01—Abstract
Summary
Summary of the 10-K filed February 20, 2014. Cited figures are marked; the original filing is the authoritative source.
Warner Bros.
Discovery, Inc. (WBD), operating as Discovery Communications, Inc. at the time of this filing, reported robust revenue growth of 23% to $5.535 billiona in 2013. This growth was primarily driven by a strong performance in both its U.S. Networks and International Networks segments, with distribution and advertising revenues increasing significantly. The company's strategy focuses on content investment, optimizing distribution revenue, and expanding across new platforms.
Acquisitions played a significant role, with the notable purchase of SBS Nordic impacting the International Networks segment. Despite increased costs associated with content and SG&A, the company demonstrated improved operating income, up 8% to $1.998 billionb.
The company also managed its debt effectively, with a substantial revolving credit facility available, and continued its share repurchase program, underscoring a commitment to returning value to shareholders. Overall, the filing presents a picture of a growing, strategically expanding media company navigating a dynamic industry.
02—Key points
Key Highlights
- Total revenues increased by 23% to $5.535 billion in 2013, driven by strong performance in both U.S. and International Networks.
- The U.S. Networks segment saw a 7% revenue increase to $2.952 billion, with advertising revenue up 8% and distribution revenue up 6%.
- The International Networks segment experienced significant growth with revenues up 51% to $2.474 billion, boosted by the acquisition of SBS Nordic and growth in Latin America.
- Operating income rose by 8% to $1.998 billion, reflecting the company's ability to manage costs despite increased investments in content and SG&A.
- The company repurchased approximately $1.05 billion of its common stock in 2013 as part of its ongoing share repurchase program.
- Discovery Communications entered into an agreement to acquire a controlling interest in Eurosport International, expanding its European sports media presence.
- Debt levels increased, with total debt reaching $6.515 billion, but the company maintained access to a $1.0 billion revolving credit facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Warner Bros. Discovery, Inc. kept $0.19.
- Revenue$5.54B100.0%
- Cost of revenue−$1.69B30.5%
- Gross profit$3.85B69.5%
- Operating costs−$1.87B33.8%
- Operating income$1.98B35.7%
- Interest, other & tax−$898.0M16.2%
- Net income$1.08B19.5%
Where FY2013 revenue went
$5.54B- Cost of revenue: $1.69B, 31% of revenue
- SG&A: $1.60B, 29% of revenue
- Net income: $1.08B, 19% of revenue
- Interest, other & tax: $898.0M, 16% of revenue
- Other operating costs: $273.0M, 4.9% of revenue
Kept 19% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 20, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $5.54B$4.49B | +23.4% |
| Cost of Revenue | $1.69B$1.22B | +38.7% |
| Gross Profit | $3.85B$3.27B | +17.7% |
| SG&A Expenses | $1.60B$1.29B | +24.2% |
| Operating Expenses | $3.56B$2.63B | +35.5% |
| Operating Income | $1.98B$1.86B | +6.2% |
| Interest Expense | $306.00M$248.00M | +23.4% |
| Net Income | $1.08B$945.00M | +14.0% |
| EPS (Basic) | $3.01$2.51 | +19.9% |
| EPS (Diluted) | $2.97$2.48 | +19.8% |
| Shares Outstanding (Basic) | 357.00M376.00M | −5.1% |
| Shares Outstanding (Diluted) | 361.00M380.00M | −5.0% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth in 2013?
Revenue growth was primarily driven by increases in both distribution and advertising revenues across both the U.S. Networks and International Networks segments. The acquisition of SBS Nordic significantly contributed to the International Networks' revenue.
How did the company manage its expenses?
While costs of revenues and selling, general, and administrative expenses increased, primarily due to investments in content development and increased personnel costs, the company's operating income still grew, indicating effective cost management relative to revenue increases.
What significant strategic moves did the company make in 2013?
The most significant strategic move was the acquisition of SBS Nordic, which expanded its international footprint. Additionally, the company entered into an agreement to acquire a controlling interest in Eurosport, signaling a move into the European sports media market.
What is the company's approach to returning capital to shareholders?
The company actively repurchased its common stock throughout 2013, demonstrating a commitment to shareholder returns. They also had a substantial remaining authorization for future repurchases.
06—Continue