Form 8-K

8-K — Paramount Skydance Corp

Accession: 0001104659-26-089245

Filed: 2026-07-31

Period: 2026-07-31

CIK: 0002041610

SIC: 4833 (TELEVISION BROADCASTING STATIONS)

Item: Financial Statements and Exhibits

Documents

8-K — tm2610616d8_8k.htm (Primary)

EX-23.1 — EXHIBIT 23.1 (tm2610616d8_ex23-1.htm)

EX-99.3 — EXHIBIT 99.3 (tm2610616d8_ex99-3.htm)

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8-K — FORM 8-K

8-K (Primary)

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0002041610

2026-07-31

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of

earliest event reported): July 31, 2026

Paramount Skydance Corporation

(Exact name of registrant as specified in its

charter)

Delaware

001-42791

99-3917985

(State or other jurisdiction of

incorporation)

(Commission File Number)

(IRS Employer Identification

Number)

1515 Broadway

New York, New York

10036

(Address

of principal executive

offices)

(Zip

Code)

Registrant’s telephone number, including

area code: (212) 258-6000

Not Applicable

(Former name or former address, if changed since

last report)

Check the appropriate box below if the Form 8-K filing is intended

to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b)

of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class B Common Stock, $0.001 par value

PSKY

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth

company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange

Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant

has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant

to Section 13(a) of the Exchange Act. ¨

EXPLANATORY NOTE

As previously disclosed, Warner Bros. Discovery, Inc., a Delaware

corporation (“WBD”), Paramount Skydance Corporation, a Delaware corporation (“Paramount”), and Prince Sub Inc.,

a Delaware corporation and wholly owned subsidiary of Paramount, entered into an Agreement and Plan of Merger on February 27, 2026

(the “Merger Agreement”), pursuant to which, and subject to the terms and conditions therein, at the effective time of the

merger to be entered into pursuant to such agreement, Prince Sub Inc. will merge with and into WBD, with WBD surviving as a wholly owned

subsidiary of Paramount (the “Merger”). The purpose of this Current Report on Form 8-K is to file (a) the financial

statements of WBD described below, (b) the unaudited pro forma financial information described below and (c) the consent of

PricewaterhouseCoopers LLP with respect to its report on the audited consolidated financial statements of WBD incorporated by reference

herein as Exhibit 99.1, and to permit such pro forma financial information to be incorporated by reference into Paramount’s

Registration Statement on Form S-3 to be filed with the SEC.

Item 9.01

Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired.*

*Note: Business has not yet been acquired. Financial statements are

provided in connection with the pending Merger.

The audited consolidated financial statements of Warner Bros. Discovery,

Inc. as of December 31, 2025 and 2024, and for each of the three fiscal years in the period ended December 31, 2025, including the

related notes and schedule of valuation and qualifying accounts, the Report of Independent Registered Public Accounting Firm thereon,

and Management’s Report on Internal Control Over Financial Reporting, were filed by Warner Bros. Discovery, Inc. with the SEC on February 27, 2026, and are incorporated herein by

reference as Exhibit 99.1 hereto.

The interim unaudited condensed consolidated financial statements of

Warner Bros. Discovery, Inc. as of March 31, 2026 and for the three months ended March 31, 2026 and March 31, 2025,

and the notes related thereto were filed by Warner Bros. Discovery, Inc. with the SEC on May 6, 2026, and are incorporated herein

by reference as Exhibit 99.2 hereto.

(b)

Pro Forma Financial Information.**

**Note: Business has not yet been acquired. Pro forma financial information

is provided in connection with the pending Merger.

The unaudited pro forma condensed combined financial information for

Paramount Skydance Corporation, after giving effect to the Merger and the adjustments described therein, is attached hereto as Exhibit 99.3

and incorporated by reference herein.

Cautionary Note Concerning Forward-Looking Statements

This Current Report on Form 8-K and Exhibit 99.3 hereto contain

“forward-looking statements”, including, without limitation, statements regarding: the timing of closing the potential Merger,

including the regulatory and other conditions to the Merger and the application of any “Ticking Consideration” in connection therewith;

the timing, pricing and other terms of any permanent financing in connection with the financing of the Merger, including the need for,

and costs in connection with, any bridge financing to finance the consummation of the Merger; the post-closing capital structure following

the Merger, including assumptions relating to interest expense for the combined company and potential dilution resulting from any equity

financing in connection with the Merger; the results of and participation in any exchange or tender offer for existing WBD debt securities

and the refinancing or other treatment of WBD debt in connection with the Merger; the accounting treatment for the Merger and preliminary

estimates of fair value for purposes of such accounting; certain pro forma and other adjustments, including certain assumptions on which

adjustments are based; the combined businesses of WBD and Paramount following the Merger and the integration and the treatment of any

intercompany transactions in connection therewith. The reader is cautioned not to rely on these forward-looking statements. These statements

are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties

materialize, actual results could vary materially from the expectations and projections of Paramount or WBD. Risks and uncertainties include,

but are not limited to: risks related to Paramount’s streaming business; the adverse impact on Paramount’s advertising revenues

as a result of changes in consumer behavior, advertising market conditions and deficiencies in audience measurement; risks related to

operating in highly competitive and dynamic industries; the unpredictable nature of consumer behavior, as well as evolving technologies

and distribution models; risks related to Paramount’s decisions to invest in new businesses, products, services and technologies,

and the evolution of Paramount’s business strategy; the potential for loss of carriage or other reduction in or the impact of negotiations

for the distribution of Paramount’s content; damage to Paramount’s reputation or brands; losses due to asset impairment charges

for goodwill, content and long-lived assets, including finite-lived intangible assets; liabilities related to discontinued operations

and former businesses; increasing scrutiny of, and evolving expectations for, sustainability initiatives; evolving business continuity,

cybersecurity, privacy and data protection and similar risks; challenges in protecting and maintaining Paramount’s intellectual

property rights; domestic and global political, economic and regulatory factors affecting Paramount’s businesses generally; the

inability to hire or retain key employees or secure creative talent; disruptions to Paramount’s operations as a result of labor

disputes; the risks and costs associated with the integration of, and Paramount’s ability to integrate, the businesses of Paramount

Global and Skydance Media, LLC successfully and to achieve anticipated synergies; litigation relating to the transaction pursuant to which

Paramount acquired Skydance Media, LLC potentially resulting in substantial costs; volatility in the price of Paramount’s Class B

common stock; the effect Paramount’s dual-class capital structure and the concentrated ownership may have on the price of its Class B

common stock or business; risks related to a private sale of a controlling interest in Paramount, including that Paramount’s stockholders

may not realize any change of control premium on shares of Paramount’s Class B common stock and that Paramount may become subject

to the control of a presently unknown third party; risks associated with Paramount’s status as a “controlled company”

under the rules of The Nasdaq Global Select Market, including its exemption from certain corporate governance requirements; risks

associated with the lack of voting rights of Paramount’s Class B common stock; risks that anti-takeover provisions in Paramount’s

amended and restated certificate of incorporation and amended and restated bylaws, and under Delaware law could deter, delay, or prevent

a change of control; risks that exclusive forum provisions in Paramount’s amended and restated certificate of incorporation could

limit a stockholder’s choice of forum for certain claims and discourage lawsuits against Paramount’s directors and officers;

risks that corporate opportunity provisions in Paramount’s amended and restated certificate of incorporation could permit certain

persons to pursue competitive opportunities that might otherwise be available to Paramount; risks associated with Paramount’s holding

company structure, including its dependence on distributions from its subsidiaries to meet tax obligations and other cash requirements;

disruptions caused by the Merger to Paramount’s and WBD’s business and commercial relationships; the negative impact that

a failure to consummate the Merger could have on Paramount’s business, financial condition, results of operations and stock price;

the risk that the Merger may be prevented or delayed or the anticipated benefits reduced if Paramount does not obtain certain regulatory

approvals; the risk that the Merger Agreement may be terminated in accordance with its terms, including if any conditions to the closing

of the Merger are not satisfied; the risk that litigation relating to the Merger could prevent or delay the closing of the Merger or result

in the payment of damages after closing; challenges realizing synergies and other anticipated benefits expected from the Merger, including

integrating WBD’s business successfully; risks to Paramount’s business, financial condition or results of operations as a

result of the incurrence of substantial costs and indebtedness in connection with the Merger; market and other conditions in connection

with any permanent financing in connection with the Merger; and risks of reduced ownership and economic interest by Paramount’s

existing stockholders as a result of the Merger. A further list and description of these risks, uncertainties and other factors and the

general risks associated with the respective businesses of Paramount and WBD can be found in Paramount’s Annual Report on Form 10-K

for the fiscal year ended December 31, 2025, filed with the SEC on February 25, 2026, and Paramount’s Form 10-Q for

the quarterly period ended March 31, 2026, filed with the SEC on May 4, 2026, including, in each case, in the sections captioned

“Cautionary Note Concerning Forward-Looking Statements” and “Item 1A. Risk Factors,” and Paramount’s subsequent

filings with the SEC, and WBD’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the

SEC on February 27, 2026, and WBD’s Form 10-Q for the quarterly period ended March 31, 2026, filed with the SEC on

May 6, 2026, including, in each case, in the sections captioned “Cautionary Note Concerning Forward-Looking Statements”

and “Item 1A. Risk Factors,” and WBD’s subsequent filings with the SEC. Copies of these filings, as well as subsequent

filings, are available online at www.sec.gov, ir.wbd.com or on request from Paramount or WBD. Paramount undertakes no obligation to update

any forward-looking statement as a result of new information or future events or developments, except as required by law.

Exhibit Number

Description of Exhibit

23.1

Consent of PricewaterhouseCoopers LLP, independent registered public accounting firm for Warner Bros. Discovery, Inc.

99.1

Audited consolidated financial statements of Warner Bros. Discovery, Inc. as of December 31, 2025 and 2024, and for each of the three fiscal years in the period ended December 31, 2025, and the related notes and schedule of valuation and qualifying accounts, the Report of Independent Registered Public Accounting Firm thereon and Management’s Report on Internal Control Over Financial Reporting (incorporated by reference to Part II, Item 8 and Part IV, Item 15 of Warner Bros. Discovery, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (SEC File No. 001-34177), filed with the SEC on February 27, 2026).

99.2

Interim

unaudited condensed consolidated financial statements of Warner Bros. Discovery, Inc. as of March 31, 2026 and for the three months

ended March 31, 2026 and March 31, 2025, and the notes related thereto (incorporated by reference to Part I, Item 1 of the Warner

Bros. Discovery, Inc. Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (SEC File No. 001-34177), filed

with the SEC on May 6, 2026).

99.3

Unaudited pro forma condensed combined financial statements of Paramount Skydance Corporation as of and for the three months ended March 31, 2026 and for the year ended December 31, 2025.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934,

as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

PARAMOUNT SKYDANCE CORPORATION

By:

/s/ Stephanie Kyoko McKinnon

Name:

Stephanie Kyoko McKinnon

Title:

General Counsel and Secretary

Date: July 31, 2026

EX-23.1 — EXHIBIT 23.1

EX-23.1

Filename: tm2610616d8_ex23-1.htm · Sequence: 2

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

FIRM

We hereby consent to the incorporation by reference

in the Registration Statement on Form S-8 (Nos. 333- 289341) of Paramount Skydance Corporation of our report dated February 27,

2026 relating to the financial statements, financial statement schedule and the effectiveness of internal control over financial reporting,

which appears in Warner Bros. Discovery, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2025.

