Paramount Skydance Corp (PSKY)

CIK: 0002041610. SIC: 4833 Television Broadcasting Stations. Latest 10-K as of: 2026-02-25.

SIC breadcrumb: Transportation, Communications, Electric, Gas, And Sanitary Services > Communications > SIC 4833 Television Broadcasting Stations

SEC company page: https://www.sec.gov/edgar/browse/?CIK=2041610. Latest filing source: 0002041610-26-000011.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-25. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0002041610.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

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Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-25. Report date: 2025-12-31.

Item 7.

Management’s Discussion and Analysis of Results of Operations and Financial Condition.

(Tabular dollars in millions, except per share amounts)

Management’s discussion and analysis of the results of operations and financial condition of Paramount Skydance Corporation should be read in conjunction with our consolidated financial statements and related notes. References to “Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Skydance Corporation and its consolidated subsidiaries, unless the context otherwise requires.

The NAI Transaction—On August 7, 2025 (the “Closing Date”), pursuant to a purchase and sale agreement dated July 7, 2024, certain affiliates of investors in Skydance Media, LLC (“Skydance”), comprised of entities controlled by the Ellison Family (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”).

The Transactions—Also on the Closing Date, following the completion of the NAI Transaction and pursuant to the Transaction Agreement dated as of July 7, 2024, Paramount Global and Skydance became wholly-owned subsidiaries of Paramount Skydance Corporation (the transactions contemplated by the Transaction Agreement, the “Transactions”). Paramount Skydance Corporation, formerly known as New Pluto Global, Inc., was formed on June 3, 2024, to consummate the Transactions and was a wholly-owned direct subsidiary of Paramount Global until, through a series of mergers, it became the holding company of Paramount Global and Skydance as part of the Transactions.

Concurrent with the NAI Transaction, the NAI Equity Investors and certain other affiliates of investors in Skydance made an investment of $6.0 billion into Paramount Skydance Corporation (the “PIPE Transaction”) in exchange for 400 million newly issued shares of Class B common stock of Paramount Skydance Corporation (“Paramount Skydance Corporation Class B Common Stock”) for a purchase price of $15.00 per share, and the NAI Equity Investors also received warrants to purchase 200 million shares of Paramount Skydance Corporation Class B Common Stock at an initial exercise price of $30.50 per share (subject to customary anti-dilution adjustments), which expire five years after issuance. $4.45 billion of the PIPE Transaction investment was used to fund the cash-stock election discussed below and $1.52 billion of cash was provided to the Company.

The Transactions also included: (1) a transaction pursuant to which each outstanding Skydance membership unit held by Skydance investors and each Skydance Phantom Unit was converted into the right to receive the applicable portion of 316.7 million shares of Paramount Skydance Corporation Class B Common Stock (313.8 million shares after reduction in connection with certain tax withholding requirements), and (2) a cash-stock election offered to holders of Paramount Global common stock pursuant to which (a) shares of Paramount Global Class A Common Stock held by stockholders other than NAI or its subsidiaries were converted, at the stockholders’ election, into the right to receive either $23.00 in cash (“Class A Cash Consideration”) or 1.5333 shares of Paramount Skydance Corporation Class B Common Stock (“Class A Stock Consideration”), and (b) shares of Paramount Global Class B Common Stock held by stockholders other than NAI or its subsidiaries, the NAI Equity Investors and certain other affiliates of investors in Skydance referred to above were converted, at the stockholders’ election, into the right to receive either $15.00 in cash (“Class B Cash Consideration”), subject to proration, or one share of Paramount Skydance Corporation Class B Common Stock (“Class B Stock Consideration”). The shares of Paramount Class A Common Stock held by NAI and its subsidiaries converted into shares of Class A common stock, par value $0.001 per share. Shares of Paramount Global Class A Common Stock for which elections to receive Class A Cash Consideration or Class A Stock Consideration were not made or were validly revoked were automatically converted into Class A Stock Consideration. Shares of Paramount Global Class B Common Stock for which elections to receive Class B Cash Consideration were not made or were validly revoked were converted automatically into one share of Paramount Skydance Corporation Class B Common Stock.

II-3

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Shares of Paramount Skydance Corporation Class B Common Stock now trade on the Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbol “PSKY.” All shares of Paramount Global Class A Common Stock and Class B Common Stock have been delisted from Nasdaq and have been cancelled and cease to exist.

Holders of shares of Class A common stock of Paramount Skydance Corporation (“Paramount Skydance Corporation Class A Common Stock”) are entitled to one vote per share with respect to all matters on which the holders of Paramount Skydance Corporation common stock are entitled to vote. Holders of Paramount Skydance Corporation Class B Common Stock do not have voting rights. Following the closing of the Transactions and the NAI Transaction, NAI, which was renamed Harbor Lights Entertainment, Inc., and its subsidiaries held 100.0% of the Paramount Skydance Corporation Class A Common Stock. Accordingly, entities controlled by the Ellison Family (as defined below) indirectly hold approximately 77.5% of the Paramount Skydance Corporation Class A Common Stock through their collective approximate 77.5% ownership interest in Harbor Lights Entertainment, Inc., and as a result the Ellison Family is the controlling stockholder of Paramount. For the purpose of determining the controlling ownership of Paramount, the Ellison family is comprised of Lawrence Ellison and David Ellison (the “Ellison Family”). David Ellison is the son of Lawrence Ellison, and Lawrence Ellison and David Ellison are accordingly considered immediate family members. The Ellison Family either individually or through ownership of various entities are collectively the ultimate parent of Paramount (“Ultimate Parent”).

Pushdown of Ultimate Parent’s Basis— At the time Paramount Global and Skydance became subsidiaries of Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance, and as a result, this transaction has been accounted for as a transaction between entities under common control. As a transaction between entities under common control, the net assets were combined at the Ultimate Parent’s basis, which for Paramount Global was deemed to be the estimated fair value as of August 7, 2025, the date of the closing of the NAI Transaction, which was the point at which the Ellison Family obtained control of Paramount Global. As a result, the net assets of Paramount Global were recorded at their fair value as of this date. Since the net assets of Skydance were already at the Ultimate Parent’s basis, no adjustment to the fair value of net assets was necessary, and Skydance was combined with Paramount Global’s net assets at the Ultimate Parent’s basis as of this date.

Our consolidated financial statements and footnote disclosures are presented in distinct periods to indicate the pushdown of the Ultimate Parent’s basis, which resulted in a new basis of accounting. The periods prior to the closing of the Transactions include only Paramount Global and are identified as “Predecessor,” and the periods beginning on August 7, 2025 reflect Paramount Skydance Corporation and are identified as “Successor.” Due to the application of pushdown accounting, the results of operations, financial position and cash flows are not comparable between the Successor and Predecessor periods. Paramount Global has been identified as the predecessor entity to Paramount Skydance Corporation based on the relative size and fair value of Paramount Global and Skydance, and the fact that Paramount Global was an existing publicly traded company prior to the completion of the Transactions. No single factor was the sole determinant in the overall conclusion that Paramount Global is the predecessor; rather all factors were considered in arriving at such conclusion.

We have certain contracts that require us to obtain consents from other parties in connection with the 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 following the Transactions. Accordingly, the failure to obtain such consents could have a material adverse effect on our business, financial condition and results of operations.

II-4

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Warner Bros. Offer—On December 8, 2025, we announced a cash tender offer for all of the outstanding shares of Series A Common Stock, par value $0.01 per share (the “Warner Bros. Shares”), of Warner Bros. Discovery, Inc., a Delaware corporation (“Warner Bros.”), at $30.00 per Warner Bros. Share (the “Offer”).

The Offer is subject to several conditions and is scheduled to expire on March 2, 2026, unless further extended. On December 22, 2025, we amended the Offer to include an irrevocable personal guarantee from Lawrence Ellison of the equity financing for the Offer and any damages payable by us. On February 10, 2026, we further amended the Offer to provide for a $0.25 per Warner Bros. Share in cash ticking fee for every quarter the transaction does not close beyond December 31, 2026, and a prepayment of the $2.8 billion termination fee payable by Warner Bros. to Netflix, Inc., a Delaware corporation (“Netflix”), upon termination of the merger agreement between Warner Bros. and Netflix. On January 22, 2026, we filed preliminary proxy materials with the U.S. Securities and Exchange Commission (“SEC”) to solicit Warner Bros. stockholders to vote against the Netflix transaction and related proposals at the special meeting of Warner Bros. stockholders, and on February 17, 2026, we filed definitive proxy materials related thereto.

On February 24, 2026, we submitted a revised proposal to the Warner Bros. Board that included an increased purchase price of $31.00 per Warner Bros. Share, accelerated the timing of the daily ticking fee of $0.25 per Warner Bros. Share per quarter to commence after September 30, 2026, and increased the regulatory termination fee payable by us to $7.0 billion if the transaction does not close due to regulatory matters. On the same date, the Warner Bros. Board determined that our revised proposal could reasonably be expected to lead to a “Company Superior Proposal” as defined in the Netflix merger agreement, although no final determination has been made as to whether our proposal is superior to the Netflix merger.

We have secured commitments for debt financing of up to $57.5 billion and equity commitments from entities controlled by the Ellison Family and affiliates of RedBird Capital Partners of $46.6 billion.

II-5

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Significant components of management’s discussion and analysis of results of operations and financial condition include:

•Overview—Summary of our business and operational highlights.

•Consolidated Results of Operations—Analysis of our results on a consolidated basis for the period from August 7 - December 31, 2025 (Successor) and for the period from January 1 - August 6, 2025, and the year ended December 31, 2024 (Predecessor).

•Segment Results of Operations—Analysis of our results on a reportable segment basis for the period from August 7 - December 31, 2025 (Successor) and for the period from January 1 - August 6, 2025, and the year ended December 31, 2024 (Predecessor).

•Liquidity and Capital Resources—Discussion of our cash flows, including sources and uses of cash, for the period from August 7 - December 31, 2025 (Successor) and for the period from January 1 - August 6, 2025, and the year ended December 31, 2024 (Predecessor), and of our outstanding debt as of December 31, 2025 (Successor), including Supplemental Guarantor Financial Information.

•Critical Accounting Estimates—Detail with respect to accounting policies that are considered by management to require significant judgment and use of estimates and that could have a material impact on our financial statements.

•Legal Matters—Discussion of legal matters to which we are involved.

•Market Risk—Discussion of how we manage exposure to market and interest rate risks.

An analysis of the results of our Predecessor, Paramount Global, for the year ended December 31, 2023, including comparisons of 2024 to 2023 and a discussion of our cash flows for the year ended December 31, 2023, is included in “Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations” of Paramount Global’s Annual Report on Form 10-K for the year ended December 31, 2024.

