What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-07-22 compared with 2026-04-27 · 315 added, 225 removed, 891 unchanged (38% of the section changed)

2 unchanged sentences

Dollars in millions except per share amounts

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Operating Revenues

7 unchanged sentences

amortization shown separately below)

6,306 6,412 12,567 12,751

Selling, general and administrative 7,221 6,945 14,537 14,090

Asset impairments and abandonments and restructuring

286 — 286 504

Depreciation and amortization 4,966 5,251 9,932 10,441

4 unchanged sentences

Equity in net income (loss) of affiliates

( 29 ) 485 ( 70 ) 1,925

Other income (expense) — net

696 767 1,290 1,222

Total other income (expense) ( 1,216 ) ( 403 ) ( 2,476 ) ( 166 )

8 unchanged sentences

Preferred Stock Dividends and Redemption Gain

( 36 ) ( 36 ) ( 72 ) 8

Net Income Attributable to Common Stock $ 4,591 $ 4,464 $ 8,384 $ 8,859

7 unchanged sentences

Outstanding — Basic (in millions)

6,938 7,209 6,977 7,211

Weighted Average Number of Common Shares

Outstanding — with Dilution (in millions)

6,946 7,219 6,987 7,221

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Dollars in millions

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Net income $ 5,010 $ 4,861 $ 9,191 $ 9,553

2 unchanged sentences

Translation adjustment, net of taxes of $ 3 , $ 61 , $ 13 and

Net unrealized gains (losses), net of taxes of $ 0 and $ 3

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

Net unrealized gains (losses), net of taxes of $ 0 , $ 1 , $ 0

Reclassification adjustment included in net income, net of

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

Derivative instruments:

Net unrealized gains (losses), net of taxes of $( 93 ) and $( 203 )

Net unrealized gains (losses), net of taxes of $ 163 , $ 32 ,

$ 70 and $( 171 )

491 96 221 ( 528 )

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

Reclassification adjustment included in net income, net of

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

Defined benefit postretirement plans:

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

$( 98 ) and $( 115 )

Amortization of net prior service credit included in net

income, net of taxes of $( 98 ), $( 114 ), $( 196 ) and $( 229 )

( 306 ) ( 358 ) ( 612 ) ( 714 )

8 unchanged sentences

Dollars in millions except per share amounts

March 31, December 31,

June 30, December 31,

Assets (Unaudited)

31 unchanged sentences

Stockholders’ Equity

Preferred stock ($ 1 par value, 10,000,000 authorized at March 31, 2026 and December 31, 2025):

Series A ( 48,000 issued and outstanding at March 31, 2026 and December 31, 2025)

Series B ( 20,000 issued and 0 outstanding at March 31, 2026 and December 31, 2025)

Series C ( 70,000 issued and outstanding at March 31, 2026 and December 31, 2025)

Common stock ($ 1 par value, 14,000,000,000 authorized at March 31, 2026 and

Preferred stock ($ 1 par value, 10,000,000 authorized at June 30, 2026 and December 31, 2025):

Series A ( 48,000 issued and outstanding at June 30, 2026 and December 31, 2025)

Series B ( 0 issued and outstanding at June 30, 2026 and 20,000 issued and

0 outstanding at December 31, 2025)

Series C ( 70,000 issued and outstanding at June 30, 2026 and December 31, 2025)

Common stock ($ 1 par value, 14,000,000,000 authorized at June 30, 2026 and

December 31, 2025:

issued 7,620,748,598 at March 31, 2026 and December 31, 2025)

issued 7,620,748,598 at June 30, 2026 and December 31, 2025)

Additional paid-in capital 106,161 106,533

Retained earnings 20,293 15,768

Treasury stock ( 655,850,883 at March 31, 2026 and 583,246,242 at December 31, 2025, at cost)

Treasury stock ( 741,978,242 at June 30, 2026 and 583,246,242 at December 31, 2025, at cost)

( 22,446 ) ( 18,529 )

6 unchanged sentences

Dollars in millions

Three months ended

Six months ended

Operating Activities

9 unchanged sentences

Net (gain) loss on investments

( 170 ) ( 31 )

Changes in operating assets and liabilities:

( 418 ) ( 247 )

Equipment installment receivables and related sales

( 176 ) 1,115

Contract asset and cost deferral

1 unchanged sentence

Inventories, prepaid and other current assets

( 173 ) ( 661 )

Accounts payable and other accrued liabilities

5 unchanged sentences

Net Cash Provided by Operating Activities from Continuing Operations

18,396 18,812

Investing Activities

3 unchanged sentences

(Purchases), sales and settlements of securities - net

( 24 ) ( 1,084 )

Other - net ( 654 ) ( 778 )

13 unchanged sentences

( 1,417 ) ( 598 )

Net increase (decrease) in cash and cash equivalents and restricted cash from continuing operations ( 1,986 ) 3,538

Net increase in cash and cash equivalents and restricted cash from continuing operations 3,746 7,170

Cash Flows from Discontinued Operations:

Cash used in operating activities ( 38 ) —

Cash provided by operating activities 31 —

Cash used in investing activities ( 4,363 ) —

8 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended

March 31, 2026 March 31, 2025

Shares Amount Shares Amount

Three months ended Six months ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Shares Amount Shares Amount Shares Amount Shares Amount

Preferred Stock - Series A

3 unchanged sentences

Balance at beginning of period — $ — — $ — — $ — — $ —

Retirement of stock — — — —

Balance at end of period — $ — — $ — — $ — — $ —

7 unchanged sentences

Redemption of preferred stock

— — — ( 2,165 )

Issuance of treasury stock — ( 4 ) ( 287 ) ( 456 )

6 unchanged sentences

Preferred stock dividends ( 36 ) ( 35 ) ( 71 ) ( 121 )

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

Common stock dividends

($ 0.2775 , $ 0.2775 , $ 0.5550

and $ 0.5550 per share)

( 1,918 ) ( 2,000 ) ( 3,860 ) ( 4,011 )

Balance at end of period $ 20,293 $ 6,680 $ 20,293 $ 6,680

2 unchanged sentences

Dollars and shares in millions except per share amounts

Three months ended

March 31, 2026 March 31, 2025

Shares Amount Shares Amount

Three months ended Six months ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

