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Paragraphs in the 10-Q filed Nov 9, 2026 that were not in the one before

571 paragraphs in the 10-Q filed Nov 9, 2026 with nothing like them in the 10-Q filed Aug 4, 2026 (at least half the words must differ; new numbers alone do not count). Quoted exactly, grouped by the item heading above them. This is text that changed, not a judgement of how serious it is.

Financial statements and notes

-9- SKYDANCE CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Tabular amounts in millions, except per share amounts) 1) DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business - Skydance Corporation is a global media and entertainment company. Prior to the WBD Merger in October 2026 (as defined and described below), and throughout the period covered by these financial statements, our portfolio of brands included Paramount, Paramount+, Pluto TV, CBS, CBS Sports, Nickelodeon, MTV, BET, and Comedy Central. Following the WBD Merger our portfolio also includes Warner Bros., HBO and HBO Max, CNN, TNT Sports, Cartoon Network, Food Network, and HGTV. Beginning in 2026, we transitioned our reporting structure into three new segments: Studios, Direct-to-Consumer, and TV Media (see Note 14). Warner Bros. Discovery Merger (Subsequent Event) - On October 6, 2026 (the “Closing Date”), we completed the acquisition (the “WBD Merger”) of Warner Bros. Discovery, Inc. (“WBD”) pursuant to the previously announced definitive merger agreement (the “WBD Merger Agreement”). See Notes 2, 8 and 11. Also on October 6, 2026, in connection with the WBD Merger, we amended our certificate of incorporation (the “charter amendment”) to, among other things, change our name from Paramount Skydance Corporation to Skydance Corporation. References herein to “Skydance,” “Skydance Corporation” or the “Company” refer, prior to such charter amendment, to Paramount Skydance Corporation, and following such charter amendment to Skydance Corporation, unless the context otherwise requires reference to Paramount Skydance Corporation. Effective October 6, 2026, shares of Skydance Corporation Class B Common Stock trade on the New York Stock Exchange (“NYSE”) under the trading symbol “SKYD.” The NAI Transaction and the Skydance Transactions - On August 7, 2025, pursuant to a purchase and sale agreement dated July 7, 2024, certain affiliates of investors in Skydance Media, LLC (“Skydance Media”), comprised of entities controlled by the Ellison Family (as defined below) and affiliates of RedBird Capital Partners (collectively the “NAI Equity Investors”), purchased all of the outstanding equity interests of Paramount Global’s controlling stockholder, National Amusements, Inc. (“NAI”) from the shareholders of NAI (the “NAI Transaction”). Also on August 7, 2025, following the completion of the NAI Transaction and pursuant to the Transaction Agreement dated as of July 7, 2024, Paramount Global and Skydance Media became wholly-owned subsidiaries of Paramount Skydance Corporation (the transactions contemplated by the Transaction Agreement, the “Skydance Transactions”). Paramount Skydance Corporation, formerly known as New Pluto Global, Inc. and now known as Skydance Corporation, was formed on June 3, 2024 to consummate the Skydance Transactions and was a wholly-owned direct subsidiary of Paramount Global until, through a series of mergers, it became the holding company of Paramount Global and Skydance Media as part of the Skydance Transactions. See Note 3. Following the closing of the Skydance Transactions and the NAI Transaction, NAI, which was renamed Harbor Lights Entertainment, Inc., and its subsidiaries hold 100.0 % of the Skydance Corporation Class A Common Stock. Holders of shares of Class A common stock of Skydance Corporation (“Skydance Corporation Class A Common Stock”) are entitled to one vote per share with respect to all matters on which the holders of Skydance Corporation common stock are entitled to vote. Holders of Skydance Corporation Class B Common Stock do not have voting rights. Accordingly, entities controlled by the Ellison Family (as defined below) indirectly hold approximately 77.5 % of Skydance Corporation Class A Common Stock through their collective approximate 77.5 % ownership interest in Harbor Lights Entertainment, Inc., and as a result the Ellison Family is the controlling stockholder and the ultimate parent of the Company (“Ultimate Parent”). For the purpose of determining the controlling ownership of the Company, the Ellison family is comprised of Lawrence J. Ellison and David Ellison (the “Ellison Family”). David Ellison is the son of Lawrence J. Ellison, and Lawrence J. Ellison and David Ellison are accordingly considered immediate family members. Pushdown of Ultimate Parent’s Basis - At the time Paramount Global and Skydance Media became subsidiaries of Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance Media, and as a result, this transaction has been accounted for as a transaction between entities under common control. As a
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plus a per share “ticking fee” of $ 0.00277778 (the “Ticking Consideration”) multiplied by the number of calendar
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outstanding was approximately $ 77.95 billion. In addition, purchase consideration includes approximately
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$ 1.95 billion (inclusive of Ticking Consideration) related to the portion of WBD equity awards granted under any
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the Consolidated Statement of Cash Flows for the nine months ended September 30, 2026. This payment was
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loans totaling $ 14.7 billion. The following table details the preliminary purchase consideration for the WBD
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Total cash paid to WBD’s shareholders inclusive of Ticking Consideration $77,952 Estimated pre-combination portion of replacement employee equity awards 1,951 Settlement of WBD term loans 14,699 Netflix termination fee 2,800 Total preliminary purchase consideration (a) $97,402
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(a) The estimated preliminary purchase consideration does not include an estimate for amounts relating to the settlement
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The WBD Merger is being accounted for as a business combination, with Skydance identified as the accounting
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acquirer. In identifying Skydance as the accounting acquirer, management considered the structure of the
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acquisition and other actions contemplated by the WBD Merger Agreement, relative outstanding voting and equity
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interests, and the composition of the post-acquisition board of directors. No single factor was the sole determinant
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in the overall conclusion that Skydance is the accounting acquirer; rather all factors were considered in arriving at
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such conclusion. As a result of the limited time between the Closing Date and the filing of this Quarterly Report on
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Form 10-Q for the quarter ended September 30, 2026, initial accounting for the business combination is incomplete
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and we are not yet able to disclose the provisional amounts to be recognized as of the acquisition date for assets
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acquired and liabilities assumed, or the supplemental pro forma revenue and earnings of the combined company.
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On September 30, 2026, the Consent Decree (the “States Consent Decree”) amongst the Company, WBD and
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twelve states (collectively, the “Plaintiff States”) went into effect in connection with resolving the lawsuit filed by
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the Plaintiff States captioned State of California et al. v. Paramount Skydance Corp. et al., and modifying the no-
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close order in order to permit the WBD Merger to close. Under the States Consent Decree, the combined company
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and its subsidiaries following the WBD Merger must comply with certain principal commitments during a five -
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Investment Fund, L.P. See Note 6 for details of ownership by the Ellison Family and RedBird of Skydance
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subject to the consummation of the acquisition of WBD. The Pro Rata Credit Agreement provides for (i)
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We also entered into $ 49 billion 364 -day senior secured bridge term loan commitments. The bridge commitments,
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which were terminated on the Closing Date, were intended as contingent financing and no borrowings were made
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acquisition was comprised of (i) $ 9.5 billion of seven -year Term B-1 Loans, (ii) $ 30.0 billion of First Lien Senior
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described above, reflecting an aggregate amount of $ 56.9 billion. See Note 8. The availability and initial funding of
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the bridge commitments were subject to the consummation of the acquisition of WBD and other customary
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conditions. On the Closing Date we incurred facility fees associated with the bridge facility totaling $ 384 million,
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Exchange Offers and Tender Offers In connection with the WBD Merger, in May 2026, we commenced (i) offers to exchange any and all of certain outstanding senior notes of subsidiaries of WBD (the “WBD Issuers”) for newly issued second lien secured notes issued by Skydance (the “Exchange Offers”) and (ii) offers to purchase for cash two additional series of senior notes of the WBD Issuers (the “Tender Offers”). The Exchange Offers and Tender Offers expired on October 6, 2026, following the closing of the WBD Merger, and settled on October 9, 2026, resulting in the exchange of $ 11.98 billion aggregate principal amount and € 546.5 million of the WBD Issuers’ senior notes for newly issued second lien senior secured Skydance notes, and the purchase for cash of $ 2.4 billion aggregate principal amount of the WBD Issuers’ senior notes. See Note 8. Warrants In addition, on October 13, 2026, holders of record of Skydance Corporation Class B Common Stock on October 5, 2026 (excluding any Equity Investor or affiliate thereof, any of the Company’s wholly owned subsidiaries that own Class B Common Stock, the Paramount Global 401(k) Plan and the Paramount Global Master Trust) received one 10 -year warrant per share, exercisable at $ 12.00 per share. See Note 11. Treatment of WBD Equity Awards In accordance with the WBD Merger Agreement, on October 6, 2026 (i) vested WBD stock options and RSUs were cancelled and converted into the right to receive cash based on the Merger Consideration; (ii) unvested WBD stock options with an exercise price below the Merger Consideration, unvested WBD RSUs and WBD deferred stock units were assumed by the Company and converted into contingent rights to receive fixed cash amounts based on the Merger Consideration, which remain subject to the vesting and other terms of the original awards; (iii) WBD stock options with an exercise price equal to or greater than the Merger Consideration were cancelled for no consideration; and (iv) WBD notional investment units under WBD’s deferred compensation plans were converted into notional units with respect to Skydance Corporation Class B Common Stock. As discussed above, the preliminary purchase consideration includes an estimate of approximately $ 1.95 billion for WBD equity awards, comprised of amounts paid for vested awards and liabilities assumed for the portion of the converted unvested awards attributable to pre-combination services. The remaining estimated value of the converted unvested awards of approximately $ 1.18 billion will be recognized as compensation expense over the remaining vesting periods of up to three years. In connection with the WBD Merger, we assumed WBD’s equity incentive plans, and shares remaining available under WBD’s stock incentive plan may be used for awards to legacy WBD employees and newly hired employees under our 2025 Incentive Award Plan, as amended.