/s/ PricewaterhouseCoopers LLP

Washington, District of Columbia

July 31, 2026

EX-99.3 — EXHIBIT 99.3

EX-99.3

Filename: tm2610616d8_ex99-3.htm · Sequence: 3

Exhibit 99.3

PARAMOUNT SKYDANCE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL

STATEMENTS

Summary of the Transactions

Warner Bros. Discovery Inc. Acquisition

On February 27, 2026, Paramount Skydance

Corporation (“Paramount,” or the “Company,”) and Prince Sub Inc., a Delaware corporation and wholly owned subsidiary

of Paramount (“Merger Sub”) entered into an Agreement and Plan of Merger (as it may be amended, supplemented or otherwise

modified in accordance with the terms, the “WBD Merger Agreement”) with Warner Bros. Discovery, Inc. a Delaware corporation

(“WBD”), pursuant to which and subject to the terms and conditions therein, Merger Sub will merge with and into WBD, with

WBD surviving as a wholly owned subsidiary of Paramount (the “Acquisition”).

The Acquisition is expected to be accounted for

as a business combination under ASC 805, Business Combinations, with the Company identified as the accounting acquirer. In identifying

the Company as the accounting acquirer, management considered the structure of the Acquisition and other actions contemplated by the WBD

Merger Agreement, relative outstanding voting and equity interests, and the composition of the post-Acquisition board of directors. No

single factor was the sole determinant in the overall conclusion that Paramount is the accounting acquirer; rather all factors were considered

in arriving at such conclusion.

At the effective time of the Acquisition (“the

Effective Time”), each share of WBD Common Stock issued and outstanding immediately prior to the Effective Time (other than shares

of WBD Common Stock to be cancelled for no consideration in accordance with the WBD Merger Agreement or as to which appraisal rights have

been properly exercised) will be converted into the right to receive an amount in cash equal to $31.00, without interest, plus, if applicable,

the Ticking Consideration (collectively, the “Merger Consideration”). The “Ticking Consideration” will be an amount

in cash equal to $0.00277778 multiplied by the number of calendar days elapsed after September 30, 2026 to and including the closing

date of the Acquisition (which for the avoidance of doubt, will not exceed $0.25 per 90 calendar day period). For purposes of these pro

forma financial statements, total cash consideration payable to WBD common stockholders is estimated at $77.8 billion, calculated based

on WBD Common Stock outstanding as of April 23, 2026, excluding any applicable Ticking Consideration as the Company assumes for the

purposes of preparing these pro forma financial statements that the transaction will close prior to September 30, 2026, and any cash

payable with respect to equity awards as described under “—Treatment of Equity Awards” below.

Treatment of Equity Awards

Stock Options

At the Effective Time:

· Each stock option outstanding to purchase shares of WBD Common Stock granted under any WBD stock plan

that is (x) vested as of the Effective Time or (y) held by a former employee or service provider of WBD, will be cancelled and

converted into the right to receive an amount in cash, without interest, equal to the product obtained by multiplying (i) the excess

if any, of the Merger Consideration over the per share exercise price for such vested stock option by (ii) the total number of shares

of WBD Common Stock subject to such vested stock option.

· Each stock option (whether vested or unvested) with an exercise price equal to or in excess of the Merger

Consideration will be cancelled without consideration.

· Each unvested stock option with an exercise price below the Merger Consideration will be assumed by Paramount

and automatically converted into the contingent right to receive an amount in cash, without interest, equal to the product obtained by

multiplying (i) the excess of the Merger Consideration over the per share exercise price for such unvested stock option by (ii) the

total number of shares of WBD Common Stock subject to such unvested stock option immediately prior to the Effective Time, and will remain

subject to generally the same terms and conditions (including any applicable terms relating to accelerated vesting upon qualifying terminations

of employment and timing and form of payment) that applied to the corresponding unvested stock option immediately prior to the Effective

Time.

-1-

Restricted Stock Units (“RSUs”),

including Performance-Based RSUs (“PRSUs”)

At the Effective

Time:

· Each WBD RSU that is vested in accordance with its terms or that is held by a non-employee member of the

board of directors of WBD as of the Effective Time will be cancelled and converted into the right to receive the Merger Consideration

with respect to each share of WBD Common Stock underlying such vested WBD RSU, with the number of shares of WBD Common Stock subject to

such vested WBD RSU granted with performance-based vesting conditions determined as described below.

· Each WBD RSU that is outstanding immediately prior to the Effective Time and that is not a vested WBD

RSU, will be assumed by Paramount and automatically converted into the contingent right to receive an amount in cash, without interest,

equal to the product of (i) the Merger Consideration, multiplied by (ii) the total number of shares of WBD Common Stock subject

to such unvested WBD RSU immediately prior to the Effective Time, and remaining subject to generally the same terms and conditions (including

any applicable terms relating to accelerated vesting upon qualifying terminations of employment and timing and form of payment) that applied

to the corresponding unvested WBD RSU immediately prior to the Effective Time.

· The total number of unvested WBD RSUs with performance-based vesting conditions expected to vest will

be determined by assuming (i) in respect of such unvested WBD RSUs for which the applicable performance period has been completed

prior to the Effective Time, actual performance, and (ii) in respect of such unvested WBD RSUs for which the applicable performance

period has not been completed prior to the Effective Time, achievement at the greater of (x) target performance and (y) actual

performance extrapolated through the end of the applicable performance period based on actual performance through the Effective Time,

determined by the board of directors of WBD or a committee thereof in good faith and consistent with past practice.

Deferred and Notional Equity Units

At the Effective Time:

· Each deferred stock unit (“DSU”) that is outstanding immediately prior to the Effective Time

will be assumed by Paramount and automatically converted into a right to receive an amount in cash, without interest, equal to the product

obtained by multiplying (A) the Merger Consideration by (B) the number of shares of WBD Common Stock subject to such DSU immediately

prior to the Effective Time (the “WBD DSU Consideration”), with such DSU Consideration remaining subject to the same terms

and conditions that applied to the corresponding DSU immediately prior to the Effective Time.

· Each notional investment unit with respect to shares of WBD Common Stock (a “WBD Notional Unit”)

subject to WBD’s Non-Employee Directors Deferral Plan and WBD’s Supplemental Retirement Plan (each, a “WBD DC Plan”)

that is outstanding immediately prior to the Effective Time will be assumed by Paramount and automatically converted into a notional unit

with respect to a number of shares of Class B common stock, par value $0.001 per share (“Paramount Class B Common Stock”),

of Paramount (a “Paramount Notional Unit”) equal to the product obtained by multiplying (A) the Equity Award Exchange

Ratio (as defined below) by (B) the number of shares of WBD Common Stock subject to such WBD Notional Unit immediately prior to the

Effective Time, with each such Paramount Notional Unit remaining subject to the same terms and conditions that applied to the corresponding

WBD Notional Unit immediately prior to the Effective Time (including with respect to timing and form of payment), as set forth in the

applicable WBD DC Plan. The “Equity Award Exchange Ratio” is determined by dividing (i) the Merger Consideration by (ii) the

per share volume-weighted average trading price of Paramount Class B Common Stock for the fifteen consecutive trading days ending

on (and including) the trading day that is three trading days prior to the Closing Date.

-2-

Financing

The Company expects to utilize a combination of

equity financing and committed debt financing to fund the Acquisition. The Company has entered into equity subscription agreements (“Subscription

Agreements”) providing for up to $46.7 billion of equity financing from affiliates of The Lawrence J. Ellison Revocable Trust and

$250.0 million from RedBird Capital Partners Fund IV (Master), L.P (collectively the “Equity Investors”), pursuant to a private

placement of Paramount Class B Common Stock (such private placement format being referred to herein as a private investment in public

equity, or “PIPE”, arrangement).

The Equity Investors have assigned their subscription

rights under the Subscription Agreements (the “Equity Syndication”) to a group of institutional investors (each, an "Equity

Syndication Party"), comprising affiliates of the Equity Investors, The Public Investment Fund, L'Imad 1st SPV 2 Exempt RSC LTD (an

investment vehicle of L'Imad Holding, an Abu Dhabi sovereign wealth fund), QIA TMT Holding LLC (an investment vehicle of the Qatar Investment

Authority), and LionTree Investment Fund, L.P. The aggregate allocations cover the full amount committed by the Equity Investors. At closing,

the Company will issue to each Equity Syndication Party a number of newly issued nonvoting shares of Paramount Class B Common Stock

(or securities convertible into shares) equal to its allocated amount divided by the Syndication Purchase Price, defined as the 20-trading-day

daily volume-weighted average price of Paramount Class B Common Stock determined as of the third business day prior to the closing

of the Acquisition, subject to a ceiling of $16.02 per share and a floor of $12.00 per share (the “Syndication Purchase Price”).

The Equity Syndication does not relieve the Equity Investors of their contractual commitments made to the Company.

Each holder of Paramount Class B Common Stock

(excluding any Equity Investor or affiliate thereof) as of a record date to be determined will receive, without payment of any consideration,

one 10-year warrant (each, a “Warrant”) for each share held, exercisable at an initial exercise price per share equal to the

Syndication Purchase Price and subject to customary anti-dilution and fundamental change make-whole adjustments. Beginning on the third

anniversary of issuance, the Company may call the Warrants for early expiration if the closing price of Paramount Class B Common

Stock equals or exceeds $30.00 for at least 20 trading days in any 30 consecutive trading day period and warrant holders will have until

such early expiration date to exercise their Warrants.

In addition, the Company entered into committed debt financing arrangements,

including the Pro Rata Credit Agreement, which provides for (i) $2.5 billion of three-year Term A-1 loans (“Term A-1 Loan Facility”),

(ii) $2.5 billion of five-year Term A-2 loans (“Term A-2 Loan Facility”) and (iii) $5.0 billion of five-year revolving

credit commitments, as well as a $49.0 billion 364-day senior secured bridge term loan facility (the “Bridge Commitments”).

The bridge facility is intended as contingent financing and is not expected to be drawn, unless permanent financing, including in the

form of the New Permanent Financing (as defined below), is not in place prior to the closing of the Acquisition. The Company intends to

replace the Bridge Commitments with the New Permanent Financing in the form of additional secured credit facilities and secured capital

markets indebtedness across the investment grade and non-investment grade markets as described below. Such financing, together with borrowings

under the Pro Rata Credit Agreement, is expected to comprise the Company’s post-closing capital structure and be incurred in the

form of first lien and second lien indebtedness, including term loan borrowings and secured notes (collectively, the “Acquisition

Financing Transactions”). The unaudited pro forma condensed combined financial statements reflect the assumed issuance of the New

Permanent Financing and do not assume any borrowings under the Bridge Commitments. The ultimate size, composition and terms of the Acquisition

Financing Transactions remain subject to market conditions and final execution.

