Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Jun. 28, 2013 | Feb. 14, 2014 | Feb. 14, 2014 | |
Class A Common Stock | Class B Common Stock | |||
Document Type | '10-K | ' | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' | ' |
Amendment Flag | 'false | ' | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' | ' |
Entity Registrant Name | 'DreamWorks Animation SKG, Inc. | ' | ' | ' |
Entity Central Index Key | '0001297401 | ' | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' | ' |
Entity Common Stock, Shares Outstanding | ' | ' | 76,728,346 | 7,838,731 |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' | ' |
Entity Public Float | ' | $1,172,631,619 | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' | ' |
Entity Voluntary Filers | 'No | ' | ' | ' |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Assets | ' | ' | |
Cash and cash equivalents | $95,467 | $59,246 | |
Trade accounts receivable, net of allowance for doubtful accounts (see Note 9 for related party amounts) | 131,244 | 109,102 | |
Receivables from distributors, net of allowance for doubtful accounts (see Note 9 for related party amounts) | 282,726 | 266,185 | |
Film and other inventory costs, net | 943,486 | 820,482 | |
Prepaid expenses | 20,555 | 18,593 | |
Other assets | 23,385 | 14,869 | |
Investments in unconsolidated entities | 38,542 | 9,782 | |
Property, plant and equipment, net of accumulated depreciation and amortization | 186,670 | 188,986 | |
Deferred taxes, net | 221,920 | 238,007 | [1] |
Intangible assets, net of accumulated amortization | 150,511 | 148,234 | |
Goodwill | 179,722 | 71,406 | |
Total assets | 2,274,228 | 1,944,892 | |
Liabilities: | ' | ' | |
Accounts payable | 5,807 | 6,611 | |
Accrued liabilities | 263,668 | 123,886 | |
Payable to former stockholder | 262,309 | 277,632 | |
Deferred revenue and other advances | 36,425 | 25,517 | |
Revolving credit facility | 0 | 165,000 | |
Senior unsecured notes | 300,000 | 0 | |
Total liabilities | 868,209 | 598,646 | |
Commitments and contingencies (Note 15) | ' | ' | |
DreamWorks Animation SKG, Inc. Stockholders' Equity: | ' | ' | |
Additional paid-in capital | 1,100,101 | 1,057,452 | |
Accumulated other comprehensive (loss) income | -600 | 313 | |
Retained earnings | 1,072,398 | 1,017,314 | |
Less: Class A Treasury common stock, at cost, 27,439,119 and 25,661,817 shares, as of December 31, 2013 and 2012, respectively | -768,224 | -730,568 | |
Total DreamWorks Animation SKG, Inc. stockholders' equity | 1,404,795 | 1,345,616 | |
Non-controlling interests | 1,224 | 630 | |
Total equity | 1,406,019 | 1,346,246 | |
Total liabilities and equity | 2,274,228 | 1,944,892 | |
Class A Common Stock | ' | ' | |
DreamWorks Animation SKG, Inc. Stockholders' Equity: | ' | ' | |
Common stock | 1,042 | 1,027 | |
Class B Common Stock | ' | ' | |
DreamWorks Animation SKG, Inc. Stockholders' Equity: | ' | ' | |
Common stock | $78 | $78 | |
[1] | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Class A Common Stock | ' | ' |
Common stock, par value per share | $0.01 | $0.01 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 104,155,993 | 102,687,323 |
Class A Treasury common stock, shares | 27,439,119 | 25,661,817 |
Class B Common Stock | ' | ' |
Common stock, par value 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 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Income Statement [Abstract] | ' | ' | ' | |||
Revenues (see Note 9 for related party amounts) | $706,916 | $749,842 | $706,023 | |||
Costs of revenues | 449,803 | 678,672 | 480,747 | |||
Gross profit | 257,113 | [1] | 71,170 | [1] | 225,276 | [1] |
Product development | 3,347 | 4,891 | 2,864 | |||
Selling, general and administrative expenses | 192,135 | 131,242 | 112,554 | |||
Other operating income (see Note 9 for related party amounts) | -14,709 | 0 | 0 | |||
Operating income (loss) | 76,340 | -64,963 | 109,858 | |||
Non-operating income (expense): | ' | ' | ' | |||
Interest (expense) income, net | -57 | 481 | 643 | |||
Other income, net | 6,187 | 8,280 | 7,150 | |||
(Increase) decrease in income tax benefit payable to former stockholder | -675 | 2,565 | 5,522 | |||
Income (loss) before loss from equity method investees and income taxes | 81,795 | -53,637 | 123,173 | |||
Loss from equity method investees | 6,891 | 0 | 0 | |||
Income (loss) before income taxes | 74,904 | -53,637 | 123,173 | |||
Provision (benefit) for income taxes | 19,181 | -17,215 | 36,372 | |||
Net income (loss) | 55,723 | -36,422 | 86,801 | |||
Less: Net income attributable to non-controlling interests | 639 | 0 | 0 | |||
Net income (loss) attributable to Dreamworks Animation SKG, Inc. | $55,084 | ($36,422) | $86,801 | |||
Net income per share of common stock attributable to DreamWorks Animation SKG, Inc. | ' | ' | ' | |||
Basic net income (loss) per share | $0.66 | ($0.43) | $1.04 | |||
Diluted net income (loss) per share | $0.65 | ($0.43) | $1.02 | |||
Shares used in computing net income (loss) per share | ' | ' | ' | |||
Basic (in shares) | 83,994 | 84,228 | 83,667 | |||
Diluted (in shares) | 85,293 | 84,228 | 84,772 | |||
[1] | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit as presented on the consolidated statements of operations, which includes a reconciliation to consolidated income (loss) before income taxes. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' |
Net income (loss) | $55,723 | ($36,422) | $86,801 |
Other comprehensive income (loss), net of tax: | ' | ' | ' |
Foreign currency translation (losses) gains | -913 | 1,354 | -1,052 |
Comprehensive income (loss) | 54,810 | -35,068 | 85,749 |
Less: Comprehensive income attributable to non-controlling interests | 639 | 0 | 0 |
Comprehensive income (loss) attributable to DreamWorks Animation SKG, Inc. | $54,171 | ($35,068) | $85,749 |
Consolidated_Statements_of_Equ
Consolidated Statements of Equity (USD $) | Total | Total DreamWorks Animation SKG, Inc. Stockholders' Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Class A Treasury Common Stock | Non-controlling Interests |
In Thousands, unless otherwise specified | ||||||||
Balance, beginning of period at Dec. 31, 2010 | $1,258,882 | $1,258,882 | $1,083 | $979,177 | $11 | $966,935 | ($688,324) | $0 |
Balance, shares at Dec. 31, 2010 | ' | ' | 108,276 | ' | ' | ' | 23,834 | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares for stock option exercises and vesting of restricted shares | 8 | 8 | 8 | ' | ' | ' | ' | ' |
Issuance of shares for stock option exercises and vesting of restricted shares, shares | ' | ' | 896 | ' | ' | ' | ' | ' |
Stock-based compensation | 47,129 | 47,129 | ' | 47,129 | ' | ' | ' | ' |
Tax shortfall from employee equity awards | -2,901 | -2,901 | ' | -2,901 | ' | ' | ' | ' |
Purchase of treasury shares | -32,171 | -32,171 | ' | ' | ' | ' | -32,171 | ' |
Purchase of treasury shares, shares | ' | ' | ' | ' | ' | ' | 1,306 | ' |
Foreign currency translation adjustments | -1,052 | -1,052 | ' | ' | -1,052 | ' | ' | ' |
Net income (loss) | 86,801 | 86,801 | ' | ' | ' | 86,801 | ' | ' |
Balance, end of period at Dec. 31, 2011 | 1,356,696 | 1,356,696 | 1,091 | 1,023,405 | -1,041 | 1,053,736 | -720,495 | 0 |
Balance, shares at Dec. 31, 2011 | ' | ' | 109,172 | ' | ' | ' | 25,140 | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares for stock option exercises and vesting of restricted shares | 40 | 40 | 14 | 26 | ' | ' | ' | ' |
Issuance of shares for stock option exercises and vesting of restricted shares, shares | ' | ' | 1,354 | ' | ' | ' | ' | ' |
Stock-based compensation | 35,769 | 35,769 | ' | 35,769 | ' | ' | ' | ' |
Tax shortfall from employee equity awards | -1,748 | -1,748 | ' | -1,748 | ' | ' | ' | ' |
Purchase of treasury shares | -10,073 | -10,073 | ' | ' | ' | ' | -10,073 | ' |
Purchase of treasury shares, shares | ' | ' | ' | ' | ' | ' | 522 | ' |
Acquisition of Classic Media | 630 | ' | ' | ' | ' | ' | ' | 630 |
Foreign currency translation adjustments | 1,354 | 1,354 | ' | ' | 1,354 | ' | ' | ' |
Net income (loss) | -36,422 | -36,422 | ' | ' | ' | -36,422 | ' | ' |
Balance, end of period at Dec. 31, 2012 | 1,346,246 | 1,345,616 | 1,105 | 1,057,452 | 313 | 1,017,314 | -730,568 | 630 |
Balance, shares at Dec. 31, 2012 | ' | ' | 110,526 | ' | ' | ' | 25,662 | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' |
Issuance of shares for stock option exercises and vesting of restricted shares | 6,883 | 6,883 | 15 | 6,868 | ' | ' | ' | ' |
Issuance of shares for stock option exercises and vesting of restricted shares, shares | ' | ' | 1,469 | ' | ' | ' | ' | ' |
Stock-based compensation | 35,781 | 35,781 | ' | 35,781 | ' | ' | ' | ' |
Purchase of treasury shares | -37,656 | -37,656 | ' | ' | ' | ' | -37,656 | ' |
Purchase of treasury shares, shares | ' | ' | ' | ' | ' | ' | 1,777 | ' |
Foreign currency translation adjustments | -913 | -913 | ' | ' | -913 | ' | ' | ' |
Distributions to non-controlling interest holder | -45 | ' | ' | ' | ' | ' | ' | -45 |
Net income (loss) | 55,723 | 55,084 | ' | ' | ' | 55,084 | ' | 639 |
Balance, end of period at Dec. 31, 2013 | $1,406,019 | $1,404,795 | $1,120 | $1,100,101 | ($600) | $1,072,398 | ($768,224) | $1,224 |
Balance, shares at Dec. 31, 2013 | ' | ' | 111,995 | ' | ' | ' | 27,439 | ' |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Operating activities | ' | ' | ' | |||
Net income (loss) | $55,723 | ($36,422) | $86,801 | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ' | ' | ' | |||
Amortization and write-off of film and other inventory costs | 360,480 | [1] | 567,936 | [1] | 388,169 | [1] |
Amortization of intangible assets | 10,475 | 2,189 | 0 | |||
Stock-based compensation expense | 18,531 | 17,044 | 28,301 | |||
Amortization of deferred financing costs | 338 | 651 | 288 | |||
Depreciation and amortization | 4,459 | 4,158 | 3,304 | |||
Revenue earned against deferred revenue and other advances | -95,631 | -74,197 | -85,855 | |||
Income related to investment contributions | -16,145 | 0 | 0 | |||
Gain on sale of a technology project | -6,377 | 0 | 0 | |||
Loss from equity method investees | 6,891 | 0 | 0 | |||
Deferred taxes, net | 20,394 | -18,408 | 44,749 | |||
Changes in operating assets and liabilities, net of the effects of acquisitions: | ' | ' | ' | |||
Trade accounts receivable | -26,094 | -28,502 | -26,360 | |||
Receivables from distributors | -17,430 | -35,105 | 27,982 | |||
Film and other inventory costs | -440,416 | -449,974 | -454,704 | |||
Intangible assets | 1,021 | 0 | 0 | |||
Prepaid expenses and other assets | -8,809 | -3,305 | -2,165 | |||
Accounts payable and accrued liabilities | 46,475 | 5,647 | -38,724 | |||
Payable to former stockholder | -15,322 | -16,765 | -35,192 | |||
Income taxes payable/receivable, net | 449 | 111 | -4,356 | |||
Deferred revenue and other advances | 127,980 | 93,339 | 101,264 | |||
Net cash provided by operating activities | 26,992 | 28,397 | 33,502 | |||
Investing activities | ' | ' | ' | |||
Investments in unconsolidated entities | -19,451 | -3,000 | -5,000 | |||
Proceeds from sale of a technology project | 6,409 | 0 | 0 | |||
Purchase of character rights | 0 | -11,900 | 0 | |||
Purchases of property, plant and equipment | -39,385 | -61,734 | -43,239 | |||
Acquisitions, net of cash acquired | -32,120 | -157,550 | 0 | |||
Net cash used in investing activities | -84,547 | -234,184 | -48,239 | |||
Financing activities | ' | ' | ' | |||
Excess tax benefits from employee equity awards | 0 | 863 | 103 | |||
Proceeds from stock option exercises | 6,886 | 0 | 8 | |||
Deferred financing costs | -7,732 | -5,297 | -338 | |||
Purchase of treasury stock | -37,656 | -10,035 | -32,171 | |||
Borrowings from revolving credit facility | 68,000 | 200,000 | 0 | |||
Repayments of borrowings from revolving credit facility | -233,000 | -35,000 | 0 | |||
Borrowings from senior unsecured notes | 300,000 | 0 | 0 | |||
Net cash provided by (used) in financing activities | 96,498 | 150,531 | -32,398 | |||
Effect of exchange rate changes on cash and cash equivalents | -2,722 | -1,591 | -591 | |||
Increase (decrease) in cash and cash equivalents | 36,221 | -56,847 | -47,726 | |||
Cash and cash equivalents at beginning of year | 59,246 | 116,093 | 163,819 | |||
Cash and cash equivalents at end of year | 95,467 | 59,246 | 116,093 | |||
Non-cash investing activities: | ' | ' | ' | |||
Contingent consideration portion of business acquisition purchase price | 95,000 | 0 | 0 | |||
Intellectual property and technology licenses granted in exchange for equity interest | 13,596 | 1,780 | 0 | |||
Services provided in exchange for equity interest | 2,675 | 0 | 0 | |||
Total non-cash investing activities | 111,271 | 1,780 | 0 | |||
Supplemental disclosure of cash flow information: | ' | ' | ' | |||
Cash refunded during the year for income taxes, net | 1,693 | 27 | 3,597 | |||
Cash paid during the year for interest, net of amounts capitalized | 0 | 7,343 | 679 | |||
Depreciation and amortization, interest expense and stock-based compensation previously capitalized | $29,456 | $40,666 | $37,202 | |||
[1] | Included within this amount is depreciation and amortization, interest expense and stock-based compensation previously capitalized to "Film and other inventory costs" (see Note 2). During the years ended December 31, 2013, 2012 and 2011, these amounts totaled $29,456, $40,666 and $37,202, respectively. |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2013 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Description of Business | ' |
Description of Business | |
Business | |
The businesses of DreamWorks Animation SKG, Inc. ("DreamWorks Animation" or the "Company") is primarily devoted to the development, production and exploitation of animated films and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising and licensing and other markets. Beginning with the Company's first feature film theatrically released in 2013, The Croods which was released theatrically in the domestic theatrical market on March 22, 2013, the Company began to derive revenue from Twentieth Century Fox Film Corporation's worldwide (excluding China and South Korea) exploitation of its films in the theatrical and post-theatrical markets. Pursuant to a binding term sheet (the "Fox Distribution Agreement") entered into with Twentieth Century Fox and Twentieth Century Fox Home Entertainment, LLC (collectively, "Fox"), the Company has agreed to license Fox certain exclusive distribution rights and exclusively engage Fox to render fulfillment services with respect to certain of the Company's animated feature films and other audiovisual programs during the five-year period beginning on January 1, 2013. The rights licensed to, and serviced by, Fox will terminate on the date that is one year after the initial home video release date in the United States ("U.S.") of the last film theatrically released by Fox during such five-year period. The Company continues to derive revenues from the distribution in worldwide theatrical, home entertainment, digital and television markets by Paramount Pictures Corporation, a subsidiary of Viacom Inc., ("Viacom"), and its affiliates (collectively, "Paramount"), for films that were released on or before December 31, 2012, pursuant to a distribution agreement and fulfillment services agreement (collectively, the "Paramount Agreements"). See Note 4 for further discussion of the Fox Distribution Agreement and the Paramount Agreements. 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. | |
In addition, the Company continues to build upon the value of its intellectual property created from its animated films by creating high-quality entertainment through the development and production of non-theatrical content such as television series and specials and live performances based on characters from its feature films. In addition, the Company has an extensive library of other intellectual property rights through its acquisition of Classic Media, which can be exploited in various markets. The Company's activities also includes technology initiatives as it explores opportunities to exploit its internally developed software. | |
During the year ended December 31, 2013, the Company reorganized its internal management structure to align with changes in how it operates the business and evaluates financial performance of individual business units. The changes in the Company's operational business structure resulted from, among other things, a growing television production business, an increased emphasis on its consumer products business and the ongoing integration of Classic Media's business into the Company's operating segments. These changes resulted in changes to the Company's operating segments, which have been determined based on the distinct nature of their operations. Each segment is a strategic business unit that offers different products and services and is managed separately. The Company's reportable segments are the following: Feature Films, Television Series and Specials and Consumer Products. Feature Films consists of the development, production and exploitation of feature films in the theatrical, television, home entertainment and digital markets. Television Series and Specials consists of the development, production and exploitation of television, direct-to-video and other non-theatrical content in the television, home entertainment and digital markets. Consumer Products consists of the Company's merchandising and licensing activities related to the exploitation of its intellectual property rights. Operating segments that are not separately reportable are categorized in "All Other" and include AwesomenessTV, Inc. ("ATV") and live performances. Refer to Note 20 for the Company's reportable segment disclosures. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Summary of Significant Accounting Policies | ' | ||
Summary of Significant Accounting Policies | |||
Principles of Consolidation | |||
The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animation and its wholly-owned subsidiaries. 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. During the year ended December 31, 2013, the Company determined that it continued to have a variable interest in an entity that was created to operate and tour its live arena show that is based on its feature film How to Train Your Dragon, and that the Company is the primary beneficiary of this entity as a result of its obligation to fund all losses. As of December 31, 2013 and 2012, the Company's consolidated financial statements included the activities of the VIE, including assets of approximately $0.7 million and $9.8 million, respectively. In addition, the Company's consolidated financial statements included approximately $3.5 million and $12.5 million of revenues generated during the years ended December 31, 2013 and 2012, respectively, and operating expenses of approximately $4.3 million and $22.6 million incurred by the VIE during the years ended December 31, 2013 and 2012, respectively, which are primarily classified in costs of revenues. | |||
The Company also determined that, as of December 31, 2013, it continued to have a variable interest in Oriental DreamWorks Holding Limited ("ODW") as ODW does not have sufficient equity to fund its operations as a result of the timing of capital contributions to the entity in accordance with the Transaction and Contribution Agreement. 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 9 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). | |||
Reclassifications | |||
Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the Company's 2013 presentation. | |||
Use of Estimates | |||
The preparation of financial statements in conformity with United States generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates made by management in the preparation of the financial statements relate to the following: | |||
• | ultimate revenues and ultimate costs of film, television product and live performance productions; | ||
• | relative selling price of the Company's products for purposes of revenue allocation in multi-property licenses and other multiple deliverable arrangements; | ||
• | determination of fair value of assets and liabilities for the allocation of the purchase price in an acquisition; | ||
• | determination of fair value of non-cash contributions to investments in unconsolidated entities; | ||
• | useful lives of intangible assets; | ||
• | product sales that will be returned and the amount of receivables that ultimately will be collected; | ||
• | the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements; | ||
• | loss contingencies and contingent consideration arrangements; and | ||
• | assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting. | ||
Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis. | |||
Cash and Cash Equivalents | |||
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. | |||
Trade Accounts Receivable | |||
Trade accounts receivable primarily consists of the following: receivables from licensees of the Company's intellectual property for use in various ancillary markets, such as merchandising, theme parks and cruise ships, receivables from licensees of film catalog and television series/specials titles and receivables related to the distribution of home video product. The Company imputes interest on receivables that are expected to be collectible during a period that exceeds 12 months and at a rate that represents the Company's best estimate of the rate at which the debtor can obtain financing of a similar nature from other sources at the date of the transaction. As of December 31, 2013 and 2012, trade accounts receivable included receivables totaling $85.7 million and $78.2 million, respectively, which were reduced by unamortized discounts totaling $8.1 million and $8.2 million, respectively. Interest rates used to impute interest ranged from 3% to 10%. | |||
The Company routinely reviews outstanding trade accounts receivable balances to determine whether an allowance for doubtful accounts should be recorded. The Company records an allowance for doubtful accounts for receivables on a specific identification basis. | |||
Investments | |||
Investments associated with the Company’s non-qualified deferred compensation plan (see Note 17) are classified as available-for-sale. Such investments are recorded at fair value, based on quoted prices in active markets, and unrealized gains and losses are included in other comprehensive income (loss) until realized. For the years ended December 31, 2013, 2012 and 2011, unrealized gains and losses were not material. Investments are reviewed on a regular basis to evaluate whether a decline in fair value below cost is other than temporary. There were no other-than-temporary investment losses recorded for the years ended December 31, 2013, 2012 and 2011. | |||
Financial Instruments | |||
The fair value of cash and cash equivalents, accounts payable, advances and amounts outstanding under the revolving credit facility approximates carrying value due to the short-term maturity of such instruments and floating interest rates. As of December 31, 2013, 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 December 31, 2013, the fair value and the carrying value of the senior unsecured notes was $302.7 million and $300.0 million, respectively. The fair value of trade accounts receivable and the senior unsecured notes was determined using significant unobservable inputs by performing a discounted cash flow analysis and using current discount rates as appropriate for each type of instrument. | |||
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company limits its exposure to credit loss by placing its cash and cash equivalents in short-term money-market investments, which are rated AAA, with several financial institutions. Such investments, which are included in "Cash and cash equivalents" on the accompanying consolidated balance sheets, are classified as available-for-sale and reported at fair value, based on quoted prices in active markets. There were no unrealized gains or losses associated with these investments at December 31, 2013. For the years ended December 31, 2013, 2012 and 2011, the Company recorded interest income of $4.2 million, $3.8 million and $1.6 million, respectively, from these instruments. | |||
Concentration of Credit Risk | |||
Pursuant to the Company’s distribution and servicing arrangements, significant accounts receivable may be due from Paramount and Fox from time to time (see Note 4). As of December 31, 2013 and 2012, $191.0 million and $263.8 million, respectively, were due from Paramount. As of December 31, 2013, $73.9 million was due from Fox. Accounts receivable resulting from revenues earned in other markets are derived from sales to customers located principally in North America, Europe and Asia. As of December 31, 2013 and 2012, approximately 49% of the Company's trade accounts receivable balance consisted of long-term receivables related to licensing arrangements with Netflix, Inc. ("Netflix"). Additionally, as of December 31, 2013, approximately 31% of the Company's trade accounts receivable balance consisted of receivables due from Anderson Merchandisors ("Anderson"), a third-party distributor of home video product. The Company and its distributors perform ongoing credit evaluations of their customers and generally do not require collateral. | |||
Investments in Unconsolidated Entities | |||
The Company has investments in unconsolidated entities which are presented on its consolidated balance sheets (refer to Note 9). In exchange for its ownership in such entities, the Company makes investments in the form of cash and/or non-cash contributions. The Company records non-cash contributions based on the fair value of the assets contributed, or the fair value of the ownership interest received, whichever is more readily determinable. | |||
The Company applies the cost method of accounting for investments in the common stock of unconsolidated entities when the Company does not have the ability to exercise significant influence. For investments in preferred stock, the Company applies the cost method of accounting if it concludes that the preferred stock is not in-substance common stock. 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. Prior to recording its share of net income or losses from equity method investees, investee financial statements are converted to U.S. GAAP. | |||
The fair value of cost method investments is not estimated if there are no indicators of impairment. As of December 31, 2013 and 2012, there were no indicators of impairment related to these investments. | |||
Business Acquisitions | |||
The Company accounts for business acquisitions under the purchase method of accounting, whereby the purchase price (defined as the total consideration transferred to acquire the business) is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair value. The excess of the purchase price over estimated fair value of the net identifiable assets is allocated to goodwill. The determination of estimated fair values requires significant estimates and assumptions including, but not limited to, expected use of the assets acquired, the expected cost to extinguish a liability, future cash flows to be generated from intellectual property and developing appropriate discount rates and market multiples. A change in the estimated fair value of an asset or liability often has a direct impact on the amount to recognize as goodwill, which is an asset that is not amortized. In applying the purchase method of accounting for a business acquisition, management may make adjustments to the fair value allocation, as of the acquisition date, during the measurement period (which is defined as a period of up to one year from the closing date of the acquisition) as a result of additional information obtained subsequent to the initial reporting of the acquisition. Adjustments made to the allocation of the purchase price, or adjustments made as a result of changes in estimates or assumptions, could impact the amount of assets, including goodwill and liabilities, ultimately recorded on the Company's balance sheet and could impact its operating results subsequent to such acquisition. | |||
Refer to Note 5 for further information related to the Company's acquisitions of ATV and Classic Media. | |||
Contingent Consideration | |||
From time to time, the Company may enter into arrangements to acquire a business or assets that include a contingent consideration component, such as in the Company's acquisition of ATV. The fair value of contingent consideration is estimated using significant unobservable inputs as of the date of the acquisition and is recorded as part of the purchase price. Refer to Note 5 for further discussion of the contingent consideration related to the acquisition of ATV. | |||
Property, Plant and Equipment | |||
Property, plant and equipment are stated at the lower of cost or fair value. Depreciation of property, plant and equipment is calculated using the straight-line method over estimated useful lives assigned to each major asset category as shown below: | |||
Asset Category | Estimated Useful Life | ||
Buildings | 40 years | ||
Building improvements | 10 years | ||
Furniture and equipment | 5-10 years | ||
Computer hardware, software and equipment | 3-5 years | ||
Leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset, not to exceed the remaining term of the lease. Repairs and maintenance costs are expensed as incurred. | |||
Gross versus Net Revenue | |||
Certain of the Company’s feature films, television specials and other properties are primarily distributed and marketed by third party distributors. The Company evaluates its arrangements with third parties to determine whether revenue should be reported under each individual arrangement on a gross or net basis by determining whether the Company acts as the principal or agent under the terms of each arrangement. To the extent that the Company acts as the principal in an arrangement, revenues are reported on a gross basis, resulting in revenues and expenses being classified in their respective financial statement line items. Conversely, to the extent that the Company acts as the agent in an arrangement, revenues are reported on a net basis, resulting in revenues being presented net of any related expenses. Determining whether the Company acts as principal or agent is based on an evaluation of which party has substantial risks and rewards of ownership under the terms of an arrangement. The most significant factors that the Company considers include identification of the primary obligor, as well as which party has general and physical inventory risk, credit risk and discretion in the supplier selection. The Company’s primary distribution arrangements, which are those for its theatrical releases, are recorded on a net basis as a result of the evaluation previously described. Revenues and costs related to the Company’s non-feature film content are typically recorded on a gross basis. | |||
Revenue Recognition | |||
The Company recognizes revenue from the distribution of its animated feature films when earned and reported to it by its distributors. Pursuant to the Company's distribution arrangements with Fox, Paramount and ODW, the Company recognizes revenues derived from its feature films net of reserves for returns, rebates and other incentives after the particular distributor has retained their respective distribution fees (without deduction for any distribution and marketing costs or third-party distribution and fulfillment services fees) and recovered all of their permissible distribution and marketing costs with respect to the Company’s films on a title-by-title basis. Fox retains a fee of 8.0% of all gross receipts and home video gross receipts, except in connection with certain pay television and video-on-demand rights and other digital distribution rights, for which the fee will be 6.0%. Paramount retains a distribution fee of 8.0% of revenues across all markets. ODW retains a fee of 8.0% of all gross receipts for the markets in which it distributes. For further discussion of the Company's primary distribution arrangements, refer to Note 4. | |||
Additionally, because third parties are the principal distributors of the Company’s films, the amount of revenue that is recognized from films in any given period is dependent on the timing, accuracy and sufficiency of the information received from its distributors. As is typical in the film industry, the Company's distributors may make adjustments in future periods to information previously provided to the Company that could have a material impact on the Company’s operating results in later periods. Furthermore, management may, in its judgment, make material adjustments to the information reported by its distributors in future periods to ensure that revenues are accurately reflected in the Company’s financial statements. To date, the distributors have not made, nor has the Company made, subsequent material adjustments to information provided by the distributors and used in the preparation of the Company’s historical financial statements. | |||
Revenue from the theatrical exhibition of films is recognized at the later of when a film is exhibited in theaters or when revenue is reported by the Company's distributors. | |||
Revenue from both free and pay television licensing agreements for the Company’s films is recognized at the later of the time the production is made available for exhibition in those markets or it is reported by its distributors. | |||
The Company has also entered into licensing arrangements directly with third parties to digitally distribute its feature film and television series/specials content. Certain content licensed under these arrangements is subject to our distribution arrangement with Paramount, and accordingly, such revenues are recorded net of any distribution fees owed to Paramount (as previously described). However, revenues from content not subject to the Company's distribution arrangement with Paramount are recorded on a gross basis. | |||
The Company's television series/specials are also distributed in the television markets through license arrangements. Such revenues are recorded on a gross basis as they are not typically subject to the distribution arrangements with the Company's distributors and, accordingly, the Company receives payment and records revenues directly from third parties. Television market revenue generated from television series/specials is recognized at the later of the time when the content has been delivered to and accepted by the licensee or the commencement of the license term. | |||
Revenue from the sale of feature film home video units is recognized at the later of when product is made available for retail sale and when sales to customers are reported by third parties, such as fulfillment service providers or distributors. Revenue from the sale of home video units for other content (such as television series/specials) is recorded on a gross basis (because we are considered the principal in the transactions) and is recognized when the criteria for revenue recognition have been met. Certain of the Company's home video distribution arrangements for its non-feature film content include non-refundable, but recoupable, minimum guarantees. Minimum guarantees that are not fully recouped are recognized as revenue once the minimum guarantee period has expired and the Company is able to determine the amount of remaining revenues to be recognized. The criteria the Company evaluates to determine whether it is able to recognize revenue includes persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred or services have been rendered and risk of inventory loss has transferred and collectibility is reasonably assured. | |||
In addition, the Company and its distributors provide for future returns of home video product and for customer programs and sales incentives. The Company and its distributors calculates these estimates by analyzing a combination of historical returns, current economic trends, projections of consumer demand for the Company’s product and point-of-sale data available from certain retailers. Based on this information, a percentage of each sale is reserved. Customers are typically given varying rights of return, which may include 100% return rights. Although the Company and its distributors allow various rights of return for customers, management does not believe that these rights are critical in establishing return estimates, because other factors, such as historical experience with similar types of sales, information received from retailers and management’s assessment of the product’s appeal based on domestic box office success and other research, are more important to the estimation process. | |||
Revenue from merchandising and other licensing arrangements is recognized when the associated feature film or television series/special has been released and the criteria for revenue recognition have been met. The criteria that the Company uses to evaluate whether it is able to recognize revenue includes the following: persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred or services have been rendered (including whether the license term has commenced) and collectibility is reasonably assured. Licensing and merchandising related minimum guarantees are generally recognized as revenue upon the theatrical release of a film and royalty-based revenues (revenues based upon a percentage of net sales of the products) are generally recognized as revenue in periods when royalties are reported by licensees or cash is received. | |||
Certain of the Company's arrangements may qualify as multiple deliverable arrangements if the licensee is granted the right to exploit more than one of the Company's titles. The license period for each title under a multiple deliverable arrangement may vary by title. Revenue associated with multiple deliverable arrangements is allocated to each title based on relative selling price. In determining the relative selling price of each title, the Company considers a variety of factors including (but not limited to) the period of time a title has already been exploited in the marketplace, whether the title is a sequel, the duration of the license period being granted, similar arrangements and type of content being licensed. Revenue for each title will be recognized when it is available to the licensee for exploitation. | |||
As a result of one of the Company's agreements with Netflix, it is currently developing and producing original episodic content in order to fulfill its obligations under the agreement. In cases where a television series is based on characters from one of the Company's 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 television series for use of intellectual property derived from the related feature film. | |||
Long-term, non-interest-bearing receivables arising from licensing agreements are discounted to present value. Accordingly, revenues are recorded net of such discount. Interest income is recognized from the imputation of interest in accordance with the effective interest rate method and classified as "Interest income, net" in the Company's consolidated statements of operations. | |||
Costs of Revenues | |||
