8-KOther Events

Warner Bros. Discovery, Inc. 8-K Report, Corporate Update (Jun 13, 2011)

Filed June 13, 2011For Securities:WBD

Summary

This 8-K filing from Discovery Communications, Inc. (WBD) on June 13, 2011, provides updates related to its business and financial activities, primarily to facilitate an upcoming bond offering. Key disclosures include an amendment to the HUB LLC Agreement concerning license fees for animated programs, which has triggered potential impairment testing for intangible assets and goodwill. While the fair value analysis is ongoing, no definitive conclusions on impairment have been reached, with expectations for completion in the third quarter of 2011. The filing also details the company's active stock repurchase program. Between April 1, 2011, and June 10, 2011, Discovery repurchased approximately 3.9 million shares of its Series C common stock for about $147 million. Cumulatively, as of June 10, 2011, the company had bought back 11.6 million shares under its $1.0 billion repurchase plan, spending roughly $419 million.

Key Highlights

  • 1Amendment to The HUB LLC Agreement revises license fees for animated programs.
  • 2The HUB agreement amendment creates a trigger event for intangible asset and goodwill impairment testing.
  • 3Discovery Communications is conducting a fair value analysis for potential goodwill impairment, expected to be completed in Q3 2011.
  • 4Company repurchased 3.9 million shares of Series C common stock for $147 million between April 1 and June 10, 2011.
  • 5Total Series C common stock repurchased as of June 10, 2011, is 11.6 million shares for approximately $419 million under a $1.0 billion repurchase plan.
  • 6The disclosures are intended to update information for an upcoming bond offering.

Frequently Asked Questions

The amendment to The HUB LLC Agreement alters the license fees paid by The HUB for animated programs. Crucially, it establishes a 'trigger event' that necessitates testing for potential impairment of intangible assets and goodwill related to this venture. Investors should monitor the outcome of the ongoing fair value analysis.

Discovery Communications is in the process of conducting a fair value analysis to support goodwill impairment testing. The assessment is not yet complete, and no determinations have been made regarding impairment. The company anticipates completing this evaluation during the third quarter of 2011.

Discovery Communications has been actively repurchasing its Series C common stock. From April 1 to June 10, 2011, they bought back 3.9 million shares for approximately $147 million. In total, as of June 10, 2011, 11.6 million shares have been repurchased under the $1.0 billion plan, with about $419 million spent.

The company is filing this report to provide recent developments and update its disclosures. The primary purpose is to facilitate an upcoming bond offering by ensuring all relevant information is transparently communicated to potential investors.