II-6

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Overview

Operational Highlights - Years Ended December 31, 2025 and 2024

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

Consolidated Results of Operations

2025

2025

2024

GAAP:

Revenues

$

12,269 

$

16,622 

$

29,213 

Operating income (loss)

$

(95)

$

1,029 

$

(5,269)

Net loss from continuing operations

   attributable to Parent

$

(586)

$

(35)

$

(6,204)

Diluted EPS from continuing operations

$

(.53)

$

(.05)

$

(9.36)

Non-GAAP: (a)

Adjusted OIBDA

$

1,267 

$

1,809 

$

3,118 

Adjusted net earnings from continuing operations

attributable to Parent

$

9 

$

348 

$

1,041 

Adjusted diluted EPS from continuing operations

$

.01 

$

.51 

$

1.54 

(a) See “Reconciliation of Non-GAAP Measures” for reconciliations of these non-GAAP measures to the most directly comparable financial measures in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”). These non-GAAP measures exclude certain items identified as affecting comparability that are not part of our normal operations.

Revenues during the Successor period include Skydance revenues. Revenues during the Predecessor period in 2024 benefited from advertising revenues associated with the broadcast of Super Bowl LVIII on CBS and Paramount+ in the first quarter of 2024 and political revenues associated with the 2024 U.S. Presidential election. We have the rights to broadcast the Super Bowl on a rotational basis with other networks, and therefore did not have a comparable broadcast in 2025.

As a result of the pushdown of the Ultimate Parent’s basis, operating income, net loss from continuing operations attributable to Parent, and diluted EPS in the Successor period include amortization associated with the establishment of intangible assets and also reflect the net decrease in programming assets. Net loss from continuing operations and diluted EPS also include interest expense associated with the adjustment of our debt to its fair value. In addition, the Successor period includes the results of Skydance. In the 2024 Predecessor period, our results were also impacted by goodwill and FCC license impairment charges totaling $6.13 billion and programming charges of $1.12 billion. These items, as well as other items identified as affecting comparability that are not part of our normal operations have been excluded in our adjusted measures in each period. See Reconciliation of Non-GAAP Measures.

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. Growing macroeconomic uncertainty relating to the imposition of tariffs and other changes in trade policies may negatively affect our results, in particular from potential impacts on the advertising market.

II-7

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Reconciliation of Non-GAAP Measures

Adjusted operating income before depreciation and amortization (“Adjusted OIBDA”), adjusted earnings from continuing operations before income taxes, adjusted provision for income taxes, adjusted net earnings from continuing operations attributable to Parent, adjusted diluted EPS from continuing operations, and adjusted effective income tax rate, which are measures of performance not calculated in accordance with U.S. GAAP (together, the “adjusted measures”), exclude certain 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, gain on dispositions, loss from investments, and discrete tax items, each where applicable. Programming charges consist only of charges related to major strategic changes, which are further described under Programming Charges, and do not include impairment charges that occur as part of our normal operations, which are recorded within “Operating expenses” on the Consolidated Statements of Operations, and are not excluded in our adjusted measures.

We use these 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 OIBDA to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management; and because they exclude items that are not representative of our normal, recurring operations, they provide a clearer perspective on our underlying performance; and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.

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, operating income (loss), earnings (loss) from continuing operations before income taxes, (provision for) benefit from income taxes, net earnings (loss) from continuing operations attributable to Parent, diluted EPS from continuing operations, and effective income tax rate, as applicable, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies.

II-8

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

The following tables reconcile the adjusted measures to their most directly comparable financial measures in accordance with U.S. GAAP. The tax impacts on the items identified as affecting comparability in the tables below have been calculated using the tax rate applicable to each item.

Years Ended December 31, 2025 and 2024

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Operating income (loss) (GAAP)

$

(95)

$

1,029 

$

(5,269)

Depreciation and amortization

590 

204 

392 

Programming charges (a)

41 

— 

1,118 

Impairment charges (a)

— 

157 

6,130 

Restructuring charges (a)

650 

255 

554 

Transaction-related items (a)

81 

199 

62 

Other corporate matters (a)

— 

— 

131 

Gain on dispositions (a)

— 

(35)

— 

Adjusted OIBDA (Non-GAAP)

$

1,267 

$

1,809 

$

3,118 

(a) See notes on the following tables for additional information on items affecting comparability.

II-9

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Year Ended December 31, 2025

Successor

Period From August 7 - December 31, 2025

Earnings (Loss) from Continuing Operations Before Income Taxes

Benefit from (Provision for) Income Taxes

Net Earnings (Loss) from Continuing Operations Attributable to Parent

Diluted EPS from Continuing Operations

Reported (GAAP)

$

(476)

$

40 

(g)

$

(586)

$

(.53)

Items affecting comparability:

Programming charges (a)

41 

(10)

31 

.03 

Restructuring charges (b)

650 

(147)

503 

.45 

Transaction-related items (c)

81 

(18)

63 

.06 

Loss from investments

40 

(10)

30 

.03 

Discrete tax items (d)

— 

(32)

(32)

(.03)

Adjusted (Non-GAAP)

$

336 

$

(177)

(g)

$

9 

$

.01 

Predecessor

Period From January 1 - August 6, 2025

Earnings from Continuing Operations Before Income Taxes

Benefit from (Provision for) Income Taxes

Net Earnings (Loss) from Continuing Operations Attributable to Parent

Diluted EPS from Continuing Operations

Reported (GAAP)

$

504 

$

79 

(h)

$

(35)

$

(.05)

Items affecting comparability:

Impairment charges (e)

157 

(39)

118 

.17 

Restructuring charges (b)

255 

(61)

194 

.29 

Transaction-related items (c)

199 

(31)

168 

.25 

Gain on dispositions (f)

(35)

2 

(33)

(.05)

Discrete tax items (d)

— 

(64)

(64)

(.10)

Adjusted (Non-GAAP)

$

1,080 

$

(114)

(h)

$

348 

$

.51 

(a) In connection with a review of our content portfolio following the closing of the Transactions, we decided to abandon certain Skydance content, principally development projects. As a result, we recorded programming charges during the fourth quarter of 2025 associated with this abandonment.

(b) 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, Transaction-Related Items, and Other Corporate Matters.

(c) The Successor period principally reflects legal and other professional fees associated with the Warner Bros. offer and during the Predecessor period reflects banking, legal, advisory, and other professional fees relating to the Transactions, and transaction awards that became payable to eligible employees upon closing of the Transactions.

(d) The Successor period primarily reflects tax benefits realized in connection with the filing of our tax returns and the Predecessor period 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.

(e) Reflects a charge to reduce the carrying values of FCC licenses in certain markets to their estimated fair values.

(f) Principally reflects a gain associated with the disposition of a noncore business.

II-10

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

(g) The reported effective income tax rate for the period from August 7 - December 31, 2025 was 8.4%, which includes tax benefits realized in connection with the filing of our tax returns. The adjusted effective income tax rate, which is calculated as the adjusted provision for income taxes of $177 million divided by adjusted earnings from continuing operations before income taxes of $336 million, was 52.7%. The reported and adjusted tax rates reflect the timing of foreign inclusions between the Predecessor and Successor periods.

(h) 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 effective income tax rate was 10.6%, which is calculated as the adjusted provision for income taxes of $114 million divided by adjusted earnings from continuing operations before income taxes of $1.08 billion.

Year Ended December 31, 2024

Predecessor

Year Ended December 31, 2024

Earnings (Loss) from Continuing Operations Before Income Taxes

Benefit from (Provision for) Income Taxes

Net Earnings (Loss) from Continuing Operations Attributable to Parent

Diluted EPS from Continuing Operations

Reported (GAAP)

$

(6,177)

$

305 

(h)

$

(6,204)

$

(9.36)

(i)

Items affecting comparability:

Programming charges (a)

1,118 

(275)

843 

1.26 

Impairment charges (b)

6,130 

(380)

5,750 

8.62 

Restructuring charges (c)

554 

(120)

434 

.65 

Transaction-related items (d)

62 

(3)

59 

.09 

Other corporate matters (e)

131 

(32)

99 

.15 

Loss from investments (f)

17 

7 

24 

.04 

Discrete tax items (g)

— 

36 

36 

.05 

Impact of antidilution

— 

— 

— 

.04 

Adjusted (Non-GAAP)

$

1,835 

$

(462)

(h)

$

1,041 

$

1.54 

(i)

(a) Reflects programming charges associated with major changes in content strategy, which are further described under Programming Charges.

(b) Reflects a goodwill impairment charge for the Cable Networks reporting unit of $5.98 billion, as well as charges totaling $149 million to reduce the carrying values of FCC licenses to their estimated fair values and Australian broadcast licenses to their estimated fair values.

(c) Consists of severance costs associated with strategic changes in our global workforce and the impairment of lease assets, as further described under Restructuring, Transaction-Related Items, and Other Corporate Matters.

(d) Reflects legal and advisory fees relating to the Transactions.

(e) Reflects charges of $74 million associated with the abandonment of developed technology and $57 million to increase our accrual for asbestos matters as discussed under Legal Matters—Claims Related to Former Businesses—Asbestos in Note 18 to the consolidated financial statements.

(f) Principally reflects a loss on the sale of Paramount Global’s investment in Viacom18 of $13 million.

(g) Primarily attributable to the establishment of a valuation allowance on a deferred tax asset that was not expected to be realized because of a reduction in our deferred tax liabilities caused by the goodwill impairment charge in the second quarter of 2024. This impact was partially offset by amounts realized in connection with the filing of our tax returns in certain international jurisdictions.

II-11

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

(h) The reported effective income tax rate for the year ended December 31, 2024 was 4.9% and the adjusted effective income tax rate, which is calculated as the adjusted provision for income taxes of $462 million divided by adjusted earnings from continuing operations before income taxes of $1.84 billion, was 25.2%. These adjusted measures exclude the items affecting comparability detailed above.

(i) For 2024, the weighted average number of common shares outstanding used in the calculation of reported diluted EPS from continuing operations is 664 million and in the calculation of adjusted diluted EPS from continuing operations is 667 million. The dilutive impact was excluded in the calculation of reported diluted EPS from continuing operations because it would have been antidilutive since we reported a net loss from continuing operations.

