Skydance pays about $78B for Warner Bros. Discovery shares
Certain Class B holders received approximately 470.7 million 10-year warrants, each initially exercisable at $12.00 per share.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
10-Q
Skydance Corporation (SKYD) completed its acquisition of Warner Bros. Discovery, Inc. on October 6, 2026. Skydance paid $31.00 per WBD share plus a per-share ticking fee of $0.00277778 for each calendar day elapsed after September 30, 2026 through and including closing. Cash paid to WBD stockholders for common stock was approximately $77.95 billion; preliminary total purchase consideration was $97.402 billion.
Skydance issued 3,918 million nonvoting Class B shares at $12.00 per share for gross proceeds of $47.01 billion, and issued or assumed $72.1 billion of debt in connection with the merger. At September 30, before closing, cash and cash equivalents were $1.377 billion. Initial purchase accounting for the acquisition remained incomplete.
For the three months ended September 30, revenue was $7.025 billion and net earnings attributable to the parent were $73 million; operating cash flow was $627 million for the nine months ended September 30. Skydance says successor and predecessor results are not comparable because the 2025 transactions created a new accounting basis.
0 points · 0 major1 major · 1 point
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- None.
Negative
- Major point$72.1 billion of debt issued or assumed in connection with the WBD merger. 1.6× market cap
Filing Explained
The issued warrants create a conditional route to more Class B shares: 470.7 million could be purchased at twelve dollars each.
On
Each warrant can be exercised to buy one Class B share for
The company says initial accounting for the WBD purchase is incomplete: acquisition-date amounts for assets acquired and liabilities assumed, and pro forma revenue and earnings for the combined company, are not yet available, and it says it will provide those disclosures in its 2026 Form 10-K.
Key Figures
Revenue: $7.025 billion
Net earnings attributable to parent: $73 million
Operating cash flow: $627 million
+5 more
8 metrics
Revenue
$7.025 billion
Three months ended September 30, 2026
Net earnings attributable to parent
$73 million
Three months ended September 30, 2026
Operating cash flow
$627 million
Nine months ended September 30, 2026
Cash paid to WBD stockholders
Approximately $77.95 billion
For WBD common stock outstanding, inclusive of Ticking Consideration
Preliminary total purchase consideration
$97.402 billion
WBD Merger
Gross equity proceeds
$47.01 billion
Class B shares issued in connection with the WBD Merger
Debt issued or assumed
$72.1 billion
In connection with the WBD Merger
Class B shares issued
3,918 million shares
In connection with the WBD Merger
Key Terms
Ticking Consideration, Syndication Purchase Price, Term SOFR, two-class method of EPS, +1 more
5 terms
Ticking Consideration financial
"the “Ticking Consideration” multiplied by the number of calendar days elapsed"
Syndication Purchase Price financial
"divided by the Syndication Purchase Price"
Term SOFR financial
"benchmark rate for loans denominated in U.S. dollars is Term SOFR"
Term SOFR is a benchmark interest rate that reflects the cost of borrowing money over a specific period, based on actual transactions in the financial markets. It is used by lenders and borrowers to set the interest rates on loans and financial contracts, helping to ensure rates are fair and transparent. For investors, understanding term SOFR helps gauge borrowing costs and the overall direction of interest rates in the economy.
two-class method of EPS financial
"application of the two-class method of EPS"
Second Lien Exchange Notes financial
"issued $11.98 billion aggregate principal amount of dollar-denominated Second Lien Exchange Notes"
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much did SKYD pay WBD stockholders for the acquisition?
Skydance paid approximately $77.95 billion in cash to WBD stockholders for outstanding common stock. The agreement set consideration at $31.00 per share plus a per-share ticking fee of $0.00277778 for each calendar day elapsed after September 30, 2026 through and including October 6, 2026. Preliminary total purchase consideration was $97.402 billion.
How do SKYD's new Class B warrants work?
On October 13, 2026, eligible holders of Class B common stock as of October 5 received one 10-year warrant per share without payment; approximately 470.7 million warrants were issued. Each has an initial $12.00 exercise price. Beginning on the third anniversary, Skydance may designate an earlier expiration if the closing price equals or exceeds $30.00 for at least 20 trading days during any 30 consecutive trading-day period.
AI-generated analysis. How Rhea-AI works. Not financial advice.
See more from StockTitan in Google Search and AI answers.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission File Number 001-42791
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
(Address of principal executive offices) | (Zip Code) | |||
(212 ) 258-6000
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and
“emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ | Accelerated filer | ☐ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of common stock outstanding at November 4, 2026:
Class A Common Stock, par value $.001 per share— 31,500,087
Class B Common Stock, par value $.001 per share— 5,012,722,281
SKYDANCE CORPORATION
INDEX TO FORM 10-Q
Page | ||
PART I – FINANCIAL INFORMATION | ||
Item 1. | Financial Statements. | |
Consolidated Statements of Operations (Unaudited) | 3 | |
Consolidated Statements of Comprehensive Income (Unaudited) | 4 | |
Consolidated Balance Sheets (Unaudited) | 5 | |
Consolidated Statements of Cash Flows (Unaudited) | 6 | |
Consolidated Statements of Stockholders’ Equity (Unaudited) | 7 | |
Notes to Consolidated Financial Statements (Unaudited) | 9 | |
Item 2. | Management’s Discussion and Analysis of Results of Operations and Financial Condition. | 55 |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 106 |
Item 4. | Controls and Procedures. | 106 |
PART II – OTHER INFORMATION | ||
Item 1. | Legal Proceedings. | 107 |
Item 1A. | Risk Factors. | 107 |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 114 |
Item 6. | Exhibits. | 115 |
-3-
PART I – FINANCIAL INFORMATION
Item 1. | Financial Statements. |
SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; in millions, except per share amounts)
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||
Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||
Costs and expenses: | |||||||||||||||||||||
Operating | |||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||
Impairment charges | |||||||||||||||||||||
Restructuring and transaction-related items | |||||||||||||||||||||
Total costs and expenses | |||||||||||||||||||||
Gain on dispositions | |||||||||||||||||||||
Operating income | |||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ( | ( | |||||||||||||||
Interest income | |||||||||||||||||||||
Net gain on derivatives | |||||||||||||||||||||
Other items, net | ( | ( | ( | ( | ( | ( | |||||||||||||||
Earnings (loss) before income taxes and equity in loss of investee companies | ( | ||||||||||||||||||||
(Provision for) benefit from income taxes | ( | ( | ( | ( | |||||||||||||||||
Equity in loss of investee companies, net of tax | ( | ( | ( | ( | ( | ( | |||||||||||||||
Net earnings (Parent and noncontrolling interests) | |||||||||||||||||||||
Net earnings attributable to noncontrolling interests | ( | ( | ( | ( | ( | ( | |||||||||||||||
Net earnings (loss) attributable to Parent | $ | $( | $( | $ | $( | $( | |||||||||||||||
Basic net earnings (loss) per common share attributable to Parent | $ | $( | $( | $ | $( | $( | |||||||||||||||
Diluted net earnings (loss) per common share attributable to Parent | $ | $( | $( | $ | $( | $( | |||||||||||||||
Weighted average number of common shares outstanding: | |||||||||||||||||||||
Basic | |||||||||||||||||||||
Diluted | |||||||||||||||||||||
See notes to consolidated financial statements.
-4-
SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited; in millions)
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Net earnings (Parent and noncontrolling interests) | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||||
Cumulative translation adjustments | ( | ( | ( | ||||||||||||||||||||||
Cash flow hedges | ( | ( | ( | ||||||||||||||||||||||
Decrease to net actuarial loss and prior service costs | |||||||||||||||||||||||||
Other comprehensive income (loss), net of tax (Parent and noncontrolling interests) | ( | ||||||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||||
Less: Comprehensive income attributable to noncontrolling interests | |||||||||||||||||||||||||
Comprehensive income (loss) attributable to Parent | $ | $ | $( | $ | $ | $ | |||||||||||||||||||
See notes to consolidated financial statements.
-5-
SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited; in millions, except per share amounts)
At | At | ||||||
September 30, 2026 | December 31, 2025 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | $ | |||||
Receivables, net | |||||||
Programming and other inventory | |||||||
Prepaid expenses and other current assets | |||||||
Total current assets | |||||||
Property and equipment, net | |||||||
Programming and other inventory | |||||||
Goodwill | |||||||
Intangible assets, net | |||||||
Operating lease assets | |||||||
Deferred income tax assets, net | |||||||
Advance consideration for WBD acquisition | |||||||
Other assets | |||||||
Total Assets | $ | $ | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable | $ | $ | |||||
Accrued expenses | |||||||
Participants’ share and royalties payable | |||||||
Accrued programming and production costs | |||||||
Deferred revenues | |||||||
Debt | |||||||
Other current liabilities | |||||||
Total current liabilities | |||||||
Long-term debt | |||||||
Participants’ share and royalties payable | |||||||
Pension and postretirement benefit obligations | |||||||
Deferred income tax liabilities, net | |||||||
Operating lease liabilities | |||||||
Programming obligations | |||||||
Other liabilities | |||||||
Commitments and contingencies (Note 15) | |||||||
Parent stockholders’ equity: | |||||||
Class A Common Stock, par value $ | |||||||
Class B Common Stock, par value $ shares authorized; | |||||||
Additional paid-in capital | |||||||
Accumulated deficit | ( | ( | |||||
Accumulated other comprehensive income | |||||||
Total Parent stockholders’ equity | |||||||
Noncontrolling interests | |||||||
Total Equity | |||||||
Total Liabilities and Equity | $ | $ | |||||
See notes to consolidated financial statements.
-6-
SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; in millions)
Successor | Predecessor | |||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||
2026 | 2025 | 2025 | ||||||||||
Operating Activities: | ||||||||||||
Net earnings (Parent and noncontrolling interests) | $ | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash flow provided by operating activities: | ||||||||||||
Depreciation and amortization | ||||||||||||
Impairment charges | ||||||||||||
Deferred tax provision (benefit) | ( | |||||||||||
Stock-based compensation | ||||||||||||
Gain on dispositions | ( | |||||||||||
Net gain on derivatives | ( | |||||||||||
Equity in loss of investee companies, net of tax and distributions | ||||||||||||
Change in assets and liabilities | ( | ( | ( | |||||||||
Net cash flow provided by operating activities | ||||||||||||
Investing Activities: | ||||||||||||
Investments | ( | ( | ( | |||||||||
Capital expenditures | ( | ( | ( | |||||||||
Advance consideration for WBD acquisition | ( | |||||||||||
Proceeds from dispositions | ||||||||||||
Other investing activities | ( | ( | ||||||||||
Net cash flow used for investing activities | ( | ( | ( | |||||||||
Financing Activities: | ||||||||||||
Borrowings under credit facility | ||||||||||||
Repayment of credit facility borrowings | ( | |||||||||||
Repayment of notes and debentures | ( | |||||||||||
Repayment of Skydance Media credit facility | ( | |||||||||||
Dividends paid on common stock | ( | ( | ( | |||||||||
Payment of payroll taxes in lieu of issuing shares for stock-based compensation | ( | ( | ( | |||||||||
Payments to noncontrolling interests | ( | ( | ( | |||||||||
Other financing activities | ( | ( | ||||||||||
Net cash flow provided by (used for) financing activities | ( | ( | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||
Net decrease in cash and cash equivalents | ( | ( | ( | |||||||||
Cash and cash equivalents at beginning of period (Note 16) | ||||||||||||
Cash and cash equivalents at end of period (Note 16) | $ | $ | $ | |||||||||
See notes to consolidated financial statements.
-7-
SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(Unaudited; in millions)
Three Months Ended September 30, 2026 | |||||||||||||||||||||||
Class A and B Common Stock Outstanding | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Parent Stockholders’ Equity | Noncontrolling Interests | Total Equity | |||||||||||||||||
(Successor) | (Shares) | ||||||||||||||||||||||
June 30, 2026 | $ | $ | $( | $ | $ | $ | $ | ||||||||||||||||
Stock-based compensation activity | — | — | — | — | |||||||||||||||||||
Common stock dividends | — | — | ( | — | — | ( | — | ( | |||||||||||||||
Noncontrolling interests | — | — | — | — | — | ( | ( | ||||||||||||||||
Net earnings | — | — | — | — | |||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||
September 30, 2026 | $ | $ | $( | $ | $ | $ | $ | ||||||||||||||||
Nine Months Ended September 30, 2026 | ||||||||||||||||||||||||
Class A and B Common Stock Outstanding | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Total Parent Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||
(Successor) | (Shares) | |||||||||||||||||||||||
December 31, 2025 | $ | $ | $( | $ | $ | $ | $ | |||||||||||||||||
Stock-based compensation activity and other | — | — | — | — | ||||||||||||||||||||
Common stock dividends | — | — | ( | — | — | ( | — | ( | ||||||||||||||||
Noncontrolling interests | — | — | ( | — | — | ( | ( | ( | ||||||||||||||||
Net earnings | — | — | — | — | ||||||||||||||||||||
Other comprehensive income | — | — | — | — | ||||||||||||||||||||
September 30, 2026 | $ | $ | $( | $ | $ | $ | $ | |||||||||||||||||
See notes to consolidated financial statements.
-8-
SKYDANCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)
(Unaudited; in millions)
Three Months Ended September 30, 2025 | |||||||||||||||||||||||||
Class A and B Common Stock Outstanding | Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Parent Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||
(Shares) | |||||||||||||||||||||||||
June 30, 2025 (Predecessor) | $ | $ | $( | $ | $( | $ | $ | $ | |||||||||||||||||
Stock-based compensation activity | — | — | — | — | — | ||||||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | ||||||||||||||||||
Net earnings (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | ( | ( | ( | ( | ||||||||||||||||
Cancellation of treasury stock (Note 11) | — | — | ( | — | — | — | — | ||||||||||||||||||
August 6, 2025 (Predecessor) | ( | ||||||||||||||||||||||||
Adjustments to Paramount Global’s basis (Note 3) | — | — | ( | — | ( | ( | ( | ||||||||||||||||||
Skydance Transactions PIPE (Note 11) | — | — | — | — | — | ||||||||||||||||||||
Addition of Skydance Media | — | — | ( | — | — | ||||||||||||||||||||
August 7, 2025 (Successor) | ( | ||||||||||||||||||||||||
Stock-based compensation activity | — | — | — | — | — | ||||||||||||||||||||
Common stock dividends | — | — | ( | — | — | — | ( | — | ( | ||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||
Net earnings (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||
September 30, 2025 (Successor) | $ | $ | $ | $( | $ | $ | $ | $ | |||||||||||||||||
Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||
Class A and B Common Stock Outstanding | Additional Paid-In Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total Parent Stockholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||
(Shares) | |||||||||||||||||||||||||
December 31, 2024 (Predecessor) | $ | $ | $( | $ | $( | $ | $ | $ | |||||||||||||||||
Stock-based compensation activity | — | — | — | — | — | ||||||||||||||||||||
Common stock dividends | — | — | — | — | ( | — | ( | — | ( | ||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||
Net earnings (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||
Cancellation of treasury stock (Note 11) | — | — | ( | — | — | — | — | ||||||||||||||||||
August 6, 2025 (Predecessor) | ( | ||||||||||||||||||||||||
Adjustments to Paramount Global’s basis (Note 3) | — | — | ( | — | ( | ( | ( | ||||||||||||||||||
Skydance Transactions PIPE (Note 11) | — | — | — | — | — | ||||||||||||||||||||
Addition of Skydance Media | — | — | ( | — | — | ||||||||||||||||||||
August 7, 2025 (Successor) | ( | ||||||||||||||||||||||||
Stock-based compensation activity | — | — | — | — | — | ||||||||||||||||||||
Common stock dividends | — | — | ( | — | — | — | ( | — | ( | ||||||||||||||||
Noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||
Net earnings (loss) | — | — | — | — | ( | — | ( | ||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||
September 30, 2025 (Successor) | $ | $ | $ | $( | $ | $ | $ | $ | |||||||||||||||||
See notes to consolidated financial statements.
-9-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular amounts in millions, except per share amounts)
1) DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business— Skydance Corporation is a global media and entertainment company. Prior to the WBD
Merger in October 2026 (as defined and described below), and throughout the period covered by these financial
statements, our portfolio of brands included Paramount, Paramount+, Pluto TV, CBS, CBS Sports, Nickelodeon,
MTV, BET, and Comedy Central. Following the WBD Merger our portfolio also includes Warner Bros., HBO and
HBO Max, CNN, TNT Sports, Cartoon Network, Food Network, and HGTV. Beginning in 2026, we transitioned
our reporting structure into three
Warner Bros. Discovery Merger (Subsequent Event)—On October 6, 2026 (the “Closing Date”), we completed the
acquisition (the “WBD Merger”) of Warner Bros. Discovery, Inc. (“WBD”) pursuant to the previously announced
definitive merger agreement (the “WBD Merger Agreement”). See Notes 2, 8 and 11. Also on October 6, 2026, in
connection with the WBD Merger, we amended our certificate of incorporation (the “charter amendment”) to,
among other things, change our name from Paramount Skydance Corporation to Skydance Corporation. References
herein to “Skydance,” “Skydance Corporation” or the “Company” refer, prior to such charter amendment, to
Paramount Skydance Corporation, and following such charter amendment to Skydance Corporation, unless the
context otherwise requires reference to Paramount Skydance Corporation. Effective October 6, 2026, shares of
Skydance Corporation Class B Common Stock trade on the New York Stock Exchange (“NYSE”) under the
trading symbol “SKYD.”
The NAI Transaction and the Skydance Transactions—On August 7, 2025, pursuant to a purchase and sale
agreement dated July 7, 2024, certain affiliates of investors in Skydance Media, LLC (“Skydance Media”),
comprised of entities controlled by the Ellison Family (as defined below) 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”). 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 Media 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. and now
known as Skydance Corporation, was formed on June 3, 2024 to consummate the Skydance 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 Media as part of the Skydance Transactions. See Note 3.
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 Skydance Corporation Class A Common Stock.
Holders of shares of Class A common stock of Skydance Corporation (“Skydance Corporation Class A Common
Stock”) are entitled to one vote per share with respect to all matters on which the holders of Skydance Corporation
common stock are entitled to vote. Holders of Skydance Corporation Class B Common Stock do not have voting
rights. Accordingly, entities controlled by the Ellison Family (as defined below) indirectly hold approximately
interest in Harbor Lights Entertainment, Inc., and as a result the Ellison Family is the controlling stockholder and
the ultimate parent of the Company (“Ultimate Parent”). For the purpose of determining the controlling ownership
of the Company, the Ellison family is comprised of Lawrence J. Ellison and David Ellison (the “Ellison Family”).
David Ellison is the son of Lawrence J. Ellison, and Lawrence J. Ellison and David Ellison are accordingly
considered immediate family members.
Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance Media, and
as a result, this transaction has been accounted for as a transaction between entities under common control. As a
-10-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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 3). 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 Media were already at the Ultimate Parent’s basis, no adjustment to the fair
value of net assets was necessary, and Skydance Media 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 Skydance Corporation and
are identified as “Successor.” In addition, we are required to present segment information for the Predecessor
period based on our reportable segments prior to the segment change in 2026, Filmed Entertainment, Direct-to-
basis consistent with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) for
interim financial information and pursuant to the rules of the Securities and Exchange Commission. These
financial statements should be read in conjunction with the more detailed financial statements and notes thereto
included in our Form 8-K filed with the Securities and Exchange Commission on May 13, 2026, which was filed in
order to recast the financial statements included in our Annual Report on Form 10-K for the year ended
December 31, 2025 to reflect our new segment presentation.
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
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
(loss) 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
-11-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
their inclusion would have been antidilutive.
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||
Stock options and RSUs | |||||||||||||||||||||
Skydance Transactions Warrants | |||||||||||||||||||||
EPS.
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||
Weighted average shares for basic EPS | |||||||||||||||||||||
Dilutive effect of shares issuable under stock-based compensation plans | |||||||||||||||||||||
Weighted average shares for diluted EPS | |||||||||||||||||||||
Disaggregation of Income Statement Expenses
In November 2024, the Financial Accounting Standards Board (“FASB”) issued guidance requiring disclosure in
the notes to the financial statements of the disaggregation of relevant expense captions on the income statement
into specified expense categories, including employee compensation, as well as disclosure of total selling expenses.
The guidance is effective for us for the year ending December 31, 2027, and for all interim and annual periods
thereafter, and may be applied either prospectively or retrospectively.
Internal-use Software Costs
In September 2025, the FASB issued updated guidance on the recognition and disclosure of internal-use software
costs. This guidance eliminates capitalization based on software development stages and requires that
capitalization of internal-use software development costs begin when (1) management has authorized and
committed to funding the software project and (2) it is probable the project will be completed and the software will
be used to perform its intended function. The guidance is effective for us for the year ending December 31, 2028,
including interim periods within that year, and may be adopted prospectively, retrospectively, or using a modified
transition approach for projects in process. We are currently evaluating the impact of this guidance on our
-12-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
2) SUBSEQUENT EVENT: ACQUISITION OF WARNER BROS. DISCOVERY
On October 6, 2026, pursuant to the WBD Merger Agreement we completed the acquisition of WBD. Under the
terms of the WBD Merger Agreement, we paid $31.00 per WBD share to acquire all outstanding shares of WBD
plus a per share “ticking fee” of $0.00277778 (the “Ticking Consideration”) multiplied by the number of calendar
days elapsed after September 30, 2026 to and including the Closing Date (together, the “Merger Consideration”).
Through a combination of equity and debt financing, total cash paid to WBD stockholders for common stock
outstanding was approximately $77.95 billion. In addition, purchase consideration includes approximately
$1.95 billion (inclusive of Ticking Consideration) related to the portion of WBD equity awards granted under any
WBD stock plan attributable to pre-combination services. Also, under the terms of the WBD Merger Agreement, in
the first quarter of 2026, we 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. The termination fee is
included in the total purchase consideration, and accordingly has been included within “Advance consideration for
WBD acquisition” on the Consolidated Balance Sheet as of September 30, 2026 and within Investing Activities on
the Consolidated Statement of Cash Flows for the nine months ended September 30, 2026. This payment was
initially funded with cash on hand and a $2.15 billion borrowing from our previous credit facility (see Note 8). In
accordance with the Subscription Agreements described below, entered into by the Ellison Parties (as defined
below), such amount was funded at closing by the Ellison Parties in exchange for shares of Skydance Corporation
Class B Common Stock at $12.00 per share. In addition, on the Closing Date we repaid WBD’s outstanding term
loans totaling $14.7 billion. The following table details the preliminary purchase consideration for the WBD
Merger.
Total cash paid to WBD’s shareholders inclusive of Ticking Consideration | $ | |
Estimated pre-combination portion of replacement employee equity awards | ||
Settlement of WBD term loans | ||
Netflix termination fee | ||
Total preliminary purchase consideration (a) | $ |
(a) The estimated preliminary purchase consideration does not include an estimate for amounts relating to the settlement
of pre-existing relationships between WBD and Skydance.
The WBD Merger is being accounted for as a business combination, with Skydance identified as the accounting
acquirer. In identifying Skydance as the accounting acquirer, management considered the structure of the
acquisition and other actions contemplated by the WBD Merger Agreement, relative outstanding voting and equity
interests, and the composition of the post-acquisition board of directors. No single factor was the sole determinant
in the overall conclusion that Skydance is the accounting acquirer; rather all factors were considered in arriving at
such conclusion. As a result of the limited time between the Closing Date and the filing of this Quarterly Report on
Form 10-Q for the quarter ended September 30, 2026, initial accounting for the business combination is incomplete
and we are not yet able to disclose the provisional amounts to be recognized as of the acquisition date for assets
acquired and liabilities assumed, or the supplemental pro forma revenue and earnings of the combined company.
We will provide these disclosures in our Annual Report on Form 10-K for the year ended December 31, 2026.
States Consent Decree
On September 30, 2026, the Consent Decree (the “States Consent Decree”) amongst the Company, WBD and
twelve states (collectively, the “Plaintiff States”) went into effect in connection with resolving the lawsuit filed by
the Plaintiff States captioned State of California et al. v. Paramount Skydance Corp. et al., and modifying the no-
close order in order to permit the WBD Merger to close. Under the States Consent Decree, the combined company
and its subsidiaries following the WBD Merger must comply with certain principal commitments during a five-
-13-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Equity Financing
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 Skydance Corporation, for an aggregate amount of up to
$46.7 billion plus Ticking Consideration and certain other additional amounts as defined in the WBD Merger
Agreement, if required, from the Trust and $250 million from RedBird pursuant to the terms of the Subscription
Agreements (the “PIPE Transaction”).
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, including subsequent assignments
permitted under the Subscription Agreements up to the date of the closing of the WBD Merger, the “Equity
Syndication” and the assignees, the “Equity Syndication Parties”) to the Equity Syndication Parties in the full
amount of the commitments under the Subscription Agreements. The Equity Syndication Parties include affiliates
of the Ellison Parties and RedBird, as well as the following institutional investors: The Public Investment Fund,
L’Imad 1st SPV 2 Exempt RSC LTD (an investment vehicle of L’Imad Holding, an Abu Dhabi sovereign wealth
fund), QIA TMT Holding LLC (an investment vehicle of the Qatar Investment Authority), and LionTree
Investment Fund, L.P. See Note 6 for details of ownership by the Ellison Family and RedBird of Skydance
Corporation Class B Common Stock following the WBD Merger.
At closing of the WBD Merger, we issued to each Equity Syndication Party a number of newly issued nonvoting
shares of Skydance Corporation Class B Common Stock equal to its allocated amount divided by the Syndication
Purchase Price, defined as the 20 -trading-day daily volume-weighted average price of 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. Based on the Syndication Purchase Price of $12.00 per
share, we issued an aggregate amount of 3,918 million shares of Skydance Corporation Class B Common Stock to
the Equity Syndication Parties. Following the closing, the Ellison Family and RedBird remained the sole holders of
Skydance Corporation Class A Common Stock through their ownership interest in Harbor Lights Entertainment,
Inc., representing 100 % of the voting shares of Skydance.
Debt Financing
In addition, in April 2026 we entered into a credit agreement (the “Pro Rata Credit Agreement”), which was
subject to the consummation of the acquisition of WBD. The Pro Rata Credit Agreement provides for (i)
$2.50 billion three-year senior secured term A loans, (ii) $2.50 billion five-year senior secured term A loans and
(iii) a $5.00 billion five-year senior secured revolving credit facility, which will be used for general corporate
purposes, and replaced our previous revolving credit facility upon the closing of the WBD Merger (see Note 8).
We also entered into $49 billion 364-day senior secured bridge term loan commitments. The bridge commitments,
which were terminated on the Closing Date, were intended as contingent financing and no borrowings were made
in connection with the WBD Merger. In lieu of the bridge commitments, permanent debt financing for the
acquisition was comprised of (i) $9.5 billion of seven-year Term B-1 Loans, (ii) $30.0 billion of First Lien Senior
Secured Notes, (iii) $12.4 billion of Second Lien Senior Secured Notes, and (iv) the $5.0 billion of term A loans
described above, reflecting an aggregate amount of $56.9 billion. See Note 8. The availability and initial funding of
the bridge commitments were subject to the consummation of the acquisition of WBD and other customary
conditions. On the Closing Date we incurred facility fees associated with the bridge facility totaling $384 million,
which will be reported within interest expense on our consolidated statement of operations in the fourth quarter of
2026.
-14-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Exchange Offers and Tender Offers
In connection with the WBD Merger, in May 2026, we commenced (i) offers to exchange any and all of certain
outstanding senior notes of subsidiaries of WBD (the “WBD Issuers”) for newly issued second lien secured notes
issued by Skydance (the “Exchange Offers”) and (ii) offers to purchase for cash two additional series of senior
notes of the WBD Issuers (the “Tender Offers”). The Exchange Offers and Tender Offers expired on October 6,
2026, following the closing of the WBD Merger, and settled on October 9, 2026, resulting in the exchange of
$11.98 billion aggregate principal amount and €546.5 million of the WBD Issuers’ senior notes for newly issued
second lien senior secured Skydance notes, and the purchase for cash of $2.4 billion aggregate principal amount of
the WBD Issuers’ senior notes. See Note 8.
Warrants
In addition, on October 13, 2026, holders of record of Skydance Corporation Class B Common Stock on October
5, 2026 (excluding any Equity Investor or affiliate thereof, any of the Company’s wholly owned subsidiaries that
own Class B Common Stock, the Paramount Global 401(k) Plan and the Paramount Global Master Trust) received
Treatment of WBD Equity Awards
In accordance with the WBD Merger Agreement, on October 6, 2026 (i) vested WBD stock options and RSUs
were cancelled and converted into the right to receive cash based on the Merger Consideration; (ii) unvested WBD
stock options with an exercise price below the Merger Consideration, unvested WBD RSUs and WBD deferred
stock units were assumed by the Company and converted into contingent rights to receive fixed cash amounts
based on the Merger Consideration, which remain subject to the vesting and other terms of the original awards; (iii)
WBD stock options with an exercise price equal to or greater than the Merger Consideration were cancelled for no
consideration; and (iv) WBD notional investment units under WBD’s deferred compensation plans were converted
into notional units with respect to Skydance Corporation Class B Common Stock. As discussed above, the
preliminary purchase consideration includes an estimate of approximately $1.95 billion for WBD equity awards,
comprised of amounts paid for vested awards and liabilities assumed for the portion of the converted unvested
awards attributable to pre-combination services. The remaining estimated value of the converted unvested awards
of approximately $1.18 billion will be recognized as compensation expense over the remaining vesting periods of
up to three years .
In connection with the WBD Merger, we assumed WBD’s equity incentive plans, and shares remaining available
under WBD’s stock incentive plan may be used for awards to legacy WBD employees and newly hired employees
under our 2025 Incentive Award Plan, as amended.
-15-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
3) THE SKYDANCE AND NAI TRANSACTIONS
On August 7, 2025, pursuant to a purchase and sale agreement dated July 7, 2024 the NAI Equity Investors
purchased all of the outstanding equity interests of Paramount Global’s controlling stockholder, NAI, from the
shareholders of NAI in the NAI Transaction. 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
Media became wholly-owned subsidiaries of Paramount Skydance Corporation in the Skydance Transactions.
Paramount Skydance Corporation, formerly known as New Pluto Global, Inc., and now named Skydance
Corporation, was formed on June 3, 2024 to consummate the Skydance 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 Media as part of the Skydance Transactions.
Concurrent with the NAI Transaction, the NAI Equity Investors and certain other affiliates of investors in
Skydance Media made an investment of $6.0 billion into Paramount Skydance Corporation (the “Skydance
Transactions PIPE”) 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
(the “Skydance Transactions Warrants”). $4.45 billion of the Skydance Transactions PIPE 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 Media
membership unit held by Skydance Media investors and each Skydance Media 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
(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 Media 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 Global 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. See Note 11.
