The Macro Show

DISCLAIMER Hedgeye Risk Management is a registered investment advisor, registered with the State of Connecticut. Hedgeye Risk Management is not a broker dealer and does not provide investment advice to individuals. This research does not constitute an offer to sell, or a solicitation of an offer to buy any security. This research is presented without regard to individual investment preferences or risk parameters; it is general information and does not constitute specific investment advice. This presentation is based on information from sources believed to be reliable. Hedgeye Risk Management is not responsible for errors, inaccuracies or omissions of information. The opinions and conclusions contained in this report are those of Hedgeye Risk Management, and are intended solely for the use of Hedgeye Risk Management’s clients and subscribers. In reaching these opinions and conclusions, Hedgeye Risk Management and its employees have relied upon research conducted by Hedgeye Risk Management’s employees, which is based upon sources considered credible and reliable within the industry. Hedgeye Risk Management is not responsible for the validity or authenticity of the information upon which it has relied.

TERMS OF USE This report is intended solely for the use of its recipient. Redistribution or republication of this report and its contents are prohibited. For more detail please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at www.hedgeye.com.

DATA SOURCE: BLOOMBERG © Hedgeye Risk Management LLC 2 1 2 3 The Macro Show

BOUNCE VIX TECH

Both longstanding Bearish @Hedgeye TRENDs and new ones bounce. We’d sell both types this morning as the bounces aren’t telling us anything new – on the longstanding side, big things like KOSPI, Copper, Oil, then the new and developing bears like U.S. Tech and Consumer Discretionary head the list. 2 VIX

We measure and map these bounces in beta within the lens of volatility – our signal says this is a Phase Transition in U.S. Equity Vol in particular with the new low-end of our VIX Risk Range being the former top-end of the range = 15.37-25.67 (this should happen during Quad 4 in Q3). 3 TECH

Consensus is still long of Tech – you probably know that but if you want to see that just look at the implied volatility DISCOUNT of -2% (vs. 30-day realized) in the mainline Tech ETF (XLK) this morning. S&P Tech Earnings are now -7% y/y and slowing at a faster rate. COMMUNICATIONS POSITION MONITOR

Best Ideas - Longs Sentiment Market Cap Best Ideas - Shorts Sentiment Market Price Trend Tail Price Trend Tail LONG Score* (bill) SHORT Score* Cap (bill) Active Longs Active Shorts DIS Walt Disney Company 100 $ 242.7 $ 134.9   NFLX Netflix, Inc. 38 $ 133.2 $ 304.3   PINS Pinterest, Inc. Class A N/A $ 21.3 $ 32.1   ROKU Roku, Inc. Class A 76 $ 11.5 $ 101.0  

Long Bias (Bench) Short Bias (Bench) CHTR Charter Communications, Inc. Clas 20 $ 83.1 $ 375.0 ------T AT&T Inc. 92 $ 248.9 $ 34.1 ------DISCA Discovery, Inc. Class A 32 $ 15.7 $ 29.9 ------VZ Verizon Communications Inc. 88 $ 227.9 $ 55.1 ------ATUS Altice USA, Inc. Class A 40 $ 17.5 $ 26.7 ------CMCSA Comcast Corporation Class A 80 $ 189.7 $ 41.7 ------LYV Live Nation Entertainment, Inc. 56 $ 15.1 $ 70.8 ------CBS CBS Corporation Class B 76 $ 18.4 $ 49.2 ------GOOGL Alphabet Inc. Class A 69 $ 760.7 $ 1,175.9 ------DISH DISH Network Corporation Class 50 $ 14.8 $ 31.5 ------TMUS T-Mobile US, Inc. 96 $ 65.3 $ 76.5 ------AMCX AMC Networks Inc. Class A 8 $ 2.9 $ 52.2 ------FB Facebook, Inc. Class A 100 $ 528.2 $ 185.2 ------

Sentiment score as of 6/22/2019, market cap and price information as of 6/22/2019, short interest data as of 6/14/2019 Active Long or Short = Idea that has gone through our research process, and have conviction in timing and fundamentals. Bench Long or Short = Idea that is still going through our research process, but have long/short bias based on initial thematic, policy or fundamental work. *Hedgeye Communications Sentiment Score is a stock’s relative percentile rank within its own sub-sector, calculated by factoring the stock’s short interest, sell-side ranking, relative forward earnings multiple to the S&P 500 over a rolling 12-mo basis and relative performance to S&P 500 over a 90-day period. A Sentiment Score of 1 represents high short interest, negative sell side rating, relative underperformance and multiple compression. A Sentiment Score of 100 represents low short interest, positive sell side rating, relative outperformance and multiple expansion. “Trend” is a duration of 3 months or more / “Tail” is a duration of 3 years or less Hedgeye’s “bench” represents Hedgeye’s outlook on companies currently under Hedgeye’s review, or for which timing is not right for greater coverage. Hedgeye may or may not provide further commentary on any or all companies represented on the bench and representation of a company on the bench does not forecast whether Hedgeye will or will not issue any additional material on that company Data Source: Factset © Hedgeye Risk Management LLC. All Rights Reserved. 7 THEME EXPOSURE MATRIX

