Open the filing on EDGARForward-looking statements notice
Fellow shareholders, To leverage our assets and capitalize on our strengths, we are organized into three segments: Robbie premiering in June, and a return to Middle-earth with The Lord of the Rings: The Hunt As we work toward a fully unified offering, we will phase in changes based on consumer Skydance TV Transformation Program We are confident in achieving these savings, drawing on our playbook from Paramount. That Q3 Results and Outlook Paramount Skydance Q3’26 Skydance Outlook Closing Cautionary Note Concerning Forward-Looking Statements presently unknown third party; risks associated with our status as a “controlled company” SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES Skydance Studios, Skydance Direct-to-Consumer, and Skydance TV. for Gollum in December. feedback so we can continue to drive healthy financial growth through the transition. During program is on track to achieve over $2.7 billion in run-rate efficiencies by the end of 2026. under New York Stock Exchange rules, including our exemption from certain corporate Financial Statement Presentation SKYDANCE CORPORATION AND SUBSIDIARIES SKYDANCE CORPORATION AND SUBSIDIARIES SKYDANCE CORPORATION AND SUBSIDIARIES SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL MEASURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES SUPPLEMENTAL DISCLOSURES Skydance TV brings together broadcast and cable networks, underpinned by a leading In Q3, total revenue of $7.0 billion increased 5% versus revenue of $6.7 billion in Q3'25 for We will provide our full-year outlook for 2027 during our Q4 2026 earnings when we will share We came together to build something bigger, bolder and better, with the stories, the REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) We expect to achieve at least $6 billion in run-rate synergies, net of reinvestment across our It has been just over a month since we launched the combined company, Skydance, and the Q3, Paramount+ revenue was up 21% - with engagement up over 20% year-over-year - and We’ve raised its target to more than $3 billion, over 50% above our initial 2024 goal, as we Our Q3 financial highlights below are for Paramount Skydance and exclude WBD, as the This communication contains both historical and forward-looking statements, including governance requirements; risks associated with the lack of voting rights of our Class B
REGARDING NON-GAAP FINANCIAL MEASURES (Continued) (Unaudited; in millions, except per share amounts)
portfolio of live news and sports programming, serving audiences in 200+ countries and Paramount Skydance, led by growth in Studios and DTC revenues, partially offset by a decline our full year financial results. technology and the scale to win. We’ll move quickly over the coming months and share more (Unaudited; in millions) (Unaudited; in millions) (Unaudited; in millions) (Unaudited; in millions) On August 7, 2025, Paramount Global and Skydance Media, LLC (“Skydance Media”) became REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) REGARDING NON-GAAP FINANCIAL MEASURES (Continued) CONSOLIDATED STATEMENTS OF OPERATIONS CONSOLIDATED BALANCE SHEETS CONSOLIDATED STATEMENTS OF CASH FLOWS cost structure within three years. More than 20 workstreams are already underway, as we energy across our organization is unmistakable. We came together with a clear mission to Skydance Studios To leverage our scale and at the same time continue to strengthen quality and talent pro forma DTC revenue growth including WBD was 15% year-over-year. We expect to achieve identified additional broad-based opportunities across the business. Year-to-date, we’ve acquisition closed after the end of Q3. Starting in Q4, we will be reporting Skydance results on statements related to our future financial results and performance (including our expectations common stock; risks that anti-takeover provisions in our amended and restated certificate of (Unaudited; in millions, except per share amounts) November 9, 2026 territories. Our offering spans CBS and more than 50 cable networks, among them MTV, in TV Media. Operating income was $368 million (5.2% margin) including $187 million of with investors, partners and consumers at an Investor Day in the first half of 2027. There is subsidiaries of Paramount Skydance Corporation, pursuant to a transaction agreement (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) (Unaudited; in millions) (Unaudited; in millions, except per share amounts) (Unaudited; in millions, except per share amounts) (Unaudited; in millions) evaluate and rightsize every aspect of our organization and cost structure. But this is more build the next generation media and entertainment company powered by creativity and relationships, our motion picture group is now integrated under one leadership team, while strong top-line growth in our streaming business in Q4 2026 and in 2027, as well as expand realized over $1 billion in run-rate efficiencies, and we expect to realize the remainder in a consolidated basis. Forward looking commentary below reflects our current expectations for for the fourth quarter of 2026 and for 2027, Paramount Skydance's prior standalone 2026 incorporation (“Charter”) and amended and restated bylaws, and under Delaware law could Comedy Central, Nickelodeon and BET, and WBD’s CNN, TNT, TBS, HGTV, Food Network and restructuring and transaction-related costs. Adjusted EBITDA was $1.0 billion, a 14.2% Going forward, we will provide guidance on an annual basis, as we prioritize long-term value still a lot to work through, but our vision is clear, and we are steadfast in our operational goals TV Media entered into on July 7, 2024 (the transactions contemplated by the Transaction Agreement, Adjusted EBITDA (defined below), Adjusted earnings before income taxes, adjusted Direct-to-Consumer Beginning in 2026, we transitioned our reporting structure into three new segments: Studios/Filmed Entertainment Skydance Studios include our motion picture and television production businesses. Our motion than cutting costs: it is a tech-forward transformation that will make us more efficient and technology. Our teams are bringing discipline and urgency and early progress is already each studio has its own dedicated creative teams. margins over that same period as we harness the reach of our global platform and verticalized 2027, which is incremental to our Skydance program. Skydance, the combined company. outlook, and our medium-term financial outlook through 2030), potential achievements and deter, delay, or prevent a change of control; risks that exclusive forum provisions in our Highlights Discovery. TNT, TBS, TLC, Food Network and CNN were five of the top 10 ad-supported cable margin, with profitability stable year-over-year. creation, which we believe will be more consistent with our strategic approach. We will and financial commitments. We are confident in our plan, excited for what’s ahead and just the “Skydance Transactions”). The following tables reconcile the adjusted measures to their most directly comparable Three Months Ended September 30, 2025 Nine Months Ended September 30, 2026 Nine Months Ended September 30, 2025 Free Cash Flow provision for income taxes, adjusted net earnings attributable to Parent, and adjusted Studios, Direct-to-Consumer, and TV Media and updated our segment expense allocations SuccessorPredecessorSuccessorPredecessorThree Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,Nine Months Ended September 30,Period From August 7 - September 30,Period From January 1 - August 6,202620252025202620252025Revenues$7,025$4,121$2,581$21,285$4,121$16,622Costs and expenses: Operating4,6562,6411,70213,9542,64111,287Selling, general and administrative1,4438255824,2978253,526Depreciation and amortization371226291,097226204Impairment charges - - - - - 157Restructuring and transaction- related items187185188478185454Total costs and expenses6,6573,8772,50119,8263,87715,628Gain on dispositions - - - - - 35Operating income368244801,4592441,029Interest expense(260)(138)(85)(753)(138)(516)Interest income312413982483Net gain on derivatives514 - - 502 - - Other items, net(27)(8)(16)(73)(8)(92)Earnings (loss) before income taxes and equity in loss of investee companies626122(8)1,233122504(Provision for) benefit from income taxes(464)(85)229(739)(85)79Equity