AT&T INC. (T)

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Dollars in millions except per share amounts

RESULTS OF OPERATIONS

AT&T Inc. is referred to as “we,” “AT&T” or the “Company” throughout this document. AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc., and the names of the particular subsidiaries and affiliates providing the services generally have been omitted. AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications and technology industries. You should read this discussion in conjunction with the consolidated financial statements and accompanying notes (Notes). Percentage increases and decreases that are not considered meaningful are denoted with a dash.

On February 2, 2026, we closed our transaction with Lumen Technologies, Inc. (Lumen) and acquired substantially all of Lumen’s Mass Markets fiber business. The acquisition included customer relationships, which we include with our advanced home internet services and fiber network assets that were placed in a wholly owned subsidiary, Forged Fiber 37 Services, LLC (Forged Fiber). We plan to sell a controlling interest in Forged Fiber to an equity partner that will co-invest in the ongoing business. As such, Forged Fiber met the criteria of held-for-sale and accordingly is reflected as discontinued operations in the accompanying financial statements and are not included in our discussion of continuing operations. (See Notes 8 and 12)

Consolidated Results Our financial results from continuing operations are summarized in the discussions that follow. Additional analysis is discussed in our “Segment Results” section.

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. 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. 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. 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.

24

AT&T INC.

MARCH 31, 2026

Item 2. 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.

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. Effective with our first-quarter 2026 reporting, we realigned our internal management and reporting structure to reflect the evolution of our business model to focus on delivering converged advanced connectivity services across 5G and fiber to consumer and business customers. This new segment reporting structure also provides better visibility into the progress of exiting our copper-based legacy operations.

Our segment results presented in Note 4 and discussed below follow our internal management reporting. We evaluate segment performance based on operating income as well as EBITDA and/or EBITDA margin. See “Discussion and Reconciliation of Non-GAAP Measures” for a reconciliation of EBITDA and EBITDA margin to the most comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP). We have three reportable segments: Advanced Connectivity, Legacy and Latin America.

The Advanced Connectivity segment provides domestic 5G and fiber-based wireless, internet and other advanced connectivity services to consumer and business customers. We also provide supplemental information on our advanced consumer and business customer relationships as the product lifecycles in these customer categories influence the growth trajectories of Advanced Connectivity segment results. The Legacy segment provides domestic legacy voice and data services to consumer and business customers over our copper-based network. Legacy segment results include revenues derived from copper-based services and direct operating costs. The Latin America segment provides wireless service and equipment in Mexico.

25

AT&T INC.

MARCH 31, 2026

Item 2. 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 Advanced Connectivity:

26

AT&T INC.

MARCH 31, 2026

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Dollars in millions except per share amounts

[[GREPCENT_TABLE]]
[["Internet"],["","","","March 31,"],["(in 000s)","","","","","2026","2025","Percent Change"],["Internet Connections","","","","","14,833","11,443","29.6","%"],["Fiber","","","","","12,501","10,211","22.4"],["AT&T Fiber","","","","","11,800","9,592","23.0"],["AT&T Business Fiber1","","","","","701","619","13.2"],["Fixed Wireless","","","","","2,332","1,232","89.3"],["AT&T Internet Air (AIA)","","","","","1,736","803","\u2014"],["Business Fixed Wireless2","","","","","596","429","38.9"],["","","","","","First Quarter"],["","","","","","2026","2025","Percent Change"],["Internet Net Adds3","","","","","584","516","13.2"],["Fiber","","","","","292","283","3.2"],["AT&T Fiber","","","","","273","261","4.6"],["AT&T Business Fiber1","","","","","19","22","(13.6)"],["Fixed Wireless","","","","","292","233","25.3"],["AT&T Internet Air (AIA)","","","","","239","181","32.0"],["Business Fixed Wireless2","","","","","53","52","1.9","%"],["1Includes fiber broadband internet for businesses and excludes dedicated and ethernet fiber."],["2Includes AT&T Internet Air for Business and historical fixed wireless services. Excludes integrated gateway wireless connections used for secondary or back-up connectivity."],["3Excludes 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."]

[Excerpt truncated for page length; source filing is linked above.]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

AT&T Inc. is referred to as “we,” “AT&T” or the “Company” throughout this document. AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc., and the names of the particular subsidiaries and affiliates providing the services generally have been omitted. AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications and technology industries. You should read this discussion in conjunction with the consolidated financial statements and accompanying notes (Notes).

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this document generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this document can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10‑K for the fiscal year ended December 31, 2024.

We have two reportable segments: Communications and Latin America. Our segment results presented in Note 4 and discussed below follow our internal management reporting. Each segment’s percentage calculation of total segment operating revenue is derived from our segment results table in Note 4. Segment operating income is primarily attributable to our Communications segment due to prior-years operating losses in Latin America. Percentage increases and decreases that are not considered meaningful are denoted with a dash.

The Communications segment accounted for approximately 97% of our 2025 and 2024 total segment operating revenues and accounted for substantially all segment operating income in 2025 and 2024. This segment provides services to businesses and consumers located in the United States and businesses globally. Our business strategies reflect integrated product offerings that cut across product lines and utilize shared assets. This segment contains the following business units:

•Mobility provides nationwide wireless service and equipment.

