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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number: 001-34177
WBD_HorizontalLogo_Blue.jpg
Warner Bros. Discovery, Inc.
(Exact name of registrant as specified in its charter)
Delaware35-2333914
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)
230 Park Avenue South10003
New York, New York
(Zip Code)
(Address of principal executive offices)
(212) 548-5555
(Registrant’s telephone number, including area code)

N/A
(Former name, former address and former fiscal year, if changed since last report)



Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolsName of Each Exchange on Which Registered
Series A Common StockWBDThe Nasdaq Global Select Market

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  o
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  ý    No  ¨
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filerýAccelerated filer¨
Non-accelerated fileroSmaller reporting company☐
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ý

Total number of shares outstanding of each class of the Registrant’s common stock as of April 25, 2024:
Series A Common Stock, par value $0.01 per share2,450,313,398 



WARNER BROS. DISCOVERY, INC.
FORM 10-Q
TABLE OF CONTENTS
 
 Page
3

PART I. FINANCIAL INFORMATION
ITEM 1. Unaudited Financial Statements.
WARNER BROS. DISCOVERY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited; in millions, except per share amounts)
 Three Months Ended March 31,
 20242023
Revenues:
Distribution$4,985 $5,163 
Advertising2,148 2,298 
Content2,558 2,954 
Other267 285 
Total revenues9,958 10,700 
Costs and expenses:
Costs of revenues, excluding depreciation and amortization6,058 6,685 
Selling, general and administrative2,232 2,388 
Depreciation and amortization1,888 2,058 
Restructuring and other charges35 95 
Impairment and loss on dispositions12 31 
Total costs and expenses10,225 11,257 
Operating loss(267)(557)
Interest expense, net(515)(571)
Loss from equity investees, net(48)(37)
Other income (expense), net11 (73)
Loss before income taxes(819)(1,238)
Income tax (expense) benefit(136)178 
Net loss(955)(1,060)
Net income attributable to noncontrolling interests(7)(8)
Net income attributable to redeemable noncontrolling interests(4)(1)
Net loss available to Warner Bros. Discovery, Inc.$(966)$(1,069)
Net loss per share available to Warner Bros. Discovery, Inc. Series A common stockholders:
Basic
$(0.40)$(0.44)
Diluted$(0.40)$(0.44)
Weighted average shares outstanding:
Basic2,443 2,432 
Diluted2,443 2,432 
The accompanying notes are an integral part of these consolidated financial statements.
4

WARNER BROS. DISCOVERY, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(unaudited; in millions)

Three Months Ended March 31,
20242023
Net loss$(955)$(1,060)
Other comprehensive loss:
Currency translation, net of income tax benefit of $7 and $(5)
(176)426 
Pension plan and SERP liability, net of income tax benefit of $— and $(3)
— (9)
Derivatives
Change in net unrealized gains13 3 
Less: Reclassification adjustment for net gains included in net income (9)(2)
Net change, net of income tax benefit of $— and $2
4 1 
Comprehensive loss(1,127)(642)
Comprehensive income attributable to noncontrolling interests(7)(8)
Comprehensive income attributable to redeemable noncontrolling interests(4)(1)
Comprehensive loss attributable to Warner Bros. Discovery, Inc.$(1,138)$(651)
The accompanying notes are an integral part of these consolidated financial statements.
5
WARNER BROS. DISCOVERY, INC.
CONSOLIDATED BALANCE SHEETS
(unaudited; in millions, except par value)
March 31, 2024December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents$2,976 $3,780 
Receivables, net6,303 6,047 
Prepaid expenses and other current assets4,623 4,391 
Total current assets13,902 14,218 
Film and television content rights and games20,439 21,229 
Property and equipment, net5,937 5,957 
Goodwill34,891 34,969 
Intangible assets, net36,648 38,285 
Other noncurrent assets8,002 8,099 
Total assets$119,819 $122,757 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$1,245 $1,260 
Accrued liabilities10,288 10,368 
Deferred revenues1,993 1,924 
Current portion of debt3,430 1,780 
Total current liabilities16,956 15,332 
Noncurrent portion of debt39,148 41,889 
Deferred income taxes8,303 8,736 
Other noncurrent liabilities10,118 10,328 
Total liabilities74,525 76,285 
Commitments and contingencies (See Note 15)
Redeemable noncontrolling interests179 165 
Warner Bros. Discovery, Inc. stockholders’ equity:
Series A common stock: $0.01 par value; 10,800 and 10,800 shares authorized; 2,679 and 2,669 shares issued; and 2,449 and 2,439 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 capital55,175 55,112 
Treasury stock, at cost: 230 and 230 shares
(8,244)(8,244)
Accumulated deficit(1,894)(928)
Accumulated other comprehensive loss(913)(741)
Total Warner Bros. Discovery, Inc. stockholders’ equity44,151 45,226 
Noncontrolling interests964 1,081 
Total equity45,115 46,307 
Total liabilities and equity$119,819 $122,757 
The accompanying notes are an integral part of these consolidated financial statements.
6

