What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-09 compared with 2025-02-12 · 345 added, 379 removed, 1529 unchanged (32% of the section changed)

16 unchanged sentences

Total operating expenses 101,486 103,287 98,967

Operating Income (Loss) 19,049 23,461 ( 4,587 )

Operating Income

24,162 19,049 23,461

Other Income (Expense)

3 unchanged sentences

Total other income (expense) 2,845 ( 2,351 ) ( 3,613 )

Income (Loss) from Continuing Operations Before Income Taxes 16,698 19,848 ( 3,094 )

Income tax expense on continuing operations 4,445 4,225 3,780

Income (Loss) from Continuing Operations 12,253 15,623 ( 6,874 )

Loss from discontinued operations, net of tax — — ( 181 )

Net Income (Loss) 12,253 15,623 ( 7,055 )

Income Before Income Taxes

27,007 16,698 19,848

Income tax expense

3,621 4,445 4,225

23,386 12,253 15,623

Net Income Attributable to Noncontrolling Interest ( 1,433 ) ( 1,305 ) ( 1,223 )

Net Income (Loss) Attributable to AT&T $ 10,948 $ 14,400 $ ( 8,524 )

Preferred Stock Dividends ( 202 ) ( 208 ) ( 203 )

Net Income (Loss) Attributable to Common Stock $ 10,746 $ 14,192 $ ( 8,727 )

Basic Earnings (Loss) Per Share from continuing operations $ 1.49 $ 1.97 $ ( 1.10 )

Basic Loss Per Share from discontinued operations $ — $ — $ ( 0.03 )

Basic Earnings (Loss) Per Share Attributable to Common Stock $ 1.49 $ 1.97 $ ( 1.13 )

Diluted Earnings (Loss) Per Share from continuing operations $ 1.49 $ 1.97 $ ( 1.10 )

Diluted Loss Per Share from discontinued operations $ — $ — $ ( 0.03 )

Diluted Earnings (Loss) Per Share Attributable to Common Stock $ 1.49 $ 1.97 $ ( 1.13 )

Net Income Attributable to AT&T

$ 21,953 $ 10,948 $ 14,400

Preferred Stock Dividends and Redemption Gain

( 64 ) ( 202 ) ( 208 )

Net Income Attributable to Common Stock

$ 21,889 $ 10,746 $ 14,192

Basic Earnings Per Share Attributable to Common Stock

$ 3.04 $ 1.49 $ 1.97

Diluted Earnings Per Share Attributable to Common Stock

$ 3.04 $ 1.49 $ 1.97

The accompanying notes are an integral part of the consolidated financial statements.

2 unchanged sentences

2025 2024 2023

Net income (loss) $ 12,253 $ 15,623 $ ( 7,055 )

$ 23,386 $ 12,253 $ 15,623

Other comprehensive income (loss), net of tax:

2 unchanged sentences

354 ( 545 ) 463

Reclassification adjustment included in net income (loss), net of taxes of

Reclassification adjustment included in net income, net of taxes of

$ 0 , $( 14 ) and $ 0

Distributions of WarnerMedia, net of taxes of $ 0 , $ 0 and $( 38 )

Net unrealized gains (losses), net of taxes of $ 5 , $( 5 ) and $ 8

( 19 ) 22 ( 143 )

Reclassification adjustment included in net income (loss), net of taxes of $ 10 , $ 4

Reclassification adjustment included in net income, net of taxes of $ 1 , $ 10

Derivative Instruments:

1 unchanged sentence

( 650 ) 380 922

Reclassification adjustment included in net income (loss), net of taxes of $ 14 , $ 12

Distributions of WarnerMedia, net of taxes of $ 0 , $ 0 and $( 12 )

Reclassification adjustment included in net income, net of taxes of $ 14 , $ 14

Defined benefit postretirement plans:

Net prior service (cost) credit arising during period, net of taxes of $ 0 , $ 0

Amortization of net prior service credit included in net income (loss), net of taxes of

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

$( 457 ), $( 492 ) and $( 642 )

( 1,427 ) ( 1,523 ) ( 1,963 )

Distributions of WarnerMedia, net of taxes of $ 0 , $ 0 and $ 5

Reclassification adjustment realized in net income, net of taxes of $( 4 ), $ 0 and $ 0

Other comprehensive income (loss) ( 1,655 ) ( 1,505 ) ( 466 )

Total comprehensive income (loss) 10,748 15,157 ( 7,818 )

Total comprehensive income

21,731 10,748 15,157

Total comprehensive income attributable to noncontrolling interest ( 1,433 ) ( 1,305 ) ( 1,223 )

Total Comprehensive Income (Loss) Attributable to AT&T $ 9,443 $ 13,934 $ ( 9,287 )

Total Comprehensive Income Attributable to AT&T

$ 20,298 $ 9,443 $ 13,934

The accompanying notes are an integral part of the consolidated financial statements.

24 unchanged sentences

Deferred Credits and Other Noncurrent Liabilities

Deferred income taxes 58,939 58,666

Noncurrent deferred tax liabilities 58,312 58,939

Postemployment benefit obligation 8,478 9,025

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

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

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

20,000 issued and outstanding at December 31, 2024)

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

3 unchanged sentences

Additional paid-in capital 106,533 109,108

Retained earnings (deficit) 1,871 ( 5,015 )

Retained earnings 15,768 1,871

Treasury stock ( 583,246,242 at December 31, 2025 and 444,853,148 at December 31, 2024, at cost)

( 18,529 ) ( 15,023 )

Accumulated other comprehensive income 795 2,300

Accumulated other comprehensive income (loss) ( 860 ) 795

Noncontrolling interest 15,958 13,873

6 unchanged sentences

Operating Activities

Income (loss) from continuing operations $ 12,253 $ 15,623 $ ( 6,874 )

Adjustments to reconcile income (loss) from continuing operations to net cash provided by operating activities from continuing operations:

Net Income $ 23,386 $ 12,253 $ 15,623

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 20,886 20,580 18,777

Provision for uncollectible accounts 2,271 1,969 1,969

Deferred income tax expense 1,570 3,037 2,975

Net (gain) loss on investments, net of impairments 80 441 381

Asset impairments and abandonments and restructuring 838 5,075 1,193

Pension and postretirement benefit expense (credit) ( 1,588 ) ( 1,883 ) ( 2,552 )

Actuarial and settlement (gain) loss on pension and postretirement benefits – net

Net (gain) loss on investments

( 5,889 ) 80 441

Asset impairments and abandonments and restructuring 5,075 1,193 27,498

Changes in operating assets and liabilities:

Receivables ( 1,526 ) 123 82

Equipment installment receivables and related sales 324 ( 1,846 ) ( 133 )

Contract asset and cost deferral

( 1,208 ) 160 ( 1,006 )

Inventories, prepaid and other current assets ( 460 ) 70 747

Accounts payable and other accrued liabilities 884 ( 1,104 ) ( 1,574 )

Equipment installment receivables and related sales ( 1,846 ) ( 133 ) 154

Deferred customer contract acquisition and fulfillment costs 497 1 ( 947 )

Changes in income taxes

2,226 1,978 2,618

Postretirement claims and contributions ( 1,436 ) ( 166 ) ( 735 )

1 unchanged sentence

Total adjustments 16,898 26,518 22,691

Net Cash Provided by Operating Activities from Continuing Operations 38,771 38,314 35,812

Net Cash Provided by Operating Activities

40,284 38,771 38,314

Investing Activities

3 unchanged sentences

Distributions from DIRECTV in excess of cumulative equity in earnings — 928 2,049

(Purchases), sales and settlements of securities and investments – net

(Purchases), sales and settlements of securities – net

181 2,575 ( 902 )

Other – net ( 955 ) ( 425 ) ( 84 )

Net Cash Used in Investing Activities from Continuing Operations ( 17,490 ) ( 19,660 ) ( 26,899 )

Net Cash Used in Investing Activities

( 18,777 ) ( 17,490 ) ( 19,660 )

Financing Activities

5 unchanged sentences

Note payable to DIRECTV, net of payments

— ( 130 ) ( 1,211 )

Payment of vendor financing ( 1,181 ) ( 1,792 ) ( 5,742 )

Redemption of preferred stock ( 2,075 ) — —

Purchase of treasury stock ( 4,500 ) ( 215 ) ( 194 )

1 unchanged sentence

Issuance of preferred interests in subsidiary

2,221 — 7,151

Redemption of preferred interests in subsidiary

2 unchanged sentences

Other – net ( 1,126 ) ( 2,234 ) ( 2,270 )

Net Cash Used in Financing Activities from Continuing Operations

( 24,708 ) ( 15,614 ) ( 59,564 )

Net increase (decrease) in cash and cash equivalents and restricted cash from continuing operations ( 3,427 ) 3,040 ( 50,651 )

Cash flows from Discontinued Operations:

Cash used in operating activities

Net Cash Used in Financing Activities

( 6,386 ) ( 24,708 ) ( 15,614 )

Cash provided by investing activities

Cash provided by financing activities

Net increase in cash and cash equivalents and restricted cash from discontinued operations

Net increase (decrease) in cash and cash equivalents and restricted cash

20 unchanged sentences

Balance at beginning of year $ 109,108 $ 114,519 $ 123,610

Distribution of WarnerMedia — — ( 6,832 )

Redemption of preferred stock

( 2,165 ) — —

Preferred stock dividends

4 unchanged sentences

Issuance of treasury stock ( 469 ) ( 516 ) ( 379 )

Share-based payments ( 184 ) ( 109 ) ( 162 )

Share-based compensation

59 ( 184 ) ( 109 )

Redemption or reclassification of

4 unchanged sentences

Balance at beginning of year $ 1,871 $ ( 5,015 ) $ ( 19,415 )

Net income (loss) attributable to AT&T 10,948 14,400 ( 8,524 )

Distribution of WarnerMedia — — ( 45,041 )

Net income attributable to AT&T

21,953 10,948 14,400

Preferred stock redemption gain

Preferred stock dividends ( 194 ) ( 71 ) —

14 unchanged sentences

( 168 ) ( 4,539 ) ( 12 ) ( 215 ) ( 10 ) ( 194 )

Issuance of treasury stock 38 1,320 32 1,148 31 1,088

Reissuance of treasury stock

30 1,033 38 1,320 32 1,148

Balance at end of year ( 583 ) $ ( 18,529 ) ( 445 ) $ ( 15,023 ) ( 471 ) $ ( 16,128 )

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income (Loss)

Attributable to AT&T, net of tax

13 unchanged sentences

Redemption of noncontrolling interest ( 144 ) ( 76 ) ( 53 )

Reclassification of noncontrolling

— — ( 5,997 )

Distributions ( 1,268 ) ( 1,330 ) ( 1,085 )

13 unchanged sentences

AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications and technology industries.