Shares Amount Shares Amount Shares Amount Shares Amount

Treasury Stock

Balance at beginning of period ( 656 ) $ ( 20,273 ) ( 425 ) $ ( 14,252 ) ( 583 ) $ ( 18,529 ) ( 445 ) $ ( 15,023 )

Repurchase and acquisition of common stock ( 95 ) ( 2,495 ) ( 9 ) ( 218 )

Repurchase and acquisition of

( 86 ) ( 2,177 ) ( 34 ) ( 968 ) ( 181 ) ( 4,672 ) ( 43 ) ( 1,186 )

Reissuance of treasury stock — 4 — 10 22 755 29 999

2 unchanged sentences

Balance at beginning of period $ ( 1,392 ) $ ( 142 ) $ ( 860 ) $ 795

Other comprehensive income (loss) attributable to AT&T ( 532 ) ( 937 )

Other comprehensive income

(loss) attributable to AT&T

207 ( 58 ) ( 325 ) ( 995 )

Balance at end of period $ ( 1,185 ) $ ( 200 ) $ ( 1,185 ) $ ( 200 )

1 unchanged sentence

Balance at beginning of period $ 15,959 $ 16,114 $ 15,958 $ 13,873

Net income attributable to noncontrolling interest 316 305

Issuance and acquisition by noncontrolling owners — 2,221

Net income attributable to

noncontrolling interest

347 326 663 631

Issuance and acquisition by

noncontrolling owners

Distributions ( 316 ) ( 318 ) ( 631 ) ( 603 )

Balance at end of period $ 15,990 $ 16,122 $ 15,990 $ 16,122

Total Stockholders’ Equity at beginning of period $ 126,491 $ 118,245

Total Stockholders’ Equity at end of period $ 125,619 $ 119,858

Total Stockholders’ Equity at

beginning of period

$ 125,619 $ 119,858 $ 126,491 $ 118,245

Total Stockholders’ Equity at

end of period

$ 126,434 $ 121,394 $ 126,434 $ 121,394

1 Excludes redeemable noncontrolling interest

See Notes to Consolidated Financial Statements.

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

31 unchanged sentences

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

For the three months ended March 31, 2026, we repurchased approximately 88 million shares totaling $ 2,279 under the December 2024 authorization, excluding brokerage fees and the one percent excise tax imposed by the Inflation Reduction Act of 2022.

For the six months ended June 30, 2026, we repurchased approximately 174 million shares totaling $ 4,435 under the December 2024 authorization, excluding brokerage fees and the one percent excise tax imposed by the Inflation Reduction Act of 2022.

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

MARCH 31, 2026

Retirement of Series B Preferred Shares On May 15, 2026, we retired all of the Series B cumulative preferred shares that were redeemed in May 2025.

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Numerator for basic earnings per share:

3 unchanged sentences

Preferred Stock Dividends and Redemption Gain

Income from continuing operations attributable to common stock 3,831 4,395

( 36 ) ( 36 ) ( 72 ) 8

Income from continuing operations attributable to

4,619 4,464 8,450 8,859

Loss from discontinued operations, net of tax ( 28 ) — ( 66 ) —

21 unchanged sentences

43 1 243 ( 612 ) ( 325 )

Balance as of March 31, 2026 $ ( 1,367 ) $ ( 29 ) $ ( 1,468 ) $ 1,472 $ ( 1,392 )

MARCH 31, 2026

Balance as of June 30, 2026 $ ( 1,358 ) $ ( 27 ) $ ( 966 ) $ 1,166 $ ( 1,185 )

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

11 unchanged sentences

209 16 ( 506 ) ( 714 ) ( 995 )

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

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

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

18 unchanged sentences

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

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended March 31, 2026

For the three months ended June 30, 2026

Advanced Connectivity Legacy Latin America Total Segment Corporate & Other AT&T Inc.

10 unchanged sentences

Operations and support expenses 16,583 1,109 997 18,689 430 19,119

16,913 1,156 953 19,022 714 19,736

Asset impairment and abandonment and restructuring

Asset impairments and abandonments and restructuring — — — — 286 286

Transaction, legal and other costs — — — — 149 149

4 unchanged sentences

Income from continuing operations before income tax $ 5,822

For the three months ended March 31, 2025

For the three months ended June 30, 2025

Advanced Connectivity Legacy Latin America Total Segment Corporate & Other AT&T Inc.

10 unchanged sentences

Operations and support expenses 16,356 1,243 853 18,452 594 19,046

Asset impairments and abandonments and restructuring — — — — — —

Transaction, legal and other costs — — — — 49 49

Depreciation and amortization 5,035 — 155 5,190 61 5,251

Operating Expenses 21,391 1,243 1,008 23,642 704 24,346

Operating Income (Loss) $ 6,106 $ 959 $ 46 $ 7,111 $ ( 610 ) $ 6,501

Total other income (expense) ( 403 )

Income from continuing operations before income tax $ 6,098

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the six months ended June 30, 2026

Advanced Connectivity Legacy Latin America Total Segment Corporate & Other AT&T Inc.

Operating Revenues

Wireless service $ 34,354 $ — $ 1,533 $ 35,887 $ — $ 35,887

Advanced home internet 5,725 — — 5,725 — 5,725

Business fiber and advanced connectivity 3,828 — — 3,828 — 3,828

Business transitional and other 2,125 — — 2,125 — 2,125

Other service 309 3,400 — 3,709 181 3,890

Total Service 46,341 3,400 1,533 51,274 181 51,455

Equipment 10,745 — 864 11,609 — 11,609

Operating Revenues 57,086 3,400 2,397 62,883 181 63,064

Operating Expenses

Operations and support expenses

33,496 2,265 1,950 37,711 1,144 38,855

Asset impairment and abandonment and restructuring

Asset impairments and abandonments and restructuring — — — — 286 286

Transaction, legal and other costs — — — — 295 295

Depreciation and amortization 9,392 — 389 9,781 151 9,932

Operating Expenses 42,888 2,265 2,339 47,492 1,876 49,368

Operating Income (Loss) $ 14,198 $ 1,135 $ 58 $ 15,391 $ ( 1,695 ) $ 13,696

Total other income (expense) ( 2,476 )

Income from continuing operations before income tax $ 11,220

For the six months ended June 30, 2025

Advanced Connectivity Legacy Latin America Total Segment Corporate & Other AT&T Inc.

Operating Revenues

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

Advanced home internet 4,497 — — 4,497 — 4,497

Business fiber and advanced connectivity 3,524 — — 3,524 — 3,524

Business transitional and other 2,543 — — 2,543 — 2,543

Other service 326 4,570 — 4,896 189 5,085

Total Service 44,394 4,570 1,277 50,241 189 50,430

Equipment 10,295 — 748 11,043 — 11,043

Operating Revenues 54,689 4,570 2,025 61,284 189 61,473

Operating Expenses

Operations and support expenses

32,603 2,592 1,631 36,826 1,319 38,145

Asset impairments and abandonments and restructuring — — — — 504 504

Transaction, legal and other costs — — — — 128 128

4 unchanged sentences

Income from continuing operations before income tax $ 12,089

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

6 unchanged sentences

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

March 31, December 31,

June 30, December 31,

Consolidated Balance Sheets 2026 2025

7 unchanged sentences

Total deferred customer contract fulfillment costs $ 4,464 $ 4,726

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

March 31, March 31,

June 30, June 30,

Consolidated Statements of Income 2026 2025

11 unchanged sentences

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

March 31, December 31,

June 30, December 31,

Consolidated Balance Sheets 2026 2025

3 unchanged sentences

Current portion in “Advanced billings and customer deposits”

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

6 unchanged sentences

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

As of March 31, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 44,392 , of which we expect to recognize approximately 82 % by the end of 2027, with the balance recognized thereafter.

As of June 30, 2026, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 44,582 , of which we expect to recognize approximately 74 % by the end of 2027, with the balance recognized thereafter.

PENSION AND POSTRETIREMENT BENEFITS

3 unchanged sentences

We do not have significant funding requirements in 2026.

We plan to voluntarily contribute $ 350 to our pension plans during 2026.

During the second quarter of 2026, we voluntarily contributed $ 100 to our pension plans, with an additional $ 250 planned in the second half of 2026.

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

1 unchanged sentence

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Pension cost:

6 unchanged sentences

Service cost – benefits earned during the period $ 3 $ 5 $ 7 $ 9

Interest cost on accumulated postretirement benefit obligation 73 80

Interest cost on accumulated postretirement benefit

73 79 146 159

Expected return on assets ( 5 ) ( 8 ) ( 11 ) ( 18 )

2 unchanged sentences

Combined net pension and postretirement (credit) cost $ ( 395 ) $ ( 397 ) $ ( 791 ) $ ( 794 )

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

12 unchanged sentences

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Carrying Fair Carrying Fair

8 unchanged sentences

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

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of March 31, 2026 and December 31, 2025.

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of June 30, 2026 and December 31, 2025.

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

March 31, 2026

June 30, 2026

Level 1 Level 2 Level 3 Total

8 unchanged sentences

Cross-currency swaps — ( 2,415 ) — ( 2,415 )

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

17 unchanged sentences

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Total gains (losses) recognized on equity securities $ 79 $ 48 $ 47 $ 21

1 unchanged sentence

Unrealized gains (losses) recognized on equity securities held at end of period $ 79 $ 48 $ 47 $ 21

At March 31, 2026, available-for-sale debt securities totaling $ 583 have maturities as follows - less than one year:

At June 30, 2026, available-for-sale debt securities totaling $ 579 have maturities as follows - less than one year:

one to three years:

15 unchanged sentences

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

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

6 unchanged sentences

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

In the three months ended March 31, 2026 and 2025, no ineffectiveness was measured on fair value hedges.

In the six months ended June 30, 2026 and 2025, no ineffectiveness was measured on fair value hedges.

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

10 unchanged sentences

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

At March 31, 2026, we had posted collateral of $ 28 (a deposit asset) and held collateral of $ 183 (a receipt liability).

Under the agreements, if AT&T’s credit rating had been downgraded two ratings levels by Fitch Ratings, one level by S&P and one level by Moody’s before the final collateral exchange in March, we would have been required to post additional collateral of $ 60 .

At June 30, 2026, we had posted collateral of $ 25 (a deposit asset) and held collateral of $ 177 (a receipt liability).

Under the agreements, if AT&T’s credit rating had been downgraded two ratings levels by Fitch Ratings, one level by S&P and one level by Moody’s before the final collateral exchange in June, we would have been required to post additional collateral of $ 51 .

If AT&T’s credit rating had been downgraded three ratings levels by Fitch Ratings, two levels by S&P and two levels by Moody’s, we would have been required to post additional collateral of $ 1,940 .

2 unchanged sentences

Following are the notional amounts of our outstanding derivative positions:

March 31, December 31,

June 30, December 31,

Cross-currency swaps $ 36,037 $ 35,741

Total $ 36,037 $ 35,741

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

2 unchanged sentences

Effect of Derivatives on the Consolidated Statements of Income

Three months ended

Three months ended Six months ended

June 30, June 30,

Fair Value Hedging Relationships 2026 2025 2026 2025

8 unchanged sentences

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

Three months ended

Three months ended Six months ended

June 30, June 30,

Cash Flow Hedging Relationships 2026 2025 2026 2025

19 unchanged sentences

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

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

1 unchanged sentence

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

Three months ended

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

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Net cash received (paid) from equipment installment

receivables program 1

$ ( 482 ) $ ( 135 ) $ ( 214 ) $ 724

Net cash received (paid) from revolving receivables program

64 ( 42 ) 30 91

Total net cash impact to cash flows from operating activities 2

1 Cash from initial sales of $ 3,483 and $ 3,798 for the three months ended March 31, 2026 and 2025, respectively.

$ ( 418 ) $ ( 177 ) $ ( 184 ) $ 815

1 Cash from initial sales of $ 2,832 and $ 2,779 for the three months and $ 6,315 and $ 6,577 for the six months ended June 30, 2026

and 2025, respectively.

