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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, 2023
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 21, 2023:
Series A Common Stock, par value $0.01 per share2,436,107,460 



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,
 20232022
Revenues:
Distribution$5,163 $1,352 
Advertising2,298 1,476 
Content2,954 323 
Other285 8 
Total revenues10,700 3,159 
Costs and expenses:
Costs of revenues, excluding depreciation and amortization6,685 1,236 
Selling, general and administrative2,388 1,040 
Depreciation and amortization2,058 525 
Restructuring95 5 
Impairments and loss on dispositions31 — 
Total costs and expenses11,257 2,806 
Operating (loss) income(557)353 
Interest expense, net(571)(153)
Loss from equity investees, net(37)(14)
Other (expense) income, net(73)490 
(Loss) income before income taxes(1,238)676 
Income tax benefit (expense)178 (201)
Net (loss) income(1,060)475 
Net income attributable to noncontrolling interests(8)(16)
Net income attributable to redeemable noncontrolling interests(1)(3)
Net (loss) income available to Warner Bros. Discovery, Inc.$(1,069)$456 
Net (loss) income per share allocated to Warner Bros. Discovery, Inc. Series A common stockholders:
Basic
$(0.44)$0.69 
Diluted$(0.44)$0.69 
Weighted average shares outstanding:
Basic2,432 591 
Diluted2,432 665 
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,
20232022
Net (loss) income$(1,060)$475 
Other comprehensive (loss) income:
Currency translation
Change in net unrealized gains (losses)426 (97)
Less: reclassification adjustment for net (gains) losses included in net income — (2)
Net change, net of income tax benefit (expense) of $(5) and $(14)
426 (99)
Pension plan and SERP liability, net of income tax benefit (expense) of $(3) and $—
(9)— 
Derivatives
Change in net unrealized gains (losses)3 (12)
Less: reclassification adjustment for net (gains) losses included in net income (2)(6)
Net change, net of income tax benefit (expense) of $2 and $1
1 (18)
Comprehensive (loss) income(642)358 
Comprehensive income attributable to noncontrolling interests
(8)(16)
Comprehensive income attributable to redeemable noncontrolling interests
(1)(3)
Comprehensive (loss) income attributable to Warner Bros. Discovery, Inc.$(651)$339 
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, 2023December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents$2,594 $3,731 
Receivables, net6,833 6,380 
Prepaid expenses and other current assets4,300 3,888 
Total current assets13,727 13,999 
Film and television content rights and games25,473 26,652 
Property and equipment, net5,325 5,301 
Goodwill34,658 34,438 
Intangible assets, net43,239 44,982 
Other noncurrent assets8,162 8,629 
Total assets$130,584 $134,001 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$1,123 $1,454 
Accrued liabilities10,158 11,504 
Deferred revenues1,603 1,694 
Current portion of debt3,496 365 
Total current liabilities16,380 15,017 
Noncurrent portion of debt45,434 48,634 
Deferred income taxes10,211 11,014 
Other noncurrent liabilities10,717 10,669 
Total liabilities82,742 85,334 
Commitments and contingencies (See Note 16)
Redeemable noncontrolling interests309 318 
Warner Bros. Discovery, Inc. stockholders’ equity:
Series A common stock: $0.01 par value; 10,800 and 10,800 shares authorized; 2,666 and 2,660 shares issued; and 2,436 and 2,430 shares outstanding
27 27 
Preferred stock: $0 par value; 1,200 and 1,200 shares authorized, 0 shares issued and outstanding
— — 
Additional paid-in capital54,685 54,630 
Treasury stock, at cost: 230 and 230 shares
(8,244)(8,244)
Retained earnings1,133 2,205 
Accumulated other comprehensive loss(1,105)(1,523)
Total Warner Bros. Discovery, Inc. stockholders’ equity46,496 47,095 
Noncontrolling interests1,037 1,254 
Total equity47,533 48,349 
Total liabilities and equity$130,584 $134,001 
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,
 20232022
Operating Activities
Net (loss) income$(1,060)$475 
Adjustments to reconcile net income to cash (used in) provided by operating activities:
Content rights amortization and impairment4,723 973 
Depreciation and amortization2,058 525 
Deferred income taxes (669)(118)
Share-based compensation expense111 60 
Equity in losses of equity method investee companies and cash distributions62 21 
Gain from derivative instruments, net(23)(514)
Other, net97 33 
Changes in operating assets and liabilities, net of acquisitions and dispositions:
Receivables, net(486)(5)
Film and television content rights, games and payables, net(4,051)(993)
Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities(1,652)(124)
Foreign currency, prepaid expenses and other assets, net259 (10)
Cash (used in) provided by operating activities(631)323 
Investing Activities
Purchases of property and equipment(299)(85)
Investments in and advances to equity investments(13)(42)
Proceeds from derivative instruments, net20 639 
Other investing activities, net35 17 
Cash (used in) provided by investing activities(257)529 
Financing Activities
Principal repayments of debt, including premiums to par value(1,606)(327)
Borrowings from debt, net of discount and issuance costs1,500 — 
Distributions to noncontrolling interests and redeemable noncontrolling interests(237)(224)
Borrowings under commercial paper program932 — 
Repayments under commercial paper program(933)— 
Other financing activities, net(88)(36)
Cash used in financing activities(432)(587)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash29 (5)
Net change in cash, cash equivalents, and restricted cash(1,291)260 
Cash, cash equivalents, and restricted cash, beginning of period3,930 3,905 
Cash, cash equivalents, and restricted cash, end of period$2,639 $4,165 
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		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 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 plans6 — 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.
8
WARNER BROS. DISCOVERY, INC.
CONSOLIDATED STATEMENT OF EQUITY
(unaudited; in millions)
Discovery, Inc.
Preferred Stock		Discovery, Inc.
Common Stock		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 ValueSharesPar ValueSharesPar Value
December 31, 202112 $— 736 $7 — $— $11,086 $(8,244)$9,580 $(830)$11,599 $1,434 $13,033 
Net income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests— — — — — — — — 456 — 456 16 472 
Other comprehensive loss— — — — — — — — — (117)(117)— (117)
Share-based compensation— — — — — — 53 — — — 53 — 53 
Tax settlements associated with share-based plans
— — — — — — (38)— — — (38)— (38)
Dividends paid to noncontrolling interests
— — — — — — — — — — — (192)(192)
Issuance of stock in connection with share-based plans
— — 3 — — — 19 — — — 19 — 19 
Redeemable noncontrolling interest adjustments to redemption value
— — — — — — — — (3)— (3)— (3)
March 31, 202212 $— 739 $7 — $— $11,120 $(8,244)$10,033 $(947)$11,969 $1,258 $13,227 
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 premier global media and entertainment company that combines the WarnerMedia Business’s premium entertainment, sports and news assets with Discovery’s leading non-fiction and international entertainment and sports businesses, thus offering audiences a differentiated portfolio of content, brands and franchises across television, film, streaming and gaming. Some of our iconic brands and franchises include Warner Bros. Pictures Group, Warner Bros. Television Group, DC, HBO, HBO Max, Discovery Channel, discovery+, CNN, HGTV, Food Network, TNT, TBS, TLC, OWN, Warner Bros. Games, Batman, Superman, Wonder Woman, Harry Potter, Looney Tunes, Hanna-Barbera, Game of Thrones, and The Lord of the Rings.
Merger with the WarnerMedia Business of AT&T
On April 8, 2022 (the “Closing Date”), Discovery, Inc. (“Discovery”) completed its merger (the “Merger”) with the WarnerMedia business (the “WarnerMedia Business”, “WM Business” or “WM”) of AT&T Inc. (“AT&T”) and changed its name to “Warner Bros. Discovery, Inc.”. On April 11, 2022, the Company’s shares started trading on the Nasdaq Global Select Market (the “Nasdaq”) under the trading symbol WBD.
The Merger was executed through a Reverse Morris Trust type transaction, under which WM was distributed to AT&T’s shareholders via a pro rata distribution, and immediately thereafter, combined with Discovery. (See Note 2 and Note 3). Prior to the Merger, WarnerMedia Holdings, Inc. distributed $40.5 billion to AT&T (subject to working capital and other adjustments) in a combination of cash, debt securities, and WM's retention of certain debt. Discovery transferred purchase consideration of $42.4 billion in equity to AT&T shareholders in the Merger. In August 2022, the Company and AT&T finalized the post-closing working capital settlement process, pursuant to section 1.3 of the Separation and Distribution Agreement, which resulted in the Company receiving a $1.2 billion payment from AT&T in the third quarter of 2022 in lieu of adjusting the equity issued as purchase consideration in the Merger. AT&T shareholders received shares of WBD Series A common stock (“WBD common stock”) in the Merger representing 71% of the combined Company and the Company's pre-Merger shareholders continued to own 29% of the combined Company, in each case on a fully diluted basis.
Discovery was deemed to be the accounting acquirer of the WM Business for accounting purposes under U.S. generally accepted accounting principles (“U.S. GAAP”); therefore, Discovery is considered the Company’s predecessor and the historical financial statements of Discovery prior to April 8, 2022, are reflected in this Quarterly Report on Form 10-Q as the Company’s historical financial statements. Accordingly, the financial results of the Company as of and for any periods prior to April 8, 2022 do not include the financial results of the WM Business and current and future results will not be comparable to historical results.
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, 2022 (the “2022 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.
Summary of Significant Accounting Policies
There have been no changes to the Company's significant accounting policies described in the 2022 Form 10-K.
10

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

Accounting and Reporting Pronouncements Adopted
Supplier Finance Programs
In September 2022, the Financial Accounting Standards Board issued guidance updating the disclosure requirements for supplier finance program obligations. This guidance provides specific authoritative guidance for disclosure of supplier finance programs, including key terms of such programs, amounts outstanding, and where the obligations are presented in the statement of financial position. The guidance is effective for annual periods beginning after December 15, 2022, including interim periods, except for the disclosure of roll forward information, which is effective for annual periods beginning after December 15, 2023. Certain components of this guidance must be applied retrospectively, while others may be applied prospectively. The Company adopted the guidance effective January 1, 2023 and has provided the required disclosures in Note 14.
NOTE 2. EQUITY AND EARNINGS PER SHARE
Common Stock Issued in Connection with the WarnerMedia Merger
In connection with the Merger, each issued and outstanding share of Discovery Series A common stock, Discovery Series B convertible common stock, and Discovery Series C common stock, was reclassified and automatically converted into one share of WBD common stock, and each issued and outstanding share of Discovery Series A-1 convertible preferred stock (“Series A-1 Preferred Stock”) and Series C-1 convertible preferred stock was reclassified and automatically converted into 13.1135 and 19.3648 shares of WBD common stock, respectively.
The Merger required the consent of Advance/Newhouse Programming Partnership under Discovery's certificate of incorporation as the sole holder of the Series A-1 Preferred Stock. In connection with Advance/Newhouse Programming Partnership’s entry into the consent agreement and related forfeiture of the significant rights attached to the Series A-1 Preferred Stock in the reclassification of the shares of Series A-1 Preferred Stock into common stock, it received an increase to the number of shares of common stock of the Company into which the Series A-1 Preferred Stock converted. The impact of the issuance of such additional shares of common stock was $789 million and was recorded as a transaction expense in selling, general and administrative expense upon the closing of the Merger in the three months ended June 30, 2022.
On April 8, 2022, the Company issued 1.7 billion shares of WBD common stock as consideration paid for the acquisition of WM. (See Note 3).
Earnings Per Share
All share and per share amounts have been retrospectively adjusted to reflect the reclassification and automatic conversion into WBD common stock, except for Series A-1 Preferred Stock, which has not been recast because the conversion of Series A-1 Preferred Stock into WBD common stock in connection with the Merger was considered a discrete event and treated prospectively.
11

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

The table below sets forth the Company’s calculated earnings per share (in millions). Earnings per share amounts may not recalculate due to rounding.
Three Months Ended March 31,
20232022
Numerator:
Net (loss) income$(1,060)$475 
Less:
Allocation of undistributed income to Series A-1 convertible preferred stock— (49)
Net income attributable to noncontrolling interests(8)(16)
Net income attributable to redeemable noncontrolling interests(1)(3)
Net (loss) income allocated to Warner Bros. Discovery, Inc. Series A common stockholders for basic and diluted net (loss) income per share$(1,069)$407 
Add:
Allocation of undistributed income to Series A-1 convertible preferred stockholders$— $49 
Net (loss) income allocated to Warner Bros. Discovery, Inc. Series A common stockholders for diluted net (loss) income per share$(1,069)$456 
Denominator — weighted average:
Common shares outstanding — basic2,432 591 
Impact of assumed preferred stock conversion— 71 
Dilutive effect of share-based awards— 3 
Common shares outstanding — diluted2,432 665 

Basic net (loss) income per share allocated to common stockholders$(0.44)$0.69 
Diluted net (loss) income per share allocated to common stockholders$(0.44)$0.69 
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 March 31,
20232022
Anti-dilutive share-based awards
62 33 
NOTE 3. ACQUISITIONS AND DISPOSITIONS
Acquisitions
WarnerMedia
On April 8, 2022, the Company completed its Merger with the WarnerMedia Business of AT&T. The Merger was executed through a Reverse Morris Trust type transaction, under which WM was distributed to AT&T’s shareholders via a pro-rata distribution, and immediately thereafter, combined with Discovery. Discovery was deemed to be the accounting acquirer of WM.
The Merger combined WM’s content library of popular and valuable intellectual property with Discovery’s global footprint, collection of local-language content and deep regional expertise across more than 220 countries and territories. The Company expects this broad, worldwide portfolio of brands, coupled with its DTC potential and the attractiveness of the combined assets, to result in increased market penetration globally. The Merger is also expected to create significant cost synergies for the Company.
12

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

Purchase Price
The following table summarizes the components of the aggregate purchase consideration paid to acquire WM (in millions).
Fair value of WBD common stock issued to AT&T shareholders (1)
$42,309 
Estimated fair value of share-based compensation awards attributable to pre-combination services (2)
94 
Settlement of preexisting relationships (3)
(27)
Purchase consideration $42,376 
(1) The fair value of WBD common stock issued to AT&T shareholders represents approximately 1,732 million shares of WBD common stock multiplied by the closing share price for Discovery Series A common stock of $24.43 on Nasdaq on the Closing Date. The number of shares of WBD common stock issued in the Merger was determined based on the number of fully diluted shares of Discovery, Inc. common stock immediately prior to the closing of the Merger, multiplied by the quotient of 71%/29%.
(2) This amount represents the value of AT&T restricted stock unit awards that were not vested and were replaced by WBD restricted stock unit awards with similar terms and conditions as the original AT&T awards. The conversion was based on the ratio of the volume-weighted average per share closing price of AT&T common stock on the ten trading days prior to the Closing Date and the volume-weighted average per share closing price of WBD common stock on the ten trading days following the Closing Date. The fair value of replacement equity-based awards attributable to pre-Merger service was recorded as part of the consideration transferred in the Merger.
(3) The amount represents the effective settlement of outstanding payables and receivables between the Company and WM. No gain or loss was recognized upon settlement as amounts were determined to be reflective of fair market value.
Balances reflect rounding of dollar and share amounts to millions, which may result in differences for recalculated standalone amounts compared with the amounts presented above. In August 2022, the Company and AT&T finalized the post-closing working capital settlement process, pursuant to section 1.3 of the Separation and Distribution Agreement, which resulted in the Company receiving a $1.2 billion payment from AT&T in the third quarter of 2022.
Preliminary Purchase Price Allocation
The Company applied the acquisition method of accounting to WM, whereby the excess of the fair value of the purchase price paid over the fair value of identifiable net assets acquired and liabilities assumed was allocated to goodwill. Goodwill reflects the assembled workforce of WM as well as revenue enhancements, cost savings and operating synergies that are expected to result from the Merger. The goodwill recorded as part of the Merger has been provisionally allocated to the Studios, Networks and DTC reportable segments in the amount of $9,129 million, $7,076 million and $5,683 million, respectively, and is not deductible for tax purposes.
13

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

The purchase price allocation is preliminary and subject to change. The Company has estimated the preliminary fair value of assets acquired and liabilities assumed based on information currently available and will continue to adjust those estimates as additional information pertaining to events or circumstances present at the Closing Date becomes available during the measurement period. The Company reflects measurement period adjustments in the period in which the adjustments occur, and the Company will finalize its accounting for the Merger within one year of the Closing Date. The current period adjustments were $148 million, primarily related to taxes, and were recorded in other noncurrent assets, deferred income taxes and other noncurrent liabilities, with an offset to goodwill. The preliminary allocation of the purchase price to the assets acquired and liabilities assumed, measurement period adjustments, and a reconciliation to total consideration transferred is presented in the table below (in millions).
Preliminary
April 8, 2022		Measurement Period
Adjustments		Updated Preliminary
April 8, 2022
Cash$2,419 $(10)$2,409 
Accounts receivable4,224 (60)4,164 
Other current assets4,619 (149)4,470 
Film and television content rights and games28,729 (344)28,385 
Property and equipment4,260 13 4,273 
Goodwill21,513 375 21,888 
Intangible assets44,889 100 44,989 
Other noncurrent assets5,206 309 5,515 
Current liabilities (10,544)7 (10,537)
Debt assumed(41,671)(9)(41,680)
Deferred income taxes(13,264)716 (12,548)
Other noncurrent liabilities(8,004)(948)(8,952)
Total consideration paid$42,376 $— $42,376 
The preliminary fair values of the assets acquired and liabilities assumed were determined using several valuation approaches including, but not limited to, various cost approaches and income approaches, such as relief from royalty, multi -period excess earnings, and with-or-without.
The table below presents a summary of intangible assets acquired, exclusive of content assets, and the weighted average useful life of these assets.
Fair ValueWeighted Average Useful Life in Years
Trade names$21,084 34
Affiliate, advertising and subscriber relationships14,800 6
Franchises7,900 35
Other intangible assets 1,205 
Total intangible assets acquired$44,989 
The Company incurred acquisition-related costs of $47 million and $87 million for the three months ended March 31, 2023 and 2022, respectively. These costs were associated with legal and professional services and integration activities and were recognized as operating expenses on the consolidated statement of operations.
14

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

As a result of the Merger, WM’s assets, liabilities, and operations were included in the Company’s consolidated financial statements from the Closing Date. The following table presents WM revenue and earnings as reported within the consolidated financial statements (in millions).
Three Months Ended March 31, 2023
Revenues:
Distribution$3,885 
Advertising1,154 
Content 3,338 
Other228 
Total revenues8,605 
Inter-segment eliminations(477)
Net revenues$8,128 
Net loss available to Warner Bros. Discovery, Inc.$(1,047)
Pro Forma Combined Financial Information
The following unaudited pro forma combined financial information presents the combined results of the Company and WM as if the Merger had been completed on January 1, 2021. The unaudited pro forma combined financial information is presented for informational purposes and is not indicative of the results of operations that would have been achieved if the Merger had occurred on January 1, 2021, nor is it indicative of future results. The following table presents the Company’s pro forma combined revenues and net income (in millions).
Three Months Ended March 31, 2022
Revenues$11,441 
Net loss available to Warner Bros. Discovery, Inc.(299)
The unaudited pro forma combined financial information includes, where applicable, adjustments for (i) additional costs of revenues from the fair value step-up of film and television library, (ii) additional amortization expense related to acquired intangible assets, (iii) additional depreciation expense from the fair value of property and equipment, (iv) transaction costs and other one-time non-recurring costs, (v) additional interest expense for borrowings related to the Merger and amortization associated with fair value adjustments of debt assumed, (vi) changes to align accounting policies, (vii) elimination of intercompany activity, and (viii) associated tax-related impacts of adjustments. These pro forma adjustments are based on available information as of the date hereof and upon assumptions that the Company believes are reasonable to reflect the impact of the Merger with WM on the Company’s historical financial information on a supplemental pro forma basis. Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business.
NOTE 4. RESTRUCTURING
In connection with the Merger, the Company has announced and has taken actions to implement projects to achieve cost synergies for the Company. The Company finalized the framework supporting its ongoing restructuring and transformation initiatives during the year ended December 31, 2022, which will include, 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 by reportable segments and corporate and inter-segment eliminations were as follows (in millions).
 Three Months Ended March 31,
 20232022
Studios$76 $— 
Networks3 4 
DTC9 — 
Corporate and inter-segment eliminations7 1 
Total restructuring$95 $5 
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WARNER BROS. DISCOVERY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

