Company: WBD
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437107-25-000216
Chunk: 134

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 134
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 line and same period as the hedged risk. These cash flow hedges are carried at fair market value on the Company’s consolidated balance sheets. Hedge effectiveness is assessed using the spot method, with fair market value changes recorded in other comprehensive loss until the hedged item affects earnings. Excluded components, including forward points, are included in current earnings.The following table presents the pre-tax impact of derivatives designated as cash flow hedges on income and other comprehensive loss (in millions). Three Months Ended September 30,Nine Months Ended September 30, 2025202420252024Gains (losses) recognized in accumulated other comprehensive loss:Foreign exchange - derivative adjustments$(22)$15 $20 $46 Gains (losses) reclassified into income from accumulated other comprehensive loss:Foreign exchange - distribution revenue(12)9 (13)12 Foreign exchange - advertising revenue— 1 — 1 Foreign exchange - costs of revenues3 (1)4 6 Interest rate - interest expense, net— (2)(2)(4)Interest rate - loss (gain) on extinguishment of debt, net— — (1)(4)Interest rate - other (expense) income, net— — 14 5 If current fair values of designated cash flow hedges as of September 30, 2025 remained static over the next twelve months, the amount the Company would reclassify from accumulated other comprehensive loss into income in the next twelve months would not be material for the current fiscal year. The maximum length of time the Company is hedging exposure to the variability in future cash flows is 30 years.Net Investment HedgesThe Company is exposed to foreign currency risk associated with the net assets of non-USD functional entities and uses fixed-to-fixed cross currency swaps to mitigate this risk.The following table presents the pre-tax impact of derivatives and other instruments designated as net investment hedges on other comprehensive loss (in millions). Other than amounts excluded from effectiveness testing, there were no other material gains (losses) reclassified from accumulated other comprehensive loss to income during the three and nine months ended September 30, 2025 and 2024.Three Months Ended September 30,Amount of gain (loss) recognized in AOCILocation of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)2025202420252024Cross currency swaps$(