NEW
YORK, April 26, 2022 /PRNewswire/ -- Warner
Bros. Discovery, Inc. ("Warner Bros. Discovery" or the "Company")
(NASDAQ: WBD) today reported financial results for the quarter
ended March 31, 2022. The results presented in this earnings
release cover the period from January 1,
2022 through March 31, 2022
for Discovery, Inc., and do not include first-quarter performance
for the WarnerMedia business, which was acquired on April 8, 2022.
David Zaslav, President
and Chief Executive Officer of Warner Bros. Discovery said, "With
Warner Bros. Discovery, we are creating a pure-play media company
with diversified revenues and the most compelling IP ownership,
franchises, and brand portfolio in our industry. Importantly, we
also have an unrivaled global footprint of touchpoints to get our
content into the hands of consumers on every screen. We are putting
together the strategic framework and organization to drive our
balanced approach to growing our businesses and maximizing the
value of our storytelling, news and sports. To do this, we have
brought together a strong leadership team in a streamlined
structure to foster better command and control and strategic
clarity across the entire company. I could not be more excited
about the massive opportunity ahead."
Financial Highlights
- Q1 2022 total revenues of $3,159
million increased 13%, or increased 15% ex-FX(1),
compared to the prior year quarter.
– U.S. advertising
revenues increased 5% and distribution revenues increased 11%;
and
– International
advertising revenues increased 5%, or 11% ex-FX, and distribution
revenues increased 4%, or 8% ex-FX.
- Net income available to Warner Bros. Discovery, Inc. was
$456 million.
- Total Adjusted OIBDA(2) was $1,027 million.
- Cash provided by operating activities increased to $323 million and free cash flow(3)
increased to $238 million.
- Ended Q1 with $4.2 billion
of cash and cash equivalents, gross debt(4) of
$15.1 billion, and net
leverage(4) of 2.7x.
- Ended Q1 2022 with 24 million DTC Subscribers(5), an
increase of 2 million subscribers since the end of Q4.
- Generated nearly $450 million of
Next Generation Revenues(5) in Q1, growth of 55% versus
the prior year quarter.
|
Three Months Ended March 31,
|
Dollars in millions, except per share
amounts
|
2022
|
|
2021
|
|
% Change
|
Ex-FX(1)
|
Total
revenue
|
$
3,159
|
|
$
2,792
|
|
13%
|
15%
|
Net income available to
Warner Bros. Discovery, Inc.
|
$
456
|
|
$
140
|
|
NM
|
|
Total Adjusted
OIBDA
|
$
1,027
|
|
$
837
|
|
23%
|
23%
|
Diluted earnings per
share
|
$
0.69
|
|
$
0.21
|
|
NM
|
|
Cash provided by
operating activities
|
$
323
|
|
$
269
|
|
20%
|
|
Free cash
flow
|
$
238
|
|
$
179
|
|
33%
|
|
NM - Not
meaningful
|
The above financial
results are for Discovery, Inc. only.
|
Segment Results
U.S. Networks
|
Three Months Ended March 31,
|
Dollars in millions
|
2022
|
|
2021
|
|
% Change
|
Advertising
|
$
1,025
|
|
$
980
|
|
5%
|
Distribution
|
886
|
|
796
|
|
11%
|
Other
|
21
|
|
30
|
|
(30)%
|
Total
revenues
|
$
1,932
|
|
$
1,806
|
|
7%
|
Costs of revenues,
excluding depreciation & amortization
|
489
|
|
428
|
|
14%
|
Selling, general &
administrative(6)
|
418
|
|
555
|
|
(25)%
|
Adjusted
OIBDA
|
$
1,025
|
|
$
823
|
|
25%
|
The above financial
results are for Discovery, Inc. only.
|
First-Quarter 2022
- U.S. Networks revenues increased 7% compared to the prior year
quarter to $1,932 million.
–
Advertising revenue increased 5% primarily due to higher
pricing and the continued monetization of content offerings on our
next generation initiatives, partially offset by secular declines
in the pay-TV ecosystem and lower overall ratings.