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Proceeds from the Skydance Transactions PIPE, net of subscription discount 1,517
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programming assets of $ 653 million principally from reductions for programming at our TV Media and Direct-to-Consumer
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segments offset by an increase to the fair value of our film and television libraries.
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severance payments are being provided to certain eligible employees who voluntarily elected to participate. In
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Ellison Family contributed $ 14.85 billion of equity financing (see Note 2) and received 1.24 billion shares of
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the WBD Merger, RedBird contributed $ 5.2 billion of equity financing (see Note 2) and received 433 million
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business expenses of up to $ 300,000 annually. At September 30, 2026, amounts owed in connection with this
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At closing of the WBD Merger, we reimbursed the Trust and RedBird for reasonable and documented out-of-
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Reserves for accounts receivable reflect our expected credit losses based on historical experience as well as current
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and expected economic conditions and industry trends. At September 30, 2026 and December 31, 2025, our
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are recognized at the beginning of the license period in which programs are made available to the licensee for
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exhibition, while the related cash is generally collected over the term of the license period.
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Sheets and were $ 1.5 billion at both September 30, 2026 and December 31, 2025. We recognized revenues of $ 1.1
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from August 7 - September 30, 2025 (Successor) and January 1 - August 6, 2025 (Predecessor), respectively, that
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were included in the opening balance of deferred revenues for the respective year.
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discount of $ 390 million and unamortized deferred financing fees of $ 71 million, and a reduction of $ 1.36 billion to
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In January 2026, we repaid our $ 347 million of 4.0 % senior notes at maturity and in October 2026 we repaid our
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increasing the commitments from $ 3.50 billion to $ 5.00 billion. The Unsecured Credit Facility was used for
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general corporate purposes and to support commercial paper borrowings, if any and also allowed us to borrow, at
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consummation of the WBD Merger, we repaid all borrowings with the funding from the PIPE Transaction
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described in Note 2 and terminated all credit commitments outstanding under the Unsecured Credit Facility.
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credit agreement for the Unsecured Credit Facility) for the trailing twelve-month period at the end of each quarter.
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In connection with the WBD Merger we issued or assumed additional debt with an aggregate principal amount of
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$ 72.1 billion. This amount consists of (i) $ 56.9 billion of debt incurred to finance the WBD Merger, comprised of
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Pro Rata Credit Agreement, $ 30.0 billion of First Lien Senior Secured Notes (the “First Lien Notes”), and
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$ 12.4 billion of Second Lien Senior Secured Notes (the “Second Lien Notes”), (ii) $ 12.6 billion of Second Lien
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Senior Secured Notes issued in the Exchange Offers (the “Second Lien Exchange Notes”), and (iii) $ 2.7 billion of
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other outstanding unsecured notes and debentures of the WBD Issuers that we assumed. The newly issued debt is
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consummation of the acquisition of WBD, the termination of the Unsecured Credit Facility, and other customary
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under each of the Term A Loan Facilities. The commitments under the Revolving Credit Facility became available
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on the Closing Date, and no amounts were drawn. Also on the Closing Date, we entered into Amendment No. 1 to
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incremental tranche of term B loans consisting of (i) $ 8.5 billion of seven -year U.S. dollar-denominated term B-1
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loans (the “Dollar Term B-1 Loans”) and (ii) € 850 million of seven -year euro-denominated term B-1 loans (the
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“Euro Term B-1 Loans” and, together with the Dollar Term B-1 Loans, the “Term B-1 Loans”). We borrowed the
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full amount of the Term B-1 Loans on the Closing Date. The Term B-1 Loans mature on the seventh anniversary of
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The loans drawn under the Term A Loan Facilities and the Revolving Credit Facility bear interest at a rate
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The Dollar Term B-1 Loans bear interest, at our option, at a rate per annum equal to either the Alternate Base Rate
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(as defined in the Pro Rata Credit Agreement) or Term SOFR plus a margin based on our Leverage Ratio that
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ranges between 1.75 % and 1.50 % for Alternate Base Rate loans and 2.75 % and 2.50 % for Term SOFR Rate loans.
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The Euro Term B-1 Loans bear interest at a rate per annum equal to EURIBOR plus a margin based on our
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Leverage Ratio that ranges between 2.75 % and 2.50 %. Beginning with the quarter ending December 31, 2029, the
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Dollar Term B-1 Loans will amortize at 1.00 % of the initial principal amount per annum in quarterly installments,
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with the remaining balance payable at maturity. No regular amortization is required with respect to the Euro Term
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Interest rates on benchmark rate borrowings under the Pro Rata Credit Agreement, including the Term A Loan
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Facilities and the Term B-1 Loans, reset at the beginning of each interest period, and as a result, interest expense
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on these borrowings will fluctuate with changes in market interest rates. In addition, the applicable margins may
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change based on changes in our corporate family rating or the Leverage Ratio, as applicable.
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The obligations under the Pro Rata Credit Agreement have been secured on a first lien basis on all or substantially
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all of the assets of Skydance and its U.S. subsidiaries (including Paramount Global, Skydance Media, LLC, and
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each of its respective U.S. subsidiaries) that are guarantors, excluding real property and subject to other customary
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exceptions and a cap on the amount of assets and property of Paramount Global that can be subject to a lien
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securing the Pro Rata Credit Agreement. On the date Skydance achieves certain credit ratings and satisfies certain
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other conditions as specified in the Pro Rata Credit Agreement (such date, the “Investment Grade Fall-Away
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obligations by the subsidiary guarantors will be released (subject to certain exceptions).