in loss of investee companies, net of tax(64)(33)(31)(180)(33)(171)Net earnings (Parent and noncontrolling interests)9841903144412Net earnings attributable to noncontrolling interests(25)(17)(434)(32)(17)(447)Net earnings (loss) attributable to Parent$73$(13)$(244)$282$(13)$(35)Basic net earnings (loss) per common share attributable to Parent$.07$(.01)$(.36)$.25$(.01)$(.05)Diluted net earnings (loss) per common share attributable to Parent$.06$(.01)$(.36)$.25$(.01)$(.05)Weighted average number of common shares outstanding: Basic1,1201,0986751,1161,098674Diluted1,1251,0986751,1211,098674 AtAtSeptember 30, 2026December 31, 2025ASSETSCurrent Assets:Cash and cash equivalents$1,377$3,274Receivables, net6,0986,615Programming and other inventory2,0241,461Prepaid expenses and other current assets2,3361,970Total current assets11,83513,320Property and equipment, net2,2542,195Programming and other inventory15,88115,028Goodwill2,0341,600Intangible assets, net5,3396,238Operating lease assets1,0071,126Deferred income tax assets, net1,2311,282Advance consideration for WBD acquisition2,800 - Other assets2,5892,553Total Assets$44,970$43,342LIABILITIES AND STOCKHOLDERS’ EQUITYCurrent Liabilities:Accounts payable$663$906Accrued expenses2,2802,077Participants’ share and royalties payable2,7322,646Accrued programming and production costs1,7931,832Deferred revenues1,4531,355Debt668433Other current liabilities1,2041,350Total current liabilities10,79310,599Long-term debt14,37613,225Participants’ share and royalties payable1,4031,361Pension and postretirement benefit obligations1,1581,185Deferred income tax liabilities, net19885Operating lease liabilities 1,0291,150Programming obligations503400Other liabilities2,4782,450Commitments and contingenciesParent stockholders’ equity:Class A Common Stock, par value $.001 per share; 55 shares authorized; 32 (2026 and 2025) shares issued - - Class B Common Stock, par value $.001 per share; 7,000 (2026) and 5,500 (2025) shares authorized; 1,092 (2026) and 1,076 (2025) shares issued11Additional paid-in capital13,32913,386Accumulated deficit(1,471)(1,753)Accumulated other comprehensive income11059Total Parent stockholders’ equity11,96911,693Noncontrolling interests1,0631,194Total Equity13,03212,887Total Liabilities and Equity$44,970$43,342 SuccessorPredecessorNine Months Ended September 30,Period From August 7 - September 30,Period From January 1 - August 6,202620252025Operating Activities:Net earnings (Parent and noncontrolling interests)$314$4$412Adjustments to reconcile net earnings to net cash flow provided by operating activities:Depreciation and amortization1,097226204Impairment charges - - 157Deferred tax provision (benefit) 26027(401)Stock-based compensation26259113Gain on dispositions - - (35)Net gain on derivatives(502) - - Equity in loss of investee companies, net of tax and distributions18233179Change in assets and liabilities(986)(81)(465)Net cash flow provided by operating activities627268164Investing Activities:Investments (224)(1)(205)Capital expenditures(242)(46)(134)Advance consideration for WBD acquisition(2,800) - - Proceeds from dispositions19566Other investing activities(6) - (3)Net cash flow used for investing activities(3,253)(42)(276)Financing Activities:Borrowings under credit facility3,595 - - Repayment of credit facility borrowings(1,930) - - Repayment of notes and debentures(347) - - Repayment of Skydance Media credit facility - (720) - Dividends paid on common stock(174)(33)(101)Payment of payroll taxes in lieu of issuing shares for stock-based compensation(122)(63)(26)Payments to noncontrolling interests(190)(2)(32)Other financing activities(70)(3) - Net cash flow provided by (used for) financing activities762(821)(159)Effect of exchange rate changes on cash and cash equivalents(33)770Net decrease in cash and cash equivalents(1,897)(588)(201)Cash and cash equivalents at beginning of period3,2743,8512,661Cash and cash equivalents at end of period$1,377$3,263$2,460 picture group brings together two of the most iconic studios in Hollywood’s history, Warner agile, create flexibility to reinvest for long-term growth, and establish a healthy margin profile Three Months Ended September 30, 2026 Nine Months Ended September 30, 2026 and 2025 evident. studio system. Accelerating our integrated direct-to-consumer business is a key priority and transactions (including in connection with our completed merger with WBD, such as the Charter could limit a stockholder’s choice of forum for certain claims and discourage lawsuits Our TV Media segment consists of our (1) broadcast operations - the CBS Television Our Direct-to-Consumer segment consists of our portfolio of domestic and international pay Our Studios segment consists of our television and film studio operations, including CBS networks among adults 25-54 last year. We distribute marquee sports, including the NFL and, continue to provide quarterly updates, including certain forward-looking commentary where getting started. financial measures in accordance with U.S. GAAP. The tax impacts on the items identified as diluted EPS, which are measures of performance not calculated in accordance with to better reflect how we operate and make cost decisions across the business. As a result of Bros. Pictures and Paramount Pictures, as well as the highly acclaimed New Line Cinema, DC and free cash flow trajectory. Our Television Studios achieved another strong quarter, with hits across broadcast, streaming important growth engine, and with Paramount+ and HBO Max together, we have the global It is early, but we have strong confidence in achieving at least $6 billion in run-rate synergies A summary and discussion of Paramount Skydance’s Q3 results are below. expected amount, timing and phasing of run-rate synergies, and our net leverage and against our directors and officers; risks that corporate opportunity provisions in our Charter Network, our domestic broadcast television network; CBS Stations, our owned television SuccessorPeriod From August 7 - September 30, 2025Earnings Before Income TaxesProvision for Income TaxesNet Earnings (Loss) Attributable to ParentDiluted EPS Reported (GAAP)$122$(85)$(13)$(.01)Items affecting comparability:Restructuring charges (a)185(30)155.13Discrete tax items - (4)(4) - Adjusted (Non-GAAP)$307$(119)$138$.12 SuccessorNine Months Ended September 30, 2026Earnings Before Income Taxes Provision for Income TaxesNet Earnings Attributable to ParentDiluted EPS Reported (GAAP)$1,233$(739)$282$.25Items affecting comparability:Restructuring charges (a)124(26)98.09Transaction-related items (b)354(29)325.29Discrete tax items (c) - 267267.24Adjusted (Non-GAAP)$1,711$(527)$972$.87 SuccessorPeriod From August 7 - September 30, 2025Earnings Before Income TaxesProvision for Income TaxesNet Earnings (Loss) Attributable to ParentDiluted EPSReported (GAAP)$122$(85)$(13)$(.01)Items affecting comparability:Restructuring charges (a)185(30)155.13Discrete tax items - (4)(4) - Adjusted (Non-GAAP)$307$(119)$138$.12 Free cash flow is a non-GAAP financial measure. Free cash flow reflects our net cash flow and free streaming services, including Paramount+ and Pluto TV, as well as our domestic •Paramount Skydance Q3 (excludes WBD) Studios, Paramount Television Studios, Nickelodeon Animation, Paramount Pictures, SuccessorThree Months Ended September 30, 2026Earnings Before Income Taxes Provision for Income TaxesNet Earnings Attributable to ParentDiluted EPS Reported (GAAP)$626$(464)$73$.06Items affecting comparability:Restructuring charges (a)89(21)68.06Transaction-related items (b)98(8)90.08Discrete tax items (c) - 275275.25Adjusted (Non-GAAP)$813$(218)$506$.45 SuccessorPredecessorNine Months Ended September 30,Period From August 7 - September 30,Period From January 1 - August 6,202620252025Net earnings (loss) attributable to Parent (GAAP)$282$(13)$(35)Net earnings attributable to noncontrolling interests3217447Equity in loss of investee companies, net of tax18033171Provision for (benefit from) income taxes73985(79)Other items, net73892Net gain on derivatives(502) - - Interest expense, net655114433Gain on dispositions (a) - - (35)Transaction-related items (a)354 - 199Restructuring charges (a)124185255Impairment charges (a) - - 157Stock-based compensation (b)2262999Depreciation and amortization 1,097226204Adjusted EBITDA (Non-GAAP)$3,260$684$1,908 This is a