The Acquisition Financing Transactions are currently expected to include

a combination of senior term loans and secured debt securities, in an amount up to $51.9 billion (the “New Permanent Financing”),

in addition to the $5.0 billion of Term A loans under the Pro Rata Credit Agreement. The Company intends to access the capital markets

through one or more financings to effect these transactions and reduce or replace any remaining Bridge Commitments, either prior to the

consummation of the Acquisition, or following the consummation of the Acquisition on the basis of the entry into the 364-day senior secured

bridge term loan facility (the “364-day Bridge Loan Facility”) pursuant to the Bridge Commitments. However, the ultimate aggregate

principal amount, allocation between instruments and terms of such financing will depend on prevailing market conditions and other factors

outside the Company’s control, and there can be no assurance that such financing will be consummated as currently contemplated (including

on the basis of the assumptions herein, inclusive of interest rates assumptions) or on favorable terms, or that such financing will be

consummated at all. For purposes of the unaudited pro forma condensed combined financial statements, the Company has assumed that the

Acquisition Financing Transactions are completed as described above, including the consummation of the New Permanent Financing prior to

the consummation of the Acquisition. In the event that the Bridge Commitments were drawn in order to finance the Acquisition, a fee of

0.5% payable to the bridge financing sources would apply to the principal amount of any such debt funded.

-3-

On June 4, 2026, WBD entered into a seven-year

$13.0 billion term loan (“WBD Dollar Term Loans”), and a seven-year €1.7 million term loan (the “WBD Euro Term

Loans” and together with the WBD Dollar Term Loans the “WBD Term Loans”). The proceeds were used to repay the $15.0

billion bridge facility that WBD had outstanding on March 31, 2026. The WBD Term Loans will be replaced or refinanced with the 364-day

Bridge Loan Facility or the proceeds of the offering of the New Permanent Financing, if not refinanced by WBD prior to closing of the

Acquisition. The unaudited pro forma condensed combined financial statements reflect the settlement of WBD’s $15.0 billion bridge

facility. The WBD Term Loans are not reflected within the unaudited pro forma condensed combined financial statements.

The Company also intends to refinance and terminate

WBD’s $5.0 billion accounts receivable securitization program (of which $3.9 billion was utilized as of March 31, 2026) within

close proximity to the closing of the Acquisition (or shortly thereafter). For purposes of the unaudited pro forma condensed combined

financial statements, the Company has assumed the termination of the securitization facility and the related repurchase of accounts receivable

are completed at closing.

In connection with the execution of the WBD Merger

Agreement, Paramount paid the termination fee of $2.8 billion (the “Netflix Termination Fee”) due to Netflix, Inc. under

the Amended and Restated Agreement and Plan of Merger, dated as of January 19, 2026, by and among WBD, Netflix, Inc, Nightingale

Sub, Inc., and New Topco 25, which was terminated prior to the execution of the WBD Merger Agreement. The Netflix Termination Fee

is reflected in Paramount’s historical balance sheet at March 31, 2026.

The consummation of the Acquisition is subject

to customary closing conditions, including receipt of required regulatory approvals and no government order being in effect that enjoins

the transaction, and is not subject to a financing condition. As of the date of this filing, the Acquisition has not been consummated

but is considered probable for purposes of these pro forma financial statements.

Exchange Offers and Tender Offers

In connection with the Acquisition, the Company

is offering to exchange any and all of the Existing WBD Notes (defined below) for the applicable series of newly issued second lien secured

notes to be issued by the Company (the “Second Lien Secured Exchange Notes”) (each offer to exchange, an “Exchange Offer”

and together, the “Exchange Offers”). The Second Lien Secured Exchange Notes will be fully and unconditionally guaranteed,

jointly and severally, on a senior secured basis by certain of the Company’s wholly owned domestic subsidiaries that are an obligor

under the Pro Rata Credit Agreement, subject to certain customary exceptions, and will be secured, subject to certain limitations and

exceptions and customary permitted liens, on a second priority basis, equally and ratably with all party lien indebtedness of the Company

and related guarantors. In certain circumstances when, among other things, the Second Lien Secured Exchange Notes are rated investment

grade by two out of three rating agencies, the liens securing the Second Lien Secured Exchange Notes and related guarantees may be automatically

released.

The Existing WBD Notes were issued by Discovery

Communications, LLC, a Delaware limited liability company (the “DCL Issuer”), and Discovery Global Holdings, Inc. (formerly

WarnerMedia Holdings, Inc.), a Delaware corporation (the “DGH Issuer” and, together with the DCL Issuer, the “Existing

WBD Issuers”).

-4-

The consideration offered in the Exchange Offers

(i) per $1,000 in aggregate principal amount of U.S. dollar-denominated Existing WBD Notes tendered and (ii) per €1,000

in aggregate principal amount of Euro-denominated Existing WBD Notes tendered, in each case, is summarized below:

Existing WBD Notes to be

Exchanged (the “Existing

WBD Notes”)

Issuer of Existing

WBD Notes

Aggregate Principal Amount of Notes

Validly Delivered in Consent Solicitations

and Eligible to Participate in the

Exchange Offers

(amount in millions)

Second Lien Secured

Exchange Notes Offered

4.125% Senior Notes due 2029

DCL Issuer

$655,825,000

6.250% Senior Secured Second Lien Notes due 2029

3.625% Senior Notes due 2030

DCL Issuer

$914,183,000

4.875% Senior Secured Second Lien Notes due 2030

5.000% Senior Notes due 2037

DCL Issuer

$453,281,000

5.000% Senior Secured Second Lien Notes due 2037

6.350% Senior Notes due 2040

DCL Issuer

$438,102,000

6.350% Senior Secured Second Lien Notes due 2040

4.950% Senior Notes due 2042

DCL Issuer

$130,366,000

4.950% Senior Secured Second Lien Notes due 2042

4.875% Senior Notes due 2043

DCL Issuer

$141,584,000

4.875% Senior Secured Second Lien Notes due 2043

5.200% Senior Notes due 2047

DCL Issuer

$3,161,000

5.200% Senior Secured Second Lien Notes due 2047

5.300% Senior Notes due 2049

DCL Issuer

$247,860,000

5.300% Senior Secured Second Lien Notes due 2049

4.054% Senior Notes due 2029

DGH Issuer

$1,353,828,000

6.250% Senior Secured Second Lien Notes due 2029

4.279% Senior Notes due 2032

DGH Issuer

$2,691,764,000

4.875% Senior Secured Second Lien Notes due 2030

5.050% Senior Notes due 2042

DGH Issuer

$4,104,687,000

5.000% Senior Secured Second Lien Notes due 2037

5.141% Senior Notes due 2052

DGH Issuer

$949,883,000

6.350% Senior Secured Second Lien Notes due 2040

4.302% Senior Notes due 2030

DGH Issuer

€234,382,000

4.95% Senior Secured Second Lien Notes due 2042

4.693% Senior Notes due 2033

DGH Issuer

€316,641,000

4.875% Senior Secured Second Lien Notes due 2043

Concurrently with the Exchange Offers, the Company

is offering to purchase for cash (the “Tender Offers”) the aggregate principal amount of notes eligible to participate in

the Tender Offers. Specifically, the Company is offering to purchase (i) the DCL Issuer’s $1.234 billion aggregate principal

amount of 3.950% Senior Notes due 2028 and (ii) the DGH Issuer’s $1.189 billion aggregate principal amount of 3.755% Senior

Notes due 2027.

For purposes of these pro forma financial statements,

it is assumed that 100% of the $12.7 billion principal amount of Existing WBD Notes eligible to participate in the Exchange Offers and

100% of the $2.423 billion of the Existing WBD Notes subject to Tender Offers will, in each case, be exchanged or tendered, as applicable,

in full in the applicable Exchange Offer or Tender Offers. The ultimate aggregate principal amount of Second Lien Secured Exchange Notes

exchanged for Existing WBD Notes in the Exchange Offers, and the terms to which such indebtedness will be subject, and the amount of Existing

WBD Notes tendered in the Tender Offers is subject to change based on the ultimate results of such Exchange Offers and Tender Offers,

including as a result of market conditions or other factors outside of the Company’s control, and the Company can make no assurances

that the Exchange Offers and Tender Offers will be consummated in accordance with such assumptions or at all.

-5-

Completed Skydance Transactions and NAI Transaction

On August 7, 2025, pursuant to a transaction

agreement dated July 7, 2024, Paramount Global and Skydance Media, LLC (“Skydance”) became wholly owned subsidiaries

of Paramount Skydance Corporation (the “Skydance Transactions”). Substantially concurrently with the closing of the Skydance

Transactions, Pinnacle Media Ventures, LLC, Pinnacle Media Ventures II, LLC and Pinnacle Media Ventures III, LLC, each entities controlled

by the Ellison Family (as defined below), and RB Tentpole Holdings LP (the “NAI Equity Investors”) acquired 100% of the equity

interests of Harbor Lights Entertainment, Inc. (f/k/a National Amusements, Inc. (“NAI”)), from NAI’s shareholders

under a purchase and sale agreement and, through their ownership of NAI, the NAI Equity Investors indirectly received an aggregate of

31.5 million shares of Class A common stock and 32.0 million shares of Class B common stock of Paramount Skydance Corporation

(the “NAI Transaction”). Following the closing of the Skydance Transactions and the NAI Transaction, entities controlled by

the Ellison Family indirectly hold approximately 77.5% of the Class A common stock of Paramount Skydance Corporation through their

collective approximate 77.5% ownership interest in NAI, which was renamed Harbor Lights Entertainment Inc., and as a result the Ellison

Family is the controlling stockholder and ultimate parent (“Ultimate Parent”) of Paramount. For the purpose of determining

the controlling ownership of Paramount, 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.

In connection with the Skydance Transactions,

PIPE investors, including the NAI Equity Investors, made an investment of $6.0 billion into Paramount Skydance Corporation in exchange

for 400 million shares of Class B common stock at $15.00 per share and the NAI Equity Investors received, in connection with their

PIPE investment, an aggregate of 200 million five-year warrants exercisable at $30.50 per share (subject to customary anti-dilution adjustments).

Approximately $4.5 billion of the PIPE proceeds were used to satisfy electing stockholders’ cash consideration in connection with

a cash-stock election offered to Paramount Global stockholders, with the remaining approximately $1.5 billion provided to Paramount Skydance

Corporation. As further described in Note 1, Paramount’s financial results for the year ended December 31, 2025 are presented

in two distinct periods to indicate a new basis of accounting established for Paramount Global’s net assets upon the closing of

the Skydance Transactions and NAI Transaction. The periods prior to August 7, 2025 include only Paramount Global and are identified

as “Predecessor”, and the periods beginning on August 7, 2025 reflect Paramount Skydance Corporation and are identified

as “Successor”.

Unaudited Pro Forma Condensed Combined Financial

Statements

The following unaudited pro forma condensed combined

financial statements have been prepared in accordance with Article 11 of Regulation S-X and are presented to illustrate the effects

of the completed Skydance Transactions and NAI Transaction and the Acquisition, collectively, the “Transactions”.

The unaudited pro forma Condensed Combined Balance

Sheet as of March 31, 2026 combines the historical consolidated balance sheet of Paramount as of March 31, 2026 and the historical

consolidated balance sheet of WBD as of March 31 2026, giving effect to the Acquisition as if it had occurred on March 31, 2026.

The unaudited pro forma Condensed Combined Statement

of Operations for the three months ended March 31, 2026 combines the historical Consolidated Statement of Operations of Paramount

for the three months ended March 31, 2026 and the historical Consolidated Statement of Operations of WBD for the three months ended

March 31, 2026, and gives effect to the Acquisition as if it had occurred on January 1, 2025.

The unaudited pro forma Condensed Combined Statement

of Operations for the year ended December 31, 2025 combines the Adjusted Combined Statement of Operations for the year ended December 31,

2025 of Paramount and the historical Consolidated Statement of Operations for the year ended December 31, 2025 of WBD, giving effect

to the Transactions as if they had occurred on January 1, 2025.