Consolidated Results of Operations - Years Ended December 31, 2025 and 2024

Revenues

Successor

Predecessor

Supplemental Pro Forma (a)

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

Year Ended December 31,

Pro Forma Increase/(Decrease)

2025

2025

2024

2025

2024

$

%

Revenues by Type:

Advertising

$

3,803 

$

5,329 

$

10,295 

$

9,132 

$

10,295 

$

(1,163)

(11)

%

Affiliate and subscription

5,429 

8,242 

13,153 

13,671 

13,153 

518 

4 

Theatrical

154 

475 

813 

629 

813 

(184)

(23)

Licensing and other

2,883 

2,576 

4,952 

5,962 

6,010 

(48)

(1)

Total Revenues

$

12,269 

$

16,622 

$

29,213 

$

29,394 

$

30,271 

$

(877)

(3)

%

(a) Supplemental Pro Forma Revenues for the year ended December 31, 2025 reflect the combination of the Successor period with the Predecessor period from January 1-August 6, 2025, and for each Predecessor period, Licensing and other and Total Revenues include pro forma adjustments to include Skydance revenues after the elimination of intercompany revenues from Paramount Global. While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the pushdown of the Ultimate Parent’s basis and are supplementally presented on a pro forma combined basis to help investors view these revenues in a manner consistent with our management. See Supplemental Pro Forma Revenues for calculations of these pro forma revenue 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 during the Successor and Predecessor periods in 2025 and 2024 were impacted by declines in the linear advertising market and in the 2025 periods also included the impact on pricing from new entrants to the digital advertising market. The year ended December 31, 2024 benefited from revenues associated with the broadcast of Super Bowl LVIII on CBS and Paramount+ in the first quarter of 2024 and political advertising revenue associated with the 2024 U.S. Presidential election. We have the rights to broadcast the Super Bowl on a rotational basis with other networks, and therefore did not have a comparable broadcast in 2025.

On a pro forma basis, the decrease in advertising revenues of 11% for the year ended December 31, 2025 includes decreases of 6% from the comparison to our broadcast of the Super Bowl in 2024 and 2% from lower political advertising.

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.

II-12

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Affiliate and subscription revenues during each of the Successor and Predecessor periods in 2025 and 2024 reflect the benefit from subscriber growth and pricing increases for Paramount+ but were negatively impacted by linear subscriber declines. At December 31, 2025, there were 78.9 million Paramount+ subscribers.

On a pro forma basis, the growth of 4% in affiliate and subscription revenues for the year ended December 31, 2025 reflects an increase of 8% from higher streaming subscription fees, driven by subscriber growth and pricing increases for Paramount+, partially offset by decreases from lower linear affiliate fees.

Theatrical

Theatrical revenues during the Successor period included revenues from the releases of The SpongeBob Movie: Search for SquarePants, Regretting You, The Running Man, and The Naked Gun. Theatrical revenues during the Predecessor period from January 1, 2025 - August 6, 2025 benefited from the second quarter 2025 release of Mission: Impossible-The Final Reckoning and the fourth quarter 2024 release of Sonic the Hedgehog 3, which also benefited 2024 revenues, along with the releases of Gladiator II, A Quiet Place: Day One, and Transformers One. On a pro forma basis, the 23% decrease reflects the mix of releases in each year.

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. Content licensing and other revenues include Skydance revenue in the Successor period.

Operating Expenses

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Operating expenses by Type:

Content costs

$

6,492 

$

8,494 

$

14,964 

Distribution and other

1,916 

2,793 

4,473 

Total Operating Expenses

$

8,408 

$

11,287 

$

19,437 

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.

II-13

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Content costs for the Successor period include costs associated with Skydance’s content, and also reflect reductions in programming assets resulting from the pushdown of the Ultimate Parent’s basis. Programming assets decreased for our Direct-to-Consumer and TV Media segments and increased for our Filmed Entertainment segment as a result of the pushdown. Content costs for the Predecessor period for 2024 include costs associated with the Super Bowl broadcast in 2024.

Distribution and Other

Distribution and other operating expenses primarily include costs relating to the distribution of our content, including marketing for 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, which increased on a pro forma basis.

Programming Charges

During the fourth quarter of 2025, in connection with a review of our content portfolio following the closing of the Transactions, we decided to abandon certain Skydance content, principally development projects. As a result, we recorded programming charges totaling $41 million associated with this abandonment.

Programming charges totaling $1.12 billion recorded during the first quarter of 2024 were the result of major changes in content strategy, which resulted in the removal of significant levels of content from our platforms, abandonment of development projects, and termination of programming agreements, particularly internationally, including locally-produced content and domestic titles that no longer aligned with a shift to a global programming strategy. The removal of this content from our platforms was a triggering event that required an assessment of whether the affected programming assets were impaired. This impairment review compared the current carrying value of each title with its fair value, which considered (1) that the titles were no longer being utilized on our platforms and there was no intention to use the titles on our platforms in the future and (2) the estimated future cash flows associated with any anticipated licensing of the titles to third parties, which was minimal. The programming charges were comprised of $909 million for the impairment of content to its estimated fair value, as well as $209 million for development cost write-offs and contract termination costs.

Selling, General and Administrative Expenses

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Selling, general and

   administrative expenses

$

2,594 

$

3,526 

$

6,658 

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 and technology. SG&A in all periods benefited from restructuring activities and other cost savings initiatives.

II-14

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Depreciation and Amortization

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Depreciation and amortization

$

590 

$

204 

$

392 

Depreciation and amortization expense reflects depreciation of fixed assets and amortization of finite-lived intangible assets. Depreciation and amortization for the Successor period includes amortization of intangible assets established in connection with the pushdown of the Ultimate Parent’s basis (See Note 2 to the consolidated financial statements). In addition, we began amortizing FCC licenses over a 30-year period during the third quarter of 2025 (see Critical Accounting Estimates).

Impairment Charges

During the 2025 Predecessor period, an impairment charge of $157 million was recorded reflecting a charge to reduce the carrying values of FCC licenses in certain markets to their estimated fair values at June 30, 2025.

During 2024, a goodwill impairment charge of $5.98 billion was recorded for the Cable Networks reporting unit. In addition, charges totaling $149 million were recorded to write down the carrying values of FCC licenses in certain markets and our Australian broadcast licenses to their estimated fair values. The goodwill impairment charge resulted from a downward adjustment to the reporting unit’s expected cash flows, primarily as a result of indicators in the linear affiliate marketplace, and the estimated total company market value indicated by the Transactions and the NAI Transaction.

Restructuring, Transaction-Related Items, and Other Corporate Matters

During the periods presented we recorded the following restructuring charges, transaction-related items, and other corporate matters.

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Severance (a)

$

650 

$

190 

$

523 

Exit costs

— 

65 

31 

Restructuring charges

650 

255 

554 

Transaction-related items

81 

199 

62 

Other corporate matters

— 

— 

131 

Restructuring, transaction-related items, and

   other corporate matters

$

731 

$

454 

$

747 

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

II-15

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Restructuring Charges

Restructuring charges for the period from August 7 - December 31, 2025 (Successor) were comprised of severance costs of $650 million, principally associated with transformation initiatives and aligning the business around our strategic priorities following the Transactions, including costs related to a plan under which severance payments are being provided to certain eligible employees who voluntarily elected to participate.

Restructuring charges for the Predecessor periods from January 1 - August 6, 2025 and the year ended December 31, 2024 included severance costs of $190 million and $523 million, respectively, primarily reflecting strategic changes in our global workforce in order to streamline the organization. The severance costs in 2024 also included expenses associated with the exit of Paramount Global’s former CEO and other management changes.

Additionally, during the Predecessor periods from January 1 - August 6, 2025 and the year ended December 31, 2024, we recorded exit costs of $65 million and $31 million, respectively, primarily for the impairment of lease assets that we ceased use of in connection with initiatives to reduce our real estate footprint and create cost synergies.

Transaction-Related Items

During the Successor period from August 7 - December 31, 2025, we recorded $81 million of transaction-related costs, principally for legal and other professional fees associated with the Warner Bros. offer. During the Predecessor period from January 1 - August 6, 2025, we recorded $199 million, principally for banking, legal, advisory, and other professional fees relating to the Transactions, and transaction awards that became payable to eligible employees upon closing. During 2024, we recorded costs for transaction-related items of $62 million associated with legal and advisory services related to the Transactions.

Other Corporate Matters

In 2024, we recorded charges for other corporate matters of $131 million, comprised of $74 million associated with the abandonment of developed technology and $57 million to increase our accrual for asbestos matters as discussed under Legal Matters—Claims Related to Former Businesses—Asbestos in Note 18 to the consolidated financial statements.

Gain on Dispositions

During the first quarter of 2025 (Predecessor), we recorded gains totaling $35 million, principally associated with the disposition of a noncore business.

Interest Expense and Income

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Interest expense

$

366 

$

516 

$

860 

Interest income

$

64 

$

83 

$

151 

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

II-16

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

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 5.17% at both December 31, 2025 (Successor) and December 31, 2024 (Predecessor).

Loss from Investments

During the fourth quarter of 2025 (Successor), we recorded a loss of $40 million to write off investments due to recent indications that these investments are no longer recoverable.

During 2024, we recorded losses totaling $17 million associated with sales of investments, including a $13 million loss on the sale of our remaining 13% interest in Viacom18.

Other Items, Net

The following table presents the components of “Other items, net.”

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Pension and postretirement benefit costs

$

(35)

$

(80)

$

(139)

Foreign exchange loss

(5)

(11)

(47)

Other

1 

(1)

4 

Other items, net

$

(39)

$

(92)

$

(182)

Provision for/Benefit from Income Taxes

The provision for/benefit from income taxes represents federal, state and local, and foreign taxes on earnings (loss) from continuing operations before income taxes and equity in loss of investee companies. For the period from August 7 - December 31, 2025 (Successor), we recorded a benefit from income taxes of $40 million and for the period from January 1 - August 6, 2025 (Predecessor), we recorded a benefit from income taxes of $79 million. Refer to Reconciliation of Non-GAAP Measures for reported and adjusted effective income tax rates and the related income tax effects of the adjustments.

II-17

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Impact from Items Affecting Comparability

Successor

Predecessor

Period From August 7 - December 31,

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

Programming charges (Note 4)

$

(41)

$

10 

$

— 

$

— 

Restructuring charges (Note 6)

$

(650)

$

147 

$

(255)

$

61 

Transaction-related items (Note 6)

$

(81)

$

18 

$

(199)

$

31 

Impairment charges

$

— 

$

— 

$

(157)

$

39 

Gain from dispositions

$

— 

$

— 

$

35 

$

(2)

Loss from investments

$

(40)

$

10 

$

— 

$

— 

Net discrete tax benefit (a)

n/a

$

32 

n/a

$

64 

n/a - not applicable

(a) On July 4, 2025, the U.S. government enacted tax legislation, which includes 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 benefit for the 2025 Predecessor period reflects this reversal, partially offset by a reserve for uncertain tax positions. For the Successor period, the net discrete tax benefit primarily reflects amounts realized in connection with the filing of our tax returns.

For the year ended December 31, 2024, we recorded a net benefit from income taxes of $305 million, reflecting an effective income tax rate of 4.9%. Included in the benefit from income taxes are the following items identified as affecting the comparability of our results, which in aggregate decreased our effective income tax rate by 20.3 percentage points.

