Name: Warner Bros. Discovery Inc. (NASDAQ:WBD) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Warner Bros. Discovery Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Advertising	6,215)	5,583)	6,044)	5,514)	3,073)
Distribution	5,409)	4,866)	4,835)	4,538)	3,474)
Other	567)	222)	265)	501)	326)
Revenues	12,191)	10,671)	11,144)	10,553)	6,873)
Costs of revenues, excluding depreciation and amortization	(4,620)	(3,860)	(3,819)	(3,935)	(2,656)
Gross profit	7,571)	6,811)	7,325)	6,618)	4,217)
Selling, general and administrative	(4,016)	(2,722)	(2,788)	(2,620)	(1,768)
Depreciation and amortization	(1,582)	(1,359)	(1,347)	(1,398)	(330)
Impairment of goodwill and other intangible assets	—)	(124)	(155)	—)	(1,327)
Restructuring and other charges	(32)	(91)	(26)	(750)	(75)
Gain (loss) on disposition	71)	—)	—)	84)	(4)
Operating income	2,012)	2,515)	3,009)	1,934)	713)
Interest expense, net	(633)	(648)	(677)	(729)	(475)
Loss on extinguishment of debt	(10)	(76)	(28)	—)	(54)
Loss from equity investees, net	(18)	(105)	(2)	(63)	(211)
Foreign currency gains (losses), net	93)	(115)	17)	(93)	(83)
Gains (losses) on derivative instruments, net	(33)	29)	(52)	50)	(82)
Interest income	18)	10)	22)	15)	21)
Gain on sale of investment with readily determinable fair value	15)	101)	—)	—)	—)
Change in the value of equity investments without readily determinable fair value	(13)	—)	—)	—)	—)
Change in the value of investments with readily determinable fair value	(6)	28)	(26)	(88)	—)
Expenses from debt modification	—)	(11)	—)	—)	—)
Other income, net	8)	—)	31)	(4)	34)
Other income (expense), net	82)	42)	(8)	(120)	(110)
Income (loss) before income taxes	1,433)	1,728)	2,294)	1,022)	(137)
Income tax expense	(236)	(373)	(81)	(341)	(176)
Net income (loss)	1,197)	1,355)	2,213)	681)	(313)
Net income attributable to noncontrolling interests and redeemable noncontrolling interests	(191)	(136)	(144)	(87)	(24)
Net income (loss) available to Discovery, Inc.	1,006)	1,219)	2,069)	594)	(337)

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 between 2017 and 2021 is characterized by substantial revenue growth accompanied by a peak in profitability in 2019, followed by a gradual decline in net earnings despite continued top-line expansion.

Revenue Trends: Total revenues increased from 6,873 million US dollars in 2017 to 12,191 million US dollars in 2021. This growth was driven primarily by a steady rise in both advertising and distribution streams. Advertising revenue more than doubled over the period, rising from 3,073 million US dollars to 6,215 million US dollars. Distribution revenue followed a similar upward path, increasing from 3,474 million US dollars to 5,409 million US dollars.
Gross Profit and Cost Management: Gross profit rose from 4,217 million US dollars in 2017 to 7,571 million US dollars in 2021. While costs of revenues increased in absolute terms, they remained relatively proportional to revenue growth, maintaining a stable gross margin profile after the initial surge seen between 2017 and 2018.
Operating Expense Analysis: A significant increase in operating expenditures is observed toward the end of the period. Selling, general and administrative expenses rose sharply from 1,768 million US dollars in 2017 to 4,016 million US dollars in 2021, with a notable spike occurring between 2020 and 2021. Furthermore, depreciation and amortization costs experienced a permanent step-up after 2017, increasing from 330 million US dollars to a range between 1,347 million and 1,582 million US dollars from 2018 through 2021.
Operating Income and Profitability: Operating income peaked in 2019 at 3,009 million US dollars, having grown from 713 million US dollars in 2017. However, a downward trend emerged thereafter, with operating income falling to 2,012 million US dollars by 2021. This divergence suggests that the growth in operating expenses, particularly SG&A and depreciation, began to outpace the growth in gross profit.
Net Income and Bottom-Line Performance: Net income available to Discovery, Inc. transitioned from a loss of 337 million US dollars in 2017 to a peak of 2,069 million US dollars in 2019. Following this peak, net income declined to 1,219 million US dollars in 2020 and further to 1,006 million US dollars in 2021. This contraction in net profit occurred despite the highest recorded revenues in 2021, highlighting a compression in net profit margins.
Non-Operating Items: Interest expenses remained relatively consistent, fluctuating between 475 million and 729 million US dollars. Other income and expenses showed volatility, including sporadic impairment charges in 2017, 2019, and 2020, which contributed to the inconsistency of pre-tax income across the five-year span.

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