ITEM 1A. Risk Factors Investors should carefully review and consider the information regarding certain factors that could materially affect our business, results of operations, financial condition, and cash flows as set forth under Part I, Item 1A Risk Factors of the Companys 2024 Form 10-K, 10-K and Part II, Item 1A Risk Factors of the Companys Form 10-Q for the quarter ended June 30, 2025, and as supplemented by the additional risk factors factor described below. Additional risks and uncertainties not presently known to us or that we currently believe not to be material may also adversely impact our business, results of operations, financial position, and cash flows. 52 Risks Related to the Separation Failure to complete the Separation 53 The Companys review of strategic alternatives may not result in the Company pursuing a timely manner or at all transaction, could negatively impact the market price of cause disruptions to our common stock, as well as our future business and our financial condition, results of operations and cash flows. could adversely affect or delay the Separation. In June October 2025, the Company announced its plans to separate that the Company, in a tax-free transaction, into two publicly traded companies. The Separation is expected to be completed by mid-2026, though no assurance can be given as to whether the Separation Board will occur in accordance with the expected plans or anticipated timeline, or at all. Additionally, the specific assets, liabilities and entities to be separated have not yet been determined and may be changed, and we may determine to abandon any efforts with respect to the Separation at any time for any reason. If the Separation occurs, the Company may retain up to 19.9% of the shares of the spun-off company (Spinco), which it may use to de-lever the Companys balance sheet in evaluate a tax-efficient manner. No assurance can be given that we will be able to dispose broad range of the shares in Spinco retained by us on favorable terms, or at all, or the timing thereof. The form or other terms of the Separation may change over time, strategic options, including with respect continuing to advance the scope of Separation, a transaction for the businesses to be separated entire company or retained by us. The final determination to separate is subject to approval by the Board, the execution transactions for Warner Bros. and/or Discovery Global, as well as an alternative separation structure that would enable a merger of definitive documentation, Warner Bros. and satisfaction spin-off of customary conditions, including the effectiveness of appropriate filings with the SEC, receipt of one Discovery Global. There is no deadline or more opinions as to the tax-free nature of the Separation, the definitive timetable set for completion of the requisite financial statements and the availability of financing. Additionally, no assurance strategic alternatives review process. There can be given no assurance that the intended tax treatment this process will be achieved result in the Company pursuing a transaction or other outcome or that the Separation Company will qualify as tax-free be able to our shareholders for U.S. federal income tax purposes. Challenges in satisfying execute any strategic alternative that is identified and pursued. Any potential strategic alternative would be dependent on a number of these conditions, along with various factors that could be beyond our control, including, among other factors, including changes in the law, the macroeconomic environment, competitive things, market conditions, industry trends, regulatory approvals or clearances, approvals, and the uncertainty availability of the financial markets, could delay or prevent the completion of the Separation or cause the Separation to occur financing for a potential transaction on terms or conditions that are different or reasonable terms. In addition, a potential strategic alternative could result in less favorable tax treatment than expected. If the Separation is not completed in a timely or favorable manner or at all, our ongoing business may be adversely affected including as follows: expected tax treatment for the Separation, and we may experience negative reactions from the financial markets, and our stock price could decline; we may experience negative reactions from employees, customers, suppliers decline or other third parties; we may be subject to litigation, which could result in significant costs and expenses; managements focus may have been diverted from day-to-day business operations and pursuing other opportunities that could have been beneficial to the Company; we will still be required to pay certain costs and expenses incurred in connection therewith, such become more volatile, as legal, accounting and other professional fees and our costs a result of pursuing the Separation may be higher than anticipated and may not yield a discernible benefit if the Separation is not completed. The pendency strategic alternative instead of the Separation may cause disruption on our business. Separation. The pendency of the proposed Separation could cause disruptions to our business or business relationships, which could have an adverse impact on our results of operations. Parties with which we have business relationships, strategic alternatives review process, including distributors, advertisers and content providers, may be uncertain as continuing to advance the future of such relationships and may delay or defer certain business decisions, seek alternative relationships with third parties or seek to alter their present business relationships with us. Parties with whom we otherwise may have sought to establish business relationships may seek alternative relationships with third parties. Furthermore, the preparation for and execution of the Separation has placed and Separation, is expected to continue to place a significant burden on our management, employees and other internal resources. The diversion of managements attention away from day-to-day business concerns and any difficulties encountered in the separation review process could cause disruptions to our business and adversely affect our financial results. or delay the Separation. We have incurred and will continue also expect to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the Separation. We may also incur taxes and unanticipated costs throughout review process. Further, the process of completing the Separation. The substantial majority of these costs will be non-recurring expenses relating to the Separation, and many of these costs are payable regardless of whether or not the Separation is completed. We also could be subject lead us to litigation related to the Separation, which could prevent lose or delay the completion of the Separation fail to attract, retain and motivate key employees; could result in significant costs and expenses. 