DREAMWORKS ANIMATION SKG, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS 

(Unaudited)

 Nine Months Ended 

 September 30, 

2015

2014

 (in thousands) 

Operating activities

Net loss

$ (98,973)

$ (46,480)

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization and write-off of film and other inventory costs

304,797

298,096

Other impairments and write-offs

11,161

-

Amortization of intangible and other assets

13,602

10,516

Depreciation and amortization 

27,229

3,654

Amortization of deferred financing costs

1,704

865

Amortization of deferred gain on sale-leaseback transaction

(865)

-

Stock-based compensation expense 

16,190

8,387

Change in fair value of contingent consideration

-

(9,675)

Revenue earned against deferred revenue and other advances  

(63,012)

(43,143)

Income related to investment contributions

(4,856)

(6,662)

Loss from equity method investees

9,623

7,939

Deferred taxes, net 

1,597

(19,658)

Changes in operating assets and liabilities, net of the effects of acquisitions:

Restricted cash

25,244

-

Trade accounts receivable 

(64,922)

2,830

Receivables from distributors

38,844

(2,011)

Film and other inventory costs 

(286,321)

(354,003)

Prepaid expenses and other assets 

(45,809)

(21,145)

Accounts payable and accrued liabilities 

(31,112)

(46,553)

Payable to former stockholder 

13,549

1,770

Income taxes payable/receivable, net 

1,406

2,510

Deferred revenue and other advances 

124,410

72,117

Net cash used in operating activities 

(6,514)

(140,646)

Investing activities

Investments in unconsolidated entities

(2,298)

(18,154)

Purchases of property, plant and equipment 

(12,428)

(26,263)

Acquisitions of character and distribution rights

-

(51,000)

Acquisitions, net of cash acquired

-

(12,605)

Net cash used in investing activities 

(14,726)

(108,022)

Financing activities

Proceeds from stock option exercises

-

261

Deferred financing costs

(6,286)

-

Purchase of treasury stock 

(5,185)

(3,580)

Contingent consideration payment

(335)

-

Borrowings from revolving credit facility

420,405

215,000

Repayments of borrowings from revolving credit facility

(545,405)

(10,000)

Proceeds from lease financing obligation

199,203

-

Repayments of lease financing obligation

(1,378)

-

Capital contribution from non-controlling interest holder

15,000

-

Distributions to non-controlling interest holder

(979)

-

Net cash provided by financing activities 

75,040

201,681

Effect of exchange rate changes on cash and cash equivalents

868

586

Increase (decrease) in cash and cash equivalents 

54,668

(46,401)

Cash and cash equivalents at beginning of period

34,227

95,467

Cash and cash equivalents at end of period

$  88,895

$  49,066

Non-cash investing activities:

Intellectual property and technology licenses granted in exchange for equity interest

$    4,801

$    6,057

Services provided in exchange for equity interest

55

682

Total non-cash investing activities

$    4,856

$    6,739

Supplemental disclosure of cash flow information:

Cash paid during the period for income taxes, net of amounts refunded

$    3,798

$         70

Cash paid during the period for interest, net of amounts capitalized

$  24,123

$  14,039