UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31,~~September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number 001-09553

Paramount Global

(Exact name of registrant as specified in its charter)

Delaware

04-2949533

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer Identification No.)

1515 Broadway

New York,

New York

10036

(Address of principal executive offices)

(Zip Code)

(212) 258-6000

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Class A Common Stock, $0.001 par value

PARAA

The Nasdaq Stock Market LLC

Class B Common Stock, $0.001 par value

PARA

The Nasdaq Stock Market LLC

5.75% Series A Mandatory Convertible Preferred Stock, $0.001 par value

PARAP

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Number of shares of common stock outstanding at ~~April~~October 28, 2022:

Class A Common Stock, par value $.001 per share— ~~40,705,676~~40,704,664

Class B Common Stock, par value $.001 per share— ~~608,394,842~~608,469,747

PARAMOUNT GLOBAL

INDEX TO FORM 10-Q


		Page
	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements.

	Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September ~~March 31,~~30, 2022 and ~~March 31~~September , 30, 2021	3

	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Nine Months Ended ~~March 31,~~September 30, 2022 and ~~March 31~~September , 30, 2021	4

	Consolidated Balance Sheets (Unaudited) at ~~March 31,~~September 30, 2022 and December 31, 2021	5

	Consolidated Statements of Cash Flows (Unaudited) for the ~~Three~~ Nine Months Ended ~~March 31,~~September 30, 2022 and ~~March 31~~September , 30, 2021	6

	Consolidated Statements of ~~Stockholders'~~Stockholders ’ Equity (Unaudited) for the Three and Nine Months Ended September ~~March 31,~~30, 2022 and September ~~March 31~~,30, 2021	7

	Notes to Consolidated Financial Statements (Unaudited)	89

Item 2.	Management’s Discussion and Analysis of Results of Operations and Financial Condition.	3034

Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	5365

Item 4.	Controls and Procedures.	5365

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings.	5466

Item 1A.	Risk Factors.	5466

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	5466

Item 6.	Exhibits.	5567

PART I – FINANCIAL INFORMATION


Item 1.			Financial Statements.

PARAMOUNT GLOBAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share amounts)


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Revenues	Revenues		$	7,328		$	7,412	Revenues	$	6,916	$	6,610	$	22,023	$	20,586
Costs and expenses:	Costs and expenses:							Costs and expenses:
Operating	Operating		4,796			4,363		Operating	4,460		4,064		14,362		12,292
Selling, general and administrative	Selling, general and administrative		1,619			1,422		Selling, general and administrative	1,670		1,526		4,999		4,407
Depreciation and amortization	Depreciation and amortization		96			99		Depreciation and amortization	92		95		282		289
Restructuring and other corporate matters	Restructuring and other corporate matters		57			—		Restructuring and other corporate matters	169		46		276		81
Total costs and expenses	Total costs and expenses		6,568			5,884		Total costs and expenses	6,391		5,731		19,919		17,069
Gain on sales			15			—
Net gain on dispositions								Net gain on dispositions	41		—		56		116
Operating income	Operating income		775			1,528		Operating income	566		879		2,160		3,633
Interest expense	Interest expense		(240)			(259)		Interest expense	(231)		(243)		(701)		(745)
Interest income	Interest income		21			13		Interest income	33		11		73		37
Net gains (losses) from investments								Net gains (losses) from investments	(9)		(5)		(9)		47
Loss on extinguishment of debt	Loss on extinguishment of debt		(73)			(128)		Loss on extinguishment of debt	—		—		(120)		(128)
Other items, net	Other items, net		(13)			1		Other items, net	(36)		(26)		(91)		(55)
Earnings from continuing operations before income taxes and equity in loss of investee companies	Earnings from continuing operations before income taxes and equity in loss of investee companies		470			1,155		Earnings from continuing operations before income taxes and equity in loss of investee companies	323		616		1,312		2,789
Provision for income taxes	Provision for income taxes		(34)			(226)		Provision for income taxes	(101)		(120)		(264)		(312)
Equity in loss of investee companies, net of tax	Equity in loss of investee companies, net of tax		(37)			(18)		Equity in loss of investee companies, net of tax	(58)		(18)		(124)		(80)
Net earnings from continuing operations	Net earnings from continuing operations		399			911		Net earnings from continuing operations	164		478		924		2,397
Net earnings from discontinued operations, net of tax	Net earnings from discontinued operations, net of tax		42			12		Net earnings from discontinued operations, net of tax	78		73		181		126
Net earnings (Paramount and noncontrolling interests)	Net earnings (Paramount and noncontrolling interests)		441			923		Net earnings (Paramount and noncontrolling interests)	242		551		1,105		2,523
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests		(8)			(12)		Net earnings attributable to noncontrolling interests	(11)		(13)		(22)		(38)
Net earnings attributable to Paramount	Net earnings attributable to Paramount		$	433		$	911	Net earnings attributable to Paramount	$	231	$	538	$	1,083	$	2,485

Amounts attributable to Paramount:	Amounts attributable to Paramount:							Amounts attributable to Paramount:
Net earnings from continuing operations	Net earnings from continuing operations		$	391		$	899	Net earnings from continuing operations	$	153	$	465	$	902	$	2,359
Net earnings from discontinued operations, net of tax	Net earnings from discontinued operations, net of tax		42			12		Net earnings from discontinued operations, net of tax	78		73		181		126
Net earnings attributable to Paramount	Net earnings attributable to Paramount		$	433		$	911	Net earnings attributable to Paramount	$	231	$	538	$	1,083	$	2,485

Basic net earnings per common share attributable to Paramount:	Basic net earnings per common share attributable to Paramount:							Basic net earnings per common share attributable to Paramount:
Net earnings from continuing operations	Net earnings from continuing operations		$	.58		$	1.44	Net earnings from continuing operations	$	.21	$	.70	$	1.32	$	3.65
Net earnings from discontinued operations	Net earnings from discontinued operations		$	.06		$	.02	Net earnings from discontinued operations	$	.12	$	.11	$	.28	$	.20
Net earnings	Net earnings		$	.65		$	1.46	Net earnings	$	.33	$	.81	$	1.60	$	3.85

Diluted net earnings per common share attributable to Paramount:	Diluted net earnings per common share attributable to Paramount:							Diluted net earnings per common share attributable to Paramount:
Net earnings from continuing operations	Net earnings from continuing operations		$	.58		$	1.42	Net earnings from continuing operations	$	.21	$	.69	$	1.32	$	3.62
Net earnings from discontinued operations	Net earnings from discontinued operations		$	.06		$	.02	Net earnings from discontinued operations	$	.12	$	.11	$	.28	$	.20
Net earnings	Net earnings		$	.64		$	1.44	Net earnings	$	.33	$	.80	$	1.60	$	3.81

Weighted average number of common shares outstanding:	Weighted average number of common shares outstanding:							Weighted average number of common shares outstanding:
Basic	Basic		649			622		Basic	649		646		649		638
Diluted	Diluted		651			631		Diluted	650		651		650		644

See notes to consolidated financial statements.

-3-

PARAMOUNT GLOBAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited; in millions)


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Net earnings (Paramount and noncontrolling interests)	Net earnings (Paramount and noncontrolling interests)		$	441		$	923	Net earnings (Paramount and noncontrolling interests)	$	242	$	551	$	1,105	$	2,523
Other comprehensive income (loss), net of tax:	Other comprehensive income (loss), net of tax:							Other comprehensive income (loss), net of tax:
Cumulative translation adjustments	Cumulative translation adjustments		(40)			(66)		Cumulative translation adjustments	(248)		(59)		(457)		(114)
Recognition of net actuarial loss and prior service costs			16			13
Decrease to net actuarial loss and prior service costs								Decrease to net actuarial loss and prior service costs	16		33		49		62
Other comprehensive loss from continuing operations, net of tax (Paramount and noncontrolling interests)	Other comprehensive loss from continuing operations, net of tax (Paramount and noncontrolling interests)		(24)			(53)		Other comprehensive loss from continuing operations, net of tax (Paramount and noncontrolling interests)	(232)		(26)		(408)		(52)
Other comprehensive income from discontinued operations			2			2
Other comprehensive loss from discontinued operations								Other comprehensive loss from discontinued operations	(8)		(5)		(14)		—
Comprehensive income	Comprehensive income		419			872		Comprehensive income	2		520		683		2,471
Less: Comprehensive income attributable to noncontrolling interests	Less: Comprehensive income attributable to noncontrolling interests		8			11		Less: Comprehensive income attributable to noncontrolling interests	10		12		17		37
Comprehensive income attributable to Paramount			$	411		$	861
Comprehensive income (loss) attributable to Paramount								Comprehensive income (loss) attributable to Paramount	$	(8)	$	508	$	666	$	2,434

See notes to consolidated financial statements.

-4-

PARAMOUNT GLOBAL AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions, except per share amounts)


		At			At				At			At
		March 31, 2022			December 31, 2021				September 30, 2022			December 31, 2021
ASSETS	ASSETS							ASSETS
Current Assets:	Current Assets:							Current Assets:
Cash and cash equivalents	Cash and cash equivalents		$	5,302		$	6,267	Cash and cash equivalents		$	3,383		$	6,267
Receivables, net	Receivables, net		7,263			6,984		Receivables, net		6,588			6,984
Programming and other inventory	Programming and other inventory		950			1,504		Programming and other inventory		1,492			1,504
Prepaid expenses and other current assets	Prepaid expenses and other current assets		1,245			1,176		Prepaid expenses and other current assets		1,263			1,176
Current assets of discontinued operations	Current assets of discontinued operations		594			745		Current assets of discontinued operations		798			745
Total current assets	Total current assets		15,354			16,676		Total current assets		13,524			16,676
Property and equipment, net	Property and equipment, net		1,706			1,736		Property and equipment, net		1,700			1,736
Programming and other inventory	Programming and other inventory		14,180			13,358		Programming and other inventory		15,449			13,358
Goodwill	Goodwill		16,561			16,584		Goodwill		16,426			16,584
Intangible assets, net	Intangible assets, net		2,760			2,772		Intangible assets, net		2,716			2,772
Operating lease assets	Operating lease assets		1,614			1,630		Operating lease assets		1,482			1,630
Deferred income tax assets, net	Deferred income tax assets, net		1,280			1,206		Deferred income tax assets, net		1,254			1,206
Other assets	Other assets		3,771			3,824		Other assets		3,929			3,824
Assets held for sale	Assets held for sale		—			19		Assets held for sale		—			19
Assets of discontinued operations	Assets of discontinued operations		817			815		Assets of discontinued operations		807			815
Total Assets	Total Assets		$	58,043		$	58,620	Total Assets		$	57,287		$	58,620
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:	Current Liabilities:							Current Liabilities:
Accounts payable	Accounts payable		$	977		$	800	Accounts payable		$	943		$	800
Accrued expenses	Accrued expenses		1,960			2,323		Accrued expenses		2,071			2,323
Participants’ share and royalties payable	Participants’ share and royalties payable		2,172			2,159		Participants’ share and royalties payable		2,618			2,159
Accrued programming and production costs	Accrued programming and production costs		1,687			1,342		Accrued programming and production costs		1,837			1,342
Deferred revenues	Deferred revenues		1,055			1,091		Deferred revenues		796			1,091
Debt	Debt		15			11		Debt		196			11
Other current liabilities	Other current liabilities		1,374			1,182		Other current liabilities		1,331			1,182
Current liabilities of discontinued operations	Current liabilities of discontinued operations		483			571		Current liabilities of discontinued operations		534			571
Total current liabilities	Total current liabilities		9,723			9,479		Total current liabilities		10,326			9,479
Long-term debt	Long-term debt		16,797			17,698		Long-term debt		15,638			17,698
Participants’ share and royalties payable	Participants’ share and royalties payable		1,310			1,244		Participants’ share and royalties payable		1,436			1,244
Pension and postretirement benefit obligations	Pension and postretirement benefit obligations		1,914			1,946		Pension and postretirement benefit obligations		1,844			1,946
Deferred income tax liabilities, net	Deferred income tax liabilities, net		1,067			1,063		Deferred income tax liabilities, net		1,037			1,063
Operating lease liabilities	Operating lease liabilities		1,579			1,598		Operating lease liabilities		1,468			1,598
Program rights obligations	Program rights obligations		429			404		Program rights obligations		375			404
Other liabilities	Other liabilities		1,753			1,898		Other liabilities		1,727			1,898
Liabilities of discontinued operations	Liabilities of discontinued operations		209			213		Liabilities of discontinued operations		203			213
Redeemable noncontrolling interest	Redeemable noncontrolling interest		105			107		Redeemable noncontrolling interest		94			107

Commitments and contingencies (Note 14)	Commitments and contingencies (Note 14)		0			0		Commitments and contingencies (Note 14)

Paramount stockholders’ equity:	Paramount stockholders’ equity:							Paramount stockholders’ equity:
5.75% Series A Mandatory Convertible Preferred Stock, par value $.001 per share; 25 shares authorized and 10 shares issued (2022 and 2021)	5.75% Series A Mandatory Convertible Preferred Stock, par value $.001 per share; 25 shares authorized and 10 shares issued (2022 and 2021)		—			—		5.75% Series A Mandatory Convertible Preferred Stock, par value $.001 per share; 25 shares authorized and 10 shares issued (2022 and 2021)		—			—
Class A Common Stock, par value $.001 per share; 55 shares authorized; 41 shares issued (2022 and 2021)	Class A Common Stock, par value $.001 per share; 55 shares authorized; 41 shares issued (2022 and 2021)		—			—		Class A Common Stock, par value $.001 per share; 55 shares authorized; 41 shares issued (2022 and 2021)		—			—
Class B Common Stock, par value $.001 per share; 5,000 shares authorized; 1,111 (2022) and 1,110 (2021) shares issued	Class B Common Stock, par value $.001 per share; 5,000 shares authorized; 1,111 (2022) and 1,110 (2021) shares issued		1			1		Class B Common Stock, par value $.001 per share; 5,000 shares authorized; 1,111 (2022) and 1,110 (2021) shares issued		1			1
Additional paid-in capital	Additional paid-in capital		32,946			32,918		Additional paid-in capital		33,034			32,918
Treasury stock, at cost; 503 (2022 and 2021) Class B shares	Treasury stock, at cost; 503 (2022 and 2021) Class B shares		(22,958)			(22,958)		Treasury stock, at cost; 503 (2022 and 2021) Class B shares		(22,958)			(22,958)
Retained earnings	Retained earnings		14,599			14,343		Retained earnings		14,889			14,343
Accumulated other comprehensive loss	Accumulated other comprehensive loss		(1,924)			(1,902)		Accumulated other comprehensive loss		(2,319)			(1,902)
Total Paramount stockholders’ equity	Total Paramount stockholders’ equity		22,664			22,402		Total Paramount stockholders’ equity		22,647			22,402
Noncontrolling interests	Noncontrolling interests		493			568		Noncontrolling interests		492			568
Total Equity	Total Equity		23,157			22,970		Total Equity		23,139			22,970
Total Liabilities and Equity	Total Liabilities and Equity		$	58,043		$	58,620	Total Liabilities and Equity		$	57,287		$	58,620

See notes to consolidated financial statements.

-5-

PARAMOUNT GLOBAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)


		Three Months Ended					Nine Months Ended
		March 31,					September 30,
		2022		2021			2022		2021
Operating Activities:	Operating Activities:					Operating Activities:
Net earnings (Paramount and noncontrolling interests)	Net earnings (Paramount and noncontrolling interests)	$	441	$	923	Net earnings (Paramount and noncontrolling interests)	$	1,105	$	2,523
Less: Net earnings from discontinued operations, net of tax	Less: Net earnings from discontinued operations, net of tax	42		12		Less: Net earnings from discontinued operations, net of tax	181		126
Net earnings from continuing operations	Net earnings from continuing operations	399		911		Net earnings from continuing operations	924		2,397
Adjustments to reconcile net earnings from continuing operations to net cash flow provided by operating activities from continuing operations:	Adjustments to reconcile net earnings from continuing operations to net cash flow provided by operating activities from continuing operations:					Adjustments to reconcile net earnings from continuing operations to net cash flow provided by operating activities from continuing operations:
Depreciation and amortization	Depreciation and amortization	96		99		Depreciation and amortization	282		289
Deferred tax (benefit) provision		(62)		95
Deferred tax benefit						Deferred tax benefit	(42)		(21)
Stock-based compensation	Stock-based compensation	36		52		Stock-based compensation	127		154
Gain on sales		(15)		—

Net gain on dispositions						Net gain on dispositions	(56)		(116)
(Gains) losses from investments						(Gains) losses from investments	9		(47)
Loss on extinguishment of debt	Loss on extinguishment of debt	73		128		Loss on extinguishment of debt	120		128
Equity in loss of investee companies, net of tax	Equity in loss of investee companies, net of tax	37		18		Equity in loss of investee companies, net of tax	124		80
Change in assets and liabilities	Change in assets and liabilities	(269)		348		Change in assets and liabilities	(1,269)		(1,336)

Net cash flow provided by operating activities from continuing operations	Net cash flow provided by operating activities from continuing operations	295		1,651		Net cash flow provided by operating activities from continuing operations	219		1,528
Net cash flow provided by operating activities from discontinued operations	Net cash flow provided by operating activities from discontinued operations	102		72		Net cash flow provided by operating activities from discontinued operations	107		124
Net cash flow provided by operating activities	Net cash flow provided by operating activities	397		1,723		Net cash flow provided by operating activities	326		1,652
Investing Activities:	Investing Activities:					Investing Activities:
Investments	Investments	(59)		(40)		Investments	(189)		(147)
Capital expenditures	Capital expenditures	(52)		(62)		Capital expenditures	(228)		(231)

Acquisitions, net of cash acquired						Acquisitions, net of cash acquired	—		(27)
Proceeds from dispositions	Proceeds from dispositions	31		213		Proceeds from dispositions	38		418
Other investing activities	Other investing activities	—		(25)		Other investing activities	(1)		(26)

Net cash flow (used for) provided by investing activities		(80)		86
Net cash flow used for investing activities from continuing operations						Net cash flow used for investing activities from continuing operations	(380)		(13)
Net cash flow used for investing activities from discontinued operations						Net cash flow used for investing activities from discontinued operations	(3)		(3)
Net cash flow used for investing activities						Net cash flow used for investing activities	(383)		(16)
Financing Activities:	Financing Activities:					Financing Activities:

Proceeds from issuance of long-term debt		1,028		25
Repayment of long-term debt		(2,009)		(2,117)
Proceeds from issuance of debt						Proceeds from issuance of debt	1,114		48
Repayment of debt						Repayment of debt	(3,123)		(2,220)

Dividends paid on preferred stock	Dividends paid on preferred stock	(14)		—		Dividends paid on preferred stock	(43)		(15)
Dividends paid on common stock	Dividends paid on common stock	(158)		(151)		Dividends paid on common stock	(471)		(458)
Proceeds from issuance of preferred stock	Proceeds from issuance of preferred stock	—		983		Proceeds from issuance of preferred stock	—		983
Proceeds from issuance of common stock	Proceeds from issuance of common stock	—		1,672		Proceeds from issuance of common stock	—		1,672

Payment of payroll taxes in lieu of issuing shares for stock-based compensation	Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(9)		(35)		Payment of payroll taxes in lieu of issuing shares for stock-based compensation	(14)		(55)
Proceeds from exercise of stock options	Proceeds from exercise of stock options	—		408		Proceeds from exercise of stock options	—		408
Payments to noncontrolling interests	Payments to noncontrolling interests	(77)		(27)		Payments to noncontrolling interests	(106)		(215)
Other financing activities	Other financing activities	(32)		(35)		Other financing activities	(38)		(47)
Net cash flow (used for) provided by financing activities	Net cash flow (used for) provided by financing activities	(1,271)		723		Net cash flow (used for) provided by financing activities	(2,681)		101
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(11)		(19)		Effect of exchange rate changes on cash and cash equivalents	(146)		(30)
Net (decrease) increase in cash, cash equivalents and restricted cash	Net (decrease) increase in cash, cash equivalents and restricted cash	(965)		2,513		Net (decrease) increase in cash, cash equivalents and restricted cash	(2,884)		1,707
Cash, cash equivalents and restricted cash at beginning of year (includes $135 (2021) of restricted cash)	Cash, cash equivalents and restricted cash at beginning of year (includes $135 (2021) of restricted cash)	6,267		3,119		Cash, cash equivalents and restricted cash at beginning of year (includes $135 (2021) of restricted cash)	6,267		3,119
Cash, cash equivalents and restricted cash at end of period (includes $133 (2021) of restricted cash)		$	5,302	$	5,632
Cash, cash equivalents and restricted cash at end of period (includes $3 (2021) of restricted cash)						Cash, cash equivalents and restricted cash at end of period (includes $3 (2021) of restricted cash)	$	3,383	$	4,826

See notes to consolidated financial statements.

-6-

PARAMOUNT GLOBAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited; in millions)


		Three Months Ended March 31, 2022																						Three Months Ended September 30, 2022
		Preferred Stock			Class A and B Common Stock			Additional Paid-In Capital			Treasury Stock		Retained Earnings			Accumulated Other Comprehensive Loss			Total Paramount Stockholders’ Equity						Noncontrolling Interests								Total Equity				Preferred Stock				Class A and B Common Stock			Additional Paid-In Capital			Treasury Stock	Retained Earnings				Accumulated Other Comprehensive Loss				Total Paramount Stockholders’ Equity			Noncontrolling Interests		Total Equity
		(Shares)			(Shares)																									(Shares)								(Shares)
December 31, 2021		10	$	—	648	$	1		$	32,918	$	(22,958)		$	14,343		$	(1,902)		$	22,402							$	568				$	22,970
June 30, 2022																						June 30, 2022	10			$	—		649		$	1				$	32,984		$	(22,958)		$	14,829			$	(2,080)			$	22,776			$	504		$	23,280
Stock-based compensation activity	Stock-based compensation activity	—	—		1	—			28		—			—			—			28								—					28		Stock-based compensation activity		—			—	—		—		50		—		—				—					50		—	50
Preferred stock dividends	Preferred stock dividends	—	—		—	—			—		—			(14)			—			(14)								—					(14)		Preferred stock dividends		—			—	—		—		—		—		(14)				—					(14)		—	(14)
Common stock dividends	Common stock dividends	—	—		—	—			—		—			(159)			—			(159)								—					(159)		Common stock dividends		—			—	—		—		—		—		(159)				—					(159)		—	(159)
Noncontrolling interests	Noncontrolling interests	—	—		—	—			—		—			(4)			—			(4)								(83)					(87)		Noncontrolling interests		—			—	—		—		—		—		2				—					2		(22)	(20)
Net earnings	Net earnings	—	—		—	—			—		—			433			—			433								8					441		Net earnings		—			—	—		—		—		—		231				—					231		11	242
Other comprehensive loss	Other comprehensive loss	—	—		—	—			—		—			—			(22)			(22)								—					(22)		Other comprehensive loss		—			—	—		—		—		—		—				(239)					(239)		(1)	(240)
March 31, 2022		10	$	—	649	$	1		$	32,946	$	(22,958)		$	14,599		$	(1,924)		$	22,664							$	493				$	23,157
September 30, 2022																						September 30, 2022	10			$	—		649		$	1				$	33,034		$	(22,958)		$	14,889			$	(2,319)			$	22,647			$	492		$	23,139


		Three Months Ended March 31, 2021																						Nine Months Ended September 30, 2022
		Preferred Stock			Class A and B Common Stock			Additional Paid-In Capital			Treasury Stock		Retained Earnings			Accumulated Other Comprehensive Loss			Total Paramount Stockholders’ Equity						Noncontrolling Interests								Total Equity				Preferred Stock				Class A and B Common Stock			Additional Paid-In Capital			Treasury Stock	Retained Earnings				Accumulated Other Comprehensive Loss				Total Paramount Stockholders’ Equity			Noncontrolling Interests		Total Equity
		(Shares)			(Shares)																									(Shares)								(Shares)
December 31, 2020		—	$	—	617	$	1		$	29,785	$	(22,958)		$	10,375		$	(1,832)		$	15,371							$	685				$	16,056
December 31, 2021																						December 31, 2021	10			$	—		648		$	1				$	32,918		$	(22,958)		$	14,343			$	(1,902)			$	22,402			$	568		$	22,970
Stock-based compensation activity	Stock-based compensation activity	—	—		9	—			426		—			—			—			426								—					426		Stock-based compensation activity		—			—	1		—		116		—		—				—					116		—	116
Stock issuances		10	—		20	—			2,655		—			—			—			2,655								—					2,655
Preferred stock dividends	Preferred stock dividends	—	—		—	—			—		—			(1)			—			(1)								—					(1)		Preferred stock dividends		—			—	—		—		—		—		(43)				—					(43)		—	(43)
Common stock dividends	Common stock dividends	—	—		—	—			—		—			(152)			—			(152)								—					(152)		Common stock dividends		—			—	—		—		—		—		(477)				—					(477)		—	(477)
Noncontrolling interests	Noncontrolling interests	—	—		—	—			—		—			11			—			11								(24)					(13)		Noncontrolling interests		—			—	—		—		—		—		(17)				—					(17)		(93)	(110)
Net earnings	Net earnings	—	—		—	—			—		—			911			—			911								12					923		Net earnings		—			—	—		—		—		—		1,083				—					1,083		22	1,105
Other comprehensive loss	Other comprehensive loss	—	—		—	—			—		—			—			(50)			(50)								(1)					(51)		Other comprehensive loss		—			—	—		—		—		—		—				(417)					(417)		(5)	(422)
March 31, 2021		10	$	—	646	$	1		$	32,866	$	(22,958)		$	11,144		$	(1,882)		$	19,171							$	672				$	19,843
September 30, 2022																						September 30, 2022	10			$	—		649		$	1				$	33,034		$	(22,958)		$	14,889			$	(2,319)			$	22,647			$	492		$	23,139

See notes to consolidated financial statements.

