SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2011

SEGMENT INFORMATION

SEGMENT INFORMATION

21. SEGMENT INFORMATION

        FASB ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments. This guidance requires segmentation based on the Company's internal organization and reporting of revenue and operating income based upon internal accounting methods. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance. The Company's chief operating decision maker is the Company's Chairman and Chief Executive Officer. The Company's three segments are Feature Films, Commercials and Animation Studio. These segments are presented in the way the Company internally manages and monitors performance. The Company's reporting systems present various data for management to operate the business. However, certain expenses are not allocated to the various segments (primarily consisting of support staff salaries and benefits, fees for outside professional services, insurance costs, and utilities costs, all of which are included in Selling, general and administrative expenses), and thus a reconciliation is provided between the consolidated financial statements and the combined segments. Interest and other income are not allocated to the various segments, as the chief operating decision maker does not evaluate segment operations beyond the income (loss) from operations level.

        The types of products provided by each segment are summarized below:

Feature Films

        The Company is hired by studios and producers to provide digital effects for an in-process film or a project in the development stage. Typically, the Company enters into a fixed-price contract with the studio calling for a significant portion of the contract amount to be paid in advance, with progress payments made over the life of the project.

Commercials

        The Company is hired by advertising agencies, commercial directors and/or advertisers to provide visual effects and/or animation for all advertising media. Typically, the Company enters into a fixed-price contract with the advertising agency calling for a significant portion of the contract amount to be paid in the early stages of the project.

Animation Studio

        The Company's animation feature film business focuses on the development of original full-length, family-oriented CG animated feature films.

Corporate/Other

        The Company is the recipient of government stimulus financing, including cash, donations of land, building and equipment financing and tax incentives from multiple governmental entities (see further grant disclosure in Note 7). These grants are reflected in the Corporate/Other segment.

Discontinued Segment—Software

        During the year ended December 31, 2008, the Predecessor committed to a plan to sell its wholly-owned subsidiary, The Foundry, a visual effects software developer, which included the net assets relating to the Predecessor's compositing software product Nuke (collectively, the "Discontinued Operations"). See Note 23 for further discussion. The results of operations for the Discontinued Operations are excluded from the segment financial information.

        Segment financial information is as follows (in thousands):

	Successor									Predecessor
	For the Year Ended December 31, 2011			For the Year Ended December 31, 2010			For the Period from January 7 (the inception date) through December 31, 2009			For the Nine Months Ended September 30, 2009
Revenues:
Digital Production:
Feature Films	$	75,565		$	82,652		$	12,973		$	41,557
Commercials		20,106			19,207			2,609			6,803
Animation Studio		—			—			—			—
Corporate/Other		2,955			3,340			6,800			—
Total revenues		98,626			105,199			22,382			48,360
Costs and expenses:
Digital Production:
Feature Films		76,792			68,960			9,855			38,849
Commercials		19,094			15,711			2,357			6,597
Animation Studio		—			48			—			34
Corporate/Other		77,849			34,938			7,094			15,160
Total costs and expenses		173,735			119,657			19,306			60,640
Operating (loss) income:
Digital Production:
Feature Films		(1,227	)		13,692			3,118			2,708
Commercials		1,012			3,496			252			206
Animation Studio		—			(48	)		—			(34	)
Corporate/Other		(74,894	)		(31,598	)		(294	)		(15,160	)
Total operating (loss) income	$	(75,109	)	$	(14,458	)	$	3,076		$	(12,280	)
Revenues:
United States	$	80,632		$	91,623		$	22,382		$	48,360
Canada		17,994			13,576			—			—
Total	$	98,626		$	105,199		$	22,382		$	48,360

        The Feature Films and Commercials segments have historically represented the majority of the Company's operations. The revenue for each of the segments is derived from external customers. Revenue is attributed to a geographical region predicated upon the country from which the sale originated. A majority of all revenues have been generated in the United States from customers located in the United States. The Company does not assess segments at the asset level.

        During the periods presented, different customers accounted for more than ten percent of Feature Film or Commercial revenues. A summary of customers, who represent greater than ten percent of revenues for Feature Film and Commercial Segments, by period, is as follows:

	Successor																		Predecessor
	Year Ended December 31, 2011						Year Ended December 31, 2010						For the Period from January 1, 2009 (the inception date) through December 31, 2009						For the Nine Months Ended September 30, 2009
	Commercial			Feature			Commercial			Feature			Commercial			Feature			Commercial			Feature
Customer A		—			—			—			57	%		16	%		45	%		—			38	%
Customer B		—			—			—			15	%		—			—			—			—
Customer C		—			—			—			11	%		—			—			—			—
Customer D		—			—			14	%		—			10	%		—			—			—
Customer E		16	%		—			18	%		—			—			—			—			—
Customer F		—			—			—			—			—			—			16	%		—
Customer G		—			—			—			—			—			—			12	%		—
Customer H		—			—			—			—			—			—			—			22	%
Customer I		—			12	%		—			—			—			—			—			17	%
Customer J		—			—			—			—			—			54	%		—			14	%
Customer K		—			—			—			—			11	%		—			—			—
Customer L		—			—			—			—			19	%		—			—			—
Customer M		—			28	%		—			—			—			—			—			—
Customer N		—			26	%		—			—			—			—			—			—
Customer O		11	%		—			—			—			—			—			—			—
Customer P		—			—			—			—			—			—			—			—
Customer Q		—			12	%		—			—			—			—			—			—