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, 2020 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 001-8610

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. Floating Rate Global Notes due August 3, 2020	T 20C	New York Stock Exchange
AT&T Inc. 1.875% Global Notes due December 4, 2020	T 20	New York Stock Exchange
AT&T Inc. 2.650% Global Notes due December 17, 2021	T 21B	New York Stock Exchange
AT&T Inc. 1.450% Global Notes due June 1, 2022	T 22B	New York Stock Exchange
AT&T Inc. 2.500% Global Notes due March 15, 2023	T 23	New York Stock Exchange
AT&T Inc. 2.750% Global Notes due May 19, 2023	T 23C	New York Stock Exchange
AT&T Inc. Floating Rate Global Notes due September 5, 2023	T 23D	New York Stock Exchange
AT&T Inc. 1.050% Global Notes due September 5, 2023	T 23E	New York Stock Exchange
AT&T Inc. 1.300% Global Notes due September 5, 2023	T 23A	New York Stock Exchange
AT&T Inc. 1.950% Global Notes due September 15, 2023	T 23F	New York Stock Exchange
AT&T Inc. 2.400% Global Notes due March 15, 2024	T 24A	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

		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
AT&T Inc. 2.900% Global Notes due December 4, 2026	T 26A	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. 3.550% 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. 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. 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. 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 [X] 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes [X] 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 emerging growth company. See definition of “accelerated filer,” “large accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[X]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[ ]
		Emerging growth company	[ ]

If an emerging growth company, indicate by checkmark 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.

Yes [ ] No [ ]

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

Yes [ ] No [X]

At April 30, 2020, there were 7,125 million 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,
		2020		2019
Operating Revenues
Service	$	38,883	$	40,684
Equipment		3,896		4,143
Total operating revenues		42,779		44,827
Operating Expenses
Cost of revenues
Equipment		4,092		4,502
Broadcast, programming and operations		6,847		7,652
Other cost of revenues (exclusive of depreciation and amortization shown separately below)		8,342		8,585
Selling, general and administrative		8,790		9,649
Depreciation and amortization		7,222		7,206
Total operating expenses		35,293		37,594
Operating Income		7,486		7,233
Other Income (Expense)
Interest expense		(2,018)		(2,141)
Equity in net income (loss) of affiliates		(6)		(7)
Other income (expense) – net		803		286
Total other income (expense)		(1,221)		(1,862)
Income Before Income Taxes		6,265		5,371
Income tax expense		1,302		1,023
Net Income		4,963		4,348
Less: Net Income Attributable to Noncontrolling Interest		(353)		(252)
Net Income Attributable to AT&T	$	4,610	$	4,096
Less: Preferred Stock Dividends		(32)		-
Net Income Attributable to Common Stock	$	4,578	$	4,096
Basic Earnings Per Share Attributable to Common Stock	$	0.63	$	0.56
Diluted Earnings Per Share Attributable to Common Stock	$	0.63	$	0.56
Weighted Average Number of Common Shares Outstanding – Basic (in millions)		7,187		7,313
Weighted Average Number of Common Shares Outstanding – with Dilution (in millions)		7,214		7,342
See Notes to Consolidated Financial Statements.

3

AT&T INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Dollars in millions
(Unaudited)
	Three months ended
	March 31,
	2020		2019
Net income	$	4,963	$	4,348
Other comprehensive income (loss), net of tax:
Foreign currency:
Translation adjustment (includes $(51) and $0 attributable to noncontrolling interest),
net of taxes of $(62) and $49		(1,854)		288
Securities:
Net unrealized gains, net of taxes of $22 and $5		66		16
Derivative instruments:
Net unrealized gains (losses), net of taxes of $(971) and $34		(3,657)		127
Reclassification adjustment included in net income, net of taxes of $0 and $2		-		11
Defined benefit postretirement plans:
Amortization of net prior service credit included in net income, net of taxes of $(151)
and $(113)		(461)		(346)
Other comprehensive income (loss)		(5,906)		96
Total comprehensive income (loss)		(943)		4,444
Less: Total comprehensive income attributable to noncontrolling interest		(302)		(252)
Total Comprehensive Income (Loss) Attributable to AT&T	$	(1,245)	$	4,192
See Notes to Consolidated Financial Statements.

