What changed in this filing

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Item 1. Financial Statements

2025-07-24 compared with 2025-04-29 · 419 added, 246 removed, 850 unchanged (44% of the section changed)

2 unchanged sentences

Dollars in millions except per share amounts

Three months ended

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Operating Revenues

7 unchanged sentences

amortization shown separately below)

6,412 6,627 12,751 13,438

Selling, general and administrative 6,945 7,043 14,090 14,064

Asset impairments and abandonments and restructuring

— 480 504 639

Depreciation and amortization 5,251 5,072 10,441 10,119

5 unchanged sentences

Other income (expense) — net

767 682 1,222 1,133

Total other income (expense) ( 403 ) ( 669 ) ( 166 ) ( 1,647 )

6 unchanged sentences

Preferred Stock Dividends and Redemption Gain

( 36 ) ( 51 ) 8 ( 101 )

Net Income Attributable to Common Stock $ 4,464 $ 3,546 $ 8,859 $ 6,941

3 unchanged sentences

Outstanding — Basic (in millions)

7,209 7,196 7,211 7,194

Weighted Average Number of Common Shares

Outstanding — with Dilution (in millions)

7,219 7,198 7,221 7,195

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Dollars in millions

Three months ended

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Net income $ 4,861 $ 3,949 $ 9,553 $ 7,700

2 unchanged sentences

Translation adjustment, net of taxes of $ 61 , $( 69 ), $ 71 and

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

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

188 ( 221 ) 209 ( 192 )

Reclassification adjustment included in net income, net of

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

Net unrealized gains (losses), net of taxes of $ 1 , $ 1 , $ 4

2 ( 7 ) 12 ( 17 )

Reclassification adjustment included in net income, net of

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

Derivative instruments:

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

Net unrealized gains (losses), net of taxes of $ 32 , $( 65 ),

$( 171 ) and $( 16 )

96 ( 260 ) ( 528 ) ( 49 )

Reclassification adjustment included in net income, net of

taxes of $ 3 , $ 4 , $ 7 and $ 7

Defined benefit postretirement plans:

Amortization of net prior service credit included in net

income, net of taxes of $( 114 ), $( 123 ), $( 229 ) and $( 246 )

( 358 ) ( 380 ) ( 714 ) ( 761 )

Other comprehensive income (loss) ( 58 ) ( 727 ) ( 995 ) ( 860 )

Total comprehensive income

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

4,803 3,222 8,558 6,840

Total comprehensive income attributable to

noncontrolling interest

( 361 ) ( 352 ) ( 702 ) ( 658 )

Total Comprehensive Income Attributable to AT&T

3 unchanged sentences

Dollars in millions except per share amounts

March 31, December 31,

June 30, December 31,

Assets (Unaudited)

31 unchanged sentences

Stockholders’ Equity

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

Preferred stock ($ 1 par value, 10,000,000 authorized at June 30, 2025 and December 31, 2024):

Series A ( 48,000 issued and outstanding at June 30, 2025 and December 31, 2024)

Series B ( 20,000 issued and 0 outstanding at June 30, 2025 and 20,000 issued and outstanding

December 31, 2024)

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

Series C ( 70,000 issued and outstanding at June 30, 2025 and December 31, 2024)

Common stock ($ 1 par value, 14,000,000,000 authorized at June 30, 2025 and

December 31, 2024:

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

issued 7,620,748,598 at June 30, 2025 and December 31, 2024)

Additional paid-in capital 106,381 109,108

Retained earnings 6,680 1,871

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

Treasury stock ( 459,382,925 at June 30, 2025 and 444,853,148 at December 31, 2024, at cost)

( 15,210 ) ( 15,023 )

6 unchanged sentences

Dollars in millions

Three months ended

Six months ended

Operating Activities

2 unchanged sentences

Depreciation and amortization

10,441 10,119

Provision for uncollectible accounts

1 unchanged sentence

Pension and postretirement benefit expense (credit)

( 794 ) ( 941 )

Net (gain) loss on investments

Changes in operating assets and liabilities:

Receivables 15 512

Equipment installment receivables and related sales

1,115 ( 320 )

Contract asset and cost deferral

Inventories, prepaid and other current assets

( 661 ) ( 24 )

Accounts payable and other accrued liabilities

( 4,440 ) ( 4,761 )

