(State or other jurisdiction of incorporation) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
99.1 | |||||
101 | Inline XBRL Instance Document - the instance document does not appear in the Interactive Date File because its XBRL tags are embedded within the Inline XBRL document | ||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
Discovery, Inc. | ||||||||||||||||||||
Date: August 5, 2020 | By: | /s/ Gunnar Wiedenfels | ||||||||||||||||||
Gunnar Wiedenfels | ||||||||||||||||||||
Chief Financial Officer | ||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||||||||
Dollars in millions, except per share amounts | 2020 | 2019 | % Change | Ex-FX(1) | 2020 | 2019 | % Change | Ex-FX(1) | ||||||||||||||||||||||||||||||||||||
Total revenue | $ | 2,541 | $ | 2,885 | (12) | % | (11) | % | $ | 5,224 | $ | 5,592 | (7) | % | (5) | % | ||||||||||||||||||||||||||||
Net income available to Discovery, Inc. | $ | 271 | $ | 947 | (71) | % | $ | 648 | $ | 1,331 | (51) | % | ||||||||||||||||||||||||||||||||
U.S. Networks Adjusted OIBDA | 1,062 | 1,126 | (6) | % | 2,078 | 2,187 | (5) | % | ||||||||||||||||||||||||||||||||||||
International Networks Adjusted OIBDA | 193 | 286 | (33) | % | (29) | % | 400 | 505 | (21) | % | (18) | % | ||||||||||||||||||||||||||||||||
Total Adjusted OIBDA(5) | $ | 1,127 | $ | 1,281 | (12) | % | (11) | % | $ | 2,240 | $ | 2,440 | (8) | % | (7) | % | ||||||||||||||||||||||||||||
Diluted EPS | $ | 0.40 | $ | 1.33 | (70) | % | $ | 0.95 | $ | 1.86 | (49) | % | ||||||||||||||||||||||||||||||||
Adjusted EPS | $ | 0.77 | $ | 0.98 | (21) | % | $ | 1.64 | $ | 1.83 | (10) | % | ||||||||||||||||||||||||||||||||
Free cash flow | $ | 879 | $ | 596 | 47 | % | $ | 1,109 | $ | 1,094 | 1 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
Dollars in millions | 2020 | 2019 | % Change | 2020 | 2019 | % Change | |||||||||||||||||||||||||||||
Advertising | $ | 997 | $ | 1,153 | (14) | % | $ | 2,023 | $ | 2,175 | (7) | % | |||||||||||||||||||||||
Distribution | 739 | 688 | 7 | % | 1,447 | 1,385 | 4 | % | |||||||||||||||||||||||||||
Other | 20 | 22 | (9) | % | 42 | 55 | (24) | % | |||||||||||||||||||||||||||
Total revenues | $ | 1,756 | $ | 1,863 | (6) | % | $ | 3,512 | $ | 3,615 | (3) | % | |||||||||||||||||||||||
Costs of revenues, excluding depreciation & amortization | 442 | 441 | — | % | 889 | 863 | 3 | % | |||||||||||||||||||||||||||
Selling, general & administrative(9) | 252 | 296 | (15) | % | 545 | 565 | (4) | % | |||||||||||||||||||||||||||
Adjusted OIBDA | $ | 1,062 | $ | 1,126 | (6) | % | $ | 2,078 | $ | 2,187 | (5) | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||
Dollars in millions | 2020 | 2019 | % Change | Ex-FX | 2020 | 2019 | % Change | Ex-FX | |||||||||||||||||||||||||||||||||
Advertising | $ | 276 | $ | 466 | (41) | % | (37) | % | $ | 652 | $ | 859 | (24) | % | (20) | % | |||||||||||||||||||||||||
Distribution | 486 | 518 | (6) | % | (2) | % | 1,001 | 1,045 | (4) | % | (1) | % | |||||||||||||||||||||||||||||
Other | 21 | 36 | (42) | % | (43) | % | 53 | 68 | (22) | % | (22) | % | |||||||||||||||||||||||||||||
Total revenues | $ | 783 | $ | 1,020 | (23) | % | (20) | % | $ | 1,706 | $ | 1,972 | (13) | % | (10) | % | |||||||||||||||||||||||||
Costs of revenues, excluding depreciation & amortization | 365 | 497 | (27) | % | (23) | % | 835 | 1,004 | (17) | % | (14) | % | |||||||||||||||||||||||||||||
Selling, general & administrative(9) | 225 | 237 | (5) | % | (1) | % | 471 | 463 | 2 | % | 6 | % | |||||||||||||||||||||||||||||