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The Pro Rata Credit Agreement contains customary representations and warranties and also contains financial
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covenants that require our Leverage Ratio and First Lien Net Leverage Ratio (each as defined in the Pro Rata
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Credit Agreement) not to exceed 5.50x and 3.25x, respectively, in each case, at the end of each fiscal quarter. On
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and after the Investment Grade Fall-Away Date, the First Lien Net Leverage Ratio financial covenant will cease to
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apply and the Leverage Ratio financial covenant will be modified requiring that our Leverage Ratio not exceed
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thereunder may be voluntarily reduced, without penalty, other than customary breakage costs and, in the case of
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the Term B-1 Loans, a 1.00 % premium on Term B-1 Loans that are prepaid, converted or subjected to a pricing
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On October 5, 2026, we issued, in private placements exempt from registration under the Securities Act of 1933, as
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aggregate principal amount of Second Lien Notes, together with € 885 million aggregate principal amount of
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Second Lien Notes denominated in euros (First Lien Notes together with the Second Lien Notes, the “Senior
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Secured Notes”). The Senior Secured Notes bear interest at fixed rates, payable semi-annually in arrears, and
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The First Lien Notes are secured by first-priority liens on all or substantially all of the assets of Skydance and the
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Guarantors (as defined below) (the “Collateral”), subject to permitted liens and certain exceptions. The First Lien
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Notes are guaranteed on a senior secured basis by each of Skydance’s existing and future wholly owned domestic
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subsidiaries that is a borrower under or guarantees obligations under the Pro Rata Credit Agreement (collectively,
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the “Guarantors”), subject to certain exceptions. The Second Lien Notes are secured by second-priority liens on the
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Collateral, subject to permitted liens and certain exceptions. The Second Lien Notes are guaranteed on a senior
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secured basis by the Guarantors. Upon the occurrence of an Investment Grade Event (as defined in the applicable
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supplemental indenture) for each series of notes with respect to the Senior Secured Notes, subject to certain
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conditions (including the concurrent release of liens and guarantees securing other secured debt and the Company
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having no greater than $ 250 million of term B loans outstanding at such time), the liens on the Collateral securing
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such series of notes will be released and the note guarantees with respect to such series will be released. In
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addition, certain covenants set forth in the applicable supplemental indenture relating to asset sales and future
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subsidiary guarantors will cease to apply to such series of notes. These releases and covenant suspensions are
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permanent and will not be reinstated upon any subsequent downgrade or withdrawal of the applicable investment
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Pursuant to the registration rights agreement, dated as of October 5, 2026 (the “First Lien Senior Secured Notes
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Registration Rights Agreement”), we have agreed to use commercially reasonable efforts to (i) file a registration
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statement with respect to a registered offer to exchange each series of the First Lien Notes for new notes with terms
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substantially identical in all material respects to such series of the First Lien Notes (such new notes, the “Exchange
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Notes”) and cause the registration statement to be declared effective under the Securities Act within 730 days of
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October 5, 2026, or (ii) in certain circumstances, file a shelf registration statement with respect to resales of the
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Each series of First Lien Notes may be redeemed at our option, in whole or in part, at a “make-whole” premium
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prior to the applicable par call date and at 100 % of principal on or after that date. For each series of First Lien
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Notes, the par call date is within one to six months of maturity. For the Second Lien Notes, prior to October 15,
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2028 (2031 Euro and 2031 Second Lien Notes), October 15, 2029 (2034 Second Lien Notes) and October 15, 2031
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(2036 Second Lien Notes), we may redeem each series, in whole or in part, at a “make-whole” premium.
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Thereafter each series of Second Lien Notes can be redeemed at call premiums starting at 3.500 % to 4.563 % of
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principal and declining to zero one year prior to maturity (2031 Euro and 2031 Second Lien Notes) and three years
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prior to maturity (2034 and 2036 Second Lien Notes). In addition, before October 15, 2028 (2031 Euro and 2031
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Second Lien Notes) or October 15, 2029 (2034 and 2036 Second Lien Notes), we may redeem up to 40 % of a
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series of Second Lien Notes with the proceeds of equity offerings at 107.0 % to 109.125 % of principal, and up to
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10 % of such a series per calendar year at 103 % of principal, plus in each case accrued and unpaid interest.
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In addition, upon a change of control triggering event, holders of our Senior Secured Notes may require us to
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In May 2026, we commenced offers to exchange any and all of certain outstanding senior notes issued by the
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WBD Issuers for Second Lien Exchange Notes newly issued by Skydance and also commenced offers to purchase
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for cash two additional series of senior notes of the WBD Issuers. The Exchange Offers expired on October 6,
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2026 following the closing of the WBD Merger, and holders of approximately 99.15 % of the notes eligible to
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participate in the Exchange Offers validly tendered their notes. Accordingly, upon settlement on October 9, 2026,
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Notes and € 546.5 million aggregate principal amount of euro-denominated Second Lien Exchange Notes. Such
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notes were issued in private placements exempt from registration under the Securities Act. The dollar-denominated
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notes pay interest semi-annually, and the euro-denominated notes pay interest annually, in each case in arrears. The
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Senior Secured Exchange Notes Face Value ───────────────────────────────────────────────────────────────────────────── 6.304% Second Lien Exchange Notes due 2029 $1,344 6.25% Second Lien Exchange Notes due 2029 654 4.875% Second Lien Exchange Notes due 2030 901 4.904% Second Lien Exchange Notes due 2032 2,674 5.00% Second Lien Exchange Notes due 2037 447 6.35% Second Lien Exchange Notes due 2040 432 4.95% Second Lien Exchange Notes due 2042 130 5.05% Second Lien Exchange Notes due 2042 4,065 4.875% Second Lien Exchange Notes due 2043 141 5.20% Second Lien Exchange Notes due 2047 3 5.30% Second Lien Exchange Notes due 2049 248 5.141% Second Lien Exchange Notes due 2052 944 5.802% Second Lien Exchange Notes due 2030 (€235 million) 263 5.068% Second Lien Exchange Notes due 2033 (€311 million) 349 Total Senior Secured Exchange Notes $12,595
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The Exchange Offers have been accounted for as debt modifications. Accordingly, the Second Lien Exchange
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The Second Lien Exchange Notes are senior secured obligations, guaranteed by the Guarantors and secured by
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second-priority liens on the Collateral. They are junior in lien priority to the First Lien Notes and the loans and
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commitments under the Pro Rata Credit Agreement, and equal in lien priority to the Second Lien Notes.
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The Second Lien Exchange Notes are redeemable at our option. Most series may be redeemed at a “make-whole”
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price before their par call date, which is between one and six months before maturity, and at 100 % of principal on
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or after that date, plus accrued and unpaid interest in each case. The 2032 Second Lien Exchange Notes and 2052
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Second Lien Exchange Notes follow the same terms but cannot be redeemed before March 15, 2027. The 6.35 %
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2040, 4.95 % 2042, and 4.875 % 2043 Second Lien Exchange Notes have no par call date and may be redeemed at
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any time at a “make-whole” price. The euro-denominated Second Lien Exchange Notes may also be redeemed in
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whole at par upon certain changes in U.S. tax law. The change of control, tender offer, covenant and Investment
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Grade Event provisions of the Second Lien Exchange Notes are substantially the same as those of the Second Lien
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Notes issued on October 5, 2026 described above. The Second Lien Exchange Notes do not have registration
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Concurrent with the Exchange Offers, on October 9, 2026 we purchased $ 2.40 billion in aggregate principal
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amount of senior notes of the WBD Issuers (approximately 98.83 % of the outstanding principal amount of those
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series) for $ 2.38 billion in cash, plus accrued and unpaid interest, and the purchased notes were cancelled.
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We are exposed to changes in foreign currency exchange rates and manage that exposure principally using foreign
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currency forward contracts and cross-currency swaps. We designate certain of these instruments as cash flow
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hedges, fair value hedges and net investment hedges, as described below. Foreign currency forward contracts have
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of the 2031 Euro Second Lien Notes (designated as fair value hedges) and $ 510 million related to our other foreign
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currency assets and liabilities (non-designated hedges). At December 31, 2025, the notional amount comprised
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On September 30, 2026, in connection with the pricing of the above-referenced € 885 million ($ 1.00 billion)
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aggregate principal amount of the 7.000 % Euro Second Lien Senior Secured Notes due 2031, which were issued
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The swaps, which mature on October 15, 2029, are designated as fair value hedges of the foreign currency
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exposure associated with both the firm commitment to issue the notes from September 30, 2026 and the
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On October 6, 2026, concurrent with the borrowing of the € 850 million Euro Term B-1 Loans (see Note 8), we
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designated the principal amount of these loans as a hedge of our net investment in certain euro functional currency
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related debt. On September 30, 2026, we terminated all of these interest rate contracts and, in October 2026,
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received cash proceeds of $ 667 million. For the contracts designated as cash flow hedges, the related gain of
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$ 165 million, which was recorded in accumulated other comprehensive income (loss) (AOCI), will be reclassified
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into interest expense over the 5 -year and 10 -year term of the related debt issued in October 2026. Approximately
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$ 16 million is expected to be reclassified from AOCI into interest expense within the next 12 months. The gain on
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the non-designated interest rate hedges for the nine months ended September 30, 2026 was $ 502 million.
