Item 1. Unaudited Financial Statements.

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Item 1. Unaudited Financial Statements.

WARNER BROS. DISCOVERY, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited; in millions, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenues:
Distribution	$	4,885	$	4,879	$	9,771	$	9,864
Advertising	2,216		2,430		4,196		4,578
Content	2,471		2,109		4,337		4,667
Other	240		295		487		562
Total revenues	9,812		9,713		18,791		19,671
Costs and expenses:
Costs of revenues, excluding depreciation and amortization	5,967		6,204		11,098		12,262
Selling, general and administrative	2,477		2,461		4,671		4,693
Depreciation and amortization	1,447		1,744		2,994		3,632
Restructuring and other charges	80		117		134		152
Impairments and loss on dispositions	26		9,395		116		9,407


Total costs and expenses	9,997		19,921		19,013		30,146
Operating loss	(185)		(10,208)		(222)		(10,475)
Interest expense, net	(463)		(518)		(931)		(1,033)
Gain on extinguishment of debt, net	2,958		542		2,954		567
Income (loss) from equity investees, net	5		(23)		(2)		(71)
Other income, net	139		172		221		158
Income (loss) before income taxes	2,454		(10,035)		2,020		(10,854)
Income tax (expense) benefit	(866)		7		(881)		(129)
Net income (loss)	1,588		(10,028)		1,139		(10,983)
Net income attributable to noncontrolling interests	(7)		(10)		(15)		(17)
Net (income) loss attributable to redeemable noncontrolling interests	(1)		52		3		48
Net income (loss) available to Warner Bros. Discovery, Inc.	$	1,580	$	(9,986)	$	1,127	$	(10,952)
Net income (loss) per share available to Warner Bros. Discovery, Inc. Series A common stockholders:
Basic	$	0.64	$	(4.07)	$	0.46	$	(4.48)
Diluted	$	0.63	$	(4.07)	$	0.45	$	(4.48)
Weighted average shares outstanding:
Basic	2,477		2,451		2,469		2,447
Diluted	2,499		2,451		2,500		2,447

The accompanying notes are an integral part of these consolidated financial statements.

WARNER BROS. DISCOVERY, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(unaudited; in millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Net income (loss)	$	1,588	$	(10,028)	$	1,139	$	(10,983)
Other comprehensive income (loss):



Currency translation, net of income tax expense of $(11), $(9), $(101), and $(2)	444		9		675		(167)

Derivatives
Change in net unrealized gains	20		12		29		25
Less: Reclassification adjustment for net losses (gains) included in net income	5		2		(8)		(7)
Net change, net of income tax expense of $(9), $(4), $(10), and $(4)	25		14		21		18
Comprehensive income (loss)	2,057		(10,005)		1,835		(11,132)
Comprehensive income attributable to noncontrolling interests	(9)		(7)		(20)		(13)
Comprehensive (income) loss attributable to redeemable noncontrolling interests	(1)		52		3		48
Comprehensive income (loss) attributable to Warner Bros. Discovery, Inc.	$	2,047	$	(9,960)	$	1,818	$	(11,097)

The accompanying notes are an integral part of these consolidated financial statements.

WARNER BROS. DISCOVERY, INC.

CONSOLIDATED BALANCE SHEETS

(unaudited; in millions, except par value)


	June 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	4,888	$	5,312
Receivables, net	5,383		4,947

Prepaid expenses and other current assets	3,340		3,819
Total current assets	13,611		14,078
Film and television content rights and games	18,817		19,102
Property and equipment, net	6,413		6,087


Goodwill	25,939		25,667
Intangible assets, net	29,906		32,299

Other noncurrent assets	7,041		7,327
Total assets	$	101,727	$	104,560
Liabilities and equity
Current liabilities:
Accounts payable	$	1,074	$	1,055
Accrued liabilities	10,218		10,438

Deferred revenues	1,527		1,569
Current portion of debt	221		2,748
Total current liabilities	13,040		15,810
Noncurrent portion of debt	34,411		36,757
Deferred income taxes	6,494		6,985
Other noncurrent liabilities	10,436		10,070
Total liabilities	64,381		69,622
Commitments and contingencies (See Note 15)
Redeemable noncontrolling interests	23		109

Warner Bros. Discovery, Inc. stockholders’ equity:
Series A common stock: $0.01 par value; 10,800 and 10,800 shares authorized; 2,705 and 2,684 shares issued; and 2,475 and 2,454 shares outstanding	27		27
Preferred stock: $0.01 par value; 1,200 and 1,200 shares authorized, 0 shares issued and outstanding	—		—
Additional paid-in capital	55,749		55,560
Treasury stock, at cost: 230 and 230 shares	(8,244)		(8,244)
Accumulated deficit	(11,112)		(12,239)
Accumulated other comprehensive loss	(371)		(1,067)
Total Warner Bros. Discovery, Inc. stockholders’ equity	36,049		34,037
Noncontrolling interests	1,274		792
Total equity	37,323		34,829
Total liabilities and equity	$	101,727	$	104,560

The accompanying notes are an integral part of these consolidated financial statements.

WARNER BROS. DISCOVERY, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in millions)


	Six Months Ended June 30,
	2025		2024
Operating Activities
Net income (loss)	$	1,139	$	(10,983)
Adjustments to reconcile net income to cash provided by operating activities:
Content rights amortization and impairment	6,851		7,747
Depreciation and amortization	2,994		3,632
Deferred income taxes	(471)		(889)

Share-based compensation expense	298		260

Equity in losses of equity method investee companies and cash distributions	18		83
Gain on sale of investments	(6)		(203)
Gain on extinguishment of debt	(2,954)		(567)
Impairments and loss on dispositions	116		9,407

Other, net	(97)		25
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net	(460)		(191)
Film and television content rights, games, and production payables, net	(6,314)		(6,351)
Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities	(141)		(132)
Foreign currency, prepaid expenses and other assets, net	563		(25)
Cash provided by operating activities	1,536		1,813
Investing Activities
Purchases of property and equipment	(532)		(447)

Proceeds from sales of investments	54		324
Investments in and advances to equity investments	(26)		(68)

Proceeds from asset dispositions	66		—



Other investing activities, net	7		54
Cash used in investing activities	(431)		(137)
Financing Activities

Principal repayments of debt, including premiums and discounts to par value	(20,403)		(3,703)
Borrowings from debt, net of discount and issuance costs	18,303		1,617
Distributions to noncontrolling interests and redeemable noncontrolling interests	(174)		(161)
Proceeds for noncontrolling interest in joint venture	601		—






Borrowings under commercial paper program and revolving credit facility	3,551		11,605
Repayments under commercial paper program and revolving credit facility	(3,551)		(11,605)


Other financing activities, net	(213)		(27)
Cash used in financing activities	(1,886)		(2,274)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	256		(104)
Net change in cash, cash equivalents, and restricted cash	(525)		(702)
Cash, cash equivalents, and restricted cash, beginning of period	5,416		4,319
Cash, cash equivalents, and restricted cash, end of period	$	4,891	$	3,617

The accompanying notes are an integral part of these consolidated financial statements.