Adjusted OIBDA | $ | 193 | $ | 286 | (33) | % | (29) | % | $ | 400 | $ | 505 | (21) | % | (18) | % |
Media | Investor Relations | ||||
Nathaniel Brown (212) 548-5959 | Andrew Slabin (212) 548-5544 | ||||
nathaniel_brown@discovery.com | andrew_slabin@discovery.com | ||||
Peter Lee (212) 548-5907 | |||||
peter_lee@discovery.com |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||||
Advertising | $ | 1,273 | $ | 1,619 | $ | 2,675 | $ | 3,034 | |||||||||||||||
Distribution | 1,225 | 1,206 | 2,448 | 2,430 | |||||||||||||||||||
Other | 43 | 60 | 101 | 128 | |||||||||||||||||||
Total revenues | 2,541 | 2,885 | 5,224 | 5,592 | |||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Costs of revenues, excluding depreciation and amortization | 810 | 938 | 1,728 | 1,868 | |||||||||||||||||||
Selling, general and administrative | 635 | 709 | 1,280 | 1,335 | |||||||||||||||||||
Depreciation and amortization | 334 | 320 | 660 | 692 | |||||||||||||||||||
Impairment of goodwill and other intangible assets | 38 | — | 38 | — | |||||||||||||||||||
Restructuring and other charges | 7 | 7 | 22 | 12 | |||||||||||||||||||
Total costs and expenses | 1,824 | 1,974 | 3,728 | 3,907 | |||||||||||||||||||
Operating income | 717 | 911 | 1,496 | 1,685 | |||||||||||||||||||
Interest expense, net | (161) | (161) | (324) | (343) | |||||||||||||||||||
Loss on extinguishment of debt | (71) | (23) | (71) | (28) | |||||||||||||||||||
Loss from equity investees, net | (23) | (20) | (44) | (9) | |||||||||||||||||||
Other (expense) income, net | (6) | 9 | (64) | (18) | |||||||||||||||||||
Income before income taxes | 456 | 716 | 993 | 1,287 | |||||||||||||||||||
Income tax (expense) benefit | (156) | 271 | (286) | 118 | |||||||||||||||||||
Net income | 300 | 987 | 707 | 1,405 | |||||||||||||||||||
Net income attributable to noncontrolling interests | (25) | (36) | (53) | (65) | |||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | (4) | (4) | (6) | (9) | |||||||||||||||||||
Net income available to Discovery, Inc. | $ | 271 | $ | 947 | $ | 648 | $ | 1,331 | |||||||||||||||
Net income per share allocated to Discovery, Inc. Series A, B and C common stockholders: | |||||||||||||||||||||||
Basic | $ | 0.40 | $ | 1.33 | $ | 0.96 | $ | 1.86 | |||||||||||||||
Diluted | $ | 0.40 | $ | 1.33 | $ | 0.95 | $ | 1.86 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 508 | 528 | 513 | 526 | |||||||||||||||||||
Diluted | 674 | 716 | 680 | 715 |
June 30, 2020 | December 31, 2019 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 1,683 | $ | 1,552 | |||||||
Receivables, net | 2,473 | 2,633 | |||||||||
Content rights and prepaid license fees, net | 113 | 579 | |||||||||
Prepaid expenses and other current assets | 448 | 453 | |||||||||
Total current assets | 4,717 | 5,217 | |||||||||
Noncurrent content rights, net | 3,540 | 3,129 | |||||||||
Property and equipment, net | 1,088 | 951 | |||||||||
Goodwill | 12,987 | 13,050 | |||||||||
Intangible assets, net | 8,091 | 8,667 | |||||||||
Equity method investments | 530 | 568 | |||||||||
Other noncurrent assets | 2,136 | 2,153 | |||||||||
Total assets | $ | 33,089 | $ | 33,735 | |||||||
LIABILITIES AND EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 367 | $ | 463 | |||||||
Accrued liabilities | 1,607 | 1,678 | |||||||||
Deferred revenues | 263 | 489 | |||||||||
Current portion of debt | 339 | 609 | |||||||||
Total current liabilities | 2,576 | 3,239 | |||||||||
Noncurrent portion of debt | 14,944 | 14,810 | |||||||||
