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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Revenues:
Distribution	$	4,702	$	4,920	$	14,473	$	14,784
Advertising	1,407		1,682		5,603		6,260
Content	2,649		2,721		6,986		7,388
Other	287		300		774		862
Total revenues	9,045		9,623		27,836		29,294
Costs and expenses:
Costs of revenues, excluding depreciation and amortization	4,564		5,181		15,662		17,443
Selling, general and administrative	2,361		2,385		7,032		7,078
Depreciation and amortization	1,375		1,762		4,369		5,394
Restructuring and other charges	88		9		222		161
Impairments and loss on dispositions	46		5		162		9,412


Total costs and expenses	8,434		9,342		27,447		39,488
Operating income (loss)	611		281		389		(10,194)
Interest expense, net	(570)		(494)		(1,501)		(1,527)
(Loss) gain on extinguishment of debt, net	(1)		23		2,953		590
Income (loss) from equity investees, net	17		(18)		15		(89)
Other (expense) income, net	(30)		30		191		188
Income (loss) before income taxes	27		(178)		2,047		(11,032)
Income tax (expense) benefit	(170)		319		(1,051)		190
Net (loss) income	(143)		141		996		(10,842)
Net income attributable to noncontrolling interests	(4)		(3)		(19)		(20)
Net (income) loss attributable to redeemable noncontrolling interests	(1)		(3)		2		45
Net (loss) income available to Warner Bros. Discovery, Inc.	$	(148)	$	135	$	979	$	(10,817)
Net (loss) income per share available to Warner Bros. Discovery, Inc. Series A common stockholders:
Basic	$	(0.06)	$	0.06	$	0.40	$	(4.42)
Diluted	$	(0.06)	$	0.05	$	0.39	$	(4.42)
Weighted average shares outstanding:
Basic	2,479		2,453		2,473		2,449
Diluted	2,479		2,470		2,510		2,449

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Net (loss) income	$	(143)	$	141	$	996	$	(10,842)
Other comprehensive income (loss):
Currency translation
Change in net unrealized (losses) gains	(52)		482		623		315
Less: Reclassification adjustment for net losses included in net income	3		—		3		—
Net change, net of income tax benefit (expense) of $3, $15, $(98), and $13	(49)		482		626		315

Derivatives
Change in net unrealized (losses) gains	(18)		15		11		40
Less: Reclassification adjustment for net losses (gains) included in net income	7		(8)		(1)		(15)
Net change, net of income tax benefit (expense) of $2, $(1), $(8), and $(5)	(11)		7		10		25
Comprehensive (loss) income	(203)		630		1,632		(10,502)
Comprehensive income attributable to noncontrolling interests	(2)		(10)		(22)		(23)
Comprehensive (income) loss attributable to redeemable noncontrolling interests	(1)		(3)		2		45
Comprehensive (loss) income attributable to Warner Bros. Discovery, Inc.	$	(206)	$	617	$	1,612	$	(10,480)

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)


	September 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	4,294	$	5,312
Receivables, net	5,128		4,947

Prepaid expenses and other current assets	3,640		3,819
Total current assets	13,062		14,078
Film and television content rights and games	19,104		19,102
Property and equipment, net	6,517		6,087


Goodwill	25,920		25,667
Intangible assets, net	28,789		32,299

Other noncurrent assets	7,127		7,327
Total assets	$	100,519	$	104,560
Liabilities and equity
Current liabilities:
Accounts payable	$	1,083	$	1,055
Accrued liabilities	9,292		10,438

Deferred revenues	1,649		1,569
Current portion of debt	139		2,748
Total current liabilities	12,163		15,810
Noncurrent portion of debt	33,382		36,757
Deferred income taxes	6,708		6,985
Other noncurrent liabilities	10,961		10,070
Total liabilities	63,214		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; 2,708 and 2,684 shares issued; and 2,477 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	55,926		55,560
Treasury stock, at cost: 230 and 230 shares	(8,244)		(8,244)
Accumulated deficit	(11,260)		(12,239)
Accumulated other comprehensive loss	(431)		(1,067)
Total Warner Bros. Discovery, Inc. stockholders’ equity	36,018		34,037
Noncontrolling interests	1,264		792
Total equity	37,282		34,829
Total liabilities and equity	$	100,519	$	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)