On April 8, 2022, we completed the separation of our WarnerMedia business, which represented substantially all of our WarnerMedia segment, in a Reverse Morris Trust transaction, under which Magallanes, Inc.

(Spinco), a formerly wholly-owned subsidiary of AT&T that held the WarnerMedia business, was distributed to AT&T stockholders via a pro rata dividend, followed by the combination of Spinco with a subsidiary of Discovery, Inc.

(Discovery), which was renamed Warner Bros.

Discovery, Inc.

Upon the separation and distribution, the WarnerMedia business met the criteria for discontinued operations.

For discontinued operations, we also evaluated transactions that were components of AT&T’s single plan of a strategic shift, including dispositions that previously did not individually meet the criteria due to materiality, and have determined discontinued operations to be comprised of WarnerMedia, Vrio, Xandr and Playdemic Ltd.

These businesses are reflected in the accompanying financial statements as discontinued operations, including for periods prior to the consummation of the WarnerMedia/Discovery Transaction.

(See Notes 6 and 24)

All significant intercompany transactions are eliminated in the consolidation process.

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

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

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.

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

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Moreover, unfavorable changes in market conditions, including interest rates, could adversely impact those estimates and result in asset impairments.

Certain prior-period amounts have been conformed to the current period’s presentation.

Unless otherwise noted, the information in Notes 1 through 23 refer only to our continuing operations and do not include discussion of balances or activity of WarnerMedia, Vrio, Xandr and Playdemic, which are part of discontinued operations.

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.

Adopted and New Accounting Standards

Segment Reporting In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

Income Taxes In December 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (ASU 2023-09).

Beginning with our 2025 annual reporting, we adopted, through retrospective application, ASU 2023-09, which requires that a public entity disclose specific categories in its annual income tax rate reconciliation table and provide additional qualitative information for reconciling items representing at least 5% of pre-tax income or loss from continuing operations, using the federal statutory tax rate.

The standard also requires an annual breakdown of income taxes paid by jurisdiction (i.e., federal, state and foreign), with further disaggregation by jurisdictions representing at least 5% of total income taxes paid.

Segment Reporting In November 2023, the FASB issued ASU No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (ASU 2023-07).

Beginning with our 2024 annual reporting, we adopted, through retrospective application, ASU No.

2023-07 , which requires that a public entity disclose, on an interim and annual basis, significant segment expense categories and amounts that are regularly provided to its chief operating decision maker (CODM) and included in each reported measure of segment profit or loss.

Beginning with our 2024 annual reporting, we adopted, through retrospective application, ASU 2023-07 , which requires that a public entity disclose, on an interim and annual basis, significant segment expense categories and amounts that are regularly provided to its chief operating decision maker (CODM) and included in each reported measure of segment profit or loss.

An entity must also disclose, by reportable segment, the amount and composition of other expenses.

5 unchanged sentences

Prior to the April 2023 repurchase, settlement of our Series A Cumulative Perpetual Membership Interests in AT&T Mobility II LLC (Mobility preferred interests) could have resulted in additional dilutive impact, the magnitude of which was influenced by the fair value of the Mobility preferred interests and the average AT&T common stock price during the reporting period, which varied from period-to-period (see Note 16).

Dollars in millions except per share amounts

Income Taxes In December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (ASU 2023-09), which requires that a public entity disclose specific categories in its annual income tax rate reconciliation table and provide additional qualitative information for reconciling items representing at least 5% of pre-tax income or loss from continuing operations, using the federal statutory tax rate.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with prospective application.

Disaggregation of Income Statement Expenses In November 2024, the FASB issued ASU No.

1 unchanged sentence

Disaggregation of Income Statement Expenses” (ASU 2024-03), which requires that a public entity disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation and (d) intangible asset amortization included in each relevant expense caption presented on the face of the income statement.

The standard also requires an entity to disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively as well as disclose the total amount of selling expenses and, annually, the entity’s definition of selling expenses.

Dollars in millions except per share amounts

amount of selling expenses and, annually, the entity’s definition of selling expenses.

ASU 2024-03 will be effective for annual periods beginning after December 15, 2026, with either retrospective or prospective application.

1 unchanged sentence

we are currently evaluating the disclosure impacts of our adoption.

Internal-Use Software In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06).

ASU 2025-06 removes references to prescriptive and sequential software development stages and requires software cost capitalization when management has authorized and committed to funding, and it is probable that the project will be completed, and the software used for its intended function.

ASU 2025-06 will be effective for annual reporting periods beginning after December 15, 2027.

We are evaluating the impacts of our adoption of ASU 2025-06 and currently do not expect that it will have a material impact on our financial statements.

Accounting Policies

2 unchanged sentences

We review these items regularly in light of changes in federal, state and foreign tax laws and changes in our business.

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.

As a result of the legislation, we reduced our taxable income position in 2025.

The legislation did not materially impact our income tax expense, but we expect it will result in a material decrease to cash taxes paid relative to our expectations.

(See Note 13)

Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities of three months or less.

31 unchanged sentences

Wireless licenses provide us with the exclusive right to utilize certain radio frequency spectrum to provide wireless communications services.

While wireless licenses are issued for a fixed period of time (generally ten years ), renewals of domestic wireless licenses have occurred routinely and at nominal cost.

While wireless licenses are issued for a fixed period of time (generally 10 years), renewals of domestic wireless licenses have occurred routinely and at nominal cost.

We have determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful lives of our FCC wireless licenses.

5 unchanged sentences

Goodwill, FCC wireless licenses and other indefinite-lived intangible assets are not amortized but are tested at least annually for impairment (see Note 9).

The testing is performed on the value as of October 1 each year and compares the book values of the assets to their fair values.

The testing for Goodwill and other indefinite-lived intangible assets is performed on the value as of October 1 each year and compares the book values of the assets to their fair values.

Goodwill is tested by comparing the carrying amount of each reporting unit, deemed to be our principal operating segments or one level below them, to the fair value using both discounted cash flow as well as market multiple approaches.

FCC wireless licenses are tested on an aggregate basis, consistent with our use of the licenses on a national scope, using a discounted cash flow approach.

Trade names are tested by comparing their book values to their fair values calculated using a discounted cash flow approach on a presumed royalty rate derived from the revenues related to each brand name.

For FCC wireless licenses, we have the option to first perform a qualitative assessment to determine whether it is more likely than not that the book value exceeds their fair value.

We consider several factors under the qualitative assessment, including macroeconomic conditions, industry and regulatory considerations, recent and projected performance of the business and the prior quantitative impairment testing results.

On a periodic basis, or if the qualitative assessment indicates potential impairment, we perform a quantitative impairment test on the value as of October 1.

FCC wireless licenses are tested on an aggregate basis, consistent with our use of the licenses on a national scope, using a discounted cash flow approach.

We last performed a quantitative test in 2024.

Intangible assets that have finite useful lives are amortized over their estimated economic lives (see Note 9).

8 unchanged sentences

The resulting foreign currency translation adjustments are recorded as a separate component of accumulated OCI on our consolidated balance sheets (see Note 3).

Pension and Other Postretirement Benefits See Note 14 for a comprehensive discussion of our pension and postretirement benefits, including a discussion of the actuarial assumptions, our policy for recognizing the associated gains and losses and our method used to estimate service and interest cost components.

Dollars in millions except per share amounts

EARNINGS PER SHARE

2 unchanged sentences

Numerator for basic earnings per share:

Income (loss) from continuing operations, net of tax $ 12,253 $ 15,623 $ ( 6,874 )

Net income from continuing operations attributable to

noncontrolling interests

( 1,305 ) ( 1,223 ) ( 1,469 )

Preferred Stock Dividends ( 202 ) ( 208 ) ( 203 )

Income (loss) from continuing operations attributable to

10,746 14,192 ( 8,546 )

Adjustment to carrying value of noncontrolling interest — — 663

Numerator for basic earnings per share from continuing operations 1

10,746 14,192 ( 7,883 )

Loss from discontinued operations attributable to common stock

Numerator for basic earnings per share 1

Net Income Attributable to Common Stock

$ 21,889 $ 10,746 $ 14,192

1 unchanged sentence

Mobility preferred interests

Share-based payment 2

Share-based compensation

Numerator for diluted earnings per share $ 21,901 $ 10,746 $ 14,277

4 unchanged sentences

Mobility preferred interests (in shares) — — 71

Share-based payment (in shares) 5 6 43

Share-based compensation (in shares)

Denominator for diluted earnings per share

7,179 7,204 7,258

1 For 2022, in the calculation of basic earnings per share, income (loss) attributable to common stock for continuing operations and total company has been increased by $ 663 from adjustment to carrying value of noncontrolling interest.

(See Note 16)

2 For 2022, dilutive potential common shares are not included in the computation of diluted earnings per share because their effect is antidilutive as a result of the net loss.

On April 5, 2023, we repurchased all of our Mobility preferred interests (see Note 16).

19 unchanged sentences

— 1 11 1 47 2 ( 1,963 ) 3 ( 1,905 )

Distribution of WarnerMedia ( 182 ) — ( 24 ) 25 ( 181 )

Net other comprehensive

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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 under transition service agreements.

• 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.

With the sale of our remaining interest in DIRECTV, we will no longer report these costs in 2026 (see Note 10).

• Parent administration support , which includes costs borne by AT&T where the business units do not influence decision making.