Deferred income taxes | 1,463 | 1,691 | |||||||||
Other noncurrent liabilities | 2,306 | 2,029 | |||||||||
Total liabilities | 21,289 | 21,769 | |||||||||
Commitments and contingencies | |||||||||||
Redeemable noncontrolling interests | 442 | 442 | |||||||||
Equity: | |||||||||||
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; 5 shares issued and outstanding | — | — | |||||||||
Series A common stock: $0.01 par value; 1,700 shares authorized; 163 and 161 shares issued; and 160 and 158 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; 546 and 547 shares issued; and 340 and 360 shares outstanding | 5 | 5 | |||||||||
Additional paid-in capital | 10,798 | 10,747 | |||||||||
Treasury stock, at cost: 209 and 190 shares | (7,897) | (7,374) | |||||||||
Retained earnings | 7,980 | 7,333 | |||||||||
Accumulated other comprehensive loss | (1,021) | (822) | |||||||||
Total Discovery, Inc. stockholders' equity | 9,867 | 9,891 | |||||||||
Noncontrolling interests | 1,491 | 1,633 | |||||||||
Total equity | 11,358 | 11,524 | |||||||||
Total liabilities and equity | $ | 33,089 | $ | 33,735 |
Six Months Ended June 30, | |||||||||||
2020 | 2019 | ||||||||||
Operating Activities | |||||||||||
Net income | 707 | 1,405 | |||||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Content rights amortization and impairment | 1,355 | 1,378 | |||||||||
Depreciation and amortization | 660 | 692 | |||||||||
Deferred income taxes | (188) | (554) | |||||||||
Impairment of goodwill and other intangible assets | 38 | — | |||||||||
Share-based compensation expense | 30 | 69 | |||||||||
Equity in losses of equity method investee companies, including cash distributions | 71 | 37 | |||||||||
Unrealized loss from derivative instruments, net | 22 | — | |||||||||
Loss on extinguishment of debt | 71 | 28 | |||||||||
Remeasurement gain on previously held equity interest | — | (14) | |||||||||
Realized gain from derivative instruments, net | (21) | — | |||||||||
Other, net | 41 | 50 | |||||||||
Changes in operating assets and liabilities, net of acquisitions and dispositions: | |||||||||||
Receivables, net | 122 | (231) | |||||||||
Content rights and payables, net | (1,386) | (1,570) | |||||||||
Accounts payable, accrued and other liabilities | (174) | (132) | |||||||||
Foreign currency, prepaid expenses and other assets, net | (22) | 58 | |||||||||
Cash provided by operating activities | 1,326 | 1,216 | |||||||||
Investing Activities | |||||||||||
Investments in and advances to equity investments | (81) | (147) | |||||||||
Purchases of property and equipment | (217) | (122) | |||||||||
Proceeds from dissolution of joint venture | 65 | 105 | |||||||||
Business acquisitions, net of cash acquired | — | (60) | |||||||||
Other investing activities, net | 79 | 4 | |||||||||
Cash used in investing activities | (154) | (220) | |||||||||
Financing Activities | |||||||||||
Principal repayments of debt, including discount payment | (2,164) | (1,740) | |||||||||
Borrowings from debt, net of discount and issuance costs | 1,979 | 1,482 | |||||||||
Repurchases of stock | (527) | — | |||||||||
Distributions to noncontrolling interests and redeemable noncontrolling interests | (202) | (191) | |||||||||
Principal repayments of revolving credit facility | (500) | (225) | |||||||||
Borrowings under revolving credit facility | 500 | — | |||||||||
Commercial paper borrowings, net | — | 173 | |||||||||
Other financing activities, net | (84) | (142) | |||||||||