–
Distribution revenue increased 11% primarily driven by the
growth of discovery+ and an increase in contractual affiliate
rates, partially offset by a decline in linear subscribers.
–
Subscribers to our fully distributed linear networks at
March 31, 2022 were 4% lower versus
the prior year. Total subscribers to our linear networks were 8%
lower, or 4% lower excluding the impact from the sale of our Great
American Country linear network.
- Total operating expenses decreased 8% compared to the prior
year quarter to $907 million.
–
Costs of revenues increased 14% primarily due to higher
content amortization at discovery+, which launched in January 2021, and the linear networks.
–
SG&A expenses decreased 25% primarily due to lower
marketing-related expenses for discovery+ compared to last year's
launch period.
- Adjusted OIBDA increased 25% compared to the prior year quarter
to $1,025 million.
International Networks
|
Three Months Ended March 31,
|
Dollars in millions
|
2022
|
|
2021
|
|
% Change
|
Ex-FX
|
Advertising
|
$
457
|
|
$
435
|
|
5%
|
11%
|
Distribution
|
536
|
|
514
|
|
4%
|
8%
|
Other
|
236
|
|
38
|
|
NM
|
NM
|
Total
revenues
|
$
1,229
|
|
$
987
|
|
25%
|
30%
|
Costs of revenues,
excluding depreciation & amortization
|
751
|
|
543
|
|
38%
|
45%
|
Selling, general &
administrative(6)
|
317
|
|
293
|
|
8%
|
14%
|
Adjusted
OIBDA
|
$
161
|
|
$
151
|
|
7%
|
9%
|
NM - Not
meaningful
|
The above financial
results are for Discovery, Inc. only.
|
First-Quarter 2022
- International Networks revenues increased 25%, or 30% ex-FX,
compared to the prior year quarter to $1,229
million.
–
Advertising revenue increased 5%, or 11% ex-FX, primarily
driven by the broadcast of the Winter Olympics across Europe.
–
Distribution revenue increased 4%, or 8% ex-FX, primarily
driven by discovery+ subscriber growth, partially offset by lower
contractual affiliate rates in some European markets.
–
Other revenue increased to $236
million, driven by sublicensing of Olympics sports rights to
broadcast networks throughout Europe.
- Total operating expenses increased 28%, or 34% ex-FX, compared
to the prior year quarter to $1,068
million.
–
Costs of revenues increased 38%, or 45% ex-FX, primarily due
to the Olympics.
–
SG&A increased 8%, or 14% ex-FX, primarily due to higher
personnel costs and marketing-related expenses to support
discovery+ and the Olympics.
- Adjusted OIBDA increased 7% or increased 9% ex-FX, compared to
the prior year quarter to $161
million.
Free Cash Flow
First quarter 2022 cash provided by
operating activities increased to $323
million from $269 million in
the prior year quarter. Free cash flow increased 33% to
$238 million, primarily driven by
higher Adjusted OIBDA, partly offset by higher content spend.
Other
Interest Rate Derivative
Contracts
During the first quarter of 2022 the Company had
total net gains on interest rate derivative instruments of
$512 million that were recognized in
"Other income, net" in the consolidated statements of operations.
The derivative contracts were unwound with the closing of the
$30 billion notes issuance to
partially fund the cash consideration paid to AT&T at the
closing of the WarnerMedia transaction.
Discontinuation of Operations in Russia
During the first quarter of 2022
we exited our operations in Russia
and removed all of our channels and services from the market. We
are currently evaluating the impact of these actions, but do not
expect it to have a material effect on our consolidated financial
statements.
2022 Outlook(7)
Warner Bros.
Discovery may provide forward-looking commentary in connection with
this earnings announcement on its quarterly earnings conference
call. Details on how to access the audio webcast are included
below.
Earnings Conference Call Information
Warner Bros.
