UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-08610

AT&T INC.

Incorporated under the laws of the State of Delaware

I.R.S. Employer Identification Number 43-1301883

208 S. Akard St., Dallas, Texas 75202

Telephone Number: (210) 821-4105

Securities registered pursuant to Section 12(b) of the Act:

		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
Common Shares (Par Value $1.00 Per Share)	T	New York Stock Exchange
Depositary Shares, each representing a 1/1000th interest in a share of 5.000% Perpetual Preferred Stock, Series A	T PRA	New York Stock Exchange
Depositary Shares, each representing a 1/1000th interest in a share of 4.750% Perpetual Preferred Stock, Series C	T PRC	New York Stock Exchange
AT&T Inc. 2.400% Global Notes due March 15, 2024	T 24A	New York Stock Exchange
AT&T Inc. Floating Rate Global Notes due March 6, 2025	T 25A	New York Stock Exchange
AT&T Inc. 3.550% Global Notes due November 18, 2025	T 25B	New York Stock Exchange
AT&T Inc. 3.500% Global Notes due December 17, 2025	T 25	New York Stock Exchange
AT&T Inc. 0.250% Global Notes due March 4, 2026	T 26E	New York Stock Exchange
AT&T Inc. 1.800% Global Notes due September 5, 2026	T 26D	New York Stock Exchange
AT&T Inc. 2.900% Global Notes due December 4, 2026	T 26A	New York Stock Exchange
AT&T Inc. 1.600% Global Notes due May 19, 2028	T 28C	New York Stock Exchange
AT&T Inc. 2.350% Global Notes due September 5, 2029	T 29D	New York Stock Exchange
AT&T Inc. 4.375% Global Notes due September 14, 2029	T 29B	New York Stock Exchange
AT&T Inc. 2.600% Global Notes due December 17, 2029	T 29A	New York Stock Exchange
AT&T Inc. 0.800% Global Notes due March 4, 2030	T 30B	New York Stock Exchange
AT&T Inc. 3.950% Global Notes due April 30, 2031	T 31F	New York Stock Exchange
AT&T Inc. 2.050% Global Notes due May 19, 2032	T 32A	New York Stock Exchange

		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
AT&T Inc. 3.550% Global Notes due December 17, 2032	T 32	New York Stock Exchange
AT&T Inc. 5.200% Global Notes due November 18, 2033	T 33	New York Stock Exchange
AT&T Inc. 3.375% Global Notes due March 15, 2034	T 34	New York Stock Exchange
AT&T Inc. 4.300% Global Notes due November 18, 2034	T 34C	New York Stock Exchange
AT&T Inc. 2.450% Global Notes due March 15, 2035	T 35	New York Stock Exchange
AT&T Inc. 3.150% Global Notes due September 4, 2036	T 36A	New York Stock Exchange
AT&T Inc. 2.600% Global Notes due May 19, 2038	T 38C	New York Stock Exchange
AT&T Inc. 1.800% Global Notes due September 14, 2039	T 39B	New York Stock Exchange
AT&T Inc. 7.000% Global Notes due April 30, 2040	T 40	New York Stock Exchange
AT&T Inc. 4.250% Global Notes due June 1, 2043	T 43	New York Stock Exchange
AT&T Inc. 4.875% Global Notes due June 1, 2044	T 44	New York Stock Exchange
AT&T Inc. 4.000% Global Notes due June 1, 2049	T 49A	New York Stock Exchange
AT&T Inc. 4.250% Global Notes due March 1, 2050	T 50	New York Stock Exchange
AT&T Inc. 3.750% Global Notes due September 1, 2050	T 50A	New York Stock Exchange
AT&T Inc. 5.350% Global Notes due November 1, 2066	TBB	New York Stock Exchange
AT&T Inc. 5.625% Global Notes due August 1, 2067	TBC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