Impact from Items Affecting Comparability

Predecessor

Year Ended December 31, 2024

Earnings (Loss) Before Income Taxes

Benefit from (Provision for) Income Taxes

Programming charges (Note 4)

$

(1,118)

$

275 

Impairment charges (Note 4)

$

(6,130)

$

380 

Restructuring charges (Note 6)

$

(554)

$

120 

Transaction-related items (Note 6)

$

(62)

$

3 

Other corporate matters (Note 6)

$

(131)

$

32 

Loss from investments

$

(17)

$

(7)

Net discrete tax provision (a)

n/a

$

(36)

n/a - not applicable

(a) The net discrete tax provision for 2024 is primarily attributable to the establishment of a valuation allowance on our interest limitation carryforward deferred tax asset that was not expected to be realized because of a reduction in our deferred tax liabilities caused by the goodwill impairment charge in the second quarter of 2024. This impact was partially offset by amounts realized in connection with the filing of our tax returns in certain international jurisdictions.

II-18

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Equity in Loss of Investee Companies, Net of Tax

The following table presents equity in loss of investee companies, net of tax for our equity-method investments.

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Equity in loss of investee companies

$

(103)

$

(169)

$

(292)

Tax (provision) benefit

(1)

(2)

1 

Equity in loss of investee companies,

   net of tax

$

(104)

$

(171)

$

(291)

Net Loss from Continuing Operations Attributable to Parent and Diluted EPS from Continuing Operations

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Net loss from continuing

   operations attributable to Parent

$

(586)

$

(35)

$

(6,204)

Diluted EPS from continuing

   operations

$

(.53)

$

(.05)

$

(9.36)

As a result of the pushdown of the Ultimate Parent’s basis, net loss from continuing operations attributable to Parent and diluted EPS during the Successor period include amortization associated with intangible assets that were established and interest expense associated with the adjustment to fair value our debt, as well as the decrease in programming assets. Net loss from continuing operations attributable to Parent and diluted EPS during the year ended December 31, 2024 were impacted by a goodwill impairment charge during the second quarter of $5.98 billion ($5.64 billion, net of tax) and programming charges during the first quarter of $1.12 billion ($843 million, net of tax).

Net Earnings from Discontinued Operations

During 2024, as a result of working capital adjustments we recorded additional pretax gains on the 2023 sale of Simon & Schuster totaling $19 million ($14 million, net of tax).

II-19

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Supplemental Pro Forma Revenues—Consolidated

While the Successor and Predecessor periods in 2025 are distinct reporting periods, revenues were not impacted by the pushdown of the Ultimate Parent’s basis so are supplementally presented on a pro forma combined basis, with the addition of Skydance in the Predecessor period, to help investors view our 2025 revenues in a manner consistent with our management.

The table below presents the calculation of Supplemental Pro Forma Revenues on a consolidated basis.

Year Ended December 31, 2025

Year Ended December 31, 2025

Year Ended December 31, 2024

Period From August 7 - December 31

Period From January 1 - August 6

Pro forma (b)

Predecessor

Adjustments (a)

Pro forma (b)

Pro forma Increase/(Decrease)

Successor

Predecessor

Adjustments (a)

$

%

Revenues by

   Type:

Advertising

$

3,803 

$

5,329 

$

— 

$

9,132 

$

10,295 

$

— 

$

10,295 

$

(1,163)

(11)

%

Affiliate and

   subscription

5,429 

8,242 

— 

13,671 

13,153 

— 

13,153 

518 

4 

Theatrical

154 

475 

— 

629 

813 

— 

813 

(184)

(23)

Licensing and

   other

2,883 

2,576 

503 

5,962 

4,952 

1,058 

6,010 

(48)

(1)

Total

   Revenues

$

12,269 

$

16,622 

$

503 

$

29,394 

$

29,213 

$

1,058 

$

30,271 

$

(877)

(3)

%

(a)Reflects Skydance revenues after the elimination of intercompany revenues from Paramount Global during the applicable Predecessor period.

(b)Supplemental Pro Forma Revenues for the year ended December 31, 2025 reflect the combination of the Successor period with the Predecessor period from January 1-August 6, 2025, and for each Predecessor period, Licensing and other and Total Revenues include pro forma adjustments to include Skydance revenues after the elimination of intercompany revenues from Paramount Global.

II-20

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Segments

In the first quarter of 2026, we transitioned our reporting structure into three new segments: Studios, Direct-to-Consumer, and TV Media. Under this structure, our new Studios segment will reflect the combination of the historical Filmed Entertainment segment with TV Media studio operations, consolidating our content creation activities. Our Direct-to-Consumer segment remains unchanged. We will begin reporting under this new structure in our Quarterly Report on Form 10-Q for the first quarter of 2026.

Throughout 2025, the Company was comprised of the below segments.

•TV Media—In 2025, our TV Media segment consisted 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 premium and basic cable networks, including Paramount+ with Showtime, 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) domestic and international television studio operations, including CBS Studios and Paramount Television Studios, as well as 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. On October 23, 2025, we completed the sale of Telefe in Argentina and on January 12, 2026, we completed the sale of Chilevisión in Chile.

•Direct-to-Consumer—Our Direct-to-Consumer segment consists of our portfolio of domestic and international pay and free streaming services, including Paramount+, Pluto TV, and BET+.

•Filmed Entertainment—In 2025, our Filmed Entertainment segment included Paramount Pictures, Paramount Players, Paramount Animation, Nickelodeon Studio, and Miramax, and during the Successor period also included Skydance’s animation, interactive/games, and sports divisions.

The tables below set forth our financial information by these reportable segments. We present operating income excluding depreciation and amortization, stock-based compensation, programming charges, impairment charges, restructuring charges, transaction-related items, other corporate matters, and gain on dispositions, each where applicable (“Adjusted OIBDA”), as the primary measure of profit and loss for our operating segments in accordance with Financial Accounting Standards Board (“FASB”) guidance for segment reporting. Programming charges consist only of charges related to major strategic changes, which are further described under Programming Charges, and do not include impairment charges that occur as part of our normal operations, which are recorded within content costs in the tables below, where applicable, and are not excluded in Adjusted OIBDA. Stock-based compensation is excluded from our segment measure of profit and loss because it is set and approved by our Board of Directors in consultation with corporate executive management. See Reconciliation of Non-GAAP Measures for a reconciliation of total Adjusted OIBDA to Operating Income, the most directly comparable financial measure in accordance with U.S. GAAP.

II-21

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Segment Results of Operations - Years Ended December 31, 2025 and 2024

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Revenues:

TV Media

$

7,082 

$

9,977 

$

18,779 

Direct-to-Consumer

3,497 

5,087 

7,632 

Filmed Entertainment

1,736 

1,593 

2,955 

Eliminations

(46)

(35)

(153)

Total Revenues

$

12,269 

$

16,622 

$

29,213 

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Adjusted OIBDA:

TV Media

$

1,628 

$

2,067 

$

4,348 

Direct-to-Consumer

77 

153 

(497)

Filmed Entertainment

(132)

(100)

(96)

Corporate/Eliminations

(215)

(212)

(427)

Stock-based compensation (a)

(91)

(99)

(210)

Total Adjusted OIBDA

1,267 

1,809 

3,118 

Depreciation and amortization

(590)

(204)

(392)

Programming charges

(41)

— 

(1,118)

Impairment charges

— 

(157)

(6,130)

Restructuring, transaction-related items, and

   other corporate matters (a)

(731)

(454)

(747)

Gain on dispositions

— 

35 

— 

Total Operating Income (Loss)

$

(95)

$

1,029 

$

(5,269)

(a) For the Successor period from August 7 - December 31, 2025, and the Predecessor periods from January 1 - August 6, 2025 and the year ended December 31, 2024, stock-based compensation expense of $69 million, $14 million, and $35 million, respectively, is included in “Restructuring, transaction-related items, and other corporate matters.”

II-22

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

TV Media

Successor

Predecessor

Supplemental Pro Forma (a)

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025 Supplemental Pro Forma vs. 2024 Increase/(Decrease)

TV Media

2025

2025

2025

2024

$

%

Advertising

$

2,952 

$

4,180 

$

7,132 

$

8,180 

$

(1,048)

(13)

%

Affiliate and subscription

2,786 

4,302 

7,088 

7,647 

(559)

(7)

Licensing and other

1,344 

1,495 

2,839 

2,952 

(113)

(4)

Total Revenues

7,082 

9,977 

$

17,059 

18,779 

$

(1,720)

(9)

%

Content costs

3,464 

4,956 

9,199 

Advertising and marketing

247 

328 

689 

Other (b)

1,743 

2,626 

4,543 

Expenses

5,454 

7,910 

14,431 

Adjusted OIBDA

$

1,628 

$

2,067 

$

4,348 

Successor

Predecessor

Supplemental Pro Forma (a)

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025 Supplemental Pro Forma vs. 2024 Increase/(Decrease)

Advertising revenues

2025

2025

2025

2024

$

%

Domestic

$

2,526 

$

3,585 

$

6,111 

$

6,976 

$

(865)

(12)

%

International

426 

595 

1,021 

1,204 

(183)

(15)

Total

$

2,952 

$

4,180 

$

7,132 

$

8,180 

$

(1,048)

(13)

%

(a) Supplemental Pro Forma Revenues for the year ended December 31, 2025 reflect the combination of the Successor period from August 7 - December 31, 2025 and 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 pushdown of the Ultimate Parent’s basis and are supplementally presented on a combined basis to help investors view these revenues in a manner consistent with our management.

(b) 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.

II-23

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Revenues

Advertising

Advertising revenues during the Successor and Predecessor periods in 2025 and 2024 were impacted by declines in the linear advertising market. The Predecessor period in 2025 benefited from CBS’ broadcast of the Semifinals and National Championship games of the NCAA Division I Men’s Basketball Championship (“NCAA Tournament”), which we have the rights to broadcast every other year. The year ended December 31, 2024 benefited from CBS’s broadcast of Super Bowl LVIII in the first quarter of 2024, amounts recognized relating to the underreporting of revenue by an international sales partner in previous periods, and political advertising associated with the 2024 U.S. Presidential election. We have the rights to broadcast the Super Bowl on a rotational basis with other networks, and therefore did not have a comparable broadcast in 2025.

On a pro forma basis, the 13% decrease includes decreases of 7% from the comparison to our broadcast of the Super Bowl in 2024, 2% from lower political advertising and 2% from the comparison against amounts recognized in 2024 relating to the underreporting of revenue by an international sales partner in previous periods. These decreases were partially offset by an increase of 1% from the broadcast of the NCAA Tournament games discussed above. Pro forma domestic and international advertising revenues decreased 12% and 15%, respectively.

Affiliate and Subscription

Affiliate and subscription revenues during the Successor and Predecessor periods in 2025 and 2024 were impacted by declines in linear subscribers.

On a pro forma basis, affiliate and subscription revenues decreased 7%, reflecting the impact from linear subscriber declines.

Expenses

Content costs for the Successor period reflect a net reduction in programming assets resulting from the pushdown of the Ultimate Parent’s basis and for the year ended December 31, 2024 include costs associated with the 2024 Super Bowl broadcast.

Advertising and marketing, and other expenses for the Successor and Predecessor periods in 2025 reflect the impact from cost savings initiatives. The Predecessor period in 2024 also included advertising and marketing costs related to the Super Bowl broadcast.

