Paramount (PARA) - 2025 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements Presents Paramount Global's unaudited consolidated financial statements for Q1 2025 and 2024, including operations, balance sheets, cash flows, and detailed notes Consolidated Statements of Operations Consolidated Statements of Operations (in millions, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $7,192 | $7,685 | | Operating income (loss) | $550 | $(417) | | Net earnings (loss) attributable to Paramount | $152 | $(554) | | Basic net earnings (loss) per common share attributable to Paramount | $0.23 | $(0.87) | | Diluted net earnings (loss) per common share attributable to Paramount | $0.22 | $(0.87) | Consolidated Statements of Comprehensive Income Consolidated Statements of Comprehensive Income (in millions) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net earnings (loss) (Paramount and noncontrolling interests) | $161 | $(544) | | Other comprehensive income (loss), net of tax (Paramount and noncontrolling interests) | $84 | $(59) | | Comprehensive income (loss) attributable to Paramount | $235 | $(613) | Consolidated Balance Sheets Consolidated Balance Sheets (in millions) | Metric | At March 31, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $45,396 | $46,172 | | Total Liabilities | $28,468 | $29,390 | | Total Equity | $16,928 | $16,782 | Consolidated Statements of Cash Flows Consolidated Statements of Cash Flows (in millions) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash flow provided by operating activities | $180 | $260 | | Net cash flow used for investing activities | $(69) | $(128) | | Net cash flow used for financing activities | $(139) | $(187) | | Net increase (decrease) in cash and cash equivalents | $12 | $(76) | Consolidated Statements of Stockholders' Equity Total Paramount Stockholders' Equity (in millions) | Metric | At March 31, 2025 | At December 31, 2024 | | :--- | :--- | :--- | | Total Paramount stockholders' equity | $16,538 | $16,320 | Notes to Consolidated Financial Statements Note 1) Basis of Presentation - Paramount Global is a global media, streaming, and entertainment company with segments including TV Media, Direct-to-Consumer, and Filmed Entertainment[23][26] - Paramount entered into a transaction agreement with Skydance Media, LLC on July 7, 2024, to become subsidiaries of a new holding company, New Paramount, expected to close in the first half of 2025[24][30] - The Skydance Transactions involve an investment of up to $6.0 billion into New Paramount by NAI Equity Investors and a cash-stock election for existing Paramount stockholders[25][28] Weighted Average Shares for EPS Calculation (in millions) | (in millions) | March 31, 2025 | March 31, 2024 | | :--- | :--- | :--- | | Weighted average shares for basic EPS | 672 | 654 | | Dilutive effect of shares issuable under stock-based compensation plans | 6 | — | | Weighted average shares for diluted EPS | 678 | 654 | - New accounting guidance for income tax disclosures is effective for the year ended December 31, 2025, and for disaggregation of income statement expenses for the year ended December 31, 2027[45][46] Note 2) Programming and Other Inventory Programming and Other Inventory (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Film Group Monetization | $12,049 | $12,307 | | Individual Monetization | $2,914 | $2,918 | | Home entertainment | $22 | $26 | | Total programming and other inventory | $15,086 | $15,353 | | Less current portion | $1,054 | $1,429 | | Total noncurrent programming and other inventory | $14,032 | $13,924 | Amortization of Programming and Production Costs (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Acquired program rights | $1,511 | $1,782 | | Internally-produced television and film programming, and acquired libraries: Individual monetization | $369 | $298 | | Internally-produced television and film programming, and acquired libraries: Film group monetization | $1,299 | $1,060 | - During Q1 2024, Paramount recorded $1.12 billion in programming charges due to a shift in content strategy, resulting in content removal, project abandonment, and contract terminations. These charges included $909 million for content impairment and $209 million for development cost write-offs and contract termination costs[52] Note 3) Restructuring and Transaction-Related Items Restructuring and Transaction-Related Items (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Severance | $— | $155 | | Exit costs | $65 | $31 | | Restructuring charges | $65 | $186 | | Transaction-related items | $20 | $— | | Total Restructuring