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Item 1. Financial Statements

Item 1. Financial Statements 
 
 
 
 
 AT&T INC. 
 CONSOLIDATED STATEMENTS OF INCOME 
 Dollars in millions except per share amounts 
 (Unaudited) 
 Three months ended Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Operating Revenues 
 Service $ 25,292 $ 25,006 $ 50,430 $ 49,848 
 Equipment 5,555 4,791 11,043 9,977 
 Total operating revenues 30,847 29,797 61,473 59,825 
 
 Operating Expenses 
 Cost of revenues 
 Equipment 5,738 4,815 11,432 9,958 
 
 Other cost of revenues (exclusive of depreciation and 
 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 
 Total operating expenses 24,346 24,037 49,218 48,218 
 Operating Income 6,501 5,760 12,255 11,607 
 Other Income (Expense) 
 Interest expense ( 1,655 ) ( 1,699 ) ( 3,313 ) ( 3,423 ) 
 Equity in net income of affiliates 485 348 1,925 643 
 Other income (expense) — net 
 767 682 1,222 1,133 
 Total other income (expense) ( 403 ) ( 669 ) ( 166 ) ( 1,647 ) 
 Income Before Income Taxes 6,098 5,091 12,089 9,960 
 Income tax expense 1,237 1,142 2,536 2,260 
 
 
 Net Income 4,861 3,949 9,553 7,700 
 Net Income Attributable to Noncontrolling Interest 
 ( 361 ) ( 352 ) ( 702 ) ( 658 ) 
 Net Income Attributable to AT&T $ 4,500 $ 3,597 $ 8,851 $ 7,042 
 Preferred Stock Dividends and Redemption Gain 
 ( 36 ) ( 51 ) 8 ( 101 ) 
 Net Income Attributable to Common Stock $ 4,464 $ 3,546 $ 8,859 $ 6,941 
 
 
 Basic Earnings Per Share Attributable to Common Stock $ 0.62 $ 0.49 $ 1.22 $ 0.96 
 
 
 Diluted Earnings Per Share Attributable to Common Stock $ 0.62 $ 0.49 $ 1.22 $ 0.96 
 Weighted Average Number of Common Shares 
 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. 
 3 

 
 
 

 
 AT&T INC. 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
 Dollars in millions 
 (Unaudited) 
 Three months ended Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Net income $ 4,861 $ 3,949 $ 9,553 $ 7,700 
 Other comprehensive income (loss), net of tax: 
 Foreign currency: 
 Translation adjustment, net of taxes of $ 61 , $( 69 ), $ 71 and 
 $( 61 ) 
 188 ( 221 ) 209 ( 192 ) 
 Reclassification adjustment included in net income, net of 
 taxes of $ 0 , $( 14 ), $ 0 and $( 14 ) 
 — 127 — 127 
 Securities: 
 Net unrealized gains (losses), net of taxes of $ 1 , $ 1 , $ 4 
 and $( 1 ) 
 2 ( 7 ) 12 ( 17 ) 
 Reclassification adjustment included in net income, net of 
 taxes of $ 1 , $ 1 , $ 1 and $ 3 
 3 4 4 10 
 Derivative instruments: 
 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 
 11 10 22 22 
 
 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 
 4,803 3,222 8,558 6,840 
 Less: Total comprehensive income attributable to 
 noncontrolling interest 
 ( 361 ) ( 352 ) ( 702 ) ( 658 ) 
 Total Comprehensive Income Attributable to AT&T 
 $ 4,442 $ 2,870 $ 7,856 $ 6,182 

 See Notes to Consolidated Financial Statements. 
 
 
 4 

 
 
 

 
 
 
 AT&T INC. 
 CONSOLIDATED BALANCE SHEETS 
 Dollars in millions except per share amounts 
 June 30, December 31, 
 2025 2024 
 Assets (Unaudited) 
 Current Assets 
 Cash and cash equivalents $ 10,499 $ 3,298 
 Accounts receivable – net of related allowances for credit loss of $ 392 and $ 375 
 8,844 9,638 
 Inventories 2,357 2,270 
 Prepaid and other current assets 17,606 15,962 
 Total current assets 39,306 31,168 
 Property, plant and equipment 356,188 350,914 
 Less: accumulated depreciation and amortization ( 227,094 ) ( 222,043 ) 
 Property, Plant and Equipment – Net 129,094 128,871 
 Goodwill – Net 63,432 63,432 
 Licenses – Net 127,543 127,035 
 Other Intangible Assets – Net 5,255 5,255 
 Investments in and Advances to Equity Affiliates 1,011 295 
 Operating Lease Right-Of-Use Assets 21,494 20,909 
 Other Assets 18,356 17,830 
 Total Assets $ 405,491 $ 394,795 
 Liabilities and Stockholders’ Equity 
 Current Liabilities 
 Debt maturing within one year $ 9,254 $ 5,089 
 Accounts payable and accrued liabilities 33,289 35,657 
 Advanced billings and customer deposits 3,999 4,099 
 Dividends payable 2,023 2,027 
 Total current liabilities 48,565 46,872 
 Long-Term Debt 123,057 118,443 
 Deferred Credits and Other Noncurrent Liabilities 
 Noncurrent deferred tax liabilities 59,786 58,939 
 Postemployment benefit obligation 9,079 9,025 
 Operating lease liabilities 17,762 17,391 
 Other noncurrent liabilities 23,865 23,900 
 Total deferred credits and other noncurrent liabilities 110,492 109,255 
 Redeemable Noncontrolling Interest 1,983 1,980 
 Stockholders’ Equity 
 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 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 June 30, 2025 and December 31, 2024) 
 7,621 7,621 
 Additional paid-in capital 106,381 109,108 
 Retained earnings 6,680 1,871 
 Treasury stock ( 459,382,925 at June 30, 2025 and 444,853,148 at December 31, 2024, at cost) 
 ( 15,210 ) ( 15,023 ) 
 Accumulated other comprehensive income (loss) ( 200 ) 795 
 Noncontrolling interest 16,122 13,873 
 Total stockholders’ equity 121,394 118,245 
 Total Liabilities and Stockholders’ Equity $ 405,491 $ 394,795 

 See Notes to Consolidated Financial Statements. 
 5 

 
 
 

 
 AT&T INC. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS 
 Dollars in millions 
 (Unaudited) 
 Six months ended 
 June 30, 
 2025 2024 
 Operating Activities 
 Net Income $ 9,553 $ 7,700 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 Depreciation and amortization 
 10,441 10,119 
 Provision for uncollectible accounts 
 1,037 942 
 Asset impairments and abandonments and restructuring 504 639 
 Pension and postretirement benefit expense (credit) 
 ( 794 ) ( 941 ) 
 