Adjusted OIBDA

Adjusted OIBDA in each of the periods reflects the impact of declines in the linear advertising and affiliate markets and during the Successor period also reflects the pushdown of the Ultimate Parent’s basis.

II-24

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Direct-to-Consumer

Successor

Predecessor

Supplemental Pro Forma (a)

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025 Supplemental Pro Forma vs. 2024 Increase/(Decrease)

Direct-to-Consumer

2025

2025

2025

2024

$

%

Advertising

$

853 

$

1,146 

$

1,999 

$

2,114 

$

(115)

(5)

%

Subscription

2,643 

3,940 

6,583 

5,506 

1,077 

20 

Licensing (b)

1 

1 

2 

12 

(10)

(83)

Total Revenues

3,497 

5,087 

$

8,584 

7,632 

$

952 

12 

%

Content costs

1,767 

2,712 

4,415 

Advertising and marketing

656 

749 

1,341 

Other (c)

997 

1,473 

2,373 

Expenses

3,420 

4,934 

8,129 

Adjusted OIBDA

$

77 

$

153 

$

(497)

Successor

Predecessor

Supplemental Pro Forma (a)

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

Supplemental Pro Forma vs. 2024 Increase/(Decrease)

Paramount+ (Global)

2025

2025

2025

2024

$

%

Revenues

$

2,897 

$

4,166 

$

7,063 

$

5,896 

$

1,167 

20%

(a) Supplemental Pro Forma Revenues for the year ended December 31, 2025 reflects the combination of the Successor period from August 7 - December 31, 2025 and 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 pushdown of the Ultimate Parent’s basis and are supplementally presented on a combined basis to help investors view these revenues in a manner consistent with our management.

(b) Primarily reflects revenues from the sublicensing of content by BET+.

(c) 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.

(in millions)

At December 31,

Successor

Predecessor

2025

2024

Increase/(Decrease)

Paramount+ (Global)

Subscribers (a)

78.9 

76.1 

2.8 

4 

%

(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. Beginning in the fourth quarter of 2025, our subscriber count includes only paid subscriptions, and accordingly the subscriber count in each of the periods above excludes customers registered in a free trial, which totaled 1.4 million as of December 31, 2024. Subscriber counts reflect the number of subscribers as of the applicable period-end date.

II-25

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Revenues

Advertising

Advertising revenues during the 2025 periods reflect the impact on pricing from new digital advertising entrants in the marketplace and in 2024 benefited from political revenues associated with the 2024 U.S. Presidential election and the broadcast of Super Bowl LVIII in the first quarter of 2024.

On a pro forma basis, the 5% decrease in advertising revenues reflects decreases of 3% associated with lower political advertising and 2% from the comparison against revenues from Super Bowl LVIII in the first quarter of 2024.

Subscription

Subscription revenues during the Successor and Predecessor periods in 2025 and 2024 benefited from growth in subscribers and pricing for Paramount+. The 20% growth on a pro forma basis reflects these factors. Paramount+ subscribers of 78.9 million at December 31, 2025 increased 2.8 million from 76.1 million at December 31, 2024. Beginning in the fourth quarter of 2025, our reported subscriber count includes only paid subscriptions, while previously reported amounts also included customers registered in a free trial, which totaled 1.4 million as of December 31, 2024.

Expenses

Content costs for the Successor period reflect ongoing investment in original programming and a net reduction in programming assets resulting from the pushdown of the Ultimate Parent’s basis. The 2024 Predecessor period includes costs associated with our broadcast of Super Bowl LVIII in the first quarter of 2024.

Advertising and marketing expenses for each period primarily include costs to promote Paramount+ original series.

Other expenses for the Successor and Predecessor periods in 2025 include revenue sharing costs related to revenues for our streaming services, which increased on a pro forma basis.

Adjusted OIBDA

Adjusted OIBDA during the 2025 periods benefited from the pro forma revenue growth.

II-26

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Filmed Entertainment

Successor

Predecessor

Supplemental Pro Forma (a)

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

Year Ended December 31,

Pro Forma Increase/(Decrease)

Filmed Entertainment

2025

2025

2024

2025

2024

$

%

Theatrical

$

154 

$

475 

$

813 

$

629 

$

813 

$

(184)

(23)

%

Licensing and other

1,579 

1,112 

2,126 

3,194 

3,184 

10 

— 

Advertising (b)

3 

6 

16 

9 

16 

(7)

(44)

Total Revenues

1,736 

1,593 

2,955 

$

3,832 

$

4,013 

$

(181)

(5)

%

Content costs

1,287 

846 

1,496 

Advertising and marketing

299 

417 

783 

Other (c)

282 

430 

772 

Expenses

1,868 

1,693 

3,051 

Adjusted OIBDA

$

(132)

$

(100)

$

(96)

(a) Supplemental Pro Forma Revenues for the year ended December 31, 2025 reflect the combination of the Successor period and the Predecessor period from January 1 - August 6, 2025, and for each Predecessor period Licensing and other and Total Revenues include pro forma adjustments to include Skydance revenues after the elimination of intercompany revenues from Paramount Global. While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the pushdown of the Ultimate Parent’s basis and are supplementally presented on a pro forma combined basis to help investors view revenues in a manner consistent with our management. See Supplemental Pro Forma Revenues-Filmed Entertainment for calculations of these pro forma revenue amounts.

(b) Primarily reflects advertising revenues earned from the use of Filmed Entertainment content on third-party digital platforms.

(c) Other segment expenses for our Filmed Entertainment 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.

Revenues

Theatrical

Theatrical revenues during the Successor period included revenues from the releases of The SpongeBob Movie: Search for SquarePants, Regretting You, The Running Man, and The Naked Gun. Theatrical revenues during the Predecessor period from January 1, 2025 - August 6, 2025 benefited from the second quarter 2025 release of Mission: Impossible-The Final Reckoning and the fourth quarter 2024 release of Sonic the Hedgehog 3, which also benefited 2024 revenues, along with the releases of Gladiator II, A Quiet Place: Day One, and Transformers One. On a pro forma basis, the 23% decrease reflects the mix of releases in each year.

Licensing and Other

Licensing and other revenues during the Successor period include Skydance revenues.

Expenses

Content costs for the Successor period include costs associated with Skydance’s content.

Advertising and marketing costs reflect the mix of releases in each period.

Other expenses for the Successor and Predecessor periods in 2025 reflect the impact of cost savings initiatives and for the Successor period include costs associated with Skydance.

II-27

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Adjusted OIBDA

Adjusted OIBDA in each of the periods reflects the impact from recent theatrical releases.

Supplemental Pro Forma Revenues—Filmed Entertainment

While the Successor and Predecessor periods in 2025 are distinct reporting periods, revenues were not impacted by the pushdown of the Ultimate Parent’s basis so are supplementally presented on a pro forma combined basis, with the addition of Skydance in the Predecessor period, to help investors view our 2025 revenues in a manner consistent with our management.

The table below presents the calculations of Pro Forma Revenues for the Filmed Entertainment segment.

Filmed Entertainment

Year Ended December 31, 2025

Year Ended December 31, 2024

Period From August 7 - December 31

Period From January 1 - August 6

Pro forma (b)

Predecessor

Adjustments (a)

Pro forma (b)

Pro forma Increase/(Decrease)

Successor

Predecessor

Adjustments (a)

$

%

Revenues by

   Type:

Theatrical

$

154 

$

475 

$

— 

$

629 

$

813 

$

— 

$

813 

$

(184)

(23)

%

Licensing

   and other

1,579 

1,112 

503 

3,194 

2,126 

1,058 

3,184 

10 

— 

Advertising

3 

6 

— 

9 

16 

— 

16 

(7)

(44)

Total

   Revenues

$

1,736 

$

1,593 

$

503 

$

3,832 

$

2,955 

$

1,058 

$

4,013 

$

(181)

(5)

%

(a)Reflects Skydance revenues after the elimination of intercompany revenues from Paramount Global during the applicable Predecessor period.

(b)Supplemental Pro Forma Revenues for the year ended December 31, 2025 reflect the combination of the Successor period with the Predecessor period from January 1-August 6, 2025, and for each Predecessor period, Licensing and other and Total Revenues include pro forma adjustments to include Skydance revenues after the elimination of intercompany revenues from Paramount Global.

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. Certain of our cash requirements discussed above are associated with long-term contractual commitments (see Notes 10 and 18 to the consolidated financial statements).

Our investing and financing spending includes capital expenditures; acquisitions; funding of investments, including our streaming joint venture, SkyShowtime, under which we and our joint venture partner committed to support initial operations over a multiyear period; discretionary share repurchases; dividends; and principal payments on our outstanding indebtedness. Our long-term debt obligations due over the next five years were $3.34 billion as of December 31, 2025 (see Note 9 to the consolidated financial statements). 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.

II-28

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Funding for both our short-term and long-term operating, investing and financing needs will come primarily from cash flows from operating activities, cash and cash equivalents, which were $3.27 billion as of December 31, 2025, and our ability to refinance our debt. Any additional cash funding requirements are financed with short-term borrowings, including commercial paper, and long-term debt. To the extent that commercial paper is not available to us, the borrowing capacity under our $3.50 billion Credit Facility described below is sufficient to satisfy short-term borrowing needs. In addition, if necessary, we can increase our liquidity position by reducing non-committed spending.

In connection with the Transactions, $1.52 billion of cash from the PIPE Transaction was provided to the Company, which was used to pay Paramount Global’s transaction-related costs and to pay down borrowings of $720 million outstanding under Skydance’s revolving credit facility.

Our access to capital markets and the cost of any new borrowings are impacted by factors outside our control, including economic and market conditions, as well as by ratings assigned by independent rating agencies. As a result, there can be no assurance that we will be able to access capital markets on terms and conditions favorable to us.

Cash Flows

The changes in cash and cash equivalents were as follows:

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Net cash flow provided by operating activities

$

485 

$

164 

$

752 

Net cash flow (used for) provided by investing activities from:

Continuing operations

(160)

(276)

(43)

Discontinued operations

— 

— 

55 

Net cash flow (used for) provided by investing activities

(160)

(276)

12 

Net cash flow used for financing activities

(911)

(159)

(507)

Effect of exchange rate changes on cash and cash equivalents

9 

70 

(56)

Net (decrease) increase in cash and cash equivalents

$

(577)

$

(201)

$

201 

Operating Activities. Net cash flow provided by operating activities includes payments of $95 million and $111 million to fund the Company’s qualified pension plans in the 2025 Successor and Predecessor periods, respectively. Additionally, net cash flow provided by operating activities includes payments of $233 million for the period from August 7 - December 31, 2025 (Successor), $226 million for the period from January 1 - August 6, 2025 (Predecessor), and $325 million for the year ended December 31, 2024 (Predecessor), associated with restructuring, transaction-related costs and transformation initiatives, including the unification and evolution of systems and platforms, and migration to the cloud. For 2024 this amount is net of insurance recoveries received related to litigation associated with the 2019 merger of Viacom Inc. and CBS Corporation.

