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

FORM 10-Q

☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026
OR

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________
Commission File Number 001-42791
Paramount Skydance Corporation
(Exact name of registrant as specified in its charter)

Delaware |  | 99-3917985
(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)
1515 Broadway | New York, | New York |  | 10036
(Address of principal executive offices) |  | (Zip Code)

(212) 258-6000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class |  | Trading Symbol(s) |  | Name of each exchange on which registered
Class B Common Stock, $0.001 par value |  |  | PSKY |  |  |  | The Nasdaq Stock Market LLC |

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer | ☒ | Accelerated filer | ☐
Non-accelerated filer | ☐ | Smaller reporting company | ☐
|  | Emerging growth company | ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of common stock outstanding at July 31, 2026:
Class A Common Stock, par value $.001 per share—31,500,087
Class B Common Stock, par value $.001 per share— 1,090,445,692

PARAMOUNT SKYDANCE CORPORATION
INDEX TO FORM 10-Q

|  | Page
| PART I – FINANCIAL INFORMATION |
Item 1. | Financial Statements. |
| Consolidated Statements of Operations (Unaudited) | 3
| Consolidated Statements of Comprehensive Income (Unaudited) | 4
| Consolidated Balance Sheets (Unaudited) | 5
| Consolidated Statements of Cash Flows (Unaudited) | 6
| Consolidated Statements of Stockholders’ Equity (Unaudited) | 7
| Notes to Consolidated Financial Statements (Unaudited) | 9
Item 2. | Management’s Discussion and Analysis of Results of Operations and Financial Condition. | 45
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 88
Item 4. | Controls and Procedures. | 88
| PART II – OTHER INFORMATION |
Item 1. | Legal Proceedings. | 89
Item 1A. | Risk Factors. | 89
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 96
Item 6. | Exhibits. | 97

-3-
PART I – FINANCIAL INFORMATION

Item 1. | Financial Statements.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)

| Successor |  |  | Predecessor |  | Successor |  |  | Predecessor
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  |  | 2025 |  |  | 2026 |  |  | 2025
Revenues |  | $6,913 |  |  |  |  | $6,849 |  |  |  | $14,260 |  |  |  |  | $14,041 |
Costs and expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating |  | 4,443 |  |  |  |  | 4,624 |  |  |  | 9,298 |  |  |  |  | 9,585 |
Selling, general and administrative |  | 1,443 |  |  |  |  | 1,401 |  |  |  | 2,854 |  |  |  |  | 2,944 |
Depreciation and amortization |  | 364 |  |  |  |  | 87 |  |  |  | 726 |  |  |  |  | 175 |
Impairment charges |  | — |  |  |  |  | 157 |  |  |  | — |  |  |  |  | 157 |
Restructuring and transaction-related items |  | 188 |  |  |  |  | 181 |  |  |  | 291 |  |  |  |  | 266 |
Total costs and expenses |  | 6,438 |  |  |  |  | 6,450 |  |  |  | 13,169 |  |  |  |  | 13,127 |
Gain on dispositions |  | — |  |  |  |  | — |  |  |  | — |  |  |  |  | 35 |
Operating income |  | 475 |  |  |  |  | 399 |  |  |  | 1,091 |  |  |  |  | 949 |
Interest expense |  | (255) |  |  |  |  | (214) |  |  |  | (493) |  |  |  |  | (431) |
Interest income |  | 29 |  |  |  |  | 32 |  |  |  | 67 |  |  |  |  | 70 |
Other items, net |  | (34) |  |  |  |  | (39) |  |  |  | (58) |  |  |  |  | (76) |
Earnings before income taxes and equity in loss of investee companies |  | 215 |  |  |  |  | 178 |  |  |  | 607 |  |  |  |  | 512 |
Provision for income taxes |  | (120) |  |  |  |  | (50) |  |  |  | (275) |  |  |  |  | (150) |
Equity in loss of investee companies, net of tax |  | (54) |  |  |  |  | (67) |  |  |  | (116) |  |  |  |  | (140) |
Net earnings (Parent and noncontrolling interests) |  | 41 |  |  |  |  | 61 |  |  |  | 216 |  |  |  |  | 222 |
Net earnings attributable to noncontrolling interests |  | — |  |  |  |  | (4) |  |  |  | (7) |  |  |  |  | (13) |
Net earnings attributable to Parent |  | $41 |  |  |  |  | $57 |  |  |  | $209 |  |  |  |  | $209 |
Basic net earnings per common share attributable to Parent |  | $.04 |  |  |  |  | $.08 |  |  |  | $.19 |  |  |  |  | $.31 |
Diluted net earnings per common share attributable to Parent |  | $.04 |  |  |  |  | $.08 |  |  |  | $.19 |  |  |  |  | $.31 |
Weighted average number of common shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | 1,117 |  |  |  |  | 675 |  |  |  | 1,113 |  |  |  |  | 673 |
Diluted |  | 1,120 |  |  |  |  | 680 |  |  |  | 1,119 |  |  |  |  | 679 |

See notes to consolidated financial statements.
-4-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in millions)

| Successor |  | Predecessor |  |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  |  | Six Months Ended June 30,
| 2026 |  |  |  | 2025 |  | 2026 |  |  |  | 2025
Net earnings (Parent and noncontrolling interests) |  | $41 |  |  |  |  |  | $61 |  |  |  | $216 |  |  |  |  |  | $222 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cumulative translation adjustments |  | 27 |  |  |  |  |  | 84 |  |  |  | (23) |  |  |  |  |  | 152 |
Cash flow hedges |  | 8 |  |  |  |  |  | 8 |  |  |  | (28) |  |  |  |  |  | 14 |
Decrease to net actuarial loss and prior service costs |  | — |  |  |  |  |  | 11 |  |  |  | — |  |  |  |  |  | 21 |
Other comprehensive income (loss), net of tax (Parent and noncontrolling interests) |  | 35 |  |  |  |  |  | 103 |  |  |  | (51) |  |  |  |  |  | 187 |
Comprehensive income |  | 76 |  |  |  |  |  | 164 |  |  |  | 165 |  |  |  |  |  | 409 |
Less: Comprehensive income attributable to noncontrolling interests |  | 1 |  |  |  |  |  | 5 |  |  |  | 8 |  |  |  |  |  | 15 |
Comprehensive income attributable to Parent |  | $75 |  |  |  |  |  | $159 |  |  |  | $157 |  |  |  |  |  | $394 |

See notes to consolidated financial statements.
-5-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share amounts)

|  | At |  |  |  | At |
| June 30, 2026 |  | December 31, 2025
ASSETS |  |  |  |  |  |  |
Current Assets: |  |  |  |  |  |  |
Cash and cash equivalents |  | $1,627 |  |  |  | $3,274 |
Receivables, net |  | 6,178 |  |  |  | 6,615 |
Programming and other inventory |  | 1,655 |  |  |  | 1,461 |
Prepaid expenses and other current assets |  | 1,560 |  |  |  | 1,970 |
Total current assets |  | 11,020 |  |  |  | 13,320 |
Property and equipment, net |  | 2,216 |  |  |  | 2,195 |
Programming and other inventory |  | 15,641 |  |  |  | 15,028 |
Goodwill |  | 2,034 |  |  |  | 1,600 |
Intangible assets, net |  | 5,649 |  |  |  | 6,238 |
Operating lease assets |  | 1,033 |  |  |  | 1,126 |
Deferred income tax assets, net |  | 1,347 |  |  |  | 1,282 |
Advance consideration for WBD acquisition |  | 2,800 |  |  |  | — |
Other assets |  | 2,671 |  |  |  | 2,553 |
Total Assets |  | $44,411 |  |  |  | $43,342 |
LIABILITIES AND STOCKHOLDERS’ EQUITY |  |  |  |  |  |  |
Current Liabilities: |  |  |  |  |  |  |
Accounts payable |  | $511 |  |  |  | $906 |
Accrued expenses |  | 2,158 |  |  |  | 2,077 |
Participants’ share and royalties payable |  | 2,606 |  |  |  | 2,646 |
Accrued programming and production costs |  | 1,801 |  |  |  | 1,832 |
Deferred revenues |  | 1,486 |  |  |  | 1,355 |
Debt |  | 665 |  |  |  | 433 |
Other current liabilities |  | 1,373 |  |  |  | 1,350 |
Total current liabilities |  | 10,600 |  |  |  | 10,599 |
Long-term debt |  | 14,491 |  |  |  | 13,225 |
Participants’ share and royalties payable |  | 1,437 |  |  |  | 1,361 |
Pension and postretirement benefit obligations |  | 1,169 |  |  |  | 1,185 |
Deferred income tax liabilities, net |  | 68 |  |  |  | 85 |
Operating lease liabilities |  | 1,046 |  |  |  | 1,150 |
Programming obligations |  | 581 |  |  |  | 400 |
Other liabilities |  | 2,209 |  |  |  | 2,450 |
Commitments and contingencies (Note 14) |  |  |  |  |  |  |
Parent stockholders’ equity: |  |  |  |  |  |  |
Class A Common Stock, par value $.001 per share; 55 shares authorized; 32 (2026 and 2025) shares issued |  | — |  |  |  | — |
Class B Common Stock, par value $.001 per share; 7,000 (2026) and 5,500 (2025) shares authorized; 1,089 (2026) and 1,076 (2025) shares issued |  | 1 |  |  |  | 1 |
Additional paid-in capital |  | 13,307 |  |  |  | 13,386 |
Accumulated deficit |  | (1,544) |  |  |  | (1,753) |
Accumulated other comprehensive income |  | 7 |  |  |  | 59 |
Total Parent stockholders’ equity |  | 11,771 |  |  |  | 11,693 |
Noncontrolling interests |  | 1,039 |  |  |  | 1,194 |
Total Equity |  | 12,810 |  |  |  | 12,887 |
Total Liabilities and Equity |  | $44,411 |  |  |  | $43,342 |

See notes to consolidated financial statements.
-6-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)

| Successor |  | Predecessor |
| Six Months Ended June 30, |  |  |  | Six Months Ended June 30,
| 2026 |  |  |  | 2025
Operating Activities: |  |  |  |  |  |  |  |  |
Net earnings (Parent and noncontrolling interests) |  | $216 |  |  |  |  |  | $222 |
Adjustments to reconcile net earnings to net cash flow provided by operating activities: |  |  |  |  |  |  |  |  |
Depreciation and amortization |  | 726 |  |  |  |  |  | 175 |
Impairment charges |  | — |  |  |  |  |  | 157 |
Deferred tax provision |  | 50 |  |  |  |  |  | 21 |
Stock-based compensation |  | 161 |  |  |  |  |  | 87 |
Gain on dispositions |  | — |  |  |  |  |  | (35) |
Equity in loss of investee companies, net of tax and distributions |  | 118 |  |  |  |  |  | 141 |
Change in assets and liabilities |  | (767) |  |  |  |  |  | (429) |
Net cash flow provided by operating activities |  | 504 |  |  |  |  |  | 339 |
Investing Activities: |  |  |  |  |  |  |  |  |
Investments |  | (172) |  |  |  |  |  | (148) |
Capital expenditures |  | (150) |  |  |  |  |  | (102) |
Advance consideration for WBD acquisition |  | (2,800) |  |  |  |  |  | — |
Proceeds from dispositions |  | 13 |  |  |  |  |  | 66 |
Other investing activities |  | (6) |  |  |  |  |  | — |
Net cash flow used for investing activities |  | (3,115) |  |  |  |  |  | (184) |
Financing Activities: |  |  |  |  |  |  |  |  |
Borrowings under credit facility |  | 2,700 |  |  |  |  |  | — |
Repayment of credit facility borrowings |  | (900) |  |  |  |  |  | — |
Repayment of notes and debentures |  | (347) |  |  |  |  |  | — |
Dividends paid on common stock |  | (117) |  |  |  |  |  | (70) |
Payment of payroll taxes in lieu of issuing shares for stock-based compensation |  | (104) |  |  |  |  |  | (26) |
Payments to noncontrolling interests |  | (189) |  |  |  |  |  | (65) |
Other financing activities |  | (51) |  |  |  |  |  | — |
Net cash flow provided by (used for) financing activities |  | 992 |  |  |  |  |  | (161) |
Effect of exchange rate changes on cash and cash equivalents |  | (28) |  |  |  |  |  | 84 |
Net (decrease) increase in cash and cash equivalents |  | (1,647) |  |  |  |  |  | 78 |
Cash and cash equivalents at beginning of year |  | 3,274 |  |  |  |  |  | 2,661 |
Cash and cash equivalents at end of period |  | $1,627 |  |  |  |  |  | $2,739 |

See notes to consolidated financial statements.
-7-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited; in millions)

Three Months Ended June 30, 2026 |
| Class A and B Common Stock Outstanding | Additional Paid-In Capital | Accumulated Deficit |  | Accumulated Other Comprehensive Income (Loss) |  | Total Parent Stockholders’ Equity |  | Noncontrolling Interests |  | Total Equity
(Successor) | (Shares) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2026 | 1,118 |  | $1 |  | $13,316 |  |  | $(1,585) |  |  |  | $(27) |  |  |  | $11,705 |  |  |  | $1,044 |  |  | $12,749
Stock-based compensation activity | 3 |  | — |  | 50 |  |  | — |  |  |  | — |  |  |  | 50 |  |  |  | — |  |  | 50
Common stock dividends | — |  | — |  | (59) |  |  | — |  |  |  | — |  |  |  | (59) |  |  |  | — |  |  | (59)
Noncontrolling interests | — |  | — |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (6) |  |  | (6)
Net earnings | — |  | — |  | — |  |  | 41 |  |  |  | — |  |  |  | 41 |  |  |  | — |  |  | 41
Other comprehensive income | — |  | — |  | — |  |  | — |  |  |  | 34 |  |  |  | 34 |  |  |  | 1 |  |  | 35
June 30, 2026 | 1,121 |  | $1 |  | $13,307 |  |  | $(1,544) |  |  |  | $7 |  |  |  | $11,771 |  |  |  | $1,039 |  |  | $12,810

Six Months Ended June 30, 2026 |
| Class A and B Common Stock Outstanding | Additional Paid-In Capital |  | Accumulated Deficit |  | Accumulated Other Comprehensive Income (Loss) |  | Total Parent Stockholders’ Equity |  | Noncontrolling Interests |  | Total Equity
(Successor) | (Shares) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2025 | 1,108 |  | $1 |  | $13,386 |  |  |  | $(1,753) |  |  |  | $59 |  |  |  | $11,693 |  |  |  | $1,194 |  |  | $12,887
Stock-based compensation activity and other | 13 |  | — |  | 57 |  |  |  | — |  |  |  | — |  |  |  | 57 |  |  |  | — |  |  | 57
Common stock dividends | — |  | — |  | (119) |  |  |  | — |  |  |  | — |  |  |  | (119) |  |  |  | — |  |  | (119)
Noncontrolling interests | — |  | — |  | (17) |  |  |  | — |  |  |  | — |  |  |  | (17) |  |  |  | (163) |  |  | (180)
Net earnings | — |  | — |  | — |  |  |  | 209 |  |  |  | — |  |  |  | 209 |  |  |  | 7 |  |  | 216
Other comprehensive income (loss) | — |  | — |  | — |  |  |  | — |  |  |  | (52) |  |  |  | (52) |  |  |  | 1 |  |  | (51)
June 30, 2026 | 1,121 |  | $1 |  | $13,307 |  |  |  | $(1,544) |  |  |  | $7 |  |  |  | $11,771 |  |  |  | $1,039 |  |  | $12,810

See notes to consolidated financial statements.
-8-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(Unaudited; in millions)

Three Months Ended June 30, 2025 |
| Class A and B Common Stock Outstanding | Additional Paid-In Capital | Treasury Stock |  | Retained Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Total Parent Stockholders’ Equity |  | Noncontrolling Interests |  | Total Equity
(Predecessor) | (Shares) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
March 31, 2025 | 674 |  | $1 |  | $33,412 |  | $(22,958) |  |  | $7,604 |  |  |  | $(1,521) |  |  |  | $16,538 |  |  |  | $390 |  |  | $16,928
Stock-based compensation activity | — |  | — |  | 43 |  | — |  |  | — |  |  |  | — |  |  |  | 43 |  |  |  | — |  |  | 43
Common stock dividends | — |  | — |  | — |  | — |  |  | (35) |  |  |  | — |  |  |  | (35) |  |  |  | — |  |  | (35)
Noncontrolling interests | — |  | — |  | — |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 11 |  |  | 11
Net earnings | — |  | — |  | — |  | — |  |  | 57 |  |  |  | — |  |  |  | 57 |  |  |  | 4 |  |  | 61
Other comprehensive income | — |  | — |  | — |  | — |  |  | — |  |  |  | 102 |  |  |  | 102 |  |  |  | 1 |  |  | 103
June 30, 2025 | 674 |  | $1 |  | $33,455 |  | $(22,958) |  |  | $7,626 |  |  |  | $(1,419) |  |  |  | $16,705 |  |  |  | $406 |  |  | $17,111

Six Months Ended June 30, 2025 |
| Class A and B Common Stock Outstanding | Additional Paid-In Capital | Treasury Stock |  | Retained Earnings |  | Accumulated Other Comprehensive Income (Loss) |  | Total Parent Stockholders’ Equity |  | Noncontrolling Interests |  | Total Equity
(Predecessor) | (Shares) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
December 31, 2024 | 671 |  | $1 |  | $33,394 |  | $(22,958) |  |  | $7,487 |  |  |  | $(1,604) |  |  |  | $16,320 |  |  |  | $462 |  |  | $16,782
Stock-based compensation activity | 3 |  | — |  | 61 |  | — |  |  | — |  |  |  | — |  |  |  | 61 |  |  |  | — |  |  | 61
Common stock dividends | — |  | — |  | — |  | — |  |  | (70) |  |  |  | — |  |  |  | (70) |  |  |  | — |  |  | (70)
Noncontrolling interests | — |  | — |  | — |  | — |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (71) |  |  | (71)
Net earnings | — |  | — |  | — |  | — |  |  | 209 |  |  |  | — |  |  |  | 209 |  |  |  | 13 |  |  | 222
Other comprehensive income | — |  | — |  | — |  | — |  |  | — |  |  |  | 185 |  |  |  | 185 |  |  |  | 2 |  |  | 187
June 30, 2025 | 674 |  | $1 |  | $33,455 |  | $(22,958) |  |  | $7,626 |  |  |  | $(1,419) |  |  |  | $16,705 |  |  |  | $406 |  |  | $17,111

See notes to consolidated financial statements.
-9-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in millions, except per share amounts)
1) DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business—Paramount Skydance Corporation is a global media and entertainment company with a
portfolio that includes Paramount Pictures, Paramount Television, CBS, CBS News, CBS Sports, Nickelodeon,
MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance Animation, Film, and Television,
Paramount Sports Entertainment and Paramount Games Studio. Beginning in 2026, we transitioned our reporting
structure into three new segments: Studios, Direct-to-Consumer, and TV Media (see Note 13). References to
“Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Skydance Corporation and its consolidated
subsidiaries, unless the context otherwise requires.
Warner Bros. Discovery Merger—On February 27, 2026, Paramount and Warner Bros. Discovery, Inc. (“WBD”)
announced a definitive merger agreement (the “WBD Merger Agreement”) under which Paramount will acquire
WBD (the “WBD Merger”). The closing of the WBD Merger is subject to customary closing conditions, including
regulatory clearances. The anticipated closing of the WBD Merger has been delayed as a result of a lawsuit, with
the parties agreeing to postpone closing until the earlier of five days following the court’s ruling or June 1, 2027.
Under the terms of the WBD Merger Agreement, Paramount will pay $31.00 per WBD share to acquire all
outstanding shares of WBD, which at the time of the WBD Merger Agreement represented an equity value of
$80.9 billion, and will assume WBD’s net debt. At March 31, 2026, WBD’s debt (excluding finance leases) was
comprised of $17.7 billion of senior notes and $15.0 billion of borrowings from a bridge facility. Furthermore, if
the WBD Merger closes, Paramount will pay WBD stockholders a per share “ticking fee” of $0.00277778 for each
day after September 30, 2026 that the WBD Merger has not closed, up to a maximum of $0.25 per WBD share per
90 calendar day period (the “Ticking Consideration”). No Ticking Consideration is payable if the WBD Merger
Agreement is terminated pursuant to its terms. The WBD Merger Agreement has a termination date of March 4,
2027, subject to one automatic extension to June 4, 2027. Also, under the terms of the WBD Merger Agreement, in
the first quarter of 2026, Paramount paid a termination fee of $2.8 billion to Netflix, Inc. (“Netflix”) on behalf of
WBD in connection with the termination of a prior merger agreement between Netflix and WBD (see Note 15).
This payment was initially funded with cash on hand and a $2.15 billion borrowing from our credit facility (see
Note 7) and, in accordance with the Subscription Agreements described below, entered into by the Ellison Parties
(as defined below), such amount will ultimately be funded by the $46.7 billion to be received from the Ellison
Parties.
If the WBD Merger Agreement is terminated because the WBD Merger cannot close due to a failure to obtain
antitrust or regulatory approval, or because a court order prevents the WBD Merger from closing on antitrust
grounds, Paramount will owe WBD a $7.0 billion Regulatory Termination Fee (as defined in the WBD Merger
Agreement). In accordance with the Subscription Agreements, this termination fee and the previously paid
$2.8 billion Netflix termination fee described above would be funded by the Ellison Parties in exchange for shares
of Paramount Skydance Corporation Class B Common Stock (as defined below) at $16.02 per share.
WBD will owe Paramount a $3.0 billion termination fee under certain circumstances, including if WBD terminates
the WBD Merger Agreement to enter into a definitive agreement for an alternative acquisition proposal.
Concurrent with the execution of the WBD Merger Agreement (i) The Lawrence J. Ellison Revocable Trust, u/a/d
1/22/88, as amended (the “Trust”), and Lawrence J. Ellison (together with the Trust, the “Ellison Parties”) and (ii)
RedBird Capital Partners Fund IV (Master), L.P. (“RedBird” and, together with the Trust, the “Equity Investors”)
entered into subscription agreements (collectively, the “Subscription Agreements”) providing for a private
placement investment in Class B common stock of Paramount Skydance Corporation (“Paramount Skydance
Corporation Class B Common Stock”), for an aggregate amount of up to $46.7 billion (subject to increase if the
-10-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Ticking Consideration or certain other additional amounts as defined in the WBD Merger Agreement are required)
from the Trust and $250 million from RedBird pursuant to the terms of the Subscription Agreements.
In April 2026, we announced that the Equity Investors had determined, as permitted under the Subscription
Agreements, to assign their subscription rights thereunder (such assignments, the “Equity Syndication” and the
assignees, the “Equity Syndication Parties”) to the Equity Syndication Parties. The Equity Syndication Parties are
composed of affiliates of the Ellison Parties and RedBird, as well as the following institutional investors: The
Public Investment Fund, L’Imad 1st SPV 2 Exempt RSC LTD (an investment vehicle of L’Imad Holding, an Abu
Dhabi sovereign wealth fund), QIA TMT Holding LLC (an investment vehicle of the Qatar Investment Authority),
and LionTree Investment Fund, L.P. The aggregate allocations under the Equity Syndication total to the full
amount of the commitments under the Subscription Agreements. At closing of the WBD Merger, Paramount will
issue to each Equity Syndication Party a number of newly issued nonvoting shares of Paramount Skydance
Corporation Class B Common Stock (or securities convertible into shares) equal to its allocated amount divided by
the Syndication Purchase Price, defined as the 20-trading-day daily volume-weighted average price of Paramount
Skydance Corporation Class B Common Stock determined as of the third business day prior to the closing of the
WBD Merger, subject to a ceiling of $16.02 per share and a floor of $12.00 per share. The Equity Syndication does
not relieve the Equity Investors of their contractual commitments made to the Company. To the extent that any
Equity Syndication Party does not perform under its syndication assignment, the obligation of the Equity Investors
to fund the related amount of the commitments would continue to be required under the Subscription Agreements.
Following the closing, the Ellison Family (as defined below) and RedBird will remain the sole holders of
Paramount Class A Common Stock, representing 100% of the voting shares of Paramount. For the purpose of
determining the controlling ownership of Paramount, the Ellison family is comprised of Lawrence J. Ellison and
David Ellison (the “Ellison Family”). David Ellison is the son of Lawrence J. Ellison, and Lawrence J. Ellison and
David Ellison are accordingly considered immediate family members.
We have also secured commitments for debt financing totaling $54 billion, which include a $49 billion 364-day
senior secured bridge loan facility, which we plan, subject to market conditions and other timing considerations, to
reduce or replace with permanent financing (which may include issuance of debt securities) on or prior to the
closing of the WBD Merger and, in connection with a credit agreement entered into in April 2026 (the “Pro Rata
Credit Agreement”), $2.50 billion three-year senior secured term A loans and $2.50 billion five-year senior secured
term A loans. The term A loans will be made in a single borrowing on the closing date of the WBD Merger. The
Pro Rata Credit Agreement also provides for a $5.00 billion five-year senior secured revolving credit facility,
which will be used for general corporate purposes, and will replace our existing revolving credit facility (see Note
7). The availability and initial funding of the facilities under the Pro Rata Credit Agreement and the bridge loan
facility (if not replaced by permanent financing) are subject to the satisfaction or waiver of customary conditions
set forth in the Pro Rata Credit Agreement and the bridge commitment papers, including the closing of the WBD
Merger.
In addition, following the closing of the WBD Merger, each holder of Paramount Skydance Corporation Class B
Common Stock (excluding any Equity Investor or affiliate thereof) as of a record date to be determined will
receive, without payment of any consideration, one 10-year warrant (each, a “Warrant”) for each share held,
exercisable at an initial exercise price per share equal to the Syndication Purchase Price and subject to customary
anti-dilution and fundamental change make-whole adjustments. Beginning on the third anniversary of issuance, we
may call the Warrants if the closing price of our Class B Common Stock equals or exceeds $30.00 for at least 20
trading days during any 30 consecutive trading day period. We intend to apply to list the Warrants for trading on
the Nasdaq Stock Market LLC (“Nasdaq”) separate from our Class B Common Stock, subject to applicable
approvals. The planned Warrant issuance is in lieu of a previously planned rights offering at $16.02 per share. In
-11-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
connection with the Warrant issuance, existing Paramount restricted stock units (“RSUs”) are expected to be
equitably adjusted pursuant to pre-existing anti-dilution provisions in Paramount equity plans.
WBD Debt—In May 2026, we commenced (i) exchange offers, which are expected to result in the exchange of up
to $12.7 billion aggregate principal amount of certain of WBD’s senior notes for newly issued Paramount notes,
and (ii) tender offers for cash for up to $2.4 billion aggregate principal amount of other WBD senior notes, in each
case conditioned on the closing of the WBD Merger. In June 2026, WBD entered into a seven-year $13.0 billion
term loan (“First Lien Credit Agreement”), and a seven-year €1.7 billion term loan (the “WBD Term Loans”). The
proceeds were used to repay the $15.0 billion bridge facility WBD had outstanding on March 31, 2026. We plan to
replace or refinance the WBD Term Loans, if not refinanced by WBD prior to closing of the WBD Merger.
The NAI Transaction—On August 7, 2025, pursuant to a purchase and sale agreement dated July 7, 2024, certain
affiliates of investors in Skydance Media, LLC (“Skydance”), comprised of entities controlled by the Ellison
Family and affiliates of RedBird Capital Partners (collectively the “NAI Equity Investors”), purchased all of the
outstanding equity interests of Paramount Global’s controlling stockholder, National Amusements, Inc. (“NAI”)
from the shareholders of NAI (the “NAI Transaction”).
The Skydance Transactions—Also on August 7, 2025, following the completion of the NAI Transaction and
pursuant to the Transaction Agreement dated as of July 7, 2024, Paramount Global and Skydance became wholly-
owned subsidiaries of Paramount Skydance Corporation (the transactions contemplated by the Transaction
Agreement, the “Skydance Transactions”). Paramount Skydance Corporation, formerly known as New Pluto
Global, Inc., was formed on June 3, 2024 to consummate the Transactions and was a wholly-owned direct
subsidiary of Paramount Global until, through a series of mergers, it became the holding company of Paramount
Global and Skydance as part of the Skydance Transactions.
Concurrent with the NAI Transaction, the NAI Equity Investors and certain other affiliates of investors in
Skydance made an investment of $6.0 billion into Paramount Skydance Corporation (the “PIPE Transaction”) in
exchange for 400 million newly issued shares of Paramount Skydance Corporation Class B Common Stock for a
purchase price of $15.00 per share, and the NAI Equity Investors also received warrants to purchase 200 million
shares of Paramount Skydance Corporation Class B Common Stock at an initial exercise price of $30.50 per share
(subject to customary anti-dilution adjustments), which expire five years after issuance. $4.45 billion of the PIPE
Transaction investment was used to fund the cash-stock election discussed below and $1.52 billion of cash was
provided to the Company.
The Skydance Transactions also included: (1) a transaction pursuant to which each outstanding Skydance
membership unit held by Skydance investors and each Skydance Phantom Unit was converted into the right to
receive the applicable portion of 316.7 million shares of Paramount Skydance Corporation Class B Common Stock
(313.8 million shares after reduction in connection with certain tax withholding requirements), and (2) a cash-stock
election offered to holders of Paramount Global common stock pursuant to which (a) shares of Paramount Global
Class A Common Stock held by stockholders other than NAI or its subsidiaries were converted, at the
stockholders’ election, into the right to receive either $23.00 in cash (“Class A Cash Consideration”) or 1.5333
shares of Paramount Skydance Corporation Class B Common Stock (“Class A Stock Consideration”), and (b)
shares of Paramount Global Class B Common Stock held by stockholders other than NAI or its subsidiaries, the
NAI Equity Investors and certain other affiliates of investors in Skydance referred to above were converted, at the
stockholders’ election, into the right to receive either $15.00 in cash (“Class B Cash Consideration”), subject to
proration, or one share of Paramount Skydance Corporation Class B Common Stock (“Class B Stock
Consideration”). The shares of Paramount Class A Common Stock held by NAI and its subsidiaries converted into
shares of Class A common stock, par value $0.001 per share. Shares of Paramount Global Class A Common Stock
-12-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
for which elections to receive Class A Cash Consideration or Class A Stock Consideration were not made or were
validly revoked were automatically converted into Class A Stock Consideration. Shares of Paramount Global Class
B Common Stock for which elections to receive Class B Cash Consideration were not made or were validly
revoked were converted automatically into one share of Paramount Skydance Corporation Class B Common Stock.
See Note 10.
Shares of Paramount Skydance Corporation Class B Common Stock trade on Nasdaq under the ticker symbol
“PSKY.” All shares of Paramount Global Class A Common Stock and Class B Common Stock have been delisted
from Nasdaq and have been cancelled and cease to exist.
Holders of shares of Class A common stock of Paramount Skydance Corporation (“Paramount Skydance
Corporation Class A Common Stock”) are entitled to one vote per share with respect to all matters on which the
holders of Paramount Skydance Corporation common stock are entitled to vote. Holders of Paramount Skydance
Corporation Class B Common Stock do not have voting rights. Following the closing of the Skydance Transactions
and the NAI Transaction, NAI, which was renamed Harbor Lights Entertainment, Inc., and its subsidiaries held
100.0% of the Paramount Skydance Corporation Class A Common Stock. Accordingly, entities controlled by the
Ellison Family indirectly hold approximately 77.5% of the Paramount Skydance Corporation Class A Common
Stock through their collective approximate 77.5% ownership interest in Harbor Lights Entertainment, Inc., and as a
result the Ellison Family is the controlling stockholder and the ultimate parent of Paramount (“Ultimate Parent”).
Pushdown of Ultimate Parent’s Basis—At the time Paramount Global and Skydance became subsidiaries of
Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance, and as a
result, this transaction has been accounted for as a transaction between entities under common control. As a
transaction between entities under common control, the net assets were combined at the Ultimate Parent’s basis,
which for Paramount Global was deemed to be the estimated fair value as of August 7, 2025, the date of the
closing of the NAI Transaction, which was the point at which the Ellison Family obtained control of Paramount
Global (see Note 2). As a result, the net assets of Paramount Global were recorded at their fair values as of this
date. Since the net assets of Skydance were already at the Ultimate Parent’s basis, no adjustment to the fair value
of net assets was necessary, and Skydance was combined with Paramount Global’s net assets at the Ultimate
Parent’s basis as of this date.
Due to the pushdown of the Ultimate Parent’s basis, which resulted in a new basis of accounting, the results of
operations, financial position and cash flows are not comparable between the Successor and Predecessor periods.
Accordingly, our consolidated financial statements and footnote disclosures are presented in distinct periods. The
periods prior to the closing of the Skydance Transactions and the NAI Transaction include only Paramount Global
and are identified as “Predecessor,” and the periods beginning on August 7, 2025 reflect Paramount Skydance
Corporation and are identified as “Successor.” In addition, we are required to present segment information for the
Predecessor period based on our previous segments, Filmed Entertainment, Direct-to-Consumer, and TV Media
(see Note 13).
Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared on a
basis consistent with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) for
interim financial information and pursuant to the rules of the Securities and Exchange Commission. These
financial statements should be read in conjunction with the more detailed financial statements and notes thereto
included in our Form 8-K filed with the Securities and Exchange Commission on May 13, 2026, which was filed in
order to recast the financial statements included in our Annual Report on Form 10-K for the year ended
December 31, 2025 to reflect our new segment presentation.
-13-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
In the opinion of management, the accompanying unaudited consolidated financial statements reflect all
adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of our financial
position, results of operations and cash flows for the periods presented. Certain previously reported amounts have
been reclassified to conform to the current presentation.
Use of Estimates—The preparation of our consolidated financial statements in conformity with U.S. GAAP
requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities as of the date of the financial statements and the
reported amounts of revenues and expenses during the periods presented. We base our estimates on historical
experience and on various other assumptions that are believed to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may vary from these estimates under different assumptions or
conditions.
Net Earnings per Common Share—Basic net earnings per share (“EPS”) is based upon net earnings available to
common stockholders divided by the weighted average number of common shares outstanding during the period.
Weighted average shares for diluted EPS reflect the effect of the assumed exercise of stock options and warrants,
and vesting of RSUs or performance share units only in the periods in which such effect would have been dilutive.
The table below presents stock options, RSUs, and warrants excluded from the calculations of diluted EPS because
their inclusion would have been antidilutive.

| Successor |  | Predecessor |  |  | Successor |  |  | Predecessor
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
(in millions) | 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Stock options and RSUs |  | 56 |  |  |  |  | 5 |  |  |  | 60 |  |  |  |  | 5 |
Warrants |  | 200 |  |  |  |  | — |  |  |  | 200 |  |  |  |  | — |

The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted
EPS.

| Successor |  |  | Predecessor |  | Successor |  |  | Predecessor
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
(in millions) | 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Weighted average shares for basic EPS |  | 1,117 |  |  |  |  | 675 |  |  |  | 1,113 |  |  |  |  | 673 |
Dilutive effect of shares issuable under stock-based compensation plans |  | 3 |  |  |  |  | 5 |  |  |  | 6 |  |  |  |  | 6 |
Weighted average shares for diluted EPS |  | 1,120 |  |  |  |  | 680 |  |  |  | 1,119 |  |  |  |  | 679 |

-14-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Accounting Pronouncements Not Yet Adopted
Disaggregation of Income Statement Expenses
In November 2024, the Financial Accounting Standards Board (“FASB”) issued guidance requiring disclosure in
the notes to the financial statements of the disaggregation of relevant expense captions on the income statement
into specified expense categories, including employee compensation, as well as disclosure of total selling expenses.
The guidance is effective for us for the year ending December 31, 2027, and for all interim and annual periods
thereafter, and may be applied either prospectively or retrospectively.
Internal-use Software Costs
In September 2025, the FASB issued updated guidance on the recognition and disclosure of internal-use software
costs. This guidance eliminates capitalization based on software development stages and requires that
capitalization of internal-use software development costs begin when (1) management has authorized and
committed to funding the software project and (2) it is probable the project will be completed and the software will
be used to perform its intended function. The guidance is effective for us for the year ending December 31, 2028,
including interim periods within that year, and may be adopted prospectively, retrospectively, or using a modified
transition approach for projects in process. We are currently evaluating the impact of this guidance on our
consolidated financial statements.
-15-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
2) PUSHDOWN OF ULTIMATE PARENT'S BASIS
The NAI Transaction resulted in a change in control of our Predecessor, Paramount Global, that established a new
accounting basis, which reflects the estimated fair value of Paramount Global as indicated by the NAI Transaction
and the Skydance Transactions. The table below presents the calculation of the Ultimate Parent’s basis in
Paramount Global as of the date these transactions closed.

