Company: WBD
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437107-25-000216
Chunk: 56

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 1
Chunk 56
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 the fair value gains and losses on these investments and uses total return swaps to mitigate this risk. The gains and losses associated with these swaps are recorded to selling, general and administrative expenses, offsetting the deferred compensation investment gains and losses.The Company is also exposed to the risk of secured overnight financing rate changes in connection with securitization interest paid on the receivables securitization program. To mitigate this risk, the Company entered into $2.5 billion notional of non-designated interest rate swaps in the first half of 2025. The gains and losses on these derivatives are recorded to selling, general and administrative expenses, offsetting securitization interest expense. In June 2025, the Company unwound foreign exchange forward contracts with a notional value of €450 million associated with the Company’s euro-denominated debt that was partially repaid in association with the Tender Offers. The Company also entered into and subsequently unwound and settled foreign exchange forward contracts with a notional value of €450 million to hedge the tender payment for the Company’s euro-denominated debt and recorded a gain of $9 million to other (expense) income, net.The following table presents the pretax gains (losses) on derivatives not designated as hedges and recognized in selling, general and administrative expense and other (expense) income, net in the consolidated statements of operations (in millions).Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Interest rate swaps$2 $(29)$— $(1)Total return swaps24 21 44 41 Total in selling, general and administrative expense26 (8)44 40 Interest rate swaps— — — (3)Cross-currency swaps(3)— (10)— Foreign exchange derivatives — (6)34 (31)Total in other (expense) income, net(3)(6)24 (34)Total$23 $(14)$68 $6 

NOTE 10. FAIR VALUE MEASUREMENTS

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants. Assets and liabilities carried at fair value are classified in the following three categories:Level 1–Quoted prices for identical instruments in active markets.Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not