Paramount (PARA) - 2025 Q2 - Quarterly Report

FORM 10-Q Information This section provides essential administrative details regarding the Form 10-Q filing, registrant, and securities information Filing Details This section details the filing type as a Quarterly Report (Form 10-Q) for the period ended June 30, 2025, indicating it is not a transition report - The document is a Quarterly Report on Form 10-Q for the period ended June 30, 2025[2] Registrant Information Paramount Global, a Delaware-incorporated entity with its principal executive offices in New York, is identified as the registrant, along with its telephone number and former name status - Registrant is Paramount Global, incorporated in Delaware, with principal executive offices at 1515 Broadway, New York, New York 10036[2][3] Securities and Filer Status The company's Class A and Class B Common Stock are registered on The Nasdaq Stock Market LLC. Paramount Global is designated as a large accelerated filer, confirming its compliance with SEC filing requirements Registered Securities and Trading Information | Title of each class | Trading Symbols | Name of each exchange on which registered | | :------------------ | :-------------- | :---------------------------------------- | | Class A Common Stock, $0.001 par value | PARAA | The Nasdaq Stock Market LLC | | Class B Common Stock, $0.001 par value | PARA | The Nasdaq Stock Market LLC | - The registrant is a large accelerated filer and has filed all required reports during the preceding 12 months[4][5] Outstanding Common Stock Shares | Class A Common Stock, par value $.001 per share | 40,702,683 | | :---------------------------------------------- | :--------- | | Class B Common Stock, par value $.001 per share | 633,522,201 | PART I – FINANCIAL INFORMATION This section presents Paramount Global's comprehensive financial data, including statements, notes, and management's discussion and analysis of operations and financial condition Item 1. Financial Statements. This section presents Paramount Global's unaudited consolidated financial statements, including statements of operations, comprehensive income, balance sheets, cash flows, and stockholders' equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items for the periods ended June 30, 2025, and December 31, 2024 Consolidated Statements of Operations This section presents the company's unaudited consolidated statements of operations, detailing revenues, expenses, and net earnings or loss for specified periods Consolidated Statements of Operations (Unaudited; in millions, except per share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues | $6,849 | $6,813 | $14,041 | $14,498 | | Total costs and expenses | $6,450 | $12,131 | $13,127 | $20,233 | | Operating income (loss) | $399 | $(5,318) | $949 | $(5,735) | | Net earnings (loss) attributable to Paramount | $57 | $(5,413) | $209 | $(5,967) | | Diluted net earnings (loss) per common share attributable to Paramount | $0.08 | $(8.12) | $0.31 | $(9.06) | - Operating income significantly improved to $399 million in Q2 2025 from a $5,318 million loss in Q2 2024, primarily due to a substantial decrease in impairment charges[11] - Net earnings attributable to Paramount recovered to $57 million in Q2 2025 from a $5,413 million loss in Q2 2024, reflecting the improved operating performance[11] Consolidated Statements of Comprehensive Income This section presents the company's unaudited consolidated statements of comprehensive income, including net earnings and other comprehensive income or loss Consolidated Statements of Comprehensive Income (Unaudited; in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net earnings (loss) (Paramount and noncontrolling interests) | $61 | $(5,404) | $222 | $(5,948) | | Other comprehensive income (loss), net of tax | $103 | $(11) | $187 | $(70) | | Comprehensive income (loss) attributable to Paramount | $159 | $(5,422) | $394 | $(6,035) | - Comprehensive income attributable to Paramount improved significantly to $159 million in Q2 2025 from a $5,422 million loss in Q2 2024, driven by the shift from net loss to net earnings and positive cumulative translation adjustments[13] Consolidated Balance Sheets This section presents the company's unaudited consolidated balance sheets, detailing assets, liabilities, and stockholders' equity at specific dates Consolidated Balance Sheets (Unaudited; in millions) | Metric | At June 30, 2025 | At December 31, 2024 | | :------------------------------------------ | :--------------- | :------------------- | | Total Assets | $44,926 | $46,172 | | Total Liabilities | $27,815 | $29,390 | | Total Paramount stockholders' equity | $16,705 | $16,320 | | Cash and cash equivalents | $2,739 | $2,661 | | Receivables, net | $6,291 | $6,920 | | Long-term debt | $14,168 | $14,501 | - Total assets decreased by $1,246 million from December 31, 2024, to June 30, 2025, while total Paramount stockholders' equity increased by $385 