During the three months ended March 31, 2023, restructuring charges primarily included contract terminations and facility consolidation activities of $56 million, organization restructuring of $35 million, and other charges of $4 million. During the three months ended March 31, 2022, restructuring charges were not material.
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, 2022$156 $361 $188 $159 $864 
Contract termination accruals, net25 2 — — 27 
Employee termination accruals, net12 11 5 7 35 
Other accruals— 2 — — 2 
Cash paid(76)(207)(88)(61)(432)
March 31, 2023$117 $169 $105 $105 $496 
NOTE 5. REVENUES
The following table presents the Company’s revenues disaggregated by revenue source (in millions).
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)$10,700 
Three Months Ended March 31, 2022
StudiosNetworksDTCCorporate and Inter-segment EliminationsTotal
Revenues:
Distribution$— $1,120 $232 $— $1,352 
Advertising— 1,430 46 — 1,476 
Content5 316 2 — 323 
Other— 7 1 — 8 
Total$5 $2,873 $281 $— $3,159 
Contract Liabilities and Contract Assets
The following table presents contract liabilities on the consolidated balance sheets (in millions).
CategoryBalance Sheet LocationMarch 31, 2023December 31, 2022
Contract liabilitiesDeferred revenues$1,603 $1,694 
Contract liabilitiesOther noncurrent liabilities379 361 
For the three months ended March 31, 2023 and 2022, respectively, revenues of $856 million and $295 million were recognized that were included in deferred revenues as of December 31, 2022 and December 31, 2021, respectively. Contract assets were not material as of March 31, 2023 and December 31, 2022.
16

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

Remaining Performance Obligations
As of March 31, 2023, $11,888 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, 2023Duration
Distribution - fixed price or minimum guarantee$4,379 
Through 2031
Content licensing and sports sublicensing4,424 
Through 2026
Brand licensing2,322 
Through 2043
Advertising763 
Through 2027
Total$11,888 
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 6. SALES OF RECEIVABLES
Revolving Receivables Program
Our bankruptcy-remote consolidated subsidiary held $3,453 million of pledged receivables as of March 31, 2023 in connection with the Company’s revolving receivables program. For the three months ended March 31, 2023, the Company has recognized $33 million in selling, general and administrative expenses from the revolving receivables program in the consolidated statements of operations. The outstanding portfolio of receivables derecognized from our consolidated balance sheets was $5,300 million as of March 31, 2023.
The following table presents a summary of receivables sold (in millions).
Three Months Ended March 31, 2023
Gross receivables sold/cash proceeds received$2,779 
Collections reinvested under revolving agreement(2,845)
Net cash proceeds remitted $(66)
Net receivables sold$2,698 
Obligations recorded (Level 3)$148 
The following table presents a summary of the amounts transferred or pledged (in millions):
March 31, 2023December 31, 2022
Gross receivables pledged as collateral$3,453 $3,468 
Restricted cash pledged as collateral$— $150 
Balance sheet classification:
Receivables, net$3,275 $3,015 
Prepaid expenses and other current assets$— $150 
Other noncurrent assets$178 $453 
Accounts Receivable Factoring
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, 2023. This accounts receivable factoring agreement is separate and distinct from the revolving receivables program.
17

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

NOTE 7. 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 include content licensed from third parties, such as film, television and sports rights. The table below presents the components of content rights (in millions).
March 31, 2023
Predominantly Monetized Individually
Predominantly Monetized as a Group
Total
Theatrical film production costs:
Released, less amortization$2,032 $— $2,032 
Completed and not released637 — 637 
In production1,545 — 1,545 
In development96 — 96 
Television production costs:
Released, less amortization2,216 6,325 8,541 
Completed and not released608 540 1,148 
In production322 4,558 4,880 
In development47 15 62 
Total theatrical film and television production costs$7,503 $11,438 $18,941 
Programming rights, less amortization6,763 
Game development costs, less amortization513 
Total film and television content rights and games26,217 
Less: Current content rights and prepaid license fees, net(744)
Total noncurrent film and television content rights and games$25,473 
December 31, 2022
Predominantly Monetized Individually
Predominantly Monetized as a Group
Total
Theatrical film production costs:
Released, less amortization$3,544 $— $3,544 
Completed and not released507 — 507 
In production1,700 — 1,700 
In development95 — 95 
Television production costs:
Released, less amortization2,200 6,513 8,713 
Completed and not released939 310 1,249 
In production427 4,424 4,851 
In development30 15 45 
Total theatrical film and television production costs$9,442 $11,262 $20,704 
Programming rights, less amortization5,843 
Game development costs, less amortization650 
Total film and television content rights and games27,197 
Less: Current content rights and prepaid license fees, net(545)
Total noncurrent film and television content rights and games$26,652 
18

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

Content amortization consisted of the following (in millions).
Three Months Ended March 31,
20232022
Predominately monetized individually$1,531 $251 
Predominately monetized as a group3,096 718 
Total content amortization$4,627 $969 
Content expense includes amortization, impairments, and development expense and is generally a component of costs of revenues on the consolidated statements of operations. For the three months ended March 31, 2023, total content impairments were $96 million. For the three months ended March 31, 2022, content impairments were not material.
NOTE 8. INVESTMENTS
The Company’s equity investments consisted of the following, (in millions).
CategoryBalance Sheet LocationOwnershipMarch 31, 2023December 31, 2022
Equity method investments:
The Chernin Group (TCG) 2.0-A, LPOther noncurrent assets44%$291 $313 
nC+Other noncurrent assets32%143 135 
OtherOther noncurrent assets590 614 
Total equity method investments1,024 1,062 
Investments with readily determinable fair valuesOther noncurrent assets53 28 
Investments without readily determinable fair values
Other noncurrent assets (a)
449 498 
Total investments$1,526 $1,588 
(a) Investments without readily determinable fair values included $27 million as of March 31, 2023 and $10 million as of December 31, 2022 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, 2023, 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 $725 million. The Company’s maximum estimated exposure excludes the non-contractual future funding of VIEs. The aggregate carrying values of these VIE investments were $703 million as of March 31, 2023 and $720 million as of December 31, 2022. 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, 2023 and 2022.
Equity Investments Without Readily Determinable Fair Values Assessed Under the Measurement Alternative
During the three months ended March 31, 2023, the Company concluded that its other equity method investments without readily determinable fair values had decreased $68 million in fair value as a result of observable price changes in orderly transactions for the identical or similar investment of the same issuer. The decrease in fair value is recorded in other (expense) income, net on the consolidated statements of operations. (See Note 14). As of March 31, 2023, the Company had recorded cumulative impairments of $297 million for its equity method investments without readily determinable fair values.
19

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

NOTE 9. DEBT
The table below presents the components of outstanding debt (in millions).
Weighted-Average
Interest Rate as of
March 31, 2023		March 31, 2023December 31, 2022
Term loans with maturities of 3 years or less
6.01 %$2,500 $4,000 
Floating rate senior notes with maturities of 5 years or less
6.20 %500 500 
Senior notes with maturities of 5 years or less
3.92 %15,964 12,759 
Senior notes with maturities between 5 and 10 years
4.28 %8,607 10,373 
Senior notes with maturities greater than 10 years
5.11 %21,644 21,644 
Total debt49,215 49,276 
Unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting, net(285)(277)
Debt, net of unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting48,930 48,999 
Current portion of debt(3,496)(365)
Noncurrent portion of debt$45,434 $48,634 
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.
During the three months ended March 31, 2022, the Company repaid in full at maturity $327 million aggregate principal amount outstanding of its 2.375% Euro Denominated Senior Notes due March 2022.
As of March 31, 2023, 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. (to the extent it is not the primary obligor on such senior notes), except for $1.4 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. Additionally, the term loans of WarnerMedia Holdings, Inc., made under the $10.0 billion term loan credit agreement (the “Term Loan Credit Agreement”), are fully and unconditionally guaranteed by the Company, Scripps Networks, and DCL.
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, 2023 and December 31, 2022, the Company had no outstanding borrowings under its Credit Facility or its commercial paper program.
Credit Agreement Financial Covenants
The Revolving Credit Agreement and the Term Loan Credit Agreement (together, the “Credit Agreements”) include 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 on the first and second anniversaries of the closing, respectively. As of March 31, 2023, DCL was in compliance with all covenants and there were no events of default under the Credit Agreements.
20

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

NOTE 10. DERIVATIVE FINANCIAL INSTRUMENTS
In the normal course of business, the Company is exposed to foreign currency exchange rate 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, and interest rate swaps, to hedge certain foreign currency 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.
The following table summarizes the impact of derivative financial instruments on the Company’s consolidated balance sheets (in millions). There were no amounts eligible to be offset under master netting agreements as of March 31, 2023 and December 31, 2022. The fair value of the Company’s derivative financial instruments was determined using a market-based approach (Level 2).
March 31, 2023December 31, 2022
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$2,031 $55 $33 $47 $21 $1,382 $49 $35 $42 $25 
Cross-currency swaps495 4 67 — — 482 3 58 — — 
Net investment hedges: (a)
Cross-currency swaps1,728 20 11 18 49 1,778 20 12 — 73 
Fair value hedges:
Interest rate swaps1,500 13 — — 1 — — — — — 
No hedging designation:
Foreign exchange939 1 1 5 98 976 5 1 3 96 
Cross-currency swaps139 — — 1 — 139 3 — — 3 
Total return swaps373 7 — — — 291 — — 13 — 
Total$100 $112 $71 $169 $80 $106 $58 $197 
(a) Excludes €164 million of euro-denominated notes ($179 million and $174 million equivalent at March 31, 2023 and December 31, 2022, respectively) designated as net investment hedges. (See Note 9.)
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.
The Company uses fixed-to-fixed cross-currency swaps to mitigate foreign currency risk associated with its British Pound Sterling denominated debt.
21

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

The following table presents the pre-tax impact of derivatives designated as cash flow hedges on income and other comprehensive (loss) income (in millions).
 Three Months Ended March 31,
 20232022
Gains (losses) recognized in accumulated other comprehensive loss:
Foreign exchange - derivative adjustments
$1 $(13)
Gains (losses) reclassified into income from accumulated other comprehensive loss:
Foreign exchange - distribution revenue
(1)4 
Foreign exchange - advertising revenue
— 1 
Foreign exchange - costs of revenues
2 1 
Interest rate - interest expense, net1 — 
If current fair values of designated cash flow hedges as of March 31, 2023 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 32 years.
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 and foreign denominated debt.
The following table presents the pre-tax impact of derivatives designated as net investment hedges on other comprehensive (loss) income (in millions). Other than amounts excluded from effectiveness testing, there were no other gains (losses) reclassified from accumulated other comprehensive loss to income during the three months ended March 31, 2023 and 2022.
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)
2023202220232022
Cross currency swaps$22 $19 Interest expense, net$5 $15 
Euro-denominated notes (foreign denominated debt)5 — N/A— — 
Sterling notes (foreign denominated debt)— 13 N/A— — 
Total$27 $32 $5 $15 
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, 2023December 31, 2022March 31, 2023December 31, 2022
Noncurrent portion of debt$1,512 $— $12 $— 
22

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

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,
20232022
Loss on changes in fair value of hedged fixed rate debt (1)
$(12)$— 
Gains on changes in the fair value of derivative contracts (1)
12 — 
Total in interest expense, net$— $— 
(1) Accrued interest related to the hedged debt and derivative contracts is excluded from the amounts above and was not material as of March 31, 2023.
Derivatives Not Designated for Hedge Accounting
Prior to the Merger, the Company was exposed to interest rate risk associated with the expected issuance of debt related to the Merger. To mitigate this risk, the Company entered into interest rate swaps and subsequently unwound them prior to the Merger.
As part of the Merger, the Company acquired deferred compensation plans that have risk related to the fair value gains and losses on these investments and entered into total return swaps to mitigate this risk. The gains and losses associated with these swaps are recorded to selling, general and administrative expenses, offsetting the deferred compensation investment gains and losses.
As production spend occurs or when rebate receivables are recognized, the aforementioned forward contracts designated as cash flow hedges are unwound and de-designated. After de-designation, gains and losses on these derivatives directly impact earnings in the same line as the hedged risk.
The following table presents the pretax gains (losses) on derivatives not designated as hedges and recognized in other (expense) income, net in the consolidated statements of operations (in millions).
Three Months Ended March 31,
20232022
Interest rate swaps$— $512 
Foreign exchange derivatives 3 (15)
Total in other (expense) income, net
$3 $497 
Total return swaps (selling, general and administrative expense)18 — 
Total$21 $497 
NOTE 11. 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.
23

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).
  March 31, 2023
CategoryBalance Sheet LocationLevel 1Level 2Level 3Total
Assets
Cash equivalents:
Time depositsCash and cash equivalents$— $148 $— $148 
Equity securities:
Money market fundCash and cash equivalents3 — — 3 
Mutual fundsPrepaid expenses and other current assets9 — — 9 
Company-owned life insurance contractsPrepaid expenses and other current assets— 3 — 3 
Mutual fundsOther noncurrent assets240 — — 240 
Company-owned life insurance contractsOther noncurrent assets— 95 — 95 
Time depositsOther noncurrent assets— 10 — 10 
Total$252 $256 $— $508 
Liabilities
Deferred compensation planAccrued liabilities$70 $— $— $70 
Deferred compensation planOther noncurrent liabilities603 — — 603 
Total$673 $— $— $673 
December 31, 2022
CategoryBalance Sheet LocationLevel 1Level 2Level 3Total
Assets
Cash equivalents:
Time depositsCash and cash equivalents$— $50 $— $50 
Equity securities:
Money market fundsCash and cash equivalents20 — — 20 
Mutual fundsPrepaid expenses and other current assets14 — — 14 
Company-owned life insurance contractsPrepaid expenses and other current assets— 1 — 1 
Mutual fundsOther noncurrent assets243 — — 243 
Company-owned life insurance contractsOther noncurrent assets— 94 — 94 
Time deposits Other noncurrent assets— 8 — 8 
Total$277 $153 $— $430 
Liabilities
Deferred compensation planAccrued liabilities$73 $— $— $73 
Deferred compensation planOther noncurrent liabilities590 — — 590 
Total$663 $— $— $663 
In addition to the financial instruments listed in the tables above, the Company holds other financial instruments, including cash deposits, accounts receivable, accounts payable, term loans, and senior notes. The carrying values for such financial instruments, other than the senior notes, each approximated their fair values as of March 31, 2023 and December 31, 2022. 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 $41.6 billion and $38.0 billion as of March 31, 2023 and December 31, 2022, respectively.
The Company’s derivative financial instruments are discussed in Note 10, its investments with readily determinable fair value are discussed in Note 8, and the obligation for its revolving receivable program is discussed in Note 6.
24

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

NOTE 12. 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).
Three Months Ended March 31, 2023
AwardsWeighted-Average Grant Price
Awards granted:
PRSUs4.0 $15.41 
RSUs26.2 $15.00 
Stock options2.2 $15.02 
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 March 31, 2023 (in millions, except years).
Unrecognized Compensation CostWeighted-Average Amortization Period
(years)
PRSUs$62 2.1
RSUs790 2.4
Stock options160 3.2
Total unrecognized compensation cost$1,012 
NOTE 13. INCOME TAXES
Income tax benefit was $178 million for the three months ended March 31, 2023, and income tax expense was $201 million for the three months ended March 31, 2022. The decrease in the three months ended March 31, 2023 was primarily attributable to a decrease in pre-tax book income.
Income tax benefit for the three months ended March 31, 2023 reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to the effect of foreign operations, changes in uncertain tax positions, and state and local income taxes.
As of March 31, 2023 and December 31, 2022, the Company’s reserves for uncertain tax positions totaled $2,195 million and $1,929 million, respectively. The increase in the reserve for uncertain tax positions as of March 31, 2023 is primarily attributable to tax reserves that were recorded in 2023 through purchase accounting related to the Merger. It is reasonably possible that the total amount of unrecognized tax benefits related to certain of the Company’s uncertain tax positions could decrease by as much as $165 million within the next twelve months as a result of ongoing audits, lapses of statutes of limitations or regulatory developments.
As of March 31, 2023 and December 31, 2022, the Company had accrued approximately $492 million and $413 million, respectively, of total interest and penalties payable related to unrecognized tax benefits. The increase in the interest and penalties accrual as of March 31, 2023 includes interest and penalty accruals recorded in 2023 through purchase accounting related to the Merger. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense.
25

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

NOTE 14. 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 March 31,
20232022
Foreign currency (losses) gains, net$(93)$11 
Gains on derivative instruments, net3 497 
Change in the value of investments with readily determinable fair value29 (20)
Change in fair value of equity investments without readily determinable fair value(68)— 
Other income, net56 2 
Total other (expense) income, net
$(73)$490 
Supplemental Cash Flow Information
Three Months Ended March 31,
20232022
Cash paid for taxes, net$312 $97 
Cash paid for interest, net920 186 
Non-cash investing and financing activities:
Accrued purchases of property and equipment33 26 
Assets acquired under finance lease and other arrangements29 13 
Cash, Cash Equivalents, and Restricted Cash
 March 31, 2023December 31, 2022
Cash and cash equivalents$2,594 $3,731 
Restricted cash - recorded in prepaid expenses and other current assets (1)
45 199 
Total cash, cash equivalents, and restricted cash $2,639 $3,930 
(1) Restricted cash primarily includes cash posted as collateral related to the Company’s revolving receivables and hedging programs. (See Note 6 and Note 10).
Goodwill Impairment Analysis
During the three months ended March 31, 2023, the Company performed goodwill impairment monitoring procedures for all of its reporting units and identified no indicators of impairment or triggering events. Due to declining levels of global GDP growth, a weakening advertising market associated with the Company’s Networks reporting unit, and execution risk associated with anticipated growth in the Company’s DTC reporting unit, the Company will continue to monitor its reporting units for changes that could impact recoverability.
Assets Held for Sale
In 2022, the Company classified its Ranch Lot and Knoxville office building and land as assets held for sale. The Company reclassified $209 million to prepaid expenses and other assets on the consolidated balance sheet during 2022 and stopped recording depreciation on the assets. The Knoxville office building and land was sold during the three months ended March 31, 2023.
26

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

Supplier Finance Programs
Consistent with customary industry practice, the Company generally pays certain content producers at or near the completion of the production cycle. In these arrangements, content producers may earn fees upon contractual milestones to be invoiced at or near completion of production. In these instances, the Company accrues the content in progress in accordance with the contractual milestones. Certain of the Company’s content producers sell their related receivables to a bank intermediary who provides payments that coincide with these contractual production milestones upon confirmation with the Company of our obligation to the content producer. This confirmation does not involve a security interest in the underlying content or otherwise result in the payable receiving seniority with respect to other payables of the Company. As of March 31, 2023 and December 31, 2022, the Company has confirmed $246 million and $273 million, respectively, of accrued content producer liabilities. These amounts were outstanding and unpaid by the Company and were recorded in accrued liabilities on the consolidated balance sheets, given the principal purpose of the arrangement is to allow producers access to funds prior to the typical payment due date and the arrangement does not significantly change the nature of the payables and does not significantly extend the payment terms beyond the industry norms. Invoices processed through the program are subject to a one-year maximum tenor. The Company does not incur any fees or expenses associated with the paying agent services, and this service may be terminated by the Company or the financial institution upon 30 days’ notice. At, or near, the production completion date (invoice due date), the Company pays the financial institution the stated amounts for confirmed producer invoices. These payments are reported as cash flows from operating activities.
Accumulated Other Comprehensive Loss
The table below presents the changes in the components of accumulated other comprehensive loss, net of taxes (in millions).
Three Months Ended March 31, 2023
Currency Translation DerivativesPension Plan and SERP LiabilityAccumulated
Other
Comprehensive Loss
Beginning balance$(1,498)$14 $(39)$(1,523)
Other comprehensive income (loss) before reclassifications
426 3 (9)420 
Reclassifications from accumulated other comprehensive loss to net income
— (2)— (2)
Other comprehensive income (loss)
426 1 (9)418 
Ending balance
$(1,072)$15 $(48)$(1,105)
Three Months Ended March 31, 2022
Currency Translation DerivativesPension Plan and SERP LiabilityAccumulated
Other
Comprehensive Loss
Beginning balance$(845)$28 $(13)$(830)
Other comprehensive income (loss) before reclassifications
(97)(12)— (109)
Reclassifications from accumulated other comprehensive loss to net income
(2)(6)— (8)
Other comprehensive income (loss)
(99)(18)— (117)
Ending balance
$(944)$10 $(13)$(947)
NOTE 15. RELATED PARTY TRANSACTIONS
In the normal course of business, the Company enters into transactions with related parties. Related parties include entities that share common directorship, such as Liberty Global plc (“Liberty Global”), Liberty Broadband Corporation (“Liberty Broadband”) and their subsidiaries (collectively the “Liberty Group”). The Company’s Board of Directors includes Dr. John Malone, who is Chairman of the Board of Liberty Global and Liberty Broadband and beneficially owns approximately 30% and 48% of the aggregate voting power with respect to the election of directors of Liberty Global and Liberty Broadband, respectively. The majority of the revenue earned from the Liberty Group relates to multi-year network distribution arrangements. Related party transactions also include revenues and expenses for content and services provided to or acquired from equity method investees, or minority partners of consolidated subsidiaries.
27

