Warner Bros. Discovery Inc. (NASDAQ:WBD)

The financial data reveals notable fluctuations in both current and deferred income tax expenses over the five-year period ending in 2021. The current income tax expense exhibits a generally upward trajectory, increasing from $375 million in 2017 to $747 million in 2021. This trend suggests growth in taxable income or changes in tax policy resulting in higher current tax liabilities. Although a slight dip is observed in 2020, the overall direction remains positive.

In contrast, the deferred income tax expense shows a more volatile pattern with substantial negative values indicating deferred tax benefits or reductions over the years. Beginning at -$199 million in 2017, the deferred expense decreases sharply to -$504 million in 2019, improves to -$186 million in 2020, and then declines again to -$511 million in 2021. This volatility could reflect fluctuations in temporary differences, tax rate changes, or adjustments of deferred tax assets and liabilities.

The provision for income taxes, which combines current and deferred components, mirrors the variability seen in the other items. It starts at $176 million in 2017, peaks at $373 million in 2020, and settles at $236 million in 2021. The significant increase in 2020 suggests an exceptionally strong tax provision that year, possibly influenced by both current tax obligations and adjustments to deferred taxes.

Current Income Tax Expense

Demonstrates a rising trend over the period, nearly doubling from 2017 to 2021, indicating increasing taxable income or changing tax environments.

Deferred Income Tax Expense

Exhibits significant variability and predominantly negative values, implying recurring deferred tax benefits or asset recognition offsetting current tax expenses in some years.

Provision for Income Taxes

Reflects combined effects with notable peaks and troughs, highlighting the impact of deferred tax adjustments alongside current tax charges.

Overall, the data suggest that the company experiences increasing current tax charges while managing deferred tax positions with considerable fluctuations. These dynamics likely affect net tax expense volatility and could be linked to underlying operational or tax strategy changes.

The data exhibit notable fluctuations and patterns in the various tax-related percentages over the five-year period under review.

U.S. Federal Statutory Income Tax Rate

This rate experienced a significant reduction from 35% in 2017 to 21% in 2018 and remained steady at 21% through 2021, indicating a stabilization following a tax reform.

State and Local Income Taxes, Net of Federal Tax Benefit

The percentages varied, starting from a negative rate of -18% in 2017 to a small positive value of 1% in 2018 and 2019. Data for 2020 is missing, followed by an increase to 7% in 2021, suggesting growing state and local tax impacts with some inconsistency.

Effect of Foreign Operations

This effect declined from 25% in 2017 to 11% in 2018, turned slightly negative at -1% in 2019, and remained positive but low at 3% and 2% in 2020 and 2021 respectively, indicating diminishing but persistent contributions from foreign operations.

UK Finance Act Legislative Change

Absent in earlier years, this factor shows a negative impact starting in 2019 with -3%, worsening to -11% in 2020, and no data for 2021, suggesting increasing tax burdens related to UK legislation during this period.

Noncontrolling Interest Adjustment

The adjustment appears negative throughout its recorded years, moving from -2% in 2018 to -3% in 2021, demonstrating consistent downward pressure due to noncontrolling interests.

Change in Uncertain Tax Positions

There is notable volatility with a sharp decline of -44% in 2017, a positive 3% in 2018, missing data in 2019, and small positive values of 1% in both 2020 and 2021, reflecting instability and some resolution in uncertain tax positions over time.

Impairment of Goodwill

A large negative percentage of -334% is observed in 2017, followed by minimal positive values in 2019 and 2020, and no data thereafter, highlighting a significant impairment event in 2017 with minimal related impact subsequently.

Deferred Tax Adjustment

Data is sparse but shows a small negative adjustment of -1% in 2019, with no additional entries, indicating limited influence during the observed period.

Domestic Production Activity Deductions

A notable positive impact of 39% is observed in 2017, with no data in later years, possibly reflecting a one-time or discontinued benefit.

Legal Entity Restructuring, Deferred Tax Impact

A negative adjustment of -19% occurs in 2019, with absence of data for other years, pointing to a significant tax effect related to restructuring activities in that year.

Preferred Stock Modification

A minor negative impact of -9% is recorded in 2017 only, with no subsequent data, indicating a limited occurrence.

