwill by segment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Segment Reporting Information [Line Items]
Goodwill	$ 190,668	$ 190,668
Feature Films [Member]
Segment Reporting Information [Line Items]
Goodwill	43,995	43,995
Television Series and Specials [Member]
Segment Reporting Information [Line Items]
Goodwill	6,111	6,111
Consumer Products [Member]
Segment Reporting Information [Line Items]
Goodwill	12,219	12,219
New Media [Member]
Segment Reporting Information [Line Items]
Goodwill	$ 128,343	$ 128,343

XML

Restructuring and Related Charges Restructuring and Related Charges

3 Months Ended

Mar. 31, 2015

Restructuring and Related Activities [Abstract]

Restructuring and Related Charges

Restructuring and Related Charges

2015 Restructuring Plan

On January 22, 2015, the Company announced its restructuring initiatives (the "2015 Restructuring Plan") that are intended to refocus the Company's core feature animation business. In connection with the 2015 Restructuring Plan, the Company made changes in its senior leadership team and also made changes based on its reevaluation of the Company's feature film slate. The 2015 Restructuring Plan activities resulted, or will result, in charges related to employee-related costs resulting from headcount reductions, lease obligations and other costs associated with the closure of one of the Company's facilities, accelerated depreciation and amortization charges, write-offs related to the recoverability of capitalized costs for certain unreleased productions and other contractual obligations. Certain of these costs were incurred during the three months ended December 31, 2014. The Company expects that the remaining costs will be primarily incurred during the year ending December 31, 2015, primarily related to relocation and contractual obligations. The actions associated with the restructuring plan primarily impact the Feature Film segment and are expected to be substantially completed during 2015.

Impact to 2015 Financial Results

For the three months ended March 31, 2015, the Company incurred charges for the Company's 2015 Restructuring Plan as follows (in thousands):

	Three Months Ended
	March 31, 2015
Employee termination costs	$	4,587
Relocation and other employee-related costs	1,496
Accelerated depreciation and amortization charges	9,279
Total restructuring and related charges	$	15,362

Employee termination costs consist of severance and benefits (including stock-based compensation) which are accounted for based on the type of employment arrangement between the Company and the employee. Certain of these arrangements include obligations that are accounted for as non-retirement postemployment benefits. The Company also employs individuals under employment contracts. Charges related to non-retirement postemployment benefits and amounts due under employment contracts for employees who will no longer provide services are accrued when probable and estimable. Severance and benefit costs related to all other employees are accounted for in accordance with accounting guidance on costs associated with exit or disposal activities. Such costs were recorded during the three months ended March 31, 2015 as this was the period in which the terms of the restructuring plan had been established, management with the appropriate authority committed to the plan and communication to employees had occurred. Such costs are classified in general and administrative expenses in the Company's consolidated statements of operations. During the three months ended March 31, 2015, employee termination costs included approximately 160 additional employees. As a result, cumulative employee termination costs related to the 2015 Restructuring Plan were attributable to approximately 500 employees.

Relocation and other employee-related costs primarily consist of costs to relocate employees from the Company's Northern California facility to its Southern California facility. Such costs are expensed as incurred and are classified within general and administrative expenses.

Accelerated depreciation and amortization charges for the 2015 Restructuring Plan were determined in accordance with FASB guidance on accounting for the impairment or disposal of long-lived assets. The estimated useful lives of certain property, plant and equipment changed as a result of the Company’s decision to exit its Northern California facility. Such costs are classified within general and administrative expenses.

Liability Rollforward

The following table represents a rollforward of the liability incurred for employee termination benefits (excluding stock-based compensation) in connection with the 2015 Restructuring Plan (in thousands):

	Employee Termination Benefits
Balance at December 31, 2014	$	36,808
Costs incurred	10,286
Changes in estimate	(5,036		)
Payments and other	(6,568		)
Balance at March 31, 2015	$	35,490

XML

Financing Arrangements (Details) (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Aug. 14, 2013	Feb. 23, 2015 building acre	Feb. 20, 2015	Dec. 31, 2014	Feb. 19, 2015
Debt Instrument [Line Items]
Proceeds from lease financing obligation	$ 185,000,000	$ 0
Minimum Lease Payments, Lease Financing Obligations, Fiscal Year Maturity [Abstract]
2015	8,780,000
2016	13,335,000
2017	13,535,000
2018	13,738,000
2019	13,944,000
2020 and thereafter	322,269,000
Total Payments	385,601,000
Less: interest implicit in obligation	(201,785,000)
Total lease financing obligation	183,816,000					0
Senior unsecured notes	300,000,000					300,000,000
Revolving credit facility, amount outstanding	80,000,000					215,000,000
Interest costs incurred	8,500,000	6,100,000
Interest costs capitalized	1,000,000	3,200,000
Revolving Credit Facility [Member]
Minimum Lease Payments, Lease Financing Obligations, Fiscal Year Maturity [Abstract]
Revolving credit facility, amount outstanding	80,000,000					215,000,000
Expiration date of revolving credit facility	Feb. 20, 2020
Interest rate	2.67%
Interest expense	1,340,000	375,000
Senior Unsecured Notes [Member]
Debt Instrument [Line Items]
Debt instrument, face amount			300,000,000.0
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 principal 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%
Minimum Lease Payments, Lease Financing Obligations, Fiscal Year Maturity [Abstract]
Senior unsecured notes	300,000,000					300,000,000
Maturity date	Aug. 15, 2020
Interest expense	4,446,000	2,234,000
Line of Credit [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity							400,000,000.0
Lease Financing Obligation [Member]
Minimum Lease Payments, Lease Financing Obligations, Fiscal Year Maturity [Abstract]
Senior unsecured notes	183,816,000
Maturity date	Feb. 01, 2035
Implied interest rate	6.70%
Interest expense	1,141,000
Glendale, California Property [Member]
Debt Instrument [Line Items]
Number of buildings sold				10
Number of acres sold				14.7
Proceeds from lease financing obligation				185,000,000
Lease financing obligation, potential maximum payment for appreciation or depreciation of property				10,000,000
Glendale Lease Agreement [Member]
Debt Instrument [Line Items]
Lease financing obligation, initial annual rental payments				13,200,000
Lease financing obligation, percentage of increase to annual rental payments				1.50%
Lease financing obligation, lease term				20 years
Lease financing obligation, number of consecutive renewal options available				4
Lease financing obligation, renewal option term				5 years
Lease financing obligation, number of renewal terms subject to fixed rent increases				2
Lease financing obligation, number of renewal terms subject to lease agreement terms				2
Restated Credit Agreement [Member] | Line of Credit [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					450,000,000.0
Line of credit, maximum borrowing capacity, potential increase					$ 50,000,000.0
Annual commitment fee on undrawn amounts of revolving credit facility	0.375%
Interest rate, rate spread over bank base rate					1.50%
Interest rate, rate spread over LIBOR					2.50%
Letter of credit, fronting fee					0.125%

XML

Intangible Assets (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Acquired Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	$ 69,400,000	$ 69,400,000
Finite-Lived Intangible Assets, Net [Abstract]
Gross	144,310,000	144,310,000
Accumulated amortization	(30,655,000)	(27,001,000)
Impact of foreign currency translation	(2,521,000)	(568,000)
Net	111,134,000	116,741,000
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	(16,381,000)	(15,101,000)
Impact of foreign currency translation	(2,521,000)	(568,000)
Net	80,098,000	83,331,000
Distribution Rights [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Weighted average estimated useful life	11 years 2 months 12 days	11 years 2 months 12 days
Gross	30,000,000	30,000,000
Accumulated amortization	(2,371,000)	(1,604,000)
Impact of foreign currency translation	0	0
Net	27,629,000	28,396,000
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	(10,733,000)	(9,333,000)
Impact of foreign currency translation	0	0
Net	467,000	1,867,000
Trademarks and Trade Names [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Weighted average estimated useful life	10 years	10 years
Gross	1,410,000	1,410,000
Accumulated amortization	(251,000)	(216,000)
Impact of foreign currency translation	0	0
Net	1,159,000	1,194,000
Other Intangibles [Member]
Finite-Lived Intangible Assets, Net [Abstract]
Weighted average estimated useful life	4 years 4 months 24 days	4 years 4 months 24 days
Gross	2,700,000	2,700,000
Accumulated amortization	(919,000)	(747,000)
Impact of foreign currency translation	0	0
Net	$ 1,781,000	$ 1,953,000

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Restructuring and Related Charges Restructuring and Related Charges (Tables)

3 Months Ended

Mar. 31, 2015

Restructuring and Related Activities [Abstract]

Schedule of restructuring and related charges

For the three months ended March 31, 2015, the Company incurred charges for the Company's 2015 Restructuring Plan as follows (in thousands):

	Three Months Ended
	March 31, 2015
Employee termination costs	$	4,587
Relocation and other employee-related costs	1,496
Accelerated depreciation and amortization charges	9,279
Total restructuring and related charges	$	15,362

The following table represents a rollforward of the liability incurred for employee termination benefits (excluding stock-based compensation) in connection with the 2015 Restructuring Plan (in thousands):

	Employee Termination Benefits
Balance at December 31, 2014	$	36,808
Costs incurred	10,286
Changes in estimate	(5,036		)
Payments and other	(6,568		)
Balance at March 31, 2015	$	35,490