and transaction-related items | $85 | $186 | - Restructuring charges in Q1 2025 and Q1 2024 were primarily for lease asset impairment ($65 million and $31 million, respectively) due to real estate footprint reduction. Q1 2024 also included $155 million in severance costs from global workforce strategic changes[55][56] - Transaction-related items in Q1 2025 included $20 million in legal, advisory, and professional fees related to the Skydance Transactions[58] Note 4) Related Parties - National Amusements, Inc. (NAI) is the controlling stockholder, owning approximately 77.4% of Class A Common Stock and 9.4% of combined Class A and B Common Stock as of March 31, 2025[60] - NAI approved the Skydance Transaction Agreement via written consent on July 7, 2024, and agreed to vote its shares in favor of related matters[61] Related Party Transactions with Equity Method Investees (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $69 | $58 | | Operating costs | $24 | $18 | Note 5) Revenues Revenues by Type (in millions) | Revenue Type | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Advertising | $2,513 | $3,096 | | Affiliate and subscription | $3,397 | $3,357 | | Theatrical | $148 | $153 | | Licensing and other | $1,134 | $1,079 | | Total Revenues | $7,192 | $7,685 | - Unrecognized revenues from long-term contracts totaled approximately $6 billion at March 31, 2025, with $2 billion expected in the remainder of 2025, $2 billion in 2026, and $1 billion in 2027 and thereafter[72] - Revenues of $0.2 billion (2025) and $0.1 billion (2024) were recognized from content licensing and theatrical distribution where performance obligations were satisfied in prior periods[75] Note 6) Debt Total Debt (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total debt | $14,507 | $14,501 | | Less current portion | $346 | $— | | Total long-term debt, net of current portion | $14,161 | $14,501 | - Paramount had a $3.50 billion revolving credit facility maturing in January 2027, with no outstanding borrowings as of March 31, 2025[79] - The Credit Facility's maximum Consolidated Total Leverage Ratio was 5.5x for Q1 2025 and will decrease to 4.5x by Q1 2026. Amendments effective upon closing of the Skydance Transactions will increase the cash netting limit to $3.0 billion[80][81] Note 7) Financial Instruments and Fair Value Measurements - The fair value of outstanding notes and debentures was $13.5 billion at March 31, 2025, compared to a carrying value of $14.51 billion[83] - Paramount uses derivative financial instruments, primarily foreign currency forward contracts, to manage exposure to foreign currency exchange rates, with notional amounts of $3.23 billion at March 31, 2025[86][87][88] Assets and Liabilities Measured at Fair Value (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets: Foreign currency hedges | $41 | $45 | | Liabilities: Deferred compensation | $315 | $385 | | Liabilities: Foreign currency hedges | $41 | $48 | Note 8) Variable Interest Entities - Paramount consolidates Variable Interest Entities (VIEs) where it has the power to direct significant activities and the obligation to absorb losses or right to receive benefits[93] Consolidated VIEs Financial Information (in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total assets | $1,860 | $1,825 | | Total liabilities | $209 | $198 | | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenues | $125 | $137 | | Operating loss | $(47) | $(34) | Note 9) Stockholders' Equity - All outstanding Mandatory Convertible Preferred Stock was automatically converted into Class B Common Stock on April 1, 2024, resulting in the issuance of 11.5 million shares of Class B Common Stock[97] Dividends Declared (in millions, except per share amounts) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Class A and Class B Common Stock: Dividends declared per common share | $0.05 | $0.05 | | Class A and Class B Common Stock: Total common stock dividends | $35 | $35 | | Mandatory Convertible Preferred Stock: Dividends declared per preferred share | n/a | $1.4375 | | Mandatory Convertible Preferred Stock: Total preferred stock dividends | n/a | $14 | Changes in Accumulated Other Comprehensive Loss (in millions) | Component | At December 31, 2024 | Other comprehensive income | At March 31, 2025 | | :--- | :--- | :--- | :--- | | Cumulative Translation Adjustments | $(657) | $73 | $(584) | | Net Actuarial Loss and Prior Service Cost | $(947) | $10 | $(937) | | Accumulated Other Comprehensive Loss | $(1,604) | $83 | $(1,521) | | Component | At December 31, 2023 | Other comprehensive loss | At