What changed in this filing

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Item 1. Financial Statements

2026-08-04 compared with 2026-05-04 · 1482 added, 581 removed, 441 unchanged (82% of the section changed)

3 unchanged sentences

in millions, except per share amounts)

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

Revenues $ 7,347 $ 7,192

Ended June 30,

Costs and expenses:

Operating 4,855 4,961

Selling, general and administrative

Depreciation and amortization

Impairment charges

Restructuring and transaction-related items

5 unchanged sentences

Other items, net

Earnings before income taxes and equity in loss of investee companies 392 334

Earnings before income taxes and equity in loss of

investee companies

Provision for income taxes

1 unchanged sentence

Net earnings (Parent and noncontrolling interests)

Net earnings attributable to noncontrolling interests ( 7 ) ( 9 )

Net earnings attributable to noncontrolling

Net earnings attributable to Parent

Basic net earnings per common share attributable to Parent $ .15 $ .23

Diluted net earnings per common share attributable to Parent $ .15 $ .22

Weighted average number of common shares outstanding:

Basic 1,110 672

Diluted 1,118 678

Basic net earnings per common share attributable

Diluted net earnings per common share attributable

Weighted average number of common shares

See notes to consolidated financial statements.

1 unchanged sentence

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

Ended June 30,

Net earnings (Parent and noncontrolling interests)

6 unchanged sentences

Comprehensive income

Comprehensive income attributable to noncontrolling interests 7 10

Comprehensive income attributable to

noncontrolling interests

Comprehensive income attributable to Parent

3 unchanged sentences

in millions, except per share amounts)

March 31, 2026 December 31, 2025

June 30, 2026

December 31, 2025

Current Assets:

6 unchanged sentences

Programming and other inventory

Goodwill 1,622 1,600

Intangible assets, net

2 unchanged sentences

Advance consideration for WBD acquisition

Other assets 2,555 2,553

Total Assets $ 44,488 $ 43,342

LIABILITIES AND STOCKHOLDERS’ EQUITY

20 unchanged sentences

Class B Common Stock, par value $ .001 per share;

7,000 ( 2026 ) and 5,500 ( 2025 )

shares authorized;

2 unchanged sentences

Accumulated deficit

Accumulated other comprehensive income (loss) ( 27 ) 59

Accumulated other comprehensive income

Total Parent stockholders’ equity

Noncontrolling interests

Total Equity 12,749 12,887

Total Liabilities and Equity

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

Ended June 30,

Operating Activities:

2 unchanged sentences

Depreciation and amortization

Impairment charges

Deferred tax provision

5 unchanged sentences

Investing Activities:

Investments ( 92 ) ( 73 )

Capital expenditures

5 unchanged sentences

Borrowings under credit facility

Repayment of debt ( 347 ) —

Repayment of credit facility borrowings

Repayment of notes and debentures

Dividends paid on common stock

9 unchanged sentences

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)

Three Months Ended March 31, 2026

Class A and B Common Stock Outstanding Additional Paid-In Capital Accumulated Deficit Accumulated Other Comprehensive Income (Loss) Total Paramount Stockholders’ Equity Noncontrolling Interests Total Equity

(Successor) (Shares)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2026

Class A and B

Comprehensive

Income (Loss)

Stockholders’

Noncontrolling

March 31, 2026

Stock-based compensation activity

Common stock dividends

Noncontrolling interests

Other comprehensive income

June 30, 2026

Six Months Ended June 30, 2026

Class A and B

Comprehensive

Income (Loss)

Stockholders’

Noncontrolling

December 31, 2025

2 unchanged sentences

Noncontrolling interests

Net earnings — — — 168 — 168 7 175

Other comprehensive loss — — — — ( 86 ) ( 86 ) — ( 86 )

Other comprehensive income (loss)

June 30, 2026

See notes to consolidated financial statements.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)

Three Months Ended June 30, 2025

Class A and B

Comprehensive

Income (Loss)

Stockholders’

Noncontrolling

(Predecessor)

March 31, 2025

Three Months Ended March 31, 2025

Class A and B Common Stock Outstanding Additional Paid-In Capital Treasury

Stock Retained Earnings Accumulated Other Comprehensive Loss Total Paramount Stockholders’ Equity Noncontrolling Interests Total Equity