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Common Stock have no voting rights. No shares of preferred stock have been issued. The Certificate of
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On October 6, 2026, subsequent to the balance sheet date, we issued approximately 3,918 million shares of Class B
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Investor or affiliate thereof, any of the Company’s wholly owned subsidiaries that own Class B Common Stock,
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the Paramount Global 401(k) Plan and the Paramount Global Master Trust) as of the October 5, 2026 record date
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anniversary of issuance, we may designate an earlier expiration date for the Warrants if the closing price of our
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day period. The Warrants commenced trading on the NYSE on October 13, 2026 separately from our Class B
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estimated value of the Warrants is considered a deemed dividend, which results in the application of the two-class
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method of EPS for the period the Warrants were issued. Accordingly, for the three months and year ending
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December 31, 2026, earnings per share will be calculated separately for the holders of Skydance Corporation Class
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B Common Stock receiving the deemed dividend and those not receiving the deemed dividend.
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(a) Primarily attributable to the establishment of a reserve for uncertain tax positions discussed below.
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While the uncertain tax position meets the more-likely-than-not recognition threshold, in applying the
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measurement assessment, the Company currently believes that a portion of the benefit may not be realized upon
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settlement and has recorded a reserve during the third quarter of 2026 for this item.
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Our reserve for uncertain tax positions of $ 613 million at September 30, 2026 includes $ 537 million which
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would affect our effective income tax rate, if and when recognized in future years. Liabilities for accrued interest
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and penalties totaling $ 254 million as of September 30, 2026 are included within “Other current liabilities” and
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taxes in the 2025 Successor period reflects the timing of foreign inclusions and foreign-derived intangible
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income deductions between the Successor and Predecessor periods. The benefit from income taxes for the 2025
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Predecessor periods reflects the tax impact of earnings attributable to noncontrolling interests, the timing of
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foreign inclusions between the Successor and Predecessor periods, and the tax benefit on the foreign-derived
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Three Months Ended September 30, 2025 Impact from Items Affecting Comparability ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Successor Predecessor Period From August 7 - September 30, Period From July 1 - August 6, 2025 2025 Earnings (Loss) Benefit from Earnings (Loss) Benefit from Before Income (Provision for) Before Income (Provision for) Taxes Income Taxes Taxes Income Taxes Restructuring charges (Note 5) $(185) $30 $(13) $3 Transaction-related items (Note 5) $ - $ - $(175) $30 Net discrete tax benefit (a) n/a $4 n/a $73 n/a - not applicable Nine Months Ended September 30, 2025 Impact from Items Affecting Comparability ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Successor Predecessor Period From August 7 - September 30, Period From January 1 - August 6, 2025 2025 Earnings (Loss) Benefit from Earnings (Loss) Benefit from Before Income (Provision for) Before Income (Provision for) Taxes Income Taxes Taxes Income Taxes Restructuring charges (Note 5) $(185) $30 $(255) $61 Transaction-related items (Note 5) $ - $ - $(199) $31 Impairment charges (Note 16) $ - $ - $(157) $39 Gain from dispositions $ - $ - $35 $(2) Net discrete tax benefit (a) n/a $4 n/a $64 n/a - not applicable (a) On July 4, 2025, the U.S. government enacted tax legislation, which included the extension of certain expired or expiring tax provisions, including a favorable change to the interest deduction limitation, and modifications to certain international tax provisions. The legislation has multiple effective dates with certain provisions effective in 2025. A favorable change to the interest deduction limitation resulted in the reversal of the valuation allowance on our interest limitation carryforward deferred tax asset of $ 114 million. The net discrete tax benefits for the 2025 Predecessor periods reflect this reversal, partially offset by a reserve for uncertain tax positions.
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operating income, and all other components of net periodic cost are included within “Other items, net.”
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measures include programming charges, impairment charges, restructuring charges, transaction-related items, other
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Predecessor Period From Period From July 1 - January 1 - August 6, August 6, 2025 2025 Intercompany Revenues: TV Media $3 $20 Filmed Entertainment 3 15 Total Intercompany Revenues $6 $35
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in May 2027, contains customary representations and warranties and covenants substantively similar to the credit
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an amended complaint, which we moved to dismiss the same month. In September 2026, the plaintiffs filed a
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The plaintiffs moved for injunctive relief before the U.S. Court of Appeals for the Ninth Circuit and that request
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was denied. Faust also filed a petition for a writ of certiorari with the U.S. Supreme Court related to the injunctive
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states’ and WGA plaintiffs’ cases. On September 21, 2026, the plaintiff-states, the Company, and WBD filed a
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proposed consent decree with the Court that would resolve the plaintiff-states’ claims. The Court held a hearing
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regarding the proposed consent decree and on September 30, 2026, entered the proposed consent decree and
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covering both the plaintiff-states’ and WGA plaintiffs’ cases. On September 21, 2026, the WGA, the Company,
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and WBD announced that they had entered into a settlement agreement resolving the WGA’s claims and filed a
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voluntary dismissal of the WGA’s claims with prejudice. On September 30, 2026, the Court dissolved its July 24,
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defendants opposed expedition in August 2026, and the plaintiff replied on September 1, 2026. On September 3,
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2026, the Court held oral argument on the plaintiff’s motion to expedite. Following the argument, the Court denied
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dismiss the action without prejudice. The Court granted the requested dismissal without prejudice the same day.
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2026 concerning the appropriate scope of further inspection. In August 2026, the parties reached an agreement
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concerning the review and production of certain documents to resolve all outstanding disputes between the parties
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regarding the inspection. In November 2026, the parties entered a stipulation of dismissal.
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motions to dismiss, and in February 2026, the Court granted defendants’ motion to stay discovery.
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order consolidating the Baker Action and the NYCERS Action (the “Class B Action”).
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In the Class B Action, two plenary complaints were filed in October 2026. The first complaint was brought by
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Rhode Island, and Frank Lupacchino. The complaint asserts class action claims for (1) breach of fiduciary duty
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against NAI and Shari E. Redstone, (2) breach of fiduciary duty against Shari E. Redstone as director of Paramount
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Global, and (3) aiding and abetting breaches of fiduciary duty against Skydance Media, LLC, David Ellison, and
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RB Tentpole LP. Plaintiffs seek judgment in their favor, equitable relief, damages, and costs. The second
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claims for (1) breach of fiduciary duty against NAI and Shari E. Redstone as controlling stockholders of
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Paramount Global, (2) breach of fiduciary duty against Shari E. Redstone as director of Paramount Global, (3)
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and Susan Schuman, and (4) aiding and abetting breach of fiduciary duty against David Ellison, Lawrence J.
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Ellison, Pinnacle Media Ventures LLC, Pinnacle Media Ventures II LLC, Pinnacle Media Ventures III LLC, and
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RB Tentpole LP. Plaintiffs seek judgment in their favor, damages, and costs. Briefing on leadership applications in
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Over the past several years, Nokia Corporation and Nokia Technologies Oy have alleged that WBD is infringing
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on their portfolio of patents related to the delivery of streaming video. In November 2025, Nokia brought suit
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against WBD in certain jurisdictions, and WBD and Dplay Entertainment Limited brought suit in other
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reasonable and non-discriminatory royalty rate for a global license to certain Nokia patents, including standard-
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essential patents related to the H.264/AVC and H.265/HEVC standards and other non-essential multimedia patents.
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In June 2026, the U.K. Court determined that WBD is required to make an interim license payment to Nokia
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during the pendency of the litigation, which includes refundable and non-refundable components, and trial is
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(Successor) was $ 3.85 billion. The difference reflects the proceeds received from the Skydance Transactions PIPE
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(see Note 3) and cash received from Skydance Media’s opening balance sheet, offset by cash paid for transaction-
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outstanding of $ 720 million under Skydance Media’s revolving credit facility were repaid in full.