-7-

PARAMOUNT GLOBAL AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Continued)

(Unaudited; in millions)


	Three Months Ended September 30, 2021
	Preferred Stock			Class A and B Common Stock			Additional Paid-In Capital			Treasury Stock		Retained Earnings			Accumulated Other Comprehensive Loss			Total Paramount Stockholders’ Equity			Noncontrolling Interests			Total Equity
	(Shares)			(Shares)
June 30, 2021	10	$	—	646	$	1		$	32,901	$	(22,958)		$	12,007		$	(1,853)		$	20,098		$	558	$	20,656
Stock-based compensation activity	—	—		—	—			42		—			—			—			42			—		42
Preferred stock dividends	—	—		—	—			—		—			(14)			—			(14)			—		(14)
Common stock dividends	—	—		—	—			—		—			(159)			—			(159)			—		(159)
Noncontrolling interests	—	—		—	—			—		—			84			—			84			(60)		24
Net earnings	—	—		—	—			—		—			538			—			538			13		551
Other comprehensive loss	—	—		—	—			—		—			—			(30)			(30)			(1)		(31)
September 30, 2021	10	$	—	646	$	1		$	32,943	$	(22,958)		$	12,456		$	(1,883)		$	20,559		$	510	$	21,069


	Nine Months Ended September 30, 2021
	Preferred Stock			Class A and B Common Stock			Additional Paid-In Capital			Treasury Stock		Retained Earnings			Accumulated Other Comprehensive Loss			Total Paramount Stockholders’ Equity			Noncontrolling Interests			Total Equity
	(Shares)			(Shares)
December 31, 2020	—	$	—	617	$	1		$	29,785	$	(22,958)		$	10,375		$	(1,832)		$	15,371		$	685	$	16,056
Stock-based compensation activity	—	—		9	—			503		—			—			—			503			—		503
Stock issuances	10	—		20	—			2,655		—			—			—			2,655			—		2,655
Preferred stock dividends	—	—		—	—			—		—			(30)			—			(30)			—		(30)
Common stock dividends	—	—		—	—			—		—			(468)			—			(468)			—		(468)
Noncontrolling interests	—	—		—	—			—		—			94			—			94			(212)		(118)
Net earnings	—	—		—	—			—		—			2,485			—			2,485			38		2,523
Other comprehensive loss	—	—		—	—			—		—			—			(51)			(51)			(1)		(52)
September 30, 2021	10	$	—	646	$	1		$	32,943	$	(22,958)		$	12,456		$	(1,883)		$	20,559		$	510	$	21,069

See notes to consolidated financial statements.

-8-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Tabular dollars in millions, except per share amounts)

1) BASIS OF PRESENTATION

Description of Business—Effective February 16, 2022, we changed our name from ViacomCBS Inc. to Paramount Global, and effective at the open of market trading on February 17, 2022, our Class A Common Stock, Class B Common Stock and 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”) ceased trading under the ticker symbols “VIACA,” “VIAC” and “VIACP” and began trading under the ticker symbols “PARAA,” “PARA” and “PARAP,” respectively, on The Nasdaq Stock Market LLC. References to “Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Global and its consolidated subsidiaries, unless the context otherwise requires.

Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and allocate resources that resulted in a change to our operating segments. Our management structure has been reorganized to focus on managing our business as the combination of three parts: a traditional media business, a portfolio of global direct-to-consumer streaming services, and a film studio. Accordingly, beginning in the first quarter of 2022 and for all periods presented we are reporting results based on the following segments:

•TV Media—Our TV Media segment consists of our domestic and international broadcast networks, including the CBS Television Network, Network 10, Channel 5, Telefe, and Chilevisión; our premium and basic cable networks, including Showtime, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, Smithsonian Channel, international extensions of these brands, and CBS Sports Network; our television production operations, including CBS Studios, Paramount Television Studios and CBS Media Ventures, which primarily produces or distributes first-run syndicated programming; and our owned broadcast television stations, CBS Stations.

•Direct-to-Consumer—Our Direct-to-Consumer segment consists of our portfolio of pay, free and premium global direct-to-consumer streaming services (“DTC services”), including Paramount+, Pluto TV, Showtime Networks’ premium subscription streaming service (Showtime OTT), BET+ and Noggin.

•Filmed Entertainment—Our Filmed Entertainment segment consists of Paramount Pictures, Paramount Players, Paramount Animation, Nickelodeon Studio and Miramax.

Basis of Presentation—The accompanying unaudited consolidated financial statements have been prepared on a basis consistent with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules of the Securities and Exchange Commission ~~(“SEC”)~~(SEC). These financial statements should be read in conjunction with the more detailed financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of our financial position, results of operations and cash flows for the periods presented. Certain previously reported amounts have been reclassified to conform to the current presentation.

Discontinued Operations—On November 25, 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, which was previously reported as the Publishing segment, to Penguin Random House LLC (“Penguin Random House”), a ~~wholly owned~~wholly-owned subsidiary of Bertelsmann SE & Co. KGaA (“Bertelsmann”), for $2.175 billion in cash. As a result, Simon & Schuster has been presented as a discontinued operation in our consolidated financial statements for all periods presented (see Note 2).

~~-8-~~-9-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Use of Estimates—The preparation of our consolidated financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may vary from these estimates under different assumptions or conditions.

Net Earnings per Common Share—Basic net earnings per share (“EPS”) is based upon net earnings available to common stockholders divided by the weighted average number of common shares outstanding during the period. Net earnings available to common stockholders is calculated as net earnings from continuing operations or net earnings, as applicable, adjusted to include dividends on our Mandatory Convertible Preferred Stock.

Weighted average shares for diluted EPS reflects the effect of the assumed exercise of stock options and vesting of restricted stock units (“RSUs”) or performance stock units (“PSUs”) only in the periods in which such effect would have been dilutive. Diluted EPS also reflects the effect of the assumed conversion of preferred stock, if dilutive, which includes the issuance of common shares in the weighted average number of shares and excludes the above-mentioned preferred stock dividend adjustment to net earnings available to common stockholders.

Excluded from the calculation of diluted EPS, because their inclusion would have been antidilutive, were stock options and RSUs of 614 million and 10 million for the three and nine months ended ~~March 31,~~September 30, 2022, respectively, and stock options and RSUs of 36 million and 5 million for the three and nine months ended ~~March 31, 2021.~~September 30, 2021, respectively. Also excluded from the calculation of diluted EPS for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 was the effect of the assumed conversion of 10 million shares of Mandatory Convertible Preferred Stock into shares of common stock because the impact would have been antidilutive. The table below presents a reconciliation of weighted average shares used in the calculation of basic and diluted EPS.


		Three Months Ended		Three Months Ended				Nine Months Ended
		March 31,		September 30,				September 30,
(in millions)	(in millions)		2022		2021	(in millions)	2022	2021	2022	2021
Weighted average shares for basic EPS	Weighted average shares for basic EPS		649		622	Weighted average shares for basic EPS	649	646	649	638
Dilutive effect of shares issuable under stock-based compensation plans	Dilutive effect of shares issuable under stock-based compensation plans		2		8	Dilutive effect of shares issuable under stock-based compensation plans	1	5	1	6
Assumed conversion of Mandatory Convertible Preferred Stock			—		1

Weighted average shares for diluted EPS	Weighted average shares for diluted EPS		651		631	Weighted average shares for diluted EPS	650	651	650	644

~~-9-~~-10-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Additionally, because the impact of the assumed conversion of the Mandatory Convertible Preferred Stock would have been antidilutive, net earnings from continuing operations and net earnings used in our calculation of diluted EPS ~~calculations~~ for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 were adjusted to include the preferred stock dividends recorded during the period. The table below presents a reconciliation of net earnings from continuing operations and net earnings to the amounts used in the calculations of basic and diluted EPS.

~~Three Months Ended~~

~~March 31, 2022~~

~~Amounts attributable to Paramount:~~

~~Net earnings from continuing operations~~

~~391~~

~~Preferred stock dividends~~

~~(14)~~

Net earnings from continuing operations for basic and diluted
EPS calculation

~~377~~

~~Amounts attributable to Paramount:~~

~~Net earnings~~

~~433~~

~~Preferred stock dividends~~

~~(14)~~

~~Net earnings for basic and diluted EPS calculation~~

~~419~~


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Amounts attributable to Paramount:
Net earnings from continuing operations	$	153	$	465	$	902	$	2,359
Preferred stock dividends	(14)		(14)		(43)		(30)
Net earnings from continuing operations for basic and diluted EPS calculation	$	139	$	451	$	859	$	2,329

Amounts attributable to Paramount:
Net earnings	$	231	$	538	$	1,083	$	2,485
Preferred stock dividends	(14)		(14)		(43)		(30)
Net earnings for basic and diluted EPS calculation	$	217	$	524	$	1,040	$	2,455

Recently Adopted Accounting Pronouncements

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity

On January 1, 2022, we adopted Financial Accounting Standards Board (“FASB”) amended guidance to reduce complexity associated with the accounting for convertible instruments with characteristics of liabilities and equity. Under this guidance, embedded conversion features associated with convertible instruments no longer need to be separated from the host contracts unless they are required to be accounted for as derivatives or have been issued at a substantial premium. For contracts in an entity’s own equity, this guidance removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exceptions. The adoption of this guidance did not have a material impact on our consolidated financial statements.

2) DISPOSITIONS

~~During~~In September 2022, in connection with our funding commitments under our streaming joint venture with Comcast, SkyShowtime, we made a noncash contribution of certain assets of Paramount+ in Denmark, Finland, Norway and Sweden (the “Nordics”) to the ~~first quarter~~joint venture, which resulted in a gain of $41 million. This gain is included in “Net gain on dispositions” on the Consolidated Statements of Operations for the three and nine months ended September 30, 2022. Upon the transfer of these assets, the SkyShowtime service was launched in the Nordics, where it replaced Paramount+.

Net gain on dispositions for the nine months ended September 30, 2022 ~~we recorded~~also includes gains on sales totaling $15 million, comprised of a gain from the sale of international intangible assets and a working capital adjustment to the gain from the fourth quarter 2021 sale of CBS Studio Center.

During the nine months endedSeptember 30, 2021, we recognized a net gain on dispositions of $116 million, principally relating to the sale of a noncore trademark licensing operation.

-11-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

During the fourth quarter of 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, to Penguin Random House for $2.175 billion in cash. Simon & Schuster is presented as a discontinued operation in our consolidated financial statements for all periods presented. On November 2, 2021, the U.S. Department of Justice filed suit to block the sale. The trial was conducted in August 2022, and in October 2022, the Court issued a decision to block the consummation of the transaction. We are discussing next steps with Bertelsmann and Penguin Random House, including seeking an expedited appeal (see Note 14). The purchase agreement contains commitments on the part of the purchaser to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for a $200 million termination fee payable to us in certain circumstances in the event the transaction does not close for regulatory ~~reasons (see Note 14).~~reasons.

The following table sets forth details of net earnings from discontinued operations for the three and nine months ended September 30, 2022 and 2021, which primarily reflects the results of Simon & Schuster.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues	$	353	$	321	$	863	$	725
Costs and expenses:
Operating	198		182		483		429
Selling, general and administrative	45		38		130		114

Restructuring charges	2		1		2		1
Total costs and expenses (a)	245		221		615		544
Operating income	108		100		248		181
Other items, net	(3)		(6)		(9)		(8)
Earnings from discontinued operations	105		94		239		173
Income tax provision (b)	(27)		(21)		(58)		(47)
Net earnings from discontinued operations, net of tax	$	78	$	73	$	181	$	126

(a) Included in total costs and expenses are amounts associated with the release of indemnification obligations for leases relating to a previously disposed business of $15 million and $25 million for the three and nine months ended September 30, 2022, respectively, and $7 million and $9 million for the three and nine months ended September 30, 2021, respectively.

(b) The tax provision includes amounts relating to previously disposed businesses of $4 million and $6 million for the three and nine months ended September 30, 2022, respectively, and $2 million and $9 million for the three and nine months ended September 30, 2021, respectively.

~~-10-~~-12-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following table ~~sets forth details of net earnings from discontinued operations for the three months ended March 31, 2022 and 2021, which primarily reflects the results of Simon & Schuster.~~

Three Months Ended
March 31,
2022 2021
Revenues $ 217 $ 185
Costs and expenses:
Operating 124 120
Selling, general and administrative 38 38
Total costs and expenses (a)
162 158
Operating income 55 27
Other items, net (1) (2)
Earnings from discontinued operations 54 25
Income tax provision (b)
(12) (13)
Net earnings from discontinued operations, net of tax $ 42 $ 12

~~(a) Included in total costs and expenses for the three months ended March 31, 2022 is $5 million for the release of indemnification obligations for leases relating to a previously disposed business.~~

~~(b) The tax provision includes amounts relating to previously disposed businesses of $1 million and $7 million for the three months ended March 31, 2022 and 2021, respectively.~~

~~The following table~~ presents the major classes of assets and liabilities of our discontinued operations.


		At			At				At			At
		March 31, 2022			December 31, 2021				September 30, 2022			December 31, 2021
Receivables, net	Receivables, net		$	381		$	536	Receivables, net		$	542		$	536
Other current assets	Other current assets		213			209		Other current assets		256			209
Goodwill	Goodwill		435			435		Goodwill		434			435
Property and equipment, net	Property and equipment, net		46			46		Property and equipment, net		48			46
Operating lease assets	Operating lease assets		203			203		Operating lease assets		205			203
Other assets	Other assets		133			131		Other assets		120			131
Total Assets	Total Assets		$	1,411		$	1,560	Total Assets		$	1,605		$	1,560
Royalties payable	Royalties payable		$	126		$	155	Royalties payable		$	156		$	155
Other current liabilities	Other current liabilities		357			416		Other current liabilities		378			416
Operating lease liabilities	Operating lease liabilities		191			194		Operating lease liabilities		185			194
Other liabilities	Other liabilities		18			19		Other liabilities		18			19
Total Liabilities	Total Liabilities		$	692		$	784	Total Liabilities		$	737		$	784

~~-11-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

3) PROGRAMMING AND OTHER INVENTORY

The following table presents our programming and other inventory at ~~March 31,~~September 30, 2022 and December 31, 2021, grouped by type and predominant monetization strategy. During the first quarter of 2022, in connection with our increased strategic focus on our direct-to-consumer businesses, we reassessed our predominant monetization strategy for certain of our internally-produced content, and determined that it had shifted from individual to film group as a result of expected increased monetization of the content on our DTC services.


		At			At				At			At
		March 31, 2022			December 31, 2021				September 30, 2022			December 31, 2021
Film Group Monetization:	Film Group Monetization:							Film Group Monetization:
Acquired program rights, including prepaid sports rights	Acquired program rights, including prepaid sports rights		$	3,054		$	3,432	Acquired program rights, including prepaid sports rights		$	3,433		$	3,432
Internally-produced television and film programming:	Internally-produced television and film programming:							Internally-produced television and film programming:
Released	Released		5,132			3,808		Released		5,991			3,808
In process and other	In process and other		2,807			2,609		In process and other		3,620			2,609

Individual Monetization:	Individual Monetization:							Individual Monetization:
Acquired libraries	Acquired libraries		427			441		Acquired libraries		407			441
Film inventory:	Film inventory:							Film inventory:
Released	Released		691			606		Released		689			606
Completed, not yet released	Completed, not yet released		322			253		Completed, not yet released		132			253
In process and other	In process and other		1,212			1,303		In process and other		1,282			1,303
Internally-produced television programming:	Internally-produced television programming:							Internally-produced television programming:
Released	Released		786			1,604		Released		556			1,604
In process and other	In process and other		663			769		In process and other		787			769
Home entertainment	Home entertainment		36			37		Home entertainment		44			37
Total programming and other inventory	Total programming and other inventory		15,130			14,862		Total programming and other inventory		16,941			14,862
Less current portion	Less current portion		950			1,504		Less current portion		1,492			1,504
Total noncurrent programming and other inventory	Total noncurrent programming and other inventory		$	14,180		$	13,358	Total noncurrent programming and other inventory		$	15,449		$	13,358

-13-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following table presents amortization of television and film programming and production costs, which is included within “Operating expenses” on the Consolidated Statements of Operations.


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Programming costs, acquired programming	Programming costs, acquired programming		$	1,496		$	1,502	Programming costs, acquired programming	$	987	$	1,025	$	3,632	$	3,625

Production costs, internally-produced television and film programming:	Production costs, internally-produced television and film programming:							Production costs, internally-produced television and film programming:
Individual monetization	Individual monetization		$	491		$	760	Individual monetization	$	392	$	735	$	1,554	$	2,245
Film group monetization	Film group monetization		$	1,147		$	650	Film group monetization	$	1,202	$	847	$	3,646	$	2,148

4) RELATED PARTIES

National Amusements, Inc.

National Amusements, Inc. (“NAI”) is the controlling stockholder of the Company. At ~~March 31,~~September 30, 2022, NAI directly or indirectly owned approximately 77.4% of our voting Class A Common Stock and approximately ~~9.7%~~9.8% of our Class A Common Stock and non-voting Class B Common Stock on a combined basis. NAI is controlled by the Sumner M. Redstone National Amusements Part B General Trust (the “General Trust”), which owns 80% of the voting interest of NAI and acts by majority vote of 7seven voting trustees (subject to certain exceptions), including with respect to the NAI shares held by the General Trust. Shari E. Redstone, Chairperson, CEO and

~~-12-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

President of NAI and non-executive Chair of our Board of Directors, is one of the 7seven voting trustees for the General Trust and is one of 2two voting trustees who are beneficiaries of the General Trust. No member of our management or other member of our Board of Directors is a trustee of the General Trust.

Other Related Parties

In the ordinary course of business, we are involved in transactions with our equity-method investees, primarily for the licensing of television and film programming. The following tables present the amounts recorded in our consolidated financial statements related to these transactions.


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022 (a)		2021		2022 (a)		2021
Revenues	Revenues		$	54		$	65	Revenues	$	83	$	37	$	211	$	175
Operating expenses	Operating expenses		$	5		$	4	Operating expenses	$	11	$	5	$	17	$	13

At At
March 31, 2022 December 31, 2021
Accounts receivable $ 62 $ 50


	At			At
	September 30, 2022 (a)			December 31, 2021

Accounts receivable		$	97		$	50

(a) Revenues for the three and nine months ended September 30, 2022 and accounts receivable at September 30, 2022 include amounts related to SkyShowtime.

Through the normal course of business, we are involved in transactions with other related parties that have not been material in any of the periods presented.

-14-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

5) REVENUES

The table below presents our revenues disaggregated into categories based on the nature of such revenues. See Note 13 for revenues by segment disaggregated into these categories.


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Revenues by Type:	Revenues by Type:							Revenues by Type:
Advertising	Advertising		$	2,864		$	3,109	Advertising	$	2,337	$	2,386	$	7,746	$	8,094
Affiliate and subscription	Affiliate and subscription		2,840			2,463		Affiliate and subscription	2,863		2,650		8,591		7,701
Theatrical	Theatrical		131			1		Theatrical	231		67		1,126		202
Licensing and other	Licensing and other		1,493			1,839		Licensing and other	1,485		1,507		4,560		4,589
Total Revenues	Total Revenues		$	7,328		$	7,412	Total Revenues	$	6,916	$	6,610	$	22,023	$	20,586

Receivables

Reserves for accounts receivable reflect our expected credit losses based on historical experience as well as current and expected economic conditions. During the ~~first quarter of~~nine months ended September 30, 2022, we recorded charges totaling $46 million following Russia’s invasion of Ukraine ~~we recorded a charge~~in the first quarter of ~~$39 million,~~2022, principally to reserve against amounts due from counterparties in Russia, Belarus and Ukraine. The ~~charge was~~charges were recorded within “Restructuring and other corporate matters” on the Consolidated Statement of Operations. At ~~March 31,~~September 30, 2022 and December 31, 2021, our allowance for credit losses was ~~$113~~$111 million and $80 million, respectively.

Included in “Other assets” on the Consolidated Balance Sheets are noncurrent receivables of ~~$1.67~~$1.57 billion and $1.84 billion at ~~March 31,~~September 30, 2022 and December 31, 2021, respectively. Noncurrent receivables primarily relate to revenues recognized under long-term content licensing arrangements. Revenues from the licensing of content are recognized at the beginning of the license period in which programs are made available to the licensee for exhibition, while the related cash is generally collected over the term of the license period.

~~-13-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

Contract Liabilities

Contract liabilities are included within “Deferred revenues” and “Other liabilities” on the Consolidated Balance Sheets and totaled ~~$1.15 billion~~$866 million and $1.20 billion at ~~March 31,~~September 30, 2022 and December 31, 2021, respectively. For each of the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021, we recognized revenues of ~~$446 million~~$0.8 billion that were included in deferred revenues at December 31, ~~2021. For the three months ended March 31,~~ 2021 ~~we recognized revenues of $465 million that were included in deferred revenues at December 31, 2020.~~and 2020, respectively.

Unrecognized Revenues Under Contract

At ~~March 31,~~September 30, 2022, unrecognized revenues attributable to unsatisfied performance obligations under our long-term contracts were ~~$6.8~~approximately $9 billion, of which ~~$3.0~~$1 billion is expected to be recognized for the remainder of 2022, ~~$2.1~~$3 billion in 2023, ~~$0.9~~$2 billion in 2024, and ~~$0.8~~$3 billion thereafter. These amounts only include contracts subject to a guaranteed fixed amount or the guaranteed minimum under variable contracts, primarily consisting of television and film licensing contracts and affiliate agreements that are subject to a fixed or guaranteed minimum fee. Such amounts change on a regular basis as we renew existing agreements or enter into new agreements. Unrecognized revenues under contracts disclosed above do not include (i) contracts with an original expected term of one year or less, mainly consisting of advertising contracts, (ii) contracts for which variable consideration is determined based on the customer’s subsequent sale or usage, mainly consisting of affiliate agreements and (iii) long-term licensing agreements for multiple programs for which variable consideration is determined based on the value of the programs delivered to the customer and our right to invoice corresponds with the value delivered.

-15-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Performance Obligations Satisfied in Previous Periods

Under certain licensing arrangements, the amount and timing of our revenue recognition is determined based on our licensees’ subsequent sale to its end customers. As a result, under such arrangements we often satisfy our performance obligation of delivery of our content in advance of revenue recognition. For the three months ended ~~March 31,~~September 30, 2022 and 2021, we recognized revenues of ~~$151 million~~$0.3 billion and ~~$150 million,~~$0.1 billion, respectively, and for each of the nine months ended September 30, 2022 and 2021, we recognized revenues of $0.3 billion from arrangements for the licensing toof our content, including from distributors of transactional video-on-demand and electronic sell-through services and other licensing arrangements, ~~for licensing~~as well as from the theatrical distribution of our ~~content~~films, for which our performance obligation was satisfied in a prior period.