At April 25, 2024, there were 7,170,165,104 common shares outstanding.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AT&T INC.
CONSOLIDATED STATEMENTS OF INCOME
Dollars in millions except per share amounts
(Unaudited)
	Three months ended
	March 31,
	2024		2023
Operating Revenues
Service	$	24,842	$	24,617
Equipment	5,186		5,522
Total operating revenues	30,028		30,139
Operating Expenses
Cost of revenues
Equipment	5,143		5,658
Other cost of revenues (exclusive of depreciation and amortization shown separately below)	6,811		6,673
Selling, general and administrative	7,021		7,175
Asset impairments and abandonments and restructuring	159		—
Depreciation and amortization	5,047		4,631
Total operating expenses	24,181		24,137
Operating Income	5,847		6,002
Other Income (Expense)
Interest expense	(1,724)		(1,708)
Equity in net income of affiliates	295		538
Other income (expense) — net	451		935
Total other income (expense)	(978)		(235)
Income Before Income Taxes	4,869		5,767
Income tax expense	1,118		1,314
Net Income	3,751		4,453
Less: Net Income Attributable to Noncontrolling Interest	(306)		(225)
Net Income Attributable to AT&T	$	3,445	$	4,228
Less: Preferred Stock Dividends	(50)		(52)
Net Income Attributable to Common Stock	$	3,395	$	4,176
Basic Earnings Per Share Attributable to Common Stock	$	0.47	$	0.58
Diluted Earnings Per Share Attributable to Common Stock	$	0.47	$	0.57
Weighted Average Number of Common Shares Outstanding — Basic (in millions)	7,192		7,168
Weighted Average Number of Common Shares Outstanding — with Dilution (in millions)	7,193		7,474

See Notes to Consolidated Financial Statements.

3

AT&T INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Dollars in millions
(Unaudited)
	Three months ended
	March 31,
	2024		2023
Net income	$	3,751	$	4,453
Other comprehensive income (loss), net of tax:
Foreign currency:
Translation adjustment, net of taxes of $8 and $52	29		193
Securities:
Net unrealized gains (losses), net of taxes of $(2) and $8	(10)		23
Reclassification adjustment included in net income, net of taxes of $2 and $1	6		3
Derivative instruments:
Net unrealized gains (losses), net of taxes of $49 and $(43)	211		(152)
Reclassification adjustment included in net income, net of taxes of $3 and $3	12		12
Defined benefit postretirement plans:
Amortization of net prior service credit included in net income, net of taxes of $(123) and $(160)	(381)		(491)
Other comprehensive income (loss)	(133)		(412)
Total comprehensive income	3,618		4,041
Less: Total comprehensive income attributable to noncontrolling interest	(306)		(225)
Total Comprehensive Income Attributable to AT&T	$	3,312	$	3,816

See Notes to Consolidated Financial Statements.

4

AT&T INC.
CONSOLIDATED BALANCE SHEETS
Dollars in millions except per share amounts
	March 31,		December 31,
	2024		2023
Assets	(Unaudited)
Current Assets
Cash and cash equivalents	$	3,520	$	6,722
Accounts receivable – net of related allowances for credit loss of $463 and $499	9,577		10,289
Inventories	2,127		2,177
Prepaid and other current assets	15,221		17,270
Total current assets	30,445		36,458
Property, plant and equipment	339,115		339,891
Less: accumulated depreciation and amortization	(211,264)		(211,402)
Property, Plant and Equipment – Net	127,851		128,489
Goodwill – Net	67,854		67,854
Licenses – Net	127,423		127,219
Other Intangible Assets – Net	5,281		5,283
Investments in and Advances to Equity Affiliates	891		1,251
Operating Lease Right-Of-Use Assets	20,668		20,905
Other Assets	19,015		19,601
Total Assets	$	399,428	$	407,060
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	7,060	$	9,477
Accounts payable and accrued liabilities	31,973		35,852
Advanced billings and customer deposits	3,713		3,778
Dividends payable	2,088		2,020
Total current liabilities	44,834		51,127
Long-Term Debt	125,704		127,854
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes	58,820		58,666
Postemployment benefit obligation	8,743		8,734
Operating lease liabilities	17,291		17,568
Other noncurrent liabilities	23,441		23,696
Total deferred credits and other noncurrent liabilities	108,295		108,664
Redeemable Noncontrolling Interest	1,975		1,973
Stockholders’ Equity
Preferred stock ($1 par value, 10,000,000 authorized at March 31, 2024 and December 31, 2023):
Series A (48,000 issued and outstanding at March 31, 2024 and December 31, 2023)	—		—
Series B (20,000 issued and outstanding at March 31, 2024 and December 31, 2023)	—		—
Series C (70,000 issued and outstanding at March 31, 2024 and December 31, 2023)	—		—
Common stock ($1 par value, 14,000,000,000 authorized at March 31, 2024 and December 31, 2023: issued 7,620,748,598 at March 31, 2024 and December 31, 2023)	7,621		7,621
Additional paid-in capital	111,599		114,519
Retained (deficit) earnings	(1,570)		(5,015)
Treasury stock (450,713,156 at March 31, 2024 and 470,685,237 at December 31, 2023, at cost)	(15,277)		(16,128)
Accumulated other comprehensive income	2,167		2,300
Noncontrolling interest	14,080		14,145
Total stockholders’ equity	118,620		117,442
Total Liabilities and Stockholders’ Equity	$	399,428	$	407,060