-16-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Pushdown of the Ultimate Parent’s Basis
The NAI Transaction resulted in a change in control of our Predecessor, Paramount Global, that established a new
accounting basis, which reflects the estimated fair value of Paramount Global as indicated by the NAI Transaction
and the Skydance Transactions. The table below presents the calculation of the Ultimate Parent’s basis in
Paramount Global as of the date these transactions closed.
Estimated value of NAI Transaction consideration attributable to Paramount Global common stock | $ | (a) | |
Cash paid to stockholders (see Note 11) | (b) | ||
Proceeds from the Skydance Transactions PIPE, net of subscription discount | |||
Outstanding Paramount Global RSU Awards and Paramount Global PSU Awards | (c) | ||
Remaining shares of Paramount Skydance Corporation Class B Common Stock | (d) | ||
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 Skydance
Transactions PIPE.
(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
-17-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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 was 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.
Allocation of Ultimate Parent’s Basis | ||||||
Preliminary | Measurement Period Adjustments | Final | ||||
Assets: | ||||||
Cash and cash equivalents | $ | $— | $ | |||
Receivables, net | ( | |||||
Programming and other inventory, current | ( | |||||
Prepaid expenses and other current assets | — | |||||
Property and equipment, net (a) | ( | |||||
Programming and other inventory, noncurrent (b) | ( | |||||
Goodwill (c) | ||||||
Intangible assets, net (d) | ||||||
Operating lease assets | ||||||
Deferred income tax assets, net | ||||||
Other noncurrent assets | ||||||
Total assets | $ | $ | $ | |||
Liabilities: | ||||||
Long-term debt (e) | $ | $— | $ | |||
Pension and postretirement benefit obligations (f) | — | |||||
Deferred income tax liabilities, net | ( | |||||
Operating lease liabilities | ( | |||||
Programming obligations (g) | ||||||
Other liabilities (h) | ||||||
Total liabilities | $ | $ | $ | |||
Noncontrolling interests (i) | ( | |||||
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. The fair value reflects a net decrease to the book value of
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.
-18-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
(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 fair value estimates assumed herein. Goodwill reflects operating synergies
between our businesses, as well as anticipated cost savings and is not deductible for tax purposes. During the first and second
quarters of 2026, in connection with the finalization of our appraisals and other valuation analyses, we recorded measurement
period adjustments that resulted in increases to goodwill of $22 million and $411 million, respectively. These adjustments
principally resulted from increases during the year-to-date period of $257 million to programming obligations and $196 million
to contingent liabilities, and a decrease of $91 million to programming assets, partially offset by the related deferred tax impact of
$140 million.
(d) The table below presents the fair values of 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 | $ | Greenfield discounted cash flow method | |||||
Trade names | $ | Relief from Royalty | |||||
Affiliate relationships | $ | Multi-period excess earnings | |||||
Subscriber relationships | $ | Replacement cost | |||||
Franchises | $ | Discounted cash flow | |||||
Developed technology | $ | Replacement cost |
(e) The fair value was determined based on quoted prices in active markets.
(f) The fair value was determined based on a remeasurement of the obligation using actuarial assumptions. Key valuation inputs
included discount rates and mortality assumptions.
(g) “Programming Obligations” include $777 million recorded to establish liabilities for unfavorable contractual arrangements.
(h) The estimated fair value of Paramount Global’s contingent liabilities as of August 7, 2025 was $1.6 billion, which relates to the
defense and settlement of lawsuits claiming various personal injuries related to exposure to asbestos as well as claims from
federal and state environmental regulatory agencies and other entities asserting liability for environmental cleanup costs and
related damages (see Claims Related to Former Businesses in Note 15) and other legal contingencies.
(i) The fair value was determined based on a discounted cash flow analysis.
-19-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
4) PROGRAMMING AND OTHER INVENTORY
grouped by type and predominant monetization strategy.
At | At | ||||||
September 30, 2026 | December 31, 2025 | ||||||
Film Group Monetization: | |||||||
Licensed program rights, including prepaid sports rights | $ | $ | |||||
Produced television and film programming: | |||||||
Released | |||||||
In process and other | |||||||
Individual Monetization: | |||||||
Produced television and film programming: | |||||||
Released | |||||||
Completed, not yet released | |||||||
In process and other | |||||||
Home entertainment | |||||||
Game development | |||||||
Total programming and other inventory | |||||||
Less current portion | |||||||
Total noncurrent programming and other inventory | $ | $ | |||||
included within “Operating expenses” on the Consolidated Statements of Operations.
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||
Licensed program rights | $ | $ | $ | $ | $ | $ | |||||||||||||||
Produced television and film programming, and acquired libraries: | |||||||||||||||||||||
Individual monetization | $ | $ | $ | $ | $ | $ | |||||||||||||||
Film group monetization | $ | $ | $ | $ | $ | $ | |||||||||||||||
-20-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
5) RESTRUCTURING AND TRANSACTION-RELATED ITEMS
the Consolidated Statements of Operations.
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||
Severance (a) | $ | $ | $ | $ | $ | $ | |||||||||||||||
Exit costs | |||||||||||||||||||||
Restructuring charges | |||||||||||||||||||||
Transaction-related items | |||||||||||||||||||||
Restructuring and transaction-related items | $ | $ | $ | $ | $ | $ | |||||||||||||||
(a) Severance costs include the accelerated vesting of stock-based compensation.
Restructuring Charges
During the three and nine months ended September 30, 2026 (Successor) and the period from August 7 -
September 30, 2025 (Successor), we recorded restructuring severance costs of $50 million, $85 million and $185
million, respectively, primarily associated with changes in management and actions to align 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. In
addition, during the three months ended September 30, 2026 we recorded exit costs of $39 million associated with
a contract termination.
Restructuring charges for the Predecessor periods from July 1 - August 6, 2025 and January 1 - August 6, 2025
included severance costs of $13 million and $190 million, respectively, primarily associated with strategic changes
in our global workforce in order to streamline our organization. In addition, during the Predecessor period from
January 1 - August 6, 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.
“Other liabilities” on the Consolidated Balance Sheets, and is expected to be substantially paid by the end of 2027.
-21-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Successor | |||||||||||||
2026 Activity | |||||||||||||
Balance at December 31, 2025 | Charges (a) | Payments and other | Balance at September 30, 2026 | ||||||||||
Studios | $ | $ | $( | $ | |||||||||
Direct-to-Consumer | ( | ||||||||||||
TV Media | ( | ||||||||||||
Corporate | ( | ||||||||||||
Total | $ | $ | $( | $ | |||||||||
Transaction-Related Items
Transaction-related items include costs directly associated with prospective and completed mergers and
acquisitions, as well as related integration activities. During the three and nine months ended September 30, 2026,
we recorded transaction-related costs of $98 million and $354 million, respectively, principally for legal, advisory,
and other professional fees associated with the planned WBD Merger and related integration. During the
Predecessor periods from July 1 - August 6, 2025 and January 1 - August 6, 2025, we recorded transaction-related
costs of $175 million and $199 million, respectively, principally for banking, legal, advisory, and other
professional fees relating to the Skydance Transactions, and transaction awards that became payable to eligible
employees upon closing.
6) RELATED PARTIES
The Ellison Family (Successor)
At September 30, 2026, the Ellison Family, the controlling stockholder of the Company, 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 47.1 % of our Class A and non-
voting Class B Common Stock on a combined basis. On October 6, 2026, in connection with the WBD Merger, the
Ellison Family contributed $14.85 billion of equity financing (see Note 2) and received 1.24 billion shares of
Skydance Corporation Class B Common Stock. Following the WBD Merger, on October 6, 2026, the Ellison
Family’s Class A holdings were unchanged, and they held 35.0 % of our Class A and non-voting Class B Common
Stock on a combined basis. In addition, in connection with the Skydance Transactions PIPE, the NAI Equity
Investors (including entities controlled by the Ellison Family) received the Skydance Transactions Warrants to
purchase a total of 200 million shares of 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 CEO of the Company and the Chairman of our Board of Directors.
Lawrence J. Ellison is the Chairman and a significant stockholder of Oracle Corporation (“Oracle”). We have
several multi-year software-as-a-service agreements with Oracle, principally for finance and human resources, as
well as software support agreements and database licenses used by various applications. We made payments to
Oracle totaling $2 million and $48 million during the three and nine months ended September 30, 2026,
respectively, and $2 million during the period from August 7 - September 30, 2025. In February 2026, we executed
a six-year cloud infrastructure services agreement with Oracle with a total commitment of $300 million, under
-22-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
which payments escalate over the term, in connection with our anticipated enterprise, data, and streaming
workloads.
In addition, we have a lease agreement with a term that expires in 2034 under which the lessor is an entity owned
and controlled by Lawrence J. Ellison. At September 30, 2026 and December 31, 2025, the total liability associated
with these leases was $163 million and $174 million, respectively. We recorded lease costs associated with these
leases totaling $8 million and $22 million during the three and nine months ended September 30, 2026,
respectively, and $4 million during the period from August 7 - September 30, 2025.
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)
At September 30, 2026, RedBird indirectly held approximately 22.5 % of our voting Class A Common Stock
through their collective approximate 22.5 % ownership interest in Harbor Lights Entertainment, Inc. and 10.6 % of
our Class A and non-voting Class B Common Stock on a combined basis. On October 6, 2026, in connection with
the WBD Merger, RedBird contributed $5.2 billion of equity financing (see Note 2) and received 433 million
shares of Skydance Corporation Class B Common Stock. Following the WBD Merger, on October 6, 2026,
RedBird’s Class A holdings were unchanged, and they held 11.0 % of our Class A and non-voting Class B
Common Stock on a combined basis.
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 received an aggregate transaction fee of $110 million in October 2026, comprised of
$65 million for mergers and acquisitions advisory services and $45 million for capital raising advisory services.
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. At September 30, 2026, amounts owed in connection with this
contract totaled $3 million.
Reimbursements Associated with WBD Merger (Subsequent Event)
At closing of the WBD Merger, we reimbursed the Trust and RedBird for reasonable and documented out-of-
pocket expenses totaling $7
-23-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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. Revenue earned from an equity method investee was $71 million
and $218 million for the three and nine months ended September 30, 2026 (Successor), respectively, $40 million
for the Successor period from August 7 - September 30, 2025, and $27 million and $191 million for the
Predecessor periods from July 1 - August 6, 2025 and January 1 - August 6, 2025, respectively. Receivables from
this equity method investee are included in “Receivables, net” and “Other assets” on the Consolidated Balance
Sheets. These totaled $190 million and $86 million, respectively, at September 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.
7) REVENUES
Note 14 for revenues by segment disaggregated into these categories.
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Revenues by Type: | |||||||||||||||||||||||||
Advertising | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Affiliate and subscription | |||||||||||||||||||||||||
Theatrical | |||||||||||||||||||||||||
Licensing and other | |||||||||||||||||||||||||
Total Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Receivables
Reserves for accounts receivable reflect our expected credit losses based on historical experience as well as current
and expected economic conditions and industry trends. At September 30, 2026 and December 31, 2025, our
allowance for credit losses was $17 million and $10 million, respectively.
Included in “Other assets” on the Consolidated Balance Sheets are noncurrent receivables of $772 million and
$835 million at September 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 $1.5 1.1
billion, $0.4 billion, and $0.6 billion for the nine months ended September 30, 2026 (Successor) and for the periods
from August 7 - September 30, 2025 (Successor) and January 1 - August 6, 2025 (Predecessor), respectively, that
were included in the opening balance of deferred revenues for the respective year.
-24-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Unrecognized Revenues Under Contract
At September 30, 2026, unrecognized revenues attributable to unsatisfied performance obligations under our long-
term contracts were approximately $6 billion, of which approximately $1 billion is expected to be recognized
during the remainder of 2026, $2 billion in 2027, $1 billion in 2028, and $1 billion thereafter. These amounts only
include contracts subject to a guaranteed fixed amount or the guaranteed minimum under variable contracts,
primarily consisting of television and film licensing contracts and affiliate agreements that are subject to a fixed or
guaranteed minimum fee. Such amounts change on a regular basis as we renew existing agreements or enter into
new agreements. In addition, the timing of satisfying certain performance obligations under these long-term
contracts is uncertain and, therefore, is also subject to change. Unrecognized revenues under contracts disclosed
above do not include (i) contracts with an original expected term of one year or less, mainly consisting of
advertising contracts, (ii) contracts for which variable consideration is determined based on the customer’s
subsequent sale or usage, mainly consisting of affiliate agreements and (iii) long-term licensing agreements for
multiple programs for which variable consideration is determined based on the value of the programs delivered to
the customer and our right to invoice corresponds with the value delivered.
Performance Obligations Satisfied in Previous Periods
Under certain revenue arrangements, the amount and timing of our revenue recognition is determined based on our
licensees’ subsequent sale to its end customers. As a result, under such arrangements we often satisfy our
performance obligation of delivery of our content in advance of revenue recognition. We recognized revenues of
$0.1
7 - September 30, 2025 and the Predecessor period from July 1 - August 6, 2025 and $0.3 billion for the nine
months ended September 30, 2026 (Successor), $0.1 billion for the Successor period from August 7 - September
30, 2025 and $0.4 billion for the Predecessor period from January 1 - August 6, 2025, respectively, for which the
performance obligation was satisfied prior to the periods indicated. These revenues principally related to content
licensing arrangements, including agreements with distributors of transactional video-on-demand and electronic
sell-through services, other licensing arrangements, and theatrical distribution of our films.
-25-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
8) DEBT
At | At | |||||||
September 30, 2026 | December 31, 2025 | |||||||
$ | $ | |||||||
Borrowings under unsecured credit facility | ||||||||
Obligations under finance leases | ||||||||
Total debt (a) | ||||||||
Less current portion | ||||||||
Total long-term debt, net of current portion | $ | $ | ||||||
(a) In connection with the pushdown of the Ultimate Parent’s basis, our debt was recorded at fair value as of August 7, 2025,
which resulted in a net decrease to our total debt balance of $898 million, reflecting the reversal of a net unamortized
discount of $390 million and unamortized deferred financing fees of $71 million, and a reduction of $1.36 billion to
adjust our debt to its fair value (see Note 3). The adjustments to fair value for each of our senior and junior debt issuances
are being amortized over the remaining term of the applicable issuance within interest expense. At September 30, 2026
and December 31, 2025, the total net unamortized fair value adjustments for our senior and junior debt was $1.25 billion
and $1.32 billion, respectively. The face value of our total debt at September 30, 2026 and December 31, 2025 was
Senior Debt
In January 2026, we repaid our $347 million of 4.0 % senior notes at maturity and in October 2026 we repaid our
$86 million of 3.70 % senior notes at maturity.
Commercial Paper
At both September 30, 2026 and December 31, 2025, we had no
-26-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Unsecured Credit Facility
In April 2026, we entered into an amendment to our previous credit facility (the “Unsecured Credit Facility”),
increasing the commitments from $3.50 billion to $5.00 billion. The Unsecured Credit Facility was used for
general corporate purposes and to support commercial paper borrowings, if any and also allowed us to borrow, at
our option, in certain foreign currencies up to specified limits. In the first quarter of 2026, in connection with the
$2.8 billion termination fee paid to Netflix (see Note 2), we borrowed $2.15 billion under the Unsecured Credit
Facility. As of September 30, 2026, outstanding borrowings totaled $1.67 billion at a weighted average interest rate
of 5.83 % and the remaining availability was $3.3 billion. On the Closing Date, in connection with the
consummation of the WBD Merger, we repaid all borrowings with the funding from the PIPE Transaction
described in Note 2 and terminated all credit commitments outstanding under the Unsecured Credit Facility.
The Unsecured Credit Facility had one principal financial covenant which set a maximum Consolidated Total
Leverage Ratio, which was 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 Unsecured Credit Facility) for the trailing twelve-month period at the end of each quarter.
The maximum ratio was 4.50 x as of September 30, 2026 and we met the covenant.
Other Bank Borrowings
At both September 30, 2026 and December 31, 2025, there were no
$50
Subsequent Events in Connection with the WBD Merger
In connection with the WBD Merger we issued or assumed additional debt with an aggregate principal amount of
$72.1 billion. This amount consists of (i) $56.9 billion of debt incurred to finance the WBD Merger, comprised of
$5.0 billion of borrowings under the Term A Loan Facilities and $9.5 billion of Term B-1 Loans, each under the
Pro Rata Credit Agreement, $30.0 billion of First Lien Senior Secured Notes (the “First Lien Notes”), and
$12.4 billion of Second Lien Senior Secured Notes (the “Second Lien Notes”), (ii) $12.6 billion of Second Lien
Senior Secured Notes issued in the Exchange Offers (the “Second Lien Exchange Notes”), and (iii) $2.7 billion of
other outstanding unsecured notes and debentures of the WBD Issuers that we assumed. The newly issued debt is
further discussed below.
Pro Rata Credit Agreement
The Pro Rata Credit Agreement provides for (i) a $5.00 billion five-year senior secured revolving credit facility
(the “Revolving Credit Facility”), (ii) a $2.5 billion three-year senior secured term loan A-1 facility and (iii) a
$2.5 billion five-year senior secured term loan A-2 facility (together, the “Term A Loan Facilities”). The
availability and initial funding of the facilities under the Pro Rata Credit Agreement were subject to the
consummation of the acquisition of WBD, the termination of the Unsecured Credit Facility, and other customary
conditions and no amounts were outstanding as of September 30, 2026.
-27-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
On the Closing Date, in connection with the completion of the WBD Merger, we borrowed the full $2.5
under each of the Term A Loan Facilities. The commitments under the Revolving Credit Facility became available
on the Closing Date, and no amounts were drawn. Also on the Closing Date, we entered into Amendment No. 1 to
the Pro Rata Credit Agreement (“Credit Agreement Amendment No. 1”), which provided for a senior secured
incremental tranche of term B loans consisting of (i) $8.5 billion of seven-year U.S. dollar-denominated term B-1
loans (the “Dollar Term B-1 Loans”) and (ii) €850 million of seven-year euro-denominated term B-1 loans (the
“Euro Term B-1 Loans” and, together with the Dollar Term B-1 Loans, the “Term B-1 Loans”). We borrowed the
full amount of the Term B-1 Loans on the Closing Date. The Term B-1 Loans mature on the seventh anniversary of
the Closing Date.
The loans drawn under the Term A Loan Facilities and the Revolving Credit Facility bear interest at a rate
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 Skydance’s corporate family 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 EURIBOR, SONIA and TIBOR, respectively.
The Dollar Term B-1 Loans bear interest, at our option, at a rate per annum equal to either the Alternate Base Rate
(as defined in the Pro Rata Credit Agreement) or Term SOFR plus a margin based on our Leverage Ratio that
ranges between 1.75 % and 1.50 % for Alternate Base Rate loans and 2.75 % and 2.50 % for Term SOFR Rate loans.
The Euro Term B-1 Loans bear interest at a rate per annum equal to EURIBOR plus a margin based on our
Leverage Ratio that ranges between 2.75 % and 2.50 %. Beginning with the quarter ending December 31, 2029, the
Dollar Term B-1 Loans will amortize at 1.00 % of the initial principal amount per annum in quarterly installments,
with the remaining balance payable at maturity. No regular amortization is required with respect to the Euro Term
B-1 Loans.
Interest rates on benchmark rate borrowings under the Pro Rata Credit Agreement, including the Term A Loan
Facilities and the Term B-1 Loans, reset at the beginning of each interest period, and as a result, interest expense
on these borrowings will fluctuate with changes in market interest rates. In addition, the applicable margins may
change based on changes in our corporate family rating or the Leverage Ratio, as applicable.
Priority
The obligations under the Pro Rata Credit Agreement have been secured on a first lien basis on all or substantially
all of the assets of Skydance and its U.S. subsidiaries (including Paramount Global, Skydance Media, LLC, and
each of its respective U.S. subsidiaries) that are guarantors, excluding real property and subject to other customary
exceptions and a cap on the amount of assets and property of Paramount Global that can be subject to a lien
securing the Pro Rata Credit Agreement. On the date Skydance achieves certain credit ratings and satisfies certain
other conditions as specified in the Pro Rata Credit Agreement (such date, the “Investment Grade Fall-Away
Date”), the obligations under the Pro Rata Credit Agreement will become unsecured, and the guarantee of such
obligations by the subsidiary guarantors will be released (subject to certain exceptions).
-28-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Covenants
The Pro Rata Credit Agreement contains customary representations and warranties and also contains financial
covenants that require our Leverage Ratio and First Lien Net Leverage Ratio (each as defined in the Pro Rata
Credit Agreement) not to exceed 5.50 x and 3.25 x, respectively, in each case, at the end of each fiscal quarter. On
and after the Investment Grade Fall-Away Date, the First Lien Net Leverage Ratio financial covenant will cease to
apply and the Leverage Ratio financial covenant will be modified requiring that our Leverage Ratio not exceed
Optional Redemption
The loans under the Pro Rata Credit Agreement may be voluntarily prepaid, and unutilized commitments
thereunder may be voluntarily reduced, without penalty, other than customary breakage costs and, in the case of
the Term B-1 Loans, a 1.00 % premium on Term B-1 Loans that are prepaid, converted or subjected to a pricing
reduction within six months after the Closing Date.
Senior Secured Notes
On October 5, 2026, we issued, in private placements exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), $30.0 billion aggregate principal amount of First Lien Notes and $11.4 billion
aggregate principal amount of Second Lien Notes, together with €885 million aggregate principal amount of
Second Lien Notes denominated in euros (First Lien Notes together with the Second Lien Notes, the “Senior
Secured Notes”). The Senior Secured Notes bear interest at fixed rates, payable semi-annually in arrears, and
consist of the following:
Issuance of Senior Secured Notes | Face Value | ||
$ | |||
(a) | |||
Total Senior Secured Notes | $ | ||
(a) Translated at the spot rate at the time of pricing.
-29-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Priority
The First Lien Notes are secured by first-priority liens on all or substantially all of the assets of Skydance and the
Guarantors (as defined below) (the “Collateral”), subject to permitted liens and certain exceptions. The First Lien
Notes are guaranteed on a senior secured basis by each of Skydance’s existing and future wholly owned domestic
subsidiaries that is a borrower under or guarantees obligations under the Pro Rata Credit Agreement (collectively,
the “Guarantors”), subject to certain exceptions. The Second Lien Notes are secured by second-priority liens on the
Collateral, subject to permitted liens and certain exceptions. The Second Lien Notes are guaranteed on a senior
secured basis by the Guarantors. Upon the occurrence of an Investment Grade Event (as defined in the applicable
supplemental indenture) for each series of notes with respect to the Senior Secured Notes, subject to certain
conditions (including the concurrent release of liens and guarantees securing other secured debt and the Company
having no greater than $250 million of term B loans outstanding at such time), the liens on the Collateral securing
such series of notes will be released and the note guarantees with respect to such series will be released. In
addition, certain covenants set forth in the applicable supplemental indenture relating to asset sales and future
subsidiary guarantors will cease to apply to such series of notes. These releases and covenant suspensions are
permanent and will not be reinstated upon any subsequent downgrade or withdrawal of the applicable investment
grade ratings.
Registration Rights
Pursuant to the registration rights agreement, dated as of October 5, 2026 (the “First Lien Senior Secured Notes
Registration Rights Agreement”), we have agreed to use commercially reasonable efforts to (i) file a registration
statement with respect to a registered offer to exchange each series of the First Lien Notes for new notes with terms
substantially identical in all material respects to such series of the First Lien Notes (such new notes, the “Exchange
Notes”) and cause the registration statement to be declared effective under the Securities Act within 730 days of
October 5, 2026, or (ii) in certain circumstances, file a shelf registration statement with respect to resales of the
First Lien Notes. The Second Lien Notes do not have any registration rights.
Optional Redemption and Change of Control Provisions
Each series of First Lien Notes may be redeemed at our option, in whole or in part, at a “make-whole” premium
prior to the applicable par call date and at 100 % of principal on or after that date. For each series of First Lien
Notes, the par call date is within one to six months of maturity. For the Second Lien Notes, prior to October 15,
2028 (2031 Euro and 2031 Second Lien Notes), October 15, 2029 (2034 Second Lien Notes) and October 15, 2031
(2036 Second Lien Notes), we may redeem each series, in whole or in part, at a “make-whole” premium.
Thereafter each series of Second Lien Notes can be redeemed at call premiums starting at 3.500 % to 4.563 % of
principal and declining to zero one year prior to maturity (2031 Euro and 2031 Second Lien Notes) and three years
prior to maturity (2034 and 2036 Second Lien Notes). In addition, before October 15, 2028 (2031 Euro and 2031
Second Lien Notes) or October 15, 2029 (2034 and 2036 Second Lien Notes), we may redeem up to 40 % of a
series of Second Lien Notes with the proceeds of equity offerings at 107.0 % to 109.125 % of principal, and up to
In addition, upon a change of control triggering event, holders of our Senior Secured Notes may require us to
repurchase their notes at 101 % of principal plus accrued and unpaid interest.
-30-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
WBD Exchange Offers and Tender Offers
In May 2026, we commenced offers to exchange any and all of certain outstanding senior notes issued by the
WBD Issuers for Second Lien Exchange Notes newly issued by Skydance and also commenced offers to purchase
for cash two additional series of senior notes of the WBD Issuers. The Exchange Offers expired on October 6,
2026 following the closing of the WBD Merger, and holders of approximately 99.15 % of the notes eligible to
participate in the Exchange Offers validly tendered their notes. Accordingly, upon settlement on October 9, 2026,
we issued to such holders $11.98 billion aggregate principal amount of dollar-denominated Second Lien Exchange
Notes and €546.5 million aggregate principal amount of euro-denominated Second Lien Exchange Notes. Such
notes were issued in private placements exempt from registration under the Securities Act. The dollar-denominated
notes pay interest semi-annually, and the euro-denominated notes pay interest annually, in each case in arrears. The
Second Lien Exchange Notes consist of the following:
Senior Secured Exchange Notes | Face Value | ||
$ | |||
Total Senior Secured Exchange Notes | $ | ||
The Exchange Offers have been accounted for as debt modifications. Accordingly, the Second Lien Exchange
Notes were recorded at the carrying amount of the exchanged WBD notes.
The Second Lien Exchange Notes are senior secured obligations, guaranteed by the Guarantors and secured by
second-priority liens on the Collateral. They are junior in lien priority to the First Lien Notes and the loans and
commitments under the Pro Rata Credit Agreement, and equal in lien priority to the Second Lien Notes.
The Second Lien Exchange Notes are redeemable at our option. Most series may be redeemed at a “make-whole”
price before their par call date, which is between one and six months before maturity, and at 100 % of principal on
or after that date, plus accrued and unpaid interest in each case. The 2032 Second Lien Exchange Notes and 2052
Second Lien Exchange Notes follow the same terms but cannot be redeemed before March 15, 2027. The 6.35 %
2040, 4.95 % 2042, and 4.875 % 2043 Second Lien Exchange Notes have no par call date and may be redeemed at
any time at a “make-whole” price. The euro-denominated Second Lien Exchange Notes may also be redeemed in
whole at par upon certain changes in U.S. tax law. The change of control, tender offer, covenant and Investment
Grade Event provisions of the Second Lien Exchange Notes are substantially the same as those of the Second Lien
Notes issued on October 5, 2026 described above. The Second Lien Exchange Notes do not have registration
rights.
-31-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Concurrent with the Exchange Offers, on October 9, 2026 we purchased $2.40 billion in aggregate principal
amount of senior notes of the WBD Issuers (approximately 98.83 % of the outstanding principal amount of those
series) for $2.38 billion in cash, plus accrued and unpaid interest, and the purchased notes were cancelled.
9) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
The carrying value of our financial instruments approximates fair value, except for notes and debentures. At
September 30, 2026 and December 31, 2025, the carrying value of our outstanding notes and debentures was
$13.38 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 $11.1 billion and $13.2 billion, respectively.
Investments
Our investments without a readily determinable fair value for which we have no significant influence had a
carrying value of $55 million and $58 million at September 30, 2026 and December 31, 2025, respectively. These
investments are included in “Other assets” on the Consolidated Balance Sheets.
Foreign Exchange Contracts
We are exposed to changes in foreign currency exchange rates and manage that exposure principally using foreign
currency forward contracts and cross-currency swaps. We designate certain of these instruments as cash flow
hedges, fair value hedges and net investment hedges, as described below. 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 4.4 years.
At September 30, 2026 and December 31, 2025, the notional amount of all foreign exchange contracts was $7.22
billion and $3.14 billion, respectively. At September 30, 2026, the notional amount comprised $5.70 billion related
to future production and licensing of content (designated as cash flow hedges), $1.00 billion related to the issuance
of the 2031 Euro Second Lien Notes (designated as fair value hedges) and $510 million related to our other foreign
currency assets and liabilities (non-designated hedges). At December 31, 2025, the notional amount comprised
$2.74 billion related to future production costs (designated as cash flow hedges) and $407 million related to our
foreign currency assets and liabilities (non-designated hedges).
On September 30, 2026, in connection with the pricing of the above-referenced €885 million ($1.00 billion)
aggregate principal amount of the 7.000 % Euro Second Lien Senior Secured Notes due 2031, which were issued
on October 5, 2026, we entered into fixed-for-fixed cross-currency swaps with a notional amount of $1.00 billion.
The swaps, which mature on October 15, 2029, are designated as fair value hedges of the foreign currency
exposure associated with both the firm commitment to issue the notes from September 30, 2026 and the
subsequently issued notes.
Subsequent Event in Connection with WBD Merger
On October 6, 2026, concurrent with the borrowing of the €850 million Euro Term B-1 Loans (see Note 8), we
designated the principal amount of these loans as a hedge of our net investment in certain euro functional currency
subsidiaries.
-32-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Interest Rate Contracts
In 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 were 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. On September 30, 2026, we terminated all of these interest rate contracts and, in October 2026,
received cash proceeds of $667 million. For the contracts designated as cash flow hedges, the related gain of
$165 million, which was recorded in accumulated other comprehensive income (loss) (AOCI), will be reclassified
into interest expense over the 5-year and 10-year term of the related debt issued in October 2026. Approximately
$16 million is expected to be reclassified from AOCI into interest expense within the next 12 months. The gain on
the non-designated interest rate hedges for the nine months ended September 30, 2026 was $502 million.
Gains (Losses) on Derivative Financial Instruments
comprehensive income (loss) and on non-designated hedges within “Net gain on derivatives” on the Consolidated
Statements of Operations.
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Cash flow hedges | |||||||||||||||||||||||||
Foreign exchange forward contracts | $( | $( | $( | $( | $( | $ | |||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||
Total | $ | $( | $( | $ | $( | $ | |||||||||||||||||||
Non-designated hedges | |||||||||||||||||||||||||
Foreign exchange forward contracts | $( | $( | $ | $ | $( | $( | |||||||||||||||||||
Interest rate contracts | |||||||||||||||||||||||||
Total | $ | $( | $ | $ | $( | $( | |||||||||||||||||||
-33-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Fair Value Measurements
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.