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Stockholders' Equity and Non-controlling Interests (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Class of Stock [Line Items]
Value of shares authorized to be repurchased	$ 150,000,000.0
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	1,156,357,000	1,404,795,000
Non-controlling interests, beginning of period	38,041,000	1,224,000
Total equity, beginning of period	1,194,398,000	1,406,019,000
Stock option exercises		261,000
Stock-based compensation	6,780,000	9,068,000
Purchase of treasury shares	(2,013,000)	(1,246,000)
Foreign currency translation adjustments	(810,000)	132,000
Capital contribution from non-controlling interest holder	15,000,000
Distributions to non-controlling interest holder	(571,000)
Net (loss) attributable to DreamWorks Animation SKG, Inc.	(54,777,000)	(42,936,000)
Less: Net (loss) income attributable to non-controlling interests	(1,113,000)	520,000
Net (loss) income	(55,890,000)	(42,416,000)
Total DreamWorks Animation SKG, Inc. stockholders’ equity, end of period	1,105,537,000	1,370,074,000
Non-controlling interests, end of period	51,357,000	1,744,000
Total equity	$ 1,156,894,000	$ 1,371,818,000

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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, 2015	Mar. 31, 2014
Earnings Per Share, Basic and Diluted [Line Items]
Net (loss) attributable to DreamWorks Animation SKG, Inc.	$ (54,777)	$ (42,936)
Weighted average common shares outstanding (in shares)	85,734	84,588
Less: Unvested restricted stock (in shares)	(119)	(104)
Denominator for basic and diluted calculation (in shares)	85,615	84,484
Basic and diluted net loss per share (in dollars per share)	$ (0.64)	$ (0.51)

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Investments in Unconsolidated Entities Narrative (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014	Apr. 03, 2013
Investments in and Advances to Affiliates [Line Items]
Other operating income	$ 2,281,000	$ 1,672,000
Revenues	166,530,000	147,241,000
Trade accounts receivable, net of allowance for doubtful accounts	173,267,000		160,379,000
Receivable from distributors, net of allowance for doubtful accounts	214,672,000		271,256,000
ODW Holding Limited [Member]
Investments in and Advances to Affiliates [Line Items]
Trade accounts receivable, net of allowance for doubtful accounts	8,300,000		7,100,000
Receivable from distributors, net of allowance for doubtful accounts	19,700,000		19,000,000
Distribution Arrangement [Member] | ODW Holding Limited [Member]
Investments in and Advances to Affiliates [Line Items]
Revenues	400,000	700,000
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 contributions satisfied	9,400,000
Estimated aggregate value of non-cash contributions				100,000,000
Value of non-cash contributions satisfied	38,700,000
Remaining cash contribution commitment to be paid	40,600,000
Payment period for remaining cash contribution commitment	3 years
Number of in-development film projects	2
Value of consulting and training services rendered	6,700,000
Non-Cash Contributions [Member] | ODW Holding Limited [Member]
Investments in and Advances to Affiliates [Line Items]
Other operating income	$ 2,300,000	$ 1,700,000

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Acquisitions

3 Months Ended

Mar. 31, 2015

Business Combinations [Abstract]

Acquisitions

Acquisitions

Recent Acquisitions

The Company entered into an Agreement and Plan of Merger and Reorganization (the "Big Frame Merger Agreement") pursuant to which, on April 7, 2014 (the "Big Frame Closing Date"), a wholly-owned subsidiary of the Company merged with and into Big Frame, Inc. ("Big Frame"). As a result of this transaction, Big Frame became a wholly-owned subsidiary of the Company. Big Frame is an online multi-channel network. The goodwill that resulted from the acquisition represents the potential synergies between Big Frame and the Company’s multi-channel network presence on the Internet and is not deductible for tax purposes.

On May 20, 2014, the Company acquired certain rights, properties and other items pertaining to Felix the Cat and related characters pursuant to an Asset Purchase Agreement. The acquisition was accounted for as a business combination due to the Company assuming certain licensing arrangements related to the rights. The goodwill that resulted from the acquisition represents potential synergies between the rights acquired and consumer product opportunities. The goodwill is deductible for tax purposes.

During the three months ended March 31, 2015, the Company identified measurement period adjustments to previous purchase accounting estimates for the acquisitions of Big Frame and Felix the Cat, which were primarily related to the finalization of net working capital adjustments. These adjustments were immaterial and applied retrospectively to the acquisition date. Accordingly, the Company's consolidated balance sheet as of December 31, 2014 has been adjusted to reflect the effects of the measurement period adjustments. As a result of the final purchase price allocations, the Company's total cash consideration for these two transactions totaled approximately $34.8 million and the primary assets acquired were identifiable intangible assets of $22.3 millionand resulting goodwill of $11.4 million. The results of operations for these two acquisitions have been included in the Company's consolidated financial statements since their respective closing dates and had an immaterial impact for the three months ended March 31, 2015.

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 AwesomenessTV, Inc. As a result of this transaction, ATV became a wholly-owned subsidiary of the Company. ATV is a multi-media platform company that generates revenues primarily from the production and distribution of content across a variety of channels including theatrical, home entertainment, television and online video-on-demand. 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 a part of the New Media segment.

Contingent Consideration

Pursuant to the Merger Agreement, the Company was originally required to make future cash payments to ATV's former stockholders as part of the total purchase price to acquire ATV. The contingent consideration was to be based on whether ATV increased 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 included, but were 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 estimated the fair value of contingent consideration using significant unobservable inputs ina Monte-Carlo simulation model and based 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 fluctuated if there were 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 were reflected in the Company's results of operations in the period that the change occurred.

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 original Merger Agreement, the maximum contingent consideration that may be earned was $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. The change in estimate was recorded as a a component of general and administrative expenses in the consolidated statements of operations.

On December 11, 2014, the Company and the former ATV stockholders entered into an amendment to the Merger Agreement. The amendment provides for a fixed payment totaling $80.0 million to such stockholders in lieu of the contingent consideration specified in the Merger Agreement. As a result, the Company's contingent liability was reduced to zero and a gain in the amount of $6.8 million and $16.5 million for the three- and 12-month periods ended December 31, 2014, respectively, was recorded in the 2014 consolidated statements of operations as a change in fair value of contingent consideration.

Additionally, on December 11, 2014, the Company entered into a Unit Purchase Agreement (the "Unit Purchase Agreement") with an affiliate of Hearst Corporation ("Hearst"). Pursuant to the Unit Purchase Agreement, Hearst acquired a 25% equity interest in a newly formed joint venture ("ATV Joint Venture") conducting the ATV business for a purchase price of $81.25 million. The Company continues to retain control over ATV, and accordingly, the transaction (including the tax effect) was recorded within equity. The Company and Hearst plan to work together to support ATV's efforts to enter into new content channels, broaden its audience and expand its geographic reach. ATV will also gain access to Hearst's subscription video-on-demand technology.

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Antidilutive Securities (Details) (Stock Compensation Plan [Member]) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	1,135	368
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	1,135	344
Stock Appreciation Rights (SARs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities	0	24

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Investments in Unconsolidated Entities (Details) (USD $)	3 Months Ended
	Mar. 31, 2015		Dec. 31, 2014		Apr. 03, 2013
Schedule of Cost and Equity Method Investments [Line Items]
Total equity method investments	$ 14,316,000		$ 23,451,000
Total cost method investments	12,379,000		11,879,000
Investments in unconsolidated entities	26,695,000		35,330,000
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	14,305,000		17,422,000
All Other [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Total equity method investments	11,000	[1]	6,029,000	[1]
All Other [Member] | Maximum [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Equity method investment, ownership percentage	50.00%	[1]
All Other [Member] | Minimum [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Equity method investment, ownership percentage	17.50%	[1]
Unidentified Equity Method Investee [Member]
Schedule of Cost and Equity Method Investments [Line Items]
Fair value of equity method investment	0
Recorded impairment charge on equity method investment	$ 5,100,000

[1] As of March 31, 2015, the Company determined that one of its equity method investments was impaired and that the carrying value would not be recoverable, primarily due to the Company's concerns related to the investee's financial condition. As a result, the Company determined that the fair value of the investment was zero and, accordingly, it recorded an impairment charge in the amount of $5.1 million related to such investment. Fair value was estimated using significant unobservable inputs.

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Investments in Unconsolidated Entities (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015	2015		2014
Oriental DreamWorks Holding Limited	45.45%	$	14,305	$	17,422
All Other(1)	17.5%-50.0%	11		6,029
Total equity method investments		14,316		23,451
Total cost method investments		12,379		11,879
Total investments in unconsolidated entities		$	26,695	$	35,330

____________________

⁽¹⁾   As of March 31, 2015, the Company determined that one of its equity method investments was impaired and that the carrying value would not be recoverable, primarily due to the Company's concerns related to the investee's financial condition. As a result, the Company determined that the fair value of the investment was zero and, accordingly, it recorded an impairment charge in the amount of $5.1 million related to such investment. Fair value was estimated using significant unobservable inputs.

Schedule of losses from equity method investments

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

	Three Months Ended
	March 31,
	2015		2014
Oriental DreamWorks Holding Limited(1)	$	5,398	$	2,210
All Other	964		1,050
Loss from equity method investees	$	6,362	$	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, 2014 to February 28, 2015.

Schedule of equity method investment information

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

	March 31,			December 31,
	2015			2014
Company's venture-level equity	$	40,403		$	46,345
Technology and intellectual property licenses(1)	(10,489		)	(12,714		)
Other(2)	(15,609		)	(16,209		)
Total ODW investment recorded	$	14,305		$	17,422

____________________

⁽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.