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

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

The Latin America segment accounted for approximately 3% of our 2025 and 2024 total segment operating revenues and less than 1% of segment operating income in 2025 and 2024. This segment provides wireless service and equipment in Mexico.

20

RESULTS OF OPERATIONS

Consolidated Results Our financial results are summarized in the following table. We then discuss factors affecting our overall results. Additional analysis is discussed in our “Segment Results” section. We also discuss our expected revenue and expense trends for 2026 in the “Operating Environment and Trends of the Business” section.

OVERVIEW

Operating revenues increased in 2025, reflecting higher Mobility and Consumer Wireline revenues, partially offset by declines in Business Wireline. Operating revenues in Mexico were also higher, overcoming unfavorable foreign exchange impacts during the first half of 2025.

Operations and support expenses increased in 2025, reflecting higher sales volumes in our Mobility business unit, which drove higher equipment, advertising, selling and bad debt expenses. Also contributing to higher costs were approximately $440 of apportioned legal settlements during 2025, higher network-related expenses and advertising costs due to the launch of a new campaign in 2025. Increases were partially offset by declines from our continued transformation efforts and lower content licensing fees.

Asset impairments and abandonments and restructuring decreased in 2025, with higher impairments in 2024. Noncash charges in 2024 primarily related to a goodwill impairment charge of $4,422 associated with our Business Wireline reporting unit as well as restructuring charges, including termination fees associated with our network modernization program to deploy commercial scale open radio access network (Open RAN). Expenses in 2025 primarily relate to restructuring severance charges.

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

Operating income increased in 2025 and decreased in 2024. Our operating margin was 19.2% in 2025, compared to 15.6% in 2024, and 19.2% in 2023.

Interest expense increased in 2025, primarily due to lower capitalized interest associated with spectrum acquisitions. The increase was partially offset by lower average commercial paper balances.

21

Equity in net income of affiliates decreased in 2025, reflecting our sale of DIRECTV in July 2025. The decrease was partially offset by cash distributions received by AT&T in excess of the carrying amount of our investment in DIRECTV prior to disposition (see Notes 10 and 19).

Other income (expense) – net increased in 2025. The increase was primarily due to a gain of approximately $5,600 recognized on the sale of our interest in DIRECTV (see Note 10). The increase was also driven by a gain on a prior disposition and noncash impairment charges for a held-for-sale business and our SKY Mexico equity investment. Partially offsetting the increases were lower pension and postretirement benefit credits and lower returns on other benefit-related investments.

Income tax expense decreased in 2025, primarily due to a lower effective tax rate driven by a tax-free gain on sale of DIRECTV in 2025 and a goodwill impairment in 2024, which is not deductible for tax purposes.

Our effective tax rate was 13.4% in 2025, 26.6% in 2024, and 21.3% in 2023, reflecting the nonrecognition of income taxes on the DIRECTV gain and larger discrete tax benefits in 2025, and the goodwill impairment in 2024, which was not deductible for tax purposes.

Segment Results Our segments are comprised of strategic business units or other operations that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. We evaluate segment performance based on operating income as well as EBITDA and/or EBITDA margin. See “Discussion and Reconciliation of Non-GAAP Measures” for a reconciliation of EBITDA and EBITDA margin to the most comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles (GAAP).

Operating revenues increased in 2025, driven by increases in Mobility service revenue and our Consumer Wireline business unit, driven by gains in wireless and broadband services. Partially offsetting these increases were declines in our Business Wireline business unit, which reflects lower demand for legacy services.

Operating income increased in 2025 and decreased in 2024. The 2025 operating income reflects an increase in operating income from our Mobility and Consumer Wireline business units, partially offset by a decrease in our Business Wireline business unit. Our Communications segment operating income margin was 23.1% in 2025, 23.0% in 2024 and 23.6% in 2023. Our Communications segment EBITDA margin was 39.6% in 2025, 39.5% in 2024 and 38.3% in 2023.

22

Communications Business Unit Discussion

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

23

Service revenue increased during 2025, largely due to growth from subscriber gains, partially offset by promotional activity.

ARPU

Postpaid ARPU increased in 2025 reflecting pricing actions that were largely offset by increased promotional activity, growth in our converged customer relationships, and our success in attracting customers in underpenetrated segments with lower ARPUs but attractive lifetime values, such as age 55-plus in our “value customers.”

Churn

The effective management of subscriber churn is critical to our ability to maximize revenue growth and to maintain and improve margins. Postpaid churn and postpaid phone churn were higher in 2025, partially driven by an increase in our customer base that reached the end of device financing periods, which normalized in the second half of 2025.

Equipment revenue increased in 2025, primarily driven by higher wireless device sales volumes.

Operations and support expenses increased in 2025, primarily due to higher sales volumes, which drove higher equipment, advertising, selling and bad debt expenses. The increase also reflected higher advertising due to the launch of a new campaign, and higher network costs that were partially offset by lower content licensing fees and expense declines from transformation efforts.

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

Operating income increased in 2025 and 2024. Our Mobility operating income margin was 30.4% in 2025, 30.9% in 2024 and 30.8% in 2023. Our Mobility EBITDA margin was 42.0% in 2025, 42.8% in 2024 and 40.9% in 2023.

Legacy and other transitional services revenues decreased in 2025, driven by lower demand for legacy and VPN services, which we expect to continue as we decommission our copper-based legacy network. These revenue declines were partially offset by targeted pricing actions in the first quarter of 2025.

