ANNUAL REPORT 2004 REPORT ANNUAL dreamworks animation skg annual report 2004 DreamWorks Animation is devoted to producing high-quality family about us entertainment through the use of computer-generated (CG) animation. corporate information Utilizing world-class creative talent and technological capabilities, our goal is to make two CG animated feature fi lms a year that deliver great stories, breathtaking visual imagery and a sensibility that appeals to both children and adults. In 2004 we released two animated hits, Shrek 2 and Shark Tale, which collectively grossed over $1.2 billion dollars in worldwide box offi ce. Shrek 2 also became the highest grossing animated fi lm of all time. Our next CG animated feature fi lm, Madagascar, as well as the fi lm Wallace & Gromit: Curse of the Were Rabbit, are scheduled for release in 2005. board of directors transfer agent and registrar Paul G. Allen The Bank of New York Chairman of Vulcan, Inc. Shareholder Relations Department P.O. Box 11258 Lewis W. Coleman Church Street Station Former President of New York, NY 10286 Gordon and Betty Moore Foundation (800) 457-2983 Roger Enrico Chairman of DreamWorks Animation SKG, Inc. investor relations David Geffen Rich Sullivan Co-Founder of DreamWorks SKG [email protected] Mellody Hobson (818) 695-3900 President of Ariel Capital Management form 10-K Jeffrey Katzenberg A copy of our Form 10-K for fiscal year 2004, filed Chief Executive Officer of with the Securities and Exchange Commission, DreamWorks Animation SKG, Inc. is available upon request by contacting Nathan Myhrvold Investor Relations. Chief Executive Officer of Intellectual Ventures Howard Schultz stock listing Chairman and Chief Global Strategist of DreamWorks Animation SKG, Inc. Class A Common Starbucks Corporation Stock is listed on the New York Stock Exchange Meg Whitman under the symbol “DWA.” President and Chief Executive Officer of eBay Inc. annual stockholders’ meeting executive officers The Annual Meeting of Stockholders will be held June 22, 2005 at 8:00 am PDT at Shutters Hotel, Roger Enrico Santa Monica, CA. Chairman Jeffrey Katzenberg corporate governance guidelines Chief Executive Officer DreamWorks Animation’s Corporate Governance Guidelines are available on DreamWorks Animation’s corporate website at Ann Daly www.dreamworksanimation.com. You may obtain a copy of Chief Operating Officer DreamWorks Animation’s Corporate Governance Guidelines without charge through DreamWorks Animation’s corporate headquarters. Katherine Kendrick General Counsel and Corporate Secretary forward-looking statements Kristina Leslie This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Chief Financial Officer These statements are based on management’s current expectations or beliefs and are subject to uncertainty and changes in circumstances. corporate headquarters Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, 1000 Flower Street competitive, technological and/or regulatory factors, and other Glendale, CA 91201 risks and uncertainties affecting the operation of the business of DreamWorks Animation SKG, Inc. These risks and uncertainties include: audience acceptance of our films, our dependence on the success of a legal counsel limited number of releases each year, the increasing cost of producing Cravath, Swaine & Moore LLP and marketing feature films, piracy of motion pictures, the effect of rapid technological change or alternative forms of entertainment and Worldwide Plaza, 825 Eighth Avenue our need to protect our proprietary technology and enhance or develop New York, NY 10019 new technology. In addition, due to the uncertainties involved in the development and production of animated feature films, the release ww.curran-connors.com dates for the films described in this document may be delayed and the independent auditors voice talent may change. For a further list and description of such risks Ernst & Young LLP and uncertainties, see our filings with the Securities and Exchange 515 South Flower Street, #2300 Commission (SEC) including our annual report on Form 10-K for fiscal year 2004. DreamWorks Animation is under no obligation to, Los Angeles, CA 90071 and expressly disclaims any obligation to, update or alter its forward- looking statements, whether as a result of new information, future events, changes in assumptions or otherwise. ©2005 DreamWorks Animation SKG, Inc. All rights reserved. DreamWorks Animation and the DreamWorks Animation logo are registered trademarks of DreamWorks Animation SKG, Inc. All other names are trademarks of their respective owners. designed by curran & connors, inc. / w / inc. connors, & curran by designed 22-dreamworks04PR15368.indd-dreamworks04PR15368.indd 1 44/21/05/21/05 22:57:25:57:25 PPMM dear shareholders, This past year, DreamWorks when we say family entertainment we mean the entire Animation celebrated its tenth birth- family: children, parents and young adults. To us, these