The following table presents summarized financial information for the Company's equity method investees presented in the table above (in thousands):

	Three Months Ended
	March 31,
	2015		2014
Revenues	$	2,618	$	835
Costs of revenues	$	2,707	$	687
Net loss	$	14,506	$	6,774

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of definite-lived assets

In addition, intangible assets included 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, 2015:
Character rights	13.9	$	99,000	$	(16,381	)	$	(2,521	)	$	80,098
Distribution rights	11.2	30,000		(2,371		)	—			27,629
Programming content	2.0	11,200		(10,733		)	—			467
Trademarks and trade names	10.0	1,410		(251		)	—			1,159
Other intangibles	4.4	2,700		(919		)	—			1,781
Total		$	144,310	$	(30,655	)	$	(2,521	)	$	111,134
As of December 31, 2014:
Character rights	13.9	$	99,000	$	(15,101	)	$	(568	)	$	83,331
Distribution rights	11.2	30,000		(1,604		)	—			28,396
Programming content	2.0	11,200		(9,333		)	—			1,867
Trademarks and trade names	10.0	1,410		(216		)	—			1,194
Other intangibles	4.4	2,700		(747		)	—			1,953
Total		$	144,310	$	(27,001	)	$	(568	)	$	116,741

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Reportable Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Segment Reporting Information [Line Items]
Revenues	$ 166,530		$ 147,241
Total segment gross profit (loss)	53,576	[1]	(13,448)	[1]
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Abstract]
Selling and marketing	1,686	[2]	1,971	[2]
General and administrative	89,142		47,708
Product development	332		540
Other operating income	(2,281)		(1,672)
Non-operating expenses (income)	11,825		(372)
Loss from equity method investees	6,362		3,260
Loss before income taxes	(53,490)		(64,883)
Feature Films [Member]
Segment Reporting Information [Line Items]
Revenues	128,020		110,097
Total segment gross profit (loss)	40,977	[1]	(25,388)	[1]
Television Series and Specials [Member]
Segment Reporting Information [Line Items]
Revenues	18,013		17,969
Total segment gross profit (loss)	3,451	[1]	5,759	[1]
Consumer Products [Member]
Segment Reporting Information [Line Items]
Revenues	15,116		12,067
Total segment gross profit (loss)	6,538	[1]	6,004	[1]
New Media [Member]
Segment Reporting Information [Line Items]
Revenues	4,583		4,093
Total segment gross profit (loss)	2,115	[1]	(80)	[1]
All Other [Member]
Segment Reporting Information [Line Items]
Revenues	798		3,015
Total segment gross profit (loss)	$ 495	[1]	$ 257	[1]

[1] The Company defines segment gross profit as segment revenues less segment costs of revenues (which is comprised of costs of revenues and certain costs classified as a component of "selling and marketing" in its statements of operations). Refer to Note 1 for further information related to changes made to the Company's statement of operations presentation.

[2] Represents certain selling and marketing expenses that are not included as a component of segment gross profit due to the general nature of such expenses.

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Investments in Unconsolidated Entities Loss From Equity Investments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014
Schedule of Income (Loss) From Equity Method Investments [Line Items]
Loss from equity method investees	$ 6,362		$ 3,260
ODW Holding Limited [Member]
Schedule of Income (Loss) From Equity Method Investments [Line Items]
Loss from equity method investees	5,398	[1]	2,210	[1]
All Other [Member]
Schedule of Income (Loss) From Equity Method Investments [Line Items]
Loss from equity method investees	$ 964		$ 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, 2014 to February 28, 2015.

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Accrued Liabilities (Tables)

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Schedule of accrued liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2015		December 31, 2014
Employee compensation	$	64,281	$	67,084
Participations and residuals	50,574		50,646
Interest payable	2,715		7,951
Deferred rent	10,639		11,049
Other accrued liabilities	35,884		53,487
Total accrued liabilities	$	164,093	$	190,217

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Deferred Revenue and Other Advances (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015 and December 31, 2014 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, 2015 and 2014 (in thousands):

					Amounts Earned
					Three Months Ended
	March 31,		December 31,		March 31,
	2015		2014		2015		2014(3)
Deferred Revenue(1)	$	23,693	$	1,074	$	118	$	5,908
Strategic Alliance/Development Advances(2)	417		1,667		7,684		7,138
Other	26,942		31,154		14,547		21,626
Total deferred revenue and other advances	$	51,052	$	33,895

  ____________________

⁽¹⁾  Deferred revenue consists of those arrangements related to the licensing of content for distribution in the home entertainment, television and new media markets.

⁽²⁾  Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2015 and 2014, $4.0 million and $2.4 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.5 million and $1.0 million, respectively, were recorded as a reduction to other assets. During the three months ended March 31, 2015 and 2014, $0.9 million and $0.5 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.6 million and $1.1 million, respectively, were recorded as a reduction to operating expenses.

⁽³⁾  Of the total amounts earned in "Other," 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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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In April 2015, the FASB issued an accounting standards update relating to the presentation of debt issuance costs. The accounting update requires companies to present debt issuance costs related to a recognized debt liability presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2016. The adoption of this guidance is expected to have an immaterial impact on the Company's consolidated financial statements.

In February 2015, the FASB issued an accounting standards update to amend existing guidance relating to the evaluation of certain legal entities for potential consolidation. The amendments modify the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities. In addition, the amendments modify the guidance on evaluating whether a fee paid to a decision maker or a service provider represents a variable interest and whether it should be included in the evaluation of the economics criterion in determining which party is the primary beneficiary of a VIE. In accordance with the accounting standards update, companies are required to reevaluate all legal entities that are considered VIEs to determine whether there is a change in the conclusion as to whether the VIE should be consolidated. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2016. The Company is currently evaluating the impact that the new standard will have on its consolidated financial statements.

In June 2014, the FASB issued an accounting standards update relating to the accounting for certain share-based awards. The accounting update states that, when the terms of an award provide that a performance target could be achieved after the requisite service period, the performance target should be treated as a performance condition that affects vesting and should not be reflected in the grant-date fair value. Companies are permitted to apply the guidance either prospectively to all awards granted or modified after the effective date or retrospectively to awards outstanding as of the beginning of the earliest annual period presented. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company adopted the new guidance upon issuance of the accounting standards update, which did not have an impact on its consolidated financial statements as the Company's existing accounting policy was already consistent with this guidance.

In May 2014, the FASB issued an accounting standards update to provide companies with a single model for use in accounting for revenue from contracts with customers. Once it becomes effective, the new guidance will replace most existing revenue recognition guidance in U.S. GAAP, including industry-specific guidance. The core principle of the model is to recognize revenue when control of goods or services transfers to the customer and in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services that have transferred. Under current U.S. GAAP, the Company recognizes revenue when the risks and rewards of ownership transfer to the customer. In addition, the new guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. The guidance is effective for the Company's fiscal year beginning January 1, 2017, including interim periods within that fiscal year. Early adoption is not permitted. However, on April 1, 2015, the FASB voted to propose a one-year deferral to the effective date, but to permit entities to adopt one year earlier if they choose (i.e., the original effective date). The proposal will be subject to the FASB's due process requirement, which includes a period for public comments. Companies are permitted to either apply the guidance retrospectively to all prior periods presented or, alternatively, apply the guidance in the year of adoption with the cumulative effect recognized at the date of initial application (referred to as the modified retrospective approach). The Company is in the process of determining the method of adoption, as well as evaluating the impact that the new standard will have on its consolidated financial statements.

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Financing Arrangements (Tables)

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Schedule of payments under lease financing obligation

As of March 31, 2015, payments required on the lease financing obligations were as follows (in thousands):

2015	$	8,780
2016	13,335
2017	13,535
2018	13,738
2019	13,944
2020 and thereafter	322,269
Total payments	385,601
Less: interest implicit in obligation	(201,785		)
Total lease financing obligation	$	183,816

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, 2015		December 31, 2014			Interest Rate at March 31, 2015	2015		2014
Senior Unsecured Notes	$	300,000	$	300,000	August 2020	6.875%	$	4,446	$	2,234
Revolving Credit Facility	$	80,000	$	215,000	February 2020	2.67%	$	1,340	$	375
Lease Financing Obligation	$	183,816	N/A		February 2035	6.70%	$	1,141	N/A

____________________

N/A: Not applicable

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Financial Instruments (Details) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Senior unsecured notes, fair value	$ 307,800,000
Senior unsecured notes, carrying value	300,000,000	300,000,000
Lease financing obligation, fair value	188,500,000
Lease financing obligation, carrying value	$ 183,816,000	$ 0

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Stock-Based Compensation Narrative (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-based compensation, allocation of recognized period costs, capitalized amount	$ 2.3	$ 3.7
Stock-based compensation, nonvested awards, total compensation cost not yet recognized	$ 72.5
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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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Assets
Cash and cash equivalents	$ 89,662	$ 34,227
Restricted cash	14,907	25,244
Trade accounts receivable, net of allowance for doubtful accounts (see Note 7 for related party amounts)	173,267	160,379
Receivables from distributors, net of allowance for doubtful accounts (see Note 7 for related party amounts)	214,672	271,256
Film and other inventory costs, net	830,692	827,890
Prepaid expenses	33,478	17,555
Other assets	47,406	40,408
Investments in unconsolidated entities	26,695	35,330
Property, plant and equipment, net of accumulated depreciation and amortization	164,171	180,607
Intangible assets, net of accumulated amortization	180,534	186,141
Goodwill	190,668	190,668
Total assets	1,966,152	1,969,705
Liabilities:
Accounts payable	9,781	9,031
Accrued liabilities	164,093	190,217
Payable to former stockholder	3,128	10,455
Deferred revenue and other advances	51,052	33,895
Revolving credit facility	80,000	215,000
Lease financing obligation	183,816	0
Senior unsecured notes	300,000	300,000
Deferred taxes, net	17,388	16,709
Total liabilities	809,258	775,307
Commitments and contingencies (Note 17)
DreamWorks Animation SKG, Inc. Stockholders' Equity:
Additional paid-in capital	1,179,584	1,172,806
Accumulated other comprehensive loss	(2,637)	(1,827)
Retained earnings	708,007	762,784
Less: Class A Treasury common stock, at cost, 28,019,254 and 27,884,524 shares, as of March 31, 2015 and December 31, 2014, respectively	(780,554)	(778,541)
Total DreamWorks Animation SKG, Inc. stockholders' equity	1,105,537	1,156,357
Non-controlling interests	51,357	38,041
Total equity	1,156,894	1,194,398
Total liabilities and equity	1,966,152	1,969,705
Common Class A [Member]
DreamWorks Animation SKG, Inc. Stockholders' Equity:
Common stock	1,059	1,057
Common Class B [Member]
DreamWorks Animation SKG, Inc. Stockholders' Equity:
Common stock	$ 78	$ 78

