What changed in this filing

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Item 1. Financial Statements

2025-04-29 compared with 2024-10-29 · 366 added, 561 removed, 730 unchanged (56% of the section changed)

2 unchanged sentences

Dollars in millions except per share amounts

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Operating Revenues

7 unchanged sentences

amortization shown separately below)

6,697 6,835 20,135 20,279

Selling, general and administrative 7,145 7,021

Asset impairments and abandonments and restructuring

4,422 604 5,061 604

Depreciation and amortization 5,190 5,047

5 unchanged sentences

Other income (expense) — net

717 440 1,850 2,362

Total other income (expense) 237 ( 978 )

3 unchanged sentences

Net Income Attributable to Noncontrolling Interest

Net Income (Loss) Attributable to AT&T

( 341 ) ( 306 )

Preferred Stock Dividends ( 52 ) ( 51 ) ( 153 ) ( 155 )

Net Income (Loss) Attributable to Common Stock

$ ( 226 ) $ 3,444 $ 6,715 $ 12,057

Basic Earnings (Loss) Per Share Attributable to

$ ( 0.03 ) $ 0.48 $ 0.93 $ 1.67

Diluted Earnings (Loss) Per Share Attributable to

$ ( 0.03 ) $ 0.48 $ 0.93 $ 1.67

Net Income Attributable to AT&T $ 4,351 $ 3,445

Preferred Stock Dividends and Redemption Gain

Net Income Attributable to Common Stock $ 4,395 $ 3,395

Basic Earnings Per Share Attributable to Common Stock $ 0.61 $ 0.47

Diluted Earnings Per Share Attributable to Common Stock $ 0.61 $ 0.47

Weighted Average Number of Common Shares

Outstanding — Basic (in millions)

7,202 7,185 7,197 7,178

Weighted Average Number of Common Shares

Outstanding — with Dilution (in millions)

7,208 7,185 7,200 7,280

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Dollars in millions

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Net income $ 4,692 $ 3,751

1 unchanged sentence

Foreign currency:

Translation adjustment, net of taxes of $( 107 ), $( 29 ), $( 168 )

( 137 ) ( 90 ) ( 329 ) 367

Reclassification adjustment included in net income, net of

taxes of $ 0 , $ 0 , $( 14 ) and $ 0

Net unrealized gains (losses), net of taxes of $ 6 , $( 12 ), $ 5

30 ( 37 ) 13 ( 25 )

Reclassification adjustment included in net income, net of

taxes of $ 0 , $ 1 , $ 3 and $ 3

Translation adjustment, net of taxes of $ 10 and $ 8

Net unrealized gains (losses), net of taxes of $ 3 and $( 2 )

Reclassification adjustment included in net income, net of taxes of $ 0 and $ 2

Derivative instruments:

Net unrealized gains (losses), net of taxes of $( 102 ), $ 211 ,

$( 118 ) and $ 213

( 315 ) 843 ( 364 ) 867

Reclassification adjustment included in net income, net of

taxes of $ 4 , $ 3 , $ 11 and $ 9

Net unrealized gains (losses), net of taxes of $( 203 ) and $ 49

Reclassification adjustment included in net income, net of taxes of $ 4 and $ 3

Defined benefit postretirement plans:

Amortization of net prior service credit included in net

income, net of taxes of $( 123 ), $( 160 ),$( 369 ) and $( 481 )

Amortization of net prior service credit included in net income, net of taxes of

$( 115 ) and $( 123 )

( 356 ) ( 381 )

Other comprehensive income (loss) ( 937 ) ( 133 )

Total comprehensive income (loss)

( 647 ) 4,066 6,193 12,820

Total comprehensive income attributable to

noncontrolling interest

( 319 ) ( 331 ) ( 977 ) ( 829 )

Total Comprehensive Income (Loss) Attributable to AT&T

Total comprehensive income

Total comprehensive income attributable to noncontrolling interest ( 341 ) ( 306 )

Total Comprehensive Income Attributable to AT&T

$ 3,414 $ 3,312

2 unchanged sentences

Dollars in millions except per share amounts

September 30, December 31,

March 31, December 31,

Assets (Unaudited)

24 unchanged sentences

Deferred Credits and Other Noncurrent Liabilities

Deferred income taxes 58,461 58,666

Noncurrent deferred tax liabilities 59,144 58,939

Postemployment benefit obligation 9,040 9,025

4 unchanged sentences

Stockholders’ Equity

Preferred stock ($ 1 par value, 10,000,000 authorized at September 30, 2024 and December 31, 2023):

Series A ( 48,000 issued and outstanding at September 30, 2024 and December 31, 2023)

Series B ( 20,000 issued and outstanding at September 30, 2024 and December 31, 2023)

Series C ( 70,000 issued and outstanding at September 30, 2024 and December 31, 2023)

Common stock ($ 1 par value, 14,000,000,000 authorized at September 30, 2024 and

Preferred stock ($ 1 par value, 10,000,000 authorized at March 31, 2025 and December 31, 2024):

Series A ( 48,000 issued and outstanding at March 31, 2025 and December 31, 2024)

Series B ( 20,000 issued and 0 outstanding at March 31, 2025 and 20,000 issued and outstanding

December 31, 2024)

issued 7,620,748,598 at September 30, 2024 and December 31, 2023)

Series C ( 70,000 issued and outstanding at March 31, 2025 and December 31, 2024)

Common stock ($ 1 par value, 14,000,000,000 authorized at March 31, 2025 and

December 31, 2024:

issued 7,620,748,598 at March 31, 2025 and December 31, 2024)

Additional paid-in capital 106,302 109,108

Retained (deficit) earnings ( 185 ) ( 5,015 )

Treasury stock ( 446,348,901 at September 30, 2024 and 470,685,237 at December 31, 2023, at cost)

Retained earnings 4,215 1,871

Treasury stock ( 425,186,872 at March 31, 2025 and 444,853,148 at December 31, 2024, at cost)

( 14,252 ) ( 15,023 )

Accumulated other comprehensive income 648 2,300

Accumulated other comprehensive income (loss) ( 142 ) 795

Noncontrolling interest 16,114 13,873

4 unchanged sentences

Dollars in millions

Nine months ended

September 30,

Three months ended

Operating Activities

3 unchanged sentences

Provision for uncollectible accounts 516 472

Deferred income tax expense 1,811 3,163

Net (gain) loss on investments, net of impairments 88 335

Pension and postretirement benefit expense (credit) ( 1,412 ) ( 1,966 )

Actuarial and settlement (gain) loss on pension and postretirement benefits - net — ( 145 )

Asset impairments and abandonments and restructuring 504 159

Pension and postretirement benefit expense (credit) ( 397 ) ( 471 )

Net (gain) loss on investments

Changes in operating assets and liabilities:

Receivables 15 512

Equipment installment receivables and related sales

Contract asset and cost deferral

Inventories, prepaid and other current assets

( 661 ) ( 24 )

Accounts payable and other accrued liabilities ( 3,297 ) ( 3,419 )

Equipment installment receivables and related sales ( 899 ) ( 56 )

Deferred customer contract acquisition and fulfillment costs 490 47

Changes in income taxes

Postretirement claims and contributions ( 68 ) ( 54 )

16 unchanged sentences

Repayment of long-term debt ( 1,526 ) ( 4,685 )

Repayment of note payable to DIRECTV — ( 130 )

Payment of vendor financing ( 203 ) ( 841 )

Redemption of preferred stock

Purchase of treasury stock ( 218 ) ( 157 )

1 unchanged sentence

Issuance of preferred interests in subsidiary 2,221 —

Redemption of preferred interests in subsidiary — ( 5,333 )

Dividends paid ( 2,091 ) ( 2,034 )

7 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended Nine months ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Shares Amount Shares Amount Shares Amount Shares Amount

Three months ended

March 31, 2025 March 31, 2024

Shares Amount Shares Amount

Preferred Stock - Series A

11 unchanged sentences

Balance at beginning of period $ 109,108 $ 114,519

Redemption of preferred stock

Preferred stock dividends — ( 98 )

Common stock dividends

($ 0.2775 , $ 0.2775 , $ 0.8325 and $ 0.8325 per share)

( 1,992 ) ( 1,997 ) ( 4,007 ) ( 5,998 )

Common stock dividends ($ 0.2775 and $ 0.2775 per share)

Issuance of treasury stock ( 452 ) ( 413 )

Share-based payments ( 189 ) ( 266 )

Redemption or reclassification of

interest held by noncontrolling owners

— — ( 292 ) —

Redemption or reclassification of interest held by noncontrolling owners — ( 140 )

Balance at end of period $ 106,302 $ 111,599

Retained (Deficit) Earnings

Retained Earnings (Deficit)

Balance at beginning of period $ 1,871 $ ( 5,015 )

Net income (loss) attributable to AT&T

( 174 ) 3,495 6,868 12,212

Net income attributable to AT&T

Preferred stock redemption gain

Preferred stock dividends ( 86 ) —

Common stock dividends

($ 0.2775 , $ 0.0000 , $ 0.5550 and $ 0.0000 per share)

( 13 ) — ( 2,002 ) —

Common stock dividends ($ 0.2775 and $ 0.2775 per share)

Balance at end of period $ 4,215 $ ( 1,570 )

2 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended Nine months ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

Shares Amount Shares Amount Shares Amount Shares Amount

Three months ended

March 31, 2025 March 31, 2024

Shares Amount Shares Amount

Treasury Stock

Balance at beginning of period ( 445 ) $ ( 15,023 ) ( 471 ) $ ( 16,128 )

Repurchase and acquisition of

( 2 ) ( 43 ) — ( 1 ) ( 11 ) ( 202 ) ( 10 ) ( 190 )

Repurchase and acquisition of common stock ( 9 ) ( 218 ) ( 9 ) ( 157 )

Reissuance of treasury stock 29 989 29 1,008

Balance at end of period ( 425 ) $ ( 14,252 ) ( 451 ) $ ( 15,277 )

Accumulated Other Comprehensive Income

Attributable to AT&T, net of tax

Accumulated Other Comprehensive Income (Loss) Attributable to AT&T, net of tax

Balance at beginning of period $ 795 $ 2,300

Other comprehensive income

(loss) attributable to AT&T

( 792 ) 240 ( 1,652 ) ( 221 )

Other comprehensive income (loss) attributable to AT&T ( 937 ) ( 133 )

Balance at end of period $ ( 142 ) $ 2,167

1 unchanged sentence

Balance at beginning of period $ 13,873 $ 14,145

Net income attributable to

noncontrolling interest

283 295 870 787

Issuance and acquisition by

noncontrolling owners

— ( 1 ) — 5,180

Redemption of noncontrolling

Net income attributable to noncontrolling interest 305 270

Issuance and acquisition by noncontrolling owners 2,221 —

Redemption of noncontrolling interest — ( 17 )

Distributions ( 285 ) ( 318 )

Balance at end of period $ 16,114 $ 14,080

Total Stockholders' Equity at

beginning of period

Total Stockholders’ Equity at beginning of period

$ 118,245 $ 117,442

Total Stockholders' Equity at

end of period

Total Stockholders’ Equity at end of period

$ 119,858 $ 118,620

1 unchanged sentence

See Notes to Consolidated Financial Statements.

