WARNER BROS. DISCOVERY, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited; in millions, except per share amounts) Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Distribution $ 4,950 $ 4,885 $ 9,856 $ 9,771 Advertising 1,724 2,216 3,571 4,196 Content 1,828 2,471 3,715 4,337 Other 215 240 468 487 Total revenues 8,717 9,812 17,610 18,791 Costs and expenses: Costs of revenues, excluding depreciation and amortization 4,621 5,967 9,264 11,098 Selling, general and administrative 2,564 2,477 5,039 4,671 Netflix Termination Fee (See Note 1) — — 2,800 — Depreciation and amortization 1,159 1,447 2,385 2,994 Restructuring and other charges 113 80 317 134 Impairments and loss on dispositions 23 26 37 116 Total costs and expenses 8,480 9,997 19,842 19,013 Operating income (loss) 237 (185) (2,232) (222) Interest expense, net (511) (463) (1,092) (931) (Loss) gain on extinguishment of debt, net (75) 2,958 (102) 2,954 Income (loss) from equity investees, net 28 5 23 (2) Other income, net 50 139 12 221 (Loss) income before income taxes (271) 2,454 (3,391) 2,020 Income tax benefit (expense) 433 (866) 647 (881) Net income (loss) 162 1,588 (2,744) 1,139 Net income attributable to noncontrolling interests (13) (7) (23) (15) Net (income) loss attributable to redeemable noncontrolling interests — (1) — 3 Net income (loss) available to Warner Bros. Discovery, Inc. $ 149 $ 1,580 $ (2,767) $ 1,127 Net income (loss) per share available to Warner Bros. Discovery, Inc. Series A common stockholders: Basic $ 0.06 $ 0.64 $ (1.11) $ 0.46 Diluted $ 0.06 $ 0.63 $ (1.11) $ 0.45 Weighted average shares outstanding: Basic 2,511 2,477 2,501 2,469 Diluted 2,575 2,499 2,501 2,500 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Net income (loss) $ 162 $ 1,588 $ (2,744) $ 1,139 Other comprehensive income (loss): Currency translation, net of income tax benefit (expense) of $4, $(11), $(10), and $(101) (46) 444 (264) 675 Pension plan and SERP liability, net of income tax benefit of $—, $—, $2, and $— — — 2 — Derivatives Change in net unrealized (losses) gains (8) 20 (34) 29 Less: Reclassification adjustment for net losses (gains) included in net income 8 5 15 (8) Net change, net of income tax benefit (expense) of $1, $(9), $6, and $(10) — 25 (19) 21 Comprehensive income (loss) 116 2,057 (3,025) 1,835 Comprehensive income attributable to noncontrolling interests (13) (9) (22) (20) Comprehensive (income) loss attributable to redeemable noncontrolling interests — (1) — 3 Comprehensive income (loss) attributable to Warner Bros. Discovery, Inc. $ 103 $ 2,047 $ (3,047) $ 1,818 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) June 30, 2026 December 31, 2025 Assets Current assets: Cash and cash equivalents $ 3,369 $ 4,566 Receivables, net 4,952 5,294 Prepaid expenses and other current assets 4,218 3,346 Total current assets 12,539 13,206 Film and television content rights and games 19,245 19,114 Property and equipment, net 6,652 6,685 Goodwill 25,861 25,933 Intangible assets, net 25,922 27,764 Other noncurrent assets 7,029 7,383 Total assets $ 97,248 $ 100,085 Liabilities and equity Current liabilities: Accounts payable $ 1,060 $ 1,093 Accrued liabilities 12,076 9,626 Deferred revenues 1,514 1,642 Current portion of debt 1,493 139 Total current liabilities 16,143 12,500 Noncurrent portion of debt 30,530 32,428 Deferred income taxes 5,579 6,383 Other noncurrent liabilities 11,001 11,608 Total liabilities 63,253 62,919 Commitments and contingencies (See Note 15) Redeemable noncontrolling interests — 19 Warner Bros. Discovery, Inc. stockholders’ equity: Series A common stock: $0.01 par value; 10,800 and 10,800 shares authorized; 2,738 and 2,710 shares issued; and 2,508 and 2,480 shares outstanding 27 27 Preferred stock: $0.01 par value; 1,200 and 1,200 shares authorized, 0 shares issued and outstanding — — Additional paid-in capital 56,022 56,055 Treasury stock, at cost: 230 and 230 shares (8,244) (8,244) Accumulated deficit (14,279) (11,512) Accumulated other comprehensive loss (688) (407) Total Warner Bros. Discovery, Inc. stockholders’ equity 32,838 35,919 Noncontrolling interests 1,157 1,228 Total equity 33,995 37,147 Total liabilities and equity $ 97,248 $ 100,085 The accompanying notes are an integral part of these consolidated financial statements. 6 WARNER BROS. DISCOVERY, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; in millions) Six Months Ended June 30, 2026 2025 Operating Activities Net (loss) income $ (2,744) $ 1,139 Adjustments to reconcile net income to cash provided by operating activities: Content rights amortization and impairment 5,088 6,851 Depreciation and amortization 2,385 2,994 Deferred income taxes (812) (471) Share-based compensation expense 342 298 Loss (gain) on extinguishment of debt 102 (2,954) Impairments and loss on dispositions 37 116 Netflix Termination Fee accrual (See Note 1) 2,800 — Other, net 42 (85) Changes in operating assets and liabilities, net of acquisitions and dispositions: Receivables, net 278 (460) Film and television content rights, games, and production payables, net (5,527) (6,314) Accounts payable, accrued liabilities, deferred revenues and other noncurrent liabilities (833) (141) Foreign currency, prepaid expenses and other assets, net (518) 563 Cash provided by operating activities 640 1,536 Investing Activities Purchases of property and equipment (544) (532) Proceeds from sales of investments 9 54 Investments in and advances to equity investees (25) (26) Proceeds from asset dispositions — 66 Other investing activities, net 61 7 Cash used in investing activities (499) (431) Financing Activities Principal repayments of debt, including premiums and discounts to par value (15,373) (20,403) Borrowings from debt, net of discount and issuance costs 14,781 18,303 Distributions to noncontrolling interests and redeemable noncontrolling interests (144) (174) Proceeds from the formation of music catalog joint venture — 601 Borrowings under commercial paper program and revolving credit facility 1,261 3,551 Repayments under commercial paper program and revolving credit facility (1,261) (3,551) Principal repayments of finance and other lease obligations (120) (101) Cash paid to settle share-based awards, net (451) (117) Other financing activities, net 34 5 Cash used in financing activities (1,273) (1,886) Effect of exchange rate changes on cash, cash equivalents, and restricted cash (65) 256 Net change in cash, cash equivalents, and restricted cash (1,197) (525) Cash, cash equivalents, and restricted cash, beginning of period 4,570 5,416 Cash, cash equivalents, and restricted cash, end of period $ 3,373 $ 4,891 The accompanying notes are an integral part of these consolidated financial statements. 7 WARNER BROS. DISCOVERY, INC. CONSOLIDATED STATEMENTS OF EQUITY (unaudited; in millions) Warner Bros. Discovery, Inc. Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Warner Bros. Discovery, Inc. Stockholders’ Equity Noncontrolling Interests Total Equity Shares Par Value December 31, 2025 2,710 $ 27 $ 56,055 $ (8,244) $ (11,512) $ (407) $ 35,919 $ 1,228 $ 37,147 Net (loss) income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests — — — — (2,916) — (2,916) 10 (2,906) Other comprehensive loss — — — — — (235) (235) (1) (236) Net share-based plan activity 27 — (187) — — — (187) — (187) Dividends paid to noncontrolling interests — — — — — — — (127) (127) Redeemable noncontrolling interest adjustments to redemption value — — (3) — — — (3) — (3) Reclassification associated with the expiration of put rights — — — — — — — 19 19 March 31, 2026 2,737 $ 27 $ 55,865 $ (8,244) $ (14,428) $ (642) $ 32,578 $ 1,129 $ 33,707 Net income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests — — — — 149 — 149 13 162 Other comprehensive loss — — — — — (46) (46) — (46) Net share-based plan activity 1 — 157 — — — 157 — 157 Dividends paid to noncontrolling interests — — — — — — — (14) (14) Contribution to joint venture — — — — — — — 29 29 June 30, 2026 2,738 $ 27 $ 56,022 $ (8,244) $ (14,279) $ (688) $ 32,838 $ 1,157 $ 33,995 The accompanying notes are an integral part of these consolidated financial statements. 8 WARNER BROS. DISCOVERY, INC. CONSOLIDATED STATEMENTS OF EQUITY (unaudited; in millions) Warner Bros. Discovery, Inc. Common Stock Additional Paid-In Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Loss Warner Bros. Discovery, Inc. Stockholders’ Equity Noncontrolling Interests Total Equity Shares Par Value December 31, 2024 2,684 $ 27 $ 55,560 $ (8,244) $ (12,239) $ (1,067) $ 34,037 $ 792 $ 34,829 Net (loss) income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests — — — — (453) — (453) 8 (445) Other comprehensive income — — — — — 227 227 3 230 Net share-based plan activity 19 — 41 — — — 41 — 41 Dividends paid to noncontrolling interests — — — — — — — (147) (147) Redeemable noncontrolling interest adjustments to redemption value — — (3) — — — (3) — (3) Reclassification associated with the expiration of put rights — — — — — — — 74 74 Formation of music catalog joint venture — — (13) — — — (13) 582 569 March 31, 2025 2,703 $ 27 $ 55,585 $ (8,244) $ (12,692) $ (840) $ 33,836 $ 1,312 $ 35,148 Net income available to Warner Bros. Discovery, Inc. and attributable to noncontrolling interests — — — — 1,580 — 1,580 7 1,587 Other comprehensive income — — — — — 469 469 2 471 Net share-based plan activity 2 — 164 — — — 164 — 164 Dividends paid to noncontrolling interests — — — — — — — (16) (16) Tax gain on formation of music catalog joint venture — — — — — — — (31) (31) June 30, 2025 2,705 $ 27 $ 55,749 $ (8,244) $ (11,112) $ (371) $ 36,049 $ 1,274 $ 37,323 The accompanying notes are an integral part of these consolidated financial statements. 9 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Warner Bros. Discovery, Inc. (“Warner Bros. Discovery”, “WBD”, the “Company”, “we”, “us” or “our”) is a leading global media and entertainment company that creates and distributes a differentiated and comprehensive portfolio of content and products across television, film, streaming, interactive gaming, publishing, themed experiences, and consumer products through brands including: Discovery Channel, HBO Max, CNN, DC Studios, TNT Sports, HBO, Food Network, TLC, TBS, Warner Bros. Motion Picture Group, Warner Bros. Television Group, Warner Bros. Games, Adult Swim, Turner Classic Movies, and others. Termination of Netflix Merger On January 19, 2026, the Company entered into an amended and restated agreement and plan of merger, by and among the Company, Netflix, Inc. (“Netflix”), Nightingale Sub, Inc., a wholly owned subsidiary of Netflix, and New Topco 25, Inc., a wholly owned subsidiary of WBD (the “Netflix Merger Agreement”), pursuant to which Netflix would have acquired the Streaming and Studios segments (subject to certain deviations) and certain other assets and liabilities, including the Company’s film and television studios, HBO Max, and HBO, following the separation and distribution of Discovery Global to the Company’s stockholders (the “Separation Transaction”). Following the board of directors’ determination that it had received a “Company Superior Proposal,” as defined in the Netflix Merger Agreement, from Paramount Skydance Corporation (“PSKY”) and Netflix’s waiver of its right to propose revisions to the Netflix Merger Agreement, on February 27, 2026, in accordance with the terms of the Netflix Merger Agreement, the Company terminated the Netflix Merger Agreement in connection with entering into the PSKY Merger Agreement (as defined below). As a result of the termination of the Netflix