{"url_path":"/sec/psky/8-k/2026-05-13/item-15","section_key":"item-15","section_title":"Item 15 (a)(2) Financial Statement Schedule:","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-05-13","source_url":"https://www.sec.gov/Archives/edgar/data/2041610/0002041610-26-000033-index.html","accession_number":"0002041610-26-000033","cik":"0002041610","ticker":"PSKY","issuer_name":"Paramount Skydance Corp","edgar_url":"https://www.sec.gov/Archives/edgar/data/2041610/0002041610-26-000033-index.html","primary_entity_key":"0002041610","primary_entity_name":"Paramount Skydance Corp"},"word_count":35640,"has_tables":true,"body_markdown":"Item 15(a)(2) Financial Statement Schedule:\n\nII. Valuation and Qualifying Accounts\n\nF-[1](#i850deeb8c0134bae919d3c7f44b0b860_313)\n\nAll other Schedules are omitted since the required information is not present or is not present in amounts sufficient to require submission of the schedule.\n\nII-46\n\nMANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING\n\nManagement is responsible for establishing and maintaining adequate internal control over financial reporting and for the effectiveness of internal control over financial reporting, as such term is defined in Rule 13a-15(f) or Rule 15d-15(f) of the Exchange Act. Paramount Skydance Corporation and its subsidiaries’ (the “Company”) internal control over financial reporting includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of assets; (b) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.\n\nInternal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements prepared for external purposes in accordance with generally accepted accounting principles. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\nManagement conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025 based on the framework set forth in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025.\n\nThe effectiveness of our internal control over financial reporting as of December 31, 2025 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report which is included herein.\n\nPARAMOUNT SKYDANCE CORPORATION\n\nBy:/s/ David Ellison\n\nDavid Ellison\n\nChairman and Chief Executive Officer\n\nBy:/s/ Dennis Cinelli\n\nDennis Cinelli\n\nChief Financial Officer\n\nBy:/s/ Katherine Gill-Charest\n\nKatherine Gill-Charest\n\nExecutive Vice President, Controller and\n\nChief Accounting Officer\n\nII-47\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Board of Directors and Stockholders of Paramount Skydance Corporation\n\nOpinions on the Financial Statements and Internal Control over Financial Reporting\n\nWe have audited the accompanying consolidated balance sheet of Paramount Skydance Corporation and its subsidiaries (Successor) (the \"Company\") as of December 31, 2025, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for the period from August 7, 2025 to December 31, 2025, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the \"consolidated financial statements\"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).\n\nIn our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the period from August 7, 2025 to December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.\n\nBasis for Opinions\n\nThe Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.\n\nOur audit of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.\n\nII-48\n\nDefinition and Limitations of Internal Control over Financial Reporting\n\nA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.\n\nBecause of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.\n\nCritical Audit Matters\n\nThe critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.\n\nAccounting for the change in control and valuation of certain trade names and affiliate relationships\n\nAs described in Notes 1 and 2 to the consolidated financial statements, on August 7, 2025, pursuant to a purchase and sale agreement dated July 7, 2024, certain affiliates of investors in Skydance Media, LLC (“Skydance”), comprised of entities controlled by the Ellison Family, and affiliates of RedBird Capital Partners (collectively the “NAI Equity Investors”), purchased all of the outstanding equity interests of Paramount Global’s controlling stockholder, National Amusements, Inc. (“NAI”) from the shareholders of NAI (the “NAI Transaction”). Also on August 7, 2025, following the completion of the NAI Transaction and pursuant to the Transaction Agreement dated as of July 7, 2024, Paramount Global and Skydance became wholly-owned subsidiaries of Paramount Skydance Corporation (the “Transactions”). The NAI Transaction resulted in a change in control of the Company’s Predecessor, Paramount Global, that established a new accounting basis, which reflects the estimated fair value of Paramount Global as indicated by the NAI Transaction and the Transactions. As a result, the net assets of Paramount Global were recorded at their fair value as of August 7, 2025, which included $1.5 billion of trade names and $1 billion of affiliate relationship assets. The fair value of the trade names was estimated by management using the relief from royalty valuation method and the fair value of the affiliate relationships was estimated by management using the multi-period excess earnings method. Significant judgments in these valuations included long-term projections, discount rates and royalty rates. The Company’s consolidated financial statements and footnote disclosures are presented in distinct periods to indicate the pushdown of the Ultimate Parent’s basis.\n\nThe principal consideration for our determination that accounting for the change in control and valuation of certain trade names and affiliate relationships is a critical audit matter are (1) the significant judgment by management when (a) determining the accounting treatment for the change in control and pushdown of the ultimate parent’s basis to the consolidated financial statements and (b) developing the fair value estimates of certain trade names and\n\nII-49\n\naffiliate relationships as of the transaction date; (2) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating (a) management’s accounting for the change in control and pushdown of the ultimate parent’s basis, and (b) management’s significant assumptions related to long-term projections, royalty rates and discount rates; and (3) the audit effort involved the use of professionals with specialized skill and knowledge.\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the accounting for the change in control and pushdown of the ultimate parent’s basis, including controls over management’s valuation of certain trade names and affiliate relationships as of the transaction date. These procedures also included, among others, (i) evaluating the facts and circumstances considered by management in determining the appropriate accounting treatment for the change in control and pushdown of the ultimate parent’s basis as of the transaction date, (ii) testing management’s process for developing the fair value estimates of certain trade names and affiliate relationships, (iii) evaluating the appropriateness of the relief-from-royalty method and multi-period excess earnings method used by management, (iv) testing the completeness and accuracy of the underlying data used in the valuation methods, and (v) evaluating the reasonableness of the significant assumptions used by management related to long-term projections, discount rates and royalty rates. Evaluating management’s assumptions related to long-term projections involved considering (i) the current and past performance of Paramount Global; (ii) the consistency with external market and industry data; and (iii) whether the assumptions were consistent with other areas of the audit. Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief from royalty and multi-period excess earnings methods and (ii) the reasonableness of the discount rate and royalty rate assumptions.\n\nAmortization of Certain Internally-Produced Television Programming Costs\n\nAs described in Notes 1 and 4 to the consolidated financial statements, programming that is expected to be predominantly monetized through its initial distribution on third-party platforms is considered individually monetized and programming that is expected to be predominantly monetized on the Company's networks and streaming services or through licensing together with other programming, is considered to be monetized as part of a film group. The Company's amortization of internally-produced television and film programming costs with individual monetization and film group monetization was $3.0 billion for the period from August 7, 2025 to December 31, 2025, a majority of which is attributable to the amortization of certain internally-produced television programming costs. For internally-produced television programs that are predominantly monetized on an individual basis, management uses an individual-film-forecast computation method to amortize capitalized production costs 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. For internally-produced television programming that is predominantly monetized as part of a film group, capitalized costs are amortized based on management’s estimate of the timing of the Company’s usage of and benefit from such programming.\n\nThe principal consideration for our determination that performing procedures relating to amortization of certain internally-produced television programming costs is a critical audit matter is a high degree of auditor effort in performing procedures related to the amortization of certain internally-produced television programming costs monetized individually and as part of a film group.\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the amortization of certain internally-produced television programming costs. These procedures also included, among others (i) recalculating the amortization of certain internally-produced television programming costs on a sample basis and (ii) evaluating, on a test basis, whether the method used to amortize certain internally-produced television programming costs is reasonable by considering either a) information related to past performance of similar television programs in a market, the performance in the initial markets, and future firm commitments to license programs, or b) information related to estimated timing of the usage of content.\n\nII-50\n\nProcedures were also performed to test the completeness and accuracy of management's data used in the amortization of certain internally-produced television programming costs.\n\n/s/ PricewaterhouseCoopers LLP\n\nNew York, New York\n\nFebruary 25, 2026, except with respect to our opinion on the consolidated financial statements insofar as it relates to the change in composition of reportable segments discussed in Note 1, as to which the date is May 13, 2026\n\nWe have served as the Company’s or its predecessor’s auditor since 1970.\n\nII-51\n\nReport of Independent Registered Public Accounting Firm\n\nTo the Board of Directors and Stockholders of Paramount Skydance Corporation\n\nOpinions on the Financial Statements\n\nWe have audited the accompanying consolidated balance sheet of Paramount Global and its subsidiaries (Predecessor) (the “Company”) as of December 31, 2024 and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for the period from January 1, 2025 to August 6, 2025, and for each of the two years in the period ended December 31, 2024, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the \"consolidated financial statements\"). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the period from January 1, 2025 to August 6, 2025, and for each of the two years in the period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.\n\nBasis for Opinion\n\nThese consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\nWe conducted our audits of these consolidated financial statements in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.\n\nOur audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\nCritical Audit Matters\n\nThe critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\nAmortization of Certain Internally-Produced Television Programming Costs\n\nAs described in Notes 1 and 4 to the consolidated financial statements, programming that is expected to be predominantly monetized through its initial distribution on third-party platforms is considered individually monetized and programming that is expected to be predominantly monetized on the Company's networks and streaming services or through licensing together with other programming, is considered to be monetized as part of\n\nII-52\n\na film group. The Company's amortization of internally-produced television and film programming costs with individual monetization and film group monetization was $4.0 billion for the period from January 1, 2025 to August 6, 2025, a majority of which is attributable to the amortization of certain internally-produced television programming costs. For internally-produced television programs that are predominantly monetized on an individual basis, management uses an individual-film-forecast computation method to amortize capitalized production costs 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. For internally-produced television programming that is predominantly monetized as part of a film group, capitalized costs are amortized based on management’s estimate of the timing of the Company’s usage of and benefit from such programming.\n\nThe principal consideration for our determination that performing procedures relating to amortization of certain internally-produced television programming costs is a critical audit matter is a high degree of auditor effort in performing procedures related to the amortization of certain internally-produced television programming costs monetized individually and as part of a film group.\n\nAddressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others (i) recalculating the amortization of certain internally-produced television programming costs on a sample basis and (ii) evaluating, on a test basis, whether the method used to amortize certain internally-produced television programming costs is reasonable by considering either a) information related to past performance of similar television programs in a market, the performance in the initial markets, and future firm commitments to license programs, or b) information related to estimated timing of the usage of content. Procedures were also performed to test the completeness and accuracy of management's data used in the amortization of certain internally-produced television programming costs.\n\n/s/ PricewaterhouseCoopers LLP\n\nNew York, New York\n\nFebruary 25, 2026\n\nWe have served as the Company’s or its predecessor’s auditor since 1970.\n\nII-53\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF OPERATIONS\n\n(In millions, except per share amounts)\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nRevenues$12,269 $16,622 $29,213 $29,652 \n\nCosts and expenses:\n\nOperating8,408 11,287 19,437 20,017 \n\nProgramming charges41 — 1,118 2,371 \n\nSelling, general and administrative2,594 3,526 6,658 7,245 \n\nDepreciation and amortization590 204 392 418 \n\nImpairment charges— 157 6,130 83 \n\nRestructuring, transaction-related items and other corporate matters731 454 747 (31)\n\nTotal costs and expenses12,364 15,628 34,482 30,103 \n\nGain on dispositions— 35 — — \n\nOperating income (loss)(95)1,029 (5,269)(451)\n\nInterest expense(366)(516)(860)(920)\n\nInterest income64 83 151 137 \n\nGain (loss) from investments(40)— (17)168 \n\nGain on extinguishment of debt — — — 29 \n\nOther items, net(39)(92)(182)(216)\n\nEarnings (loss) from continuing operations before income taxes and equity\n    in loss of investee companies(476)504 (6,177)(1,253)\n\nBenefit from income taxes40 79 305 361 \n\nEquity in loss of investee companies, net of tax(104)(171)(291)(360)\n\nNet earnings (loss) from continuing operations(540)412 (6,163)(1,252)\n\nNet earnings from discontinued operations, net of tax— — 14 676 \n\nNet earnings (loss) (Parent and noncontrolling interests)(540)412 (6,149)(576)\n\nNet earnings attributable to noncontrolling interests(46)(447)(41)(32)\n\nNet loss attributable to Parent$(586)$(35)$(6,190)$(608)\n\nAmounts attributable to Parent:\n\nNet loss from continuing operations$(586)$(35)$(6,204)$(1,284)\n\nNet earnings from discontinued operations, net of tax— — 14 676 \n\nNet loss attributable to Parent$(586)$(35)$(6,190)$(608)\n\nBasic net loss per common share attributable to Parent:\n\nNet loss from continuing operations$(.53)$(.05)$(9.36)$(2.06)\n\nNet earnings from discontinued operations$— $— $.02 $1.04 \n\nNet loss$(.53)$(.05)$(9.34)$(1.02)\n\nDiluted net loss per common share attributable to Parent:\n\nNet loss from continuing operations$(.53)$(.05)$(9.36)$(2.06)\n\nNet earnings from discontinued operations$— $— $.02 $1.04 \n\nNet loss$(.53)$(.05)$(9.34)$(1.02)\n\nWeighted average number of common shares outstanding:\n\nBasic1,102 674 664 652 \n\nDiluted1,102 674 664 652 \n\nSee notes to consolidated financial statements.\n\nII-54\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)\n\n(In millions)\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nNet earnings (loss)\n(Parent and noncontrolling interests)$(540)$412 $(6,149)$(576)\n\nOther comprehensive income (loss), net of tax:\n\nCumulative translation adjustments41 116 (156)179 \n\nDecrease to net actuarial loss and prior service costs19 25 105 45 \n\nOther comprehensive income (loss), net of tax\n(Parent and noncontrolling interests)60 141 (51)224 \n\nOther comprehensive income from discontinued operations— — — 30 \n\nComprehensive income (loss)(480)553 (6,200)(322)\n\nLess: Comprehensive income attributable to\nnoncontrolling interests47 448 38 35 \n\nComprehensive income (loss) attributable to Parent$(527)$105 $(6,238)$(357)\n\nSee notes to consolidated financial statements.\n\nII-55\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED BALANCE SHEETS\n\n(In millions, except per share amounts)\n\nSuccessorPredecessor\n\nAtAt\n\nDecember 31, 2025December 31, 2024\n\nASSETS\n\nCurrent Assets:\n\nCash and cash equivalents$3,274 $2,661 \n\nReceivables, net6,615 6,920 \n\nProgramming and other inventory1,461 1,429 \n\nPrepaid expenses and other current assets1,970 1,532 \n\nTotal current assets13,320 12,542 \n\nProperty and equipment, net2,195 1,566 \n\nProgramming and other inventory15,028 13,924 \n\nGoodwill1,600 10,508 \n\nIntangible assets, net6,238 2,406 \n\nOperating lease assets1,126 1,012 \n\nDeferred income tax assets, net1,282 1,386 \n\nOther assets2,553 2,828 \n\nTotal Assets$43,342 $46,172 \n\nLIABILITIES AND STOCKHOLDERS’ EQUITY\n\nCurrent Liabilities:\n\nAccounts payable$906 $953 \n\nAccrued expenses2,077 2,199 \n\nParticipants’ share and royalties payable2,646 2,574 \n\nAccrued programming and production costs1,832 1,720 \n\nDeferred revenues1,355 825 \n\nDebt433 — \n\nOther current liabilities1,350 1,360 \n\nTotal current liabilities10,599 9,631 \n\nLong-term debt13,225 14,501 \n\nParticipants’ share and royalties payable1,361 1,310 \n\nPension and postretirement benefit obligations1,185 1,226 \n\nDeferred income tax liabilities, net85 34 \n\nOperating lease liabilities 1,150 1,048 \n\nProgramming obligations400 260 \n\nOther liabilities2,450 1,380 \n\nCommitments and contingencies (Note 18)\n\nParent stockholders’ equity:\n\nClass A Common Stock, par value $.001 per share; 55 shares authorized;\n\n      32 (2025) and 41 (2024) shares issued\n— — \n\nClass B Common Stock, par value $.001 per share; 5,500 (2025) and 5,000 (2024)\n\n   shares authorized; 1,076 (2025) and 1,133 (2024) shares issued\n1 1 \n\nAdditional paid-in capital13,386 33,394 \n\nTreasury stock, at cost; — (2025) and 503 (2024) shares of Class B Common Stock\n— (22,958)\n\nRetained earnings (accumulated deficit)(1,753)7,487 \n\nAccumulated other comprehensive income (loss) 59 (1,604)\n\nTotal Parent stockholders’ equity11,693 16,320 \n\nNoncontrolling interests1,194 462 \n\nTotal Equity12,887 16,782 \n\nTotal Liabilities and Equity$43,342 $46,172 \n\nSee notes to consolidated financial statements.\n\nII-56\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(In millions)\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nOperating Activities:\n\nNet earnings (loss) (Parent and noncontrolling interests)$(540)$412 $(6,149)$(576)\n\nLess: Net earnings from discontinued operations, net of tax— — 14 676 \n\nNet earnings (loss) from continuing operations(540)412 (6,163)(1,252)\n\nAdjustments to reconcile net earnings (loss) from continuing operations to net cash flow provided by\n      operating activities:\n\nProgramming charges41 — 1,118 2,371 \n\nDepreciation and amortization590 204 392 418 \n\nImpairment charges— 157 6,130 83 \n\nAmortization of content costs and participation and residuals expense6,026 8,045 13,888 14,713 \n\nDeferred tax benefit(115)(401)(630)(650)\n\nStock-based compensation160 113 245 177 \n\nGain on dispositions— (35)— — \n\n(Gain) loss from investments40 — 17 (168)\n\nGain on extinguishment of debt— — — (29)\n\nEquity in loss of investee companies, net of tax and distributions105 179 304 363 \n\nChange in assets and liabilities\n\n(Increase) decrease in receivables(340)1,296 548 523 \n\nIncrease in inventory and related program, participation, and residuals liabilities(5,955)(9,094)(15,812)(15,518)\n\nIncrease (decrease) in accounts payable and other liabilities514 (831)324 (659)\n\n(Decrease) increase in pension and postretirement benefit obligations(97)(111)23 (69)\n\nIncrease in income taxes5 121 141 267 \n\nOther, net51 109 227 (186)\n\nNet cash flow provided by operating activities from continuing operations485 164 752 384 \n\nNet cash flow provided by operating activities from discontinued operations— — — 91 \n\nNet cash flow provided by operating activities485 164 752 475 \n\nInvesting Activities:\n\nInvestments (33)(205)(326)(322)\n\nCapital expenditures(162)(134)(263)(328)\n\nAcquisitions, net of cash acquired(60)— — — \n\nProceeds from dispositions95 66 554 71 \n\nOther investing activities— (3)(8)(3)\n\nNet cash flow used for investing activities from continuing operations(160)(276)(43)(582)\n\nNet cash flow provided by investing activities from discontinued operations— — 55 1,524 \n\nNet cash flow (used for) provided by investing activities(160)(276)12 942 \n\nFinancing Activities:\n\nProceeds from issuance of debt— — — 45 \n\nRepayment of debt— — (126)(1,277)\n\nRepayment of Skydance credit facility(720)— — — \n\nDividends paid on preferred stock— — (29)(58)\n\nDividends paid on common stock(90)(101)(139)(389)\n\nPayment of payroll taxes in lieu of issuing shares for stock-based compensation(92)(26)(60)(29)\n\nPayments to noncontrolling interests(5)(32)(127)(93)\n\nOther financing activities(4)— (26)(40)\n\nNet cash flow used for financing activities(911)(159)(507)(1,841)\n\nEffect of exchange rate changes on cash and cash equivalents9 70 (56)(1)\n\nNet (decrease) increase in cash and cash equivalents(577)(201)201 (425)\n\nCash and cash equivalents at beginning of period (Note 19)3,851 2,661 2,460 2,885 \n\nCash and cash equivalents at end of period (Note 19)$3,274 $2,460 $2,661 $2,460 \n\nSee notes to consolidated financial statements.\n\nII-57\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY\n\n(In millions)\n\nPreferred Stock OutstandingClass A and B Common Stock OutstandingAdditional Paid-In CapitalTreasury\nStockRetained Earnings (Accumulated Deficit)Accumulated Other Comprehensive Income (Loss)Total Paramount Stockholders’ EquityNoncontrolling InterestsTotal Equity\n\n(Shares)(Shares)\n\nDecember 31, 2022 (Predecessor)10 $— 650 $1 $33,063 $(22,958)$14,737 $(1,807)$23,036 $570 $23,606 \n\nStock-based compensation\nactivity and other— — 3 — 147 — 19 — 166 — 166 \n\nPreferred stock dividends— — — — — — (58)— (58)— (58)\n\nCommon stock dividends— — — — — — (261)— (261)— (261)\n\nNoncontrolling interests— — — — — — — — — (81)(81)\n\nNet earnings (loss)— — — — — — (608)— (608)32 (576)\n\nOther comprehensive\nincome— — — — — — — 251 251 3 254 \n\nDecember 31, 2023 (Predecessor)10 — 653 1 33,210 (22,958)13,829 (1,556)22,526 524 23,050 \n\nStock-based compensation\nactivity— — 6 — 184 — — — 184 — 184 \n\nStock conversion(10)— 12 — — — — — — — — \n\nPreferred stock dividends— — — — — — (14)— (14)— (14)\n\nCommon stock dividends— — — — — — (138)— (138)— (138)\n\nNoncontrolling interests— — — — — — — — — (100)(100)\n\nNet earnings (loss)— — — — — — (6,190)— (6,190)41 (6,149)\n\nOther comprehensive\nloss— — — — — — — (48)(48)(3)(51)\n\nDecember 31, 2024 (Predecessor)— — 671 1 33,394 (22,958)7,487 (1,604)16,320 462 16,782 \n\nStock-based compensation\nactivity— — 3 — 85 — — — 85 — 85 \n\nCommon stock dividends— — — — — — (70)— (70)— (70)\n\nNoncontrolling interests— — — — — — — — — (37)(37)\n\nNet earnings (loss)— — — — — — (35)— (35)447 412 \n\nOther comprehensive\nincome— — — — — — — 140 140 1 141 \n\nCancellation of treasury\n\n   stock (Note 13)\n— — — — (22,958)22,958 — — — — — \n\nAugust 6, 2025 (Predecessor)— — 674 1 10,521 — 7,382 (1,464)16,440 873 17,313 \n\nAdjustments to Paramount\nGlobal’s basis (Note 2)— — — — (344)— (7,382)1,464 (6,262)278 (5,984)\n\nPIPE Transaction\n(Note 13)— — 108 — 1,517 — — — 1,517 — 1,517 \n\nAddition of Skydance— — 314 — 1,589 — (1,167)— 422 — 422 \n\nAugust 7, 2025 (Successor)— — 1,096 1 13,283 — (1,167)— 12,117 1,151 13,268 \n\nStock-based compensation\nactivity and other— — 3 — 100 — — — 100 — 100 \n\nCommon stock dividends— — — — (114)— — — (114)— (114)\n\nAcquisition (Note 13)— — 9 — 117 — — — 117 — 117 \n\nNoncontrolling interests— — — — — — — — — (4)(4)\n\nNet earnings (loss)— — — — — — (586)— (586)46 (540)\n\nOther comprehensive\nincome— — — — — — — 59 59 1 60 \n\nDecember 31, 2025 (Successor)— $— 1,108 $1 $13,386 $— $(1,753)$59 $11,693 $1,194 $12,887 \n\nSee notes to consolidated financial statements.\n\nII-58\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n(Tabular dollars in millions, except per share amounts)\n\n1) DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES\n\nDescription of Business—Paramount Skydance Corporation is a global media and entertainment company with a portfolio that includes Paramount Pictures, Paramount Television, CBS, CBS News, CBS Sports, Nickelodeon, MTV, BET, Comedy Central, Showtime, Paramount+, Pluto TV, and Skydance's animation, interactive/games, and sports divisions. During 2025, the Company was comprised of three segments: TV Media, Direct-to-Consumer, and Filmed Entertainment. In the first quarter of 2026, we transitioned our reporting structure into three new segments: Studios, Direct-to-Consumer, and TV Media and began reporting under this new structure in our Quarterly Report on Form 10-Q for the first quarter of 2026. Under the new segment structure, our Studios segment reflects the combination of the historical Filmed Entertainment segment with the historical TV Media studio operations, consolidating our content creation activities. Additionally, our premium cable channel, Paramount+ with Showtime, which was previously under the TV Media segment, is now managed under the Direct-to-Consumer segment (see Note 17).\n\nReferences to “Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Skydance Corporation and its consolidated subsidiaries, unless the context otherwise requires.\n\nThe 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”).\n\nThe 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.\n\nConcurrent 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.\n\nThe 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)\n\nII-59\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nshares 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. See Note 13.\n\nShares 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.\n\nHolders 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”).\n\nPushdown of Ultimate Parent’s Basis—At the time Paramount Global and Skydance became subsidiaries of Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance, and as a result, this transaction has been accounted for as a transaction between entities under common control. As a transaction between entities under common control, the net assets were combined at the Ultimate Parent’s basis, which for Paramount Global was deemed to be the estimated fair value as of August 7, 2025, the date of the closing of the NAI Transaction, which was the point at which the Ellison Family obtained control of Paramount Global (see Note 2). As a result, the net assets of Paramount Global were recorded at their fair 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.\n\nOur 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\n\nII-60\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nGlobal 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.\n\nWarner 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”).\n\nThe 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.\n\nOn 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.\n\nWe 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.\n\nDiscontinued Operations—Simon & Schuster, which was sold during the fourth quarter of 2023 (Predecessor), is presented as a discontinued operation in our consolidated financial statements for all periods presented (see Note 19).\n\nPrinciples of Consolidation—The consolidated financial statements include the accounts of the Predecessor or Successor for the applicable periods, and their subsidiaries in which a controlling interest is maintained and variable interest entities (“VIEs”) where we are considered the primary beneficiary, after the elimination of intercompany transactions. Controlling interest is determined by majority ownership interest and the absence of substantive third party participating rights.  Investments over which we have a significant influence, without a controlling interest, are accounted for under the equity method. For these investments, our proportionate share of net earnings or loss of the entity is recorded in “Equity in loss of investee companies, net of tax” on the Consolidated Statements of Operations. \n\nReclassifications—Certain amounts reported for prior periods have been reclassified to conform to the current year’s presentation.\n\nUse of Estimates—The preparation of our financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and\n\nII-61\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nliabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may vary from these estimates under different assumptions or conditions.\n\nBusiness Combinations—We generally account for business combinations using the acquisition method of accounting. Under the acquisition method, once control is obtained of a business, 100% of the assets, liabilities and certain contingent liabilities acquired, as well as amounts attributed to noncontrolling interests, are recorded at fair value. Any transaction costs are expensed as incurred.\n\nCash and Cash Equivalents—Cash and cash equivalents consist of cash on hand and highly liquid investments with maturities of three months or less at the date of purchase, including money market funds, U.S. Treasury bills, and bank time deposits.\n\nProgramming Inventory—We produce and acquire rights to programming to exhibit on our broadcast and cable networks, streaming services and broadcast television stations, and in theaters. We also produce programming for third parties. Costs for internally-produced and licensed programming inventory, including prepayments for such costs, are recorded within the non-current portion of “Programming and other inventory” on the Consolidated Balance Sheets. Prepayments for the rights to air sporting and other live events that are expected to be expensed over the next 12 months are classified within the current portion of “Programming and other inventory” on the Consolidated Balance Sheets.\n\nCosts incurred to produce television programs and feature films (which include direct production costs, production overhead, acquisition costs and development costs) are capitalized when incurred and amortized over the projected life of each television program or feature film. 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 and amortized over the shorter of the license period or the period in which an economic benefit is expected to be derived.\n\nIn addition, production inventory is reduced by contributions from co-production partners, as applicable, and tax incentives earned for qualified production spending in certain U.S. states and international locations. As a result, the benefit of these items will be recognized through reduced amortization over the life of the related content. Included in “Prepaid expenses and other current assets” and “Other assets” on the Consolidated Balance Sheet at December 31, 2025 (Successor) were receivables for production tax incentives of $0.9 billion and $1.2 billion, respectively.\n\nWe 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.\n\nFor 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\n\nII-62\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\naccrue 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. The estimate of Ultimate Revenues impacts the timing of amortization of capitalized production costs and expensing of participations and residual costs.\n\nFor 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.\n\nFor 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. Upon a film’s initial release, we update our estimate of Ultimate Revenues based on actual and expected future 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. For acquired television and film libraries, our estimate of Ultimate Revenues includes revenues to be earned within 20 years from the date of acquisition. Ultimate Revenue estimates are periodically reviewed and adjustments, if any, will result in changes to inventory amortization rates and estimated accruals for residuals and participations.\n\nFilm development costs that have not been set for production are expensed within three years unless they are abandoned earlier, in which case these projects are written down to their estimated fair value in the period the decision to abandon the project is determined.\n\nGame development costs are capitalized once the game reaches technological feasibility and amortized upon its release over the expected life of the game. Unamortized capitalized game development costs are reported in “Programming and other inventory” on the Consolidated Balance Sheets.\n\nFor 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. 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 and amortized over the period in which an economic benefit is expected to be derived based on the relative value of the events broadcast by us during a period in relation to the estimated total value of the events over the term of the sports programming agreement.\n\nFor 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. 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. If the carrying value of a film group or individual television program or feature film exceeds the estimated fair value, an impairment charge will then be recorded in the amount of the difference. 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\n\nII-63\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nlevel where the future cash flows will be generated, as appropriate. In addition, unamortized costs for internally-produced or licensed programming that has been abandoned are written off.\n\nTelevision and feature film programming and production costs, including inventory amortization, development costs, residuals and participations and impairment charges that occur as part of our normal operations are included within “Operating expenses” on the Consolidated Statements of Operations.\n\nIn the fourth quarter of 2025 (Successor), 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, and accordingly recorded programming charges. In 2024 and 2023 (Predecessor), we incurred programming charges as a result of major strategic changes to our content strategy. These programming charges are included within “Programming charges” on the Consolidated Statements of Operations (see Note 4).\n\nProperty and Equipment—Property and equipment is stated at cost.  Depreciation is calculated using the straight-line method over estimated useful lives as follows:\n\nBuildings and building improvements\n10 to 40 years\n\nLeasehold improvements\nShorter of lease term or useful life\n\nEquipment and other (including finance leases)\n3 to 20 years\n\nCosts associated with repairs and maintenance of property and equipment are expensed as incurred.\n\nInvestments—Investments over which we have a significant influence, without a controlling interest, are accounted for under the equity method. Equity investments for which we have no significant influence are measured at fair value where a readily determinable fair value exists. Equity investments that do not have a readily determinable fair value are measured at cost less impairment, if any, and adjusted for observable price changes. Gains and losses resulting from changes in the fair value of equity investments are recorded in “Gain (loss) from investments” on the Consolidated Statements of Operations. We monitor our investments for impairment and reduce the carrying value of the investment if we determine that an impairment charge is required based on qualitative and quantitative information. Our investments are included in “Other assets” on the Consolidated Balance Sheets.\n\nChange in Accounting Estimate—FCC licenses were historically classified as indefinite-lived intangible assets. However, as a result of sustained declines in industry projections, including in long-term growth rate assumptions, during the third quarter of 2025 we reassessed this classification and determined that FCC licenses would be classified as finite-lived intangible assets. Accordingly, 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.\n\nImpairment of Long-Lived Assets—We assess our long-lived assets, including finite-lived intangible assets, for impairment whenever there is an indication that the carrying amount of the asset group may not be recoverable.  Recoverability of these asset groups is determined by comparing the forecasted undiscounted cash flows expected to be generated by these asset groups to their net carrying value. If the carrying value is not recoverable, the amount of impairment charge, if any, is measured by the difference between the net carrying value and the estimated fair value of the assets. Intangible assets with finite lives, which as of December 31, 2025 (Successor) primarily consist of FCC licenses, trade names, affiliate relationships, and subscriber relationships are amortized using the straight-line method over their estimated useful lives, which range from 2 to 30 years.\n\nII-64\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nGoodwill —Goodwill is allocated to various reporting units, which are at or one level below our operating segments. Goodwill is not amortized but tested for impairment on an annual basis and between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. If the carrying value of the reporting unit exceeds its fair value, an impairment charge is recognized (see Note 5).\n\nGuarantees—At the inception of a guarantee, we recognize a liability for the fair value of an obligation assumed by issuing the guarantee. The related liability is subsequently reduced as utilized or extinguished and increased if there is a probable loss associated with the guarantee which exceeds the value of the recorded liability.\n\nTreasury Stock—Treasury stock is accounted for using the cost method. Retirements of treasury stock are reflected as a reduction to additional paid-in capital.\n\nFair Value Measurements—Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. The framework for measuring fair value provides a hierarchy that prioritizes the inputs to valuation techniques used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting our own assumptions about the assumptions that market participants would use in pricing the asset or liability. Certain assets and liabilities, including foreign currency hedges and deferred compensation liabilities, are measured and recorded at fair value on a recurring basis. Other assets and liabilities, including television and film production costs, lease assets, goodwill, intangible assets, and equity-method investments, are recorded at fair value only if an impairment charge is recognized. Impairment charges, if applicable, are generally determined using discounted cash flows, which is a Level 3 valuation technique.\n\nDerivative Financial Instruments—Derivative financial instruments are recorded on the Consolidated Balance Sheets as assets or liabilities and measured at fair value. For derivatives designated as hedges of the fair value of assets or liabilities, the changes in fair value of both the derivatives and the hedged items are recorded in “Other items, net” on the Consolidated Statements of Operations. For derivatives designated as cash flow hedges, the effective portion of the changes in fair value of the derivatives is recorded in “Accumulated other comprehensive income (loss)” on the Consolidated Balance Sheets and subsequently recognized in net earnings when the hedged items are recognized.\n\nPension and Postretirement Benefits—The service cost component of net benefit cost for our pension and postretirement benefits is recorded on the same line items on the Consolidated Statements of Operations as other compensation costs of the related employees. All of the other components of net benefit cost are presented separately from the service cost component and below the subtotal of operating income in “Other items, net” on the Consolidated Statements of Operations.\n\nOther Liabilities—Other liabilities consist primarily of the noncurrent portion of residual liabilities of previously disposed businesses, long-term income tax liabilities, deferred compensation and other employee benefit accruals.\n\nII-65\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nRevenues\n\nRevenue is recognized when control of a good or service is transferred to a customer. Control is considered to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good or service.\n\nAdvertising Revenues—Advertising revenues are recognized when the advertising spots are aired on television or streamed or displayed on digital platforms. Advertising spots are typically sold as part of advertising campaigns consisting of multiple commercial units. If a contract includes 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. Audience ratings and impressions are determined based on data provided by independent third-party companies. 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. For contracts that do not include impressions guarantees, the individual advertising spots are the performance obligation and consideration is allocated among the individual advertising spots based on relative standalone selling price. Advertising contracts, which are generally short-term, are billed monthly, with payments due shortly after the invoice date.\n\nAffiliate and Subscription Revenues—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”); affiliate fees received from third-party television stations for their affiliation with the CBS Television Network (“reverse compensation”); and subscription fees for our subscription streaming services. Costs incurred for advertising, marketing and other services provided to us by cable, satellite and other distributors that are in exchange for a distinct service are recorded as expenses. If a distinct service is not received, such costs are recorded as a reduction to revenues.\n\nThe 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. For affiliate revenues, payments are generally due monthly. Subscription revenues to our streaming services are recognized evenly over the subscription period.\n\nTheatrical Revenues—Theatrical revenue is earned from the theatrical distribution of our films during the exhibition period. Under these arrangements, revenues are recognized based on sales to the end customer.\n\nLicensing and Other Revenues—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\n\nII-66\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nevents; revenues from games and other interactive content; and revenues from studio rentals and production services.\n\nFor 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. Agreements to license programming are often long term, with collection terms ranging from one to five years.\n\nWhen payment is due from a customer more than one year before or after revenue is recognized, we consider the contract to contain a significant financing component and the transaction price is adjusted for the effects of the time value of money. We do not adjust the transaction price for the time value of money if payment is expected within one year of recognizing revenues.\n\nWe also license our programming to distributors of transactional video-on-demand and similar services. Under these arrangements, our performance obligation is the delivery of our content to such distributors who then license our content to the end customer. Our revenues are determined each month based on a contractual rate applied to the number of licenses to the distributors’ end customers. Similarly, revenues earned from electronic sell-through services are recognized as each program is downloaded by the end customer.\n\nRevenues associated with the licensing of our brands for consumer products, recreation, interactive games, and live events are generally determined based on contractual royalty rates applied to sales reported by the licensees. For consumer products and recreation arrangements that include minimum guaranteed consideration, revenue is recognized as sales occur by the licensee, if the sales-based consideration is expected to exceed the minimum guarantee, or ratably if it is not expected to exceed the minimum guarantee. For live events, we recognize revenue when the event is held.\n\nWe earn revenues from the distribution of content on behalf of third parties. We also have arrangements for the distribution or sale of our content by third parties. Under such arrangements, we determine whether revenues should be recognized based on the gross amount of consideration received from the customer or the net amount of revenue we retain after payment to the third party producer or distributor, based on an assessment of which party controls the good or service being transferred.\n\nRevenue Allowances—Reserves for accounts receivable reflect our expected credit losses, which are estimated based on historical experience, as well as current and expected economic conditions and industry trends. Our allowance for credit losses was $10 million and $125 million at December 31, 2025 (Successor) and December 31, 2024 (Predecessor), respectively. The reduction to the allowance resulted from the adjustment of accounts receivable to its fair value at August 7, 2025 (see Note 2). The provision for doubtful accounts charged to expense was $10 million for the Successor period from August 7 - December 31, 2025 and $6 million, $39 million and $26 million for the Predecessor period from January 1 - August 6, 2025, and the years ended December 31, 2024 and 2023, respectively.\n\nII-67\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nContract Liabilities—A contract liability is recorded when consideration is received from a customer prior to fully satisfying a performance obligation in a contract. Our contract liabilities primarily consist of cash received related to advertising arrangements for which the required audience rating or impressions have not been delivered; consumer products arrangements with minimum guarantees; and content licensing arrangements under which the content has not yet been made available to the customer. These contract liabilities will be recognized as revenues when control of the related product or service is transferred to the customer. Contract liabilities are included within “Deferred revenues” and “Other liabilities” on the Consolidated Balance Sheets.\n\nCollaborative Arrangements—Collaborative arrangements primarily consist of joint efforts with third parties to produce and distribute programming such as television series and live sporting events, including the agreement between us and Turner Broadcasting System, Inc. to telecast the NCAA Division I Men’s Basketball Championship (the “NCAA Tournament”), which runs through 2032. In connection with this agreement for the NCAA Tournament, advertisements aired on the CBS Television Network are recorded as revenues and our share of the program rights fees and other operating costs are recorded as operating expenses.\n\nWe also enter into collaborative arrangements with other studios to jointly finance and distribute film and television programming, under which each partner is responsible for distribution of the program in specific territories or distribution windows. Under these arrangements, our share of costs for co-productions are initially capitalized as programming inventory and amortized over the estimated economic life of the program. In such arrangements where we have distribution rights, all proceeds generated from such distribution are recorded as revenues and any participation profits due to third party collaborators are recorded as participation expenses. In co-production arrangements where third party collaborators have distribution rights, our net participating profits are recorded as revenues.\n\nAmounts attributable to transactions arising from collaborative arrangements between participants were not material to the consolidated financial statements for any period presented.\n\nLeases—Our leases are principally comprised of operating leases for office space, equipment, satellite transponders and studio facilities. We determine that a contract contains a lease if we obtain substantially all of the economic benefits of, and the right to direct the use of, an asset identified in the contract. For leases with terms greater than 12 months, we record a right-of-use asset and a lease liability representing the present value of future lease payments. The discount rate used to measure the lease asset and liability is determined at the beginning of the lease term using the rate implicit in the lease, if readily determinable, or our collateralized incremental borrowing rate. For those contracts that include fixed rental payments for both the use of the asset (“lease costs”) as well as for other occupancy or service costs relating to the asset (“non-lease costs”), we generally include both the lease costs and non-lease costs in the measurement of the lease asset and liability. We also own buildings and production facilities where we lease space to lessees.\n\nOur leases generally have remaining terms of up to 13 years and often contain renewal options to extend the lease for periods of generally up to 10 years. For leases that contain renewal options, we include the renewal period in the lease term if it is reasonably certain that the option will be exercised. Lease expense and income for our operating leases are recognized on a straight-line basis over the lease term, with the exception of variable lease costs, which are expensed as incurred, and leases of assets used in the production of programming, which are capitalized in programming assets and amortized over the projected useful life of the related programming.\n\nAdvertising and Marketing—Advertising and marketing costs are expensed as incurred. We incurred total advertising and marketing expenses of $1.20 billion for the period from August 7 - December 31, 2025\n\nII-68\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n(Successor) and $1.49 billion for the period from January 1 - August 6, 2025, $2.80 billion in 2024 (Predecessor) and $3.25 billion in 2023 (Predecessor).\n\nInterest—Costs associated with the refinancing or issuance of debt, as well as debt discounts or premiums, are recorded as interest over the term of the related debt.\n\nIncome Taxes—The provision for/benefit from income taxes includes federal, state, local, and foreign taxes. We recognize the tax on global intangible low-taxed income, a U.S. tax on certain income earned by our foreign subsidiaries, within the provision for income taxes as a period cost when incurred. 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. Deferred tax assets and deferred tax liabilities are classified as noncurrent on the Consolidated Balance Sheets.\n\nFor tax 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 recognize 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.  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. We recognize interest and penalty charges related to the reserve for uncertain tax positions as income tax expense.\n\nForeign Currency Translation and Transactions—Assets and liabilities of subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars at foreign exchange rates in effect at the balance sheet date, while results of operations are translated at average foreign exchange rates for the respective periods. The resulting translation gains and losses are included as a separate component of stockholders’ equity in “Accumulated other comprehensive income (loss)” on the Consolidated Balance Sheets. Argentina has been designated as a highly inflationary economy during all periods presented. Transactions denominated in currencies other than the functional currency will result in remeasurement gains and losses, which are included in “Other items, net” on the Consolidated Statements of Operations.\n\nNet Earnings (Loss) per Common Share—Basic net earnings (loss) per share (“EPS”) is based upon net earnings (loss) available to common stockholders divided by the weighted average number of common shares outstanding during the period. Net earnings (loss) available to common stockholders is calculated as net earnings (loss) from continuing operations or net earnings (loss), as applicable, adjusted to include a reduction for dividends recorded on Paramount Global’s 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”) in 2023 and 2024 prior to its automatic and mandatory conversion on April 1, 2024 into shares of Paramount Global Class B Common Stock. The final dividend on the Mandatory Convertible Preferred Stock was declared during the first quarter of 2024 and paid on April 1, 2024 (see Note 13).\n\nWeighted average shares for diluted EPS reflect the effect of the assumed exercise of stock options and warrants, and vesting of restricted stock units (“RSUs”), restricted stock, or performance share units (“PSUs”) only in the periods in which such effect would have been dilutive. In periods prior to the preferred stock conversion described above, diluted EPS also reflected the effect of the assumed conversion of preferred stock, when dilutive, which\n\nII-69\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nincluded the issuance of common shares in the weighted average number of shares and excluded the above-mentioned preferred stock dividend adjustment to net earnings (loss) available to common stockholders.\n\nThe table below presents stock options, RSUs, restricted stock, and warrants excluded from the calculations of diluted EPS. In each period all outstanding stock options, RSUs, and warrants were excluded because their inclusion would have been antidilutive because we reported a net loss.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n(in millions)2025202520242023\n\nStock options, restricted stock and RSUs68 33 28 19 \n\nWarrants200 — — — \n\nAlso excluded from the calculation of diluted EPS for the year ended December 31, 2024 (Predecessor) prior to the preferred stock conversion discussed above, was the effect of the assumed conversion of 10 million shares of Paramount Global’s Mandatory Convertible Preferred Stock into shares of common stock because the impact would have been antidilutive.\n\nBecause the impact of the assumed conversion of the Mandatory Convertible Preferred Stock would have been antidilutive, net loss from continuing operations and net loss used in our calculation of diluted EPS for each of the years ended December 31, 2024 and 2023 include a reduction for the preferred stock dividends recorded during the periods prior to the April 2024 conversion. The table below presents a reconciliation of net loss from continuing operations and net loss to the amounts used in the calculations of basic and diluted EPS.\n\nYear Ended December 31,20242023\n\nAmounts attributable to the Parent:\n\nNet loss from continuing operations$(6,204)$(1,284)\n\nPreferred stock dividends(14)(58)\n\nNet loss from continuing operations for basic and diluted\n   EPS calculation$(6,218)$(1,342)\n\nAmounts attributable to the Parent:\n\nNet loss$(6,190)$(608)\n\nPreferred stock dividends(14)(58)\n\nNet loss for basic and diluted EPS calculation$(6,204)$(666)\n\nStock-based Compensation—We measure the cost of employee services received in exchange for an award of equity instruments based on the grant date fair value of the award. The cost is recognized over the vesting period during which an employee is required to provide service in exchange for the award.\n\nRecently Adopted Accounting Pronouncements\n\nIncome Taxes\n\nIn 2025, we adopted ASU 2023-09, “Improvements to Income Tax Disclosure” on a prospective basis. This guidance impacted our annual income tax disclosures and requires enhancements to the effective tax rate reconciliation disclosure, including the presentation of both percentages and amounts, specific categories, and additional information for reconciling items meeting a quantitative threshold defined by the guidance.\n\nII-70\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nAdditionally, disclosure of income taxes paid, net of refunds received, must be disaggregated by federal, state and foreign taxes, with further disaggregation for individual jurisdictions that represent 5 percent or more of total income taxes paid, net of refunds received. See Note 15.\n\nAccounting Pronouncements Not Yet Adopted\n\nDisaggregation of Income Statement Expenses\n\nIn November 2024, the Financial Accounting Standards Board (“FASB”) issued guidance requiring disclosure in the notes to the financial statements of the disaggregation of relevant expense captions on the income statement into specified expense categories, including employee compensation, as well as disclosure of total selling expenses. The guidance is effective for us for the year ended December 31, 2027, and for all interim and annual periods thereafter, and may be applied either prospectively or retrospectively.\n\nInternal-use Software Costs\n\nIn September 2025, the FASB issued updated guidance on the recognition and disclosure of internal-use software costs. This guidance eliminates capitalization based on software development stages and requires that capitalization of internal-use software development costs begin when (1) management has authorized and committed to funding the software project and (2) it is probable the project will be completed and the software will be used to perform its intended function. The guidance is effective for us for the year ended December 31, 2028, including interim periods within that year, and may be adopted prospectively, retrospectively, or using a modified transition approach for projects in process. We are currently evaluating the impact of this guidance on our consolidated financial statements.\n\nII-71\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n2) PUSHDOWN OF ULTIMATE PARENT'S BASIS\n\nThe NAI Transaction resulted in a change in control of our Predecessor, Paramount Global, that established a new accounting basis, which reflects the estimated fair value of Paramount Global as indicated by the NAI Transaction and the Transactions. The table below presents the calculation of the Ultimate Parent's basis in Paramount Global as of the date these transactions closed.\n\nEstimated value of NAI Transaction consideration attributable to Paramount Global\n    common stock$2,124 \n(a)\n\nCash paid to stockholders (see Note 13)\n4,454 \n(b)\n\nProceeds from PIPE Transaction, net of subscription discount1,517 \n\nOutstanding Paramount Global RSU Awards and Paramount Global PSU Awards80 \n(c)\n\nRemaining shares of Paramount Skydance Corporation Class B Common Stock3,520 \n(d)\n\nParamount Global basis at August 7, 2025\n$11,695 \n\n(a) In the NAI Transaction, the NAI Equity Investors purchased all of the outstanding equity interests of NAI. Based on valuation analyses of NAI’s assets and liabilities, the estimated value attributable to the shares of Paramount Global common stock held by NAI and its subsidiaries is $2.1 billion. This amount increased $107 million from the preliminary estimate included in our quarterly report on Form 10-Q for the third quarter of 2025, which resulted in an increase in Paramount Global’s basis in this amount.\n\n(b) Reflects cash paid to holders of Paramount Global Class A Common Stock and Paramount Global Class B Common Stock who elected to receive the Class A Cash Consideration and Class B Cash Consideration of $23.00 per share and $15.00 per share, respectively, in the Transactions. Such payout was funded by the $6.0 billion PIPE Transaction.\n\n(c) Reflects the fair value of outstanding Paramount Global RSU Awards and Paramount Global PSU Awards attributable to employees’ service prior to the Transactions and the NAI Transaction. The fair value is based on the closing stock price of Paramount Global Class B Common Stock on August 6, 2025 of $11.04 per share. The remaining fair value of outstanding Paramount Global RSU Awards and Paramount PSU Awards, which were assumed by Paramount Skydance Corporation and converted into awards of restricted stock units covering an equivalent number of shares of Paramount Skydance Corporation Class B Common Stock are being expensed over their remaining vesting periods.\n\n(d) Reflects 318.8 million shares of Paramount Skydance Corporation Class B Common Stock owned by holders of Paramount Global Class A and Paramount Global Class B Common Stock following the Transactions, other than those held directly or indirectly by NAI or its affiliates, not converted into cash, valued at the closing stock price of Paramount Global Class B Common Stock on August 6, 2025 of $11.04 per share. Certain holders of Paramount Global Class A Common Stock received the Class A Stock Consideration, which resulted in the conversion of 2.0 million shares of Paramount Global Class A Common Stock into approximately 3.1 million shares of Paramount Skydance Corporation Class B Common Stock, based on the exchange ratio of one share of Paramount Global Class A Common Stock to 1.5333 shares of Paramount Skydance Corporation Class B Common Stock.\n\nII-72\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe table below details the preliminary estimated fair values of Paramount Global’s assets, liabilities and noncontrolling interests at the Ultimate Parent's basis as of August 7, 2025, including measurement period adjustments recorded during the fourth quarter of 2025. The impact on our statement of operations in the fourth quarter of 2025 from the amounts that would have been recognized in the third quarter of 2025 had these measurement period adjustments been recognized as of the acquisition date were not material. The fair values were determined based on valuation techniques that use unobservable inputs (Level 3 in the fair value hierarchy). Significant judgments in these valuations include long-term projections, discount rates, royalty rates, and decay rates. We continue to evaluate these estimated fair values, in particular those related to programming, intangible assets, and contingencies, which may differ based upon the finalization of appraisals and other valuation analyses, which are expected no later than one year from the Closing Date.\n\nAllocation of Ultimate Parent’s Basis\n\nPreliminaryMeasurement Period AdjustmentsPreliminary, Revised\n\nAssets:\n\nCash and cash equivalents$3,977 $— $3,977 \n\nReceivables, net5,980 (20)5,960 \n\nProgramming and other inventory, current (b)\n1,970 (66)1,904 \n\nPrepaid expenses and other current assets1,641 — 1,641 \n\nProperty and equipment, net (a)\n2,118 (2)2,116 \n\nProgramming and other inventory, noncurrent (b)\n13,599 (365)13,234 \n\nGoodwill (c)\n947 430 1,377 \n\nIntangible assets, net (d)\n6,748 (11)6,737 \n\nOperating lease assets875 41 916 \n\nDeferred income tax assets, net1,200 23 1,223 \n\nOther noncurrent assets2,470 42 2,512 \n\nTotal assets$41,525 $72 $41,597 \n\nLiabilities:\n\nLong-term debt (e)\n$13,619 $— $13,619 \n\nPension and postretirement benefit obligations (f)\n1,390 — 1,390 \n\nDeferred income tax liabilities, net\n306 (71)235 \n\nOperating lease liabilities1,219 — 1,219 \n\nProgramming obligations (g)\n2,017 (48)1,969 \n\nOther liabilities (h)\n10,137 182 10,319 \n\nTotal liabilities$28,688 $63 $28,751 \n\nNoncontrolling interests (i)\n1,249 (98)1,151 \n\nParamount Global basis at August 7, 2025$11,588 $107 $11,695 \n\n(a) The fair value was determined based on the market approach, which estimates the value based on transactions in the market for comparable assets, or the cost approach, which estimates the value based on the amount required to replace the asset. The fair value reflects an increase to the book value of $635 million principally reflecting incremental fair value of Paramount Global’s owned land and buildings.\n\n(b) The fair value was determined based on the income approach, including the multi-period excess earnings method, which estimates the cash flows generated by the asset over its economic life using a discounted cash flow analysis. For certain content, fair value was determined to be equivalent to net book value. The fair value reflects a net decrease to the book value of programming assets of $562 million principally from reductions for programming at our TV Media and Direct-to-Consumer segments offset by an increase to the fair value of our film and television libraries.\n\nII-73\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n(c) Goodwill relates principally to the Direct-to-Consumer segment and represents the difference between Paramount Global’s basis and the fair value of its net assets based on the preliminary fair value estimates assumed herein. Goodwill reflects operating synergies between our businesses, as well as anticipated cost savings and is not deductible for tax purposes.\n\n(d) The table below presents our intangible assets by asset class, as well as the valuation method used to determine the estimated fair values, and the related estimated weighted average useful lives. The weighted average useful life of the total intangibles below is 16.6 years.\n\nIntangible assetsValuesValuation MethodEstimated weighted average straight-line amortization period\n\nFCC and other broadcasting licenses$2,555 Greenfield discounted cash flow method\n30 years\n\nTrade names$1,514 Relief from Royalty\n17.3 years\n\nAffiliate relationships$1,004 Multi-period excess earnings\n2.6 years\n\nSubscriber relationships$1,080 Replacement cost\n2 years\n\nFranchises$326 Discounted cash flow\n10 years\n\nDeveloped technology$258 Replacement cost\n3 years\n\n(e) The fair value was determined based on quoted prices in active markets.\n\n(f) The fair value was determined based on a remeasurement of the obligation using actuarial assumptions. Key valuation inputs included discount rates and mortality assumptions.\n\n(g) “Programming Obligations” include $520 million recorded to establish liabilities for unfavorable contractual arrangements.\n\n(h) The estimated fair value of Paramount Global’s contingent liabilities as of August 7, 2025 was $1.4 billion, which relate principally to the defense and settlement of lawsuits claiming various personal injuries related to exposure to asbestos as well as claims from federal and state environmental regulatory agencies and other entities asserting liability for environmental cleanup costs and related damages (see Note 18).\n\n(i) The fair value was determined based on a discounted cash flow analysis.\n\n3) PROPERTY AND EQUIPMENT\n\nSuccessorPredecessor\n\nAt December 31,20252024\n\nLand$929 $370 \n\nBuildings504 889 \n\nEquipment and other872 3,987 \n\n2,305 5,246 \n\nLess: Accumulated depreciation110 3,680 \n\nProperty and equipment, net$2,195 $1,566 \n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nDepreciation expense$97 $189 $364 $383 \n\nII-74\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n4) PROGRAMMING AND OTHER INVENTORY\n\nThe following table presents our programming and other inventory at December 31, 2025 and 2024, grouped by type and predominant monetization strategy.\n\nSuccessorPredecessor\n\nAt December 31,20252024\n\nFilm Group Monetization:\n\nLicensed program rights, including prepaid sports rights$2,877 $3,168 \n\nProduced television and film programming:\n\nReleased9,107 6,847 \n\nIn process and other1,935 2,292 \n\nIndividual Monetization:\n\nProduced television and film programming:\n\n  Released1,005 1,823 \n\n  Completed, not yet released27 42 \n\n  In process and other 1,526 1,155 \n\nHome entertainment5 26 \n\nGame development7 — \n\nTotal programming and other inventory16,489 15,353 \n\nLess current portion1,461 1,429 \n\nTotal noncurrent programming and other inventory$15,028 $13,924 \n\nThe following table presents amortization of our television and film programming and production costs, which is included within “Operating expenses” on the Consolidated Statements of Operations.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nLicensed program rights$2,242 $2,961 $5,482 $5,331 \n\nProduced television and film\n     programming, and acquired libraries:\n\nIndividual monetization$1,100 $810 $1,608 $2,065 \n\nFilm group monetization$1,927 $3,193 $4,898 $5,097 \n\nThe following table presents the estimated expected amortization over each of the next three years of released programming inventory on the Consolidated Balance Sheet at December 31, 2025.\n\n2026\n\n2027\n\n2028\n\nLicensed program rights$2,213 $396 $156 \n\nProduced television and film programming, and acquired libraries:\n\nIndividual monetization$348 $183 $126 \n\nFilm group monetization$2,803 $1,536 $1,068 \n\nDuring the year ending December 31, 2026, we expect to amortize approximately $15 million of our completed, not yet released film inventory, which is monetized on an individual basis.\n\nII-75\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nAt December 31, 2025, acquired film and television libraries are being amortized using accelerated amortization methods that are most reflective of the earnings process from such libraries through 2045.\n\nProgramming Charges\n\nDuring 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.\n\nProgramming charges in the Predecessor periods totaling $1.12 billion in 2024 and $2.37 billion in 2023 were the result of major changes in content strategy associated with the integration of certain product offerings and a shift to a global programming strategy. These changes 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 2024 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. The 2023 programming charges were comprised of $1.97 billion for the impairment of content to its estimated fair value and $402 million for development cost write-offs and contract termination costs.\n\n5) GOODWILL AND OTHER INTANGIBLE ASSETS\n\nGoodwill\n\nWe perform fair value-based impairment tests 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.\n\n2025 Annual Impairment Test (Successor)\n\nFor 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 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.\n\nConsidering 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.\n\n2024 Impairment Tests (Predecessor)\n\nFor the second quarter of 2024, the relevant factors that could impact the fair value of Paramount Global’s reporting units were assessed, including indicators in the linear affiliate marketplace and the estimated total company market value indicated by the Transactions and the NAI Transaction announced on July 7, 2024. Based\n\nII-76\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\non this assessment, an interim goodwill impairment test was performed for each reporting unit. The goodwill impairment test for the Cable Networks reporting unit indicated that an impairment charge of $5.98 billion was required, which represented the goodwill balance of the reporting unit prior to the impairment test. The impairment charge, which was recorded within the TV Media segment, resulted from a downward adjustment to the reporting unit’s expected cash flows, primarily because of the linear affiliate market indicators noted above, and the estimated total company market value indicated by the Transactions and the NAI Transaction.\n\nThe 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)%.\n\nThe fair values of the remaining reporting units exceeded their respective carrying values and therefore no impairment charge was required.\n\nFor the 2024 and 2023 annual impairment tests, we performed qualitative assessments for all of our reporting units with goodwill balances and concluded that it was not more likely than not that the fair values of our reporting units were less than their respective carrying values.\n\nFCC Licenses\n\nFCC licenses were historically classified as indefinite-lived intangible assets, which were tested for impairment on an annual basis and between annual tests if events occurred or circumstances changed that would more likely than not reduce the fair value below carrying value. 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.\n\nInterim Impairment Tests (Predecessor)\n\nDuring each of the Predecessor periods presented, we had 14 television markets with FCC licenses book values. Quantitative impairment tests for our FCC licenses were performed using the Greenfield Discounted Cash Flow Method (“Greenfield Method”). 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, and accordingly FCC licenses were tested for impairment at the geographic market level. The Greenfield Method estimates the fair values of FCC 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 include industry projections of overall market revenues; the start-up station’s operating costs and capital expenditures, which are based on both industry and internal data; and average market share. The discount rate is determined based on the industry and market-based risk of achieving the projected cash flows, and the residual value is calculated using a long-term growth rate, which is based on industry projections and projected long-range inflation.\n\nII-77\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nDuring 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, which were each recorded within the TV Media segment, were as follows:\n\nTest PeriodMarkets\nTestedDiscount RateLong-Term Growth RateMarkets ImpairedImpairment\n\nSecond Quarter 202567.50 %(2)%6$157 \n\nThird Quarter 2024147.50 %(2)%5$104 \n\nSecond Quarter 202488 %— %2$15 \n\nAnnual Impairment Tests (Predecessor)\n\nIn 2024 and 2023, we performed annual impairment tests for each of our 14 markets. We performed qualitative assessments for nine and six television markets and quantitative impairment tests for the remaining five and eight markets for 2024 and 2023, respectively.\n\nFor the qualitative tests, 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 the most recent 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.\n\nThe 2024 quantitative test 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.\n\nThe 2023 quantitative test indicated that the estimated fair values of FCC licenses in five of the markets were below their respective carrying values. Accordingly, we recorded an impairment charge of $83 million to write down the carrying values of these FCC licenses to their aggregate estimated fair value. The impairment charge was primarily due to increased market volatility and higher interest rates in the fourth quarter of 2023 compared to the prior quarters of 2023 and the fourth quarter of 2022, which resulted in a higher discount rate.\n\nIn 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.\n\nII-78\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe following tables present the changes in the book value of goodwill by segment.\n\nTV MediaDirect-to-ConsumerFilmed EntertainmentTotal\n\nBalance at December 31, 2023 (Predecessor) (a)\n$11,168 $2,728 $2,620 $16,516 \n\nImpairment(5,981)— — (5,981)\n\nForeign currency(27)— — (27)\n\nBalance at December 31, 2024 (Predecessor) (a)\n5,160 2,728 2,620 10,508 \n\nDisposition(20)— — (20)\n\nForeign currency— — — — \n\nBalance at August 6, 2025 (Predecessor) (b)\n5,140 2,728 2,620 10,488 \n\nStudiosDirect-to-ConsumerTV MediaTotal\n\nBalance at August 7, 2025 (Successor) (b)\n$40 $947 $— $987 \n\nAcquisition— — 183 183 \n\nMeasurement period adjustments64 325 41 430 \n\nBalance at December 31, 2025 (Successor)$104 $1,272 $224 $1,600 \n\n(a) The carrying amount of goodwill at the TV Media segment for the Predecessor periods included accumulated impairment losses of $19.34 billion and $13.35 billion at December 31, 2024 and 2023, respectively.\n\n(b) In connection with the pushdown of the Ultimate Parent’s basis, goodwill was reduced by $9.54 billion on August 7, 2025 (see Note 2). Skydance goodwill of $40 million is also reflected in the Successor balance as of August 7, 2025.\n\nOur intangible assets were as follows:\n\nAccumulated\n\nAt December 31, 2025 (Successor)\nGrossAmortizationNet\n\nFCC and other broadcasting licenses$2,554 $(34)$2,520 \n\nTrade names1,509 (38)1,471 \n\nAffiliate relationships1,004 (158)846 \n\nSubscriber relationships1,080 (216)864 \n\nFranchises326 (13)313 \n\nDeveloped technology258 (34)224 \n\nTotal intangible assets$6,731 $(493)$6,238 \n\nAccumulated\n\nAt December 31, 2024 (Predecessor)\nGrossAmortizationNet\n\nIntangible assets subject to amortization:\n\nTrade names$241 $(166)$75 \n\nLicenses127 (68)59 \n\nCustomer agreements121 (103)18 \n\nOther intangible assets238 (196)42 \n\nTotal intangible assets subject to amortization727 (533)194 \n\nFCC licenses2,165 — 2,165 \n\nInternational broadcast licenses13 — 13 \n\nOther intangible assets34 — 34 \n\nTotal intangible assets$2,939 $(533)$2,406 \n\nII-79\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nAmortization expense was as follows:\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nAmortization expense$493 $15 $28 $35 \n\nWe expect our aggregate annual amortization expense for existing intangible assets for each of the years, 2026 through 2030, to be as follows:\n\n20262027202820292030\n\nFuture amortization expense$1,235 $947 $396 $214 $214 \n\n6) RESTRUCTURING, TRANSACTION-RELATED ITEMS, AND OTHER CORPORATE MATTERS\n\nDuring the periods presented we recorded the following restructuring charges, transaction-related items, and other corporate matters.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nSeverance (a)\n$650 $190 $523 $67 \n\nExit costs— 65 31 35 \n\nRestructuring charges 650 255 554 102 \n\nTransaction-related items81 199 62 (156)\n\nOther corporate matters— — 131 23 \n\nRestructuring, transaction-related items, and\n   other corporate matters$731 $454 $747 $(31)\n\n(a) Severance costs include the accelerated vesting of stock-based compensation.\n\nRestructuring Charges\n\nRestructuring 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.\n\nRestructuring charges for the Predecessor periods from January 1 - August 6, 2025 and the years ended December 31, 2024 and 2023 included severance costs of $190 million, $523 million and $67 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.\n\nAdditionally, during the Predecessor periods from January 1 - August 6, 2025 and the years ended December 31, 2024 and 2023, we recorded exit costs of $65 million, $31 million, and $35 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. The impairments were primarily the result of a decline in market conditions since the\n\nII-80\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\ninception of these leases and reflect the difference between the estimated fair values, which were determined based on the expected future cash flows of the lease assets, and the carrying values.\n\nThe following is a rollforward of our restructuring severance liability by segment, which is recorded in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheets, and is expected to be substantially paid by the end of 2027. See note 17 for a description of our segments for the Successor and Predecessor periods.\n\n2025 Activity (Successor)\n\nBalance at August 7, 2025\nCharges (a)\nPayments and otherBalance at December 31, 2025\n\nStudios$48 $123 $(38)$133 \n\nDirect-to-Consumer15 42 (4)53 \n\nTV Media185 301 (102)384 \n\nCorporate53 115 (33)135 \n\nTotal$301 $581 $(177)$705 \n\n2025 Activity (Predecessor)\n\nBalance at December 31, 2024\nCharges (a)\nPayments and otherBalance at\nAugust 6, 2025\n\nTV Media$156 $141 $(98)$199 \n\nDirect-to-Consumer36 5 (27)14 \n\nFilmed Entertainment46 17 (28)35 \n\nCorporate111 13 (71)53 \n\nTotal$349 $176 $(224)$301 \n\nPredecessor\n\n2024 Activity\n\nBalance at December 31, 2023\n\nCharges (a)\nPayments\nand other\nBalance at December 31, 2024\n\nTV Media$162 $181 $(187)$156 \n\nDirect-to-Consumer6 66 (36)36 \n\nFilmed Entertainment14 70 (38)46 \n\nCorporate10 171 (70)111 \n\nTotal$192 $488 $(331)$349 \n\n(a) Excludes stock-based compensation expense of $69 million and $14 million for the periods from August 7 - December 31, 2025 (Successor) and January 1 - August 6, 2025 (Predecessor), respectively. For the year ended December 31, 2024 (Predecessor), excludes stock-based compensation expense of $35 million.\n\nTransaction-Related Items\n\nDuring 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, and during 2023, we recorded a benefit of $156 million, principally associated with stockholder litigation related to the 2019 merger of Viacom Inc. (“Viacom”) and CBS Corporation (“CBS”).\n\nII-81\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nOther Corporate Matters (Predecessor)\n\nIn 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. In 2023, we recorded a charge to increase our accrual for asbestos matters by $23 million.\n\n7) RELATED PARTIES\n\nThe Ellison Family (Successor)\n\nAt December 31, 2025, the Ellison Family, the controlling stockholder of Paramount, indirectly held approximately 77.5% of our voting Class A Common Stock through their collective approximate 77.5% ownership interest in Harbor Lights Entertainment, Inc. (f/k/a National Amusements, Inc.) and 47.8% of our Class A and non-voting Class B Common Stock on a combined basis. In addition, in connection with the PIPE transaction, the NAI Equity Investors (including entities controlled by the Ellison Family) received warrants to purchase a total of 200 million shares of Paramount Skydance Corporation Class B Common Stock (of which entities controlled by the Ellison Family received warrants to purchase a total of 155 million shares) at an initial exercise price of $30.50 per share (subject to customary anti-dilution adjustments), which expire five years after issuance. The Ellison Family is comprised of Lawrence Ellison and David Ellison. David Ellison is the son of Lawrence Ellison, and Lawrence Ellison and David Ellison are accordingly considered immediate family members. David Ellison is the CEO of Paramount and the Chairman of our Board of Directors.\n\nLawrence Ellison is the Chairman and a significant stockholder of Oracle Corporation (“Oracle”). During the Successor period, we made payments totaling $12 million relating to several multi-year software as a service agreements with Oracle, principally for finance and human resources, as well as Oracle software support agreements and database licenses used by various applications. In February 2026, we executed a six-year cloud infrastructure services agreement with Oracle with a total commitment of $300 million, under which payments escalate over the term, in connection with our anticipated enterprise, data, and streaming workloads.\n\nIn addition, we have lease agreements with terms that expire in 2034 under which the lessor is an entity owned and controlled by Lawrence Ellison. At December 31, 2025, the total liability associated with these leases was $174 million. During the period from August 7 - December 31, 2025 we recorded lease costs associated with these leases totaling $20 million.\n\nThe Ellison Family has investments in other entities over which they have control or can exert significant influence, which as a result, are related parties to us. We did not have any material transactions with these entities.\n\nII-82\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nOther Related Parties\n\nIn the ordinary course of business, we are involved in transactions with our equity method investees, primarily for the licensing of television and film programming. The following tables present the amounts recorded in our consolidated financial statements related to these transactions.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nRevenues$133 $198 $273 $322 \n\nOperating costs (a)\n$43 $82 $114 $24 \n\n(a) Beginning in 2024, amounts include costs capitalized in programming assets during the period, as well as operating expenses.\n\nSuccessorPredecessor\n\nAt December 31,20252024\n\nReceivables, net$213 $190 \n\nOther assets (Receivables, noncurrent)$87 $82 \n\nThrough the normal course of business, we are involved in other transactions with related parties that have not been material in any of the periods presented.\n\n8) REVENUES\n\nThe table below presents our revenues disaggregated into categories based on the nature of such revenues. See Note 17 for revenues by segment disaggregated into these categories.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nRevenues by Type:\n\nAdvertising $3,803 $5,329 $10,295 $9,989 \n\nAffiliate and subscription5,429 8,242 13,153 13,018 \n\nTheatrical154 475 813 813 \n\nLicensing and other2,883 2,576 4,952 5,832 \n\nTotal Revenues$12,269 $16,622 $29,213 $29,652 \n\nReceivables\n\nIncluded in “Other assets” on the Consolidated Balance Sheets are noncurrent receivables of $835 million and $1.03 billion at December 31, 2025 (Successor) and December 31, 2024 (Predecessor), respectively. Noncurrent receivables primarily relate to revenues recognized under long-term content licensing arrangements. Revenues from the licensing of content are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition, while the related cash is generally collected over the term of the license period.\n\nII-83\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nOur receivables do not represent significant concentrations of credit risk at December 31, 2025 or 2024, due to the wide variety of customers, markets and geographic areas to which our products and services are sold.\n\nContract Liabilities\n\nContract liabilities are included within “Deferred revenues” and “Other liabilities” on the Consolidated Balance Sheets and were $1.5 billion, $0.9 billion, and $0.8 billion at December 31, 2025 (Successor) and December 31, 2024 and 2023 (Predecessor), respectively. For the periods from August 7 - December 31, 2025 (Successor) and January 1 - August 6, 2025, and for the years ended December 31, 2024 and 2023 (Predecessor), we recognized revenues of $1.0 billion, $0.6 billion, $0.7 billion, and $0.9 billion, respectively, that were included in the opening balance of deferred revenues for the respective period.\n\nUnrecognized Revenues Under Contract\n\nAt December 31, 2025 (Successor), unrecognized revenues attributable to unsatisfied performance obligations under our long-term contracts were approximately $6 billion, of which $3 billion is expected to be recognized in 2026, $2 billion in 2027, and $1 billion in 2028. These amounts only include contracts subject to a guaranteed fixed amount or the guaranteed minimum under variable contracts, primarily consisting of television and film licensing contracts and affiliate agreements that are subject to a fixed or guaranteed minimum fee. Such amounts change on a regular basis as we renew existing agreements or enter into new agreements. In addition, the timing of satisfying certain performance obligations under these long-term contracts is uncertain and, therefore, is also subject to change. Unrecognized revenues under contracts disclosed above do not include (i) contracts with an original expected term of one year or less, mainly consisting of advertising contracts, (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or usage, mainly consisting of affiliate agreements and (iii) long-term licensing agreements for multiple programs for which variable consideration is determined based on the value of the programs delivered to the customer and our right to invoice corresponds with the value delivered.\n\nPerformance Obligations Satisfied in Previous Periods\n\nUnder certain revenue arrangements, the amount and timing of our revenue recognition is determined based on our licensees’ subsequent sale to its end customers. As a result, under such arrangements we often satisfy our performance obligation of delivery of our content in advance of revenue recognition. We recognized revenue of $0.2 billion for the Successor period from August 7 - December 31, 2025, $0.4 billion for the Predecessor period from January 1 - August 6, 2025, and $0.5 billion and $0.4 billion for the years ended December 31, 2024 and 2023, respectively, principally relating to content licensing arrangements for which the performance obligation was satisfied prior to the periods indicated, including agreements with distributors of transactional video-on-demand and electronic sell-through services, other licensing arrangements, and theatrical distribution of our films. The amount for the year ended December 31, 2024 also included advertising revenue from amounts recognized during 2024 for the underreporting of revenue by an international advertising sales agent in previous periods.\n\nII-84\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n9) DEBT\n\nThe table below details our debt, which was recorded at its fair value on the closing date of the Transactions and the NAI Transaction on August 7, 2025 (see Note 2). Paramount Global is the issuer of all of the senior and junior debt in the table below. Upon the closing of the Transactions, Paramount Skydance Corporation provided a full and unconditional parent guarantee of Paramount Global’s senior and junior debt.\n\nSuccessor (a)\nPredecessor\n\nAtAt\n\nDecember 31, 2025December 31, 2024\n\n4.0% Senior Notes due 2026\n$347 $346 \n\n3.70% Senior Notes due 2026\n85 86 \n\n2.90% Senior Notes due 2027\n573 582 \n\n3.375% Senior Notes due 2028\n487 498 \n\n3.70% Senior Notes due 2028\n489 496 \n\n4.20% Senior Notes due 2029\n489 496 \n\n7.875% Senior Debentures due 2030\n915 829 \n\n4.95% Senior Notes due 2031\n1,221 1,232 \n\n4.20% Senior Notes due 2032\n921 980 \n\n5.50% Senior Debentures due 2033\n417 428 \n\n4.85% Senior Debentures due 2034\n76 87 \n\n6.875% Senior Debentures due 2036\n1,119 1,072 \n\n6.75% Senior Debentures due 2037\n75 76 \n\n5.90% Senior Notes due 2040\n272 298 \n\n4.50% Senior Debentures due 2042\n34 45 \n\n4.85% Senior Notes due 2042\n400 490 \n\n4.375% Senior Debentures due 2043\n1,079 1,146 \n\n4.875% Senior Debentures due 2043\n14 18 \n\n5.85% Senior Debentures due 2043\n1,103 1,235 \n\n5.25% Senior Debentures due 2044\n275 345 \n\n4.90% Senior Notes due 2044\n432 542 \n\n4.60% Senior Notes due 2045\n452 591 \n\n4.95% Senior Notes due 2050\n763 950 \n\n6.25% Junior Subordinated Debentures due 2057\n628 644 \n\n6.375% Junior Subordinated Debentures due 2062\n989 989 \n\nObligations under finance leases3 — \n\nTotal debt (b)\n13,658 14,501 \n\nLess current portion 433 — \n\nTotal long-term debt, net of current portion$13,225 $14,501 \n\n(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 (see Note 2).\n\n(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.\n\nII-85\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nSenior Debt\n\nIn January 2026, we repaid our $347 million of 4.0% senior notes at maturity.\n\nDuring the fourth quarter of 2024 (Predecessor), we redeemed our $126 million of outstanding 4.75% senior notes due in 2025 at par.\n\nDuring 2023 (Predecessor), we repurchased $1.04 billion of our outstanding senior notes due between 2025 and 2027 through a tender offer, for an aggregate repurchase price of $1.00 billion. These repurchases resulted in a pre-tax gain on extinguishment of debt of $29 million. In 2023, we also repaid our $139 million of 7.875% debentures and $35 million of 7.125% senior notes, each at maturity.\n\nJunior Debt\n\nAt 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.\n\nThe 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.\n\nThe 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 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.\n\nLong-Term Debt Maturities\n\nAt December 31, 2025, our scheduled maturities of long-term debt at face value, which excludes payments for the related interest and finance leases, were as follows:\n\n2031 and Thereafter\n\n20262027202820292030\n\nLong-term debt$433 $584 $1,000 $500 $827 $11,632 \n\nCommercial Paper\n\nAt both December 31, 2025 (Successor) and December 31, 2024 (Predecessor), we had no outstanding commercial paper borrowings.\n\nCredit Facility\n\nOn 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\n\nII-86\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\ncommitment 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.\n\nThe 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.\n\nThe 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 Note 18), 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 (see Note 1).\n\nUpon 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.\n\nOther Bank Borrowings\n\nAt 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.\n\n10) LEASES\n\nLessee Contracts\n\nWe have operating leases primarily for office space, equipment, satellite transponders and studio facilities. We also have finance leases for equipment, which were not material for the periods presented. Lease costs are generally fixed, with certain contracts containing variable payments for non-lease costs based on usage and escalations in the lessors’ annual costs.\n\nII-87\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nAt December 31, 2025 (Successor) and December 31, 2024 (Predecessor), the following amounts were recorded on the Consolidated Balance Sheets relating to our operating leases.\n\nSuccessorPredecessor\n\n20252024\n\nRight-of-Use Assets\n\nOperating lease assets$1,126 $1,012 \n\nLease Liabilities\n\nOther current liabilities$284 $284 \n\nOperating lease liabilities1,150 1,048 \n\nTotal lease liabilities$1,434 $1,332 \n\nSuccessorPredecessor\n\n20252024\n\nWeighted average remaining lease term6 years6 years\n\nWeighted average discount rate4.7 %3.8 %\n\nThe following table presents our lease cost relating to our operating leases.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nOperating lease cost (a) (b)\n$131 $176 $301 $332 \n\nShort-term lease cost (b) (c)\n62 81 181 229 \n\nVariable lease cost (b) (d)\n34 47 84 76 \n\nSublease income(8)(9)(7)(7)\n\nTotal lease cost$219 $295 $559 $630 \n\n(a) Includes fixed lease costs and non-lease costs (consisting of other occupancy and service costs relating to the use of an asset) associated with long-term operating leases.\n\n(b) Includes costs capitalized in programming assets during the period for leased assets used in the production of programming.\n\n(c) Short-term leases, which are not recorded in right-of-use assets and lease liabilities on the Consolidated Balance Sheets, have a term of 12 months or less and exclude month-to-month leases.\n\n(d) Primarily includes non-lease costs (consisting of other occupancy and service costs relating to the use of an asset) and costs for equipment leases that vary based on usage.\n\nII-88\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe following table presents supplemental cash flow information for our operating leases.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nPayments for amounts included in operating\n   lease liabilities (operating cash flows)$140 $218 $338 $368 \n\n​\n\nNoncash additions to operating lease assets$146 $82 $130 $123 \n\nThe expected future payments relating to our operating lease liabilities at December 31, 2025 (Successor) are as follows:\n\n2026$336 \n\n2027290 \n\n2028257 \n\n2029211 \n\n2030195 \n\n2031 and thereafter387 \n\nTotal minimum payments1,676 \n\nLess amounts representing interest242 \n\nPresent value of minimum payments$1,434 \n\nIn October 2025, we entered into an operating lease for approximately 285,000 square feet of studio stage and production office space in a multi-tenant facility in New Jersey that is currently under construction by the lessor. The lease will commence upon delivery of the completed space, which is currently expected in the fourth quarter of 2028. The noncancellable term is 10 years and fixed payments will total $255 million.\n\nLessor Contracts\n\nWe enter into operating lease agreements under which third parties lease space in our owned production facilities and office buildings. Lease payments received under these agreements consist of fixed payments for the rental of space and certain building operating costs, as well as variable payments based on usage of production facilities and services, and escalating costs of building operations. Our future fixed lease income is not expected to be material. We recorded total lease income, including both fixed and variable amounts, of $17 million for the Successor period from August 7 - December 31, 2025, $23 million for the Predecessor period from January 1 - August 6, 2025 and $34 million for each of the years ended December 31, 2024 and 2023 (Predecessor).\n\n11) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS\n\nThe carrying value of our financial instruments approximates fair value, except for notes and debentures. At December 31, 2025 (Successor) and December 31, 2024 (Predecessor), the carrying value of our outstanding notes and debentures was $13.65 billion and $14.50 billion, respectively, and the fair value, which is determined based on quoted prices in active markets (Level 1 in the fair value hierarchy), was $13.2 billion and $13.3 billion, respectively.\n\nII-89\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nInvestments\n\nIncluded in “Other assets” on the Consolidated Balance Sheets are equity-method investments of $92 million and $99 million at December 31, 2025 (Successor) and December 31, 2024 (Predecessor), respectively, and equity investments without a readily determinable fair value for which we have no significant influence of $58 million and $86 million at December 31, 2025 (Successor) and December 31, 2024 (Predecessor), respectively.\n\nAt December 31, 2025 (Successor), our equity-method investments principally included a 50% interest in SkyShowtime—a subscription streaming service in certain European territories—and interests in a production studio and other media joint ventures. “Equity in loss of investee companies, net of tax” on the Consolidated Statement of Operations for the year ended December 31, 2023 (Predecessor), included impairment charges for equity method investments of $16 million.\n\nDuring the Successor period from August 7 - December 31, 2025 (Successor), we recorded $40 million to write off investments due to recent indications that these investments are no longer recoverable.\n\nIn November 2024, we completed the sale of the remaining 13% interest in Viacom18 to its majority interest holder, for an aggregate purchase price of $508 million, which resulted in a loss of $13 million. In 2023, our ownership of Viacom18 was diluted from 49% to 13% following investment by other parties. The difference between the carrying value of our 49% interest and the fair value of our 13% interest, as indicated by the additional investments, resulted in a noncash gain of $168 million in 2023. The losses and gain described above were recorded in “Gain (loss) from investments” on the Consolidated Statements of Operations.\n\nForeign Exchange Contracts\n\nWe use derivative financial instruments primarily to manage our exposure to movements in foreign currency exchange rates when translating from the foreign local currency to the U.S. dollar. 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.\n\nForeign currency forward contracts have principally been used to manage our exposure for currencies such as the British pound, the euro, the Canadian dollar and the Australian dollar, generally for periods 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. We also enter into non-designated forward contracts to hedge non-U.S. dollar denominated assets, liabilities, and cash flows.\n\nIn 2024, we entered into a foreign currency option contract to mitigate the exchange rate risk of the Indian rupee-denominated sale of our interest in Viacom18 discussed above, and recognized a total loss of $5 million on this contract, which is included in the table below.\n\nAt December 31, 2025 (Successor) and December 31, 2024 (Predecessor), the notional amount of all foreign exchange 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 $358 million related to our foreign currency assets and liabilities.\n\nII-90\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nGains (losses) recognized on derivative financial instruments were as follows:\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023Financial Statement Account\n\nNon-designated foreign\n   exchange contracts$(4)$(24)$13 $(10)Other items, net\n\nWe 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.\n\nFair Value Measurements\n\nThe table below presents our assets and liabilities measured at fair value on a recurring basis at December 31, 2025 (Successor) and December 31, 2024 (Predecessor). These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting our own assumptions about the assumptions that market participants would use in pricing the asset or liability. All of our assets and liabilities that are measured at fair value on a recurring basis use Level 2 inputs. The fair value of foreign currency hedges is determined based on the present value of future cash flows using observable inputs including foreign currency exchange rates. The fair value of deferred compensation liabilities is determined based on the fair value of the investments elected by employees.\n\nSuccessorPredecessor\n\nAtAt\n\nDecember 31, 2025December 31, 2024\n\nAssets:\n\nForeign currency hedges$38 $45 \n\nTotal Assets$38 $45 \n\nLiabilities:\n\nDeferred compensation$312 $385 \n\nForeign currency hedges28 48 \n\nTotal Liabilities$340 $433 \n\nLevel 3 inputs were used in determining Paramount Global’s net assets at the Ultimate Parent’s basis (see Note 2) and the estimated fair values of assets that were impaired during the Predecessor periods presented (see Notes 4 and 5).\n\nII-91\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n12) VARIABLE INTEREST ENTITIES\n\nIn the normal course of business, we enter into joint ventures or make investments with business partners that support our underlying business strategy and provide us the ability to enter new markets to expand the reach of our brands, develop new programming and/or distribute our existing content. In certain instances, an entity in which we make an investment may qualify as a VIE. In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE, and have the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.\n\nThe following tables present the amounts recorded in our consolidated financial statements related to our consolidated VIEs.\n\nSuccessorPredecessor\n\nAtAt\n\nDecember 31, 2025December 31, 2024\n\nTotal assets$1,193 $1,825 \n\nTotal liabilities$311 $198 \n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nRevenues$243 $294 $530 $598 \n\nOperating income (loss)$13 $(102)$(124)$(107)\n\n13) STOCKHOLDERS’ EQUITY\n\nHolders of the Company’s Class A Common Stock are entitled to one vote per share with respect to all matters on which the holders of the Company’s Common Stock are entitled to vote and holders of the Company’s Class B Common Stock do not have any voting rights, except as required by applicable law.\n\nImpact from the Transactions— Common Stock\n\nOn August 6, 2025, each share of Paramount Global common stock that was owned by Paramount Global as treasury stock was cancelled and ceased to exist, and each issued and outstanding share of Paramount Global Class A Common Stock and Paramount Global Class B Common Stock was converted automatically into the right to receive one share of Paramount Skydance Corporation Class A Common Stock and Paramount Skydance Corporation Class B Common Stock, respectively. Additionally, at the closing of the Transactions, all outstanding Paramount Global RSU awards and PSU awards were converted to Paramount RSU awards.\n\nThe Transactions included a cash-stock election offered to holders of Paramount Global pursuant to which (a) shares of Paramount Global Class A Common Stock held by stockholders other than NAI or its subsidiaries were converted, at the stockholders’ election, into the right to receive either the Class A Cash Consideration or the Class A Stock Consideration and (b) shares of Paramount Global Class B Common Stock held by stockholders other than NAI or its subsidiaries, the NAI Equity Investors and certain other affiliates of investors in Skydance were converted, at the stockholders’ election, into the right to receive the Class B Cash Consideration (subject to proration) or the Class B Stock Consideration. The elections resulted in cash settlement of 7.2 million shares of\n\nII-92\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nParamount Global Class A Common Stock at a price of $23.00 per share and cash settlement of 285.9 million shares of Paramount Global Class B Common Stock at a price of $15.00 per share for which holders of the shares elected to receive the Class A Cash Consideration and Class B Cash Consideration, respectively. In addition, holders of 2.0 million shares of Paramount Global Class A Common Stock elected to receive the Class A Stock Consideration or made no election, and as such received shares of Paramount Skydance Corporation Class B Common Stock at a conversion rate of 1.5333, resulting in the issuance of 3.1 million shares of Paramount Skydance Corporation Class B Common Stock. Elections made for the Class B Cash Consideration were subject to a proration mechanism. Shares of Paramount Global Class B Common Stock for which elections to receive Class B Cash Consideration were not made or were validly revoked remained issued and outstanding as one share of Paramount Skydance Corporation Class B Common Stock. Shares of Paramount Global Class A Common Stock and Paramount Global Class B Common Stock were cancelled and ceased to exist upon completion of the Transactions.\n\nThe cash elections were funded by $4.45 billion of the PIPE Transaction proceeds, and the remaining $1.52 billion was provided to Paramount. In exchange for these proceeds, the NAI Equity Investors and certain other affiliates of investors in Skydance received 400 million newly issued shares of Paramount Skydance Corporation Class B Common Stock for a purchase price of $15.00 per share, and the NAI Equity Investors also received warrants to purchase 200 million shares of Paramount Skydance Corporation Class B Common Stock at an initial exercise price of $30.50 per share (subject to customary anti-dilution adjustments), which expire five years after issuance.\n\nIn addition, 316.7 million shares (313.8 million shares after reduction in connection with certain tax withholding requirements) of Paramount Skydance Corporation Class B Common Stock were issued to holders of Skydance Membership Units and Skydance Phantom Unit awards.\n\nThe table below details the activity described above and calculates shares of Paramount Skydance Corporation Class A Common Stock and Class B Common Stock issued and outstanding after completion of the Transactions.\n\n(in millions)Class AClass B\n\nEach share of Paramount Global Class A Common Stock converted\n\n   to one share of Paramount Skydance Corporation Class A Common\n\n   Stock\n40.7 \n\nEach share of Paramount Global Class B Common Stock converted\n\n   to one share of Paramount Skydance Corporation Class B Common\n\n   Stock\n633.6 \n\nIssuance of Paramount Skydance Corporation Class B Common Stock\n   to the NAI Equity Investors and certain other affiliates of investors\n   in Skydance in exchange for proceeds from the PIPE Transaction400.0 \n\nCancellation of cash-settled Class A Common Stock(7.2)\n\nCancellation of cash-settled Class B Common Stock(285.9)\n\nConversion of one share of stock-settled Class A Common Stock to\n\n   1.5333 shares of Class B Common Stock\n(2.0)3.1 \n\nIssuance of Paramount Skydance Corporation Class B Common Stock\n   to holders of Skydance Membership Units and Skydance Phantom\n   Unit awards313.8 \n\nTotal share issuance, net of cancellations(9.2)431.0 \n\nTotal shares of Paramount Skydance Corporation Class A and Class B\n   Common Stock issued and outstanding after the Transactions31.5 1,064.6 \n\nII-93\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nUnder the amended and restated certificate of incorporation, Paramount Skydance Corporation is authorized to issue up to 55 million shares of Paramount Skydance Corporation Class A Common Stock, par value of $.001 per share; 5.50 billion shares of Paramount Skydance Corporation Class B Common Stock, par value of $.001 per share; and 100 million shares of preferred stock, par value of $.001 per share.\n\nIn the fourth quarter of 2025, we issued an aggregate amount of 5.4 million shares of our Class B common stock at $19.09 per share as consideration to certain sophisticated investors in connection with an acquisition, for an aggregate value of $104 million, and expect to issue an additional 0.7 million shares, or $13 million of value during the first quarter of 2026. In addition, we issued 3.5 million shares of restricted stock with future vesting conditions to employees of the acquired company in a private placement and not from our existing authorization.\n\nCommon Stock Dividends\n\nThe following table presents dividends declared per share and total dividends for Paramount Skydance Corporation Class B Common Stock for the Successor period and Paramount Global’s Class A and Class B Common Stock for the Predecessor periods.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nClass A and Class B Common Stock\n\nDividends declared per common share$.10 $.10 $.20 $.39 \n\nTotal common stock dividends$114 $70 $138 $261 \n\nMandatory Convertible Preferred Stock (Predecessor)\n\nAt December 31, 2023, there were 10 million shares of Paramount Global Mandatory Convertible Preferred Stock outstanding. During the first quarter of 2024, 0.3 million shares of Mandatory Convertible Preferred Stock were voluntarily converted into Paramount Global Class B Common Stock at a conversion rate of 1.0013 shares. On April 1, 2024, each of the remaining 9.7 million outstanding shares automatically and mandatorily converted into 1.1765 shares of Paramount Global Class B Common Stock, resulting in the issuance of 11.5 million shares of Paramount Global Class B Common Stock.\n\nDuring the first quarter of 2024, the final dividend on the 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. For each of the quarters of 2023, Paramount Global declared a quarterly cash dividend of $1.4375 per share on the Mandatory Convertible Preferred Stock, resulting in total annual dividends of $58 million for the year ended December 31, 2023.\n\nCommon Stock Conversion Rights (Predecessor)\n\nHolders of Paramount Global Class A Common Stock had the right to convert their shares to Paramount Global Class B Common Stock as long as there were at least 5,000 shares of Paramount Global Class A Common Stock outstanding. Conversions of Paramount Global’s Class A Common Stock into Paramount Global’s Class B Common Stock were minimal during the period from January 1 - August 6, 2025, as well as for the years ended 2024 and 2023.\n\nII-94\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nAccumulated Other Comprehensive Income (Loss)\n\nThe following table summarizes the changes in the components of accumulated other comprehensive income (loss).\n\nContinuing OperationsDiscontinued Operations\n\nCumulative\nTranslation\nAdjustmentsNet Actuarial\nLoss and Prior\nService Cost\nOther Comprehensive Income (Loss) (a)\nAccumulated\nOther\nComprehensive Income (Loss)\n\nAt December 31, 2022 (Predecessor)\n$(680)$(1,097)$(30)$(1,807)\n\nOther comprehensive income before reclassifications132 (7)(5)120 \n\nReclassifications to net earnings44 \n(b)\n52 \n(c)\n35 \n(d)\n131 \n\nOther comprehensive income176 45 30 251 \n\nAt December 31, 2023 (Predecessor)\n(504)(1,052)— (1,556)\n\nOther comprehensive income (loss) before\nreclassifications(153)55 — (98)\n\nReclassifications to net loss— 50 \n(c)\n— 50 \n\nOther comprehensive income (loss)(153)105 — (48)\n\nAt December 31, 2024 (Predecessor)(657)(947)— (1,604)\n\nOther comprehensive income before reclassifications115 — — 115 \n\nReclassifications to net earnings— 25 \n(c)\n— 25 \n\nOther comprehensive income115 25 — 140 \n\nAt August 6, 2025 (Predecessor)(542)(922)— (1,464)\n\nAdjustments to Paramount Global’s basis542 \n(e)\n922 \n(e)\n— 1,464 \n\nAt August 7, 2025 (Successor)— — — — \n\nOther comprehensive income40 19 — 59 \n\nAt December 31, 2025 (Successor)$40 $19 $— $59 \n\n(a) Reflects cumulative translation adjustments.\n\n(b) Reflects amounts realized within “Gain (loss) from investments” on the Consolidated Statement of Operations in connection with the dilution of our interest in Viacom18 (see Note 11).\n\n(c) Reflects amortization of net actuarial losses.\n\n(d) Reflects amounts realized within “Net earnings from discontinued operations, net of tax” on the Consolidated Statement of Operations in connection with the sale of Simon & Schuster (see Note 19).\n\n(e) In connection with the change in control of Paramount Global that established a new accounting basis, the historical equity of Paramount Global was reversed.\n\nThe net actuarial loss and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income (loss) is net of a tax benefit of $6 million for the period from August 7 - December 31, 2025 (Successor), $8 million for the period from January 1 - August 6, 2025 (Predecessor), and $34 million and $14 million for the years ended December 31, 2024 and 2023 (Predecessor), respectively.\n\n14) STOCK-BASED COMPENSATION\n\nWe have a long-term equity-based incentive plan (the “Plan”) to benefit and advance the interests of our company by attracting, retaining and motivating participants and to compensate participants for their contributions to the financial success of our company. The Plan provides for awards of stock options, stock appreciation rights, restricted and unrestricted stock, RSUs, dividend equivalents, performance awards and other equity-related awards. RSUs, restricted stock and PSUs accrue dividends each time we declare a quarterly cash dividend, which are paid\n\nII-95\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nupon vesting when the shares are delivered and are forfeited if the award does not vest. Upon exercise of stock options or vesting of RSUs, restricted stock and PSUs, we issue new shares from our existing authorization. At December 31, 2025, there were 94 million shares available for future grant under the Plan. Stock-based compensation awards were also granted under Predecessor equity incentive plans prior to the closing of the Transactions. Upon exercise of outstanding stock options or vesting of RSUs previously granted under the Predecessor’s equity incentive plans, shares may be issued from a previous authorization.\n\nThe following table presents a summary of stock-based compensation expense for the periods presented.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nExpense included in operating and SG&A (a)\n$91 $99 $210 $172 \n\nExpense included in restructuring charges (b)\n69 14 35 5 \n\nStock-based compensation expense, before income taxes160 113 245 177 \n\nRelated tax benefit(28)(25)(37)(35)\n\nStock-based compensation expense, net of tax benefit$132 $88 $208 $142 \n\n(a) In connection with the Transactions, certain of Paramount Global’s employees became entitled to payments and benefits that, in accordance with Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended, were not deductible for tax purposes by the Company and would result in an excise tax for the employees. To mitigate the potential tax impacts, during the fourth quarter of 2024, the Compensation Committee of Paramount Global’s Board of Directors approved the immediate vesting and settlement in shares of Paramount Global Class B Common Stock of (a) 3,414,007 RSUs that were previously granted to 77 employees and scheduled to vest in future years and (b) 634,075 PSUs, comprising the target awards previously-granted with performance periods ending in calendar years 2026 and 2027 for three executives, for which performance-based vesting conditions would otherwise have been deemed achieved at target performance for purposes of the conversion of the PSUs pursuant to the Transaction Agreement. These modifications resulted in $31 million of incremental stock-based compensation expense during 2024.\n\n(b) Reflects accelerations as a result of restructuring activities, which are included in “Restructuring, transaction-related items, and other corporate matters” on the Consolidated Statements of Operations.\n\nIncluded in net earnings from discontinued operations was stock-based compensation expense of $2 million for the year ended December 31, 2023.\n\nRSUs, Restricted Stock and PSUs\n\nCompensation expense for RSUs and restricted stock is determined based upon the market price of the shares underlying the awards on the date of grant and expensed over the vesting period, which is annually or quarterly, over a one- to five-year service period. Forfeitures for RSUs are estimated on the date of grant based on historical forfeiture rates and adjusted based on actual forfeitures. On an annual basis, we revise the estimated forfeiture rate, as necessary.\n\nThe fair value of performance share unit (“PSU”) awards granted during the years ended December 31, 2024 and 2023 (Predecessor) was $41 million and $43 million, respectively. For PSU awards with a market condition, the number of shares to be issued upon vesting was based on the total shareholder return of Paramount Global’s Class B Common Stock measured against the companies comprising the S&P 500 Index or a defined peer group over a designated measurement period. Certain other PSU awards were based on the achievement of established internal operating goals. The fair value of PSU awards with a market condition is determined using a Monte Carlo simulation model and is expensed over the required employee service period. Compensation expense for these PSUs is not adjusted for the actual number of shares issued based on the outcome of the market condition for\n\nII-96\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\ncompleted performance periods. The fair value of PSU awards with internal performance conditions is based on the market price of the shares on the date of grant, and is expensed based on the probable outcome of internal performance metrics and subsequently adjusted to reflect the actual shares issued based on the outcome of the performance metrics for completed performance periods. For all PSU awards, if the required service period is not completed, the award is forfeited, and compensation expense is adjusted.\n\nAt the closing of the Transactions, all outstanding Paramount Global RSU awards and PSU awards were converted to Paramount RSU awards. There were no PSUs outstanding at December 31, 2025.\n\nIn the fourth quarter of 2025, 3.5 million shares of restricted stock with future vesting conditions were issued to employees of a recently acquired company in a private placement and not from our existing authorization. Compensation expense will be recognized over the applicable vesting period, which ranges from one to five years.\n\nThe following table presents the weighted-average grant-date fair value of grants and the total market value of vested RSUs, restricted stock and PSUs for the periods presented.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nWeighted average grant date fair value of RSUs,\n   restricted stock and PSUs$13.89 $10.75 $10.97 $22.83 \n\nMarket value of RSU and PSU vests$92 $71 $130 $74 \n\nTotal unrecognized compensation cost related to non-vested RSUs and restricted stock at December 31, 2025 was $721 million, which is expected to be recognized over a weighted average period of 3.95 years.\n\nThe following table summarizes our RSU, restricted stock and PSU share activity:\n\nWeighted Average\n\nSharesGrant Date Fair Value\n\nNon-vested at December 31, 2024 (Predecessor)\n20,249,642 $15.90 \n\nGranted19,120,459 $10.75 \n\nVested(6,201,389)$15.91 \n\nForfeited (2,678,560)$17.46 \n\nNon-vested at August 6, 2025 (Predecessor)\n30,490,152 $12.53 \n\nNon-vested at August 7, 2025 (Successor)\n30,490,152 $12.53 \n\nGranted44,464,279 $13.89 \n\nVested(6,548,696)$11.60 \n\nForfeited(533,751)$11.10 \n\nNon-vested December 31, 2025 (Successor)\n67,871,984 $13.52 \n\nII-97\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nStock Options\n\nThere were no stock option grants during any of the periods presented, and at December 31, 2025, all stock options are vested and there is no remaining unrecognized compensation cost.\n\nThe following table summarizes our stock option activity.\n\nWeighted Average\n\nStock OptionsExercise Price\n\nOutstanding and Exercisable at 12/31/2024 (Predecessor)2,798,446 $54.40 \n\nExpired (745,280)$62.90 \n\nOutstanding and Exercisable at 8/6/25 (Predecessor)2,053,166 $51.31 \n\nOutstanding and Exercisable at 8/7/25 (Successor)2,053,166 $51.31 \n\nExpired(440,934)$43.93 \n\nOutstanding and Exercisable at 12/31/2025 (Successor)1,612,232 $53.33 \n\nThere were no stock option exercises during the Successor and Predecessor periods from August 7 - December 31, 2025, January 1 - August 6, 2025, and the years ended December 31, 2024 and 2023.\n\nAt December 31, 2025 (Successor), stock options outstanding and exercisable have a weighted average remaining contractual life of 0.47 years. There was no intrinsic value for options outstanding and exercisable, based on our closing stock price of $13.40 at December 31, 2025.\n\n15) INCOME TAXES\n\nThe U.S. and foreign components of earnings (loss) from continuing operations before income taxes and equity in loss of investee companies were as follows:\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nUnited States$(652)$157 $(5,862)$(2,039)\n\nForeign176 347 (315)786 \n\nTotal$(476)$504 $(6,177)$(1,253)\n\nII-98\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe components of the (benefit from) provision for income taxes were as follows:\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nCurrent:\n\nFederal$(11)$144 $121 $70 \n\nState and local(5)74 56 84 \n\nForeign91 104 148 135 \n\nTotal current75 322 325 289 \n\nDeferred:\n\nFederal$(139)$(341)$(538)$(556)\n\nState and local21 (73)(116)(110)\n\nForeign3 13 24 16 \n\nTotal deferred(115)(401)(630)(650)\n\nBenefit from income taxes$(40)$(79)$(305)$(361)\n\nIn addition, for the Predecessor periods, net earnings from discontinued operations included income tax provisions of $5 million and $249 million for the years ended 2024 and 2023, respectively.\n\nThe equity in loss of investee companies is shown net of tax on the Consolidated Statements of Operations. The tax provision relating to losses from equity investments was $1 million for the period from August 7 - December 31, 2025 (Successor) and $2 million for the period from January 1 - August 6, 2025 (Predecessor), and the tax benefit was $1 million in 2024 and $10 million in 2023, which represented an effective tax rate of 1.0%, 1.2%, 0.3%, and 2.7% for the respective periods.\n\nII-99\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe difference between income taxes expected at the U.S. federal statutory income tax rate of 21% and the (benefit from) provision for income taxes is summarized as follows:\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,\n\n20252025\n\nAmountPercentAmountPercent\n\nTaxes on income at U.S. federal statutory rate$(100)21.0 %$106 21.0 %\n\nState and local taxes, net of federal tax benefit (a)\n6 (1.3)%(17)(3.4)%\n\nEffect of foreign operations:\n\nUnited Kingdom\n\nStatutory tax rate difference6 (1.3)%7 1.4 %\n\nUK consortium group relief(29)6.1 %(37)(7.3)%\n\nWithholding taxes(4)0.8 %(5)(1.0)%\n\nProvision to return(13)2.7 %— — %\n\nOther2 (0.4)%7 1.4 %\n\nCanada\n\nWithholding taxes28 (5.9)%28 5.5 %\n\nOther5 (1.0)%1 0.2 %\n\nNetherlands\n\nProvision to return16 (3.4)%— — %\n\nOther— — %3 0.6 %\n\nAustralia\n\nStatutory tax rate difference(3)0.6 %(6)(1.2)%\n\nChanges in valuation allowances5 (1.0)%25 5.0 %\n\nOther5 (1.0)%3 0.6 %\n\nGermany\n\nProvision to return6 (1.3)%1 0.2 %\n\nOther— — %1 0.2 %\n\nChile\n\nChanges in valuation allowances7 (1.5)%— — %\n\nOther(2)0.4 %(1)(0.2)%\n\nBarbados\n\nStatutory tax rate difference(11)2.3 %(16)(3.2)%\n\nPillar Two14 (2.9)%— — %\n\nItaly8 (1.7)%5 1.0 %\n\nOther foreign jurisdictions17 (3.6)%21 4.2 %\n\nEffect of cross-border tax laws:\n\nForeign tax credits(62)13.0 %(51)(10.1)%\n\nForeign-derived intangible income— — %(48)(9.5)%\n\nU.S. tax on foreign entities— — %8 1.6 %\n\nSubpart F income23 (4.8)%— — %\n\nTax credits— — %(4)(0.8)%\n\nChanges in valuation allowances5 (1.0)%(94)(18.7)%\n\nNontaxable and nondeductible items\n\nCompensation25 (5.2)%5 1.0 %\n\nNoncontrolling interests(9)1.9 %(93)(18.5)%\n\nTransaction-related items1 (0.2)%14 2.8 %\n\nExcess tax (benefit) deficiency from stock-based compensation(2)0.4 %9 1.8 %\n\nOther4 (0.8)%(4)(0.8)%\n\nChanges in reserve for uncertain tax positions11 (2.3)%57 11.3 %\n\nOther, net1 (0.2)%(4)(0.8)%\n\nBenefit from income taxes$(40)8.4 %$(79)(15.7)%\n\n(a) State taxes in Pennsylvania, New York, California, New Jersey, Ohio, and Oregon comprise the majority of the tax effect in this category.\n\nII-100\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nPredecessor\n\nYear Ended December 31,\n\n20242023\n\nTaxes on income at U.S. federal statutory rate$(1,297)$(263)\n\nState and local taxes, net of federal tax benefit(56)(13)\n\nEffect of foreign operations74 (97)\n\nNoncontrolling interests(7)(6)\n\nGoodwill impairment819 — \n\nInterest limitation carryforward valuation allowance101 — \n\nNon-deductible expenses55 9 \n\nReorganization of foreign operations— (4)\n\nTax deficiency from stock-based compensation18 18 \n\nOther, net\n(12)(5)\n\nBenefit from income taxes$(305)$(361)\n\nThe following table summarizes the components of deferred income tax assets and liabilities.\n\nSuccessorPredecessor\n\nAtAt\n\nDecember 31, 2025December 31, 2024\n\nDeferred income tax assets:\n\nReserves and other accrued liabilities$606 $354 \n\nPension, postretirement and other employee benefits437 460 \n\nLease liability348 409 \n\nTax credit and loss carryforwards893 538 \n\nInterest limitation carryforward13 114 \n\nCapitalized costs383 180 \n\nIntangible assets— 428 \n\nInvestments406 25 \n\nOther5 10 \n\nTotal deferred income tax assets3,091 2,518 \n\nValuation allowance(625)(655)\n\nDeferred income tax assets, net of valuation allowance2,466 1,863 \n\nDeferred income tax liabilities:\n\nIntangible assets(395)— \n\nLease asset(308)(340)\n\nProperty, equipment and other assets(267)(89)\n\nFinancing obligations(285)(66)\n\nOther(14)(16)\n\nTotal deferred income tax liabilities(1,269)(511)\n\nDeferred income tax assets, net$1,197 $1,352 \n\nAt December 31, 2025 (Successor), we had deferred income tax assets for federal foreign tax credit carryforwards of $111 million and net operating loss carryforwards for federal, state and local, and foreign jurisdictions of $657 million, the majority of which expire in various years from 2026 through 2040. The deferred tax asset for the U.S. interest limitation carryforward of $13 million at December 31, 2025 (Successor) has an indefinite carryforward period.\n\nII-101\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe 2025 (Successor) and 2024 (Predecessor) deferred income tax assets were reduced by a valuation allowance of $625 million and $655 million, respectively, principally relating to income tax benefits from capital losses and net operating losses in foreign jurisdictions, which are not expected to be realized. 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. The favorable change to the interest deduction limitation resulted in the reversal of the valuation allowance of $114 million on our interest limitation carryforward deferred tax asset.\n\nGenerally, the future remittance of foreign undistributed earnings will not be subject to U.S. federal income taxes and as a result, for substantially all of our foreign subsidiaries, we do not intend to assert indefinite reinvestment of both cash held outside of the U.S. and future cash earnings. However, a future repatriation of cash could be subject to state and local income taxes, foreign income taxes, tax on foreign currency translation gains and losses, and withholding taxes. Accordingly, as of December 31, 2025 (Successor), we recorded deferred income tax liabilities associated with future repatriations of $10 million on the Consolidated Balance Sheet. Additional income taxes have not been provided for outside basis differences inherent in these entities, which could be recognized upon sale or other transaction, as these amounts continue to be indefinitely invested in foreign operations. The determination of the U.S. federal deferred income tax liability for such outside basis difference is not practicable.\n\nThe income taxes paid (net of refunds) were as follows:\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,\n\n20252025\n\nFederal$— $196 \n\nState and local:\n\nHawaii— (49)\n\nOther19 9 \n\nForeign:\n\nCanada14 (21)\n\nItaly12 5 \n\nUnited Kingdom2 17 \n\nOther23 44 \n\nTotal$70 $201 \n\nII-102\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe following table sets forth the change in the reserve for uncertain tax positions, excluding related accrued interest and penalties.\n\nAt 1/1/2023 (Predecessor)$303 \n\nAdditions for current year tax positions15 \n\nAdditions for prior year tax positions20 \n\nReductions for prior year tax positions(46)\n\nCash settlements(2)\n\nStatute of limitations lapses(4)\n\nAt December 31, 2023 (Predecessor)286 \n\nAdditions for current year tax positions12 \n\nAdditions for prior year tax positions3 \n\nReductions for prior year tax positions(14)\n\nCash settlements(3)\n\nStatute of limitations lapses(4)\n\nAt December 31, 2024 (Predecessor)280 \n\nAdditions for current year tax positions6 \n\nAdditions for prior year tax positions154 \n\nReductions for prior year tax positions(8)\n\nStatute of limitations lapses(1)\n\nAt August 6, 2025 (Predecessor)431 \n\nAdditions for current year tax positions3 \n\nAdditions for prior year tax positions2 \n\nReductions for prior year tax positions(3)\n\nCash settlements(1)\n\nStatute of limitations lapses(1)\n\nAt December 31, 2025 (Successor)$431 \n\nThe reserve for uncertain tax positions of $431 million at December 31, 2025 (Successor) includes $360 million which would affect our effective income tax rate, if and when recognized in future years. We recognized interest and penalties of $13 million for the Successor period from August 7 - December 31, 2025, and $33 million, $28 million, and $26 million for the Predecessor periods from January 1 - August 6, 2025 and the years ended December 31, 2024 and 2023, respectively, in the Consolidated Statements of Operations. Liabilities for accrued interest and penalties totaling $144 million as of December 31, 2025 (Successor) and $104 million as of December 31, 2024 (Predecessor), respectively, are included within “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheets.\n\nThe Company and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) and various state and local and foreign jurisdictions. For periods prior to the 2019 merger of Viacom and CBS, Viacom and CBS filed separate tax returns. For Viacom, we are currently under examination by the IRS for the 2016 through 2019 tax years. The Company and the IRS settled CBS’ income tax audits for the 2017 and 2018 tax years in 2023 and, during the Predecessor period from January 1 - August 6, 2025, settled the merged company’s 2019 income tax audit. In both audits, one item remains open and is currently being resolved through the Mutual Agreement Procedure process. Various tax years are also currently under examination by state and local and foreign tax authorities.\n\nII-103\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n16) PENSION AND OTHER POSTRETIREMENT BENEFITS\n\nParamount Global and certain other subsidiaries of the Company sponsor qualified and non-qualified defined benefit pension plans, principally non-contributory, covering eligible employees. Our pension plans consist of both funded and unfunded plans, and our domestic plans are frozen to future benefit accruals. The majority of participants in these plans are retired employees or former employees of previously divested businesses. Plan benefits are based primarily on an employee’s years of service and pay for each year that the employee participated in the plan. We fund our pension plans in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”), the Pension Protection Act of 2006, the Internal Revenue Code of 1986 and other applicable laws, rules and regulations. Plan assets consist principally of corporate bonds, equity securities, common collective trust funds, U.S. government securities and short-term investments. Paramount Skydance Corporation Class B Common Stock represented approximately 0.3% of the fair value of plan assets at December 31, 2025 (Successor) and Paramount Global Class B Common Stock represented 0.7% of the fair value of plan assets at December 31, 2024 (Predecessor).\n\nIn addition, the Company sponsors health and welfare plans that provide postretirement health care and life insurance benefits to eligible retired employees and their covered dependents. Eligibility is based in part on certain age and service requirements at the time of their retirement. Most of the plans are contributory and contain cost-sharing features such as deductibles and coinsurance, which are adjusted annually, as well as caps on the annual dollar amount we will contribute toward the cost of coverage. Claims and premiums for which we are responsible are paid with our own funds.\n\nThe pension plan disclosures herein include information related to our domestic pension and postretirement benefit plans only, unless otherwise noted. At December 31, 2025 (Successor) and at December 31, 2024 (Predecessor), the Consolidated Balance Sheets also include a liability of $38 million and $31 million, respectively, in “Pension and postretirement benefit obligations” relating to our non-U.S. pension plans and certain other retirement severance plans.\n\nWe use a December 31 measurement date for all pension and other postretirement benefit plans. Our pension plans were also remeasured as of August 7, 2025 in connection with the pushdown of the Ultimate Parent’s basis (see Note 2).\n\nII-104\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe following tables set forth the change in benefit obligation for our pension and postretirement benefit plans.\n\nPension BenefitsPostretirement Benefits\n\nChange in benefit obligation:\n\nBenefit obligation at January 1, 2025 (Predecessor)$3,481 $165 \n\nService cost— 1 \n\nInterest cost120 5 \n\nBenefits paid(232)(31)\n\nParticipants’ contributions— 10 \n\nRetiree Medicare drug subsidy— 2 \n\nBenefit obligation at August 6, 2025 (Predecessor)3,369 152 \n\nAdjustments to Paramount Global’s basis (Note 2)\n286 10 \n\nBenefit obligation at August 7, 2025 (Successor)3,655 162 \n\nInterest cost79 4 \n\nActuarial loss— 1 \n\nBenefits paid(107)(17)\n\nParticipants’ contributions— 5 \n\nRetiree Medicare drug subsidy— 1 \n\nBenefit obligations at December 31, 2025 (Successor)$3,627 $156 \n\nPension BenefitsPostretirement Benefits\n\nChange in benefit obligation (Predecessor):\n\nBenefit obligation at January 1, 2024$3,711 $193 \n\nService cost— 1 \n\nInterest cost198 10 \n\nActuarial (gain) loss(93)(14)\n\nBenefits paid(335)(34)\n\nParticipants’ contributions— 6 \n\nRetiree Medicare drug subsidy— 3 \n\nBenefit obligations at December 31, 2024 (Predecessor)$3,481 $165 \n\nII-105\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe following tables set forth the change in plan assets for our pension and postretirement benefit plans.\n\nPension BenefitsPostretirement Benefits\n\nChange in plan assets:\n\nFair value of plan assets at January 1, 2025 (Predecessor)$2,352 $— \n\nActual return on plan assets77 — \n\nEmployer contributions172 19 \n\nBenefits paid(232)(31)\n\nParticipants’ contributions— 10 \n\nRetiree Medicare drug subsidy— 2 \n\nFair value of plan assets at August 6, 2025 (Predecessor)2,369 — \n\nAdjustments to Paramount Global’s basis (Note 2)85 — \n\nFair value of plan assets at August 7, 2025 (Successor)2,454 — \n\nActual return on plan assets80 — \n\nEmployer contributions115 11 \n\nBenefits paid(107)(17)\n\nParticipants’ contributions— 5 \n\nRetiree Medicare drug subsidy— 1 \n\nFair value of plan assets at December 31, 2025 (Successor)\n$2,542 $— \n\nPension BenefitsPostretirement Benefits\n\nChange in plan assets:\n\nFair value of plan assets at January 1, 2024$2,507 $— \n\nActual return on plan assets100 — \n\nEmployer contributions80 25 \n\nBenefits paid(335)(34)\n\nParticipants’ contributions— 6 \n\nRetiree Medicare drug subsidy— 3 \n\nFair value of plan assets at December 31, 2024 (Predecessor)\n$2,352 $— \n\nThe funded status of pension and postretirement benefit obligations and the related amounts recognized on the Consolidated Balance Sheets were as follows:\n\nPension BenefitsPostretirement Benefits\n\nSuccessorPredecessorSuccessorPredecessor\n\nAt December 31,2025202420252024\n\nFunded status at end of year$(1,085)$(1,129)$(156)$(165)\n\nAmounts recognized on the Consolidated Balance Sheets:\n\nNoncurrent assets$6 $1 $— $— \n\nCurrent liabilities(75)(73)(25)(27)\n\nNoncurrent liabilities(1,016)(1,057)(131)(138)\n\nNet amounts recognized$(1,085)$(1,129)$(156)$(165)\n\nII-106\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nOur qualified pension plans were underfunded by $255 million and $347 million at December 31, 2025 (Successor) and December 31, 2024 (Predecessor), respectively.\n\nThe following amounts were recognized in accumulated other comprehensive income (loss) on the Consolidated Balance Sheets. In connection with the change in control of Paramount Global that established a new accounting basis, the historical equity of Paramount Global was reversed, including the accumulated other comprehensive income (loss) associated with our pension and other postretirement benefit plans.\n\nPension BenefitsPostretirement Benefits\n\nSuccessorPredecessorSuccessorPredecessor\n\nAt December 31,2025202420252024\n\nNet actuarial (loss) gain$29 $(1,448)$(1)$147 \n\nNet prior service cost— (1)— — \n\n29 (1,449)(1)147 \n\nDeferred income taxes(7)390 — (14)\n\nNet amount recognized in accumulated other\n\ncomprehensive income (loss)\n$22 $(1,059)$(1)$133 \n\nThe accumulated benefit obligation for all defined benefit pension plans was $3.63 billion and $3.48 billion at December 31, 2025 (Successor) and December 31, 2024 (Predecessor), respectively.\n\n \n\nInformation for the pension plans with an accumulated benefit obligation in excess of plan assets is set forth below.\n\nSuccessorPredecessor\n\nAt December 31,20252024\n\nProjected and accumulated benefit obligation$3,083 $2,960 \n\nFair value of plan assets$1,992 $1,830 \n\nII-107\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe following tables present the components of net periodic cost (benefit) and amounts recognized in other comprehensive income (loss).\n\nPension Benefits\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nComponents of net periodic cost:\n\nInterest cost$79 $120 $198 $207 \n\nExpected return on plan assets(51)(77)(136)(128)\n\nAmortization of actuarial losses— 44 80 83 \n\nNet periodic cost (a)\n$28 $87 $142 $162 \n\nPostretirement Benefits\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nComponents of net periodic cost:\n\nService cost$— $1 $1 $1 \n\nInterest cost4 5 10 12 \n\nAmortization of actuarial gains— (11)(17)(18)\n\nNet periodic cost (benefit) (a)\n$4 $(5)$(6)$(5)\n\n(a) Includes amounts reflected in net earnings from discontinued operations of $7 million for the year ended December 31, 2023.\n\nII-108\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe service cost component of net periodic cost is presented on the Consolidated Statements of Operations within operating income. All other components of net periodic cost are presented below operating income, in “Other items, net.”\n\nPension Benefits\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nOther comprehensive income (loss):\n\nActuarial (loss) gain$29 $— $57 $(22)\n\nAmortization of actuarial losses— 44 80 83 \n\n29 44 137 61 \n\nDeferred income taxes(7)(11)(34)(14)\n\nRecognized in other comprehensive income\n   (loss), net of tax$22 $33 $103 $47 \n\nPostretirement Benefits\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nOther comprehensive income (loss):\n\nActuarial (loss) gain$(1)$— $14 $11 \n\nAmortization of actuarial gains— (11)(17)(18)\n\n(1)(11)(3)(7)\n\nDeferred income taxes— 3 1 2 \n\nRecognized in other comprehensive income\n   (loss), net of tax$(1)$(8)$(2)$(5)\n\nII-109\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nPension Benefits\n\nSuccessorPredecessor\n\nAt\nDecember 31,At August 7,At December 31,\n\n2025202520242023\n\nWeighted average assumptions used to determine\n     benefit obligations:\n\nDiscount rate5.7 %5.7 %6.0 %5.6 %\n\nRate of compensation increase— %— %— %— %\n\nPension Benefits\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nWeighted average assumptions used to determine\n     net periodic costs:\n\nDiscount rate5.7 %6.0 %5.6 %5.9 %\n\nExpected long-term return on plan assets5.6 %5.6 %5.7 %5.7 %\n\nCash balance interest crediting rate5.3 %5.3 %5.0 %5.0 %\n\nRate of compensation increase— %— %— %— %\n\nPostretirement Benefits\n\nSuccessorPredecessor\n\nAt\nDecember 31,At August 7,At December 31,\n\n2025202520242023\n\nWeighted average assumptions used to determine benefit obligations:\n\nDiscount rate5.4 %5.5 %6.1 %5.7 %\n\nRate of compensation increaseN/AN/AN/AN/A\n\nPostretirement Benefits\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,At December 31,\n\n2025202520242023\n\nWeighted average assumptions used to determine net periodic costs:\n\nDiscount rate5.5 %6.1 %5.7 %6.0 %\n\nExpected long-term return on plan assetsN/AN/AN/AN/A\n\nCash balance interest crediting rateN/AN/AN/AN/A\n\nRate of compensation increaseN/AN/AN/AN/A\n\nN/A - not applicable\n\nII-110\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe discount rates are determined primarily based on the yield of a portfolio of high quality bonds, providing cash flows necessary to meet the pension plans’ expected future benefit payments, as determined for the projected benefit obligations. 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.\n\nThe following additional assumptions were used in accounting for postretirement benefits.\n\nSuccessorPredecessor\n\n20252024\n\nProjected health care cost trend rate (pre-65)6.8 %7.0 %\n\nProjected health care cost trend rate (post-65)6.8 %7.0 %\n\nUltimate trend rate5.0 %5.0 %\n\nYear ultimate trend rate is achieved20332033\n\nPlan Assets\n\nThe Paramount Global Investments Committee (the “Committee”) determines the strategy for the investment of pension plan assets. The Committee establishes target asset allocations for our pension plan trusts based upon an analysis of the timing and amount of projected benefit payments, projected company contributions, the expected returns and risk of the asset classes and the correlation of those returns. In June 2025, the Committee adopted a new investment policy designed to align the level of investment risk with the domestic plan’s funded status. As of December 31, 2025, the target asset allocation for the Company’s domestic pension plans is to invest 61% - 69% in liability hedging assets, and 31% - 39% in return seeking assets, including equity securities, real estate and real assets, and the remainder in cash, cash equivalents, Class B common stock and other investments. Target asset allocations for the return seeking portfolio is 74% equities, 20% real estate and real assets and 6% Company stock and other investments. At December 31, 2025, the trusts were invested approximately 62% in liability hedging assets, 26% in equity securities, 7% in real estate and real assets, and the remainder in cash, cash equivalents, Class B common stock and other investments. Liability hedging assets consist of a diversified portfolio of fixed income instruments that are substantially investment grade. All equity portfolios are diversified between U.S. and non-U.S. equities and include large and small capitalization equities. The asset allocations are reviewed regularly.\n\nII-111\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe following tables set forth our pension plan assets measured at fair value on a recurring basis at December 31, 2025 (Successor) and December 31, 2024 (Predecessor). These assets have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. See Note 11 for a description of the levels within this hierarchy. There are no investments categorized as Level 3.\n\nAt December 31, 2025 (Successor)Level 1Level 2Total\n\nCash and cash equivalents (a)\n$65 $14 $79 \n\nFixed income securities:\n\nU.S. treasury securities88 — 88 \n\nGovernment-related securities— 118 118 \n\nCorporate bonds (b)\n— 988 988 \n\nMortgage-backed and asset-backed securities— 81 81 \n\nExchange Traded Fund (ETF)4 — 4 \n\nEquity securities:\n\nU.S. large capitalization54 — 54 \n\nU.S. small capitalization61 — 61 \n\nNon-U.S. large capitalization36 — 36 \n\nExchange Traded Fund (ETF)32 — 32 \n\nOther— 10 10 \n\nTotal assets in fair value hierarchy$340 $1,211 $1,551 \n\nCommon collective funds measured at net asset value (c) (d)\n772 \n\nLimited partnerships measured at net asset value (c)\n5 \n\nMutual funds measured at net asset value (c)\n214 \n\nInvestments, at fair value$2,542 \n\nII-112\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nAt December 31, 2024 (Predecessor)Level 1Level 2Total\n\nCash and cash equivalents (a)\n$— $(60)$(60)\n\nFixed income securities:\n\nU.S. treasury securities140 — 140 \n\nGovernment-related securities— 117 117 \n\nCorporate bonds (b)\n— 1,138 1,138 \n\nMortgage-backed and asset-backed securities— 156 156 \n\nEquity securities:\n\nU.S. large capitalization43 — 43 \n\nU.S. small capitalization67 — 67 \n\nNon-U.S. large capitalization25 — 25 \n\nNon-U.S. small capitalization2 — 2 \n\nExchange Traded Fund (ETF)32 — 32 \n\nOther— 8 8 \n\nTotal assets in fair value hierarchy$309 $1,359 $1,668 \n\nCommon collective funds measured at net asset value (c) (d)\n626 \n\nLimited partnerships measured at net asset value (c)\n11 \n\nMutual funds measured at net asset value (c)\n47 \n\nInvestments, at fair value$2,352 \n\n(a) Level 1 for December 31, 2025 reflects a contribution funded on December 31, 2025. The negative cash amount at December 31, 2024 reflects pending trades for investments purchased and sold. Assets categorized as Level 2 in each year reflect investments in money market funds.\n\n(b)  Securities of diverse sectors and industries, substantially all investment grade.\n\n(c)  In accordance with FASB guidance, investments that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient have not been classified in the fair value hierarchy.\n\n(d)  Underlying investments consist mainly of U.S. large capitalization and international equity securities.\n\nMoney market investments are carried at amortized cost, which approximates fair value due to the short-term maturity of these investments. Investments in equity securities are reported at fair value based on quoted market prices on national security exchanges. The fair value of investments in common collective funds and mutual funds is determined using the net asset value (“NAV”) provided by the administrator of the fund as a practical expedient. The NAV is determined by each fund’s trustee based upon the fair value of the underlying assets owned by the fund, less liabilities, divided by the number of outstanding units. The fair value of U.S. treasury securities is determined based on quoted market prices in active markets. The fair value of government-related securities and corporate bonds is determined based on quoted market prices on national security exchanges, when available, or using valuation models which incorporate certain other observable inputs, including recent trading activity for comparable securities and broker quoted prices. The fair value of mortgage-backed and asset-backed securities is based upon valuation models which incorporate available dealer quotes, projected cash flows and market information. The fair value of limited partnerships has been estimated using the NAV of the ownership interest. The NAV is determined using quarterly financial statements issued by the partnership, which determine the value based on the fair value of the underlying investments.\n\nII-113\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nFuture Benefit Payments\n\nEstimated future benefit payments are as follows: \n\n202620272028202920302031-2035\n\nPension$320 $315 $316 $305 $303 $1,380 \n\nPostretirement$26 $23 $21 $19 $16 $61 \n\nRetiree Medicare drug subsidy$3 $3 $2 $2 $2 $4 \n\nIn 2026, we expect to make $12 million in contributions to our qualified pension plans to satisfy minimum funding requirements and to maintain at least an 80% funding threshold under ERISA and $77 million to our non-qualified pension plans to satisfy benefit payments due under these plans. Also in 2026, we expect to contribute approximately $26 million to our other postretirement benefit plans to satisfy our portion of benefit payments due under these plans.\n\nMultiemployer Pension and Postretirement Benefit Plans\n\nWe contribute to a number of multiemployer defined benefit pension plans under the terms of collective bargaining agreements that cover our union-represented employees, including talent, writers, directors, producers and other employees, primarily in the entertainment industry. The other employers participating in these multiemployer plans are primarily in the entertainment and other related industries. The risks of participating in multiemployer plans are different from single-employer plans as assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers and if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. In addition, if we choose to stop participating in some of its multiemployer plans we may be required to pay those plans a withdrawal liability based on the underfunded status of the plan. We recognize the net periodic cost for multiemployer pension and postretirement benefit plans based on the required contributions to the plans.\n\nThe financial health of a multiemployer plan is indicated by the zone status, as defined by the Pension Protection Act of 2006. Plans in the red zone are in critical status; those in the yellow zone are in endangered status; and those in the green zone are neither critical nor endangered.\n\nII-114\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nThe table below presents information concerning our participation in multiemployer defined benefit pension plans.\n\nPension PlanEmployer Identification Number/Pension Plan Number\nPension\n\nProtection Act Zone Status (a)\nCompany ContributionsExpiration Date of Collective Bargaining Agreement\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n202520242025202520242023\n\nAFTRA Retirement\n\n   Plan (b)\n13-6414972-001GreenGreen$5 $10 $18 $18 6/30/2026\n\nDirectors Guild of\n\n   America -\n\n   Producer (b)\n95-2892780-001GreenGreen8 9 17 17 6/30/2026\n\nProducer-Writers\n\n   Guild of America (b)\n95-2216351-001GreenGreen9 13 24 24 5/1/2026\n\nScreen Actors Guild -\n\n   Producers (b)\n95-2110997-001GreenGreen11 13 24 27 6/30/2026\n\nMotion Picture\n\n   Industry (b)\n95-1810805-001GreenGreen25 24 65 48 (c)\n\nOther Plans8 7 17 17 \n\nTotal contributions$66 $76 $165 $151 \n\n(a) The zone status for each individual plan listed was certified by each plan’s actuary as of the beginning of the plan years for 2025 and 2024. The plan year is the twelve months ending December 31 for each plan listed above except AFTRA Retirement Plan, which has a plan year ending November 30.\n\n(b) The Company was listed in these plan’s most recent Form 5500 as providing more than 5% of total contributions for the plan.\n\n(c) The expiration dates range from July 31, 2024 through December 1, 2028.\n\nAs a result of the above noted zone status there were no funding improvements or rehabilitation plans implemented, as defined by ERISA, nor any surcharges imposed for any of the individual plans listed.\n\nWe also contribute to multiemployer plans that provide postretirement healthcare and other benefits to certain employees under collective bargaining agreements. The contributions to these plans were $91 million for the Successor period from August 7 - December 31, 2025, $94 million for the Predecessor period from January 1 - August 6, 2025, and $215 million and $172 million for the years ended December 31, 2024 and 2023, respectively.\n\nDefined Contribution Plans\n\nWe sponsor defined contribution plans for the benefit of employees meeting eligibility requirements. Employer contributions to such plans were $40 million for the Successor period from August 7 - December 31, 2025, $82 million for the Predecessor period from January 1 - August 6, 2025, and $133 million and $151 million for the years ended December 31, 2024 and 2023, respectively.\n\n17) SEGMENT INFORMATION\n\nOur operating segments, which are the same as our reportable segments, have been determined in accordance with our internal management structure, which is organized based on products and services, and reflects the information regularly reviewed by the Company’s chief operating decision maker (“CODM”). The CODM is the Company’s Chief Strategy Officer and Chief Operating Officer, Andrew Brandon-Gordon. In the first quarter of 2026, we transitioned our reporting structure into three new segments: Studios, Direct-to-Consumer, and TV Media and\n\nII-115\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nbegan reporting under this new structure in our Quarterly Report on Form 10-Q for the first quarter of 2026. Under the new segment structure, our Studios segment reflects the combination of the historical Filmed Entertainment segment with the historical TV Media studio operations, consolidating our content creation activities. Additionally, our premium cable channel, Paramount+ with Showtime, which was previously under the TV Media segment, is now managed under the Direct-to-Consumer segment. Concurrent with the change to our segments, we updated our segment expense allocations to better reflect how we operate and make cost decisions across the business. Certain centralized costs that were previously allocated at the segment level are now reported within corporate expenses.\n\nThe tables below set forth our financial information by reportable segment. As a result of the new accounting basis established in connection with the Transactions and NAI Transaction, which makes our results of operations not comparable between the Successor and Predecessor periods (see Note 1), we are required to present segment information for the Predecessor periods based on our previous segments, Filmed Entertainment, Direct-to-Consumer, and TV Media. Accordingly, segment results for the Successor period reflect the new segment presentation and for the Predecessor period reflect the historical presentation. Disclosures at the segment level in Notes 5 and 6 also reflect the new segment presentation for the Successor period and the historical presentation for the Predecessor period. We do not disclose our assets by segment because they are not regularly provided to the CODM and are not used to evaluate our operating performance or in determining the allocation of resources.\n\nSuccessor\n\n•Studios—Our Studios segment consists of our television and film studio operations, including CBS Studios, Paramount Television Studios, Nickelodeon Animation, Paramount Pictures, Paramount Animation, and Miramax, as well as Skydance Animation, Film, Television, and Interactive/Games, and Paramount Sports Entertainment.\n\n•Direct-to-Consumer—Our Direct-to-Consumer segment consists of our portfolio of domestic and international pay and free streaming services, including Paramount+, Pluto TV, and BET+, as well as our domestic premium cable network, Paramount+ with Showtime.\n\n•TV Media—Our TV Media segment consists of our (1) broadcast operations—the CBS Television Network, our domestic broadcast television network; CBS Stations, our owned television stations; and our international free-to-air networks, including Network 10 and Channel 5; (2) domestic basic cable networks, including MTV, Comedy Central, Paramount Network, The Smithsonian Channel, Nickelodeon, BET Media Group, CBS Sports Network, and international extensions of certain of these brands; and (3) CBS Media Ventures, which produces and distributes first-run syndicated programming. TV Media also includes a number of digital properties such as CBS News 24/7 for 24-hour news and CBS Sports HQ for sports news and analysis.\n\nIn the first quarter of 2026, we also renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to Adjusted EBITDA. Although these measures have different starting points, as we define them, they produce the same result. We define Adjusted EBITDA as net earnings (loss) before interest expense and income; provision for (benefit from) income taxes; other items; equity in earnings (loss) of investee companies, net of tax; and depreciation and amortization, adjusted to exclude stock-based compensation expense and certain items identified as affecting comparability that are not part of our normal operations. We define Adjusted OIBDA as operating income before depreciation and amortization, adjusted to exclude stock-based compensation expense and the same items identified as affecting comparability. This change was made to align with the measure our management, including the CODM, began using in 2026, including for planning and forecasting of future periods,\n\nII-116\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nevaluating the operating performance of our segments, and making decisions about resource allocation. The items identified as affecting comparability that are excluded in both measures include programming charges, impairment charges, restructuring charges, and gain (loss) on dispositions, each where applicable. Stock-based compensation is a noncash expense that management does not consider to be part of our underlying operating performance and is also excluded in both measures.\n\nSuccessor\n\nPeriod From August 7 - December 31,\n\n2025\n\nRevenues:\n\nTheatrical$154 \n\nLicensing and other2,632 \n\nAdvertising12 \n\nStudios2,798 \n\nAdvertising853 \n\nAffiliate and subscription2,799 \n\nLicensing1 \n\nDirect-to-Consumer3,653 \n\nAdvertising\n2,943 \n\nAffiliate and subscription2,630 \n\nLicensing and other268 \n\nTV Media5,841 \n\nEliminations(23)\n\nTotal Revenues$12,269 \n\nFor content licensed between segments, costs are allocated across segments based on the relative value of the distribution windows within each segment; accordingly, no intersegment licensing revenues or profits are recorded by the licensor segment. Intersegment revenues are comprised of advertising revenues and licensing revenues earned from third parties who license our content to our internal platforms through sub‑licensing or co‑production arrangements.\n\nSuccessor\n\nPeriod From August 7 - December 31,\n\n2025\n\nIntercompany Revenues:\n\nStudios$17 \n\nTV Media6 \n\nTotal Intercompany Revenues$23 \n\nII-117\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nSuccessor\n\nPeriod From August 7 - December 31,\n\n2025\n\nStudios\n\nRevenues$2,798 \n\nContent costs1,974 \n\nAdvertising and marketing305 \n\nOther (a)\n335 \n\nTotal segment expenses2,614 \n\nStudios Adjusted EBITDA184 \n\nDirect-to-Consumer\n\nRevenues3,653 \n\nContent costs1,760 \n\nAdvertising and marketing674 \n\nOther (b)\n940 \n\nTotal segment expenses3,374 \n\nDirect-to-Consumer Adjusted EBITDA279 \n\nTV Media\n\nRevenues5,841 \n\nContent costs2,774 \n\nAdvertising and marketing224 \n\nOther (c)\n1,408 \n\nTotal segment expenses4,406 \n\nTV Media Adjusted EBITDA1,435 \n\nCorporate/Eliminations(540)\n\nStock-based compensation (d)\n(91)\n\nDepreciation and amortization(590)\n\nProgramming charges(41)\n\nRestructuring and transaction-related items (d)\n(731)\n\nOperating loss(95)\n\nInterest expense(366)\n\nInterest income64 \n\nLoss from investment(40)\n\nOther items, net(39)\n\nLoss from continuing operations before income taxes and equity in loss of\n     investee companies(476)\n\nBenefit from income taxes40 \n\nEquity in loss of investee companies, net of tax(104)\n\nNet loss (Parent and noncontrolling interests)(540)\n\nNet earnings attributable to noncontrolling interests(46)\n\nNet loss attributable to Parent$(586)\n\n(a) Other segment expenses for our Studios segment include employee compensation; costs relating to the distribution of our content; costs for occupancy, technology, and professional services; and other costs associated with our operations.\n\n(b) Other segment expenses for our Direct-to-Consumer segment include employee compensation; revenue-sharing costs, including for third-party distribution; costs for occupancy, technology, and professional services; and other costs associated with our operations.\n\n(c) Other segment expenses for our TV Media segment include employee compensation; revenue-sharing costs to television stations affiliated with the CBS Television Network; costs relating to the distribution of our\n\nII-118\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\ncontent; costs for research, occupancy, technology, and professional services; and other costs associated with our operations.\n\n(d) For the Successor period from August 7 - December 31, 2025 stock-based compensation expense of $69 million is included in “Restructuring and transaction-related items.”\n\nPredecessor\n\n•TV Media—Prior to the segment change, 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.\n\n•Direct-to-Consumer—Prior to the segment change, our Direct-to-Consumer segment consists of our portfolio of domestic and international pay and free streaming services, including Paramount+, Pluto TV, and BET+.\n\n•Filmed Entertainment—Prior to the segment change, our Filmed Entertainment segment included Paramount Pictures, Paramount Players, Paramount Animation, Nickelodeon Studio, and Miramax.\n\nThe primary measure of profit and loss for our operating segments in accordance with FASB guidance for segment reporting presented for the Predecessor periods is 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”). Programming charges consist only of charges related to major strategic changes (see Note 4), 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. Adjusted OIBDA was the primary method used by our management, including the CODM, for planning and forecasting of future periods, evaluating the operating performance of our segments, and making decisions about resource allocation. 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.\n\nII-119\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nPredecessor\n\nPeriod From January 1 - August 6,Year Ended December 31,\n\n202520242023\n\nRevenues:\n\nAdvertising$4,180 $8,180 $8,188 \n\nAffiliate and subscription4,302 7,647 8,085 \n\nLicensing and other1,495 2,952 3,812 \n\nTV Media9,977 18,779 20,085 \n\nAdvertising1,146 2,114 1,795 \n\nSubscription3,940 5,506 4,933 \n\nLicensing1 12 8 \n\nDirect-to-Consumer5,087 7,632 6,736 \n\nTheatrical475 813 813 \n\nLicensing and other1,112 2,126 2,120 \n\nAdvertising6 16 24 \n\nFilmed Entertainment1,593 2,955 2,957 \n\nEliminations(35)(153)(126)\n\nTotal Revenues$16,622 $29,213 $29,652 \n\nDuring the Predecessor period, revenues generated between segments were principally from intersegment arrangements for the distribution of content, rental of studio space, and advertising, as well as licensing revenues earned from third parties who license our content to our internal platforms either through a sub-license or co-production arrangement. These transactions were recorded at market value as if the sales were to third parties and were eliminated in consolidation. For content that is licensed between segments, content costs are allocated across segments based on the relative value of the distribution windows within each segment. Accordingly, no intersegment licensing revenues or profits are recorded by the licensor segment.\n\nPredecessor\n\nPeriod From January 1 - August 6,Year Ended December 31,\n\n202520242023\n\nIntercompany Revenues:\n\nTV Media$20 $84 $63 \n\nDirect-to-Consumer— — 1 \n\nFilmed Entertainment15 69 62 \n\nTotal Intercompany Revenues$35 $153 $126 \n\nII-120\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nPredecessor\n\nPeriod From January 1 - August 6,Year Ended December 31,\n\n202520242023\n\nTV Media\n\nRevenues$9,977 $18,779 $20,085 \n\nContent costs4,956 9,199 9,861 \n\nAdvertising and marketing328 689 761 \n\nOther (a)\n2,626 4,543 4,672 \n\nTotal segment expenses7,910 14,431 15,294 \n\nTV Media Adjusted OIBDA2,067 4,348 4,791 \n\nDirect-to-Consumer\n\nRevenues5,087 7,632 6,736 \n\nContent costs2,712 4,415 4,459 \n\nAdvertising and marketing749 1,341 1,751 \n\nOther (b)\n1,473 2,373 2,189 \n\nTotal segment expenses4,934 8,129 8,399 \n\nDirect-to-Consumer Adjusted OIBDA153 (497)(1,663)\n\nFilmed Entertainment\n\nRevenues1,593 2,955 2,957 \n\nContent costs846 1,496 1,545 \n\nAdvertising and marketing417 783 751 \n\nOther (c)\n430 772 780 \n\nTotal segment expenses1,693 3,051 3,076 \n\nFilmed Entertainment Adjusted OIBDA(100)(96)(119)\n\nCorporate/Eliminations(212)(427)(447)\n\nStock-based compensation (d)\n(99)(210)(172)\n\nDepreciation and amortization(204)(392)(418)\n\nProgramming charges— (1,118)(2,371)\n\nImpairment charges(157)(6,130)(83)\n\nRestructuring, transaction-related items, and other\n\n   corporate matters (d)\n(454)(747)31 \n\nGain on dispositions35 — — \n\nOperating income (loss)1,029 (5,269)(451)\n\nInterest expense(516)(860)(920)\n\nInterest income83 151 137 \n\nGain (loss) from investments— (17)168 \n\nGain on extinguishment of debt— — 29 \n\nOther items, net(92)(182)(216)\n\nEarnings (loss) from continuing operations before\n   income taxes and equity in loss of investee companies504 (6,177)(1,253)\n\nBenefit from income taxes79 305 361 \n\nEquity in loss of investee companies, net of tax(171)(291)(360)\n\nNet earnings (loss) from continuing operations412 (6,163)(1,252)\n\nNet earnings from discontinued operations, net of tax— 14 676 \n\nNet earnings (loss) (Parent and noncontrolling interests)412 (6,149)(576)\n\nNet earnings attributable to noncontrolling interests(447)(41)(32)\n\nNet loss attributable to Parent$(35)$(6,190)$(608)\n\nII-121\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n(a) Other segment expenses for our TV Media segment include employee compensation; revenue-sharing costs to television stations affiliated with the CBS Television Network; costs relating to the distribution of our content; costs for research, occupancy, technology, and professional services; and other costs associated with our operations.\n\n(b) Other segment expenses for our Direct-to-Consumer segment include employee compensation; revenue-sharing costs, including for third-party distribution; costs for occupancy, technology, and professional services; and other costs associated with our operations.\n\n(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.\n\n(d) For the Predecessor periods from January 1 - August 6, 2025, and the years ended December 31, 2024 and 2023, stock-based compensation expense of $14 million, $35 million, and $5 million, respectively, is included in “Restructuring, transaction-related items, and other corporate matters.”\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nRevenues: (a)\n\nUnited States$9,966 $13,376 $23,688 $23,962 \n\nInternational2,303 3,246 5,525 5,690 \n\nTotal Revenues$12,269 $16,622 $29,213 $29,652 \n\n(a) Revenue classifications are based on the location of the customer or platform.\n\nSuccessorPredecessor\n\nAt December 31,20252024\n\nLong-lived Assets: (a)\n\nUnited States$3,079 $2,325 \n\nInternational242 253 \n\nTotal Long-lived Assets$3,321 $2,578 \n\n(a) Reflects tangible long-lived assets, which are comprised of property and equipment and operating lease assets.\n\nII-122\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\n18) COMMITMENTS AND CONTINGENCIES\n\nCommitments\n\nOur long-term commitments not recorded on the balance sheet primarily consist of programming and talent commitments and purchase obligations for goods and services resulting from our normal course of business.\n\n \n\nOff-Balance Sheet Arrangements\n\nOur long-term programming and talent commitments not recorded on the balance sheet, estimated to aggregate to $36.08 billion as of December 31, 2025, include $31.96 billion for sports programming rights and $4.12 billion relating to the production and licensing of television and film programming, including talent contracts. We also have long-term committed purchase obligations which include agreements to purchase goods or services in the future that totaled $1.68 billion as of December 31, 2025. These commitments are payable as follows:\n\nPayments Due by Period\n\n2031 and\n\nTotal20262027202820292030Thereafter\n\nOff-Balance Sheet Arrangements\n\nProgramming and talent commitments $36,083 $4,803 $4,930 $5,236 $5,050 $4,714 $11,350 \n\nPurchase obligations $1,675 $643 $559 $376 $64 $8 $25 \n\nOn-Balance Sheet Arrangements\n\nAt December 31, 2025, we also had long-term contractual obligations for programming liabilities, participations, and residuals. These long-term contractual obligations are payable as follows: \n\nPayments Due by Period\n\n2031 and\n\nTotal2027202820292030Thereafter\n\n$1,761 $1,124 $372 $192 $59 $14 \n\nWe also have long-term lease commitments for office space, equipment, transponders and studio facilities, which are recorded on the Consolidated Balance Sheet at December 31, 2025. See Note 10 for details of our operating lease commitments.\n\nGuarantees\n\nLetters of Credit and Surety Bonds\n\nAt 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 Note 9).\n\nII-123\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nOther\n\nIn 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.\n\nLegal Matters\n\nGeneral\n\nOn an ongoing basis, we vigorously defend ourselves in numerous lawsuits and proceedings and respond to various investigations and inquiries from federal, state, local and international authorities (collectively, “Litigation”). Litigation may be brought against us without merit, is inherently uncertain and always difficult to predict. However, based on our understanding and evaluation of the relevant facts and circumstances, we believe that the following matters are not likely, in the aggregate, to result in a material adverse effect on our business, financial condition and results of operations.\n\nLitigation Relating to the Transactions\n\nIn connection with the Transactions, in July 2024, Scott Baker, a purported holder of Paramount Global Class B Common Stock, filed a putative class action lawsuit in the Court of Chancery of the State of Delaware against NAI, Shari E. Redstone, Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr., Susan Schuman, Skydance and David Ellison (the “Baker Action”). The complaint alleges breaches of fiduciary duties to Paramount Global Class B stockholders in connection with the negotiation and approval of the Transaction Agreement, among other claims, and seeks unspecified damages, costs and expenses, as well as other relief. In November 2024, the Court granted the parties’ stipulation in the Baker Action to (i) postpone briefing on the motions to dismiss until the filing or designation of an operative complaint following resolution of the plaintiff’s motion to appoint him and the Baerlocher Family Trust, a purported holder of Paramount Global Class B Common Stock, as co-lead plaintiffs and Berger Montague PC as interim class counsel (the “Baker Leadership Motion”), and (ii) stay discovery until resolution of any motion to dismiss an operative complaint following resolution of the Baker Leadership Motion. In October 2024, various purported stockholders filed motions to intervene to oppose the Baker Leadership Motion. In December 2024, the plaintiff, along with Mark Baerlocher, as trustee for the Baerlocher Family Trust, filed an amended complaint alleging the same breaches of fiduciary duties against the same defendants as in the original complaint. In June 2025, counsel for Mr. Baker informed the Court that the Baker Leadership Motion would be withdrawn without prejudice and that the group of purported stockholders seeking lead plaintiff status would meet and confer to propose a schedule for resolving lead plaintiff applications.\n\nIn April 2024, the State of Rhode Island Office of the General Treasurer, on behalf of the Employees’ Retirement System of Rhode Island, a purported holder of Paramount Global Class B Common Stock, filed a verified complaint for the inspection of books and records under Section 220 of the General Corporation Law of the State of Delaware (the “DGCL”) in the Court of Chancery of the State of Delaware against us, seeking the inspection of books and records to investigate whether Paramount Global’s Board of Directors, NAI, Shari E. Redstone and/or certain executive officers may have breached their fiduciary duties to stockholders for alleged diversion of corporate opportunities (the “220 Action”). The magistrate judge held a trial in July 2024 and denied the request for inspection. The plaintiff filed an exception to the Court, and in January 2025, the Court ruled that the plaintiff was entitled to obtain books and records that were both necessary and sufficient to fulfill the purpose of its request. In February 2025, the Court granted an implementing order returning the 220 Action to the magistrate judge for further proceedings on the scope of production. In March 2025, the Court granted our application for certification\n\nII-124\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nof interlocutory appeal to the Delaware Supreme Court, which was accepted in April 2025. The Court heard oral argument in November 2025, and the Court reserved decision. Certain other purported holders of Paramount Global Class B Common Stock and Class A Common Stock have delivered demand letters to investigate similar alleged breaches of fiduciary duties in connection with the Transactions and requested the inspection of books and records. We have also received demand letters from purported holders of Paramount Global Class B Common Stock related to alleged omissions in our registration statement on Form S-4.\n\nAdditionally, in August 2024, LiveVideo.AI Corp. filed a lawsuit in the U.S. District Court for the Southern District of New York against Shari E. Redstone, NAI, Christine Varney and Monica Seligman, alleging that the defendants did not fairly consider its offer to purchase Paramount Global. The complaint asserts claims for unfair competition, tortious interference, unjust enrichment and aiding and abetting breach of fiduciary duty, among others, and seeks unspecified monetary damages, costs and other relief. The defendants were never served. The parties exchanged several filings related to service and default. In August 2025, the magistrate judge issued a Report and Recommendation recommending that the case be dismissed and that the Court impose $10,000 in monetary sanctions against LiveVideo.AI Corp. In September 2025, the district judge adopted the report in full, dismissed the case, imposed the sanctions, and enjoined LiveVideo.AI Corp. from filing any further lawsuits in any federal district court arising out of the Transactions. LiveVideo.AI filed a Notice of Appeal in November 2025.\n\nIn August 2025, Gabelli Value 25 Fund Inc. (“Gabelli”) filed a putative class action complaint in the Court of Chancery of the State of Delaware against Barbara M. Byrne, Linda M. Griego, Judith A. McHale, Charles E. Phillips, Jr., Susan Schuman, Harbor Lights (f/k/a National Amusements, Inc.) and Shari E. Redstone (the “NAI Defendants”), and Skydance Media, LLC and RB Tentpole LP (the “Skydance Defendants”), alleging breach of fiduciary duty against all defendants and unjust enrichment against the NAI Defendants. Gabelli seeks a declaratory judgment, damages, including rescissory damages and/or quasi-appraisal damages, disgorgement of NAI’s profits, fees and costs, and pre- and post-judgment interest. In September 2025, the Skydance Defendants filed placeholder motions to dismiss, and Gabelli filed a motion to be appointed as interim lead plaintiff representing former minority holders of Paramount Global Class A Common Stock (the “Gabelli Class A Leadership Motion”). In October 2025, counsel for Gabelli filed a letter with the Court indicating that no competing motions or objections to the Gabelli Class A Leadership Motion were filed and proposed that the Court appoint Gabelli as lead plaintiff. In November 2025, the Court granted the Gabelli Class A Leadership Motion and appointed Gabelli as lead plaintiff to prosecute the claims on behalf of the Class A minority shareholders. Defendants moved to stay discovery pending resolution of any filed and forthcoming motions to dismiss, and this motion to stay is currently pending before the Court.\n\nIn February 2025, New York City Employees’ Retirement System, the New York City Fire Department Pension Fund, the New York City Police Pension Fund, the New York City Board of Education Retirement System, and the Teachers’ Retirement System of the City of New York, purported holders of Paramount Global Class B Common Stock and Class A Common Stock, filed a putative class action lawsuit in the Court of Chancery of the State of Delaware against Barbara M. Byrne, Linda M. Griego, Judith A. McHale and Susan Schuman, alleging breaches of fiduciary duties for their alleged failure to sufficiently consider an alternative offer that the plaintiffs claimed was superior to the Transactions (the “NYCERS Action”). The plaintiffs argue that the no-shop provision in the Transaction Agreement should be declared invalid and unenforceable because it prevented the parties from engaging in further deal discussions and negotiations with companies other than Skydance, including, specifically, Project Rise Partners, after the no-shop period began. The plaintiffs further assert that the Court has the power to invalidate this provision because Skydance allegedly aided and abetted NAI’s and Shari E. Redstone’s breach of fiduciary duties, including by agreeing to indemnify Shari E. Redstone (through Skydance’s separate agreement with NAI) for any breach of fiduciary duty claims arising out of the Transactions up to a certain amount. Skydance, NAI, Shari E. Redstone and Paramount Global were not named as defendants in the original complaint. The\n\nII-125\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nNYCERS Action originally sought, among other forms of relief, an order from the Court enjoining the closing of the Transactions until the Court reached a final resolution on the plaintiffs’ claims and an order compelling the special committee of Paramount Global’s Board of Directors to evaluate Project Rise Partners’ alternative offer to, among other things, acquire Paramount Global Class A Common Stock for $23.00 per share and Paramount Global Class B Common Stock for $19.00 per share. The Project Rise Partners’ offer was made after the go-shop period in the Transaction Agreement had ended. The plaintiffs filed a motion for expedited proceedings along with their complaint. In February 2025, the plaintiffs moved to join Paramount Global, Skydance, Shari E. Redstone, NAI and various other entities named in the Transaction Agreement as necessary parties to the litigation and moved for a temporary restraining order preventing the closing of the Transactions until the Court considered the plaintiffs’ anticipated motion for injunctive relief following expedited discovery. In March 2025, the court allowed plaintiffs to amend the complaint to add Paramount Global, Skydance, Shari E. Redstone, NAI and the various other entities as defendants. The amended complaint seeks compensatory damages. The parties reached an agreement to withdraw the plaintiffs’ request for expedition and their application for injunctive relief in exchange for targeted discovery from certain of the defendants and third parties. The matter is in discovery.\n\nIn April 2025, Metropolitan Water Reclamation District Retirement Fund, Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago, Gary Mendelsohn, and Park Employees’ Annuity and Benefit Fund of Chicago, purported holders of Paramount Global Class B Common Stock, filed a complaint for the inspection of books and records under Section 220 of the DGCL in the Court of Chancery of the State of Delaware against us to maintain standing to enforce their statutory inspection rights and seek an order to produce all the books and records identified in their Section 220 demands to investigate possible breaches of fiduciary duties in connection with the Transactions. The complaint alleges that the documents produced to such purported stockholders thus far pursuant to their Section 220 demands are insufficient. The complaint seeks an order requiring us to produce the documents identified in their Section 220 demands, among other relief. In November 2025, the parties contacted the Court with a request to lift the stay and schedule a trial. In December 2025, the Court entered a case schedule. Under the schedule, briefing is set to conclude by February 13, 2026, and trial on the books and records demand is set for March 11, 2026.\n\nLitigation Related to Distribution Agreements\n\nIn October 2024, Sony Pictures Television Inc., along with Jeopardy Productions, Inc. and Califon Productions, Inc. (collectively, “Sony”), filed a civil complaint for damages against CBS Studios Inc. in the Superior Court of the State of California, for Los Angeles County, asserting a breach of contract claim against us relating to our exclusive right to distribute Wheel of Fortune and Jeopardy! (the “Distribution Agreements”). In December 2024, we filed a cross-complaint against Sony seeking, among other things, a declaration that the Distribution Agreements remain in full force and effect. On February 3, 2025, Sony purported to assume our distribution functions, and on February 4, 2025, we filed an ex parte application, seeking a temporary restraining order preventing Sony from assuming these distribution functions, which the trial court granted on February 5, 2025. On April 10, 2025, the trial court declined to issue a preliminary injunction preventing Sony from assuming these distribution functions for the duration of the litigation. On April 11, 2025, we appealed the trial court’s ruling and requested a stay of the order denying the preliminary injunction, which was granted on April 16, 2025. The parties have reached a settlement of this matter.\n\nClaims Related to Former Businesses\n\nAsbestos\n\nWe are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a\n\nII-126\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\npredecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. We are typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of our products is the basis of a claim. Claims against us in which a product has been identified most commonly relate to allegations of exposure to asbestos-containing insulating material used in conjunction with turbines and electrical equipment.\n\nClaims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. We do not report as pending those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants who allege minimal or no impairment. As of December 31, 2025 (Successor), we had pending approximately 17,490 asbestos claims, as compared with approximately 18,310 as of December 31, 2024 (Predecessor). For the period from August 7 - December 31, 2025 (Successor) and for the period from January 1 - August 6, 2025 (Predecessor) we received approximately 1,300 and 1,890 new claims, respectively, and closed or moved to an inactive docket approximately 1,810 and 2,200 claims, respectively. We report claims as closed when we become aware that a dismissal order has been entered by a court or when we have reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. Our total costs for settlement and defense of asbestos claims after insurance recoveries and net of tax, were approximately $23 million for the Successor period from August 7 - December 31, 2025, $11 million and $34 million for the Predecessor periods from January 1 - August 6, 2025, and the year ended December 31, 2024, respectively. Our costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.\n\nFilings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. A significant number of pending claims against us are non-cancer claims. It is difficult to predict long-term future asbestos liabilities, as events and circumstances may impact the estimate.\n\nEnvironmental and Other \n\nFrom time to time, we also receive claims from federal and state environmental regulatory agencies and other entities asserting that we are or may be liable for environmental cleanup costs and related damages principally relating to our historical and predecessor operations. In addition, from time to time we receive personal injury claims including toxic tort and product liability claims (other than asbestos) arising from our historical operations and predecessors.\n\nContingent Liabilities Relating to Former Businesses\n\nIn connection with recording Paramount Global’s net assets at the Ultimate Parent’s basis, “Other liabilities” was increased to reflect the fair value of Paramount Global’s estimated contingent liabilities for the defense and settlement of asbestos lawsuits as well as claims from federal and state environmental regulatory agencies and other entities asserting liability for environmental cleanup costs and related damages (See Note 2). The estimated fair value of the asbestos-related liability was determined in consultation with a third-party firm with expertise in estimating asbestos liability and represents the estimate of the amount a third party would pay to take on the risk of any asbestos-related future losses.\n\nII-127\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nWe record an accrual for a loss contingency when it is both probable that a liability has been incurred and when the amount of the loss can be reasonably estimated. The reasonably estimable period for our long-term asbestos liability is 10 years, which we determine in consultation with a third-party firm with expertise in estimating asbestos liability and is due to the inherent uncertainties in the tort litigation system. This estimate is based upon many factors, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims, and is assessed in consultation with the third-party firm. Based on an assessment of these factors during the fourth quarters of 2024 and 2023 (Predecessor), we increased the accrual for asbestos matters by $57 million and $23 million, respectively, which were recorded as charges in “Restructuring, transaction-related items, and other corporate matters” on the Consolidated Statements of Operations. The increased accrual in each year was primarily the result of a lower-than-expected rate of decline in new claims. No adjustment to the accrual was required as of December 31, 2025. While we believe that our accruals for these matters are adequate, there can be no assurance that circumstances will not change in future periods and, as a result, our actual liabilities may be higher or lower than our accrual.\n\n19) SUPPLEMENTAL FINANCIAL INFORMATION\n\nThe following table presents the components of “Other items, net” on the Consolidated Statements of Operations.\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nPension and postretirement benefit costs$(35)$(80)$(139)$(153)\n\nForeign exchange losses(5)(11)(47)(66)\n\nOther1 (1)4 3 \n\nOther items, net$(39)$(92)$(182)$(216)\n\nSupplemental Cash Flow Information\n\nSuccessorPredecessor\n\nPeriod From August 7 - December 31,Period From January 1 - August 6,Year Ended December 31,\n\n2025202520242023\n\nCash paid for interest$296 $524 $833 $901 \n\nCash paid for income taxes:\n\nContinued operations$70 $201 $184 $22 \n\nDiscontinued operations— — — 85 \n\nTotal cash paid for income taxes$70 $201 $184 $107 \n\nThe cash balance on August 6, 2025 (Predecessor) was $2.46 billion. The cash balance on August 7, 2025 (Successor) was $3.85 billion. The difference reflects the proceeds received from the PIPE Transaction (see Note 1) and cash received from Skydance’s opening balance sheet, offset by cash paid for transaction-related costs incurred prior to the Closing Date.\n\nIn connection with the closing of the Transactions, on August 7, 2025 (Successor), borrowings outstanding of $720 million under Skydance’s revolving credit facility were repaid in full.\n\nII-128\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)\n\n(Tabular dollars in millions, except per share amounts)\n\nDiscontinued Operations (Predecessor)\n\nOn October 30, 2023, we completed the sale of Simon & Schuster to affiliates of Kohlberg Kravis Roberts & Co. for $1.62 billion. As a result, we recognized a pretax gain during the fourth quarter of 2023 of $695 million. During 2024, as a result of working capital adjustments we recorded additional pretax gains on the sale totaling $19 million ($14 million, net of tax).\n\nThe following table sets forth details of net earnings from discontinued operations for the year ended December 31, 2023, which primarily relates to Simon & Schuster.\n\nYear Ended December 31, 2023\nSimon & Schuster\nOther (a)\nTotal\n\nRevenues$958 $— $958 \n\nCosts and expenses:\n\nOperating 580 (12)568 \n\nSelling, general and administrative 149 — 149 \n\nRestructuring charges2 — 2 \n\nTotal costs and expenses731 (12)719 \n\nOperating income227 12 239 \n\nOther items, net(9)— (9)\n\nEarnings from discontinued operations218 12 230 \n\nBenefit from (provision for) income taxes12 (3)9 \n\nEarnings from discontinued operations, net of tax230 9 239 \n\nGain on sale (net of tax of $258 million) (b)\n437 — 437 \n\nNet earnings from discontinued operations, net of tax$667 $9 $676 \n\n(a) Primarily relates to indemnification obligations for leases associated with the previously discontinued operations of Famous Players Inc.\n\n(b) The tax provision on the gain on sale differs from the amount that would be expected at the U.S. federal statutory income tax rate primarily because the goodwill was not deductible for tax purposes.\n\nII-129\n\nPARAMOUNT SKYDANCE CORPORATION AND SUBSIDIARIES\n\n SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS\n\n(Tabular dollars in millions)\n\nCol. ACol. BCol. CCol. DCol. E\n\nDescriptionBalance at Beginning of PeriodCharged to Expenses and Other AccountsDeductionsBalance at End of Period\n\nAllowance for doubtful accounts:\n\nPeriod from August 7 - December 31, 2025 (Successor)$— \n(a)\n$10 $— $10 \n\nPeriod from January 1 - August 6, 2025 (Predecessor)$125 $6 $35 $96 \n\nYear ended December 31, 2024 (Predecessor)$120 $39 $34 $125 \n\nYear ended December 31, 2023 (Predecessor)$111 $26 $17 $120 \n\nValuation allowance on deferred tax assets:\n\nPeriod from August 7 - December 31, 2025 (Successor)$582 $49 $6 $625 \n\nPeriod from January 1 - August 6, 2025 (Predecessor)$655 $45 $118 $582 \n\nYear ended December 31, 2024 (Predecessor)$498 $198 $41 $655 \n\nYear ended December 31, 2023 (Predecessor)$488 $20 $10 $498 \n\n(a) On August 7, 2025, the allowance for doubtful accounts was reversed as a result of the adjustment of accounts receivable to fair value. See Note 2 to the consolidated financial statements.\n\nF-1"}