Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | ||
Jun. 30, 2014 | Jul. 17, 2014 | Jul. 17, 2014 | |
Common Class A [Member] | Common Class B [Member] | ||
Document Type | '10-Q | ' | ' |
Amendment Flag | 'false | ' | ' |
Document Period End Date | 30-Jun-14 | ' | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'Q2 | ' | ' |
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 | ' | 76,831,503 | 7,838,731 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ' | ' |
Cash and cash equivalents | $32,196 | $95,467 |
Trade accounts receivable, net of allowance for doubtful accounts (see Note 7 for related party amounts) | 146,991 | 130,744 |
Receivables from distributors, net of allowance for doubtful accounts (see Note 7 for related party amounts) | 212,669 | 283,226 |
Film and other inventory costs, net | 979,919 | 943,486 |
Prepaid expenses | 22,133 | 20,555 |
Other assets | 31,940 | 23,385 |
Investments in unconsolidated entities | 49,300 | 38,542 |
Property, plant and equipment, net of accumulated depreciation and amortization | 184,200 | 186,670 |
Deferred taxes, net | 250,265 | 221,920 |
Intangible assets, net of accumulated amortization | 197,438 | 150,511 |
Goodwill | 189,667 | 179,722 |
Total assets | 2,296,718 | 2,274,228 |
Liabilities: | ' | ' |
Accounts payable | 4,899 | 5,807 |
Accrued liabilities | 232,317 | 263,668 |
Payable to former stockholder | 261,694 | 262,309 |
Deferred revenue and other advances | 35,082 | 36,425 |
Revolving credit facility | 100,000 | 0 |
Senior unsecured notes | 300,000 | 300,000 |
Total liabilities | 933,992 | 868,209 |
Commitments and contingencies (Note 17) | ' | ' |
DreamWorks Animation SKG, Inc. Stockholders' Equity: | ' | ' |
Additional paid-in capital | 1,116,412 | 1,100,101 |
Accumulated other comprehensive income (loss) | 95 | -600 |
Retained earnings | 1,014,075 | 1,072,398 |
Less: Class A Treasury common stock, at cost, 27,503,479 and 27,439,119 shares, as of June 30, 2014 and December 31, 2013, respectively | -770,037 | -768,224 |
Total DreamWorks Animation SKG, Inc. stockholders' equity | 1,361,666 | 1,404,795 |
Non-controlling interests | 1,060 | 1,224 |
Total equity | 1,362,726 | 1,406,019 |
Total liabilities and equity | 2,296,718 | 2,274,228 |
Common Class A [Member] | ' | ' |
DreamWorks Animation SKG, Inc. Stockholders' Equity: | ' | ' |
Common stock | 1,043 | 1,042 |
Common Class B [Member] | ' | ' |
DreamWorks Animation SKG, Inc. Stockholders' Equity: | ' | ' |
Common stock | $78 | $78 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 |
Common Class A [Member] | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 350,000,000 | 350,000,000 |
Common stock, shares issued | 104,334,982 | 104,155,993 |
Class A Treasury common stock, shares | 27,503,479 | 27,439,119 |
Common Class B [Member] | ' | ' |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 7,838,731 | 7,838,731 |
Common stock, shares outstanding | 7,838,731 | 7,838,731 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Income Statement [Abstract] | ' | ' | ' | ' | ||||
Revenues (see Note 7 for related party amounts) | $122,277 | $213,436 | $269,518 | $348,084 | ||||
Costs of revenues | 87,532 | 133,276 | 248,221 | 218,797 | ||||
Gross profit | 34,745 | [1] | 80,160 | [1] | 21,297 | [1] | 129,287 | [1] |
Product development | 611 | 1,069 | 1,151 | 2,032 | ||||
Selling, general and administrative expenses | 54,595 | 49,711 | 101,774 | 92,500 | ||||
Change in fair value of contingent consideration | -7,220 | 0 | -4,720 | 0 | ||||
Other operating income (see Note 7 for related party amounts) | -2,317 | -2,859 | -3,989 | -2,859 | ||||
Operating (loss) income | -10,924 | 32,239 | -72,919 | 37,614 | ||||
Non-operating income (expense): | ' | ' | ' | ' | ||||
Interest (expense) income, net | -2,484 | 777 | -4,257 | 1,640 | ||||
Other income, net | 1,853 | 1,050 | 3,071 | 2,042 | ||||
Decrease (increase) in income tax benefit payable to former stockholder | 1,695 | -371 | 2,622 | -1,069 | ||||
(Loss) income before loss from equity method investees and income taxes | -9,860 | 33,695 | -71,483 | 40,227 | ||||
Loss from equity method investees | 3,467 | 1,329 | 6,727 | 1,329 | ||||
(Loss) income before income taxes | -13,327 | 32,366 | -78,210 | 38,898 | ||||
Provision (benefit) for income taxes | 2,601 | 10,118 | -19,866 | 10,536 | ||||
Net (loss) income | -15,928 | 22,248 | -58,344 | 28,362 | ||||
Less: Net (loss) income attributable to non-controlling interests | -541 | -5 | -21 | 532 | ||||
Net (loss) income attributable to DreamWorks Animation SKG, Inc. | ($15,387) | $22,253 | ($58,323) | $27,830 | ||||
Net (loss) income per share of common stock attributable to DreamWorks Animation SKG, Inc. | ' | ' | ' | ' | ||||
Basic net (loss) income per share (in dollars per share) | ($0.18) | $0.27 | ($0.69) | $0.33 | ||||
Diluted net (loss) income per share (in dollars per share) | ($0.18) | $0.26 | ($0.69) | $0.33 | ||||
Shares used in computing net (loss) income per share | ' | ' | ' | ' | ||||
Basic (in shares) | 84,554 | 83,524 | 84,520 | 84,094 | ||||
Diluted (in shares) | 84,554 | 84,533 | 84,520 | 84,898 | ||||
[1] | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive (Loss) Income (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net (loss) income | ($15,928) | $22,248 | ($58,344) | $28,362 |
Other comprehensive (loss) income, net of tax: | ' | ' | ' | ' |
Foreign currency translation gains (losses) | 563 | -104 | 695 | -2,596 |
Comprehensive (loss) income | -15,365 | 22,144 | -57,649 | 25,766 |
Less: Comprehensive (loss) income attributable to non-controlling interests | -541 | -5 | -21 | 532 |
Comprehensive (loss) income attributable to DreamWorks Animation SKG, Inc. | ($14,824) | $22,149 | ($57,628) | $25,234 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 6 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | ||
Operating activities | ' | ' | ||
Net (loss) income | ($58,344) | $28,362 | ||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ' | ' | ||
Amortization and write-off of film and other inventory costs | 206,493 | [1] | 178,023 | [1] |
Amortization of intangible assets | 6,436 | 4,408 | ||
Stock-based compensation expense | 8,421 | 9,837 | ||
Amortization of deferred financing costs | 550 | 0 | ||
Depreciation and amortization | 2,249 | 2,351 | ||
Change in fair value of contingent consideration | -4,720 | 0 | ||
Revenue earned against deferred revenue and other advances | -32,584 | -39,061 | ||
Income related to investment contributions | -3,989 | -10,700 | ||
Loss from equity method investees | 6,727 | 1,329 | ||
Deferred taxes, net | -26,590 | 9,576 | ||
Changes in operating assets and liabilities, net of the effects of acquisitions: | ' | ' | ||
Trade accounts receivable | -15,691 | 7,208 | ||
Receivables from distributors | 70,315 | -18,933 | ||
Film and other inventory costs | -236,376 | -210,984 | ||
Intangible assets | 0 | 1,015 | ||
Prepaid expenses and other assets | -14,312 | -8,537 | ||
Accounts payable and accrued liabilities | -38,113 | 3,694 | ||
Payable to former stockholder | -615 | -14,929 | ||
Income taxes payable/receivable, net | 7,353 | 2,212 | ||
Deferred revenue and other advances | 56,355 | 74,825 | ||
Net cash (used in) provided by operating activities | -66,435 | 19,696 | ||
Investing activities | ' | ' | ||
Investments in unconsolidated entities | -13,365 | -14,720 | ||
Purchases of property, plant and equipment | -17,653 | -14,858 | ||
Acquisitions of character and distribution rights | -51,000 | 0 | ||
Acquisitions, net of cash acquired | -12,605 | -30,093 | ||
Net cash used in investing activities | -94,623 | -59,671 | ||
Financing activities | ' | ' | ||
Proceeds from stock option exercises | 261 | 0 | ||
Purchase of treasury stock | -1,956 | -25,854 | ||
Borrowings from revolving credit facility | 110,000 | 45,000 | ||
Repayments of borrowings from revolving credit facility | -10,000 | -10,000 | ||
Net cash provided by financing activities | 98,305 | 9,146 | ||
Effect of exchange rate changes on cash and cash equivalents | -518 | 428 | ||
Decrease in cash and cash equivalents | -63,271 | -30,401 | ||
Cash and cash equivalents at beginning of period | 95,467 | 59,246 | ||
Cash and cash equivalents at end of period | 32,196 | 28,845 | ||
Non-cash investing activities: | ' | ' | ||
Contingent consideration portion of business acquisition purchase price | 0 | 95,000 | ||
Intellectual property and technology licenses granted in exchange for equity interest | 3,395 | 10,129 | ||
Services provided in exchange for equity interest | 600 | 571 | ||
Total non-cash investing activities | 3,995 | 105,700 | ||
Supplemental disclosure of cash flow information: | ' | ' | ||
Cash refunded during the period for income taxes, net | 608 | 1,529 | ||
Cash paid during the period for interest, net of amounts capitalized | 5,273 | 690 | ||
Depreciation and amortization, interest expense and stock-based compensation previously capitalized | $14,066 | $17,378 | ||
[1] | Included within this amount is depreciation and amortization, interest expense and stock-based compensation previously capitalized to "Film and other inventory costs" (see Note 1). During the six months ended June 30, 2014 and 2013, these amounts totaled $14,066 and $17,378, respectively. |
Business_and_Basis_of_Presenta
Business and Basis of Presentation | 6 Months Ended | |
Jun. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Business and Basis of Presentation | ' | |
Business and Basis of Presentation | ||
Business | ||
The businesses of DreamWorks Animation SKG, Inc. ("DreamWorks Animation" or the "Company") is primarily devoted to the development, production and exploitation of animated films and their associated characters in the worldwide theatrical, home entertainment, digital, television, merchandising and licensing and other markets. The Company continues to build upon the value of its intellectual property created from its animated films by creating high-quality entertainment through the development and production of non-theatrical content such as television series and specials and live performances based on characters from its feature films. In addition, the Company has an extensive library of other intellectual property rights through its acquisition of Classic Media, which can be exploited in various markets. The Company's activities also include technology initiatives as it explores opportunities to exploit its internally developed software. | ||
Distribution and Servicing Arrangements | ||
The Company derives revenue from Twentieth Century Fox Film Corporation's worldwide (excluding China and South Korea) exploitation of its films in the theatrical and post-theatrical markets. Pursuant to a binding term sheet (the "Fox Distribution Agreement") entered into with Twentieth Century Fox and Twentieth Century Fox Home Entertainment, LLC (collectively, "Fox"), the Company has agreed to license Fox certain exclusive distribution rights and exclusively engage Fox to render fulfillment services with respect to certain of the Company's animated feature films and other audiovisual programs during the five-year period beginning on January 1, 2013. The rights licensed to, and serviced by, Fox will terminate on the date that is one year after the initial home video release date in the United States ("U.S.") of the last film theatrically released by Fox during such five-year period. | ||
Also beginning in 2013, the Company's films are distributed in China and South Korea territories by distinct distributors. The key terms of the Company's distribution arrangements with its Chinese and South Korean distributors are largely similar to those with Fox and Paramount such that the Company also recognizes revenues earned under these arrangements on a net basis. The Company's distribution partner in China is Oriental DreamWorks Holding Limited ("ODW"), which is a related party. | ||
Lastly, the Company has continued to derive revenues from the distribution in worldwide theatrical, home entertainment, digital and television markets by Paramount Pictures Corporation, a subsidiary of Viacom Inc., and its affiliates (collectively, "Paramount"), for films that were released on or before December 31, 2012, pursuant to a distribution agreement and a fulfillment services agreement (collectively, the "Paramount Agreements"). With respect to each film for which Paramount has rendered fulfillment services, Paramount generally has had the right to continue rendering such services for 16 years from such film's initial general theatrical release. On June 30, 2014, the Company reacquired certain distribution rights from Paramount and, as a result, Paramount only retains television distribution rights (which includes subscription and free video-on-demand formats) for titles covered by the Paramount Agreements. The reacquired rights are now subject to the Fox Distribution Agreement. The amount paid to reacquire these rights was recorded as a definite-lived intangible asset (see Note 6). | ||
The Company generally retains all other rights to exploit its films, including commercial tie-in and promotional rights with respect to each film, as well as merchandising, interactive, literary publishing, music publishing and soundtrack rights. The Company's activities associated with its Classic Media properties and AwesomenessTV, Inc. ("ATV") business are not subject to the Company's distribution agreements with its theatrical distributors. | ||
Basis of Presentation | ||
The accompanying unaudited financial data as of June 30, 2014 and for the three and six months ended June 30, 2014 and 2013 has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC") and in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, certain information and footnote disclosures normally included in comprehensive financial statements have been condensed or omitted pursuant to such rules and regulations. The consolidated balance sheet as of December 31, 2013 was derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 (the "2013 Form 10-K"). Certain amounts in the prior period consolidated financial statements have been reclassified to conform to the Company's 2014 presentation. | ||
The accompanying unaudited consolidated financial statements reflect all adjustments, consisting of only normal recurring items, which in the opinion of management, are necessary for a fair statement for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for the full year, or for any future period, as fluctuations can occur based upon the timing of the Company's films' theatrical and home entertainment releases, and television series and specials broadcasts. | ||
Consolidation | ||
The consolidated financial statements of the Company present the financial position, results of operations and cash flows of DreamWorks Animation and its wholly-owned subsidiaries. The Company also consolidates less-than-wholly owned entities if the Company has a controlling financial interest in that entity. The Company uses the equity method of accounting for investments in companies in which it has a 50% or less ownership interest and has the ability to exercise significant influence. Such investments are presented as investments in unconsolidated entities on the Company's consolidated balance sheets (refer to Note 7 for further information of such investments). Prior to recording its share of net income or losses from equity method investees, investee financial statements are converted to U.S. GAAP. All significant intercompany accounts and transactions have been eliminated. Intra-entity profit related to transactions with equity method investees is eliminated until the amounts are ultimately realized. | ||
In addition, the Company reviews its relationships with other entities to identify whether they are variable interest entities ("VIE") as defined by the Financial Accounting Standards Board ("FASB"), and to assess whether the Company is the primary beneficiary of such entity. If the determination is made that the Company is the primary beneficiary, then the entity is consolidated. As of June 30, 2014, the Company determined that it continued to have a variable interest in ODW as ODW does not have sufficient equity at risk (i.e., cash on hand to fund its operations) as a result of the timing of capital contributions to the entity in accordance with the Transaction and Contribution Agreement (see Note 7). However, the Company concluded that it is not the primary beneficiary of ODW as it does not have the ability to control ODW. As a result, it does not consolidate ODW into its financial statements. Refer to Note 7 for further discussion of how the Company accounts for its investment in ODW, including the Company's remaining contributions (which represent the maximum exposure to the Company). | ||
The Company also determined that, as of June 30, 2014, it continued to have a variable interest in an entity that was created to operate and tour its live arena show that is based on its feature film How to Train Your Dragon, and that the Company is the primary beneficiary of this entity as a result of the Company's obligation to fund all losses. Accordingly, the Company's consolidated financial statements included the activities of the VIE. The consolidation of the VIE had an immaterial impact as of and for the three and six months ended June 30, 2014 and 2013. | ||
Film and Other Inventory Costs Amortization | ||
Amortization and write-off of film and other inventory costs in any period includes depreciation and amortization, interest expense and stock-based compensation expense that were capitalized as part of film and other inventory costs in the period that those charges were incurred. The total amount of such expenses reflected as a component of amortization and write-off of film and other inventory costs for the six months ended June 30, 2014 and 2013 is presented in the statements of cash flows. | ||
Goodwill | ||