Merger Agreement, PSKY, on behalf of the Company, paid Netflix a termination fee of $2.8 billion in cash (the “Netflix Termination Fee”) as required by the terms of the Netflix Merger Agreement. In the first quarter of 2026, the Company recorded an expense for the Netflix Termination Fee in the consolidated statements of operations. The amount paid by PSKY is reimbursable by the Company to PSKY in certain circumstances in the event the PSKY Merger Agreement is terminated and has been recorded in accrued liabilities in the consolidated balance sheets. PSKY Merger On February 27, 2026, the Company entered into an Agreement and Plan of Merger, by and among the Company, PSKY and Prince Sub Inc., a wholly owned subsidiary of PSKY (“Merger Sub”) (as may be amended from time to time, the “PSKY Merger Agreement”), pursuant to which and subject to the terms and conditions therein, at the effective time, Merger Sub will merge with and into WBD, with WBD surviving as a wholly owned subsidiary of PSKY (the “PSKY Merger”). Upon completion of the PSKY Merger, each issued and outstanding share of WBD’s Series A common stock (“WBD Common Stock”) (subject to certain exceptions) will be converted into the right to receive an amount in cash equal to $31.00, without interest, plus, if the closing date of the PSKY Merger occurs after September 30, 2026, the Ticking Consideration (together, the “Merger Consideration”). The “Ticking Consideration” will be an amount in cash equal to $0.00277778 multiplied by the number of calendar days elapsed after September 30, 2026 to and including the closing date (which, for the avoidance of doubt, will not exceed $0.25 per 90 calendar day period). Concurrently with the execution of the PSKY Merger Agreement, Larry J. Ellison and an affiliated trust entered into a guarantee in favor of WBD to, among other things, jointly and severally guarantee certain payments by PSKY under the PSKY Merger Agreement, including $45.72 billion of the aggregate Merger Consideration, and assist WBD with the consummation of the PSKY Merger. On April 23, 2026, WBD stockholders approved the adoption of the PSKY Merger Agreement. In July 2026, two lawsuits were filed in the United States District Court for the Northern District of California by a coalition of twelve state attorneys general and the Writers Guild of America West and Writers Guild of America East seeking to block the PSKY Merger, alleging the transaction would violate Section 7 of the Clayton Act by reducing competition in key markets. On July 24, 2026, defendants agreed not to complete the PSKY Merger until the earlier of (i) five days after the merits determination in these matters or (ii) June 1, 2027. (See Note 15.) The outcome of such litigation is uncertain and could prevent the completion of the PSKY Merger. The completion of the PSKY Merger is subject to customary closing conditions, including regulatory clearances. In addition, PSKY’s obligation to consummate the PSKY Merger is subject to WBD not having completed the separation of its Streaming & Studios business from its Global Linear Networks business nor having declared or made any dividend to WBD’s stockholders to effectuate the separation. There can be no assurance that the PSKY Merger will occur in accordance with the expected plans or anticipated timeline, or at all. 10 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) The PSKY Merger Agreement contains certain customary termination rights for WBD and PSKY, including, without limitation, a right for either party to terminate if the PSKY Merger is not completed on or before March 4, 2027, subject to an extension to June 4, 2027 in certain circumstances as specified in the PSKY Merger Agreement. Termination under specified circumstances will require WBD to pay PSKY a termination fee of $3.0 billion and reimburse PSKY for (i) any payment made by PSKY, which will in no event be more than $1,528 million, in connection with WBD’s obligation to complete the Junior Lien Exchange Offer (as defined below) by March 4, 2027 and (ii) the Netflix Termination Fee, or PSKY to pay WBD a termination fee of $7.0 billion. Additionally, the PSKY Merger Agreement provides for customary pre-closing covenants of WBD, including covenants relating to conducting its business in the ordinary course consistent with past practice and to refrain from taking certain actions without PSKY’s consent. Reportable Segments As of June 30, 2026, we classified our operations in three reportable segments: •Streaming - Our Streaming segment primarily consists of our premium pay-TV and streaming services. •Studios - Our Studios segment primarily consists of the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to third parties and our networks/streaming services, distribution of our films and television programs to various third party and internal television and streaming services, distribution through the home entertainment market (physical and digital), related consumer products and themed experience licensing, and interactive gaming. •Global Linear Networks - Our Global Linear Networks segment primarily consists of our domestic and international television networks. Our segment presentation is aligned with our management structure and the financial information management uses to make decisions about operating matters, such as the allocation of resources and business performance assessments. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its majority-owned subsidiaries in which a controlling interest is maintained, including variable interest entities (“VIE”) for which the Company is the primary beneficiary. Intercompany accounts and transactions between consolidated entities have been eliminated. Unaudited Interim Financial Statements These consolidated financial statements are unaudited; however, in the opinion of management, they reflect all adjustments consisting only of normal recurring adjustments necessary to state fairly the financial position, results of operations and cash flows for the periods presented in conformity with U.S. GAAP applicable to interim periods. The results of operations for the interim periods presented are not necessarily indicative of results for the full year or future periods. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”). Use of Estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results may differ from these estimates. Accounting and Reporting Pronouncements Adopted Credit Losses In July 2025, the Financial Accounting Standards Board (“FASB”) issued guidance which provides a practical expedient to simplify the estimation of expected credit losses by assuming that current conditions as of the balance sheet do not change for the remaining life of the asset. This guidance is effective for interim and annual periods beginning after December 15, 2025, and the standard is to be applied prospectively. The Company elected not to apply the practical expedient in its expected credit losses calculation, therefore, there was no impact on its consolidated financial statements. 11 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Accounting and Reporting Pronouncements Not Yet Adopted Disaggregation of Income Statement Expenses In November 2024, the FASB issued guidance updating the disclosure requirements for income statement expenses, primarily through disaggregation of certain types of expenses presented on the income statement. The amendments are effective for fiscal years beginning after December 15, 2026 and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either: (1) prospectively to financial statements issued for reporting periods after the effective date, or (2) retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures. Accounting for Internal-Use Software In September 2025, the FASB issued guidance which amends the existing standard for internal-use software to remove all references to prescriptive and sequential software development project stages. Under this guidance, eligible software development costs will begin capitalization when management has authorized and committed to funding the software project, and it is probable that the project will be completed, and the software will be used to perform the function intended. This guidance may be applied prospectively, retrospectively, or with a modified transition approach, and is effective for all annual periods beginning after December 15, 2027, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures. Derivatives and Hedging and Revenue from Contracts with Customers In September 2025, the FASB issued guidance that amends existing standards for derivatives and hedging (“Topic 815”) and revenue from contracts with customers (“Topic 606”). The guidance refines the scope of Topic 815 to clarify which contracts are subject to derivative accounting. The guidance also provides clarification under Topic 606 for share-based payments from a customer in a revenue contract. This guidance may be applied prospectively or with a modified retrospective approach, and is effective for all annual periods beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures. Derivatives and Hedging: Hedge Accounting Improvements In November 2025, the FASB issued guidance that improves hedge accounting guidance by clarifying certain aspects and aligning hedge accounting more closely with the economics of an entity’s risk management activities. The update is effective for annual reporting periods beginning after December 15, 2026, and for interim periods within those annual reporting periods, with early adoption permitted. The updates should be applied prospectively for all hedging relationships as of the date of adoption. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures. NOTE 2. GOODWILL AND INTANGIBLE ASSETS We perform fair value-based impairment tests of goodwill and intangible assets on an annual basis, and between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit or an intangible asset below its carrying value. During the six months ended June 30, 2026, the Company performed goodwill and intangible assets impairment monitoring procedures for all of its reporting units and identified no indicators of impairment. The Company continues to monitor its reporting units for triggers that could impact the recoverability of goodwill. Long-term trends and risks the Company is monitoring in its ongoing assessment include, but are not limited to, the following: •uncertainty related to the PSKY Merger; •uncertainty related to affiliate rights renewals associated with the Company’s Global Linear Networks and Streaming reporting units; •declining levels of global GDP growth and continued softness in the U.S. linear advertising market associated with the Company’s Global Linear Networks reporting unit; •increased competition for advertising expenditures associated with the Company’s Global Linear Networks and Streaming reporting units as a result of an increase in digital advertising inventory available in the marketplace; •content licensing trends and volatility related to the performance of theatrical film and game slates in the Company’s Studios reporting unit; and •risks in executing the projected growth strategies of the Company’s Streaming reporting unit. 12 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 3. RESTRUCTURING AND OTHER CHARGES The Company periodically initiates restructuring programs, which may include, among other things, strategic content programming assessments, organizational restructuring, employee retention, facility consolidation activities, other contract termination costs, and consulting fees related to the previously announced Separation Transaction and the PSKY Merger. During 2025, the Company initiated restructuring plans related to the previously proposed Separation Transaction. Restructuring and other charges by reportable segments and corporate and inter-segment eliminations were as follows (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Streaming $ 18 $ 7 $ 44 $ 19 Studios 14 (1) 23 (6) Global Linear Networks 33 25 75 41 Corporate and inter-segment eliminations 48 49 175 80 Total restructuring and other charges $ 113 $ 80 $ 317 $ 134 During the three and six months ended June 30, 2026, restructuring and other charges were primarily related to organization restructuring costs, employee retention, and consulting fees related to the previously announced Separation Transaction and the PSKY Merger. During the three and six months ended June 30, 2025, restructuring and other charges were primarily related to organization restructuring costs and consulting fees. Changes in restructuring liabilities recorded in accounts payable, accrued liabilities, and other noncurrent liabilities by major category and by reportable segment and corporate were as follows (in millions). Streaming Studios Global Linear Networks Corporate Total December 31, 2025 $ 23 $ 58 $ 69 $ 127 $ 277 Contract termination accruals, net — — — 12 12 Employee termination accruals, net 2 9 11 (2) 20 Employee retention, net 31 20 63 63 177 Consulting fees and other accruals and adjustments 11 (6) 1 102 108 Cash paid (28) (14) (50) (197) (289) June 30, 2026 $ 39 $ 67 $ 94 $ 105 $ 305 NOTE 4. REVENUES The following tables present the Company’s revenues disaggregated by revenue source (in millions). Three Months Ended June 30, 2026 Streaming Studios Global Linear Networks Corporate and Inter-segment Eliminations Total Revenues: Distribution $ 2,689 $ 4 $ 2,265 $ (8) $ 4,950 Advertising 306 — 1,429 (11) 1,724 Content 84 2,125 261 (642) 1,828 Other — 199 36 (20) 215 Total $ 3,079 $ 2,328 $ 3,991 $ (681) $ 8,717 13 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Three Months Ended June 30, 2025 Streaming Studios Global Linear Networks Corporate and Inter-segment Eliminations Total Revenues: Distribution $ 2,410 $ 1 $ 2,477 $ (3) $ 4,885 Advertising 282 — 1,953 (19) 2,216 Content 102 3,591 287 (1,509) 2,471 Other (1) 209 86 (54) 240 Total $ 2,793 $ 3,801 $ 4,803 $ (1,585) $ 9,812 Six Months Ended June 30, 2026 Streaming Studios Global Linear Networks Corporate and Inter-segment Eliminations Total Revenues: Distribution $ 5,222 $ 5 $ 4,638 $ (9) $ 9,856 Advertising 590 — 2,999 (18) 3,571 Content 152 5,059 607 (2,103) 3,715 Other 2 389 124 (47) 468 Total $ 5,966 $ 5,453 $ 8,368 $ (2,177) $ 17,610 Six Months Ended June 30, 2025 Streaming Studios Global Linear Networks Corporate and Inter-segment Eliminations Total Revenues: Distribution $ 4,739 $ 2 $ 5,035 $ (5) $ 9,771 Advertising 519 1 3,711 (35) 4,196 Content 190 5,730 667 (2,250) 4,337 Other 1 382 164 (60) 487 Total $ 5,449 $ 6,115 $ 9,577 $ (2,350) $ 18,791 Contract Liabilities and Contract Assets The following table presents contract liabilities on the consolidated balance sheets (in millions). Category Balance Sheet Location June 30, 2026 December 31, 2025 Contract liabilities Deferred revenues $ 1,514 $ 1,642 Contract liabilities Other noncurrent liabilities 342 355 For the six months ended June 30, 2026 and 2025, respectively, revenues of $1,135 million and $1,003 million were recognized that were included in deferred revenues as of December 31, 2025 and December 31, 2024, respectively. Contract assets were not material as of June 30, 2026 and December 31, 2025. 14 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Remaining Performance Obligations The following table presents a summary of revenue expected to be recognized from remaining performance obligations by contract type (in millions). Contract Type June 30, 2026 Duration Distribution - fixed price or minimum guarantee $ 2,657 Through 2030 Content licensing and sports sublicensing 4,714 Through 2032 Brand licensing 4,688 Through 2062 Advertising 873 Through 2032 Other 126 Through 2029 Total $ 13,058 The value of unsatisfied performance obligations disclosed above does not include: (i) variable consideration for which revenues are recognized in accordance with the sales or usage-based royalty exception, which typically have a similar duration as the contracts disclosed above, and (ii) contracts with an original expected length of one year or less, such as most advertising contracts; however for content licensing revenues, including revenues associated with the licensing of theatrical and television product for television, streaming services, and games, the Company has included all contracts regardless of duration. NOTE 5. SALES OF RECEIVABLES Revolving Receivables Program During three months ended June 30, 2026, the Company amended its revolving receivables program to reduce the facility limit to $4,000 million and extend the program to June 2027. The outstanding portfolio of receivables derecognized from our consolidated balance sheet was $3,900 million and $3,700 million as of June 30, 2026 and December 31, 2025, respectively. The Company recognized $34 million and $54 million for the three and six months ended June 30, 2026, respectively, and $56 million and $92 million for the three and six months ended June 30, 2025, respectively, in selling, general and administrative expenses in the consolidated statements of operations from the revolving receivables program (net of non-designated derivatives). (See Note 9.) The following table presents a summary of receivables sold (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Gross receivables sold/cash proceeds received $ 3,732 $ 3,991 $ 7,177 $ 8,222 Collections reinvested under revolving receivables program (3,682) (4,240) (6,977) (8,360) Net cash proceeds received (remitted) $ 50 $ (249) $ 200 $ (138) Net receivables sold $ 3,718 $ 3,985 $ 7,134 $ 8,190 Obligations recorded (Level 3) $ 86 $ 97 $ 153 $ 200 The following table presents a summary of the amounts transferred or pledged, which were held at the Company’s bankruptcy-remote consolidated subsidiary (in millions). June 30, 2026 December 31, 2025 Gross receivables pledged as collateral $ 2,238 $ 2,632 Balance sheet classification: Receivables, net $ 1,804 $ 2,230 Other noncurrent assets $ 434 $ 402 15 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Accounts Receivable Factoring No amounts were sold under the Company’s factoring arrangement for the six months ended June 30, 2026. Total trade accounts receivable sold under the Company’s factoring arrangement was $102 million for the six months ended June 30, 2025. The impact to the consolidated statements of operations was immaterial for the three and six months ended June 30, 2026 and 2025. This accounts receivable factoring agreement is separate and distinct from the revolving receivables program. NOTE 6. CONTENT RIGHTS For purposes of amortization and impairment, capitalized production costs are grouped based on their predominant monetization strategy: individually or as a group. Live programming includes licensed sports rights and related advances. The tables below present the components of content rights (in millions). June 30, 2026 Predominantly Monetized Individually Predominantly Monetized as a Group Total Production costs: Released, less amortization $ 3,061 $ 6,295 $ 9,356 Completed and not released 950 326 1,276 In production and other 2,092 1,837 3,929 Total production costs $ 6,103 $ 8,458 $ 14,561 Licensed content, live programming, and advances, net 4,800 Game development costs, less amortization 351 Total film and television content rights and games 19,712 Less: Current content rights and prepaid license fees, net (467) Total noncurrent film and television content rights and games $ 19,245 December 31, 2025 Predominantly Monetized Individually Predominantly Monetized as a Group Total Production costs: Released, less amortization $ 3,006 $ 5,686 $ 8,692 Completed and not released 1,109 521 1,630 In production and other 1,782 2,544 4,326 Total production costs $ 5,897 $ 8,751 $ 14,648 Licensed content, live programming, and advances, net 4,478 Game development costs, less amortization 310 Total film and television content rights and games 19,436 Less: Current content rights and prepaid license fees, net (322) Total noncurrent film and television content rights and games $ 19,114 Content amortization consisted of the following (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Predominantly monetized individually $ 582 $ 645 $ 982 $ 1,225 Predominantly monetized as a group 1,933 3,033 3,990 5,563 Total content amortization $ 2,515 $ 3,678 $ 4,972 $ 6,788 16 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Content expense includes amortization, impairments, and development expense and is generally a component of costs of revenues on the consolidated statements of operations. Content impairments were $74 million and $116 million, respectively, for the three and six months ended June 30, 2026. For the three and six months ended June 30, 2025, content impairments were $28 million and $63 million, respectively. NOTE 7. INVESTMENTS The Company’s equity investments consisted of the following (in millions). Category Balance Sheet Location Ownership June 30, 2026 December 31, 2025 Equity method investments: The Chernin Group (TCG) 2.0-A, LP Other noncurrent assets 44% $ 299 $ 276 nC+ Other noncurrent assets 32% 140 153 Other Other noncurrent assets 254 268 Total equity method investments 693 697 Investments without readily determinable fair values Other noncurrent assets(a) 313 348 Total investments $ 1,006 $ 1,045 (a) Investments without readily determinable fair values included $42 million and $17 million as of June 30, 2026 and December 31, 2025, respectively, that was recorded in prepaid expenses and other current assets. Equity Method Investments Certain of the Company’s other equity method investments are VIEs, for which the Company is not the primary beneficiary. As of June 30, 2026, 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 $487 million. The Company’s maximum estimated exposure excludes the non-contractual future funding of VIEs. The aggregate carrying values of these VIE investments were $477 million and $481 million as of June 30, 2026 and December 31, 2025, respectively. VIE gains and losses are recorded in income (loss) from equity investees, net on the consolidated statements of operations, and were not material for the three and six months ended June 30, 2026 and 2025. Joint Venture In January 2025, the Company contributed a 70% interest in its music catalog to a joint venture with Cutting Edge Group in exchange for net proceeds of $601 million. In the first quarter of 2026, Cutting Edge Group received an additional 9% economic interest in the joint venture based on the results of certain operational metrics. The Company retained a controlling financial interest and consolidated the joint venture as a VIE. The Company has determined that it is the primary beneficiary of the joint venture as the Company has certain operational rights that significantly impact the economic performance of the business including exploitation of the catalog works and selection of the administrator. As the primary beneficiary, the Company includes the joint venture assets, liabilities and results of operations in the Company's consolidated financial statements. As of June 30, 2026, the carrying amounts of assets and liabilities of the consolidated VIE were not material. 17 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 8. DEBT The table below presents the components of outstanding debt (in millions). Weighted-AverageInterest Rate as ofJune 30, 2026 June 30, 2026 December 31, 2025 Bridge loan — % $ — $ 15,000 Term loans with maturities of 7 years 5.95 % 14,708 — Senior notes with maturities of 5 years or less 3.92 % 6,543 6,659 Senior notes with maturities between 5 and 10 years 4.35 % 3,480 3,509 Senior notes with maturities greater than 10 years 5.17 % 7,671 7,677 Total debt 32,402 32,845 Unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting, net (379) (278) Debt, net of unamortized discount, premium, debt issuance costs, and fair value adjustments for acquisition accounting 32,023 32,567 Current portion of debt (1,493) (139) Noncurrent portion of debt $ 30,530 $ 32,428 On June 4, 2026, Discovery Global Holdings, Inc. (“DGH”) (formerly WarnerMedia Holdings, Inc.), a wholly-owned subsidiary of the Company, entered into that certain First Lien Credit Agreement (the “First Lien Credit Agreement”) among the Company, as holdco, DGH, as parent borrower, the designated subsidiary borrowers from time to time party thereto, the lenders from time to time party thereto, JPMorgan Chase Bank, N.A. (“JPM”), as U.S. administrative agent and collateral agent, and J.P. Morgan SE, as non-U.S. administrative agent. The First Lien Credit Agreement provides for (i) 7-year $13,000 million U.S. dollar-denominated term loans (the “Initial Dollar Term Loans”) and (ii) 7-year €1,717 million Euro-denominated term loans (the “Initial Euro Term Loans” and, together with the Initial Dollar Term Loans, the “Initial Term Loans”). On June 4, 2026, DGH borrowed the Initial Term Loans and used the net proceeds thereof, together with cash on the balance sheet, to repay in full $15,000 million of outstanding loans under the Bridge Loan Agreement (as defined below), as amended by Amendment No. 1 (as defined below). The Initial Dollar Term Loans bear interest, at DGH’s option, at (x) Term SOFR (as defined in the First Lien Credit Agreement) plus 2.50% per annum or (y) the Base Rate (as defined in the First Lien Credit Agreement) plus 1.50% per annum. The Initial Euro Term Loans bear interest at the EURIBOR Screen Rate (as defined in the First Lien Credit Agreement) plus 2.50% per annum. The Initial Term Loans mature on June 4, 2033, and the Initial Dollar Term Loans also amortize at 1.00% per annum (payable quarterly). The obligations of DGH under the First Lien Credit Agreement are (i) secured by a lien on substantially all of the assets of the Company, DGH and certain wholly-owned domestic subsidiaries of the Company, subject to certain exceptions, and on a pari passu basis with the Company’s existing revolving credit facility and (ii) guaranteed by the Company and certain of its wholly-owned domestic subsidiaries. The First Lien Credit Agreement contains customary representations and warranties, as well as affirmative and negative covenants. Negative covenants include, among others, covenants that restrict the ability of the Company and certain of its subsidiaries to engage in mergers, consolidations and asset sales, incur debt and liens, enter into transactions with affiliates, enter into burdensome agreements, pay dividends and certain other restricted payments and make certain restricted investments, in each case, as set forth in the First Lien Credit Agreement and subject to certain thresholds and exceptions. The First Lien Credit Agreement does not contain any financial maintenance covenant. The First Lien Credit Agreement also contains customary and other mandatory prepayments with respect to the Initial Term Loans. Upon the occurrence of certain significant corporate events (including a change of control, such as the consummation of the previously disclosed proposed acquisition of the Company by PSKY) or certain other customary events constituting an event of default under the First Lien Credit Agreement, all loans outstanding under the First Lien Credit Agreement (including accrued interest and fees payable thereunder) may be declared immediately due and payable. 18 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) On May 19, 2026, the Company’s wholly-owned subsidiaries, DGH and Discovery Communications, LLC (“DCL”, and together with DGH, the “Issuers”), commenced solicitations of consents (the “2026 Consent Solicitations”) from holders of certain series of their senior notes to adopt proposed amendments (the “Proposed Amendments”) to the indentures governing such notes (collectively, the “Existing WBD Indentures”) to, among other things, extend the deadline to commence the Junior Lien Exchange Offer and modify the terms of the future junior lien notes (as defined below) contemplated by the offer to purchase and consent solicitation statement, dated as of June 9, 2025, including, if the PSKY Merger is consummated, removal of certain covenants, changes to guarantees and collateral requirements, and removal of the requirement that the same principal amount of junior lien notes be issued in exchange for the applicable existing senior notes. On May 19, 2026, in connection with the PSKY Merger, PSKY commenced (i) offers to purchase (the “PSKY Tender Offers”) for cash, upon the terms and subject to the conditions set forth in the related offer to purchase, certain notes issued by the Issuers of holders who validly deliver consents for such notes in the 2026 Consent Solicitations and (ii) offers to exchange (the “PSKY Exchange Offers”), upon the terms and subject to the conditions set forth in the related exchange offer memorandum, certain notes issued by the Issuers of holders who validly deliver consents for such notes in the 2026 Consent Solicitations (the “Existing Exchange Offer Notes”) for notes to be newly issued by PSKY with the same currency, maturity date, interest payment dates and interest rates (with certain exceptions) as the corresponding Existing Exchange Offer Notes. The settlement date for the PSKY Tender Offers and PSKY Exchange Offers will occur promptly after the applicable expiration date and on or promptly following the closing date of the PSKY Merger. The PSKY Tender Offers and PSKY Exchange Offers are being made solely by PSKY and are not being made by WBD or the Issuers, and are subject to certain conditions, including consummation of the PSKY Merger. On May 27, 2026, the Company announced that the Issuers had received the required consents in the 2026 Consent Solicitations for the adoption of the Proposed Amendments to the Existing WBD Indentures and entered into supplemental indentures amending the Existing WBD Indentures. In accordance with the PSKY Merger Agreement, PSKY paid the consent payments in the 2026 Consent Solicitations and related fees and expenses on the Issuers’ behalf. The Company repaid $250 million of aggregate principal amount outstanding of the Initial Term Loans during the three months ended June 30, 2026 and repaid in full at maturity $123 million of aggregate principal amounts outstanding of its senior notes due January and March 2026 during the three months ended March 31, 2026. On February 18, 2026, DGH (the “Borrower”), together with JPMorgan Chase Bank, N.A., in its capacities as Administrative Agent and Collateral Agent, executed Amendment No. 1 (“Amendment No. 1”) to the Non-Investment Grade Leveraged Bridge Loan Agreement dated June 26, 2025 (the “Bridge Loan Agreement”). Amendment No. 1 extended the maturity of the Borrower’s outstanding bridge loans from the earlier of (i) December 30, 2026 and (ii) the completion of the previously proposed Separation Transaction to the earlier of (x) June 30, 2027 and (y) the date that the previously proposed Spin-Off (as defined in the Bridge Loan Agreement) occurs. Under Amendment No. 1, all previously scheduled duration fees through June 30, 2026 remained unchanged, however, the duration fees payable on September 30, 2026 and December 31, 2026 were increased from 0.75% to 1.00% of the principal amount of outstanding loans on such dates. In addition, a new duration fee of 1.00% of the principal amount of outstanding loans would become payable on March 31, 2027. Amendment No. 1 did not modify the mandatory prepayment provisions, guarantee structure, or collateral securing the bridge facility, all of which remained consistent with the Bridge Loan Agreement. The amendment also maintained the original representations and warranties, affirmative and negative covenants, events of default and continued to include no financial maintenance covenants. During the three months ended June 30, 2025, the Company’s wholly-owned subsidiaries, DCL, DGH, Warner Media, LLC, and Historic TW Inc. (“TWI”), commenced cash tender offers to purchase (the “Tender Offers”) up to approximately $14.6 billion in aggregate purchase price of their outstanding notes and debentures. In conjunction with the Tender Offers, DCL, DGH and TWI also commenced solicitations of consents (the “Consent Solicitations”) from holders of substantially all of its outstanding notes and debentures to adopt certain proposed amendments to the indentures governing such notes and debentures, to, among other things, remove substantially all of the restrictive covenants and certain events of defaults under such indentures. 19 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) To fund the Tender Offers and Consent Solicitations, as well as repay in full and terminate its $1,500 million 364-day senior unsecured term loan facility, the Company and DGH entered into the Bridge Loan Agreement. The obligations under the Bridge Loan Agreement were secured by a lien on substantially all of the personal property assets of the Company, DGH, and certain of its wholly owned domestic subsidiaries and were guaranteed by the Company and certain of its wholly-owned domestic subsidiaries. Borrowings under the Bridge Loan Agreement bore interest at the Secured Overnight Financing Rate (“SOFR”) plus (i) until December 30, 2025, 3.00% per annum, (ii) from December 31, 2025 until March 30, 2026, 3.50% per annum and (iii) from March 31, 2026 until the termination date of the Bridge Loan Agreement, 4.00%. Borrowings under the Bridge Loan Agreement, net of any prepayments, would become payable in full on the earlier of (i) December 30, 2026 and (ii) the date of the completion of the separation of the Company into two publicly traded companies. In addition, the Company would pay JPMorgan Chase Bank, N.A. as the administrative agent a duration fee equal to the applicable percentage of the aggregate principal amount of the loan outstanding on the following dates: on December 31, 2025, a fee rate of 0.30%; on each of March 31, 2026 and June 30, 2026, a fee rate of 0.50%; and on each of September 30, 2026 and December 31, 2026, a fee rate of 0.75%. On June 30, 2025, DGH drew $17.0 billion of the available amount under the Bridge Loan Agreement to finance the early settlement of the Tender Offers, Consent Solicitations, and the repayment in full and termination of its $1,500 million 364-day senior unsecured term loan facility, and the payment of fees and expenses therewith and for general corporate purposes. The Bridge Loan Agreement was expected to be refinanced prior to the separation of the Company into two publicly traded companies. The Bridge Loan Agreement contained customary representations and warranties, as well as affirmative and negative covenants. The Bridge Loan Agreement did not contain any financial maintenance covenant. The Company completed the Tender Offers in June 2025 by purchasing senior notes and debentures in the aggregate principal amount of $17.7 billion validly tendered and accepted for purchase pursuant to the Tender Offers and recorded a gain on extinguishment of approximately $3.0 billion. The Company also paid $293 million for the Consent Solicitations. Additionally, the Company repaid in full at maturity $487 million of aggregate principal amount outstanding of its senior notes due June 2025. During the three months ended March 31, 2025, the Company repaid in full at maturity $2,165 million of aggregate principal amount outstanding of its senior notes due March 2025 and redeemed in full $1,500 million aggregate principal amount outstanding of its senior notes due March 2026. The redemption was funded with the proceeds of borrowings pursuant to a $1,500 million 364-day senior unsecured term loan credit facility. We are obligated to cause certain of our subsidiaries to conduct one or more offers to exchange (collectively, the “Junior Lien Exchange Offer”) certain of the senior notes issued by DGH and DCL, as applicable, for new junior lien secured notes with the same economic terms (including denominations, interest rate, interest payment dates, maturity date and redemption provisions) to be issued by DGH or DCL, as applicable (the “junior lien notes”). On May 26, 2026, following receipt of the requisite consents in the 2026 Consent Solicitations, the Issuers entered into supplemental indentures to the Existing WBD Indentures to adopt the Proposed Amendments, which, among other things, extended the deadline to commence the Junior Lien Exchange Offer from December 30, 2026 to the End Date (as defined in the PSKY Merger Agreement), which is March 4, 2027 (as such date may be extended by the parties to the PSKY Merger Agreement), provided that if the PSKY Merger Agreement is validly terminated on or prior to the End Date, such deadline will be the later of (i) December 30, 2026 and (ii) 90 days following the termination date (the “Exchange Offer Deadline”). If the Junior Lien Exchange Offer is not commenced by the Exchange Offer Deadline or the Junior Lien Exchange Offer is not completed within 60 days of commencement thereof, WBD will be required to pay to each holder of the applicable senior notes entitled to participate in the Junior Lien Exchange Offer a one-time cash payment in the amount of $100 per $1,000 principal amount or €100 per €1,000 principal amount, as applicable, of the applicable senior notes held by such holder, equal to an aggregate amount of approximately $1.5 billion. The PSKY Merger Agreement provides that, prior to October 15, 2026, PSKY may deliver one formal request (a “Specified Request”) in writing to WBD requesting that WBD either, subject to certain exceptions, (i) commence and use reasonable best efforts to effectuate a consent solicitation (on terms mutually determined by PSKY and WBD in good faith) to eliminate the obligation to commence the Junior Lien Exchange Offer or otherwise modify the required terms of the Junior Lien Exchange Offer, (ii) commence and use reasonable best efforts to effectuate the Junior Lien Exchange Offer (on terms mutually determined by PSKY and WBD in good faith, subject to certain conditions) or (iii) make a payment in the amount of $100 per $1,000 principal amount or €100 per €1,000 principal amount of such outstanding senior notes in lieu of effectuating the Junior Lien Exchange Offer (the “Amended Notes Payment Amount”); provided that, if the Amended Notes Payment Amount becomes due and payable pursuant to the above, PSKY shall timely and fully pay such amount (such amount not to exceed $1,528 million in the aggregate). On May 19, 2026, in connection with the 2026 Consent Solicitations, PSKY delivered the Specified Request to the Company. As of June 30, 2026, all senior notes are fully and unconditionally guaranteed by the Company, Scripps Networks Interactive, Inc. (“Scripps Networks”), DCL (to the extent it is not the primary obligor on such senior notes), and DGH (to the extent it is not the primary obligor on such senior notes), except for $171 million of senior notes related to the legacy WarnerMedia business (the “WarnerMedia Business”). 20 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Revolving Credit Facility and Commercial Paper Programs DCL and certain subsidiaries of the Company, as borrowers, have a multicurrency revolving credit agreement, which was amended in June 2025 (the “Credit Agreement”). The Credit Agreement provides for a senior revolving credit facility (the “Credit Facility”) with aggregate commitments of $4,000 million and includes a $150 million sublimit for the issuance of standby letters of credit. DCL may also request additional commitments up to $1,000 million from the lenders upon the satisfaction of certain conditions. The obligations of the borrowers under the Credit Agreement are secured by the same collateral and have the benefit of the same guarantees as provided in respect of the First Lien Credit Agreement, as described above. The Credit Agreement is available on a revolving basis until October 2029, with an option for up to two additional 364-day renewal periods subject to the lenders’ consent, and provides for an early termination of the Credit Agreement upon completion of the previously proposed Separation Transaction. Additionally, the Company’s commercial paper program is supported by the Credit Facility. Under the commercial paper program, the Company may issue up to $2,000 million. In March 2025, the Company increased the issuance capacity under the commercial paper program from $1,000 million to $2,000 million. Borrowing capacity under the Credit Facility is effectively reduced by any outstanding borrowings under the commercial paper program. As of June 30, 2026 and December 31, 2025, the Company and DCL had no outstanding borrowings under the Credit Facility or issuances under the commercial paper program. The Credit Agreement contains customary representations and warranties as well as affirmative and negative covenants and requires maintenance of a minimum consolidated interest coverage ratio of 3.00 to 1.00 and a maximum consolidated leverage ratio of 4.50 to 1.00. As of June 30, 2026, the Company was in compliance with all applicable covenants and there were no events of default under the Credit Agreement. NOTE 9. DERIVATIVE FINANCIAL INSTRUMENTS In the normal course of business, the Company is exposed to foreign currency exchange rate market risk and interest rate fluctuations. As part of its risk management strategy, the Company uses derivative financial instruments, primarily foreign currency forward contracts, fixed-to-fixed currency swaps, total return swaps and interest rate swaps to hedge certain foreign currency, market value, and interest rate exposures. The Company’s objective is to reduce earnings volatility by offsetting gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them. The Company does not enter into or hold derivative financial instruments for speculative trading purposes. There were no amounts eligible to be offset under master netting agreements as of June 30, 2026 and December 31, 2025. The fair value of the Company’s derivative financial instruments was determined using a market-based approach (Level 2). The following table summarizes the Company’s derivative financial instruments recorded on its consolidated balance sheets (in millions). June 30, 2026 December 31, 2025 Fair Value Fair Value Notional Prepaid expenses and other current assets Other non- current assets Accounts payable and accrued liabilities Other non- current liabilities Notional Prepaid expenses and other current assets Other non- current assets Accounts payable and accrued liabilities Other non- current liabilities Cash flow hedges: Foreign exchange $ 2,956 $ 55 $ 47 $ 35 $ 57 $ 2,235 $ 53 $ 60 $ 35 $ 38 Net investment hedges: (a) Cross-currency swaps 222 3 — — 5 452 7 — — 21 No hedging designation: Foreign exchange 270 6 1 85 2 126 9 — 15 79 Cross-currency swaps 443 2 — 9 3 225 4 — — 11 Total return swaps 533 — — — — 501 — — — — Credit contracts — — — — — 2,000 8 — — — Total $ 66 $ 48 $ 129 $ 67 $ 81 $ 60 $ 50 $ 149 (a) Excludes €1,598 million and €781 million of euro-denominated notes ($1,822 million and $919 million equivalent) at June 30, 2026 and December 31, 2025, respectively, designated as a net investment hedge. 21 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Derivatives Designated for Hedge Accounting Cash Flow Hedges The Company uses foreign exchange forward contracts to mitigate the foreign currency risk related to revenues, production rebates, and production expenses. As production spend occurs or when rebate receivables are recognized, foreign forward exchange contracts designated as cash flow hedges are de-designated. Upon de-designation, gains and losses on these derivatives directly impact earnings in the same line and same period as the hedged risk. These cash flow hedges are carried at fair market value on the Company’s consolidated balance sheets. Hedge effectiveness is assessed using the spot method, with fair market value changes recorded in other comprehensive income (loss) until the hedged item affects earnings. Excluded components, including forward points, are included in current earnings. The following table presents the pre-tax impact of derivatives designated as cash flow hedges on income and other comprehensive income (loss) (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Gains (losses) recognized in accumulated other comprehensive loss: Foreign exchange - derivative adjustments $ (12) $ 28 $ (44) $ 42 Gains (losses) reclassified into income from accumulated other comprehensive loss: Foreign exchange - distribution revenue (13) (5) (23) (1) Foreign exchange - costs of revenues 2 1 5 1 Interest rate - interest expense, net — (1) (1) (2) Interest rate - loss (gain) on extinguishment of debt, net — (1) — (1) Interest rate - other income, net — — — 14 If current fair values of designated cash flow hedges as of June 30, 2026 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 29 years. Net Investment Hedges The Company is exposed to foreign currency risk associated with the net assets of non-USD functional entities and uses fixed-to-fixed cross currency swaps to mitigate this risk. During the three months ended June 30, 2026, the Company designated €817 million of the Initial Euro Term Loans as a net investment hedge to mitigate the risk associated with the net assets of non-USD functional entities. (See Note 8). The following table presents the pre-tax impact of derivatives and other instruments designated as net investment hedges on other comprehensive income (loss) (in millions). Other than amounts excluded from effectiveness testing, there were no other material gains (losses) reclassified from accumulated other comprehensive loss to income during the three and six months ended June 30, 2026 and 2025. Three Months Ended June 30, Amount of gain (loss) recognized in AOCI Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) 2026 2025 2026 2025 Cross currency swaps $ 9 $ (8) Interest expense, net $ 3 $ 3 Euro-denominated notes (foreign denominated debt) 21 (148) N/A — — Total $ 30 $ (156) $ 3 $ 3 22 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Six Months Ended June 30, Amount of gain (loss) recognized in AOCI Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing) 2026 2025 2026 2025 Cross currency swaps $ 6 $ (12) Interest expense, net $ 6 $ 6 Euro-denominated notes (foreign denominated debt) 43 (208) N/A — — Total $ 49 $ (220) $ 6 $ 6 Derivatives Not Designated for Hedge Accounting The Company has deferred compensation plans that have risk related to the fair value gains and losses on these investments and uses total return swaps to mitigate this risk. The gains and losses associated with these swaps are recorded to selling, general and administrative expenses, offsetting the deferred compensation investment gains and losses. During the year ended December 31, 2025, the Company entered into $2,000 million notional amount of credit contract swaptions to mitigate the interest rate risk related to future issuances of debt related to the previously proposed Separation Transaction, which were unwound during the six months ended June 30, 2026 for an immaterial loss. The Company is also exposed to the risk of secured overnight financing rate changes in connection with securitization fees on the receivables securitization program. To mitigate this risk, the Company entered into $1,500 million notional of non-designated interest rate swaps in the first half of 2025. The gains and losses on these derivatives are recorded in selling, general and administrative expenses, offsetting securitization interest expense. The following table presents the pretax gains (losses) on derivatives not designated as hedges and recognized in selling, general and administrative expense and other income, net in the consolidated statements of operations (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Interest rate swaps $ — $ (3) $ — $ (2) Total return swaps 50 31 38 20 Total in selling, general and administrative expense 50 28 38 18 Cross-currency swaps — (6) 1 (7) Credit contracts — — (5) — Foreign exchange derivatives 15 25 17 34 Total in other income, net 15 19 13 27 Total $ 65 $ 47 $ 51 $ 45 NOTE 10. FAIR VALUE MEASUREMENTS Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants. Assets and liabilities carried at fair value are classified in the following three categories: Level 1 – Quoted prices for identical instruments in active markets. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 3 – Valuations derived from techniques in which one or more significant inputs are unobservable. 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). June 30, 2026 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Assets Cash equivalents: Time deposits Cash and cash equivalents $ — $ 61 $ — $ 61 Equity securities: Money market fund Cash and cash equivalents 51 — — 51 Mutual funds Prepaid expenses and other current assets 16 — — 16 Company-owned life insurance contracts Prepaid expenses and other current assets — 2 — 2 Mutual funds Other noncurrent assets 201 — — 201 Company-owned life insurance contracts Other noncurrent assets — 106 — 106 Total $ 268 $ 169 $ — $ 437 Liabilities Deferred compensation plan Accrued liabilities $ 62 $ — $ — $ 62 Deferred compensation plan Other noncurrent liabilities 722 — — 722 Total $ 784 $ — $ — $ 784 December 31, 2025 Category Balance Sheet Location Level 1 Level 2 Level 3 Total Assets Cash equivalents: Time deposits Cash and cash equivalents $ — $ 107 $ — $ 107 Equity securities: Money market funds Cash and cash equivalents 61 — — 61 Mutual funds Prepaid expenses and other current assets 14 — — 14 Company-owned life insurance contracts Prepaid expenses and other current assets — 2 — 2 Mutual funds Other noncurrent assets 205 — — 205 Company-owned life insurance contracts Other noncurrent assets — 105 — 105 Total $ 280 $ 214 $ — $ 494 Liabilities Deferred compensation plan Accrued liabilities $ 66 $ — $ — $ 66 Deferred compensation plan Other noncurrent liabilities 682 — — 682 Total $ 748 $ — $ — $ 748 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 June 30, 2026 and December 31, 2025. The estimated fair value of the Company’s outstanding senior notes, including accrued interest, using quoted prices from over-the-counter markets, considered Level 2 inputs, was $15,218 million and $15,205 million as of June 30, 2026 and December 31, 2025, respectively. The Company’s derivative financial instruments are discussed in Note 9 and the obligation for its revolving receivable program is discussed in Note 5. 24 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 11. SHARE-BASED COMPENSATION The Company has various incentive plans under which performance based restricted stock units (“PRSUs”), service based restricted stock units (“RSUs”), and stock options have been issued. The table below presents awards granted (in millions, except weighted-average grant price). Six Months Ended June 30, 2026 Awards Weighted-Average Grant Date Fair Value Awards granted: PRSUs 1.2 $ 29.08 RSUs 19.5 $ 28.47 Stock options 3.1 $ 10.47 The table below presents unrecognized compensation cost related to non-vested share-based awards and the weighted-average amortization period over which these expenses will be recognized as of June 30, 2026 (in millions, except years). Unrecognized Compensation Cost Weighted-Average Amortization Period (years) PRSUs $ 72 1.2 RSUs 716 1.3 Stock options 127 2.6 Total unrecognized compensation cost $ 915 NOTE 12. INCOME TAXES Income tax benefit (expense) was $433 million and $(866) million for the three months ended June 30, 2026 and 2025, respectively and $647 million and $(881) million for the six months ended June 30, 2026 and 2025, respectively. The increase in income tax benefit for the three and six months ended June 30, 2026 compared to the same periods in 2025 was primarily attributable to lower pre-tax book income, including the absence of a $3.0 billion gain recognized in 2025 associated with the Tender Offers (see Note 8), as well as excess tax benefits from share-based compensation. Income tax benefit for the three and six months ended June 30, 2026, reflects an effective income tax rate that differs from the federal statutory tax rate primarily due to the effect of foreign operations, excess tax benefits from share-based compensation, and changes in unrecognized tax benefits. Income tax benefit for the six months ended June 30, 2026 also reflects a book tax difference in the Netflix Termination Fee accrual based on current assessments. (See Note 1.) As of June 30, 2026 and December 31, 2025, the Company’s reserves for unrecognized tax benefits totaled $2,393 million and $2,356 million, respectively. As of June 30, 2026 and December 31, 2025, the Company had accrued $935 million and $856 million, respectively, of total interest and penalties payable related to unrecognized tax benefits. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income tax expense. The Organization for Economic Co-operation and Development’s (“OECD”) Pillar Two Global Anti-Base Erosion (“GloBE”) model rules, issued under the OECD Inclusive Framework on Base Erosion and Profit Shifting, introduce a global minimum tax of 15% applicable to multinational enterprise groups with consolidated financial statement revenue in excess of €750 million. Numerous foreign jurisdictions have already enacted tax legislation based on the GloBE rules, with some effective as early as January 1, 2024. In January 2026, the OECD issued additional guidance on the minimum tax framework, including a “side by side” safe harbor framework that would apply to U.S.-parented groups. Even if this safe harbor applies, we would still be subject to local minimum tax regimes in countries that have adopted these rules. The interpretation and adoption of the OECD’s recommendations continue to vary across jurisdictions. As of June 30, 2026, we recognized an immaterial income tax expense for Pillar Two GloBE minimum tax. The Company is continuously monitoring the evolving application of this legislation and assessing its potential impact on our future tax liability. 25 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) NOTE 13. SUPPLEMENTAL DISCLOSURES The following tables present supplemental information related to the consolidated financial statements (in millions). Other Income, net Other income, net, consisted of the following (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Foreign currency gains (losses), net $ 20 $ 58 $ (32) $ 88 Gains on derivative instruments, net 15 19 13 41 Change in the value of investments with readily determinable fair value 6 — 6 4 Change in fair value of equity investments without readily determinable fair value (37) — (37) (4) Interest income 34 59 56 123 Indemnification receivable accrual 3 (5) — (43) Other income, net 9 8 6 12 Total other income, net $ 50 $ 139 $ 12 $ 221 Supplemental Cash Flow Information Six Months Ended June 30, 2026 2025 Non-cash investing and financing activities: Assets acquired under finance lease and other arrangements $ 85 $ 219 Settlement of PRSU awards $ 109 $ 62 Accrued debt tender fees $ — $ 95 Cash, Cash Equivalents, and Restricted Cash June 30, 2026 December 31, 2025 Cash and cash equivalents $ 3,369 $ 4,566 Restricted cash - recorded in prepaid expenses and other current assets 4 4 Total cash, cash equivalents, and restricted cash $ 3,373 $ 4,570 26 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Earnings Per Share The table below presents a reconciliation of net income (loss) available to Warner Bros. Discovery, Inc. Series A common stockholders for basic and diluted earnings per share (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Numerator: Net income (loss) $ 162 $ 1,588 $ (2,744) $ 1,139 Less: Net income attributable to noncontrolling interests (13) (7) (23) (15) Net (income) loss attributable to redeemable noncontrolling interests — (1) — 3 Net income (loss) available to Warner Bros. Discovery, Inc. Series A common stockholders for basic and diluted earnings per share $ 149 $ 1,580 $ (2,767) $ 1,127 Denominator — weighted average: Common shares outstanding — basic 2,511 2,477 2,501 2,469 Dilutive effect of share-based awards 64 22 — 31 Common shares outstanding — diluted 2,575 2,499 2,501 2,500 Basic net income (loss) per share allocated to common stockholders $ 0.06 $ 0.64 $ (1.11) $ 0.46 Diluted net income (loss) per share allocated to common stockholders $ 0.06 $ 0.63 $ (1.11) $ 0.45 Earnings (loss) per share amounts may not recalculate due to rounding. The table below presents the details of share-based awards that were excluded from the calculation of diluted earnings per share (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Anti-dilutive share-based awards 20 81 96 66 Supplier Finance Programs As of June 30, 2026 and December 31, 2025, the Company has confirmed $277 million and $260 million, respectively, of accrued content producer liabilities. These amounts were outstanding and unpaid by the Company and were recorded in accrued liabilities on the consolidated balance sheets. Leases During the three months ended March 31, 2025, the Company subleased a portion of its Hudson Yards, New York office. As a result of executing the sublease, the Company recorded a right-of-use (“ROU”) asset impairment charge of $87 million. The ROU asset impairment charge was recorded in impairment and loss on dispositions in the consolidated statements of operations. 27 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Collaborative Arrangements The arrangement among TNT Sports, CBS Broadcasting, Inc. (“CBS”), and the National Collegiate Athletic Association (the “NCAA”) provides TNT Sports and CBS with rights to the NCAA Division I Men’s Basketball Championship Tournament (the “NCAA Tournament”) in the U.S. and its territories and possessions through 2032. The aggregate programming rights fee, production costs, certain advertising revenues and sponsorship revenues related to the NCAA Tournament, and related programming are shared equally by the Company and CBS. However, if the amount paid for the programming rights fee and production costs in any given year exceeds the shared advertising and sponsorship revenues for that year, CBS’ share of such shortfall is limited to a specified annual cap. The amount recorded pursuant to the loss cap was $76 million and $74 million during the six months ended June 30, 2026 and 2025, respectively. In accounting for this arrangement, the Company records advertising revenue for the advertisements aired on its networks and amortizes its share of the programming rights fee based on the estimated relative value of each season over the term of the arrangement. Venu Sports On February 6, 2024, the Company announced that it would enter into a joint venture with ESPN, a subsidiary of The Walt Disney Company (“Disney”), and Fox Corporation (“Fox”) to form Venu Sports, a sports-centric streaming service in the United States. On February 20, 2024, FuboTV Inc. and FuboTV Media Inc. (collectively, “Fubo”) filed a lawsuit against Disney, including certain affiliates, Fox, and WBD (collectively, the “Defendants”) in the U.S. District Court for the Southern District of New York alleging claims under federal and New York antitrust laws. The Defendants reached a settlement with Fubo related to Fubo’s antitrust claims and collectively paid $220 million to Fubo in January 2025, of which the Company’s share was $55 million. On January 10, 2025, the Defendants announced their decision to discontinue the Venu Sports joint venture and not launch its streaming service effective immediately. Discovery Family Hasbro Inc. (“Hasbro”) had the right to put the entirety of its remaining 40% interest in Discovery Family to the Company. Hasbro did not exercise the right by the election period expiration date of March 31, 2025. As of March 31, 2025, Hasbro’s noncontrolling interest was reclassified from redeemable noncontrolling interest to noncontrolling interest outside of stockholders’ equity on the Company’s consolidated balance sheets. Accumulated Other Comprehensive Loss The table below presents the changes in the components of accumulated other comprehensive loss, net of taxes (in millions). Three Months Ended June 30, 2026 Currency Translation Derivatives Pension Plan and SERP Liability Accumulated Other Comprehensive Loss Beginning balance $ (560) $ 20 $ (102) $ (642) Other comprehensive income (loss) before reclassifications (46) (8) — (54) Reclassifications from accumulated other comprehensive loss to net income — 8 — 8 Other comprehensive income (loss) (46) — — (46) Ending balance $ (606) $ 20 $ (102) $ (688) Three Months Ended June 30, 2025 Currency Translation Derivatives Pension Plan and SERP Liability Accumulated Other Comprehensive Loss Beginning balance $ (777) $ 11 $ (74) $ (840) Other comprehensive income (loss) before reclassifications 444 20 — 464 Reclassifications from accumulated other comprehensive loss to net income — 5 — 5 Other comprehensive income (loss) 444 25 — 469 Ending balance $ (333) $ 36 $ (74) $ (371) 28 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Six Months Ended June 30, 2026 Currency Translation Derivatives Pension Plan and SERP Liability Accumulated Other Comprehensive Loss Beginning balance $ (342) $ 39 $ (104) $ (407) Other comprehensive income (loss) before reclassifications (264) (34) 2 (296) Reclassifications from accumulated other comprehensive loss to net income — 15 — 15 Other comprehensive income (loss) (264) (19) 2 (281) Ending balance $ (606) $ 20 $ (102) $ (688) Six Months Ended June 30, 2025 Currency Translation Derivatives Pension Plan and SERP Liability Accumulated Other Comprehensive Loss Beginning balance $ (1,008) $ 15 $ (74) $ (1,067) Other comprehensive income (loss) before reclassifications 675 29 — 704 Reclassifications from accumulated other comprehensive loss to net income — (8) — (8) Other comprehensive income (loss) 675 21 — 696 Ending balance $ (333) $ 36 $ (74) $ (371) NOTE 14. RELATED PARTY TRANSACTIONS In the normal course of business, the Company enters into transactions with related parties. Related party transactions include revenues and expenses for content and services provided to or acquired from equity method investees, entities that share common directorship, or minority partners of consolidated subsidiaries. The table below presents a summary of the transactions with related parties (in millions). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues and service charges $ 177 $ 161 $ 382 $ 375 Expenses $ 48 $ 84 $ 103 $ 152 Distributions to noncontrolling interests and redeemable noncontrolling interests $ 15 $ 17 $ 144 $ 174 The table below presents receivables due from and payables due to related parties (in millions). June 30, 2026 December 31, 2025 Receivables $ 107 $ 116 Payables $ — $ 17 NOTE 15. COMMITMENTS AND CONTINGENCIES Other Contingent Commitments During the six months ended June 30, 2026, the Company entered into a tax reimbursement agreement with the Chief Executive Officer (“CEO”). In the event that the CEO incurs an excise tax in respect of any payment or benefit made or provided to him in connection with a change in control, he would be entitled to a tax reimbursement payment. 29 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Legal Matters From time to time, in the normal course of its operations, the Company is subject to various litigation matters and claims, including claims related to employees, stockholders, vendors, other business partners, government regulations, or intellectual property, as well as disputes and matters involving counterparties to contractual agreements. A determination as to the amount of the accrual required for such contingencies is highly subjective and requires judgment about future events. The Company may not currently be able to estimate the reasonably possible loss or range of loss for certain matters until developments in such matters have provided sufficient information to support an assessment of such loss. In the absence of sufficient information to support an assessment of the reasonably possible loss or range of loss, no accrual for such contingencies is made and no loss or range of loss is disclosed. Although the outcome of these matters cannot be predicted with certainty and the impact of the final resolution of these matters on the Company’s results of operations in a particular subsequent reporting period is not known, management does not currently believe that the resolution of these matters will have a material adverse effect on the Company’s future consolidated financial position, future results of operations, or cash flows. PSKY Complaint. On January 12, 2026, PSKY filed a complaint in the Delaware Court of Chancery against our board of directors (and our Chair Emeritus, Dr. Malone) and the Company. The suit asserted a claim for breach of fiduciary duty against the directors, alleging that our board of directors failed to disclose material information in both the Solicitation/Recommendation Statement on Schedule 14D-9, filed on December 17, 2025, and the amendment to that Schedule 14D-9, filed on January 7, 2026. PSKY also requested that the court expedite the case in light of the then-current expiration date of PSKY’s tender offer on January 21, 2026. On January 15, 2026, the Delaware Court of Chancery denied PSKY’s request for expedition, stating that PSKY failed to demonstrate that it would suffer any irreparable harm in its capacity as a stockholder of the Company if the litigation was not expedited, among other reasons. On February 2, 2026, the Company moved to dismiss the complaint. Pursuant to the PSKY Merger Agreement, PSKY filed a voluntary notice of dismissal with prejudice with respect to the complaint, and the court dismissed the case on March 2, 2026. Securities Class Action. On November 25, 2024, a securities class action complaint was filed in the United States District Court for the Southern District of New York (Collura v. Warner Bros. Discovery, Inc., No. 1:24-cv-09027-KPF). The complaint named WBD, Gunnar Wiedenfels, and David M. Zaslav as defendants and asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 promulgated thereunder. On February 21, 2025, the court appointed co-lead plaintiffs (Anthony Yuson and Michael Steinberg) and co-lead counsel (Pomerantz LLP and The Rosen Law Firm, P.A.) to represent the putative class. On May 7, 2025, the lead plaintiffs filed a First Amended Complaint against WBD, Gunnar Wiedenfels, and David M. Zaslav. The First Amended Complaint generally alleges that, between February 23, 2024 and August 7, 2024, defendants made false and misleading statements in SEC filings and other public disclosures relating to WBD’s negotiations with the National Basketball Association (“NBA”) concerning its contractual rights to broadcast the NBA’s content and the potential impact of a failure to renew the contract on its business, in violation of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5, and seeks damages and other relief. The defendants moved to dismiss on July 11, 2025, which the court granted without leave to amend on March 30, 2026. Consolidated Derivative Action. Between December 20, 2024 and January 14, 2025, four stockholder derivative complaints were filed in the United States District Court for the Southern District of New York (Roy v. Zaslav et al., No. 1:24-cv-09856-AT, Hollin v. Zaslav et al., No. 1:24-cv-09885-AT, KO v. Zaslav et al., No. 1:25-cv-00114-AT, and Herman, III v. Chen et al., No. 1:25-cv-00352-AT). Each complaint names certain current and former directors and officers of WBD as defendants and WBD as nominal defendant, and each complaint seeks damages and other relief. The complaints generally assert claims against the defendants, derivatively on behalf of WBD, for alleged breaches of fiduciary duty based on the same facts alleged in a securities class action complaint that was filed in the United States District Court for the Southern District of New York (Collura v. Warner Bros. Discovery, Inc., No. 1:24-cv-09027-KPF), which was dismissed on March 30, 2026. The four complaints assert various common law causes of action, including breach of fiduciary duties, aiding and abetting breach of fiduciary duties, abuse of control, unjust enrichment, gross mismanagement, and waste of corporate assets, as well claims for violations of Sections 14(a), 10(b), and 21D of the Exchange Act. On January 21, 2025, the court consolidated the four actions for all purposes under Case No. 1:24-cv-09856-AT, captioned as In re Warner Bros. Discovery, Inc. Derivative Litigation (the “Consolidated Derivative Action”). On February 19, 2025, the court stayed the Consolidated Derivative Action pending resolution of a final decision on all motions to dismiss the operative complaint in the Collura securities action. On June 15, 2026, following the dismissal of the Collura securities action, the court entered an order dismissing the consolidated derivative action. 30 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Individual Stockholder Action. On April 2, 2026, an individual action was filed in the Supreme Court of the State of New York, County of Richmond (Nicosia v. Di Piazza, Jr., et al., Index No. 150851/2026). The complaint was brought by a purported stockholder of WBD and it named as defendants WBD, members of the WBD board of directors, and PSKY. The complaint alleged that the proxy statement disseminated to WBD stockholders in connection with the proposed transaction with PSKY contains materially false and misleading statements and omissions concerning, among other things, the alleged personal financial benefits of WBD’s directors and officers, the alleged conflicts of WBD’s financial advisors, and the process underlying and valuation of the proposed transaction. Following the issuance of certain supplemental disclosures via Form DEFA14A on April 16, 2026, the plaintiff voluntarily dismissed the litigation with prejudice on April 20, 2026. Nokia Litigation. Over the past several years, Nokia Corporation and Nokia Technologies Oy (collectively, “Nokia”) have alleged that WBD is infringing on their portfolio of patents related to the delivery of streaming video. On November 1, 2025, Nokia brought suit against WBD in certain jurisdictions, and WBD and Dplay Entertainment Limited brought suit in other jurisdictions, and filed a rate-setting proceeding in the High Court of Justice of England and Wales (the “Court”) against Nokia seeking a determination of a reasonable and non-discriminatory (“RAND”) royalty rate for a global license to certain Nokia patents, including standard-essential patents related to the H.264/AVC and H.265/HEVC standards and other non-essential multimedia patents. In June 2026, the Court determined that WBD is required to make an interim license payment to Nokia during the pendency of the litigation, which includes refundable and non-refundable components, and trial is currently scheduled for late 2026. As of June 30, 2026, the Company recorded an immaterial liability related to this matter. The amount of any adjustment to this liability as an outcome from the rate-setting process cannot be reasonably estimated. State Attorney General Complaint. On July 13, 2026, a coalition of state attorneys general from twelve states (the “States”) filed a complaint in the United States District Court for the Northern District of California seeking to enjoin PSKY’s proposed acquisition of WBD. The States allege that the PSKY Merger violates Section 7 of the Clayton Act because it is likely to substantially lessen competition in the distribution of certain theatrical films and the licensing of basic cable channels to distributors in the United States. On July 13, 2026, the States sought a temporary restraining order to prohibit PSKY and WBD from closing the transaction before the court decides whether the PSKY Merger is unlawful under Section 7 of the Clayton Act. On July 16, 2026, PSKY and WBD filed an opposition to the States’ motion for a temporary restraining order. On July 17, 2026, the court held a hearing on the States’ motion for a temporary restraining order. On July 20, 2026, the court granted the States’ motion for a temporary restraining order, prohibiting PSKY and WBD from closing the PSKY Merger. On July 23, 2026, the court extended the temporary restraining order to August 17, 2026. On July 24, 2026, defendants agreed not to complete the PSKY Merger until the earlier of (i) five days after the merits determination in this matter or (ii) June 1, 2027, and the court canceled the briefing schedule and hearing date for the States’ motion for preliminary injunction. On August 4, 2026, the court entered an order for a single 12-day trial beginning March 2, 2027 and ending March 19, 2027 covering both the States and WGA (as defined below) cases. Writers Guild of America Complaint. On July 14, 2026, the Writers Guild of America West and Writers Guild of America East (collectively, the “WGA”) filed a complaint in the United States District Court for the Northern District of California seeking to enjoin PSKY’s proposed acquisition of WBD. The WGA alleges that the PSKY Merger violates Section 7 of the Clayton Act because it will substantially lessen competition for writing services for WGA-covered “anticipated top grossing films,” writing services for episodic television shows, and writing services of writers under overall deals. The WGA sought a preliminary injunction blocking the PSKY Merger, along with attorneys’ fees and costs. The same district court judge who is presiding over the States’ complaint is presiding over the WGA case. On July 24, 2026, defendants agreed not to complete the PSKY Merger until the earlier of (i) five days after the merits determination in this matter or (ii) June 1, 2027, and the WGA’s motion for preliminary injunction was withdrawn. On August 4, 2026, the court entered an order for a single 12-day trial beginning March 2, 2027 and ending March 19, 2027 covering both the States and WGA cases. NOTE 16. REPORTABLE SEGMENTS The Company’s operating segments are determined based on: (i) financial information reviewed by its chief operating decision maker (“CODM”), the CEO, (ii) internal management and related reporting structure, and (iii) the basis upon which the CEO makes resource allocation decisions. The accounting policies of the reportable segments are the same as the Company’s, except that certain inter-segment transactions that are eliminated for consolidation are not eliminated at the segment level. Inter-segment transactions primarily include advertising and content licenses. The Company generally records inter-segment transactions of content licenses at market value. The Company does not report assets by segment because it is not used by the CODM to allocate resources or evaluate segment performance. 31 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) The Company evaluates the operating performance of its segments based on financial measures such as revenues and Adjusted EBITDA. Adjusted EBITDA is defined as operating income excluding: •employee share-based compensation; •depreciation and amortization; •restructuring and facility consolidation; •certain impairment charges; •gains and losses on business and asset dispositions; •third-party transaction and integration costs; •amortization of purchase accounting fair value step-up for content; •amortization of capitalized interest for content; and •other items impacting comparability. The CODM uses this measure to assess the operating results and performance of the segments, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. The Company believes Adjusted EBITDA is relevant to investors because it allows them to analyze the operating performance of each segment using the same metric management uses. The Company excludes employee share-based compensation, restructuring, certain impairment charges, gains and losses on business and asset dispositions, and transaction and integration costs from the calculation of Adjusted EBITDA due to their impact on comparability between periods. Integration costs include transformative system implementations and integrations, such as Enterprise Resource Planning systems, and may take several years to complete. The Company also excludes the depreciation of fixed assets and amortization of intangible assets, amortization of purchase accounting fair value step-up for content (which is included in consolidated costs of revenues), and amortization of capitalized interest for content, as these amounts do not represent cash payments in the current reporting period. The tables below present summarized financial information for each of the Company’s reportable segments (in millions). Revenues Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Streaming $ 3,079 $ 2,793 $ 5,966 $ 5,449 Studios 2,328 3,801 5,453 6,115 Global Linear Networks 3,991 4,803 8,368 9,577 Corporate 1 1 2 1 Inter-segment eliminations (682) (1,586) (2,179) (2,351) Total revenues $ 8,717 $ 9,812 $ 17,610 $ 18,791 Reconciliation of Revenues to Segment Adjusted EBITDA Three months ended June 30, 2026 Streaming Studios Global Linear Networks Revenues $ 3,079 $ 2,328 $ 3,991 Less: Content expense (a) 1,569 1,442 1,400 Personnel expense (b) 187 235 509 Marketing expense 344 307 137 Other segment expenses (c) 467 248 499 Segment Adjusted EBITDA $ 512 $ 96 $ 1,446 32 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Three months ended June 30, 2025 Streaming Studios Global Linear Networks Revenues $ 2,793 $ 3,801 $ 4,803 Less: Content expense (a) 1,600 2,135 2,105 Personnel expense (b) 191 232 505 Marketing expense 294 363 115 Other segment expenses (c) 415 208 566 Segment Adjusted EBITDA $ 293 $ 863 $ 1,512 Six months ended June 30, 2026 Streaming Studios Global Linear Networks Revenues $ 5,966 $ 5,453 $ 8,368 Less: Content expense (a) 3,100 3,045 2,992 Personnel expense (b) 373 486 1,038 Marketing expense 629 582 266 Other segment expenses (c) 914 469 992 Segment Adjusted EBITDA $ 950 $ 871 $ 3,080 Six months ended June 30, 2025 Streaming Studios Global Linear Networks Revenues $ 5,449 $ 6,115 $ 9,577 Less: Content expense (a) 3,104 3,474 3,937 Personnel expense (b) 377 462 1,001 Marketing expense 514 615 219 Other segment expenses (c) 822 442 1,115 Segment Adjusted EBITDA $ 632 $ 1,122 $ 3,305 (a) Content expense includes amortization, impairments, participations, residuals, development expense, and production costs, including talent costs, and is a component of costs of revenues. Content expense excludes content impairments and other development costs recorded in restructuring and other charges, amortization of purchase accounting fair value step-up for content, and amortization of capitalized interest for content as these items are excluded from the calculation of Adjusted EBITDA. (b) Personnel expense is a component of costs of revenues and selling, general and administrative expense. Personnel expense includes marketing personnel compensation and excludes commissions (included in other segment expenses) and talent costs (included in content expense). (c) Other segment expenses include distribution costs, other direct costs, software and hardware costs, IT services, professional and consulting fees, commissions, and certain other overhead costs. Other segment expenses exclude depreciation and amortization, amortization of purchase accounting fair value step-up for content, amortization of capitalized interest for content, employee share-based compensation, third-party transaction and integration costs, and other items impacting comparability as these items are excluded from the calculation of Adjusted EBITDA. 33 WARNER BROS. DISCOVERY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Reconciliation of segment adjusted EBITDA to loss before income taxes Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Streaming $ 512 $ 293 $ 950 $ 632 Studios 96 863 871 1,122 Global Linear Networks 1,446 1,512 3,080 3,305 Segment Adjusted EBITDA 2,054 2,668 4,901 5,059 Depreciation and amortization 1,159 1,447 2,385 2,994 Employee share-based compensation 187 173 337 293 Restructuring and other charges 113 80 317 134 Netflix Termination Fee (See Note 1) — — 2,800 — Transaction and integration costs 72 17 245 97 Facility consolidation costs — 4 — 9 Impairment and amortization of fair value step-up for content 77 388 179 628 Amortization of capitalized interest for content 11 3 14 9 Impairments and loss on dispositions 23 26 37 116 Corporate 298 316 567 549 Inter-segment eliminations (123) 399 252 452 Other income, net (50) (139) (12) (221) (Income) loss from equity investees, net (28) (5) (23) 2 Loss (gain) on extinguishment of debt, net 75 (2,958) 102 (2,954) Interest expense, net 511 463 1,092 931 (Loss) income before income taxes $ (271) $ 2,454 $ (3,391) $ 2,020 34