SEPTEMBER 30, 2024

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

7 unchanged sentences

These consolidated financial statements include all adjustments that are necessary to present fairly the results for the presented interim periods, consisting of normal recurring accruals and other items.

All significant intercompany transactions are eliminated in the consolidation process.

Investments in subsidiaries and partnerships which we do not control but have significant influence are accounted for under the equity method.

Earnings from certain investments accounted for using the equity method are included in our results on a one quarter lag.

We also record our proportionate share of our equity method investees’ other comprehensive income (OCI) items, including translation adjustments.

The consolidated financial statements include our controlled subsidiaries, as well as variable interest entities (VIE) where we are deemed to be the primary beneficiary.

All significant intercompany transactions are eliminated in consolidation.

Investments in entities that we do not control but have significant influence are accounted for under the equity method.

The preparation of financial statements in conformity with U.S.

1 unchanged sentence

Actual results could differ from those estimates.

Goodwill Impairment During the third quarter of 2024, we updated the long-term strategic plan of our Business Wireline reporting unit.

The updated plans reflected lower long-term projected future cash flows associated with the industry-wide secular decline, including a faster-than-previously anticipated decline of legacy services.

We identified this as an impairment indicator and performed an interim quantitative goodwill impairment test of our Business Wireline reporting unit.

The interim impairment test methodology was consistent with our approach for annual impairment testing, using similar models updated with our current view of key inputs and assumptions.

We concluded that the calculated fair value of the Business Wireline reporting unit was lower than the book value, resulting in a goodwill impairment.

As a result, in the third quarter of 2024, we recorded a noncash goodwill impairment charge of $ 4,422 in our consolidated statements of income, which represented the entirety of Business Wireline reporting unit goodwill.

“Goodwill – Net” included on our consolidated balance sheet at September 30, 2024 totaled $ 63,432 , which is attributable to our Mobility and Consumer Wireline reporting units in the Communications segment.

No indicators of impairment were identified for our Mobility and Consumer Wireline reporting units.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Certain prior period amounts have been conformed to the current period’s presentation providing further disaggregation of activities within Cash from Operations in our consolidated statements of cash flows and additional revenue categories for our Business Wireline and Consumer Wireline business units (see Note 5).

EARNINGS PER SHARE

A reconciliation of the numerators and denominators of basic and diluted earnings per share is shown in the table below:

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Numerator for basic earnings per share:

Net Income (Loss) Attributable to Common Stock $ ( 226 ) $ 3,444 $ 6,715 $ 12,057

Dilutive potential common shares:

Mobility preferred interests — — — 72

Share-based payment — — — 10

Net Income Attributable to Common Stock $ 4,395 $ 3,395

Dilutive impact of share-based payment 4 —

Numerator for diluted earnings per share $ 4,399 $ 3,395

2 unchanged sentences

Weighted average number of common shares outstanding 7,213 7,192

Dilutive potential common shares:

Mobility preferred interests (in shares) — — — 95

Share-based payment (in shares) 1

Dilutive impact of share-based payment (in shares) 10 1

Denominator for diluted earnings per share 7,223 7,193

1 For the three months ended September 30, 2024, dilutive potential common shares are not included in the computation of diluted earnings per share because their effect is antidilutive as a result of the net loss attributable to common stock.

On April 5, 2023, we repurchased all our Series A Cumulative Perpetual Preferred Membership Interests in AT&T Mobility II LLC (Mobility preferred interests).

For periods prior to repurchase, under Accounting Standards Update (ASU) No.

2020-06, “Debt—Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (ASU 2020-06), the ability to settle the Mobility preferred interests in stock was reflected in our diluted earnings per share calculation.

SEPTEMBER 30, 2024

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

1 unchanged sentence

OTHER COMPREHENSIVE INCOME

Changes in the balances of each component included in accumulated OCI are presented below.

Changes in the balances of each component included in accumulated other comprehensive income (OCI) are presented below.

All amounts are net of tax.

10 unchanged sentences

21 11 ( 613 ) ( 356 ) ( 937 )

Balance as of September 30, 2024 $ ( 1,539 ) $ ( 34 ) $ ( 1,360 ) $ 3,581 $ 648

Balance as of March 31, 2025 $ ( 1,734 ) $ ( 35 ) $ ( 1,217 ) $ 2,844 $ ( 142 )

Foreign Currency Translation Adjustment Net Unrealized Gains (Losses) on Securities Net Unrealized Gains (Losses) on Derivative Instruments Defined Benefit Postretirement Plans Accumulated Other Comprehensive Income (Loss)

9 unchanged sentences

29 ( 4 ) 223 ( 381 ) ( 133 )

Balance as of September 30, 2023 $ ( 1,433 ) $ ( 108 ) $ ( 1,096 ) $ 5,182 $ 2,545

Balance as of March 31, 2024 $ ( 1,308 ) $ ( 61 ) $ ( 806 ) $ 4,342 $ 2,167

1 (Gains) losses are included in “Other income (expense) - net” in the consolidated statements of income.

5 unchanged sentences

Communications and Latin America.

We also evaluate segment and business unit performance based on EBITDA and/or EBITDA margin, which is defined as operating income excluding depreciation and amortization.

EBITDA is used as part of our management reporting and we believe EBITDA to be a relevant and useful measurement to our investors as it measures the cash generation potential of our business units.

EBITDA does not give effect to depreciation and amortization expenses incurred in operating income nor is it burdened by cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses.

EBITDA margin is EBITDA divided by total revenue.

Our chief operating decision maker (CODM) is our Chief Executive Officer and President.

Our CODM uses operating income to evaluate performance and allocate resources, including capital allocations, when managing the business.

Our CODM manages operations through the review of actual and forecasted “Operations and Support Expenses” information at a segment and business unit level, with Communications and Latin America segments primarily evaluated on a direct cost basis and comprised of equipment, compensation, network and technology, sales, advertising and other costs.

Additionally, business unit expenses within the Communications segment include direct and shared costs.

Direct costs are incurred in support of products and services offered by the business units, such as equipment costs (predominantly wireless devices), network access, rents, leases, sales support, customer provisioning and commission expenses.

Shared costs amongst the business units generally include information technology, network engineering and construction costs, advertising and other general and administrative expenses.

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The Communications segment provides wireless and wireline telecom and broadband services to consumers located in the U.S.

3 unchanged sentences

• Mobility provides nationwide wireless service and equipment.

• Business Wireline provides advanced ethernet-based fiber services, IP Voice and managed professional services, as well as traditional voice and data services and related equipment to business customers.

In the first quarter of 2024, we began

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

offering our fixed wireless access product that provides internet services delivered over our 5G wireless network where available.

• Consumer Wireline provides broadband services, including fiber connections that provide multi-gig services to residential customers in select locations and our fixed wireless access product that provides home internet services delivered over our 5G wireless network where available.

• Business Wireline provides advanced ethernet-based fiber services, fixed wireless services, IP Voice and managed professional services, as well as legacy voice and data services and related equipment, to business customers.

• Consumer Wireline provides broadband services, including fiber connections that provide multi-gig services, and our fixed wireless access product (AT&T Internet Air or “AIA”) that provides internet services delivered over our 5G wireless network, to residential customers in select locations.

Consumer Wireline also provides legacy telephony voice communication services.

9 unchanged sentences

“Interest expense,” “Other income (expense) – net” and “Equity in net income of affiliates” are managed only on a total company basis and are, accordingly, reflected only in consolidated results.

