DREAMWORKS ANIMATION SKG, INC.

ADJUSTED EXPENSE RECONCILIATION

(Unaudited)

Three Months Ended

Nine Months
Ended

September 30, 2015

September 30, 2015

 (in thousands) 

General and administrative - as reported

$                     73,118

$                   242,996

Reverse 2015 Restructuring Plan charges:

Employee-related termination costs⁽¹⁾

(2,350)

2,797

Relocation and other employee-related costs⁽²⁾

1,306

4,687

Lease obligations and related charges⁽³⁾

1,110

1,110

Accelerated depreciation and amortization charges⁽⁴⁾

-

20,132

Additional labor and other excess costs⁽⁵⁾

3,498

27,598

Total restructuring-related charges

3,564

56,324

Adjusted general and administrative

$                     69,554

$                   186,672

⁽¹⁾

Employee-related termination costs.    Employee-related termination costs consist of severance and benefits (including stock-based compensation) attributable to employees that were terminated in connection with the 2015 Restructuring Plan.

⁽²⁾

Relocation and other employee-related costs.    Relocation and other employee-related costs primarily consist of costs to relocate employees from our Northern California facility to our Southern California facility.

⁽³⁾

Lease obligations and related charges.    Lease obligations and related charges largely consist of remaining rent expense that we incurred prior to the commencement of the subleases of our Northern California facility.

⁽⁴⁾

Accelerated depreciation and amortization charges.    Accelerated depreciation and amortization charges consist of the incremental charges we incurred as a result of shortened estimated useful lives of certain property, plant and equipment due to the decision to exit our Northern California facility.

⁽⁵⁾

Additional labor and other excess costs.    Additional labor consists of costs related to excess staffing in order to execute the restructuring plans specifically related to changes in the feature film slate. These additional labor costs are incremental to our normal operating charges and are expensed as incurred. Other excess costs are those due to the closure of our Northern California facility and primarily relate to costs that we incurred to continue to operate the facility until we begin to receive amounts under sublease arrangements.

⁽⁶⁾

Tax Impact.    Prior to the quarter ended September 30, 2015, the tax impact of non-GAAP adjustments was calculated using our combined effective tax rate for each respective period. However, our combined effective tax rate for the three months ended September 30, 2015 was impacted by a reduction in the Company's estimated loss before income taxes for the year ending December 31, 2015, as well as an additional taxable gain. As a result, the Company's combined effective tax rate for the three months ended September 30, 2015 is not representative of its expected annual tax rate, and thus, tax impact for the three- and nine-month periods ended September 30, 2015 was calculated at the Company's estimated annual combined effective tax rate of (39.0)%.