At | At | ||||||
September 30, 2026 | December 31, 2025 | ||||||
Assets: | |||||||
Foreign exchange contracts | $ | $ | |||||
Total Assets | $ | $ | |||||
Liabilities: | |||||||
Deferred compensation | $ | $ | |||||
Foreign exchange contracts | |||||||
Total Liabilities | $ | $ | |||||
Level 3 inputs were used in determining Paramount Global’s net assets at the Ultimate Parent’s basis (see Note 3)
and the estimated fair value of FCC licenses that were impaired in the second quarter of 2025 (see Note 16).
10) VARIABLE INTEREST ENTITIES
In the normal course of business, we enter into joint ventures or make investments with business partners that
support our underlying business strategy and provide us the ability to enter new markets to expand the reach of our
brands, develop new programming and/or distribute our existing content. In certain instances, an entity in which
we make an investment may qualify as a variable interest entity (“VIE”). In determining whether we are the
primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact
the activities of the VIE, and have the obligation to absorb losses or the right to receive benefits from the VIE that
could potentially be significant to the VIE.
The following tables present the amounts recorded in our consolidated financial statements related to our
consolidated VIEs. During the first quarter of 2026, we acquired our minority partner’s interest in one of our
consolidated VIEs, which increased our ownership interest to 100 %. Accordingly, for periods subsequent to the
acquisition, this entity is not included in the amounts disclosed.
At | At | ||||||
September 30, 2026 | December 31, 2025 | ||||||
Total assets | $ | $ | |||||
Total liabilities | $ | $ | |||||
-34-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Revenues | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Operating income (loss) | $ | $( | $( | $ | $( | $( | |||||||||||||||||||
11) STOCKHOLDERS’ EQUITY
We are authorized to issue up to 55 million shares of Skydance Corporation Class A Common Stock, par value of
$.001 per share; 100 million shares of preferred stock, par value of $.001 per share; and, 7.0 billion shares of
Skydance Corporation Class B Common Stock, par value of $.001 per share, which increased from 5.50 billion
shares in April 2026. Holders of Class A Common Stock are entitled to one vote per share; holders of Class B
Common Stock have no voting rights. No shares of preferred stock have been issued. The Certificate of
Amendment to the amended and restated certificate of incorporation that increased the Class B authorization also
permits the Skydance Corporation Board of Directors to declare and pay a dividend to holders of Skydance
Corporation Class B Common Stock without being required to declare and pay a corresponding dividend to the
holders of Skydance Corporation Class A Common Stock, subject to the prior written consent or approval of the
holders of all of the outstanding shares of Skydance Corporation Class A Common Stock.
As of September 30, 2026, 31.5 million shares of Class A Common Stock, 1,092.9 million shares of Class B
Common Stock and the Skydance Transactions Warrants to purchase 200 million shares of Class B Common Stock
at an exercise price of $30.50 per share were outstanding.
On October 6, 2026, subsequent to the balance sheet date, we issued approximately 3,918 million shares of Class B
Common Stock in connection with the WBD Merger and subsequently distributed warrants to purchase
approximately 470.7 million shares of Class B Common Stock at an exercise price of $12.00 per share to certain
holders of record of Class B Common Stock on October 5, 2026. The October 2026 common stock and warrant
issuances are further described below.
Impacts from the WBD Merger (Subsequent Event)
Common Stock
On October 6, 2026, pursuant to the Subscription Agreements and the Equity Syndication, we issued
approximately 3,918 million newly issued nonvoting shares of Skydance Corporation Class B Common Stock to
the Equity Syndication Parties at the Syndication Purchase Price of $12.00 per share for gross proceeds of
$47.01 billion (see Note 2).
Warrants
On October 13, 2026, each holder of Skydance Corporation Class B Common Stock (excluding any Equity
Investor or affiliate thereof, any of the Company’s wholly owned subsidiaries that own Class B Common Stock,
the Paramount Global 401(k) Plan and the Paramount Global Master Trust) as of the October 5, 2026 record date
received, without payment of any consideration, one 10-year warrant (each, a “Warrant”) for each share held,
exercisable at an initial exercise price of $12.00 per share and subject to customary anti-dilution and fundamental
change make-whole adjustments. Warrants issued totaled approximately 470.7 million. Beginning on the third
anniversary of issuance, we may designate an earlier expiration date for 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
-35-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
day period. The Warrants commenced trading on the NYSE on October 13, 2026 separately from our Class B
Common Stock under the symbol “SKYD WS.”
In connection with the Warrant issuance, existing Skydance RSUs were equitably adjusted pursuant to pre-existing
anti-dilution provisions in Skydance equity plans.
Since the Warrants were only issued to certain holders of Skydance Corporation Class B Common Stock, the
estimated value of the Warrants is considered a deemed dividend, which results in the application of the two-class
method of EPS for the period the Warrants were issued. Accordingly, for the three months and year ending
December 31, 2026, earnings per share will be calculated separately for the holders of Skydance Corporation Class
B Common Stock receiving the deemed dividend and those not receiving the deemed dividend.
Impact from the Skydance Transactions
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
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 Skydance Corporation
RSU awards.
The Skydance Transactions included 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 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 Media were converted, at the stockholders’ election, into the right to receive the Class B Cash
Consideration (subject to proration) or the Class B Stock Consideration. The elections resulted in cash settlement
of 7.2 million shares of Paramount Global Class A Common Stock at a price of $23.00 per share and cash
settlement of 285.9 million shares of Paramount Global Class B Common Stock at a price of $15.00 per share for
which holders of the shares elected to receive the Class A Cash Consideration and Class B Cash Consideration,
respectively. In addition, holders of 2.0 million shares of Paramount Global Class A Common Stock elected to
receive the Class A Stock Consideration or made no election, and as such received shares of Paramount Skydance
Corporation Class B Common Stock at a conversion rate of 1.5333 , resulting in the issuance of 3.1 million shares
of Paramount Skydance Corporation Class B Common Stock. Elections made for the Class B Cash Consideration
were subject to a proration mechanism. Shares of Paramount Global Class B Common Stock for which elections to
receive Class B Cash Consideration were not made or were validly revoked remained issued and outstanding as
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 Skydance Transactions PIPE proceeds, and the remaining
$1.52 billion was provided to the Company. In exchange for these proceeds, the NAI Equity Investors and certain
other affiliates of investors in Skydance Media 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 the Skydance Transactions Warrants for the purchase of 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.
-36-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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.
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 | ||
Each share of Paramount Global Class A Common Stock converted to Stock | ||||
Each share of Paramount Global Class B Common Stock converted to Stock | ||||
Issuance of Paramount Skydance Corporation Class B Common Stock to the NAI Equity Investors and certain other affiliates of investors in Skydance Media in exchange for proceeds from the PIPE | ||||
Cancellation of cash-settled Class A Common Stock | ( | |||
Cancellation of cash-settled Class B Common Stock | ( | |||
Conversion of one share of stock-settled Class A Common Stock to | ( | |||
Issuance of Paramount Skydance Corporation Class B Common Stock to holders of Skydance Membership Units and Skydance Phantom Unit awards | ||||
Total share issuance, net of cancellations | ( | |||
Total shares of Paramount Skydance Corporation Class A and Class B Common Stock issued and outstanding after the Skydance Transactions on August 7, 2025 |
Common Stock Dividends
and B Common Stock for the Successor periods and Paramount Global’s Class A and Class B Common Stock for
the Predecessor periods.
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Class A and Class B Common Stock | |||||||||||||||||||||||||
Dividends declared per common share | $ | $ | n/a | $ | $ | $ | |||||||||||||||||||
Total common stock dividends | $ | $ | n/a | $ | $ | $ | |||||||||||||||||||
-37-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Accumulated Other Comprehensive Income (Loss)
(loss).
(Successor) | Cumulative Translation Adjustments | Net Actuarial Gain and Prior Service Cost | Cash Flow Hedges | Accumulated Other Comprehensive Income | |||||||||||
At December 31, 2025 | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||
At September 30, 2026 | $ | $ | $ | $ | |||||||||||
Cumulative Translation Adjustments | Net Actuarial Loss and Prior Service Cost | Cash Flow Hedges | Accumulated Other Comprehensive Income (Loss) | ||||||||||||
At December 31, 2024 (Predecessor) | $( | $( | $ | $( | |||||||||||
Other comprehensive income before reclassifications | |||||||||||||||
Reclassifications to net earnings | (a) | ||||||||||||||
Other comprehensive income | |||||||||||||||
At August 6, 2025 (Predecessor) | $( | $( | $ | $( | |||||||||||
Adjustments to Paramount Global’s basis | ( | ||||||||||||||
At August 7, 2025 (Successor) | $ | $ | $ | $ | |||||||||||
Other comprehensive income (loss) before reclassifications | ( | ||||||||||||||
Other comprehensive income (loss) | ( | ||||||||||||||
At September 30, 2025 (Successor) | $ | $ | $( | $ | |||||||||||
(a) Reflects amortization of net actuarial losses (see Note 13).
The cash flow hedges included in other comprehensive income (loss) are net of a tax expense of $27 million for the
nine months ended September 30, 2026 (Successor) and tax expense of $2 million for the period from January 1 -
August 6, 2025 (Predecessor). 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 $8 million for
-38-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
12) 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 nine months ended September 30, 2026 (Successor), we
recorded a provision for income taxes of $464 million and $739 million, reflecting an effective income tax rate of
affecting the comparability of our results, which in aggregate increased our effective income tax rate by 47.3
percentage points and 29.1 percentage points for their respective periods.
Impact from Items Affecting Comparability | ||||||||||||||||
Successor | ||||||||||||||||
Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | |||||||||||||||
Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | |||||||||||||
Restructuring charges (Note 5) | $( | $ | $( | $ | ||||||||||||
Transaction-related items (Note 5) | $( | $ | $( | $ | ||||||||||||
Net discrete tax provision (a) | n/a | $( | n/a | $( | ||||||||||||
n/a - not applicable
(a) Primarily attributable to the establishment of a reserve for uncertain tax positions discussed below.
On July 10, 2026, the Company received Notices of Proposed Adjustment (“NOPAs”) from the Internal Revenue
Service (“IRS”) for legacy Viacom Inc.’s 2017, 2018, and 2019 tax years regarding the tax treatment of certain
transactions between our subsidiaries. The Company disagrees with the proposed adjustments and is contesting
the NOPAs through the IRS’ administrative appeals process and, if necessary, through judicial proceedings.
While the uncertain tax position meets the more-likely-than-not recognition threshold, in applying the
measurement assessment, the Company currently believes that a portion of the benefit may not be realized upon
settlement and has recorded a reserve during the third quarter of 2026 for this item.
Our reserve for uncertain tax positions of $613 million at September 30, 2026 includes $537 million which
would affect our effective income tax rate, if and when recognized in future years. Liabilities for accrued interest
and penalties totaling $254 million as of September 30, 2026 are included within “Other current liabilities” and
“Other liabilities” on the Consolidated Balance Sheets.
For the period from August 7 - September 30, 2025 (Successor), we recorded a provision for income taxes of $85
million and for the periods from July 1 - August 6, 2025 and January 1 - August 6, 2025 (Predecessor), we
recorded a benefit from income taxes of $229 million and $79 million, respectively. The provision for income
taxes in the 2025 Successor period reflects the timing of foreign inclusions and foreign-derived intangible
income deductions between the Successor and Predecessor periods. The benefit from income taxes for the 2025
Predecessor periods reflects the tax impact of earnings attributable to noncontrolling interests, the timing of
foreign inclusions between the Successor and Predecessor periods, and the tax benefit on the foreign-derived
intangible income deduction.
-39-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Impact from Items Affecting Comparability | ||||||||||||||||
Successor | Predecessor | |||||||||||||||
Period From August 7 - September 30, | Period From July 1 - August 6, | |||||||||||||||
2025 | 2025 | |||||||||||||||
Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | |||||||||||||
Restructuring charges (Note 5) | $( | $ | $( | $ | ||||||||||||
Transaction-related items (Note 5) | $ | $ | $( | $ | ||||||||||||
Net discrete tax benefit (a) | n/a | $ | n/a | $ | ||||||||||||
n/a - not applicable
Nine Months Ended September 30, 2025
Impact from Items Affecting Comparability | ||||||||||||||||
Successor | Predecessor | |||||||||||||||
Period From August 7 - September 30, | Period From January 1 - August 6, | |||||||||||||||
2025 | 2025 | |||||||||||||||
Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | |||||||||||||
Restructuring charges (Note 5) | $( | $ | $( | $ | ||||||||||||
Transaction-related items (Note 5) | $ | $ | $( | $ | ||||||||||||
Impairment charges (Note 16) | $ | $ | $( | $ | ||||||||||||
Gain from dispositions | $ | $ | $ | $( | ||||||||||||
Net discrete tax benefit (a) | n/a | $ | n/a | $ | ||||||||||||
n/a - not applicable
(a) On July 4, 2025, the U.S. government enacted tax legislation, which included the extension of certain expired or expiring tax
provisions, including a favorable change to the interest deduction limitation, and modifications to certain international tax provisions.
The legislation has multiple effective dates with certain provisions effective in 2025. A favorable change to the interest deduction
limitation resulted in the reversal of the valuation allowance on our interest limitation carryforward deferred tax asset of $114 million.
The net discrete tax benefits for the 2025 Predecessor periods reflect this reversal, partially offset by a reserve for uncertain tax
positions.
-40-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
13) PENSION AND OTHER POSTRETIREMENT BENEFITS
The service cost component of net periodic cost is presented on the Consolidated Statements of Operations within
operating income, and all other components of net periodic cost are included within “Other items, net.”
Pension Benefits | Postretirement Benefits | ||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Components of net periodic cost (a): | |||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||||||||||
Amortization of actuarial loss (gain) (b) | ( | ||||||||||||||||||||||||
Net periodic cost | $ | $ | $ | $ | $ | $( | |||||||||||||||||||
Pension Benefits | Postretirement Benefits | ||||||||||||||||||||||||
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Components of net periodic cost (a): | |||||||||||||||||||||||||
Service cost | $ | $ | $ | $ | $ | $ | |||||||||||||||||||
Interest cost | |||||||||||||||||||||||||
Expected return on plan assets | ( | ( | ( | ||||||||||||||||||||||
Amortization of actuarial loss (gain) (b) | ( | ||||||||||||||||||||||||
Net periodic cost | $ | $ | $ | $ | $ | $( | |||||||||||||||||||
(a) Amounts reflect our domestic plans only.
14) SEGMENT INFORMATION
Company’s chief operating decision maker (“CODM”) as of and for the periods ended September 30, 2026, who is
the Company’s President, Andrew Brandon-Gordon. Beginning in 2026, we transitioned our reporting structure
into three
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
-41-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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.
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) attributable to Parent
before interest expense and income; provision for (benefit from) income taxes; other items; equity in earnings
(loss) of investee companies, net of tax; and depreciation and amortization, adjusted to exclude stock-based
compensation expense and certain items identified as affecting comparability that are not part of our normal
operations. 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, transaction-related items, other
corporate matters, 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.
-42-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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.
Successor | Predecessor | ||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | |||||||||||
2026 | 2025 | 2025 | |||||||||||
Revenues: | Revenues: | ||||||||||||
Studios | Filmed Entertainment | ||||||||||||
Theatrical | $ | $ | Theatrical | $ | |||||||||
Licensing and other | Licensing and other | ||||||||||||
Advertising | Advertising | ||||||||||||
Studios | Filmed Entertainment | ||||||||||||
Direct-to-Consumer | Direct-to-Consumer | ||||||||||||
Advertising | Advertising | ||||||||||||
Affiliate and subscription | Subscription | ||||||||||||
Licensing | Licensing | ||||||||||||
Direct-to-Consumer | Direct-to-Consumer | ||||||||||||
TV Media | TV Media | ||||||||||||
Advertising | Advertising | ||||||||||||
Affiliate and subscription | Affiliate and subscription | ||||||||||||
Licensing and other | Licensing and other | ||||||||||||
TV Media | TV Media | ||||||||||||
Eliminations | ( | ( | Eliminations | ( | |||||||||
Total Revenues | $ | $ | Total Revenues | $ | |||||||||
-43-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Successor | Predecessor | ||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | |||||||||||
2026 | 2025 | 2025 | |||||||||||
Revenues: | Revenues: | ||||||||||||
Studios | Filmed Entertainment | ||||||||||||
Theatrical | $ | $ | Theatrical | $ | |||||||||
Licensing and other | Licensing and other | ||||||||||||
Advertising | Advertising | ||||||||||||
Studios | Filmed Entertainment | ||||||||||||
Direct-to-Consumer | Direct-to-Consumer | ||||||||||||
Advertising | Advertising | ||||||||||||
Affiliate and subscription | Subscription | ||||||||||||
Licensing | Licensing | ||||||||||||
Direct-to-Consumer | Direct-to-Consumer | ||||||||||||
TV Media | TV Media | ||||||||||||
Advertising | Advertising | ||||||||||||
Affiliate and subscription | Affiliate and subscription | ||||||||||||
Licensing and other | Licensing and other | ||||||||||||
TV Media | TV Media | ||||||||||||
Eliminations | ( | ( | Eliminations | ( | |||||||||
Total Revenues | $ | $ | Total Revenues | $ | |||||||||
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 nine
months ended September 30, 2026 and the 2025 Successor period of August 7 – September 30, 2025,
intercompany revenues were all earned by the Studios segment. The table below presents intercompany revenue by
segment for the 2025 Predecessor periods.
Predecessor | |||||||
Period From July 1 - August 6, | Period From January 1 - August 6, | ||||||
2025 | 2025 | ||||||
Intercompany Revenues: | |||||||
TV Media | $ | $ | |||||
Filmed Entertainment | |||||||
Total Intercompany Revenues | $ | $ | |||||
-44-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Successor | Predecessor | ||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | |||||||||||
2026 | 2025 | 2025 | |||||||||||
Studios | Filmed Entertainment | ||||||||||||
Revenues | $ | $ | Revenues | $ | |||||||||
Content costs | Content costs | ||||||||||||
Advertising and marketing | Advertising and marketing | ||||||||||||
Other (a) | Other (a) | ||||||||||||
Total segment expenses | Total segment expenses | ||||||||||||
Studios Adjusted EBITDA | Filmed Entertainment Adjusted OIBDA | ( | |||||||||||
Direct-to-Consumer | Direct-to-Consumer | ||||||||||||
Revenues | Revenues | ||||||||||||
Content costs | Content costs | ||||||||||||
Advertising and marketing | Advertising and marketing | ||||||||||||
Other (b) | Other (b) | ||||||||||||
Total segment expenses | Total segment expenses | ||||||||||||
Direct-to-Consumer Adjusted EBITDA | Direct-to-Consumer Adjusted OIBDA | ||||||||||||
TV Media | TV Media | ||||||||||||
Revenues | Revenues | ||||||||||||
Content costs | Content costs | ||||||||||||
Advertising and marketing | Advertising and marketing | ||||||||||||
Other (c) | Other (c) | ||||||||||||
Total segment expenses | Total segment expenses | ||||||||||||
TV Media Adjusted EBITDA | TV Media Adjusted OIBDA | ||||||||||||
Corporate/Eliminations | ( | ( | Corporate/Eliminations | ( | |||||||||
Stock-based compensation (d) | ( | ( | Stock-based compensation (d) | ( | |||||||||
Depreciation and amortization | ( | ( | Depreciation and amortization | ( | |||||||||
Restructuring and transaction-related items (d) | ( | ( | Restructuring and transaction-related items (d) | ( | |||||||||
Operating income | Operating income | ||||||||||||
Interest expense | ( | ( | Interest expense | ( | |||||||||
Interest income | Interest income | ||||||||||||
Net gain on derivatives | Net gain on derivatives | ||||||||||||
Other items, net | ( | ( | 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 | ( | ( | Benefit from income taxes | ||||||||||
Equity in loss of investee companies, net of tax | ( | ( | Equity in loss of investee companies, net of tax | ( | |||||||||
Net earnings (Parent and noncontrolling interests) | Net earnings (Parent and noncontrolling interests) | ||||||||||||
Net earnings attributable to noncontrolling interests | ( | ( | Net earnings attributable to noncontrolling interests | ( | |||||||||
Net earnings (loss) attributable to Parent | $ | $( | Net loss attributable to Parent | $( | |||||||||
-45-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Successor | Predecessor | ||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | |||||||||||
2026 | 2025 | 2025 | |||||||||||
Studios | Filmed Entertainment | ||||||||||||
Revenues | $ | $ | Revenues | $ | |||||||||
Content costs | Content costs | ||||||||||||
Advertising and marketing | Advertising and marketing | ||||||||||||
Other (a) | Other (a) | ||||||||||||
Total segment expenses | Total segment expenses | ||||||||||||
Studios Adjusted EBITDA | Filmed Entertainment Adjusted OIBDA | ( | |||||||||||
Direct-to-Consumer | Direct-to-Consumer | ||||||||||||
Revenues | Revenues | ||||||||||||
Content costs | Content costs | ||||||||||||
Advertising and marketing | Advertising and marketing | ||||||||||||
Other (b) | Other (b) | ||||||||||||
Total segment expenses | Total segment expenses | ||||||||||||
Direct-to-Consumer Adjusted EBITDA | Direct-to-Consumer Adjusted OIBDA | ||||||||||||
TV Media | TV Media | ||||||||||||
Revenues | Revenues | ||||||||||||
Content costs | Content costs | ||||||||||||
Advertising and marketing | Advertising and marketing | ||||||||||||
Other (c) | Other (c) | ||||||||||||
Total segment expenses | Total segment expenses | ||||||||||||
TV Media Adjusted EBITDA | TV Media Adjusted OIBDA | ||||||||||||
Corporate/Eliminations | ( | ( | Corporate/Eliminations | ( | |||||||||
Stock-based compensation (d) | ( | ( | Stock-based compensation (d) | ( | |||||||||
Depreciation and amortization | ( | ( | Depreciation and amortization | ( | |||||||||
Impairment charges | Impairment charges | ( | |||||||||||
Restructuring and transaction-related items (d) | ( | ( | Restructuring and transaction-related items (d) | ( | |||||||||
Gain on dispositions | Gain on dispositions | ||||||||||||
Operating income | Operating income | ||||||||||||
Interest expense | ( | ( | Interest expense | ( | |||||||||
Interest income | Interest income | ||||||||||||
Net gain on derivatives | Net gain on derivatives | ||||||||||||
Other items, net | ( | ( | 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 | ( | ( | Benefit from income taxes | ||||||||||
Equity in loss of investee companies, net of tax | ( | ( | Equity in loss of investee companies, net of tax | ( | |||||||||
Net earnings (Parent and noncontrolling interests) | Net earnings (Parent and noncontrolling interests) | ||||||||||||
Net earnings attributable to noncontrolling interests | ( | ( | Net earnings attributable to noncontrolling interests | ( | |||||||||
Net earnings (loss) attributable to Parent | $ | $( | Net loss attributable to Parent | $( | |||||||||
-46-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
(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.
(b) Other segment expenses for our Direct-to-Consumer segment in both the Successor and Predecessor periods include employee
compensation; revenue-sharing costs, including for third-party distribution; costs for occupancy, technology, and professional
services; and other costs associated with our operations.
(c) Other segment expenses for our TV Media segment in both the Successor and Predecessor periods include employee compensation;
revenue-sharing costs to television stations affiliated with the CBS Television Network; costs relating to the distribution of our
content; costs for research, occupancy, technology, and professional services; and other costs associated with our operations.
(d) For the Successor periods for the three and nine months ended September 30, 2026 and August 7 - September 30, 2025, stock-
based compensation expense of $27 million, $36 million and $30 million, respectively, is included in “Restructuring and
transaction-related items.” For the Predecessor periods from July 1 - August 6, 2025 and January 1 - August 6, 2025, stock-based
15) COMMITMENTS AND CONTINGENCIES
Guarantees
Letters of Credit and Surety Bonds
At September 30, 2026, we had outstanding letters of credit and surety bonds of $711 million that were not
recorded on the Consolidated Balance Sheet, including $454 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, contains customary representations and warranties and covenants substantively similar to the credit
facilities under the Pro Rata Credit Agreement, including the same principal financial covenant (see Note 8), and is
secured on a first lien basis by the same collateral as the Pro Rata Credit Agreement effective at closing of the
WBD Merger.
Other
In the course of our business, we both provide and receive indemnities that are intended to allocate certain risks
associated with business transactions. Similarly, we may remain contingently liable for various obligations of a
business that has been divested in the event that a third party does not live up to its obligations under an
indemnification obligation. We record a liability for our indemnification obligations and other contingent liabilities
when probable and reasonably estimable.
-47-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Legal Matters
General
On an ongoing basis, we vigorously defend ourselves in numerous lawsuits and proceedings and respond to
various investigations and inquiries from federal, state, local and international authorities (collectively,
“Litigation”). Litigation may be brought against us without merit, and is inherently uncertain and always difficult
to predict. However, based on our understanding and evaluation of the relevant facts and circumstances, we believe
that the following matters are not likely, in the aggregate, to result in a material adverse effect on our business,
financial condition and results of operations.
Litigation Relating to the WBD Merger
In April 2026, Pamela Faust, together with four other consumers of streaming, cable television, news media, and
theatrical entertainment programming, filed a private antitrust action in the U.S. District Court for the Northern
District of California against the Company and Skydance Media relating to the WBD Merger. The complaint
sought 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 in July 2026 on the
plaintiffs’ motion for a preliminary injunction and our motion to dismiss. The Court denied the plaintiffs’ motion
for a preliminary injunction and in August 2026 granted our motion to dismiss. In August 2026, the plaintiffs filed
an amended complaint, which we moved to dismiss the same month. In September 2026, the plaintiffs filed a
second motion for a temporary restraining order, which we opposed, and the Court denied on September 30, 2026.
The plaintiffs moved for injunctive relief before the U.S. Court of Appeals for the Ninth Circuit and that request
was denied. Faust also filed a petition for a writ of certiorari with the U.S. Supreme Court related to the injunctive
relief, which was also denied. On October 16, 2026, the plaintiffs filed a motion for preliminary injunction seeking
separate operation and preservation of acquired assets. On October 21, 2026, the Court held a hearing on our
motion to dismiss the amended complaint, which the Court granted later that day. On October 28, 2026, we filed an
opposition to the plaintiffs’ motion for preliminary injunction seeking separate operation and preservation of
acquired assets. On November 2, 2026, the Court denied the plaintiffs’ motion for a preliminary injunction.
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 the Company and WBD relating to the WBD Merger. The complaint sought
to block the WBD Merger, among other relief. On July 13, 2026, the plaintiff-states filed a motion for a temporary
restraining order and to show cause why a preliminary injunction should not issue. We filed our opposition on July
16, 2026, and the Court held a hearing on the plaintiff-states’ motion on July 17, 2026. On July 20, 2026, the Court
granted the motion for a temporary restraining order and set a briefing schedule for the preliminary injunction. On
July 22, 2026, we filed a motion seeking a three-day evidentiary hearing for the preliminary injunction during the
week of August 17 or August 24 and to amend the briefing schedule. On July 23, 2026, the plaintiff-states
informed the Court that they would not file their preliminary injunction motion that day, and that the filing timeline
would depend on the outcome of further discussions with the defendants. On July 24, 2026, the plaintiff-states, the
WGA plaintiffs (described below), and defendants entered a stipulation agreeing that the WBD Merger will not
close, and defendants will not take any steps to integrate their operations, until the earlier of (1) five days after a
merits determination in these actions or (2) June 1, 2027. The parties also cancelled the briefing schedule and the
August 3, 2026 hearing on the plaintiff-states’ preliminary injunction motion and agreed to file a joint trial-
scheduling statement by July 31, 2026. The Court granted the stipulation the same day. On July 31, 2026, the
parties, together with the WGA plaintiffs, filed a joint scheduling statement. On August 4, 2026, the Court entered
an order for a single 12-day trial beginning March 2, 2027 and ending March 19, 2027 covering both the plaintiff-
states’ and WGA plaintiffs’ cases. On September 21, 2026, the plaintiff-states, the Company, and WBD filed a
-48-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
proposed consent decree with the Court that would resolve the plaintiff-states’ claims. The Court held a hearing
regarding the proposed consent decree and on September 30, 2026, entered the proposed consent decree and
dissolved its July 24, 2026 order that barred the WBD Merger from closing.
In July 2026, the Writers Guild of America, West, Inc., and Writers Guild of America, East, Inc. (collectively, the
“WGA”) filed a private antitrust action in the U.S. District Court for the Northern District of California against the
Company and WBD relating to the WBD Merger. The complaint sought to block the WBD Merger, among other
relief. On July 17, 2026, the case was reassigned to Judge Araceli Martinez-Olguin from Magistrate Judge Peter H.
Kang. On July 21, 2026, the plaintiffs filed a motion for a preliminary injunction and a motion to expedite the
preliminary injunction briefing schedule. On July 22, 2026, we filed an opposition to the motion to expedite. On
July 23, 2026, the plaintiffs filed a reply to the motion to expedite. That same day, the Court issued an order
aligning the briefing schedule on the motions for preliminary injunction in both the state and the WGA actions,
extending the temporary restraining order to August 17, 2026. On July 24, 2026, the plaintiff-states, the WGA
plaintiffs, and the defendants entered a stipulation agreeing that the WBD Merger will not close, and defendants
will not take any steps to integrate their operations as described above. The stipulation also provides that the WGA
plaintiffs will withdraw their preliminary injunction motion and that the parties will file a joint trial-scheduling
statement by July 31, 2026. The Court granted the stipulation the same day. As described above, on August 4,
2026, the Court entered an order for a single 12-day trial beginning March 2, 2027 and ending March 19, 2027
covering both the plaintiff-states’ and WGA plaintiffs’ cases. On September 21, 2026, the WGA, the Company,
and WBD announced that they had entered into a settlement agreement resolving the WGA’s claims and filed a
voluntary dismissal of the WGA’s claims with prejudice. On September 30, 2026, the Court dissolved its July 24,
2026 order that barred the WBD Merger from closing.
In July 2026, Paul Robbins, a Skydance 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
the Company’s acquisition of WBD. The plaintiff sought to enjoin the WBD Merger and monetary damages,
among other relief, and asked the Court to expedite the proceedings to allow him to seek an injunction. In August
2026, the plaintiff filed an amended complaint and again asked the Court to expedite the proceedings. The
defendants opposed expedition in August 2026, and the plaintiff replied on September 1, 2026. On September 3,
2026, the Court held oral argument on the plaintiff’s motion to expedite. Following the argument, the Court denied
the plaintiff’s motion to expedite. On September 21, 2026, the plaintiff filed a notice and request to voluntarily
dismiss the action without prejudice. The Court granted the requested dismissal without prejudice the same day.