We are currently undergoing significant transformational activities that are expected to include up to approximately $800 million of costs to be incurred in 2026. These costs will include severance payments resulting from our restructuring actions, capital expenditures to transform our streaming platform, global enterprise systems and office facilities, and professional fees incurred in connection with these initiatives.

II-29

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Investing Activities

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Investments

$

(33)

$

(205)

$

(326)

Capital expenditures (a)

(162)

(134)

(263)

Acquisitions, net of cash acquired

(60)

— 

— 

Proceeds from dispositions (b)

95 

66 

554 

Other investing activities

— 

(3)

(8)

Net cash flow used for investing activities from continuing

operations

(160)

(276)

(43)

Net cash flow provided by investing activities from

    discontinued operations (c)

— 

— 

55 

Net cash flow (used for) provided by investing activities

$

(160)

$

(276)

$

12 

(a) Includes payments associated with the implementation of our transformation initiatives of $1 million for the 2025 Successor period, $2 million for the 2025 Predecessor period, and $22 million for 2024.

(b) 2025 Successor period primarily reflects the proceeds received from the sale of Telefe in Argentina in October 2025. 2025 Predecessor period primarily reflects proceeds received from the disposition of a noncore business. 2024 primarily reflects the gross proceeds of $508 million received from the sale of our 13% interest in Viacom18. All periods include the collection of receivables associated with the 2022 sale of a 37.5% interest in The CW.

(c) 2024 reflects additional proceeds received from working capital adjustments related to the sale of Simon & Schuster in 2023.

II-30

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Financing Activities

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Repayment of debt

$

— 

$

— 

$

(126)

Repayment of Skydance credit facility

(720)

— 

— 

Dividends paid on preferred stock

— 

— 

(29)

Dividends paid on common stock

(90)

(101)

(139)

Payment of payroll taxes in lieu of issuing shares for

stock-based compensation

(92)

(26)

(60)

Payments to noncontrolling interests

(5)

(32)

(127)

Other financing activities

(4)

— 

(26)

Net cash flow used for financing activities

$

(911)

$

(159)

$

(507)

Dividends

Common Stock Dividends

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

Successor

Predecessor

Period From August 7 - December 31,

Period From January 1 - August 6,

Year Ended December 31,

2025

2025

2024

Class A and Class B Common Stock

Dividends declared per common share

$

.10 

$

.10 

$

.20 

Total common stock dividends

$

114 

$

70 

$

138 

Mandatory Convertible Preferred Stock

During the first quarter of 2024, the final dividend on Paramount Global’s 5.75% Series A Mandatory Convertible Preferred Stock was declared, at a rate of $1.4375 per share, resulting in total dividends of $14 million, which were paid on April 1, 2024.

II-31

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Capital Structure

The following table sets forth our debt, which was recorded at its fair value on the closing date of the Transactions and the NAI Transaction on August 7, 2025.

Successor (a)

Predecessor

At

At

December 31, 2025

December 31, 2024

Senior debt

$

12,038 

$

12,868 

Junior debt

1,617 

1,633 

Obligations under finance leases

3 

— 

Total debt (b)

13,658 

14,501 

Less current portion

433 

— 

Total long-term debt, net of current portion

$

13,225 

$

14,501 

(a) 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, 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. 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.

(b) At December 31, 2025 (Successor), our senior and junior debt balances were net of unamortized fair value adjustments totaling $1.32 billion. At December 31, 2024 (Predecessor), the senior and junior debt balances included a net unamortized discount of $401 million and unamortized deferred financing costs of $74 million. The face value of our total debt at both December 31, 2025 (Successor) and December 31, 2024 (Predecessor) was $14.98 billion.

Senior Debt

At December 31, 2025 (Successor), 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.

During the fourth quarter of 2024 (Predecessor), we redeemed our $126 million of outstanding 4.75% senior notes due in 2025 at par.

Junior Debt

At December 31, 2025 (Successor), 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 6.25% junior subordinated debentures accrue interest at the stated fixed rate until February 28, 2027, on which date the rate will switch to a floating rate. Under the terms of the debentures the floating rate is based on three-month LIBOR plus 3.899%, reset quarterly, however, with the phasing out of LIBOR and the passage of the Adjustable Interest Rate (LIBOR) Act, signed into law on March 15, 2022, it is expected that the 6.25% junior subordinated debentures due 2057 will, upon switching to a floating rate, bear interest at a replacement rate based on three-month CME Term Secured Overnight Financing Rate (SOFR). These debentures can be called by us at par at any time after the expiration of the fixed-rate period.

The interest rate on the 6.375% junior subordinated debentures will reset on March 30, 2027, and every five years thereafter to a fixed rate equal to the 5-year Treasury Rate (as defined pursuant to the terms of the debentures) plus a spread of 3.999% from March 30, 2027, 4.249% from March 30, 2032 and 4.999% from March 30, 2047. These

II-32

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

debentures can be called by us at par plus a make whole premium any time before March 30, 2027, or at par on March 30, 2027 or on any interest payment date thereafter.

The subordination and extended term, as well as an interest deferral option of our junior subordinated debentures provide significant credit protection measures for senior creditors and, as a result of these features, the debentures received a 50% equity credit by Standard & Poor’s Rating Services, Fitch Ratings Inc., and Moody’s Investors Service, Inc.

Supplemental Guarantor Financial Information

Paramount Global is a 100% owned subsidiary of Paramount Skydance Corporation. Upon the closing of the Transactions, Paramount Skydance Corporation provided a full and unconditional parent guarantee of Paramount Global’s senior and junior debt. None of Paramount Skydance Corporation’s other subsidiaries are guarantors of Paramount Global’s debt.

The tables below present summarized standalone financial information for Paramount Skydance Corporation, the parent guarantor, and Paramount Global, the issuer (jointly the “Obligor Group”) on a combined basis 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

Successor

Period From August 7 - December 31,

2025

Operating loss

$

(82)

Interest expense, net

$

(306)

Intercompany interest

$

(132)

Net loss

$

(546)

Summarized Balance Sheet

Successor

At

December 31, 2025

Current assets

$

1,350 

Noncurrent assets

$

293 

Debt, current

$

432 

Current liabilities

$

664 

Long-term debt

$

13,223 

Noncurrent liabilities

$

2,222 

Notes payable to nonguarantor subsidiaries

$

975 

II-33

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Commercial Paper

At both December 31, 2025 (Successor) and December 31, 2024 (Predecessor), we had no outstanding commercial paper borrowings.

Credit Facility

On August 7, 2025, in connection with the closing of the Transactions and pursuant to the August 2024 amendment to the Credit Facility (which is further described below), Paramount Skydance Corporation entered into a joinder agreement pursuant to which it joined Paramount Global’s revolving credit facility (the “Credit Facility”). The Credit Facility provides for a $3.50 billion commitment until January 2027, at which point the commitment will be reduced to $3.44 billion through maturity in January 2028. The Credit Facility is used for general corporate purposes and to support commercial paper borrowings, if any. We may, at our option, also borrow in certain foreign currencies up to specified limits under the Credit Facility. Borrowing rates under the Credit Facility are determined at the time of each borrowing and are generally based on either the prime rate in the U.S. or an applicable benchmark rate plus a margin (based on our senior unsecured debt rating), depending on the type and tenor of the loans entered into. The benchmark rate for loans denominated in U.S. dollars is Term SOFR, and for loans denominated in euros, sterling and yen is based on EURIBOR, SONIA and TIBOR, respectively. At December 31, 2025, we had no borrowings outstanding under the Credit Facility and the availability under the Credit Facility was $3.50 billion.

The Credit Facility has one principal financial covenant which sets a maximum Consolidated Total Leverage Ratio (“Leverage Ratio”) at the end of each quarter. The maximum Leverage Ratio was 4.75x for the quarter ended December 31, 2025 and will decrease to 4.5x for the quarter ending March 31, 2026, and will remain at this level until maturity. The Leverage Ratio reflects the ratio of our Consolidated Indebtedness, net of unrestricted cash and cash equivalents at the end of a quarter, to our Consolidated EBITDA (each as defined in the credit agreement) for the trailing twelve-month period. In May 2025, Paramount Global entered into an amendment to the Credit Facility, which increased the maximum amount of unrestricted cash and cash equivalents that can be netted against Consolidated Indebtedness, in the calculation of the Leverage Ratio, from $1.50 billion to $3.0 billion and amended the definition of Consolidated EBITDA to include an additional add-back (which is capped at 15% of Consolidated EBITDA after giving effect to such add-back) for cash items associated with provisions for restructuring or other business optimization programs, litigation and environmental reserves and losses on the disposition of businesses. We met the covenant as of December 31, 2025.

The Credit Facility also includes a provision that the occurrence of a change of control will be an event of default that would give the lenders the right to accelerate any outstanding loans and terminate their commitments. In August 2024, Paramount Global entered into amendments to the Credit Facility and the $1.9 billion standby letter of credit facility (see Guarantees—Letters of Credit and Surety Bonds), which, among other things, revised the change of control provision and related definitions to reflect the ownership structure of the Company after giving effect to the Transactions and the NAI Transaction. These amendments became operative upon closing of the Transactions.

Upon the closing of the Transactions, Paramount Skydance Corporation entered into guarantee agreements providing for a full and unconditional parent guarantee of Paramount Global’s obligations with respect to any commercial paper borrowings incurred, and in accordance with the August 2024 amendment to the Credit Facility, a full and unconditional parent guarantee of Paramount Global’s obligations under the Credit Agreement went into effect.

II-34

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Other Bank Borrowings

At both December 31, 2025 (Successor) and December 31, 2024 (Predecessor), there were no outstanding bank borrowings under Miramax’s $50 million credit facility that matures in November 2027.

Guarantees

Letters of Credit and Surety Bonds

At December 31, 2025, we had outstanding letters of credit and surety bonds of $235 million that were not recorded on the Consolidated Balance Sheet, as well as 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. The amount outstanding was zero at December 31, 2025 and $1.82 billion in January 2026. Letters of credit and surety bonds are primarily used as security against non-performance in the normal course of business under contractual requirements of certain of our commitments. The standby letter of credit facility, which matures in May 2027, is subject to provisions similar to the Credit Facility, including the same principal financial covenant (see Credit Facility above).

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.

Critical Accounting Estimates

The preparation of our financial statements in conformity with generally accepted accounting principles requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, which are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. The result of these evaluations forms the basis for making judgments about the carrying values of assets and liabilities and the reported amount of revenues and expenses that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions.

We consider the following accounting policies to be the most critical as they are important to our financial condition and results of operations, and require significant judgment and estimates on the part of management in their application. The risks and uncertainties involved in applying our critical accounting policies are provided below. Unless otherwise noted, we applied our critical accounting policies and estimation methods consistently in all material respects and for all periods presented, and have discussed such policies with our Audit Committee. For a summary of our significant accounting policies, see Note 1 to the consolidated financial statements.