Discovery will host a conference call today, April 26, 2022 at
8:00 a.m. ET, to discuss the first
quarter 2022 financial results. These results will cover the period
from January 1, 2022 through
March 31, 2022 for Discovery, Inc.,
and will not include first-quarter performance for the WarnerMedia
business, which was acquired on April 8,
2022. To listen to the audio webcast of the earnings call,
please visit the Investor Relations section of the Corporate
website at www.wbd.com.
Cautionary Statement Concerning Forward-Looking
Statements
Information set forth in this communication
contains certain forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
current expectations, forecasts, and assumptions that involve risks
and uncertainties and on information available to Warner Bros.
Discovery as of the date hereof. The Company's actual results could
differ materially from those stated or implied due to risks and
uncertainties associated with its business, which include the risk
factors disclosed in the Company's 2021 Annual Report on Form 10-K
filed with the U.S. Securities and Exchange Commission (the "SEC")
on February 24, 2022 and its
subsequent filings made with the SEC.
Forward-looking statements include statements regarding the
Company's expectations, beliefs, intentions or strategies regarding
the future, and can be identified by forward-looking words such as
"anticipate," "believe," "could," "continue," "estimate," "expect,"
"intend," "may," "should," "will" and "would" or similar words.
Forward-looking statements include, without limitation, statements
regarding future financial and operating results, the Company's
plans, objectives, expectations and intentions, and other
statements that are not historical facts. The Company expressly
disclaims any obligation or undertaking to disseminate any updates
or revisions to any forward-looking statement contained herein to
reflect any change in the Company's expectations with regard
thereto or any change in events, conditions or circumstances on
which any such statement is based.
Non-GAAP Financial Measures
In addition to financial
measures prepared in accordance with U.S. generally accepted
accounting principles ("GAAP"), this communication may also contain
certain non-GAAP financial measures. Reconciliations between the
non-GAAP financial measures and the closest GAAP financial measures
are available on the Warner Bros. Discovery, Inc. investor
relations website at: https://ir.wbd.com.
About Warner Bros. Discovery
Warner Bros. Discovery
(NASDAQ: WBD) is a leading global media and entertainment company
that creates and distributes the world's most differentiated and
complete portfolio of content and brands across television, film
and streaming. Available in more than 220 countries and territories
and 50 languages, Warner Bros. Discovery inspires, informs and
entertains audiences worldwide through its iconic brands and
products including: Discovery Channel, discovery+, CNN, DC,
Eurosport, HBO, HBO Max, HGTV, Food Network, OWN, Investigation
Discovery, TLC, Magnolia Network, TNT, TBS, truTV, Travel Channel,
MotorTrend, Animal Planet, Science Channel, Warner Bros. Pictures,
Warner Bros. Television, Warner Bros. Games, New Line Cinema,
Cartoon Network, Adult Swim, Turner Classic Movies, Discovery en
Español, Hogar de HGTV and others. For more information, please
visit www.wbd.com.
WARNER BROS.
DISCOVERY, INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(unaudited; in
millions, except per share amounts)
|
|
|
Three Months Ended March 31,
|
|
2022
|
|
2021
|
Revenues:
|
|
|
|
Advertising
|
$
1,482
|
|
$
1,415
|
Distribution
|
1,422
|
|
1,310
|
Other
|
255
|
|
67
|
Total
revenues
|
3,159
|
|
2,792
|
Costs and
expenses:
|
|
|
|
Costs of revenues, excluding depreciation and
amortization
|
1,236
|
|
969
|
Selling, general and administrative
|
1,040
|
|
1,051
|
Depreciation and amortization
|
525
|
|
361
|
Restructuring and other charges
|
5
|
|
15
|
Total costs and
expenses
|
2,806
|
|
2,396
|
Operating
income
|
353
|
|
396
|
Interest expense,
net
|
(153)
|
|
(163)
|
Loss from equity
investees, net
|
(14)
|
|
(4)
|
Other income,
net
|
490
|
|
68
|
Income before income
taxes
|
676
|
|
297
|
Income tax
expense
|
(201)
|
|
(106)
|
Net income
|
475
|
|
191
|
Net income attributable
to noncontrolling interests
|
(16)
|
|
(46)
|
Net income attributable
to redeemable noncontrolling interests
|
(3)
|
|
(5)
|
Net income available to
Warner Bros. Discovery, Inc.