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

Equipment revenues decreased in 2025, driven by lower customer premises equipment sales, which can vary from year to year based on the nature of services purchased.

Operations and support expenses decreased in 2025, primarily driven by lower personnel and customer support costs associated with ongoing transformation initiatives. Expense declines also include lower network and advertising costs.

Depreciation expense increased in 2025, primarily due to ongoing capital investment for strategic initiatives such as fiber, partially offset by fully depreciated legacy assets.

24

Operating income decreased in 2025 and 2024. Our Business Wireline operating income margin was (4.7)% in 2025, (0.5)% in 2024 and 6.2% in 2023. Our Business Wireline EBITDA margin was 29.1% in 2025, 29.1% in 2024 and 31.9% in 2023.

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

Broadband revenues increased in 2025, driven by an increase in fiber revenues of 17.0%. Higher fiber revenues reflect an increase in fiber customers, which we expect to continue as we invest further in building our fiber footprint, and higher ARPU. This increase also includes growth in AIA revenues and was partially offset by declines in copper-based broadband services.

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

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

Operations and support expenses decreased in 2025, driven by lower customer support costs and content licensing fees, offset by higher network-related expenses and marketing costs.

Depreciation expense increased in 2025, primarily due to ongoing capital spending for strategic initiatives such as fiber and network upgrades and expansion, partially offset by fully depreciated legacy assets.

Operating income increased in 2025 and 2024. Our Consumer Wireline operating income margin was 10.9% in 2025, 6.4% in 2024 and 4.9% in 2023. Our Consumer Wireline EBITDA margin was 37.0% in 2025, 33.4% in 2024 and 31.3% in 2023.

25

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

Service revenues increased in 2025, reflecting growth in subscribers and ARPU, partially offset by unfavorable foreign exchange impacts.

Equipment revenues increased in 2025, driven by higher equipment sales, partially offset by unfavorable foreign exchange impacts.

Operations and support expenses increased in 2025, driven by increased sales volume, resulting in higher equipment, selling and bad debt expense, partially offset by favorable impact of foreign exchange.

Depreciation expense increased in 2025, primarily due to accelerated depreciation on certain network assets and higher in-service assets, partially offset by favorable impact of foreign exchange.

Operating income improved in 2025 and 2024. Our Mexico operating income margin was 3.3% in 2025, 0.9% in 2024 and (3.6)% in 2023. Our Mexico EBITDA margin was 18.6% in 2025, 16.5% in 2024 and 14.8% in 2023.

OPERATING ENVIRONMENT AND TRENDS OF THE BUSINESS

2026 Revenue Trends We expect revenue growth in our wireless and broadband businesses as customers demand instant connectivity and higher speeds made possible by wireless network enhancements through 5G deployment and our fiber network expansion. We believe that our simplified go-to-market strategy for 5G in underpenetrated markets will continue to contribute

26

to wireless subscriber and service revenue growth and that expansion of our fiber and AIA serviceable locations will drive greater demand for broadband services. We expect that an increasing portion of our revenues will come from converged customers with seamless connectivity through an innovative product portfolio and strong customer relationships.

As we expand our fiber reach, we will be orienting our business portfolio to leverage this opportunity to offset continuing declines in legacy Business Wireline products by growing connectivity with small to mid-sized businesses. We plan to use our strong fiber and wireless assets, broad distribution and integrated product offerings to strengthen our overall market position. We will continue to rationalize our product portfolio with a longer-term shift of the business to fiber and wireless connectivity, and growth in value-added services. As customers are demanding faster and more reliable services, we are decommissioning our legacy copper network and enhancing our offerings to include services that provide better experiences over newer technologies, such as AT&T Internet Air.

2026 Expense Trends During 2026, we expect expense trends consistent with the prior year, and that we will continue to focus on efficiency, led by our cost transformation initiative. We expect the spending required to support growth and efficiency initiatives, primarily our continued deployment of fiber and 5G, to pressure expense trends in 2026. These investments will help prepare us to meet the continued increase in customer demand for enhanced wireless and broadband services, including on-the-go video streaming, augmented reality, “smart” technologies, user generated content and AI. Our network modernization efforts should result in a more efficient use of capital and lower network-related expenses in the coming years. Furthermore, access to our network and newer technology may drive customers to upgrade devices and equipment, the expenses associated with those equipment sales are expected to contribute to higher costs.

We continue to transform our operations to be more efficient and effective. We are restructuring businesses, working with regulators and customers to sunset legacy networks, improving customer service and ordering functions through digital transformation, sizing our support costs and staffing with current activity levels, and reassessing overall benefit costs. We also expect cost savings through AI-driven efficiencies in network design and operations, software development, sales, marketing, customer support services and general and administrative costs.

Market Conditions In recent years, uncertainty surrounding global growth rates, tariffs, inflation and a higher interest rate environment continued to produce volatility in the credit, currency and equity markets. We expect ongoing pressure on pricing during 2026 as we respond to the geopolitical and macroeconomic environment and our competitive marketplace, especially in wireless services.