~~-14-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

6) DEBT

Our debt consists of the following:


		At			At				At			At
		March 31, 2022			December 31, 2021				September 30, 2022			December 31, 2021

7.875% Debentures due 2023	7.875% Debentures due 2023		$	139		$	139	7.875% Debentures due 2023		$	139		$	139
7.125% Senior Notes due 2023	7.125% Senior Notes due 2023		35			35		7.125% Senior Notes due 2023		35			35
3.875% Senior Notes due 2024	3.875% Senior Notes due 2024		—			490		3.875% Senior Notes due 2024		—			490
3.70% Senior Notes due 2024	3.70% Senior Notes due 2024		—			599		3.70% Senior Notes due 2024		—			599
3.50% Senior Notes due 2025	3.50% Senior Notes due 2025		274			597		3.50% Senior Notes due 2025		—			597
4.75% Senior Notes due 2025	4.75% Senior Notes due 2025		1,242			1,242		4.75% Senior Notes due 2025		552			1,242
4.0% Senior Notes due 2026	4.0% Senior Notes due 2026		793			793		4.0% Senior Notes due 2026		794			793
3.45% Senior Notes due 2026	3.45% Senior Notes due 2026		123			123		3.45% Senior Notes due 2026		124			123
2.90% Senior Notes due 2027	2.90% Senior Notes due 2027		693			692		2.90% Senior Notes due 2027		694			692
3.375% Senior Notes due 2028	3.375% Senior Notes due 2028		496			496		3.375% Senior Notes due 2028		496			496
3.70% Senior Notes due 2028	3.70% Senior Notes due 2028		493			493		3.70% Senior Notes due 2028		494			493
4.20% Senior Notes due 2029	4.20% Senior Notes due 2029		494			494		4.20% Senior Notes due 2029		495			494
7.875% Senior Debentures due 2030	7.875% Senior Debentures due 2030		830			830		7.875% Senior Debentures due 2030		830			830
4.95% Senior Notes due 2031	4.95% Senior Notes due 2031		1,224			1,223		4.95% Senior Notes due 2031		1,225			1,223
4.20% Senior Notes due 2032	4.20% Senior Notes due 2032		973			972		4.20% Senior Notes due 2032		974			972
5.50% Senior Debentures due 2033	5.50% Senior Debentures due 2033		427			427		5.50% Senior Debentures due 2033		427			427
4.85% Senior Debentures due 2034	4.85% Senior Debentures due 2034		87			87		4.85% Senior Debentures due 2034		87			87
6.875% Senior Debentures due 2036	6.875% Senior Debentures due 2036		1,070			1,070		6.875% Senior Debentures due 2036		1,071			1,070
6.75% Senior Debentures due 2037	6.75% Senior Debentures due 2037		75			75		6.75% Senior Debentures due 2037		75			75
5.90% Senior Notes due 2040	5.90% Senior Notes due 2040		298			298		5.90% Senior Notes due 2040		298			298
4.50% Senior Debentures due 2042	4.50% Senior Debentures due 2042		45			45		4.50% Senior Debentures due 2042		45			45
4.85% Senior Notes due 2042	4.85% Senior Notes due 2042		488			488		4.85% Senior Notes due 2042		488			488
4.375% Senior Debentures due 2043	4.375% Senior Debentures due 2043		1,125			1,123		4.375% Senior Debentures due 2043		1,128			1,123
4.875% Senior Debentures due 2043	4.875% Senior Debentures due 2043		18			18		4.875% Senior Debentures due 2043		18			18
5.85% Senior Debentures due 2043	5.85% Senior Debentures due 2043		1,233			1,233		5.85% Senior Debentures due 2043		1,233			1,233
5.25% Senior Debentures due 2044	5.25% Senior Debentures due 2044		345			345		5.25% Senior Debentures due 2044		345			345
4.90% Senior Notes due 2044	4.90% Senior Notes due 2044		540			540		4.90% Senior Notes due 2044		541			540
4.60% Senior Notes due 2045	4.60% Senior Notes due 2045		590			590		4.60% Senior Notes due 2045		590			590
4.95% Senior Notes due 2050	4.95% Senior Notes due 2050		945			944		4.95% Senior Notes due 2050		945			944
5.875% Junior Subordinated Debentures due 2057	5.875% Junior Subordinated Debentures due 2057		—			514		5.875% Junior Subordinated Debentures due 2057		—			514
6.25% Junior Subordinated Debentures due 2057	6.25% Junior Subordinated Debentures due 2057		643			643		6.25% Junior Subordinated Debentures due 2057		643			643
6.375% Junior Subordinated Debentures due 2062	6.375% Junior Subordinated Debentures due 2062		989			—		6.375% Junior Subordinated Debentures due 2062		989			—
Other bank borrowings	Other bank borrowings		65			35		Other bank borrowings		47			35
Obligations under finance leases	Obligations under finance leases		20			16		Obligations under finance leases		12			16
Total debt (a)	Total debt (a)		16,812			17,709		Total debt (a)		15,834			17,709

Less current portion of long-term debt			15			11
Less current portion								Less current portion		196			11
Total long-term debt, net of current portion	Total long-term debt, net of current portion		$	16,797		$	17,698	Total long-term debt, net of current portion		$	15,638		$	17,698

(a) At ~~March 31,~~September 30, 2022 and December 31, 2021, the senior and junior subordinated debt balances included (i) a net unamortized discount of ~~$459~~$446 million and $466 million, respectively, and (ii) unamortized deferred financing costs of ~~$97~~$91 million and $95 million, respectively. The face value of our total debt was ~~$17.37~~$16.37 billion and $18.27 billion at ~~March 31,~~September 30, 2022 and December 31, 2021, respectively.

During the three months ended March 31, 2022, we redeemed all of our notes due in 2024, which were comprised of $492 million of 3.875% senior notes and $600 million of 3.70% senior notes, and also redeemed $325 million of our 3.50% senior notes due 2025, for an aggregate redemption price of $1.48 billion. We also redeemed our $520 million of 5.875% junior subordinated debentures due February 2057 at par. These redemptions resulted in a total pre-tax loss on extinguishment of debt of $73 million.

~~-15-~~-16-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, we redeemed senior notes totaling $2.39 billion, prior to maturity, for an aggregate redemption price of $2.49 billion. Additionally, in February 2022, we redeemed our $520 million of 5.875% junior subordinated debentures due February 2057 at par. These redemptions resulted in a total pre-tax loss on extinguishment of debt of $120 million for the nine months ended September 30, 2022.

During the nine months ended September 30, 2022, we issued $1.00 billion of 6.375% junior subordinated debentures due 2062. The interest rate on these debentures will reset on March 30, 2027, and every five years thereafter to a fixed rate equal to the 5-year Treasury Rate (as defined pursuant to the terms of the debentures) plus a spread of 3.999% from March 30, 2027, 4.249% from March 30, 2032 and 4.999% from March 30, 2047. These debentures can be called by us at par plus a make whole premium any time before March 30, 2027, or at par on March 30, 2027, or at any interest payment date thereafter.

~~In April 2022, we redeemed the remaining $275 million of our 3.50% senior notes due 2025, and $695 million of our 4.75% senior notes due 2025, for an aggregate redemption price of $1.01 billion.~~

During the ~~three~~nine months ended ~~March 31,~~September 30, 2021, we redeemed senior notes totaling $1.99 billion, prior to maturity, for an aggregate redemption price of $2.11 billion resulting in a pre-tax loss on extinguishment of debt of $128 million.

Our 6.25% junior subordinated debentures due February 2057 accrue interest at the stated fixed rates until February 28, 2027, on which date the rate will switch to a floating rate. Under the terms of the debentures the floating rate is based on three-month LIBOR plus 3.899%, reset quarterly. These debentures can be called by us at par at any time after the expiration of the fixed-rate period.

Commercial Paper

At both ~~March 31,~~September 30, 2022 and December 31, 2021, we had no outstanding commercial paper borrowings.

Credit Facility

At ~~March 31,~~September 30, 2022, we had a $3.50 billion revolving credit facility with a maturity in January 2025 (the “Credit Facility”). The Credit Facility is used for general corporate purposes and to support commercial paper borrowings, if any. We may, at our option, also borrow in certain foreign currencies up to specified limits under the Credit Facility. Borrowing rates under the Credit Facility are determined at the time of each borrowing and are generally based on either the prime rate in the U.S. or an applicable benchmark rate plus a margin (based on our senior unsecured debt rating), depending on the type and tenor of the loans entered. The benchmark rate for loans denominated in euros, sterling and yen is based on EURIBOR, SONIA and TIBOR rates, respectively. The Credit Facility has one principal financial covenant that requires our Consolidated Total Leverage Ratio to be less than 4.5x (which we may elect to increase to 5.0x for up to four consecutive quarters following a qualified acquisition) at the end of each quarter. The Consolidated Total Leverage Ratio reflects the ratio of our Consolidated Indebtedness at the end of a quarter, to our Consolidated EBITDA (each as defined in the amended credit agreement) for the trailing twelve-month period. On February 14, 2022, we amended our Credit Facility to modify the definition of the Consolidated Total Leverage Ratio in the amended credit agreement to allow unrestricted cash and cash equivalents to be netted against Consolidated Indebtedness through June 2024. We met the covenant as of ~~March 31,~~September 30, 2022.

At ~~March 31,~~September 30, 2022, we had no borrowings outstanding under the Credit Facility and the remaining availability under the Credit Facility, net of outstanding letters of credit, was $3.50 billion.

~~Other Bank Borrowings~~

At March 31, 2022 and December 31, 2021, we had bank borrowings under Miramax’s $300 million credit facility, which matures in April 2023, of $65 million and $35 million, respectively, each with a weighted average interest rate of 3.50%.

~~-16-~~-17-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Other Bank Borrowings

At September 30, 2022 and December 31, 2021, we had bank borrowings under Miramax’s $300 million credit facility, which matures in April 2023, of $47 million and $35 million, respectively, with weighted average interest rates of 5.80% and 3.50%, respectively.

7) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

The carrying value of our financial instruments approximates fair value, except for notes and debentures. At ~~March 31,~~September 30, 2022 and December 31, 2021, the carrying value of our notes and debentures was ~~$16.73~~$15.78 billion and $17.66 billion, respectively, and the fair value, which is determined based on quoted prices in active markets (Level 1 in the fair value hierarchy) was ~~$18.2~~$13.7 billion and $21.5 billion, respectively.

Investments

The carrying value of our investments without a readily determinable fair value for which we have no significant influence was ~~$58~~$66 million and $59 million at ~~March 31,~~September 30, 2022 and December 31, 2021, respectively. These investments are included in “Other assets” on the Consolidated Balance Sheets.

On September 30, 2022, we sold a 37.5% interest in The CW to Nexstar Media Inc. and received a noncash distribution of $139 million, comprised of certain licensing receivables earned by The CW prior to the sale. This transaction, which reduced our ownership in The CW to 12.5%, resulted in a loss of $4 million, which principally consists of transaction costs. This loss, along with an impairment of an investment of $5 million, is recorded in “Net gains (losses) from investments” on the Consolidated Statements of Operations.

During the three months ended September 30, 2021, we recorded a net loss from investments of $5 million, reflecting changes in the fair value of a marketable security that was sold during the third quarter of 2021, and during the nine months ended September 30, 2021, we recorded a net gain from investments of $47 million, which included a gain of $37 million from the sale of an investment without a readily determinable fair value and a net gain from changes in the fair value of the marketable security discussed above. These amounts were recorded in “Net gains (losses) from investments” on the Consolidated Statements of Operations.

Foreign Exchange Contracts

We use derivative financial instruments primarily to modify our exposure to market risks from fluctuations in foreign currency exchange rates. We do not use derivative instruments unless there is an underlying exposure and therefore we do not hold or enter into derivative financial instruments for speculative trading purposes.

Foreign exchange forward contracts have principally been used to hedge projected cash flows, in currencies such as the British Pound, the Euro, the Canadian Dollar and the Australian Dollar, generally for periods up to 24 months. We designate foreign exchange forward contracts used to hedge committed and forecasted foreign currency transactions as cash flow hedges. Additionally, we enter into non-designated forward contracts to hedge non-U.S. dollar denominated cash flows.

At ~~March 31,~~September 30, 2022 and December 31, 2021, the notional amount of all foreign exchange contracts was ~~$2.37~~$2.66 billion and $1.94 billion, respectively. At ~~March 31,~~September 30, 2022, ~~$1.67~~$2.04 billion related to future production costs and ~~$695~~$621 million related to our foreign currency balances and other expected foreign currency cash flows. At December 31, 2021, $1.38 billion related to future production costs and $564 million related to our foreign currency balances and other expected foreign currency cash flows.

~~Gains recognized on derivative financial instruments were as follows:~~

Three Months Ended
March 31,
2022 2021 Financial Statement Account
Non-designated foreign exchange contracts $ 2 $ 1 Other items, net

~~The fair value of our derivative instruments was not material to the Consolidated Balance Sheets for any of the periods presented.~~

~~-17-~~-18-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Gains recognized on derivative financial instruments were as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021		Financial Statement Account
Non-designated foreign exchange contracts	$	35	$	13	$	75	$	12	Other items, net

The fair value of our derivative instruments was not material to the Consolidated Balance Sheets for any of the periods presented.

Fair Value Measurements

~~Certain of our assets and liabilities are measured at fair value on a recurring basis.~~ The table below presents our assets and liabilities that are measured at fair value on a recurring basis at ~~March 31,~~September 30, 2022 and December 31, 2021. These assets and liabilities have been categorized according to the three-level fair value hierarchy established by the FASB, which prioritizes the inputs used in measuring fair value. Level 1 is based on publicly quoted prices for the asset or liability in active markets. Level 2 is based on inputs that are observable other than quoted market prices in active markets, such as quoted prices for the asset or liability in inactive markets or quoted prices for similar assets or liabilities. Level 3 is based on unobservable inputs reflecting our own assumptions about the assumptions that market participants would use in pricing the asset or liability. All of our assets and liabilities that are measured at fair value on a recurring basis use level 2 inputs. The fair value of foreign currency hedges is determined based on the present value of future cash flows using observable inputs including foreign currency exchange rates. The fair value of deferred compensation liabilities is determined based on the fair value of the investments elected by employees.


			At			At				At			At
		March 31, 2022			December 31, 2021				September 30, 2022			December 31, 2021
Assets:	Assets:							Assets:

Foreign currency hedges	Foreign currency hedges		$	27		$	23	Foreign currency hedges		$	59		$	23
Total Assets	Total Assets		$	27		$	23	Total Assets		$	59		$	23
Liabilities:	Liabilities:							Liabilities:
Deferred compensation	Deferred compensation		$	383		$	435	Deferred compensation		$	313		$	435
Foreign currency hedges	Foreign currency hedges		27			29		Foreign currency hedges		137			29
Total Liabilities	Total Liabilities		$	410		$	464	Total Liabilities		$	450		$	464

8) VARIABLE INTEREST ENTITIES

In the normal course of business, we enter into joint ventures or make investments with business partners that support our underlying business strategy and provide us the ability to enter new markets to expand the reach of our brands, develop new programming and/or distribute our existing content. In certain instances, an entity in which we make an investment may qualify as a variable interest entity (“VIE”). In determining whether we are the primary beneficiary of a VIE, we assess whether we have the power to direct matters that most significantly impact the activities of the VIE, and have the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE.

~~The following tables present the amounts recorded in our consolidated financial statements related to our consolidated VIEs.~~

At At
March 31, 2022 December 31, 2021
Total assets $ 1,606 $ 1,578
Total liabilities $ 285 $ 184

Three Months Ended
March 31,
2022 2021
Revenues $ 103 $ 71
Operating income (loss) $ (28) $ 5

~~-18-~~-19-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The following tables present the amounts recorded in our consolidated financial statements related to our consolidated VIEs.


		At			At
	September 30, 2022			December 31, 2021
Total assets		$	1,771		$	1,578

Total liabilities		$	268		$	184


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues	$	98	$	179	$	287	$	342

Operating income (loss)	$	(35)	$	(6)	$	(90)	$	2

9) STOCKHOLDERS’ EQUITY

Stock Offerings

On March 26, 2021, we completed offerings of 20 million shares of our Class B Common Stock at a price to the public of $85 per share and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock at a price to the public and liquidation preference of $100 per share. The net proceeds from the Class B Common Stock offering and the Mandatory Convertible Preferred Stock offering were approximately $1.67 billion and $983 million, respectively, in each case after deducting underwriting discounts, commissions and estimated offering expenses.

Mandatory Convertible Preferred Stock

Unless earlier converted, each share of Mandatory Convertible Preferred Stock will automatically and mandatorily convert on the mandatory conversion date, expected to be April 1, 2024, into between 1.0013 and 1.1765 shares of our Class B Common Stock, subject to customary antidilution adjustments. The number of shares of Class B Common Stock issuable upon conversion will be determined based on the average of the volume-weighted average price per share of our Class B Common Stock over the 20 consecutive trading day period commencing on, and including, the 21st scheduled trading day immediately preceding April 1, 2024. Holders of the Mandatory Convertible Preferred Stock (“Holders”) have the right to convert all or any portion of their shares of Mandatory Convertible Preferred Stock at any time prior to April 1, 2024 at the minimum conversion rate of 1.0013 shares of our Class B Common Stock. In addition, the conversion rate applicable to such an early conversion may, in certain circumstances, be increased to compensate Holders for certain unpaid accumulated dividends. However, if a fundamental change (as defined in the Certificate of Designations governing the Mandatory Convertible Preferred Stock) occurs on or prior to April 1, 2024, then Holders will, in certain circumstances, be entitled to convert all or a portion of their shares of Mandatory Convertible Preferred Stock at an increased conversion rate for a specified period of time and receive an amount to compensate them for unpaid accumulated dividends and any remaining future scheduled dividend payments.

-20-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

The Mandatory Convertible Preferred Stock is not redeemable. However, at our option, we may purchase or otherwise acquire (including in an exchange transaction) the Mandatory Convertible Preferred Stock from time to time in the open market, by tender or exchange offer or otherwise, without the consent of, or notice to, Holders. Holders have no voting rights, with certain exceptions.

If declared, dividends on the Mandatory Convertible Preferred Stock are payable quarterly through April 1, 2024. Dividends on the Mandatory Convertible Preferred Stock accumulate from the most recent dividend payment date, and will be payable on a cumulative basis when, as and if declared by our Board of Directors, or an authorized committee thereof, at an annual rate of 5.75% of the liquidation preference of $100 per share, payable in cash or, subject to certain limitations, by delivery of shares of Class B Common Stock or through any combination of cash and shares of Class B Common Stock, at our election. If we have not declared any portion of the accumulated and unpaid dividends by April 1, 2024, the conversion rate will be adjusted so that Holders receive an additional number of shares of our Class B Common Stock, with certain limitations.

Dividends

We declared cash dividends of $.24 per share on our Class A and Class B Common Stock during each of the ~~three months~~three-month periods ended ~~March 31,~~September 30, 2022 and 2021, resulting in total dividends of $159 million for each of the respective periods. We declared cash dividends of $.72 per share on our Class A and ~~$152~~Class B Common Stock during each of the nine-month periods ended September 30, 2022 and 2021, resulting in total dividends of $477 million and $468 million, respectively.

During each of the ~~first quarter~~three quarters of 2022, we declared a quarterly cash dividend of $1.4375 per share on our Mandatory Convertible Preferred Stock, resulting in total dividends of $14.4 ~~million. During~~million for the three months ended September 30, 2022, and $43.1 million for the nine months ended September 30, 2022. During the second and third quarters of 2021, we declared quarterly cash dividends on our Mandatory Convertible Preferred Stock of $1.5493 per share and $1.4375 per share, respectively. The dividend period for the dividend declared during the second quarter was from March 26, 2021 through July 1, 2021. Accordingly, we recorded dividends on the Mandatory Convertible Preferred Stock of $14.4 million and $29.9 million during the three and nine months ended September 30, 2021, respectively.

~~-19-~~-21-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

~~March 31, 2021, we recorded dividends of $1 million on our Mandatory Convertible Preferred Stock, representing dividends accumulated from the issuance on March 26 through March 31, 2021.~~

Accumulated Other Comprehensive Income (Loss)

The following tables summarize the changes in the components of accumulated other comprehensive loss.


		Continuing Operations							Discontinued Operations							Continuing Operations							Discontinued Operations
		Cumulative Translation Adjustments			Net Actuarial Loss and Prior Service Cost				Other Comprehensive Income (Loss) (a)			Accumulated Other Comprehensive Loss				Cumulative Translation Adjustments			Net Actuarial Loss and Prior Service Cost				Other Comprehensive Income (Loss) (a)			Accumulated Other Comprehensive Loss
At December 31, 2021	At December 31, 2021		$	(445)		$	(1,434)			$	(23)		$	(1,902)	At December 31, 2021		$	(445)		$	(1,434)			$	(23)		$	(1,902)
Other comprehensive income (loss) before reclassifications			(40)			—				2			(38)
Other comprehensive loss before reclassifications															Other comprehensive loss before reclassifications		(452)			—				(14)			(466)
Reclassifications to net earnings	Reclassifications to net earnings		—			16		(b)		—			16		Reclassifications to net earnings		—			49		(b)		—			49
Other comprehensive income (loss)	Other comprehensive income (loss)		(40)			16				2			(22)		Other comprehensive income (loss)		(452)			49				(14)			(417)
At March 31, 2022			$	(485)		$	(1,418)			$	(21)		$	(1,924)
At September 30, 2022															At September 30, 2022		$	(897)		$	(1,385)			$	(37)		$	(2,319)


		Continuing Operations							Discontinued Operations							Continuing Operations							Discontinued Operations
		Cumulative Translation Adjustments			Net Actuarial Loss and Prior Service Cost				Other Comprehensive Income (Loss) (a)			Accumulated Other Comprehensive Loss				Cumulative Translation Adjustments			Net Actuarial Loss and Prior Service Cost				Other Comprehensive Income (Loss) (a)			Accumulated Other Comprehensive Loss
At December 31, 2020	At December 31, 2020		$	(303)		$	(1,509)			$	(20)		$	(1,832)	At December 31, 2020		$	(303)		$	(1,509)			$	(20)		$	(1,832)
Other comprehensive income (loss) before reclassifications	Other comprehensive income (loss) before reclassifications		(65)			—				2			(63)		Other comprehensive income (loss) before reclassifications		(113)			11				—			(102)
Reclassifications to net earnings	Reclassifications to net earnings		—			13		(b)		—			13		Reclassifications to net earnings		—			51		(b)		—			51
Other comprehensive income (loss)	Other comprehensive income (loss)		(65)			13				2			(50)		Other comprehensive income (loss)		(113)			62				—			(51)
At March 31, 2021			$	(368)		$	(1,496)			$	(18)		$	(1,882)
At September 30, 2021															At September 30, 2021		$	(416)		$	(1,447)			$	(20)		$	(1,883)

(a) Reflects cumulative translation adjustments.

(b) Reflects amortization of net actuarial losses, which for 2021 includes the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans (see Note 11).

The net actuarial loss and prior service cost related to pension and other postretirement benefit plans included in other comprehensive income (loss) is net of a tax benefit of $5$16 million and $20 million for ~~each of~~ the ~~three-month periods~~nine months ended ~~March 31,~~September 30, 2022 and ~~2021.~~2021, respectively.

10) INCOME TAXES

The provision for income taxes represents federal, state and local, and foreign taxes on earnings from continuing operations before income taxes and equity in loss of investee companies. For the three and nine months ended ~~March 31,~~September 30, 2022, we recorded a provision for income taxes of ~~$34~~$101 million and $264 million, reflecting an effective income tax ~~rate~~rates of ~~7.2%.~~31.3% and 20.1%, respectively. Included in the provision for income taxes for the third quarter of 2022 is a net discrete tax provision of $9 million, which primarily reflects discrete tax provisions realized in connection with the filing of our tax returns in international jurisdictions and from the transfer of subsidiaries in connection with a reorganization of our international operations. These items, together with a net tax benefit of $29 million on other items identified as affecting the comparability of our results during the period (which include charges for restructuring and other corporate matters, and a gain on a disposition) increased our effective income tax rate by 5.0 percentage points. The tax provision for the nine months ended September 30, 2022 included a net discrete tax benefit of ~~$78~~$72 million primarily resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations. This item, together with a net tax benefit of ~~$25~~$77 million on other items identified as affecting the comparability of our results during the nine-month period ~~which~~(which include ~~a loss on extinguishment of debt,~~charges for restructuring and other corporate matters, ~~and gains~~a loss on ~~sales, decreased our effective income tax rate by 16.2 percentage points.~~

~~-20-~~-22-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

extinguishment of debt, and gains on dispositions) decreased our effective income tax rate by 4.8 percentage points.

