Company: WBD
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437107-25-000216
Chunk: 121

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 121
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 financial statements and disclosures.Derivatives and Hedging and Revenue from Contracts with CustomersIn September 2025, the FASB issued guidance that amends existing standards for derivatives and hedging (“Topic 815”) and revenue from contracts with customers (“Topic 606”). The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. This guidance may be applied prospectively or with a modified retrospective approach, and is effective for all annual periods beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

NOTE 2. GOODWILL AND INTANGIBLE ASSETS

We perform fair value-based impairment tests of goodwill and intangible assets on an annual basis, and between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit or an intangible asset below its carrying value.During the nine months ended September 30, 2025, the Company performed goodwill and intangible assets impairment monitoring procedures for all of its reporting units and identified no indicators of impairment. As of October 1, 2024, the date of the most recent quantitative impairment assessment, the estimated fair value of each reporting unit exceeded its carrying value.The Company continues to monitor its reporting units for triggers that could impact the recoverability of goodwill. Long-term trends and risks the Company is monitoring in its ongoing assessment include, but are not limited to, the following:

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

•the delta between market capitalization and book value, as well as volatility in the price of our common stock, including any impact from the announced Separation or review of strategic alternatives;•uncertainty related to affiliate rights renewals associated with the Company’s Global Linear Networks and Streaming reporting units;•declining levels of global GDP growth and continued softness in the U.S. linear advertising market associated with the Company’s Global Linear Networks reporting unit;•increased competition for advertising expenditures associated with the Company’s Global Linear Networks and Streaming reporting units as a result of an increase in digital advertising inventory available in the marketplace;•uncertainty surrounding the impacts related to the imposition of tariffs by the U.S.