The Adjusted Combined Statement of Operations

of Paramount reflects the combination of (i) the historical consolidated Statement of Operations of Paramount Global (Predecessor)

for the period from January 1, 2025 through August 6, 2025 (ii) the historical results of Skydance for the same period

(iii) the historical consolidated Statement of Operations of Paramount Skydance Corporation from August 7, 2025 to December 31,

2025 (Successor) and (iv) the effects of the Skydance Transactions and NAI Transaction as if they had closed on January 1, 2025.

As a result of the pushdown of the Ultimate Parent’s basis, the net assets of Paramount Global were recorded at their fair value

as of the close of the Skydance Transactions and NAI Transaction. No adjustments to the August 7, 2025 to December 31, 2025

Successor period are necessary, as the impacts from the Skydance Transactions and NAI Transaction are included in Paramount’s historical

results for this period.

-6-

The impact of the Acquisition, including the committed

equity financing, on the outstanding shares and equity of Paramount is discussed in Note 5 and Note 8.

The pro forma transaction accounting adjustments

to adjust WBD’s net assets to preliminary estimates of fair value are based on information available to the Company as of the date

of this filing. The fair value estimates made herein may differ materially based upon the finalization of appraisals and other valuation

analyses, which is expected no later than one year from the closing date of the Acquisition. These unaudited pro forma condensed combined

financial statements are presented for illustrative purposes only and do not necessarily reflect the operating results or financial position

that would have occurred if the Transactions had been consummated on the dates indicated, nor are they necessarily indicative of the results

of operations or financial condition that may be expected for any future period or date. Accordingly, such information should not be relied

upon as an indicator of future performance, financial condition or liquidity. Additionally, the unaudited pro forma condensed combined

financial statements do not give effect to revenue synergies, operating efficiencies or cost savings that may be achieved with respect

to the combined company. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed

combined financial statements.

The unaudited pro forma condensed combined financial

statements should be read in conjunction with the following materials:

· The accompanying notes to the unaudited pro forma condensed combined financial statements;

· Paramount's historical unaudited consolidated financial statements and the notes thereto contained in

the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, filed on May 4, 2026,

and the historical audited consolidated financial statements and the notes thereto for Paramount Global (Predecessor) for the period from

January 1, 2025 to August 6, 2025 and Paramount Skydance Corporation (Successor) as of December 31, 2025 and for the period

from August 7, 2025 to December 31, 2025 contained in Paramount’s Current Report on Form 8-K, filed on May 13,

2026;

· Skydance’s historical unaudited condensed consolidated financial statements for the six-month period

ended and as of June 30, 2025 contained in the Company’s Form 8-K/A filed October 23, 2025; and

· WBD’s historical unaudited consolidated financial statements and the notes thereto contained in

WBD’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, filed on May 6, 2026, and the

historical audited consolidated financial statements and the notes thereto contained in WBD’s Annual Report on Form 10-K for

the year ended December 31, 2025, filed on February 27, 2026, in each case, also incorporated by reference in the Current Report

of Paramount on Form 8-K with which these pro forma financial statements are filed.

-7-

PARAMOUNT SKYDANCE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE

SHEET

AT MARCH 31, 2026

(In millions)

Pro

Forma Adjustments

Paramount

Skydance

Corp.

WBD

Adjusted (2)

WBD

Transaction

Accounting

Adjustments

Financing

Adjustments (5)

Pro

Forma

Assets

Current

Assets:

Cash

and cash equivalents

$ 1,941

$ 3,264

$ (93,920

)

(3a)

$ 56,379

(5a)

$ 7,834

(3,850

)

(8d)

(2,437

)

(5d)

(67

)

(5c)

(382

)

(5e)

46,906

(5g)

Receivables,

net

6,850

5,009

2,473

(4)

—

14,332

Programming

and other inventory

1,000

218

—

1,218

Prepaid

expenses and other current assets

1,764

3,146

—

4,910

Total

current assets

11,555

11,637

(95,297

)

100,399

28,294

Property

and equipment, net

2,205

6,642

(314

)

(4g)

—

8,533

Programming

and other inventory

15,472

19,416

3,335

(4)

—

38,223

Goodwill

1,622

25,874

32,259

(4a)

—

59,755

Intangible

assets, net

5,954

26,803

11,584

(4)

—

44,341

Operating

lease assets

1,084

2,749

—

3,833

Deferred

income tax assets

1,241

617

—

1,858

Advance

consideration for WBD acquisition

2,800

—

(2,800

)

(4)

—

Other

assets

2,555

4,099

1,211

(4h),

(8d)

—

7,865

Total

Assets

$ 44,488

$ 97,837

$ (50,022

)

$ 100,399

$ 192,702

Liabilities

and Stockholders’ Equity

Current

Liabilities:

Accounts

payable

$ 707

$ 1,110

$ (46

)

(4)

$ —

$ 1,771

Accrued

expenses

1,730

6,066

(2,485

)

(4)

—

5,311

Participants’

share and royalties payable

2,613

3,483

—

6,096

Accrued

programming and production costs

1,857

2,086

(824

)

(4)

—

3,119

Deferred

revenues

1,354

1,592

—

2,946

Debt

662

1,493

—

2,155

Other

current liabilities

1,580

285

601

(4)

—

2,466

Total

current liabilities

10,503

16,115

(2,754

)

—

23,864

Long-term

debt

14,821

30,973

(19,538

)

(4)

56,379

(5a)

80,203

(2,392

)

(5d)

(40

)

(5c)

Participants’

share and royalties payable

1,404

2,378

—

3,782

Pension

and postretirement benefit obligations

1,178

226

—

1,404

Deferred

income tax liabilities

5,873

5,029

(9a)

—

10,992

Operating

lease liabilities

1,112

3,226

—

4,338

Programming

obligations

386

1,424

—

1,810

Other

liabilities

2,245

3,915

140

(4)

—

6,300

Paramount

stockholders’ equity:

Class A

Common Stock

—

(27

)

(4f)

—

Class B

Common Stock

—

(5g)

Additional

paid-in-capital

13,316

55,865

(55,865

)

(4f)

46,902

(5g)

60,218

Treasury

stock

—

(8,244 )

8,244

(4f)

—

Retained

earnings (accumulated deficit)

(1,585 )

(14,428 )

40,456

(4f), (8d)

(45

)

(5d)

(2,360 )

(25,874

)

(4a)

(27

)

(5c)

(475

)

(8b)

(382

)

(5e)

Accumulated

other comprehensive loss

(27 )

(642 )

642

(4f)

—

(27 )

Total

Paramount stockholders' equity

11,705

32,578

(32,899

)

46,452

57,836

Noncontrolling

interests

1,044

1,129

—

2,173

Total

Equity

12,749

33,707

(32,899

)

46,452

60,009

Total

Liabilities and Equity

$ 44,488

$ 97,837

$ (50,022

)

$ 100,399

$ 192,702

The accompanying notes are an integral part of

these unaudited pro forma condensed combined financial statements.

-8-

PARAMOUNT SKYDANCE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT

OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2026

(In millions, except per share amounts)

Pro Forma Adjustments

Paramount

Skydance

Corp.

WBD

Adjusted (2)

WBD

Transaction

Accounting

Adjustments

Financing

Adjustments (5)

Pro Forma

Revenues

$ 7,347

$ 8,893

$ (111 )

(4)

$ —

$ 16,129

Costs and expenses:

Operating

4,855

4,893

(4)

—

9,816

Selling, general and administrative

1,411

2,052

(85 )

(4)

—

3,378

Netflix Termination Fee

—

2,800

(2,800 )

3a(4)

—

Depreciation and amortization

362

1,226

633

(4)

—

2,221

Restructuring, transaction-related items and other corporate matters

103

391

—

494

Total costs and expenses

6,731

11,362

(2,184 )

—

15,909

Operating income (loss)

616

(2,469 )

2,073

—

220

Interest expense, net

(200 )

(559 )

261

(4)

(1,005 )

(5f)

(1,503 )

Loss on extinguishment of debt

—

(27 )

—

(27 )

Other items, net

(24 )

(60 )

—

(84 )

Earnings (loss) before income taxes and equity in loss of investee companies

392

(3,115 )

2,334

(1,005 )

(1,394 )

(Provision for) benefit from income taxes

(155 )

215

122

(9c)

251

(9c)

433

Equity in loss of investee companies, net of tax

(62 )

(6 )

—

(68 )

Net earnings (loss) (Paramount and noncontrolling interests)

175

(2,906 )

2,456

(754 )

(1,029 )

Net earnings attributable to noncontrolling interests

(7 )

(10 )

—

(17 )

Net earnings (loss) attributable to Paramount

$ 168

$ (2,916 )

$ 2,456

$ (754 )

$ (1,046 )

Net earnings (loss) per common share attributable to Paramount:

Basic

$ .15

$ (.21 )

Diluted

$ .15

$ (.21 )

Weighted average number of common shares outstanding:

Basic

1,110

3,913

(10)

5,023

Diluted

1,118

3,905

(10)

5,023

The accompanying notes are an integral part of

these unaudited pro forma condensed combined financial statements.

-9-

PARAMOUNT SKYDANCE CORPORATION

UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT

OF OPERATIONS

YEAR ENDED DECEMBER 31, 2025

(In millions, except per share amounts)

Pro Forma Adjustments

Paramount

Skydance Corp.

Adjusted (6)

WBD

Adjusted (2)

WBD

Transaction

Accounting

Adjustments

Financing

Adjustments (5)

Pro Forma

Revenues

$ 29,394

$ 37,296

$ (557 )

(4)

$ —

$ 66,133

Costs and expenses:

Operating

20,347

21,853

433

(4)

—

42,633

Programming charges

—

Selling, general and administrative

6,136

8,284

(259 )

(4)

—

14,161

Depreciation and amortization

1,469

5,684

1,737

(4)

—

8,890

Impairment charges

157

—

157

Restructuring, transaction-related items, and other corporate matters

1,453

698

516

(4)

(5c)

2,703

(5d)

Total costs and expenses

29,603

36,519

2,427

68,585

Gain (loss) on dispositions

(39 )

—

(4 )

Operating income (loss)

(174 )

738

(2,984 )

(36 )

(2,456 )

Interest expense, net

(760 )

(1,879 )

872

(4)

(4,393 )

(5f)

(6,160 )

Gain (loss) from investments

(40 )

—

(34 )

Gain on extinguishment of debt

—

2,945

—

(36 )

(5d)

2,909

Other items, net

(51 )

(147 )

—

(198 )

Earnings (loss) before income taxes and equity in loss of investee companies

(1,025 )

1,663

(2,112 )

(4,465 )

(5,939 )

Benefit from (provision for) income taxes

319

(896 )

446

(9c)

1,117

(9c)

986

Equity in loss of investee companies, net of tax

(275 )

(18 )

—

(293 )

Net earnings (loss) (Parent and noncontrolling interests)

(981 )

749

(1,666 )

(3,348 )

(5,246 )

Net earnings attributable to noncontrolling interests

(490 )

(24 )

—

(514 )

Net loss attributable to redeemable noncontrolling interests

—

Net earnings (loss) attributable to Parent

$ (1,471 )

$ 727

$ (1,666 )

$ (3,348 )

$ (5,758 )

Net loss per common share attributable to Parent (basic and diluted):

Class B common stockholders - Receiving Warrants

$ 4.54

Common stockholders - Other

$ (1.74 )

Common stockholders - All

$ (1.34 )

$ (1.15 )

Weighted average number of common shares outstanding (basic and diluted):

Class B common stockholders - Receiving Warrants

472

(10)

472

Common stockholders - Other

1,099 (6j)

3,441

(10)

4,540

Common stockholders - All

1,099 (6j)

3,913

(10)

5,012

The accompanying notes are an integral part of

these unaudited pro forma condensed combined financial statements.

