Company: WBD
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437107-25-000192
Chunk: 190

Company: Warner Bros. Discovery, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 190
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 have a material adverse effect on our business, financial condition, results of operations and cash flows.

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If the Separation were to fail to qualify for non-recognition treatment for U.S. federal income tax purposes, then we, Spinco and our shareholders may be subject to significant U.S. federal income taxes.

We expect to receive one or more opinions from our tax advisors as to the tax-free nature of the Separation. A tax opinion is not binding on the IRS or the courts, and there can be no assurance that the IRS or a court will not take a contrary position. In addition, our tax advisors will rely on certain representations and covenants delivered by us and Spinco in rendering such opinions.

If the IRS ultimately determines that the Separation is taxable, then we and our shareholders could incur significant tax liabilities in connection with the Separation. Spinco may be required to indemnify us for such tax liabilities pursuant to a tax matters agreement, but there can be no assurance that Spinco would have the resources or liquidity required to indemnify us for any such tax liability.

Even if the Separation otherwise qualifies for non-recognition of gain or loss under Section 355 of the Internal Revenue Code ("the Code"), the Separation may be taxable to us (but not to our shareholders) pursuant to Section 355(e) of the Code if there is a 50% or more (by vote or value) change in ownership of either us or Spinco, directly or indirectly, as part of a plan or series of related transactions that include the Separation. For this purpose, any acquisitions of our or Spinco’s common stock within two years before or after the Separation are presumed to be part of such a plan, although we or Spinco may be able to rebut that presumption based on applicable facts and circumstances or a “safe harbor” described in the U.S. income tax regulations.

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ITEM 6. Exhibits.Exhibit No.Description3.1Third Restated Certificate of Incorporation of Warner Bros. Discovery, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K filed on June 3, 2025 (SEC File No. 001-34177))3.2Second Amended and Restated Bylaws of Warner Bros. Discovery, Inc. effective as of June 2, 2025 (incorporated by reference to Exhibit 3.2 to the Form 8-K filed on June 3, 2025 (SEC