Estimated value of NAI Transaction consideration attributable to Paramount Global common stock |  | $2,124 | (a)
Cash paid to stockholders (see Note 10) |  | 4,454 | (b)
Proceeds from PIPE Transaction, net of subscription discount |  | 1,517 |
Outstanding Paramount Global RSU Awards and Paramount Global PSU Awards |  | 80 | (c)
Remaining shares of Paramount Skydance Corporation Class B Common Stock |  | 3,520 | (d)
Paramount Global basis at August 7, 2025 |  | $11,695 |

(a) In the NAI Transaction, the NAI Equity Investors purchased all of the outstanding equity interests of NAI. Based on
valuation analyses of NAI’s assets and liabilities, the estimated value attributable to the shares of Paramount Global
common stock held by NAI and its subsidiaries is $2.1 billion. This amount increased $107 million from the preliminary
estimate included in our quarterly report on Form 10-Q for the third quarter of 2025, which resulted in an increase in
Paramount Global’s basis in this amount.
(b) Reflects cash paid to holders of Paramount Global Class A Common Stock and Paramount Global Class B Common
Stock who elected to receive the Class A Cash Consideration and Class B Cash Consideration of $23.00 per share and
$15.00 per share, respectively, in the Skydance Transactions. Such payout was funded by the $6.0 billion PIPE
Transaction.
(c) Reflects the fair value of outstanding Paramount Global RSU Awards and Paramount Global PSU Awards attributable to
employees’ service prior to the Skydance Transactions and the NAI Transaction. The fair value is based on the closing
stock price of Paramount Global Class B Common Stock on August 6, 2025 of $11.04 per share. The remaining fair
value of outstanding Paramount Global RSU Awards and Paramount Global PSU Awards, which were assumed by
Paramount Skydance Corporation and converted into awards of restricted stock units covering an equivalent number of
shares of Paramount Skydance Corporation Class B Common Stock are being expensed over their remaining vesting
periods.
(d) Reflects 318.8 million shares of Paramount Skydance Corporation Class B Common Stock owned by holders of
Paramount Global Class A and Paramount Global Class B Common Stock following the Skydance Transactions, other
than those held directly or indirectly by NAI or its affiliates, not converted into cash, valued at the closing stock price of
Paramount Global Class B Common Stock on August 6, 2025 of $11.04 per share. Certain holders of Paramount Global
Class A Common Stock received the Class A Stock Consideration, which resulted in the conversion of 2.0 million shares
of Paramount Global Class A Common Stock into approximately 3.1 million shares of Paramount Skydance Corporation
Class B Common Stock, based on the exchange ratio of one share of Paramount Global Class A Common Stock to
1.5333 shares of Paramount Skydance Corporation Class B Common Stock.
-16-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
The table below details the preliminary estimated fair values of Paramount Global’s assets, liabilities and
noncontrolling interests at the Ultimate Parent’s basis as of August 7, 2025, including measurement period
adjustments recorded subsequent to the third quarter of 2025. The impact on our statement of operations in 2026
from the amounts that would have been recognized in the third quarter of 2025 had these measurement period
adjustments been recognized as of the acquisition date were not material. The fair values were determined based on
valuation techniques that use unobservable inputs (Level 3 in the fair value hierarchy). Significant judgments in
these valuations include long-term projections, discount rates, royalty rates, and decay rates. While the
determination of the estimated fair values of Paramount Global’s assets, liabilities, and noncontrolling interests
was substantially complete as of June 30, 2026, if within one year of the August 7, 2025 closing date we become
aware of information that existed as of such closing date that affects these fair values, additional measurement
period adjustments may be required.

|  | Allocation of Ultimate Parent’s Basis
|  | Preliminary |  | Measurement Period Adjustments |  | Preliminary, Revised
Assets: |  |  |  |  |  |
Cash and cash equivalents |  | $3,977 |  | $— |  | $3,977
Receivables, net |  | 5,980 |  | (19) |  | 5,961
Programming and other inventory, current |  | 1,970 |  | (66) |  | 1,904
Prepaid expenses and other current assets |  | 1,641 |  | — |  | 1,641
Property and equipment, net (a) |  | 2,118 |  | (2) |  | 2,116
Programming and other inventory, noncurrent (b) |  | 13,599 |  | (456) |  | 13,143
Goodwill (c) |  | 947 |  | 863 |  | 1,810
Intangible assets, net (d) |  | 6,748 |  | 11 |  | 6,759
Operating lease assets |  | 875 |  | 39 |  | 914
Deferred income tax assets, net |  | 1,200 |  | 48 |  | 1,248
Other noncurrent assets |  | 2,470 |  | 14 |  | 2,484
Total assets |  | $41,525 |  | $432 |  | $41,957
Liabilities: |  |  |  |  |  |
Long-term debt (e) |  | $13,619 |  | $— |  | $13,619
Pension and postretirement benefit obligations (f) |  | 1,390 |  | — |  | 1,390
Deferred income tax liabilities, net |  | 306 |  | (186) |  | 120
Operating lease liabilities |  | 1,219 |  | (3) |  | 1,216
Programming obligations (g) |  | 2,017 |  | 209 |  | 2,226
Other liabilities (h) |  | 10,137 |  | 378 |  | 10,515
Total liabilities |  | $28,688 |  | $398 |  | $29,086
Noncontrolling interests (i) |  | 1,249 |  | (73) |  | 1,176
Paramount Global basis at August 7, 2025 |  | $11,588 |  | $107 |  | $11,695

(a) The fair value was determined based on the market approach, which estimates the value based on transactions in the market for
comparable assets, or the cost approach, which estimates the value based on the amount required to replace the asset. The fair
value reflects an increase to the book value of $635 million principally reflecting incremental fair value of Paramount Global’s
owned land and buildings.
(b) The fair value was determined based on the income approach, including the multi-period excess earnings method, which
estimates the cash flows generated by the asset over its economic life using a discounted cash flow analysis. For certain content,
fair value was determined to be equivalent to net book value. The fair value reflects a net decrease to the book value of
-17-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
programming assets of $653 million principally from reductions for programming at our TV Media and Direct-to-Consumer
segments offset by an increase to the fair value of our film and television libraries.
(c) Goodwill relates principally to the Direct-to-Consumer segment and represents the difference between Paramount Global’s basis
and the fair value of its net assets based on the preliminary fair value estimates assumed herein. Goodwill reflects operating
synergies between our businesses, as well as anticipated cost savings and is not deductible for tax purposes. During the first and
second quarters of 2026, in connection with the finalization of our appraisals and other valuation analyses, we recorded
measurement period adjustments that resulted in increases to goodwill of $22 million and $411 million, respectively. These
adjustments principally resulted from increases during the year-to-date period of $257 million to programming obligations and
$196 million to contingent liabilities, and a decrease of $91 million to programming assets, partially offset by the related deferred
tax impact of $140 million.
(d) The table below presents our intangible assets by asset class, as well as the valuation method used to determine the estimated fair
values, and the related estimated weighted average useful lives. The weighted average useful life of the total intangibles below
is 16.6 years.

Intangible assets |  | Values |  | Valuation Method |  | Estimated weighted average straight-line amortization period |
FCC and other broadcasting licenses |  | $2,558 |  | Greenfield discounted cash flow method |  | 30 years |
Trade names |  | $1,521 |  | Relief from Royalty |  | 17.3 years |
Affiliate relationships |  | $1,005 |  | Multi-period excess earnings |  | 2.6 years |
Subscriber relationships |  | $1,080 |  | Replacement cost |  | 2 years |
Franchises |  | $337 |  | Discounted cash flow |  | 10 years |
Developed technology |  | $258 |  | Replacement cost |  | 3 years |

(e) The fair value was determined based on quoted price s in active markets.
(f) The fair value was determined based on a remeasurement of the obligation using actuarial assumptions. Key valuation inputs
included discount rates and mortality assumptions.
(g) “Programming Obligations” include $777 million recorded to establish liabilities for unfavorable contractual arrangements.
(h) The estimated fair value of Paramount Global’s contingent liabilities as of August 7, 2025 was $1.6 billion, which relates to the
defense and settlement of lawsuits claiming various personal injuries related to exposure to asbestos as well as claims from
federal and state environmental regulatory agencies and other entities asserting liability for environmental cleanup costs and
related damages (see Claims Related to Former Businesses in Note 14) and other legal contingencies.
(i) The fair value was determined based on a discounted cash flow analysis.
-18-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
3) PROGRAMMING AND OTHER INVENTORY
The following table presents our programming and other inventory at June 30, 2026 and December 31, 2025,
grouped by type and predominant monetization strategy.

|  | At |  |  |  | At |
| June 30, 2026 |  | December 31, 2025
Film Group Monetization: |  |  |  |  |  |  |
Licensed program rights, including prepaid sports rights |  | $3,123 |  |  |  | $2,877 |
Produced television and film programming: |  |  |  |  |  |  |
Released |  | 9,112 |  |  |  | 9,107 |
In process and other |  | 2,273 |  |  |  | 1,935 |
Individual Monetization: |  |  |  |  |  |  |
Produced television and film programming: |  |  |  |  |  |  |
Released |  | 853 |  |  |  | 1,005 |
Completed, not yet released |  | 92 |  |  |  | 27 |
In process and other |  | 1,804 |  |  |  | 1,526 |
Home entertainment |  | 4 |  |  |  | 5 |
Game development |  | 35 |  |  |  | 7 |
Total programming and other inventory |  | 17,296 |  |  |  | 16,489 |
Less current portion |  | 1,655 |  |  |  | 1,461 |
Total noncurrent programming and other inventory |  | $15,641 |  |  |  | $15,028 |

The following table presents amortization of our television and film programming and production costs, which is
included within “Operating expenses” on the Consolidated Statements of Operations.

| Successor |  |  | Predecessor |  | Successor |  |  | Predecessor
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Licensed program rights |  | $1,000 |  |  |  |  | $1,117 |  |  |  | $2,681 |  |  |  |  | $2,628 |
Produced television and film programming, and acquired libraries: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individual monetization |  | $405 |  |  |  |  | $316 |  |  |  | $805 |  |  |  |  | $685 |
Film group monetization |  | $1,171 |  |  |  |  | $1,371 |  |  |  | $2,208 |  |  |  |  | $2,670 |

-19-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
4) RESTRUCTURING AND TRANSACTION-RELATED ITEMS
During the three and six months ended June 30, 2026 and 2025, we recorded the following within “Restructuring
and transaction-related items” on the Consolidated Statements of Operations.

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Severance (a) |  | $35 |  |  |  |  | $177 |  |  |  | $35 |  |  |  |  | $177 |
Exit costs |  | — |  |  |  |  | — |  |  |  | — |  |  |  |  | 65 |
Restructuring charges |  | 35 |  |  |  |  | 177 |  |  |  | 35 |  |  |  |  | 242 |
Transaction-related items |  | 153 |  |  |  |  | 4 |  |  |  | 256 |  |  |  |  | 24 |
Restructuring and transaction-related items |  | $188 |  |  |  |  | $181 |  |  |  | $291 |  |  |  |  | $266 |

(a) Severance costs include the accelerated vesting of stock-based compensation.
Restructuring Charges
During the second quarter of 2026, we recorded restructuring severance costs of $35 million associated with
changes in management and aligning the business around our strategic priorities following the Skydance
Transactions, including costs related to a plan under which severance payments are being provided to certain
eligible employees who voluntarily elected to participate.
Restructuring charges for the three and six months ended June 30, 2025 included severance costs of $177 million
associated with strategic changes in our global workforce in order to streamline our organization. In addition,
during the six months ended June 30, 2025, we recorded exit costs of $65 million, primarily for the impairment of
lease assets that we ceased use of in connection with initiatives to reduce our real estate footprint. The impairments
were primarily the result of a decline in market conditions since the inception of these leases and reflect the
difference between the estimated fair values, which were determined based on the expected future cash flows of
the lease assets, and the carrying values.
The following is a rollforward of our restructuring severance liability, which is recorded in “Other current
liabilities” and “Other liabilities” on the Consolidated Balance Sheets, and is expected to be substantially paid by
the end of 2027.

| Successor
|  |  | 2026 Activity |  |
| Balance at December 31, 2025 |  | Charges (a) |  | Payments and other |  | Balance at June 30, 2026
Studios |  | $133 |  |  | $6 |  |  | $(44) |  |  |  | $95 |
Direct-to-Consumer |  | 53 |  |  | — |  |  | (20) |  |  |  | 33 |
TV Media |  | 384 |  |  | 15 |  |  | (168) |  |  |  | 231 |
Corporate |  | 135 |  |  | 5 |  |  | (29) |  |  |  | 111 |
Total |  | $705 |  |  | $26 |  |  | $(261) |  |  |  | $470 |

(a) Excludes stock-based compensation expense of $9 million.
-20-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Tr ansaction-Related Items
Transaction-related items include costs directly associated with prospective and completed mergers and
acquisitions, as well as related integration activities. During the three and six months ended June 30, 2026, we
recorded transaction-related costs of $153 million and $256 million, respectively, principally for legal, advisory,
and other professional fees associated with the planned WBD Merger and related integration. During the three and
six months ended June 30, 2025, we recorded legal, advisory, and other professional fees relating to the Skydance
Transactions of $4 million and $24 million, respectively.
5) RELATED PARTIES
The Ellison Family (Successor)
At June 30, 2026, the Ellison Family, the controlling stockholder of Paramount, indirectly held approximately
77.5% of our voting Class A Common Stock through their collective approximate 77.5% ownership interest in
Harbor Lights Entertainment, Inc. (f/k/a National Amusements, Inc.) and 47.2% of our Class A and non-voting
Class B Common Stock on a combined basis. In addition, in connection with the PIPE Transaction, the NAI Equity
Investors (including entities controlled by the Ellison Family) received warrants to purchase a total of 200 million
shares of Paramount Skydance Corporation Class B Common Stock (of which entities controlled by the Ellison
Family received warrants to purchase a total of 155 million shares) at an initial exercise price of $30.50 per share
(subject to customary anti-dilution adjustments), which expire five years after issuance. The Ellison Family is
comprised of Lawrence J. Ellison and David Ellison. David Ellison is the son of Lawrence J. Ellison, and
Lawrence J. Ellison and David Ellison are accordingly considered immediate family members. David Ellison is the
CEO of Paramount and the Chairman of our Board of Directors.
Lawrence J. Ellison is the Chairman and a significant stockholder of Oracle Corporation (“Oracle”). We have
several multi-year software as a service agreements with Oracle, principally for finance and human resources, as
well as software support agreements and database licenses used by various applications. During the three and six
months ended June 30, 2026, we made payments to Oracle totaling $44 million and $46 million, respectively. In
February 2026, we executed a six-year cloud infrastructure services agreement with Oracle with a total
commitment of $300 million, under which payments escalate over the term, in connection with our anticipated
enterprise, data, and streaming workloads.
In addition, we have a lease agreement with a term that expires in 2034 under which the lessor is an entity owned
and controlled by Lawrence J. Ellison. At June 30, 2026 and December 31, 2025, the total liability associated with
these leases was $166 million and $174 million, respectively. During the three and six months ended June 30,
2026, we recorded lease costs associated with these leases totaling $10 million and $14 million, respectively.
The Ellison Family has investments in other entities over which they have control or can exert significant
influence, which as a result, are related parties to us. We did not have any material transactions with these entities.
-21-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
RedBird (Successor)
In December 2025, RedBird BD LLC, an affiliate of RB Maverick LLC and RB Tentpole, was engaged as a
financial advisor to the Company in connection with the evaluation of the WBD Merger. Pursuant to the
agreement, RedBird BD LLC is entitled to receive an aggregate transaction fee of $80 million upon closing,
comprised of $60 million for mergers and acquisitions advisory services and $20 million for capital raising
advisory services. If a termination fee is paid to us in connection with the WBD Merger, RedBird BD LLC is
entitled to receive 20% of such fee (subject to a cap of 50% of the aggregate fee that would have otherwise been
payable to RedBird BD LLC had the WBD Merger been consummated).
In the second quarter of 2026, we entered into a three-year agreement with RedBird Development Group LLC
(“RedBird Development”), an affiliate of RedBird, for media strategy and operations transformation services
related to branded media initiatives. Under the agreement, RedBird Development is compensated through
structured quarterly commission fees, subject to an annual cap of $12 million per year plus reimbursable travel and
business expenses of up to $300,000 annually.
Warner Bros. Discovery Merger
As further described in Note 1, in connection with the WBD Merger, the Ellison Parties and RedBird entered into
the Subscription Agreements and the Equity Syndication. In addition, we are required to reimburse the Ellison
Trust and RedBird for reasonable and documented out-of-pocket expenses, each subject to a cap of $5 million.
Other Related Parties
In the ordinary course of business, we are involved in transactions with our equity method investees, primarily for
the licensing of television and film programming. We earned revenue from an equity method investee of $55
million and $147 million during the three and six months ended June 30, 2026 (Successor), respectively, and $98
million and $164 million during the three and six months ended June 30, 2025 (Predecessor), respectively.
Receivables from this equity method investee are included in “Receivables, net” and “Other assets” on the
Consolidated Balance Sheets. These totaled $185 million and $90 million, respectively, at June 30, 2026, and $201
million and $87 million, respectively, at December 31, 2025.
Through the normal course of business, we are involved in other transactions with related parties, including other
equity method investees, that have not been material in any of the periods presented.
6) REVENUES
The table below presents our revenues disaggregated into categories based on the nature of such revenues. See
Note 13 for revenues by segment disaggregated into these categories.

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  | 2025 |
Revenues by Type: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advertising |  | $1,959 |  |  |  |  | $2,152 |  |  |  | $4,401 |  |  |  |  | $4,665 |
Affiliate and subscription |  | 3,520 |  |  |  |  | 3,445 |  |  |  | 7,021 |  |  |  |  | 6,842 |
Theatrical |  | 138 |  |  |  |  | 254 |  |  |  | 290 |  |  |  |  | 402 |
Licensing and other |  | 1,296 |  |  |  |  | 998 |  |  |  | 2,548 |  |  |  |  | 2,132 |
Total Revenues |  | $6,913 |  |  |  |  | $6,849 |  |  |  | $14,260 |  |  |  |  | $14,041 |

-22-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Receivables
Reserves for accounts receivable reflect our expected credit losses based on historical experience as well as current
and expected economic conditions and industry trends. At June 30, 2026 and December 31, 2025, our allowance
for credit losses was $16 million and $10 million, respectively.
Included in “Other assets” on the Consolidated Balance Sheets are noncurrent receivables of $782 million and
$835 million at June 30, 2026 and December 31, 2025, respectively. Noncurrent receivables primarily relate to
revenues recognized under long-term content licensing arrangements. Revenues from the licensing of content are
recognized at the beginning of the license period in which programs are made available to the licensee for
exhibition, while the related cash is generally collected over the term of the license period.
Contract Liabilities
Contract liabilities are included within “Deferred revenues” and “Other liabilities” on the Consolidated Balance
Sheets and were $1.6 billion and $1.5 billion at June 30, 2026 and December 31, 2025, respectively. We
recognized revenues of $0.9 billion and $0.6 billion for the six months ended June 30, 2026 (Successor) and 2025
(Predecessor), respectively, that were included in the opening balance of deferred revenues for the respective year.
Unrecognized Revenues Under Contract
At June 30, 2026, unrecognized revenues attributable to unsatisfied performance obligations under our long-term
contracts were approximately $6 billion, of which $2 billion is expected to be recognized during the remainder of
2026, $2 billion in 2027, $1 billion in 2028, and $1 billion thereafter. These amounts only include contracts subject
to a guaranteed fixed amount or the guaranteed minimum under variable contracts, primarily consisting of
television and film licensing contracts and affiliate agreements that are subject to a fixed or guaranteed minimum
fee. Such amounts change on a regular basis as we renew existing agreements or enter into new agreements. In
addition, the timing of satisfying certain performance obligations under these long-term contracts is uncertain and,
therefore, is also subject to change. Unrecognized revenues under contracts disclosed above do not include (i)
contracts with an original expected term of one year or less, mainly consisting of advertising contracts, (ii)
contracts for which variable consideration is determined based on the customer’s subsequent sale or usage, mainly
consisting of affiliate agreements and (iii) long-term licensing agreements for multiple programs for which variable
consideration is determined based on the value of the programs delivered to the customer and our right to invoice
corresponds with the value delivered.
Performance Obligations Satisfied in Previous Periods
Under certain revenue arrangements, the amount and timing of our revenue recognition is determined based on our
licensees’ subsequent sale to its end customers. As a result, under such arrangements we often satisfy our
performance obligation of delivery of our content in advance of revenue recognition. We recognized revenues of
$0.1 billion for each of the three months ended June 30, 2026 (Successor) and 2025 (Predecessor) and $0.2 billion
and $0.3 billion for the six months ended June 30, 2026 (Successor) and 2025 (Predecessor), respectively,
principally relating to content licensing arrangements for which the performance obligation was satisfied prior to
the periods indicated, including agreements with distributors of transactional video-on-demand and electronic sell-
through services, other licensing arrangements, and theatrical distribution of our films.
-23-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
7) DEBT
Our debt consists of the following:

| At |  |  | At
| June 30, 2026 |  |  | December 31, 2025
4.0% Senior Notes due 2026 |  | $— |  |  |  |  | $347 |
3.70% Senior Notes due 2026 |  | 86 |  |  |  |  | 85 |
2.90% Senior Notes due 2027 |  | 578 |  |  |  |  | 573 |
3.375% Senior Notes due 2028 |  | 490 |  |  |  |  | 487 |
3.70% Senior Notes due 2028 |  | 492 |  |  |  |  | 489 |
4.20% Senior Notes due 2029 |  | 491 |  |  |  |  | 489 |
7.875% Senior Debentures due 2030 |  | 905 |  |  |  |  | 915 |
4.95% Senior Notes due 2031 |  | 1,224 |  |  |  |  | 1,221 |
4.20% Senior Notes due 2032 |  | 927 |  |  |  |  | 921 |
5.50% Senior Debentures due 2033 |  | 418 |  |  |  |  | 417 |
4.85% Senior Debentures due 2034 |  | 76 |  |  |  |  | 76 |
6.875% Senior Debentures due 2036 |  | 1,117 |  |  |  |  | 1,119 |
6.75% Senior Debentures due 2037 |  | 75 |  |  |  |  | 75 |
5.90% Senior Notes due 2040 |  | 273 |  |  |  |  | 272 |
4.50% Senior Debentures due 2042 |  | 34 |  |  |  |  | 34 |
4.85% Senior Notes due 2042 |  | 404 |  |  |  |  | 400 |
4.375% Senior Debentures due 2043 |  | 1,090 |  |  |  |  | 1,079 |
4.875% Senior Debentures due 2043 |  | 14 |  |  |  |  | 14 |
5.85% Senior Debentures due 2043 |  | 1,107 |  |  |  |  | 1,103 |
5.25% Senior Debentures due 2044 |  | 277 |  |  |  |  | 275 |
4.90% Senior Notes due 2044 |  | 435 |  |  |  |  | 432 |
4.60% Senior Notes due 2045 |  | 456 |  |  |  |  | 452 |
4.95% Senior Notes due 2050 |  | 768 |  |  |  |  | 763 |
6.25% Junior Subordinated Debentures due 2057 |  | 628 |  |  |  |  | 628 |
6.375% Junior Subordinated Debentures due 2062 |  | 989 |  |  |  |  | 989 |
Borrowings under credit facility |  | 1,800 |  |  |  |  | — |
Obligations under finance leases |  | 2 |  |  |  |  | 3 |
Total debt (a) |  | 15,156 |  |  |  |  | 13,658 |
Less current portion |  | 665 |  |  |  |  | 433 |
Total long-term debt, net of current portion |  | $14,491 |  |  |  |  | $13,225 |

(a) At June 30, 2026 and December 31, 2025, our total senior and junior debt was net of unamortized fair value adjustments
of $1.28 billion and $1.32 billion, respectively, recorded in connection with the pushdown of the Ultimate Parent’s basis
(see Note 2). The face value of our total debt at June 30, 2026 and December 31, 2025 was $16.43 billion (including
credit facility borrowings discussed below) and $14.98 billion, respectively.
Senior Debt
In January 2026, we repaid our $347 million of 4.0% senior notes at maturity.
Commercial Paper
At both June 30, 2026 and December 31, 2025, we had no outstanding commercial paper borrowings.
-24-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Credit Facility
In April 2026, we entered into an amendment to our revolving credit facility (the “Credit Facility”), increasing the
commitments from $3.50 billion to $5.00 billion, which will be reduced to $4.94 billion in January 2027 through
maturity in January 2028. The Credit Facility is used for general corporate purposes and to support commercial
paper borrowings, if any. We may, at our option, also borrow in certain foreign currencies up to specified limits
under the Credit Facility. Borrowing rates under the Credit Facility are determined at the time of each borrowing
and are generally based on either the prime rate in the U.S. or an applicable benchmark rate plus a margin (based
on our senior unsecured debt rating), depending on the type and tenor of the loans entered into. The benchmark rate
for loans denominated in U.S. dollars is Term SOFR, and for loans denominated in euros, sterling and yen is based
on EURIBOR, SONIA and TIBOR, respectively. In the first quarter of 2026, in connection with the $2.8 billion
termination fee paid to Netflix (see Note 15), we borrowed $2.15 billion under the Credit Facility. As of June 30,
2026, outstanding borrowings under the Credit Facility totaled $1.8 billion at a weighted average interest rate of
6.13%. The remaining availability under the Credit Facility at June 30, 2026, was $3.2 billion. At August 3, 2026,
outstanding borrowings under the Credit Facility totaled $1.75 billion at a weighted average interest rate of 6.13%.
Credit facility borrowings outstanding at the closing of the WBD Merger are ex pected to be repaid with the
funding from the private placement described in Note 1.
The Credit Facility has one principal financial covenant which sets a maximum Consolidated Total Leverage Ratio
(“Leverage Ratio”) at the end of each quarter. The maximum Leverage Ratio was 4.50 x for the quarter ended
June 30, 2026 and will remain at this level until maturity. The Leverage Ratio reflects the ratio of our Consolidated
Indebtedness, net of a maximum of $3.0 billion of unrestricted cash and cash equivalents at the end of a quarter, to
our Consolidated EBITDA (each as defined in the credit agreement) for the trailing twelve-month period. We met
the covenant as of June 30, 2026.
Other Bank Borrowings
At both June 30, 2026 and December 31, 2025, there were no outstanding bank borrowings under Miramax’s $50
million credit facility that matures in November 2027.
8) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
The carrying value of our financial instruments approximates fair value, except for notes and debentures. At
June 30, 2026 and December 31, 2025, the carrying value of our outstanding notes and debentures was $13.35
billion and $13.65 billion, respectively, and the fair value, which is determined based on quoted prices in active
markets (Level 1 in the fair value hierarchy), was $12.1 billion and $13.2 billion, respectively.
Investments
Our investments without a readily determinable fair value for which we have no significant influence had a
carrying value of $55 million and $58 million at June 30, 2026 and December 31, 2025, respectively. These
investments are included in “Other assets” on the Consolidated Balance Sheets.
Foreign Exchange Contracts
Foreign currency forward contracts have principally been used to manage our exposure to currencies such as the
British pound, the euro, the Canadian dollar and the Australian dollar. We designate forward contracts used to
hedge committed and forecasted foreign currency transactions, including for the production and licensing of
content, as cash flow hedges. We also enter into non-designated forward contracts to hedge non-U.S. dollar
-25-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
denominated assets, liabilities, and cash flows. The maximum period we are hedging our exposure to variability in
future cash flows is 4.6 years.
At June 30, 2026 and December 31, 2025, the notional amount of all foreign exchange contracts was $6.84 billion
and $3.14 billion, respectively. At June 30, 2026, $6.28 billion related to future production and licensing of content
and $562 million related to our foreign currency assets and liabilities. At December 31, 2025, $2.74 billion related
to future production costs and $407 million related to our foreign currency assets and liabilities.
Interest Rate Contracts
I n the second quarter of 2026, we entered into interest rate contracts with an aggregate notional amount of $10.0
billion in connection with anticipated debt issuances associated with the WBD Merger and future debt refinancing,
of which $3.0 billion were designated as cash flow hedges. These instruments are intended to hedge exposure to
changes in benchmark U.S. Treasury rates from the execution date of the agreements through the issuance of the
related debt.
The table below presents gains (losses) recognized on derivative financial instruments. Amounts for cash flow
hedges are recognized in other comprehensive income (loss) and for non-designated hedges are included within
“Other items, net” on the Consolidated Statements of Operations.