-10-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS

(Tabular dollars in millions, except per share

amounts)

1) BASIS OF PRESENTATION

The accompanying unaudited pro forma condensed

consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the

information and note disclosures required by generally accepted accounting principles in the United States of America (“U.S GAAP”).

Pro forma financial information illustrates the effects of a particular transaction (or transactions) and is based on historically determined

amounts. The historical financial statements of Paramount, Skydance, and WBD have been adjusted in the accompanying unaudited pro forma

condensed combined financial statements to reflect transaction accounting adjustments that depict the estimated accounting effects of

the Transactions in accordance with U.S GAAP.

At the time Paramount Global and Skydance became

subsidiaries of Paramount Skydance Corporation, the Ellison Family controlled both Paramount Global and Skydance (and was the “Ultimate

Parent” of each), and as a result, the Skydance Transactions were accounted for as a transaction between entities under common control.

As a transaction between entities under common control, the net assets were combined at the Ultimate Parent’s basis, which for Paramount

Global was deemed to be the estimated fair value as of August 7, 2025, the date of the closing of the NAI Transaction, which was

the point at which the Ellison Family obtained control of Paramount Global. As a result, the net assets of Paramount Global were recorded

at their fair value as of this date. Since the net assets of Skydance were already at the Ultimate Parent’s basis, no adjustment

to the fair value of net assets was necessary, and Skydance was combined with Paramount Global’s net assets at the Ultimate Parent’s

basis as of this date. The pushdown of the Ultimate Parent’s basis resulted in a new basis of accounting for Paramount Global’s

net assets, which made the results of operations not comparable between the periods before and after the Skydance Transactions and the

NAI Transaction. Accordingly, Paramount’s financial results for the year ended December 31, 2025 are presented in two distinct

periods. The periods prior to August 7, 2025 include only Paramount Global and are identified as “Predecessor”, and the

periods beginning on August 7, 2025 reflect Paramount Skydance Corporation and are identified as “Successor”. See Note

The unaudited pro forma Condensed Combined Balance

Sheet as of March 31, 2026 combines the historical consolidated balance sheet of Paramount as of March 31, 2026, and the historical

consolidated balance sheet of WBD as of March 31, 2026, giving effect to the Acquisition as if it had occurred on March 31,

2026. These pro forma financial statements reflect assumptions and adjustments set forth in the accompanying explanatory notes.

The unaudited pro forma Condensed Combined Statement

of Operations for the three months ended March 31, 2026 combines the historical Consolidated Statements of Operations of Paramount

and WBD, as if the Acquisition occurred on January 1, 2025.

The unaudited pro forma Condensed Combined Statement

of Operations for the year ended December 31, 2025 combines the Adjusted Combined Statement of Operations for the year ended December 31,

2025 of Paramount and the historical Consolidated Statement of Operations for the year ended December 31, 2025 of WBD giving effect

to the Transactions as if they had occurred on January 1, 2025. The Adjusted Combined Statement of Operations of Paramount reflects

the combination of (i) the historical consolidated Statement of Operations of Paramount Global (Predecessor) for the period from

January 1, 2025 through August 6, 2025 (ii) the historical results of Skydance for the same period (iii) the historical

consolidated Statement of Operations of Paramount Skydance Corporation from August 7, 2025 to December 31, 2025 (Successor)

and (iv) the effects of the Skydance Transactions and NAI Transaction as if they had closed on January 1, 2025. As a result

of the pushdown of the Ultimate Parent’s basis, the net assets of Paramount Global were recorded at their fair value as of the close

of the Skydance Transactions and NAI Transaction. No adjustments to the August 7, 2025 to December 31, 2025 Successor period

are necessary, as the impacts from the Skydance Transactions and NAI Transaction are included in Paramount’s historical results

for this period.

-11-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

In addition, the historical financial statements

of WBD and the historical Skydance results for the period from January 1, 2025 through August 6, 2025 have been adjusted to

align with the Company’s presentation in the unaudited pro forma condensed combined financial statements (See Notes 2 and 6).

The preparation of the unaudited pro forma condensed

combined financial statements incorporates various assumptions and estimates, including those related to the preliminary purchase price

allocation of WBD as well as, among other things, the timing and financing for the Acquisition. The pro forma transaction accounting adjustments

to adjust WBD’s net assets to preliminary estimates of fair value are based on information available to the Company as of the date

of this filing. The fair value estimates made herein may differ materially based upon the finalization of appraisals and other valuation

analyses, which is expected no later than one year from the closing date of the Acquisition. These unaudited pro forma condensed combined

financial statements are presented for illustrative purposes only and do not necessarily reflect the operating results or financial position

that would have occurred if the Transactions had been consummated on the dates indicated, nor are they necessarily indicative of the results

of operations or financial condition that may be expected for any future period or date.

Accordingly, such information should not be relied

upon as an indicator of future performance, financial condition or liquidity. Additionally, the unaudited pro forma condensed combined

financial statements do not give effect to revenue synergies, operating efficiencies or cost savings that may be achieved with respect

to the combined company. Actual results may differ materially from the assumptions within the accompanying unaudited pro forma condensed

combined financial statements.

2) PRESENTATION OF HISTORICAL WARNER BROS. DISCOVERY

The historical financial information of WBD included

in the unaudited pro forma condensed combined financial statements reflects certain reclassifications to conform to the Company’s

presentation, which are presented in the tables below.

-12-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

Balance Sheet Reclassifications

At March 31, 2026

Historical

WBD

Reclassification

Adjustments

WBD, Adjusted

Assets

Current Assets:

Cash and cash equivalents

$ 3,264

$ —

$ 3,264

Receivables, net

5,009

—

5,009

Programming and other inventory

—

218

Prepaid expenses and other current assets

3,468

(322 )

3,146

Total current assets

11,741

(104 )

11,637

Film and television content rights and games

19,312

(19,312 )

—

Property and equipment, net

6,642

—

6,642

Programming and other inventory

—

19,416

Goodwill

25,874

—

25,874

Intangible assets, net

26,803

—

26,803

Operating lease assets

—

2,749

Deferred income taxes

—

617

Other noncurrent assets

7,465

(7,465 )

—

Other assets

—

4,099

Total Assets

$ 97,837

$ —

$ 97,837

-13-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

At March 31, 2026

Historical WBD

Reclassification

Adjustments

WBD, Adjusted

Liabilities and Equity

Current Liabilities:

Accounts payable

$ 1,110

$ —

$ 1,110

Accrued liabilities

11,920

(11,920 )

—

Accrued expenses

—

6,066

Participants' share and royalties payable

—

3,483

Accrued programming and production costs

—

2,086

Deferred revenues

1,592

—

1,592

Current portion of debt

1,493

(1,493 )

—

Debt

—

1,493

Other current liabilities

—

285

Total current liabilities

16,115

—

16,115

Noncurrent portion of debt

30,973

(30,973 )

—

Long-term debt

—

30,973

Participants' share and royalties payable

—

2,378

Pension and postretirement benefit obligations

—

226

Deferred income taxes

5,873

(5,873 )

—

Deferred income tax liabilities, net

—

5,873

Operating lease liabilities

—

3,226

Programming obligations

—

1,424

Other noncurrent liabilities

11,169

(11,169 )

—

Other liabilities

—

3,915

Stockholders’ equity:

Class A common stock

—

Additional paid-in-capital

55,865

—

55,865

Treasury stock

(8,244 )

—

(8,244 )

Accumulated deficit

(14,428 )

—

(14,428 )

Accumulated other comprehensive loss

(642 )

Total Parent stockholders’ equity

32,578

—

32,578

Noncontrolling interests

1,129

—

1,129

Total Equity

33,707

—

33,707

Total Liabilities and Equity

$ 97,837

$ —

$ 97,837

-14-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

Statements of Operations Reclassifications

Three Months Ended March 31, 2026

Historical

WBD

Reclassification

Adjustments

WBD, Adjusted

Revenues

$ 8,893

$ —

$ 8,893

Costs and expenses:

Costs of revenues, excluding depreciation and amortization

4,643

(4,643 )

—

Operating

—

4,893

Selling, general and administrative

2,475

(423 )

2,052

Netflix Termination Fee

2,800

—

2,800

Depreciation and amortization

1,226

—

1,226

Restructuring and other charges

204

(204 )

—

Restructuring, transaction-related items, and other corporate matters

—

391

Impairments and loss on dispositions

(14 )

—

Total costs and expenses

11,362

—

11,362

Operating loss

(2,469 )

—

(2,469 )

Interest expense, net

(581 )

(559 )

Loss on extinguishment of debt

(27 )

—

(27 )

Loss from equity investees, net

(5 )

—

Other (expense) income, net

(38 )

—

Other items, net

—

(60 )

Loss before income taxes

(3,120 )

(3,115 )

Benefit from income taxes

—

215

Income tax benefit (expense)

214

(214 )

—

Equity in loss of investee companies, net of tax

—

(6 )

Net loss

(2,906 )

—

(2,906 )

Net income attributable to noncontrolling interests

(10 )

—

(10 )

Net loss available to Warner Bros. Discovery Inc.

$ (2,916 )

$ —

$ (2,916 )

-15-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

Year Ended December 31, 2025

Historical

WBD

Reclassification

Adjustments

WBD, Adjusted

Revenues

$ 37,296

$ —

$ 37,296

Costs and expenses:

Costs of revenues, excluding depreciation and amortization

20,885

(20,885 )

—

Operating

—

21,853

Selling, general and administrative

9,418

(1,134 )

8,284

Depreciation and amortization

5,684

—

5,684

Restructuring and other charges

399

(399 )

—

Restructuring, transaction-related items, and other corporate matters

—

698

Impairments and loss on dispositions

172

(172 )

—

Total costs and expenses

36,558

(39 )

36,519

Loss on dispositions

—

(39 )

Operating income

738

—

738

Interest expense, net

(2,085 )

206

(1,879 )

Gain from investment

—

Gain on extinguishment of debt

2,945

—

2,945

Loss from equity investees, net

(24 )

—

Other (expense) income, net

(65 )

—

Other items, net

—

(147 )

Income before income taxes

1,639

1,663

Provision for income taxes

—

(896 )

Income tax benefit (expense)

(890 )

890

—

Equity in loss of investee companies, net of tax

—

(18 )

Net income

749

—

749

Net income attributable to noncontrolling interests

(24 )

—

(24 )

Net loss attributable to redeemable noncontrolling interests

—

Net income attributable to Warner Bros. Discovery, Inc.

$ 727

$ —

$ 727

3) PRELIMINARY PURCHASE PRICE ALLOCATION

Estimated Total Aggregate Acquisition Consideration

Pursuant to the

WBD Merger Agreement, on the Acquisition closing date, all of WBD’s outstanding common shares

will be converted into the right to receive $31.00 per share, excluding for purposes of the calculations herein any applicable Ticking

Consideration as the Company assumes for the purposes of preparing these pro forma financial statements that the transaction will close

prior to September 30, 2026.