Film and Other Inventory Costs. The production costs of the Company’s animated feature films, television series/specials and live performances are stated at the lower of cost less accumulated amortization, or fair value. Production overhead, a component of film costs, includes allocable costs of individuals or departments with exclusive or significant responsibility for the production of films or television products. A significant portion of the Company’s resources are dedicated to the production of its film and television product. Capitalized production overhead does not include selling, general and administrative expenses. Interest expense on funds invested in production, if any, is capitalized into film costs until production is completed. In addition to the films and television series/specials being produced, costs of productions in development are capitalized as development film costs and are transferred to film production costs when a film or television series/special is set for production. In the event a film or television series/specials is not set for production within three years from the time the first costs are capitalized or the film or television series/specials is abandoned, all such costs are generally expensed. | |||
Film and Other Inventory Costs Amortization. Once a feature film, television series/special or live performance is released, capitalized production costs are amortized and participations and residual costs are accrued on an individual title basis in the proportion that the revenue during the period for each title ("Current Revenue") bears to the estimated remaining total revenue to be recognized from all sources for each title ("Ultimate Revenue"). The amount of film and other inventory costs that is amortized each period will depend on the ratio of Current Revenue to Ultimate Revenue for each film, television series/special or live performance for such period. The Company makes certain estimates and judgments of Ultimate Revenue to be recognized for each title based on information received from its distributor or its operating partners, as well as its knowledge of the industry and historical experience. Ultimate Revenue does not include estimates of revenue that will be earned more than 10 years from a film’s initial theatrical release date. Ultimate Revenue for television series/specials does not include estimates of revenue that will be earned more than 10 years from the date of delivery of the first episode. | |||
Estimates of Ultimate Revenue and anticipated participation and residual costs are reviewed periodically in the ordinary course of business and are revised if necessary. A change in any given period to the Ultimate Revenue for an individual title will result in an increase or decrease to the percentage of amortization of capitalized film and other inventory costs and accrued participation and residual costs relative to a previous period. Depending on the performance of a title, significant changes to future Ultimate Revenue may occur, which could result in significant changes to the amortization of the capitalized production costs. | |||
Unamortized film, television series/specials and live performance production costs are evaluated for impairment each reporting period on a title-by-title basis to determine whether there are indicators of impairment. If there are indicators of impairment, the Company will determine the fair value of the unamortized costs for the title and the excess of the carrying value above the fair value is written off and the amount is classified as costs of revenues in the consolidated statements of operations and as amortization and write-off of film and other inventory costs in the consolidated statements of cash flows. In determining the fair value of its film and other inventory costs, the Company estimates fair value by calculating the net present value of the estimated remaining net cash flows to be generated for the title being evaluated. The Company bases these fair value measurements on unobservable inputs derived from the Company's assumptions about how market participants would price the asset. Due to the nature of these assets, market data for similar assets is not available. Key assumptions used in such fair value measurements include: (1) the discount rate applied to future cash flow streams, which is based on a risk-free rate plus a risk premium representing the risk associated with the type of property being exploited, (2) the performance in markets not yet released and (3) the number of years over which the Company estimates future net cash flows. The Company considers the sensitivity of these inputs in assessing its assumptions. See Note 6 for further information related to the impairment evaluation of film and other inventory costs. Additionally, on occasion, the Company may change the creative direction of, or abandon, one or more of the Company's films or other projects after being placed into production. As a result, amounts previously capitalized as production costs may be expensed. | |||
Amortization of film and other inventory costs in any period includes the effects of depreciation and amortization, interest expense and stock-based compensation expense that were capitalized as part of film and other inventory costs in the period that those charges were incurred. The total amount of such expenses reflected as a component of amortization of film and other inventory costs for the years ended December 31, 2013, 2012 and 2011 is presented in our statements of cash flows. | |||
Other. Direct costs for sales commissions to third parties for the licensing and merchandising of film characters and marketing and promotion costs and other product costs associated with the Company's live performances and certain of its television series/specials are recorded in costs of revenues and are expensed when incurred. In addition, since the close of the Company's acquisition of Classic Media, costs of revenues also include manufacturing costs related to physical inventory product sales (which also includes certain holiday-themed content based on DreamWorks Animation properties), distribution fees, participation and residual costs and amortization of intangible assets (which consists of certain character rights). | |||
Other Operating Income | |||
The Company classifies operating-related income or gains that are not considered revenues as other operating income in its consolidated statements of operations. Other operating income generally consists of income recognized in connection with the Company's contributions to ODW in the form of consulting and training services and the license of technology. Costs incurred to fulfill the Company's obligations related to these contributions are included in selling, general and administrative expenses in its consolidated statements of operations. Income related to the Company's contributions in the form of intellectual property licenses are included in revenues. The Company only recognizes the proportion of gains on contributions to equity method investees that is attributable to other investors' equity ownership interest in the investee. | |||
As part of the Company's contribution commitments to ODW, it has committed to licensing certain of its internally developed animation technology to ODW, including preparing the software in a format that can be delivered to ODW and providing ongoing maintenance. The Company determined, due to the level of preparation involved, that this constitutes significant modification and customization of the existing software, and accordingly, it uses the percentage-of-completion method for recognition of the income associated with this contribution. This amount is classified as other operating income in the consolidated statements of operations. Under the percentage-of-completion method, the Company uses costs incurred to measure progress towards completion. In addition, the Company makes certain estimates of the overall gross profit of the license granted and any changes in such estimates will be recorded in the period in which the change occurs. As the Company's investment in ODW is accounted for under the equity method of accounting, it only recognizes gross profit margin to the extent that control has transferred through the equity ownership interests (i.e., only 54.55% of the gross margin is recognized, which represents the portion of ODW that the Company does not own). | |||
During the year ended December 31, 2013, other operating income also included a gain of $6.4 million from the sale of one of the Company's technology projects. | |||
Product Development Expense | |||
The Company records product development costs, which primarily consist of research and development costs related to its technology initiatives. Product development costs incurred prior to reaching the application development or technological feasibility stage are expensed. Certain software development costs incurred after reaching the application development stage (in the case of internally developed software) or the technological feasibility stage (in the case of software to be sold, leased or marketed) are capitalized. | |||
Advertising and Marketing Expenses | |||
The costs of prints, advertising and marketing related to the exploitation of feature films are incurred by the Company’s distributors pursuant to distribution and servicing arrangements (see Note 4). Advertising and marketing expenses that are not captured under the distribution and servicing arrangements, which are those primarily associated with the Company's merchandising and promotional activities, television series/specials and live performances, are expensed as incurred by the Company. During the years ended December 31, 2013, 2012 and 2011, the Company incurred advertising and marketing expenses totaling $14.9 million, $11.3 million and $11.4 million, respectively. | |||
Stock-Based Compensation | |||
The Company records employee stock-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (see Note 18). | |||
Estimates of the fair value of stock-based compensation awards are not intended to predict actual future events or the value ultimately realized by employees who receive such awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company. Changes to the Company’s assessment of the probability of achieving performance criteria or the satisfaction of such criteria for performance-based awards granted to employees could significantly affect compensation expense to be recognized in future periods. | |||
Provision for Income Taxes | |||
The Company accounts for income taxes pursuant to the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or a change in tax status is recognized in the Company's financial statements in the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred income tax assets to the amount that is more likely than not to be realized. In evaluating its ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing prudent and feasible tax-planning strategies and forecasts of future taxable income. | |||
At the time of the Company’s separation from the entity then known as DreamWorks L.L.C. ("Old DreamWorks Studios") in 2004, affiliates controlled by a former stockholder entered into a series of transactions that resulted in a partial increase in the tax basis of the Company’s tangible and intangible assets ("Tax Basis Increase"). This Tax Basis Increase was initially $1.61 billion, with the potential to reduce the amount of tax that the Company may pay in the future, to the extent the Company generates sufficient future taxable income, by $595.0 million. The Company is obligated to remit to the affiliate of the former stockholder 85% of any such cash savings under this "Stockholder’s Tax Agreement" in U.S. Federal income tax and California franchise tax and certain other related tax benefits, subject to repayment if it is determined that these savings should not have been available to the Company. The effect of the Tax Basis Increase on the Company's deferred tax assets was initially recognized in equity. Subsequent remeasurements of the deferred tax assets related to the Tax Basis Increase are recorded in the Company's statements of operations. | |||
To address uncertainty in tax positions, the Company uses a single comprehensive model that establishes the minimum recognition threshold and a measurement attribute for tax positions taken or expected to be taken in a tax return in order to be recognized in the financial statements (referred to as unrecognized tax benefits). The Company records reserves for uncertain tax positions based on its estimates of the amounts that are likely to be sustained under audit. In formulating such estimates, the Company considers the tax positions taken on its tax returns by evaluating current tax law, regulations and rulings published by taxing authorities, court decisions and recent audit results.The Company continues to follow the practice of recognizing interest and penalties related to income tax matters as part of the provision for income taxes. | |||
Impairment of Long-Lived Assets | |||
The Company evaluates long-lived assets used in operations for impairment losses on an annual basis or when indicators of impairment are present. If the Company determines that indicators of impairment exist, the undiscounted cash flows estimated to be generated by those assets are compared to the assets’ carrying amount. If the undiscounted cash flows are less than the assets’ carrying amount, then the assets are deemed to not be recoverable from future cash flows and an impairment calculation is performed by determining the fair value of any impaired assets. The amount that an asset’s carrying value exceeds the fair value is recorded as an impairment loss. The Company has not identified any such impairment indicators or recorded any impairment losses on long-lived assets for the years ended December 31, 2013, 2012 and 2011. | |||
Goodwill and Other Intangible Assets | |||
The Company performs a goodwill impairment test on an annual basis, or sooner if indicators of impairment are identified. In connection with the goodwill impairment test, the Company first performs a qualitative assessment which includes reviewing factors such as market capitalization attributable to each reporting unit where goodwill is assigned, profit and margin trends and forecasts, macro-economic conditions, industry conditions and analyst reports. In addition, the Company performs sensitivity analysis of any financial data that is included in this assessment. | |||
As a result of changes to the Company's operating segments (as previously discussed), the Company was required to reallocate goodwill among its reporting units. Prior to the reallocation of goodwill, the Company performed a qualitative assessment to determine whether it was more likely than not that the fair value of the reporting units (prior to the change in segments) that were assigned goodwill was less than their carrying amounts. As a result of the assessment, the Company concluded that it was not more likely than not that the fair value of reporting units where goodwill has been assigned was less than the reporting units' respective carrying amount, and accordingly, no impairment was recorded. The Company reallocated goodwill based on the relative fair value of each of the individual reporting units to which goodwill is attributed. | |||
The Company performed its annual qualitative assessment as of October 1, 2013. As a result of the assessment, after taking into consideration all factors, both positive and negative in the aggregate, the Company concluded that it was not more likely than not that the fair value of reporting units where goodwill has been assigned was less than the reporting units' respective carrying amount, and accordingly, no impairment was recorded. Accordingly, no impairment was recorded during the year ended December 31, 2013. The Company's October 2012 and 2011 annual goodwill impairment tests also resulted in no impairment. | |||
The Company has definite and indefinite-lived intangible assets, which primarily consist of character rights and programming content. At the time an acquisition, management makes estimates and assumptions as to whether each intangible asset identified has a definite life or is indefinite-lived. Character rights determined to have an indefinite life were due to the notoriety of the characters, as well as the strength and stability of the historical cash flows, which the Company believes will continue indefinitely. Definite-lived intangible assets consisting of character rights and programming content are amortized on a basis that aligns with the best estimate of the pattern of consumption of the asset over the individual asset's estimated useful life. The straight-line basis of amortization is used when the estimated cash flows from the assets are expected to be stable over the course of the assets' lives and not prone to significant volatility. For assets where the consumption pattern may fluctuate over time, the Company uses an amortization method that is based on the ratio that current gross revenues for the asset bear to the total of current and anticipated future gross revenues. The Company's definite-lived intangible assets have assigned useful lives ranging from two to 15 years. On an annual basis, the Company reassesses whether the useful lives assigned continue to be appropriate. | |||
In addition, indefinite-lived intangible assets are reviewed annually to determine whether it is more likely than not that the fair value of the assets (on an asset-by-asset basis) is less than its carrying amount. The Company's qualitative assessment includes an evaluation of remaining future net cash flows expected to be attributable to the intangible assets, macro-economic conditions and industry conditions. After taking into consideration all factors, both positive and negative in the aggregate, the Company concluded that it was not more likely than not that the fair value of the indefinite-lived intangible assets was less than its carrying amounts for the years ended December 31, 2013 and 2012. The Company did not have any indefinite-lived intangible assets prior to 2012. | |||
Earnings Per Share | |||
The Company calculates basic per share amounts excluding dilution and using the weighted average number of common shares outstanding for the period, which includes the effects of treasury share purchases. Diluted per share amounts are calculated using the weighted average number of common shares outstanding during the period and, if dilutive, potential common shares outstanding during the period. Potential common shares include unvested restricted stock awards, common shares issuable upon exercise of stock options and stock appreciation rights using the treasury stock method and certain contingently issuable shares. | |||
Foreign Currency | |||
The financial position and results of operations of the Company’s foreign subsidiaries are determined using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each balance sheet date, except for certain investment and equity accounts which are translated at historical exchange rates. Income statement accounts are translated at average exchange rates in effect during each financial period. Foreign currency translation adjustments are included in accumulated other comprehensive income as a component of stockholders' equity. Foreign currency gains and losses related to intercompany transactions are classified in accumulated other comprehensive income if settlement is not planned or anticipated in the foreseeable future. Gains or losses related to intercompany transactions where settlement is anticipated, or those that result from the remeasurement of receivables and payables denominated in currencies other than the functional currency of an entity, are included in income. | |||
Comprehensive Income | |||
Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of stockholders’ equity but are excluded from net income. The Company's other comprehensive income consists primarily of foreign currency translation adjustments that result from the consolidation of its foreign entities. The net income attributable to the non-controlling interests is presented in the Company’s consolidated statements of operations. There is no other comprehensive income or loss attributable to the non-controlling interests. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2013 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In July 2013, the FASB issued an accounting standard update relating to the presentation of unrecognized tax benefits. The accounting update requires companies to present a deferred tax asset net of related unrecognized tax benefits if there is a net operating loss or other tax carryforwards that would apply in settlement of the uncertain tax position. To the extent that an uncertain tax position would not be settled through a reduction of a net operating loss or other tax carryforwards, the unrecognized tax benefit will be presented as a liability. The guidance is effective for the Company's fiscal year beginning January 1, 2014, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2014. The adoption of this guidance is expected to have an immaterial impact on the Company's consolidated financial statements. |
Distribution_and_Servicing_Arr
Distribution and Servicing Arrangements | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Distribution and Servicing Arrangements [Abstract] | ' | ||||
Distribution and Servicing Arrangements | ' | ||||
Distribution and Servicing Arrangements | |||||
The following table summarizes certain of the key terms related to the primary distribution arrangements under which the Company's films are distributed (which is followed by further detail of each of these arrangements): | |||||
Agreement Provision | Paramount Agreements | Fox Distribution Agreement | |||
Films Covered By Agreement | All films released theatrically prior to January 1, 2013 | (i) All films released theatrically between January 1, 2013 and December 31, 2017 | |||
(ii) Previously released films if and when distribution rights become available | |||||
Territory | Worldwide | Worldwide, excluding China and in certain instances, South Korea | |||
Minimum Film Commitment | 13 pictures | None | |||
Retained Rights | All rights not expressly granted, including derivative productions, theme park, merchandising, music and commercial tie-ins and promotions | (i) domestic television, SVOD and certain other digital rights (other than TVOD/EST/DTO) | |||
(ii) certain international television and SVOD rights subject to pre-existing agreements | |||||
(iii) derivative productions, theme park, merchandise, music and commercial tie-ins and promotions | |||||
(iv) nonexclusive rights to sell directly to consumers through "digital storefronts" | |||||
Distribution Fee | 8% of revenues | 8% of revenues, except 6% of: | |||
(i) domestic pay television (if licensed to Fox) | |||||
(ii) new international pay television agreements (i.e., those entered into after date of Fox Distribution Agreement, but excluding approved extensions of prior output agreements) | |||||
(iii) worldwide VOD and other digital distribution (excluding TVOD where packaged with physical) | |||||
Period of Distribution Rights ("Tail") | Distribution rights for each picture continue for 16 years after its initial domestic theatrical release | Distribution rights for all pictures continue until one year after initial home video release of the last theatrical release during the output term, subject to limited exception for certain approved TV licenses | |||
Change in Control Provision | During certain periods, we could have terminated upon a change in control and payment of specified fee | Either party may terminate if we experience a "change in control" | |||
Twentieth Century Fox. On August 18, 2012, the Company entered into the Fox Distribution Agreement with Fox, pursuant to which the Company 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. The Fox Distribution Agreement sets forth binding terms and conditions for such distribution rights and fulfillment services. | |||||
Under the Fox Distribution Agreement, the Company has agreed to license Fox the exclusive right to distribute, and has engaged Fox to service, in each case on a worldwide (excluding China and South Korea) basis, the following animated feature films and other audiovisual programs: (i) the Company's animated feature films that the Company elects to initially theatrically release during the five-year period beginning on January 1, 2013 (such five-year period, the "Output Term") and with respect to which the Company owns substantially all of the relevant distribution rights (each, a "Qualified Picture"), (ii) motion pictures that would be Qualified Pictures but for the fact that the Company does not own substantially all of the relevant distribution rights, which the Company must offer Fox the right to distribute and service and Fox has the option to distribute and service (each, an "Optional Picture"), (iii) the Company's animated feature films that were theatrically released by the Company prior to January 1, 2013 if and when such films cease being subject to third-party distribution rights at any point during the Output Term (each, an "Existing Picture"), (iv) as determined by the Company in its sole discretion, subject to certain exceptions, audiovisual programs the Company acquired as part of the Classic Media acquisition (each, a "Classic Media Picture") and (v) as determined by the Company in its sole discretion, subject to certain exceptions, other audiovisual programs produced or acquired by the Company that are not Qualified Pictures, Optional Pictures, Classic Media Pictures, Existing Pictures or live-action or hybrid feature-length theatrical motion pictures (each, an "Other Picture"). Each motion picture with respect to which rights are licensed to (and serviced by) Fox under the Fox Distribution Agreement is herein called a "Licensed Picture." | |||||
The rights licensed to, and serviced by, Fox for all Licensed Pictures will terminate on the same date, which will be the date that is one year after the initial home video release date in the U.S. of the last Licensed Picture theatrically released by Fox during the Output Term, unless terminated earlier in accordance with the terms of the Fox Distribution Agreement, subject to extension in the case of certain television license agreements entered into by Fox prior to or during the Output Term and approved by the Company. | |||||
The rights licensed to, and serviced by, Fox do not include the following rights that the Company retains and may freely exploit: (i) all forms of television, all forms of video on demand (excluding transactional video on demand) and other digital rights (other than electronic sell-through/download-to-own) in the U.S. and Canada (provided that Fox will have the first opportunity to exploit such rights if the Company elects to distribute such rights through a third party), (ii) television and subscription video on demand rights licensed pursuant to pre-existing deals or deals pending as of the date of the Fox Distribution Agreement in certain international territories, (iii) any other rights necessary for the Company to sell content directly to consumers through digital "storefronts" owned or controlled by the Company (which Fox may exploit on a non-exclusive basis under certain conditions), subject to payment by the Company to Fox of certain amounts with respect to such sales and (iv) certain other retained rights, including subsequent production, merchandising, commercial tie-in and promotional rights (which Fox may exploit on a non-exclusive basis under certain conditions) and certain other ancillary rights. | |||||
The Fox Distribution Agreement provides that Fox will be entitled to a distribution fee or services fee of 8% on all gross receipts and home video gross receipts, except in connection with the following rights for which the fee will be 6%: (i) pay television in the U.S. and/or Canada that the Company elects to license to Fox and pay television outside the U.S. and Canada under certain output agreements entered into by Fox (although an 8% fee is payable with respect to certain existing Fox output arrangements) and (ii) all forms of video-on-demand (other than attendant subscription video-on-demand included in existing pay television output agreements) and other digital distribution. | |||||
Fox will be responsible for advancing all expenses related to the exhibition, exploitation, use and distribution of each Licensed Picture and all expenses related to home video distribution and fulfillment services. Fox will be entitled to recoup all such distribution expenses and home video fulfillment expenses, and in each case will be financially responsible for such expenses in a manner to preserve the Company's existing net accounting treatment with respect to revenue recognition. Fox will also be granted a contractual television participation right with respect to each of the Qualified Pictures, which will be calculated and paid only if the ultimates statement prepared by the Company for a given Qualified Picture indicates that Fox will not fully recoup the relevant distribution expenses and home video fulfillment expenses from the projected gross receipts and home video gross receipts for such Qualified Picture. Fox will pay the Company in a manner generally consistent with the Company's past practice. Fox has also agreed to provide the Company with additional services and pay the Company an annual cost reimbursement amount during the term of the Fox Distribution Agreement. | |||||
Fox is obligated to release, distribute and service the Licensed Pictures in all media, territories and formats designated by the Company (unless Fox rejects an offered Classic Media Picture or Other Picture because it is not economically viable for it to distribute, in which case the Company itself can distribute the picture or have any third party distribute such Classic Media Picture or Other Picture). Fox is also obligated to expend a minimum amount in connection with the distribution and servicing of the Qualified Pictures generally consistent with past practice. The Company has all approvals and controls over the exploitation of the Licensed Pictures as are generally consistent with past practice. | |||||
The Fox Distribution Agreement is subject to termination by either party in the event that the Company experiences a "DWA Change in Control." For purposes of the Fox Distribution Agreement, "DWA Change in Control" is defined as (i) the acquisition of beneficial ownership of more than 35% of the Company's outstanding equity securities by a media company in the audiovisual content distribution business (a "Media Company"), (ii) the sale or other transfer of all, or substantially all, of the Company's property, business or assets or of its motion picture division to a Media Company and (iii) any merger, consolidation, share exchange or other similar transaction between the Company and a Media Company, the result of which is that the applicable Media Company owns at least 35% of the voting power of the outstanding voting securities of the resulting combined entity. In order to terminate the Fox Distribution Agreement, either party must deliver written notice to the other party within 90 days of such DWA Change in Control, which notice must specify a termination date no earlier than one year following the date of such notice. | |||||
Paramount. Pursuant to the Paramount Agreements, the Company granted Paramount and its affiliates the right to distribute its feature films in theatrical, home entertainment and television markets on a worldwide basis. The Company's feature film Rise of the Guardians, which was released in November 2012, was the last film released in theaters pursuant to the Paramount Agreements. The Company’s films distributed by Paramount will generally be subject to the terms of any sub-distribution, servicing and licensing agreements entered into by Paramount that the Company has pre-approved. For the Company's animated feature films that Paramount has the license to distribute, Paramount has the right to continue to exploit such titles for 16 years from the film's initial general theatrical release. | |||||
The Paramount Agreements provide that DreamWorks Animation is responsible for all of the costs of developing and producing its films, including participation and residual costs, and Paramount is generally responsible for all out-of-pocket costs, charges and expenses incurred in the distribution (including prints and the manufacture of home video units), advertising, marketing, publicizing and promotion of each film. The Paramount Agreements also provide that Paramount is entitled to (i) retain a fee of 8.0% of revenue (without deduction of any distribution or marketing costs, and third-party distribution and fulfillment services fees) and (ii) recoup all of its permissible distribution and marketing costs and home video fulfillment costs with respect to the Company’s films on a title-by-title basis prior to the Company receiving any proceeds. If a film does not generate revenue in all media, net of the 8.0% fee, sufficient for Paramount to recoup its expenses under the Paramount Agreements, Paramount will not be entitled to recoup those costs from proceeds of the Company’s other films and the Company will not be required to repay Paramount for such unrecouped amounts. | |||||
In addition, under the Paramount Agreements, Paramount was obligated to pay the Company an annual cost reimbursement (during each of the years ended December 31, 2012 and 2011, this amount was $7.0 million per year). The Company recognized a portion of the aggregate of each years’ cost reimbursements as revenue upon the release of each film. These annual cost reimbursements are independent from Paramount’s right to recoup its distribution and marketing costs for each film and, as a result, were recorded as revenue by the Company without regard to Paramount’s recoupment position. | |||||
Other. Beginning with The Croods, the Company's films are distributed in China and South Korea territories by distinct distributors. The terms of the Company's distribution arrangements with its China and South Korean distributors are materially similar to those with Fox. The Company's distribution partner in China is ODW, which is a related party. The Company holds a 45.45% equity interest in ODW. See Note 9 for further information regarding the Company's accounting for its investment in ODW. |
Acquisitions
Acquisitions | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Business Combinations [Abstract] | ' | ||||||||||||
Acquisitions | ' | ||||||||||||
Acquisitions | |||||||||||||
AwesomenessTV | |||||||||||||
On May 1, 2013, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") pursuant to which, on May 3, 2013 (the "ATV Closing Date"), a wholly-owned subsidiary of the Company ("the Merger Sub") merged with and into ATV. As a result of this transaction, ATV became a wholly-owned subsidiary of the Company. ATV is an online next-generation media production company that generates revenues primarily from online advertising sales and distribution of content through media channels such as theatrical, home entertainment and television. Through ATV's multi-channel network presence on the Internet, the Company will be able to gain access to new content distribution methods, as well as a broader audience. The goodwill acquired represents the potential synergies between ATV's filmed content, character portfolio and the Company's cross-platform expansion plans. The goodwill is allocated to a reporting unit that is not part of a separately reportable segment. | |||||||||||||
The Company's total consideration for this transaction totaled $128.5 million, including an accrual for estimated contingent consideration of $95.0 million. The following table outlines the components of consideration for the transaction (in thousands): | |||||||||||||
As of | |||||||||||||
3-May-13 | |||||||||||||
Cash payment | $ | 33,460 | |||||||||||
Estimated contingent consideration | 95,000 | ||||||||||||
Total consideration | $ | 128,460 | |||||||||||
The following table summarizes the preliminary allocation of the purchase price (in thousands): | |||||||||||||
As of | |||||||||||||
May 3, 2013(1) | |||||||||||||
Cash and cash equivalents | $ | 1,340 | |||||||||||
Trade receivables(2) | 1,279 | ||||||||||||
Prepaid and other assets | 434 | ||||||||||||
Productions costs | 612 | ||||||||||||
Property, plant and equipment | 183 | ||||||||||||
Intangible assets | 12,900 | ||||||||||||
Total identified assets acquired | 16,748 | ||||||||||||
Accounts payable | 655 | ||||||||||||
Deferred revenue | 2,057 | ||||||||||||
Deferred tax liabilities, net | 4,193 | ||||||||||||
Total liabilities assumed | 6,905 | ||||||||||||
Net identified assets acquired | 9,843 | ||||||||||||
Goodwill(3) | 118,617 | ||||||||||||
Total consideration | $ | 128,460 | |||||||||||
____________________ | |||||||||||||
-1 | Measurement period adjustments include a $0.5 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration. | ||||||||||||
-2 | Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible. | ||||||||||||
(3) | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. | ||||||||||||
For the year ended December 31, 2013, the Company incurred approximately $0.5 million of transaction costs for financial advisory, legal, accounting, tax and consulting services as part of the transaction. The transaction costs are included in selling, general and administrative expenses on the Company's consolidated statements of operations and were recognized separately from the purchase price of the ATV transaction. The Company's consolidated financial statements for the year ended December 31, 2013 included revenues of $11.4 million and net loss of $2.0 million attributable to ATV's operations following the ATV Closing Date. | |||||||||||||
Contingent Consideration | |||||||||||||
Pursuant to the Merger Agreement, the Company may be required to make future cash payments to ATV's former shareholders as part of the total purchase price to acquire ATV. The contingent consideration is based on whether ATV increases its adjusted earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") over an adjusted EBITDA threshold, over a two-year period. Adjustments to EBITDA for purposes of determining the contingent consideration earned include, but are not limited to: ATV's employee bonus plan, non-cash gains and losses (such as those related to foreign currency accounting and reversals of prior year accruals) and changes in the fair value of contingent payment liabilities resulting from the acquisition of ATV. The Company estimates the fair value of contingent consideration using a Monte-Carlo simulation model and bases the fair value on the estimated risk-adjusted cost of capital of ATV's adjusted EBITDA following integration into the Company. The estimate of the liability may fluctuate if there are changes in the forecast of ATV's future earnings or as a result of actual earnings levels achieved. Any changes in estimate of the contingent consideration liability will be reflected in the Company's results of operations in the period that the change occurs and classified in selling, general and administrative expenses. | |||||||||||||
