Warner Bros. Discovery To Incur Up To $4.3 Bln In Pre-tax Restructuring Charges

(RTTNews) - Warner Bros. Discovery Inc. (WBD), formerly known as Discovery Inc, disclosed in a regulatory filling that it will incur about $3.2 billion - $4.3 billion in pre-tax restructuring charges related to Discovery's acquisition of WarnerMedia.

Warner Bros. Discovery completed its acquisition of the WarnerMedia business of AT&T Inc in April, 2022. In connection with the completion of the acquisition, it has taken actions to implement projects to achieve significant cost synergies.

As part of its plan to achieve significant cost synergies, in third quarter of 2022, Warner Bros. Discovery finalized the framework supporting its ongoing restructuring and transformation initiatives which will include strategic content programming assessments, organization restructuring, facility consolidation activities and other contract termination costs.

The company estimates it will incur about $3.2 - $4.3 billion in pre-tax restructuring charges.

The restructuring charges comprise of Strategic content programming assessments, leading to content impairment and development write-offs, of approximately $2.0 - $2.5 billion; Organization restructuring costs, including severance, retention, relocation, and other related costs:$800 million - $1.1 billion; and facility consolidation activities and other contract termination costs: $400 - $700 million.

Of the total amounts, the estimated cash expenditures from the organization restructuring, facility consolidation activities and other contract termination costs will be in the range of approximately $1.0 billion -$1.5 billion.

The company incurred $1.0 billion of pre-tax restructuring charges in second quarter 2022 and estimates $1.3 billion - $1.6 billion of additional pre-tax restructurings charges, primarily attributable to content, in third quarter of 2022.

Warner Bros. Discovery expects to complete the restructuring initiatives by the end of 2024.