For the three and nine months ended September 30, 2021, we recorded a provision for income taxes of $120 million and $312 million, reflecting effective income tax rates of 19.5% and 11.2%, respectively. Included in the provision for income taxes for the nine months ended September 30, 2021 are discrete tax benefits of $290 million primarily consisting of a benefit of $260 million to remeasure our UK net deferred income tax asset as a result of the enactment during the second quarter of 2021 of an increase in the UK corporate income tax rate from 19% to 25% beginning April 1, 2023, as well as a net tax benefit in connection with the ~~vesting or exercise~~settlement of ~~stock-based compensation awards. This item,~~income tax audits. For the nine months ended September 30, 2021, these discrete tax benefits, together with a net tax benefit of ~~$25~~$14 million on other items identified as affecting the comparability of our results during the period ~~which~~(which include a loss on ~~the~~ extinguishment of debt, restructuring and ~~a gain~~pension settlement charges and net gains from ~~an investment,~~dispositions and investments) reduced our effective income tax rate by ~~1.9~~10.5 percentage points.

The Company and its subsidiaries file income tax returns with the Internal Revenue Service (“IRS”) and various state and local and foreign jurisdictions. For periods prior to the merger of Viacom Inc. (“Viacom”) with and into CBS Corporation (“CBS”) (the “Merger”), Viacom and CBS filed separate tax returns. For CBS, we are currently under examination by the IRS for the 2017 and 2018 tax years. For Viacom, we are currently under examination by the IRS for the 2016 through 2019 tax years. For tax returns filed as a merged company, we are currently under examination by the IRS for the 2019 tax year. Various tax years are also currently under examination by state and local and foreign tax authorities. With respect to open tax years in all jurisdictions, we currently do not believe that it is reasonably possible that the reserve for uncertain tax positions will significantly change within the next 12 months; however, it is difficult to predict the final outcome or timing of resolution of any particular tax matter and events could cause our current expectation to change in the future.

-23-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

11) PENSION AND OTHER POSTRETIREMENT BENEFITS

The following table presents the components of net periodic cost for our pension and postretirement benefit plans. The service cost component of net periodic cost is presented on the Consolidated Statements of Operations within operating income and all other components of net periodic cost are included within “Other items, net”.


		Pension Benefits				Postretirement Benefits					Pension Benefits				Postretirement Benefits
Three Months Ended March 31,		2022		2021		2022		2021
Three Months Ended September 30,										Three Months Ended September 30,	2022		2021		2022		2021
Components of net periodic cost (a):	Components of net periodic cost (a):									Components of net periodic cost (a):
Service cost										Service cost	$	—	$	—	$	1	$	1
Interest cost	Interest cost	$	38	$	36	$	2	$	2	Interest cost	38		37		2		2
Expected return on plan assets	Expected return on plan assets	(43)		(47)		—		—		Expected return on plan assets	(43)		(47)		—		—
Amortization of actuarial loss (gain) (b)	Amortization of actuarial loss (gain) (b)	24		24		(3)		(3)		Amortization of actuarial loss (gain) (b)	24		23		(4)		(4)

Settlements (c)										Settlements (c)	—		10		—		—
Net periodic cost	Net periodic cost	$	19	$	13	$	(1)	$	(1)	Net periodic cost	$	19	$	23	$	(1)	$	(1)


	Pension Benefits				Postretirement Benefits
Nine Months Ended September 30,	2022		2021		2022		2021
Components of net periodic cost (a):
Service cost	$	—	$	—	$	1	$	1
Interest cost	113		109		6		6
Expected return on plan assets	(129)		(141)		—		—
Amortization of actuarial loss (gain) (b)	73		70		(11)		(11)
Settlements (c)	—		10		—		—
Net periodic cost	$	57	$	48	$	(4)	$	(4)

(a) Amounts reflect our domestic plans only.

(b) Reflects amounts reclassified from accumulated other comprehensive loss to net earnings.

(c) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.

12) REDEEMABLE NONCONTROLLING INTERESTS

~~We are~~On October 31, 2022 we acquired the remaining 40% interest in Nickelodeon UK Limited (“Nick UK”) for £88 million, bringing our ownership to 100%. Prior to this transaction, we were subject to a redeemable put option ~~payable in a foreign currency,~~ with respect to ~~an international subsidiary. The put option expires in December 2022 and~~Nick UK, which is classified as “Redeemable noncontrolling interest” on the Consolidated Balance Sheets. The activity reflected within redeemable noncontrolling interest for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021 is presented below.


		Three Months Ended					Nine Months Ended
		March 31,					September 30,
		2022		2021			2022		2021
Beginning balance	Beginning balance	$	107	$	197	Beginning balance	$	107	$	197
Net earnings	Net earnings	2		2		Net earnings	2		8
Distributions	Distributions	(3)		(1)		Distributions	(5)		(4)
Translation adjustment	Translation adjustment	(5)		2		Translation adjustment	(27)		(4)
Redemption value adjustment	Redemption value adjustment	4		(11)		Redemption value adjustment	17		(94)
Ending balance	Ending balance	$	105	$	189	Ending balance	$	94	$	103

~~-21-~~-24-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

13) SEGMENT INFORMATION

The tables below set forth our financial information by reportable segment. Our operating segments, which are the same as our reportable segments, have been determined in accordance with our internal management structure, which is organized based upon products and services. Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and allocate resources that resulted in the changes described below. Prior period results have been recast to conform to these presentation changes.

Management Structure Change

Our management structure has been reorganized to focus on managing our business as the combination of three parts: a traditional media business, a portfolio of global ~~direct-to-consumer streaming~~DTC services, and a film studio. As a result, we realigned our operating segments and accordingly, beginning in the first quarter of 2022, and for all periods presented we are reporting results based on the segments in the tables below (see Note 1 for a description of each operating segment). In connection with the management structure change, we also reassessed our reporting units and reallocated goodwill from the reporting units that existed prior to the change, to the new reporting units, using a relative fair value approach. We performed goodwill impairment tests as of January 1, 2022 on both the reporting units in place prior to the change and the new reporting units and concluded that the estimated fair values of each of the reporting units exceeded their respective carrying values and therefore no impairment charge was necessary.

Intercompany License Fees

Concurrent with the change to our operating segments, we changed the way we record intersegment content licensing. Under our previous segment structure, management evaluated the results of our segments including intersegment content licensing at market value as if the sales were to third parties. Therefore, the licensor segment recorded intercompany license fee revenues and profits and the licensee segment recorded production costs in the amount of the license fee charged by the licensor, which generally reflected the cost to the Company plus a margin. The intercompany revenues and the margin embedded in the cost to the licensee were eliminated in consolidation.

Under our new segment structure, management evaluates the results of the segments using an allocation of the total cost of content from the licensor segment to each licensee segment utilizing the content. As a result, content costs are allocated across segments based on the relative value of the distribution windows within each segment. The allocation is recorded by the licensor segment as a reduction of content cost and no intersegment licensing revenues or profits are recorded.

~~-22-~~-25-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Revenues:	Revenues:							Revenues:
Advertising	Advertising		$	2,521		$	2,888	Advertising	$	1,973	$	2,039	$	6,668	$	7,230
Affiliate and subscription	Affiliate and subscription		2,098			2,083		Affiliate and subscription	2,000		2,108		6,156		6,303
Licensing and other	Licensing and other		1,026			1,022		Licensing and other	975		1,073		3,025		2,899
TV Media	TV Media		5,645			5,993		TV Media	4,948		5,220		15,849		16,432
Advertising	Advertising		347			218		Advertising	363		348		1,073		857
Subscription	Subscription		742			380		Subscription	863		542		2,435		1,398
Direct-to-Consumer	Direct-to-Consumer		1,089			598		Direct-to-Consumer	1,226		890		3,508		2,255
Advertising	Advertising		2			6		Advertising	3		2		17		14
Theatrical	Theatrical		131			1		Theatrical	231		67		1,126		202
Licensing and other	Licensing and other		491			853		Licensing and other	549		461		1,627		1,777
Filmed Entertainment	Filmed Entertainment		624			860		Filmed Entertainment	783		530		2,770		1,993
Eliminations	Eliminations		(30)			(39)		Eliminations	(41)		(30)		(104)		(94)
Total Revenues	Total Revenues		$	7,328		$	7,412	Total Revenues	$	6,916	$	6,610	$	22,023	$	20,586

Revenues generated between segments are principally from intersegment arrangements for the distribution of content, rental of studio space, and advertising, as well as licensing revenues earned from third parties who license our content to our internal platforms either through a sub-license or co-production arrangement. These transactions are recorded at market value as if the sales were to third parties and are eliminated in consolidation.


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Intercompany Revenues:	Intercompany Revenues:							Intercompany Revenues:
TV Media	TV Media		$	11		$	14	TV Media	$	9	$	19	$	33	$	38
Direct-to-Consumer								Direct-to-Consumer	—		1		—		2
Filmed Entertainment	Filmed Entertainment		19			25		Filmed Entertainment	32		10		71		54
Total Intercompany Revenues	Total Intercompany Revenues		$	30		$	39	Total Intercompany Revenues	$	41	$	30	$	104	$	94

~~-23-~~-26-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Adjusted OIBDA:	Adjusted OIBDA:							Adjusted OIBDA:
TV Media	TV Media		$	1,544		$	1,765	TV Media	$	1,231	$	1,385	$	4,155	$	4,654
Direct-to-Consumer	Direct-to-Consumer		(456)			(149)		Direct-to-Consumer	(343)		(198)		(1,244)		(490)
Filmed Entertainment	Filmed Entertainment		(37)			179		Filmed Entertainment	41		(24)		185		207
Corporate/Eliminations	Corporate/Eliminations		(104)			(116)		Corporate/Eliminations	(104)		(111)		(320)		(351)
Stock-based compensation(a)	Stock-based compensation(a)		(34)			(52)		Stock-based compensation(a)	(39)		(32)		(114)		(133)
Depreciation and amortization	Depreciation and amortization		(96)			(99)		Depreciation and amortization	(92)		(95)		(282)		(289)
Restructuring and other corporate matters	Restructuring and other corporate matters		(57)			—		Restructuring and other corporate matters	(169)		(46)		(276)		(81)

Gain on sales			15			—
Net gain on dispositions								Net gain on dispositions	41		—		56		116
Operating income	Operating income		775			1,528		Operating income	566		879		2,160		3,633
Interest expense	Interest expense		(240)			(259)		Interest expense	(231)		(243)		(701)		(745)
Interest income	Interest income		21			13		Interest income	33		11		73		37
Net gains (losses) from investments								Net gains (losses) from investments	(9)		(5)		(9)		47
Loss on extinguishment of debt	Loss on extinguishment of debt		(73)			(128)		Loss on extinguishment of debt	—		—		(120)		(128)
Other items, net	Other items, net		(13)			1		Other items, net	(36)		(26)		(91)		(55)
Earnings from continuing operations before income taxes and equity in loss of investee companies	Earnings from continuing operations before income taxes and equity in loss of investee companies		470			1,155		Earnings from continuing operations before income taxes and equity in loss of investee companies	323		616		1,312		2,789
Provision for income taxes	Provision for income taxes		(34)			(226)		Provision for income taxes	(101)		(120)		(264)		(312)
Equity in loss of investee companies, net of tax	Equity in loss of investee companies, net of tax		(37)			(18)		Equity in loss of investee companies, net of tax	(58)		(18)		(124)		(80)
Net earnings from continuing operations	Net earnings from continuing operations		399			911		Net earnings from continuing operations	164		478		924		2,397
Net earnings from discontinued operations, net of tax	Net earnings from discontinued operations, net of tax		42			12		Net earnings from discontinued operations, net of tax	78		73		181		126
Net earnings (Paramount and noncontrolling interests)	Net earnings (Paramount and noncontrolling interests)		441			923		Net earnings (Paramount and noncontrolling interests)	242		551		1,105		2,523
Net earnings attributable to noncontrolling interests	Net earnings attributable to noncontrolling interests		(8)			(12)		Net earnings attributable to noncontrolling interests	(11)		(13)		(22)		(38)
Net earnings attributable to Paramount	Net earnings attributable to Paramount		$	433		$	911	Net earnings attributable to Paramount	$	231	$	538	$	1,083	$	2,485

At At
March 31, 2022 December 31, 2021
Assets:
TV Media $ 38,471 $ 38,491
Direct-to-Consumer 6,008 5,545
Filmed Entertainment
7,586 7,472
Corporate/Eliminations 4,567 5,552
Discontinued Operations 1,411 1,560
Total Assets $ 58,043 $ 58,620
(a) Included in restructuring and other corporate matters is stock-based compensation expense of $11 million and $13 million for the three and nine months ended September 30, 2022, respectively, and $21 million for each of the three- and nine-month periods of 2021.

14) COMMITMENTS AND CONTINGENCIES

Guarantees

Letters of Credit and Surety Bonds

We have indemnification obligations with respect to letters of credit and surety bonds primarily used as security against non-performance in the normal course of business. At ~~March 31,~~September 30, 2022, the outstanding letters of credit and surety bonds approximated ~~$177~~$174 million and were not recorded on the Consolidated Balance Sheet.

~~-24-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

CBS Television City

In connection with the sale of the CBS Television City property and sound stage operation (“CBS Television City”) in 2019, we guaranteed a specified level of cash flows to be generated by the business during the first five years following the completion of the sale. Included in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheet at ~~March 31,~~September 30, 2022 is a liability totaling ~~$50~~$51 million, reflecting the present value of the estimated amount remaining under the guarantee obligation.

-27-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Lease Guarantees

We have certain indemnification obligations with respect to leases primarily associated with the previously discontinued operations of Famous Players Inc. These lease commitments totaled ~~$46~~$25 million at ~~March 31,~~September 30, 2022 and are presented within “Other liabilities” on the Consolidated Balance Sheet. The amount of lease commitments varies over time depending on the expiration or termination of individual underlying leases, or the related indemnification obligation, and foreign exchange rates, among other things. We may also have exposure for certain other expenses related to the leases, such as property taxes and common area maintenance. We believe our accrual is sufficient to meet any future obligations based on our consideration of available financial information, the lessees’ historical performance in meeting their lease obligations and the underlying economic factors impacting the lessees’ business models.

Other

In the course of our business, we both provide and receive indemnities which are intended to allocate certain risks associated with business transactions. Similarly, we may remain contingently liable for various obligations of a business that has been divested in the event that a third party does not live up to its obligations under an indemnification obligation. We record a liability for our indemnification obligations and other contingent liabilities when probable and reasonably estimable.

Legal Matters

General

On an ongoing basis, we vigorously defend ourselves in numerous lawsuits and proceedings and respond to various investigations and inquiries from federal, state, local and international authorities (collectively, “litigation”). Litigation may be brought against us without merit, is inherently uncertain and always difficult to predict. However, based on our understanding and evaluation of the relevant facts and circumstances, we believe that the following matters are not likely, in the aggregate, to result in a material adverse effect on our business, financial condition and results of operations.

Stockholder Matters

Litigation Relating to the Merger

~~-25-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

connection with the negotiation and approval of the Agreement and Plan of Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”). The Complaint also alleges waste and unjust enrichment in connection with Mr. Ianniello’s compensation. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On June 5, 2020, the defendants filed motions to dismiss. On January 27, 2021, the Court dismissed 1one disclosure claim, while allowing all other claims against the defendants to proceed. Discovery on the

-28-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Beginning on November 25, 2019, four purported Viacom stockholders filed separate putative class action lawsuits in the Court of Chancery of the State of Delaware. On January 23, 2020, the Court consolidated the 4four lawsuits. On February 6, 2020, the Court appointed California Public Employees’ Retirement System (“CalPERS”) as lead plaintiff for the consolidated action. On February 28, 2020, CalPERS, together with Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago and Louis M. Wilen, filed a First Amended Verified Class Action Complaint (as used in this paragraph, the “Complaint”) against NAI, NAI Entertainment Holdings LLC, Shari E. Redstone, the members of the special transaction committee of the Viacom Board of Directors (comprised of Thomas J. May, Judith A. McHale, Ronald L. Nelson and Nicole Seligman) and our President and Chief Executive Officer and director, Robert M. Bakish. The Complaint alleges breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On May 22, 2020, the defendants filed motions to dismiss. On December 29, 2020, the Court dismissed the claims against Mr. Bakish, while allowing the claims against the remaining defendants to proceed. Discovery on the surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Investigation-Related Matters

As announced on August 1, 2018, the CBS Board of Directors retained 2two law firms to conduct a full investigation of the allegations in press reports about CBS’ former Chairman of the Board, President and Chief Executive Officer, Leslie Moonves, CBS News and cultural issues at CBS. On December 17, 2018, the CBS Board of Directors announced the completion of its investigation, certain findings of the investigation and the CBS Board of Directors’ determination with respect to the termination of Mr. Moonves’ employment. We have received subpoenas or requests for information from the New York County District Attorney’s Office, the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States Securities and Exchange Commission regarding the subject matter of this investigation and related matters, including with respect to CBS’ related public disclosures. We may continue to receive additional related regulatory and investigative inquiries from these and other entities in the future. We are cooperating with these inquiries.

~~-26-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

action, which the Court granted in part and denied in part on January 15, 2020. With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed. We ~~have~~ reached an agreement with the plaintiffs to settle the ~~lawsuit.~~lawsuit for $14.75 million, which will be paid by the Company’s insurers. The settlement, which includes no admission of liability or wrongdoing by the Company, was granted preliminary approval by the Court on May 13, 2022 and is subject to ~~court~~final approval. ~~All amounts payable by the Company under the settlement will be paid by the Company’s insurers.~~

~~Litigation Related to Television Station Owners~~

~~On September 9, 2019,~~We also received subpoenas or requests for information from the ~~Company was added as a defendant in a multi-district putative class action lawsuit filed in~~New York County District Attorney’s Office, the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States ~~District Court for~~Securities and Exchange Commission regarding the Northern District of Illinois. The lawsuit was filed by parties that claim to have purchased broadcast television spot advertising beginning on or about January 1, 2014 on television stations owned by one or moresubject matter of the ~~defendant television station owners~~CBS Board of Directors’ investigation and alleges the sharing of allegedly competitively sensitive information among such television stations in alleged violation of the Sherman Antitrust Act. The action, which names the Company among 14 total defendants, seeks monetary damages, attorneys’ fees, costs and interest as well as injunctions against the allegedly unlawful conduct. On October 8, 2019, the Company and other defendants filed a motionrelated matters, including with respect to ~~dismiss the matter, which was denied by the court on November 6, 2020.~~CBS’ related public disclosures. We have reached an

-29-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

agreement in principle to resolve the matter with the ~~plaintiffs~~Investor Protection Bureau of the New York State Attorney General’s Office. After credits for the settlement amount to ~~settle~~be paid in the ~~lawsuit.~~consolidated federal securities class action discussed above, and certain financial commitments to human resources-related programs made by CBS in connection with an earlier resolution with the Civil Rights Bureau of the New York State Attorney General’s Office, the Company has agreed to make a payment of $7.25 million, which by agreement with the Investor Protection Bureau will be distributed in connection with the federal securities class action settlement discussed above, subject to the court’s approval of the class action settlement. The ~~settlement, which will include~~resolution includes no admission of liability or wrongdoing by the ~~Company, will be subject~~Company. We may continue to ~~court approval.~~receive additional related regulatory and investigative inquiries from these and other entities in the future.

Litigation Related to Stock Offerings

On August 13, 2021, Camelot Event Driven Fund filed a putative securities class action lawsuit in New York Supreme Court, County of New York, and on November 5, 2021, an amended complaint was filed that, among other changes, added an additional named plaintiff (the “Complaint”). The Complaint is purportedly on behalf of investors who purchased shares of the Company’s Class B Common Stock and 5.75% Series A Mandatory Convertible Preferred Stock pursuant to public securities offerings completed in March 2021, and was filed against the Company, certain senior executives, members of our Board of Directors, and the underwriters involved in the offerings. The Complaint asserts violations of federal securities law and alleges that the offering documents contained material misstatements and omissions, including through an alleged failure to adequately disclose certain total return swap transactions involving Archegos Capital Management referenced to our securities and related alleged risks to the Company’s stock price. On December 22, 2021, the plaintiffs filed a stipulation seeking the voluntary dismissal without prejudice of the outside director defendants from the lawsuit, which the Court subsequently ordered. On the same date, the defendants filed motions to dismiss the lawsuit, which are pending. The complaint seeks unspecified compensatory damages, as well as other relief. We believe that the claims are without merit and intend to defend against them vigorously.

Litigation Related to Television Station Owners

~~-27-~~

~~PARAMOUNT GLOBAL AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

Litigation Related to the Proposed Sale of Simon & Schuster

On November 2, 2021, the U.S. Department of Justice (the “DOJ”) filed suit in the United States District Court for the District of Columbia to block our sale of the Simon & Schuster business to Penguin Random House (the “Transaction”) pursuant to a Share Purchase Agreement (“Purchase Agreement”), dated November 24, 2020, between the Company, certain of its subsidiaries, Penguin Random House and Bertelsmann SE & Co. KGaA. The DOJ ~~asserts~~asserted that the sale of Simon & Schuster would reduce competition for the acquisition of titles. The trial was conducted in August 2022, and in October 2022, the Court issued a decision to block the consummation of the Transaction. We are discussing next steps with Bertelsmann and Penguin Random House, including seeking an

-30-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

expedited appeal. The Purchase Agreement contains customary representations and warranties and covenants, including commitments on the part of Penguin Random House to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for a $200 million termination fee payable to the Company in certain circumstances in the event the Transaction does not close for regulatory reasons. ~~We and the other defendants believe the DOJ’s claims are without merit, and we intend to defend against them vigorously.~~

Claims Related to Former ~~Businesses:~~ Businesses

Asbestos

We are a defendant in lawsuits claiming various personal injuries related to asbestos and other materials, which allegedly occurred as a result of exposure caused by various products manufactured by Westinghouse, a predecessor, generally prior to the early 1970s. Westinghouse was neither a producer nor a manufacturer of asbestos. We are typically named as one of a large number of defendants in both state and federal cases. In the majority of asbestos lawsuits, the plaintiffs have not identified which of our products is the basis of a claim. Claims against us in which a product has been identified most commonly relate to allegations of exposure to asbestos-containing insulating material used in conjunction with turbines and electrical equipment.

Claims are frequently filed and/or settled in groups, which may make the amount and timing of settlements, and the number of pending claims, subject to significant fluctuation from period to period. We do not report as pending those claims on inactive, stayed, deferred or similar dockets that some jurisdictions have established for claimants who allege minimal or no impairment. As of ~~March 31,~~September 30, 2022, we had pending approximately ~~26,760~~25,880 asbestos claims, as compared with approximately 27,770 as of December 31, 2021. During the ~~first~~third quarter of 2022, we received approximately ~~750~~660 new claims and closed or moved to an inactive docket approximately ~~1,760~~1,570 claims. We report claims as closed when we become aware that a dismissal order has been entered by a court or when we have reached agreement with the claimants on the material terms of a settlement. Settlement costs depend on the seriousness of the injuries that form the basis of the claims, the quality of evidence supporting the claims and other factors. Our total costs for the years 2021 and 2020 for settlement and defense of asbestos claims after insurance recoveries and net of tax were approximately $63 million and $35 million, respectively. Our costs for settlement and defense of asbestos claims may vary year to year and insurance proceeds are not always recovered in the same period as the insured portion of the expenses.

Filings include claims for individuals suffering from mesothelioma, a rare cancer, the risk of which is allegedly increased by exposure to asbestos; lung cancer, a cancer which may be caused by various factors, one of which is alleged to be asbestos exposure; other cancers, and conditions that are substantially less serious, including claims brought on behalf of individuals who are asymptomatic as to an allegedly asbestos-related disease. The predominant number of pending claims against us are non-cancer claims. It is difficult to predict future asbestos liabilities, as events and circumstances may impact the estimate of our asbestos liabilities, including, among others, the number and types of claims and average cost to resolve such claims. We record an accrual for a loss contingency when it is both probable that a liability has been incurred and when the amount of the loss can be reasonably estimated. We believe that our accrual and insurance are sufficient to cover our asbestos liabilities. Our liability estimate is based upon many factors, including the number of outstanding claims, estimated average cost per claim, the breakdown of claims by disease type, historic claim filings, costs per claim of resolution and the filing of new claims, as well as consultation with a third party firm on trends that may impact our future asbestos liability.