WARNER BROS. DISCOVERY, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in millions)


		Warner Bros. Discovery, Inc. Common Stock				Additional Paid-In Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Warner Bros. Discovery, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares		Par Value
December 31, 2024		2,684		$	27	$	55,560	$	(8,244)	$	(12,239)	$	(1,067)	$	34,037	$	792	$	34,829


Net (loss) income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests		—		—		—		—		(453)		—		(453)		8		(445)
Other comprehensive income		—		—		—		—		—		227		227		3		230
Share-based compensation		—		—		156		—		—		—		156		—		156



Tax settlements associated with share-based plans		—		—		(124)		—		—		—		(124)		—		(124)
Dividends paid to noncontrolling interests		—		—		—		—		—		—		—		(147)		(147)
Issuance of stock in connection with share-based plans		19		—		9		—		—		—		9		—		9
Redeemable noncontrolling interest adjustments to redemption value		—		—		(3)		—		—		—		(3)		—		(3)
Reclassification associated with the expiration of put rights		—		—		—		—		—		—		—		74		74
Formation of music catalog joint venture		—		—		(13)		—		—		—		(13)		582		569
March 31, 2025		2,703		$	27	$	55,585	$	(8,244)	$	(12,692)	$	(840)	$	33,836	$	1,312	$	35,148


Net income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests		—		—		—		—		1,580		—		1,580		7		1,587
Other comprehensive income		—		—		—		—		—		469		469		2		471
Share-based compensation		—		—		164		—		—		—		164		—		164



Tax settlements associated with share-based plans		—		—		(4)		—		—		—		(4)		—		(4)
Dividends paid to noncontrolling interests		—		—		—		—		—		—		—		(16)		(16)
Issuance of stock in connection with share-based plans		2		—		4		—		—		—		4		—		4

Tax gain on formation of music catalog joint venture		—		—		—		—		—		—		—		(31)		(31)

June 30, 2025		2,705		$	27	$	55,749	$	(8,244)	$	(11,112)	$	(371)	$	36,049	$	1,274	$	37,323















The accompanying notes are an integral part of these consolidated financial statements.

WARNER BROS. DISCOVERY, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited; in millions)


	Warner Bros. Discovery, Inc. Common Stock			Additional Paid-In Capital		Treasury Stock		Accumulated Deficit		Accumulated Other Comprehensive Loss		Warner Bros. Discovery, Inc. Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Shares	Par Value
December 31, 2023	2,669	$	27	$	55,112	$	(8,244)	$	(928)	$	(741)	$	45,226	$	1,081	$	46,307


Net (loss) income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests	—	—		—		—		(966)		—		(966)		7		(959)
Other comprehensive loss	—	—		—		—		—		(172)		(172)		(1)		(173)
Share-based compensation	—	—		108		—		—		—		108		—		108



Tax settlements associated with share-based plans	—	—		(53)		—		—		—		(53)		—		(53)
Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(123)		(123)
Issuance of stock in connection with share-based plans	10	—		30		—		—		—		30		—		30
Redeemable noncontrolling interest adjustments to redemption value	—	—		(22)		—		—		—		(22)		—		(22)

March 31, 2024	2,679	$	27	$	55,175	$	(8,244)	$	(1,894)	$	(913)	$	44,151	$	964	$	45,115


Net (loss) income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests	—	—		—		—		(9,986)		—		(9,986)		10		(9,976)
Other comprehensive income (loss)	—	—		—		—		—		23		23		(3)		20
Share-based compensation	—	—		151		—		—		—		151		—		151



Tax settlements associated with share-based plans	—	—		(2)		—		—		—		(2)		—		(2)
Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(19)		(19)
Issuance of stock in connection with share-based plans	2	—		6		—		—		—		6		—		6
Redeemable noncontrolling interest adjustments to redemption value	—	—		2		—		—		—		2		—		2

June 30, 2024	2,681	$	27	$	55,332	$	(8,244)	$	(11,880)	$	(890)	$	34,345	$	952	$	35,297















The accompanying notes are an integral part of these consolidated financial statements.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Warner Bros. Discovery, Inc. (“Warner Bros. Discovery”, “WBD”, the “Company”, “we”, “us” or “our”) is a leading global media and entertainment company that creates and distributes a differentiated and comprehensive portfolio of content and products across television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products through brands including: Discovery Channel, HBO Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim, Turner Classic Movies, and others.

In June 2025, the Company announced its plans to separate the Company, in a tax-free transaction, into two publicly traded companies (the “Separation”). Warner Bros. will primarily consist of our Streaming and Studios reportable segments and include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as its film and television libraries. Discovery Global will primarily consist of our Global Linear Networks reportable segment and include premier entertainment, sports and news television brands around the world including CNN, TNT Sports in the U.S., and Discovery, free-to-air channels across Europe, and digital products such as Discovery+ and Bleacher Report. The Separation is expected to be completed by mid-2026, subject to closing and other conditions, including final approval by the Warner Bros. Discovery Board, receipt of tax opinions with respect to the tax-free nature of the transaction for U.S. federal income tax purposes, and market conditions. There can be no assurance that the Separation will occur in accordance with the expected plans or anticipated timeline, or at all.

In the first quarter of 2025, the Company renamed its Direct-to-Consumer reportable segment to Streaming and its Networks reportable segment to Global Linear Networks. There have been no changes to the Company’s reportable segments or the composition of our reportable segments as a result of these announcements.

As of June 30, 2025, we classified our operations in three reportable segments:

Streaming -** Our Streaming segment primarily consists of our premium pay-TV and streaming services.
Studios -** Our Studios segment primarily consists of the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to third parties and our networks/streaming services, distribution of our films and television programs to various third party and internal television and streaming services, distribution through the home entertainment market (physical and digital), related consumer products and themed experience licensing, and interactive gaming.
Global Linear Networks -** Our Global Linear Networks segment primarily consists of our domestic and international television networks.

Our segment presentation is aligned with our management structure and the financial information management uses to make decisions about operating matters, such as the allocation of resources and business performance assessments.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries in which a controlling interest is maintained, including variable interest entities (“VIE”) for which the Company is the primary beneficiary. Intercompany accounts and transactions between consolidated entities have been eliminated.

Unaudited Interim Financial Statements

These consolidated financial statements are unaudited; however, in the opinion of management, they reflect all adjustments consisting only of normal recurring adjustments necessary to state fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 Form 10-K”).

Use of Estimates

The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Recent Accounting and Reporting Pronouncements

Income Taxes

In December 2023, the Financial Accounting Standards Board (“FASB”) issued guidance updating the disclosure requirements for income taxes, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company expects to adopt this guidance prospectively and is currently evaluating the impact it will have on its annual tax disclosures that will be included in its Form 10-K for the year ended December 31, 2025.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued guidance updating the disclosure requirements for income statement expenses, primarily through disaggregation of certain types of expenses presented on the income statement. The amendments are effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either: (1) prospectively to financial statements issued for reporting periods after the effective date, or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact this guidance will have on its disclosures.

NOTE 2. GOODWILL AND INTANGIBLE ASSETS

We perform fair value-based impairment tests of goodwill and intangible assets on an annual basis, and between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit or an intangible asset below its carrying value.

During the six months ended June 30, 2025, the Company performed goodwill and intangible assets impairment monitoring procedures for all of its reporting units and identified no indicators of impairment. As of October 1, 2024, the date of the most recent quantitative impairment assessment, the estimated fair value of each reporting unit exceeded its carrying value.

The Company continues to monitor its reporting units for triggers that could impact the recoverability of goodwill. Long-term trends and risks the Company is monitoring in its ongoing assessment include, but are not limited to, the following:

the delta between market capitalization and book value, as well as volatility in the price of our common stock, including any impact from the announced Separation;
uncertainty related to affiliate rights renewals associated with the Company’s Global Linear Networks and Streaming reporting units;
declining levels of global GDP growth and continued softness in the U.S. linear advertising market associated with the Company’s Global Linear Networks reporting unit;
increased competition for advertising expenditures associated with the Company’s Global Linear Networks and Streaming reporting units as a result of an increase in digital advertising available in the marketplace;
uncertainty surrounding the impacts related to the imposition of tariffs by the U.S. government and any retaliatory tariffs from foreign governments;
content licensing trends and volatility related to the performance of theatrical film and game slates in the Company’s Studios reporting unit; and
risks in executing the projected growth strategies of the Company’s Streaming reporting unit.