The estimated fair value of the contingent consideration arrangement at the acquisition date was $95.0 million. The key assumptions in applying the income approach were as follows: an 8.5% discount rate, volatility of 32.6% and a probability adjusted earnings measure for ATV of $25.0 million for 2014, and $41.0 million for 2015. Changes in one or more of the key assumptions could lead to a different fair value estimate of the contingent consideration. For example, using a discount rate of 15.0% or a volatility rate of 20.0% would change the estimated fair value of the contingent consideration to $90.5 million and $103.5 million, respectively. Under the Merger Agreement, the maximum contingent consideration that may be earned is $117.0 million. The estimate of contingent consideration liability increased to $96.5 million as of December 31, 2013 in comparison to the amount recorded as of the ATV Closing Date primarily due to the passage of time, timing of cash flows and changes in the Company's credit risk adjusted rate used to discount obligations to present value. As of December 31, 2013, the discount rate and volatility applied were 18.0% and 32.9%, respectively. Using a discount rate of 15.0% or a volatility of 20.0% would change the estimated fair value of the contingent consideration to $98.0 million and $103.0 million, respectively. The change in estimate was recorded in selling, general and administrative expenses in the consolidated statements of operations. | |||||||||||||
Classic Media | |||||||||||||
On August 29, 2012 (the "Classic Closing Date"), the Company acquired Classic Media by purchasing all of the stock of its parent holding company, Boomerang Media Holdings II LLC. The Company paid $157.6 million in net cash consideration for this transaction. The Company believes that Classic Media's extensive library revenue stream will support the Company's ongoing diversification strategy. | |||||||||||||
The following table summarizes the final allocation of the purchase price (in thousands): | |||||||||||||
As of | |||||||||||||
August 29, 2012(1) | |||||||||||||
Cash and cash equivalents | $ | 22,607 | |||||||||||
Trade receivables(2) | 21,883 | ||||||||||||
Physical inventory | 5,243 | ||||||||||||
Content library and programs in development | 5,603 | ||||||||||||
Prepaid expenses | 716 | ||||||||||||
Intangible assets | 136,600 | ||||||||||||
Property, plant and equipment | 1,325 | ||||||||||||
Other assets | 1,104 | ||||||||||||
Total identified assets acquired | 195,081 | ||||||||||||
Accounts payable | 918 | ||||||||||||
Accrued liabilities | 14,153 | ||||||||||||
Deferred revenue | 5,628 | ||||||||||||
Deferred tax liabilities, net | 20,406 | ||||||||||||
Total liabilities assumed | 41,105 | ||||||||||||
Net identified assets acquired | 153,976 | ||||||||||||
Goodwill(3) | 26,889 | ||||||||||||
Net assets acquired | 180,865 | ||||||||||||
Less: Non-controlling interests | 630 | ||||||||||||
Total cash consideration transferred | $ | 180,235 | |||||||||||
____________________ | |||||||||||||
(1) | Measurement period adjustments included a decrease to trade receivables assumed of $0.3 million, a decrease to accrued liabilities assumed of $1.8 million, a decrease to deferred tax liabilities of $8.4 million and other adjustments that were not material, resulting in a decrease of $10.0 million to goodwill. | ||||||||||||
(2) | Gross contractual amounts due total $22.5 million and, of this amount, no amounts are deemed to be uncollectible. | ||||||||||||
(3) | The goodwill resulting from the acquisition of Classic Media is not deductible for tax purposes. | ||||||||||||
As a result of the Classic Media acquisition, a non-controlling interest was recorded on the Company's consolidated balance sheet. Each of Classic Media and J Ward Production ("JWP") owns a 50% equity interest in a joint venture operated by Bullwinkle Studios, LLC ("Bullwinkle Studios"). JWP is unrelated to Classic Media and the Company. The Company is consolidating the results of this joint venture because the Company retains control over the operations of Bullwinkle Studios. The fair value of the non-controlling interest was determined based on JWP's interest in the present value of the estimated future cash flows of Bullwinkle Studios. | |||||||||||||
Pro Forma Financial Information | |||||||||||||
The following table presents (in thousands, except per share data) pro forma results of the Company, as though ATV and Classic Media had been acquired as of January 1, 2012 and 2011, respectively (the beginning of the comparable prior annual reporting period based on the period in which the acquisition occurred). These pro forma results do not necessarily represent what would have occurred if the ATV and Classic Media transactions had taken place on January 1, 2012 and 2011, respectively, nor do they represent the results that may occur in the future. The pro forma amounts include the historical operating results of the Company and ATV and Classic Media prior to each of their acquisitions, with adjustments directly attributable to the acquisition. The pro forma results include decreases to tax expense assuming ATV was part of the Company in the amount of $1.3 million and $4.4 million for the years ended December 31, 2013 and 2012, respectively. The pro forma results also include increases to amortization expense related to the fair value of the intangible assets acquired, assuming ATV was part of the Company, amounting to $3.9 million and $11.8 million for the years ended December 31, 2013 and 2012, respectively. For the years ended December 31, 2012 and 2011, the pro forma results include increases (decreases) to tax expense assuming Classic Media was part of the Company in the amount of $(4.4) million and $1.1 million, respectively. The pro forma results also include increases to amortization expense related to the fair value of the intangible assets acquired, assuming Classic Media was part of the Company, amounting to $2.9 million and $1.6 million for the years ended December 31, 2012 and 2011, respectively. Lastly, the pro forma results also include the net impact of the extinguishment of Classic Media's debt in connection with the transaction, as well as amounts borrowed under the Company's line of credit to fund the acquisition, which caused the pro forma net income to decrease in the amount of $2.5 million and $2.8 million for the years ended December 31, 2012 and 2011, respectively. | |||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(unaudited) | |||||||||||||
Revenues | $ | 707,738 | $ | 787,929 | $ | 788,119 | |||||||
Net income (loss) attributable to DreamWorks Animation SKG, Inc. | $ | 51,526 | $ | (49,778 | ) | $ | 92,872 | ||||||
Basic net income (loss) per share | $ | 0.61 | $ | (0.59 | ) | $ | 1.11 | ||||||
Diluted net income (loss) per share | $ | 0.6 | $ | (0.59 | ) | $ | 1.1 | ||||||
Film_and_Other_Inventory_Costs
Film and Other Inventory Costs | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Film Costs [Abstract] | ' | |||||||
Film and Other Inventory Costs | ' | |||||||
Film and Other Inventory Costs | ||||||||
Film, television, live performance and other inventory costs consist of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
In release, net of amortization: | ||||||||
Feature films | $ | 285,238 | $ | 269,527 | ||||
Television series and specials | 58,631 | 35,703 | ||||||
Completed, not released: | ||||||||
Television series and specials(1) | — | 13,183 | ||||||
In production: | ||||||||
Feature films | 474,609 | 406,468 | ||||||
Television series and specials | 15,332 | 10,373 | ||||||
In development: | ||||||||
Feature films | 75,498 | 43,125 | ||||||
Television series and specials | 1,500 | 890 | ||||||
Product inventory and other(2) | 32,678 | 41,213 | ||||||
Total film, television, live performance and other inventory costs, net | $ | 943,486 | $ | 820,482 | ||||
_______________ | ||||||||
(1) | As of December 31, 2012, consists of a Valentine's Day-themed television special (based on characters from the Company's feature film Madagascar) that was released into the home entertainment market during the three months ended March 31, 2013. | |||||||
(2) | This category includes $24.8 million and $37.0 million of capitalized live performance costs at December 31, 2013 and 2012, respectively. In addition, as of December 31, 2013 and 2012, this category includes $7.9 million and $4.2 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market. | |||||||
The Company anticipates that approximately 45% and 79% of the above “in release” film and other inventory costs as of December 31, 2013 will be amortized over the next 12 months and three years, respectively. | ||||||||
At the end of December 2012, the Company made a decision to change the creative direction of one of its films that was previously set for production. As a result of this decision, the Company recorded a write-off of capitalized production costs in the amount of $47.6 million during the quarter ended December 31, 2012. Additionally, during the year ended December 31, 2012, the Company recorded a write-off of capitalized development costs totaling $20.3 million as a result of its decision to change its future film slate. These charges were recorded as costs of revenues in the Company's statements of operations. | ||||||||
The Company evaluates its film and other inventory costs to determine whether the unamortized capitalized costs of any titles have a fair value that is less than its carrying value. Refer to Note 2 for a description of the Company's accounting policy related to evaluating film and other inventory costs for impairment. During the years ended December 31, 2013 and 2012, the Company performed fair value analysis to determine whether the unamortized film inventory costs for certain of its titles were impaired as a result of the lower-than-expected performance of the titles. Key assumptions used in the fair value measurements were discount rates ranging from 7% to 11% and estimated remaining cash flows over a period of approximately 10 years. As a result of the analysis, during the years ended December 31, 2013 and 2012, the Company recorded impairment charges totaling $20.2 million (of which $13.5 million related to Turbo) and $89.3 million (of which $86.9 million related to Rise of the Guardians), respectively, resulting in remaining carrying value totaling $102.3 million and $71.0 million as of December 31, 2013 and 2012, respectively. A change in the discount rate of 1.0% would change the fair value measurements by $1.7 million and $1.3 million for the years ended December 31, 2013 and 2012, respectively. No impairment charges were recorded on film and other inventory costs during the year ended December 31, 2011. |
Property_Plant_and_Equipment
Property, Plant and Equipment | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||||
Property, Plant and Equipment | ' | |||||||||||
Property, Plant and Equipment | ||||||||||||
Property, plant and equipment consist of the following (in thousands): | ||||||||||||
Gross | Accumulated Depreciation and Amortization | Net | ||||||||||
As of December 31, 2013: | ||||||||||||
Land, buildings and improvements | $ | 214,922 | $ | (70,357 | ) | $ | 144,565 | |||||
Furniture and equipment | 30,918 | (17,285 | ) | 13,633 | ||||||||
Computer hardware and software | 99,499 | (76,610 | ) | 22,889 | ||||||||
Construction in progress | 5,583 | — | 5,583 | |||||||||
Total property, plant and equipment | $ | 350,922 | $ | (164,252 | ) | $ | 186,670 | |||||
As of December 31, 2012: | ||||||||||||
Land, buildings and improvements | $ | 210,399 | $ | (60,533 | ) | $ | 149,866 | |||||
Furniture and equipment | 25,351 | (16,291 | ) | 9,060 | ||||||||
Computer hardware and software | 86,015 | (60,241 | ) | 25,774 | ||||||||
Construction in progress | 4,286 | — | 4,286 | |||||||||
Total property, plant and equipment | $ | 326,051 | $ | (137,065 | ) | $ | 188,986 | |||||
For the years ended December 31, 2013, 2012 and 2011, the Company recorded depreciation and amortization expense (other than film amortization) of $29.8 million, $29.1 million and $25.0 million, respectively, of which $25.5 million, $25.8 million and $22.0 million, respectively, was capitalized as film production costs. |
Intangible_Assets
Intangible Assets | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||
Intangible Assets | ' | |||||||||||||||||
Intangible Assets | ||||||||||||||||||
As of December 31, 2013 and 2012, intangible assets included $49.5 million of indefinite-lived intangible assets. In addition, intangible assets were comprised of definite-lived intangible assets as follows (in thousands, unless otherwise noted): | ||||||||||||||||||
Weighted Average Estimated Useful Life (in years) | Gross | Accumulated Amortization | Impact of Foreign Currency Translation | Net | ||||||||||||||
As of December 31, 2013: | ||||||||||||||||||
Character rights | 13.9 | $ | 99,000 | $ | (8,663 | ) | $ | 1,754 | $ | 92,091 | ||||||||
Programming content | 2 | 11,200 | (3,733 | ) | — | 7,467 | ||||||||||||
Trademarks and trade names | 10 | 1,200 | (80 | ) | — | 1,120 | ||||||||||||
Other intangibles | 2 | 500 | (167 | ) | — | 333 | ||||||||||||
Total | $ | 111,900 | $ | (12,643 | ) | $ | 1,754 | $ | 101,011 | |||||||||
As of December 31, 2012: | ||||||||||||||||||
Character rights | 14 | $ | 100,027 | $ | (2,189 | ) | $ | 908 | $ | 98,746 | ||||||||
Amortization of intangible assets for the years ended December 31, 2013 and 2012 was $10.5 million and $2.2 million, respectively. The Company expects to record amortization over the next five years as follows (in thousands): | ||||||||||||||||||
2014 | $ | 12,610 | ||||||||||||||||
2015 | 8,803 | |||||||||||||||||
2016 | 7,038 | |||||||||||||||||
2017 | 8,311 | |||||||||||||||||
2018 | 8,827 | |||||||||||||||||
Total | $ | 45,589 | ||||||||||||||||
Investments_in_Unconsolidated_
Investments in Unconsolidated Entities | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
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 | December 31, | |||||||||
31-Dec-13 | 2013 | 2012 | ||||||||
Oriental DreamWorks Holding Limited | 45.45% | $ | 16,389 | $ | — | |||||
All Other | 30%-50% | 3,140 | — | |||||||
Total equity method investments | 19,529 | — | ||||||||
Total cost method investments | 19,013 | 9,782 | ||||||||
Total investments in unconsolidated entities | $ | 38,542 | $ | 9,782 | ||||||
Under the equity method of accounting, the carrying value of an investment is adjusted for the Company's proportionate share of the investees' earnings and losses (adjusted for the amortization of any differences in the basis of the Company's investment in ODW compared to the Company's share of venture-level equity), as well as contributions to and distributions from the investee. The Company classifies its share of income or loss from investments accounted for under the equity method as income/loss from equity method investees in its consolidated statements of operations. Loss from equity method investees consist of the following (in thousands): | ||||||||||
31-Dec-13 | ||||||||||
Oriental DreamWorks Holding Limited(1) | $ | 5,352 | ||||||||
All Other | 1,539 | |||||||||
Loss from equity method investees | $ | 6,891 | ||||||||
____________________ | ||||||||||
(1) | The Company is recording 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 April 3, 2013 (ODW Closing Date) to November 30, 2013. | |||||||||
Oriental DreamWorks Holding Limited | ||||||||||
On April 3, 2013 ("ODW Closing Date"), the Company formed a Chinese Joint Venture, ODW (or the "Chinese Joint Venture"), through the execution of a Transaction and Contribution Agreement, as amended, with its Chinese partners, China Media Capital (Shanghai) Center L.P. ("CMC"), Shanghai Media Group ("SMG") and Shanghai Alliance Investment Co., Ltd. ("SAIL", and together with CMC and SMG, the "CPE Holders"). In exchange for 45.45% of the equity of ODW, the Company has committed to making a total cash capital contribution to ODW of $50.0 million (of which $5.7 million was funded at the ODW Closing Date, with the balance to be funded over time) and non-cash contributions valued at approximately $100.0 million (of which approximately $23.0 million had been satisfied as of December 31, 2013). 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 year ended December 31, 2013, the Company's consolidated statements of operations included $7.8 million of revenues and $8.1 million of other operating income recognized in connection with non-cash contributions made to ODW. | ||||||||||
As of December 31, 2013, the Company's remaining contributions consisted of the following: (i) $44.3 million in cash (which is expected to be funded over the next three years), (ii) two of the Company's in-development film projects (the specific projects of which have not yet been identified), (iii) remaining delivery requirements under the licenses of technology and certain other intellectual property of the Company and (iv) approximately $7.6 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): | ||||||||||
December 31, 2013 | ||||||||||
Company's venture-level equity | $ | 46,906 | ||||||||
Technology and intellectual property licenses(1) | (20,444 | ) | ||||||||
Other(2) | (10,073 | ) | ||||||||
Total ODW investment recorded | $ | 16,389 | ||||||||
____________________ | ||||||||||
-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. In addition, from time to time, the Company may provide consulting and training services to ODW, the charges of which are based on a pre-determined rate schedule which approximates the Company's actual cost of providing such services. During the year ended December 31, 2013, the Company's consolidated statements of operations included $16.3 million of revenues earned through ODW's distribution of the Company's feature films (The Croods and Turbo). As of December 31, 2013, the Company's consolidated balance sheets included the following receivables: $3.8 million classified as a component of trade accounts receivable and $16.7 million classified as a component of receivables from distributors. |
Accrued_Liabilities
Accrued Liabilities | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Liabilities | ' | |||||||
Accrued Liabilities | ||||||||
Accrued liabilities consist of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Employee compensation | $ | 65,625 | $ | 34,513 | ||||
Participations and residuals | 50,690 | 46,201 | ||||||
Contingent consideration(1) | 97,545 | — | ||||||
Interest payable | 7,849 | 174 | ||||||
Deferred rent | 8,114 | 6,063 | ||||||
Other accrued liabilities | 33,845 | 36,935 | ||||||
Total accrued liabilities | $ | 263,668 | $ | 123,886 | ||||
____________________ | ||||||||
(1) | As of December 31, 2013, primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 5 for further information). | |||||||
The Company estimates that, in 2014, it will pay approximately $28.1 million of its participation and residual costs accrued as of December 31, 2013. |
Deferred_Revenue_and_Other_Adv
Deferred Revenue and Other Advances | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
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 December 31, 2013 and 2012 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 years ended December 31, 2013, 2012 and 2011 (in thousands): | ||||||||||||||||||||
Amounts Earned | ||||||||||||||||||||
Balance at December 31, | For the Year Ended December 31, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2011 | ||||||||||||||||
Home Box Office Inc. Advance(1) | $ | 1,902 | $ | — | $ | 36,121 | $ | 30,000 | $ | 45,000 | ||||||||||
Deferred Revenue | 13,502 | 16,547 | 28,083 | 21,971 | 7,174 | |||||||||||||||
Strategic Alliance/Development Advances(2) | 1,667 | 1,667 | 31,622 | 26,200 | 26,200 | |||||||||||||||
Other(3) | 19,354 | 7,303 | 21,229 | 29,318 | 24,651 | |||||||||||||||
Total deferred revenue and other advances | $ | 36,425 | $ | 25,517 | ||||||||||||||||
_______________ | ||||||||||||||||||||
(1) | The Company was a participant of an exclusive multi-picture domestic pay television license agreement originally entered into between Old DreamWorks Studios and Home Box Office, Inc. (“HBO”), pursuant to which the Company received advances against license fees payable for future film product. The agreement expired at the end of 2012. Accordingly, the last feature film subject to this agreement is Rise of the Guardians, which was released in the pay television market during the year ended December 31, 2013. | |||||||||||||||||||
(2) | The Company has strategic alliances with various technology companies pursuant to which the companies are permitted to promote themselves as DreamWorks Animation’s preferred technology provider in exchange for advancing the Company specified annual amounts. In addition, under the agreements, the Company makes purchases of the technology companies’ equipment. During the years ended December 31, 2013, 2012 and 2011, of the total amounts earned against the “Strategic Alliance/Development Advances,” $17.7 million, $14.3 million and $14.5 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the years ended December 31, 2013, 2012 and 2011, of the total amounts earned, $1.6 million, $2.5 million and $2.6 million, respectively, were recorded as a reduction to other assets. During the year ended December 31, 2013, $2.6 million was recorded as a reduction to prepaid expenses. During the years ended December 31, 2013, 2012 and 2011, of the total amounts earned, $1.4 million, $1.6 million and $1.5 million, respectively, were recorded as a reduction to operating expenses. | |||||||||||||||||||
(3) | As of December 31, 2013, this category's largest components consisted of advances related to a pending asset sale and advances related to production services for a third-party. |
Financing_Arrangements
Financing Arrangements | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
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 million and 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, beginning on February 15, 2014. 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 August 10, 2012, the Company had a revolving credit facility with a number of banks which allowed the Company to borrow up to a maximum of $200.0 million ("Prior Credit Agreement"). On August 10, 2012, the Company and the facility banks terminated the Prior Credit Agreement and entered into a new Credit Agreement ("New Credit Agreement"). The New Credit Agreement allows the Company to have outstanding borrowings up to $400.0 million at any one time, on a revolving basis. Borrowings are secured by substantially all of the Company's assets. The New Credit Agreement requires the Company to maintain a specified ratio of total debt to total capitalization and a specified ratio of net remaining ultimates to facility exposure. In addition, subject to specified exceptions, the New Credit Agreement also restricts the Company and its subsidiaries from taking certain actions, such as granting liens, entering into any merger or other significant transactions, making distributions, entering into transactions with affiliates, agreeing to negative pledge clauses and restrictions on subsidiary distributions, and modifying organizational documents. The revolving credit facility also prohibits the Company from paying dividends on its capital stock if, after giving pro forma effect to such dividend, an event of default would occur or exist under the revolving credit facility. The Company is required to pay a commitment fee on undrawn amounts at an annual rate of 0.375%. Interest on borrowed amounts (per draw) is determined by reference to either (i) the lending banks' base rate plus 1.50% per annum, or (ii) the London Interbank Offered Rate ("LIBOR") plus 2.50% per annum. | ||||||||||||||||||||||||
The following table summarizes information associated with the Company's financing arrangements (in thousands, except percentages): | ||||||||||||||||||||||||
Balance Outstanding at | Interest Expense | |||||||||||||||||||||||
December 31, | Maturity Date | Interest Rate at | Year Ended December 31, | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2013 | 2012 | 2011 | |||||||||||||||||||
Senior Unsecured Notes | $ | 300,000 | $ | — | Aug-20 | 6.88% | $ | 2,433 | N/A | N/A | ||||||||||||||
Revolving Credit Facility | $ | — | $ | 165,000 | Aug-17 | N/A | $ | 1,423 | $ | 2,702 | $ | 669 | ||||||||||||
____________________ | ||||||||||||||||||||||||
N/A: Not applicable | ||||||||||||||||||||||||
Additional Financing Information | ||||||||||||||||||||||||
Interest Capitalized to Film Costs. Interest cost on borrowed funds that are invested in major projects with substantial development or construction phases are 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 year ended December 31, 2013, the Company incurred interest costs totaling $13.6 million, of which $9.5 million was capitalized to film costs. No interest was capitalized during the years ended December 31, 2012 and 2011. | ||||||||||||||||||||||||
As of December 31, 2013, the Company was in compliance with all applicable financial debt covenants. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Income Taxes | ' | ||||||||||||
Income Taxes | |||||||||||||
The following are the domestic and foreign components of the Company's income (loss) before income taxes for the years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Domestic | $ | 73,640 | $ | (48,103 | ) | $ | 128,063 | ||||||
Foreign | 1,264 | (5,534 | ) | (4,890 | ) | ||||||||
Income (loss) before income taxes | $ | 74,904 | $ | (53,637 | ) | $ | 123,173 | ||||||
The following are the components of the provision (benefit) for income taxes for the years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | 8 | $ | (677 | ) | $ | (8,640 | ) | |||||
State and local | (2,909 | ) | 552 | (663 | ) | ||||||||
Foreign | 1,704 | 1,462 | 926 | ||||||||||
Total current (benefit) provision | (1,197 | ) | 1,337 | (8,377 | ) | ||||||||
Deferred: | |||||||||||||
Federal | 27,524 | (14,821 | ) | 42,981 | |||||||||
State and local | (7,146 | ) | (3,771 | ) | 1,768 | ||||||||
Foreign | — | 40 | — | ||||||||||
Total deferred provision (benefit) | 20,378 | (18,552 | ) | 44,749 | |||||||||
Total provision (benefit) for income taxes | $ | 19,181 | $ | (17,215 | ) | $ | 36,372 | ||||||
Set forth below is a reconciliation of the components that caused the Company’s provision (benefit) for income taxes (including the income statement line item “(Increase) decrease in income tax benefit payable to former stockholder”) to differ from amounts computed by applying the U.S. Federal statutory rate of 35% for the years ended December 31, 2013, 2012 and 2011. | |||||||||||||
2013 | 2012(4) | 2011(4) | |||||||||||
Provision for income taxes (combined with increase/decrease in income tax benefit payable to former stockholder)(1): | |||||||||||||
U.S. Federal statutory rate | 35 | % | 35 | % | 35 | % | |||||||
U.S. state taxes, net of Federal benefit | (2.5 | ) | 3.7 | (1.1 | ) | ||||||||
Export sales exclusion/manufacturers deduction(2) | (0.2 | ) | 5.6 | (5.8 | ) | ||||||||
Research and development credit(2) | (3.6 | ) | — | (1.8 | ) | ||||||||
Federal energy tax credit(3) | (2.2 | ) | — | — | |||||||||
Executive compensation | 3.4 | (1.2 | ) | — | |||||||||
Stock-based compensation | 3.2 | (1.4 | ) | — | |||||||||
Transaction costs | 0.3 | (1.9 | ) | — | |||||||||
Change in valuation allowance | (0.2 | ) | (3.0 | ) | 1.7 | ||||||||
Change in certain California unrecognized tax benefits(5) | (5.4 | ) | — | — | |||||||||
Revaluation of deferred tax assets(6) | (2.4 | ) | 1 | (1.4 | ) | ||||||||
Return-to-provision | 0.2 | (0.7 | ) | (0.4 | ) | ||||||||
Other | 0.7 | (1.9 | ) | — | |||||||||
Effective tax rate (combined with increase/decrease in income tax benefit payable to former stockholder)(1) | 26.3 | % | 35.2 | % | 26.2 | % | |||||||
Less: change in income tax benefit payable to former stockholder(1): | |||||||||||||
U.S. state taxes, net of Federal benefit | — | (0.2 | ) | (0.4 | ) | ||||||||
Export sales exclusion/manufacturers deduction(2) | (0.2 | ) | (5.2 | ) | 3 | ||||||||
Revaluation of deferred tax assets(6) | 1.4 | (0.8 | ) | 3.5 | |||||||||
Return-to-provision | (0.7 | ) | (0.7 | ) | — | ||||||||
Other | (1.4 | ) | 2.3 | (1.4 | ) | ||||||||
Total change in income tax benefit payable to former stockholder(1) | (0.9 | )% | (4.6 | )% | 4.7 | % | |||||||
Effective tax rate | 25.4 | % | 30.6 | % | 30.9 | % | |||||||
_______________ | |||||||||||||
(1) | The Company is obligated to remit to the affiliate of the former stockholder 85% of any such cash savings in U.S. Federal income tax and California franchise tax and certain other related tax benefits (see Note 2). | ||||||||||||
(2) | The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment). | ||||||||||||
(3) | The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated. | ||||||||||||
(4) | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. | ||||||||||||
(5) | In October 2013, the Company received correspondence from the California Franchise Tax Board ("FTB") indicating that its California research and development ("R&D") credits for the years under audit would be accepted as originally filed on the Company's income tax returns. As a result, the Company recognized approximately $1.3 million of previously established net unrecognized tax benefits for this period during the three months ended December 31, 2013. Additionally, during the three months ended December 31, 2013, the Company recognized approximately $2.8 million of previously established net unrecognized tax benefits for its California R&D credits related to the years 2008 through 2012. | ||||||||||||
(6) | The revaluation of deferred tax assets resulted from changes in the Company's state tax rates. | ||||||||||||
The tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities as of December 31, 2013 and 2012 are presented below (in thousands). | |||||||||||||
December 31, | |||||||||||||
2013 | 2012(4) | ||||||||||||
Deferred tax assets: | |||||||||||||
Tax Basis Increase (pursuant to Stockholder’s Tax Agreement) | $ | 228,975 | $ | 266,007 | |||||||||
Stock-based compensation(1) | 38,777 | 41,069 | |||||||||||
Accrued liabilities | 8,766 | 13,317 | |||||||||||
Net operating loss carryover | 97,926 | 48,735 | |||||||||||
Film development basis | 29,018 | 25,105 | |||||||||||
Research and development credit | 25,257 | 14,702 | |||||||||||
Other | 11,820 | 11,122 | |||||||||||
Deferred tax assets | 440,539 | 420,057 | |||||||||||
Less: Valuation allowance | (25,265 | ) | (28,749 | ) | |||||||||
Deferred tax assets (net of valuation allowance) | 415,274 | 391,308 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Film basis and other intangible assets (net of amortization)(2)(3) | (179,314 | ) | (145,077 | ) | |||||||||
Other | (14,040 | ) | (8,224 | ) | |||||||||
Deferred tax liabilities | (193,354 | ) | (153,301 | ) | |||||||||
Net deferred tax assets | $ | 221,920 | $ | 238,007 | |||||||||
_______________ | |||||||||||||
(1) | Includes the portion of film inventory amortization expense attributable to stock-based compensation. | ||||||||||||
(2) | Includes capitalizable stock-based compensation. | ||||||||||||
(3) | A portion of the deferred tax liability relates to indefinite-lived intangible assets. | ||||||||||||
(4) | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. | ||||||||||||
The Company reduces its deferred tax assets by establishing a valuation allowance if it is more likely than not (a likelihood of greater than 50%) that some portion or all of the deferred tax assets will not be realized. In evaluating its ability to recover deferred income tax assets, the Company considers and weighs all available positive and negative evidence, including operating results, ongoing prudent and feasible tax-planning strategies and forecasts of future taxable income. In evaluating the forecasts, the Company also considers whether it will be able to generate future taxable income at sufficient levels to realize its deferred tax assets. Additionally, the Company considers the number of years remaining prior to the expiration of the Company's existing net operating loss carryforwards. | |||||||||||||
Income tax expense attributable to equity-based transactions is allocated to stockholders’ equity. During the year ended December 31, 2013, the Company did not record an excess tax benefit or tax shortfall from employee equity awards as a component of stockholder's equity. During the years ended December 31, 2012 and 2011, the Company recorded a tax shortfall of $1.7 million and $2.9 million, respectively, from employee equity awards in its statements of equity. Amounts that are not allocated to stockholder's equity are recorded as a component of provision for income taxes. | |||||||||||||
Federal and state net operating loss carryforwards totaled $197.7 million and $39.4 million, respectively, as of December 31, 2013 and will begin to expire in 2019 and 2015, respectively. As prescribed by the tax laws, the utilization of certain of these federal and state net operating loss carryforwards may be subject to annual limitations. Federal R&D and energy tax credits totaled $15.9 million as of December 31, 2013 and will begin to expire in 2029. State R&D tax credits totaled $24.8 million as of December 31, 2013 and do not expire. Federal tax credits for foreign taxes paid totaled $6.6 million as of December 31, 2013 and will begin to expire in 2019. Foreign net operating loss carryforwards totaled $137.4 million as of December 31, 2013 and do not expire. | |||||||||||||
The Company's federal income tax returns for the tax years ended December 31, 2007 through 2009 are currently under examination by the IRS, and all subsequent tax years remain open to audit. The Company's California state tax returns for all years subsequent to 2007 remain open to audit. The Company's India income tax returns are currently under examination for the tax years ended March 31, 2010 through 2012. | |||||||||||||
A tabular reconciliation of the balance of unrecognized tax benefits, excluding interest and penalties, as of December 31, 2013, 2012 and 2011, is presented below (in thousands): | |||||||||||||
Accrued Income Taxes | Payable to Former Stockholder | Total | |||||||||||
Balance at December 31, 2010 | $ | 8,470 | $ | (537 | ) | $ | 7,933 | ||||||
Increases related to prior year tax positions | 10,765 | 2,968 | 13,733 | ||||||||||
Decreases related to prior year tax positions | (3,358 | ) | (1,956 | ) | (5,314 | ) | |||||||
Increases related to current year positions | 2,432 | 125 | 2,557 | ||||||||||
Decreases related to current year positions | (191 | ) | — | (191 | ) | ||||||||
Balance at December 31, 2011 | $ | 18,118 | $ | 600 | $ | 18,718 | |||||||
Increases related to prior year tax positions | 2,493 | — | 2,493 | ||||||||||
Decreases related to prior year tax positions | (197 | ) | (9 | ) | (206 | ) | |||||||
Increases related to current year positions | 1,646 | 96 | 1,742 | ||||||||||
Decreases related to current year positions | (7 | ) | — | (7 | ) | ||||||||
Balance at December 31, 2012 | $ | 22,053 | $ | 687 | $ | 22,740 | |||||||
Increases related to prior year tax positions | 717 | — | 717 | ||||||||||
Decreases related to prior year tax positions | (7,666 | ) | (7 | ) | (7,673 | ) | |||||||
Decreases related to settlements | (2,015 | ) | — | (2,015 | ) | ||||||||
Increases related to current year positions | 1,138 | 100 | 1,238 | ||||||||||
Decreases related to current year positions | (312 | ) | — | (312 | ) | ||||||||
Balance at December 31, 2013(1) | $ | 13,915 | $ | 780 | $ | 14,695 | |||||||
_______________ | |||||||||||||
(1) | The total amount of unrecognized tax benefits as of December 31, 2013 that, if realized, would affect the Company’s effective tax rate is $14.1 million. | ||||||||||||
Any changes to unrecognized tax benefits recorded as of December 31, 2013 that are reasonably possible to occur within the next 12 months are not expected to be material. | |||||||||||||
As of December 31, 2013, 2012 and 2011, the Company had accrued interest and penalties related to unrecognized tax benefits of $1.3 million, $1.6 million and $1.3 million, respectively. As of December 31, 2013, 2012 and 2011, the Company's payable to former stockholder included accrued interest and penalties related to unrecognized tax benefits of $0.3 million, $0.2 million and $0.1 million, respectively. During the year ended December 31, 2013, the Company did not incur any interest and penalties expense. During the years ended December 31, 2012 and 2011, the amount of expense recognized for interest and penalties was immaterial. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Related Party Transactions | |
Arrangement with Affiliate of a Former Stockholder | |
The Company has an arrangement with an affiliate of a former stockholder to share tax benefits generated by the stockholder. Refer to Notes 2 and 13 for further details. | |
Transactions with ODW | |
During the year ended December 31, 2013, the Company had various transactions with a related party, ODW. See Note 9 for further discussion related to these transactions. | |
Transactions with Universal Music Group | |
One of the Company's directors, Lucian Grainge, is the chief executive officer of Universal Music Group ("UMG"). From time to time, the Company and UMG make payments to each other in connection with the licensing of music that is owned by the other company (or for which the other company serves as the music publisher). In addition, UMG serves as the music publisher for the Company's Classic Media properties (which the Company acquired in August 2012). Finally, UMG and ATV (which the Company acquired in May 2013) have recently formed joint ventures related to the music business. For the year ended December 31, 2013, revenues recognized related to the arrangements were not material. During the year ended December 31, 2013, the Company incurred expenses (which were recorded as film inventory costs) totaling $0.3 million related to these arrangements. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Commitments and Contingencies | ' | |||
Commitments and Contingencies | ||||
Leases. The Company has entered into various non-cancelable operating leases for office space for general and administrative and production purposes with terms that expire in 2014 through 2021. Certain of these office leases contain annual rent escalations and require the Company to pay property taxes, insurance and normal maintenance. For the years ended December 31, 2013, 2012 and 2011, the Company incurred lease expense (including amounts capitalized to film inventory) of approximately $8.1 million, $9.2 million and $7.9 million, respectively. | ||||
Future minimum lease commitments are as follows (in thousands): | ||||
Operating | ||||
Lease | ||||
Commitments | ||||
2014 | $ | 10,398 | ||
2015 | 9,091 | |||
2016 | 8,097 | |||
2017 | 8,073 | |||
2018 and thereafter | 28,951 | |||
Total | $ | 64,610 | ||
Additionally, as of December 31, 2013, the Company had non-cancelable talent commitments totaling approximately $21.0 million that are payable over the next five years. | ||||
Contributions to ODW. The Company has committed to making certain contributions in connection with the formation of ODW. Refer to Note 9 for further discussion related to these commitments. | ||||
Contingent Consideration. As a result of the Company's acquisition of ATV, the Company may be obligated to make additional contingent cash payments as part of the purchase price. Refer to Note 5 for further discussion. | ||||
Legal Proceedings. From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business, typically intellectual property litigation and infringement claims related to the Company's feature films and other commercial activities, which could cause the Company to incur significant expenses or prevent the Company from releasing a film or other properties. The Company also has been the subject of patent and copyright claims relating to technology and ideas that it may use or feature in connection with the production, marketing or exploitation of the Company's feature films and other properties, which may affect the Company's ability to continue to do so. Furthermore, from time to time the Company may introduce new products or services, including in areas where it currently does not operate, which could increase its exposure to litigation and claims by competitors, consumers or other intellectual property owners. Defending intellectual property litigation is costly and can impose a significant burden on management and employees, and there can be no assurances that favorable final outcomes will be obtained in all cases. While the resolution of these matters cannot be predicted with certainty, the Company does not believe, based on current knowledge, that any existing legal proceedings or claims are likely to have a material effect on its financial position, results of operations or cash flows. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Stockholders' Equity Note [Abstract] | ' |
Stockholders' Equity | ' |
Stockholders’ Equity | |
The Company has authorized two classes of common stock: 350.0 million shares of Class A common stock and 150.0 million shares of Class B common stock. The Class A common stock and Class B common stock each have a par value of $0.01 per share and are identical and generally vote together on all matters, except that the Class A common stock carries one vote per share, whereas the Class B common stock carries 15 votes per share. Class B common stock is convertible to an equivalent number of Class A common stock. In addition, the Company has authorized preferred stock of 100.0 million shares. To date, the Company has not issued any of its preferred stock. | |
Class A and Class B Common Stock Transactions | |
Stock Repurchase Programs. In July 2010, the Company’s Board of Directors terminated the April 2009 stock repurchase program and authorized a new stock repurchase program pursuant to which the Company may repurchase up to an aggregate of $150.0 million of its outstanding stock. During the years ended December 31, 2013 and 2011, the Company repurchased 1.3 million and 0.9 million shares of its Class A Common Stock, respectively, for $25.0 million in each respective year. During the year ended December 31, 2012, the Company did not repurchase any shares of its Class A Common Stock. As of December 31, 2013, the Company's remaining authorization under the current stock repurchase program was $100.0 million. | |
Conversions of Class B Common Stock. In October 2012, 3.0 million shares of the Company's Class B common stock were converted into an equal amount of shares of the Company's Class A common stock at the request of Mr. Geffen, a significant stockholder, who owned such shares. As a result of the October 2012 conversion, Mr. Geffen ceased to be a significant stockholder in the Company. These transactions had no impact on the total amount of the Company's shares outstanding. |
Employee_Benefit_Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2013 | |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | ' |
Employee Benefit Plans | ' |
Employee Benefit Plans | |
401(k) Plan | |
The Company sponsors a defined contribution retirement plan (the "401(k) Plan") under provisions of Section 401(k) of the Internal Revenue Code ("IRC"). Substantially all employees not covered by collective bargaining agreements are eligible to participate in the 401(k) Plan. For most employees, the maximum contribution for the Company’s match is currently equal to 50% of the employees’ contribution, up to 4% of their eligible compensation, as limited by Section 415 of the IRC. The amount of the Company’s contributions, as well as all third-party costs of administering the 401(k) Plan, are paid directly by the Company and totaled $2.8 million, $2.4 million and $2.1 million for each of the years ended December 31, 2013, 2012 and 2011, respectively. | |
Multi-employer Pension Plan | |
The Company participates in a multi-employer pension plan for employees covered by collective bargaining agreements. The majority of such employees are in the Motion Picture Industry Pension Plan (Employer Identification Number 95-1810805 Plan Number 001). The Company's collective bargaining agreements with unions associated with this plan expire on July 31, 2015. As of December 31, 2012 (the most recent date available), the plan was 82% funded. During the years ended December 31, 2013, 2012 and 2011, the Company contributed $2.3 million, $2.7 million and $2.6 million, respectively, to the pension plan. | |
Deferred Compensation Plan | |
Effective July 2007, the Company adopted the Special Deferral Election Plan (the "Plan"), a non-qualified deferred compensation plan. The Plan is available for selected employees of the Company and its subsidiaries. For the years ended December 31, 2013, 2012 and 2011, the activity associated with the Plan was not material. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | ' | ||||||||||||||||||||
Stock-Based Compensation | ' | ||||||||||||||||||||
Stock-Based Compensation | |||||||||||||||||||||
In 2008, the 2008 Omnibus Incentive Compensation Plan ("2008 Omnibus Plan") was approved. Concurrent with such approval, the 2008 Omnibus Plan automatically terminated, replaced and superseded the Company’s prior plan, the 2004 Omnibus Incentive Compensation Plan ("2004 Omnibus Plan" and, collectively, with the 2008 Omnibus Plan the "Omnibus Plans"), except that any awards granted under the prior Omnibus Plan would remain in effect pursuant to their original terms. Both Omnibus Plans provided for the grant of incentive stock options, non-qualified stock options, stock appreciation rights, restricted share awards, restricted stock units, performance compensation awards, performance units and other stock-based equity awards to the Company’s employees, directors and consultants. Pursuant to an amendment to the 2008 Omnibus Plan approved by the Company’s stockholders on April 21, 2011, for any restricted stock award (or similar award) granted after such date the number of shares available for future awards will be reduced by the number of instruments granted. Prior to April 21, 2011, the number of shares available for future awards was reduced by 1.6 times the number of instruments granted. Pursuant to the April 2011 amendment of the 2008 Omnibus Plan, the aggregate number of shares of Class A common stock that may be issued pursuant to awards granted under the 2008 Omnibus Plan is equal to the sum of (i) 12.0 million, (ii) any shares with respect to awards granted under the 2004 Omnibus Plan or the 2008 Omnibus Plan that are forfeited following the adoption date of the April 2011 amendment of the 2008 Omnibus Plan, and (iii) any shares remaining available for issuance under the 2008 Omnibus Plan as of the date of adoption of the April 2011 amendment. As of December 31, 2013, approximately 10.3 million shares were available for future grants of equity awards under the 2008 Omnibus Plan. | |||||||||||||||||||||
Compensation Cost Recognized. The impact of stock options (including stock appreciation rights) and restricted stock awards on net income (excluding amounts capitalized) for the years ended December 31, 2013, 2012 and 2011, respectively, was as follows (in thousands): | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Total stock-based compensation | $ | 18,531 | $ | 17,044 | $ | 28,301 | |||||||||||||||
Tax impact(1) | (4,874 | ) | (5,999 | ) | (7,415 | ) | |||||||||||||||
Reduction in net income | $ | 13,657 | $ | 11,045 | $ | 20,886 | |||||||||||||||
_______________ | |||||||||||||||||||||
(1) | Tax impact is determined at the Company’s combined effective tax rate, which includes the income statement line item "(Increase) decrease in income tax benefit payable to former stockholder" (see Note 13). | ||||||||||||||||||||
Stock-based compensation cost capitalized as a part of film costs was $17.2 million, $18.7 million and $18.8 million for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||||||
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. The Company recognizes compensation cost for these awards based on the level of performance expected to be achieved. The Company will recognize the impact of any change in estimate in the period of the change. | |||||||||||||||||||||
Generally, equity awards are forfeited by employees who terminate prior to vesting. However, certain employment contracts for certain named executive officers provide for the acceleration of vesting in the event of a change in control or specified termination events. In addition, the Company has granted equity awards of stock appreciation rights and restricted shares subject to market-based conditions. Compensation costs related to awards with a market-based condition will be recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. 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. | |||||||||||||||||||||
Management makes estimates of expected forfeitures and recognizes compensation costs only for those equity awards expected to vest. As of December 31, 2013, 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 $82.0 million and will be amortized on a straight-line basis over a weighted average period of 2.0 years. | |||||||||||||||||||||
Restricted Stock Awards. The Company issues restricted stock and restricted stock units (collectively referred to as "restricted stock awards"). The majority of the the Company's restricted stock award activity relate to restricted stock units. The following table summarizes information about restricted stock award activity under the Omnibus Plans (in thousands, except per share amounts): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Restricted | Weighted | Restricted | Weighted | Restricted | Weighted | ||||||||||||||||
Stock | Average Grant- | Stock | Average Grant- | Stock | Average Grant- | ||||||||||||||||
Date | Date | Date | |||||||||||||||||||
Fair Value | Fair Value | Fair Value | |||||||||||||||||||
Outstanding at beginning of period | 5,121 | $ | 22.9 | 4,346 | $ | 25.69 | 3,662 | $ | 29.84 | ||||||||||||
Granted | 1,602 | $ | 28.19 | 2,638 | $ | 20.17 | 2,043 | $ | 21.21 | ||||||||||||
Vested | (1,199 | ) | $ | 24.16 | (1,346 | ) | $ | 25.99 | (949 | ) | $ | 30.4 | |||||||||
Forfeited | (342 | ) | $ | 22.74 | (517 | ) | $ | 24.4 | (410 | ) | $ | 29.54 | |||||||||
Balance at end of year | 5,182 | $ | 24.26 | 5,121 | $ | 22.9 | 4,346 | $ | 25.69 | ||||||||||||
Compensation cost related to restricted stock awards that vest solely upon service is based upon the market price of the Company’s stock on the date of grant, and is recognized on a straight-line basis over a requisite service period of four to seven years. In addition, the Company has granted restricted stock awards that vest either upon the achievement of certain cumulative performance goals over a multi-year period as set by the Compensation Committee of the Company’s Board of Directors ("Compensation Committee") or certain market-based criteria (such as stock price appreciation). In addition to the attainment of either the performance or market-based criteria, the vesting of the individual awards is further subject to the completion of required service periods ranging from one to four years. The following table summarizes by year of grant the number of restricted stock awards for which vesting is subject to the achievement of performance criteria (in thousands): | |||||||||||||||||||||
Year of Grant | Performance- | ||||||||||||||||||||
Based(1) | |||||||||||||||||||||
2013 | 623 | ||||||||||||||||||||
2012 | 665 | ||||||||||||||||||||
2011 | 455 | ||||||||||||||||||||
2010 | 276 | ||||||||||||||||||||
Total | 2,019 | ||||||||||||||||||||
_______________ | |||||||||||||||||||||
(1) | The performance-based awards have been included herein based on the maximum number of shares that may vest. | ||||||||||||||||||||
The total intrinsic value of restricted stock awards that vested totaled $33.5 million during 2013, $26.1 million during 2012 and $18.7 million during 2011. The total fair value at grant of restricted stock awards that vested during 2013, 2012 and 2011 was $29.0 million, $35.0 million and $28.9 million, respectively. | |||||||||||||||||||||
Stock Options and Stock Appreciation Rights. The fair value of stock option grants or stock-settled stock appreciation rights (which are collectively referred to as "stock options" or "options") with a service-based vesting condition is estimated on the date of grant using the Black-Scholes option-pricing model. Primary input assumptions of the Black-Scholes model used to estimate the fair value of stock options include the grant price of the award, the Company’s dividend yield, volatility of the Company’s stock, the risk-free interest rate and expected option term. Given the Company’s lack of sufficient historical exercise data for stock option grants, it uses the "simplified" method of calculating the weighted average expected term for "plain vanilla" awards. The simplified method defines the weighted average expected term as being the average of the weighted average of the vesting period and contractual term of each stock option granted. "Plain vanilla" options are defined as those granted at-the-money, having service time vesting as a condition to exercise, providing that non-vested options are forfeited upon termination and that there is a limited time to exercise the vested options after termination of service, usually 90 days, and providing the options are non-transferable and non-hedgeable. Once sufficient information regarding exercise behavior, such as historical exercise data or exercise information from relevant comparable external sources, becomes available, the Company will utilize another method to determine the weighted average expected term. For awards that are not "plain vanilla," the Company determines the expected term after considering all available facts specific to the group of participants, which include (but are not limited to) available exercise history, likelihood of exercise based on existing outstanding and exercisable awards and expected length of employment with the Company. In addition, the Company’s estimate of volatility incorporates both historical volatility and the implied volatility of publicly traded options. Equity awards of stock options and stock appreciation rights are generally granted with an exercise price based on the market price of the Company’s stock on the date of grant, generally vest over a term of four to seven years and expire 10 years after the date of grant. Compensation cost for stock options is recognized ratably over the requisite service period. Estimates of the fair value of stock options are not intended to predict actual future events or the value ultimately realized by employees who receive stock option awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company. | |||||||||||||||||||||
The assumptions used in the Black-Scholes model were as follows(1): | |||||||||||||||||||||
2011 | |||||||||||||||||||||
Dividend yield | —% | ||||||||||||||||||||
Expected volatility | 33-39% | ||||||||||||||||||||
Risk-free interest rate | 1.17-2.60% | ||||||||||||||||||||
Weighted average expected term (years) | 6.25 | ||||||||||||||||||||
_______________ | |||||||||||||||||||||
(1) | Effective in 2012, stock options and stock appreciation rights are no longer being granted by the Company. | ||||||||||||||||||||
For equity awards subject to market-based conditions (such as stock-price appreciation), the Company uses a Monte-Carlo simulation option-pricing model to determine the grant-date fair value. The Monte-Carlo simulation option-pricing model takes into account the same input assumptions as the Black-Scholes model as outlined above, however, it also further incorporates into the fair value determination the possibility that the market condition may not be satisfied and impact of the possible differing stock price paths. | |||||||||||||||||||||
The following table summarizes information about stock option/stock appreciation rights activity under the Omnibus Plans (in thousands, except per share amounts): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Options | Weighted | Options | Weighted | Options | Weighted | ||||||||||||||||
Outstanding | Average Exercise | Outstanding | Average Exercise | Outstanding | Average Exercise | ||||||||||||||||
Price per Share | Price per Share | Price per Share | |||||||||||||||||||
Outstanding at beginning of period | 6,919 | $ | 29.54 | 7,945 | $ | 29.04 | 7,813 | $ | 29.21 | ||||||||||||
Options granted | — | $ | — | — | $ | — | 315 | $ | 26.56 | ||||||||||||
Options exercised | (496 | ) | $ | 28.29 | — | $ | — | (1 | ) | $ | 22.51 | ||||||||||
Options expired/canceled | (609 | ) | $ | 30.66 | (1,026 | ) | $ | 25.66 | (182 | ) | $ | 31.86 | |||||||||
Balance at end of year | 5,814 | $ | 29.53 | 6,919 | $ | 29.54 | 7,945 | $ | 29.04 | ||||||||||||
As of December 31, 2013, there were no stock option/stock appreciation rights outstanding for which vesting is further subject to the achievement of certain performance or market-based criteria. | |||||||||||||||||||||
The weighted average grant-date fair value of options granted during the year ended December 31, 2011 was $10.28. The Company did not grant any options during the year ended December 31, 2013 and 2012. During the year ended December 31, 2013, the intrinsic value (market value on date of exercise less exercise price) of options exercised was $2.2 million and tax benefits realized from options exercised during the year totaled $0.8 million. During the year ended December 31, 2012, no options were exercised. The total intrinsic value of options exercised during 2011 was immaterial. At December 31, 2013, the aggregate intrinsic value of stock options outstanding and those exercisable was $35.0 million and $33.4 million, respectively. | |||||||||||||||||||||
The following table summarizes information concerning outstanding and exercisable options as of December 31, 2013: | |||||||||||||||||||||
Options outstanding | Options exercisable | ||||||||||||||||||||
Range of Exercise Prices per Share | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Outstanding (in thousands) | Average | Average | Exercisable (in thousands) | Average | |||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||
Life | per Share | per Share | |||||||||||||||||||
(in years) | |||||||||||||||||||||
$19.29-$26.92 | 1,252 | 5.36 | $ | 24.8 | 1,097 | $ | 24.57 | ||||||||||||||
$27.06-$28.00 | 949 | 0.87 | $ | 27.96 | 949 | $ | 27.96 | ||||||||||||||
$28.10-$32.31 | 2,656 | 4.25 | $ | 30.18 | 2,630 | $ | 30.19 | ||||||||||||||
$32.86-$37.51 | 920 | 6.01 | $ | 35.27 | 727 | $ | 35.26 | ||||||||||||||
$37.58-$39.71 | 25 | 6.28 | $ | 39.69 | 19 | $ | 39.69 | ||||||||||||||
$43.46-$43.46 | 12 | 6.1 | $ | 43.46 | 9 | $ | 43.46 | ||||||||||||||
Total | 5,814 | 4.23 | $ | 29.53 | 5,431 | $ | 29.4 | ||||||||||||||
The weighted-average remaining contractual life of options that were outstanding and exercisable as of December 31, 2013 was 4.0 years. |
Concentrations_of_Risk
Concentrations of Risk | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Risks and Uncertainties [Abstract] | ' | |||||||||||
Concentrations of Risk | ' | |||||||||||
Concentrations of Risk | ||||||||||||
Concentrations of Risk by Film. A substantial portion of the Company’s revenues are derived from its feature films. Revenues (which are included in the Feature Film and Consumer Products segments) for each of the films released during the years ended December 31, 2013, 2012 and 2011 are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Turbo(1) | $ | 13,790 | $ | — | $ | — | ||||||
The Croods | 140,345 | — | — | |||||||||
Rise of the Guardians(2) | 77,348 | 6,096 | — | |||||||||
Madagascar 3 | 95,152 | 197,157 | — | |||||||||
Puss in Boots | 24,638 | 151,670 | 23,752 | |||||||||
Kung Fu Panda 2 | 35,250 | 74,285 | 144,815 | |||||||||
Megamind | 25,296 | 10,776 | 82,975 | |||||||||
Shrek Forever After | 16,652 | 36,437 | 78,596 | |||||||||
How to Train Your Dragon | 16,888 | 37,327 | 66,904 | |||||||||
Library(3) | 80,915 | 94,415 | 187,912 | |||||||||
All other(4) | 180,642 | 141,679 | 121,069 | |||||||||
Total revenues | $ | 706,916 | $ | 749,842 | $ | 706,023 | ||||||
_______________ | ||||||||||||
-1 | Turbo was released during the three months ended September 30, 2013. Pursuant to the terms of the Fox Distribution Agreement, because the distribution and marketing expenses incurred by Fox in the year of the film’s release exceeded that film’s gross revenues for such year, no revenue was reported to the Company directly from Fox with respect to that film in its year of release. Revenues recognized during the year ended December 31, 2013 were primarily attributable to the Chinese and South Korean theatrical markets, which are territories that are not distributed by Fox. | |||||||||||
(2) | Rise of the Guardians was released during the three months ended December 31, 2012. Pursuant to the terms of the Paramount Agreements, because the distribution and marketing expenses incurred by Paramount in the year of the film’s release exceeded that film’s gross revenues for such year, no revenue was reported to the Company directly from Paramount with respect to that film in its year of release. Revenues recognized during the year ended December 31, 2012 were primarily attributable to the Company’s licensing arrangements. | |||||||||||
(3) | Library, in each respective year, includes feature film titles not separately listed. | |||||||||||
(4) | For each period shown, "All other" consists of revenues not attributable to a specific feature film title. Examples of sources of revenue included in "All other" are those generated from multi-property licenses of the Company's characters (such as for use at theme parks, hotels or cruise ships), television series/specials, direct-to-video product, licensing of Classic Media properties, live performances and ATV. | |||||||||||
Concentrations of Credit Risk. A substantial portion of the Company’s revenue is derived directly from the Company's third-party distributors, Paramount and Fox. Paramount represented 49.1%, 76.1% and 77.2% of total revenue for the years ended December 31, 2013, 2012 and 2011, respectively. Fox represented approximately 19.0% for the year ended December 31, 2013. | ||||||||||||
Collective Bargaining Agreements. As of December 31, 2013, approximately 34% of the Company’s employees were primarily represented under three industry-wide collective bargaining agreements to which the Company is a party. The majority of these employees are represented by agreements that will not expire in the next 12 months. |
Segment_and_Geographic_Informa
Segment and Geographic Information | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||
Segment and Geographic Information | ' | |||||||||||||||||||
Segment and Geographic Information | ||||||||||||||||||||
During the year ended December 31, 2013, the Company reorganized its internal management structure to align with changes in how it operates the business and evaluates financial performance of individual business units. As a result, there were changes to its operating segments and the Company has revised its segment information for prior periods to conform to the current presentation. The Company's three reportable segments are as follows: (i) Feature Films, (ii) Television Series and Specials and (iii) Consumer Products. Refer to Note 1 for a description of each of the Company's reportable segments. | ||||||||||||||||||||
Segment performance is evaluated based on revenues and gross profit. The Company does not allocate assets to each of its operating segments, nor does the Company's chief operating decision maker evaluate operating segments using discrete asset information. Information on the reportable segments and a reconciliation of total segment revenues and gross profit to consolidated financial statements are presented below (in thousands): | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Revenues | ||||||||||||||||||||
Feature Films | $ | 500,208 | $ | 582,759 | $ | 551,441 | ||||||||||||||
Television Series and Specials | 105,950 | 75,365 | 73,955 | |||||||||||||||||
Consumer Products | 67,256 | 48,674 | 43,094 | |||||||||||||||||
All Other | 33,502 | 43,044 | 37,533 | |||||||||||||||||
Total revenues | $ | 706,916 | $ | 749,842 | $ | 706,023 | ||||||||||||||
Gross profit(1) | ||||||||||||||||||||
Feature Films | $ | 203,362 | $ | 68,739 | $ | 214,783 | ||||||||||||||
Television Series and Specials | 23,119 | 12,221 | 9,256 | |||||||||||||||||
Consumer Products | 28,323 | 17,270 | 9,979 | |||||||||||||||||
All Other(2) | 2,309 | (27,060 | ) | (8,742 | ) | |||||||||||||||
Total gross profit | $ | 257,113 | $ | 71,170 | $ | 225,276 | ||||||||||||||
____________________ | ||||||||||||||||||||
(1) | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit as presented on the consolidated statements of operations, which includes a reconciliation to consolidated income (loss) before income taxes. | |||||||||||||||||||
(2) | During the years ended December 31, 2012 and 2011, All Other consisted primarily of the Company's live performance productions, which are no longer of significance. | |||||||||||||||||||
The following table presents goodwill for each of the Company's new reportable segments (in thousands): | ||||||||||||||||||||
Feature Films | Television Series and Specials | Consumer Products | All Other | Total | ||||||||||||||||
Balance as of December 31, 2011 | $ | 24,635 | $ | 3,422 | $ | 6,159 | $ | — | $ | 34,216 | ||||||||||
Acquisition of Classic Media | 26,777 | 3,719 | 6,694 | — | 37,190 | |||||||||||||||
Balance as of December 31, 2012 | 51,412 | 7,141 | 12,853 | — | 71,406 | |||||||||||||||
Acquisition of ATV | — | — | — | 118,617 | 118,617 | |||||||||||||||
Measurement period adjustments related to the acquisition of Classic Media | (7,417 | ) | (1,030 | ) | (1,854 | ) | — | (10,301 | ) | |||||||||||
Balance as of December 31, 2013 | $ | 43,995 | $ | 6,111 | $ | 10,999 | $ | 118,617 | $ | 179,722 | ||||||||||
Revenues attributable to foreign countries were approximately $383.8 million, $392.2 million and $356.9 million for the years ended December 31, 2013, 2012 and 2011, respectively. Long-lived assets located in foreign countries were not material. |
Earnings_Per_Share_Data
Earnings Per Share Data | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||
Earnings Per Share Data | ' | |||||||||||
Earnings Per Share Data | ||||||||||||
The following table sets forth the computation of basic and diluted net income (loss) per share (in thousands, except per share amounts): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Numerator: | ||||||||||||
Net income (loss) attributable to DreamWorks Animation SKG, Inc. | $ | 55,084 | $ | (36,422 | ) | $ | 86,801 | |||||
Denominator: | ||||||||||||
Weighted average common shares and denominator for basic calculation: | ||||||||||||
Weighted average common shares outstanding | 84,104 | 84,338 | 83,769 | |||||||||
Less: Unvested restricted stock | (110 | ) | (110 | ) | (102 | ) | ||||||
Denominator for basic calculation | 83,994 | 84,228 | 83,667 | |||||||||
Weighted average effects of dilutive stock-based compensation awards: | ||||||||||||
Employee stock options and stock appreciation rights | 87 | — | 2 | |||||||||
Restricted stock awards | 1,212 | — | 1,103 | |||||||||
Denominator for diluted calculation | 85,293 | 84,228 | 84,772 | |||||||||
Net income (loss) per share—basic | $ | 0.66 | $ | (0.43 | ) | $ | 1.04 | |||||
Net income (loss) per share—diluted | $ | 0.65 | $ | (0.43 | ) | $ | 1.02 | |||||
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 or market conditions which were not included in the calculation of diluted per share amounts because the effects would be anti-dilutive: | ||||||||||||
2013 | 2012(1) | 2011 | ||||||||||
Options to purchase shares of common stock and restricted stock awards | 1,744 | 3,084 | 2,531 | |||||||||
Stock appreciation rights | 4,030 | 5,199 | 5,496 | |||||||||
Total | 5,774 | 8,283 | 8,027 | |||||||||
____________________ | ||||||||||||
(1) | Due to the Company's loss for the year ended December 31, 2012, all potential common stock equivalents are anti-dilutive. | |||||||||||
The following table sets forth (in thousands) the number of equity awards that are contingently issuable which were not included in the calculation of diluted shares (for years where the Company had net income) as the required market and/or performance conditions had not been met as of the end of each of the respective years: | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Options to purchase shares of common stock and restricted stock awards | 763 | 701 | 816 | |||||||||
Stock appreciation rights | — | — | 800 | |||||||||
Total | 763 | 701 | 1,616 | |||||||||
Quarterly_Financial_Informatio
Quarterly Financial Information (Unaudited) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Quarterly Financial Information (Unaudited) | ' | ||||||||||||||||
Quarterly Financial Information (Unaudited) | |||||||||||||||||
The unaudited quarterly financial statements have been prepared on substantially the same basis as the audited financial statements, and, in the opinion of management, include all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the results of operations for such periods (in thousands, except per share data): | |||||||||||||||||
Quarter Ended | |||||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||||
(unaudited) | |||||||||||||||||
2013 | |||||||||||||||||
Revenues | $ | 134,648 | $ | 213,436 | $ | 154,549 | $ | 204,283 | |||||||||
Gross profit | 49,127 | 80,160 | 62,852 | 64,974 | (1) | ||||||||||||
Income before provision for income taxes | 6,532 | 32,366 | 16,998 | 19,008 | |||||||||||||
Net income | 6,114 | 22,248 | 10,079 | 17,282 | (1) | ||||||||||||
Net income attributable to DreamWorks Animation SKG, Inc. | 5,577 | 22,253 | 10,064 | 17,190 | (1) | ||||||||||||
Basic net income per share | $ | 0.07 | $ | 0.27 | $ | 0.12 | $ | 0.2 | |||||||||
Diluted net income per share | $ | 0.07 | $ | 0.26 | $ | 0.12 | $ | 0.2 | |||||||||
2012 | |||||||||||||||||
Revenues | $ | 136,084 | $ | 162,803 | $ | 186,298 | $ | 264,657 | |||||||||
Gross profit (loss) | 39,584 | 48,556 | 72,337 | (89,307 | ) | (1) | |||||||||||
Income (loss) before provision (benefit) for income taxes | 14,178 | 18,625 | 38,695 | (125,135 | ) | ||||||||||||
Net income (loss) | 9,074 | 12,772 | 24,440 | (82,708 | ) | (1) | |||||||||||
Net income (loss) attributable to DreamWorks Animation SKG, Inc. | 9,074 | 12,772 | 24,440 | (82,708 | ) | (1) | |||||||||||
Basic net income (loss) per share | $ | 0.11 | $ | 0.15 | $ | 0.29 | $ | (0.98 | ) | ||||||||
Diluted net income (loss) per share | $ | 0.11 | $ | 0.15 | $ | 0.29 | $ | (0.98 | ) | ||||||||
____________________ | |||||||||||||||||
(1) | During the quarters ended December 31, 2013 and 2012, the Company recorded impairment charges and write-downs of film and other inventory costs totaling $20.2 million and $157.2 million, respectively (See Note 6). |
Valuation_and_Qualifying_Accou
Valuation and Qualifying Accounts and Reserves | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Valuation and Qualifying Accounts and Reserves [Abstract] | ' | |||||||||||||||
Valuation and Qualifying Accounts and Reserves | ' | |||||||||||||||
Valuation and Qualifying Accounts and Reserves | ||||||||||||||||
The following is a summary of the valuation and qualifying accounts included in the consolidated balance sheets as of December 31, 2013, 2012 and 2011 (in thousands): | ||||||||||||||||
Balance at | Charged to | Deductions(2) | Balance at | |||||||||||||
Beginning | Operations(1) | End of Year | ||||||||||||||
of Year | ||||||||||||||||
Trade accounts receivable and Receivables from distributors | ||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||
2013 | $ | 2,581 | $ | 3,465 | $ | — | $ | 6,046 | ||||||||
2012 | $ | 2,518 | $ | 63 | $ | — | $ | 2,581 | ||||||||
2011 | $ | 3,003 | $ | 831 | $ | (1,316 | ) | $ | 2,518 | |||||||
Sales returns reserves | ||||||||||||||||
2013 | $ | 13,064 | $ | 31,797 | $ | (21,559 | ) | $ | 23,302 | |||||||
2012 | $ | — | $ | 13,896 | $ | (832 | ) | $ | 13,064 | |||||||
Balance at | Increases (Decreases) to Valuation Allowance | Charged to Operations | Balance at | |||||||||||||
Beginning | End of Year | |||||||||||||||
of Year | ||||||||||||||||
Deferred tax assets | ||||||||||||||||
Valuation allowance | ||||||||||||||||
2013 | $ | 28,749 | $ | (3,342 | ) | $ | (142 | ) | $ | 25,265 | ||||||
2012(3) | $ | 2,142 | $ | 24,948 | $ | 1,659 | $ | 28,749 | ||||||||
2011 | $ | 2,055 | $ | (2,055 | ) | $ | 2,142 | $ | 2,142 | |||||||
_______________ | ||||||||||||||||
(1) | Sales returns reserves are charged against revenues and are related to the distribution of non-theatrical content and direct-to-video product. The Company did not have such activity (which also now includes activity related to DreamWorks Animation properties) prior to the acquisition of Classic Media on August 29, 2012. | |||||||||||||||
(2) | For Allowance for doubtful accounts, represents reductions to the allowance for bad debt write-offs. For Sales returns reserves, represents reductions to the reserve for actual returns. | |||||||||||||||
(3) | The increase in the valuation allowance was primarily related to foreign deferred tax assets assumed in connection with the Classic Media acquisition. |
Restructuring_Charges
Restructuring Charges | 12 Months Ended |
Dec. 31, 2013 | |
Restructuring and Related Activities [Abstract] | ' |
Restructuring Charges | ' |
Restructuring Charges | |
During the three months ended December 31, 2012, the Company made a strategic business decision to change the production and release slates for some of its animated feature films. In connection with this decision, the Company committed to a restructuring plan to align its production and operating infrastructure. As a result, during the year ended December 31, 2012, the Company recorded a liability for non-retirement postemployment benefit charges totaling $4.6 million for 178 employees. These charges were recorded in costs of revenues in the Company's consolidated statements of operations. During the three months ended March 31, 2013, the Company implemented a restructuring plan to lower the cost structure, which resulted in a commitment to further reduce its workforce. As a result, the Company incurred additional restructuring charges attributable to employee-related costs (primarily related to severance and benefits) totaling $5.7 million for 106 employees for the year ended December 31, 2013. These charges were recorded in costs of revenues and selling, general and administrative expenses in the Company's consolidated statements of operations. Payments made during the year ended December 31, 2013 totaled $8.5 million (which includes the impact of accelerated vesting of certain stock-based compensation awards) related to these restructuring plans. As of December 31, 2013, $1.7 million remained accrued as a liability. The Company expects to complete its restructuring plans by June 30, 2014. The Company's restructuring plans are primarily attributable to its Feature Film reportable segment. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies - (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Recent Accounting Pronouncements | ' | ||
In July 2013, the FASB issued an accounting standard update relating to the presentation of unrecognized tax benefits. The accounting update requires companies to present a deferred tax asset net of related unrecognized tax benefits if there is a net operating loss or other tax carryforwards that would apply in settlement of the uncertain tax position. To the extent that an uncertain tax position would not be settled through a reduction of a net operating loss or other tax carryforwards, the unrecognized tax benefit will be presented as a liability. The guidance is effective for the Company's fiscal year beginning January 1, 2014, with early adoption permitted. The Company plans to adopt the new guidance effective January 1, 2014. The adoption of this guidance is expected to have an immaterial impact on the Company's consolidated financial statements. | |||
Principles of Consolidation | ' | ||
Principles of Consolidation | |||
The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animation and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. Intra-entity profit related to transactions with equity method investees is eliminated until the amounts are ultimately realized. | |||
In addition, the Company reviews its relationships with other entities to identify whether they are variable interest entities ("VIE") as defined by the Financial Accounting Standards Board ("FASB"), and to assess whether the Company is the primary beneficiary of such entity. If the determination is made that the Company is the primary beneficiary, then the entity is consolidated. | |||
Use of Estimates | ' | ||
Use of Estimates | |||
The preparation of financial statements in conformity with United States generally accepted accounting principles ("U.S. GAAP") requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates made by management in the preparation of the financial statements relate to the following: | |||
• | ultimate revenues and ultimate costs of film, television product and live performance productions; | ||
• | relative selling price of the Company's products for purposes of revenue allocation in multi-property licenses and other multiple deliverable arrangements; | ||
• | determination of fair value of assets and liabilities for the allocation of the purchase price in an acquisition; | ||
• | determination of fair value of non-cash contributions to investments in unconsolidated entities; | ||
• | useful lives of intangible assets; | ||
• | product sales that will be returned and the amount of receivables that ultimately will be collected; | ||
• | the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements; | ||
• | loss contingencies and contingent consideration arrangements; and | ||
• | assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting. | ||
Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis. | |||
Cash and Cash Equivalents | ' | ||
Cash and Cash Equivalents | |||
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. | |||
Trade Accounts Receivable | ' | ||
Trade Accounts Receivable | |||
Trade accounts receivable primarily consists of the following: receivables from licensees of the Company's intellectual property for use in various ancillary markets, such as merchandising, theme parks and cruise ships, receivables from licensees of film catalog and television series/specials titles and receivables related to the distribution of home video product. The Company imputes interest on receivables that are expected to be collectible during a period that exceeds 12 months and at a rate that represents the Company's best estimate of the rate at which the debtor can obtain financing of a similar nature from other sources at the date of the transaction. As of December 31, 2013 and 2012, trade accounts receivable included receivables totaling $85.7 million and $78.2 million, respectively, which were reduced by unamortized discounts totaling $8.1 million and $8.2 million, respectively. Interest rates used to impute interest ranged from 3% to 10%. | |||
The Company routinely reviews outstanding trade accounts receivable balances to determine whether an allowance for doubtful accounts should be recorded. The Company records an allowance for doubtful accounts for receivables on a specific identification basis. | |||
Investments | ' | ||
Investments | |||
Investments associated with the Company’s non-qualified deferred compensation plan (see Note 17) are classified as available-for-sale. Such investments are recorded at fair value, based on quoted prices in active markets, and unrealized gains and losses are included in other comprehensive income (loss) until realized. For the years ended December 31, 2013, 2012 and 2011, unrealized gains and losses were not material. Investments are reviewed on a regular basis to evaluate whether a decline in fair value below cost is other than temporary. | |||
Financial Instruments | ' | ||
Financial Instruments | |||
The fair value of cash and cash equivalents, accounts payable, advances and amounts outstanding under the revolving credit facility approximates carrying value due to the short-term maturity of such instruments and floating interest rates. As of December 31, 2013, 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 December 31, 2013, the fair value and the carrying value of the senior unsecured notes was $302.7 million and $300.0 million, respectively. The fair value of trade accounts receivable and the senior unsecured notes was determined using significant unobservable inputs by performing a discounted cash flow analysis and using current discount rates as appropriate for each type of instrument. | |||
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company limits its exposure to credit loss by placing its cash and cash equivalents in short-term money-market investments, which are rated AAA, with several financial institutions. Such investments, which are included in "Cash and cash equivalents" on the accompanying consolidated balance sheets, are classified as available-for-sale and reported at fair value, based on quoted prices in active markets. | |||
Concentration of Credit Risk | ' | ||
Concentration of Credit Risk | |||
Pursuant to the Company’s distribution and servicing arrangements, significant accounts receivable may be due from Paramount and Fox from time to time (see Note 4). As of December 31, 2013 and 2012, $191.0 million and $263.8 million, respectively, were due from Paramount. As of December 31, 2013, $73.9 million was due from Fox. Accounts receivable resulting from revenues earned in other markets are derived from sales to customers located principally in North America, Europe and Asia. As of December 31, 2013 and 2012, approximately 49% of the Company's trade accounts receivable balance consisted of long-term receivables related to licensing arrangements with Netflix, Inc. ("Netflix"). Additionally, as of December 31, 2013, approximately 31% of the Company's trade accounts receivable balance consisted of receivables due from Anderson Merchandisors ("Anderson"), a third-party distributor of home video product. The Company and its distributors perform ongoing credit evaluations of their customers and generally do not require collateral. | |||
Investment in Unconsolidated Entities | ' | ||
Investments in Unconsolidated Entities | |||
The Company has investments in unconsolidated entities which are presented on its consolidated balance sheets (refer to Note 9). In exchange for its ownership in such entities, the Company makes investments in the form of cash and/or non-cash contributions. The Company records non-cash contributions based on the fair value of the assets contributed, or the fair value of the ownership interest received, whichever is more readily determinable. | |||
The Company applies the cost method of accounting for investments in the common stock of unconsolidated entities when the Company does not have the ability to exercise significant influence. For investments in preferred stock, the Company applies the cost method of accounting if it concludes that the preferred stock is not in-substance common stock. | |||
Equity Method Investments | ' | ||
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. Prior to recording its share of net income or losses from equity method investees, investee financial statements are converted to U.S. GAAP. | |||
Business Acquisitions | ' | ||
Business Acquisitions | |||
The Company accounts for business acquisitions under the purchase method of accounting, whereby the purchase price (defined as the total consideration transferred to acquire the business) is allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair value. The excess of the purchase price over estimated fair value of the net identifiable assets is allocated to goodwill. The determination of estimated fair values requires significant estimates and assumptions including, but not limited to, expected use of the assets acquired, the expected cost to extinguish a liability, future cash flows to be generated from intellectual property and developing appropriate discount rates and market multiples. A change in the estimated fair value of an asset or liability often has a direct impact on the amount to recognize as goodwill, which is an asset that is not amortized. In applying the purchase method of accounting for a business acquisition, management may make adjustments to the fair value allocation, as of the acquisition date, during the measurement period (which is defined as a period of up to one year from the closing date of the acquisition) as a result of additional information obtained subsequent to the initial reporting of the acquisition. Adjustments made to the allocation of the purchase price, or adjustments made as a result of changes in estimates or assumptions, could impact the amount of assets, including goodwill and liabilities, ultimately recorded on the Company's balance sheet and could impact its operating results subsequent to such acquisition. | |||
Refer to Note 5 for further information related to the Company's acquisitions of ATV and Classic Media. | |||
Contingent Consideration | ' | ||
Contingent Consideration | |||
From time to time, the Company may enter into arrangements to acquire a business or assets that include a contingent consideration component, such as in the Company's acquisition of ATV. The fair value of contingent consideration is estimated using significant unobservable inputs as of the date of the acquisition and is recorded as part of the purchase price. Refer to Note 5 for further discussion of the contingent consideration related to the acquisition of ATV. | |||
Property, Plant and Equipment | ' | ||
Property, Plant and Equipment | |||
Property, plant and equipment are stated at the lower of cost or fair value. Depreciation of property, plant and equipment is calculated using the straight-line method over estimated useful lives assigned to each major asset category as shown below: | |||
Asset Category | Estimated Useful Life | ||
Buildings | 40 years | ||
Building improvements | 10 years | ||
Furniture and equipment | 5-10 years | ||
Computer hardware, software and equipment | 3-5 years | ||
Leasehold improvements are amortized using the straight-line method over the estimated useful life of the asset, not to exceed the remaining term of the lease. Repairs and maintenance costs are expensed as incurred. | |||
Gross versus Net Revenue | ' | ||
Gross versus Net Revenue | |||
Certain of the Company’s feature films, television specials and other properties are primarily distributed and marketed by third party distributors. The Company evaluates its arrangements with third parties to determine whether revenue should be reported under each individual arrangement on a gross or net basis by determining whether the Company acts as the principal or agent under the terms of each arrangement. To the extent that the Company acts as the principal in an arrangement, revenues are reported on a gross basis, resulting in revenues and expenses being classified in their respective financial statement line items. Conversely, to the extent that the Company acts as the agent in an arrangement, revenues are reported on a net basis, resulting in revenues being presented net of any related expenses. Determining whether the Company acts as principal or agent is based on an evaluation of which party has substantial risks and rewards of ownership under the terms of an arrangement. The most significant factors that the Company considers include identification of the primary obligor, as well as which party has general and physical inventory risk, credit risk and discretion in the supplier selection. The Company’s primary distribution arrangements, which are those for its theatrical releases, are recorded on a net basis as a result of the evaluation previously described. Revenues and costs related to the Company’s non-feature film content are typically recorded on a gross basis. | |||
Revenue Recognition | ' | ||
Revenue Recognition | |||
The Company recognizes revenue from the distribution of its animated feature films when earned and reported to it by its distributors. Pursuant to the Company's distribution arrangements with Fox, Paramount and ODW, the Company recognizes revenues derived from its feature films net of reserves for returns, rebates and other incentives after the particular distributor has retained their respective distribution fees (without deduction for any distribution and marketing costs or third-party distribution and fulfillment services fees) and recovered all of their permissible distribution and marketing costs with respect to the Company’s films on a title-by-title basis. Fox retains a fee of 8.0% of all gross receipts and home video gross receipts, except in connection with certain pay television and video-on-demand rights and other digital distribution rights, for which the fee will be 6.0%. Paramount retains a distribution fee of 8.0% of revenues across all markets. ODW retains a fee of 8.0% of all gross receipts for the markets in which it distributes. For further discussion of the Company's primary distribution arrangements, refer to Note 4. | |||
Additionally, because third parties are the principal distributors of the Company’s films, the amount of revenue that is recognized from films in any given period is dependent on the timing, accuracy and sufficiency of the information received from its distributors. As is typical in the film industry, the Company's distributors may make adjustments in future periods to information previously provided to the Company that could have a material impact on the Company’s operating results in later periods. Furthermore, management may, in its judgment, make material adjustments to the information reported by its distributors in future periods to ensure that revenues are accurately reflected in the Company’s financial statements. To date, the distributors have not made, nor has the Company made, subsequent material adjustments to information provided by the distributors and used in the preparation of the Company’s historical financial statements. | |||
Revenue from the theatrical exhibition of films is recognized at the later of when a film is exhibited in theaters or when revenue is reported by the Company's distributors. | |||
Revenue from both free and pay television licensing agreements for the Company’s films is recognized at the later of the time the production is made available for exhibition in those markets or it is reported by its distributors. | |||
The Company has also entered into licensing arrangements directly with third parties to digitally distribute its feature film and television series/specials content. Certain content licensed under these arrangements is subject to our distribution arrangement with Paramount, and accordingly, such revenues are recorded net of any distribution fees owed to Paramount (as previously described). However, revenues from content not subject to the Company's distribution arrangement with Paramount are recorded on a gross basis. | |||
The Company's television series/specials are also distributed in the television markets through license arrangements. Such revenues are recorded on a gross basis as they are not typically subject to the distribution arrangements with the Company's distributors and, accordingly, the Company receives payment and records revenues directly from third parties. Television market revenue generated from television series/specials is recognized at the later of the time when the content has been delivered to and accepted by the licensee or the commencement of the license term. | |||
Revenue from the sale of feature film home video units is recognized at the later of when product is made available for retail sale and when sales to customers are reported by third parties, such as fulfillment service providers or distributors. Revenue from the sale of home video units for other content (such as television series/specials) is recorded on a gross basis (because we are considered the principal in the transactions) and is recognized when the criteria for revenue recognition have been met. Certain of the Company's home video distribution arrangements for its non-feature film content include non-refundable, but recoupable, minimum guarantees. Minimum guarantees that are not fully recouped are recognized as revenue once the minimum guarantee period has expired and the Company is able to determine the amount of remaining revenues to be recognized. The criteria the Company evaluates to determine whether it is able to recognize revenue includes persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred or services have been rendered and risk of inventory loss has transferred and collectibility is reasonably assured. | |||
In addition, the Company and its distributors provide for future returns of home video product and for customer programs and sales incentives. The Company and its distributors calculates these estimates by analyzing a combination of historical returns, current economic trends, projections of consumer demand for the Company’s product and point-of-sale data available from certain retailers. Based on this information, a percentage of each sale is reserved. Customers are typically given varying rights of return, which may include 100% return rights. Although the Company and its distributors allow various rights of return for customers, management does not believe that these rights are critical in establishing return estimates, because other factors, such as historical experience with similar types of sales, information received from retailers and management’s assessment of the product’s appeal based on domestic box office success and other research, are more important to the estimation process. | |||
Revenue from merchandising and other licensing arrangements is recognized when the associated feature film or television series/special has been released and the criteria for revenue recognition have been met. The criteria that the Company uses to evaluate whether it is able to recognize revenue includes the following: persuasive evidence of an arrangement exists, the price is fixed and determinable, delivery has occurred or services have been rendered (including whether the license term has commenced) and collectibility is reasonably assured. Licensing and merchandising related minimum guarantees are generally recognized as revenue upon the theatrical release of a film and royalty-based revenues (revenues based upon a percentage of net sales of the products) are generally recognized as revenue in periods when royalties are reported by licensees or cash is received. | |||
Certain of the Company's arrangements may qualify as multiple deliverable arrangements if the licensee is granted the right to exploit more than one of the Company's titles. The license period for each title under a multiple deliverable arrangement may vary by title. Revenue associated with multiple deliverable arrangements is allocated to each title based on relative selling price. In determining the relative selling price of each title, the Company considers a variety of factors including (but not limited to) the period of time a title has already been exploited in the marketplace, whether the title is a sequel, the duration of the license period being granted, similar arrangements and type of content being licensed. Revenue for each title will be recognized when it is available to the licensee for exploitation. | |||
As a result of one of the Company's agreements with Netflix, it is currently developing and producing original episodic content in order to fulfill its obligations under the agreement. In cases where a television series is based on characters from one of the Company's 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 television series for use of intellectual property derived from the related feature film. | |||
Long-term, non-interest-bearing receivables arising from licensing agreements are discounted to present value. Accordingly, revenues are recorded net of such discount. Interest income is recognized from the imputation of interest in accordance with the effective interest rate method and classified as "Interest income, net" in the Company's consolidated statements of operations. | |||
Film and Other Inventory Costs | ' | ||
Film and Other Inventory Costs. The production costs of the Company’s animated feature films, television series/specials and live performances are stated at the lower of cost less accumulated amortization, or fair value. Production overhead, a component of film costs, includes allocable costs of individuals or departments with exclusive or significant responsibility for the production of films or television products. A significant portion of the Company’s resources are dedicated to the production of its film and television product. Capitalized production overhead does not include selling, general and administrative expenses. Interest expense on funds invested in production, if any, is capitalized into film costs until production is completed. In addition to the films and television series/specials being produced, costs of productions in development are capitalized as development film costs and are transferred to film production costs when a film or television series/special is set for production. In the event a film or television series/specials is not set for production within three years from the time the first costs are capitalized or the film or television series/specials is abandoned, all such costs are generally expensed. | |||
Costs of Revenues | ' | ||
Film and Other Inventory Costs Amortization. Once a feature film, television series/special or live performance is released, capitalized production costs are amortized and participations and residual costs are accrued on an individual title basis in the proportion that the revenue during the period for each title ("Current Revenue") bears to the estimated remaining total revenue to be recognized from all sources for each title ("Ultimate Revenue"). The amount of film and other inventory costs that is amortized each period will depend on the ratio of Current Revenue to Ultimate Revenue for each film, television series/special or live performance for such period. The Company makes certain estimates and judgments of Ultimate Revenue to be recognized for each title based on information received from its distributor or its operating partners, as well as its knowledge of the industry and historical experience. Ultimate Revenue does not include estimates of revenue that will be earned more than 10 years from a film’s initial theatrical release date. Ultimate Revenue for television series/specials does not include estimates of revenue that will be earned more than 10 years from the date of delivery of the first episode. | |||
Estimates of Ultimate Revenue and anticipated participation and residual costs are reviewed periodically in the ordinary course of business and are revised if necessary. A change in any given period to the Ultimate Revenue for an individual title will result in an increase or decrease to the percentage of amortization of capitalized film and other inventory costs and accrued participation and residual costs relative to a previous period. Depending on the performance of a title, significant changes to future Ultimate Revenue may occur, which could result in significant changes to the amortization of the capitalized production costs. | |||
Unamortized film, television series/specials and live performance production costs are evaluated for impairment each reporting period on a title-by-title basis to determine whether there are indicators of impairment. If there are indicators of impairment, the Company will determine the fair value of the unamortized costs for the title and the excess of the carrying value above the fair value is written off and the amount is classified as costs of revenues in the consolidated statements of operations and as amortization and write-off of film and other inventory costs in the consolidated statements of cash flows. In determining the fair value of its film and other inventory costs, the Company estimates fair value by calculating the net present value of the estimated remaining net cash flows to be generated for the title being evaluated. The Company bases these fair value measurements on unobservable inputs derived from the Company's assumptions about how market participants would price the asset. Due to the nature of these assets, market data for similar assets is not available. Key assumptions used in such fair value measurements include: (1) the discount rate applied to future cash flow streams, which is based on a risk-free rate plus a risk premium representing the risk associated with the type of property being exploited, (2) the performance in markets not yet released and (3) the number of years over which the Company estimates future net cash flows. The Company considers the sensitivity of these inputs in assessing its assumptions. See Note 6 for further information related to the impairment evaluation of film and other inventory costs. Additionally, on occasion, the Company may change the creative direction of, or abandon, one or more of the Company's films or other projects after being placed into production. As a result, amounts previously capitalized as production costs may be expensed. | |||
Amortization of film and other inventory costs in any period includes the effects of depreciation and amortization, interest expense and stock-based compensation expense that were capitalized as part of film and other inventory costs in the period that those charges were incurred. The total amount of such expenses reflected as a component of amortization of film and other inventory costs for the years ended December 31, 2013, 2012 and 2011 is presented in our statements of cash flows. | |||
Other. Direct costs for sales commissions to third parties for the licensing and merchandising of film characters and marketing and promotion costs and other product costs associated with the Company's live performances and certain of its television series/specials are recorded in costs of revenues and are expensed when incurred. In addition, since the close of the Company's acquisition of Classic Media, costs of revenues also include manufacturing costs related to physical inventory product sales (which also includes certain holiday-themed content based on DreamWorks Animation properties), distribution fees, participation and residual costs and amortization of intangible assets (which consists of certain character rights). | |||
Other Operating Income | ' | ||
Other Operating Income | |||
The Company classifies operating-related income or gains that are not considered revenues as other operating income in its consolidated statements of operations. Other operating income generally consists of income recognized in connection with the Company's contributions to ODW in the form of consulting and training services and the license of technology. Costs incurred to fulfill the Company's obligations related to these contributions are included in selling, general and administrative expenses in its consolidated statements of operations. Income related to the Company's contributions in the form of intellectual property licenses are included in revenues. The Company only recognizes the proportion of gains on contributions to equity method investees that is attributable to other investors' equity ownership interest in the investee. | |||
As part of the Company's contribution commitments to ODW, it has committed to licensing certain of its internally developed animation technology to ODW, including preparing the software in a format that can be delivered to ODW and providing ongoing maintenance. The Company determined, due to the level of preparation involved, that this constitutes significant modification and customization of the existing software, and accordingly, it uses the percentage-of-completion method for recognition of the income associated with this contribution. This amount is classified as other operating income in the consolidated statements of operations. Under the percentage-of-completion method, the Company uses costs incurred to measure progress towards completion. In addition, the Company makes certain estimates of the overall gross profit of the license granted and any changes in such estimates will be recorded in the period in which the change occurs. As the Company's investment in ODW is accounted for under the equity method of accounting, it only recognizes gross profit margin to the extent that control has transferred through the equity ownership interests (i.e., only 54.55% of the gross margin is recognized, which represents the portion of ODW that the Company does not own). | |||
Product Development Expense | ' | ||
Product Development Expense | |||
The Company records product development costs, which primarily consist of research and development costs related to its technology initiatives. Product development costs incurred prior to reaching the application development or technological feasibility stage are expensed. Certain software development costs incurred after reaching the application development stage (in the case of internally developed software) or the technological feasibility stage (in the case of software to be sold, leased or marketed) are capitalized. | |||
Advertising and Marketing Expenses | ' | ||
Advertising and Marketing Expenses | |||
The costs of prints, advertising and marketing related to the exploitation of feature films are incurred by the Company’s distributors pursuant to distribution and servicing arrangements (see Note 4). Advertising and marketing expenses that are not captured under the distribution and servicing arrangements, which are those primarily associated with the Company's merchandising and promotional activities, television series/specials and live performances, are expensed as incurred by the Company. | |||
Stock-Based Compensation | ' | ||
Stock-Based Compensation | |||
The Company records employee stock-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award (see Note 18). | |||
Estimates of the fair value of stock-based compensation awards are not intended to predict actual future events or the value ultimately realized by employees who receive such awards, and subsequent events are not indicative of the reasonableness of the original estimates of fair value made by the Company. Changes to the Company’s assessment of the probability of achieving performance criteria or the satisfaction of such criteria for performance-based awards granted to employees could significantly affect compensation expense to be recognized in future periods. | |||
Provision for Income Taxes | ' | ||
Provision for Income Taxes | |||
The Company accounts for income taxes pursuant to the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates or a change in tax status is recognized in the Company's financial statements in the period that includes the enactment date. The Company records a valuation allowance to reduce its deferred income tax assets to the amount that is more likely than not to be realized. In evaluating its ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing prudent and feasible tax-planning strategies and forecasts of future taxable income. | |||
At the time of the Company’s separation from the entity then known as DreamWorks L.L.C. ("Old DreamWorks Studios") in 2004, affiliates controlled by a former stockholder entered into a series of transactions that resulted in a partial increase in the tax basis of the Company’s tangible and intangible assets ("Tax Basis Increase"). This Tax Basis Increase was initially $1.61 billion, with the potential to reduce the amount of tax that the Company may pay in the future, to the extent the Company generates sufficient future taxable income, by $595.0 million. The Company is obligated to remit to the affiliate of the former stockholder 85% of any such cash savings under this "Stockholder’s Tax Agreement" in U.S. Federal income tax and California franchise tax and certain other related tax benefits, subject to repayment if it is determined that these savings should not have been available to the Company. The effect of the Tax Basis Increase on the Company's deferred tax assets was initially recognized in equity. Subsequent remeasurements of the deferred tax assets related to the Tax Basis Increase are recorded in the Company's statements of operations. | |||
To address uncertainty in tax positions, the Company uses a single comprehensive model that establishes the minimum recognition threshold and a measurement attribute for tax positions taken or expected to be taken in a tax return in order to be recognized in the financial statements (referred to as unrecognized tax benefits). The Company records reserves for uncertain tax positions based on its estimates of the amounts that are likely to be sustained under audit. In formulating such estimates, the Company considers the tax positions taken on its tax returns by evaluating current tax law, regulations and rulings published by taxing authorities, court decisions and recent audit results.The Company continues to follow the practice of recognizing interest and penalties related to income tax matters as part of the provision for income taxes. | |||
Impairment of Long-Lived Assets | ' | ||
Impairment of Long-Lived Assets | |||
The Company evaluates long-lived assets used in operations for impairment losses on an annual basis or when indicators of impairment are present. If the Company determines that indicators of impairment exist, the undiscounted cash flows estimated to be generated by those assets are compared to the assets’ carrying amount. If the undiscounted cash flows are less than the assets’ carrying amount, then the assets are deemed to not be recoverable from future cash flows and an impairment calculation is performed by determining the fair value of any impaired assets. The amount that an asset’s carrying value exceeds the fair value is recorded as an impairment loss. | |||
Goodwill | ' | ||
Goodwill and Other Intangible Assets | |||
The Company performs a goodwill impairment test on an annual basis, or sooner if indicators of impairment are identified. In connection with the goodwill impairment test, the Company first performs a qualitative assessment which includes reviewing factors such as market capitalization attributable to each reporting unit where goodwill is assigned, profit and margin trends and forecasts, macro-economic conditions, industry conditions and analyst reports. In addition, the Company performs sensitivity analysis of any financial data that is included in this assessment. | |||
As a result of changes to the Company's operating segments (as previously discussed), the Company was required to reallocate goodwill among its reporting units. Prior to the reallocation of goodwill, the Company performed a qualitative assessment to determine whether it was more likely than not that the fair value of the reporting units (prior to the change in segments) that were assigned goodwill was less than their carrying amounts. As a result of the assessment, the Company concluded that it was not more likely than not that the fair value of reporting units where goodwill has been assigned was less than the reporting units' respective carrying amount, and accordingly, no impairment was recorded. The Company reallocated goodwill based on the relative fair value of each of the individual reporting units to which goodwill is attributed. | |||
Intangible Assets | ' | ||
The Company has definite and indefinite-lived intangible assets, which primarily consist of character rights and programming content. At the time an acquisition, management makes estimates and assumptions as to whether each intangible asset identified has a definite life or is indefinite-lived. Character rights determined to have an indefinite life were due to the notoriety of the characters, as well as the strength and stability of the historical cash flows, which the Company believes will continue indefinitely. Definite-lived intangible assets consisting of character rights and programming content are amortized on a basis that aligns with the best estimate of the pattern of consumption of the asset over the individual asset's estimated useful life. The straight-line basis of amortization is used when the estimated cash flows from the assets are expected to be stable over the course of the assets' lives and not prone to significant volatility. For assets where the consumption pattern may fluctuate over time, the Company uses an amortization method that is based on the ratio that current gross revenues for the asset bear to the total of current and anticipated future gross revenues. The Company's definite-lived intangible assets have assigned useful lives ranging from two to 15 years. On an annual basis, the Company reassesses whether the useful lives assigned continue to be appropriate. | |||
In addition, indefinite-lived intangible assets are reviewed annually to determine whether it is more likely than not that the fair value of the assets (on an asset-by-asset basis) is less than its carrying amount. The Company's qualitative assessment includes an evaluation of remaining future net cash flows expected to be attributable to the intangible assets, macro-economic conditions and industry conditions. | |||
Earnings Per Share | ' | ||
Earnings Per Share | |||
The Company calculates basic per share amounts excluding dilution and using the weighted average number of common shares outstanding for the period, which includes the effects of treasury share purchases. Diluted per share amounts are calculated using the weighted average number of common shares outstanding during the period and, if dilutive, potential common shares outstanding during the period. Potential common shares include unvested restricted stock awards, common shares issuable upon exercise of stock options and stock appreciation rights using the treasury stock method and certain contingently issuable shares. | |||
Foreign Currency | ' | ||
Foreign Currency | |||
The financial position and results of operations of the Company’s foreign subsidiaries are determined using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rate in effect at each balance sheet date, except for certain investment and equity accounts which are translated at historical exchange rates. Income statement accounts are translated at average exchange rates in effect during each financial period. Foreign currency translation adjustments are included in accumulated other comprehensive income as a component of stockholders' equity. Foreign currency gains and losses related to intercompany transactions are classified in accumulated other comprehensive income if settlement is not planned or anticipated in the foreseeable future. Gains or losses related to intercompany transactions where settlement is anticipated, or those that result from the remeasurement of receivables and payables denominated in currencies other than the functional currency of an entity, are included in income. | |||
Comprehensive Income | ' | ||
Comprehensive Income | |||
Comprehensive income consists of two components, net income and other comprehensive income. Other comprehensive income refers to revenue, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of stockholders’ equity but are excluded from net income. The Company's other comprehensive income consists primarily of foreign currency translation adjustments that result from the consolidation of its foreign entities. The net income attributable to the non-controlling interests is presented in the Company’s consolidated statements of operations. There is no other comprehensive income or loss attributable to the non-controlling interests. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Accounting Policies [Abstract] | ' | ||
Schedule of property, plant and equipment | ' | ||
Depreciation of property, plant and equipment is calculated using the straight-line method over estimated useful lives assigned to each major asset category as shown below: | |||
Asset Category | Estimated Useful Life | ||
Buildings | 40 years | ||
Building improvements | 10 years | ||
Furniture and equipment | 5-10 years | ||
Computer hardware, software and equipment | 3-5 years |
Distribution_and_Servicing_Arr1
Distribution and Servicing Arrangements (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Distribution and Servicing Arrangements [Abstract] | ' | ||||
Summary of certain key terms in primary distribution arrangements | ' | ||||
The following table summarizes certain of the key terms related to the primary distribution arrangements under which the Company's films are distributed (which is followed by further detail of each of these arrangements): | |||||
Agreement Provision | Paramount Agreements | Fox Distribution Agreement | |||
Films Covered By Agreement | All films released theatrically prior to January 1, 2013 | (i) All films released theatrically between January 1, 2013 and December 31, 2017 | |||
(ii) Previously released films if and when distribution rights become available | |||||
Territory | Worldwide | Worldwide, excluding China and in certain instances, South Korea | |||
Minimum Film Commitment | 13 pictures | None | |||
Retained Rights | All rights not expressly granted, including derivative productions, theme park, merchandising, music and commercial tie-ins and promotions | (i) domestic television, SVOD and certain other digital rights (other than TVOD/EST/DTO) | |||
(ii) certain international television and SVOD rights subject to pre-existing agreements | |||||
(iii) derivative productions, theme park, merchandise, music and commercial tie-ins and promotions | |||||
(iv) nonexclusive rights to sell directly to consumers through "digital storefronts" | |||||
Distribution Fee | 8% of revenues | 8% of revenues, except 6% of: | |||
(i) domestic pay television (if licensed to Fox) | |||||
(ii) new international pay television agreements (i.e., those entered into after date of Fox Distribution Agreement, but excluding approved extensions of prior output agreements) | |||||
(iii) worldwide VOD and other digital distribution (excluding TVOD where packaged with physical) | |||||
Period of Distribution Rights ("Tail") | Distribution rights for each picture continue for 16 years after its initial domestic theatrical release | Distribution rights for all pictures continue until one year after initial home video release of the last theatrical release during the output term, subject to limited exception for certain approved TV licenses | |||
Change in Control Provision | During certain periods, we could have terminated upon a change in control and payment of specified fee | Either party may terminate if we experience a "change in control" |
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
AwesomenessTV, Inc. | ' | ||||||||||||
Business Acquisition [Line Items] | ' | ||||||||||||
Schedule of total consideration for business combination | ' | ||||||||||||
The following table outlines the components of consideration for the transaction (in thousands): | |||||||||||||
As of | |||||||||||||
3-May-13 | |||||||||||||
Cash payment | $ | 33,460 | |||||||||||
Estimated contingent consideration | 95,000 | ||||||||||||
Total consideration | $ | 128,460 | |||||||||||
Schedule of purchase price allocation | ' | ||||||||||||
The following table summarizes the preliminary allocation of the purchase price (in thousands): | |||||||||||||
As of | |||||||||||||
May 3, 2013(1) | |||||||||||||
Cash and cash equivalents | $ | 1,340 | |||||||||||
Trade receivables(2) | 1,279 | ||||||||||||
Prepaid and other assets | 434 | ||||||||||||
Productions costs | 612 | ||||||||||||
Property, plant and equipment | 183 | ||||||||||||
Intangible assets | 12,900 | ||||||||||||
Total identified assets acquired | 16,748 | ||||||||||||
Accounts payable | 655 | ||||||||||||
Deferred revenue | 2,057 | ||||||||||||
Deferred tax liabilities, net | 4,193 | ||||||||||||
Total liabilities assumed | 6,905 | ||||||||||||
Net identified assets acquired | 9,843 | ||||||||||||
Goodwill(3) | 118,617 | ||||||||||||
Total consideration | $ | 128,460 | |||||||||||
____________________ | |||||||||||||
-1 | Measurement period adjustments include a $0.5 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration. | ||||||||||||
-2 | Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible. | ||||||||||||
(3) | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. | ||||||||||||
Business acquisition, pro forma information | ' | ||||||||||||
Year Ended December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
(unaudited) | |||||||||||||
Revenues | $ | 707,738 | $ | 787,929 | $ | 788,119 | |||||||
Net income (loss) attributable to DreamWorks Animation SKG, Inc. | $ | 51,526 | $ | (49,778 | ) | $ | 92,872 | ||||||
Basic net income (loss) per share | $ | 0.61 | $ | (0.59 | ) | $ | 1.11 | ||||||
Diluted net income (loss) per share | $ | 0.6 | $ | (0.59 | ) | $ | 1.1 | ||||||
Classic Media | ' | ||||||||||||
Business Acquisition [Line Items] | ' | ||||||||||||
Schedule of purchase price allocation | ' | ||||||||||||
The following table summarizes the final allocation of the purchase price (in thousands): | |||||||||||||
As of | |||||||||||||
August 29, 2012(1) | |||||||||||||
Cash and cash equivalents | $ | 22,607 | |||||||||||
Trade receivables(2) | 21,883 | ||||||||||||
Physical inventory | 5,243 | ||||||||||||
Content library and programs in development | 5,603 | ||||||||||||
Prepaid expenses | 716 | ||||||||||||
Intangible assets | 136,600 | ||||||||||||
Property, plant and equipment | 1,325 | ||||||||||||
Other assets | 1,104 | ||||||||||||
Total identified assets acquired | 195,081 | ||||||||||||
Accounts payable | 918 | ||||||||||||
Accrued liabilities | 14,153 | ||||||||||||
Deferred revenue | 5,628 | ||||||||||||
Deferred tax liabilities, net | 20,406 | ||||||||||||
Total liabilities assumed | 41,105 | ||||||||||||
Net identified assets acquired | 153,976 | ||||||||||||
Goodwill(3) | 26,889 | ||||||||||||
Net assets acquired | 180,865 | ||||||||||||
Less: Non-controlling interests | 630 | ||||||||||||
Total cash consideration transferred | $ | 180,235 | |||||||||||
____________________ | |||||||||||||
(1) | Measurement period adjustments included a decrease to trade receivables assumed of $0.3 million, a decrease to accrued liabilities assumed of $1.8 million, a decrease to deferred tax liabilities of $8.4 million and other adjustments that were not material, resulting in a decrease of $10.0 million to goodwill. | ||||||||||||
(2) | Gross contractual amounts due total $22.5 million and, of this amount, no amounts are deemed to be uncollectible. | ||||||||||||
(3) | The goodwill resulting from the acquisition of Classic Media is not deductible for tax purposes. |
Film_and_Other_Inventory_Costs1
Film and Other Inventory Costs (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Film Costs [Abstract] | ' | |||||||
Film, television, live performance and other inventory costs | ' | |||||||
Film, television, live performance and other inventory costs consist of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
In release, net of amortization: | ||||||||
Feature films | $ | 285,238 | $ | 269,527 | ||||
Television series and specials | 58,631 | 35,703 | ||||||
Completed, not released: | ||||||||
Television series and specials(1) | — | 13,183 | ||||||
In production: | ||||||||
Feature films | 474,609 | 406,468 | ||||||
Television series and specials | 15,332 | 10,373 | ||||||
In development: | ||||||||
Feature films | 75,498 | 43,125 | ||||||
Television series and specials | 1,500 | 890 | ||||||
Product inventory and other(2) | 32,678 | 41,213 | ||||||
Total film, television, live performance and other inventory costs, net | $ | 943,486 | $ | 820,482 | ||||
_______________ | ||||||||
(1) | As of December 31, 2012, consists of a Valentine's Day-themed television special (based on characters from the Company's feature film Madagascar) that was released into the home entertainment market during the three months ended March 31, 2013. | |||||||
(2) | This category includes $24.8 million and $37.0 million of capitalized live performance costs at December 31, 2013 and 2012, respectively. In addition, as of December 31, 2013 and 2012, this category includes $7.9 million and $4.2 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market. |
Property_Plant_and_Equipment_T
Property, Plant and Equipment (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Property, Plant and Equipment [Abstract] | ' | |||||||||||
Schedule of property, plant and equipment | ' | |||||||||||
Property, plant and equipment consist of the following (in thousands): | ||||||||||||
Gross | Accumulated Depreciation and Amortization | Net | ||||||||||
As of December 31, 2013: | ||||||||||||
Land, buildings and improvements | $ | 214,922 | $ | (70,357 | ) | $ | 144,565 | |||||
Furniture and equipment | 30,918 | (17,285 | ) | 13,633 | ||||||||
Computer hardware and software | 99,499 | (76,610 | ) | 22,889 | ||||||||
Construction in progress | 5,583 | — | 5,583 | |||||||||
Total property, plant and equipment | $ | 350,922 | $ | (164,252 | ) | $ | 186,670 | |||||
As of December 31, 2012: | ||||||||||||
Land, buildings and improvements | $ | 210,399 | $ | (60,533 | ) | $ | 149,866 | |||||
Furniture and equipment | 25,351 | (16,291 | ) | 9,060 | ||||||||
Computer hardware and software | 86,015 | (60,241 | ) | 25,774 | ||||||||
Construction in progress | 4,286 | — | 4,286 | |||||||||
Total property, plant and equipment | $ | 326,051 | $ | (137,065 | ) | $ | 188,986 | |||||
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | |||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||
Schedule of definite-lived assets | ' | |||||||||||||||||
In addition, intangible assets were comprised of definite-lived intangible assets as follows (in thousands, unless otherwise noted): | ||||||||||||||||||
Weighted Average Estimated Useful Life (in years) | Gross | Accumulated Amortization | Impact of Foreign Currency Translation | Net | ||||||||||||||
As of December 31, 2013: | ||||||||||||||||||
Character rights | 13.9 | $ | 99,000 | $ | (8,663 | ) | $ | 1,754 | $ | 92,091 | ||||||||
Programming content | 2 | 11,200 | (3,733 | ) | — | 7,467 | ||||||||||||
Trademarks and trade names | 10 | 1,200 | (80 | ) | — | 1,120 | ||||||||||||
Other intangibles | 2 | 500 | (167 | ) | — | 333 | ||||||||||||
Total | $ | 111,900 | $ | (12,643 | ) | $ | 1,754 | $ | 101,011 | |||||||||
As of December 31, 2012: | ||||||||||||||||||
Character rights | 14 | $ | 100,027 | $ | (2,189 | ) | $ | 908 | $ | 98,746 | ||||||||
Schedule of expected amortization | ' | |||||||||||||||||
The Company expects to record amortization over the next five years as follows (in thousands): | ||||||||||||||||||
2014 | $ | 12,610 | ||||||||||||||||
2015 | 8,803 | |||||||||||||||||
2016 | 7,038 | |||||||||||||||||
2017 | 8,311 | |||||||||||||||||
2018 | 8,827 | |||||||||||||||||
Total | $ | 45,589 | ||||||||||||||||
Investments_in_Unconsolidated_1
Investments in Unconsolidated Entities (Tables) | 12 Months Ended | |||||||||
Dec. 31, 2013 | ||||||||||
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 | December 31, | |||||||||
31-Dec-13 | 2013 | 2012 | ||||||||
Oriental DreamWorks Holding Limited | 45.45% | $ | 16,389 | $ | — | |||||
All Other | 30%-50% | 3,140 | — | |||||||
Total equity method investments | 19,529 | — | ||||||||
Total cost method investments | 19,013 | 9,782 | ||||||||
Total investments in unconsolidated entities | $ | 38,542 | $ | 9,782 | ||||||
Schedule of losses from equity method investments | ' | |||||||||
Loss from equity method investees consist of the following (in thousands): | ||||||||||
31-Dec-13 | ||||||||||
Oriental DreamWorks Holding Limited(1) | $ | 5,352 | ||||||||
All Other | 1,539 | |||||||||
Loss from equity method investees | $ | 6,891 | ||||||||
____________________ | ||||||||||
(1) | The Company is recording 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 April 3, 2013 (ODW Closing Date) to November 30, 2013. | |||||||||
Schedule of differences in venture-level equity and investment in unconsolidated entity | ' | |||||||||
The following are the differences between the Company's venture-level equity and the balance of its investment in ODW (in thousands): | ||||||||||
December 31, 2013 | ||||||||||
Company's venture-level equity | $ | 46,906 | ||||||||
Technology and intellectual property licenses(1) | (20,444 | ) | ||||||||
Other(2) | (10,073 | ) | ||||||||
Total ODW investment recorded | $ | 16,389 | ||||||||
____________________ | ||||||||||
-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. |
Accrued_Liabilities_Tables
Accrued Liabilities (Tables) | 12 Months Ended | |||||||
Dec. 31, 2013 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Schedule of accrued liabilities | ' | |||||||
Accrued liabilities consist of the following (in thousands): | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Employee compensation | $ | 65,625 | $ | 34,513 | ||||
Participations and residuals | 50,690 | 46,201 | ||||||
Contingent consideration(1) | 97,545 | — | ||||||
Interest payable | 7,849 | 174 | ||||||
Deferred rent | 8,114 | 6,063 | ||||||
Other accrued liabilities | 33,845 | 36,935 | ||||||
Total accrued liabilities | $ | 263,668 | $ | 123,886 | ||||
____________________ | ||||||||
(1) | As of December 31, 2013, primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 5 for further information). |
Deferred_Revenue_and_Other_Adv1
Deferred Revenue and Other Advances (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
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 December 31, 2013 and 2012 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 years ended December 31, 2013, 2012 and 2011 (in thousands): | ||||||||||||||||||||
Amounts Earned | ||||||||||||||||||||
Balance at December 31, | For the Year Ended December 31, | |||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2011 | ||||||||||||||||
Home Box Office Inc. Advance(1) | $ | 1,902 | $ | — | $ | 36,121 | $ | 30,000 | $ | 45,000 | ||||||||||
Deferred Revenue | 13,502 | 16,547 | 28,083 | 21,971 | 7,174 | |||||||||||||||
Strategic Alliance/Development Advances(2) | 1,667 | 1,667 | 31,622 | 26,200 | 26,200 | |||||||||||||||
Other(3) | 19,354 | 7,303 | 21,229 | 29,318 | 24,651 | |||||||||||||||
Total deferred revenue and other advances | $ | 36,425 | $ | 25,517 | ||||||||||||||||
_______________ | ||||||||||||||||||||
(1) | The Company was a participant of an exclusive multi-picture domestic pay television license agreement originally entered into between Old DreamWorks Studios and Home Box Office, Inc. (“HBO”), pursuant to which the Company received advances against license fees payable for future film product. The agreement expired at the end of 2012. Accordingly, the last feature film subject to this agreement is Rise of the Guardians, which was released in the pay television market during the year ended December 31, 2013. | |||||||||||||||||||
(2) | The Company has strategic alliances with various technology companies pursuant to which the companies are permitted to promote themselves as DreamWorks Animation’s preferred technology provider in exchange for advancing the Company specified annual amounts. In addition, under the agreements, the Company makes purchases of the technology companies’ equipment. During the years ended December 31, 2013, 2012 and 2011, of the total amounts earned against the “Strategic Alliance/Development Advances,” $17.7 million, $14.3 million and $14.5 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the years ended December 31, 2013, 2012 and 2011, of the total amounts earned, $1.6 million, $2.5 million and $2.6 million, respectively, were recorded as a reduction to other assets. During the year ended December 31, 2013, $2.6 million was recorded as a reduction to prepaid expenses. During the years ended December 31, 2013, 2012 and 2011, of the total amounts earned, $1.4 million, $1.6 million and $1.5 million, respectively, were recorded as a reduction to operating expenses. | |||||||||||||||||||
(3) | As of December 31, 2013, this category's largest components consisted of advances related to a pending asset sale and advances related to production services for a third-party. |
Financing_Arrangements_Tables
Financing Arrangements (Tables) | 12 Months Ended | |||||||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||||||
Debt Disclosure [Abstract] | ' | |||||||||||||||||||||||
Schedule of financing arrangements | ' | |||||||||||||||||||||||
The following table summarizes information associated with the Company's financing arrangements (in thousands, except percentages): | ||||||||||||||||||||||||
Balance Outstanding at | Interest Expense | |||||||||||||||||||||||
December 31, | Maturity Date | Interest Rate at | Year Ended December 31, | |||||||||||||||||||||
December 31, | ||||||||||||||||||||||||
2013 | 2012 | 2013 | 2013 | 2012 | 2011 | |||||||||||||||||||
Senior Unsecured Notes | $ | 300,000 | $ | — | Aug-20 | 6.88% | $ | 2,433 | N/A | N/A | ||||||||||||||
Revolving Credit Facility | $ | — | $ | 165,000 | Aug-17 | N/A | $ | 1,423 | $ | 2,702 | $ | 669 | ||||||||||||
____________________ | ||||||||||||||||||||||||
N/A: Not applicable |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Tax Disclosure [Abstract] | ' | ||||||||||||
Schedule of domestic and foreign components of income (loss) before income taxes | ' | ||||||||||||
The following are the domestic and foreign components of the Company's income (loss) before income taxes for the years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Domestic | $ | 73,640 | $ | (48,103 | ) | $ | 128,063 | ||||||
Foreign | 1,264 | (5,534 | ) | (4,890 | ) | ||||||||
Income (loss) before income taxes | $ | 74,904 | $ | (53,637 | ) | $ | 123,173 | ||||||
Components of the provision for income taxes | ' | ||||||||||||
The following are the components of the provision (benefit) for income taxes for the years ended December 31, 2013, 2012 and 2011 (in thousands): | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Current: | |||||||||||||
Federal | $ | 8 | $ | (677 | ) | $ | (8,640 | ) | |||||
State and local | (2,909 | ) | 552 | (663 | ) | ||||||||
Foreign | 1,704 | 1,462 | 926 | ||||||||||
Total current (benefit) provision | (1,197 | ) | 1,337 | (8,377 | ) | ||||||||
Deferred: | |||||||||||||
Federal | 27,524 | (14,821 | ) | 42,981 | |||||||||
State and local | (7,146 | ) | (3,771 | ) | 1,768 | ||||||||
Foreign | — | 40 | — | ||||||||||
Total deferred provision (benefit) | 20,378 | (18,552 | ) | 44,749 | |||||||||
Total provision (benefit) for income taxes | $ | 19,181 | $ | (17,215 | ) | $ | 36,372 | ||||||
Schedule of effective income tax rate reconciliation | ' | ||||||||||||
Set forth below is a reconciliation of the components that caused the Company’s provision (benefit) for income taxes (including the income statement line item “(Increase) decrease in income tax benefit payable to former stockholder”) to differ from amounts computed by applying the U.S. Federal statutory rate of 35% for the years ended December 31, 2013, 2012 and 2011. | |||||||||||||
2013 | 2012(4) | 2011(4) | |||||||||||
Provision for income taxes (combined with increase/decrease in income tax benefit payable to former stockholder)(1): | |||||||||||||
U.S. Federal statutory rate | 35 | % | 35 | % | 35 | % | |||||||
U.S. state taxes, net of Federal benefit | (2.5 | ) | 3.7 | (1.1 | ) | ||||||||
Export sales exclusion/manufacturers deduction(2) | (0.2 | ) | 5.6 | (5.8 | ) | ||||||||
Research and development credit(2) | (3.6 | ) | — | (1.8 | ) | ||||||||
Federal energy tax credit(3) | (2.2 | ) | — | — | |||||||||
Executive compensation | 3.4 | (1.2 | ) | — | |||||||||
Stock-based compensation | 3.2 | (1.4 | ) | — | |||||||||
Transaction costs | 0.3 | (1.9 | ) | — | |||||||||
Change in valuation allowance | (0.2 | ) | (3.0 | ) | 1.7 | ||||||||
Change in certain California unrecognized tax benefits(5) | (5.4 | ) | — | — | |||||||||
Revaluation of deferred tax assets(6) | (2.4 | ) | 1 | (1.4 | ) | ||||||||
Return-to-provision | 0.2 | (0.7 | ) | (0.4 | ) | ||||||||
Other | 0.7 | (1.9 | ) | — | |||||||||
Effective tax rate (combined with increase/decrease in income tax benefit payable to former stockholder)(1) | 26.3 | % | 35.2 | % | 26.2 | % | |||||||
Less: change in income tax benefit payable to former stockholder(1): | |||||||||||||
U.S. state taxes, net of Federal benefit | — | (0.2 | ) | (0.4 | ) | ||||||||
Export sales exclusion/manufacturers deduction(2) | (0.2 | ) | (5.2 | ) | 3 | ||||||||
Revaluation of deferred tax assets(6) | 1.4 | (0.8 | ) | 3.5 | |||||||||
Return-to-provision | (0.7 | ) | (0.7 | ) | — | ||||||||
Other | (1.4 | ) | 2.3 | (1.4 | ) | ||||||||
Total change in income tax benefit payable to former stockholder(1) | (0.9 | )% | (4.6 | )% | 4.7 | % | |||||||
Effective tax rate | 25.4 | % | 30.6 | % | 30.9 | % | |||||||
_______________ | |||||||||||||
(1) | The Company is obligated to remit to the affiliate of the former stockholder 85% of any such cash savings in U.S. Federal income tax and California franchise tax and certain other related tax benefits (see Note 2). | ||||||||||||
(2) | The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment). | ||||||||||||
(3) | The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated. | ||||||||||||
(4) | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. | ||||||||||||
(5) | In October 2013, the Company received correspondence from the California Franchise Tax Board ("FTB") indicating that its California research and development ("R&D") credits for the years under audit would be accepted as originally filed on the Company's income tax returns. As a result, the Company recognized approximately $1.3 million of previously established net unrecognized tax benefits for this period during the three months ended December 31, 2013. Additionally, during the three months ended December 31, 2013, the Company recognized approximately $2.8 million of previously established net unrecognized tax benefits for its California R&D credits related to the years 2008 through 2012. | ||||||||||||
(6) | The revaluation of deferred tax assets resulted from changes in the Company's state tax rates. | ||||||||||||
Tax effects of temporary differences in deferred tax assets and deferred tax liabilities | ' | ||||||||||||
The tax effects of temporary differences that give rise to a significant portion of the deferred tax assets and deferred tax liabilities as of December 31, 2013 and 2012 are presented below (in thousands). | |||||||||||||
December 31, | |||||||||||||
2013 | 2012(4) | ||||||||||||
Deferred tax assets: | |||||||||||||
Tax Basis Increase (pursuant to Stockholder’s Tax Agreement) | $ | 228,975 | $ | 266,007 | |||||||||
Stock-based compensation(1) | 38,777 | 41,069 | |||||||||||
Accrued liabilities | 8,766 | 13,317 | |||||||||||
Net operating loss carryover | 97,926 | 48,735 | |||||||||||
Film development basis | 29,018 | 25,105 | |||||||||||
Research and development credit | 25,257 | 14,702 | |||||||||||
Other | 11,820 | 11,122 | |||||||||||
Deferred tax assets | 440,539 | 420,057 | |||||||||||
Less: Valuation allowance | (25,265 | ) | (28,749 | ) | |||||||||
Deferred tax assets (net of valuation allowance) | 415,274 | 391,308 | |||||||||||
Deferred tax liabilities: | |||||||||||||
Film basis and other intangible assets (net of amortization)(2)(3) | (179,314 | ) | (145,077 | ) | |||||||||
Other | (14,040 | ) | (8,224 | ) | |||||||||
Deferred tax liabilities | (193,354 | ) | (153,301 | ) | |||||||||
Net deferred tax assets | $ | 221,920 | $ | 238,007 | |||||||||
_______________ | |||||||||||||
(1) | Includes the portion of film inventory amortization expense attributable to stock-based compensation. | ||||||||||||
(2) | Includes capitalizable stock-based compensation. | ||||||||||||
(3) | A portion of the deferred tax liability relates to indefinite-lived intangible assets. | ||||||||||||
(4) | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. | ||||||||||||
Reconciliation of the balance of unrecognized tax benefits, excluding interest and penalties | ' | ||||||||||||
A tabular reconciliation of the balance of unrecognized tax benefits, excluding interest and penalties, as of December 31, 2013, 2012 and 2011, is presented below (in thousands): | |||||||||||||
Accrued Income Taxes | Payable to Former Stockholder | Total | |||||||||||
Balance at December 31, 2010 | $ | 8,470 | $ | (537 | ) | $ | 7,933 | ||||||
Increases related to prior year tax positions | 10,765 | 2,968 | 13,733 | ||||||||||
Decreases related to prior year tax positions | (3,358 | ) | (1,956 | ) | (5,314 | ) | |||||||
Increases related to current year positions | 2,432 | 125 | 2,557 | ||||||||||
Decreases related to current year positions | (191 | ) | — | (191 | ) | ||||||||
Balance at December 31, 2011 | $ | 18,118 | $ | 600 | $ | 18,718 | |||||||
Increases related to prior year tax positions | 2,493 | — | 2,493 | ||||||||||
Decreases related to prior year tax positions | (197 | ) | (9 | ) | (206 | ) | |||||||
Increases related to current year positions | 1,646 | 96 | 1,742 | ||||||||||
Decreases related to current year positions | (7 | ) | — | (7 | ) | ||||||||
Balance at December 31, 2012 | $ | 22,053 | $ | 687 | $ | 22,740 | |||||||
Increases related to prior year tax positions | 717 | — | 717 | ||||||||||
Decreases related to prior year tax positions | (7,666 | ) | (7 | ) | (7,673 | ) | |||||||
Decreases related to settlements | (2,015 | ) | — | (2,015 | ) | ||||||||
Increases related to current year positions | 1,138 | 100 | 1,238 | ||||||||||
Decreases related to current year positions | (312 | ) | — | (312 | ) | ||||||||
Balance at December 31, 2013(1) | $ | 13,915 | $ | 780 | $ | 14,695 | |||||||
_______________ | |||||||||||||
(1) | The total amount of unrecognized tax benefits as of December 31, 2013 that, if realized, would affect the Company’s effective tax rate is $14.1 million. |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2013 | ||||
Commitments and Contingencies Disclosure [Abstract] | ' | |||
Schedule of future minimum lease commitments | ' | |||
Future minimum lease commitments are as follows (in thousands): | ||||
Operating | ||||
Lease | ||||
Commitments | ||||
2014 | $ | 10,398 | ||
2015 | 9,091 | |||
2016 | 8,097 | |||
2017 | 8,073 | |||
2018 and thereafter | 28,951 | |||
Total | $ | 64,610 | ||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Share-based Compensation, Allocation and Classification in Financial Statements [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 years ended December 31, 2013, 2012 and 2011, respectively, was as follows (in thousands): | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Total stock-based compensation | $ | 18,531 | $ | 17,044 | $ | 28,301 | |||||||||||||||
Tax impact(1) | (4,874 | ) | (5,999 | ) | (7,415 | ) | |||||||||||||||
Reduction in net income | $ | 13,657 | $ | 11,045 | $ | 20,886 | |||||||||||||||
_______________ | |||||||||||||||||||||
(1) | Tax impact is determined at the Company’s combined effective tax rate, which includes the income statement line item "(Increase) decrease in income tax benefit payable to former stockholder" (see Note 13). | ||||||||||||||||||||
Schedule of restricted stock award activity under the Omnibus Plans | ' | ||||||||||||||||||||
The following table summarizes information about restricted stock award activity under the Omnibus Plans (in thousands, except per share amounts): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Restricted | Weighted | Restricted | Weighted | Restricted | Weighted | ||||||||||||||||
Stock | Average Grant- | Stock | Average Grant- | Stock | Average Grant- | ||||||||||||||||
Date | Date | Date | |||||||||||||||||||
Fair Value | Fair Value | Fair Value | |||||||||||||||||||
Outstanding at beginning of period | 5,121 | $ | 22.9 | 4,346 | $ | 25.69 | 3,662 | $ | 29.84 | ||||||||||||
Granted | 1,602 | $ | 28.19 | 2,638 | $ | 20.17 | 2,043 | $ | 21.21 | ||||||||||||
Vested | (1,199 | ) | $ | 24.16 | (1,346 | ) | $ | 25.99 | (949 | ) | $ | 30.4 | |||||||||
Forfeited | (342 | ) | $ | 22.74 | (517 | ) | $ | 24.4 | (410 | ) | $ | 29.54 | |||||||||
Balance at end of year | 5,182 | $ | 24.26 | 5,121 | $ | 22.9 | 4,346 | $ | 25.69 | ||||||||||||
Schedule of restricted stock awards, vesting subject to performance criteria | ' | ||||||||||||||||||||
The following table summarizes by year of grant the number of restricted stock awards for which vesting is subject to the achievement of performance criteria (in thousands): | |||||||||||||||||||||
Year of Grant | Performance- | ||||||||||||||||||||
Based(1) | |||||||||||||||||||||
2013 | 623 | ||||||||||||||||||||
2012 | 665 | ||||||||||||||||||||
2011 | 455 | ||||||||||||||||||||
2010 | 276 | ||||||||||||||||||||
Total | 2,019 | ||||||||||||||||||||
_______________ | |||||||||||||||||||||
(1) | The performance-based awards have been included herein based on the maximum number of shares that may vest. | ||||||||||||||||||||
Schedule of Black-Scholes assumptions | ' | ||||||||||||||||||||
The assumptions used in the Black-Scholes model were as follows(1): | |||||||||||||||||||||
2011 | |||||||||||||||||||||
Dividend yield | —% | ||||||||||||||||||||
Expected volatility | 33-39% | ||||||||||||||||||||
Risk-free interest rate | 1.17-2.60% | ||||||||||||||||||||
Weighted average expected term (years) | 6.25 | ||||||||||||||||||||
_______________ | |||||||||||||||||||||
(1) | Effective in 2012, stock options and stock appreciation rights are no longer being granted by the Company. | ||||||||||||||||||||
Schedule of stock option/stock appreciation rights activity under Omnibus plans | ' | ||||||||||||||||||||
The following table summarizes information about stock option/stock appreciation rights activity under the Omnibus Plans (in thousands, except per share amounts): | |||||||||||||||||||||
Year Ended December 31, | |||||||||||||||||||||
2013 | 2012 | 2011 | |||||||||||||||||||
Options | Weighted | Options | Weighted | Options | Weighted | ||||||||||||||||
Outstanding | Average Exercise | Outstanding | Average Exercise | Outstanding | Average Exercise | ||||||||||||||||
Price per Share | Price per Share | Price per Share | |||||||||||||||||||
Outstanding at beginning of period | 6,919 | $ | 29.54 | 7,945 | $ | 29.04 | 7,813 | $ | 29.21 | ||||||||||||
Options granted | — | $ | — | — | $ | — | 315 | $ | 26.56 | ||||||||||||
Options exercised | (496 | ) | $ | 28.29 | — | $ | — | (1 | ) | $ | 22.51 | ||||||||||
Options expired/canceled | (609 | ) | $ | 30.66 | (1,026 | ) | $ | 25.66 | (182 | ) | $ | 31.86 | |||||||||
Balance at end of year | 5,814 | $ | 29.53 | 6,919 | $ | 29.54 | 7,945 | $ | 29.04 | ||||||||||||
Schedule of outstanding and exercisable options | ' | ||||||||||||||||||||
The following table summarizes information concerning outstanding and exercisable options as of December 31, 2013: | |||||||||||||||||||||
Options outstanding | Options exercisable | ||||||||||||||||||||
Range of Exercise Prices per Share | Number | Weighted | Weighted | Number | Weighted | ||||||||||||||||
Outstanding (in thousands) | Average | Average | Exercisable (in thousands) | Average | |||||||||||||||||
Remaining | Exercise | Exercise | |||||||||||||||||||
Contractual | Price | Price | |||||||||||||||||||
Life | per Share | per Share | |||||||||||||||||||
(in years) | |||||||||||||||||||||
$19.29-$26.92 | 1,252 | 5.36 | $ | 24.8 | 1,097 | $ | 24.57 | ||||||||||||||
$27.06-$28.00 | 949 | 0.87 | $ | 27.96 | 949 | $ | 27.96 | ||||||||||||||
$28.10-$32.31 | 2,656 | 4.25 | $ | 30.18 | 2,630 | $ | 30.19 | ||||||||||||||
$32.86-$37.51 | 920 | 6.01 | $ | 35.27 | 727 | $ | 35.26 | ||||||||||||||
$37.58-$39.71 | 25 | 6.28 | $ | 39.69 | 19 | $ | 39.69 | ||||||||||||||
$43.46-$43.46 | 12 | 6.1 | $ | 43.46 | 9 | $ | 43.46 | ||||||||||||||
Total | 5,814 | 4.23 | $ | 29.53 | 5,431 | $ | 29.4 | ||||||||||||||
Concentrations_of_Risk_Tables
Concentrations of Risk (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
Risks and Uncertainties [Abstract] | ' | |||||||||||
Revenue by film and other | ' | |||||||||||
Revenues (which are included in the Feature Film and Consumer Products segments) for each of the films released during the years ended December 31, 2013, 2012 and 2011 are as follows (in thousands): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Turbo(1) | $ | 13,790 | $ | — | $ | — | ||||||
The Croods | 140,345 | — | — | |||||||||
Rise of the Guardians(2) | 77,348 | 6,096 | — | |||||||||
Madagascar 3 | 95,152 | 197,157 | — | |||||||||
Puss in Boots | 24,638 | 151,670 | 23,752 | |||||||||
Kung Fu Panda 2 | 35,250 | 74,285 | 144,815 | |||||||||
Megamind | 25,296 | 10,776 | 82,975 | |||||||||
Shrek Forever After | 16,652 | 36,437 | 78,596 | |||||||||
How to Train Your Dragon | 16,888 | 37,327 | 66,904 | |||||||||
Library(3) | 80,915 | 94,415 | 187,912 | |||||||||
All other(4) | 180,642 | 141,679 | 121,069 | |||||||||
Total revenues | $ | 706,916 | $ | 749,842 | $ | 706,023 | ||||||
_______________ | ||||||||||||
-1 | Turbo was released during the three months ended September 30, 2013. Pursuant to the terms of the Fox Distribution Agreement, because the distribution and marketing expenses incurred by Fox in the year of the film’s release exceeded that film’s gross revenues for such year, no revenue was reported to the Company directly from Fox with respect to that film in its year of release. Revenues recognized during the year ended December 31, 2013 were primarily attributable to the Chinese and South Korean theatrical markets, which are territories that are not distributed by Fox. | |||||||||||
(2) | Rise of the Guardians was released during the three months ended December 31, 2012. Pursuant to the terms of the Paramount Agreements, because the distribution and marketing expenses incurred by Paramount in the year of the film’s release exceeded that film’s gross revenues for such year, no revenue was reported to the Company directly from Paramount with respect to that film in its year of release. Revenues recognized during the year ended December 31, 2012 were primarily attributable to the Company’s licensing arrangements. | |||||||||||
(3) | Library, in each respective year, includes feature film titles not separately listed. | |||||||||||
(4) | For each period shown, "All other" consists of revenues not attributable to a specific feature film title. Examples of sources of revenue included in "All other" are those generated from multi-property licenses of the Company's characters (such as for use at theme parks, hotels or cruise ships), television series/specials, direct-to-video product, licensing of Classic Media properties, live performances and ATV. |
Segment_and_Geographic_Informa1
Segment and Geographic Information (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2013 | ||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||
Schedule of reportable segments and reconciliations of total segment profit | ' | |||||||||||||||||||
Information on the reportable segments and a reconciliation of total segment revenues and gross profit to consolidated financial statements are presented below (in thousands): | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2013 | 2012 | 2011 | ||||||||||||||||||
Revenues | ||||||||||||||||||||
Feature Films | $ | 500,208 | $ | 582,759 | $ | 551,441 | ||||||||||||||
Television Series and Specials | 105,950 | 75,365 | 73,955 | |||||||||||||||||
Consumer Products | 67,256 | 48,674 | 43,094 | |||||||||||||||||
All Other | 33,502 | 43,044 | 37,533 | |||||||||||||||||
Total revenues | $ | 706,916 | $ | 749,842 | $ | 706,023 | ||||||||||||||
Gross profit(1) | ||||||||||||||||||||
Feature Films | $ | 203,362 | $ | 68,739 | $ | 214,783 | ||||||||||||||
Television Series and Specials | 23,119 | 12,221 | 9,256 | |||||||||||||||||
Consumer Products | 28,323 | 17,270 | 9,979 | |||||||||||||||||
All Other(2) | 2,309 | (27,060 | ) | (8,742 | ) | |||||||||||||||
Total gross profit | $ | 257,113 | $ | 71,170 | $ | 225,276 | ||||||||||||||
____________________ | ||||||||||||||||||||
(1) | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit as presented on the consolidated statements of operations, which includes a reconciliation to consolidated income (loss) before income taxes. | |||||||||||||||||||
(2) | During the years ended December 31, 2012 and 2011, All Other consisted primarily of the Company's live performance productions, which are no longer of significance. | |||||||||||||||||||
Schedule of goodwill | ' | |||||||||||||||||||
The following table presents goodwill for each of the Company's new reportable segments (in thousands): | ||||||||||||||||||||
Feature Films | Television Series and Specials | Consumer Products | All Other | Total | ||||||||||||||||
Balance as of December 31, 2011 | $ | 24,635 | $ | 3,422 | $ | 6,159 | $ | — | $ | 34,216 | ||||||||||
Acquisition of Classic Media | 26,777 | 3,719 | 6,694 | — | 37,190 | |||||||||||||||
Balance as of December 31, 2012 | 51,412 | 7,141 | 12,853 | — | 71,406 | |||||||||||||||
Acquisition of ATV | — | — | — | 118,617 | 118,617 | |||||||||||||||
Measurement period adjustments related to the acquisition of Classic Media | (7,417 | ) | (1,030 | ) | (1,854 | ) | — | (10,301 | ) | |||||||||||
Balance as of December 31, 2013 | $ | 43,995 | $ | 6,111 | $ | 10,999 | $ | 118,617 | $ | 179,722 | ||||||||||
Earnings_Per_Share_Data_Tables
Earnings Per Share Data (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2013 | ||||||||||||
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 income (loss) per share (in thousands, except per share amounts): | ||||||||||||
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Numerator: | ||||||||||||
Net income (loss) attributable to DreamWorks Animation SKG, Inc. | $ | 55,084 | $ | (36,422 | ) | $ | 86,801 | |||||
Denominator: | ||||||||||||
Weighted average common shares and denominator for basic calculation: | ||||||||||||
Weighted average common shares outstanding | 84,104 | 84,338 | 83,769 | |||||||||
Less: Unvested restricted stock | (110 | ) | (110 | ) | (102 | ) | ||||||
Denominator for basic calculation | 83,994 | 84,228 | 83,667 | |||||||||
Weighted average effects of dilutive stock-based compensation awards: | ||||||||||||
Employee stock options and stock appreciation rights | 87 | — | 2 | |||||||||
Restricted stock awards | 1,212 | — | 1,103 | |||||||||
Denominator for diluted calculation | 85,293 | 84,228 | 84,772 | |||||||||
Net income (loss) per share—basic | $ | 0.66 | $ | (0.43 | ) | $ | 1.04 | |||||
Net income (loss) per share—diluted | $ | 0.65 | $ | (0.43 | ) | $ | 1.02 | |||||
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 or market conditions which were not included in the calculation of diluted per share amounts because the effects would be anti-dilutive: | ||||||||||||
2013 | 2012(1) | 2011 | ||||||||||
Options to purchase shares of common stock and restricted stock awards | 1,744 | 3,084 | 2,531 | |||||||||
Stock appreciation rights | 4,030 | 5,199 | 5,496 | |||||||||
Total | 5,774 | 8,283 | 8,027 | |||||||||
____________________ | ||||||||||||
(1) | Due to the Company's loss for the year ended December 31, 2012, all potential common stock equivalents are anti-dilutive. | |||||||||||
Number of equity awards that are contingently issuable | ' | |||||||||||
The following table sets forth (in thousands) the number of equity awards that are contingently issuable which were not included in the calculation of diluted shares (for years where the Company had net income) as the required market and/or performance conditions had not been met as of the end of each of the respective years: | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Options to purchase shares of common stock and restricted stock awards | 763 | 701 | 816 | |||||||||
Stock appreciation rights | — | — | 800 | |||||||||
Total | 763 | 701 | 1,616 | |||||||||
Quarterly_Financial_Informatio1
Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ||||||||||||||||
Unaudited quarterly financial statements | ' | ||||||||||||||||
The unaudited quarterly financial statements have been prepared on substantially the same basis as the audited financial statements, and, in the opinion of management, include all adjustments, consisting of only normal and recurring adjustments, necessary for a fair statement of the results of operations for such periods (in thousands, except per share data): | |||||||||||||||||
Quarter Ended | |||||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||||
(unaudited) | |||||||||||||||||
2013 | |||||||||||||||||
Revenues | $ | 134,648 | $ | 213,436 | $ | 154,549 | $ | 204,283 | |||||||||
Gross profit | 49,127 | 80,160 | 62,852 | 64,974 | (1) | ||||||||||||
Income before provision for income taxes | 6,532 | 32,366 | 16,998 | 19,008 | |||||||||||||
Net income | 6,114 | 22,248 | 10,079 | 17,282 | (1) | ||||||||||||
Net income attributable to DreamWorks Animation SKG, Inc. | 5,577 | 22,253 | 10,064 | 17,190 | (1) | ||||||||||||
Basic net income per share | $ | 0.07 | $ | 0.27 | $ | 0.12 | $ | 0.2 | |||||||||
Diluted net income per share | $ | 0.07 | $ | 0.26 | $ | 0.12 | $ | 0.2 | |||||||||
2012 | |||||||||||||||||
Revenues | $ | 136,084 | $ | 162,803 | $ | 186,298 | $ | 264,657 | |||||||||
Gross profit (loss) | 39,584 | 48,556 | 72,337 | (89,307 | ) | (1) | |||||||||||
Income (loss) before provision (benefit) for income taxes | 14,178 | 18,625 | 38,695 | (125,135 | ) | ||||||||||||
Net income (loss) | 9,074 | 12,772 | 24,440 | (82,708 | ) | (1) | |||||||||||
Net income (loss) attributable to DreamWorks Animation SKG, Inc. | 9,074 | 12,772 | 24,440 | (82,708 | ) | (1) | |||||||||||
Basic net income (loss) per share | $ | 0.11 | $ | 0.15 | $ | 0.29 | $ | (0.98 | ) | ||||||||
Diluted net income (loss) per share | $ | 0.11 | $ | 0.15 | $ | 0.29 | $ | (0.98 | ) | ||||||||
____________________ | |||||||||||||||||
(1) | During the quarters ended December 31, 2013 and 2012, the Company recorded impairment charges and write-downs of film and other inventory costs totaling $20.2 million and $157.2 million, respectively (See Note 6). |
Valuation_and_Qualifying_Accou1
Valuation and Qualifying Accounts and Reserves (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2013 | ||||||||||||||||
Valuation and Qualifying Accounts [Abstract] | ' | |||||||||||||||
Summary of Allowance for Doubtful Accounts, Sales Returns Reserves and Valuation Allowance | ' | |||||||||||||||
The following is a summary of the valuation and qualifying accounts included in the consolidated balance sheets as of December 31, 2013, 2012 and 2011 (in thousands): | ||||||||||||||||
Balance at | Charged to | Deductions(2) | Balance at | |||||||||||||
Beginning | Operations(1) | End of Year | ||||||||||||||
of Year | ||||||||||||||||
Trade accounts receivable and Receivables from distributors | ||||||||||||||||
Allowance for doubtful accounts | ||||||||||||||||
2013 | $ | 2,581 | $ | 3,465 | $ | — | $ | 6,046 | ||||||||
2012 | $ | 2,518 | $ | 63 | $ | — | $ | 2,581 | ||||||||
2011 | $ | 3,003 | $ | 831 | $ | (1,316 | ) | $ | 2,518 | |||||||
Sales returns reserves | ||||||||||||||||
2013 | $ | 13,064 | $ | 31,797 | $ | (21,559 | ) | $ | 23,302 | |||||||
2012 | $ | — | $ | 13,896 | $ | (832 | ) | $ | 13,064 | |||||||
Balance at | Increases (Decreases) to Valuation Allowance | Charged to Operations | Balance at | |||||||||||||
Beginning | End of Year | |||||||||||||||
of Year | ||||||||||||||||
Deferred tax assets | ||||||||||||||||
Valuation allowance | ||||||||||||||||
2013 | $ | 28,749 | $ | (3,342 | ) | $ | (142 | ) | $ | 25,265 | ||||||
2012(3) | $ | 2,142 | $ | 24,948 | $ | 1,659 | $ | 28,749 | ||||||||
2011 | $ | 2,055 | $ | (2,055 | ) | $ | 2,142 | $ | 2,142 | |||||||
_______________ | ||||||||||||||||
(1) | Sales returns reserves are charged against revenues and are related to the distribution of non-theatrical content and direct-to-video product. The Company did not have such activity (which also now includes activity related to DreamWorks Animation properties) prior to the acquisition of Classic Media on August 29, 2012. | |||||||||||||||
(2) | For Allowance for doubtful accounts, represents reductions to the allowance for bad debt write-offs. For Sales returns reserves, represents reductions to the reserve for actual returns. | |||||||||||||||
(3) | The increase in the valuation allowance was primarily related to foreign deferred tax assets assumed in connection with the Classic Media acquisition. |
Description_of_Business_Detail
Description of Business (Details) (Fox, Distribution Arrangement) | 12 Months Ended |
Dec. 31, 2013 | |
Fox | Distribution Arrangement | ' |
Business Operations [Line Items] | ' |
Distribution arrangement, output term (in years) | '5 years |
Period after U.S. home video release that output term will terminate | '1 year |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Narrative (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Oct. 27, 2004 | |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Senior unsecured notes | $300,000,000 | $0 | ' | ' |
Interest income | 4,200,000 | 3,800,000 | 1,600,000 | ' |
Receivables from distributors, net of allowance for doubtful accounts (see Note 9 for related party amounts) | 282,726,000 | 266,185,000 | ' | ' |
Marketing and advertising expense | 14,900,000 | 11,300,000 | 11,400,000 | ' |
Initial tax basis increase from related party transaction | ' | ' | ' | 1,610,000,000 |
Potential reduction in taxable income due to tax basis increase from related party transaction | ' | ' | ' | 595,000,000 |
Percentage the company is obligated to remit to an affiliate of the former stockholder | 85.00% | ' | ' | ' |
Period after which imputing interest in receivables begins (in months) | '12 months | ' | ' | ' |
Film and TV specials/series costs, capitalized but not set for production, maximum period for deferred recognition (in years) | '3 years | ' | ' | ' |
Maximum period for ultimate revenue estimates (in years) | '10 years | ' | ' | ' |
Proceeds from sale of a technology project | 6,377,000 | 0 | 0 | ' |
Variable Interest Entity, Primary Beneficiary | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Variable Interest Entity, Consolidated Assets | 700,000 | 9,800,000 | ' | ' |
Variable interest entity, consolidated operating expenses | 4,300,000 | 22,600,000 | ' | ' |
Variable Interest Entity, Consolidated Revenues | 3,500,000 | 12,500,000 | ' | ' |
Minimum | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Useful life of definite lived intangible assets (in years) | '2 years | ' | ' | ' |
Maximum | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Useful life of definite lived intangible assets (in years) | '15 years | ' | ' | ' |
ODW Holding Limited | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Equity method investment by third party, ownership percentage | 54.55% | ' | ' | ' |
Distribution Arrangement | Paramount | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Distribution fee | 8.00% | ' | ' | ' |
Distribution Arrangement | ODW | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Distribution fee | 8.00% | ' | ' | ' |
Trade Accounts Receivable | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Trade account receivable | 85,700,000 | 78,200,000 | ' | ' |
Receivable with Imputed Interest, Discount | 8,100,000 | 8,200,000 | ' | ' |
Trade Accounts Receivable | Minimum | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Receivable with imputed interest, effective yield (interest rate) | 3.00% | ' | ' | ' |
Trade Accounts Receivable | Maximum | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Receivable with imputed interest, effective yield (interest rate) | 10.00% | ' | ' | ' |
Unsecured Debt | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Senior unsecured notes, fair value | 302,700,000 | ' | ' | ' |
Senior unsecured notes | 300,000,000 | 0 | ' | ' |
Theatrical And Home Video Gross Receipts | Distribution Arrangement | Fox | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Distribution fee | 8.00% | ' | ' | ' |
Pay Television And Video On Demand [Member] | Distribution Arrangement | Fox | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Distribution fee | 6.00% | ' | ' | ' |
Credit Concentration Risk [Member] | Distributor | Paramount | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Receivables from distributors, net of allowance for doubtful accounts (see Note 9 for related party amounts) | 191,000,000 | 263,800,000 | ' | ' |
Credit Concentration Risk [Member] | Distributor | Fox | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Receivables from distributors, net of allowance for doubtful accounts (see Note 9 for related party amounts) | $73,900,000 | ' | ' | ' |
Credit Concentration Risk [Member] | Accounts Receivable | Netflix | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Concentration risk, percentage | 49.00% | 49.00% | ' | ' |
Credit Concentration Risk [Member] | Accounts Receivable | Anderson | ' | ' | ' | ' |
Summary of Significant Accounting Policies [Line Items] | ' | ' | ' | ' |
Concentration risk, percentage | 31.00% | ' | ' | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Property, Plant and Equipment (Details) | 12 Months Ended |
Dec. 31, 2013 | |
Buildings | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful life (in years) | '40 years |
Building Improvements | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful life (in years) | '10 years |
Minimum | Furniture and equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful life (in years) | '5 years |
Minimum | Computer hardware, software and equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful life (in years) | '3 years |
Maximum | Furniture and equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful life (in years) | '10 years |
Maximum | Computer hardware, software and equipment | ' |
Property, Plant and Equipment [Line Items] | ' |
Estimated useful life (in years) | '5 years |
Distribution_and_Servicing_Arr2
Distribution and Servicing Arrangements - (Details) (USD $) | 12 Months Ended | ||||||||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 03, 2013 |
Distribution Arrangement | Distribution Arrangement | Distribution Arrangement | Distribution Arrangement | Theatrical And Home Video Gross Receipts | Pay Television And Video On Demand [Member] | Pre-existing Arrangements | ODW Holding Limited | ODW Holding Limited | |
Paramount | Paramount | Paramount | Fox | Distribution Arrangement | Distribution Arrangement | Distribution Arrangement | |||
animated_film | Fox | Fox | Fox | ||||||
Distribution And Servicing Arrangements [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Distribution arrangement, output term (in years) | ' | ' | ' | '5 years | ' | ' | ' | ' | ' |
Distribution fee | 8.00% | ' | ' | ' | 8.00% | 6.00% | 8.00% | ' | ' |
DWA change in control provision, outstanding equity securities | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' |
Termination, change in ownership, acquisition by qualifying entity | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' |
Period of time in which written notice must be delivered to other party (in days) | ' | ' | ' | '90 days | ' | ' | ' | ' | ' |
Earliest date from time in which notice was delivered to actual contract termination (in years) | ' | ' | ' | '1 year | ' | ' | ' | ' | ' |
Number of new animated feature films required under Paramount agreements | 13 | ' | ' | ' | ' | ' | ' | ' | ' |
Annual cost reimbursement due from Paramount | ' | $7 | $7 | ' | ' | ' | ' | ' | ' |
Period in which third party can distribute animated films after general theatrical release (in years) | '16 years | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment, ownership percentage | ' | ' | ' | ' | ' | ' | ' | 45.45% | 45.45% |
Acquisitions_Details
Acquisitions (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | ||||||||||||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | 3-May-13 | Dec. 31, 2013 | Aug. 29, 2012 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 | 3-May-13 | 3-May-13 | Dec. 31, 2013 | 3-May-13 | Dec. 31, 2013 | 3-May-13 | ||||||||
AwesomenessTV, Inc. | AwesomenessTV, Inc. | Classic Media | Measurement Period Adjustment | Measurement Period Adjustment | Sensitivity, potential change | Sensitivity, potential change | Sensitivity, potential change | Income Approach Valuation Technique [Member] | Income Approach Valuation Technique [Member] | Discount Rate [Member] | Discount Rate [Member] | Volatility Rate [Member] | Volatility Rate [Member] | |||||||||||||||||||
AwesomenessTV, Inc. | Classic Media | AwesomenessTV, Inc. | AwesomenessTV, Inc. | Sensitivity, potential change | Sensitivity, potential change | Income Approach Valuation Technique [Member] | Sensitivity, potential change | Income Approach Valuation Technique [Member] | ||||||||||||||||||||||||
AwesomenessTV, Inc. | AwesomenessTV, Inc. | Sensitivity, potential change | AwesomenessTV, Inc. | Sensitivity, potential change | ||||||||||||||||||||||||||||
AwesomenessTV, Inc. | AwesomenessTV, Inc. | |||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Total consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $128,460,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Estimated contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 95,000,000 | 96,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Cash and cash equivalents | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,340,000 | [1] | ' | 22,607,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Trade receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,279,000 | [1],[3] | ' | 21,883,000 | [2],[4] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Physical inventory | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,243,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Content library and programs in development | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,603,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Prepaid expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 716,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Prepaid and other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 434,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Productions costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 612,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 136,600,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,900,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Property, plant and equipment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 183,000 | [1] | ' | 1,325,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Other assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,104,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Total identified assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 16,748,000 | [1] | ' | 195,081,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Accounts payable | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 655,000 | [1] | ' | 918,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Accrued liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 14,153,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,057,000 | [1] | ' | 5,628,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Deferred tax liabilities, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,193,000 | [1] | ' | 20,406,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Total liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,905,000 | [1] | ' | 41,105,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net identified assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 9,843,000 | [1] | ' | 153,976,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Goodwill | 179,722,000 | ' | ' | ' | 71,406,000 | ' | ' | ' | 179,722,000 | 71,406,000 | 34,216,000 | 118,617,000 | [1],[5] | ' | 26,889,000 | [2],[6] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Net assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 180,865,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Less: Non-controlling interests | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 630,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Total cash consideration transferred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 33,460,000 | ' | 180,235,000 | [2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||
Increase to goodwill | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -500,000 | -10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Acquired receivables, gross contractual amounts due | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,300,000 | ' | 22,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Acquired receivables deemed uncollectible | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Transaction costs for financial advisory, legal, accounting, tax and consulting services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Revenues | 204,283,000 | 154,549,000 | 213,436,000 | 134,648,000 | 264,657,000 | 186,298,000 | 162,803,000 | 136,084,000 | 706,916,000 | 749,842,000 | 706,023,000 | ' | 11,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Net income (loss) | 17,282,000 | [7] | 10,079,000 | 22,248,000 | 6,114,000 | -82,708,000 | [7] | 24,440,000 | 12,772,000 | 9,074,000 | 55,723,000 | -36,422,000 | 86,801,000 | ' | -2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Gross profit | 64,974,000 | [7] | 62,852,000 | 80,160,000 | 49,127,000 | -89,307,000 | [7] | 72,337,000 | 48,556,000 | 39,584,000 | 257,113,000 | [8] | 71,170,000 | [8] | 225,276,000 | [8] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Contingent consideration arrangement with former shareholders, term (in years) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Discount rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 18.00% | ' | ' | ' | 1.00% | 1.00% | 15.00% | 8.50% | 15.00% | ' | ' | ' | ' | |||||||
Volatility rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32.90% | ' | ' | ' | ' | ' | 20.00% | 32.60% | 20.00% | ' | ' | ' | ' | |||||||
Probability adjusted earnings in 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | |||||||
Probability adjusted earnings in 2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 41,000,000 | ' | ' | ' | ' | ' | |||||||
Change in fair value of contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 98,000,000 | 90,500,000 | 103,000,000 | 103,500,000 | |||||||
Maximum contingent consideration that may be earned | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 117,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Acquisition, net of cash acquired | ' | ' | ' | ' | ' | ' | ' | ' | 32,120,000 | 157,550,000 | 0 | ' | ' | 157,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Decrease in trade receivables | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Decrease in accrued liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Decrease in deferred tax liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ($8,400,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
Equity interest in joint venture | 50.00% | ' | ' | ' | ' | ' | ' | ' | 50.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||||
[1] | Measurement period adjustments include a $0.5 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration. | |||||||||||||||||||||||||||||||
[2] | Measurement period adjustments included a decrease to trade receivables assumed of $0.3 million, a decrease to accrued liabilities assumed of $1.8 million, a decrease to deferred tax liabilities of $8.4 million and other adjustments that were not material, resulting in a decrease of $10.0 million to goodwill. | |||||||||||||||||||||||||||||||
[3] | Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible. | |||||||||||||||||||||||||||||||
[4] | Gross contractual amounts due total $22.5 million and, of this amount, no amounts are deemed to be uncollectible. | |||||||||||||||||||||||||||||||
[5] | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. | |||||||||||||||||||||||||||||||
[6] | The goodwill resulting from the acquisition of Classic Media is not deductible for tax purposes. | |||||||||||||||||||||||||||||||
[7] | During the quarters ended DecemberB 31, 2013 and 2012, the Company recorded impairment charges and write-downs of film and other inventory costs totaling $20.2 million and $157.2 million, respectively (See Note 6). | |||||||||||||||||||||||||||||||
[8] | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit as presented on the consolidated statements of operations, which includes a reconciliation to consolidated income (loss) before income taxes. |
Acquisitions_Pro_Forma_Informa
Acquisitions - Pro Forma Information (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | |
AwesomenessTV, Inc. and Classic Media [Member] | AwesomenessTV, Inc. and Classic Media [Member] | Classic Media | Classic Media | AwesomenessTV, Inc. and Classic Media [Member] | AwesomenessTV, Inc. and Classic Media [Member] | |
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' |
Pro forma information, adjustments, increase (decrease) to income tax expense | ($1,300,000) | ($4,400,000) | ($4,400,000) | $1,100,000 | ' | ' |
Pro forma information, adjustments, increase in amortization expense | 3,900,000 | 11,800,000 | 2,900,000 | 1,600,000 | ' | ' |
Revenue | ' | ' | ' | 788,119,000 | 707,738,000 | 787,929,000 |
Net income attributable to DreamWorks Animation SKG, Inc. | ' | ' | ' | 92,872,000 | 51,526,000 | -49,778,000 |
Basic net income per share (in dollars per share) | ' | ' | ' | $1.11 | $0.61 | ($0.59) |
Diluted net income per share (in dollars per share) | ' | ' | ' | $1.10 | $0.60 | ($0.59) |
Business Acquisition, Pro Forma Net Income (Loss) | ' | ' | $2,500,000 | $2,800,000 | ' | ' |
Film_and_Other_Inventory_Costs2
Film and Other Inventory Costs (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Film Costs [Line Items] | ' | ' | ' | ' | |||
In release, net of amortization, feature films | $269,527,000 | $285,238,000 | $269,527,000 | ' | |||
In release, net of amortization, television series and specials | 35,703,000 | 58,631,000 | 35,703,000 | ' | |||
Completed, not released, television series and specials | 13,183,000 | [1] | 0 | 13,183,000 | [1] | ' | |
In production, feature films | 406,468,000 | 474,609,000 | 406,468,000 | ' | |||
In production, television series and specials | 10,373,000 | 15,332,000 | 10,373,000 | ' | |||
In development, feature films | 43,125,000 | 75,498,000 | 43,125,000 | ' | |||
In development, television series and specials | 890,000 | 1,500,000 | 890,000 | ' | |||
Product inventory and other | 41,213,000 | [2] | 32,678,000 | [2] | 41,213,000 | [2] | ' |
Total film, television, live performance and other inventory costs, net | 820,482,000 | 943,486,000 | 820,482,000 | ' | |||
Capitalized live performance costs | 37,000,000 | 24,800,000 | 37,000,000 | ' | |||
Release costs expected to be amortized over the next 12 months | ' | 45.00% | ' | ' | |||
Release costs expected to be amortized over three years | ' | 79.00% | ' | ' | |||
Write off of capitalized production costs, amount | 47,600,000 | ' | ' | ' | |||
Write off of capitalized development costs, amount | ' | ' | 20,300,000 | ' | |||
Estimated remaining cash flow period | '10 years | '10 years | ' | ' | |||
Impairment charges of film costs | ' | 20,200,000 | 89,300,000 | 0 | |||
Turbo | ' | ' | ' | ' | |||
Film Costs [Line Items] | ' | ' | ' | ' | |||
Impairment charges of film costs | ' | 13,500,000 | ' | ' | |||
Rise of the Guardians | ' | ' | ' | ' | |||
Film Costs [Line Items] | ' | ' | ' | ' | |||
Impairment charges of film costs | ' | ' | 86,900,000 | ' | |||
Impaired Film and Other Inventory Assets | Carrying (Reported) Amount, Fair Value Disclosure | ' | ' | ' | ' | |||
Film Costs [Line Items] | ' | ' | ' | ' | |||
Total film, television, live performance and other inventory costs, net | 71,000,000 | 102,300,000 | 71,000,000 | ' | |||
Minimum | Impaired Film and Other Inventory Assets | ' | ' | ' | ' | |||
Film Costs [Line Items] | ' | ' | ' | ' | |||
Discount rate used in fair value measurement | 7.00% | 7.00% | ' | ' | |||
Maximum | Impaired Film and Other Inventory Assets | ' | ' | ' | ' | |||
Film Costs [Line Items] | ' | ' | ' | ' | |||
Discount rate used in fair value measurement | 11.00% | 11.00% | ' | ' | |||
Sensitivity, potential change | ' | ' | ' | ' | |||
Film Costs [Line Items] | ' | ' | ' | ' | |||
Discount rate used in fair value measurement | 1.00% | 1.00% | ' | ' | |||
Film and other inventory costs, fair value change | 1,300,000 | 1,700,000 | 1,300,000 | ' | |||
DreamWorks Animation and Classic Media [Member] | ' | ' | ' | ' | |||
Film Costs [Line Items] | ' | ' | ' | ' | |||
Physical Inventory | $4,200,000 | $7,900,000 | $4,200,000 | ' | |||
[1] | As of December 31, 2012, consists of a Valentine's Day-themed television special (based on characters from the Company's feature film Madagascar) that was released into the home entertainment market during the three months ended March 31, 2013. | ||||||
[2] | This category includes $24.8 million and $37.0 million of capitalized live performance costs at DecemberB 31, 2013 and 2012, respectively. In addition, as of DecemberB 31, 2013 and 2012, this category includes $7.9 million and $4.2 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market. |
Property_Plant_and_Equipment_D
Property, Plant and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, plant and equipment, gross | $350,922,000 | $326,051,000 | ' |
Accumulated depreciation and amortization | -164,252,000 | -137,065,000 | ' |
Property, plant and equipment, net | 186,670,000 | 188,986,000 | ' |
Depreciation and amortization expense (other than film amortization) | 29,800,000 | 29,100,000 | 25,000,000 |
Expenses previously capitalized as part of film production costs, amortized in current period | 25,500,000 | 25,800,000 | 22,000,000 |
Land, buildings and improvements | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, plant and equipment, gross | 214,922,000 | 210,399,000 | ' |
Accumulated depreciation and amortization | -70,357,000 | -60,533,000 | ' |
Property, plant and equipment, net | 144,565,000 | 149,866,000 | ' |
Furniture and equipment | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, plant and equipment, gross | 30,918,000 | 25,351,000 | ' |
Accumulated depreciation and amortization | -17,285,000 | -16,291,000 | ' |
Property, plant and equipment, net | 13,633,000 | 9,060,000 | ' |
Computer hardware and software | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, plant and equipment, gross | 99,499,000 | 86,015,000 | ' |
Accumulated depreciation and amortization | -76,610,000 | -60,241,000 | ' |
Property, plant and equipment, net | 22,889,000 | 25,774,000 | ' |
Construction in progress | ' | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Property, plant and equipment, gross | 5,583,000 | 4,286,000 | ' |
Accumulated depreciation and amortization | 0 | 0 | ' |
Property, plant and equipment, net | $5,583,000 | $4,286,000 | ' |
Intangible_Assets_Details
Intangible Assets - (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Indefinite-lived intangible assets | $49,500,000 | $49,500,000 |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Gross | 111,900,000 | ' |
Accumulated Amortization | -12,643,000 | ' |
Impact of foreign currency translation | 1,754,000 | ' |
Net | 101,011,000 | ' |
Character Rights [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted Average Estimated Useful Life (in years) | '13 years 10 months 24 days | '14 years |
Gross | 99,000,000 | 100,027,000 |
Accumulated Amortization | -8,663,000 | -2,189,000 |
Impact of foreign currency translation | 1,754,000 | 908,000 |
Net | 92,091,000 | 98,746,000 |
Programming Content [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted Average Estimated Useful Life (in years) | '2 years | ' |
Gross | 11,200,000 | ' |
Accumulated Amortization | -3,733,000 | ' |
Impact of foreign currency translation | 0 | ' |
Net | 7,467,000 | ' |
Trademarks and Trade Names [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted Average Estimated Useful Life (in years) | '10 years | ' |
Gross | 1,200,000 | ' |
Accumulated Amortization | -80,000 | ' |
Impact of foreign currency translation | 0 | ' |
Net | 1,120,000 | ' |
Other Intangibles [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted Average Estimated Useful Life (in years) | '2 years | ' |
Gross | 500,000 | ' |
Accumulated Amortization | -167,000 | ' |
Impact of foreign currency translation | 0 | ' |
Net | $333,000 | ' |
Intangible_Assets_Amortization
Intangible Assets - Amortization Of Intangible Assets (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Goodwill and Intangible Assets Disclosure [Abstract] | ' | ' | ' |
Amortization of intangible assets | $10,475 | $2,189 | $0 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ' | ' | ' |
2014 | 12,610 | ' | ' |
2015 | 8,803 | ' | ' |
2016 | 7,038 | ' | ' |
2017 | 8,311 | ' | ' |
2018 | 8,827 | ' | ' |
Net | $45,589 | ' | ' |
Investments_in_Unconsolidated_2
Investments in Unconsolidated Entities (Details) (USD $) | Dec. 31, 2013 | Apr. 03, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Schedule of Cost and Equity Method Investments [Line Items] | ' | ' | ' |
Total equity method investments | $19,529 | ' | $0 |
Total cost method investments | 19,013 | ' | 9,782 |
Investments in unconsolidated entities | 38,542 | ' | 9,782 |
ODW Holding Limited | ' | ' | ' |
Schedule of Cost and Equity Method Investments [Line Items] | ' | ' | ' |
Equity method investment, ownership percentage | 45.45% | 45.45% | ' |
Total equity method investments | 16,389 | ' | 0 |
All Other [Member] | ' | ' | ' |
Schedule of Cost and Equity Method Investments [Line Items] | ' | ' | ' |
Total equity method investments | $3,140 | ' | $0 |
All Other [Member] | Maximum | ' | ' | ' |
Schedule of Cost and Equity Method Investments [Line Items] | ' | ' | ' |
Equity method investment, ownership percentage | 50.00% | ' | ' |
All Other [Member] | Minimum | ' | ' | ' |
Schedule of Cost and Equity Method Investments [Line Items] | ' | ' | ' |
Equity method investment, ownership percentage | 30.00% | ' | ' |
Investments_in_Unconsolidated_3
Investments in Unconsolidated Entities Loss From Equity Investments (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Schedule of Income (Loss) From Equity Method Investments [Line Items] | ' | ' | ' | |
Loss from equity method investees | $6,891 | $0 | $0 | |
ODW Holding Limited | ' | ' | ' | |
Schedule of Income (Loss) From Equity Method Investments [Line Items] | ' | ' | ' | |
Loss from equity method investees | 5,352 | [1] | ' | ' |
All Other [Member] | ' | ' | ' | |
Schedule of Income (Loss) From Equity Method Investments [Line Items] | ' | ' | ' | |
Loss from equity method investees | $1,539 | ' | ' | |
[1] | The Company is recording 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 April 3, 2013 (ODW Closing Date) to November 30, 2013. |
Investments_in_Unconsolidated_4
Investments in Unconsolidated Entities Basis Difference In Equity Investment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Total investment recorded | $19,529 | $0 | |
ODW Holding Limited | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Company's venture-level equity | 46,906 | ' | |
Total investment recorded | 16,389 | 0 | |
ODW Holding Limited | Technology and Intellectual Property Licenses [Member] | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Basis differences | -20,444 | [1] | ' |
ODW Holding Limited | Other [Member] | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Basis differences | ($10,073) | [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. |
Investments_in_Unconsolidated_5
Investments in Unconsolidated Entities Narrative (Details) (USD $) | 3 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Apr. 03, 2013 | Dec. 31, 2013 | |
ODW Holding Limited | Distribution Arrangement | ODW Holding Limited | ODW Holding Limited | Non-Cash Contributions [Member] | ||||||||||||
ODW Holding Limited | in-development_film_project | ODW Holding Limited | ||||||||||||||
Investments in and Advances to Affiliates [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment, ownership percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45.45% | 45.45% | ' |
Equity method investment, cash contribution commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | ' |
Cash paid at closing date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,700,000 | ' |
Estimated aggregate value of non-cash contributions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' |
Value of non-cash contributions satisfied | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 23,000,000 | ' | ' |
Remaining cash contribution commitment to be paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 44,300,000 | ' | ' |
Payment period for remaining cash contribution commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' |
Number of in-development film projects | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Value of consulting and training services to be rendered | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,600,000 | ' | ' |
Revenues | 204,283,000 | 154,549,000 | 213,436,000 | 134,648,000 | 264,657,000 | 186,298,000 | 162,803,000 | 136,084,000 | 706,916,000 | 749,842,000 | 706,023,000 | ' | 16,300,000 | ' | ' | 7,800,000 |
Other operating income | ' | ' | ' | ' | ' | ' | ' | ' | -14,709,000 | 0 | 0 | ' | ' | ' | ' | -8,100,000 |
Trade accounts receivable, net of allowance for doubtful accounts (see Note 9 for related party amounts) | 131,244,000 | ' | ' | ' | 109,102,000 | ' | ' | ' | 131,244,000 | 109,102,000 | ' | 3,800,000 | ' | ' | ' | ' |
Receivables from distributors, net of allowance for doubtful accounts (see Note 9 for related party amounts) | $282,726,000 | ' | ' | ' | $266,185,000 | ' | ' | ' | $282,726,000 | $266,185,000 | ' | $16,700,000 | ' | ' | ' | ' |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | |
Payables and Accruals [Abstract] | ' | ' | |
Employee compensation | $65,625,000 | $34,513,000 | |
Participations and residuals | 50,690,000 | 46,201,000 | |
Contingent Consideration, Liability | 97,545,000 | [1] | 0 |
Interest payable | 7,849,000 | 174,000 | |
Deferred rent | 8,114,000 | 6,063,000 | |
Other accrued liabilities | 33,845,000 | 36,935,000 | |
Total accrued liabilities | 263,668,000 | 123,886,000 | |
Accrued participation and residual costs estimated to pay over the next 12 months | $28,100,000 | ' | |
[1] | As of DecemberB 31, 2013, primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 5 for further information). |
Deferred_Revenue_and_Other_Adv2
Deferred Revenue and Other Advances (Details) (USD $) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Deferred revenue and other advances | $36,425,000 | $25,517,000 | ' | |||
Home Box Office Inc., Advance | ' | ' | ' | |||
Deferred revenue and other advances | 1,902,000 | [1] | 0 | [1] | ' | |
Deferred revenue and other advances, amounts earned | 36,121,000 | [1] | 30,000,000 | [1] | 45,000,000 | [1] |
Deferred Revenue | ' | ' | ' | |||
Deferred revenue and other advances | 13,502,000 | 16,547,000 | ' | |||
Deferred revenue and other advances, amounts earned | 28,083,000 | 21,971,000 | 7,174,000 | |||
Strategic Alliance/Development Advances | ' | ' | ' | |||
Deferred revenue and other advances | 1,667,000 | [2] | 1,667,000 | [2] | ' | |
Deferred revenue and other advances, amounts earned | 31,622,000 | [2] | 26,200,000 | [2] | 26,200,000 | [2] |
Amount capitalized as offset to property, plant and equipment | 17,700,000 | 14,300,000 | 14,500,000 | |||
Amount capitalized as offset to other assets | 1,600,000 | 2,500,000 | 2,600,000 | |||
Amount capitalized as offset to prepaid assets | 2,600,000 | ' | ' | |||
Amount recorded as an offset to operating expenses | 1,400,000 | 1,600,000 | 1,500,000 | |||
Other | ' | ' | ' | |||
Deferred revenue and other advances | 19,354,000 | [3] | 7,303,000 | [3] | ' | |
Deferred revenue and other advances, amounts earned | $21,229,000 | [3] | $29,318,000 | [3] | $24,651,000 | [3] |
[1] | The Company was a participant of an exclusive multi-picture domestic pay television license agreement originally entered into between Old DreamWorks Studios and Home Box Office, Inc. (bHBOb), pursuant to which the Company received advances against license fees payable for future film product. The agreement expired at the end of 2012. Accordingly, the last feature film subject to this agreement is Rise of the Guardians, which was released in the pay television market during the year ended December 31, 2013. | |||||
[2] | The Company has strategic alliances with various technology companies pursuant to which the companies are permitted to promote themselves as DreamWorks Animationbs preferred technology provider in exchange for advancing the Company specified annual amounts. In addition, under the agreements, the Company makes purchases of the technology companiesb equipment. During the years ended DecemberB 31, 2013, 2012 and 2011, of the total amounts earned against the bStrategic Alliance/Development Advances,b $17.7 million, $14.3 million and $14.5 million, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the years ended DecemberB 31, 2013, 2012 and 2011, of the total amounts earned, $1.6 million, $2.5 million and $2.6 million, respectively, were recorded as a reduction to other assets. During the year ended DecemberB 31, 2013, $2.6 million was recorded as a reduction to prepaid expenses. During the years ended DecemberB 31, 2013, 2012 and 2011, of the total amounts earned, $1.4 million, $1.6 million and $1.5 million, respectively, were recorded as a reduction to operating expenses. | |||||
[3] | As of December 31, 2013, this category's largest components consisted of advances related to a pending asset sale and advances related to production services for a third-party. |
Financing_Arrangements_Details
Financing Arrangements (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 14, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Aug. 09, 2012 | |
Unsecured Debt | Unsecured Debt | Unsecured Debt | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest incurred | $13,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | 300,000,000 | ' | ' | ' | ' | ' | ' |
Percentage of redeemable principal amount by Company | ' | ' | ' | ' | 106.88% | ' | ' | ' | ' | ' |
Debt sold to investors, percentage of principle amount sold | ' | ' | ' | 100.00% | ' | ' | ' | ' | ' | ' |
Proceeds from issuance of long-term debt | ' | ' | ' | 294,000,000 | ' | ' | ' | ' | ' | ' |
Redemption price of principle amount due to change in control, percentage | ' | ' | ' | ' | 101.00% | ' | ' | ' | ' | ' |
Debt instrument, percentage redeemable, certain equity offerings | ' | ' | ' | ' | 35.00% | ' | ' | ' | ' | ' |
Line of credit, maximum borrowing capacity | ' | ' | ' | ' | ' | ' | 400,000,000 | ' | ' | 200,000,000 |
Annual commitment fee on undrawn amounts of revolving credit facility | ' | ' | ' | ' | ' | ' | 0.38% | ' | ' | ' |
Commitment fee percentage, rate spread over bank base rate | ' | ' | ' | ' | ' | ' | 1.50% | ' | ' | ' |
Commitment fee percentage, rate spread over LIBOR | ' | ' | ' | ' | ' | ' | 2.50% | ' | ' | ' |
Senior unsecured notes | 300,000,000 | 0 | ' | ' | 300,000,000 | 0 | ' | ' | ' | ' |
Revolving credit facility | 0 | 165,000,000 | ' | ' | ' | ' | 0 | 165,000,000 | ' | ' |
Expiration date of senior unsecured notes | ' | ' | ' | ' | 15-Aug-20 | ' | ' | ' | ' | ' |
Expiration date of revolving credit facility | ' | ' | ' | ' | ' | ' | 1-Aug-17 | ' | ' | ' |
Stated interest rate of debt | ' | ' | ' | 6.88% | 6.88% | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | 2,433,000 | ' | 1,423,000 | 2,702,000 | 669,000 | ' |
Interest capitalized to film costs | $9,500,000 | $0 | $0 | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Domestic_and_Fore
Income Taxes - Domestic and Foreign Components of Income (Loss) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Domestic | ' | ' | ' | ' | ' | ' | ' | ' | $73,640 | ($48,103) | $128,063 |
Foreign | ' | ' | ' | ' | ' | ' | ' | ' | 1,264 | -5,534 | -4,890 |
Income (loss) before income taxes | $19,008 | $16,998 | $32,366 | $6,532 | ($125,135) | $38,695 | $18,625 | $14,178 | $74,904 | ($53,637) | $123,173 |
Income_Taxes_Provision_for_Inc
Income Taxes - Provision for Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Current: | ' | ' | ' |
Federal | $8 | ($677) | ($8,640) |
State and local | -2,909 | 552 | -663 |
Foreign | 1,704 | 1,462 | 926 |
Total current (benefit) provision | -1,197 | 1,337 | -8,377 |
Deferred: | ' | ' | ' |
Federal | 27,524 | -14,821 | 42,981 |
State and local | -7,146 | -3,771 | 1,768 |
Foreign | 0 | 40 | 0 |
Total deferred provision (benefit) | 20,378 | -18,552 | 44,749 |
Provision (benefit) for income taxes | $19,181 | ($17,215) | $36,372 |
Income_Taxes_Reconciliation_of
Income Taxes - Reconciliation of Income Tax Rate (Details) | 12 Months Ended | |||||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||
Income Tax Disclosure [Abstract] | ' | ' | ' | |||
Effective tax rate | 25.40% | [1] | 30.60% | [1],[2] | 30.90% | [1],[2] |
Income Tax Disclosure [Line Items] | ' | ' | ' | |||
U.S. Federal statutory rate | 35.00% | [1] | 35.00% | [1],[2] | 35.00% | [1],[2] |
Portion Including Payable To Former Stockholder | ' | ' | ' | |||
Income Tax Disclosure [Line Items] | ' | ' | ' | |||
U.S. state taxes, net of Federal benefit | -2.50% | [1] | 3.70% | [1],[2] | -1.10% | [1],[2] |
Export sales exclusion/manufacturers deduction | -0.20% | [1],[3] | 5.60% | [1],[2],[3] | -5.80% | [1],[2],[3] |
Research and development credit | -3.60% | [1],[3] | 0.00% | [1],[2],[3] | -1.80% | [1],[2],[3] |
Federal energy tax credit | -2.20% | [1],[4] | 0.00% | [1],[2],[4] | 0.00% | [1],[2],[4] |
Executive compensation | 3.40% | [1] | -1.20% | [1],[2] | 0.00% | [1],[2] |
Stock-based compensation | 3.20% | [1] | -1.40% | [1],[2] | 0.00% | [1],[2] |
Transaction costs | 0.30% | [1] | -1.90% | [1],[2] | 0.00% | [1],[2] |
Change in valuation allowance | -0.20% | [1] | -3.00% | [1],[2] | 1.70% | [1],[2] |
Change in certain California unrecognized tax benefits | -5.40% | [1],[5] | 0.00% | [1],[2],[5] | 0.00% | [1],[2],[5] |
Revaluation of deferred tax assets | -2.40% | [1],[6] | 1.00% | [1],[2],[6] | -1.40% | [1],[2],[6] |
Return-to-provision | 0.20% | [1] | -0.70% | [1],[2] | -0.40% | [1],[2] |
Other | 0.70% | [1] | -1.90% | [1],[2] | 0.00% | [1],[2] |
Effective tax rate (combined with increase/decrease in income tax benefit payable to former stockholder) | 26.30% | [1] | 35.20% | [1],[2] | 26.20% | [1],[2] |
Portion Relating To Payable To Former Stockholder | ' | ' | ' | |||
Income Tax Disclosure [Line Items] | ' | ' | ' | |||
U.S. state taxes, net of Federal benefit | 0.00% | [1] | -0.20% | [1],[2] | -0.40% | [1],[2] |
Export sales exclusion/manufacturers deduction | -0.20% | [1],[3] | -5.20% | [1],[2],[3] | 3.00% | [1],[2],[3] |
Revaluation of deferred tax assets | 1.40% | [1],[6] | -0.80% | [1],[2],[6] | 3.50% | [1],[2],[6] |
Return-to-provision | -0.70% | [1] | -0.70% | [1],[2] | 0.00% | [1],[2] |
Other | -1.40% | [1] | 2.30% | [1],[2] | -1.40% | [1],[2] |
Total change in income tax benefit payable to former stockholder | -0.90% | [1] | -4.60% | [1],[2] | 4.70% | [1],[2] |
[1] | The Company is obligated to remit to the affiliate of the former stockholder 85% of any such cash savings in U.S. Federal income tax and California franchise tax and certain other related tax benefits (see Note 2). | |||||
[2] | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. | |||||
[3] | The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment). | |||||
[4] | The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated. | |||||
[5] | In October 2013, the Company received correspondence from the California Franchise Tax Board ("FTB") indicating that its California research and development ("R&D") credits for the years under audit would be accepted as originally filed on the Company's income tax returns. As a result, the Company recognized approximately $1.3 million of previously established net unrecognized tax benefits for this period during the three months ended December 31, 2013. Additionally, during the three months ended December 31, 2013, the Company recognized approximately $2.8 million of previously established net unrecognized tax benefits for its California R&D credits related to the years 2008 through 2012. | |||||
[6] | The revaluation of deferred tax assets resulted from changes in the Company's state tax rates. |
Income_Taxes_Deferred_Assets_a
Income Taxes - Deferred Assets and Liabilities (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Deferred tax assets: | ' | ' | ||
Tax Basis Increase (pursuant to Stockholderbs Tax Agreement) | $228,975 | $266,007 | [1] | |
Stock-based compensation | 38,777 | [2] | 41,069 | [1],[2] |
Accrued liabilities | 8,766 | 13,317 | [1] | |
Net operating loss carryover | 97,926 | 48,735 | [1] | |
Film development basis | 29,018 | 25,105 | [1] | |
Research and development credit | 25,257 | 14,702 | [1] | |
Other | 11,820 | 11,122 | [1] | |
Deferred tax assets | 440,539 | 420,057 | [1] | |
Less: Valuation allowance | -25,265 | -28,749 | [1] | |
Deferred tax assets (net of valuation allowance) | 415,274 | 391,308 | [1] | |
Deferred tax liabilities: | ' | ' | ||
Film basis and other intangible assets (net of amortization) | 179,314 | [3],[4] | 145,077 | [1],[3],[4] |
Other | -14,040 | -8,224 | [1] | |
Deferred tax liabilities | -193,354 | -153,301 | [1] | |
Net deferred tax assets | $221,920 | $238,007 | [1] | |
[1] | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. | |||
[2] | Includes the portion of film inventory amortization expense attributable to stock-based compensation. | |||
[3] | Includes capitalizable stock-based compensation. | |||
[4] | A portion of the deferred tax liability relates to indefinite-lived intangible assets. |
Income_Taxes_Reconciliation_of1
Income Taxes - Reconciliation of Unrecognized Tax Benefits (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' | ' | |
Beginning balance | $22,740 | $18,718 | $7,933 | |
Increases related to prior year tax positions | 717 | 2,493 | 13,733 | |
Decreases related to prior year tax positions | -7,673 | -206 | -5,314 | |
Decreases related to settlements | -2,015 | ' | ' | |
Increases related to current year positions | 1,238 | 1,742 | 2,557 | |
Decreases related to current year positions | -312 | -7 | -191 | |
Ending balance | 14,695 | [1] | 22,740 | 18,718 |
Accrued Income Taxes | ' | ' | ' | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' | ' | |
Beginning balance | 22,053 | 18,118 | 8,470 | |
Increases related to prior year tax positions | 717 | 2,493 | 10,765 | |
Decreases related to prior year tax positions | -7,666 | -197 | -3,358 | |
Decreases related to settlements | -2,015 | ' | ' | |
Increases related to current year positions | 1,138 | 1,646 | 2,432 | |
Decreases related to current year positions | -312 | -7 | -191 | |
Ending balance | 13,915 | [1] | 22,053 | 18,118 |
Portion Relating To Payable To Former Stockholder | ' | ' | ' | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ' | ' | ' | |
Beginning balance | 687 | 600 | -537 | |
Increases related to prior year tax positions | 0 | 0 | 2,968 | |
Decreases related to prior year tax positions | -7 | -9 | -1,956 | |
Decreases related to settlements | 0 | ' | ' | |
Increases related to current year positions | 100 | 96 | 125 | |
Decreases related to current year positions | 0 | 0 | 0 | |
Ending balance | $780 | [1] | $687 | $600 |
[1] | The total amount of unrecognized tax benefits as of DecemberB 31, 2013 that, if realized, would affect the Companybs effective tax rate is |
Income_Taxes_Narrative_Details
Income Taxes - Narrative (Details) (USD $) | 0 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 3 Months Ended | ||||||||||
Jan. 02, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Internal Revenue Service (IRS) | State and Local Jurisdiction | Foreign | Federal Research and Development and Energy Tax Credits | Research and Development | Foreign Tax Credits | Research and Development Credits | Scenario, Change In Estimate | Payable to Former Stockholder | Payable to Former Stockholder | Payable to Former Stockholder | |||||
Internal Revenue Service (IRS) | State and Local Jurisdiction | Internal Revenue Service (IRS) | Settlement with Taxing Authority | Research and Development Credits | |||||||||||
State and Local Jurisdiction | |||||||||||||||
Operating Loss Carryforwards [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage the company is obligated to remit to an affiliate of the former stockholder | ' | 85.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extension of research and development credits and other federal tax incentives, period | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustments to Additional Paid in Capital, Income Tax Deficiency from Share-based Compensation | ' | ' | ($1,748,000) | ($2,901,000) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating loss carryforward | ' | ' | ' | ' | 197,700,000 | 39,400,000 | 137,400,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning expiration date of operating loss carryforwards | ' | ' | ' | ' | 31-Dec-19 | 31-Dec-15 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Beginning expiration date of loss carryforwards | ' | ' | ' | ' | ' | ' | ' | 31-Dec-29 | ' | 31-Dec-19 | ' | ' | ' | ' | ' |
Total tax credits | ' | ' | ' | ' | ' | ' | ' | 15,900,000 | 24,800,000 | 6,600,000 | ' | ' | ' | ' | ' |
Unrecognized tax benefits that would impact effective tax rate | ' | 14,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unrecognized tax benefits, income tax penalties and interest accrued | ' | 1,300,000 | 1,600,000 | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 200,000 | 100,000 |
Recognized tax benefit recorded | ' | ($19,181,000) | $17,215,000 | ($36,372,000) | ' | ' | ' | ' | ' | ' | $1,300,000 | $2,800,000 | ' | ' | ' |
Related_Party_Transactions_Det
Related Party Transactions (Details) (UMG, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
UMG | ' |
Related Party Transaction [Line Items] | ' |
Related party transaction, expenses from transactions with related party, amounts capitalized | $0.30 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Leases (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Commitments and Contingencies Disclosure [Abstract] | ' | ' | ' |
Lease expense | $8,100,000 | $9,200,000 | $7,900,000 |
Operating Leases, Future Minimum Payments Due [Abstract] | ' | ' | ' |
2014 | 10,398,000 | ' | ' |
2015 | 9,091,000 | ' | ' |
2016 | 8,097,000 | ' | ' |
2017 | 8,073,000 | ' | ' |
2018 and thereafter | 28,951,000 | ' | ' |
Total | $64,610,000 | ' | ' |
Commitments_and_Contingencies_2
Commitments and Contingencies - Commitments (Details) (Talent, USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2013 |
Talent | ' |
Unrecorded Unconditional Purchase Obligation [Line Items] | ' |
Unrecorded unconditional purchase obligation, balance payable over next five years | $21 |
Noncancelable talent commitments term | '5 years |
Stockholders_Equity_Details
Stockholders' Equity (Details) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | |||||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2011 | Dec. 31, 2012 | Oct. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
class | Class A Common Stock | Class A Common Stock | Class A Common Stock | Class B Common Stock | Class B Common Stock | Class B Common Stock | ||
vote | vote | |||||||
Class of Stock [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' |
Number of classes of stock | 2 | ' | ' | ' | ' | ' | ' | ' |
Number of shares authorized (in shares) | ' | ' | 350,000,000 | ' | 350,000,000 | ' | 150,000,000 | 150,000,000 |
Common stock, par value per share | ' | ' | $0.01 | ' | $0.01 | ' | $0.01 | $0.01 |
Number of votes per share | ' | ' | 1 | ' | ' | ' | 15 | ' |
Preferred Stock, Shares Authorized | 100,000,000 | ' | ' | ' | ' | ' | ' | ' |
Stock repurchased during period, shares | ' | ' | 1,300,000 | 900,000 | ' | ' | ' | ' |
Stock repurchased during period, value | ' | ' | $25 | $25 | ' | ' | ' | ' |
Stock repurchase program, remaining authorized repurchase amount | ' | 100 | ' | ' | ' | ' | ' | ' |
Value of shares authorized to be repurchased | $150 | ' | ' | ' | ' | ' | ' | ' |
Stock converted (in shares) | ' | ' | ' | ' | ' | 3,000,000 | ' | ' |
Employee_Benefit_Plans_Details
Employee Benefit Plans (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
General Discussion of Pension and Other Postretirement Benefits [Abstract] | ' | ' | ' |
Defined contribution plan, employer matching contribution as a percent of employees contribution | 50.00% | ' | ' |
Defined contribution plan, maximum annual contribution per employee, percent | 4.00% | ' | ' |
Defined contribution plan, cost recognized | $2.80 | $2.40 | $2.10 |
Multi-employer pension plan, funded status (as a percent) | ' | 82.00% | ' |
Multi-employer pension plan, contributions | $2.30 | $2.70 | $2.60 |
StockBased_Compensation_Narrat
Stock-Based Compensation - Narrative (Details) (USD $) | 12 Months Ended | 40 Months Ended | |||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 20, 2011 | Apr. 21, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Reduction in number of awards available, multiplier | ' | ' | ' | 1.6 | ' |
Number of shares authorized | ' | ' | ' | ' | 12,000,000 |
Shares available for future grants of equity awards under the 2008 Omnibus Plan | 10,300,000 | ' | ' | ' | ' |
Stock-based compensation, allocation of recognized period costs, capitalized amount | $17.20 | $18.70 | $18.80 | ' | ' |
Stock-based compensation, nonvested awards, total compensation cost not yet recognized | 82 | ' | ' | ' | ' |
Stock-based compensation, nonvested awards, total compensation cost not yet recognized, period for recognition (in years) | '2 years | ' | ' | ' | ' |
Exercise period after termination of service (in days) | '90 days | ' | ' | ' | ' |
Expiration period (in years) | '10 years | ' | ' | ' | ' |
Weighted average grant-date fair value or options granted (in dollars per share) | ' | ' | $10.28 | ' | ' |
Intrinsic value of options exercised | 2.2 | 0 | ' | ' | ' |
Tax benefit from options exercised during year | 0.8 | ' | ' | ' | ' |
Intrinsic value of options outstanding | 35 | ' | ' | ' | ' |
Intrinsic value of options exercisable | 33.4 | ' | ' | ' | ' |
Weighted-average remaining contractual term of options outstanding and exercisable (in years) | '4 years | ' | ' | ' | ' |
Minimum | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Vesting period (in years) | '4 years | ' | ' | ' | ' |
Maximum | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Vesting period (in years) | '7 years | ' | ' | ' | ' |
Restricted Stock Awards and Units | ' | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' |
Restricted Stock Awards, Aggregate Intrinsic Value, Vested | 33.5 | 26.1 | 18.7 | ' | ' |
Total fair value at grant of restricted stock awards that vested | $29 | $35 | $28.90 | ' | ' |
StockBased_Compensation_Impact
Stock-Based Compensation - Impact of Stock Options and Restricted Stock Awards on Net Income (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Share-based Compensation, Allocation and Classification in Financial Statements [Abstract] | ' | ' | ' | |||
Total stock-based compensation | $18,531 | $17,044 | $28,301 | |||
Tax impact | -4,874 | [1] | -5,999 | [1] | -7,415 | [1] |
Reduction in net income | $13,657 | $11,045 | $20,886 | |||
[1] | Tax impact is determined at the Companybs combined effective tax rate, which includes the income statement line item "(Increase) decrease in income tax benefit payable to former stockholder" (see Note 13). |
StockBased_Compensation_Restri
Stock-Based Compensation - Restricted Stock Activity (Details) (Restricted Stock Awards and Units, USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Restricted Stock Awards and Units | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested [Roll Forward] | ' | ' | ' |
Equity instrument other than options, beginning of period | 5,121 | 4,346 | 3,662 |
Weighted average grant date fair value, beginning of period (in dollars per share) | $22.90 | $25.69 | $29.84 |
Equity instruments other than options, grants in period | 1,602 | 2,638 | 2,043 |
Equity instruments other than options, grants in period, weighted average grant date fair value (in dollars per share) | $28.19 | $20.17 | $21.21 |
Equity instruments other than options, vested in period | -1,199 | -1,346 | -949 |
Equity instruments other than options, vested in period, weighted average grant date fair value (in dollars per share) | $24.16 | $25.99 | $30.40 |
Equity instruments other than options, forfeited in period | -342 | -517 | -410 |
Equity instruments other than options, forfeited in period, weighted average grant date fair value (in dollars per share) | $22.74 | $24.40 | $29.54 |
Equity instrument other than options, end of period | 5,182 | 5,121 | 4,346 |
Weighted average grant date fair value, end of period (in dollars per share) | $24.26 | $22.90 | $25.69 |
StockBased_Compensation_Year_o
Stock-Based Compensation - Year of Grant Table (Details) (Restricted Stock Awards and Units) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | |
In Thousands, unless otherwise specified | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | |
Equity instruments other than options | 5,182 | 5,121 | 4,346 | 3,662 | |
Performance Based Vesting Criteria | ' | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | |
Equity instruments other than options | 2,019 | [1] | ' | ' | ' |
Restricted Stock Awards and Units Granted in 2013 | Performance Based Vesting Criteria | ' | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | |
Equity instruments other than options | 623 | [1] | ' | ' | ' |
Restricted Stock Awards and Units Granted in 2012 | Performance Based Vesting Criteria | ' | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | |
Equity instruments other than options | 665 | [1] | ' | ' | ' |
Restricted Stock Awards and Units Granted in 2011 | Performance Based Vesting Criteria | ' | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | |
Equity instruments other than options | 455 | [1] | ' | ' | ' |
Restricted Stock Awards and Units Granted in 2010 | Performance Based Vesting Criteria | ' | ' | ' | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | |
Equity instruments other than options | 276 | [1] | ' | ' | ' |
[1] | The performance-based awards have been included herein based on the maximum number of shares that may vest. |
StockBased_Compensation_Valuat
Stock-Based Compensation - Valuation Assumptions (Details) (Employee Stock Options and Stock Appreciation Rights) | 12 Months Ended | |
Dec. 31, 2011 | ||
Employee Stock Options and Stock Appreciation Rights | ' | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | |
Dividend yield | 0.00% | [1] |
Expected volatility, minimum | 33.00% | [1] |
Expected volatility, maximum | 39.00% | [1] |
Risk-free interest rate, minimum | 1.17% | [1] |
Risk-free interest rate, maximum | 2.60% | [1] |
Weighted average expected term (in years) | '6 years 3 months | [1] |
[1] | Effective in 2012, stock options and stock appreciation rights are no longer being granted by the Company. |
StockBased_Compensation_Stock_
Stock-Based Compensation - Stock Options and Stock Appreciation Rights (Details) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award, Options and SARs [Roll Forward] | ' | ' | ' |
Outstanding at beginning of period | 6,919 | 7,945 | 7,813 |
Options granted | 0 | 0 | 315 |
Options exercised | -496 | 0 | -1 |
Options expired/canceled | -609 | -1,026 | -182 |
Balance at end of year | 5,814 | 6,919 | 7,945 |
Weighted average exercise price per share, outstanding at beginning of period (in dollars per share) | $29.54 | $29.04 | $29.21 |
Options granted, weighted average exercise price per share (in dollars per share) | $0 | $0 | $26.56 |
Options exercised, weighted average exercise price per share (in dollars per share) | $28.29 | $0 | $22.51 |
Options expired/canceled, weighted average exercise price per share (in dollars per share) | $30.66 | $25.66 | $31.86 |
Weighted average exercise price per share, outstanding at end of period (in dollars per share) | $29.53 | $29.54 | $29.04 |
StockBased_Compensation_Stock_1
Stock-Based Compensation - Stock Options by Exercise Price Range (Details) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Options outstanding, number outstanding | 5,814 |
Options outstanding, weighted average remaining contractual life (in years) | '4 years 2 months 23 days |
Options outstanding, weighted average exercise price per share (in dollars per share) | $29.53 |
Options exercisable, number exercisable | 5,431 |
Options exercisable, weighted average exercise price per share (in dollars per share) | $29.40 |
Weighted-average remaining contractual term of options outstanding and exercisable (in years) | '4 years |
$19.29 - $26.92 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Low exercise price (in dollars per share) | $19.29 |
High exercise price (in dollars per share) | $26.92 |
Options outstanding, number outstanding | 1,252 |
Options outstanding, weighted average remaining contractual life (in years) | '5 years 4 months 10 days |
Options outstanding, weighted average exercise price per share (in dollars per share) | $24.80 |
Options exercisable, number exercisable | 1,097 |
Options exercisable, weighted average exercise price per share (in dollars per share) | $24.57 |
$27.06 - $28.00 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Low exercise price (in dollars per share) | $27.06 |
High exercise price (in dollars per share) | $28 |
Options outstanding, number outstanding | 949 |
Options outstanding, weighted average remaining contractual life (in years) | '0 years 10 months 13 days |
Options outstanding, weighted average exercise price per share (in dollars per share) | $27.96 |
Options exercisable, number exercisable | 949 |
Options exercisable, weighted average exercise price per share (in dollars per share) | $27.96 |
$28.10 - $32.31 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Low exercise price (in dollars per share) | $28.10 |
High exercise price (in dollars per share) | $32.31 |
Options outstanding, number outstanding | 2,656 |
Options outstanding, weighted average remaining contractual life (in years) | '4 years 3 months |
Options outstanding, weighted average exercise price per share (in dollars per share) | $30.18 |
Options exercisable, number exercisable | 2,630 |
Options exercisable, weighted average exercise price per share (in dollars per share) | $30.19 |
$32.86 - $37.51 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Low exercise price (in dollars per share) | $32.86 |
High exercise price (in dollars per share) | $37.51 |
Options outstanding, number outstanding | 920 |
Options outstanding, weighted average remaining contractual life (in years) | '6 years 0 months 4 days |
Options outstanding, weighted average exercise price per share (in dollars per share) | $35.27 |
Options exercisable, number exercisable | 727 |
Options exercisable, weighted average exercise price per share (in dollars per share) | $35.26 |
$37.58 - $39.71 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Low exercise price (in dollars per share) | $37.58 |
High exercise price (in dollars per share) | $39.71 |
Options outstanding, number outstanding | 25 |
Options outstanding, weighted average remaining contractual life (in years) | '6 years 3 months 11 days |
Options outstanding, weighted average exercise price per share (in dollars per share) | $39.69 |
Options exercisable, number exercisable | 19 |
Options exercisable, weighted average exercise price per share (in dollars per share) | $39.69 |
$43.46 - $43.46 | ' |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | ' |
Low exercise price (in dollars per share) | $43.46 |
High exercise price (in dollars per share) | $43.46 |
Options outstanding, number outstanding | 12 |
Options outstanding, weighted average remaining contractual life (in years) | '6 years 1 month 6 days |
Options outstanding, weighted average exercise price per share (in dollars per share) | $43.46 |
Options exercisable, number exercisable | 9 |
Options exercisable, weighted average exercise price per share (in dollars per share) | $43.46 |
Concentrations_of_Risk_Feature
Concentrations of Risk - Featured Films (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | $204,283 | $154,549 | $213,436 | $134,648 | $264,657 | $186,298 | $162,803 | $136,084 | $706,916 | $749,842 | $706,023 | |||
Turbo | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 13,790 | [1] | 0 | [1] | 0 | [1] |
The Croods | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 140,345 | 0 | 0 | |||
Rise of the Guardians | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 77,348 | [2] | 6,096 | [2] | 0 | [2] |
Madagascar 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 95,152 | 197,157 | 0 | |||
Puss in Boots | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 24,638 | 151,670 | 23,752 | |||
Kung Fu Panda 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 35,250 | 74,285 | 144,815 | |||
Megamind | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 25,296 | 10,776 | 82,975 | |||
Shrek Forever After | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 16,652 | 36,437 | 78,596 | |||
How to Train Your Dragon | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 16,888 | 37,327 | 66,904 | |||
Library | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 80,915 | [3] | 94,415 | [3] | 187,912 | [3] |
All Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Unusual Risk or Uncertainty [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | $180,642 | [4] | $141,679 | [4] | $121,069 | [4] |
[1] | Turbo was released during the three months ended September 30, 2013. Pursuant to the terms of the Fox Distribution Agreement, because the distribution and marketing expenses incurred by Fox in the year of the filmbs release exceeded that filmbs gross revenues for such year, no revenue was reported to the Company directly from Fox with respect to that film in its year of release. Revenues recognized during the year ended DecemberB 31, 2013 were primarily attributable to the Chinese and South Korean theatrical markets, which are territories that are not distributed by Fox. | |||||||||||||
[2] | Rise of the Guardians was released during the three months ended DecemberB 31, 2012. Pursuant to the terms of the Paramount Agreements, because the distribution and marketing expenses incurred by Paramount in the year of the filmbs release exceeded that filmbs gross revenues for such year, no revenue was reported to the Company directly from Paramount with respect to that film in its year of release. Revenues recognized during the year ended DecemberB 31, 2012 were primarily attributable to the Companybs licensing arrangements. | |||||||||||||
[3] | Library, in each respective year, includes feature film titles not separately listed. | |||||||||||||
[4] | For each period shown, "All other" consists of revenues not attributable to a specific feature film title. Examples of sources of revenue included in "All other" are those generated from multi-property licenses of the Company's characters (such as for use at theme parks, hotels or cruise ships), television series/specials, direct-to-video product, licensing of Classic Media properties, live performances and ATV. |
Concentrations_of_Risk_Details
Concentrations of Risk (Details) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Unionized Employees Concentration Risk | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of employees represented under bargaining agreements | 34.00% | ' | ' |
Number of agreements to which the company Is a party | 3 | ' | ' |
Paramount | Sales Revenue, Goods, Net | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Revenue derived directly from third party distributor | 49.10% | 76.10% | 77.20% |
Fox | Sales Revenue, Goods, Net | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Revenue derived directly from third party distributor | 19.00% | ' | ' |
Segment_and_Geographic_Informa2
Segment and Geographic Information - (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||||
segment | ||||||||||||||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Number of reportable segments | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' | |||||
Revenues | $204,283 | $154,549 | $213,436 | $134,648 | $264,657 | $186,298 | $162,803 | $136,084 | $706,916 | $749,842 | $706,023 | |||||
Gross profit (loss) | 64,974 | [1] | 62,852 | 80,160 | 49,127 | -89,307 | [1] | 72,337 | 48,556 | 39,584 | 257,113 | [2] | 71,170 | [2] | 225,276 | [2] |
Feature Films [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 500,208 | 582,759 | 551,441 | |||||
Gross profit (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 203,362 | [2] | 68,739 | [2] | 214,783 | [2] | ||
Television Series and Specials [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 105,950 | 75,365 | 73,955 | |||||
Gross profit (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 23,119 | [2] | 12,221 | [2] | 9,256 | [2] | ||
Consumer Products [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 67,256 | 48,674 | 43,094 | |||||
Gross profit (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 28,323 | [2] | 17,270 | [2] | 9,979 | [2] | ||
All Other Segments [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 33,502 | 43,044 | 37,533 | |||||
Gross profit (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 2,309 | [2],[3] | -27,060 | [2],[3] | -8,742 | [2],[3] | ||
Foreign Countries [Member] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | $383,800 | $392,200 | $356,900 | |||||
[1] | During the quarters ended DecemberB 31, 2013 and 2012, the Company recorded impairment charges and write-downs of film and other inventory costs totaling $20.2 million and $157.2 million, respectively (See Note 6). | |||||||||||||||
[2] | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit as presented on the consolidated statements of operations, which includes a reconciliation to consolidated income (loss) before income taxes. | |||||||||||||||
[3] | During the years ended December 31, 2012 and 2011, All Other consisted primarily of the Company's live performance productions, which are no longer of significance. |
Segment_and_Geographic_Informa3
Segment and Geographic Information Schedule of goodwill by segment (Details) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2012 | Aug. 29, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | 3-May-13 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | Feature Films [Member] | Feature Films [Member] | Feature Films [Member] | Television Series and Specials [Member] | Television Series and Specials [Member] | Television Series and Specials [Member] | Consumer Products [Member] | Consumer Products [Member] | Consumer Products [Member] | Other Segments [Member] | Other Segments [Member] | Other Segments [Member] | Classic Media | Classic Media | Classic Media | Classic Media | Classic Media | Classic Media | Classic Media | Classic Media | Classic Media | Classic Media | Classic Media | AwesomenessTV, Inc. | AwesomenessTV, Inc. | AwesomenessTV, Inc. | AwesomenessTV, Inc. | AwesomenessTV, Inc. | AwesomenessTV, Inc. | |||||
Feature Films [Member] | Feature Films [Member] | Television Series and Specials [Member] | Television Series and Specials [Member] | Consumer Products [Member] | Consumer Products [Member] | Other Segments [Member] | Other Segments [Member] | Feature Films [Member] | Television Series and Specials [Member] | Consumer Products [Member] | Other Segments [Member] | |||||||||||||||||||||||
Goodwill [Roll Forward] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Goodwill, Beginning of Period | $179,722 | $71,406 | $34,216 | $43,995 | $51,412 | $24,635 | $6,111 | $7,141 | $3,422 | $10,999 | $12,853 | $6,159 | $118,617 | $0 | $0 | ' | ' | $26,889 | [1],[2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | $118,617 | [3],[4] | ' | ' | ' | ' |
Acquisition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 37,190 | ' | ' | 26,777 | ' | 3,719 | ' | 6,694 | ' | 0 | 118,617 | ' | 0 | 0 | 0 | 118,617 | ||
Measurement period adjustments related to the acquisition of Classic Media | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -10,301 | ' | ' | -7,417 | ' | -1,030 | ' | -1,854 | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ||
Goodwill, End of Period | $179,722 | $71,406 | $34,216 | $43,995 | $51,412 | $24,635 | $6,111 | $7,141 | $3,422 | $10,999 | $12,853 | $6,159 | $118,617 | $0 | $0 | ' | ' | $26,889 | [1],[2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | $118,617 | [3],[4] | ' | ' | ' | ' |
[1] | The goodwill resulting from the acquisition of Classic Media is not deductible for tax purposes. | |||||||||||||||||||||||||||||||||
[2] | Measurement period adjustments included a decrease to trade receivables assumed of $0.3 million, a decrease to accrued liabilities assumed of $1.8 million, a decrease to deferred tax liabilities of $8.4 million and other adjustments that were not material, resulting in a decrease of $10.0 million to goodwill. | |||||||||||||||||||||||||||||||||
[3] | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. | |||||||||||||||||||||||||||||||||
[4] | Measurement period adjustments include a $0.5 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration. |
Earnings_Per_Share_Data_Comput
Earnings Per Share Data - Computation of Basic and Diluted Net Income Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Earnings Per Share, Basic and Diluted [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Net income (loss) attributable to Dreamworks Animation SKG, Inc. | $17,190 | [1] | $10,064 | $22,253 | $5,577 | ($82,708) | [1] | $24,440 | $12,772 | $9,074 | $55,084 | ($36,422) | $86,801 |
Weighted average common shares outstanding (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 84,104 | 84,338 | 83,769 | ||
Less: Unvested restricted stock (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | -110 | -110 | -102 | ||
Denominator for basic calculation (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 83,994 | 84,228 | 83,667 | ||
Denominator for diluted calculation (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 85,293 | 84,228 | 84,772 | ||
Net (loss) income per sharebbasic (in dollars per share) | $0.20 | $0.12 | $0.27 | $0.07 | ($0.98) | $0.29 | $0.15 | $0.11 | $0.66 | ($0.43) | $1.04 | ||
Net (loss) income per sharebdiluted (in dollars per share) | $0.20 | $0.12 | $0.26 | $0.07 | ($0.98) | $0.29 | $0.15 | $0.11 | $0.65 | ($0.43) | $1.02 | ||
Employee Stock Options and Stock Appreciation Rights | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Earnings Per Share, Basic and Diluted [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Weighted average effects of dilutive stock-based compensation awards (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 87 | 0 | 2 | ||
Restricted Stock Awards and Units | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Earnings Per Share, Basic and Diluted [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||
Weighted average effects of dilutive stock-based compensation awards (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 1,212 | 0 | 1,103 | ||
[1] | During the quarters ended DecemberB 31, 2013 and 2012, the Company recorded impairment charges and write-downs of film and other inventory costs totaling $20.2 million and $157.2 million, respectively (See Note 6). |
Earnings_Per_Share_Data_Antidi
Earnings Per Share Data - Antidilutive Securities (Details) (Outstanding Stock Awards) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |
Antidilutive securities | 5,774 | 8,283 | [1] | 8,027 |
Options to Purchase Shares of Common Stock and Restricted Stock Awards | ' | ' | ' | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |
Antidilutive securities | 1,744 | 3,084 | [1] | 2,531 |
Stock Appreciation Rights | ' | ' | ' | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | |
Antidilutive securities | 4,030 | 5,199 | [1] | 5,496 |
[1] | Due to the Company's loss for the year ended December 31, 2012, all potential common stock equivalents are anti-dilutive. |
Earnings_Per_Share_Data_Contin
Earnings Per Share Data - Contingently Issuable Equity Awards (Details) (Contingently Issuable Shares) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Contingently Issuable Equity Awards Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Contingently issuable equity awards | 763 | 701 | 1,616 |
Options to Purchase Shares of Common Stock and Restricted Stock Awards | ' | ' | ' |
Contingently Issuable Equity Awards Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Contingently issuable equity awards | 763 | 701 | 816 |
Stock Appreciation Rights | ' | ' | ' |
Contingently Issuable Equity Awards Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' |
Contingently issuable equity awards | 0 | 0 | 800 |
Quarterly_Financial_Informatio2
Quarterly Financial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||
Quarterly Financial Information Disclosure [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |||||
Revenues | $204,283,000 | $154,549,000 | $213,436,000 | $134,648,000 | $264,657,000 | $186,298,000 | $162,803,000 | $136,084,000 | $706,916,000 | $749,842,000 | $706,023,000 | |||||
Gross profit (loss) | 64,974,000 | [1] | 62,852,000 | 80,160,000 | 49,127,000 | -89,307,000 | [1] | 72,337,000 | 48,556,000 | 39,584,000 | 257,113,000 | [2] | 71,170,000 | [2] | 225,276,000 | [2] |
Income (loss) before income taxes | 19,008,000 | 16,998,000 | 32,366,000 | 6,532,000 | -125,135,000 | 38,695,000 | 18,625,000 | 14,178,000 | 74,904,000 | -53,637,000 | 123,173,000 | |||||
Net income (loss) | 17,282,000 | [1] | 10,079,000 | 22,248,000 | 6,114,000 | -82,708,000 | [1] | 24,440,000 | 12,772,000 | 9,074,000 | 55,723,000 | -36,422,000 | 86,801,000 | |||
Net income (loss) attributable to Dreamworks Animation SKG, Inc. | 17,190,000 | [1] | 10,064,000 | 22,253,000 | 5,577,000 | -82,708,000 | [1] | 24,440,000 | 12,772,000 | 9,074,000 | 55,084,000 | -36,422,000 | 86,801,000 | |||
Basic net income (loss) per share | $0.20 | $0.12 | $0.27 | $0.07 | ($0.98) | $0.29 | $0.15 | $0.11 | $0.66 | ($0.43) | $1.04 | |||||
Diluted net income (loss) per share | $0.20 | $0.12 | $0.26 | $0.07 | ($0.98) | $0.29 | $0.15 | $0.11 | $0.65 | ($0.43) | $1.02 | |||||
Impairment charges of film costs | ' | ' | ' | ' | ' | ' | ' | ' | 20,200,000 | 89,300,000 | 0 | |||||
Write down of film costs | ' | ' | ' | ' | $157,200,000 | ' | ' | ' | ' | ' | ' | |||||
[1] | During the quarters ended DecemberB 31, 2013 and 2012, the Company recorded impairment charges and write-downs of film and other inventory costs totaling $20.2 million and $157.2 million, respectively (See Note 6). | |||||||||||||||
[2] | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit as presented on the consolidated statements of operations, which includes a reconciliation to consolidated income (loss) before income taxes. |
Valuation_and_Qualifying_Accou2
Valuation and Qualifying Accounts and Reserves (Details) (USD $) | 12 Months Ended | |||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |||
Allowance for doubtful accounts | ' | ' | ' | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | |||
Balance at beginning of year | $2,581 | $2,518 | $3,003 | |||
Charged to operations | 3,465 | [1] | 63 | [1] | 831 | [1] |
Deductions | 0 | [2] | 0 | [2] | -1,316 | [2] |
Balance at end of year | 6,046 | 2,581 | 2,518 | |||
Sales returns reserves | ' | ' | ' | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | |||
Balance at beginning of year | 13,064 | 0 | ' | |||
Charged to other accounts | 31,797 | [1] | 13,896 | [1] | ' | |
Deductions | -21,559 | [2] | -832 | [2] | ' | |
Balance at end of year | 23,302 | 13,064 | ' | |||
Valuation allowance | ' | ' | ' | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | ' | ' | ' | |||
Balance at beginning of year | 28,749 | [3] | 2,142 | [3] | 2,055 | |
Charged to operations | -142 | 1,659 | [3] | 2,142 | ||
Charged to other accounts | -3,342 | 24,948 | [3] | -2,055 | ||
Balance at end of year | $25,265 | $28,749 | [3] | $2,142 | [3] | |
[1] | Sales returns reserves are charged against revenues and are related to the distribution of non-theatrical content and direct-to-video product. The Company did not have such activity (which also now includes activity related to DreamWorks Animation properties) prior to the acquisition of Classic Media on August 29, 2012. | |||||
[2] | For Allowance for doubtful accounts, represents reductions to the allowance for bad debt write-offs. For Sales returns reserves, represents reductions to the reserve for actual returns. | |||||
[3] | The increase in the valuation allowance was primarily related to foreign deferred tax assets assumed in connection with the Classic Media acquisition. |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | 12 Months Ended | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2013 |
employee | Employee Severance [Member] | ||
employee | |||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' |
Non-retirement postemployment benefit charges | $4.60 | ' | ' |
Non-retirement postemployment benefit, employees | 178 | ' | ' |
Restructuring charges | ' | ' | 5.7 |
Restructuring charges, employees affected | ' | ' | 106 |
Payments made for restructuring charges | ' | ' | 8.5 |
Restructuring reserve, remaining accrual | ' | $1.70 | ' |