| Successor |  | Predecessor |  |  | Successor |  |  | Predecessor
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $12 |  |  |  |  | $11 |  |  |  | $(36) |  |  |  |  | $19 |
Interest rate contracts |  | (2) |  |  |  |  | — |  |  |  | (2) |  |  |  |  | — |
Total |  | $10 |  |  |  |  | $11 |  |  |  | $(38) |  |  |  |  | $19 |
Non-designated hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $(2) |  |  |  |  | $(20) |  |  |  | $3 |  |  |  |  | $(29) |
Interest rate contracts |  | (12) |  |  |  |  | — |  |  |  | (12) |  |  |  |  | — |
Total |  | $(14) |  |  |  |  | $(20) |  |  |  | $(9) |  |  |  |  | $(29) |

Fair Value Measurements
The table below presents our assets and liabilities measured at fair value on a recurring basis at June 30, 2026 and
December 31, 2025. These assets and liabilities have been categorized according to the three-level fair value
hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on
publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable
other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets
or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting our own
assumptions about the assumptions that market participants would use in pricing the asset or liability. All of our
assets and liabilities that are measured at fair value on a recurring basis use Level 2 inputs. The fair value of
foreign currency hedges is determined based on the present value of future cash flows using observable inputs
including foreign currency exchange rates. The fair value of deferred compensation liabilities is determined based
on the fair value of the investments elected by employees.
-26-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

|  | At |  |  |  | At |
| June 30, 2026 |  | December 31, 2025
Assets: |  |  |  |  |  |  |
Foreign exchange contracts |  | $44 |  |  |  | $38 |
Interest rate contracts |  | 20 |  |  |  | — |
Total Assets |  | $64 |  |  |  | $38 |
Liabilities: |  |  |  |  |  |  |
Deferred compensation |  | $286 |  |  |  | $312 |
Foreign exchange contracts |  | 68 |  |  |  | 28 |
Interest rate contracts |  | 34 |  |  |  | — |
Total Liabilities |  | $388 |  |  |  | $340 |

Level 3 inputs were used in determining Paramount Global’s net assets at the Ultimate Parent’s basis (see Note 2)
and the estimated fair value of FCC licenses that were impaired in the second quarter of 2025 (see Note 15).
9) VARIABLE INTEREST ENTITIES
In the normal course of business, we enter into joint ventures or make investments with business partners that
support our underlying business strategy and provide us the ability to enter new markets to expand the reach of our
brands, develop new programming and/or distribute our existing content. In certain instances, an entity in which
we make an investment may qualify as a variable interest entity (“VIE”). In determining whether we are the
primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact
the activities of the VIE, and have the obligation to absorb losses or the right to receive benefits from the VIE that
could potentially be significant to the VIE.
The following tables present the amounts recorded in our consolidated financial statements related to our
consolidated VIEs. During the first quarter of 2026, we acquired our minority partner’s interest in one of our
consolidated VIEs, which increased our ownership interest to 100%. Accordingly, for periods subsequent to the
acquisition, this entity is not included in the amounts disclosed.

|  | At |  |  |  | At |
| June 30, 2026 |  | December 31, 2025
Total assets |  | $829 |  |  |  | $1,193 |
Total liabilities |  | $149 |  |  |  | $311 |

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Revenues |  | $127 |  |  |  |  | $117 |  |  |  | $221 |  |  |  |  | $242 |
Operating income (loss) |  | $13 |  |  |  |  | $(40) |  |  |  | $37 |  |  |  |  | $(87) |

10) STOCKHOLDERS’ EQUITY
Impact from the Skydance Transactions—Common Stock
On August 6, 2025, each share of Paramount Global common stock that was owned by Paramount Global as
treasury stock was cancelled and ceased to exist, and each issued and outstanding share of Paramount Global Class
A Common Stock and Paramount Global Class B Common Stock was converted automatically into the right to
-27-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
receive one share of Paramount Skydance Corporation Class A Common Stock and Paramount Skydance
Corporation Class B Common Stock, respectively. Additionally, at the closing of the Skydance Transactions, all
outstanding Paramount Global RSU awards and PSU awards were converted to Paramount RSU awards.
The Skydance Transactions included a cash-stock election offered to holders of Paramount Global pursuant to
which (a) shares of Paramount Global Class A Common Stock held by stockholders other than NAI or its
subsidiaries were converted, at the stockholders’ election, into the right to receive either the Class A Cash
Consideration or the Class A Stock Consideration and (b) shares of Paramount Global Class B Common Stock held
by stockholders other than NAI or its subsidiaries, the NAI Equity Investors and certain other affiliates of investors
in Skydance were converted, at the stockholders’ election, into the right to receive the Class B Cash Consideration
(subject to proration) or the Class B Stock Consideration. The elections resulted in cash settlement of 7.2 million
shares of Paramount Global Class A Common Stock at a price of $23.00 per share and cash settlement of 285.9
million shares of Paramount Global Class B Common Stock at a price of $15.00 per share for which holders of the
shares elected to receive the Class A Cash Consideration and Class B Cash Consideration, respectively. In
addition, holders of 2.0 million shares of Paramount Global Class A Common Stock elected to receive the Class A
Stock Consideration or made no election, and as such received shares of Paramount Skydance Corporation Class B
Common Stock at a conversion rate of 1.5333, resulting in the issuance of 3.1 million shares of Paramount
Skydance Corporation Class B Common Stock. Elections made for the Class B Cash Consideration were subject to
a proration mechanism. Shares of Paramount Global Class B Common Stock for which elections to receive Class B
Cash Consideration were not made or were validly revoked remained issued and outstanding as one share of
Paramount Skydance Corporation Class B Common Stock. Shares of Paramount Global Class A Common Stock
and Paramount Global Class B Common Stock were cancelled and ceased to exist upon completion of the
Skydance Transactions.
The cash elections were funded by $4.45 billion of the PIPE Transaction proceeds, and the remaining $1.52 billion
was provided to Paramount. In exchange for these proceeds, the NAI Equity Investors and certain other affiliates of
investors in Skydance received 400 million newly issued shares of Paramount Skydance Corporation Class B
Common Stock for a purchase price of $15.00 per share, and the NAI Equity Investors also received warrants to
purchase 200 million shares of Paramount Skydance Corporation Class B Common Stock at an initial exercise
price of $30.50 per share (subject to customary anti-dilution adjustments), which expire five years after issuance.
In addition, 316.7 million shares (313.8 million shares after reduction in connection with certain tax withholding
requirements) of Paramount Skydance Corporation Class B Common Stock were issued to holders of Skydance
Membership Units and Skydance Phantom Unit awards.
The table below details the activity described above and calculates shares of Paramount Skydance Corporation
Class A Common Stock and Class B Common Stock issued and outstanding after completion of the Skydance
Transactions on August 7, 2025.
-28-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

(in millions) |  | Class A |  | Class B
Each share of Paramount Global Class A Common Stock converted to one share of Paramount Skydance Corporation Class A Common Stock |  | 40.7 |  |
Each share of Paramount Global Class B Common Stock converted to one share of Paramount Skydance Corporation Class B Common Stock |  |  |  | 633.6
Issuance of Paramount Skydance Corporation Class B Common Stock to the NAI Equity Investors and certain other affiliates of investors in Skydance in exchange for proceeds from the PIPE Transaction |  |  |  | 400.0
Cancellation of cash-settled Class A Common Stock |  | (7.2) |  |
Cancellation of cash-settled Class B Common Stock |  |  |  | (285.9)
Conversion of one share of stock-settled Class A Common Stock to 1.5333 shares of Class B Common Stock |  | (2.0) |  | 3.1
Issuance of Paramount Skydance Corporation Class B Common Stock to holders of Skydance Membership Units and Skydance Phantom Unit awards |  |  |  | 313.8
Total share issuance, net of cancellations |  | (9.2) |  | 431.0
Total shares of Paramount Skydance Corporation Class A and Class B Common Stock issued and outstanding after the Skydance Transactions on August 7, 2025 |  | 31.5 |  | 1,064.6

Paramount Skydance Corporation is authorized to issue up to 55 million shares of Paramount Skydance
Corporation Class A Common Stock, par value of $.001 per share; 100 million shares of preferred stock, par value
of $.001 per share; and, effective April 2026, 7.0 billion shares of Paramount Skydance Corporation Class B
Common Stock, par value of $.001 per share, which increased from 5.50 billion shares. The Certificate of
Amendment to the amended and restated certificate of incorporation that increased this authorization also permits
the Paramount Skydance Corporation Board of Directors to declare and pay a dividend to holders of Paramount
Skydance Corporation Class B Common Stock without being required to declare and pay a corresponding dividend
to the holders of Paramount Skydance Corporation Class A Common Stock, subject to the prior written consent or
approval of the holders of all of the outstanding shares of Paramount Skydance Corporation Class A Common
Stock.
Common Stock Dividends
The following table presents dividends declared per share and total dividends for Paramount Skydance Corporation
Class A and B Common Stock for the Successor period and Paramount Global’s Class A and Class B Common
Stock for the Predecessor period.

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  |  | 2026 |  |  |  |  | 2025 |
Class A and Class B Common Stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends declared per common share |  | $.05 |  |  |  |  | $.05 |  |  |  | $.10 |  |  |  |  | $.10 |
Total common stock dividends |  | $59 |  |  |  |  | $35 |  |  |  | $119 |  |  |  |  | $70 |

-29-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Accumulated Other Comprehensive Income (Loss)
The following tables summarize the changes in the components of accumulated other comprehensive income
(loss).

(Successor) | Cumulative Translation Adjustments |  | Net Actuarial Gain and Prior Service Cost |  | Cash Flow Hedges |  | Accumulated Other Comprehensive Income (Loss)
At December 31, 2025 |  | $40 |  |  |  | $19 |  |  |  | $— |  |  |  | $59 |
Other comprehensive loss before reclassifications |  | (24) |  |  |  | — |  |  |  | (28) |  |  |  | (52) |
At June 30, 2026 |  | $16 |  |  |  | $19 |  |  |  | $(28) |  |  |  | $7 |

(Predecessor) | Cumulative Translation Adjustments |  | Net Actuarial Loss and Prior Service Cost |  | Cash Flow Hedges |  | Accumulated Other Comprehensive Income (Loss)
At December 31, 2024 |  | $(670) |  |  |  | $(947) |  |  |  | $13 |  |  |  | $(1,604) |
Other comprehensive income before reclassifications |  | 150 |  |  |  | — |  |  |  | 14 |  |  |  | 164 |
Reclassifications to net earnings |  | — |  |  |  | 21 | (a) |  |  | — |  |  |  | 21 |
Other comprehensive income |  | 150 |  |  |  | 21 |  |  |  | 14 |  |  |  | 185 |
At June 30, 2025 |  | $(520) |  |  |  | $(926) |  |  |  | $27 |  |  |  | $(1,419) |

(a) Reflects amortization of net actuarial losses (see Note 12).
The cash flow hedges included in other comprehensive income (loss) are net of a tax benefit of $10 million and tax
expense of $5 million for the six months ended June 30, 2026 (Successor) and June 30, 2025 (Predecessor),
respectively. The net actuarial loss and prior service cost related to pension and other postretirement benefit plans
included in other comprehensive income (loss) is net of a tax benefit of $7 million for the six months ended
June 30, 2025 (Predecessor).
11) INCOME TAXES
The income tax provision represents federal, state and local, and foreign taxes on earnings before income taxes and
equity in loss of investee companies. For the three and six months ended June 30, 2026 (Successor), we recorded a
provision for income taxes of $120 million and $275 million, reflecting an effective income tax rate of 55.8% and
45.3%, respectively. I ncluded in the provision for income taxes are the following items identified as affecting the
comparability of our results, which in aggregate increased our effective income tax rate by 20.1 percentage points
and 10.9 percentage points for their respective periods.
-30-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

| Impact from Items Affecting Comparability
| Successor
| Three Months Ended June 30, 2026 |  |  | Six Months Ended June 30, 2026
| Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes |  |  | Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes
Restructuring charges (Note 4) |  | $(35) |  |  |  | $5 |  |  |  |  | $(35) |  |  |  | $5 |
Transaction-related items (Note 4) |  | $(153) |  |  |  | $15 |  |  |  |  | $(256) |  |  |  | $21 |
Net discrete tax benefit |  | n/a |  |  |  | $4 |  |  |  |  | n/a |  |  |  | $8 |

n/a - not applicable
For the three and six months ended June 30, 2025 (Predecessor), we recorded a provision for income taxes of $50
million and $150 million, reflecting an effective income tax rate of 28.1% and 29.3%, respectively. Included in the
provision for income taxes are the following items identified as affecting the comparability of our results, which in
aggregate increased our effective income tax rate by 2.9 percentage points and 3.0 percentage points for their
respective periods.

| Impact from Items Affecting Comparability
| Predecessor
| Three Months Ended June 30, 2025 |  | Six Months Ended June 30, 2025
| Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes |  | Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes
Impairment charges (Note 15) |  | $(157) |  |  |  | $39 |  |  |  | $(157) |  |  |  | $39 |
Restructuring charges (Note 4) |  | $(177) |  |  |  | $42 |  |  |  | $(242) |  |  |  | $58 |
Transaction-related items (Note 4) |  | $(4) |  |  |  | $1 |  |  |  | $(24) |  |  |  | $1 |
Gain from dispositions |  | $— |  |  |  | $— |  |  |  | $35 |  |  |  | $(2) |
Net discrete tax provision |  | n/a |  |  |  | $(2) |  |  |  | n/a |  |  |  | $(9) |

n/a - not applicable
On July 10, 2026, the Company received Notices of Proposed Adjustment (“NOPAs”) from the Internal Revenue
Service for legacy Viacom Inc.’s 2017, 2018, and 2019 tax years regarding the tax treatment of certain transactions
between our subsidiaries. The proposed adjustments could increase taxes, including the one-time transition tax on
cumulative foreign earnings, by up to approximately $400 million, excluding any penalties and interest that may be
due. The Company disagrees with the proposed adjustments and is evaluating its options, including contesting the
NOPAs through all available administrative and, if necessary, judicial proceedings. As the NOPAs were received
after the balance sheet date, changes in measurement of the tax position, if any, will be accounted for in the third
quarter of 2026.
-31-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
12) PENSION AND OTHER POSTRETIREMENT BENEFITS
The following tables present the components of net periodic cost for our pension and postretirement benefit plans,
which are included within “Other items, net” on the Consolidated Statements of Operations.

| Pension Benefits |  | Postretirement Benefits
| Successor |  | Predecessor |  |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Three Months Ended June 30, |  |  | Three Months Ended June 30,
| 2026 |  |  |  | 2025 |  |  | 2026 |  |  |  | 2025 |
Components of net periodic cost (a): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | $50 |  |  |  |  | $49 |  |  |  | $2 |  |  |  |  | $3 |
Expected return on plan assets |  | (35) |  |  |  |  | (32) |  |  |  | — |  |  |  |  | — |
Amortization of actuarial loss (gain) (b) |  | — |  |  |  |  | 19 |  |  |  | — |  |  |  |  | (5) |
Net periodic cost |  | $15 |  |  |  |  | $36 |  |  |  | $2 |  |  |  |  | $(2) |

| Pension Benefits |  | Postretirement Benefits
| Successor |  | Predecessor |  |  | Successor |  | Predecessor |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Components of net periodic cost (a): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  | $100 |  |  |  |  | $99 |  |  |  | $4 |  |  |  |  | $5 |
Expected return on plan assets |  | (70) |  |  |  |  | (64) |  |  |  | — |  |  |  |  | — |
Amortization of actuarial loss (gain) (b) |  | — |  |  |  |  | 37 |  |  |  | — |  |  |  |  | (9) |
Net periodic cost |  | $30 |  |  |  |  | $72 |  |  |  | $4 |  |  |  |  | $(4) |

(a) Amounts reflect our domestic plans only.
(b) Reflects amounts reclassified from accumulated other comprehensive loss to net earnings (loss).
13) SEGMENT INFORMATION
The tables below set forth our financial information by reportable segment that is regularly reviewed by the
Company’s chief operating decision maker (“CODM”), who is the Company’s Chief Strategy Officer and Chief
Operating Officer, Andrew Brandon-Gordon. Beginning in 2026, we transitioned our reporting structure into three
new segments: Studios, Direct-to-Consumer, and TV Media. Under the new segment structure, our Studios segment
reflects the combination of the historical Filmed Entertainment segment with the historical TV Media studio
operations, consolidating our content creation activities. Additionally, our premium cable channel, Paramount+
with Showtime, which was previously under the TV Media segment, is now managed under the Direct-to-
Consumer segment. Concurrent with the change to our segments, we updated our segment expense allocations to
better reflect how we operate and make cost decisions across the business. Certain centralized costs that were
previously allocated at the segment level are now reported within corporate expenses.
-32-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
As a result of the new accounting basis established in connection with the Skydance Transactions and NAI
Transaction on August 7, 2025, which makes our results of operations not comparable between the Successor and
Predecessor periods (see Note 1), we are required to present segment information for the periods prior to August 7,
2025 based on our previous segments, Filmed Entertainment, Direct-to-Consumer, and TV Media.
•Studios—Our Studios segment consists of our television and film studio operations, including CBS
Studios, Paramount Television Studios, Nickelodeon Animation, Paramount Pictures, Paramount
Animation, and Miramax, as well as Skydance Animation, Film, and Television, Paramount Sports
Entertainment and Paramount Games Studio. For the Predecessor period, our Filmed Entertainment
segment was most comparable to our new Studios segment and excluded studio operations related to our
TV Media businesses, including CBS Studios and Paramount Television Studios.
•Direct-to-Consumer—Our Direct-to-Consumer segment consists of our portfolio of domestic and
international pay and free streaming services, including Paramount+ and Pluto TV, as well as our domestic
premium cable network, Paramount+ with Showtime. For the Predecessor period, the Direct-to- Consumer
segment excluded Paramount+ with Showtime. During the second quarter of 2026, we integrated BET+
into Paramount+.
•TV Media—Our TV Media segment consists of our (1) broadcast operations—the CBS Television
Network, our domestic broadcast television network; CBS Stations, our owned television stations; and our
international free-to-air networks, including Network 10 and Channel 5; (2) domestic basic cable networks,
including MTV, Comedy Central, Paramount Network, The Smithsonian Channel, Nickelodeon, BET
Media Group, CBS Sports Network, and international extensions of certain of these brands; and (3) CBS
Media Ventures, which produces and distributes first-run syndicated programming. TV Media also
includes a number of digital properties such as CBS News 24/7 for 24-hour news and CBS Sports HQ for
sports news and analysis. For the Predecessor period, the TV Media segment also included domestic and
international television studio operations and the premium cable network, Paramount+ with Showtime.
In the first quarter of 2026, we also renamed our primary measure of profit and loss for our operating segments
from Adjusted OIBDA to Adjusted EBITDA. Although these measures have different starting points, as we define
them, they produce the same result. We define Adjusted EBITDA as net earnings (loss) before interest expense and
income; provision for (benefit from) income taxes; other items; equity in earnings (loss) of investee companies, net
of tax; and depreciation and amortization, adjusted to exclude stock-based compensation expense and certain items
identified as affecting comparability that are not part of our normal operations. We define Adjusted OIBDA as
operating income before depreciation and amortization, adjusted to exclude stock-based compensation expense and
the same items identified as affecting comparability. This change was made to align with the measure our
management, including the CODM, began using in 2026, including for planning and forecasting of future periods,
evaluating the operating performance of our segments, and making decisions about resource allocation. The items
identified as affecting comparability that are excluded in both measures include programming charges, impairment
charges, restructuring charges, and gain (loss) on dispositions, each where applicable. Stock-based compensation is
a noncash expense that management does not consider to be part of our underlying operating performance and is
also excluded in both measures.
We do not disclose our assets by segment because they are not regularly provided to the CODM and are not used to
evaluate our operating performance or in determining the allocation of resources.
-33-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Successor |  | Predecessor |
| Three Months Ended June 30, |  |  |  | Three Months Ended June 30,
| 2026 |  |  |  | 2025
Revenues: |  |  |  |  |  | Revenues: |  |  |
Studios |  |  |  |  |  | Filmed Entertainment |  |  |
Theatrical |  | $138 |  |  |  | Theatrical |  | $254 |
Licensing and other |  | 1,172 |  |  |  | Licensing and other |  | 434 |
Advertising |  | 4 |  |  |  | Advertising |  | 2 |
Studios |  | 1,314 |  |  |  | Filmed Entertainment |  | 690 |
Direct-to-Consumer |  |  |  |  |  | Direct-to-Consumer |  |  |
Advertising |  | 535 |  |  |  | Advertising |  | 494 |
Affiliate and subscription |  | 1,939 |  |  |  | Subscription |  | 1,665 |
Licensing |  | — |  |  |  | Licensing |  | 1 |
Direct-to-Consumer |  | 2,474 |  |  |  | Direct-to-Consumer |  | 2,160 |
TV Media |  |  |  |  |  | TV Media |  |  |
Advertising |  | 1,420 |  |  |  | Advertising |  | 1,657 |
Affiliate and subscription |  | 1,581 |  |  |  | Affiliate and subscription |  | 1,780 |
Licensing and other |  | 127 |  |  |  | Licensing and other |  | 574 |
TV Media |  | 3,128 |  |  |  | TV Media |  | 4,011 |
Eliminations |  | (3) |  |  |  | Eliminations |  | (12) |
Total Revenues |  | $6,913 |  |  |  | Total Revenues |  | $6,849 |

Successor |  | Predecessor |
| Six Months Ended June 30, |  |  |  | Six Months Ended June 30,
| 2026 |  |  |  | 2025
Revenues: |  |  |  |  |  | Revenues: |  |  |
Studios |  |  |  |  |  | Filmed Entertainment |  |  |
Theatrical |  | $290 |  |  |  | Theatrical |  | $402 |
Licensing and other |  | 2,299 |  |  |  | Licensing and other |  | 910 |
Advertising |  | 8 |  |  |  | Advertising |  | 5 |
Studios |  | 2,597 |  |  |  | Filmed Entertainment |  | 1,317 |
Direct-to-Consumer |  |  |  |  |  | Direct-to-Consumer |  |  |
Advertising |  | 1,052 |  |  |  | Advertising |  | 967 |
Affiliate and subscription |  | 3,820 |  |  |  | Subscription |  | 3,236 |
Licensing |  | — |  |  |  | Licensing |  | 1 |
Direct-to-Consumer |  | 4,872 |  |  |  | Direct-to-Consumer |  | 4,204 |
TV Media |  |  |  |  |  | TV Media |  |  |
Advertising |  | 3,341 |  |  |  | Advertising |  | 3,695 |
Affiliate and subscription |  | 3,201 |  |  |  | Affiliate and subscription |  | 3,606 |
Licensing and other |  | 252 |  |  |  | Licensing and other |  | 1,248 |
TV Media |  | 6,794 |  |  |  | TV Media |  | 8,549 |
Eliminations |  | (3) |  |  |  | Eliminations |  | (29) |
Total Revenues |  | $14,260 |  |  |  | Total Revenues |  | $14,041 |

-34-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
For content licensed between segments, costs are allocated across segments based on the relative value of the
distribution windows within each segment; accordingly, no intersegment licensing revenues or profits are recorded
by the licensor segment. Under our previous segment presentation, revenues generated between segments were
principally from intersegment arrangements for the distribution of content, rental of studio space, and advertising,
as well as licensing revenues earned from third parties who license our content to our internal platforms either
through a sub-license or co-production arrangement. These transactions were recorded at market value as if the
sales were to third parties and eliminated in consolidation. Under our new segment presentation, intersegment
revenues are comprised of advertising revenues and licensing revenues earned from third parties who license our
content to our internal platforms through sub‑licensing or co‑production arrangements. For the three and six
months ended June 30, 2026, intercompany revenues were all earned by the Studios segment. The table below
presents intercompany revenue by segment for the 2025 periods.

| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2025 |  | 2025
Intercompany Revenues: |  |  |  |  |  |  |
TV Media |  | $6 |  |  |  | $17 |
Filmed Entertainment |  | 6 |  |  |  | 12 |
Total Intercompany Revenues |  | $12 |  |  |  | $29 |

-35-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Successor |  | Predecessor |
| Three Months Ended June 30, |  |  |  | Three Months Ended June 30,
| 2026 |  |  |  | 2025
Studios |  |  |  |  |  | Filmed Entertainment |  |  |
Revenues |  | $1,314 |  |  |  | Revenues |  | $690 |
Content costs |  | 926 |  |  |  | Content costs |  | 394 |
Advertising and marketing |  | 143 |  |  |  | Advertising and marketing |  | 195 |
Other (a) |  | 209 |  |  |  | Other (a) |  | 185 |
Total segment expenses |  | 1,278 |  |  |  | Total segment expenses |  | 774 |
Studios Adjusted EBITDA |  | 36 |  |  |  | Filmed Entertainment Adjusted OIBDA |  | (84) |
Direct-to-Consumer |  |  |  |  |  | Direct-to-Consumer |  |  |
Revenues |  | 2,474 |  |  |  | Revenues |  | 2,160 |
Content costs |  | 1,161 |  |  |  | Content costs |  | 1,085 |
Advertising and marketing |  | 316 |  |  |  | Advertising and marketing |  | 294 |
Other (b) |  | 631 |  |  |  | Other (b) |  | 624 |
Total segment expenses |  | 2,108 |  |  |  | Total segment expenses |  | 2,003 |
Direct-to-Consumer Adjusted EBITDA |  | 366 |  |  |  | Direct-to-Consumer Adjusted OIBDA |  | 157 |
TV Media |  |  |  |  |  | TV Media |  |  |
Revenues |  | 3,128 |  |  |  | Revenues |  | 4,011 |
Content costs |  | 1,185 |  |  |  | Content costs |  | 1,956 |
Advertising and marketing |  | 66 |  |  |  | Advertising and marketing |  | 116 |
Other (c) |  | 814 |  |  |  | Other (c) |  | 1,076 |
Total segment expenses |  | 2,065 |  |  |  | Total segment expenses |  | 3,148 |
TV Media Adjusted EBITDA |  | 1,063 |  |  |  | TV Media Adjusted OIBDA |  | 863 |
Corporate/Eliminations |  | (366) |  |  |  | Corporate/Eliminations |  | (73) |
Stock-based compensation (d) |  | (72) |  |  |  | Stock-based compensation (d) |  | (39) |
Depreciation and amortization |  | (364) |  |  |  | Depreciation and amortization |  | (87) |
Impairment charges |  | — |  |  |  | Impairment charges |  | (157) |
Restructuring and transaction-related items (d) |  | (188) |  |  |  | Restructuring and transaction-related items (d) |  | (181) |
Operating income |  | 475 |  |  |  | Operating income |  | 399 |
Interest expense |  | (255) |  |  |  | Interest expense |  | (214) |
Interest income |  | 29 |  |  |  | Interest income |  | 32 |
Other items, net |  | (34) |  |  |  | Other items, net |  | (39) |
Earnings before income taxes and equity in loss of investee companies |  | 215 |  |  |  | Earnings before income taxes and equity in loss of investee companies |  | 178 |
Provision for income taxes |  | (120) |  |  |  | Provision for income taxes |  | (50) |
Equity in loss of investee companies, net of tax |  | (54) |  |  |  | Equity in loss of investee companies, net of tax |  | (67) |
Net earnings (Parent and noncontrolling interests) |  | 41 |  |  |  | Net earnings (Parent and noncontrolling interests) |  | 61 |
Net earnings attributable to noncontrolling interests |  | — |  |  |  | Net earnings attributable to noncontrolling interests |  | (4) |
Net earnings attributable to Parent |  | $41 |  |  |  | Net earnings attributable to Parent |  | $57 |

-36-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)

Successor |  | Predecessor |
| Six Months Ended June 30, |  |  |  | Six Months Ended June 30,
| 2026 |  |  |  | 2025
Studios |  |  |  |  |  | Filmed Entertainment |  |  |
Revenues |  | $2,597 |  |  |  | Revenues |  | $1,317 |
Content costs |  | 1,742 |  |  |  | Content costs |  | 715 |
Advertising and marketing |  | 243 |  |  |  | Advertising and marketing |  | 311 |
Other (a) |  | 412 |  |  |  | Other (a) |  | 355 |
Total segment expenses |  | 2,397 |  |  |  | Total segment expenses |  | 1,381 |
Studios Adjusted EBITDA |  | 200 |  |  |  | Filmed Entertainment Adjusted OIBDA |  | (64) |
Direct-to-Consumer |  |  |  |  |  | Direct-to-Consumer |  |  |
Revenues |  | 4,872 |  |  |  | Revenues |  | 4,204 |
Content costs |  | 2,407 |  |  |  | Content costs |  | 2,300 |
Advertising and marketing |  | 631 |  |  |  | Advertising and marketing |  | 635 |
Other (b) |  | 1,217 |  |  |  | Other (b) |  | 1,221 |
Total segment expenses |  | 4,255 |  |  |  | Total segment expenses |  | 4,156 |
Direct-to-Consumer Adjusted EBITDA |  | 617 |  |  |  | Direct-to-Consumer Adjusted OIBDA |  | 48 |
TV Media |  |  |  |  |  | TV Media |  |  |
Revenues |  | 6,794 |  |  |  | Revenues |  | 8,549 |
Content costs |  | 2,904 |  |  |  | Content costs |  | 4,299 |
Advertising and marketing |  | 146 |  |  |  | Advertising and marketing |  | 269 |
Other (c) |  | 1,626 |  |  |  | Other (c) |  | 2,196 |
Total segment expenses |  | 4,676 |  |  |  | Total segment expenses |  | 6,764 |
TV Media Adjusted EBITDA |  | 2,118 |  |  |  | TV Media Adjusted OIBDA |  | 1,785 |
Corporate/Eliminations |  | (675) |  |  |  | Corporate/Eliminations |  | (174) |
Stock-based compensation (d) |  | (152) |  |  |  | Stock-based compensation (d) |  | (83) |
Depreciation and amortization |  | (726) |  |  |  | Depreciation and amortization |  | (175) |
Impairment charges |  | — |  |  |  | Impairment charges |  | (157) |
Restructuring and transaction-related items (d) |  | (291) |  |  |  | Restructuring and transaction-related items (d) |  | (266) |
Gain on dispositions |  | — |  |  |  | Gain on dispositions |  | 35 |
Operating income |  | 1,091 |  |  |  | Operating income |  | 949 |
Interest expense |  | (493) |  |  |  | Interest expense |  | (431) |
Interest income |  | 67 |  |  |  | Interest income |  | 70 |
Other items, net |  | (58) |  |  |  | Other items, net |  | (76) |
Earnings before income taxes and equity in loss of investee companies |  | 607 |  |  |  | Earnings before income taxes and equity in loss of investee companies |  | 512 |
Provision for income taxes |  | (275) |  |  |  | Provision for income taxes |  | (150) |
Equity in loss of investee companies, net of tax |  | (116) |  |  |  | Equity in loss of investee companies, net of tax |  | (140) |
Net earnings (Parent and noncontrolling interests) |  | 216 |  |  |  | Net earnings (Parent and noncontrolling interests) |  | 222 |
Net earnings attributable to noncontrolling interests |  | (7) |  |  |  | Net earnings attributable to noncontrolling interests |  | (13) |
Net earnings attributable to Parent |  | $209 |  |  |  | Net earnings attributable to Parent |  | $209 |