	Nine Months Ended September 30,
	2025		2024
Operating Activities
Net income (loss)	$	996	$	(10,842)
Adjustments to reconcile net income to cash provided by operating activities:
Content rights amortization and impairment	9,093		10,879
Depreciation and amortization	4,369		5,394
Deferred income taxes	(272)		(1,351)

Share-based compensation expense	540		419

Equity in losses of equity method investee companies and cash distributions	26		130
Gain on sale of investments	(4)		(204)
Gain on extinguishment of debt	(2,953)		(590)
Impairments and loss on dispositions	162		9,412

Other, net	(75)		55
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net	(200)		517
Film and television content rights, games, and production payables, net	(9,096)		(9,506)
Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities	(402)		(1,493)
Foreign currency, prepaid expenses and other assets, net	331		(160)
Cash provided by operating activities	2,515		2,660
Investing Activities
Purchases of property and equipment	(810)		(662)

Proceeds from sales of investments	54		324
Investments in and advances to equity investments	(97)		(104)





Other investing activities, net	92		87
Cash used in investing activities	(761)		(355)
Financing Activities

Principal repayments of debt, including premiums and discounts to par value	(21,663)		(4,550)
Borrowings from debt, net of discount and issuance costs	18,306		1,617
Distributions to noncontrolling interests and redeemable noncontrolling interests	(188)		(172)
Proceeds for noncontrolling interest in joint venture	633		—





Securitization receivables collected but not remitted	51		13
Borrowings under commercial paper program and revolving credit facility	3,551		14,203
Repayments under commercial paper program and revolving credit facility	(3,551)		(14,203)


Other financing activities, net	(262)		(57)
Cash used in financing activities	(3,123)		(3,149)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	251		15
Net change in cash, cash equivalents, and restricted cash	(1,118)		(829)
Cash, cash equivalents, and restricted cash, beginning of period	5,416		4,319
Cash, cash equivalents, and restricted cash, end of period	$	4,298	$	3,490

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


Net (loss) income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests		—		—		—		—		(148)		—		(148)		4		(144)
Other comprehensive loss		—		—		—		—		—		(60)		(60)		(2)		(62)
Share-based compensation		—		—		174		—		—		—		174		—		174



Tax settlements associated with share-based plans		—		—		(2)		—		—		—		(2)		—		(2)
Dividends paid to noncontrolling interests		—		—		—		—		—		—		—		(13)		(13)
Issuance of stock in connection with share-based plans		3		—		5		—		—		—		5		—		5

Tax gain on formation of music catalog joint venture		—		—		—		—		—		—		—		(31)		(31)
Formation of a joint venture		—		—		—		—		—		—		—		32		32

September 30, 2025		2,708		$	27	$	55,926	$	(8,244)	$	(11,260)	$	(431)	$	36,018	$	1,264	$	37,282

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


Net income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests	—	—		—		—		135		—		135		3		138
Other comprehensive income	—	—		—		—		—		489		489		7		496
Share-based compensation	—	—		135		—		—		—		135		—		135



Tax settlements associated with share-based compensation	—	—		(5)		—		—		—		(5)		—		(5)
Dividends paid to noncontrolling interests	—	—		—		—		—		—		—		(5)		(5)
Issuance of stock in connection with share-based plans	2	—		4		—		—		—		4		—		4
Redeemable noncontrolling interest adjustments to redemption value	—	—		(3)		—		—		—		(3)		—		(3)

September 30, 2024	2,683	$	27	$	55,463	$	(8,244)	$	(11,745)	$	(401)	$	35,100	$	957	$	36,057

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. and Discovery Global. 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 Company remains on track to complete the Separation by mid-2026, subject to closing and other conditions, including final approval by the Warner Bros. Discovery Board (the “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 October 2025, the Company announced that the Board will evaluate a broad range of strategic options, including continuing to advance the Separation, a transaction for the entire company or separate transactions for Warner Bros. and/or Discovery Global, as well as an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global. There is no deadline or definitive timetable set for completion of the strategic alternatives review process. There can be no assurance that this process will result in the Company pursuing a transaction or other outcome or that the Company will be able to execute any strategic alternative that is identified and pursued.

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 September 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”).

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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.

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.

Credit Losses

In July 2025, the FASB issued guidance which provides a practical expedient to simplify the estimation of expected credit losses by assuming that current conditions as of the balance sheet do not change for the remaining life of the asset. This guidance is effective for interim and annual periods beginning after December 15, 2025. Early adoption is permitted, and the standard is to be applied prospectively. The Company is currently evaluating the impact this guidance will have on its consolidated financial statements and disclosures.