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

The table below presents a summary of the transactions with related parties (in millions).
Three Months Ended March 31,
20232022
Revenues and service charges:
Liberty Group$518 $158 
Equity method investees175 58 
Other47 33 
Total revenues and service charges$740 $249 
Expenses$99 $76 
Distributions to noncontrolling interests and redeemable noncontrolling interests$237 $224 
The table below presents receivables due from and payables due to related parties (in millions).
March 31, 2023December 31, 2022
Receivables$354 $338 
Payables$23 $38 
NOTE 16. COMMITMENTS AND CONTINGENCIES
Put Rights
The Company has granted put rights to non-controlling interest holders in certain consolidated subsidiaries, but the Company is unable to reasonably predict the ultimate amount or timing of any payment.
In 2022, GoldenTree exercised its irrevocable put right for MotorTrend Group LLC (“MTG”), and the Company will be required to purchase GoldenTree’s 32.5% noncontrolling interest. The Company performed an analysis of the redemption value as of December 31, 2022, and both parties have begun the process of determining a fair market value based on their own appraisals. The Company does not expect this process, which is one of potentially several steps to agreeing to a redemption value, will be completed until later in 2023. Accordingly, there has been no change in the classification of MTG as mezzanine equity since the amount or date of the put is not certain.
Legal Matters
From time to time, in the normal course of its operations, the Company is subject to various litigation matters and claims, including those related to employees, stockholders, vendors, other business partners, or intellectual property. However, a determination as to the amount of the accrual required for such contingencies is highly subjective and requires judgment about future events. 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 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.
NOTE 17. REPORTABLE SEGMENTS
The Company’s operating segments are determined based on: (i) financial information reviewed by its chief operating decision maker, the Chief Executive Officer (“CEO”), (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions. In connection with the Merger, the Company reevaluated and changed its segment presentation and reportable segments during the quarter ended June 30, 2022. Prior periods have been recast to conform to the current period presentation.
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 records inter-segment transactions of content licenses at the gross amount. Prior year amounts have been recast to reflect the current presentation. The Company does not report assets by segment because it is not used to allocate resources or evaluate segment performance.
The Company evaluates the operating performance of its operating segments based on financial measures such as revenues and Adjusted EBITDA. Adjusted EBITDA is defined as operating income excluding:
•employee share-based compensation;
28

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

•depreciation and amortization;
•restructuring and facility consolidation;
•certain impairment charges;
•gains and losses on business and asset dispositions;
•certain inter-segment eliminations;
•third-party transaction and integration costs;
•amortization of purchase accounting fair value step-up for content;
•amortization of capitalized interest for content; and
•other items impacting comparability.
The Company uses this measure to assess the operating results and performance of its 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. The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step-up for content, and amortization of capitalized interest for content, as these amounts do not represent cash payments in the current reporting period. Certain corporate expenses and inter-segment eliminations related to production studios are excluded from segment results to enable executive management to evaluate segment performance based upon the decisions of segment executives. Adjusted EBITDA should be considered in addition to, but not a substitute for, operating income, net income, and other measures of financial performance reported in accordance with U.S. GAAP.
The tables below present summarized financial information for each of the Company’s reportable segments and inter-segment eliminations (in millions).
Revenues
 Three Months Ended March 31,
20232022
Studios$3,212 $5 
Networks5,581 2,873 
DTC2,455 281 
Inter-segment eliminations (548)— 
Total revenues$10,700 $3,159 
Adjusted EBITDA
Three Months Ended March 31,
20232022
Studios$607 $3 
Networks2,293 1,355 
DTC50 (227)
Corporate(355)(104)
Inter-segment eliminations 16 — 
Adjusted EBITDA$2,611 $1,027 
29

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

Reconciliation of Net (Loss) Income available to Warner Bros. Discovery, Inc. to Adjusted EBITDA
 Three Months Ended March 31,
20232022
Net (loss) income available to Warner Bros. Discovery, Inc.$(1,069)$456 
Net income attributable to redeemable noncontrolling interests1 3 
Net income attributable to noncontrolling interests8 16 
Income tax (benefit) expense(178)201 
(Loss) income before income taxes(1,238)676 
Other expense (income), net73 (490)
Loss from equity investees, net37 14 
Interest expense, net571 153 
Operating (loss) income(557)353 
Restructuring95 5 
Impairments and loss on dispositions31 — 
Depreciation and amortization2,058 525 
Employee share-based compensation106 57 
Transaction and integration costs47 87 
Amortization of fair value step-up for content831 — 
Adjusted EBITDA$2,611 $1,027 
NOTE 18. SUBSEQUENT EVENTS
In April 2023, the Company borrowed $750 million under its Credit Facility to fund certain sports rights payments, which is expected to be repaid within the current quarter.
30

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s discussion and analysis of financial condition and results of operations is a supplement to and should be read in conjunction with the accompanying consolidated financial statements and related notes. This section provides additional information regarding our businesses, current developments, results of operations, cash flows and financial condition. Additional context can also be found in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 Form 10-K”).
BUSINESS OVERVIEW
Warner Bros. Discovery is a premier global media and entertainment company that combines the WarnerMedia Business’s premium entertainment, sports and news assets with Discovery’s leading non-fiction and international entertainment and sports businesses, thus offering audiences a differentiated portfolio of content, brands and franchises across television, film, streaming and gaming. Some of our iconic brands and franchises include Warner Bros. Pictures Group, Warner Bros. Television Group, DC, HBO, HBO Max, Discovery Channel, discovery+, CNN, HGTV, Food Network, TNT, TBS, TLC, OWN, Warner Bros. Games, Batman, Superman, Wonder Woman, Harry Potter, Looney Tunes, Hanna-Barbera, Game of Thrones, and The Lord of the Rings.
We are home to a powerful creative engine and one of the largest collections of owned content in the world and have one of the strongest hands in the industry in terms of the completeness and quality of assets and intellectual property across sports, news, lifestyle, and entertainment in virtually every region of the globe and in most languages. Additionally, we serve audiences and consumers around the world with content that informs, entertains, and, when at its best, inspires.
Our asset mix positions us to drive a balanced approach to creating long-term value for shareholders. It represents the full entertainment eco-system, and the ability to serve consumers across the entire spectrum of offerings from domestic and international networks, premium pay-TV, streaming, production and release of feature films and original series, related consumer products and themed experience licensing, and interactive gaming.
In April 2023, we announced the debut of our enhanced streaming service, Max, which we expect to launch in the U.S. in May 2023. Max will combine HBO Max and discovery+ content to create a unique and complete viewing experience for consumers by combining our unrivaled breadth and superior quality of content and brands with iconic franchises and strong product experience. discovery+ will continue to be available to consumers.
In connection with the Merger, the Company has announced and has taken actions to implement projects to achieve cost synergies for the Company. The Company finalized the framework supporting its ongoing restructuring and transformation initiatives during the year ended December 31, 2022, 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. We expect that we will incur approximately $4.1 - $5.3 billion in pre-tax restructuring charges, of which we have incurred $3.8 billion as of March 31, 2023. Of the total expected pre-tax restructuring charges, we expect total cash expenditures to be $1.0 - $ 1.5 billion. During the three months ended March 31, 2023, we incurred $95 million of pre-tax restructuring charges. While our restructuring efforts are ongoing, the restructuring program is expected to be substantially completed by the end of 2024.
As of March 31, 2023, we classified our operations in three reportable segments:
•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/DTC 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.
•Networks - Our Networks segment primarily consists of our domestic and international television networks.
•DTC- Our DTC segment primarily consists of our premium pay-TV and streaming services.
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. Prior periods have been recast to conform to the current period presentation.
31

RESULTS OF OPERATIONS
The discussion below compares our actual results for the three months ended March 31, 2023 to our pro forma combined results, as if the Merger occurred on January 1, 2021, for the three months ended March 31, 2022. Management believes reviewing our pro forma combined operating results in addition to actual operating results is useful in identifying trends in, or reaching conclusions regarding, the overall operating performance of our businesses. Our Studios, Networks, DTC, Corporate, and inter-segment eliminations information is based on the historical operating results of the respective segments and include, where applicable, adjustments for (i) additional costs of revenues from the fair value step-up of film and television library, (ii) additional amortization expense related to acquired intangible assets, (iii) additional depreciation expense from the fair value of property and equipment, (iv) transaction costs and other one-time non-recurring costs, (v) additional interest expense for borrowings related to the Merger and amortization associated with fair value adjustments of debt assumed, (vi) changes to align accounting policies, (vii) elimination of intercompany activity, and (viii) associated tax-related impacts of adjustments.
Adjustments do not include costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined businesses. Pro forma amounts are not necessarily indicative of what our results would have been had we operated the combined businesses since January 1, 2021 and should not be taken as indicative of the Company’s future consolidated results of operations.
Actual amounts for the three months ended March 31, 2022 do not include results of operations for WM.
Foreign Exchange Impacting Comparability
In addition to the Merger, the impact of exchange rates on our business is an important factor in understanding period-to-period comparisons of our results. For example, our international revenues are favorably impacted as the U.S. dollar weakens relative to other foreign currencies, and unfavorably impacted as the U.S. dollar strengthens relative to other foreign currencies. We believe the presentation of results on a constant currency basis (“ex-FX”), in addition to results reported in accordance with U.S. GAAP provides useful information about our operating performance because the presentation ex-FX excludes the effects of foreign currency volatility and highlights our core operating results. The presentation of results on a constant currency basis should be considered in addition to, but not a substitute for, measures of financial performance reported in accordance with U.S. GAAP.
The ex-FX change represents the percentage change on a period-over-period basis adjusted for foreign currency impacts. The ex-FX change is calculated as the difference between the current year amounts translated at a baseline rate, which is a spot rate for each of our currencies determined early in the fiscal year as part of our forecasting process (the “2023 Baseline Rate”), and the prior year amounts translated at the same 2023 Baseline Rate. In addition, consistent with the assumption of a constant currency environment, our ex-FX results exclude the impact of our foreign currency hedging activities, as well as realized and unrealized foreign currency transaction gains and losses. Results on a constant currency basis, as we present them, may not be comparable to similarly titled measures used by other companies.
32

Consolidated Results of Operations
The table below presents our consolidated results of operations (in millions).
Three Months Ended March 31,
20232022% Change
Actual
Actual (a)
Pro Forma
Adjustments		Pro Forma
Combined		ActualPro Forma Combined
(Actual)		Combined
(ex-FX)
Revenues:
Distribution$5,163 $1,352 $3,996 $5,348 NM(3)%(2)%
Advertising2,298 1,476 1,234 2,710 56 %(15)%(14)%
Content2,954 323 2,851 3,174 NM(7)%(5)%
Other285 8 201 209 NM36 %37 %
Total revenues10,700 3,159 8,282 11,441 NM(6)%(5)%
Costs of revenues, excluding depreciation and amortization6,685 1,236 5,261 6,497 NM3 %4 %
Selling, general and administrative2,388 1,040 2,298 3,338 NM(28)%(28)%
Depreciation and amortization2,058 525 1,417 1,942 NM6 %6 %
Restructuring95 5 (1)4 NMNMNM
Impairments and loss on dispositions31 — — — NMNMNM
Total costs and expenses11,257 2,806 8,975 11,781 NM(4)%(3)%
Operating (loss) income(557)353 (693)(340)NM(64)%(47)%
Interest expense, net(571)(153)(445)(598)
Loss from equity investees, net(37)(14)(13)(27)
Other (expense) income, net(73)490 114 604 
(Loss) income before income taxes(1,238)676 (1,037)(361)
Income tax benefit (expense)178 (201)282 81 
Net (loss) income(1,060)475 (755)(280)
Net income attributable to noncontrolling interests(8)(16)— (16)
Net income attributable to redeemable noncontrolling interests(1)(3)— (3)
Net (loss) income available to Warner Bros. Discovery, Inc.$(1,069)$456 $(755)$(299)
(a) Prior year actual results have been recast to conform to the current period presentation as a result of the Merger and segment recast.
NM - Not meaningful
Unless otherwise indicated, the discussion through operating (loss) income below reflects results for the three months ended March 31, 2022 on a pro-forma combined basis, ex-FX, since the actual increases year over year for revenues, cost of revenues, and selling, general and administrative expenses are substantially attributable to the Merger. The percent changes of line items below operating (loss) income in the table above are not included as the activity is principally in U.S. dollars.
Revenues
Distribution revenues are generated from fees charged to network distributors, which include cable, DTH satellite, telecommunications and digital service providers, and DTC subscribers. The largest component of distribution revenue is comprised of linear distribution rights to our networks from cable, DTH satellite and telecommunication service providers. We have contracts with distributors representing most cable and satellite service providers around the world, including the largest operators in the U.S. and major international distributors. Distribution revenues are largely dependent on the rates negotiated in the agreements, the number of subscribers that receive our networks, the number of platforms covered in the distribution agreement, and the market demand for the content that we provide. From time to time, renewals of multi-year carriage agreements include significant year one market adjustments to re-set subscriber rates, which then increase at rates lower than the initial increase in the following years. In some cases, we have provided distributors launch incentives, in the form of cash payments or free periods, to carry our networks.
Distribution revenue decreased 2% for the three months ended March 31, 2023, primarily attributable to declines in DTC wholesale revenues and linear subscribers in the U.S., partially offset by global DTC retail subscriber gains and higher U.S. contractual affiliate rates.
33

Advertising revenues are principally generated from the sale of commercial time on linear (television networks and authenticated TVE applications) and digital platforms (DTC subscription services and websites), and sold primarily on a national basis in the U.S. and on a pan-regional or local-language feed basis outside the U.S. Advertising contracts generally have a term of one year or less. Advertising revenue is dependent upon a number of factors, including the number of subscribers to our channels, viewership demographics, the popularity of our content, our ability to sell commercial time over a group of channels, the stage of development of television markets, and the popularity of FTA television. Revenue from advertising is subject to seasonality, market-based variations, the mix in sales of commercial time between the upfront and scatter markets, and general economic conditions. Advertising revenue is typically highest in the second and fourth quarters. In some cases, advertising sales are subject to ratings guarantees that require us to provide additional advertising time if the guaranteed audience levels are not achieved. We also generate revenue from the sale of advertising through our digital platforms on a stand-alone basis and as part of advertising packages with our television networks.
Advertising revenue decreased 14% for the three months ended March 31, 2023, primarily attributable to audience declines in domestic general entertainment and news networks, soft advertising markets in the U.S., and to a lesser extent, certain international markets, and the broadcast of the 2022 Olympics in Europe, partially offset by higher sports advertising due to the NCAA March Madness tournament.
Content revenues are generated from the release of feature films for initial exhibition in theaters, the licensing of feature films and television programs to various television, SVOD and other digital markets, distribution of feature films and television programs in the physical and digital home entertainment market, sales of console games and mobile in-game content, sublicensing of sports rights, and licensing of intellectual property such as characters and brands.
Content revenue decreased 5% for the three months ended March 31, 2023, primarily attributable to lower TV licensing and theatrical film rental revenues and lower sub-licensing of sports rights internationally related to the prior year broadcast of the 2022 Olympics, partially offset by higher games revenue due to the release of Hogwarts Legacy.
Other revenue primarily consists of studio production services and tours.
Other revenue increased 37% for the three months ended March 31, 2023, primarily attributable to services provided to the unconsolidated BT Sport joint venture, higher studio production services, and continued strong attendance at Warner Bros. Studio Tour London and Hollywood.
Costs of Revenues
Our principal component of costs of revenues is content expense. Content expense includes television/digital series, specials, films, games, and sporting events. The costs of producing a content asset and bringing that asset to market consist of production costs, participation costs, and exploitation costs.
Costs of revenues increased 4% for the three months ended March 31, 2023, primarily attributable to amortization of the fair value step-up of content acquired in the Merger and higher games costs of revenue, partially offset by lower content expense for TV licensing, theatrical products, and linear networks, and lower costs related to the prior year broadcast of the 2022 Olympics.
Selling, General and Administrative
Selling, general and administrative expenses consist principally of employee costs, marketing costs, research costs, occupancy, and back office support fees.
Selling, general and administrative expenses decreased 28% for the three months ended March 31, 2023, primarily attributable to more efficient marketing-related spend.
Depreciation and Amortization
Depreciation and amortization expense includes depreciation of fixed assets and amortization of finite-lived intangible assets. Depreciation and amortization increased 6% for the three months ended March 31, 2023, primarily attributable to intangible assets acquired during the Merger that are being amortized using the sum of the months’ digits method, which resulted in lower pro forma amortization in the three months ended March 31, 2022.
Restructuring
In connection with the Merger, the Company has announced and has taken actions to implement projects to achieve cost synergies for the Company. Restructuring increased $90 million for the three months ended March 31, 2023, primarily attributable to contract terminations, facility consolidation activities, and organizational restructuring. (See Note 4 to the accompanying consolidated financial statements.)
Impairments and Loss on Dispositions
Impairments and loss on dispositions was a $31 million loss for the three months ended March 31, 2023.
34

Interest Expense, net
Actual interest expense, net increased $418 million for the three months ended March 31, 2023, primarily attributable to debt assumed as a result of the Merger. (See Note 9 and Note 10 to the accompanying consolidated financial statements.)
Loss From Equity Investees, net
Actual losses from our equity method investees were $37 million for the three months ended March 31, 2023. The changes are attributable to our share of earnings and losses from our equity investees. (See Note 8 to the accompanying consolidated financial statements.)
Other (Expense) Income, net
The table below presents the details of other (expense) income, net (in millions).
Three Months Ended March 31,
20232022
Foreign currency (losses) gains, net$(93)$11 
Gains on derivative instruments, net3 497 
Change in the value of investments with readily determinable fair value29 (20)
Change in fair value of equity investments without readily determinable fair value(68)— 
Other income, net56 2 
Total other (expense) income, net
$(73)$490 
Income Tax Benefit (Expense)
Income tax benefit was $178 million for the three months ended March 31, 2023, and income tax expense was $201 million for the three months ended March 31, 2022. The decrease in the three months ended March 31, 2023 was primarily attributable to a decrease in pre-tax book income.
Income tax benefit for the three months ended March 31, 2023 reflects an effective income tax rate that differs from the federal statutory tax rate primarily attributable to the effect of foreign operations, changes in uncertain tax positions, and state and local income taxes.
35

Segment Results of Operations
The Company evaluates the operating performance of its operating 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;
•certain inter-segment eliminations;
•third-party transaction and integration costs;
•amortization of purchase accounting fair value step-up for content;
•amortization of capitalized interest for content; and
•other items impacting comparability.
The Company uses this measure to assess the operating results and performance of its 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. The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step-up for content, and amortization of capitalized interest for content, as these amounts do not represent cash payments in the current reporting period. Certain corporate expenses and inter-segment eliminations related to production studios are excluded from segment results to enable executive management to evaluate segment performance based upon the decisions of segment executives. Adjusted EBITDA should be considered in addition to, but not a substitute for, operating income, net income, and other measures of financial performance reported in accordance with U.S. GAAP.
The table below presents our Adjusted EBITDA by segment (in millions).
 Three Months Ended March 31, 
 20232022% Change
Studios$607 $3 NM
Networks$2,293 $1,355 69 %
DTC$50 $(227)NM
Corporate$(355)$(104)NM
Inter-segment eliminations $16 $— NM
36

 Studios Segment
The following table presents, for our Studios segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating (loss) income (in millions).
 Three Months Ended March 31,
 20232022% Change
Actual
Actual (a)
Pro Forma
Adjustments		Pro Forma
Combined		ActualPro Forma Combined
(Actual)		Pro Forma
Combined
(ex-FX)
Revenues:
Distribution$3 $— $5 $5 NM(40)%(40)%
Advertising3 — 9 9 NM(67)%(67)%
Content3,027 5 3,347 3,352 NM(10)%(8)%
Other179 — 138 138 NM30 %30 %
Total revenues3,212 5 3,499 3,504 NM(8)%(7)%
Costs of revenues, excluding depreciation and amortization1,959 1 2,064 2,065 NM(5)%(4)%
Selling, general and administrative646 1 628 629 NM3 %6 %
Adjusted EBITDA607 3 807 810 NM(25)%(23)%
Depreciation and amortization172 — 136 136 
Employee share-based compensation— — 25 25 
Restructuring76 — — — 
Transaction and integration costs 2 — — — 
Amortization of fair value step-up for content442 — 171 171 
Inter-segment eliminations1 — — — 
Operating (loss) income$(86)$3 $475 $478 
(a) Prior year actual results have been recast to conform to the current period presentation as a result of the Merger and segment recast.
The discussion below reflects results for the three months ended March 31, 2022 on a pro forma combined basis, ex-FX, since the actual increases year over year for revenues, cost of revenue, selling, general and administrative expenses and Adjusted EBITDA are substantially attributable to the Merger.
Revenues
Content revenue decreased 8% for the three months ended March 31, 2023, primarily attributable to lower TV licensing, theatrical film rental, and home entertainment revenues, partially offset by higher games revenue due to the release of Hogwarts Legacy. TV licensing revenue decreased mainly due to certain large TV licensing deals in the first quarter of 2022, as well as fewer theatrical availabilities. Theatrical film rental revenue decreased due to the performance of The Batman, which was released in the first quarter of 2022. Home entertainment revenue decreased due to fewer new releases of theatrical products and lower library sales.
Other revenue increased 30% for the three months ended March 31, 2023, primarily attributable to higher studio production services and continued strong attendance at Warner Bros. Studio Tour London and Hollywood.
Costs of Revenues
Costs of revenues decreased 4% for the three months ended March 31, 2023, primarily attributable to lower content expense for TV licensing and theatrical products, partially offset by higher games costs of revenue.
Selling, General and Administrative
Selling, general and administrative expenses increased 6% for the three months ended March 31, 2023, primarily attributable to higher marketing expense for games to support the release of Hogwarts Legacy, partially offset by lower theatrical marketing expense.
Adjusted EBITDA
Adjusted EBITDA decreased 23% for the three months ended March 31, 2023.
37

