Company: WBD
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437107-25-000192
Chunk: 103

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 4
Chunk 103
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 our financial condition, results of operations and cash flows.

 In June 2025, the Company announced its plans to separate the Company, in a tax-free transaction, into two publicly traded companies. The Separation is expected to be completed by mid-2026, though no assurance can be given as to whether the Separation will occur in accordance with the expected plans or anticipated timeline, or at all. Additionally, the specific assets, liabilities and entities to be separated have not yet been determined and may be changed, and we may determine to abandon any efforts with respect to the Separation at any time for any reason. If the Separation occurs, the Company may retain up to 19.9% of the shares of the spun-off company (“Spinco”), which it may use to de-lever the Company’s balance sheet in a tax-efficient manner. No assurance can be given that we will be able to dispose of the shares in Spinco retained by us on favorable terms, or at all, or the timing thereof.

The form or other terms of the Separation may change over time, including with respect to the scope of the businesses to be separated or retained by us. The final determination to separate is subject to approval by the Board, the execution of definitive documentation, and satisfaction of customary conditions, including the effectiveness of appropriate filings with the SEC, receipt of one or more opinions as to the tax-free nature of the Separation, the completion of the requisite financial statements and the availability of financing. Additionally, no assurance can be given that the intended tax treatment will be achieved or that the Separation will qualify as tax-free to our shareholders for U.S. federal income tax purposes. Challenges in satisfying any of these conditions, along with various other factors, including changes in the law, the macroeconomic environment, competitive conditions, regulatory approvals or clearances, the uncertainty of the financial markets, could delay or prevent the completion of the Separation or cause the Separation to occur on terms or conditions that are different or less favorable than expected. 

If the Separation is not completed in a timely or favorable manner or at all, our ongoing business may be adversely affected including as follows:

•we may experience negative reactions from the financial markets, and our stock price could decline;

•we may experience negative reactions from employees, customers, suppliers or other third parties;

•we may be subject to litigation, which could result in significant costs and expenses;

•management’s focus may have been diverted from day-to-day business operations and pursuing other opportunities that could have