Renewable Energy Investments Tax Credits

There is a stark positive figure of 142% in 2017, followed by a drop to -1% in 2018, and no data afterwards. This suggests a substantial one-off benefit tied to renewable energy investments initially, quickly diminishing.

U.S. Legislative Changes

Positive 32% in 2017 is followed by a negative figure of -2% in 2018 and no data in later years, signaling an initial beneficial effect from legislative changes that waned immediately.

Other, Net

This category exhibits minor positive values between 1% and 4% from 2017 through 2020, turning slightly negative at -1% in 2021, signifying small but fluctuating net miscellaneous impacts.

Effective Income Tax Rate

The rate shows extreme volatility, with a highly negative -128% in 2017, a sharp increase to 33% in 2018, followed by a significant fall to 4% in 2019. It then rises to 22% in 2020 and declines again to 16% in 2021. This pattern indicates wide-ranging impacts on effective tax from the various components, stabilizing somewhat after initial turbulence.

Overall, the data reveal a complex interplay of tax factors with significant one-off events such as goodwill impairment and renewable energy tax credits in 2017, legislative and restructuring impacts in subsequent years, and a general movement toward stabilization of effective tax rates and related components towards 2021.

The financial data reveals several notable trends over the period from 2017 to 2021 across various balance sheet items. The analysis focuses on liquidity-related items, tax attributes, deferred tax balances, asset valuations, liabilities, and investments.

Accounts Receivable

Accounts receivable initially increased significantly from US$5 million in 2017 to US$11 million in 2018 and US$12 million in 2019, before falling to US$7 million in 2020 and slightly rising to US$8 million in 2021. This indicates a peak in receivables in 2019 followed by a partial reduction thereafter, which could relate to changes in sales volumes or collection policies.

Tax Attribute Carry-forward

This item exhibits a steady upward trend, growing from US$151 million in 2017 to US$445 million in 2021. This consistent increase suggests an accumulation of tax losses or credits that the company expects to utilize in future periods, indicating a build-up of deferred tax benefits.

Accrued Liabilities and Other

Accrued liabilities and other current liabilities increased notably from US$190 million in 2017 to US$548 million in 2021. The growth is quite pronounced especially in 2020 and 2021, possibly reflecting increased operational expenses payable or accrued costs, which may correspond to higher obligations or accrual practices.

Deferred Income Tax Assets

Deferred income tax assets rose from US$346 million in 2017 to US$1001 million in 2021, indicating a greater amount of deductible temporary differences or carryforwards that the company anticipates will reduce future income tax payments. This is a significant positive trend reflecting growth in deferred tax benefits.

Valuation Allowance

The valuation allowance, which offsets deferred tax assets when recoverability is uncertain, fluctuates negatively but shows improvement from -US$336 million in 2018 to a less negative -US$257 million in 2020 before increasing again to -US$305 million in 2021. This pattern suggests some variability in management's assessment of deferred tax asset realizability, with a reduction in allowance in 2020 followed by a partial increase in 2021.

Net Deferred Income Tax Assets

Net deferred income tax assets increased from US$241 million in 2017 to US$696 million in 2021, with a substantial jump between 2019 and 2020. This underscores improving tax asset positions net of valuation allowances, reflecting growing expected future tax benefits.

Intangible Assets

Intangible assets show a negative balance throughout, with the greatest negative value in 2018 (-US$1418 million) before improving gradually to -US$395 million in 2021. The significant negative figures suggest impairment or amortization charges reducing the carrying value of intangible assets, with a recovery trend in the later years suggesting either write-downs realized or asset disposals.

Content Rights

Content rights have steadily increased in negative value from -US$82 million in 2017 to a peak negative of -US$163 million in 2020, then improving slightly to -US$138 million in 2021. This likely reflects amortization or impairment of content-related assets, consistent with industry practices of expensing such rights over time.

Equity Method and Other Investments in Partnerships

These investments are held at negative values, decreasing from -US$68 million in 2017 to around -US$488 million in 2018, then remaining relatively stable but slightly improving to -US$413 million in 2021. The negative values may indicate losses on investments or accounting adjustments, with stabilization in later years.