million[16] Consolidated Statements of Cash Flows This section presents the company's unaudited consolidated statements of cash flows, categorizing cash movements from operating, investing, and financing activities Consolidated Statements of Cash Flows (Unaudited; in millions) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net cash flow provided by operating activities | $339 | $319 | | Net cash flow used for investing activities | $(184) | $(197) | | Net cash flow used for financing activities | $(161) | $(237) | | Net increase (decrease) in cash and cash equivalents | $78 | $(145) | - Net cash flow provided by operating activities increased by $20 million to $339 million in H1 2025, benefiting from lower content spending[19][324] - The company reported a net increase in cash and cash equivalents of $78 million in H1 2025, a significant improvement from a net decrease of $145 million in H1 2024[19] Consolidated Statements of Stockholders' Equity This section presents the company's unaudited consolidated statements of stockholders' equity, detailing changes in equity components over specified periods Paramount Stockholders' Equity (Unaudited; in millions, except shares) | Metric | December 31, 2024 | June 30, 2025 | | :------------------------------------------ | :---------------- | :------------ | | Total Paramount Stockholders' Equity | $16,320 | $16,705 | | Class A and B Common Stock Outstanding (Shares) | 671 | 675 | | Retained Earnings | $7,487 | $7,626 | | Accumulated Other Comprehensive Loss | $(1,604) | $(1,419) | - Total Paramount stockholders' equity increased by $385 million from December 31, 2024, to June 30, 2025, primarily due to net earnings and other comprehensive income[21] - All outstanding Mandatory Convertible Preferred Stock was automatically converted into Class B Common Stock on April 1, 2024[104] Notes to Consolidated Financial Statements This section provides detailed explanatory notes to the unaudited consolidated financial statements, clarifying accounting policies and specific financial line items 1) Basis of Presentation%20BASIS%20OF%20PRESENTATION) This note outlines the company's business segments and the basis for preparing the unaudited consolidated financial statements, including details on the Skydance transaction - Paramount Global is a global media, streaming, and entertainment company operating through TV Media, Direct-to-Consumer, and Filmed Entertainment segments[25][28] - On July 7, 2024, Paramount entered into a transaction agreement with Skydance Media, LLC to form a new holding company, New Paramount, with an expected closing date of August 7, 2025[26][32] - The Skydance transaction includes an investment of up to $6.0 billion into New Paramount by NAI Equity Investors and other affiliates, with proceeds used to fund cash-stock elections for existing Paramount shareholders[27] 2) Programming and Other Inventory%20PROGRAMMING%20AND%20OTHER%20INVENTORY) This note details the composition and amortization of programming and other inventory, including significant charges related to content strategy shifts Programming and Other Inventory (in millions) | Metric | At June 30, 2025 | At December 31, 2024 | | :------------------------------------------ | :--------------- | :------------------- | | Total programming and other inventory | $15,331 | $15,353 | | Less current portion | $1,519 | $1,429 | | Total noncurrent programming and other inventory | $13,812 | $13,924 | Amortization of Programming Costs (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Acquired program rights | $1,117 | $1,066 | $2,628 | $2,848 | | Internally-produced TV/film programming, and acquired libraries: Individual monetization | $316 | $370 | $685 | $668 | | Internally-produced TV/film programming, and acquired libraries: Film group monetization | $1,371 | $1,280 | $2,670 | $2,340 | - In Q1 2024, Paramount recorded $1.12 billion in programming charges due to a shift to a global programming strategy, leading to content removal, development project abandonment, and contract terminations[54] 3) Impairment, Restructuring and Transaction-Related Items%20IMPAIRMENT,%20RESTRUCTURING%20AND%20TRANSACTION-RELATED%20ITEMS) This note provides details on impairment charges, restructuring costs, and transaction-related expenses, highlighting significant non-recurring items impacting financial results - In Q2 2025, Paramount recorded a $157 million impairment charge for FCC licenses in six markets due to declines in industry projections[57] - In Q2 2024, a significant goodwill impairment charge of $5.98 billion was recorded for the Cable Networks reporting unit, driven by linear affiliate market indicators and the estimated total company market value from the Skydance transactions[59] Restructuring and Transaction-Related Items (in millions) | Item | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Severance | $177 | $70 | $177 | $225 | | Exit costs | — | — | $65 | $31 | | Restructuring