Included on our consolidated balance sheets are assets held by benefit plans for the payment of future benefits. Our pension plans are subject to funding requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). We plan to voluntarily contribute approximately $350 to our pension plans in 2026 and expect only minimal ERISA contribution requirements. Investment returns on these assets depend largely on trends in the economy, and a weakness in the equity, fixed income and real asset markets could require us to make future contributions to the pension plans. In addition, our policy of recognizing actuarial gains and losses related to our pension and other postretirement plans in the period in which they arise subjects us to earnings volatility caused by changes in market conditions; however, these actuarial gains and losses do not impact segment performance as they are required to be recorded in “Other income (expense) – net.” Changes in our discount rate, which are tied to changes in the bond market, and changes in the performance of equity markets, may have significant impacts on the valuation of our pension and other postretirement obligations at the end of 2026 (see “Critical Accounting Policies and Estimates”).

Expected Growth Areas Over the next few years, we expect our growth to come from wireless and IP-based fiber broadband services. We provide integrated services to diverse groups of customers in the United States. on a converged telecommunications network utilizing different technological platforms. In 2026, our key initiatives include:

•Continuing our wireless subscriber momentum and 5G deployment, with expansion of wireless subscribers in underpenetrated markets and converged connectivity.

•Continuing our fiber deployment, improving fiber penetration, growing AT&T Internet Air services, accelerating connectivity growth and increasing broadband revenues, inclusive of impact of integrating recent acquisitions of spectrum and fiber assets.

•Continuing our deployment of Open RAN to build a more robust ecosystem of network infrastructure providers and suppliers, fostering lower network costs, improved operational efficiencies and allowing for continued investment in our fast-growing broadband network.

•Continuing to drive efficiencies and a competitive advantage through cost transformation initiatives, including modernization of our IT infrastructure and product simplification.

Wireless We expect to continue to deliver revenue growth in the coming years. We are in a period of rapid growth in wireless video and data usage and believe that there are substantial opportunities available for next-generation integrated services that

27

combine technologies and services. As of December 31, 2025, we served 145 million wireless subscribers in North America, with 120 million in the United States.

Our LTE technology covers over 441 million people in North America, and in the United States, we cover all major metropolitan areas and over 337 million people. At December 31, 2025, our network covers more than 322 million people with 5G technology in the United States and North America. When combined with our upgraded backhaul network, we provide enhanced network capabilities and superior mobile broadband speeds for data and video services.

Our networks covering both the United States and Mexico have enabled our customers to use wireless services without roaming on other companies’ networks. At December 31, 2025, we provided LTE coverage to over 104 million people in Mexico.

Integration of Wireless and Fiber Services The communications industry has evolved into internet-based technologies capable of converging the offering of wireline and wireless services. As the owner and operator of scaled wireless and fiber networks, we plan to continue to focus on expanding our wireless network capabilities and providing broadband offerings that allow customers to integrate their home or business fixed services with their mobile service. We intend to continue to develop and provide unique integrated mobile and broadband/fiber solutions.

REGULATORY LANDSCAPE

AT&T subsidiaries operating within the United States are subject to federal and state regulatory authorities. While these issues may apply only to certain subsidiaries, the words “we,” “AT&T” and “our” are used to simplify the discussion. The following discussions are intended as a condensed summary of the issues rather than as a comprehensive legal analysis and description of all of these specific issues.

International Regulation

Our subsidiaries operating outside the United States are subject to the jurisdiction of regulatory authorities in the territories in which the subsidiaries operate. Our licensing, compliance and advocacy initiatives in foreign countries primarily enable the provision of enterprise (i.e., large business) services globally and wireless services in Mexico.

The General Data Protection Regulation went into effect in Europe in May of 2018. This regulation created a range of new compliance obligations and significantly increased financial penalties for noncompliance. AT&T processes and handles personal data of its customers and subscribers, employees of its enterprise customers and its employees.

U.S. Regulation

In the Telecommunications Act of 1996 (Telecom Act), Congress established a national policy framework intended to bring the benefits of competition and investment in advanced telecommunications facilities and services to all Americans by opening all telecommunications markets to competition and reducing or eliminating regulatory burdens that harm consumer welfare. Nonetheless, since then, the FCC and some state regulatory commissions have maintained, re-imposed or expanded certain regulatory requirements that were imposed decades ago on our traditional wireline subsidiaries when they operated as legal monopolies. Recently, the FCC’s regulatory approach has depended on control of the executive branch, eliminating a variety of antiquated and unnecessary regulations in a number of areas, while imposing or re-imposing regulations in other areas. We continue to support regulatory and legislative measures and efforts, at both the state and federal levels, to reduce inappropriate regulatory burdens that inhibit our ability to compete effectively and offer needed services to our customers, including initiatives to transition services from traditional networks to all IP-based networks. At the same time, we also seek to ensure that legacy regulations are not further extended to broadband or wireless services, which are subject to vigorous competition. We have organized the following discussion by service impacted.

Internet Until 2015, the FCC classified fixed and mobile consumer broadband internet access services as information services subject to minimal regulation. In 2015, the FCC reclassified such services as telecommunications services subject to broader regulation by the FCC and imposed “net neutrality rules.” Since then, the FCC has twice reversed course, most recently again reclassifying such services as telecommunications services subject to broader regulation by the FCC in an order adopted on April 25, 2024. Multiple trade associations and other parties challenged the FCC’s reclassification decision in appeals consolidated in the U.S. Court of Appeals for the Sixth Circuit. The trade associations petitioned the Sixth Circuit to stay the FCC’s order. On August 1, 2024, the Sixth Circuit issued a stay of the FCC order pending review of the appeals, holding that broadband providers are likely to succeed on the merits. On January 2, 2025, the Sixth Circuit issued an order granting the petition for review and setting aside the FCC net neutrality order, holding that broadband internet access service is an information service.