Changes in income taxes

31 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended

March 31, 2025 March 31, 2024

Shares Amount Shares Amount

Three months ended Six months ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Shares Amount Shares Amount Shares Amount Shares Amount

Preferred Stock - Series A

12 unchanged sentences

Redemption of preferred stock

— — ( 2,165 ) —

Preferred stock dividends — — — ( 98 )

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

Common stock dividends

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

— ( 12 ) — ( 2,015 )

Issuance of treasury stock ( 4 ) ( 3 ) ( 456 ) ( 416 )

Share-based payments 83 83 ( 106 ) ( 183 )

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

Redemption or reclassification of

interest held by noncontrolling owners

— ( 152 ) — ( 292 )

Balance at end of period $ 106,381 $ 111,515 $ 106,381 $ 111,515

2 unchanged sentences

Net income attributable to AT&T

4,500 3,597 8,851 7,042

Preferred stock redemption gain

Preferred stock dividends ( 35 ) ( 36 ) ( 121 ) ( 36 )

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

Common stock dividends

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

( 2,000 ) ( 1,989 ) ( 4,011 ) ( 1,989 )

Balance at end of period $ 6,680 $ 2 $ 6,680 $ 2

2 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended

March 31, 2025 March 31, 2024

Shares Amount Shares Amount

Three months ended Six months ended

June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024

Shares Amount Shares Amount Shares Amount Shares Amount

Treasury Stock

Balance at beginning of period ( 425 ) $ ( 14,252 ) ( 451 ) $ ( 15,277 ) ( 445 ) $ ( 15,023 ) ( 471 ) $ ( 16,128 )

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

Repurchase and acquisition of

( 34 ) ( 968 ) — ( 2 ) ( 43 ) ( 1,186 ) ( 9 ) ( 159 )

Reissuance of treasury stock — 10 — 11 29 999 29 1,019

2 unchanged sentences

Balance at beginning of period $ ( 142 ) $ 2,167 $ 795 $ 2,300

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

Other comprehensive income

(loss) attributable to AT&T

( 58 ) ( 727 ) ( 995 ) ( 860 )

Balance at end of period $ ( 200 ) $ 1,440 $ ( 200 ) $ 1,440

1 unchanged sentence

Balance at beginning of period $ 16,114 $ 14,080 $ 13,873 $ 14,145

Net income attributable to noncontrolling interest 305 270

Issuance and acquisition by noncontrolling owners 2,221 —

Redemption of noncontrolling interest — ( 17 )

Net income attributable to

noncontrolling interest

326 317 631 587

Issuance and acquisition by

noncontrolling owners

Redemption of noncontrolling

— ( 41 ) — ( 58 )

Distributions ( 318 ) ( 319 ) ( 603 ) ( 637 )

Balance at end of period $ 16,122 $ 14,037 $ 16,122 $ 14,037

Total Stockholders’ Equity at beginning of period

Total Stockholders’ Equity at

beginning of period

$ 119,858 $ 118,620 $ 118,245 $ 117,442

Total Stockholders’ Equity at end of period

Total Stockholders’ Equity at end

$ 121,394 $ 119,347 $ 121,394 $ 119,347

1 unchanged sentence

See Notes to Consolidated Financial Statements.

MARCH 31, 2025

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

14 unchanged sentences

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).

Stock Repurchase Program In December 2024, the Board of Directors authorized the repurchase of up to $ 10,000 of AT&T common stock.

We began buying back stock under this program in the second quarter of 2025.

For the six months ended June 30, 2025, we had repurchased approximately 34 million shares totaling $ 958 under this authorization, excluding brokerage fees and the one percent excise tax imposed by the Inflation Reduction Act of 2022.

To implement repurchase authorizations, we use open market repurchase programs, relying on Rule 10b5-1 of the Securities Exchange Act of 1934 where feasible.

Tax Legislation On July 4, 2025, the One Big Beautiful Bill Act was enacted, which restores or makes permanent certain expiring business tax provisions from the Tax Cuts and Jobs Act of 2017.

We do not anticipate the legislation to materially impact our income tax expense, but expect that it will have a material impact on cash taxes paid relative to our expectations.

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

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Numerator for basic earnings per share:

7 unchanged sentences

Denominator for diluted earnings per share 7,219 7,198 7,221 7,195

MARCH 31, 2025

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

14 unchanged sentences

209 16 ( 506 ) ( 714 ) ( 995 )

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

Balance as of June 30, 2025 $ ( 1,546 ) $ ( 30 ) $ ( 1,110 ) $ 2,486 $ ( 200 )

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

( 65 ) ( 7 ) ( 27 ) ( 761 ) ( 860 )

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

Balance as of June 30, 2024 $ ( 1,402 ) $ ( 64 ) $ ( 1,056 ) $ 3,962 $ 1,440

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

2 (Gains) losses are primarily included in “Interest expense” in the consolidated statements of income (see Note 7).

3 The amortization of prior service credits associated with postretirement benefits are included in “Other income (expense) - net” in the consolidated statements of income (see Note 6).

3 The amortization of prior service credit associated with postretirement benefits are included in “Other income (expense) - net” in the consolidated statements of income (see Note 6).

SEGMENT INFORMATION

2 unchanged sentences

Communications and Latin America.

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

Our chief operating decision maker (CODM) is our Chairman of the Board, Chief Executive Officer and President.

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

3 unchanged sentences

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

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

18 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.

MARCH 31, 2025

JUNE 30, 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 Depreciation

Amortization Operating

Income (Loss)

For the three months ended June 30, 2025

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

Communications

16 unchanged sentences

$ 30,847 $ 19,095 $ 5,251 $ 6,501

For the three months ended March 31, 2024

For the three months ended June 30, 2024

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

17 unchanged sentences

$ 29,797 $ 18,965 $ 5,072 $ 5,760

MARCH 31, 2025

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2025

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

Communications

Mobility $ 43,415 $ 24,662 $ 5,082 $ 13,671

Business Wireline 8,781 6,061 3,019 ( 299 )

Consumer Wireline 7,063 4,472 1,907 684

Total Communications 59,259 35,195 10,008 14,056

Latin America

2,025 1,631 305 89

Segment Total 61,284 36,826 10,313 14,145

Corporate and Other

DTV-related retained costs — 113 100 ( 213 )

Parent administration support ( 1 ) 861 10 ( 872 )

Securitization fees 58 388 — ( 330 )

Value portfolio 132 21 — 111

Total Corporate 189 1,383 110 ( 1,304 )

Certain significant items — 568 18 ( 586 )

Total Corporate and Other 189 1,951 128 ( 1,890 )

$ 61,473 $ 38,777 $ 10,441 $ 12,255

For the six months ended June 30, 2024

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

Communications

Mobility $ 41,074 $ 22,924 $ 4,963 $ 13,187

Business Wireline 9,668 6,754 2,748 166

Consumer Wireline 6,697 4,505 1,795 397

Total Communications 57,439 34,183 9,506 13,750

Latin America

2,166 1,808 349 9

Segment Total 59,605 35,991 9,855 13,759

Corporate and Other

DTV-related retained costs — 250 222 ( 472 )

Parent administration support — 835 3 ( 838 )

Securitization fees 55 315 — ( 260 )

Value portfolio 165 51 9 105

Total Corporate 220 1,451 234 ( 1,465 )

Certain significant items — 657 30 ( 687 )

Total Corporate and Other 220 2,108 264 ( 2,152 )