For the three months ended September 30, 2024

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended March 31, 2025

Revenues Operations

Expenses EBITDA Depreciation

Expenses Depreciation

Amortization Operating

5 unchanged sentences

Total Communications 29,560 17,596 4,973 6,991

Latin America - Mexico 1,022 854 168 158 10

Segment Total 30,096 17,959 12,137 4,971 7,166

Corporate and Other

DTV-related retained costs — 107 ( 107 ) 95 ( 202 )

Parent administration support — 401 ( 401 ) 2 ( 403 )

Securitization fees

31 134 ( 103 ) — ( 103 )

Value portfolio 86 26 60 6 54

Total Corporate 117 668 ( 551 ) 103 ( 654 )

Certain significant items — 4,383 ( 4,383 ) 13 ( 4,396 )

Total Corporate and Other 117 5,051 ( 4,934 ) 116 ( 5,050 )

Latin America

971 778 150 43

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended September 30, 2023

Revenues Operations and Support Expenses EBITDA Depreciation and Amortization Operating Income (Loss)

Communications

Mobility $ 20,692 $ 11,795 $ 8,897 $ 2,134 $ 6,763

Business Wireline 5,221 3,526 1,695 1,345 350

Consumer Wireline 3,331 2,300 1,031 871 160

Total Communications 29,244 17,621 11,623 4,350 7,273

Latin America - Mexico 992 837 155 184 ( 29 )

Segment Total 30,531 18,374 5,123 7,034

9 unchanged sentences

$ 30,626 $ 19,682 $ 5,190 $ 5,754

For the nine months ended September 30, 2024

Revenues Operations

Expenses EBITDA Depreciation

Amortization Operating

Income (Loss)

For the three months ended March 31, 2024

Revenues Operations and Support Expenses Depreciation and Amortization Operating Income (Loss)

Communications

3 unchanged sentences

Total Communications 28,857 17,382 4,730 6,745

Latin America - Mexico 3,188 2,662 526 507 19

Latin America

1,063 883 177 3

Segment Total 29,920 18,265 4,907 6,748

3 unchanged sentences

Securitization fees

26 165 — ( 139 )

Value portfolio 82 26 4 52

3 unchanged sentences

$ 30,028 $ 19,134 $ 5,047 $ 5,847

SEPTEMBER 30, 2024

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the nine months ended September 30, 2023

Revenues Operations and Support Expenses EBITDA Depreciation and Amortization Operating Income (Loss)

Communications

Mobility $ 61,589 $ 35,587 $ 26,002 $ 6,355 $ 19,647

Business Wireline 15,831 10,699 5,132 4,008 1,124

Consumer Wireline 9,821 6,810 3,011 2,589 422

Total Communications 87,241 53,096 34,145 12,952 21,193

Latin America - Mexico 2,842 2,396 446 544 ( 98 )

Segment Total 90,083 55,492 34,591 13,496 21,095

Corporate and Other

DTV-related retained costs — 514 ( 514 ) 440 ( 954 )

Parent administration support ( 13 ) 1,039 ( 1,052 ) 4 ( 1,056 )

Securitization fees 61 439 ( 378 ) — ( 378 )

Value portfolio 275 77 198 16 182

Total Corporate 323 2,069 ( 1,746 ) 460 ( 2,206 )

Certain significant items — 644 ( 644 ) 55 ( 699 )

Total Corporate and Other 323 2,713 ( 2,390 ) 515 ( 2,905 )

$ 90,406 $ 58,205 $ 32,201 $ 14,011 $ 18,190

The following table is a reconciliation of Segment Operating Income to “Income Before Income Taxes” reported in our consolidated statements of income:

Three months ended

September 30, Nine months ended

September 30,

2024 2023 2024 2023

Communications $ 6,991 $ 6,745

3 unchanged sentences

Corporate ( 682 ) ( 734 )

Transaction and other costs ( 34 ) ( 72 ) ( 101 ) ( 72 )

Transaction, legal and other costs

( 79 ) ( 32 )

Amortization of intangibles acquired ( 9 ) ( 15 )

5 unchanged sentences

Other income (expense) — net

717 440 1,850 2,362

Income Before Income Taxes $ 5,991 $ 4,869

SEPTEMBER 30, 2024

The following tables present assets, investments in equity affiliates and capital expenditures by segment:

March 31, December 31,

Assets Investments in

Equity Method

Investees Assets

Investments in

Equity Method

Communications

$ 484,165 $ — $ 481,757 $ —

Latin America 8,130 — 7,808 —

Corporate and eliminations

( 94,828 ) 942 ( 94,770 ) 295

Total $ 397,467 $ 942 $ 394,795 $ 295

Three months ended

Capital Expenditures

Communications $ 4,045 $ 3,545

Latin America 71 58

Corporate and eliminations

Total $ 4,277 $ 3,758

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

3 unchanged sentences

The following tables set forth reported revenue by category and by business unit:

For the three months ended September 30, 2024

Communications

Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total

Wireless service $ 16,539 $ — $ — $ 645 $ — $ 17,184

Business service — 4,417 — — — 4,417

Broadband — — 2,838 — — 2,838

Legacy voice and data — — 307 — 66 373

Other — — 271 — 51 322

Total Service 16,539 4,417 3,416 645 117 25,134

Equipment 4,513 189 — 377 — 5,079

Total $ 21,052 $ 4,606 $ 3,416 $ 1,022 $ 117 $ 30,213

For the three months ended September 30, 2023

Communications

Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total

Wireless service $ 15,908 $ — $ — $ 672 $ — $ 16,580

Business service — 5,087 — — — 5,087

Broadband — — 2,667 — — 2,667

Legacy voice and data — — 368 — 69 437

Other — — 296 — 45 341

Total Service 15,908 5,087 3,331 672 114 25,112

Equipment 4,784 134 — 320 — 5,238

Total $ 20,692 $ 5,221 $ 3,331 $ 992 $ 114 $ 30,350

For the nine months ended September 30, 2024

For the three months ended March 31, 2025

Communications

Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total

Wireless service $ 48,810 $ — $ — $ 2,034 $ — $ 50,844

Business service — 13,688 — — — 13,688

Broadband — — 8,301 — — 8,301

Legacy voice and data — — 972 — 190 1,162

Wireless $ 16,651 $ — $ — $ 615 $ — $ 17,266

Fiber and advanced connectivity 1

— 1,780 2,066 — — 3,846

Non-fiber consumer broadband — — 918 — — 918

Legacy and other transitional — 2,475 286 — 46 2,807

Other — — 252 — 49 301

2 unchanged sentences

Total $ 21,570 $ 4,468 $ 3,522 $ 971 $ 95 $ 30,626

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the nine months ended September 30, 2023

1 Advanced connectivity services reported in Business Wireline.

For the three months ended March 31, 2024

Communications

Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total

Wireless service $ 47,136 $ — $ — $ 1,898 $ — $ 49,034

Business service — 15,401 — — — 15,401

Broadband — — 7,755 — — 7,755

Legacy voice and data — — 1,147 — 232 1,379

Wireless $ 15,994 $ — $ — $ 690 $ — $ 16,684

Fiber and advanced connectivity 1

— 1,703 1,736 — — 3,439

Non-fiber consumer broadband — — 986 — — 986

Legacy and other transitional — 2,997 342 — 62 3,401

Other — — 286 — 46 332

2 unchanged sentences

Total $ 20,594 $ 4,913 $ 3,350 $ 1,063 $ 108 $ 30,028

1 Advanced connectivity services reported in Business Wireline.

Deferred Customer Contract Acquisition and Fulfillment Costs

Costs to acquire and fulfill customer contracts, including commissions on service activations for our Mobility, Business Wireline and Consumer Wireline services, are deferred and amortized over the contract period or expected customer relationship life, which typically ranges from three years to five years .

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table presents the deferred customer contract acquisition and fulfillment costs included on our consolidated balance sheets:

September 30, December 31,

March 31, December 31,

Consolidated Balance Sheets 2025 2024

7 unchanged sentences

Total deferred customer contract fulfillment costs $ 5,217 $ 5,390

The following table presents deferred customer contract acquisition and fulfillment cost amortization, which are primarily included in “Selling, general and administrative” and “Other cost of revenues,” respectively, for the nine months ended:

September 30, September 30,

March 31, March 31,

Consolidated Statements of Income 2025 2024

6 unchanged sentences

Our contract assets primarily relate to our wireless businesses.

Promotional equipment sales where we offer handset credits, which are allocated between equipment and service in proportion to their standalone selling prices, when customers commit to a

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

specified service period result in additional contract assets recognized.

Promotional equipment sales where we offer handset credits, which are allocated between equipment and service in proportion to their standalone selling prices, when customers commit to a specified service period result in additional contract assets recognized.

These contract assets will amortize over the service contract period, resulting in lower future service revenue.

2 unchanged sentences

The following table presents contract assets and liabilities on our consolidated balance sheets:

September 30, December 31,

March 31, December 31,

Consolidated Balance Sheets 2025 2024

4 unchanged sentences

Our beginning of period contract liability recorded as customer contract revenue during 2025 was $ 3,500 .

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Remaining Performance Obligations

3 unchanged sentences

Performance obligations associated with wireless contracts are estimated using a portfolio approach in which we review all relevant promotional activities, calculating the remaining performance obligation using the average service component for the portfolio and the average device price.

As of September 30, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 38,581 , of which we expect to recognize approximately 63 % by the end of 2025, with the balance recognized thereafter.

As of March 31, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 41,685 , of which we expect to recognize approximately 83 % by the end of 2026, with the balance recognized thereafter.

PENSION AND POSTRETIREMENT BENEFITS

4 unchanged sentences

We recognize actuarial gains and losses on pension and postretirement plan assets in our consolidated results as a component of “Other income (expense) – net” at our annual measurement date of December 31, unless earlier remeasurements are required.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table details qualified pension and postretirement benefit costs included in the accompanying consolidated statements of income.

The service cost component of net periodic pension (credit) cost is recorded in operating expenses in the consolidated statements of income while the remaining components are recorded in “Other income (expense) – net.”

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Pension cost:

3 unchanged sentences

Amortization of prior service credit ( 12 ) ( 22 )

Net pension (credit) cost before remeasurement ( 56 ) ( 65 ) ( 169 ) ( 286 )

Actuarial (gain) loss — ( 71 ) — 218

Settlement (gain) loss — — — ( 363 )

Net pension (credit) cost $ ( 12 ) $ ( 57 )

1 unchanged sentence

Service cost – benefits earned during the period $ 4 $ 5

Interest cost on accumulated postretirement benefit

77 85 232 255

Interest cost on accumulated postretirement benefit obligation

Expected return on assets ( 10 ) ( 14 )

3 unchanged sentences

We also provide senior- and middle-management employees with nonqualified, unfunded supplemental retirement and savings plans.

Net supplemental pension benefits costs not included in the table above were $ 17 and $ 19 in the third quarter and $ 50 and $ 56 for the first nine months of 2024 and 2023, respectively.

Net supplemental pension benefits costs not included in the table above were $ 16 and $ 17 for the three months ended March 31, 2025 and 2024, respectively.

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

FAIR VALUE MEASUREMENTS AND DISCLOSURE

8 unchanged sentences

There have been no changes in the methodologies used since December 31, 2024.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Long-Term Debt and Other Financial Instruments

The carrying amounts and estimated fair values of our long-term debt, including current maturities, and other financial instruments are summarized as follows:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Carrying Fair Carrying Fair

9 unchanged sentences

The fair value measurements used for notes and debentures are considered Level 2 and are determined using various methods, including quoted prices for identical or similar securities in both active and inactive markets.