 Networks Segment
The table below presents, for our Networks segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating income (in millions).
 Three Months Ended March 31,
 20232022% Change
Actual
Actual (a)
Pro Forma
Adjustments		Pro Forma
Combined		ActualPro Forma Combined
(Actual)		Pro Forma
Combined
(ex-FX)
Revenues:
Distribution$2,995 $1,120 $2,012 $3,132 NM(4)%(3)%
Advertising2,237 1,430 1,202 2,632 56 %(15)%(14)%
Content245 316 199 515 (22)%(52)%(51)%
Other104 7 46 53 NM96 %96 %
Total revenues5,581 2,873 3,459 6,332 94 %(12)%(10)%
Costs of revenues, excluding depreciation and amortization2,594 1,055 1,895 2,950 NM(12)%(10)%
Selling, general and administrative694 463 333 796 50 %(13)%(11)%
Adjusted EBITDA2,293 1,355 1,231 2,586 69 %(11)%(10)%
Depreciation and amortization1,304 405 879 1,284 
Employee share-based compensation— — 9 9 
Restructuring3 4 — 4 
Transaction and integration costs3 (1)— (1)
Amortization of fair value step-up for content121 — 126 126 
Inter-segment eliminations(7)— — — 
Impairments and loss on dispositions1 — — — 
Operating income$868 $947 $217 $1,164 
(a) Prior year actual results have been recast to conform to the current period presentation as a result of the Merger and segment recast.
The discussion below reflects results for the three months ended March 31, 2022 on a pro forma combined basis, ex-FX, since the actual increases year over year for revenues, cost of revenue, selling, general and administrative expenses and Adjusted EBITDA are substantially attributable to the Merger.
Revenues
Distribution revenue decreased 3% for the three months ended March 31, 2023, primarily attributable to a decline in linear subscribers in the U.S., partially offset by higher U.S. contractual affiliate rates.
Advertising revenue decreased 14% for the three months ended March 31, 2023, primarily attributable to audience declines in domestic general entertainment and news networks, soft advertising markets in the U.S., and to a lesser extent, certain international markets, and the broadcast of the 2022 Olympics in Europe, partially offset by higher domestic sports advertising due to the NCAA March Madness tournament.
Content revenue decreased 51% for the three months ended March 31, 2023, primarily attributable to lower sublicensing of sports rights internationally related to the prior year broadcast of the 2022 Olympics.
Other revenue increased 96% for the three months ended March 31, 2023, primarily attributable to services provided to the unconsolidated BT Sport joint venture.
Costs of Revenues
Costs of revenues decreased 10% for the three months ended March 31, 2023, primarily attributable to lower costs related to the prior year broadcast of the 2022 Olympics and lower domestic general entertainment content expense, partially offset by higher domestic sports rights and costs associated with the unconsolidated BT Sport joint venture.
Selling, General and Administrative
Selling, general and administrative expenses decreased 11% for the three months ended March 31, 2023, primarily attributable to lower marketing expenses.
Adjusted EBITDA
Adjusted EBITDA decreased 10% for the three months ended March 31, 2023.
38

 DTC Segment
The following table presents, for our DTC segment, revenues by type, certain operating expenses, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating loss (in millions).
 Three Months Ended March 31,
 20232022% Change
Actual
Actual (a)
Pro Forma
Adjustments		Pro Forma
Combined		ActualPro Forma Combined
(Actual)		Pro Forma
Combined
(ex-FX)
Revenues:
Distribution$2,165 $232 $1,979 $2,211 NM(2)%(1)%
Advertising103 46 35 81 NM27 %29 %
Content185 2 219 221 NM(16)%(16)%
Other2 1 1 2 NM— %NM
Total revenues2,455 281 2,234 2,515 NM(2)%(1)%
Costs of revenues, excluding depreciation and amortization1,815 180 1,814 1,994 NM(9)%(8)%
Selling, general and administrative590 328 847 1,175 80 %(50)%(50)%
Adjusted EBITDA50 (227)(427)(654)NMNMNM
Depreciation and amortization506 96 378 474 
Employee share-based compensation— — 1 1 
Restructuring9 — — — 
Transaction and integration costs — 1 — 1 
Amortization of fair value step-up for content134 — 60 60 
Inter-segment eliminations2 — — — 
Impairments and loss on dispositions5 — — — 
Operating loss$(606)$(324)$(866)$(1,190)
(a) Prior year actual results have been recast to conform to the current period presentation as a result of the Merger and segment recast.
The discussion below reflects results for the three months ended March 31, 2022 on a pro forma combined basis, ex-FX, since the actual increases year over year for revenues, cost of revenue, selling, general and administrative expenses and Adjusted EBITDA are substantially attributable to the Merger.
Revenues
As of March 31, 2023, we had 97.6 million DTC subscribers.1
Distribution revenue decreased 1% for the three months ended March 31, 2023, primarily attributable to a decline in wholesale revenues, partially offset by global retail subscriber gains.
Advertising revenue increased 29% for the three months ended March 31, 2023, primarily attributable to subscriber growth on our DTC ad-supported tiers.
Content revenue decreased 16% for the three months ended March 31, 2023, primarily attributable to lower third-party licensing of HBO content.
Costs of Revenues
Costs of revenues decreased 8% for the three months ended March 31, 2023, primarily attributable to lower content amortization and the shutdown of CNN+.
1 We define a “DTC Subscription” as:
(i) a retail subscription to discovery+, HBO or HBO Max for which we have recognized subscription revenue, whether directly or through a third party, from a direct-to-consumer platform; (ii) a wholesale subscription to discovery+, HBO, or HBO Max for which we have recognized subscription revenue from a fixed-fee arrangement with a third party and where the individual user has activated their subscription; (iii) a wholesale subscription to discovery+, HBO or HBO Max for which we have recognized subscription revenue on a per subscriber basis; and (iv) users on free trials who convert to a subscription for which we have recognized subscription revenue within the first seven days of the calendar month immediately following the month in which their free trial expires.
We may refer to the aggregate number of DTC Subscriptions as “subscribers.”
The reported number of “subscribers” included herein and the definition of “DTC Subscription” as used herein excludes: (i) individuals who subscribe to DTC products, other than discovery+, HBO and HBO Max, that may be offered by us or by certain joint venture partners or affiliated parties from time to time; (ii) a limited number of international discovery+ subscribers that are part of non-strategic partnerships or short-term arrangements as may be identified by the Company from time to time; (iii) domestic and international Cinemax subscribers, and international basic HBO subscribers; and (iv) users on free trials except for those users on free trial that convert to a DTC Subscription within the first seven days of the next month as noted above.
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Selling, General, and Administrative Expenses
Selling, general and administrative expenses decreased 50% for the three months ended March 31, 2023, primarily attributable to more efficient marketing-related spend.
Adjusted EBITDA
Adjusted EBITDA increased $704 million for the three months ended March 31, 2023.
Corporate
The following table presents our Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating loss (in millions).
 Three Months Ended March 31, 
 20232022% Change
ActualActualPro Forma
Adjustments		Pro Forma
Combined		ActualPro Forma Combined
(Actual)		Pro Forma
Combined
(ex-FX)
Adjusted EBITDA$(355)$(104)$(253)$(357)NM1 %1 %
Employee share-based compensation106 57 21 78 
Depreciation and amortization76 24 24 48 
Restructuring7 1 (1)— 
Transaction and integration costs42 87 218 305 
Impairments and loss on dispositions25 — — — 
Inter-segment eliminations4 — — — 
Operating loss$(615)$(273)$(515)$(788)
Corporate operations primarily consist of executive management and administrative support services, which are recorded in selling, general and administrative expense, as well as substantially all of our share-based compensation and third-party transaction and integration costs.
Adjusted EBITDA remained flat for the three months ended March 31, 2023, primarily attributable to reductions to personnel costs and technology-related operating expenses, which were largely offset by unfavorable interest rate impacts on securitization costs.
Inter-segment Eliminations
The following table presents our inter-segment eliminations by revenue and expense, Adjusted EBITDA and a reconciliation of Adjusted EBITDA to operating loss (in millions).
 Three Months Ended March 31, 
 20232022% Change
ActualActualPro Forma
Adjustments		Pro Forma
Combined		ActualPro Forma Combined
(Actual)		Pro Forma
Combined
(ex-FX)
Inter-segment revenue eliminations$(548)$— $(926)$(926)NM41 %41 %
Inter-segment expense eliminations(564)— (922)(922)NM39 %39 %
Adjusted EBITDA16 — (4)(4)NMNMNM
Amortization of fair value step-up for content134 — — — 
Operating loss$(118)$— $(4)$(4)
Inter-segment revenue and expense eliminations primarily represent inter-segment content transactions and marketing and promotion activity between reportable segments. In our current segment structure, in certain instances, production and distribution activities are in different segments. Inter-segment content transactions are presented “gross” (i.e. the segment producing and/or licensing the content reports revenue and profit from inter-segment transactions in a manner similar to the reporting of third-party transactions, and the required eliminations are reported on the separate “Eliminations” line when presenting our summary of segment results). Generally, timing of revenue recognition is similar to the reporting of third-party transactions. The segment distributing the content, e.g. via our DTC or linear services, capitalizes the cost of inter-segment content transactions, including “mark-ups” and amortizes the costs over the shorter of the license term, if applicable, or the expected period of use. The content amortization expense related to the inter-segment profit is also eliminated on the separate “Eliminations” line when presenting our summary of segment results.
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LIQUIDITY AND CAPITAL RESOURCES
Liquidity
Sources of Cash
Historically, we have generated a significant amount of cash from operations. During the three months ended March 31, 2023, we funded our working capital needs primarily through cash flows from operations. As of March 31, 2023, we had $2.6 billion of cash and cash equivalents on hand. We are a well-known seasoned issuer and have the ability to conduct registered offerings of securities, including debt securities, common stock and preferred stock, on short notice, subject to market conditions. Access to sufficient capital from the public market is not assured. We have a $6.0 billion revolving credit facility and a commercial paper program described below. We also participate in a revolving receivables program and an accounts receivable factoring program described below.
•Debt
Senior Notes
During the three months ended March 31, 2023 we 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.
Revolving Credit Facility and Commercial Paper
We have a multicurrency revolving credit agreement (the “Revolving Credit Agreement”) and have the capacity to borrow up to $6.0 billion under the Revolving Credit Agreement (the “Credit Facility”). We may also request additional commitments up to $1.0 billion from the lenders upon the satisfaction of certain conditions. The Revolving Credit Agreement contains customary representations and warranties as well as affirmative and negative covenants. As of March 31, 2023, DCL was in compliance with all covenants and there were no events of default under the Revolving Credit Agreement.
Additionally, our commercial paper program is supported by the Credit Facility. Under the commercial paper program, we may issue up to $1.5 billion, including up to $500 million of euro-denominated borrowings. Borrowing capacity under the Credit Facility is effectively reduced by any outstanding borrowings under the commercial paper program.
During the three months ended March 31, 2023, we borrowed and repaid $933 million under our commercial paper program. As of March 31, 2023, we had no outstanding borrowings under the Credit Facility or the commercial paper program.
In April 2023, we borrowed $750 million under our Credit Facility to fund certain sports rights payments, which is expected to be repaid within the current quarter.
•Revolving Receivables Program
We have a revolving agreement to transfer up to $5,700 million of certain receivables through our bankruptcy-remote subsidiary, Warner Bros. Discovery Receivables Funding, LLC, to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred. We service the sold receivables for the financial institution for a fee and pay fees to the financial institution in connection with this revolving agreement. As customers pay their balances, our available capacity under this revolving agreement increases and typically we transfer additional receivables into the program. In some cases, we may have collections that have not yet been remitted to the bank, resulting in a liability. The outstanding portfolio of receivables derecognized from our consolidated balance sheets was $5,300 million as of March 31, 2023.
•Accounts Receivable Factoring
We have a factoring agreement to sell certain of our non-U.S. trade accounts receivable on a non-recourse basis to a third-party financial institution. Total trade accounts receivable sold under our factoring arrangement was $72 million during the three months ended March 31, 2023.
•Derivatives
We received investing proceeds of $20 million during the three months ended March 31, 2023 from the unwind and settlement of derivative instruments. (See Note 10 to the accompanying consolidated financial statements.)
Uses of Cash
Our primary uses of cash include the creation and acquisition of new content, business acquisitions, income taxes, personnel costs, costs to develop and market our enhanced streaming service Max, principal and interest payments on our outstanding senior notes and term loan, funding for various equity method and other investments, and repurchases of our capital stock.
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•Content Acquisition
We plan to continue to invest significantly in the creation and acquisition of new content, as well as certain sports rights. Contractual commitments to acquire content have not materially changed as set forth in “Material Cash Requirements from Known Contractual and Other Obligations” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Form 10-K.
•Debt
Term Loan
During the three months ended March 31, 2023, we repaid $1.5 billion of aggregate principal amount outstanding of our term loan prior to the due date of April 2025.
Senior Notes
During the three months ended March 31, 2023, we repaid $106 million of aggregate principal amount outstanding of our senior notes due February 2023. In addition, we have $179 million and $82 million of senior notes coming due in September and December 2023, respectively, and $3.2 billion of senior notes coming due in the first quarter of 2024.
•Capital Expenditures and Investments in Next Generation Initiatives
We effected capital expenditures of $299 million during the three months ended March 31, 2023, including amounts capitalized to support Max. In addition, we expect to continue to incur significant costs to develop and market Max.
•Investments and Business Combinations
Our uses of cash have included investments in equity method investments and equity investments without readily determinable fair value. (See Note 8 to the accompanying consolidated financial statements.) We also provide funding to our investees from time to time. During the three months ended March 31, 2023, we contributed $13 million for investments in and advances to our investees.
We expect to incur significant, one-time transaction and integration costs during the first year following the Merger. (See Note 3 to the accompanying consolidated financial statements.)
•Redeemable Noncontrolling Interest and Noncontrolling Interest
Due to business combinations, we had redeemable equity balances of $309 million at March 31, 2023, which may require the use of cash in the event holders of noncontrolling interests put their interests to us. In 2022, GoldenTree exercised its put right and we are required to purchase GoldenTree’s noncontrolling interest. (See Note 16 to the accompanying consolidated financial statements.) Distributions to noncontrolling interests and redeemable noncontrolling interests totaled $237 million and $224 million for the three months ended March 31, 2023 and 2022, respectively.
•Income Taxes and Interest
We expect to continue to make payments for income taxes and interest on our outstanding senior notes. During the three months ended March 31, 2023, we made cash payments of $312 million and $920 million for income taxes and interest on our outstanding debt, respectively. Cash required for interest payments has increased significantly as a result of the Merger.
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Cash Flows
The following table presents changes in cash and cash equivalents (in millions).
 Three Months Ended March 31,
 20232022
Cash, cash equivalents, and restricted cash, beginning of period$3,930 $3,905 
Cash (used in) provided by operating activities(631)323 
Cash (used in) provided by investing activities(257)529 
Cash used in financing activities(432)(587)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash29 (5)
Net change in cash, cash equivalents, and restricted cash(1,291)260 
Cash, cash equivalents, and restricted cash, end of period$2,639 $4,165 
Operating Activities
Cash (used in) provided by operating activities was $(631) million and $323 million during the three months ended March 31, 2023 and 2022, respectively. The decrease in cash provided by operating activities was primarily attributable to a negative fluctuation in working capital activity and a decrease in net income, excluding non-cash items.
Investing Activities
Cash (used in) provided by investing activities was $(257) million and $529 million during the three months ended March 31, 2023 and 2022, respectively. The decrease in cash provided by investing activities was primarily attributable to less proceeds received from the unwind and settlement of derivative instruments and increased purchases of property and equipment during the three months ended March 31, 2023.
Financing Activities
Cash used in financing activities was $432 million and $587 million during the three months ended March 31, 2023 and 2022, respectively. The decrease in cash used in financing activities was primarily attributable to less net debt activity during the three months ended March 31, 2023.
Capital Resources
As of March 31, 2023, capital resources were comprised of the following (in millions).
 March 31, 2023
 Total
Capacity		Outstanding
Indebtedness		Unused
Capacity
Cash and cash equivalents$2,594 $— $2,594 
Revolving credit facility and commercial paper program6,000 — 6,000 
Term loans2,500 2,500 — 
Senior notes (a)
46,715 46,715 — 
Total$57,809 $49,215 $8,594 
(a) Interest on the senior notes is paid annually or semi-annually. Our senior notes outstanding as of March 31, 2023 had interest rates that ranged from 1.90% to 9.15% and will mature between 2023 and 2062.
We expect that our cash balance, cash generated from operations and availability under the Credit Agreements will be sufficient to fund our cash needs for both the short-term and the long-term. Our borrowing costs and access to capital markets can be affected by short and long-term debt ratings assigned by independent rating agencies which are based, in part, on our performance as measured by credit metrics such as interest coverage and leverage ratios.
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As of March 31, 2023, we held $2.4 billion of our $2.6 billion of cash and cash equivalents in our foreign subsidiaries. The 2017 Tax Act features a participation exemption regime with current taxation of certain foreign income and imposes a mandatory repatriation toll tax on unremitted foreign earnings. Notwithstanding the U.S. taxation of these amounts, we intend to continue to reinvest these funds outside of the U.S. Our current plans do not demonstrate a need to repatriate them to the U.S. However, if these funds were to be needed in the U.S., we would be required to accrue and pay non-U.S. taxes to repatriate them. The determination of the amount of unrecognized deferred income tax liability with respect to these undistributed foreign earnings is not practicable.
Summarized Guarantor Financial Information
Basis of Presentation
As of March 31, 2023 and December 31, 2022, all of the Company’s outstanding $13.8 billion registered senior notes have been issued by DCL, a wholly owned subsidiary of the Company, and guaranteed by the Company, Scripps Networks, and WarnerMedia Holdings, Inc. As of March 31, 2023, the Company also has outstanding $31.5 billion of senior notes issued by WarnerMedia Holdings, Inc. and guaranteed by the Company, Scripps and DCL; $1.4 billion of senior notes issued by the legacy WarnerMedia Business (not guaranteed); and approximately $23 million of un-exchanged senior notes issued by Scripps Networks (not guaranteed). (See Note 9 to the accompanying consolidated financial statements.) DCL primarily includes the Discovery Channel and TLC networks in the U.S. DCL is a wholly owned subsidiary of the Company. Scripps Networks is also wholly owned by the Company.
The tables below present the summarized financial information as combined for Warner Bros. Discovery, Inc. (the “Parent”), Scripps Networks, DCL, and WarnerMedia Holdings, Inc. (collectively, the “Obligors”). All guarantees of DCL and WarnerMedia Holdings, Inc.’s senior notes (the “Note Guarantees”) are full and unconditional, joint and several and unsecured, and cover all payment obligations arising under the senior notes.
Note Guarantees issued by Scripps Networks, DCL or WarnerMedia Holdings, Inc., or any subsidiary of the Parent that in the future issues a Note Guarantee (each, a “Subsidiary Guarantor”) may be released and discharged (i) concurrently with any direct or indirect sale or disposition of such Subsidiary Guarantor or any interest therein, (ii) at any time that such Subsidiary Guarantor is released from all of its obligations under its guarantee of payment, (iii) upon the merger or consolidation of any Subsidiary Guarantor with and into DCL, WarnerMedia Holdings, Inc. or the Parent or another Subsidiary Guarantor, as applicable, or upon the liquidation of such Subsidiary Guarantor and (iv) other customary events constituting a discharge of the Obligors’ obligations.
Summarized Financial Information
The Company has included the accompanying summarized combined financial information of the Obligors after the elimination of intercompany transactions and balances among the Obligors and the elimination of equity in earnings from and investments in any subsidiary of the Parent that is a non-guarantor (in millions).
March 31, 2023December 31, 2022
Current assets$1,262 $1,949 
Non-guarantor intercompany trade receivables, net164 112 
Noncurrent assets5,774 5,785 
Current liabilities3,789 1,095 
Noncurrent liabilities45,663 48,839 
Three Months Ended March 31, 2023
Revenues$489 
Operating income117 
Net income(340)
Net income available to Warner Bros. Discovery, Inc.(342)
MATERIAL CASH REQUIREMENTS FROM KNOWN CONTRACTUAL AND OTHER OBLIGATIONS
In the normal course of business, we enter into commitments for the purchase of goods or services that require us to make payments or provide funding in the event certain circumstances occur. Contractual commitments have not increased significantly compared to our commitments set forth in “Material Cash Requirements from Known Contractual and Other Obligations” in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Form 10-K.
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RELATED PARTY TRANSACTIONS
In the ordinary course of business, we enter into transactions with related parties, primarily the Liberty Group and our equity method investees. (See Note 15 to the accompanying consolidated financial statements.)
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
Our critical accounting policies and estimates have not changed since December 31, 2022. For a discussion of each of our critical accounting estimates listed below, including information and analysis of estimates and assumptions involved in their application, see “Critical Accounting Policies and Estimates” included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Form 10-K:
•Uncertain tax positions;
•Goodwill and intangible assets;
•Content rights;
•Consolidation; and
•Revenue recognition
NEW ACCOUNTING AND REPORTING PRONOUNCEMENTS
We adopted certain new accounting and reporting standards during the three months ended March 31, 2023. (See Note 1 to the accompanying consolidated financial statements.)
CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this Quarterly Report on Form 10-Q constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our business, marketing and operating strategies, integration of acquired businesses, new service offerings, financial prospects and anticipated sources and uses of capital. Words such as “anticipate,” “assume,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “potential,” “predict,” “project,” “strategy,” “target” and similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will” and “would,” among other terms of similar substance used in connection with any discussion of future operating or financial performance identify forward-looking statements. Where, in any forward-looking statement, we express an expectation or belief as to future results or events, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the expectation or belief will result or be accomplished. The following is a list of some, but not all, of the factors that could cause actual results or events to differ materially from those anticipated:
•potential unknown liabilities, adverse consequences or unforeseen increased expenses associated with the WarnerMedia Business or our efforts to integrate the WarnerMedia Business;
•inherent uncertainties involved in the estimates and assumptions used in the preparation of financial forecasts;
•our level of debt, including the significant indebtedness incurred in connection with the acquisition of the WarnerMedia Business, and our future compliance with debt covenants;
•more intense competitive pressure from existing or new competitors in the industries in which we operate;
•reduced spending on domestic and foreign television advertising, due to macroeconomic trends, industry trends or unexpected reductions in our number of subscribers;
•industry trends, including the timing of, and spending on, sports programming, feature film, television and television commercial production;
•market demand for foreign first-run and existing content libraries;
•negative publicity or damage to our brands, reputation or talent;
•uncertainties associated with product and service development and market acceptance, including the development and provision of programming for new television and telecommunications technologies, and the success of our streaming services;
•realizing direct-to-consumer subscriber goals;
•general economic and business conditions, including the impact of the ongoing COVID-19 pandemic, fluctuations in foreign currency exchange rates, and political unrest in the international markets in which we operate;
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•the possibility or duration of an industry-wide strike, player lock-outs or other job action affecting a major entertainment industry union, athletes or others involved in the development and production of our sports programming, television programming, feature films and interactive entertainment (e.g., games) who are covered by collective bargaining agreements;
•disagreements with our distributors or other business partners;
•continued consolidation of distribution customers and production studios;
•theft of our content and unauthorized duplication, distribution and exhibition of such content;
•threatened or actual cyber-attacks and cybersecurity breaches; and
•changes in, or failure or inability to comply with, laws and government regulations, including, without limitation, regulations of the Federal Communications Commission and similar authorities internationally and data privacy regulations and adverse outcomes from regulatory proceedings.
These risks have the potential to impact the recoverability of the assets recorded on our balance sheets, including goodwill and other intangibles. Additionally, many of these risks are amplified by and may, in the future, continue to be amplified by the prolonged impact of the COVID-19 pandemic. Management’s expectations and assumptions, and the continued validity of any forward-looking statements we make, cannot be foreseen with certainty and are subject to change due to a broad range of factors affecting the U.S. and global economies and regulatory environments, factors specific to Warner Bros. Discovery, and other factors described under Part I, Item 1A, “Risk Factors,” in our 2022 Form 10-K. These forward-looking statements and such risks, uncertainties, and other factors speak only as of the date of this Quarterly Report, and we expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions, or circumstances on which any such statement is based.
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
Quantitative and qualitative disclosures about our existing market risk are set forth in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in the 2022 Form 10-K. Our exposures to market risk have not changed materially since December 31, 2022.
ITEM 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of March 31, 2023, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
During the three months ended March 31, 2023, there were no changes in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
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 or intellectual property. However, a determination as to the amount of the accrual required for such contingencies is highly subjective and requires judgments about future events. 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 believe that the resolution of these matters will have a material adverse effect on our consolidated financial position, future results of operations, or cash flows.
Between September 23, 2022 and October 24, 2022, two purported class action lawsuits (Collinsville Police Pension Board v. Discovery, Inc., et al., Case No. 1:22-cv-08171; Todorovski v. Discovery, Inc., et a., Case No. 1:22-cv-09125) were filed in the United States District Court for the Southern District of New York. The complaints named Warner Bros. Discovery, Inc., Discovery, Inc., David Zaslav, and Gunnar Wiedenfels as defendants. The complaints generally alleged that the defendants made false and misleading statements in SEC filings and in certain public statements relating to the Merger, in violation of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, and sought damages and other relief. On November 4, 2022, the court consolidated the Collinsville and Todorovski complaints under case number 1:22-CV-8171, and on December 12, 2022, the court appointed lead plaintiffs and lead counsel. On February 15, 2023, the lead plaintiffs filed an amended complaint adding Advance/Newhouse Partnership and Advance/Newhouse Programming Partnership (collectively, “Advance/Newhouse”), Steven A. Miron, Robert J. Miron, and Steven O. Newhouse as defendants. The amended complaint continues to assert violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, and seeks damages and other relief. On April 7, 2023, defendants moved to dismiss the amended complaint. The Company intends to vigorously defend these litigations.
On December 2, 2022, a purported class action and derivative lawsuit (Monroe County Employees’ Retirement System, Plumbers Local Union No. 519 Pension Trust Fund, and Davant Scarborough v. David M. Zaslav, et al., Case No. 2022-1115-JTL) was filed in the Delaware Court of Chancery (the “Monroe County Action”). The Monroe County Action named certain of the Company’s directors and officers, Advance/Newhouse, and AT&T as defendants. The Monroe County Action generally alleged that former directors and officers of Discovery and Advance/Newhouse breached their fiduciary duties in connection with the Merger, and that AT&T aided and abetted these alleged breaches of fiduciary duties. The Monroe County Action sought damages and other relief.
Also on December 2, 2022, a separate purported class action lawsuit (Bricklayers Pension Fund of Western Pennsylvania v. Advance/Newhouse Partnership, Case No. 2022-1114-JTL) was filed in the Delaware Court of Chancery (the “Bricklayers Action”). The complaint in the Bricklayers Action names Advance/Newhouse and certain of the Company’s current and former directors as defendants and generally alleges that former directors of Discovery and Advance/Newhouse breached their fiduciary duties in connection with the Merger, and that Advance/Newhouse aided and abetted these alleged breaches of fiduciary duties. The Bricklayers Action seeks damages and other relief.
On January 11, 2023, the Delaware Court of Chancery consolidated the Monroe County Action and the Bricklayers Action under the caption In re Warner Bros. Discovery, Inc. Stockholders Litigation, Consolidated Case No. 2022-1114-JTL. On March 9, 2023, the court appointed the plaintiffs which filed the Bricklayers Action lead plaintiffs in the consolidated action. On April 5, 2023, the court approved a stipulated briefing schedule providing that the remaining defendants in the case (Advance/Newhouse, Robert Miron, Steven Miron, and Susan Swain) would respond to the complaint originally filed in the Bricklayers Action by May 15, 2023.
ITEM 1A. Risk Factors
Investors should carefully review and consider the information regarding certain factors that could materially affect our business, results of operations, financial condition, and cash flows as set forth under Part I, Item 1A “Risk Factors” of the Company’s 2022 Form 10-K. Additional risks and uncertainties not presently known to us or that we currently believe not to be material may also adversely impact our business, results of operations, financial position, and cash flows.
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ITEM 6. Exhibits.
Exhibit No.Description
4.1
4.2
10.1
10.2
10.3
10.4
10.5
22
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHInline XBRL Taxonomy Extension Schema Document (filed herewith)†
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document (filed herewith)†
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document (filed herewith)†
101.LABInline XBRL Taxonomy Extension Label Linkbase Document (filed herewith)†
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document (filed herewith)†
104Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Indicates management contract or compensatory plan, contract or arrangement.
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† Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following formatted in Inline XBRL (Extensible Business Reporting Language): (i) Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022, (ii) Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022, (iii) Consolidated Statements of Comprehensive Income for the three months ended March 31, 2023 and 2022, (iv) Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022, (v) Consolidated Statement of Equity for the three months ended March 31, 2023 and 2022, and (vi) Notes to Consolidated Financial Statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
  