NOTE 3. RESTRUCTURING AND OTHER CHARGES

The Company periodically initiates restructuring programs, which may include, among other things, strategic content programming assessments, organizational restructuring, facility consolidation activities, and other contract termination costs. During 2025, the Company initiated restructuring plans related to the announced Separation. During 2024, the Company initiated two restructuring initiatives; an organizational and personnel restructuring plan and a restructuring initiative associated with its Warner Bros. Games group.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Restructuring and other charges by reportable segments and corporate and inter-segment eliminations were as follows (in millions).


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Streaming	$	7	$	15	$	19	$	17
Studios	(1)		19		(6)		30
Global Linear Networks	25		42		41		53
Corporate and inter-segment eliminations	49		41		80		52
Total restructuring and other charges	$	80	$	117	$	134	$	152

During the three and six months ended June 30, 2025 and 2024, restructuring and other charges were primarily related to organization restructuring costs and consulting fees.

Changes in restructuring liabilities recorded in accounts payable, accrued liabilities, and other noncurrent liabilities by major category and by reportable segment and corporate were as follows (in millions).


	Streaming		Studios		Global Linear Networks		Corporate		Total
December 31, 2024	$	31	$	95	$	105	$	58	$	289



Employee termination accruals, net	19		(6)		41		35		89
Other accruals and adjustments	—		—		—		45		45
Cash paid	(12)		(40)		(51)		(54)		(157)
June 30, 2025	$	38	$	49	$	95	$	84	$	266

NOTE 4. REVENUES

The following tables present the Company’s revenues disaggregated by revenue source (in millions).


	Three Months Ended June 30, 2025
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	2,410	$	1	$	2,477	$	(3)	$	4,885
Advertising	282		—		1,953		(19)		2,216
Content	102		3,591		287		(1,509)		2,471
Other	(1)		209		86		(54)		240
Total	$	2,793	$	3,801	$	4,803	$	(1,585)	$	9,812


	Three Months Ended June 30, 2024
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	2,202	$	3	$	2,675	$	(1)	$	4,879
Advertising	240		—		2,214		(24)		2,430
Content	123		2,237		299		(550)		2,109
Other	3		209		84		(1)		295
Total	$	2,568	$	2,449	$	5,272	$	(576)	$	9,713

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	Six Months Ended June 30, 2025
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	4,739	$	2	$	5,035	$	(5)	$	9,771
Advertising	519		1		3,711		(35)		4,196
Content	190		5,730		667		(2,250)		4,337
Other	1		382		164		(60)		487
Total	$	5,449	$	6,115	$	9,577	$	(2,350)	$	18,791


	Six Months Ended June 30, 2024
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	4,387	$	8	$	5,472	$	(3)	$	9,864
Advertising	415		4		4,201		(42)		4,578
Content	222		4,860		563		(978)		4,667
Other	4		398		161		(1)		562
Total	$	5,028	$	5,270	$	10,397	$	(1,024)	$	19,671

Contract Liabilities and Contract Assets

The following table presents contract liabilities on the consolidated balance sheets (in millions).


Category	Balance Sheet Location	June 30, 2025		December 31, 2024


Contract liabilities	Deferred revenues	$	1,527	$	1,569
Contract liabilities	Other noncurrent liabilities	231		206

For the six months ended June 30, 2025 and 2024, respectively, revenues of $1,003 million and $1,046 million were recognized that were included in deferred revenues as of December 31, 2024 and December 31, 2023, respectively. Contract assets were not material as of June 30, 2025 and December 31, 2024.

Remaining Performance Obligations

The following table presents a summary of revenue expected to be recognized from remaining performance obligations by contract type (in millions).


Contract Type	June 30, 2025		Duration
Distribution - fixed price or minimum guarantee	$	2,048	Through 2030
Content licensing and sports sublicensing	4,678		Through 2032
Brand licensing	3,012		Through 2052
Advertising	648		Through 2030
Other	144		Through 2029
Total	$	10,530

The value of unsatisfied performance obligations disclosed above does not include: (i) contracts involving variable consideration for which revenues are recognized in accordance with the sales or usage-based royalty exception, which typically have a similar duration as the contracts disclosed above, and (ii) contracts with an original expected length of one year or less, such as most advertising contracts; however for content licensing revenues, including revenues associated with the licensing of theatrical and television product for television and streaming services, the Company has included all contracts regardless of duration.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 5. SALES OF RECEIVABLES

Revolving Receivables Program

During the three months ended June 30, 2025, the Company amended its revolving receivables program to reduce the facility limit to $5,000 million and extend the program to June 2026. The outstanding portfolio of receivables derecognized from our consolidated balance sheet was $4,499 million as of June 30, 2025.

The Company recognized $56 million and $92 million for the three and six months ended June 30, 2025, respectively, and $37 million and $88 million for the three and six months ended June 30, 2024, respectively, in selling, general and administrative expenses in the consolidated statements of operations from the revolving receivables program (net of non-designated derivatives). (See Note 9.)

The following table presents a summary of receivables sold (in millions).


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Gross receivables sold/cash proceeds received	$	3,991	$	3,540	$	8,222	$	7,496
Collections reinvested under revolving receivables program	(4,240)		(3,643)		(8,360)		(7,630)
Net cash proceeds remitted	$	(249)	$	(103)	$	(138)	$	(134)
Net receivables sold	$	3,985	$	3,529	$	8,190	$	7,443
Obligations recorded (Level 3)	$	97	$	86	$	200	$	239

The following table presents a summary of the amounts transferred or pledged, which were held at the Company’s bankruptcy-remote consolidated subsidiary (in millions).


	June 30, 2025		December 31, 2024
Gross receivables pledged as collateral	$	2,594	$	2,402
Restricted cash pledged as collateral	$	—	$	100
Balance sheet classification:
Receivables, net	$	2,173	$	2,039
Prepaid expenses and other current assets	$	—	$	100
Other noncurrent assets	$	421	$	363

Accounts Receivable Factoring

Total trade accounts receivable sold under the Company’s factoring arrangement were $102 million and $57 million for the six months ended June 30, 2025 and 2024. The impact to the consolidated statements of operations was immaterial for the three and six months ended June 30, 2025 and 2024. This accounts receivable factoring agreement is separate and distinct from the revolving receivables program.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 6. CONTENT RIGHTS

For purposes of amortization and impairment, capitalized production costs are grouped based on their predominant monetization strategy: individually or as a group. Live programming includes licensed sports rights and related advances. The tables below present the components of content rights (in millions).


	June 30, 2025
		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total










Production costs:
Released, less amortization		$	3,227	$	5,784	$	9,011
Completed and not released		763		640		1,403
In production and other		1,635		2,198		3,833
Total production costs		$	5,625	$	8,622	$	14,247


Licensed content, live programming, and advances, net						4,729
Game development costs, less amortization						286
Total film and television content rights and games						19,262
Less: Current content rights and prepaid license fees, net						(445)
Total noncurrent film and television content rights and games						$	18,817


	December 31, 2024
		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total










Production costs:
Released, less amortization		$	2,948	$	5,678	$	8,626
Completed and not released		794		767		1,561
In production and other		1,700		2,008		3,708
Total production costs		$	5,442	$	8,453	$	13,895


Licensed content, live programming, and advances, net						5,744
Game development costs, less amortization						247
Total film and television content rights and games						19,886
Less: Current content rights and prepaid license fees, net						(784)
Total noncurrent film and television content rights and games						$	19,102

Content amortization consisted of the following (in millions).