Long   Position Short Monitor Audience OTT Long/ Ticker Broadband OTT AVO D Fragmentation Competition vMVPD Content Linear TV MVPD/DBS Short CHTR     -  -   Long AT U S     -  -   Long ROKU -    -  -   Long GOOGL -    -     Long FB -     -  - - Long DIS -   -     - Long DISCA - - -  -    - Long NFLX -        - Short AM C X - - -  - -   - Short CBS -  -   -   - Short CMCSA   -   -    Short T   -       Short DISH   -       Short

MANY DIFFERENT WAYS TO EXPRESS THESE THEMES LONG/SHORT We want to be long diversified portfolios of proprietary content, broadband, audience fragmentation and OTT competition (i.e., short NFLX). We want to be short linear TV and traditional video distribution (MVPD). While consolidation has made gaining direct exposure to these factors difficult, some companies are more uniquely exposed than others.

Growth in U.S. OTT Reach and Time Spent Slowing OTT Still < 20% Share of U.S. Digital Video Minutes

18% Total U.S. OTT Minutes as % of Total Digital Video Minutes (Desktop, Mobile, OTT) U.S. OTT Reach YoY % U.S. OTT Total Minutes YoY % 120% Linear (Total U.S. OTT Minutes as % of Total Digital Video Minutes (Desktop, Mobile, OTT))

16%

100% 14%

12% 80%

10%

60% 8%

6% 40%

20% 2%

0% 0%

60% hulu Total U.S. Digital Reach YoY % (Desktop, Mobile, OTT)

50%

40%

30%

20%

10%

0% May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19

Hulu Growth Accelerating in U.S. Netflix Losing Share of MAUs as Growth Slows

Netflix Hulu Amazon Prime Video Total Netflix Hulu Amazon Prime Video HBO NOW 120% 90%

80%

100% iOS - 70% iOS

80% - 60%

50%

60%

40%

40% 30% Market Share of U.S. Mobile MAUs MAUs Mobile of U.S. Share Market

20%

YoY Growth in U.S. Mobile Monthly Active Users (MAUs) 20%

10%

0% 0%

Did Game of Thrones Negatively Impact NFLX? Large Spike in HBO Now Downloads in April 2019

Netflix Hulu Amazon Prime Video HBO Now Netflix Hulu Amazon Prime Video HBO Now 2.5 70%

60% 2.0 iOS - iOS - 50%

1.5

40%

30% 1.0 U.S. U.S. Mobile AppDownloads (millions)

20%

Market Share of U.S. Mobile App Downloads of AppDownloads Mobile U.S. Market Share 0.5

10%

0.0 0%

200% 4Q18 1Q19 2Q19 186%

Game of 150% Thrones iOS -

100%

53% 50% 50% 44% 39% 39% 30%

SVOD YoY Growth in U.S. Mobile App Downloads AppDownloads Mobile in U.S. SVOD YoY Growth 5% 5% 0% 0% -9%

-50% HBO NOW Amazon Prime Video Hulu Netflix

YouTube TV Remains #1 / Direct TV Now Declines DirectTV NOW MAUs Trending Down in Q2

100% 4.0 Pluto TV Pluto TV fuboTV Sling TV DIRECTV NOW YouTube TV fuboTV 90% 3.5 Sling TV

DIRECTV NOW 80% iOS iOS - - 3.0 YouTube TV

70%

2.5 60%

2.0 50% Monthly Active Users (millions) 40% 1.5 vMVPD 30% 1.0

20% Market Shareof Mobile Monthly Active Users (MAUs) 0.5 10%

0.0 0%

8.0 Sling TV fuboTV Pluto TV DIRECTV NOW YouTube TV Philo YoY % 400%

7.0 350%

6.0 300%

5.0 250% mo iOS Mobile App Downloads AppDownloads Mobile iOS mo - 4.0 200% Rolling 3