 Net (gain) loss on investments 
 ( 31 ) 185 
 Changes in operating assets and liabilities: 
 Receivables 
 ( 247 ) 130 
 Equipment installment receivables and related sales 
 1,115 ( 320 ) 
 Contract asset and cost deferral 
 ( 299 ) 321 
 Inventories, prepaid and other current assets 
 ( 317 ) 419 
 Accounts payable and other accrued liabilities 
 ( 4,440 ) ( 4,761 ) 
 Changes in income taxes 
 1,663 1,976 
 Postretirement claims and contributions ( 103 ) ( 93 ) 
 Other - net 730 324 
 Total adjustments 9,259 8,940 
 Net Cash Provided by Operating Activities 18,812 16,640 
 Investing Activities 
 Capital expenditures ( 9,174 ) ( 8,118 ) 
 Acquisitions, net of cash acquired ( 48 ) ( 270 ) 
 Dispositions 40 14 
 Distributions from DIRECTV in excess of cumulative equity in earnings — 586 
 (Purchases), sales and settlements of securities and investments - net ( 1,084 ) 1,147 
 Other - net ( 778 ) ( 336 ) 
 
 
 Net Cash Used in Investing Activities ( 11,044 ) ( 6,977 ) 
 Financing Activities 
 Net change in short-term borrowings with original maturities of three months or less — 2,686 
 Issuance of other short-term borrowings — 491 
 Repayment of other short-term borrowings — ( 2,487 ) 
 Issuance of long-term debt 6,429 2 
 Repayment of long-term debt ( 1,620 ) ( 6,910 ) 
 
 Payment of vendor financing ( 423 ) ( 1,391 ) 
 
 Redemption of preferred stock 
 ( 2,075 ) — 
 Purchase of treasury stock ( 1,179 ) ( 159 ) 
 Issuance of treasury stock 17 — 
 Issuance of preferred interests in subsidiary 2,221 — 
 
 Dividends paid ( 4,135 ) ( 4,133 ) 
 
 Other - net 167 ( 1,392 ) 
 Net Cash Used in Financing Activities ( 598 ) ( 13,293 ) 
 
 
 
 
 
 
 Net increase (decrease) in cash and cash equivalents and restricted cash $ 7,170 $ ( 3,630 ) 
 Cash and cash equivalents and restricted cash beginning of year 3,406 6,833 
 Cash and Cash Equivalents and Restricted Cash End of Period $ 10,576 $ 3,203 
 See Notes to Consolidated Financial Statements. 

 6 

 
 
 

 
 
 
 AT&T INC. 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY 
 Dollars and shares in millions except per share amounts 
 (Unaudited) 
 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 
 Balance at beginning of period — $ — — $ — — $ — — $ — 
 
 Balance at end of period — $ — — $ — — $ — — $ — 
 Preferred Stock - Series B 
 Balance at beginning of period — $ — — $ — — $ — — $ — 
 
 Balance at end of period — $ — — $ — — $ — — $ — 
 Preferred Stock - Series C 
 Balance at beginning of period — $ — — $ — — $ — — $ — 
 
 Balance at end of period — $ — — $ — — $ — — $ — 
 Common Stock 
 Balance at beginning of period 7,621 $ 7,621 7,621 $ 7,621 7,621 $ 7,621 7,621 $ 7,621 
 
 
 Balance at end of period 7,621 $ 7,621 7,621 $ 7,621 7,621 $ 7,621 7,621 $ 7,621 
 Additional Paid-In Capital 
 Balance at beginning of period $ 106,302 $ 111,599 $ 109,108 $ 114,519 
 Redemption of preferred stock 
 — — ( 2,165 ) — 
 
 Preferred stock dividends — — — ( 98 ) 
 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 
 — ( 152 ) — ( 292 ) 
 Balance at end of period $ 106,381 $ 111,515 $ 106,381 $ 111,515 
 Retained Earnings (Deficit) 
 
 Balance at beginning of period $ 4,215 $ ( 1,570 ) $ 1,871 $ ( 5,015 ) 
 
 
 Net income attributable to AT&T 
 4,500 3,597 8,851 7,042 
 Preferred stock redemption gain 
 — — 90 — 
 Preferred stock dividends ( 35 ) ( 36 ) ( 121 ) ( 36 ) 
 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 

 See Notes to Consolidated Financial Statements. 
 7 

 
 

 
 AT&T INC. 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - continued 
 Dollars and shares in millions except per share amounts 
 (Unaudited) 
 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 
 ( 34 ) ( 968 ) — ( 2 ) ( 43 ) ( 1,186 ) ( 9 ) ( 159 ) 
 Reissuance of treasury stock — 10 — 11 29 999 29 1,019 
 Balance at end of period ( 459 ) $ ( 15,210 ) ( 451 ) $ ( 15,268 ) ( 459 ) $ ( 15,210 ) ( 451 ) $ ( 15,268 ) 
 Accumulated Other Comprehensive Income (Loss) Attributable to AT&T, net of tax 
 
 Balance at beginning of period $ ( 142 ) $ 2,167 $ 795 $ 2,300 
 Other comprehensive income 
 (loss) attributable to AT&T 
 ( 58 ) ( 727 ) ( 995 ) ( 860 ) 
 Balance at end of period $ ( 200 ) $ 1,440 $ ( 200 ) $ 1,440 
 Noncontrolling Interest 1 
 
 Balance at beginning of period $ 16,114 $ 14,080 $ 13,873 $ 14,145 
 
 
 Net income attributable to 
 noncontrolling interest 
 326 317 631 587 
 Issuance and acquisition by 
 noncontrolling owners 
 — — 2,221 — 
 Redemption of noncontrolling 
 interest 
 — ( 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 
 $ 119,858 $ 118,620 $ 118,245 $ 117,442 
 Total Stockholders’ Equity at end 
 of period 
 $ 121,394 $ 119,347 $ 121,394 $ 119,347 
 1 Excludes redeemable noncontrolling interest 
 

 See Notes to Consolidated Financial Statements. 
 
 
 8 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 
 Dollars in millions except per share amounts 

 
 
 
 NOTE 1. PREPARATION OF INTERIM FINANCIAL STATEMENTS 
 
 Basis of Presentation Throughout this document, AT&T Inc. is referred to as “we,” “AT&T” or the “Company.” The consolidated financial statements include the accounts of the Company and subsidiaries and affiliates which we control. AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications and technology industries. You should read this document in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2024. The results for the interim periods are not necessarily indicative of those for the full year. 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. 
 
 
 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. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions, including estimates of fair value, probable losses and expenses, that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 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. 
 