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rights. Accordingly, entities controlled by the Ellison Family (as defined below) indirectly hold approximately
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Warner Bros. Discovery Merger (Subsequent Event) - On October 6, 2026 (the “Closing Date”), we completed the
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acquisition (the “WBD Merger”) of Warner Bros. Discovery, Inc. (“WBD”) pursuant to the previously announced
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definitive merger agreement (the “WBD Merger Agreement”). See Notes 2, 8 and 11 to the consolidated financial
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incorporation (the “charter amendment”) to, among other things, change our name from Paramount Skydance
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Corporation to Skydance Corporation. References herein to “Skydance,” “Skydance Corporation” or the
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“Company” refer, prior to such charter amendment, to Paramount Skydance Corporation, and following such
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trade on the New York Stock Exchange (“NYSE”) under the trading symbol “SKYD.” WBD will be included in
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our results beginning on October 6, 2026 and as a result is not reflected in the below discussion.
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elimination of intercompany revenues from Paramount Global during the Predecessor period from July 1 - August 6, 2025. While
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the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the new accounting basis
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established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined basis to help investors
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period reflect the benefit from subscriber growth and pricing increases for Paramount+ as well as linear declines.
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On a pro forma basis, revenues increased 5%, principally reflecting higher licensing revenue as well as growth in
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Paramount+ subscription revenue, partially offset by declines in linear revenues. The increase in licensing revenue
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30, 2026 includes a gain from non-designated interest rate contracts of $514 million offset by a net discrete tax
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provision of $275 million principally from the establishment of a reserve for uncertain tax positions.
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includes the gain on interest rate contracts noted above. Diluted EPS and adjusted diluted EPS in the Successor
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(a) Supplemental Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the Successor period
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elimination of intercompany revenues from Paramount Global during the Predecessor period from January 1 - August 6, 2025.
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While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted by the new accounting
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basis established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined basis to help
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Revenues in the Successor periods include Skydance Media. On a pro forma basis, revenues remained flat,
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reflecting higher licensing revenue as well as growth in Paramount+ subscription revenue, partially offset by
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September 30, 2026 includes a net gain from non-designated interest rate contracts of $502 million and the
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negative impact of net discrete tax items of $267 million. For the period from August 7 - September 30, 2025
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benefited from discrete tax items of $4 million and $64 million, respectively. In addition, during the Predecessor
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period from January 1 - August 6, 2025 net earnings attributable to noncontrolling interests was $447 million.
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(c) Primarily attributable to the establishment of a reserve for uncertain tax positions.
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that became payable to eligible employees upon closing of the Skydance Transactions.
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(c) Reflects the reversal of the valuation allowance on our interest limitation carryforward deferred tax asset, partially offset by
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the timing of foreign inclusions and foreign-derived intangible income deductions between the Successor and Predecessor
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valuation allowances on deferred tax assets related to interest deduction limitations as a result of recent U.S. tax legislation.
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The reported benefit, as well as the adjusted income tax benefit of $123 million, also reflects the tax impact of earnings
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(c) Primarily attributable to the establishment of a reserve for uncertain tax positions.
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that became payable to eligible employees upon closing of the Skydance Transactions.
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(e) Refer to the table above for a discussion of the reported and adjusted tax rates for the period from August 7 - September 30,
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the reversal of valuation allowances on deferred tax assets related to interest deduction limitations as a result of recent U.S.
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tax legislation. The reported effective income tax rate also reflects the tax impact of earnings attributable to noncontrolling
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interests, the timing of foreign inclusions between the Successor and Predecessor periods, and the tax benefit on the foreign-
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for Licensing and other and total Supplemental Pro Forma Revenues also include $12 million and $503 million of Skydance
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Media revenues after the elimination of intercompany revenues from Paramount Global during the Predecessor periods from
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reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net assets, and
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are supplementally presented on a pro forma combined basis to help investors view these revenues in a manner consistent with
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networks, television stations, and streaming services. Advertising revenues in each of the periods of 2026 and 2025
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driven by lower international advertising, including a 2% decrease to total pro forma advertising revenue from the
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absence of Telefe and Chilevisión, partially offset by higher domestic advertising revenues, including a 4%
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increase to total advertising revenues from higher political advertising. The 5% pro forma decrease for the nine
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NCAA Tournament. The pro forma decline for the nine months was partially offset by a 2% increase from higher
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political advertising. The pro forma comparison in each period also reflects declines in the linear advertising
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growth and pricing increases for Paramount+, but were negatively impacted by linear subscriber declines.
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from lower linear affiliate revenues. The comparison for both periods also reflects the impact from the integration
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2025 Successor and Predecessor periods benefited from the third quarter 2025 releases of The Naked Gun and
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Content costs in the 2026 periods and the 2025 Successor period include costs associated with Skydance Media’s
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impact of higher sports costs for Paramount+ and cost reductions for broadcast and cable programming.
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streaming services. In addition, theatrical distribution costs were impacted by the mix of films in each period.
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Sections 280G and 4999 of the Internal Revenue Code. SG&A expenses also reflect reductions to employee
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severance payments are being provided to certain eligible employees who voluntarily elected to participate. In
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facility (see Capital Structure). Credit facility borrowings were repaid in October 2026 with the funding from the
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While the uncertain tax position meets the more-likely-than-not recognition threshold, in applying the
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measurement assessment, the Company currently believes that a portion of the benefit may not be realized upon
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settlement and has recorded a reserve during the third quarter of 2026 for this item, which is reflected within the
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(a) On July 4, 2025, the U.S. government enacted tax legislation, which included the extension of certain expired or expiring tax provisions,
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including a favorable change to the interest deduction limitation, and modifications to certain international tax provisions. The
Read in the 10-Q ↗

legislation has multiple effective dates with certain provisions effective in 2025. A favorable change to the interest deduction limitation
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resulted in the reversal of the valuation allowance on our interest limitation carryforward deferred tax asset of $114 million. The net
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discrete tax benefits for the 2025 Predecessor periods reflect this reversal, partially offset by a reserve for uncertain tax positions.
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adjustment to fair value of our debt, as well as the decrease in programming assets.
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transaction-related items.” For the Predecessor period from July 1 - August 6, 2025, stock-based compensation expense of $10
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(b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP
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August 7 - September 30, 2025. Licensing and other and total Supplemental Non-GAAP Pro Forma Revenues also include $12 million
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of Skydance Media revenues after the elimination of intercompany revenues from Paramount Global during the Predecessor period
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from July 1 - August 6, 2025. While the Successor and Predecessor periods are distinct reporting periods, revenues were not impacted
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by the new accounting basis established for Paramount Global’s net assets, and are supplementally presented on a pro forma combined
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Successor period were also impacted by an increase in the value of library content resulting from the pushdown of
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the releases of Paw Patrol 3: The Dino Movie and Heart of the Beast. Advertising and marketing expenses for the
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2025 Successor period primarily reflected costs for fourth quarter 2025 releases, and for the 2025 Predecessor
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period primarily reflected marketing costs associated with the releases of Smurfs and The Naked Gun.
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(b) Supplemental Non-GAAP Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the
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Forma Revenues also include $503 million of Skydance Media revenues after the elimination of intercompany revenues from
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are distinct reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net
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assets, and are supplementally presented on a pro forma combined basis to help investors view these revenues in a manner
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Successor period were also impacted by an increase in the value of library content resulting from the pushdown of
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(b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP
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periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net assets, and are
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mainly for the UFC, and ongoing investment in original programming, partially offset by the impact of the
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events and investment in original programming, partially offset by the pro forma revenue growth.
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(b) Supplemental Non-GAAP Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the
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periods are distinct reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s
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net assets, and are supplementally presented on a pro forma combined basis to help investors view these revenues in a manner
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Paramount+, mainly for the UFC, and ongoing investment in original programming, partially offset by the impact
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(b) Supplemental Non-GAAP Pro Forma Revenues for the third quarter of 2025 reflect the combination of the Predecessor Non-GAAP
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impacted by the new accounting basis established for Paramount Global’s net assets, and are supplementally presented on a pro
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(b) Supplemental Non-GAAP Pro Forma Revenues for the nine months ended September 30, 2025 reflect the combination of the
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reporting periods, revenues were not impacted by the new accounting basis established for Paramount Global’s net assets, and are
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Predecessor period from January 1 - August 6, 2025 included costs associated with the broadcast of the National
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billion as of September 30, 2026. Following the completion of the WBD Merger, and the related financing
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Date (excluding finance leases) were $20.29 billion. We routinely assess our capital structure and opportunistically
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In connection with the WBD Merger we issued or assumed additional debt with an aggregate principal amount of
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$72.1 billion. We used the proceeds of the new borrowings, together with cash on hand and the proceeds of the
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PIPE Transaction, to fund the acquisition consideration, repay WBD’s term loans, purchase notes of the WBD
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Issuers in the Tender Offers, repay all borrowings under the Unsecured Credit Facility, and pay related fees and
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general corporate purposes. As a result of the increase in our indebtedness, we expect our interest payments to
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increase significantly in future periods, with annual interest payments expected to be approximately $6 billion. See
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Capital Structure below for a description of our debt instruments, including their interest rates, maturities and
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In addition, we expect to pay down and terminate WBD’s $4.0 billion accounts receivable securitization program
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(of which $3.9 billion was utilized at the time of the WBD Merger) within 90 days of the Closing Date.
