Reports Third-Quarter Results

Investor Briefing

No. 298 | OCTOBER 24, 2017 Investor Briefing Q3

Contents

Consolidated Results 3

Business Solutions 5

Entertainment Group 7

Consumer Mobility 9

International 10

AT&T Mobility 11

Highlights 14

Financial and Operational Information 17

Discussion and Reconciliation 27 of Non-GAAP Measures Investor Briefing Q3 Consolidated Results

AT&T Reports Third-Quarter Results

ǋǋ Consolidated revenues of $39.7 billion ǋǋ Operating income of $6.4 billion ǋǋ Net income attributable to AT&T of $3.0 billion ǋǋ Diluted EPS of $0.49 as reported and $0.74 as adjusted, compared to $0.54 and $0.74 in the year-ago quarter ǋǋ Cash from operations of $11.1 billion ǋǋ Free cash flow of $5.9 billion

Company Maintains Full-Year Guidance

HIGHLIGHTS:

U.S. wireless results: Expanding operating income margin of 30.5% with best-ever EBITDA margins of 42.0% and wireless service margin of 50.4% Best-ever third-quarter postpaid phone churn of 0.84%, showing the success of video and wireless bundling strategy Continued growth of postpaid smartphone base ǋǋ 3.0 million total wireless net adds

2.3 million in U.S., driven by connected devices, prepaid and postpaid Nearly 700,000 Mexico net adds ǋǋ Entertainment Group results:

125,000 IP broadband net adds; 29,000 total broadband net adds More than 6 million customer locations passed with fiber Nearly 300,000 DIRECTV NOW net adds helped offset traditional TV subscriber decline ǋǋ International revenues up 11.7% with continued strong revenue growth in Mexico

3 CONTENTS Investor Briefing Q3 Consolidated Results

CONSOLIDATED FINANCIAL RESULTS Third-quarter net income attributable to AT&T totaled $3.0 billion, or $0.49 per diluted share, compared with AT&T's consolidated revenues for the third quarter $3.3 billion, or $0.54 per diluted share, in the year-ago totaled $39.7 billion versus $40.9 billion in the year- quarter. Adjusting for $0.25 of costs for amortization, ago quarter, primarily due to declines in legacy merger- and integration-related expenses and other wireline services and consumer mobility. Excluding items including hurricane and earthquake impacts, the impact of hurricanes and earthquakes in the earnings per diluted share was $0.74, the same as in third quarter, revenues would have been $39.8 billion. the year-ago quarter. Compared with results for the third quarter of 2016, operating expenses were $33.3 billion versus $34.5 billion; operating income was flat versus the Adjusted Earnings Per Share year-ago quarter at $6.4 billion; and operating $0.79 income margin was 16.1% versus 15.7%. When $0.74 $0.74 $0.74 adjusting for amortization, merger- and integration- related expenses and other items, operating income $0.66 was $8.1 billion versus $8.3 billion in the year-ago quarter and operating income margin was 20.3%, the same as in the year-ago quarter.

Consolidated Revenues 3Q16 4Q16 1Q17 2Q17 3Q17 IN BILLIONS

REPORTED: $0.54 $0.39 $0.56 $0.63 $0.49 $40.9 $41.8 $39.4 $39.8 $39.7

Cash from operating activities was $11.1 billion in the third quarter and $29.3 billion year to date. Capital expenditures were $5.3 billion in the quarter and $16.5 billion year to date. Free cash flow — cash from operating activities minus capital expenditures — was $5.9 billion for the quarter and $12.8 billion

3Q16 4Q16 1Q17 2Q17 3Q17 year to date.

Cash from Operations IN BILLIONS

$11.0 $11.1 $10.1 v $9.2 $8.9 v v $5.8 $6.5 $6.0 $5.2 $5.3

$5.2 $3.7 $3.2 $3.7 $5.9

3Q16 4Q16 1Q17 2Q17 3Q17

Free Cash Flow Capital Expenditures

4 CONTENTS Investor Briefing Q3 Business Solutions

The Business Solutions segment provides both wireless and wireline services to business customers and wireless services to individual subscribers who participate through employer-sponsored plans. AT&T's wireless and wired networks provide complete communications solutions to these customers. AT&T’s business customer revenues include results from enterprise, public sector, wholesale and small/midsize customers.

FINANCIAL HIGHLIGHTS BUSINESS WIRELESS FINANCIAL RESULTS Total third-quarter revenues from business Business wireless revenues were down year customers were $17.1 billion, down 4.0% versus over year at $9.7 billion primarily due to lower the year-earlier quarter due to declines in legacy equipment revenues. wireline and wireless equipment. ǋǋ Wireless service revenues were down 0.2% ǋǋ Growth in strategic business services helped year over year, reflecting fewer migrations offset declines in legacy wireline services and from consumer plans and customer shifts wireless sales. to unlimited data plans.

ǋǋ Third-quarter operating expenses were $12.6 billion, down 6.7% versus the third quarter BUSINESS WIRELINE FINANCIAL RESULTS of 2016. Operating income totaled $4.5 billion, In business wireline, declines in legacy products up 4.6% year over year with cost efficiencies, were partially offset by continued growth in fewer wireless equipment upgrades and lower strategic business services. Continued weakness in depreciation expenses more than offsetting business fixed investment along with technology declines in legacy services. transitions also impacted results. Total business wireline revenues were $7.4 billion, down 6.0% year ǋǋ Third-quarter operating income margin was over year. 26.4%, up 220 basis points year over year with growth in IP revenues and increased cost ǋǋ Strategic business services, the wireline efficiencies more than offsetting declines in capabilities that lead AT&T’s most advanced higher-margin legacy services. business solutions — including VPNs, Ethernet, cloud, hosting, IP conferencing, voice over IP, dedicated internet, IP broadband and security Revenues & EBITDA Margin IN BILLIONS services — continued its solid performance. Revenues grew by $174 million, or 6.0%, versus $17.8 $18.0 $16.8 $17.1 $17.1 the year-earlier quarter. These services represent 42% of total business wireline revenues and an annualized revenue stream of more than

38.5% 34.9% 39.6% 39.7% 40.0% $12 billion. This growth helped offset a decline of more than $600 million in legacy services in the quarter. $6.8 $6.3 $6.7 $6.8 $6.8

3Q16 4Q16 1Q17 2Q17 3Q17 Revenues EBITDA EBITDA Margin

5 CONTENTS Investor Briefing Q3 Business Solutions

Strategic Business Services Revenues IN BILLIONS $3.1 $3.0 $3.0 $3.0 $2.9 41.9% 40.1% 41.0% 38.5% 37.1%

3Q16 4Q16 1Q17 2Q17 3Q17 Strategic Services Revenues % of Business Wireline Revenues

SUBSCRIBER METRICS At the end of the third quarter, AT&T had more than 87 million business wireless subscribers.

ǋǋ Business Solutions added 15,000 postpaid subscribers and added 2.3 million connected devices in the third quarter. Postpaid business wireless subscriber churn was 1.01% versus 0.97% in the year-ago quarter due to tablets.

Connected Device Subscribers & Net Adds IN MILLIONS 33.6 35.9 31.4 29.4 30.6

2.6 2.2 2.3

1.3 1.3

3Q16 4Q16 1Q17 2Q17 3Q17 Net Adds Subscribers

ǋǋ During the quarter, the company also added 25,000 high-speed IP broadband business subscribers. Total business broadband subscribers were flat.

6 CONTENTS Investor Briefing Q3 Entertainment Group

AT&T’s Entertainment Group provides entertainment, high-speed internet and communications services predominantly to residential customers in the United States.

FINANCIAL HIGHLIGHTS Third-quarter operating expenses were $11.3 billion, up 0.9% from a year ago as cost synergies helped Total revenues were $12.6 billion, down slightly versus offset annual content-cost increases, higher deferral the year-earlier quarter due to declines in legacy amortization expense and video platform services and traditional TV subscribers. development expenses. ǋǋ Total video revenues were up 1.9% with ǋǋ Operating income totaled $1.3 billion, down satellite gains more than offsetting declines in 11.6% from the year-ago quarter. IPTV. This includes a positive impact from the Mayweather-McGregor fight. ǋǋ Third-quarter operating income margin was 10.4%, down from 11.7% in the year-earlier quarter. AdWorks continues to show strong gains with revenues up more than 11%. ǋǋ Entertainment Group EBITDA margin was 21.3%, compared to 23.5% in the third quarter of 2016, Broadband revenues were down in the quarter ǋǋ with video and IP broadband revenue growth due to legacy DSL declines, simplified pricing and cost efficiencies partially offsetting TV and bundle discounts. High–speed broadband content-cost pressure, declines in legacy revenues grew by 1.3%. services and video platform development expenses. (EBITDA margin is operating income before depreciation and amortization, divided Product Revenues by total wireless revenues.) IN BILLIONS $13.2 $12.7 $12.6 $12.7 $12.6 $1.9 $1.9 $1.9 $1.9 $1.9 Revenues and EBITDA Margin IN BILLIONS $9.0 $9.6 $9.0 $9.2 $9.2 $13.2 $12.7 $12.6 $12.7 $12.6

$1.8 $1.7 $1.7 $1.6 $1.5 23.5% 23.9% 24.6% 3Q16 4Q16 1Q17 2Q17 3Q17 20.8% 21.3% High-speed Internet Video Legacy/Other

$3.0 $2.7 $3.0 $3.1 $2.7

3Q16 4Q16 1Q17 2Q17 3Q17 Revenues EBITDA EBITDA Margin

7 CONTENTS Investor Briefing Q3 Entertainment Group

SUBSCRIBER METRICS Entertainment Group continued to gain broadband subscribers in the third quarter. Total video subscribers were down 89,000 in the quarter as DIRECTV NOW subscribers helped offset ǋǋ The Entertainment Group had a net gain of traditional video declines. The company ended the 125,000 IP broadband subscribers in the third quarter with 25.1 million total video subscribers, quarter with DSL losses of 96,000, for total essentially flat from a year ago. broadband subscriber growth of 29,000. Fewer than 1 million DSL subscribers remain in AT&T’s ǋǋ Traditional video subscribers declined 385,000 in broadband subscriber base. IP broadband the third quarter due to heightened competition in subscribers benefitted from the expansion of traditional pay-TV markets and over-the-top the fiber network and simplified pricing, and services, hurricanes and stricter credit standards. at the end of the quarter, totaled 13.4 million. Satellite subscribers declined by 251,000 in the quarter and IPTV subscribers declined by 134,000. About 85% of the traditional video base is now on the satellite platform. IP Broadband Subscribers IN MILLIONS 13.4 13.1 13.2 12.8 12.9 Video Net Adds IN THOUSANDS

267

323 235 296 72 152 (156) (326) (262) (233) (251) 3Q16 4Q16 1Q17 2Q17 3Q17 (195) (134)

(3) 240 (161) (199) (89) 3Q16 4Q16 1Q17 2Q17 3Q17 ǋǋ Customers continue to move up broadband

DIRECTV U-verse DTVNow speed tiers. About 65% of all IP broadband customers have purchased speed tiers between 18 megabits and 1 gigabit. Customers with speeds of 100 megabits or faster have more ǋǋ DIRECTV NOW added 296,000 subscribers to reach than quadrupled year over year. 787,000 customers. During the quarter, the company enhanced the user experience, added ǋǋ At the same time, the company continues its streaming devices and increased content choices. fiber deployment. The company now markets its 100% fiber network to more than 6 million customer locations in 61 markets. Total Video Subscribers IN MILLIONS

25.5 25.4 25.3 25.2 25.1 500K 800K DTVNow DTVNow

20.8 21.0 21.0 20.9 20.6

4.5 4.3 4.0 3.8 3.7 3Q16 4Q16 1Q17 2Q17 3Q17

U-verse DIRECTV DTVNow

8 CONTENTS Investor Briefing Q3 Consumer Mobility

The Consumer Mobility segment provides nationwide wireless service to consumer and wholesale subscribers located in the United States and in U.S. territories. The company’s wireless network powers voice and data services, including high-speed internet, video entertainment and home monitoring services.