Cash used in financing activities | (998) | (643) | |||||||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 12 | (18) | |||||||||
Net change in cash, cash equivalents, and restricted cash | 186 | 335 | |||||||||
Cash, cash equivalents, and restricted cash, beginning of period | 1,552 | 986 | |||||||||
Cash, cash equivalents, and restricted cash, end of period | $ | 1,738 | $ | 1,321 |
Three Months Ended June 30, 2020 | |||||||||||||||||||||||
U.S. Networks | International Networks | Corporate, Inter-segment Eliminations, and Other | Total | ||||||||||||||||||||
Net income available to Discovery, Inc. | $ | 271 | |||||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | 4 | ||||||||||||||||||||||
Net income attributable to noncontrolling interests | 25 | ||||||||||||||||||||||
Income tax expense | 156 | ||||||||||||||||||||||
Other expense, net | 6 | ||||||||||||||||||||||
Loss on extinguishment of debt | 71 | ||||||||||||||||||||||
Loss from equity investees, net | 23 | ||||||||||||||||||||||
Interest expense, net | 161 | ||||||||||||||||||||||
Operating income (loss) | $ | 836 | $ | 68 | $ | (187) | $ | 717 | |||||||||||||||
Depreciation and amortization | 225 | 84 | 25 | 334 | |||||||||||||||||||
Impairment of goodwill and other intangible assets | — | 38 | — | 38 | |||||||||||||||||||
Restructuring and other charges | — | 3 | 4 | 7 | |||||||||||||||||||
Employee share-based compensation | — | — | 31 | 31 | |||||||||||||||||||
Inter-segment eliminations | 1 | — | (1) | — | |||||||||||||||||||
Total Adjusted OIBDA | $ | 1,062 | $ | 193 | $ | (128) | $ | 1,127 |
Three Months Ended June 30, 2019 | |||||||||||||||||||||||
U.S. Networks | International Networks | Corporate, Inter-segment Eliminations, and Other | Total | ||||||||||||||||||||
Net income available to Discovery, Inc. | $ | 947 | |||||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | 4 | ||||||||||||||||||||||
Net income attributable to noncontrolling interests | 36 | ||||||||||||||||||||||
Income tax (benefit) | (271) | ||||||||||||||||||||||
Other (income), net | (9) | ||||||||||||||||||||||
Loss from equity investees, net | 20 | ||||||||||||||||||||||
Loss on extinguishment of debt | 23 | ||||||||||||||||||||||
Interest expense, net | 161 | ||||||||||||||||||||||
Operating income (loss) | $ | 898 | $ | 180 | $ | (167) | $ | 911 | |||||||||||||||
Depreciation and amortization | 222 | 82 | 16 | 320 | |||||||||||||||||||
Restructuring and other charges | 3 | 6 | (2) | 7 | |||||||||||||||||||
Transaction and integration costs | — | — | 4 | 4 | |||||||||||||||||||
Employee share-based compensation | — | — | 39 | 39 | |||||||||||||||||||
Inter-segment eliminations | 3 | 18 | (21) | — | |||||||||||||||||||
Total Adjusted OIBDA | $ | 1,126 | $ | 286 | $ | (131) | $ | 1,281 |
Six Months Ended June 30, 2020 | |||||||||||||||||||||||
U.S. Networks | International Networks | Corporate, Inter-segment Eliminations, and Other | Total | ||||||||||||||||||||
Net income available to Discovery, Inc. | $ | 648 | |||||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | 6 | ||||||||||||||||||||||
Net income attributable to noncontrolling interests | 53 | ||||||||||||||||||||||
Income tax expense | 286 | ||||||||||||||||||||||
Other expense, net | 64 | ||||||||||||||||||||||
Loss on extinguishment of debt | 71 | ||||||||||||||||||||||
Loss from equity investees, net | 44 | ||||||||||||||||||||||
Interest expense, net | 324 | ||||||||||||||||||||||
Operating income (loss) | $ | 1,613 | $ | 192 | $ | (309) | $ | 1,496 | |||||||||||||||
