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REFINITIV STREETEVENTS EDITED TRANSCRIPT T.N - AT&T Inc at Barclays Future of Media Conference (Virtual) EVENT DATE/TIME: JUNE 03, 2021 / 4:20PM GMT REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 03, 2021 / 4:20PM, T.N - AT&T Inc at Barclays Future of Media Conference (Virtual) CORPORATE PARTICIPANTS Andy Forssell Warner Media, LLC - Head of HBO Max CONFERENCE CALL PARTICIPANTS Kannan Venkateshwar Barclays Bank PLC, Research Division - Director & Senior Research Analyst PRESENTATION Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst All right. Welcome back, everyone. For the next section, it's great to have with us Andy Forssell, EVP and General Manager, HBO Max. Prior to that, Andy served as the Chief Operating Officer at Otter Media, and he was acting CEO of Hulu for a while and served as SVP of Content and Distribution at Hulu as well. Andy, thanks so much for being here. And before we get into the session, I think Andy has a safe harbor disclosure that he wants to refer to. Andy Forssell - Warner Media, LLC - Head of HBO Max Thanks, Kannan. Oh, there's your video. I was going to say I wasn't seeing video. Thank you very much for that intro. Yes. On safe harbor, just to point out, as housekeeping, safe harbor statement is available. It's downloadable from both the Barclays site and from att.com. QUESTIONS AND ANSWERS Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst All right. Now that the important work has been done, let's get into it. So I guess starting with the big picture and the obvious question is the transaction with Discovery that was announced last week. You've had some time to think about the go-forward strategy and the approach to the market and so on, and you've been working on the streaming strategy for HBO for a while. So if you could help put the deal into perspective in the context of what you were working on as well as what it means for you and your team? And how you expect to operate the next 6 to 12 months until the deal actually closes? Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. Look, in the very big picture, I think none of us should be surprised to see some consolidation. I mean I just think of it in the long term, 10-plus years, maybe even 15, you're going to have a very small number of global services that have user dartboard of choice to pick a number, but 300 million or 400 million global subs, we've always estimated well it could be more than that and thrive economically. And what that number is, nobody knows, but it's a small number. And you're seeing that set up now. So I'm not -- none of us should be shocked to see some consolidation over time. The one funny thing about this, at least from the team's perspective, nothing changes overnight. It's obviously huge news, but then our mission today is the same as it was a couple of weeks ago, run the business. We've got great momentum that I can talk about in a moment. And we're at least a year away from anything happening. So certainly, big news and one that we pay attention to. But it doesn't change what we do, which is continue the sort of mission we've been on for the last year plus, really a couple of years as we built the service. 2 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 03, 2021 / 4:20PM, T.N - AT&T Inc at Barclays Future of Media Conference (Virtual) And I'll just summarize where we've been and where we're going to say, look, the thesis behind HBO Max was simple. You had an HBO programming team that was firing on all cylinders in terms of programming. Last season's Game of Thrones, Succession, so many other shows that they brought to life. But in 2018 and 2019, because they were tied largely to a distribution system that was in secular decline in cable and satellite, we lost 3 million total subs, the total HBO numbers over across those years. Double the product -- excuse me, double the content, make the product better get more sophisticated in engaging people and living in a digital universe and a direct-to-consumer universe, that was the thesis of HBO Max, and we turned that around, and we've done that. So you look at the last 4 quarters, after a several million sub decline, we're up 11 million off a base of 30-some -- low 30s, over those 4 quarters, and that is accelerating, not decelerating. And steadily, but surely, that kind of bar chart by quarter goes up. The wholesale piece of it, meaning satellite, telco, cable is fairly stable. It's gone up a bit but low to mid-30s. The retail piece, meaning direct-to-consumer, either directly billed by us, or through our in-app purchase partners has gone up at 250-some percent in that period. That is again accelerating, not decelerating. So feel great momentum. Happy to talk about any of those demogs. But that's going to continue and then eventually, yes, we've got to figure out how do you combine that with discovery and what does that mean. But for the team, it seems quite a ways off because we've got to wait for the Department of Justice and that type of process to play out. Kannan Venkateshwar - Barclays Bank PLC, Research Division - Director & Senior Research Analyst Yes. I mean in terms of the momentum, I guess, HBO has been around for a long time. It's been around for decades. And like you said, I mean, the 30 million kind of a sub number has been relatively stable and now it's accelerated over the last few quarters. And it's taken a lot of effort to accelerate that distribution growth. Distribution tends to be expensive. When you try to do it on a stand-alone basis, it's the case for everyone. So when you think about the new strategy, which involves different kind of channels, right? I mean, you have, of course, the ad-supported service, which just launched this week. You have partnerships with distributors that you're working on. And so -- and of course, there are bundling approaches with wireless that are different kinds of distribution approaches that you've leaned into. Could you give us some sense of which of these distribution approaches you've found the most useful? And going forward, what kind of approaches we should expect as you scale the service around the world? Andy Forssell - Warner Media, LLC - Head of HBO Max Sure. Well, truly, you mentioned distribution is hard. I think we've transitioned into a period where one way to look at it is that distribution has gotten pretty easy. What is hard is retention because customers now have the big red button, they can push it any time. And you're facing instant accountability, which isn't comfortable all the time, but it's largely a good thing. Lack of accountability means you cannot be a great programmer and still have good economics for a while before it catches up to you. That's not really good for anybody. And so we're distributing really broadly through wholesale partners through direct means, through the in-app purchase shops. We'll do that worldwide and there'll be a mix. We're certainly comfortable with that. We have great distribution relationships worldwide that we can rely on across Warner Media. That will continue. Some of the key in our wholesale side, though, is given that accountability and that big red button that people have, you need to see what they're doing and get feedback from them in -- literally in real time. So you see a shift to people viewing even in wholesale relationships through our app so that we can see their behavior. Now we may not speak to them directly because somebody else owns the customer relationship, we may know their name, we may not. But we know who they are, and we know whether the service is working for them and we know what they watch and how long they watch it, that's critical. 3 REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us ©2021 Refinitiv. All rights reserved. Republication or redistribution of Refinitiv content, including by framing or similar means, is prohibited without the prior written consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 03, 2021 / 4:20PM, T.N - AT&T Inc at Barclays Future of Media Conference (Virtual) So the focus, I think, shifts away from pure acquisition and distribution that is stable to, how good are you at retention and understanding what people need and keeping their hand off that big red button as I call it.

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