4

AT&T INC.
CONSOLIDATED BALANCE SHEETS
Dollars in millions except per share amounts
	March 31,		December 31,
	2020		2019
Assets	(Unaudited)
Current Assets
Cash and cash equivalents	$	9,955	$	12,130
Accounts receivable - net of allowances for doubtful accounts of $1,651 and $1,235		19,908		22,636
Prepaid expenses		1,600		1,631
Other current assets		21,241		18,364
Total current assets		52,704		54,761
Noncurrent inventories and theatrical film and television production costs		13,276		12,434
Property, Plant and Equipment		329,187		333,538
Less: accumulated depreciation and amortization		(200,266)		(203,410)
Property, Plant and Equipment – Net		128,921		130,128
Goodwill		145,546		146,241
Licenses – Net		96,662		97,907
Trademarks and Trade Names – Net		23,293		23,567
Distribution Networks – Net		14,886		15,345
Other Intangible Assets – Net		19,623		20,798
Investments in and Advances to Equity Affiliates		3,606		3,695
Operating lease right-of-use assets		24,008		24,039
Other Assets		22,829		22,754
Total Assets	$	545,354	$	551,669
Liabilities and Stockholders’ Equity
Current Liabilities
Debt maturing within one year	$	17,067	$	11,838
Accounts payable and accrued liabilities		40,771		45,956
Advanced billings and customer deposits		5,960		6,124
Accrued taxes		2,169		1,212
Dividends payable		3,737		3,781
Total current liabilities		69,704		68,911
Long-Term Debt		147,202		151,309
Deferred Credits and Other Noncurrent Liabilities
Deferred income taxes		58,491		59,502
Postemployment benefit obligation		18,324		18,788
Operating lease liabilities		21,584		21,804
Other noncurrent liabilities		34,600		29,421
Total deferred credits and other noncurrent liabilities		132,999		129,515
Stockholders’ Equity
Preferred stock ($1 par value, 10,000,000 authorized):
Series A (48,000 issued and outstanding at March 31, 2020 and December 31, 2019)		-		-
Series B (20,000 issued and outstanding at March 31, 2020
and 0 issued and outstanding at December 31, 2019)		-		-
Series C (70,000 issued and outstanding at March 31, 2020
and 0 issued and outstanding at December 31, 2019)		-		-
Common stock ($1 par value, 14,000,000,000 authorized at March 31, 2020 and
December 31, 2019: issued 7,620,748,598 at March 31, 2020 and at December 31, 2019)		7,621		7,621
Additional paid-in capital		129,966		126,279
Retained earnings		58,534		57,936
Treasury stock (495,533,462 at March 31, 2020 and 366,193,458 at December 31, 2019,
at cost)		(17,957)		(13,085)
Accumulated other comprehensive income		(385)		5,470
Noncontrolling interest		17,670		17,713
Total stockholders’ equity		195,449		201,934
Total Liabilities and Stockholders’ Equity	$	545,354	$	551,669
See Notes to Consolidated Financial Statements.

5

AT&T INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Dollars in millions
(Unaudited)
	Three months ended
	March 31,
	2020		2019
Operating Activities
Net income	$	4,963	$	4,348
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		7,222		7,206
Amortization of television and film costs		2,269		2,497
Undistributed earnings from investments in equity affiliates		39		112
Provision for uncollectible accounts		780		592
Deferred income tax expense		259		753
Net (gain) loss on assets, net of impairments		(646)		(175)
Pension and postretirement benefit expense (credit)		(748)		(369)
Actuarial (gain) loss on pension and postretirement benefits		-		432
Changes in operating assets and liabilities:
Receivables		1,695		2,125
Other current assets, inventories and theatrical film and television production costs		(3,267)		(2,510)
Accounts payable and other accrued liabilities		(3,884)		(3,686)
Equipment installment receivables and related sales		535		652
Deferred customer contract acquisition and fulfillment costs		105		(375)
Postretirement claims and contributions		(111)		(193)
Other - net		(345)		(357)
Total adjustments		3,903		6,704
Net Cash Provided by Operating Activities		8,866		11,052
Investing Activities
Capital expenditures:
Purchase of property and equipment		(4,938)		(5,121)
Interest during construction		(28)		(61)
Acquisitions, net of cash acquired		(100)		(117)
Dispositions		118		10
(Purchases), sales and settlement of securities and investments, net		(6)		(1)
Advances to and investments in equity affiliates, net		(68)		(111)
Net Cash Used in Investing Activities		(5,022)		(5,401)
Financing Activities
Net change in short-term borrowings with original maturities of three months or less		1,742		(256)
Issuance of other short-term borrowings		1,390		296
Repayment of other short-term borrowings		-		(176)
Issuance of long-term debt		4,357		9,182
Repayment of long-term debt		(4,422)		(9,840)
Payment of vendor financing		(791)		(819)
Issuance of preferred stock		3,869		-
Purchase of treasury stock		(5,463)		(189)
Issuance of treasury stock		58		167
Dividends paid		(3,737)		(3,714)
Other		(3,102)		928
Net Cash Used in Financing Activities		(6,099)		(4,421)
Net (decrease) increase in cash and cash equivalents and restricted cash		(2,255)		1,230
Cash and cash equivalents and restricted cash beginning of year		12,295		5,400
Cash and Cash Equivalents and Restricted Cash End of Period	$	10,040	$	6,630
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)
	March 31, 2020			March 31, 2019
	Shares	Amount		Shares	Amount
Preferred Stock - Series A
Balance at beginning of year	-	$	-	-	$	-
Issuance of stock	-		-	-		-
Balance at end of period	-	$	-	-	$	-
Preferred Stock - Series B
Balance at beginning of year	-	$	-	-	$	-
Issuance of stock	-		-	-		-
Balance at end of period	-	$	-	-	$	-
Preferred Stock - Series C
Balance at beginning of year	-	$	-	-	$	-
Issuance of stock	-		-	-		-
Balance at end of period	-	$	-	-	$	-
Common Stock
Balance at beginning of year	7,621	$	7,621	7,621	$	7,621
Issuance of stock	-		-	-		-
Balance at end of period	7,621	$	7,621	7,621	$	7,621
Additional Paid-In Capital
Balance at beginning of year		$	126,279		$	125,525
Repurchase and acquisition of common stock			67			-
Issuance of preferred stock			3,869			-
Issuance of treasury stock			(47)			(77)
Share-based payments			(202)			(274)
Balance at end of period		$	129,966		$	125,174
Retained Earnings
Balance at beginning of year		$	57,936		$	58,753
Net income attributable to AT&T ($0.63 and $0.56
per diluted share)			4,610			4,096
Preferred stock dividends			(32)			-
Common stock dividends ($0.52 and $