-16-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

(a) The preliminary purchase consideration is calculated as follows:

Preliminary Purchase Consideration Paid to WBD Shareholders (in millions except per share amounts)

Amount

Common stock outstanding (1)

2,511

Per share cash purchase price

$ 31

Cash paid to WBD’s shareholders

$ 77,837

Add: Cash paid related to pre-combination portion of replacement awards (2)

1,083

Add: Settlement of indebtedness (3)

15,000

Total cash consideration

93,920

Add: Netflix termination fee (4)

2,800

Add: Liabilities assumed related to pre-combination portion of replacement awards (2)

741

Less: Settlement of pre-existing relationships (5)

(184 )

Total preliminary purchase consideration

$ 97,277

(1) The amount of estimated shares of WBD Common Stock is based

on 2,507,136,702 shares of WBD Common Stock issued and outstanding as of April 23, 2026, per WBD’s Quarterly Report on Form 10-Q

for the three months ended March 31, 2026, as filed with the SEC on May 6, 2026, adjusted for 3,737,162 WBD PRSUs that were

vested, but not distributed at that date.

(2) Reflects $1.1 billion in estimated cash payments to holders

of vested WBD stock options, RSUs, and PRSUs, and $741 million in estimated liabilities related to holders of unvested WBD stock options,

RSUs, and PRSUs that will be converted into the contingent right to receive cash-based awards of Paramount, with $601 million recorded

within “Other current liabilities” and $140 million within “Other liabilities” on the unaudited pro forma Condensed

Combined Balance Sheet.

(3) Reflects the settlement of WBD’s $15.0 billion bridge

facility. On June 4, 2026, WBD issued the WBD Term Loans, the proceeds of which were used to repay the $15.0 billion bridge facility

that WBD had outstanding on March 31, 2026. The WBD Term Loans are expected to be replaced or refinanced, subject to the related

cooperation requirements in the WBD Merger Agreement and therefore have not been reflected within the unaudited pro forma condensed combined

financial statements. The adjustment to remove the $15.0 billion bridge facility in the unaudited pro forma Condensed Combined Balance

Sheet is reflected net of deferred issuance costs of $117 million.

(4) The $2.8 billion termination fee paid to Netflix by Paramount,

on behalf of WBD, in connection with the execution of the WBD Merger Agreement has been treated as purchase consideration. Accordingly,

pro forma adjustments have been recorded to the unaudited pro forma Condensed Combined Balance Sheet to (i) eliminate Paramount’s

prepaid asset related to the termination fee and (ii) remove WBD’s accrued liability associated with the obligation. In addition,

an adjustment has been recorded to the unaudited pro forma Condensed Combined Statement of Operations for the three months ended March 31,

2026 to eliminate the expense recognized by WBD in its historical financial statements related to the termination fee.

(5) Settlement of pre-existing relationships consists of Paramount’s

net payable to WBD of $184 million, comprised of receivables due from WBD of approximately $277 million and payables due to WBD and accrued

programming liabilities related to WBD, of $36 million and $425 million, respectively.

-17-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

(b) The accounting for the Acquisition, including the preliminary

purchase consideration, is based on provisional amounts, and the associated purchase accounting is not final. The preliminary allocation

of the purchase price to the acquired assets and assumed liabilities was based upon a preliminary estimate of fair values, which leveraged

publicly available benchmarking information as well as a variety of other assumptions Paramount believes are reasonable under the circumstances.

Actual results may differ materially from the assumptions within the unaudited pro forma condensed combined financial information.

The following table summarizes the preliminary purchase

price allocation as of the date of the Acquisition, including the effects of intercompany eliminations which are reflected in Note 4:

Preliminary Purchase Price Allocation

Estimated

Fair Value

Cash and cash equivalents

$ 3,264

Receivables, net

4,548

Programming and other inventory

22,969

Prepaid expenses and other current assets

3,146

Property and equipment, net

6,328

Goodwill (1)

58,133

Intangible assets, net

38,387

Operating lease assets

2,749

Deferred income taxes

617

Other assets

4,718

Total assets acquired

$ 144,859

Accounts payable

$ 1,100

Accrued expenses

3,266

Participants’ share and royalties payable

5,861

Accrued programming and production costs

1,687

Deferred revenues

1,592

Debt

12,928

Deferred income taxes

10,943

Operating lease liabilities

3,226

Programming obligations

1,424

Pension and postretirement benefit obligation

226

Other liabilities

4,200

Total liabilities assumed

$ 46,453

Noncontrolling interests

1,129

Total preliminary purchase consideration

$ 97,277

(1) Goodwill represents the difference between the total preliminary purchase consideration and the estimated

fair value of WBD’s net assets based on the preliminary fair value estimates assumed herein.

-18-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

4) WARNER BROS. DISCOVERY TRANSACTION ACCOUNTING ADJUSTMENTS

Balance Sheet Pro Forma Adjustments

At March 31, 2026

WBD Transaction Accounting Adjustments

Transaction

Accounting

Adjustments

Intercompany

Transactions (7)

Total

Assets

Current Assets:

Cash and cash equivalents

$ (97,770

)

3a, 8d

$ —

$ (97,770 )

Receivables, net

2,934

3a(5), 8d

(461 )

2,473

Total current assets

(94,836

)

(461 )

(95,297 )

Programming and other inventory

3,528

(193 )

3,335

Property and equipment, net

(314

)

—

(314 )

Goodwill

31,962

297

32,259

Intangible assets, net

11,584

—

11,584

Advance consideration for WBD acquisition

(2,800

)

3a(4)

—

(2,800 )

Deferred income tax assets

—

Other Assets

1,211

4h, 8d

—

1,211

Total Assets

$ (49,665

)

$ (357 )

$ (50,022 )

Liabilities and Stockholders’ Equity

Current Liabilities:

Accounts payable

$ (36

)

3a(5)

$ (10 )

$ (46 )

Accrued expenses

(2,485

)

3a(4), 8a, 8d

—

(2,485 )

Accrued programming and production costs

(425

)

3a(5)

(399 )

(824 )

Other current liabilities

601

3a(2)

—

601

Total current liabilities

(2,345

)

(409 )

(2,754 )

Long-term debt

(19,538

)

—

(19,538 )

Deferred income tax liabilities

4,977

52 9a

5,029

Other liabilities

140

3a(2)

—

140

Stockholders’ equity:

—

Class A common stock

(27

)

—

(27 )

Additional paid-in-capital

(55,865

)

—

(55,865 )

Treasury stock

8,244

—

8,244

Accumulated deficit

14,107

4f, 8b, 8d

—

14,107

Accumulated other comprehensive loss

642

—

642

Total stockholders’ equity

(32,899

)

—

(32,899 )

Total Equity

(32,899

)

—

(32,899 )

Total Liabilities and Equity

$ (49,665

)

$ (357 )

$ (50,022 )

-19-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

Statements of Operations Pro Forma Adjustments

Three Months Ended March 31, 2026

WBD Transaction Accounting Adjustments

Transaction

Accounting

Adjustments

Intercompany

Transactions (7)

Total

Revenues

$ —

$ (111 )

Costs and expenses:

Operating

177

(109 )

Selling, general and administrative

(68

)

8c, 8d

(17 )

(85 )

Netflix Termination Fee

(2,800

)

3a(4)

—

(2,800 )

Depreciation and amortization

633

—

633

Restructuring, transaction-related items, and other corporate matters

—

Total costs and expenses

(2,058

)

(126 )

(2,184 )

Operating income

2,058

2,073

Interest expense, net

261

—

261

Earnings (loss) before income taxes and equity in loss of investee companies

2,319

2,334

Provision for income taxes

125

(3 )

122

Net earnings (loss)

2,444

2,456

Net earnings (loss) attributable to Paramount

$ 2,444

$ 12

$ 2,456

Year Ended December 31, 2025

WBD Transaction Accounting Adjustments

Transaction

Accounting

Adjustments

Intercompany

Transactions (7)

Total

Revenues

$ —

$ (557

)

$ (557 )

Costs and expenses:

Operating

954

(521

)

433

Selling, general and administrative

(188

)

8c, 8d

(71

)

(259 )

Depreciation and amortization

1,737

—

1,737

Restructuring, transaction-related items, and other corporate matters

516

—

516

Total costs and expenses

3,019

(592

)

2,427

Operating loss

(3,019

)

(2,984 )

Interest expense, net

884

(12

)

872

Earnings (loss) before income taxes and equity in loss of investee companies

(2,135

)

(2,112 )

Provision for income taxes

452

)

446

Net earnings (loss)

(1,683

)

(1,666 )

Net earnings (loss) attributable to Parent

$ (1,683

)

$ 17

$ (1,666 )

-20-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

(4a) Reflects the following adjustments to goodwill related to the

Acquisition and elimination of intercompany transactions:

Pro Forma

Adjustment

Reversal of historical WBD goodwill

$ (25,874 )

(4f)

Preliminary purchase consideration

97,277

(3a)

Reverse WBD historical liability for Netflix Termination Fee

(2,800 )

(3a(4))

Settlement of WBD bridge facility

(14,883 )

(5b)

Effect of preliminary fair value adjustment to acquired intangible assets

(11,584 )

(4b)

Effect of preliminary fair value adjustment to assumed debt

(4,655 )

(4c)

Effect of preliminary fair value adjustment to acquired property and equipment

314

(4g)

Effect of preliminary fair value adjustment to acquired investments

(619 )

(4h)

Effect of preliminary fair value adjustment to acquired programming assets

(3,528 )

(4i)

Tax effects of Acquisition

5,018

(9a), (4e)

Reversal of historical WBD equity, net of historical goodwill reversal

(6,704 )

(4f)

Transaction accounting adjustments

31,962

Elimination of intercompany transactions

297

(7)

Total pro forma adjustment

$ 32,259

(4b) The pro forma adjustment reflects the estimated incremental

fair value of WBD’s intangible assets of $11.6 billion. Estimated amortization of the intangible assets is recognized on a straight-line

basis over their respective estimated useful lives. The estimated amortization period, estimated fair values, and related pro forma adjustments

for the incremental amortization expense are presented in the table below.

Estimated

Straight-Line

Amortization Period

Fair Value

Three Months

Ended March 31,

2026

Year Ended

December 31,

2025

Trade names

13 - 20 years

$ 8,868

$ 150

$ 595

Franchises

20 years

10,350

173

690

Character rights

20 years

610

Affiliate relationships

7 years

10,475

387

1,547

Technology

3 years

1,894

135

541

Subscriber relationships

3 years

2,500

250

1,000

Advertisers (relationship & backlog)

1.5 years

3,690

461

1,846

Total

$ 38,387

$ 1,566

$ 6,260

Less: historical amortization

946

4,605

Pro forma adjustment

$ 620

$ 1,655

The estimated

fair value of acquired intangibles was determined as outlined below:

· The estimated value of franchises was determined using the multi-period excess earnings method.

· The estimated value of affiliate relationships was determined using the multi-period excess earnings method.

· The estimated value of developed technology was determined using the cost approach.

-21-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

· The estimated value of character rights was determined using the multi-period excess earnings method.

· The estimated value of trade names was determined using the relief from royalty method.

· The estimated value of advertiser relationships was determined using the with-and-without method.

· The estimated value of subscriber relationships was determined using the cost approach.

(4c) Adjustment includes the fair market value step down of outstanding

debt of $4.7 billion and the settlement of WBD’s existing $15.0 billion bridge facility net of $117 million in remaining deferred

issuance costs related to the bridge facility, which is described further in Note 5.