WARNER BROS. DISCOVERY, INC.
(Registrant)
Date: May 5, 2023  By: /s/ David M. Zaslav
   David M. Zaslav
   President and Chief Executive Officer
Date: May 5, 2023  By: /s/ Gunnar Wiedenfels
   Gunnar Wiedenfels
   Chief Financial Officer
50
                
March 8, 2023

Mr. David M. Zaslav
Chief Executive Officer and Chairman
Warner Bros. Discovery
230 Park Avenue
New York, New York 10003

Amendment to Amended and Restated Employment Agreement
Dated as of May 16, 2021

This letter amends your Amended and Restated Employment Agreement, dated May 16, 2021 (the “Agreement”), as previously amended in December 2021, to amend Paragraphs 4(b) and 4(e) thereof, to re-designate Paragraphs 4(f) and (g) as Paragraphs 4(g) and (h), respectively, to add a new Paragraph 4(f) and to amend Paragraphs 10 (a), (d) and (g), in each case as set forth below.

1. Paragraph 4(b) shall be amended to provide that, commencing with respect to calendar year 2023 and continuing with respect to each subsequent calendar year thereafter during the term of the Agreement, the amount of your Annual Bonus will be based on the achievement of quantitative objectives will be increased to 70% of the Target Annual Bonus, and the remaining 30% of the Target Annual Bonus will be based on qualitative objectives. 

2. Paragraph 4(e) shall be amended to provide that, with respect to PRSUs to be granted under such Paragraph 4(e) in each of calendar years 2023, 2024 and 2025 (the “2023-25 Annual PRSU Awards”) the performance metrics that will apply to determine the initial number of PRSUs that shall be deemed to have become vested shall be determined as otherwise provided under the current provisions of such Paragraph 4(e) (the “Base Award Objectives”), but over a performance period of not greater than two years, as established by the Compensation Committee at the time of grant (the “Initial Vested PRSUs”). Each of the 2023-25 Annual PRSU Awards granted to the Executive shall be earned only if and to the extent that (i) the Executive is employed by the Company as of the first business day of the calendar year following the calendar year in which the performance period related to the PRSU award ends or as is otherwise provided in accordance with Paragraph 10 and (ii) the Compensation Committee certifies that the performance metrics which it established for the applicable performance period associated with the corresponding 2023-25 Annual PRSU Award have been achieved. With respect to the 2023-25 Annual PRSU Awards, the Initial Vested PRSUs shall then be multiplied by a factor of between 100% and 200% of the Initial Vested PRSUs, based on performance during the applicable performance period relative to performance objectives based on financial metrics established by the Compensation Committee with respect to each such 2023-25 Annual PRSU Award and set forth in the applicable award agreement. The actual multiplier for each 2023-2025 PRSU Award granted will be determined based on achievement against specified performance objectives relative to specified levels of achievement of the applicable financial metric, each as established by the Compensation Committee, with the multiplier applicable to achievement between any two stated levels of achievement determined by mathematical interpolation. For the 2023 Annual PRSU award the applicable performance period will be calendar year 2023, and the performance metric for the multiplier will be free cash flow. Any shares issuable upon the vesting of any 2023-25 Annual PRSUs will be issued and paid in two installments: 70% immediately following determination of the total number of shares vested (but in all events in the calendar year following the calendar year in which the performance period ends); with the remainder of the vested shares issuable and payable at the earlier to occur (i) the first business day of January of the fourth calendar year beginning after the end of the applicable performance period (e.g., in January 2027 in respect of the 2023-25 Annual PRSU award granted in 2023) and (ii) six months following the termination of your employment..

3. Paragraph 4(e) shall be further amended to provide that the number of PRSUs subject to the 2023 Annual PRSU Award shall be determined by dividing the stated dollar amount of such award by $15.62, which was the closing price of a share of the Company’s common stock on February 28, 2023, which was the date on which long-term incentive awards for 2023 were granted to the Company’s other executive officers. The number of shares of common stock subject to annual PRSUs granted in




accordance with Paragraph 4(e) after 2023 will be established on the later of March 1 of that year or two business days following the date on which the Company files its Annual Report on Form 10-K for the previous year, using the closing price of the common stock on the trading day immediately prior to the grant date.

4. A new Paragraph 4(f) is added to the Agreement to read as follows:
(f)  Additional PRSUs.

    (i) In 2023, 2024 and 2025, the Executive shall be awarded additional PRSUs under the terms of the Incentive Plan and the implementing award agreements, conditioned upon the Executive being employed by the Company on the applicable grant date therefore (“Additional PRSUs”). The number of Additional PRSUs to be awarded to the Executive in each such year shall be determined by dividing $11,500,000 by the closing price of the Company’s common stock applied to determine the number of shares subject to annual PRSUs awards in the same year under Paragraph 4(e).

    The Compensation Committee shall establish a performance period not greater than two years for each Additional PRSU award. Any Additional PRSUs granted to the Executive shall be earned only if and to the extent that (i) the Executive is employed by the Company as of the first business day of the calendar year following the calendar year in which the performance period related to the PRSU award ends or as is otherwise provided in accordance with Paragraph 10 and (ii) the Compensation Committee certifies that the performance metrics which it established for the applicable performance period associated with the corresponding Additional PRSU grant have been achieved. Vesting of any Additional PRSUs shall be subject to achievement over the applicable performance period of specified performance objectives based on financial metrics established by the Compensation Committee with respect to such Additional PRSU award and set forth in the applicable award agreement. For the 2023 Additional PRSU award the applicable performance period will be calendar year 2023, and the performance metric for the multiplier will be free cash flow. Each Additional PRSU award will be subject to a payout curve (with at least threshold, target and maximum levels of performance) established by the Compensation Committee that will provide for upward or downward adjustment in the number of Additional PRSUs that will be earned, based on performance versus the applicable financial metrics. The percentage of the Additional PRSUs earned between any two stated levels of achievement shall be determined by mathematical interpolation. Upon achievement of the maximum level of performance, the number of Additional PRSUs awarded with respect to any such award shall be 200% of the Additional PRSUs awarded. The Committee shall review and certify the performance relative to the pre-determined metrics for the applicable performance period within thirty (30) days of the delivery of the audited financial statements of the Company for the last year in such performance period.

    (ii) Distribution of shares of Additional PRSUs that have vested shall be made at the same time and subject to the same schedule as applies to the 2023-25 Annual PRSUs granted with respect to the same performance period, and the Executive shall have the same rights to affect share withholding for tax purposes in respect to an Additional PRSU award as apply to PRSU awards under Paragraph 4(e). The terms and conditions of Paragraph 4(e)(iv) and (v) applicable to PRSUs shall apply on the same terms and conditions to Additional PRSUs. The number of Additional PRSUs subject to any award shall be adjusted in accordance with the terms of the Incentive Plan for occurrences such as stock splits, recapitalizations, etc., in order to maintain the expected economics of the Additional PRSU grant provided herein

5. The last three sentences of Paragraph 10(a) and the last three sentences of the penultimate subparagraph of Paragraph 10(d) shall not apply with respect to any 2023-25 Annual PRSU award or any Additional PRSU award. In the event of your death or Disability, all 2023-25 Annual PRSUs and Additional PRSUs that have previously been granted and as to which the performance period has not
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ended (an “Outstanding Granted Award”) will be deemed to have vested in the maximum number of shares (i.e., at the 200% level) that would be payable under any such award assuming performance was achieved at the maximum level as to all the applicable performance objectives, including those applicable to the vesting of the Initial Vested PRSUs, the multiplier on the 2023-25 Annual Performance Awards and the performance objectives applicable to the Additional PRSUs. In the event of the termination of your employment due to death, all of the shares related to any Outstanding Granted Award will be paid out promptly (and in all events within 30 days) upon becoming vested. In the event of your Disability, 70% of the shares related to any Outstanding Granted Award will be paid out promptly (and in all events within 30 days) upon becoming vested, with the remaining 30% of such shares payable at the time at which such amounts would have been payable under Paragraph 4(e) or 4(f).

6. The first paragraph of Paragraph 10(g) is deleted and replaced in its entity with the following two paragraphs:
If the Executive remains employed by the Company (or its successor) for thirty (30) days following a Change in Control, then any PRSUs, other than any Outstanding Granted Awards, which have been granted and as to which the performance period has not lapsed (the “Outstanding Basic PRSUs”) and the granted and unvested Stock Options will become fully vested as of the thirtieth day following the Change in Control, with the number of PRSUs subject to accelerated vesting with respect to the Outstanding Basic PRSUs deemed vested assuming achievement of the maximum level of performance under any such award, regardless of actual performance.
In the event the Executive’s employment is terminated (i) other than for Cause or for Good Reason (pursuant to subparagraph 10(c)) within sixty (60) days following a Change in Control, or (ii) voluntarily by the Executive within the 30 calendar days commencing on the thirty-first day following a Change in Control, then
(i)     the Executive shall be treated as if his employment was terminated pursuant to subparagraph 10(c) except that (A) the Outstanding Basic PRSUs shall be earned at the maximum level performance, regardless of actual performance, and the underlying PRSUs shall be distributed immediately to the extent permissible under IRC 409A, (B) any Outstanding Granted PRSUs will be deemed to have vested in the maximum number of shares (i.e., at the 200% level) that would be payable under any such award assuming performance was achieved at the maximum level as to the Base Award Objectives, the multiplier on the 2023-25 Annual Performance Awards and the performance objectives applicable to the Additional PRSUs, and (C) the Stock Options will become fully vested and immediately exercisable. The portion of any PRSUs that vest pursuant to this Paragraph 10(c)(i) that would have been paid promptly following vesting under Paragraph 4(e) or 4(f) will be paid out promptly (and in all events within 30 days) upon becoming vested, with the remaining vested shares payable at the time at which such remaining amounts would have been payable under Paragraph 4(e) or 4(f); and
(ii)     shall be paid, within ten days following the date his employment terminates, in consideration of the Executive’s right to have received any 2023-25 Annual PRSU and any Additional PRSU award that had not been granted on or before the date of the Change of Control, and in addition to any amounts otherwise payable in accordance with Paragraph 10(c), a cash amount equal to twice the stated grant value of each such yet to be granted 2023-25 Annual PRSU and Additional PRSU award, in each case as set forth in Paragraph 4(e) or 4(f), as applicable.

    In the event that there shall occur a Change in Control solely due to the occurrence of a change in the Incumbent Directors as specified in clause (B) of the definition of Change in Control set forth below (a “Majority Board Change”), and the Executive’s employment is not
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terminated by the Company without Cause or by the Executive for Good Reason within 60 days following such Majority Board Change, the Executive

(i)     shall receive with respect to each Outstanding Granted Award that number of shares of common stock equal to 150% of the number of Annual PRSUs or Additional PRSUs granted in respect of each such award, regardless of actual performance. In either such instance, 70% of such number of vested shares of common stock will be paid out promptly (and in all events within 30 days) upon becoming vested and payable, with the remaining 30% payable at the time at which such amounts would have been payable under Paragraph 4(e) or 4(f); and

(ii) shall be paid, within 75 days following the date of the Majority Board Change, in consideration of the Executive’s right to receive any 2023-25 Annual PRSU and any Additional PRSU award that had not been granted on or before the date of the Change of Control, a cash amount equal to 150% of the stated grant value of each such 2023-25 Annual PRSU and Additional PRSU yet to be granted award, in each case as set forth in Paragraph 4(e) or 4(f), as applicable.

If the Executive receives vested shares of common stock or a payment in cash with respect to 2023-25 Annual PRSUs or Additional PRSUs by reason of a Majority Board Change, such amounts shall be in full and complete satisfaction of his right in respect of such awards and the Executive shall have no continuing rights in respect of any such 2023-25 Annual Award or Additional PRSU Awards.

    7. The definition of the term Incentive Plan in the Agreement shall be revised to read as follows:

Incentive Plan shall mean the Company’s 2013 Incentive Plan, as amended and restated, the Company’s Stock Incentive Plan, or any successor equity incentive plan approved by the Company’s shareholders and as in effect at the relevant time.

    8. Except as specified above, the Agreement shall otherwise continue in accordance with its terms and, in the event of any conflict between the terms contained herein and the Agreement, the terms contained herein shall govern. Defined terms used, but not defined, in this letter have the meanings ascribed thereto in the Agreement.

*    *    *    *

If you agree that the foregoing sets forth our full understanding regarding the amendment of the Agreement, please evidence your agreement and acceptance by counter-signing two copies of this letter where indicated below, returning one executed copy to me.

 
WARNER BROS. DISCOVERY INC.