|
$
456
|
|
$
140
|
Net income per share
allocated to Warner Bros. Discovery, Inc. Series A common
stockholders:
|
|
|
|
Basic
|
$
0.69
|
|
$
0.21
|
Diluted
|
$
0.69
|
|
$
0.21
|
Weighted average shares
outstanding:
|
|
|
|
Basic
|
591
|
|
585
|
Diluted
|
665
|
|
667
|
All share and per share amounts have been
retrospectively adjusted to reflect the reclassification and
automatic conversion of each
issued and outstanding share of Discovery Series A common stock,
Discovery Series B common stock, Discovery Series C common
stock, into one share of Warner Bros. Discovery common stock, and
each issued and outstanding share of Discovery Series C-1
preferred stock was reclassified and automatically converted into
19.3648 shares of Warner Bros. Discovery common stock.
Discovery
Series A-1 preferred stock and per share data has not been recast
because the conversion to Warner Bros. Discovery common stock
in
connection with the Merger was considered a discrete event and
treated prospectively.
|
WARNER BROS.
DISCOVERY, INC.
|
CONSOLIDATED BALANCE
SHEETS
|
(unaudited; in
millions, except par value)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash equivalents
|
$
4,162
|
|
$
3,905
|
Receivables, net
|
2,426
|
|
2,446
|
Content rights and prepaid license fees, net
|
143
|
|
245
|
Prepaid expenses and other current assets
|
442
|
|
668
|
Total current
assets
|
7,173
|
|
7,264
|
Noncurrent content
rights, net
|
3,866
|
|
3,832
|
Property and equipment,
net
|
1,328
|
|
1,336
|
Goodwill
|
12,872
|
|
12,912
|
Intangible assets,
net
|
5,873
|
|
6,317
|
Other noncurrent
assets
|
2,687
|
|
2,766
|
Total assets
|
$
33,799
|
|
$
34,427
|
LIABILITIES AND EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable
|
$
521
|
|
$
412
|
Accrued liabilities
|
1,966
|
|
2,230
|
Deferred revenues
|
281
|
|
478
|
Current portion of debt
|
794
|
|
339
|
Total current
liabilities
|
3,562
|
|
3,459
|
Noncurrent portion of
debt
|
13,605
|
|
14,420
|
Deferred income
taxes
|
1,112
|
|
1,225
|
Other noncurrent
liabilities
|
1,958
|
|
1,927
|
Total
liabilities
|
20,237
|
|
21,031
|
Commitments and
contingencies
|
|
|
|
Redeemable
noncontrolling interests
|
335
|
|
363
|
Equity:
|
|
|
|
Warner Bros. Discovery, Inc. stockholders' equity:
|
|
|
|
Series A-1 convertible
preferred stock: $0.01 par value; 8 shares authorized, issued and
outstanding
|
—
|
|
—
|
Series C-1 convertible
preferred stock: $0.01 par value; 6 shares authorized; 4 shares
issued and outstanding
|
—
|
|
—
|
Series A common stock: $0.01
par value; 1,700 shares authorized; 173 and 170 shares issued; and
172 and 169 shares outstanding
|
2
|
|
2
|
Series B convertible common
stock: $0.01 par value; 100 shares authorized; 7 shares issued and
outstanding
|
—
|
|
—
|
Series C common stock:
$0.01 par value; 2,000 shares authorized; 559 shares issued; and
330 shares outstanding
|
5
|
|
5
|
Additional paid-in capital
|
11,120
|
|
11,086
|
Treasury stock, at cost: 230 shares
|
(8,244)
|
|
(8,244)
|
Retained earnings
|
10,033
|
|
9,580
|
Accumulated other comprehensive loss
|
(947)
|
|
(830)
|
Total Warner Bros.