~~-28-~~-31-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

~~filing of new claims, as well as consultation with a third party firm on trends that may impact our future asbestos liability.~~

Other

From time to time we receive claims from federal and state environmental regulatory agencies and other entities asserting that we are or may be liable for environmental cleanup costs and related damages principally relating to our historical and predecessor operations. In addition, from time to time we receive personal injury claims including toxic tort and product liability claims (other than asbestos) arising from our historical operations and predecessors.

15) SUPPLEMENTAL FINANCIAL INFORMATION

Supplemental Cash Flow Information


		Three Months Ended					Nine Months Ended
		March 31,					September 30,
		2022		2021			2022		2021
Cash paid for interest	Cash paid for interest	$	292	$	316	Cash paid for interest	$	755	$	783

Cash paid (received) for income taxes:
Cash paid for income taxes:						Cash paid for income taxes:
Continuing operations	Continuing operations	$	45	$	(23)	Continuing operations	$	31	$	171
Discontinued operations	Discontinued operations	$	5	$	—	Discontinued operations	$	11	$	40

Noncash additions to operating lease assets	Noncash additions to operating lease assets	$	68	$	5	Noncash additions to operating lease assets	$	127	$	180

Lease Income

We enter into operating leases for the use of our owned production facilities and office buildings. Lease payments received under these agreements consist of fixed payments for the rental of space and certain building operating costs, as well as variable payments based on usage of production facilities and services, and escalating costs of building operations. We recorded total lease income, including both fixed and variable amounts, of ~~$15~~$16 million and ~~$36~~$50 million for the three and nine months ended ~~March 31,~~September 30, 2022, respectively, and $42 million and $113 million for the three and nine months ended September 30, 2021, respectively. The ~~decrease reflects~~lower lease income for the three and nine months ended September 30, 2022 compared with the same periods in 2021 is the result of the sales of a production facility and an office building during the fourth quarter of 2021.

~~Restructuring~~

-32-

PARAMOUNT GLOBAL AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Tabular dollars in millions, except per share amounts)

Restructuring and Other Corporate Matters

During the three and nine months ended ~~March 31,~~September 30, 2022 and 2021, we recorded the following costs associated with restructuring and other corporate matters.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
TV Media	$	77	$	5	$	86	$	5
Direct-to-Consumer	—		—		1		—
Filmed Entertainment	—		26		18		26
Corporate	—		15		—		15
Severance (a)	77		46		105		46
Exit costs	8		—		8		35
Restructuring charges	85		46		113		81

Other corporate matters	84		—		163		—
Restructuring and other corporate matters	$	169	$	46	$	276	$	81

(a) Severance costs include the accelerated vesting of stock-based compensation.

During the three and nine months ended September 30, 2022, we recorded restructuring charges of ~~$18~~$85 million ~~within~~and $113 million, respectively, which are comprised of severance costs and the impairment of lease assets in each period. The severance costs are primarily associated with changes in management following the realignment of our operating segments. The lease impairments relate to lease assets that we ceased use of with the intent to sublease in connection with initiatives to reduce our real estate footprint in New York City.

~~Filmed Entertainment~~ ~~segment, consisting~~

During the three and nine months ended September 30, 2021, we recorded restructuring charges of $46 million and $81 million, respectively. The charges for the three-month period were for severance costs primarily associated with changes in ~~management.~~management at certain of our businesses. The charges for the nine-month period also included $35 million for the impairment of lease assets that we determined we would not use and began actively marketing for sublease. This determination was made in connection with cost-transformation initiatives related to the Merger. The impairment was the result of a decline in market conditions since inception of these leases and reflects the difference between the estimated fair values, which were determined based on the expected discounted future cash flows of the lease assets, and the carrying values.

At ~~March 31,~~September 30, 2022 and December 31, 2021, our restructuring liability was ~~$156~~$173 million and $190 million, respectively, and was recorded in “Other current liabilities” and “Other liabilities” on the Consolidated Balance Sheets. During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, we made payments for restructuring of ~~$44~~$94 million. The liability at ~~March 31,~~September 30, 2022, which principally relates to severance payments, is expected to be substantially paid by the end of 2023.

In addition, for the three and nine months ended September 30, 2022, we recorded charges for other corporate matters of $84 million and $163 million, respectively, of which $77 million and $117 million, respectively, is associated with litigation described under Legal Matters—Stockholder Matters in Note 14. Also included in other corporate matters are charges of $7 million and $46 million for the three and nine months ended September 30, 2022, respectively, recorded following Russia’s invasion of Ukraine in the first quarter of 2022, principally to reserve against amounts due from counterparties in Russia, Belarus and Ukraine.

~~-29-~~

-33-


Item 2.			Management’s Discussion and Analysis of Results of Operations and Financial Condition.
			(Tabular dollars in millions, except per share amounts)

Effective February 16, 2022, we changed our name from ViacomCBS Inc. to Paramount Global. Management’s discussion and analysis of the results of operations and financial condition of Paramount Global should be read in conjunction with the consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2021, which was filed prior to ~~the above-mentioned~~our name change. References in this document to “Paramount,” the “Company,” “we,” “us” and “our” refer to Paramount Global.

Significant components of management’s discussion and analysis of results of operations and financial condition include:

•Overview—Summary of our business and operational highlights.

•Consolidated Results of Operations—Analysis of our results on a consolidated basis for the three and nine months ended ~~March 31,~~September 30, 2022 compared with the three and nine months ended ~~March 31,~~September 30, 2021.

•Segment Results of Operations—Analysis of our results on a reportable segment basis for the three and nine months ended ~~March 31,~~September 30, 2022 compared with the three and nine months ended ~~March 31,~~September 30, 2021.

•Liquidity and Capital Resources—Discussion of our cash flows, including sources and uses of cash, for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and ~~March 31,~~September 30, 2021; and our outstanding debt as of ~~March 31,~~September 30, 2022.

•Legal Matters—Discussion of legal matters in which we are involved.

~~-30-~~-34-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Overview

Operational Highlights - Three Months Ended ~~March 31,~~September 30, 2022 versus Three Months Ended ~~March 31,~~September 30, 2021


Consolidated results of operations	Consolidated results of operations					Increase/(Decrease)				Consolidated results of operations					Increase/(Decrease)
Three Months Ended March 31,		2022		2021		$		%
Three Months Ended September 30,										Three Months Ended September 30,	2022		2021		$		%
GAAP:	GAAP:									GAAP:
Revenues	Revenues	$	7,328	$	7,412	$	(84)	(1)	%	Revenues	$	6,916	$	6,610	$	306	5	%
Operating income	Operating income	$	775	$	1,528	$	(753)	(49)	%	Operating income	$	566	$	879	$	(313)	(36)	%
Net earnings from continuing operations attributable to Paramount	Net earnings from continuing operations attributable to Paramount	$	391	$	899	$	(508)	(57)	%	Net earnings from continuing operations attributable to Paramount	$	153	$	465	$	(312)	(67)	%
Diluted EPS from continuing operations attributable to Paramount	Diluted EPS from continuing operations attributable to Paramount	$	.58	$	1.42	$	(.84)	(59)	%	Diluted EPS from continuing operations attributable to Paramount	$	.21	$	.69	$	(.48)	(70)	%

Non-GAAP: (a)	Non-GAAP: (a)									Non-GAAP: (a)
Adjusted OIBDA	Adjusted OIBDA	$	913	$	1,627	$	(714)	(44)	%	Adjusted OIBDA	$	786	$	1,020	$	(234)	(23)	%
Adjusted net earnings from continuing operations attributable to Paramount	Adjusted net earnings from continuing operations attributable to Paramount	$	403	$	961	$	(558)	(58)	%	Adjusted net earnings from continuing operations attributable to Paramount	$	270	$	510	$	(240)	(47)	%
Adjusted diluted EPS from continuing operations attributable to Paramount	Adjusted diluted EPS from continuing operations attributable to Paramount	$	.60	$	1.52	$	(.92)	(61)	%	Adjusted diluted EPS from continuing operations attributable to Paramount	$	.39	$	.76	$	(.37)	(49)	%

(a) Certain items identified as affecting comparability are excluded in non-GAAP results. See “Reconciliation of Non-GAAP Measures” for details of these items and reconciliations of non-GAAP results to the most directly comparable financial measures in accordance with accounting principles generally accepted in the United States (“GAAP”).

For the three months ended ~~March 31,~~September 30, 2022, revenues ~~decreased 1%~~increased 5% to ~~$7.33~~$6.92 billion, ~~as significant~~driven by higher revenues from Paramount+, and the continued success of our second quarter theatrical release Top Gun: Maverick, including in the digital home entertainment market. These increases were partially offset by declines in revenues from our linear networks and the licensing of television content.

Operating income for the three months ended September 30, 2022 decreased 36% from the same prior-year period. The operating income comparison was impacted by higher charges in 2022 for restructuring and other corporate matters. Adjusted operating income before depreciation and amortization (“Adjusted OIBDA”), which excludes these charges in each period, as well as a gain on a disposition in 2022, decreased 23%, mainly the result of our investment in our direct-to-consumer streaming services (“DTC services”) and ~~revenue~~the decline in revenues from our linear networks, partially offset by higher profit from theatrical releases, primarily from Top Gun: Maverick.

For the three months ended September 30, 2022, net earnings from continuing operations attributable to Paramount and diluted earnings per share (“EPS”) from continuing operations decreased 67% and 70%, respectively, from the same prior-year period as a result of the decline in operating income. Adjusted net earnings from continuing operations attributable to Paramount and adjusted diluted EPS, which exclude the items impacting the comparability of operating income noted above and the other items described under Reconciliation of Non-GAAP Measures for the applicable period, decreased 47% and 49%, respectively, primarily reflecting the lower Adjusted OIBDA.

-35-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Operational Highlights - Nine Months Ended September 30, 2022 versusNine Months Ended September 30, 2021


Consolidated results of operations					Increase/(Decrease)
Nine Months Ended September 30,	2022		2021		$		%
GAAP:
Revenues	$	22,023	$	20,586	$	1,437	7	%
Operating income	$	2,160	$	3,633	$	(1,473)	(41)	%
Net earnings from continuing operations attributable to Paramount	$	902	$	2,359	$	(1,457)	(62)	%
Diluted EPS from continuing operations attributable to Paramount	$	1.32	$	3.62	$	(2.30)	(64)	%


Non-GAAP: (a)
Adjusted OIBDA	$	2,662	$	3,887	$	(1,225)	(32)	%
Adjusted net earnings from continuing operations attributable to Paramount	$	1,102	$	2,111	$	(1,009)	(48)	%
Adjusted diluted EPS from continuing operations attributable to Paramount	$	1.63	$	3.23	$	(1.60)	(50)	%

For the nine months ended September 30, 2022, revenues increased 7% to $22.02 billion, driven by significant growth in revenues from our DTC services, led by Paramount+, and higher theatrical revenues, reflecting the success of our current year releases. These increases were ~~more than~~partially offset by lower revenues from our linear networks, including the ~~benefits in 2021~~impact from ~~CBS’ broadcast of the Super Bowl, reflecting~~ the rotational nature of the rights to air ~~this event,~~the Super Bowl, which was broadcast on CBS in 2021 and ~~the licensing of~~ ~~Coming 2 America~~ ~~and~~ ~~Tom Clancy’s Without Remorse~~.another network in 2022. The absence of the Super Bowl negatively impacted the total revenue comparison by ~~6-percentage~~2 percentage points. ~~The above-mentioned growth from our DTC services was led by Paramount+ and Pluto TV, and theatrical revenues in the first quarter of 2022 benefited from the releases of~~ ~~Scream~~, ~~Jackass Foreve~~r,~~and~~ ~~The Lost City, while there were no releases in the prior-year quarter as a result of the closure or reduced capacity of movie theaters in response to the coronavirus pandemic (“COVID-19”).~~

Operating income for the ~~three~~nine months ended ~~March 31,~~September 30, 2022 decreased ~~49%~~41% from the same prior-year period. The operating income comparison was impacted by ~~items identified as affecting comparability, including~~higher charges in 2022 for restructuring and other corporate matters, ~~and~~as well as lower gains on ~~sales for the three months ended March 31, 2022.~~dispositions. Adjusted ~~operating income before depreciation and amortization (“Adjusted OIBDA”)~~OIBDA, which excludes these items, decreased ~~44%~~32%, driven by our investment in our DTC services, and revenue declines from our linear networks, including from the benefit to the 2021 period from the broadcast of the Super ~~Bowl, increased investment in our DTC services, and higher costs in 2022 associated with theatrical releases and the mix of programming on our linear networks.~~Bowl.

For the ~~three~~nine months ended ~~March 31,~~September 30, 2022, net earnings from continuing operations attributable to Paramount and diluted EPS from continuing operations decreased ~~57%~~62% and ~~59%~~64%, respectively, from the same prior-year ~~period. These comparisons were impacted by items identified~~period as ~~affecting comparability, including~~a result of the ~~aforementioned items impacting~~decline in operating income, ~~and~~as well as a ~~loss on extinguishment~~higher effective tax rate in 2022. The higher effective tax rate was the result of ~~debt and~~lower discrete tax ~~items~~benefits in ~~both periods.~~the current year, which included a net benefit of $72 million compared with $290 million for the prior-year period. Adjusted net earnings from continuing operations attributable to Paramount and adjusted diluted EPS, which in each period exclude these discrete tax benefits, the items impacting the comparability of operating income noted above, and the other items described under Reconciliation of Non-GAAP Measures for the applicable period, decreased ~~58%~~48% and ~~61%~~50%, respectively, primarily reflecting the lower ~~adjusted~~Adjusted OIBDA. Additionally, adjusted diluted EPS was impacted by the March 2021 issuance of 20 million shares of our Class B Common Stock and 10 million shares of 5.75% Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”), which negatively impacted the EPS comparison by $.03.

~~-31-~~-36-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Reconciliation of Non-GAAP Measures

Results for the three and nine months ended ~~March 31,~~September 30, 2022 and 2021 included certain items identified as affecting comparability. Adjusted OIBDA, adjusted earnings from continuing operations before income taxes, adjusted provision for income taxes, adjusted net earnings from continuing operations attributable to Paramount, and adjusted diluted EPS from continuing operations (together, the “adjusted measures”) exclude the impact of these items and are measures of performance not calculated in accordance with GAAP. We use these measures to, among other things, evaluate our operating performance. These measures are among the primary measures used by management for planning and forecasting of future periods, and they are important indicators of our operational strength and business performance. In addition, we use Adjusted OIBDA to, among other things, value prospective acquisitions. We believe these measures are relevant and useful for investors because they allow investors to view performance in a manner similar to the method used by our management; provide a clearer perspective on our underlying performance; and make it easier for investors, analysts and peers to compare our operating performance to other companies in our industry and to compare our year-over-year results.

Because the adjusted measures are measures of performance not calculated in accordance with GAAP, they should not be considered in isolation of, or as a substitute for, operating income, earnings from continuing operations before income taxes, provision/benefit for income taxes, net earnings from continuing operations attributable to Paramount or diluted EPS from continuing operations, as applicable, as indicators of operating performance. These measures, as we calculate them, may not be comparable to similarly titled measures employed by other companies.

The following tables reconcile the adjusted measures to their most directly comparable financial measures in accordance with GAAP.


		Three Months Ended			Three Months Ended						Nine Months Ended
		March 31,			September 30,						September 30,
			2022			2021			2022		2021		2022		2021
Operating income (GAAP)	Operating income (GAAP)		$	775		$	1,528	Operating income (GAAP)	$	566	$	879	$	2,160	$	3,633
Depreciation and amortization	Depreciation and amortization		96			99		Depreciation and amortization	92		95		282		289
Restructuring and other corporate matters (a)	Restructuring and other corporate matters (a)		57			—		Restructuring and other corporate matters (a)	169		46		276		81

Gain on sales (a)			(15)			—
Net gain on dispositions (a)								Net gain on dispositions (a)	(41)		—		(56)		(116)
Adjusted OIBDA (Non-GAAP)	Adjusted OIBDA (Non-GAAP)		$	913		$	1,627	Adjusted OIBDA (Non-GAAP)	$	786	$	1,020	$	2,662	$	3,887

(a) See notes on the following ~~table~~tables for additional information on items affecting comparability.

~~-32-~~-37-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)


		Three Months Ended March 31, 2022													Three Months Ended September 30, 2022
		Earnings from Continuing Operations Before Income Taxes			Provision for Income Taxes			Net Earnings from Continuing Operations Attributable to Paramount			Diluted EPS from Continuing Operations				Earnings from Continuing Operations Before Income Taxes			Provision for Income Taxes			Net Earnings from Continuing Operations Attributable to Paramount			Diluted EPS from Continuing Operations
Reported (GAAP)	Reported (GAAP)		$	470		$	(34)		$	391		$	.58	Reported (GAAP)		$	323		$	(101)		$	153		$	.21
Items affecting comparability:	Items affecting comparability:													Items affecting comparability:
Restructuring and other corporate matters (a)	Restructuring and other corporate matters (a)		57			(12)			45			.07		Restructuring and other corporate matters (a)		169			(38)			131			.20
Gain on sales (b)			(15)			4			(11)			(.02)
Gain on dispositions (b)														Gain on dispositions (b)		(41)			10			(31)			(.05)
Loss from investments (c)														Loss from investments (c)		9			(1)			8			.01

Loss on extinguishment of debt			73			(17)			56			.09

Discrete tax items (c)			—			(78)			(78)			(.12)
Discrete tax items (d)														Discrete tax items (d)		—			9			9			.02
Adjusted (Non-GAAP)	Adjusted (Non-GAAP)		$	585		$	(137)		$	403		$	.60	Adjusted (Non-GAAP)		$	460		$	(121)		$	270		$	.39

(a) ~~Reflects restructuring~~Comprised of charges of ~~$18~~$85 million for restructuring, consisting of severance costs and ~~a charge~~lease impairments; $77 million associated with litigation described under Legal Matters—Stockholder Matters; and $7 million related to the suspension of ~~$39 million, principally to reserve against amounts due from counterparties~~operations in ~~Russia, Belarus and Ukraine, following Russia’s invasion of Ukraine.~~Russia.

(b) Reflects a gain ~~from~~recognized upon the contribution of certain assets of Paramount+ in Denmark, Finland, Norway and Sweden (the “Nordics”) to SkyShowtime, our streaming joint venture with Comcast (“SkyShowtime”).

(c) Reflects a loss on the sale of ~~international intangible assets~~a 37.5% interest in The CW to Nexstar Media Inc. and ~~a working capital adjustment to the gain from the fourth quarter 2021 sale~~an impairment of ~~CBS Studio Center.~~an investment.

~~(c)~~(d) Primarily reflects ~~a deferred~~discrete tax ~~benefit resulting~~provisions realized in connection with the filing of our tax returns in international jurisdictions and from the transfer of ~~intangible assets between our~~ subsidiaries in connection with a reorganization of our international operations.


		Three Months Ended March 31, 2021													Three Months Ended September 30, 2021
		Earnings from Continuing Operations Before Income Taxes			Provision for Income Taxes			Net Earnings from Continuing Operations Attributable to Paramount			Diluted EPS from Continuing Operations				Earnings from Continuing Operations Before Income Taxes			Provision for Income Taxes			Net Earnings from Continuing Operations Attributable to Paramount			Diluted EPS from Continuing Operations
Reported (GAAP)	Reported (GAAP)		$	1,155		$	(226)		$	899		$	1.42	Reported (GAAP)		$	616		$	(120)		$	465		$	.69
Items affecting comparability:	Items affecting comparability:													Items affecting comparability:

Loss on extinguishment of debt			128			(30)			98			.16
Gain from investments (a)			(20)			5			(15)			(.03)
Discrete tax items (b)			—			(21)			(21)			(.03)

Restructuring and other corporate matters (a)														Restructuring and other corporate matters (a)		46			(12)			34			.05
Loss from investments (b)														Loss from investments (b)		5			(1)			4			.01
Pension settlement charges (c)														Pension settlement charges (c)		10			(2)			8			.01
Discrete tax items														Discrete tax items		—			(1)			(1)			—
Adjusted (Non-GAAP)	Adjusted (Non-GAAP)		$	1,263		$	(272)		$	961		$	1.52	Adjusted (Non-GAAP)		$	677		$	(136)		$	510		$	.76

(a) Reflects ~~an unrealized gain from an increase~~severance costs associated with changes in management at certain of our businesses.

(b) Reflects the change in fair value of an investment that was sold during the third quarter of 2021.

~~(b) Primarily reflects tax benefits from~~portion of the ~~resolution~~unamortized actuarial losses due to the volume of ~~certain state income tax matters and excess tax benefits from the vesting or exercise~~lump sum benefit payments in one of ~~stock-based compensation awards.~~our pension plans.

~~-33-~~-38-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)


	Nine Months Ended September 30, 2022
	Earnings from Continuing Operations Before Income Taxes			Provision for Income Taxes			Net Earnings from Continuing Operations Attributable to Paramount			Diluted EPS from Continuing Operations
Reported (GAAP)		$	1,312		$	(264)		$	902		$	1.32
Items affecting comparability:
Restructuring and other corporate matters (a)		276			(62)			214			.33
Gain on dispositions (b)		(56)			14			(42)			(.06)
Loss from investments (c)		9			(1)			8			.01
Loss on extinguishment of debt		120			(28)			92			.14

Discrete tax items (d)		—			(72)			(72)			(.11)
Adjusted (Non-GAAP)		$	1,661		$	(413)		$	1,102		$	1.63

(a) Comprised of charges of $113 million for restructuring, consisting of severance costs and lease impairments; $117 million associated with litigation described under Legal Matters—Stockholder Matters; and $46 million recorded following Russia’s invasion of Ukraine in the first quarter of 2022, principally to reserve against amounts due from counterparties in Russia, Belarus and Ukraine.

(b) Reflects a $41 million gain recognized upon the contribution of certain assets of Paramount+ in the Nordics to SkyShowtime as well as gains totaling $15 million from the sale of international intangible assets and a working capital adjustment to the gain from the fourth quarter 2021 sale of CBS Studio Center.

(d) Primarily reflects a deferred tax benefit resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations.


	Nine Months Ended September 30, 2021
	Earnings from Continuing Operations Before Income Taxes			Provision for Income Taxes			Net Earnings from Continuing Operations Attributable to Paramount			Diluted EPS from Continuing Operations
Reported (GAAP)		$	2,789		$	(312)		$	2,359		$	3.62
Items affecting comparability:
Restructuring and other corporate matters (a)		81			(20)			61			.10
Net gain on dispositions (b)		(116)			27			(89)			(.14)
Loss on extinguishment of debt		128			(30)			98			.15
Gains from investments (c)		(47)			11			(36)			(.06)
Pension settlement charges (d)		10			(2)			8			.01
Discrete tax items (e)		—			(290)			(290)			(.45)

Adjusted (Non-GAAP)		$	2,845		$	(616)		$	2,111		$	3.23

(a) Reflects severance costs and the impairment of lease assets.

(b) Primarily reflects a gain on the sale of a noncore trademark licensing operation.

(c) Reflects a gain of $37 million on the sale of an investment and an increase in the fair value of an investment which was sold during the third quarter of 2021.

(d) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.

(e) Primarily reflects a benefit of $260 million to remeasure our UK net deferred income tax asset as a result of the enactment in the second quarter of 2021 of an increase in the UK corporate income tax rate from 19% to 25% beginning April 1, 2023, as well as a net tax benefit in connection with the settlement of income tax audits.