(4d) The pro forma adjustments to "Depreciation and amortization"

on the unaudited pro forma Condensed Combined Statements of Operations reflect (i) incremental amortization expense related to the intangible

assets of $620 million and $1,655 million for the three months ended March 31, 2026 and year ended December 31, 2025, respectively,

and (ii) incremental depreciation expense related to property and equipment of $13 million and $82 million for the three months ended

March 31, 2026 and year ended December 31, 2025, respectively. A 10% change in the valuation of finite-lived intangible assets and property

and equipment would result in a corresponding increase or decrease in depreciation and amortization expense of approximately $182 million

and $727 million for the three months ended March 31, 2026 and year ended December 31, 2025, respectively, based on the estimated

useful lives described herein.

(4e) The estimated tax impacts of the pro forma adjustments to adjust

WBD’s net assets to preliminary estimates of fair value in the unaudited pro forma Condensed Combined Balance Sheet and the related

adjustments in the unaudited pro forma Condensed Combined Statements of Operations are reflected using the estimated statutory tax rates

of the combined company. See Note 9.

(4f) The pro forma adjustments reflect the removal of WBD’s

historical equity balances, net of the $25.9 billion reversal of historical WBD goodwill, including common stock, additional paid-in-capital,

retained earnings, and other components of equity. This reflects the adjustments to remeasure WBD’s net assets at fair value as

of the acquisition date.

(4g) The pro forma adjustment reflects the estimated fair value step

down of WBD’s property and equipment of $0.3 billion. Estimated net incremental depreciation of property and equipment is recognized

on a straight-line basis over the respective assets’ estimated useful lives. The estimated depreciation period, estimated fair

values, and related pro forma adjustments for the incremental depreciation expense are presented in the table below.

Estimated

Straight-Line

Amortization Period

Fair Value

Three Months Ended

March 31, 2026

Year Ended

December 31, 2025

Total property and equipment

1 - 31 years

$ 6,328

$ 252

$ 1,009

Less: historical depreciation

239

927

Pro forma adjustment

$ 13

$ 82

(4h) The pro forma adjustment reflects the estimated incremental

fair value of certain unconsolidated investments held by WBD of $0.6 billion.

(4i) The pro forma adjustment reflects the estimated incremental

fair value of WBD’s programming assets of $3.5 billion. The pro forma adjustment to recognize net incremental content amortization

expense has been computed with the assumption that the programming assets will be amortized over their estimated useful lives on a straight-line

basis, the revenue forecast model or sum of the years’ digits method, as the Company continues to evaluate the pattern of the economic

benefit.

-22-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

(4j) The pro forma adjustments to "Operating expenses"

on the unaudited pro forma Condensed Combined Statements of Operations of $0.2 billion and $1.0 billion for the three months ended March

31, 2026 and year ended December 31, 2025, respectively, reflect the net incremental amortization expense related to the programming

assets. A 10% change in the valuation of programming assets would result in a corresponding increase or decrease in expense of approximately

$0.1 billion and $0.6 billion for the three months ended March 31, 2026 and year ended December 31, 2025, respectively.

For all other assets and liabilities and noncontrolling

interests the book value was deemed to approximate fair value, and therefore no fair value adjustments were recorded.

5) FINANCING RELATED ADJUSTMENTS

Debt Financing Adjustments:

The unaudited pro forma condensed combined financial

information reflects financing assumptions related to the Acquisition, including the issuance of debt, repayment and refinancing of existing

indebtedness. Specifically, these unaudited pro forma condensed combined financial statements assume (i) the issuance of the $2.5 billion

Term A-1 Loans and $2.5 billion Term A-2 Loans, (ii) the issuance of permanent financing in the form of $51.9 billion of New Permanent

Financing, (iii) the issuance of $12.7 billion of Second Lien Secured Exchange Notes in exchange for certain Existing WBD Notes pursuant

to the Exchange Offers, (assuming 100% participation in Exchange Offers), (iv) the purchase of $2.4 billion of Existing WBD Notes for

cash pursuant to the Tender Offers, (assuming 100% participation in Tender Offers), (v) the replacement of the $49.0 billion 364-day Bridge

Loan Facility, and (vi) the settlement of WBD’s existing $15.0 billion bridge facility. The pro forma adjustments assume that the

Acquisition Financing Transactions will be used to fund the Acquisition and to refinance or replace interim financing arrangements, including

the 364-day Bridge Loan Facility. The ultimate aggregate principal amount and form of such indebtedness and the terms to which such indebtedness

will be subject are subject to market conditions and final execution, and actual results may differ from those reflected herein. Other

than the assumptions relating to the New Permanent Financing, the pro forma adjustments are based on financing commitments that are in

place as of the date of this filing and do not reflect the impact of any future refinancings or changes in capital structure that may

occur prior to or following the consummation of the Acquisition.

-23-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

Balance Sheet Pro Forma Adjustments:

Debt

Issuance (5a)

Repayment

of WBD

Bridge Financing (5b)

Exchange

Offers (5c)

Tender

Offers (5d)

Pro Forma

Adjustment

New 3-year Term A-1 Loans

$ 2,492

New 5-year Term A-2 Loans

2,492

New Permanent Financing

51,395

Second Lien Secured Exchange Notes

10,348

Existing WBD Long-term Debt

(14,883 )

(10,388 )

(2,392 )

(27,663 )

Total debt pro forma adjustment

$ 39,064

(5a) The adjustments reflect the impact of the issuance of the $2.5 billion Term A-1 Loans and $2.5

billion Term A-2 Loans and $51.9 billion of New Permanent Financing, net of debt issuance costs of $0.5 billion. The New Permanent

Financing will replace or refinance the 364-day Bridge Loan Facility and proceeds of the New Permanent Financing or the 364-day

Bridge Loan Facility, as applicable, will be used to fund the Acquisition. Accordingly, $56.4 billion of cash proceeds were

reflected on the unaudited pro forma Condensed Combined Balance Sheet in connection with the issuance of debt.

(5b) The adjustment reflects a transaction accounting adjustment

related to the settlement of WBD’s existing $15.0 billion bridge facility net of $117 million in remaining deferred issuance costs

related to the bridge facility. The bridge facility will be replaced, subject to the related cooperation requirements in the WBD Merger

Agreement. Refer to Note 3.

(5c) The adjustments reflect the impact of the Exchange Offers, specifically

the $40 million of payments to bondholders, in connection with the Exchange Offers, assuming that 100% of the Existing WBD Notes eligible

to participate in the Exchange Offers will be exchanged in full in the applicable Exchange Offer. The Company expects to account for

the Exchange Offers as debt modifications in accordance with ASC 470, Debt, because all key terms of the Second Lien Secured Exchange

Notes are expected to be materially consistent with the current terms. Accordingly, the payments to the lenders are reflected as a reduction

in the carrying value. The carrying value of the Existing WBD Notes and the fair value of the Second Lien Secured Exchange Notes has

been assumed to be equal to the estimated fair value of the Existing WBD Notes assumed in the Acquisition. Estimated third-party expenses

of $27 million are included within “Restructuring, transaction-related items and other corporate matters”. Further, the

fair value of the Second Lien Secured Exchange Notes is expected to be similar to the fair value of the debt assumed in the transaction.

(5d) The adjustments reflect the impact of the Tender Offers, specifically

the purchase of (i) the DCL Issuer’s $1.2 billion aggregate principal amount of 3.950% Senior Notes due 2028 with a carrying

amount of $1.213 billion and (ii) the DGH Issuer’s $1.2 billion aggregate principal amount of 3.755% Senior Notes due 2027

with a carrying amount of $1.179 billion, assuming 100% of the Existing WBD Notes subject to the Tender Offers will be tendered in the

applicable Tender Offer. The estimated cash consideration for the Existing WBD Notes subject to the Tender Offers of $2.4 billion, was

determined based on a fixed-spread pricing formula linked to the yield on the applicable Reference Treasury Security determined as of

March 31, 2026. The estimated loss on extinguishment of debt of $36 million, is reflected in the unaudited pro forma Condensed Combined

Statement of Operations for the year ended December 31, 2025. Estimated payments to bondholders and third-party expenses of $9 million

are included within “Restructuring, transaction-related items and other corporate matters”.

(5e) The adjustment reflects the cash paid for certain commitment

fees associated with the 364-day Bridge Loan Facility and write-off of those fees due to the replacement or refinancing of the 364-day

Bridge Loan Facility with permanent financing. There can be no assurance that such permanent financing will be consummated as currently

contemplated or on favorable terms, or that such financing will be consummated at all.

-24-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

Statements

of Operations Pro Forma Adjustments:

(5f) The adjustments reflect the following increases (decreases)

to Interest expense, net:

Three Months

Ended March 31,

2026

Year Ended

December 31,

2025

Estimated interest expense on new financing (1)

Financing adjustments

$ 994

$ 3,951

Elimination of historical interest expense on WBD bridge facility (2)

Transaction accounting adjustments

(345 )

(647 )

Adjustment of

historical interest expense on debt subject to fair market value step down (3)

Transaction accounting adjustments

(161 )

Elimination of historical interest expense on WBD loans settled through the Tender Offers (4)

Transaction accounting adjustments

(26 )

(160 )

Adjustment to historical interest expense on WBD loans subject to the Exchange Offers (5)

Transaction accounting adjustments

Amortization of deferred debt issuance costs (6)

Financing adjustments

442

Total adjustments to Interest expense, net

744

3,509

Total financing adjustments

$ 1,005

$ 4,393

Total transaction accounting adjustments

$ (261 )

$ (884 )

(1) Represents the additional interest expense in connection with

the Term A-1 Loans, Term A-2 Loans, and New Permanent Financing, net of $10.0 and $60.0 million of amortization of deferred financing

charges during the three months ended March 31, 2026 and year ended December 31, 2025, respectively.

The interest rates on the Term A-1

Loans and Term A-2 Loans are calculated using SOFR adjusted for a margin and are initially estimated to be approximately 5.94%.

The unaudited pro forma condensed combined

financial statements assume an interest rate of 7.00% for the New Permanent Financing included in the Acquisition Financing Transactions,

reflecting the assumed weighted average cost of indebtedness. For purposes of the unaudited pro forma condensed combined financial statements,

the Company has assumed that the Acquisition Financing Transactions are completed as described herein, including the consummation of the

New Permanent Financing prior to the consummation of the Acquisition. In the event the New Permanent Financing does not occur prior to

the Acquisition, or does not occur at all, the maximum interest rate that would initially apply pursuant to the 364-day Bridge Loan Facility

is SOFR + 1.875%, increasing by 0.25% for each 3 months that the 364-day Bridge Loan Facility remains outstanding to a maximum of SOFR

+ 2.625%, unless or until the 364-day Bridge Loan Facility is refinanced.

-25-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

A sensitivity analysis on interest

expense with respect to the variable rate Term A-1 Loans and Term A-2 Loans and the interest expense related to the New Permanent Financing

for the three months ended March 31, 2026 and the year ended December 31, 2025 has been performed to assess the effect of a

change of 0.125% of the hypothetical interest rate. A change in the interest rate of 0.125% would result in a change in estimated interest

expense of $18 million and $72 million for the three months ended March 31, 2026 and year ended December 31, 2025, respectively.

A change in interest rate of 1% would result in a change in estimated interest expense of $144 million and $575 million for the three

months ended March 31, 2026 and year ended December 31, 2025, respectively.

(2) Represents the elimination of historical interest expense as

a result of the settlement of WBD’s $15.0 billion bridge facility.

