Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Total Asset Turnover
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Warner Bros. Discovery Inc., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Federal	451)	422)	411)	323)	177)
State and local	130)	12)	42)	30)	45)
Foreign	166)	125)	132)	119)	153)
Current	747)	559)	585)	472)	375)
Federal	(250)	(14)	(54)	(113)	(124)
State and local	6)	(24)	(8)	(21)	(7)
Foreign	(267)	(148)	(442)	3)	(68)
Deferred	(511)	(186)	(504)	(131)	(199)
Provision for income taxes	236)	373)	81)	341)	176)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Current	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Warner Bros. Discovery Inc. current decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Deferred	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Warner Bros. Discovery Inc. deferred increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.
Provision for income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Warner Bros. Discovery Inc. provision for income taxes increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Warner Bros. Discovery Inc., effective income tax rate (EITR) reconciliation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
U.S. federal statutory income tax rate	21.00%	21.00%	21.00%	21.00%	35.00%
State and local income taxes, net of federal tax benefit	7.00%	0.00%	1.00%	1.00%	-18.00%
Effect of foreign operations	2.00%	3.00%	-1.00%	11.00%	25.00%
UK Finance Act legislative change	-11.00%	-3.00%	0.00%	0.00%	0.00%
Noncontrolling interest adjustment	-3.00%	-2.00%	-1.00%	-2.00%	0.00%
Change in uncertain tax positions	1.00%	1.00%	0.00%	3.00%	-44.00%
Impairment of goodwill	0.00%	2.00%	1.00%	0.00%	-334.00%
Deferred tax adjustment	0.00%	-1.00%	0.00%	0.00%	0.00%
Domestic production activity deductions	0.00%	0.00%	0.00%	0.00%	39.00%
Legal entity restructuring, deferred tax impact	0.00%	0.00%	-19.00%	0.00%	0.00%
Preferred stock modification	0.00%	0.00%	0.00%	0.00%	-9.00%
Renewable energy investments tax credits	0.00%	0.00%	0.00%	-1.00%	142.00%
U.S. legislative changes	0.00%	0.00%	0.00%	-2.00%	32.00%
Other, net	-1.00%	1.00%	2.00%	2.00%	4.00%
Effective income tax rate	16.00%	22.00%	4.00%	33.00%	-128.00%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Effective income tax rate	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Warner Bros. Discovery Inc. effective income tax rate increased from 2019 to 2020 but then slightly decreased from 2020 to 2021.

Warner Bros. Discovery Inc., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Accounts receivable	8)	7)	12)	11)	5)
Tax attribute carry-forward	445)	354)	311)	321)	151)
Accrued liabilities and other	548)	471)	342)	302)	190)
Deferred income tax assets	1,001)	832)	665)	634)	346)
Valuation allowance	(305)	(257)	(307)	(336)	(105)
Net deferred income tax assets	696)	575)	358)	298)	241)
Intangible assets	(395)	(654)	(849)	(1,418)	(315)
Content rights	(138)	(163)	(148)	(107)	(82)
Equity method and other investments in partnerships	(413)	(470)	(471)	(488)	(68)
Noncurrent portion of debt	(87)	(85)	—)	—)	—)
Other	(133)	(140)	(106)	(15)	(31)
Deferred income tax liabilities	(1,166)	(1,512)	(1,574)	(2,028)	(496)
Net deferred income tax assets (liabilities)	(470)	(937)	(1,216)	(1,730)	(255)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Deferred income tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Warner Bros. Discovery Inc. deferred income tax assets increased from 2019 to 2020 and from 2020 to 2021.
Net deferred income tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Warner Bros. Discovery Inc. net deferred income tax assets increased from 2019 to 2020 and from 2020 to 2021.
Net deferred income tax assets (liabilities)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Warner Bros. Discovery Inc. net deferred income tax assets (liabilities) increased from 2019 to 2020 and from 2020 to 2021.

