Company: WBD
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437107-25-000096
Chunk: 38

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 Facility or issuances under the commercial paper program.

The Credit Agreement contains customary representations and warranties as well as affirmative and negative covenants, and also requires maintenance of a minimum consolidated interest coverage ratio of 3.00 to 1.00 and a maximum consolidated leverage ratio of 4.50 to 1.00. As of March 31, 2025, the Company was in compliance with all applicable covenants and there were no events of default under the Credit Agreement. 

16

WARNER BROS. DISCOVERY, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(unaudited)

NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS

In the normal course of business, the Company is exposed to foreign currency exchange rate market risk and interest rate fluctuations. As part of its risk management strategy, the Company uses derivative financial instruments, primarily foreign currency forward contracts, fixed-to-fixed currency swaps, total return swaps and interest rate swaps to hedge certain foreign currency, market value, and interest rate exposures. The Company’s objective is to reduce earnings volatility by offsetting gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them. The Company does not enter into or hold derivative financial instruments for speculative trading purposes.There were no amounts eligible to be offset under master netting agreements as of March 31, 2025 and December 31, 2024. The fair value of the Company’s derivative financial instruments was determined using a market-based approach (Level 2). The following table summarizes the Company’s derivative financial instruments recorded on its consolidated balance sheets (in millions).March 31, 2025December 31, 2024Fair ValueFair ValueNotionalPrepaid expenses and other current assetsOther non-current assetsAccounts payable and accrued liabilitiesOther non-current liabilitiesNotionalPrepaid expenses and other current assetsOther non-current assetsAccounts payable and accrued liabilitiesOther non-current liabilitiesCash flow hedges:Foreign exchange$2,557 $36 $25 $31 $21 $1,608 $47 $14 $25 $28 Net investment hedges: (a)Cross-currency swaps434 6 — — 6 421 6 — — 4 No hedging designation:Foreign exchange944 16 6 13 108 951 18 7 14 122 Cross-currency swaps216 2 — — 2 210 2