WARNER BROS. DISCOVERY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited; in millions)
 Three Months Ended March 31,
 20242023
Operating Activities
Net loss$(955)$(1,060)
Adjustments to reconcile net income to cash provided by (used in) operating activities:
Content rights amortization and impairment3,827 4,723 
Depreciation and amortization1,888 2,058 
Deferred income taxes (399)(669)
Share-based compensation expense101 111 
Equity in losses of equity method investee companies and cash distributions58 62 
Gain from derivative instruments, net(43)(23)
Other, net7 97 
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net(304)(486)
Film and television content rights, games, and production payables, net(2,778)(4,051)
Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities(753)(1,652)
Foreign currency, prepaid expenses and other assets, net(64)259 
Cash provided by (used in) operating activities585 (631)
Investing Activities
Purchases of property and equipment(195)(299)
Investments in and advances to equity investments(53)(13)
Other investing activities, net41 55 
Cash used in investing activities(207)(257)
Financing Activities
Principal repayments of term loans— (1,500)
Principal repayments of debt, including premiums and discounts to par value(1,047)(106)
Borrowings from debt, net of discount and issuance costs— 1,500 
Distributions to noncontrolling interests and redeemable noncontrolling interests(130)(237)
Borrowings under commercial paper program and revolving credit facility2,200 932 
Repayments under commercial paper program and revolving credit facility(2,200)(933)
Other financing activities, net(60)(88)
Cash used in financing activities(1,237)(432)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash(74)29 
Net change in cash, cash equivalents, and restricted cash(933)(1,291)
Cash, cash equivalents, and restricted cash, beginning of period4,319 3,930 
Cash, cash equivalents, and restricted cash, end of period$3,386 $2,639 
The accompanying notes are an integral part of these consolidated financial statements.
7
WARNER BROS. DISCOVERY, INC.
CONSOLIDATED STATEMENT OF EQUITY
(unaudited; in millions)
Warner Bros. Discovery, Inc. Common StockAdditional
Paid-In
Capital		Treasury
Stock		Accumulated DeficitAccumulated
Other
Comprehensive
Loss		Warner Bros. Discovery,
Inc. 
Stockholders’
Equity		Noncontrolling
Interests		Total
Equity
SharesPar Value
December 31, 20232,669 $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 plans10 — 30 — — — 30 — 30 
Redeemable noncontrolling interest adjustments to redemption value— — (22)— — — (22)— (22)
March 31, 20242,679 $27 $55,175 $(8,244)$(1,894)$(913)$44,151 $964 $45,115 
The accompanying notes are an integral part of these consolidated financial statements.
8
WARNER BROS. DISCOVERY, INC.
CONSOLIDATED STATEMENT OF EQUITY
(unaudited; in millions)
Warner Bros. Discovery, Inc. Common StockAdditional
Paid-In
Capital		Treasury
Stock		Retained
Earnings		Accumulated
Other
Comprehensive
Loss		Warner Bros. Discovery, Inc.
Stockholders’ Equity		Noncontrolling
Interests		Total
Equity
SharesPar Value
December 31, 20222,660 $27 $54,630 $(8,244)$2,205 $(1,523)$47,095 $1,254 $48,349 
Net (loss) income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests— — — — (1,069)— (1,069)8 (1,061)
Other comprehensive income— — — — — 418 418 — 418 
Share-based compensation— — 101 — — — 101 — 101 
Tax settlements associated with share-based plans
— — (53)— — — (53)— (53)
Dividends paid to noncontrolling interests
— — — — — — — (225)(225)
Issuance of stock in connection with share-based plans
6 — 9 — — — 9 — 9 
Redeemable noncontrolling interest adjustments to redemption value
— — — — (3)— (3)— (3)
Other adjustments to stockholders' equity— — (2)— — — (2)— (2)
March 31, 20232,666 $27 $54,685 $(8,244)$1,133 $(1,105)$46,496 $1,037 $47,533 
The accompanying notes are an integral part of these consolidated financial statements.
9

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 complete portfolio of branded content across television, film, streaming and gaming. Warner Bros. Discovery inspires, informs and entertains audiences worldwide through its iconic brands and products including: Discovery Channel, Max, discovery+, CNN, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Magnolia Network, TNT, TBS, truTV, Travel Channel, MotorTrend, Animal Planet, Science Channel, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Pictures Animation, Warner Bros. Games, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies, Discovery en Español, Hogar de HGTV and others.
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, 2023 (the “2023 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.
Accounting and Reporting Pronouncements Not Yet Adopted
Segment Reporting
In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance updating the disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact this guidance will have on its disclosures.
Income Taxes
In December 2023, the 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 fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is permitted. The Company is currently evaluating the impact this guidance will have on its disclosures.
NOTE 2. GOODWILL AND INTANGIBLE ASSETS
During the three months ended March 31, 2024, the Company performed goodwill and intangible assets impairment monitoring procedures for all of its reporting units and identified no indicators of impairment or triggering events. As of October 1, 2023, the Studios reporting unit, which had headroom of 15%, and the Networks reporting unit, which had headroom of 5%, both had fair value in excess of carrying value of less than 20%. The Company will continue to monitor its reporting units for triggers that could impact recoverability of goodwill. These triggers include, but are not limited to, continued decline in the Company’s market capitalization; affiliate and sports rights renewals, including the NBA, associated with the Company’s Networks and DTC reporting units; declining levels of global GDP growth and soft advertising markets in the U.S. associated with the Company’s Networks reporting unit; content licensing trends in our Studios reporting unit; and execution risk associated with anticipated growth in the Company’s DTC reporting unit.
10

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

NOTE 3. RESTRUCTURING AND OTHER CHARGES
In connection with the completion of its merger (the “Merger”) with the WarnerMedia business (the “WarnerMedia Business”) of AT&T Inc. on April 8, 2022, the Company has announced and has taken actions to implement projects to achieve cost synergies for the Company, which includes, among other things, strategic content programming assessments, organization restructuring, facility consolidation activities, and other contract termination costs. While the Company’s restructuring efforts are ongoing, the restructuring program is expected to be substantially completed by the end of 2024.
Restructuring and other charges by reportable segments and corporate and inter-segment eliminations were as follows (in millions).
 Three Months Ended March 31,
 20242023
Studios$11 $76 
Networks11 3 
DTC2 9 
Corporate and inter-segment eliminations11 7 
Total restructuring and other charges$35 $95 
During the three months ended March 31, 2024, restructuring and other charges were primarily related to organization restructuring costs. During the three months ended March 31, 2023, restructuring and other charges primarily included contract terminations and facility consolidation activities of $56 million, organization restructuring costs of $35 million, and other charges of $4 million.
Changes in restructuring liabilities recorded in accrued liabilities and other noncurrent liabilities by major category and by reportable segment and corporate and inter-segment eliminations were as follows (in millions).
StudiosNetworksDTCCorporate and Inter-Segment EliminationsTotal
December 31, 2023$98 $202 $80 $80 $460 
Employee termination accruals, net10 11 6 10 37 
Other accruals— — (3)— (3)
Cash paid(47)(51)(27)(50)(175)
March 31, 2024$61 $162 $56 $40 $319 
NOTE 4. REVENUES
The following table presents the Company’s revenues disaggregated by revenue source (in millions).
Three Months Ended March 31, 2024
StudiosNetworksDTCCorporate and Inter-segment EliminationsTotal
Revenues:
Distribution$5 $2,797 $2,185 $(2)$4,985 
Advertising4 1,987 175 (18)2,148 
Content2,623 264 99 (428)2,558 
Other189 77 1 — 267 
Total$2,821 $5,125 $2,460 $(448)$9,958 
11

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

Three Months Ended March 31, 2023
StudiosNetworksDTCCorporate and Inter-segment EliminationsTotal
Revenues:
Distribution$3 $2,995 $2,165 $— $5,163 
Advertising3 2,237 103 (45)2,298 
Content3,027 245 185 (503)2,954 
Other179 104 2 — 285 
Total$3,212 $5,581 $2,455 $(548)$10,700 
Contract Liabilities and Contract Assets
The following table presents contract liabilities on the consolidated balance sheets (in millions).
CategoryBalance Sheet LocationMarch 31, 2024December 31, 2023
Contract liabilitiesDeferred revenues$1,993 $1,924 
Contract liabilitiesOther noncurrent liabilities219 160 
For the three months ended March 31, 2024 and 2023, respectively, revenues of $772 million and $856 million were recognized that were included in deferred revenues as of December 31, 2023 and December 31, 2022, respectively. Contract assets were not material as of March 31, 2024 and December 31, 2023.
Remaining Performance Obligations
As of March 31, 2024, $11,180 million of revenue is expected to be recognized from remaining performance obligations under our long-term contracts. The following table presents a summary of remaining performance obligations by contract type (in millions).
Contract TypeMarch 31, 2024Duration
Distribution - fixed price or minimum guarantee$3,260 
Through 2031
Content licensing and sports sublicensing4,918 
Through 2030
Brand licensing2,215 
Through 2043
Advertising787 
Through 2027
Total$11,180 
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, 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 second half of 2023, the Company amended its revolving receivables program to reduce the facility limit to $5,500 million and extend the program to August 2024. The outstanding portfolio of receivables derecognized from our consolidated balance sheets was $5,170 million as of March 31, 2024.
For the three months ended March 31, 2024 and 2023, the Company recognized $51 million and $33 million, respectively, in selling, general and administrative expenses, from the revolving receivables program in the consolidated statements of operations (net of non-designated derivatives in 2024). (See Note 9.)
12

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

The following table presents a summary of receivables sold (in millions).
Three Months Ended March 31,
20242023
Gross receivables sold/cash proceeds received$3,956 $2,779 
Collections reinvested under revolving agreement(3,987)(2,845)
Net cash proceeds remitted (a)
$(31)$(66)
Net receivables sold$3,914 $2,698 
Obligations recorded (Level 3)$153 $148 
(a) Includes the collection on receivables sold but not remitted of $30 million as of March 31, 2024.
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).
March 31, 2024December 31, 2023
Gross receivables pledged as collateral$2,900 $3,088 
Restricted cash pledged as collateral$406 $500 
Balance sheet classification:
Receivables, net$2,660 $2,780 
Prepaid expenses and other current assets$406 $500 
Other noncurrent assets$240 $308 
Accounts Receivable Factoring
No amounts were sold under the Company’s factoring arrangement for the three months ended March 31, 2024. Total trade accounts receivable sold under the Company’s factoring arrangement was $72 million for the three months ended March 31, 2023. The impact to the consolidated statements of operations was immaterial for the three months ended March 31, 2024 and 2023. This accounts receivable factoring agreement is separate and distinct from the revolving receivables program.
13

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

NOTE 6. CONTENT RIGHTS
For purposes of amortization and impairment, capitalized content costs are grouped based on their predominant monetization strategy: individually or as a group. Programming rights are presented as two separate captions: licensed content and advances and live programming and advances. Live programming includes licensed sports rights and related advances. The tables below present the components of content rights (in millions).
March 31, 2024
Predominantly Monetized Individually
Predominantly Monetized as a Group
Total
Theatrical film production costs:
Released, less amortization$2,605 $— $2,605 
Completed and not released554 — 554 
In production and other976 — 976 
Television production costs:
Released, less amortization1,380 4,833 6,213 
Completed and not released615 621 1,236 
In production and other348 2,472 2,820 
Total theatrical film and television production costs$6,478 $7,926 $14,404 
Licensed content and advances, net4,631 
Live programming and advances, net2,050 
Game development costs, less amortization497 
Total film and television content rights and games21,582 
Less: Current content rights and prepaid license fees, net(1,143)
Total noncurrent film and television content rights and games$20,439 
December 31, 2023
Predominantly Monetized Individually
Predominantly Monetized as a Group
Total
Theatrical film production costs:
Released, less amortization$2,823 $— $2,823 
Completed and not released107 — 107 
In production and other1,300 — 1,300 
Television production costs:
Released, less amortization1,471 5,317 6,788 
Completed and not released380 606 986 
In production and other417 2,624 3,041 
Total theatrical film and television production costs$6,498 $8,547 $15,045 
Licensed content and advances, net4,519 
Live programming and advances, net1,943 
Game development costs, less amortization565 
Total film and television content rights and games22,072 
Less: Current content rights and prepaid license fees, net(843)
Total noncurrent film and television content rights and games$21,229 
14

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

Content amortization consisted of the following (in millions).
Three Months Ended March 31,
20242023
Predominantly monetized individually$922 $1,531 
Predominantly monetized as a group2,779 3,096 
Total content amortization$3,701 $4,627 
Content expense includes amortization, impairments, and development expense and is generally a component of costs of revenues on the consolidated statements of operations. Content and game impairments were $126 million and $96 million, respectively, for the three months ended March 31, 2024 and 2023.
NOTE 7. INVESTMENTS
The Company’s equity investments consisted of the following, net of investments recorded in other noncurrent liabilities (in millions).
CategoryBalance Sheet LocationOwnershipMarch 31, 2024December 31, 2023
Equity method investments:
The Chernin Group (TCG) 2.0-A, LPOther noncurrent assets44%$226 $249 
nC+Other noncurrent assets32%141 142 
TNT SportsOther noncurrent assets50%101 102 
OtherOther noncurrent assets499 503 
Total equity method investments967 996 
Investments with readily determinable fair valuesOther noncurrent assets49 53 
Investments without readily determinable fair values
Other noncurrent assets(a)
428 438 
Total investments$1,444 $1,487 
(a) Investments without readily determinable fair values included $17 million as of March 31, 2024 and December 31, 2023, respectively that were included 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 March 31, 2024, 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 $689 million. The Company’s maximum estimated exposure excludes the non-contractual future funding of VIEs. The aggregate carrying values of these VIE investments were $669 million as of March 31, 2024 and $697 million as of December 31, 2023. VIE gains and losses are recorded in loss from equity investees, net on the consolidated statements of operations, and were not material for the three months ended March 31, 2024 and 2023.
15

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
March 31, 2024		March 31, 2024December 31, 2023
Floating rate senior notes with maturities of 5 years or less
— %$— $40 
Senior notes with maturities of 5 years or less
4.02 %14,225 13,664 
Senior notes with maturities between 5 and 10 years
4.33 %7,107 8,607 
Senior notes with maturities greater than 10 years
5.11 %21,513 21,644 
Total debt42,845 43,955 
Unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting, net(267)(286)
Debt, net of unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting42,578 43,669 
Current portion of debt(3,430)(1,780)
Noncurrent portion of debt$39,148 $41,889 
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.
During the three months ended March 31, 2023, the Company issued $1.5 billion of 6.412% fixed rate senior notes due March 2026. After March 2024, the senior notes are redeemable at par plus accrued and unpaid interest. The proceeds were used to pay $1.5 billion of aggregate principal amount outstanding of the Company’s term loan prior to the due date of April 2025. The Company also repaid $106 million of aggregate principal amount outstanding of its senior notes due February 2023.
As of March 31, 2024, all senior notes are fully and unconditionally guaranteed by the Company, Scripps Networks Interactive, Inc. (“Scripps Networks”), Discovery Communications, LLC (“DCL”) (to the extent it is not the primary obligor on such senior notes), and WarnerMedia Holdings, Inc. (“WMH”) (to the extent it is not the primary obligor on such senior notes), except for $1.1 billion of senior notes of the legacy WarnerMedia Business assumed by the Company in connection with the Merger and $23 million of un-exchanged senior notes issued by Scripps Networks.
Revolving Credit Facility and Commercial Paper Programs
The Company has a multicurrency revolving credit agreement (the “Revolving Credit Agreement”) and has the capacity to borrow up to $6.0 billion under the Revolving Credit Agreement (the “Credit Facility”). The Company may also request additional commitments up to $1.0 billion from the lenders upon the satisfaction of certain conditions. The Company’s commercial paper program is supported by the Credit Facility. Borrowing capacity under the Credit Facility is effectively reduced by any outstanding borrowings under the commercial paper program. As of March 31, 2024 and December 31, 2023, the Company had no outstanding borrowings under its Credit Facility or its commercial paper program.
Credit Agreement Financial Covenants
The Revolving Credit Agreement includes financial covenants that require the Company to maintain a minimum consolidated interest coverage ratio of 3.00 to 1.00 and a maximum adjusted consolidated leverage ratio of 5.75 to 1.00 following the closing of the Merger, with step-downs to 5.00 to 1.00 and 4.50 to 1.00 upon completion of the first full quarter following the first and second anniversaries of the closing, respectively. As of March 31, 2024, the Company was in compliance with all covenants and there were no events of default under the Revolving 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.
16

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

There were no amounts eligible to be offset under master netting agreements as of March 31, 2024 and December 31, 2023. The fair value of the Company’s derivative financial instruments was determined using a market-based approach (Level 2). The following table summarizes the impact of derivative financial instruments on the Company’s consolidated balance sheets (in millions).
March 31, 2024December 31, 2023
Fair ValueFair Value
NotionalPrepaid expenses and other current assetsOther non-
current assets		Accounts payable and accrued liabilitiesOther non-
current liabilities		NotionalPrepaid expenses and other current assetsOther non-
current assets		Accounts payable and accrued liabilitiesOther non-
current liabilities
Cash flow hedges:
Foreign exchange$1,249 $24 $7 $34 $4 $1,484 $40 $8 $37 $8 
Net investment hedges: (a)
Cross-currency swaps1,361 22 13 7 24 1,779 23 12 7 42 
Fair value hedges:
Interest rate swaps1,500 9 — — 7 1,500 7 — — 5 
No hedging designation:
Foreign exchange1,089 25 4 4 96 1,058 1 1 1 83 
Interest rate swaps3,250 23 — — — — — — — — 
Total return swaps420 10 — — — 395 19 — — — 
Total$113 $24 $45 $131 $90 $21 $45 $138 
(a) Excludes £400 million and £402 million of sterling notes ($506 million and $513 million equivalent at March 31, 2024 and December 31, 2023, 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 and fixed-to-fixed cross-currency swaps to mitigate foreign currency risk associated with its British Pound Sterling denominated debt. 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 as the hedged risk.
In April 2023, the Company unwound cross-currency swaps related to its Sterling debt and recognized a gain of $76 million as an adjustment to other comprehensive income. The Sterling debt was subsequently re-designated as a net investment hedge effective May 2023.
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 March 31,
 20242023
Gains (losses) recognized in accumulated other comprehensive loss:
Foreign exchange - derivative adjustments
$16 $1 
Gains (losses) reclassified into income from accumulated other comprehensive loss:
Foreign exchange - distribution revenue
2 (1)
Foreign exchange - costs of revenues
11 2 
Interest rate - interest expense, net(1)1 
If current fair values of designated cash flow hedges as of March 31, 2024 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 31 years.
17

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

Net Investment Hedges
The Company uses fixed-to-fixed cross currency swaps to mitigate foreign currency risk associated with the net assets of non-USD functional entities.
The following table presents the pre-tax impact of derivatives designated as net investment hedges on other comprehensive loss (in millions). Other than amounts excluded from effectiveness testing, there were no other material gains (losses) reclassified from accumulated other comprehensive loss to income during the three months ended March 31, 2024 and 2023.
Three Months Ended March 31,
Amount of gain (loss) recognized in AOCILocation of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
2024202320242023
Cross currency swaps$25 $22 Interest expense, net$6 $5 
Euro-denominated notes (foreign denominated debt)— 5 N/A— — 
Sterling notes (foreign denominated debt)4 — N/A— — 
Total$29 $27 $6 $5 
Fair Value Hedges
During the three months ended March 31, 2023, the Company issued $1.5 billion of 6.412% fixed rate senior notes due March 2026. Simultaneously, the Company entered into a fixed-to-floating interest rate swap designated as a fair value hedge to allow the Company to mitigate the variability in the fair value of its senior notes due to fluctuations in the benchmark interest rate. Changes in the fair value of the senior note and the interest rate swap are recorded in interest expense, net.
The following table presents fair value hedge adjustments to hedged borrowings (in millions).
Carrying Amount of
Hedged Borrowings		Cumulative Amount of Fair Value Hedging Adjustments Included in Hedged Borrowings
Balance Sheet LocationMarch 31, 2024December 31, 2023March 31, 2024December 31, 2023
Noncurrent portion of debt$1,502 $1,502 $2 $2 
The following table presents the pretax impact of derivatives designated as fair value hedges on income, including offsetting changes in fair value of the hedged items (in millions).
Three Months Ended March 31,
20242023
Gain (loss) on changes in fair value of hedged fixed rate debt (1)
$— $(12)
(Loss) gain on changes in the fair value of derivative contracts (1)
— 12 
Total in interest expense, net$— $— 
(1) Accrued interest expense related to the hedged debt and derivative contracts is excluded from the amounts above and was not material as of March 31, 2024.
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 entered into 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 exposed to risk of secured overnight financing rate changes in connection with securitization interest paid on the receivables securitization program. To mitigate this risk, the Company entered into $3.0 billion notional of non-designated interest rate swaps. The gains and losses on these derivatives are recorded to selling, general and administrative expenses, offsetting securitization interest expense.
18

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

The following table presents the pretax gains (losses) on derivatives not designated as hedges and recognized in selling, general and administrative expense and other income (expense), net in the consolidated statements of operations (in millions).
Three Months Ended March 31,
20242023
Interest rate swaps$21 $— 
Total return swaps19 18 
Total in selling, general and administrative expense40 18 
Interest rate swaps2 — 
Foreign exchange derivatives (8)3 
Total in other income (expense), net
(6)3 
Total$34 $21 
NOTE 10. FAIR VALUE MEASUREMENTS
Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants. Assets and liabilities carried at fair value are classified in the following three categories:
Level 1–Quoted prices for identical instruments in active markets.
Level 2–Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
Level 3–Valuations derived from techniques in which one or more significant inputs are unobservable.
The tables below present assets and liabilities measured at fair value on a recurring basis (in millions).
  March 31, 2024
CategoryBalance Sheet LocationLevel 1Level 2Level 3Total
Assets
Cash equivalents:
Time depositsCash and cash equivalents$— $102 $— $102 
Equity securities:
Money market fundCash and cash equivalents1 — — 1 
Mutual fundsPrepaid expenses and other current assets44 — — 44 
Company-owned life insurance contractsPrepaid expenses and other current assets— 1 — 1 
Mutual fundsOther noncurrent assets234 — — 234 
Company-owned life insurance contractsOther noncurrent assets— 100 — 100 
Total$279 $203 $—