Depreciation and amortization | 451 | 166 | 43 | 660 | |||||||||||||||||||
Impairment of goodwill and other intangible assets | — | 38 | — | 38 | |||||||||||||||||||
Restructuring and other charges | 12 | 4 | 6 | 22 | |||||||||||||||||||
Employee share-based compensation | — | — | 24 | 24 | |||||||||||||||||||
Inter-segment eliminations | 2 | — | (2) | — | |||||||||||||||||||
Total Adjusted OIBDA | $ | 2,078 | $ | 400 | $ | (238) | $ | 2,240 |
Six Months Ended June 30, 2019 | |||||||||||||||||||||||
U.S. Networks | International Networks | Corporate, Inter-segment Eliminations, and Other | Total | ||||||||||||||||||||
Net income available to Discovery, Inc. | $ | 1,331 | |||||||||||||||||||||
Net income attributable to redeemable noncontrolling interests | 9 | ||||||||||||||||||||||
Net income attributable to noncontrolling interests | 65 | ||||||||||||||||||||||
Income tax (benefit) | (118) | ||||||||||||||||||||||
Other expense, net | 18 | ||||||||||||||||||||||
Loss on extinguishment of debt | 28 | ||||||||||||||||||||||
Loss from equity investees, net | 9 | ||||||||||||||||||||||
Interest expense, net | 343 | ||||||||||||||||||||||
Operating income (loss) | $ | 1,685 | $ | 339 | $ | (339) | $ | 1,685 | |||||||||||||||
Depreciation and amortization | 495 | 164 | 33 | 692 | |||||||||||||||||||
Restructuring and other charges | 7 | 10 | (5) | 12 | |||||||||||||||||||
Transaction and integration costs | — | — | 11 | 11 | |||||||||||||||||||
Employee share-based compensation | — | — | 69 | 69 | |||||||||||||||||||
Inter-segment eliminations | — | 21 | (21) | — | |||||||||||||||||||
Settlement of a withholding tax claim | — | (29) | — | (29) | |||||||||||||||||||
Total Adjusted OIBDA | $ | 2,187 | $ | 505 | $ | (252) | $ | 2,440 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||||||||
Diluted net income per share allocated to Discovery, Inc. Series A, B and C common stockholders: | $ | 0.40 | $ | 1.33 | $ | (0.93) | (70) | % | $ | 0.95 | $ | 1.86 | $ | (0.91) | (49) | % | |||||||||||||||||||||||||
Per share impacts, net of tax: | |||||||||||||||||||||||||||||||||||||||||
Amortization of acquisition-related intangible assets | 0.30 | 0.28 | 0.02 | 7 | % | 0.60 | 0.62 | (0.02) | (3) | % | |||||||||||||||||||||||||||||||
Restructuring and other charges | 0.01 | 0.01 | — | — | % | 0.03 | 0.02 | 0.01 | 50 | % | |||||||||||||||||||||||||||||||
Impairment of goodwill and other intangible assets | 0.06 | — | 0.06 | NM | 0.06 | — | 0.06 | NM | |||||||||||||||||||||||||||||||||
Legal entity restructuring, deferred tax impact | — | (0.64) | 0.64 | NM | — | (0.64) | 0.64 | NM | |||||||||||||||||||||||||||||||||
Settlement of a withholding tax claim | — | — | — | NM | — | (0.03) | 0.03 | NM | |||||||||||||||||||||||||||||||||
Adjusted earnings per diluted share | $ | 0.77 | $ | 0.98 | $ | (0.21) | (21) | % | $ | 1.64 | $ | 1.83 | $ | (0.19) | (10) | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||
2020 | 2019 | $ Change | % Change | 2020 | 2019 | $ Change | % Change | ||||||||||||||||||||||||||||||||||
Cash provided by operating activities | $ | 991 | $ | 674 | $ | 317 | 47 | % | $ | 1,326 | $ | 1,216 | $ | 110 | 9 | % | |||||||||||||||||||||||||
Purchases of property and equipment | (112) | (78) | (34) | 44 | % | (217) | (122) | (95) | (78) | % | |||||||||||||||||||||||||||||||
Free cash flow | $ | 879 | $ | 596 | $ | 283 | 47 | % | $ | 1,109 | $ | 1,094 | $ | 15 | 1 | % |
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