Warner Bros. Discovery, Inc. Quarterly Report for Q3 Ended Sep 30, 2016

Summary

Warner Bros. Discovery, Inc. (WBD), reporting as Discovery Communications, Inc. for this period, presented a mixed financial performance for the nine months ending September 30, 2016. Total revenues saw a modest increase of 2% year-over-year, reaching $4.825 billion. However, operating income experienced a slight decline of 1% to $1.533 billion, impacted by increased costs of revenues, selling, general, and administrative expenses, and higher interest expense. Despite the slight dip in operating income, net income available to Discovery Communications, Inc. stockholders showed a positive trend, increasing by 9% to $890 million. This was driven by a lower effective income tax rate and a decrease in "Other expense, net," partly due to the resolution of uncertain tax positions. The company also demonstrated strong operational cash flow generation, with $827 million provided by operating activities for the nine-month period, an increase from the previous year. The balance sheet remained largely stable, with total assets at $15.85 billion and total liabilities at $10.4 billion.

Key Highlights

• 1Total revenues increased 2% to $4.825 billion for the nine months ended September 30, 2016.
• 2Net income available to Discovery Communications, Inc. stockholders grew 9% to $890 million.
• 3Operating cash flow was strong, providing $827 million for the nine months ended September 30, 2016.
• 4The company issued $500 million in 4.90% senior notes due March 2026.
• 5Adjusted OIBDA (Operating Income Before Depreciation and Amortization) saw a slight increase of 1% to $1.845 billion.
• 6Significant share repurchases continued, with $1.124 billion spent in the nine months ended September 30, 2016, and $1.3 billion remaining authorization.
• 7The company experienced an other-than-temporary impairment charge of $62 million related to its investment in Lionsgate shares.

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