(a) Other segment expenses for our Studios segment (Successor) and Filmed Entertainment segment (Predecessor) include employee
compensation; costs relating to the distribution of our content; costs for occupancy, technology, and professional services; and
other costs associated with our operations.
-37-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
(b) Other segment expenses for our Direct-to-Consumer segment in both the Successor and Predecessor periods include employee
compensation; revenue-sharing costs, including for third-party distribution; costs for occupancy, technology, and professional
services; and other costs associated with our operations.
(c) Other segment expenses for our TV Media segment in both the Successor and Predecessor periods include employee compensation;
revenue-sharing costs to television stations affiliated with the CBS Television Network; costs relating to the distribution of our
content; costs for research, occupancy, technology, and professional services; and other costs associated with our operations.
(d) Stock-based compensation expense of $9 million for both the three and six months ended June 30, 2026 (Successor), and $4
million for both the three and six months ended June 30, 2025 (Predecessor) is included in “Restructuring and transaction-related
items.”
14) COMMITMENTS AND CONTINGENCIES
Guarantees
Letters of Credit and Surety Bonds
At June 30, 2026, we had outstanding letters of credit and surety bonds of $1.24 billion that were not recorded on
the Consolidated Balance Sheet, including $998 million issued under a $1.9 billion standby letter of credit facility.
In accordance with the contractual requirements of one of our commitments, the letter of credit outstanding under
this facility increases and decreases consistent with the related contractual commitment. Letters of credit and surety
bonds are primarily used as security against non-performance in the normal course of business under contractual
requirements of certain of our commitments. The standby letter of credit facility, which matures in May 2027, is
subject to provisions similar to the Credit Facility, including the same principal financial covenant (see Note 7),
and will be secured by the same collateral as the Credit Facility at closing of the WBD merger.
Other
In the course of our business, we both provide and receive indemnities that are intended to allocate certain risks
associated with business transactions. Similarly, we may remain contingently liable for various obligations of a
business that has been divested in the event that a third party does not live up to its obligations under an
indemnification obligation. We record a liability for our indemnification obligations and other contingent liabilities
when probable and reasonably estimable.
Legal Matters
General
On an ongoing basis, we vigorously defend ourselves in numerous lawsuits and proceedings and respond to
various investigations and inquiries from federal, state, local and international authorities (collectively,
“Litigation”). Litigation may be brought against us without merit, and is inherently uncertain and always difficult
to predict. However, based on our understanding and evaluation of the relevant facts and circumstances, we believe
that the following matters are not likely, in the aggregate, to result in a material adverse effect on our business,
financial condition and results of operations.
Litigation Relating to the WBD Merger
In April 2026, Pamela Faust, together with four other consumers of streaming, cable television, news media, and
theatrical entertainment programming, filed a private antitrust action in the U.S. District Court for the Northern
District of California against Paramount and Skydance relating to the WBD Merger. The complaint seeks to block
the WBD Merger, among other relief. In May 2026, the plaintiffs filed a motion for a preliminary injunction to
enjoin the WBD Merger pending a trial on the merits. In June 2026, we filed a motion to dismiss and an opposition
to the plaintiffs’ motion for a preliminary injunction. A hearing took place on July 16, 2026 on the plaintiffs’
-38-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
motion for a preliminary injunction and our motion to dismiss. The Court denied the plaintiffs’ motion for a
preliminary injunction and is still considering our motion to dismiss.
In July 2026, twelve states (California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New
Jersey, New Mexico, New York, Oregon and Washington) filed an antitrust action in the U.S. District Court for the
Northern District of California against Paramount and WBD relating to the WBD Merger. The complaint seeks to
block the WBD Merger, among other relief. On July 13, 2026, the plaintiff-states filed a motion for a temporary
restraining order and to show cause why a preliminary injunction should not issue. We filed our opposition on July
16, 2026, and the Court held a hearing on the plaintiff-states’ motion on July 17, 2026. On July 20, 2026, the Court
granted the motion for a temporary restraining order and set a briefing schedule for the preliminary injunction. On
July 22, 2026, we filed a motion seeking a three-day evidentiary hearing for the preliminary injunction during the
week of August 17 or August 24 and to amend the briefing schedule. On July 23, 2026, the plaintiff-states
informed the Court that they would not file their preliminary injunction motion that day, and that the filing timeline
would depend on the outcome of further discussions with the defendants. On July 24, 2026, the plaintiff-states, the
WGA plaintiffs (described below), and defendants entered a stipulation agreeing that the WBD Merger will not
close, and defendants will not take any steps to integrate their operations, until the earlier of (1) five days after a
merits determination in these actions or (2) June 1, 2027. The parties also cancelled the briefing schedule and the
August 3, 2026 hearing on the plaintiff-states’ preliminary injunction motion and agreed to file a joint trial-
scheduling statement by July 31, 2026. The Court granted the stipulation the same day. On July 31, 2026, the
parties, together with the WGA plaintiffs, filed a joint scheduling statement. 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 plaintiff-
states and WGA plaintiffs cases.
In July 2026, the Writers Guild of America, West, Inc., and Writers Guild of America East, Inc. filed a private
antitrust action in the U.S. District Court for the Northern District of California against Paramount and WBD
relating to the WBD Merger. The complaint seeks to block the WBD Merger, among other relief. On July 17,
2026, the case was reassigned to Judge Araceli Martinez-Olguin from Magistrate Judge Peter H. Kang. On July 21,
2026, the plaintiffs filed a motion for a preliminary injunction and a motion to expedite the preliminary injunction
briefing schedule. On July 22, 2026, we filed an opposition to the motion to expedite. On July 23, 2026, the
plaintiffs filed a reply to the motion to expedite. That same day, the Court issued an order aligning the briefing
schedule on the motions for preliminary injunction in both the state and the WGA actions, extending the temporary
restraining order to August 17, 2026. On July 24, 2026, the plaintiff-states, the WGA plaintiffs, and the defendants
entered a stipulation agreeing that the WBD Merger will not close, and defendants will not take any steps to
integrate their operations as described above. The stipulation also provides that the WGA plaintiffs will withdraw
their preliminary injunction motion and that the parties will file a joint trial-scheduling statement by July 31, 2026.
The Court granted the stipulation the same day. As described above, 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 plaintiff-states and
WGA plaintiffs cases.
In July 2026, Paul Robbins, a Paramount stockholder, filed a derivative lawsuit in the Delaware Court of Chancery
against certain of our officers and directors, alleging that they breached their fiduciary duty of loyalty in pursuit of
Paramount’s acquisition of WBD. The plaintiff seeks to enjoin the WBD Merger and monetary damages, among
other relief, and has asked the Court to expedite the proceedings to allow him to seek an injunction. On July 26,
2026, the plaintiff sent an email to the Court withdrawing his request to expedite the matter in light of the
stipulation in the pending state antitrust lawsuit described above. The plaintiff has asked the Court to order the
parties to meet and confer to discuss a schedule in the matter. On July 27, 2026, the defendants submitted a
response letter stating that, given that the plaintiff was withdrawing his motion to expedite, the schedule governing
the matter should be no different than any other non-expedited matter, that they intended to file a motion to dismiss
-39-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
at the appropriate time, and that they will also file a motion to stay discovery pending resolution of that motion if
the plaintiff does not stipulate to such a stay.
In addition, we have received demand letters from purported holders of our Class B Common Stock requesting the
inspection of books and records to investigate possible breaches of fiduciary duties or other misconduct in
connection with the WBD Merger.
Litigation Relating to the Skydance Transactions
In connection with the Skydance Transactions, in July 2024, Scott Baker, a purported holder of Paramount Global
Class B Common Stock, filed a putative class action lawsuit in the Court of Chancery of the State of Delaware
against NAI, Shari E. Redstone, Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr.,
Susan Schuman, Skydance and David Ellison (the “Baker Action”). The complaint alleges breaches of fiduciary
duties to Paramount Global Class B stockholders in connection with the negotiation and approval of the
Transaction Agreement, among other claims, and seeks unspecified damages, costs and expenses, as well as other
relief. In November 2024, the Court granted the parties’ stipulation in the Baker Action to (i) postpone briefing on
the motions to dismiss until the filing or designation of an operative complaint following resolution of the
plaintiff’s motion to appoint him and the Baerlocher Family Trust, a purported holder of Paramount Global Class B
Common Stock, as co-lead plaintiffs and Berger Montague PC as interim class counsel (the “Baker Leadership
Motion”), and (ii) stay discovery until resolution of any motion to dismiss an operative complaint following
resolution of the Baker Leadership Motion. In October 2024, various purported stockholders filed motions to
intervene to oppose the Baker Leadership Motion. In December 2024, the plaintiff, along with Mark Baerlocher, as
trustee for the Baerlocher Family Trust, filed an amended complaint alleging the same breaches of fiduciary duties
against the same defendants as in the original complaint. In June 2025, counsel for Mr. Baker informed the Court
that the Baker Leadership Motion would be withdrawn without prejudice and that the group of purported
stockholders seeking lead plaintiff status would meet and confer to propose a schedule for resolving lead plaintiff
applications.
In April 2024, the State of Rhode Island Office of the General Treasurer, on behalf of the Employees’ Retirement
System of Rhode Island, a purported holder of Paramount Global Class B Common Stock, filed a verified
complaint for the inspection of books and records under Section 220 of the General Corporation Law of the State
o f Delaware (the “DGCL”) in the Court of Chancery of the State of Delaware against us, seeking the inspection of
books and records to investigate whether Paramount Global’s Board of Directors, NAI, Shari E. Redstone and/or
certain executive officers may have breached their fiduciary duties to stockholders for alleged diversion of
corporate opportunities (the “220 Action”). The magistrate judge held a trial in July 2024 and denied the request
for inspection. The plaintiff filed an exception to the Court, and in January 2025, the Court ruled that the plaintiff
was entitled to obtain books and records that were both necessary and sufficient to fulfill the purpose of its request.
In February 2025, the Court granted an implementing order returning the 220 Action to the magistrate judge for
further proceedings on the scope of production. In March 2025, the Court granted our application for certification
of interlocutory appeal to the Delaware Supreme Court, which was accepted in April 2025. In March 2026, the
Delaware Supreme Court affirmed the trial court’s decision and remanded the case for further proceedings. The
parties submitted supplemental briefs to the Court in June 2026 and submitted reply supplemental briefs in July
2026 concerning the appropriate scope of further inspection.
Certain other purported holders of Paramount Global Class B Common Stock and Class A Common Stock have
delivered demand letters requesting the inspection of books and records to investigate similar alleged breaches of
fiduciary duties in connection with the Skydance Transactions. We have also received demand letters from
purported holders of Paramount Global Class B Common Stock related to alleged omissions in our registration
statement on Form S-4.
-40-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Additionally, in August 2024, LiveVideo.AI Corp. filed a lawsuit in the U.S. District Court for the Southern
District of New York against Shari E. Redstone, NAI, Christine Varney and Monica Seligman, alleging that the
defendants did not fairly consider its offer to purchase Paramount Global. The complaint asserts claims for unfair
competition, tortious interference, unjust enrichment and aiding and abetting breach of fiduciary duty, among
others, and seeks unspecified monetary damages, costs and other relief. The defendants were never served. The
parties exchanged several filings related to service and default. In August 2025, the magistrate judge issued a
Report and Recommendation recommending that the case be dismissed and that the Court impose $10,000 in
monetary sanctions against LiveVideo.AI Corp. In September 2025, the district judge adopted the report in full,
dismissed the case, imposed the sanctions, and enjoined LiveVideo.AI Corp. from filing any further lawsuits in any
federal district court arising out of the Skydance Transactions. LiveVideo.AI Corp. filed a notice of appeal in
November 2025, and in April 2026, the appeal was dismissed. In April 2026, LiveVideo.AI Corp. moved to
reinstate the appeal, and in May 2026, the Court denied the motion. LiveVideo.AI Corp. again moved to reinstate
the appeal in June 2026. The parties are currently litigating a motion for sanctions against the plaintiff. In June
2026, following briefing, the Court granted defendants’ motion for sanctions against LiveVideo.AI Corp. and its
counsel. LiveVideo.AI Corp. filed a notice of appeal on July 1, 2026.
In August 2025, Gabelli Value 25 Fund Inc. (“Gabelli”) filed a putative class action complaint in the Court of
Chancery of the State of Delaware against Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E.
Phillips, Jr., Susan Schuman, Harbor Lights (f/k/a National Amusements, Inc.) and Shari E. Redstone (the “NAI
Defendants”), and Skydance Media, LLC and RB Tentpole LP (the “Skydance Defendants”), alleging breach of
fiduciary duty against all defendants and unjust enrichment against the NAI Defendants (the “Gabelli Action”).
Gabelli seeks a declaratory judgment, damages, including rescissory damages and/or quasi-appraisal damages,
disgorgement of NAI’s profits, fees and costs, and pre- and post-judgment interest. In September 2025, the
Skydance Defendants filed placeholder motions to dismiss, and Gabelli filed a motion to be appointed as interim
lead plaintiff representing former minority holders of Paramount Global Class A Common Stock (the “Gabelli
Class A Leadership Motion”). In October 2025, counsel for Gabelli filed a letter with the Court indicating that no
competing motions or objections to the Gabelli Class A Leadership Motion were filed and proposed that the Court
appoint Gabelli as lead plaintiff. In November 2025, the Court granted the Gabelli Class A Leadership Motion and
appointed Gabelli as lead plaintiff to prosecute the claims on behalf of the Class A minority shareholders.
Defendants moved to stay discovery pending resolution of any filed and forthcoming motions to dismiss, and in
February 2026, the Court granted defendants’ motion to stay discovery.
In February 2025, New York City Employees’ Retirement System, the New York City Fire Department Pension
Fund, the New York City Police Pension Fund, the New York City Board of Education Retirement System, and the
Teachers’ Retirement System of the City of New York, purported holders of Paramount Global Class B Common
Stock and Class A Common Stock, filed a putative class action lawsuit in the Court of Chancery of the State of
Delaware against Barbara M. Byrne, Linda M. Griego, Judith A. McHale and Susan Schuman, alleging breaches of
fiduciary duties for their alleged failure to sufficiently consider an alternative offer that the plaintiffs claimed was
superior to the Skydance Transactions (the “NYCERS Action”). The plaintiffs argue that the no-shop provision in
the Transaction Agreement should be declared invalid and unenforceable because it prevented the parties from
engaging in further deal discussions and negotiations with companies other than Skydance, including, specifically,
Project Rise Partners, after the no-shop period began. The plaintiffs further assert that the Court has the power to
invalidate this provision because Skydance allegedly aided and abetted NAI’s and Shari E. Redstone’s breach of
fiduciary duties, including by agreeing to indemnify Shari E. Redstone (through Skydance’s separate agreement
with NAI) for any breach of fiduciary duty claims arising out of the Skydance Transactions up to a certain amount.
Skydance, NAI, Shari E. Redstone and Paramount Global were not named as defendants in the original complaint.
The NYCERS Action originally sought, among other forms of relief, an order from the Court enjoining the closing
of the Skydance Transactions until the Court reached a final resolution on the plaintiffs’ claims and an order
-41-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
compelling the special committee of Paramount Global’s Board of Directors to evaluate Project Rise Partners’
alternative offer to, among other things, acquire Paramount Global Class A Common Stock for $23.00 per share
and Paramount Global Class B Common Stock for $19.00 per share. The Project Rise Partners’ offer was made
after the go-shop period in the Transaction Agreement had ended. The plaintiffs filed a motion for expedited
proceedings along with their complaint. In February 2025, the plaintiffs moved to join Paramount Global,
Skydance, Shari E. Redstone, NAI and various other entities named in the Transaction Agreement as necessary
parties to the litigation and moved for a temporary restraining order preventing the closing of the Skydance
Transactions until the Court considered the plaintiffs’ anticipated motion for injunctive relief following expedited
discovery. In March 2025, the Court allowed plaintiffs to amend the complaint to add Paramount Global,
Skydance, Shari E. Redstone, NAI and the various other entities as defendants. The amended complaint seeks
compensatory damages. The parties reached an agreement to withdraw the plaintiffs’ request for expedition and
their application for injunctive relief in exchange for targeted discovery from certain of the defendants and third
parties. The productions are now complete.
In April 2026, the Court held a status conference in the Baker Action, the NYCERS Action and the Gabelli Action,
at which the Court indicated a preference for coordinating the Class A and Class B stockholder actions and for
providing Class A stockholders discovery equivalent to that provided to Class B stockholders. It directed the
parties to submit a proposed scheduling order governing, among other things, the filing of plenary complaints and
the appointment of Class B leadership. In July 2026, following another status conference, the Court entered a
scheduling order which sets a deadline in October 2026 for briefing the Class B leadership dispute.
In April 2025, Metropolitan Water Reclamation District Retirement Fund, Laborers’ and Retirement Board
Employees’ Annuity and Benefit Fund of Chicago, Gary Mendelsohn, and Park Employees’ Annuity and Benefit
Fund of Chicago, purported holders of Paramount Global Class B Common Stock, filed a complaint for the
inspection of books and records under Section 220 of the DGCL in the Court of Chancery of the State of Delaware
against us to maintain standing to enforce their statutory inspection rights and seek an order to produce all the
books and records identified in their Section 220 demands to investigate possible breaches of fiduciary duties in
connection with the Skydance Transactions. The complaint alleges that the documents produced to such purported
stockholders thus far pursuant to their Section 220 demands are insufficient. The complaint seeks an order
requiring us to produce the documents identified in their Section 220 demands, among other relief. In November
2025, the parties contacted the Court with a request to lift the stay and schedule a trial. A magistrate judge held a
trial in March 2026. Subsequently, the parties simultaneously submitted supplemental briefs in April 2026. The
Court issued a decision in June 2026, which held in part that inspection of certain informal board materials would
be necessary and essential to satisfy plaintiffs’ demands. The parties are negotiating further inspection.
Litigation Relating to Video Streaming Patents
In August 2025, Nokia Technologies Oy (“Nokia”) filed complaints alleging infringement of patents related to
video streaming against Paramount in the United States, Brazil, Germany and the Unified Patent Court (“UPC”) in
Europe. In November 2025, Paramount filed a rate-setting action against Nokia in the High Court of Justice of
England and Wales (“U.K. Court”). In March 2026, Nokia submitted to the jurisdiction of the U.K. Court and
agreed to a mechanism in which the U.K. Court would determine reasonable and non-discriminatory terms for a
global license to Nokia’s video patent portfolio, Paramount would make a refundable interim payment to Nokia as
determined by the U.K. Court, and all parallel litigation involving Nokia’s video patent portfolio would be
withdrawn or dismissed by the parties. The interim payment amount is entirely without prejudice to the amount
payable for the license to be determined at trial and is refundable in that if it exceeds the U.K. Court’s final rate
determination, then Nokia will refund the difference to Paramount with interest. Nokia’s complaints filed in the
United States, Brazil, Germany, and the UPC were dismissed without prejudice, and the U.K. Court set the interim
payment amount in June 2026. The trial is scheduled for late 2026.
-42-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
Claims Related to Former Businesses
Asbestos
We are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which
allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a
predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of
asbestos. We are typically named as one of a large number of defendants in both state and federal cases. In the
majority of asbestos lawsuits, the plaintiffs have not identified which of our products is the basis of a claim. Claims
against us in which a product has been identified most commonly relate to allegations of exposure to asbestos-
containing insulating material used in conjunction with turbines and electrical equipment.
Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and
the number of pending claims, subject to significant fluctuation from period to period. We do not report as pending
those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants
who allege minimal or no impairment. As of June 30, 2026, we had pending approximately 18,300 asbestos claims,
as compared with approximately 17,490 as of December 31, 2025. During the second quarter of 2026, we received
approximately 860 new claims and closed or moved to an inactive docket approximately 610 claims. We report
claims as closed when we become aware that a dismissal order has been entered by a court or when we have
reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the
seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other
factors. Our total costs for settlement and defense of asbestos claims after insurance recoveries and net of tax, were
approximately $23 million for the Successor period from August 7 - December 31, 2025, $11 million and $34
million for the Predecessor periods from January 1 - August 6, 2025, and the year ended December 31, 2024,
respectively. Our costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds
are not always recovered in the same period as the insured portion of the expenses.
Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly
increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is
alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims
brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. A significant
number of pending claims against us are non-cancer claims. It is difficult to predict long-term future asbestos
liabilities, as events and circumstances may impact the estimate.
Environmental and Other
From time to time, we also receive claims from federal and state environmental regulatory agencies and other
entities asserting that we are or may be liable for environmental cleanup costs and related damages principally
relating to our historical and predecessor operations. In addition, from time to time we receive personal injury
claims including toxic tort and product liability claims (other than asbestos) arising from our historical operations
and predecessors.
Contingent Liabilities Relating to Former Businesses
In connection with recording Paramount Global’s net assets at the Ultimate Parent’s basis, “Other liabilities” was
increased to reflect the fair value of Paramount Global’s estimated contingent liabilities for the defense and
settlement of asbestos lawsuits as well as claims from federal and state environmental regulatory agencies and
other entities asserting liability for environmental cleanup costs and related damages (See Note 2). The estimated
fair value of the asbestos-related liability was determined in consultation with a third-party firm with expertise in
-43-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
estimating asbestos liability and represents the estimate of the amount a third party would pay to take on the risk of
any asbestos-related future losses.
We record an accrual for a loss contingency when it is both probable that a liability has been incurred and when the
amount of the loss can be reasonably estimated. The reasonably estimable period for our long-term asbestos
liability is 10 years, which we determine in consultation with a third-party firm with expertise in estimating
asbestos liability and is due to the inherent uncertainties in the tort litigation system. This estimate is based upon
many factors, including the number of outstanding claims, estimated average cost per claim, the breakdown of
claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims, and is
assessed in consultation with the third-party firm. While we believe that our accruals for these matters are
adequate, there can be no assurance that circumstances will not change in future periods and, as a result, our actual
liabilities may be higher or lower than our accrual.
15) SUPPLEMENTAL FINANCIAL INFORMATION
Supplemental Cash Flow Information

| Successor |  | Predecessor |
| Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025
Cash paid for interest |  | $448 |  |  |  |  | $411 |
Cash (received) paid for income taxes |  | $(32) |  |  |  |  | $180 |
Noncash additions to operating lease assets |  | $38 |  |  |  |  | $76 |

Warner Bros. Discovery—Advance Consideration
In the first quarter of 2026, under the terms of the WBD Merger Agreement, we paid a termination fee of
$2.8 billion to Netflix on behalf of WBD in connection with the termination of a prior merger agreement between
Netflix and WBD. The termination fee will be included in the total consideration to be allocated to WBD’s assets
and liabilities as of the acquisition date, and accordingly has been included within “Advance consideration for
WBD acquisition” on the Consolidated Balance Sheet as of June 30, 2026 and within Investing Activities on the
Consolidated Statement of Cash Flows for the six months ended June 30, 2026.
Lease Income
We enter into operating leases for the use of our owned production facilities and office buildings. Lease payments
received under these agreements consist of fixed payments for the rental of space and certain building operating
costs, as well as variable payments based on usage of production facilities and services, and escalating costs of
building operations. We recorded total lease income, including both fixed and variable amounts, of $8 million and
$16 million for the three and six months ended June 30, 2026 (Successor), respectively, and $12 million and $21
million for the three and six months ended June 30, 2025 (Predecessor), respectively.
-44-
PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular dollars in millions, except per share amounts)
FCC Licenses Impairment Charges (Predecessor)
Prior to the third quarter of 2025, FCC licenses were classified as indefinite-lived intangible assets, which were
tested for impairment on an annual basis and between annual tests if events occurred or circumstances changed that
would more likely than not reduce the fair value below carrying value. For the second quarter of 2025, as a result
of declines in industry projections, we determined that interim impairment tests were necessary for six markets in
which we hold FCC licenses.
The impairment tests indicated that the estimated fair values of FCC licenses in each of the six markets tested were
below their respective carrying values. Accordingly, we recorded an impairment charge during the second quarter
of 2025 of $157 million to write down the carrying values of these FCC licenses to their then aggregate estimated
fair value.
-45-

Item 2. | Management’s Discussion and Analysis of Results of Operations and Financial Condition.
| (Tabular dollars in millions, except per share amounts)