Discovery, Inc. stockholders' equity
|
11,969
|
|
11,599
|
Noncontrolling interests
|
1,258
|
|
1,434
|
Total equity
|
13,227
|
|
13,033
|
Total liabilities and
equity
|
$
33,799
|
|
$
34,427
|
WARNER BROS.
DISCOVERY, INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(unaudited; in
millions)
|
|
|
Three Months Ended March 31,
|
|
2022
|
|
2021
|
Operating Activities
|
|
|
|
Net income
|
$
475
|
|
$
191
|
Adjustments to
reconcile net income to cash provided by operating
activities:
|
|
|
|
Content rights amortization and impairment
|
973
|
|
743
|
Depreciation and amortization
|
525
|
|
361
|
Deferred income taxes
|
(118)
|
|
(108)
|
Share-based compensation expense
|
60
|
|
64
|
Equity in losses of equity method investee companies and cash
distributions
|
21
|
|
12
|
Gain on sale of investments
|
—
|
|
(21)
|
Gain from derivative instruments, net
|
(514)
|
|
(1)
|
Other, net
|
33
|
|
(3)
|
Changes in operating assets and liabilities, net of
acquisitions and dispositions:
|
|
|
|
Receivables, net
|
(5)
|
|
41
|
Content rights and payables,
net
|
(993)
|
|
(926)
|
Accounts payable, accrued
liabilities, deferred revenues and other noncurrent
liabilities
|
(124)
|
|
(110)
|
Foreign currency, prepaid
expenses and other assets, net
|
(10)
|
|
26
|
Cash provided by
operating activities
|
323
|
|
269
|
Investing Activities
|
|
|
|
Purchases of property
and equipment
|
(85)
|
|
(90)
|
Proceeds from sales and
maturities of investments
|
—
|
|
274
|
Investments in and
advances to equity investments
|
(42)
|
|
(55)
|
Proceeds from
derivative instruments, net
|
639
|
|
29
|
Other investing
activities, net
|
17
|
|
(2)
|
Cash provided by
investing activities
|
529
|
|
156
|
Financing Activities
|
|
|
|
Principal repayments of
debt, including premiums to par value
|
(327)
|
|
(339)
|
Distributions to
noncontrolling interests and redeemable noncontrolling
interests
|
(224)
|
|
(183)
|
Other financing
activities, net
|
(36)
|
|
53
|
Cash used in financing
activities
|
(587)
|
|
(469)
|
Effect of exchange rate
changes on cash, cash equivalents, and restricted cash
|
(5)
|
|
(70)
|
Net change in cash,
cash equivalents, and restricted cash
|
260
|
|
(114)
|
Cash, cash equivalents,
and restricted cash, beginning of period
|
3,905
|
|
2,122
|
Cash, cash equivalents,
and restricted cash, end of period
|
$
4,165
|
|
$
2,008
|
WARNER BROS.
DISCOVERY, INC.
|
SUPPLEMENTAL
FINANCIAL DATA
|
RECONCILIATION OF
NET INCOME TO
|
ADJUSTED OPERATING
INCOME BEFORE DEPRECIATION AND AMORTIZATION
|
(unaudited; in
millions)
|
|
|
Three Months Ended March 31,
2022
|
|
U.S. Networks
|
|
International
Networks
|
|
Corporate, Inter-
segment
Eliminations, and
Other
|
|
Total
|
Net income available to
Warner Bros. Discovery, Inc.