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Investments in Unconsolidated Entities Investments in Unconsolidated Entities Summarized Financial Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Investments in Unconsolidated Entities [Abstract]
Revenues	$ 2,618	$ 835
Costs of revenues	2,707	687
Net loss	$ 14,506	$ 6,774

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating activities
Net loss	$ (55,890)	$ (42,416)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization and write-off of film and other inventory costs	93,352	145,412
Other impairments and write-offs	5,064	0
Amortization of intangible assets	3,977	3,154
Depreciation and amortization	13,374	1,081
Amortization of deferred financing costs	571	242
Stock-based compensation expense	4,399	5,309
Revenue earned against deferred revenue and other advances	(16,469)	(16,188)
Income related to investment contributions	(2,281)	(1,672)
Loss from equity method investees	6,362	3,260
Deferred taxes, net	679	(22,314)
Changes in operating assets and liabilities:
Restricted cash	10,337	0
Trade accounts receivable	(16,704)	(19,091)
Receivables from distributors	54,648	79,267
Film and other inventory costs	(89,192)	(122,837)
Prepaid expenses and other assets	(20,387)	(4,870)
Accounts payable and accrued liabilities	(25,015)	(48,594)
Payable to former stockholder	(7,328)	1,080
Income taxes payable/receivable, net	305	(658)
Deferred revenue and other advances	41,760	27,348
Net cash provided by (used in) operating activities	1,562	(12,487)
Investing activities
Investments in unconsolidated entities	(510)	(7,000)
Purchases of property, plant and equipment	(1,845)	(5,711)
Net cash used in investing activities	(2,355)	(12,711)
Financing activities
Proceeds from stock option exercises	0	261
Deferred financing costs	(5,729)	0
Purchase of treasury stock	(2,013)	(1,278)
Contingent consideration payment	(335)	0
Borrowings from revolving credit facility	340,405	0
Repayments of borrowings from revolving credit facility	(475,405)	0
Proceeds from lease financing obligation	185,000	0
Repayments of lease financing obligation	(1,184)	0
Capital contribution from non-controlling interest holder	15,000	0
Distributions to non-controlling interest holder	(571)	0
Net cash provided by (used in) financing activities	55,168	(1,017)
Effect of exchange rate changes on cash and cash equivalents	1,060	396
Increase (decrease) in cash and cash equivalents	55,435	(25,819)
Cash and cash equivalents at beginning of period	34,227	95,467
Cash and cash equivalents at end of period	89,662	69,648
Non-cash investing activities:
Intellectual property and technology licenses granted in exchange for equity interest	2,225	1,294
Services provided in exchange for equity interest	55	383
Total non-cash investing activities	2,280	1,677
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes, net of amounts refunded	1,441	503
Cash paid during the period for interest, net of amounts capitalized	$ 12,132	$ 7,515

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Concentrations of Credit Risk (Details)	3 Months Ended	12 Months Ended	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014
Accounts Receivable [Member] | Netflix [Member] | Credit Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	65.00%	49.00%
Fox [Member] | Revenues [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	26.00%		14.00%
Paramount [Member] | Revenues [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	11.00%		28.00%
Netflix [Member] | Revenues [Member]
Concentration Risk [Line Items]
Concentration risk, percentage	44.00%		41.00%

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Reportable Segments (Tables)

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Schedule of segment reporting information

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

		Three Months Ended
		March 31,
		2015			2014
Revenues
	Feature Films	$	128,020		$	110,097
	Television Series and Specials	18,013			17,969
	Consumer Products	15,116			12,067
	New Media	4,583			4,093
	All Other	798			3,015
Total consolidated revenues		$	166,530		$	147,241
Segment gross profit (loss)(1)
	Feature Films	$	40,977		$	(25,388	)
	Television Series and Specials	3,451			5,759
	Consumer Products	6,538			6,004
	New Media	2,115			(80		)
	All Other	495			257
Total segment gross profit (loss)		$	53,576		$	(13,448	)
Reconciliation to consolidated loss before income taxes:
	Selling and marketing expenses(2)	1,686			1,971
	General and administrative expenses	89,142			47,708
	Product development expense	332			540
	Other operating income	(2,281		)	(1,672		)
	Non-operating expenses (income)	11,825			(372		)
	Loss from equity method investees	6,362			3,260
Total consolidated loss before income taxes		$	(53,490	)	$	(64,883	)

____________________

⁽¹⁾  The Company defines segment gross profit as segment revenues less segment costs of revenues (which is comprised of costs of revenues and certain costs classified as a component of "selling and marketing" in its statements of operations). Refer to Note 1 for further information related to changes made to the Company's statement of operations presentation.

⁽²⁾  Represents certain selling and marketing expenses that are not included as a component of segment gross profit due to the general nature of such expenses.

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		New Media		Total
Balance as of March 31, 2015 and December 31, 2014	$	43,995	$	6,111	$	12,219	$	128,343	$	190,668

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Restructuring and Related Charges Restructuring Costs (Details) (2015 Restructuring Plan [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
2015 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Employee termination costs	$ 4,587
Relocation and other employee-related costs	1,496
Accelerated depreciation and amortization charges	9,279
Total restructuring and related charges	$ 15,362

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Concentrations of Credit Risk

3 Months Ended

Mar. 31, 2015

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 primary third-party distributors, Fox and Paramount. Fox represented approximately 26% and 14% of total revenue for the three-month periods ended March 31, 2015 and 2014, respectively. Paramount represented approximately 11% and 28% of total revenue for the three-month periods ended March 31, 2015 and 2014, respectively. In addition, during the three months ended March 31, 2015 and 2014, 44% and 41%, respectively, of the Company's revenues were earned through license arrangements with Netflix, Inc. ("Netflix").

As of March 31, 2015 and December 31, 2014, approximately 65% and 49%, respectively, of the Company's trade accounts receivable balance consisted of long-term receivables related to licensing arrangements with Netflix.

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Earnings Per Share Data (Tables)

3 Months Ended

Mar. 31, 2015

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 per share (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2015			2014
Numerator:
Net loss attributable to DreamWorks Animation SKG, Inc.	$	(54,777	)	$	(42,936	)
Denominator:
Weighted average common shares and denominator for basic and diluted calculation:
Weighted average common shares outstanding	85,734			84,588
Less: Unvested restricted stock	(119		)	(104		)
Denominator for basic and diluted calculation	85,615			84,484
Net loss per share—basic and diluted	$	(0.64	)	$	(0.51	)

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. Due to the Company's loss for each of the three-month periods ended March 31, 2015 and 2014, all potential common stock equivalents are anti-dilutive.

	Three Months Ended
	March 31,
	2015	2014
Options to purchase shares of common stock and restricted stock awards	1,135	344
Stock appreciation rights	—	24
Total	1,135	368

Number of equity awards that are contingently issuable

The following table sets forth (in thousands) the number of equity awards that are contingently issuable (assuming the required performance conditions had been satisfied as of the dates shown in the table) and that could potentially dilute earnings per share in future periods provided that the Company has net income:

	Three Months Ended
	March 31,
	2015	2014
Options to purchase shares of common stock and restricted stock awards	1,372	941

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Earnings Per Share Data

3 Months Ended

Mar. 31, 2015

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 per share (in thousands, except per share amounts):

	Three Months Ended
	March 31,
	2015			2014
Numerator:
Net loss attributable to DreamWorks Animation SKG, Inc.	$	(54,777	)	$	(42,936	)
Denominator:
Weighted average common shares and denominator for basic and diluted calculation:
Weighted average common shares outstanding	85,734			84,588
Less: Unvested restricted stock	(119		)	(104		)
Denominator for basic and diluted calculation	85,615			84,484
Net loss per share—basic and diluted	$	(0.64	)	$	(0.51	)

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. Due to the Company's loss for each of the three-month periods ended March 31, 2015 and 2014, all potential common stock equivalents are anti-dilutive.

	Three Months Ended
	March 31,
	2015	2014
Options to purchase shares of common stock and restricted stock awards	1,135	344
Stock appreciation rights	—	24
Total	1,135	368

The following table sets forth (in thousands) the number of equity awards that are contingently issuable (assuming the required performance conditions had been satisfied as of the dates shown in the table) and that could potentially dilute earnings per share in future periods provided that the Company has net income:

	Three Months Ended
	March 31,
	2015	2014
Options to purchase shares of common stock and restricted stock awards	1,372	941

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Business and Basis of Presentation

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

Business and Basis of Presentation

Business

The business of DreamWorks Animation SKG, Inc. ("DreamWorks Animation" or the "Company") is primarily devoted to the development, production and exploitation of animated films (and other audiovisual programs) and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising, licensing and other markets. The Company continues to expand its library and increase the value of its intellectual property assets by developing and producing new episodic series and other non-theatrical content 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 theatrically released during the five-year period beginning on January 1, 2013. As of July 1, 2014, Fox has also been licensed and engaged to render fulfillment services for the Company’s feature films theatrically released prior to January 1, 2013 in theatrical, non-theatrical, home entertainment and digital media. 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, subject to licenses approved by the Company during such period that extend beyond such period.

Also beginning in 2013, the Company's films are distributed in China and South Korea territories by separate distributors in each of these territories. 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 a subsidiary of Oriental DreamWorks Holding Limited ("ODW"), which is a related party.

