Company: WBD
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437107-25-000096
Chunk: 40

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 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 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 months ended March 31, 2025 and 2024.Three Months Ended March 31,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$(4)$25 Interest expense, net$3 $6 Euro-denominated notes (foreign denominated debt)(60)— N/A— — Sterling notes (foreign denominated debt)— 4 N/A— — Total$(64)$29 $3 $6 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 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 $1.5 billion notional of non-designated interest rate swaps in the first quarter of 2025. The gains and losses on these derivatives are recorded to selling, general and administrative expenses, offsetting securitization interest expense.

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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 (expense), net in the consolidated statements of operations (in millions).Three Months Ended March 31,20252024Interest rate swaps$1 $21 Total return swaps(11)19 Total in selling, general and administrative expense(10)40 Interest rate swaps— 2