Warner Bros. Discovery reported first-quarter earnings after the bell.

The firm reported a net debt of $2.9 billion tied to acquisition and restructuring expenses. Furthermore, experts in earnings report note the continued relevance.

The net deficit also included the $2.8 billion termination fee that Paramount Skydance paid to Netflix this year.

Warner Bros. Discovery on Wednesday reported a staggering net shortfall for the first quarter, but it has an explanation.

The business booked a net debt of $2.9 billion, far larger than the net deficit of $453 million it reported in the year-earlier quarter.

The figure included $1.3 billion of “pre-tax acquisition-related amortization of intangibles, content fair value step-up and restructuring expenses” as well as the $2.8 billion termination fee that Warner Bros. Discovery owed Netflix after their pending transaction fell through in February.

Netflix walked away from its proposed deal to acquire WBD’s assets after Paramount Skydance came in with a higher offer. Paramount agreed to pay the termination fee as part of its agreement to procure the entirety of WBD, but the cost lives on WBD’s books until the close of that deal. This also touches on aspects of investors.

Since the amount is refundable to Paramount under certain circumstances, such as if it were to terminate the deal with Paramount for a higher offer, the obligation would be shifted to WBD.

Paramount’s proposed acquisition received approval from WBD shareholders in April and is currently in the midst of a regulatory review process. On Monday, Paramount mentioned in its earnings release that it has “made significant progress” toward closing the deal, which it expects to be completed in the third quarter.

WBD on Wednesday also reported first-quarter revenue that was down 1% year over year to $8.89 billion. The company’s adjusted earnings before interest taxes, depreciation and amortization was up 5% to $2.2 billion. WBD had $33.4 billion in gross debt at the end of the quarter.

Streaming continued to be a highlight for the firm.

Total streaming revenue was up 9% to about $2.89 billion as subscriber revenue increased due to the expansion of HBO Max — WBD’s flagship streaming platform — in international markets. Advertising revenue for the unit was up 20% due to an boost in customers subscribing to the ad-supported tier.

The enterprise commented in a shareholder letter it exceeded its guidance of more than 140 million global streaming customers at the end of the first quarter, and it remains on track to surpass 150 million global subscribers by the end of the year.

WBD’s portfolio of pay TV networks, which includes CNN, TBS and the Discovery Channel, continued to weigh on the corporation.In revenue, The linear TV networks reported $4.38 billion, down 8% from the prior year. The enterprise mentioned linear advertising revenue was down 11%, which was primarily driven by the absence of NBA media rights from its portfolio.

Revenue for the film studio division, meanwhile, increased 35% to $3.13 billion year over year.