charges | $177 | $70 | $242 | $256 | | Transaction-related items | $4 | $18 | $24 | $18 | 4) Related Parties%20RELATED%20PARTIES) This note describes transactions and relationships with related parties, primarily National Amusements, Inc., the controlling stockholder - National Amusements, Inc. (NAI) is the controlling stockholder of Paramount, owning approximately 77.4% of Class A Common Stock and 9.4% of combined Class A and B Common Stock as of June 30, 2025[68] - NAI approved the Skydance Transactions on July 7, 2024, and no additional stockholder approval is required from the Company's stockholders[69] Related Party Transactions (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues | $101 | $79 | $170 | $137 | | Operating costs | $35 | $19 | $59 | $37 | 5) Revenues%20REVENUES) This note disaggregates revenues by type and segment, providing insights into revenue recognition policies and performance obligations Revenues by Type (in millions) | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Advertising | $2,152 | $2,251 | $4,665 | $5,347 | | Affiliate and subscription | $3,445 | $3,275 | $6,842 | $6,632 | | Theatrical | $254 | $138 | $402 | $291 | | Licensing and other | $998 | $1,149 | $2,132 | $2,228 | | Total Revenues | $6,849 | $6,813 | $14,041 | $14,498 | - Total revenues for Q2 2025 increased 1% to $6,849 million, driven by growth in affiliate and subscription revenues (up 5%) and theatrical revenues (up 84%)[75] - Unrecognized revenues attributable to unsatisfied performance obligations under long-term contracts were approximately $7 billion at June 30, 2025, with $2 billion expected to be recognized during the remainder of 2025[80] 6) Debt%20DEBT) This note details the company's debt structure, including outstanding notes, credit facilities, and compliance with debt covenants Debt (in millions) | Metric | At June 30, 2025 | At December 31, 2024 | | :------------------------------------------ | :--------------- | :------------------- | | Total debt | $14,514 | $14,501 | | Less current portion | $346 | — | | Total long-term debt, net of current portion | $14,168 | $14,501 | | Face value of total debt | $14,980 | $14,980 | - Paramount had no outstanding commercial paper borrowings and a $3.50 billion revolving credit facility with no outstanding borrowings at June 30, 2025[84][85][87] - The Credit Facility's maximum Consolidated Total Leverage Ratio was 5.25x for Q2 2025 and will decrease to 4.5x by Q1 2026, with the company meeting the covenant as of June 30, 2025[88] 7) Financial Instruments and Fair Value Measurements%20FINANCIAL%20INSTRUMENTS%20AND%20FAIR%20VALUE%20MEASUREMENTS) This note describes the company's use of financial instruments, including derivatives, and provides fair value measurements for various assets and liabilities - The carrying value of outstanding notes and debentures was $14.51 billion at June 30, 2025, while their fair value was $13.6 billion[91] - Paramount uses derivative financial instruments, primarily foreign exchange forward contracts, to manage exposure to foreign currency exchange rates, with a notional amount of $3.03 billion at June 30, 2025[93][95][96] Fair Value Measurements (in millions) | Metric | At June 30, 2025 | At December 31, 2024 | | :------------------------------------------ | :--------------- | :------------------- | | Assets: Foreign currency hedges | $59 | $45 | | Liabilities: Deferred compensation | $299 | $385 | | Liabilities: Foreign currency hedges | $45 | $48 | 8) Variable Interest Entities%20VARIABLE%20INTEREST%20ENTITIES) This note provides information on the company's involvement with and consolidation of variable interest entities (VIEs) Consolidated VIEs (in millions) | Metric | At June 30, 2025 | At December 31, 2024 | | :------------------------------------------ | :--------------- | :------------------- | | Total assets | $1,840 | $1,825 | | Total liabilities | $202 | $198 | Consolidated VIEs Financial Performance (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues | $117 | $130 | $242 | $267 | | Operating loss | $(40) | $(30) | $(87) | $(64) | 9) Stockholders' Equity%20STOCKHOLDERS'%20EQUITY) This note details changes in stockholders' equity, including common stock, retained earnings, and other comprehensive income, along with dividend declarations - All outstanding Mandatory Convertible Preferred Stock was automatically and mandatorily converted into Class B Common Stock on April 1, 2024[104] Dividends Declared (in millions, except per share) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Class A and Class B Common Stock Dividends declared per common share | $0.05 | $0.05 | $0.10 | $0.10 | | Total common stock dividends | $35 | $34 | $70 | $69 | | Mandatory Convertible Preferred Stock Dividends declared per preferred share | n/a | n/a | n/a | $1.4375 | | Total preferred stock dividends | n/a | n/a | n/a | $14 | - Accumulated other comprehensive loss improved from $(1,604) million at