day. This particular anniversary was are not cartoons, they’re wonderful movies and like a milestone for us in several ways. any great fi lm they connect with audiences on many It was our fi rst year as a public com- different levels. pany, after successfully completing our IPO this past Making a CG animated feature is among the high- October. We also became the fi rst movie studio to pro- est forms of artistic collaboration. At DreamWorks, we duce and distribute two CG animated features in a single encourage our artists and creative teams to take risks, year. Shrek 2 proved that not all sequels are created to experiment and to think outside the box. But even equal, becoming not only the number one fi lm of 2004, the greatest ideas, the most advanced technology and but also the third highest grossing fi lm of all time. the best stories don’t ensure a successful movie. In the More over, Shark Tale became a real movie event and end, it all comes down to execution. To make a CG went on to be one of the top grossing fi lms of the year. animated fi lm takes hundreds of talented people— All in all, a pretty great way to celebrate a birthday! writers, artists, animators, producers, directors, tech- The success of Shrek 2 and Shark Tale helped to nology experts, administrative support teams and star further defi ne what we believe is our truly unique voice voice talent—all working together with a singular focus. in the marketplace. If I had to sum up what distinguishes This kind of completely unique filmmaking process DreamWorks Animation, I’d say we strive to tell great takes management discipline, hard work, a bit of luck, stories that are fun and comedic—told with a level of and most importantly experience. At DreamWorks, we sophistication and irreverence that appeals to a broad have assembled a world class team of talent and have audience. We intend for our animated movies to span given them a broad canvas and the latest tools with generations and capture the imagination of people which to execute their vision. regardless of their age. At DreamWorks Animation, 22-dream04PR15368_rrdR2.indd-dream04PR15368_rrdR2.indd 2 44/27/05/27/05 66:03:51:03:51 PPMM Which brings me to technology. In just ten short As you can probably tell, I am very proud of what years, the art of animation has been completely revolu- we’ve accomplished, not only this past year but since tionized by technological advancement. The dazzling our inception ten years ago. More importantly though, images made possible through computer generated I’d like to assure you that past laurels are not something imagery have been completely embraced by audiences, we care to rest upon. We are a team of passionate and our technology team is totally focused on new movie makers with an energetic, always-can-do-better ways to make our movies more unique. As with our point of view. With every movie, we will work to tell creative talent, I believe we have some of the best and better stories, dazzle with more engaging visuals, dis- brightest technology professionals in the business. They tribute and market our fi lms with ever greater impact keep us at the forefront of CG animation and are an and produce them with ever more effi ciency. integral part of our success. So as we begin our second decade, I look forward With great people, we can accomplish great things, to many more celebrations for our company, our won- not only for our audiences and our DreamWorks Anima- derfully creative team and our shareholders because tion team but for our shareholders as well. We have like the DreamWorks logo that features a boy fi shing demonstrated the ability to scale the business without from the moon, we believe that the sky is the limit. sacrifi cing quality by eclipsing $1.2 billion in worldwide box offi ce in 2004 with our two releases. As a result, sincerely, we have gained operating effi ciency at our studio and set our company on a path to generate real value for our shareholders. Our IPO also allowed us to substan- tially pay down debt and build a strong balance sheet. Without a doubt, our company’s performance in 2004 Jeffrey Katzenberg, was certainly a nice start for our new public company. Chief Executive Offi cer 22-dreamworks04PR15368.indd-dreamworks04PR15368.indd 3 44/21/05/21/05 33:08:41:08:41 PPMM directors & officers (above, from left to right) Paul G. Allen, Director · David Geffen, Director · Kristina Leslie, Chief Financial Officer · Katherine Kendrick, General Counsel and Corporate Secretary · Lewis W. Coleman, Director · Jeffrey Katzenberg, Chief Executive Officer and Director · Howard Schultz, Director · Mellody Hobson, Director · Ann Daly, Chief Operating Officer · Roger Enrico, Chairman of the Board · Nathan Myhrvold, Director · Meg Whitman, Director (not pictured) 22-dreamworks04PR15368.indd-dreamworks04PR15368.indd 4 44/21/05/21/05 33:09:29:09:29 PPMM UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.