Lastly, the Company continues to derive revenues from the distribution by Paramount Pictures Corporation, a subsidiary of Viacom Inc., and its affiliates (collectively, "Paramount") of its feature films released prior to January 1, 2013 pursuant to a distribution agreement and a fulfillment services agreement (collectively, the "Paramount Agreements"). As of July 1, 2014, the Company reacquired certain distribution rights to its feature films from Paramount, which rights have been licensed to Fox (as noted above). The amount paid to reacquire these rights was recorded as a definite-lived intangible asset (see Note 6). Paramount will continue to exploit and render fulfillment services in television and related media for feature films released prior to January 1, 2013 until the date that is 16 years after such film's theatrical release, and will continue to exploit and service certain other agreements with Paramount's sublicensees that remain in place after July 1, 2014.

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 ("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, 2015 and for the three months ended March 31, 2015 and 2014 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, 2014 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, 2014 (the "2014 Form 10-K").

Except as described below, 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 deliveries of episodic content.

Reclassifications

Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the Company's 2015 presentation.

In addition, the Company has historically presented exploitation costs (e.g., advertising and marketing) that are directly attributable to its feature films, television series/specials or live performances as a component of costs of revenues. Due to the Company's continued business diversification efforts and the growth in the variety of business lines in which the Company now operates, the Company's advertising and marketing efforts have become less correlated with its various revenue streams. As a result, the Company has determined that it is more meaningful to present all marketing and distribution expenses incurred directly by the Company as a single line item in its statements of operations. Such selling and marketing expenses primarily consist of advertising and marketing costs, promotion costs, distribution fees and sales commissions to outside third parties. To conform to the new presentation, the Company's statements of operations now includes a line item entitled "selling and marketing expenses," which consist of certain (i) distribution expenses incurred directly by the Company that were previously classified in costs of revenues and (ii) general, non-direct advertising and marketing expenses previously classified in a line item entitled "selling, general and administrative expenses." Distribution and marketing expenses that are incurred by the Company's primary distributors (such as Fox and Paramount) are not included in this new line item because the Company records revenues from these distributors only after the distributors have recouped such costs (refer to the Company's significant accounting policies in Note 2 of the Company's 2014 Form 10-K for further information).

Further, given the nature of the Company's business, the Company has determined that consolidated "gross profit" is no longer a meaningful metric. In order to align the financial statement presentation with the nature of the Company's business, the Company will no longer present this line item in its statements of operations.

Revision

As discussed in the immediately preceding section, the Company's statements of operations presentation historically included advertising and marketing expenses directly attributable to its feature films, television series/specials or live performances in costs of revenues to arrive at "gross profit." As a result, advertising and marketing expenses were incorrectly included in the computation of "gross profit." Accordingly, the Company has revised its prior presentation of advertising and marketing expenses appearing in the accompanying financial statements by decreasing costs of revenues (with a corresponding increase in the new line item entitled "selling and marketing expenses") for the three months ended March 31, 2014 in the amount of $2.5 million. The Company assessed the materiality of this revision on previously issued financial statements and concluded that the revision was not material to the consolidated financial statements because, among other things, there was no impact on previously reported operating income or net income, for any period presented. The Company will continue to revise the classification of previously reported advertising and marketing expenses as they are reported in future quarterly and annual filings.

Segment Gross Profit

The Company continues to believe that advertising and marketing expenses directly attributable to its feature films or television series/specials are an important component in the evaluation of segment profitability. Accordingly, the Company's segment gross profit continues to include the advertising and marketing expenses, as well as other selling and distribution expenses, previously included within costs of revenues. This does not change the amounts of the previously reported segment profitability metric used by the Company's chief operating decision makers to review segment profitability. See Note 14 for the Company's reportable segment disclosures.

Consolidation

The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animationand its wholly-owned and majority-owned subsidiaries.The Company 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, 2015, 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 remaining contributions (which represent the maximum exposure to the Company).

The Company also determined that the entity with which it entered into a lease financing obligation is a VIE (see Note 10). The Company concluded that it is not the primary beneficiary of this entity as it does not have the ability to influence or control the entity. As a result, this entity is not consolidated by the Company. The Company's maximum exposure is related to the Sharing Agreement (as further described in Note 10).

Restricted Cash

Restricted cash primarily represents cash accounts maintained by the ATV Joint Venture (refer to Note 3) in which the Company owns a 75% interest. Pursuant to the venture's operating agreement, $25.0 million of the initial cash contribution cannot be commingled with other corporate cash accounts and can only be used to fund the working capital of the ATV Joint Venture. As of March 31, 2015, the remaining balance of this restricted cash amount was $14.9 million.

Other

During the three months ended March 31, 2015, the Company and a third-party entered into agreements forming a new entity to commercialize one of the Company's technology initiatives. The new entity is majority-owned and controlled by the Company and, accordingly, is consolidated by the Company. The Company's consolidated financial statements include a cash contribution from the non-controlling interest holder in the amount of $15.0 million made at the time of formation of the new entity.

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 and television product;

• 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 the fair value of reporting units for purposes of testing goodwill for impairment;

• 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, 2015	Dec. 31, 2014
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	350,000,000	350,000,000
Common stock, shares issued	105,915,146	105,718,014
Class A Treasury common stock, shares	28,019,254	27,884,524
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 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, 2015

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, adjusted for the tax effects of items that relate discretely to the interim period, if any. However, if minor changes to forecasted annual pre-tax earnings have a significant effect on the estimated annual effective tax rate, the Company may determine that this method would not be appropriate and that a different method should be applied. Furthermore, 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 (refer to the Company's 2014 Form 10-K for a more detailed description). The Company is obligated to remit to the affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax, California franchise tax and certain other related tax benefits. Due to the effect of this arrangement on the Company's provision for income taxes, the Company also combines the effect of the increase/decrease in income tax benefit payable to former stockholder (referred to as the combined effective tax rate).

The Company utilized the annual effective tax rate method (as described above) to calculate the income tax provision for the three months ended March 31, 2015. However, as it relates to 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 period method, the Company determines the income tax provision based upon actual results as if the interim period were an annual period.

For the three months ended March 31, 2015, the Company recorded a provision for income taxes of $2.4 million, or an effective tax rate of (4.5)%. For the three months ended March 31, 2015, the Company's combined effective tax rate was also (4.5)%. For the three months ended March 31, 2014, the Company recorded a benefit for income taxes of $22.5 million, or an effective tax rate of 34.1%. However, the combined effective tax rate for the three months ended March 31, 2014 was 35.5%. The effective tax rate and the combined effective tax rate for the three months ended March 31, 2015 was primarily attributable to foreign taxes, as well as the effect of a valuation allowance. The difference in the Company's effective tax rate and combined effective tax rate for the three months ended March 31, 2015 compared to the rates during the three months ended March 31, 2014 was primarily due to the valuation allowance established, during the three months ended December 31, 2014, against the Company's deferred tax assets.

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 2009 remain open to audit. The Company's India subsidiary's income tax returns are currently under examination for the tax years ended March 31, 2012 through 2013.

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	Apr. 17, 2015
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2015
Document Fiscal Year Focus	2015
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
Common Class A [Member]
Entity Common Stock, Shares Outstanding		77,895,892
Common Class B [Member]
Entity Common Stock, Shares Outstanding		7,838,731

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Stockholders' Equity and Non-controlling Interests

3 Months Ended

Mar. 31, 2015

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 authorized a 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, 2015 and 2014, the Company did not repurchase any shares of its Class A Common Stock. As of March 31, 2015, 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 are presented as a separate component of equity. A non-controlling interest represents the other equity holder's interest in a joint venture that the Company consolidates. The net income or loss 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, 2015 and 2014 (in thousands):

	DreamWorks Animation SKG, Inc. Stockholders' Equity			Non-controlling Interests			Total Equity
Balance as of December 31, 2014	$	1,156,357		$	38,041		$	1,194,398
Stock-based compensation	6,780			—			6,780
Purchase of treasury shares	(2,013		)	—			(2,013		)
Foreign currency translation adjustments	(810		)	—			(810		)
Capital contribution from non-controlling interest holder	—			15,000			15,000
Distributions to non-controlling interest holder	—			(571		)	(571		)
Net loss	(54,777		)	(1,113		)	(55,890		)
Balance as of March 31, 2015	$	1,105,537		$	51,357		$	1,156,894
Balance as of December 31, 2013	$	1,404,795		$	1,224		$	1,406,019
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

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Statement [Abstract]
Revenues (see Note 7 for related party amounts)	$ 166,530	$ 147,241
Costs of revenues	106,165	156,398
Selling and marketing	8,475	6,262
General and administrative	89,142	47,708
Product development	332	540
Other operating income (see Note 7 for related party amounts)	(2,281)	(1,672)
Operating loss	(35,303)	(61,995)
Non-operating income (expense):
Interest expense, net	(6,334)	(1,773)
Other (expense) income, net	(5,466)	1,218
(Increase) decrease in income tax benefit payable to former stockholder	(25)	927
Loss before loss from equity method investees and income taxes	(47,128)	(61,623)
Loss from equity method investees	6,362	3,260
Loss before income taxes	(53,490)	(64,883)
Provision (benefit) for income taxes	2,400	(22,467)
Net loss	(55,890)	(42,416)
Less: Net (loss) income attributable to non-controlling interests	(1,113)	520
Net loss attributable to DreamWorks Animation SKG, Inc.	$ (54,777)	$ (42,936)
Net loss per share of common stock attributable to DreamWorks Animation SKG, Inc.
Basic and diluted net loss per share (in dollars per share)	$ (0.64)	$ (0.51)
Shares used in computing net loss per share
Basic and diluted (in shares)	85,615	84,484

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Intangible Assets

3 Months Ended

Mar. 31, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

As of March 31, 2015 and December 31, 2014, intangible assets included $69.4 million of indefinite-lived intangible assets. In addition, intangible assets included 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, 2015:
Character rights	13.9	$	99,000	$	(16,381	)	$	(2,521	)	$	80,098
Distribution rights	11.2	30,000		(2,371		)	—			27,629
Programming content	2.0	11,200		(10,733		)	—			467
Trademarks and trade names	10.0	1,410		(251		)	—			1,159
Other intangibles	4.4	2,700		(919		)	—			1,781
Total		$	144,310	$	(30,655	)	$	(2,521	)	$	111,134
As of December 31, 2014:
Character rights	13.9	$	99,000	$	(15,101	)	$	(568	)	$	83,331
Distribution rights	11.2	30,000		(1,604		)	—			28,396
Programming content	2.0	11,200		(9,333		)	—			1,867
Trademarks and trade names	10.0	1,410		(216		)	—			1,194
Other intangibles	4.4	2,700		(747		)	—			1,953
Total		$	144,310	$	(27,001	)	$	(568	)	$	116,741

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Film and Other Inventory Costs

3 Months Ended

Mar. 31, 2015

Film Costs [Abstract]

Film And Other Inventory Costs

Film and Other Inventory Costs

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

	March 31, 2015		December 31, 2014
In release, net of amortization:
Feature films	$	454,158	$	392,186
Television series and specials	72,733		67,803
In production:
Feature films	146,574		206,240
Television series and specials	81,873		62,426
In development:
Feature films	63,979		88,200
Television series and specials	612		1,118
Product inventory and other(1)	10,763		9,917
Total film, television and other inventory costs, net	$	830,692	$	827,890

 ____________________

⁽¹⁾  As of March 31, 2015 and December 31, 2014, this category includes $6.5 million and $6.7 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution primarily in the home entertainment market.