The Company performs a goodwill impairment test on an annual basis, or sooner if indicators of impairment are identified. As of June 30, 2014, $118.2 million of total goodwill was attributable to the ATV reporting unit (“ATV Goodwill”). ATV Goodwill represented the excess of the purchase price over the identifiable acquired net assets as of the time of the acquisition of ATV. A large portion of ATV’s purchase price was derived from the fair value of the contingent consideration arrangement entered into in connection with the acquisition (see Note 3). As a result, the cash flow assumptions used for purposes of the goodwill impairment assessment are closely aligned with those used to determine the fair value of the contingent consideration. In connection with the fair value assessment of the contingent consideration as of June 30, 2014, the Company evaluated the revised forecasts for the acquired business, noting a decline in the forecasted earnings for the period applicable to the determination of the contingent consideration payment. Based on this information, the Company determined that an interim goodwill impairment test was necessary and, accordingly, performed a qualitative assessment (commonly referred to as Step 0) to determine whether it was more likely than not that the fair value of the reporting unit was below its carrying value. This assessment included a review of the forecast for periods extending beyond the contingent consideration performance period, which reflected a significant decline in forecasted earnings for certain of the reporting unit's revenue streams when compared to the forecasted amounts at the time of the initial valuation of ATV, as well as delays in the timing of revenue growth. Based on this evaluation, the Company concluded that it was more likely than not that the fair value of the ATV reporting unit was less than the reporting unit's carrying amount and, accordingly, the Company proceeded with determining whether the reporting unit's fair value was greater than its carrying value (referred to as Step 1). The Company used the income approach to determine fair value and applied a blended discount rate of 35%. Because a key driver of fair value when applying the income approach is the forecast of future cash flows, the Company's determination of fair value was highly dependent on the level and timing of forecasted earnings and the resulting cash flows. Due to ATV’s limited operating history, there is significant uncertainty in the underlying estimates of ATV’s forecasted earnings. Changes in one or more of the key assumptions could lead to a different fair value of the reporting unit. For further discussion, see "Item 2—Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Goodwill." | ||
Upon completion of this analysis, the Company concluded that the fair value of the ATV reporting unit was greater than its carrying value by approximately 12% as of June 30, 2014 and, thus, ATV Goodwill was not impaired as of June 30, 2014. | ||
Use of Estimates | ||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates made by management in the preparation of the financial statements relate to the following: | ||
• | ultimate revenues and ultimate costs of film, television product and live performance productions; | |
• | relative selling price of the Company's products for purposes of revenue allocation in multi-property licenses and other multiple deliverable arrangements; | |
• | determination of fair value of assets and liabilities for the allocation of the purchase price in an acquisition; | |
• | determination of the fair value of reporting units for purposes of testing goodwill for impairment; | |
• | determination of fair value of non-cash contributions to investments in unconsolidated entities; | |
• | useful lives of intangible assets; | |
• | product sales that will be returned and the amount of receivables that ultimately will be collected; | |
• | the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements; | |
• | loss contingencies and contingent consideration arrangements; and | |
• | assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting. | |
Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis. |
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2014 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | ' |
Recent Accounting Pronouncements | ' |
Recent Accounting Pronouncements | |
In June 2014, the FASB issued an accounting standards update relating to the accounting for certain share-based awards. The accounting update states that, when the terms of an award provide that a performance target could be achieved after the requisite service period, the performance target should be treated as a performance condition that affects vesting and should not be reflected in the grant-date fair value. Companies are permitted to apply the guidance either prospectively to all awards granted or modified after the effective date or retrospectively to awards outstanding as of the beginning of the earliest annual period presented. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company adopted the new guidance upon issuance of the accounting standards update, which did not have an impact on its consolidated financial statements as the Company's existing accounting policy was already consistent with this guidance. | |
In May 2014, the FASB issued an accounting standards update to provide companies with a single model for use in accounting for revenue from contracts with customers. Once it becomes effective, the new guidance will replace most existing revenue recognition guidance in U.S. GAAP, including industry-specific guidance. The core principle of the model is to recognize revenue when control of goods or services transfers to the customer and in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services that have transferred. Under current U.S. GAAP, the Company recognizes revenue when the risks and rewards of ownership transfer to the customer. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. The guidance is effective for the Company's fiscal year beginning January 1, 2017, including interim periods within that fiscal year. Early adoption is not permitted. Companies are permitted to either apply the guidance retrospectively to all prior periods presented or, alternatively, apply the guidance in the year of adoption with the cumulative effect recognized at the date of initial application (referred to as the modified retrospective approach). The Company is in the process of determining the method of adoption, as well as evaluating the impact that the new standard will have on its consolidated financial statements. | |
In July 2013, the FASB issued an accounting standards update relating to the presentation of unrecognized tax benefits. The accounting update requires companies to present a deferred tax asset net of related unrecognized tax benefits if there is a net operating loss or other tax carryforwards that would apply in settlement of the uncertain tax position. To the extent that an uncertain tax position would not be settled through a reduction of a net operating loss or other tax carryforwards, the unrecognized tax benefit will be presented as a liability. The guidance is effective for the Company's fiscal year beginning January 1, 2014, with early adoption permitted. The Company adopted the new guidance effective January 1, 2014. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. |
Acquisitions
Acquisitions | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Business Combinations [Abstract] | ' | ||||||||
Acquisitions | ' | ||||||||
Acquisitions | |||||||||
Recent Acquisitions | |||||||||
The Company entered into an Agreement and Plan of Merger and Reorganization (the "Big Frame Merger Agreement”) pursuant to which, on April 7, 2014 (the “Big Frame Closing Date”), a wholly-owned subsidiary of the Company merged with and into Big Frame, Inc. (“Big Frame”). As a result of this transaction, Big Frame became a wholly-owned subsidiary of the Company. Big Frame is an online multi-channel network that connects advertisers with highly engaged audiences. The goodwill that resulted from the acquisition represents the potential synergies between Big Frame and the Company’s multi-channel network presence on the Internet and is not deductible for tax purposes. | |||||||||
Additionally, on May 20, 2014, the Company acquired certain rights, properties and other items pertaining to Felix the Cat and related characters pursuant to an Asset Purchase Agreement. The acquisition was accounted for as a business combination due to the Company assuming certain licensing arrangements related to the rights. The goodwill that resulted from the acquisition represents potential synergies between the rights acquired and consumer product opportunities. The goodwill is deductible for tax purposes. | |||||||||
The Company’s total cash consideration for these two transactions totaled approximately $33.6 million. As a result of these transactions and the preliminary purchase price allocations, the primary assets acquired were identifiable intangible assets of $22.1 million and resulting goodwill of $10.4 million. The results of operations for these two acquisitions have been included in the Company’s consolidated financial statements since their respective closing dates and had an immaterial impact for the three and six months ended June 30, 2014. | |||||||||
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 that resulted from the acquisition represents the potential synergies between ATV's filmed content, character portfolio and the Company's cross-platform expansion plans. The goodwill is allocated to a reporting unit that is currently not part of a separately reportable segment. | |||||||||
The Company's total consideration for this transaction totaled $128.5 million, including an accrual for estimated contingent consideration of $95.0 million. The following table outlines the components of consideration for the transaction (in thousands): | |||||||||
As of | |||||||||
3-May-13 | |||||||||
Cash payment | $ | 33,460 | |||||||
Estimated contingent consideration | 95,000 | ||||||||
Total consideration | $ | 128,460 | |||||||
The following table summarizes the final allocation of the purchase price (in thousands): | |||||||||
As of | |||||||||
May 3, 2013(1) | |||||||||
Cash and cash equivalents | $ | 1,340 | |||||||
Trade receivables(2) | 1,279 | ||||||||
Prepaid and other assets | 434 | ||||||||
Production costs | 612 | ||||||||
Property, plant and equipment | 183 | ||||||||
Intangible assets | 12,900 | ||||||||
Total identified assets acquired | 16,748 | ||||||||
Accounts payable | 655 | ||||||||
Deferred revenue | 2,057 | ||||||||
Deferred tax liabilities, net | 3,765 | ||||||||
Total liabilities assumed | 6,477 | ||||||||
Net identified assets acquired | 10,271 | ||||||||
Goodwill(3) | 118,189 | ||||||||
Total consideration | $ | 128,460 | |||||||
____________________ | |||||||||
-1 | Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million. | ||||||||
-2 | Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible. | ||||||||
(3) | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. | ||||||||
Contingent Consideration | |||||||||
Pursuant to the Merger Agreement, the Company may be required to make future cash payments to ATV's former shareholders as part of the total purchase price to acquire ATV. The contingent consideration is based on whether ATV increases its adjusted earnings before interest expense, income taxes, depreciation and amortization ("EBITDA") over an adjusted EBITDA threshold, over a two-year period (which commenced on January 1, 2014). Adjustments to EBITDA for purposes of determining the contingent consideration earned include, but are not limited to: ATV's employee bonus plan, non-cash gains and losses (such as those related to foreign currency accounting and reversals of prior year accruals) and changes in the fair value of contingent payment liabilities resulting from the acquisition of ATV. The Company estimates the fair value of contingent consideration using significant unobservable inputs in a Monte-Carlo simulation model and bases the fair value on the estimated risk-adjusted cost of capital of ATV's adjusted EBITDA following integration into the Company (an income approach). The estimate of the liability may fluctuate if there are changes in the forecast of ATV's future earnings or as a result of actual earnings levels achieved. Any changes in estimate of the contingent consideration liability will be reflected in the Company's results of operations in the period that the change occurs. | |||||||||
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 decreased from $96.5 million as of December 31, 2013 to $91.8 million as of June 30, 2014, primarily due to changes in the forecast of cash flows. The change in estimate was recorded as a gain in the consolidated statements of operations. As of June 30, 2014, the discount rate and volatility applied were 16.5% and 35.3%, respectively. Using a discount rate of 25% or a volatility of 20% would change the estimated fair value of the contingent consideration to $88.6 million and $99.3 million, respectively. | |||||||||
Pro Forma Financial Information | |||||||||
The following table presents (in thousands, except per share data) pro forma results of the Company as though ATV had been acquired as of January 1, 2012 (the beginning of the prior annual reporting period based on the period in which the acquisition occurred). | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, 2013 | June 30, 2013 | ||||||||
Revenues | $ | 213,984 | $ | 348,905 | |||||
Net income attributable to DreamWorks Animation SKG, Inc. | $ | 22,443 | $ | 26,340 | |||||
Basic net income per share | $ | 0.27 | $ | 0.31 | |||||
Diluted net income per share | $ | 0.27 | $ | 0.31 | |||||
These pro forma results do not necessarily represent what would have occurred if the ATV transaction had taken place on January 1, 2012, nor do they represent the results that may occur in the future. The pro forma amounts include the historical operating results of the Company and ATV prior to the acquisition, with adjustments directly attributable to the acquisition. The pro forma results include a increase to tax expense in the amount of $1.4 million for the six months ended June 30, 2013. The pro forma results also include an increase to amortization expense related to the fair value of the intangible assets acquired of $1.0 million for the three months ended June 30, 2013 and $3.9 million for the six months ended June 30, 2013. |
Financial_Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2014 | |
Fair Value Disclosures [Abstract] | ' |
Financial Instruments | ' |
Financial Instruments | |
The fair value of cash and cash equivalents, accounts payable, advances and amounts outstanding under the revolving credit facility approximates carrying value due to the short-term maturity of such instruments and floating interest rates. As of June 30, 2014, the fair value of trade accounts receivable approximated carrying value due to the similarities in the initial and current discount rates. In addition, as of June 30, 2014, the fair value of the senior unsecured notes approximated carrying value as the current borrowing rate approximated the debt instrument's actual interest rate. The fair value of trade accounts receivable and the senior unsecured notes was determined using significant unobservable inputs by performing a discounted cash flow analysis and using current discount rates as appropriate for each type of instrument. | |
The Company has short-term money market investments which are classified as cash and cash equivalents on the consolidated balance sheets. The fair value of these investments at June 30, 2014 and December 31, 2013 was measured based on quoted prices in active markets. |
Film_and_Other_Inventory_Costs
Film and Other Inventory Costs | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Film Costs [Abstract] | ' | |||||||
Film And Other Inventory Costs | ' | |||||||
Film and Other Inventory Costs | ||||||||
Film, television, live performance and other inventory costs consist of the following (in thousands): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
In release, net of amortization: | ||||||||
Feature films | $ | 443,929 | $ | 285,238 | ||||
Television series and specials | 55,527 | 58,631 | ||||||
In production: | ||||||||
Feature films | 305,295 | 474,609 | ||||||
Television series and specials | 49,937 | 15,332 | ||||||
In development: | ||||||||
Feature films | 108,443 | 75,498 | ||||||
Television series and specials | 165 | 1,500 | ||||||
Product inventory and other(1) | 16,623 | 32,678 | ||||||
Total film, television, live performance and other inventory costs, net | $ | 979,919 | $ | 943,486 | ||||
____________________ | ||||||||
(1) | This category includes $8.8 million and $24.8 million of capitalized live performance costs as of June 30, 2014 and December 31, 2013, respectively. In addition, as of June 30, 2014 and December 31, 2013, this category includes $7.7 million and $7.9 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 51% and 83% of the above "in release" film and other inventory costs as of June 30, 2014 will be amortized over the next 12 months and three years, respectively. | ||||||||
As a result of the weaker-than-expected worldwide theatrical performance of Mr. Peabody and Sherman (released into the domestic theatrical market during March 2014), the Company performed an analysis as of March 31, 2014 to determine whether the unamortized film inventory costs exceeded fair value and was thus impaired. Key assumptions used in the fair value measurement were a discount rate of 7% and estimated remaining cash flows over a period of approximately 15 years. As a result of the analysis, the six-month period ended June 30, 2014 includes an impairment charge of $57.1 million. | ||||||||
No impairment charges were recorded on film and other inventory costs during the six months ended June 30, 2013. |
Intangible_Assets
Intangible Assets | 6 Months Ended | |||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||
Intangible Assets | ' | |||||||||||||||||
Intangible Assets | ||||||||||||||||||
