Company: WBD
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437107-25-000216
Chunk: 54

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 54
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18 7 14 122 Cross-currency swaps225 4 — — 12 210 2 — — 1 Interest rate swaps2,500 1 — 2 — — — — — — Total return swaps496 11 — — — 454 — — 16 — Total$71 $64 $59 $142 $73 $21 $55 $155 (a) Excludes €781 million and €1,500 million of euro-denominated notes ($918 million and $1,558 million equivalent) at September 30, 2025 and December 31, 2024, respectively, designated as a net investment hedge.

19

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

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 September 30,Nine Months Ended September 30, 2025202420252024Gains (losses) recognized in accumulated other comprehensive loss:Foreign exchange - derivative adjustments$(22)$15 $20 $46 Gains (losses) reclassified into income from accumulated other comprehensive loss:Foreign exchange - distribution revenue(12)9 (13)12 Foreign exchange - advertising revenue— 1 — 1 Foreign exchange - costs of revenues3 (1)4 6 Interest rate - interest expense, net— (2)(2)(4)Interest rate - loss (gain) on extinguishment of debt, net— — (1