01—Abstract
Summary
Summary of the 10-K filed February 14, 2013. Cited figures are marked; the original filing is the authoritative source.
Warner Bros.
Discovery, Inc. (WBD), formerly known as Discovery Communications, Inc., reported strong revenue growth in its 2012 10-K filing, with total revenues increasing by 8% to $4.5 billiona. This growth was driven by a 7% increase in distribution revenue and a notable 10% rise in advertising revenue, indicating the company's successful strategy in monetizing its extensive content library across various platforms. The company's operational performance was robust, with an operating income of $1.85 billion, a 3% increase from the previous year.
This profitability was supported by effective cost management, although selling, general, and administrative expenses saw a 10% increase, largely due to higher personnel and equity-based compensation costs. The U.S. Networks segment remained the largest contributor to revenue and profitability, showing solid growth in both distribution and advertising. Financially, WBD demonstrated a healthy liquidity position with $1.2 billionb in cash and cash equivalents, supported by approximately $1 billion available under its revolving credit facility.
The company also actively engaged in capital allocation through stock repurchases, signaling confidence in its future prospects and commitment to shareholder returns. Significant investments were made in content creation and acquisition to fuel future growth.
02—Key points
Key Highlights
- Total revenues increased by 8% to $4.5 billion in 2012, driven by strong performance in both distribution and advertising segments.
- Operating income grew by 3% to $1.85 billion, showcasing effective operational management despite increased SG&A expenses.
- U.S. Networks segment demonstrated significant growth, with revenues up 5% and Adjusted OIBDA increasing by 8%.
- International Networks segment experienced robust growth, with revenues up 13% and Adjusted OIBDA up 12%, indicating successful global expansion.
- The company maintained a strong liquidity position with $1.2 billion in cash and cash equivalents and $1 billion available under its revolving credit facility.
- WBD continued its share repurchase program, demonstrating a commitment to returning value to shareholders, with $1.5 billion remaining authorization as of December 31, 2012.
- Significant investments were made in content creation and acquisition to support future viewership and revenue growth.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2012, Warner Bros. Discovery, Inc. kept $0.21.
- Revenue$4.49B100.0%
- Cost of revenue−$1.22B27.1%
- Gross profit$3.27B72.9%
- Operating costs−$1.41B31.4%
- Operating income$1.86B41.4%
- Interest, other & tax−$914.0M20.4%
- Net income$945.0M21.1%
Where FY2012 revenue went
$4.49B- SG&A: $1.29B, 29% of revenue
- Cost of revenue: $1.22B, 27% of revenue
- Net income: $945.0M, 21% of revenue
- Interest, other & tax: $914.0M, 20% of revenue
- Other operating costs: $123.0M, 2.7% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2012filed February 14, 2013Financial Statements
FY2012 against FY2011
| Line item | FY2012FY2011 | Change |
|---|---|---|
| Revenue | $4.49B$4.17B | +7.7% |
| Cost of Revenue | $1.22B$1.18B | +3.6% |
| Gross Profit | $3.27B$2.99B | +9.3% |
| SG&A Expenses | $1.29B$1.17B | +9.9% |
| Operating Expenses | $2.63B$2.37B | +11.1% |
| Operating Income | $1.86B$1.80B | +3.1% |
| Interest Expense | $248.00M$208.00M | +19.2% |
| Net Income | $945.00M$1.13B | −16.6% |
| EPS (Basic) | $2.51$2.82 | −11.0% |
| EPS (Diluted) | $2.48$2.80 | −11.4% |
| Shares Outstanding (Basic) | 376.00M401.00M | −6.2% |
| Shares Outstanding (Diluted) | 380.00M405.00M | −6.2% |
05—Questions
Frequently Asked Questions
What were the primary drivers of revenue growth for WBD in 2012?
WBD's revenue growth in 2012 was primarily driven by increases in both distribution revenue (up 7%) and advertising revenue (up 10%). This indicates successful execution of strategies to increase subscriber fees and capitalize on advertising demand across its broad network portfolio.
How did the U.S. Networks and International Networks segments perform in 2012?
The U.S. Networks segment, the company's largest, saw a 5% revenue increase and an 8% rise in Adjusted OIBDA. The International Networks segment also performed strongly, with revenues up 13% and Adjusted OIBDA up 12%, highlighting successful global expansion and content appeal.
What is WBD's financial health and liquidity situation as of December 31, 2012?
WBD maintained a solid financial position, with $1.2 billion in cash and cash equivalents and $1 billion available under its revolving credit facility. The company's debt level was manageable, and it had a robust operating income, indicating good financial health and liquidity.
What was the impact of equity-based compensation on WBD's expenses in 2012?
Equity-based compensation expense increased by $55 million in 2012 compared to 2011, primarily due to an increase in the value of outstanding cash-settled unit awards. This contributed to the overall 10% increase in selling, general, and administrative expenses.
06—Continue