Management’s discussion and analysis of the results of operations and financial condition of Paramount Skydance
Corporation should be read in conjunction with the more detailed financial statements and notes thereto included in
our Form 8-K filed with the Securities and Exchange Commission on May 13, 2026, which was filed in order to
recast the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025
to reflect our new segment presentation. References to “Paramount,” the “Company,” “we,” “us” and “our” refer to
Paramount Skydance Corporation and its consolidated subsidiaries, unless the context otherwise requires.
Warner Bros. Discovery Merger—On February 27, 2026, Paramount and Warner Bros. Discovery, Inc. (“WBD”)
announced a definitive merger agreement (the “WBD Merger Agreement”) under which Paramount will acquire
WBD (the “WBD Merger”). The closing of the WBD Merger is subject to customary closing conditions, including
regulatory clearances. The anticipated closing of the WBD Merger has been delayed as a result of a lawsuit, with
the parties agreeing to postpone closing until the earlier of five days following the court’s ruling or June 1, 2027.
The completion of the WBD Merger remains subject to regulatory clearance in certain jurisdictions. Recent
approvals include the European Commission in July 2026 under both the EU Merger Regulation and EU Foreign
Subsidies Regulation following a Phase 1 review.
Under the terms of the WBD Merger Agreement, Paramount will pay $31.00 per WBD share to acquire all
outstanding shares of WBD, which at the time of the WBD Merger Agreement represented an equity value of
$80.9 billion, and will assume WBD’s net debt. At March 31, 2026, WBD’s debt (excluding finance leases) was
comprised of $17.7 billion of senior notes and $15.0 billion of borrowings from a bridge facility. Furthermore, if
the WBD Merger closes, Paramount will pay WBD stockholders a per share “ticking fee” of $0.00277778 for each
day after September 30, 2026 that the WBD Merger has not closed, up to a maximum of $0.25 per WBD share per
90 calendar day period (the “Ticking Consideration”). No Ticking Consideration is payable if the WBD Merger
Agreement is terminated pursuant to its terms. The WBD Merger Agreement has a termination date of March 4,
2027, subject to one automatic extension to June 4, 2027. Also, under the terms of the WBD Merger Agreement, in
the first quarter of 2026, Paramount paid a termination fee of $2.8 billion to Netflix, Inc. (“Netflix”) on behalf of
WBD in connection with the termination of a prior merger agreement between Netflix and WBD. This payment
was initially funded with cash on hand and a $2.15 billion borrowing from our credit facility (see Capital
Structure) and, in accordance with the Subscription Agreements described below, entered into by the Ellison
Parties (as defined below), such amount will ultimately be funded by the $46.7 billion to be received from the
Ellison Parties.
If the WBD Merger Agreement is terminated because the WBD Merger cannot close due to a failure to obtain
antitrust or regulatory approval, or because a court order prevents the WBD Merger from closing on antitrust
grounds, Paramount will owe WBD a $7.0 billion Regulatory Termination Fee (as defined in the WBD Merger
Agreement). In accordance with the Subscription Agreements, this termination fee and the previously paid $2.8
billion Netflix termination fee described above would be funded by the Ellison Parties in exchange for shares of
Paramount Skydance Corporation Class B Common Stock (as defined below) at $16.02 per share.
WBD will owe Paramount a $3.0 billion termination fee under certain circumstances, including if WBD terminates
the WBD Merger Agreement to enter into a definitive agreement for an alternative acquisition proposal.
Concurrent with the execution of the WBD Merger Agreement (i) The Lawrence J. Ellison Revocable Trust, u/a/d
1/22/88, as amended (the “Trust”), and Lawrence J. Ellison (together with the Trust, the “Ellison Parties”) and (ii)
RedBird Capital Partners Fund IV (Master), L.P. (“RedBird” and, together with the Trust, the “Equity Investors”)
entered into subscription agreements (collectively, the “Subscription Agreements”) providing for a private
placement investment in Class B common stock of Paramount Skydance Corporation (“Paramount Skydance
Corporation Class B Common Stock”), for an aggregate amount of up to $46.7 billion (subject to increase if the
-46-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Ticking Consideration or certain other additional amounts as defined in the WBD Merger Agreement are required)
from the Trust and $250 million from RedBird pursuant to the terms of the Subscription Agreements.
In April 2026, we announced that the Equity Investors had determined, as permitted under the Subscription
Agreements, to assign their subscription rights thereunder (such assignments, the “Equity Syndication” and the
assignees, the “Equity Syndication Parties”) to the Equity Syndication Parties. The Equity Syndication Parties are
composed of affiliates of the Ellison Parties and RedBird, as well as the following institutional investors: The
Public Investment Fund, L’Imad 1st SPV 2 Exempt RSC LTD (an investment vehicle of L’Imad Holding, an Abu
Dhabi sovereign wealth fund), QIA TMT Holding LLC (an investment vehicle of the Qatar Investment Authority),
and LionTree Investment Fund, L.P. The aggregate allocations under the Equity Syndication total to the full
amount of the commitments under the Subscription Agreements. At closing of the WBD Merger, Paramount will
issue to each Equity Syndication Party a number of newly issued nonvoting shares of Paramount Skydance
Corporation Class B Common Stock (or securities convertible into shares) equal to its allocated amount divided by
the Syndication Purchase Price, defined as the 20-trading-day daily volume-weighted average price of Paramount
Skydance Corporation Class B Common Stock determined as of the third business day prior to the closing of the
WBD Merger, subject to a ceiling of $16.02 per share and a floor of $12.00 per share. The Equity Syndication does
not relieve the Equity Investors of their contractual commitments made to the Company. To the extent that any
Equity Syndication Party does not perform under its syndication assignment, the obligation of the Equity Investors
to fund the related amount of the commitments would continue to be required under the Subscription Agreements.
Following the closing, the Ellison Family (as defined below) and RedBird will remain the sole holders of
Paramount Class A Common Stock, representing 100% of the voting shares of Paramount. For the purpose of
determining the controlling ownership of Paramount, the Ellison family is comprised of Lawrence J. Ellison and
David Ellison (the “Ellison Family”). David Ellison is the son of Lawrence J. Ellison, and Lawrence J. Ellison and
David Ellison are accordingly considered immediate family members.
We have also secured commitments for debt financing totaling $54 billion, which include a $49 billion 364-day
senior secured bridge loan facility, which we plan, subject to market conditions and other timing considerations, to
reduce or replace with permanent financing (which may include issuance of debt securities) on or prior to the
closing of the WBD Merger and, in connection with a credit agreement entered into in April 2026 (the “Pro Rata
Credit Agreement”), $2.50 billion three-year senior secured term A loans and $2.50 billion five-year senior secured
term A loans. The term A loans will be made in a single borrowing on the closing date of the WBD Merger. The
Pro Rata Credit Agreement also provides for a $5.00 billion five-year senior secured revolving credit facility,
which will be used for general corporate purposes, and will replace our existing revolving credit facility (see
Capital Structure). The availability and initial funding of the facilities under the Pro Rata Credit Agreement and the
bridge loan facility (if not replaced by permanent financing) are subject to the satisfaction or waiver of customary
conditions set forth in the Pro Rata Credit Agreement and the bridge commitment papers, including the closing of
the WBD Merger.
In addition, following the closing of the WBD Merger, each holder of Paramount Skydance Corporation Class B
Common Stock (excluding any Equity Investor or affiliate thereof) as of a record date to be determined will
receive, without payment of any consideration, one 10-year warrant (each, a “Warrant”) for each share held,
exercisable at an initial exercise price per share equal to the Syndication Purchase Price and subject to customary
anti-dilution and fundamental change make-whole adjustments. Beginning on the third anniversary of issuance, we
may call the Warrants if the closing price of our Class B Common Stock equals or exceeds $30.00 for at least 20
trading days during any 30 consecutive trading day period. We intend to apply to list the Warrants for trading on
the Nasdaq Stock Market LLC (“Nasdaq”) separate from our Class B Common Stock, subject to applicable
approvals. The planned Warrant issuance is in lieu of a previously planned rights offering at $16.02 per share. In
-47-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
connection with the Warrant issuance, existing Paramount restricted stock units are expected to be equitably
adjusted pursuant to pre-existing anti-dilution provisions in Paramount equity plans.
WBD Debt—In May 2026, we commenced (i) exchange offers, which are expected to result in the exchange of up
to $12.7 billion aggregate principal amount of certain of WBD’s senior notes for newly issued Paramount notes,
and (ii) tender offers for cash for up to $2.4 billion aggregate principal amount of other WBD senior notes, in each
case conditioned on the closing of the WBD Merger. In June 2026, WBD entered into a seven-year $13.0 billion
term loan (“First Lien Credit Agreement”), and a seven-year €1.7 billion term loan (the “WBD Term Loans”). The
proceeds were used to repay the $15.0 billion bridge facility WBD had outstanding on March 31, 2026. We plan to
replace or refinance the WBD Term Loans, if not refinanced by WBD prior to closing of the WBD Merger.
The NAI Transaction—On August 7, 2025, pursuant to a purchase and sale agreement dated July 7, 2024, certain
affiliates of investors in Skydance Media, LLC (“Skydance”), comprised of entities controlled by the Ellison
Family and affiliates of RedBird Capital Partners (collectively the “NAI Equity Investors”), purchased all of the
outstanding equity interests of Paramount Global’s controlling stockholder, National Amusements, Inc. (“NAI”)
from the shareholders of NAI (the “NAI Transaction”).
The Skydance Transactions—Also on August 7, 2025, following the completion of the NAI Transaction and
pursuant to the Transaction Agreement dated as of July 7, 2024, Paramount Global and Skydance became wholly-
owned subsidiaries of Paramount Skydance Corporation (the transactions contemplated by the Transaction
Agreement, the “Skydance Transactions”). Paramount Skydance Corporation, formerly known as New Pluto
Global, Inc., was formed on June 3, 2024 to consummate the Transactions and was a wholly-owned direct
subsidiary of Paramount Global until, through a series of mergers, it became the holding company of Paramount
Global and Skydance as part of the Skydance Transactions.
Concurrent with the NAI Transaction, the NAI Equity Investors and certain other affiliates of investors in
Skydance made an investment of $6.0 billion into Paramount Skydance Corporation (the “PIPE Transaction”) in
exchange for 400 million newly issued shares of Paramount Skydance Corporation Class B Common Stock for a
purchase price of $15.00 per share, and the NAI Equity Investors also received warrants to purchase 200 million
shares of Paramount Skydance Corporation Class B Common Stock at an initial exercise price of $30.50 per share
(subject to customary anti-dilution adjustments), which expire five years after issuance. $4.45 billion of the PIPE
Transaction investment was used to fund the cash-stock election discussed below and $1.52 billion of cash was
provided to the Company.
The Skydance Transactions also included: (1) a transaction pursuant to which each outstanding Skydance
membership unit held by Skydance investors and each Skydance Phantom Unit was converted into the right to
receive the applicable portion of 316.7 million shares of Paramount Skydance Corporation Class B Common Stock
(313.8 million shares after reduction in connection with certain tax withholding requirements), and (2) a cash-stock
election offered to holders of Paramount Global common stock pursuant to which (a) shares of Paramount Global
Class A Common Stock held by stockholders other than NAI or its subsidiaries were converted, at the
stockholders’ election, into the right to receive either $23.00 in cash (“Class A Cash Consideration”) or 1.5333
shares of Paramount Skydance Corporation Class B Common Stock (“Class A Stock Consideration”), and (b)
shares of Paramount Global Class B Common Stock held by stockholders other than NAI or its subsidiaries, the
NAI Equity Investors and certain other affiliates of investors in Skydance referred to above were converted, at the
stockholders’ election, into the right to receive either $15.00 in cash (“Class B Cash Consideration”), subject to
proration, or one share of Paramount Skydance Corporation Class B Common Stock (“Class B Stock
Consideration”). The shares of Paramount Class A Common Stock held by NAI and its subsidiaries converted into
shares of Class A common stock, par value $0.001 per share. Shares of Paramount Global Class A Common Stock
-48-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
for which elections to receive Class A Cash Consideration or Class A Stock Consideration were not made or were
validly revoked were automatically converted into Class A Stock Consideration. Shares of Paramount Global Class
B Common Stock for which elections to receive Class B Cash Consideration were not made or were validly
revoked were converted automatically into one share of Paramount Skydance Corporation Class B Common Stock.
Holders of shares of Class A common stock of Paramount Skydance Corporation (“Paramount Skydance
Corporation Class A Common Stock”) are entitled to one vote per share with respect to all matters on which the
holders of Paramount Skydance Corporation common stock are entitled to vote. Holders of Paramount Skydance
Corporation Class B Common Stock do not have voting rights. Following the closing of the Skydance Transactions
and the NAI Transaction, NAI, which was renamed Harbor Lights Entertainment, Inc., and its subsidiaries held
100.0% of the Paramount Skydance Corporation Class A Common Stock. Accordingly, entities controlled by the
Ellison Family indirectly hold approximately 77.5% of the Paramount Skydance Corporation Class A Common
Stock through their collective approximate 77.5% ownership interest in Harbor Lights Entertainment, Inc., and as a
result the Ellison Family is the controlling stockholder and the ultimate parent of Paramount (“Ultimate Parent”).
Pushdown of Ultimate Parent’s Basis—At the time Paramount Global and Skydance became subsidiaries of
Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance, and as a
result, this transaction has been accounted for as a transaction between entities under common control. As a
transaction between entities under common control, the net assets were combined at the Ultimate Parent’s basis,
which for Paramount Global was deemed to be the estimated fair value as of August 7, 2025, the date of the
closing of the NAI Transaction, which was the point at which the Ellison Family obtained control of Paramount
Global. As a result, the net assets of Paramount Global were recorded at their fair values as of this date. Since the
net assets of Skydance were already at the Ultimate Parent’s basis, no adjustment to the fair value of net assets was
necessary, and Skydance was combined with Paramount Global’s net assets at the Ultimate Parent’s basis as of this
date.
Due to the pushdown of the Ultimate Parent’s basis, which resulted in a new basis of accounting, the results of
operations, financial position and cash flows are not comparable between the Successor and Predecessor periods.
Accordingly, our consolidated financial statements and footnote disclosures are presented in distinct periods. The
periods prior to the closing of the Skydance Transactions and the NAI Transaction include only Paramount Global
and are identified as “Predecessor,” and the periods beginning on August 7, 2025 reflect Paramount Skydance
Corporation and are identified as “Successor.” In addition, we are required to present segment information for the
Predecessor period based on our previous segments, Filmed Entertainment, Direct-to-Consumer, and TV Media.
We have certain contracts that require us to obtain consents from other parties in connection with the NAI
Transaction and the Skydance Transactions. If these consents cannot be obtained, the counterparties to these
contracts (and, as a result, other third parties with which we have contractual agreements) may have the right to
terminate, reduce the scope of or otherwise alter their relationships with us. Accordingly, the failure to obtain such
consents could have a material adverse effect on our business, financial condition and results of operations.
-49-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Significant components of management’s discussion and analysis of results of operations and financial condition
include:
•Overview—Summary of our business and operational highlights.
•Consolidated Results of Operations—Analysis of our results on a consolidated basis for the three and six
months ended June 30, 2026 (Successor), including a comparison to the three and six months ended
June 30, 2025 (Predecessor).
•Segment Results of Operations—Analysis of our results on a reportable segment basis for the three and six
months ended June 30, 2026 (Successor).
•Liquidity and Capital Resources—Discussion of our cash flows, including sources and uses of cash, for the
six months ended June 30, 2026 (Successor), including a comparison to the six months ended June 30,
2025 (Predecessor), and of our outstanding debt as of June 30, 2026 (Successor), including Supplemental
Guarantor Financial Information.
•Legal Matters—Discussion of legal matters to which we are involved.
Overview
Operational Highlights - Three Months Ended June 30, 2026 and 2025

| Successor |  | Predecessor |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Increase/(Decrease) |
Consolidated Results of Operations |  | 2026 |  |  |  |  | 2025 |  |  | $ |  | % |
GAAP: |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $6,913 |  |  |  |  | $6,849 |  |  | $64 |  | 1% |
Operating income |  | $475 |  |  |  |  | $399 |  |  | $76 |  | 19% |
Net earnings attributable to Parent |  | $41 |  |  |  |  | $57 |  |  | $(16) |  | (28)% |
Diluted EPS |  | $.04 |  |  |  |  | $.08 |  |  | $(.04) |  | (50)% |
Non-GAAP: (a) |  |  |  |  |  |  |  |  |  |  |  |  |
Adjusted EBITDA |  | $1,099 |  |  |  |  | $863 |  |  | $236 |  | 27% |
Adjusted net earnings attributable to Parent |  | $205 |  |  |  |  | $315 |  |  | $(110) |  | (35)% |
Adjusted diluted EPS |  | $.18 |  |  |  |  | $.46 |  |  | $(.28) |  | (61)% |

(a) See “Reconciliation of Non-GAAP Measures” for reconciliations of these non-GAAP measures to the most directly comparable
financial measures in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or
“GAAP”).
Revenues increased 1% to $6.91 billion, reflecting growth at Paramount+ and higher licensing revenues, driven by
the inclusion of Skydance and increases in revenues from secondary market licensing and content produced for
third parties. These increases were partially offset by l ower revenues from our linear networks and from theatrical
releases, reflecting the comparison to the second quarter 2025 release of Mission: Impossible - The Final
Reckoning.
Skydance is included in our results in periods following the close of the Skydance Transactions. In addition, as a
result of the pushdown of the Ultimate Parent’s basis, operating income, net earnings attributable to Parent, and
diluted EPS in 2026 include amortization associated with the establishment of intangible assets and also reflect the
net decrease in programming assets. Net earnings and diluted EPS also include interest expense associated with the
-50-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
adjustment of our debt to its fair value. See Note 2 to the consolidated financial statements for details relating to
the pushdown of the Ultimate Parent’s basis.
Operating income of $475 million for the three months ended June 30, 2026 increased 19%. Operating income in
2026 includes transaction-related items of $153 million and restructuring charges of $35 million while 2025
includes restructuring charges and transaction-related items totaling $181 million and an impairment charge of
$157 million. The comparison also reflects higher revenue and l ower content costs, including from reductions in
programming assets resulting from the pushdown of the Ultimate Parent’s basis, partially offset by amortization of
intangible assets.
Net earnings attributable to Parent of $41 million, or $.04 per diluted share de creased 28% compared with net
earnings attributable to Parent of $57 million, or $.08 per diluted share, for the same prior-year period as the
increase in operating income was more than offset by a higher tax provision and higher interest expense. Adjusted
net earnings attributable to Parent, which excludes the restructuring charges, transaction-related items, and
impairment charges noted above, decreased 35% to $205 million, or $.18 per diluted share from $315 million, or
$.46 per diluted share. The decreases in diluted EPS and adjusted diluted EPS also reflect shares issued in
connection with the Skydance Transactions and the NAI Transaction. See Reconciliation of Non-GAAP Measures
for the definition of adjusted net earnings attributable to Parent and a reconciliation to net earnings attributable to
Parent.
Adjusted EBITDA grew 27% primarily reflecting the lower content costs from reductions in programming assets
resulting from the pushdown of the Ultimate Parent’s basis and cost savings for our linear programming, partially
offset by lower revenues from our linear networks. See Reconciliation of Non-GAAP Measures for the definition of
Adjusted EBITDA and a reconciliation to net earnings attributable to Parent, the most directly comparable
financial measure in accordance with U.S. GAAP.
Operational Highlights - Six Months Ended June 30, 2026 and 2025

| Successor |  | Predecessor |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Increase/(Decrease) |
Consolidated Results of Operations |  | 2026 |  |  |  |  | 2025 |  |  | $ |  | % |
GAAP: |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  | $14,260 |  |  |  |  | $14,041 |  |  | $219 |  | 2% |
Operating income |  | $1,091 |  |  |  |  | $949 |  |  | $142 |  | 15% |
Net earnings attributable to Parent |  | $209 |  |  |  |  | $209 |  |  | $— |  | —% |
Diluted EPS |  | $.19 |  |  |  |  | $.31 |  |  | $(.12) |  | (39)% |
Non-GAAP: (a) |  |  |  |  |  |  |  |  |  |  |  |  |
Adjusted EBITDA |  | $2,260 |  |  |  |  | $1,595 |  |  | $665 |  | 42% |
Adjusted net earnings attributable to Parent |  | $466 |  |  |  |  | $510 |  |  | $(44) |  | (9)% |
Adjusted diluted EPS |  | $.42 |  |  |  |  | $.75 |  |  | $(.33) |  | (44)% |

(a) See “Reconciliation of Non-GAAP Measures” for reconciliations of these non-GAAP measures to the most directly comparable
financial measures in accordance with U.S. GAAP.
Revenues increased 2% to $14.26 billion, driven by growth at Paramount+ and higher licensing revenues,
principally from the inclusion of Skydance in the current year, partially offset by lower revenues from our linear
networks and theatrical releases.
-51-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
As discussed above, periods following the closing of the Skydance Transactions on August 7, 2025 reflect the
inclusion of Skydance and the effects of the pushdown of the Ultimate Parent’s basis.
Operating income of $1.09 billion for the six months ended June 30, 2026 increased 15%, driven by lower content
costs from reductions in programming assets resulting from the pushdown of the Ultimate Parent’s basis and lower
compensation and marketing costs from the impact from cost savings initiatives, partially offset by amortization of
intangible assets. Operating income in 2026 also includes transaction-related items of $256 million and
restructuring costs of $35 million while 2025 includes restructuring charges and transaction-related items totaling
$266 million, an impairment charge of $157 million and gain on dispositions totaling $35 million.
Net earnings attributable to Parent was $209 million, or $.19 per diluted share for the six months ended June 30,
2026 compared with net earnings attributable to Parent of $209 million, or $.31 per diluted share, for the same
prior-year period. Adjusted net earnings attributable to Parent, which excludes certain items identified as affecting
comparability that are not part of our normal operations including the restructuring and transaction-related items
and impairment charges noted above decreased 9% to $466 million, or $.42 per diluted share from $510 million, or
$.75 per diluted share. The decrease in diluted EPS and adjusted diluted EPS reflects shares issued in connection
with the Skydance Transactions and the NAI Transaction. See Reconciliation of Non-GAAP Measures for the
definition of adjusted net earnings attributable to Parent and a reconciliation to net earnings attributable to Parent.
Adjusted EBITDA grew 42% primarily reflecting lower content costs from cost savings for our linear
programming and reductions in programming assets resulting from the pushdown of the Ultimate Parent’s basis, as
well as lower compensation and marketing costs, partially offset by lower revenues from our linear networks. See
Reconciliation of Non-GAAP Measures for the definition of Adjusted EBITDA and a reconciliation to net earnings
attributable to Parent, the most directly comparable financial measure in accordance with U.S. GAAP.
We are exposed to political risks inherent in conducting a global business such as retaliatory actions by
governments reacting to changes in the U.S. and other countries, including in connection with the imposition of
tariffs and other changes in trade policies, as well as from the conflict involving the U.S., Israel and Iran. Growing
macroeconomic uncertainty may negatively affect our results, in particular from potential impacts on the
advertising market.
-52-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Reconciliation of Non-GAAP Measures
In the first quarter of 2026 we transitioned our non-GAAP profitability measure from Adjusted operating income
before depreciation and amortization (Adjusted OIBDA) to Adjusted EBITDA, which we define as net earnings
(loss) attributable to Parent before interest expense and income; (provision for) benefit from income taxes; other
items; equity in earnings (loss) of investee companies, net of tax; and depreciation and amortization, adjusted to
exclude stock-based compensation expense and certain items identified as affecting comparability that are not part
of our normal operations. This change was made to align with how management began measuring the Company’s
ongoing operating performance in 2026. While both adjusted measures exclude items identified as affecting
comparability that are not part of our normal operations, including programming charges, impairment charges,
restructuring charges, transaction-related items, other corporate matters, and gain (loss) on dispositions, each where
applicable, Adjusted EBITDA, as we define it, also excludes stock-based compensation, which is a noncash
expense that management does not consider to be part of our underlying operating performance. Net earnings (loss)
attributable to Parent is the most directly comparable financial measure in accordance with U.S. GAAP. Adjusted
earnings before income taxes, adjusted provision for income taxes, adjusted net earnings attributable to Parent,
adjusted diluted EPS, and adjusted effective income tax rate are also measures of performance not calculated in
accordance with U.S. GAAP (together with Adjusted EBITDA, the “adjusted measures”), and exclude certain
items identified as affecting comparability that are not part of our normal operations, including the items described
above, as well as gain (loss) from investments and discrete tax items, each where applicable.
We use these adjusted measures to, among other things, evaluate our operating performance. These measures are
among the primary measures used by management for planning and forecasting of future periods, and they are
important indicators of our operational strength and business performance. In addition, we use Adjusted EBITDA
to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for
investors because they allow investors to view our performance in a manner consistent with the method used by
our management; and because they exclude items that are not representative of our normal operations, they provide
a clearer perspective on underlying performance, and make it easier for investors, analysts and peers to compare
our operating performance to other companies in the industry and to compare our results across reporting periods.
Because the adjusted measures are measures of performance not calculated in accordance with U.S. GAAP, they
should not be considered in isolation of, or as a substitute for, our results as reported under U.S. GAAP, including
net earnings (loss), (provision for) benefit from income taxes, net earnings (loss) attributable to Parent, diluted
EPS, and effective income tax rate, as applicable, as indicators of operating performance and undue reliance should
not be placed on these adjusted measures. Other companies may define these measures, including Adjusted
EBITDA, differently and, as a result, our adjusted measures may not be directly comparable to similarly titled
measures of other companies.
-53-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
The following tables reconcile the adjusted measures to their most directly comparable financial measures in
accordance with U.S. GAAP. The tax impacts on the items identified as affecting comparability in the tables below
have been calculated using the tax rate applicable to each item.

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  |  | 2025 |
Net earnings attributable to Parent (GAAP) |  | $41 |  |  |  |  | $57 |  |  |  | $209 |  |  |  |  | $209 |
Net earnings attributable to noncontrolling interests |  | — |  |  |  |  | 4 |  |  |  | 7 |  |  |  |  | 13 |
Equity in loss of investee companies, net of tax |  | 54 |  |  |  |  | 67 |  |  |  | 116 |  |  |  |  | 140 |
Provision for income taxes |  | 120 |  |  |  |  | 50 |  |  |  | 275 |  |  |  |  | 150 |
Other items, net |  | 34 |  |  |  |  | 39 |  |  |  | 58 |  |  |  |  | 76 |
Interest expense, net |  | 226 |  |  |  |  | 182 |  |  |  | 426 |  |  |  |  | 361 |
Gain on dispositions (a) |  | — |  |  |  |  | — |  |  |  | — |  |  |  |  | (35) |
Transaction-related items (a) |  | 153 |  |  |  |  | 4 |  |  |  | 256 |  |  |  |  | 24 |
Restructuring charges (a) |  | 35 |  |  |  |  | 177 |  |  |  | 35 |  |  |  |  | 242 |
Impairment charges (a) |  | — |  |  |  |  | 157 |  |  |  | — |  |  |  |  | 157 |
Stock-based compensation |  | 72 |  |  |  |  | 39 |  |  |  | 152 |  |  |  |  | 83 |
Depreciation and amortization |  | 364 |  |  |  |  | 87 |  |  |  | 726 |  |  |  |  | 175 |
Adjusted EBITDA (Non-GAAP) |  | $1,099 |  |  |  |  | $863 |  |  |  | $2,260 |  |  |  |  | $1,595 |

(a) See notes on the following tables for additional information on items affecting comparability.
-54-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

| Successor
| Three Months Ended June 30, 2026
| Earnings Before Income Taxes |  | Provision for Income Taxes |  | Net Earnings Attributable to Parent |  | Diluted EPS
Reported (GAAP) |  | $215 |  |  |  | $(120) | (c) |  |  | $41 |  |  |  | $.04 |
Items affecting comparability: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring charges (a) |  | 35 |  |  |  | (5) |  |  |  | 30 |  |  |  | .02 |
Transaction-related items (b) |  | 153 |  |  |  | (15) |  |  |  | 138 |  |  |  | .12 |
Discrete tax items |  | — |  |  |  | (4) |  |  |  | (4) |  |  |  | — |
Adjusted (Non-GAAP) |  | $403 |  |  |  | $(144) | (c) |  |  | $205 |  |  |  | $.18 |

(a) Reflects severance costs, as further described under Restructuring and Transaction-Related Items.
(b) Principally reflects legal, advisory, and other professional fees associated with the planned WBD Merger and related
integration.
(c) The reported effective income tax rate for the three months ended June 30, 2026 was 55.8% and the adjusted effective income
tax rate, which is calculated as the adjusted provision for income taxes of $144 million divided by adjusted earnings before
income taxes of $403 million, was 35.7%. These adjusted measures exclude the items affecting comparability detailed above.

| Predecessor
| Three Months Ended June 30, 2025
| Earnings Before Income Taxes |  | Provision for Income Taxes |  | Net Earnings Attributable to Parent |  | Diluted EPS
Reported (GAAP) |  | $178 |  |  |  | $(50) | (d) |  |  | $57 |  |  |  | $.08 |
Items affecting comparability: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Impairment charges (a) |  | 157 |  |  |  | (39) |  |  |  | 118 |  |  |  | .17 |
Restructuring charges (b) |  | 177 |  |  |  | (42) |  |  |  | 135 |  |  |  | .20 |
Transaction-related items (c) |  | 4 |  |  |  | (1) |  |  |  | 3 |  |  |  | .01 |
Discrete tax items |  | — |  |  |  | 2 |  |  |  | 2 |  |  |  | — |
Adjusted (Non-GAAP) |  | $516 |  |  |  | $(130) | (d) |  |  | $315 |  |  |  | $.46 |

(a) Reflects a charge to reduce the carrying values of FCC licenses in certain markets to their estimated fair values.
(b) Reflects severance costs, as further described under Restructuring and Transaction-Related Items.
(c) Reflects legal, advisory, and other professional fees relating to the Skydance Transactions.
(d) The reported effective income tax rate for the three months ended June 30, 2025 was 28.1% and the adjusted effective income
tax rate, which is calculated as the adjusted provision for income taxes of $130 million divided by adjusted earnings from
continuing operations before income taxes of $516 million, was 25.2%. These adjusted measures exclude the items affecting
comparability detailed above.
-55-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

| Successor
| Six Months Ended June 30, 2026
| Earnings Before Income Taxes |  | Provision for Income Taxes |  | Net Earnings Attributable to Parent |  | Diluted EPS
Reported (GAAP) |  | $607 |  |  |  | $(275) | (c) |  |  | $209 |  |  |  | $.19 |
Items affecting comparability: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Restructuring charges (a) |  | 35 |  |  |  | (5) |  |  |  | 30 |  |  |  | .03 |
Transaction-related items (b) |  | 256 |  |  |  | (21) |  |  |  | 235 |  |  |  | .21 |
Discrete tax items |  | — |  |  |  | (8) |  |  |  | (8) |  |  |  | (.01) |
Adjusted (Non-GAAP) |  | $898 |  |  |  | $(309) | (c) |  |  | $466 |  |  |  | $.42 |

(a) Reflects severance costs, as further described under Restructuring and Transaction-Related Items.
(b) Principally reflects legal, advisory and other professional fees associated with the planned WBD Merger and related
integration.
(c) The reported effective income tax rate for the six months ended June 30, 2026 was 45.3% and the adjusted effective income
tax rate, which is calculated as the adjusted provision for income taxes of $309 million divided by adjusted earnings before
income taxes of $898 million, was 34.4%. These adjusted measures exclude the items affecting comparability detailed above.

| Predecessor
| Six Months Ended June 30, 2025
| Earnings Before Income Taxes |  | Provision for Income Taxes |  | Net Earnings Attributable to Parent |  | Diluted EPS
Reported (GAAP) |  | $512 |  |  |  | $(150) | (e) |  |  | $209 |  |  |  | $.31 |
Items affecting comparability: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Impairment charges (a) |  | 157 |  |  |  | (39) |  |  |  | 118 |  |  |  | .17 |
Restructuring charges (b) |  | 242 |  |  |  | (58) |  |  |  | 184 |  |  |  | .27 |
Transaction-related items (c) |  | 24 |  |  |  | (1) |  |  |  | 23 |  |  |  | .04 |
Gain on dispositions (d) |  | (35) |  |  |  | 2 |  |  |  | (33) |  |  |  | (.05) |
Discrete tax items |  | — |  |  |  | 9 |  |  |  | 9 |  |  |  | .01 |
Adjusted (Non-GAAP) |  | $900 |  |  |  | $(237) | (e) |  |  | $510 |  |  |  | $.75 |

(a) Reflects a charge to reduce the carrying values of FCC licenses in certain markets to their estimated fair values.
(b) Includes severance costs and charges for the impairment of lease assets, as further described under Restructuring and
Transaction-Related Items.
(c) Reflects legal, advisory, and other professional fees relating to the Skydance Transactions.
(d) Principally reflects a gain associated with the disposition of a noncore business.
(e) The reported effective income tax rate for the six months ended June 30, 2025 was 29.3% and the adjusted effective income
tax rate, which is calculated as the adjusted provision for income taxes of $237 million divided by adjusted earnings before
income taxes of $900 million, was 26.3%. These adjusted measures exclude the items affecting comparability detailed above.
-56-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Consolidated Results of Operations
Revenues

| Three Months Ended June 30,
| Successor |  | Predecessor |  |
|  |  | % of Total Revenues |  |  |  |  | % of Total Revenues |  |  | Increase/(Decrease)
| 2026 |  |  |  | 2025 |  |  |  | $ |  | %
Revenues by Type: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advertising |  | $1,959 |  |  |  | 28% |  |  |  |  | $2,152 |  |  |  | 31% |  |  |  | $(193) |  | (9)%
Affiliate and subscription |  | 3,520 |  |  |  | 51 |  |  |  |  | 3,445 |  |  |  | 50 |  |  |  | 75 |  | 2
Theatrical |  | 138 |  |  |  | 2 |  |  |  |  | 254 |  |  |  | 4 |  |  |  | (116) |  | (46)
Licensing and other |  | 1,296 |  |  |  | 19 |  |  |  |  | 998 |  |  |  | 15 |  |  |  | 298 |  | 30
Total Revenues |  | $6,913 |  |  |  | 100% |  |  |  |  | $6,849 |  |  |  | 100% |  |  |  | $64 |  | 1%

| Six Months Ended June 30,
| Successor |  |  | Predecessor |  |  | Increase/(Decrease)
|  |  |  |  | % of Total Revenues |  |  |  |  |  |  |  | % of Total Revenues |
| 2026 |  |  |  |  | 2025 |  |  | $ |  | %
Revenues by Type: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Advertising |  | $4,401 |  |  |  | 31% |  |  |  |  |  | $4,665 |  |  |  | 33% |  |  | $(264) |  | (6)%
Affiliate and subscription |  | 7,021 |  |  |  | 49 |  |  |  |  |  | 6,842 |  |  |  | 49 |  |  | 179 |  | 3
Theatrical |  | 290 |  |  |  | 2 |  |  |  |  |  | 402 |  |  |  | 3 |  |  | (112) |  | (28)
Licensing and other |  | 2,548 |  |  |  | 18 |  |  |  |  |  | 2,132 |  |  |  | 15 |  |  | 416 |  | 20
Total Revenues |  | $14,260 |  |  |  | 100% |  |  |  |  |  | $14,041 |  |  |  | 100% |  |  | $219 |  | 2%

Advertising
Advertising revenues are generated primarily from the sale of advertising spots on our global broadcast and cable
networks, television stations, and streaming services.
The decreases in advertising revenues of 9% and 6% for the three and six months ended June 30, 2026,
respectively, are primarily due to declines in the linear advertising market and a negative impact of 6% and 3%
from the comparison against CBS’s broadcast in the second quarter of 2025 of the National Semifinals and
National Championship games of the NCAA Division I Men’s Basketball Championship (the “NCAA
Tournament”), which we have the rights to broadcast every other year, partially offset by growth for Paramount+.
Affiliate and subscription
Affiliate and subscription revenues are principally comprised of affiliate fees we receive from distributors for their
carriage of our cable networks (cable affiliate fees) and television stations (retransmission fees), as well as fees
-57-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
received from third-party television stations for their affiliation with the CBS Television Network (reverse
compensation), and subscription fees for our streaming services.
The growth in affiliate and subscription revenues of 2% and 3% for the three and six months ended June 30, 2026,
respectively, r eflects increases of 6% in each period from growth at Paramount+, driven by pricing increases and
subscriber growth, partially offset by decreases of 3% in each period from lower linear affiliate revenues.
Paramount+ had 81.6 million subscribers at June 30, 2026 and 76.8 million subscribers at June 30, 2025.
Theatrical
The decreases in theatrical revenues of $116 million and $112 million for the three- and six-month periods,
respectively, were driven by the comparison against t he second quarter 2025 rele ase of Mission: Impossible - The
Final Reckoning. Theatrical releases in 2026 included Scream 7 in the first quarter and Scary Movie (2026) in the
second quarter.
Licensing and other
Licensing and other revenues are principally comprised of fees from the licensing of the rights to exhibit our
internally-produced television and film programming on various platforms in the secondary market after its initial
exhibition on our owned or third-party platforms; license fees from content produced or distributed for third
parties; home entertainment revenues, which primarily include revenues from the viewing of our content on a
transactional basis through transactional video-on-demand (TVOD) and electronic sell-through services; fees from
the use of our trademarks and brands for consumer products, recreation and live events; revenues from games and
other interactive content; and revenues from studio rentals and production services.
The increases in licensing and other revenues of 30% and 20% for the three and six months ended June 30, 2026,
respectively, were driven by the inclusion of Skydance following the Skydance Transactions in August 2025 and
increases in revenues from secondary market licensing and content produced for third parties.
Operating Expenses

| Three Months Ended June 30,
| Successor |  |  | Predecessor |  |  |
|  |  | % of Operating Expenses |  |  |  |  | % of Operating Expenses |  | Increase/(Decrease)
| 2026 |  |  |  | 2025 |  |  | $ |  | %
Operating expenses by Type: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Content costs |  | $3,267 |  |  |  | 74% |  |  |  |  | $3,424 |  |  |  | 74% |  |  | $(157) |  | (5)%
Distribution and other |  | 1,176 |  |  |  | 26 |  |  |  |  | 1,200 |  |  |  | 26 |  |  | (24) |  | (2)
Total Operating Expenses |  | $4,443 |  |  |  | 100% |  |  |  |  | $4,624 |  |  |  | 100% |  |  | $(181) |  | (4)%

| Six Months Ended June 30,
| Successor |  |  | Predecessor |  |  |
|  |  | % of Operating Expenses |  |  |  |  | % of Operating Expenses |  | Increase/(Decrease)
| 2026 |  |  |  | 2025 |  |  | $ |  | %
Operating expenses by Type: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Content costs |  | $7,047 |  |  |  | 76% |  |  |  |  | $7,285 |  |  |  | 76% |  |  | $(238) |  | (3)%
Distribution and other |  | 2,251 |  |  |  | 24 |  |  |  |  | 2,300 |  |  |  | 24 |  |  | (49) |  | (2)
Total Operating Expenses |  | $9,298 |  |  |  | 100% |  |  |  |  | $9,585 |  |  |  | 100% |  |  | $(287) |  | (3)%

-58-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Content Costs
Content costs include the amortization of costs of internally-produced television content, theatrical film content,
and interactive game development; amortization of acquired program rights; other television production costs,
including on-air talent; and participation and residuals expenses, which reflect amounts owed to talent and other
participants in our content pursuant to contractual and collective bargaining arrangements.
The decreases of 5% and 3% for the three- and six-month periods, respectively, primarily reflect reductions in
programming assets resulting from the pushdown of the Ultimate Parent’s basis and other cost reductions for
broadcast and cable programming, including lower costs for the NCAA Tournament, partially offset by the
inclusion of Skydance in the current-year periods and higher sports costs for Paramount+.
Distribution and Other
Distribution and other operating expenses primarily include costs relating to the distribution of our content,
including marketing and other costs to support our theatrical releases; revenue-sharing costs, including for third-
party distribution and to television stations affiliated with the CBS Television Network; compensation; and other
costs associated with our operations.
Distribution and other operating expenses decreased 2% for each of the three- and six-month periods ended
June 30, 2026, primarily reflecting lower costs for the distribution of theatrical releases, driven by costs for
Mission: Impossible - The Final Reckoning in 2025, partially offset by higher revenue sharing costs for our
streaming services, mainly for third-party distribution.
Selling, General and Administrative Expenses

| Successor |  |  | Predecessor |  |  |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Increase/(Decrease)
| 2026 |  |  |  | 2025 |  |  |  | $ |  | % |
Selling, general and administrative expenses |  | $1,443 |  |  |  |  | $1,401 |  |  |  | $42 |  | 3% |

| Successor |  |  | Predecessor |  |  |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Increase/(Decrease)
| 2026 |  |  |  | 2025 |  |  |  | $ |  | % |
Selling, general and administrative expenses |  | $2,854 |  |  |  |  | $2,944 |  |  |  | $(90) |  | (3)% |

Selling, general and administrative (“SG&A”) expenses include costs incurred for advertising and marketing for
our linear networks and streaming services, research, occupancy, professional service fees, and back office support,
including employee compensation (inclusive of stock-based compensation expense) and technology. SG&A
expenses increased 3% for the three-month period, primarily reflecting higher costs for technology and
professional services. SG&A expenses decreased 3%, for the six-month period, primarily reflecting lower
marketing costs and lower compensation costs resulting from our workforce restructuring activities, partially offset
by higher costs for technology and professional services.
-59-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Depreciation and Amortization

| Successor |  | Predecessor |  |  |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Increase/(Decrease) |
| 2026 |  |  | 2025 |  | $ |  | % |
Depreciation and amortization |  | $364 |  |  |  |  | $87 |  |  | $277 |  | 318% |

| Successor |  | Predecessor |  |  |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Increase/(Decrease) |
| 2026 |  |  | 2025 |  | $ |  | % |
Depreciation and amortization |  | $726 |  |  |  |  | $175 |  |  | $551 |  | 315% |

Depreciation and amortization expense reflects depreciation of fixed assets and amortization of finite-lived
intangible assets. The increase primarily reflects amortization of intangible assets established in connection with
the pushdown of the Ultimate Parent’s basis (See Note 2 to the consolidated financial statements).
Impairment Charges
During the second quarter of 2025, we performed interim impairment tests of FCC licenses in six markets, which
resulted in an impairment charge of $157 million to write down the carrying values of FCC licenses in these
markets to their then aggregate estimated fair value.
Restructuring and Transaction-Related Items
During the three and six months ended June 30, 2026 and 2025, we recorded the following restructuring charges
and transaction-related items.

