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

Cash Flow Statement

The cash flow statement provides information about a company cash receipts and cash payments during an accounting period, showing how these cash flows link the ending cash balance to the beginning balance shown on the company balance sheet.

The cash flow statement consists of three parts: cash flows provided by (used in) operating activities, cash flows provided by (used in) investing activities, and cash flows provided by (used in) financing activities.

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Warner Bros. Discovery Inc., consolidated cash flow statement

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income (loss)	1,197)	1,355)	2,213)	681)	(313)
Content rights amortization and impairment	3,501)	2,956)	2,853)	3,288)	1,910)
Depreciation and amortization	1,582)	1,359)	1,347)	1,398)	330)
Deferred income taxes	(511)	(186)	(504)	(131)	(199)
Equity in losses of equity method investee companies and cash distributions	63)	167)	62)	138)	223)
Loss on extinguishment of debt	10)	76)	28)	—)	54)
Share-based compensation expense	178)	110)	142)	80)	39)
Impairment of goodwill and other intangible assets	—)	124)	155)	—)	1,327)
Gain on sale of investments	(19)	(103)	(10)	—)	—)
(Gain) loss on disposition	(71)	2)	—)	(84)	4)
Other, net	105)	(22)	86)	126)	149)
Receivables, net	47)	105)	(7)	(84)	(258)
Content rights and payables, net	(3,381)	(3,053)	(3,060)	(2,883)	(1,947)
Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities	185)	(131)	122)	(74)	265)
Foreign currency, prepaid expenses and other assets, net	(88)	(20)	(28)	121)	45)
Changes in operating assets and liabilities, net of acquisitions and dispositions	(3,237)	(3,099)	(2,973)	(2,920)	(1,895)
Adjustments to reconcile net income (loss) to cash provided by operating activities	1,601)	1,384)	1,186)	1,895)	1,942)
Cash provided by operating activities	2,798)	2,739)	3,399)	2,576)	1,629)
Purchases of property and equipment	(373)	(402)	(289)	(147)	(135)
Purchases of investments	(103)	(250)	—)	—)	—)
Investments in and advances to equity investments	(184)	(181)	(254)	(61)	(444)
Proceeds from sales and maturities of investments and dissolution of joint venture	599)	69)	125)	—)	—)
Business acquisitions, net of cash acquired	(2)	(39)	(73)	(8,565)	(60)
Proceeds from dispositions, net of cash disposed	—)	—)	—)	107)	29)
(Payments for) proceeds from derivative instruments, net	(86)	85)	54)	(2)	(101)
Other investing activities, net	93)	15)	(1)	75)	78)
Cash used in investing activities	(56)	(703)	(438)	(8,593)	(633)
Principal repayments of debt, including premiums to par value and discount payment	(574)	(2,193)	(2,658)	(16)	(650)
Borrowings from debt, net of discount and issuance costs	—)	1,979)	1,479)	—)	7,488)
Repurchases of stock	—)	(969)	(633)	—)	(603)
Principal repayments of revolving credit facility	—)	(500)	(225)	(200)	(475)
Borrowings under revolving credit facility	—)	500)	—)	—)	350)
Distributions to noncontrolling interests and redeemable noncontrolling interests	(251)	(254)	(250)	(76)	(30)
Borrowings under term loan facilities	—)	—)	—)	2,000)	—)
Principal repayments of term loans	—)	—)	—)	(2,000)	—)
Other financing activities, net	(28)	(112)	(70)	9)	(129)
Cash used in financing activities	(853)	(1,549)	(2,357)	(283)	5,951)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(106)	83)	(38)	(23)	62)
Net change in cash, cash equivalents, and restricted cash	1,783)	570)	566)	(6,323)	7,009)
Cash, cash equivalents, and restricted cash, beginning of period	2,122)	1,552)	986)	7,309)	300)
Cash, cash equivalents, and restricted cash, end of period	3,905)	2,122)	1,552)	986)	7,309)

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 analysis of cash flow patterns from 2017 to 2021 reveals a company with strong operational cash generation capabilities, despite volatility in net income and significant strategic expenditures.

Operating Activities: Cash provided by operating activities demonstrated a general upward trajectory, increasing from 1,629 million USD in 2017 to a peak of 3,399 million USD in 2019, before stabilizing near 2,798 million USD by 2021. A significant divergence exists between net income and operating cash flow, primarily driven by substantial non-cash charges. Content rights amortization and impairment represent the largest adjustment, consistently ranging between 1,910 million USD and 3,501 million USD annually. Furthermore, a persistent cash outflow is observed in content rights and payables, which expanded from 1,947 million USD in 2017 to 3,381 million USD in 2021, indicating an intensifying investment in content libraries.
Investing Activities: Investing cash flows were characterized by a massive outlier in 2018, where 8,593 million USD was utilized, almost entirely due to business acquisitions totaling 8,565 million USD. Outside of this event, investing activities remained relatively moderate. Purchases of property and equipment showed a steady increase from 135 million USD in 2017 to a peak of 402 million USD in 2020. By 2021, cash used in investing activities narrowed significantly to 56 million USD, aided by 599 million USD in proceeds from the sale and maturity of investments.
Financing Activities: Financing patterns shifted from aggressive capital raising to debt reduction and shareholder returns. In 2017, a net inflow of 5,951 million USD was recorded, driven by 7,488 million USD in debt borrowings. Subsequent years transitioned to net outflows, with 2,357 million USD used in 2019 and 1,549 million USD in 2020. These outflows were primarily composed of principal repayments of debt and revolving credit facilities, alongside periodic stock repurchases, such as the 969 million USD spent in 2020.
Liquidity and Cash Position: The net change in cash was highly volatile, reflecting the timing of large-scale acquisitions and financing rounds. The cash balance ended 2017 at a peak of 7,309 million USD, dropped sharply to 986 million USD by the end of 2018 following the acquisition surge, and gradually recovered to 3,905 million USD by December 31, 2021. This recovery was supported by sustained operational cash flows and a reduction in aggressive investing expenditures in the final year of the period.

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