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of September 30, 2024 and December 31, 2023.

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of March 31, 2025 and December 31, 2024.

Derivatives designated as hedging instruments are reflected as “Prepaid and other current assets,” “Other Assets,” “Accounts payable and accrued liabilities,” and “Other noncurrent liabilities” on our consolidated balance sheets.

September 30, 2024

March 31, 2025

Level 1 Level 2 Level 3 Total

8 unchanged sentences

Cross-currency swaps — ( 3,849 ) — ( 3,849 )

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

December 31, 2024

8 unchanged sentences

Liability Derivatives

Interest rate swaps — ( 2 ) — ( 2 )

Cross-currency swaps — ( 4,163 ) — ( 4,163 )

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Investment Securities

4 unchanged sentences

The components comprising total gains and losses in the period on equity securities are as follows:

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Total gains (losses) recognized on equity securities $ ( 27 ) $ 97

1 unchanged sentence

Unrealized gains (losses) recognized on equity securities held at end of period $ ( 27 ) $ 100

At September 30, 2024, available-for-sale debt securities totaling $ 1,198 have maturities as follows - less than one year:

At March 31, 2025, available-for-sale debt securities totaling $ 686 have maturities as follows - less than one year:

one to three years:

14 unchanged sentences

The purpose of these contracts is to hedge foreign currency risk associated with changes in spot rates on foreign denominated debt.

For cross-currency hedges, we have elected to exclude the change in fair value of the swap related to both time value and cross-currency basis spread from the assessment of hedge effectiveness.

For cross-currency hedges, we have elected to exclude the change in fair value of the swap related to both time value and cross-currency

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

basis spread from the assessment of hedge effectiveness.

For foreign exchange contracts, we have elected to exclude the change in fair value of forward points from the assessment of hedge effectiveness.

3 unchanged sentences

Except for excluded components, changes in the fair value of derivative instruments designated as fair value hedges are offset against the change in fair value of the hedged assets or liabilities through earnings.

In the nine months ended September 30, 2024 and 2023, no ineffectiveness was measured on fair value hedges.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

In the three months ended March 31, 2025 and 2024, no ineffectiveness was measured on fair value hedges.

Cash Flow Hedging We designate some of our cross-currency swaps as cash flow hedges to hedge our exposure to variability in expected future cash flows that are attributable to foreign currency risk and interest rate risk generated from our foreign-denominated debt.

10 unchanged sentences

Collateral and Credit-Risk Contingency We have entered into agreements with our derivative counterparties establishing collateral thresholds based on respective credit ratings and netting agreements.

At September 30, 2024, we had posted collateral of $ 670 (a deposit asset) and held collateral of $ 2 (a receipt liability).

Under the agreements, if AT&T’s credit rating had been downgraded two ratings levels by Fitch Ratings, one level by S&P and one level by Moody’s before the final collateral exchange in September, we would have been required to post additional collateral of $ 52 .

At March 31, 2025, we had posted collateral of $ 196 (a deposit asset) and held collateral of $ 0 (a receipt liability).

Under the agreements, if AT&T’s credit rating had been downgraded two ratings levels by Fitch Ratings, one level by S&P and one level by Moody’s before the final collateral exchange in March, we would have been required to post additional collateral of $ 50 .

If AT&T’s credit rating had been downgraded three ratings levels by Fitch Ratings, two levels by S&P and two levels by Moody’s, we would have been required to post additional collateral of $ 3,657 .

2 unchanged sentences

Following are the notional amounts of our outstanding derivative positions:

September 30, December 31,

Interest rate swaps $ — $ 1,750

March 31, December 31,

Cross-currency swaps $ 36,532 $ 34,884

Total $ 36,532 $ 34,884

SEPTEMBER 30, 2024

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

Effect of Derivatives on the Consolidated Statements of Income

Three months ended Nine months ended

September 30, September 30,

Three months ended

Fair Value Hedging Relationships 2025 2024

6 unchanged sentences

Gain (loss) recognized in accumulated OCI ( 831 ) 255

Foreign exchange contracts:

Gain (loss) on foreign exchange contracts — 1 — 12

Gain (loss) on long-term debt — ( 1 ) — ( 12 )

Gain (loss) recognized in accumulated OCI — 18 — 12

In addition, the net swap settlements that accrued and settled in the periods above were offset against “Interest expense.”

The following table presents information for our cash flow hedging relationships:

Three months ended Nine months ended

September 30, September 30,

Three months ended

Cash Flow Hedging Relationships 2025 2024

5 unchanged sentences

( 15 ) ( 15 )

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, impairment indicators may subject goodwill to nonrecurring fair value measurements.

The implied fair value of the Business Wireline reporting unit was estimated using the discounted cash flow approach, which is considered Level 3.

Goodwill related to the Business Wireline reporting unit was fully impaired at September 30, 2024 (see Note 1).

SALES OF RECEIVABLES

2 unchanged sentences

Under the terms of our agreements for these programs, we continue to service the transferred receivables on behalf of the financial institutions.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table sets forth a summary of cash proceeds received, net of remittances paid, from sales of receivables:

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Net cash received (paid) from equipment installment

receivables program 1

$ ( 568 ) $ 293 $ ( 1,121 ) $ 233

Three months ended

Net cash received (paid) from equipment installment receivables program 1

Net cash received (paid) from revolving receivables program

938 479 1,185 1,479

Net cash received (paid) from other programs

— ( 376 ) — ( 632 )

Total net cash impact to cash flows from operating activities 2

$ 370 $ 396 $ 64 $ 1,080

1 Cash from initial sales of $ 2,442 and $ 2,937 for the three months and $ 7,848 and $ 8,122 for the nine months ended September 30, 2024 and 2023, respectively.

1 Cash from initial sales of $ 3,798 and $ 2,874 for the three months ended March 31, 2025 and 2024, respectively.

2 Net of facility fees.

2 unchanged sentences

In the event cash is received on the beneficial interests, those receipts are classified as cash flows from investing activities, when applicable.

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Our equipment installment and revolving receivables programs are discussed in detail below.

The following table sets forth a summary of the receivables and accounts being serviced:

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Equipment Equipment

18 unchanged sentences

Accordingly, we record a guarantee obligation for this estimated amount at the time the receivables are transferred.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table sets forth a summary of equipment installment receivables sold under this program:

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Gross receivables sold 1

1 unchanged sentence

Net receivables sold 2

2,340 2,842 7,535 7,834

Cash proceeds received 3,798 2,874

6 unchanged sentences

The fair value measurements used for the beneficial interests and the guarantee obligation are considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 7).

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table presents the previously transferred equipment installment receivables, which we repurchased in exchange for the associated beneficial interests:

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Fair value of repurchased receivables $ 1,937 $ 718

1 unchanged sentence

Gain (loss) on repurchases 1

$ ( 5 ) $ ( 8 ) $ ( 27 ) $ ( 13 )

1 These gains (losses) are included in “Selling, general and administrative” expense in the consolidated statements of income.

At September 30, 2024 and December 31, 2023, our beneficial interests were $ 2,875 and $ 2,270 , respectively, of which $ 1,681 and $ 1,296 are included in “Prepaid and other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at September 30, 2024 and December 31, 2023 was $ 236 and $ 385 , respectively, of which $ 121 and $ 111 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our beneficial interests and guarantee obligation.

At March 31, 2025 and December 31, 2024, our beneficial interests were $ 2,083 and $ 3,185 , respectively, of which $ 1,189 and $ 1,906 are included in “Prepaid and other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at March 31, 2025 and December 31, 2024 was $ 295 and $ 301 , respectively, of which $ 162 and $ 150 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our beneficial interests and guarantee obligation.

Revolving Receivables Program

5 unchanged sentences

Our maximum exposure to loss related to these receivables transferred is limited to the derecognized amount outstanding.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table sets forth a summary of the revolving receivables sold:

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

Three months ended

Gross receivables sold/cash proceeds received 1

1 unchanged sentence

Total collections under revolving agreement

4,650 3,553 13,196 3,553

Net cash proceeds received

$ 970 $ 500 $ 1,270 $ 1,500

Net receivables sold 2

$ 7,142 $ 4,063

1 Includes initial sales of receivables of $ 970 and $ 500 for the three months and $ 1,270 and $ 1,500 for the nine months ended September 30, 2024 and 2023, respectively.

1 Includes initial sales of receivables of $ 170 and $ 300 for the three months ended March 31, 2025 and 2024, respectively.

2 Receivables net of allowance and other reserves.

1 unchanged sentence

We account for our investment in DIRECTV under the equity method and record our share of DIRECTV earnings as equity in net income of affiliates, with DIRECTV considered a related party.

On September 29, 2024, we agreed to sell our interest in DIRECTV to TPG Capital for approximately $ 7,600 in cash payments through 2029, inclusive of third-quarter 2024 distributions of $ 623 .

In addition to quarterly distributions through 2025, including payout of common catch-up units, this consideration includes notes payable to AT&T of approximately $ 2,550 and a dividend of $ 1,150 .

On September 29, 2024, we agreed to sell our interest in DIRECTV to TPG for approximately $ 7,600 in cash payments through 2029, inclusive of approximately $ 3,120 total distributions received towards the transaction price as of March 31, 2025, which included a first-quarter 2025 dividend of $ 1,138 .

The transaction is expected to close in mid-2025, pending customary closing conditions.

We expect a gain on sale, whose amount will be dependent on the timing of close.

At September 30, 2024, our investment in DIRECTV was reduced to zero on our consolidated balance sheet, resulting from aggregate cash receipts exceeding our initial investment balance plus our cumulative equity in DIRECTV earnings.

As we are not committed, implicitly or explicitly, to provide financial or other support to DIRECTV, we will record future cash distributions received in excess of our share of DIRECTV’s earnings in “Equity in net income from affiliates” in the consolidated statements of income and as cash provided by operations in the consolidated statements of cash flows.

