DreamWorks Animation Reports Fourth Quarter and year-end 2011 Financial Results

GLENDALE, Calif., Feb. 28, 2012 /PRNewswire/ — DreamWorks Animation SKG, Inc. (Nasdaq: DWA) today announced financial results for its fourth quarter ended December 31, 2011. In the quarter, the Company reported total revenue of $219.0 million and net income of $24.3 million, or $0.29 per share on a fully diluted basis. For the twelve months ended December 31, 2011, the Company reported total revenue of $706.0 million and net income of $86.8 million, or $1.02 per share on a fully diluted basis.

“DreamWorks Animation’s two feature films in 2011 achieved a high level of commercial and critical success, as Kung Fu Panda 2 and Puss In Boots together reached $1.2 billion at the worldwide box office and each received an Academy Award® nomination for Best Animated Feature Film,” said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation. “After its initial weekend, Puss In Boots is off to an excellent start in its domestic home video release and we are now looking ahead to the next big event for the Company: the theatrical release of Madagascar 3 on June 8, 2012.”

Kung Fu Panda 2, which grossed approximately $665 million in worldwide box office, contributed $49.6 million of revenue in the quarter, driven primarily by its home entertainment performance. The film reached an estimated 5.1 million home entertainment units sold worldwide through the end of the fourth quarter, net of actual and estimated future returns.

Puss In Boots, which has grossed approximately $535 million in worldwide box office to date, contributed $23.8 million of revenue in the quarter, driven primarily by its performance at the worldwide box office as well as merchandising and licensing activities.

Megamind contributed $19.4 million of revenue in the quarter, driven primarily by international pay television. The film reached an estimated 5.0 million home entertainment units sold worldwide through the end of the fourth quarter, net of actual and estimated future returns.

Shrek Forever After and How to Train Your Dragon contributed $8.8 million and $7.7 million of revenue in the quarter, respectively, driven primarily by worldwide home entertainment and international television. Each film reached an estimated 9.7 million home entertainment units sold worldwide through the end of the fourth quarter, net of actual and estimated future returns.

Library and other items contributed approximately $109.7 million of revenue to the quarter, including $72.9 million of revenue attributable to non-film businesses.

Costs of revenue for the quarter equaled $159.4 million. Selling, general and administrative expenses totaled $26.0 million, including approximately $6.0 million of stock-based compensation expense.

The Company’s income tax expense for the fourth quarter was $9.7 million. The Company’s combined effective tax rate – the actual tax rate coupled with the effect of the Company’s tax sharing agreement with a former stockholder – was approximately 28.1% for the fourth quarter. The Company expects its 2012 full-year effective tax rate to be approximately 30.0%.

For the full year 2011, the Company repurchased approximately 0.9 million shares for $25 million. The Company has $125 million remaining under its current share repurchase authorization.

The Company’s full year 2012 results are expected to be driven primarily by the performance of Madagascar 3, which is scheduled to be released on June 8, 2012. The Company’s first quarter results are expected to be driven primarily by the international box office performance and domestic home video release of Puss In Boots.

Items related to the earnings press release for the fourth quarter of 2011 will be discussed in more detail on the Company’s earnings conference call later today.

Conference Call Information

DreamWorks Animation will host a conference call and webcast to discuss the results on Tuesday, February 28, 2012, at 4:30 p.m. (ET). Investors can access the call by dialing (800) 230-1059 in the U.S. and (612) 234-9959 internationally and identifying “DreamWorks Animation Earnings” to the operator. The call will also be available via live webcast at www.dreamworksanimation.com.

A replay of the conference call will be available shortly after the call ends on Tuesday, February 28, 2012. To access the replay, dial (800) 475-6701 in the U.S. and (320) 365-3844 internationally and enter 234240 as the conference ID number. Both the earnings release and archived webcast will be available on the Company’s website at www.dreamworksanimation.com.

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