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also affect the applicable margins on borrowings under the Pro Rata Credit Agreement (see “Capital Structure”
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unamortized discount of $390 million and unamortized deferred financing fees of $71 million, and a reduction of
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applicable issuance within interest expense. At September 30, 2026 and December 31, 2025, the total net unamortized
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In January 2026, we repaid our $347 million of 4.0% senior notes at maturity and in October 2026 we repaid our
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increasing the commitments from $3.50 billion to $5.00 billion. The Unsecured Credit Facility was used for
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general corporate purposes and to support commercial paper borrowings, if any and also allowed us to borrow, at
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Closing Date, in connection with the consummation of the WBD Merger, we repaid all borrowings with the
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credit agreement for the Unsecured Credit Facility) for the trailing twelve-month period at the end of each quarter.
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In connection with the WBD Merger we issued or assumed additional debt with an aggregate principal amount of
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$72.1 billion. This amount consists of (i) $56.9 billion of debt incurred to finance the WBD Merger, comprised of
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$5.0 billion of borrowings under the Term A Loan Facilities and $9.5 billion of Term B-1 Loans, each under the
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Pro Rata Credit Agreement, $30.0 billion of First Lien Senior Secured Notes (the “First Lien Notes”), and
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$12.4 billion of Second Lien Senior Secured Notes (the “Second Lien Notes”), (ii) $12.6 billion of Second Lien
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Senior Secured Notes issued in the Exchange Offers (the “Second Lien Exchange Notes”), and (iii) $2.7 billion of
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other outstanding unsecured notes and debentures of the WBD Issuers that we assumed. The newly issued debt is
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consummation of the acquisition of WBD, the termination of the Unsecured Credit Facility, and other customary
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under each of the Term A Loan Facilities. The commitments under the Revolving Credit Facility became available
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on the Closing Date, and no amounts were drawn. Also on the Closing Date, we entered into Amendment No. 1 to
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incremental tranche of term B loans consisting of (i) $8.5 billion of seven-year U.S. dollar-denominated term B-1
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loans (the “Dollar Term B-1 Loans”) and (ii) €850 million of seven-year euro-denominated term B-1 loans (the
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“Euro Term B-1 Loans” and, together with the Dollar Term B-1 Loans, the “Term B-1 Loans”). We borrowed the
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full amount of the Term B-1 Loans on the Closing Date. The Term B-1 Loans mature on the seventh anniversary of
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The loans drawn under the Term A Loan Facilities and the Revolving Credit Facility bear interest at a rate
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The Dollar Term B-1 Loans bear interest, at our option, at a rate per annum equal to either the Alternate Base Rate
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(as defined in the Pro Rata Credit Agreement) or Term SOFR plus a margin based on our Leverage Ratio that
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ranges between 1.75% and 1.50% for Alternate Base Rate loans and 2.75% and 2.50% for Term SOFR Rate loans.
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The Euro Term B-1 Loans bear interest at a rate per annum equal to EURIBOR plus a margin based on our
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Leverage Ratio that ranges between 2.75% and 2.50%. Beginning with the quarter ending December 31, 2029, the
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Dollar Term B-1 Loans will amortize at 1.00% of the initial principal amount per annum in quarterly installments,
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with the remaining balance payable at maturity. No regular amortization is required with respect to the Euro Term
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Interest rates on benchmark rate borrowings under the Pro Rata Credit Agreement, including the Term A Loan
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Facilities and the Term B-1 Loans, reset at the beginning of each interest period, and as a result, interest expense
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on these borrowings will fluctuate with changes in market interest rates. In addition, the applicable margins may
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change based on changes in our corporate family rating or the Leverage Ratio, as applicable.
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The obligations under the Pro Rata Credit Agreement have been secured on a first lien basis on all or substantially
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all of the assets of Skydance and its U.S. subsidiaries (including Paramount Global, Skydance Media, LLC, and
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each of its respective U.S. subsidiaries) that are guarantors, excluding real property and subject to other customary
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exceptions and a cap on the amount of assets and property of Paramount Global that can be subject to a lien
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securing the Pro Rata Credit Agreement. On the date Skydance achieves certain credit ratings and satisfies certain
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other conditions as specified in the Pro Rata Credit Agreement (such date, the “Investment Grade Fall-Away
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obligations by the subsidiary guarantors will be released (subject to certain exceptions).
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The Pro Rata Credit Agreement contains customary representations and warranties and also contains financial
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covenants that require our Leverage Ratio and First Lien Net Leverage Ratio (each as defined in the Pro Rata
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Credit Agreement) not to exceed 5.50x and 3.25x, respectively, in each case, at the end of each fiscal quarter. On
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and after the Investment Grade Fall-Away Date, the First Lien Net Leverage Ratio financial covenant will cease to
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apply and the Leverage Ratio financial covenant will be modified requiring that our Leverage Ratio not exceed
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thereunder may be voluntarily reduced, without penalty, other than customary breakage costs and, in the case of
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the Term B-1 Loans, a 1.00% premium on Term B-1 Loans that are prepaid, converted or subjected to a pricing
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On October 5, 2026, we issued, in private placements exempt from registration under the Securities Act of 1933, as
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amended (the “Securities Act”), $30.0 billion aggregate principal amount of First Lien Notes and $11.4 billion
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aggregate principal amount of Second Lien Notes, together with €885 million aggregate principal amount of
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Second Lien Notes denominated in euros (First Lien Notes together with the Second Lien Notes, the “Senior
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Secured Notes”). The Senior Secured Notes bear interest at fixed rates, payable semi-annually in arrears, and
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The First Lien Notes are secured by first-priority liens on all or substantially all of the assets of Skydance and the
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Guarantors (as defined below) (the “Collateral”), subject to permitted liens and certain exceptions. The First Lien
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Notes are guaranteed on a senior secured basis by each of Skydance’s existing and future wholly owned domestic
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subsidiaries that is a borrower under or guarantees obligations under the Pro Rata Credit Agreement (collectively,
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the “Guarantors”), subject to certain exceptions. The Second Lien Notes are secured by second-priority liens on the
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Collateral, subject to permitted liens and certain exceptions. The Second Lien Notes are guaranteed on a senior
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secured basis by the Guarantors. Upon the occurrence of an Investment Grade Event (as defined in the applicable
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supplemental indenture for each series of notes with respect to the Senior Secured Notes, subject to certain
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conditions (including the concurrent release of liens and guarantees securing other secured debt and the Company
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having no greater than $250 million of term B loans outstanding at such time), the liens on the Collateral securing
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such series of notes will be released and the note guarantees with respect to such series will be released. In
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addition, certain covenants set forth in the applicable supplemental indenture relating to asset sales and future
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subsidiary guarantors will cease to apply to such series of notes. These releases and covenant suspensions are
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permanent and will not be reinstated upon any subsequent downgrade or withdrawal of the applicable investment
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Pursuant to the registration rights agreement, dated as of October 5, 2026 (the “First Lien Senior Secured Notes
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Registration Rights Agreement”), we have agreed to use commercially reasonable efforts to (i) file a registration
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statement with respect to a registered offer to exchange each series of the First Lien Notes for new notes with terms
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substantially identical in all material respects to such series of the First Lien Notes (such new notes, the “Exchange
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Notes”) and cause the registration statement to be declared effective under the Securities Act within 730 days of
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October 5, 2026, or (ii) in certain circumstances, file a shelf registration statement with respect to resales of the
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Each series of First Lien Notes may be redeemed at our option, in whole or in part, at a “make-whole” premium
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prior to the applicable par call date and at 100% of principal on or after that date. For each series of First Lien
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Notes, the par call date is within one to six months of maturity. For the Second Lien Notes, prior to October 15,
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2028 (2031 Euro and 2031 Second Lien Notes), October 15, 2029 (2034 Second Lien Notes) and October 15, 2031
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(2036 Second Lien Notes), we may redeem each series, in whole or in part, at a “make-whole” premium.