Warner Bros. Discovery Inc., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Noncurrent deferred income tax assets (included within Other noncurrent assets)	755)	597)	475)	81)	64)
	Deferred income tax liabilities	1,225)	1,534)	1,691)	1,811)	319)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Noncurrent deferred income tax assets (included within Other noncurrent assets)	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, with jurisdictional netting and classified as noncurrent.	Warner Bros. Discovery Inc. noncurrent deferred income tax assets (included within Other noncurrent assets) increased from 2019 to 2020 and from 2020 to 2021.
Deferred income tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Warner Bros. Discovery Inc. deferred income tax liabilities decreased from 2019 to 2020 and from 2020 to 2021.

Warner Bros. Discovery Inc., adjustments to financial statements

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported)	34,427)	34,087)	33,735)	32,550)	22,555)
Less: Noncurrent deferred tax assets, net	755)	597)	475)	81)	64)
Total assets (adjusted)	33,672)	33,490)	33,260)	32,469)	22,491)
Adjustment to Total Liabilities
Total liabilities (as reported)	21,031)	21,704)	21,769)	22,033)	17,532)
Less: Noncurrent deferred tax liabilities, net	1,225)	1,534)	1,691)	1,811)	319)
Total liabilities (adjusted)	19,806)	20,170)	20,078)	20,222)	17,213)
Adjustment to Total Discovery, Inc. Stockholders’ Equity
Total Discovery, Inc. stockholders’ equity (as reported)	11,599)	10,464)	9,891)	8,386)	4,610)
Less: Net deferred tax assets (liabilities)	(470)	(937)	(1,216)	(1,730)	(255)
Total Discovery, Inc. stockholders’ equity (adjusted)	12,069)	11,401)	11,107)	10,116)	4,865)
Adjustment to Net Income (loss) Available To Discovery, Inc.
Net income (loss) available to Discovery, Inc. (as reported)	1,006)	1,219)	2,069)	594)	(337)
Add: Deferred income tax expense (benefit)	(511)	(186)	(504)	(131)	(199)
Net income (loss) available to Discovery, Inc. (adjusted)	495)	1,033)	1,565)	463)	(536)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Warner Bros. Discovery Inc., Financial Data: Reported vs. Adjusted

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Warner Bros. Discovery Inc., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net Profit Margin
Reported net profit margin	8.25%	11.42%	18.57%	5.63%	-4.90%
Adjusted net profit margin	4.06%	9.68%	14.04%	4.39%	-7.80%
Total Asset Turnover
Reported total asset turnover	0.35	0.31	0.33	0.32	0.30
Adjusted total asset turnover	0.36	0.32	0.34	0.33	0.31
Financial Leverage
Reported financial leverage	2.97	3.26	3.41	3.88	4.89
Adjusted financial leverage	2.79	2.94	2.99	3.21	4.62
Return on Equity (ROE)
Reported ROE	8.67%	11.65%	20.92%	7.08%	-7.31%
Adjusted ROE	4.10%	9.06%	14.09%	4.58%	-11.02%
Return on Assets (ROA)
Reported ROA	2.92%	3.58%	6.13%	1.82%	-1.49%
Adjusted ROA	1.47%	3.08%	4.71%	1.43%	-2.38%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Warner Bros. Discovery Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 and from 2020 to 2021.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Warner Bros. Discovery Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Warner Bros. Discovery Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Warner Bros. Discovery Inc. adjusted ROE deteriorated from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Warner Bros. Discovery Inc. adjusted ROA deteriorated from 2019 to 2020 and from 2020 to 2021.

Warner Bros. Discovery Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) available to Discovery, Inc.	1,006)	1,219)	2,069)	594)	(337)
Revenues	12,191)	10,671)	11,144)	10,553)	6,873)
Profitability Ratio
Net profit margin¹	8.25%	11.42%	18.57%	5.63%	-4.90%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) available to Discovery, Inc.	495)	1,033)	1,565)	463)	(536)
Revenues	12,191)	10,671)	11,144)	10,553)	6,873)
Profitability Ratio
Adjusted net profit margin²	4.06%	9.68%	14.04%	4.39%	-7.80%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Net profit margin = 100 × Net income (loss) available to Discovery, Inc. ÷ Revenues
= 100 × 1,006 ÷ 12,191 = 8.25%