-39-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Consolidated Results of Operations

Three and Nine Months Ended ~~March 31,~~September 30, 2022 versus Three and Nine Months Ended ~~March 31,~~September 30, 2021

Revenues


		Three Months Ended March 31,																							Three Months Ended September 30,
				% of Total Revenues								% of Total Revenues				Increase/(Decrease)													% of Total Revenues								% of Total Revenues				Increase/(Decrease)
Revenues by Type	Revenues by Type	2022				2021								$				%				Revenues by Type	2022								2021								$				%
Advertising	Advertising	$	2,864			39	%			$	3,109			42	%			$	(245)			(8)	%			Advertising	$	2,337			34	%			$	2,386			36	%			$	(49)			(2)	%
Affiliate and subscription	Affiliate and subscription	2,840		39				2,463				33				377				15				Affiliate and subscription	2,863				41				2,650				40				213				8
Theatrical	Theatrical	131		2				1				—				130				n/m				Theatrical	231				3				67				1				164				245
Licensing and other	Licensing and other	1,493		20				1,839				25				(346)				(19)				Licensing and other	1,485				22				1,507				23				(22)				(1)
Total Revenues	Total Revenues	$	7,328	100	%			$	7,412			100	%			$	(84)			(1)	%			Total Revenues	$	6,916			100	%			$	6,610			100	%			$	306			5	%

~~n/m - not meaningful~~


	Nine Months Ended September 30,
			% of Total Revenues				% of Total Revenues		Increase/(Decrease)
Revenues by Type	2022				2021				$		%
Advertising	$	7,746	35	%	$	8,094	39	%	$	(348)	(4)	%
Affiliate and subscription	8,591		39		7,701		38		890		12
Theatrical	1,126		5		202		1		924		457
Licensing and other	4,560		21		4,589		22		(29)		(1)
Total Revenues	$	22,023	100	%	$	20,586	100	%	$	1,437	7	%

Advertising

For the three months ended ~~March 31,~~September 30, 2022, the 8%2% decrease in advertising revenues reflects lower domestic and international advertising revenues. The decrease in domestic advertising revenues is the result of lower linear impressions as pricing only partially offset the decline, reflecting softness in the scatter market. Higher political advertising sales also partially offset the decline. The decrease in international advertising revenues was driven by unfavorable foreign exchange rate changes, partially offset by the benefit from the acquisition of Chilevisión in the third quarter of 2021. The foreign exchange rate changes negatively impacted the comparison of total advertising revenues by 3 percentage points.

For the nine months ended September 30, 2022, the 4% decrease in advertising revenues is due to the rotational nature of the rights to broadcast the Super Bowl, which aired on CBS in 2021 and another network in 2022, resulting in a negative impact on the advertising comparison of 165 percentage points. This impact was partially offset by significant increases in advertising from Pluto TV, which grew 51%, and Paramount+. Additionally, advertising revenues for our broadcast and cable networks benefited from an increase in pricing globally, which was largely offset by the impact from lower linear impressions for our domestic networks.

The advertising revenue comparison inalso reflects significant increases from Paramount+ and Pluto TV. For the ~~second half of 2022 is expected to benefit from~~nine months, our domestic networks were also impacted by lower impressions, which were substantially offset by higher pricing and increased political advertising ~~spending associated with mid-term elections~~sales. The international advertising revenue comparison was negatively impacted by foreign exchange rate changes, partially offset by the benefit from the acquisition of Chilevisión in the ~~United States.~~third quarter of 2021. The foreign exchange rate changes negatively impacted the comparison of total advertising revenues for the nine-month period by 1 percentage point.

Affiliate and Subscription

Affiliate and subscription revenues are principally comprised of fees received from multichannel video programming distributors (“MVPDs”) and third-party live television streaming services (“virtual MVPDs” or “vMVPDs”) for carriage of our cable networks (“cable affiliate fees”), fees received from television stations affiliated with the CBS Television Network (“reverse compensation”), fees for authorizing the MVPDs’ and

-40-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

vMVPDs’ carriage of our owned television stations (“retransmission fees”), and subscription fees for our DTC services.

For the three and nine months ended ~~March 31,~~September 30, 2022, affiliate and subscription revenues increased ~~15%~~8% and 12%, respectively, driven by growth in subscribers for our DTC services of ~~74%~~42% to ~~62.4~~66.5 million at ~~March 31,~~September 30, 2022 from ~~35.9~~46.7 million at ~~March 31,~~September 30, 2021, ~~led by~~reflecting an increase of ~~23.1~~20.5 million for Paramount+ to ~~39.6~~46.0 million at ~~March 31,~~September 30, 2022. These increases were partially offset by lower affiliate fees for our domestic and international pay television networks. The domestic decrease was the result of pay television subscriber declines, partially offset by rate increases and higher reverse compensation revenues in each period. The nine-month comparison also includes the benefit from the launch of our basic cable networks on a vMVPD in April 2021. Foreign exchange rate changes negatively impacted the comparison of total affiliate and subscription revenues for the three-month period by 1 percentage point.

Theatrical

For the three months ended ~~March 31,~~September 30, 2022, theatrical revenues grew $164 million, led by the continued success of the second quarter 2022 theatrical release Top Gun: Maverick. Releases in the third quarter 2021 included Paw Patrol: The Movie and Snake Eyes: G.I. Joe Origins.For the nine months ended September 30, 2022, the $924 million increase in theatrical revenues ~~reflects~~was also driven by Top Gun: Maverick as well as Sonic the ~~theatrical releases of~~ Hedgehog 2~~Scream, Jackass Foreve~~r, and The Lost ~~City~~City.~~, while the prior-year quarter was impacted by the closure or reduced capacity of movie theaters~~ The comparable period in ~~response to COVID-19.~~2021 also included revenues from A Quiet Place Part II.

Licensing and Other

Licensing and other revenues are principally comprised of fees from the licensing of the rights to exhibit our internally-produced television and film programming on various platforms in the secondary market after its initial exhibition on our owned or ~~third party~~third-party platforms; license fees from content produced for third parties; home entertainment revenues, which includes the viewing of our content on a transactional basis through transactional video-on-demand (TVOD) and electronic sell-through services and the sale and distribution of our content through DVDs and Blu-ray discs to wholesale and retail partners; fees from the use of our trademarks and brands for consumer products, recreation and live events; fees from the distribution of third-party programming; and revenues from the rental of production facilities. ~~For the three months ended March 31, 2022, the 19% decrease~~

The 1% decline in licensing and other revenues ~~primarily~~for the three months ended September 30, 2022 reflects ~~the benefit~~a decrease in revenues from the licensing of television programming, mainly reflecting lower domestic licensing in the secondary market as the prior-year period included several significant licensing arrangements, offset by an increase in the licensing of film content, driven by ~~Coming 2 America~~Top Gun: Maverick. The 1% decrease for the nine months ended September 30, 2022 reflects lower licensing of library film titles and domestic licensing of television programming in the secondary market, offset by higher international licensing and a higher volume of television content produced for third parties.

~~Tom Clancy’s~~

~~-34-~~-41-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

~~Without Remorse~~ ~~in the prior-year quarter, as well as lower licensing of film library titles driven by the timing of availabilities and a lower volume of licensing of television programming in 2022~~.

Operating Expenses


		Three Months Ended March 31,																							Three Months Ended September 30,
				% of Operating Expenses								% of Operating Expenses				Increase/(Decrease)													% of Operating Expenses								% of Operating Expenses				Increase/(Decrease)
Operating Expenses by Type	Operating Expenses by Type	2022				2021								$				%				Operating Expenses by Type	2022								2021								$				%
Content costs	Content costs	$	3,831			80	%			$	3,724			85	%			$	107			3	%			Content costs	$	3,527			79	%			$	3,255			80	%			$	272			8	%
Distribution and other	Distribution and other	965		20				639				15				326				51				Distribution and other	933				21				809				20				124				15
Total Operating Expenses	Total Operating Expenses	$	4,796	100	%			$	4,363			100	%			$	433			10	%			Total Operating Expenses	$	4,460			100	%			$	4,064			100	%			$	396			10	%


	Nine Months Ended September 30,
			% of Operating Expenses				% of Operating Expenses		Increase/(Decrease)
Operating Expenses by Type	2022				2021				$		%
Content costs	$	11,475	80	%	$	10,093	82	%	$	1,382	14	%
Distribution and other	2,887		20		2,199		18		688		31
Total Operating Expenses	$	14,362	100	%	$	12,292	100	%	$	2,070	17	%

Content Costs

Content costs include the amortization of costs of internally-produced television and theatrical film content; amortization of acquired program rights; other television production costs, including on-air talent; and participation and residuals expenses, which reflect amounts owed to talent and other participants in our content pursuant to contractual and collective bargaining arrangements.

For the three months ended ~~March 31,~~September 30, 2022, content costs increased ~~3% primarily~~8% driven by ~~an increased~~our investment in content for our DTC services and ~~more original programming on~~participations associated with Top Gun: Maverick. For the nine months ended September 30, 2022, content costs increased 14% reflecting higher costs associated with theatrical releases and investment in content for our ~~broadcast and cable networks,~~DTC services, partially offset by ~~lower~~ costs ~~for films, driven by~~in 2021 from CBS’ broadcast of the ~~decrease in licensing revenues, and sports programming.~~Super Bowl.

Distribution and Other

Distribution and other operating expenses primarily include costs relating to the distribution of our content, including print and advertising for theatrical releases and costs for amounts paid to third-party distributors; compensation; revenue-sharing costs to television stations affiliated with the CBS Television Network; and other ancillary and overhead costs associated with our operations.

For the three and nine months ended ~~March 31,~~September 30, 2022, distribution and other expenses increased ~~51%~~15% and 31%, respectively, primarily reflecting ~~costs to support first quarter theatrical releases, including~~ ~~The Lost City, Jackass Forever, and~~ ~~Scream~~ ~~as well as second quarter releases, including~~ ~~Sonic the Hedgehog 2. The increasealso reflects~~ higher costs associated with the growth of our DTC services, ~~mainly~~including costs for ~~amounts paid~~payments to third-party ~~distributors.~~distributors and to support the international expansion of our DTC services. The increases also reflect higher distribution costs associated with theatrical content.

Selling, General and Administrative Expenses

Three Months Ended March 31,
2022 2021 Increase/(Decrease)
Selling, general and administrative expenses $ 1,619 $ 1,422 14 %

Selling, general and administrative (“SG&A”) expenses include expenses incurred for selling and marketing costs, occupancy, professional service fees and back office support, including employee compensation. For the three months ended March 31, 2022, SG&A expenses increased 14% driven by advertising, marketing and other cost increases to support the growth and expansion of our DTC services.


	Three Months Ended September 30,							Nine Months Ended September 30,
	2022		2021		Increase/(Decrease)			2022		2021		Increase/(Decrease)
Selling, general and administrative expenses	$	1,670	$	1,526		9	%	$	4,999	$	4,407		13	%

~~-35-~~-42-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Selling, general and administrative (“SG&A”) expenses include costs incurred for advertising, marketing, occupancy, professional service fees, and back office support, including employee compensation and technology. For the three and nine months ended September 30, 2022, SG&A expenses increased 9% and 13%, respectively, driven by advertising, marketing and other cost increases to support the growth and expansion of our DTC services.

Depreciation and Amortization

Three Months Ended March 31,
2022 2021 Increase/(Decrease)
Depreciation and amortization $ 96 $ 99 (3) %


	Three Months Ended September 30,							Nine Months Ended September 30,
	2022		2021		Increase/(Decrease)			2022		2021		Increase/(Decrease)
Depreciation and amortization	$	92	$	95		(3)	%	$	282	$	289		(2)	%

Restructuring and Other Corporate Matters

~~Three Months Ended~~During the three and nine months ended September 30, 2022 and 2021, we recorded the following costs associated with restructuring and other corporate matters.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Severance (a)	$	77	$	46	$	105	$	46
Exit costs	8		—		8		35
Restructuring charges	85		46		113		81

Other corporate matters	84		—		163		—
Restructuring and other corporate matters	$	169	$	46	$	276	$	81

(a) Severance costs include the accelerated vesting of stock-based compensation.

~~March 31, 2022~~

~~Restructuring charges~~

~~Other corporate matters~~

~~Restructuring and other corporate matters~~

During the three and nine months ended ~~March 31,~~September 30, 2022, we recorded restructuring charges of ~~$18~~$85 million ~~within the~~ ~~Filmed Entertainment~~ ~~segment, consisting~~and $113 million, respectively, which are comprised of severance costs and the impairment of lease assets in each period. The severance costs are primarily associated with changes in ~~management.~~management following the realignment of our operating segments. The lease impairments relate to lease assets that we ceased use of with the intent to sublease in connection with initiatives to reduce our real estate footprint in New York City. In addition, for the three and nine months ended September 30, 2022, we recorded charges for other corporate matters of $84 million and $163 million, respectively, of which $77 million and $117 million, respectively, is associated with litigation described under Legal Matters—Stockholder Matters. Also included in other corporate matters are charges of $7 million and $46 million for the three and nine months ended September 30, 2022, respectively, recorded following Russia’s invasion of Ukraine ~~we recorded a charge~~in the first quarter of ~~$39 million during the three months ended March 31,~~ 2022, principally to reserve against amounts due from counterparties in Russia, Belarus and Ukraine.

During the three and nine months ended September 30, 2021, we recorded restructuring charges of $46 million and $81 million, respectively. The charges for the three-month period were for severance costs primarily associated with changes in management at certain of our businesses. The charges for the nine-month period also included $35 million for the impairment of lease assets that we determined we would not use and began actively marketing for sublease. This determination was made in connection with cost-transformation initiatives related to the merger of Viacom Inc. (“Viacom”) with and into CBS Corporation (“CBS”) (the “Merger”). The impairment was the result of a decline in market conditions since inception of these leases and reflects the difference between the estimated fair values, which were determined based on the expected discounted future cash flows of the lease assets, and the carrying values.

-43-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Net Gain on ~~Sales~~Dispositions

For the three and nine months ended ~~March 31,~~September 30, 2022, we recorded a gain of $41 million relating to the contribution of certain assets of Paramount+ in the Nordics to SkyShowtime. Also, for the nine months ended September 30, 2022, we recorded gains on ~~sales~~dispositions totaling $15 million, comprised of a gain from the sale of international intangible assets and a working capital adjustment to the gain from the fourth quarter 2021 sale of CBS Studio Center. For the nine months ended September 30, 2021, net gain on dispositions of $116 million principally included a gain on the sale of a noncore trademark licensing operation.

Interest Expense/Income


		Three Months Ended March 31,						Three Months Ended September 30,							Nine Months Ended September 30,
			2022	2021		Increase/(Decrease)					2022		2021		Increase/(Decrease)				2022	2021		Increase/(Decrease)
Interest expense	Interest expense			$	(240)	$	(259)		(7)	%		Interest expense	$	(231)	$	(243)	(5)	%		$	(701)	$	(745)	(6)	%
Interest income	Interest income			$	21	$	13		62	%		Interest income	$	33	$	11	200	%		$	73	$	37	97	%

The following table presents our outstanding debt balances, excluding finance leases, and the weighted average interest ~~rate~~rates as of ~~March 31,~~September 30, 2022 and 2021.


		At March 31,											At September 30,
				Weighted Average					Weighted Average						Weighted Average					Weighted Average
		2022		Interest Rate			2021		Interest Rate				2022		Interest Rate			2021		Interest Rate
Total long-term debt		$	16,727		5.09	%	$	17,636		4.93	%
Total notes and debentures												Total notes and debentures	$	15,775		5.13	%	$	17,650		4.93	%
Other bank borrowings	Other bank borrowings	$	65		3.50	%	$	115		3.50	%	Other bank borrowings	$	47		5.80	%	$	35		3.50	%

Net Gains (Losses) from Investments

For the three months ended September 30, 2022, we recorded a loss of $4 million on the sale of a 37.5% interest in The CW, which is principally comprised of transaction costs, and an impairment of an investment of $5 million. For the three months ended September 30, 2021 we recorded a net loss from investments of $5 million, reflecting changes in the fair value of a marketable security, and for the nine month period we recorded a net gain of $47 million, which included a gain of $37 million from the sale of an investment without a readily determinable fair value and a net gain from changes in the fair value of the marketable security discussed above.

Loss on Extinguishment of Debt

For the ~~three~~nine months ended ~~March 31,~~September 30, 2022 and 2021, we recorded losses on extinguishment of debt of ~~$73~~$120 million and $128 million ~~respectively,~~ associated with the early redemption of long-term debt of ~~$1.94~~$2.91 billion and $1.99 billion, respectively.

~~-36-~~

-44-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Other Items, Net

The following table presents the components of Other items, net.


		Three Months Ended March 31,					Three Months Ended September 30,				Nine Months Ended September 30,
			2022		2021				2022		2021		2022		2021
Pension and postretirement benefit costs	Pension and postretirement benefit costs		$	(17)	$	(12)		Pension and postretirement benefit costs	$	(16)	$	(10)	$	(49)	$	(32)
Foreign exchange gain (loss)			1		(8)
Foreign exchange loss								Foreign exchange loss	(21)		(6)		(44)		(14)
Pension settlement charge (a)								Pension settlement charge (a)	—		(10)		—		(10)

Gain from investments			—		20
Other	Other		3		1			Other	1		—		2		1
Other items, net	Other items, net		$	(13)	$	1		Other items, net	$	(36)	$	(26)	$	(91)	$	(55)

(a) Reflects the accelerated recognition of a portion of the unamortized actuarial losses due to the volume of lump sum benefit payments in one of our pension plans.

Provision for Income Taxes

The provision for income taxes represents federal, state and local, and foreign taxes on earnings from continuing operations before income taxes and equity in loss of investee companies. For the three and nine months ended ~~March 31,~~September 30, 2022, we recorded a provision for income taxes of ~~$34~~$101 million and $264 million, reflecting an effective income tax ~~rate~~rates of ~~7.2%.~~31.3% and 20.1%, respectively. Included in the provision for income taxes for the third quarter of 2022 is a net discrete tax provision of $9 million, which primarily reflects discrete tax provisions realized in connection with the filing of our tax returns in international jurisdictions and from the transfer of subsidiaries in connection with a reorganization of our international operations. These items, together with a net tax benefit of $29 million on other items identified as affecting the comparability of our results during the period (which include charges for restructuring and other corporate matters, and a gain on a disposition) increased our effective income tax rate by 5.0 percentage points. The tax provision for the nine months ended September 30, 2022 included a net discrete tax benefit of ~~$78~~$72 million primarily resulting from the transfer of intangible assets between our subsidiaries in connection with a reorganization of our international operations. This item, together with a net tax benefit of ~~$25~~$77 million on other items identified as affecting the comparability of our results during the nine-month period (which include charges for restructuring and other corporate matters, a loss on extinguishment of debt, and gains on dispositions) decreased our effective income tax rate by 4.8 percentage points.

For the three and nine months ended September 30, 2021, we recorded a provision for income taxes of $120 million and $312 million, reflecting effective income tax rates of 19.5% and 11.2%, respectively. Included in the provision for income taxes for the nine months ended September 30, 2021 are discrete tax benefits of $290 million primarily consisting of a benefit of $260 million to remeasure our UK net deferred income tax asset as a result of the enactment during the second quarter of 2021 of an increase in the UK corporate income tax rate from 19% to 25% beginning April 1, 2023, as well as a net tax benefit in connection with the settlement of income tax audits. For the nine months ended September 30, 2021, these discrete tax benefits, together with a net tax benefit of $14 million on other items identified as affecting the comparability of our results during the period ~~which~~(which include a loss on extinguishment of debt, restructuring and ~~other corporate matters,~~pension settlement charges and net gains ~~on sales, decreased our effective income tax rate by 16.2 percentage points.~~

For the three months ended March 31, 2021, we recorded a provision for income taxes of $226 million, reflecting an effective income tax rate of 19.6%. Included in the provision for income taxes is a discrete tax benefit of $21 million primarily consisting of tax benefits from ~~the resolution of certain state income tax matters~~dispositions and excess tax benefits from the vesting or exercise of stock-based compensation awards. This item, together with a net tax benefit of $25 million on other items identified as affecting the comparability of our results during the period, which include a loss on the extinguishment of debt and a gain from an investment,investments) reduced our effective income tax rate by ~~1.9~~10.5 percentage points.

-45-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Equity in Loss of Investee Companies, Net of Tax

The following table presents equity in loss of investee companies for our equity-method investments.


		Three Months Ended March 31,						Three Months Ended September 30,							Nine Months Ended September 30,
			2022	2021		Increase/(Decrease)					2022		2021		Increase/(Decrease)				2022	2021		Increase/(Decrease)
Equity in loss of investee companies	Equity in loss of investee companies			$	(52)	$	(32)		(63)	%		Equity in loss of investee companies	$	(75)	$	(27)	(178)	%		$	(166)	$	(119)	(39)	%
Tax benefit	Tax benefit			15		14			7			Tax benefit	17		9		89			42		39		8
Equity in loss of investee companies, net of tax	Equity in loss of investee companies, net of tax			$	(37)	$	(18)		(106)	%		Equity in loss of investee companies, net of tax	$	(58)	$	(18)	(222)	%		$	(124)	$	(80)	(55)	%

For the three and nine months ended September 30, 2022, the increase in equity in loss of investee companies, net of tax was driven by our investment in SkyShowtime.

Net Earnings from Discontinued Operations

During the fourth quarter of 2020, we entered into an agreement to sell our publishing business, Simon & Schuster, to Penguin Random House LLC (“Penguin Random House”), a ~~wholly owned~~wholly-owned subsidiary of Bertelsmann SE & Co. KGaA (“Bertelsmann”) (see Legal Matters). Simon & Schuster has been presented as a discontinued operation in our consolidated financial statements for all periods presented.


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues	$	353	$	321	$	863	$	725
Costs and expenses:
Operating	198		182		483		429
Selling, general and administrative	45		38		130		114
Restructuring charges	2		1		2		1
Total costs and expenses (a)	245		221		615		544
Operating income	108		100		248		181
Other items, net	(3)		(6)		(9)		(8)
Earnings from discontinued operations	105		94		239		173
Income tax provision (b)	(27)		(21)		(58)		(47)
Net earnings from discontinued operations, net of tax	$	78	$	73	$	181	$	126

~~-37-~~

-46-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

~~The following table sets forth details of net earnings from discontinued operations for the three months ended March 31, 2022 and 2021, which primarily reflects the results of Simon & Schuster.~~

~~(b) The tax provision includes amounts relating to previously disposed businesses of $1 million and $7 million for the three months ended March 31, 2022 and 2021, respectively.~~

Net Earnings from Continuing Operations Attributable to Paramount and Diluted EPS from Continuing Operations Attributable to Paramount


		Three Months Ended March 31,						Three Months Ended September 30,							Nine Months Ended September 30,
			2022	2021		Increase/(Decrease)					2022		2021		Increase/(Decrease)				2022	2021		Increase/(Decrease)
Net earnings from continuing operations attributable to Paramount	Net earnings from continuing operations attributable to Paramount			$	391	$	899		(57)	%		Net earnings from continuing operations attributable to Paramount	$	153	$	465	(67)	%		$	902	$	2,359	(62)	%
Diluted EPS from continuing operations attributable to Paramount	Diluted EPS from continuing operations attributable to Paramount			$	.58	$	1.42		(59)	%		Diluted EPS from continuing operations attributable to Paramount	$	.21	$	.69	(70)	%		$	1.32	$	3.62	(64)	%

For the three and nine months ended ~~March 31,~~September 30, 2022, net earnings from continuing operations attributable to Paramount decreased 67% and 62%, respectively, and diluted EPS from continuing operations decreased ~~57%~~70% and ~~59%~~64%, respectively, driven by the decrease in operating income ~~partially offset by higher~~as well as lower discrete tax ~~benefits. Additionally, diluted EPS was impacted by~~benefits in the ~~March 2021 issuance of 20 million shares of our Class B Common Stock and 10 million shares of Mandatory Convertible Preferred Stock, which negatively impacted the EPS comparison by $.03.~~

~~-38-~~

nine-month period.

~~Management’s Discussion and Analysis of~~

~~Results of Operations and Financial Condition (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

Segment Results of Operations

We present operating income excluding depreciation and amortization, stock-based compensation, costs for restructuring and other corporate matters and net gain on ~~sales,~~dispositions, each where applicable (“Adjusted OIBDA”), as the primary measure of profit and loss for our operating segments in accordance with Financial Accounting Standards Board guidance for segment reporting. We believe the presentation of Adjusted OIBDA is relevant and useful for investors because it allows investors to view segment performance in a manner similar to the primary method used by our management and enhances their ability to understand our operating performance. Stock-based compensation is excluded from our segment measure of profit and loss because it is set and approved by our Board of Directors in consultation with corporate executive management. Stock-based compensation is included as a component of our consolidated Adjusted OIBDA. The reconciliation of Adjusted OIBDA to our consolidated net earnings is presented in Note 13 to the consolidated financial statements.

