Page 1

AT & T's WARNERMEDIA AND DISCOVERY , INC . CREATING STANDALONE COMPANY BY COMBINING OPERATIONS TO FORM NEW GLOBAL LEADER IN ENTERTAINMENT Companies with Shared Values , Complementary Assets , and Iconic Brands and Franchises , Will Offer the Most Differentiated Content Portfolio in the World WarnerMedia and Discovery , Inc. Form One of the Largest Global Streaming Players Discovery President & CEO David Zaslav to Lead New Company with Executives from Both Companies in Key Leadership Roles AT & T and Discovery Will Hold Joint Press Conference at 7:30 am EDT and a Separate Call with Investors Will Begin at 8:30 am EDT Dallas , TX and New York , NY - May 17 , 2021. AT & T Inc. ( NYSE : T ) and Discovery , Inc. ( NASDAQ : DISCA , DISCB , DISCK ) today announced a definitive agreement to combine WarnerMedia's premium entertainment , sports and news assets with Discovery's leading nonfiction and international entertainment and sports businesses to create a premier , standalone global entertainment company . Under the terms of the agreement , which is structured as an all - stock , Reverse Morris Trust transaction , AT & T would receive $ 43 billion ( subject to adjustment ) in a combination of cash , debt securities , and WarnerMedia's retention of certain debt , and AT & T's shareholders would receive stock representing 71 % of the new company ; Discovery shareholders would own 29 % of the new company . The Boards of Directors of both AT & T and Discovery have approved the transaction . The companies expect the transaction will create substantial value for AT & T and Discovery shareholders by : • • • • Bringing together the strongest leadership teams , content creators , and high - quality series and film libraries in the media business . Accelerating both companies ' plans for leading direct - to - consumer ( DTC ) streaming services for global consumers . Uniting complementary and diverse content strengths with broad appeal WarnerMedia's robust studios and portfolio of iconic scripted entertainment , animation , news and sports with Discovery's global leadership in unscripted and international entertainment and sports . Forming a new company that will have significant scale and investment resources with projected 2023 Revenue of approximately $ 52 billion , adjusted EBITDA of approximately $ 14 billion , and an industry leading Free Cash Flow conversion rate of approximately 60 % .