AT&T : Complete 2022 Annual Report

AT&T Inc. 2022 Annual Report

Connecting changes everything

Our purpose

Connecting people

to greater possibility - with expertise, simplicity and inspiration.

To our shareholders

2022 was a year of major change for AT&T, and we are proud to have ended the year in a stronger position. The realities of our industry, changing consumer expectations and an evolving macroeconomic environment dictated our need for a simplified operating model and sharp execution.

That's why we made the structural moves we did to reposition our company, including successfully completing the separation of WarnerMedia. We have

confidence there is a bright future for an AT&T that delivers the best in connectivity.

Connectivity is ingrained in our legacy going back nearly 150 years. We have

the assets, talent and experience to connect people to greater possibility with simplicity, expertise and inspiration. In 2022, we worked to fulfill this

purpose in 3 ways:

1. We grew customer relationships at a near record-setting pace, taking full advantage of all-time-high levels of demand for strong, reliable connectivity.
2. We were effective and efficient in our operations, reaching more than $5 billion of our 3-year,$6 billion-plus run-ratecost transformation target.
3. Our deliberate capital allocation strategy enabled us to invest in 5G and fiber at historic levels, reduce our net debt by about $24 billion and set up a structure we believe will drive better returns for you, our shareholders.1 This includes continuing to provide an attractive dividend.

Consistency in operational excellence

Describing our go-to-market strategy is as simple as the strategy itself. Be consistent with our offers to our customers, and make it easy for them to do business with us.

Wireless

In U.S. wireless, we attracted nearly 2.9 million postpaid phone net additions in 2022, marking our second-bestannual results in more than a decade, behind only 2021. We also grew wireless service revenues by more than 5% year over year, representing a multi-yearhigh. And we did this while continuing to concentrate on profitability, increasing wireless EBITDA by nearly 4% and

achieving our most profitable year on record.2 We are also a leader in the Internet of Things (IoT). We added more than 12 million connected devices in 2022, becoming the first U.S. carrier to exceed 100 million connected devices.

1

John Stankey

Chief Executive Officer

2 AT&T Inc. 2022 Annual Report

AT&T has the ability to serve more than 22 million consumer and business locations with fiber.

Our wireless momentum was a direct result of our simplified value proposition, lower acquisition costs, distribution efficiencies and our ability to meet customers on their terms.

The strength of our wireless network played a large role in our success, with our recent spectrum investments performing even better than expected. In fact, we were efficient enough with our deployment of mid-band 5G spectrum that we reached more than 150 million people, more than double our original year-endcoverage target. And we expect to hit 200 million people by the end of 2023. As a result, our already consistent download speeds increased materially, as recently recognized in the Root Metrics second-half 2022 results. This increased speed provided another significant benefit to our customers.

Our wireless network is also the heart of FirstNet®, public safety's dedicated, nationwide communications platform. The AT&T and FirstNet networks cover more than 99% of the population today,3 and FirstNet covers more first responders than any other network in America.4 It's an honor to serve and support them with prioritized connectivity and capacity plus dedicated spectrum. We ended the year with about 4.4 million FirstNet connections

across more than 24,000 agencies.

Fiber

We delivered strong full-year results in AT&T Fiber® as well. Fiber is a durable, sustainable technology that connects people and businesses with each other and to the world. Fiber investments have a multi-decade lifespan, and we're investing heavily to build out our network. We believe that AT&T offers the best wired internet available. Quite simply, where we build fiber, we win.

2022 marked our fifth straight year with 1 million or more net additions, raising our AT&T Fiber subscriber base to more than 7 million. We led the industry in bringing fiber to homes5 and closed the year with the ability to serve more than 19 million consumer locations. We also have the ability to serve more than 3 million business locations. We are on track to reach our previously announced goal of 30 million-plus total locations, including consumer and business, by the end of 2025.

Our recently announced agreement to form a joint venture with BlackRock Alternatives - Gigapower - is an innovative new business model we are testing to dramatically increase the pace of fiber installation outside of our traditional wireline markets. We believe agile ventures like this open up new possibilities to connect underserved markets with fiber and can compete more effectively for the chance to co-invest with the U.S. government on our shared objectives of a better, connected America.

These results illustrate our approach has delivered, and while we'll remain agile as the industry and economy shift, we're confident in our ability to continue executing at a high level.

Corporate responsibility

This drive to connect people to greater possibility includes doing our part to create a more connected society and provide underserved communities with the resources they need for education, employment, health care and economic opportunity.

Despite the growing availability of high-quality connectivity, one-fifthof

the U.S. population is still impacted by the digital divide.6 We're passionate about addressing this issue because our country has a once-in-a-generationopportunity to close the broadband gap. Achieving this will give more Americans better opportunities to further their education and access online training to develop workforce skills, all of which helps foster greater economic equity. That's why we made a 3-year, $2 billion commitment in 2021 to help bridge the digital divide. With this commitment and AT&T's technology platforms for 5G and fiber deployment that are affordable, sustainable and durable, we have the expertise and scale to make a long-termdifference. We're working to address 3 key components to the digital divide:

1. Access. This primarily impacts areas of the country where deployment can be difficult or slow, but it's starting to pick up thanks to the more than $48 billion allocated by Congress and the Biden administration to expand broadband infrastructure. Decisions on where to invest in that infrastructure have largely been vested in states, tribal governments and municipalities, and we're working diligently to find the right opportunities for public- private partnerships that enable AT&T to help fund, build and maintain these networks.
2. Affordability. AT&T is a voluntary participant in the FCC's Affordable
   Connectivity Program that subsidizes the cost of wireless or internet service for eligible households. When paired with our low-cost Access from AT&T offering, qualified customers can receive internet speeds up to 100 Mbps for free.
3. Adoption. We're providing communities, students and parents with free digital literacy, online safety and digital learning tools so they understand and feel comfortable with connectivity and can get the most out of their internet connections. These include our Connected Learning Centers housed within local community organizations. The centers provide students and families with computers, high-speed internet access and digital learning and literacy resources. We have 20 of these centers today and plan to reach
   50 total locations by 2024.

3

We have a once- in-a-generation opportunity

to close the broadband gap.