demanding time for our industry, and we are starting from a strong point as the via Eurosport, the Olympics in Europe, and we provide trusted news through CBS News and Direct-to-Consumer applicable, which will give investors visibility into our near-term progress of the business. As a result of the new accounting basis established for Paramount Global’s net assets upon affecting comparability in the tables below have been calculated using the tax rate accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) the new accounting basis established for Paramount Global’s net assets upon the closing of Studios and Skydance Animation. Our television group includes well-established industry and cable, for our own platforms and for third-party partners. In Q3, 11 of the top 20 scale to compete and win. within three years for Skydance, with 30% realized in year one and 70% through year two. investment-grade credit metrics targets) and their expected benefits, our strategic goals and could permit certain persons to pursue competitive opportunities that might otherwise be stations; and our international free-to-air networks, including Network 10 and Channel 5; provided by operating activities less capital expenditures. We deduct capital expenditures premium cable network, Paramount+ with Showtime. For the Predecessor period, the Paramount Animation, and Miramax, as well as Skydance Animation, Film, and Television, second largest media distributor by share of total U.S. TV time after YouTube, per Nielsen. But CNN. Skydance TV is a highly profitable, cash-generative business, anchored by the enduring the closing of the Skydance Transactions, the results of operations and cash flows are not applicable to each item. (together, the “adjusted measures”) exclude certain items identified as affecting the Skydance Transactions (see Financial Statement Presentation), the GAAP basis for our leaders Warner Bros. Television Group, CBS Studios, Paramount Television Studios and By combining two global streaming services, two film and TV studio groups, two television streaming programs were owned and produced by our studios. CBS Studios continues to drive We’ll share milestones as we go and measure success by our ability to operate more plans, and industry trends and developments. All statements that are not statements of available to us; risks associated with our holding company structure, including our In millions, exceptper share amountsPredecessorSuccessor7/1/25 -8/7/25 -8/6/259/30/25Q4’25Q1’26Q2’26Q3’26Total Revenue$2,581$4,121$8,148$7,347$6,913$7,025Y/Y Growth (%)2%2%1%5%Operating Income (Loss)$80$244$(339)$616$475$368Operating Margin (%)3.1%5.9%(4.2)%8.4%6.9%5.2%Net Earnings (Loss)$(244)$(13)$(573)$168$41$73Diluted EPS (1)$(.36)$(.01)$(.52)$.15$.04$.06Adjusted EBITDA (2)$313$684$674$1,161$1,099$1,000Y/Y Growth (%)42%59%27%0.3%Adj. EBITDA Margin (%)12.1%16.6%8.3%15.8%15.9%14.2%Net Cash (Used For) Provided by Operating Activities$(175)$268$217$185$319$123Free Cash Flow (2)$(207)$222$101$96$258$31Shares Outstanding (3)6751,0981,1041,1181,1201,125Paramount+ Revenue$709$1,060$1,837$1,974$2,061$2,134Y/Y Growth (%)17%17%16%21%Paramount+ Subscribers77.978.979.681.682.2Y/Y Growth (%)4%2%6%6% •DTC revenue growth improved to 11% year-over-year to $2.5 billion, led by (2) domestic basic cable networks, including MTV, Comedy Central, Paramount Network, ◦Paramount Skydance Q3 net earnings was $73 million and adj. EBITDA was $1.0 when we calculate free cash flow because investment in capital expenditures is a use of cash Direct-to-Consumer segment excluded Paramount+ with Showtime. Paramount Sports Entertainment and Paramount Games Studio. For the Predecessor period, audiences have more choices than ever, technology is reshaping how stories are made and strength of CBS, the crown jewel of U.S. broadcast television. Based on year-to-date results, Paramount Skydance as a standalone would remain on track comparable between the Successor and Predecessor periods. Accordingly, our consolidated comparability that are not part of our normal operations, including programming charges, segment information for the Predecessor period is based on our previous segments, Filmed Skydance Sports Entertainment. In addition, Skydance owns a deep library of more than portfolios, and overlapping corporate functions, we can reduce duplicative spend across an Sincerely,David EllisonYnon KreizChairman & CEOCo-CEOSkydanceSkydance CBS' network leadership, most recently highlighted by the successful debut of NCIS: New With the unmatched production capabilities of Paramount and Warner Bros., we expect to efficiently and grow margins. historical fact are, or may be deemed to be, forward-looking statements within the meaning of dependence on distributions from our subsidiaries to meet our tax obligations and other cash accelerating Paramount+ revenue growth of 21% year-over-year, reflecting subscriber The Smithsonian Channel, Nickelodeon, BET Media Group, CBS Sports Network, and billion, a 14% margin on revenue of $7.0 billion, which grew 5% year-over-year. that is directly related to our operations. Our net cash flow provided by operating activities is our Filmed Entertainment segment was most comparable to our new Studios segment and experienced, and the competition for attention is relentless. Legacy business models are being for our prior 2026 guidance, including achieving the high end of our prior profitability range at financial statements within our Form 10-Q for the third quarter of 2026 are presented in two impairment charges, restructuring charges, transaction-related items, other corporate Three Months Ended September 30, 2026 and 2025 Entertainment, Direct-to-Consumer, and TV Media. To provide information consistent with 15,000 films and hundreds of thousands of series hours, which we distribute on our own expense base of more than $50 billion. We have identified multi-billion dollar opportunities in York, the latest addition to television's #1 franchise. The series debuted in October as the provide a powerful combination of breadth and depth of content each year. And with at least the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our requirements; risks to our business, financial condition or results of operations as a result of growth of approximately 6% and ARPU growth of approximately 14% as our international extensions of certain of these brands; and (3) CBS Media Ventures, which Paramount remains on track for the high end of its 2026 profitability outlook at the most directly comparable U.S. GAAP financial measure. Three Months Ended September 30, 2026 and 2025 excluded studio operations related to our TV Media businesses, including CBS Studios and disrupted, and we see that as an opportunity. We are creative-first, audience-focused, tech- Our goal is to manage the combined portfolio to optimize long-term profitability and cash flow $3.9 billion. distinct periods. The periods prior to August 7, 2025 include only Paramount Global and are matters, gain (loss) on dispositions, gain (loss) from investments and discrete tax items, how management reviews results, this letter includes non-GAAP presentations in which the platforms and license to third parties. key areas, including non-labor and labor spend where we expect to deliver across these season’s #1 new broadcast series, drawing more than 10 million viewers, up 58% from last 30 theatrical releases annually, a new movie will arrive across our bundled services every two objectives, plans or goals are or may be forward-looking statements. These forward-looking the incurrence of substantial costs and indebtedness in connection with the WBD Merger; risks SuccessorPredecessorThree Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,202620252025Net earnings (loss) attributable to Parent (GAAP)$73$(13)$(244)Net earnings attributable to noncontrolling interests2517434Equity in loss of investee companies, net of tax643331Provision for (benefit from) income taxes46485(229)Other items, net27816Net gain on derivatives(514) - - Interest expense, net22911472Transaction-related items (a)98 - 175Restructuring charges (a)8918513Stock-based compensation (b)742916Depreciation and amortization 37122629Adjusted EBITDA (Non-GAAP) (c)$1,000$684$313 monetization improved in the quarter driven by previous price adjustments and produces and distributes first-run syndicated programming. TV Media also includes a $3.9 billion. Paramount Television Studios. forward, and globally scaled. We believe we have the right assets, the right capabilities and as the industry shifts toward streaming. To achieve that, we have established a unified identified as “Predecessor,” and the periods beginning on August 7, 2025 reflect Skydance each where applicable. We define Adjusted EBITDA as net earnings (loss) attributable to 2025 Predecessor amounts have been recast under the new segment presentation and areas: SuccessorPredecessorDirect-to-Consumer Supplemental Pro Forma Revenues (b)(Non-GAAP)Direct-to-Consumer (GAAP)Direct-to-Consumer(GAAP)Adjustments (a)Direct-to-Consumer(Non-GAAP)Three Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,Three Months Ended September 30,Pro FormaIncrease/(Decrease) (d)2026202520252025$%Advertising$542$300$179$ - $179$479$6313%Affiliate and subscription1,9681,043704407441,78718110Licensing - 1 - - - 1(1)(100)Revenues2,5101,34488340923$2,267$24311%Content costs1,32054641216428Advertising and marketing3121601146120Other 653329252(14)238Expenses2,2851,0357788786Adjusted EBITDA/OIBDA (c)$225$309$105$32$137 year’s time-period premiere (NCIS: Origins). This adds to the success of the NCIS franchise weeks, on average. statements reflect our current expectations concerning future results and events; can related to our ability to incur substantially more debt and our ability to meet the financial and accelerating advertising growth. As previously noted, we completed our integration of number of digital properties such as CBS News 24/7 for 24-hour news and CBS Sports HQ Management believes free cash flow provides investors with an important perspective on the the right strategy to win by executing on our three strategic goals: leadership structure across TV and DTC to ensure we fully align distribution, advertising sales, In Q4, we expect to see continued strong growth in DTC revenue, and consistent TV revenue Corporation and are identified as “Successor.” The presentation in this letter, the Parent before interest expense and income; (provision for) benefit from income taxes; other therefore constitute a non‑GAAP presentation. Reconciliations from the GAAP presentation Our goal is to establish Skydance as the premier global content engine and the home for the which after 24 years on air is still a top 5 show on streaming and broadcast and has generally be identified by the use of statements that include phrases such as “believe,” other covenants contained in the agreements governing our substantial indebtedness; risks
- Paramount+ revenue grew 21%, its fastest quarterly growth this year, with BET+ into Paramount+ in Q2 and realized a full quarter of impact in Q3, which along for sports news and analysis. For the Predecessor period, the TV Media segment also Three Months Ended September 30, 2026 and 2025
- Corporate overhead, real estate & facilities (2026 ~$8 billion): At least $2.2 cash available to us to service debt, pay dividends, make strategic acquisitions and and content sales as part of a holistic strategy. This will allow us to follow one globalized trends to prior quarters, adjusting for seasonality around politics and sports. And while we are accompanying financial statements, and supplemental disclosures of non-GAAP financial items; net gain on derivatives; equity in earnings (loss) of investee companies, net of tax; to this recast non-GAAP presentation are provided on the following pages. world’s leading storytellers. Our strategy is anchored by the strength of our franchises and generated $10 billion of lifetime revenues across platforms. Paramount Television Studios Great storytelling is the foundation of everything we do, and viewers are responding. Lioness “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or relating to our ability to deleverage the business in accordance with management’s targets, ARPU up approximately 14%. Studios revenue grew 23% and TV Media achieved with Showtime declines, amounted to a six-percentage-point headwind to total DTC included domestic and international television studio operations and the premium cable billion of cost reduction, by consolidating redundant back-office and corporate investments, maintain our capital assets, satisfy our tax obligations, and fund ongoing •Establish Skydance as the premier global content engine and the home for the commercial approach to maximize the full potential of our scale across TV and DTC. incredibly excited about the shape of the combined Studio business and our Paramount measures also reflect the distinction between the Successor and Predecessor periods. and depreciation and amortization, adjusted to exclude stock-based compensation expense quality of the content made by our world class studios, and we expect that demand for built on its momentum with three of the top four streaming original series in September: viewership grew 62% in its third season, and MobLand’s second installment became the other similar words or phrases; and involve known and unknown risks, uncertainties and other including risks arising from assumptions, uncertainties and contingencies that may affect our SuccessorPredecessorStudios Supplemental Pro Forma Revenues (b)(Non-GAAP)Studios (GAAP)Filmed Entertainment(GAAP)Adjustments (a)Studios(Non-GAAP)Three Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,Three Months Ended September 30,Pro FormaIncrease/(Decrease) (d)2026202520252025$%Theatrical$112$39$73$ - $73$112$ - - %Licensing and other1,3776952021853871,09428326Advertising741126117Revenues1,496738276186462$1,212$28423%Content costs977540131147278Advertising and marketing187571062108Other20312075378Expenses1,367717312152464Adjusted EBITDA/OIBDA (c)$129$21$(36)$34$(2) a 34% adj. EBITDA margin. growth in the quarter. network, Paramount+ with Showtime. functions, reducing management layers, using shared services, implementing a single operations and working capital needs. We believe the presentation of free cash flow is world’s leading storytellers. theatrical slate continues to perform, the near-term performance of the Warner Bros. film (which is a noncash expense that management does not consider to be part of our In addition, as described in Financial Statement Presentation, the presentation within this premium content and global franchises will continue to increase. Collectively, our studios have Reacher, Neagley and Lioness. biggest original series ever for Paramount+ in the UK and Ireland. DC’s Lanterns and House of factors that are difficult to predict and which may cause our actual results, performance or ability to reduce indebtedness; risks relating to management’s ability to execute on our ERP, scaling AI workflows, and shifting to lower-cost support functions. In addition, we relevant and useful for investors because it allows investors to evaluate the cash generated CBS is having another strong year and currently leads the new fall season with the #1 show slate in Q4, including films already released quarter-to-date, has underperformed. Based on Refer to Note 1 of our Form 10-Q for the third quarter of 2026 for additional information underlying operating performance) and certain items identified as affecting comparability letter reflects the distinction between the Successor and Predecessor periods. In order to •DTC adj. EBITDA was $225 million (9.0% margin), as we recognized higher costs from created approximately forty franchises that have generated at least $1 billion in revenue •Accelerate our integrated direct-to-consumer platform with the best content, the Dragon Season 3 rank among HBO Max’s strongest launches and returning seasons ever, achievements to be different from any future results, performance or achievements expressed strategic plan and improve our financial profile and cash flows from operations; risks relating •Skydance (combined company) Three Months Ended September 30, 2026 and 2025 are rationalizing our office footprint (while keeping our production lots). from our underlying operations in a manner similar to the method used by management. on television, all five of the top series and seven of the top 10, and 11 shows are up year over our current forecasts for the rest of the year for Studios, we expect slower revenue growth regarding the new accounting basis established in connection with the Skydance Transactions. that are not part of our normal operations. help investors view our results in a manner consistent with our management we are planned investment in our programming schedule in the quarter, including the UFC and across platforms over the past 15 years and continue to resonate with audiences today. We leading-edge technology, and a superior fan experience. The ambition of our Studios business is to create and tell great stories for audiences wherever averaging 22 million and 42 million global viewers, respectively. We are excited for our or implied by these statements. These risks, uncertainties and other factors include, among to any capital or other financing we may have to raise in order to reduce our indebtedness Free cash flow is one of the quantitative performance metrics used in determining our PredecessorPeriod From January 1 - August 6, 2025Earnings Before Income TaxesBenefit from (Provision for) Income TaxesNet Earnings (Loss) Attributable to ParentDiluted EPSReported (GAAP)$504$79$(35)$(.05)Items affecting comparability:Impairment charges (b)157(39)118.17Restructuring charges (a)255(61)194.29Transaction-related items (c)199(31)168.25Gain on dispositions (d)(35)2(33)(.05)Discrete tax items - (64)(64)(.10)Adjusted (Non-GAAP)$1,080$(114)$348$.51 year. Excluding sports, CBS is the #1 broadcast network in primetime and up 18% year-over- and a profit impact of up to $200 million vs. prior expectations for Q4. including the below supplemental presentation of pro forma revenue, which reflects the ongoing investment in Originals. are now one of the largest producers and suppliers of original live-action TV content to both PredecessorPeriod From July 1 - August 6, 2025Earnings (Loss) Before Income TaxesBenefit from (Provision for) Income TaxesNet Loss Attributable to ParentDiluted EPS Reported (GAAP)$(8)$229$(244)$(.36)Items affecting comparability:Restructuring charges13(3)10.02Transaction-related items (b)175(30)145.21Discrete tax items (c) - (73)(73)(.11)Adjusted (Non-GAAP)$180$123$(162)$(.24) •Marketing (2026 ~$5 billion): At least $1.0 billion in savings by streamlining and ◦Completed the acquisition of Warner Bros. Discovery on October 6, 2026. they watch: in theaters, on broadcast and cable, and on streaming, across our distribution upcoming slate, which we expect will carry momentum through year end, highlighted by the others: risks that the expected benefits, synergies and opportunities of the WBD Merger may following the WBD Merger; risks of reduced ownership and economic interest by our previous (a) Reflects severance costs associated with changes in management and aligning the business around SuccessorPredecessorTV Media Supplemental Pro Forma Revenues (b)(Non-GAAP)TV Media (GAAP)TV Media(GAAP)Adjustments (a)TV Media(Non-GAAP)Three Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,Three Months Ended September 30,Pro FormaIncrease/(Decrease) (d)2026202520252025$%Advertising$1,344$977$485$(1)$484$1,461$(117)(8)%Affiliate and subscription1,553984696(40)6561,640(87)(5)Licensing and other12781247(189)58139(12)(9)Revenues3,0242,0421,428(230)1,198$3,240$(216)(7)%Content costs1,115903657(153)504Advertising and marketing735259(7)52Other 808527430(73)357Expenses1,9961,4821,146(233)913Adjusted EBITDA/OIBDA (c)$1,028$560$282$3$285 (a) Reflects severance costs associated with changes in management and aligning the business around •Optimize our highly profitable TV portfolio, anchored by CBS in the U.S., to reach annual incentive compensation awards. In addition, free cash flow is a primary measure We use these adjusted measures to, among other things, evaluate our operating year among total viewers. Live sports add to that strength: the NFL on CBS is posting its Subsequent Event inclusion of Skydance Media revenues after the elimination of intercompany revenues from our platforms and third-parties in the world. optimizing our enterprise-wide spend, as well as strategic utilization of our expanded our strategic priorities following the Skydance Transactions, as well as exit costs associated with a platforms and third-party partners. With the creative talent, production scale and global premiere of the HBO Original Series Harry Potter and the Philosopher’s Stone on Christmas not be realized or may take longer to realize than expected; risks and costs associated with stockholders as a result of the WBD Merger; risks related to our Warrants; and other factors our strategic priorities following the Skydance Transactions, as well as exit costs associated with a audiences globally across every entertainment vertical. Studios used externally by our investors, analysts and industry peers for purposes of valuation and performance. These measures are among the primary measures used by management for highest viewership through Week 8 on record, averaging 19.6 million viewers, up 5% from Looking ahead to 2027, we expect continued strong growth in DTC revenue, higher Studios contract termination. Paramount Global in the Predecessor period from July 1, 2025-August 6, 2025 and the ◦Targeting at least $6 billion of annualized run-rate synergies within three years, global portfolio to promote our key projects and initiatives. This includes unifying media contract termination. franchises, we are on track to release over 30 theatrical films and produce more than 180 Day. the integration of the business of WBD, including our ability to integrate successfully and to described in our news releases and filings with the Securities and Exchange Commission, On October 6, 2026, we completed the acquisition of Warner Bros. Discovery, Inc. (“WBD”) comparison of our operating performance to other companies in our industry. planning and forecasting of future periods, and they are important indicators of our last year’s record-setting pace. It has also brought us the season’s most-watched game on revenue, and an increase in pro forma total company adj. EBITDA year-over-year based on Paramount Pictures continues to perform well and is expected to double its output in 2026 with progress underway across more than 20 workstreams. (b) Principally reflects legal, advisory, and other professional fees associated with the planned WBD planning and buying across business units to eliminate audience overlap, coordinate (b) Principally reflects legal, advisory and other professional fees associated with the planned WBD Merger television and streaming series in 2027. achieve anticipated synergies and financial targets; risks that we may not achieve the including but not limited to our most recent Annual Report on Form 10-K and our reports on •Studios revenue increased 23% year-over-year to $1.5 billion, reflecting a strong combination of the Predecessor and Successor periods during the third quarter of 2025. and changed our name from Paramount Skydance Corporation to Skydance Corporation. To achieve all of this, we will: operational strength and business performance. In addition, we use Adjusted EBITDA to, any network and the most-watched international NFL game ever. underlying growth and the ramp of our $6 billion-plus synergies program. 2027 is the first Merger and related integration. and related integration. with 15 releases. In the third quarter, PAW Patrol: The Dino Movie grossed more than $160 cross-BU campaigns, and maximize media efficiency at scale. Alongside that investment in programming, we are enhancing how audiences discover and expected run-rate synergies or other financial goals within the expected timeframes or at all; Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do quarter for secondary market licensing and content produced for third parties. References herein to “Skydance,” “Skydance Corporation,” the “Company,” "we," "us" and As free cash flow is not a measure calculated in accordance with U.S. GAAP, free cash flow among other things, value prospective acquisitions. We believe these measures are relevant step in working towards achieving our medium-term financial goals. ◦Executing our operational plan to reduce net leverage ratio to 3.0x by the end of (c) Primarily attributable to the establishment of a reserve for uncertain tax positions. million worldwide and drove revenue across multiple lines of business, including consumer (c) Primarily attributable to the establishment of a reserve for uncertain tax positions.
