Credit FAQ: How Does S&P Global Ratings Calculate Leverage For Major U.S. Media Companies? (2020 Update)

Investors are curious about how S&P Global Ratings calculates adjusted leverage for major U.S. media companies. To address these questions, we are providing our annual update to our analytical adjustments for EBITDA and debt for the five major U.S. media companies we rate: Discovery Inc., Fox Corp., Netflix Inc., ViacomCBS Inc., and The Walt Disney Co. Two major acquisitions closed in 2019 (CBS's merger with Viacom and Disney's acquisition of much of Twenty-First Century Fox Inc.). All five companies finally adopted the new lease accounting standard, Financial Accounting Standards Board (FASB) 2016-02, "Leases (Topic 842)" (Disney was the last, having done so as of its quarter ended Dec. 28, 2019). Finally, three companies (Discovery, Disney, and Netflix) have adopted Accounting

...Amount (mil. $) Total operating income 3,009 Restructuring and other charges 26 Impairment of goodwill 155 Depreciation and amortization 1,347 Employee share-based compensation 137 Transaction and integration costs 26 Settlement of a withholding tax claim (29) Company-reported adjusted OIBDA 4,671...

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