Company: WBD
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437107-25-000192
Chunk: 137

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 137
---
— 454 — — 16 — Total$88 $86 $77 $142 $73 $21 $55 $155 (a) Excludes €697 million and €1,500 million of euro-denominated notes ($818 million and $1,558 million equivalent) at June 30, 2025 and December 31, 2024, respectively, designated as a net investment hedge. (See Note 8.)Derivatives Designated for Hedge Accounting Cash Flow HedgesThe Company uses foreign exchange forward contracts to mitigate the foreign currency risk related to revenues, production rebates, and production expenses. As production spend occurs or when rebate receivables are recognized, foreign forward exchange contracts designated as cash flow hedges are de-designated. Upon de-designation, gains and losses on these derivatives directly impact earnings in the same line and same period as the hedged risk. These cash flow hedges are carried at fair market value on the Company’s consolidated balance sheets. Hedge effectiveness is assessed using the spot method, with fair market value changes recorded in other comprehensive loss until the hedged item affects earnings. Excluded components, including forward points, are included in current earnings.The following table presents the pre-tax impact of derivatives designated as cash flow hedges on income and other comprehensive loss (in millions). Three Months Ended June 30,Six Months Ended June 30, 2025202420252024Gains (losses) recognized in accumulated other comprehensive loss:Foreign exchange - derivative adjustments$28 $15 $42 $31 Gains (losses) reclassified into income from accumulated other comprehensive loss:Foreign exchange - distribution revenue(5)1 (1)3 Foreign exchange - costs of revenues1 (4)1 7 Interest rate - interest expense, net(1)(1)(2)(2)Interest rate - loss on extinguishment of debt(1)(4)(1)(4)Interest rate - other income, net— 5 14 5 

19

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

If current fair values of designated cash flow hedges as of June 30, 2025 remained static over the next twelve months, the amount the Company would reclassify from accumulated other comprehensive loss into income in the next twelve months would not be material for the current fiscal year. The maximum length of