Beginning in third-quarter 2024, our investment in DIRECTV was reduced to zero on our consolidated balance sheet, resulting from aggregate cash receipts exceeding our initial investment balance plus our cumulative equity in DIRECTV earnings.

As we are not committed, implicitly or explicitly, to provide financial or other support to DIRECTV, we record cash distributions

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

received in excess of our share of DIRECTV’s earnings in “Equity in net income of affiliates” in the consolidated statements of income and as cash provided by operations in the consolidated statements of cash flows.

The following table sets forth our share of DIRECTV’s earnings included in “Equity in net income of affiliates” and cash distributions received from DIRECTV:

Three months ended Nine months ended

September 30, September 30,

2024 2023 2024 2023

DIRECTV’s earnings included in Equity in net income

of affiliates

$ 281 $ 423 $ 955 $ 1,334

Three months ended

DIRECTV’s earnings included in Equity in net income of affiliates $ 1,423 $ 324

Distributions classified as operating activities

1 unchanged sentence

Distributions classified as investing activities

342 473 928 1,447

Cash distributions received from DIRECTV

$ 1,423 $ 518

For the three and nine months ended September 30, 2024, we billed DIRECTV approximately $ 129 and $ 408 under commercial arrangements and transition service agreements, which were recorded as a reduction to the operations and support expenses incurred.

At September 30, 2024 , we had accounts receivable from DIRECTV of $ 268 and accounts payable to DIRECTV of $ 52 .

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended March 31, 2025 and 2024, we billed DIRECTV approximately $ 124 and $ 145 under commercial arrangements and transition service agreements, which were recorded as a reduction to the operations and support expenses incurred.

At March 31, 2025 , we had accounts receivable from DIRECTV of $ 226 and accounts payable to DIRECTV of $ 50 .

SUPPLIER AND VENDOR FINANCING PROGRAMS

3 unchanged sentences

At the supplier’s election, they can receive payment of AT&T obligations prior to the scheduled due dates, at a discounted price from the third-party financial institution.

The discounted price paid by participating suppliers is based on a variable rate that is indexed to the overnight borrowing rate.

The discounted price paid to participating suppliers is based on a variable rate that is indexed to the overnight borrowing rate.

We agree to pay the financial institution the stated amount generally within 90 days of receipt of the invoice.

We do not have pledged assets or other guarantees under our supplier financing program.

Suppliers had elected to sell to the third-party financial institutions $ 3,229 and $ 2,844 of our outstanding payment obligations as of September 30, 2024 and December 31, 2023, respectively.

Suppliers had elected to sell to the third-party financial institutions $ 3,384 and $ 2,498 of our outstanding payment obligations as of March 31, 2025 and December 31, 2024, respectively.

These amounts are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

Our supplier financing programs are reported as operating or investing (when capitalizable) activities in our statements of cash flows when paid.

Our supplier financing programs are reported as operating or investing (when capitalizable) activities in our consolidated statements of cash flows when paid.

Direct Supplier Financing

We also have arrangements with suppliers of handset inventory that allow us to extend the stated payment terms by up to 90 days at an additional cost to us (variable rate extension fee).

We had $ 1,942 of direct supplier financing outstanding at September 30, 2024 and $ 5,442 as of December 31, 2023, which are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

We had $ 4,293 of direct supplier financing outstanding as of March 31, 2025 and $ 6,272 as of December 31, 2024, which are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

Our direct supplier financing is reported as operating activities in our statements of cash flows when paid.

Vendor Financing

In connection with capital improvements and the acquisition of other productive assets, we negotiate favorable payment terms of 120 days or more (referred to as vendor financing), which are reported as financing activities in our statements of cash flows when paid.

For the nine months ended September 30, 2024 and 2023, we recorded vendor financing commitments related to capital investments of $ 581 and $ 2,128 , respectively.

We had $ 1,660 of vendor financing payables at September 30, 2024, with $ 843 included in “Accounts payable and accrued liabilities” and $ 2,833 of vendor financing payables at December 31, 2023, with $ 1,975 included in “Accounts payable and accrued liabilities.”

We enter into multi-year software licensing arrangements, which, consistent with industry standards, are paid over the license terms of two to five years.

Additionally, in connection with capital improvements and the acquisition of other productive assets, we negotiate favorable payment terms of 120 days or more.

We refer to these arrangements as vendor financing, with the balances and activity for the periods presented primarily relating to software arrangements.

Vendor financing payments are reported as financing activities in our statements of cash flows when paid.

For the three months ended March 31, 2025 and 2024, we recorded vendor financing commitments of $ 378 and $ 99 , respectively.

We had $ 1,694 of vendor financing payables at March 31, 2025, with $ 1,078 included in “Accounts payable and accrued liabilities” and $ 1,448 of vendor financing payables at December 31, 2024, with $ 749 included in “Accounts payable and accrued liabilities.”

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

ADDITIONAL FINANCIAL INFORMATION

2 unchanged sentences

The following table summarizes cash and cash equivalents and restricted cash balances contained on our consolidated balance sheets:

September 30, December 31,

March 31, December 31,

2025 2024 2024 2023

4 unchanged sentences

Cash and Cash Equivalents and Restricted Cash $ 6,944 $ 3,604 $ 3,406 $ 6,833

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table summarizes cash paid during the periods for interest and income taxes:

Nine months ended

September 30,

Three months ended

Cash paid (received) during the period for:

2 unchanged sentences

The following table summarizes capital expenditures:

Nine months ended

September 30,

Three months ended

Purchase of property and equipment $ 4,240 $ 3,721

2 unchanged sentences

The following table summarizes acquisitions, net of cash acquired:

Nine months ended

September 30,

Three months ended

Business acquisitions $ — $ —

2 unchanged sentences

Total Acquisitions $ 20 $ 211

1 Total capitalized interest was $ 288 and $ 750 for the nine months ended September 30, 2024 and 2023, respectively.

Preferred Interests Issued by Subsidiaries

Tower Holdings Preferred Interests

In 2019, we issued $ 6,000 nonconvertible cumulative preferred interest in a wireless subsidiary (Tower Holdings) that holds interests in various tower assets and has the right to receive approximately $ 6,000 if the purchase options from the tower companies are exercised.

The membership interests in Tower Holdings consist of (1) common interests, which are held by a consolidated subsidiary of AT&T, and (2) two series of preferred interests (collectively the “2019 Tower preferred interests”).

The September series (Tower Class A-1) of the preferred interests totals $ 1,500 and pays an initial preferred distribution of 5.0 %, and the December series (Tower Class A-2) totals $ 4,500 and pays an initial preferred distribution of 4.75 %.

Distributions are paid quarterly, subject to declaration and reset every five years .

In August 2024, we amended the 2019 Tower preferred interests, effective November 2024, to reset the rate and restructure the membership interests whereby all of the 2019 Tower preferred interests shall be designated Fixed Rate Class A Limited Membership Interests (Tower Fixed Rate Interests).

A portion of the Tower Fixed Rate Interests will move to Floating Rate Class A Limited Membership Interests (Tower Floating Rate Interests) each year over a five-year period.

The Tower Fixed Rate Interests pay a preferred distribution of 5.90 %, and the Tower Floating Rate Interests pay a preferred distribution equal to the Secured Overnight Financing Rate (SOFR) plus 250 basis points, as defined in the agreement.

Any failure to declare or pay distributions on the Tower Fixed Rate Interests or Tower Floating Rate Interests (collectively, the “Tower preferred interests”) would not impose any limitation on cash movement between affiliates, or our ability to declare a dividend on or repurchase AT&T shares.

We can call the Tower Fixed Rate Interests at the issue price beginning in November 2029, and we can call the Tower Floating Rate Interests at any time.

The Tower preferred interests are included in “Noncontrolling interest” on the consolidated balance sheets.

SEPTEMBER 30, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The holders of the Tower preferred interests have the option to require redemption upon the occurrence of certain contingent events, such as the failure of AT&T to pay the preferred distribution for two or more periods or to meet certain other requirements, including a minimum credit rating.

If notice is given upon such an event, all other holders of equal or more subordinate classes of membership interests in Tower Holdings are entitled to receive the same form of consideration payable to the holders of the Tower preferred interests, resulting in a deemed liquidation for accounting purposes.

Telco LLC Preferred Interests

At September 30, 2024, and as of the date of this report, we had $ 7,250 outstanding cumulative preferred interests in a limited liability company (Telco LLC) that was formed to hold telecommunication-related assets.

The cumulative preferred interests in Telco LLC are comprised of Telco Class A-1, A-2 and A-3 interests (collectively the “Telco preferred interests”) and are included in “Noncontrolling interest” on the consolidated balance sheets (see Note 16 to AT&T’s 2023 Annual Report on Form 10-K).

The Telco preferred interests can be called at issue price beginning September 29, 2027.

The holders of the Telco preferred interests have the option to require redemption upon the occurrence of certain contingent events, such as the failure of Telco LLC to pay the preferred distribution for two or more periods or to meet certain other requirements, including a minimum credit rating.

If notice is given, all other holders of equal or more subordinate classes of members’ equity are entitled to receive the same form of consideration payable to the holders of the Telco preferred interests, resulting in a deemed liquidation for accounting purposes.

In October 2024, we entered into an agreement to issue in the first quarter of 2025, an additional $ 2,250 of nonconvertible cumulative preferred interests in Telco LLC (Telco Class A-4).

The Telco Class A-4 interests will pay an initial preferred distribution of 5.94 % annually, subject to declaration, and subject to reset on November 1, 2028, and every four years thereafter.

1 Total capitalized interest was $ 56 and $ 103 for the three months ended March 31, 2025 and 2024, respectively.

Preferred Equity Transactions

On March 3, 2025, we issued $ 2,250 of nonconvertible cumulative preferred interests in Telco LLC (Telco Class A-4).

The Telco Class A-4 interests pay an initial preferred distribution of 5.94 % annually, subject to declaration, and subject to reset on November 1, 2028, and every four years thereafter.