The Company anticipates that approximately46% and 79%of the above "in release" film and other inventory costs as of March 31, 2015 will be amortized over the next 12 months and three years, respectively.

During the three months ended March 31, 2015, impairment charges recorded on film and other inventory costs were immaterial.

For the three months ended March 31, 2014, 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 as of March 31, 2014 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, the three-month period ended March 31, 2014 includes an impairment charge of $57.1 million.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

Shareholder Class Action and Derivative Lawsuits. In August 2014, two putative shareholder class action lawsuits alleging violations of federal securities laws were filed against the Company and several of its officers and directors in the U.S. District Court for the Central District of California. These lawsuits have been consolidated and generally assert that, between October 29, 2013 and July 29, 2014, the Company and certain of its officers and directors made alleged material misstatements and omissions regarding the financial performance of Turbo. In September 2014, a putative shareholder derivative action was filed in the U.S. District Court for the Central District of California against the Company (nominally and in a derivative capacity) and several of its officers and directors for alleged violations of fiduciary duties to the Company for, among other things, permitting the Company to issue alleged material misstatements and omissions regarding the financial performance of Turbo. This lawsuit generally asserts, purportedly on the Company's behalf, the same underlying factual allegations as those made in the class action lawsuits discussed above and has been deemed a related case. These lawsuits seek to recover damages on behalf of shareholders as well as other equitable and unspecified monetary relief. On April 1, 2015, the court granted the Company's motion to dismiss the consolidated securities class action lawsuit, with leave to amend. On April 16, 2015, the plantiffs informed the Company that they had elected not to amend their complaint, and the case was dismissed on April 24, 2015. The derivative class action has not been dismissed. The Company intends to vigorously defend against these lawsuits. At this time the Company is unable to reasonably predict the ultimate outcome of the lawsuits, nor can it reasonably estimate a range of possible loss.

Antitrust Class Action. In September and October 2014, three putative class action lawsuits alleging violations of federal and state antitrust laws were filed against the Company and various other companies in the U.S. District Court for the Northern District of California. These lawsuits have been consolidated and generally assert that the defendants agreed to restrict competition through non-solicitation agreements and agreements to fix wage and salary ranges. The lawsuits seek to recover damages on behalf of all persons who worked for the defendants at any time from 2004 to the present. The Company intends to vigorously defend against these lawsuits. At this time the Company is unable to reasonably predict the ultimate outcome of these lawsuits, nor can it reasonably estimate a range of possible loss.

Other Legal Matters. 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 (other than those previously described) are likely to have a material effect on its financial position, results of operations or cash flows.

Other Commitments and Contingencies

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.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

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 and is adjusted to reflect the estimated probability of vesting. 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 (for example, during the year ended December 31, 2014, the Company granted awards that vest only if the Company achieves positive earnings before interest and taxes for the year ending December 31, 2015). 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, 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, 2015 and 2014, respectively, were as follows (in thousands):

	Three Months Ended
	March 31,
	2015		2014
Total stock-based compensation	$	4,399	$	5,309
Tax impact(1)	198		(1,885		)
Reduction in net income, net of tax	$	4,597	$	3,424

 ____________________

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

Stock-based compensation cost capitalized as a part of film costs was $2.3 million and $3.7 million for the three-month periods ended March 31, 2015 and 2014, 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, 2015 and 2014:

	Three Months Ended
	March 31,
	Number Granted	Weighted Average Grant-Date Fair Value
	(in thousands)
2015
Restricted stock units	777	$	21.41
2014
Restricted stock and restricted stock units	224	$	29.91

As of March 31, 2015, 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 $72.5 million and will be amortized on a straight-line basis, or using a graded-attribution method for certain performance-based awards, over a weighted average period of 1.9 years.

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Deferred Revenue and Other Advances

3 Months Ended

Mar. 31, 2015

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, 2015 and December 31, 2014 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, 2015 and 2014 (in thousands):

					Amounts Earned
					Three Months Ended
	March 31,		December 31,		March 31,
	2015		2014		2015		2014(3)
Deferred Revenue(1)	$	23,693	$	1,074	$	118	$	5,908
Strategic Alliance/Development Advances(2)	417		1,667		7,684		7,138
Other	26,942		31,154		14,547		21,626
Total deferred revenue and other advances	$	51,052	$	33,895

  ____________________

⁽¹⁾  Deferred revenue consists of those arrangements related to the licensing of content for distribution in the home entertainment, television and new media markets.

⁽²⁾  Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2015 and 2014, $4.0 million and $2.4 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.5 million and $1.0 million, respectively, were recorded as a reduction to other assets. During the three months ended March 31, 2015 and 2014, $0.9 million and $0.5 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.6 million and $1.1 million, respectively, were recorded as a reduction to operating expenses.

⁽³⁾  Of the total amounts earned in "Other," 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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Commitments and Contingencies (Details) (Pending Litigation [Member], Unfavorable Regulatory Action [Member])	1 Months Ended	2 Months Ended
	Aug. 31, 2014 lawsuit	Oct. 31, 2014 lawsuit
Shareholder Class Action and Derivative Lawsuits [Member]
Loss Contingencies [Line Items]
Loss Contingency, New Claims Filed, Number	2
Antitrust Class Action [Member]
Loss Contingencies [Line Items]
Loss Contingency, New Claims Filed, Number		3

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Investments in Unconsolidated Entities

3 Months Ended

Mar. 31, 2015

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, 2015	2015		2014
Oriental DreamWorks Holding Limited	45.45%	$	14,305	$	17,422
All Other(1)	17.5%-50.0%	11		6,029
Total equity method investments		14,316		23,451
Total cost method investments		12,379		11,879
Total investments in unconsolidated entities		$	26,695	$	35,330

____________________

⁽¹⁾   As of March 31, 2015, the Company determined that one of its equity method investments was impaired and that the carrying value would not be recoverable, primarily due to the Company's concerns related to the investee's financial condition. As a result, the Company determined that the fair value of the investment was zero and, accordingly, it recorded an impairment charge in the amount of $5.1 million related to such investment. Fair value was estimated using significant unobservable inputs.

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 Company's basis, with respect to 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,
	2015		2014
Oriental DreamWorks Holding Limited(1)	$	5,398	$	2,210
All Other	964		1,050
Loss from equity method investees	$	6,362	$	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, 2014 to February 28, 2015.

The following table presents summarized financial information for the Company's equity method investees presented in the table above (in thousands):

	Three Months Ended
	March 31,
	2015		2014
Revenues	$	2,618	$	835
Costs of revenues	$	2,707	$	687
Net loss	$	14,506	$	6,774

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 $9.4 millionhad been funded as ofMarch 31, 2015, with the balance to be funded over time) and non-cash contributions valued at approximately $100.0 million (of which approximately $38.7 million had been satisfied as of March 31, 2015). 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, 2015 and 2014, the Company's consolidated statements of operations included other operating income recognized in connection with non-cash contributions made to ODW of $2.3 million and $1.7 million, respectively.

As of March 31, 2015, the Company's remaining contributions consisted of the following: (i) $40.6 million in cash (which is expected to be funded over the next three years), (ii) two of the Company's in-development film projects, (iii) remaining delivery requirements under the licenses of technology and certain other intellectual property of the Company and (iv) approximately$6.7 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,			December 31,
	2015			2014
Company's venture-level equity	$	40,403		$	46,345
Technology and intellectual property licenses(1)	(10,489		)	(12,714		)
Other(2)	(15,609		)	(16,209		)
Total ODW investment recorded	$	14,305		$	17,422

____________________

⁽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 the Company's actual cost of providing such services. The Company's consolidated statements of operations included revenues earned through ODW's distribution of its feature films of $0.4 million and $0.7 million during the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015 and December 31, 2014, the Company's consolidated balance sheets included receivables from ODW of $8.3 million and $7.1 million, respectively, which were classified as a component of trade accounts receivable, and $19.7 million and $19.0 million, respectively, which were classified as a component of receivables from distributors.

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Accrued Liabilities

3 Months Ended

Mar. 31, 2015

Payables and Accruals [Abstract]

Accrued Liabilities

Accrued Liabilities

Accrued liabilities consist of the following (in thousands):

	March 31, 2015		December 31, 2014
Employee compensation	$	64,281	$	67,084
Participations and residuals	50,574		50,646
Interest payable	2,715		7,951
Deferred rent	10,639		11,049
Other accrued liabilities	35,884		53,487
Total accrued liabilities	$	164,093	$	190,217

As of March 31, 2015, the Company estimates that over the next 12 months it will pay approximately$19.3 millionof its accrued participation and residual costs.