Beginning in 2022, primarily as a result of our increased strategic focus on our direct-to-consumer businesses, we made certain changes to how we manage our businesses and allocate resources that resulted in a change to our operating segments. Our management structure has been reorganized to focus on managing our business as the combination of three parts: a traditional media business, a portfolio of global ~~direct-to-consumer streaming~~DTC services, and a film studio. Accordingly, beginning in the first quarter of 2022, and for all periods presented we are reporting results based on the following segments:

•TV Media—Our TV Media segment consists of our domestic and international broadcast networks, including the CBS Television Network, Network 10, Channel 5, Telefe and Chilevisión; our premium and basic cable networks, including Showtime, BET, Nickelodeon, MTV, Comedy Central, Paramount Network, Smithsonian Channel, international extensions of these brands, and CBS Sports Network; our television production operations, including CBS Studios, Paramount Television Studios and CBS Media Ventures, which primarily produces or distributes first-run syndicated programming; and our owned broadcast television stations, CBS Stations.

•Direct-to-Consumer—Our Direct-to-Consumer segment consists of our portfolio of pay, free and premium global DTC services, including Paramount+, Pluto TV, Showtime Networks’ premium subscription streaming service (“Showtime OTT”), BET+ and Noggin.

•Filmed Entertainment—Our Filmed Entertainment segment consists of Paramount Pictures, Paramount Players, Paramount Animation, Nickelodeon Studio, and Miramax.

~~-39-~~-47-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Three Months Ended March 31,
% of Total
Revenues % of Total
Revenues Increase/(Decrease)
2022 2021 $ %
Revenues:
TV Media $ 5,645 77 % $ 5,993 81 % $ (348) (6) %
Direct-to-Consumer 1,089 15 598 8 491 82
Filmed Entertainment 624 8 860 12 (236) (27)
Eliminations (30) — (39) (1) 9 23
Total Revenues $ 7,328 100 % $ 7,412 100 % $ (84) (1) %
Three Months Ended September 30, 2022 and 2021

Three Months Ended March 31,
Increase/(Decrease)
2022 2021 $ %
Adjusted OIBDA:
TV Media $ 1,544 $ 1,765 $ (221) (13) %
Direct-to-Consumer (456) (149) (307) (206)
Filmed Entertainment (37) 179 (216) n/m
Corporate/Eliminations (104) (116) 12 10
Stock-based compensation (34) (52) 18 35
Total Adjusted OIBDA 913 1,627 (714) (44)
Depreciation and amortization (96) (99) 3 3
Restructuring and other corporate matters (57) — (57) n/m
Gain on sales 15 — 15 n/m
Total Operating Income $ 775 $ 1,528 $ (753) (49) %


	Three Months Ended September 30,
			% of Total Revenues					% of Total Revenues			Increase/(Decrease)
	2022					2021					$		%
Revenues:
TV Media	$	4,948		72	%	$	5,220		79	%	$	(272)	(5)	%
Direct-to-Consumer	1,226			18		890			13		336		38
Filmed Entertainment	783			11		530			8		253		48
Eliminations	(41)			(1)		(30)			—		(11)		(37)
Total Revenues	$	6,916		100	%	$	6,610		100	%	$	306	5	%


	Three Months Ended September 30,
					Increase/(Decrease)
	2022		2021		$		%
Adjusted OIBDA:
TV Media	$	1,231	$	1,385	$	(154)	(11)	%
Direct-to-Consumer	(343)		(198)		(145)		(73)
Filmed Entertainment	41		(24)		65		n/m
Corporate/Eliminations	(104)		(111)		7		6
Stock-based compensation (a)	(39)		(32)		(7)		(22)
Total Adjusted OIBDA	786		1,020		(234)		(23)
Depreciation and amortization	(92)		(95)		3		3
Restructuring and other corporate matters	(169)		(46)		(123)		(267)

Net gain on dispositions	41		—		41		n/m
Total Operating Income	$	566	$	879	$	(313)	(36)	%

n/m - not meaningful

(a) Included in restructuring and other corporate matters is stock-based compensation expense of $11 million and $21 million for the three months ended September 2022 and 2021, respectively.

~~TV Media~~

Three Months Ended March 31,
Increase/(Decrease)
TV Media 2022 2021 $ %
Advertising
$ 2,521 $ 2,888 $ (367) (13) %
Affiliate and subscription 2,098 2,083 15 1
Licensing and other 1,026 1,022 4 —
Revenues $ 5,645 $ 5,993 $ (348) (6) %
Adjusted OIBDA $ 1,544 $ 1,765 $ (221) (13) %
Nine Months Ended September 30, 2022 and 2021


	Nine Months Ended September 30,
			% of Total Revenues					% of Total Revenues			Increase/(Decrease)
	2022					2021					$		%
Revenues:
TV Media	$	15,849		72	%	$	16,432		80	%	$	(583)	(4)	%
Direct-to-Consumer	3,508			16		2,255			11		1,253		56
Filmed Entertainment	2,770			12		1,993			9		777		39
Eliminations	(104)			—		(94)			—		(10)		(11)
Total Revenues	$	22,023		100	%	$	20,586		100	%	$	1,437	7	%

-48-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)


	Nine Months Ended September 30,
					Increase/(Decrease)
	2022		2021		$		%
Adjusted OIBDA:
TV Media	$	4,155	$	4,654	$	(499)	(11)	%
Direct-to-Consumer	(1,244)		(490)		(754)		(154)
Filmed Entertainment	185		207		(22)		(11)
Corporate/Eliminations	(320)		(351)		31		9
Stock-based compensation (a)	(114)		(133)		19		14
Total Adjusted OIBDA	2,662		3,887		(1,225)		(32)
Depreciation and amortization	(282)		(289)		7		2
Restructuring and other corporate matters	(276)		(81)		(195)		(241)

Net gain on dispositions	56		116		(60)		(52)
Total Operating Income	$	2,160	$	3,633	$	(1,473)	(41)	%

(a) Included in restructuring and other corporate matters is stock-based compensation expense of $13 million and $21 million for the nine months ended September 2022 and 2021, respectively.

TV Media

Three Months Ended September 30, 2022 and 2021


	Three Months Ended September 30,
					Increase/(Decrease)
TV Media	2022		2021		$		%
Advertising	$	1,973	$	2,039	$	(66)	(3)	%
Affiliate and subscription	2,000		2,108		(108)		(5)
Licensing and other	975		1,073		(98)		(9)
Revenues	$	4,948	$	5,220	$	(272)	(5)	%

Adjusted OIBDA	$	1,231	$	1,385	$	(154)	(11)	%

Revenues

For the three months ended ~~March 31,~~September 30, 2022, revenues decreased 6%5%.

Advertising

The 3% decrease in advertising revenues reflects lower domestic and international advertising revenues. The decrease in domestic advertising revenues is the result of lower impressions as pricing only partially offset the decline, reflecting softness in the scatter market. Higher political advertising sales also partially offset the decline. The decrease in international advertising revenues was driven by unfavorable foreign exchange rate changes, partially offset by the benefit from the acquisition of Chilevisión in the third quarter of 2021. The foreign exchange rate changes negatively impacted the total advertising revenue comparison by 3 percentage points.

Affiliate and Subscription

The 5% decrease in affiliate and subscription revenues reflects lower domestic and international affiliate revenues. The decrease in domestic affiliate revenues was driven by lower revenues for our pay television networks, reflecting a decline in subscribers, partially offset by rate increases and growth in reverse compensation. The decrease in international affiliate revenues was driven by the restructuring of certain affiliate agreements, resulting in a shift of revenue from our pay television services to our DTC services; unfavorable foreign exchange rate changes, which negatively impacted the total affiliate and subscription revenue comparison by 1 percentage point;

-49-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

and the absence of revenues in Russia, where we suspended our operations following Russia’s invasion of Ukraine. Lower revenues from pay-per-view boxing events also contributed to the decline.

Licensing and Other

Licensing and other revenues decreased 9%, primarily reflecting lower domestic licensing in the secondary market, driven by the comparison against several significant licensing arrangements in the prior-year period, including for NCIS and Bull.

Adjusted OIBDA

Adjusted OIBDA decreased 11%, driven by ~~an 8-percentage point unfavorable impact~~the decline in affiliate revenues and lower profits from content licensing.

Nine Months Ended September 30, 2022 and 2021


	Nine Months Ended September 30,
					Increase/(Decrease)
TV Media	2022		2021		$		%
Advertising	$	6,668	$	7,230	$	(562)	(8)	%
Affiliate and subscription	6,156		6,303		(147)		(2)
Licensing and other	3,025		2,899		126		4
Revenues	$	15,849	$	16,432	$	(583)	(4)	%

Adjusted OIBDA	$	4,155	$	4,654	$	(499)	(11)	%

Revenues

For the nine months ended September 30, 2022, revenues decreased 4%, primarily reflecting lower advertising revenues, driven by the comparison against CBS’ broadcast of the Super Bowl in the first quarterof ~~2021.~~2021, which negatively impacted the total revenue comparison by 3 percentage points. The decline also reflects lower affiliate revenues, partially offset by higher licensing revenues.

Advertising

The ~~13%~~8% decrease in advertising revenues was driven by the rotational nature of the rights to broadcast the Super Bowl, which aired on CBS in 2021 and another network in 2022, resulting in a negative impact on the advertising revenue comparison of ~~17-percentage~~6 percentage points. ~~Additionally,~~The decline also reflects lower impressions at our domestic networks and unfavorable foreign exchange rate changes, partially offset by higher pricing and political advertising sales as well as the benefit from the acquisition of Chilevisión in the third quarter of 2021. The foreign exchange rate changes negatively impacted the advertising revenue comparison by 2 percentage points.

Affiliate and Subscription

The 2% decrease in affiliate and subscription revenues ~~benefited from an increase in pricing globally, which~~ was ~~largely offset~~driven by lower international affiliate revenues, including the impact from the previously-mentioned restructuring of certain affiliate agreements. The decline also reflects lower ~~linear impressions for~~domestic affiliate revenues, driven by a decline in MVPD subscribers, partially offset by rate increases from MVPDs and vMVPDs, growth in reverse compensation, and the launch of our ~~domestic networks.~~basic cable networks on a vMVPD in April 2021.

~~-40-~~-50-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

~~Affiliate and Subscription~~

Affiliate and subscription revenues grew 1%, as the benefits from rate increases from multichannel video programming distributors (“MVPDs”) and third-party live television streaming services (“virtual MVPDs” or “vMVPDs”), growth from station affiliates, and the launch of our basic cable networks on a vMVPD in April 2021, were substantially offset by the impact from MVPD subscriber declines.

Licensing and Other

Licensing and other revenues ~~were substantially flat at $1.03 billion~~increased 4%, reflecting higher international licensing and a higher volume of content produced for third parties, partially offset by lower domestic licensing in the ~~three months ended March 31, 2022.~~secondary market.

Adjusted OIBDA

Adjusted OIBDA decreased ~~13%~~11%, primarily reflecting the benefit to the prior-year period from the broadcast of the Super Bowl as well as the decline in affiliate revenues and higher costs associated with ~~more original programming and other sports broadcasts in 2022.~~the mix of programming.

Direct-to-Consumer

Three Months Ended March 31,
Direct-to-Consumer 2022 2021 Increase/(Decrease)
Advertising $ 347 $ 218 $ 129 59 %
Subscription 742 380 362 95
Revenues $ 1,089 $ 598 $ 491 82 %
Adjusted OIBDA $ (456) $ (149) $ (307) (206) %
Global DTC Subscribers (a)
62.4 35.9 26.5 74 %
Three Months Ended March 31,
2022 2021 Increase/(Decrease)
Paramount+ (Global)
Subscribers (a)
39.6 16.5 23.1 140 %
Revenues $ 585 $ 236 $ 349 148 %
Pluto TV (Global)
MAUs (b)
67.5 49.5 18.0 36 %
Revenues $ 253 $ 167 $ 86 51 %
Three Months Ended September 30, 2022 and 2021


Direct-to-Consumer	Three Months Ended September 30,
(Subscribers in millions)	2022		2021		Increase/(Decrease)
Advertising	$	363	$	348	$	15	4	%
Subscription	863		542		321		59
Revenues	$	1,226	$	890	$	336	38	%

Adjusted OIBDA	$	(343)	$	(198)	$	(145)	(73)	%

Global DTC Subscribers (a)	66.5		46.7		19.8		42	%

	Three Months Ended September 30,
(Subscribers in millions)	2022		2021		Increase/(Decrease)
Paramount+ (Global)
Subscribers (a)	46.0		25.5		20.5		80	%

Revenues	$	708	$	363	$	345	95	%

Pluto TV (Global)
MAUs (b)	72.0		54.4		17.6		32	%

Revenues	$	268	$	289	$	(21)	(7)	%

(a) Direct-to-consumer streaming subscribers (“DTC subscribers”) include customers with access to our domestic or international DTC services, either directly through our owned and operated apps and websites, or through third-party distributors. Our subscribers include paid subscriptions and those customers registered in a free trial, and subscribers are considered unique to each of our services, whether offered individually or as part of a bundle. For the periods above subscriber counts reflect the number of subscribers as of the applicable period-end date. Global DTC subscribers include subscribers for Paramount+, Showtime OTT and all other subscription DTC ~~subscription streaming~~ services.

(b) The Monthly Active Users (“MAUs”) count reflects the number of unique devices interacting with the Pluto TV service in a calendar month, and for the periods above reflects the MAU count for the last month of the applicable period.

Revenues

For the three months ended ~~March 31,~~September 30, 2022, the ~~82%~~38% increase in revenues ~~for our DTC services~~ was driven by growth ~~for~~from Paramount+ ~~and Pluto TV.~~.

~~-41-~~-51-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Advertising

The ~~59%~~4% increase in advertising revenues ~~reflects growth from Pluto TV and Paramount+, which~~ was driven by ~~increases in pricing and~~higher impressions, ~~including from~~reflecting the benefit ~~of MAU~~from growth ~~for Pluto TV and subscriber growth for~~in Paramount+. subscribers. Pluto TV global MAUs were ~~67.5~~72.0 million for ~~March~~September 2022, reflecting growth of ~~18.0~~17.6 million, or ~~36%~~32%, from ~~49.5~~54.4 million for ~~March~~September 2021, and ~~3.1~~2.4 million, or 5%3%, from ~~64.4~~69.6 million for ~~December 2021.~~June 2022.

Subscription

The ~~95%~~59% increase in subscription revenues was driven by growth from Paramount+, BET+ and Showtime OTT. Global DTC subscribers grew ~~26.5~~19.8 million, or ~~74%~~42%, compared with ~~March 31,~~September 30, 2021, led by an increase of ~~23.1~~20.5 million, or ~~140%~~80% for Paramount+, ~~including~~reflecting significant growth in U.S. subscribers and the impact from launches in international markets. During the quarter, global DTC subscribers increased 2.8 million, or 4%, to 66.5 million at September 30, 2022 from 63.7 million at June 30, 2022, and Paramount+ subscribers grew ~~6.8~~2.7 million, or ~~21%~~6%, to ~~39.6~~46.0 million, ~~at March 31, 2022 from 32.8 million at December 31, 2021,~~ driven by ~~new original scripted dramas, including~~ ~~1883~~ ~~and~~ ~~Halo; film releases, including~~ ~~Scream~~ ~~and~~ ~~Jackass Forever; NFL playoff games; and~~ launches in international markets as well as growth in U.S. subscribers, reflecting the benefit from the start of the NFL season and the UEFA Champions League, as well as the launch on Walmart+. The subscriber growth from the prior year and in the ~~quarter.~~quarter was impacted by the removal of 1.9 million Paramount+ subscribers following the September 2022 launch of the SkyShowtime streaming service in the Nordics, where it replaced Paramount+ in the market. Excluding the impact of the removal of subscribers in the Nordics, global DTC subscribers increased 4.7 million and Paramount+ subscribers increased 4.6 million during the third quarter of 2022. Additionally, the year-over-year comparison was impacted by the removal of subscribers in Russia, where we suspended our operations following Russia’s invasion of Ukraine. This resulted in the removal of 3.9 million global DTC subscribers during the second quarter of 2022, including 1.2 million for Paramount+.

Adjusted OIBDA

Adjusted OIBDA decreased ~~$307~~$145 million, as the revenue growth was more than offset by higher costs to support growth in our DTC services including content, marketing, distribution, employee and technology costs.

Nine Months Ended September 30, 2022 and 2021


	Nine Months Ended September 30,
					Increase/(Decrease)
Direct-to-Consumer	2022		2021		$		%
Advertising	$	1,073	$	857	$	216	25	%
Subscription	2,435		1,398		1,037		74
Revenues	$	3,508	$	2,255	$	1,253	56	%

Adjusted OIBDA	$	(1,244)	$	(490)	$	(754)	(154)	%

	Nine Months Ended September 30,
					Increase/(Decrease)
	2022		2021		$		%
Revenues
Paramount+ (Global)	$	1,965	$	904	$	1,061	117	%

Pluto TV (Global)	$	786	$	697	$	89	13	%

Revenues

For the nine months ended September 30, 2022, the 56% increase in revenues was primarily driven by growth from Paramount+, Pluto TV and Showtime OTT.

-52-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Advertising

The 25% increase in advertising revenues was driven by increases in pricing and impressions, benefiting from subscriber growth for Paramount+ and MAU growth for Pluto TV.

Subscription

The 74% increase in subscription revenues was primarily driven by growth from Paramount+ and Showtime OTT.

Adjusted OIBDA

Adjusted OIBDA decreased $754 million, as the revenue growth was more than offset by higher costs to support growth in our DTC services including content, marketing, distribution, employee and technology costs.

Filmed Entertainment

Three Months Ended March 31,
Increase/(Decrease)
Filmed Entertainment 2022 2021 $ %
Advertising (a)
$ 2 $ 6 $ (4) (67) %
Theatrical 131 1 130 n/m
Licensing and other 491 853 (362) (42)
Revenues $ 624 $ 860 $ (236) (27) %
Adjusted OIBDA $ (37) $ 179 $ (216) n/m
Three Months Ended September 30, 2022 and 2021


	Three Months Ended September 30,
					Increase/(Decrease)
Filmed Entertainment	2022		2021		$		%
Advertising (a)	$	3	$	2	$	1	50	%
Theatrical	231		67		164		245
Licensing and other	549		461		88		19
Revenues	$	783	$	530	$	253	48	%

Adjusted OIBDA	$	41	$	(24)	$	65	n/m

n/m - not meaningful

(a) ~~Reflects~~Primarily reflects advertising revenues earned from the use of Filmed Entertainment content on third party digital platforms.

~~n/m - not meaningful~~

Revenues

For the three months ended ~~March 31,~~September 30, 2022, the ~~27% decrease~~48% increase in revenues was driven by ~~lower licensing revenues, partially offset by revenues from current quarter theatrical releases.~~Top Gun: Maverick.

Theatrical

~~The increase in~~Theatrical revenues increased $164 million, primarily reflecting the continued success of the second quarter 2022 theatrical ~~revenues reflects the releases of~~release ~~Scream, Jackass Foreve~~Top Gun: Maverickr,~~and~~ ~~The Lost City~~ ~~in the current year, while the prior-year quarter was impacted by the closure or reduced capacity of movie theaters in response to COVID-19.~~.

Licensing and Other

Licensing and other revenues increased 19% reflecting the licensing of recent theatrical releases, driven by the success of Top Gun: Maverick in the digital home entertainment market.

Adjusted OIBDA

Adjusted OIBDA increased $65 million, primarily driven by the strong performance of Top Gun: Maverick.

~~-42-~~

-53-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Nine Months Ended September 30, 2022 and 2021


	Nine Months Ended September 30,
					Increase/(Decrease)
Filmed Entertainment	2022		2021		$		%
Advertising (a)	$	17	$	14	$	3	21	%
Theatrical	1,126		202		924		457
Licensing and other	1,627		1,777		(150)		(8)
Revenues	$	2,770	$	1,993	$	777	39	%

Adjusted OIBDA	$	185	$	207	$	(22)	(11)	%

(a) Primarily reflects advertising revenues earned from the use of Filmed Entertainment content on third party digital platforms as well as sponsorships.

Revenues

For the nine months ended September 30, 2022, the 39% increase in revenues reflects higher theatrical revenues, partially offset by lower licensing revenues.

Theatrical

The $924 million increase in theatrical revenues reflects the success of our current year releases, driven by Top Gun: Maverick, as well as Sonic the Hedgehog 2 and The Lost City. Theatrical releases in the comparable prior-year period included A Quiet Place Part II. There were no theatrical releases in the first quarter of 2021 as movie theaters continued to be impacted by closures or reduced capacity in response to COVID-19.

Licensing and Other

The ~~42%~~8% decrease in licensing and other revenues primarily reflects lower revenues from the licensing of library titles and the benefit to the prior-year period from the licensing of Coming 2 America and Tom Clancy’s Without Remorse in the prior-year quarter, as well as lower licensing of film library titles driven by the timing of availabilities and a lower volume of licensing of television programming in 2022. These declines were, partially offset by higher home entertainment revenues ~~in the~~from current year ~~from the licensing of our 2021~~ theatrical ~~slate, including~~ ~~Clifford the Big Red Dog~~ ~~and~~ ~~Snake Eyes: GI Joe Origins~~.releases.

Adjusted OIBDA

Adjusted OIBDA decreased ~~$216 million,~~11%, mainly reflecting lower ~~revenues of $236 million with costs only decreasing by $20 million, as lower content costs resulting~~profits from the ~~decline in revenues were substantially~~licensing of library titles, partially offset by ~~distribution costs in 2022 associated with theatrical~~higher profits from current year releases.

Fluctuations in results for the Filmed Entertainment segment may occur as a result of the timing of the recognition of distribution costs, including print and advertising, which are generally incurred before and throughout the theatrical release of a film, while the revenues for the respective film are recognized as earned through the film’s theatrical exhibition and distribution to other platforms.

Liquidity and Capital Resources

Sources and Uses of Cash

We project anticipated cash requirements for our operating, investing and financing needs as well as cash flows expected to be generated and available to meet these needs. Our operating needs include, among other items, expenditures for content for our broadcast and cable networks and ~~streaming~~DTC services, including television and film programming, sports rights, and talent contracts, as well as advertising and marketing costs to promote our content and platforms; payments for leases, interest, and income taxes; and pension funding obligations. Our investing and financing spending includes capital expenditures; acquisitions; funding relating to new and existing investments,

-54-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

including ~~future~~ funding of our streaming joint venture with Comcast, SkyShowtime, under which both parent companies have committed to support initial ~~operations, beginning in 2022;~~operations; share repurchases; dividends and principal payments on our outstanding indebtedness. We believe that our operating cash flows, cash and cash equivalents, borrowing capacity under our $3.50 billion Credit Facility described below, as well as access to capital markets are sufficient to fund our operating, investing and financing requirements for the next twelve months.

Our funding for short-term and long-term obligations, including our long-term debt obligations due over the next five years, which were ~~$3.39~~$2.35 billion as of ~~March 31, 2022, and $2.42 billion after the redemption of $970 million of senior notes in April~~September 30, 2022, as well as our other long term commitments, will come primarily from cash flows from operating activities, proceeds from non-core asset sales, including the planned sale of Simon & Schuster described below, and our ability to refinance our debt. Any additional cash funding requirements are financed with short-term borrowings, including commercial paper, and long-term debt. To the extent that commercial paper is not available to us, the Credit Facility provides sufficient capacity to satisfy short-term borrowing needs. We routinely assess our capital structure and opportunistically enter into transactions to manage our outstanding maturities, which could result in a charge from the early extinguishment of debt.

During 2020, we entered into an agreement to sell Simon & Schuster for $2.175 billion in cash, and expect to use proceeds from the sale to invest in our strategic growth priorities, including in streaming, as well as to fund dividends and pay down debt. On November 2, 2021, the U.S. Department of Justice filed suit to block the sale. The trial was conducted in August 2022, and in October 2022, the Court issued a decision to block the consummation of the transaction. We are discussing next steps with Bertelsmann and Penguin Random House, including seeking an expedited appeal (see Legal Matters). The purchase agreement contains commitments on the part of the purchaser to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also

~~-43-~~

~~Management’s Discussion and Analysis of~~

~~Results of Operations and Financial Condition (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

provides for a $200 million termination fee payable to us in certain circumstances in the event the transaction does not close for regulatory ~~reasons (see~~ ~~Legal Matters~~).reasons.

Our access to capital markets can be impacted by factors outside our control, including economic conditions; however, we believe that our strong balance sheet and cash flows, ~~and balance sheet,~~ our credit facility and our credit rating will provide us with adequate access to funding for our expected cash needs. The cost of any new borrowings ~~are~~is affected by market conditions and short and long-term debt ratings assigned by independent rating agencies, and there can be no assurance that we will be able to access capital markets on terms and conditions that will be favorable to us.