$ 59,825 $ 38,099 $ 10,119 $ 11,607

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

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

June 30, Six months ended

2025 2024 2025 2024

Communications $ 7,065 $ 7,005 $ 14,056 $ 13,750

12 unchanged sentences

Other income (expense) — net

767 682 1,222 1,133

Income Before Income Taxes $ 6,098 $ 5,091 $ 12,089 $ 9,960

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

June 30, December 31,

Assets Investments in Equity Method Investees Assets

Investments in Equity Method Investees

Communications

4 unchanged sentences

Total $ 405,491 $ 1,011 $ 394,795 $ 295

Three months ended

Six months ended

Capital Expenditures

3 unchanged sentences

Total $ 9,174 $ 8,118

MARCH 31, 2025

JUNE 30, 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 March 31, 2025

For the three months ended June 30, 2025

Communications

10 unchanged sentences

1 Advanced connectivity services reported in Business Wireline.

For the three months ended March 31, 2024

For the three months ended June 30, 2024

Communications

10 unchanged sentences

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

For the six months ended June 30, 2025

Communications

Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total

Wireless $ 33,504 $ — $ — $ 1,277 $ — $ 34,781

Fiber and advanced connectivity 1

— 3,573 4,202 — — 7,775

Non-fiber consumer broadband — — 1,810 — — 1,810

Legacy and other transitional — 4,824 551 — 91 5,466

Other — — 500 — 98 598

Total Service 33,504 8,397 7,063 1,277 189 50,430

Equipment 9,911 384 — 748 — 11,043

Total $ 43,415 $ 8,781 $ 7,063 $ 2,025 $ 189 $ 61,473

1 Advanced connectivity services reported in Business Wireline.

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2024

Communications

Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total

Wireless $ 32,271 $ — $ — $ 1,389 $ — $ 33,660

Fiber and advanced connectivity 1

— 3,435 3,532 — — 6,967

Non-fiber consumer broadband — — 1,931 — — 1,931

Legacy and other transitional — 5,836 665 — 124 6,625

Other — — 569 — 96 665

Total Service 32,271 9,271 6,697 1,389 220 49,848

Equipment 8,803 397 — 777 — 9,977

Total $ 41,074 $ 9,668 $ 6,697 $ 2,166 $ 220 $ 59,825

1 Advanced connectivity services reported in Business Wireline.

Deferred Customer Contract Acquisition and Fulfillment Costs

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

March 31, December 31,

June 30, December 31,

Consolidated Balance Sheets 2025 2024

7 unchanged sentences

Total deferred customer contract fulfillment costs $ 5,040 $ 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 three months ended:

March 31, March 31,

June 30, June 30,

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 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

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

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:

March 31, December 31,

June 30, December 31,

Consolidated Balance Sheets 2025 2024

4 unchanged sentences

Our beginning of period contract liability recorded as customer contract revenue during 2025 was $ 3,515 .

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 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.

As of June 30, 2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 42,008 , of which we expect to recognize approximately 74 % by the end of 2026, with the balance recognized thereafter.

PENSION AND POSTRETIREMENT BENEFITS

3 unchanged sentences

We do not have significant funding requirements in 2025.

We intend to voluntarily contribute approximately $ 1,500 to our pension plan by the end of 2026, with more than half of that in 2025.

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.

JUNE 30, 2025

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

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Pension cost:

6 unchanged sentences

Service cost – benefits earned during the period $ 5 $ 6 $ 9 $ 11

Interest cost on accumulated postretirement benefit obligation

Interest cost on accumulated postretirement benefit

79 78 159 155

Expected return on assets ( 8 ) ( 16 ) ( 18 ) ( 30 )

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 $ 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

Net supplemental pension benefits costs not included in the table above were $ 16 and $ 16 in the second quarter and $ 32 and $ 33 for the first six months of 2025 and 2024, respectively.

FAIR VALUE MEASUREMENTS AND DISCLOSURE

8 unchanged sentences

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

JUNE 30, 2025

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:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Carrying Fair Carrying Fair

2 unchanged sentences

$ 130,929 $ 124,807 $ 122,116 $ 114,167

Commercial paper — — — —

Investment securities 2

4 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 March 31, 2025 and December 31, 2024.

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of June 30, 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.

March 31, 2025

June 30, 2025

Level 1 Level 2 Level 3 Total

8 unchanged sentences

Cross-currency swaps — ( 2,093 ) — ( 2,093 )

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

December 31, 2024

13 unchanged sentences

Investments in equity securities not traded on a national securities exchange are valued at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities.

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Investments in debt securities not traded on a national securities exchange are valued using pricing models, quoted prices of securities with similar characteristics or discounted cash flows.

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Total gains (losses) recognized on equity securities $ 48 $ 29 $ 21 $ 126

1 unchanged sentence

Unrealized gains (losses) recognized on equity securities held at end of period $ 48 $ 34 $ 21 $ 134

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

At June 30, 2025, available-for-sale debt securities totaling $ 671 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

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

In the six months ended June 30, 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.

3 unchanged sentences

dollar denominated interest rate.

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Unrealized gains on derivatives designated as cash flow hedges are recorded at fair value as assets and unrealized losses are recorded at fair value as liabilities.

5 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 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 .

At June 30, 2025, we had posted collateral of $ 355 (a deposit asset) and held collateral of $ 404 (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 June, 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 $ 1,312 .

2 unchanged sentences

Following are the notional amounts of our outstanding derivative positions:

March 31, December 31,

June 30, December 31,

Cross-currency swaps $ 36,499 $ 34,884

Total $ 36,499 $ 34,884

MARCH 31, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Following are the related hedged items affecting our financial position and performance:

Effect of Derivatives on the Consolidated Statements of Income

Three months ended

Three months ended Six months ended

June 30, June 30,

Fair Value Hedging Relationships 2025 2024 2025 2024

7 unchanged sentences

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

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

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

Three months ended

Three months ended Six months ended

June 30, June 30,

Cash Flow Hedging Relationships 2025 2024 2025 2024

10 unchanged sentences

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

Three months ended

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

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Net cash received (paid) from equipment installment

receivables program 1

$ ( 135 ) $ ( 674 ) $ 724 $ ( 553 )

Net cash received (paid) from revolving receivables program

( 42 ) ( 29 ) 91 247

Total net cash impact to cash flows from operating activities 2

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

$ ( 177 ) $ ( 703 ) $ 815 $ ( 306 )

1 Cash from initial sales of $ 2,779 and $ 2,532 for the three months and $ 6,577 and $ 5,406 for the six months ended June 30, 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

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

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

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Equipment Equipment

5 unchanged sentences

Notes receivable

1,771 — 1,817 —

Trade receivables

299 234 237 553

Noncurrent notes and trade receivables

1,157 — 1,450 —

Outstanding portfolio of receivables derecognized from

10 unchanged sentences

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Gross receivables sold 1

1 unchanged sentence

Net receivables sold 2

2,687 2,438 6,375 5,195

Cash proceeds received 2,779 2,532 6,577 5,406

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

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

1 unchanged sentence

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Fair value of repurchased receivables $ 1,011 $ 724 $ 2,948 $ 1,442

1 unchanged sentence

Gain (loss) on repurchases 1

$ — $ ( 19 ) $ 4 $ ( 22 )

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

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.

At June 30, 2025 and December 31, 2024, our beneficial interests were $ 1,990 and $ 3,185 , respectively, of which $ 1,214 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 June 30, 2025 and December 31, 2024 was $ 263 and $ 301 , respectively, of which $ 140 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

6 unchanged sentences

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

Gross receivables sold/cash proceeds received 1

1 unchanged sentence

Total collections under revolving agreement

7,673 4,672 14,846 8,546

Net cash proceeds received

$ — $ — $ 170 $ 300

Net receivables sold 2

$ 7,463 $ 4,549 $ 14,605 $ 8,612

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

1 Includes initial sales of receivables of $ 0 and $ 0 for the three months and $ 170 and $ 300 for the six months ended June 30, 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 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.

On September 29, 2024, we agreed to sell our interest in DIRECTV to TPG Capital (TPG) for approximately $ 7,600 in cash payments.

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

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

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

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

Three months ended Six months ended

June 30, June 30,

2025 2024 2025 2024

DIRECTV’s earnings included in Equity in net income

of affiliates

$ 503 $ 350 $ 1,926 $ 674

Distributions classified as operating activities

3 unchanged sentences

$ 503 $ 742 $ 1,926 $ 1,260

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 .

For the three and six months ended June 30, 2025, we billed DIRECTV approximately $ 116 and $ 240 under commercial arrangements and transition service agreements, which were recorded as a reduction to the operations and support expenses incurred.

At June 30, 2025 , we had accounts receivable from DIRECTV of $ 205 and accounts payable to DIRECTV of $ 50 .

On July 2, 2025, we completed the sale of our interest in DIRECTV to TPG.

Upon close, we will record a current note receivable of approximately $ 3,600 , which we expect to receive the majority of by the end of 2025, and a long-term receivable of $ 500 .

We expect to record a significant gain on the sale, whose amount will be dependent on transition service agreements, indemnifications and other tax items.

SUPPLIER AND VENDOR FINANCING PROGRAMS

6 unchanged sentences

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 $ 3,384 and $ 2,498 of our outstanding payment obligations as of March 31, 2025 and December 31, 2024, respectively.

Suppliers had elected to sell to the third-party financial institutions $ 3,461 and $ 2,498 of our outstanding payment obligations as of June 30, 2025 and December 31, 2024, respectively.

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

2 unchanged sentences

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 $ 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.

We had $ 4,235 of direct supplier financing outstanding as of June 30, 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.

2 unchanged sentences

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

We refer to these arrangements as vendor financing, with the

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

balances and activities including equipment and software arrangements.

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

For the six months ended June 30, 2025 and 2024, we recorded vendor financing commitments of $ 831 and $ 523 , respectively.

We had $ 1,916 of vendor financing payables at June 30, 2025, with $ 1,193 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.”

ADDITIONAL FINANCIAL INFORMATION

2 unchanged sentences

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

March 31, December 31,

June 30, December 31,

2025 2024 2024 2023

5 unchanged sentences

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

Three months ended

Six months ended

Cash paid (received) during the period for:

2 unchanged sentences

The following table summarizes capital expenditures:

Three months ended

Six months ended

Purchase of property and equipment $ 9,097 $ 8,042

2 unchanged sentences

The following table summarizes acquisitions, net of cash acquired:

Three months ended

Six months ended

Business acquisitions $ — $ —

2 unchanged sentences

Total Acquisitions $ 48 $ 270

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

1 Total capitalized interest was $ 111 and $ 199 for the six months ended June 30, 2025 and 2024, respectively.

Preferred Equity Transactions

1 unchanged sentence

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.

The Telco Class A-4 interests can be called at issue price beginning

JUNE 30, 2025

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

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.

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

Pending Acquisition

On May 21, 2025, we agreed to acquire substantially all of Lumen’s mass markets fiber business for $ 5,750 cash, subject to purchase price adjustments.

At the time of signing, the pending acquisition covered approximately 1 million fiber customers, and also included fiber network assets that reach more than 4 million fiber locations.

The transaction is expected to close in the first half of 2026, pending regulatory approval and other customary closing conditions.

JUNE 30, 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.

First Quarter

2025 2024 Change

Second Quarter Six-Month Period

Percent Percent

2025 2024 Change 2025 2024 Change

Operating Revenues

7 unchanged sentences

Latin America

46 6 — 89 9 —

Segment Operating Income 7,111 7,011 1.4 14,145 13,759 2.8

11 unchanged sentences

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

MARCH 31, 2025

JUNE 30, 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.

First Quarter

2025 2024 Change

Second Quarter Six-Month Period

Percent Percent

2025 2024 Change 2025 2024 Change

Operating Revenues

10 unchanged sentences

Other income (expense) — net

767 682 12.5 1,222 1,133 7.9

Income Before Income Taxes 6,098 5,091 19.8 12,089 9,960 21.4

1 unchanged sentence

Net Income Attributable to AT&T 4,500 3,597 25.1 8,851 7,042 25.7

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

Net Income Attributable to

$ 4,464 $ 3,546 25.9 % $ 8,859 $ 6,941 27.6 %

Operating revenues increased in the second quarter and for the first six months 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 second quarter and for the first six months of 2025, primarily due to higher Mobility equipment costs resulting from increased wireless equipment sales volumes and higher network-related costs.

These increases were partially offset by expense declines from our continued transformation efforts and higher restructuring charges in the prior year.

Also contributing to decreases for the first six months was 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 second quarter and for the first six months 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 increased in the second quarter and for the first six months of 2025.

Our operating income margin in the second quarter increased from 19.3% in 2024 to 21.1% in 2025 and for the first six months increased from 19.4% in 2024 to 19.9% in 2025.

Interest expense decreased in the second quarter and for the first six months 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 second quarter and for the first six months of 2025.

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

We sold our interest in DIRECTV to TPG Capital on July 2, 2025.

JUNE 30, 2025

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

Dollars in millions except per share amounts

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.

Other income (expense) – net increased in the second quarter and for the first six months of 2025.

The increases were primarily due to a second-quarter 2025 gain on prior disposition, and for the first six months, first-quarter 2024 noncash impairment charges for a held-for-sale business and our SKY Mexico equity investment.

Partially offsetting the increases were lower pension and postretirement benefit credits and lower returns on other benefit-related investments for the six-month period.

Other income (expense) - net in the third quarter of 2025, will include a gain recognized on our sale of DIRECTV, which we expect to be in the range of $5,500, dependent on transition service agreements, indemnifications and other tax items (see Note 9).

Income tax expense increased in the second quarter and for the first six months of 2025, primarily due to higher income before income tax.

Our effective tax rate was 20.3% in the second quarter and 21.0% for the first six months of 2025, versus 22.4% and 22.7% in the comparable periods 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.

1 unchanged sentence

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

generally accepted accounting principles (GAAP).

COMMUNICATIONS SEGMENT Second Quarter Six-Month Period

Percent Percent

2025 2024 Change 2025 2024 Change

Segment Operating Revenues

8 unchanged sentences

Total Segment Operating Income $ 7,065 $ 7,005 0.9 % $ 14,056 $ 13,750 2.2 %

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.