 
 
 NOTE 2. 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 Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Numerators 
 Numerator for basic earnings per share: 
 
 
 
 
 
 
 
 Net Income Attributable to Common Stock $ 4,464 $ 3,546 $ 8,859 $ 6,941 
 
 
 Dilutive impact of share-based payment 2 — 6 — 
 Numerator for diluted earnings per share $ 4,466 $ 3,546 $ 8,865 $ 6,941 
 Denominators (000,000) 
 Denominator for basic earnings per share: 
 Weighted average number of common shares outstanding 7,209 7,196 7,211 7,194 
 
 
 Dilutive impact of share-based payment (in shares) 10 2 10 1 
 Denominator for diluted earnings per share 7,219 7,198 7,221 7,195 
 

 
 
 9 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 
 Dollars in millions except per share amounts 
 
 

 NOTE 3. OTHER COMPREHENSIVE INCOME 
 
 Changes in the balances of each component included in accumulated other comprehensive income (OCI) are presented below. All amounts are net of tax. 
 
 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) 
 Balance as of December 31, 2024 $ ( 1,755 ) $ ( 46 ) $ ( 604 ) $ 3,200 $ 795 
 Other comprehensive income 
 (loss) before reclassifications 
 209 12 ( 528 ) — ( 307 ) 
 Amounts reclassified from 
 accumulated OCI 
 — 1 4 1 22 2 ( 714 ) 3 ( 688 ) 
 Net other comprehensive 
 income (loss) 
 209 16 ( 506 ) ( 714 ) ( 995 ) 
 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) 
 Balance as of December 31, 2023 $ ( 1,337 ) $ ( 57 ) $ ( 1,029 ) $ 4,723 $ 2,300 
 Other comprehensive income 
 (loss) before reclassifications 
 ( 192 ) ( 17 ) ( 49 ) — ( 258 ) 
 Amounts reclassified from 
 accumulated OCI 
 127 1 10 1 22 2 ( 761 ) 3 ( 602 ) 
 Net other comprehensive 
 income (loss) 
 ( 65 ) ( 7 ) ( 27 ) ( 761 ) ( 860 ) 
 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 credit associated with postretirement benefits are included in “Other income (expense) - net” in the consolidated statements of income (see Note 6). 
 

 
 
 NOTE 4. SEGMENT INFORMATION 
 
 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 have two reportable segments: Communications and Latin America. 
 
 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. 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. 
 
 
 10 

 AT&T INC. 
 JUNE 30, 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. and businesses globally. Our business strategies reflect integrated product offerings that cut across product lines and utilize shared assets. This segment contains the following business units: 
 • Mobility provides nationwide wireless service and equipment. 
 • 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. 
 
 
 The Latin America segment provides wireless services and equipment in Mexico. 
 
 Corporate and Other reconciles our segment results to consolidated operating income and income before income taxes. 
 
 
 Corporate includes : 
 • DTV-related retained costs , which are costs previously allocated to the Video business that were retained after the transaction, net of reimbursements from DIRECTV Entertainment Holdings, LLC (DIRECTV) under transition service agreements. 
 • Parent administration support , which includes costs borne by AT&T where the business units do not influence decision making. 
 • Securitization fees associated with our sales of receivables (see Note 8). 
 • Value portfolio , which are businesses no longer integral to our operations or which we no longer actively market. 
 
 
 Other items consist of : 
 • Certain significant items , which includes items associated with the merger and integration of acquired or divested businesses, including amortization of intangible assets, employee separation charges associated with voluntary and/or strategic offers, asset impairments and abandonments and restructuring, and other items for which the segments are not being evaluated. 
 
 “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. 
 11 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 
 Dollars in millions except per share amounts 
 
 

 
 For the three months ended June 30, 2025 
 Revenues Operations and Support Expenses Depreciation and Amortization Operating Income (Loss) 
 Communications 
 Mobility $ 21,845 $ 12,358 $ 2,556 $ 6,931 
 Business Wireline 4,313 2,993 1,521 ( 201 ) 
 Consumer Wireline 3,541 2,248 958 335 
 Total Communications 29,699 17,599 5,035 7,065 
 Latin America 
 1,054 853 155 46 
 Segment Total 30,753 18,452 5,190 7,111 
 Corporate and Other 
 Corporate: 
 DTV-related retained costs — 57 50 ( 107 ) 
 Parent administration support ( 2 ) 422 2 ( 426 ) 
 Securitization fees 
 30 174 — ( 144 ) 
 Value portfolio 66 11 — 55 
 Total Corporate 94 664 52 ( 622 ) 
 Certain significant items — ( 21 ) 9 12 
 Total Corporate and Other 94 643 61 ( 610 ) 
 AT&T Inc. $ 30,847 $ 19,095 $ 5,251 $ 6,501 
 

 
 
 
 For the three months ended June 30, 2024 
 Revenues Operations and Support Expenses Depreciation and Amortization Operating Income (Loss) 
 Communications 
 Mobility $ 20,480 $ 11,285 $ 2,476 $ 6,719 
 Business Wireline 4,755 3,267 1,386 102 
 Consumer Wireline 3,347 2,249 914 184 
 Total Communications 28,582 16,801 4,776 7,005 
 Latin America 
 1,103 925 172 6 
 Segment Total 29,685 17,726 4,948 7,011 
 Corporate and Other 
 Corporate: 
 DTV-related retained costs — 116 102 ( 218 ) 
 Parent administration support — 443 2 ( 445 ) 
 Securitization fees 
 29 150 — ( 121 ) 
 Value portfolio 83 25 5 53 
 Total Corporate 112 734 109 ( 731 ) 
 Certain significant items — 505 15 ( 520 ) 
 Total Corporate and Other 112 1,239 124 ( 1,251 ) 
 AT&T Inc. $ 29,797 $ 18,965 $ 5,072 $ 5,760 
 

 12 

 
 AT&T INC. 
 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 
 Corporate: 
 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 ) 
 AT&T Inc. $ 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 
 Corporate: 
 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 ) 
 AT&T Inc. $ 59,825 $ 38,099 $ 10,119 $ 11,607 
 

 13 

 
 AT&T INC. 
 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
June 30, 
 2025 2024 2025 2024 
 Communications $ 7,065 $ 7,005 $ 14,056 $ 13,750 
 Latin America 46 6 89 9 
 Segment Operating Income 7,111 7,011 14,145 13,759 
 Reconciling Items: 
 Corporate ( 622 ) ( 731 ) ( 1,304 ) ( 1,465 ) 
 Transaction, legal and other costs 
 ( 49 ) ( 35 ) ( 128 ) ( 67 ) 
 Amortization of intangibles acquired ( 9 ) ( 15 ) ( 18 ) ( 30 ) 
 Asset impairments and abandonments and restructuring — ( 480 ) ( 504 ) ( 639 ) 
 Benefit-related gains (losses) 70 10 64 49 
 
 
 