53 If completed, the Separation may not achieve the anticipated benefits and could expose us disruptions to new risks, including with respect to our existing indebtedness. If the Separation is completed, we may not realize the anticipated strategic, financial, operational, or other benefits from the Separation. In addition, we will also incur ongoing costs and dis-synergies in connection with, or as a result of, the Separation and related restructuring transactions, business relationships, including costs of operating as independent, publicly traded companies that the two businesses will no longer be able to share. We cannot predict with certainty if or when anticipated benefits will occur or the extent to which they will be achieved, or that the costs or dis-synergies of the Separation will not exceed the anticipated amounts. Following the Separation, we will be a smaller distributors, advertisers and less diversified company and may be more vulnerable to changing market conditions. While we believe that the Separation will position each company to better unlock its full standalone long-term potential, we cannot assure you that following the Separation we will be successful. Further, there can be no assurance that the combined value of the shares of the two resulting companies will be equal to content providers who could delay or greater than what the value of our common stock would have been had the Separation not occurred. We cannot predict the prices at which our common stock may trade after the Separation or the effect of the Separation on the trading prices of our common stock. In addition, following the completion of the Separation, we will not be able to rely on the earnings, assets or cash flow of the studios and streaming defer certain business unit, and that business will not provide funds to finance our working capital decisions, seek alternative relationships with third parties or other cash requirements. As a result, our ability seek to service our debt may be adversely affected. Risks Related to our Financial, Capital and Corporate Structure The terms of the Bridge Loan Facility may restrict our current and future operations, particularly our ability to respond to changes or to take certain actions. In June 2025, we and WMH, a wholly-owned subsidiary of the Company, entered into the Bridge Loan Facility alter their present business relationships with respect to an 18-month $17 billion term loan. The Bridge Loan Facility contains a number of restrictive covenants that impose operating restrictions on us us; and may limit our ability to engage in acts that may be in our long-term best interest, including the right to engage in mergers, consolidations and asset sales, incur debt and liens, enter into transactions with affiliates, pay dividends and certain other restricted payments and make certain restricted investments. The Bridge Loan Facility requires the dedication of a substantial portion of our cash flow from operations to service our debt, thereby reducing the amount of cash flow available for other purposes such as capital expenditures, investment business opportunities, and other purposes. The Bridge Loan Facility bears interest at a variable rate, which exposes could expose us to the risk of increased interest rates. If we are litigation. We do not able intend to service our debt or refinance our debt as it becomes due, we could be forced to take unfavorable actions, including limiting investment in our business or selling assets. A breach of the covenants, nonpayment of make any principal or interest when due under further announcements regarding the Bridge Loan Facility or upon the occurrence review of certain significant corporate events could result in an event of default under the Bridge Loan Facility, which may allow lenders to declare all loans outstanding under the Bridge Loan Facility (including accrued interest strategic alternatives unless and fees payable thereunder) immediately due and payable. Furthermore, an event of default under until the Bridge Loan Facility could result in the acceleration of any of our other debt to which Board approves a cross-acceleration specific transaction or cross-default provision applies. Any such default, and any resulting acceleration of our outstanding indebtedness, would have a material adverse effect on our business, financial condition, results of operations and cash flows. In addition, the obligations under the Bridge Loan Facility are secured by a lien on substantially all of the personal property assets of the Company, WMH, and certain of its wholly-owned domestic subsidiaries and are guaranteed by the Company and certain of its wholly owned subsidiaries. If we are unable to repay the amounts due and payable under the Bridge Loan Facility, the lenders could proceed against the collateral granted to them to secure the loans under the Bridge Loan Facility, and we may not have sufficient assets to repay such indebtedness. We may be unable to obtain permanent financing to refinance the Bridge Loan Facility on favorable terms in a timely manner otherwise determines further disclosure is appropriate or at all. Borrowings under the Bridge Loan Facility, net of necessary. Accordingly, speculation regarding any prepayments, will become payable in full on the earlier of (x) December 30, 2026 and (y) the date of the completion of the Separation. Although we expect developments related to refinance or replace the Bridge Loan Facility with permanent financing prior to the completion review of the Separation, we may be unable to obtain permanent financing on favorable terms in a timely manner or at all. The permanent financing could subject us to higher borrowing costs strategic alternatives and additional restrictive covenants not present in the agreements governing our existing debt or in the Bridge Loan Facility, which could reduce our profitability and diminish our operational flexibility. If we are unable perceived uncertainties related to refinance or replace the Bridge Loan Facility or access additional credit, or if borrowing costs dramatically increase, our ability to meet our short-term and long-term obligations could be adversely affected, which would have a material adverse effect on our business, financial condition, results future of operations and cash flows. 54 If the Separation were to fail to qualify for non-recognition treatment for U.S. federal income tax purposes, then we, Spinco and our shareholders may be subject to significant U.S. federal income taxes. We expect to receive one or more opinions from our tax advisors as to the tax-free nature of the Separation. A tax opinion is not binding on the IRS or the courts, and there can be no assurance that the IRS or a court will not take a contrary position. In addition, our tax advisors will rely on certain representations and covenants delivered by us and Spinco in rendering such opinions. If the IRS ultimately determines that the Separation is taxable, then we and our shareholders Company could incur significant tax liabilities in connection with the Separation. Spinco may be required to indemnify us for such tax liabilities pursuant to a tax matters agreement, but there can be no assurance that Spinco would have the resources or liquidity required to indemnify us for any such tax liability. Even if the Separation otherwise qualifies for non-recognition of gain or loss under Section 355 of the Internal Revenue Code ("the Code"), the Separation may be taxable to us (but not to cause our shareholders) pursuant to Section 355(e) of the Code if there is a 50% or more (by vote or value) change in ownership of either us or Spinco, directly or indirectly, as part of a plan or series of related transactions that include the Separation. For this purpose, any acquisitions of our or Spincos common stock within two years before or after the Separation are presumed price to be part of such a plan, although we or Spinco may be able to rebut that presumption based on applicable facts and circumstances or a safe harbor described in the U.S. income tax regulations. 55 fluctuate significantly.