See Notes to Consolidated Financial Statements.

5

AT&T INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in millions
(Unaudited)
	Three months ended
	March 31,
	2024		2023
Operating Activities
Net Income	$	3,751	$	4,453
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	5,047		4,631
Provision for uncollectible accounts	472		477
Deferred income tax expense	479		529
Net (gain) loss on investments, net of impairments	201		(93)
Pension and postretirement benefit expense (credit)	(471)		(670)
Asset impairments and abandonments and restructuring	159		—
Changes in operating assets and liabilities:
Receivables	512		620
Other current assets	629		364
Accounts payable and other accrued liabilities	(3,497)		(3,409)
Equipment installment receivables and related sales	24		(243)
Deferred customer contract acquisition and fulfillment costs	103		(22)
Postretirement claims and contributions	(54)		(89)
Other - net	192		130
Total adjustments	3,796		2,225
Net Cash Provided by Operating Activities	7,547		6,678
Investing Activities
Capital expenditures	(3,758)		(4,335)
Acquisitions, net of cash acquired	(211)		(291)
Dispositions	8		15
Distributions from DIRECTV in excess of cumulative equity in earnings	194		774
(Purchases), sales and settlements of securities and investments - net	1,079		19
Other - net	(273)		—
Net Cash Used in Investing Activities	(2,961)		(3,818)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less	1,933		(536)
Issuance of other short-term borrowings	491		3,627
Repayment of other short-term borrowings	(1,996)		—
Issuance of long-term debt	—		3,366
Repayment of long-term debt	(4,685)		(5,945)
Repayment of note payable to DIRECTV	—		(130)
Payment of vendor financing	(841)		(2,113)
Purchase of treasury stock	(157)		(188)
Issuance of treasury stock	—		3
Dividends paid	(2,034)		(2,014)
Other - net	(526)		219
Net Cash Used in Financing Activities	(7,815)		(3,711)
Net increase (decrease) in cash and cash equivalents and restricted cash	$	(3,229)	$	(851)
Cash and cash equivalents and restricted cash beginning of year	6,833		3,793
Cash and Cash Equivalents and Restricted Cash End of Period	$	3,604	$	2,942
See Notes to Consolidated Financial Statements.

6

AT&T INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
Dollars and shares in millions except per share amounts
(Unaudited)
	Three months ended
	March 31, 2024			March 31, 2023
	Shares	Amount		Shares	Amount
Preferred Stock - Series A
Balance at beginning of period	—	$	—	—	$	—
Balance at end of period	—	$	—	—	$	—
Preferred Stock - Series B
Balance at beginning of period	—	$	—	—	$	—
Balance at end of period	—	$	—	—	$	—
Preferred Stock - Series C
Balance at beginning of period	—	$	—	—	$	—
Balance at end of period	—	$	—	—	$	—
Common Stock
Balance at beginning of period	7,621	$	7,621	7,621	$	7,621
Balance at end of period	7,621	$	7,621	7,621	$	7,621
Additional Paid-In Capital
Balance at beginning of period		$	114,519		$	123,610
Preferred stock dividends		(98)			(98)
Common stock dividends ($0.2775 and $0.2775 per share)		(2,003)			(2,002)
Issuance of treasury stock		(413)			(365)
Share-based payments		(266)			(371)
Redemption or reclassification of interest held by noncontrolling owners		(140)			—
Balance at end of period		$	111,599		$	120,774
Retained (Deficit) Earnings
Balance at beginning of period		$	(5,015)		$	(19,415)
Net income attributable to AT&T		3,445			4,228
Balance at end of period		$	(1,570)		$	(15,187)

See Notes to Consolidated Financial Statements.