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024

Predominantly monetized individually	$	645	$	754	$	1,225	$	1,676





Predominantly monetized as a group	3,033		3,114		5,563		5,893



Total content amortization	$	3,678	$	3,868	$	6,788	$	7,569

Content expense includes amortization, impairments, and development expense and is generally a component of costs of revenues on the consolidated statements of operations. Content impairments were $28 million and $63 million, respectively, for the three and six months ended June 30, 2025. For the three and six months ended June 30, 2024, content impairments were $52 million and $178 million, respectively.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 7. INVESTMENTS

The Company’s equity investments consisted of the following, net of investments recorded in other noncurrent liabilities (in millions).


Category	Balance Sheet Location	Ownership	June 30, 2025		December 31, 2024
Equity method investments:
The Chernin Group (TCG) 2.0-A, LP	Other noncurrent assets	44%	$	237	$	240
nC+	Other noncurrent assets	32%	154		128
TNT Sports	Other noncurrent assets	50%	84		92
Other	Other noncurrent assets		243		261
Total equity method investments			718		721

Investments with readily determinable fair values	Other noncurrent assets		—		41


Investments without readily determinable fair values	Other noncurrent assets(a)		350		353
Total investments			$	1,068	$	1,115

(a) Investments without readily determinable fair values included $17 million as of June 30, 2025 and December 31, 2024 that was recorded in prepaid expenses and other current assets.

Equity Method Investments

Certain of the Company’s other equity method investments are VIEs, for which the Company is not the primary beneficiary. As of June 30, 2025, the Company’s maximum exposure for all of its unconsolidated VIEs, including the investment carrying values and unfunded contractual commitments made on behalf of VIEs, was approximately $542 million. The Company’s maximum estimated exposure excludes the non-contractual future funding of VIEs. The aggregate carrying values of these VIE investments were $524 million and $550 million as of June 30, 2025 and December 31, 2024, respectively. VIE gains and losses are recorded in income (loss) from equity investees, net on the consolidated statements of operations, and were not material for the three and six months ended June 30, 2025 and 2024.

Joint Venture

In January 2025, the Company contributed a 70% interest in its music catalog to a joint venture with Cutting Edge Group in exchange for net proceeds of $601 million. The Company retained a controlling financial interest and consolidated the joint venture as a VIE. The Company has determined that it is the primary beneficiary of the joint venture as the Company has certain operational rights that significantly impact the economic performance of the business including exploitation of the catalog works and selection of the administrator. As the primary beneficiary, the Company includes the joint venture assets, liabilities and results of operations in the Company's consolidated financial statements. As of June 30, 2025, the carrying amounts of assets and liabilities of the consolidated VIE were not material. In addition to the initial equity ownership, Cutting Edge Group may receive up to an additional 10% economic interest in the venture based on the results of certain operational metrics.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 8. DEBT

The table below presents the components of outstanding debt (in millions).


	Weighted-Average Interest Rate as of June 30, 2025		June 30, 2025		December 31, 2024
Bridge loan with maturity of 18 months	7.33	%	$	17,000	$	—

Senior notes with maturities of 5 years or less	3.92	%	6,757		13,744
Senior notes with maturities between 5 and 10 years	4.40	%	3,547		7,853
Senior notes with maturities greater than 10 years	5.17	%	7,696		17,930
Total debt			35,000		39,527
Unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting, net			(368)		(22)
Debt, net of unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting			34,632		39,505
Current portion of debt			(221)		(2,748)
Noncurrent portion of debt			$	34,411	$	36,757

During the three months ended June 30, 2025, the Company’s wholly-owned subsidiaries, Discovery Communications, LLC (“DCL”), WarnerMedia Holdings, Inc. (“WMH”), Warner Media, LLC (“WML”), and Historic TW Inc. (“TWI”), commenced cash tender offers to purchase (the “Tender Offers”) up to approximately $14.6 billion in aggregate purchase price of their outstanding notes and debentures. In conjunction with the Tender Offers, DCL, WMH and TWI also commenced solicitations of consents (the “Consent Solicitations”) from holders of substantially all of its outstanding notes and debentures to adopt certain proposed amendments to the indentures governing such notes and debentures, to, among other things, remove substantially all of the restrictive covenants and certain events of defaults under such indentures.

To fund the Tender Offers and Consent Solicitations, as well as repay in full and terminate its $1,500 million 364-day senior unsecured term loan facility, the Company and WMH entered into a non-investment grade leveraged bridge loan facility (“Bridge Loan Facility”) with JPMorgan Chase Bank, N.A. The obligations under the Bridge Loan Facility are secured by a lien on substantially all of the personal property assets of the Company, WMH, and certain of its wholly owned domestic subsidiaries and are guaranteed by the Company and certain of its wholly-owned domestic subsidiaries. Borrowings under the Bridge Loan Facility will bear interest at the Secured Overnight Financing Rate (“SOFR”) plus (i) until December 30, 2025, 3.00% per annum, (ii) from December 31, 2025 until March 30, 2026, 3.50% per annum and (iii) from March 31, 2026 until the termination date of the Bridge Loan Facility, 4.00%. Borrowings under the Bridge Loan Facility, net of any prepayments, will become payable in full on the earlier of (i) December 30, 2026 and (ii) the date of the completion of the Separation. In addition, the Company will pay JPMorgan Chase Bank, N.A. as the administrative agent a duration fee equal to the applicable percentage of the aggregate principal amount of the loan outstanding on the following dates: on December 31, 2025, a fee rate of 0.30%; on each of March 31, 2026 and June 30, 2026, a fee rate of 0.50%; and on each of September 30, 2026 and December 31, 2026, a fee rate of 0.75%. On June 30, 2025, WMH drew $17.0 billion of the available Bridge Loan Facility to finance the early settlement of the Tender Offers, Consent Solicitations, and the repayment in full and termination of its $1,500 million 364-day senior unsecured term loan facility, and the payment of fees and expenses therewith and for general corporate purposes. The Bridge Loan Facility is expected to be refinanced prior to the Separation. The Bridge Loan Facility contains customary representations and warranties, as well as affirmative and negative covenants. The Bridge Loan Facility does not contain any financial maintenance covenant.

The Company completed the Tender Offers in June 2025 by purchasing senior notes and debentures in the aggregate principal amount of $17.7 billion validly tendered and accepted for purchase pursuant to the Tender Offers and recorded a gain on extinguishment of approximately $3.0 billion. The Company also paid $293 million for the Consent Solicitations. Additionally, the Company repaid in full at maturity $487 million of aggregate principal amount outstanding of its senior notes due June 2025.