(Predecessor) (Shares)

Stock-based compensation activity

Common stock dividends

Noncontrolling interests

Other comprehensive income

June 30, 2025

Six Months Ended June 30, 2025

Class A and B

Comprehensive

Income (Loss)

Stockholders’

Noncontrolling

(Predecessor)

December 31, 2024

2 unchanged sentences

Noncontrolling interests

Net earnings — — — — 152 — 152 9 161

Other comprehensive income

March 31, 2025 674 $ 1 $ 33,412 $ ( 22,958 ) $ 7,604 $ ( 1,521 ) $ 16,538 $ 390 $ 16,928

June 30, 2025

See notes to consolidated financial statements.

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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, Television, Interactive/Games, and Paramount Sports Entertainment.

Beginning in 2026, we transitioned our reporting structure into three new segments:

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.

References to

“Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Skydance Corporation and its consolidated

subsidiaries, unless the context otherwise requires.

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 WBD Merger is expected to close by the end of the third quarter of 2026, subject to customary closing conditions, including regulatory clearances.

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 December 31, 2025, WBD’s debt (excluding finance leases) was comprised of $ 17.8 billion of senior notes and $ 15.0 billion of borrowings from a bridge facility, which we expect to refinance with the debt commitments discussed below.

Furthermore, a per share “ticking fee” of $ 0.00277778 will be paid upon closing by Paramount to WBD stockholders for every day the WBD Merger is not closed past September 30, 2026, up to a maximum of $ 0.25 per WBD share per 90 calendar day period.

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.

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

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

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 Ticking Consideration, as defined in the WBD Merger Agreement 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 (the “Equity Syndication”) to a group of institutional investors (each, an "Equity Syndication Party"), comprising affiliates of the Ellison Parties and RedBird, 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 cover the full amount committed by the Equity Investors.

At closing, Paramount will issue to each Equity Syndication Party a number of newly issued nonvoting Paramount Skydance Corporation Class B shares (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

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

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

the closing of the WBD Merger, subject to a ceiling of $ 16.02 per share and a floor of $ 12.00 per share.

This syndication does not relieve the Equity Investors of their contractual commitments made to the Company.

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”).

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:

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.

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 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.

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.

We expect to use the committed financing to refinance the $ 15.0 billion WBD bridge facility.

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.

Also in April 2026, we announced that, in lieu of a previously planned rights offering at $ 16.02 per share, 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 any 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 in any 30 consecutive trading day period.

Paramount intends to apply to list the Warrants for trading on Nasdaq separately from the Class B Common Stock, subject to applicable approvals.

If antitrust or regulatory approval for the WBD Merger is not received, Paramount will owe WBD a $ 7.0 billion termination fee.

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 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.

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

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

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

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

The planned Warrant issuance is in lieu of a previously planned rights offering at $ 16.02 per share.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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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”).

proceeds were used to repay the $ 15.0 billion bridge facility WBD had outstanding on March 31, 2026.

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.

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.

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 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.

Shares of Paramount Skydance Corporation Class B Common Stock trade on the Nasdaq Stock Market LLC (“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 hold 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”).

(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

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

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.

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.

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

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 the Annual Report on Form 10-K for the year ended December 31, 2025.

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 restricted share units (“RSUs”) or performance share units only in the periods in which such effect would have been dilutive.

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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

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

Three Months Ended March 31, Three Months Ended March 31,

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.

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

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.

Ended June 30,

(in millions)

Stock options and RSUs

Warrants 200 —

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

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

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

Ended June 30,

(in millions)

Weighted average shares for basic EPS 1,110 672

Dilutive effect of shares issuable under stock-based

Weighted average shares for

Dilutive effect of shares issuable

under stock-based

compensation plans

Weighted average shares for diluted EPS 1,118 678

Weighted average shares for

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 ended December 31, 2027, and for all interim and annual periods thereafter, and may be applied either prospectively or retrospectively.

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 ended 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.

In September 2025, the FASB issued updated guidance on the recognition and disclosure of internal-use software

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

2 unchanged sentences

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.