FINANCIAL HIGHLIGHTS SUBSCRIBER METRICS Total revenues from Consumer Mobility customers At the end of the third quarter, AT&T had 51.4 million totaled $7.7 billion, down 6.3% versus the year-earlier Consumer Mobility subscribers. quarter, reflecting lower equipment revenues and ǋǋ In the quarter, Consumer Mobility added 14,000 lower postpaid service revenues mostly due to total subscribers with 324,000 prepaid and 102,000 migrations to business plans. postpaid net adds offsetting a loss of 394,000 ǋǋ Third-quarter operating expenses were reseller and 18,000 connected device subscribers. $5.4 billion, down 4.7% versus the third quarter Effective July 1, 2017, we are reporting prepaid of 2016, reflecting lower volumes, increased cost Internet of Things (IoT) connections as a separate efficiencies and lower depreciation expense. class within our prepaid category. These connections primarily relate to customers who ǋǋ AT&T’s Consumer Mobility operating income actively subscribe for vehicle connectivity. This totaled $2.3 billion, down 9.8% versus the resulted in 97,000 additional prepaid net adds in third quarter of 2016. Third-quarter operating the quarter with a prepaid base increase of 543,000 income margin was 29.9%, down 120 basis connections and a corresponding decline in the points from the year-earlier quarter with connected device base reflecting subscriber activity lower volumes, increased cost efficiencies prior to the third quarter. and lower depreciation expense partially offsetting revenue pressure. Prepaid Net Adds ǋǋ Consumer Mobility EBITDA margin was IN THOUSANDS 41.3%, compared to 42.5% in the third quarter of 2016. EBITDA service margin was 49.1%, 406 compared to 50.9% in the year-ago quarter. 324 (EBITDA service margin is operating income 304 282 before depreciation and amortization, divided 267 by total service revenues.)

EBITDA Service Margin

50.9% 3Q16 4Q16 1Q17 2Q17 3Q17* 50.1% 49.1% 48.6% *Eﬀ ective July 1, 2017 we prospectively reclassiﬁ ed prepaid internet of 46.1% things (IoT) connections from connected devices to prepaid.

ǋǋ Consumer Mobility postpaid churn was 1.17%, down from 1.19% in the year-ago quarter. Consumer Mobility postpaid phone churn was 3Q16 4Q16 1Q17 2Q17 3Q17 0.93% versus 1.03% in the year-ago quarter.

9 CONTENTS Investor Briefing Q3 International

The International segment includes wireless services in Mexico and satellite entertainment services in Latin America. AT&T is a leading provider of pay television services in Latin America with satellite operations serving Argentina, Brazil, Chile, Colombia, Ecuador, Peru, Uruguay, Venezuela and parts of the Caribbean. The company also owns 41% of Sky Mexico. Sky Mexico financial results are accounted for as an equity-method investment.

Total International revenues totaled $2.1 billion, up ǋǋ Third-quarter operating loss was $224 million from $1.9 billion in the year-ago quarter. Third- compared to a loss of $148 million in the quarter operating expenses were $2.2 billion. AT&T’s year-ago quarter, reflecting additional customer International operating loss totaled ($142 million), acquisition expenses, foreign exchange and compared to ($54 million) in the year-ago third one-time items in the year-ago quarter. quarter. Third-quarter operating income margin was (6.8)%. ǋǋ In the quarter, AT&T added 129,000 postpaid subscribers and 585,000 prepaid subscribers to reach 13.8 million total wireless subscribers in Revenues Mexico, a 29% increase from a year ago. IN BILLIONS $2.1 $1.9 $1.9 $1.9 $2.0 $0.7 Wireless Subscribers - Mexico $0.6 $0.6 $0.6 $0.7 IN MILLIONS 13.1 13.8 12.6 0.2 12.0 0.2 0.3 10.7 0.3 8.2 0.3 $1.4 $1.4 7.6 $1.3 $1.3 $1.3 7.2 6.7 5.7

3Q16 4Q16 1Q17 2Q17 3Q17 5.3 5.2 5.1 Latin America Mexico Wireless 5.0 4.7

3Q16 4Q16 1Q17 2Q17 3Q17 MEXICO Postpaid Prepaid Other AT&T owns and operates a wireless network in Mexico. AT&T covered more than 90 million people in Mexico DIRECTV LATIN AMERICA with 4G LTE at the end of the third quarter and expects to cover approximately 100 million POPs by DIRECTV Latin America revenues reflect price the end of 2018. increases driven by macroeconomic conditions with mixed local currencies. Total revenues from ǋǋ Wireless revenues from Mexico were $736 million, Latin America were $1.4 billion, up 5.1%. Operating up 26.5% versus the year-earlier quarter, largely income was $82 million. due to subscriber growth, which was partially offset by competitive pricing. ǋǋ Third-quarter subscriber net losses were 132,000 with prepaid losses in Brazil offsetting gains in other countries. Total subscribers at the end of the quarter were 13.5 million. Sky Mexico had approximately 8.0 million subscribers as of June 30, 2017.

10 CONTENTS Investor Briefing Q3 AT&T Mobility

AT&T’s U.S. mobility operations are divided between the Business Solutions and Consumer Mobility segments. For comparison purposes, the company is providing supplemental information for its total domestic mobility operations.

FINANCIAL HIGHLIGHTS Revenues and EBITDA Service Margins IN BILLIONS Wireless revenues reflected lower service revenues $18.8 $18.2 $17.5 $17.4 from the continued adoption of unlimited plans and $17.2 lower equipment revenues from fewer postpaid gross 50.4% 50.4% adds and upgrades than in the year-ago quarter. 50.1% 45.4% 49.3% ǋǋ Total wireless revenues were $17.4 billion, down 4.2% year over year, due to decreases in service $7.5 and equipment revenues. Wireless service revenues $6.7 $7.2 $7.3 $7.3 of $14.5 billion were down 2.8% year over year. Wireless equipment revenues decreased 10.3% to 3Q16 4Q16 1Q17 2Q17 3Q17 $2.9 billion reflecting customers’ decisions to hold Revenues EBITDA EBITDA Service Margin onto their devices longer.

ǋǋ Third-quarter wireless operating expenses totaled ARPU $12.1 billion, down 5.3% year over year, reflecting lower volumes, increased cost efficiencies and The continued adoption of unlimited plans and lower lower depreciation expenses. Wireless operating equipment revenues from fewer postpaid gross adds income was $5.3 billion, down 1.4% year over year. and upgrades is reflected in postpaid service ARPU (average revenues per user). ǋǋ Wireless margins continued to be strong and reflect fewer smartphone upgrades and ǋǋ Phone-only postpaid ARPU decreased 2.3% versus continued success in driving operating costs the year-earlier quarter. Phone-only postpaid out of the business. AT&T’s third-quarter wireless ARPU with AT&T Next monthly billings decreased operating income margin was 30.5%, up 90 basis 1.5% year over year as customers continue points from the year-earlier quarter. holding onto their devices after completing AT&T Next payments. ǋǋ Wireless EBITDA margin was the highest ever at 42.0%, compared to 41.2% in the third quarter Phone-only Postpaid + Next ARPU of 2016. Wireless EBITDA service margin was also a record 50.4%, compared to 50.1% in the $69.99 $69.54 $68.81 $69.04 $68.95

year-ago quarter. $10.35 $10.70 $10.72 $10.74 $10.66

$59.64 $58.84 $58.09 $58.30 $58.29

3Q16 4Q16 1Q17 2Q17 3Q17 Phone-only Postpaid ARPU EIP Billings

11 CONTENTS Investor Briefing Q3 AT&T Mobility

SUBSCRIBER METRICS ǋǋ The company had 441,000 branded net adds (both postpaid and prepaid) in the quarter, In the third quarter, AT&T posted a net increase including a gain of 93,000 branded smartphones. in total wireless subscribers of 2.3 million to reach 138.8 million in service. SMARTPHONES ǋǋ The company had a net gain of 117,000 postpaid subscribers. As disclosed earlier, the company is The company’s branded smartphone base continued reporting prepaid Internet of Things (IoT) to grow in the quarter, and even more customers connections in its prepaid category. These moved off the subsidy model — either choosing AT&T connections primarily relate to customers who Next or bringing their own devices. choose to subscribe to vehicle connectivity. The company added 324,000 prepaid subscribers, Branded Phone Subscribers & which included 227,000 prepaid phone subscribers Postpaid Upgrade Rate with gains in both Cricket and AT&T PREPAID. IN MILLIONS AT&T also added 2.3 million connected devices in 78.4 78.7 78.6 78.8 78.8 the quarter and lost 392,000 reseller subscribers 13.0 13.5 13.8 14.2 14.5 in the quarter. Postpaid tablet and computing 6.7 6.1 5.8 5.4 5.0 device net adds were 132,000 with a loss of 97,000 postpaid phones, a significant improvement 58.7 59.1 59.0 59.2 59.3 year over year.

6.3% 5.1% 4.1% 3.9% 3.9% Wireless Subscribers 3Q16 4Q16 1Q17 2Q17 3Q17 IN MILLIONS Prepaid Postpaid Feature Postpaid Postpaid 138.8 136.5 Phones Phones & Other Smartphones Upgrade Rate 133.3 134.9 134.2 36.4 34.7 30.3 31.6 32.4 12.6 11.9 10.6 10.3 9.9 ǋǋ The company had 6.4 million branded 13.0 13.5 13.8 14.2 15.1 smartphone gross adds and upgrades in the quarter, including 2.0 million from prepaid. The 77.4 77.8 77.3 77.4 77.4 postpaid upgrade rate in the quarter was 3.9%.

ǋǋ Sales on AT&T Next were 3.5 million, or 81% 3Q16 4Q16 1Q17 2Q17 3Q17 of all postpaid smartphone gross adds and Postpaid Prepaid Reseller Connected Devices upgrades. The company also had 487,000 BYOD gross adds. That means about 92% of postpaid smartphone transactions in the quarter were on non-subsidy plans.

Branded Net Adds More than 50% of the company’s postpaid IN THOUSANDS smartphone base is currently on AT&T Next, 926 with 88% of postpaid smartphone subscribers 406 on no-device-subsidy plans. 516 441 304 394 520 91 267 324 212 282 127 117 (191) 3Q16 4Q16 1Q17 2Q17 3Q17

Postpaid Prepaid

12 CONTENTS Investor Briefing Q3 AT&T Mobility

CHURN Postpaid churn was 1.07%, up slightly from the year- ago quarter due to higher tablet churn. Postpaid phone churn was a record low for a third quarter of 0.84%, compared to 0.90% in the year-ago quarter. Branded churn was 1.70%, compared to 1.63% in the year-ago quarter. Total churn was 1.32%, down from 1.45% in the year-ago quarter.