- Win in storytelling by leveraging our creative capabilities, talent relationships, Revenues Skydance Direct-to-Consumer enjoy our content. We’ve largely completed phase one of the tech convergence, moving Pluto risks related to the commitments we made under the states consent decree; potential not currently view as material or that are not necessarily known. The forward-looking "our" refer, prior to such date, to Paramount Skydance Corporation, and beginning on such
- Technology (2026 ~$4 billion): At least $1.4 billion reduction to our annual spend should not be considered in isolation of, or as a substitute for, either net cash flow provided and useful for investors because they allow investors to view our performance in a manner Our scale in sports is also a competitive advantage. With CBS Sports and TNT Sports under
- Studios adj. EBITDA was $129 million (8.6% margin), reflecting the increase in 2029 and reach investment-grade credit metrics. products. David Ayer’s original film Heart of the Beast, starring Brad Pitt, has grossed more production prowess and expansive library of iconic IP. TV onto the unified Paramount+ platform across all major devices. It is the largest technology disruption to business operations and relationships, including our and WBD’s business and statements included in this communication are made only as of the date hereof, and we do date to Skydance Corporation, in each case with its consolidated subsidiaries, unless the by unifying our enterprise tech stack, streaming ecosystem, and broadcast architecture, by operating activities as a measure of liquidity or net earnings as a measure of operating Three Months Ended September 30, 2026 and 2025 consistent with the method used by our management; and because they exclude items that one roof, we have a premium sports offering that includes NFL, NHL, UFC, MLB, NASCAR, Capital Structure & Capital Allocation licensing revenues. than $180 million globally. The Direct-to-Consumer segment encompasses Paramount+, HBO, HBO Max, Discovery+, investment in Pluto TV’s history, and it is already improving the user experience with better commercial relationships, as a result of the WBD Merger and ongoing integration; the risk of not undertake any obligation to publicly update any forward-looking statements to reflect context otherwise requires. WBD will be included in our results beginning on October 6, 2026 merging parallel technology functions, leveraging AI coding tools, and integrating •Build the most technologically capable media company with a unified technology performance. Free cash flow, as we calculate it, may not be comparable to similarly titled are not representative of our normal operations, they provide a clearer perspective on March Madness, as well as the Olympics in Europe and the Champions League in key markets.
- Planning to launch a bundled offering of HBO Max and Paramount+ in early and Pluto TV, representing a globally scaled DTC business available in over 130 markets. personalization and on-demand offerings that serve both consumers and advertisers. Running stockholder litigation and other litigation relating to the WBD Merger, including litigation that subsequent events or circumstances. SuccessorPredecessorSupplemental Pro Forma Revenues (a)Three Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,Three Months Ended September 30,Pro FormaIncrease/(Decrease)2026202520252025$%Revenues by Type:Advertising $1,889$1,280$664$1,944$(55)(3)%Affiliate and subscription3,5212,0271,4003,427943Theatrical1123973112 - - Licensing and other1,5037754441,23127222Total Revenues$7,025$4,121$2,581$6,714$3115% Paramount Skydance ended the quarter with $1.4 billion in cash and cash equivalents and and as a result is not reflected in the periods presented in the following pages. TV Media platforms and systems. platform spanning streaming, live and linear that improves the user experience and measures employed by other companies. underlying performance, and make it easier for investors, analysts and peers to compare Advertisers can purchase media across the sports portfolio through a single partner spanning 2027. In the final two months of the year, we have six film releases across Paramount Pictures and Paramount+, HBO, and HBO Max combined reach 203 million aggregate subscribers the services on a unified backend system lowers our cost to operate, speeds up product could result in the payment of damages; risks related to our streaming business; the adverse $15.0 billion in gross debt, prior to the acquisition. Free cash flow was $31 million, inclusive of drives efficiencies. (a) See notes on the following tables for additional information on items affecting comparability. our operating performance to other companies in the industry and to compare our results broadcast, cable, and streaming. Sports advertising commitments have risen over 20% year-
- Procurement and vendor management (2026 ~$9 billion): At least $1.4 billion in Warner Bros. Pictures, starting with The Cat in the Hat, which opened last Friday. Ebenezer, worldwide, and Pluto TV has approximately 75 million monthly active users. We provide •TV Media revenue declined 7% year-over-year to $3.0 billion. Advertising revenue was development, and gives us shared personalization and monetization capabilities across our impact on our advertising revenues as a result of changes in consumer behavior, advertising $174 million of restructuring, transaction-related, and transformation costs. On October 6, we The following table presents a reconciliation of our net cash flow provided by operating (b) For the nine months ended September 30, 2026 (Successor) and the period from August 7 - September 30, 2025
- Skydance produced 7 of the top 10 most watched series across linear and across reporting periods. over-year for current and upcoming sports seasons leading into 2027. savings by optimizing third-party spend across vendors spanning hundreds of services. starring Johnny Depp, arrives in theaters this Friday, followed by Focker-in-Law on November consumers with choice across our premium and standard ad-free, ad-lite, and free ad- down 8% year-over-year, including an approximate three-percentage-point headwind
- Lead in a crowded market by using our scale, assets and global reach to drive free and subscription offerings. market conditions and deficiencies in audience measurement; risks related to operating in completed the Warner Bros. Discovery acquisition funded with $47 billion of new equity and (Successor), stock-based compensation expense of $36 million and $30 million, respectively, is included in activities to free cash flow. streaming and the top 4 original titles on streaming. Across Paramount and Our combined purchasing levels will give us economies of scale by consolidating 25, with Paramount Pictures distributing internationally. On December 18, audiences return to supported product offerings. from the absence of Telefe and Chilevisión, which were sold in October 2025 and transformation and growth. (a) See notes on the following tables for additional information on items affecting comparability. “Restructuring and transaction-related items.” For the Predecessor period from January 1 - August 6, 2025, stock- highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as $57 billion of new secured debt. Gross debt following closing and related debt activity was $87 Warner Bros. platforms, Skydance is the second largest media distributor by Because the adjusted measures are measures of performance not calculated in accordance U.S. pay TV subscriber declines moderated sequentially in the third quarter as genre-based (a) Restructuring charges during the Successor period were comprised of severance costs, principally based compensation expense of $14 million is included in “Restructuring and transaction-related items.” Note: (1) Diluted EPS from continuing operations attributable to predecessor or successor; purchasing decisions into one centralized group. Arrakis for Dune: Part Three. The Angry Birds Movie 3 premieres December 23, followed on January 2026, respectively, offset by higher political advertising revenues. Affiliate (b) For the three months ended September 30, 2026 (Successor) and the period from August 7 - September 30, 2025 At the same time, we are expanding Pluto TV’s free line-up of iconic series, with more than 25 well as evolving technologies and distribution models; risks related to our decisions to invest billion, with cash of approximately $10 billion, part of which is earmarked for payment of
- Earn trust every day by communicating directly and transparently, backing up our associated with actions following the Skydance Transactions, including costs related to a plan under SuccessorPredecessorSuccessorPredecessorThree Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,Nine Months Ended September 30,Period From August 7 - September 30,Period From January 1 - August 6,202620252025202620252025Net cash flow provided by (used for) operating activities$123$268$(175)$627$268$164Capital expenditures(92)(46)(32)(242)(46)(134)Free cash flow (Non-GAAP)$31$222$(207)$385$222$30 share of total U.S. TV time, per Nielsen’s The Gauge. with U.S. GAAP, they should not be considered in isolation of, or as a substitute for, our packages gained traction with the start of the NFL season. Our sports and news networks, (Successor), stock-based compensation expense of $27 million and $30 million, respectively, is included in (2) See Supplemental Disclosures Regarding Non-GAAP Financial Measures; (3) Weighted Christmas Day by Mr. Irrelevant, starring David Corenswet and Isabel May, which is the first Our streaming products are powered by an unparalleled portfolio of leading brands and SuccessorPredecessorSupplemental Pro Forma Revenues (b)Three Months Ended September 30,Period From August 7 - September 30,Period From July 1 - August 6,Three Months Ended September 30,Pro FormaIncrease/(Decrease) (d)Paramount+ (Global)2026202520252025$%Revenues$2,134$1,060$709$1,769$36521% revenue decreased 5% year-over-year, consistent with continued pay TV subscriber generation-defining series as of the end of Q3, contributing more than a quarter of all VOD in new businesses, products, services and technologies, and the evolution of our business cash-converted equity to WBD employees who joined the company and also to pay down which severance payments are being provided to certain eligible employees who voluntarily elected to words with action, and following through on our commitments to the people we serve “Restructuring and transaction-related items.” For the Predecessor period from July 1 - August 6, 2025, stock-based results as reported under U.S. GAAP, including net earnings (loss), (provision for) benefit including CBS, drive a majority of the U.S. Skydance TV revenues and EBITDA, giving us a average number of diluted shares outstanding We also see opportunity in content, which is both an expense for us but also an investment in theatrical release under Skydance Sports’ partnership with the NFL. franchises, such as Star Trek, Yellowstone, Top Gun: Maverick, Mission: Impossible, Harry erosion while rates remain resilient. viewing on the platform. Last week we also added 14 channels from the Warner Bros. library. strategy; the potential for loss of carriage or other reduction in or the impact of negotiations participate. compensation expense of $10 million is included in “Restructuring and transaction-related items.” WBD’s securitization program. (a) Both periods reflect severance charges and also included in the period from January 1 - August 6, and work alongside. ◦DTC Q3 pro forma revenue grew 15%. from income taxes, net earnings (loss) attributable to Parent, and diluted EPS, as durable, live-driven foundation. We believe more consumer choice supports the long-term building valuable, long-term assets for the company. We start from an industry-leading base Potter, Game of Thrones, SpongeBob SquarePants, The Pitt, The Big Bang Theory, Superman, (a) Reflects the inclusion of the historical TV Media studio operations and updates to our segment expense allocations to better reflect how we Great content brings viewers to Pluto TV and keeps them watching, and with shared for the distribution of our content; damage to our reputation or brands; losses due to asset 2025 are charges for the impairment of lease assets. (c) The Adjusted EBITDA margin for the three months ended September 30, 2026 of 14% is calculated as Adjusted (b) Reflects banking, legal, advisory, and other professional fees relating to the Skydance Transactions,
- TV Media adj. EBITDA was $1 billion, a 34.0% margin, benefiting from cost savings operate and make cost decisions across the business. applicable, as indicators of operating performance and undue reliance should not be placed health of the pay TV ecosystem, and we will continue partnering with distributors to optimize of more than $30 billion in annual content spend and a deep library built over a combined We expect the Warner Bros. film slate in Q4 to underperform. As we integrate the businesses, Batman, and Teenage Mutant Ninja Turtles, along with sports and news in a number of EBITDA of $1.00 billion divided by total revenues of $7.03 billion. monetization capabilities across our services, a larger, more engaged audience becomes a impairment charges for goodwill, content and long-lived assets, including finite-lived and transaction awards that became payable to eligible employees upon closing of the Skydance The work ahead is significant, and so is the opportunity. And we’ve already begun to act: new (b) Reflects a charge to reduce the carrying values of FCC licenses in certain markets to their estimated We are restructuring our cost base so we can invest for growth while achieving at least $6 ◦In Q4, we expect continued strong DTC revenue growth, Skydance TV trends to initiatives. (b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP Studios on these adjusted measures. Other companies may define these measures, including the experience across linear and streaming. 200-plus years of storytelling, and we will keep investing in the content engine that drives our we are applying the playbook we ran at Paramount: testing earlier, tailoring our marketing markets around the world. Transactions. stronger business. intangible assets; liabilities related to discontinued operations and former businesses; fair values. leadership teams are in place, integration work is underway, and we are executing on our plan billion of run-rate synergies within three years and strengthening our balance sheet. Growing revenues for the period from July 1 - August 6, 2025 with the Successor revenues for the Studios segment for the period from August 7 - remain consistent with recent quarters, and the improved Paramount film slate Adjusted EBITDA, differently and, as a result, our adjusted measures may not be directly growth. With the reach of our combined platforms across streaming, broadcast and cable, and release strategy to the size of each opportunity, enhanced with real-time market data, September 30, 2025. Licensing and other and total Supplemental Non-GAAP Pro Forma Revenues also include $12 million of Skydance Media (c) Reflects the reversal of the valuation allowance on our interest limitation carryforward deferred tax increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving (c) Reflects banking, legal, advisory, and other professional fees relating to the Skydance Transactions, to realize at least $6 billion in run-rate synergies within three years. our business and paying down debt are our top priorities, and we strongly believe we can results to be more than offset by underperformance of the Warner Bros. film revenues after the elimination of intercompany revenues from Paramount Global during the Predecessor period from July 1 - August 6, 2025. comparable to similarly titled measures of other companies. (a) Supplemental Pro Forma Revenues for the three months ended September 30, 2025 reflect the combination of the Successor period with the With the CBS Television Network, premier live sports and some of the most beloved cable asset, partially offset by the establishment of a reserve for uncertain tax positions. each title can work harder for us, and as one company we can make smarter choices about and strengthening the slate we greenlight. That approach served us well at Paramount where We see a meaningful opportunity to grow reach and engagement, improve retention, and and transaction awards that became payable to eligible employees upon closing of the Skydance (a) Reflects the transfer of the historical TV Media studio operations to the Studios segment and our premium cable channel, Paramount+ with The integration of Pluto TV with Paramount+ took about 18 months. Drawing on that business continuity, cybersecurity, privacy and data protection and similar risks; challenges in While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the new accounting basis achieve both simultaneously. We expect to reduce net leverage to 3.0x by the end of 2029, Predecessor period from July 1 - August 6, 2025 and for Licensing and other and total Supplemental Pro Forma Revenues also include $12 slate. Showtime, to the Direct-to-Consumer segment, and updates to our segment expense allocations to better reflect how we operate and make brands in the world, Skydance TV is well positioned to give viewers more of what they love Transactions. established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined basis to help investors view these how we distribute and monetize our slate. our 2026 slate is expected to generate more than $500 million more in lifetime profit than last increase the revenue and profitability of our streaming services in line with or ahead of the million of Skydance Media revenues after the elimination of intercompany revenues from Paramount Global during the Predecessor period (a) Reflects the inclusion of our premium cable channel, Paramount+ with Showtime, which was included in the TV Media segment in 2025, and experience, our combined technology team, and the latest in AI tools, we expect to bring protecting and maintaining our intellectual property rights; domestic and global political, We expect to reach our medium-term financial outlook of mid-single-digit annualized revenue reaching investment-grade credit metrics within approximately three years of closing. To get cost decisions across the business. revenues in a manner consistent with our management. from July 1 - August 6, 2025. While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by updates to our segment expense allocations to better reflect how we operate and make cost decisions across the business. We are not able to reconcile forward-looking non-GAAP financial measures because we are across broadcast, cable and streaming, and to create lasting value for our shareholders. (d) Principally reflects a gain associated with the disposition of a noncore business. year’s. leading competitors in the industry. Our first step toward bringing together Paramount+ and Paramount+ and HBO Max together much faster, aiming to align our backend systems within economic and regulatory factors affecting our businesses generally; the inability to hire or the new accounting basis established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined basis to growth, mid-20% adjusted EBITDA margins, and more than $10 billion in free cash flow by there, we expect to ramp our annual free cash flow to more than $10 billion in 2030. One- (b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP TV Media (c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to unable without unreasonable efforts to accurately estimate the individual adjustments for (b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP Direct-tohelp investors view these revenues in a manner consistent with our management. HBO Max is to offer them in a single bundle. Starting in early 2027, consumers will be able to revenues for the period from July 1 - August 6, 2025 with the Successor revenues for the TV Media segment for the period from August 7 - a year of closing, enabling us to quickly deliver a unified product. retain key employees or secure creative talent; disruptions to our operations as a result of Adjusted EBITDA. 2030, while transitioning a meaningful majority of revenue and profit from TV to our time cash costs to achieve the synergies are expected to be roughly $1.5 to $2 billion in 2027 Consumer revenues for the period from July 1 - August 6, 2025 with the Successor revenues for the Direct-to-Consumer segment for the September 30, 2025. While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the new such reconciliations, as applicable, or to quantify the probable significance of these items at 2027 is shaping up well for our motion pictures group, with a lineup that runs from beloved subscribe to both world-class streaming services at an even greater value. We look forward to period from August 7 - September 30, 2025. While the Successor and Predecessor periods are distinct reporting periods, revenues were not labor disputes; risks and costs associated with the integration of, and our ability to integrate, (d) Reflects the comparison between the Successor revenues for the three months ended September 30, 2026 to the non-GAAP pro forma accounting basis established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined basis to help streaming and studios businesses. and roughly $4 billion throughout our transformation, 60% to 70% of which will impact 2027 impacted by the new accounting basis established for Paramount Global’s net assets, and are supplementally presented on a pro forma this time. revenues for the three months ended September 30, 2025. investors view these revenues in a manner consistent with our management. franchises to fresh stories. At Paramount, we start the year with Children of Blood and Bone in sharing more details on the bundle and our streaming roadmap in the coming months. We will manage the DTC business for long-term profitable growth, with an emphasis on the the businesses of Paramount Global, Skydance Media, LLC and WBD successfully and to combined basis to help investors view these revenues in a manner consistent with our management. We present periods before ("predecessor") and after ("successor") the close of the Skydance Transactions (see Financial Statement Presentation). We discuss revenue for Q3 2025 on a pro forma basis, reflecting the combination of the predecessor and successor periods and the inclusion of Skydance Media revenues during the predecessor period. In addition, because our current GAAP segment structure was not in effect during the predecessor period, the 2025 predecessor revenues by segment shown in this letter constitute a non-GAAP presentation. See Supplemental Disclosures Regarding Non-GAAP Financial Measures for reconciliations to the historical GAAP segment presentation and pro forma revenues for Q3 2025. and 2028, and have been contemplated in our financial and leverage outlook. (c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to Adjusted January and K-Pop: The Debut in February, followed by Sonic the Hedgehog 4 in March, value of each customer relationship. We expect to grow our subscriber base with healthy achieve anticipated synergies, including in the amounts or on the timelines anticipated to We are building this great company with ambition, discipline, and an unwavering belief in the (c) In the first quarter of 2026, we renamed our primary measure of profit and loss for our operating segments from Adjusted OIBDA to EBITDA. See Supplemental Disclosures Regarding Non-GAAP Financial Measures. Source: Skydance rankings based on Nielsen data. Includes Paramount, HBO and Warner Bros. productions; based on P2+ average audience during first 35 days of playback Source: Skydance rankings based on Nielsen Streaming Content Ratings data. Includes Paramount, HBO and Warner Bros. productions; based on P2+ audience viewing hours As of the latest published The Gauge report for August 2026. DTC revenue for the combined company is calculated on a pro forma basis assuming the WBD Merger occurred on January 1, 2025. Adjusted EBITDA. starring Jim Carrey, Keanu Reeves and others, and A Quiet Place Part III in July. At Warner economics and measure performance by financial results. To that end, beginning with Q4’26 realize such synergies; litigation relating to the Skydance Transactions potentially resulting in power of great storytelling combined with world-class technology, and we are doing it Until we reach our leverage target, we will use excess cash, beyond our reinvestment into the (d) Reflects the comparison between the Successor results for the three months ended September 30, 2026 to the non-GAAP pro forma revenues Amount is based on each company's historical subscriber definition and for WBD is applicable only to HBO and HBO Max, and accordingly does not include Discovery+ or other WBD streaming services that may have previously been included in subscriber counts. See WBD’s 2025 Annual Report on Form 10-K for its historical definition and our Quarterly Report on Form 10-Q for the third quarter of 2026 for the Paramount+ definition. Such amount does not account for subscriber overlap. (d) Reflects the comparison between the Successor results for the three months ended September 30, 2026 to the non-GAAP pro forma Bros., we are building on our biggest franchises, with Godzilla x Kong: Supernova arriving in results and in line with other leading DTC players in the industry, we will no longer provide substantial costs; volatility in the price of our Class B common stock; the effect our dual-class for the three months ended September 30, 2025. together, with deep respect for the talent and dedication of our people. business and our current dividend, to repay debt. revenues for the three months ended September 30, 2025. March, and Man of Tomorrow and A Minecraft Movie Squared in July. And we have even more quarterly subscriber disclosures. We will instead highlight key milestones and KPIs, such as capital structure and the concentrated ownership may have on the price of our Class B amazing stories coming with the Ocean’s Eleven prequel starring Bradley Cooper and Margot engagement, along the way. common stock or business; risks related to a private sale of a controlling interest in our Company, including that our stockholders may not realize any change of control premium on 3 4 5 6 7 8 9 10 11 12 13 shares of our Class B common stock and that we may become subject to the control of a
14 15 27 28 29 30 16 18 19 20 21 22 23 24 25 26