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)

Cash paid to stockholders (see Note 10)

Proceeds from PIPE Transaction, net of subscription discount

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)

Outstanding Paramount Global RSU Awards and Paramount Global PSU Awards

Remaining shares of Paramount Skydance Corporation Class B Common Stock

Paramount Global basis at August 7, 2025

(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.

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

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

(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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(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 the first quarter of 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.

We continue to evaluate these estimated fair values, in particular those related to programming, intangible assets, and contingencies, which may differ based upon the finalization of appraisals and other valuation analyses, which are expected no later than one year from the August 7, 2025 closing date of the Skydance Transactions and the NAI Transaction.

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.

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

Cash and cash equivalents

3 unchanged sentences

Property and equipment, net (a)

2,118 ( 2 ) 2,116

Programming and other inventory, noncurrent (b)

13,599 ( 347 ) 13,252

947 452 1,399

Intangible assets, net (d)

6,748 8 6,756

Operating lease assets

1 unchanged sentence

Other noncurrent assets

Total assets $ 41,525 $ 104 $ 41,629

Long-term debt (e)

$ 13,619 $ — $ 13,619

Pension and postretirement benefit obligations (f)

1,390 — 1,390

Deferred income tax liabilities, net

306 ( 65 ) 241

Operating lease liabilities

Programming obligations (g)

2,017 ( 54 ) 1,963

Other liabilities (h)

10,137 192 10,329

Total liabilities

Noncontrolling interests (i)

1,249 ( 73 ) 1,176

Paramount Global basis at August 7, 2025

(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.

(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.

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

2 unchanged sentences

(Tabular dollars in millions, except per share amounts)

programming assets of $ 544 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.

(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 $ 2,555 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 prices in active markets.

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.

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

Valuation Method

Estimated weighted

average straight-line

amortization period

FCC and other broadcasting licenses

Greenfield discounted cash

Relief from Royalty

Affiliate relationships

Multi-period excess earnings

Subscriber relationships

Replacement cost

Discounted cash flow

Developed technology

Replacement cost

(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.

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 $ 1.4 billion, which relates principally 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 Note 14).

(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.

3 unchanged sentences

3 ) PROGRAMMING AND OTHER INVENTORY

The following table presents our programming and other inventory at March 31, 2026 and December 31, 2025, grouped by type and predominant monetization strategy.

March 31, 2026 December 31, 2025

The following table presents our programming and other inventory at June 30, 2026 and December 31, 2025 ,

grouped by type and predominant monetization strategy.

June 30, 2026

December 31, 2025

Film Group Monetization:

1 unchanged sentence

Produced television and film programming:

Released 9,145 9,107

In process and other

1 unchanged sentence

Produced television and film programming:

Released 918 1,005

Completed, not yet released

5 unchanged sentences

Total noncurrent programming and other inventory

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

Three Months Ended March 31, Three Months Ended March 31,

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.

Ended June 30,

Licensed program rights

3 unchanged sentences

Film group monetization

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 months ended March 31, 2026 and 2025, we recorded the following within “Restructuring and transaction-related items” on the Consolidated Statements of Operations.

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

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.

Ended June 30,

Severance (a)

Restructuring charges

1 unchanged sentence

Restructuring and transaction-related items

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

(a) Severance costs include the accelerated vesting of stock-based compensation.

Restructuring Charges

During the three months ended March 31, 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 and create cost synergies.

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.

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.

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.

2026 Activity

Balance at December 31, 2025

and other Balance at March 31, 2026

Studios $ 133 $ ( 25 ) $ 108

December 31, 2025

June 30, 2026

Direct-to-Consumer

TV Media 384 ( 113 ) 271

Corporate 135 ( 6 ) 129

Total $ 705 $ ( 158 ) $ 547

Transaction-Related Items

During the three months ended March 31, 2026, we recorded $ 103 million of transaction-related costs, principally for legal, advisory, and other professional fees associated with the planned WBD Merger.

During the three months ended March 31, 2025, we recorded legal, advisory, and other professional fees relating to the Skydance Transactions of $ 20 million.

(a) Excludes stock-based compensation expense of $ 9 million .

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 March 31, 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 47.3 % 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.

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.

David Ellison is the

CEO of Paramount and the Chairman of our Board of Directors.

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 months ended March 31, 2026, we made payments to Oracle totaling $ 2 million.

At March 31, 2026, the amount payable to Oracle was $ 2 million.

In February 2026, we executed a six-year cloud infrastructure services agreement with

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.

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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

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.

At March 31, 2026 and December 31, 2025, the total liability associated with these leases was $ 169 million and $ 174 million, respectively.

During the three months ended March 31, 2026, we recorded lease costs associated with these leases totaling $ 4 million.

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.

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 the terms and conditions of the agreement.

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.

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.

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.

The following tables present the amounts recorded in our consolidated financial statements related to these transactions.

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

Revenues $ 93 $ 69

Operating costs (a)

(a) Each period includes costs expensed as operating expenses and costs capitalized in programming assets.

March 31, 2026 December 31, 2025

Receivables, net $ 207 $ 213

Other assets (Receivables, noncurrent) $ 98 $ 87

Through the normal course of business, we are involved in other transactions with related parties that have not been material in any of the periods presented.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The tables below present 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

Three Months Ended March 31, Three Months Ended March 31,

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.

The table below presents our revenues disaggregated into categories based on the nature of such revenues.

Note 13 for revenues by segment disaggregated into these categories.

Ended June 30,

Revenues by Type:

Advertising $ 2,442 $ 2,513

Affiliate and subscription

Theatrical 152 148

Licensing and other

Total Revenues

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 March 31, 2026 and December 31, 2025, our allowance for credit losses was $ 9 million and $ 10 million, respectively.

Included in “Other assets” on the Consolidated Balance Sheets are noncurrent receivables of $ 778 million and $ 835 million at March 31, 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 $ 1.5 billion at both March 31, 2026 and December 31, 2025.

We recognized revenues of $ 0.7 billion and $ 0.4 billion for the three months ended March 31, 2026 (Successor) and 2025 (Predecessor), respectively, that were included in the opening balance of deferred revenues for the respective year.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

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.

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 March 31, 2026, unrecognized revenues attributable to unsatisfied performance obligations under our long-term contracts were approximately $ 6 billion, of which $ 3 billion is expected to be recognized during the remainder of 2026, $ 2 billion in 2027, and $ 1 billion in 2028.

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.

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

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.

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 revenue of $ 0.1 billion and $ 0.2 billion for the three months ended March 31, 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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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Our debt consists of the following:

March 31, 2026 December 31, 2025

June 30, 2026

December 31, 2025

4.0 % Senior Notes due 2026

26 unchanged sentences

Total debt (a)

15,483 13,658

Less current portion

Total long-term debt, net of current portion

(a) At March 31, 2026 and December 31, 2025, our total senior and junior debt was net of unamortized fair value adjustments of $ 1.30 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 March 31, 2026 and December 31, 2025 was $ 16.78 billion and $ 14.98 billion , respectively.

(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.

In January 2026, we repaid our $ 347 million of 4.0 % senior notes at maturity.

Commercial Paper

At both March 31, 2026 and December 31, 2025, we had no outstanding commercial paper borrowings.

At both June 30, 2026 and December 31, 2025 , we had no outstanding commercial paper borrowings.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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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, which remained outstanding at March 31, 2026, at an interest rate of 5.39 % based on SOFR on the borrowing date plus 1.625 %.

The remaining availability under the Credit Facility at March 31, 2026 was $ 1.35 billion, and at May 1, 2026 was $ 2.85 billion.

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.

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 March 31, 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 March 31, 2026.

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

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.

the covenant as of June 30, 2026 .

Other Bank Borrowings

At both March 31, 2026 and December 31, 2025, there were no outstanding bank borrowings under Miramax’s $ 50 million credit facility that matures in November 2027.

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 March 31, 2026 and December 31, 2025, the carrying value of our outstanding notes and debentures was $ 13.33 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 $ 11.4 billion and $ 13.2 billion, respectively.

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 March 31, 2026 and December 31, 2025, respectively.

These investments are included in “Other assets” on the Consolidated Balance Sheets.

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.

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.

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.

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 denominated assets, liabilities, and cash flows.

The maximum period we are hedging our exposure to variability in future cash flows is 4.9 years.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

At March 31, 2026 and December 31, 2025, the notional amount of all foreign exchange contracts was $ 6.76 billion and $ 3.14 billion, respectively.

At March 31, 2026, $ 6.32 billion related to future production and licensing of content and $ 435 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.

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.

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

2026 2025 Financial Statement Account

Non-designated foreign exchange contracts $ 5 $ ( 9 ) Other items, net

Designated cash flow hedges $ ( 48 ) $ 8 Other comprehensive income (loss)

I n April 2026, we entered into interest rate agreements with an aggregate notional amount of $ 8.0 billion in connection with anticipated debt issuances associated with the WBD Merger and future debt refinancing.

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.

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.

Ended June 30,

Cash flow hedges

Foreign exchange contracts

Interest rate contracts

Non-designated hedges

Foreign exchange contracts

Interest rate contracts

Fair Value Measurements

The table below presents our assets and liabilities measured at fair value on a recurring basis at March 31, 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.

March 31, 2026 December 31, 2025

Foreign currency hedges $ 36 $ 38

Total Assets $ 36 $ 38

Deferred compensation $ 270 $ 312

Foreign currency hedges 72 28

Total Liabilities $ 342 $ 340

Level 3 inputs were used in determining Paramount Global’s net assets at the Ultimate Parent’s basis (see Note 2).

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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

June 30, 2026

December 31, 2025

Foreign exchange contracts

Interest rate contracts

Deferred compensation

Foreign exchange contracts

Interest rate contracts

Total Liabilities

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.

March 31, 2026 December 31, 2025

Total assets $ 853 $ 1,193

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.

June 30, 2026

December 31, 2025

Total liabilities

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

Revenues $ 94 $ 125

Ended June 30,

Operating income (loss)

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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 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.

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

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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(Tabular dollars in millions, except per share amounts)

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.

(in millions) Class A Class B

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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

(in millions)

Each share of Paramount Global Class A Common Stock converted

11 unchanged sentences

to holders of Skydance Membership Units and Skydance Phantom

Unit awards 313.8

Total share issuance, net of cancellations

2 unchanged sentences

Transactions on August 7, 2025

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;

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

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

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.

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

Common Stock Dividends

The following table presents dividends declared per share and total dividends for Paramount Skydance Corporation Class B Common Stock for the Successor period and Paramount Global’s Class A and Class B Common Stock for the Predecessor period.

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

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.

Ended June 30,

Class A and Class B Common Stock

1 unchanged sentence

Total common stock dividends

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

Adjustments Net Actuarial

The following tables summarize the changes in the components of accumulated other comprehensive income

Net Actuarial

Gain and Prior

Service Cost Cash Flow Hedges Accumulated

Comprehensive Income (Loss)

Comprehensive

Income (Loss)

At December 31, 2025

1 unchanged sentence

reclassifications

At March 31, 2026 $ ( 10 ) $ 19 $ ( 36 ) $ ( 27 )

(Predecessor) Cumulative

Adjustments Net Actuarial

At June 30, 2026

(Predecessor)

Net Actuarial

Loss and Prior

Service Cost Cash Flow Hedges Accumulated

Comprehensive Loss

Comprehensive

Income (Loss)

At December 31, 2024

1 unchanged sentence

reclassifications

Reclassifications to net earnings — 10 (a)

Reclassifications to net earnings

Other comprehensive income

At March 31, 2025 $ ( 603 ) $ ( 937 ) $ 19 $ ( 1,521 )

At June 30, 2025

( 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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular dollars in millions, except per share amounts)

The cash flow hedges included in other comprehensive income (loss) are net of a tax benefit of $ 12 million and tax expense of $ 2 million for the three months ended March 31, 2026 (Successor) and March 31, 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 $ 3 million for the three months ended March 31, 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 months ended March 31, 2026 (Successor), we recorded a provision for income taxes of $ 155 million, reflecting an effective income tax rate of 39.5 %.

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 6.2 percentage points.

Impact from Items Affecting Comparability

Three Months Ended March 31, 2026

Earnings Before Income Taxes Benefit from Income Taxes

Three Months Ended June 30, 2026

Six Months Ended June 30, 2026

Earnings (Loss)

Before Income

(Provision for)

(Loss) Before

(Provision for)

Restructuring charges (Note 4 )

Transaction-related items (Note 4 )

$ ( 103 ) $ 6

Net discrete tax benefit

n/a - not applicable

For the three months ended March 31, 2025 (Predecessor), we recorded a provision for income taxes of $ 100 million, reflecting an effective income tax rate of 29.9 %.

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

Three Months Ended March 31, 2025

Earnings (Loss) Before Income Taxes Benefit from (Provision for) Income Taxes

Three Months Ended June 30, 2025

Six Months Ended June 30, 2025

Earnings (Loss)

Before Income

(Provision for)

Earnings (Loss)

Before Income

(Provision for)

Impairment charges (Note 15)

Restructuring charges (Note 4 )

$ ( 65 ) $ 16

Transaction-related items (Note 4)

Gain from dispositions

Net discrete tax provision n/a $ ( 7 )

Net discrete tax provision

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

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

2 unchanged sentences

12 ) PENSION AND OTHER POSTRETIREMENT BENEFITS

The following table presents 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 March 31, Three Months Ended March 31, Three Months Ended March 31, Three Months Ended March 31,

2026 2025 2026 2025

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

Ended June 30,

Components of net periodic

Interest cost

Expected return on plan

Amortization of actuarial

loss (gain) (b)

Net periodic cost

Pension Benefits

Postretirement Benefits

Ended June 30,

Components of net periodic cost (a) :

7 unchanged sentences

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 Gordon.

Beginning in 2026, we transitioned our reporting structure into three new segments:

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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(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, 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 first quarter of 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, Television, and Interactive/Games, and Paramount Sports Entertainment.

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+, Pluto TV, and BET+, as well as our domestic premium cable network, Paramount+ with Showtime.

For the Predecessor period, the Direct-to Consumer segment excluded Paramount+ with Showtime.

• TV Media— Our TV Media segment consists of our (1) broadcast operations—the CBS Television Network, our domestic broadcast television network;

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;

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;

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

provision for (benefit from) income taxes;

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.

equity in earnings (loss) of investee companies, net

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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular dollars in millions, except per share amounts)

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

Studios Filmed Entertainment

Theatrical $ 152 Theatrical $ 148

Licensing and other 1,127 Licensing and other 476

Advertising 4 Advertising 3

Studios 1,283 Filmed Entertainment 627

Direct-to-Consumer Direct-to-Consumer

Advertising 517 Advertising 473

Affiliate and subscription 1,881 Subscription 1,571

Direct-to-Consumer 2,398 Direct-to-Consumer 2,044

TV Media TV Media

Advertising 1,921 Advertising 2,038

Affiliate and subscription 1,620 Affiliate and subscription 1,826

Licensing and other 125 Licensing and other 674

TV Media 3,666 TV Media 4,538

Eliminations — Eliminations ( 17 )

Total Revenues $ 7,347 Total Revenues $ 7,192

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.

Three Months Ended March 31,

Ended June 30,

Filmed Entertainment

Licensing and other

Filmed Entertainment

Direct-to-Consumer

Affiliate and subscription

Direct-to-Consumer

Affiliate and subscription

Licensing and other

Total Revenues

Ended June 30,

Filmed Entertainment

Licensing and other

Filmed Entertainment

Direct-to-Consumer

Affiliate and subscription

Direct-to-Consumer

Affiliate and subscription

Licensing and other

Total Revenues

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.

Ended June 30,

Intercompany Revenues:

TV Media $ 11

Filmed Entertainment

3 unchanged sentences

(Tabular dollars in millions, except per share amounts)

Successor Predecessor

Three Months Ended March 31, Three Months Ended March 31,

Studios Filmed Entertainment

Revenues $ 1,283 Revenues $ 627

Content costs 816 Content costs 321

Advertising and marketing 100 Advertising and marketing 116

203 Other (a)

Total segment expenses 1,119 Total segment expenses 607

Studios Adjusted EBITDA 164 Filmed Entertainment Adjusted OIBDA 20

Direct-to-Consumer Direct-to-Consumer

Revenues 2,398 Revenues 2,044

Content costs 1,246 Content costs 1,215

Advertising and marketing 315 Advertising and marketing 341

586 Other (b)

Total segment expenses 2,147 Total segment expenses 2,153

Direct-to-Consumer Adjusted EBITDA 251 Direct-to-Consumer Adjusted OIBDA ( 109 )

TV Media TV Media

Revenues 3,666 Revenues 4,538

Content costs 1,719 Content costs 2,343

Advertising and marketing 80 Advertising and marketing 153

812 Other (c)

Total segment expenses 2,611 Total segment expenses 3,616

TV Media Adjusted EBITDA 1,055 TV Media Adjusted OIBDA 922

Corporate/Eliminations ( 309 ) Corporate/Eliminations ( 101 )

Stock-based compensation ( 80 ) Stock-based compensation ( 44 )

Depreciation and amortization ( 362 ) Depreciation and amortization ( 88 )

Transaction-related items ( 103 ) Restructuring and transaction-related items ( 85 )

Gain on dispositions — Gain on dispositions 35

Operating income 616 Operating income 550

Interest expense ( 238 ) Interest expense ( 217 )

Interest income 38 Interest income 38

Other items, net ( 24 ) Other items, net ( 37 )

Ended June 30,

Filmed Entertainment

Content costs

Advertising and marketing

Total segment expenses

Studios Adjusted EBITDA

Filmed Entertainment Adjusted OIBDA

Direct-to-Consumer

Content costs

Advertising and marketing

Total segment expenses

Direct-to-Consumer Adjusted EBITDA

Direct-to-Consumer Adjusted OIBDA

Content costs

Advertising and marketing

Total segment expenses

TV Media Adjusted EBITDA

TV Media Adjusted OIBDA

Corporate/Eliminations

Stock-based compensation (d)

Depreciation and amortization

Impairment charges

Restructuring and transaction-related items (d)

Operating income

Interest expense

Interest income

Other items, net

Earnings before income taxes and equity in

loss of investee companies 392 Earnings before income taxes and equity in

loss of investee companies

Provision for income taxes ( 155 ) Provision for income taxes ( 100 )

Earnings before income taxes and equity in

loss of investee companies

Provision for income taxes

Equity in loss of investee companies,

net of tax ( 62 ) Equity in loss of investee companies,

net of tax ( 73 )

(Parent and noncontrolling interests) 175 Net earnings

Equity in loss of investee companies,

(Parent and noncontrolling interests)

Net earnings attributable to noncontrolling

interests ( 7 ) Net earnings attributable to noncontrolling

interests ( 9 )

Net earnings attributable to Parent $ 168 Net earnings attributable to Parent $ 152

(a) Other segment expenses for our Studios segment (Successor) and Filmed Entertainment segment (Predecessor) include employee compensation;

Net earnings attributable to noncontrolling

Net earnings attributable to Parent

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Ended June 30,

Filmed Entertainment

Content costs

Advertising and marketing

Total segment expenses

Studios Adjusted EBITDA

Filmed Entertainment Adjusted OIBDA

Direct-to-Consumer

Content costs

Advertising and marketing

Total segment expenses

Direct-to-Consumer Adjusted EBITDA

Direct-to-Consumer Adjusted OIBDA

Content costs

Advertising and marketing

Total segment expenses

TV Media Adjusted EBITDA

TV Media Adjusted OIBDA

Corporate/Eliminations

Stock-based compensation (d)

Depreciation and amortization

Impairment charges

Restructuring and transaction-related items (d)

Gain on dispositions

Operating income

Interest expense

Interest income

Other items, net

Earnings before income taxes and equity in

loss of investee companies

Earnings before income taxes and equity in

loss of investee companies

Provision for income taxes

Equity in loss of investee companies,

(Parent and noncontrolling interests)

Net earnings attributable to noncontrolling

Net earnings attributable to Parent

(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.

other costs associated with our operations.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(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;

(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;

costs for occupancy, technology, and professional

and other costs associated with our operations.

1 unchanged sentence

revenue-sharing costs to television stations affiliated with the CBS Television Network;

costs relating to the distribution of our content;

costs relating to the distribution of our

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

14 ) COMMITMENTS AND CONTINGENCIES

Letters of Credit and Surety Bonds

At March 31, 2026, we had outstanding letters of credit and surety bonds of $ 2.06 billion that were not recorded on the Consolidated Balance Sheet, including $ 1.82 billion 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).