Postpaid Churn

1.05% 1.16% 1.12% 1.07% 1.01%

0.98% 0.90% 0.90% 0.79% 0.84%

3Q16 4Q16 1Q17 2Q17 3Q17 Postpaid Churn Postpaid Phone Churn

13 CONTENTS Investor Briefing Q3 Highlights

AT&T helps millions around the globe connect with leading entertainment, mobile, high-speed internet and voice services. The company is one of the world’s largest providers of pay TV with customers in the U.S. and 11 Latin American countries. And it helps businesses worldwide serve their customers better with mobility and highly secure cloud solutions.

In recent weeks, AT&T: ǋǋ Introduced World Connect Advantage as its lead international long distance offer, letting customers make unlimited wireless calls to landline numbers NATURAL DISASTER RESPONSE in 70 countries and wireless numbers in 36 of ǋǋ Kept customers connected to their friends, family those countries for only $15 a month. and businesses through Hurricanes Harvey, Irma, Nate and Maria, multiple earthquakes in Mexico ǋǋ Was named Best-in-Class in Forrester’s 2017 U.S. and wildfires across Northern California. The Customer Experience Index (CX IndexTM) for the company deployed its fleet of network recovery company’s Cricket Wireless brand.1 technologies as needed, including drones, Cell on Wheels, Cell on Light Trucks, emergency communication vehicles and portable and fixed ENTERTAINMENT generators. During these recent natural disasters, ǋǋ Introduced and began beta testing the company’s AT&T provided unlimited calls, texts and data for next-generation video platform that will eventually its affected customers. Additionally, the company support its video delivery services. The beta established multiple text-to-donate programs for platform includes exciting new features such as consumers and internal giving campaigns for its Cloud DVR. employees to support recovery efforts. ǋǋ Launched Fixed Wireless Internet availability across 9 additional states: Arkansas, California, WIRELESS Illinois, Indiana, Kansas, Michigan, Ohio, Texas and ǋǋ Expanded “HBO for Life” to new and existing Wisconsin. The service is now available to more AT&T Unlimited Choice customers, letting all than 160,000 locations across 18 states. This is customers with AT&T Unlimited Choice or AT&T part of the company’s FCC Connect America Unlimited Plus enjoy HBO included in their Fund commitment to serve more than 1.1 million wireless plan. locations by 2020.

ǋǋ Increased the company’s offerings of 5G Evolution capable devices, expanding its portfolio to include the Motorola Z2 Force Edition, LG V30, Samsung Galaxy S8 Active and Samsung Galaxy Note8.

1 Best In Class Status = Cricket Wireless received a Best In Class ranking (a top-15 brand) among all 314 brands covered in Forrester’s proprietary 2017 US CX Index™ survey. The ranking was based on responses from 118,992 US individuals ages 18 to 88. The proprietary survey results are based on consumers’ opinions of their experiences with the brands in the survey. Forrester Research does not endorse any company included in any CX Index™ report and does not advise any person to select the products or services of any particular company based on the ratings included in such reports.

14 CONTENTS Investor Briefing Q3 Highlights

ǋǋ Expanded the company’s 100% fiber network ǋǋ Signed a contract to modernize the U.S. Army’s powered by AT&T Fiber to parts of Biloxi-Gulfport, communications. We’re providing collaboration Miss., Columbus, Ga., Lafayette, La., Macon, Ga., capabilities to support 1 million users worldwide. Montgomery, Ga. and Savannah Ga. Ultra-fast speeds are now available in parts of 61 metros ǋǋ Introduced, on a limited availability basis, a new with plans to reach at least 14 more metros. cloud-to-cloud feature for AT&T NetBond® for AT&T now markets the ultra-fast service to more Cloud that efficiently moves workloads across than 6 million locations. The company plans to highly secure connections between public, private reach at least 7 million locations by the end and hybrid cloud services in the NetBond for of 2017. Cloud ecosystem. By implementing this feature, a business can connect each ecosystem cloud — ǋǋ Announced the additions of CBS and SHOWTIME private or public — to another over a private to the DIRECTV NOW platform and added more AT&T MPLS VPN connection. than 80 new local affiliate stations, for a total of more than 180 live local channels. The ǋǋ Formed a cross-carrier alliance, the Mobile company now offers at least one live local Authentication Taskforce, to address mobile channel to more than 75% of U.S. households authentication issues currently facing the industry as of October 23, 2017. and consumers. Comprised of AT&T, Verizon, T-Mobile and Sprint, the taskforce will collaborate ǋǋ Debuted Mr. Mercedes, a new original series based to develop an innovative identity authentication on Stephen King’s best-selling detective novel, on solution. AT&T AUDIENCE Network to critical acclaim and strong audience reception. ǋǋ Announced plans for AT&T Asset Management- Operations Center – a new cloud-enabled IoT ǋǋ Hosted AT&T SHAPE, an immersive tech and solution connecting to multiple devices and entertainment expo in Hollywood that explored multiple cloud infrastructures for tracking, the convergence of technology and monitoring and managing deployed IoT assets. entertainment. More than 10,000 registered to attend this flagship event, which featured ǋǋ Announced that AT&T will offer unlimited data speakers, interactive demos and hands-on plans for in-vehicle 4G LTE Wi-Fi hotspots in 2018 creation activities. Honda Odyssey minivans and 2018 Chrysler Pacifica minivans.

BUSINESS ǋǋ Was selected by Omnicom Group to deploy a universal global network solution that will increase ǋǋ Continued to gain FirstNet momentum to efficiencies and deliver an added level of security support public safety communications needs. for the company and its clients. To date, 27 states and territories have announced their decisions to opt-in to the FirstNet network. On Sept. 29, FirstNet started the 90-day timeline INTERNATIONAL for undecided states to make their decision to opt in or out of the FirstNet network. ǋǋ Maintained the most reliable voice and data network in Mexico and the largest high-speed ǋǋ Announced an innovative strategic collaboration 4G LTE network in North America, covering over between Walt Disney World Resort and AT&T to 400 million people and businesses. AT&T now develop an interactive mobile application proof of covers more than 90 million people in Mexico, concept. It is designed to improve response to a up from 78 million at the end of 2016. work order as drawings, procedures, maintenance manuals and other important information are ǋǋ Successfully performed LTE-M pilots in Tijuana auto loaded onto Disney employees' tablets as and Puebla, including the first LTE-M international they arrive at the site of a service request. data session between the United States and Mexico. AT&T is on track to deploy LTE-M across its network in Mexico by the end of 2017.

15 CONTENTS Investor Briefing Q3

FOURTH-QUARTER 2017 EARNINGS AT&T INVESTOR BRIEFING DATE: JANUARY 31, 2018 The AT&T Investor Briefing is published by the Investor AT&T will release fourth-quarter 2017 earnings Relations staff of AT&T Inc. Requests for further on January 31, 2018, after the market closes. information may be directed to one of the Investor Relations managers by phone at 210-351-3327. The company’s Investor Briefing and related earnings materials will be available on the AT&T website at Correspondence should be sent to: https://investors.att.com by 4:30 p.m. Eastern time. Investor Relations AT&T Inc. AT&T will also host a conference call to discuss the 208 S. Akard Street results at 4:30 p.m. Eastern time the same day. Dial-in Dallas, TX 75202 and replay information will be announced on First Call approximately 8 weeks before the call, which will also Email address: be broadcast live and will be available for replay over [email protected] the internet at https://investors.att.com. Senior Vice President-Investor Relations Mike Viola CAUTIONARY LANGUAGE CONCERNING FORWARD- Investor Relations Staff LOOKING STATEMENTS Jamie Anderson Information set forth in this Investor Briefing contains Tim Bever financial estimates and other forward-looking Michael Black statements that are subject to risks and uncertainties, Jeston Dumas and actual results may differ materially. A discussion Kent Evans of factors that may affect future results is contained Matt Gallaher in AT&T’s filings with the Securities and Exchange Martin Sheehan Commission. AT&T disclaims any obligation to update Chris Womack or revise statements contained in this Investor Briefing based on new information or otherwise. This Investor Briefing may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are included in the exhibits to the Investor Briefing and are available on the company’s website at https://investors.att.com.

16 CONTENTS Investor Briefing Q3 FinancialBusiness & Operational Solutions Information

AT&T Inc. Financial Data AT&T INC. FINANCIAL DATA

Consolidated Statements of Income Dollars in millions except per share amounts Three Months Ended Nine Months Ended Unaudited September 30, Percent September 30, Percent

2017 2016 Change 2017 2016 Change Operating Revenues Service $ 36,378 $ 37,272 -2.4 % $ 109,372 $ 111,515 -1.9 % Equipment 3,290 3,618 -9.1 % 9,498 10,430 -8.9 % Total Operating Revenues 39,668 40,890 -3.0 % 118,870 121,945 -2.5 %

Operating Expenses Cost of services and sales Equipment 4,191 4,455 -5.9 % 12,177 13,090 -7.0 % Broadcast, programming and operations 5,284 4,909 7.6 % 15,156 14,239 6.4 % Other cost of services (exclusive of depreciation 9,431 9,526 -1.0 % 27,714 28,436 -2.5 % Selling, general and administrative 8,317 9,013 -7.7 % 24,917 26,363 -5.5 % Depreciation and amortization 6,042 6,579 -8.2 % 18,316 19,718 -7.1 % Total Operating Expenses 33,265 34,482 -3.5 % 98,280 101,846 -3.5 % Operating Income 6,403 6,408 -0.1 % 20,590 20,099 2.4 % Interest Expense (1,686) (1,224) 37.7 % (4,374) (3,689) 18.6 % Equity in Net Income (Loss) of Affiliates 11 16 -31.3 % (148) 57 - % Other Income (Expense) - Net 246 (7) - % 354 154 - % Income Before Income Taxes 4,974 5,193 -4.2 % 16,422 16,621 -1.2 % Income Tax Expense 1,851 1,775 4.3 % 5,711 5,803 -1.6 % Net Income 3,123 3,418 -8.6 % 10,711 10,818 -1.0 % Less: Net Income Attributable to (94) (90) 4.4 % (298) (279) 6.8 % Net Income Attributable to AT&T $ 3,029 $ 3,328 -9.0 % $ 10,413 $ 10,539 -1.2 %

Basic Earnings Per Share Attributable to AT&T $ 0.49 $ 0.54 -9.3 % $ 1.69 $ 1.70 -0.6 % Weighted Average Common 6,162 6,168 -0.1 % 6,164 6,171 -0.1 %

Diluted Earnings Per Share Attributable to AT&T $ 0.49 $ 0.54 -9.3 % $ 1.69 $ 1.70 -0.6 % Weighted Average Common 6,182 6,189 -0.1 % 6,184 6,191 -0.1 %

17 CONTENTS Investor Briefing Q3 Financial & Operational Information

AT&T Inc. AT&TFinancial INC. Data FINANCIAL DATA

Consolidated Balance Sheets Dollars in millions Unaudited Sep. 30, Dec. 31, 2017 2016 Assets Current Assets Cash and cash equivalents $ 48,499 $ 5,788 Accounts receivable - net of allowances for doubtful accounts of $741 and $661 15,876 16,794 Prepaid expenses 1,258 1,555 Other current assets 10,724 14,232 Total current assets 76,357 38,369 Property, Plant and Equipment - Net 126,462 124,899 Goodwill 105,668 105,207 Licenses 96,071 94,176 Customer Lists and Relationships - Net 11,573 14,243 Other Intangible Assets - Net 7,775 8,441 Investments in Equity Affiliates 1,627 1,674 Other Assets 18,332 16,812 Total Assets $ 443,865 $ 403,821