As of June 30, 2014 and December 31, 2013, intangible assets included $69.2 million and $49.5 million, respectively, 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 June 30, 2014: | ||||||||||||||||||
Character rights | 13.9 | $ | 99,000 | $ | (11,994 | ) | $ | 3,003 | $ | 90,009 | ||||||||
Distribution rights | 11.2 | 30,000 | — | — | 30,000 | |||||||||||||
Programming content | 2 | 11,200 | (6,533 | ) | — | 4,667 | ||||||||||||
Trademarks and trade names | 10 | 1,410 | (145 | ) | — | 1,265 | ||||||||||||
Other intangibles | 4.4 | 2,700 | (403 | ) | — | 2,297 | ||||||||||||
Total | $ | 144,310 | $ | (19,075 | ) | $ | 3,003 | $ | 128,238 | |||||||||
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 | |||||||||
The Company expects to record amortization over the next five fiscal years as follows (in thousands): | ||||||||||||||||||
2015 | $ | 12,260 | ||||||||||||||||
2016 | 11,168 | |||||||||||||||||
2017 | 11,588 | |||||||||||||||||
2018 | 11,515 | |||||||||||||||||
2019 | 11,130 | |||||||||||||||||
Total | $ | 57,661 | ||||||||||||||||
Investments_in_Unconsolidated_
Investments in Unconsolidated Entities | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Investments in Unconsolidated Entities [Abstract] | ' | |||||||||||||||
Investments in Unconsolidated Entities | ' | |||||||||||||||
Investments in Unconsolidated Entities | ||||||||||||||||
The Company has made investments in entities which are accounted for under either the cost or equity method of accounting. These investments are classified as investments in unconsolidated entities in the consolidated balance sheets and consist of the following (in thousands, unless otherwise indicated): | ||||||||||||||||
Ownership | ||||||||||||||||
Percentage at | June 30, | December 31, | ||||||||||||||
June 30, 2014 | 2014 | 2013 | ||||||||||||||
Oriental DreamWorks Holding Limited | 45.45% | $ | 16,645 | $ | 16,389 | |||||||||||
All Other | 17.5%-50.0% | 3,642 | 3,140 | |||||||||||||
Total equity method investments | 20,287 | 19,529 | ||||||||||||||
Total cost method investments | 29,013 | 19,013 | ||||||||||||||
Total investments in unconsolidated entities | $ | 49,300 | $ | 38,542 | ||||||||||||
Under the equity method of accounting, the carrying value of an investment is adjusted for the Company's proportionate share of the investees' earnings and losses (adjusted for the amortization of any differences in the Company's basis, with respect to the Company's investment in ODW, compared to the Company's share of venture-level equity), as well as contributions to and distributions from the investee. The Company classifies its share of income or loss from investments accounted for under the equity method as income/loss from equity method investees in its consolidated statements of operations. | ||||||||||||||||
(Loss) income from equity method investees consist of the following (in thousands): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Oriental DreamWorks Holding Limited(1) | $ | (2,394 | ) | $ | (957 | ) | $ | (4,604 | ) | $ | (957 | ) | ||||
All Other | (1,073 | ) | (372 | ) | (2,123 | ) | (372 | ) | ||||||||
(Loss) income from equity method investees | $ | (3,467 | ) | $ | (1,329 | ) | $ | (6,727 | ) | $ | (1,329 | ) | ||||
____________________ | ||||||||||||||||
(1) | The Company currently records its share of ODW results on a one-month lag. Accordingly, the Company's consolidated financial statements include its share of losses incurred by ODW from December 1, 2013 to May 31, 2014. | |||||||||||||||
Oriental DreamWorks Holding Limited | ||||||||||||||||
On April 3, 2013 ("ODW Closing Date"), the Company formed a Chinese Joint Venture, ODW (or the "Chinese Joint Venture"), through the execution of a Transaction and Contribution Agreement, as amended, with its Chinese partners, China Media Capital (Shanghai) Center L.P. ("CMC"), Shanghai Media Group ("SMG") and Shanghai Alliance Investment Co., Ltd. ("SAIL", and together with CMC and SMG, the "CPE Holders"). In exchange for 45.45% of the equity of ODW, the Company has committed to making a total cash capital contribution to ODW of $50.0 million (of which $6.6 million had been funded as of June 30, 2014, with the balance to be funded over time) and non-cash contributions valued at approximately $100.0 million (of which approximately $28.7 million had been satisfied as of June 30, 2014). Such non-cash contributions include licenses of technology and certain other intellectual property of the Company, rights in certain trademarks of the Company, two in-development feature film projects developed by the Company and consulting and training services. During the three and six months ended June 30, 2013, the Company's consolidated statements of operations included $7.8 million of revenues recognized in connection with non-cash contributions made to ODW. The Company's consolidated statements of operations included other operating income recognized in connection with non-cash contributions made to ODW of $2.3 million and $2.9 million during the three months ended June 30, 2014 and 2013, respectively, and $4.0 million and $2.9 million during the six months ended June 30, 2014 and 2013, respectively. | ||||||||||||||||
As of June 30, 2014, the Company's remaining contributions consisted of the following: (i) $43.4 million in cash (which is expected to be funded over the next three years), (ii) two of the Company's in-development film projects, (iii) remaining delivery requirements under the licenses of technology and certain other intellectual property of the Company and (iv) approximately $7.0 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): | ||||||||||||||||
June 30, 2014 | ||||||||||||||||
Company's venture-level equity | $ | 40,997 | ||||||||||||||
Technology and intellectual property licenses(1) | (17,042 | ) | ||||||||||||||
Other(2) | (7,310 | ) | ||||||||||||||
Total ODW investment recorded | $ | 16,645 | ||||||||||||||
____________________ | ||||||||||||||||
-1 | Represents differences between the Company's historical cost basis and the equity basis reflected at the venture-level (the amount recorded on the balance sheet of ODW) related to the Company's contributions of technology and intellectual property licenses. These basis differences arise because the contributed assets are recorded at fair value by ODW. | |||||||||||||||
(2) | Represents the Company's net contribution commitment due to ODW. | |||||||||||||||
Other Transactions with ODW. The Company has various other transactions with ODW, a related party. The Company has entered into a distribution agreement with ODW for the distribution of the Company's feature films in China (beginning with The Croods). In addition, from time to time, the Company may provide consulting and training services to ODW, the charges of which are based on the Company's actual cost of providing such services. The Company's consolidated statements of operations included revenues earned through ODW's distribution of its feature films of $1.3 million and $2.0 million during the three- and six-month periods ended June 30, 2014, respectively, and $13.0 million during each of the three- and six-month periods ended June 30, 2013. As of June 30, 2014 and December 31, 2013, the Company's consolidated balance sheets included receivables from ODW of $7.1 million and $3.8 million, respectively, which were classified as a component of trade accounts receivable, and $3.6 million and $16.7 million, respectively, which were classified as a component of receivables from distributors. |
Accrued_Liabilities
Accrued Liabilities | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Accrued Liabilities | ' | |||||||
Accrued Liabilities | ||||||||
Accrued liabilities consist of the following (in thousands): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Employee compensation | $ | 28,571 | $ | 65,625 | ||||
Participations and residuals | 46,495 | 50,690 | ||||||
Contingent consideration(1) | 92,691 | 97,545 | ||||||
Interest payable | 7,958 | 7,849 | ||||||
Income taxes payable | 7,494 | 118 | ||||||
Deferred rent | 10,793 | 8,114 | ||||||
Other accrued liabilities | 38,315 | 33,727 | ||||||
Total accrued liabilities | $ | 232,317 | $ | 263,668 | ||||
____________________ | ||||||||
(1) | Primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 3 for further information). | |||||||
As of June 30, 2014, the Company estimates that over the next 12 months it will pay approximately $23.9 million of its accrued participation and residual costs. |
Deferred_Revenue_and_Other_Adv
Deferred Revenue and Other Advances | 6 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||||||||||||||||||
Deferred Revenue and Other Advances | ' | |||||||||||||||||||||||
Deferred Revenue and Other Advances | ||||||||||||||||||||||||
The following is a summary of deferred revenue and other advances included in the consolidated balance sheets as of June 30, 2014 and December 31, 2013 and the related amounts earned and recorded either as revenue in the consolidated statements of operations or recorded as an offset to other costs (as described below) for the three- and six-month periods ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||
Amounts Earned | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | December 31, | June 30, | June 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Deferred Revenue | $ | 8,673 | $ | 14,578 | $ | 8,628 | $ | 5,741 | $ | 16,265 | $ | 13,473 | ||||||||||||
Strategic Alliance/Development Advances(1) | 4,167 | 1,667 | 8,229 | 6,816 | 15,367 | 15,890 | ||||||||||||||||||
Other(2) | 22,242 | 20,180 | 6,228 | 23,865 | 26,125 | 28,617 | ||||||||||||||||||
Total deferred revenue and other advances | $ | 35,082 | $ | 36,425 | ||||||||||||||||||||
____________________ | ||||||||||||||||||||||||
(1) | Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended June 30, 2014 and 2013, $3.5 million and $2.7 million, respectively, and $5.9 million and $7.9 million for the six months ended June 30, 2014 and 2013, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended June 30, 2014 and 2013, of the total amounts earned, $2.5 million and $0.7 million, respectively, and for the six months ended June 30, 2014 and 2013, $3.5 million and $1.2 million, respectively, were recorded as a reduction to other assets. During the six months ended June 30, 2014 and 2013, $0.5 million and $1.3 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended June 30, 2014 and 2013, of the total amounts earned, $0.5 million and $0.6 million, respectively, and for the six months ended June 30, 2014 and 2013, $1.6 million and $1.0 million, respectively, were recorded as a reduction to operating expenses. | |||||||||||||||||||||||
(2) | Of the total amounts earned, for the six months ended June 30, 2014, $14.0 million was recorded as a reduction to film and other inventory costs. |
Financing_Arrangements
Financing Arrangements | 6 Months Ended | |||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||
Line of Credit Facility [Abstract] | ' | |||||||||||||||||||||||||||
Financing Arrangements | ' | |||||||||||||||||||||||||||
Financing Arrangements | ||||||||||||||||||||||||||||
Senior Unsecured Notes. On August 14, 2013, the Company issued $300.0 million in aggregate principal amount of 6.875% Senior Notes due 2020 (the "Notes"). In connection with the issuance of the Notes, the Company entered into an indenture (the “Indenture”) with The Bank of New York Mellon Trust Company, N.A., as trustee, specifying the terms of the Notes. The Notes were sold at a price to investors of 100% of their principal amount and were issued in a private placement pursuant to the exemptions under Rule 144A and Regulation S under the Securities Act of 1933, as amended. The net proceeds from the Notes amounted to $294.0 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. Beginning on February 15, 2014, the Company is required to pay interest on the Notes semi-annually in arrears on February 15 and August 15 of each year. The principal amount is due upon maturity. The Notes are guaranteed by all of the Company's domestic subsidiaries that also guarantee its revolving credit facility. | ||||||||||||||||||||||||||||
The Indenture contains certain restrictions and covenants that, subject to certain exceptions, limit the Company's ability to incur additional indebtedness, pay dividends or repurchase the Company's common shares, make certain loans or investments, and sell or otherwise dispose of certain assets, among other limitations. The Indenture also contains customary events of default, which, if triggered, may accelerate payment of principal, premium, if any, and accrued but unpaid interest on the Notes. Such events of default include non-payment of principal and interest, non-performance of covenants and obligations, default on other material debt, failure to satisfy material judgments and bankruptcy or insolvency. If a change of control as described in the Indenture occurs, the Company may be required to offer to purchase the Notes from the holders thereof at a repurchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to, but not including, the date of repurchase. | ||||||||||||||||||||||||||||
At any time prior to August 15, 2016, the Company may redeem all or part of the Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) a specified premium as of the date of redemption, plus (iii) accrued and unpaid interest to, but not including, the date of redemption, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. On or after August 15, 2016, the Company may redeem all or a part of the Notes, at specified redemption prices plus accrued and unpaid interest thereon, to, but not including, the applicable redemption date, subject to the rights of holders of Notes on the relevant record date to receive interest due on the relevant interest payment date. In addition, at any time prior to August 15, 2016, the Company may redeem up to 35% of the Notes with the net proceeds of certain equity offerings at a redemption price equal to 106.875% of the principal amount thereof, in each case plus accrued and unpaid interest and additional interest, if any, thereon to, but not including, the redemption date. | ||||||||||||||||||||||||||||
Revolving Credit Facility. The Company has a revolving credit facility with a number of banks. On August 10, 2012, the Company and the facility banks terminated the then-existing credit agreement and entered into a new Credit Agreement ("New Credit Agreement"). The New Credit Agreement allows the Company to have outstanding borrowings up to $400.0 million at any one time, on a revolving basis. The Company may from time to time, so long as no default or event of default has occurred under the New Credit Agreement, increase the commitments under the New Credit Agreement by up to $50.0 million. Borrowings are secured by substantially all of the Company's assets. The New Credit Agreement requires the Company to maintain a specified ratio of total debt to total capitalization and a specified ratio of net remaining ultimates to facility exposure. In addition, subject to specified exceptions, the New Credit Agreement also restricts the Company and its subsidiaries from taking certain actions, such as granting liens, entering into any merger or other significant transactions, making distributions, entering into transactions with affiliates, agreeing to negative pledge clauses and restrictions on subsidiary distributions, and modifying organizational documents. The revolving credit facility also prohibits the Company from paying dividends on its capital stock if, after giving pro forma effect to such dividend, an event of default would occur or exist under the revolving credit facility. The Company is required to pay a commitment fee on undrawn amounts at an annual rate of 0.375%. Interest on borrowed amounts (per draw) is determined by reference to either i) the lending banks' base rate plus 1.50% per annum or ii) the London Interbank Offered Rate ("LIBOR") plus 2.50% per annum. | ||||||||||||||||||||||||||||
The following table summarizes information associated with the Company's financing arrangements (in thousands, except percentages): | ||||||||||||||||||||||||||||
Interest Expense | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
Balance Outstanding at | Maturity Date | June 30, | June 30, | |||||||||||||||||||||||||
June 30, | 31-Dec-13 | Interest Rate at | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
2014 | 30-Jun-14 | |||||||||||||||||||||||||||
Senior Unsecured Notes | $ | 300,000 | $ | 300,000 | Aug-20 | 6.88% | $ | 2,849 | N/A | $ | 5,083 | N/A | ||||||||||||||||
Revolving Credit Facility | $ | 100,000 | $ | — | Aug-17 | 2.70% | $ | 466 | $ | 215 | $ | 841 | $ | 435 | ||||||||||||||
____________________ | ||||||||||||||||||||||||||||
N/A: Not applicable | ||||||||||||||||||||||||||||
Additional Financing Information | ||||||||||||||||||||||||||||
Interest Capitalized to Film Costs. Interest on borrowed funds that are invested in major projects with substantial development or construction phases is capitalized as part of the asset cost until the projects are released or construction projects are put into service. Thus, capitalized interest is amortized over future periods on a basis consistent with that of the asset to which it relates. During the three months ended June 30, 2014 and 2013, the Company incurred interest costs totaling $6.2 million and $1.7 million, respectively, of which $2.6 million and $1.5 million, respectively, were capitalized to film costs. During the six months ended June 30, 2014 and 2013, the Company incurred interest costs totaling $12.3 million and $3.3 million, respectively, of which $5.8 million and $2.9 million, respectively, were capitalized to film costs. | ||||||||||||||||||||||||||||
As of June 30, 2014, the Company was in compliance with all applicable financial debt covenants. |
Income_Taxes
Income Taxes | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Income Taxes | ' | |||||||||||
Income Taxes | ||||||||||||
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 "Decrease (increase) in income tax benefit payable to former stockholder") to differ from amounts computed by applying the U.S. Federal statutory rate of 35% for the three and six months ended June 30, 2014 and 2013. | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2014 | 2013(4) | 2014 | 2013(4) | |||||||||
Provision for income taxes (combined with decrease/increase in income tax benefit payable to former stockholder)(1) | ||||||||||||
U.S. Federal statutory rate | 35 | % | 35 | % | 35 | % | 35 | % | ||||
U.S. state taxes, net of Federal benefit | 0.5 | (1.7 | ) | 1.4 | (1.9 | ) | ||||||
Export sales exclusion/manufacturer's deduction(2) | 15.4 | (0.7 | ) | 3.9 | 0.8 | |||||||
Research and development credit(2) | — | (1.8 | ) | — | (6.1 | ) | ||||||
Federal energy tax credit(3) | — | (2.0 | ) | — | (2.1 | ) | ||||||
Executive compensation | (39.4 | ) | 3.2 | (7.6 | ) | 3.2 | ||||||
Non-controlling interests | 5.8 | — | 1.1 | — | ||||||||
Change in fair value of contingent consideration | (2.5 | ) | — | (1.5 | ) | — | ||||||
Losses from an equity method investee | (19.0 | ) | — | (3.5 | ) | — | ||||||
Other | (1.8 | ) | — | (1.0 | ) | 0.1 | ||||||
Effective tax rate (combined with decrease/increase in income tax benefit payable to former stockholder)(1) | (6.0 | )% | 32 | % | 27.8 | % | 29 | % | ||||
Less: change in income tax benefit payable to former stockholder(1): | ||||||||||||
U.S. state taxes, net of Federal benefit | 0.5 | — | 0.1 | — | ||||||||
Export sales exclusion/manufacturer's deduction(2) | (15.9 | ) | 0.4 | (3.9 | ) | (1.0 | ) | |||||
Imputed interest on payable to former stockholder | 3.1 | (1.5 | ) | 0.6 | (1.6 | ) | ||||||
Other | 1 | — | — | — | ||||||||
Total change in income tax benefit payable to former stockholder(1) | (11.3 | )% | (1.1 | )% | (3.2 | )% | (2.6 | )% | ||||
Effective tax rate | (17.3 | )% | 30.9 | % | 24.6 | % | 26.4 | % | ||||
____________________ | ||||||||||||
(1) | As a result of a partial increase in the tax basis of the Company's tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of the Company's 2004 initial public offering, the Company may pay reduced tax amounts to the extent it generates sufficient taxable income in the future. The Company is obligated to remit to an affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax, California franchise tax and certain other related tax benefits. Refer to the Company's 2013 Form 10-K for a more detailed description. | |||||||||||
(2) | The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment). | |||||||||||
(3) | The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated. | |||||||||||
(4) | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. | |||||||||||
Although the Company recognized a pre-tax loss for the three months ended June 30, 2014, the Company's effective tax rate and combined effective tax rate were negative due to limitations on its ability to recognize a portion of its state tax benefit during the quarter. | ||||||||||||
The Company's federal income tax returns for the tax years ended December 31, 2007 through 2009 are currently under examination by the Internal Revenue Service, and all subsequent tax years remain open to audit. The Company's California state tax returns for all years subsequent to 2007 remain open to audit. The Company's India subsidiary's income tax returns are currently under examination for the tax years ended March 31, 2011 through 2012. |
Stockholders_Equity_and_Noncon
Stockholders' Equity and Non-controlling Interests | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||
Stockholders' Equity and Non-controlling Interests | ' | |||||||||||
Stockholders’ Equity and Non-controlling Interests | ||||||||||||
Class A Common Stock | ||||||||||||
Stock Repurchase Program. In July 2010, the Company's Board of Directors terminated the then-existing stock repurchase program and authorized a new stock repurchase program pursuant to which the Company may repurchase up to an aggregate of $150.0 million of its outstanding stock. During the three and six months ended June 30, 2014, the Company did not repurchase any shares of its Class A Common Stock. During the three and six months ended June 30, 2013, the Company repurchased 0.5 million and 1.3 million shares, respectively, of its outstanding Class A Common Stock for $8.8 million and $25.0 million, respectively, under the July 2010 authorization. As of June 30, 2014, the Company's remaining authorization under the current stock repurchase program was $100.0 million. | ||||||||||||
Non-controlling Interests | ||||||||||||
The Company's consolidated balance sheets include non-controlling interests, which are presented as a separate component of equity. A non-controlling interest represents the other equity holder's interest in a joint venture that the Company consolidates. The net income or loss attributable to the non-controlling interests is presented in the Company’s consolidated statements of operations. There is no other comprehensive income or loss attributable to the non-controlling interests. | ||||||||||||
The following table presents the changes in equity for the six-month periods ended June 30, 2014 and 2013 (in thousands): | ||||||||||||
DreamWorks Animation SKG, Inc. Stockholders' Equity | Non-controlling Interests | Total Equity | ||||||||||
Balance as of December 31, 2013 | $ | 1,404,795 | $ | 1,224 | $ | 1,406,019 | ||||||
Proceeds from stock option exercises | 261 | — | 261 | |||||||||
Stock-based compensation | 15,989 | — | 15,989 | |||||||||
Purchase of treasury shares | (1,751 | ) | — | (1,751 | ) | |||||||
Foreign currency translation adjustments | 695 | — | 695 | |||||||||
Distributions to non-controlling interest holder | — | (143 | ) | (143 | ) | |||||||
Net loss | (58,323 | ) | (21 | ) | (58,344 | ) | ||||||
Balance as of June 30, 2014 | $ | 1,361,666 | $ | 1,060 | $ | 1,362,726 | ||||||
Balance as of December 31, 2012 | $ | 1,345,616 | $ | 630 | $ | 1,346,246 | ||||||
Stock-based compensation | 18,224 | — | 18,224 | |||||||||
Purchase of treasury shares | (25,685 | ) | — | (25,685 | ) | |||||||
Foreign currency translation adjustments | (2,596 | ) | — | (2,596 | ) | |||||||
Distributions to non-controlling interest holder | — | (45 | ) | (45 | ) | |||||||
Net income | 27,830 | 532 | 28,362 | |||||||||
Balance as of June 30, 2013 | $ | 1,363,389 | $ | 1,117 | $ | 1,364,506 | ||||||
StockBased_Compensation
Stock-Based Compensation | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||
Stock-Based Compensation | ||||||||||||||||
The Company recognizes compensation costs for equity awards granted to its employees based on each award's grant-date fair value. Most of the Company's equity awards contain vesting conditions dependent upon the completion of specified service periods or achievement of established sets of performance criteria. Compensation cost for service-based equity awards is recognized ratably over the requisite service period. Compensation cost for certain performance-based awards is recognized using a graded expense-attribution method. The Company has granted performance-based awards where the value of the award upon vesting will vary depending on the level of performance ultimately achieved (for example, during the year ended December 31, 2013, the Company granted awards that vest only if the Company achieves positive earnings before interest and taxes for the year ending December 31, 2014). The Company recognizes compensation cost for these awards based on the level of performance expected to be achieved. The Company will recognize the impact of any change in estimate in the period of the change. | ||||||||||||||||
Generally, equity awards are forfeited by employees who terminate prior to vesting. However, certain employment contracts for certain executive officers provide for the acceleration of vesting in the event of a change in control or specified termination events. The Company currently satisfies exercises of stock options and stock appreciation rights, the vesting of restricted stock and the delivery of shares upon the vesting of restricted stock units with the issuance of new shares. | ||||||||||||||||
The impact of stock options (including stock appreciation rights) and restricted stock awards on net income (excluding amounts capitalized) for the three- and six-month periods ended June 30, 2014 and 2013, respectively, were as follows (in thousands): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total stock-based compensation | $ | 3,112 | $ | 5,762 | $ | 8,421 | $ | 9,837 | ||||||||
Tax impact(1) | 187 | (1,844 | ) | (2,341 | ) | (2,853 | ) | |||||||||
Reduction in net income, net of tax | $ | 3,299 | $ | 3,918 | $ | 6,080 | $ | 6,984 | ||||||||
____________________ | ||||||||||||||||
(1) | Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item "Decrease/increase in income tax benefit payable to former stockholder" (see Note 11). | |||||||||||||||
Stock-based compensation cost capitalized as a part of film costs was $3.7 million and $4.0 million for the three-month periods ended June 30, 2014 and 2013, respectively, and $7.3 million and $8.3 million for the six-month periods ended June 30, 2014 and 2013, respectively. | ||||||||||||||||
The following table sets forth the number and weighted average grant-date fair value of equity awards granted during the three- and six-month periods ended June 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
Number | Weighted | Number | Weighted | |||||||||||||
Granted | Average | Granted | Average | |||||||||||||
Grant-Date | Grant-Date | |||||||||||||||
Fair Value | Fair Value | |||||||||||||||
(in thousands) | ||||||||||||||||
2014 | ||||||||||||||||
Restricted stock and restricted stock units | 235 | $ | 25.21 | 459 | $ | 27.5 | ||||||||||
2013 | ||||||||||||||||
Restricted stock and restricted stock units | 166 | $ | 21.49 | 427 | $ | 18.67 | ||||||||||
As of June 30, 2014, the total compensation cost related to unvested equity awards granted to employees (excluding equity awards with performance objectives not probable of achievement) but not yet recognized was approximately $71.9 million and will be amortized on a straight-line basis over a weighted average period of 1.8 years. |
Reportable_Segments
Reportable Segments | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||
Reportable Segments | ' | |||||||||||||||||||
Reportable Segments | ||||||||||||||||||||
During the three months ended September 30, 2013, the Company reorganized its internal management structure to align with changes in how it operates the business and evaluates financial performance of individual business units. As a result, there were changes to its operating segments and the Company has revised its segment information for prior periods to conform to the current presentation. The Company's current reportable segments are the following: Feature Films, Television Series and Specials and Consumer Products. Feature Films consists of the development, production and exploitation of feature films in the theatrical, television, home entertainment and digital markets. Television Series and Specials consists of the development, production and exploitation of television, direct-to-video and other non-theatrical content in the television, home entertainment and digital markets. Consumer Products consists of the Company's merchandising and licensing activities related to the exploitation of its intellectual property rights. Operating segments that are not separately reportable are categorized in "All Other" and include ATV and live performances. | ||||||||||||||||||||
Segment performance is evaluated based on revenues and gross profit. The Company does not allocate assets to each of its operating segments, nor does the Company's chief operating decision maker evaluate operating segments using discrete asset information. Information on the reportable segments and a reconciliation of total segment revenues and gross profit to consolidated financial statements are presented below (in thousands): | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Feature Films | $ | 69,686 | $ | 172,921 | $ | 179,722 | $ | 251,446 | ||||||||||||
Television Series and Specials | 19,950 | 21,131 | 37,919 | 40,499 | ||||||||||||||||
Consumer Products | 18,533 | 15,609 | 30,661 | 43,113 | ||||||||||||||||
All Other | 14,108 | 3,775 | 21,216 | 13,026 | ||||||||||||||||
Total revenues | $ | 122,277 | $ | 213,436 | $ | 269,518 | $ | 348,084 | ||||||||||||
Gross profit(1) | ||||||||||||||||||||
Feature Films | $ | 23,902 | $ | 68,052 | $ | (1,526 | ) | $ | 93,983 | |||||||||||
Television Series and Specials | 1,220 | 6,762 | 6,979 | 11,679 | ||||||||||||||||
Consumer Products | 7,308 | 5,046 | 13,351 | 23,494 | ||||||||||||||||
All Other | 2,315 | 300 | 2,493 | 131 | ||||||||||||||||
Total gross profit | $ | 34,745 | $ | 80,160 | $ | 21,297 | $ | 129,287 | ||||||||||||
____________________ | ||||||||||||||||||||
(1) | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes. | |||||||||||||||||||
The following table presents goodwill for each of the Company's reportable segments (in thousands): | ||||||||||||||||||||
Feature Films | Television Series and Specials | Consumer Products | All Other | Total | ||||||||||||||||
Balance as of December 31, 2013 | $ | 43,995 | $ | 6,111 | $ | 10,999 | $ | 118,617 | $ | 179,722 | ||||||||||
Measurement period adjustments related to the acquisition of ATV | — | — | — | (428 | ) | (428 | ) | |||||||||||||
Acquisitions | — | — | 1,300 | 9,073 | 10,373 | |||||||||||||||
Balance as of June 30, 2014 | $ | 43,995 | $ | 6,111 | $ | 12,299 | $ | 127,262 | $ | 189,667 | ||||||||||
Related_Party_Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
Related Party Transactions | |
Transactions with ODW | |
During the six months ended June 30, 2014, the Company had various transactions with a related party, ODW. See Note 7 for further discussion related to these transactions. | |
Transactions with Universal Music Group | |
One of the Company's directors, Lucian Grainge, is the chief executive officer of Universal Music Group ("UMG"). From time to time, the Company and UMG (including its subsidiaries) make payments to each other in connection with the licensing of music that is owned by the other company. In addition, UMG serves as the Company's music publisher. Finally, UMG and ATV (which the Company acquired in May 2013) have formed joint ventures related to the music business. As it relates to these arrangements, for the three and six months ended June 30, 2014 and 2013, revenues recognized and expenses incurred (which were recorded as film inventory costs) were not material. As of June 30, 2014, the Company's deferred revenue and other advances (see Note 9) included a cash advance received in the amount of $5.0 million related to music licensing revenues. | |
Fuhu, Inc. | |
The Company holds an equity investment in Fuhu, Inc. (“Fuhu”) representing approximately 3% of Fuhu’s outstanding equity securities. The Company's chief financial officer’s son currently serves as the chief financial officer of Fuhu. The Company has entered into various agreements with Fuhu, involving, among other things, the licensing of certain of the Company’s characters and other intellectual property for use by Fuhu in connection with Fuhu’s tablet computers and the provision of marketing and other services to Fuhu. During the six months ended June 30, 2014, revenues earned from Fuhu were immaterial. |
Concentrations_of_Credit_Risk
Concentrations of Credit Risk | 6 Months Ended |
Jun. 30, 2014 | |
Risks and Uncertainties [Abstract] | ' |
Concentrations of Credit Risk | ' |
Concentrations of Credit Risk | |
A substantial portion of the Company's revenue is derived directly from the Company's third-party distributors, Paramount and Fox. Paramount represented approximately 27% and 47% of total revenue for the three-month periods ended June 30, 2014 and 2013, respectively, and 27% and 51% for the six-month periods ended June 30, 2014 and 2013, respectively. Fox represented approximately 30% and 28% of total revenue for the three-month periods ended June 30, 2014 and 2013, respectively, and 21% and 18% for the six-month periods ended June 30, 2014 and 2013, respectively . | |
As of June 30, 2014 and December 31, 2013, approximately 58% and 49%, respectively, of the Company's trade accounts receivable balance consisted of long-term receivables related to licensing arrangements with Netflix, Inc. |
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies | ' |
Commitments and Contingencies | |
Legal Proceedings. From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business, typically intellectual property litigation and infringement claims related to the Company's feature films and other commercial activities, which could cause the Company to incur significant expenses or prevent the Company from releasing a film or other properties. The Company also has been the subject of patent and copyright claims relating to technology and ideas that it may use or feature in connection with the production, marketing or exploitation of the Company's feature films and other properties, which may affect the Company's ability to continue to do so. Furthermore, from time to time the Company may introduce new products or services, including in areas where it currently does not operate, which could increase its exposure to litigation and claims by competitors, consumers or other intellectual property owners. Defending intellectual property litigation is costly and can impose a significant burden on management and employees, and there can be no assurances that favorable final outcomes will be obtained in all cases. While the resolution of these matters cannot be predicted with certainty, the Company does not believe, based on current knowledge, that any existing legal proceedings or claims are likely to have a material effect on its financial position, results of operations or cash flows. | |
Contributions to ODW. The Company has committed to making certain contributions in connection with the formation of ODW. Refer to Note 7 for further discussion related to these commitments. | |
Contingent Consideration. As a result of the Company's acquisition of ATV, the Company may be obligated to make additional contingent cash payments as part of the purchase price. Refer to Note 3 for further discussion. |
Earnings_Per_Share_Data
Earnings Per Share Data | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Earnings Per Share Data | ' | |||||||||||||||
Earnings Per Share Data | ||||||||||||||||
The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share amounts): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Numerator: | ||||||||||||||||
Net (loss) income attributable to DreamWorks Animation SKG, Inc. | $ | (15,387 | ) | $ | 22,253 | $ | (58,323 | ) | $ | 27,830 | ||||||
Denominator: | ||||||||||||||||
Weighted average common shares and denominator for basic calculation: | ||||||||||||||||
Weighted average common shares outstanding | 84,658 | 83,634 | 84,624 | 84,204 | ||||||||||||
Less: Unvested restricted stock | (104 | ) | (110 | ) | (104 | ) | (110 | ) | ||||||||
Denominator for basic calculation | 84,554 | 83,524 | 84,520 | 84,094 | ||||||||||||
Weighted average effects of dilutive stock-based compensation awards: | ||||||||||||||||
Restricted stock awards | — | 1,009 | — | 804 | ||||||||||||
Denominator for diluted calculation | 84,554 | 84,533 | 84,520 | 84,898 | ||||||||||||
Net (loss) income per share—basic | $ | (0.18 | ) | $ | 0.27 | $ | (0.69 | ) | $ | 0.33 | ||||||
Net (loss) income per share—diluted | $ | (0.18 | ) | $ | 0.26 | $ | (0.69 | ) | $ | 0.33 | ||||||
The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, stock appreciation rights, restricted stock awards and equity awards subject to performance conditions which were not included in the calculation of diluted per share amounts (for periods where the Company had net income) because the effects would be anti-dilutive: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013 | June 30, 2013 | |||||||||||||||
Options to purchase shares of common stock and restricted stock awards | 1,714 | 3,180 | ||||||||||||||
Stock appreciation rights | 5,112 | 5,172 | ||||||||||||||
Total | 6,826 | 8,352 | ||||||||||||||
The following table sets forth (in thousands) the number of equity awards that are contingently issuable which were not included in the calculation of diluted shares (for periods where the Company had net income) as the required performance conditions had not been met as of June 30, 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013 | June 30, 2013 | |||||||||||||||
Options to purchase shares of common stock and restricted stock awards | 716 | 716 | ||||||||||||||
Restructuring_Charges
Restructuring Charges | 6 Months Ended |
Jun. 30, 2014 | |
Restructuring and Related Activities [Abstract] | ' |
Restructuring Charges | ' |
Restructuring Charges | |
During the three months ended December 31, 2012, the Company made a strategic business decision to change the production and release slates for some of its animated feature films. In connection with this decision, the Company committed to a restructuring plan to align its production and operating infrastructure. During the three months ended March 31, 2013, the Company implemented a restructuring plan to lower the cost structure, which resulted in a commitment to further reduce its workforce. As a result, the Company incurred restructuring charges attributable to employee-related costs (primarily related to severance and benefits) totaling $0.4 million for 12 employees, and $2.9 million for 59 employees for the three- and six-month periods ended June 30, 2013, respectively. Restructuring charges were not material for the six months ended June 30, 2014. These charges were recorded in costs of revenues and selling, general and administrative expenses in the Company's consolidated statements of operations. Payments made during the three months ended June 30, 2014 and 2013 totaled $0.7 million and $2.5 million, respectively, and during the six months ended June 30, 2014 and 2013 totaled $1.7 million and $4.5 million, respectively, related to these restructuring plans. As of June 30, 2014 and December 31, 2013, $0.2 million and $1.7 million, respectively, remained accrued as a liability. As of June 30, 2014, the Company's restructuring plans were substantially complete. The Company's restructuring plans are primarily attributable to its Feature Films reportable segment. |
Business_and_Basis_of_Presenta1
Business and Basis of Presentation (Policies) | 6 Months Ended | |
Jun. 30, 2014 | ||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' | |
Recent accounting pronouncements | ' | |
Recent Accounting Pronouncements | ||
In June 2014, the FASB issued an accounting standards update relating to the accounting for certain share-based awards. The accounting update states that, when the terms of an award provide that a performance target could be achieved after the requisite service period, the performance target should be treated as a performance condition that affects vesting and should not be reflected in the grant-date fair value. Companies are permitted to apply the guidance either prospectively to all awards granted or modified after the effective date or retrospectively to awards outstanding as of the beginning of the earliest annual period presented. The guidance is effective for the Company's fiscal year beginning January 1, 2016, with early adoption permitted. The Company adopted the new guidance upon issuance of the accounting standards update, which did not have an impact on its consolidated financial statements as the Company's existing accounting policy was already consistent with this guidance. | ||
In May 2014, the FASB issued an accounting standards update to provide companies with a single model for use in accounting for revenue from contracts with customers. Once it becomes effective, the new guidance will replace most existing revenue recognition guidance in U.S. GAAP, including industry-specific guidance. The core principle of the model is to recognize revenue when control of goods or services transfers to the customer and in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services that have transferred. Under current U.S. GAAP, the Company recognizes revenue when the risks and rewards of ownership transfer to the customer. In addition, the guidance requires improved disclosures to help users of financial statements better understand the nature, amount, timing and uncertainty of revenue that is recognized and the related cash flows. The guidance is effective for the Company's fiscal year beginning January 1, 2017, including interim periods within that fiscal year. Early adoption is not permitted. Companies are permitted to either apply the guidance retrospectively to all prior periods presented or, alternatively, apply the guidance in the year of adoption with the cumulative effect recognized at the date of initial application (referred to as the modified retrospective approach). The Company is in the process of determining the method of adoption, as well as evaluating the impact that the new standard will have on its consolidated financial statements. | ||
In July 2013, the FASB issued an accounting standards update relating to the presentation of unrecognized tax benefits. The accounting update requires companies to present a deferred tax asset net of related unrecognized tax benefits if there is a net operating loss or other tax carryforwards that would apply in settlement of the uncertain tax position. To the extent that an uncertain tax position would not be settled through a reduction of a net operating loss or other tax carryforwards, the unrecognized tax benefit will be presented as a liability. The guidance is effective for the Company's fiscal year beginning January 1, 2014, with early adoption permitted. The Company adopted the new guidance effective January 1, 2014. The adoption of this guidance did not have a material impact on the Company's consolidated financial statements. | ||
Consolidation | ' | |
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. The Company also consolidates less-than-wholly owned entities if the Company has a controlling financial interest in that entity. The Company uses the equity method of accounting for investments in companies in which it has a 50% or less ownership interest and has the ability to exercise significant influence. Such investments are presented as investments in unconsolidated entities on the Company's consolidated balance sheets (refer to Note 7 for further information of such investments). Prior to recording its share of net income or losses from equity method investees, investee financial statements are converted to U.S. GAAP. All significant intercompany accounts and transactions have been eliminated. Intra-entity profit related to transactions with equity method investees is eliminated until the amounts are ultimately realized. | ||
Consolidation, Variable Interest Entity | ' | |
In addition, the Company reviews its relationships with other entities to identify whether they are variable interest entities ("VIE") as defined by the Financial Accounting Standards Board ("FASB"), and to assess whether the Company is the primary beneficiary of such entity. If the determination is made that the Company is the primary beneficiary, then the entity is consolidated. | ||
Use of Estimates | ' | |
Use of Estimates | ||
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The most significant estimates made by management in the preparation of the financial statements relate to the following: | ||
• | ultimate revenues and ultimate costs of film, 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 the fair value of reporting units for purposes of testing goodwill for impairment; | |
• | determination of fair value of non-cash contributions to investments in unconsolidated entities; | |
• | useful lives of intangible assets; | |
• | product sales that will be returned and the amount of receivables that ultimately will be collected; | |
• | the potential outcome of future tax consequences of events that have been recognized in the Company's financial statements; | |
• | loss contingencies and contingent consideration arrangements; and | |
• | assumptions used in the determination of the fair value of equity-based awards for stock-based compensation or their probability of vesting. | |
Actual results could differ from those estimates. To the extent that there are material differences between these estimates and actual results, the Company's financial condition or results of operations will be affected. Estimates are based on past experience and other assumptions that management believes are reasonable under the circumstances, and management evaluates these estimates on an ongoing basis. | ||
Fair Value of Financial Instruments | ' | |
The fair value of cash and cash equivalents, accounts payable, advances and amounts outstanding under the revolving credit facility approximates carrying value due to the short-term maturity of such instruments and floating interest rates. As of June 30, 2014, the fair value of trade accounts receivable approximated carrying value due to the similarities in the initial and current discount rates. In addition, as of June 30, 2014, the fair value of the senior unsecured notes approximated carrying value as the current borrowing rate approximated the debt instrument's actual interest rate. The fair value of trade accounts receivable and the senior unsecured notes was determined using significant unobservable inputs by performing a discounted cash flow analysis and using current discount rates as appropriate for each type of instrument. | ||
The Company has short-term money market investments which are classified as cash and cash equivalents on the consolidated balance sheets. The fair value of these investments at June 30, 2014 and December 31, 2013 was measured based on quoted prices in active markets. |
Acquisitions_Tables
Acquisitions (Tables) (AwesomenessTV, Inc. [Member]) | 6 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
AwesomenessTV, Inc. [Member] | ' | ||||||||
Business Acquisition [Line Items] | ' | ||||||||
Schedule of total consideration for business combination | ' | ||||||||
The following table outlines the components of consideration for the transaction (in thousands): | |||||||||
As of | |||||||||
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 final allocation of the purchase price (in thousands): | |||||||||
As of | |||||||||
May 3, 2013(1) | |||||||||
Cash and cash equivalents | $ | 1,340 | |||||||
Trade receivables(2) | 1,279 | ||||||||
Prepaid and other assets | 434 | ||||||||
Production costs | 612 | ||||||||
Property, plant and equipment | 183 | ||||||||
Intangible assets | 12,900 | ||||||||
Total identified assets acquired | 16,748 | ||||||||
Accounts payable | 655 | ||||||||
Deferred revenue | 2,057 | ||||||||
Deferred tax liabilities, net | 3,765 | ||||||||
Total liabilities assumed | 6,477 | ||||||||
Net identified assets acquired | 10,271 | ||||||||
Goodwill(3) | 118,189 | ||||||||
Total consideration | $ | 128,460 | |||||||
____________________ | |||||||||
-1 | Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million. | ||||||||
-2 | Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible. | ||||||||
(3) | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. | ||||||||
Business acquisition, pro forma information | ' | ||||||||
The following table presents (in thousands, except per share data) pro forma results of the Company as though ATV had been acquired as of January 1, 2012 (the beginning of the prior annual reporting period based on the period in which the acquisition occurred). | |||||||||
Three Months Ended | Six Months Ended | ||||||||
June 30, 2013 | June 30, 2013 | ||||||||
Revenues | $ | 213,984 | $ | 348,905 | |||||
Net income attributable to DreamWorks Animation SKG, Inc. | $ | 22,443 | $ | 26,340 | |||||
Basic net income per share | $ | 0.27 | $ | 0.31 | |||||
Diluted net income per share | $ | 0.27 | $ | 0.31 | |||||
Film_and_Other_Inventory_Costs1
Film and Other Inventory Costs (Tables) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Film Costs [Abstract] | ' | |||||||
Film, television, live performance and other inventory costs | ' | |||||||
Film, television, live performance and other inventory costs consist of the following (in thousands): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
In release, net of amortization: | ||||||||
Feature films | $ | 443,929 | $ | 285,238 | ||||
Television series and specials | 55,527 | 58,631 | ||||||
In production: | ||||||||
Feature films | 305,295 | 474,609 | ||||||
Television series and specials | 49,937 | 15,332 | ||||||
In development: | ||||||||
Feature films | 108,443 | 75,498 | ||||||
Television series and specials | 165 | 1,500 | ||||||
Product inventory and other(1) | 16,623 | 32,678 | ||||||
Total film, television, live performance and other inventory costs, net | $ | 979,919 | $ | 943,486 | ||||
____________________ | ||||||||
(1) | This category includes $8.8 million and $24.8 million of capitalized live performance costs as of June 30, 2014 and December 31, 2013, respectively. In addition, as of June 30, 2014 and December 31, 2013, this category includes $7.7 million and $7.9 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market. |
Intangible_Assets_Tables
Intangible Assets (Tables) | 6 Months Ended | |||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ' | |||||||||||||||||
Schedule of definite-lived assets | ' | |||||||||||||||||
In addition, intangible assets were comprised of definite-lived intangible assets as follows (in thousands, unless otherwise noted): | ||||||||||||||||||
Weighted Average Estimated Useful Life (in years) | Gross | Accumulated Amortization | Impact of Foreign Currency Translation | Net | ||||||||||||||
As of June 30, 2014: | ||||||||||||||||||
Character rights | 13.9 | $ | 99,000 | $ | (11,994 | ) | $ | 3,003 | $ | 90,009 | ||||||||
Distribution rights | 11.2 | 30,000 | — | — | 30,000 | |||||||||||||
Programming content | 2 | 11,200 | (6,533 | ) | — | 4,667 | ||||||||||||
Trademarks and trade names | 10 | 1,410 | (145 | ) | — | 1,265 | ||||||||||||
Other intangibles | 4.4 | 2,700 | (403 | ) | — | 2,297 | ||||||||||||
Total | $ | 144,310 | $ | (19,075 | ) | $ | 3,003 | $ | 128,238 | |||||||||
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 | |||||||||
Schedule of expected amortization | ' | |||||||||||||||||
The Company expects to record amortization over the next five fiscal years as follows (in thousands): | ||||||||||||||||||
2015 | $ | 12,260 | ||||||||||||||||
2016 | 11,168 | |||||||||||||||||
2017 | 11,588 | |||||||||||||||||
2018 | 11,515 | |||||||||||||||||
2019 | 11,130 | |||||||||||||||||
Total | $ | 57,661 | ||||||||||||||||
Investments_in_Unconsolidated_1
Investments in Unconsolidated Entities (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Investments in Unconsolidated Entities [Abstract] | ' | |||||||||||||||
Schedule of cost and equity method investments | ' | |||||||||||||||
These investments are classified as investments in unconsolidated entities in the consolidated balance sheets and consist of the following (in thousands, unless otherwise indicated): | ||||||||||||||||
Ownership | ||||||||||||||||
Percentage at | June 30, | December 31, | ||||||||||||||
June 30, 2014 | 2014 | 2013 | ||||||||||||||
Oriental DreamWorks Holding Limited | 45.45% | $ | 16,645 | $ | 16,389 | |||||||||||
All Other | 17.5%-50.0% | 3,642 | 3,140 | |||||||||||||
Total equity method investments | 20,287 | 19,529 | ||||||||||||||
Total cost method investments | 29,013 | 19,013 | ||||||||||||||
Total investments in unconsolidated entities | $ | 49,300 | $ | 38,542 | ||||||||||||
Schedule of losses from equity method investments | ' | |||||||||||||||
(Loss) income from equity method investees consist of the following (in thousands): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Oriental DreamWorks Holding Limited(1) | $ | (2,394 | ) | $ | (957 | ) | $ | (4,604 | ) | $ | (957 | ) | ||||
All Other | (1,073 | ) | (372 | ) | (2,123 | ) | (372 | ) | ||||||||
(Loss) income from equity method investees | $ | (3,467 | ) | $ | (1,329 | ) | $ | (6,727 | ) | $ | (1,329 | ) | ||||
____________________ | ||||||||||||||||
(1) | The Company currently records its share of ODW results on a one-month lag. Accordingly, the Company's consolidated financial statements include its share of losses incurred by ODW from December 1, 2013 to May 31, 2014. | |||||||||||||||
Schedule of differences in venture-level equity and investment in unconsolidated entity | ' | |||||||||||||||
The following are the differences between the Company's venture-level equity and the balance of its investment in ODW (in thousands): | ||||||||||||||||
June 30, 2014 | ||||||||||||||||
Company's venture-level equity | $ | 40,997 | ||||||||||||||
Technology and intellectual property licenses(1) | (17,042 | ) | ||||||||||||||
Other(2) | (7,310 | ) | ||||||||||||||
Total ODW investment recorded | $ | 16,645 | ||||||||||||||
____________________ | ||||||||||||||||
-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) | 6 Months Ended | |||||||
Jun. 30, 2014 | ||||||||
Payables and Accruals [Abstract] | ' | |||||||
Schedule of accrued liabilities | ' | |||||||
Accrued liabilities consist of the following (in thousands): | ||||||||
June 30, | December 31, | |||||||
2014 | 2013 | |||||||
Employee compensation | $ | 28,571 | $ | 65,625 | ||||
Participations and residuals | 46,495 | 50,690 | ||||||
Contingent consideration(1) | 92,691 | 97,545 | ||||||
Interest payable | 7,958 | 7,849 | ||||||
Income taxes payable | 7,494 | 118 | ||||||
Deferred rent | 10,793 | 8,114 | ||||||
Other accrued liabilities | 38,315 | 33,727 | ||||||
Total accrued liabilities | $ | 232,317 | $ | 263,668 | ||||
____________________ | ||||||||
(1) | Primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 3 for further information). |
Deferred_Revenue_and_Other_Adv1
Deferred Revenue and Other Advances (Tables) | 6 Months Ended | |||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||
Deferred Revenue Disclosure [Abstract] | ' | |||||||||||||||||||||||
Summary of deferred revenue and other advances included in the consolidated balance sheets | ' | |||||||||||||||||||||||
The following is a summary of deferred revenue and other advances included in the consolidated balance sheets as of June 30, 2014 and December 31, 2013 and the related amounts earned and recorded either as revenue in the consolidated statements of operations or recorded as an offset to other costs (as described below) for the three- and six-month periods ended June 30, 2014 and 2013 (in thousands): | ||||||||||||||||||||||||
Amounts Earned | ||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
June 30, | December 31, | June 30, | June 30, | |||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Deferred Revenue | $ | 8,673 | $ | 14,578 | $ | 8,628 | $ | 5,741 | $ | 16,265 | $ | 13,473 | ||||||||||||
Strategic Alliance/Development Advances(1) | 4,167 | 1,667 | 8,229 | 6,816 | 15,367 | 15,890 | ||||||||||||||||||
Other(2) | 22,242 | 20,180 | 6,228 | 23,865 | 26,125 | 28,617 | ||||||||||||||||||
Total deferred revenue and other advances | $ | 35,082 | $ | 36,425 | ||||||||||||||||||||
____________________ | ||||||||||||||||||||||||
(1) | Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended June 30, 2014 and 2013, $3.5 million and $2.7 million, respectively, and $5.9 million and $7.9 million for the six months ended June 30, 2014 and 2013, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended June 30, 2014 and 2013, of the total amounts earned, $2.5 million and $0.7 million, respectively, and for the six months ended June 30, 2014 and 2013, $3.5 million and $1.2 million, respectively, were recorded as a reduction to other assets. During the six months ended June 30, 2014 and 2013, $0.5 million and $1.3 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended June 30, 2014 and 2013, of the total amounts earned, $0.5 million and $0.6 million, respectively, and for the six months ended June 30, 2014 and 2013, $1.6 million and $1.0 million, respectively, were recorded as a reduction to operating expenses. | |||||||||||||||||||||||
(2) | Of the total amounts earned, for the six months ended June 30, 2014, $14.0 million was recorded as a reduction to film and other inventory costs. |
Financing_Arrangements_Tables
Financing Arrangements (Tables) | 6 Months Ended | |||||||||||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||||||||||
Line of Credit Facility [Abstract] | ' | |||||||||||||||||||||||||||
Schedule of financing arrangements | ' | |||||||||||||||||||||||||||
The following table summarizes information associated with the Company's financing arrangements (in thousands, except percentages): | ||||||||||||||||||||||||||||
Interest Expense | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
Balance Outstanding at | Maturity Date | June 30, | June 30, | |||||||||||||||||||||||||
June 30, | 31-Dec-13 | Interest Rate at | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||||
2014 | 30-Jun-14 | |||||||||||||||||||||||||||
Senior Unsecured Notes | $ | 300,000 | $ | 300,000 | Aug-20 | 6.88% | $ | 2,849 | N/A | $ | 5,083 | N/A | ||||||||||||||||
Revolving Credit Facility | $ | 100,000 | $ | — | Aug-17 | 2.70% | $ | 466 | $ | 215 | $ | 841 | $ | 435 | ||||||||||||||
____________________ | ||||||||||||||||||||||||||||
N/A: Not applicable |
Income_Taxes_Tables
Income Taxes (Tables) | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ' | |||||||||||
Schedule of effective income tax rate reconciliation | ' | |||||||||||
Set forth below is a reconciliation of the components that caused the Company's provision/benefit for income taxes (including the income statement line item "Decrease (increase) in income tax benefit payable to former stockholder") to differ from amounts computed by applying the U.S. Federal statutory rate of 35% for the three and six months ended June 30, 2014 and 2013. | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2014 | 2013(4) | 2014 | 2013(4) | |||||||||
Provision for income taxes (combined with decrease/increase in income tax benefit payable to former stockholder)(1) | ||||||||||||
U.S. Federal statutory rate | 35 | % | 35 | % | 35 | % | 35 | % | ||||
U.S. state taxes, net of Federal benefit | 0.5 | (1.7 | ) | 1.4 | (1.9 | ) | ||||||
Export sales exclusion/manufacturer's deduction(2) | 15.4 | (0.7 | ) | 3.9 | 0.8 | |||||||
Research and development credit(2) | — | (1.8 | ) | — | (6.1 | ) | ||||||
Federal energy tax credit(3) | — | (2.0 | ) | — | (2.1 | ) | ||||||
Executive compensation | (39.4 | ) | 3.2 | (7.6 | ) | 3.2 | ||||||
Non-controlling interests | 5.8 | — | 1.1 | — | ||||||||
Change in fair value of contingent consideration | (2.5 | ) | — | (1.5 | ) | — | ||||||
Losses from an equity method investee | (19.0 | ) | — | (3.5 | ) | — | ||||||
Other | (1.8 | ) | — | (1.0 | ) | 0.1 | ||||||
Effective tax rate (combined with decrease/increase in income tax benefit payable to former stockholder)(1) | (6.0 | )% | 32 | % | 27.8 | % | 29 | % | ||||
Less: change in income tax benefit payable to former stockholder(1): | ||||||||||||
U.S. state taxes, net of Federal benefit | 0.5 | — | 0.1 | — | ||||||||
Export sales exclusion/manufacturer's deduction(2) | (15.9 | ) | 0.4 | (3.9 | ) | (1.0 | ) | |||||
Imputed interest on payable to former stockholder | 3.1 | (1.5 | ) | 0.6 | (1.6 | ) | ||||||
Other | 1 | — | — | — | ||||||||
Total change in income tax benefit payable to former stockholder(1) | (11.3 | )% | (1.1 | )% | (3.2 | )% | (2.6 | )% | ||||
Effective tax rate | (17.3 | )% | 30.9 | % | 24.6 | % | 26.4 | % | ||||
____________________ | ||||||||||||
(1) | As a result of a partial increase in the tax basis of the Company's tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of the Company's 2004 initial public offering, the Company may pay reduced tax amounts to the extent it generates sufficient taxable income in the future. The Company is obligated to remit to an affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax, California franchise tax and certain other related tax benefits. Refer to the Company's 2013 Form 10-K for a more detailed description. | |||||||||||
(2) | The American Taxpayer Relief Act of 2012 (the "Act"), enacted on January 2, 2013, included extensions to many expiring corporate income tax provisions. The Act included a two-year extension of research and development credits and other federal tax incentives, which were to be retroactively applied beginning with January 1, 2012 and ending on December 31, 2013. The Company recognized the effects of the retroactive changes in its results for the three months ended March 31, 2013 (the period of enactment). | |||||||||||
(3) | The Company's policy for accounting for investment tax credits is to recognize the income tax benefit in the year that the credit is generated. | |||||||||||
(4) | Certain reclassifications have been made to the prior period presentation to conform to current period presentation. |
Stockholders_Equity_and_Noncon1
Stockholders' Equity and Non-controlling Interests (Tables) | 6 Months Ended | |||||||||||
Jun. 30, 2014 | ||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||
Schedule of stockholders equity and non-controlling interest | ' | |||||||||||
The following table presents the changes in equity for the six-month periods ended June 30, 2014 and 2013 (in thousands): | ||||||||||||
DreamWorks Animation SKG, Inc. Stockholders' Equity | Non-controlling Interests | Total Equity | ||||||||||
Balance as of December 31, 2013 | $ | 1,404,795 | $ | 1,224 | $ | 1,406,019 | ||||||
Proceeds from stock option exercises | 261 | — | 261 | |||||||||
Stock-based compensation | 15,989 | — | 15,989 | |||||||||
Purchase of treasury shares | (1,751 | ) | — | (1,751 | ) | |||||||
Foreign currency translation adjustments | 695 | — | 695 | |||||||||
Distributions to non-controlling interest holder | — | (143 | ) | (143 | ) | |||||||
Net loss | (58,323 | ) | (21 | ) | (58,344 | ) | ||||||
Balance as of June 30, 2014 | $ | 1,361,666 | $ | 1,060 | $ | 1,362,726 | ||||||
Balance as of December 31, 2012 | $ | 1,345,616 | $ | 630 | $ | 1,346,246 | ||||||
Stock-based compensation | 18,224 | — | 18,224 | |||||||||
Purchase of treasury shares | (25,685 | ) | — | (25,685 | ) | |||||||
Foreign currency translation adjustments | (2,596 | ) | — | (2,596 | ) | |||||||
Distributions to non-controlling interest holder | — | (45 | ) | (45 | ) | |||||||
Net income | 27,830 | 532 | 28,362 | |||||||||
Balance as of June 30, 2013 | $ | 1,363,389 | $ | 1,117 | $ | 1,364,506 | ||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | |||||||||||||||
Schedule of impact of stock options and restricted stock awards on net income | ' | |||||||||||||||
The impact of stock options (including stock appreciation rights) and restricted stock awards on net income (excluding amounts capitalized) for the three- and six-month periods ended June 30, 2014 and 2013, respectively, were as follows (in thousands): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total stock-based compensation | $ | 3,112 | $ | 5,762 | $ | 8,421 | $ | 9,837 | ||||||||
Tax impact(1) | 187 | (1,844 | ) | (2,341 | ) | (2,853 | ) | |||||||||
Reduction in net income, net of tax | $ | 3,299 | $ | 3,918 | $ | 6,080 | $ | 6,984 | ||||||||
____________________ | ||||||||||||||||
(1) | Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item "Decrease/increase in income tax benefit payable to former stockholder" (see Note 11). | |||||||||||||||
Schedule of number and weighted average grant date fair value of equity awards granted | ' | |||||||||||||||
The following table sets forth the number and weighted average grant-date fair value of equity awards granted during the three- and six-month periods ended June 30, 2014 and 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
Number | Weighted | Number | Weighted | |||||||||||||
Granted | Average | Granted | Average | |||||||||||||
Grant-Date | Grant-Date | |||||||||||||||
Fair Value | Fair Value | |||||||||||||||
(in thousands) | ||||||||||||||||
2014 | ||||||||||||||||
Restricted stock and restricted stock units | 235 | $ | 25.21 | 459 | $ | 27.5 | ||||||||||
2013 | ||||||||||||||||
Restricted stock and restricted stock units | 166 | $ | 21.49 | 427 | $ | 18.67 | ||||||||||
Reportable_Segments_Tables
Reportable Segments (Tables) | 6 Months Ended | |||||||||||||||||||
Jun. 30, 2014 | ||||||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||||||
Schedule of segment reporting 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): | ||||||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||||||
Revenues | ||||||||||||||||||||
Feature Films | $ | 69,686 | $ | 172,921 | $ | 179,722 | $ | 251,446 | ||||||||||||
Television Series and Specials | 19,950 | 21,131 | 37,919 | 40,499 | ||||||||||||||||
Consumer Products | 18,533 | 15,609 | 30,661 | 43,113 | ||||||||||||||||
All Other | 14,108 | 3,775 | 21,216 | 13,026 | ||||||||||||||||
Total revenues | $ | 122,277 | $ | 213,436 | $ | 269,518 | $ | 348,084 | ||||||||||||
Gross profit(1) | ||||||||||||||||||||
Feature Films | $ | 23,902 | $ | 68,052 | $ | (1,526 | ) | $ | 93,983 | |||||||||||
Television Series and Specials | 1,220 | 6,762 | 6,979 | 11,679 | ||||||||||||||||
Consumer Products | 7,308 | 5,046 | 13,351 | 23,494 | ||||||||||||||||
All Other | 2,315 | 300 | 2,493 | 131 | ||||||||||||||||
Total gross profit | $ | 34,745 | $ | 80,160 | $ | 21,297 | $ | 129,287 | ||||||||||||
____________________ | ||||||||||||||||||||
(1) | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes. | |||||||||||||||||||
Schedule of goodwill | ' | |||||||||||||||||||
The following table presents goodwill for each of the Company's reportable segments (in thousands): | ||||||||||||||||||||
Feature Films | Television Series and Specials | Consumer Products | All Other | Total | ||||||||||||||||
Balance as of December 31, 2013 | $ | 43,995 | $ | 6,111 | $ | 10,999 | $ | 118,617 | $ | 179,722 | ||||||||||
Measurement period adjustments related to the acquisition of ATV | — | — | — | (428 | ) | (428 | ) | |||||||||||||
Acquisitions | — | — | 1,300 | 9,073 | 10,373 | |||||||||||||||
Balance as of June 30, 2014 | $ | 43,995 | $ | 6,111 | $ | 12,299 | $ | 127,262 | $ | 189,667 | ||||||||||
Earnings_Per_Share_Data_Tables
Earnings Per Share Data (Tables) | 6 Months Ended | |||||||||||||||
Jun. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Computation of basic and diluted net income per share | ' | |||||||||||||||
The following table sets forth the computation of basic and diluted net (loss) income per share (in thousands, except per share amounts): | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Numerator: | ||||||||||||||||
Net (loss) income attributable to DreamWorks Animation SKG, Inc. | $ | (15,387 | ) | $ | 22,253 | $ | (58,323 | ) | $ | 27,830 | ||||||
Denominator: | ||||||||||||||||
Weighted average common shares and denominator for basic calculation: | ||||||||||||||||
Weighted average common shares outstanding | 84,658 | 83,634 | 84,624 | 84,204 | ||||||||||||
Less: Unvested restricted stock | (104 | ) | (110 | ) | (104 | ) | (110 | ) | ||||||||
Denominator for basic calculation | 84,554 | 83,524 | 84,520 | 84,094 | ||||||||||||
Weighted average effects of dilutive stock-based compensation awards: | ||||||||||||||||
Restricted stock awards | — | 1,009 | — | 804 | ||||||||||||
Denominator for diluted calculation | 84,554 | 84,533 | 84,520 | 84,898 | ||||||||||||
Net (loss) income per share—basic | $ | (0.18 | ) | $ | 0.27 | $ | (0.69 | ) | $ | 0.33 | ||||||
Net (loss) income per share—diluted | $ | (0.18 | ) | $ | 0.26 | $ | (0.69 | ) | $ | 0.33 | ||||||
Weighted average number of options used to purchase shares of common stock, stock appreciation rights, restricted stock awards and equity awards | ' | |||||||||||||||
The following table sets forth (in thousands) the weighted average number of options to purchase shares of common stock, stock appreciation rights, restricted stock awards and equity awards subject to performance conditions which were not included in the calculation of diluted per share amounts (for periods where the Company had net income) because the effects would be anti-dilutive: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013 | June 30, 2013 | |||||||||||||||
Options to purchase shares of common stock and restricted stock awards | 1,714 | 3,180 | ||||||||||||||
Stock appreciation rights | 5,112 | 5,172 | ||||||||||||||
Total | 6,826 | 8,352 | ||||||||||||||
Number of equity awards that are contingently issuable | ' | |||||||||||||||
The following table sets forth (in thousands) the number of equity awards that are contingently issuable which were not included in the calculation of diluted shares (for periods where the Company had net income) as the required performance conditions had not been met as of June 30, 2013: | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2013 | June 30, 2013 | |||||||||||||||
Options to purchase shares of common stock and restricted stock awards | 716 | 716 | ||||||||||||||
Business_and_Basis_of_Presenta2
Business and Basis of Presentation (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2014 | 3-May-13 | Jun. 30, 2014 | Jun. 30, 2014 | |
In Thousands, unless otherwise specified | Paramount [Member] | Fox [Member] | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | Income Approach Valuation Technique [Member] | AwesomenessTV, Inc. [Member] | |||
Distribution Arrangement [Member] | Distribution Arrangement [Member] | ||||||||
Business and Basis Of Presentation [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | |
Goodwill | $189,667 | $179,722 | ' | ' | $118,200 | $118,189 | [1],[2] | ' | ' |
Distribution arrangement, output term | ' | ' | ' | '5 years | ' | ' | ' | ' | |
Period after U.S. home video release that output term will terminate | ' | ' | ' | '1 year | ' | ' | ' | ' | |
Distribution arrangement, exploitation period | ' | ' | '16 years | ' | ' | ' | ' | ' | |
Discount rate | ' | ' | ' | ' | ' | ' | 35.00% | ' | |
Reporting unit, percentage of fair value in excess of carrying amount | ' | ' | ' | ' | ' | ' | ' | 12.00% | |
[1] | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. | ||||||||
[2] | Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million. |
Acquisitions_Details
Acquisitions (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | 20-May-14 | 3-May-13 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | 3-May-13 | Jun. 30, 2014 | 3-May-13 | Jun. 30, 2014 | |
Big Frame and Felix the Cat Rights [Member] | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | Adjustment [Member] | Sensitivity, Potential Change [Member] | Income Approach Valuation Technique [Member] | Income Approach Valuation Technique [Member] | Income Approach Valuation Technique [Member] | Income Approach Valuation Technique [Member] | ||||
business | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | Sensitivity, Potential Change [Member] | Sensitivity, Potential Change [Member] | |||||||||
AwesomenessTV, Inc. [Member] | AwesomenessTV, Inc. [Member] | ||||||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Number of business acquired | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Payments to Acquire Businesses, Gross | ' | ' | $33,600,000 | $33,460,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Identifiable intangible assets acquired | ' | ' | 22,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Cash and cash equivalents | ' | ' | ' | 1,340,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Trade receivables | ' | ' | ' | 1,279,000 | [1],[2] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Prepaid and other assets | ' | ' | ' | 434,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Production costs | ' | ' | ' | 612,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Property, plant and equipment | ' | ' | ' | 183,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Intangible assets | ' | ' | ' | 12,900,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total identified assets acquired | ' | ' | ' | 16,748,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable | ' | ' | ' | 655,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | 2,057,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liabilities, net | ' | ' | ' | 3,765,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Total liabilities assumed | ' | ' | ' | 6,477,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net identified assets acquired | ' | ' | ' | 10,271,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill | 189,667,000 | 179,722,000 | 10,400,000 | 118,189,000 | [1],[3] | ' | ' | 118,200,000 | ' | ' | ' | ' | ' | ' | ' |
Total consideration | ' | ' | ' | 128,460,000 | [1] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Decrease to goodwill | ' | ' | ' | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | |
Changes in fair value of estimated contingent consideration | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | |
Decrease in deferred tax liabilities | ' | ' | ' | ' | ' | ' | ' | ' | 400,000 | ' | ' | ' | ' | ' | |
Acquired receivables, gross contractual amounts due | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Acquired receivables deemed uncollectible | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Contingent consideration arrangement with former shareholders, term | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | |
Estimated Contingent consideration | ' | ' | ' | 95,000,000 | ' | ' | 91,800,000 | 96,500,000 | ' | ' | ' | ' | ' | ' | |
Discount rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.50% | 16.50% | 15.00% | 25.00% | |
Volatility rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 32.60% | 35.30% | 20.00% | 20.00% | |
Contingent Consideration, Fair Value After Change in Discount Rate, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 88,600,000 | ' | ' | 90,500,000 | ' | |
Contingent Consideration, Fair Value After Change in Volatility Rate, Amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 99,300,000 | ' | ' | 103,500,000 | ' | |
Probability adjusted earnings in 2014 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | |
Probability adjusted earnings in 2015 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 41,000,000 | ' | ' | ' | |
Maximum contingent consideration that may be earned | ' | ' | ' | ' | ' | ' | 117,000,000 | ' | ' | ' | ' | ' | ' | ' | |
Pro forma information, adjustments, decrease to income tax expense | ' | ' | ' | ' | ' | -1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
Pro forma information, adjustments, increase in amortization expense | ' | ' | ' | ' | $1,000,000 | $3,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | |
[1] | Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million. | ||||||||||||||
[2] | Gross contractual amounts due total $1.3 million and, of this amount, no amounts are deemed to be uncollectible. | ||||||||||||||
[3] | The goodwill resulting from the acquisition of ATV is not deductible for tax purposes. |
Acquisitions_Consideration_Tra
Acquisitions Consideration Transferred (Details) (AwesomenessTV, Inc. [Member], USD $) | 0 Months Ended | |||
In Thousands, unless otherwise specified | 3-May-13 | Jun. 30, 2014 | Dec. 31, 2013 | |
AwesomenessTV, Inc. [Member] | ' | ' | ' | |
Business Acquisition, Contingent Consideration [Line Items] | ' | ' | ' | |
Cash payment | $33,460 | ' | ' | |
Estimated contingent consideration | 95,000 | 91,800 | 96,500 | |
Total consideration | $128,460 | [1] | ' | ' |
[1] | Measurement period adjustments include a $0.9 million decrease in goodwill, which resulted from changes in the fair value of the estimated contingent consideration of $0.5 million, as well as a decrease to deferred tax liabilities of $0.4 million. |
Acquisitions_Pro_Forma_Informa
Acquisitions Pro Forma Information (Details) (AwesomenessTV, Inc. [Member], USD $) | 3 Months Ended | 6 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2013 |
AwesomenessTV, Inc. [Member] | ' | ' |
Business Acquisition [Line Items] | ' | ' |
Revenues | $213,984 | $348,905 |
Net income attributable to DreamWorks Animation SKG, Inc. | $22,443 | $26,340 |
Basic net income per share | $0.27 | $0.31 |
Diluted net income per share | $0.27 | $0.31 |
Film_and_Other_Inventory_Costs2
Film and Other Inventory Costs (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | |||
Film Costs [Line Items] | ' | ' | ' | ' | ||
In release, net of amortization, feature films | ' | $443,929,000 | ' | $285,238,000 | ||
In release, net of amortization, television series and specials | ' | 55,527,000 | ' | 58,631,000 | ||
In production, feature films | ' | 305,295,000 | ' | 474,609,000 | ||
In production, television series and specials | ' | 49,937,000 | ' | 15,332,000 | ||
In development, feature films | ' | 108,443,000 | ' | 75,498,000 | ||
In development, television series and specials | ' | 165,000 | ' | 1,500,000 | ||
Product inventory and other | ' | 16,623,000 | [1] | ' | 32,678,000 | [1] |
Total film, television, live performance and other inventory costs, net | ' | 979,919,000 | ' | 943,486,000 | ||
Capitalized live performance costs | ' | 8,800,000 | ' | 24,800,000 | ||
Release costs expected to be amortized over the next 12 months | ' | 51.00% | ' | ' | ||
Release costs expected to be amortized over three years | ' | 83.00% | ' | ' | ||
Estimated remaining cash flow period | '15 years | ' | ' | ' | ||
Impairment charge of film costs | ' | 57,100,000 | 0 | ' | ||
DreamWorks Animation and Classic Media [Member] | ' | ' | ' | ' | ||
Film Costs [Line Items] | ' | ' | ' | ' | ||
Physical inventory | ' | $7,700,000 | ' | $7,900,000 | ||
Impaired Film and Other Inventory Assets [Member] | ' | ' | ' | ' | ||
Film Costs [Line Items] | ' | ' | ' | ' | ||
Discount rate used in fair value measurement | 7.00% | ' | ' | ' | ||
[1] | This category includes $8.8 million and $24.8 million of capitalized live performance costs as of JuneB 30, 2014 and DecemberB 31, 2013, respectively. In addition, as of JuneB 30, 2014 and DecemberB 31, 2013, this category includes $7.7 million and $7.9 million, respectively, of physical inventory of certain DreamWorks Animation and Classic Media titles for distribution in the home entertainment market. |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2014 | Dec. 31, 2013 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' |
Indefinite-lived intangible assets | $69,200,000 | $49,500,000 |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Gross | 144,310,000 | 111,900,000 |
Accumulated amortization | -19,075,000 | -12,643,000 |
Impact of foreign currency translation | 3,003,000 | 1,754,000 |
Total | 128,238,000 | 101,011,000 |
Character Rights [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted average estimated useful life | '13 years 10 months 24 days | '13 years 10 months 24 days |
Gross | 99,000,000 | 99,000,000 |
Accumulated amortization | -11,994,000 | -8,663,000 |
Impact of foreign currency translation | 3,003,000 | 1,754,000 |
Total | 90,009,000 | 92,091,000 |
Distribution Rights [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted average estimated useful life | '11 years 2 months 12 days | ' |
Gross | 30,000,000 | ' |
Accumulated amortization | 0 | ' |
Impact of foreign currency translation | 0 | ' |
Total | 30,000,000 | ' |
Programming Content [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted average estimated useful life | '2 years | '2 years |
Gross | 11,200,000 | 11,200,000 |
Accumulated amortization | -6,533,000 | -3,733,000 |
Impact of foreign currency translation | 0 | 0 |
Total | 4,667,000 | 7,467,000 |
Trademarks and Trade Names [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted average estimated useful life | '10 years | '10 years |
Gross | 1,410,000 | 1,200,000 |
Accumulated amortization | -145,000 | -80,000 |
Impact of foreign currency translation | 0 | 0 |
Total | 1,265,000 | 1,120,000 |
Other Intangibles [Member] | ' | ' |
Finite-Lived Intangible Assets, Net [Abstract] | ' | ' |
Weighted average estimated useful life | '4 years 4 months 24 days | '2 years |
Gross | 2,700,000 | 500,000 |
Accumulated amortization | -403,000 | -167,000 |
Impact of foreign currency translation | 0 | 0 |
Total | $2,297,000 | $333,000 |
Amortization_Of_Intangible_Ass
Amortization Of Intangible Assets (Details) (USD $) | Jun. 30, 2014 |
In Thousands, unless otherwise specified | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ' |
2015 | $12,260 |
2016 | 11,168 |
2017 | 11,588 |
2018 | 11,515 |
2019 | 11,130 |
Total | $57,661 |
Investments_in_Unconsolidated_2
Investments in Unconsolidated Entities (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||||||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Apr. 03, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | All Other [Member] | All Other [Member] | All Other [Member] | All Other [Member] | Non-Cash Contributions [Member] | Non-Cash Contributions [Member] | Distribution Arrangement [Member] | Distribution Arrangement [Member] | Distribution Arrangement [Member] | Distribution Arrangement [Member] | ||||||
Maximum [Member] | Minimum [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | |||||||||||
Schedule of Cost and Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment, ownership percentage | ' | ' | ' | ' | ' | 45.45% | ' | 45.45% | ' | ' | 50.00% | 17.50% | ' | ' | ' | ' | ' | ' |
Total equity method investments | $20,287 | ' | $20,287 | ' | $19,529 | $16,645 | $16,389 | ' | $3,642 | $3,140 | ' | ' | ' | ' | ' | ' | ' | ' |
Total cost method investments | 29,013 | ' | 29,013 | ' | 19,013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investments in unconsolidated entities | 49,300 | ' | 49,300 | ' | 38,542 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenues (see Note 7 for related party amounts) | $122,277 | $213,436 | $269,518 | $348,084 | ' | ' | ' | ' | ' | ' | ' | ' | $7,800 | $7,800 | $1,300 | $13,000 | $2,000 | $13,000 |
Investments_in_Unconsolidated_3
Investments in Unconsolidated Entities Loss From Equity Investments (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Schedule of Income (Loss) From Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Loss from equity method investees | ($3,467) | ($1,329) | ($6,727) | ($1,329) | ||||
ODW Holding Limited [Member] | ' | ' | ' | ' | ||||
Schedule of Income (Loss) From Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Loss from equity method investees | -2,394 | [1] | -957 | [1] | -4,604 | [1] | -957 | [1] |
All Other [Member] | ' | ' | ' | ' | ||||
Schedule of Income (Loss) From Equity Method Investments [Line Items] | ' | ' | ' | ' | ||||
Loss from equity method investees | ($1,073) | ($372) | ($2,123) | ($372) | ||||
[1] | The Company currently records its share of ODW results on a one-month lag. Accordingly, the Company's consolidated financial statements include its share of losses incurred by ODW from December 1, 2013 to May 31, 2014. |
Investments_in_Unconsolidated_4
Investments in Unconsolidated Entities Basis Difference In Equity Investment (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Total investment recorded | $20,287 | $19,529 | |
ODW Holding Limited [Member] | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Company's venture-level equity | 40,997 | ' | |
Total investment recorded | 16,645 | 16,389 | |
ODW Holding Limited [Member] | Technology and Intellectual Property Licenses [Member] | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Basis differences | -17,042 | [1] | ' |
ODW Holding Limited [Member] | Other [Member] | ' | ' | |
Schedule of Equity Method Investments [Line Items] | ' | ' | |
Basis differences | ($7,310) | [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 | 6 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | |||||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Apr. 03, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
ODW Holding Limited [Member] | ODW Holding Limited [Member] | Distribution Arrangement [Member] | Distribution Arrangement [Member] | Distribution Arrangement [Member] | Distribution Arrangement [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | Non-Cash Contributions [Member] | Non-Cash Contributions [Member] | Non-Cash Contributions [Member] | Non-Cash Contributions [Member] | ||||||
ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | in-development_film_project | ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | ODW Holding Limited [Member] | |||||||||
Investments in and Advances to Affiliates [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity method investment, ownership percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 45.45% | 45.45% | ' | ' | ' | ' |
Equity method investment, cash contribution commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | ' | ' | ' | ' |
Cash contributions satisfied | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,600,000 | ' | ' | ' | ' | ' |
Estimated aggregate value of non-cash contributions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' |
Value of non-cash contributions satisfied | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 28,700,000 | ' | ' | ' | ' | ' |
Remaining cash contribution commitment to be paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 43,400,000 | ' | ' | ' | ' | ' |
Payment period for remaining cash contribution commitment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' | ' |
Number of in-development film projects | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' |
Value of consulting and training services rendered | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,000,000 | ' | ' | ' | ' | ' |
Revenues | 122,277,000 | 213,436,000 | 269,518,000 | 348,084,000 | ' | ' | ' | 1,300,000 | 13,000,000 | 2,000,000 | 13,000,000 | ' | ' | ' | 7,800,000 | ' | 7,800,000 |
Other operating income | -2,317,000 | -2,859,000 | -3,989,000 | -2,859,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,300,000 | -2,900,000 | -4,000,000 | -2,900,000 |
Trade accounts receivable, net of allowance for doubtful accounts | 146,991,000 | ' | 146,991,000 | ' | 130,744,000 | 7,100,000 | 3,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivable from distributors, net of allowance for doubtful accounts | $212,669,000 | ' | $212,669,000 | ' | $283,226,000 | $3,600,000 | $16,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accrued_Liabilities_Details
Accrued Liabilities (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | ||
Payables and Accruals [Abstract] | ' | ' | ||
Employee compensation | $28,571,000 | $65,625,000 | ||
Participations and residuals | 46,495,000 | 50,690,000 | ||
Contingent consideration | 92,691,000 | [1] | 97,545,000 | [1] |
Interest payable | 7,958,000 | 7,849,000 | ||
Income taxes payable | 7,494,000 | 118,000 | ||
Deferred rent | 10,793,000 | 8,114,000 | ||
Other accrued liabilities | 38,315,000 | 33,727,000 | ||
Total accrued liabilities | 232,317,000 | 263,668,000 | ||
Accrued participation and residual costs estimated to pay over the next 12 months | $23,900,000 | ' | ||
[1] | Primarily represents the Company's estimate of the amount of contingent consideration payable in connection with the acquisition of ATV (refer to Note 3 for further information). |
Deferred_Revenue_and_Other_Adv2
Deferred Revenue and Other Advances (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | ||||||
Deferred Revenue And Other Advances By Category [Line Items] | ' | ' | ' | ' | ' | |||||
Total deferred revenue and other advances | $35,082,000 | ' | $35,082,000 | ' | $36,425,000 | |||||
Deferred Revenue [Member] | ' | ' | ' | ' | ' | |||||
Deferred Revenue And Other Advances By Category [Line Items] | ' | ' | ' | ' | ' | |||||
Total deferred revenue and other advances | 8,673,000 | ' | 8,673,000 | ' | 14,578,000 | |||||
Deferred revenue and other advances, amounts earned | 8,628,000 | 5,741,000 | 16,265,000 | 13,473,000 | ' | |||||
Strategic Alliance/Development Advances [Member] | ' | ' | ' | ' | ' | |||||
Deferred Revenue And Other Advances By Category [Line Items] | ' | ' | ' | ' | ' | |||||