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.

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.

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

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, 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.

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

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, Donna Nicosia, a purported holder of WBD common stock, filed an action in the Supreme Court of the State of New York, County of Richmond, against WBD, certain directors and officers of WBD, Paramount and other defendants (the “Nicosia Action”).

The complaint arises out of the proposed WBD Merger and alleges, among other things, that the defendants disseminated a proxy statement in connection with the proposed WBD Merger that allegedly contains materially false and misleading statements and omissions concerning the transaction process, the valuation of WBD, and alleged conflicts of interest of WBD’s directors and financial advisors.

The complaint asserts claims under New York common law for negligent misrepresentation, concealment, and negligence and seeks declaratory and injunctive relief, including an order enjoining the closing of the stockholder vote on the proposed transaction unless and until supplemental disclosures are made.

On April 16, 2026, the parties

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’

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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entered into an agreement that resolved plaintiffs’ claims as to all defendants, and pursuant to which plaintiff agreed to discontinue the litigation with prejudice.

Also 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.

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.

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.

In addition, we received a demand letter from a purported holder 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 financing of the WBD Merger.

Following the issuance of the Second Request by the Antitrust Division of the U.S.

Department of Justice (“DOJ”) in December 2025, the Company received subpoenas (or Civil Investigative Demands (“CIDs”)) from various state attorneys general in connection with the WBD Merger.

These subpoenas (or CIDs) relate to state investigations of the WBD Merger, with a particular focus on the DOJ’s investigation and the competitive effects of the WBD Merger.

We have been cooperating with the state attorneys general in responding to their requests.

2026, the case was reassigned to Judge Araceli Martinez-Olguin from Magistrate Judge Peter H.

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.

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

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.

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.

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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.

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

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 of 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.

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.

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

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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.

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.

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.

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 filed a Notice of Appeal in November 2025, and in April 2026, the appeal was dismissed.

On April 30, 2026, LiveVideo.AI Corp.

moved to reinstate the appeal.

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.

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.

2026, following briefing, the Court granted defendants’ motion for sanctions against LiveVideo.AI Corp.

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.

(“Gabelli”) filed a putative class action complaint in the Court of

Chancery of the State of Delaware against Barbara M.

Byrne, Linda M.

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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.

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.

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.

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

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.

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 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.

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

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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

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 matter is in discovery.

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 and took the matter under advisement.

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

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.

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.

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 filed complaints alleging infringement of patents related to video streaming against Paramount and related entities in the United States, Brazil, Germany and the Unified Patent Court 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”) seeking a determination of terms for a reasonable and non-discriminatory global license to relevant Nokia patents, including standard essential patents related to the H.265/HEVC standard.

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

In November 2025, Paramount filed a rate-setting action against Nokia in the High Court of Justice of

England and Wales (“U.K.

In March 2026, Nokia submitted to the jurisdiction of the U.K.

Court and dismissed its complaints against Paramount in all other jurisdictions.

Claims Related to Former Businesses

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

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.

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular dollars in millions, except per share amounts)

Claims Related to Former Businesses

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

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 March 31, 2026, we had pending approximately 18,050 asbestos claims, as compared with approximately 17,490 as of December 31, 2025.

During the first quarter of 2026, we received approximately 830 new claims and closed or moved to an inactive docket approximately 270 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.

majority of asbestos lawsuits, the plaintiffs have not identified which of our products is the basis of a claim.

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.

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

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.

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 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

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

PARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES

1 unchanged sentence

(Tabular dollars in millions, except per share amounts)

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.

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

Three Months Ended March 31, Three Months Ended March 31,

Ended June 30,

Cash paid for interest

Cash paid (received) for income taxes $ ( 34 ) $ 27

Cash (received) paid for income taxes

Noncash additions to operating lease assets

Discovery Merger—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 March 31, 2026 and within Investing Activities on the Consolidated Statement of Cash Flows for the three months ended March 31, 2026.

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 .

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 $ 9 million for the three months ended March 31, 2026 (Successor) and March 31, 2025 (Predecessor), respectively.

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.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements