Company: WBD
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437107-25-000216
Chunk: 59

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 59
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 (See Note 8) and the absence of a non-cash goodwill impairment charge of $9.1 billion recorded in 2024, the majority of which was not deductible for tax purposes. The increase in tax expense was further impacted by the effect of foreign operations, including a net tax expense related to prior year tax positions finalized in tax returns filed during the three months ended September 30, 2025.Income tax expense for the three and nine months ended September 30, 2025, reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to the effect of foreign operations, changes in unrecognized tax benefits, and state and local income taxes.As of September 30, 2025 and December 31, 2024, the Company’s reserves for unrecognized tax benefits totaled $2,536 million and $2,371 million, respectively.As of September 30, 2025 and December 31, 2024, the Company had accrued $865 million and $732 million, respectively, of total interest and penalties payable related to unrecognized tax benefits. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.The Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. As of September 30, 2025, we recognized an immaterial income tax expense for Pillar Two GloBE minimum tax. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability.On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States, introducing a broad range of tax reform provisions. The impact of the OBBBA primarily affected the Company’s deferred tax liabilities and has been reflected in the Company’s financial statements for the period ended September 30, 2025. The Company continues to monitor regulatory guidance related to the implementation of the OBBBA and will update its tax positions as necessary in future periods.

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WARNER BROS. DISCOVERY, INC.NOTES TO CONSOLIDATED