|
|
|
|
|
|
|
$
456
|
Net income attributable
to redeemable noncontrolling interests
|
|
|
|
|
|
|
3
|
Net income attributable
to noncontrolling interests
|
|
|
|
|
|
|
16
|
Income tax
expense
|
|
|
|
|
|
|
201
|
Other income,
net
|
|
|
|
|
|
|
(490)
|
Loss from equity
investees, net
|
|
|
|
|
|
|
14
|
Interest expense,
net
|
|
|
|
|
|
|
153
|
Operating income
(loss)
|
$
627
|
|
$
62
|
|
$
(336)
|
|
$
353
|
Depreciation and amortization
|
385
|
|
101
|
|
39
|
|
525
|
Employee share-based compensation
|
—
|
|
—
|
|
57
|
|
57
|
Restructuring and other charges
|
—
|
|
4
|
|
1
|
|
5
|
Transaction and integration costs
|
1
|
|
1
|
|
85
|
|
87
|
Inter-segment eliminations
|
12
|
|
(7)
|
|
(5)
|
|
—
|
Adjusted
OIBDA
|
$
1,025
|
|
$
161
|
|
$
(159)
|
|
$
1,027
|
|
|
|
Three Months Ended March 31,
2021
|
|
U.S. Networks
|
|
International
Networks
|
|
Corporate, Inter-
segment
Eliminations, and
Other
|
|
Total
|
Net income available to
Warner Bros. Discovery, Inc.
|
|
|
|
|
|
|
$
140
|
Net income attributable
to redeemable noncontrolling interests
|
|
|
|
|
|
|
5
|
Net income attributable
to noncontrolling interests
|
|
|
|
|
|
|
46
|
Income tax
expense
|
|
|
|
|
|
|
106
|
Other income,
net
|
|
|
|
|
|
|
(68)
|
Loss from equity
investees, net
|
|
|
|
|
|
|
4
|
Interest expense,
net
|
|
|
|
|
|
|
163
|
Operating income
(loss)
|
$
599
|
|
$
28
|
|
$
(231)
|
|
$
396
|
Depreciation and amortization
|
224
|
|
104
|
|
33
|
|
361
|
Employee share-based compensation
|
—
|
|
—
|
|
61
|
|
61
|
Restructuring and other charges
|
—
|
|
15
|
|
—
|
|
15
|
Transaction and integration costs
|
—
|
|
4
|
|
—
|
|
4
|
Adjusted
OIBDA
|
$
823
|
|
$
151
|
|
$
(137)
|
|
$
837
|
WARNER BROS.
DISCOVERY, INC.
|
SUPPLEMENTAL
FINANCIAL DATA
|
SELECTED FINANCIAL
DETAIL
|
(unaudited; in
millions)
|
|
CALCULATION OF FREE
CASH FLOW
|
|
|
Three Months Ended March 31,
|
|
2022
|
|
2021
|
|
$
Change
|
% Change
|
Cash provided by
operating activities
|
$
323
|
|
$
269
|
|
$
54
|
20%
|
Purchases of property
and equipment
|
(85)
|
|
(90)
|
|
5
|
6%
|
Free cash
flow
|
$
238
|
|
$
179
|
|
$
59
|
33%
|
Definitions and Sources for Discovery,
Inc.
(1) Methodology for Calculating
Growth Rates Excluding the Impact of Currency Effects: The
impact of exchange rates on our business is an important factor in
understanding period-to-period comparisons of our results. For
example, our international revenues are favorably impacted as the
U.S. dollar weakens relative to other foreign currencies, and
unfavorably impacted as the U.S. dollar strengthens relative to
other foreign currencies. We believe the presentation of results on
a constant currency basis ("ex-FX"), in addition to results
reported in accordance with GAAP, provides useful information about
our operating performance because the presentation ex-FX excludes
the effects of foreign currency volatility and highlights our core
operating results. The presentation of results on a constant
currency basis should be considered in addition to, but not a
substitute for, measures of financial performance reported in
accordance with GAAP.
The ex-FX change represents the percentage change on a
period-over-period basis adjusted for foreign currency impacts. The
ex-FX change is calculated as the difference between the current
year amounts translated at a baseline rate, which is a spot rate
for each of our currencies determined early in the fiscal year as
part of our forecasting process (the "2022 Baseline Rate"), and the
prior year amounts translated at the same 2022 Baseline Rate.
