Company: WBD
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437107-25-000192
Chunk: 53

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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)Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)2025202420252024Cross currency swaps$(12)$39 Interest expense, net$6 $12 Euro-denominated notes (foreign denominated debt)(208)21 N/A— — Sterling notes (foreign denominated debt)— 4 N/A— — Total$(220)$64 $6 $12 Derivatives Not Designated for Hedge AccountingThe Company has deferred compensation plans that have risk related to 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. During the three months ended June 30, 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 income, net. (See Note 8.)

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

The following table presents the pretax gains (losses) on derivatives not designated as hedges and recognized in selling, general and administrative expense and other income, net in the consolidated statements of operations (in millions).Three Months Ended June 30,Six Months Ended June 30,2025202420252024Interest rate swaps$(3)$7 $(2)$28 Total return swaps31 1 20 20 Total in selling, general and administrative expense28 8 18 48 Interest rate swaps— (5)— (3)Cross-currency swaps(6)—