 AT&T Operating Income 6,501 5,760 12,255 11,607 
 Interest expense 1,655 1,699 3,313 3,423 
 Equity in net income of affiliates 485 348 1,925 643 
 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:
 
 June 30, December 31, 
 2025 2024 
 Assets Investments in Equity Method Investees Assets 
 Investments in Equity Method Investees 
 Communications 
 $ 496,906 $ — $ 481,757 $ — 
 Latin America 8,659 — 7,808 — 
 Corporate and eliminations 
 ( 100,074 ) 1,011 ( 94,770 ) 295 
 Total $ 405,491 $ 1,011 $ 394,795 $ 295 

 
 
 
 Six months ended 
June 30, 
 Capital Expenditures 
 2025 2024 
 Communications $ 8,674 $ 7,741 
 Latin America 125 101 
 Corporate and eliminations 
 375 276 
 Total $ 9,174 $ 8,118 
 
 
 

 
 14 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued 
 Dollars in millions except per share amounts 
 
 

 NOTE 5. REVENUE RECOGNITION 
 
 
 Revenue Categories 
 The following tables set forth reported revenue by category and by business unit: 
 
 
 
 For the three months ended June 30, 2025 
 Communications 
 Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total 
 Wireless $ 16,853 $ — $ — $ 662 $ — $ 17,515 
 Fiber and advanced connectivity 1 
 — 1,793 2,136 — — 3,929 
 Non-fiber consumer broadband — — 892 — — 892 
 
 Legacy and other transitional — 2,349 265 — 45 2,659 
 Other — — 248 — 49 297 
 Total Service 16,853 4,142 3,541 662 94 25,292 
 Equipment 4,992 171 — 392 — 5,555 
 Total $ 21,845 $ 4,313 $ 3,541 $ 1,054 $ 94 $ 30,847 
 1 Advanced connectivity services reported in Business Wireline. 
 

 
 
 
 For the three months ended June 30, 2024 
 Communications 
 Mobility Business Wireline Consumer Wireline Latin America Corporate & Other Total 
 Wireless $ 16,277 $ — $ — $ 699 $ — $ 16,976 
 Fiber and advanced connectivity 1 
 — 1,732 1,796 — — 3,528 
 Non-fiber consumer broadband — — 945 — — 945 
 
 Legacy and other transitional — 2,839 323 — 62 3,224 
 Other — — 283 — 50 333 
 Total Service 16,277 4,571 3,347 699 112 25,006 
 Equipment 4,203 184 — 404 — 4,791 
 Total $ 20,480 $ 4,755 $ 3,347 $ 1,103 $ 112 $ 29,797 
 1 Advanced connectivity services reported in Business Wireline. 
 

 
 
 
 
 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. 
 

 
 
 15 

 
 AT&T INC. 
 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 
 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 . 
 
 The following table presents the deferred customer contract acquisition and fulfillment costs included on our consolidated balance sheets: 
 June 30, December 31, 
 Consolidated Balance Sheets 2025 2024 
 Deferred Acquisition Costs 
 Prepaid and other current assets $ 3,310 $ 3,239 
 Other Assets 4,413 4,177 
 Total deferred customer contract acquisition costs $ 7,723 $ 7,416 
 Deferred Fulfillment Costs 
 Prepaid and other current assets $ 1,975 $ 2,101 
 Other Assets 3,065 3,289 
 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 six months ended: 
 
 June 30, June 30, 
 Consolidated Statements of Income 2025 2024 
 Deferred acquisition cost amortization $ 1,854 $ 1,808 
 Deferred fulfillment cost amortization 1,171 1,294 
 

 
 Contract Assets and Liabilities 
 A contract asset is recorded when revenue is recognized in advance of our right to bill and receive consideration. The contract asset will decrease as services are provided and billed. For example, when installment sales include promotional discounts (e.g., trade-in device credits) the difference between revenue recognized and consideration received is recorded as a contract asset to be amortized over the contract term. 
 
 
 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 
 16 

 AT&T INC. 
 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. 
 
 
 When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Reductions in the contract liability will be recorded as we satisfy the performance obligations. 
 
 The following table presents contract assets and liabilities on our consolidated balance sheets: 
 
 June 30, December 31, 
 Consolidated Balance Sheets 2025 2024 
 Contract asset $ 7,198 $ 6,855 
 Current portion in “Prepaid and other current assets” 
 4,009 3,845 
 Contract liability 4,291 4,272 
 Current portion in “Advanced billings and customer deposits” 
 3,872 3,981 

 
 
 Our beginning of period contract liability recorded as customer contract revenue during 2025 was $ 3,515 . 
 
 Remaining Performance Obligations 
 Remaining performance obligations represent services we are required to provide to customers under bundled or discounted arrangements, which are satisfied as services are provided over the contract term. In determining the transaction price allocated, we do not include non-recurring charges and estimates for usage, nor do we consider arrangements with an original expected duration of less than one year, which are primarily prepaid wireless and residential internet agreements. 
 
 Remaining performance obligations associated with business contracts reflect recurring charges billed, adjusted to reflect estimates for sales incentives and revenue adjustments. 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 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. 
 
 
 NOTE 6. PENSION AND POSTRETIREMENT BENEFITS 
 
 Many of our employees are covered by one of our noncontributory pension plans. We also provide certain medical, dental, life insurance and death benefits to certain retired employees under various plans and accrue actuarially determined postretirement benefit costs. Our objective in funding these plans, in combination with the standards of the Employee Retirement Income Security Act of 1974, as amended (ERISA), is to accumulate assets sufficient to provide benefits described in the plans to employees upon their retirement. 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. 
 
 
 17 

 
 AT&T INC. 
 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 Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Pension cost: 
 Service cost – benefits earned during the period $ 107 $ 121 $ 214 $ 243 
 Interest cost on projected benefit obligation 401 397 801 793 
 Expected return on assets ( 509 ) ( 552 ) ( 1,016 ) ( 1,105 ) 
 Amortization of prior service credit ( 12 ) ( 22 ) ( 24 ) ( 44 ) 
 
 
 
 Net pension (credit) cost $ ( 13 ) $ ( 56 ) $ ( 25 ) $ ( 113 ) 
 
 Postretirement cost: 
 Service cost – benefits earned during the period $ 5 $ 6 $ 9 $ 11 
 Interest cost on accumulated postretirement benefit 
 obligation 
 79 78 159 155 
 Expected return on assets ( 8 ) ( 16 ) ( 18 ) ( 30 ) 
 Amortization of prior service credit ( 460 ) ( 482 ) ( 919 ) ( 964 ) 
 
 
 Net postretirement (credit) cost $ ( 384 ) $ ( 414 ) $ ( 769 ) $ ( 828 ) 
 Combined net pension and postretirement (credit) cost $ ( 397 ) $ ( 470 ) $ ( 794 ) $ ( 941 ) 

 
 
 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 $ 16 in the second quarter and $ 32 and $ 33 for the first six months of 2025 and 2024, respectively. 
 
