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Dreamworks Animation SKG Inc DWA
Q4 2012 Earnings Call Transcript

Transcript Call Date 02/26/2013

Operator: Ladies and gentlemen, thank you for standing by and welcome to the DreamWorks Animation Quarter Four 2012 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later, there will be an opportunity for questions.

As a reminder, this conference is being recorded. You may access the AT&T Executive Replay Service at any time after 4.30 this afternoon and it will running through March 13 at midnight and you may access the replay service at any time by dialing 1-800-475-6701 and entering the access code of 279175. International participants may dial 320-365-3844 using. Those numbers again are 800-475-6701, International participants dial 1-320-365-3844. Please enter the access code 279175.

At this time, I would like to turn the conference over to our host from Dreamworks Animation, Mr. Rich Sullivan. Please go ahead.

Rich Sullivan - Deputy CFO: Thank you, and good afternoon, everybody. Welcome to DreamWorks Animation fourth quarter and full year 2012 earnings conference call. With me today is our Chief Executive Officer, Jeffrey Katzenberg; and our President and Chief Financial Officer, Lew Coleman. This call will begin with a brief discussion of the quarterly financials disclosed in today's press release, followed by an opportunity for you to ask questions. I'd like to remind everyone that the press release is available on our website at web address, www.dreamworksanimation.com.

Before we begin, we need to remind you that certain statements made on this call may constitute forward-looking statements. Forward-looking statements can vary materially from actual results and are subject to a number of risks and uncertainties including those contained in the Company's Annual and Quarterly reports, as well as in other filings with the SEC. I'd encourage all of you to review the risk factors listed in these documents. The Company undertakes no obligation to update any of its forward-looking statements.

With that, I'd like to now turn the call over to DreamWorks Animation's Chief Executive Officer, Jeffrey Katzenberg. Jeffrey?

Jeffrey Katzenberg - CEO and Director: Thanks, Rich. Good afternoon everyone and thank you for joining our call. Dreamworks Animation reported a loss of $83 million in the fourth quarter of 2012 and $36 million in the full year. This is primarily driven by several charges we took in the quarter, including an impairment of Rise of the Guardians and the number of write-offs associated with changes to our future release slate.

Lew will discuss the details of these changes and charges in a few minutes. Rise of the Guardians was released on November 21, 2012, it has grossed over $100 million at the domestic box office and over $300 million on a worldwide basis. With an unprecedented number of profitable Dreamworks branded CG films to have Guardians as a financial loss to the Company is certainly a disappointment. This is particularly true because of how proud we are of the movie itself.

The audience response to the film was strong, which is demonstrated by the fact that it delivered 4.2 times multiple off of its opening weekend and also garnered and A cinema score rating. Still Guardians did not reach the box office levels required of our films.

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