Accounting for Internal-Use Software

In September 2025, the FASB issued guidance which amends the existing standard for internal-use software to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed, and the software will be used to perform the function intended. This guidance may be applied prospectively, retrospectively, or with a modified transition approach, and is effective for all annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.

Derivatives and Hedging and Revenue from Contracts with Customers

In September 2025, the FASB issued guidance that amends existing standards for derivatives and hedging (“Topic 815”) and revenue from contracts with customers (“Topic 606”). The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. This guidance may be applied prospectively or with a modified retrospective approach, and is effective for all annual periods beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and 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 nine months ended September 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:

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 or review of strategic alternatives;
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 inventory 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.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Streaming	$	1	$	(16)	$	20	$	1
Studios	12		2		6		32
Global Linear Networks	16		5		57		58
Corporate and inter-segment eliminations	59		18		139		70
Total restructuring and other charges	$	88	$	9	$	222	$	161

During the three and nine months ended September 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


Contract termination accruals, net	—		—		—		1		1
Employee termination accruals, net	19		6		54		41		120
Other accruals and adjustments	1		—		3		97		101
Cash paid	(32)		(52)		(81)		(71)		(236)
September 30, 2025	$	19	$	49	$	81	$	126	$	275

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 4. REVENUES

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


	Three Months Ended September 30, 2025
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	2,317	$	2	$	2,387	$	(4)	$	4,702
Advertising	235		—		1,186		(14)		1,407
Content	79		3,111		217		(758)		2,649
Other	2		208		93		(16)		287
Total	$	2,633	$	3,321	$	3,883	$	(792)	$	9,045


	Three Months Ended September 30, 2024
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	2,320	$	6	$	2,598	$	(4)	$	4,920
Advertising	205		1		1,490		(14)		1,682
Content	107		2,463		833		(682)		2,721
Other	2		210		89		(1)		300
Total	$	2,634	$	2,680	$	5,010	$	(701)	$	9,623


	Nine Months Ended September 30, 2025
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	7,056	$	4	$	7,422	$	(9)	$	14,473
Advertising	754		1		4,897		(49)		5,603
Content	269		8,841		884		(3,008)		6,986
Other	3		590		257		(76)		774
Total	$	8,082	$	9,436	$	13,460	$	(3,142)	$	27,836


	Nine Months Ended September 30, 2024
	Streaming		Studios		Global Linear Networks		Corporate and Inter-segment Eliminations		Total
Revenues:
Distribution	$	6,707	$	14	$	8,070	$	(7)	$	14,784
Advertising	620		5		5,691		(56)		6,260
Content	329		7,323		1,396		(1,660)		7,388
Other	6		608		250		(2)		862
Total	$	7,662	$	7,950	$	15,407	$	(1,725)	$	29,294

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Contract Liabilities and Contract Assets

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


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


Contract liabilities	Deferred revenues	$	1,649	$	1,569
Contract liabilities	Other noncurrent liabilities	227		206

For the nine months ended September 30, 2025 and 2024, respectively, revenues of $1,205 million and $1,542 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 September 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	September 30, 2025		Duration
Distribution - fixed price or minimum guarantee	$	1,916	Through 2030
Content licensing and sports sublicensing	5,089		Through 2032
Brand licensing	3,548		Through 2052
Advertising	943		Through 2032
Other	139		Through 2029
Total	$	11,635

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.

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 $4,004 million as of September 30, 2025.

The Company recognized $29 million and $121 million for the three and nine months ended September 30, 2025, respectively, and $33 million and $121 million for the three and nine months ended September 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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Gross receivables sold/cash proceeds received	$	3,913	$	3,528	$	12,135	$	11,024
Collections reinvested under revolving receivables program	(4,409)		(3,834)		(12,769)		(11,464)
Net cash proceeds remitted	$	(496)	$	(306)	$	(634)	$	(440)
Net receivables sold	$	3,912	$	3,524	$	12,102	$	10,967
Obligations recorded (Level 3)	$	77	$	31	$	277	$	270

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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).


	September 30, 2025		December 31, 2024
Gross receivables pledged as collateral	$	2,200	$	2,402
Restricted cash pledged as collateral	$	—	$	100
Balance sheet classification:
Receivables, net	$	1,812	$	2,039
Prepaid expenses and other current assets	$	—	$	100
Other noncurrent assets	$	388	$	363

Accounts Receivable Factoring

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

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).