² Adjusted net profit margin = 100 × Adjusted net income (loss) available to Discovery, Inc. ÷ Revenues
= 100 × 495 ÷ 12,191 = 4.06%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Warner Bros. Discovery Inc. adjusted net profit margin ratio deteriorated from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Revenues	12,191)	10,671)	11,144)	10,553)	6,873)
Total assets	34,427)	34,087)	33,735)	32,550)	22,555)
Activity Ratio
Total asset turnover¹	0.35	0.31	0.33	0.32	0.30
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Revenues	12,191)	10,671)	11,144)	10,553)	6,873)
Adjusted total assets	33,672)	33,490)	33,260)	32,469)	22,491)
Activity Ratio
Adjusted total asset turnover²	0.36	0.32	0.34	0.33	0.31

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Total asset turnover = Revenues ÷ Total assets
= 12,191 ÷ 34,427 = 0.35

² Adjusted total asset turnover = Revenues ÷ Adjusted total assets
= 12,191 ÷ 33,672 = 0.36

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Warner Bros. Discovery Inc. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets	34,427)	34,087)	33,735)	32,550)	22,555)
Total Discovery, Inc. stockholders’ equity	11,599)	10,464)	9,891)	8,386)	4,610)
Solvency Ratio
Financial leverage¹	2.97	3.26	3.41	3.88	4.89
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted total assets	33,672)	33,490)	33,260)	32,469)	22,491)
Adjusted total Discovery, Inc. stockholders’ equity	12,069)	11,401)	11,107)	10,116)	4,865)
Solvency Ratio
Adjusted financial leverage²	2.79	2.94	2.99	3.21	4.62

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Total Discovery, Inc. stockholders’ equity
= 34,427 ÷ 11,599 = 2.97

² Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Discovery, Inc. stockholders’ equity
= 33,672 ÷ 12,069 = 2.79

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Warner Bros. Discovery Inc. adjusted financial leverage ratio decreased from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) available to Discovery, Inc.	1,006)	1,219)	2,069)	594)	(337)
Total Discovery, Inc. stockholders’ equity	11,599)	10,464)	9,891)	8,386)	4,610)
Profitability Ratio
ROE¹	8.67%	11.65%	20.92%	7.08%	-7.31%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) available to Discovery, Inc.	495)	1,033)	1,565)	463)	(536)
Adjusted total Discovery, Inc. stockholders’ equity	12,069)	11,401)	11,107)	10,116)	4,865)
Profitability Ratio
Adjusted ROE²	4.10%	9.06%	14.09%	4.58%	-11.02%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net income (loss) available to Discovery, Inc. ÷ Total Discovery, Inc. stockholders’ equity
= 100 × 1,006 ÷ 11,599 = 8.67%

² Adjusted ROE = 100 × Adjusted net income (loss) available to Discovery, Inc. ÷ Adjusted total Discovery, Inc. stockholders’ equity
= 100 × 495 ÷ 12,069 = 4.10%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Warner Bros. Discovery Inc. adjusted ROE deteriorated from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) available to Discovery, Inc.	1,006)	1,219)	2,069)	594)	(337)
Total assets	34,427)	34,087)	33,735)	32,550)	22,555)
Profitability Ratio
ROA¹	2.92%	3.58%	6.13%	1.82%	-1.49%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income (loss) available to Discovery, Inc.	495)	1,033)	1,565)	463)	(536)
Adjusted total assets	33,672)	33,490)	33,260)	32,469)	22,491)
Profitability Ratio
Adjusted ROA²	1.47%	3.08%	4.71%	1.43%	-2.38%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net income (loss) available to Discovery, Inc. ÷ Total assets
= 100 × 1,006 ÷ 34,427 = 2.92%

² Adjusted ROA = 100 × Adjusted net income (loss) available to Discovery, Inc. ÷ Adjusted total assets
= 100 × 495 ÷ 33,672 = 1.47%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Warner Bros. Discovery Inc. adjusted ROA deteriorated from 2019 to 2020 and from 2020 to 2021.

Warner Bros. Discovery Inc. (NASDAQ:WBD)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Warner Bros. Discovery Inc., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Warner Bros. Discovery Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Total Asset Turnover

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)