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Severance (a) |  | $35 |  |  |  |  | $177 |  |  |  | $35 |  |  |  |  | $177 |
Exit costs |  | — |  |  |  |  | — |  |  |  | — |  |  |  |  | 65 |
Restructuring charges |  | 35 |  |  |  |  | 177 |  |  |  | 35 |  |  |  |  | 242 |
Transaction-related items |  | 153 |  |  |  |  | 4 |  |  |  | 256 |  |  |  |  | 24 |
Restructuring and transaction-related items |  | $188 |  |  |  |  | $181 |  |  |  | $291 |  |  |  |  | $266 |

(a) Severance costs include the accelerated vesting of stock-based compensation.
-60-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Restructuring Charges
During the second quarter of 2026, we recorded restructuring severance costs of $35 million associated with
changes in management and aligning the business around our strategic priorities following the Skydance
Transactions, including costs related to a plan under which severance payments are being provided to certain
eligible employees who voluntarily elected to participate.
Restructuring charges for the three and six months ended June 30, 2025 included severance costs of $177 million
associated with strategic changes in our global workforce in order to streamline our organization. In addition,
during the six months ended June 30, 2025, we recorded exit costs of $65 million, primarily for the impairment of
lease assets that we ceased use of in connection with initiatives to reduce our real estate footprint.
Transaction-Related Items
Transaction-related items include costs directly associated with prospective and completed mergers and
acquisitions, as well as related integration activities. During the three and six months ended June 30, 2026, we
recorded transaction-related costs of $153 million and $256 million, respectively, principally for legal, advisory,
and other professional fees associated with the planned WBD Merger and related integration. During the three and
six months ended June 30, 2025, we recorded legal, advisory, and other professional fees relating to the Skydance
Transactions of $4 million and $24 million, respectively.
Gain on Dispositions
During the first quarter of 2025, we recorded a gain on dispositions totaling $35 million, principally associated
with the disposition of a noncore business.
Interest Expense/Income

| Successor |  | Predecessor |  |  |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Increase/(Decrease) |
| 2026 |  |  | 2025 |  | $ |  | % |
Interest expense |  | $255 |  |  |  |  | $214 |  |  | $41 |  | 19% |
Interest income |  | $29 |  |  |  |  | $32 |  |  | $(3) |  | (9)% |

| Successor |  | Predecessor |  |  |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Increase/(Decrease) |
| 2026 |  |  | 2025 |  | $ |  | % |
Interest expense |  | $493 |  |  |  |  | $431 |  |  | $62 |  | 14% |
Interest income |  | $67 |  |  |  |  | $70 |  |  | $(3) |  | (4)% |

In connection with the pushdown of the Ultimate Parent’s basis, our debt was recorded at fair value, which resulted
in a decrease to our total debt balance of $898 million. The adjustments to fair value for each of our senior and
junior debt issuances are being amortized over the remaining term of the applicable issuance within interest
expense. The weighted average interest rate on our senior and junior debt was 5.20% at June 30, 2026 (Successor)
and 5.17% at June 30, 2025 (Predecessor). In addition, during the three and six months ended June 30, 2026 we
incurred $30 million and $41 million, respectively, of interest expense associated with borrowings under our Credit
Facility (see Capital Structure). Credit facility borrowings outstanding at the closing of the WBD Merger are
-61-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
expected to be repaid with the funding from the private placement described in Note 1 to the consolidated financial
statements.
Other Items, Net
The following table presents the components of “Other items, net.”

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2026 |  |  | 2025
Pension and postretirement benefit costs |  | $17 |  |  |  |  | $34 |  |  |  | $35 |  |  |  |  | $68 |
Foreign exchange loss |  | 2 |  |  |  |  | 5 |  |  |  | 6 |  |  |  |  | 8 |
Loss on non-designated interest rate hedges (a) |  | 12 |  |  |  |  | — |  |  |  | 12 |  |  |  |  | — |
Other |  | 3 |  |  |  |  | — |  |  |  | 5 |  |  |  |  | — |
Other items, net |  | $34 |  |  |  |  | $39 |  |  |  | $58 |  |  |  |  | $76 |

(a) See Note 8 to the consolidated financial statements.
Provision for Income Taxes
The provision for income taxes represents federal, state and local, and foreign taxes on earnings before income
taxes and equity in loss of investee companies. For the three and six months ended June 30, 2026 (Successor),
we recorded a provision for income taxes of $120 million and $275 million, reflecting an effective income tax
rate of 55.8% and 45.3%, respectively. I ncluded in the provision for income taxes are the following items
identified as affecting the comparability of our results, which in aggregate increased our effective income tax rate
by 20.1 percentage points and 10.9 percentage points for their respective periods. The higher tax rate in each
period compared with the same periods of 2025 also reflects an increase in foreign earnings subject to current
U.S. tax, along with a reduced benefit from the foreign-derived intangible income deduction.

| Impact from Items Affecting Comparability
| Successor
| Three Months Ended June 30, 2026 |  |  | Six Months Ended June 30, 2026
| Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes |  |  | Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes
Restructuring charges (Note 4) |  | $(35) |  |  |  | $5 |  |  |  |  | $(35) |  |  |  | $5 |
Transaction-related items (Note 4) |  | $(153) |  |  |  | $15 |  |  |  |  | $(256) |  |  |  | $21 |
Net discrete tax benefit |  | n/a |  |  |  | $4 |  |  |  |  | n/a |  |  |  | $8 |

n/a - not applicable
-62-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
For the three and six months ended June 30, 2025 (Predecessor), we recorded a provision for income taxes of
$50 million and $150 million, reflecting an effective income tax rate of 28.1% and 29.3%, respectively.
Included in the provision for income taxes are the following items identified as affecting the comparability of
our results, which in aggregate increased our effective income tax rate by 2.9 percentage points and 3.0
percentage points for their respective periods.

| Impact from Items Affecting Comparability
| Predecessor
| Three Months Ended June 30, 2025 |  | Six Months Ended June 30, 2025
| Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes |  | Earnings (Loss) Before Income Taxes |  | Benefit from (Provision for) Income Taxes
Impairment charges (Note 15) |  | $(157) |  |  |  | $39 |  |  |  | $(157) |  |  |  | $39 |
Restructuring charges (Note 4) |  | $(177) |  |  |  | $42 |  |  |  | $(242) |  |  |  | $58 |
Transaction-related items (Note 4) |  | $(4) |  |  |  | $1 |  |  |  | $(24) |  |  |  | $1 |
Gain from dispositions |  | $— |  |  |  | $— |  |  |  | $35 |  |  |  | $(2) |
Net discrete tax provision |  | n/a |  |  |  | $(2) |  |  |  | n/a |  |  |  | $(9) |

n/a - not applicable
Equity in Loss of Investee Companies, Net of Tax
The following tables present equity in loss of investee companies for our equity-method investments.

| Successor |  | Predecessor |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Increase/(Decrease)
| 2026 |  |  | 2025 |  | $ |  | % |
Equity in loss of investee companies |  | $(52) |  |  |  |  | $(64) |  |  | $(12) |  | (19)% |
Tax provision |  | (2) |  |  |  |  | (3) |  |  | (1) |  | (33) |
Equity in loss of investee companies, net of tax |  | $(54) |  |  |  |  | $(67) |  |  | $(13) |  | (19)% |

| Successor |  | Predecessor |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Increase/(Decrease)
| 2026 |  |  | 2025 |  | $ |  | % |
Equity in loss of investee companies |  | $(114) |  |  |  |  | $(138) |  |  | $(24) |  | (17)% |
Tax provision |  | (2) |  |  |  |  | (2) |  |  | — |  | — |
Equity in loss of investee companies, net of tax |  | $(116) |  |  |  |  | $(140) |  |  | $(24) |  | (17)% |

-63-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Net Earnings Attributable to Parent and Diluted EPS

| Successor |  | Predecessor |  |  |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Increase/(Decrease)
| 2026 |  |  | 2025 |  | $ |  | % |
Net earnings attributable to Parent |  | $41 |  |  |  |  | $57 |  |  | $(16) |  | (28)% |
Diluted EPS |  | $.04 |  |  |  |  | $.08 |  |  | $(.04) |  | (50)% |

| Successor |  | Predecessor |  |  |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Increase/(Decrease)
| 2026 |  |  | 2025 |  | $ |  | % |
Net earnings attributable to Parent |  | $209 |  |  |  |  | $209 |  |  | $— |  | —% |
Diluted EPS |  | $.19 |  |  |  |  | $.31 |  |  | $(.12) |  | (39)% |

For the three months ended June 30, 2026 (Successor), we reported net earnings attributable to Parent of $41
million, or $.04 per diluted share, compared with net earnings attributable to Parent of $57 million, or $.08 per
diluted share, for the three months ended June 30, 2025 (Predecessor). For the six months ended June 30, 2026
(Successor), we reported net earnings attributable to Parent of $209 million, or $.19 per diluted share, compared
with net earnings attributable to Parent of $209 million, or $.31 per diluted share, for the six months ended June 30,
2025 (Predecessor). For both the three- and six-month periods, the decrease in diluted EPS reflects shares issued in
connection with the Skydance Transactions and the NAI Transaction (see Note 10 to the consolidated financial
statements).
-64-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Segment Results of Operations
Beginning in 2026, we transitioned our reporting structure into three new segments: Studios, Direct-to-Consumer,
and TV Media. Under the new segment structure, our Studios segment reflects the combination of the historical
Filmed Entertainment segment with the historical TV Media studio operations, consolidating our content creation
activities. Additionally, our premium cable channel, Paramount+ with Showtime, which was previously under the
TV Media segment, is now managed under the Direct-to-Consumer segment. Concurrent with the change to our
segments, we updated our segment expense allocations to better reflect how we operate and make cost decisions
across the business (together with the segment change, the “new segment presentation”). Certain centralized costs
that were previously allocated at the segment level are now reported within corporate expenses.
The tables below set forth our financial information by reportable segment. As a result of the new accounting basis
established in connection with the Skydance Transactions and NAI Transaction on August 7, 2025, which makes
our results of operations not comparable between the Successor and Predecessor periods, we are required to present
segment information for periods prior to August 7, 2025 based on our previous segments, Filmed Entertainment,
Direct-to-Consumer, and TV Media. In addition, in order to provide useful information for investors that is
consistent with the manner in which our management reviews our results, on the following pages we have provided
supplemental non-GAAP presentations reflecting the Predecessor amounts for the three and six months ended June
30, 2025 recast under the new segment presentation, as well as the related reconciliations from the GAAP
presentation.

| GAAP |  | Non-GAAP (a)
| Successor |  |  | Predecessor |  | Predecessor
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Three Months Ended June 30,
| 2026 |  |  | 2025 |  | 2025
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
| Studios |  |  | Filmed Entertainment |  | Studios
Theatrical |  | $138 |  |  |  |  | $254 |  |  |  | $254 |
Licensing and other |  | 1,172 |  |  |  |  | 434 |  |  |  | 877 |
Advertising |  | 4 |  |  |  |  | 2 |  |  |  | 4 |
Total |  | 1,314 |  |  |  |  | 690 |  |  |  | 1,135 |
| Direct-to-Consumer |  |  | Direct-to-Consumer (b) |  | Direct-to-Consumer
Advertising |  | 535 |  |  |  |  | 494 |  |  |  | 494 |
Affiliate and subscription |  | 1,939 |  |  |  |  | 1,665 |  |  |  | 1,769 |
Licensing |  | — |  |  |  |  | 1 |  |  |  | 1 |
Total |  | 2,474 |  |  |  |  | 2,160 |  |  |  | 2,264 |
| TV Media |  |  | TV Media (b) |  | TV Media
Advertising |  | 1,420 |  |  |  |  | 1,657 |  |  |  | 1,655 |
Affiliate and subscription |  | 1,581 |  |  |  |  | 1,780 |  |  |  | 1,676 |
Licensing and other |  | 127 |  |  |  |  | 574 |  |  |  | 123 |
Total |  | 3,128 |  |  |  |  | 4,011 |  |  |  | 3,454 |
| Eliminations |  |  | Eliminations |  | Eliminations
|  | (3) |  |  |  |  | (12) |  |  |  | (4) |
Total Revenues |  | $6,913 |  |  |  |  | $6,849 |  |  |  | $6,849 |

-65-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

GAAP |  | Non-GAAP (a)
| Successor |  |  |  | Predecessor |  |  | Predecessor
| Three Months Ended June 30, |  |  |  | Three Months Ended June 30, |  |  | Three Months Ended June 30,
| 2026 |  |  |  | 2025 |  |  | 2025
Adjusted EBITDA: |  |  |  |  |  | Adjusted OIBDA(c): |  |  |  |  | Adjusted EBITDA: |  |  |
Studios |  | $36 |  |  |  | Filmed Entertainment |  | $(84) |  |  | Studios |  | $(31) |
Direct-to-Consumer |  | 366 |  |  |  | Direct-to-Consumer (b) |  | 157 |  |  | Direct-to-Consumer |  | 254 |
TV Media |  | 1,063 |  |  |  | TV Media (b) |  | 863 |  |  | TV Media |  | 912 |
Corporate/ Eliminations (d) |  | (366) |  |  |  | Corporate/ Eliminations (d) |  | (73) |  |  | Corporate/ Eliminations (d) |  | (272) |
Stock-based compensation (e) |  | (72) |  |  |  | Stock-based compensation (e) |  | (39) |  |  | Stock-based compensation (e) |  | (39) |
Depreciation and amortization |  | (364) |  |  |  | Depreciation and amortization |  | (87) |  |  | Depreciation and amortization |  | (87) |
Impairment charges |  | — |  |  |  | Impairment charges |  | (157) |  |  | Impairment charges |  | (157) |
Restructuring and transaction-related items (e) |  | (188) |  |  |  | Restructuring and transaction-related items (e) |  | (181) |  |  | Restructuring and transaction-related items (e) |  | (181) |
Operating income |  | 475 |  |  |  | Operating income |  | 399 |  |  | Operating income |  | 399 |
Interest expense, net |  | (226) |  |  |  | Interest expense, net |  | (182) |  |  | Interest expense, net |  | (182) |
Other items, net |  | (34) |  |  |  | Other items, net |  | (39) |  |  | Other items, net |  | (39) |
Earnings before income taxes and equity in loss of investee companies |  | 215 |  |  |  | Earnings before income taxes and equity in loss of investee companies |  | 178 |  |  | Earnings before income taxes and equity in loss of investee companies |  | 178 |
Provision for income taxes |  | (120) |  |  |  | Provision for income taxes |  | (50) |  |  | Provision for income taxes |  | (50) |
Equity in loss of investee companies, net of tax |  | (54) |  |  |  | Equity in loss of investee companies, net of tax |  | (67) |  |  | Equity in loss of investee companies, net of tax |  | (67) |
Net earnings (Parent and noncontrolling interests) |  | 41 |  |  |  | Net earnings (Parent and noncontrolling interests) |  | 61 |  |  | Net earnings (Parent and noncontrolling interests) |  | 61 |
Net earnings attributable to noncontrolling interests |  | — |  |  |  | Net earnings attributable to noncontrolling interests |  | (4) |  |  | Net earnings attributable to noncontrolling interests |  | (4) |
Net earnings attributable to Parent |  | $41 |  |  |  | Net earnings attributable to Parent |  | $57 |  |  | Net earnings attributable to Parent |  | $57 |

(a) As discussed above, Adjusted EBITDA by segment recast under our new segment presentation is non-GAAP. See Studios, Direct-
to-Consumer, and TV Media on the following pages for reconciliations from the GAAP segment presentation for the three months
ended June 30, 2025 to the non-GAAP recast amounts. All other amounts in this table are presented on a GAAP basis.
(b) Reflects the historical segment composition for Direct-to-Consumer and TV Media.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 13 to the consolidated financial statements for further discussion.
(d) As noted above, concurrent with the change to our segments, we updated our segment expense allocations to better reflect how we
operate and make cost decisions across the business, which resulted in higher costs at Corporate. The increase compared with the
non-GAAP Predecessor presentation was driven by higher technology costs and consulting fees.
-66-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
(e) The increase in stock-based compensation expense between the 2026 and 2025 periods was driven by grants following the Skydance
Transactions and the comparison to lower expenses in 2025 as a result of accelerated vesting in December 2024 of certain
employees’ RSUs and PSUs to help mitigate potential tax impacts that would otherwise arise under Sections 280G and 4999 of the
Internal Revenue Code. Stock-based compensation expense of $9 million for three months ended June 30, 2026 (Successor) and $4
million for the three months ended June 30, 2025 (Predecessor) is included in “Restructuring and transaction-related items.”

| GAAP |  | Non-GAAP (a)
| Successor |  |  | Predecessor |  | Predecessor
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  | 2025
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
| Studios |  |  | Filmed Entertainment |  | Studios
Theatrical |  | $290 |  |  |  |  | $402 |  |  |  | $402 |
Licensing and other |  | 2,299 |  |  |  |  | 910 |  |  |  | 1,883 |
Advertising |  | 8 |  |  |  |  | 5 |  |  |  | 9 |
Total |  | 2,597 |  |  |  |  | 1,317 |  |  |  | 2,294 |
| Direct-to-Consumer |  |  | Direct-to-Consumer (b) |  | Direct-to-Consumer
Advertising |  | 1,052 |  |  |  |  | 967 |  |  |  | 967 |
Affiliate and subscription |  | 3,820 |  |  |  |  | 3,236 |  |  |  | 3,447 |
Licensing |  | — |  |  |  |  | 1 |  |  |  | 1 |
Total |  | 4,872 |  |  |  |  | 4,204 |  |  |  | 4,415 |
| TV Media |  |  | TV Media (b) |  | TV Media
Advertising |  | 3,341 |  |  |  |  | 3,695 |  |  |  | 3,691 |
Affiliate and subscription |  | 3,201 |  |  |  |  | 3,606 |  |  |  | 3,395 |
Licensing and other |  | 252 |  |  |  |  | 1,248 |  |  |  | 252 |
Total |  | 6,794 |  |  |  |  | 8,549 |  |  |  | 7,338 |
| Eliminations |  |  | Eliminations |  | Eliminations
|  | (3) |  |  |  |  | (29) |  |  |  | (6) |
Total Revenues |  | $14,260 |  |  |  |  | $14,041 |  |  |  | $14,041 |

-67-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

GAAP |  | Non-GAAP (a)
| Successor |  |  |  | Predecessor |  |  | Predecessor
| Six Months Ended June 30, |  |  |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  |  | 2025 |  |  | 2025
Adjusted EBITDA: |  |  |  |  |  | Adjusted OIBDA(c): |  |  |  |  | Adjusted EBITDA: |  |  |
Studios |  | $200 |  |  |  | Filmed Entertainment |  | $(64) |  |  | Studios |  | $51 |
Direct-to-Consumer |  | 617 |  |  |  | Direct-to-Consumer (b) |  | 48 |  |  | Direct-to-Consumer |  | 250 |
TV Media |  | 2,118 |  |  |  | TV Media (b) |  | 1,785 |  |  | TV Media |  | 1,863 |
Corporate/ Eliminations (d) |  | (675) |  |  |  | Corporate/ Eliminations (d) |  | (174) |  |  | Corporate/ Eliminations (d) |  | (569) |
Stock-based compensation (e) |  | (152) |  |  |  | Stock-based compensation (e) |  | (83) |  |  | Stock-based compensation (e) |  | (83) |
Depreciation and amortization |  | (726) |  |  |  | Depreciation and amortization |  | (175) |  |  | Depreciation and amortization |  | (175) |
Impairment charges |  | — |  |  |  | Impairment charges |  | (157) |  |  | Impairment charges |  | (157) |
Restructuring and transaction-related items (e) |  | (291) |  |  |  | Restructuring and transaction-related items (e) |  | (266) |  |  | Restructuring and transaction-related items (e) |  | (266) |
Gain on dispositions |  | — |  |  |  | Gain on dispositions |  | 35 |  |  | Gain on dispositions |  | 35 |
Operating income |  | 1,091 |  |  |  | Operating income |  | 949 |  |  | Operating income |  | 949 |
Interest expense, net |  | (426) |  |  |  | Interest expense, net |  | (361) |  |  | Interest expense, net |  | (361) |
Other items, net |  | (58) |  |  |  | Other items, net |  | (76) |  |  | Other items, net |  | (76) |
Earnings before income taxes and equity in loss of investee companies |  | 607 |  |  |  | Earnings before income taxes and equity in loss of investee companies |  | 512 |  |  | Earnings before income taxes and equity in loss of investee companies |  | 512 |
Provision for income taxes |  | (275) |  |  |  | Provision for income taxes |  | (150) |  |  | Provision for income taxes |  | (150) |
Equity in loss of investee companies, net of tax |  | (116) |  |  |  | Equity in loss of investee companies, net of tax |  | (140) |  |  | Equity in loss of investee companies, net of tax |  | (140) |
Net earnings (Parent and noncontrolling interests) |  | 216 |  |  |  | Net earnings (Parent and noncontrolling interests) |  | 222 |  |  | Net earnings (Parent and noncontrolling interests) |  | 222 |
Net earnings attributable to noncontrolling interests |  | (7) |  |  |  | Net earnings attributable to noncontrolling interests |  | (13) |  |  | Net earnings attributable to noncontrolling interests |  | (13) |
Net earnings attributable to Parent |  | $209 |  |  |  | Net earnings attributable to Parent |  | $209 |  |  | Net earnings attributable to Parent |  | $209 |

(a) As discussed above, Adjusted EBITDA by segment recast under our new segment presentation is non-GAAP. See Studios, Direct-
to-Consumer, and TV Media on the following pages for reconciliations from the GAAP segment presentation for the six months
ended June 30, 2025 to the non-GAAP recast amounts. All other amounts in this table are presented on a GAAP basis.
(b) Reflects the historical segment composition for Direct-to-Consumer and TV Media.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 13 to the consolidated financial statements for further discussion.
(d) As noted above, concurrent with the change to our segments, we updated our segment expense allocations to better reflect how we
operate and make cost decisions across the business, which resulted in higher costs at Corporate. The increase compared with the
non-GAAP Predecessor presentation was driven by higher technology costs and consulting fees.
-68-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
(e) The increase in stock-based compensation expense between the 2026 and 2025 periods was driven by grants following the Skydance
Transactions and the comparison to lower expenses in 2025 as a result of accelerated vesting in December 2024 of certain
employees’ RSUs and PSUs to help mitigate potential tax impacts that would otherwise arise under Sections 280G and 4999 of the
Internal Revenue Code. Stock-based compensation expense of $9 million for the six months ended June 30, 2026 (Successor) and
$4 million for the six months ended June 30, 2025 (Predecessor) is included in “Restructuring and transaction-related items.”
Studios/Filmed Entertainment
Our Studios segment consists of our television and film studio operations, including CBS Studios, Paramount
Television Studios, Nickelodeon Animation, Paramount Pictures, Paramount Animation, and Miramax, as well
as Skydance Animation, Film, a nd Television, Paramount Sports Entertainment and Paramount Games Studio.
For the Predecessor period, our Filmed Entertainment segment was most comparable to our new Studios
segment and excluded studio operations related to our TV Media businesses, including CBS Studios and
Paramount Television Studios.
Three Months Ended June 30, 2026 and 2025

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  |  |  |  |  | Three Months Ended June 30, |  | Increase/(Decrease) (e)
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | %
| Studios |  |  | Filmed Entertainment |  | Adjustments (d) |  | Studios |  |  |  |
Theatrical |  | $138 |  |  |  |  | $254 |  |  |  | $— |  |  |  | $254 |  |  | $(116) |  | (46)%
Licensing and other |  | 1,172 |  |  |  |  | 434 |  |  |  | 443 |  |  |  | 877 |  |  | 295 |  | 34
Advertising (a) |  | 4 |  |  |  |  | 2 |  |  |  | 2 |  |  |  | 4 |  |  | — |  | —
Revenues |  | 1,314 |  |  |  |  | 690 |  |  |  | 445 |  |  |  | 1,135 |  |  | 179 |  | 16
Content costs |  | 926 |  |  |  |  | 394 |  |  |  | 343 |  |  |  | 737 |  |  | 189 |  | 26
Advertising and marketing |  | 143 |  |  |  |  | 195 |  |  |  | 5 |  |  |  | 200 |  |  | (57) |  | (29)
Other (b) |  | 209 |  |  |  |  | 185 |  |  |  | 44 |  |  |  | 229 |  |  | (20) |  | (9)
Expenses |  | 1,278 |  |  |  |  | 774 |  |  |  | 392 |  |  |  | 1,166 |  |  | 112 |  | 10
Adjusted EBITDA/ Adjusted OIBDA (c) |  | $36 |  |  |  |  | $(84) |  |  |  | $53 |  |  |  | $(31) |  |  | $67 |  | n/m

n/m - not meaningful
(a) Primarily reflects advertising revenues earned from the use of Studios content on third-party digital platforms.
(b) Other segment expenses for our Studios segment include employee compensation; costs relating to the distribution of our content;
costs for occupancy, technology, and professional services; and other costs associated with our operations.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA
to Adjusted EBITDA. See Note 13 to the consolidated financial statements.
(d) Reflects the inclusion of the historical TV Media studio operations and updates to our segment expense allocations to better reflect
how we operate and make cost decisions across the business.
(e) Reflects the comparison between the Successor results for the three months ended June 30, 2026 to the non-GAAP Predecessor
results for the three months ended June 30, 2025.
-69-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Revenues
Theatrical
Theatrical revenues for the second quarter of 2026 included revenues from the release of Scary Movie (2026). The
second quarter of 2025 benefited from the release of Mission: Impossible - The Final Reckoning.
Licensing and Other
Licensing and other revenues include Skydance revenues in 2026. The comparison to the non-GAAP Predecessor
presentation also reflects increases in revenues from secondary market licensing and content produced for third
parties.
Expenses
Content Costs
Content costs in 2026 include costs for Skydance and certain of our television studio operations, which were not in
the Predecessor segment results.
Advertising and Marketing
Advertising and marketing expenses in each quarter reflect the mix of films in theaters, including the comparison
against marketing costs for Mission: Impossible - The Final Reckoning in the second quarter of 2025.
Other
Other expenses in the second quarter of 2026 include costs for Skydance and certain of our television studio
operations, which were not in the Predecessor segment results. The 9% decrease compared with the non-GAAP
Predecessor presentation was driven by lower costs associated with the distribution of films in theaters, including
the comparison against distribution costs for Mission: Impossible - The Final Reckoning in the second quarter of
2025.
Adjusted EBITDA
Adjusted EBITDA in the second quarter of 2026 benefited from the comparison against the higher marketing and
other distribution costs for Mission: Impossible - The Final Reckoning in the second quarter of 2025.
-70-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Studios/Filmed Entertainment
Six Months Ended June 30, 2026 and 2025

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  |  |  |  |  | Six Months Ended June 30, |  | Increase/(Decrease) (e)
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | %
| Studios |  |  | Filmed Entertainment |  | Adjustments (d) |  | Studios |  |  |  |
Theatrical |  | $290 |  |  |  |  | $402 |  |  |  | $— |  |  |  | $402 |  |  | $(112) |  | (28)%
Licensing and other |  | 2,299 |  |  |  |  | 910 |  |  |  | 973 |  |  |  | 1,883 |  |  | 416 |  | 22
Advertising (a) |  | 8 |  |  |  |  | 5 |  |  |  | 4 |  |  |  | 9 |  |  | (1) |  | (11)
Revenues |  | 2,597 |  |  |  |  | 1,317 |  |  |  | 977 |  |  |  | 2,294 |  |  | 303 |  | 13
Content costs |  | 1,742 |  |  |  |  | 715 |  |  |  | 760 |  |  |  | 1,475 |  |  | 267 |  | 18
Advertising and marketing |  | 243 |  |  |  |  | 311 |  |  |  | 6 |  |  |  | 317 |  |  | (74) |  | (23)
Other (b) |  | 412 |  |  |  |  | 355 |  |  |  | 96 |  |  |  | 451 |  |  | (39) |  | (9)
Expenses |  | 2,397 |  |  |  |  | 1,381 |  |  |  | 862 |  |  |  | 2,243 |  |  | 154 |  | 7
Adjusted EBITDA/ Adjusted OIBDA (c) |  | $200 |  |  |  |  | $(64) |  |  |  | $115 |  |  |  | $51 |  |  | $149 |  | 292%