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Financing Arrangements

3 Months Ended

Mar. 31, 2015

Debt Disclosure [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. 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. Prior to February 20, 2015, the Company had a revolving credit facility with a number of banks which allowed the Company to borrow up to a maximum of $400.0 million ("Prior Credit Agreement"). On February 20, 2015, the Company and the facility banks amended and restated the Prior Credit Agreement by entering into an Amended and Restated Credit Agreement (the "Restated Credit Agreement"). The Restated Credit Agreement allows the Company to have outstanding borrowings of up to $450.0 million at any one time, on a revolving basis. The Company and one or more of the lenders may from time to time, so long as no default or event of default has occurred under the Restated Credit Agreement, agree to increase the commitments under the Restated Credit Agreement by up to $50.0 million.

Under the Restated Credit Agreement, 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 Restated Credit Agreement also contains a sublimit for letters of credit. The Company is required to pay to the lenders under the Restated Credit Agreement a letter of credit participation fee equal to the applicable margin for LIBOR-based borrowings on the average daily undrawn amount of outstanding letters of credit and pay to each issuer of letters of credit a letter of credit fronting fee equal to 0.125% per annum on the average daily undrawn amount of outstanding letters of credit issued by such letter of credit issuer. The Restated Credit Agreement requires the Company to maintain a specified ratio of total debt to total capitalization, and limits the outstanding credit exposure under the Restated Credit Agreement to a specified ratio of net remaining ultimates to the outstanding credit exposure under the Restated Credit Agreement, plus an additional amount based on the valuation of the Company's film library. Subject to specified exceptions, the Restated 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 (including dividends), entering into transactions with affiliates, agreeing to negative pledge clauses and restrictions on subsidiary distributions, and modifying organizational documents. The obligations of the Company under the Restated Credit Agreement are guaranteed by substantially all the subsidiaries of the Company organized under the laws of the United States of America, and substantially all the tangible and intangible assets of the Company and such subsidiaries are pledged as collateral against borrowings under the Restated Credit Agreement.

Lease Financing Obligation. On February 23, 2015, the Company, as seller, entered into a purchase agreement (the "Glendale Purchase Agreement") with a third party buyer ("Landlord") involving the Company’s headquarters facility located in Glendale, California (the "Property"). The Property is comprised of, among other things, 10 buildings on approximately 14.7 acres of land. Pursuant to the Glendale Purchase Agreement, the Company sold the Property to Landlord for a purchase price of $185.0 million. In addition, the Company entered into a sharing agreement (the "Sharing Agreement") with the Landlord whereby the Company will either pay or receive 50% of the net appreciation or depreciation in the sale price of the Property if the Landlord sells the property to a third-party prior to February 23, 2016. If the Property is not sold by February 23, 2016, then the fair market value of the Property as of such date will be used to determine the net appreciation or depreciation in which the Company and the Landlord will share (up to a maximum payment of $10.0 million by either party).

Concurrently with the sale of the Property, the Company and Landlord entered into a lease agreement (the "Lease"), pursuant to which Landlord leased the Property to the Company commencing immediately following the consummation of the sale. Annual rent during the initial term of the Lease starts at approximately $13.2 million, and increases one and one-half percent each year. The initial term of the Lease is 20 years, and the Company has four consecutive renewal options of five years each. The first two of such renewal terms are subject to fixed rent increasing by one and one-half percent each year, and the rent during each of such last two renewal terms will be the greater of (i) the rent in effect immediately preceding such renewal term or (ii) the then-current fair market value rent. The Lease is structured as a "triple net" lease, meaning that the Company is responsible for all expenses arising from the use or operation of the Property, including repairs, maintenance, insurance and taxes. The Lease also contains provisions regarding the obligations of the Company and Landlord in connection with a casualty or condemnation of the Property. Other than a sale by the initial Landlord party to the Lease, if any subsequent landlord decides to sell or otherwise convey title to the Property to a third party during the term of the Lease, the Company shall have a right of first refusal to purchase the Property on the same terms offered to such third party.

The Company accounted for the sale and lease arrangement (as described above) as a financing transaction as it did not qualify for sale-leaseback accounting treatment because of the Company's continuing involvement through the Sharing Agreement. Under the financing accounting method, the Property assets remain on the Company's consolidated balance sheets and proceeds received by the Company are recorded as a financing liability. Payments under the Lease are applied as payments of deemed principal and imputed interest on the underlying financing obligation. The Company currently anticipates that this transaction will be classified as a sale and leaseback of the property upon completion of the requirements under the Sharing Agreement.

As of March 31, 2015, payments required on the lease financing obligations were as follows (in thousands):

2015	$	8,780
2016	13,335
2017	13,535
2018	13,738
2019	13,944
2020 and thereafter	322,269
Total payments	385,601
Less: interest implicit in obligation	(201,785		)
Total lease financing obligation	$	183,816

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, 2015		December 31, 2014			Interest Rate at March 31, 2015	2015		2014
Senior Unsecured Notes	$	300,000	$	300,000	August 2020	6.875%	$	4,446	$	2,234
Revolving Credit Facility	$	80,000	$	215,000	February 2020	2.67%	$	1,340	$	375
Lease Financing Obligation	$	183,816	N/A		February 2035	6.70%	$	1,141	N/A

____________________

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, 2015 and 2014, the Company incurred interest costs totaling $8.5 million and $6.1 million, respectively, of which $1.0 million and $3.2 million, respectively, were capitalized to film costs.

As of March 31, 2015, the Company was in compliance with all applicable financial debt covenants.

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Restructuring and Related Charges Narrative (Details) (2015 Restructuring Plan [Member])	0 Months Ended	3 Months Ended
	Jan. 22, 2015 employee	Mar. 31, 2015 employee
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Expected Number of Positions Eliminated	500
Employee Termination Benefits [Member]
Restructuring Cost and Reserve [Line Items]
Number of positions eliminated		160

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Restructuring and Related Charges Restructuring Reserve (Details) (2015 Restructuring Plan [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015
Restructuring Reserve [Roll Forward]
Employee termination costs	$ 4,587
Employee Termination Benefits [Member]
Restructuring Reserve [Roll Forward]
Restructuring reserve, beginning of period	36,808
Employee termination costs	10,286
Changes in estimate	(5,036)
Payments and other	(6,568)
Restructuring reserve, end of period	$ 35,490

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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, 2015	Mar. 31, 2014
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	1,372	941

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

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, 2015 and 2014, respectively, were as follows (in thousands):

	Three Months Ended
	March 31,
	2015		2014
Total stock-based compensation	$	4,399	$	5,309
Tax impact(1)	198		(1,885		)
Reduction in net income, net of tax	$	4,597	$	3,424

 ____________________

⁽¹⁾  Tax impact is determined at the Company's combined effective tax rate, which includes the statements of operations line item "Increase/decrease 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, 2015 and 2014:

	Three Months Ended
	March 31,
	Number Granted	Weighted Average Grant-Date Fair Value
	(in thousands)
2015
Restricted stock units	777	$	21.41
2014
Restricted stock and restricted stock units	224	$	29.91

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Income Tax Disclosure [Abstract]
Percentage the company is obligated to remit to an affiliate of the former significant stockholder	85.00%
Provision (benefit) for income taxes	$ 2,400	$ (22,467)
Effective tax rate	(4.50%)	34.10%
Effective tax rate combined with increase/decrease in income tax (benefit) provision to former stockholder	(4.50%)	35.50%

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Related Party Transactions

3 Months Ended

Mar. 31, 2015

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Transactions with ODW

During the three months ended March 31, 2015, 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 (including its subsidiaries) make payments to each other in connection with the licensing of music that is owned by the other company. In addition, UMG serves as the Company's music publisher. Finally, UMG and ATV have formed joint ventures related to the music business. As it relates to these arrangements, for the three months ended March 31, 2015 and 2014, revenues recognized were not material. As of March 31, 2015 and December 31, 2014, the Company's deferred revenue and other advances (see Note 9) included a cash advance received of approximately $5.0 million, related to music licensing revenues.

Transactions with Vessel

One of the Company's directors, Jason Kilar, is the chief executive officer and a significant stockholder in Vessel, a start-up subscription Internet video service company. Vessel has entered into (and is expected to continue to enter into) content and referral agreements with clients of ATV. The agreements in effect provide for minimum payments during the next three years to ATV clients, with additional payments depending on applicable advertising and subscription revenues. Although ATV is not a party to these agreements, it will receive a percentage of the amounts paid to its clients under the terms of its arrangements with its individual clients. During the three months ended March 31, 2015, amounts received under these arrangements were immaterial.

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Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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 and majority-owned subsidiaries.The Company 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.

Consolidation, Variable Interest Entity

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 and television product;

• 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 the fair value of reporting units for purposes of testing goodwill for impairment;

• 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.

Recent accounting pronouncements

In April 2015, the FASB issued an accounting standards update relating to the presentation of debt issuance costs. The accounting update requires companies to present debt issuance costs related to a recognized debt liability presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2016. The adoption of this guidance is expected to have an immaterial impact on the Company's consolidated financial statements.

In February 2015, the FASB issued an accounting standards update to amend existing guidance relating to the evaluation of certain legal entities for potential consolidation. The amendments modify the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities. In addition, the amendments modify the guidance on evaluating whether a fee paid to a decision maker or a service provider represents a variable interest and whether it should be included in the evaluation of the economics criterion in determining which party is the primary beneficiary of a VIE. In accordance with the accounting standards update, companies are required to reevaluate all legal entities that are considered VIEs to determine whether there is a change in the conclusion as to whether the VIE should be consolidated. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2016. The Company is currently evaluating the impact that the new standard will have on its consolidated financial statements.

