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Warner Bros. Discovery Inc. (NASDAQ:WBD)

This company has been moved to the archive! The financial data has not been updated since November 4, 2022.

Common-Size Income Statement

Warner Bros. Discovery Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Advertising 50.98 52.32 54.24 52.25 44.71
Distribution 44.37 45.60 43.39 43.00 50.55
Other 4.65 2.08 2.38 4.75 4.74
Revenues 100.00% 100.00% 100.00% 100.00% 100.00%
Costs of revenues, excluding depreciation and amortization -37.90 -36.17 -34.27 -37.29 -38.64
Gross profit 62.10% 63.83% 65.73% 62.71% 61.36%
Selling, general and administrative -32.94 -25.51 -25.02 -24.83 -25.72
Depreciation and amortization -12.98 -12.74 -12.09 -13.25 -4.80
Impairment of goodwill and other intangible assets 0.00 -1.16 -1.39 0.00 -19.31
Restructuring and other charges -0.26 -0.85 -0.23 -7.11 -1.09
Gain (loss) on disposition 0.58 0.00 0.00 0.80 -0.06
Operating income 16.50% 23.57% 27.00% 18.33% 10.37%
Interest expense, net -5.19 -6.07 -6.08 -6.91 -6.91
Loss on extinguishment of debt -0.08 -0.71 -0.25 0.00 -0.79
Loss from equity investees, net -0.15 -0.98 -0.02 -0.60 -3.07
Foreign currency gains (losses), net 0.76 -1.08 0.15 -0.88 -1.21
Gains (losses) on derivative instruments, net -0.27 0.27 -0.47 0.47 -1.19
Interest income 0.15 0.09 0.20 0.14 0.31
Gain on sale of investment with readily determinable fair value 0.12 0.95 0.00 0.00 0.00
Change in the value of equity investments without readily determinable fair value -0.11 0.00 0.00 0.00 0.00
Change in the value of investments with readily determinable fair value -0.05 0.26 -0.23 -0.83 0.00
Expenses from debt modification 0.00 -0.10 0.00 0.00 0.00
Other income, net 0.07 0.00 0.28 -0.04 0.49
Other income (expense), net 0.67% 0.39% -0.07% -1.14% -1.60%
Income (loss) before income taxes 11.75% 16.19% 20.59% 9.68% -1.99%
Income tax expense -1.94 -3.50 -0.73 -3.23 -2.56
Net income (loss) 9.82% 12.70% 19.86% 6.45% -4.55%
Net income attributable to noncontrolling interests and redeemable noncontrolling interests -1.57 -1.27 -1.29 -0.82 -0.35
Net income (loss) available to Discovery, Inc. 8.25% 11.42% 18.57% 5.63% -4.90%

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).

The financial performance from 2017 to 2021 is characterized by an initial period of volatility and significant impairment, followed by a peak in profitability in 2019, and a subsequent gradual decline in margins through 2021.

Revenue Composition
A structural shift in revenue streams is evident, with advertising increasing from 44.71% of revenues in 2017 to a peak of 54.24% in 2019, before stabilizing at 50.98% by 2021. Conversely, distribution revenue declined from a majority share of 50.55% in 2017 to 44.37% in 2021, indicating a growing reliance on advertising-based monetization.
Gross Profitability and Cost Management
Gross profit margins showed an upward trend from 61.36% in 2017 to a high of 65.73% in 2019, before moderating to 62.10% in 2021. The costs of revenues remained relatively stable, fluctuating within a narrow band between 34.27% and 38.64% of total revenues throughout the five-year period.
Operating Expenses and Asset Write-downs
Operating efficiency was heavily impacted by non-recurring items in 2017, specifically a substantial impairment of goodwill and other intangible assets amounting to 19.31% of revenues. Depreciation and amortization experienced a sharp increase from 4.80% in 2017 to 13.25% in 2018, remaining consistently high through 2021. Selling, general, and administrative expenses remained stable near 25% until 2021, when a significant increase to 32.94% was observed, placing downward pressure on operating margins.
Operating and Net Income Trends
Operating income improved significantly from 10.37% in 2017 to a peak of 27.00% in 2019, followed by a contraction to 16.50% by 2021. Net income available to Discovery, Inc. followed a similar trajectory, recovering from a loss of 4.90% in 2017 to a peak of 18.57% in 2019, before declining to 8.25% in 2021.
Financial Costs and Other Income
Net interest expense as a percentage of revenue showed a gradual downward trend, decreasing from 6.91% in 2017 to 5.19% in 2021. Other non-operating items, including losses from equity investees and foreign currency fluctuations, remained relatively marginal, though they contributed to the overall volatility of the pre-tax income margin.

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