December 31, 2024, to $(1,419) million at June 30, 2025, primarily due to positive cumulative translation adjustments[110] 10) Income Taxes%20INCOME%20TAXES) This note provides details on the provision for income taxes, effective tax rates, and the impact of significant items on tax expense or benefit Income Tax Provision (Benefit) and Effective Rate | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Provision for (benefit from) income taxes | $(50) | $215 | $(150) | $387 | | Effective income tax rate | 28.1% | 3.9% | 29.3% | 6.3% | - The 2025 income tax provision includes tax benefits of $42 million (Q2) and $58 million (H1) on restructuring charges, and $39 million on FCC license impairment charges[115][234] - The 2024 income tax benefit was primarily driven by $349 million on goodwill and FCC license impairment charges and $275 million on programming charges[116][236] 11) Pension and Other Postretirement Benefits%20PENSION%20AND%20OTHER%20POSTRETIREMENT%20BENEFITS) This note outlines the net periodic cost associated with the company's pension and other postretirement benefit plans Net Periodic Cost (in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Pension Benefits | $36 | $36 | $72 | $71 | | Postretirement Benefits | $(2) | $(2) | $(4) | $(4) | - Net periodic pension cost for H1 2025 was $72 million, slightly up from $71 million in H1 2024[120] 12) Segment Information%20SEGMENT%20INFORMATION) This note presents financial information by reportable segment, including revenues and Adjusted OIBDA, to provide insights into operational performance - Paramount operates through three reportable segments: TV Media, Direct-to-Consumer, and Filmed Entertainment[28][244] - Adjusted OIBDA is the primary measure of profit and loss for operating segments, excluding depreciation, amortization, stock-based compensation, impairment, restructuring, transaction-related items, programming charges, and gain on dispositions[123][243] Segment Revenues (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | TV Media | $4,011 | $4,271 | $8,549 | $9,502 | | Direct-to-Consumer | $2,160 | $1,880 | $4,204 | $3,759 | | Filmed Entertainment | $690 | $679 | $1,317 | $1,284 | 13) Commitments and Contingencies%20COMMITMENTS%20AND%20CONTINGENCIES) This note details the company's significant commitments and contingencies, including legal proceedings, letters of credit, and asbestos claims - Paramount had $1.18 billion in outstanding letters of credit and surety bonds at June 30, 2025, including $960 million under a $1.9 billion standby letter of credit facility[129] - The company is involved in multiple class action lawsuits related to the Skydance Transactions, alleging breaches of fiduciary duties to Class B stockholders[135][136][140] - As of June 30, 2025, Paramount had approximately 17,790 pending asbestos claims related to former businesses, with total settlement and defense costs (net of insurance and tax) of $34 million in 2024[146] 14) Supplemental Financial Information%20SUPPLEMENTAL%20FINANCIAL%20INFORMATION) This note provides additional financial details, including supplemental cash flow information, lease income, and gains on dispositions Supplemental Cash Flow Information (in millions) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Cash paid for interest | $411 | $418 | | Cash paid for income taxes | $180 | $174 | | Noncash additions to operating lease assets | $76 | $60 | - Lease income for Q2 2025 was $12 million, and for H1 2025 was $21 million[152] - Gains on dispositions totaled $35 million in Q1 2025, principally associated with the disposition of a noncore business[153] Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition. This section provides management's perspective on Paramount Global's financial performance and condition, offering detailed analysis of consolidated and segment results, reconciliation of non-GAAP measures, liquidity, capital resources, and legal matters. It highlights key operational changes, financial trends, and the impact of strategic initiatives like the Skydance Transactions Overview This section provides a high-level summary of the company's consolidated financial performance, key operational highlights, and strategic developments like the Skydance Transactions Consolidated Results of Operations (GAAP & Non-GAAP; in millions, except per share amounts) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Revenues | $6,849 | $6,813 | $14,041 | $14,498 | | Operating income (loss) | $399 | $(5,318) | $949 | $(5,735) | | Net earnings (loss) from continuing operations attributable to Paramount | $57 | $(5,413) | $209 | $(5,976) | | Diluted EPS from continuing operations | $0.08 | $(8.12) | $0.31 | $(9.08) | | Adjusted OIBDA | $824 | $867 | $1,512 | $1,854 | - Operating income significantly improved in Q2 2025 and H1 2025 compared to the prior year, primarily due to substantially lower impairment charges ($157 million in 2025 vs. $6.00 billion in 2024)[164][171] - The