7

AT&T INC.
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - continued
Dollars and shares in millions except per share amounts
(Unaudited)
	Three months ended
	March 31, 2024			March 31, 2023
	Shares	Amount		Shares	Amount
Treasury Stock
Balance at beginning of period	(471)	$	(16,128)	(493)	$	(17,082)
Repurchase and acquisition of common stock	(9)	(157)		(10)	(188)
Reissuance of treasury stock	29	1,008		31	1,104
Balance at end of period	(451)	$	(15,277)	(472)	$	(16,166)
Accumulated Other Comprehensive Income Attributable to AT&T, net of tax
Balance at beginning of period		$	2,300		$	2,766
Other comprehensive income (loss) attributable to AT&T		(133)			(412)
Balance at end of period		$	2,167		$	2,354
Noncontrolling Interest1
Balance at beginning of period		$	14,145		$	8,957
Net income attributable to noncontrolling interest		270			225
Redemption of noncontrolling interest		(17)			—
Distributions		(318)			(232)
Balance at end of period		$	14,080		$	8,950
Total Stockholders' Equity at beginning of period		$	117,442		$	106,457
Total Stockholders' Equity at end of period		$	118,620		$	108,346
1Excludes redeemable noncontrolling interest

See Notes to Consolidated Financial Statements.

8

AT&T INC.

MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Dollars in millions except per share amounts

NOTE 1. PREPARATION OF INTERIM FINANCIAL STATEMENTS

Basis of Presentation Throughout this document, AT&T Inc. is referred to as “we,” “AT&T” or the “Company.” The consolidated financial statements include the accounts of the Company and subsidiaries and affiliates which we control. AT&T is a holding company whose subsidiaries and affiliates operate worldwide in the telecommunications and technology industries. You should read this document in conjunction with the consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2023. The results for the interim periods are not necessarily indicative of those for the full year. These consolidated financial statements include all adjustments that are necessary to present fairly the results for the presented interim periods, consisting of normal recurring accruals and other items.

All significant intercompany transactions are eliminated in the consolidation process. Investments in subsidiaries and partnerships which we do not control but have significant influence are accounted for under the equity method. Earnings from certain investments accounted for using the equity method are included in our results on a one quarter lag. We also record our proportionate share of our equity method investees’ other comprehensive income (OCI) items, including translation adjustments.

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires management to make estimates and assumptions, including estimates of fair value, probable losses and expenses, that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

NOTE 2. EARNINGS PER SHARE

A reconciliation of the numerators and denominators of basic and diluted earnings per share for the three months ended March 31, 2024 and 2023, is shown in the table below:

	Three months ended
	March 31,
	2024		2023
Numerators
Numerator for basic earnings per share:
Net Income Attributable to Common Stock	$	3,395	$	4,176
Dilutive potential common shares:
Mobility preferred interests	—		72
Share-based payment	—		4
Numerator for diluted earnings per share	$	3,395	$	4,252
Denominators (000,000)
Denominator for basic earnings per share:
Weighted average number of common shares outstanding	7,192		7,168
Dilutive potential common shares:
Mobility preferred interests (in shares)	—		284
Share-based payment (in shares)	1		22
Denominator for diluted earnings per share	7,193		7,474

On April 5, 2023, we repurchased all our Series A Cumulative Perpetual Preferred Membership Interests in AT&T Mobility II LLC (Mobility preferred interests). For periods prior to repurchase, under Accounting Standards Update (ASU) No. 2020-06, “Debt—Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (ASU 2020-06), the ability to settle the Mobility preferred interests in stock was reflected in our diluted earnings per share calculation.

9

AT&T INC.

MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

NOTE 3. OTHER COMPREHENSIVE INCOME

Changes in the balances of each component included in accumulated OCI are presented below. All amounts are net of tax and exclude noncontrolling interest.

	Foreign Currency Translation Adjustment			Net Unrealized Gains (Losses) on Securities			Net Unrealized Gains (Losses) on Derivative Instruments			Defined Benefit Postretirement Plans			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2023	$	(1,337)		$	(57)		$	(1,029)		$	4,723		$	2,300
Other comprehensive income (loss) before reclassifications	29			(10)			211			—			230
Amounts reclassified from accumulated OCI	—		1	6		1	12		2	(381)		3	(363)
Net other comprehensive income (loss)	29			(4)			223			(381)			(133)
Balance as of March 31, 2024	$	(1,308)		$	(61)		$	(806)		$	4,342		$	2,167
	Foreign Currency Translation Adjustment			Net Unrealized Gains (Losses) on Securities			Net Unrealized Gains (Losses) on Derivative Instruments			Defined Benefit Postretirement Plans			Accumulated Other Comprehensive Income (Loss)
Balance as of December 31, 2022	$	(1,800)		$	(90)		$	(1,998)		$	6,654		$	2,766
Other comprehensive income (loss) before reclassifications	193			23			(152)			—			64
Amounts reclassified from accumulated OCI	—		1	3		1	12		2	(491)		3	(476)
Net other comprehensive income (loss)	193			26			(140)			(491)			(412)
Balance as of March 31, 2023	$	(1,607)		$	(64)		$	(2,138)		$	6,163		$	2,354
1(Gains) losses are included in “Other income (expense) - net” in the consolidated statements of income.
2(Gains) losses are primarily included in “Interest expense” in the consolidated statements of income (see Note 7).
3The amortization of prior service credits associated with postretirement benefits are included in “Other income (expense) - net” in the consolidated statements of income (see Note 6).

NOTE 4. SEGMENT INFORMATION

Our segments are comprised of strategic business units or other operations that offer products and services to different customer segments over various technology platforms and/or in different geographies that are managed accordingly. We have two reportable segments: Communications and Latin America.

We also evaluate segment and business unit performance based on EBITDA and/or EBITDA margin, which is defined as operating income excluding depreciation and amortization. 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. EBITDA margin is EBITDA divided by total revenue.

10

AT&T INC.

MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

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

•Mobility provides nationwide wireless service and equipment.

•Business Wireline provides advanced ethernet-based fiber services, IP Voice and managed professional services, as well as traditional voice and data services and related equipment to business customers. In the first quarter of 2024, we began offering our fixed wireless access product that provides internet services delivered over our 5G wireless network where available.

•Consumer Wireline provides broadband services, including fiber connections that provide multi-gig services to residential customers in select locations and our fixed wireless access product that provides home internet services delivered over our 5G wireless network where available. Consumer Wireline also provides legacy telephony voice communication services.

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

Corporate and Other reconciles our segment results to consolidated operating income and income before income taxes.

Corporate includes:

•DTV-related retained costs, which are costs previously allocated to the Video business that were retained after the transaction, net of reimbursements from DIRECTV Entertainment Holdings, LLC (DIRECTV) under transition service agreements.

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

•Securitization fees associated with our sales of receivables (see Note 8).

•Value portfolio, which are businesses no longer integral to our operations or which we no longer actively market.

Other items consists of:

•Certain significant items, which includes items associated with the merger and integration of acquired or divested businesses, including amortization of intangible assets, employee separation charges associated with voluntary and/or strategic offers, asset impairments and abandonments and restructuring, and other items for which the segments are not being evaluated.

“Interest expense” and “Other income (expense) – net” are managed only on a total company basis and are, accordingly, reflected only in consolidated results.

11

AT&T INC.

MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended March 31, 2024
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	20,594	$	11,639	$	8,955	$	2,487	$	6,468
Business Wireline	4,913		3,487		1,426		1,362		64
Consumer Wireline	3,350		2,256		1,094		881		213
Total Communications	28,857		17,382		11,475		4,730		6,745
Latin America - Mexico	1,063		883		180		177		3
Segment Total	29,920		18,265		11,655		4,907		6,748
Corporate and Other
Corporate:
DTV-related retained costs	—		134		(134)		120		(254)
Parent administration support	—		392		(392)		1		(393)
Securitization fees	26		165		(139)		—		(139)
Value portfolio	82		26		56		4		52
Total Corporate	108		717		(609)		125		(734)
Certain significant items	—		152		(152)		15		(167)
Total Corporate and Other	108		869		(761)		140		(901)
AT&T Inc.	$	30,028	$	19,134	$	10,894	$	5,047	$	5,847

For the three months ended March 31, 2023
	Revenues		Operations and Support Expenses		EBITDA		Depreciation and Amortization		Operating Income (Loss)
Communications
Mobility	$	20,582	$	12,213	$	8,369	$	2,098	$	6,271
Business Wireline	5,331		3,623		1,708		1,330		378
Consumer Wireline	3,239		2,284		955		861		94
Total Communications	29,152		18,120		11,032		4,289		6,743
Latin America - Mexico	883		738		145		175		(30)
Segment Total	30,035		18,858		11,177		4,464		6,713
Corporate and Other
Corporate:
DTV-related retained costs	—		169		(169)		144		(313)
Parent administration support	(9)		374		(383)		1		(384)
Securitization fees	19		121		(102)		—		(102)
Value portfolio	94		28		66		5		61
Total Corporate	104		692		(588)		150		(738)
Certain significant items	—		(44)		44		17		27
Total Corporate and Other	104		648		(544)		167		(711)
AT&T Inc.	$	30,139	$	19,506	$	10,633	$	4,631	$	6,002

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

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

	Three months ended March 31,
	2024		2023
Communications	$	6,745	$	6,743
Latin America	3		(30)
Segment Operating Income	6,748		6,713
Reconciling Items:
Corporate	(734)		(738)
Transaction and other costs	(32)		—
Amortization of intangibles acquired	(15)		(17)
Asset impairments and abandonments and restructuring	(159)		—
Benefit-related gains (losses)	39		44
AT&T Operating Income	5,847		6,002
Interest expense	1,724		1,708
Equity in net income of affiliates	295		538
Other income (expense) — net	451		935
Income Before Income Taxes	$	4,869	$	5,767

NOTE 5. REVENUE RECOGNITION

Revenue Categories

The following tables set forth reported revenue by category and by business unit:

For the three months ended March 31, 2024
	Communications
	Mobility		Business Wireline		Consumer Wireline		Latin America		Corporate & Other		Total
Wireless service	$	15,994	$	—	$	—	$	690	$	—	$	16,684
Business service	—		4,700		—		—		—		4,700
Broadband	—		—		2,722		—		—		2,722
Legacy voice and data	—		—		342		—		62		404
Other	—		—		286		—		46		332
Total Service	15,994		4,700		3,350		690		108		24,842
Equipment	4,600		213		—		373		—		5,186
Total	$	20,594	$	4,913	$	3,350	$	1,063	$	108	$	30,028

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MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

For the three months ended March 31, 2023
	Communications
	Mobility		Business Wireline		Consumer Wireline		Latin America		Corporate & Other		Total
Wireless service	$	15,483	$	—	$	—	$	591	$	—	$	16,074
Business service	—		5,200		—		—		—		5,200
Broadband	—		—		2,527		—		—		2,527
Legacy voice and data	—		—		396		—		83		479
Other	—		—		316		—		21		337
Total Service	15,483		5,200		3,239		591		104		24,617
Equipment	5,099		131		—		292		—		5,522
Total	$	20,582	$	5,331	$	3,239	$	883	$	104	$	30,139

Deferred Customer Contract Acquisition and Fulfillment Costs

Costs to acquire and fulfill customer contracts, including commissions on service activations for our Mobility, Business Wireline and Consumer Wireline services, are deferred and amortized over the contract period or expected customer relationship life, which typically ranges from three years to five years.

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

	March 31,		December 31,
Consolidated Balance Sheets	2024		2023
Deferred Acquisition Costs
Prepaid and other current assets	$	3,187	$	3,233
Other Assets	4,102		4,077
Total deferred customer contract acquisition costs	$	7,289	$	7,310
Deferred Fulfillment Costs
Prepaid and other current assets	$	2,274	$	2,340
Other Assets	3,640		3,843
Total deferred customer contract fulfillment costs	$	5,914	$	6,183

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,
Consolidated Statements of Income	2024		2023
Deferred acquisition cost amortization	$	894	$	830
Deferred fulfillment cost amortization	660		678

Contract Assets and Liabilities

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

Our contract assets primarily relate to our wireless businesses. Promotional equipment sales where we offer handset credits, which are allocated between equipment and service in proportion to their standalone selling prices, when customers commit to a

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MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

specified service period result in additional contract assets recognized. These contract assets will amortize over the service contract period, resulting in lower future service revenue.

When consideration is received in advance of the delivery of goods or services, a contract liability is recorded. Reductions in the contract liability will be recorded as we satisfy the performance obligations.

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

	March 31,		December 31,
Consolidated Balance Sheets	2024		2023
Contract asset	$	6,520	$	6,518
Current portion in “Prepaid and other current assets”	3,627		3,549
Contract liability	3,896		3,994
Current portion in “Advanced billings and customer deposits”	3,594		3,666

Our beginning of period contract liability recorded as customer contract revenue during 2024 was $2,675.

Remaining Performance Obligations

Remaining performance obligations represent services we are required to provide to customers under bundled or discounted arrangements, which are satisfied as services are provided over the contract term. In determining the transaction price allocated, we do not include non-recurring charges and estimates for usage, nor do we consider arrangements with an original expected duration of less than one year, which are primarily prepaid wireless and residential internet agreements.

Remaining performance obligations associated with business contracts reflect recurring charges billed, adjusted to reflect estimates for sales incentives and revenue adjustments. Performance obligations associated with wireless contracts are estimated using a portfolio approach in which we review all relevant promotional activities, calculating the remaining performance obligation using the average service component for the portfolio and the average device price. As of March 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $38,866, of which we expect to recognize approximately 80% by the end of 2025, with the balance recognized thereafter.

NOTE 6. PENSION AND POSTRETIREMENT BENEFITS

Many of our employees are covered by one of our noncontributory pension plans. We also provide certain medical, dental, life insurance and death benefits to certain retired employees under various plans and accrue actuarially determined postretirement benefit costs. Our objective in funding these plans, in combination with the standards of the Employee Retirement Income Security Act of 1974, as amended (ERISA), is to accumulate assets sufficient to provide benefits described in the plans to employees upon their retirement. We do not have significant funding requirements in 2024.

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.

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MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

The following table details qualified pension and postretirement benefit costs included in the accompanying consolidated statements of income. The service cost component of net periodic pension (credit) cost is recorded in operating expenses in the consolidated statements of income while the remaining components are recorded in “Other income (expense) – net.”

	Three months ended
	March 31,
	2024		2023
Pension cost:
Service cost – benefits earned during the period	$	122	$	121
Interest cost on projected benefit obligation	396		516
Expected return on assets	(553)		(714)
Amortization of prior service credit	(22)		(33)
Net pension (credit) cost	$	(57)	$	(110)
Postretirement cost:
Service cost – benefits earned during the period	$	5	$	6
Interest cost on accumulated postretirement benefit obligation	77		85
Expected return on assets	(14)		(33)
Amortization of prior service credit	(482)		(618)
Net postretirement (credit) cost	$	(414)	$	(560)
Combined net pension and postretirement (credit) cost	$	(471)	$	(670)

We also provide senior- and middle-management employees with nonqualified, unfunded supplemental retirement and savings plans. Net supplemental pension benefits costs not included in the table above were $17 and $19 in the first quarter ended 2024 and 2023, respectively.

NOTE 7. FAIR VALUE MEASUREMENTS AND DISCLOSURE

The Fair Value Measurement and Disclosure framework in ASC 820, “Fair Value Measurement,” provides a three-tiered fair value hierarchy based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs.

The level of an asset or liability within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Our valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.

The valuation methodologies described above may produce a fair value calculation that may not be indicative of future net realizable value or reflective of future fair values. We believe our valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. There have been no changes in the methodologies used since December 31, 2023.

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MARCH 31, 2024

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - Continued

Dollars in millions except per share amounts

Long-Term Debt and Other Financial Instruments

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

	March 31, 2024				December 31, 2023
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Notes and debentures1	$	128,533	$	121,877	$	133,402	$	128,474
Commercial paper	2,430		2,430		2,091		2,091
Investment securities2	2,947		2,947		2,836		2,836
1Includes credit agreement borrowings.
2Excludes investments accounted for under the equity method.

The carrying amount of debt with an original maturity of less than one year approximates fair value. The fair value measurements used for notes and debentures are considered Level 2 and are determined using various methods, including quoted prices for identical or similar securities in both active and inactive markets.

Following is the fair value leveling for investment securities that are measured at fair value and derivatives as of March 31, 2024 and December 31, 2023. 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, 2024
	Level 1		Level 2		Level 3		Total
Equity Securities
Domestic equities	$	1,053	$	—	$	—	$	1,053
International equities	276		—		—		276
Fixed income equities	208		—		—		208
Available-for-Sale Debt Securities	—		1,188		—		1,188
Asset Derivatives