	September 30, 2025
		Predominantly Monetized Individually		Predominantly Monetized as a Group		Total
Production costs:
Released, less amortization		$	3,433	$	5,744	$	9,177
Completed and not released		646		661		1,307
In production and other		1,917		2,208		4,125
Total production costs		$	5,996	$	8,613	$	14,609
Licensed content, live programming, and advances, net						4,859
Game development costs, less amortization						291
Total film and television content rights and games						19,759
Less: Current content rights and prepaid license fees, net						(655)
Total noncurrent film and television content rights and games						$	19,104

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024

Predominantly monetized individually	$	526	$	1,624	$	1,751	$	3,300





Predominantly monetized as a group	1,680		1,363		7,243		7,256



Total content amortization	$	2,206	$	2,987	$	8,994	$	10,556

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 $36 million and $99 million, respectively, for the three and nine months ended September 30, 2025. For the three and nine months ended September 30, 2024, content impairments were $145 million and $323 million, respectively.

NOTE 7. INVESTMENTS

The Company’s equity investments consisted of the following (in millions).


Category	Balance Sheet Location	Ownership	September 30, 2025		December 31, 2024
Equity method investments:
The Chernin Group (TCG) 2.0-A, LP	Other noncurrent assets	44%	$	243	$	240
nC+	Other noncurrent assets	32%	147		128
TNT Sports	Other noncurrent assets	50%	87		92
Other	Other noncurrent assets		260		261
Total equity method investments			737		721

Investments with readily determinable fair values	Other noncurrent assets		—		41


Investments without readily determinable fair values	Other noncurrent assets(a)		349		353
Total investments			$	1,086	$	1,115

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

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 September 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 $541 million. The Company’s maximum estimated exposure excludes the non-contractual future funding of VIEs. The aggregate carrying values of these VIE investments were $529 million and $550 million as of September 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 nine months ended September 30, 2025 and 2024.

In May 2024, the Company sold its 50% interest in All3Media, an equity method investment, for proceeds of $324 million and recorded a gain of $203 million in other (expense) income, net in the consolidated statements of operations.

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 September 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.

NOTE 8. DEBT

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


	Weighted-Average Interest Rate as of September 30, 2025		September 30, 2025		December 31, 2024
Bridge loan with maturity of 15 months	7.16	%	$	16,000	$	—

Senior notes with maturities of 5 years or less	3.92	%	6,658		13,744
Senior notes with maturities between 5 and 10 years	4.37	%	3,509		7,853
Senior notes with maturities greater than 10 years	5.17	%	7,677		17,930
Total debt			33,844		39,527
Unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting, net			(323)		(22)
Debt, net of unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting			33,521		39,505
Current portion of debt			(139)		(2,748)
Noncurrent portion of debt			$	33,382	$	36,757

During the three months ended September 30, 2025, the Company repaid $1,000 million of aggregate principal amount outstanding of its Bridge Loan Facility, repaid in full at maturity $97 million of aggregate principal amount outstanding of its senior notes due July 2025, completed open market repurchases for $59 million of aggregate principal amount outstanding of its senior notes, and purchased $2 million of aggregate principal amount outstanding of its senior notes to finalize the Tender Offers further described below.

During the three months ended June 30, 2025, the Company’s wholly-owned subsidiaries, Discovery Communications, LLC (“DCL”), Discovery Global Holdings, Inc. (“DGH”) (formerly known as WarnerMedia Holdings, Inc.), 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, DGH 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.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 DGH 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, DGH, 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, DGH 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 or in connection with the pursuit of a strategic alternative. 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 substantially 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.

During the three months ended September 30, 2024, the Company repaid in full at maturity £400 million ($529 million equivalent at repayment) of aggregate principal amount outstanding of its senior notes due September 2024 and completed open market repurchases for $361 million of aggregate principal amount outstanding of its senior notes.

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) DGH’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 September 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 DGH (to the extent it is not the primary obligor on such senior notes), except for $192 million of senior notes related to the legacy WarnerMedia Business.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 September 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 September 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.

There were no amounts eligible to be offset under master netting agreements as of September 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).