Noncurrent Portion of Debt

The noncurrent portion of debt appears only in 2020 and 2021, with modest negative balances (-US$85 million and -US$87 million respectively), suggesting the commencement or recognition of long-term liabilities starting in 2020.

Other Items

The 'Other' category shows negative values fluctuating from -US$31 million in 2017, peaking at -US$140 million in 2020, then slightly improving to -US$133 million in 2021. This may include miscellaneous or less defined liabilities or asset adjustments, reflecting some increase and slight improvement over the years.

Deferred Income Tax Liabilities

Deferred income tax liabilities show large negative balances, peaking at -US$2028 million in 2018 then improving steadily to -US$1166 million in 2021. This decline indicates the company has been reducing its deferred tax liabilities, which may result from asset disposals, tax planning strategies, or changes in temporary differences.

Net Deferred Income Tax Assets (Liabilities)

When combining deferred tax assets and liabilities, the net balances remain negative across all years, moving from -US$255 million in 2017 to a much larger net liability of -US$1730 million in 2018, then improving towards -US$470 million in 2021. This trend suggests increased deferred tax liabilities exceeding assets in 2018, with a subsequent partial reversal improving the net position over time.

Overall, the data reflects increasing tax-related assets and liabilities with significant fluctuations in intangible asset valuations and accrued liabilities. The company appears to have expanded its tax attributes and deferred tax assets, while managing sizable deferred tax liabilities leading to fluctuating net deferred tax positions. Accounts receivable show moderate variability, and investment losses or impairments are evident in intangible and equity method investments. The growth in accrued liabilities points to higher obligations or expenses over the period. These trends collectively indicate dynamic financial management with ongoing adjustments in tax positions and asset valuations.

Noncurrent Deferred Income Tax Assets

The noncurrent deferred income tax assets have demonstrated an overall increasing trend from 2017 to 2021. Initially, the value was relatively modest at 64 million USD in 2017. Over the subsequent years, there was a marked increase, reaching 81 million USD in 2018, which was followed by a significant jump to 475 million USD in 2019. This upward trajectory continued through 2020 and 2021, with increases to 597 million USD and 755 million USD, respectively. This pattern suggests a growing recognition of deferred tax benefits over the period observed.

Deferred Income Tax Liabilities

Deferred income tax liabilities exhibited a different pattern over the same timeframe. Starting from 319 million USD in 2017, the liabilities surged substantially to 1811 million USD in 2018. After this peak, a gradual decline occurred over the next three years, decreasing to 1691 million USD in 2019, 1534 million USD in 2020, and 1225 million USD in 2021. This indicates a notable reduction in deferred tax liabilities following the sharp initial increase, potentially reflecting changes in tax positions or timing differences related to income recognition.

Overall Tax Asset and Liability Trends

The data reveals an opposite directional trend between deferred tax assets and liabilities. While deferred tax assets have been consistently rising, deferred tax liabilities peaked early in the period and then steadily declined. The contrasting movements may imply adjustments in tax management strategies, asset valuation, or shifts in the company’s tax exposure and timing differences over the years.

The financial data reveals notable trends and shifts in the adjusted and reported figures over the period from December 31, 2017, to December 31, 2021.

Total Assets

Reported total assets showed a consistent increase from US$22,555 million in 2017 to US$34,427 million in 2021, reflecting steady growth over the five-year span. Adjusted total assets followed a similar upward trend, though consistently slightly lower than reported figures, rising from US$22,491 million in 2017 to US$33,672 million in 2021.

Total Liabilities

Reported total liabilities increased from US$17,532 million in 2017 to a peak of US$22,033 million in 2018, then gradually decreased to US$21,031 million by 2021. Adjusted liabilities also followed this pattern but were lower in magnitude, moving from US$17,213 million in 2017 to US$19,806 million in 2021, indicating a reduction in liabilities after 2018 in both reported and adjusted terms.

Stockholders’ Equity

Reported stockholders’ equity demonstrated consistent growth over the period, increasing from US$4,610 million in 2017 to US$11,599 million in 2021. Adjusted equity figures parallel this trajectory, rising from US$4,865 million to US$12,069 million, and consistently remaining above reported equity values, suggesting positive adjustments predominantly benefiting equity measurements.