3.0 150% vMVPD

2.0 100%

1.0 50%

0.0 0%

4Q18 1Q19 2Q19 600% 565%

500%

404% 400% iOS

300% 277% 249%

200% 188% vMVPDU.S. MAUs YoY % -

104% 100% 88% 80% 64% 56% 48% 38% 31% 17% 5% 7% 0% -8% -15%

-100% Pluto TV YouTube TV Total fubo TV Sling TV DIRECTV NOW

600% 4Q18 1Q19 2Q19

542%

500% 490%

400% iOS - 318%

300%

233% 223%

200% 183% YoY % U.S. U.S. AppDownloads YoY % Mobile 100%

27% 24% 15% 20% 0% -1% -12% -21% -29% -22% -41% -40% -46% -51% -58% -100% Pluto TV Philo Total Sling TV YouTube TV fuboTV DIRECTV NOW

$460 8% Real PCE: Cable and Satellite Television and Radio Services 3-Yr CAGR % Average Growth %

6% $440

4% $420

2% $400 Rolling 3 Rolling years - 0% - $380 % CAGR Yr

-2%

Per U.S. Civilian > 18 $360 -4%

$340 -6%

$320 -8%

$300 -10%

15% Real PCE: Cable and Satellite Television and Radio Services - YoY % 2-Yr CAGR %

10%

May 2019 -4.0%

-5%

-10%

Trend In Cord-cutting Accelerating ~4M Pay-TV Sub Losses Last 12-mo ex-vMVPD

1.0% 0.5 Pay-TV Video Subscribers ex-vMVPD U.S. YoY % (CMCSA, DISH, T, CHTR, VZ, ATUS, COX)

(millions) 0.0

0.0% vMVPD - -0.5

-1.0 -1.0%

-1.5

-2.0% -2.0 U.S. U.S. Video Subscriber ex Additions

TV -2.5

-3.0%

YoY# Pay - -3.0

-3.5 -4.0%

-4.0

-5.0% -4.5

Data Source: Company Filings and Hedgeye Estimates © Hedgeye Risk Management LLC. All Rights Reserved. 20 Pinterest (PINS) MAU Growth Accelerating in 2Q19 Easier comparison due to negative impact from Google de-indexing in 1H18

Hedgeye Consensus YoY % Hedgeye Consensus YoY % 90 16% 250 70%

85 84 14% 211 208 60%

200 80 12% 50%

75 10% 150 40%

70 8%

30% 100 65 6% Domestic MAUs MAUs Domestic (millions International MAUs (millions) 20% 60 4% 50

10% 55 2%

50 0% 0 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19:E 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19:E

Data Source: Company Filings, Factset and Hedgeye Estimates 21 Pinterest (PINS) Under Monetizing ex-U.S. International expansion, self-service and new ad formats drive ARPU higher

$0.10 Hedgeye Consensus YoY % 90% $3.5 Hedgeye Consensus YoY % 60%

$0.09 $0.09 80% $3.0 50% $0.08 $2.6 $0.08 70% $2.6

$2.5 $0.07 60% 40%

$0.06 $2.0 50%

$0.05 30%

40%

Domestic ARPUDomestic $1.5 $0.04 International ARPUInternational

30% 20% $0.03 $1.0

20% $0.02 10% $0.5 $0.01 10%

$- 0% $- 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19:E 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19:E

Data Source: Company Filings, Factset and Hedgeye Estimates 22 Pinterest (PINS) Mobile App Downloads Accelerating in 2Q19 Accelerating growth in the U.S. and International

Intl. iOS App Downloads Intl. Android App Downloads 160% 30% U.S. iOS App Downloads U.S. Android App Downloads Unified U.S. App Downloads Unified Intl. App Downloads

140% 20%

120% 10%

100% 0% 80%

-10% 60% YoY % YoY YoY % YoY -20% 40%

-30% 20%

-40% 0%

-50% -20%

-60% -40% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Data Source: Sensor Tower 23 Pinterest (PINS) Stable->Improving Engagement Metrics

WAU/MAU Stable; Total Minutes and Time Spent Per Visitor Improving

65% Worldwide WAU/MAU iOS Worldwide WAU/MAU Android 30% Total Minutes YoY % Average Minutes Per Visitor YoY %

58.6% 60% 58.4% 57.9% 58.6% 58.1% 58.6% 58.4% 58.2% 25%

58.5% 58.3% 58.3% 58.4% 58.5% 58.4% 58.5% 55% 20%

50%

15%

45% 42.1% 41.9% 41.8% 41.8% 41.8% 41.7% 41.8% 41.7% 10% 41.9% 41.9% 41.8% 40% 42.0% 41.8% 41.7% 41.8%