In addition, we have received demand letters from purported holders of our Class B Common Stock requesting the
inspection of books and records to investigate possible breaches of fiduciary duties or other misconduct in
connection with the WBD Merger.
Litigation Relating to the Skydance Transactions
In connection with the Skydance Transactions, in July 2024, Scott Baker, a purported holder of Paramount Global
Class B Common Stock, filed a putative class action lawsuit in the Court of Chancery of the State of Delaware
against NAI, Shari E. Redstone, Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr.,
Susan Schuman, Skydance Media 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
-49-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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.
In February 2025, the Court granted an implementing order returning the 220 Action to the magistrate judge for
further proceedings on the scope of production. In March 2025, the Court granted our application for certification
of interlocutory appeal to the Delaware Supreme Court, which was accepted in April 2025. In March 2026, the
Delaware Supreme Court affirmed the trial court’s decision and remanded the case for further proceedings. The
parties submitted supplemental briefs to the Court in June 2026 and submitted reply supplemental briefs in July
2026 concerning the appropriate scope of further inspection. In August 2026, the parties reached an agreement
concerning the review and production of certain documents to resolve all outstanding disputes between the parties
regarding the inspection. In November 2026, the parties entered a stipulation of dismissal.
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. The defendants were never served. The
parties exchanged several filings related to service and default. In August 2025, the magistrate judge issued a
Report and Recommendation recommending that the case be dismissed and that the Court impose $10,000 in
monetary sanctions against LiveVideo.AI Corp. In September 2025, the district judge adopted the report in full,
dismissed the case, imposed the sanctions, and enjoined LiveVideo.AI Corp. from filing any further lawsuits in any
federal district court arising out of the Skydance Transactions. LiveVideo.AI Corp. filed a notice of appeal in
November 2025, and in April 2026, the appeal was dismissed. In April 2026, LiveVideo.AI Corp. moved to
reinstate the appeal, and in May 2026, the Court denied the motion. LiveVideo.AI Corp. again moved to reinstate
the appeal in June 2026. In June 2026, following briefing, the Court granted defendants’ motion for sanctions
against LiveVideo.AI Corp. and its counsel. LiveVideo.AI Corp. filed a notice of appeal in July 2026.
-50-
SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
LiveVideo.AI Corp. filed its brief in October 2026, and in November 2026, NAI requested a deadline to file its
opening brief in January 2027.
In August 2025, Gabelli Value 25 Fund Inc. (“Gabelli”) filed a putative class action complaint in the Court of
Chancery of the State of Delaware against Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E.
Phillips, Jr., Susan Schuman, Harbor Lights Entertainment, Inc. (f/k/a National Amusements, Inc.) and Shari E.
Redstone (the “NAI Defendants”), and Skydance Media, LLC and RB Tentpole LP (the “Skydance Defendants”),
alleging breach of fiduciary duty against all defendants and unjust enrichment against the NAI Defendants (the
“Gabelli Action”). Gabelli seeks a declaratory judgment, damages, including rescissory damages and/or quasi-
appraisal damages, disgorgement of NAI’s profits, fees and costs, and pre- and post-judgment interest. In
September 2025, the Skydance Defendants filed placeholder motions to dismiss, and Gabelli filed a motion to be
appointed as interim lead plaintiff representing former minority holders of Paramount Global Class A Common
Stock (the “Gabelli Class A Leadership Motion”). In October 2025, counsel for Gabelli filed a letter with the Court
indicating that no competing motions or objections to the Gabelli Class A Leadership Motion were filed and
proposed that the Court appoint Gabelli as lead plaintiff. In November 2025, the Court granted the Gabelli Class A
Leadership Motion and appointed Gabelli as lead plaintiff to prosecute the claims on behalf of the Class A
minority stockholders. 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 Media, including,
specifically, Project Rise Partners, after the no-shop period began. The plaintiffs further assert that the Court has
the power to invalidate this provision because Skydance Media 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
Media’s separate agreement with NAI) for any breach of fiduciary duty claims arising out of the Skydance
Transactions up to a certain amount. Skydance Media, 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.
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 Media, 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 Media, 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.
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SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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 an
order consolidating the Baker Action and the NYCERS Action (the “Class B Action”).
In April 2025, Metropolitan Water Reclamation District Retirement Fund, Laborers’ and Retirement Board
Employees’ Annuity and Benefit Fund of Chicago, Gary Mendelsohn, and Park Employees’ Annuity and Benefit
Fund of Chicago, purported holders of Paramount Global Class B Common Stock, filed a complaint for the
inspection of books and records under Section 220 of the DGCL in the Court of Chancery of the State of Delaware
against us to maintain standing to enforce their statutory inspection rights and seek an order to produce all the
books and records identified in their Section 220 demands to investigate possible breaches of fiduciary duties in
connection with the Skydance Transactions. The complaint alleges that the documents produced to such purported
stockholders thus far pursuant to their Section 220 demands are insufficient. The complaint seeks an order
requiring us to produce the documents identified in their Section 220 demands, among other relief. In November
2025, the parties contacted the Court with a request to lift the stay and schedule a trial. A magistrate judge held a
trial in March 2026. Subsequently, the parties simultaneously submitted supplemental briefs in April 2026. The
Court issued a decision in June 2026, which held in part that inspection of certain informal board materials would
be necessary and essential to satisfy plaintiffs’ demands.
In the Class B Action, two plenary complaints were filed in October 2026. The first complaint was brought by
Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago, Gary Mendelsohn,
Metropolitan Water Reclamation District Retirement Fund, Park Employees’ Annuity and Benefit Fund of
Chicago, State of Rhode Island Office of the General Treasurer, on behalf of the Employees’ Retirement System of
Rhode Island, and Frank Lupacchino. The complaint asserts class action claims for (1) breach of fiduciary duty
against NAI and Shari E. Redstone, (2) breach of fiduciary duty against Shari E. Redstone as director of Paramount
Global, and (3) aiding and abetting breaches of fiduciary duty against Skydance Media, LLC, David Ellison, and
RB Tentpole LP. Plaintiffs seek judgment in their favor, equitable relief, damages, and costs. The second
complaint was brought by 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 Deferred Compensation Plan, and the
Teachers’ Retirement System of the City of New York Variable Annuity Funds. The complaint asserts class action
claims for (1) breach of fiduciary duty against NAI and Shari E. Redstone as controlling stockholders of
Paramount Global, (2) breach of fiduciary duty against Shari E. Redstone as director of Paramount Global, (3)
breach of fiduciary duty against Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr.,
and Susan Schuman, and (4) aiding and abetting breach of fiduciary duty against David Ellison, Lawrence J.
Ellison, Pinnacle Media Ventures LLC, Pinnacle Media Ventures II LLC, Pinnacle Media Ventures III LLC, and
RB Tentpole LP. Plaintiffs seek judgment in their favor, damages, and costs. Briefing on leadership applications in
the Class B Action will follow in November 2026.
Litigation Relating to Video Streaming Patents
In August 2025, Nokia Technologies Oy filed complaints alleging infringement of patents related to video
streaming against the Company in the United States, Brazil, Germany and the Unified Patent Court (“UPC”) in
Europe. In November 2025, the Company filed a rate-setting action against Nokia in the High Court of Justice of
England and Wales (“U.K. Court”). In March 2026, Nokia submitted to the jurisdiction of the U.K. Court and
agreed to a mechanism in which the U.K. Court would determine reasonable and non-discriminatory terms for a
global license to Nokia’s video patent portfolio, the Company 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
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SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
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 the Company 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.
Over the past several years, Nokia Corporation and Nokia Technologies Oy have alleged that WBD is infringing
on their portfolio of patents related to the delivery of streaming video. In November 2025, Nokia brought suit
against WBD in certain jurisdictions, and WBD and Dplay Entertainment Limited brought suit in other
jurisdictions, and filed a rate-setting proceeding in the U.K. Court against Nokia seeking a determination of a
reasonable and non-discriminatory royalty rate for a global license to certain Nokia patents, including standard-
essential patents related to the H.264/AVC and H.265/HEVC standards and other non-essential multimedia patents.
In June 2026, the U.K. Court determined that WBD is required to make an interim license payment to Nokia
during the pendency of the litigation, which includes refundable and non-refundable components, and trial is
currently scheduled for late 2026.
Claims Related to Former Businesses
Asbestos
We are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which
allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a
predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of
asbestos. We are typically named as one of a large number of defendants in both state and federal cases. In the
majority of asbestos lawsuits, the plaintiffs have not identified which of our products is the basis of a claim. Claims
against us in which a product has been identified most commonly relate to allegations of exposure to asbestos-
containing insulating material used in conjunction with turbines and electrical equipment.
Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and
the number of pending claims, subject to significant fluctuation from period to period. We do not report as pending
those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants
who allege minimal or no impairment. As of September 30, 2026, we had pending approximately 16,770 asbestos
claims, as compared with approximately 17,490 as of December 31, 2025. During the third quarter of 2026, we
received approximately 840 new claims and closed or moved to an inactive docket approximately 2,370 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.
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SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Environmental and Other
From time to time, we also receive claims from federal and state environmental regulatory agencies and other
entities asserting that we are or may be liable for environmental cleanup costs and related damages principally
relating to our historical and predecessor operations. In addition, from time to time we receive personal injury
claims including toxic tort and product liability claims (other than asbestos) arising from our historical operations
and predecessors.
Contingent Liabilities Relating to Former Businesses
In connection with recording Paramount Global’s net assets at the Ultimate Parent’s basis, “Other liabilities” was
increased to reflect the fair value of Paramount Global’s estimated contingent liabilities for the defense and
settlement of asbestos lawsuits as well as claims from federal and state environmental regulatory agencies and
other entities asserting liability for environmental cleanup costs and related damages (see Note 3). 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
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.
16) SUPPLEMENTAL FINANCIAL INFORMATION
Successor | Predecessor | |||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||
2026 | 2025 | 2025 | ||||||||||
Cash paid for interest | $ | $ | $ | |||||||||
Cash (received) paid for income taxes | $( | $ | $ | |||||||||
Noncash additions to operating lease assets | $ | $ | $ | |||||||||
The cash balance on August 6, 2025 (Predecessor) was $2.46 billion. The cash balance on August 7, 2025
(Successor) was $3.85 billion. The difference reflects the proceeds received from the Skydance Transactions PIPE
(see Note 3) and cash received from Skydance Media’s opening balance sheet, offset by cash paid for transaction-
related costs incurred prior to the closing of the Skydance Transactions.
In connection with the closing of the Skydance Transactions, on August 7, 2025 (Successor), borrowings
outstanding of $720 million under Skydance Media’s revolving credit facility were repaid in full.
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SKYDANCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Tabular amounts in millions, except per share amounts)
Lease Income
We enter into operating leases for the use of our owned production facilities and office buildings. Lease payments
received under these agreements consist of fixed payments for the rental of space and certain building operating
costs, as well as variable payments based on usage of production facilities and services, and escalating costs of
building operations. We recorded total lease income, including both fixed and variable amounts, of $7 million and
$23 million for the three and nine months ended September 30, 2026 (Successor), respectively, and $7 million, $2
million, and $23 million for the periods from August 7 - September 30, 2025 (Successor), July 1 - August 6, 2025
(Predecessor), and January 1 - August 6, 2025 (Predecessor), respectively.
FCC Licenses Impairment Charges (Predecessor)
Prior to the third quarter of 2025, FCC licenses were classified as indefinite-lived intangible assets, which were
tested for impairment on an annual basis and between annual tests if events occurred or circumstances changed that
would more likely than not reduce the fair value below carrying value. For the second quarter of 2025, as a result
of declines in industry projections, we determined that interim impairment tests were necessary for six markets in
which we hold FCC licenses.
The impairment tests indicated that the estimated fair values of FCC licenses in each of the six markets tested were
below their respective carrying values. Accordingly, we recorded an impairment charge during the second quarter
of 2025 of $157 million to write down the carrying values of these FCC licenses to their then aggregate estimated
fair value.
-55-
Item 2. | Management’s Discussion and Analysis of Results of Operations and Financial Condition. |
(Tabular amounts in millions, except per share amounts) |
Management’s discussion and analysis of the results of operations and financial condition of Skydance Corporation
should be read in conjunction with the more detailed financial statements and notes thereto included in our Form 8-
K filed with the Securities and Exchange Commission on May 13, 2026, which was filed in order to recast the
financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 to reflect
our new segment presentation.
The NAI Transaction and the Skydance Transactions—On August 7, 2025, pursuant to a purchase and sale
agreement dated July 7, 2024, certain affiliates of investors in Skydance Media, LLC (“Skydance Media”),
comprised of entities controlled by the Ellison Family (as defined below) 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”). 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 Media 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., and now
known as Skydance Corporation, was formed on June 3, 2024 to consummate the Skydance 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 Media as part of the Skydance Transactions. See Note 3 to the
consolidated financial statements.
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 Skydance Corporation Class A Common Stock.
Holders of shares of Class A common stock of Skydance Corporation (“Skydance Corporation Class A Common
Stock”) are entitled to one vote per share with respect to all matters on which the holders of Skydance Corporation
common stock are entitled to vote. Holders of Skydance Corporation Class B Common Stock do not have voting
rights. Accordingly, entities controlled by the Ellison Family (as defined below) indirectly hold approximately
77.5% of 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 the Company (“Ultimate Parent”). For the purpose of determining the controlling ownership
of the Company, the Ellison family is comprised of Lawrence J. Ellison and David Ellison (the “Ellison Family”).
David Ellison is the son of Lawrence J. Ellison, and Lawrence J. Ellison and David Ellison are accordingly
considered immediate family members.
Pushdown of Ultimate Parent’s Basis—At the time Paramount Global and Skydance Media became subsidiaries of
Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance Media, 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 3 to the consolidated financial statements). 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 Media were already at the Ultimate
Parent’s basis, no adjustment to the fair value of net assets was necessary, and Skydance Media was combined with
Paramount Global’s net assets at the Ultimate Parent’s basis as of this date.
-56-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
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 Skydance Corporation and
are identified as “Successor.” In addition, we are required to present segment information for the Predecessor
period based on our previous segments, Filmed Entertainment, Direct-to-Consumer, and TV Media.
We have certain contracts that require us to obtain consents from other parties in connection with the NAI
Transaction and the Skydance Transactions. If these consents cannot be obtained, the counterparties to these
contracts (and, as a result, other third parties with which we have contractual agreements) may have the right to
terminate, reduce the scope of or otherwise alter their relationships with us. Accordingly, the failure to obtain such
consents could have a material adverse effect on our business, financial condition and results of operations.
Significant components of management’s discussion and analysis of results of operations and financial condition
include:
•Overview—Summary of our business and operational highlights.
•Consolidated Results of Operations—Analysis of our results on a consolidated basis for the three and nine
months ended September 30, 2026 (Successor), the period from August 7 - September 30, 2025
(Successor) and for the periods from July 1 - August 6, 2025 and January 1 - August 6, 2025
(Predecessor).
•Segment Results of Operations—Analysis of our results on a reportable segment basis for the three and
nine months ended September 30, 2026 (Successor), the period from August 7 - September 30, 2025
(Successor) and for the periods from July 1 - August 6, 2025 and January 1 - August 6, 2025
(Predecessor).
•Liquidity and Capital Resources—Discussion of our cash flows, including sources and uses of cash, for the
nine months ended September 30, 2026 (Successor), for the periods from August 7 - September 30, 2025
(Successor) and January 1 - August 6, 2025 (Predecessor), and of our outstanding debt as of September 30,
2026 (Successor), including Supplemental Guarantor Financial Information.
•Legal Matters—Discussion of legal matters to which we are involved.
Warner Bros. Discovery Merger (Subsequent Event)—On October 6, 2026 (the “Closing Date”), we completed the
acquisition (the “WBD Merger”) of Warner Bros. Discovery, Inc. (“WBD”) pursuant to the previously announced
definitive merger agreement (the “WBD Merger Agreement”). See Notes 2, 8 and 11 to the consolidated financial
statements. Also on October 6, 2026, in connection with the WBD Merger, we amended our certificate of
incorporation (the “charter amendment”) to, among other things, change our name from Paramount Skydance
Corporation to Skydance Corporation. References herein to “Skydance,” “Skydance Corporation” or the
“Company” refer, prior to such charter amendment, to Paramount Skydance Corporation, and following such
charter amendment to Skydance Corporation, unless the context otherwise requires reference to Paramount
Skydance Corporation. Also effective October 6, 2026, shares of Skydance Corporation Class B Common Stock
trade on the New York Stock Exchange (“NYSE”) under the trading symbol “SKYD.” WBD will be included in
our results beginning on October 6, 2026 and as a result is not reflected in the below discussion.
-57-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Overview
Operational Highlights - Three Months Ended September 30, 2026 and 2025
Successor | Predecessor | Supplemental Pro Forma Revenues (a) (Non-GAAP) | ||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Pro Forma Increase/(Decrease) | ||||||||||||||||||
Consolidated Results of Operations | 2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||
GAAP: | ||||||||||||||||||||||
Revenues | $7,025 | $4,121 | $2,581 | $6,714 | $311 | 5% | ||||||||||||||||
Operating income | $368 | $244 | $80 | |||||||||||||||||||
Net earnings (loss) attributable to Parent | $73 | $(13) | $(244) | |||||||||||||||||||
Diluted EPS | $.06 | $(.01) | $(.36) | |||||||||||||||||||
Non-GAAP: (b) | ||||||||||||||||||||||
Adjusted EBITDA | $1,000 | $684 | $313 | |||||||||||||||||||
Adjusted net earnings (loss) attributable to Parent | $506 | $138 | $(162) | |||||||||||||||||||
Adjusted diluted EPS | $.45 | $.12 | $(.24) | |||||||||||||||||||
(a) Supplemental Pro Forma Revenues for the three months ended September 30, 2025 reflect the combination of the Successor period
with the Predecessor period from July 1 - August 6, 2025 and also include $12 million of Skydance Media revenues after the
elimination of intercompany revenues from Paramount Global during the Predecessor period from July 1 - August 6, 2025. While
the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the new accounting basis
established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined basis to help investors
view these revenues in a manner consistent with our management.
(b) See “Reconciliation of Non-GAAP Measures” for reconciliations of these non-GAAP measures to the most directly comparable
financial measures in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”).
Revenues for the third quarter of 2026 and the Successor period of 2025 include Skydance Media, and in each
period reflect the benefit from subscriber growth and pricing increases for Paramount+ as well as linear declines.
On a pro forma basis, revenues increased 5%, principally reflecting higher licensing revenue as well as growth in
Paramount+ subscription revenue, partially offset by declines in linear revenues. The increase in licensing revenue
was driven by higher revenues from content produced for third parties and licensing in the secondary market.
Skydance Media is included in our results in periods following the close of the Skydance Transactions on August
7, 2025. In addition, as a result of the pushdown of the Ultimate Parent’s basis, operating income, net earnings
attributable to Parent, and diluted EPS in 2026 and the 2025 Successor period include amortization associated with
the establishment of intangible assets and also reflect the impact on content costs from the net decrease in
programming assets. Net earnings and diluted EPS also include interest expense associated with the adjustment of
Paramount Global’s debt to its fair value. See Note 3 to the consolidated financial statements for details relating to
the pushdown of the Ultimate Parent’s basis.
-58-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Operating income for the three months ended September 30, 2026 of $368 million includes restructuring charges
and transaction-related items totaling $187 million. In 2025, operating income for the Successor period of $244
million and $80 million for the Predecessor period includes restructuring charges and transaction-related items
totaling $185 million and $188 million, respectively.
Net earnings attributable to Parent of $73 million, or $.06 per diluted share for the three months ended September
30, 2026 includes a gain from non-designated interest rate contracts of $514 million offset by a net discrete tax
provision of $275 million principally from the establishment of a reserve for uncertain tax positions.
Adjusted net earnings attributable to Parent, which excludes the restructuring charges and transaction-related items
as well as the discrete tax provision noted above, was $506 million, or $.45 per diluted share for the three months
ended September 30, 2026, $138 million, or $.12 per diluted share for the 2025 Successor period, and an adjusted
net loss of $162 million, or $.24 per diluted share for the 2025 Predecessor period. The third quarter of 2026
includes the gain on interest rate contracts noted above. Diluted EPS and adjusted diluted EPS in the Successor
periods also reflect shares issued in connection with the Skydance Transactions and the NAI Transaction. See
Reconciliation of Non-GAAP Measures for the definition of adjusted net earnings attributable to Parent and a
reconciliation to net earnings attributable to Parent.
Adjusted EBITDA in the three months ended September 30, 2026 includes increased investment in content for
Paramount+, partially offset by cost savings for our linear programming. The 2026 and 2025 Successor periods
include the impact on content costs from reductions in programming assets resulting from the pushdown of the
Ultimate Parent’s basis. See Reconciliation of Non-GAAP Measures for the definition of Adjusted EBITDA and a
reconciliation to net earnings attributable to Parent, the most directly comparable financial measure in accordance
with U.S. GAAP.
-59-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Operational Highlights - Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Supplemental Pro Forma Revenues (a) (Non-GAAP) | ||||||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Pro Forma Increase/(Decrease) | ||||||||||||||||||
Consolidated Results of Operations | 2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||
GAAP: | ||||||||||||||||||||||
Revenues | $21,285 | $4,121 | $16,622 | $21,246 | $39 | —% | ||||||||||||||||
Operating income | $1,459 | $244 | $1,029 | |||||||||||||||||||
Net earnings (loss) attributable to Parent | $282 | $(13) | $(35) | |||||||||||||||||||
Diluted EPS | $.25 | $(.01) | $(.05) | |||||||||||||||||||
Non-GAAP: (b) | ||||||||||||||||||||||
Adjusted EBITDA | $3,260 | $684 | $1,908 | |||||||||||||||||||
Adjusted net earnings attributable to Parent | $972 | $138 | $348 | |||||||||||||||||||
Adjusted diluted EPS | $.87 | $.12 | $.51 | |||||||||||||||||||
(a) Supplemental Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the Successor period
with the Predecessor period from January 1 - August 6, 2025 and also include $503 million of Skydance Media revenues after the
elimination of intercompany revenues from Paramount Global during the Predecessor period from January 1 - August 6, 2025.
While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the new accounting
basis established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined basis to help
investors view these revenues in a manner consistent with our management.
(b) See “Reconciliation of Non-GAAP Measures” for reconciliations of these non-GAAP measures to the most directly comparable
financial measures in accordance with U.S. GAAP.
Revenues in the Successor periods include Skydance Media. On a pro forma basis, revenues remained flat,
reflecting higher licensing revenue as well as growth in Paramount+ subscription revenue, partially offset by
declines in linear and theatrical revenue.
As discussed above, periods following the closing of the Skydance Transactions on August 7, 2025 reflect the
inclusion of Skydance Media and the effects of the pushdown of the Ultimate Parent’s basis.
Operating income for the nine months ended September 30, 2026 of $1.46 billion includes restructuring charges
and transaction-related items totaling $478 million. In 2025, operating income for the Successor period of $244
million and $1.03 billion for the Predecessor period includes restructuring charges and transaction-related items
totaling $185 million and $454 million, respectively.
-60-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Net earnings attributable to Parent of $282 million, or $.25 per diluted share for the nine months ended
September 30, 2026 includes a net gain from non-designated interest rate contracts of $502 million and the
negative impact of net discrete tax items of $267 million. For the period from August 7 - September 30, 2025
(Successor), and for the period from January 1 - August 6, 2025 (Predecessor), the net loss attributable to Parent
benefited from discrete tax items of $4 million and $64 million, respectively. In addition, during the Predecessor
period from January 1 - August 6, 2025 net earnings attributable to noncontrolling interests was $447 million.
Adjusted net earnings attributable to Parent, which excludes the restructuring charges and transaction-related items,
as well as the discrete tax provision noted above, was $972 million, or $.87 per diluted share for the nine months
ended September 30, 2026, $138 million, or $.12 per diluted share for the 2025 Successor period, and $348
million, or $.51 per diluted share for the 2025 Predecessor period. The 2026 period includes the gain on the interest
rate contracts noted above. Diluted EPS and adjusted diluted EPS in the Successor periods also reflect shares
issued in connection with the Skydance Transactions and the NAI Transaction. See Reconciliation of Non-GAAP
Measures for the definition of adjusted net earnings attributable to Parent and a reconciliation to net earnings
attributable to Parent.
Adjusted EBITDA in the Successor periods includes the impact from reductions in programming assets resulting
from the pushdown of the Ultimate Parent’s basis. See Reconciliation of Non-GAAP Measures for the definition of
Adjusted EBITDA and a reconciliation to net earnings attributable to Parent, the most directly comparable
financial measure in accordance with U.S. GAAP.
We are exposed to political risks inherent in conducting a global business such as retaliatory actions by
governments reacting to changes in the U.S. and other countries, including in connection with the imposition of
tariffs and other changes in trade policies, as well as from the conflict involving the U.S., Israel and Iran. Growing
macroeconomic uncertainty may negatively affect our results, in particular from potential impacts on the
advertising market.
-61-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Reconciliation of Non-GAAP Measures
In the first quarter of 2026 we transitioned our non-GAAP profitability measure from Adjusted operating income
before depreciation and amortization (Adjusted OIBDA) to Adjusted EBITDA, which we define as net earnings
(loss) attributable to Parent before interest expense and income; (provision for) benefit from income taxes; other
items; net gain on derivatives; equity in earnings (loss) of investee companies, net of tax; and depreciation and
amortization, adjusted to exclude stock-based compensation expense and certain items identified as affecting
comparability that are not part of our normal operations. This change was made to align with how management
began measuring the Company’s ongoing operating performance in 2026. While both adjusted measures exclude
items identified as affecting comparability that are not part of our normal operations, including programming
charges, impairment charges, restructuring charges, transaction-related items, other corporate matters, and gain
(loss) on dispositions, each where applicable, Adjusted EBITDA, as we define it, also excludes stock-based
compensation, which is a noncash expense that management does not consider to be part of our underlying
operating performance. Net earnings (loss) attributable to Parent is the most directly comparable financial measure
in accordance with U.S. GAAP. Adjusted earnings before income taxes, adjusted provision for income taxes,
adjusted net earnings attributable to Parent, adjusted diluted EPS, and adjusted effective income tax rate are also
measures of performance not calculated in accordance with U.S. GAAP (together with Adjusted EBITDA, the
“adjusted measures”), and exclude certain items identified as affecting comparability that are not part of our
normal operations, including the items described above, as well as gain (loss) from investments and discrete tax
items, each where applicable.
We use these adjusted measures to, among other things, evaluate our operating performance. These measures are
among the primary measures used by management for planning and forecasting of future periods, and they are
important indicators of our operational strength and business performance. In addition, we use Adjusted EBITDA
to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for
investors because they allow investors to view our performance in a manner consistent with the method used by
our management; and because they exclude items that are not representative of our normal operations, they provide
a clearer perspective on underlying performance, and make it easier for investors, analysts and peers to compare
our operating performance to other companies in the industry and to compare our results across reporting periods.
Because the adjusted measures are measures of performance not calculated in accordance with U.S. GAAP, they
should not be considered in isolation of, or as a substitute for, our results as reported under U.S. GAAP, including
net earnings (loss), (provision for) benefit from income taxes, net earnings (loss) attributable to Parent, diluted
EPS, and effective income tax rate, as applicable, as indicators of operating performance and undue reliance should
not be placed on these adjusted measures. Other companies may define these measures, including Adjusted
EBITDA, differently and, as a result, our adjusted measures may not be directly comparable to similarly titled
measures of other companies.
-62-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
The following tables reconcile the adjusted measures to their most directly comparable financial measures in
accordance with U.S. GAAP. The tax impacts on the items identified as affecting comparability in the tables below
have been calculated using the tax rate applicable to each item.
Three Months Ended September 30, 2026 and 2025
Successor | Predecessor | |||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | ||||||||||
2026 | 2025 | 2025 | ||||||||||
Net earnings (loss) attributable to Parent (GAAP) | $73 | $(13) | $(244) | |||||||||
Net earnings attributable to noncontrolling interests | 25 | 17 | 434 | |||||||||
Equity in loss of investee companies, net of tax | 64 | 33 | 31 | |||||||||
Provision for (benefit from) income taxes | 464 | 85 | (229) | |||||||||
Other items, net | 27 | 8 | 16 | |||||||||
Net gain on derivatives | (514) | — | — | |||||||||
Interest expense, net | 229 | 114 | 72 | |||||||||
Transaction-related items (a) | 98 | — | 175 | |||||||||
Restructuring charges (a) | 89 | 185 | 13 | |||||||||
Stock-based compensation | 74 | 29 | 16 | |||||||||
Depreciation and amortization | 371 | 226 | 29 | |||||||||
Adjusted EBITDA (Non-GAAP) | $1,000 | $684 | $313 | |||||||||
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | |||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||
2026 | 2025 | 2025 | ||||||||||
Net earnings (loss) attributable to Parent (GAAP) | $282 | $(13) | $(35) | |||||||||
Net earnings attributable to noncontrolling interests | 32 | 17 | 447 | |||||||||
Equity in loss of investee companies, net of tax | 180 | 33 | 171 | |||||||||
Provision for (benefit from) income taxes | 739 | 85 | (79) | |||||||||
Other items, net | 73 | 8 | 92 | |||||||||
Net gain on derivatives | (502) | — | — | |||||||||
Interest expense, net | 655 | 114 | 433 | |||||||||
Gain on dispositions (a) | — | — | (35) | |||||||||
Transaction-related items (a) | 354 | — | 199 | |||||||||
Restructuring charges (a) | 124 | 185 | 255 | |||||||||
Impairment charges (a) | — | — | 157 | |||||||||
Stock-based compensation | 226 | 29 | 99 | |||||||||
Depreciation and amortization | 1,097 | 226 | 204 | |||||||||
Adjusted EBITDA (Non-GAAP) | $3,260 | $684 | $1,908 | |||||||||
(a) See notes on the following tables for additional information on items affecting comparability.
-63-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Three Months Ended September 30, 2026
Successor | |||||||||||||||
Three Months Ended September 30, 2026 | |||||||||||||||
Earnings Before Income Taxes | Provision for Income Taxes | Net Earnings Attributable to Parent | Diluted EPS | ||||||||||||
Reported (GAAP) | $626 | $(464) | (d) | $73 | $.06 | ||||||||||
Items affecting comparability: | |||||||||||||||
Restructuring charges (a) | 89 | (21) | 68 | .06 | |||||||||||
Transaction-related items (b) | 98 | (8) | 90 | .08 | |||||||||||
Discrete tax items (c) | — | 275 | 275 | .25 | |||||||||||
Adjusted (Non-GAAP) | $813 | $(218) | (d) | $506 | $.45 | ||||||||||
(a) Reflects severance costs and exit costs, as further described under Restructuring and Transaction-Related Items.