In 2021, New York enacted the Affordable Broadband Act (ABA), requiring ISPs offering “fixed” mass-market broadband service, including fixed wireless, to offer discounted plans to low-income customers. In June 2021, the ABA was enjoined by a federal district court, which found the ABA preempted by federal law. In April 2024, the Second Circuit overruled and vacated the district court order. The Supreme Court subsequently denied the trade association’s request for review. Under an agreement

28

with the New York Attorney General, the law began to be enforced on January 15, 2025. A number of state legislatures have since considered legislation regulating the rates of fixed broadband service, with Connecticut adopting a law requiring wireline ISPs that are state contractors to stand up a discounted broadband offering to low-income customers.

Since 2018, some states have adopted legislation or issued executive orders that established state net neutrality rules, including California, Maine, Minnesota, Vermont and Washington. Additional states may seek to impose net neutrality requirements in the future.

On November 15, 2023, the FCC adopted rules to “facilitate” equal access to broadband and prevent digital discrimination in broadband access. The rules, which became effective March 22, 2024, prohibit 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 apply prospectively to all aspects of an ISP’s service that could impact a consumer’s ability to access broadband, including deployment, marketing and credit checks, among other things. We may be required to answer complaints alleging that the company has violated the FCC rules, and those complaints may seek relief, including changes to our business practices or civil forfeitures that could result in significant costs or reputational harm. It is currently uncertain how the FCC will enforce these new rules. Several business associations have filed appeals challenging the rules and several of those appeals have been consolidated in the Eighth Circuit, which held oral argument on September 25, 2024.

Privacy-related legislation continues to be adopted or considered in a number of jurisdictions. Legislative, regulatory and litigation actions could result in increased costs of compliance, further regulation or claims against broadband internet access service providers and others, and increased uncertainty in the value and availability of data.

Infrastructure Investment On November 15, 2021, the Infrastructure Investment and Jobs Act (IIJA) was signed into law. The legislation appropriates $65,000 to support broadband deployment and adoption. The National Telecommunications and Information Agency (NTIA) is responsible for distributing more than $48,000 of this funding, including $42,500 in state grants for broadband deployment projects in unserved and underserved areas through the Broadband, Equity, Access and Deployment (BEAD) Programs. NTIA and states are in the process of administering these grants. Where appropriate, AT&T has applied for, and in some cases has been awarded, and may continue to apply for grants under this or other government infrastructure programs.

Wireless Industry-wide network densification and 5G technology expansion efforts, which are needed to satisfy extensive demand for video and internet access, will involve significant deployment of “small cell” equipment. This increases the importance of local permitting processes that allow for the placement of small cell equipment in the public right-of-way on reasonable timelines and terms. The FCC has adopted multiple Orders streamlining federal, state and local wireless structure review processes that had the tendency to delay and impede deployment of small cell and related infrastructure used to provide telecommunications and broadband services. Additional spectrum will be needed industrywide for 5G and future services. On July 4, 2025, as part of the omnibus reconciliation package (One Big Beautiful Bill (OBBB)), the President signed into law a provision that reauthorized, for 10 years, FCC statutory authority to conduct spectrum auctions and further required auction of 800 MHz of spectrum within eight years. The FCC’s implementation of this legislation will have a direct impact on whether the wireless industry has sufficient spectrum to support future wireless services. As a first step, in November 2025, the FCC opened a rulemaking to consider the auctioning of spectrum in the upper C-Band, as required by OBBB.

ACCOUNTING POLICIES AND STANDARDS

Critical Accounting Policies and Estimates Because of the size of the financial statement line items they relate to or the extent of judgment required by our management, some of our accounting policies and estimates have a more significant impact on our consolidated financial statements than others.

Pension and Postretirement Benefits Our actuarial estimates of retiree benefit expense and the associated significant weighted-average assumptions are discussed in Note 14. Our assumed weighted-average discount rates for pension and postretirement benefits of 5.50% and 5.30%, respectively, at December 31, 2025, reflect the hypothetical rate at which the projected benefit obligations could be effectively settled or paid out to participants. We determined our discount rate based on a range of factors, including a yield curve composed of the rates of return on several hundred high-quality, fixed income corporate bonds available at the measurement date and corresponding to the related expected durations of future cash outflows for the obligations. These bonds had an average rating of at least Aa3 or AA- by the nationally recognized statistical rating organizations, denominated in U.S. dollars, and generally not callable, convertible or index linked. 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.

29

Our expected long-term rate of return is 7.75% on pension plan assets and 4.00% on postretirement plan assets for 2025 and 2026. Our expected return on plan assets is calculated using the actual fair value of plan assets. If all other factors were to remain unchanged, we expect that a 0.50% decrease in the expected long-term rate of return would cause 2026 combined pension and postretirement cost to increase $139, which under our accounting policy would be adjusted to actual returns in the current year upon remeasurement of our retiree benefit plans.