The Telco Class A-4 interests can be called at issue price beginning November 1, 2028, and are subject to the same redemption and liquidation rights as the Telco Class A-1, A-2 and A-3 interests.

Upon the expected issuance in the first quarter of 2025, we intend to use the Telco Class A-4 proceeds to fund the redemption of preferred equity securities.

SEPTEMBER 30, 2024

On March 3, 2025, we also redeemed all outstanding Series B cumulative perpetual preferred shares.

The shares had a total liquidation preference of € 2.0 billion and were redeemed for $ 2,075 .

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations

9 unchanged sentences

Percentage increases and decreases that are not considered meaningful are denoted with a dash.

Third Quarter Nine-Month Period

Percent Percent

2024 2023 Change 2024 2023 Change

First Quarter

2025 2024 Change

Operating Revenues

Communications $ 29,560 $ 28,857 2.4 %

Latin America - Mexico 1,022 992 3.0 3,188 2,842 12.2

Latin America

971 1,063 (8.7)

Corporate 95 108 (12.0)

AT&T Operating Revenues $ 30,626 $ 30,028 2.0 %

Operating Income

Operating Income (Loss)

Communications $ 6,991 $ 6,745 3.6 %

Latin America - Mexico 10 (29) — 19 (98) —

Latin America

Segment Operating Income 7,034 6,748 4.2

7 unchanged sentences

• Mobility provides nationwide wireless service and equipment.

In the first quarter of 2024, we began offering our fixed wireless access product that provides internet services delivered over our 5G wireless network where available.

• Consumer Wireline provides broadband services, including fiber connections that provide multi-gig services, and AT&T Internet Air (AIA) services, to residential customers in select locations.

Consumer Wireline also provides legacy telephony voice communication services.

The Latin America segment provides wireless services and equipment in Mexico.

SEPTEMBER 30, 2024

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

3 unchanged sentences

Additional analysis is discussed in our “Segment Results” section.

Third Quarter Nine-Month Period

Percent Percent

2024 2023 Change 2024 2023 Change

First Quarter

2025 2024 Change

Operating Revenues

10 unchanged sentences

Other income (expense) — net

717 440 63.0 1,850 2,362 (21.7)

Income Before Income Taxes 5,991 4,869 23.0

Net Income 4,692 3,751 25.1

Net Income (Loss) Attributable

(174) 3,495 — 6,868 12,212 (43.8)

Net Income (Loss) Attributable to

$ (226) $ 3,444 — % $ 6,715 $ 12,057 (44.3) %

Operating revenues decreased in the third quarter and for the first nine months of 2024, reflecting declines in Business Wireline service and Mobility equipment revenues, partially offset by Mobility service, Consumer Wireline and Mexico revenues .

Operations and support expenses increased in the third quarter and for the first nine months of 2024, primarily due to a $4,422 noncash goodwill impairment.

We performed an interim goodwill impairment test of the Business Wireline reporting unit and concluded that the calculated fair value was lower than the book value, which was driven by a faster-than-previously anticipated industry-wide secular decline of legacy services (see Note 1).

The increases were partially offset by lower Mobility equipment costs resulting from lower wireless sales volumes and expense declines from our continued transformation efforts.

Depreciation and amortization expense increased in the third quarter and for the first nine months of 2024, primarily due to the shortening of estimated economic lives of wireless network equipment that will be replaced earlier than originally anticipated with our Open RAN network modernization efforts.

Also contributing to higher depreciation expense was the impact of ongoing capital spending for strategic initiatives such as fiber and network upgrades.

Operating income decreased in the third quarter and for the first nine months of 2024.

Our operating income margin in the third quarter decreased from 19.1% in 2023 to 7.0% in 2024 and for the first nine months decreased from 20.1% in 2023 to 15.2% in 2024.

Interest expense increased in the third quarter and for the first nine months of 2024, primarily due to lower capitalized interest associated with spectrum acquisitions, mostly offset by lower debt balances.

Interest expense for the first nine months of 2023 also included distributions on Mobility preferred interests, which were repurchased on April 5, 2023.

SEPTEMBER 30, 2024

Net Income Attributable to AT&T 4,351 3,445 26.3

Net Income Attributable to Common Stock $ 4,395 $ 3,395 29.5 %

Operating revenues increased in the first quarter of 2025, reflecting higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline and Mexico, which included unfavorable foreign exchange impacts .

Operations and support expenses increased in the first quarter of 2025, primarily due to higher Mobility equipment costs resulting from increased wireless equipment sales volumes and higher restructuring charges.

These increases were partially offset by expense declines from our continued transformation efforts and lower network-related costs, which included lower negotiated rates and higher vendor settlements in 2025, and the absence of expenses from our cybersecurity business that was contributed to a new cybersecurity joint venture, LevelBlue, in the second quarter of 2024.

Depreciation and amortization expense increased in the first quarter of 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades, partially offset by lower depreciation impacts from our Open RAN network modernization efforts.

Operating income decreased in the first quarter of 2025.

Our operating income margin in the first quarter decreased from 19.5% in 2024 to 18.8% in 2025.

Interest expense decreased in the first quarter of 2025, primarily due to lower debt balances, partially offset by lower capitalized interest associated with spectrum acquisitions.

Equity in net income of affiliates increased in the first quarter of 2025.

The increase reflects cash distributions received by AT&T in excess of the carrying amount of our investment in DIRECTV (see Note 9).

Other income (expense) – net increased in the first quarter of 2025.

The increase was primarily due to first-quarter 2024 noncash impairment charges for a held-for-sale business and our SKY Mexico equity investment.

Partially offsetting the increase were lower pension and postretirement benefit credits and lower returns on other benefit-related investments.

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Equity in net income of affiliates decreased in the third quarter and for the first nine months of 2024, primarily due to the performance of our investment in DIRECTV, which included our share of a gain on a sale-leaseback transaction by DIRECTV of approximately $100 in the first quarter of 2023 (see Note 9).

Other income (expense) – net increased in the third quarter and decreased for the first nine months of 2024.

The increase in the third quarter was primarily the result of a prior-year write-down of our SKY Mexico equity investment and higher returns on other benefit-related investments.

These increases were partially offset by lower pension and postretirement benefit credits and an actuarial gain on our pension plan in 2023 with no corresponding remeasurement in 2024.

The decrease for the first nine months was primarily driven by lower pension and postretirement benefit credits in 2024 and net actuarial and settlement gains in 2023 with no corresponding remeasurement in 2024 (see Note 6) and an impairment recognized on a held-for-sale business, partially offset by the prior-year write-down of our SKY Mexico equity investment and higher returns on other benefit-related investments.

Income tax expense increased in the third quarter and decreased for the first nine months of 2024.

The increase in the third quarter was primarily due to a higher effective tax rate driven by a goodwill impairment (see Note 1), which is not deductible for tax purposes.

The decrease for the first nine months was primarily due to lower income before income tax.

Our effective tax rate was 89.9% in the third quarter of 2024 and 31.1% for the first nine months of 2024, versus 23.2% and 22.9% in the comparable periods in the prior year.

The increase in our effective tax rates were primarily due to the goodwill impairment, which is not deductible for tax purposes.

COMMUNICATIONS SEGMENT Third Quarter Nine-Month Period

Percent Percent

2024 2023 Change 2024 2023 Change

Income tax expense increased in the first quarter of 2025.

The increase was primarily due to higher income before income

Our effective tax rate was 21.7% in the first quarter of 2025, versus 23.0% in the comparable period in the prior year, r eflecting larger discrete state tax benefits in 2025.

Segment Results Our segments are comprised of strategic business units or other operations that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly.

We evaluate segment performance based on operating income as well as EBITDA and/or EBITDA margin.

See “Discussion and Reconciliation of Non-GAAP Measures” for a reconciliation of EBITDA and EBITDA margin to the most comparable financial measures calculated and presented in accordance with U.S.

generally accepted accounting principles.

COMMUNICATIONS SEGMENT First Quarter

2025 2024 Change

Segment Operating Revenues

8 unchanged sentences

Total Segment Operating Income $ 6,991 $ 6,745 3.6 %

Selected Subscribers and Connections

September 30,

Mobility Subscribers 1

116,066 112,857

Total domestic broadband connections 2

15,344 15,296

Network access lines in service 3,486 4,421

VoIP connections

1 Effective with our first-quarter 2024 reporting, we have removed connected devices from our total Mobility subscribers, consistent with industry standards and our key performance metrics.

Connected devices include data-centric devices such as session-based tablets, monitoring devices and primarily wholesale automobile systems.

2 Excludes AT&T Internet Air for Business.

SEPTEMBER 30, 2024

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Operating revenues decreased in the third quarter and for the first nine months of 2024, primarily driven by declines in our Business Wireline business unit, which reflects lower demand for legacy services and product simplification, as well as the absence of revenues from our cybersecurity business that was contributed to a new cybersecurity joint venture, LevelBlue, in the second quarter of 2024.

Revenue declines were also driven by lower Mobility equipment revenue.

These decreases were partially offset by increases in our Mobility and Consumer Wireline business units, driven by gains in wireless and broadband services.

Operating income decreased in the third quarter and for the first nine months of 2024.

Our Communications segment operating income margin in the third quarter decreased from 24.9% in 2023 to 24.6% in 2024 and for the first nine months decreased from 24.3% in 2023 to 24.2% in 2024.

Operating revenues increased in the first quarter of 2025, primarily driven by increases in our Mobility and Consumer Wireline business units, partially offset by declines in our Business Wireline business unit, which reflects lower demand for legacy services and product simplification, as well as the absence of revenues from our cybersecurity business that was contributed to a new cybersecurity joint venture, LevelBlue, in the second quarter of 2024.

Operating income increased in the first quarter of 2025.

Our Communications segment operating income margin in the first quarter increased from 23.4% in 2024 to 23.7% in 2025.

Our Communications EBITDA margin in the first quarter increased from 39.8% in 2024 to 40.5% in 2025.

Communications Business Unit Discussion

Mobility Results

Third Quarter Nine-Month Period

Percent Percent

2024 2023 Change 2024 2023 Change

First Quarter

2025 2024 Change

Operating revenues

7 unchanged sentences

Operating Income $ 6,740 $ 6,468 4.2 %

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

The following tables highlight other key measures of performance for Mobility:

September 30, Percent

March 31, Percent

(in 000s) 2025 2024 Change

5 unchanged sentences

117,960 114,513 3.0 %

1 Effective with our first-quarter 2024 reporting, we have removed connected devices from our total Mobility subscribers, consistent with industry standards and our key performance metrics.

Connected devices include data-centric devices such as session-based tablets, monitoring devices and primarily wholesale automobile systems.

SEPTEMBER 30, 2024

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Mobility Net Additions

Third Quarter Nine-Month Period

Percent Percent

(in 000s) 2024 2023 Change 2024 2023 Change

First Quarter

(in 000s) 2025 2024 Change

Postpaid Phone Net Additions 324 349 (7.2) %

6 unchanged sentences

Postpaid Churn 3

0.93 % 0.95 % (2) BP 0.89 % 0.97 % (8) BP

0.99 % 0.89 % 10 BP

Postpaid Phone-Only Churn 3

0.78 % 0.79 % (1) BP 0.73 % 0.80 % (7) BP

0.83 % 0.72 % 11 BP

1 Excludes migrations between wireless subscriber categories, including connected devices, and acquisition-related activity during the period.

2 In addition to postpaid phones, includes tablets and wearables and other.

Tablet net adds (losses) were (21) and (36) for the quarters ended September 30, 2024 and 2023 and 31 and (85) for the first nine months ended September 30, 2024 and 2023.

Wearables and other net adds were 47 and 118 for the quarters ended September 30, 2024 and 2023 and 209 and 423 for the first nine months ended September 30, 2024 and 2023.

Tablet net adds (losses) were (4) and (12) for the quarters ended March 31, 2025 and 2024.

Wearables and other net adds (losses) were (30) and 52 for the quarters ended March 31, 2025 and 2024.

3 Calculated by dividing the aggregate number of wireless subscribers who canceled service during a month by the total number of wireless subscribers at the beginning of that month.

The churn rate for the period is equal to the average of the churn rate for each month of that period.

Service revenue increased in the third quarter and for the first nine months of 2024.

The increases are largely due to growth from subscriber gains and postpaid phone average revenue per subscriber (ARPU) growth.

As part of our transformation activities and our focus on simplification, we aligned the timing of certain administrative fees and recorded approximately $90 of one-time revenues in the third quarter of 2024.

ARPU increased in the third quarter and for the first nine months of 2024, reflecting pricing actions.

Service revenue increased in the first quarter of 2025.

The increase is largely due to growth from postpaid phone average revenue per subscriber (ARPU) growth and subscriber gains.

ARPU increased in the first quarter of 2025, reflecting pricing actions and customers migrating to higher priced plans.

The effective management of subscriber churn is critical to our ability to maximize revenue growth and to maintain and improve margins.

Postpaid churn and postpaid phone-only churn were lower in the third quarter and for the first nine months of 2024.

Equipment revenue decreased in the third quarter and for the first nine months of 2024, primarily driven by lower wireless device sales volumes.

Operations and support expenses decreased in the third quarter and for the first nine months of 2024, primarily due to lower equipment costs driven by lower wireless sales volumes.

Depreciation expense increased in the third quarter and for the first nine months of 2024, primarily due to shortening of estimated economic lives of wireless equipment that will be replaced earlier than originally anticipated with our Open RAN deployment and network transformation, and ongoing capital spending for network upgrades and expansion, which we expect to continue through the remainder of 2024.

Operating income increased in the third quarter and for the first nine months of 2024.

Our Mobility operating income margin in the third quarter increased from 32.7% in 2023 to 33.3% in 2024 and for the first nine months increased from 31.9% in 2023 to 32.5% in 2024.

Our Mobility EBITDA margin in the third quarter increased from 43.0% in 2023 to 45.1% in 2024 and for the first nine months increased from 42.2% in 2023 to 44.5% in 2024.

EBITDA is defined as operating income excluding depreciation and amortization.

SEPTEMBER 30, 2024

Postpaid churn and postpaid phone-only churn were higher in the first quarter of 2025, driven by a normalization of customers reaching the end of their equipment promotional plans and a shift in competitive offers.

Equipment revenue increased in the first quarter of 2025, primarily driven by higher wireless device sales volumes.

Operations and support expenses increased in the first quarter of 2025, primarily due to higher equipment costs driven by higher wireless sales volumes.

The increase also reflected higher advertising due to launch of new campaign, promotion costs and network costs.

Depreciation expense increased in the first quarter of 2025, primarily due to ongoing capital spending for network upgrades and expansion, partially offset by lower depreciation impacts from our network modernization efforts.

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Operating income increased in the first quarter of 2025.

Our Mobility operating income margin in the first quarter decreased from 31.4% in 2024 to 31.2% in 2025.

Our Mobility EBITDA margin in the first quarter decreased from 43.5% in 2024 to 43.0% in 2025.

Business Wireline Results

Third Quarter Nine-Month Period

Percent Percent

2024 2023 Change 2024 2023 Change

First Quarter

2025 2024 Change

Operating revenues

Service $ 4,417 $ 5,087 (13.2) % $ 13,688 $ 15,401 (11.1) %

Legacy and other transitional services $ 2,475 $ 2,997 (17.4) %

Fiber and advanced connectivity services 1,780 1,703 4.5

Equipment 213 213 —

6 unchanged sentences

$ (98) $ 64 — %

Service revenues decreased in the third quarter and for the first nine months of 2024, driven by lower demand for legacy voice, data and network services along with product simplification, partially offset by growth in connectivity services.

We expect these trends to continue.

Revenue declines also were impacted by prior-year intellectual property sales of approximately $100 and the absence of revenues from our cybersecurity business that was contributed to LevelBlue.

Equipment revenues increased in the third quarter and for the first nine months of 2024, driven by higher customer premises equipment sales, which are nonrecurring in nature.

Operations and support expenses decreased in the third quarter and for the first nine months of 2024, primarily driven by lower personnel costs associated with ongoing transformation initiatives, lower network access and customer support expenses and the contribution of our cybersecurity business.

Partially offsetting the decreases for the first nine months were higher vendor credits in 2023 and higher equipment costs in 2024.

Legacy and other transitional services revenues decreased in the first quarter of 2025, driven by lower demand for legacy and VPN services, which we expect to continue.

Revenue declines also reflect the absence of revenues from our cybersecurity business that was contributed to LevelBlue in the second quarter of 2024.

These revenue declines were partially offset by targeted pricing actions.

Fiber and advanced connectivity services revenues increased in the first quarter of 2025, driven by higher fiber and fixed wireless revenues.

Equipment revenues remained constant in the first quarter of 2025.

Operations and support expenses decreased in the first quarter of 2025, primarily driven by lower personnel costs associated with ongoing transformation initiatives, lower network-related costs that included higher vendor settlements in 2025 and the contribution of our cybersecurity business.

As part of our transformation activities, we expect operations and support expense improvements through the remainder of 2025 as we further right size our operations in alignment with the strategic direction of the business.

Depreciation expense increased in the third quarter and for the first nine months of 2024, primarily due to ongoing capital investment for strategic initiatives such as fiber, which we expect to continue through the remainder of 2024.

Operating income decreased in the third quarter and for the first nine months of 2024.

Our Business Wireline operating income margin in the third quarter decreased from 6.7% in 2023 to (0.9)% in 2024 and for the first nine months decreased from 7.1% in 2023 to 0.9% in 2024.

Our Business Wireline EBITDA margin in the third quarter decreased from 32.5% in 2023 to 29.4% in 2024 and for the first nine months decreased from 32.4% in 2023 to 29.9% in 2024.

SEPTEMBER 30, 2024

Depreciation expense increased in the first quarter of 2025, primarily due to ongoing capital investment for strategic initiatives such as fiber, which we expect to continue through the remainder of 2025.

Operating income decreased in the first quarter of 2025.

Our Business Wireline operating income margin in the first quarter decreased from 1.3% in 2024 to (2.2)% in 2025.

Our Business Wireline EBITDA margin in the first quarter increased from 29.0% in 2024 to 31.3% in 2025.

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

1 unchanged sentence

Consumer Wireline Results

Third Quarter Nine-Month Period

Percent Percent

2024 2023 Change 2024 2023 Change

First Quarter

2025 2024 Change

Operating revenues

9 unchanged sentences

The following tables highlight other key measures of performance for Consumer Wireline:

September 30, Percent

(in 000s) 2024 2023 Change

Broadband Connections

Total Broadband and DSL Connections 13,972 13,887 0.6 %

March 31, Percent

(in 000s) 2025 2024 Change

14,112 13,784 2.4 %

Fiber Broadband Connections 9,592 8,559 12.1 %

Voice Connections

Retail Consumer Switched Access Lines 1,386 1,737 (20.2)

Consumer VoIP Connections

1,716 2,035 (15.7)

Total Retail Consumer Voice Connections 3,102 3,772 (17.8) %

1 Includes AT&T Internet Air.

1 Includes AIA.

Broadband Net Additions

Third Quarter Nine-Month Period

Percent Percent

(in 000s) 2024 2023 Change 2024 2023 Change

Total Broadband and DSL Net Additions 10 (8) — % 82 (104) — %

First Quarter

(in 000s) 2025 2024 Change

Broadband Net Additions 1,2

28 15 86.7 135 (43) —

Fiber Broadband Net Additions 261 252 3.6 %

1 Includes AT&T Internet Air.

Broadband revenues increased in the third quarter and for the first nine months of 2024, driven by an increase in fiber customers, which we expect to continue as we invest further in building our fiber footprint and higher ARPU, partially offset by declines in copper-based broadband services.

Legacy voice and data service revenues decreased in the third quarter and for the first nine months of 2024, reflecting the continued decline in demand for these services in favor of other technologies, such as wireless and fiber services.

SEPTEMBER 30, 2024

1 Includes AIA.

2 First-quarter 2025 excludes the impact of subscriber disconnections resulting from the termination of AIA services in areas with unfavorable regulatory requirements.

Broadband revenues increased in the first quarter of 2025, driven by a 19.0% increase in fiber revenues.

Higher fiber revenues reflect an increase in fiber customers, which we expect to continue as we invest further in building our fiber footprint, and higher ARPU.

This increase was partially offset by declines in copper-based broadband services.

Legacy voice and data services revenues decreased in the first quarter of 2025, reflecting the continued decline in demand for these services in favor of other technologies, such as wireless and fiber services.

Other service and equipment revenues decreased in the first quarter of 2025, reflecting the continued decline in the number of VoIP customers.

Operations and support expenses decreased in the first quarter of 2025.

The expense decrease in the first quarter was primarily driven by lower customer support costs and network-related costs that included higher vendor settlements in 2025.

Depreciation expense increased in the first quarter of 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades and expansion, which we expect to continue through the remainder of 2025.

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Other service and equipment revenues decreased in the third quarter and for the first nine months of 2024, reflecting the continued decline in the number of VoIP customers.

Operations and support expenses decreased in the third quarter and for the first nine months of 2024.

The expense decrease in the third quarter was primarily driven by lower customer support costs and network-related costs, partially offset by higher marketing expense.

The expense decrease for the first nine months was driven by lower customer support costs and operating taxes that were offset by higher network-related costs as our fiber build scales.

Depreciation expense increased in the third quarter and for the first nine months of 2024, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades and expansion, which we expect to continue through the remainder of 2024.

Operating income increased in the third quarter and for the first nine months of 2024.

Our Consumer Wireline operating income margin in the third quarter increased from 4.8% in 2023 to 5.7% in 2024 and for the first nine months increased from 4.3% in 2023 to 5.9% in 2024.

Our Consumer Wireline EBITDA margin in the third quarter increased from 31.0% in 2023 to 32.8% in 2024 and for the first nine months increased from 30.7% in 2023 to 32.7% in 2024.

LATIN AMERICA SEGMENT Third Quarter

Nine-Month Period

2024 2023 Percent Change 2024 2023 Percent Change

Operating income increased in the first quarter of 2025.

Our Consumer Wireline operating income margin in the first quarter increased from 6.4% in 2024 to 9.9% in 2025.

Our Consumer Wireline EBITDA margin in the first quarter increased from 32.7% in 2024 to 36.9% in 2025.

LATIN AMERICA SEGMENT First Quarter

2025 2024 Percent Change

Segment Operating Revenues

6 unchanged sentences

Total Segment Operating Expenses 928 1,060 (12.5)

Operating Income (Loss) $ 10 $ (29) — % $ 19 $ (98) — %

Operating Income

The following tables highlight other key measures of performance for Mexico:

September 30, Percent

March 31, Percent

(in 000s) 2025 2024 Change

Mexico Wireless Subscribers

Postpaid 5,997 5,352 12.1 %

2 unchanged sentences

Total Mexico Wireless Subscribers 23,608 22,459 5.1 %

SEPTEMBER 30, 2024

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Mexico Wireless Net Additions

Third Quarter

Nine-Month Period

Percent Percent

(in 000s) 2024 2023 Change 2024 2023 Change

Mexico Wireless Net Additions

First Quarter

(in 000s) 2025 2024 Change

Postpaid 160 116 37.9 %

2 unchanged sentences

Total Mexico Wireless Net Additions 32 143 (77.6) %

Service revenues decreased in the third quarter and increased for the first nine months of 2024.

The decrease in the third quarter was primarily due to unfavorable foreign exchange impacts, partially offset by growth in subscribers and ARPU.

The increase for the first nine months reflects growth in subscribers and favorable exchange rates primarily from the first quarter of 2024.

Equipment revenues increased in the third quarter and for the first nine months of 2024.

The increase in the third quarter was primarily driven by higher equipment sales, partially offset by unfavorable foreign exchange impacts.

The increase for the first nine months was primarily driven by higher equipment sales and favorable exchange rates primarily from the first quarter of 2024.

Operations and support expenses increased in the third quarter and for the first nine months of 2024, primarily due to increased equipment and selling costs resulting from higher sales.

Foreign exchange impacts were favorable in the third quarter and unfavorable for the first nine months.

Approximately 4% of Mexico expenses are U.S.

dollar based, with the remainder in the local currency.

Depreciation and amortization expense decreased in the third quarter and for the first nine months of 2024, primarily driven by lower in-service assets.

Foreign exchange impacts were favorable in the third quarter and unfavorable for the first nine months.

Operating income improved in the third quarter and for the first nine months of 2024.

Our Mexico operating income margin in the third quarter increased from (2.9)% in 2023 to 1.0% in 2024 and for the first nine months increased from (3.4)% in 2023 to 0.6% in 2024.

Our Mexico EBITDA margin in the third quarter increased from 15.6% in 2023 to 16.4% in 2024 and for the first nine months increased from 15.7% in 2023 to 16.5% in 2024.

Service revenues decreased in the first quarter of 2025, reflecting unfavorable foreign exchange impacts, partially offset by growth in subscribers and ARPU.

Equipment revenues decreased in the first quarter of 2025, reflecting unfavorable foreign exchange impacts, partially offset by higher equipment sales.

Operations and support expenses decreased in the first quarter of 2025, primarily due to favorable foreign exchange impacts, partially offset by increased equipment and selling costs resulting from higher sales.

Depreciation and amortization expense decreased in the first quarter of 2025, primarily due to favorable foreign exchange impacts.

MARCH 31, 2025

Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued

Dollars in millions except per share amounts

Operating income improved in the first quarter of 2025.

Our Mexico operating income margin in the first quarter increased from 0.3% in 2024 to 4.4% in 2025.

Our Mexico EBITDA margin in the first quarter increased from 16.9% in 2024 to 19.9% in 2025.

COMPETITIVE AND REGULATORY ENVIRONMENT

Overview AT&T subsidiaries operating within the United States are subject to federal and state regulatory authorities.

AT&T subsidiaries operating outside the United States are subject to the jurisdiction of national and supranational regulatory authorities in the markets where service is provided.

In the Telecommunications Act of 1996 (Telecom Act), Congress established a national policy framework intended to bring the benefits of competition and investment in advanced telecommunications facilities and services to all Americans by opening all telecommunications markets to competition and reducing or eliminating regulatory burdens that harm consumer welfare.

Nonetheless, since then, the FCC and some state regulatory commissions have maintained, re-imposed or expanded certain regulatory requirements that were imposed decades ago on our traditional wireline subsidiaries when they operated as legal monopolies.

Recently, the FCC’s regulatory approach has depended on control of the executive branch, eliminating a variety of antiquated and unnecessary regulations in a number of areas, while imposing or re-imposing regulations in other areas.

We continue to support regulatory and legislative measures and efforts, at both the state and federal levels, to reduce inappropriate regulatory burdens that inhibit our ability to compete effectively and offer needed services to our customers, including initiatives to transition services from traditional networks to all IP-based networks.

At the same time, we also seek to ensure that legacy regulations are not further extended to broadband or wireless services, which are subject to vigorous competition.

Until 2015, the FCC classified fixed and mobile consumer broadband internet access services as information services subject to minimal regulation.

In 2015, the FCC reclassified such services as telecommunications services subject to broader regulation by

SEPTEMBER 30, 2024

Overview AT&T subsidiaries operating within the United States are subject to federal and state regulations.

AT&T subsidiaries operating outside the United States are subject to the jurisdiction of national and supranational regulations in the markets where service is provided.

Complying with these regulations may affect our results of operations and cash flow, and compliance may be very costly.

For a discussion of these regulations, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Regulatory Landscape” in our Annual Report on Form 10-K for the year-ended December 31, 2024.

LIQUIDITY AND CAPITAL RESOURCES

For three months ended March 31,

Cash provided by operating activities

$ 9,049 $ 7,547

Cash used in investing activities

(4,958) (2,961)

Cash used in financing activities

(553) (7,815)

March 31, December 31,

Cash and cash equivalents

$ 6,885 $ 3,298

126,161 123,532

We had $6,885 in cash and cash equivalents available at March 31, 2025, increasing $3,587 since December 31, 2024.

Cash and cash equivalents included cash of $1,122 and money market funds and other cash equivalents of $5,763.

Approximately $1,159 of our cash and cash equivalents were held in accounts outside of the U.S.

and may be subject to restrictions on repatriation.

For the first three months of 2025, cash inflows were primarily provided by cash receipts from operations, including cash from our sale and transfer of our receivables to third parties, and distributions from DIRECTV.

These inflows exceeded cash used to meet the needs of the business, including, but not limited to, payment of operating expenses, including higher device payments from higher sales volumes.

The cash generated from operating activities was primarily used to repay long-term debt, make dividend payments to stockholders and to fund capital improvements.

We maintain availability under our credit facilities and our commercial paper program to meet our short-term liquidity requirements.

Cash Provided by Operating Activities

During the first three months of 2025, cash provided by operating activities was $9,049, compared to $7,547 for the first three months of 2024, with increases resulting from higher cash flows related to DIRECTV, including a first-quarter 2025 dividend of $1,138, and operational growth.

We actively manage the timing of our supplier payments for operating items to optimize the use of our cash.

Among other things, we seek to make payments on 90-day or greater terms, while providing the suppliers with access to bank facilities that permit earlier payments at their cost (referred to as supplier financing program).

In addition, for payments to suppliers of handset inventory, as part of our working capital initiatives, we have arrangements that allow us to extend the stated payment terms by up to 90 days at an additional cost to us (referred to as direct supplier financing).

The net impact of direct supplier financing, including principal and interest payments, was to decrease cash from operating activities approximately $2,042 and $1,584 for the three months ended March 31, 2025 and 2024, respectively.

All supplier financing payments are due within one year.

(See Note 10)

MARCH 31, 2025

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements