2nd Quarter Earnings

AT&T Investor Update July 25, 2017

© 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. Cautionary Language Concerning Forward-Looking Statements Information set forth in this presentation contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this presentation based on new information or otherwise. This presentation may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company’s website at https://investors.att.com.

2 © 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. Financial Summary $ in billions, except EPS 2Q17 Year-to-Date Revenues Adjusted EPS Cash from Ops Revenues Adjusted EPS Cash from Ops Adj. OI Margin Capex Adj. OI Margin Capex Free Cash Flow Free Cash Flow $81.1 $79.2 $1.53 $0.79 $1.43 $18.2 $18.2 $40.5 $39.8 $0.72 $10.3 $8.9

$5.5 $5.2 $10.1 $11.2

20.1% 21.6% 20.0% 21.2% $4.8 $3.7 $8.1 $6.9

2Q16 2Q17 2Q16 2Q17 2Q16 2Q17 1H16 1H17 1H16 1H17 1H16 1H17 Year-to-date reported EPS of $1.19 2Q16 2Q17 Reported EPS $0.55 $0.63 Adjusted EPS of $1.53, up 7% • Adjusted operating income margin of 21.2%, up 120 bps Adjustments: • Solid execution of cost transformation initiatives Amortization of intangibles $0.14 $0.13 Merger and integration $0.03 $0.05 Cash from operations totaled $18.2 billion, same Other1 -- $(0.02) as prior year • Capex of $11.2 billion, up $1.1 billion Adjusted EPS $0.72 $0.79 • FCF of $6.9 billion, down $1.1 billion

12Q17 includes $0.03 actuarial gain on benefit plan remeasurement. 3 © 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. 2Q17 Operational Results $ in billions AT&T Mobility Record EBITDA margins Revenues EBITDA Margin • Best-ever EBITDA margin of 41.8% and wireless service margin of 50.4% • Low upgrade rate; service revenue down year over year $17.9 $17.5 Best-ever postpaid phone churn of 0.79%; total postpaid 1.01% • Improvement in postpaid voice net adds

41.4% 41.8% 178,000 branded phone net adds, with 267,000 prepaid 2.3 million total net adds with gains in postpaid, prepaid 2Q16 2Q17 and connected devices

Entertainment Group Revenues of $12.7 billion, stable year over year Revenues EBITDA Margin • Growth in IP and video services offset legacy declines • AdWorks up nearly 15%, with strength in addressable advertising $12.7 $12.7 Stable margins even with pressure from content and new product costs Broadband gains as customers choose higher speeds 24.7% 24.6% • 8,000 total broadband net adds; 112,000 IP broadband net adds • 2Q16 2Q17 Continued DIRECTV NOW gains help offset increased pressure from traditional TV declines in a seasonally weak 2Q

4 © 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. AT&T + DIRECTV: Two Years Later Bundling Success In millions Wireless Subs with TV TV Subs with Wireless Plans TV Subs with IP Broadband 19.8 31% 8.5 10% 6.4 18% 7.8 15.1 5.4

Close 2Q17 Close 2Q17 Close 2Q17

Churn Benefits Merger Update Postpaid Phone Churn since DTV Close YR1 YR2 • Bundling success driving improved customer lifetime value 1.04% 1.1% • Growing advertising revenue per subscriber 1.0% • Fiber footprint expansion driving improved broadband trends 0.9% 0.79% • 0.8% Cost synergies annual run rate of $1.5+ billion at end of 2016 0.7% • On track to deliver $2.5+ billion ahead of schedule 0.6% 0.5% 3Q 4Q 1Q 2Q 5 © 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. 2Q17 Operational Results $ in billions Business Solutions Wireline pressure from legacy services and equipment sales Revenues EBITDA Margin • Gains in strategic business services

$17.6 $17.1 Strong margin gains, with EBITDA growing to $6.8 billion • Growth in wireless and wireline margins • Continued focus on cost management initiatives • 38.2% 39.7% Process automation and service delivery efficiencies • Software-defined networking and virtualization 2Q16 2Q17

International Revenues up 10.8% with strong EBITDA growth Revenues EBITDA • Gains in Mexico and Latin America

$2.0 $1.8 Margin improvement in Mexico with solid subscriber growth • 476,000 wireless net adds; 13.1 million total subscribers • More than 88 million LTE POPs, covering 74% of the population

$254m $105m Continued profitability and positive cash flow in Latin America operations

2Q16 2Q17

6 © 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. Business Update

Time Warner

• Expect to close by year-end

• Ample liquidity and financing secured to close

• Merger planning process approaching completion

Technology and Infrastructure

• AT&T’s network covers more than 99% of Americans • 5G Evolution underway in Austin and • Nearly 70,000 existing cell sites Indianapolis, reaching 20+ markets by year-end • ~100 MHz of spectrum in use (top 100 metros) • Achieved 750 Mbps peak speed in San Francisco LTE-LAA field trial • 60 MHz of spectrum to be deployed • Simultaneous deployment with FirstNet build • SDN transformation progressing, with more enables significant cost efficiencies than 40% of network functions virtualized

7 © 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. Opt-in Process • State plans delivered • 5 states have already opted in

Network Infrastructure 5 States Kickoff

• AT&T’s existing LTE network immediately available Opt-in Period Arkansas, Kentucky, Iowa, Virginia • Providing priority access and quality of service & Wyoming • FirstNet and AT&T kick-off the network build process • More opportunities for cost efficiencies • Simultaneous deployment of FirstNet, AWS-3 and WCS • New/independent/alternative tower operators

8 © 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement. Q&A

© 2017 AT&T Intellectual Property. All rights reserved. AT&T, Globe logo, Mobilizing Your World and DIRECTV are registered trademarks and service marks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks are the property of their respective owners. AT&T Proprietary (Internal Use Only). Not for use or disclosure outside the AT&T companies except under written agreement.