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By: /s/ Adria Alpert Romm 
Adria Alpert Romm
Chief People and Culture Officer
AGREED AND ACCEPTED: 
 

/s/ David Zaslav
David M. Zaslav

March 8, 2023
  
  
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2023 ZASLAV ANNUAL PRSU GRANT

David M. Zaslav

Dear David,            

Congratulations, you have been awarded a performance restricted stock unit (“PRSU”) in recognition of your contributions to the success of Warner Bros. Discovery, Inc. (the “Company”) and as described in your employment agreement with the Company dated as of May 16, 2021, and the amendment to the employment agreement dated as of March 8, 2023, (as amended, the “2021 Employment Agreement”). A PRSU entitles you to receive a number of shares of the Company’s common stock at a future date, based on a pre-determined formula, assuming that you satisfy the conditions of the Plan and the implementing agreement. We would like you to have an opportunity to share in the continued success of the Company through this PRSU under the Warner Bros. Discovery, Inc. Stock Incentive Plan (the “Plan”). The following represents a brief description of your grant. Additional details regarding your PRSU are provided in the attached Performance Restricted Stock Unit Agreement (the “Grant Agreement”) and in the Plan.

PRSU Grant Summary

Date of Grant3/8/2023
Target Value$12,000,000
Shares Subject to Vesting Upon Satisfaction of Base Performance ObjectivesUp to 192,062 shares of the Company’s Common Stock that will vest based on achievement of financial (quantitative) metrics set forth on Appendix A
Up to 576,185 shares of the Company’s Common Stock that will vest based on achievement of strategic (qualitative) metrics set forth on Appendix A
Vesting Schedule
Up to 200% as of the shares certified by the Compensation Committee of the Board of Directors based on achievement of the Base Performance Objective, as well as achievement of the Upside Enhancement performance metrics in Appendix A, subject to the terms of the Plan and Grant Agreement. The “Vesting Date” will be the date of such certification.
Performance ConditionsSee Appendix A.


•You have been granted a PRSU for shares (“Shares”) of Warner Bros. Discovery, Inc. Common Stock for the number of Shares specified under “PRSU Shares” in the chart.
•The potential value of your PRSU increases if the price of the Company’s stock increases, but you also have to continue to work for the Company (except as the Grant Agreement and 2021 Employment Agreement provide) to actually receive such value. Of course, the value of the stock may go up and down over time.
•You will not receive the Shares represented by the PRSU until the PRSU vests. Your PRSU vests as provided in the chart above under “Vesting Schedule,” assuming you remain an employee of the Company and subject to the terms in the Grant Agreement.
•Once you have received the Shares, you will own the Shares and may decide whether to hold the Shares, sell the Shares or give the Shares to someone as a gift.


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Please note the Clawback section of the Grant Agreement, which reflects an important policy of ours. The Compensation Committee of our Board of Directors has determined that awards made under the Plan are subject to a clawback in certain circumstances. By accepting this award, you agree that the Compensation Committee may change the Clawback section of any or all of the grant agreements from time to time without your further consent to reflect changes in law or company policy.

You can access the Employee Connect portal for updates and information or call the Stock Plan Administrator at +1 865-560-3957 with any questions.
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WARNER BROS. DISCOVERY, INC.
PERFORMANCE RESTRICTED STOCK UNIT GRANT AGREEMENT
FOR DAVID ZASLAV


    Warner Bros. Discovery, Inc. (the “Company”) has granted you a performance restricted stock unit (the “PRSU”) under the Warner Bros. Discovery, Inc. Stock Incentive Plan (the “Plan”). The PRSU affords you the opportunity to receive a number of shares (“Shares”) of the Company’s Common Stock (the “PRSU Shares”) based on a pre-determined formula upon satisfaction of the conditions to receipt.    

    The individualized communication you received (the “Cover Letter”) provides the details of your PRSU award. It specifies the number of PRSU Shares, the Date of Grant, the schedule for vesting, and the Vesting Date.

    The PRSU is subject in all respects to the applicable provisions of the Plan. This Grant Agreement does not cover all of the rules that apply to the PRSU under the Plan; please refer to your 2021 Employment Agreement and the Plan document. Capitalized terms are defined either in the Cover Letter, further below in this grant agreement (the “Grant Agreement”), in the 2021 Employment Agreement, or in the Plan.





















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The Plan document is available on the Fidelity web site. The Prospectus for the Plan, the Company’s S-8, Annual Report on Form 10-K, and other filings the Company makes with the Securities and Exchange Commission are available for your review on the Company’s web site. You may also obtain paper copies of these documents upon request to the Company’s People & Culture department.

Neither the Company nor anyone else is making any representations or promises regarding the duration of your service, vesting of the PRSU, the value of the Company's stock or of this PRSU, or the Company's prospects. The Company is not providing any advice regarding tax consequences to you or regarding your decisions regarding the PRSU. You agree to rely only upon your own personal advisors.

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No one may sell, transfer, or distribute the PRSU or the securities that may be received under it without an effective registration statement relating thereto or an opinion of counsel satisfactory to Warner Bros. Discovery, Inc. or other information and representations satisfactory to it that such registration is not required.
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In addition to the Plan’s terms and restrictions, the following terms and restrictions apply:

1.    Vesting Schedule. Your PRSU becomes nonforfeitable (“Vested”) as provided in the Cover Letter and the Grant Agreement assuming you remain employed by the Company until December 31, 2023 and the performance metric(s) for the one-year period beginning January 1, 2023 and ending December 31, 2023 (the “Performance Period”) are satisfied. For purposes of this Grant Agreement, employment with the Company will include employment with any Subsidiary whose employees are then eligible to receive Awards under the Plan (provided that a later transfer of employment to an ineligible Subsidiary will not terminate employment unless the Compensation Committee of the Board of Directors (the “Committee” of the “Board”)) determines otherwise).

If your employment is terminated by the Company without “Cause” or by you for “Good Reason”, in each case before the Vesting Date, the PRSU will become Vested at 200% of target, regardless of actual performance, subject to the Release requirements described below, with 70% of the vested shares (the “Immediate Delivery Shares”) distributed immediately, and in no event later than 30 days after vesting (“Immediate Delivery”), and the remaining 30% of the vested shares (“Delayed Delivery Shares”) distributed on the earlier to occur of (i) the third anniversary of the vesting date or (ii) the six month anniversary of your termination of employment (such earlier date, the “Delayed Delivery Shares Distribution Date”).

If your employment ends as a result of death or as a result of your Disability, in each case before the Vesting Date, the PRSU will become Vested at 200% of target, regardless of actual performance, and (i) in the event of your death, 100% of the vested shares will be subject to Immediate Delivery and (ii) subject to the Release requirements described below, in the event of a termination due to Disability, the Immediate Delivery Shares shall be subject to Immediate Delivery and the Delayed Delivery Shares shall be distributed at the Delayed Delivery Shares Distribution Date.

Distribution in respect of any PRSU Shares because of a termination as described in this section will be subject to the Release requirements in the 2021 Employment Agreement, where applicable in connection with a termination without Cause, resignation for Good Reason, or Disability. The PRSU will be frozen, if not already fully Vested, between the date your employment ends and the date your Release requirement is met (or the deadline for providing the Release expires), at which point the PRSU will be forfeited if the Release has not become irrevocable. Any Distribution Date falling between the date your employment ends and the deadline for providing an irrevocable Release will be delayed until the last day of the period for providing an irrevocable Release.

“Cause,” “Good Reason,” and “Disability” have the meanings provided in your 2021 Employment Agreement.

2. Change in Control. Notwithstanding the Plan’s provisions, if a “Change in Control” (as defined in the 2021 Employment Agreement) occurs before the PRSU is vested and before December 31, 2023, the PRSU shall be treated as follows. 

(a)If you remain employed by the Company (or its successor) for sixty (60) days following a Change in Control that results from the Incumbent Directors ceasing to constitute a majority of the members of the Board within any 12 month period, then the outstanding PRSUs (for which the performance period has not expired) will become Vested at 150% of target as of such sixtieth day following the Change in Control, regardless of actual performance, and the Immediate Delivery Shares shall be subject to Immediate Delivery and the Delayed Delivery Shares shall be distributed at the Delayed Delivery Shares Distribution Date.
                                





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(b)In the event your employment is terminated (i) by you for Good Reason or by the Company other than for Cause within sixty (60) days following a Change in Control, or (ii) you resign voluntarily within the 30 calendar days commencing on the thirty-first day following a Change in Control, then subject to the Release requirement, the outstanding PRSUs (for which the performance period has not expired) will become Vested at 200% of target as of thirty days after the Change in Control, regardless of actual performance, and the Immediate Delivery Shares shall be subject to Immediate Delivery and the Delayed Delivery Shares shall be distributed at the Delayed Delivery Shares Distribution Date.

“Incumbent Directors” shall have the meaning provided in your 2021 Employment Agreement.

Distribution in respect of any PRSU Shares because of a Change in Control and your subsequent termination of employment as described in this section will be subject to any applicable Release requirements in the 2021 Employment Agreement. The PRSU will be frozen, if not already fully Vested, between the date your employment ends and the date your Release requirement is met (or the deadline for providing the Release expires), at which point the PRSU will be forfeited if the Release has not become irrevocable. Any Distribution Date falling between the date your employment ends and the deadline for providing an irrevocable Release will be delayed until the last day of the period for providing an irrevocable Release.

3.    Distribution Date. Subject to any overriding provisions in the Plan or Section 1 or 2 above, you will receive a distribution of the Shares equivalent to your Vested PRSU Shares based on the following schedule (each such delivery date being a “Distribution Date”) unless, in each case, the Committee determines that you may make a timely deferral election to defer distribution to a later date and you have made such an election (in which case the deferred date will be the Distribution Date):

(a)70% of your Vested PRSU Shares, the Immediate Delivery Shares will be paid in 2024, after the performance conditions are determined to be satisfied (pursuant to Appendix A); and
(b)30% of your Vested PRSU Shares, the Delayed Delivery Shares will be paid in 2027, as soon as practicable after the beginning of the year or, if earlier, six months following the date of your termination of employment

If the Vesting Date occurs because of your death, your designated beneficiary or estate will receive the PRSU Shares earned within thirty (30) days of your date of death.

4.    Adjustments. Notwithstanding the foregoing, if within five years of the close of the Performance Period, the Company’s audited financial statement for the Performance Period is restated, the Committee shall determine whether, and the extent to which, the performance conditions described in Appendix A were satisfied based on the restated financial statements. If the Committee determines that the Company delivered too few Shares to you on the original Distribution Date(s), you will be entitled to receive (without interest or other adjustment for the passage of time) additional Shares; such Shares, together with any previously distributed Shares, shall not exceed the total number of PRSU Shares granted under this Grant Agreement. If the Committee determines that the Company delivered too many Shares to you on the original Distribution Date(s), you will be required to deliver to the Company (without interest or other adjustment for the passage of time) the excess Shares previously delivered as soon as practicable after notice by the Committee. In the event the person (either you or the Company) required to deliver Shares under the foregoing provisions is entitled to receive future payments (other than payments constituting “deferred compensation” under Section 409A) from the person entitled to receive delivery of Shares under the foregoing provisions, then the person required to make the delivery of Shares under the foregoing provisions may reduce the number of Shares due under the foregoing provisions by a number of Shares which have a fair market value equal to the value of the future payment to be received from the other person. If you receive any additional
                                





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Vested PRSU Shares pursuant to this section, such Shares will be distributed to you within 30 days after the Committee’s determination based on the restated audited financial statements.

5.    Clawback. Notwithstanding the provisions in Section 4 with respect to Adjustments, if the Company’s Board of Directors or the Committee determines, in its sole discretion, that you engaged in fraud or misconduct as a result of which or in connection with which the Company is required to or decides to restate its financial statements, the Committee may, in its sole discretion, impose any or all of the following:

(a) Immediate expiration of the PRSU, whether vested or not, if granted within the first 12 months after issuance or filing of any financial statement that is being restated (the “Recovery Measurement Period”); and

(b) Payment or transfer to the Company of the Gain from the PRSU, where the “Gain” consists of the greatest of (i) the value of the PRSU Shares on the applicable Distribution Date on which you received them within the Recovery Measurement Period, (ii) the value of PRSU Shares received during the Recovery Measurement Period, as determined on the date of the request by the Committee to pay or transfer, (iii) the gross (before tax) proceeds you received from any sale of the PRSU Shares during the Recovery Measurement Period, and (iv) if transferred without sale during the Recovery Measurement Period, the value of the PRSU Shares when so transferred. The amount paid or transferred to the Company shall be adjusted to reflect any adjustment to the number of Shares finally awarded after application of the “Adjustments” provisions above.

This remedy is in addition to any other remedies that the Company may have available in law or equity.

Payment is due in cash or cash equivalents within 10 days after the Committee provides notice to you that it is enforcing this clawback. Payment will be calculated on a gross basis, without reduction for taxes or commissions. The Company may, but is not required to, accept retransfer of Shares in lieu of cash payments.

6.    Restrictions and Forfeiture. You may not sell, assign, pledge, encumber, or otherwise transfer any interest (“Transfer”) in the PRSU Shares until the PRSU Shares are distributed to you. Any attempted Transfer that precedes the Distribution Date is invalid.

Unless the Board determines otherwise or the Grant Agreement provides otherwise, if your employment or service with the Company terminates for any reason before your PRSU is Vested, then you will forfeit the PRSU (and the Shares to which they relate) to the extent that the PRSU does not otherwise vest on or after your termination, pursuant to the rules in the Vesting Schedule section. You forfeit any unvested portions of the PRSU immediately if the Company terminates your employment for Cause or if you resign your employment other than for Good Reason. You also forfeit any unvested portion of the PRSU immediately upon the date for certification of the performance metrics for the Performance Period if and to the extent the performance metrics are not then satisfied and no Change in Control has occurred. The forfeited portions of the PRSU will then immediately revert to the Company. You will receive no payment for the PRSU if you forfeit it.

7.    Limited Status. You understand and agree that the Company will not consider you a shareholder for any purpose with respect to the PRSU Shares, unless and until the PRSU Shares have been issued to you on the Distribution Date. You will not receive dividends with respect to the PRSU.

8.    Voting. You may not vote the PRSU. You may not vote the PRSU Shares unless and until the Shares are distributed to you.

                                





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9.    Taxes and Withholding. The PRSU provides tax deferral, meaning that the PRSU Shares are not taxable until you actually receive the PRSU Shares on or around the Distribution Date. You will then owe taxes at ordinary income tax rates as of the Distribution Date at the PRSU Shares' value. As an employee of the Company, you may owe FICA and HI (Social Security and Medicare) taxes before the Distribution Date.

Issuing the Shares under the PRSU is contingent on your satisfaction of all obligations with respect to required tax or other required withholdings (for example, in the U.S., Federal, state, and local taxes). You may satisfy the obligations by directing the Company to reduce the number of PRSU Shares to be issued to you by up to that number of PRSU Shares (valued at their Fair Market Value on the Distribution Date) that would equal all taxes required to be withheld (at their minimum withholding levels or such higher level as you request (up to 5% in excess of the minimum withholding level or your estimated marginal tax rate for the year of payment, whichever is greater)), providing that any minimum withholding requirements not satisfied in the foregoing manner must be satisfied in a manner acceptable to the Committee, which could include accepting payment of the withholdings from a broker in connection with a sale of the PRSU Shares or directly from you. If a fractional share remains after deduction for required withholding, the Company will pay you the value of the fraction in cash.

10.    Compliance with Law. The Company will not issue the PRSU Shares if doing so would violate any applicable Federal or state securities laws or other laws or regulations. You may not sell or otherwise dispose of the PRSU Shares in violation of applicable law.

11.    Additional Conditions to Receipt. The Company may postpone issuing and delivering any PRSU Shares for so long as the Company determines to be advisable to satisfy the following:
        
(a) its completing or amending any securities registration or qualification of the PRSU Shares or its or your satisfying any exemption from registration under any Federal or state law, rule, or regulation;

(b) its receiving proof it considers satisfactory that a person seeking to receive the PRSU Shares after your death is entitled to do so;

(c) your complying with any requests for representations under the Plan; and

(d) your complying with any Federal, state, or local tax withholding obligations.

12.    Additional Representations from You. If the vesting provisions of the PRSU are satisfied and you are entitled to receive PRSU Shares at a time when the Company does not have a current registration statement (generally on Form S-8) under the Securities Act of 1933 (the “Act”) that covers issuances of shares to you, you must comply with the following before the Company will issue the PRSU Shares to you. You must:

(a) represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the PRSU Shares for your own account and not with a view to reselling or distributing the PRSU Shares; and

(b) agree that you will not sell, transfer, or otherwise dispose of the PRSU Shares unless:
    
(i) a registration statement under the Act is effective at the time of disposition with respect to the PRSU Shares you propose to sell, transfer, or otherwise dispose of; or

(ii) the Company has received an opinion of counsel or other information and representations it considers satisfactory to the effect that, because of Rule 144 under the Act or otherwise, no registration under the Act is required.
                                





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13.    No Effect on Employment or Other Relationship. Nothing in this Grant Agreement restricts the Company’s rights or those of any of its affiliates to terminate your employment or other relationship at any time and for any or no reason. The termination of employment or other relationship, whether by the Company or any of its affiliates or otherwise, and regardless of the reason for such termination, has the consequences provided for under the Plan and any applicable employment or severance agreement or plan.

14.    No Effect on Running Business. You understand and agree that the existence of the PRSU will not affect in any way the right or power of the Company or its stockholders to make or authorize any adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stock, with preference ahead of or convertible into, or otherwise affecting the Company’s common stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether or not of a similar character to those described above.

15.    Section 409A. The PRSU is intended to comply with the requirements of Section 409A and must be construed consistently with that section. Notwithstanding anything in the Plan or this Grant Agreement to the contrary, if the PRSU Vests in connection with your “separation from service” within the meaning of Section 409A, as determined by the Company), and if (x) you are then a “specified employee” within the meaning of Section 409A at the time of such separation from service (as determined by the Company, by which determination you agree you are bound) and (y) the distribution of PRSU Shares under such accelerated PRSU will result in the imposition of additional tax under Section 409A if distributed to you within the six month period following your separation from service, then the distribution under such accelerated PRSU will not be made until the earlier of (i) the date six months and one day following the date of your separation from service or (ii) the 10th day after your date of death. Neither the Company nor you shall have the right to accelerate or defer the delivery of any such PRSU Shares or benefits except to the extent specifically permitted or required by Section 409A. In no event may the Company or you defer the delivery of the PRSU Shares beyond the date specified in the Distribution Date section, unless such deferral complies in all respects with Treasury Regulation Section 1.409A-2(b) related to subsequent changes in the time or form of payment of nonqualified deferred compensation arrangements, or any successor regulation. In any event, the Company makes no representations or warranty and shall have no liability to you or any other person, if any provisions of or distributions under this Grant Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of that section.

16.    Unsecured Creditor. The PRSU creates a contractual obligation on the part of the Company to make a distribution of the PRSU Shares at the time provided for in this Grant Agreement. Neither you nor any other party claiming an interest in deferred compensation hereunder shall have any interest whatsoever in any specific assets of the Company. Your right to receive distributions hereunder is that of an unsecured general creditor of Company.

17.    Governing Law. The laws of the State of Delaware will govern all matters relating to the PRSU, without regard to the principles of conflict of laws.

18.    Notices. Any notice you give to the Company must follow the procedures then in effect. If no other procedures apply, you must send your notice in writing by hand or by mail to the office of the Company’s Secretary (or to the Chair of the Committee). If mailed, you should address it to the Company’s Secretary (or the Chair of the Committee) at the Company’s then corporate headquarters, unless the Company directs PRSU holders to send notices to another corporate department or to a third-party administrator or specifies another method of transmitting notice. The Company and the Board will address any notices to you using its standard electronic communications methods or at your office or home address as reflected on the Company’s personnel or other business records. You and the
                                





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Company may change the address for notice by like notice to the other, and the Company can also change the address for notice by general announcements to PRSU holders.

19.    Amendment. Subject to any required action by the Board or the stockholders of the Company, the Company may cancel the PRSU and provide a new Award under the Plan in its place, provided that the Award so replaced will satisfy all of the requirements of the Plan as of the date such new Award is made and no such action will adversely affect the PRSU to the extent then Vested.

20.    Plan Governs. Wherever a conflict may arise between the terms of this Grant Agreement and the terms of the Plan, the terms of the Plan will control. The Board may adjust the number of PRSU Shares and other terms of the PRSU from time to time as the Plan provides.

                                





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2023 ZASLAV ADDITIONAL PRSU GRANT

David M. Zaslav

Dear David,            

Congratulations, you have been awarded a performance restricted stock unit (“PRSU”) in recognition of your contributions to the success of Warner Bros. Discovery, Inc. (the “Company”) and as described in your employment agreement with the Company dated as of May 16, 2021, and the amendment to the employment agreement dated as of March 8, 2023, (as amended, the “2021 Employment Agreement”). A PRSU entitles you to receive a number of shares of the Company’s common stock at a future date, based on a pre-determined formula, assuming that you satisfy the conditions of the Plan and the implementing agreement. We would like you to have an opportunity to share in the continued success of the Company through this PRSU under the Warner Bros. Discovery, Inc. Stock Incentive Plan (the “Plan”). The following represents a brief description of your grant. Additional details regarding your PRSU are provided in the attached Performance Restricted Stock Unit Agreement (the “Grant Agreement”) and in the Plan.