(a) Primarily reflects advertising revenues earned from the use of Studios content on third-party digital platforms.
(b) Other segment expenses for our Studios segment include employee compensation; costs relating to the distribution of our content;
costs for occupancy, technology, and professional services; and other costs associated with our operations.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA
to Adjusted EBITDA. See Note 13 to the consolidated financial statements.
(d) Reflects the inclusion of the historical TV Media studio operations and updates to our segment expense allocations to better reflect
how we operate and make cost decisions across the business.
(e) Reflects the comparison between the Successor results for the six months ended June 30, 2026 to the non-GAAP Predecessor results
for the six months ended June 30, 2025.
Revenues
Theatrical
Theatrical revenues for the six months ended June 30, 2026 included revenues from the second quarter 2026
release of Scary Movie (2026), the first quarter 2026 release of Scream 7, and the fourth quarter 2025 release of
The SpongeBob Movie: Search for SquarePants. The comparable prior-year period benefited from the second
quarter 2025 release of Mission: Impossible - The Final Reckoning as well as the fourth quarter 2024 release of
Sonic the Hedgehog 3.
Licensing and Other
Licensing and other revenues include Skydance revenues in 2026.
-71-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Expenses
Content Costs
Content costs in 2026 include costs for Skydance and certain of our television studio operations, which were not in
the Predecessor segment results.
Advertising and Marketing
Advertising and marketing expenses in each period reflect the mix of films in theaters, including the comparison
against marketing costs for Mission: Impossible - The Final Reckoning in 2025.
Other
Other expenses for the six months ended June 30, 2026 include costs for Skydance and certain of our television
studio operations, which were not in the Predecessor segment results. The 9% decrease compared with the non-
GAAP Predecessor presentation was driven by lower costs associated with the distribution of films in theaters.
Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2026 benefited from the mix of titles licensed and the
comparison against the higher marketing and other distribution costs for Mission: Impossible - The Final
Reckoning in 2025.
-72-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Direct-to-Consumer
Our Direct-to-Consumer segment consists of our portfolio of domestic and international pay and free streaming
services, including Paramount+ and Pluto TV, as well as our domestic premium cable network, Paramount+
with Showtime. For the Predecessor period, the Direct-to Consumer segment excluded Paramount+ with
Showtime. During the second quarter of 2026, we integrated BET+ into Paramount+.
Three Months Ended June 30, 2026 and 2025

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  |  |  |  |  | Three Months Ended June 30, |  | Increase /(Decrease) (e)
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | %
| Direct-to- Consumer |  |  | Direct-to- Consumer |  | Adjustments (d) |  | Direct-to- Consumer |  |  |  |
Advertising |  | $535 |  |  |  |  | $494 |  |  |  | $— |  |  |  | $494 |  |  | $41 |  | 8%
Affiliate and subscription |  | 1,939 |  |  |  |  | 1,665 |  |  |  | 104 |  |  |  | 1,769 |  |  | 170 |  | 10
Licensing (a) |  | — |  |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  | (1) |  | n/m
Revenues |  | 2,474 |  |  |  |  | 2,160 |  |  |  | 104 |  |  |  | 2,264 |  |  | 210 |  | 9
Content costs |  | 1,161 |  |  |  |  | 1,085 |  |  |  | 29 |  |  |  | 1,114 |  |  | 47 |  | 4
Advertising and marketing |  | 316 |  |  |  |  | 294 |  |  |  | 11 |  |  |  | 305 |  |  | 11 |  | 4
Other (b) |  | 631 |  |  |  |  | 624 |  |  |  | (33) |  |  |  | 591 |  |  | 40 |  | 7
Expenses |  | 2,108 |  |  |  |  | 2,003 |  |  |  | 7 |  |  |  | 2,010 |  |  | 98 |  | 5
Adjusted EBITDA/ Adjusted OIBDA (c) |  | $366 |  |  |  |  | $157 |  |  |  | $97 |  |  |  | $254 |  |  | $112 |  | 44%

n/m - not meaningful
(a) Primarily reflects revenues from the licensing of content rights acquired by BET+.
(b) Other segment expenses for our Direct-to-Consumer segment include employee compensation; revenue-sharing costs, including for
third-party distribution; costs for occupancy, technology, and professional services; and other costs associated with our operations.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA
to Adjusted EBITDA. See Note 13 to the consolidated financial statements.
(d) Reflects the inclusion of our premium cable channel, Paramount+ with Showtime, which was included in the TV Media segment in
2025, and updates to our segment expense allocations to better reflect how we operate and make cost decisions across the business.
(e) Reflects the comparison between the Successor results for the three months ended June 30, 2026 to the non-GAAP Predecessor
results for the three months ended June 30, 2025.
-73-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

| Successor |  | Predecessor |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Increase /(Decrease)
Paramount+ (Global) | 2026 |  |  | 2025 |  | $ |  | %
Revenues |  | $2,061 |  |  |  |  | $1,771 |  |  | $290 |  | 16%
Subscribers (in millions) (a) |  | 81.6 |  |  |  |  | 76.8 |  |  | 4.8 |  | 6%
ARPU (in dollars) (b) |  | $8.52 |  |  |  |  | $7.64 |  |  | $.88 |  | 12%

(a) Subscribers include customers who are registered for Paramount+, either directly through our owned and
operated apps and websites, or through third-party distributors. Subscribers also include customers who are
provided with access through a subscription bundle with a domestic linear video streaming service (vMVPD)
or an international third-party distributor. Our subscriber count includes only paid subscriptions and reflects
the number of subscribers as of the applicable period-end date.
(b) We calculate average revenue per subscriber (“ARPU”) as total Paramount+ revenues during the applicable
period divided by the average of Paramount+ subscribers at the beginning and end of the period, further
divided by the number of months in the period.
Revenues
Advertising
The increase in advertising revenues was driven by growth in impressions fo r Paramount+. Advertising revenues in
2026 benefited from the streaming of UFC events on Paramount+ under our new rights agreement that began in
January 2026.
Affiliate and Subscription
Affiliate and subscription revenues for the second quarter of 2026 benefited from pricing increases and growth in
Paramount+ subscribers. Compared with June 30, 2025, Paramount+ subscribers increased 4.8 million, or 6%,
driven by growth in domestic subscribers, partially offset by a decline in international subscribers, primarily due to
the nonrenewal of international distribution agreements. Compared with the second quarter of 2025, ARPU grew
12% to $8.52. The 10% increase in affiliate and subscription revenue compared with the non-GAAP Predecessor
presentation reflects growth for Paramount+, partially offset by a negative impact of 3% from combined revenue
declines for BET+ and Paramount+ with Showtime. As discussed above, BET+ was integrated into Paramount+
during the second quarter of 2026. The Paramount+ with Showtime decrease reflects declines in linear subscribers.
During the second quarter of 2026, Paramount+ s ubscribers increased 2.0 million, or 3%, compared with 79.6
million at March 31, 2026. The subscriber growth benefited from the UFC on Paramount+ and the premiere of
Dutton Ranch, but was partially offset by a decrease of 1.8 million subscribers from the nonrenewal of
international distribution agreements in Japan.
-74-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Expenses
Content Costs
Content costs during the second quarter of 2026 include higher costs associated with sporting events on
Paramount+, mainly for the UFC, as well as the impact from the net reduction in programming assets resulting
from the pushdown of the Ultimate Parent’s basis.
Advertising and Marketing
Advertising and marketing expenses for the second quarter of 2026 include marketing costs for UFC events on
Paramount+, which led to the 4% increase compared with the non-GAAP Predecessor presentation.
Other
Other expenses for the second quarter of 2026 reflect higher revenue sharing costs, mainly for third-party
distribution.
Adjusted EBITDA
Adjusted EBITDA in the second quarter of 2026 benefited from the revenue growth and the impact on content
costs from the net reduction in programming assets resulting from the pushdown of the Ultimate Parent’s basis,
partially offset by higher costs associated with sporting events on Paramount+.
-75-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Direct-to-Consumer
Six Months Ended June 30, 2026 and 2025

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  |  |  |  |  | Six Months Ended June 30, |  | Increase /(Decrease) (e)
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | %
| Direct-to- Consumer |  |  | Direct-to- Consumer |  | Adjustments (d) |  | Direct-to- Consumer |  |  |  |
Advertising |  | $1,052 |  |  |  |  | $967 |  |  |  | $— |  |  |  | $967 |  |  | $85 |  | 9%
Affiliate and subscription |  | 3,820 |  |  |  |  | 3,236 |  |  |  | 211 |  |  |  | 3,447 |  |  | 373 |  | 11
Licensing (a) |  | — |  |  |  |  | 1 |  |  |  | — |  |  |  | 1 |  |  | (1) |  | n/m
Revenues |  | 4,872 |  |  |  |  | 4,204 |  |  |  | 211 |  |  |  | 4,415 |  |  | 457 |  | 10
Content costs |  | 2,407 |  |  |  |  | 2,300 |  |  |  | 44 |  |  |  | 2,344 |  |  | 63 |  | 3
Advertising and marketing |  | 631 |  |  |  |  | 635 |  |  |  | 29 |  |  |  | 664 |  |  | (33) |  | (5)
Other (b) |  | 1,217 |  |  |  |  | 1,221 |  |  |  | (64) |  |  |  | 1,157 |  |  | 60 |  | 5
Expenses |  | 4,255 |  |  |  |  | 4,156 |  |  |  | 9 |  |  |  | 4,165 |  |  | 90 |  | 2
Adjusted EBITDA/ Adjusted OIBDA (c) |  | $617 |  |  |  |  | $48 |  |  |  | $202 |  |  |  | $250 |  |  | $367 |  | 147%

n/m - not meaningful
(a) Primarily reflects revenues from the licensing of content rights acquired by BET+.
(b) Other segment expenses for our Direct-to-Consumer segment include employee compensation; revenue-sharing costs, including for
third-party distribution; costs for occupancy, technology, and professional services; and other costs associated with our operations.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA
to Adjusted EBITDA. See Note 13 to the consolidated financial statements.
(d) Reflects the inclusion of our premium cable channel, Paramount+ with Showtime, which was included in the TV Media segment in
2025, and updates to our segment expense allocations to better reflect how we operate and make cost decisions across the business.
(e) Reflects the comparison between the Successor results for the six months ended June 30, 2026 to the non-GAAP Predecessor
results for the six months ended June 30, 2025.

| Successor |  | Predecessor |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  | Increase /(Decrease)
Paramount+ (Global) | 2026 |  |  | 2025 |  | $ |  | %
Revenues |  | $4,035 |  |  |  |  | $3,457 |  |  | $578 |  | 17%

Revenues
Advertising
The increase in advertising revenues was driven by growth in impressions for Paramount+. Advertising revenues in
2026 benefited from the streaming of UFC events on Paramount+.
-76-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Affiliate and Subscription
Affiliate and subscription revenues for the six months ended June 30, 2026 benefited from pricing increases and
growth in Paramount+ subscribers. The 11% increase compared with the non-GAAP predecessor presentation
reflects growth for Paramount+, partially offset by a negative impact of 2% from combined revenue declines for
BET+ and Paramount+ with Showtime.
Expenses
Content Costs
Content costs during the first half of 2026 include higher costs associated with sporting events on Paramount+,
mainly for the UFC, as well as the impact from the net reduction in programming assets resulting from the
pushdown of the Ultimate Parent’s basis.
Advertising and Marketing
Advertising and marketing expenses for the six months ended June 30, 2026 include the impact from cost savings
initiatives, which led to the 5% decrease compared with the non-GAAP Predecessor presentation.
Other
Other expenses in 2026 reflect higher revenue sharing costs, mainly for third-party distribution.
Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2026 benefited from the revenue growth and the impact on
content costs from the net reduction in programming assets resulting from the pushdown of the Ultimate Parent’s
basis, partially offset by higher costs associated with sporting events on Paramount+.
-77-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
TV Media
Our TV Media segment consists of our (1) broadcast operations—the CBS Television Network, our domestic
broadcast television network; CBS Stations, our owned television stations; and our international free-to-air
networks, including Network 10 and Channel 5; (2) domestic basic cable networks, including MTV, Comedy
Central, Paramount Network, The Smithsonian Channel, Nickelodeon, BET Media Group, CBS Sports
Network, and international extensions of certain of these brands; and (3) CBS Media Ventures, which produces
and distributes first-run syndicated programming. TV Media also includes a number of digital properties such as
CBS News 24/7 for 24-hour news and CBS Sports HQ for sports news and analysis. For the Predecessor period,
the TV Media segment also included television studio operations and the premium cable network, Paramount+
with Showtime.
Three Months Ended June 30, 2026 and 2025

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |  |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  |  |  |  |  | Three Months Ended June 30, |  | Increase/(Decrease) (d) |
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | % |
| TV Media |  |  | TV Media |  | Adjustments (c) |  | TV Media |  |  |  |  |
Advertising |  | $1,420 |  |  |  |  | $1,657 |  |  |  | $(2) |  |  |  | $1,655 |  |  | $(235) |  | (14)% |
Affiliate and subscription |  | 1,581 |  |  |  |  | 1,780 |  |  |  | (104) |  |  |  | 1,676 |  |  | (95) |  | (6) |
Licensing and other |  | 127 |  |  |  |  | 574 |  |  |  | (451) |  |  |  | 123 |  |  | 4 |  | 3 |
Revenues |  | 3,128 |  |  |  |  | 4,011 |  |  |  | (557) |  |  |  | 3,454 |  |  | (326) |  | (9) |
Content costs |  | 1,185 |  |  |  |  | 1,956 |  |  |  | (380) |  |  |  | 1,576 |  |  | (391) |  | (25) |
Advertising and marketing |  | 66 |  |  |  |  | 116 |  |  |  | (16) |  |  |  | 100 |  |  | (34) |  | (34) |
Other (a) |  | 814 |  |  |  |  | 1,076 |  |  |  | (210) |  |  |  | 866 |  |  | (52) |  | (6) |
Expenses |  | 2,065 |  |  |  |  | 3,148 |  |  |  | (606) |  |  |  | 2,542 |  |  | (477) |  | (19) |
Adjusted EBITDA/ Adjusted OIBDA (b) |  | $1,063 |  |  |  |  | $863 |  |  |  | $49 |  |  |  | $912 |  |  | $151 |  | 17% |

-78-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |  |  |  |  |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  |  |  |  |  | Three Months Ended June 30, |  | Increase/(Decrease) (d) |
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | % |
Advertising revenues | TV Media |  |  | TV Media |  | Adjustments (c) |  | TV Media |  |  |  |  |
Domestic |  | $1,235 |  |  |  |  | $1,392 |  |  |  | $(2) |  |  |  | $1,390 |  |  | $(155) |  | (11)% |
International |  | 185 |  |  |  |  | 265 |  |  |  | — |  |  |  | 265 |  |  | (80) |  | (30) |
Total |  | $1,420 |  |  |  |  | $1,657 |  |  |  | $(2) |  |  |  | $1,655 |  |  | $(235) |  | (14)% |

(a) Other segment expenses for our TV Media segment include employee compensation; revenue-sharing costs to television stations
affiliated with the CBS Television Network; costs relating to the distribution of our content; costs for research, occupancy, technology,
and professional services; and other costs associated with our operations.
(b) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 13 to the consolidated financial statements.
(c) Reflects the transfer of the historical TV Media studio operations to the Studios segment and our premium cable channel, Paramount+
with Showtime, to the Direct-to-Consumer segment, and updates to our segment expense allocations to better reflect how we operate
and make cost decisions across the business.
(d) Reflects the comparison between the Successor results for the three months ended June 30, 2026 to the non-GAAP Predecessor results
for the three months ended June 30, 2025.
Revenues
Advertising
Advertising revenues in the second quarter of 2026 were primarily impacted by a decrease of 8% from the
comparison against CBS’s broadcast in the second quarter of 2025 of the National Semifinals and National
Championship games of the NCAA Tournament, which we have the rights to broadcast every other year, and
declines in the linear advertising market. The comparison also includes a decrease of 3% from t he absence of
advertising revenues from Telefe and Chilevisión, which were sold in October 2025 and January 2026,
respectively, and an increase of 2% from higher political advertising revenues.
Affiliate and Subscription
Affiliate and subscription revenues in the second quarter of 2026 were impacted by declines in linear subscribers.
Licensing and Other
Licensing and other revenues in 2026 primarily include revenues from the licensing of first-run syndicated
programming. 2026 does not include revenues from our television studios, which were included in the Predecessor
segment results.
Expenses
Content costs, advertising and marketing expenses, and other expenses in the second quarter of 2026 benefited
from cost savings initiatives. Additionally, content costs in the second quarter of 2026 were lower due to the
comparison against CBS’s broadcast in the second quarter of 2025 of the National Semifinals and National
Championship games of the NCAA Tournament, and also reflect the impact from the net reduction in
programming assets resulting from the pushdown of the Ultimate Parent’s basis.
-79-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Adjusted EBITDA
Adjusted EBITDA in the second quarter of 2026 reflects the impact of cost savings initiatives and the pushdown of
the Ultimate Parent’s basis.
TV Media
Six Months Ended June 30, 2026 and 2025

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |  |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  |  |  |  |  | Six Months Ended June 30, |  | Increase/(Decrease) (d) |
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | % |
| TV Media |  |  | TV Media |  | Adjustments (c) |  | TV Media |  |  |  |  |
Advertising |  | $3,341 |  |  |  |  | $3,695 |  |  |  | $(4) |  |  |  | $3,691 |  |  | $(350) |  | (9)% |
Affiliate and subscription |  | 3,201 |  |  |  |  | 3,606 |  |  |  | (211) |  |  |  | 3,395 |  |  | (194) |  | (6) |
Licensing and other |  | 252 |  |  |  |  | 1,248 |  |  |  | (996) |  |  |  | 252 |  |  | — |  | — |
Revenues |  | 6,794 |  |  |  |  | 8,549 |  |  |  | (1,211) |  |  |  | 7,338 |  |  | (544) |  | (7) |
Content costs |  | 2,904 |  |  |  |  | 4,299 |  |  |  | (827) |  |  |  | 3,472 |  |  | (568) |  | (16) |
Advertising and marketing |  | 146 |  |  |  |  | 269 |  |  |  | (36) |  |  |  | 233 |  |  | (87) |  | (37) |
Other (a) |  | 1,626 |  |  |  |  | 2,196 |  |  |  | (426) |  |  |  | 1,770 |  |  | (144) |  | (8) |
Expenses |  | 4,676 |  |  |  |  | 6,764 |  |  |  | (1,289) |  |  |  | 5,475 |  |  | (799) |  | (15) |
Adjusted EBITDA/ Adjusted OIBDA (b) |  | $2,118 |  |  |  |  | $1,785 |  |  |  | $78 |  |  |  | $1,863 |  |  | $255 |  | 14% |

| GAAP |  |  |  |  |  | Non-GAAP
| Successor |  |  | Predecessor |  |  |  |  |  | Predecessor |  |  |  |  |
| Six Months Ended June 30, |  |  | Six Months Ended June 30, |  |  |  |  |  | Six Months Ended June 30, |  | Increase/(Decrease) (d) |
| 2026 |  |  | 2025 |  |  |  |  |  | 2025 |  | $ |  | % |
Advertising revenues | TV Media |  |  | TV Media |  | Adjustments (c) |  | TV Media |  |  |  |  |
Domestic |  | $2,972 |  |  |  |  | $3,190 |  |  |  | $(4) |  |  |  | $3,186 |  |  | $(214) |  | (7)% |
International |  | 369 |  |  |  |  | 505 |  |  |  | — |  |  |  | 505 |  |  | (136) |  | (27) |
Total |  | $3,341 |  |  |  |  | $3,695 |  |  |  | $(4) |  |  |  | $3,691 |  |  | $(350) |  | (9)% |

(a) Other segment expenses for our TV Media segment include employee compensation; revenue-sharing costs to television stations
affiliated with the CBS Television Network; costs relating to the distribution of our content; costs for research, occupancy, technology,
and professional services; and other costs associated with our operations.
(b) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 13 to the consolidated financial statements.
(c) Reflects the transfer of the historical TV Media studio operations to the Studios segment and our premium cable channel, Paramount+
with Showtime, to the Direct-to-Consumer segment, and updates to our segment expense allocations to better reflect how we operate
and make cost decisions across the business.
(d) Reflects the comparison between the Successor results for the six months ended June 30, 2026 to the non-GAAP Predecessor results
for the six months ended June 30, 2025.
-80-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Revenues
Advertising
Advertising revenues for the six months ended June 30, 2026 were impacted by declines in the linear advertising
market and a decrease of 4% from the comparison against CBS’s broadcast in the second quarter of 2025 of the
NCAA Tournament, which we have the rights to broadcast every other year. The comparison also includes a
decrease of 2% from the absence of advertising revenues from Telefe and Chilevisión, which were sold in October
2025 and January 2026, respectively, and an increase of 2% from higher political advertising revenues.
Affiliate and Subscription
Affiliate and subscription revenues for the six months ended June 30, 2026 were impacted by declines in linear
subscribers.
Licensing and Other
Licensing and other revenues for the six months ended June 30, 2026 primarily include revenues from the licensing
of first-run syndicated programming. 2026 does not include revenues from our television studios, which were
included in the Predecessor segment results.
Expenses
Content costs, advertising and marketing expenses, and other expenses for the six months ended June 30, 2026
benefited from cost savings initiatives. Content costs for the six months ended June 30, 2026 also reflect the impact
from the net reduction in programming assets resulting from the pushdown of the Ultimate Parent’s basis.
Adjusted EBITDA
Adjusted EBITDA for the six months ended June 30, 2026 reflects the impact of cost savings initiatives and the
pushdown of the Ultimate Parent’s basis.
Liquidity and Capital Resources
Sources and Uses of Cash
We project anticipated cash requirements for our operating, investing and financing needs as well as cash flows
expected to be generated and available to meet these needs. Our operating needs include, among other items,
expenditures for content for our broadcast and cable networks and streaming services, including television and film
programming, sports rights, and talent contracts, as well as advertising and marketing costs to promote our content
and platforms; payments for leases, interest, and income taxes; and pension funding obligations.
Our investing and financing spending includes capital expenditures; acquisitions; funding of investments, including
our streaming joint venture, SkyShowtime, under which we and our joint venture partner committed to support
initial operations over a multiyear period; discretionary share repurchases; dividends; and principal payments on
our outstanding indebtedness. Our long-term debt obligations due over the next five years (including the
borrowings under our Credit Facility described below) were $6.05 billion as of June 30, 2026. We routinely assess
our capital structure and opportunistically enter into transactions to manage our outstanding debt maturities, which
could result in a charge from the early extinguishment of debt.
-81-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Funding for both our short-term and long-term operating, investing and financing needs will come primarily from
cash flows from operating activities, cash and cash equivalents, which were $1.63 billion as of June 30, 2026, and
our ability to refinance our debt. Any additional cash funding requirements are financed with short-term
borrowings, including commercial paper and borrowings under our credit facility, and long-term debt. To the
extent that commercial paper is not available to us, the borrowing capacity under our Credit Facility, which
increased from $3.5 billion to $5.0 billion in April 2026 (see Capital Structure) is sufficient to satisfy short-term
borrowing needs. In the first quarter of 2026, in connection with the $2.8 billion termination fee paid to Netflix,
we borrowed $2.15 billion under the Credit Facility. As of June 30, 2026, outstanding borrowings under the Credit
Facility totaled $1.8 billion at a weighted average interest rate of 6.13%. The remaining availability under the
Credit Facility at June 30, 2026, was $3.2 billion. At August 3, 2026, outstanding borrowings under the Credit
Facility totaled $1.75 billion at a weighted average interest rate of 6.13%. Credit facility borrowings outstanding at
the closing of the WBD Merger are expected to be repaid with the funding from the private placement described in
Note 1 to the consolidated financial statements.
Our access to capital markets and the cost of any new borrowings are impacted by factors outside our control,
including economic and market conditions, as well as by ratings assigned by independent rating agencies. As a
result, there can be no assurance that we will be able to access capital markets on terms and conditions favorable to
us.
Cash Flows
The changes in cash and cash equivalents were as follows:

| Successor |  | Predecessor |
| Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025
Net cash flow provided by operating activities |  | $504 |  |  |  |  | $339 |
Net cash flow used for investing activities |  | (3,115) |  |  |  |  | (184) |
Net cash flow provided by (used for) financing activities |  | 992 |  |  |  |  | (161) |
Effect of exchange rate changes on cash and cash equivalents |  | (28) |  |  |  |  | 84 |
Net (decrease) increase in cash and cash equivalents |  | $(1,647) |  |  |  |  | $78 |

Operating Activities
Net cash flow provided by operating activities includes payments of $310 million for the six months ended
June 30, 2026 (Successor) and $178 million for the six months ended June 30, 2025 (Predecessor) associated with
restructuring, transaction-related items and transformation initiatives. Our transformation initiatives are related to
advancing our technology and operations, including the unification and evolution of systems and platforms, and
migration to the cloud.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Investing Activities

| Successor |  | Predecessor |
| Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025
Investments |  | $(172) |  |  |  |  | $(148) |
Capital expenditures (a) |  | (150) |  |  |  |  | (102) |
Advance consideration for WBD acquisition (b) |  | (2,800) |  |  |  |  | — |
Proceeds from dispositions (c) |  | 13 |  |  |  |  | 66 |
Other investing activities |  | (6) |  |  |  |  | — |
Net cash flow used for investing activities |  | $(3,115) |  |  |  |  | $(184) |

(a) Includes payments associated with the implementation of our transformation initiatives of $33 million for the six
months ended June 30, 2026 (Successor) and $1 million for the six months ended June 30, 2025 (Predecessor).
(b) Reflects the termination fee paid to Netflix, on behalf of WBD (See Note 15 to the consolidated financial
statements).
(c) 2025 primarily reflects proceeds received from the disposition of a noncore business, and both periods include the
collection of receivables associated with the 2022 sale of a 37.5% interest in The CW.
Financing Activities

| Successor |  | Predecessor |
| Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025
Borrowings under credit facility |  | $2,700 |  |  |  |  | $— |
Repayment of credit facility borrowings |  | (900) |  |  |  |  | — |
Repayment of notes and debentures |  | (347) |  |  |  |  | — |
Dividends paid on common stock |  | (117) |  |  |  |  | (70) |
Payment of payroll taxes in lieu of issuing shares for stock-based compensation |  | (104) |  |  |  |  | (26) |
Payments to noncontrolling interests |  | (189) |  |  |  |  | (65) |
Other financing activities |  | (51) |  |  |  |  | — |
Net cash flow provided by (used for) financing activities |  | $992 |  |  |  |  | $(161) |

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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Common Stock Dividends
The following table presents dividends declared per share and total dividends for Paramount Skydance Corporation
Class A and B Common Stock for the Successor period and Paramount Global’s Class A and Class B Common
Stock for the Predecessor period.

| Successor |  |  | Predecessor |  | Successor |  | Predecessor |
| Three Months Ended June 30, |  |  | Three Months Ended June 30, |  | Six Months Ended June 30, |  |  | Six Months Ended June 30,
| 2026 |  |  | 2025 |  |  | 2026 |  |  |  |  | 2025 |
Class A and Class B Common Stock |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends declared per common share |  | $.05 |  |  |  |  | $.05 |  |  |  | $.10 |  |  |  |  | $.10 |
Total common stock dividends |  | $59 |  |  |  |  | $35 |  |  |  | $119 |  |  |  |  | $70 |

Capital Structure
The following table sets forth our debt.

| At |  | At
| June 30, 2026 |  | December 31, 2025
Senior debt |  | $11,737 |  |  |  | $12,038 |
Junior debt |  | 1,617 |  |  |  | 1,617 |
Borrowings under credit facility |  | 1,800 |  |  |  | — |
Obligations under finance leases |  | 2 |  |  |  | 3 |
Total debt (a) |  | 15,156 |  |  |  | 13,658 |
Less current portion |  | 665 |  |  |  | 433 |
Total long-term debt, net of current portion |  | $14,491 |  |  |  | $13,225 |

(a) At June 30, 2026 and December 31, 2025, our total senior and junior debt was net of unamortized fair value
adjustments of $1.28 billion and $1.32 billion, respectively, recorded in connection with the pushdown of the Ultimate
Parent’s basis (see Note 2 to the consolidated financial statements). The face value of our total debt at June 30, 2026
and December 31, 2025 was $16.43 billion (including credit facility borrowings discussed below) and $14.98 billion,
respectively.
Senior Debt
At June 30, 2026, our senior debt was comprised of senior notes and debentures due between 2026 and 2050 with
interest rates ranging from 2.90% to 7.875%.
In January 2026, we repaid our $347 million of 4.0% senior notes at maturity.
Junior Debt
At June 30, 2026, our junior debt was comprised of $628 million 6.25% junior subordinated debentures due 2057
and $989 million 6.375% junior subordinated debentures due 2062. The subordination and extended term, as well
as an interest deferral option of our junior subordinated debentures, provide significant credit protection measures
for senior creditors and, as a result of these features, the debentures received a 50% equity credit by Standard &
Poor’s Rating Services, Fitch Ratings Inc., and Moody’s Investors Service, Inc.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Supplemental Guarantor Financial Information
Paramount Global is a 100% owned subsidiary of Paramount Skydance Corporation. Upon the closing of the
Skydance Transactions, Paramount Skydance Corporation provided a full and unconditional parent guarantee of
Paramount Global’s senior and junior debt. None of Paramount Skydance Corporation’s other subsidiaries are
guarantors of Paramount Global’s debt.
The tables below present combined summarized financial information for Paramount Skydance Corporation, the
parent guarantor, and Paramount Global, the issuer (jointly the “Obligor Group”) as standalone companies after
elimination of intercompany transactions and balances, and do not include nonguarantor and nonissuer
subsidiaries. This summarized financial information has been prepared and presented pursuant to the Securities and
Exchange Commission Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of
Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor
Group in accordance with U.S. GAAP.