Operating revenues increased in the second quarter and for the first six months 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.

Also offsetting revenue increases for the first six months was 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 second quarter and for the first six months of 2025.

Our Communications segment operating income margin in the second quarter decreased from 24.5% in 2024 to 23.8% in 2025 and for the first six months decreased from 23.9% in 2024 to 23.7% in 2025.

Our Communications EBITDA margin in the second quarter decreased from 41.2% in 2024 to 40.7% in 2025 and for the first six months increased from 40.5% in 2024 to 40.6% in 2025.

JUNE 30, 2025

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

Dollars in millions except per share amounts

Communications Business Unit Discussion

Mobility Results

First Quarter

2025 2024 Change

Second Quarter Six-Month Period

Percent Percent

2025 2024 Change 2025 2024 Change

Operating revenues

7 unchanged sentences

Operating Income $ 6,931 $ 6,719 3.2 % $ 13,671 $ 13,187 3.7 %

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:

March 31, Percent

June 30, Percent

(in 000s) 2025 2024 Change

5 unchanged sentences

118,245 115,474 2.4 %

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

JUNE 30, 2025

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

Dollars in millions except per share amounts

Mobility Net Additions

First Quarter

(in 000s) 2025 2024 Change

Second Quarter Six-Month Period

Percent Percent

(in 000s) 2025 2024 Change 2025 2024 Change

Postpaid Phone Net Additions 401 419 (4.3) % 725 768 (5.6) %

6 unchanged sentences

Postpaid Churn 3

0.99 % 0.89 % 10 BP

1.02 % 0.85 % 17 BP 1.01 % 0.87 % 14 BP

Postpaid Phone-Only Churn 3

0.83 % 0.72 % 11 BP

0.87 % 0.70 % 17 BP 0.85 % 0.71 % 14 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 (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.

Tablet net adds (losses) were 63 and 64 for the quarters ended June 30, 2025 and 2024 and 59 and 52 for the first six months ended June 30, 2025 and 2024.

Wearables and other net adds (losses) were 15 and 110 for the quarters ended June 30, 2025 and 2024 and (15) and 162 for the first six months ended June 30, 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 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.

Service revenue increased in the second quarter and for the first six months of 2025, largely due to postpaid phone average revenue per subscriber (ARPU) growth and subscriber gains.

ARPU increased in the second quarter and for the first six months 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 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

Postpaid churn and postpaid phone-only churn were higher in the second quarter and for the first six months of 2025, driven by a normalization of customers reaching the end of their equipment promotional plans and increased competition.

Equipment revenue increased in the second quarter and for the first six months of 2025, primarily driven by higher wireless device sales volumes.

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

The increase also reflected higher advertising due to the launch of a new campaign in the first quarter, promotion costs and network costs.

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

Operating income increased in the second quarter and for the first six months of 2025.

Our Mobility operating income margin in the second quarter decreased from 32.8% in 2024 to 31.7% in 2025 and for the first six months decreased from 32.1% in 2024 to 31.5% in 2025.

Our Mobility EBITDA margin in the second quarter decreased from 44.9% in 2024 to 43.4% in 2025 and for the first six months decreased from 44.2% in 2024 to 43.2% in 2025, driven by the increase in low margin equipment revenues.

JUNE 30, 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

First Quarter

2025 2024 Change

Second Quarter Six-Month Period

Percent Percent

2025 2024 Change 2025 2024 Change

Operating revenues

Legacy and other transitional services $ 2,349 $ 2,839 (17.3) % $ 4,824 $ 5,836 (17.3) %

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

Fiber and advanced connectivity

1,793 1,732 3.5 3,573 3,435 4.0

Equipment 171 184 (7.1) 384 397 (3.3)

6 unchanged sentences

$ (201) $ 102 — % $ (299) $ 166 — %

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.

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

Revenue declines for the first six months 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 in the first quarter of 2025.

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

Equipment revenues decreased in the second quarter and for the first six months of 2025.

Operations and support expenses decreased in the second quarter and for the first six months of 2025, primarily driven by lower personnel and customer support costs associated with ongoing transformation initiatives and lower network-related costs.

Decreases for the first six months were also driven by 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 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

Depreciation expense increased in the second quarter and for the first six months 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 second quarter and for the first six months of 2025.

Our Business Wireline operating income margin in the second quarter decreased from 2.1% in 2024 to (4.7)% in 2025 and for the first six months decreased from 1.7% in 2024 to (3.4)% in 2025.

