February 1, 2006

DreamWorks Animation Begins New Distribution Deal With Paramount Pictures

GLENDALE, Calif., Feb. 1 /PRNewswire-FirstCall/ -- DreamWorks Animation SKG (NYSE: DWA) today announced that it will begin operating under its new seven-year distribution deal with Paramount Pictures for the rights to distribute DreamWorks Animation films in theatrical, home entertainment and television markets on a worldwide basis beginning with the company's next release, Over the Hedge. As previously announced, the new agreement was contingent on the closing of Paramount's acquisition of the company's previous distribution partner, DreamWorks Studios.

As disclosed in last month's announcement, Paramount Pictures will be responsible for the marketing and distribution of DreamWorks Animation films and will earn the same 8% distribution fee that had previously been paid to DreamWorks Studios. The new agreement with Paramount expires by the end of 2012, which is two years longer than the original distribution deal with DreamWorks Studios. As a result of the new deal, DreamWorks Animation received $75 million in cash which it has used towards the repayment of debt.

About DreamWorks Animation SKG

DreamWorks Animation is principally devoted to developing and producing computer generated, or CG, animated feature films. With world-class creative talent, a strong and experienced management team and advanced CG filmmaking technology and techniques, DreamWorks Animation makes high quality CG animated films meant for a broad movie-going audience. The company has theatrically released a total of nine animated feature films, including Antz, Shrek, Shrek 2, Shark Tale, Madagascar and Wallace & Gromit: Curse of the Were-Rabbit. DreamWorks Animation's newest release, Over the Hedge, opens in theaters May 19, 2006.

Caution Concerning Forward-Looking Statements

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding the expected benefits to DreamWorks Animation SKG, Inc. (the "Company") from the new distribution agreement with Paramount Studios, the Company's proposals and plans to promote upcoming movies with Paramount and its affiliates, and the Company's beliefs and expectations concerning performance of our current and future releases. These statements are based on current expectations, estimates, forecasts and projections about the Company's future relationship with Paramount, the industry in which the Company operates, management's beliefs and assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of the Company. For a description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission, including its annual report on Form 10-K for fiscal year 2004 and its quarterly reports on Form 10-Q for the first, second and third quarters of 2005. DreamWorks Animation is under no obligation to, 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.

SOURCE DreamWorks Animation SKG
-0- 02/01/2006
/CONTACT: Investors - Rich Sullivan of DreamWorks Animation Investor
Relations, +1-818-695-3900, or ir@dreamworksanimation.com ; or Media - Bob
Feldman of DreamWorks Animation Corporate Communications, +1-818-695-6677, or
bfeldman@dreamworksanimation.com /
/Web site: http://www.dreamworksanimation.com /

CO: DreamWorks Animation SKG; Paramount Pictures
ST: California

GV -- NYW092 --
8931 02/01/2006 08:56 EST http://www.prnewswire.com

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