10-KPeriod: FY2019

Warner Bros. Discovery, Inc. Annual Report, Year Ended Dec 31, 2019

Filed February 27, 2020For Securities:WBD

Summary

Warner Bros. Discovery, Inc. (WBD) in its 2019 10-K filing, for the period ending December 30, 2019, reported total revenues of $11.14 billion. The company operates globally across two main segments: U.S. Networks and International Networks, generating revenue primarily from advertising and distribution fees. The company experienced a 6% increase in total revenues year-over-year, reaching $11.14 billion in 2019, compared to $10.55 billion in 2018. This growth was driven by increases in both advertising and distribution revenues, with U.S. Networks showing a 12% revenue increase and International Networks a 3% decrease (or 3% increase on a pro forma combined basis, excluding FX impacts). The company's strategy focuses on investing in content, optimizing distribution, and expanding across new platforms, including direct-to-consumer (DTC) offerings. Key challenges include the evolving media landscape, digital transformation, and competition. Financially, the company ended 2019 with $1.55 billion in cash and cash equivalents, while managing significant long-term debt totaling $14.81 billion. The company also faced goodwill impairment charges, particularly in its Asia-Pacific reporting unit, and continued integration costs related to the Scripps Networks acquisition. Despite these challenges, WBD demonstrated operational resilience, with a 12% increase in Total Adjusted OIBDA, reaching $4.67 billion.

Financial Highlights

46 data points
Beta

Revenue

$11.14B

Net Income

$2.07B

18.6% Net Margin

Total Assets

$33.73B

Cash & Equivalents

$1.55B

Free Cash Flow

$3.11B

Financial Statements
Beta
Revenue$11.14B
SG&A Expenses$2.79B
Operating Expenses$8.13B
Operating Income$3.01B
Interest Expense$677.00M
Net Income$2.07B

Key Highlights

  • 1Total revenues increased by 6% to $11.14 billion in 2019, driven by growth in advertising and distribution revenues.
  • 2U.S. Networks segment revenue grew by 12%, while International Networks segment revenue saw a 3% decrease (or a 3% pro forma increase excluding FX).
  • 3Adjusted OIBDA (a measure of operational profitability) increased by 12% to $4.67 billion.
  • 4The company continues to invest in its content library and expand its digital and Direct-to-Consumer (DTC) offerings.
  • 5Cash and cash equivalents stood at $1.55 billion as of December 31, 2019.
  • 6Long-term debt remained significant at $14.81 billion as of December 31, 2019.
  • 7A goodwill impairment charge of $155 million was recorded in 2019 for the Asia-Pacific reporting unit.

Frequently Asked Questions

In 2019, WBD's primary revenue sources were advertising (accounting for 54% of total revenues) and distribution fees (43%). Other revenue streams constituted the remaining 3%.

The acquisition of Scripps Networks, completed in March 2018, continued to influence WBD's 2019 results. While it contributed to revenue growth and operational scale, it also led to transaction and integration costs, and had a significant impact on goodwill and intangible assets. The company reported a $155 million goodwill impairment charge related to its Asia-Pacific reporting unit in 2019, partly a consequence of strategic programming changes post-acquisition.

WBD's strategy involves investing in high-quality content, optimizing distribution across linear and digital platforms, and expanding its direct-to-consumer (DTC) offerings. The company is actively developing and repositioning branded channels and businesses to sustain long-term growth and appeal to specific consumer niches, aiming to maximize the potential of its branded networks.

As of December 31, 2019, WBD had $1.55 billion in cash and cash equivalents. However, the company carried a substantial amount of long-term debt, totaling $14.81 billion, highlighting a leveraged capital structure.