(b) Principally reflects legal, advisory, and other professional fees associated with the planned WBD Merger and related
integration.
(c) Primarily attributable to the establishment of a reserve for uncertain tax positions.
(d) The reported effective income tax rate for the three months ended September 30, 2026 was 74.1% and the adjusted effective
income tax rate, which is calculated as the adjusted provision for income taxes of $218 million divided by adjusted earnings
before income taxes of $813 million, was 26.8%. These adjusted measures exclude the items affecting comparability detailed
above.
-64-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Three Months Ended September 30, 2025
Successor | |||||||||||||||
Period From August 7 - September 30, 2025 | |||||||||||||||
Earnings Before Income Taxes | Provision for Income Taxes | Net Earnings (Loss) Attributable to Parent | Diluted EPS | ||||||||||||
Reported (GAAP) | $122 | $(85) | (d) | $(13) | $(.01) | ||||||||||
Items affecting comparability: | |||||||||||||||
Restructuring charges (a) | 185 | (30) | 155 | .13 | |||||||||||
Discrete tax items | — | (4) | (4) | — | |||||||||||
Adjusted (Non-GAAP) | $307 | $(119) | (d) | $138 | $.12 | ||||||||||
Predecessor | |||||||||||||||
Period From July 1 - August 6, 2025 | |||||||||||||||
Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | Net Loss Attributable to Parent | Diluted EPS | ||||||||||||
Reported (GAAP) | $(8) | $229 | (e) | $(244) | $(.36) | ||||||||||
Items affecting comparability: | |||||||||||||||
Restructuring charges (a) | 13 | (3) | 10 | .02 | |||||||||||
Transaction-related items (b) | 175 | (30) | 145 | .21 | |||||||||||
Discrete tax items (c) | — | (73) | (73) | (.11) | |||||||||||
Adjusted (Non-GAAP) | $180 | $123 | (e) | $(162) | $(.24) | ||||||||||
(a) Reflects severance costs, as further described under Restructuring and Transaction-Related Items.
(b) Reflects banking, legal, advisory, and other professional fees relating to the Skydance Transactions, and transaction awards
that became payable to eligible employees upon closing of the Skydance Transactions.
(c) Reflects the reversal of the valuation allowance on our interest limitation carryforward deferred tax asset, partially offset by
the establishment of a reserve for uncertain tax positions.
(d) The reported effective income tax rate for the period from August 7 - September 30, 2025 was 69.7%, primarily reflecting
the timing of foreign inclusions and foreign-derived intangible income deductions between the Successor and Predecessor
periods. The adjusted effective income tax rate, which is calculated as the adjusted provision for income taxes of $119
million divided by adjusted earnings before income taxes of $307 million, was 38.8%. These adjusted measures exclude the
items affecting comparability detailed above.
(e) For the period from July 1 - August 6, 2025, we recorded a tax benefit of $229 million, primarily reflecting the reversal of
valuation allowances on deferred tax assets related to interest deduction limitations as a result of recent U.S. tax legislation.
The reported benefit, as well as the adjusted income tax benefit of $123 million, also reflects the tax impact of earnings
attributable to noncontrolling interests, the timing of foreign inclusions between the Successor and Predecessor periods, and
the tax benefit on the foreign-derived intangible income deduction. The adjusted benefit from income taxes excludes the tax
impacts from the items affecting comparability detailed in the table above.
-65-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Nine Months Ended September 30, 2026
Successor | |||||||||||||||
Nine Months Ended September 30, 2026 | |||||||||||||||
Earnings Before Income Taxes | Provision for Income Taxes | Net Earnings Attributable to Parent | Diluted EPS | ||||||||||||
Reported (GAAP) | $1,233 | $(739) | (d) | $282 | $.25 | ||||||||||
Items affecting comparability: | |||||||||||||||
Restructuring charges (a) | 124 | (26) | 98 | .09 | |||||||||||
Transaction-related items (b) | 354 | (29) | 325 | .29 | |||||||||||
Discrete tax items (c) | — | 267 | 267 | .24 | |||||||||||
Adjusted (Non-GAAP) | $1,711 | $(527) | (d) | $972 | $.87 | ||||||||||
(a) Reflects severance costs and exit costs, as further described under Restructuring and Transaction-Related Items.
(b) Principally reflects legal, advisory and other professional fees associated with the planned WBD Merger and related
integration.
(c) Primarily attributable to the establishment of a reserve for uncertain tax positions.
(d) The reported effective income tax rate for the nine months ended September 30, 2026 was 59.9% and the adjusted effective
income tax rate, which is calculated as the adjusted provision for income taxes of $527 million divided by adjusted earnings
before income taxes of $1.71 billion, was 30.8%. These adjusted measures exclude the items affecting comparability detailed
above.
-66-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Nine Months Ended September 30, 2025
Successor | |||||||||||||||
Period From August 7 - September 30, 2025 | |||||||||||||||
Earnings Before Income Taxes | Provision for Income Taxes | Net Earnings (Loss) Attributable to Parent | Diluted EPS | ||||||||||||
Reported (GAAP) | $122 | $(85) | (e) | $(13) | $(.01) | ||||||||||
Items affecting comparability: | |||||||||||||||
Restructuring charges (a) | 185 | (30) | 155 | .13 | |||||||||||
Discrete tax items | — | (4) | (4) | — | |||||||||||
Adjusted (Non-GAAP) | $307 | $(119) | (e) | $138 | $.12 | ||||||||||
Predecessor | |||||||||||||||
Period From January 1 - August 6, 2025 | |||||||||||||||
Earnings Before Income Taxes | Benefit from (Provision for) Income Taxes | Net Earnings (Loss) Attributable to Parent | Diluted EPS | ||||||||||||
Reported (GAAP) | $504 | $79 | (f) | $(35) | $(.05) | ||||||||||
Items affecting comparability: | |||||||||||||||
Impairment charges (b) | 157 | (39) | 118 | .17 | |||||||||||
Restructuring charges (a) | 255 | (61) | 194 | .29 | |||||||||||
Transaction-related items (c) | 199 | (31) | 168 | .25 | |||||||||||
Gain on dispositions (d) | (35) | 2 | (33) | (.05) | |||||||||||
Discrete tax items | — | (64) | (64) | (.10) | |||||||||||
Adjusted (Non-GAAP) | $1,080 | $(114) | (f) | $348 | $.51 | ||||||||||
(a) Both periods reflect severance charges and also included in the period from January 1 - August 6, 2025 are charges for the
impairment of lease assets, as further described under Restructuring and Transaction-Related Items.
(b) Reflects a charge to reduce the carrying values of FCC licenses in certain markets to their estimated fair values.
(c) Reflects banking, legal, advisory, and other professional fees relating to the Skydance Transactions, and transaction awards
that became payable to eligible employees upon closing of the Skydance Transactions.
(d) Principally reflects a gain associated with the disposition of a noncore business.
(e) Refer to the table above for a discussion of the reported and adjusted tax rates for the period from August 7 - September 30,
2025.
(f) The reported effective income tax rate for the period from January 1 - August 6, 2025 was 15.7%, which primarily reflects
the reversal of valuation allowances on deferred tax assets related to interest deduction limitations as a result of recent U.S.
tax legislation. The reported effective income tax rate also reflects the tax impact of earnings attributable to noncontrolling
interests, the timing of foreign inclusions between the Successor and Predecessor periods, and the tax benefit on the foreign-
derived intangible income deduction. The adjusted provision for income taxes of $114 million divided by adjusted earnings
before income taxes of $1.08 billion, was 10.6%. These adjusted measures exclude the items affecting comparability
detailed above.
-67-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Consolidated Results of Operations
Revenues
Three Months Ended September 30, 2026 and 2025
Successor | Predecessor | Supplemental Pro Forma Revenues (a) | ||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Pro Forma Increase/(Decrease) | ||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | |||||||||||||||
Revenues by Type: | ||||||||||||||||||||
Advertising | $1,889 | $1,280 | $664 | $1,944 | $(55) | (3)% | ||||||||||||||
Affiliate and subscription | 3,521 | 2,027 | 1,400 | 3,427 | 94 | 3 | ||||||||||||||
Theatrical | 112 | 39 | 73 | 112 | — | — | ||||||||||||||
Licensing and other | 1,503 | 775 | 444 | 1,231 | 272 | 22 | ||||||||||||||
Total Revenues | $7,025 | $4,121 | $2,581 | $6,714 | $311 | 5% | ||||||||||||||
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Supplemental Pro Forma Revenues (a) | ||||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Pro Forma Increase/(Decrease) | ||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | |||||||||||||||
Revenues by Type: | ||||||||||||||||||||
Advertising | $6,290 | $1,280 | $5,329 | $6,609 | $(319) | (5)% | ||||||||||||||
Affiliate and subscription | 10,542 | 2,027 | 8,242 | 10,269 | 273 | 3 | ||||||||||||||
Theatrical | 402 | 39 | 475 | 514 | (112) | (22) | ||||||||||||||
Licensing and other | 4,051 | 775 | 2,576 | 3,854 | 197 | 5 | ||||||||||||||
Total Revenues | $21,285 | $4,121 | $16,622 | $21,246 | $39 | —% | ||||||||||||||
(a) Supplemental Pro Forma Revenues for the three and nine months ended September 30, 2025 reflect the combination of the
Successor period with the Predecessor periods from July 1 - August 6, 2025 and January 1 - August 6, 2025, respectively, and
for Licensing and other and total Supplemental Pro Forma Revenues also include $12 million and $503 million of Skydance
Media revenues after the elimination of intercompany revenues from Paramount Global during the Predecessor periods from
July 1 - August 6, 2025 and January 1 - August 6, 2025, respectively. While the Successor and Predecessor periods are distinct
reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net assets, and
are supplementally presented on a pro forma combined basis to help investors view these revenues in a manner consistent with
our management.
-68-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Advertising
Advertising revenues are generated primarily from the sale of advertising spots on our global broadcast and cable
networks, television stations, and streaming services. Advertising revenues in each of the periods of 2026 and 2025
were impacted by declines in the linear advertising market. The 2026 periods benefited from political advertising
associated with the U.S. Midterm elections and the 2025 Predecessor period from January 1 - August 6, 2025
benefited from CBS’s broadcast in the second quarter of 2025 of the National Semifinals and National
Championship games of the NCAA Division I Men’s Basketball Championship (the “NCAA Tournament”), which
we have the rights to broadcast every other year. The Successor and Predecessor periods in 2025 also included
revenue from Telefe and Chilevisión, which were sold in October 2025 and January 2026, respectively.
On a pro forma basis, the 3% decrease in advertising revenues for the three months ended September 30, 2026 was
driven by lower international advertising, including a 2% decrease to total pro forma advertising revenue from the
absence of Telefe and Chilevisión, partially offset by higher domestic advertising revenues, including a 4%
increase to total advertising revenues from higher political advertising. The 5% pro forma decrease for the nine
months ended September 30, 2026 reflects decreases in both international and domestic advertising revenues,
including a decrease of 2% from the absence of Telefe and Chilevisión and 2% from the comparison against CBS’s
broadcast in the second quarter of 2025 of the National Semifinals and National Championship games of the
NCAA Tournament. The pro forma decline for the nine months was partially offset by a 2% increase from higher
political advertising. The pro forma comparison in each period also reflects declines in the linear advertising
market and growth for Paramount+.
Affiliate and subscription
Affiliate and subscription revenues are principally comprised of affiliate fees we receive from distributors for their
carriage of our cable networks (cable affiliate fees) and television stations (retransmission fees), as well as fees
received from third-party television stations for their affiliation with the CBS Television Network (reverse
compensation), and subscription fees for our streaming services.
Affiliate and subscription revenues during each of the periods in 2026 and 2025 reflect the benefit from subscriber
growth and pricing increases for Paramount+, but were negatively impacted by linear subscriber declines.
-69-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Paramount+ had 82.2 million subscribers at September 30, 2026 and 77.9 million subscribers at September 30,
2025.
On a pro forma basis, the growth in affiliate and subscription revenues of 3% for each of the three- and nine-month
periods ended September 30, 2026 primarily reflects increases of 8% and 7%, respectively, from growth at
Paramount+, driven by pricing increases and subscriber growth, partially offset by a decrease of 3% in each period
from lower linear affiliate revenues. The comparison for both periods also reflects the impact from the integration
of BET+ into Paramount+ during the second quarter of 2026.
Theatrical
Theatrical revenues for the third quarter of 2026 include revenues from the releases of Paw Patrol 3: The Dino
Movie and Heart of the Beast, and for the nine-month period also include revenues from the second quarter 2026
release of Scary Movie (2026) and the first quarter 2026 release of Scream 7. Theatrical revenues in each of the
2025 Successor and Predecessor periods benefited from the third quarter 2025 releases of The Naked Gun and
Smurfs, and for the 2025 Predecessor periods also benefited from the second quarter 2025 release of Mission:
Impossible - The Final Reckoning. In addition, the 2025 Predecessor period from January 1 - August 6, 2025
included revenues from the fourth quarter 2024 release of Sonic the Hedgehog 3.
Licensing and other
Licensing and other revenues are principally comprised of fees from the licensing of the rights to exhibit our
internally-produced television and film programming on various platforms in the secondary market after its initial
exhibition on our owned or third-party platforms; license fees from content produced or distributed for third
parties; home entertainment revenues, which primarily include revenues from the viewing of our content on a
transactional basis through transactional video-on-demand (TVOD) and electronic sell-through services; fees from
the use of our trademarks and brands for consumer products, recreation and live events; revenues from games and
other interactive content; and revenues from studio rentals and production services.
Licensing and other revenues include Skydance Media revenues in the 2026 periods and the 2025 Successor
period. On a pro forma basis, the increases in licensing and other revenues of 22% and 5% for the three and nine
months ended September 30, 2026, respectively, reflect higher revenues from secondary market licensing and
content produced for third parties.
-70-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Operating Expenses
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Operating expenses by Type: | |||||||||||||||||||||||||
Content costs | $3,410 | $1,987 | $1,209 | $10,457 | $1,987 | $8,494 | |||||||||||||||||||
Distribution and other | 1,246 | 654 | 493 | 3,497 | 654 | 2,793 | |||||||||||||||||||
Total Operating Expenses | $4,656 | $2,641 | $1,702 | $13,954 | $2,641 | $11,287 | |||||||||||||||||||
Content Costs
Content costs include the amortization of costs of internally-produced television content, theatrical film content,
and interactive game development; amortization of acquired program rights; other television production costs,
including on-air talent; and participation and residuals expenses, which reflect amounts owed to talent and other
participants in our content pursuant to contractual and collective bargaining arrangements.
Content costs in the 2026 periods and the 2025 Successor period include costs associated with Skydance Media’s
content and also reflect the impact from a net reduction in programming assets resulting from the pushdown of the
Ultimate Parent’s basis. Content costs for the three and nine months ended September 30, 2026 also reflect the
impact of higher sports costs for Paramount+ and cost reductions for broadcast and cable programming.
Distribution and Other
Distribution and other operating expenses primarily include costs relating to the distribution of our content,
including marketing and other costs to support our theatrical releases; revenue-sharing costs, including for third-
party distribution and to television stations affiliated with the CBS Television Network; compensation; and other
costs associated with our operations.
Distribution and other operating expenses in each period reflect revenue sharing costs related to revenues for our
streaming services. In addition, theatrical distribution costs were impacted by the mix of films in each period.
-71-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Selling, General and Administrative Expenses
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Selling, general and administrative expenses | $1,443 | $825 | $582 | $4,297 | $825 | $3,526 | |||||||||||||||||||
Selling, general and administrative (“SG&A”) expenses include costs incurred for advertising and marketing for
our linear networks and streaming services, research, occupancy, professional service fees, and back office support,
including employee compensation (inclusive of stock-based compensation expense) and technology. Stock-based
compensation expense in the Successor periods reflects the impact from grants following the Skydance
Transactions, and in the Predecessor period in 2025 reflects the impact of accelerated vesting in December 2024 of
certain employees’ RSUs and PSUs to help mitigate potential tax impacts that would otherwise arise under
Sections 280G and 4999 of the Internal Revenue Code. SG&A expenses also reflect reductions to employee
compensation costs resulting from our workforce restructuring activities.
Depreciation and Amortization
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Depreciation and amortization | $371 | $226 | $29 | $1,097 | $226 | $204 | |||||||||||||||||||
Depreciation and amortization expense reflects depreciation of fixed assets and amortization of finite-lived
intangible assets. Depreciation and amortization for the three and nine months ended September 30, 2026 and the
2025 Successor periods includes amortization of intangible assets established in connection with the pushdown of
the Ultimate Parent’s basis (See Note 3 to the consolidated financial statements).
Impairment Charges
During the second quarter of 2025, we performed interim impairment tests of FCC licenses in six markets, which
resulted in an impairment charge of $157 million to write down the carrying values of FCC licenses in these
markets to their then aggregate estimated fair value.
-72-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Restructuring and Transaction-Related Items
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Severance (a) | $50 | $185 | $13 | $85 | $185 | $190 | |||||||||||||||||||
Exit costs | 39 | — | — | 39 | — | 65 | |||||||||||||||||||
Restructuring charges | 89 | 185 | 13 | 124 | 185 | 255 | |||||||||||||||||||
Transaction-related items | 98 | — | 175 | 354 | — | 199 | |||||||||||||||||||
Restructuring and transaction-related items | $187 | $185 | $188 | $478 | $185 | $454 | |||||||||||||||||||
(a) Severance costs include the accelerated vesting of stock-based compensation.
Restructuring Charges
During the three and nine months ended September 30, 2026 (Successor) and the period from August 7 -
September 30, 2025 (Successor), we recorded restructuring severance costs of $50 million, $85 million, and $185
million, respectively, primarily associated with changes in management and actions to align 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. In
addition, during the three months ended September 30, 2026 we recorded exit costs of $39 million associated with
a contract termination.
Restructuring charges for the Predecessor periods from July 1 - August 6, 2025 and January 1 - August 6, 2025
included severance costs of $13 million and $190 million, respectively, primarily associated with strategic changes
in our global workforce in order to streamline our organization. In addition, during the Predecessor period from
January 1 - August 6, 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.
During the fourth quarter of 2026, we expect to incur additional restructuring charges for severance in connection
with a plan announced in October 2026 under which severance payments will be provided to certain eligible
employees who voluntarily elected to participate.
Transaction-Related Items
Transaction-related items include costs directly associated with prospective and completed mergers and
acquisitions, as well as related integration activities. During the three and nine months ended September 30, 2026,
we recorded transaction-related costs of $98 million and $354 million, respectively, principally for legal, advisory,
and other professional fees associated with the planned WBD Merger and related integration. During the
Predecessor periods from July 1 - August 6, 2025 and January 1 - August 6, 2025, we recorded transaction-related
costs of $175 million and $199 million, respectively, principally for banking, legal, advisory, and other
-73-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
professional fees relating to the Skydance Transactions, and transaction awards that became payable to eligible
employees upon closing.
Gain on Dispositions
During the first quarter of 2025, we recorded a gain on dispositions totaling $35 million, principally associated
with the disposition of a noncore business.
Interest Expense/Income
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Interest expense | $260 | $138 | $85 | $753 | $138 | $516 | |||||||||||||||||||
Interest income | $31 | $24 | $13 | $98 | $24 | $83 | |||||||||||||||||||
In connection with the pushdown of the Ultimate Parent’s basis, our debt was recorded at fair value, which resulted
in a decrease to our total debt balance of $898 million. The adjustments to fair value for each of our senior and
junior debt issuances are being amortized over the remaining term of the applicable issuance within interest
expense. The weighted average interest rate on our senior and junior debt was 5.20% and 5.17% at September 30,
2026 and 2025, respectively. In addition, during the three and nine months ended September 30, 2026 we incurred
$29 million and $70 million, respectively, of interest expense associated with borrowings under our previous credit
facility (see Capital Structure). Credit facility borrowings were repaid in October 2026 with the funding from the
PIPE Transaction described in Note 2 to the consolidated financial statements.
Net Gain on Derivatives
During the three and nine months ended September 30, 2026 we recorded gains on interest rate hedges of
$514 million and $502 million, respectively. See Note 9 to the consolidated financial statements.
Other Items, Net
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Components of other items, net: | |||||||||||||||||||||||||
Pension and postretirement benefit costs | $(18) | $(14) | $(12) | $(53) | $(14) | $(80) | |||||||||||||||||||
Foreign exchange gain (loss) | (8) | 4 | (3) | (14) | 4 | (11) | |||||||||||||||||||
Other | (1) | 2 | (1) | (6) | 2 | (1) | |||||||||||||||||||
Other items, net | $(27) | $(8) | $(16) | $(73) | $(8) | $(92) | |||||||||||||||||||
-74-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Provision for Income Taxes
The provision for income taxes represents federal, state and local, and foreign taxes on earnings before income
taxes and equity in loss of investee companies. For the three and nine months ended September 30, 2026
(Successor), we recorded a provision for income taxes of $464 million and $739 million, reflecting an effective
income tax rate of 74.1% and 59.9%, respectively. Included in the provision for income taxes are the below
items identified as affecting the comparability of our results, which in aggregate increased our effective income
tax rate by 47.3 percentage points and 29.1 percentage points for their respective periods.
Impact from Items Affecting Comparability | |||||||||||||||
Successor | |||||||||||||||
Three Months Ended September 30, 2026 | Nine Months Ended September 30, 2026 | ||||||||||||||
Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | ||||||||||||
Restructuring charges (Note 5) | $(89) | $21 | $(124) | $26 | |||||||||||
Transaction-related items (Note 5) | $(98) | $8 | $(354) | $29 | |||||||||||
Net discrete tax provision | n/a | $(275) | n/a | $(267) | |||||||||||
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 Company disagrees with the proposed adjustments and is contesting
the NOPAs through the IRS’ administrative appeals process and, if necessary, through judicial proceedings.
While the uncertain tax position meets the more-likely-than-not recognition threshold, in applying the
measurement assessment, the Company currently believes that a portion of the benefit may not be realized upon
settlement and has recorded a reserve during the third quarter of 2026 for this item, which is reflected within the
net discrete tax items above.
For the period from August 7 - September 30, 2025 (Successor), we recorded a provision for income taxes of $85
million and for the periods from July 1 - August 6, 2025 and January 1 - August 6, 2025 (Predecessor), we
recorded a benefit from income taxes of $229 million and $79 million, respectively. Refer to Reconciliation of
Non-GAAP Measures for reported and adjusted effective income tax rates and the related income tax effects of
the adjustments.
Three Months Ended September 30, 2025
Impact from Items Affecting Comparability | ||||||||||||||||
Successor | Predecessor | |||||||||||||||
Period From August 7 - September 30, | Period From July 1 - August 6, | |||||||||||||||
2025 | 2025 | |||||||||||||||
Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | |||||||||||||
Restructuring charges (Note 5) | $(185) | $30 | $(13) | $3 | ||||||||||||
Transaction-related items (Note 5) | $— | $— | $(175) | $30 | ||||||||||||
Net discrete tax benefit (a) | n/a | $4 | n/a | $73 | ||||||||||||
n/a - not applicable
-75-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Nine Months Ended September 30, 2025
Impact from Items Affecting Comparability | ||||||||||||||||
Successor | Predecessor | |||||||||||||||
Period From August 7 - September 30, | Period From January 1 - August 6 | |||||||||||||||
2025 | 2025 | |||||||||||||||
Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | Earnings (Loss) Before Income Taxes | Benefit from (Provision for) Income Taxes | |||||||||||||
Restructuring charges (Note 5) | $(185) | $30 | $(255) | $61 | ||||||||||||
Transaction-related items (Note 5) | $— | $— | $(199) | $31 | ||||||||||||
Impairment charges (Note 16) | $— | $— | $(157) | $39 | ||||||||||||
Gain from dispositions | $— | $— | $35 | $(2) | ||||||||||||
Net discrete tax benefit (a) | n/a | $4 | n/a | $64 | ||||||||||||
n/a - not applicable
(a) On July 4, 2025, the U.S. government enacted tax legislation, which included the extension of certain expired or expiring tax provisions,
including a favorable change to the interest deduction limitation, and modifications to certain international tax provisions. The
legislation has multiple effective dates with certain provisions effective in 2025. A favorable change to the interest deduction limitation
resulted in the reversal of the valuation allowance on our interest limitation carryforward deferred tax asset of $114 million. The net
discrete tax benefits for the 2025 Predecessor periods reflect this reversal, partially offset by a reserve for uncertain tax positions.
Equity in Loss of Investee Companies, Net of Tax
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Equity in loss of investee companies | $(66) | $(33) | $(31) | $(180) | $(33) | $(169) | |||||||||||||||||||
Tax benefit (provision) | 2 | — | — | — | — | (2) | |||||||||||||||||||
Equity in loss of investee companies, net of tax | $(64) | $(33) | $(31) | $(180) | $(33) | $(171) | |||||||||||||||||||
-76-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular dollars in millions, except per share amounts)
Net Earnings (Loss) Attributable to Parent and Diluted EPS
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Net earnings (loss) attributable to Parent | $73 | $(13) | $(244) | $282 | $(13) | $(35) | |||||||||||||||||||
Diluted EPS | $.06 | $(.01) | $(.36) | $.25 | $(.01) | $(.05) | |||||||||||||||||||
As a result of the pushdown of the Ultimate Parent’s basis, net earnings (loss) attributable to Parent and diluted
EPS during the three and nine months ended September 30, 2026 and the 2025 Successor periods include
amortization associated with intangible assets that were established and interest expense associated with the
adjustment to fair value of our debt, as well as the decrease in programming assets.
Segment Results of Operations
Beginning in 2026, we transitioned our reporting structure into three new segments: Studios, Direct-to-Consumer,
and TV Media. Under the new segment structure, our Studios segment reflects the combination of the historical
Filmed Entertainment segment with the historical TV Media studio operations, consolidating our content creation
activities. Additionally, our premium cable channel, Paramount+ with Showtime, which was previously under the
TV Media segment, is now managed under the Direct-to-Consumer segment. Concurrent with the change to our
segments, we updated our segment expense allocations to better reflect how we operate and make cost decisions
across the business (together with the segment change, the “new segment presentation”). Certain centralized costs
that were previously allocated at the segment level are now reported within corporate expenses.
The tables below set forth our financial information by reportable segment. As a result of the new accounting basis
established in connection with the Skydance Transactions and NAI Transaction on August 7, 2025, which makes
our results of operations not comparable between the Successor and Predecessor periods, we are required to present
segment information for periods prior to August 7, 2025 based on our previous segments, Filmed Entertainment,
Direct-to-Consumer, and TV Media. In addition, in order to provide useful information for investors that is
consistent with the manner in which our management reviews our results, on the following pages we have provided
supplemental non-GAAP presentations reflecting the Predecessor amounts for the periods from July 1 - August 6,
2025 and January 1 - August 6, 2025 recast under the new segment presentation, as well as the related
reconciliations from the GAAP presentation.
-77-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
GAAP | Non-GAAP (a) | |||||||||||||||
Successor | Predecessor | Predecessor | ||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Period From July 1 - August 6, | |||||||||||||
2026 | 2025 | 2025 | 2025 | |||||||||||||
Revenues: | ||||||||||||||||
Studios | Studios | Filmed Entertainment (b) | Studios | |||||||||||||
Theatrical | $112 | $39 | $73 | $73 | ||||||||||||
Licensing and other | 1,377 | 695 | 202 | 387 | ||||||||||||
Advertising | 7 | 4 | 1 | 2 | ||||||||||||
Total | 1,496 | 738 | 276 | 462 | ||||||||||||
Direct-to- Consumer | Direct-to- Consumer | Direct-to- Consumer (b) | Direct-to- Consumer | |||||||||||||
Advertising | 542 | 300 | 179 | 179 | ||||||||||||
Affiliate and subscription | 1,968 | 1,043 | 704 | 744 | ||||||||||||
Licensing | — | 1 | — | — | ||||||||||||
Total | 2,510 | 1,344 | 883 | 923 | ||||||||||||
TV Media | TV Media | TV Media (b) | TV Media | |||||||||||||
Advertising | 1,344 | 977 | 485 | 484 | ||||||||||||
Affiliate and subscription | 1,553 | 984 | 696 | 656 | ||||||||||||
Licensing and other | 127 | 81 | 247 | 58 | ||||||||||||
Total | 3,024 | 2,042 | 1,428 | 1,198 | ||||||||||||
Eliminations | Eliminations | Eliminations | Eliminations | |||||||||||||
(5) | (3) | (6) | (2) | |||||||||||||
Total Revenues | $7,025 | $4,121 | $2,581 | $2,581 | ||||||||||||
-78-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
GAAP | Non-GAAP (a) | ||||||||||||||||
Successor | Predecessor | Predecessor | |||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Period From July 1 - August 6, | ||||||||||||||
2026 | 2025 | 2025 | 2025 | ||||||||||||||
Adjusted EBITDA/OIBDA (c): | Adjusted EBITDA: | ||||||||||||||||
Studios/Filmed Entertainment (b) | $129 | $21 | $(36) | Studios | $(2) | ||||||||||||
Direct-to-Consumer (b) | 225 | 309 | 105 | Direct-to-Consumer | 137 | ||||||||||||
TV Media (b) | 1,028 | 560 | 282 | TV Media | 285 | ||||||||||||
Corporate/Eliminations (d) | (382) | (206) | (38) | Corporate/Eliminations (d) | (107) | ||||||||||||
Stock-based compensation (e) | (74) | (29) | (16) | Stock-based compensation (e) | (16) | ||||||||||||
Depreciation and amortization | (371) | (226) | (29) | Depreciation and amortization | (29) | ||||||||||||
Restructuring and transaction-related items (e) | (187) | (185) | (188) | Restructuring and transaction-related items (e) | (188) | ||||||||||||
Operating income | 368 | 244 | 80 | Operating income | 80 | ||||||||||||
Interest expense, net | (229) | (114) | (72) | Interest expense, net | (72) | ||||||||||||
Net gain on derivatives | 514 | — | — | Net gain on derivatives | — | ||||||||||||
Other items, net | (27) | (8) | (16) | Other items, net | (16) | ||||||||||||
Earnings before income taxes and equity in loss of investee companies | 626 | 122 | (8) | Earnings before income taxes and equity in loss of investee companies | (8) | ||||||||||||
(Provision for) benefit from income taxes | (464) | (85) | 229 | Benefit from income taxes | 229 | ||||||||||||
Equity in loss of investee companies, net of tax | (64) | (33) | (31) | Equity in loss of investee companies, net of tax | (31) | ||||||||||||
Net earnings (Parent and noncontrolling interests) | 98 | 4 | 190 | Net earnings (Parent and noncontrolling interests) | 190 | ||||||||||||
Net earnings attributable to noncontrolling interests | (25) | (17) | (434) | Net earnings attributable to noncontrolling interests | (434) | ||||||||||||
Net earnings (loss) attributable to Parent | $73 | $(13) | $(244) | Net loss attributable to Parent | $(244) | ||||||||||||
(a) As discussed above, revenues and Adjusted EBITDA by segment recast under our new segment presentation are non-GAAP. See
Studios, Direct-to-Consumer, and TV Media on the following pages for reconciliations from the GAAP segment presentation for the
period from July 1 - August 6, 2025 to the non-GAAP recast amounts. All other amounts in this table are presented on a GAAP
basis.