 
 NOTE 7. FAIR VALUE MEASUREMENTS AND DISCLOSURE 
 
 The Fair Value Measurement and Disclosure framework in ASC 820, “Fair Value Measurement,” provides a three-tiered fair value hierarchy based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs. 
 
 The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. 
 
 The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable value or reflective of future fair values. We believe our valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the methodologies used since December 31, 2024. 
 
 18 

 AT&T INC. 
 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: 
 
 June 30, 2025 December 31, 2024 
 Carrying Fair Carrying Fair 
 Amount Value Amount Value 
 Notes and debentures 1 
 $ 130,929 $ 124,807 $ 122,116 $ 114,167 
 
 
 Investment securities 2 
 1,598 1,598 1,603 1,603 
 1 Includes credit agreement borrowings. 
 
 2 Excludes investments accounted for under the equity method. 
 

 
 
 The carrying amount of debt with an original maturity of less than one year approximates fair value. 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 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. 
 
 June 30, 2025 
 Level 1 Level 2 Level 3 Total 
 Equity Securities 
 Domestic equities $ 514 $ — $ — $ 514 
 International equities 9 — — 9 
 Fixed income equities 184 — — 184 
 Available-for-Sale Debt Securities — 671 — 671 
 Asset Derivatives 
 
 Cross-currency swaps — 1,203 — 1,203 
 
 
 Liability Derivatives 
 
 Cross-currency swaps — ( 2,093 ) — ( 2,093 ) 
 
 

 
 
 
 December 31, 2024 
 Level 1 Level 2 Level 3 Total 
 Equity Securities 
 Domestic equities $ 484 $ — $ — $ 484 
 International equities 8 — — 8 
 Fixed income equities 178 — — 178 
 Available-for-Sale Debt Securities — 689 — 689 
 Asset Derivatives 
 
 Cross-currency swaps — 87 — 87 
 
 
 Liability Derivatives 
 
 Cross-currency swaps — ( 4,163 ) — ( 4,163 ) 
 
 

 
 
 Investment Securities 
 Our investment securities include both equity and debt securities that are measured at fair value, as well as equity securities without readily determinable fair values. A substantial portion of the fair values of our investment securities is estimated based on quoted market prices. 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. 
 19 

 AT&T INC. 
 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 Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Total gains (losses) recognized on equity securities $ 48 $ 29 $ 21 $ 126 
 Gains (losses) recognized on equity securities sold — ( 5 ) — ( 8 ) 
 Unrealized gains (losses) recognized on equity securities held at end of period $ 48 $ 34 $ 21 $ 134 

 
 
 At June 30, 2025, available-for-sale debt securities totaling $ 671 have maturities as follows - less than one year: $ 71 ; one to three years: $ 107 ; three to five years: $ 113 ; five or more years: $ 380 . 
 
 Our cash equivalents (money market securities) and short-term investments (certificate and time deposits) are recorded at amortized cost, and the respective carrying amounts approximate fair values. Short-term investments are recorded in “Prepaid and other current assets” and our investment securities are recorded in “Other Assets” on the consolidated balance sheets. 
 
 Derivative Financial Instruments 
 We enter into derivative transactions to manage certain market risks, primarily interest rate risk and foreign currency exchange risk. This includes the use of interest rate swaps, interest rate locks, foreign exchange forward contracts and combined interest rate foreign exchange contracts (cross-currency swaps). We do not use derivatives for trading or speculative purposes. We record derivatives on our consolidated balance sheets at fair value that is derived from observable market data, including yield curves and foreign exchange rates (all of our derivatives are Level 2). Cash flows associated with derivative instruments are presented in the same category on the consolidated statements of cash flows as the item being hedged. 
 
 Fair Value Hedging Periodically, we enter into and designate fixed-to-floating interest rate swaps as fair value hedges. The purpose of these swaps is to manage interest rate risk by managing our mix of fixed-rate and floating-rate debt. These swaps involve the receipt of fixed-rate amounts for floating interest rate payments over the life of the swaps without exchange of the underlying principal amount. 
 
 We also designate most of our cross-currency swaps and foreign exchange contracts as fair value hedges. 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 foreign exchange contracts, we have elected to exclude the change in fair value of forward points from the assessment of hedge effectiveness. 
 
 Unrealized and realized gains or losses from fair value hedges impact the same category on the consolidated statements of income as the item being hedged, including the earnings impact of excluded components. In instances where we have elected to exclude components from the assessment of hedge effectiveness related to fair value hedges, unrealized gains or losses on such excluded components are recorded as a component of accumulated OCI and recognized into earnings over the life of the hedging instrument. Unrealized gains on derivatives designated as fair value hedges are recorded at fair value as assets, and unrealized losses are recorded at fair market value as liabilities. 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 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. These agreements include initial and final exchanges of principal from fixed foreign denominated amounts to fixed U.S. dollar denominated amounts, to be exchanged at a specified rate that is usually determined by the market spot rate upon issuance. They also include an interest rate swap of a fixed or floating foreign denominated interest rate to a fixed U.S. dollar denominated interest rate. 
 
 
 20 

 AT&T INC. 
 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. For derivative instruments designated as cash flow hedges, changes in fair value are reported as a component of accumulated OCI and are reclassified into the consolidated statements of income in the same period the hedged transaction affects earnings. 
 
 
 Periodically, we enter into and designate interest rate locks to partially hedge the risk of changes in interest payments attributable to increases in the benchmark interest rate during the period leading up to the probable issuance of fixed-rate debt. We designate our interest rate locks as cash flow hedges. Gains and losses when we settle our interest rate locks are amortized into income over the life of the related debt. Over the next 12 months, we expect to reclassify $ 59 from accumulated OCI to “Interest expense” due to the amortization of net losses on historical interest rate locks. 
 
 
 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 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 . At December 31, 2024, we had posted collateral of $ 188 (a deposit asset) and held collateral of $ 0 (a receipt liability). We do not offset the fair value of collateral, whether the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) exists, against the fair value of the derivative instruments. 
 
 Following are the notional amounts of our outstanding derivative positions: 
 
 June 30, December 31, 
 2025 2024 
 
 Cross-currency swaps $ 36,499 $ 34,884 
 
 
 Total $ 36,499 $ 34,884 

 
 Following are the related hedged items affecting our financial position and performance: 
 
 Effect of Derivatives on the Consolidated Statements of Income 
 Three months ended Six months ended 
 June 30, June 30, 
 Fair Value Hedging Relationships 2025 2024 2025 2024 
 Interest rate swaps (“Interest expense”): 
 Gain (loss) on interest rate swaps $ ( 1 ) $ ( 1 ) $ ( 2 ) $ ( 1 ) 
 Gain (loss) on long-term debt 1 1 2 1 
 Cross-currency swaps: 
 Gain (loss) on cross-currency swaps 2,735 ( 178 ) 3,859 ( 424 ) 
 Gain (loss) on long-term debt ( 2,735 ) 178 ( 3,859 ) 424 
 Gain (loss) recognized in accumulated OCI 128 ( 325 ) ( 703 ) ( 70 ) 
 
 
 
 

 
 
 In addition, the net swap settlements that accrued and settled in the periods above were offset against “Interest expense.” 
 