	September 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	$	2,046	$	40	$	63	$	46	$	32	$	1,608	$	47	$	14	$	25	$	28


Net investment hedges: (a)
Cross-currency swaps	451		7		—		—		21		421		6		—		—		4



No hedging designation:
Foreign exchange	336		8		1		11		77		951		18		7		14		122
Cross-currency swaps	225		4		—		—		12		210		2		—		—		1
Interest rate swaps	2,500		1		—		2		—		—		—		—		—		—
Total return swaps	496		11		—		—		—		454		—		—		16		—


Total			$	71	$	64	$	59	$	142			$	73	$	21	$	55	$	155

(a) Excludes €781 million and €1,500 million of euro-denominated notes ($918 million and $1,558 million equivalent) at September 30, 2025 and December 31, 2024, respectively, designated as a net investment hedge.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Gains (losses) recognized in accumulated other comprehensive loss:
Foreign exchange - derivative adjustments	$	(22)	$	15	$	20	$	46

Gains (losses) reclassified into income from accumulated other comprehensive loss:
Foreign exchange - distribution revenue	(12)		9		(13)		12
Foreign exchange - advertising revenue	—		1		—		1
Foreign exchange - costs of revenues	3		(1)		4		6

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

If current fair values of designated cash flow hedges as of September 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 nine months ended September 30, 2025 and 2024.


	Three Months Ended September 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)	$	23	Interest expense, net		$	2		$	6


Euro-denominated notes (foreign denominated debt)	(1)		(71)		N/A		—			—
Sterling notes (foreign denominated debt)	—		(9)		N/A		—			—
Total	$	(9)	$	(57)			$	2		$	6

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	Nine Months Ended September 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	$	(20)	$	62	Interest expense, net		$	8		$	18


Euro-denominated notes (foreign denominated debt)	(209)		(50)		N/A		—			—
Sterling notes (foreign denominated debt)	—		(5)		N/A		—			—
Total	$	(229)	$	7			$	8		$	18

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.

In June 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 (expense) income, net.

The following table presents the pretax gains (losses) on derivatives not designated as hedges and recognized in selling, general and administrative expense and other (expense) income, net in the consolidated statements of operations (in millions).


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Interest rate swaps	$	2	$	(29)	$	—	$	(1)
Total return swaps	24		21		44		41
Total in selling, general and administrative expense	26		(8)		44		40

Interest rate swaps	—		—		—		(3)
Cross-currency swaps	(3)		—		(10)		—


Foreign exchange derivatives	—		(6)		34		(31)
Total in other (expense) income, net	(3)		(6)		24		(34)
Total	$	23	$	(14)	$	68	$	6

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.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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


		September 30, 2025
Category	Balance Sheet Location	Level 1		Level 2		Level 3		Total
Assets
Cash equivalents:
Time deposits	Cash and cash equivalents	$	—	$	312	$	—	$	312

Equity securities:
Money market fund	Cash and cash equivalents	56		—		—		56

Mutual funds	Prepaid expenses and other current assets	14		—		—		14
Company-owned life insurance contracts	Prepaid expenses and other current assets	—		5		—		5
Mutual funds	Other noncurrent assets	207		—		—		207
Company-owned life insurance contracts	Other noncurrent assets	—		101		—		101



Total		$	277	$	418	$	—	$	695
Liabilities
Deferred compensation plan	Accrued liabilities	$	69	$	—	$	—	$	69
Deferred compensation plan	Other noncurrent liabilities	678		—		—		678
Total		$	747	$	—	$	—	$	747


		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 September 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 $15.8 billion and $34.9 billion as of September 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.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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).


	Nine Months Ended September 30, 2025
	Awards	Weighted-Average Grant Price
Awards granted:
PRSUs	4.7	$	11.04
RSUs	42.3	$	10.93
Stock options	25.2	$	10.31

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 September 30, 2025 (in millions, except years).


	Unrecognized Compensation Cost		Weighted-Average Amortization Period (years)
PRSUs	$	85	1.0
RSUs	545		1.4
Stock options	161		2.6

Total unrecognized compensation cost	$	791

NOTE 12. INCOME TAXES

Income tax (expense) benefit was $(170) million and $319 million for the three months ended September 30, 2025 and 2024, respectively, and $(1,051) million and $190 million for the nine months ended September 30, 2025 and 2024, respectively. The increase in income tax expense for the three and nine months ended September 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 the absence of a non-cash goodwill impairment charge of $9.1 billion recorded in 2024, the majority of which was not deductible for tax purposes. The increase in tax expense was further impacted by the effect of foreign operations, including a net tax expense related to prior year tax positions finalized in tax returns filed during the three months ended September 30, 2025.

