Company: WBD
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437107-25-000192
Chunk: 136

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 136
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00 to 1.00 and a maximum consolidated leverage ratio of 4.50 to 1.00. As of June 30, 2025, the Company was in compliance with all applicable covenants and there were no events of default under the Credit Agreement. 

NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS

In the normal course of business, the Company is exposed to foreign currency exchange rate market risk and interest rate fluctuations. As part of its risk management strategy, the Company uses derivative financial instruments, primarily foreign currency forward contracts, fixed-to-fixed currency swaps, total return swaps and interest rate swaps to hedge certain foreign currency, market value, and interest rate exposures. The Company’s objective is to reduce earnings volatility by offsetting gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them. The Company does not enter into or hold derivative financial instruments for speculative trading purposes.

18

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

There were no amounts eligible to be offset under master netting agreements as of June 30, 2025 and December 31, 2024. The fair value of the Company’s derivative financial instruments was determined using a market-based approach (Level 2). The following table summarizes the Company’s derivative financial instruments recorded on its consolidated balance sheets (in millions).June 30, 2025December 31, 2024Fair ValueFair ValueNotionalPrepaid expenses and other current assetsOther non-current assetsAccounts payable and accrued liabilitiesOther non-current liabilitiesNotionalPrepaid expenses and other current assetsOther non-current assetsAccounts payable and accrued liabilitiesOther non-current liabilitiesCash flow hedges:Foreign exchange$2,363 $54 $84 $60 $41 $1,608 $47 $14 $25 $28 Net investment hedges: (a)Cross-currency swaps461 7 — — 15 421 6 — — 4 No hedging designation:Foreign exchange358 6 2 14 76 951 18 7 14 122 Cross-currency swaps230 4 — — 10 210 2 — — 1 Interest rate swaps2,500 — — 3 — — — — — — Total return swaps477 17 — —