10-QPeriod: Q3 FY2015

Warner Bros. Discovery, Inc. Quarterly Report for Q3 Ended Sep 30, 2015

Filed November 3, 2015For Securities:WBD

Summary

Discovery Communications, Inc. (WBD) reported revenues of $1.557 billion for the third quarter of 2015, a slight decrease of 1% year-over-year. Net income available to Discovery Communications, Inc. stockholders was $279 million, remaining flat compared to the prior year period. The company's financial position remained largely stable, with total assets at $15.919 billion and total liabilities at $10.033 billion as of September 30, 2015. Key operational highlights include a 4% increase in Distribution revenue driven by annual contractual rate increases and subscriber growth in Latin America and CEEMEA. Advertising revenue saw a slight dip of 4% due to lower audience delivery in the U.S. The company continued to invest in content, with costs of revenues increasing 9% driven by higher content amortization, reflecting a commitment to programming. Management highlighted ongoing efforts in business combinations, particularly the acquisition of Eurosport, which was fully consolidated during the period. The company also maintained a strong liquidity position with $262 million in cash and cash equivalents and access to a $1.5 billion revolving credit facility.

Financial Highlights

45 data points
Beta

Revenue

$1.56B

63.1% Gross Margin

Net Income

$279.00M

17.9% Net Margin

Total Assets

$15.92B

Cash & Equivalents

$262.00M

Free Cash Flow

$234.00M

Financial Statements
Beta
Revenue$1.56B
Cost of Revenue$574.00M
Gross Profit$983.00M
SG&A Expenses$394.00M
Operating Expenses$1.05B
Operating Income$505.00M
Interest Expense$82.00M
Net Income$279.00M

Key Highlights

  • 1Total revenues for the third quarter of 2015 were $1.557 billion, a slight decrease of 1% year-over-year.
  • 2Net income available to Discovery Communications, Inc. stockholders was $279 million, flat compared to the prior year.
  • 3Distribution revenue increased by 4% year-over-year, driven by U.S. Networks and International Networks segments.
  • 4Advertising revenue decreased by 4% year-over-year, impacted by lower audience delivery in the U.S.
  • 5Content amortization increased, reflecting continued investment in programming.
  • 6The company completed the full acquisition of Eurosport, integrating it into its financial reporting.
  • 7Liquidity remained strong with $262 million in cash and cash equivalents and significant availability under its revolving credit facility.

Frequently Asked Questions

Discovery Communications, Inc. reported total revenues of $1.557 billion for the third quarter ended September 30, 2015, a slight decrease of 1% compared to $1.568 billion in the same period of 2014. This was primarily driven by a 4% decrease in advertising revenue, partially offset by a 4% increase in distribution revenue.

Net income available to Discovery Communications, Inc. stockholders was $279 million for the third quarter of 2015, which was flat compared to $280 million in the prior year's third quarter. While revenues saw a slight decrease, effective cost management and stable performance in key revenue streams maintained profitability.

A significant strategic event was the full acquisition of Eurosport, which was completed on October 1, 2015, following the acquisition of controlling stakes earlier in 2014 and March 2015. This acquisition is intended to enhance the company's pan-European sports media offerings and was fully integrated into the financial statements for the period.

The company maintained a stable financial position with $15.919 billion in total assets and $10.033 billion in total liabilities. Liquidity remains strong with $262 million in cash and cash equivalents and access to a $1.5 billion revolving credit facility. The company continues to invest in content and manage its debt obligations, indicating a stable operational outlook.