12 unchanged sentences

Total Communications 120,896 73,010 19,959 27,927

Latin America – Mexico

Latin America

4,379 3,563 671 145

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Total Communications 117,652 71,124 19,433 27,095

Latin America – Mexico

Latin America

4,232 3,535 657 40

18 unchanged sentences

Total Communications 118,038 72,874 17,363 27,801

Latin America – Mexico

Latin America

3,932 3,349 724 ( 141 )

10 unchanged sentences

Dollars in millions except per share amounts

The following table is a reconciliation of Segment Operating Income to “Income (Loss) from Continuing Operations Before Income Taxes” reported in our consolidated statements of income:

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

For the years ended December 31,

5 unchanged sentences

Corporate ( 2,559 ) ( 2,902 ) ( 2,961 )

Transaction and other costs ( 123 ) ( 98 ) ( 425 )

Transaction, legal and other costs

( 627 ) ( 123 ) ( 98 )

Amortization of intangibles acquired ( 38 ) ( 53 ) ( 76 )

1 unchanged sentence

Benefit-related gains (losses) 152 67 129

AT&T Operating Income (Loss) 19,049 23,461 ( 4,587 )

AT&T Operating Income

24,162 19,049 23,461

Interest expense

2 unchanged sentences

Other income (expense) – net 7,754 2,419 1,416

Income (Loss) from Continuing Operations Before Income Taxes $ 16,698 $ 19,848 $ ( 3,094 )

Income Before Income Taxes

$ 27,007 $ 16,698 $ 19,848

The following table sets forth revenues earned from customers, and property, plant and equipment located in different geographic areas:

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No customer accounted for more than 10% of consolidated revenues in 2025, 2024 or 2023.

Wireless, Advanced Data, Legacy Voice & Data Services and Equipment Revenue

We offer service-only contracts and contracts that bundle equipment used to access the services and/or with other service offerings.

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Wireless service $ 67,384 $ — $ — $ 2,715 $ — $ 70,099

Business service — 18,064 — — — 18,064

Broadband — — 11,212 — — 11,212

Legacy voice and data — — 1,265 — 253 1,518

Fiber and advanced connectivity 1

— 7,333 8,645 — — 15,978

Non-fiber consumer broadband

— — 3,542 — — 3,542

Legacy and other transitional

— 9,170 1,013 — 179 10,362

Other — — 983 — 194 1,177

2 unchanged sentences

Total $ 89,482 $ 17,231 $ 14,183 $ 4,379 $ 373 $ 125,648

1 Advanced connectivity services reported in Business Wireline.

For the year ended December 31, 2024

2 unchanged sentences

Wireless service $ 65,373 $ — $ — $ 2,668 $ — $ 68,041

Business service — 20,274 — — — 20,274

Broadband — — 10,455 — — 10,455

Legacy voice and data — — 1,508 — 294 1,802

Fiber and advanced connectivity 1

— 6,969 7,391 — — 14,360

Non-fiber consumer broadband

— — 3,821 — — 3,821

Legacy and other transitional

— 11,095 1,265 — 253 12,613

Other — — 1,101 — 199 1,300

2 unchanged sentences

Total $ 85,255 $ 18,819 $ 13,578 $ 4,232 $ 452 $ 122,336

1 Advanced connectivity services reported in Business Wireline.

For the year ended December 31, 2023

2 unchanged sentences

Wireless service $ 63,175 $ — $ — $ 2,569 $ — $ 65,744

Business service — 21,891 — — — 21,891

Broadband — — 9,669 — — 9,669

Legacy voice and data — — 1,746 — 323 2,069

Fiber and advanced connectivity 1

— 6,594 6,267 — — 12,861

Non-fiber consumer broadband

— — 4,188 — — 4,188

Legacy and other transitional

— 13,680 1,508 — 294 15,482

Other — — 1,210 — 164 1,374

2 unchanged sentences

Total $ 83,982 $ 20,883 $ 13,173 $ 3,932 $ 458 $ 122,428

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 .

During the first quarter of 2022, we updated our analysis of expected economic lives of customer relationships.

As of January 1, 2022, we extended the amortization period for deferred acquisition and fulfillment contract costs within Mobility, Business Wireline and Consumer Wireline to better reflect the estimated economic lives of the relationships.

These changes in

Dollars in millions except per share amounts

accounting estimate decreased “Other cost of revenues” approximately $ 395 , or $ 0.04 per diluted share from continuing operations for the year ended December 31, 2022.

The following table presents the deferred customer contract acquisition and fulfillment costs included on our consolidated balance sheets at December 31:

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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,

Dollars in millions except per share amounts

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.

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 December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 40,914 , of which we expect to recognize approximately 85 % by the end of 2026, with the balance recognized thereafter.

As of December 31,

Dollars in millions except per share amounts

2025, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 43,989 , of which we expect to recognize approximately 88 % by the end of 2027, with the balance recognized thereafter.

ACQUISITIONS, DISPOSITIONS AND OTHER ADJUSTMENTS

Spectrum Auctions On January 14, 2022, the Federal Communications Commission (FCC) announced that we were the winning bidder for 1,624 3.45 GHz licenses in Auction 110.

We provided the FCC an upfront deposit of $ 123 in the third quarter of 2021 and paid the remaining $ 8,956 in the first quarter of 2022, for a total of $ 9,079 .

We funded the purchase price using cash and short-term investments.

We received the licenses in May 2022 and classified the auction deposits and related capitalized interest as “Licenses – Net” on our December 31, 2022 consolidated balance sheet.

In February 2021, the FCC announced that AT&T was the winning bidder for 1,621 C-Band licenses, comprised of a total of 80 MHz nationwide, including 40 MHz in Phase I.

We provided to the FCC an upfront deposit of $ 550 in 2020 and cash payments totaling $ 22,856 in the first quarter of 2021, for a total of $ 23,406 .

Spectrum Auctions In February 2021, the FCC announced that AT&T was the winning bidder for 1,621 C-Band licenses, comprised of a total of 80 MHz nationwide, including 40 MHz in Phase I.

We received the licenses in July 2021 and classified the auction deposits, related capitalized interest and billed relocation costs as “Licenses – Net” on our December 31, 2021 consolidated balance sheet.

In December 2021, we paid $ 955 of Incentive Payments upon clearing of Phase I spectrum and paid $ 2,112 upon clearing of Phase II spectrum in 2023.

Additionally, we are responsible for approximately $ 1,100 of compensable relocation costs over the next several years as the spectrum is being cleared by satellite operators, of which we paid $ 650 in 2021, $ 98 in 2022, $ 109 in 2023 and $ 138 in 2024.

Funding for the purchase price of the spectrum included a combination of cash on hand and short-term investments, as well as short- and long-term debt.

Dispositions Reflected as Discontinued Operations

WarnerMedia On April 8, 2022, we completed the separation and distribution of our WarnerMedia business, and merger of Spinco, an AT&T subsidiary formed to hold the WarnerMedia business, with a subsidiary of Discovery, Inc., which was renamed Warner Bros.

Discovery, Inc (WBD).

Each AT&T shareholder was entitled to receive 0.241917 shares of WBD common stock for each share of AT&T common stock held as of the record date , which represented approximately 71 % of WBD.

In connection with and in accordance with the terms of the Separation and Distribution Agreement (SDA), prior to the distribution and merger, AT&T received approximately $ 40,400 , which includes $ 38,800 of Spinco cash and $ 1,600 of debt retained by WarnerMedia.

During the second quarter of 2022, $ 45,041 of retained earnings and $ 5,632 of additional paid-in capital associated with the transaction were removed from our balance sheet.

Additionally, in August 2022, we and WBD finalized the post-closing adjustment, pursuant to Section 1.3 of the SDA, which resulted in a $ 1,200 payment to WBD in the third quarter of 2022 and was reflected in the balance sheet as an adjustment to additional paid-in capital.

(See Note 24)

Xandr On June 6, 2022, we completed the sale of the marketplace component of Xandr to Microsoft Corporation.

Xandr was reflected in our historical financial statements as discontinued operations.

Dollars in millions except per share amounts

Pending Acquisitions

Spectrum On August 25, 2025, we agreed to purchase FCC licenses in the 600 MHz and 3.45 GHz bands from EchoStar Corporation for approximately $ 23,000 , subject to certain adjustments.

The transaction is expected to close in early 2026 and is subject to regulatory approval and other closing conditions.

The FCC licenses will be used to expand our 5G network, meet future capacity demands and support future wireless communications services.

We signed a short-term spectrum manager lease on the 3.45 GHz spectrum, which was deployed in cell sites covering nearly two-thirds of the U.S.

Fiber 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 one million fiber customers, and also included fiber network assets that reached more than four million fiber locations.

On February 2, 2026, we completed the transaction and expect to manage the customer relationships in our Consumer Wireline business and place the fiber network assets in a new, wholly owned subsidiary.

We plan to sell a controlling interest in the subsidiary to an equity partner that will co-invest in the ongoing business, and, as such, it is expected to meet the criteria for discontinued operations.

PROPERTY, PLANT AND EQUIPMENT

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Depreciation expense included amortization of software totaling $ 3,209 in 2025, $ 3,076 in 2024 and $ 3,023 in 2023.

In December 2022, we recorded a noncash pre-tax charge of $ 1,413 to abandon conduits that will not be utilized to support future network activity.

The abandonment was considered outside the ordinary course of business.

During the first quarter of 2022, we updated our analysis of economic lives of AT&T-owned fiber network assets.

As of January 1, 2022, we extended the estimated economic life and depreciation period of such costs to better reflect the physical life of the assets that we had been experiencing and absence of technological changes that would replace fiber as the best broadband technology in the industry.

The change in accounting estimate decreased depreciation expense $ 280 , or $ 0.03 per diluted share from continuing operations for the year ended December 31, 2022.

In conjunction with the decommissioning of our copper-based legacy network, we retired approximately $ 16,600 of fully depreciated assets that were no longer in use.

These assets were primarily related to our network and central offices.

We have operating and finance leases for certain facilities and equipment used in our operations.

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We have recognized a right-of-use asset for both operating and finance leases, and a corresponding lease liability that represents the present value of our obligation to make payments over the lease term.

The present value of the lease payments is calculated using the incremental borrowing rate for operating and finance leases, which was determined using a portfolio approach based on the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

The present value of the lease payments is calculated using the incremental borrowing rate for operating and finance leases, which was determined using a portfolio approach based

Dollars in millions except per share amounts

on the rate of interest that we would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term.

We use the unsecured borrowing rate and risk-adjust that rate to approximate a collateralized rate in the currency of the lease, which will be updated on a quarterly basis for measurement of new lease liabilities.

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Total finance lease cost $ 324 $ 376 $ 416

Dollars in millions except per share amounts

The following table provides supplemental cash flows information related to leases:

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The following table provides the expected future minimum maturities of lease obligations:

At December 31, 2024 Operating Leases Finance

At December 31, 2025

Operating Leases Finance

2026 $ 4,956 $ 309

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GOODWILL AND OTHER INTANGIBLE ASSETS

We test goodwill for impairment at a reporting unit level, which is deemed to be our principal operating segments or one level below.