We recognize gains and losses on pension and postretirement plan assets and obligations immediately in “Other income (expense) – net” in our consolidated statements of income. These gains and losses are generally measured annually as of December 31, and accordingly, will normally be recorded during the fourth quarter, unless an earlier remeasurement is required. Should actual experience differ from actuarial assumptions, the projected pension benefit obligation and net pension cost and accumulated postretirement benefit obligation and postretirement benefit cost would be affected in future years. See Note 14 for additional discussions regarding our assumptions.

Asset Valuations and Impairments Goodwill and other indefinite-lived intangible assets are not amortized but tested at least annually on October 1 for impairment. For impairment testing, we estimate fair values using models that predominantly rely on the expected cash flows to be derived from the reporting unit or use of the asset. Long-lived assets are reviewed for impairment whenever events or circumstances indicate that the book value may not be recoverable over the remaining life. Inputs underlying the expected cash flows include, but are not limited to, subscriber counts, revenue per user, capital investment and acquisition costs per subscriber, and ongoing operating costs. We based our assumptions on a combination of our historical results, trends, business plans and marketplace participant data.

Annual Goodwill Testing

Goodwill is tested on a reporting unit basis by comparing the estimated fair value of each reporting unit to its book value. If the fair value exceeds the book value, then no impairment is measured. We estimate fair values using an income approach (also known as a discounted cash flow model) and market multiple approaches. The income approach utilizes our future cash flow projections with a perpetuity value discounted at an appropriate weighted average cost of capital. The market multiple approach uses the multiples of publicly traded companies whose services are comparable to those offered by the reporting units.

As of October 1, 2025, the calculated fair values of the reporting units with remaining goodwill exceeded their book values in all circumstances in excess of 10%. If either the projected long-term growth rates declined by 0.5%, if the projected long-term EBITDA margin declined by 0.5%, or if the weighted average cost of capital increased by 0.5%, the fair values would still be higher than the book value of the reporting units.

The fair values of our remaining reporting units could be negatively impacted by future sustained declines in macroeconomic or business conditions, higher discount rates or declines in the value of AT&T stock and could result in goodwill impairment charges in future periods.

U.S. 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 of our wireless licenses exceeds the fair value. On a periodic basis, or if the qualitative assessment indicates potential impairment, we will perform a quantitative impairment test.

Our quantitative assessment involves assessing the fair value of U.S. wireless licenses using a discounted cash flow model (the Greenfield Approach) and a qualitative corroborative market approach based on auction prices, depending upon auction activity. The Greenfield Approach assumes a company initially owns only the wireless licenses and makes investments required to build an operation comparable to current use. These licenses are tested annually for impairment on an aggregated basis, consistent with their use on a national scope for the United States. For impairment testing, we assume subscriber and revenue growth will trend up to projected levels, with a long-term growth rate reflecting expected long-term inflation trends. We assume churn rates will initially exceed our current experience but decline to rates that are in line with industry-leading churn.

During 2025, we performed a qualitative impairment assessment that considered several factors, including macroeconomic conditions, industry and regulatory considerations, recent and projected performance of the reporting unit and the prior quantitative impairment testing results. The qualitative assessment indicated it is more likely than not that the fair value of our wireless licenses exceeded the book value; thus, a quantitative assessment was not performed.

For our most recent quantitative assessment, which was performed in 2024, we used a discount rate of 8.75%, based on the optimal long-term capital structure of a market participant and its associated cost of debt and equity for the licenses, to calculate the present value of the projected cash flows. The quantitative impairment assessment indicated the fair value of our wireless licenses exceeded their book value by more than 10%. If either the projected rate of long-term growth of cash flows or revenues

30

declined by 0.5%, or if the discount rate increased by 0.5%, the fair values of these wireless licenses would still be higher than the book value.

Income Taxes Our estimates of income taxes and the significant items giving rise to the deferred assets and liabilities are shown in Note 13 and reflect our assessment of actual future taxes to be paid on items reflected in the financial statements, giving consideration to both timing and probability of these estimates. Actual income taxes could vary from these estimates due to future changes in income tax law or the final review of our tax returns by federal, state or foreign tax authorities.

We use our judgment to determine whether it is more likely than not that we will sustain positions that we have taken on tax returns and, if so, the amount of benefit to initially recognize within our financial statements. We regularly review our uncertain tax positions and adjust our unrecognized tax benefits (UTBs) in light of changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law. These adjustments to our UTBs may affect our income tax expense. Settlement of uncertain tax positions may require use of our cash.

New Accounting Standards

See Note 1 for discussion of recently issued or adopted accounting standards.

OTHER BUSINESS MATTERS

Environmental We are subject from time to time to judicial and administrative proceedings brought by various governmental authorities under federal, state or local environmental laws. We reference in our Forms 10-Q and 10-K certain environmental proceedings that could result in monetary sanctions (exclusive of interest and costs) of three hundred thousand dollars or more. However, we do not believe that any of those currently pending will have a material adverse effect on our results of operations.

