10-QPeriod: Q2 FY2011

Warner Bros. Discovery, Inc. Quarterly Report for Q2 Ended Jun 30, 2011

Filed August 4, 2011For Securities:WBD

Summary

Warner Bros. Discovery, Inc. (WBD), formerly Discovery Communications, Inc., reported a strong performance for the quarter ending June 30, 2011. The company demonstrated significant revenue growth across its Distribution and Advertising segments, indicating robust demand for its content and channels. Operating income saw a substantial increase, driven by effective cost management and increased revenues, despite a notable rise in content expense. Financially, WBD maintained a healthy liquidity position with a substantial increase in cash and cash equivalents. The company also actively managed its capital structure, including significant stock repurchases and debt management activities. Strategic investments in joint ventures, such as OWN, and ongoing international expansion highlight the company's focus on long-term growth and market presence. Investors can view this period as one of positive financial momentum and strategic development.

Financial Highlights

50 data points
Beta

Revenue

$1.05B

72.5% Gross Margin

Net Income

$254.00M

24.2% Net Margin

EPS (Diluted)

$0.62

Total Assets

$11.84B

Cash & Equivalents

$1.09B

Free Cash Flow

$198.00M

Financial Statements
Beta
Revenue$1.05B
Cost of Revenue$288.00M
Gross Profit$760.00M
SG&A Expenses$300.00M
Operating Expenses$622.00M
Operating Income$445.00M
Interest Expense$49.00M
Net Income$254.00M
EPS (Basic)$0.63
EPS (Diluted)$0.62
Shares Outstanding (Basic)406.00M
Shares Outstanding (Diluted)410.00M

Key Highlights

  • 1Total revenues increased by 11% to $1.067 billion for the three months ended June 30, 2011, compared to $963 million in the prior year period.
  • 2Operating income surged by 20% to $445 million for the quarter, reflecting improved operational efficiency and revenue growth.
  • 3Cash and cash equivalents significantly increased by $629 million to $1.095 billion as of June 30, 2011, indicating strong liquidity.
  • 4The company repurchased $210 million of its common stock during the quarter under its authorized repurchase program.
  • 5The U.S. Networks segment saw a revenue increase of 6% to $660 million, driven by growth in advertising and distribution revenues.
  • 6International Networks segment revenues grew by 20% to $368 million, fueled by strong performance in distribution and advertising.
  • 7The company recorded a pretax gain of $129 million from the contribution of the domestic Discovery Health network to OWN LLC.

Frequently Asked Questions

WBD reported strong financial performance. Total revenues grew 11% year-over-year to $1.067 billion, while operating income increased by 20% to $445 million. The company also saw a significant increase in cash and cash equivalents, ending the quarter with $1.095 billion.

Both the U.S. Networks and International Networks segments showed positive growth. U.S. Networks revenues increased by 6% to $660 million, driven by advertising and distribution. International Networks revenues grew by 20% to $368 million, also benefiting from strong advertising and distribution performance.

WBD recorded a pretax gain of $129 million related to the contribution of its domestic Discovery Health network to OWN LLC. This transaction, completed on January 1, 2011, is part of strategic partnerships and investments, with the gain representing the fair value of the retained equity interest less the book value of the contributed assets.

The company demonstrated strong cash flow generation, with an increase in cash and cash equivalents to $1.095 billion. WBD also actively engaged in capital management by repurchasing $210 million of its common stock during the quarter and managing its debt obligations. The company believes its current financial resources are sufficient to meet its operating requirements for the foreseeable future.