Skydance Transactions, expected to close on August 7, 2025, will result in Paramount and Skydance becoming subsidiaries of a new holding company, New Paramount[156][159] Reconciliation of Non-GAAP Measures This section reconciles non-GAAP financial measures, such as Adjusted OIBDA and adjusted diluted EPS, to their most directly comparable GAAP measures - Non-GAAP measures like Adjusted OIBDA and adjusted diluted EPS exclude items affecting comparability such as impairment charges, restructuring charges, transaction-related items, programming charges, and gains on dispositions[176] Adjusted OIBDA (Non-GAAP; in millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating income (loss) (GAAP) | $399 | $(5,318) | $949 | $(5,735) | | Depreciation and amortization | $87 | $101 | $175 | $201 | | Programming charges | — | — | — | $1,118 | | Impairment charges | $157 | $5,996 | $157 | $5,996 | | Restructuring charges | $177 | $70 | $242 | $256 | | Transaction-related items | $4 | $18 | $24 | $18 | | Gain on dispositions | — | — | $(35) | — | | Adjusted OIBDA (Non-GAAP) | $824 | $867 | $1,512 | $1,854 | - Adjusted OIBDA decreased 5% to $824 million in Q2 2025 and 18% to $1,512 million in H1 2025, primarily due to lower profits from linear networks and the absence of the Super Bowl broadcast in 2025[164][171][182] Consolidated Results of Operations This section provides a detailed analysis of the company's consolidated revenues, costs, and expenses, explaining key drivers and trends Revenues by Type (in millions) | Revenue Type | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Advertising | $2,152 | $2,251 | $4,665 | $5,347 | | Affiliate and subscription | $3,445 | $3,275 | $6,842 | $6,632 | | Theatrical | $254 | $138 | $402 | $291 | | Licensing and other | $998 | $1,149 | $2,132 | $2,228 | | Total Revenues | $6,849 | $6,813 | $14,041 | $14,498 | - Paramount+ subscribers grew to 77.7 million at June 30, 2025, from 68.4 million at June 30, 2024, contributing to a 5% increase in affiliate and subscription revenues in Q2 2025[207] - Selling, General and Administrative (SG&A) expenses decreased 11% in Q2 2025 and 9% in H1 2025, primarily due to lower compensation costs following global workforce restructuring in 2024[218] Segment Results of Operations This section provides a detailed analysis of the company's consolidated revenues, costs, and expenses, explaining key drivers and trends Segment Revenues (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | TV Media | $4,011 | $4,271 | $8,549 | $9,502 | | Direct-to-Consumer | $2,160 | $1,880 | $4,204 | $3,759 | | Filmed Entertainment | $690 | $679 | $1,317 | $1,284 | Segment Adjusted OIBDA (in millions) | Segment | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | TV Media | $863 | $1,018 | $1,785 | $2,463 | | Direct-to-Consumer | $157 | $26 | $48 | $(260) | | Filmed Entertainment | $(84) | $(54) | $(64) | $(57) | TV Media Segment This section analyzes the financial performance of the TV Media segment, detailing revenue trends and Adjusted OIBDA drivers - TV Media revenues decreased 6% to $4,011 million in Q2 2025 and 10% to $8,549 million in H1 2025, primarily due to declines in the linear advertising market and the absence of the Super Bowl broadcast in 2025[251][252][263][264] - Adjusted OIBDA for TV Media decreased 15% to $863 million in Q2 2025 and 28% to $1,785 million in H1 2025, reflecting revenue declines and the Super Bowl comparison[260][271] - H1 2025 advertising revenues decreased 14%, primarily reflecting a 12% negative impact from the comparison against CBS's Super Bowl LVIII broadcast in Q1 2024[264] Direct-to-Consumer Segment This section analyzes the financial performance of the Direct-to-Consumer segment, focusing on subscriber growth, revenue trends, and Adjusted OIBDA - Direct-to-Consumer revenues increased 15% to $2,160 million in Q2 2025 and 12% to $4,204 million in H1 2025, driven by Paramount+ growth[277][290] - Adjusted OIBDA for Direct-to-Consumer significantly improved to $157 million in Q2 2025 (from $26 million) and to $48 million in H1 2025 (from a $(260) million loss)[285][297] - Paramount+ global subscribers increased 14% YoY to 77.7 million at June 30, 2025, but decreased 2% QoQ from March 31, 2025, due to an international distribution agreement expiration and timing of premieres[279][281] Filmed Entertainment Segment This section analyzes the financial performance of the Filmed Entertainment segment, detailing theatrical and licensing revenues and Adjusted OIBDA - Filmed Entertainment revenues increased 2% to $690 million in Q2 2025 and 3% to $1,317 million in H1 2025, driven by higher theatrical revenues[300][308] - Theatrical revenues increased 84% in Q2 2025 and 38% in H1 2025, primarily due to the release of 'Mission: Impossible - The Final Reckoning' and benefiting from 'Sonic the Hedgehog 3' in H1 2025[301][310] - Adjusted OIBDA for Filmed Entertainment decreased 56% to $(84) million in Q2 2025 