2 Net of facility fees.

4 unchanged sentences

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Equipment Equipment

21 unchanged sentences

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

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

1 unchanged sentence

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Gross receivables sold 1

1 unchanged sentence

Net receivables sold 2

2,738 2,687 6,093 6,375

Cash proceeds received 2,832 2,779 6,315 6,577

7 unchanged sentences

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Fair value of repurchased receivables $ 1,022 $ 1,011 $ 1,747 $ 2,948

1 unchanged sentence

Gain (loss) on repurchases 1

$ ( 1 ) $ — $ ( 2 ) $ 4

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

At March 31, 2026 and December 31, 2025, our beneficial interests were $ 2,463 and $ 2,067 , respectively, of which $ 1,737 and $ 1,338 are included in “Prepaid and other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at March 31, 2026 and December 31, 2025 was $ 447 and $ 410 , respectively, of which $ 227 and $ 216 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our beneficial interests and guarantee obligation.

At June 30, 2026 and December 31, 2025, our beneficial interests were $ 2,584 and $ 2,067 , respectively, of which $ 1,646 and $ 1,338 are included in “Prepaid and other current assets” on our consolidated balance sheets, with the remainder in “Other Assets.” The guarantee obligation at June 30, 2026 and December 31, 2025 was $ 498 and $ 410 , respectively, of which $ 263 and $ 216 are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets, with the remainder in “Other noncurrent liabilities.” Our maximum exposure to loss as a result of selling these equipment installment receivables is limited to the total amount of our beneficial interests and guarantee obligation.

Revolving Receivables Program

During 2025, we expanded our revolving agreement to transfer up to $ 2,940 of certain receivables through our bankruptcy-remote subsidiaries to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred.

We maintain a revolving agreement that allows us to transfer up to $ 3,040 of certain receivables through our bankruptcy-remote subsidiaries to various financial institutions on a recurring basis in exchange for cash equal to the gross receivables transferred.

This agreement is subject to renewal on an annual basis and the transfer limit may be expanded or reduced from time to time.

3 unchanged sentences

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

MARCH 31, 2026

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

1 unchanged sentence

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

Three months ended

Three months ended Six months ended

June 30, June 30,

2026 2025 2026 2025

Gross receivables sold/cash proceeds received 1

1 unchanged sentence

Total collections under revolving agreement

7,705 7,673 15,206 14,846

Net cash proceeds received

$ 100 $ — $ 100 $ 170

Net receivables sold 2

$ 7,597 $ 7,463 $ 14,891 $ 14,605

1 Includes initial sales of receivables of $ 0 and $ 170 for the three months ended March 31, 2026 and 2025, respectively.

1 Includes initial sales of receivables of $ 100 and $ 0 for the three months and $ 100 and $ 170 for the six months ended June 30, 2026

and 2025, respectively.

2 Receivables net of allowance and other reserves.

7 unchanged sentences

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

Suppliers had elected to sell to the third-party financial institutions $ 4,082 and $ 3,090 of our outstanding payment obligations as of March 31, 2026 and December 31, 2025, respectively.

Suppliers had elected to sell to the third-party financial institutions $ 3,689 and $ 3,090 of our outstanding payment obligations as of June 30, 2026 and December 31, 2025, respectively.

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

2 unchanged sentences

We also have arrangements with suppliers of handset inventory that allow us to extend the stated payment terms by up to approximately 120 days, with an average of 85 days outstanding, at an additional cost to us (variable rate extension fee).

We had $ 5,820 of direct supplier financing outstanding as of March 31, 2026 and $ 6,901 as of December 31, 2025, which are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

We had $ 6,725 of direct supplier financing outstanding as of June 30, 2026 and $ 6,901 as of December 31, 2025, which are included in “Accounts payable and accrued liabilities” on our consolidated balance sheets.

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

4 unchanged sentences

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

For the three months ended March 31, 2026 and 2025, we recorded vendor financing commitments of $ 732 and $ 378 , respectively.

We had $ 2,437 of vendor financing payables at March 31, 2026, with $ 1,474 included in “Accounts payable and accrued liabilities” and $ 1,892 of vendor financing payables at December 31, 2025, with $ 956 included in “Accounts payable and accrued liabilities.”

MARCH 31, 2026

For the six months ended June 30, 2026 and 2025, we recorded vendor financing commitments of $ 1,603 and $ 831 , respectively.

We had $ 2,868 of vendor financing payables at June 30, 2026, with $ 1,875 included in “Accounts payable and accrued liabilities” and $ 1,892 of vendor financing payables at December 31, 2025, with $ 956 included in “Accounts payable and accrued liabilities.”

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

4 unchanged sentences

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

March 31, December 31,

June 30, December 31,

2026 2025 2025 2024

5 unchanged sentences

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

Three months ended

Six months ended

Cash paid (received) during the period for:

2 unchanged sentences

The following table summarizes capital expenditures:

Three months ended

Six months ended

Purchase of property and equipment $ 10,486 $ 9,097

2 unchanged sentences

The following table summarizes acquisitions, net of cash acquired:

Three months ended

Six months ended

Business acquisitions 1

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1 Approximately $ 4,100 of cash paid for acquisitions was reported as investing activities from discontinued operations.

2 Total capitalized interest was $ 42 and $ 56 for the three months ended March 31, 2026 and 2025, respectively.

MARCH 31, 2026

2 Total capitalized interest was $ 91 and $ 111 for the six months ended June 30, 2026 and 2025, respectively.

JUNE 30, 2026

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

3 unchanged sentences

Forged Fiber will continue to support the accompanying acquired fiber customers retained by our Advanced Connectivity segment.

To reflect ongoing commercial arrangements following the disposal, results have been presented on a gross basis, with approximately $ 95 of operating expenses reported in continuing operations and the corresponding revenues reported in discontinued operations.

To reflect ongoing commercial arrangements following the disposal, results in the second quarter and for the first six months of 2026 have been presented on a gross basis, with approximately $ 137 and $ 232 , respectively, of operating expenses reported in continuing operations and the corresponding revenues reported in discontinued operations.

Discontinued operations were also allocated a proportionate share of goodwill, acquisition-related costs and related cash flows.

The following is a summary of operating results included in income (loss) from discontinued operations for the three months ended March 31:

A summary of operating results included in income (loss) from discontinued operations are shown in the table below:

Three months ended Six months ended

June 30, June 30,

Revenues $ 154 $ 253

8 unchanged sentences

1 Includes proportionate transaction costs.

The following are the preliminary values for the major classes of assets and liabilities associated with our discontinued operations and classified as held-for-sale on our consolidated balance sheet at March 31:

Current Assets $ 152

7 unchanged sentences

2 Held-for-sale assets are reported in “Other current assets” and held-for-sale liabilities are reported in “Accounts payable and accrued liabilities.”

MARCH 31, 2026

JUNE 30, 2026

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

15 unchanged sentences

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

First Quarter

2026 2025 Change

Second Quarter Six-Month Period

Percent Percent

2026 2025 Change 2026 2025 Change

Operating Revenues

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Equity in net income (loss) of affiliates

(29) 485 — (70) 1,925 —

Other income (expense) — net

696 767 (9.3) 1,290 1,222 5.6

Income from Continuing Operations Before Income Taxes 5,822 6,098 (4.5) 11,220 12,089 (7.2)

Income from Continuing Operations 5,038 4,861 3.6 % 9,257 9,553 (3.1) %

Operating revenues increased in the first quarter of 2026, reflecting higher Advanced Connectivity wireless and fiber revenues, including revenues from customers of our acquired mass markets fiber business.

Operating revenues in Mexico were also higher due to favorable foreign exchange impacts during the first quarter of 2026 .

Operating revenues increased in the second quarter and for the first six months of 2026, reflecting higher Advanced Connectivity fiber and wireless revenues, with fiber revenues including the impact of acquiring Lumen’s mass markets fiber business.

Operating revenues in Mexico were also higher due to favorable foreign exchange impacts .

Offsetting the increases were lower Legacy revenues as we continue to work towards the decommissioning of our copper-based legacy network.

Operations and support expenses increased in the first quarter of 2026, primarily due to higher wireless sales volumes, which drove higher equipment, selling and bad debt expenses.

T he increase was also due to higher network costs that included vendor credits in the prior year, and incremental customer costs related to our acquired mass markets fiber business .

The increase was partially offset by higher restructuring charges in the prior year, cost reductions from transformation initiatives and lower content licensing fees.

Depreciation and amortization expense decreased in the first quarter of 2026, primarily due to lower depreciation from fully depreciated legacy assets, partially offset by ongoing capital spending for strategic initiatives such as fiber and network upgrades.

MARCH 31, 2026

Operations and support expenses increased in the second quarter and for the first six months of 2026.

The increase in the second quarter was primarily due to an asset abandonment charge associated with the reprioritization of our spectrum strategy, higher advertising expense, incr emental customer costs related to our acquired mass markets fiber business and higher bad debt expenses driven by subscriber growth.

These increases were partially offset by cost reductions from transformation initiatives, lower content licensing fees and gains on tower transactions.

The increase for the first six months was primarily due to higher wireless sales volumes, which drove higher equipment, selling and bad debt expenses.

T he increase was also due to higher network costs that included vendor credits in the prior year, and

JUNE 30, 2026

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

Dollars in millions except per share amounts

Operating income increased in the first quarter of 2026.

Our operating income margin in the first quarter increased from 18.8% in 2025 to 21.1% in 2026.

Interest expense increased in the first quarter of 2026, primarily due to higher debt balances and interest rates on long-term borrowings.

Equity in net income (loss) of affiliates decreased in the first quarter of 2026, primarily due to the sale of our interest in DIRECTV Entertainment Holdings, LLC to TPG Capital on July 2, 2025.

Other income (expense) – net increased in the first quarter of 2026, primarily due to higher interest income from higher average cash balances and noncash losses on sales of nonstrategic assets in the prior year.

These increases were partially offset by lower returns on benefit-related investments.

Income tax expense decreased in the first quarter of 2026.

The decrease was primarily due to lower income from continuing operations before income tax.

Our effective tax rate was 21.8% in the first quarter of 2026, versus 21.7% in the comparable period in the prior year, reflecting larger discrete state tax benefits in 2025.

incremental customer costs related to our acquired mass markets fiber business, which were partially offset by cost reductions from transformation initiatives, higher restructuring charges in the prior year and lower content licensing fees.

Depreciation and amortization expense decreased in the second quarter and for the first six months of 2026, primarily due to lower depreciation from fully depreciated legacy assets, partially offset by ongoing capital spending for strategic initiatives such as fiber and network upgrades.

Operating income increased in the second quarter and for the first six months of 2026.

Our operating income margin in the second quarter increased from 21.1% in 2025 to 22.3% in 2026 and for the first six months increased from 19.9% in 2025 to 21.7% in 2026.

Interest expense increased in the second quarter and for the first six months of 2026, primarily due to higher debt balances and interest rates on long-term borrowings.

Equity in net income (loss) of affiliates decreased in the second quarter and for the first six months of 2026, primarily due to the sale of our interest in DIRECTV Entertainment Holdings, LLC to TPG Capital on July 2, 2025.

Other income (expense) – net decreased in the second quarter and increased for the first six months of 2026.

The decrease in the second quarter was primarily due to a gain recognized in the second quarter of 2025 associated with a prior disposition, partially offset by higher returns on benefit-related investments and interest income from higher average cash balances.

The increase for the first six months was primarily due to interest income from higher average cash balances.

Income tax expense decreased in the second quarter and for the first six months of 2026.

The decrease was primarily due to lower income from continuing operations before income tax and the resolution of certain Internal Revenue Service (IRS) examinations.

Our effective tax rate was 13.5% in the second quarter and 17.5% for the first six months of 2026, versus 20.3% and 21.0% in the comparable periods in the prior year, reflecting the resolution of certain IRS examinations.

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

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

MARCH 31, 2026

JUNE 30, 2026

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

1 unchanged sentence

ADVANCED CONNECTIVITY SEGMENT

First Quarter

2026 2025 Percent Change

Second Quarter Six-Month Period

2026 2025 Percent Change 2026 2025 Percent Change

Segment Operating Revenues

29 unchanged sentences

18,361 18,195 0.9 %

First Quarter

2026 2025 Percent Change

Second Quarter Six-Month Period

2026 2025 Percent Change 2026 2025 Percent Change

Retail Wireless Net Adds 1, 2

5 unchanged sentences

Phone churn 3

1.20 % 1.16 % 4 BP

1.12 % 1.17 % (5) BP 1.16 % 1.15 % 1 BP

Postpaid phone churn 3

0.89 % 0.83 % 6 BP

0.86 % 0.87 % (1) BP 0.87 % 0.85 % 2 BP

Prepaid phone churn 3

2.62 % 2.55 % 7 BP

2.30 % 2.43 % (13) BP 2.46 % 2.49 % (3) BP

1 Wireless subscribers and net additions exclude customers with free lines provided under promotional pricing until such lines are converted to paying lines.

2 unchanged sentences

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

MARCH 31, 2026

JUNE 30, 2026

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

9 unchanged sentences

AT&T Internet Air (AIA)

1,951 1,006 93.9

Business Fixed Wireless 2

First Quarter

2026 2025 Percent Change

660 466 41.6 %

Second Quarter Six-Month Period

2026 2025 Percent Change 2026 2025 Percent Change

Internet Net Adds 3

646 509 26.9 % 1,230 1,025 20.0 %

Fiber 367 269 36.4 659 552 19.4

344 243 41.6 617 504 22.4

AT&T Business Fiber 1

23 26 (11.5) 42 48 (12.5)

Fixed Wireless 279 240 16.3 571 473 20.7

1 unchanged sentence

Business Fixed Wireless 2

64 37 73.0 % 117 89 31.5 %

1 Includes fiber broadband internet for businesses and excludes dedicated and ethernet fiber.

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3 Excludes acquisition-related activity and the impact of customer disconnections resulting from the termination of AIA services in areas with unfavorable regulatory requirements in the first quarter of 2025.

Wireless service revenue increased in the first quarter of 2026 driven by growth in retail wireless subscribers in underpenetrated categories and converged accounts, partially offset by promotional activity.

Wireless service revenue increased in the second quarter and for the first six months of 2026 driven by growth in retail wireless subscribers in underpenetrated categories and converged accounts, and pricing actions that were partially offset by promotional discounts on wireless subscriber additions.

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

Phone churn was slightly higher in the first quarter of 2026, driven by the competitive dynamics of the industry.

Advanced home internet revenue increased in the first quarter of 2026 driven by an increase in fiber and AIA revenues.

Fiber revenues increased 21.2% in the first quarter of 2026, due to growth in fiber customers, including customers of our acquired mass markets fiber business .

Phone churn was lower in the second quarter and slightly higher for the first six months of 2026, reflecting the competitive dynamics of the industry.

Advanced home internet revenue increased in the second quarter and for the first six months of 2026 driven by an increase in fiber and AIA revenues.

Fiber revenues increased 21.4% and 21.3% in the second quarter of 2026 and for the first six months, due to growth in fiber customers, including customers of our acquired mass markets fiber business .

We expect revenue growth to continue as we invest further in building our fiber footprint.

AIA revenue increases exceeded 100% as we continue to make these services available in additional markets.

Business fiber and advanced connectivity revenues increased in the first quarter of 2026 driven by higher fiber and fixed wireless revenues.

Business transitional and other revenues decreased in the first quarter of 2026 driven by lower demand for Virtual Private Network (VPN) and wholesale services, both of which we expect to continue.

Other service revenues decreased in the first quarter of 2026, reflecting the continued decline in the number of consumer VoIP customers.

Equipment revenue increased in the first quarter of 2026, primarily due to higher wireless device sales volumes.

Operations and support expenses increased in the first quarter of 2026, primarily due to higher wireless sales volumes, which drove higher equipment, selling and bad debt expenses.

The increase was also due to higher network costs that included vendor credits in the prior year, and incremental customer costs related to our acquired mass markets fiber business.

These increases were partially offset by cost reductions from transformation initiatives and lower content licensing fees.

MARCH 31, 2026

AIA revenue increases exceeded 100% as we continue to make these services available in additional markets and ramp marketing and promotion activities.

Business fiber and advanced connectivity revenues increased in the second quarter and for the first six months of 2026 driven by higher fiber and fixed wireless revenues.

Business transitional and other revenues decreased in the second quarter and for the first six months of 2026 driven by lower demand for Virtual Private Network (VPN) and wholesale services, both of which we expect to continue.

Other service revenues decreased in the second quarter and for the first six months of 2026, reflecting the continued decline in the number of consumer VoIP customers.

Equipment revenue decreased in the second quarter and increased for the first six months of 2026, with lower hardware sales to business customers in the second quarter offset by higher wireless device sales volumes.

The increase for the first six months was primarily driven by higher wireless device sales volumes.

JUNE 30, 2026

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

Dollars in millions except per share amounts

Depreciation expense decreased in the first quarter of 2026, primarily due to lower depreciation from fully depreciated legacy assets, partially offset by ongoing capital spending for strategic initiatives such as fiber and network upgrades.

Operations and support expenses increased in the second quarter and for the first six months of 2026.

The increase in the second quarter was primarily due to higher advertising expense, incre mental customer costs related to our acquired mass markets fiber business and higher bad debt expenses driven by subscriber growth.

These increases were partially offset by cost reductions from transformation initiatives, lower content licensing fees and gains on tower transactions.

The increase for the first six months was primarily due to higher wireless sales volumes, which drove higher equipment, selling and bad debt expenses.

The increase was also due to higher network costs that included vendor credits in the prior year, and incremental customer costs related to our acquired mass markets fiber business, which were partially offset by cost reductions from transformation initiatives and lower content licensing fees.

Depreciation expense decreased in the second quarter and for the first six months of 2026, primarily due to lower depreciation from fully depreciated legacy assets, partially offset by ongoing capital spending for strategic initiatives such as fiber and network upgrades.

Depreciation of our shared network, including copper-based assets prior to decommissioning, is managed in our Advanced Connectivity segment, consistent with our composite group depreciation methodology.

Operating income increased in the first quarter of 2026.

Our Advanced Connectivity operating income margin in the first quarter increased from 22.0% in 2025 to 24.1% in 2026.

Our Advanced Connectivity EBITDA margin in the first quarter increased from 40.3% in 2025 to 40.6% in 2026.

Operating income increased in the second quarter and for the first six months of 2026.

Our Advanced Connectivity operating income margin in the second quarter increased from 22.2% in 2025 to 25.7% in 2026 and for the first six months increased from 22.1% in 2025 to 24.9% in 2026.

Our Advanced Connectivity EBITDA margin in the second quarter increased from 40.5% in 2025 to 42.0% in 2026 and for the first six months increased from 40.4% in 2025 to 41.3% in 2026.

LEGACY SEGMENT

First Quarter

2026 2025 Percent Change

Second Quarter Six-Month Period

2026 2025 Percent Change 2026 2025 Percent Change

Segment Operating Revenues $ 1,632 $ 2,202 (25.9) % $ 3,400 $ 4,570 (25.6) %

6 unchanged sentences

$ 523 $ 959 (45.5) % $ 1,135 $ 1,978 (42.6) %

Operating revenues decreased in the first quarter of 2026, driven by lower demand for legacy services, which we expect to continue as we decommission our copper-based legacy network.

Operations and support represent direct operating costs and decreased in the first quarter of 2026.

Operating revenues decreased in the second quarter and for the first six months of 2026, driven by lower demand for legacy services, which we expect to continue as we decommission our copper-based legacy network.

Operations and support represent direct operating costs and decreased in the second quarter and for the first six months of 2026.

Expense declines were primarily driven by lower personnel and other costs resulting from the decommissioning of our legacy network and lower fulfillment cost amortization, which we expect to continue.

These decreases were partially offset by vendor credits in the prior year.

Operating income decreased in the first quarter of 2026.

Our Legacy operating income and EBITDA margins in the first quarter decreased from 43.0% in 2025 to 34.6% in 2026.

LATIN AMERICA SEGMENT First Quarter

2026 2025 Percent Change

These decreases were partially offset by vendor settlements.

Operating income decreased in the second quarter and for the first six months of 2026.

Our Legacy operating income and EBITDA margins in the second quarter decreased from 43.6% in 2025 to 32.0% in 2026 and for the first six months decreased from 43.3% in 2025 to 33.4% in 2026.

JUNE 30, 2026

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

Dollars in millions except per share amounts

LATIN AMERICA SEGMENT Second Quarter

Six-Month Period

2026 2025 Percent Change 2026 2025 Percent Change

Segment Operating Revenues

8 unchanged sentences

$ 38 $ 46 (17.4) % $ 58 $ 89 (34.8) %

MARCH 31, 2026

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

Dollars in millions except per share amounts

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

5 unchanged sentences

Mexico Wireless Net Additions

First Quarter

(in 000s) 2026 2025 Percent Change

Second Quarter

Six-Month Period

(in 000s) 2026 2025 Change 2026 2025 Percent Change

Postpaid 369 183 — % 706 343 — %

2 unchanged sentences

Total Mexico Wireless Net Additions (668) 235 — % (1,245) 267 — %

Service revenues increased in the first quarter of 2026, primarily due to favorable foreign exchange impacts and growth in subscribers.

Equipment revenues increased in the first quarter of 2026, primarily due to favorable foreign exchange impacts and higher equipment sales.

Operations and support expenses increased in the first quarter of 2026, driven by unfavorable foreign exchange rates and increased sales volume, resulting in higher equipment costs and bad debt expenses.

Depreciation and amortization expense increased in the first quarter of 2026, driven by unfavorable foreign exchange rates, accelerated depreciation on certain assets and higher in-service assets.

Operating income decreased in the first quarter of 2026.

Our Mexico operating income margin in the first quarter decreased from 4.4% in 2025 to 1.7% in 2026.

Our Mexico EBITDA margin in the first quarter decreased from 19.9% in 2025 to 18.8% in 2026.

MARCH 31, 2026

Service revenues increased in the second quarter and for the first six months of 2026, primarily due to favorable foreign exchange impacts and growth in postpaid subscribers and ARPU.

Equipment revenues increased in the second quarter and for the first six months of 2026, substantially due to favorable foreign exchange impacts.

Operations and support expenses increased in the second quarter and for the first six months of 2026, driven by unfavorable foreign exchange rates and higher bad debt expenses.

Depreciation and amortization expense increased in the second quarter and for the first six months of 2026, driven by unfavorable foreign exchange rates and spectrum renewal fees, with accelerated depreciation impacting the first three months of the year.

Operating income decreased in the second quarter and for the first six months of 2026.

Our Mexico operating income margin in the second quarter decreased from 4.4% in 2025 to 3.1% in 2026 and for the first six months decreased from 4.4% in 2025 to 2.4% in 2026.

Our Mexico EBITDA margin in the second quarter decreased from 19.1% in 2025 to 18.5% in 2026 and for the first six months decreased from 19.5% in 2025 to 18.6% in 2026.

JUNE 30, 2026

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

3 unchanged sentences

Advanced Connectivity

First Quarter

2026 2025 Percent Change

Second Quarter Six-Month Period

2026 2025 Percent Change 2026 2025 Percent Change

Operating revenues

16 unchanged sentences

Advanced Connectivity

First Quarter

2026 2025 Percent Change

Second Quarter Six-Month Period

2026 2025 Percent Change 2026 2025 Percent Change

Operating revenues

16 unchanged sentences

$ 226 $ (267) — % $ 538 $ (459) — %

MARCH 31, 2026

JUNE 30, 2026

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

4 unchanged sentences

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

For a discussion of these regulations, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Regulatory Landscape” in our Annual Report on Form 10-K for the year-ended December 31, 2025.

On November 15, 2023, pursuant to a congressional directive, the FCC adopted rules to “facilitate” equal access to broadband and prevent digital discrimination in broadband access.

The rules prohibited covered entities from implementing policies or practices not justified by genuine issues of technical or economic feasibility, that differentially impact consumers’ access to broadband internet access service based on prohibited characteristics (including income level, race and ethnicity) or that have such differential impact, whether intentional or not.

The rules broadly applied prospectively to all aspects of an ISP’s service that could impact a consumer’s ability to access broadband.