During the three months ended March 31, 2025, the Company repaid in full at maturity $2,165 million of aggregate principal amount outstanding of its senior notes due March 2025, and redeemed in full $1,500 million aggregate principal amount outstanding of its senior notes due March 2026. The redemption was funded with the proceeds of borrowings pursuant to a $1,500 million 364-day senior unsecured term loan credit facility.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

During the three months ended June 30, 2024, the Company commenced a tender offer to purchase for cash up to $2.61 billion in aggregate purchase price (excluding accrued and unpaid interest) of (i) DCL’s outstanding 3.900% Senior Notes due 2024, 4.000% Senior Notes due 2055, 4.650% Senior Notes due 2050, 4.950% Senior Notes due 2042, 4.875% Senior Notes due 2043, 5.200% Senior Notes due 2047, and 5.300% Senior Notes due 2049, (ii) Scripps Networks Interactive, Inc.’s (“Scripps Networks”) outstanding 3.900% Senior Notes due 2024, (iii) the legacy WarnerMedia business’s outstanding 4.650% Senior Notes due 2044, 4.850% Senior Notes due 2045, 4.900% Senior Notes due 2042, and 5.350% Senior Notes due 2043, and (iv) WMH’s outstanding 5.050% Senior Notes due 2042, which was funded using the aggregate net proceeds from debt financing transactions together with available cash on hand and other available sources of liquidity. The Company completed the tender offer in June 2024 by purchasing senior notes in the aggregate principal amount of $3,399 million validly tendered and accepted for purchase pursuant to the offer and recorded a gain on extinguishment of $542 million. The Company also repaid in full at maturity $48 million of aggregate principal amount outstanding of its senior notes due June 2024.

During the three months ended June 30, 2024, the Company issued €650 million of 4.302% fixed rate senior notes due January 2030 and €850 million of 4.693% fixed rate senior notes due May 2033, the proceeds of which were used to fund the tender offer. After December 2029 and February 2033, respectively, the senior notes are redeemable at par plus accrued and unpaid interest.

During the three months ended March 31, 2024, the Company repaid in full at maturity $726 million of aggregate principal amount outstanding of its senior notes due February and March 2024 and completed open market repurchases for $364 million of aggregate principal amount outstanding of its senior notes.

As of June 30, 2025, all senior notes are fully and unconditionally guaranteed by the Company, Scripps Networks, DCL (to the extent it is not the primary obligor on such senior notes), and WMH (to the extent it is not the primary obligor on such senior notes), except for $331 million of senior notes related to the legacy WarnerMedia business.

Revolving Credit Facility and Commercial Paper Programs

DCL and certain subsidiaries of the Company, as borrowers, have a multicurrency revolving credit agreement, which was amended in June 2025 (the “Credit Agreement”). The Credit Agreement provides for a senior revolving credit facility (the “Credit Facility”) with aggregate commitments of $4.0 billion and includes a $150 million sublimit for the issuance of standby letters of credit. DCL may also request additional commitments up to $1.0 billion from the lenders upon the satisfaction of certain conditions. The obligations of the borrowers under the Credit Agreement are secured by the same collateral and have the benefit of the same guarantees as provided in respect of the Bridge Loan Facility, as described above. The Credit Agreement is available on a revolving basis until October 2029, with an option for up to two additional 364-day renewal periods subject to the lenders’ consent, and provides for an early termination of the Credit Agreement upon completion of the Separation.

The Company’s commercial paper program is supported by the Credit Facility. Under the commercial paper program, the Company may issue up to $2.0 billion. In March 2025, the Company increased the issuance capacity under the commercial paper program from $1.0 billion to $2.0 billion. Borrowing capacity under the Credit Facility is effectively reduced by any outstanding borrowings under the commercial paper program. As of June 30, 2025 and December 31, 2024, the Company and DCL had no outstanding borrowings under the Credit Facility or issuances under the commercial paper program.

The Credit Agreement contains customary representations and warranties as well as affirmative and negative covenants, and also requires maintenance of a minimum consolidated interest coverage ratio of 3.00 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.

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, 2025										December 31, 2024
			Fair Value										Fair Value
	Notional		Prepaid expenses and other current assets		Other non- current assets		Accounts payable and accrued liabilities		Other non- current liabilities		Notional		Prepaid expenses and other current assets		Other non- current assets		Accounts payable and accrued liabilities		Other non- current liabilities
Cash flow hedges:
Foreign exchange	$	2,363	$	54	$	84	$	60	$	41	$	1,608	$	47	$	14	$	25	$	28


Net investment hedges: (a)
Cross-currency swaps	461		7		—		—		15		421		6		—		—		4



No hedging designation:
Foreign exchange	358		6		2		14		76		951		18		7		14		122
Cross-currency swaps	230		4		—		—		10		210		2		—		—		1
Interest rate swaps	2,500		—		—		3		—		—		—		—		—		—
Total return swaps	477		17		—		—		—		454		—		—		16		—


Total			$	88	$	86	$	77	$	142			$	73	$	21	$	55	$	155

(a) Excludes €697 million and €1,500 million of euro-denominated notes ($818 million and $1,558 million equivalent) at June 30, 2025 and December 31, 2024, respectively, designated as a net investment hedge. (See Note 8.)

Derivatives Designated for Hedge Accounting

Cash Flow Hedges

The Company uses foreign exchange forward contracts to mitigate the foreign currency risk related to revenues, production rebates, and production expenses. As production spend occurs or when rebate receivables are recognized, foreign forward exchange contracts designated as cash flow hedges are de-designated. Upon de-designation, gains and losses on these derivatives directly impact earnings in the same 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 June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Gains (losses) recognized in accumulated other comprehensive loss:
Foreign exchange - derivative adjustments	$	28	$	15	$	42	$	31

Gains (losses) reclassified into income from accumulated other comprehensive loss:
Foreign exchange - distribution revenue	(5)		1		(1)		3

Foreign exchange - costs of revenues	1		(4)		1		7

Interest rate - interest expense, net	(1)		(1)		(2)		(2)
Interest rate - loss on extinguishment of debt	(1)		(4)		(1)		(4)
Interest rate - other income, net	—		5		14		5

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

If current fair values of designated cash flow hedges as of June 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 Hedges

The 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 six months ended June 30, 2025 and 2024.


	Three Months Ended June 30,
	Amount of gain (loss) recognized in AOCI				Location 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)
	2025		2024			2025			2024
Cross currency swaps	$	(8)	$	14	Interest expense, net		$	3		$	6


Euro-denominated notes (foreign denominated debt)	(148)		21		N/A		—			—

Total	$	(156)	$	35			$	3		$	6


	Six Months Ended June 30,
	Amount of gain (loss) recognized in AOCI				Location 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)
	2025		2024			2025			2024
Cross 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 Accounting

The 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.)

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,
	2025		2024		2025		2024
Interest rate swaps	$	(3)	$	7	$	(2)	$	28
Total return swaps	31		1		20		20
Total in selling, general and administrative expense	28		8		18		48

Interest rate swaps	—		(5)		—		(3)
Cross-currency swaps	(6)		—		(7)		—


Foreign exchange derivatives	25		(17)		34		(25)
Total in other income, net	19		(22)		27		(28)
Total	$	47	$	(14)	$	45	$	20

NOTE 10. FAIR VALUE MEASUREMENTS

Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants. Assets and liabilities carried at fair value are classified in the following three categories:


Level 1	–	Quoted prices for identical instruments in active markets.
Level 2	–	Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3	–	Valuations derived from techniques in which one or more significant inputs are unobservable.

The tables below present assets and liabilities measured at fair value on a recurring basis (in millions).