(b) The GAAP Predecessor period from July 1 - August 6, 2025 reflects the historical segment composition for Filmed Entertainment,
Direct-to-Consumer, and TV Media.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(d) As noted above, concurrent with the change to our segments, we updated our segment expense allocations to better reflect how we
operate and make cost decisions across the business, which resulted in higher costs at Corporate. 2026 reflects higher technology
costs and consulting fees.
(e) The increase in stock-based compensation expense between the 2026 and 2025 periods was driven by grants following the Skydance
Transactions and the comparison to lower expenses in 2025 as a result of accelerated vesting in December 2024 of certain
employees’ RSUs and PSUs to help mitigate potential tax impacts that would otherwise arise under Sections 280G and 4999 of the
Internal Revenue Code. For the three months ended September 30, 2026 (Successor) and the period from August 7 - September 30,
2025 (Successor), stock-based compensation expense of $27 million and $30 million, respectively, is included in “Restructuring and
transaction-related items.” For the Predecessor period from July 1 - August 6, 2025, stock-based compensation expense of $10
million is included in “Restructuring and transaction-related items.”
-79-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
GAAP | Non-GAAP (a) | |||||||||||||||
Successor | Predecessor | Predecessor | ||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Period From January 1 - August 6, | |||||||||||||
2026 | 2025 | 2025 | 2025 | |||||||||||||
Revenues: | ||||||||||||||||
Studios | Studios | Filmed Entertainment (b) | Studios | |||||||||||||
Theatrical | $402 | $39 | $475 | $475 | ||||||||||||
Licensing and other | 3,676 | 695 | 1,112 | 2,270 | ||||||||||||
Advertising | 15 | 4 | 6 | 11 | ||||||||||||
Total | 4,093 | 738 | 1,593 | 2,756 | ||||||||||||
Direct-to-Consumer | Direct-to-Consumer | Direct-to- Consumer (b) | Direct-to- Consumer | |||||||||||||
Advertising | 1,594 | 300 | 1,146 | 1,146 | ||||||||||||
Affiliate and subscription | 5,788 | 1,043 | 3,940 | 4,191 | ||||||||||||
Licensing | — | 1 | 1 | 1 | ||||||||||||
Total | 7,382 | 1,344 | 5,087 | 5,338 | ||||||||||||
TV Media | TV Media | TV Media (b) | TV Media | |||||||||||||
Advertising | 4,685 | 977 | 4,180 | 4,175 | ||||||||||||
Affiliate and subscription | 4,754 | 984 | 4,302 | 4,051 | ||||||||||||
Licensing and other | 379 | 81 | 1,495 | 310 | ||||||||||||
Total | 9,818 | 2,042 | 9,977 | 8,536 | ||||||||||||
Eliminations | Eliminations | Eliminations | Eliminations | |||||||||||||
(8) | (3) | (35) | (8) | |||||||||||||
Total Revenues | $21,285 | $4,121 | $16,622 | $16,622 | ||||||||||||
-80-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
GAAP | Non-GAAP (a) | ||||||||||||||||
Successor | Predecessor | Predecessor | |||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Period From January 1 - August 6, | ||||||||||||||
2026 | 2025 | 2025 | 2025 | ||||||||||||||
Adjusted EBITDA/OIBDA (c): | Adjusted EBITDA: | ||||||||||||||||
Studios/Filmed Entertainment (b) | $329 | $21 | $(100) | Studios | $49 | ||||||||||||
Direct-to-Consumer (b) | 842 | 309 | 153 | Direct-to-Consumer | 387 | ||||||||||||
TV Media (b) | 3,146 | 560 | 2,067 | TV Media | 2,148 | ||||||||||||
Corporate/Eliminations (d) | (1,057) | (206) | (212) | Corporate/Eliminations (d) | (676) | ||||||||||||
Stock-based compensation (e) | (226) | (29) | (99) | Stock-based compensation (e) | (99) | ||||||||||||
Depreciation and amortization | (1,097) | (226) | (204) | Depreciation and amortization | (204) | ||||||||||||
Impairment charges | — | — | (157) | Impairment charges | (157) | ||||||||||||
Restructuring and transaction-related items (e) | (478) | (185) | (454) | Restructuring and transaction-related items (e) | (454) | ||||||||||||
Gain on dispositions | — | — | 35 | Gain on dispositions | 35 | ||||||||||||
Operating income | 1,459 | 244 | 1,029 | Operating income | 1,029 | ||||||||||||
Interest expense, net | (655) | (114) | (433) | Interest expense, net | (433) | ||||||||||||
Net gain on derivatives | 502 | — | — | Net gain on derivatives | — | ||||||||||||
Other items, net | (73) | (8) | (92) | Other items, net | (92) | ||||||||||||
Earnings before income taxes and equity in loss of investee companies | 1,233 | 122 | 504 | Earnings before income taxes and equity in loss of investee companies | 504 | ||||||||||||
(Provision for) benefit from income taxes | (739) | (85) | 79 | Benefit from income taxes | 79 | ||||||||||||
Equity in loss of investee companies, net of tax | (180) | (33) | (171) | Equity in loss of investee companies, net of tax | (171) | ||||||||||||
Net earnings (Parent and noncontrolling interests) | 314 | 4 | 412 | Net earnings (Parent and noncontrolling interests) | 412 | ||||||||||||
Net earnings attributable to noncontrolling interests | (32) | (17) | (447) | Net earnings attributable to noncontrolling interests | (447) | ||||||||||||
Net earnings (loss) attributable to Parent | $282 | $(13) | $(35) | Net loss attributable to Parent | $(35) | ||||||||||||
(a) As discussed above, revenues and Adjusted EBITDA by segment recast under our new segment presentation is non-GAAP. See
Studios, Direct-to-Consumer, and TV Media on the following pages for reconciliations from the GAAP segment presentation for the
period from January 1 - August 6, 2025 to the non-GAAP recast amounts. All other amounts in this table are presented on a GAAP
basis.
(b) The GAAP Predecessor period from January 1 - August 6, 2025 reflects the historical segment composition for Filmed
Entertainment, Direct-to-Consumer, and TV Media.
(c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(d) As noted above, concurrent with the change to our segments, we updated our segment expense allocations to better reflect how we
operate and make cost decisions across the business, which resulted in higher costs at Corporate. 2026 reflects higher technology
costs and consulting fees.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
(e) The increase in stock-based compensation expense between the 2026 and 2025 periods was driven by grants following the Skydance
Transactions and the comparison to lower expenses in 2025 as a result of accelerated vesting in December 2024 of certain
employees’ RSUs and PSUs to help mitigate potential tax impacts that would otherwise arise under Sections 280G and 4999 of the
Internal Revenue Code. For the nine months ended September 30, 2026 (Successor) and the period from August 7 - September 30,
2025 (Successor), stock-based compensation expense of $36 million and $30 million, respectively, is included in “Restructuring and
transaction-related items.” For the Predecessor period from January 1 - August 6, 2025, stock-based compensation expense of $14
million is included in “Restructuring and transaction-related items.”
Studios/Filmed Entertainment
Our Studios segment consists of our television and film studio operations, including CBS Studios, Paramount
Television Studios, Nickelodeon Animation, Paramount Pictures, Paramount Animation, and Miramax, as well
as Skydance Animation, Film, 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.
Three Months Ended September 30, 2026 and 2025
Successor | Predecessor | Studios Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
Studios (GAAP) | Filmed Entertainment (GAAP) | Adjustments (a) | Studios (Non- GAAP) | ||||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Pro Forma Increase/ (Decrease) (f) | |||||||||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||||||||
Theatrical | $ | $ | $ | $— | $73 | $112 | $— | —% | |||||||||||||||||||
Licensing and other | 185 | 387 | 1,094 | 283 | 26 | ||||||||||||||||||||||
Advertising (c) | 1 | 2 | 6 | 1 | 17 | ||||||||||||||||||||||
Revenues | 1,496 | 738 | 276 | 186 | 462 | $1,212 | $284 | 23% | |||||||||||||||||||
Content costs | 147 | 278 | |||||||||||||||||||||||||
Advertising and marketing | 2 | 108 | |||||||||||||||||||||||||
Other (d) | 3 | 78 | |||||||||||||||||||||||||
Expenses | 1,367 | 717 | 312 | 152 | 464 | ||||||||||||||||||||||
Adjusted EBITDA/OIBDA (e) | $129 | $21 | $(36) | $34 | $(2) | ||||||||||||||||||||||
(a) Reflects the inclusion of the historical TV Media studio operations and updates to our segment expense allocations to better reflect how
we operate and make cost decisions across the business.
(b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP
Studios revenues for the period from July 1 - August 6, 2025 with the Successor revenues for the Studios segment for the period from
August 7 - September 30, 2025. Licensing and other and total Supplemental Non-GAAP Pro Forma Revenues also include $12 million
of Skydance Media revenues after the elimination of intercompany revenues from Paramount Global during the Predecessor period
from July 1 - August 6, 2025. While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted
by the new accounting basis established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined
basis to help investors view these revenues in a manner consistent with our management.
(c) Primarily reflects advertising revenues earned from the use of Studios content on third-party digital platforms.
(d) Other segment expenses for our Studios segment include employee compensation; costs relating to the distribution of our content; costs
for occupancy, technology, and professional services; and other costs associated with our operations.
-82-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
(e) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA
to Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(f) Reflects the comparison between the Successor revenues for the three months ended September 30, 2026 to the non-GAAP pro
forma revenues for the three months ended September 30, 2025.
Revenues
Theatrical
Theatrical revenues for the third quarter of 2026 included revenues from the releases of Paw Patrol 3: The Dino
Movie and Heart of the Beast. Theatrical revenues in the 2025 Successor and Predecessor periods included
revenues from the third quarter 2025 releases of The Naked Gun and Smurfs.
Licensing and Other
Licensing and other revenues include Skydance Media revenues in 2026 and the 2025 Successor period.
The pro forma licensing and other revenue increase for the third quarter of 2026 reflects higher revenues from
secondary market licensing and content produced for third parties.
Expenses
Content Costs
Content costs in 2026 and the 2025 Successor period include costs for Skydance Media and certain of our
television studio operations, which were not in the 2025 Predecessor period. Content costs in 2026 and the 2025
Successor period were also impacted by an increase in the value of library content resulting from the pushdown of
the Ultimate Parent’s basis.
Advertising and Marketing
Advertising and marketing expenses in the third quarter of 2026 primarily reflect marketing costs associated with
the releases of Paw Patrol 3: The Dino Movie and Heart of the Beast. Advertising and marketing expenses for the
2025 Successor period primarily reflected costs for fourth quarter 2025 releases, and for the 2025 Predecessor
period primarily reflected marketing costs associated with the releases of Smurfs and The Naked Gun.
Adjusted EBITDA
Adjusted EBITDA in the third quarter of 2026 benefited from the increase in pro forma licensing revenues.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Studios/Filmed Entertainment
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Studios Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
Studios (GAAP) | Filmed Entertainment (GAAP) | Adjustments (a) | Studios (Non- GAAP) | ||||||||||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Pro Forma Increase/ (Decrease) (f) | |||||||||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||||||||
Theatrical | $402 | $39 | $475 | $— | $475 | $514 | $(112) | (22)% | |||||||||||||||||||
Licensing and other | 3,676 | 695 | 1,112 | 1,158 | 2,270 | 3,468 | 208 | 6 | |||||||||||||||||||
Advertising (c) | 15 | 4 | 6 | 5 | 11 | 15 | — | — | |||||||||||||||||||
Revenues | 4,093 | 738 | 1,593 | 1,163 | 2,756 | $3,997 | $96 | 2% | |||||||||||||||||||
Content costs | 2,719 | 540 | 846 | 907 | 1,753 | ||||||||||||||||||||||
Advertising and marketing | 430 | 57 | 417 | 8 | 425 | ||||||||||||||||||||||
Other (d) | 615 | 120 | 430 | 99 | 529 | ||||||||||||||||||||||
Expenses | 3,764 | 717 | 1,693 | 1,014 | 2,707 | ||||||||||||||||||||||
Adjusted EBITDA/OIBDA (e) | $329 | $21 | $(100) | $149 | $49 | ||||||||||||||||||||||
(a) Reflects the inclusion of the historical TV Media studio operations and updates to our segment expense allocations to better reflect
how we operate and make cost decisions across the business.
(b) Supplemental Non-GAAP Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the
Predecessor Non-GAAP Studios revenues for the period from January 1 - August 6, 2025 with the Successor revenues for the
Studios segment for the period from August 7 - September 30, 2025. Licensing and other and total Supplemental Non-GAAP Pro
Forma Revenues also include $503 million of Skydance Media revenues after the elimination of intercompany revenues from
Paramount Global during the Predecessor period from January 1 - August 6, 2025. While the Successor and Predecessor periods
are distinct reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net
assets, and are supplementally presented on a pro forma combined basis to help investors view these revenues in a manner
consistent with our management.
(c) Primarily reflects advertising revenues earned from the use of Studios content on third-party digital platforms.
(d) Other segment expenses for our Studios segment include employee compensation; costs relating to the distribution of our content;
costs for occupancy, technology, and professional services; and other costs associated with our operations.
(e) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA
to Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(f) Reflects the comparison between the Successor results for the nine months ended September 30, 2026 to the non-GAAP pro forma
revenues for the nine months ended September 30, 2025.
Revenues
Theatrical
Theatrical revenues for the nine months ended September 30, 2026 included revenues from the previously
mentioned third quarter releases, the second quarter 2026 release of Scary Movie (2026), and the first quarter 2026
release of Scream 7. Theatrical revenues in the 2025 Successor and Predecessor periods benefited from the third
quarter 2025 releases discussed above, and during the Predecessor period from January 1 - August 6, 2025 also
-84-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
benefited from the second quarter 2025 release of Mission: Impossible - The Final Reckoning as well as the fourth
quarter 2024 release of Sonic the Hedgehog 3.
Licensing and Other
Licensing and other revenues include Skydance Media revenues in 2026 and the 2025 Successor period.
The pro forma licensing and other revenue increase for the nine months ended September 30, 2026 reflects higher
revenues from secondary market licensing and content produced for third parties.
Expenses
Content Costs
Content costs in 2026 and the 2025 Successor period include costs for Skydance Media and certain of our
television studio operations, which were not in the 2025 Predecessor period. Content costs in 2026 and the 2025
Successor period were also impacted by an increase in the value of library content resulting from the pushdown of
the Ultimate Parent’s basis.
Advertising and Marketing
Advertising and marketing expenses for 2026 and the 2025 Successor and Predecessor periods primarily reflect
marketing costs for the theatrical releases discussed above. Advertising and marketing expenses for the 2025
Predecessor period from January 1 - August 6, 2025 also include marketing costs for the second quarter 2025
release of Mission: Impossible - The Final Reckoning.
Other
Other expenses for the nine months ended September 30, 2026 and the 2025 Successor period include costs for
Skydance Media and certain of our television studio operations, which were not in the 2025 Predecessor period.
Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2026 benefited from the increase in pro forma
licensing revenues.
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+.
-85-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Three Months Ended September 30, 2026 and 2025
Successor | Predecessor | Direct-to-Consumer Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
Direct-to-Consumer (GAAP) | Direct-to- Consumer (GAAP) | Adjustments (a) | Direct-to- Consumer (Non- GAAP) | ||||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Pro Forma Increase/ (Decrease) (f) | |||||||||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||||||||
Advertising | $542 | $300 | $179 | $— | $179 | $479 | $63 | 13% | |||||||||||||||||||
Affiliate and subscription | 1,968 | 1,043 | 704 | 40 | 744 | 1,787 | 181 | 10 | |||||||||||||||||||
Licensing (c) | — | 1 | — | — | — | 1 | (1) | (100) | |||||||||||||||||||
Revenues | 2,510 | 1,344 | 883 | 40 | 923 | $2,267 | $243 | 11% | |||||||||||||||||||
Content costs | 1,320 | 546 | 412 | 16 | 428 | ||||||||||||||||||||||
Advertising and marketing | 312 | 160 | 114 | 6 | 120 | ||||||||||||||||||||||
Other (d) | 653 | 329 | 252 | (14) | 238 | ||||||||||||||||||||||
Expenses | 2,285 | 1,035 | 778 | 8 | 786 | ||||||||||||||||||||||
Adjusted EBITDA/OIBDA (e) | $225 | $309 | $105 | $32 | $137 | ||||||||||||||||||||||
Successor | Predecessor | Supplemental Pro Forma Revenues (b) | |||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Pro Forma Increase/ (Decrease) (f) | |||||||||||||||
Paramount+ (Global) | 2026 | 2025 | 2025 | 2025 | $ | % | |||||||||||||
Revenues | $2,134 | $1,060 | $709 | $1,769 | $365 | 21% | |||||||||||||
(a) Reflects the inclusion of our premium cable channel, Paramount+ with Showtime, which was included in the TV Media segment in
2025, and updates to our segment expense allocations to better reflect how we operate and make cost decisions across the business.
(b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP
Direct-to-Consumer revenues for the period from July 1 - August 6, 2025 with the Successor revenues for the Direct-to-Consumer
segment for the period from August 7 - September 30, 2025. While the Successor and Predecessor periods are distinct reporting
periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net assets, and are
supplementally presented on a pro forma combined basis to help investors view these revenues in a manner consistent with our
management.
(c) Primarily reflects revenues from the licensing of content rights acquired by BET+.
(d) Other segment expenses for our Direct-to-Consumer segment include employee compensation; revenue-sharing costs, including for
third-party distribution; costs for occupancy, technology, and professional services; and other costs associated with our operations.
(e) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(f) Reflects the comparison between the Successor results for the three months ended September 30, 2026 to the non-GAAP pro forma
revenues for the three months ended September 30, 2025.
-86-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Successor | Predecessor | |||||||||||
Three Months Ended September 30, | Three Months Ended September 30, | Increase /(Decrease) | ||||||||||
2026 | 2025 | $ | % | |||||||||
Paramount+ Global | ||||||||||||
Subscribers (a) | 82.2 | 77.9 | 4.3 | 6% | ||||||||
ARPU (in dollars) (b) | $8.69 | $7.62 | $1.07 | 14% | ||||||||
(a) Subscribers include customers who are registered for Paramount+, either directly through our owned and
operated apps and websites, or through third-party distributors. Subscribers also include customers who are
provided with access through a subscription bundle with a domestic linear video streaming service (vMVPD)
or an international third-party distributor. Our subscriber count includes only paid subscriptions and reflects
the number of subscribers as of the applicable period-end date.
(b) We calculate average revenue per subscriber (“ARPU”) as total Paramount+ revenues during the applicable
period divided by the average of Paramount+ subscribers at the beginning and end of the period, further
divided by the number of months in the period.
Revenues
Advertising
The 13% pro forma increase in advertising revenues was driven by growth in impressions for Paramount+ and
higher political advertising sales. Advertising revenues in 2026 benefited from the streaming of UFC events on
Paramount+ under our new rights agreement that began in January 2026.
Affiliate and Subscription
Affiliate and subscription revenues for the third quarter of 2026 benefited from pricing increases and growth in
Paramount+ subscribers. Compared with September 30, 2025, Paramount+ subscribers increased 4.3 million, or
6%, driven by growth in domestic subscribers. Compared with the third quarter of 2025, ARPU grew 14% to
$8.69. The 10% pro forma increase in affiliate and subscription revenue reflects growth for Paramount+, partially
offset by a negative impact of 6% from combined revenue declines for BET+ and Paramount+ with Showtime. As
discussed above, BET+ was integrated into Paramount+ during the second quarter of 2026. The Paramount+ with
Showtime decrease reflects declines in linear subscribers.
During the third quarter of 2026, Paramount+ subscribers increased 0.6 million, or 1%, compared with 81.6 million
at June 30, 2026.
-87-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Expenses
Content Costs
Content costs for the third quarter of 2026 reflect higher costs associated with sporting events on Paramount+,
mainly for the UFC, and ongoing investment in original programming, partially offset by the impact of the
reduction in programming assets from the pushdown of the Ultimate Parent’s basis.
Advertising and Marketing
Advertising and marketing expenses for the third quarter of 2026 include marketing costs for UFC events on
Paramount+.
Other
Other expenses for the third quarter of 2026 reflect higher revenue-sharing costs, mainly for third-party
distribution.
Adjusted EBITDA
Adjusted EBITDA in the third quarter of 2026 reflects the impact from incremental costs associated with sporting
events and investment in original programming, partially offset by the pro forma revenue growth.
-88-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Direct-to-Consumer
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Direct-to-Consumer Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
Direct-to-Consumer (GAAP) | Direct-to- Consumer (GAAP) | Adjustments (a) | Direct-to- Consumer (Non- GAAP) | ||||||||||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Pro Forma Increase/ (Decrease) (f) | |||||||||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||||||||
Advertising | $1,594 | $300 | $1,146 | $— | $1,146 | $1,446 | $148 | 10% | |||||||||||||||||||
Affiliate and subscription | 5,788 | 1,043 | 3,940 | 251 | 4,191 | 5,234 | 554 | 11 | |||||||||||||||||||
Licensing (c) | — | 1 | 1 | — | 1 | 2 | (2) | (100) | |||||||||||||||||||
Revenues | 7,382 | 1,344 | 5,087 | 251 | 5,338 | $6,682 | $700 | 10% | |||||||||||||||||||
Content costs | 3,727 | 546 | 2,712 | 60 | 2,772 | ||||||||||||||||||||||
Advertising and marketing | 943 | 160 | 749 | 35 | 784 | ||||||||||||||||||||||
Other (d) | 1,870 | 329 | 1,473 | (78) | 1,395 | ||||||||||||||||||||||
Expenses | 6,540 | 1,035 | 4,934 | 17 | 4,951 | ||||||||||||||||||||||
Adjusted EBITDA/OIBDA (e) | $842 | $309 | $153 | $234 | $387 | ||||||||||||||||||||||
Successor | Predecessor | Supplemental Pro Forma Revenues (b) | |||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Pro Forma Increase/ (Decrease) (f) | |||||||||||||||
Paramount+ (Global) | 2026 | 2025 | 2025 | 2025 | $ | % | |||||||||||||
Revenues | $6,169 | $1,060 | $4,166 | $5,226 | $943 | 18% | |||||||||||||
(a) Reflects the inclusion of our premium cable channel, Paramount+ with Showtime, which was included in the TV Media segment in
2025, and updates to our segment expense allocations to better reflect how we operate and make cost decisions across the business.
(b) Supplemental Non-GAAP Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the
Predecessor Non-GAAP Direct-to-Consumer revenues for the period from January 1 - August 6, 2025 with the Successor revenues
for the Direct-to-Consumer segment for the period from August 7 - September 30, 2025. While the Successor and Predecessor
periods are distinct reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s
net assets, and are supplementally presented on a pro forma combined basis to help investors view these revenues in a manner
consistent with our management.
(c) Primarily reflects revenues from the licensing of content rights acquired by BET+.
(d) Other segment expenses for our Direct-to-Consumer segment include employee compensation; revenue-sharing costs, including for
third-party distribution; costs for occupancy, technology, and professional services; and other costs associated with our operations.
(e) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(f) Reflects the comparison between the Successor results for the nine months ended September 30, 2026 to the non-GAAP pro forma
revenues for the nine months ended September 30, 2025.
-89-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Revenues
Advertising
The 10% pro forma increase in advertising revenues was driven by growth in impressions for Paramount+.
Advertising revenues in 2026 benefited from the streaming of UFC events on Paramount+.
Affiliate and Subscription
Affiliate and subscription revenues for the nine months ended September 30, 2026 benefited from pricing increases
and growth in Paramount+ subscribers. The 11% pro forma increase reflects growth for Paramount+, partially
offset by a negative impact of 3% from combined revenue declines for BET+ and Paramount+ with Showtime.
Expenses
Content Costs
Content costs for the nine months ended September 30, 2026 reflect higher costs associated with sporting events on
Paramount+, mainly for the UFC, and ongoing investment in original programming, partially offset by the impact
from the net reduction in programming assets resulting from the pushdown of the Ultimate Parent’s basis.
Other
Other expenses in 2026 reflect higher revenue-sharing costs, mainly for third-party distribution.
Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2026 benefited from the pro forma revenue growth,
and the impact on content costs from the net reduction in programming assets resulting from the pushdown of the
Ultimate Parent’s basis, partially offset by higher costs associated with sporting events on Paramount+.
TV Media
Our TV Media segment consists of our (1) broadcast operations—the CBS Television Network, our domestic
broadcast television network; CBS Stations, our owned television stations; and our international free-to-air
networks, including Network 10 and Channel 5; (2) domestic basic cable networks, including MTV, Comedy
Central, Paramount Network, The Smithsonian Channel, Nickelodeon, BET Media Group, CBS Sports
Network, and international extensions of certain of these brands; and (3) CBS Media Ventures, which produces
and distributes first-run syndicated programming. TV Media also includes a number of digital properties such as
CBS News 24/7 for 24-hour news and CBS Sports HQ for sports news and analysis. For the Predecessor period,
the TV Media segment also included television studio operations and the premium cable network, Paramount+
with Showtime.
-90-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Three Months Ended September 30, 2026 and 2025
Successor | Predecessor | TV Media Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
TV Media (GAAP) | TV Media (GAAP) | Adjustments (a) | TV Media (Non- GAAP) | ||||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Pro Forma Increase/ (Decrease) (e) | |||||||||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||||||||
Advertising | $1,344 | $977 | $485 | $(1) | $484 | $1,461 | $(117) | (8)% | |||||||||||||||||||
Affiliate and subscription | 1,553 | 984 | 696 | (40) | 656 | 1,640 | (87) | (5) | |||||||||||||||||||
Licensing and other | 127 | 81 | 247 | (189) | 58 | 139 | (12) | (9) | |||||||||||||||||||
Revenues | 3,024 | 2,042 | 1,428 | (230) | 1,198 | $3,240 | $(216) | (7)% | |||||||||||||||||||
Content costs | 1,115 | 903 | 657 | (153) | 504 | ||||||||||||||||||||||
Advertising and marketing | 73 | 52 | 59 | (7) | 52 | ||||||||||||||||||||||
Other (c) | 808 | 527 | 430 | (73) | 357 | ||||||||||||||||||||||
Expenses | 1,996 | 1,482 | 1,146 | (233) | 913 | ||||||||||||||||||||||
Adjusted EBITDA/OIBDA (d) | $1,028 | $560 | $282 | $3 | $285 | ||||||||||||||||||||||
Successor | Predecessor | TV Media Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
TV Media (GAAP) | TV Media (GAAP) | Adjustments (a) | TV Media (Non- GAAP) | ||||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Three Months Ended September 30, | Pro Forma Increase/ (Decrease) (e) | |||||||||||||||||||||||
Advertising revenues | 2026 | 2025 | 2025 | 2025 | $ | % | |||||||||||||||||||||
Domestic | $1,177 | $818 | $395 | $(1) | $394 | $1,212 | $(35) | (3)% | |||||||||||||||||||
International | 167 | 159 | 90 | — | 90 | 249 | (82) | (33) | |||||||||||||||||||
Total | $1,344 | $977 | $485 | $(1) | $484 | $1,461 | $(117) | (8)% | |||||||||||||||||||
(a) Reflects the transfer of the historical TV Media studio operations to the Studios segment and our premium cable channel, Paramount+
with Showtime, to the Direct-to-Consumer segment, and updates to our segment expense allocations to better reflect how we operate
and make cost decisions across the business.
(b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP
TV Media revenues for the period from July 1 - August 6, 2025 with the Successor revenues for the TV Media segment for the period
from August 7 - September 30, 2025. While the Successor and Predecessor periods are distinct reporting periods, revenues were not
impacted by the new accounting basis established for Paramount Global’s net assets, and are supplementally presented on a pro
forma combined basis to help investors view these revenues in a manner consistent with our management.
(c) Other segment expenses for our TV Media segment include employee compensation; revenue-sharing costs to television stations
affiliated with the CBS Television Network; costs relating to the distribution of our content; costs for research, occupancy, technology,
and professional services; and other costs associated with our operations.
(d) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(e) Reflects the comparison between the Successor results for the three months ended September 30, 2026 to the non-GAAP pro forma
revenues for the three months ended September 30, 2025.
-91-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Revenues
Advertising
Advertising revenues in the third quarter of 2026 were primarily impacted by declines in the linear advertising
market. The 8% pro forma advertising revenue decline also includes a decrease of 3% from the absence of
advertising revenues from Telefe and Chilevisión, which were sold in October 2025 and January 2026,
respectively, offset by an increase of 3% from higher political advertising revenues.
Affiliate and Subscription
Affiliate and subscription revenues in the third quarter of 2026 were impacted by declines in linear subscribers.
Licensing and Other
Licensing and other revenues in 2026 and the 2025 Successor period primarily include revenues from the licensing
of first-run syndicated programming. Revenues from our television studios are not included in 2026 and the 2025
Successor period, but were included in the 2025 Predecessor period.
Expenses
Content costs, advertising and marketing expenses, and other expenses in the third quarter of 2026 benefited from
cost savings initiatives.
Adjusted EBITDA
Adjusted EBITDA in the third quarter of 2026 reflects the impact of cost savings initiatives.