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

As of September 30, 2025 and December 31, 2024, the Company’s reserves for unrecognized tax benefits totaled $2,536 million and $2,371 million, respectively.

As of September 30, 2025 and December 31, 2024, the Company had accrued $865 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 September 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 (“OBBBA”) was signed into law in the United States, introducing a broad range of tax reform provisions. The impact of the OBBBA primarily affected the Company’s deferred tax liabilities and has been reflected in the Company’s financial statements for the period ended September 30, 2025. The Company continues to monitor regulatory guidance related to the implementation of the OBBBA and will update its tax positions as necessary in future periods.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

NOTE 13. SUPPLEMENTAL DISCLOSURES

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

Other (Expense) Income, net

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Foreign currency (losses) gains, net	$	(66)	$	(15)	$	22	$	(206)
(Losses) gains on derivative instruments, net	(3)		(6)		38		(29)

Change in the value of investments with readily determinable fair value	4		(5)		8		(7)
Gain on sale of equity method investments	—		—		—		203

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

Interest income	47		49		170		172
Indemnification receivable accrual	(2)		4		(45)		100
Other (expense) income, net	(10)		3		2		(18)
Total other (expense) income, net	$	(30)	$	30	$	191	$	188

Supplemental Cash Flow Information


	Nine Months Ended September 30,
	2025		2024


Non-cash investing and financing activities:








Assets acquired under finance lease and other arrangements	$	445	$	384

Settlement of PRSU awards	$	91	$	50

Cash, Cash Equivalents, and Restricted Cash


	September 30, 2025		December 31, 2024
Cash and cash equivalents	$	4,294	$	5,312
Restricted cash - recorded in prepaid expenses and other current assets (1)	4		104
Total cash, cash equivalents, and restricted cash	$	4,298	$	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.)

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Numerator:
Net (loss) income	$	(143)	$	141	$	996	$	(10,842)
Less:
Net income attributable to noncontrolling interests	(4)		(3)		(19)		(20)
Net (income) loss attributable to redeemable noncontrolling interests	(1)		(3)		2		45
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	$	(148)	$	135	$	979	$	(10,821)

Denominator — weighted average:
Common shares outstanding — basic	2,479		2,453		2,473		2,449

Dilutive effect of share-based awards	—		17		37		—
Common shares outstanding — diluted	2,479		2,470		2,510		2,449

Basic net income (loss) per share allocated to common stockholders	$	(0.06)	$	0.06	$	0.40	$	(4.42)
Diluted net income (loss) per share allocated to common stockholders	$	(0.06)	$	0.05	$	0.39	$	(4.42)

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 September 30,		Nine Months Ended September 30,
	2025	2024	2025	2024
Anti-dilutive share-based awards	95	57	47	73

Supplier Finance Programs

As of September 30, 2025 and December 31, 2024, the Company has confirmed $225 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.

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.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 nine months ended September 30, 2025 and was not material for the nine months ended September 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. 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.

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 September 30, 2025
	Currency Translation		Derivatives		Pension Plan and SERP Liability		Accumulated Other Comprehensive Loss
Beginning balance	$	(333)	$	36	$	(74)	$	(371)
Other comprehensive loss before reclassifications	(52)		(18)		—		(70)
Reclassifications from accumulated other comprehensive loss to net income	3		7		—		10
Other comprehensive loss	(49)		(11)		—		(60)
Ending balance	$	(382)	$	25	$	(74)	$	(431)


	Three Months Ended September 30, 2024
	Currency Translation		Derivatives		Pension Plan and SERP Liability		Accumulated Other Comprehensive Loss
Beginning balance	$	(866)	$	36	$	(60)	$	(890)
Other comprehensive income before reclassifications	482		15		—		497
Reclassifications from accumulated other comprehensive loss to net income	—		(8)		—		(8)
Other comprehensive income	482		7		—		489
Ending balance	$	(384)	$	43	$	(60)	$	(401)

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	Nine Months Ended September 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 before reclassifications	623		11		—		634
Reclassifications from accumulated other comprehensive loss to net income	3		(1)		—		2
Other comprehensive income	626		10		—		636
Ending balance	$	(382)	$	25	$	(74)	$	(431)


	Nine Months Ended September 30, 2024
	Currency Translation		Derivatives		Pension Plan and SERP Liability		Accumulated Other Comprehensive Loss
Beginning balance	$	(699)	$	18	$	(60)	$	(741)
Other comprehensive income before reclassifications	315		40		—		355
Reclassifications from accumulated other comprehensive loss to net income	—		(15)		—		(15)
Other comprehensive income	315		25		—		340
Ending balance	$	(384)	$	43	$	(60)	$	(401)

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024




Revenues and service charges (a)	$	194	$	237	$	569	$	1,129
Expenses	$	39	$	58	$	191	$	218
Distributions to noncontrolling interests and redeemable noncontrolling interests	$	14	$	11	$	188	$	172

(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.