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Thereafter each series of Second Lien Notes can be redeemed at call premiums starting at 3.500% to 4.563% of
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principal and declining to zero one year prior to maturity (2031 Euro and 2031 Second Lien Notes) and three years
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prior to maturity (2034 and 2036 Second Lien Notes). In addition, before October 15, 2028 (2031 Euro and 2031
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Second Lien Notes) or October 15, 2029 (2034 and 2036 Second Lien Notes), we may redeem up to 40% of a
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series of Second Lien Notes with the proceeds of equity offerings at 107.0% to 109.125% of principal, and up to
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10% of such a series per calendar year at 103% of principal, plus in each case accrued and unpaid interest.
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In addition, upon a change of control triggering event, holders of our Senior Secured Notes may require us to
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In May 2026, we commenced offers to exchange any and all of certain outstanding senior notes issued by the
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WBD Issuers for Second Lien Exchange Notes newly issued by Skydance and also commenced offers to purchase
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for cash two additional series of senior notes of the WBD Issuers. The Exchange Offers expired on October 6,
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2026 following the closing of the WBD Merger, and holders of approximately 99.15% of the notes eligible to
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participate in the Exchange Offers validly tendered their notes. Accordingly, upon settlement on October 9, 2026,
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Notes and €546.5 million aggregate principal amount of euro-denominated Second Lien Exchange Notes. Such
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notes were issued in private placements exempt from registration under the Securities Act. The dollar-denominated
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notes pay interest semi-annually, and the euro-denominated notes pay interest annually, in each case in arrears. The
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Senior Secured Exchange Notes Face Value ───────────────────────────────────────────────────────────────────────────── 6.304% Second Lien Exchange Notes due 2029 $1,344 6.25% Second Lien Exchange Notes due 2029 654 4.875% Second Lien Exchange Notes due 2030 901 4.904% Second Lien Exchange Notes due 2032 2,674 5.00% Second Lien Exchange Notes due 2037 447 6.35% Second Lien Exchange Notes due 2040 432 4.95% Second Lien Exchange Notes due 2042 130 5.05% Second Lien Exchange Notes due 2042 4,065 4.875% Second Lien Exchange Notes due 2043 141 5.20% Second Lien Exchange Notes due 2047 3 5.30% Second Lien Exchange Notes due 2049 248 5.141% Second Lien Exchange Notes due 2052 944 5.802% Second Lien Exchange Notes due 2030 (€235 million) 263 5.068% Second Lien Exchange Notes due 2033 (€311 million) 349 Total Senior Secured Exchange Notes $12,595
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The Exchange Offers have been accounted for as debt modifications. Accordingly, the Second Lien Exchange
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The Second Lien Exchange Notes are senior secured obligations, guaranteed by the Guarantors and secured by
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second-priority liens on the Collateral. They are junior in lien priority to the First Lien Notes and the loans and
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commitments under the Pro Rata Credit Agreement, and equal in lien priority to the Second Lien Notes.
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The Second Lien Exchange Notes are redeemable at our option. Most series may be redeemed at a “make-whole”
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price before their par call date, which is between one and six months before maturity, and at 100% of principal on
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or after that date, plus accrued and unpaid interest in each case. The 2032 Second Lien Exchange Notes and 2052
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Second Lien Exchange Notes follow the same terms but cannot be redeemed before March 15, 2027. The 6.35%
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2040, 4.95% 2042, and 4.875% Second Lien Exchange Notes have no par call date and may be redeemed at any
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time at a “make-whole” price. The euro-denominated Second Lien Exchange Notes may also be redeemed in
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whole at par upon certain changes in U.S. tax law. The change of control, tender offer, covenant and Investment
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Grade Event provisions of the Second Lien Exchange Notes are substantially the same as those of the Second Lien
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Notes issued on October 5, 2026 described above. The Second Lien Exchange Notes do not have registration
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Concurrent with the Exchange Offers, on October 9, 2026 we purchased $2.40 billion in aggregate principal
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amount of senior notes of the WBD Issuers (approximately 98.83% of the outstanding principal amount of those
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series) for $2.38 billion in cash, plus accrued and unpaid interest, and the purchased notes were cancelled.
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in May 2027, contains customary representations and warranties and covenants substantively similar to the Credit
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to integrate successfully and to achieve anticipated synergies and financial targets; risks that we may not achieve
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the expected run-rate synergies or other financial goals within the expected time frames or at all; risks related to the
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commitments we made under the states consent decree; potential disruption to business operations and
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ongoing integration; the risk of stockholder litigation and other litigation relating to the WBD Merger, including
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anticipated synergies, including in the amounts or on the timelines anticipated to realize such synergies; litigation
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risks related to our ability to incur substantially more debt and our ability to meet the financial and other covenants
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contained in the agreements governing our substantial indebtedness; risks relating to our ability to deleverage the
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business in accordance with management’s targets, including risks arising from assumptions, uncertainties and
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contingencies that may affect our ability to reduce indebtedness; risks relating to management’s ability to execute
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on our strategic plan and improve our financial profile and cash flows from operations; risks relating to any capital
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or other financing we may have to raise in order to reduce our indebtedness following the WBD Merger; risks of
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Market risk

Updates to our market risk exposure from those described in Item 7A, “Quantitative and Qualitative Disclosures
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Loans and $8.5 billion and €850 million of Term B-1 Loans under our Pro Rata Credit Agreement (see Note 8 to
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the consolidated financial statements). These loans bear interest at variable rates based on Term SOFR or, for the
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Euro Term B-1 Loans, EURIBOR, plus an applicable margin, and expose us to changes in market interest rates. As
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of October 6, 2026, the aggregate principal amount of our variable-rate borrowings was approximately $14.5
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billion. A hypothetical 1.00% increase or decrease in the applicable benchmark rates would increase or decrease
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our annual interest expense by approximately $145 million. Our senior secured notes, including the second lien
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secured exchange notes issued in the Exchange Offers, bear interest at fixed rates.