LIQUIDITY AND CAPITAL RESOURCES

We had $18,234 in cash and cash equivalents available at December 31, 2025, increasing $14,936 since December 31, 2024. Cash and cash equivalents included cash of $3,521 and money market funds and other cash equivalents of $14,713. Approximately $1,330 of our cash and cash equivalents were held in accounts outside of the United States and may be subject to restrictions on repatriation. Our cash and cash equivalents at December 31, 2025 was elevated in anticipation of the consummation of announced transactions. (See Note 6)

In 2025, cash inflows were primarily provided by cash receipts from operations, including cash from our sale and transfer of our receivables to third parties, and the disposition of our investment in DIRECTV. These inflows exceeded cash used to meet the needs of the business, including, but not limited to, payment of operating expenses, including higher device payments from higher sales volumes. The cash generated from operating activities was primarily used to fund capital improvements, make dividend payments to stockholders, repurchase preferred and common stock, and repay long-term debt. We maintain availability under our credit facilities and our commercial paper program to meet our short-term liquidity requirements.

Refer to “Contractual Obligations” discussion below for additional information regarding our cash requirements.

Cash Provided by Operating Activities

During 2025, cash provided by operating activities was $40,284, compared to $38,771 in 2024, driven by operational growth and lower cash tax payments. Partially offsetting this increase and lowering cash from operations during 2025 were voluntarily pension contributions of approximately $1,150 and advanced cash payments of about $900 to Frontier Communications, a subsidiary of Verizon Communications Inc.

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

31

permit earlier payments at their cost (referred to as supplier financing program). In addition, for payments to suppliers of handset inventory, as part of our working capital initiatives, we have arrangements that allow us to extend the stated payment terms by up to 90 days at an additional cost to us (referred to as direct supplier financing). The net impact of direct supplier financing, including principal and interest payments, was to improve cash from operating activities $443 in 2025 and $661 in 2024. All supplier financing payments are due within one year. (See Note 22)

Cash Used in Investing Activities

During 2025, cash used in investing activities totaled $18,777, consisting primarily of $20,842 (including interest during construction) for capital expenditures. During 2025, investing activities also included $148 of FirstNet sustainability receipts net of investment and $620 for our investment in a new strategic partner, DriveNets, related to wireline network transformation accounted for under the equity method of accounting.

On July 2, 2025, we completed the sale of our interest in DIRECTV to TPG and recorded a current note receivable of approximately $3,600, of which we had received $3,100 by the end of 2025, and a long-term note receivable of $500. (See Note 10)

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. Vendor financing payments were $1,181 in 2025, compared to $1,792 in 2024. Capital expenditures in 2025 were $20,842, and when including $1,181 cash paid for vendor financing, capital investment was $22,023 ($32 lower than the prior year).

The vast majority of our capital expenditures are spent on our networks, including product development and related support systems. In 2025, we placed $1,594 of productive assets in service under vendor financing arrangements (compared to $700 in 2024).

In November 2024, we agreed to purchase select spectrum licenses from United States Cellular Corporation (UScellular) for approximately $1,000, subject to closing conditions, including the consummation of UScellular’s sale of its wireless operations and select spectrum assets to T-Mobile US, Inc. We completed our acquisition of these licenses on January 13, 2026, with a cash payment of $1,018.

On May 21, 2025, we agreed to acquire substantially all of Lumen’s Mass Markets fiber business for $5,750 in 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.

On August 25, 2025, we agreed to purchase FCC licenses in the 600 MHz and 3.45 GHz bands from EchoStar 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. population.

The amount of capital expenditures is influenced by demand for services and products, capacity needs and network enhancements. In 2026, we expect that our capital investment, which includes capital expenditures and cash paid for vendor financing, will be in the $23,000 to $24,000 range.

32

Cash Provided by or Used in Financing Activities

In 2025, cash used in financing activities totaled $6,386 and was comprised of dividend payments, common and preferred stock repurchases, debt repayments and vendor financing payments, partially offset by issuances of long-term debt and issuances of preferred interests in a subsidiary.

A tabular summary of our debt activity during 2025 is as follows:

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. We had $134,718 of total notes and debentures outstanding at December 31, 2025. This also included Euro, British pound sterling, Canadian dollar, Australian dollar and Swiss franc denominated debt that totaled approximately $35,307.

At December 31, 2025, we had $9,011 of long-term debt maturing within one year. We had no outstanding commercial paper borrowings or other short-term borrowings on December 31, 2025.

During 2025, we paid $1,181 of cash under our vendor financing program, compared to $1,792 in 2024. Total vendor financing payables included in our December 31, 2025 consolidated balance sheet were $1,892, with $956 due within one year (in “Accounts payable and accrued liabilities”) and the remainder predominantly due within five years (in “Other noncurrent liabilities”).

During 2025, we repurchased approximately 159 million shares totaling $4,269 under our $10,000 common stock repurchase authorization approved by the Board of Directors in December 2024, excluding brokerage fees and the one percent excise tax imposed by the Inflation Reduction Act of 2022. At December 31, 2025, we had approximately $5,731 remaining under this 2024 repurchase authorization. On January 27, 2026, the Board approved an authorization to repurchase an additional $10,000 of common stock.

We paid dividends on common and preferred shares of $8,180 in 2025, compared with $8,208 in 2024. Dividends on common stock declared by our Board of Directors totaled $1.11 per share in 2025 and in 2024. Our dividend policy considers the expectations and requirements of stockholders, capital funding requirements of AT&T and long-term growth opportunities.

Financing activities in 2025 also included the issuance of $2,250 of nonconvertible cumulative preferred interests in Telco LLC, with the funds used to redeem all outstanding Series B preferred stock for $2,075 (see Note 16). We also received approximately $850 in upfront cash proceeds from a structured sale-leaseback of real estate.

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.

Our 2026 financing activities will focus on managing our debt level, funding pending acquisitions, paying dividends, subject to approval by our Board of Directors, and repurchasing common stock when deemed appropriate. We plan to fund our financing

33

uses of cash through a combination of cash from operations, issuance of debt and asset sales. The timing and mix of any debt issuance and/or refinancing will be guided by credit market conditions and interest rate trends.

Credit Facilities

The following summary of our various credit and loan agreements does not purport to be complete and is qualified in its entirety by reference to each agreement filed as exhibits to our Annual Report on Form 10-K.

We use credit facilities as a tool in managing our liquidity status. 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 the Revolving Credit Agreement or the Term Loan as of December 31, 2025. (See Note 11)

We also utilize other external financing sources, which include various credit arrangements supported by government agencies to support network equipment purchases as well as a commercial paper program.

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. As of December 31, 2025, we were in compliance with the covenants for our credit facilities.

Collateral Arrangements

Most of our counterparty collateral arrangements require cash collateral posting by AT&T only when derivative market values exceed certain thresholds. Under these arrangements, which cover the majority of our $35,741 derivative portfolio, counterparties are still required to post collateral. During 2025, we posted $11 of cash collateral, on a net basis. Cash postings under these arrangements vary with changes in credit ratings and netting agreements. (See Note 12)

Other

Our total capital consists of debt (long-term debt and debt maturing within one year), redeemable noncontrolling interest and stockholders’ equity. Our capital structure does not include debt issued by our equity method investments. At December 31, 2025, our debt ratio was 51.4%, compared to 50.7% at December 31, 2024 and 53.5% at December 31, 2023. The debt ratio is affected by the same factors that affect total capital, and reflects our recent debt issuances, repayments and reclassifications related to redemption of noncontrolling interests.

A significant amount of our cash outflows is related to tax items, acquisition of spectrum and benefits paid for current and former employees:

•Total taxes incurred, collected and remitted by AT&T during 2025 and 2024 were $16,326 and $16,968. These taxes include income, franchise, property, sales, excise, payroll, gross receipts and various other taxes and fees.

•Total domestic spectrum acquired primarily through FCC auctions, including cash, exchanged spectrum, auction deposits and spectrum relocation and clearing costs, was approximately $379 in 2025, $380 in 2024 and $2,940 in 2023.

•Total health and welfare benefits provided to certain active and retired employees and their dependents totaled approximately $2,490 in 2025 and $2,550 in 2024, with $483 paid from plan assets in 2025, compared to $736 in 2024. Of those benefits, approximately $2,220 related to medical and prescription drug benefits in 2025, compared to $2,290 in 2024. We paid $2,957 of pension benefits out of plan assets in 2025, compared to $2,447 in 2024.

34

Contractual Obligations

Our contractual obligations as of December 31, 2025, and the estimated timing of payment, are in the following table:

1Represents principal or payoff amounts of notes, debentures and credit agreement borrowings at maturity (see Note 11). Foreign debt includes the impact from hedges, when applicable.

2Includes credit agreement borrowings.

3We expect to fund the purchase obligations with cash on hand, which may include cash provided by operations or through incremental borrowings. The minimum commitment for certain obligations is based on termination penalties that could be paid to exit the contracts. (See Note 21)

4Represents operating lease payments (see Note 8).

5Represents contractual commitment to make sustainability payments over the 25-year contract. These sustainability payments represent our commitment to fund FirstNet’s operating expenses and future reinvestment in the network, which we own and operate. FirstNet has a statutory requirement to reinvest funds that exceed the agency’s operating expenses, which we anticipate to be $15,000. (See Note 20)

6The noncurrent portion of the UTBs is included in the “More than 5 Years” column, as we cannot reasonably estimate the timing or amounts of additional cash payments, if any, at this time (see Note 13).

7Represents future minimum payments under the Crown Castle and other arrangements (see Note 18), payables subject to extended payment terms (see Note 22) and finance lease payments (see Note 8).

8Excludes debt transactions, pending acquisitions and other investment funding completed after December 31, 2025 (see Note 6).

Certain items were excluded from this table because the year of payment is unknown and could not be reliably estimated, we believe the obligations are immaterial, or the settlement of the obligation will not require the use of cash. These items include: deferred income tax liability of $58,312 (see Note 13); net postemployment benefit obligations of $9,113 (including current portion); and other noncurrent liabilities of $7,155.

35

DISCUSSION AND RECONCILIATION OF NON-GAAP MEASURES

We also evaluate segment and business unit performance based on EBITDA, which is defined as operating income excluding depreciation and amortization, and/or EBITDA margin, which is defined as EBITDA divided by total revenue. EBITDA is used as part of our management reporting, and we believe EBITDA to be a relevant and useful measurement to our investors as it measures the cash generation potential of our business units. EBITDA does not give effect to depreciation and amortization expenses incurred in operating income nor is it burdened by cash used for debt service requirements and thus does not reflect available funds for distributions, reinvestment or other discretionary uses. There are material limitations to using these non-GAAP financial measures. EBITDA and EBITDA margin, as we have defined them, may not be comparable to similarly titled measures reported by other companies.

36