		June 30, 2025
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Time deposits	Cash and cash equivalents	$	—	$	317	$	—	$	317

Equity securities:
Money market fund	Cash and cash equivalents	50		—		—		50

Mutual funds	Prepaid expenses and other current assets	12		—		—		12
Company-owned life insurance contracts	Prepaid expenses and other current assets	—		7		—		7
Mutual funds	Other noncurrent assets	211		—		—		211
Company-owned life insurance contracts	Other noncurrent assets	—		95		—		95



Total		$	273	$	419	$	—	$	692
Liabilities
Deferred compensation plan	Accrued liabilities	$	67	$	—	$	—	$	67
Deferred compensation plan	Other noncurrent liabilities	659		—		—		659
Total		$	726	$	—	$	—	$	726

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


		December 31, 2024
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Time deposits	Cash and cash equivalents	$	—	$	95	$	—	$	95

Equity securities:
Money market funds	Cash and cash equivalents	46		—		—		46

Mutual funds	Prepaid expenses and other current assets	16		—		—		16
Company-owned life insurance contracts	Prepaid expenses and other current assets	—		1		—		1
Mutual funds	Other noncurrent assets	216		—		—		216
Company-owned life insurance contracts	Other noncurrent assets	—		102		—		102

Total		$	278	$	198	$	—	$	476
Liabilities
Deferred compensation plan	Accrued liabilities	$	62	$	—	$	—	$	62
Deferred compensation plan	Other noncurrent liabilities	650		—		—		650
Total		$	712	$	—	$	—	$	712

In addition to the financial instruments listed in the tables above, the Company holds other financial instruments, including cash deposits, accounts receivable, accounts payable, senior notes, and a bridge loan. The carrying values for such financial instruments, other than the senior notes, each approximated their fair values as of June 30, 2025 and December 31, 2024. The estimated fair value of the Company’s outstanding senior notes, including accrued interest, using quoted prices from over-the-counter markets, considered Level 2 inputs, was $14.7 billion and $34.9 billion as of June 30, 2025 and December 31, 2024, respectively.

The Company’s derivative financial instruments are discussed in Note 9, its investments with readily determinable fair value are discussed in Note 7, and the obligation for its revolving receivable program is discussed in Note 5.

NOTE 11. SHARE-BASED COMPENSATION

The Company has various incentive plans under which performance based restricted stock units (“PRSUs”), service based restricted stock units (“RSUs”), and stock options have been issued. The table below presents awards granted (in millions, except weighted-average grant price).


	Six Months Ended June 30, 2025
	Awards	Weighted-Average Grant Price
Awards granted:
PRSUs	4.6	$	11.02
RSUs	41.4	$	10.86
Stock options	25.1	$	10.30

The table below presents unrecognized compensation cost related to non-vested share-based awards and the weighted-average amortization period over which these expenses will be recognized as of June 30, 2025 (in millions, except years).


	Unrecognized Compensation Cost		Weighted-Average Amortization Period (years)
PRSUs	$	72	1.3
RSUs	674		1.6
Stock options	183		2.9

Total unrecognized compensation cost	$	929

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 12. INCOME TAXES

Income tax (expense) benefit was $(866) million and $7 million for the three months ended June 30, 2025 and 2024, respectively and $(881) million and $(129) million for the six months ended June 30, 2025 and 2024, respectively. The increase in income tax expense for the three and six months ended June 30, 2025 compared to the same periods in 2024 was primarily attributable to higher pre-tax book income, including a $3.0 billion gain recognized in connection with the Tender Offers in 2025 (See Note 8) and a non-cash goodwill impairment charge of $9.1 billion recorded in 2024, the majority of which was not deductible for tax purposes.

Income tax expense for the three and six months ended June 30, 2025, reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to the effect of foreign operations and changes in unrecognized tax benefits.

As of June 30, 2025 and December 31, 2024, the Company’s reserves for unrecognized tax benefits totaled $2,479 million and $2,371 million, respectively.

As of June 30, 2025 and December 31, 2024, the Company had accrued $815 million and $732 million, respectively, of total interest and penalties payable related to unrecognized tax benefits. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.

The Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. As of June 30, 2025, we recognized an immaterial income tax expense for Pillar Two GloBE minimum tax. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S., which includes a broad range of tax reform provisions. We are currently evaluating its impact on our financial statements.

NOTE 13. SUPPLEMENTAL DISCLOSURES

The following tables present supplemental information related to the consolidated financial statements (in millions).

Other Income, net

Other income, net, consisted of the following (in millions).


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Foreign currency gains (losses), net	$	58	$	(54)	$	88	$	(191)
Gains (losses) on derivative instruments, net	19		(17)		41		(23)

Change in the value of investments with readily determinable fair value	—		(1)		4		(2)
Gain on sale of equity method investments	—		203		—		203

Change in fair value of equity investments without readily determinable fair value	—		(13)		(4)		(27)

Interest income	59		63		123		123
Indemnification receivable accrual	(5)		6		(43)		96
Other income (loss), net	8		(15)		12		(21)
Total other income, net	$	139	$	172	$	221	$	158

Supplemental Cash Flow Information


	Six Months Ended June 30,
	2025		2024


Non-cash investing and financing activities:








Assets acquired under finance lease and other arrangements	$	219	$	224

Settlement of PRSU awards	$	62	$	40
Accrued debt tender fees	$	95	$	—

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Cash, Cash Equivalents, and Restricted Cash


	June 30, 2025		December 31, 2024
Cash and cash equivalents	$	4,888	$	5,312
Restricted cash - recorded in prepaid expenses and other current assets (1)	3		104
Total cash, cash equivalents, and restricted cash	$	4,891	$	5,416

(1) Restricted cash at December 31, 2024 primarily includes cash posted as collateral related to the Company’s revolving receivables program. (See Note 5.)

Earnings Per Share

The table below presents a reconciliation of net income (loss) available to Warner Bros. Discovery, Inc. Series A common stockholders for basic and diluted earnings per share (in millions).


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Numerator:
Net income (loss)	$	1,588	$	(10,028)	$	1,139	$	(10,983)
Less:
Net income attributable to noncontrolling interests	(7)		(10)		(15)		(17)
Net (income) loss attributable to redeemable noncontrolling interests	(1)		52		3		48
Redeemable noncontrolling interest adjustments of carrying value to redemption value (redemption value does not equal fair value)	—		—		—		(4)
Net income (loss) available to Warner Bros. Discovery, Inc. Series A common stockholders for basic and diluted earnings per share	$	1,580	$	(9,986)	$	1,127	$	(10,956)

Denominator — weighted average:
Common shares outstanding — basic	2,477		2,451		2,469		2,447

Dilutive effect of share-based awards	22		—		31		—
Common shares outstanding — diluted	2,499		2,451		2,500		2,447

Basic net loss per share allocated to common stockholders	$	0.64	$	(4.07)	$	0.46	$	(4.48)
Diluted net loss per share allocated to common stockholders	$	0.63	$	(4.07)	$	0.45	$	(4.48)

The table below presents the details of share-based awards that were excluded from the calculation of diluted earnings per share (in millions).


	Three Months Ended June 30,		Six Months Ended June 30,
	2025	2024	2025	2024
Anti-dilutive share-based awards	81	106	66	73

Supplier Finance Programs

As of June 30, 2025 and December 31, 2024, the Company has confirmed $278 million and $307 million, respectively, of accrued content producer liabilities. These amounts were outstanding and unpaid by the Company and were recorded in accrued liabilities on the consolidated balance sheets.

Leases

During the three months ended March 31, 2025, the Company subleased a portion of its Hudson Yards, New York office. As a result of executing the sublease, the Company recorded a right-of-use (“ROU”) asset impairment charge of $87 million. The ROU asset impairment charge was recorded in impairment and loss on dispositions in the consolidated statements of operations.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Other than the item disclosed above, no other material changes have occurred to the Company’s lease portfolio for the periods presented. Refer to the Company’s 2024 Form 10-K for more information on the Company’s leases.

Collaborative Arrangements

The arrangement among TNT Sports, CBS Broadcasting, Inc. (“CBS”), and the National Collegiate Athletic Association (the “NCAA”) provides TNT Sports and CBS with rights to the NCAA Division I Men’s Basketball Championship Tournament (the “NCAA Tournament”) in the U.S. and its territories and possessions through 2032. The aggregate programming rights fee, production costs, certain advertising revenues and sponsorship revenues related to the NCAA Tournament, and related programming are shared equally by the Company and CBS. However, if the amount paid for the programming rights fee and production costs in any given year exceeds the shared advertising and sponsorship revenues for that year, CBS’ share of such shortfall is limited to a specified annual cap. The amount recorded pursuant to the loss cap was $74 million during the six months ended June 30, 2025 and was not material for the six months ended June 30, 2024. In accounting for this arrangement, the Company records advertising revenue for the advertisements aired on its networks and amortizes its share of the programming rights fee based on the estimated relative value of each season over the term of the arrangement.

Venu Sports

On February 6, 2024, the Company announced that it would enter into a joint venture with ESPN, a subsidiary of The Walt Disney Company (“Disney”), and Fox Corporation (“Fox”) to form Venu Sports, a sports-centric streaming service in the United States. On February 20, 2024, FuboTV Inc. and FuboTV Media Inc. (collectively, “Fubo”) filed a lawsuit against Disney, including certain affiliates, Fox, and WBD (collectively, the “Defendants”) in the U.S. District Court for the Southern District of New York alleging claims under federal and New York antitrust laws.

On January 6, 2025, Disney announced that it had entered into a definitive agreement to combine certain of Hulu Live TV’s assets with Fubo (the “Fubo Transaction”) and provide Fubo a senior unsecured term loan of up to $145 million in January 2026 (the “Fubo Loan”). If Disney funds the Fubo Loan prior to the consummation of the Fubo Transaction, the Company and Fox will participate in a portion of the Fubo Loan by providing loans to Disney with substantially the same economic terms as the Fubo Loan. A $130 million termination fee will be payable by Disney to Fubo if the transaction is terminated under certain circumstances. The Company and Fox have agreed to reimburse a portion of the termination fee to Disney if it becomes payable. In addition, the Defendants reached a settlement with Fubo related to Fubo’s antitrust claims and collectively paid $220 million to Fubo in January 2025, of which the Company’s share was $55 million. As of June 30, 2025, no other funding under this agreement has occurred.

On January 10, 2025, the Defendants announced their decision to discontinue the Venu Sports joint venture and not launch its streaming service effective immediately.

Discovery Family

Hasbro Inc. (“Hasbro”) had the right to put the entirety of its remaining 40% interest in Discovery Family to the Company. Hasbro did not exercise the right by the election period expiration date of March 31, 2025. As of March 31, 2025, Hasbro’s noncontrolling interest was reclassified from redeemable noncontrolling interest to noncontrolling interest outside of stockholders’ equity on the Company’s consolidated balance sheets.

Accumulated Other Comprehensive Loss

The table below presents the changes in the components of accumulated other comprehensive loss, net of taxes (in millions).


	Three Months Ended June 30, 2025
	Currency Translation		Derivatives		Pension Plan and SERP Liability		Accumulated Other Comprehensive Loss
Beginning balance	$	(777)	$	11	$	(74)	$	(840)
Other comprehensive income (loss) before reclassifications	444		20		—		464
Reclassifications from accumulated other comprehensive loss to net income	—		5		—		5
Other comprehensive income (loss)	444		25		—		469
Ending balance	$	(333)	$	36	$	(74)	$	(371)

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	Three Months Ended June 30, 2024
	Currency Translation		Derivatives		Pension Plan and SERP Liability		Accumulated Other Comprehensive Loss
Beginning balance	$	(875)	$	22	$	(60)	$	(913)
Other comprehensive income (loss) before reclassifications	9		12		—		21
Reclassifications from accumulated other comprehensive loss to net income	—		2		—		2
Other comprehensive income (loss)	9		14		—		23
Ending balance	$	(866)	$	36	$	(60)	$	(890)


	Six Months Ended June 30, 2025
	Currency Translation		Derivatives		Pension Plan and SERP Liability		Accumulated Other Comprehensive Loss
Beginning balance	$	(1,008)	$	15	$	(74)	$	(1,067)
Other comprehensive income (loss) before reclassifications	675		29		—		704
Reclassifications from accumulated other comprehensive loss to net income	—		(8)		—		(8)
Other comprehensive income (loss)	675		21		—		696
Ending balance	$	(333)	$	36	$	(74)	$	(371)


	Six Months Ended June 30, 2024
	Currency Translation		Derivatives		Pension Plan and SERP Liability		Accumulated Other Comprehensive Loss
Beginning balance	$	(699)	$	18	$	(60)	$	(741)
Other comprehensive income (loss) before reclassifications	(167)		25		—		(142)
Reclassifications from accumulated other comprehensive loss to net income	—		(7)		—		(7)
Other comprehensive income (loss)	(167)		18		—		(149)
Ending balance	$	(866)	$	36	$	(60)	$	(890)

NOTE 14. RELATED PARTY TRANSACTIONS

In the normal course of business, the Company enters into transactions with related parties. Related party transactions include revenues and expenses for content and services provided to or acquired from equity method investees, entities that share common directorship, or minority partners of consolidated subsidiaries.

The table below presents a summary of the transactions with related parties (in millions).


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024




Revenues and service charges (a)	$	161	$	239	$	375	$	892
Expenses	$	84	$	83	$	152	$	160
Distributions to noncontrolling interests and redeemable noncontrolling interests	$	17	$	31	$	174	$	161

(a) The decrease in revenue and service charges in 2025 is primarily attributable to transactions with certain entities that are no longer considered related parties, as such entities and the Company ceased to share common directorship in 2025.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The table below presents receivables due from and payables due to related parties (in millions).


	June 30, 2025		December 31, 2024
Receivables	$	158	$	254
Payables	$	45	$	13

NOTE 15. COMMITMENTS AND CONTINGENCIES

Legal Matters

From time to time, in the normal course of its operations, the Company is subject to various litigation matters and claims, including claims related to employees, stockholders, vendors, other business partners, government regulations, or intellectual property, as well as disputes and matters involving counterparties to contractual agreements. A determination as to the amount of the accrual required for such contingencies is highly subjective and requires judgment about future events.

The Company may not currently be able to estimate the reasonably possible loss or range of loss for certain matters until developments in such matters have provided sufficient information to support an assessment of such loss. In the absence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual for such contingencies is made and no loss or range of loss is disclosed, including with respect to the matters noted below. Although the outcome of these matters cannot be predicted with certainty and the impact of the final resolution of these matters on the Company’s results of operations in a particular subsequent reporting period is not known, management does not currently believe that the resolution of these matters will have a material adverse effect on the Company’s future consolidated financial position, future results of operations, or cash flows.

Securities Class Action. On November 25, 2024, a securities class action complaint was filed in the United States District Court for the Southern District of New York (Collura v. Warner Bros. Discovery, Inc., No. 1:24-cv-09027-KPF). The complaint named Warner Bros. Discovery, Inc. (“WBD”), Gunnar Wiedenfels, and David M. Zaslav as defendants and asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder. On February 21, 2025, the court appointed co-lead plaintiffs (Anthony Yuson and Michael Steinberg) and co-lead counsel (Pomerantz LLP and The Rosen Law Firm, P.A.) to represent the putative class. On May 7, 2025, the lead plaintiffs filed a First Amended Complaint against WBD, Gunnar Wiedenfels, and David M. Zaslav. The First Amended Complaint generally alleges that, between February 23, 2024 and August 7, 2024, defendants made false and misleading statements in SEC filings and other public disclosures relating to WBD’s negotiations with the National Basketball Association (“NBA”) concerning its contractual rights to broadcast the NBA’s content and the potential impact of a failure to renew the contract on its business, in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, and seeks damages and other relief. The defendants moved to dismiss on July 11, 2025. The plaintiffs have until August 25, 2025 to file their opposition to defendants’ motion to dismiss.