Pushdown of Ultimate Parent’s Basis

At the time Paramount Global and Skydance became subsidiaries of Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance, and as a result, this transaction has been accounted for as a transaction between entities under common control. As a transaction between entities under common control, the net assets were combined at the Ultimate Parent’s basis, which for Paramount Global was deemed to be the estimated fair value as of August 7, 2025, the date of the closing of the NAI Transaction, which was the point at

II-35

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

which the Ellison Family obtained control of Paramount Global. As a result, the net assets of Paramount Global were recorded at their estimated fair value as of this date. Since the net assets of Skydance were already at the Ultimate Parent’s basis, no adjustment to the fair value of net assets was necessary, and Skydance was combined with Paramount Global’s net assets at the Ultimate Parent’s basis as of this date.

The allocation of the Ultimate Parent’s basis as of August 7, 2025 to Paramount Global’s assets, liabilities and noncontrolling interests requires the use of significant judgments to determine the inputs used to calculate the estimated fair values, including long-term projections, discount rates, royalty rates, and decay rates. These fair value estimates may differ based upon the finalization of appraisals and other valuation analyses, which are expected no later than one year from the Closing Date. Refer to Note 2 to the consolidated financial statements for additional discussion of the valuation methodologies used to calculate the preliminary estimated fair values.

Revenue Recognition

Revenue is recognized when control of a good or service is transferred to a customer in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Judgments are made in determining the timing of revenue recognition for certain contracts containing bundled advertising sales or bundled content licenses. See Note 1 to the consolidated financial statements for our revenue recognition accounting policies.

Advertising Revenues—Advertising revenues are recognized when the advertising spots are aired on television or streamed or displayed on digital platforms. For advertising contracts that include a guarantee to deliver a targeted audience rating or number of impressions, the delivery of the advertising spots that achieve the guarantee represents the performance obligation to be satisfied over time and revenues are recognized based on the proportion of the audience rating or impressions delivered to the total guaranteed in the contract. To the extent the amounts billed exceed the amount of revenue recognized, such excess is deferred until the guaranteed audience ratings or impressions are delivered.

Affiliate Revenues—The performance obligation for our affiliate agreements is a license to our programming provided through the continuous delivery of live linear feeds and, for agreements with certain distributors, also includes a license to programming for video-on-demand viewing. Affiliate revenues are recognized over the term of the agreement as we satisfy our performance obligation by continuously providing our customer with the right to use our programming. For agreements that provide for a variable fee, revenues are determined each month based on an agreed upon contractual rate applied to the number of subscribers to our customer’s service. For agreements that provide for a fixed fee, revenues are recognized based on the relative fair value of the content provided over the term of the agreement. These agreements primarily include agreements with television stations affiliated with the CBS Television Network (“network affiliates”) for which fair value is determined based on the fair value of the network affiliate’s service and the value of our programming.

II-36

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Content Licensing Revenues—For licenses of exhibition rights for internally-produced programming, each individual episode or film delivered represents a separate performance obligation and revenues are recognized when the episode or film is made available to the licensee for exhibition and the license period has begun. For license agreements that include delivery of content on one or more dates for a fixed fee, consideration is allocated based on the relative value of each episode or film, which is determined based on licenses for comparable content within the marketplace.

Film and Television Production and Programming Costs

Costs incurred to produce television programs and feature films are capitalized when incurred and amortized over the projected life of each television program or feature film. The costs incurred to acquire television series and feature film programming rights, including advances, are capitalized when the license period has begun and the program is accepted and available for airing. The costs of programming rights licensed under multi-year sports programming agreements are capitalized if the rights payments are made before the related economic benefit has been received. Licensed programming rights, including rights for sports programming, are expensed over the shorter of the license period or the period in which an economic benefit is expected to be derived.

We categorize our capitalized production and programming costs based on the expected predominant monetization strategy throughout the life of the content. Our programming that is expected to be predominantly monetized through its initial distribution on third-party platforms is considered individually monetized and our programming that is expected to be predominantly monetized on our networks and streaming services or through licensing together with other programming is considered to be monetized as part of a film group. The predominant monetization strategy is determined when capitalization of production costs commences and is reassessed if there is a significant change to the expected future monetization strategy. This reassessment will include an assessment of the monetization strategy throughout the entire life of the programming.

For internally-produced television programs and feature films that are predominantly monetized on an individual basis, we use an individual-film-forecast computation method to amortize capitalized production costs and to accrue estimated liabilities for participations and residuals over the applicable title’s life cycle based upon the ratio of current period revenues to estimated remaining total gross revenues to be earned (“Ultimate Revenues”) for each title. Management’s judgment is required in estimating Ultimate Revenues and the costs to be incurred throughout the life of each television program or feature film. These estimates are used to determine the timing of amortization of capitalized production costs and expensing of participation and residual costs.

For television programming, our estimate of Ultimate Revenues includes revenues to be earned within 10 years from the delivery of the first episode, or, if still in production, five years from the delivery of the most recent episode, if later. These estimates are based on the past performance of similar television programs in a market, the performance in the initial markets and future firm commitments to license programs.

For feature films, our estimate of Ultimate Revenues includes revenues from all sources that are estimated to be earned within 10 years from the date of a film’s initial release. Prior to the release of feature films, we estimate Ultimate Revenues based on the historical performance of similar content and pre-release market research (including test market screenings), as well as factors relating to the specific film, including the expected number of theaters and markets in which the original content will be released, the genre of the original content and the past box office performance of the lead actors and actresses. For films intended for theatrical release, we believe the performance during the theatrical exhibition is the most sensitive factor affecting our estimate of Ultimate Revenues as subsequent markets have historically exhibited a high correlation to theatrical performance. Upon a film’s initial release, we update our estimate of Ultimate Revenues based on actual and expected future

II-37

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

performance. Our estimates of revenues from succeeding windows and markets are revised based on historical relationships to theatrical performance and an analysis of current market trends. We also review and revise estimates of Ultimate Revenue and participation costs as of each reporting date to reflect the most current available information.

For acquired television and film libraries, our estimate of Ultimate Revenues includes revenues to be earned within 20 years from the date of acquisition.

For programming that is predominantly monetized as part of a film group, capitalized costs are amortized based on an estimate of the timing of our usage of and benefit from such programming. Such estimates require management’s judgment and include consideration of factors such as expected revenues to be derived from the programming, the expected number of future airings, and, for licensed programming, the length of the license period. If initial airings are expected to generate higher revenues, an accelerated method of amortization is used. These estimates are periodically reviewed and updated based on information available throughout the contractual term or life of each program.

For content that is predominantly monetized on an individual basis, a television program or feature film is tested for impairment when events or circumstances indicate that its fair value may be less than its unamortized cost. If the result of the impairment test indicates that the carrying value exceeds the estimated fair value, an impairment charge will then be recorded for the amount of the difference. Content that is predominantly monetized within a film group is assessed for impairment at the film group level and would similarly be tested for impairment if circumstances indicate that the fair value of the film group is less than its unamortized costs. A change in the monetization strategy of content, whether monetized individually or as part of a film group, will result in a reassessment of the predominant monetization strategy and may trigger an assessment of the content for impairment. Any resulting impairment test will be performed either at the individual level or at the film group level where the future cash flows will be generated. In addition, unamortized costs for internally-produced or licensed programming that has been abandoned are written off.

Goodwill Impairment Tests

Our goodwill of $1.6 billion at December 31, 2025 was primarily established as a result of the NAI Transaction, which required the net assets of Paramount Global to be recorded at the Ultimate Parent’s basis on August 7, 2025. We perform a fair value-based impairment test of goodwill on an annual basis, and also between annual tests if an event occurs or if circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. Goodwill is tested for impairment at the reporting unit level, which is an operating segment, or one level below an operating segment (also known as a component). We aggregate components into a single reporting unit if they share similar economic characteristics. At December 31, 2025, we had four reporting units. The TV Media segment is comprised of two reporting units with $249 million of goodwill at December 31, 2025. The Direct-to-Consumer segment is comprised of one reporting unit, which is an aggregation of the Paramount+ and Pluto TV components, and had $1.27 billion of goodwill at December 31, 2025. The Filmed Entertainment segment is comprised of one reporting unit with $79 million of goodwill at December 31, 2025.

2025 Annual Impairment Test (Successor)

For the 2025 annual impairment test, we performed qualitative assessments for all of our reporting units with goodwill balances. For each reporting unit, we weighed the relative impact of reporting-unit-specific, industry, and macroeconomic factors, and considered changes in each since the estimated fair values of the reporting units were determined in connection with the pushdown of the Ultimate Parent's basis as of August 7, 2025. The reporting unit specific factors that were considered included updated financial forecasts, actual performance and changes to

II-38

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

the reporting units’ carrying amounts. We also considered significant industry trends and developments, as well as macroeconomic and market factors, including changes in interest rates and changes in our market capitalization.

Considering the aggregation of all relevant factors, including the proximity to the August 7, 2025 valuation, we concluded that it is not more likely than not that the fair values of our reporting units are less than their respective carrying values. Therefore, performing a quantitative impairment test for these reporting units was unnecessary.

Certain future events and circumstances, including deterioration of market conditions, increases in interest rates, and unfavorable impacts to the projections used in the valuations for our reporting units discussed above, including from changes in consumer behavior, a decrease in audience acceptance of our content and platforms, and delays or difficulties in achieving our profitability goals for our streaming services, could cause the fair values of these reporting units to fall below their respective carrying values and a noncash impairment charge would be required. Such a charge could have a material effect on the Consolidated Statement of Operations and Consolidated Balance Sheet.

2024 Impairment Tests (Predecessor)

In the second quarter of 2024, we performed an impairment test for our Cable Networks reporting unit and recorded a goodwill impairment charge of $5.98 billion, which represented the goodwill balance of the reporting unit prior to the impairment test. The estimated fair value of our Cable Networks reporting unit was based on the discounted cash flow method. The discounted cash flow method, which estimates fair value based on the present value of future cash flows, requires us to make various assumptions regarding the timing and amount of these cash flows, including growth rates, operating margins and capital expenditures for a projection period, plus the terminal value of the business at the end of the projection period. The assumptions about future cash flows were based on our internal forecasts of the applicable reporting unit, which incorporated our long-term business plans and historical trends. The terminal value was estimated using a long-term growth rate, which was based on expected trends and projections for the relevant industry. A discount rate was determined for the reporting unit based on the risks of achieving the future cash flows, including risks applicable to the industry and market as a whole, as well as the capital structure of comparable entities. For the impairment test of our Cable Networks reporting unit, we utilized a discount rate of 11% and a terminal value that was based on a long-term growth rate of (3)%.