-92-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
TV Media
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | TV Media Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
TV Media (GAAP) | TV Media (GAAP) | Adjustments (a) | TV Media (Non- GAAP) | ||||||||||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Pro Forma Increase/ (Decrease) (e) | |||||||||||||||||||||||
2026 | 2025 | 2025 | 2025 | $ | % | ||||||||||||||||||||||
Advertising | $4,685 | $977 | $4,180 | $(5) | $4,175 | $5,152 | $(467) | (9)% | |||||||||||||||||||
Affiliate and subscription | 4,754 | 984 | 4,302 | (251) | 4,051 | 5,035 | (281) | (6) | |||||||||||||||||||
Licensing and other | 379 | 81 | 1,495 | (1,185) | 310 | 391 | (12) | (3) | |||||||||||||||||||
Revenues | 9,818 | 2,042 | 9,977 | (1,441) | 8,536 | $10,578 | $(760) | (7)% | |||||||||||||||||||
Content costs | 4,019 | 903 | 4,956 | (980) | 3,976 | ||||||||||||||||||||||
Advertising and marketing | 219 | 52 | 328 | (43) | 285 | ||||||||||||||||||||||
Other (c) | 2,434 | 527 | 2,626 | (499) | 2,127 | ||||||||||||||||||||||
Expenses | 6,672 | 1,482 | 7,910 | (1,522) | 6,388 | ||||||||||||||||||||||
Adjusted EBITDA/OIBDA (d) | $3,146 | $560 | $2,067 | $81 | $2,148 | ||||||||||||||||||||||
Successor | Predecessor | TV Media Supplemental Pro Forma Revenues (b) (Non-GAAP) | |||||||||||||||||||||||||
TV Media (GAAP) | TV Media (GAAP) | Adjustments (a) | TV Media (Non- GAAP) | ||||||||||||||||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | Nine Months Ended September 30, | Pro Forma Increase/ (Decrease) (e) | |||||||||||||||||||||||
Advertising revenues | 2026 | 2025 | 2025 | 2025 | $ | % | |||||||||||||||||||||
Domestic | $4,149 | $818 | $3,585 | $(5) | $3,580 | $4,398 | $(249) | (6)% | |||||||||||||||||||
International | 536 | 159 | 595 | — | 595 | 754 | (218) | (29) | |||||||||||||||||||
Total | $4,685 | $977 | $4,180 | $(5) | $4,175 | $5,152 | $(467) | (9)% | |||||||||||||||||||
(a) Reflects the transfer of the historical TV Media studio operations to the Studios segment and our premium cable channel, Paramount+
with Showtime, to the Direct-to-Consumer segment, and updates to our segment expense allocations to better reflect how we operate
and make cost decisions across the business.
(b) Supplemental Non-GAAP Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the
Predecessor Non-GAAP TV Media revenues for the period from January 1 - August 6, 2025 with the Successor revenues for the TV
Media segment for the period from August 7 - September 30, 2025. While the Successor and Predecessor periods are distinct
reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net assets, and are
supplementally presented on a pro forma combined basis to help investors view these revenues in a manner consistent with our
management.
(c) Other segment expenses for our TV Media segment include employee compensation; revenue-sharing costs to television stations
affiliated with the CBS Television Network; costs relating to the distribution of our content; costs for research, occupancy, technology,
and professional services; and other costs associated with our operations.
(d) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to
Adjusted EBITDA. See Note 14 to the consolidated financial statements.
(e) Reflects the comparison between the Successor results for the nine months ended September 30, 2026 to the non-GAAP pro forma
revenues for the nine months ended September 30, 2025.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Revenues
Advertising
Advertising revenues for the nine months ended September 30, 2026 were impacted by declines in the linear
advertising market. The 2025 Predecessor period from January 1 - August 6, 2025 benefited from CBS’s broadcast
in the second quarter of 2025 of the National Semifinals and National Championship games of the NCAA
Tournament, which we have the rights to broadcast every other year.
On a pro forma basis, advertising revenues decreased 9%, which includes a decrease of 3% from the comparison to
the NCAA Tournament, as well as a decrease of 2% from the absence of advertising revenues from Telefe and
Chilevisión, which were sold in October 2025 and January 2026, respectively, partially offset by an increase of 2%
from higher political advertising revenues.
Affiliate and Subscription
Affiliate and subscription revenues for the nine months ended September 30, 2026 were impacted by declines in
linear subscribers.
Licensing and Other
Licensing and other revenues in 2026 and the 2025 Successor period primarily include revenues from the licensing
of first-run syndicated programming. Revenues from our television studios are not included in 2026 and the 2025
Successor period, but were included in the 2025 Predecessor period.
Expenses
Content costs, advertising and marketing expenses, and other expenses for the nine months ended September 30,
2026 benefited from cost savings initiatives. Content costs for the nine months ended September 30, 2026 and the
2025 Successor period from August 7 - September 30, 2025 also reflect the impact from the net reduction in
programming assets resulting from the pushdown of the Ultimate Parent’s basis. Content costs for the 2025
Predecessor period from January 1 - August 6, 2025 included costs associated with the broadcast of the National
Semifinals and National Championship games of the NCAA Tournament in the second quarter of 2025.
Adjusted EBITDA
Adjusted EBITDA for the nine months ended September 30, 2026 reflects the impact of cost savings initiatives and
the pushdown of the Ultimate Parent’s basis.
Liquidity and Capital Resources
Sources and Uses of Cash
We project anticipated cash requirements for our operating, investing and financing needs as well as cash flows
expected to be generated and available to meet these needs. Our operating needs include, among other items,
expenditures for content for our broadcast and cable networks and streaming services, including television and film
programming, sports rights, and talent contracts, as well as advertising and marketing costs to promote our content
and platforms; payments for leases, interest, and income taxes; and pension funding obligations.
Our investing and financing spending includes capital expenditures; acquisitions; funding of investments, including
our streaming joint venture, SkyShowtime, under which we and our joint venture partner committed to support
-94-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
initial operations over a multiyear period; discretionary share repurchases; dividends; and principal payments on
our outstanding indebtedness. Our long-term debt obligations due over the next five years (including the
borrowings under our Unsecured Credit Facility defined and described below in Capital Structure) were $5.91
billion as of September 30, 2026. Following the completion of the WBD Merger, and the related financing
transactions described in Capital Structure, long-term debt obligations due over the five years from the Closing
Date (excluding finance leases) were $20.29 billion. We routinely assess our capital structure and opportunistically
enter into transactions to manage our outstanding debt maturities, which could result in a charge from the early
extinguishment of debt.
In connection with the WBD Merger we issued or assumed additional debt with an aggregate principal amount of
$72.1 billion. We used the proceeds of the new borrowings, together with cash on hand and the proceeds of the
PIPE Transaction, to fund the acquisition consideration, repay WBD’s term loans, purchase notes of the WBD
Issuers in the Tender Offers, repay all borrowings under the Unsecured Credit Facility, and pay related fees and
expenses. Our $5.0 billion senior secured revolving credit facility was undrawn at closing and is available for
general corporate purposes. As a result of the increase in our indebtedness, we expect our interest payments to
increase significantly in future periods, with annual interest payments expected to be approximately $6 billion. See
Capital Structure below for a description of our debt instruments, including their interest rates, maturities and
covenants.
In addition, we expect to pay down and terminate WBD’s $4.0 billion accounts receivable securitization program
(of which $3.9 billion was utilized at the time of the WBD Merger) within 90 days of the Closing Date.
Funding for both our short-term and long-term operating, investing and financing needs will come primarily from
cash flows from operating activities, cash and cash equivalents, which were $1.38 billion as of September 30,
2026, and our ability to refinance our debt. Any additional cash funding requirements are financed with short-term
borrowings, including commercial paper, if available, and borrowings under the Revolving Credit Facility (defined
below), and long-term debt.
Our access to capital markets and the cost of any new borrowings are impacted by factors outside our control,
including economic and market conditions, as well as by ratings assigned by independent rating agencies, which
also affect the applicable margins on borrowings under the Pro Rata Credit Agreement (see “Capital Structure”
below). As a result, there can be no assurance that we will be able to access capital markets on terms and
conditions favorable to us.
-95-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Cash Flows
The changes in cash and cash equivalents were as follows:
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | |||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||
2026 | 2025 | 2025 | ||||||||||
Net cash flow provided by operating activities | $627 | $268 | $164 | |||||||||
Net cash flow used for investing activities | (3,253) | (42) | (276) | |||||||||
Net cash flow provided by (used for) financing activities | 762 | (821) | (159) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (33) | 7 | 70 | |||||||||
Net decrease in cash and cash equivalents | $(1,897) | $(588) | $(201) | |||||||||
Operating Activities
Net cash flow provided by operating activities includes payments of $475 million for the nine months ended
September 30, 2026 (Successor), $80 million for the period from August 7 - September 30, 2025 (Successor), and
$226 million for the period from January 1 - August 6, 2025 (Predecessor) associated with restructuring,
transaction-related items and transformation initiatives. Our transformation initiatives are related to advancing our
technology and operations, including the unification and evolution of systems and platforms, and migration to the
cloud.
Investing Activities
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | |||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||
2026 | 2025 | 2025 | ||||||||||
Investments | $(224) | $(1) | $(205) | |||||||||
Capital expenditures (a) | (242) | (46) | (134) | |||||||||
Advance consideration for WBD acquisition (b) | (2,800) | — | — | |||||||||
Proceeds from dispositions (c) | 19 | 5 | 66 | |||||||||
Other investing activities | (6) | — | (3) | |||||||||
Net cash flow used for investing activities | $(3,253) | $(42) | $(276) | |||||||||
(a) Includes payments associated with the implementation of our transformation initiatives of $42 million for the nine
months ended September 30, 2026 (Successor), $1 million for the 2025 Successor period, and $2 million for the 2025
Predecessor period.
(b) Reflects the termination fee paid to Netflix, on behalf of WBD (See Note 2 to the consolidated financial statements).
(c) 2025 Predecessor period primarily reflects proceeds received from the disposition of a noncore business, and all periods
include the collection of receivables associated with the 2022 sale of a 37.5% interest in The CW.
-96-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Financing Activities
Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | |||||||||||
Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||
2026 | 2025 | 2025 | ||||||||||
Borrowings under credit facility | $3,595 | $— | $— | |||||||||
Repayment of credit facility borrowings | (1,930) | — | — | |||||||||
Repayment of notes and debentures | (347) | — | — | |||||||||
Repayment of Skydance Media credit facility | — | (720) | — | |||||||||
Dividends paid on common stock | (174) | (33) | (101) | |||||||||
Payment of payroll taxes in lieu of issuing shares for stock-based compensation | (122) | (63) | (26) | |||||||||
Payments to noncontrolling interests | (190) | (2) | (32) | |||||||||
Other financing activities | (70) | (3) | — | |||||||||
Net cash flow provided by (used for) financing activities | $762 | $(821) | $(159) | |||||||||
Common Stock Dividends
The following table presents dividends declared per share and total dividends for Skydance Corporation Class A
and B Common Stock for the Successor periods and Paramount Global’s Class A and Class B Common Stock for
the Predecessor periods.
Three and Nine Months Ended September 30, 2026 and 2025
Successor | Predecessor | Successor | Predecessor | ||||||||||||||||||||||
Three Months Ended September 30, | Period From August 7 - September 30, | Period From July 1 - August 6, | Nine Months Ended September 30, | Period From August 7 - September 30, | Period From January 1 - August 6, | ||||||||||||||||||||
2026 | 2025 | 2025 | 2026 | 2025 | 2025 | ||||||||||||||||||||
Class A and Class B Common Stock | |||||||||||||||||||||||||
Dividends declared per common share | $.05 | $.05 | n/a | $.15 | $.05 | $.10 | |||||||||||||||||||
Total common stock dividends | $60 | $58 | n/a | $179 | $58 | $70 | |||||||||||||||||||
-97-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Capital Structure
The following table sets forth our debt.
At | At | ||||||
September 30, 2026 | December 31, 2025 | ||||||
Senior debt | $11,760 | $12,038 | |||||
Junior debt | 1,617 | 1,617 | |||||
Borrowings under unsecured credit facility | 1,665 | — | |||||
Obligations under finance leases | 2 | 3 | |||||
Total debt (a) | 15,044 | 13,658 | |||||
Less current portion | 668 | 433 | |||||
Total long-term debt, net of current portion | $14,376 | $13,225 | |||||
(a) In connection with the pushdown of the Ultimate Parent’s basis, our debt was recorded at fair value as of August 7,
2025, which resulted in a net decrease to our total debt balance of $898 million, reflecting the reversal of a net
unamortized discount of $390 million and unamortized deferred financing fees of $71 million, and a reduction of
$1.36 billion to adjust our debt to its fair value (see Note 3 to the consolidated financial statements). The adjustments
to fair value for each of our senior and junior debt issuances are being amortized over the remaining term of the
applicable issuance within interest expense. At September 30, 2026 and December 31, 2025, the total net unamortized
fair value adjustments for our senior and junior debt was $1.25 billion and $1.32 billion, respectively. The face value
of our total debt at September 30, 2026 and December 31, 2025 was $16.29 billion (including unsecured credit facility
borrowings discussed below) and $14.98 billion, respectively.
Senior Debt
At September 30, 2026, our senior debt was comprised of senior notes and debentures due between 2026 and 2050
with interest rates ranging from 2.90% to 7.875%.
In January 2026, we repaid our $347 million of 4.0% senior notes at maturity and in October 2026 we repaid our
$86 million of 3.70% senior notes at maturity.
Junior Debt
At September 30, 2026, our junior debt was comprised of $628 million 6.25% junior subordinated debentures due
2057 and $989 million 6.375% junior subordinated debentures due 2062. The subordination and extended term, as
well as an interest deferral option of our junior subordinated debentures, provide significant credit protection
measures for senior creditors.
-98-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Supplemental Guarantor Financial Information
Paramount Global is a 100% owned subsidiary of Skydance Corporation. Upon the closing of the Skydance
Transactions, Skydance Corporation provided a full and unconditional parent guarantee of Paramount Global’s
senior and junior debt. None of Skydance Corporation’s other subsidiaries are guarantors of Paramount Global’s
debt.
The tables below present combined summarized financial information for Skydance Corporation, the parent
guarantor, and Paramount Global, the issuer (jointly the “Obligor Group”) as standalone companies after
elimination of intercompany transactions and balances, and do not include nonguarantor and nonissuer
subsidiaries. This summarized financial information has been prepared and presented pursuant to the Securities and
Exchange Commission Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of
Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor
Group in accordance with U.S. GAAP.
Summarized Statement of Operations | |||||||
Nine Months Ended September 30, | Period From August 7 - December 31, | ||||||
2026 | 2025 | ||||||
Operating loss | $(358) | $(82) | |||||
Interest expense, net | $(718) | $(306) | |||||
Intercompany interest | $(242) | $(132) | |||||
Net loss | $(845) | $(546) | |||||
Summarized Balance Sheets | |||||||
At | At | ||||||
September 30, 2026 | December 31, 2025 | ||||||
Current assets | $791 | $1,350 | |||||
Noncurrent assets | $290 | $293 | |||||
Debt, current | $667 | $432 | |||||
Current liabilities | $627 | $664 | |||||
Long-term debt | $14,375 | $13,223 | |||||
Noncurrent liabilities | $2,229 | $2,222 | |||||
Notes payable to nonguarantor subsidiaries | $1,898 | $975 | |||||
Commercial Paper
At both September 30, 2026 and December 31, 2025, we had no outstanding commercial paper borrowings.
-99-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Unsecured Credit Facility
In April 2026, we entered into an amendment to our previous credit facility (the “Unsecured Credit Facility”),
increasing the commitments from $3.50 billion to $5.00 billion. The Unsecured Credit Facility was used for
general corporate purposes and to support commercial paper borrowings, if any and also allowed us to borrow, at
our option, in certain foreign currencies up to specified limits. In the first quarter of 2026, in connection with the
$2.8 billion termination fee paid to Netflix (see Note 2 to the consolidated financial statements), we borrowed
$2.15 billion under the Unsecured Credit Facility. As of September 30, 2026, outstanding borrowings totaled
$1.67 billion at a weighted average interest rate of 5.83% and the remaining availability was $3.3 billion. On the
Closing Date, in connection with the consummation of the WBD Merger, we repaid all borrowings with the
funding from the PIPE Transaction described in Note 2 to the consolidated financial statements and terminated all
credit commitments outstanding under the Unsecured Credit Facility.
The Unsecured Credit Facility had one principal financial covenant which set a maximum Consolidated Total
Leverage Ratio, which was 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 Unsecured Credit Facility) for the trailing twelve-month period at the end of each quarter.
The maximum ratio was 4.50x as of September 30, 2026 and we met the covenant.
Other Bank Borrowings
At both September 30, 2026 and December 31, 2025, there were no outstanding bank borrowings under Miramax’s
$50 million credit facility that matures in November 2027.
Subsequent Events in Connection with the WBD Merger
In connection with the WBD Merger we issued or assumed additional debt with an aggregate principal amount of
$72.1 billion. This amount consists of (i) $56.9 billion of debt incurred to finance the WBD Merger, comprised of
$5.0 billion of borrowings under the Term A Loan Facilities and $9.5 billion of Term B-1 Loans, each under the
Pro Rata Credit Agreement, $30.0 billion of First Lien Senior Secured Notes (the “First Lien Notes”), and
$12.4 billion of Second Lien Senior Secured Notes (the “Second Lien Notes”), (ii) $12.6 billion of Second Lien
Senior Secured Notes issued in the Exchange Offers (the “Second Lien Exchange Notes”), and (iii) $2.7 billion of
other outstanding unsecured notes and debentures of the WBD Issuers that we assumed. The newly issued debt is
further discussed below.
Pro Rata Credit Agreement
The Pro Rata Credit Agreement provides for (i) a $5.00 billion five-year senior secured revolving credit facility
(the “Revolving Credit Facility”), (ii) a $2.5 billion three-year senior secured term loan A-1 facility and (iii) a
$2.5 billion five-year senior secured term loan A-2 facility (together, the “Term A Loan Facilities”). The
availability and initial funding of the facilities under the Pro Rata Credit Agreement were subject to the
consummation of the acquisition of WBD, the termination of the Unsecured Credit Facility, and other customary
conditions and no amounts were outstanding as of September 30, 2026.
-100-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
On the Closing Date, in connection with the completion of the WBD Merger, we borrowed the full $2.5 billion
under each of the Term A Loan Facilities. The commitments under the Revolving Credit Facility became available
on the Closing Date, and no amounts were drawn. Also on the Closing Date, we entered into Amendment No. 1 to
the Pro Rata Credit Agreement (“Credit Agreement Amendment No. 1”), which provided for a senior secured
incremental tranche of term B loans consisting of (i) $8.5 billion of seven-year U.S. dollar-denominated term B-1
loans (the “Dollar Term B-1 Loans”) and (ii) €850 million of seven-year euro-denominated term B-1 loans (the
“Euro Term B-1 Loans” and, together with the Dollar Term B-1 Loans, the “Term B-1 Loans”). We borrowed the
full amount of the Term B-1 Loans on the Closing Date. The Term B-1 Loans mature on the seventh anniversary of
the Closing Date.
The loans drawn under the Term A Loan Facilities and the Revolving Credit Facility bear interest at a rate
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 Skydance’s corporate family 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 EURIBOR, SONIA and TIBOR, respectively.
The Dollar Term B-1 Loans bear interest, at our option, at a rate per annum equal to either the Alternate Base Rate
(as defined in the Pro Rata Credit Agreement) or Term SOFR plus a margin based on our Leverage Ratio that
ranges between 1.75% and 1.50% for Alternate Base Rate loans and 2.75% and 2.50% for Term SOFR Rate loans.
The Euro Term B-1 Loans bear interest at a rate per annum equal to EURIBOR plus a margin based on our
Leverage Ratio that ranges between 2.75% and 2.50%. Beginning with the quarter ending December 31, 2029, the
Dollar Term B-1 Loans will amortize at 1.00% of the initial principal amount per annum in quarterly installments,
with the remaining balance payable at maturity. No regular amortization is required with respect to the Euro Term
B-1 Loans.
Interest rates on benchmark rate borrowings under the Pro Rata Credit Agreement, including the Term A Loan
Facilities and the Term B-1 Loans, reset at the beginning of each interest period, and as a result, interest expense
on these borrowings will fluctuate with changes in market interest rates. In addition, the applicable margins may
change based on changes in our corporate family rating or the Leverage Ratio, as applicable.
Priority
The obligations under the Pro Rata Credit Agreement have been secured on a first lien basis on all or substantially
all of the assets of Skydance and its U.S. subsidiaries (including Paramount Global, Skydance Media, LLC, and
each of its respective U.S. subsidiaries) that are guarantors, excluding real property and subject to other customary
exceptions and a cap on the amount of assets and property of Paramount Global that can be subject to a lien
securing the Pro Rata Credit Agreement. On the date Skydance achieves certain credit ratings and satisfies certain
other conditions as specified in the Pro Rata Credit Agreement (such date, the “Investment Grade Fall-Away
Date”), the obligations under the Pro Rata Credit Agreement will become unsecured, and the guarantee of such
obligations by the subsidiary guarantors will be released (subject to certain exceptions).
-101-
Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Covenants
The Pro Rata Credit Agreement contains customary representations and warranties and also contains financial
covenants that require our Leverage Ratio and First Lien Net Leverage Ratio (each as defined in the Pro Rata
Credit Agreement) not to exceed 5.50x and 3.25x, respectively, in each case, at the end of each fiscal quarter. On
and after the Investment Grade Fall-Away Date, the First Lien Net Leverage Ratio financial covenant will cease to
apply and the Leverage Ratio financial covenant will be modified requiring that our Leverage Ratio not exceed
4.50x at the end of each fiscal quarter.
Optional Redemption
The loans under the Pro Rata Credit Agreement may be voluntarily prepaid, and unutilized commitments
thereunder may be voluntarily reduced, without penalty, other than customary breakage costs and, in the case of
the Term B-1 Loans, a 1.00% premium on Term B-1 Loans that are prepaid, converted or subjected to a pricing
reduction within six months after the Closing Date.
Senior Secured Notes
On October 5, 2026, we issued, in private placements exempt from registration under the Securities Act of 1933, as
amended (the “Securities Act”), $30.0 billion aggregate principal amount of First Lien Notes and $11.4 billion
aggregate principal amount of Second Lien Notes, together with €885 million aggregate principal amount of
Second Lien Notes denominated in euros (First Lien Notes together with the Second Lien Notes, the “Senior
Secured Notes”). The Senior Secured Notes bear interest at fixed rates, payable semi-annually in arrears, and
consist of the following:
Issuance of Senior Secured Notes | Face Value | ||
6.300% First Lien Notes due 2028 | $3,500 | ||
6.550% First Lien Notes due 2029 | 3,500 | ||
7.050% First Lien Notes due 2031 | 6,500 | ||
7.550% First Lien Notes due 2033 | 5,250 | ||
7.900% First Lien Notes due 2036 | 5,250 | ||
8.650% First Lien Notes due 2046 | 1,250 | ||
8.750% First Lien Notes due 2056 | 3,500 | ||
8.900% First Lien Notes due 2066 | 1,250 | ||
8.250% Second Lien Notes due 2031 | 6,000 | ||
8.875% Second Lien Notes due 2034 | 4,000 | ||
9.125% Second Lien Notes due 2036 | 1,400 | ||
7.000% Euro Second Lien Notes due 2031 (€885 million) | 1,003 | (a) | |
Total Senior Secured Notes | $42,403 | ||
(a) Translated at the spot rate at the time of pricing.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Priority
The First Lien Notes are secured by first-priority liens on all or substantially all of the assets of Skydance and the
Guarantors (as defined below) (the “Collateral”), subject to permitted liens and certain exceptions. The First Lien
Notes are guaranteed on a senior secured basis by each of Skydance’s existing and future wholly owned domestic
subsidiaries that is a borrower under or guarantees obligations under the Pro Rata Credit Agreement (collectively,
the “Guarantors”), subject to certain exceptions. The Second Lien Notes are secured by second-priority liens on the
Collateral, subject to permitted liens and certain exceptions. The Second Lien Notes are guaranteed on a senior
secured basis by the Guarantors. Upon the occurrence of an Investment Grade Event (as defined in the applicable
supplemental indenture for each series of notes with respect to the Senior Secured Notes, subject to certain
conditions (including the concurrent release of liens and guarantees securing other secured debt and the Company
having no greater than $250 million of term B loans outstanding at such time), the liens on the Collateral securing
such series of notes will be released and the note guarantees with respect to such series will be released. In
addition, certain covenants set forth in the applicable supplemental indenture relating to asset sales and future
subsidiary guarantors will cease to apply to such series of notes. These releases and covenant suspensions are
permanent and will not be reinstated upon any subsequent downgrade or withdrawal of the applicable investment
grade ratings.
Registration Rights
Pursuant to the registration rights agreement, dated as of October 5, 2026 (the “First Lien Senior Secured Notes
Registration Rights Agreement”), we have agreed to use commercially reasonable efforts to (i) file a registration
statement with respect to a registered offer to exchange each series of the First Lien Notes for new notes with terms
substantially identical in all material respects to such series of the First Lien Notes (such new notes, the “Exchange
Notes”) and cause the registration statement to be declared effective under the Securities Act within 730 days of
October 5, 2026, or (ii) in certain circumstances, file a shelf registration statement with respect to resales of the
First Lien Notes. The Second Lien Notes do not have any registration rights.
Optional Redemption and Change of Control Provisions
Each series of First Lien Notes may be redeemed at our option, in whole or in part, at a “make-whole” premium
prior to the applicable par call date and at 100% of principal on or after that date. For each series of First Lien
Notes, the par call date is within one to six months of maturity. For the Second Lien Notes, prior to October 15,
2028 (2031 Euro and 2031 Second Lien Notes), October 15, 2029 (2034 Second Lien Notes) and October 15, 2031
(2036 Second Lien Notes), we may redeem each series, in whole or in part, at a “make-whole” premium.
Thereafter each series of Second Lien Notes can be redeemed at call premiums starting at 3.500% to 4.563% of
principal and declining to zero one year prior to maturity (2031 Euro and 2031 Second Lien Notes) and three years
prior to maturity (2034 and 2036 Second Lien Notes). In addition, before October 15, 2028 (2031 Euro and 2031
Second Lien Notes) or October 15, 2029 (2034 and 2036 Second Lien Notes), we may redeem up to 40% of a
series of Second Lien Notes with the proceeds of equity offerings at 107.0% to 109.125% of principal, and up to
10% of such a series per calendar year at 103% of principal, plus in each case accrued and unpaid interest.
In addition, upon a change of control triggering event, holders of our Senior Secured Notes may require us to
repurchase their notes at 101% of principal plus accrued and unpaid interest.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
WBD Exchange Offers and Tender Offers
In May 2026, we commenced offers to exchange any and all of certain outstanding senior notes issued by the
WBD Issuers for Second Lien Exchange Notes newly issued by Skydance and also commenced offers to purchase
for cash two additional series of senior notes of the WBD Issuers. The Exchange Offers expired on October 6,
2026 following the closing of the WBD Merger, and holders of approximately 99.15% of the notes eligible to
participate in the Exchange Offers validly tendered their notes. Accordingly, upon settlement on October 9, 2026,
we issued to such holders $11.98 billion aggregate principal amount of dollar-denominated Second Lien Exchange
Notes and €546.5 million aggregate principal amount of euro-denominated Second Lien Exchange Notes. Such
notes were issued in private placements exempt from registration under the Securities Act. The dollar-denominated
notes pay interest semi-annually, and the euro-denominated notes pay interest annually, in each case in arrears. The
Second Lien Exchange Notes consist of the following:
Senior Secured Exchange Notes | Face Value | ||
6.304% Second Lien Exchange Notes due 2029 | $1,344 | ||
6.25% Second Lien Exchange Notes due 2029 | 654 | ||
4.875% Second Lien Exchange Notes due 2030 | 901 | ||
4.904% Second Lien Exchange Notes due 2032 | 2,674 | ||
5.00% Second Lien Exchange Notes due 2037 | 447 | ||
6.35% Second Lien Exchange Notes due 2040 | 432 | ||
4.95% Second Lien Exchange Notes due 2042 | 130 | ||
5.05% Second Lien Exchange Notes due 2042 | 4,065 | ||
4.875% Second Lien Exchange Notes due 2043 | 141 | ||
5.20% Second Lien Exchange Notes due 2047 | 3 | ||
5.30% Second Lien Exchange Notes due 2049 | 248 | ||
5.141% Second Lien Exchange Notes due 2052 | 944 | ||
5.802% Second Lien Exchange Notes due 2030 (€235 million) | 263 | ||
5.068% Second Lien Exchange Notes due 2033 (€311 million) | 349 | ||
Total Senior Secured Exchange Notes | $12,595 | ||
The Exchange Offers have been accounted for as debt modifications. Accordingly, the Second Lien Exchange
Notes were recorded at the carrying amount of the exchanged WBD notes.
The Second Lien Exchange Notes are senior secured obligations, guaranteed by the Guarantors and secured by
second-priority liens on the Collateral. They are junior in lien priority to the First Lien Notes and the loans and
commitments under the Pro Rata Credit Agreement, and equal in lien priority to the Second Lien Notes.
The Second Lien Exchange Notes are redeemable at our option. Most series may be redeemed at a “make-whole”
price before their par call date, which is between one and six months before maturity, and at 100% of principal on
or after that date, plus accrued and unpaid interest in each case. The 2032 Second Lien Exchange Notes and 2052
Second Lien Exchange Notes follow the same terms but cannot be redeemed before March 15, 2027. The 6.35%
2040, 4.95% 2042, and 4.875% Second Lien Exchange Notes have no par call date and may be redeemed at any
time at a “make-whole” price. The euro-denominated Second Lien Exchange Notes may also be redeemed in
whole at par upon certain changes in U.S. tax law. The change of control, tender offer, covenant and Investment
Grade Event provisions of the Second Lien Exchange Notes are substantially the same as those of the Second Lien
Notes issued on October 5, 2026 described above. The Second Lien Exchange Notes do not have registration
rights.
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
Concurrent with the Exchange Offers, on October 9, 2026 we purchased $2.40 billion in aggregate principal
amount of senior notes of the WBD Issuers (approximately 98.83% of the outstanding principal amount of those
series) for $2.38 billion in cash, plus accrued and unpaid interest, and the purchased notes were cancelled.
Guarantees
Letters of Credit and Surety Bonds
At September 30, 2026, we had outstanding letters of credit and surety bonds of $711 million that were not
recorded on the Consolidated Balance Sheet, including $454 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, contains customary representations and warranties and covenants substantively similar to the Credit
Facilities under the Pro Rata Credit Agreement, including the same principal financial covenant (see Note 8 to the
consolidated financial statements), and is secured on a first lien basis by the same collateral as the Pro Rata Credit
Agreement effective at closing of the WBD Merger.
Other
In the course of our business, we both provide and receive indemnities that are intended to allocate certain risks
associated with business transactions. Similarly, we may remain contingently liable for various obligations of a
business that has been divested in the event that a third party does not live up to its obligations under an
indemnification obligation. We record a liability for our indemnification obligations and other contingent liabilities
when probable and reasonably estimable.
Accounting Pronouncements Not Yet Adopted
See Note 1 to the consolidated financial statements.
Legal Matters
See Legal Matters section in Note 15 to the consolidated financial statements.
