8/5/2023 0 Comments Take the writedown“These are difficult decisions, but we are committed to being disciplined about a framework that guides our content investment for maximum return. A write-down is the reduction in the book value of an asset when its fair market value has fallen below the book value, and thus becomes an impaired asset. “We will continue to have healthy content investment, but with these two content portfolios coming together, we see smart opportunities to do this at a much more measured pace than in the previous plans,” Perrette added. “Owning the content that really resonates with people is much more important than just having lots of content,” Zaslav said on the company’s earnings call Thursday. Those savings will come in the form of merging technology systems and offices, as well as layoffs, though rethinking how and where it spends money on content is clearly also part of the plan. WBD, led by CEO David Zaslav and CFO Gunnar Wiedenfels, has said that it is seeking some $3 billion in cost savings in the next few years tied to the merger. On the company’s earnings call Thursday, WBD streaming chief JB Perrette said that kids and animation content for linear and streaming, direct-to-streaming films, and shows for TBS and TNT were most responsible for the content recalibration, “specifically content spend on shows that did not have a path to generate sufficient ratings or incremental monetization potential.” Scripted development at both networks was paused, and the company opted to not renew its deal to air the SAG Awards. TBS cut comedies Chad (which had already completed production on its season), Full Frontal With Samantha Bee, and Tracy Morgan’s The Last O.G., while TNT announced an end date for Snowpiercer. TBS and TNT have significantly cut back on programming since the merger, instead leaning into sports and unscripted fare. ![]() The filing also noted that the company had $208 million in employee termination costs in the quarter. Verizon will take a non-cash goodwill charge of 4.6 billion to writedown Oath with a balance of 4.8 billion left over in goodwill. The Q2 write-down likely includes a number of programs that were axed at TBS and TNT, and also costs related to CNN+, the ill-fated streaming service that WBD shut down just a few weeks after it launched. Sources at the company indicated that it planned to shelve the film for tax purposes, and the write-downs disclosed Friday would support that. The filmmakers of Batgirl were told that the project would not move forward earlier this month, despite it being well into postproduction. (Those films will most likely be accounted for next quarter.) It would, however, include a write-down related to the film Wonder Twins, another DC project for HBO Max that was in preproduction, and which was shut down in May, before Q2 ended. A company will periodically review the value of this asset and if it’s forced to admit the possibility that the benefits of the acquisition may never be realized, accounting rules require the goodwill asset to written down.And that dramatic figure probably does not include Batgirl or Scoob!: Holiday Haunt, two movies that, until this week, were slated to debut on the HBO Max streaming platform. Goodwill is recorded as an asset on a company’s balance sheet to record the premium paid for an acquisition over its book value. The Kraft Heinz impairment charge was the seventh largest since 2009. Those issues include a material cash flow restatement and material weakness in internal controls in 2017, and an immaterial $40 million revenue recognition restatement related to the adoption of the new revenue recognition standard.īut it’s the staggering $15.4 billion impairment charge, made up of a $7.1 billion goodwill impairment in US Refrigerated and Canada Retail unit and $8.3 billion related to Kraft and Oscar Mayer intangible assets impairment, that drove the company to report a $12.6 billion loss after taxes. , the fifth-largest food and beverage company in the world formed with the merger in 2015 with the significant support of Warren Buffett’s Berkshire Hathaway and global investment firm 3G Capital, has had several accounting issues since its birth. The details of what that issue could be were not provided in the earnings release or on the conference call,” wrote Audit Analytics. ![]() “In other words, there was another outstanding issue that triggered SEC scrutiny. Research firm Audit Analytics, in a note to subscribers on Friday, pointed out that, based on the company’s disclosure, the SEC’s investigation preceded the discovery of the error. ![]() See also: Warren Buffett’s Berkshire Hathaway stock falls as big bet on Kraft Heinz sours Read: Kraft Heinz loses a lot of cheese as earnings send stock plunging to record low
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