Consolidated Derivative Action. Between December 20, 2024 and January 14, 2025, four shareholder derivative complaints were filed in the United States District Court for the Southern District of New York (Roy v. Zaslav et al., No. 1:24-cv-09856-AT, Hollin v. Zaslav et al., No. 1:24-cv-09885-AT, KO v. Zaslav et al., No. 1:25-cv-00114-AT, and Herman, III v. Chen et al., No. 1:25-cv-00352-AT). Each complaint names certain current and former directors and officers of WBD as defendants and WBD as nominal defendant, and each complaint seeks damages and other relief. The complaints generally assert claims against the defendants, derivatively on behalf of WBD, for alleged breaches of fiduciary duty based on the same facts alleged in the Collura securities case described above. The complaints assert various common law causes of action, including breach of fiduciary duties, aiding and abetting breach of fiduciary duties, abuse of control, unjust enrichment, gross mismanagement, and waste of corporate assets, as well claims for violations of Sections 14(a), 10(b), and 21D of the Exchange Act. On January 21, 2025, the court consolidated the four actions for all purposes under Case No. 1:24-cv-09856-AT, captioned as In re Warner Bros. Discovery, Inc. Derivative Litigation (the “Consolidated Derivative Action”). On February 19, 2025, the Court stayed the Consolidated Derivative Action pending resolution of a final decision on all motions to dismiss the operative complaint in the Collura securities action.

NOTE 16. REPORTABLE SEGMENTS

The Company’s operating segments are determined based on: (i) financial information reviewed by its chief operating decision maker (“CODM”), the Chief Executive Officer (“CEO”), (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions.

The accounting policies of the reportable segments are the same as the Company’s, except that certain inter-segment transactions that are eliminated for consolidation are not eliminated at the segment level. Inter-segment transactions primarily include advertising and content licenses. The Company generally records inter-segment transactions of content licenses at market value. The Company does not report assets by segment because it is not used by the CODM to allocate resources or evaluate segment performance.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

The Company evaluates the operating performance of its segments based on financial measures such as revenues and Adjusted EBITDA. Adjusted EBITDA is defined as operating income excluding:

employee share-based compensation;
depreciation and amortization;
restructuring and facility consolidation;
certain impairment charges;
gains and losses on business and asset dispositions;
third-party transaction and integration costs;
amortization of purchase accounting fair value step-up for content;
amortization of capitalized interest for content; and
other items impacting comparability.

The CODM uses this measure to assess the operating results and performance of the segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. The Company believes Adjusted EBITDA is relevant to investors because it allows them to analyze the operating performance of each segment using the same metric management uses. The Company excludes employee share-based compensation, restructuring, certain impairment charges, gains and losses on business and asset dispositions, and transaction and integration costs from the calculation of Adjusted EBITDA due to their impact on comparability between periods. Integration costs include transformative system implementations and integrations, such as Enterprise Resource Planning systems, and may take several years to complete. The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step-up for content (which is included in consolidated costs of revenues), and amortization of capitalized interest for content, as these amounts do not represent cash payments in the current reporting period. We prospectively updated certain corporate allocations at the beginning of 2025. The impact to prior periods was immaterial.

The tables below present summarized financial information for each of the Company’s reportable segments (in millions).

Revenues


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Streaming	$	2,793	$	2,568	$	5,449	$	5,028
Studios	3,801		2,449		6,115		5,270
Global Linear Networks	4,803		5,272		9,577		10,397
Corporate	1		1		1		2
Inter-segment eliminations	(1,586)		(577)		(2,351)		(1,026)
Total revenues	$	9,812	$	9,713	$	18,791	$	19,671

Reconciliation of Revenues to Segment Adjusted EBITDA


	Three months ended June 30, 2025
	Streaming		Studios		Global Linear Networks
Revenues	$	2,793	$	3,801	$	4,803






Less:
Content expense (a)	1,600		2,135		2,105
Personnel expense (b)	191		232		505
Marketing expense	294		363		115
Other segment expenses (c)	415		208		566
Segment Adjusted EBITDA	$	293	$	863	$	1,512

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	Three months ended June 30, 2024
	Streaming		Studios		Global Linear Networks
Revenues	$	2,568	$	2,449	$	5,272






Less:
Content expense (a)	1,699		1,532		1,965
Personnel expense (b)	201		231		566
Marketing expense	353		268		115
Other segment expenses (c)	422		208		628
Segment Adjusted EBITDA	$	(107)	$	210	$	1,998


	Six months ended June 30, 2025
	Streaming		Studios		Global Linear Networks
Revenues	$	5,449	$	6,115	$	9,577






Less:
Content expense (a)	3,104		3,474		3,937
Personnel expense (b)	377		462		1,001
Marketing expense	514		615		219
Other segment expenses (c)	822		442		1,115
Segment Adjusted EBITDA	$	632	$	1,122	$	3,305


	Six months ended June 30, 2024
	Streaming		Studios		Global Linear Networks
Revenues	$	5,028	$	5,270	$	10,397






Less:
Content expense (a)	3,266		3,482		3,808
Personnel expense (b)	393		471		1,114
Marketing expense	642		557		203
Other segment expenses (c)	748		366		1,155
Segment Adjusted EBITDA	$	(21)	$	394	$	4,117

(a) Content expense includes amortization, impairments, participations, residuals, development expense, and production costs, including talent costs, and is a component of costs of revenues. Content expense excludes content impairments and other development costs recorded in restructuring and other charges, amortization of purchase accounting fair value step-up for content, and amortization of capitalized interest for content as these items are excluded from the calculation of Adjusted EBITDA.

(b) Personnel expense is a component of costs of revenues and selling, general and administrative expense. Personnel expense includes marketing personnel compensation and excludes commissions (included in other segment expenses) and talent costs (included in content expense).

(c) Other segment expenses include distribution costs, other direct costs, software and hardware costs, IT services, professional and consulting fees, commissions, and certain other overhead costs. Other segment expenses exclude depreciation and amortization, amortization of purchase accounting fair value step-up for content, amortization of capitalized interest for content, employee share-based compensation, third-party transaction and integration costs, and other items impacting comparability as these items are excluded from the calculation of Adjusted EBITDA.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Reconciliation of segment adjusted EBITDA to loss before income taxes


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Streaming	$	293	$	(107)	$	632	$	(21)
Studios	863		210		1,122		394
Global Linear Networks	1,512		1,998		3,305		4,117
Segment Adjusted EBITDA	2,668		2,101		5,059		4,490
Depreciation and amortization	1,447		1,744		2,994		3,632
Employee share-based compensation	173		156		293		255
Restructuring and other charges	80		117		134		152
Transaction and integration costs	17		51		97		132
Facility consolidation costs	4		5		9		7
Impairment and amortization of fair value step-up for content	388		522		628		757
Amortization of capitalized interest for content	3		13		9		30
Impairments and loss on dispositions	26		9,395		116		9,407

Corporate	316		285		549		631
Inter-segment eliminations	399		21		452		(38)
Other income, net	(139)		(172)		(221)		(158)
(Income) loss from equity investees, net	(5)		23		2		71
Gain on extinguishment of debt	(2,958)		(542)		(2,954)		(567)
Interest expense, net	463		518		931		1,033
Income (loss) before income taxes	$	2,454	$	(10,035)	$	2,020	$	(10,854)

NOTE 17. SUBSEQUENT EVENTS

In July 2025, the Company repaid $100 million of aggregate principal amount outstanding of its Bridge Loan Facility.

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