5% 35%

Mobile Application Panel Data Multi-Platform (Desktop + 30% 0% Mobile) 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 Oct-2018 Nov-2018 Dec-2018 Jan-2019 Feb-2019 Mar-2019 Apr-2019 May-2019 Jun-2019

Data Source: Sensor Tower and comScore Media Metrix 24 Roku (ROKU) | Tracking Active Accounts Larger than usual QoQ decline in mobile user growth in 2Q19

3.5 Roku Active Accounts QoQ Hedgeye Model 2.0 Roku Active Accounts - QoQ 2nd Derivative Hedgeye Model - QoQ 2nd Derivative

Correlation = 0.85 3.0 1.5

2.5 1.0

2.0 0.5 millions millions 1.5 -

1.0 (0.5)

0.5 (1.0)

Hedgeye Model = Linear regression based off of mobile Monthly Active Users (MAUs) - (1.5) 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Data Source: Sensor Tower 25 Roku (ROKU) | Mobile App Download Growth Strong Sequential decline in 2Q19 consistent with seasonal trends; YoY growth continues to accelerate

Roku WW Mobile App Downloads Roku WW Mobile App Downloads YoY %

6 80% Millions

70% 5

60%

4 50%

3 40%

30% 2

20%

1 10%

0 0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19

Data Source: Sensor Tower 26 Roku (ROKU) | Historical NTM EV/Sales Valuation near all-time-high as market values ROKU as an ad-platform and not a hardware company

10x Average Std Dev -1 Std Dev +1 NTM EV/Sales

Data Source: Factset 27 IMAGINEERING THE BUNDLE

Complementary Content Offerings Disney Streaming Options Priced Competitively

Streaming Video Subscription Monthly Pricing

Warner* $16.99

Netflix Premium $15.99

Mature Content Premium HBO NOW $14.99 TV Programming Strong Value Proposition Family Content Live Sports $12.99/mo $6.99/mo Netflix Standard $12.99 $5.99/mo $5.83/mo (Annual) “Armed with exceptional content and Hulu (No Ads) $11.99 innovative technology, we're offering 3 direct- to-consumer services in the U.S.: Disney+, Showtime $10.99 ESPN+ and Hulu, each built for a specific target audience, each offered as a standalone service, which we will WWE likely bundle at a discounted price to create even more value for consumers.” Netflix Basic $8.99 – Kevin Mayer

Prime Video $8.99

Starz $8.99

CBS All Access (w/Ads) $5.99 Premium Average = $10.99/month *Not finalized Sports Content Quibi (w/Ads) $5.00

Overall Value Quantity vs Quality

Disney+ 45 43 Philo TV Disney+ Netflix

YouTube TV Netflix 41 Pluto TV YouTube TV 40 HBO ESPN+ Now Philo TV Hulu Hulu 39 Sling TV ESPN+ Prime 35 STARZ Cable/ Cable/ 37 Satellite TV HBO Satellite TV Now Direct TV Now CBS All Access

Overall Value 35 Prime 30 Quality Content “..we think there’s an CBS All Access opportunity to increase investment in Hulu notably 33 on the programming side.“ Showtime On Demand Pluto TV – Bob Iger, F4Q18 25

20 20 25 30 35 40 45 29 29 31 33 35 37 39 41 43 45 Price of Service Content Selection / Quantity

Data Source: Consumer panel survey 1/25/2019 (Disney+ data from 6/23/2019 panel) © Hedgeye Risk Management LLC. All Rights Reserved. 29 MACRO GRIND Reviewing The #Quad4 Playbook The Macro Show August 8, 2019

Updated: 8/8/2019

DATA SOURCE: BLOOMBERG © Hedgeye Risk Management LLC 33 Our Risk Management Overlay is Rules-Based The Macro Show August 8, 2019

DATA SOURCE: Hedgeye. Asterisk denotes legacy telecom prior to the 2018 MSCI reclassification. © Hedgeye Risk Management LLC 34 Sector Performance The Macro Show August 8, 2019

DATA SOURCE: BLOOMBERG, HRM © Hedgeye Risk Management LLC 36 Market Share Volume & Total Value Traded The Macro Show August 8, 2019

DATA SOURCE: BLOOMBERG, HEDGEYE © Hedgeye Risk Management LLC 40 CFTC The Macro Show Non-Commercial August 8, 2019 Net Long Positioning