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


	September 30, 2025		December 31, 2024
Receivables	$	142	$	254
Payables	$	14	$	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.

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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. As of September 24, 2025, the motion has been fully briefed and is pending before the court.

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.

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;

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Streaming	$	2,633	$	2,634	$	8,082	$	7,662
Studios	3,321		2,680		9,436		7,950
Global Linear Networks	3,883		5,010		13,460		15,407
Corporate	1		4		2		6
Inter-segment eliminations	(793)		(705)		(3,144)		(1,731)
Total revenues	$	9,045	$	9,623	$	27,836	$	29,294

Reconciliation of Revenues to Segment Adjusted EBITDA


	Three months ended September 30, 2025
	Streaming		Studios		Global Linear Networks
Revenues	$	2,633	$	3,321	$	3,883






Less:
Content expense (a)	1,497		1,843		1,055
Personnel expense (b)	175		240		479
Marketing expense	210		331		128
Other segment expenses (c)	406		212		519
Segment Adjusted EBITDA	$	345	$	695	$	1,702

WARNER BROS. DISCOVERY, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)


	Three months ended September 30, 2024
	Streaming		Studios		Global Linear Networks
Revenues	$	2,634	$	2,680	$	5,010






Less:
Content expense (a)	1,470		1,675		1,679
Personnel expense (b)	194		229		524
Marketing expense	263		309		125
Other segment expenses (c)	418		159		567
Segment Adjusted EBITDA	$	289	$	308	$	2,115


	Nine months ended September 30, 2025
	Streaming		Studios		Global Linear Networks
Revenues	$	8,082	$	9,436	$	13,460






Less:
Content expense (a)	4,601		5,317		4,992
Personnel expense (b)	552		702		1,480
Marketing expense	724		946		347
Other segment expenses (c)	1,228		654		1,634
Segment Adjusted EBITDA	$	977	$	1,817	$	5,007


	Nine months ended September 30, 2024
	Streaming		Studios		Global Linear Networks
Revenues	$	7,662	$	7,950	$	15,407






Less:
Content expense (a)	4,736		5,157		5,487
Personnel expense (b)	587		700		1,638
Marketing expense	905		866		328
Other segment expenses (c)	1,166		525		1,722
Segment Adjusted EBITDA	$	268	$	702	$	6,232

(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 September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Streaming	$	345	$	289	$	977	$	268
Studios	695		308		1,817		702
Global Linear Networks	1,702		2,115		5,007		6,232
Segment Adjusted EBITDA	2,742		2,712		7,801		7,202
Depreciation and amortization	1,375		1,762		4,369		5,394
Employee share-based compensation	240		157		533		412
Restructuring and other charges	88		9		222		161
Transaction and integration costs	11		33		108		165
Facility consolidation costs	1		2		10		9
Impairment and amortization of fair value step-up for content	79		156		707		913
Amortization of capitalized interest for content	19		8		28		38
Impairments and loss on dispositions	46		5		162		9,412

Corporate	258		296		807		927
Inter-segment eliminations	14		3		466		(35)
Other expense (income), net	30		(30)		(191)		(188)
(Income) loss from equity investees, net	(17)		18		(15)		89
Loss (gain) on extinguishment of debt	1		(23)		(2,953)		(590)
Interest expense, net	570		494		1,501		1,527
Income (loss) before income taxes	$	27	$	(178)	$	2,047	$	(11,032)

NOTE 17. SUBSEQUENT EVENTS

In October 2025, the Company repaid $200 million of aggregate principal amount outstanding of its Bridge Loan Facility and borrowed $210 million under its commercial paper program, which is expected to be repaid within the current quarter.

Additionally, the Company entered into a 16 year operating lease agreement for the Ranch Lot in Burbank and recorded an operating lease right-of-use asset and liability of $637 million and $666 million, respectively. Total future lease payments related to this lease agreement will be $1.1 billion.

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