Liabilities and Stockholders' Equity Current Liabilities Debt maturing within one year $ 8,551 $ 9,832 Accounts payable and accrued liabilities 28,928 31,138 Advanced billing and customer deposits 4,503 4,519 Accrued taxes 2,703 2,079 Dividends payable 3,008 3,008 Total current liabilities 47,693 50,576 Long-Term Debt 154,728 113,681 Deferred Credits and Other Noncurrent Liabilities Deferred income taxes 64,381 60,128 Postemployment benefit obligation 31,231 33,578 Other noncurrent liabilities 19,723 21,748 Total deferred credits and other noncurrent liabilities 115,335 115,454 Stockholders' Equity Common stock 6,495 6,495 Additional paid-in capital 89,527 89,604 Retained earnings 36,074 34,734 Treasury stock (12,716) (12,659) Accumulated other comprehensive income 5,580 4,961 Noncontrolling interest 1,149 975 Total stockholders' equity 126,109 124,110 Total Liabilities and Stockholders' Equity $ 443,865 $ 403,821

18 CONTENTS Investor Briefing Q3 Financial & Operational Information

AT&T Inc. Financial Data AT&T INC. FINANCIAL DATA

Consolidated Statements of Cash Flows Dollars in millions Nine Months Ended Unaudited September 30, 2017 2016 Operating Activities Net income $ 10,711 $ 10,818 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 18,316 19,718 Undistributed loss (earnings) from investments in equity affiliates 171 (22) Provision for uncollectible accounts 1,216 1,036 Deferred income tax expense 3,254 3,011 Net loss (gain) from sale of investments, net of impairments (114) (88) Actuarial loss (gain) on pension and postretirement benefits (259) - Changes in operating assets and liabilities: Accounts receivable (652) (1,108) Other current assets (106) 1,805 Accounts payable and other accrued liabilities (1,437) (1,173) Equipment installment receivables and related sales 1,116 207 Deferred fulfillment costs (1,102) (1,883) Retirement benefit funding (420) (770) Other - net (1,420) (2,349) Total adjustments 18,563 18,384 Net Cash Provided by Operating Activities 29,274 29,202

Investing Activities Capital expenditures: Purchase of property and equipment (15,756) (15,283) Interest during construction (718) (669) Acquisitions, net of cash acquired 1,154 (2,922) Dispositions 56 184 (Purchases) sales of securities, net (2) 501 Net Cash Used in Investing Activities (15,266) (18,189)

Financing Activities Issuance of long-term debt 46,761 10,140 Repayment of long-term debt (10,309) (10,688) Purchase of treasury stock (460) (444) Issuance of treasury stock 26 137 Dividends paid (9,030) (8,850) Other 1,715 (534) Net Cash Provided by (Used in) Financing Activities 28,703 (10,239) Net increase in cash and cash equivalents 42,711 774 Cash and cash equivalents beginning of year 5,788 5,121 Cash and Cash Equivalents End of Period $ 48,499 $ 5,895

19 CONTENTS Investor Briefing Q3 Financial & Operational Information

AT&T Inc. AT&TConsolidated INC. FINANCIAL Supplementary DATA Data

Supplementary Financial Data Dollars in millions except per share amounts Three Months Ended Nine Months Ended Unaudited September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Capital expenditures Purchase of property and equipment $ 5,006 $ 5,581 -10.3 % $ 15,756 $ 15,283 3.1 % Interest during construction $ 245 $ 232 5.6 % $ 718 $ 669 7.3 %

Dividends Declared per Share $ 0.49 $ 0.48 2.1 % $ 1.47 $ 1.44 2.1 %

End of Period Common Shares Outstanding (000,000) 6,139 6,141 - % Debt Ratio 56.4 % 50.1 % 630 BP Total Employees 256,800 273,140 -6.0 %

Supplementary Operating Data Subscribers and connections in thousands Unaudited September 30, Percent 2017 2016 Change Wireless Subscribers Domestic 138,826 133,338 4.1 % Mexico 13,779 10,698 28.8 % Total Wireless Subscribers 152,605 144,036 5.9 %

Total Branded Wireless Subscribers 106,098 100,821 5.2 %

Video Connections Domestic 25,110 25,321 -0.8 % PanAmericana 8,201 7,139 14.9 % Brazil 5,289 5,337 -0.9 % Total Video Connections 38,600 37,797 2.1 %

Broadband Connections IP 14,384 13,715 4.9 % DSL 1,331 1,903 -30.1 % Total Broadband Connections 15,715 15,618 0.6 %

Voice Connections Network Access Lines 12,249 14,603 -16.1 % U-verse VoIP Connections 5,774 5,707 1.2 % Total Retail Consumer Voice Connections 18,023 20,310 -11.3 %

Three Months Ended Nine Months Ended September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Wireless Net Additions Domestic 2,323 1,532 51.6 % 6,686 4,674 43.0 % Mexico 697 743 -6.2 % 1,806 2,014 -10.3 % Total Wireless Net Additions 3,020 2,275 32.7 % 8,492 6,688 27.0 %

Total Branded Wireless Net Additions 1,156 1,285 -10.0 % 2,782 3,881 -28.3 %

Video Net Additions Domestic (90) (2) - % (450) (103) - % PanAmericana 98 (36) - % 163 73 - % Brazil (230) (12) - % (260) (107) - % Total Video Net Additions (222) (50) - % (547) (137) - %

Broadband Net Additions IP 150 171 -12.3 % 520 447 16.3 % DSL (121) (194) 37.6 % (410) (607) 32.5 % Total Broadband Net Additions 29 (23) - % 110 (160) - %

20 CONTENTS Investor Briefing Q3 Financial & Operational Information

BUSINESS SOLUTIONS The Business Solutions segment provides services to business customers, including multinational companies; governmentalBUSINESS and SOLUTIONS wholesale customers; and individual subscribers who purchase wireless services through employer-sponsored plans. We provide advanced IP-based services including Virtual Private Networks (VPN); The Business Solutions segment provides services to business customers, including multinational companies; governmental and wholesale Ethernet-relatedcustomers; and products individual subscribers and broadband, who purchase wireless collectively services through referred employer-sponsored to as strategic plans. We providebusiness advanced services; IP-based services as well as traditionalincluding data Virtual and Private voice Networks products. (VPN); Ethernet-related We utilize products our wireless and broadband, and collectively wired referrednetworks to as strategic (referred busine ssto services; as “wired” as well as or “wireline”)traditional to provide data and a voice complete products. We communications utilize our wireless and wired solution networks to(referred our to business as “wired” or “wireline”)customers. to provide a complete communications solution to our business customers.

Segment Results Dollars in millions Three Months Ended Nine Months Ended Unaudited September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Segment Operating Revenues Wireless service $ 8,034 $ 8,050 -0.2 % $ 23,969 $ 23,868 0.4 % Fixed strategic services 3,087 2,913 6.0 % 9,089 8,469 7.3 % Legacy voice and data services 3,434 4,042 -15.0 % 10,572 12,577 -15.9 % Other service and equipment 852 886 -3.8 % 2,513 2,619 -4.0 % Wireless equipment 1,654 1,876 -11.8 % 4,873 5,422 -10.1 % Total Segment Operating Revenues 17,061 17,767 -4.0 % 51,016 52,955 -3.7 %

Segment Operating Expenses Operations and support expenses 10,233 10,925 -6.3 % 30,722 32,584 -5.7 % Depreciation and amortization 2,325 2,539 -8.4 % 6,972 7,568 -7.9 % Total Segment Operating Expenses 12,558 13,464 -6.7 % 37,694 40,152 -6.1 % Segment Operating Income 4,503 4,303 4.6 % 13,322 12,803 4.1 % Equity in Net Income of Affiliates - - - % - - - % Segment Contribution $ 4,503 $ 4,303 4.6 % $ 13,322 $ 12,803 4.1 %

Segment Operating Income Margin 26.4 % 24.2 % 26.1 % 24.2 %

Supplementary Operating Data Subscribers and connections in thousands Unaudited September 30, Percent 2017 2016 Change Business Solutions Wireless Subscribers Postpaid/Branded 51,412 50,014 2.8 % Reseller 77 58 32.8 % Connected Devices 35,909 29,355 22.3 % Total Business Solutions Wireless Subscribers 87,398 79,427 10.0 %

Business Solutions IP Broadband Connections 1,017 963 5.6 %

Three Months Ended Nine Months Ended September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Business Solutions Wireless Net Additions Postpaid/Branded 15 191 -92.1 % (74) 509 - % Reseller 2 1 - % 3 (34) - % Connected Devices 2,292 1,290 77.7 % 7,015 4,067 72.5 % Total Business Solutions Wireless Net Additions 2,309 1,482 55.8 % 6,944 4,542 52.9 %

Business Solutions Wireless Postpaid Churn 1.01 % 0.97 % 4 BP 1.02 % 0.97 % 5 BP Business Solutions IP Broadband

Net Additions 25 15 66.7 % 41 52 -21.2 %

21 CONTENTS Investor Briefing Q3 Financial & Operational Information

ENTERTAINMENT GROUP The EntertainmentENTERTAINMENT Group GROUP segment provides video, internet, voice communication, and interactive and targeted advertising services to customers located in the U.S. or in U.S. territories. We utilize our copper and IP-based The Entertainment Group segment provides video, internet, voice communication, and interactive and targeted advertising services to customers wired networklocated in theand/or U.S. or inour U.S. territories. satellite We utilizetechnology. our copper and IP-based wired network and/or our satellite technology.

Segment Results Dollars in millions Three Months Ended Nine Months Ended Unaudited September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Segment Operating Revenues Video entertainment $ 9,200 $ 9,026 1.9 % $ 27,373 $ 26,893 1.8 % High-speed internet 1,916 1,892 1.3 % 5,784 5,562 4.0 % Legacy voice and data services 949 1,168 -18.8 % 3,010 3,725 -19.2 % Other service and equipment 583 634 -8.0 % 1,786 1,909 -6.4 % Total Segment Operating Revenues 12,648 12,720 -0.6 % 37,953 38,089 -0.4 %

Segment Operating Expenses Operations and support expenses 9,953 9,728 2.3 % 29,112 28,875 0.8 % Depreciation and amortization 1,379 1,504 -8.3 % 4,256 4,481 -5.0 % Total Segment Operating Expenses 11,332 11,232 0.9 % 33,368 33,356 - % Segment Operating Income 1,316 1,488 -11.6 % 4,585 4,733 -3.1 % Equity in Net Income (Loss) of Affiliates (6) - - % (23) 1 - % Segment Contribution $ 1,310 $ 1,488 -12.0 % $ 4,562 $ 4,734 -3.6 %

Segment Operating Income Margin 10.4 % 11.7 % 12.1 % 12.4 %

Supplementary Operating Data Subscribers and connections in thousands Unaudited September 30, Percent 2017 2016 Change Video Connections Satellite 20,605 20,777 -0.8 % U-verse 3,691 4,515 -18.3 % DIRECTV NOW 787 - - % Total Video Connections 25,083 25,292 -0.8 %

Broadband Connections IP 13,367 12,752 4.8 % DSL 964 1,424 -32.3 % Total Broadband Connections 14,331 14,176 1.1 %

Voice Connections Retail Consumer Switched Access Lines 4,996 6,155 -18.8 % U-verse Consumer VoIP Connections 5,337 5,378 -0.8 % Total Retail Consumer Voice Connections 10,333 11,533 -10.4 %

Three Months Ended Nine Months Ended September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Video Net Additions Satellite (251) 323 - % (407) 993 - % U-verse (134) (326) 58.9 % (562) (1,099) 48.9 % DIRECTV NOW 296 - - % 520 - - % Total Video Net Additions (89) (3) - % (449) (106) - %

Broadband Net Additions IP 125 156 -19.9 % 479 396 21.0 % DSL (96) (161) 40.4 % (327) (506) 35.4 % Total Broadband Net Additions 29 (5) - % 152 (110) - %

22 CONTENTS Investor Briefing Q3 Financial & Operational Information

CONSUMER MOBILITY CONSUMER MOBILITY The Consumer Mobility segment provides nationwide wireless service to consumers and wholesale and resale wirelessThe Consumer subscribers Mobility located segment provides in the nationwide U.S. or wirelessin U.S. service territories. to consumers We and utilize wholesale our and U.S. resale wireless wireless subscribers network located to provide in the U.S. voiceor and in U.S. data territories. services, We utilize including our U.S. wireless high-speed network to provide internet, voice andvideo, data services,and home including monitoring high-speed internet, services. video, and home monitoring services.

Segment Results Dollars in millions Three Months Ended Nine Months Ended Unaudited September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Segment Operating Revenues Service $ 6,507 $ 6,914 -5.9 % $ 19,644 $ 20,805 -5.6 % Equipment 1,241 1,353 -8.3 % 3,635 3,976 -8.6 % Total Segment Operating Revenues 7,748 8,267 -6.3 % 23,279 24,781 -6.1 %

Segment Operating Expenses Operations and support expenses 4,551 4,751 -4.2 % 13,599 14,343 -5.2 % Depreciation and amortization 877 944 -7.1 % 2,621 2,798 -6.3 % Total Segment Operating Expenses 5,428 5,695 -4.7 % 16,220 17,141 -5.4 % Segment Operating Income 2,320 2,572 -9.8 % 7,059 7,640 -7.6 % Equity in Net Income of Affiliates - - - % - - - % Segment Contribution $ 2,320 $ 2,572 -9.8 % $ 7,059 $ 7,640 -7.6 %

Segment Operating Income Margin 29.9 % 31.1 % 30.3 % 30.8 %

Supplementary Operating Data Subscribers and connections in thousands Unaudited September 30, Percent 2017 2016 Change Consumer Mobility Subscribers Postpaid 26,003 27,374 -5.0 % Prepaid 15,136 13,035 16.1 % Branded 41,139 40,409 1.8 % Reseller 9,800 12,566 -22.0 % Connected Devices 489 936 -47.8 % Total Consumer Mobility Subscribers 51,428 53,911 -4.6 %

Three Months Ended Nine Months Ended September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Consumer Mobility Net Additions Postpaid 102 21 - % 127 89 42.7 % Prepaid 1 324 304 6.6 % 873 1,169 -25.3 % Branded 426 325 31.1 % 1,000 1,258 -20.5 % Reseller (394) (316) -24.7 % (1,345) (1,140) -18.0 % Connected Devices1 (18) 41 - % 87 14 - % Total Consumer Mobility Net Additions 14 50 -72.0 % (258) 132 - %

Total Churn 2.37 % 2.11 % 26 BP 2.32 % 2.06 % 26 BP Postpaid1Effective Churn July 1, 2017 we prospectively reclassified prepaid 1.17internet% of things 1.19 (IoT)% connections -2 BP from connected 1.16 % devices 1.17 % -1 BP

to prepaid.

23 CONTENTS Investor Briefing Q3 Financial & Operational Information

INTERNATIONAL The InternationalINTERNATIONAL segment provides entertainment services in Latin America and wireless services in Mexico. Video entertainment services are provided to primarily residential customers using satellite technology. We

utilize ourThe regionalInternational andsegment national provides entertainment wireless networksservices in Latin in America Mexico and wireless to provide services in consumer Mexico. Video entertainment and business services customers are with wirelessprovided data to primarily and residential voice customerscommunication using satellite technology.services. We Our utilize international our regional and national subsidiaries wireless networks conduct in Mexico business to provide in their local currencyconsumer and business operating customers results with wireless are data converted and voice communication to U.S. dollars services. Our using international official subsidiaries exchange conduct bus rates.iness in their local currency and operating results are converted to U.S. dollars using official exchange rates.

Segment Results Dollars in millions Three Months Ended Nine Months Ended Unaudited September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Segment Operating Revenues Video entertainment $ 1,363 $ 1,297 5.1 % $ 4,065 $ 3,649 11.4 % Wireless service 536 484 10.7 % 1,546 1,428 8.3 % Wireless equipment 200 98 - % 443 297 49.2 % Total Segment Operating Revenues 2,099 1,879 11.7 % 6,054 5,374 12.7 %

Segment Operating Expenses Operations and support expenses 1,937 1,640 18.1 % 5,468 4,951 10.4 % Depreciation and amortization 304 293 3.8 % 905 868 4.3 % Total Segment Operating Expenses 2,241 1,933 15.9 % 6,373 5,819 9.5 % Segment Operating Income (Loss) (142) (54) - % (319) (445) 28.3 % Equity in Net Income (Loss) of Affiliates 17 1 - % 62 24 - % Segment Contribution $ (125) $ (53) - % $ (257) $ (421) 39.0 %

Segment Operating Income Margin (6.8) % (2.9) % (5.3) % (8.3) %

Supplementary Operating Data Subscribers and connections in thousands Unaudited September 30, Percent 2017 2016 Change Mexican Wireless Subscribers Postpaid 5,316 4,733 12.3 % Prepaid 8,231 5,665 45.3 % Branded 13,547 10,398 30.3 % Reseller 232 300 -22.7 % Total Mexican Wireless Subscribers 13,779 10,698 28.8 %

Latin America Satellite Subscribers PanAmericana 8,201 7,139 14.9 % SKY Brazil 5,289 5,337 -0.9 % Total Latin America Satellite Subscribers 13,490 12,476 8.1 %

Three Months Ended Nine Months Ended September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Mexican Wireless Net Additions Postpaid 129 163 -20.9 % 351 444 -20.9 % Prepaid 585 606 -3.5 % 1,504 1,670 -9.9 % Branded 714 769 -7.2 % 1,855 2,114 -12.3 % Reseller (17) (26) 34.6 % (49) (100) 51.0 % Total Mexican Wireless Net Additions 697 743 -6.2 % 1,806 2,014 -10.3 %

Latin America Satellite Net Additions PanAmericana 98 (36) - % 163 73 - % SKY Brazil (230) (12) - % (260) (107) - % Total Latin America Satellite Net Additions (132) (48) - % (97) (34) - %

24 CONTENTS Investor Briefing Q3 Financial & Operational Information

SUPPLEMENTALSUPPLEMENTAL OPERATING OPERATING INFORMATIONINFORMATION - AT&T - AT&T MOBILITY MOBILITY As a supplemental discussion of our operating results, for comparison purposes, we are providing a view of our combinedAs a supplemental domestic discussion wireless of our operating operations results, for comparison(AT&T Mobility). purposes, we are providing a view of our combined domestic wireless operations (AT&T Mobility).

Operating Results Dollars in millions Three Months Ended Nine Months Ended Unaudited September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change Operating Revenues Service $ 14,541 $ 14,964 -2.8 % $ 43,613 $ 44,673 -2.4 % Equipment 2,895 3,229 -10.3 % 8,508 9,398 -9.5 % Total Operating Revenues 17,436 18,193 -4.2 % 52,121 54,071 -3.6 %

Operating Expenses Operations and support expenses 10,113 10,697 -5.5 % 30,308 31,822 -4.8 % Depreciation and amortization 2,010 2,107 -4.6 % 5,999 6,244 -3.9 % Total Operating Expenses 12,123 12,804 -5.3 % 36,307 38,066 -4.6 % Operating Income $ 5,313 $ 5,389 -1.4 % $ 15,814 $ 16,005 -1.2 %

Operating Income Margin 30.5 % 29.6 % 30.3 % 29.6 %

Supplementary Operating Data Subscribers and connections in thousands Unaudited September 30, Percent 2017 2016 Change AT&T Mobility Subscribers Postpaid 77,415 77,388 - % Prepaid 15,136 13,035 16.1 % Branded 92,551 90,423 2.4 % Reseller 9,877 12,624 -21.8 % Connected Devices 36,398 30,291 20.2 % Total AT&T Mobility Subscribers 138,826 133,338 4.1 %

Domestic Licensed POPs (000,000) 326 323 0.9 %

Three Months Ended Nine Months Ended September 30, Percent September 30, Percent 2017 2016 Change 2017 2016 Change AT&T Mobility Net Additions Postpaid 117 212 -44.8 % 53 598 -91.1 % Prepaid 1 324 304 6.6 % 873 1,169 -25.3 % Branded 441 516 -14.5 % 926 1,767 -47.6 % Reseller (392) (315) -24.4 % (1,342) (1,174) -14.3 % Connected Devices1 2,274 1,331 70.8 % 7,102 4,081 74.0 % Total AT&T Mobility Net Additions 2,323 1,532 51.6 % 6,686 4,674 43.0 % M&A Activity, Partitioned Customers and 3 1 - % (2,720) 24 - %

Total Churn 1.32 % 1.45 % -13 BP 1.35 % 1.41 % -6 BP Postpaid Churn 1.07 % 1.05 % 2 BP 1.07 % 1.04 % 3 BP 1Effective July 1, 2017 we prospectively reclassified prepaid internet of things (IoT) connections from connected devices

to prepaid.

25 CONTENTS Investor Briefing Q3 Financial & Operational Information

SUPPLEMENTAL SEGMENT RECONCILIATION SUPPLEMENTAL SEGMENT RECONCILIATION

Three Months Ended Dollars in millions Unaudited

September 30, 2017 Operations Depreciation Equity in Net and Support and Operating Income (Loss) Segment Revenues Expenses EBITDA Amortization Income (Loss) of Affiliates Contribution Business Solutions $ 17,061 $ 10,233 $ 6,828 $ 2,325 $ 4,503 $ - $ 4,503 Entertainment Group 12,648 9,953 2,695 1,379 1,316 (6) 1,310 Consumer Mobility 7,748 4,551 3,197 877 2,320 - 2,320 International 2,099 1,937 162 304 (142) 17 (125) Segment Total 39,556 26,674 12,882 4,885 7,997 $ 11 $ 8,008 Corporate and Other 201 89 112 21 91 Acquisition-related items - 134 (134) 1,136 (1,270) Certain Significant items (89) 326 (415) - (415) AT&T Inc. $ 39,668 $ 27,223 $ 12,445 $ 6,042 $ 6,403

September 30, 2016 Operations Depreciation Equity in Net and Support and Operating Income (Loss) Segment Revenues Expenses EBITDA Amortization Income (Loss) of Affiliates Contribution Business Solutions $ 17,767 $ 10,925 $ 6,842 $ 2,539 $ 4,303 $ - $ 4,303 Entertainment Group 12,720 9,728 2,992 1,504 1,488 - 1,488 Consumer Mobility 8,267 4,751 3,516 944 2,572 - 2,572 International 1,879 1,640 239 293 (54) 1 (53) Segment Total 40,633 27,044 13,589 5,280 8,309 $ 1 $ 8,310 Corporate and Other 270 270 - 17 (17) Acquisition-related items - 290 (290) 1,282 (1,572) Certain Significant items (13) 299 (312) - (312) AT&T Inc. $ 40,890 $ 27,903 $ 12,987 $ 6,579 $ 6,408

Nine Months Ended Dollars in millions Unaudited

September 30, 2017 Operations Depreciation Equity in Net and Support and Operating Income (Loss) Segment Revenues Expenses EBITDA Amortization Income (Loss) of Affiliates Contribution Business Solutions $ 51,016 $ 30,722 $ 20,294 $ 6,972 $ 13,322 $ - $ 13,322 Entertainment Group 37,953 29,112 8,841 4,256 4,585 (23) 4,562 Consumer Mobility 23,279 13,599 9,680 2,621 7,059 - 7,059 International 6,054 5,468 586 905 (319) 62 (257) Segment Total 118,302 78,901 39,401 14,754 24,647 $ 39 $ 24,686 Corporate and Other 657 397 260 54 206 Acquisition-related items - 622 (622) 3,508 (4,130) Certain Significant items (89) 44 (133) - (133) AT&T Inc. $ 118,870 $ 79,964 $ 38,906 $ 18,316 $ 20,590

September 30, 2016 Operations Depreciation Equity in Net and Support and Operating Income (Loss) Segment Revenues Expenses EBITDA Amortization Income (Loss) of Affiliates Contribution Business Solutions $ 52,955 $ 32,584 $ 20,371 $ 7,568 $ 12,803 $ - $ 12,803 Entertainment Group 38,089 28,875 9,214 4,481 4,733 1 4,734 Consumer Mobility 24,781 14,343 10,438 2,798 7,640 - 7,640 International 5,374 4,951 423 868 (445) 24 (421) Segment Total 121,199 80,753 40,446 15,715 24,731 $ 25 $ 24,756 Corporate and Other 759 940 (181) 54 (235) Acquisition-related items - 818 (818) 3,949 (4,767) Certain Significant items (13) (383) 370 - 370 AT&T Inc. $ 121,945 $ 82,128 $ 39,817 $ 19,718 $ 20,099

26 CONTENTS Investor Briefing Q3 DiscussionBusiness andSolutions Reconciliation of Non-GAAP Measures

We believe the following measures are relevant and useful information to investors as they are part of AT&T's internal management reporting and planning processes Discussion and Reconciliationand are important of Non-GAAP metrics Measures that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as We believe the followinga method measures of comparing are relevant performanceand useful information with that to investors of many as ofthey our are competitors. part of AT&T's internal management reporting and planning processes and are important metrics that management uses to evaluate the operating performance of AT&T and its segments. Management also uses these measures as a method of comparing performance FREEwith that CASH of ma FLOWny of our competitors. Free cash flow is defined as cash from operations minus Capital expenditures. Free cash flow after dividends isFree defined Cash Flow as cash from operations minus Capital expenditures and dividends. Free cash flow dividend payout ratioFree cash is defined flow is defined as theas cash percentage from operations of dividends minus Capital paid toexpenditures. free cash Free flow. cash We flow believe after dividends these is definedmetrics provide as usefulcash from information operations to minus our investorsCapital expenditures because managementand dividends. viewsFree cash free flow cash dividend flow payoutas an ratio important is defined indicator as the of howpercentage much ofcash dividends is generated paid to free by cash routine flow . businessWe believe operations, these metrics including provide useful Capital information expenditures, to our investorsand makes because decisionsmanagement based views on free it. cash Management flow as an important also views indicator free cash of how flow much as cash a is generatedmeasure of by routinecash available business operations, to pay debt and returnincluding cash Capital to expenditures,shareowners. and makes decisions based on it. Management also views free cash flow as a measure of cash available to pay debt and return cash to shareowners.

Free Cash Flow and Free Cash Flow Dividend Payout Ratio

Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net cash provided by operating activities $ 11,114 $ 10,995 $ 29,274 $ 29,202 Less: Capital expenditures (5,251) (5,813) (16,474) (15,952) Free Cash Flow 5,863 5,182 12,800 13,250

Less: Dividends paid (3,009) (2,951) (9,030) (8,850) Free Cash Flow after Dividends $ 2,854 $ 2,231 $ 3,770 $ 4,400 Free Cash Flow Dividend Payout Ratio 51.3% 56.9% 70.5% 66.8%

EBITDA EBITDA Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other Our calculation of EBITDA, as presented, may differ from similarly titled measures reported by other companies. For AT&T, companies. For AT&T, EBITDA excludes other income (expense) – net, and equity in net income (loss) of EBITDA excludes other income (expense) – net, and equity in net income (loss) of affiliates, as these do not reflect the affiliates, as these do not reflect the operating results of our subscriber base or operations that arenotunder operating results of our subscriber base or operations that are not under our control. Equity in net income (loss) of affiliates our control. Equity in net income (loss) of affiliates represents the proportionate share of the net income represents the proportionate share of the net income (loss) of affiliates in which we exercise significant influence, but do not (loss) of affiliates in which we exercise significant influence, but do not control. Because we do notcontrol control. Because we do not control these entities, management excludes these results when evaluating the performance of these entities, management excludes these results when evaluating the performance of our primary our primary operations. EBITDA also excludes interest expense and the provision for income taxes. Excluding these items operations.eliminates the EBITDA expenses also associatedexcludes interestwith our expense capital and taxthe structures.provision forFinally, income EBITDA taxes. excludes Excluding depreciation these items and eliminatesamortization the in orderexpenses to elimina associatedte the impactwith our of capitalcapital investments. and tax structures. EBITDA does Finally, not EBITDAgive effect excludes to cash depreciation used for debt andservice amortization requirements in and order thus to does eliminate not reflect the available impact offunds capital for distributions, investments. reinvestment EBITDA does or other not give discretionary effect to uses. cash usedEBITDA for is debtnot presented service requirementsas an alternative and me thusasure does of operating not reflect results available or cash flowsfunds from for operations, distributions, as determined reinvestment in or otheraccordance discretionary with U.S. generally uses. EBITDA accepted is not accounting presented principles as an (GAAP). alternative measure of operating results or cash flows from operations, as determined in accordance with U.S. generally accepted accounting principles (GAAP). EBITDAEBITDA service service margin margin is calculated is calculated as EBITDA as EBITDA divided divided by service by revenues.service revenues.

When discussing our segment results, EBITDA excludes equity in net income (loss) of affiliates, and depreciation and 27 amortizationCONTENTS from segment contribution. For our supplemental presentation of our combined domestic wireless operations (AT&T Mobility) and our supplemental presentation of the Mexico Wireless and Latin America operations of our International segment, EBITDA excludes depreciation and amortization from operating income.

1 Investor Briefing Q3 Discussion and Reconciliation of Non-GAAP Measures

When discussing our segment results, EBITDA excludes equity in net income (loss) of affiliates, and depreciation and amortization from segment contribution. For our supplemental presentation of our combined domestic wireless operations (AT&T Mobility) and our supplemental presentation of the Mexico Wireless and Latin America operations of our International segment, EBITDA excludes depreciation and amortization from operating income. These measures are used by management as a gauge of our success in acquiring, retaining and servicing subscribersThese measures because are used we by believe management these as measures a gauge of reflect our success AT&T's in acquiring, ability retaining to generate and servicing and subscribersgrow subscriber because revenueswe believe whilethese providingmeasures reflect a high AT&T's level of ability customer to generate service and in grow a cost-effective subscriber revenues manner. while providing Management a high levelalso of uses thesecustomer measures service inas a acost- methodeffective of comparingmanner. Management segment alsoperformance uses these withmeasures that asof amany method of ofits comparing competitors. segment The financialperformance and with thatoperating of many metricsof its competitors. which affect The financial EBITDA and include operating the metrics key which revenue affect EBITDAand expense include drivers the key forwhich segmentrevenue and managers expense driversare responsible for which segmentand upon managers which weare responsibleevaluate their and performance.upon which we Managementevaluate their performance.uses Mexico WirelessManagement EBITDA uses inMex evaluatingico Wireless profitability EBITDA in evaluating trends profitability after our trends two after Mexico our two wireless Mexico wireless acquisitions acquisitions in 2015,in 2015, andour investmentsand our investments in building in building a nationwide a nationwide LTE network LTE network by end by endof 2018. of 2018. Management Management uses uses Latin Latin America America EBITDAEBITDA inin evaluating the the ability ability of our of our Latin Latin America America operations operations to generate to generate cash to finance cash to its financeown operations. its own operations. We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant We believe EBITDA Service Margin (EBITDA as a percentage of service revenues) to be a more relevant measure than EBITDA measureMargin (EBITDA than EBITDAas a percentage Margin (EBITDA of total as revenue) a percentage for our of Consumer total revenue) Mobility for segment our Consumer operating Mobility margin segment and our operatingsupplemental margin AT&T and Mobility our supplementaloperating margin. AT&T We Mobility also use operating wireless service margin. revenues We also to use calculate wireless margin service to facilitaterevenues tocomparison, calculate bothmargin internally to facilitate and externally comparison, with ourboth wireless internally competitors, and externally as they withcalculate our wirelesstheir margins competitors, using wireless as theyservice calculate revenues their as well. margins using wireless service revenues as well. There are material limitations to using these non-GAAP financial measures. EBITDA, EBITDA margin and EBITDAThere ar e service material margin, limitations as we to haveusing definedthese non -them,GAAP financial may not measures. be comparable EBITDA, EBITDA to similarly margin andtitled EBITDA measures service reportedmargin, as by we other have companies.defined them, Furthermore, may not be thesecomparable performance to similarly measures titled measures do not takereport intoed byaccount other companies.certain significantFurthermore, items,these performance including measures depreciation do not and take amortization, into account interestcertain significant expense, items, tax including expense depreciation and equity innetand incomeamortization, (loss) interest of affiliates. expense, tax Management expense and equity compensates in net income for (loss) these of affiliates.limitations Management by carefully compensates analyzing for howitsthese limitations by carefully analyzing how its competitors present performance measures that are similar in nature to EBITDA as competitors present performance measures that are similar in nature to EBITDA as we present it, and we present it, and considering the economic effect of the excluded expense items independently as well as in connection considering the economic effect of the excluded expense items independently as well as in connection with with its analysis of net income as calculated in accordance with GAAP. EBITDA, EBITDA margin and EBITDA service margin its analysis of net income as calculated in accordance with GAAP. EBITDA, EBITDA margin and EBITDA service should be considered in addition to, but not as a substitute for, other measures of financial performance reported in margin should be considered in addition to, but not as a substitute for, other measures of financial accordance with GAAP. performance reported in accordance with GAAP.

EBITDA, EBITDA Margin and EBITDA Service Margin Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Net Income $ 3,123 $ 3,418 $ 10,711 $ 10,818 Additions: Income Tax Expense 1,851 1,775 5,711 5,803 Interest Expense 1,686 1,224 4,374 3,689 Equity in Net (Income) Loss of Affiliates (11) (16) 148 (57) Other (Income) Expense - Net (246) 7 (354) (154) Depreciation and amortization 6,042 6,579 18,316 19,718 EBITDA 12,445 12,987 38,906 39,817

Total Operating Revenues 39,668 40,890 118,870 121,945 Service Revenues 36,378 37,272 109,372 111,515

EBITDA Margin 31.4% 31.8% 32.7% 32.7% EBITDA Service Margin 34.2% 34.8% 35.6% 35.7%

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2 Investor Briefing Q3 Discussion and Reconciliation of Non-GAAP Measures

Segment EBITDA, EBITDA Margin and EBITDA Service Margin Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Business Solutions Segment Segment Contribution $ 4,503 $ 4,303 $ 13,322 $ 12,803 Additions: Depreciation and amortization 2,325 2,539 6,972 7,568 EBITDA 6,828 6,842 20,294 20,371

Total Segment Operating Revenues 17,061 17,767 51,016 52,955

Segment Operating Income Margin 26.4% 24.2% 26.1% 24.2% EBITDA Margin 40.0% 38.5% 39.8% 38.5%

Entertainment Group Segment Segment Contribution $ 1,310 $ 1,488 $ 4,562 $ 4,734 Additions: Equity in Net (Income) Loss of Affiliates 6 - 23 (1) Depreciation and amortization 1,379 1,504 4,256 4,481 EBITDA 2,695 2,992 8,841 9,214

Total Segment Operating Revenues 12,648 12,720 37,953 38,089

Segment Operating Income Margin 10.4% 11.7% 12.1% 12.4% EBITDA Margin 21.3% 23.5% 23.3% 24.2%

Consumer Mobility Segment Segment Contribution $ 2,320 $ 2,572 $ 7,059 $ 7,640 Additions: Depreciation and amortization 877 944 2,621 2,798 EBITDA 3,197 3,516 9,680 10,438

Total Segment Operating Revenues 7,748 8,267 23,279 24,781 Service Revenues 6,507 6,914 19,644 20,805

Segment Operating Income Margin 29.9% 31.1% 30.3% 30.8% EBITDA Margin 41.3% 42.5% 41.6% 42.1% EBITDA Service Margin 49.1% 50.9% 49.3% 50.2%

International Segment Segment Contribution $ (125) $ (53) $ (257) $ (421) Additions: Equity in Net (Income) of Affiliates (17) (1) (62) (24) Depreciation and amortization 304 293 905 868 EBITDA 162 239 586 423

Total Segment Operating Revenues 2,099 1,879 6,054 5,374

Segment Operating Income Margin -6.8% -2.9% -5.3% -8.3% EBITDA Margin 7.7% 12.7% 9.7% 7.9%

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3 Investor Briefing Q3 Discussion and Reconciliation of Non-GAAP Measures

Supplemental AT&T Mobility EBITDA, EBITDA Margin and EBITDA Service Margin Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 AT&T Mobility Operating Income $ 5,313 $ 5,389 $ 15,814 $ 16,005 Add: Depreciation and amortization 2,010 2,107 5,999 6,244 EBITDA 7,323 7,496 21,813 22,249

Total Operating Revenues 17,436 18,193 52,121 54,071 Service Revenues 14,541 14,964 43,613 44,673

Operating Income Margin 30.5% 29.6% 30.3% 29.6% EBITDA Margin 42.0% 41.2% 41.9% 41.1% EBITDA Service Margin 50.4% 50.1% 50.0% 49.8%

Supplemental Latin America EBITDA and EBITDA Margin Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 International - Latin America Operating Income $ 82 $ 94 $ 300 $ 179 Add: Depreciation and amortization 206 212 642 620 EBITDA 288 306 942 799

Total Operating Revenues 1,363 1,297 4,065 3,649

Operating Income Margin 6.0% 7.2% 7.4% 4.9% EBITDA Margin 21.1% 23.6% 23.2% 21.9%

Supplemental Mexico EBITDA and EBITDA Margin Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 International - Mexico Operating Income $ (224) $ (148) $ (619) $ (624) Add: Depreciation and amortization 98 81 263 248 EBITDA (126) (67) (356) (376)

Total Operating Revenues 736 582 1,989 1,725

Operating Income Margin -30.4% -25.4% -31.1% -36.2% EBITDA Margin -17.1% -11.5% -17.9% -21.8%

Adjusting Items ADJUSTING ITEMS Adjusting items include revenues and costs we consider nonoperational in nature, such as items arising from asset Adjustingacquisitions items or dispositions. include revenues We also adjust and forcosts net actuarialwe consider gains nonoperationalor losses associated in nature,with our suchpension as and items postemployment arising from assetbenefit acquisitions plans due to theor dispositions.often significant We impact also adjust on our forfourth net-quarter actuarial results gains, unless or losses earlier remeasurementassociated with is ourrequired pension (we andimmediately postemployment recognize this benefit gain or plansloss in the due income to the statement, often pursuant significant to our accountingimpact on policy our for fourth-quarter the recognit ion results (we of immediatelyactuarial gains recognize and losses.) this Consequently, gain or loss our in adjustedthe income results statement, reflect an pursuantexpected returnto our on accounting plan assets policy rather for than the the recognitionactual return ofon actuarialplan assets, gains as included and losses). in the GAAP Consequently, measure of our income. adjusted results reflect an expected return on plan assets rather than the actual return on plan assets, as included in the GAAP measure of income. The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for adjustments that, given their magnitude can drive a change in the effective tax rate, reflect the actual tax expense or combined marginal rate of approximately 38%. Certain foreign operations with losses, where such losses are not realizable for tax purposes, are not tax effected, resulting in no tax impact for Venezuelan devaluation. For years prior to 2017, adjustments related to Mexico operations were taxed at the 30% marginal rate for Mexico. 30 CONTENTS

4 Investor Briefing Q3 Discussion and Reconciliation of Non-GAAP Measures

The tax impact of adjusting items is calculated using the effective tax rate during the quarter except for adjustments that, given their magnitude can drive a change in the effective tax rate, reflect the actual tax expense or combined marginal rate of approximately 38%. For years prior to 2017, adjustments related to Mexico operations were taxed at the 30% marginal rate for Mexico. Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA service margin and Adjusted diluted EPS are non-GAAP financial measures calculated by

Adjusting Items Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Operating Revenues Natural disaster revenue credits $ 89 $ 13 $ 89 $ 13 Adjustments to Operating Revenues 89 13 89 13 Operating Expenses DIRECTV and other video merger integration costs 67 189 317 495 Mexico merger integration costs 34 84 153 231 Time Warner merger costs 33 - 152 - Wireless merger integration costs - 17 - 92 Actuarial (gain) loss - - (259) - Employee separation costs 208 260 268 314 Natural disaster costs 118 17 118 17 (Gain) loss on transfer of wireless spectrum - 22 (181) (714) Venezuela devaluation - - 98 - Adjustments to Operations and Support Expenses 460 589 666 435 Amortization of intangible assets 1,136 1,282 3,508 3,949 Adjustments to Operating Expenses 1,596 1,871 4,174 4,384 Other Merger related interest expense and exchange fees1 485 - 752 16 (Gain) loss on sale of assets, impairments and other adjustments2 (81) - 140 4 Adjustments to Income Before Income Taxes 2,089 1,884 5,155 4,417 Tax impact of adjustments 716 640 1,717 1,521 Tax-related items (146) - (146) - Adjustments to Net Income $ 1,519 $ 1,244 $ 3,584 $ 2,896 1 Includes interest expense incurred on the debt issued prior to the close of merger transactions. 2 Includes interest income earned on cash held prior to the close of merger transactions.

excludingAdjusted Operating from operating Income, Adjusted revenues, Operating operating Income expenses Margin, andAdjusted income EBITDA, tax Adjusted expense EBITDA certain margin, significant Adjusted items EBITDA that areservice non-operational margin and Adjusted or non-recurring diluted EPS are in non nature,-GAAP including financial measuresdispositions calculated and merger by excluding integration from operating and transaction revenues, costs.operating Management expenses and believes income thattax expense these measures certain significant provide items relevant that areand non useful-operational information or non to-recurring investors in nature,and including dispositions and merger integration and transaction costs. Management believes that these measures provide other users of our financial data in evaluating the effectiveness of our operations and underlying business relevant and useful information to investors and other users of our financial data in evaluating the effectiveness of our trends. operations and underlying business trends. Adjusted Operating Revenues, Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA,Adjusted AdjustedOperating EBITDARevenues, margin, Adjusted Adjusted Operating EBITDA Income, service Adjusted margin Operating and AdjustedIncome Margin, diluted Adjusted EPS should EBITDA, be Adjusted consideredEBITDA margin, in additionAdjusted EBITDA to, but service not as margin a substitute and Adjusted for, other diluted measures EPS should of be financial considered performance in addition to, butreported not as in a accordancesubstitute for, with other GAAP. measures AT&T's of financial calculation performance of Adjusted reported items, in asaccordance presented, with may GAAP. differ AT&T's from calculation similarly of Adjusted titled measuresitems, as presented, reported ma byy differother from companies. similarly titled measures reported by other companies.

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5 Investor Briefing Q3 Discussion and Reconciliation of Non-GAAP Measures

Adjusted Operating Income, Adjusted Operating Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA Service Margin Dollars in millions Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Operating Income $ 6,403 $ 6,408 $ 20,590 $ 20,099 Adjustments to Operating Revenues 89 13 89 13 Adjustments to Operating Expenses 1,596 1,871 4,174 4,384 Adjusted Operating Income1 8,088 8,292 24,853 24,496

EBITDA 12,445 12,987 38,906 39,817 Adjustments to Operating Revenues 89 13 89 13 Adjustments to Operations and Support Expenses 460 589 666 435 Adjusted EBITDA1 12,994 13,589 39,661 40,265

Total Operating Revenues 39,668 40,890 118,870 121,945 Adjustments to Operating Revenues 89 13 89 13 Total Adjusted Operating Revenues 39,757 40,903 118,959 121,958 Service Revenues 36,378 37,272 109,372 111,515 Adjustments to Service Revenues 89 13 89 13 Adjusted Service Revenues 36,467 37,285 109,461 111,528

Operating Income Margin 16.1% 15.7% 17.3% 16.5% Adjusted Operating Income Margin1 20.3% 20.3% 20.9% 20.1% Adjusted EBITDA Margin1 32.7% 33.2% 33.3% 33.0% Adjusted EBITDA Service Margin1 35.6% 36.4% 36.2% 36.1% 1 Adjusted Operating Income, Adjusted EBITDA and associated margins exclude all actuarial gains or losses ($259 million gain for the first nine months of 2017) associated with our postemployment benefit plan, which we immediately recognize in the income statement, pursuant to our accounting policy for the recognition of actuarial gains/losses.

Adjusted Diluted EPS Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Diluted Earnings Per Share (EPS) $ 0.49 $ 0.54 $ 1.69 $ 1.70 Amortization of intangible assets 0.12 0.14 0.38 0.42 Merger integration and other items1 0.06 0.03 0.14 0.09 Asset abandonments, impairments and other adjustments 0.05 0.03 0.06 0.03 Actuarial (gain) loss - - (0.03) - (Gain) loss on transfer of wireless spectrum - - (0.02) (0.07) Venezuela devaluation - - 0.02 - Tax-related items 0.02 - 0.02 - Adjusted EPS $ 0.74 $ 0.74 $ 2.26 $ 2.17 Year-over-year growth - Adjusted 0.0% 4.1% Weighted Average Common Shares Outstanding with Dilution (000,000) 6,182 6,189 6,184 6,191 1Includes combined merger integration items, merger-related interest income and expense.