Cautionary Note Concerning Forward-Looking Statements
This Quarterly Report on Form 10-Q contains both historical and forward-looking statements, including statements
related to our future financial results and performance, potential achievements and transactions (including in
connection with our completed merger with WBD) and their expected benefits, and industry trends and
developments. All statements that are not statements of historical fact are, or may be deemed to be, forward-
looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly,
statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-
looking statements reflect our current expectations concerning future results and events; can generally be identified
by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,”
“likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases; and involve known and unknown
risks, uncertainties and other factors that are difficult to predict and which may cause our actual results,
performance or achievements to be different from any future results, performance or achievements expressed or
implied by these statements. These risks, uncertainties and other factors include, among others: risks that the
expected benefits, synergies and opportunities of the WBD Merger may not be realized or may take longer to
realize than expected; risks and costs associated with the integration of the business of WBD, including our ability
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Management’s Discussion and Analysis of
Results of Operations and Financial Condition (Continued)
(Tabular amounts in millions, except per share amounts)
to integrate successfully and to achieve anticipated synergies and financial targets; risks that we may not achieve
the expected run-rate synergies or other financial goals within the expected time frames or at all; risks related to the
commitments we made under the states consent decree; potential disruption to business operations and
relationships, including our and WBD’s business and commercial relationships, as a result of the WBD Merger and
ongoing integration; the risk of stockholder litigation and other litigation relating to the WBD Merger, including
litigation that could result in the payment of damages; risks related to our streaming business; the adverse impact
on our advertising revenues as a result of changes in consumer behavior, advertising market conditions and
deficiencies in audience measurement; risks related to operating in highly competitive and dynamic industries; the
unpredictable nature of consumer behavior, as well as evolving technologies and distribution models; risks related
to our decisions to invest in new businesses, products, services and technologies, and the evolution of our business
strategy; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of
our content; damage to our reputation or brands; losses due to asset impairment charges for goodwill, content and
long-lived assets, including finite-lived intangible assets; liabilities related to discontinued operations and former
businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business
continuity, cybersecurity, privacy and data protection and similar risks; challenges in protecting and maintaining
our intellectual property rights; domestic and global political, economic and regulatory factors affecting our
businesses generally; the inability to hire or retain key employees or secure creative talent; disruptions to our
operations as a result of labor disputes; risks and costs associated with the integration of, and our ability to
integrate, the businesses of Paramount Global, Skydance Media, LLC and WBD successfully and to achieve
anticipated synergies, including in the amounts or on the timelines anticipated to realize such synergies; litigation
relating to the Skydance Transactions potentially resulting in substantial costs; volatility in the price of our Class B
Common Stock; the effect our dual-class capital structure and the concentrated ownership may have on the price of
our Class B Common Stock or business; risks related to a private sale of a controlling interest in our Company,
including that our stockholders may not realize any change of control premium on shares of our Class B Common
Stock and that we may become subject to the control of a presently unknown third party; risks associated with our
status as a “controlled company” under New York Stock Exchange rules, including our exemption from certain
corporate governance requirements; risks associated with the lack of voting rights of our Class B Common Stock;
risks that anti-takeover provisions in our amended and restated certificate of incorporation (“Charter”) and
amended and restated bylaws, and under Delaware law could deter, delay, or prevent a change of control; risks that
exclusive forum provisions in our Charter could limit a stockholder’s choice of forum for certain claims and
discourage lawsuits against our directors and officers; risks that corporate opportunity provisions in our Charter
could permit certain persons to pursue competitive opportunities that might otherwise be available to us; risks
associated with our holding company structure, including our dependence on distributions from our subsidiaries to
meet our tax obligations and other cash requirements; risks to our business, financial condition or results of
operations as a result of the incurrence of substantial costs and indebtedness in connection with the WBD Merger;
risks related to our ability to incur substantially more debt and our ability to meet the financial and other covenants
contained in the agreements governing our substantial indebtedness; risks relating to our ability to deleverage the
business in accordance with management’s targets, including risks arising from assumptions, uncertainties and
contingencies that may affect our ability to reduce indebtedness; risks relating to management’s ability to execute
on our strategic plan and improve our financial profile and cash flows from operations; risks relating to any capital
or other financing we may have to raise in order to reduce our indebtedness following the WBD Merger; risks of
reduced ownership and economic interest by our previous stockholders as a result of the WBD Merger; risks
related to our Warrants; and other factors described in our news releases and filings with the Securities and
Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K and our reports
on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do not currently
view as material or that are not necessarily known. The forward-looking statements included in this Quarterly
Report on Form 10-Q are made only as of the date hereof, and we do not undertake any obligation to publicly
update any forward-looking statements to reflect subsequent events or circumstances.
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Item 3. | Quantitative and Qualitative Disclosures About Market Risk. |
Updates to our market risk exposure from those described in Item 7A, “Quantitative and Qualitative Disclosures
About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2025 are described
below.
Interest Rate Risk
On October 6, 2026, in connection with the completion of the WBD Merger, we borrowed $5.0 billion of Term A
Loans and $8.5 billion and €850 million of Term B-1 Loans under our Pro Rata Credit Agreement (see Note 8 to
the consolidated financial statements). These loans bear interest at variable rates based on Term SOFR or, for the
Euro Term B-1 Loans, EURIBOR, plus an applicable margin, and expose us to changes in market interest rates. As
of October 6, 2026, the aggregate principal amount of our variable-rate borrowings was approximately $14.5
billion. A hypothetical 1.00% increase or decrease in the applicable benchmark rates would increase or decrease
our annual interest expense by approximately $145 million. Our senior secured notes, including the second lien
secured exchange notes issued in the Exchange Offers, bear interest at fixed rates.
Foreign Currency Exchange Rate Risk
The Euro Term B-1 Loans and our euro-denominated second lien senior secured notes expose us to risk from
movements in foreign currency exchange rates when translating from euros to U.S. dollars. We entered into fixed-
for-fixed cross-currency swaps to hedge this exposure on the second lien senior secured notes, which are
designated as fair value hedges. The Euro Term B-1 Loans were designated as hedges of our net investment in
certain euro functional currency subsidiaries. See Note 9 to the consolidated financial statements.
Item 4. | Controls and Procedures. |
Our principal executive officer and principal financial officer have concluded that, as of the end of the period
covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the
Securities Exchange Act of 1934, as amended) were effective, based on the evaluation of these controls and
procedures required by Rule 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended.
No change in our internal control over financial reporting occurred during our last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. | Legal Proceedings. |
The information set forth in Note 15 to the consolidated financial statements appearing in Item 1 of Part I of this
Quarterly Report on Form 10-Q under the caption “Legal Matters” is incorporated by reference herein.
Item 1A. | Risk Factors. |
In addition to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2025
(filed with the Securities and Exchange Commission on February 25, 2026), the following risks relating to the
WBD Merger and our issuance on October 13, 2026 of warrants to purchase shares of our Class B Common Stock
(the “Warrants”) could adversely affect our business, financial condition or results of operations. Capitalized terms
used in the section entitled “Risks Relating to the Warrants” but not defined in that section have the meanings
given in our prospectus supplement relating to the Warrants, filed with the Securities and Exchange Commission
on October 5, 2026 (the “Prospectus”).
Risks Relating to the WBD Merger
The commitments we made under the States Consent Decree restrict how we operate our business, raise our
costs and may require us to divest certain assets. Any failure to comply could subject us to monetary payments,
required divestitures and other adverse consequences.
In September 2026, the Company and WBD entered into a Consent Decree (the “States Consent Decree”) with
twelve states (collectively, the “Plaintiff States”). The States Consent Decree requires the combined company and
its subsidiaries to meet a broad set of commitments over a five-year commitment period. Among other things, the
combined company must:
•release at least 30 to 32 films in the United States annually, subject to minimums for wide-release,
independent, self-produced and higher-budget films, with theatrical windows of at least 45 days and no
subscription streaming availability for at least 90 days;
•comply with negotiation obligations regarding affiliation terms for the Company’s and WBD’s basic cable
portfolios; spend at least $300 million more annually on U.S. production than combined 2025 levels, retain and
operate both studio lots, and honor existing collective bargaining agreements;
•fund $9.5 million annually in workforce and arts programs and $5 million annually for an Independent Film
Fund;
•establish a News Editorial Independence Board for CBS News and CNN and maintain Pluto TV as a free, ad-
supported service; and
•comply with monitoring and reporting obligations and reimburse up to $40 million of the Plaintiff States’ fees
and costs.
These commitments restrict how and when we release films and will increase our costs. They may also limit our
ability to realize the synergies we expect from the WBD Merger.
Additionally, if we fail to comply, we could face adverse consequences, including the divestiture of Miramax
Studios, a $30 million payment for each film shortfall and the divestiture of certain cable networks. Any divestiture
could occur on unfavorable terms, and non-compliance could also lead to enforcement actions and reputational
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harm. Any of the foregoing could have a material adverse effect on our business, financial condition and results of
operations.
The WBD Merger may cause disruption in our business and commercial relationships.
The WBD Merger could cause disruptions to our business or commercial relationships, including those of the
WBD business, which could have an adverse impact on our business, financial condition or results of operations.
Parties with which we have business relationships may experience uncertainty regarding the integration of our
businesses and the future of such relationships and may delay or defer certain business decisions, seek alternative
relationships with third parties or seek to alter their present business relationships with us. Parties with whom we or
WBD otherwise may have sought to establish business relationships may seek alternative relationships with third
parties. We have experienced, and may continue to experience, negative publicity relating to the WBD Merger,
which could have an adverse effect on our ongoing operations, including, but not limited to, retaining and
attracting employees and creative talent, maintaining our relationships with existing customers and obtaining
potential new customers. We compete with other content creators for creative talent, including producers, directors,
actors and writers, and if we fail to retain or attract new key employees or creative talent, our business, financial
condition or results of operations could be adversely affected.
The integration of WBD may place a significant burden on our management and internal resources. The diversion
of management’s attention away from day-to-day business concerns and any difficulties encountered in the
transition and integration process could adversely affect our business, financial condition or results of operations.
Litigation relating to the WBD Merger could result in the payment of damages.
In connection with the WBD Merger, we and WBD are subject to litigation and related proceedings, including
proceedings seeking monetary damages, and we may become subject to additional litigation, demand letters,
claims, enforcement actions or other proceedings relating to the WBD Merger. See Note 15 to the consolidated
financial statements appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q under the caption “Legal
Matters—Litigation Relating to the WBD Merger,” and Part II, Item 1, “Legal Proceedings,” for additional
information regarding certain pending WBD Merger litigation and related proceedings.
The outcome of litigation and other proceedings is uncertain, and these matters, and any additional litigation,
demand letters, claims, enforcement actions or other proceedings relating to the WBD Merger, could result in
substantial costs, result in the payment of damages, or otherwise adversely affect our business, financial condition
or results of operations.
In addition, governmental authorities could initiate additional actions challenging the WBD Merger, which could
result in burdensome conditions, terms, obligations or restrictions, or otherwise adversely affect the post-close
entity.
Although we expect the WBD Merger will result in synergies and other benefits, those synergies and benefits
may not be realized or may not be realized within the expected time frame. WBD’s business may not be
integrated successfully, or such integration may be more difficult, time-consuming or costly than expected.
Operating costs, customer loss and business disruption, including difficulties in maintaining relationships with
employees, customers, suppliers or vendors, may be greater than expected following the WBD Merger. Revenues
following the WBD Merger may be lower than expected.
Our ability to realize the anticipated benefits of the WBD Merger will depend, to a large extent, on our ability to
integrate WBD’s business in a manner that facilitates growth opportunities or achieves the potential synergies, cost
savings or revenue growth opportunities we have identified without adversely affecting current revenues or
investments in future growth. Even if we are able to successfully integrate WBD, the anticipated benefits of the
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WBD Merger, including the expected synergies, may not be realized fully or at all or may take longer to realize
than expected.
The acquisition of another public company and integration of its business with our business are complex, costly
and time-consuming and may divert significant management attention or resources towards integration at the
expense of our ordinary course business practices and operations. Post-closing, our management may face
significant challenges in integrating the technologies, organizations, systems, procedures, policies and operations,
as well as addressing the different business cultures at Skydance and WBD, managing the increased scale and
scope of the combined businesses, identifying and eliminating duplicative programs, and retaining key personnel.
The post-closing integration process could take longer than anticipated and could result in the loss of key
employees, the disruption of each company’s ongoing businesses, tax costs or inefficiencies, or inconsistencies in
standards, controls, information technology systems, procedures and policies, any of which could adversely affect
our ability to maintain relationships with customers, employees or other third parties. The overall combination of
Skydance’s and WBD’s businesses may also result in material unanticipated expenses, liabilities, competitive
disadvantages, and loss of customer, creative talent and other business relationships. Failure to efficiently and
effectively integrate the two businesses and to realize the anticipated benefits of the WBD Merger could adversely
affect our business, financial condition or results of operations.
The difficulties of combining the operations of Skydance and WBD include, among others:
•the diversion of management attention to integration matters;
•difficulties in integrating operations and systems, including administrative, human resources and information
technology infrastructure, financial reporting and internal control systems and intellectual property and
communications systems;
•challenges in conforming standards, controls, procedures and accounting and other policies, business cultures
and compensation structures between the two companies;
•difficulties in integrating employees and attracting and retaining key personnel, including talent;
•challenges in retaining existing, and obtaining new customers, viewers, subscribers, suppliers, distributors,
licensors, lessors, employees, business associates, advertisers, creative talent and others;
•difficulties in achieving anticipated cost savings, synergies, accretion targets, business opportunities, financing
plans and growth prospects from the combination;
•difficulties in managing the expanded operations of a significantly larger and more complex combined
company;
•the costs of servicing the increased indebtedness and interest expense of the combined company resulting from
the WBD Merger and the related financing transactions;
•challenges in continuing to develop valuable and widely-accepted content and technologies;
•contingent liabilities that are larger than expected; and
•potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the
WBD Merger.
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Many of these factors are outside of our control, and any one of them could result in lower revenues, higher costs
and diversion of management time and energy, which could materially and adversely impact our business, financial
condition or results of operations. In addition, even if the operations of WBD’s business are integrated successfully
with Skydance, the full benefits of the WBD Merger may not be realized, including, among others, the synergies,
cost savings or sales or growth opportunities that are expected. These benefits may not be achieved within the
anticipated time frame or at all. Further, additional unanticipated costs may be incurred in the integration of
WBD’s business and the financing of the transactions. All of these factors could cause dilution to the earnings per
share of Skydance, decrease or delay the projected accretive effect of the WBD Merger, and negatively impact the
price of our Class B Common Stock following the WBD Merger. As a result, no assurances can be provided that
the acquisition of WBD will result in the realization of the full benefits expected from the WBD Merger within the
anticipated time frames or at all.
We have incurred, and will continue to incur, substantial direct and indirect costs as a result of the WBD
Merger.
We have incurred, and will continue to incur, substantial expenses in connection with and as a result of completing
the WBD Merger, including financial advisory, legal, accounting, consulting and other advisory fees and expenses,
employee-benefit and related expenses, regulatory filings, financing fees and filing and printing fees. In addition,
over a period of time following the closing of the WBD Merger (the “Closing”), we expect to incur substantial
expenses in connection with integrating and coordinating WBD’s business, operations, policies and procedures.
While we have estimated the transaction and integration expenses we expect to incur, factors beyond our control
could affect the total amount or the timing of these expenses. Many of the expenses that will be incurred are, by
their nature, difficult to estimate accurately. These expenses may exceed the costs historically borne by us. These
costs could adversely affect our business, financial condition or results of operations.
We incurred substantial indebtedness in connection with the WBD Merger, and our leverage may materially
and adversely affect our business, financial condition and results of operations.
We incurred substantial indebtedness in connection with the WBD Merger. We incurred (or assumed) additional
debt with an aggregate principal amount of $72.1 billion in connection with the WBD Merger. This amount
consists of (i) $56.9 billion of debt incurred to finance the WBD Merger, comprised of $5.0 billion of borrowings
under the Term A Loan Facilities and $9.5 billion of Term B-1 Loans, each under the Pro Rata Credit Agreement,
$30.0 billion of First Lien Senior Secured Notes, and $12.4 billion of Second Lien Senior Secured Notes, (ii)
$12.6 billion of Second Lien Exchange Notes issued in our exchange offers for certain outstanding senior notes of
subsidiaries of WBD (the “WBD Issuers”), and (iii) $2.7 billion of other outstanding unsecured notes and
debentures of the WBD Issuers that we assumed. The foregoing indebtedness was incurred (or assumed) following
September 30, 2026, and therefore constitutes a subsequent event, as described further in Note 2 and Note 8 to the
consolidated financial statements. As a result, such indebtedness is in addition to our debt with an aggregate
principal amount of $16.29 billion as of September 30, 2026 (of which $1.75 billion was repaid subsequent to
September 30, 2026, including in connection with the WBD Merger).
Our ability to make payments on and to refinance our indebtedness, including the debt incurred pursuant to the
WBD Merger, as well as any future debt that we may incur, will depend on our ability to generate cash in the
future from operations or financings. Our ability to generate cash is subject to general economic, financial,
competitive, legislative, regulatory and other factors that are beyond our control. We may not generate sufficient
cash flow from our operations, or future borrowings may not be available to us in an amount sufficient, to service
our debt and meet our business needs, such as funding working capital or the expansion of our operations.
If our cash flows and capital resources are insufficient to fund debt service obligations or we are not able to repay
or refinance our debt as it becomes due, we may be forced to take certain actions, including reducing spending on
content and programming, reducing future financing for working capital, capital expenditures and general
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corporate purposes, reducing or delaying investments, reducing, suspending or eliminating our dividend, disposing
of material assets or operations, seeking additional debt or equity capital, restructuring or refinancing our
indebtedness or dedicating an unsustainable level of our cash flow from operations to the payment of principal and
interest on our indebtedness. The lenders or bondholders that hold our debt could also accelerate amounts due in
the event that we default, which could potentially trigger a default or acceleration of the maturity of our other debt.
The level and quality of the combined company’s earnings, operations, business and management, among other
things, will impact the determination of the combined company’s credit ratings. A decrease in the ratings assigned
to the combined company or any series of its debt by the ratings agencies may negatively impact the combined
company’s access to the debt capital markets and increase the combined company’s cost of borrowing. There can
be no assurance that the combined company will be able to obtain financing on acceptable terms or at all, or be
able to generate sufficient cash flow to reduce leverage in the time frame expected or at all. In addition, there can
be no assurance that the combined company will be able to maintain the creditworthiness or prospective credit
ratings of Skydance or WBD, particularly given recent negative ratings actions or credit watches taken in light of
the WBD Merger, and any further actual or anticipated changes or downgrades in such credit ratings may have a
negative impact on the liquidity, capital position or access to capital markets of the combined company.
In addition, our leverage could put us at a competitive disadvantage compared to our competitors that are less
leveraged. These competitors could have greater financial flexibility to pursue strategic acquisitions and secure
additional financing for their operations. Our leverage could also impede our ability to withstand downturns in our
industry or the economy in general.
Despite our current level of indebtedness, we may still incur substantially more indebtedness. This could
exacerbate the risks associated with our substantial indebtedness.
We may incur substantial additional indebtedness in the future. The terms of the agreements governing the
indebtedness we have incurred in connection with the WBD Merger may limit, but not prohibit, us from incurring
additional indebtedness. If new indebtedness is added to our current debt levels, the related risks that we now face
could increase. Any additional indebtedness could have the effect of, among other things, reducing our flexibility
to respond to changing business and economic conditions. In addition, the amount of cash required to pay interest
on any additional indebtedness levels will increase the demand on our cash resources and reduce funds available
for capital expenditures, share repurchases and dividends, and other activities and may create competitive
disadvantages for us relative to other companies with lower debt levels.
Our preexisting stockholders have a reduced ownership and economic interest in Skydance after the WBD
Merger. The PIPE Transaction and the issuance of the Warrants may cause dilution to the earnings per share
of Skydance, which may negatively affect the market price of our Class B Common Stock.
Following the Closing, the Equity Syndication Parties (excluding affiliates of the Ellison Parties and RedBird)
received approximately 45% of the outstanding shares of our Class B Common Stock as a result of the PIPE
Transaction (as defined in the WBD Merger Agreement). The shares of Class B Common Stock issued in the PIPE
Transaction represent, in the aggregate, 78% of the shares of our Class B Common Stock outstanding after giving
effect to the PIPE Transaction.
Consequently, our preexisting stockholders have a reduced ownership and economic interest following the
consummation of the WBD Merger and the PIPE Transaction. Additionally, the Subscription Agreement with the
Ellison Parties resulted in the issuance of additional shares of Class B Common Stock in the amount required to
finance the Ticking Consideration (as defined in the WBD Merger Agreement).
The shares of Class B Common Stock issued in the PIPE Transaction are deemed to be “restricted securities”
within the meaning of Rule 144 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), subject to a
holding period pursuant to Rule 144. The participants in the PIPE Transaction entered into a registration rights
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agreement that entitles them to certain demand, piggyback and resale registration rights. Certain participants have
also entered into lock-ups that prohibit transfers of shares acquired in the PIPE Transaction for a period of 180
days without the prior consent of the Company, subject to certain carveouts. Such shares may be sold in the public
market only if registered or if they qualify for an exemption from registration, including the exemptions pursuant
to Rule 144. Consequently, the public float for our Class B Common Stock is smaller than it would be if the
ownership of our Class B Common Stock were less concentrated. If we do not increase our public float following
the Closing, our Class B Common Stock may be less liquid than the shares of companies with broader public
ownership, which could increase the volatility and adversely affect the trading price of our Class B Common
Stock. While the exercise of Warrants would increase the total number of shares of Class B Common Stock
outstanding, the exercise of Warrants may not meaningfully increase the public float of our Class B Common
Stock.
The issuance of shares of our Class B Common Stock as part of the PIPE Transaction and the shares of Class B
Common Stock issuable upon the exercise of the Warrants could have the effect of depressing the market price of
our Class B Common Stock. Furthermore, if we raise additional equity capital following the Closing, including in
order to achieve our deleveraging goals with respect to the substantial indebtedness we have incurred in connection
with the WBD Merger, any such equity financings would result in additional dilution to holders of our common
stock. In addition, we could encounter other transaction-related costs or effects, such as the failure to realize all of
the benefits anticipated in the WBD Merger, which could cause dilution to earnings per share or decrease or delay
the expected accretive effect of the WBD Merger and cause a decrease in the market price of our Class B Common
Stock.
Risks Relating to the Warrants
An active public market for the Warrants may not be sustained, which would adversely affect the liquidity and
market price of the Warrants.
The Warrants are subject to trading dynamics over which we have no control. An active and orderly trading market
for the Warrants may not be sustained. The trading market for the Warrants may lack adequate size, liquidity or
price transparency or may have an unusually high bid-ask spread. Warrantholders may be unable to sell their
Warrants at a price that is favorable to such Warrantholders. The Warrants were distributed all at once, which
could lead to demand and supply imbalances and negatively impact the trading price of the Warrants, particularly
if there is little or no market demand for the Warrants.
The trading price for the Warrants may bear little or no relationship to traditional valuation methods, or to the
market price of our Class B Common Stock, and therefore the trading price of the Warrants may fluctuate
significantly.
The trading price of the Warrants may have little or no relationship to, and may be significantly lower, or at times
higher, than the price that would otherwise be established using traditional indicators of value, such as our future
prospects and those of our industry in general; future potential revenues, earnings, cash flows, and other financial
and operating information, or multiples thereof; market prices of securities and other financial and operating
information of companies engaged in activities similar to ours; and the views of research analysts. Warrantholders
who do not intend to hold the Warrants may sell them, which may create downward pressure on the trading price
of the Warrants.
Hedging arrangements relating to the Warrants may affect the value and volatility of our Class B Common
Stock or other securities.
In order to hedge their financial positions, Warrantholders may enter into hedging transactions with respect to our
Class B Common Stock or other securities of ours, may unwind or adjust hedging transactions and may purchase
or sell large blocks of our Class B Common Stock or other securities in one or more market transactions, including
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in secondary market transactions. The effect, if any, of these activities on the trading price of our Class B Common
Stock or such other securities will depend in part on market conditions and cannot be known in advance, but any of
these activities could adversely affect the value and price volatility of our Class B Common Stock or such other
securities.
Warrantholders may lose some or all of their financial investment after exercising a Warrant.
Warrantholders may incur a financial or other loss upon or subsequent to the exercise of a Warrant due to a drop in
our stock price, or by a failure to timely deliver shares as of any particular date after exercise, or for other reasons.
In order for Warrantholders to recover the value of their investment in the shares of Class B Common Stock
received upon exercise of a Warrant at the Exercise Price for Physical Settlement, the aggregate value of Class B
Common Stock so received per Warrant must be more than the Exercise Price of such Warrant, which is initially
$12.00 per share. There can be no assurance that the market price of our Class B Common Stock will exceed the
Exercise Price for Physical Settlement at any time prior to the expiration of the Warrants. To the extent the market
value of our Class B Common Stock does not exceed the Exercise Price for Physical Settlement, investors may be
unable to resell shares at or above the price at which they acquired them through the exercise of Warrants for
Physical Settlement. The price of our Class B Common Stock may fluctuate significantly and trade below the
Exercise Price for Physical Settlement, in which case investors could incur substantial losses.
Speculation in our publicly traded Class B Common Stock or the Warrants may result in extreme price
volatility.
Stockholders or Warrantholders or outside investors may speculate on the direction of movements in the price of
our Class B Common Stock or Warrants. Speculation in the price of our Class B Common Stock or Warrants may
involve long and short exposures. Sudden changes in demand or supply for our Class B Common Stock or
Warrants due to speculation or other reasons may create trading anomalies that add volatility to the trading price of
these securities. The volatility or direction of our stock price or Warrant price may be unrelated or disproportionate
to our operating results, which could cause significant losses to such investments.
We may designate an Early Expiration Date for the Warrants if certain stock price conditions are satisfied
following the date that is the third anniversary of the issuance of the Warrants, which could shorten the period
during which Warrantholders may exercise Warrants.
Following the date that is the third anniversary of the issuance of the Warrants, or October 13, 2029, if the Early
Expiration Price Condition is satisfied, we may, in our sole discretion, designate an Early Expiration Date for the
Warrants that is earlier than the Scheduled Expiration Date. As a result, Warrantholders may have less time to
decide whether to exercise Warrants than if the Warrants remained outstanding until the Scheduled Expiration
Date. This could require Warrantholders to make investment decisions regarding the exercise of their Warrants
earlier than they may otherwise have chosen, which could adversely affect the value of the Warrants.
The issuance of Class B Common Stock upon the exercise of the Warrants may depress the stock price for
shares of our Class B Common Stock.
On October 13, 2026, we issued approximately 470.7 million Warrants, each of which is exercisable initially for
one share of Class B Common Stock. Subject to the adjustment provisions of the Warrant Agreement, if all
outstanding Warrants are exercised through Physical Settlement, we would issue approximately 470.7 million
shares of Class B Common Stock, representing an approximately 9% increase from our number of shares of Class
B Common Stock outstanding as of November 4, 2026. The issuance of such additional shares of Class B Common
Stock upon exercise of the Warrants, and the resale of such shares on the open market after their issuance, or the
perception that such sales could occur, could result in significant downward pressure on the stock price for shares
of our Class B Common Stock. In addition, the price of our Class B Common Stock could be adversely affected by
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possible sales, including short sales, of our Class B Common Stock by investors in the Warrants and other
securities who engage in hedging and arbitrage activities.
Warrantholders will not be entitled to any of the rights of holders of our Class B Common Stock and the
Warrants will not participate in any dividends prior to the exercise thereof.
In general, Warrantholders will not be entitled to any rights with respect to our Class B Common Stock, including,
without limitation, voting rights and rights to receive any dividends or other distributions on our Class B Common
Stock, but Warrantholders will be subject to all changes affecting our Class B Common Stock.
Since August 7, 2025, we have declared five quarterly cash dividends of $0.05 per share on our Class A and Class
B Common Stock. The Warrants will not participate in any dividends declared on our shares of Class B Common
Stock. Additionally, although the Warrants will be adjusted for certain distributions on our Class B Common Stock
as described in the Prospectus, the Warrants will not be adjusted for any regular quarterly cash dividends that are in
the aggregate less than or equal to $0.05 per share of Class B Common Stock. Any determination to declare or pay
dividends, including whether to continue paying our current quarterly dividend or to increase, reduce, suspend or
discontinue it, would be made by our Board of Directors and would depend upon our results of operations,
financial condition, contractual restrictions, restrictions imposed by applicable law and other factors that the Board
of Directors deems relevant.
The Warrants do not automatically exercise, and any Warrant not exercised prior to the Expiration Date will
lose all financial value.
The Warrants do not automatically exercise, even if the value of our Class B Common Stock receivable upon
exercise of a Warrant exceeds the Exercise Price. Warrantholders are entitled to exercise the full number of
Warrants they hold or any portion thereof. Any Warrants that are not exercised (including due to failure to pay the
Exercise Price when due) during the Exercise Period will expire unexercised, meaning the Warrants will no longer
exist, and Warrantholders will also not receive any shares of our Class B Common Stock or other value in
connection with such Warrants.
Warrantholders may be subject to tax upon an adjustment to the Exercise Price or the Number of Shares even
though they do not receive a corresponding cash distribution.
The Exercise Price and the Number of Shares are subject to adjustment in certain circumstances. To the extent any
such adjustment or failure to adjust results in an increase in Warrantholders’ proportionate interest in our assets or
our earnings and profits, Warrantholders may be deemed to have received for U.S. federal income tax purposes a
taxable dividend to the extent deemed paid out of our earnings and profits without the receipt of any cash. If
Warrantholders are Non-U.S. Holders, such deemed dividend generally will be subject to U.S. federal withholding
tax, which may be set off against shares of our Class B Common Stock to be delivered upon exercise of Warrants.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Company Purchases of Equity Securities
None.
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Item 6. | Exhibits. |
Exhibit No. | Description of Document | |
(10) | Material Contracts | |
(a) | Employment Agreement, dated as of September 27, 2026, by and among Paramount Skydance Corporation, Paramount Global and Ynon Kreiz (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Paramount Skydance Corporation filed October 1, 2026) (File No. 001-42791). | |
(31) | Rule 13a-14(a)/15d-14(a) Certifications | |
(a) | Certification of the principal executive officer of Skydance Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | |
(b) | Certification of the principal financial officer of Skydance Corporation pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith). | |
(32) | Section 1350 Certifications | |
(a) | Certification of the principal executive officer of Skydance Corporation furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | |
(b) | Certification of the principal financial officer of Skydance Corporation furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished herewith). | |
(101) | Interactive Data File | |
101. INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||
101. SCH Inline XBRL Taxonomy Extension Schema. | ||
101. CAL Inline XBRL Taxonomy Extension Calculation Linkbase. | ||
101. DEF Inline XBRL Taxonomy Extension Definition Linkbase. | ||
101. LAB Inline XBRL Taxonomy Extension Label Linkbase. | ||
101. PRE Inline XBRL Taxonomy Extension Presentation Linkbase. | ||
(104) | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.
SKYDANCE CORPORATION (Registrant) | |
Date: November 9, 2026 | /s/ Dennis Cinelli |
Dennis Cinelli Chief Financial Officer | |
Date: November 9, 2026 | /s/ Katherine Gill-Charest |
Katherine Gill-Charest Executive Vice President, Controller and Chief Accounting Officer |