PRSU Grant Summary

Date of Grant3/8/2023
Target Value$11,500,000
PRSU Shares736,236 shares of the Company’s Common Stock that will vest based on achievement of financial metrics set forth on Appendix A
Vesting Schedule
Up to 200% of the number of PRSU Shares as of the certification by the Compensation Committee of the Board of Directors of achievement of the performance metrics in Appendix A, subject to the terms of the Plan and Grant Agreement. The “Vesting Date” will be the date of such certification.
Performance ConditionsSee Appendix A.


•You have been granted a PRSU for shares (“Shares”) of Warner Bros. Discovery, Inc. Common Stock for the number of Shares specified under “PRSU Shares” in the chart.
•The potential value of your PRSU increases if the price of the Company’s stock increases, but you also have to continue to work for the Company (except as the Grant Agreement and 2021 Employment Agreement provide) to actually receive such value. Of course, the value of the stock may go up and down over time.
•You will not receive the Shares represented by the PRSU until the PRSU vests. Your PRSU vests as provided in the chart above under “Vesting Schedule,” assuming you remain an employee of the Company and subject to the terms in the Grant Agreement.
•Once you have received the Shares, you will own the Shares and may decide whether to hold the Shares, sell the Shares or give the Shares to someone as a gift.


Please note the Clawback section of the Grant Agreement, which reflects an important policy of ours. The Compensation Committee of our Board of Directors has determined that awards made under the Plan are subject to a clawback in certain circumstances. By accepting this award, you agree that the Compensation Committee may change the Clawback section of any or all of the grant agreements from time to time without your further consent to reflect changes in law or company policy.

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You can access the Employee Connect portal for updates and information or call the Stock Plan Administrator at +1 865-560-3957 with any questions.
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WARNER BROS. DISCOVERY, INC.
PERFORMANCE RESTRICTED STOCK UNIT GRANT AGREEMENT
FOR DAVID ZASLAV


    Warner Bros. Discovery, Inc. (the “Company”) has granted you a performance restricted stock unit (the “PRSU”) under the Warner Bros. Discovery, Inc. Stock Incentive Plan (the “Plan”). The PRSU affords you the opportunity to receive a number of shares (“Shares”) of the Company’s Common Stock (the “PRSU Shares”) based on a pre-determined formula upon satisfaction of the conditions to receipt.

    The individualized communication you received (the “Cover Letter”) provides the details of your PRSU award. It specifies the number of PRSU Shares, the Date of Grant, the schedule for vesting, and the Vesting Date.

    The PRSU is subject in all respects to the applicable provisions of the Plan. This Grant Agreement does not cover all of the rules that apply to the PRSU under the Plan; please refer to your 2021 Employment Agreement and the Plan document. Capitalized terms are defined either in the Cover Letter, further below in this grant agreement (the “Grant Agreement”), in the 2021 Employment Agreement, or in the Plan.





















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The Plan document is available on the Fidelity web site. The Prospectus for the Plan, the Company’s S-8, Annual Report on Form 10-K, and other filings the Company makes with the Securities and Exchange Commission are available for your review on the Company’s web site. You may also obtain paper copies of these documents upon request to the Company’s People & Culture department.

Neither the Company nor anyone else is making any representations or promises regarding the duration of your service, vesting of the PRSU, the value of the Company's stock or of this PRSU, or the Company's prospects. The Company is not providing any advice regarding tax consequences to you or regarding your decisions regarding the PRSU. You agree to rely only upon your own personal advisors.

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No one may sell, transfer, or distribute the PRSU or the securities that may be received under it without an effective registration statement relating thereto or an opinion of counsel satisfactory to Warner Bros. Discovery, Inc. or other information and representations satisfactory to it that such registration is not required.
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In addition to the Plan’s terms and restrictions, the following terms and restrictions apply:

1.    Vesting Schedule. Your PRSU becomes nonforfeitable (“Vested”) as provided in the Cover Letter and the Grant Agreement assuming you remain employed by the Company until December 31, 2023 and the performance metric(s) for the one-year period beginning January 1, 2023 and ending December 31, 2023 (the “Performance Period”) are satisfied. For purposes of this Grant Agreement, employment with the Company will include employment with any Subsidiary whose employees are then eligible to receive Awards under the Plan (provided that a later transfer of employment to an ineligible Subsidiary will not terminate employment unless the Compensation Committee of the Board of Directors (the “Committee” of the “Board”)) determines otherwise).

If your employment is terminated by the Company without “Cause” or by you for “Good Reason”, in each case before the Vesting Date, the PRSU will become Vested at 200% of target, regardless of actual performance, and subject to the Release requirements described below, with 70% of the vested shares (the “Immediate Delivery Shares”) distributed immediately, and in no event later than 30 days after vesting (“Immediate Delivery”), and the remaining 30% of the vested shares (“Delayed Delivery Shares”) distributed on the earlier to occur of (i) the third anniversary of the vesting date or (ii) the six month anniversary of your termination of employment (such earlier date, the “Delayed Delivery Shares Distribution Date”).

If your employment ends as a result of death or as a result of your Disability, in each case before the Vesting Date, the PRSU will become Vested at 200% of target, regardless of actual performance, and (i) in the event of your death, 100% of the vested shares will be subject to Immediate Delivery and (ii) subject to the Release requirements described below, in the event of a termination due to Disability, the Immediate Delivery Shares shall be subject to Immediate Delivery and the Delayed Delivery Shares shall be distributed at the Delayed Delivery Shares Distribution Date..

Distribution in respect of any PRSU Shares because of a termination as described in this section will be subject to the Release requirements in the 2021 Employment Agreement, where applicable in connection with a termination without Cause, resignation for Good Reason, or Disability. The PRSU will be frozen, if not already fully Vested, between the date your employment ends and the date your Release requirement is met (or the deadline for providing the Release expires), at which point the PRSU will be forfeited if the Release has not become irrevocable. Any Distribution Date falling between the date your employment ends and the deadline for providing an irrevocable Release will be delayed until the last day of the period for providing an irrevocable Release.

“Cause,” “Good Reason,” and “Disability” have the meanings provided in your 2021 Employment Agreement.

2. Change in Control. Notwithstanding the Plan’s provisions, if a “Change in Control” (as defined in the 2021 Employment Agreement) occurs before the PRSU is vested and before December 31, 2023, the PRSU shall be treated as follows. 

(a)If you remain employed by the Company (or its successor) for sixty (60) days following a Change in Control that results from the Incumbent Directors ceasing to constitute a majority of the members of the Board within any 12 month period, then the outstanding PRSUs (for which the performance period has not expired) will become Vested at 150% of target as of such sixtieth day following the Change in Control, regardless of actual performance, and the Immediate Delivery Shares shall be subject to Immediate Delivery and the Delayed Delivery Shares shall be distributed at the Delayed Delivery Shares Distribution Date.

                                





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(b)In the event your employment is terminated (i) by you for Good Reason or by the Company other than for Cause within sixty (60) days following a Change in Control, or (ii) you resign voluntarily within the 30 calendar days commencing on the thirty-first day following a Change in Control, then subject to the Release requirement, the outstanding PRSUs (for which the performance period has not expired) will become Vested at 200% of target as of thirty days after the Change in Control, regardless of actual performance, and the Immediate Delivery Shares shall be subject to Immediate Delivery and the Delayed Delivery Shares shall be distributed at the Delayed Delivery Shares Distribution Date.

“Incumbent Directors” shall have the meaning provided in your 2021 Employment Agreement.

Distribution in respect of any PRSU Shares because of a Change in Control and subsequent termination of employment as described in this section will be subject to any applicable Release requirements in the 2021 Employment Agreement. The PRSU will be frozen, if not already fully Vested, between the date your employment ends and the date your Release requirement is met (or the deadline for providing the Release expires), at which point the PRSU will be forfeited if the Release has not become irrevocable. Any Distribution Date falling between the date your employment ends and the deadline for providing an irrevocable Release will be delayed until the last day of the period for providing an irrevocable Release.

3.    Distribution Date. Subject to any overriding provisions in the Plan or Section 1 or 2 above, you will receive a distribution of the Shares equivalent to your Vested PRSU Shares based on the following schedule (each such delivery date being a “Distribution Date”) unless, in each case, the Committee determines that you may make a timely deferral election to defer distribution to a later date and you have made such an election (in which case the deferred date will be the Distribution Date):

(a)70% of your Vested PRSU Shares, the Immediate Delivery Shares will be paid in 2024, after the performance conditions are determined to be satisfied (pursuant to Appendix A); and
(b)30% of your Vested PRSU Shares, the Delayed Delivery Shares will be paid in 2027, as soon as practicable after the beginning of the year or, if earlier, six months following the date of your termination of employment. If the Vesting Date occurs because of your death, your designated beneficiary or estate will receive the PRSU Shares earned within thirty (30) days of your date of death.

4.    Adjustments. Notwithstanding the foregoing, if within five years of the close of the Performance Period, the Company’s audited financial statement for the Performance Period is restated, the Committee shall determine whether, and the extent to which, the performance conditions described in Appendix A were satisfied based on the restated financial statements. If the Committee determines that the Company delivered too few Shares to you on the original Distribution Date(s), you will be entitled to receive (without interest or other adjustment for the passage of time) additional Shares; such Shares, together with any previously distributed Shares, shall not exceed the total number of PRSU Shares granted under this Grant Agreement. If the Committee determines that the Company delivered too many Shares to you on the original Distribution Date(s), you will be required to deliver to the Company (without interest or other adjustment for the passage of time) the excess Shares previously delivered as soon as practicable after notice by the Committee. In the event the person (either you or the Company) required to deliver Shares under the foregoing provisions is entitled to receive future payments (other than payments constituting “deferred compensation” under Section 409A) from the person entitled to receive delivery of Shares under the foregoing provisions, then the person required to make the delivery of Shares under the foregoing provisions may reduce the number of Shares due under the foregoing provisions by a number of Shares which have a fair market value equal to the value of the future payment to be received from the other person. If you receive any additional
                                





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Vested PRSU Shares pursuant to this section, such Shares will be distributed to you within 30 days after the Committee’s determination based on the restated audited financial statements.

5.    Clawback. Notwithstanding the provisions in Section 4 with respect to Adjustments, if the Company’s Board of Directors or the Committee determines, in its sole discretion, that you engaged in fraud or misconduct as a result of which or in connection with which the Company is required to or decides to restate its financial statements, the Committee may, in its sole discretion, impose any or all of the following:

(a) Immediate expiration of the PRSU, whether vested or not, if granted within the first 12 months after issuance or filing of any financial statement that is being restated (the “Recovery Measurement Period”); and

(b)    Payment or transfer to the Company of the Gain from the PRSU, where the “Gain” consists of the greatest of (i) the value of the PRSU Shares on the applicable Distribution Date on which you received them within the Recovery Measurement Period, (ii) the value of PRSU Shares received during the Recovery Measurement Period, as determined on the date of the request by the Committee to pay or transfer, (iii) the gross (before tax) proceeds you received from any sale of the PRSU Shares during the Recovery Measurement Period, and (iv) if transferred without sale during the Recovery Measurement Period, the value of the PRSU Shares when so transferred. The amount paid or transferred to the Company shall be adjusted to reflect any adjustment to the number of Shares finally awarded after application of the “Adjustments” provisions above.

This remedy is in addition to any other remedies that the Company may have available in law or equity.

Payment is due in cash or cash equivalents within 10 days after the Committee provides notice to you that it is enforcing this clawback. Payment will be calculated on a gross basis, without reduction for taxes or commissions. The Company may, but is not required to, accept retransfer of Shares in lieu of cash payments.

6.    Restrictions and Forfeiture. You may not sell, assign, pledge, encumber, or otherwise transfer any interest (“Transfer”) in the PRSU Shares until the PRSU Shares are distributed to you. Any attempted Transfer that precedes the Distribution Date is invalid.

Unless the Board determines otherwise or the Grant Agreement provides otherwise, if your employment or service with the Company terminates for any reason before your PRSU is Vested, then you will forfeit the PRSU (and the Shares to which they relate) to the extent that the PRSU does not otherwise vest on or after your termination, pursuant to the rules in the Vesting Schedule section. You forfeit any unvested portions of the PRSU immediately if the Company terminates your employment for Cause or if you resign your employment other than for Good Reason. You also forfeit any unvested portion of the PRSU immediately upon the date for certification of the performance metrics for the Performance Period if and to the extent the performance metrics are not then satisfied and no Change in Control has occurred. The forfeited portions of the PRSU will then immediately revert to the Company. You will receive no payment for the PRSU if you forfeit it.

7.    Limited Status. You understand and agree that the Company will not consider you a shareholder for any purpose with respect to the PRSU Shares, unless and until the PRSU Shares have been issued to you on the Distribution Date. You will not receive dividends with respect to the PRSU.

8.    Voting. You may not vote the PRSU. You may not vote the PRSU Shares unless and until the Shares are distributed to you.

                                





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9.    Taxes and Withholding. The PRSU provides tax deferral, meaning that the PRSU Shares are not taxable until you actually receive the PRSU Shares on or around the Distribution Date. You will then owe taxes at ordinary income tax rates as of the Distribution Date at the PRSU Shares' value. As an employee of the Company, you may owe FICA and HI (Social Security and Medicare) taxes before the Distribution Date.

Issuing the Shares under the PRSU is contingent on your satisfaction of all obligations with respect to required tax or other required withholdings (for example, in the U.S., Federal, state, and local taxes). You may satisfy the obligations by directing the Company to reduce the number of PRSU Shares to be issued to you by up to that number of PRSU Shares (valued at their Fair Market Value on the Distribution Date) that would equal all taxes required to be withheld (at their minimum withholding levels or such higher level as you request (up to 5% in excess of the minimum withholding level or your estimated marginal tax rate for the year of payment, whichever is greater)), providing that any minimum withholding requirements not satisfied in the foregoing manner must be satisfied in a manner acceptable to the Committee, which could include accepting payment of the withholdings from a broker in connection with a sale of the PRSU Shares or directly from you. If a fractional share remains after deduction for required withholding, the Company will pay you the value of the fraction in cash.

10.    Compliance with Law. The Company will not issue the PRSU Shares if doing so would violate any applicable Federal or state securities laws or other laws or regulations. You may not sell or otherwise dispose of the PRSU Shares in violation of applicable law.

11.    Additional Conditions to Receipt. The Company may postpone issuing and delivering any PRSU Shares for so long as the Company determines to be advisable to satisfy the following:
        
(a) its completing or amending any securities registration or qualification of the PRSU Shares or its or your satisfying any exemption from registration under any Federal or state law, rule, or regulation;

(b) its receiving proof it considers satisfactory that a person seeking to receive the PRSU Shares after your death is entitled to do so;

(c) your complying with any requests for representations under the Plan; and

(d) your complying with any Federal, state, or local tax withholding obligations.

12.    Additional Representations from You. If the vesting provisions of the PRSU are satisfied and you are entitled to receive PRSU Shares at a time when the Company does not have a current registration statement (generally on Form S-8) under the Securities Act of 1933 (the “Act”) that covers issuances of shares to you, you must comply with the following before the Company will issue the PRSU Shares to you. You must:

(a) represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the PRSU Shares for your own account and not with a view to reselling or distributing the PRSU Shares; and

(b) agree that you will not sell, transfer, or otherwise dispose of the PRSU Shares unless:
    
(i) a registration statement under the Act is effective at the time of disposition with respect to the PRSU Shares you propose to sell, transfer, or otherwise dispose of; or

(ii) the Company has received an opinion of counsel or other information and representations it considers satisfactory to the effect that, because of Rule 144 under the Act or otherwise, no registration under the Act is required.
                                





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13.    No Effect on Employment or Other Relationship. Nothing in this Grant Agreement restricts the Company’s rights or those of any of its affiliates to terminate your employment or other relationship at any time and for any or no reason. The termination of employment or other relationship, whether by the Company or any of its affiliates or otherwise, and regardless of the reason for such termination, has the consequences provided for under the Plan and any applicable employment or severance agreement or plan.

14.    No Effect on Running Business. You understand and agree that the existence of the PRSU will not affect in any way the right or power of the Company or its stockholders to make or authorize any adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issuance of bonds, debentures, preferred or other stock, with preference ahead of or convertible into, or otherwise affecting the Company’s common stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether or not of a similar character to those described above.

15.    Section 409A. The PRSU is intended to comply with the requirements of Section 409A and must be construed consistently with that section. Notwithstanding anything in the Plan or this Grant Agreement to the contrary, if the PRSU Vests in connection with your “separation from service” within the meaning of Section 409A, as determined by the Company), and if (x) you are then a “specified employee” within the meaning of Section 409A at the time of such separation from service (as determined by the Company, by which determination you agree you are bound) and (y) the distribution of PRSU Shares under such accelerated PRSU will result in the imposition of additional tax under Section 409A if distributed to you within the six month period following your separation from service, then the distribution under such accelerated PRSU will not be made until the earlier of (i) the date six months and one day following the date of your separation from service or (ii) the 10th day after your date of death. Neither the Company nor you shall have the right to accelerate or defer the delivery of any such PRSU Shares or benefits except to the extent specifically permitted or required by Section 409A. In no event may the Company or you defer the delivery of the PRSU Shares beyond the date specified in the Distribution Date section, unless such deferral complies in all respects with Treasury Regulation Section 1.409A-2(b) related to subsequent changes in the time or form of payment of nonqualified deferred compensation arrangements, or any successor regulation. In any event, the Company makes no representations or warranty and shall have no liability to you or any other person, if any provisions of or distributions under this Grant Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of that section.

16.    Unsecured Creditor. The PRSU creates a contractual obligation on the part of the Company to make a distribution of the PRSU Shares at the time provided for in this Grant Agreement. Neither you nor any other party claiming an interest in deferred compensation hereunder shall have any interest whatsoever in any specific assets of the Company. Your right to receive distributions hereunder is that of an unsecured general creditor of Company.

17.    Governing Law. The laws of the State of Delaware will govern all matters relating to the PRSU, without regard to the principles of conflict of laws.

18.    Notices. Any notice you give to the Company must follow the procedures then in effect. If no other procedures apply, you must send your notice in writing by hand or by mail to the office of the Company’s Secretary (or to the Chair of the Committee). If mailed, you should address it to the Company’s Secretary (or the Chair of the Committee) at the Company’s then corporate headquarters, unless the Company directs PRSU holders to send notices to another corporate department or to a third-party administrator or specifies another method of transmitting notice. The Company and the Board will address any notices to you using its standard electronic communications methods or at your office or home address as reflected on the Company’s personnel or other business records. You and the
                                





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Company may change the address for notice by like notice to the other, and the Company can also change the address for notice by general announcements to PRSU holders.

19.    Amendment. Subject to any required action by the Board or the stockholders of the Company, the Company may cancel the PRSU and provide a new Award under the Plan in its place, provided that the Award so replaced will satisfy all of the requirements of the Plan as of the date such new Award is made and no such action will adversely affect the PRSU to the extent then Vested.

20.    Plan Governs. Wherever a conflict may arise between the terms of this Grant Agreement and the terms of the Plan, the terms of the Plan will control. The Board may adjust the number of PRSU Shares and other terms of the PRSU from time to time as the Plan provides.

                                





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2023 EXECUTIVE SPECIAL PRSU FORM

#ParticipantName#

Dear #ParticipantFirstName#,

Congratulations, you have been awarded a performance restricted stock unit (“PRSU”) in recognition of your contributions to the success of Warner Bros. Discovery, Inc. (the “Company”). A PRSU entitles you to receive a specific number of shares of the Company’s Series A common stock (“Shares”) at a future date, assuming that you satisfy conditions of the Plan and the attached Performance Restricted Stock Unit Agreement for Employees (the “Grant Agreement”). We would like you to have an opportunity to share in the continued success of the Company through this PRSU under the Warner Bros. Discovery, Inc. Stock Incentive Plan (the “Plan”).

The following represents a brief description of your PRSU. Additional details regarding your PRSU, including the specific performance metric(s) required to be met for the PRSU to vest, in whole or in part, are provided in the Grant Agreement and in the Plan. In addition, if you are located in a country other than the United States, you will receive an International Addendum with your award under the Plan that you must review and acknowledge. If you are subject to this requirement, the International Addendum is attached.

PRSU Grant Summary

Date of Grant#GrantDate#
PRSU Shares#QuantityGranted#
Vesting Schedule
#VestingDateandQuantity#

(assuming achievement of the Performance Condition(s)), subject to the terms of the Plan and Grant Agreement.
Performance ConditionsSee Appendix A attached to the Grant Agreement for additional details.