The fair values of the remaining reporting units exceeded their respective carrying values and therefore no impairment charge was required. All of our reporting units, except for one, had fair values that exceeded their respective carrying values by less than 10%. The other reporting unit had a fair value that exceeded its carrying value by a significant amount. The estimated fair value of our CBS Entertainment reporting unit, which exceeded its carrying value by 4%, was based on both the discounted cash flow method and the traded values of comparable businesses utilizing an OIBDA multiple. The estimated fair value of our Paramount+ reporting unit, which exceeded its carrying value by 5%, was based on the traded and transaction values of comparable businesses utilizing revenue multiples. The estimated fair value of our Pluto TV reporting unit, which exceeded its carrying value by 4%, was based on the traded and transaction values of comparable businesses utilizing revenue multiples.

For the 2024 annual impairment test, we performed qualitative assessments for all of our reporting units with goodwill balances. For each reporting unit, we considered changes in the reporting-unit-specific industry, and macroeconomic factors since the second quarter quantitative impairment tests. Considering the aggregation of all relevant factors, we concluded that it is not more likely than not that the fair values of our reporting units are less than their respective carrying values. Therefore, performing a quantitative impairment test for these reporting units was unnecessary.

II-39

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

FCC Licenses—Change in Accounting Estimate

FCC licenses have historically been classified as indefinite-lived intangible assets. However, as a result of sustained declines in industry projections, including in long-term growth rate assumptions, we reassessed this classification and determined that FCC licenses would be classified as finite-lived intangible assets. Accordingly, during the third quarter of 2025, we began amortizing FCC licenses on a straight-line basis over a period of 30 years. As of December 31, 2025 (Successor), the unamortized FCC licenses balance was $2.47 billion, which was included within “Intangible assets, net” on the Consolidated Balance Sheet.

FCC Licenses—Impairment Tests (Predecessor)

During each of the Predecessor periods presented we had 14 television markets with FCC licenses book values. We performed fair value-based impairment tests at the geographic market level on an annual basis, and also between annual tests if an event occurred or if circumstances changed that indicated that it was more likely than not that the fair value of FCC licenses in a certain market or markets were below their respective carrying values. We consider each geographic market, which is comprised of all of our television stations within that geographic market, to be a single unit of accounting because the FCC licenses at this level represent their highest and best use.

Quantitative impairment tests for our FCC licenses were performed using the Greenfield Discounted Cash Flow Method (“Greenfield Method”), which estimates the fair values of the licenses by valuing a hypothetical start-up station in the relevant market by adding discounted cash flows over a five-year build-up period to a residual value. The assumptions for the build-up period included industry projections of overall market revenues; the start-up station’s operating costs and capital expenditures, which were based on both industry and internal data; and average market share. The discount rate was determined based on the industry and market-based risk of achieving the projected cash flows, and the residual value was calculated using a long-term growth rate, which was based on projected long-range inflation and industry projections.

Interim Impairment Tests

During 2025 and 2024, we performed interim quantitative impairment tests in each of the below quarters. The number of markets tested, assumptions used in the Greenfield Method, and resulting impairments were as follows:

Test Period

Markets Tested

Discount Rate

Long-Term Growth Rate

Markets Impaired

Impairment

Second Quarter 2025

6

7.50 

%

(2)

%

6

$

157 

Third Quarter 2024

14

7.50 

%

(2)

%

5

$

104 

Second Quarter 2024

8

8 

%

— 

%

2

$

15 

II-40

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Annual Impairment Test (Predecessor)

For the 2024 annual impairment test, qualitative assessments were performed for nine television markets that we estimated had an aggregate fair value of FCC licenses that significantly exceeded their respective carrying values. For each market, we weighed the relative impact of market-specific and macroeconomic factors as well as the changes in these factors and their impact on discount rates and growth rates since our last quantitative test. The market-specific factors considered included recent projections by geographic market from both independent and internal sources for revenue and operating costs, as well as average market share. Based on the qualitative assessments, we concluded that it is not more likely than not that the fair values of the FCC licenses in each of these television markets were less than their respective carrying values. Therefore, performing a quantitative impairment test on these markets was unnecessary.

We performed a quantitative impairment test for the FCC licenses in the remaining five markets. The annual impairment tests indicated that the estimated fair values of FCC licenses in each of the markets were below their respective carrying values. Accordingly, we recorded an impairment charge of $22 million during the fourth quarter of 2024 to write down the carrying values of these FCC licenses. This impairment charge was primarily the result of updated market data. The discount rate and the long-term growth rate used in the annual test were 7.5% and (2)%, respectively.

In addition, in 2024 we performed a quantitative impairment test for our Australian broadcast licenses using the Greenfield Method, which indicated that the estimated fair value of these licenses was lower than their carrying value. Accordingly, we recorded an impairment charge of $8 million to write down the carrying value of these licenses to $13 million.

Legal Matters

Estimates of liabilities related to legal issues and predecessor operations, including asbestos and environmental matters, require significant judgments by management. 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. It is difficult to predict long-term future asbestos liabilities as events and circumstances may impact the estimate. The reasonably estimable period for our long-term asbestos liability is 10 years, which we determined 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. Our estimated asbestos liability 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. Changes in circumstances in future periods could cause our actual liabilities for asbestos and/or environmental matters to be higher or lower than our current accruals. We will continue to evaluate our estimates and update our accruals as needed.

Pensions

Pension benefit obligations and net periodic pension costs are calculated using many actuarial assumptions. Two key assumptions used in accounting for pension liabilities and expenses are the discount rate and expected rate of return on plan assets. The discount rate is determined based on the yield on a portfolio of high quality bonds, constructed to provide cash flows necessary to meet our pension plans’ expected future benefit payments, as determined for the accumulated benefit obligation. The expected return on plan assets assumption is derived using the current and expected asset allocation of the pension plan assets and considering historical as well as expected returns on various classes of plan assets. A 25 basis point change in the discount rate would result in an estimated change to the accumulated benefit obligation of approximately $77 million and approximately $4 million to 2026

II-41

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

pension expense. A decrease in the expected rate of return on plan assets would increase pension expense. The estimated impact of a 25 basis point change in the expected rate of return on plan assets is a change of approximately $6 million to 2026 pension expense.

Income Taxes

We are subject to income taxes in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and evaluating our income tax positions.  When recording an interim worldwide provision for income taxes, an estimated effective tax rate for the year is applied to interim operating results.  In the event there is a significant or unusual item recognized in the quarterly operating results, the tax attributable to that item is separately calculated and recorded in the same quarter. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the financial statement carrying amounts and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which the temporary differences are expected to be reversed. We evaluate the realizability of deferred tax assets and establish a valuation allowance when it is more likely than not that all or a portion of deferred tax assets will not be realized. While valuation allowances can require significant judgment, we believe the valuation allowance of $625 million at December 31, 2025 properly reduces our deferred tax assets to the amount that is more likely than not to be realized.

A number of years may elapse before a tax return containing tax matters for which a reserve has been established is audited and finally resolved. For positions taken in a previously filed tax return or expected to be taken in a future tax return, we evaluate each position to determine whether it is more likely than not that the tax position will be sustained upon examination, based on the technical merits of the position. A tax position that meets the more-likely-than-not recognition threshold is subject to a measurement assessment to determine the amount of benefit to be recognized in the Consolidated Statement of Operations and the appropriate reserve to establish, if any. If a tax position does not meet the more-likely-than-not recognition threshold, a tax reserve is established and no benefit is recognized. We evaluate our uncertain tax positions quarterly based on many factors, including changes in tax laws and interpretations, information received from tax authorities, and other changes in facts and circumstances. Our income tax returns are routinely audited by U.S. federal and state as well as foreign tax authorities. While it is often difficult to predict the final outcome or the timing of resolution of any particular tax matter, we believe that the reserve for uncertain tax positions of $431 million at December 31, 2025 is properly recorded.

Market Risk

We are exposed to fluctuations in foreign currency exchange rates and interest rates and use derivative financial instruments to manage this exposure. In accordance with our policy, we do not use derivative instruments unless there is an underlying exposure and, therefore, we do not hold or enter into derivative financial instruments for speculative trading purposes.

Foreign Exchange Risk

We conduct business in various countries outside the U.S., resulting in exposure to movements in foreign exchange rates when translating from the foreign local currency to the U.S. dollar. In order to manage this exposure for currencies such as the British pound, the euro, the Canadian dollar and the Australian dollar, we enter into foreign currency forward contracts for periods generally up to 24 months. We designate forward contracts used to hedge committed and forecasted foreign currency transactions, including future production costs and programming obligations, as cash flow hedges. Gains or losses on the effective portion of designated cash flow hedges are initially recorded in other comprehensive income (loss) and reclassified to the statement of operations when the hedged item is recognized. We also enter into non-designated forward contracts to hedge non-U.S. dollar denominated assets, liabilities, and cash flows. The change in fair value of the non-designated contracts is included

II-42

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

in “Other items, net” on the Consolidated Statements of Operations. We manage the use of foreign exchange derivatives centrally.

During 2024, Paramount Global entered into a foreign currency option contract to mitigate the exchange rate risk of the Indian rupee-denominated sale of our interest in Viacom18. The option contract had a notional amount of 42.86 billion Indian rupees and was settled upon closing of the transaction in November 2024. Changes in the fair value of this hedge, which was a loss of $5 million for the year ended December 31, 2024, were recognized in “Other items, net” on the Consolidated Statement of Operations.

At December 31, 2025 (Successor) and December 31, 2024 (Predecessor), the notional amount of all foreign currency contracts was $3.14 billion and $2.75 billion, respectively. For 2025 (Successor), $2.74 billion related to future production costs and $407 million related to our foreign currency assets and liabilities. For 2024 (Predecessor), $2.39 billion related to future production costs and $358 million related to our foreign currency assets and liabilities.

Interest Risk

Interest rates on future long-term debt issuances are exposed to risk related to movements in long-term interest rates. Interest rate hedges may be used to modify this exposure at our discretion. There were no interest rate hedges outstanding at December 31, 2025 (Successor) or 2024 (Predecessor), but in the future we may use derivatives to manage our exposure to interest rates.

At December 31, 2025, the carrying value of our outstanding notes and debentures was $13.65 billion and the fair value was $13.2 billion. A 1% increase or decrease in interest rates would decrease or increase the fair value of our notes and debentures by approximately $742 million and $315 million, respectively.

Credit Risk

We continually monitor our positions with, and credit quality of, the financial institutions that are counterparties to our financial instruments. We are exposed to credit loss in the event of nonperformance by the counterparties to the agreements. However, we do not anticipate nonperformance by the counterparties.

Our receivables do not represent significant concentrations of credit risk at December 31, 2025 (Successor) or 2024 (Predecessor), due to the wide variety of customers, markets and geographic areas to which our products and services are sold.

Recently Adopted Accounting Pronouncements and Accounting Pronouncements Not Yet Adopted

See Note 1 to the consolidated financial statements.

Legal Matters

See Legal Matters section in Note 18 to the consolidated financial statements.