-55-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Cash Flows

The changes in cash, cash equivalents and restricted cash were as follows:


		Three Months Ended March 31,								Nine Months Ended September 30,
		2022		2021		Increase/(Decrease)				2022		2021		Increase/(Decrease)
Net cash flow provided by operating activities from:	Net cash flow provided by operating activities from:								Net cash flow provided by operating activities from:
Continuing operations	Continuing operations	$	295	$	1,651		$	(1,356)	Continuing operations	$	219	$	1,528		$	(1,309)
Discontinued operations	Discontinued operations	102		72			30		Discontinued operations	107		124			(17)
Net cash flow provided by operating activities	Net cash flow provided by operating activities	397		1,723			(1,326)		Net cash flow provided by operating activities	326		1,652			(1,326)

Net cash flow (used for) provided by investing activities		(80)		86			(166)
Net cash flow used for investing activities from:									Net cash flow used for investing activities from:
Continuing operations									Continuing operations	(380)		(13)			(367)
Discontinued operations									Discontinued operations	(3)		(3)			—
Net cash flow used for investing activities									Net cash flow used for investing activities	(383)		(16)			(367)
Net cash flow (used for) provided by financing activities	Net cash flow (used for) provided by financing activities	(1,271)		723			(1,994)		Net cash flow (used for) provided by financing activities	(2,681)		101			(2,782)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(11)		(19)			8		Effect of exchange rate changes on cash and cash equivalents	(146)		(30)			(116)
Net (decrease) increase in cash, cash equivalents and restricted cash	Net (decrease) increase in cash, cash equivalents and restricted cash	$	(965)	$	2,513		$	(3,478)	Net (decrease) increase in cash, cash equivalents and restricted cash	$	(2,884)	$	1,707		$	(4,591)

Operating Activities. For the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the decrease in cash flow provided by operating activities from continuing operations was mainly driven by anour increased investment in our DTC services, including spending for content, marketing and distribution ~~costs, as well as~~costs.

Cash flow provided by operating activities for the ~~timing of incentive compensation payments~~nine months ended September 30, 2022 and ~~content spending for our broadcast and cable networks. In addition,~~2021 included payments for restructuring, ~~activities were $44~~merger-related costs and transformation initiatives of $133 million and ~~$84~~$241 million, ~~for~~respectively. Since the ~~three months ended March 31,~~Merger, we have invested in a number of transformation initiatives. Initially, these were undertaken to realize synergies related to the Merger. Beginning in 2022, our transformation initiatives are related to future-state technology, including the unification and ~~2021, respectively.~~evolution of systems and platforms, and migration to the cloud. In addition, we are investing in future-state workspaces, including adapting our facilities to accommodate our hybrid and agile work model.

Cash flow provided by operating activities from discontinued operations reflects the operating activities of Simon & Schuster.

~~-44-~~-56-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Investing Activities


		Three Months Ended March 31,							Nine Months Ended September 30,
		2022			2021				2022			2021
Investments (a)	Investments (a)		$	(59)		$	(40)	Investments (a)		$	(189)		$	(147)
Capital expenditures(b)	Capital expenditures(b)		(52)			(62)		Capital expenditures(b)		(228)			(231)
Proceeds from dispositions (b)			31			213
Acquisitions, net of cash acquired (c)								Acquisitions, net of cash acquired (c)		—			(27)
Proceeds from dispositions (d)								Proceeds from dispositions (d)		38			418
Other investing activities	Other investing activities		—			(25)		Other investing activities		(1)			(26)

Net cash flow (used for) provided by investing activities			$	(80)		$	86
Net cash flow used for investing activities from continuing operations								Net cash flow used for investing activities from continuing operations		(380)			(13)
Net cash flow used for investing activities from discontinued operations								Net cash flow used for investing activities from discontinued operations		(3)			(3)
Net cash flow used for investing activities								Net cash flow used for investing activities		$	(383)		$	(16)

(a) ~~Primarily includes our~~2022 and 2021 primarily include investment in The CW. 2022 also includes investment in SkyShowtime.

(b) Includes payments associated with the implementation of our transformation initiatives of $34 million and $56 million in 2022 and 2021, respectively.

(d) 2022 primarily reflects the disposition of international intangible assets. 2021 primarily reflects proceeds received from the sale of our investment in fuboTV Inc. during the fourth quarter of ~~2020.~~2020, as well as proceeds received from the sales of a noncore trademark licensing operation and investments.

Financing Activities


		Three Months Ended March 31,							Nine Months Ended September 30,
		2022			2021				2022			2021

Proceeds from issuance of long-term debt			$	1,028		$	25
Repayment of long-term debt			(2,009)			(2,117)
Proceeds from issuance of debt								Proceeds from issuance of debt		$	1,114		$	48
Repayment of debt								Repayment of debt		(3,123)			(2,220)
Dividends paid on preferred stock	Dividends paid on preferred stock		(14)			—		Dividends paid on preferred stock		(43)			(15)
Dividends paid on common stock	Dividends paid on common stock		(158)			(151)		Dividends paid on common stock		(471)			(458)
Proceeds from issuance of preferred stock	Proceeds from issuance of preferred stock		—			983		Proceeds from issuance of preferred stock		—			983
Proceeds from issuance of common stock	Proceeds from issuance of common stock		—			1,672		Proceeds from issuance of common stock		—			1,672

Payment of payroll taxes in lieu of issuing shares for stock-based compensation	Payment of payroll taxes in lieu of issuing shares for stock-based compensation		(9)			(35)		Payment of payroll taxes in lieu of issuing shares for stock-based compensation		(14)			(55)
Proceeds from exercise of stock options	Proceeds from exercise of stock options		—			408		Proceeds from exercise of stock options		—			408
Payments to noncontrolling interests	Payments to noncontrolling interests		(77)			(27)		Payments to noncontrolling interests		(106)			(215)
Other financing activities	Other financing activities		(32)			(35)		Other financing activities		(38)			(47)
Net cash flow (used for) provided by financing activities	Net cash flow (used for) provided by financing activities		$	(1,271)		$	723	Net cash flow (used for) provided by financing activities		$	(2,681)		$	101

Dividends

During each of the ~~first quarter~~three quarters of 2022, we declared a quarterly cash dividend of $1.4375 per share on our Mandatory Convertible Preferred Stock, resulting in total dividends of $14.4 ~~million. During~~million for the three months ended ~~March 31,~~September 30, 2022, and $43.1 million for the nine months ended September 30, 2022. During the second and third quarters of 2021, we ~~recorded~~declared quarterly cash dividends ~~of $1 million~~ on our Mandatory Convertible Preferred Stock ~~representing dividends accumulated from~~of $1.5493 per share and $1.4375 per share, respectively. The dividend period for the ~~issuance on March 26 through March 31, 2021.~~dividend declared during the second

~~-45-~~-57-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

quarter was from March 26, 2021 through July 1, 2021. Accordingly, we recorded dividends on the Mandatory Convertible Preferred Stock of $14.4 million and $29.9 million during the three and nine months ended September 30, 2021, respectively.

Capital Structure

The following table sets forth our debt.


		At			At				At			At
		March 31, 2022			December 31, 2021				September 30, 2022			December 31, 2021

Senior debt (2.90%-7.875% due 2023-2050)	Senior debt (2.90%-7.875% due 2023-2050)		$	15,095		$	16,501	Senior debt (2.90%-7.875% due 2023-2050)		$	14,143		$	16,501
Junior debt (5.875%-6.375% due 2057 and 2062)	Junior debt (5.875%-6.375% due 2057 and 2062)		1,632			1,157		Junior debt (5.875%-6.375% due 2057 and 2062)		1,632			1,157
Other bank borrowings	Other bank borrowings		65			35		Other bank borrowings		47			35
Obligations under finance leases	Obligations under finance leases		20			16		Obligations under finance leases		12			16
Total debt (a)	Total debt (a)		16,812			17,709		Total debt (a)		15,834			17,709

Less current portion of long-term debt			15			11
Less current portion								Less current portion		196			11
Total long-term debt, net of current portion	Total long-term debt, net of current portion		$	16,797		$	17,698	Total long-term debt, net of current portion		$	15,638		$	17,698

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, we redeemed ~~all of our notes due in 2024, which were comprised of $492 million of 3.875%~~ senior notes ~~and $600 million of 3.70% senior notes, and also redeemed $325 million of our 3.50% senior notes due 2025,~~totaling $2.39 billion, prior to maturity, for an aggregate redemption price of ~~$1.48~~$2.49 billion. ~~We also~~Additionally, in February 2022, we redeemed our $520 million of 5.875% junior subordinated debentures due February 2057 at par. These redemptions resulted in a total pre-tax loss on extinguishment of debt of ~~$73 million.~~$120 million for the nine months ended September 30, 2022.

During the ~~three~~nine months ended ~~March 31,~~September 30, 2022, we issued $1.00 billion of 6.375% junior subordinated debentures due 2062. The interest rate on these debentures will reset on March 30, 2027, and every five years thereafter to a fixed rate equal to the 5-year Treasury Rate (as defined pursuant to the terms of the debentures) plus a spread of 3.999% from March 30, 2027, 4.249% from March 30, 2032 and 4.999% from March 30, 2047. These debentures can be called by us at par plus a make whole premium any time before March 30, 2027, or at par on March 30, 2027, or at any interest payment date thereafter.

~~In April 2022, we redeemed the remaining $275 million of our 3.50% senior notes due 2025, and $695 million of our 4.75% senior notes due 2025, for an aggregate redemption price of $1.01 billion.~~

The subordination, interest deferral option and extended term of our junior subordinated debentures provide significant credit protection measures for senior creditors and, as a result of these features, the debentures received a 50% equity credit by Standard & Poor’s Rating Services and Fitch Ratings Inc., and a 25% equity credit by Moody’s Investors Service, Inc.

~~-46-~~-58-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Commercial Paper

At both ~~March 31,~~September 30, 2022 and December 31, 2021, we had no outstanding commercial paper borrowings.

Credit Facility

Other Bank Borrowings

At ~~March 31,~~September 30, 2022 and December 31, 2021, we had bank borrowings under Miramax’s $300 million credit facility, which matures in April 2023, of ~~$65~~$47 million and $35 million, respectively, ~~each~~ with a weighted average interest ~~rate~~rates of 5.80% and 3.50%., respectively.

Guarantees

Letters of Credit and Surety Bonds

CBS Television City

~~-47-~~-59-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Lease Guarantees

Other

Legal Matters

General

Stockholder Matters

Litigation Relating to the Merger

Beginning on February 20, 2020, three purported CBS stockholders filed separate derivative and/or putative class action lawsuits in the Court of Chancery of the State of Delaware. On March 31, 2020, the Court consolidated the three lawsuits and appointed Bucks County Employees’ Retirement Fund and International Union of Operating Engineers of Eastern Pennsylvania and Delaware as co-lead plaintiffs for the consolidated action. On April 14, 2020, the lead plaintiffs filed a Verified Consolidated Class Action and Derivative Complaint (as used in this paragraph, the “Complaint”) against Shari E. Redstone, NAI, Sumner M. Redstone National Amusements Trust, members of the CBS Board of Directors (comprised of Candace K. Beinecke, Barbara M. Byrne, Gary L. Countryman, Brian Goldner, Linda M. Griego, Robert N. Klieger, Martha L. Minow, Susan Schuman, Frederick O. Terrell and Strauss Zelnick), former CBS President and Acting Chief Executive Officer Joseph Ianniello and the Company as nominal defendant. The Complaint alleges breaches of fiduciary duties to CBS stockholders in connection with the negotiation and approval of the Agreement and Plan of ~~merger of Viacom Inc. (“Viacom”) with and into CBS Corporation (“CBS”) (the “Merger”)~~Merger dated as of August 13, 2019, as amended on October 16, 2019 (the “Merger Agreement”). The Complaint also alleges waste and unjust enrichment in connection with Mr. Ianniello’s compensation. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On June 5, 2020, the defendants filed motions to dismiss. On January 27, 2021, the Court dismissed one disclosure claim, while allowing all other claims against the defendants to proceed. Discovery on the ~~surviving claims is~~

~~-48-~~-60-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Beginning on November 25, 2019, four purported Viacom stockholders filed separate putative class action lawsuits in the Court of Chancery of the State of Delaware. On January 23, 2020, the Court consolidated the four lawsuits. On February 6, 2020, the Court appointed California Public Employees’ Retirement System (“CalPERS”) as lead plaintiff for the consolidated action. On February 28, 2020, CalPERS, together with Park Employees’ and Retirement Board Employees’ Annuity and Benefit Fund of Chicago and Louis M. Wilen, filed a First Amended Verified Class Action Complaint (as used in this paragraph, the “Complaint”) against NAI, NAI Entertainment Holdings LLC, Shari E. Redstone, the members of the special transaction committee of the Viacom Board of Directors (comprised of Thomas J. May, Judith A. McHale, Ronald L. Nelson and Nicole Seligman) and our President and Chief Executive Officer and director, Robert M. Bakish. The Complaint alleges breaches of fiduciary duties to Viacom stockholders in connection with the negotiation and approval of the Merger Agreement. The Complaint seeks unspecified damages, costs and expenses, as well as other relief. On May 22, 2020, the defendants filed motions to dismiss. On December 29, 2020, the Court dismissed the claims against Mr. Bakish, while allowing the claims against the remaining defendants to proceed. Discovery on the surviving claims is proceeding. We believe that the remaining claims are without merit and we intend to defend against them vigorously.

Investigation-Related Matters

As announced on August 1, 2018, the CBS Board of Directors retained two law firms to conduct a full investigation of the allegations in press reports about CBS’ former Chairman of the Board, President and Chief Executive Officer, Leslie Moonves, CBS News and cultural issues at CBS. On December 17, 2018, the CBS Board of Directors announced the completion of its investigation, certain findings of the investigation and the CBS Board of Directors’ determination with respect to the termination of Mr. Moonves’ employment. We have received subpoenas or requests for information from the New York County District Attorney’s Office, the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States Securities and Exchange Commission regarding the subject matter of this investigation and related matters, including with respect to CBS’ related public disclosures. We may continue to receive additional related regulatory and investigative inquiries from these and other entities in the future. We are cooperating with these inquiries.

On August 27, 2018 and on October 1, 2018, Gene Samit and John Lantz, respectively, filed putative class action lawsuits in the United States District Court for the Southern District of New York, individually and on behalf of others similarly situated, for claims that are similar to those alleged in the amended complaint described below. On November 6, 2018, the Court entered an order consolidating the two actions. On November 30, 2018, the Court appointed Construction Laborers Pension Trust for Southern California as the lead plaintiff of the consolidated action. On February 11, 2019, the lead plaintiff filed a consolidated amended putative class action complaint against CBS, certain current and former senior executives and members of the CBS Board of Directors. The consolidated action is stated to be on behalf of purchasers of CBS Class A Common Stock and Class B Common Stock between September 26, 2016 and December 4, 2018. This action seeks to recover damages arising during this time period allegedly caused by the defendants’ purported violations of the federal securities laws, including by allegedly making materially false and misleading statements or failing to disclose material information, and seeks costs and expenses as well as remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. On April 12, 2019, the defendants filed motions to dismiss this action, which the Court granted in part and denied in part on January 15, 2020. With the exception of one statement made by Mr. Moonves at an industry event in November 2017, in which he allegedly was acting as the agent of CBS, all claims as to all other allegedly false and misleading statements were dismissed. We ~~have~~ reached an agreement with the plaintiffs to settle the ~~lawsuit.~~lawsuit for $14.75 million, which will be paid by the Company’s insurers. The settlement, which includes no admission of liability or wrongdoing by the Company, was granted preliminary approval by the Court on May 13, 2022 and is subject to final approval.

We also received subpoenas or requests for information from the New York County District Attorney’s Office, the New York City Commission on Human Rights, the New York State Attorney General’s Office and the United States Securities and Exchange Commission regarding the subject matter of the CBS Board of Directors’

~~-49-~~-61-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

~~wrongdoing by the Company, is subject~~investigation and related matters, including with respect to ~~court approval. All amounts payable by the Company under the settlement will be paid by the Company’s insurers.~~

~~Litigation Related to Television Station Owners~~

On September 9, 2019, the Company was added as a defendant in a multi-district putative class action lawsuit filed in the United States District Court for the Northern District of Illinois. The lawsuit was filed by parties that claim to have purchased broadcast television spot advertising beginning on or about January 1, 2014 on television stations owned by one or more of the defendant television station owners and alleges the sharing of allegedly competitively sensitive information among such television stations in alleged violation of the Sherman Antitrust Act. The action, which names the Company among fourteen total defendants, seeks monetary damages, attorneys’ fees, costs and interest as well as injunctions against the allegedly unlawful conduct. On October 8, 2019, the Company and other defendants filed a motion to dismiss the matter, which was denied by the court on November 6, 2020.CBS’ related public disclosures. We have reached an agreement in principle to resolve the matter with the ~~plaintiffs~~Investor Protection Bureau of the New York State Attorney General’s Office. After credits for the settlement amount to ~~settle~~be paid in the ~~lawsuit.~~consolidated federal securities class action discussed above, and certain financial commitments to human resources-related programs made by CBS in connection with an earlier resolution with the Civil Rights Bureau of the New York State Attorney General’s Office, the Company has agreed to make a payment of $7.25 million, which by agreement with the Investor Protection Bureau will be distributed in connection with the federal securities class action settlement discussed above, subject to the court’s approval of the class action settlement. The ~~settlement, which will include~~resolution includes no admission of liability or wrongdoing by the ~~Company, will be subject~~Company. We may continue to ~~court approval.~~receive additional related regulatory and investigative inquiries from these and other entities in the future.

Litigation Related to Stock Offerings

Litigation Related to Television Station Owners

Litigation Related to the Proposed Sale of Simon & Schuster

-62-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Transaction. We are discussing next steps with Bertelsmann and Penguin Random House, including seeking an expedited appeal. The Purchase Agreement contains customary representations and warranties and covenants, including commitments on the part of Penguin Random House to take all necessary steps to obtain any required regulatory approvals and to defend any litigation that would delay or prevent consummation, and also provides for a $200 million termination fee payable to the Company in certain circumstances in the event the Transaction does not close for regulatory reasons. ~~We and the other defendants believe the DOJ’s claims are without merit, and we intend to defend against them vigorously.~~

~~-50-~~

~~Management’s Discussion and Analysis of~~

~~Results of Operations and Financial Condition (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

Claims Related to Former ~~Businesses:~~ Businesses

Asbestos

-63-

Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

Other

~~-51-~~

~~Management’s Discussion and Analysis of~~

~~Results of Operations and Financial Condition (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~

Related Parties

See Note 4 to the consolidated financial statements.

Recently Adopted Accounting Pronouncements

See Note 1 to the consolidated financial statements.

Critical Accounting Policies

See Item 7, Management’s Discussion and Analysis of Results of Operations and Financial Condition in our Annual Report on Form 10-K for the year ended December 31, 2021, for a discussion of our critical accounting policies.

Cautionary Note Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains both historical and forward‑looking statements, including statements related to our future results and performance. All statements that are not statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Similarly, statements that describe our objectives, plans or goals are or may be forward-looking statements. These forward-looking statements reflect our current expectations concerning future results and events; generally can be identified by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “may,” “could,” “estimate” or other similar words or phrases; and involve known and unknown risks, uncertainties and other factors that are difficult to predict and which may cause our actual results, performance or achievements to be different from any future results, performance or achievements expressed or implied by these statements. These risks, uncertainties and other factors include, among others: risks related to our streaming initiatives; changes in consumer behavior, as well as evolving technologies, distribution platforms and packaging; the impact on our advertising revenues as a result of changes in consumer viewership, advertising market conditions and deficiencies in audience measurement; our ability to maintain attractive brands and our reputation, and to offer popular programming and other content; increased costs for content and other rights; competition for talent, content, audiences, subscribers, advertising and distribution; the potential for loss of carriage or other reduction in or the impact of negotiations for the distribution of our content; losses due to asset impairment charges for goodwill, intangible assets, FCC licenses and programming; risks related to our ongoing investments in new businesses, products, services and technologies, through acquisitions and other strategic initiatives; evolving business continuity, cybersecurity, privacy and data protection and similar risks; content infringement; the impact of COVID-19 and other pandemics and measures taken in response thereto; domestic and global political, economic and regulatory factors affecting our businesses generally; liabilities related to discontinued operations and former businesses; the loss of existing or inability to hire new key employees or secure creative talent; strikes and other union activity; potential conflicts of interest arising from our ownership structure with a controlling stockholder; and other factors described in our news releases and filings with the Securities and Exchange Commission, including but not limited to our most recent Annual Report on Form 10-K and reports on Form 10-Q and Form 8-K. There may be additional risks, uncertainties and factors that we do not currently view as

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Management’s Discussion and Analysis of

Results of Operations and Financial Condition (Continued)

(Tabular dollars in millions, except per share amounts)

material or that are not necessarily known. The forward‑looking statements included in this Quarterly Report on Form 10-Q are made only as of the date of this report, and we do not undertake any obligation to publicly update any forward‑looking statements to reflect subsequent events or circumstances.

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~~Management’s Discussion and Analysis of~~

~~Results of Operations and Financial Condition (Continued)~~

~~(Tabular dollars in millions, except per share amounts)~~


Item 3.			Quantitative and Qualitative Disclosures About Market Risk.

There have been no significant changes to market risk since reported in our Annual Report on Form 10-K for the year ended December 31, 2021.


Item 4.			Controls and Procedures.

Our chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended) were effective, based on the evaluation of these controls and procedures required by Rule 13a-15(b) or 15d-15(b) of the Securities Exchange Act of 1934, as amended.

No change in our internal control over financial reporting occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION


Item 1.			Legal Proceedings.

The information set forth in Note 14 to the consolidated financial statements appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q under the caption “Legal Matters” is incorporated by reference herein.


Item 1A.			Risk Factors.

There have been no material changes to risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021.


Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds.

Company Purchases of Equity Securities

In November 2010, we announced that our Board of Directors approved a program to repurchase $1.5 billion of our common stock in open market purchases or other types of transactions (including accelerated stock repurchases or privately negotiated transactions). Since then, various increases totaling $16.4 billion have been approved and announced, including most recently, an increase to the share repurchase program to a total availability of $6.0 billion on July 28, 2016. During the ~~first~~third quarter of 2022, we did not purchase any shares under our publicly announced share repurchase program, which had remaining authorization of $2.36 billion at ~~March 31,~~September 30, 2022.

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Item 6.			Exhibits.


Exhibit No.		Description of Document
~~(10)~~		~~Material Contracts~~
	~~(a)~~	~~Employment Agreement, dated as of March 11, 2022, between Paramount Global and Christa A. D’Alimonte (filed herewith~~).*
	~~(b)~~	~~Employment Agreement, dated as of April 12, 2022, between Paramount Global and DeDe Lea (filed herewith~~).*
	~~(c)~~	~~Employment Agreement, dated as of April 12, 2022, between Paramount Global and Nancy Phillips (filed herewith~~).*
(31)		Rule 13a-14(a)/15d-14(a) Certifications
	(a)	Certification of the Chief Executive Officer of Paramount Global. pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
	(b)	Certification of the Chief Financial Officer of Paramount Global pursuant to Rule 13a-14(a), or 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes Oxley Act of 2002 (filed herewith).
(32)		Section 1350 Certifications
	(a)	Certification of the Chief Executive Officer of Paramount Global furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
	(b)	Certification of the Chief Financial Officer of Paramount Global furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002 (furnished herewith).
(101)		Interactive Data File
		101. INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
		101. SCH Inline XBRL Taxonomy Extension Schema.
		101. CAL Inline XBRL Taxonomy Extension Calculation Linkbase.
		101. DEF Inline XBRL Taxonomy Extension Definition Linkbase.
		101. LAB Inline XBRL Taxonomy Extension Label Linkbase.
		101. PRE Inline XBRL Taxonomy Extension Presentation Linkbase.

(104)		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*Management contract or compensatory plan required to be filed as an exhibit to this form pursuant to Item 15(b).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			PARAMOUNT GLOBAL (Registrant)

Date: ~~May ,~~November 2, 2022			/s/ Naveen Chopra
			Naveen Chopra Executive Vice President, Chief Financial Officer

Date: ~~May ,~~November 2, 2022			/s/ Katherine Gill-Charest
			Katherine Gill-Charest Executive Vice President, Controller and Chief Accounting Officer

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