In June 2014, the FASB issued an accounting standards update relating to the accounting for certain share-based awards. The accounting update states that, when the terms of an award provide that a performance target could be achieved after the requisite service period, the performance target should be treated as a performance condition that affects vesting and should not be reflected in the grant-date fair value. Companies are permitted to apply the guidance either prospectively to all awards granted or modified after the effective date or retrospectively to awards outstanding as of the beginning of the earliest annual period presented. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company adopted the new guidance upon issuance of the accounting standards update, which did not have an impact on its consolidated financial statements as the Company's existing accounting policy was already consistent with this guidance.

In May 2014, the FASB issued an accounting standards update to provide companies with a single model for use in accounting for revenue from contracts with customers. Once it becomes effective, the new guidance will replace most existing revenue recognition guidance in U.S. GAAP, including industry-specific guidance. The core principle of the model is to recognize revenue when control of goods or services transfers to the customer and in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services that have transferred. Under current U.S. GAAP, the Company recognizes revenue when the risks and rewards of ownership transfer to the customer. In addition, the new guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. The guidance is effective for the Company's fiscal year beginning January 1, 2017, including interim periods within that fiscal year. Early adoption is not permitted. However, on April 1, 2015, the FASB voted to propose a one-year deferral to the effective date, but to permit entities to adopt one year earlier if they choose (i.e., the original effective date). The proposal will be subject to the FASB's due process requirement, which includes a period for public comments. Companies are permitted to either apply the guidance retrospectively to all prior periods presented or, alternatively, apply the guidance in the year of adoption with the cumulative effect recognized at the date of initial application (referred to as the modified retrospective approach). The Company is in the process of determining the method of adoption, as well as evaluating the impact that the new standard will have on its consolidated financial statements.

Fair Value of Financial Instruments

The fair value of cash and cash equivalents, restricted cash, 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, 2015, 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, 2015, the fair value and the carrying value of the senior unsecured notes was $307.8 million and $300.0 million, respectively. As it relates to the Company's lease financing obligation, as of March 31, 2015, the fair value and the carrying value was $188.5 million and $183.8 million, respectively. The fair value of trade accounts receivable, the senior unsecured notes and the lease financing obligation 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, 2015 and December 31, 2014 was measured based on quoted prices in active markets.

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Deferred Revenue and Other Advances (Details) (USD $)	3 Months Ended
	Mar. 31, 2015		Mar. 31, 2014		Dec. 31, 2014
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	$ 51,052,000				$ 33,895,000
Deferred Revenue [Member]
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	23,693,000	[1]			1,074,000	[1]
Deferred revenue and other advances, amounts earned	118,000	[1]	5,908,000	[1],[2]
Strategic Alliance/Development Advances [Member]
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	417,000	[3]			1,667,000	[3]
Deferred revenue and other advances, amounts earned	7,684,000	[3]	7,138,000	[2],[3]
Amount capitalized as offset to property, plant and equipment	4,000,000		2,400,000
Amount capitalized as offset to other assets	500,000		1,000,000
Amount capitalized as offset to prepaid expenses	900,000		500,000
Amount recorded as an offset to operating expenses	600,000		1,100,000
Other Advances [Member]
Deferred Revenue And Other Advances By Category [Line Items]
Total deferred revenue and other advances	26,942,000				31,154,000
Deferred revenue and other advances, amounts earned	14,547,000		21,626,000	[2]
Amount recorded as an offset of film and other inventory costs			$ 14,000,000

[1] Deferred revenue consists of those arrangements related to the licensing of content for distribution in the home entertainment, television and new media markets.

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

[3] Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended March 31, 2015 and 2014, $4.0 million and $2.4 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.5 million and $1.0 million, respectively, were recorded as a reduction to other assets. During the three months ended March 31, 2015 and 2014, $0.9 million and $0.5 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended March 31, 2015 and 2014, of the total amounts earned, $0.6 million and $1.1 million, respectively, were recorded as a reduction to operating expenses.

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Film and Other Inventory Costs (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2015		Dec. 31, 2014
Film Costs [Line Items]
In release, net of amortization, feature films		$ 454,158,000		$ 392,186,000
In release, net of amortization, television series and specials		72,733,000		67,803,000
In production, feature films		146,574,000		206,240,000
In production, television series and specials		81,873,000		62,426,000
In development, feature films		63,979,000		88,200,000
In development, television series and specials		612,000		1,118,000
Product inventory and other		10,763,000	[1]	9,917,000	[1]
Total film, television and other inventory costs, net		830,692,000		827,890,000
Physical inventory		6,500,000		6,700,000
Release costs expected to be amortized over the next 12 months		46.00%
Release costs expected to be amortized over three years		79.00%
Impairment charge of film costs	$ 57,100,000
Impaired Film and Other Inventory Assets [Member]
Film Costs [Line Items]
Discount rate used in fair value measurement	7.00%
Estimated remaining cash flow period	15 years

[1] As of March 31, 2015 and December 31, 2014, this category includes $6.5 million and $6.7 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution primarily in the home entertainment market.

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Consolidated Statements of Comprehensive (Loss) Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net loss	$ (55,890)	$ (42,416)
Other comprehensive (loss) income, net of tax:
Foreign currency translation (losses) gains	(810)	132
Comprehensive loss	(56,700)	(42,284)
Less: Comprehensive (loss) income attributable to non-controlling interests	(1,113)	520
Comprehensive loss attributable to DreamWorks Animation SKG, Inc.	$ (55,587)	$ (42,804)

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Financial Instruments

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Financial Instruments

Financial Instruments

The fair value of cash and cash equivalents, restricted cash, 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, 2015, 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, 2015, the fair value and the carrying value of the senior unsecured notes was $307.8 million and $300.0 million, respectively. As it relates to the Company's lease financing obligation, as of March 31, 2015, the fair value and the carrying value was $188.5 million and $183.8 million, respectively. The fair value of trade accounts receivable, the senior unsecured notes and the lease financing obligation 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, 2015 and December 31, 2014 was measured based on quoted prices in active markets.

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Related Party Transactions (Details) (UMG [Member], USD $) In Millions, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
UMG [Member]
Related Party Transaction [Line Items]
Related party transaction, cash advance received	$ 5.0	$ 5.0

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Film and Other Inventory Costs (Tables)

3 Months Ended

Mar. 31, 2015

Film Costs [Abstract]

Film, television and other inventory costs

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

	March 31, 2015		December 31, 2014
In release, net of amortization:
Feature films	$	454,158	$	392,186
Television series and specials	72,733		67,803
In production:
Feature films	146,574		206,240
Television series and specials	81,873		62,426
In development:
Feature films	63,979		88,200
Television series and specials	612		1,118
Product inventory and other(1)	10,763		9,917
Total film, television and other inventory costs, net	$	830,692	$	827,890

 ____________________

⁽¹⁾  As of March 31, 2015 and December 31, 2014, this category includes $6.5 million and $6.7 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution primarily in the home entertainment market.

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Business and Basis of Presentation (Details) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Dec. 31, 2014
Prior Period Adjustment [Abstract]
Decrease in cost of revenues		$ 2,500,000
Restricted cash	14,907,000		25,244,000
Capital contribution from non-controlling interest holder	15,000,000	0
ATV Joint Venture [Member]
Prior Period Adjustment [Abstract]
Joint venture ownership, percentage	75.00%
Joint venture, initial restricted cash contribution	25,000,000
Restricted cash	$ 14,900,000
Fox [Member] | Distribution Arrangement [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
Paramount [Member] | Distribution Arrangement [Member]
Business and Basis Of Presentation [Line Items]
Distribution arrangement, exploitation period	16 years

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Reportable Segments

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Reportable Segments

Reportable Segments

The Company's current reportable segments are the following: Feature Films, Television Series and Specials, Consumer Products and New Media. Each segment is a strategic business unit that offers different products and services and is managed separately. 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. New Media consists of the Company's ATV and related businesses (which was previously not a reportable segment). This segment primarily generates revenues from the production and distribution of content across a variety of channels, including theatrical, home entertainment, television and online video-on-demand, and the exploitation of ancillary products and services, including marketing and consumer products. Operating segments that are not separately reportable are categorized in "All Other."

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

		Three Months Ended
		March 31,
		2015			2014
Revenues
	Feature Films	$	128,020		$	110,097
	Television Series and Specials	18,013			17,969
	Consumer Products	15,116			12,067
	New Media	4,583			4,093
	All Other	798			3,015
Total consolidated revenues		$	166,530		$	147,241
Segment gross profit (loss)(1)
	Feature Films	$	40,977		$	(25,388	)
	Television Series and Specials	3,451			5,759
	Consumer Products	6,538			6,004
	New Media	2,115			(80		)
	All Other	495			257
Total segment gross profit (loss)		$	53,576		$	(13,448	)
Reconciliation to consolidated loss before income taxes:
	Selling and marketing expenses(2)	1,686			1,971
	General and administrative expenses	89,142			47,708
	Product development expense	332			540
	Other operating income	(2,281		)	(1,672		)
	Non-operating expenses (income)	11,825			(372		)
	Loss from equity method investees	6,362			3,260
Total consolidated loss before income taxes		$	(53,490	)	$	(64,883	)

____________________

⁽¹⁾  The Company defines segment gross profit as segment revenues less segment costs of revenues (which is comprised of costs of revenues and certain costs classified as a component of "selling and marketing" in its statements of operations). Refer to Note 1 for further information related to changes made to the Company's statement of operations presentation.

⁽²⁾  Represents certain selling and marketing expenses that are not included as a component of segment gross profit due to the general nature of such expenses.

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

	Feature Films		Television Series and Specials		Consumer Products		New Media		Total
Balance as of March 31, 2015 and December 31, 2014	$	43,995	$	6,111	$	12,219	$	128,343	$	190,668