Adjusted EPS Guidance Increased to $2.68 to $2.74 Range1;
Free Cash Flow Guidance Increased to $15 Billion Range or Better;
Strong Mobility Subscriber Gains; Positive DIRECTV U.S. Net Adds Highlights

•Third-quarter consolidated revenues of $39.1 billion, up nearly 19% versus the year-earlier period primarily due to the acquisition of DIRECTV
•Including merger-related expenses, Leap network decommissioning and other one-time costs, $0.50 diluted earnings per share in the third quarter compared to $0.60 diluted EPS in the year-ago quarter; excluding these items, diluted EPS was $0.74 versus $0.65 a year ago, up nearly 14% year over year
•Continued adjusted consolidated margin expansion with best-ever service EBITDA margins in wireless operations
•Strong cash flows including $10.8 billion in cash from operations and $5.5 billion in free cash flow
•Business Solutions revenues up 1.2% year over year
-Growth in wireline business data revenues for the fourth consecutive quarter
-Strategic business services revenues of $2.8 billion, up 12.6% and up 15.2% when adjusted for foreign exchange
•26,000 domestic DIRECTV net adds
•192,000 IP broadband net adds
•2.5 million AT&T Mobility domestic wireless net adds with gains in every customer category
-755,000 branded net adds including solid phone net adds
-289,000 postpaid and 466,000 prepaid net adds, best prepaid net add quarter in nearly 8 years
-Record 1.6 million connected device net adds including 1 million connected cars
•Nearly 1 million branded (postpaid and prepaid) smartphones added to base
•Continued growth in phone-only postpaid ARPU plus AT&T NextSM monthly billings up nearly 5% year over year
•Total churn of 1.33%, down year over year; postpaid churn at 1.16%

DALLAS, October 22, 2015 — AT&T Inc. (NYSE:T) today reported double-digit revenue, adjusted operating margin, adjusted EPS and free cash flow growth in the third quarter.

“We now have integrated solutions that are unlike any competitor in the market,” said Randall Stephenson, AT&T chairman and CEO. “With our national wireless and video capabilities, as well as our extensive broadband network, we now have assets that make us a unique competitor and the first scaled, fully-integrated U.S. service provider.

“We turned in outstanding financial results in the quarter. Our early integration efforts with DIRECTV are going very well and we’ve just begun to scratch the surface on the video, wireless and broadband cross-selling opportunities,” Stephenson added.

Consolidated Financial Results
AT&T's consolidated revenues for the third quarter totaled $39.1 billion, up nearly 19% versus the year-earlier period largely due to the acquisition of DIRECTV. Compared with results for the third quarter of 2014, operating expenses were $33.2 billion versus $27.4 billion; operating income was $5.9 billion versus $5.6 billion; and operating income margin was 15.2%, down from 17.0% in the year-ago quarter. When adjusting for amortization, merger and integration-related items, and other expenses, operating income was $7.9 billion versus $5.9 billion; and operating income margin was 20.3%, up 250 basis points from a year ago.

Third-quarter 2015 net income attributable to AT&T totaled $3.0 billion, or $0.50 per diluted share, compared to net income of $3.1 billion, or $0.60 per diluted share in the year-ago quarter. Adjusting for $0.13 of amortization costs, $0.05 of merger and integration-related items, $0.03 of Cricket network decommissioning and $0.03 of other expenses, earnings per share was $0.74 compared to an adjusted $0.65 in the year-ago quarter, an increase of nearly 14%.

Cash from operating activities totaled $10.8 billion in the third quarter and $26.7 billion year to date; and capital expenditures totaled $5.3 billion and $13.9 billion year to date. Free cash flow — cash from operating activities minus capital expenditures — totaled $5.5 billion for the quarter and $12.8 billion year to date, an increase over the year-ago quarter even as the company continues to invest in its high-quality networks and in its customers.

The free cash flow dividend payout ratio was 57% year to date, improved from 67% in the second quarter.

Updated Outlook
The company also is increasing its adjusted EPS and free cash flow outlook for the year. For the full year, AT&T now expects adjusted EPS in the $2.68 to $2.74 range and free cash flow in the
$15 billion range or better.

For detailed financial and operating results, please go to the third-quarter earnings page on the AT&T Investor Relations website.

*Free cash flow dividend payout ratio is dividends divided by free cash flow.

1Expected range excludes adjustments for non-cash mark-to-market benefit plan adjustments, merger integration costs and other adjustments that are not reasonably estimable at this time.

AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.