 
 21 

 AT&T INC. 
 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 Six months ended 
 June 30, June 30, 
 Cash Flow Hedging Relationships 2025 2024 2025 2024 
 Cross-currency swaps: 
 Gain (loss) recognized in accumulated OCI $ — $ — $ 4 $ 5 
 
 
 
 Interest rate locks: 
 
 Interest income (expense) reclassified from accumulated 
 OCI into income 
 ( 14 ) ( 14 ) ( 29 ) ( 29 ) 
 
 

 
 
 NOTE 8. SALES OF RECEIVABLES 
 
 We have agreements with various third-party financial institutions pertaining to the sales of certain types of our accounts receivable. The most significant of these programs are discussed in detail below and generally consist of (1) receivables arising from equipment installment plans, which are sold for cash and beneficial interests, such as deferred purchase price, when applicable, and (2) revolving trade receivables, which are sold for cash. Under the terms of our agreements for these programs, we continue to service the transferred receivables on behalf of the financial institutions. 
 
 
 The following table sets forth a summary of cash proceeds received, net of remittances paid, from sales of receivables: 
 
 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 
 $ ( 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. 
 

 
 
 The sales of receivables did not have a material impact on our consolidated statements of income or to “Total Assets” reported on our consolidated balance sheets. We reflect cash receipts on sold receivables as cash flows from operations in our consolidated statements of cash flows. In the event cash is received on the beneficial interests, those receipts are classified as cash flows from investing activities, when applicable. 
 
 22 

 AT&T INC. 
 JUNE 30, 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: 
 
 June 30, 2025 December 31, 2024 
 Equipment Equipment 
 Installment Revolving Installment Revolving 
 Gross receivables: $ 3,227 $ 234 $ 3,504 $ 553 
 Balance sheet classification 
 Accounts receivable 
 
 Notes receivable 
 1,771 — 1,817 — 
 Trade receivables 
 299 234 237 553 
 Other Assets 
 
 Noncurrent notes and trade receivables 
 1,157 — 1,450 — 
 
 Outstanding portfolio of receivables derecognized from 
 our consolidated balance sheets 
 $ 11,566 $ 2,940 $ 11,909 $ 2,770 
 Cash proceeds received, net of remittances 1 
 9,054 2,940 8,243 2,770 
 1 Represents amounts to which financial institutions remain entitled, excluding the beneficial interests. 
 

 
 
 Equipment Installment Receivables Program 
 We offer our customers the option to purchase certain wireless devices in installments over a specified period of time and, in many cases, once certain conditions are met, they may be eligible to trade in the original equipment for a new device and have the remaining unpaid balance paid or settled. 
 
 We maintain a program under which we transfer a portion of these receivables through our bankruptcy-remote subsidiary in exchange for cash and beneficial interests. In the event a customer trades in a device prior to the end of the installment contract period, we agree to make a payment to the financial institutions equal to any outstanding remaining installment receivable balance. Accordingly, we record a guarantee obligation for this estimated amount at the time the receivables are transferred. 
 
 The following table sets forth a summary of equipment installment receivables sold under this program: 
 
 Three months ended Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Gross receivables sold 1 
 $ 2,807 $ 2,557 $ 6,642 $ 5,461 
 Net receivables sold 2 
 2,687 2,438 6,375 5,195 
 Cash proceeds received 2,779 2,532 6,577 5,406 
 
 Guarantee obligation recorded 219 217 499 483 
 1 Receivables net of promotion credits. 
 
 2 Receivables net of allowance and other reserves. 
 

 
 
 Beneficial interests, when applicable, and guarantee obligations are initially recorded at estimated fair value and subsequently adjusted for changes in present value of expected cash flows. The estimation of their fair values is based on remaining installment payments expected to be collected and the expected timing and value of device trade-ins. The estimated value of the device trade-ins considers prices offered to us by independent third parties and contemplates changes in value after the launch of a device model. 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). 
 
 
 23 

 AT&T INC. 
 JUNE 30, 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 Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Fair value of repurchased receivables $ 1,011 $ 724 $ 2,948 $ 1,442 
 Carrying value of beneficial interests 1,011 743 2,944 1,464 
 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 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 
 During 2025, we expanded our revolving agreement to transfer up to $ 2,940 of certain receivables through our bankruptcy-remote subsidiaries to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred. This agreement is subject to renewal on an annual basis and the transfer limit may be expanded or reduced from time to time. As customers pay their balances, we transfer additional receivables into the program, resulting in our gross receivables sold exceeding net cash flow impacts (e.g., collect and reinvest). The transferred receivables are fully guaranteed by our bankruptcy-remote subsidiaries, which hold additional receivables in the amount of $ 234 that are pledged as collateral under this agreement. The transfers are recorded at fair value of the proceeds received and obligations assumed less derecognized receivables. Our maximum exposure to loss related to these receivables transferred is limited to the derecognized amount outstanding. 
 
 
 The following table sets forth a summary of the revolving receivables sold: 
 
 Three months ended Six months ended 
 June 30, June 30, 
 2025 2024 2025 2024 
 Gross receivables sold/cash proceeds received 1 
 $ 7,673 $ 4,672 $ 15,016 $ 8,846 
 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 $ 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. 
 

 
 
 NOTE 9. TRANSACTIONS WITH DIRECTV 
 
 
 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 (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 
 24 

 AT&T INC. 
 JUNE 30, 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 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 
 $ 503 $ 350 $ 1,926 $ 674 
 Distributions classified as investing activities 
 — 392 — 586 
 Cash distributions received from DIRECTV 
 $ 503 $ 742 $ 1,926 $ 1,260 

 
 
 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. 
 
 
 
 NOTE 10. SUPPLIER AND VENDOR FINANCING PROGRAMS 
 
 
 Supplier Financing Program 
 We actively manage the timing of our supplier payments for operating items to optimize the use of our cash and seek to make payments on 90-day or greater terms, while providing suppliers with access to bank facilities that permit earlier payment at their cost. Our supplier financing program does not result in changes to our normal, contracted payment cycles or cash from operations. 
 
 
 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 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 $ 3,461 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. 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 $ 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. 
 
 
 Vendor Financing 
 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 
 25 

 AT&T INC. 
 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.” 
 