Summarized Statement of Operations
| Six Months Ended June 30, |  | Period From August 7, - December 31,
| 2026 |  |  | 2025 |
Operating loss |  | $(220) |  |  |  | $(82) |
Interest expense, net |  | $(473) |  |  |  | $(306) |
Intercompany interest |  | $(158) |  |  |  | $(132) |
Net loss |  | $(878) |  |  |  | $(546) |

Summarized Balance Sheets
| At |  |  | At |
| June 30, 2026 |  | December 31, 2025
Current assets |  | $398 |  |  |  | $1,350 |
Noncurrent assets |  | $298 |  |  |  | $293 |
Debt, current |  | $664 |  |  |  | $432 |
Current liabilities |  | $791 |  |  |  | $664 |
Long-term debt |  | $14,490 |  |  |  | $13,223 |
Noncurrent liabilities |  | $2,182 |  |  |  | $2,222 |
Notes payable to nonguarantor subsidiaries |  | $1,690 |  |  |  | $975 |

Commercial Paper
At both June 30, 2026 and December 31, 2025, we had no outstanding commercial paper borrowings.
Credit Facility
In April 2026, we entered into an amendment to our revolving credit facility (the “Credit Facility”), increasing the
commitments from $3.50 billion to $5.00 billion, which will be reduced to $4.94 billion in January 2027 through
maturity in January 2028. The Credit Facility is used for general corporate purposes and to support commercial
paper borrowings, if any. We may, at our option, also borrow in certain foreign currencies up to specified limits
under the Credit Facility. Borrowing rates under the Credit Facility are determined at the time of each borrowing
and are generally based on either the prime rate in the U.S. or an applicable benchmark rate plus a margin (based
on our senior unsecured debt rating), depending on the type and tenor of the loans entered into. The benchmark rate
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
for loans denominated in U.S. dollars is Term SOFR, and for loans denominated in euros, sterling and yen is based
on EURIBOR, SONIA and TIBOR, respectively. In the first quarter of 2026, in connection with the $2.8 billion
termination fee paid to Netflix, we borrowed $2.15 billion under the Credit Facility. As of June 30, 2026,
outstanding borrowings under the Credit Facility totaled $1.8 billion at a weighted average interest rate of 6.13%.
The remaining availability under the Credit Facility at June 30, 2026 was $3.2 billion. At August 3, 2026,
outstanding borrowings under the Credit Facility totaled $1.75 billion at a weighted average interest rate of 6.13%.
Credit facility borrowings outstanding at the closing of the WBD Merger are expected to be repaid with the
funding from the private placement described in Note 1 to the consolidated financial statements.
The Credit Facility has one principal financial covenant which sets a maximum Consolidated Total Leverage Ratio
(“Leverage Ratio”) at the end of each quarter. The maximum Leverage Ratio was 4.50 x for the quarter ended
June 30, 2026 and will remain at this level until maturity. The Leverage Ratio reflects the ratio of our Consolidated
Indebtedness, net of a maximum of $3.0 billion of unrestricted cash and cash equivalents at the end of a quarter, to
our Consolidated EBITDA (each as defined in the credit agreement) for the trailing twelve-month period. We met
the covenant as of June 30, 2026.
Other Bank Borrowings
At both June 30, 2026 and December 31, 2025, there were no outstanding bank borrowings under Miramax’s $50
million credit facility that matures in November 2027.
Guarantees
Letters of Credit and Surety Bonds
At June 30, 2026, we had outstanding letters of credit and surety bonds of $1.24 billion that were not recorded on
the Consolidated Balance Sheet, including $998 million issued under a $1.9 billion standby letter of credit facility.
In accordance with the contractual requirements of one of our commitments, the letter of credit outstanding under
this facility increases and decreases consistent with the related contractual commitment. Letters of credit and surety
bonds are primarily used as security against non-performance in the normal course of business under contractual
requirements of certain of our commitments. The standby letter of credit facility, which matures in May 2027, is
subject to provisions similar to the Credit Facility, including the same principal financial covenant (see Note 7 to
the consolidated financial statements), and will be secured by the same collateral as the Credit Facility at closing of
the WBD merger.
Other
In the course of our business, we both provide and receive indemnities that are intended to allocate certain risks
associated with business transactions. Similarly, we may remain contingently liable for various obligations of a
business that has been divested in the event that a third party does not live up to its obligations under an
indemnification obligation. We record a liability for our indemnification obligations and other contingent liabilities
when probable and reasonably estimable.
Accounting Pronouncements Not Yet Adopted
See Note 1 to the consolidated financial statements.
Legal Matters
See Legal Matters section in Note 14 to the consolidated financial statements.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Cautionary Note Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q contains both historical and forward-looking statements, including statements
related to our future financial results and performance, potential achievements and transactions (including in
connection with our pending merger with Warner Bros. Discovery, Inc.) and their expected benefits, and industry
trends and developments. All statements that are not statements of historical fact are, or may be deemed to be,
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly,
statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-
looking statements reflect our current expectations concerning future results and events; can generally be identified
by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,”
“likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases; and involve known and unknown
risks, uncertainties and other factors that are difficult to predict and which may cause our actual results,
performance or achievements to be different from any future results, performance or achievements expressed or
implied by these statements. These risks, uncertainties and other factors include, among others: risks related to our
streaming business; the adverse impact on our advertising revenues as a result of changes in consumer behavior,
advertising market conditions and deficiencies in audience measurement; risks related to operating in highly
competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving
technologies and distribution models; risks related to our decisions to invest in new businesses, products, services
and technologies, and the evolution of our business strategy; the potential for loss of carriage or other reduction in
or the impact of negotiations for the distribution of our content; damage to our reputation or brands; losses due to
asset impairment charges for goodwill, content and long-lived assets, including finite-lived intangible assets;
liabilities related to discontinued operations and former businesses; increasing scrutiny of, and evolving
expectations for, sustainability initiatives; evolving business continuity, cybersecurity, privacy and data protection
and similar risks; challenges in protecting and maintaining our intellectual property rights; domestic and global
political, economic and regulatory factors affecting our businesses generally; the inability to hire or retain key
employees or secure creative talent; disruptions to our operations as a result of labor disputes; risks and costs
associated with the integration of, and our ability to integrate, the businesses of Paramount Global and Skydance
Media, LLC successfully and to achieve anticipated synergies; litigation relating to the Skydance Transactions
potentially resulting in substantial costs; volatility in the price of our Class B common stock; the effect our dual-
class capital structure and the concentrated ownership may have on the price of our Class B common stock or
business; risks related to a private sale of a controlling interest in our Company, including that our stockholders
may not realize any change of control premium on shares of our Class B common stock and that we may become
subject to the control of a presently unknown third party; risks associated with our status as a “controlled
company” under Nasdaq rules, including our exemption from certain corporate governance requirements; risks
associated with the lack of voting rights of our Class B common stock; risks that anti-takeover provisions in our
amended and restated certificate of incorporation (“Charter”) and amended and restated bylaws, and under
Delaware law could deter, delay, or prevent a change of control; risks that exclusive forum provisions in our
Charter could limit a stockholder’s choice of forum for certain claims and discourage lawsuits against our directors
and officers; risks that corporate opportunity provisions in our Charter could permit certain persons to pursue
competitive opportunities that might otherwise be available to us; risks associated with our holding company
structure, including our dependence on distributions from our subsidiaries to meet our tax obligations and other
cash requirements; disruptions the WBD Merger may cause to our and WBD’s business and commercial
relationships; the negative impact that a failure to consummate the WBD Merger could have on our business,
financial condition, results of operations and stock price; the risk that the WBD Merger may be prevented or
delayed or the anticipated benefits reduced if we do not obtain certain regulatory approvals; the risk that the WBD
Merger Agreement may be terminated in accordance with its terms, including if any conditions to the closing of the
WBD Merger are not satisfied; the risk that litigation relating to the WBD Merger could prevent or further delay
the closing of the WBD Merger or result in the payment of damages after closing; challenges realizing synergies
and other anticipated benefits expected from the WBD Merger, including integrating WBD’s business
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
successfully; risks to our business, financial condition or results of operations as a result of the incurrence of
substantial costs and indebtedness in connection with the WBD Merger; risks of reduced ownership and economic
interest by our existing stockholders as a result of the WBD Merger; and other factors described in our news
releases and filings with the Securities and Exchange Commission, including but not limited to our most recent
Annual Report on Form 10-K and our reports on Form 10-Q and Form 8-K. There may be additional risks,
uncertainties and factors that we do not currently view as material or that are not necessarily known. The forward-
looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof, and we do
not undertake any obligation to publicly update any forward-looking statements to reflect subsequent events or
circumstances.
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk.

See Note 8 to the consolidated financial statements.

Item 4. | Controls and Procedures.

Our principal executive officer and principal financial officer have concluded that, as of the end of the period
covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the
Securities Exchange Act of 1934, as amended) were effective, based on the evaluation of these controls and
procedures required by Rule 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended.
No change in our internal control over financial reporting occurred during our last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION

Item 1. | Legal Proceedings.

The information set forth in Note 14 to the consolidated financial statements appearing in Item 1 of Part I of this
Quarterly Report on Form 10-Q under the caption “Legal Matters” is incorporated by reference herein.

Item 1A. | Risk Factors.

In addition to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2025
(filed with the Securities and Exchange Commission on February 25, 2026), the following risks relating to the
WBD Merger could adversely affect our business, financial condition or results of operations before and after the
completion of the WBD Merger.
Risks Relating to the WBD Merger
The proposed WBD Merger may cause disruption in our and WBD’s business and commercial relationships.
The proposed WBD Merger could cause disruptions to our business or commercial relationships, or those of WBD,
which could have an adverse impact on our and WBD’s business, financial condition or results of operations.
Parties with which we or WBD have business relationships may experience uncertainty as to 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 or WBD otherwise may have
sought to establish business relationships may seek alternative relationships with third parties. We have
experienced, and may continue to experience, negative publicity relating to the WBD Merger, which could have an
adverse effect on our or WBD’s ongoing operations including, but not limited to, retaining and attracting
employees and creative talent, maintaining our relationships with existing customers and obtaining potential new
customers. We compete with other content creators for creative talent, including producers, directors, actors and
writers and if we fail to retain or attract new key employees or creative talent, our business, financial condition or
results of operations could be adversely affected.
The pursuit of the WBD Merger and the preparation for the integration of WBD may place a significant burden on
our management and internal resources. The diversion of management’s attention away from day-to-day business
concerns and any difficulties encountered in the transition and integration process could adversely affect our
business, financial condition or results of operations.
Failure to consummate the WBD Merger could negatively impact our business, financial condition, results of
operations and stock price.
The WBD Merger cannot be consummated until conditions to Closing (as defined in the WBD Merger Agreement)
are satisfied or, if permissible under applicable law, waived. The WBD Merger is subject to numerous Closing
conditions, including the receipt of required regulatory approvals and the absence of any orders enjoining the
consummation of the WBD Merger. See “—The WBD Merger is subject to a number of Closing conditions and, if
these conditions are not satisfied, the WBD Merger Agreement may be terminated in accordance with its terms and
the WBD Merger may not be consummated. In addition, the parties have the right to terminate the WBD Merger
Agreement under certain circumstances, in which case the WBD Merger would not be consummated.”
There can be no assurance that the conditions to completion of the WBD Merger, including the receipt of required
regulatory approvals, will be satisfied or waived on a timely basis or at all. Further, there can be no assurance that
governmental authorities will not impose conditions, terms, obligations or restrictions and that such conditions,
terms, obligations or restrictions will not have the effect of delaying or preventing consummation of the WBD
Merger. For example, in July 2026, twelve states (California, Arizona, Colorado, Connecticut, Massachusetts,
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Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington) filed an antitrust action in the
U.S. District Court for the Northern District of California against Paramount and WBD relating to the WBD
Merger, seeking to block the WBD Merger, among other relief. On July 24, 2026, we entered into a stipulation
agreeing that the WBD Merger will not close, and we will not take any steps to integrate the operations of
Paramount with those of WBD, until the earlier of five days following the court’s ruling or June 1, 2027.
If in connection with any of the above or otherwise, WBD or Paramount is required to divest assets or businesses
or to agree to other conditions, obligations or restrictions on the conduct of its business, there can be no assurance
that we or WBD will be able to negotiate such divestitures or other measures expeditiously or on favorable terms
or that the governmental authorities will approve the terms of such divestitures or other measures. In addition, we
can provide no assurance that these conditions, terms, obligations or restrictions will not result in the abandonment
of the WBD Merger. If the conditions to completion of the WBD Merger are not satisfied or waived, we may be
unable to complete the WBD Merger in the time frame or manner currently anticipated or at all.
If the WBD Merger is not completed by September 30, 2026, we have agreed in the WBD Merger Agreement to
pay as merger consideration to WBD stockholders an additional 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). The anticipated closing of the WBD Merger
has been delayed as a result of the lawsuit described above, with the parties agreeing to postpone closing until the
earlier of five days following the court’s ruling or June 1, 2027.
Additionally, if the WBD Merger is not completed, our ongoing business may be adversely affected and we will be
subject to several risks or consequences, including:
•if the WBD Merger Agreement is terminated under certain circumstances, including where required regulatory
approvals have not been obtained or because a court order prevents the WBD Merger from closing on antitrust
grounds, we may be required to pay WBD a $7.0 billion Regulatory Termination Fee (as defined in the WBD
Merger Agreement), the payment of which would likely require us to issue additional equity pursuant to the
Subscription Agreements, with corresponding dilution to our existing stockholders;
•we will be required to pay certain costs relating to the WBD Merger, whether or not the WBD Merger is
consummated, such as significant fees and expenses relating to financial advisory, legal, accounting,
consulting or other advisory fees or expenses, employee-benefit or related expenses, regulatory filings or filing
and printing fees, none of which we would be able to recover;
•matters relating to the WBD Merger may require substantial commitments of time and resources by our
management or the expenditure of significant funds in the form of fees and expenses, which could otherwise
have been devoted to day-to-day operations or other opportunities that may have been beneficial to us;
•the commitments we have obtained to finance the WBD Merger, including a senior secured bridge term loan
facility, may require us to pay certain fees and expenses in connection with such commitments, and such fees
and expenses could be substantial;
•the ratings agencies could downgrade, or take other negative actions with respect to, our credit ratings or
ratings outlook, which could adversely affect our ability to obtain cost-effective financing;
•the price of our Class B Common Stock could decline significantly, including to the extent the current market
price reflects an assumption that the WBD Merger will be consummated;
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•we would not realize the benefits expected from the WBD Merger, which could place us at a disadvantage in
competing with technology companies and others for content, creative talent and distribution;
•we would continue to operate on a standalone basis, without the cost savings, synergies and other benefits
expected from the WBD Merger, and as a result we may face greater challenges in executing our strategic and
financial plans, and be required to implement additional cost-reduction measures, including further reductions
in content and other spending, in order to achieve those plans; and
•declines in our linear television revenues are expected to persist, and the growth of our streaming business on a
standalone basis may be insufficient to offset them. See the risk factors included in our Annual Report on Form
10-K referred to above under “Risks Relating to Our Business and Industry.”
In addition, if the WBD Merger is not consummated, we may experience negative reactions from the financial
markets or from our employees, commercial partners, clients or customers. We could also be subject to litigation,
including litigation related to failure to consummate the WBD Merger or to enforce our obligations under the
WBD Merger Agreement. If the WBD Merger is not consummated, the risks described above may materially
adversely affect our business, financial condition, results of operations or stock price. For a description of the
circumstances under which the Regulatory Termination Fee is payable, see the WBD Merger Agreement.
Paramount and WBD must obtain certain regulatory approvals in order to consummate the WBD Merger; if
such approvals are not obtained or are obtained with conditions or if the WBD Merger is enjoined in connection
with legal or regulatory proceedings, the WBD Merger may be prevented or delayed or the anticipated benefits
of the WBD Merger could be reduced.
The Closing is conditioned upon, among other things, the clearance or approval by various regulatory authorities in
the United States and other jurisdictions and the absence of any orders enjoining the consummation of the WBD
Merger. As a condition to granting the necessary approvals or clearances, regulatory authorities may impose
conditions, terms, obligations or restrictions or require divestitures or place restrictions on our business after
consummation of the WBD Merger. If any such divestitures negatively impact our credit profile and credit ratings
as compared to the combined business if we did not have to undertake such divestitures, we may not be able to
obtain financing on as favorable terms as we otherwise anticipated, or at all. Any such requirements or restrictions
sought by regulatory authorities could negatively affect our business, financial condition or results of operations
following consummation of the WBD Merger. Any such requirements or restrictions may prevent or delay
consummation of the WBD Merger or may reduce the anticipated benefits of the WBD Merger, which could also
have a material adverse effect on our business, financial condition or results of operations.
The WBD Merger is subject to a number of Closing conditions and, if these conditions are not satisfied, the
WBD Merger Agreement may be terminated in accordance with its terms and the WBD Merger may not be
consummated. In addition, the parties have the right to terminate the WBD Merger Agreement under certain
circumstances, in which case the WBD Merger would not be consummated.
The WBD Merger is subject to a number of Closing conditions and, if these conditions are not satisfied or waived
(to the extent permitted by law), the WBD Merger may not be consummated. These conditions include: (i) the
expiration of certain mandatory waiting periods or receipt of certain other clearances or affirmative approvals of
certain governmental bodies, agencies or authorities and (ii) the absence of any law or order, issued by a court or
governmental entity of competent jurisdiction, restraining, enjoining, prohibiting or preventing the consummation
of the WBD Merger. Each of WBD’s and Paramount’s obligations to consummate the WBD Merger is also subject
to certain other conditions, including, among others, the compliance with pre-closing covenants by and the
accuracy of the representations and warranties of WBD (on the part of Paramount), on the one hand, and
Paramount and Merger Sub (as defined in the WBD Merger Agreement) (on the part of WBD), on the other hand
(in each case, subject to certain qualifications). Paramount’s obligation to consummate the WBD Merger is also
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subject to (x) the absence of certain changes that have had, or would reasonably be expected to have, a material
adverse effect with respect to the Streaming and Studios segments of WBD and (y) WBD not having completed the
separation of its Streaming and Studios business from its Global Linear Networks business nor having declared or
made any dividend to WBD’s stockholders to effectuate such separation. These Closing conditions may not be
fulfilled and, accordingly, the WBD Merger may not be consummated.
Additionally, the WBD Merger Agreement may be terminated by either Paramount or WBD (i) by mutual written
consent, (ii) if any governmental entity of competent jurisdiction issues, enacts, enforces or enters any order
permanently enjoining or prohibiting the consummation of the WBD Merger, and such order becomes final and
non-appealable, or (iii) subject to certain limitations, if the Effective Time (as defined in the WBD Merger
Agreement) has not occurred on or before 11:59 p.m., Eastern time, on March 4, 2027 (the “End Date”), subject to
one automatic extension to June 4, 2027 if on such date all of the closing conditions, except those related to
regulatory approvals and governmental orders, have been satisfied or waived. In addition, (x) the WBD Merger
Agreement may be terminated by Paramount due to certain breaches by WBD of its representations, warranties and
covenants contained in the WBD Merger Agreement, subject to certain cure rights and (y) the WBD Merger
Agreement may be terminated by WBD due to certain breaches by Paramount of its representations, warranties and
covenants contained in the WBD Merger Agreement, subject to certain cure rights.
Litigation relating to the WBD Merger could prevent or further delay the Closing and/or result in the payment
of damages following the Closing.
In connection with the WBD Merger, we and WBD are subject to litigation and related proceedings, including
proceedings seeking to block or enjoin the WBD Merger or seeking monetary damages, and we may become
subject to additional litigation, demand letters, claims, enforcement actions or other proceedings relating to the
WBD Merger. See Note 14 to the consolidated financial statements appearing in Item 1 of Part I of this Quarterly
Report on Form 10-Q under the caption “Legal Matters—Litigation Relating to the WBD Merger,” and Part II,
Item 1, “Legal Proceedings,” for additional information regarding certain pending WBD Merger litigation and
related proceedings.
The outcome of litigation and other proceedings is uncertain, and these matters, and any additional litigation,
demand letters, claims, enforcement actions or other proceedings relating to the WBD Merger, could prevent or
delay the Closing, result in substantial costs to WBD and Paramount, result in the payment of damages following
the Closing, or otherwise adversely affect our business, financial condition or results of operations.
In addition, governmental authorities have initiated, and could initiate additional, actions challenging the WBD
Merger, which could further delay or prevent the Closing, result in burdensome conditions, terms, obligations or
restrictions, or otherwise adversely affect the post-close entity. The anticipated closing of the WBD Merger has
been delayed as a result of the lawsuit described above, with the parties agreeing to postpone closing until the
earlier of five days following the court’s ruling or June 1, 2027.
Although we expect the WBD Merger will result in synergies and other benefits, those synergies and benefits
may not be realized or may not be realized within the expected time frame. WBD’s business may not be
integrated successfully, or such integration may be more difficult, time-consuming or costly than expected.
Operating costs, customer loss and business disruption, including difficulties in maintaining relationships with
employees, customers, suppliers or vendors, may be greater than expected following the WBD Merger. Revenues
following the WBD Merger may be lower than expected.
Our ability to realize the anticipated benefits of the WBD Merger will depend, to a large extent, on our ability to
integrate WBD’s business in a manner that facilitates growth opportunities or achieves the potential synergies, cost
savings or revenue growth opportunities identified by Paramount without adversely affecting current revenues or
investments in future growth. If we were required to divest certain businesses or assets, it may reduce our ability to
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fully recognize such synergies. Even if we are able to integrate WBD successfully, the anticipated benefits of the
WBD Merger, including the expected synergies, may not be realized fully or at all or may take longer to realize
than expected.
The acquisition of another public company and integration of its business with our business is complex, costly and
time-consuming and may divert significant management attention or resources towards integration planning at the
expense of Paramount’s and WBD’s ordinary course business practices and operations. Paramount and WBD have
been operated as standalone businesses, and they will continue to be operated as such until the consummation of
the WBD Merger. Upon consummation of the WBD Merger, our management may face significant challenges in
integrating the technologies, organizations, systems, procedures, policies and operations, as well as addressing the
different business cultures at Paramount and WBD, managing the increased scale and scope of the combined
businesses, identifying and eliminating duplicative programs, and retaining key personnel. The post-closing
integration process could take longer than anticipated and could result in the loss of key employees, the disruption
of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in standards, controls,
information technology systems, procedures and policies, any of which could adversely affect our ability to
maintain relationships with customers, employees or other third parties. The overall combination of Paramount’s
and WBD’s businesses may also result in material unanticipated expenses, liabilities, competitive disadvantages,
and loss of customer, creative talent and other business relationships. Failure to efficiently and effectively integrate
the two businesses and to realize the anticipated benefits of the WBD Merger could adversely affect our business,
financial condition or results of operations. We have entered into a stipulation agreeing that the WBD Merger will
not close, and we will not take any steps to integrate the operations of Paramount with those of WBD, until the
earlier of five days following the court’s ruling or June 1, 2027.
The difficulties of combining the operations of Paramount and WBD include, among others:
•the diversion of management attention to integration matters;
•difficulties in integrating operations and systems, including administrative, human resources and information
technology infrastructure, financial reporting and internal control systems and intellectual property and
communications systems;
•challenges in conforming standards, controls, procedures and accounting and other policies, business cultures
and compensation structures between the two companies;
•difficulties in integrating employees and attracting and retaining key personnel, including talent;
•challenges in retaining existing, and obtaining new customers, viewers, subscribers, suppliers, distributors,
licensors, lessors, employees, business associates, advertisers, creative talent and others;
•difficulties in achieving anticipated cost savings, synergies, accretion targets, business opportunities, financing
plans and growth prospects from the combination;
•difficulties in managing the expanded operations of a significantly larger and more complex combined
company;
•the costs of servicing the increased indebtedness and interest expense of the combined company resulting from
the WBD Merger and the related financing transactions;
•challenges in continuing to develop valuable and widely-accepted content and technologies;
•contingent liabilities that are larger than expected; and
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•potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the
WBD Merger.
Many of these factors are outside of the control of Paramount and WBD, and any one of them could result in lower
revenues, higher costs and diversion of management time and energy, which could materially and adversely impact
our business, financial condition or results of operations. In addition, even if the operations of WBD’s business are
integrated successfully with Paramount, the full benefits of the WBD Merger may not be realized, including,
among others, the synergies, cost savings or sales or growth opportunities that are expected. These benefits may
not be achieved within the anticipated time frame or at all. Further, additional unanticipated costs may be incurred
in the integration of WBD’s business and the financing of the transactions. All of these factors could cause dilution
to the earnings per share of Paramount, decrease or delay the projected accretive effect of the WBD Merger, and
negatively impact the price of our Class B Common Stock following the WBD Merger. As a result, no assurances
can be provided that acquisition of WBD will result in the realization of the full benefits expected from the WBD
Merger within the anticipated time frames or at all.
We have incurred, and will continue to incur, substantial direct and indirect costs as a result of the WBD
Merger.
We have incurred, and will continue to incur, substantial expenses in connection with and as a result of completing
the WBD Merger, including financial advisory, legal, accounting, consulting and other advisory fees and expenses,
employee-benefit and related expenses, regulatory filings, financing fees and filing and printing fees. In addition,
over a period of time following the Closing, we expect to incur substantial expenses in connection with integrating
and coordinating WBD’s business, operations, policies and procedures. A portion of the transaction costs related to
the WBD Merger will be incurred regardless of whether the WBD Merger is completed. While we have assumed
that a certain level of transaction expenses will be incurred, factors beyond our control could affect the total
amount or the timing of these expenses. Many of the expenses that will be incurred are, by their nature, difficult to
estimate accurately. These expenses may exceed the costs historically borne by us. These costs could adversely
affect our business, financial condition or results of operations. We expect that these expenses will increase, the
longer it takes to complete the WBD Merger.
We are incurring substantial indebtedness in connection with the WBD Merger, and the degree to which we will
be leveraged following the completion of the WBD Merger may materially and adversely affect our business,
financial condition and results of operations.
We are incurring substantial indebtedness in connection with the WBD Merger. As of June 30, 2026, as adjusted
for the WBD Merger, including assuming (i) an estimated $17.7 billion of outstanding senior notes of WBD as of
March 31, 2026, are assumed in connection with the WBD Merger, (ii) borrowing the full amount of the $49.0
billion 364-day senior secured bridge term loan facility (or any other permanent financing incurred to reduce or
replace such facility), including to refinance the WBD Term Loans, (iii) the two term A loans each for $2.5 billion
to be funded at Closing, with maturities of three and five years, respectively, (iv) that our existing revolving credit
facility is paid down at Closing and (v) that the new $5.0 billion five-year senior secured revolving credit facility
remains undrawn, we would have had approximately $86.3 billion of total debt (excluding debt issuance costs and
capital lease obligations).
Our ability to make payments on and to refinance our indebtedness, including the debt incurred pursuant to the
WBD Merger, as well as any future debt that we may incur, will depend on our ability to generate cash in the
future from operations or financings. Our ability to generate cash is subject to general economic, financial,
competitive, legislative, regulatory and other factors that are beyond our control. We may not generate sufficient
cash flow from our operations or that future borrowings will be available to us in an amount sufficient to service
our debt and meet our business needs, such as funding working capital or the expansion of our operations.
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If our cash flows and capital resources are insufficient to fund debt service obligations or we are not able to repay
or refinance our debt as it becomes due, we may be forced to take certain actions, including reducing spending on
content and programming, reducing future financing for working capital, capital expenditures and general
corporate purposes, reducing or delaying investments, reducing, suspending or eliminating our dividend, disposing
of material assets or operations, seeking additional debt or equity capital, restructuring or refinancing our
indebtedness or dedicating an unsustainable level of our cash flow from operations to the payment of principal and
interest on our indebtedness. The lenders or bondholders that hold our debt could also accelerate amounts due in
the event that we default, which could potentially trigger a default or acceleration of the maturity of our other debt.
The level and quality of the combined company’s earnings, operations, business and management, among other
things, will impact the determination of the combined company’s credit ratings. A decrease in the ratings assigned
to the combined company or any series of its debt by the ratings agencies may negatively impact the combined
company’s access to the debt capital markets and increase the combined company’s cost of borrowing. There can
be no assurance that the combined company will be able to obtain financing on acceptable terms or at all, or be
able to generate sufficient cash flow to reduce leverage in the time frame expected or at all. In addition, there can
be no assurance that the combined company will be able to maintain the current creditworthiness or prospective
credit ratings of Paramount or WBD, particularly given recent negative ratings actions or credit watches taken in
light of the WBD Merger, and any further actual or anticipated changes or downgrades in such credit ratings may
have a negative impact on the liquidity, capital position or access to capital markets of the combined company.
In addition, our leverage could put us at a competitive disadvantage compared to our competitors that are less
leveraged. These competitors could have greater financial flexibility to pursue strategic acquisitions and secure
additional financing for their operations. Our leverage could also impede our ability to withstand downturns in our
industry or the economy in general.
Despite our expected level of indebtedness, we may still incur substantially more indebtedness. This could
exacerbate the risks associated with our substantial indebtedness.
We may incur substantial additional indebtedness in the future. The terms of the agreements governing the
indebtedness we will incur in connection with the WBD Merger may limit, but not prohibit, us from incurring
additional indebtedness. If new indebtedness is added to our current debt levels, the related risks that we now face
could increase. Any additional indebtedness could have the effect of, among other things, reducing our flexibility
to respond to changing business and economic conditions. In addition, the amount of cash required to pay interest
on any additional indebtedness levels will increase the demand on our cash resources and reduce funds available
for capital expenditures, share repurchases and dividends, and other activities and may create competitive
disadvantages for us relative to other companies with lower debt levels.
Our existing stockholders will have a reduced ownership and economic interest in Paramount after the WBD
Merger. The PIPE Transaction and the issuance of the Warrants may cause dilution to the earnings per share
of Paramount, which may negatively affect the market price of our Class B Common Stock.
Following Closing, it is anticipated that the Equity Syndication Parties (excluding affiliates of the Ellison Parties
and RedBird) will receive approximately 40% to 43% of the outstanding shares of our Class B Common Stock as a
result of the PIPE Transaction (as defined in the WBD Merger Agreement). The shares of Class B Common Stock
issued in the PIPE Transaction will represent, in the aggregate, 73% to 78% of the shares of our Class B Common
Stock outstanding after giving effect to the PIPE Transaction and assuming no Ticking Consideration is payable.
Consequently, our existing stockholders will have a reduced ownership and economic interest following the
consummation of the WBD Merger and the PIPE Transaction. Additionally, the Subscription Agreement with the
Ellison Parties would result in the issuance of additional shares of Class B Common Stock in the amount required
to finance any such Ticking Consideration. Assuming payment of the maximum Ticking Consideration that would
be payable through the extended End Date of June 4, 2027 pursuant to the WBD Merger Agreement, the shares of
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Class B Common Stock issued in the PIPE Transaction will represent, in the aggregate, 74% to 79%, of the shares
of our Class B Common Stock outstanding after giving effect to the PIPE Transaction.
A change in the concentration of the ownership of our Class B Common Stock as a result of the WBD Merger may
affect the public float and trading volume in our Class B Common Stock. Our Class B Common Stock may be less
liquid as a result of a reduced public float than the shares of companies with broader public ownership, which
could have the effect of increasing volatility and adversely affecting the trading price of our Class B Common
Stock.
The issuance of shares of our Class B Common Stock as part of the PIPE Transaction and the shares of Class B
Common Stock issuable upon the exercise of the Warrants could have the effect of depressing the market price of
our Class B Common Stock. Furthermore, if we raise additional equity capital following the Closing, including in
order to achieve our deleveraging goals with respect to the substantial indebtedness we will incur in connection
with the WBD Merger, any such equity financings would result in additional dilution to holders of our common
stock. In addition, we could encounter other transaction-related costs or effects, such as the failure to realize all of
the benefits anticipated in the WBD Merger, which could cause dilution to earnings per share or decrease or delay
the expected accretive effect of the WBD Merger and cause a decrease in the market price of our Class B Common
Stock. We may also be required to pay the $7.0 billion Regulatory Termination Fee pursuant to the terms of the
WBD Merger Agreement, which is expected to be financed through the issuance of additional shares of Class B
Common Stock pursuant to the terms of the Subscription Agreements. If this occurs, it would result in dilution to
our existing stockholders even if the WBD Merger is not consummated.

Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds.

Company Purchases of Equity Securities
None.
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Item 6. | Exhibits.

Exhibit No. | Description of Document
(3) |  | Articles of Incorporation and Bylaws
| (a) | Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Paramount Skydance Corporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of Paramount Skydance Corporation filed April 7, 2026) (File No. 001-42791).
(10) |  | Material Contracts
| (a) | Pro Rata Credit Agreement, dated as of April 7, 2026, by and among the parties listed therein (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Paramount Skydance Corporation filed April 9, 2026) (File No. 001-42791).
| (b) | Amendment No. 7 to the Revolving Credit Agreement, dated as of April 7, 2026, by and among the parties listed therein (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K of Paramount Skydance Corporation filed April 9, 2026) (File No. 001-42791).
| (c) | Separation Agreement, dated as of April 8, 2026, by and among Paramount Skydance Corporation, Paramount Global and Jeffrey Shell (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K of Paramount Skydance Corporation filed April 9, 2026) (File No. 001-42791).
(31) |  | Rule 13a-14(a)/15d-14(a) Certifications
| (a) | Certification of the principal executive officer of Paramount Skydance Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
| (b) | Certification of the principal financial officer of Paramount Skydance Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
(32) |  | Section 1350 Certifications
| (a) | Certification of the principal executive officer of Paramount Skydance Corporation furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
| (b) | Certification of the principal financial officer of Paramount Skydance Corporation furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
(101) |  | Interactive Data File
|  | 101. INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|  | 101. SCH Inline XBRL Taxonomy Extension Schema.
|  | 101. CAL Inline XBRL Taxonomy Extension Calculation Linkbase.
|  | 101. DEF Inline XBRL Taxonomy Extension Definition Linkbase.
|  | 101. LAB Inline XBRL Taxonomy Extension Label Linkbase.
|  | 101. PRE Inline XBRL Taxonomy Extension Presentation Linkbase.
(104) |  | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.

| PARAMOUNT SKYDANCE CORPORATION (Registrant)
Date: August 4, 2026 | /s/ Dennis Cinelli
| Dennis Cinelli Chief Financial Officer
Date: August 4, 2026 | /s/ Katherine Gill-Charest
| Katherine Gill-Charest Executive Vice President, Controller and Chief Accounting Officer