Several business associations filed appeals challenging the rules and several of those appeals were consolidated in the Eighth Circuit.

On May 6, 2026, the Eighth Circuit vacated the FCC’s digital discrimination rules, holding that under the plain language of the implementing law, the FCC could not adopt rules imposing “disparate impact” liability.

The FCC will need to adopt new rules consistent with the statute.

For a further discussion of regulations impacting AT&T and its subsidiaries, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operation—Regulatory Landscape” in our Annual Report on Form 10-K for the year-ended December 31, 2025.

LIQUIDITY AND CAPITAL RESOURCES

Continuing operations for three months ended March 31,

Continuing operations for the six months ended June 30,

Cash provided by operating activities

4 unchanged sentences

(1,417) (598)

March 31, December 31,

June 30, December 31,

Cash and cash equivalents

1 unchanged sentence

143,954 136,100

We had $11,964 in cash and cash equivalents available at March 31, 2026, decreasing $6,270 since December 31, 2025.

Our cash balance at June 30, 2026 remained elevated as we anticipate the completion of our pending transaction with EchoStar Corporation (EchoStar).

We had $17,570 in cash and cash equivalents available at June 30, 2026, decreasing $664 since December 31, 2025.

Cash and cash equivalents included cash of $5,744 and money market funds and other cash equivalents of $11,826.

1 unchanged sentence

and may be subject to restrictions on repatriation.

For the first three months of 2026, cash inflows were primarily provided by cash receipts from operations, including cash from our sale and transfer of our receivables to third parties.

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

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

For the first six months of 2026, cash inflows were primarily provided by cash receipts from operations, including cash from our sale and transfer of our receivables to third parties.

These inflows exceeded cash used to meet the needs of the business, including, but not limited to, payment of operating expenses.

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

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

Cash Provided by Operating Activities from Continuing Operations

During the first three months of 2026, cash provided by operating activities was $7,595, compared to $9,049 for the first three months of 2025, with prior-year operating cash flows including $1,423 of distributions from DIRECTV.

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

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

In addition, for payments to suppliers of handset inventory, as part of our working capital initiatives, we have arrangements that allow us to extend the stated payment terms by up to approximately 120 days, with an average of 85 days outstanding, at an additional cost to us (referred to as direct supplier financing).

The net impact of direct supplier financing, including principal and interest payments, was to decrease cash from operating activities approximately $1,136 and $2,042 for the three months ended March 31, 2026 and 2025, respectively.

All supplier financing payments are due within one year.

(See Note 10)

Cash Used in Investing Activities from Continuing Operations

For the first three months of 2026, cash used in investing activities totaled $7,484 and consisted primarily of $4,877 (including interest during construction) for capital expenditures.

During the first three months of 2026, investing activities also included $413 of FirstNet sustainability payments, net of reinvestment, and $574 related to the note receivable payment from DIRECTV.

In addition, we paid $1,018 in connection with our January 2026 acquisition of select spectrum licenses from United States Cellular Corporation (UScellular) and $5,756 in connection with our February 2026 acquisition of Lumen’s Mass Markets fiber

MARCH 31, 2026

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

Dollars in millions except per share amounts

business, of which $1,656 was included in investing activities from continuing operations and $4,100 was included as investing activities from discontinued operations (see Notes 1, 8 and 12).

We enter into multi-year software licensing arrangements, which are typically paid over the license terms of two to five years and referred to as vendor financing.

Additionally, for capital improvements, we have negotiated favorable vendor payment terms of 120 days or more with some of our vendors, which are also referred to as vendor financing.

Vendor financing is excluded from capital expenditures and reported as financing activities.

For the first three months of 2026, vendor financing payments were $212, compared to $203 for the first three months of 2025.

Capital expenditures for the first three months of 2026 were $4,877, and when including $212 cash paid for vendor financing, capital investment was $5,089 ($609 higher than the prior-year comparable period).

The vast majority of our capital expenditures are spent on our networks, including product development and related support systems.

During the first three months of 2026, we placed $732 of productive assets in service under vendor financing arrangements (compared to $378 in the prior-year comparable period).

The amount of capital expenditures is influenced by demand for services and products, capacity needs and network enhancements.

On August 25, 2025, we agreed to purchase Federal Communications Commission (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 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.

Cash Provided by or Used in Financing Activities from Continuing Operations

For the first three months of 2026, cash used in financing activities totaled $2,097 and was comprised of debt repayments, common stock repurchases, dividend payments, and vendor financing payments, partially offset by issuances of long-term debt.

A tabular summary of our debt activities for the three months ended March 31, 2026 is as follows:

Three months ended March 31, 2026

Issuance of Notes and Debentures:

USD notes $ 6,465

Debt Issuances $ 8,098

USD notes $ (3,741)

EUR notes (1,103)

Repayments of long-term debt $ (5,247)

The weighted average interest rate of our long-term debt portfolio, including credit agreement borrowings and the impact of derivatives, was approximately 4.3% as of March 31, 2026 and 4.2% as of December 31, 2025.

We had $137,017 of total notes and debentures outstanding at March 31, 2026.

This also included Euro, British pound sterling, Canadian dollar, Australian dollar, and Swiss franc denominated debt that totaled approximately $34,994.

At March 31, 2026, we had $6,818 of long-term debt maturing within one year.

We had no outstanding commercial paper or other short-term borrowings on March 31, 2026.

For the first three months of 2026, we paid $212 of cash under our vendor financing program, compared to $203 in the prior-year comparable period.

Total vendor financing payables included in our March 31, 2026 consolidated balance sheet were $2,437, with $1,474 due within one year (in “Accounts payable and accrued liabilities”) and the remainder predominantly due within five years (in “Other noncurrent liabilities”).

MARCH 31, 2026

During the first six months of 2026, cash provided by operating activities was $18,396, compared to $18,812 for the first six months of 2025, with the prior year benefiting from $1,675 of cash received from DIRECTV, net of related tax payments.

Cash from operations in 2026 includes increases resulting from lower cash tax payments and the timing of working capital payments, which were partially offset by $100 of voluntarily contribution to our pension plans.

JUNE 30, 2026

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

What changed 10-Q

Item 1. Financial Statements