March 31, 2024 | | :--- | :--- | :--- | :--- | | Cumulative Translation Adjustments | $(504) | $(68) | $(572) | | Net Actuarial Loss and Prior Service Cost | $(1,052) | $9 | $(1,043) | | Accumulated Other Comprehensive Loss | $(1,556) | $(59) | $(1,615) | Note 10) Income Taxes - For Q1 2025, Paramount recorded a $100 million income tax provision with an effective tax rate of 29.9%, including a 2.0 percentage point increase from items affecting comparability[104] - For Q1 2024, Paramount recorded a $172 million income tax benefit with an effective tax rate of 27.1%, including a 5.0 percentage point increase from items affecting comparability, primarily programming charges[105] Impact from Items Affecting Comparability on Income Taxes (in millions) | Item (March 31, 2025) | Benefit from Earnings (Loss) Before Income Taxes | (Provision for) Income Taxes | | :--- | :--- | :--- | | Restructuring charges | $(65) | $16 | | Transaction-related items | $(20) | $— | | Gain from dispositions | $35 | $(2) | | Net discrete tax provision | n/a | $(7) | | Item (March 31, 2024) | Benefit from Earnings (Loss) Before Income Taxes | (Provision for) Income Taxes | | :--- | :--- | :--- | | Programming charges | $(1,118) | $275 | | Restructuring charges | $(186) | $46 | | Loss from investment | $(4) | $1 | | Net discrete tax provision | n/a | $(1) | Note 11) Pension and Other Postretirement Benefits Components of Net Periodic Cost (in millions) | Component | Pension Benefits (2025) | Pension Benefits (2024) | Postretirement Benefits (2025) | Postretirement Benefits (2024) | | :--- | :--- | :--- | :--- | :--- | | Interest cost | $50 | $49 | $2 | $2 | | Expected return on plan assets | $(32) | $(34) | $— | $— | | Amortization of actuarial loss (gain) | $18 | $20 | $(4) | $(4) | | Net periodic cost | $36 | $35 | $(2) | $(2) | Note 12) Segment Information - Paramount's reportable segments are TV Media, Direct-to-Consumer, and Filmed Entertainment, with Adjusted OIBDA used as the primary measure of profit and loss[111][210][212] Total Revenues by Segment (in millions) | Segment | 2025 Revenues | % of Total | 2024 Revenues | % of Total | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TV Media | $4,538 | 63 % | $5,231 | 68 % | $(693) | (13)% | | Direct-to-Consumer | $2,044 | 28 | $1,879 | 24 | $165 | 9 | | Filmed Entertainment | $627 | 9 | $605 | 8 | $22 | 4 | | Eliminations | $(17) | — | $(30) | — | $13 | 43 | | Total Revenues | $7,192 | 100 % | $7,685 | 100 % | $(493) | (6)% | Adjusted OIBDA by Segment (in millions) | Segment | 2025 Adjusted OIBDA | 2024 Adjusted OIBDA | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | TV Media | $922 | $1,445 | $(523) | (36)% | | Direct-to-Consumer | $(109) | $(286) | $177 | 62 | | Filmed Entertainment | $20 | $(3) | $23 | n/m | | Corporate/Eliminations | $(101) | $(124) | $23 | 19 | | Stock-based compensation | $(44) | $(45) | $1 | 2 | | Total Adjusted OIBDA | $688 | $987 | $(299) | (30)% | Note 13) Commitments and Contingencies - Paramount had $1.97 billion in outstanding letters of credit and surety bonds at March 31, 2025, including $1.75 billion under a standby letter of credit facility[118] - The company is a defendant in approximately 17,720 pending asbestos claims as of March 31, 2025, down from 18,310 at December 31, 2024. Total costs for settlement and defense of asbestos claims (net of insurance and tax) were $34 million in 2024 and $54 million in 2023[136] - Paramount is involved in multiple lawsuits related to the Skydance Transactions, including class action lawsuits alleging breaches of fiduciary duties and requests for inspection of books and records[124][125][126][127][129][130][131] - A legal dispute with Sony Pictures Television Inc. regarding distribution rights for 'Wheel of Fortune' and 'Jeopardy!' is ongoing, with Paramount appealing a court ruling that declined a preliminary injunction[132][134] Note 14) Supplemental Financial Information Supplemental Cash Flow Information (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Cash paid for interest | $264 | $229 | | Cash paid for income taxes | $27 | $27 | | Noncash additions to operating lease assets | $40 | $45 | - Paramount recorded $35 million in gains from dispositions in Q1 2025, primarily from the sale of a noncore business[141] - In Q1 2024, an additional pretax gain of $12 million was recorded from the sale of Simon & Schuster due to a working capital adjustment[142] Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition Management's analysis of Paramount Global's Q1 2025 financial performance, liquidity, capital resources, and Skydance Transactions Skydance Transactions - Paramount entered into a transaction agreement with Skydance Media, LLC on July 7, 2024, to form a new holding company, New Paramount, with the transaction expected to close in the first half of 2025[144][147] - The NAI Equity Investors will invest up to $6.0 billion into New Paramount for newly issued Class B Common Stock, with up to $4.5 billion funding a cash-stock election for existing Paramount stockholders[145][146] - A termination fee of $400 million would be payable to Skydance under certain specified circumstances if the Transaction Agreement is terminated[147] Overview Consolidated Financial Highlights (GAAP & Non-GAAP, in millions, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Revenues (GAAP) | $7,192 | $7,685 | $(493) | (6)% | | Operating income (loss) (GAAP) | $550 | $(417) | $967 | n/m | | Net earnings (loss) from continuing operations attributable to Paramount (GAAP) | $152 | $(563) | $715 | n/m | | Diluted EPS from continuing operations (GAAP) | $0.22 | $(0.88) | $1.10 | n/m | | Adjusted OIBDA (Non-GAAP) | $688 | $987 | $(299) | (30)% | | Adjusted net earnings from continuing operations attributable to Paramount (Non-GAAP) | $195 | $424 | $(229) | (54)% | | Adjusted diluted EPS from continuing operations (Non-GAAP) | $0.29 | $0.62 | $(0.33) | (53)% | - Revenues decreased 6% to $7.19 billion, primarily due to the absence of Super Bowl LVIII broadcast in Q1 2025, partially offset by growth in licensing and streaming affiliate/subscription revenues[151] - Operating income improved significantly to $550 million from a $417 million loss in the prior year, driven by the absence of $1.12 billion in programming charges from Q1 2024[152] Reconciliation of Non-GAAP Measures - Non-GAAP measures like Adjusted OIBDA and Adjusted Net Earnings exclude items affecting comparability such as restructuring charges, transaction-related items, programming charges, and gains on dispositions, to provide a clearer view of underlying operational performance[158][159] Reconciliation of Operating Income (Loss) to Adjusted OIBDA (in millions) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Operating income (loss) (GAAP) | $550 | $(417) | | Depreciation and amortization | $88 | $100 | | Programming charges | $— | $1,118 | | Restructuring charges | $65 | $186 | | Transaction-related items | $20 | $— | | Gain on dispositions | $(35) | $— | | Adjusted OIBDA (Non-GAAP) | $688 | $987 | Reconciliation of Net Earnings (Loss) and Diluted EPS (in millions, except per share amounts) | Metric (March 31, 2025) | Earnings from Continuing Operations Before Income Taxes | Provision for Income Taxes | Net Earnings from Continuing Operations Attributable to Paramount | Diluted EPS from Continuing Operations | | :--- | :--- | :--- | :--- | :--- | | Reported (GAAP) | $334 | $(100) | $152 | $0.22 | | Items affecting comparability | $50 | $(14) | $43 | $0.07 | | Adjusted (Non-GAAP) | $384 | $(107) | $195 | $0.29 | | Metric (March 31, 2024) | Earnings (Loss) from Continuing Operations Before Income Taxes | Benefit from (Provision for) Income Taxes | Net Earnings (Loss) from Continuing Operations Attributable to Paramount | Diluted EPS from Continuing Operations | | :--- | :--- | :--- | :--- | :--- | | Reported (GAAP) | $(635) | $172 | $(563) | $(0.88) | | Items affecting comparability | $1,308 | $(322) | $987 | $1.50 | | Adjusted (Non-GAAP) | $673 | $(149) | $424 | $0.62 | Consolidated Results of Operations Revenues Consolidated Revenues by Type (in millions) | Revenue Type | 2025 | % of Total | 2024 | % of Total | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Advertising | $2,513 | 35 % | $3,096 | 40 % | $(583) | (19)% | | Affiliate and subscription | $3,397 | 47 | $3,357 | 44 | $40 | 1 | | Theatrical | $148 | 2 | $153 | 2 | $(5) | (3) | | Licensing and other | $1,134 | 16 | $1,079 | 14 | $55 | 5 | | Total Revenues | $7,192 | 100 % | $7,685 | 100 % | $(493) | (6)% | - Advertising revenues decreased 19% due to the absence of the Super Bowl broadcast in Q1 2025. Affiliate and subscription revenues grew 1%, driven by a 6% increase in streaming subscription fees, partially offset by a 5% decline in linear affiliate fees[176][178] Operating Expenses Consolidated Operating Expenses by Type (in millions) | Operating Expenses by Type | 2025 | % of Operating Expenses | 2024 | % of Operating Expenses | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Content costs | $3,861 | 78 % | $3,980 | 79 % | $(119) | (3)% | | Distribution and other | $1,100 | 22 | $1,056 | 21 | $44 | 4 | | Total Operating Expenses | $4,961 | 100 % | $5,036 | 100 % | $(75) | (1)% | - Content costs decreased 3%, primarily due to the absence of Super Bowl-related costs in Q1 2025, partially offset by higher costs for streaming content and recent theatrical releases. Distribution and other operating expenses increased 4% due to higher revenue-sharing costs for streaming services[185][187] Programming Charges - During Q1 2024, Paramount recorded $1.12 billion in programming charges due to a major shift in content strategy, including $909 million for content impairment and $209 million for development cost write-offs and contract termination costs[188] Selling, General and Administrative Expenses - Selling, General and Administrative (SG&A) expenses decreased 7% to $1.54 billion, principally reflecting lower compensation costs following the global workforce restructuring in 2024 and reduced marketing costs[190] Depreciation and Amortization - Depreciation and amortization expense decreased 12% to $88 million, primarily due to technology assets becoming fully depreciated and intangible assets becoming fully amortized[191] Restructuring and Transaction-Related Items Restructuring and Transaction-Related Items (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Severance | $— | $155 | | Exit costs | $65 | $31 | | Restructuring charges | $65 | $186 | | Transaction-related items | $20 | $— | | Total Restructuring and transaction-related items | $85 | $186 | - Q1 2025 charges included $65 million for lease asset impairment and $20 million for transaction-related legal and advisory fees. Q1 2024 included $155 million in severance and $31 million for lease asset impairment[194][195] Gain on Dispositions - Paramount recorded $35 million in gains from dispositions in Q1 2025, primarily associated with the sale of a noncore business[197] Interest Expense/Income Interest Expense/Income (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Interest expense | $217 | $221 | $(4) | (2)% | | Interest income | $38 | $45 | $(7) | (16)% | Outstanding Debt Balances and Weighted Average Interest Rates (in millions) | Category | At March 31, 2025 | Weighted Average Interest Rate (2025) | At March 31, 2024 | Weighted Average Interest Rate (2024) | | :--- | :--- | :--- | :--- | :--- | | Total notes and debentures | $14,507 | 5.17 % | $14,607 | 5.17 % | Loss from Investment - A loss of $4 million was recorded in Q1 2024 associated with the sale of an investment[200] Other Items, Net Components of Other Items, Net (in millions) | Component | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Pension and postretirement benefit costs | $(34) | $(34) | | Foreign exchange loss | $(3) | $(4) | | Other items, net | $(37) | $(38) | Provision for/Benefit from Income Taxes - For Q1 2025, a $100 million income tax provision was recorded, with an effective tax rate of 29.9% (adjusted effective rate of 27.9%)[202] - For Q1 2024, a $172 million income tax benefit was recorded, with an effective tax rate of 27.1% (adjusted effective rate of 22.1%), primarily due to a $275 million tax benefit on programming charges[204] Equity in Loss of Investee Companies, Net of Tax Equity in Loss of Investee Companies, Net of Tax (in millions) | Category | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Equity in loss of investee companies | $(74) | $(91) | $17 | 19 % | | Tax benefit | $1 | $1 | $— | — | | Equity in loss of investee companies, net of tax | $(73) | $(90) | $17 | 19 % | Net Earnings (Loss) from Continuing Operations Attributable to Paramount and Diluted EPS from Continuing Operations Net Earnings (Loss) from Continuing Operations Attributable to Paramount and Diluted EPS (in millions, except per share amounts) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | Net earnings (loss) from continuing operations attributable to Paramount | $152 | $(563) | $715 | n/m | | Diluted EPS from continuing operations | $0.22 | $(0.88) | $1.10 | n/m | - Net earnings from continuing operations attributable to Paramount improved to $152 million (EPS $0.22) in Q1 2025 from a net loss of $563 million (EPS $(0.88)) in Q1 2024, primarily due to the absence of $1.12 billion in programming charges from the prior year[207] Net Earnings from Discontinued Operations - In Q1 2024, an additional pretax gain of $12 million was recorded from the sale of Simon & Schuster due to a working capital adjustment[208] Segment Results of Operations - Paramount's reportable segments are TV Media, Direct-to-Consumer, and Filmed Entertainment, with Adjusted OIBDA used as the primary measure of profit and loss[210][212] Revenues by Segment (in millions) | Segment | 2025 Revenues | % of Total | 2024 Revenues | % of Total | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | TV Media | $4,538 | 63 % | $5,231 | 68 % | $(693) | (13)% | | Direct-to-Consumer | $2,044 | 28 | $1,879 | 24 | $165 | 9 | | Filmed Entertainment | $627 | 9 | $605 | 8 | $22 | 4 | | Eliminations | $(17) | — | $(30) | — | $13 | 43 | | Total Revenues | $7,192 | 100 % | $7,685 | 100 % | $(493) | (6)% | Adjusted OIBDA by Segment (in millions) | Segment | 2025 Adjusted OIBDA | 2024 Adjusted OIBDA | Increase/(Decrease) $ | Increase/(Decrease) % | | :--- | :--- | :--- | :--- | :--- | | TV Media | $922 | $1,445 | $(523) | (36)% | | Direct-to-Consumer | $(109) | $(286) | $177 | 62 | | Filmed Entertainment | $20 | $(3) | $23 | n/m | | Corporate/Eliminations | $(101) | $(124) | $23 | 19 | | Stock-based compensation | $(44) | $(45) | $1 | 2 | | Total Adjusted OIBDA | $688 | $987 | $(299) | (30)% | TV Media Segment - TV Media revenues decreased 13% to $4.54 billion, primarily due to a 10% impact from the absence of the Super Bowl broadcast in Q1 2024[216] - Advertising revenues decreased 21%, largely due to the Super Bowl comparison. Affiliate and subscription revenues decreased 9% due to linear subscriber declines and contractual pricing impacts[217][221] - TV Media Adjusted OIBDA decreased 36% to $922 million, reflecting lower revenues from the Super Bowl comparison and affiliate declines[226] Direct-to-Consumer Segment - Direct-to-Consumer revenues increased 9% to $2.04 billion, driven by growth at Paramount+[230] - Paramount+ subscribers grew by 7.8 million (11%) year-over-year to 79.0 million at March 31, 2025, and increased by 1.5 million (2%) quarter-over-quarter from December 31, 2024[232][233] - Subscription revenues increased 16% due to subscriber growth and pricing increases. Advertising revenues decreased 9%, mainly due to the Super Bowl comparison[231][232] - Direct-to-Consumer Adjusted OIBDA improved by $177 million to a loss of $109 million, reflecting higher revenues[238] Filmed Entertainment Segment - Filmed Entertainment revenues increased 4% to $627 million, primarily driven by higher licensing revenues[241] - Theatrical revenues decreased 3%, with Q1 2025 benefiting from 'Sonic the Hedgehog 3' and 'Gladiator II' (Q4 2024 releases) and 'Novocaine' (late Q1 2025 release)[242][244] - Licensing and other revenues increased 6%, driven by strong home entertainment performance of recent theatrical releases like 'Gladiator II' and 'Sonic the Hedgehog 3'[245] - Filmed Entertainment Adjusted OIBDA improved by $23 million to $20 million, driven by the success of 'Sonic the Hedgehog 3'[249] Liquidity and Capital Resources - Paramount's primary funding sources are cash flows from operations, cash and cash equivalents ($2.67 billion at March 31, 2025), and debt refinancing[252] - The Skydance Transactions include an investment of up to $6.0 billion into New Paramount, with up to $4.5 billion for a cash-stock election and a minimum of $1.5 billion cash remaining at New Paramount[255] Cash Flow Summary (in millions) | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Increase/(Decrease) $ | | :--- | :--- | :--- | | Net cash flow provided by operating activities | $180 | $260 | $(80) | | Net cash flow used for investing activities | $(69) | $(128) | $59 | | Net cash flow used for financing activities | $(139) | $(187) | $48 | | Effect of exchange rate changes on cash and cash equivalents | $40 | $(21) | $61 | | Net increase (decrease) in cash and cash equivalents | $12 | $(76) | $88 | - Operating activities provided $180 million in cash, including $111 million for pension plans and $108 million for restructuring/transaction costs. Investing activities used $69 million, including $73 million for investments and $57 million for capital expenditures, partially offset by $61 million from dispositions[258][260] - Financing activities used $139 million, including $36 million for common stock dividends and $77 million in payments to noncontrolling interests[262] Debt Structure (in millions) | Debt Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Senior debt | $12,874 | $12,868 | | Junior debt | $1,633 | $1,633 | | Total debt | $14,507 | $14,501 | | Less current portion | $346 | $— | | Total long-term debt, net of current portion | $14,161 | $14,501 | - Paramount has a $3.50 billion revolving credit facility, with no outstanding borrowings and $3.50 billion available as of March 31, 2025. Amendments to the credit facility related to the Skydance Transactions will become operative upon closing[271][275] Legal Matters - Multiple lawsuits have been filed related to the Skydance Transactions, including class action lawsuits alleging breaches of fiduciary duties to Class B stockholders and demands for inspection of books and records[282][283][287][288][289] - A lawsuit by LiveVideo.AI Corp. alleges unfair competition and tortious interference, claiming defendants did not fairly consider its offer to purchase Paramount[284][286] - The NYCERS Action alleges breaches of fiduciary duties by certain directors for failing to consider an alternative offer superior to the Skydance Transactions and challenges the no-shop provision[288] - Paramount is involved in a dispute with Sony Pictures Television Inc. over distribution rights for 'Wheel of Fortune' and 'Jeopardy!', with ongoing legal proceedings and an appeal filed by Paramount[291] - Paramount is a defendant in approximately 17,720 pending asbestos claims as of March 31, 2025, related to products manufactured by a predecessor, Westinghouse. Total settlement and defense costs (net of insurance and tax) were $34 million in 2024[292][293] Related Parties - This section refers to Note 4 of the consolidated financial statements for details on related party transactions, including National Amusements, Inc. as the controlling stockholder[298] Accounting Pronouncements Not Yet Adopted - This section refers to Note 1 of the consolidated financial statements for details on accounting pronouncements not yet adopted, including new guidance on income tax disclosures (effective 2025) and disaggregation of income statement expenses (effective 2027)[299] Cautionary Note Concerning Forward-Looking Statements - The report contains forward-looking statements subject to known and unknown risks, uncertainties, and factors that could cause actual results to differ materially from expectations[300] - Key risks include those related to the streaming business, advertising revenue impacts, competitive industries, consumer behavior, new investments, content distribution, reputation damage, asset impairment, and liabilities from discontinued operations[300] - Specific risks related to the Skydance Transactions include challenges in realizing synergies, dilution to EPS, negative impact on stock price, uncertainty of stock consideration, regulatory approval risks, transaction costs, and potential lawsuits[302] Item 3. Quantitative and Qualitative Disclosures About Market Risk No significant changes to market risk disclosures since the Annual Report on Form 10-K for the year ended December 31, 2024 - No significant changes to market risk have occurred since the Annual Report on Form 10-K for the year ended December 31, 2024[304] Item 4. Controls and Procedures Confirms Paramount Global's disclosure controls were effective as of March 31, 2025, and no material changes to internal financial reporting controls - Paramount's disclosure controls and procedures were effective as of March 31, 2025[305] - No material change in internal control over financial reporting occurred during the last fiscal quarter[306] PART II – OTHER INFORMATION Item 1. Legal Proceedings Incorporates legal matters from Note 13, detailing litigation related to Skydance Transactions, distribution agreements, and asbestos claims - Information on legal proceedings is incorporated by reference from Note 13 to the consolidated financial statements[308] Item 1A. Risk Factors No material changes to risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[309] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Paramount Global did not repurchase shares in Q1 2025, with $2.36 billion remaining authorization under its share repurchase program - Paramount did not purchase any shares under its share repurchase program during Q1 2025[310] - The company had a remaining authorization of $2.36 billion under its share repurchase program at March 31, 2025[310] Item 6. Exhibits Lists exhibits filed with Form 10-Q, including Rule 13a-14(a)/15d-14(a) and Section 1350 certifications, and the Interactive Data File - Exhibits include Rule 13a-14(a)/15d-14(a) and Section 1350 certifications from the principal executive and financial officers[312] - The Interactive Data File (XBRL) is also included as an exhibit[312] SIGNATURES SIGNATURES Contains signatures of Paramount Global's CFO and Chief Accounting Officer, certifying the report on May 8, 2025 - The report is signed by Naveen Chopra, Executive Vice President, Chief Financial Officer, and Katherine Gill-Charest, Executive Vice President, Controller and Chief Accounting Officer, on May 8, 2025[316]