We test goodwill for impairment at a reporting unit level, which is deemed to be our principal operating segments or one level below, using the methodology described in Note 1.

With our annual impairment testing as of October 1, the calculated fair value of each reporting unit exceeded its book value.

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

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

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

The interim impairment test methodology was consistent with our approach for annual impairment testing (see Note 1), using similar models updated with our current view of key inputs and assumptions.

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

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

In 2022, we recorded noncash impairment charges of $ 13,478 in our Business Wireline reporting unit, $ 10,508 in our Consumer Wireline reporting unit and the entire $ 826 in our Mexico reporting unit.

The decline in fair values was primarily due to changes in the macroeconomic environment, namely increased weighted-average cost of capital.

Also, inflation pressure and lower projected cash flows driven by secular declines, predominantly at Business Wireline, impacted the fair values.

Changes to our goodwill in 2024 resulted from the noncash impairment discussed above.

Changes to our goodwill in 2023 resulted from goodwill attributed to assets contributed to the formation of strategic joint ventures.

Changes to our goodwill in 2024 resulted from a third-quarter noncash goodwill impairment charge of $ 4,422 in our consolidated statements of income, which represented the entirety of our Business Wireline reporting unit goodwill.

The decline in fair value was primarily due to the change in the long-term strategic plan of our Business Wireline reporting unit, which reflected lower long-term projected future cash flows associated with the industry-wide secular decline, including a faster-than-previously anticipated decline of legacy services.

Our Communications segment has three reporting units:

Mobility, Consumer Wireline and Business Wireline.

Business Wireline goodwill was fully impaired in the third quarter of 2024.

Business Wireline goodwill was fully impaired in 2024.

The reporting unit is deemed to be the operating segment for Latin America and its goodwill was fully impaired in 2022.

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The following table sets forth the changes in the carrying amounts of goodwill for the Communications segment:

1 Impairment Balance at

31 Balance at

1 Dispositions

and other Balance at

31 Balance at

Communications

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We review amortizing intangible assets for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable over the remaining life of the asset or asset group.

Dollars in millions except per share amounts

Indefinite-lived wireless licenses increased in 2024 primarily due to compensable relocation and incentive payments and $ 199 of capitalized interest.

Indefinite-lived wireless licenses increased in 2023 primarily due to compensable relocation and incentive payments and $ 695 of capitalized interest.

In 2025, we performed a qualitative impairment assessment, which indicated it was more likely than not that the fair value of our FCC wireless licenses exceeded the book value and did not result in an impairment.

In 2024, we performed a quantitative impairment assessment, which reflected the fair value of our FCC wireless licenses exceeded their book value.

FCC wireless licenses increased in 2025 primarily due to spectrum acquisitions and capitalized interest.

FCC wireless licenses increased in 2024 primarily due to compensable relocation and incentive payments and $ 199 of capitalized interest.

(See Notes 6 and 23)

Dollars in millions except per share amounts

Our other intangible assets at December 31 are summarized as follows:

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relationships

10.0 years 349 275 ( 74 ) 379 286 ( 74 )

N/A — — — 349 275 ( 74 )

Trademarks, trade names

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Investments in partnerships, joint ventures and less than majority-owned subsidiaries in which we have significant influence are accounted for under the equity method.

Our investments in equity affiliates at December 31, 2024, primarily included our interests in DIRECTV and Gigapower.

DIRECTV We account for our investment in DIRECTV under the equity method of accounting.

DIRECTV is considered a variable interest entity for accounting purposes.

As DIRECTV is jointly governed by a board with representation from both AT&T and TPG Capital (TPG), with TPG having tie-breaking authority on certain key decisions, most significantly the appointment and removal of the CEO, we have concluded that we are not the primary beneficiary of DIRECTV.

The initial fair value of the equity considerations at the date of acquisition was $ 6,852 , which was determined using a discounted cash flow model reflecting distribution rights and preference of the individual instruments.

The ownership interests in DIRECTV, based on seniority, are as follows:

• Preferred units with distribution rights of $ 1,800 held by TPG, which have been fully distributed.

• Junior preferred units with distribution rights of $ 4,250 held by AT&T, which were fully distributed as of December 31, 2023.

• Distribution preference associated with Common units of $ 4,200 held by AT&T, of which $ 1,370 of distribution rights remain as of December 31, 2024.

• Common units, with 70 % held by AT&T and 30 % held by TPG.

On September 29, 2024, we agreed to sell our interest in DIRECTV to TPG for approximately $ 7,600 in cash payments through 2029, inclusive of third-quarter and fourth-quarter 2024 combined distributions of $ 1,695 .

In addition to quarterly distributions through 2025, including payout of common catch-up units, this consideration includes notes payable to AT&T of approximately

Our investments in equity affiliates at December 31, 2025, primarily included our interests in DriveNets and Gigapower.

On July 2, 2025, we sold our interest in DIRECTV to TPG Capital (TPG).

DIRECTV Prior to its sale, we accounted for our investment in DIRECTV under the equity method of accounting.

DIRECTV was considered a VIE for accounting purposes.

As DIRECTV was jointly governed by a board with representation from both AT&T and TPG, with TPG having tie-breaking authority on certain key decisions, most significantly the appointment and removal of the CEO, we concluded that we were not the primary beneficiary of DIRECTV.

Our ownership interest in DIRECTV included $ 4,250 of junior preferred interests, an additional distribution preference of $ 4,200 and a 70 % economic interest in common units.

In third-quarter 2024, our investment in DIRECTV was reduced to zero on our consolidated balance sheet, as a result of aggregate cash receipts exceeding our initial investment balance plus our cumulative equity in DIRECTV earnings.

As we were not committed, implicitly or explicitly, to provide financial or other support to DIRECTV, we recorded cash distributions 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.

Prior to sale, during 2025, 2024 and 2023, we recognized $ 1,926 , $ 2,027 and $ 1,666 of equity in net income of affiliates and received total distributions of $ 1,926 , $ 2,955 and $ 3,715 , respectively, from DIRECTV.

The book value of our investment in DIRECTV was $ 0 at December 31, 2025 and 2024.

Upon the sale of our interests in DIRECTV in July 2025, we recorded a current note receivable of approximately $ 3,600 and a long-term receivable of $ 500 .

The disposition of DIRECTV also resulted in the release of approximately $ 2,900 of historical deferred tax liabilities.

We recorded a gain on the sale of DIRECTV of approximately $ 5,600 , which includes the impact of the transfer of deferred tax liabilities, indemnification liabilities and unfavorable contracts, in “Other income (expense) – net” in the

Dollars in millions except per share amounts

$ 2,550 and a dividend of $ 1,150 .

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

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

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 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.

During 2024, 2023 and 2022, we recognized $ 2,027 , $ 1,666 and $ 1,808 of equity in net income of affiliates and received total distributions of $ 2,955 , $ 3,715 and $ 4,457 , respectively, from DIRECTV.

The book value of our investment in DIRECTV was $ 0 and $ 877 at December 31, 2024 and 2023.

Our share of net income or loss may differ from the stated ownership percentage interest of DIRECTV as the terms of the arrangement prescribe substantive non-proportionate cash distributions, both from operations and in liquidation, that are based on classes of interests held by investors.

In the event that DIRECTV records a loss, that loss will be allocated to ownership interests based on their seniority, beginning with the most subordinated interests.

Gigapower On May 11, 2023, we closed our transaction with BlackRock, through a fund managed by its Diversified Infrastructure business, related to Gigapower, LLC (Gigapower).

We hold a 50 % interest in this joint venture, which provides a fiber network in select areas to internet service providers and other businesses across the U.S.

We deconsolidated Gigapower’s operations and began accounting for it as an equity method investment on May 12, 2023.

consolidated statements of income in 2025.

As of December 31, 2025, we have received $ 3,100 of cash on the current note receivable, which was included in “Dispositions” in the consolidated statements of cash flows.

DriveNets We hold a 16.6 % interest in DriveNets, which designs and builds high-scale networking solutions for service providers and AI infrastructures.

Gigapower We hold a 50 % interest in our joint venture Gigapower, LLC (Gigapower), which provides a fiber network in select areas to internet service providers and other businesses across the United States.

SKY Mexico In June 2024, we sold our 41.3 % interest in SKY Mexico, a leading pay-TV provider in Mexico.

The following table presents summarized financial information for DIRECTV and our other equity method investments, consisting primarily of Gigapower, SKY Mexico (prior to disposition) and certain sports-related programming investments, at December 31, or for the year then ended:

2024 2023 2022

Income Statements 1,2

Operating revenues $ 20,003 $ 22,938 $ 25,794

Operating income 2,343 2,873 3,175

Net income 1,811 2,393 2,581

Balance Sheets 2

Current assets 2,857 3,058

Noncurrent assets 9,496 12,203

Current liabilities 5,312 5,148

Noncurrent liabilities 7,389 8,193

1 Does not include Gigapower for periods prior to May 2023.

2 Does not include SKY Mexico after disposition in June 2024.

The following table is a reconciliation of our investments in equity affiliates as presented on our consolidated balance sheets:

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Impairments — ( 155 )

Currency translation adjustments — 61

Other adjustments 34 54

End of year $ 1,106 $ 295

Dollars in millions except per share amounts

Long-term debt of AT&T and its subsidiaries, including interest rates and maturities, is summarized as follows at December 31:

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1 Foreign debt includes the impact from hedges, when applicable.

We had outstanding Euro, British pound sterling, Canadian dollar, Swiss franc and Australian dollar denominated debt of approximately $ 30,685 and $ 35,192 at December 31, 2024 and 2023, respectively.

The weighted-average interest rate of our long-term debt portfolio, including credit agreement borrowings and the impact of derivatives, was approximately 4.2 % as of December 31, 2024 and as of December 31, 2023.

Debt maturing within one year consisted of the following at December 31:

Current maturities of long-term debt $ 5,089 $ 7,386

Commercial paper — 2,091

Total $ 5,089 $ 9,477

The weighted average interest rate on our outstanding short-term borrowings, comprised solely of commercial paper, was approximately 6.0 % as of December 31, 2023.

We had outstanding Euro, British pound sterling, Canadian dollar, Australian dollar and Swiss franc denominated debt of approximately $ 35,307 and $ 30,685 at December 31, 2025 and 2024, respectively.

The weighted-average interest rate of our long-term debt portfolio, including credit agreement borrowings and the impact of derivatives, was approximately 4.2 % as of December 31, 2025 and 2024.

Our long-term debt maturing within one year was $ 9,011 and $ 5,089 at December 31, 2025 and 2024, respectively.

We had no outstanding commercial paper or other short-term borrowings as of December 31, 2025 and 2024.

Dollars in millions except per share amounts

Financing Activities

During 2024, we repaid $ 10,112 of long-term debt and credit agreement borrowings with a weighted average interest rate of 4.1 %.

During 2025, we received net proceeds of $ 14,027 on the issuance of $ 14,111 in long-term debt, with an average weighted maturity of approximately 12.3 years and a weighted average interest rate of 5.0 %.

We repaid $ 5,399 of long-term debt with a weighted average interest rate of 4.7 %.

Our debt activity during 2025 primarily consisted of the following:

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Quarter Full Year 2025

Net commercial paper borrowings $ 428 $ 262 $ ( 2,686 ) $ — $ ( 1,996 )

Issuance of notes and debentures:

$ — $ 3,473 $ 4,959 $ — $ 8,432

2,956 — 2,639 — 5,595

CAD notes — ( 442 ) — — ( 442 )

Debt issuances

$ 2,956 $ 3,473 $ 7,598 $ — $ 14,027

$ — $ — $ — $ ( 145 ) $ ( 145 )

( 1,321 ) ( 32 ) — ( 2,441 ) ( 3,794 )

CAD notes — — — ( 960 ) ( 960 )

Other ( 205 ) ( 62 ) ( 229 ) ( 133 ) ( 629 )

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2 Includes credit agreement borrowings.

On February 5, 2026, we issued $ 6,500 principal amount of global notes due 2031 to 2056 with a weighted average coupon of 5.2 %.

We intend to use the net proceeds from this issuance for general corporate purposes, which may include debt repayments and pending acquisitions.

Credit Facilities

In November 2022, we entered into and drew on a $ 2,500 term loan agreement due February 16, 2025 (Term Loan), with Mizuho Bank, Ltd., as agent.

On March 30, 2023, the $ 2,500 Term Loan was paid off and terminated.

On November 3, 2025, we entered into (i) a $ 12,000 Second Amended and Restated Credit Agreement (Revolving Credit Agreement), with Citibank, N.A., as agent, amending and restating our existing $ 12,000 Amended and Restated Credit Agreement, dated as of November 18, 2022, and (ii) a $ 17,500 Delayed Draw Term Loan Credit Agreement (Term Loan), with Bank of America, N.A., as agent.

No amount was outstanding under either the Revolving Credit Agreement or the Term Loan as of December 31, 2025.

The Revolving Credit Agreement and the Term Loan contain covenants that are customary for an issuer with investment grade senior debt credit ratings, including a net debt-to-EBITDA financial ratio covenant requiring us to maintain, as of the last day of each fiscal quarter, a ratio of not more than 3.75 to 1.

The events of default under the Revolving Credit Agreement and the Term Loan are customary for agreements of this type and such events would result in the acceleration of, or permit the requisite lenders to accelerate, as applicable, required payments under the relevant agreement and could increase the applicable margin under the relevant agreement by 2.00 % per annum.

Revolving Credit Agreement

We currently have a $ 12,000 revolving credit agreement that terminates on November 18, 2029 (Revolving Credit Agreement), for which we extended the termination date, pursuant to the terms of the agreement, by one year in November 2024.

No amount was outstanding under the Revolving Credit Agreement as of December 31, 2024.

Our Revolving Credit Agreement contains covenants that are customary for an issuer with investment grade senior debt credit rating as well as a net debt-to-EBITDA financial ratio covenant requiring AT&T to maintain, as of the last day of each fiscal quarter, a ratio of not more than 3.75 -to-1.

The events of default are customary for agreements of this type and such events would result in the acceleration of, or would permit the lenders to accelerate, as applicable, required payments and would increase each agreement’s relevant Applicable Margin by 2.00 % per annum.

The obligations of the lenders under the Revolving Credit Agreement to provide advances will terminate on November 18, 2029, unless the commitments are terminated in whole prior to that date.

All advances must be repaid no later than the date on which lenders are no longer obligated to make any advances under the Revolving Credit Agreement.

The Revolving Credit Agreement provides that we have the right to terminate, in whole or in part, amounts committed by the lenders under the credit agreement in excess of any outstanding advances;

however, any such terminated commitments may not be reinstated.

Dollars in millions except per share amounts

Advances under the Revolving Credit Agreement would bear interest, at our option, either:

Advances under the Revolving Credit Agreement denominated in U.S.

dollars will bear interest, at our option, either:

• at a variable annual rate equal to:

(1) the highest of (but not less than zero) (a) the rate of interest announced publicly by Citibank in New York, New York, from time to time, as Citibank’s base rate, (b) 0.5 % per annum above the federal funds rate, and (c) the forward-looking term rate based on the secured overnight financing rate (Term SOFR) for a period of one month plus a credit spread adjustment of 0.10 % plus 1.00 %, plus (2) an applicable margin, as set forth in the credit agreement (the “Applicable Margin for Base Advances”);

Dollars in millions except per share amounts

month plus 1.00 %, plus (2) an applicable margin, as set forth in the Revolving Credit Agreement (Applicable Margin for Base Advances);

• at a rate equal to:

(i) Term SOFR for a period of one, three or six months, as applicable, plus (ii) a credit spread adjustment of 0.10 %, plus (iii) an applicable margin, as set forth in the Revolving Credit Agreement (the “Applicable Margin for Benchmark Rate Advances”).

We pay a facility fee of 0.060 %, 0.070 %, 0.080 % or 0.100 % per annum of the amount of the lender commitments, depending on AT&T’s credit rating.

(i) Term SOFR for a period of one, three or six months, as applicable, plus (ii) an applicable margin, as set forth in the Revolving Credit Agreement (Applicable Margin for Benchmark Rate Revolving Advances).

Advances under the Revolving Credit Agreement denominated in Euro will bear interest at the Euro Interbank Offered Rate (EURIBOR) plus the Applicable Margin for Benchmark Rate Revolving Advances.

Advances under the Revolving Credit Agreement denominated in Sterling will bear interest at the Sterling Overnight Index Average (SONIA) plus the Applicable Margin for Benchmark Rate Revolving Advances.

The Applicable Margin for Benchmark Rate Revolving Advances will be equal to 0.690 %, 0.805 %, 0.920 % or 1.045 % per annum depending on our senior unsecured long-term debt ratings.

The Applicable Margin for Base Rate Revolving Advances will be equal to the greater of (x) 0.00 % and (y) the relevant Applicable Margin for Benchmark Rate Revolving Advances minus 1.00 % per annum, depending on our senior unsecured long-term debt ratings.

We will also pay a facility fee of 0.06 %, 0.07 % or 0.08 % per annum of the amount of the lender commitments, depending on AT&T’s credit rating under the Revolving Credit Agreement.

The obligations of the lenders under the Revolving Credit Agreement to provide advances to us will terminate on November 3, 2030, unless the commitments are terminated in whole prior to that date.

All advances must be repaid no later than the date on which lenders are no longer obligated to make any advances under the Revolving Credit Agreement.

The Revolving Credit Agreement provides that we and the lenders representing more than 50% of the facility amount may agree to extend their commitments under the Revolving Credit Agreement for two one-year periods beyond the initial termination date.

We have the right to terminate, in whole or in part, amounts committed by the lenders under the Revolving Credit Agreement in excess of any outstanding advances; however, any such terminated commitments may not be reinstated.

The proceeds of the advances shall be solely for general corporate purposes.

Delayed Draw Term Loan Credit Agreement

The Term Loan is comprised of (i) a $ 6,000 364-day delayed draw term loan facility (364-Day Term Loan Facility) and (ii) a $ 11,500 two-year delayed draw term loan facility (Two-Year Term Loan Facility).

Each of the 364-Day Term Loan Facility and Two-Year Term Loan Facility is available for a single draw at any time before November 3, 2026.

The proceeds of the Term Loan will be used for general corporate purposes, which may include financing acquisitions of additional spectrum.

Advances will bear interest, at our option, either:

• at a variable annual rate (Base Rate) equal to:

(1) the highest of (but not less than zero) (a) the prime rate quoted by Bank of America, N.A., (b) 0.5 % per annum above the federal funds rate, and (c) the forward-looking SOFR term rate administered by the Chicago Mercantile Exchange (or any successor administrator) and published on the applicable Reuters screen page (or such other commercially available source providing such quotations) (Term SOFR Screen Rate) for a period of one month plus 1.00 %, plus (2) an applicable margin, as set forth in the Term Loan (Applicable Margin for Base Rate Term Advances);

• at a variable annual rate based upon Term SOFR (SOFR Rate) equal to:

(1) the Term SOFR Screen Rate with a term equivalent to the applicable interest period of the advance plus (2) an applicable margin, as set forth in the Term Loan (Applicable Margin for SOFR Rate Term Advances).

The Applicable Margin for SOFR Rate Term Advances will be equal to 0.450 %, 0.575 %, 0.825 %, 0.950 % and 1.075 % per annum for the 364-Day Term Loan Facility and 0.550 %, 0.675 %, 0.925 %, 1.050 % and 1.175 % per annum for the Two-Year Term Loan Facility, in each case, depending on our senior unsecured long-term debt ratings.

The Applicable Margin for Base Rate Term Advances under the Term Loan will be equal to the greater of (x) 0.00 % and (y) the relevant Applicable Margin for SOFR Rate Term Advances minus 1.00 % per annum, depending on our unsecured long-term debt ratings.

Commencing March 3, 2026, we will also pay a fee of 0.05 %, 0.06 %, 0.07 %, 0.08 % or 0.10 % per annum of the amount of unused lender commitments, depending on our senior unsecured long-term debt ratings.

The Term Loan is not subject to amortization, and the entire principal amount of (i) the 364-Day Term Loan Facility will be due and payable 364 days after the date on which the borrowing is made and (ii) the Two-Year Term Loan Facility will be due and payable two years after the date on which the borrowing is made.

Dollars in millions except per share amounts

FAIR VALUE MEASUREMENTS AND DISCLOSURE

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$ 134,718 $ 127,852 $ 122,116 $ 114,167

Commercial paper — — 2,091 2,091

Investment securities 2

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Liability Derivatives

Interest rate swaps — ( 2 ) — ( 2 )

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

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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

Dollars in millions except per share amounts

rate foreign exchange contracts (cross-currency swaps).

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.

Dollars in millions except per share amounts

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 in 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.

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Following are the notional amounts of our outstanding derivative positions at December 31:

Interest rate swaps $ — $ 1,750

Cross-currency swaps $ 35,741 $ 34,884

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

Effect of Derivatives on the Consolidated Statements of Income

Effect of Derivatives in the Consolidated Statements of Income

Fair Value Hedging Relationships

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Gain (loss) recognized in accumulated OCI

$ — $ 12 $ ( 1,119 )

Foreign exchange contracts:

Gain (loss) recognized in accumulated OCI

Other income (expense) – net reclassified from

accumulated OCI into income

Interest rate locks:

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( 59 ) ( 59 ) ( 59 )

Other income (expense) reclassified from

accumulated OCI into income

Distribution of WarnerMedia — — ( 12 )

Nonrecurring Fair Value Measurements

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Periodically we make deposits to taxing jurisdictions which reduce our UTB balance but are not included in the reconciliation above.

The amount of deposits that reduced our UTB balance was $ 2,282 at December 31, 2024 and $ 2,361 at December 31, 2023.

Current tax assets on our consolidated balance sheets were $ 2,236 at December 31, 2024 and $ 2,079 at December 31, 2023.

Accrued interest and penalties included in UTBs were $ 2,223 as of December 31, 2024 and $ 1,785 as of December 31, 2023.

The amount of deposits that reduced our UTB balance was $ 2,894 at December 31, 2025, $ 2,282 at December 31, 2024 and $ 2,361 at December 31, 2023.

Current tax assets on our consolidated balance sheets were $ 2,772 at December 31, 2025, $ 2,236 at December 31, 2024 and $ 2,079 at December 31, 2023.

Accrued interest and penalties included in UTBs were $ 2,604 as of December 31, 2025, $ 2,223 as of December 31, 2024 and $ 1,785 as of December 31, 2023.

We record interest and penalties related to federal, state and foreign UTBs in income tax expense.

The net interest and penalty expense (benefit) included in income tax expense was $ 474 for 2024, $ 324 for 2023 and $( 86 ) for 2022.

The net interest and penalty expense included in income tax expense was $ 476 for 2025, $ 474 for 2024 and $ 324 for 2023.

We file income tax returns in the U.S.

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All audit periods prior to 2006 are closed for federal examination purposes, and we have effectively resolved all outstanding audit issues for years through 2010 with the IRS Appeals Division.

While we do not expect material changes, we are generally unable to estimate the range of impacts on the balance of the remaining uncertain tax positions or the impact on the effective tax rate from the resolution of these issues until each year is closed;

it is possible that the amount of unrecognized benefit with respect to our uncertain tax positions could increase or decrease within the next 12 months.

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The components of income tax (benefit) expense are as follows:

The components of income tax expense (benefit) are as follows:

2025 2024 2023

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Total $ 3,621 $ 4,445 $ 4,225

“Income (Loss) from Continuing Operations Before Income Taxes” in the consolidated statements of income included the following components for the years ended December 31:

Dollars in millions except per share amounts

“Income Before Income Taxes” in the consolidated statements of income included the following components for the years ended December 31:

2025 2024 2023

income (loss) before income taxes $ 16,674 $ 20,506 $ ( 1,480 )

income before income taxes

$ 26,993 $ 16,674 $ 20,506

Foreign income (loss) before income taxes 14 24 ( 658 )

Total $ 27,007 $ 16,698 $ 19,848

A reconciliation of income tax expense (benefit) on continuing operations and the amount computed by applying the statutory federal income tax rate of 21% to income from continuing operations before income taxes is as follows:

A reconciliation of income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate of 21% to income before income taxes is as follows:

2025 2024 2023

Taxes computed at federal statutory rate $ 3,507 $ 4,168 $ ( 650 )

Increases (decreases) in income taxes resulting from:

State and local income taxes – net of federal income tax benefit 478 345 795

Tax on foreign investments 3 102 43

Noncontrolling interest ( 274 ) ( 259 ) ( 308 )

Permanent items and R&D credit

Amount Percent Amount

federal statutory tax rate

$ 5,671 21.0 % $ 3,507 21.0 % $ 4,168 21.0 %

Audit resolutions

State and local income taxes – net of federal tax effect 1,2

( 155 ) ( 0.6 ) 276 1.6 262 1.3

Foreign tax effects

40 0.2 22 0.1 98 0.5

Effect of change in tax laws or rates enacted current period

Effect of cross-border tax laws — — ( 19 ) ( 0.1 ) ( 1 ) —

Research and development credit

( 139 ) ( 0.5 ) ( 183 ) ( 1.1 ) ( 180 ) ( 0.9 )

( 5 ) — ( 7 ) — ( 5 ) —

Changes in valuation allowance 53 0.2 2 — 53 0.3

Nontaxable or nondeductible items:

Goodwill impairment

Other – net ( 216 ) ( 177 ) ( 66 )

— — 929 5.6 9 —

Noncontrolling interest

( 301 ) ( 1.1 ) ( 274 ) ( 1.6 ) ( 259 ) ( 1.3 )

Divestiture of DIRECTV

( 1,311 ) ( 4.9 ) — — — —

( 124 ) ( 0.5 ) ( 43 ) ( 0.3 ) ( 157 ) ( 0.8 )

Changes in unrecognized tax benefits 2

578 2.1 388 2.3 467 2.4

Other adjustments

Tax basis adjustments

( 592 ) ( 2.2 ) — — — —

( 94 ) ( 0.3 ) ( 153 ) ( 0.9 ) ( 230 ) ( 1.2 )

Effective income tax rate

$ 3,621 13.4 % $ 4,445 26.6 % $ 4,225 21.3 %

1 The states that contribute to the majority (greater than 50%) of the tax effect in this category include California for 2025;

Florida, Illinois, Michigan, New York and Texas for 2024;

and California and Illinois for 2023.

State taxes are impacted by current year earnings, book-tax differences, apportionment methodologies, legislative changes, divestitures, return to accrual adjustments and other permanent book-tax differences.

2 Effective January 1, 2025, we adopted ASU 2023-09, which requires the effective tax rate reconciliation to include a distinct category for changes in UTBs.

This category must include the tax effects of changes in judgment related to prior-period tax positions, settlements and statute of limitations expirations, aggregated across all tax jurisdictions.

Furthermore, in accordance with ASU 2023-09, we have elected to present tax positions taken in the current annual reporting period, aggregated across all tax jurisdictions, within “Changes in unrecognized tax benefits.”

The amounts of cash income taxes paid, net of amounts refunded, are as follows at December 31:

2025 2024 2023

$ 1,219 $ 2,452 $ 1,319

91 ( 49 ) 193

Total $ 1,353 $ 2,456 $ 1,599

Effective Tax Rate 26.6 % 21.3 % ( 122.2 ) %

1 Goodwill impairments are not deductible for tax purposes.

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PENSION AND POSTRETIREMENT BENEFITS

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Most employees can elect to receive their pension benefits in either a lump sum payment or an annuity.

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Pension programs covering U.S.

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We also provide a variety of medical, dental and life insurance benefits to certain retired employees under various plans and accrue actuarially determined postretirement benefit costs as active employees earn these benefits.

On April 26, 2023, AT&T and State Street Global Advisors Trust Company, as independent fiduciary of the AT&T Pension Benefit Plan (Plan), entered into a commitment agreement with subsidiaries of Athene Holding Ltd.

In 2023, AT&T and State Street Global Advisors Trust Company, as independent fiduciary of the AT&T Pension Benefit Plan (Plan), entered into a commitment agreement with subsidiaries of Athene Holding Ltd.

(Athene) under which AT&T agreed to purchase nonparticipating single premium group annuity contracts that would transfer to Athene $ 8,067 of the Plan’s defined benefit pension obligations related to certain retirees, participants and beneficiaries under the Plan.

The purchase of the group annuity contracts closed on May 3, 2023, covering approximately 96,000 AT&T participants and beneficiaries (Transferred Participants).

Under the group annuity contracts, Athene, through its wholly-owned subsidiaries Athene Annuity and Life Company and Athene Annuity & Life Assurance Company of New York, made an irrevocable commitment, and is solely responsible, to pay the pension benefits of each Transferred Participant beginning with their August 2023 pension payments.

The transaction does not change the amount of pension benefits payable to the Transferred Participants.

The purchase of the group annuity contracts was funded directly by assets of the Plan via the pension trust underlying the Plan and required no cash or asset contributions by AT&T.

We transferred $ 8,067 of pension benefit obligation and related plan assets upon close of the transaction and recognized a pre-tax pension settlement gain of $ 363 .

The funded status of the Plan did not materially change due to this transaction.

This transaction with Athene was considered a settlement for accounting purposes and required us to remeasure our pension plan assets and obligations at quarter-end for the second and third quarters of 2023.

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Interest cost on projected benefit obligation 1,601 1,586 318 310

Amendments — — — ( 42 )

Actuarial (gain) loss 629 ( 1,909 ) 394 84

Benefits paid, including settlements ( 2,957 ) ( 2,447 ) ( 609 ) ( 770 )

Group annuity contract transfer

— ( 8,067 ) — —

Plan transfers ( 17 ) — 17 —

Benefit obligation at end of year $ 30,627 $ 30,944 $ 6,477 $ 6,339

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Contributions 1,153 3 — —

Group annuity contract transfer

— ( 7,704 ) — —

Fair value of plan assets at end of year 28,677 27,919 722 1,144

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The service cost component of net periodic pension cost (credit) is recorded in operating expenses in the consolidated statements of income while the remaining components are recorded in “Other income (expense) – net.” Our combined net pension and postretirement cost (credit) recognized in our consolidated statements of income was $( 1,121 ), $( 1,817 ) and $( 1,017 ) for the years ended December 31, 2025, 2024 and 2023.

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The following table presents the components of net periodic benefit cost (credit):

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$ 47 $ ( 188 ) $ 1,041 $ ( 1,168 ) $ ( 1,629 ) $ ( 2,058 )

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Other Changes in Benefit Obligations Recognized in Other Comprehensive Income

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Balance at end of year $ 114 $ 150 $ 216 $ 1,674 $ 3,066 $ 4,523

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In determining the projected benefit obligation and the net pension and postretirement benefit cost, we used the following significant weighted-average assumptions:

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1 Weighted-average discount rates shown for years with interim remeasurements:

2023 and 2022 for pension benefits and 2022 for postretirement benefits.

