Company: WBD
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437107-25-000192
Chunk: 56

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 56
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ATED FINANCIAL STATEMENTS(unaudited)

NOTE 12. INCOME TAXES

Income tax (expense) benefit was $(866) million and $7 million for the three months ended June 30, 2025 and 2024, respectively and $(881) million and $(129) million for the six months ended June 30, 2025 and 2024, respectively. The increase in income tax expense for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily attributable to higher pre-tax book income, including a $3.0 billion gain recognized in connection with the Tender Offers in 2025 (See Note 8) and a non-cash goodwill impairment charge of $9.1 billion recorded in 2024, the majority of which was not deductible for tax purposes.Income tax expense for the three and six months ended June 30, 2025, reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to the effect of foreign operations and changes in unrecognized tax benefits.As of June 30, 2025 and December 31, 2024, the Company’s reserves for unrecognized tax benefits totaled $2,479 million and $2,371 million, respectively.As of June 30, 2025 and December 31, 2024, the Company had accrued $815 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 June 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 was signed into law in the U.S., which includes a broad range of tax reform provisions