Warner Bros Discovery Inc (WBD)

Interest coverage

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-11,390,000	-11,612,000	-10,892,000	-1,240,000	-1,602,000	-3,492,000	-5,859,000	-8,701,000	-7,230,000	-4,968,000	-2,298,000	2,276,000	1,875,000	2,170,000	2,309,000	1,455,000	1,054,000	1,210,000	642,000	1,552,000
Interest expense (ttm)	US$ in thousands	2,017,000	2,052,000	2,132,000	2,188,000	2,244,000	2,277,000	2,258,000	2,195,000	1,777,000	1,373,000	977,000	623,000	633,000	642,000	644,000	648,000	648,000	647,000	649,000	649,000
Interest coverage		-5.65	-5.66	-5.11	-0.57	-0.71	-1.53	-2.59	-3.96	-4.07	-3.62	-2.35	3.65	2.96	3.38	3.59	2.25	1.63	1.87	0.99	2.39

December 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-11,390,000K ÷ $2,017,000K
= -5.65

The interest coverage ratio for Warner Bros Discovery Inc has shown significant fluctuations over the reporting periods.

Starting from March 31, 2020, the interest coverage ratio was at 2.39, indicating that the company was able to cover its interest expenses 2.39 times over with its operating income. However, this ratio decreased sharply to 0.99 by June 30, 2020, signaling a potential strain on the company's ability to cover its interest obligations.

Subsequently, there were improvements in the interest coverage ratio, reaching a peak of 3.65 by March 31, 2022. This suggests that the company's operating income was more than sufficient to cover its interest expenses during that period.

However, from June 30, 2022 onwards, the interest coverage ratio turned negative, indicating that Warner Bros Discovery Inc's operating income was not enough to cover its interest payments. The trend continued with consistently negative interest coverage ratios up to December 31, 2024, implying financial challenges in meeting interest obligations from operating income alone.

Overall, the downward trend in interest coverage ratios from positive values to negative values signifies a deteriorating financial position for Warner Bros Discovery Inc in terms of its ability to service its interest payments with its operating income. This may raise concerns among investors and creditors about the company's financial health and ability to manage its debt obligations.