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The Euro Term B-1 Loans and our euro-denominated second lien senior secured notes expose us to risk from
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movements in foreign currency exchange rates when translating from euros to U.S. dollars. We entered into fixed-
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for-fixed cross-currency swaps to hedge this exposure on the second lien senior secured notes, which are
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designated as fair value hedges. The Euro Term B-1 Loans were designated as hedges of our net investment in
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Risk Factors

used in the section entitled “Risks Relating to the Warrants” but not defined in that section have the meanings
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The commitments we made under the States Consent Decree restrict how we operate our business, raise our
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costs and may require us to divest certain assets. Any failure to comply could subject us to monetary payments,
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twelve states (collectively, the “Plaintiff States”). The States Consent Decree requires the combined company and
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its subsidiaries to meet a broad set of commitments over a five-year commitment period. Among other things, the
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• release at least 30 to 32 films in the United States annually, subject to minimums for wide-release,
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independent, self-produced and higher-budget films, with theatrical windows of at least 45 days and no
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• comply with negotiation obligations regarding affiliation terms for the Company’s and WBD’s basic cable
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portfolios; spend at least $300 million more annually on U.S. production than combined 2025 levels, retain and
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• fund $9.5 million annually in workforce and arts programs and $5 million annually for an Independent Film
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• establish a News Editorial Independence Board for CBS News and CNN and maintain Pluto TV as a free, ad-
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• comply with monitoring and reporting obligations and reimburse up to $40 million of the Plaintiff States’ fees
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These commitments restrict how and when we release films and will increase our costs. They may also limit our
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Additionally, if we fail to comply, we could face adverse consequences, including the divestiture of Miramax
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Studios, a $30 million payment for each film shortfall and the divestiture of certain cable networks. Any divestiture
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could occur on unfavorable terms, and non-compliance could also lead to enforcement actions and reputational
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While we have estimated the transaction and integration expenses we expect to incur, factors beyond our control
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consists of (i) $56.9 billion of debt incurred to finance the WBD Merger, comprised of $5.0 billion of borrowings
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$30.0 billion of First Lien Senior Secured Notes, and $12.4 billion of Second Lien Senior Secured Notes, (ii)
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subsidiaries of WBD (the “WBD Issuers”), and (iii) $2.7 billion of other outstanding unsecured notes and
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debentures of the WBD Issuers that we assumed. The foregoing indebtedness was incurred (or assumed) following
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consolidated financial statements. As a result, such indebtedness is in addition to our debt with an aggregate
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principal amount of $16.29 billion as of September 30, 2026 (of which $1.75 billion was repaid subsequent to
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within the meaning of Rule 144 of the U.S. Securities Act of 1933, as amended (the “Securities Act”), subject to a
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holding period pursuant to Rule 144. The participants in the PIPE Transaction entered into a registration rights
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agreement that entitles them to certain demand, piggyback and resale registration rights. Certain participants have
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also entered into lock-ups that prohibit transfers of shares acquired in the PIPE Transaction for a period of 180
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days without the prior consent of the Company, subject to certain carveouts. Such shares may be sold in the public
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market only if registered or if they qualify for an exemption from registration, including the exemptions pursuant
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to Rule 144. Consequently, the public float for our Class B Common Stock is smaller than it would be if the
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ownership of our Class B Common Stock were less concentrated. If we do not increase our public float following
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An active public market for the Warrants may not be sustained, which would adversely affect the liquidity and
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The Warrants are subject to trading dynamics over which we have no control. An active and orderly trading market
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for the Warrants may not be sustained. The trading market for the Warrants may lack adequate size, liquidity or
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price transparency or may have an unusually high bid-ask spread. Warrantholders may be unable to sell their
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Warrants at a price that is favorable to such Warrantholders. The Warrants were distributed all at once, which
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could lead to demand and supply imbalances and negatively impact the trading price of the Warrants, particularly
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The trading price for the Warrants may bear little or no relationship to traditional valuation methods, or to the
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The trading price of the Warrants may have little or no relationship to, and may be significantly lower, or at times
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higher, than the price that would otherwise be established using traditional indicators of value, such as our future
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prospects and those of our industry in general; future potential revenues, earnings, cash flows, and other financial
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and operating information, or multiples thereof; market prices of securities and other financial and operating
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information of companies engaged in activities similar to ours; and the views of research analysts. Warrantholders
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who do not intend to hold the Warrants may sell them, which may create downward pressure on the trading price
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In order to hedge their financial positions, Warrantholders may enter into hedging transactions with respect to our
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Class B Common Stock or other securities of ours, may unwind or adjust hedging transactions and may purchase
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or sell large blocks of our Class B Common Stock or other securities in one or more market transactions, including
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Stock or such other securities will depend in part on market conditions and cannot be known in advance, but any of
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Warrantholders may lose some or all of their financial investment after exercising a Warrant.
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Warrantholders may incur a financial or other loss upon or subsequent to the exercise of a Warrant due to a drop in
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our stock price, or by a failure to timely deliver shares as of any particular date after exercise, or for other reasons.
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received upon exercise of a Warrant at the Exercise Price for Physical Settlement, the aggregate value of Class B
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Common Stock so received per Warrant must be more than the Exercise Price of such Warrant, which is initially
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$12.00 per share. There can be no assurance that the market price of our Class B Common Stock will exceed the
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Exercise Price for Physical Settlement at any time prior to the expiration of the Warrants. To the extent the market
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unable to resell shares at or above the price at which they acquired them through the exercise of Warrants for
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Exercise Price for Physical Settlement, in which case investors could incur substantial losses.
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Stockholders or Warrantholders or outside investors may speculate on the direction of movements in the price of
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involve long and short exposures. Sudden changes in demand or supply for our Class B Common Stock or
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Warrants due to speculation or other reasons may create trading anomalies that add volatility to the trading price of
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these securities. The volatility or direction of our stock price or Warrant price may be unrelated or disproportionate
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to our operating results, which could cause significant losses to such investments.
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We may designate an Early Expiration Date for the Warrants if certain stock price conditions are satisfied
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following the date that is the third anniversary of the issuance of the Warrants, which could shorten the period
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Following the date that is the third anniversary of the issuance of the Warrants, or October 13, 2029, if the Early
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Expiration Price Condition is satisfied, we may, in our sole discretion, designate an Early Expiration Date for the
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Warrants that is earlier than the Scheduled Expiration Date. As a result, Warrantholders may have less time to
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decide whether to exercise Warrants than if the Warrants remained outstanding until the Scheduled Expiration
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Date. This could require Warrantholders to make investment decisions regarding the exercise of their Warrants
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earlier than they may otherwise have chosen, which could adversely affect the value of the Warrants.
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On October 13, 2026, we issued approximately 470.7 million Warrants, each of which is exercisable initially for
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one share of Class B Common Stock. Subject to the adjustment provisions of the Warrant Agreement, if all
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outstanding Warrants are exercised through Physical Settlement, we would issue approximately 470.7 million
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Stock upon exercise of the Warrants, and the resale of such shares on the open market after their issuance, or the
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perception that such sales could occur, could result in significant downward pressure on the stock price for shares
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In general, Warrantholders will not be entitled to any rights with respect to our Class B Common Stock, including,
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without limitation, voting rights and rights to receive any dividends or other distributions on our Class B Common
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Stock, but Warrantholders will be subject to all changes affecting our Class B Common Stock.
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Since August 7, 2025, we have declared five quarterly cash dividends of $0.05 per share on our Class A and Class
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Stock. Additionally, although the Warrants will be adjusted for certain distributions on our Class B Common Stock
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as described in the Prospectus, the Warrants will not be adjusted for any regular quarterly cash dividends that are in
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the aggregate less than or equal to $0.05 per share of Class B Common Stock. Any determination to declare or pay
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dividends, including whether to continue paying our current quarterly dividend or to increase, reduce, suspend or
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discontinue it, would be made by our Board of Directors and would depend upon our results of operations,
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financial condition, contractual restrictions, restrictions imposed by applicable law and other factors that the Board
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The Warrants do not automatically exercise, and any Warrant not exercised prior to the Expiration Date will
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The Warrants do not automatically exercise, even if the value of our Class B Common Stock receivable upon
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exercise of a Warrant exceeds the Exercise Price. Warrantholders are entitled to exercise the full number of
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Warrants they hold or any portion thereof. Any Warrants that are not exercised (including due to failure to pay the
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Exercise Price when due) during the Exercise Period will expire unexercised, meaning the Warrants will no longer
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Warrantholders may be subject to tax upon an adjustment to the Exercise Price or the Number of Shares even
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The Exercise Price and the Number of Shares are subject to adjustment in certain circumstances. To the extent any
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such adjustment or failure to adjust results in an increase in Warrantholders’ proportionate interest in our assets or
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our earnings and profits, Warrantholders may be deemed to have received for U.S. federal income tax purposes a
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taxable dividend to the extent deemed paid out of our earnings and profits without the receipt of any cash. If
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Warrantholders are Non-U.S. Holders, such deemed dividend generally will be subject to U.S. federal withholding
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tax, which may be set off against shares of our Class B Common Stock to be delivered upon exercise of Warrants.
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10-Q against the 10-K

The 10-Q's risk factors against the 10-K

Item 1A of the 10-Q filed Nov 9, 2026 against Item 1A of the 10-K filed Feb 25, 2026. A 10-Q repeats only the risks that changed, so a 10-K paragraph that is missing from it is not counted as removed. Added is a paragraph with nothing like it in the 10-K, Reworded a sentence that is in both with several words changed, Quiet changes a sentence in both where one to four words changed and one is a hedge or a modal (~~cut words struck through~~, new words highlighted and underlined). Text on the page, not a score; each links to the filing at sec.gov.

What the 10-Q itself says about its risk factors:
In addition to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2025
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All 247 Added 241 Reworded 6 Quiet changes 0