Our Business Wireline EBITDA margin in the second quarter decreased from 31.3% in 2024 to 30.6% in 2025 and for the first six months increased from 30.1% in 2024 to 31.0% in 2025.

JUNE 30, 2025

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

1 unchanged sentence

Consumer Wireline Results

First Quarter

2025 2024 Change

Second Quarter Six-Month Period

Percent Percent

2025 2024 Change 2025 2024 Change

Operating revenues

10 unchanged sentences

Broadband Connections

March 31, Percent

June 30, Percent

(in 000s) 2025 2024 Change

3 unchanged sentences

Broadband Net Additions

First Quarter

(in 000s) 2025 2024 Change

Second Quarter Six-Month Period

Percent Percent

(in 000s) 2025 2024 Change 2025 2024 Change

Broadband Net Additions 1,2

150 52 — % 287 107 — %

Fiber Broadband Net Additions 243 239 1.7 % 504 491 2.6 %

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.

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

Broadband revenues increased in the second quarter and for the first six months of 2025, driven by increases in fiber revenues of 18.9% and 19.0%.

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

Legacy voice and data services revenues decreased in the second quarter and for the first six months 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 second quarter and for the first six months of 2025, reflecting the continued decline in the number of VoIP customers.

Operations and support expenses were flat in the second quarter and decreased for the first six months of 2025, primarily driven by lower customer support and content licensing costs, largely offset by higher network-related costs and higher marketing costs.

JUNE 30, 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 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

Depreciation expense increased in the second quarter and for the first six months 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.

Operating income increased in the second quarter and for the first six months of 2025.

Our Consumer Wireline operating income margin in the second quarter increased from 5.5% in 2024 to 9.5% in 2025 and for the first six months increased from 5.9% in 2024 to 9.7% in 2025.

Our Consumer Wireline EBITDA margin in the second quarter increased from 32.8% in 2024 to 36.5% in 2025 and for the first six months increased from 32.7% in 2024 to 36.7% in 2025.

LATIN AMERICA SEGMENT Second Quarter

Six-Month Period

2025 2024 Percent Change 2025 2024 Percent Change

Segment Operating Revenues

7 unchanged sentences

Operating Income

$ 46 $ 6 — % $ 89 $ 9 — %

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

March 31, Percent

June 30, Percent

(in 000s) 2025 2024 Change

4 unchanged sentences

Mexico Wireless Net Additions

First Quarter

(in 000s) 2025 2024 Change

Second Quarter

Six-Month Period

Percent Percent

(in 000s) 2025 2024 Change 2025 2024 Change

Postpaid 183 142 28.9 % 343 258 32.9 %

2 unchanged sentences

Total Mexico Wireless Net Additions 235 177 32.8 % 267 320 (16.6) %

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

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

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

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

JUNE 30, 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.

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

Operating income increased in the second quarter and for the first six months of 2025.

Our Mexico operating income margin in the second quarter increased from 0.5% in 2024 to 4.4% in 2025 and for the first six months increased from 0.4% in 2024 to 4.4% in 2025.

Our Mexico EBITDA margin in the second quarter increased from 16.1% in 2024 to 19.1% in 2025 and for the first six months increased from 16.5% in 2024 to 19.5% in 2025.

COMPETITIVE AND REGULATORY ENVIRONMENT

2 unchanged sentences

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.

On July 4, 2025, the One Big Beautiful Bill Act was enacted, which restores or makes permanent certain expiring business tax provisions from the Tax Cuts and Jobs Act of 2017.

We do not anticipate the legislation to materially impact our income tax expense, but expect that it will have a material impact on cash taxes paid.

For further discussion of regulations impacting AT&T and its subsidiaries, 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,

For six months ended June 30,

Cash provided by operating activities

4 unchanged sentences

(598) (13,293)

March 31, December 31,

June 30, December 31,

Cash and cash equivalents

1 unchanged sentence

132,311 123,532

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

We had $10,499 in cash and cash equivalents available at June 30, 2025, increasing $7,201 since December 31, 2024.

Cash and cash equivalents included cash of $2,795 and money market funds and other cash equivalents of $7,704.

1 unchanged sentence

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.

For the first six 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.

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

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

During the first six months of 2025, cash provided by operating activities was $18,812, compared to $16,640 for the first six 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.

JUNE 30, 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