Net Income (Loss) Available to Discovery, Inc.

The reported net income showed a recovery from a loss of US$337 million in 2017 to positive income of US$1,006 million in 2021, with fluctuations including a sharp increase in 2019 at US$2,069 million and a subsequent decline afterward. Conversely, adjusted net income started from a larger loss in 2017 at US$536 million and peaked at US$1,565 million in 2019, then consistently decreased to US$495 million by 2021. This divergence indicates that deferred tax adjustments or other factors influenced the reported net income to a greater extent in later years, resulting in more volatility compared to the adjusted data.

Overall, the data suggests steady growth in asset and equity values, alongside prudent management of liabilities, as reflected in their gradual decrease after 2018. The differences between reported and adjusted figures, especially in net income and equity, highlight the financial impact of tax-related and other accounting adjustments over time. The decline in adjusted net income following its peak in 2019 signals a potential area for further investigation to understand underlying operational or tax-related influences.

The financial data exhibits notable fluctuations and an overall trend in profitability and efficiency metrics across the five-year period ending in 2021. Both reported and adjusted figures reveal important patterns that reflect the company's operational and financial performance.

Profit Margins

The reported net profit margin improved significantly from a negative -4.9% in 2017 to a peak of 18.57% in 2019, indicating a strong turnaround in profitability. However, this was followed by a decline to 11.42% in 2020 and further down to 8.25% in 2021. Adjusted net profit margin reflects a similar trajectory with less pronounced highs and lows, peaking at 14.04% in 2019 before descending to 4.06% by 2021. The adjustments appear to moderate the margin volatility but retain the overall trend of growth followed by erosion in profitability.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios show a generally stable and slightly upward trend. The reported asset turnover increased from 0.30 in 2017 to 0.35 in 2021, while the adjusted ratio moved from 0.31 to 0.36 in the same period. This suggests a gradual improvement in asset utilization efficiency over time, indicating that the company has been somewhat more effective in generating revenue from its asset base.

Financial Leverage

Reported financial leverage decreased steadily from a high of 4.89 in 2017 to 2.97 in 2021, indicating a consistent reduction in reliance on debt relative to equity. The adjusted leverage metric follows a comparable downward path but remains slightly lower than the reported figures, dropping from 4.62 to 2.79. This decrease in leverage may imply a strengthening of the equity base or deleveraging efforts, potentially reducing financial risk over the period.

Return on Equity (ROE)

The reported ROE transitioned from a negative -7.31% in 2017 to a robust 20.92% by 2019, demonstrating a significant recovery in shareholder returns. This was followed by a downturn to 11.65% in 2020 and further to 8.67% in 2021. Adjusted ROE mirrors this pattern with a less extreme peak at 14.09% in 2019 and a decrease to 4.1% in 2021, indicating that adjustments temper the reported earnings volatility but maintain the overall trend.

Return on Assets (ROA)

The reported ROA improved markedly from -1.49% in 2017 to 6.13% in 2019, suggesting enhanced profitability from asset utilization. Afterward, it declined to 3.58% in 2020 and 2.92% in 2021. Adjusted ROA shows a similar pattern, rising from -2.38% to 4.71% between 2017 and 2019, followed by decreases to 3.08% and 1.47% in subsequent years. The adjusted figures again reduce the amplitude of change, indicating moderate profitability excluding certain adjustments.

Overall, profitability metrics peaked in 2019 across both reported and adjusted data before declining in the following years. Asset turnover improved consistently, reflecting positive operational efficiency trends. A steady reduction in financial leverage signals a move toward a more conservative capital structure. The adjustments made to the financial figures generally smooth out volatility but preserve the fundamental patterns observed in the financial performance.

The annual financial data reveal varying trends in both reported and adjusted net income and their corresponding profit margins over the five-year period from 2017 to 2021.

Reported Net Income (Loss)

The reported net income showed significant volatility. It started with a substantial loss of $337 million in 2017, followed by a sharp turnaround to a profit of $594 million in 2018. The peak was observed in 2019 with reported net income reaching $2,069 million. However, this was followed by a decline to $1,219 million in 2020 and further down to $1,006 million in 2021, indicating a decreasing profitability trend after the 2019 high.

Adjusted Net Income (Loss)

The adjusted net income followed a similar but less pronounced pattern. Beginning with a loss of $536 million in 2017, it improved to a profit of $463 million in 2018 and continued growing to $1,565 million in 2019. Subsequent years saw a decline, with adjusted net income dropping to $1,033 million in 2020 and further to $495 million in 2021. The adjusted figures reflect a more moderated decline compared to the reported net income, suggesting adjustments mitigate some volatility.

Reported Net Profit Margin

The reported net profit margin mirrors the net income trend, starting negatively at -4.9% in 2017, then increasing sharply to 5.63% in 2018, and peaking at 18.57% in 2019. After this peak, margins contracted significantly to 11.42% in 2020 and 8.25% in 2021. The decline post-2019 indicates reduced profitability relative to revenue in subsequent years despite remaining positive.

Adjusted Net Profit Margin

Adjusted net profit margins also began at a negative -7.8% in 2017, improved to 4.39% in 2018, and rose to 14.04% in 2019. Following this, the margins decreased to 9.68% in 2020 and further to 4.06% in 2021. The lower adjusted margins compared to reported ones in the later years emphasize the impact of adjustments in reflecting a more conservative profitability measure.

In summary, the data exhibit a strong recovery and growth in both reported and adjusted net income and margins from 2017 to 2019, followed by a consistent decline through 2021. The adjustment process appears to moderate the reported figures, reducing extreme fluctuations especially in the most recent years, which suggests the presence of non-recurring items or other factors influencing reported results. The overall trend indicates waning profitability after the 2019 peak, highlighting potential challenges in sustaining earnings growth.

The analysis of the financial data over the five-year period reveals several notable trends in asset levels and efficiency ratios.

Total Assets

The reported total assets increased steadily from 22,555 million US dollars in 2017 to 34,427 million US dollars in 2021, reflecting consistent asset growth. The adjusted total assets, which exclude certain tax-related adjustments, show a similar increasing trend but with slightly lower values each year, indicating minor adjustments that reduce the asset base when compared to reported figures.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios demonstrate a gradual improvement over the period. Reported asset turnover rose from 0.30 in 2017 to 0.35 in 2021, while adjusted asset turnover increased from 0.31 to 0.36 in the same timeframe. This indicates an enhancement in the company’s efficiency in generating revenues from its asset base, with the adjusted ratios consistently marginally higher than the reported ones.

Overall, the data suggests a positive trajectory in asset growth accompanied by improvements in asset utilization efficiency. The slight discrepancies between reported and adjusted figures hint at the impact of income tax-related adjustments, which modestly affect the measurement but do not alter the upward trends and improvement in operational performance.

The financial data reveals several notable trends over the five-year period from 2017 to 2021. Both reported and adjusted total assets show a consistent increase year over year, indicating steady asset growth. The reported total assets rose from 22,555 million US dollars in 2017 to 34,427 million US dollars in 2021, while the adjusted total assets followed a similar trajectory, increasing from 22,491 million to 33,672 million US dollars during the same period. This suggests stable asset accumulation with minor adjustments after accounting for income tax considerations.

Total stockholders’ equity, both reported and adjusted, also demonstrated a continuous upward trend. Reported equity increased from 4,610 million US dollars in 2017 to 11,599 million in 2021. Adjusted equity values were consistently higher than the reported figures each year, growing from 4,865 million to 12,069 million US dollars. This reflects the company's strengthened equity base and potentially favorable effects of deferred tax adjustments on equity.

Financial leverage ratios declined steadily throughout the period, showing a reduction in reliance on debt relative to equity. The reported financial leverage decreased from 4.89 in 2017 to 2.97 in 2021, while the adjusted financial leverage showed a similar but more pronounced decline from 4.62 to 2.79. The lower leverage ratios imply improved financial stability and a more conservative capital structure over time, with adjusted figures indicating an even less leveraged position after income tax adjustments.

Asset Growth

Consistent annual increase in both reported and adjusted total assets, indicating expanding resource base.

Equity Expansion

Progressive rise in reported and adjusted stockholders’ equity, with adjusted values surpassing reported amounts, reflecting deferred tax impacts.

Decreasing Financial Leverage

Steady decline in both reported and adjusted leverage ratios, signaling reduced dependency on debt and enhanced financial robustness.

Net Income Trends

The reported net income available to the company experienced a significant increase from a loss of $337 million in 2017 to a peak of $2,069 million in 2019, followed by a decline to $1,219 million in 2020 and further to $1,006 million in 2021. The adjusted net income displayed a similar pattern, improving from a loss of $536 million in 2017 to a high of $1,565 million in 2019, then decreasing to $1,033 million in 2020 and further down to $495 million in 2021.

Stockholders' Equity Trends

Reported total stockholders’ equity consistently increased over the period, rising from $4,610 million in 2017 to $11,599 million in 2021. Adjusted stockholders’ equity also showed steady growth, advancing from $4,865 million in 2017 to $12,069 million in 2021. Adjusted measures generally remained slightly higher than reported figures throughout the period.

Return on Equity (ROE) Analysis

Reported ROE improved from a negative 7.31% in 2017 to a peak of 20.92% in 2019, but subsequently declined to 11.65% in 2020 and further to 8.67% in 2021. Adjusted ROE followed a similar trajectory, starting at negative 11.02% in 2017, rising to 14.09% in 2019, and then decreasing to 9.06% in 2020 and 4.10% in 2021. The adjusted ROE values were consistently lower than reported ROE values across all years.

Overall Observations

The financial data reveals a period of marked profitability growth culminating in 2019, after which both reported and adjusted net income, as well as ROE, showed a declining trend through 2021. Stockholders' equity maintained a steady upward trend, suggesting ongoing capital accumulation despite the decrease in profitability metrics in recent years. The adjustment for deferred income tax impacts generally results in lower net income and ROE figures, indicating the adjustments have a dampening effect on reported profitability measures.

Net Income Trends

Reported net income available to the company exhibited significant volatility over the analyzed periods. Starting with a loss of 337 million USD at the end of 2017, the figure shifted sharply to a positive 594 million USD in 2018, followed by substantial growth to 2,069 million USD in 2019. Subsequently, a declining trend was observed with net income decreasing to 1,219 million USD in 2020 and further to 1,006 million USD in 2021. Adjusted net income followed a similar pattern, commencing with a larger loss of 536 million USD in 2017, then improving to 463 million USD in 2018, and rising to 1,565 million USD in 2019. In 2020 and 2021, adjusted net income declined to 1,033 million USD and 495 million USD, respectively, reflecting decreasing profitability after 2019.

Total Assets Trends

The reported total assets showed consistent growth during the period under review. Starting from 22,555 million USD in 2017, assets increased substantially to 32,550 million USD in 2018 and continued to rise modestly to 33,735 million USD in 2019. Growth persisted, reaching 34,087 million USD in 2020 and slightly increasing further to 34,427 million USD in 2021. Adjusted total assets closely mirrored this trend, beginning at 22,491 million USD in 2017 and progressively climbing to 33,672 million USD by 2021, indicating general asset base expansion with minor adjustments accounting for variations.

Return on Assets (ROA) Analysis

Reported Return on Assets experienced considerable improvement from a negative 1.49% in 2017 to a positive 1.82% in 2018, then sharply increased to 6.13% in 2019. However, this measure declined afterward, dropping to 3.58% in 2020 and further decreasing to 2.92% in 2021. Adjusted ROA followed a comparable trajectory but with generally lower values: starting at negative 2.38% in 2017, improving to 1.43% in 2018, rising to 4.71% in 2019, diminishing to 3.08% in 2020, and further declining to 1.47% in 2021. This pattern suggests profitability relative to asset base peaked in 2019 and deteriorated subsequently.

Overall Insights

The financial data over the five-year span reveal a period of substantial recovery and growth particularly between 2017 and 2019, indicated by transformation from losses to strong net income and ROA improvements. After 2019, the data indicate a downturn in profitability metrics both on reported and adjusted bases, despite steady asset growth. This may imply challenges in converting asset base growth into proportional income or returns in the latter period. The consistent difference between reported and adjusted figures suggests that tax-related or other adjustments materially affect income and asset evaluations, necessitating cautious interpretation when assessing operational performance.