•You have been granted a PRSU in respect of the number of Shares specified under “PRSU Shares” in the chart above.

•The potential value of your PRSU increases if the price of a Share increases, but you also have to continue to provide services for the Company (except as the Grant Agreement provides) to actually receive such value. Of course, the value of a Share may go up and down over time.

•You will not receive any Shares represented by the PRSU until the PRSU vests. Subject to the terms in the Grant Agreement and the Plan, your PRSU vests as provided in the chart above under “Vesting Schedule,” assuming you remain an employee of the Company and the applicable performance metric(s) are met.

•Once you have received Shares, you will own those Shares and may decide whether to hold the Shares, sell the Shares or give the Shares to someone as a gift, subject to applicable law.

•Your ability to receive Shares under the PRSU is conditioned upon compliance with any laws that apply to you.

Please note the “Clawback” section of the Grant Agreement, which reflects an important policy of ours. The Compensation Committee of our Board of Directors (the “Committee”) has determined that awards made under the Plan are subject to a clawback in certain circumstances. By accepting this PRSU, you agree that the Committee may change the Company’s clawback policy from time to time without your further consent.




WARNER BROS. DISCOVERY, INC.
PERFORMANCE RESTRICTED STOCK UNIT GRANT AGREEMENT
FOR EMPLOYEES


    Warner Bros. Discovery, Inc. (the “Company”) has granted you a performance restricted stock unit (the “PRSU”) under the Warner Bros. Discovery, Inc. Stock Incentive Plan (the “Plan”). The PRSU is in respect of a specified number of shares of the Company’s Series A common stock (the “PRSU Shares”) and entitles you to receive one share of the Company’s Series A common stock (a “Share”) for each PRSU Share as to which the conditions to receipt specified herein are satisfied.    

    The individualized communication you received (the “Cover Letter”) provides the details of your PRSU award. It specifies the number of PRSU Shares you are eligible to receive, the Date of Grant, and the vesting schedule applicable to the PRSU.

    The PRSU is subject in all respects to the applicable provisions of the Plan. This grant agreement (the “Grant Agreement”) does not cover all of the rules that apply to the PRSU. Such other terms are included in the Plan document. Capitalized terms are defined either further below in this Grant Agreement or in the Plan.















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The Plan document is available on the Fidelity web site. The Prospectus for the Plan, the Company’s S-8, Annual Report on Form 10-K, and other filings the Company makes with the Securities and Exchange Commission are available for your review on the Company’s web site. You may also obtain paper copies of these documents upon request to the Company’s Human Resources department.

Neither the Company nor anyone else is making any representations or promises regarding the duration of your service, vesting of the PRSU, the value a Share or of the PRSU, or the Company's prospects. The Company is not providing any advice regarding tax consequences to you or regarding your decisions regarding the PRSU. You agree to rely only upon your own personal advisors.

No one may sell, transfer, or distribute the PRSU Shares or any securities that may be received in respect of the PRSU Shares without an effective registration statement relating thereto or an opinion of counsel satisfactory to the Company or other information and representations satisfactory to it that such registration is not required.
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In addition to the Plan’s terms and restrictions, the following terms and restrictions apply:

1. Vesting Schedule. Your PRSU becomes nonforfeitable (“Vested”) as provided in the Cover Letter and this Grant Agreement assuming you remain employed by the Company or one of its Subsidiaries until the Vesting Date and the performance metric(s) are satisfied (each as reflected in Appendix A attached hereto). For purposes of this Grant Agreement, employment with the Company will include employment with any Subsidiary whose employees are then eligible to receive Awards under the Plan (provided that a later transfer of employment to an ineligible Subsidiary will not terminate employment unless the Compensation Committee of the Company’s Board of Directors (the “Committee”) determines otherwise).

If your employment is terminated due to your “Retirement” prior to the Vesting Date, so long as you have complied with the restrictions under Section 6 of this Grant Agreement. you shall be entitled to vest in (i) that number of the PRSU Shares that would have been earned under the payout matrix reflected in Appendix A (the “Payout Matrix”), determined as of the end of the performance period, had you continued to be employed, multiplied by (ii) a fraction, the numerator of which is the number of days you are employed during the applicable performance period and the denominator of which is the total number of days in such performance period. Any PRSU Shares that do not remain eligible to vest following your Retirement under the immediately preceding sentence will be forfeited at the date of your Retirement, and any PRSU Shares that do not become Vested by reason of the satisfaction of the performance metric(s) shall be cancelled effective as of the end of the applicable performance period. You will receive the Shares corresponding to the Vested PRSU Shares as provided in Section 3 of this Grant Agreement.

If your employment is terminated by your death or “Disability” prior to the Vesting Date, you (or your beneficiary or estate) shall be entitled to vest in that number of PRSU Shares that would have been earned under the Payout Matrix, determined as of the end of the performance period, had you continued to be employed. Any PRSU Shares that do not become Vested by reason of the satisfaction of the performance metric(s) shall be cancelled effective as of the end of the applicable performance period. You will receive the Shares corresponding to the Vested PRSU Shares as provided in Section 3 of this Grant Agreement.
If your employment is terminated without “Cause” prior to the Vesting Date, so long as you have complied with the restrictions under Section 6 of this Grant Agreement. you shall be entitled to vest in (i) that number of the PRSU Shares earned under the Payout Matrix, determined as of the end of the performance period, had you continued to be employed, multiplied by (ii) a fraction, the numerator of which is the number of days you are employed during the performance period plus the greater of (A) 90 days and (B) the number of days included in the period, if any, over which you receive base salary severance payments from the Company or any of its Subsidiaries pursuant to an applicable employment or severance agreement, plan or policy, and the denominator of which is the total number of days in the performance period. Any PRSU Shares that do not remain eligible to vest following your termination of employment under the immediately preceding sentence will be forfeited at the date of your termination of employment, and any PRSU Shares that do not become Vested by reason of the satisfaction of the performance metric(s) shall be cancelled effective as of the end of the performance period. You will receive the Shares corresponding to the Vested PRSU Shares as provided in Section 3 of this Grant Agreement.

“Cause” has the meaning provided in Section 11.2(b) of the Plan. “Disability” has the meaning provided in Section 2.1 of the Plan. “Retirement” means the termination of your employment for any reason other than Cause, your death or your Disability at a point at which (i) you are at least age 55, (ii) you have been employed by the Company, a Subsidiary, or any of the Company’s current or future Subsidiaries or Affiliates, for at least ten years, where your employment service is determined using the applicable Company policy in effect as of the date of Retirement, or a successor policy chosen by the Committee, and (iii) you have been actively employed as described in the foregoing clause (iv) for at least six months since the Date of Grant (as set forth in the Cover Letter).

2. Change in Control.    Notwithstanding the Plan’s provisions, if an Approved Transaction, Control Purchase, or Board Change (each a “Change in Control”) occurs before the Vesting Date and the Company terminates your employment other than for Cause or, if your employment agreement or another plan or agreement applicable to you permits you a right to effect a “Good Reason” resignation, you resign for Good Reason, in either case within 12 months after the Change in Control, you will become Vested at your date of termination in that number of PRSUs that would have become Vested had the Payout Matrix been achieved at target and the Baseline Goal (as defined in Appendix A) been achieved. Such Accelerated Vesting will only accelerate the Distribution Date if and to the extent permitted under
                                Page 3


Section 409A of the Code (“Section 409A”). “Good Reason” has the meaning provided in the document that affords you a right to effect a Good Reason termination.

The Committee reserves its ability under Section 11.1(b) of the Plan to vary this treatment if the Committee determines there is an equitable substitution or replacement award in connection with a Change in Control.

3. Distribution Date.    Subject to any overriding provisions in the Plan, you will receive a distribution of Shares in respect of your earned and Vested PRSU Shares as soon as practicable following the date on which such PRSU Shares become Vested (with the actual date being the “Distribution Date”) and, in any event, no later than March 15 of the year following the calendar year in which the Vesting Date(s) occurred, unless the Committee determines that you may make a timely deferral election to defer distribution to a later date and you have made such an election (in which case the deferred date will be the “Distribution Date”).

4. Clawback. If the Committee determines, in its sole discretion, that you engaged in fraud or misconduct as a result of which or in connection with which the Company is required to or decides to restate its financial statements or is otherwise required to seek recovery under the Company’s clawback policy as in effect from time to time prior to a Change in Control, the Committee may, in its sole discretion, impose any or all of the following:

(a) Immediate expiration of the PRSU, whether Vested or not, if granted within the first 12 months after issuance or filing of any financial statement that is being restated (the “Recovery Measurement Period”); and

(b) Require payment or transfer to the Company of the Gain from the PRSU, where the “Gain” consists of the greatest of (i) the value of the Shares delivered in respect of Vested PRSU Shares on the Distribution Date, if occurring within the Recovery Measurement Period, (ii) the value of Shares received in respect of the PRSU during the Recovery Measurement Period, as determined on the date of the request by the Committee to pay or transfer, (iii) the gross (before tax) proceeds you received from any sale of the Shares received in respect of the PRSU during the Recovery Measurement Period, and (iv) if transferred without sale during the Recovery Measurement Period, the value of the Shares received in respect of the PRSU when so transferred.

This remedy is in addition to any other remedies that the Company may have available in law or equity.

Payment is due in cash or cash equivalents within 10 days after the Committee provides notice to you that it is enforcing this clawback. Payment will be calculated on a gross basis, without reduction for taxes or commissions. The Company may, but is not required to, accept retransfer of Shares in lieu of cash payments.

5. Restrictions and Forfeiture. You may not sell, assign, pledge, encumber, or otherwise transfer any interest (“Transfer”) in the PRSU Shares. Any attempted Transfer that precedes the Distribution Date is invalid.

    Unless the Committee determines otherwise or this Grant Agreement provides otherwise, if your employment or service with the Company or any of its Subsidiaries terminates for any reason before your PRSU is Vested, then you will forfeit the PRSU (and the corresponding PRSU Shares) as of your termination date, except to the extent that the PRSU becomes Vested at that date or remains eligible to vest on or after your termination pursuant to the rules stated in Section 1 of this Grant Agreement. Any portion of your PRSU Shares that remains eligible to vest following your termination of employment subject to the achievement of the applicable performance metric(s), but does not become Vested, shall be forfeited as of the end of the performance period. You shall forfeit any unvested portion of your PRSU immediately if the Company or any of its Subsidiaries terminates your employment for Cause or if you resign your employment (other than a resignation for Good Reason within 12 months following a Change in Control). You will receive no payment for the PRSU if you forfeit it.

Your employment or service with the Company or any of its Subsidiaries will be treated as terminating through a resignation that does not qualify for treatment applicable to terminations without Cause if either (i) the entity that
                                Page 4


employs you or you provide services to ceases to qualify as a Subsidiary because of its sale, distribution, or other disposition to an unrelated entity or (ii) because the entity that employs you sold a substantial portion of its assets and your employment or service ended for any reason at or in connection with the closing of that sale, distribution, or other disposition.

6. Restrictive Covenants. You agree that, if the Company or any of its Subsidiaries terminates your employment without Cause or due to Retirement before the final Vesting Date, you will not, for the remainder of the period before the final Vesting Date (the “Restricted Period”), perform any work on, related to, or involving nonfiction, scripted, sports, lifestyle, news, interactive games, or general entertainment television (whether in cable, broadcast, free to air, digital, streaming, film or any other distribution method) or engage in any activities on behalf of any company or any entity related to or involving nonfiction, scripted, sports, lifestyle, news, interactive games, or general entertainment television (whether in cable, broadcast, free to air, digital, streaming, film or any other distribution method) (any such company or entity, a “Competitor”) in the “Restricted Area” (which means the United States and any other country (a) in which you provided services to the Company, or (b) for which you had substantive responsibility for Company operations or business matters, in the five years prior to separation from employment).

    During the Restricted Period, you will not directly or indirectly solicit any employees of the Company or any of its Affiliates to leave their employment nor directly or indirectly aid in the solicitation of such employees.

You agree that compliance with the restrictions in this Section 6 is a material part of this Grant Agreement, breach of which will cause the Company and its Affiliates irreparable harm and damages, the loss of which cannot be adequately compensated at law.  If these restrictions should ever be deemed to exceed the limitations permitted by applicable laws, you and the Company agree that such provisions shall be reformed to the maximum limitations permitted by the applicable laws.

The Company agrees that its sole remedy for any violation of the obligations applicable under this Section 6 will be your forfeiture of any portion of the PRSU Shares that have not previously been forfeited. You agree that these restrictions are in addition to and do not supersede, replace, or amend any other restrictions of a similar nature that apply to you, either by contract or common law, nor any of their related remedies (other than as apply to the PRSU). 

7. Limited Status. You understand and agree that the Company will not consider you a shareholder for any purpose with respect to the PRSU Shares, unless and until the Shares have been issued to you on the Distribution Date. You will not receive dividends with respect to the PRSU.

8. Voting. You may not vote the PRSU. You may not vote the PRSU Shares. You will not have any rights as a shareholder in respect to the PRSU or the PRSU Shares, unless and until Shares are distributed to you at a Distribution Date.

9. Taxes and Withholding. The PRSU provides tax deferral, meaning that the PRSU Shares are not taxable until you actually receive Shares on or around the Distribution Date. You will then owe taxes at ordinary income tax rates as of the Distribution Date at the value of the Shares issued in settlement of the Vested PRSUs. As an employee of the Company, you may owe FICA, Social Security and Medicare taxes before the Distribution Date.

    Issuing the Shares in respect of the PRSU is contingent on satisfaction of all obligations with respect to required tax or other required withholdings (for example, in the U.S., Federal, state, foreign and local taxes). The Company may take any action permitted under Section 11.9 of the Plan to satisfy such obligation, including, if the Committee so determines, satisfying the tax obligations by (i) reducing the number of Shares to be issued to you in respect of your PRSU by that number of Shares (valued at their Fair Market Value on the Distribution Date) that would equal all taxes required to be withheld (at their minimum withholding levels), (ii) accepting payment of the withholdings from a broker in connection with a sale of the Shares or directly from you, or (iii) taking any other action under Section 11.9 of the Plan.

                                Page 5


10. Compliance with Law. The Company will not issue any Shares if doing so would violate any applicable Federal, foreign or state securities laws or other laws or regulations. You may not sell or otherwise dispose of the any Shares issued in respect of the PRSU in violation of applicable law.

11. Additional Conditions to Receipt. The Company may postpone issuing and delivering any Shares in respect of the PRSU for so long as the Company determines to be advisable to satisfy the following:
        
(a) its completing or amending any securities registration or qualification of the Shares or its or your satisfying any exemption from registration under any Federal, foreign or state law, rule, or regulation;

(b) its receiving proof it considers satisfactory that a person seeking to receive rights in respect of the PRSU Shares after your death is entitled to do so;

(c) your complying with any requests for representations under the Plan; and

(d) your complying with any Federal, foreign, state, or local tax withholding obligations.

12. Additional Representations from You. If the vesting provisions of the PRSU are satisfied and you are entitled to receive Shares in respect of the PRSU at a time when the Company does not have a current registration statement (generally on Form S-8) under the Securities Act of 1933, as amended (the “Act”), that covers the issuance of Shares to you, you must comply with the following before the Company will issue the Shares to you. You must:

(a) represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the Shares for your own account and not with a view to reselling or distributing the Shares; and

(b) agree that you will not Transfer the Shares unless:
    
(i) a registration statement under the Act is effective at the time of disposition with respect to the Shares you propose to Transfer; or

(ii) the Company has received an opinion of counsel or other information and representations it considers satisfactory to the effect that, because of Rule 144 under the Act or otherwise, no registration under the Act is required.

13. No Effect on Employment or Other Relationship. Nothing in this Grant Agreement restricts the Company’s rights or those of any of its Affiliates to terminate your employment or other relationship at any time and for any or no reason. The termination of employment or other relationship, whether by the Company or any of its Affiliates or otherwise, and regardless of the reason for such termination, has the consequences provided for under the Plan and any applicable employment or severance agreement, plan or policy.

14. No Effect on Running Business. You understand and agree that the existence of the PRSU will not affect in any way the right or power of the Company or its stockholders to make or authorize any adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company or any of its Affiliates, or any issuance of bonds, debentures, preferred or other stock, with preference ahead of or convertible into, or otherwise affecting the Company’s stock or the rights thereof, or the dissolution or liquidation of the Company or any of its Affiliates, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether or not of a similar character to those described above.

15. Section 409A. The PRSU is intended to be exempt from or comply with the requirements of Section 409A and must be construed consistently with that section. Notwithstanding anything in the Plan or this Grant Agreement to the contrary, if the PRSU becomes Vested in connection with your “separation from service” within the meaning of
                                Page 6


Section 409A, as determined by the Company, and if (x) you are then a “specified employee” within the meaning of Section 409A at the time of such separation from service (as determined by the Company, by which determination you agree you are bound) and (y) the distribution of Shares under such accelerated PRSU will result in the imposition of additional tax under Section 409A if distributed to you within the six month period following your separation from service, then the distribution under such accelerated PRSU will not be made until the earlier of (i) the date that is six months and one day following the date of your separation from service or (ii) the 10th day after your date of death. Neither the Company nor you shall have the right to accelerate or defer the delivery of any such Shares or benefits except to the extent specifically permitted or required by Section 409A. In no event may the Company or you defer the delivery of the Shares beyond the date specified in the Distribution Date section, unless such deferral complies in all respects with Treasury Regulation Section 1.409A-2(b) related to subsequent changes in the time or form of payment of nonqualified deferred compensation arrangements, or any successor regulation. In any event, the Company makes no representations or warranty and shall have no liability to you or any other person, if any provisions of or distributions under this Grant Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of that section.

16. Unsecured Creditor. The PRSU creates a contractual obligation on the part of the Company to make a distribution of the Shares at the time provided for in this Grant Agreement. Neither you nor any other party claiming an interest in deferred compensation hereunder shall have any interest whatsoever in any specific assets of the Company and its Affiliates. Your right to receive distributions hereunder is that of an unsecured general creditor of Company.

17. Governing Law. The laws of the State of Delaware will govern all matters relating to the PRSU, without regard to the principles of conflict of laws.

18. Notices. Any notice you give to the Company must follow the procedures then in effect. If no other procedures apply, you must send your notice in writing by hand or by mail to the office of the Company’s Secretary (or to the Chair of the Committee if you are then serving as the sole Secretary). If mailed, you should address it to the Company’s Secretary (or the Chair of the Committee) at the Company’s then corporate headquarters, unless the Company directs PRSU holders to send notices to another corporate department or to a third-party administrator or specifies another method of transmitting notice. The Company and the Committee will address any notices to you using its standard electronic communications methods or at your office or home address as reflected on the Company’s personnel or other business records. You and the Company may change the address for notice by notice to the other, and the Company can also change the address for notice by general announcements to PRSU holders.

19. Amendment. Subject to any required action by the Committee or the stockholders of the Company, the Company may cancel the PRSU and provide a new Award under the Plan in its place, provided that the Award so replaced will satisfy all of the requirements of the Plan as of the date such new Award is made and no such action will adversely affect the PRSU to the extent then Vested.

20. Plan Governs. Wherever a conflict may arise between the terms of this Grant Agreement and the terms of the Plan, the terms of the Plan will control. The Committee may adjust the number of PRSU Shares and other terms of the PRSU from time to time as the Plan provides.


                                Page 7
Exhibit 22
Registered Senior Notes Issued UnderIssuerGuarantors
Indenture dated August 19, 2009Discovery Communications, LLCWarner Bros. Discovery, Inc., Scripps Networks Interactive, Inc., WarnerMedia Holdings, Inc. (fka Magallanes, Inc.)
Indenture dated March 10, 2023WarnerMedia Holdings, Inc.Warner Bros. Discovery, Inc., Scripps Networks Interactive, Inc., Discovery Communications, LLC

EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a - 14(a) AND RULE 15d - 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David M. Zaslav, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Warner Bros. Discovery, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 5, 2023 By:/s/ David M. Zaslav
David M. Zaslav
President and Chief Executive Officer

EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13a - 14(a) AND RULE 15d - 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gunnar Wiedenfels, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Warner Bros. Discovery, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 

 
Date: May 5, 2023By:/s/ Gunnar Wiedenfels
Gunnar Wiedenfels
Chief Financial Officer

EXHIBIT 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Warner Bros. Discovery, Inc. (“Warner Bros. Discovery”), on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David M. Zaslav, President and Chief Executive Officer of Warner Bros. Discovery, certify that to my knowledge:
 
1the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
2the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Warner Bros. Discovery.
 
Date: May 5, 2023By:/s/ David M. Zaslav
David M. Zaslav
President and Chief Executive Officer

EXHIBIT 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Warner Bros. Discovery, Inc. (“Warner Bros. Discovery”), on Form 10-Q for the quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gunnar Wiedenfels, Chief Financial Officer of Warner Bros. Discovery, certify that to my knowledge:
 
1the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
 
2the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Warner Bros. Discovery.
 
Date: May 5, 2023By:/s/ Gunnar Wiedenfels
Gunnar Wiedenfels
Chief Financial Officer