and 12% to $(64) million in H1 2025, primarily reflecting lower profits from licensing[305][315] Liquidity and Capital Resources This section discusses the company's cash position, cash flow activities, debt structure, and ability to meet its financial obligations and funding needs - Cash and cash equivalents were $2.74 billion as of June 30, 2025[318] Cash Flows (in millions) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------------ | :--------------------------- | :--------------------------- | | Net cash flow provided by operating activities | $339 | $319 | | Net cash flow used for investing activities | $(184) | $(197) | | Net cash flow used for financing activities | $(161) | $(237) | | Net increase (decrease) in cash and cash equivalents | $78 | $(145) | - The Skydance transaction includes a $6.0 billion investment into New Paramount, with up to $4.5 billion for cash-stock elections and a minimum of $1.5 billion (less subscription discount) remaining at New Paramount[321] Legal Matters (MD&A) This section provides management's discussion and analysis of significant legal proceedings and their potential impact on the company's financial condition - Multiple class action lawsuits have been filed concerning the Skydance Transactions, alleging breaches of fiduciary duties to stockholders and seeking inspection of company records[348][349][354] - Litigation is ongoing with Sony Pictures Television Inc. over distribution rights for 'Wheel of Fortune' and 'Jeopardy!', with Paramount appealing a trial court's decision[357] - Paramount is a defendant in approximately 17,790 pending asbestos claims as of June 30, 2025, related to products manufactured by a predecessor, Westinghouse[358][359] Cautionary Note Concerning Forward-Looking Statements This section highlights the inherent uncertainties and risks associated with forward-looking statements, advising readers on factors that could cause actual results to differ - The report contains forward-looking statements subject to various known and unknown risks, uncertainties, and factors that could cause actual results to differ materially[365] - Key risks include those related to the streaming business, advertising market conditions, competition, asset impairment, and the unpredictable nature of consumer behavior and evolving technologies[365] - Risks specifically related to the Skydance Transactions include challenges in realizing anticipated benefits, potential dilution to EPS, regulatory approval risks, and ongoing lawsuits[367] Item 3. Quantitative and Qualitative Disclosures About Market Risk. This section states that there have been no significant changes to the company's market risk disclosures since its Annual Report on Form 10-K for the year ended December 31, 2024 - No significant changes to market risk disclosures since the Annual Report on Form 10-K for the year ended December 31, 2024[369] Item 4. Controls and Procedures. The principal executive officer and principal financial officer concluded that Paramount's disclosure controls and procedures were effective as of June 30, 2025, and no material changes to internal control over financial reporting occurred during the last fiscal quarter - Disclosure controls and procedures were effective as of June 30, 2025[370] - No material changes in internal control over financial reporting occurred during the last fiscal quarter[371] PART II – OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings. This section incorporates by reference the detailed discussion of legal matters from Note 13 to the consolidated financial statements, covering ongoing lawsuits related to the Skydance Transactions, distribution agreements, and asbestos claims - Information on legal proceedings is incorporated by reference from Note 13 to the consolidated financial statements[373] Item 1A. Risk Factors. This section states that there have been no material changes to the risk factors previously disclosed in the company's 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[374] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. This section reports on the company's share repurchase program, noting that no shares were purchased during the second quarter of 2025, and $2.36 billion remained authorized for repurchase as of June 30, 2025 - No shares were purchased under the publicly announced share repurchase program during the second quarter of 2025[375] - The remaining authorization under the share repurchase program was $2.36 billion at June 30, 2025[375] Item 6. Exhibits. This section lists the exhibits filed with the Form 10-Q, including material contracts, certifications from executive officers (Rule 13a-14(a)/15d-14(a) and Section 1350), and Interactive Data Files (XBRL) - Includes certifications from the principal executive officer and principal financial officer pursuant to Rule 13a-14(a)/15d-14(a) and Section 1350[378][381] - Interactive Data Files (XBRL) are provided as Exhibit 101[378][381]