Total deferred revenue and other advances | 4,167,000 | [1] | ' | 4,167,000 | [1] | ' | 1,667,000 | [1] | ||
Deferred revenue and other advances, amounts earned | 8,229,000 | [1] | 6,816,000 | [1] | 15,367,000 | [1] | 15,890,000 | [1] | ' | |
Amount capitalized as offset to property, plant and equipment | 3,500,000 | 2,700,000 | 5,900,000 | 7,900,000 | ' | |||||
Amount capitalized as offset to other assets | 2,500,000 | 700,000 | 3,500,000 | 1,200,000 | ' | |||||
Amount capitalized as offset to prepaid expenses | ' | ' | 500,000 | 1,300,000 | ' | |||||
Amount recorded as an offset to operating expenses | 500,000 | 600,000 | 1,600,000 | 1,000,000 | ' | |||||
Other Advances [Member] | ' | ' | ' | ' | ' | |||||
Deferred Revenue And Other Advances By Category [Line Items] | ' | ' | ' | ' | ' | |||||
Total deferred revenue and other advances | 22,242,000 | [2] | ' | 22,242,000 | [2] | ' | 20,180,000 | [2] | ||
Deferred revenue and other advances, amounts earned | 6,228,000 | [2] | 23,865,000 | [2] | 26,125,000 | [2] | 28,617,000 | [2] | ' | |
Amount recorded as an offset of film and other inventory costs | ' | ' | $14,000,000 | ' | ' | |||||
[1] | Of the total amounts earned against the "Strategic Alliance/Development Advances," for the three months ended JuneB 30, 2014 and 2013, $3.5 million and $2.7 million, respectively, and $5.9 million and $7.9 million for the six months ended JuneB 30, 2014 and 2013, respectively, were capitalized as an offset to property, plant and equipment. Additionally, during the three months ended JuneB 30, 2014 and 2013, of the total amounts earned, $2.5 million and $0.7 million, respectively, and for the six months ended JuneB 30, 2014 and 2013, $3.5 million and $1.2 million, respectively, were recorded as a reduction to other assets. During the six months ended JuneB 30, 2014 and 2013, $0.5 million and $1.3 million, respectively, were recorded as a reduction to prepaid expenses. During the three months ended JuneB 30, 2014 and 2013, of the total amounts earned, $0.5 million and $0.6 million, respectively, and for the six months ended JuneB 30, 2014 and 2013, $1.6 million and $1.0 million, respectively, were recorded as a reduction to operating expenses. | |||||||||
[2] | Of the total amounts earned, for the six months ended JuneB 30, 2014, $14.0 million was recorded as a reduction to film and other inventory costs. |
Financing_Arrangements_Details
Financing Arrangements (Details) (USD $) | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Aug. 14, 2013 | Jun. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Revolving Credit Facility [Member] | Senior Unsecured Notes [Member] | Senior Unsecured Notes [Member] | Senior Unsecured Notes [Member] | Senior Unsecured Notes [Member] | ||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $300,000,000 | ' | ' | ' |
Senior unsecured notes | 300,000,000 | ' | 300,000,000 | ' | 300,000,000 | ' | ' | ' | ' | ' | ' | 300,000,000 | 300,000,000 | 300,000,000 |
Stated interest rate of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6.88% | 6.88% | 6.88% | ' |
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, Percent Redeemable, Certain Equity Offerings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 35.00% | ' |
Percentage of redeemable principal amount by Company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 106.88% | ' |
Line of credit facility, maximum borrowing capacity | ' | ' | ' | ' | ' | 400,000,000 | ' | 400,000,000 | ' | ' | ' | ' | ' | ' |
Line of credit, maximum borrowing capacity, potential increase | ' | ' | ' | ' | ' | ' | ' | 50,000,000 | ' | ' | ' | ' | ' | ' |
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% | ' | ' | ' | ' | ' | ' |
Maturity date | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15-Aug-20 | ' |
Revolving credit facility, amount outstanding | 100,000,000 | ' | 100,000,000 | ' | 0 | 100,000,000 | ' | 100,000,000 | ' | 0 | ' | ' | ' | ' |
Expiration date of revolving credit facility | ' | ' | ' | ' | ' | ' | ' | 1-Aug-17 | ' | ' | ' | ' | ' | ' |
Line of Credit Facility, Interest Rate at Period End | ' | ' | ' | ' | ' | 2.70% | ' | 2.70% | ' | ' | ' | ' | ' | ' |
Interest expense | ' | ' | ' | ' | ' | 466,000 | 215,000 | 841,000 | 435,000 | ' | ' | 2,849,000 | 5,083,000 | ' |
Interest costs incurred | 6,200,000 | 1,700,000 | 12,300,000 | 3,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest costs capitalized | $2,600,000 | $1,500,000 | $5,800,000 | $2,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Income_Taxes_Details
Income Taxes (Details) | 0 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Jan. 02, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |||||
Income Tax Benefit Payable To Former Stockholder [Line Items] | ' | ' | ' | ' | ' | ||||
U.S. Federal statutory rate | ' | 35.00% | [1] | 35.00% | [1],[2] | 35.00% | [1] | 35.00% | [1],[2] |
Effective tax rate | ' | -17.30% | [1] | 30.90% | [1],[2] | 24.60% | [1] | 26.40% | [1],[2] |
Percentage the company is obligated to remit to an affiliate of the former significant stockholder | ' | ' | ' | 85.00% | ' | ||||
Extension of research and development credits and other federal tax incentives, period | '2 years | ' | ' | ' | ' | ||||
Portion Including Payable to Former Stockholder [Member] | ' | ' | ' | ' | ' | ||||
Income Tax Benefit Payable To Former Stockholder [Line Items] | ' | ' | ' | ' | ' | ||||
U.S. state taxes, net of Federal benefit | ' | 0.50% | [1] | -1.70% | [1],[2] | 1.40% | [1] | -1.90% | [1],[2] |
Export sales exclusion/manufacturer's deduction | ' | 15.40% | [1],[3] | -0.70% | [1],[2],[3] | 3.90% | [1],[3] | 0.80% | [1],[2],[3] |
Research and development credit | ' | 0.00% | [1],[3] | -1.80% | [1],[2],[3] | 0.00% | [1],[3] | -6.10% | [1],[2],[3] |
Federal energy tax credit | ' | 0.00% | [1],[4] | -2.00% | [1],[2],[4] | 0.00% | [1],[4] | -2.10% | [1],[2],[4] |
Executive compensation | ' | -39.40% | [1] | 3.20% | [1],[2] | -7.60% | [1] | 3.20% | [1],[2] |
Non-controlling interests | ' | 5.80% | [1] | 0.00% | [1],[2] | 1.10% | [1] | 0.00% | [1],[2] |
Change in fair value of contingent consideration | ' | -2.50% | [1] | 0.00% | [1],[2] | -1.50% | [1] | 0.00% | [1],[2] |
Losses from an equity method investee | ' | -19.00% | [1] | 0.00% | [1],[2] | -3.50% | [1] | 0.00% | [1],[2] |
Other | ' | -1.80% | [1] | 0.00% | [1],[2] | -1.00% | [1] | 0.10% | [1],[2] |
Effective tax rate combined with decrease/increase in income tax benefit payable to former stockholder | ' | -6.00% | [1] | 32.00% | [1],[2] | 27.80% | [1] | 29.00% | [1],[2] |
Portion Payable to Former Stockholder [Member] | ' | ' | ' | ' | ' | ||||
Income Tax Benefit Payable To Former Stockholder [Line Items] | ' | ' | ' | ' | ' | ||||
U.S. state taxes, net of Federal benefit | ' | 0.50% | [1] | 0.00% | [1],[2] | 0.10% | [1] | 0.00% | [1],[2] |
Export sales exclusion/manufacturer's deduction | ' | -15.90% | [1],[3] | 0.40% | [1],[2],[3] | -3.90% | [1],[3] | -1.00% | [1],[2],[3] |
Imputed interest on payable to former stockholder | ' | 3.10% | [1] | -1.50% | [1],[2] | 0.60% | [1] | -1.60% | [1],[2] |
Other | ' | 1.00% | [1] | 0.00% | [1],[2] | 0.00% | [1] | 0.00% | [1],[2] |
Total change in income tax benefit payable to former stockholder | ' | -11.30% | [1] | -1.10% | [1],[2] | -3.20% | [1] | -2.60% | [1],[2] |
[1] | As a result of a partial increase in the tax basis of the Company's tangible and intangible assets attributable to transactions entered into by affiliates controlled by a former stockholder at the time of the Company's 2004 initial public offering, the Company may pay reduced tax amounts to the extent it generates sufficient taxable income in the future. The Company is obligated to remit to an affiliate of the former stockholder 85% of any realized cash savings in U.S. Federal income tax, California franchise tax and certain other related tax benefits. Refer to the Company's 2013 FormB 10-K for a more detailed description. | ||||||||
[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. |
Stockholders_Equity_and_Noncon2
Stockholders' Equity and Non-controlling Interests (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Share data in Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Class of Stock [Line Items] | ' | ' | ' | ' |
Value of shares authorized to be repurchased | ' | ' | $150,000,000 | ' |
Stock repurchase program, remaining authorized repurchase amount | ' | ' | 100,000,000 | ' |
Increase (Decrease) in Equity [Roll Forward] | ' | ' | ' | ' |
Total DreamWorks Animation SKG, Inc. stockholdersb equity, beginning of period | ' | ' | 1,404,795,000 | 1,345,616,000 |
Non-controlling interests, beginning of period | ' | ' | 1,224,000 | 630,000 |
Total equity, beginning of period | ' | ' | 1,406,019,000 | 1,346,246,000 |
Proceeds from stock option exercises | ' | ' | 261,000 | ' |
Stock-based compensation | ' | ' | 15,989,000 | 18,224,000 |
Purchase of treasury shares | ' | ' | -1,751,000 | -25,685,000 |
Foreign currency translation adjustments | 563,000 | -104,000 | 695,000 | -2,596,000 |
Distributions to non-controlling interest holder | ' | ' | -143,000 | -45,000 |
Net (loss) income attributable to DreamWorks Animation SKG, Inc. | -15,387,000 | 22,253,000 | -58,323,000 | 27,830,000 |
Less: Net (loss) income attributable to non-controlling interests | -541,000 | -5,000 | -21,000 | 532,000 |
Net (loss) income | -15,928,000 | 22,248,000 | -58,344,000 | 28,362,000 |
Total DreamWorks Animation SKG, Inc. stockholdersb equity, end of period | 1,361,666,000 | 1,363,389,000 | 1,361,666,000 | 1,363,389,000 |
Non-controlling interests, end of period | 1,060,000 | 1,117,000 | 1,060,000 | 1,117,000 |
Total equity | 1,362,726,000 | 1,364,506,000 | 1,362,726,000 | 1,364,506,000 |
Common Class A [Member] | ' | ' | ' | ' |
Class of Stock [Line Items] | ' | ' | ' | ' |
Stock repurchased during period, shares | ' | 0.5 | ' | 1.3 |
Stock repurchased during period, value | ' | $8,800,000 | ' | $25,000,000 |
Narrative_Details
Narrative (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' |
Stock-based compensation, allocation of recognized period costs, capitalized amount | $3.70 | $4 | $7.30 | $8.30 |
Stock-based compensation, nonvested awards, total compensation cost not yet recognized | $71.90 | ' | $71.90 | ' |
Stock-based compensation, nonvested awards, total compensation cost not yet recognized, period of recognition (in years) | ' | ' | '1 year 9 months 18 days | ' |
Impact_of_Stock_Options_and_Re
Impact of Stock Options and Restricted Stock Awards on Net Income (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' | ' | ' | ' | ||||
Total stock-based compensation | $3,112 | $5,762 | $8,421 | $9,837 | ||||
Tax impact | 187 | [1] | -1,844 | [1] | -2,341 | [1] | -2,853 | [1] |
Reduction in net income, net of tax | $3,299 | $3,918 | $6,080 | $6,984 | ||||
[1] | Tax impact is determined at the Company's combined effective tax rate, which includes the income statement line item "Decrease/increase in income tax benefit payable to former stockholder" (see Note 11). |
Number_and_Weighted_Average_Gr
Number and Weighted Average Grant Date Fair Value of Equity Awards Granted (Details) (Restricted Stock Units (RSUs) [Member], USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Restricted Stock Units (RSUs) [Member] | ' | ' | ' | ' |
Number of shares granted | 235 | 166 | 459 | 427 |
Weighted average grant date fair value (in dollars per share) | $25.21 | $21.49 | $27.50 | $18.67 |
Reportable_Segments_Details
Reportable Segments (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | $122,277 | $213,436 | $269,518 | $348,084 | ||||
Total gross profit | 34,745 | [1] | 80,160 | [1] | 21,297 | [1] | 129,287 | [1] |
Feature Films [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 69,686 | 172,921 | 179,722 | 251,446 | ||||
Total gross profit | 23,902 | [1] | 68,052 | [1] | -1,526 | [1] | 93,983 | [1] |
Television Series and Specials [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 19,950 | 21,131 | 37,919 | 40,499 | ||||
Total gross profit | 1,220 | [1] | 6,762 | [1] | 6,979 | [1] | 11,679 | [1] |
Consumer Products [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 18,533 | 15,609 | 30,661 | 43,113 | ||||
Total gross profit | 7,308 | [1] | 5,046 | [1] | 13,351 | [1] | 23,494 | [1] |
All Other [Member] | ' | ' | ' | ' | ||||
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ||||
Revenues | 14,108 | 3,775 | 21,216 | 13,026 | ||||
Total gross profit | $2,315 | [1] | $300 | [1] | $2,493 | [1] | $131 | [1] |
[1] | The Company defines segment profit as segment revenues less segment costs of revenues ("segment gross profit"). The Company's segment gross profit is equivalent to total gross profit (or loss) as presented on the consolidated statements of operations, which includes a reconciliation to consolidated (loss) income before income taxes. |
Reportable_Segments_Schedule_o
Reportable Segments Schedule of goodwill by segment (Details) (USD $) | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2014 |
Goodwill [Roll Forward] | ' |
Goodwill, beginning of period | $179,722 |
Measurement period adjustments related to the acquisition of ATV | -428 |
Acquisitions | 10,373 |
Goodwill, end of period | 189,667 |
Feature Films [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill, beginning of period | 43,995 |
Measurement period adjustments related to the acquisition of ATV | 0 |
Acquisitions | 0 |
Goodwill, end of period | 43,995 |
Television Series and Specials [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill, beginning of period | 6,111 |
Measurement period adjustments related to the acquisition of ATV | 0 |
Acquisitions | 0 |
Goodwill, end of period | 6,111 |
Consumer Products [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill, beginning of period | 10,999 |
Measurement period adjustments related to the acquisition of ATV | 0 |
Acquisitions | 1,300 |
Goodwill, end of period | 12,299 |
All Other [Member] | ' |
Goodwill [Roll Forward] | ' |
Goodwill, beginning of period | 118,617 |
Measurement period adjustments related to the acquisition of ATV | -428 |
Acquisitions | 9,073 |
Goodwill, end of period | $127,262 |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | Jun. 30, 2014 |
In Millions, unless otherwise specified | |
UMG [Member] | ' |
Related Party Transaction [Line Items] | ' |
Related Party Transaction, Cash Advance Received | $5 |
Fuhu Inc. [Member] | CFO's Family [Member] | ' |
Related Party Transaction [Line Items] | ' |
Related party transaction, cost method investment, ownership percentage | 3.00% |
Concentrations_of_Credit_Risk_
Concentrations of Credit Risk (Details) | 6 Months Ended | 12 Months Ended | 3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Accounts Receivable [Member] | Accounts Receivable [Member] | Paramount [Member] | Paramount [Member] | Paramount [Member] | Paramount [Member] | Fox [Member] | Fox [Member] | Fox [Member] | Fox [Member] | |
Netflix [Member] | Netflix [Member] | Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | Sales Revenue, Goods, Net [Member] | |
Credit Concentration Risk [Member] | Credit Concentration Risk [Member] | |||||||||
Concentration Risk [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Concentration risk, percentage | 58.00% | 49.00% | 27.00% | 47.00% | 27.00% | 51.00% | 30.00% | 28.00% | 21.00% | 18.00% |
Computation_of_Basic_and_Dilut
Computation of Basic and Diluted Net Income Per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
Earnings Per Share, Basic and Diluted [Line Items] | ' | ' | ' | ' |
Net (loss) income attributable to DreamWorks Animation SKG, Inc. | ($15,387) | $22,253 | ($58,323) | $27,830 |
Weighted average common shares outstanding (in shares) | 84,658 | 83,634 | 84,624 | 84,204 |
Less: Unvested restricted stock (in shares) | -104 | -110 | -104 | -110 |
Denominator for basic calculation (in shares) | 84,554 | 83,524 | 84,520 | 84,094 |
Denominator for diluted calculation (in shares) | 84,554 | 84,533 | 84,520 | 84,898 |
Net (loss) income per sharebbasic (in dollars per share) | ($0.18) | $0.27 | ($0.69) | $0.33 |
Net (loss) income per sharebdiluted (in dollars per share) | ($0.18) | $0.26 | ($0.69) | $0.33 |
Restricted Stock Awards and Units [Member] | ' | ' | ' | ' |
Earnings Per Share, Basic and Diluted [Line Items] | ' | ' | ' | ' |
Dilutive stock-based awards (in shares) | 0 | 1,009 | 0 | 804 |
Antidilutive_Securities_Detail
Antidilutive Securities (Details) (Stock Compensation Plan [Member]) | 3 Months Ended | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2013 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive securities | 6,826 | 8,352 |
Options to Purchase Shares of Common Stock and Restricted Stock Awards [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive securities | 1,714 | 3,180 |
Stock Appreciation Rights (SARs) [Member] | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Antidilutive securities | 5,112 | 5,172 |
Contingently_Issuable_Equity_A
Contingently Issuable Equity Awards (Details) (Options to Purchase Shares of Common Stock and Restricted Stock Awards [Member], Contingently Issuable Shares [Member]) | 3 Months Ended | 6 Months Ended |
In Thousands, unless otherwise specified | Jun. 30, 2013 | Jun. 30, 2013 |
Options to Purchase Shares of Common Stock and Restricted Stock Awards [Member] | Contingently Issuable Shares [Member] | ' | ' |
Contingently Issuable Equity Awards Excluded from Computation of Earnings Per Share [Line Items] | ' | ' |
Contingently issuable equity awards | 716 | 716 |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | Jun. 30, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 |
In Millions, unless otherwise specified | Employee Severance [Member] | Employee Severance [Member] | Employee Severance [Member] | Employee Severance [Member] | ||
employee | employee | |||||
Restructuring Cost and Reserve [Line Items] | ' | ' | ' | ' | ' | ' |
Restructuring charges | ' | ' | ' | $0.40 | ' | $2.90 |
Restructuring charges, employees affected | ' | ' | ' | 12 | ' | 59 |
Payments made for restructuring charges | ' | ' | 0.7 | 2.5 | 1.7 | 4.5 |
Restructuring reserve, remaining accrual | $0.20 | $1.70 | ' | ' | ' | ' |