In addition, consistent with the assumption of a constant
currency environment, our ex-FX results exclude the impact of our
foreign currency hedging activities, as well as realized and
unrealized foreign currency transaction gains and losses. Results
on a constant currency basis, as we present them, may not be
comparable to similarly titled measures used by other
companies.
(2) Adjusted OIBDA and Adjusted OIBDA
Excluding the Impact of Currency Effects: The Company evaluates
the operating performance of its segments based on financial
measures such as revenues and Adjusted OIBDA. Adjusted OIBDA is
defined as operating income excluding: (i) employee share-based
compensation, (ii) depreciation and amortization, (iii)
restructuring and other charges, (iv) certain impairment charges,
(v) gains and losses on business and asset dispositions, (vi)
certain inter-segment eliminations related to production studios,
(vii) third-party transaction and integration costs, and (viii)
other items impacting comparability.
The Company uses this measure to assess the operating results
and performance of its segments, perform analytical comparisons,
identify strategies to improve performance, and allocate resources
to each segment. The Company believes Adjusted OIBDA is relevant to
investors because it allows them to analyze the operating
performance of each segment using the same metric management
uses.
The Company excludes share-based compensation, restructuring and
other charges, certain impairment charges, gains and losses on
business and asset dispositions and acquisition and integration
costs from the calculation of Adjusted OIBDA due to their impact on
comparability between periods. The Company also excludes the
depreciation of fixed assets and amortization of intangible assets,
as these amounts do not represent cash payments in the current
reporting period. Certain corporate expenses and inter-segment
eliminations related to production studios are excluded from
segment results to enable executive management to evaluate segment
performance based upon the decisions of segment executives.
Adjusted OIBDA should be considered in addition to, but not a
substitute for, operating income, net income, and other measures of
financial performance reported in accordance with U.S. GAAP. Refer
to the comments in footnote 1 for the methodology used to calculate
growth rates excluding foreign currency effects.
(3) Free cash flow: The Company defines
free cash flow as cash flow from operations less acquisitions of
property and equipment. The Company believes free cash flow is an
important indicator for management and investors of the Company's
liquidity, including its ability to reduce debt, make strategic
investments, and return capital to stockholders.
(4) Gross debt: the Company defines
gross debt as total debt plus finance leases. Net leverage is
calculated by dividing net debt (gross debt less cash and cash
equivalents) by the sum of the most recent four quarters Adjusted
OIBDA.
(5) Direct-to-Consumer ("DTC")
Definitions:
Next Generation Revenues: Subscription and advertising
revenues generated from the Company's DTC products, as well as
revenues from TV Everywhere, our GO applications and other digital
properties.
DTC Subscription: We define a DTC subscription as 1) a
subscription to a DTC product for which we have recognized
subscription revenue from a DTC platform; 2) a subscription
received through wholesale arrangements for which we receive a fee
for the distribution of our DTC platforms, as well as subscriptions
provided directly or through third-party platforms; and 3) a
subscription recognized by certain joint venture partners and
affiliated parties. We may refer to the aggregate number of
subscriptions across our DTC services as subscribers. A
subscription is only counted if it is on a paying status, and
excludes users on free trials. At the end of each quarter,
subscribers include the actual number of users that rolled to pay
up to seven days immediately following quarter end. Our quarterly
subscriber count continues to include Ukraine subscribers to discovery+ who are
temporarily receiving the service for free, the total of which is
not material.
(6) SG&A Expenses: Selling, general
and administrative expenses exclude employee share-based
compensation and third-party transaction and integration costs.
(7) 2022 Outlook: Warner Bros.
Discovery does not expect to be able to provide a reconciliation of
the non-GAAP forward-looking commentary to comparable GAAP measures
as, at this time, the Company cannot determine the occurrence or
impact of the adjustments, such as the effect of future changes in
foreign currency exchange rates or future acquisitions or
divestitures that would be excluded from such GAAP measures.
View original
content:https://www.prnewswire.com/news-releases/warner-bros-discovery-inc-reports-first-quarter-2022-results-301532937.html
SOURCE Warner Bros. Discovery, Inc.