NET DEBT TO ADJUSTED EBITDA Net Debt to Adjusted EBITDA Net Debt to EBITDA ratios are non-GAAP financial measures frequently used by investors and credit rating agencies and Netmanagement Debt to EBITDA believes ratios are nonthese-GAAP measures financial measures provide frequently relevant used byand investors useful and information credit rating agencies to investors and and other users ofmanagement our financial believes thesedata. measures The provide Net relevant Debt and to useful Adjusted information EBITDA to investors ratio and is other calculatedusers of our financial by dividing the NetDebt data. The Net Debt to Adjusted EBITDA ratio is calculated by dividing the Net Debt by Annualized Adjusted EBITDA. Net Debt by annualized is Adjusted calculated by EBITDA. subtracting Net cash Debt and cash is equivalents calculated and bycertificates subtracting of deposit cash and time and deposits cash that equivalents are greater than and 90 certificates of deposit anddays, time from deposits the sum of that debt maturingare greater within onethan year 90 and days, long- termfrom debt. the Annualized sum of Adjusted debt maturingEBITDA is calculated within by one year and long-term debt.annualizing Annualized the year Adjusted-to-date Adjusted EBITDA EBITDA. is calculated by annualizing the year-to-date Adjusted EBITDA.

Net Debt to Adjusted EBITDA Dollars in millions Three Months Ended Mar. 31, Jun. 30, Sep. 30, YTD 2017 2017 2017 2017 Adjusted EBITDA 6 $ 13,080 $ 13,587 $ 12,994 $ 39,661 Add back severance - (60) (208) (268) Net Debt Adjusted EBITDA 13,080 13,527 12,786 39,393 Annualized Adjusted EBITDA 52,524 End-of-period current debt 8,551 End-of-period long-term debt 154,728 Total End-of-Period Debt 163,279 Less: Cash and Cash Equivalents 48,499 Net Debt Balance 114,780 Annualized Net Debt to Adjusted EBITDA Ratio 2.19

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7 Investor Briefing Q3 Discussion and Reconciliation of Non-GAAP Measures

SUPPLEMENTAL OPERATIONAL MEASURES We provide a supplemental discussion of our domestic wireless operations that is calculated by combining our ConsumerSupplemental Operational Mobility Measures and Business Solutions segments, and then adjusting to remove non-wireless operations.

TheWe provide following a supplemental table discussion presents of our domestic a reconciliation wireless operations of that our is calculated supplemental by combining ourAT&T Consumer Mobility Mobility andresults Business Solutions segments, and then adjusting to remove non-wireless operations. The following table presents a reconciliation of our supplemental AT&T Mobility results.

Supplemental Operational Measure Three Months Ended Supplemental Operational Measures September 30, 2017 September 30, 2016 Consumer Business Consumer Business We provide a supplemental discussion of ourMobility domestic wirelessSolutions operations thatAdjustments is calculated1 AT&Tby combining Mobility our ConsumerMobility Mobility and BusinessSolutions Solutions segments,Adjustments and1 thenAT&T adjusting Mobility toOperating remove Revenues non-wireless operations. The following table presents a reconciliation of our supplemental AT&T Mobility results. Wireless service $ 6,507 $ 8,034 $ - $ 14,541 $ 6,914 $ 8,050 $ - $ 14,964 Supplemental Operational Measure Fixed strategic services - 3,087 (3,087) - - 2,913 (2,913) - Three Months Ended Legacy voice and data services - 3,434 (3,434) - - 4,042 (4,042) - September 30, 2017 September 30, 2016 Other services and equipment - 852 (852) - - 886 (886) - Consumer Business Consumer Business Wireless equipment 1,241 1,654 - 2,895 1,353 1,876 - 3,229 Mobility Solutions Adjustments1 AT&T Mobility Mobility Solutions Adjustments1 AT&T Mobility Total Operating Revenues 7,748 17,061 (7,373) 17,436 8,267 17,767 (7,841) 18,193 Operating Revenues Wireless service $ 6,507 $ 8,034 $ - $ 14,541 $ 6,914 $ 8,050 $ - $ 14,964 Operating Expenses Fixed strategic services - 3,087 (3,087) - - 2,913 (2,913) - Operations and support 4,551 10,233 (4,671) 10,113 4,751 10,925 (4,979) 10,697 Legacy voice and data services - 3,434 (3,434) - - 4,042 (4,042) - EBITDA 3,197 6,828 (2,702) 7,323 3,516 6,842 (2,862) 7,496 Other services and equipment - 852 (852) - - 886 (886) - Depreciation and amortization 877 2,325 (1,192) 2,010 944 2,539 (1,376) 2,107 Wireless equipment 1,241 1,654 - 2,895 1,353 1,876 - 3,229 Total Operating Expense 5,428 12,558 (5,863) 12,123 5,695 13,464 (6,355) 12,804 Total Operating Revenues 7,748 17,061 (7,373) 17,436 8,267 17,767 (7,841) 18,193 Operating Income $ 2,320 $ 4,503 $ (1,510) $ 5,313 $ 2,572 $ 4,303 $ (1,486) $ 5,389 1 Non-wireless (fixed) operations reported in Business Solutions segment. Operating Expenses Operations and support 4,551 10,233 (4,671) 10,113 4,751 10,925 (4,979) 10,697 EBITDA 3,197 6,828 Supplemental(2,702) Operational Measure7,323 3,516 6,842 (2,862) 7,496 Depreciation and amortization 877 2,325 (1,192) Nine2,010 Months Ended 944 2,539 (1,376) 2,107 We provide a supplemental presentation of the Latin America and Mexico Wireless operationsSeptember 30, 2016 within our Total Operating Expense 5,428 September12,558 30, 2017 (5,863) 12,123 5,695 13,464 (6,355) 12,804 Consumer Business InternationalOperating Income segment.$ TheConsumer following2,320 $ tableBusiness4,503 $presents (1,510) a reconciliation $ 5,313 $of our International2,572 $ 4,303 segment. $ (1,486) $ 5,389 Mobility Solutions Adjustments1 AT&T Mobility Mobility Solutions Adjustments1 AT&T Mobility 1 Non-wireless (fixed) operations reported in Business Solutions segment. Operating Revenues Wireless service $ 19,644 $ 23,969 $ - $ 43,613 $ 20,805 $ 23,868 $ - $ 44,673 Supplemental Operational Measure Fixed strategic services - 9,089 (9,089) - - 8,469 (8,469) - Nine Months Ended Legacy voice and data services - 10,572 (10,572) - - 12,577 (12,577) - September 30, 2017 September 30, 2016 Other services and equipment - 2,513 (2,513) - - 2,619 (2,619) - Consumer Business Wireless equipment Consumer3,635 Business4,873 - 8,508 3,976 5,422 - 9,398 Mobility Solutions Adjustments1 AT&T Mobility Mobility Solutions Adjustments1 AT&T Mobility Total Operating Revenues 23,279 51,016 (22,174) 52,121 24,781 52,955 (23,665) 54,071 Operating Revenues Wireless service $ 19,644 $ 23,969 $ - $ 43,613 $ 20,805 $ 23,868 $ - $ 44,673 Operating Expenses Fixed strategic services - 9,089 (9,089) - - 8,469 (8,469) - Operations and support 13,599 30,722 (14,013) 30,308 14,343 32,584 (15,105) 31,822 Legacy voice and data services - 10,572 (10,572) - - 12,577 (12,577) - EBITDA 9,680 20,294 (8,161) 21,813 10,438 20,371 (8,560) 22,249 Other services and equipment - 2,513 (2,513) - - 2,619 (2,619) - Depreciation and amortization 2,621 6,972 (3,594) 5,999 2,798 7,568 (4,122) 6,244 Wireless equipment 3,635 4,873 - 8,508 3,976 5,422 - 9,398 Total Operating Expense 16,220 37,694 (17,607) 36,307 17,141 40,152 (19,227) 38,066 Total Operating Revenues 23,279 51,016 (22,174) 52,121 24,781 52,955 (23,665) 54,071 Operating Income $ 7,059 $ 13,322 $ (4,567) $ 15,814 $ 7,640 $ 12,803 $ (4,438) $ 16,005 1 Non-wireless (fixed) operations reported in Business Solutions segment. Operating Expenses Operations and support 13,599 30,722 (14,013) 30,308 14,343 32,584 (15,105) 31,822 EBITDA 9,680 20,294 (8,161) 21,813 10,438 20,371 (8,560) 22,249 Depreciation and amortization 2,621 6,972 (3,594) 5,999 2,798 7,568 (4,122) 6,244 8 Total Operating Expense 16,220 37,694 (17,607) 36,307 17,141 40,152 (19,227) 38,066 Operating Income $ 7,059 $ 13,322 $ (4,567) $ 15,814 $ 7,640 $ 12,803 $ (4,438) $ 16,005 1 Non-wireless (fixed) operations reported in Business Solutions segment.

33 CONTENTS Investor Briefing Q3 Discussion and Reconciliation of Non-GAAP Measures

SUPPLEMENTAL INTERNATIONAL We provide a supplemental presentation of the Latin America and Mexico Wireless operations within our InternationalSupplemental International segment. The following table presents a reconciliation of our International segment. We provide a supplemental presentation of the Latin America and Mexico Wireless operations within our International segment. The following table presents a reconciliation of our International segment.

Supplemental International Three Months Ended September 30, 2017 September 30, 2016 Latin America Mexico International Latin America Mexico International Operating Revenues Video service $ 1,363 $ - $ 1,363 $ 1,297 $ - $ 1,297 Wireless service - 536 536 - 484 484 Wireless equipment - 200 200 - 98 98 Total Operating Revenues 1,363 736 2,099 1,297 582 1,879

Operating Expenses Operations and support 1,075 862 1,937 991 649 1,640 Depreciation and amortization 206 98 304 212 81 293 Total Operating Expenses 1,281 960 2,241 1,203 730 1,933 Operating Income (Loss) 82 (224) (142) 94 (148) (54) Equity in Net Income of Affiliates 17 - 17 1 - 1 Segment Contribution $ 99 $ (224) $ (125) $ 95 $ (148) $ (53)

Supplemental International Nine Months Ended September 30, 2017 September 30, 2016 Latin America Mexico International Latin America Mexico International Operating Revenues Video service $ 4,065 $ - $ 4,065 $ 3,649 $ - $ 3,649 Wireless service - 1,546 1,546 - 1,428 1,428 Wireless equipment - 443 443 - 297 297 Total Operating Revenues 4,065 1,989 6,054 3,649 1,725 5,374

Operating Expenses Operations and support 3,123 2,345 5,468 2,850 2,101 4,951 Depreciation and amortization 642 263 905 620 248 868 Total Operating Expenses 3,765 2,608 6,373 3,470 2,349 5,819 Operating Income (Loss) 300 (619) (319) 179 (624) (445) Equity in Net Income of Affiliates 62 - 62 24 - 24 Segment Contribution $ 362 $ (619) $ (257) $ 203 $ (624) $ (421)

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