2023 for pension benefits.

2 Weighted-average interest crediting rates for cash balance pension programs relate only to the cash balance portion of total pension benefits.

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dollars, and generally not callable, convertible or index linked.

For the year ended December 31, 2024, when compared to the year ended December 31, 2023, we increased our pension discount rate by 0.70 %, resulting in a decrease in our pension plan benefit obligation of $ 1,994 , and increased our postretirement discount rate by 0.60 %, resulting in a decrease in our postretirement benefit obligation of $ 317 .

For the year ended December 31, 2023, we decreased our pension discount rate by 0.20 %, resulting in an increase in our pension plan benefit obligation of $ 916 , and decreased our postretirement discount rate by 0.20 %, resulting in an increase in our postretirement benefit obligation of $ 110 .

For the year ended December 31, 2025, when compared to the year ended December 31, 2024, we decreased our pension discount rate by 0.20 %, resulting in an increase in our pension plan benefit obligation of $ 680 , and decreased our postretirement discount rate by 0.30 %, resulting in an increase in our postretirement benefit obligation of $ 167 .

For the year ended December 31, 2024, when compared to the year ended December 31, 2023, we increased our pension

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discount rate by 0.70 %, resulting in a decrease in our pension plan benefit obligation of $ 1,994 , and increased our postretirement discount rate by 0.60 %, resulting in a decrease in our postretirement benefit obligation of $ 317 .

We utilize a full yield curve approach in the estimation of the service and interest components of net periodic benefit costs for pension and other postretirement benefits.

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Neither the annual measurement of our total benefit obligations nor annual net benefit cost is affected by the full yield curve approach.

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Expected Long-Term Rate of Return In 2026, our expected long-term rate of return is 7.75 % on pension plan assets and 4.00 % on postretirement plan assets.

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Healthcare Cost Trend Our healthcare cost trend assumptions are developed based on historical cost data, the near-term outlook and an assessment of likely long-term trends.

Based on our assessment of expectations of healthcare industry inflation, our 2025 assumed annual healthcare prescription drug cost trend and medical cost trend for eligible participants will increase to 8.25 %, grading down to an ultimate trend rate of 4.25 % in 2032.

This change in initial and ultimate assumptions increased our obligation by $ 144 .

For 2024, our assumed annual healthcare prescription drug cost trend and medical cost trend for eligible participants remained at an annual and ultimate trend rate of 4.50 %.

Based on our assessment of expectations of healthcare industry inflation, our 2026 assumed annual healthcare prescription drug cost trend and medical cost trend for eligible participants is 8.25 %, grading down to an ultimate trend rate of 4.25 % in 2035.

For 2025, our assumed annual healthcare prescription drug cost trend and medical cost trend for eligible participants was 8.25 %, grading down to an ultimate trend rate of 4.25 % in 2032.

Plan assets consist primarily of private and public equity, government and corporate bonds, and real assets (real estate and natural resources).

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We do not have significant ERISA required contributions to our pension plans for 2026.

We voluntarily contributed $ 1,150 to our pension plans during 2025, and intend to voluntarily contribute $ 350 during 2026.

We maintain VEBA trusts to partially fund postretirement benefits;

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Decisions regarding investment policy are made with an understanding of the effect of asset allocation on funded status, future contributions and projected expenses.

The plans’ weighted-average asset targets and actual allocations as a percentage of plan assets, including the notional exposure of future contracts by asset categories, at December 31 are as follows:

Pension Assets Postretirement (VEBA) Assets

During 2025, the pension trust entered into a series of derivative contracts as part of an additional interest rate hedging strategy.

This hedging strategy better aligns the pension asset duration with the liability duration and improves the interest rate hedge ratio.

The notional amount of the contracts was approximately $ 7,300 as of December 31, 2025.

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The plans’ weighted-average asset targets and actual allocations as a percentage of plan assets, including the exposure of future contracts by asset categories, at December 31 are as follows:

Pension Assets 1

Postretirement (VEBA) Assets

Target 2025 2024 Target 2025 2024

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Total 100 % 100 % 100 % 100 %

Prior to April 2023, the pension trust held preferred equity interests in AT&T Mobility II LLC (Mobility II), the primary holding company for our wireless business.

The preferred equity interests were repurchased in April 2023.

(See Note 16)

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1 Excludes interest rate hedging strategy notional value of $ 7,300 .

At December 31, 2025, AT&T securities represented less than 1% of assets held by our pension trust.

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Non-interest bearing cash and overdrafts are valued at cost, which approximates fair value.

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Fair Value Measurements

See Note 12 for a discussion of the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.

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The following tables set forth by level, within the fair value hierarchy, the pension and postretirement assets and liabilities at fair value as of December 31, 2025:

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Securities lending collateral 1

688 1,484 — 2,172

Receivable for variation margin 2 — — 2

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Total Plan Net Assets $ 28,677

1 Securities lending collateral primarily includes cash and government and municipal bonds.

2 Other assets (liabilities) include amounts receivable, accounts payable and net adjustment for securities lending payable.

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Securities lending collateral 1

643 961 — 1,604

Receivable for variation margin 4 — — 4

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Total Plan Net Assets $ 27,919

1 Securities lending collateral primarily includes cash and government and municipal bonds.

2 Other assets (liabilities) include amounts receivable, accounts payable and net adjustment for securities lending payable.

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Domestic equities 1 — — 1

International equities — — 1 1

Total plan net assets at fair value $ 817 $ 6 $ — $ 823

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Unrealized gains (losses) — — 325 325

Transfers in — — 319 319

Purchases — 13 102 115

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Benefit cost, which is based on the cost of shares or units allocated to participating employees’ accounts or the cash contributed to participant accounts, was $ 546 , $ 565 and $ 570 for the years ended December 31, 2025, 2024 and 2023.

SHARE-BASED PAYMENTS

Under our various share-based payment plans, senior and other management employees and nonemployee directors have received performance stock units and other nonvested stock units.

SHARE-BASED COMPENSATION

Under our various share-based compensation plans, senior and other management employees and nonemployee directors have received performance stock units and other nonvested stock units.

As of December 31, 2025, we were authorized to issue up to approximately 41 million shares of common stock (including shares that may be issued upon exercise of outstanding options or upon vesting of performance stock units or other nonvested stock units) pursuant to these various plans:

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Restricted stock predominantly vests over a three - to ten -year period and restricted stock units predominantly vest over a three -year period.

We account for our share-based payment arrangements based on the fair value of the awards on their respective grant date, which may affect our ability to fully realize the value shown on our consolidated balance sheets of deferred tax assets associated with compensation expense.

We account for our share-based compensation arrangements based on the fair value of the awards on their respective grant date, which may affect our ability to fully realize the value shown on our consolidated balance sheets of deferred tax assets associated with compensation expense.

We record a valuation allowance when our future taxable income is not expected to be sufficient to recover the asset.

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As of December 31, 2024, there was $ 666 of total unrecognized compensation cost related to nonvested share-based payment arrangements outstanding.

As of December 31, 2025, there was $ 584 of total unrecognized compensation cost related to nonvested share-based compensation arrangements outstanding.

That cost is expected to be recognized over a weighted-average period of 1.89 years.

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48 thousand shares outstanding at December 31, 2025 and December 31, 2024, with a $ 25,000 per share liquidation preference and a dividend rate of 5.000 %.

20 thousand shares outstanding at December 31, 2024 and December 31, 2023, with a € 100,000 per share liquidation preference, and an initial rate of 2.875 %, subject to reset after May 1, 2025.

On January 31, 2025, we issued a call notice for the Series B cumulative preferred shares, with a redemption date of March 3, 2025.

no shares outstanding at December 31, 2025 and 20 thousand shares outstanding at December 31, 2024, with a € 100,000 per share liquidation preference, and an initial rate of 2.875 %.

We redeemed all outstanding Series B cumulative preferred shares on March 3, 2025.

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

70 thousand shares outstanding at December 31, 2025 and December 31, 2024, with a $ 25,000 per share liquidation preference, and a dividend rate of 4.75 %.

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Over the past few years, these repurchases have generally been for distribution through our employee benefit plans or in connection with certain acquisitions.

In December 2024, the Board approved an authorization to repurchase up to $ 10,000 of common stock and terminated the March 2014 authorization.

In December 2024, the Board approved an authorization to repurchase up to $ 10,000 of common stock (the “2024 Authorization”) and terminated the March 2014 authorization.

During 2025, we repurchased approximately 159 million shares totaling $ 4,269 under this authorization, excluding brokerage fees and the one percent excise tax imposed by the Inflation Reduction Act of 2022.

On January 27, 2026, the Board approved an authorization to repurchase an additional $ 10,000 of common stock (the “2026 Authorization”).

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

We also used accelerated share repurchase agreements with large financial institutions to repurchase our stock.

During 2024, we repurchased approximately 36 thousand shares totaling $ 1 and during 2023, there were no shares repurchased under the March 2014 authorization.

We have also used accelerated share repurchase agreements with large financial institutions to repurchase our stock.

During 2024, we repurchased approximately 36 thousand shares totaling $ 1 under the March 2014 authorization.

Dividend Declarations In December 2025 and December 2024, AT&T declared a quarterly preferred dividend of $ 36 .

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So long as the distributions were declared and paid, the terms of the Mobility preferred interests did not impose any limitations on cash movements between affiliates, or our ability to declare a dividend on or repurchase AT&T shares.

All outstanding Mobility preferred interests were repurchased as of April 2023, leaving no amounts outstanding at December 31, 2023.

All Mobility preferred interests were repurchased as of April 2023.

Prior to repurchase, a holder of the Mobility preferred interests could put the interests to Mobility II, or Mobility II could have redeemed the interests upon a change in control of Mobility II or on or after September 9, 2022, with either option only allowed to be exercised during certain periods.

The price at which a put option or a redemption option could be exercised was the greater of (1) the market value of the interests as of the last date of the quarter preceding the date of the exercise of a put or redemption option and (2) the sum of (a) twenty-five dollars plus (b) any accrued and unpaid distributions.

The redemption price was to be paid with cash, AT&T common stock, or a combination of cash and AT&T common stock, at Mobility II’s sole election.

In no event was Mobility II required to deliver more than 250 million shares of AT&T common stock to settle put and redemption options.

On October 24, 2022, approximately 105 million Mobility preferred interests were put to AT&T by a third-party investor, for which we paid approximately $ 2,600 cash to redeem.

On December 27, 2022, the AT&T pension trust provided written notice of its right to require us to purchase the remaining 213 million, or approximately $ 5,340 , of Mobility preferred interests outstanding.

The terms of the instruments limited the amount we were required to redeem in any 12-month period to approximately 107 million shares, or $ 2,670 .

With the certainty of redemption, the Mobility preferred interests were reclassified from equity to a liability at fair value, with approximately $ 2,670 recorded in current liabilities as “Accounts payable and

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accrued liabilities,” representing the amount required to be redeemed within one year, and $ 2,670 recorded in “Other noncurrent liabilities.” The liabilities associated with the Mobility preferred interests were considered Level 3 under the Fair Value Measurement and Disclosure framework (see Note 12).

The difference between the carrying value of the Mobility preferred interest, which represented fair value at contribution, and the fair value of the instrument upon settlement and/or balance sheet reclassification was recorded as an adjustment to additional paid-in capital.

As of December 31, 2022, we had approximately 213 million Mobility preferred interests outstanding, which had a redemption value of approximately $ 5,340 and paid cash distributions of $ 373 per annum, subject to declaration.

In April 2023, we accepted the December 2022 put option notice from the AT&T pension trust and repurchased the remaining 213 million Mobility preferred interests for a purchase price, including accrued and unpaid distributions, of $ 5,414 .

Tower Holdings Preferred Interests

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

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

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

The 2019 Tower preferred interests were subject to reset in December 2024 and included a September series (Tower Class A-1) totaling $ 1,500 that paid an initial preferred distribution of 5.0 %, and a December series (Tower Class A-2) totaling $ 4,500 that paid an initial preferred distribution of 4.75 %.

The 2019 Tower preferred

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interests were subject to reset in December 2024 and included a September series (Tower Class A-1) totaling $ 1,500 that paid an initial preferred distribution of 5.0 %, and a December series (Tower Class A-2) totaling $ 4,500 that paid an initial preferred distribution of 4.75 %.

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

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

The Tower Fixed Rate Interests pay a preferred distribution of 5.90 %, and the Tower Floating Rate Interests, which could equal $ 525 by 2028 if not called prior, pay a preferred distribution equal to the Secured Overnight Financing Rate (SOFR) plus 250 basis points, as defined in the agreement.

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

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

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

We redeemed $ 65 of the Tower Floating Rate Interests in November 2025.

If not called, the remaining Tower Floating Rate Interests could equal $ 460 by 2028.

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

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In April 2023, we expanded our September 2020 transaction and issued an additional $ 5,250 of nonconvertible cumulative preferred interests (Telco Class A-2 and A-3).

As of December 31, 2024 and 2023, cumulative preferred interests in our Telco LLC totaled $ 7,250 (collectively the “Telco preferred interests”).

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

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

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

As of December 31, 2025 and 2024, cumulative preferred interests in our Telco LLC totaled $ 9,500 and $ 7,250 (collectively the “Telco preferred interests”).

Members’ equity in Telco LLC consists of (1) members’ interests, which are held by a consolidated subsidiary of AT&T, (2) Telco Class A-1 preferred interests, which pay an initial preferred distribution of 4.25 % annually, subject to declaration, and subject to reset every seven years , and (3) Telco Class A-2 and A-3 preferred interests, which pay an initial preferred distribution of 6.85 % annually, subject to declaration, and subject to reset on November 1, 2027, and every seven years thereafter.

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

If notice is given, all other holders of equal or more subordinate classes of

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members’ equity are entitled to receive the same form of consideration payable to the holders of the preferred interests, resulting in a deemed liquidation for accounting purposes.

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

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

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

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

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

Mobility II Redeemable Noncontrolling Interests

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The Mobility noncontrolling interests are required to be initially recorded at fair value less issuance costs and will accrete to redemption value of $ 2,000 through “Net Income Attributable to Noncontrolling Interest.” The Mobility noncontrolling interests are considered Level 3 under the Fair Value Measurement and Disclosures framework (see Note 12) and included in “Redeemable Noncontrolling Interest” on the consolidated balance sheets.

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A holder of the Mobility noncontrolling interests may put the interests to Mobility II on or after the earliest of certain events or each June 15 and December 15, beginning on June 15, 2028.

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

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

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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.

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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.

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Cash proceeds received 12,391 10,587 10,980

Beneficial interests recorded

Guarantee obligation recorded 925 930 932

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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 12).

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

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

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

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Our depreciation expense for these assets was $ 39 for each of 2025, 2024 and 2023.

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Payments made to Crown Castle under this arrangement were $ 274 for 2025.

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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.

Prior to its sale, we accounted for our investment in DIRECTV under the equity method and recorded our share of DIRECTV earnings as equity in net income of affiliates, with DIRECTV considered a related party.

On July 2, 2025, we sold our interest in DIRECTV to TPG.

(See Note 10)

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Distributions classified as investing activities

928 2,049 2,649

Cash distributions received from DIRECTV

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For the years ended December 31, 2025, 2024 and 2023, we billed DIRECTV approximately $ 240 , $ 536 and $ 730 under commercial arrangements and transition service agreements, which were recorded as a reduction to the operations and support expenses incurred.

At December 31, 2024, we had accounts receivable from DIRECTV of $ 256 and accounts payable to DIRECTV of $ 17 .

We are not committed, implicitly or explicitly, to provide financial or other support, as our involvement with DIRECTV is limited to the carrying amount of the assets and liabilities recognized on our balance sheet.

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In 2017, the First Responder Network Authority (FirstNet) selected AT&T to build and manage the first nationwide broadband network dedicated to America’s first responders.

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Our purchase obligations are expected to be approximately $ 8,545 in 2026, $ 10,698 in total for 2027 and 2028, $ 2,505 in total for 2029 and 2030 and $ 2,890 in total for years thereafter.

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SUPPLIER AND VENDOR FINANCING PROGRAMS

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$ 3,090 $ 2,498

Dollars in millions except per share amounts

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

Direct supplier financing outstanding is included in “Accounts payable and accrued liabilities” on our consolidated balance sheets and is reported as operating activities in our statements of cash flows when paid.

9 unchanged sentences

Vendor Financing

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

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 (referred to as vendor financing), which are reported as financing activities in our statements of cash flows when paid.

The following table presents the change in the vendor financing obligation for the years ended December 31:

5 unchanged sentences

1 Total vendor financing payables at December 31, 2025 and 2024 were $ 1,892 and $ 1,448 , respectively, of which $ 956 and $ 749 are included in “Accounts payable and accrued liabilities.”

2 Includes software licensing arrangements with payment terms of two to five years totaling approximately $ 850 and $ 630 at December 31, 2024 and 2023, respectively.

Dollars in millions except per share amounts

2 Includes software licensing arrangements of approximately $ 1,200 and $ 850 at December 31, 2025 and 2024, respectively.

ADDITIONAL FINANCIAL INFORMATION

18 unchanged sentences

1 Included in “Acquisitions, net of cash acquired” in our consolidated statements of cash flows.

Dollars in millions except per share amounts

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.

1 unchanged sentence

Cash and Cash Equivalents and Restricted Cash 2025 2024 2023 2022

Cash and cash equivalents from continuing operations $ 3,298 $ 6,722 $ 3,701 $ 19,223

Cash and cash equivalents from discontinued operations — — — 1,946

Cash and cash equivalents

$ 18,234 $ 3,298 $ 6,722 $ 3,701

Restricted cash in Prepaid and other current assets 157 1 2 1

1 unchanged sentence

Cash and cash equivalents and restricted cash $ 18,527 $ 3,406 $ 6,833 $ 3,793

Dollars in millions except per share amounts

The following tables summarize certain cash flow activities from continuing operations:

The following tables summarize certain cash flow activities during the periods:

Consolidated Statements of Cash Flows 2025 2024 2023

3 unchanged sentences

1,353 2,456 1,599

1 Total cash income taxes paid, net of refunds, by AT&T was $ 2,456 , $ 1,599 and $ 696 for 2024, 2023 and 2022, respectively.

Purchase of property and equipment $ 20,677 $ 20,101 $ 17,674

5 unchanged sentences

Interest during construction - spectrum 1

199 695 1,120

Total Acquisitions, net of cash acquired $ 379 $ 380 $ 2,942

3 unchanged sentences

After expiration of collective bargaining agreements, work stoppages or labor disruptions may occur in the absence of new contracts or other agreements being reached.

The main contract set to expire in 2025 covers approximately 9,000 employees in Arkansas, Kansas, Missouri, Oklahoma and Texas and is set to expire in April.

DISCONTINUED OPERATIONS

Upon the separation and distribution, the WarnerMedia business met the criteria for discontinued operations.

The following is a summary of operating results included in income (loss) from discontinued operations for the years ended:

Revenues $ — $ — $ 9,454

Operating Expenses

Cost of revenues — — 5,481

Selling, general and administrative — — 2,791

Depreciation and amortization — — 1,172

Total operating expenses — — 9,444

Interest expense — — 131

Equity in net income (loss) of affiliates — — ( 27 )

Other income (expense) – net

Total other income (expense) — — ( 245 )

Net loss before income taxes — — ( 235 )

Income tax expense (benefit) — — ( 54 )

Net loss from discontinued operations $ — $ — $ ( 181 )

In preparation for close of the separation and distribution, on April 7, 2022, Spinco drew $ 10,000 on its $ 10,000 term loan credit agreement (Spinco Term Loan), which conveyed to WBD.

Total debt conveyed was approximately $ 41,600 , which included $ 1,600 of existing WarnerMedia debt, $ 30,000 of Spinco senior notes issued in March 2022 and the $ 10,000 Spinco Term Loan.

WarnerMedia cash transfer to Discovery was approximately $ 2,660 .

The main contracts set to expire in 2026 include the following:

• A contract covering approximately 9,000 employees across 36 states and the District of Columbia is set to expire in February.

• A contract covering approximately 4,300 employees across five states is set to expire in April.

• Two wireline contracts covering approximately 1,800 employees across all 50 states as well as the U.S.

Virgin Islands and Puerto Rico are set to expire in April.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data