Financial Performance - For the three months ended September 30, 2024, revenues decreased 6% to $6.73 billion compared to $7.13 billion in the same period of 2023[155]. - Operating income decreased 46% to $337 million for the three months ended September 30, 2024, impacted by restructuring charges and impairment charges totaling $425 million[156]. - The net loss from continuing operations attributable to Paramount was $4 million, or $0.01 per diluted share, compared to net earnings of $247 million, or $0.36 per diluted share, in the prior year[158]. - For the nine months ended September 30, 2024, revenues decreased 4% to $21.23 billion, with declines in licensing and theatrical releases, partially offset by growth in streaming services[160]. - The operating loss for the nine months ended September 30, 2024, was $5.40 billion, significantly higher than the $855 million loss in the prior year, due to programming and impairment charges[161]. - The net loss from continuing operations attributable to Paramount for the nine months ended September 30, 2024, was $5.98 billion, or $9.04 per diluted share, compared to a loss of $1.29 billion, or $2.04 per diluted share, in the same period of 2023[163]. - Adjusted net earnings from continuing operations attributable to Paramount improved by $753 million, or $1.17 per diluted share, reflecting higher Adjusted OIBDA and lower interest expense[163]. Revenue Breakdown - Total revenues for the three months ended September 30, 2024, decreased by 6% to $6,731 million compared to $7,133 million for the same period in 2023[176]. - Advertising revenue increased by 2% to $2,174 million, accounting for 32% of total revenues in Q3 2024[176]. - Affiliate and subscription revenue decreased by 1% to $3,215 million, representing 48% of total revenues[176]. - Theatrical revenue saw a significant decline of 71%, dropping to $108 million from $377 million in the prior year[176]. - Licensing and other revenue decreased by 9% to $1,234 million, making up 18% of total revenues[176]. - Direct-to-Consumer revenues increased by 10% to $1.860 billion for the three months ended September 30, 2024, compared to $1.692 billion in 2023[220]. - Advertising revenues increased by 18%, driven by growth in impressions for Paramount+ and Pluto TV[242]. - Subscription revenues rose by 7%, attributed to the increase in Paramount+ subscribers and domestic pricing adjustments[243]. Adjusted OIBDA - Adjusted OIBDA increased 20% to $858 million for the three months ended September 30, 2024, driven by improved results from streaming services[157]. - Adjusted OIBDA for the nine months ended September 30, 2024, was $2,712 million, up from $1,870 million in the same period of 2023[167]. - Adjusted OIBDA for the three months ended September 30, 2024, increased by 20% to $858 million from $716 million in 2023[222]. - Adjusted OIBDA improved by $287 million to $49 million, reflecting revenue growth and lower marketing and content costs[245]. Impairment and Charges - Impairment charges for the nine months ended September 30, 2024, totaled $6,100 million, significantly impacting the financial results[172]. - The company recorded programming charges of $1.12 billion in the first quarter of 2024 related to content strategy changes, including $909 million for impairment of content[192]. - A goodwill impairment charge of $5.98 billion was recorded for the Cable Networks reporting unit during the second quarter of 2024[198]. - The company incurred impairment charges totaling $6.10 billion for the nine months ended September 30, 2024, impacting net earnings significantly[214]. Debt and Cash Flow - The total notes and debentures outstanding as of September 30, 2024, were $14.62 billion, with a weighted average interest rate of 5.17%[205]. - Long-term debt obligations due over the next five years were $2.64 billion as of September 30, 2024[266]. - Total debt at September 30, 2024, was $14.62 billion, slightly up from $14.60 billion at December 31, 2023[280]. - Net cash flow from operating activities for the nine months ended September 30, 2024, was $584 million, compared to a net use of cash of $174 million in the same period of 2023[270]. - Operating cash flow from continuing operations increased due to lower spending on content, compensation, and marketing[272]. - Net cash flow provided by operating activities for the nine months ended September 30, 2024, was $198 million, compared to $288 million for the same period in 2023[272]. Strategic Transactions - Paramount entered into a transaction agreement with Skydance Media, involving an investment of up to $6.0 billion into a new holding company, New Paramount[147]. - The transactions are expected to close in the first half of 2025, subject to customary closing conditions and regulatory approvals[149]. - The company is subject to potential litigation related to the Transactions that could delay or prevent their closing[325]. Market Risks and Challenges - The company faces risks related to its streaming business and advertising revenues due to market conditions and changes in consumer viewership[325]. - There are ongoing changes in business strategy, including investments in new businesses, products, and technologies[325]. - The company is exposed to potential losses from asset impairment charges for goodwill and intangible assets[325]. - Risks related to environmental, social, and governance (ESG) matters are acknowledged[325]. - The company is navigating challenges related to labor disputes and the retention of key employees[325]. Other Financial Metrics - The effective income tax rate for the nine months ended September 30, 2024, was reported at 5.6%, with an adjusted effective income tax rate of 21.8%[172]. - The effective income tax rate for the three months ended September 30, 2024, was 37.5%, while the nine-month rate was 5.6%[208]. - Dividends declared per common share for the nine months ended September 30, 2024, were $0.15, down from $0.34 in 2023[278].
Paramount (PARAA) - 2024 Q3 - Quarterly Report