 
 NOTE 11. ADDITIONAL FINANCIAL INFORMATION 
 
 Cash and Cash Flows 
 We typically maintain our restricted cash balances for purchases and sales of certain investment securities and funding of certain deferred compensation benefit payments. 
 
 
 The following table summarizes cash and cash equivalents and restricted cash balances contained on our consolidated balance sheets: 
 
 June 30, December 31, 
 2025 2024 2024 2023 
 Cash and cash equivalents 
 $ 10,499 $ 3,093 $ 3,298 $ 6,722 
 
 Restricted cash in Prepaid and other current assets 1 1 1 2 
 Restricted cash in Other Assets 76 109 107 109 
 Cash and Cash Equivalents and Restricted Cash $ 10,576 $ 3,203 $ 3,406 $ 6,833 
 

 
 
 The following table summarizes cash paid during the periods for interest and income taxes: 
 
 Six months ended 
 June 30, 
 Cash paid (received) during the period for: 2025 2024 
 Interest $ 3,316 $ 3,644 
 Income taxes, net of refunds 880 299 
 
 
 The following table summarizes capital expenditures: 
 Six months ended 
 June 30, 
 2025 2024 
 Purchase of property and equipment $ 9,097 $ 8,042 
 Interest during construction - capital expenditures 1 
 77 76 
 Total Capital Expenditures $ 9,174 $ 8,118 
 
 The following table summarizes acquisitions, net of cash acquired: 
 Six months ended 
 June 30, 
 2025 2024 
 Business acquisitions $ — $ — 
 Spectrum acquisitions 14 147 
 Interest during construction - spectrum 1 
 34 123 
 Total Acquisitions $ 48 $ 270 
 1 Total capitalized interest was $ 111 and $ 199 for the six months ended June 30, 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 
 26 

 AT&T INC. 
 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 . 
 
 
 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. 
 
 27 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 
 Dollars in millions except per share amounts 
 
 

 
 
 
 OVERVIEW 
 AT&T Inc. is referred to as “we,” “AT&T” or the “Company” throughout this document. AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc., and the names of the particular subsidiaries and affiliates providing the services generally have been omitted. AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications and technology industries. You should read this discussion in conjunction with the consolidated financial statements and accompanying notes (Notes). 
 
 We have two reportable segments: Communications and Latin America. Our segment results presented in Note 4 and discussed below follow our internal management reporting. Percentage increases and decreases that are not considered meaningful are denoted with a dash. 
 
 
 
 Second Quarter Six-Month Period 
 Percent Percent 
 2025 2024 Change 2025 2024 Change 
 Operating Revenues 
 Communications $ 29,699 $ 28,582 3.9 % $ 59,259 $ 57,439 3.2 % 
 Latin America 
 1,054 1,103 (4.4) 2,025 2,166 (6.5) 
 
 Corporate 94 112 (16.1) 189 220 (14.1) 
 AT&T Operating Revenues $ 30,847 $ 29,797 3.5 % $ 61,473 $ 59,825 2.8 % 
 
 Operating Income (Loss) 
 
 Communications $ 7,065 $ 7,005 0.9 % $ 14,056 $ 13,750 2.2 % 
 Latin America 
 46 6 — 89 9 — 
 Segment Operating Income 7,111 7,011 1.4 14,145 13,759 2.8 
 Corporate (622) (731) 14.9 (1,304) (1,465) 11.0 
 Certain significant items 12 (520) — (586) (687) 14.7 
 AT&T Operating Income $ 6,501 $ 5,760 12.9 % $ 12,255 $ 11,607 5.6 % 
 
 

 The Communications segment provides services to businesses and consumers located in the U.S. and businesses globally. Our business strategies reflect integrated product offerings that cut across product lines and utilize shared assets. This segment contains the following business units: 
 • Mobility provides nationwide wireless service and equipment. 
 • 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 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. 
 
 
 28 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued 
 Dollars in millions except per share amounts 
 
 

 RESULTS OF OPERATIONS 
 
 Consolidated Results Our financial results are summarized in the discussions that follow. Additional analysis is discussed in our “Segment Results” section. 
 
 Second Quarter Six-Month Period 
 Percent Percent 
 2025 2024 Change 2025 2024 Change 
 Operating Revenues 
 Service $ 25,292 $ 25,006 1.1 % $ 50,430 $ 49,848 1.2 % 
 Equipment 5,555 4,791 15.9 11,043 9,977 10.7 
 Total Operating Revenues 30,847 29,797 3.5 61,473 59,825 2.8 
 
 Operating Expenses 
 
 Operations and support 19,095 18,965 0.7 38,777 38,099 1.8 
 Depreciation and amortization 5,251 5,072 3.5 10,441 10,119 3.2 
 Total Operating Expenses 24,346 24,037 1.3 49,218 48,218 2.1 
 Operating Income 6,501 5,760 12.9 12,255 11,607 5.6 
 Interest expense 1,655 1,699 (2.6) 3,313 3,423 (3.2) 
 Equity in net income of affiliates 485 348 39.4 1,925 643 — 
 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 
 Net Income 4,861 3,949 23.1 9,553 7,700 24.1 
 Net Income Attributable to AT&T 4,500 3,597 25.1 8,851 7,042 25.7 
 Net Income Attributable to 
 Common Stock 
 $ 4,464 $ 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. 
 
 29 

 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued 
 Dollars in millions except per share amounts 
 
 

 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. 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 (GAAP). 
 
 COMMUNICATIONS SEGMENT Second Quarter Six-Month Period 
 Percent Percent 
 2025 2024 Change 2025 2024 Change 
 Segment Operating Revenues 
 Mobility $ 21,845 $ 20,480 6.7 % $ 43,415 $ 41,074 5.7 % 
 Business Wireline 4,313 4,755 (9.3) 8,781 9,668 (9.2) 
 Consumer Wireline 3,541 3,347 5.8 7,063 6,697 5.5 
 Total Segment Operating Revenues $ 29,699 $ 28,582 3.9 % $ 59,259 $ 57,439 3.2 % 
 
 Segment Operating Income (Loss) 
 
 Mobility $ 6,931 $ 6,719 3.2 % $ 13,671 $ 13,187 3.7 % 
 Business Wireline (201) 102 — (299) 166 — 
 Consumer Wireline 335 184 82.1 684 397 72.3 
 Total Segment Operating Income $ 7,065 $ 7,005 0.9 % $ 14,056 $ 13,750 2.2 % 

 
 
 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. 
 
 
 30 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. 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 
 Second Quarter Six-Month Period 
 Percent Percent 
 2025 2024 Change 2025 2024 Change 
 Operating revenues 
 Service $ 16,853 $ 16,277 3.5 % $ 33,504 $ 32,271 3.8 % 
 Equipment 4,992 4,203 18.8 9,911 8,803 12.6 
 Total Operating Revenues 21,845 20,480 6.7 43,415 41,074 5.7 
 
 Operating expenses 
 Operations and support 12,358 11,285 9.5 24,662 22,924 7.6 
 Depreciation and amortization 2,556 2,476 3.2 5,082 4,963 2.4 
 Total Operating Expenses 14,914 13,761 8.4 29,744 27,887 6.7 
 Operating Income $ 6,931 $ 6,719 3.2 % $ 13,671 $ 13,187 3.7 % 

 
 
 The following tables highlight other key measures of performance for Mobility: 
 
 Subscribers 
 June 30, Percent 
 (in 000s) 2025 2024 Change 
 Postpaid 89,928 87,999 2.2 % 
 Postpaid phone 73,408 71,930 2.1 
 Prepaid 
 18,768 19,271 (2.6) 
 Reseller 9,549 8,204 16.4 
 Total Mobility Subscribers 1 
 118,245 115,474 2.4 % 
 1 Excludes migrations between wireless subscriber categories, including connected devices, and acquisition-related activity during the period. 
 
 

 
 
 31 

 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued 
 Dollars in millions except per share amounts 
 
 

 
 Mobility Net Additions 
 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) % 
 Total Phone Net Additions 367 454 (19.2) 671 804 (16.5) 
 
 Postpaid 2 
 479 593 (19.2) 769 982 (21.7) 
 Prepaid (152) 82 — (186) 83 — 
 Reseller (38) 322 — (174) 673 — 
 Mobility Net Subscriber Additions 1 
 289 997 (71.0) % 409 1,738 (76.5) % 
 
 Postpaid Churn 3 
 1.02 % 0.85 % 17 BP 1.01 % 0.87 % 14 BP 
 Postpaid Phone-Only Churn 3 
 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 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 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 
 ARPU increased in the second quarter and for the first six months of 2025, reflecting pricing actions and customers migrating to higher priced plans. 
 
 Churn 
 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 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. 
 32 

 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued 
 Dollars in millions except per share amounts 
 
 

 
 
 
 
 Business Wireline Results 
 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 
 1,793 1,732 3.5 3,573 3,435 4.0 
 Equipment 171 184 (7.1) 384 397 (3.3) 
 Total Operating Revenues 4,313 4,755 (9.3) 8,781 9,668 (9.2) 
 
 Operating expenses 
 Operations and support 2,993 3,267 (8.4) 6,061 6,754 (10.3) 
 Depreciation and amortization 1,521 1,386 9.7 3,019 2,748 9.9 
 Total Operating Expenses 4,514 4,653 (3.0) 9,080 9,502 (4.4) 
 Operating Income (Loss) 
 $ (201) $ 102 — % $ (299) $ 166 — % 

 
 
 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 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. 
 
 
 
 
 33 

 
 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued 
 Dollars in millions except per share amounts 
 
 

 
 Consumer Wireline Results 
 Second Quarter Six-Month Period 
 Percent Percent 
 2025 2024 Change 2025 2024 Change 
 Operating revenues 
 Broadband $ 3,028 $ 2,741 10.5 % $ 6,012 $ 5,463 10.0 % 
 Legacy voice and data services 265 323 (18.0) 551 665 (17.1) 
 Other service and equipment 248 283 (12.4) 500 569 (12.1) 
 Total Operating Revenues 3,541 3,347 5.8 7,063 6,697 5.5 
 
 Operating expenses 
 Operations and support 2,248 2,249 — 4,472 4,505 (0.7) 
 Depreciation and amortization 958 914 4.8 1,907 1,795 6.2 
 Total Operating Expenses 3,206 3,163 1.4 6,379 6,300 1.3 
 Operating Income $ 335 $ 184 82.1 % $ 684 $ 397 72.3 % 

 
 
 The following tables highlight other key measures of performance for Consumer Wireline: 
 
 Broadband Connections 
 
 June 30, Percent 
 (in 000s) 2025 2024 Change 
 
 
 Broadband 1 
 14,262 13,836 3.1 % 
 Fiber Broadband Connections 9,835 8,798 11.8 % 
 
 
 
 
 
 1 Includes AIA. 
 

 
 
 
 Broadband Net Additions 
 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 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 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. 
 
 34 

 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued 
 Dollars in millions except per share amounts 
 
 

 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 
 Service $ 662 $ 699 (5.3) % $ 1,277 $ 1,389 (8.1) % 
 Equipment 392 404 (3.0) 748 777 (3.7) 
 Total Segment Operating Revenues 1,054 1,103 (4.4) 2,025 2,166 (6.5) 
 
 Segment Operating Expenses 
 Operations and support 853 925 (7.8) 1,631 1,808 (9.8) 
 Depreciation and amortization 155 172 (9.9) 305 349 (12.6) 
 Total Segment Operating Expenses 1,008 1,097 (8.1) 1,936 2,157 (10.2) 
 Operating Income 
 $ 46 $ 6 — % $ 89 $ 9 — % 

 
 
 The following tables highlight other key measures of performance for Mexico: 
 
 Subscribers 
 June 30, Percent 
 (in 000s) 2025 2024 Change 
 
 Postpaid 6,180 5,494 12.5 % 
 Prepaid 17,440 16,809 3.8 
 Reseller 223 333 (33.0) 
 Total Mexico Wireless Subscribers 23,843 22,636 5.3 % 
 
 Mexico Wireless Net Additions 
 Second Quarter 
 Six-Month Period 
 Percent Percent 
 (in 000s) 2025 2024 Change 2025 2024 Change 
 
 Postpaid 183 142 28.9 % 343 258 32.9 % 
 Prepaid 64 67 (4.5) (46) 146 — 
 Reseller (12) (32) 62.5 (30) (84) 64.3 
 Total Mexico Wireless Net Additions 235 177 32.8 % 267 320 (16.6) % 

 
 
 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. 
 
 
 35 

 AT&T INC. 
 JUNE 30, 2025 
 
 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations- Continued 
 Dollars in millions except per share amounts 
 
 

 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 
 
 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. 
 
 
 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 six months ended June 30, 
 2025 2024 
 Cash provided by operating activities 
 $ 18,812 $ 16,640 
 Cash used in investing activities 
 (11,044) (6,977) 
 Cash used in financing activities 
 (598) (13,293) 
 

 
 
 
 June 30, December 31, 
 2025 2024 
 Cash and cash equivalents 
 $ 10,499 $ 3,298 
 Total debt 
 132,311 123,532 

 
 
 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. Approximately $1,376 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 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 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 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. 
 
 
 36 

 AT&T INC. 
 JUNE 30, 2025
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
AT&T INC. 10-Q

Item 1. Financial Statements