(3) In July 2025, WBD made a significant principal payment to reduce

debt. The adjustment to interest expense for the year ended December 31, 2025 reflects a $492 million reduction in interest expense resulting

from the composition of debt outstanding as of March 31, 2026 compared with the debt outstanding within the historical period, offset

by a $331 million increase in interest expense resulting from the accretion of the fair value step down of assumed debt.

(4) Represents elimination of historical interest expense related to historical WBD debt repurchased as

a result of the Tender Offers, assuming that 100% of the Existing WBD Notes eligible to participate in the Tender Offers will be

tendered in the applicable Tender Offer.

(5) For purposes of these pro forma financial statements, the Company

has assumed 100% of Existing WBD Notes eligible to participate in the Exchange Offers will be exchanged in the applicable Exchange Offer.

This adjustment represents the incremental interest expense associated with the difference in coupon rates between the Existing WBD Notes

eligible to participate in the Exchange Offers and the Second Lien Secured Exchange Notes.

(6) Represents amortization of issuance costs associated with new

debt issued by the Company and the write-off of deferred issuance costs associated with the 364-day Bridge Loan Facility that is expected

to be replaced by the New Permanent Financing if the Bridge Commitments are not reduced by the New Permanent Financing prior to the Acquisition.

Equity Financing

Adjustments:

Concurrently with the execution of the WBD Merger

Agreement, Paramount entered into the Subscription Agreements pursuant to which the Equity Investors committed to purchase shares of Paramount

Class B Common Stock in a PIPE financing. Pursuant to the Equity Syndication the Equity Investors have assigned their subscription

rights to a group of institutional investors (each an Equity Syndication Party), comprising affiliates of the Equity Investors, The Public

Investment Fund, L'Imad 1st SPV 2 Exempt RSC LTD (an investment vehicle of L'Imad Holding, an Abu Dhabi sovereign wealth fund), QIA TMT

Holding LLC (an investment vehicle of the Qatar Investment Authority), and LionTree Investment Fund, L.P. The aggregate allocations cover

the full amount committed by the Equity Investors. At closing, the Company will issue to each Equity Syndication Party a number of newly

issued shares of nonvoting Paramount Class B Common Stock (or securities convertible into shares) equal to its allocated amount divided

by the Syndication Purchase Price for aggregate gross proceeds sufficient, together with other sources of financing, to fund the Merger

Consideration and transaction-related payments.

(5g) In connection with the Acquisition, the pro forma adjustment

reflects a net increase in cash of $46.9 billion, representing $46.95 billion of proceeds from the PIPE financing, partially offset by

$47 million of issuance costs. The transaction results in the issuance of approximately 3.9 billion shares of Paramount Class B

Common Stock at $0.001 par value, with the excess proceeds recorded as additional paid-in-capital assuming a Syndication Purchase Price

of $12.00 per share.

-26-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

6) PRESENTATION OF ADJUSTED PARAMOUNT

The Adjusted Combined Statement of Operations

of Paramount reflects the combination of (i) the historical consolidated Statement of Operations of Paramount Global (Predecessor)

for the period from January 1, 2025 through August 6, 2025 (ii) the historical results of Skydance for the same period

(iii) the historical consolidated Statement of Operations of Paramount Skydance Corporation from August 7, 2025 to December 31,

2025 (Successor) and (iv) the effects of the Skydance Transactions and NAI Transaction as if they had closed on January 1, 2025.

As a result of the pushdown of the Ultimate Parent’s basis described in Note 1, the net assets of Paramount Global were recorded

at their fair value as of the close of the Skydance Transactions and NAI Transaction. No adjustments to the August 7, 2025 to December 31,

2025 Successor period are necessary, as the impacts from the Skydance Transactions and NAI Transaction are included in Paramount’s

historical results for this period.

-27-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

The historical financial information of Skydance

included in the unaudited pro forma condensed combined financial statements reflects certain reclassifications to conform to the Company’s

presentation.

Year

Ended December 31, 2025

Historical

Predecessor

Successor

Paramount

Global (1)

Paramount

Skydance

Corp. (2)

Adjusted

Skydance

Media, LLC (3)

Skydance

Transaction

Accounting

Adjustments (1)

Adjustments

Paramount

Global Historical

Basis (1)

Paramount

Skydance

Corp.

Adjusted

Revenues

$ 16,622

$ 12,269

$ 554

$ (51

)

$ —

$ 29,394

Costs and expenses:

Operating

11,287

8,408

724

(72

)

—

20,347

Programming charges

—

Selling, general and administrative

3,526

2,594

—

6,136

Depreciation and amortization

204

590

—

674

1,469

Impairment charges

157

—

157

Restructuring,

transaction-related items, and other corporate matters

454

731

268

—

1,453

Total costs

and expenses

15,628

12,364

1,009

(72

)

674

29,603

Gain on dispositions

—

Operating income (loss)

1,029

(95 )

(455 )

(674

)

(174 )

Interest expense, net

(433 )

(302 )

(8 )

(31

)

(760 )

Loss from investments

—

(40 )

—

(40 )

Other items,

net

(92 )

(39 )

—

(51 )

Earnings (loss) before income taxes

and equity in loss of investee companies

504

(476 )

(463 )

(625

)

(1,025 )

Benefit from income taxes

—

153

319

Equity in loss

of investee companies, net of tax

(171 )

(104 )

—

(275 )

Net earnings (loss) (Parent and noncontrolling

interests)

412

(540 )

(463 )

(472

)

(981 )

Net earnings

(loss) attributable to noncontrolling interests

(447 )

(46 )

—

(490 )

Net loss attributable

to Parent

$ (35 )

$ (586 )

$ (460 )

$ 82

$ (472

)

$ (1,471 )

(1) Represents the historical results of Paramount Global and pro forma adjustments for the period from January 1,

2025 to August 6, 2025.

(2) Represents the historical results for the period from August 7, 2025 through December 31, 2025.

(3) Represents the historical results of Skydance for the period from January 1, 2025 to August 6,

2025, derived from the historical books and records of Skydance.

-28-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

(6a) The pro forma adjustment to “Revenues” reflects

a reduction of $51 million primarily for Skydance’s co-participant share of revenues for feature film and television productions

with Paramount that would have been eliminated upon consolidation if the Skydance Transactions had occurred on January 1, 2025.

(6b) “Operating” expenses has been adjusted for the impact

of intercompany transactions between Paramount and Skydance, including elimination of Paramount’s participation expenses related

to Skydance’s proportionate share of revenue for co-production titles, recorded on a gross basis by Paramount and adjustments to

the historical amortization of production costs that would have been recorded for co-production titles had Paramount and Skydance been

a combined entity during the Predecessor period.

(6c) The transaction accounting adjustment to “Interest expense,

net” reflects the impact of the repayment of outstanding borrowings under Skydance’s revolving credit facility in connection

with the closing of the Skydance Transactions. Interest expense would have decreased by $14 million if the Skydance Transactions and

NAI Transaction had occurred on January 1, 2025.

(6d) The transaction accounting adjustment to “Benefit from

income taxes” reflects an increase to the tax benefit of $47 million for the inclusion of Skydance in Paramount’s consolidated

income tax calculation for the Predecessor period.

(6e) The pro forma adjustment to “Depreciation and amortization”

reflects the impact from the changes to Paramount Global’s historical basis applied as if the Skydance Transactions and NAI Transaction

had occurred on January 1, 2025. The adjustment of $674 million principally reflects net incremental amortization expense related

to identified finite-lived intangible assets.

(6f) The pro forma adjustment of $31 million to “Interest expense,

net” reflects the amortization of the fair value adjustment to debt, partially offset by the removal of the amortization of debt

issuance costs as the unamortized debt issuance costs relating to Paramount Global’s debt were reversed in connection with recording

the debt at fair value.

(6g) The pro forma adjustment of $80 million to “Other items,

net” reflects the reversal of the amortization of net actuarial losses for Paramount Global’s pension and other postretirement

benefit plans. Paramount Global’s historical equity accounts were reversed in connection with the pushdown of the Ultimate Parent’s

basis.

(6h) The pro forma adjustment of $153 million to “Benefit from

income taxes” for the year ended December 31, 2025 reflects the tax impacts of the pro forma adjustments to Paramount Global’s

basis as if the Skydance Transactions and NAI Transaction had occurred on January 1, 2025.

(6i) The unaudited pro forma Condensed Combined Statements of Operations

do not include any pro forma adjustments to “Operating expenses” as a result of recording Paramount Global’s programming

assets at their estimated fair values. It is not practicable to estimate the impact of the fair value adjustments on historical content

amortization expense because Paramount’s content portfolio at any point in time is comprised of numerous assets with a different

mix of useful lives and amortization patterns that limit the comparability of the content portfolio as of the closing of the Skydance

Transactions to the content portfolio in prior historical periods.

-29-

PARAMOUNT SKYDANCE CORPORATION

NOTES TO UNAUDITED PRO FORMA

CONDENSED COMBINED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share

amounts)

(6j) The Paramount Adjusted basic and diluted weighted average number

of common shares outstanding of 1,099 million for the year ended December 31, 2025 is calculated based on a weighted average of

the number of days in each of the Predecessor and Successor periods, as further detailed in the table below. Since the unaudited pro

forma condensed combined Statement of Operations gives effect to the Skydance Transactions as if they occurred on January 1, 2025,

the weighted average number of common shares outstanding for the Predecessor period has been adjusted to reflect the actual common shares

outstanding of 1,096 million as of August 7, 2025 following the closing of the Skydance Transactions.

Weighted Average

Shares Outstanding

Days in

Period

Predecessor Period January 1, 2025 - August 6, 2025

1,096

218

Successor Period August 7, 2025 - December 31, 2025

1,102

147

Paramount, Adjusted January 1, 2025 - December 31, 2025

1,099

365

7) PARAMOUNT-WBD INTERCOMPANY TRANSACTIONS

Transactions between Paramount and WBD primarily

include content licensing, co-production, and advertising arrangements. The unaudited pro forma Condensed Combined Statements of Operations

include estimated adjustments to eliminate transactions between Paramount and WBD for content licensing, co-production, and advertising

arrangements, consisting of revenues and expenses recognized as part of the intercompany transactions and adjustments to the amortization

expense for the profit in capitalized content licenses. The unaudited pro forma Condensed Combined Balance Sheet includes adjustments

to eliminate “Accounts Receivable” and “Accounts Payable” between Paramount and WBD for content licensing and

advertising arrangements, the elimination of intercompany profit on content licensing arrangements recorded within “Programming

and other inventory”, and the elimination of “Accrued programming and production costs” related to programming obligations

between Paramount and WBD. “Goodwill” was also adjusted to eliminate intercompany profit on content licensing arrangements

to reflect the impact of the elimination on retained earnings that is adjusted against goodwill as part of purchase accounting.

8) OTHER TRANSACTION ACCOUNTING ADJUSTMENTS

Transaction-Related Items

The unaudited pro forma condensed combined financial

statements include adjustments for transaction-related costs expected to be incurred by Paramount from April 1, 2026 through the

closing date of the Acquisition. These costs and the corresponding adjustments to “Accrued expenses” on the unaudited pro

forma Condensed Combined Balance Sheet and “Restructuring, transaction-related items, and other corporate matters” on the

unaudited pro forma Condensed Combined Statement of Operations for the year ended December 31, 2025 are described in the table below.

Accrued Expenses

Restructuring, Transaction-