Company: WBD
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437107-25-000216
Chunk: 168

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 168
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19 4 119 242 Operating loss$(689)$(601)$(2,008)$(2,050)

Corporate operations primarily consist of executive management and administrative support services, which are recorded in selling, general and administrative expense, as well as substantially all of our share-based compensation and third-party transaction and integration costs.

Adjusted EBITDA increased 14% for the three and nine months ended September 30, 2025. The increase for the three months ended September 30, 2025 was primarily attributable to lower corporate overhead expense. The increase for the nine months ended September 30, 2025 was primarily attributable to lower facility costs due to office consolidations and closures, lower personnel costs, and the release of previously recorded non-income tax reserves.

43

Inter-segment Eliminations

The following table presents our inter-segment eliminations by revenue and expense, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating loss (in millions).

 Three Months Ended September 30,Nine Months Ended September 30, 2025202420252024Inter-segment revenue eliminations$(793)$(705)$(3,144)$(1,731)Inter-segment expense eliminations(779)(702)(2,678)(1,766)Adjusted EBITDA - Inter-segment eliminations (14)(3)(466)35 Impairment and amortization of fair value step-up for content4 64 45 217 Operating loss$(18)$(67)$(511)$(182)

Inter-segment revenue and expense eliminations primarily represent inter-segment content transactions and marketing and promotion activity between reportable segments. In our current segment structure, in certain instances, production and distribution activities are in different segments. Inter-segment content transactions are presented at market value (i.e., the segment producing and/or licensing the content reports revenue and profit from inter-segment transactions in a manner similar to the reporting of third-party transactions, and the required eliminations are reported on the separate “Eliminations” line when presenting our summary of segment results). Generally, timing of revenue recognition is similar to the reporting of third-party transactions. The segment distributing the content, e.g., via our streaming or linear services, capitalizes the cost of inter-segment content transactions, including “mark-ups” and amortizes the costs over the shorter of the license term, if applicable, or the expected period of use. The content amortization expense related to the inter-segment profit is